Toronto Real Estate Market Update – July 2014

July’s resale market performance was one of the strongest on record for the greater Toronto area, even though it was the third monthly drop in reported sales. In May 11,034 sales were reported, 10,158 in June and July 9,198. The monthly decline is consistent with seasonal patterns. The strongest month is usually May, with sales dropping during the summer months as both buyers and sellers focus on vacations and enjoying our limited, but warmer weather. A further drop in sales in August is also a part of the typical selling pattern.
Having said that the 9,198 residential resales achieved in July now has the greater Toronto market on track to post the strongest year in the history of statics keeping by the Toronto Real Estate Board. In 2007, the year before the recession which started in the fall of 2008, 93,193 properties were reported sold. On no occasion have sales ever topped 90,000 except for 2007. The second best year on record is 2011 with 89,096 residential properties reported sold. To date 57,910 properties have been reported sold in 2014. At this pace the year should achieve 94,000 to 94,500 sales making 2014 the best year on record.
Strong prices invariably follow strong sales markets. In July the average sale price came in at $550,700, 7.5 percent higher than the $512,286 recorded in 2013. The highest monthly sale price on record was achieved in May of this year. It came in at $585,037. It is not uncommon for the average sale price to decline in June and July. Expect the average sale price to come in at approximately $550,000 in August, before jumping to $ 575,000 or more in September. It is unlikely that the record average sale price of $585,037 will be exceeded during the remainder of this year.
In July all properties sold (on average) in 24 days. Although slower than June’s  pace at 21 days, 24 days is exceptionally fast for July. For example last July it took 28 days for all properties to sell. In some trading areas days on the market were even faster. The east end neighborhoods close to the central core of the city remain frenzied. In neighborhoods like Riverdale, Leslieville, and the Beach the pace of sales taking place was on average a little over 13 days. As has been reported before, condominium apartment sales are not as quick as sales of detached and semi-detached properties.
Oakville continues to be the most expensive area to live in the greater Toronto area. The average sale price for all properties sold in Oakville in July was $771,535. In the City of Toronto central properties (excluding condominium apartments) were the most expensive for buyers to purchase. Detached homes sold, on average for $ 1,360,816. Semi-detached homes sold for $751,287. Not only did they sell for these strong prices, but sold quickly, in only 21 and 14 days respectively. All semi-detached homes in the central districts sold for 103 percent of the initial asking price.
Condominium apartment sales in the City of Toronto are continuing to accelerate. In July condominium apartment sales were up 13.4 percent compared to the same month last year. In June sales were up 21.4 percent compared to June 2013. The 13.4 percent increase in July was the largest of any housing type. Second were townhouse sales which increased by 8.3 percent.
With average sale prices continuing to rise, condominium apartments may be the last refuge for some buyers, especially first time buyers. The average sale price for condominium apartments in July was $ 379,002, up 4.7 percent over July 2013. Compared to the average sale price for all other properties ($550,700), condominium apartment prices are approximately 45 percent less expensive. If interest rates were to rise, condominium apartments will become even more attractive.
Low inventory levels continue to be responsible, at least in part, for the strong sales achieved this year. In July 15,187 new properties came to market. Although this number was 8.2 percent greater than new listing that were placed on the market in July 2013, at the beginning of August there were still fewer available properties for buyers to purchase than last year. Last year there were 20,514 properties available for sale. This year there are only 19,549, 4.7 percent fewer. Until the number of new listings coming to market outpaces sales over a period of months, sales will continue at their  brisk pace and average sale prices will continue to rise by about 6 to 8 percent higher than the same month last year. Fortunately historically low interest rates are continuing to keep home ownership within the grasp of most buyers. A  family with gross family income of just over $ 80,000 and a modest down payment still qualifies to purchase an average priced condominium apartment in the City of Toronto.
Of the 9,198 reported sales for July only 3,315 were in the City of Toronto. The other 5,883 sales representing 64 percent of all property sales were in the 905 region. It may be time and descriptively more accurate for the Toronto Real Estate Board to change its name to the Greater Toronto Real Estate Board.