Tara Perkins – The Globe and Mail

Sales of existing homes picked up in the Toronto area during March after a sluggish winter, coming in 7.2% higher than a year earlier.

Comment: Yeah, the sluggish winter than saw sales and prices rise every month. The sluggish winter with an 80% jump in new condo sales in January. Sure, that was sluggish all right.

But, even with the gain, sales remain a touch below their average level for this time of year.

Comment: They do? That’s odd, seeing as March sales were up 7.2% over last year. We had records set in 2010, 2011 was the 2nd best ever. Then March 2013 dropped due to the new mortgage rules, as happened with 9 other months in late 2012 and early 2013. So what is the average? March is a crazy month, with all sorts of swings. But the trend seems to always be up, but for the one month last year.

Economists are watching to see whether the slow pace of sales across Canada through the winter month was largely related to the cold weather. Spring is traditionally the time of year when home sales are the highest, and as such March’s numbers are being closely watched for hints of what might unfold.

Comment: Slow pace of sales? Uh huh… Latest CREA stats show Feb sales rising 0.3% over January and up 1.9% over February 2013. With sales rising over 10%. Yeah, that seems slow and sluggish.

Data is still trickling out from local real estate boards across the country, and full national numbers won’t be released until mid-month. This week Toronto and Vancouver have both reported that March’s sales were up from a year earlier and from February. But sales levels in both cities remain below their average level of the last ten years.

Comment: I could only find data for the past 9 years, but here are the numbers I found for March sales from TREB:

2014: 8,081
2013: 7,765
2012: 9,690
2011: 9,262
2010: 10,430
2009: 6,171
2008: 6,631
2007: 8,518
2006: 8,707

For an average of 8,362. Sure, this month’s total of 8,081 is a touch below that, but it is hard to take an average of a value that swings from 6,171 to 10,430 – more than 40%. Different years had different mortgage rules – note the drop from 2007 to 2008 as 40-year amortizations were eliminated. Sales also fell in 2011 as amortizations were lowered from 35 years to 30. Now we have a 25-year amortization max. Prices have also risen 28.3% from $434,696 in March 2010 to $557,684 last month, which obviously has a major influence on sales. Finally, new listings in March 2010 had grown 42% over March 2009, while last month saw new listings fall by 1.4%. Fewer properties on the market with much higher prices and tighter mortgage rules can certainly explain why March sales are lower than they have been in the past. That is the long and correct answer. As opposed to the shorter – and incorrect – assumption that this is (yet again) the beginning of some sort of decline.

The Toronto area saw 8,081 existing homes change hands last month, the local real estate board reported Thursday. That’s just shy of the ten-year average level of sales for March, which is 8,107.

Comment: Not sure where you got 2005 numbers, but they would have had to be quite low to drag the average down that much. Ten years at 8,107 means 81,070 over that period. Subtract the sum of the above and you get 5,815. The lowest in 10 years, oh my god, the Toronto real estate market must have collapsed in 2005! Wait, no it didn’t… We are now at almost 40% more sales than 10 years ago. But no, somehow that gets spun into slowing sales and some sort of warning. Right…

The average selling price, meanwhile, continued to climb, coming in nearly 8% higher than a year earlier, at $557,684.

Comment: And 66% higher than 2005’s yearly average price of $335,907.

Detached homes in the downtown area covered by the 416 area code saw average selling prices rise 6.8% from March 2013, while the average selling price of a downtown condo was up 5.1%. In the suburban 905 area code detached homes and condos saw increases of 9.3% and 4.3% respectively.

The local realtors’ board expressed surprise at the strength of prices. “If the pace of price growth experienced in the first quarter is sustained, [The Toronto Real Estate Board] may revise its outlook for the average selling price,” Jason Mercer, senior manager of market analysis, stated in a press release.

Comment: They also noted that “Sales growth was much stronger in March compared to the first two months of the first quarter. Sales for Q1 as a whole were up by 3% compared to the first three months of 2013.” And yet the takeaway seems to be that last month’s sales were 0.3% lower than the 10-year average. A total of 26 sales below the average.

The numbers come after Vancouver’s real estate board said on Wednesday that sales of existing homes in the Vancouver area during March were up 12.5% from a year earlier, and 4.4% from the prior month.

But the pickup in Vancouver still left that city’s sales 17.2% below the 10-year average level for March.

The benchmark price of homes in Metro Vancouver was up 3.7% from a year earlier, at $615,200.

Total sales in the Calgary area, meanwhile, were up 20.8% in March, with the average price rising 5.9% to $478,157 and the benchmark price rising 9.47% to $431,100.

Calgary is largely expected to buck the national trends this year, with its market forecasted to grow at a stronger pace than most of the country.

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
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