With the impending return of warmer weather, the migratory birds and our lengthening daylight hours, the Central Toronto Real Estate Market continues to gain momentum. We currently find ourselves in the crest of the first bell curve of the annual real estate cycle. The Toronto Real Estate Board reported that March 2011 was the second best March on record, even though it was 11% less than last year, in terms of the number of transactions. Historically, it is during this time of the year, after the passing of the private and public school March breaks, that we start to see increased activity in the market. Specifically pertaining to this year, we have witnessed a shortage of listings, and while buyers have been plentiful, many have been unsuccessful in fulfilling their needs and requirements.
In economic terms, demand has exceeded supply. Surprisingly, in light of the supply-demand inequity, the market did not migrate to a full seller’s market. The threat of rising interest rates may have tempered this occurrence as the market remained somewhat balanced. In the last few weeks, we have started to see listing inventories grow to levels not seen in quite some time. Well priced properties are often going in competition as many buyers have waited on the sidelines patiently waiting for properties meeting their criteria. Sellers’ with over-priced properties are finding their homes languishing and often stagnating.
Pricing strategy is a key element in the successful sale of properties in the Central Toronto market. Market savvy listing agents understand and counsel their sellers’ on the strategic importance of proceeding with offer presentation dates based on individual property variables. On the other side of the equation, the media and the Toronto Real Estate Board have been educating buyers on the importance of a signed B.R.A. (Buyer Representation Agreement) ensuring their interests are being looked after and their agency representation is complete.
On a macro-economic level, according to TD Economics, the Bank of Canada does not appear to be under pressure to resume interest rate increases in the near future. The impact of higher inflationary costs and the rising Canadian dollars are being watched very closely. TD Economics predicts that the next round of interest rate increases will likely occur in July.
From a Central Toronto real estate market perspective, we are still in the midst of historically low interest rates; are still a destination city for immigrants and investors looking for a safe haven; and our house prices are globally well situated. The prognosis is good for a solid spring market in Central Toronto.
