The numbers are in for November and it isn’t pretty. TREB just released their sales figures for the month of November and unlike last month, we can now say that for the resale downtown condo market, prices have fallen. Let’s just get right into the numbers.
Compared to November 2007:
- In C01 (downtown west), condo sales are down 61%, average prices are down 11%, and inventory is up 90%. The number of sales as a percentage of active listings was 13% versus 64% last year.
- In C08 (downtown east), condo sales are down 51%, average prices are down 9%, and inventory is up a staggering 164%. The number of sales as a percentage of active listings was 15% versus 83% last year.
Compared to October 2008 (last month):
- In C01, condo inventory has increased by 6% and sales decreased by 40%
- In C08, condo inventory has increased by 15% and sales decreased by 41%
Upon first glance it looks like this must be the crash taking place that the pundits have long been predicting. Possibly, but let me point out a couple interesting facts:
- In C01, average prices of condos were down 11%, but the median price was down only 3%.
- Similarly, in C08, average prices of condos were down 9%, but the median price was down only 3%.
What am I getting at here? If you believe that the median price is a more accurate measure of the volatility in the market, then things aren’t as bad as they seem. Or another way to look at it is the numbers from 2007 were skewed because of the disproportionately high number of sales of high-end properties (people rushing in to buy before the Toronto Land Transfer tax kicked in). John Pasalis of Move Smartly is a proponent of this theory and has written a couple posts about this here and here.
So what do the numbers from this month mean?
- For Buyers - December could be good month for you. With about 1200 available condos to choose from in the downtown core (versus about 600 last year), and very few buyers to compete with, the time is now to put in that low-ball offer you could only dream about just 3 months ago.
- For Sellers – This would be a good time to take your property off the market if you don’t absolutely need to sell. Consider trying your luck again in the new year, but be warned, there may be hundreds of others who will use the same strategy.
- For Investors – The resale market is suddenly looking more promising. “Positive Cash Flow” is no longer an impossible dream. Buying in a market like this is not for the faint of heart, but go out and find the desperate corners of the market and you may be rewarded.
Nov 2008 Downtown Condo Stats
If you haven’t already, check out my post from last month with a similar look at the downtown condo numbers entitled: “Is the Toronto Condo Market Crashing?“
3 Comments For This Post
4 Trackbacks For This Post
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How Is The Toronto Real Estate Market? Says:
December 8th, 2008 at 9:41 am[...] condominiums sales agent Andrew LaFleur has an excellent break down of sales numbers on his condos Toronto blog. In his post, he looks at [...]
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Toronto New Condo Statistics November 2008 | AndrewLaFleur.com - Toronto Condos Says:
December 23rd, 2008 at 8:38 pm[...] this November were down 59% versus last November. This is very consistent with the numbers for November’s resale market, where downtown west condo sales were down 61% and downtown east [...]
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Toronto Condo Market Stats December 2008 | AndrewLaFleur.com - Toronto Condos Says:
January 9th, 2009 at 6:18 pm[...] if we just stopped there the numbers would be very similar to what was reported for the month of November, but there is something else very significant happening which will likely not be reported on much [...]
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New Condo Market Sales Statistics December 2008 | AndrewLaFleur.com - Toronto Condos Says:
January 27th, 2009 at 1:00 pm[...] have dropped off significantly. [Note: these numbers are for new condos. For resale condos, see my previous posts for more stats on the downtown condo market.]In 2007, over 23,210 new condos were sold in [...]
December 5th, 2008 at 7:59 pm
Good article Andrew. When do you think the prices will begin to rise again (which, of course, they will – they always do)?
December 15th, 2008 at 4:56 am
Michelle, I doubt very much whether anybody can say when the prices will start going up again. The times are unprecedented. In Japan, after the property bubble burst in 1988, the prices still have not reached the 1988 figures – after 20 years! So, we might have to wait for a long long time for prices to go up.
December 16th, 2008 at 1:51 pm
http://www.yourhome.ca/homes/article/551888
“Right now, there are 20,000 unsold condominiums somewhere in the pipeline and it is worrisome with all that inventory,” said Peter Norman, senior director at Altus Group Economic Consulting.
Projected condo sales in Toronto will hit just 8,000 next year after topping 23,000 in 2007. This means there will be a three-year inventory of unsold new condos on the market by 2009.”
>>>>>> That is not good news, and this is a snapshot of what is going on now (which assumes a linear outlook). The reality or ‘Curve’ of decline is actually worse (non-linear calculus reality based trajectory)
From the Article:
“In fact, right now, the good news is that Canadian incomes are climbing at a healthy rate, Norman said.
“This type of income growth is not consistent with a recession,” he added.
“So there is some indication we are in a good position even as we head into a slowdown.”
>>>>>>> It is these types of comments that does nothing but harm those in your profession, not only from a reputation standpoint, but also to those agents who are clinging on when a possibly better career/skillset opportunity is presented.
-Many economists and recent consulting studies stated otherwise; wages are expected to be frozen, bonuses are significantly reduced (easy google)
-Does not take into account the dwindling pool of people due to job losses that still have the ‘higher’ income. A more realistic way is to take total income and divide it by the number of employed and unemployed in the pool.
Total Salary and Wages/Employed and Unemployed = LOWER INCOME GROWTH
as opposed to
Total Salary and Wages/EMPLOYED ONLY = HIGHER INCOME GROWTH
This will show that real income has actually decreased dramatically.
The scary part is looming job losses that will make November (the worst in several decades) even seem small. Do the math by multiplying EXPONENTIALLY with a increasing curve (not a flat linear multiple) of fear and loss of confidence and there will be truly scary times ahead where real estate boards and certain agents (not directly referring to you!) will now have a real hard time justifying the purchase of property with credit on a dwindling pool of current and future wealth.