Is the Toronto Condo Market Crashing?
We are in the midst of a global financial crisis. People are naturally concerned about their jobs, their finances, their investments, and of course – REAL ESTATE. I am getting asked constantly by friends, family, and clients:
How is the market? Are prices coming down? Is the Condo Market Crashing?
I’m not an economist or any sort of a pundit, but I do want to share with my readers a few interesting statistics on the DOWNTOWN CONDO MARKET. I don’t want to talk about the GTA numbers, or even the City of Toronto numbers. These have been well publicized over the last 24 hours in every major media outlet. They aren’t good.Ãƒâ€šÃ‚Â Sales are down 35% and prices are down 10% (GTA wide). I work downtown, I live downtown, if you are reading this you are probably only interested in downtown real estate, so let’s talk downtown condos and see what we can find out about the market.
I get plenty of visitors to my website every week who are doing Google searches for things like “Condo Market Crash Toronto 2008“. The media is overloading us with messages that the real estate market is crashing all over Canada and the Condo market is going to be hit hardest because after all, there are far too many condos in Toronto, right?
Sorry to disappoint you, but the numbers just do not support this – yet. What I’m going to share with you will probably surprise you given the constant barrage of media headlines saying the sky is falling on the condo market.
The truth is that prices of condos in both C01 (downtown west) and C08 (downtown east) are actually UP compared to October 2007.
- Average price of a condo in C01 in Oct 2007 was $334,127 versus $346,344 in Oct 2008.This represents a 3.6% increase.
- Average price of a condo in C08 in Oct 2007 was $326,466 versus $339,100 in Oct 2008. This represents a 3.9% increase.
BUT – most interesting, these price increases are happening in spite of the fact that the number of sales are down significantly…
- Number of condo sales in C01 in Oct 2008 was 184 versus 287 in Oct 2007 – a decrease of 36%.
- Number of condo sales in C08 in Oct 2008 was 94 versus 120 in Oct 2007 – a decrease of 22%.
…and the number of listings have absolutely soared compared to a year ago.
- Active condo listings in C01 are up from 454 to 793 – an increase of 54% in 2008 versus 2007.
- Active condo listings in C08 are up from 147 to 313 – an increase of 113% in 2008 versus 2007.
So what does all this mean?
- For Buyers – if you are looking to pick up a downtown condo at pennies on the dollar you’re out of luck. But the soaring inventory levels can’t be ignored.Ãƒâ€šÃ‚Â There will be downward pressure on prices as we enter the traditional ‘slow season’ in real estate – November, December, and January.
- For Sellers – well priced listings can expect to take at least 1 month to sell. Over priced properties simply will not sell in this market – especially as we approach the slow months. Please don’t make the mistake of over-pricing your property!
- For Investors – be patient. Watch the market carefully and you will be rewarded. As Warren Buffet says, buy fear and sell greed. I think we will see some fear this winter in the resale condo market.
Click on the icon below to download a PDF file with all these stats and a couple of charts. I always appreciate your feedback and thoughts. Send me an email or leave a comment.