Despite a gradual climb out the hole dug in late 2008, the real estate market in 2009 fared incredibly well. Rather than rejoicing, most are questioning if we are heading into a bubble.
Overall in 2009 there was a 17 percent increase over sales volume compared to 2008. December blew away it’s sales volume performance from 2008 to 2009, increasing by a whopping 72% while prices in the GTA gained an average of 14%.
We saw the frenzy of multiple offers but this was primarily motivated by continued low inventory of homes on the market, particularly in the $800k and under segment. Consumer confidence and borrowing returned, and interest rates have remained incredibly low.
But let’s look to 2010…
I think we’ll see continued strength in the market for the first half of the year as there is still a lot of pent up demand from buyers who have not been able to find what they are looking for due to unusually low inventory. We have already started to see a trend in December of listing numbers rising for the first time in a year.
The talk within agents is that the spring market will come early this year – February instead of March. Since inventory is still low, homeowners who are planning to list in the spring will take advantage of the imbalance between listings and buyers and the pent up demand.
Once that rush has passed, I expect a relatively quiet summer as many people may be holding their breath to see what happens with interest rates. Depending on the impact, the fall will be the real test.
I’m predicting a return to a much more balanced market, a steadying of prices and a more standardized measure of values.
When should you sell? List in February to April.
When should you buy? If you have been looking for a while, your best inventory will be in the spring (if everyone follows my advice 🙂 but be prepared to move forward as it may get crowded out there.
But, if you have flexibility in timing and are open to a variety of features and locations wait till the summer or fall.
Check out the full Toronto Real Estate Board Market Watch by clicking here.