Toronto Real Estate Market Report for March 2010 Prepared by Chris Kapches Senior Vice-President There are no superlatives left to describe the Toronto residential resale market place. Just when you think the market has peaked, and there are no further records to be broken, yet again it surprises us. The results for March 2010 are no exception. Lets begin with the records that were shattered in March. The average sale price came in at $434,696, the highest monthly average sale price in the history of the Toronto residential resale market. The previous highest monthly average sale price was $431,509, achieved in February of this year. March's average sale price is 19.8 percent higher than the average sale price reported by the Toronto Real Estate Board for March 2009. In March 10,430 residential properties were reported sold. That is also a record, representing the most properties reported sold for any March on record. In addition, the 10,430 properties reported sold in March, combined with reported sales for January and February of this year, pushed total first quarter sales to 22,418. This represents the best first quarter results on record, eclipsing even the first quarter of 2007, which went on to record 93,193 sales for the year, still the best year on record for Toronto's residential resale market. Record breaking does not end there. Average days-on-market, for all Toronto trading areas combined, was 20 days. This too is a record, surpassing the 22 days achieved in February 2010. Within various sub-trading areas other records were also broken. For example, for all the central districts combined, average days on market was only 18. This figure is even more dramatic when it is remembered that the central districts reported 1,859 sales in March. This incredible days-on-market achievement is not skewered by having been achieved by only a handful of reported sales. In the trading area E02, or roughly the area known as Toronto's Beaches, it took only 8 days for all listed properties to sell. The mechanics of taking a listing, loading it, waiting for offers, negotiating and accepting them, all within 8 days is unbelievably fast. E01, or roughly the area known as Riverdale, was not far behind, with average days-onmarket coming in at 10 days. These statistics give new meaning to the expression "flying off the shelf". Lastly the number of reported sales having a sale price of $1,000,000 or more also came in as a first. In Toronto in March 332 properties, representing 3.2 percent of all properties sold, had a sale price of $1,000,000 or more. No month in the past ever exceeded 300 properties sold in this category. If there was any indication in the resale statistics for March that the market might be stabilizing it was in the number of new properties that came to market. Toronto area realtors listed 18,914 new properties for sale in March. This represents a 42 percent increase compared to the 13,357 listed in March 2009. Notwithstanding this sharp increase, the Toronto market place still has 21 percent fewer listings compared to March 2009. At that time there were 23,642 properties available for sale. At the end of this March we had only 18,684. There is no doubt that Toronto residential market place still has legs. Beyond the second quarter the market will continue strong, but gradually tilting towards a balance between the interests of sellers and buyers. As attractive as record braking sales prices are, the negative side of these strong numbers is the impact on affordability. Affordability is a delicate balance between servicing costs and average sale prices. For sometime record low mortgage rates have worked in favour of buyers, enabling them to continue purchasing properties at record rates, notwithstanding average sale prices that have increased by 20 percent in the last year. In addition, and to a large extend, the recent market has also been driven by a lack of resale inventory. Going forward, assuming March's new inventory figures are not an anomaly, we will see inventory levels rise. That combined with higher sales prices (now record sales prices) and an increase in servicing costs - there were marginal increases in fixed rates in March - will prevent many first time buyers from entering the market place, and will prevent other buyers from moving up in price point. The combined effect should result in a balanced market for the second half of 2010. However, there is still the second quarter before we get there.