Prices Dropping? Average Home Price Up 9% for 2010!!

Final numbers are in for December, and thus for 2010! It was a great year for homeowners, as values appreciated 9% on average. As we said throughout the year, the negativity created by the media about home ownership was just a fabrication of facts.

At the beginning of 2010, we predicted unit sales to hold tough and projected 2010 sales to fall about 2%. Looking back, sales in units were down slightly (but just by 1%) over a banner year in 2009. We had predicted a modest 5-6% increase in price, and with the hot market in the first four months, we saw an average increase of 9% for the year. We had also predicted that interest rates would remain low, however rise slightly from their historically low rates. We saw this take place late in the summer months.

What we have learned is that the general public has started to tune out the negativity in the media. Mid-year speculation of prices dropping by upwards of 30% are laughable now, but instilled fear throughout the summer and into fall. Low interest rates continued to fuel the market. The strong Canadian economy, coupled with a strong dollar had consumer confidence at a high.

For 2011, our projections will be very similar to 2010. Sales will hold strong, and with a shortage of inventory on the market, prices will climb slightly throughout the winter months. We are in a sellers' market right now and will continue to be until inventory shows a supply of two to three months. As a buyer, you want to scoop up the "good" properties, or be left scrambling for the "average" ones that will flood the market in the spring.

A common mistake buyers make is trying to time the market. Real Estate is all about the amount of time you spend IN the market, now about trying to TIME the market. Land will always appreciate, and normal appreciation is a given. When you get artificial appreciation which is around 25% - 50%, similar to what we say five or six years ago in some American markets, that is where you could be faced with bubbles and other problems. Trying to time the market will have you renting for the long haul and cost you more money in terms of opportunity costs, as properties continue to appreciate without you.

Attached is the final Market Watch for 2010 and shows how the Greater Toronto Area did in 2010. For a specific analysis of your home, street, or neighbourhood, please call me at 416-985-5426 and I'll be happy to provide you with this. Anytime you have any questions or concerns with stories in the media, please call and we will provide you with the true story about property values and the Real Estate market.

Regards,

Asif

TORONTO, ONTARIO--(Marketwire - Jan. 6, 2011) - Greater Toronto REALTORS(r)
reported 4,395 existing home sales for the month of December, bringing the 2010 total to 86,170 - down by one per cent compared to 2009.

"Market conditions were anything but uniform in 2010. We went from super-charged sales activity during the first four months of the year, to a marked drop-off in transactions in the summer and then in the fall saw sales climb back to levels that are sustainable over the longer term," said TREB President Bill Johnston.

"New Federal Government-mandated mortgage lending guidelines, higher borrowing costs and misconceptions about the HST caused a pause in home buying in the summer. As it became clear that the HST was not applicable to the sale price of an existing home and buyers realized that home ownership remained affordable, market conditions improved," continued Johnston.

The average home selling price in 2010 was $431,463 - up nine per cent in comparison to the 2009 average selling price of $395,460. In December, the average annual rate of price growth was five per cent.

"At the outset of 2010, we were experiencing annual rates of price growth at or near 20 per cent. This was the result of extremely tight market conditions coupled with the fact that we were comparing prices to the trough of the recession at the beginning of 2009," said Jason Mercer, TREB's Senior Manager of Market Analysis.

"Balanced market conditions in the second half of 2010 resulted in more moderate home price appreciation," continued Mercer. "Expect the average selling price to grow at or below five per cent in 2011. With this type of growth, mortgage carrying costs for the average priced home in the GTA will remain affordable for a household earning an average income."

Home sales in the GTA were spread across a number of different housing types in 2010. Detached homes accounted for 49 per cent of total sales. Condominium apartments accounted for an additional 25 per cent per cent of sales. Other housing types including townhomes and semi-detached houses accounted for the final 26 per cent. In some areas like TREB's central
districts the mix was quite different, with condominium apartments accounting for 61 per cent of total sales.

"Ownership housing is available in a diversity of types and price points across the GTA, allowing plenty of choice for first time buyers and experienced home buyers alike. This housing diversity is one factor that continues to make the GTA a popular choice for households and businesses,"
concluded Johnston.

WATCH Market Watch video at: www.youtube.com/TREBChannel.

Asif Khan, Realtor

Re/Max All-Stars Realty Inc.

Google me: Asif Khan Re/Max

Posted via email from Markham Real Estate Today with Asif Khan