Record-Setting Prices

After years of record-setting prices, the GTA’s real estate market increasingly appears to be leveling off, analysts and statistics suggest, although experts remain relatively optimistic about the health of the region’s market. Since April, the number of properties to exchange hands has dropped each month, compared to the records set in the same months last year. In June, for example, there were 18% fewer sales than in 2007. Numbers released this week for the first half of July show the trend continues, with a drop of 11% over the same period in 2007. Meanwhile, the price of an average house in the GTA continues to rise, albeit at a slower rate than last year. “This is very common in the real estate cycle, that prices are going up but not so much, and volume goes down,” said William Strange, a professor of real estate and urban economics at the University of Toronto’s Rotman School of Management. He called the GTA a “leveling” market.The Canadian Real Estate Association announced this week the first drop in housing prices nationally in almost a decade, but characterized it as a one month blip that is not likely a sign of things to come. That news was followed by the Toronto Real Estate Board’s (TREB) latest figures, which showed that the average price of a home in the GTA during the first half of July was $379,072, which is a 1% increase from the $374,254 recorded in the first two weeks of July 2007 and a 9% increase from $346,267 recorded during the same period in July 2006. The board has emphasized comparisons to 2006 in order to “present a more accurate perspective” of this year’s resale housing market, since 2007 was an overheated year. Up until July, monthly sales in the region had increased by about 4% from 2007 to 2008.