Six months ago the average house sold in Toronto for $517,556. Last month it changed hands for $503,479. The decline is 3%.
Problem? Not according to the Toronto Real Estate Board:
The average selling price for October transactions was $503,479 – up 6.2 per cent compared to October 2011. The MLS® Home Price Index composite benchmark price, which allows for an apples-to-apples comparison in terms of home attributes, was up by 5.1 per cent.
“We continue to see price increases well above the rate of inflation. Active listings have remained low from a historic perspective, so substantial competition between buyers still exists, especially for low-rise homes,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
As for the benchmark property – a SFH in 416 – in May it averaged $831,214. Last month that had fallen to $779,484. The decline is $51,730, or 6.2%.
Sales, said the board, were down 7.1% from the same month last year. On a daily basis, however, they declined more than 15%. But comparisons to a year ago can sometimes give a false impression of market momentum. Here are sales of all properties in the GTA so far this year:
So, sales in October were 36.4% lower than in May. In fact, the traditionally ‘hot’ autumn market has just given us the two weakest months of the entire year, excluding the January dead zone. Hell, even February was better. Thus we are left with a May-October comparison that saw sales drop by over a third and prices decline 6%. More important, we are going into the winter with significant downward momentum.
How does this square with TREB’s assertion that, “We continue to see price increases well above the rate of inflation. Active listings have remained low from a historic perspective, so substantial competition between buyers still exists”? It doesn’t. Prices have fallen this year. Sales have tumbled. The realtors are lying.
What the above chart should also tell you is where we’re headed. Down. Despite record low interest rates, modest employment growth and rising financial markets, sales have been slagging since F & the peckerettes started their War on the House back in June. The first salvo was the July 9th mortgagicide. The second was CMHC throwing million-dollar listings overboard. The third was the end last Wednesday of cash-back mortgages. And along the way bankers have been forced to tighten up on debt service ratios and property appraisals, both of which have knocked the slats from underneath bidding wars.
So, what’s happening in Vancouver in 2012 will likely take place in the GTA in 2013.
In that beautiful but delusional city on the sea, sales are running 28% below the 10-year average. The all-property price is down 11% from April, while the months of inventory have exploded – in some neighbourhoods now approaching two years. The average SFH is $100,000 cheaper than it was the spring, but at $1,116,108, it has another 20% to fall in the next few months. The trough comes later.
More significantly, nobody talks any more about choppers full of horny Asians buying houses by pointing down at them. Why? An urban myth. Without a doubt buying from Mainland Chinese was an escalating factor in certain hoods and price ranges. But the terror felt from Burnaby to White Rock of a new Yellow Peril was the exploitative creation of marketers who cared not what this would do to the social fabric. Now, sadly, people on this pathetic blog spit out the term ‘HAM’ to refer to some guy named Chan who was born in Richmond and just wants a one-bedroom condo on the Canada Line.
In short, the legacy of this post-2008 housing boom will be debt, losses and resentment, laced with bigotry and anger. The realtors are obviously deserving, as is the humping media and politicians who made house horniness into their economic action plan. The real culprit, though, is human nature. We always believe it’s different this time. The only difference is a new set of fools.