The Toronto and the Canadian real estate market keeps growing with certain markets hotter than others. Looking at Canadian Real Estate Association (CREA) data show declines in some parts of the country but certain Toronto markets remain very attractive. Different numbers could be used to examine trends including the Sales to New Listing Ratio and the days on the market data.
Some real estate companies simply use the data from the CREA numbers and look at the sales to new listings ratio (SNLR) to determine if a local market is active. CREA says that when the SNLR numbers are in the 40 and 60 range that the market is balanced. The problem is that this data is very general when looking at large metro areas like Toronto. Depending on your part of town and the price point the market conditions can be very different. While the 2 million and above market in Markham might be experiencing a slowdown in sales the $500,000 condos market in Fort York might be extremely active. People should examine small sets of data to determine if the SNLR is reflecting a balanced market or if it’s shifted to what is called a “buyer’s market,” which means prices should decline.
Combine the data from the SNLR and the days on the market is a more accurate method to see what is happening in more targeted local markets. Some real estate agents like to look at the final sales price when compared to the listing price to determine if its a buyers market. But the problem is that some agents in Toronto use artificially low listings prices when they put a home or condo on the market. This in part could be a method to generate traffic to their listings as a way to find more clients or even worse be a method to promore how much they were able to sell a home above the asking price. Potential sellers see marketing material saying agent sold a house 30% above asking but do not realize the price was listed incorrectly and the home ended up selling under value.
Our website has details on various other aspects of the Toronto real estate market including resale of condos and condo sales in pre-construction.