Market Watch – January 2010 Housing Recovery Continues With Active December Market

Strong year-end sales put a crown on a year that started slow but ended big.

We entered 2009 with a global recession at our backs and a real estate meltdown to the south. However consumer confidence started to return in the second quarter and the real estate market was the first place in the country to show signs of the recovery.

"After a slow start to the year, existing home sales rebounded during the second half of 2009,” said Tom Lebour, President of Toronto Real Estate Board (TREB). “As consumer confidence improved, many households moved to take advantage of affordable home ownership opportunities. The strong residential real estate sector was a key contributor to overall economic recovery in Canada.”

“In 12 months, we went from the worst January in 20 years to the third best December,” said Paul Penner, President of the Fraser Valley Real Estate Board. “Home buyers took Boxing Day shopping to new levels with some Fraser Valley REALTORS® showing multiple homes per day between Christmas and New Years.”

The overall trend for 2009 was one of increasing sales, decreasing inventory and prices rebounding. We’re seeing the combined effect of fewer homes being listed, which is normal for this time of year, a flurry of buying activity, plus a decrease in the number of new homes being built. This has put pressure on prices particularly on homes in the lower to mid-range markets.

Below is a brief summary of sales activities:

Ontario – Home sales remain strong in December

Toronto, January 6, 2010 – Greater Toronto REALTORS® reported 87,308 Multiple Listing Service® (MLS®) transactions in 2009 – a 17% increase over 2008. This result included 5,541 sales in December. The 2009 result was in line with the healthy levels of sales experienced between 2004 and 2006, but lower than the record of 93,193 set in 2007.

The average home price in 2009 climbed 4% to $395,460. The average price for December transactions was $411,931.

“Market conditions became very tight in the latter half of 2009. Sales climbed strongly relative to the number of homes listed for sale, resulting in robust price growth that more than offset average price declines in the winter,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “A greater supply of listings in 2010 will see home prices grow at a sustainable pace.”

In December, the median price was $349,000, from the $305,000 recorded during December of 2008.