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It was another great month for Toronto real estate sellers.  We’re starting to quiet down for the Christmas holidays, but I expect that things will take off again very early in the New Year.  Many people may be reflecting on their decisions over the holidays, and I’m sure that there will be a press for people to sell their homes before the interest rates go up and the new HST takes a swing at us.

All forecasts show that the sales will be just as great once things settle down and everyone has had their holiday food and gifts – and that means individuals who need to sell should begin thinking about their options now.

Figures from Toronto Realtors are looking great…

• In November, there were 7,446 sales – this is slightly more than double the November 2008 numbers when GTA home sales had dipped markedly due to the economic downturn!
• Year to date sales are up 14% compared to the first 11 months of 2008.
• “This year in the GTA home sales will be in line with the healthy levels experienced between 2004 and 2006,” said President Tom Lebour.  “Increased resale home transactions in the Toronto area and country-wide played a key role in pushing the Canadian economy out of recession in the third quarter.”
• The average price for November transactions was up 14% year-over-year to $418,460.  The average price year-to-date was up 4% to $394,464.
• “Very strong annual growth rages for sales and average price should be expected through the first quarter of 2010, because we will be comparing the current recovery to the housing market decline experienced last winter,” says Jason Mercer, TREB’s Senior Manager of Market Analysis.  “As we move into the spring, growth rates will move to more sustainable levels.”

Holiday Home Sellers May Earn Thousands More

According to the statistics from the Toronto Real Estate Board, those interested in selling their home in December or January may earn thousands more than individuals who sold their home around the same time last year.  The median price this November was $353,800 – up more than $40,000 from last year’s $312,250.

What does this mean for individuals looking to sell now?  Even though it’s the holidays and things are settling down, you can expect to earn thousands more this year than those who sold their homes at the same time last year during the market decline.  This is just another sign that things are really looking up in the real estate industry.

Breaking Down the Difference – Nov 2008 to Nov 2009-12-10

November’s over and the results are in – we’re looking at a major increase this year.  In fact, sales in November of 2008 were around 3,640 while this year brought in about 7,446.  That’s a 105% increase!  New listings weren’t much different, with November of 2008’s numbers at 9,925 and this year’s numbers at 9,923.  The days on the market were down significantly, at 26 this year as opposed to last year’s 41.  This means that houses are being snapped up more quickly – so sellers shouldn’t have to wait long to get that check in their hand!

Taking Bets: What is the Total Difference?

Right now, for single family houses, there’s a major difference between this year and last year.  Last year, the year-to-date sales were about 74,552 with a median price of about $379,347.  With November’s numbers tallied, this year’s sales were about 81,929 with a median price of about $394,464.  I estimate that we’ll pass last year’s numbers by more than 10,000 houses sold, easily.  This is a great sign of what is to come.

Effects of the HST on new condo purchases

Although nobody knows yet what the full effect of the HST will be on real estate in the greater Toronto area, what we do know is that real estate transactions will be subject to taxation via the HST in ways they haven’t been previously.  For instance, new condos will be subject to the 13% HST, with the tax being assessed on the selling price of the property.

Under this new system, new condos valued at less than $400,000 will be eligible for a tax rebate of 6%, but new condos that sell for $500,000 or higher will have to pay the HST.  In theory, then, buyers can avoid the HST by purchasing condos valued at less than $400,000, but the reality of the real estate market in Toronto is quite a bit different.

Real estate prices are substantially higher in Toronto than in other areas, making it difficult (if not impossible) to find a reasonably nice new condo for less than $400,000.  A quick look at the listings on the market today will show very clearly that new condo prices are much more likely to be at least $500,000 and in most cases go even higher.  So for all practical purposes, buyers in the market for a new condo will have to take the HST into account when it comes time to determine how much they can afford to buy financially.

Buyers who are set on purchasing a condo but are concerned about the new HST have two options to consider:

1.  Make their new condo purchase before July, 2010, when the HST goes into effect.

2.  If purchasing after July, 2010, choose to purchase an existing condo property rather than a new condo property.

If a condo purchase is something you are considering, we strongly recommend you talk with a qualified realtor sooner rather than later so you can plan your purchase accordingly.

Effects of the HST on the broader real estate market

The HST is not just applicable to new homes and condos, however; it is also set to be applied to the closing costs of all real estate transactions.  This means everything from closing lawyer costs to home inspection costs to real estate commissions and the like will all be subject to the HST.  For most buyers this can quickly add up to an amount of $2,000 or more, making it even tougher to afford the purchase of a real estate property.

Real estate professionals in the greater Toronto area are concerned about the impact of the HST in these cases, especially when it comes to first time buyers and middle income buyers looking to move up in the value of their property.  In some cases the impact of the HST on closing costs could have a significant effect on whether or not someone is in a financial position to afford to purchase a real estate property.

While the HST will definitely have an impact on the real estate market in the greater Toronto area, most local realtors believe it will not be disastrous.  With proper planning and the prospect of negotiating these costs as part of sales agreements, most realtors believe the market will continue to grow and prosper throughout 2010.

Moving arrangements

It’s never too soon to make moving arrangements; there’s nothing worse than having moving day rapidly approaching and not having anyone lined up to physically move your stuff to your new place.  In fact, it’s a great idea to contact movers before your house is even sold so they can come to your home and determine just how many items and what size items you will need move.  They will use this information to give you an estimated cost.  As soon as your home actually sells, get in touch with the moving service right away to be sure you can get on their schedule for the moving date you need.

If you are planning to rent a moving truck and take care of the hauling yourself, get in touch with local rental companies and reserve a truck as soon as possible.  Rental trucks tend to be hard to come by around the very end of the month and the very beginning of the month because this is their busiest time.  If at all possible schedule your move for mid-month; if this is not possible then the earlier you can reserve your truck, the better.

Don’t skimp on the size of truck you choose to rent.  A smaller truck might be less expensive than a larger truck, but if you have lots of items to move you may end up making two, three, or even four trips to get everything moved.  It’s much easier on everyone concerned to rent a larger truck and then make only one trip from your old place to the new place.

Packing

Most people underestimate the importance of proper packing, especially if they are only moving across town.  Packing, however, is a critical part of the moving process and can have a huge impact on the ease (or difficulty) of your actual moving day.  Using the wrong size boxes or improperly packing fragile items can cause a lot of extra work and leave you with broken items.

If you can afford the cost, it is well worth hiring a professional moving company to come in and pack your things for you.  Professionals are skilled in choosing the right boxes for the right items, not over-packing or under-packing.  They also have the personnel necessary to come into your home and make quick work of the packing process, plus they have the right tools to pack quickly, efficiently, and safely.

If paying for professional packing is not possible, then be sure to allow plenty of time in advance to take care of the packing yourself.  Choose smaller boxes rather than larger boxes whenever possible; a smaller box is easier to handle on moving day, while a larger box can quickly become too heavy or too awkward to be easily moved.  Don’t skimp on the quality of boxes or the packing material to be used in them; this is especially true for your fragile or precious items.  It’s well worth the cost to invest in specialty boxes for items such as china and other breakables; you can flatten the boxes and store them once you get to your new place, making them available for the next time you need to move.