Fall Recovery and Confirmation of Pricing

 

We can put together a real estate calendar and get a fairly good idea of what is going to happen in the Toronto real estate market, world economic crises aside.

Each year the market peaks in the Spring. That’s usually the high water mark for the year. It drops down in the Summer, where it bottoms out in August and commences a recovery in September, peaking for a second time in the year, then it settles down again.

Let’s look back over the last few years an see what happened. Here are the years, the average prices of single family homes in the GTA at the time of the second peak, and the month in which that occurred:

2004…..$324,215 (October)

2005…..$342,450 (October)

2006…..$356,423 (October)

2007…..$394,646 (October) (highest for year)

2008…..$368,582 (November)

2009…..$423,559 (October) (highest for year)

2010…..$443,729 (October)

2011…..$480,421 (November)

2012…..$503,479,809 (October)

We are looking at nine years in total. In seven cases, the market peaked in October. On two occasions, it peaked in November and twice the October peak was also the height of the market for the entire year, namely 2007 and 2009.

In 2007, the stock markets were flying high with speculative investors and that spilled over to the real estate market.

The worldwide stock market crash took place in October 2008, followed by the economic bailout of the financial services industry in the United States and the automotive sector in North America in the Spring of 2009. Consequently, the Spring real estate market was poor, and the Fall market was much better by comparison.

So, what do we know from all of this:

        The market peaks a second time in the Fall (7 times out of 9)

        October is usually the Fall peak (7 times out of 9)

        The height of the market for the calendar year occasionally takes place in the Fall (2 times out of 9)

You can also track the escalation in the market, year to year. There are substantial, progressive increases in value.

In effect, following the trough or dip in the market during the Summer, the Fall resurgence confirms the pricing and reaffirms the value of properties.

 

Brian Madigan LL.B., Broker is a Manager at RE/MAX West Realty Inc., Brokerage 416-745-2300.
www.OntarioRealEstateSource.com

 


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