The Beat Goes On!
The Toronto real estate market continued its strong pace with 9,706 homes sold in April, up almost 2% from April 2013. While the number of sales remained fairly consistent, there were 2 major statistical changes from 2013. The first was the average sale price which price rose dramatically in April to an average year-to-date price of $559,208 up 7% from 2013’s average price of $523,013. That sharp rise in price was caused by the second factor, 8.4% fewer homes for sale which resulted in multiple offers on well-priced homes.
While we all want to see the value of our homes increase, a sharp increase in price is not beneficial to first-time homebuyers trying to save up enough for a down payment. If the number of first time buyers decreases sharply, it affects the prices of all homes.
It’s been said that for every time interest rates go up a quarter of a percent, 5,000 buyers can no longer qualify for a mortgage and thus cannot buy. With fewer buyers there is less competition which affects prices and sales. We can only hope that as the weather warms up, more homes will come up for sale and ease the pressure on demand and prices.It looks like interest rates will remain low for the next 3-6 months.
I believe demand will continue to be strong throughout 2014 and if the listing inventory increases, there will be an easing of prices and the sharp increase of prices will not continue.
Is your mortgage coming up shortly for renewal? It’s very common for mortgage companies to send you mortgage renewal documents and they make it seem very easy for you to renew your mortgage at a very low renewal rate. However, mortgage companies and banks usually do not quote you their best rates on these automatic renewals. If you get such a renewal notice, please feel free to give me a call and I’m quite confident I can save you substantial money on your mortgage renewal.
Have a great month, and don’t forget I truly appreciate your referrals!