House prices stabilizing, board says

Photo credit: Untitled by wwiwsky on Flickr

The average price of a home in the GTA in February was $361,305, down about $20,000 from last year's value of $382,048.

By Cassandra Jowett

GTA home sales were down 32% in February compared with this time last year, but prices appear to be stabilizing, the Toronto Real Estate Board says.

Only 4,120 homes were sold last month compared with 6,015 in February, 2008, the board reported yesterday. The previous February, during the height of Toronto’s real estate boom in 2007, 6,772 homes changed hands.

Although the decrease is significant, the board’s president, Maureen O’Neill, said the fact that the average home price in the GTA has decreased by only about 5% — less than the national average of about 8% — is a good sign.

The average price of a home in the GTA in February was $361,305, down about $20,000 from last year’s value of $382,048.

“Prices are holding their own and I’m really happy about that,” Ms. O’Neill said. “I see [the market] stabilizing and correcting. I don’t think we’re going to see any type of increase in the next six months, but I think the stability factor is going to remain.”

She said she attributes the possible stabilization of the market to buyers and, to a lesser extent, sellers becoming more comfortable with the current economic reality. “They’re not motivated by the fear factor to the extent they were last year.”

Jim Sturino, president of Royal LePage West Realty Group, said his team of real estate agents sold about 40 homes in February, “which isn’t too bad.” Although homes are taking longer to sell — an average of 45 days in February, up significantly from 30 last year– Mr. Sturino said as long as sellers are realistic about a home’s listing price, the market should do well in March as well. “March is looking pretty good so far. We’re a good place to be right now.”

Real estate expert William Strange, a professor of business economics at the University of Toronto’s Rotman School of Management, said the downturn will not come close to matching recent declines in the United States, but historical trends indicate home prices in Toronto will still decrease further. “We know that prices have already been falling for the last year or so, but the fact that volumes are down probably means prices have a ways to go down also.”

Photo credit: Untitled by wwiwsky on Flickr
© Copyright Cassandra Jowett - Designed by Pexeto