The 2010 GTA resale housing market was characterized by sizzle then fizzle. And it looks like 2011 will be more of the same.
The blazing hot resale market in the first quarter accounted for an overall positive performance in 2010: Sales in 2010 dropped a mere 1% from those recorded in 2009, and the average home price actually increased over the 2009 figure.
The fizzle began in earnest during the summer of 2010, caused by changes in lending guidelines and a lack of consumer understanding of the newly introduced HST. By fall, sales were still dropping, but prices continued to rise and the market reached what experts called a sustainable level.
December’s sales told the tale, totaling 4,395, down 21% from 5,541 in December 2009. Annual sales, though, were pretty much the same: 86,170 in 2010 versus 87,308 in the year previous. Counter intuitively, the average price of a home in the GTA continued to increase throughout 2010, finishing the year at $431,463, up 9% from 2009.
Of course, pundits differ on the forecast for 2011; however, a recent report indicates that the market will start off on a high note. Consumers concerned about higher interest rates in the latter part of the year will likely drive the market in the first half, pushing up prices and sales. If consumers concerns do come about, and increases in borrowing costs do occur in late 2011, the market will undoubtedly fizzle. It could be déjà vu all over again.
