According to TREB, prices will continue to grow in 2012. TREB’s Market Watch publications now include an MOI (Months of Inventory) indicator, which shows how long it would take to sell all actively listed homes, on average, assuming an unchanged level of sales and no additional homes being listed. It is calculated by dividing the 12-month moving average of active listings by the 12-month moving average of sales. A shrinking MOI is an indication of a tightening market with fewer listings, ultimately creating competition among buyers and rising prices.
The average MOI was 2.3 months over the last 2 years, according to TREB. During years 2000 through 2007 (leading up to the recession) it was 3.0 months. “The low months of inventory over the past two years resulted from very strong sales relative to the number of homes listed. In 2011 in particular, there was a shortage of listings in the GTA. We continue to experience tight market conditions and considerable upward pressure on the average selling price,” said TREB President Richard Silver.
TREB expects the average price to continue rising in 2012 by approximately 4-percent to around $485,000 based on the current tightness of the market and the continued positive affordability thanks to low mortgage rates. A more moderate price increased compared to the 8-percent spike in 2011.
January 2012 So Far
The results of the first two weeks of January are in. Already, we’re seeing increases and the year has barely begun. GTA Realtors reported 1,506 sales during the first two weeks of 2012, representing a 6-percent increase compared to the same period in 2011. New listings were also up, by 3.7-percent, which could be a sign of a balancing market but not quite yet, as the market continues to lean toward sellers’ market conditions.
The average price for the first two weeks was $444,473, an 8.5-percent increase compared to the same period of 2011. Can’t wait to see what the rest of 2012 brings!