905 Area Code Seeing Things Tougher Than 416
November 22, 2018
905 Area Code Seeing Things Tougher Than 416 – The real estate market in the 905 area code has generally had a tougher go than the more central 416. However, people who want to buy real estate in the suburbs surrounding Toronto are not letting a rougher landscape discourage them, even as interest rates rise and banks become more rigid about enforcing the rules.
According to the latest figures from the Toronto Real Estate Board, sales of condo units in the 905 posted a 12.8% jump in October compared with the same month last year. The average price of a unit rose 5.9% last month compared with October 2017.
In Markham, the sale of condo units rose by 7% when compared to the same period in October 2017. While the average price also increased over October 2017 by 4%.
Sales of detached houses in the 905 gained 6% in October compared with the same month last year, while the average price increase was almost flat at 0.4%.
For detached homes in Markham, there was a noticeable difference in sales and price. When compared to October 2017, sales decreased by 2.6% while the average sale price also decreased by 11%. In Stouffville, the news is more positive when compared to last year. October 2018 witnessed an 11% increase in sales over October 2017, while the average sale price also increased by 5%.
Some homeowners are still trying to make a quick buck after the run-up in prices in previous years. They tend to want to set an inflated asking price and the property than languishes in the market. Those homeowners are not serious sellers. Serious sellers price appropriately.
In the 905, first-time buyers especially are still striving to get into the market. Since the introduction of the mortgage stress test and the subsequent interest rate increases by the Bank of Canada, first-time buyers have found it difficult in obtaining financing. Thus, buyers have resulted in turning to alternative lenders for financing.
Affordability continues to be an area of concern, not only in the GTA but across the country. According to National Bank of Canada’s quarterly monitor, housing affordability across the country worsened in 9 out of 10 urban markets in the third quarter to mark the 13th straight deterioration in the index.
Deputy chief economist Matthieu Arseneau and economist Kyle Dahams said the time required to save for the down payment on a benchmark home at a savings rate of 10% crept up to 57.3 months from 57.2 months in the 3rd quarter from the 2nd.
In the Toronto area, buyers need an annual household income of $159,289 to afford the benchmark home ($887,025) and an annual household income of $93,602 to afford a condo ($521,239).
The challenge is that people are trying to be beyond their means.
Looking towards 2019, the market will pick up in 2019. The two sides are becoming more realistic, which means they can meet in the middle to secure a deal.
* 905 Area Code Seeing Things Tougher Than 416 written by Benczik Team Realty
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