Toronto Market Soars Ever Higher

Following an exceptionally strong January, the GTA market has accelerated even further in February, with the average selling price across all GTA areas and all types of real estate almost 28% higher than last February. The last time we had year-over-year price increases like this was in the late 1980′s, when prices rose by an average of 26%/year for four straight years, a bona fide bubble that ended abruptly in 1989 and was followed by 6 years of falling prices.The “B Word” is showing up everywhere in the media and, while it’s pretty clear that the rapid increase in prices cannot be supported by economic fundamentals, history teaches us that this sort of imbalance can continue much longer than you would think possible before the correction finally comes. So, is a market crash around the corner, or will this continue for another year, or two, or three  or more years? I’ll leave that sort of crystal ball gazing to the ‘experts’; in my view the timing is completely unpredictable, as is the eventual trigger (if any) that will signal the turning point.Along with the rapid increase in prices has come a significant reduction in inventory, which in February was less than one month’s supply of homes & condos for sale. The paucity of listings is driving frenzied and ferocious bidding wars all across the GTA and is a principal reason for the acceleration in prices, as eager buyers compete for fewer and fewer homes.You would think that more and more sellers would be encouraged to put their homes up for sale to take advantage of this hot market, but that isn’t happening

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Toronto Market Soars Ever Higher

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