(Ontario Real Estate Source)
By Brian Madigan LL.B.
So, what's happening in the real estate market this year?
That's difficult to say, unless you know where we've been. The regular pattern repeats itself year after year with very few exceptions. In the last decade, only 2008 was an anomaly.
Here is the monthly "ORES REAL ESTATE INDEX" which tracks the average resale prices of single family homes and condominiums in the Greater Toronto Area (GTA). The Index commenced 1 January 2005 at basis 100 points. So, the market had risen 26.59 percentage points by 31 January 2010, or 32.15 by January 2011.
Let's have a look at the price structure month by month:
126.59..........January 2010
133.54..........February
134.52..........March
135.42..........April
138.20..........May
134.63..........June
130.12..........July
127.19..........August
132.24..........September
137.32..........October
135.55..........November
134.30..........December
132.15..........January 2011
Each year starts out in January with the base for the year. In 2010 it started out at 126.59. It increases in February, again in March, and rises in April. It reaches its peak either in April or May.
Then the declines set in. It decreases in June and July and reaches a low point in August.
Then the cycle reverses itself, and resumes its forward pace in September. It reaches its second peak for the year in October. The October high is just within a few points of the earlier Spring high.
Then the market is set for decline. That occurs in November, and December will be lower again. Then, we are ready for a whole new year and the cycle to resume providing the same pattern again.
This year, we have a base starting at 132.15, which is the equivalent of the September numbers. The market should rise from now to the end of May, and later peak again in October at about the same number as May. You saw a 6.95% increase in February 2010. That could happen again, taking the Index to 139.10 this year which you could see as early as February 2011.
If you have a consistent pattern, then you can reasonably predict the market. It's not just wild guessing, it's science (well, at least to some degree).
Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through Royal LePage Innovators Realty, Brokerage 905-796-8888
www.OntarioRealEstateSource.com
