(Ontario Real Estate Source)
By Brian Madigan LL.B.
The market always moves up sharply in the Spring, but over the winter months the market moved up 6.82%.
In January, the average price of a single family home in the GTA was $427,037. At the end of March, it reached $456,147. That’s a 6.82% increase.
The two most active months traditionally have been April and May. So, watch out for further increases. Then we are in for the start of a slowdown. Prices will decline slightly in June. Of course, “all things being equal”, and they never are!
January Is Often a Market Indicator
The month of January is always a key indicator of the trend in the market for the entire year.
At least, that’s what they say!
Let’s have a look at some previous Januarys, and see what happened:
January............ Entire Year
2004……….up……….up
2005……….up……….up
2006 ……….up……….up
2007……….up……….up
2008……….down……….down
2009……….down……….up
2010……….down……….up
2011……….down……….yet to be determined
We are essentially looking at the results in 7 years, and in 5 of those years, the month of January was an indicator of the overall trend.
However, look a little further. Is that just coincidence? Other than 2008, the year of the commencement of the recession, all markets were up. That is 6 up and 1 down. Yet in 2 out of 6 years, January provided the wrong indicator. However, there was some comfort in January 2008 turning against the tide and pointing to a down market, with the stock market later to crash in the month of October.
Sometimes, the rule works and sometimes it doesn’t. You be the Judge!
February is Always a Good Month
Again, another “truism” among real estate agents, or is it?
Let’s have a look at Februarys since 2004 and compare them to Januarys. Are the average prices in the GTA for single family homes (the key market indicator) up or down?
February
2004……….up
2005……….up
2006 ……….up
2007……….up
2008……….up
2009……….up
2010……….up
2011……….up
So, whether it’s an “old wives’ tale” or not, it does seem to work. And, it is important to note that it was even the case in 2008 with the onset of the recession.
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
