Predictions For The Fall Market?


3 minute read

August 31, 2012

I’m gonna make this one short and sweet, since I know everybody is getting ready for the long weekend!

Let me take a quick poll below and get a sense of how you all think the market is going to do…

There are a few burning questions to be answered, although, these “answers” will really come in the form of guesses; educated and otherwise.

What do YOU think is going to happen in the fall market?

Here is what I’d like to know…

1) What will happen to the average price?

The average price of a Toronto home topped $500,000 in the spring of 2012 – coming in at $501K, $502K, $508K, $516K, and $517K for five straight months from February to June.

Will the average house price top $500,000 in September, after cooling to $476,947 in July?

Will the average house price stay above $500,000 as we move into 2013?

2) Will the “summer lull” continue?

The summer is always slow, and as I showed last week in my post titled “You Can Make Numbers Say Anything,” the drop-off from spring to summer was more pronounced in 2012 than in 2011.

Will we see a continuance of July/August as we move into September?  Or will things revert back to the way they were in the spring?

3) What kind of sales volume can we expect?

There was a massive jump in sales in September of 2012 – 7,658 in total, compared to 6,138 in 2011.  That’s a 25% increase!  New listings only increased by 15%, so the market tightened, and prices increased.

Are we going to see more than 8,000 sales in September?

Was the market slow enough in the summer that we can expect huge sales numbers in the fall?

4) Have we seen the end of “hold-backs on offers?”

I saw a new listing today for a crappy townhouse condo in North York with everybody’s favorite line: “Offers will be considered on September 5th.”  Who the hell is going to ‘bid’ on a property like that, and who the heck is looking at real estate the day before the long weekend?

I’ve never liked the hold-back on offers, or the multiple offer process.  I can’t abstain completely, or I wouldn’t be doing my job for sellers, but I do take a much more ethical approach to the situation than I’ve seen on the flip-side when representing sellers.

Some people believe that the end of the bidding-war-game will only come when buyers stand up and say “NO,” but I think it has more to do with the market, and supply and demand.

When properties are no longer in high demand, you won’t see multiple buyers anymore; you’ll only see the one necessary to get a property sold.

The market has to cool significantly to see the end of hold-backs on offers, and even then, what’s to stop the gamesmanship of sellers listing and re-listing at different prices?

5) When will the media finally announce “the crash?”

I think that’s a fair question.

The media has been predicting a real estate apocalypse for long enough to see prices RISE about, oh, maybe 70%.

Rob Carrick wrote an article in the Globe & Mail last week about the “revenge of the first time buyer,” as if suddenly prices had tumbled, which they haven’t.

If the market were to drop 3%, would the newspapers call this a “crash?”

What about 5%?  If we saw house prices in Toronto drop 5%, would Toronto Life feature a skull and crossbones on the front cover of the magazine and predict imminent death to all home-owners?

And what if, just for argument’s sake, prices rose another 5% this fall?  What if the average house price ended up around $535,000 in October and November.  Would the predictions of a collapse be even greater?


And just for fun…

6) When will the West Side Lofts see their first special assessment?

I closed on my deal yesterday, so now I can speak freely.

This is, without a doubt, the worst condo in the downtown core, and I pity the owners.

I honestly believe that this building is a money pit that can financially cripple many of the first-time-buyers who live there.

Maintenance fees have skyrocketed already, and owners have been hit with a “leasing agreement” for heating/cooling equipment that was supposed to be owned, meaning monthly fees are close to $0.70 per square foot, plus leasing equipment, plus hydro.  And that’s for a NEW building where fees are supposed to be artificially low!

The building is literally falling apart, systems are failing, and even though final closing just took place two weeks ago, I wouldn’t be surprised if the owners were hit with a special assessment or some sort of levy for $10,000 or more.

Maybe we’ll talk about WSL more in the fall?  Or maybe I should take my lawyer’s advice, shut my mouth, avoid a libel suit, and move on.


Have a great long weekend, everybody!

The end of summer is never fun, but Fall gives us NFL Football!

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

Find Out More About David Read More Posts

Post a Comment

Your email address will not be published.


  1. Ralph Cramdown

    at 8:35 am

    1) I have no idea. It’s such a lame stat. I’d have to predict relative higher end sales versus those of lower end product, and it’s tough enough to predict one number, let alone two. OK, I’ll say UP, because flippers and spec builders are less likely to hold on waiting for a turnaround than are regular homeowners. If the first sell, even at lower prices, and the latter stand pat, prices go UP!

    2) September won’t be gangbusters. The key question is will sellers stay away in similar numbers, or will inventory start to rise beyond recent norms?

    3) Lower volume. It’s harder for some to get financed, a few people may have heard about Vancouver, and there’s no rush due to rule changes or tightening right around the corner. TREB will continue to blame land transfer taxes for EVERYTHING.

    4) Nope. Some agents and their sellers won’t get the memo on hold-backs for months. The concept is firmly ingrained, and will take a long time to go away.

    5) Everybody’s late to the party calling a crash. Realtors are perennial optimists, and the media can always find a few who’ll say showings are up! Buyers are coming back! Buy now or miss the opportunity! Even in Vancouver, I don’t think I’ve seen much use of the word ‘crash’ in local media.

    6) 2014. The board will muddle along. What % of units were owner occupied, and what % investors? I just heard about a special assessment at a place I used to live, 222 The Esplanade. Frankly, I find it hard to believe it would have been the first since then. The builders had used residential grade copper pipe in the risers — that didn’t last. My unit had been wired by a monkey, so the hall closet light had to be on before one of the bedroom lights would work. I could go on, but I won’t bore you.

  2. David Fleming

    at 9:00 am

    @ Ralph

    Re: #6 – wouldn’t it be something if it were 2012? Just imagine…

  3. mike

    at 10:39 am

    3) What kind of sales volume can we expect?

    There was a massive jump in sales in September of 2012 – 7,658 in total

    do you mean 2011? it isnt sept 2012 yet..

  4. dave

    at 11:23 am

    Well, tempting though it is to wait until the TREB August #s are out, especially after the torrid price increases in the mid-month figures. But I’ll put out my predictions (neck?) now…

    1. The $500k average (inflation adjusted to 2012) is history. The market peaked in the spring, and barring something bizarre like runaway inflation, we won’t see that again for a long time.

    ps. But I’ve not forgotten my failed 2008 prediction of a 10% drop by the end of 2009. Oh Ben Bernake, how you vex me so!

    2. Inventory usually decreases June to July, but this year it marginally increased. July new listings were the highest in recent years. Meanwhile sales moved sharply lower. I predict the move to a buyers market will continue.

    3. Sept 2011 sales were high compared to 2010, but not compared to other recent years. Sales volumes usually drop 10% Aug to Sept, a natural seasonal variance. And with Aug 2012 sales at 7600, I ‘d be shocked if Sept sales were above 8000. I think its more likely that we’d see sales below 7000, vs above 8000.
    I predict 7267 sales for Sept.

    4. Don’t know, don’t care.

    5. To be fair, the media has alternately presented articles on Toronto RE as either doomed to a substantial price correction, or the world’s greatest and most secure investment. I think this will continue, with stories on both sides of the coin, even as prices trend downwards.

    6. Hehe. Ah, sweet schadenfreude…

    1. Potato

      at 11:26 pm

      I had to wonder what media Dave had seen — there’s been hardly any bearish pieces save for the past few months, certainly not for years running except for the odd one here or there in a crowd of bullish ones. To even say it was alternating coverage is generous, IMHO.

      My predictions are much more long term than the next month or even next year, but I’ll play along:

      1) Average price will be up, more as an artifact of sales mix though — once Teranet numbers come out, it will probably read flat for the fall. We likely won’t see a negative read in YoY average prices until summertime next year.

      3) There are typically about 26,000 sales for September through to the end of the year. That’ll start to ease off, and end up at least 10% lower.

      5) The media isn’t monolithic, so you’ll have a few voices like Rob Carrick who’ll call it just based on Vancouver’s early start, and others who’ll be reporting on temporary softness, deflating balloons, plateaus, mild corrections, and a rosy year ahead after the recent breather until years after it starts.

      Ben Bernake (and Carney & Flaherty directing/allowing the stimulus here to housing) vexes us all.

  5. dave

    at 11:27 am

    Whoops. For #3, I meant to say that July to Sept sales usually decrease 10%. Not Aug to Sept. Apologies.

  6. Vlad

    at 12:58 pm

    I’ll respond to #4:

    I told my wife a few weeks ago that offer dates will be history by December.

    As for sellers listing and re-listing at different prices, I don’t call it “gamesmanship.” I call it “desperation.”

  7. Congrats

    at 4:41 pm

    Congrats on selling your unit…

  8. Kyle

    at 5:09 pm

    1. This fall average prices are going back up in Toronto. There continues to be a huge asymmetry in price elasticity of demand vs price elasticity of supply.

    2. I think the lull will end, but i don’t think it will return to the madness that was this past Spring. Having bought a place in May and sold a place in June, i feel i can say this Spring market was not normal. To see a big drop from July to June is hardly surprising, given the ridiculous gain from Feb to Mar.

    3. As a consumer sales volume doesn’t mean much to me. David, I think you may have made a typo as September 2012 numbers can’t be available yet, “There was a massive jump in sales in September of 2012 – 7,658 in total, compared to 6,138 in 2011.”

    4. For houses in prime neighbourhoods (e.g. Riverdale, Leslieville, Roncy, BWV, Junction, Beacaonsfield, Little Italy, etc), holding back offers is here to stay. There are only ever a handful of houses for sale in each of Toronto’s prime neighbourhoods at any given time and they aren’t building anymore. And for each of these houses there are literally 1000’s of people who would sell their mother to get into a house in those neighbourhoods.

    5. “When will the media finally announce “the crash?”” A better question is when will they finally stop talking about “the crash” in Toronto that neither has nor will happen?

  9. eliesha

    at 7:55 pm

    #6 – I myself have emailed you to ask about when it was going to be registered…
    I can’t believe it took so long. I’ve been loving this building for over a year and didnt want to buy yet.
    Thanks for the update on details I couldn’t have known…I doesn’t sound so dreamy anymore.

    1. Adam

      at 10:13 pm

      #6 David for being an active realtor you don’t come off as very bright. WSL maintenance fees are $0.59 psf + hydro. Close to the Glass. (Glass being $0.55 +hydro, heat separate) Yes they are a little high but that’s mainly due to Urbancorp screwing us with that “green loan provision” and having a live-in super.

  10. Joe Q.

    at 10:37 am

    Any bearish media commentary about real-estate is more than counter-balanced by the frequent printing of bullish real-estate board press releases without further commentary or alternative opinions.

    1. jeff316

      at 2:27 pm

      Not really. Lots of people read traditional media commentary. Few people read press releases from industry associations.

      1. Joe Q.

        at 10:02 am

        I’m referring articles published in major newspapers that are essentially identical to industry association press releases. The Star does this regularly with TREB press releases.

Pick5 is a weekly series comparing and analyzing five residential properties based on price, style, location, and neighbourhood.

Search Posts