Freeman Real Estate Ltd., Salesperson with over 30 years experience
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July Sales Soar!

Thank-you to Doug Hannan, Broker @ Remax West for this article…

Well, we beat the estimates again. Two weeks ago, I predicted 9,000 to 9,500 sales in July.

The market never slowed at all and in July 2009 we hit 9,951 sales reported to the Toronto Real Estate Board!

This next part is what is VERY important to pay attention to.

Right now the number of homes available for sale is at a critically low level. I’m going to repeat information from my previous message with some updated numbers. The number of sales this July jumped 27% over last year. The inventory has shrunk by 38% during the same time.

Currently the Absorption Rate (the percentage of inventory selling each month) is at an all time high. When the Absorption Rate (monthly # of sales/inventory) increases it causes prices to climb. When the number of sales increases, that’s good news. When the inventory can’t keep up with the number of sales. That’s BIG news.

Currently there are only 16,446 homes for sale. That means over 60% of the inventory is selling each month. History has shown us that an Absorption Rate of approx 30 – 35% give us a steady increase in prices. Anything above that causes prices to SHOOT up! Below I’ll show some examples over past years. If you look at it, you’ll see the pattern and identify that unless we get a huge influx of inventory (highly unlikely) prices are going to shoot up this fall. The big thing that could lower the number of sales is a failing economy. Well, according to the Bank of Canada, … the recession is OVER!

Month # of Sales Inventory Absorption Rate
July 2009 9,951 16,446 60%
July 2008 7,806 26,543 29%
July 2007 8,912 20,694 43%
July 2004 7,329 22,368 33%
July 2001 5,807 19,484 30%
July 1998 5,026 20,559 24%
July 1995 3,721 27,610 13%

Enjoy the summer. Call me if I can be of any help.


Doug Hannan
RE/MAX West Realty Inc., Brokerage
1678 Bloor St. West, Toronto, ON M6P 1A9


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