Toronto's real estate is no longer the booming market it once was

Real estate analysts met with a crowd of agents Monday at an annual conference to discuss the challenges to Toronto homeowners and builders.

"We can expect a slowdown in 2009 and it's going to be a rocky road, but in 2010, it's gong to start to go back," Coldwell Banker President Gary Hockey said.

The result will be a more balanced market, the experts agreed.

Whereas it's been a seller's market for the last couple of years, real estate analysts predict that as the economy continues to weaken, people looking to buy a home will find more options on the market and at deflated prices.

"We're actually in a balanced market," said Phil Soper, president and CEO of Royal LePage. "We haven't quite moved into buyer's market territory yet."

Analysts in the condominium industry say they're worried what effect the slowdown will have on projects that are in the midst of being built.

Sellers find it's suddenly a 'buyer's market' as economy takes toll on housing

For the first time in more than a decade, realtor Graham Reid is telling his clients the house they are about to put on the market may not sell.

It's a tough piece of advice for sellers to hear considering that a few months ago home sales and prices were at record levels.

But the real estate market has changed dramatically in recent months thanks to a housing crisis in the United States triggered by loose lending practices that have led to a global financial crisis.

"A year ago anything would sell and now most agents are realizing, 'oh my goodness, I have a listing and it's not going to sell and I'm not going to make any money on it,"' said Reid.

Reid, who has been a Toronto-area realtor through a few housing cycles, said now is the worst time in a changing real estate market.

An Update on Toronto's Real Estate Market

The sales-to-inventory ratio dipped to 23% in September. The general consensus among most industry watchers is that a balanced market occurs when sales-to-inventory levels are between the 15% and 25% range. A ratio above 25% indicates a market that favours sellers and anything below 15% typically favours buyers. This is just the third time since 2000 that we've seen the sales-to-inventory ratio drop below the 25% threshold.

Following the decline in prices last month, most people want to know where prices are heading in Toronto's real estate market. I'll follow up soon with a more detailed analysis of real estate prices for both the GTA and the city of Toronto.

Commercial real estate investment levels halved

The federal government's stabilizing influence on Ottawa's commercial real estate market couldn't fully immunize the market from a sharp decline in investment seen nationwide in the first half of 2008, according to a recent study by CB Richard Ellis.

Investment levels across all sectors in Ottawa plunged to $322 million from $618 million a year earlier, with the multi-residential category seeing the largest drop. The office sector showed the only increase, climbing to $134 million from $89 million in the first half of 2007.

The National Capital Region experienced the second-steepest decline among the nine Canadian markets surveyed, all of which experienced double-digit percentage drops in investment, except Vancouver.