In her search for a new home, Jean Rideout budgeted what she thought was an "ample" figure – $1 million. But the Toronto woman quickly found there was a yawning disconnect between her idea of what an upscale property should be and what she would eventually find in the city's better neighbourhoods.
"I didn't expect a palace. But you're not even getting parking in some areas for that price. I guess a million dollars doesn't go as far as it used to," Rideout, an executive with a telecommunications company, said with a laugh.
A heated Toronto real estate market is lifting sales of luxury homes as the economy starts to improve and move-up buyers regain confidence, says a report by Coldwell Banker Terrequity Realty released Wednesday.
The top-performing area with sale prices in excess of $1 million in 2009 was Forest Hill, where 280 homes changed hands at an average price of $1.42 million.
The Bridle Path area was in second place, with 221 sales and an average price of $2.1 million.
Oakville, west of Toronto, came in third with 174 properties sold with an average value of $1.67 million.
Rideout concentrated her search in the Beach and Bloor West Village neighbourhoods of Toronto, areas far less toney than the Bridle Path or Forest Hill. But multiple offers and bidding wars have made the journey a frustrating one.
"We're not looking for perfection, but it's silly when so many people are lined up bidding for what is really a very modest home for a very high price," said Rideout.
Analysts say the spring market looks like it will remain heated, as both first-time buyers and move-up buyers like Rideout enter the market before interest rates rise in the second half of the year.
Existing home sales in the Toronto area were up by 77 per cent in February compared with the same time last year, according to figures released Wednesday by the Toronto Real Estate Board.
The board said 7,291 homes changed hands last month from 4,120 homes in February of 2009.
The average price of a home was also up by 19 per cent to $431,509.
"Increases in existing home sales and average price were noted across the GTA in lowrise and higrise home types," said TREB president Tom Lebour.
"This suggests that first-time, move-up and downsizing buyers are all active in the existing home marketplace."
Comparisons with the first half of last year are slightly misleading because that was the bottom of the market, caution analysts.
The Canada Mortgage and Housing Corp. released a forecast this week that the market will remain hot for the first half of the year, before trending down in the second half and into 2011.
One bright spot for buyers is that listings improved by a significant 24 per cent in February compared with last year.
"Annual growth in new listings is expected to continue," said Jason Mercer, TREB's senior manager of market analysis.
"New listings growth will start to outstrip sales growth as we move through 2010," he said.
"As the market becomes better supplied, we will see more sustainable single-digit rates of growth."
Homes are still being snapped up because of a lack of supply. The average home is on the market for 22 days before being sold, compared with 45 days last year.