Re-sale home prices in the Toronto region dropped 12.4 per cent, or about $110,000, year over year in February.

The average price fell to $767,818, from $875,983 for all housing categories, including detached, semi-detached, town homes and condos.

The number of sales also plunged nearly 35 per cent last month compared to Feburary 2017 — to 5,175 transactions from last year’s record 7,955, according to the latest statistics from the Toronto Real Estate Board (TREB) on Tuesday.

But the region-wide averages are actually a mash of two different markets in the Toronto region. As some downtown homes continue to sell over the asking price with multiple offers, including the scorching condo sector, some outlying markets, notably in York Region, are lagging as sellers struggle to adjust their expectations from last year’s now-faded feverish activity.

Last month’s prices were still 12 per cent higher than February 2016 when the average was $685,278. It was also higher than January’s average of $736,783, a 4.1 per cent year-over-year decline.

The sluggish start to 2018 is what the real estate board says it predicted after the extraordinary Toronto-area market peak in the first four months of 2017. Last April, prices topped out at an average $920,791 — 24.5 per cent above the previous year.

Sales have since been declining because that month the Ontario government took cooling action by introducing its Fair Housing Policy, including a foreign buyers tax, said Jason Mercer, TREB director of market analysis.

Prices have been slower to drop from last year’s spike, with the first decline showing up in November, he said.

“As we move into the spring and summer months, it’s likely that we’ll start to see some price increases on a year-over-year basis as well,” said Mercer.

“Sometimes when we see sales off like we have since the spring of last year, it masks the fact that we are still up against a supply issue in the Greater Toronto Area, and when we do see a resurgence in demand, which we ultimately will, we’re still going to be faced with a pretty short supply in some segments of the market,” he said.

That’s already evident in the tight condo market where sales declined 31 per cent year over year in February, but prices rose 10 per cent to an average of $529,782, said Mercer.

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That compares to a 17.2 per cent drop in the average price of a detached house in the Toronto area and a 41.2 per cent decline in the number of detached home sales. In the 905 areas, detached home sales dropped 43.3 per cent compared to 33.6 per cent in the City of Toronto.

Many condos are drawing multiple offers because new mortgage stress test rules that took effect in January have pushed more buyers into the starter-home price range, said Andrew Harrild, co-founder of Condos.ca.

“It's wild. It's not showing any signs of slowing. I don't have a crystal ball, but this year has gone off to a pretty fast start,” he said.

“Would I like it to be easier for buyers in this market? Absolutely. I would like to see a more balanced market, but I don't see that correction happening any time soon,” said Harrild. “If anything we’ll be lucky if we can just get some levelling out.”

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Most downtown condos are selling over the listed price and those that aren't are units that have been priced aggressively, he said.

More than half of condo sales in Toronto are one-bedroom or one-bedroom-plus den units and only 20 per cent are bigger than two-bedrooms. Although there may be better value on the re-sale side of the condo market, both pre-construction and re-sale apartments are hot in the city, according to Harrild.

One thousand dollars per square foot is the new normal for condos, said Bosley Real Estate agent David Fleming, who says he’s never seen anything like it in the 14 years he has been selling downtown real estate. He cited one 516 sq. ft. unit that was selling for $524,900, about $1,017 per sq. ft., where offers were being held to position it for multiple bids.

“It's almost like every would-be homebuyer in the city woke up and said, ‘I realize I'll never be able to afford a house, I'd better buy something,’” said Fleming.

But downtown homes are also selling well, he said. On Monday evening he attended the sale of a house listed for about $995,000 that attracted eight offers. It sold for about $230,000 over the asking price.

“This was a house with no parking. If there was parking there might have been 15 or 20 offers,” said Fleming.

It’s a different story in Newmarket and Aurora where sellers are still lagging buyers in their expectations of what homes will fetch, said Richard Gibb of Century 21 Heritage Group.

Although open houses are becoming busier as the spring thaw approaches, Gibb said he’s not sure the market has bottomed out in his area.

“You still are seeing those housing prices based on last year's sales. There definitely is a large number of listings that are way over-priced,” he said.

“There are a lot of homes that would probably sell, but (buyers) know the house is overpriced so they're going to wait,” he said.

Homes in the area selling for $800,000 or $900,000 are still moving. Houses in the $1-million-plus range are sitting longer, said Gibb.

There have been 57 homes sold in Aurora between Jan. 1 and the end of February. They sold for 94 per cent of the list price on average and were on the market an average of 28 days.

In Newmarket, homes sold for 98 per cent of the asking price on average and took 27 days on average to sell. But this time last year, Gibb said, those homes would likely have sold within a week because the agents held off the sale to attract multiple offers — that’s if a bully buyer didn’t come in and snatch the place up first.