REDISCOVER REAL ESTATE

Stop Chasing the Real Estate Market!

They say timing is everything in Real Estate - make sure it's your time. Not just the market!

Last spring I witnessed some pretty incredible real estate transactions. I watch the MLS like a Stock Broker watches the ticker tape. Sometimes I couldn’t believe what I was actually seeing. Houses selling for 100k over list..or more! 500 sq ft. Condos selling with multiple offers. It’s amazing how supply and demand worked in perfect harmony to turn the Toronto Real Estate market into a feeding frenzy.

I work with a lot of clients, and have sold many houses and condos in downtown Toronto. But, I have never worked with, nor advised any of my clients to participate in a full on bidding war nor do I suggest they wait for a slower market either. Simply put, Real Estate is not just about timing, it's about when you are ready! I suppose I understand why a Buyer would at times offer a huge sum over the list price…true love, rare location opportunity, house of their dreams etc...If you love a house (and don’t care that you have overpaid for it), your in it for the long haul and you’re happy, then good for you. But if you find yourself searching and holding back for months while anticipating a drop in prices, you are 'chasing the Real Estate Market' !

Unfortunately, too many Buyers have the same mindset - they are waiting for the prices to drop and what do you think is going to happen when they all start buying again? Well, demand will outstrip supply and this same group that were waiting for savings, will actually drive the prices back up in the next cycle. Buyers drive up prices, not Sellers.

Generally speaking, there are two seasons in real estate (spring and fall) but there is no date in the calendar saying when the prices are at their lowest. Average 'price rising' is a fact for a city that continues to grow. Toronto is no doubt a 'local market' and differs highly from national forcasts.

In a nutshell: Don't 'chase the real estate market' and buy when you are ready!

Looking to sell or buy this fall? Need some profesional advice? What are your real estate options?

How may I help you today? Direct line: 416-219-6662

Strong Fall Market Ahead for Toronto Real Estate!

The latest data from the Toronto Real Estate Board show that Toronto area home prices and sales are continuing to track well ahead of last year.

The average GTA price was $440,150 as of mid August, as compared with $412,186 for the same two weeks last year, and the inventory of homes for sale continues to be very low, at about 2.2 months’ supply. Anything less than 3 months’ supply is considered to be a “sellers’ market”. The graph below shows the trends in average selling prices in the GTA for the past three years.

 

Analysts, economists and media pundits have been warning for the last couple of years that real estate is overvalued in Canada, especially in hot market areas like Toronto and Vancouver. These warnings have been based mainly on the fact that house prices have been increasing more quickly than incomes, and that extremely low interest rates can’t last much longer. There is a very cool graphic in buzzbuzzhome.com that traces predictions about the Canadian housing market back to late 2009. Interestingly, many recent media reports are more upbeat than has been typical in recent months. For example, the headline in last Wednesday’s Toronto Star (normally a reliable harbinger of doom and gloom) said that “Eager buyers keep housing hot” and the article went on to say that experts are seeing Canadian real estate as an “oasis of stability” compared to the volatility in the financial markets. Looks like we’ll dodge the putative bullet for a while longer…

Assuming the present trends continue, we should expect to see a sharp uptick in prices and sales after Labour Day, similar to what was seen in 2009 and 2010 (see the graph above). The fall market typically accelerates through September and October and then slows down in mid-to-late November as the weather gets colder and thoughts turn to the holiday season. It should be a very good fall market for both sellers and buyers, with prices moving up steadily and mortgage rate increases on hold for at least the next few months.

Of course, a major global crisis, like the credit crisis in late 2008, would put a significant damper on the real estate market. I’m personally optimistic that we will avoid anything so catastrophic – but if it should happen, I’d say that a weak real estate market will probably be the least of our problems!

Looking to sell or buy this fall?

How may I help you today? Direct line: 416-219-6662

 

BoC keeps key interest rate at 1 per cent

OTTAWA - The Bank of Canada is keeping short-term interest rates unchanged, signalling to markets it will maintain borrowing costs at historic low levels for the near future in light of the worsening global and domestic economies.

As expected, the central bank kept its benchmark overnight rate at one per cent on Wednesday — where it's been for a year — for yet another policy-setting date.

Nor was there a hint in the accompanying statement that the bank may be thinking of cutting interest rates further, as suggested by some economists.

A key focus in the announcement is on how much more darkly the bank's governing council sees the gathering economic and financial storm confronting the world.

The global outlook has "deteriorated in recent weeks," it says. The European sovereign debt crisis has intensified, global growth has slowed and financial market volatility has risen "sharply." New data also shows the U.S. recession was deeper than previously thought and the recovery is shallower, and will be impeded further as Washington starts withdrawing stimulus.

The good news in the stark statement is that the bank's governors do not believe a second recession is in the offing, at least in Canada. It says the second quarter stall was due mainly to temporary factors.

"The bank continues to expect that growth will resume in the second half of this year," it says, "led by business investment and household expenditures, although lower wealth and incomes will likely moderate the pace of investment and consumption growth."

As well, "net exports are now expected to remain a major source of weakness, reflecting more modest global demand and ongoing competitiveness challenges, in particular the persistent strength of the Canadian dollar."

How may I help you today? Direct line: 416-219-6662