Resale Market Nearing a Turning Point.The resale market in the Greater Toronto Area (GTA) will put an exclamation point on the remainder of 2010 with a record level of activity this year.
Sales has reach six digits for the first time and price growth will be well above the historical average. This momentum as expected, has slowed in the second half of the year. In fact, the market will look quite different by 2011 as sales levels converge back to their longer-term average and prices show little movement. The era of rockbottom mortgage rates is coming to an end and the red hot GTA housing market will begin to lose its steam.
A full year of record-low borrowing costs has made first-time buyers out of tens of thousands of renters and parents’ basement dwellers in the GTA. However, the primary source of stimulus fuelling this increase in homeownership is already beginning to fade. Five-year mortgage rates are on the move and will be a full percentage point higher by the end of the year. Combining higher rates with the new reality of average prices well above $400,000 will make the transition to homeownership more expensive. The erosion of affordability will cause delay for many fi rsttime buyers, who have proactively accelerated their purchasing decisions and propped up sales temporarily.
Home sales in the GTA, however, are not expected to decline dramatically and will converge to the 10-year average in 2011. More jobs, stronger income growth and higher net migration will provide support for the market. [see full report]
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It is a good news for the Real Estate investors that sales has reach six digits for the first time and price growth will be well above the historical average. I think that type of growth comes after some years in the Real Estate market.
Posted by: omaha homes | Thursday, March 10, 2011 at 10:26 AM