The most common question I get asked these days is "What is going to happen with the real estate market?"
You might put the question up there with "When is winter going to be over?" or "When will my RRSP statement stop making me cry?".
The truth is, no one really knows. If someone did, they'd be very rich and very lucky.
But I do love to hear everyone's opinion. I'm collecting these predictions on my poll to the right. Email me if you want to put money on it as I'm always up for a good bet. We'll call it the Real Estate Pool.
Although we don't know exactly what is going to happen, I'm going to share my view on the market, as well as things to consider when you read the news reports.
At the end of my blog I've also included excerpts from major real estate organizations and associations if you really want to dive in to the muck.
Real Estate is Local
The majority of what you are reading out there (and in the clips below) is based primarily on national, provincial and city-wide numbers.
Contrast what is happening in the GTA compared to Vancouver and it's a totally different picture. Prices in the west were incredibly over-inflated and now they have a harder fall. It's even different from Rosedale to the Beach.
Lumped into those stats are various types of homes; condos, the burbs, and large detached homes. There is no accouting for the unique nature of each of those markets.
The market on a wider scope can seem daunting, especially when you blend it all together and look from 20,000 feet.
So unless you own homes of every shape and in every part of the country, read on...
Don't Trust the Local Stats Either
You can't take local monthly stats for one MLS sector literally (i.e. E02, C09) as average home prices can sometimes be based on just a handful of sales.
If a home sold for $1M in an area that typically has homes in the $750,000 range, the average price will be pulled up and vice versa.
I've found the best measure of what is happening in the market is to talk to agents as they are the ones who know the history, the activity and the pricing strategies the best.
In the Beach for example, we're seeing about a 7-8% drop since the peak months of 2008 but we don't expect to see much more of a drop this year, if any.
Supply and Price Range
Supply and demand are playing a huge role in countering some of the media predictions. In some areas, we are still seeing multiple offers for homes because they are the only decent property in a particular price range.
Winter Blahs
The recent stats are based on months that are traditionally slow. The winter season is also when sellers are more negotiable as listings in this market usually have a different motivation for a sale (relocoation, purchase of another property etc.).
The typical pattern of listing and shopping in months other than the dead of winter are coming back now that we are in a more balanced market.
The Spring Market
I'm predicting a rush of activity this spring. As per my comments about seasonality, people who have been thinking of selling (but didn't have to before) will be bringing their homes out on the market which will be a nice boost for inventory.
There is a pent up demand of buyers...those who were looking back the in fall but wanted to wait and see, either because of their own circumstances or to see the market drop a bit before they jumped in.
Plus, there is a new influx of buyers who are waking up to the opportunities out there.
I personally just bought a home that had been on the market for 70 days and got it for nearly a $100,000 under its original list price.
Final Preductions on the Market...
My final answer? It depends.
This is not a scapegoat answer, it's the truth. It depends where you are looking and what you are looking for.
Thinking of Selling?
If you are thinking of selling, CALL ME NOW. I have so many buyers (and other agents) who are looking but the low inventory of listings on the market is limiting their search.
I am literally in the process of contacting clients to ask them if they want to sell, knowing their house is perfect for someone who is searching.
There are also a lot of sellers dipping their toes in the water to test things out so keep in mind that the perfect home may not even be on MLS. I have a lot of clients who are listing their homes exclusively first before going on the market formally.
Thinking of Buying?
To wrap up the most common question for buyers, "Should I wait for the market to drop more before I buy?". If you know when the market will drop more, then by all means let me know when you think that is happening and we can find a home.
Sure, there is a possibility that prices may drop more but you may find yourself looking at higher interest rates in tandem. You may also find yourself in competition with other buyers.
My biggest testimonial to my view that there is great value right now is the fact that we recently sold our house and bought our next family home, plus we are about to buy another.
Thinking of doing both?
As I said in a previous blog, now is a great time to trade up as it costs you less in a down turning market than the peak market of the past.
Call me today so we can talk specifics and figure out the timing that works best for you.
Cheers,
Mark
416.728.2499
MARKET REPORT SNAPSHOTS:
Royal LePage
"Nationally, average house prices are forecast to dip by 3.0 per cent from last year to $295,000, while transactions are projected to fall to 416,000 (–3.5 %) unit sales in 2009. In spite of this cooling trend on a national level, price and activity gains are anticipated in some provinces."
Full Royal LePage Forecast
RE/MAX
"By year-end 2009, unit sales should match 2008 levels, while average price is forecast to fall another two per cent to $293,000."
Full RE/MAX Forecast
Canadian Housing and Mortgage Corporation
"Existing home sales, as measured by the Multiple Listing Service (MLS®)1, are expected to decline 14.6 per cent during 2009 to 370,500 units. In 2010 the level of MLS® sales is expected to increase by 9.3 per cent to 405,000 units. The average MLS® price is also expected to decrease over the course of 2009. Average prices are forecast to be $287,900 for 2009, a decline of 5.2 per cent, while 2010 will see little change from 2009 average prices."
Full CMHC Forecast
Canadian Real Estate Association
Prices are forecast to stabilize in 2010, with annual price increases of one per cent or less in five provinces. The weighted national MLS® average price is forecast to decline 6.4 per cent in 2009, and hold steady in 2010.
Full CREA Forecast
Realtor.ca (formerly MLS.ca)
"The beginnings of a Canadian economic recession and a dramatic downturn in consumer confidence late last year means that the housing market is facing significant headwinds in 2009," said CREA Chief Economist Gregory Klump. "Sales activity dropped sharply and price declines accelerated in the fourth quarter of 2008. The consensus economic forecast calls for an economic rebound in the second half of 2009, so an improvement in housing market trends is likely to wait until next year."
Full Realtor.ca Forecast
Toronto Real Estate Board
"It should be noted that the GTA housing market has followed the broader economic slowdown, but was not a cause of the downturn. Home prices remained affordable throughout the new millennium. The average family can still qualify for a mortgage on the average priced home. This remains the case today. Given that we are not facing an early-1990s-style affordability crisis, the rebound in the housing market will likely be quick once economic recovery takes hold."
Full TREB Market Report
Thursday, March 05, 2009
Tuesday, March 03, 2009
Markets & Mortgages
Check out below for the Toronto Real Estate MarketWatch Report and the current prime rate.
If you want more information on any area or to find out the current value of your home, contact me today....416.728.2499 or mark@markrichards.ca.
PRIME RATE
Prime rate is now at an unbelievable 2.5% at Bank of Montreal and other banks are following suit.
What does this mean for your bottom line?
Every $100,000 of a mortgage will only cost you $488.78 per month based on the Bank of Montreal posted 5 year closed variable rate of 3.3% over a 25 year amortization.
Now is one of the chepest times in recent real estate history to buy or trade up.
Contact Peter Majthenyi today at 416.410.3298 or peter@mymortgageplanner.ca to see how he can help you.
TORONTO REAL ESTATE BOARD MARKETWATCH -FEBRUARY 2009
Check out neighbourhoods in the GTA to find out average prices and sales activity for the past month:
Toronto Real Estate Market Watch
If you want more information on any area or to find out the current value of your home, contact me today....416.728.2499 or mark@markrichards.ca.
PRIME RATE
Prime rate is now at an unbelievable 2.5% at Bank of Montreal and other banks are following suit.
What does this mean for your bottom line?
Every $100,000 of a mortgage will only cost you $488.78 per month based on the Bank of Montreal posted 5 year closed variable rate of 3.3% over a 25 year amortization.
Now is one of the chepest times in recent real estate history to buy or trade up.
Contact Peter Majthenyi today at 416.410.3298 or peter@mymortgageplanner.ca to see how he can help you.
TORONTO REAL ESTATE BOARD MARKETWATCH -FEBRUARY 2009
Check out neighbourhoods in the GTA to find out average prices and sales activity for the past month:
Toronto Real Estate Market Watch
Wednesday, January 07, 2009
What's ahead for 2009...
Happy new year? I think so.
As someone who tends to look at the brighter side of life, I'm not so blindly optomistic that I deny the challenges the year ahead presents.
But I do have some predictions to share and some suggestions for the challenges.
When will the market bottom out?
Of course, this is everyone's biggest question. Here's the funny thing...by the time anyone has the information to call that the market has bottomed out, it's already on the rise, and usually so are interest rates.
Not to mention the crowd behind you that's also been waiting for it to bottom out. We need to stop thinking in these terms and instead look at value.
A big market correction has already happened and for the most part, sellers have adjusted to the current market. I think we may still see a few percentage points down in the coming months but mortgage rates may adjust the opposite way making it a wash in terms of the bottom line.
The value out there right now is great. I've had many buyers get great deals and encourage people to focus on overall value and finding the right home.
Today
Right now we are seeing some great opportunities:
- Mortgage rates are very low - i.e. TD Canada Trust posted variable closed rate of 4.3% and open rate of 4.5%.
- There are still a lot of highly motivated sellers out there who have already bought.
- It costs less to trade up in a down-turning market than a upward moving one.
- Inventory is good, people are adjusting to today's market and are open to negotaition.
Condos
These are good times if you are looking to get into a condo and/or new development. The oversupply and desperate developers are offering all kinds of incentives. Free parking, and evern free cars! But this is one area I would hold off on for a while to let their desperation set in a bit more.
Activity
The core GTA market should stay fairly stable with typical seasonality. I'm predicting some nice activity in the spring with some pent-up demand from buyers who have been holding their breath for the past few months. Personally I have been crazy busy with buyers as have some colleagues of mine so so we're starting to see this.
Motivation
Remember, financials are not the only reason why people buy and sell. Take me for example. I'm a sadistic person who loves to renovate over and over. Or there are clients who can now afford to get into the neighbourhoods they've always wanted to live in.
Relocations will also be up as companies shuffle the deck and our workforce travels for more opportunities. Whatever the reason, people are still motivated to move even in a shifting market.
Getting Creative
A really great way to trade up to a bigger home or to one in a better neighbourhood is to look for one where you can rent out a portion of the home for a while. If you already have enough equity or funds to put your down payment on a higher value home this is a great way to step up and sometimes even reduce your monthly costs.
My wife and I did this many years ago. Our monthly costs were only slightly higher when we made the move from a 2 bedroom, 650 sq. ft. condo north of the Beach to a detached bungalow just steps from Queen St. with a basement rental. It was a great way for us to 'trade up' and get in the area we wanted.
First-Time Buyers
Remember, a big correction has already happened and you can get amazing values combined with unbelievably low interest rates, not to mention good inventory. Don't wait for the herd to drive prices back up again and compete for the home you want.
Current Home Owners
For current home owners, everything is relative. You may sell for less but you'll also buy for less and the cost to move up to that home you've been dreaming of won't cost as much.
Sellers
Be patient and make sure you adjust to the market conditions. I know as well as anyone how frustrating it can be to have your house on the market for as long as it has been taking.
My daughter keeps wondering where all her christmas presents go when we have showings and my wife keeps telling me she is going on a cleaning strike for two months once the house sells.
We'll all get a little better.
The interesting thing about good times is that it's easy to stay in cruise control and still make progress maintaining the status quo.
In the real estate market, it meant that a lot of people jumped into the industry and were able to do a lot of business just by being order takers and sticking 'for sale' signs on your lawn. (Just watch how registrations drop and how many agents actually renew in the summer when fees are due.)
Now is when the good agents shine. Knowing and sharing market knowledge, providing value-add services, being strategic in everything you do, and investing time in life-long relationships. And the good ones will just get better.
This applies to every industry. For the most part, the cream rises to the top and a lot of people will work harder to stay there.
Overall it's an opportunity for clients to get what they deserve and more. And an opportunity for all of us to get better ourselves.
My wife says I'm still not perfect yet so I guess I have some work to do myself :)
Cheers and all the best for 2009,
Mark
As someone who tends to look at the brighter side of life, I'm not so blindly optomistic that I deny the challenges the year ahead presents.
But I do have some predictions to share and some suggestions for the challenges.
When will the market bottom out?
Of course, this is everyone's biggest question. Here's the funny thing...by the time anyone has the information to call that the market has bottomed out, it's already on the rise, and usually so are interest rates.
Not to mention the crowd behind you that's also been waiting for it to bottom out. We need to stop thinking in these terms and instead look at value.
A big market correction has already happened and for the most part, sellers have adjusted to the current market. I think we may still see a few percentage points down in the coming months but mortgage rates may adjust the opposite way making it a wash in terms of the bottom line.
The value out there right now is great. I've had many buyers get great deals and encourage people to focus on overall value and finding the right home.
Today
Right now we are seeing some great opportunities:
- Mortgage rates are very low - i.e. TD Canada Trust posted variable closed rate of 4.3% and open rate of 4.5%.
- There are still a lot of highly motivated sellers out there who have already bought.
- It costs less to trade up in a down-turning market than a upward moving one.
- Inventory is good, people are adjusting to today's market and are open to negotaition.
Condos
These are good times if you are looking to get into a condo and/or new development. The oversupply and desperate developers are offering all kinds of incentives. Free parking, and evern free cars! But this is one area I would hold off on for a while to let their desperation set in a bit more.
Activity
The core GTA market should stay fairly stable with typical seasonality. I'm predicting some nice activity in the spring with some pent-up demand from buyers who have been holding their breath for the past few months. Personally I have been crazy busy with buyers as have some colleagues of mine so so we're starting to see this.
Motivation
Remember, financials are not the only reason why people buy and sell. Take me for example. I'm a sadistic person who loves to renovate over and over. Or there are clients who can now afford to get into the neighbourhoods they've always wanted to live in.
Relocations will also be up as companies shuffle the deck and our workforce travels for more opportunities. Whatever the reason, people are still motivated to move even in a shifting market.
Getting Creative
A really great way to trade up to a bigger home or to one in a better neighbourhood is to look for one where you can rent out a portion of the home for a while. If you already have enough equity or funds to put your down payment on a higher value home this is a great way to step up and sometimes even reduce your monthly costs.
My wife and I did this many years ago. Our monthly costs were only slightly higher when we made the move from a 2 bedroom, 650 sq. ft. condo north of the Beach to a detached bungalow just steps from Queen St. with a basement rental. It was a great way for us to 'trade up' and get in the area we wanted.
First-Time Buyers
Remember, a big correction has already happened and you can get amazing values combined with unbelievably low interest rates, not to mention good inventory. Don't wait for the herd to drive prices back up again and compete for the home you want.
Current Home Owners
For current home owners, everything is relative. You may sell for less but you'll also buy for less and the cost to move up to that home you've been dreaming of won't cost as much.
Sellers
Be patient and make sure you adjust to the market conditions. I know as well as anyone how frustrating it can be to have your house on the market for as long as it has been taking.
My daughter keeps wondering where all her christmas presents go when we have showings and my wife keeps telling me she is going on a cleaning strike for two months once the house sells.
We'll all get a little better.
The interesting thing about good times is that it's easy to stay in cruise control and still make progress maintaining the status quo.
In the real estate market, it meant that a lot of people jumped into the industry and were able to do a lot of business just by being order takers and sticking 'for sale' signs on your lawn. (Just watch how registrations drop and how many agents actually renew in the summer when fees are due.)
Now is when the good agents shine. Knowing and sharing market knowledge, providing value-add services, being strategic in everything you do, and investing time in life-long relationships. And the good ones will just get better.
This applies to every industry. For the most part, the cream rises to the top and a lot of people will work harder to stay there.
Overall it's an opportunity for clients to get what they deserve and more. And an opportunity for all of us to get better ourselves.
My wife says I'm still not perfect yet so I guess I have some work to do myself :)
Cheers and all the best for 2009,
Mark
Tuesday, January 06, 2009
Beating the Winter Blahs
Anyone feeling the winter blahs yet?
After endless shovleing and scraping ice off everything, I know I can't be alone in wondering why I don't live in the Caribbean.
Here are a few quick and easy ideas to do inside and out of the house to lift your spirits.
Flowers
Your home may look like the Grinch came by the time you take down the tree and the decorations. Replace them with fresh flowers - preferably ones that remind you of spring, like tulips.
Hit the Gym
I know, you probably have this on your list anyway...but get the seratonin levels going. Because this blog is rated 'G', I won't get into details, but there are other physical activities you could be doing on a cold winters night for an even better effect...make the most of it!
Hot Yoga
It's true, I've done hot yoga. If you just want to feel the hot air on your skin and actually sweat instead of shiver from your environment, this is the activity for you. Not to mention the toxins from the holidays that you can get rid of at the same time! If you close your eyes and meditate you can actually pretend you are on a beach and someone is about to bring you a margarita any moment.
Get Out of the House
It's easy to take one look outside and turn back. Put your woolies on and get out to a museum, a bowling alley, and indoor driving range or tobogganing. Skating at Harbourfront Center is a blast, and hit the slopes for a great day of skiing or snowboarding. We're Canadian after all.
Tackle a Home Improvement Project
Maybe it's painting a room, or refinishing a lonely piece of furniture. Whatever your list includes, tackle it now.
Sign up for a Class
Is there something you've always wanted to learn? Kickboxing, art, music, cooking...whatever your hidden passion is, sign up for a regular class so you have something to get out to every week and connect with new people.
Help Others
If you're really feeling sorry for yourself, pull up your bootstraps and help someone in need. Nothing will lift your spirits faster. Shelters and food banks are especially in need this time of year. Call and volunteer or start your own campaign to collect food and blankets.
If none of these things work, just think of the excitement that buying a new home will bring :)
Cheers,
Mark
After endless shovleing and scraping ice off everything, I know I can't be alone in wondering why I don't live in the Caribbean.
Here are a few quick and easy ideas to do inside and out of the house to lift your spirits.
Flowers
Your home may look like the Grinch came by the time you take down the tree and the decorations. Replace them with fresh flowers - preferably ones that remind you of spring, like tulips.
Hit the Gym
I know, you probably have this on your list anyway...but get the seratonin levels going. Because this blog is rated 'G', I won't get into details, but there are other physical activities you could be doing on a cold winters night for an even better effect...make the most of it!
Hot Yoga
It's true, I've done hot yoga. If you just want to feel the hot air on your skin and actually sweat instead of shiver from your environment, this is the activity for you. Not to mention the toxins from the holidays that you can get rid of at the same time! If you close your eyes and meditate you can actually pretend you are on a beach and someone is about to bring you a margarita any moment.
Get Out of the House
It's easy to take one look outside and turn back. Put your woolies on and get out to a museum, a bowling alley, and indoor driving range or tobogganing. Skating at Harbourfront Center is a blast, and hit the slopes for a great day of skiing or snowboarding. We're Canadian after all.
Tackle a Home Improvement Project
Maybe it's painting a room, or refinishing a lonely piece of furniture. Whatever your list includes, tackle it now.
Sign up for a Class
Is there something you've always wanted to learn? Kickboxing, art, music, cooking...whatever your hidden passion is, sign up for a regular class so you have something to get out to every week and connect with new people.
Help Others
If you're really feeling sorry for yourself, pull up your bootstraps and help someone in need. Nothing will lift your spirits faster. Shelters and food banks are especially in need this time of year. Call and volunteer or start your own campaign to collect food and blankets.
If none of these things work, just think of the excitement that buying a new home will bring :)
Cheers,
Mark
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