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real estate..... is it true??

Smallcock

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Smallcock

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Smallcock

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At this point I'm not interested in buying more real estate and keeping myself liquid with the hope of a correction. I could be way off but I think a slowdown is coming in 2018. Town homes in the suburbs will be selling for close to $1 million if the current price acceleration continues in 2018.

March saw a surge in listings compared to last year. It could just be sellers offloading before any new taxes are introduced. I hope it's the start of a trend in excess supply.

The highest prices are typically in May and June. I think we will see more records broken. But what happens if interest rates go up even slightly later this year considering the improving economy and the US interest hikes. Is the BOC going to continue policy to keep the dollar low for exports and feed the real estate debt crisis/frenzy?
Based on market behaviour in may-June, I bought a triplex in June at a $130k discount from what it would have sold for in March. A bad move? This is a long term play. The debt is easily serviced and will grow equity for the next couple of decades.
 

Jubee

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Detached will follow suit as home owners won't settle for anythin less than 900,000 as they all got a taste of it.
The bar has been set. Unless there are desperate sellers out there. So much guessing as to what may happen, but it will not crash, that's for sure.
As a friend put it to me "when I start seeing new buildings, developers, construction workers, walking away from their sites, then I'll get worried" --- these guys are backed by guys with big bucks who REALLY analyze the situation, they clearly see Toronto still growing.
This could be a few months of uncertainty, but it'll level out.

I know of one home that had multiple offers (4) and it went $150K over asking...so.......
 

wonkyknee

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I was watching hot property this week. They felt there was just too many sellers. People should hold off until September and list again then. That way along with new listings that come up there wil be be fewer listings??? He reiterated that the economy is strong. Lots of immigration and thousand of highly skilled students graduating into high paying jobs. He said Manulifes affordability survey was self serving. Manulife wants you to buy RSPs, but he said remember the stock market crashed in 2008 and people lost 40% in a short time. He said to stick within real estate. Even though it's down 17% right now in the long term real estate goes up. If I'm not mistaken the stock market rebounded to par within 2 years and in 1990 real estate dropped over 60% and it took 14 years to return to par. He also said by end of the show that rates won't go up cause the economy is shaky. So basically anything the real estate pundits say is all conflicting and garbage. LOL.
Don't get mixed up with whether real estate developers/builders make money versus your investment property makes money. Downtown Toronto rental market is fierce, not the GTA rental market. It is interesting to see how landlords now rent out two units in a basement that used to only rent out one. AirBnB works too. None of that shit is going into my house though. LOL.
 

wonkyknee

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I know of one home that had multiple offers (4) and it went $150K over asking...so.......
I heard of 3 homes in my previously hot Richmond Hill area that dropped their listing prices 3 times for an average of $350 000 and then each sold for varying amounts of 10-30 thousand below and over ask. Lawyers have stacks of deals not closing across the city.
It might sort itself out but with70% chance of another interest rate hike this year, I'll wait a bit longer to buy on spec.
 

Smallcock

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I heard of 3 homes in my previously hot Richmond Hill area that dropped their listing prices 3 times for an average of $350 000 and then each sold for varying amounts of 10-30 thousand below and over ask. Lawyers have stacks of deals not closing across the city.
It might sort itself out but with70% chance of another interest rate hike this year, I'll wait a bit longer to buy on spec.
Yeah it's all relative. Recall just how high prices surged in March 2017 from March 2016 across the GTA - see chart on: http://news.buzzbuzzhome.com/2017/04/where-home-prices-surged-most-gta-march-2017.html

That chart averages all home types. The price growth for detached homes at that time was even more staggering.

The current average 19% drop in prices from the April peak is not so drastic when one looks at how high prices were in April. That and the fact that the summer usually sees sales slow down and prices fall compounded with the recent government intervention.

There's a ton of inventory and many are beginning to pull their listings. Homes in great areas still routinely sell for over asking, and if I recall correctly about 40% of neighbourhoods are still seeing prices increases from the previous month (e.g. Junction, North Riverdale, etc). Check neighbourhood stats at Zolo.ca

There will be some people that may be forced to sell under duress, but I think most people (including those that bought in the first quarter of the year who have lost a ton of equity), are simply going to enjoy their home and ride out the market for years. Unless we see a huge sell off by speculators, I don't see any material negative change in market trajectory. The market will find its balance and continue up steadily. We will probably never see price growth like in 2016 to the first quarter of 2017 again in our lifetimes, and that's ok. 3% - 7% annual price growth on properties over a million dollars is still a ton of 'free' money.

This is not the toronto of 1989 in any way. Much larger population, less supply, more jobs/industry, has global cache, and is a haven for foreign investment.
 

Jubee

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Yeah it's all relative. Recall just how high prices surged in March 2017 from March 2016 across the GTA - see chart on: http://news.buzzbuzzhome.com/2017/04/where-home-prices-surged-most-gta-march-2017.html

That chart averages all home types. The price growth for detached homes at that time was even more staggering.

The current average 19% drop in prices from the April peak is not so drastic when one looks at how high prices were in April. That and the fact that the summer usually sees sales slow down and prices fall compounded with the recent government intervention.

There's a ton of inventory and many are beginning to pull their listings. Homes in great areas still routinely sell for over asking, and if I recall correctly about 40% of neighbourhoods are still seeing prices increases from the previous month (e.g. Junction, North Riverdale, etc). Check neighbourhood stats at Zolo.ca

There will be some people that may be forced to sell under duress, but I think most people (including those that bought in the first quarter of the year who have lost a ton of equity), are simply going to enjoy their home and ride out the market for years. Unless we see a huge sell off by speculators, I don't see any material negative change in market trajectory. The market will find its balance and continue up steadily. We will probably never see price growth like in 2016 to the first quarter of 2017 again in our lifetimes, and that's ok. 3% - 7% annual price growth on properties over a million dollars is still a ton of 'free' money.

This is not the toronto of 1989 in any way. Much larger population, less supply, more jobs/industry, has global cache, and is a haven for foreign investment.

Your last statement is the big difference from what I've been reading about the comparisons, well said.
 

Smallcock

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HEYHEY

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Prices are holding, people refuse to sell anything less than what they have had in their minds (made up) already.

People are still coming here, they need homes, so it's just a matter of balance, there won't be a huge 25-40% drop like some are saying --- fear mongering in the papers, what else do media outlets do to attract readers???

Real Estate will be fine, it'll taper off a bit and then pick some steam up slowly, probably sooner than Vancouver had after they got their foreign tax.

Don't stress it too much.
A million dollar house before won't go to $700,000 in the next few months. It just mean it'll be a few days longer on the market, along with some negotiating, days of bidding wars are gone, unless of course your location (location, location) is hot. ie - by a subway line, condo downtown with a parking spot (not sold separately). You're fine. Also, it helps if the house or condo are in turn key condition, meaning, you move in and start living without having to renovate anything major.


The media is just trying to freak people, it's their job. Look to news outlets on TV as proof.... FEAR, HYPE, it's all they do.


I'm no real estate expert by any means, but by talking to a few builders, developers (1 with a really sweet car lol), agents and reading a lot of things online, I just draw up my own conclusions.
Fall is going to be an interesting time no doubt.

If you're a seller, you should stick to your price, don't drop.
If you're a buyer, well, you hope they drop.

This will be a game of chicken.

Developer owned sweet car mentioned above - https://terb.cc/vbulletin/showthread.php?609113-If-any-of-you-have-a-over-200-000

So much for that prediction lol
 

Smallcock

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^^^
He's still right thus far. Million dollar homes from months ago are not being priced at $700k, and prices have not dropped 25-40%

The only thing that would cause such a dramatic shift is a recession. We may be due for one in the next year or two.
 

Smallcock

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Butler1000

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^^^
He's still right thus far. Million dollar homes from months ago are not being priced at $700k, and prices have not dropped 25-40%

The only thing that would cause such a dramatic shift is a recession. We may be due for one in the next year or two.
Let you know. I'm getting a house assessment for a credit line. See how it's risen from the last one.

Bankers know better than real estate agents.
 

Samranchoi

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Saw something today got was interesting. A new construction property purchased in the Newmarket area for over $900,000 approx 16 months ago. Deal is now closing and the appraiser valued the home approx $50,000 less than the original purchase price based upon recent sales in the immediate area. Appraisals are opinion of values but this affects the purchaser as they will need to come up with more money to close.
 

Smallcock

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What did the neighbours pay? Whitby homebuyers just found out the answer: a lot less
Mattamy Homes says softening market to blame for steep price drop in new Whitby community
http://www.cbc.ca/news/canada/toronto/volatile-housing-price-drop-1.4501010

I would welcome a housing crash. Note that even if the market crashes, it usually takes years before it bottoms, so the best deals would be had years from now.
 

wonkyknee

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What did the neighbours pay? Whitby homebuyers just found out the answer: a lot less
Mattamy Homes says softening market to blame for steep price drop in new Whitby community
http://www.cbc.ca/news/canada/toronto/volatile-housing-price-drop-1.4501010

I would welcome a housing crash. Note that even if the market crashes, it usually takes years before it bottoms, so the best deals would be had years from now.
So much for all the house pumpers around here. Clear evidence prices have dropped. $90 000 less than last year! And that's just the asking price; the sales are even lower. These new homes dropped $90 000 and up to $50 000 in extras being thrown in, more than last year.
3 more rate increases this year and we're back to prices from over 5 years ago.
 

Smallcock

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Smallcock

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Important to note that comparing Q1 of 2018 with Q1 of 2017 will give skewed results because Q1 of 2017 was an aberration of low inventory and skyrocketing prices not seen in 20 years.
 

Smallcock

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Lots of similarities from a Globe and Mail article from 1988 on why the market would not fall and keep going up:

https://www.scribd.com/doc/314505251/Toronto-Housing-Bubble-1988

Of course, a year later, the market crashed.

The current market is only being propped up by increases in condo prices, which are inexplicable considering that inventory is building. Once the exuberance has passed and some speculators begin offloading, I suspect a 2 -3 year decline in prices. Not a 50% decline like in 1989, but a smaller correction. The market overshot in 2017 IMO.
 

NiceToMeetYou

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What did the neighbours pay? Whitby homebuyers just found out the answer: a lot less
Mattamy Homes says softening market to blame for steep price drop in new Whitby community
http://www.cbc.ca/news/canada/toronto/volatile-housing-price-drop-1.4501010

I would welcome a housing crash. Note that even if the market crashes, it usually takes years before it bottoms, so the best deals would be had years from now.
I feel bad for the to-be homeowners who bought the Phrase 1 homes for $75,000-$90,000 more than the Phrase 2 buyers who bought the same types of cookies-cutter homes in the past 2 months.

All of the phrase 1 homes have yet been built or not even pour the concrete foundation which makes it feeling worse to see just dirts for two very different prices of the same type and size of homes.

It's like a business. There are winners and losers. The losers are the people who bought the homes a year ago.

The strategy right now is to wait for another two or three years for the home prices to drop further before purchasing a home.
 
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