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.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?
Strong condo sales, prices surge
http://www.huffingtonpost.ca/2017/0...-condo-market-sees-62-sales-spike_a_23060272/
Condos underpriced?
https://betterdwelling.com/city/toronto/toronto-condos-might-underpriced-seriously/
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.I know of one home that had multiple offers (4) and it went $150K over asking...so.......
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.htmlI 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.
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
Let you know. I'm getting a house assessment for a credit line. See how it's risen from the last one.^^^
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.
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.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.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.
