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Baby, we got a bubble!?

Riverdale Rink Rat said:
My friend, you could have stopped there. As you say -- back to bubble talk!

So let me throw this out there to the crowd -- we're (most probably) back in Toronto come July/August. Buy? Rent short term or long term? What does the UT hivemind think? Right now, I'm in the 'we've got a top put in, but no bottom yet' crowd, so I'm thinking rent.
Click to expand...

Rent for at least a year if you can. Worst case scenario: prices go up slightly (2.5%).

'course, it also depends on your individual situation. If you want to buy in a potentially hot neighbourhood, the prices there might go up even during a strong downturn in the overall market.
 
if you have a small household, there are lots of options for renting, so that would be my choice. As a current renter and an owner of an income property, I like not worrying about the homeowner responsibilities of my primary residence, but having to convince my wife to "just enjoy our life" as renters and not feel inferior somehow is a recurring discussion. I think we are at the early stages of the correction, and it will take years to reach a bottom unfortunately. So many vested interests are trying to keep the market going.
 
I don't think this was posted, but this is from earlier this week.

GTA REALTORS® Release Condo Market Report

April 16, 2013 -- Greater Toronto Area REALTORS® reported 4,133 condominium apartment sales through the TorontoMLS system during the first quarter of 2013. This result was down by approximately 17 per cent in comparison to the first quarter of 2012.

New listings of condominium apartments were also down on a year-over-basis in the first quarter, but by a lesser annual rate of five per cent.

“Buyers benefitted from a substantial amount of choice in the condo market in the first quarter, especially in comparison to low-rise home types. This being said, the fact that new condo listings were down in the first quarter suggests that the market may become tighter moving forward. This will also depend on the timing and scale of future condo apartment completions,†said Toronto Real Estate Board President Ann Hannah.

The average price for first quarter condominium apartment sales was $332,846 – down by 0.5 per cent compared to the same period in 2012.

“With months of inventory high from a historic perspective, it makes sense that the average selling price for condos edged lower over the past two quarters. However, March results were much more positive compared to the first quarter as a whole, with the average condo selling price up by two per cent annually for the GTA,†said Jason Mercer, TREB’s Senior Manager of Market Analysis.

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City of Toronto condo sales in the 1st quarter down 20% y/y. Prices down 1.3%

http://www.torontorealestateboard.c..._updates/news2013/nr_condo_report_Q1-2013.htm
http://www.torontorealestateboard.com/market_news/condo_report/2013/condo_report_Q1-2013.pdf
 
GTA REALTORS® Release Rental Market Report

April 16, 2013 -- Greater Toronto Area REALTORS® reported a substantial increase in the number of condominium apartments rented through the TorontoMLS system in the first quarter of 2013. There were 4,277 condominium apartments rented – up by almost 13 per cent on a year-over-year basis.

The total number of rental properties listed on TorontoMLS during the first quarter was up by more than 25 per cent year-over-year to 8,816.

“Demand for rental condominium apartments remained strong during the first quarter of the year. People looking for higher end rental accommodation, including those who have temporarily put their decision to purchase on hold, were likely driving rental activity during the first three months of the year,†said Toronto Real Estate Board President Ann Hannah.

The average monthly rent for one-bedroom condominium apartments in the first quarter was $1,597 – up by almost four per cent compared to Q1 2012. The average two-bedroom condominium apartment rent was up by slightly more than one per cent over the same period to $2,114.

“The rental market has remained quite tight over the last year. Competition between renters has been strong enough to drive increases in average rents. However, growth in the number of units listed outstripped growth in the number of rental transactions in the first quarter, suggesting that renters benefitted from more choice. If this trend continues, the pace of rent growth could moderate,†commented Jason Mercer, TREB’s Senior Manager of Market Analysis.

http://www.torontorealestateboard.c...updates/news2013/nr_rental_report_Q1-2013.htm
http://www.torontorealestateboard.com/market_news/rental_reports/pdf/rental_report_Q1-2013.pdf
 
GTA REALTORS® Release Mid-Month Resale Housing Figures

April 16, 2013 -- Greater Toronto REALTORS® reported 4,260 sales through the TorontoMLS system during the first 14 days of April, representing a slight dip of less than one per cent compared to the same period in 2012. The reported sales figure did benefit from one extra working day compared to last year, because Good Friday in 2012 fell in April.

“April sales to date, which were driven by strong growth in single-detached home sales in the regions surrounding Toronto, represent a positive start to the spring market. Because market conditions have remained tight, we continue to see average price growth well above the rate of inflation for many home types,†said Toronto Real Estate Board President Ann Hannah.

The average selling price for April mid-month sales was $527,397 – up 4.3 per cent compared to $505,617 in 2012. Rates of average price growth were similar for the City of Toronto and the surrounding regions under the TREB market area.

“The annual rate of price growth so far in April is actually above TREB’s forecast of 3.5 per cent for 2013. Strong growth in the average condo apartment price in the City of Toronto was a key driver in this regard,†said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis.

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Sales in the City of Toronto down 4.7%. Price up 4.6% y/y $578,327
Condo sales in the City of Toronto Down 4.3% y/y. Price up 5.9% y/y. $386,602
 
I was going to purchase a condo this past November and decided to rent for fear what the real estate market was going to do mixed with the saturation of condos, etc. So far, it seems like renting has been a bad choice as prices continue to rise. It may take longer to sell a condo but the prices are not dropping at all - they are rising just like the stats show. (I have an avid addiction to realtor.ca)

I hope when my lease is up that I haven't priced myself out of buying something. The only benefit has been that I know what the building is like that I was going to buy in and I probably wouldn't buy something here.
 
Wow, a 5.9% price increase in 416 area! Can anyone who works in the industry tell us what happened in the market in the first half of April?:confused::confused:
 
^^^
Remember this is resale market price and not new. I believe new condos are down slightly though SFH's I would bet are up.
I can't help more than that as I do not work in the industry. I suspect however that a lot of people are just staying put, not taking on more debt to move up. So with fewer moving up, those who want to trade up have less choice in the 2nd or 3rd home purchase level. At the higher end over say 1.25 million, I suspect people are not selling $1.25 million to move to $1.75million which means prices can go up for the $600 to $1 million but not as much at the higher end. This is just my speculation. Perhaps someone will prove me wrong. I have not reviewed the details of the sales.

The other problem to User ID is that average figures must be viewed cautiously. To understand you really need to compare apples and apples....i.e. look at what things were selling for in the building or neighbourhood you are interested and look at a comparable today. My suspicion is if it is a condo that you wanted last November, it is probably not up much and probably given seasonality of prices which go down after Sept/Oct that it may not be very different.
 
interested said:
The other problem to User ID is that average figures must be viewed cautiously. To understand you really need to compare apples and apples....i.e. look at what things were selling for in the building or neighbourhood you are interested and look at a comparable today. My suspicion is if it is a condo that you wanted last November, it is probably not up much and probably given seasonality of prices which go down after Sept/Oct that it may not be very different.
Click to expand...

I'm hoping the above is true and I have indeed thought about that. Since my lease will be up this coming winter, I'm hoping that the prices will be somewhat in tune with last winter if I choose to purchase.
 
Actually there has been quite a spike from November to now, but from last spring to this spring, I would say there has been a slight drop. The best time to have bought would have been October-Decemeber, because people who tried to sell in July-September did not want to accept the condo market had dropped, and prices needed to be adjusted accordingly. When those who finally accepted the price drops, sold for 5% less than spring. I kind of called the market. One needs to pay attention to the rental numbers. The rental market prices shot up so fast last year. Also the media instilling all this fear, and the change in the mortgage guidelines moved people to the sidelines or to rent. January was particularly strong because of the pent up demand. But February and March slowed a bit, which would indicate the normal price/sale stat. April has been strong because the weather is starting to warm up....albeit slowly, but most people start looking now. These numbers suggest that May should be the strongest month, and June will be the tail end of the spring market.

I still think that prices and sales will be slightly lower until June, it's just that there will be more demand, and less listings....could be interesting....If only I had a magic 8 ball.
 
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^^^
My guess is given the usual drop after October our colleague looking last November will not be materially differently off than last year November. I guess we will wait and see. Also given that most people realize that if they do not sell iby November odds are they won't sell until March the next year people might be willing to accept a bit less.
 
drewp said:
Actually there has been quite a spike from November to now, but from last spring to this spring, I would say there has been a slight drop. The best time to have bought would have been October-Decemeber, because people who tried to sell in July-September did not want to accept the condo market had dropped, and prices needed to be adjusted accordingly. When those who finally accepted the price drops, sold for 5% less than spring. I kind of called the market. One needs to pay attention to the rental numbers. The rental market prices shot up so fast last year. Also the media instilling all this fear, and the change in the mortgage guidelines moved people to the sidelines or to rent. January was particularly strong because of the pent up demand. But February and March slowed a bit, which would indicate the normal price/sale stat. April has been strong because the weather is starting to warm up....albeit slowly, but most people start looking now. These numbers suggest that May should be the strongest month, and June will be the tail end of the spring market.

I still think that prices and sales will be slightly lower until June, it's just that there will be more demand, and less listings....could be interesting....If only I had a magic 8 ball.
Click to expand...

Drewp, would appreciate if you could post your numbers -- from the ground -- for sale/rental for the balance of the month of April, May and June. Your numbers will be a lot more meaningful than the TREB numbes. Txs.
 
The thing is a 5.9% price increase in 416 condo market outpaces any other sectors of the market even SFH. Does it mean the condo market starts to warm again?
 
^^^ To Chris Hull
A couple of points are worthwhile repeating.
Despite the large numbers of condos coming on line, I believe58,000 the industry turns out 15000/year completions.
Rents are up making it possible for investors to hold on, especially given continued low interest rates.
So unless there are a lot of speculators who would not qualify to close, there is an out for the majority of condo owners
at least at present so most investors will not be forced to take lower prices.
Now if interest rates spike, if rents start dropping, if suddenly for some unknownst reason 20 or 25000 condos came on line all at once, or if there is a black swan event, then that would change.
The above all said, I don't think it means the market is "warm again". I think it just means that if none of the events I eluded to occur, at most there will be a mild steady decline or flat pricing but no "panic" dropping of prices.
 
Not sure what is getting the bulls excited.

Mid-month sales down 15% YOY (on equivalent basis), new listings up 5% YOY.
Mid-month avg prices up 2% above inflation YOY, but on different product mix per the prior sentence (and as discussed before).
Rents up 1% above inflation YOY

Pretty much the exact same story as per the past 6 months.
 
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