So, um, when are condo prices supposed to drop again?

[mrl14]

condo prices will fall again in Q1 2010 (to answer the thread title) lol

Don't be fooled by what the media tells you. They simply report on what happened yesterday. Unemployment continues to rise and a lot of the flippers are going to try and sell their units in the next 18 months...who will buy?? Not the people that lost their life savings in GM, AIG, WAMU, LEH, BEAR, etc.

Be patient. You'll get your unit and your price.

 

[northstar]

... and a lot of the flippers are going to try and sell their units in the next 18 months...who will buy??

What flippers?
You're assuming there's a flood of flippers just waiting to sell. The truth is - absolutely no one knows for sure where prices will end up.

A lot of people I know who have a condo as an investment property are NOT looking to flip.
Many have recently secured ideal mortgage rates, and are quite content to rent out the condo, and enjoy the positive cashflow.
Also, the Land Transfer tax has reduced people's appetite for flipping, since the sale of property is now subject to higher taxes.

People risk playing a dangerous game if they think that a condo price crash is imminent.
Trying to "time" the market in anticipation of a huge price drops could come back to bite someone, just as people who bought with anticipation of huge price increases have been burned.

If one is planning on living someplace for the next 5 years, then I'd definitely take advantage of low mortgage rates currently being offered by financial institutions and consider purchasing now. Just don't go crazy and get involved in a bidding war...

 

[Johnzz]

If one is planning on living someplace for the next 5 years, then I'd definitely take advantage of low mortgage rates currently being offered

This is exactly why house prices have held up. Anyone still waiting for a "housing crash" will be disappointed.

If the economy continues to struggle next year and the unemployment rate increases (which is probable), mortgage rates will simply remain low.

If you don't already own a home, it must be fun to fantasize buying 50% lower...

 

[slowtyper]

For the people who do NOT think the market will crash or drop significantly....how do you feel the market will be in the short term (1 year from now)?

Does anyone think prices will rise significantly or they will stay relatively steady.

 

[Eug]

For the people who do NOT think the market will crash or drop significantly....how do you feel the market will be in the short term (1 year from now)?

Does anyone think prices will rise significantly or they will stay relatively steady.

I personally think that prices may start to drop modestly once interest rates rise more. Real estate prices would be doing well if they stayed steady, but I do think that's a possibility too. Barring some sort of catastrophe or sky high interest rates, I don't think we'll get across-the-board 25%+ drops in real estate prices any time soon.

Note though that interest rates will likely not rise enormously in the coming year. That means I see June 2010 prices staying within about 5% of current prices, although I'm not really prepared at this point to say if that (up to) 5% is going to be higher or lower.

However, I'm just guessing just like like everyone else, including the self-proclaimed experts.

 

[TrickyRicky]

The problem with wishing or hoping that prices will fall is that everyone is in the same boat and your position in it is more relative than absolute. That is one of the reasons in my opinion that action tends to bear more fruit than inaction. Nevertheless a buyer today must ask themselves this question: Am I prepared to borrow a large sum of money for an asset I desire, knowing full well this asset will not appreciate in value and the financial cost of ownership will rise, perhaps considerably in the coming years?

 

[UserNameToronto]

For the people who do NOT think the market will crash or drop significantly....how do you feel the market will be in the short term (1 year from now)?

Does anyone think prices will rise significantly or they will stay relatively steady.

Steady to slight increase - 1-3%.

I don't know anyone who is thinking the market will take off like a rocket. But I also don't know anyone (who is well informed) is predicting a massive nosedive either.

 

[cabbagetowner]

For the people who do NOT think the market will crash or drop significantly....how do you feel the market will be in the short term (1 year from now)?

Does anyone think prices will rise significantly or they will stay relatively steady.

i predict moderate decrease in june 2010 (median) for gta. -5-10%.

 

[Eug]

While it's possible, I'm not yet convinced of -10% by June 2010, because I expect interest rates to be relatively low for the year.

However, I could see price drops to around there later in the year, or in 2011. And then after that, slow increases.

 

[daveto]

i predict moderate decrease in june 2010 (median) for gta. -5-10%.

I'd agree, but tilted towards the -10%. And overall I'd expecting continuing decreases until 2013-14 as 5yr term low rate mortgages reset at more normal levels.

I'll be very, very surprised if we don't see national avg prices eventually dropping by 20%+ inflation adjusted from the high water mark. I don't know if UserNameToronto considers that to be a "massive nosedive" or not, and I similarly don't know if I qualify as well informed or not , but I'll add that I studied pure math at Oxford and I'm an insurance executive.

 

[Eug]

inflation adjusted

P.S. My predictions above are not inflation adjusted.

So, even if prices were to stay steady from now until 2013, that could mean a 10% drop in real dollars.

I'll be very, very surprised if we don't see national avg prices eventually dropping by 20%+ inflation adjusted from the high water mark.

I also think that might happen within the next 8 years or so due to inflation, but most of the public really wouldn't care that much IMO if the non-adjusted price were relatively flat, and if they're buying the house to live in.

What would bother a heluvalot more people is if the prices dropped 20% next year, and I don't think that's likely to happen.

 

[cabbagetowner]

I'd agree, but tilted towards the -10%. And overall I'd expecting continuing decreases until 2013-14 as 5yr term low rate mortgages reset at more normal levels.

I'll be very, very surprised if we don't see national avg prices eventually dropping by 20%+ inflation adjusted from the high water mark. I don't know if UserNameToronto considers that to be a "massive nosedive" or not, and I similarly don't know if I qualify as well informed or not , but I'll add that I studied pure math at Oxford and I'm an insurance executive.

forgot my qualifications: i studied advanced real estate predictions at the montessori school of economics.

 

[The Condo Observer]

This analysis, though for the broader market and not specifically just condos, is somewhat sobering, and cause for concern. The off-the-chart numbers for Jun 09 represents a lot of pent up demand from the fall and winter, but its probably not a trend. The job loss situation continues, mortgage rates are creeping up, new condos will soon be on the market, the rental market has softened and rates for one bedroom rentals are down about 100 per month. The whole system is re booting, to use the cliche, and nobody knows what the new base line situation is going to be.

Investors are taking a second look before purchasing - new taxes on the horizon, lenders tightening up on loan approvals for investment property, rental rates re-setiing.

Long term, I'm still betting on T.O. as a safe place to park your hard earned bucks, whether as a homeowner or an investor.


http://www.movesmartly.com/2009/07/alarming-imbalance-in-torontos-real-estate-.html

 

[Eug]

GTA realtors report sales up first two weeks of July

TORONTO, July 20, 2009 - In the first two weeks of July, Greater Toronto REALTORS® reported 4,437 sales up 27 per cent compared to the first two weeks of July 2008. The average price for these transactions was up four per cent year-over-year to $394,750.

Year-to-date sales, at 45,213 are down four per cent compared to 2008. Average price, at $384,645 is down one per cent.

City of Toronto ("416")
July 2009 sales: 1703
July 2009 price: $419754
July 2008 sales: 1369
July 2008 price: $419199

Rest of GTA ("905")
July 2009 sales: 2734
July 2009 price: $379174
July 2008 sales: 2128
July 2008 price: $353257

GTA
July 2009 sales: 4437
July 2009 price: $394750
July 2008 sales: 3497
July 2008 price: $379072

 

[andrejeffry]

GTA realtors report sales up first two weeks of July

TORONTO, July 20, 2009 - In the first two weeks of July, Greater Toronto REALTORS® reported 4,437 sales up 27 per cent compared to the first two weeks of July 2008. The average price for these transactions was up four per cent year-over-year to $394,750.

Year-to-date sales, at 45,213 are down four per cent compared to 2008. Average price, at $384,645 is down one per cent.

City of Toronto ("416")
July 2009 sales: 1703
July 2009 price: $419754
July 2008 sales: 1369
July 2008 price: $419199

Rest of GTA ("905")
July 2009 sales: 2734
July 2009 price: $379174
July 2008 sales: 2128
July 2008 price: $353257

GTA
July 2009 sales: 4437
July 2009 price: $394750
July 2008 sales: 3497
July 2008 price: $379072

well I don't know what to say.

- Bank is already tightening credit, so anyone with shaky credit should or will not get one. hopefully
- There still seem to be demand out there. But is it a legit demand, not a pent-up demand or artificial demand created by low credit? I hope it's a legit demand.