Why the housing market is not set to melt down

[lowesthangingfruit]

I'm sure there are a few specific examples of how housing prices are plunging, but the real question is whether or not these are reflective of the market at large. Any thoughts?

I just bought a condo a few weeks ago in Liberty Village (not as an investment, but to actually live in), and I'm thinking that maybe I should have waited. Hmmm...

Unless you plan to sell in next few years,....probably doesn't matter. Your living in it, your consuming the commodity you just bought and at that time when you bought, you felt the price was right. So might as well enjoy it now and ignore what happens as long as you plan to hold on to it and enjoy the property.

 

[yyzer]

My wife at work was told by her employer that his relative bought a house for 899.000 3 months ago ( don't know where exactly though) and now he sells it for 699.000 and didn't get an offer yet. Also he added that RE agent whom he knows works in RE agency and for the past month they sold 2 houses thogh there are 45 RE agents who works there.

Regarding the house price, that information sounds incorrect to me...I am pretty well aware of prices in both Mississauga and Brampton, I check them on a daily basis, and there has been nothing like this happening anywhere..

Also, if the RE agency that you speak of has 45 agents, of whom only 2 did a deal last month, I would suggest getting a different agent and company...

 

[yyzer]

also, here's some anecdotal evidence to counter all the negative nonsense that seems to be out there.....my girlfriend and I went to an open house today, in East Mississauga...the agent there was swamped, the house was full of people, and there were about 25 names on the open house sign-in page - an this was at 3:00pm, only about half way through the event...

This was a new listing at $600K, nice house on a good street near the Etobicoke border, and there seemed to be plenty of people who are still interested in buying....

Just anecdotal, but interesting nevertheless...

 

[lowesthangingfruit]

also, here's some anecdotal evidence to counter all the negative nonsense that seems to be out there.....my girlfriend and I went to an open house today, in East Mississauga...the agent there was swamped, the house was full of people, and there were about 25 names on the open house sign-in page - an this was at 3:00pm, only about half way through the event...

This was a new listing at $600K, nice house on a good street near the Etobicoke border, and there seemed to be plenty of people who are still interested in buying....

Just anecdotal, but interesting nevertheless...

Interesting indeed. But the GTA RE market hasn't felt the real pains of the rest of the world. Remember there is a trickle down effect (wasn't that long ago the TSX was bragging to be the only bull market in town) from all this turmoil and so far GTA has not felt the full brunt. Only time will tell if we are truly immune or just late to the party.

 

[Dichotomy]

also, here's some anecdotal evidence to counter all the negative nonsense that seems to be out there.....my girlfriend and I went to an open house today, in East Mississauga...the agent there was swamped, the house was full of people, and there were about 25 names on the open house sign-in page - an this was at 3:00pm, only about half way through the event...

This was a new listing at $600K, nice house on a good street near the Etobicoke border, and there seemed to be plenty of people who are still interested in buying....

Just anecdotal, but interesting nevertheless...

The traffic seems encouraging, but I would speculate a lot of people present are nervous sellers wanting to check out the competition. I have a few friends (including myself, actually) that are constantly sampling the MLS and others to see if prices are dropping or listings increasing.
Rightly or wrongly, there is a lot of unease out there: that is 75% of the trouble right now.

 

[Observer Walt]

^ Agreed, many people at an open house are just looky-loos satisfying their curiosity about the neighbour's house, or may be sellers of other properties who are checking out the competition (a sensible move).

Anecdotes are interesting, to a point. Most people have at least one, from the days last year when properties sold in two days at prices well above asking.

In the end, the monthly statistics from TREB tell the real story, much more so than anecdotes about particular situations.

 

[Johnzz]

Let's see, interest rates are falling, C$ 20% weaker, oil 40% lower.

Not all is bad in Ontario.

Looking at the different real estate markets in Canada, I think Toronto's has the best fundamentals.

 

[lowesthangingfruit]

Let's see, interest rates are falling, C$ 20% weaker, oil 40% lower.

Not all is bad in Ontario.

Looking at the different real estate markets in Canada, I think Toronto's has the best fundamentals.

Remember low interest rates is how we got here in the first place. CAD weaker mainly in USD terms due to recent rally in greenback to perceived "flight to safety" (as if the greenback is safe). Oil down is because of perceived slow down globally (as well as speculative money having to make margin calls and exiting everything liquid).

 

[Quanttrader]

Let's see, interest rates are falling, C$ 20% weaker, oil 40% lower.

Not all is bad in Ontario.

Looking at the different real estate markets in Canada, I think Toronto's has the best fundamentals.

As long as employment and immigration holds up we can probably escape with just a 20% correction from the peak. We're already at about 6% I think. There's just no possible way that Toronto can escape a housing correction now with what's going on in the world. It is going to be a long, cold, winter here.

 

[MBS-Guru]

Guys, from the front lines. Our lender has just projected a 50% decrease in mortgage volume year or year with the elimination of the 0down/40am mtgs combined with the recent economic downturn. With falling demand in every possible sector, people are expected to be let go left and right within the next 3 months in all servicing, tech, financial, manufacturing, and retail sectors but mostly in January after the christmas holidays. I'll really be surprised if real estate doesn't fall 30% by late 2009 in the GTA. Yikes to those who bought a condo recently .... Developers have already started lowering prices and will probably continue to do so next year until they find an equilibrium b/w supply and demand.

 

[cabbagetowner]

I'll really be surprised if real estate doesn't fall 30% by late 2009 in the GTA. Yikes to those who bought a condo recently .... Developers have already started lowering prices and will probably continue to do so next year until they find an equilibrium b/w supply and demand.

I hope you like surprises. market will soften and be flat. 30% seems unlikely. we're already down 6%, our markets were frothy but nothing like out west. when everythings shaken out in the states i think they're looking about 30%. we're not comparable.

 

[Johnzz]

I hope you like surprises. market will soften and be flat. 30% seems unlikely. we're already down 6%, our markets were frothy but nothing like out west. when everythings shaken out in the states i think they're looking about 30%. we're not comparable.

Agreed. Only forced selling and severe job loss in Toronto would push prices down 30%. If house prices increased 30% last year, then fair enough. But with house prices increasing only 5-6% a year in central Toronto, fundamentals are not out of whack.

We will get a dip of maybe 10%, than flat for two years, followed by a continuation of 5-6% gains per year.

Don't forget, Toronto still has VERY strong fundamentals... (i.e. diverse economy, high immigration, restricted land use policies, etc...)

 

[cuzzin_elias]

The big difference between this recession and the ones in the 80's is the employment rate. Back in 81 and 89, unemployment reached 20%, now we're at 6% with many boomers close to retirement and being pushed into early retirement, the job market should be relatively stable which is the biggest factor in a healthy housing market.

 

[Alvar]

The big difference between this recession and the ones in the 80's is the employment rate. Back in 81 and 89, unemployment reached 20%, now we're at 6% with many boomers close to retirement and being pushed into early retirement, the job market should be relatively stable which is the biggest factor in a healthy housing market.

Ah, yes. But, with retirement comes 'downsizing', especially with what is happening in the stock markets. So, a possible flood of homes on the market in the next decade. P.S. I don't believe the unemployment rate EVER reached 20 per cent in Canada in the 1980s.

 

[Alvar]

The big difference between this recession and the ones in the 80's is the employment rate. Back in 81 and 89, unemployment reached 20%, now we're at 6% with many boomers close to retirement and being pushed into early retirement, the job market should be relatively stable which is the biggest factor in a healthy housing market.

20% during The Great Depression, perhaps.