Earlier today the Toronto Real Estate Board released it's February 2010 Market Watch. While it appears a strong sellers market remains both in the data and on the ground, in following market news and studying more local real estate market data i've noted some signs begining to appear that change may be coming to the market this spring. For today i'll offer up a quick summmary of the February report but am working on a post that speaks to these signs.
First though some of the high level numbers, Overall the volume of available listings in the Greater Toronto Area was 32% lower in February 2010 than February 2009, this compares however to 42% lower inventory in the January 2010 report. In other words while inventory remains tight in the early going the gap is getting smaller.
Secondly the average price of a residential resale home in the Greater Toronto Area was up 19% year over year. While this is an incredible rebound it's important to note the comparison month of february 2009 is an average price stemming from a recessionary buyers market with dropping prices. The 19% increase however still represents an increase over pre-recession average prices
The third note is that sales volumes were up a staggering 77% compared to the same time last year and the volume of new listings was up 24%, again a substantial number, but with recessionary data as the comparison year.
These regional numbers are interesting high level notes but of course real estate is a very local market where values, conditions etc can change city to city, neighbourhood to neighbourhood, and even block to block based on a myriad of variables. In two East Toronto Treb Districts that I follow the year over year price increases were 21% and 22%, substantially above the market average 19%, while another was well below this at 6.77%.
This is part of what makes real estate so fascinating and perilous to navigate without expert guidance... We often don't know what we don't know and over estimate our level of knowledge whic of course can negatively impact our decisions and the resulting outcome. Competent realtors understand how important and dymanic local market conditions are and the many pieces of data that affect them today and into tomorow.
If your interested in the specific conditions that exist in your area and how this might affect your plans drop me a line and we can chat....
Showing posts with label Sellers Market. Show all posts
Showing posts with label Sellers Market. Show all posts
Wednesday, March 3, 2010
Interest Rates on the rise later in 2010?
Yesterday the Bank of Canada announced that is was going to maintain the banks overnight rate at current levels. The release further indicated that they expect to continue to conditionally hold the overnight rate at current levels until at least the end of the second quarter.
However as noted in the Toronto Real Estate Boards economic commentary on the announcement better than expected economic performance and other positive factors lead to anticipation that the Bank of Canada may begin to raise rates in the second half of the Year. If so this will of course increase the cost of borrowing and could begin to modestly impact the demand side of the Real Estate Market.
Rising interest rates is one of a number of data points i'm currently watching to get a sense of where the market might be headed... i'll have more to say on that very soon.
However as noted in the Toronto Real Estate Boards economic commentary on the announcement better than expected economic performance and other positive factors lead to anticipation that the Bank of Canada may begin to raise rates in the second half of the Year. If so this will of course increase the cost of borrowing and could begin to modestly impact the demand side of the Real Estate Market.
Rising interest rates is one of a number of data points i'm currently watching to get a sense of where the market might be headed... i'll have more to say on that very soon.
Note: that interest rates do fluctuate up and down based on other market conditions but do tend to follow the Bank of Canada's overnight rate in terms of overall direction. If you are interested in know the best going rates today you can contact Mary McCreath of Mortgage Intelligence for an update on current rates.
Tuesday, February 16, 2010
Canadian Real Estate Bubble?
There has been a fair bit of talk of a US style real estate melt down here in Canada. The Canadian Real Estate Association reported in January a 19% increase in average prices and record sales volume for 2009. While there is no doubt that Canada's and real estate market is red hot at the moment with tight housing supply and demand fueled by low interest rates all leading to increasing prices there is in my view no similarity between the current Canadian real estate market and the very troubled American real estate market.
First a 19% average price increase is being measured from a low point based on a recessionary downturn. Secondly there is no real evidence of a speculative real estate market, and finally our mortgage practices simply don't compare to those in the United States.
Quite simply our mortgage lending practices are far more responsible and measured than those in the United States that created the conditions for their massive market meltdown. In the United States sub-prime mortgages were being approved for unqualified people who couldn't possibly hope to make payments, in addition mortgages with escalating interest rates were common place. As such those approved could pay for a year or two and then rates sky rocketed and the mortgage was no longer affordable and the ability to stay in the home was compromised. These products and practices to my knowledge do not exist in Canada.
Take pride in the fact that our regulated market helped Canadians and Canadian Financial institutions avoid the worst of the world financial melt down driven in large part by irresponsible lending practices and the sale of bogus asset backed securities in the Unites States.
All this being said thousands of Candians are buying homes at record low interest rates and each home owner must look to the future and ask the question "what happens in 3 - 4 - 5 years when my mortgage is up for renewal and rates are 2 or 3 percentage points higher?" Each of us must take responsibility and look to the future to ensure our home ownership is secure and affordable and start planning ahead for when rates are higher.
I'm am always pleased to discuss my clients personal mortgage and home ownership situation to help you ensure you've protected yourself against future changes in the market. In addition the Canadian Finance Ministry today announced changes that continue Canadian efforts to ensure responsible lending practices to avoid future problems.
Take heart, I don't beleive we are in a real estate bubble and I anticipate a soft landing for our red hot market as we anticipate increased inventory easing the pressure of the existing demand, further as interest rates rise demand will dampen to some degree. Yes there are risks if for example the sellers market continues for too long a period or speculative buying start to drive prices ever higher, however on balance i am confident in the future of the Canadian Real Estate Market.
First a 19% average price increase is being measured from a low point based on a recessionary downturn. Secondly there is no real evidence of a speculative real estate market, and finally our mortgage practices simply don't compare to those in the United States.
Quite simply our mortgage lending practices are far more responsible and measured than those in the United States that created the conditions for their massive market meltdown. In the United States sub-prime mortgages were being approved for unqualified people who couldn't possibly hope to make payments, in addition mortgages with escalating interest rates were common place. As such those approved could pay for a year or two and then rates sky rocketed and the mortgage was no longer affordable and the ability to stay in the home was compromised. These products and practices to my knowledge do not exist in Canada.
Take pride in the fact that our regulated market helped Canadians and Canadian Financial institutions avoid the worst of the world financial melt down driven in large part by irresponsible lending practices and the sale of bogus asset backed securities in the Unites States.
All this being said thousands of Candians are buying homes at record low interest rates and each home owner must look to the future and ask the question "what happens in 3 - 4 - 5 years when my mortgage is up for renewal and rates are 2 or 3 percentage points higher?" Each of us must take responsibility and look to the future to ensure our home ownership is secure and affordable and start planning ahead for when rates are higher.
I'm am always pleased to discuss my clients personal mortgage and home ownership situation to help you ensure you've protected yourself against future changes in the market. In addition the Canadian Finance Ministry today announced changes that continue Canadian efforts to ensure responsible lending practices to avoid future problems.
Take heart, I don't beleive we are in a real estate bubble and I anticipate a soft landing for our red hot market as we anticipate increased inventory easing the pressure of the existing demand, further as interest rates rise demand will dampen to some degree. Yes there are risks if for example the sellers market continues for too long a period or speculative buying start to drive prices ever higher, however on balance i am confident in the future of the Canadian Real Estate Market.
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