GTA Home Pricing is far better than most reports imply.

 

From a pricing standpoint, the spring GTA Housing Market is better than many publications imply.  To understand why, we need to put the current market in context.  It’s a unique time in the history of housing in the Greater Toronto Area (GTA) as a result of the previous three successive years (2016, 2015 and 2014) in which we saw unprecedented annual price increases, first 10% then 20% and then a 35% jump! That three year backdrop makes it easy to misunderstand, and easy to be misled by, current announcements of real estate market statistics.  Most year-over-year reports on PRICE are indicating a 15% drop March 2018 over March 2017, along with speculation about the reasons (government intervention, mortgage qualification rules and interest rate fears).  But if you’ve owned a home for the last four years, even with this latest 15% price drop, you’ve made a spectacular and rare return on investment, and its tax free for most people.  Home equity has increased dramatically in that time. 

 

 

 

Is a 15% PRICE DROP good or bad?  Obviously if you’re planning to sell soon, a small portion of your recent equity growth has been eroded. But the price drop is also a good thing in some ways.  Market speculators are leaving the housing market since flipping a home is no longer a safe bet. Speculators represent a false element of home demand, so it’s a good thing that the market is now less driven by their activity.  Also, the price drop over the last twelve months is a long-expected correction of a previously unsustainable price surge.  The market is now returning to a balanced position, where neither the buyer nor the seller has a consistent upper hand.  Balanced markets are good for all consumers, as it reduces the likelihood of catastrophic mistakes by those who cannot afford them (like the homeowners who bought not-yet-built homes at the highest price points of the market, hoping to sell their current home later at a market-peak price, only to discover that they are now in real trouble because they overpaid for the new build and cannot afford to sell their existing home at current prices.)

 

Click the link to read economist Derek Holt’s view, written by Sarah Niedoba

http://news.buzzbuzzhome.com/2018/04/gta-housing-market-much-better-people-think-economist-says-yes.html

 

 

 

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Real estate remains a great investment in the Greater Toronto Area (GTA).  While we have historically seen prices double every 13 years, the last 10 years have been exceptional for price growth, with home values doubling over that period. According to a report in the Toronto star.

 
real estate market burlington oakville toronto gta linda maguire toronto star
 
Implications for buyer: as we’ve seen, first home buyers are finding it more and more difficult to get into the market.  Various first time buying strategies include: teaming up with a relative or close friend, relying on parent for borrowing a big portion of the downpayment and maybe some monthly payment help, refocusing from detached homes to condos, where supply & price are both better.  
 
Implications for sellers: Many older homeowners are cashing in, selling and “downsizing”, although that word’s meaning has certainly changed. Some are heading out of the GTA, where lower prices result in cash in hand for travelling and retirement. Others are taking the equity and reinvesting larger homes, while they continue to benefit from historically low interest rates. 
 
Is likely to be an active market, once this deep winter chill lifts, around March 1.    
 
We’re always happy discuss the market.  Give us a ring any time of day or evening. 
 
 
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Cold weather tends to slow things down, and we certainly have that in spades as of January 2018. 

The Mellenials are getting more and more press, with the main group of them, known as "Peak Milennials”, now making up a big part of the first time homebuyer market.  In the Toronto market, Peak Millenials are often targeting condo’s, due to their affordability, compared with detached homes.  Baby boomers are also more and more heading for condos as a means of downsizing the complexity and maintenance of their homes, and freeing up money for lifestyle changes (mainly travel). As a result, in the GTA especially, we’re becoming a “Condo Nation”. 
 
Of course rising interest rates (another rate hike was announced today) and the forecast for addition increase in 2018 and 2019, will make it interesting.  
The level of available homes for sale, known as “Inventory” is low but will improve as we move into spring which will make buying a bit easier. 
Another factor affecting the Burlington/Oakville market is migration from other Canadian provinces.  The GTA is where the jobs are so we’re expecting that trend to continue to put upward pressure on our home prices. 
 
Lots to take in, but when you look at the marco economics, homes in the GTA are still considered by buyers across the globe to be very affordable, believe it or not, and that view, coupled with security, multiculturalism and economic prosperity will make this area a great investment for real estate for the foreseeable future. 
 
See what Royal Lepage CEO Phil Soper and others are saying: 
 
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While some purchasers jumped into the Oakville housing markets to find a property before the new OSFI stress test took effect, the majority of prospective homeowners elected to wait on the sidelines in order to gauge the impact of the new policies. This however did not translate into a large reduction in pricing, as inventory remained low across the regions. Existing residents are now also holding off on listing their homes, believing that pricing may be rekindled once new market conditions are absorbed. During the quarter the aggregate price of a home in Oakville increased by  14.2 per cent year-over-year to $1,105,412. 



 

“Aggregate" means a mixture of all home types (detached, townhomes, condo’s).  Big influences on price are the high demand and the low inventory (available homes on the market), and the new mortgage rules.  In addition, Millennials are increasing adding to the demand for homes.  

 

Full report here: http://markets.businessinsider.com/news/stocks/The-Greater-Toronto-Area-s-Housing-Market-Sees-Double-digit-Year-over-year-Price-Gains-in-the-Fourth-Quarter-of-2017-Despite-Softness-in-Quarterly-Trends-1012803221

 

Implications for buyers:  

As demand intensifies, compromise becomes more important.  Reconsider locations and style of dwelling to fit your budget and lifestyle goals, so that you get into the market and benefit from the next few years of price growth. Its a relatively balanced market, so there will be an advantage to acting quickly and that means get yourself well educated on your financing position and on the market, so you can make a quick decision when a good property becomes available.


Implications for sellers:  

There are lots of buyers out there but in this balanced market, they’ll have some level of choice, relative to the Spring of 2017.  Prices peaked in the buying frenzy as of April 2017.  Year over year, prices are well up so its been a great 12 months for capital appreciation.  The market will value your home based on comparable sales.  Properly priced homes are selling. Ensure that if you accept a conditional offer, try to ensure the buyers are well qualified (recently) relative to their financing plans


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This gorgeous, one level condo, offers a well designed open concept floor plan offers close to 1000 sq. ft., 2 generous size bedrooms and 2 full bathrooms. There are 9 ft ceilings, laminate flooring in the living/dining areas & tiles in the kitchen, baths and front entrance. 

5-02 - 2420 BARONWOOD Drive OAKVILLE L6N0X6 $454,900

There is plenty of cupboard space in the kitchen with the extended cabinets as well as a breakfast bar for your morning coffee. You have the convenience of the complex with gas bbq hoo k up -no back neighbours! This home is conveniently located in the desirable Westoak Trails neighbourhood, close to HWYS, GO, walking trails, new hospital & amenities. Perfect for first time Buyers, investors or those downsizing .

Call for your private showing; Linda Maguire 905-979-9939

#LindaMaguire #LindaMaguireRE #CondoforsaleOakville #OakvilleON 


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