REAL ESTATE MARKETS ARE NOT NATIONAL - THEY ARE LOCAL

Why is it that experts have to talk about real estate as one big market when it is not! Not all of the U.S. market is under siege. The high end (over $5 million) has had seven and thirteen percent increases in sales for the past two years and is up again this year. Of the 150 metro markets in the U.S., median prices were falling in 77 (what the press is reporting) but were increasing in 73 (what the press forgets to talk about)!!

Another trend in the U.S. is that the urban markets are outperforming the suburban markets. Unlikely cities such as Pittsburgh, Columbus Ohio (one of the states devastated by the market down turn) and Atlanta have rising sales in their  downtown markets. And in metro markets that report separate condo sales, 41 out of 59 markets report rising condo prices!!! How is this possible if the U.S. real estate market is as bad as we are told?? Let me quote Garth Turner from his latest real estate book on doom and gloom: "an anti-real estate mood has swept America. Within months it will be here". No facts but it is good for book sales. 

So let's look at the Canadian market again. Prices and sales are slowing in the West and we are told it is coming to Toronto - just like a bad cold. When prices increase by 51% in a single year in Saskatoon, what do you expect? A correction. We have never had that type of sales hysteria in Toronto. Just a steady market with good fundamentals. Let me just leave you with the latest story from our Company. We listed a condo at $799,000 and sold it in a week for $890,000 with multiple offers. That's a price of over over $800 per sq.ft.  Is this a sign of a market correction this year? Not likely! The point is that Turner is right, there is always a market correction or slow down coming. Turner claims he called the last one - only he was 4 years too early! My guess is that Turner is early again - maybe not 4 but at least by 3 years. Do you want to be out of the market that long with prices rising! Turner's  hysteria makes for good book sales but lousy economics for home owners and investors. 

Want to Impress Your Friends with Your Real Estate Market Knowledge?

Sign up to Receive our Monthly Market Report

Receive monthly market updates on Toronto's sales and rental market as well as an in-depth look at every area in Toronto!

 

* indicates required

  • The Problem with Dual Agency

    Dual Agency seems to be today's hot topic. Most people think it occurs when a Sales Person represents both Buyer and Seller. In realty it occurs when one or more different Sales People from the same Brokerage represent the Buyer and the Seller. When there are different Sales People from the same Brokerage involved, we should really rename this, Designated Agency. This is where RECO, The Real Estate Council of Ontario, should step in and introduce new rules to cover each case. The other problem is that a Sales Person acting in Dual Agency knows all of the offers submitted ...

  • Market Report November-December 2016

    Sales Commentary On one level, sale results for October suggest that this market will continue indefinitely. Overall, sales on the Toronto Real Estate Board were ahead by 11.5% compared to October of last year. But there are signs that these sale increases cannot continue. ‘Active’ listings are down by 34% from last year at this time, and ‘days on market’ has shrunk to just 16 – meaning that we are running out of saleable properties. In 2015, sales from September to October increased by 7.5% (which is normal). In 2016, sales from September to October declined by 1%. This slowing ...

  • Who Regulates Realtors®?

    Recently, the media has pointed the finger at unscrupulous Realtors® in terms of self-dealing and unethical behavior. They want change and they point the finger at self-regulation. RECO, The Real Estate Council of Ontario was established to enforce the real estate and business brokers act and to deal with consumer complaints. It was set up by the Ontario government supposedly to provide self-regulation. In reality the government just out-sourced the cost of regulation onto the shoulders of salespeople and brokerages. Today, 6 out of 9 directors are appointed by the Government. Realtors® elect only 3. All RECO employees ...

  • Toronto Market Report October-November 2016

    Sales Commentary September sales followed a similar pattern to previous months. Sales were 21% higher than in September of 2015. But of more significance was that sales of 9900 units were more typical of a June and July than of a fall market. At the same time, listings continued to be in short supply – down 36% from a year ago. The end result is a continuing upward pressure on prices of all types of housing. The condo market mirrored the stats of the overall market – sales ahead by 30% and active listings lower by 40% against September of ...

  • Implications of Canada's New Mortgage Rules

    On October 3rd, a firestorm hit the real estate market when the minister of finance announced two changes to mortgage rules. Last week we discussed what those mortgage rule changes where. This week we want to take a look at what the implications will be of the new mortgage rules, especially those of people having to qualify for the posted rate as opposed to the actual rate for their mortgage. Will Prices Fall? First off, with buyers having less money to purchase, will prices fall? The answer is no. In real estate, if the Sellers don't get their price ...

  • New Mortgage Rules

    On October 3rd, a firestorm hit the real estate market when the minister of finance announced two changes to mortgage rules. Closing the Loophole The first rule was to remove the principal residence exemption for non residents. But think about it, how can a non-resident have a principal residence in Canada, Impossible! But now we're closing that tax loophole and that will have little impact on the real estate market. 'Stress Test' on Insured Mortgages The Second change is more serious. Now, both high ratio and conventional mortgages insured under CMHC and two other companies must be qualified under ...

  • State of the Union When it Comes to New Mortgage Changes

      The Federal Government continues to tinker with mortgage rules that it can control in an attempt to slow down real estate markets, particularly in Vancouver and Toronto. The first change, to remove the Principal Residence Exemption, for non-residents described as closing a tax loop hole is a nothing. Revenue Canada has never defined a Principal Residence and so non-residents claimed it. Think, how can a non-residenct have a principal residence in Canada? Impossible! But that is what you get from bureaucracy. Almost all non-residents buying property in Canada never considered this a factor in buying. Neither should you when ...

  • Navigating FSBOs and Mere Postings

    Since it's becoming a bit more common, this week we wanted to tackle how REALTORS® should navigate FSBOs and Mere Postings. Mere Listings are MLS Listings in which the Realtor has agreed not to provide services to the Seller other than submitting the listing to MLS, whereas FSBO stands for "For Sale By Owner." Getting Started One of the first things to consider when you get a new Buyer Client is creating two BRA (Buyer  Representation Agreement) contracts, one for MLS Listings and one for Mere Postings and FSBOs.  Each contract can state their own commission and this will actually ...

  • Market Report September-October 2016

    Sales Commentary August sales on the Toronto Real Estate Board were up by 23% over August of last year. But to make an even bigger statement, August sales were only 1% lower than July. Last year the August to July drop was 19%! Also August sales in 2016 are higher than for sales in any Fall month for 2015. However, there is a double edge sword. Active Listings in August were 37% lower than for the same month last year, and new listings for August were down by 1%. This can only mean continued rising prices in the short term ...

  • Elements of Negotiations

    Most of you have heard the phrase, “The one who speaks first loses.” Does this mean an equally matched negotiation results in two salespeople locked in a room staring at each other for hours on end? There is truth to silence as an ally but there is more to consider than this alone. So, what is the most important factor in negotiations? Communication can either be verbal or nonverbal. There has to be a statement of terms in any negotiation. Choice of words, pace, tone, medium and non-verbal clues such as body language all help deliver those terms. It’s important ...