{"id":201888,"date":"2017-05-24T14:45:21","date_gmt":"2017-05-24T17:45:21","guid":{"rendered":"http:\/\/baldominaudo.com\/?p=19786"},"modified":"2017-05-24T14:45:21","modified_gmt":"2017-05-24T17:45:21","slug":"is-the-toronto-housing-market-shifting","status":"publish","type":"post","link":"https:\/\/metroactive.org\/wordpress\/2017\/05\/24\/is-the-toronto-housing-market-shifting\/","title":{"rendered":"Is The Toronto Housing Market Shifting?"},"content":{"rendered":"

The number of headlines and proclamations that the Toronto Housing Market \u2018Bubble\u2019 is about to burst has increased over the last few weeks. So, let me clarify things for you\u2026no one knows exactly what is going to happen in the future. This is all either speculation or reference to specific pieces of data that has been obtained of what has already happened.\u00a0Anecdotal examples of what is happening is often contradictory. Quantitative data is poorly collected, incomplete, or unreliable.<\/p>\n

Headlines this last week proclaimed that there is a flood of listings on the market. Among them:<\/p>\n

Daniel Tencer wrote\u00a0\u201cWhoa: Toronto Housing Market Actually Softens As New Listings Soar\u201d \u2026HuffPost Canada (May 3, 2017)<\/p>\n

Carolyn Ireland wrote \u201cToronto market turned on its head as flood of listings overwhelms buyers\u201d<\/a> \u2026Globe and Mail (May 18, 2017)<\/p>\n

Tess Kalinowski wrote \u201cToronto sees April home prices grow as listings soar\u201d<\/a>\u2026Toronto Star (May 15, 2017)<\/p>\n

Daniel Tencer wrote \u201c4 Signs Toronto\u2019s Housing Bubble Has Started To Deflate<\/a>\u201c\u2026HuffPost Canada (May 15, 2017), in which he points out:<\/p>\n

1. Sales are down
2. New home listings have soared
3. Buyers are hesitating
4. There\u2019s been a spike in searches for \u201chousing bubble\u201d<\/p>\n

Then this morning the Globe and Mail published \u2018Flood of Toronto listings not all that it seems\u2019 \u00a0by Carolyn Ireland. In the article, Ireland focuses on how the TREB is reporting the same house as listed two or three times. Some sellers are taking their house off the market and relisting the following week if they don\u2019t get the price they expect. She refers to quotes from some realtors that suggest this is throwing the statistics \u2018out of whack\u2019.<\/p>\n

However, they\u2019re missing the key point here. The fact that sellers have expectation above the market, which are not being met, in and of itself indicates that there is a shift happening in the market. The question in my mind is whether this is a temporal occurrence or is it the beginning of a more significant long-term term and systemic shift. I also question which housing styles and neighbourhoods this is happening, as I\u2019m pretty sure it won\u2019t be consistent in magnitude throughout Toronto.<\/p>\n

Jane McFarland wrote \u201cCanada at risk of housing correction, Moody\u2019s warns<\/a>\u201c\u2026The Globe and Mail (April 11, 2017). In the article, McFarland writes \u201cThe Moody\u2019s report likens real estate price increases in Canada and the other three countries to the gains seen in the United States, Spain and Ireland in the years leading up to their housing peaks in the mid-2000s, prior to major market corrections.\u201d However, the article does downplay the magnitude of a possible correction and its impact on the Canadian economy.<\/p>\n

From my personal experience this feels a lot like the Toronto real estate situation in the late 1980\u2019s. The headlines are similar, the sharp appreciation in house prices in the last days are similar, the contradicting arguments among economists, realtors and bankers. The difference is that now the proponents of continued appreciation are pointing to heaving migration and foreign investors as opposed to local speculators. Regardless, whatever is motivating these demand sources can also change and deter them.<\/p>\n

The bottom line is that no one has the complete picture, no one can predict specifically when there will be a \u2018correction\u2019\u00a0\u00a0and it is more important to some homeowners than others. If you\u2019re in your 30\u2019s and buying your first home, then I wouldn\u2019t be too concerned about cycles in the real estate market. In the end, given that land is a limited resources (they\u2019re not making any more of it and we\u2019re unlikely to colonize other planets any \u00a0time soon) and the population keeps growing, real estate should continue to outpace inflation and other long-term investment performance.<\/p>\n

However, if you are speculating, then consider it a form of gambling which can result in short-term losses. These losses could translate into long-term losses if you don\u2019t have the cash flow to keep up\u00a0with financial commitments associated with the property and you are forced to sell the investment. So, be careful what type of real estate you buy, where it is located, and how you finance it.<\/p>\n

If you\u2019re looking to downsize anytime over the next 5 years, you might want to consider making the move sooner rather than later. If there is a correction, you could feel the pain of the extra $100,000, $200,000, $300,000, $400,000 or even more that you could have gotten for your home. I can give you a pretty good indication of what your house will sell for in this market. It gets difficult to predict what it\u2019ll sell for next year. The best way for me to get this point across is by stating that\u00a0I can safely say that there is about a 99% chance that your home will sell for between 40% and 150% of its present market value within the next year.<\/p>\n

Call me for a market assessment of your home \u2013 Baldo Minaudo, M.B.A., Broker: 416-564-0245.<\/p>\n

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Originally published by Baldo Minaudo on BaldoMinaudo.com, Baldo Minaudo, M.B.A. is a Real Estate Broker located out of Toronto serving local and international clients. He may be reached through is office 416-698-2090 or through his website.<\/p>\n","protected":false},"excerpt":{"rendered":"

The number of headlines and proclamations that the Toronto Housing Market \u2018Bubble\u2019 is about to burst has increased over the last few weeks. So, let me clarify things for you\u2026no one knows exactly what is going to happen in the future. This is all either speculation or reference to specific…<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-201888","post","type-post","status-publish","format-standard","hentry"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/posts\/201888","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/comments?post=201888"}],"version-history":[{"count":0,"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/posts\/201888\/revisions"}],"wp:attachment":[{"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/media?parent=201888"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/categories?post=201888"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/metroactive.org\/wordpress\/wp-json\/wp\/v2\/tags?post=201888"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}