Here we go again.............suddenly the real estate market in Toronto is going to crash! With all the doom and gloom that has been printed lately, you would think that we are headed for disaster.
Interest rates for long term mortgages (5 years +) have increased in the last few weeks, several times and I think this has caught a lot of people by surprise. A few weeks ago, you could have locked into a 5 year term for 5.09% but now you can count on at least 6%!
On a $300,000 mortgage, that would mean an increase of $159 a month!
Not a huge amount but it could be the difference between someone entering the real esatate market or not.
Will rising interest rates have an immediate impact on Toronto's housing boom - probably but not as significant an impact as some would suggest. Remember, tomorrow there could be an announcement that mortgage rates have come down. That being said.......Toronto's real estate market is overheated and could use a bit of cooling. Especially for those buyers who are always in bidding wars - they might find less competition!
So what's likely to occur is lower year over year increases in homes as long as interests are rising. Rates could stay at these levels and we'll see what the impact is.
In the fall of 2005 - a 5 year mortgage was at 4.3%. Shortly afterwards, rates rose making a 5 year mortgage hover around 5% and the same drama unfolded then as it is now. We survived then as I am sure we will survive now!
So let's all take a deep breath - impending crash? Well not anytime soon!
Sam
Sunday, June 17, 2007
Wednesday, June 13, 2007
location location location
This is one of my favourite real estate subjects.
It's the first rule of real estate buying! And I'm sure everyone has heard it before. The second rule of real estate reads: See Rule #1
Recently, I was attending to family matters and this means I have to travel to Windsor, Ontario. This is where I grew up and many members of my extended family and some of my immediate family live there still.
And of course, everyone wants to talk about real estate when I visit. They all want to know about the Toronto market, as do you. When I first started working in this business - I was always being asked - can prices keep going higher? What about a real estate bubble? That was four years ago.
Well prices have continued to climb while interest rates have remained quite constant. This cannot be said for Windsor. Same country - but different economy.
Windsor's economy is so directly connected to the automotive industry, that when that sector is in decline, so is Windsor. Recent comments by Buzz Hargrove have only made things worse there.
One story I heard this weekend was about how families are going to their banks with keys in hand and walking away from their homes as they can no longer afford them. Wives' tale? It seems that for every buyer in Windsor - there are probably 10 homes to choose from.
My dad sold his home about 3 years ago. Since then, the person who bought the home had to sell it and did so for a loss of $10K.
So what keeps Toronto's market moving upward? It's probably the constant influx of new residents. Most of Canada's immigrants come to Toronto and as long as this continues, the demand for housing and thus increased prices will keep moving forward.
If you would like an appraisal of your home, contact me at samsoukas@rogers.com
Our homes are typically our single largest asset, and you should have appraisals done annually so that you always know the value.
Enjoy that hot summer weather!
Sam
It's the first rule of real estate buying! And I'm sure everyone has heard it before. The second rule of real estate reads: See Rule #1
Recently, I was attending to family matters and this means I have to travel to Windsor, Ontario. This is where I grew up and many members of my extended family and some of my immediate family live there still.
And of course, everyone wants to talk about real estate when I visit. They all want to know about the Toronto market, as do you. When I first started working in this business - I was always being asked - can prices keep going higher? What about a real estate bubble? That was four years ago.
Well prices have continued to climb while interest rates have remained quite constant. This cannot be said for Windsor. Same country - but different economy.
Windsor's economy is so directly connected to the automotive industry, that when that sector is in decline, so is Windsor. Recent comments by Buzz Hargrove have only made things worse there.
One story I heard this weekend was about how families are going to their banks with keys in hand and walking away from their homes as they can no longer afford them. Wives' tale? It seems that for every buyer in Windsor - there are probably 10 homes to choose from.
My dad sold his home about 3 years ago. Since then, the person who bought the home had to sell it and did so for a loss of $10K.
So what keeps Toronto's market moving upward? It's probably the constant influx of new residents. Most of Canada's immigrants come to Toronto and as long as this continues, the demand for housing and thus increased prices will keep moving forward.
If you would like an appraisal of your home, contact me at samsoukas@rogers.com
Our homes are typically our single largest asset, and you should have appraisals done annually so that you always know the value.
Enjoy that hot summer weather!
Sam
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