Where is This Real Estate Market Going?

By Evan Sage

Along with the weather, the real estate market seems to be getting better.

Stale homes which have stayed the course through the sleet, snow, and rain are now hanging sold signs on the front lawns. These properties that have sat for 6 months are now selling in multiple offers. It is almost like a spoiled child syndrome. No one wants to play with it until another child indicates that they like it.

It is not just rumours that properties are selling in multiple offers. I have been involved in two recently and have talked to many colleagues who are finding the same thing. One agent had 11 offers registered on a place in midtown Toronto. That means there are now at least 10 unsatisfied people who are ready to jump on the next ‘right thing’ in Toronto.

We are not seeing the builders or flippers out in droves but they are starting to come out of hibernation. What does this mean? If they get started up again we will definitely see the return of central core Toronto real estate, especially if they can get access to this low interest money.

In May 2009 we were never too far down in prices in the central core as compared to May 2008, 3.5%. In fact the total number of houses sold in May 2009 was 12% greater than May 2008.  The media mainly focused on properties that were grossly overpriced in the first place. People overvalue their homes in both good and bad economies. And as far as the total number of homes sold in the first half of June we have seen an increase of 19 per cent compared to the same period last year.

Are these buyers all just optimistic suckers? Or are they the last of the people who will be getting the “good deals”? The economy seems too fragile right now to set stand in one camp or the other. But looking at the stats with the volume of sold properties up and price still down it seems good deals are to be had, but it will not take long before price increases to meet this increased demand.

I must say that I am not so naive as to think we are in the clear, but I am certainly enjoying the sun while it is shining.

I will continue to say that right now is a great time to sell, especially if you are moving laterally, moving up or diversifying your portfolio of real estate.

If the market keeps trucking along like it has in the spring Toronto proper seems like it will tighten up, if you look hard there are still some really good prices on properties right now.

Another cause to applaud is the government’s reluctance to change Canada’s immigration policies. Immigration has been a staple when it comes to the health of Toronto’s real estate. Of the 250,000 permanent landed new-Canadians 60% of them move to the GTA. That is exactly what we need to keep stimulating our housing market.

Canada has embraced immigrants in good times as well as bad and has been rewarded with the newcomers strengthening the country’s economy. A lot of newcomers generally are more inclined to own homes. People from Hong Kong, China and India all put a very high importance on home ownership. Quite often their first order of business is to buy a home.

Toronto real estate seems to be in a very healthy space right now. The whole World’s economy seems to be fragile but at least it appears that we are moving in the right direction.

Evan Sage is a Sales Representative with Royal LePage R.E.S./Johnston & Daniel Division. Evan is also a regular contributor to the Muddy York Blog.  Evan’s web site is located at www.evansage.com.