Can this ride continue?

Well as we near the end of May, it would appear there is no end in sight to the bidding wars, multiple offers and craziness in the real estate market.

I have been asked numerous times, do I see an end in sight?  Will this last?  What will happen IF ….

ALL of these are valid questions.  I too am asking myself, how long can this continue.  Homes are selling for record high prices.  Homes that last year in Pickering were 400 and 500 are now selling for up to 100K more.

Is it because the Toronto market with the double land transfer tax has forced people to come East to Pickering and Ajax and drive up the home prices? Possibly…. or is it that Pickering and Ajax home prices were the slowest to increase in the past years and now are playing catch up.  Maybe !

With interest rates at an all time low, I have wonder what would happen if the rates went up, even 2% over the next few years… could people afford to pay their mortgage if it doubled?   I don’t know, I guess it would depend on income, down payment and debt.   I just keep scratching my head on this one.

They say the rates are not going anywhere, anytime soon.  So can the prices keep continuing to escalate… at such a fast pace.   Some say they will.  Others are skeptical that this can last.  It definitely is a Sellers market here in GTA and Durham.

As long as the rates stay manageable and the market is strong with Buyers out in droves, things will continue to flourish.

If for some reason, the markets takes a small correction, all you have to do is ride it out.  It eventually rallies back… like it did in 1990… my fear is the people that cannot ride it out.  Then what?  Power of Sales will pop up more and more.  Let’s face it, if you bought with 5 or 10% down and prices take a dive, what equity do you have … unless you can “HOLD” for the time it takes to ride it out, many people will end up walking away… am I making sense?   Sometimes I think faster than I type.  LOL

Well just take this as a warning.  When buying or selling, hire a full time professional who knows the market and prices and will protect your interests. That is all that concerns me with my clients.   Yes, enjoy the new found money when selling at all time highs but remember you have to buy too and then the shoe is on the other foot.  So think it through and talk to your local Real Estate professional and figure out the best strategy for you.

Should you need direction or have questions about the market or neighbourhood sales, call me.  I am always thrilled to talk to real estate.

Have a super evening and enjoy the market everyone…may it long continue to thrive and prosper.

And for those sitting on the fence, remember this – never have I heard people lose money on real estate.  My parents paid 16K for their first home and it is worth about 800K… just be smart, maximize your equity and remember, you can’t live in a Mutual Fund !  LMAO

Cheers xo

Bidding Wars are happening in Durham Region… HUGE !

It can be very frustrating if after months of looking for the perfect house, you find out there are six other offers that

Bidding Wars

are registered. Most people do not want to even entertain submitting their offer at this time. Sometimes couples decide to go head first and throw their bid in. There are many different strategies to going about winning a bidding war and every situation is different. When you are trying to win a bidding war you must do things that you normally wouldn’t do in purchasing a house. Some of them are risky and sometimes you could pay later even more because of your decisions.  The problem is some people put in an offer that isn’t even close to asking and full of conditions and it only is driving up the prices.   If you are going to get into a bidding war, here are some useful techniques that may help you win.

Strategies to winning a bidding war.
1. Remove clauses: Removing financing, home inspection clauses and other clauses are very risky but it is a sure way to entice the seller to accepting.  The cleaner the offer, the better.
2. One strategy is to offer more than asking and remove conditions before they are accepting offers. This is a very frugal way to win but if you are considering not bidding this could work and give the owners something to think about. 
3. Offer a large deposit. A large deposit indicates you have the funds to close the deal. 
4. Closing Date: Give them the closing date they desire. 
5. Know your highest amount and do not go higher. If you know you cannot spend more than a certain amount do not sway and get into trouble later trying to find thousands of dollars. (This is for your peace of mind)
In the end bidding wars are a lot like poker, you have to bring your best hand and you must watch out for bluffs. A good rule to use is to put yourself in their shoes.