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

November Real Estate Stats are in !

TREB Stats are out !

TORONTO, December 5, 2012 – Greater Toronto Area REALTORS® reported 5,793 sales in November 2012 – down by 16 per cent compared to November 2011.

“Transactions have been down on a year-over-year basis since June, after being up substantially in the last half of 2011 and the first half of 2012. Some buyers pulled forward their decision to purchase, which has impacted sales levels in the second half of 2012,” said Toronto Real Estate Board (TREB) President Ann Hannah.

“Stricter mortgage lending guidelines, including a reduced maximum amortization period and a purchase price ceiling of one-million dollars for government insured mortgages, have prompted some buyers to move to the sidelines. This situation has been exacerbated in the City of Toronto because the additional upfront Land Transfer Tax takes money away from buyers that otherwise could be used for a larger down payment,” continued Ms. Hannah.

The average selling price was up by 1.6 per cent annually to $485,328.   I think we will have a healthy Spring market in 2013.  Mark my words ~ Michelle Makos 🙂   I will post the video shortly of the November Market Watch.