May 2008
Dear Friend,
The Toronto real estate market today reminds me of that question that philosophers have been asking for centuries. Is the glass half empty or half full?
The glass is half empty is reflected by those who say,"April’s 8,762 listings sold were down 7% from 2007, while listings, (homes available for sale) are up by 7% and there are now 24,530 homes for sale in the GTA versus 22,829 last year.
The glass is half full proponents point out that prices increased in April and are now $385,508, 2.5% higher than last year’s $376,236. In April, the average time a property sold dropped to 27 days, 3 days faster than the average and properties sold an average of 99% of the asking price, despite more homes available for sale.
The truth of the matter is that whether one believes the glass is half empty or half full, the amount of the water does not change. The real estate market is what it is. Will prices go down? Is it the right time to buy? Should I buy an investment property? These are all valid questions that I help my clients with every day.
My feelings are that your home is the most important item you will ever buy. It is your pride, your joy, your haven from the world and when you retire, the best investment you ever made. Prices will continue to increase because our population continues to increase while the availability of land remains limited. New York, Chicago, London, Tokyo, Vancouver prices are "windows into the future" of what Toronto home prices will be.
I am not a proponent of speculation, buying today and hoping prices increase tomorrow or else I am in trouble and am forced to take a loss. If you can afford to buy and hold or rent, then I highly recommend buying. Interest rates are at bargain prices and are as or more important than price. A 5 year term on a $300,000 mortgage means an additional cost of $45,000 on an 8% mortgage versus a 5% mortgage.
If you want to chat, ask some questions, please feel free to give me a call. (If you need help in refinancing, I can usually get a better rate than most, and save you some money!)
If you know of anyone thinking of buying or selling, please let me know, I will take extra special care of them.
Have a great month,
Your friend in Real Estate