How does your Toronto neighbourhood rate, in a city where the housing prices have gone up, up and up again in the past few years? Are we in for a crash, or is this simply an overly hot market cooling down to a more reasonable level?
In some neighbourhoods, bidding wars are still common, while in others, buyers are no longer at the mercy of vendors asking for a clean offer and a very large cheque.
For the first time in more than a decade, the average house price in Toronto has declined. The relentless upward trajectory in prices reversed course last month, making dwellings cheaper than they were in August, 2007.
The slip was small — only 1 per cent — but some economists see it as a significant psychological shift. They say Canada faces the prospect of lower house prices in the coming months after 2008 sales decelerated through the end of August.
How does a home buyer make sense of it all? Toronto Real estate expert John Pasalis was online earlier for a discussion on the state of the housing market in Toronto.
John Pasalis is the founder of Realosophy.com, a Toronto-area real estate information and services company. A graduate of the University of Toronto, he holds a B.Sc. in Economics. Mr. Pasalis began his career in real estate 10 years ago, first working as a portfolio investment manger and then moving into sales. He is a sales associate with Prudential Properties Plus in Toronto and a frequent contributor to MoveSmartly.com, a prominent Toronto real estate and neighbourhoods blog.
Founded in 2006 by four friends around a kitchen table, Realosophy.com brings consumer-focused real estate education together with cutting-edge technology solutions to serve the needs of home buyers and sellers. The website is quickly growing popular with consumers and real estate industry professionals alike. Among its service offerings is the Toronto and GTA Neighbourhood Profiler, a comprehensive resource on average home prices, school performance and transit routes for over 180 neighbourhoods.
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Danielle Boudreau, globeandmail.com writes: Good afternoon John, and thank you for taking the time to talk to our readers about every Torontonian's favourite water cooler topic, real estate. It seems that everybody wants to know where the market is going, up, down, or just levelling off for a while. What do you think will happen in the next few months?
John Pasalis: Hi Danielle, I'm glad to be back for another online discussion about Toronto's real estate market.
As our analysis in today's Globe and Mail report shows, there are very interesting times in Toronto's real estate market.
While Toronto's housing market has certainly slowed, it's not a housing bubble I'm worried about. Experts are finding that Toronto's appreciation is based on some solid fundamentals, whereas markets in the west appear to be overvalued.
I am far more concerned about sluggish U.S. and Ontario economic growth and disappearing consumer confidence. Unfortunately nobody really knows how these events will unfold and what impact they will have on the Canadian economy.
Bank of Canada Governor Mark Carney suggests that one of the primary effects of the U.S. turmoil will be to dampen Canadian exports. CIBC's Jeff Rubin has suggested that Canada's economy will benefit from the proposed $700B bail out, but Washington is still arguing that one out.
W Tran from Toronto Canada writes: I am a young professional that has been saving up to enter the real estate market and am interested in buying a newly built condo. Given the way real estate markets are dropping in the US and unknown conditions in Canada, would it still be advisable to invest in a new development in the Toronto area in the next 6 months? Or should I just wait and purchase a re-sale unit in 1 years time?
