HawthorneVillager.com

The problem is you are looking at half a year. Of course the tail end of 2010 is going to be poor.. the front end of 2010 was INSANE! The market saw similar transactions in the first 6 months that you would normally see in an entire year. It's already been said over and over that the fear of HST, advantage of low interest rates and new lending rules would cause most of the housing activity planned for 2010 to take place in the first half as those n the fence about buying property jumped in and did it quickly.



If you stop looking at August vs. last August.. or Summer vs. Last Summer and start looking at 2010 vs. 2009, you will see there is no crash.

Exactly. Year-over-year comparisons can be very soothing, but it's comparison to peak that matters.

Then we have a housing correction each year.

Unless you are a total newbie we all know Spring market is very strong and the summer is generally weak. As stated this years spring peak was exaggerated due to the factors I listed, but try and compare April/May sale of the last 10 years to July/August sales.

You will see the same pattern.

I think the OP should get an award, least active poster with a thread that is 10 pages! Just one post!

The reason I went back to the first page was I wanted to be sure I was not off, I believe he was more concerned about Mattamy (Milton) homes will drop by 10%. So far, maybe 1% drop - again I still think that drop is seasonal. The all time high average for the GTA is $446k as you quoted not all time high average for Milton. In fact we are way below that figure on average.

Fact is, next spring we will see if the all time high of 446k, is really an all time high or will get beat within a year. Right now lets agree to disagree it will tank, neither of us knows for a fact. Grab my popcorn and set my reminder to revive this thread in the spring.

First of all, thanks for the respectful ending to that post. Actually, I don't think there's a way I can be proven incorrect, since I'm not really predicting anything. I promote reasonable mortgages, living within your means, and buying what you can really afford, not what the Banks tell you you can afford.

On the flip side, I don't think there's a chance you will be proven incorrect either, since there will obviously be rises and falls, some predictable, most not. Yes, there is significant data to prove that we cannot keep growing at the rate we have been. But there is no data that guarantees that everyone will lose their shirts. You'll be right, but will it be in 5 yrs, 15? 25? We have no clue what will happen, or what other government stop-gaps might postpone seemingly inevitable downturns - we have absolutely no clue.

If I preach anything, it's a level headed, practical style of investing and borrowing, and finding ways to minimize your risk.
What happened during the last housing crash in the 80s? A lot, but nothing. What happened in this most recent recession we're in? a lot, but nothing. Many of us didn't feel a thing (sure, many were affected, but my goal is to shield my family from any potential fallout.)

As I said before, I think we actually agree on a lot of the fundamentals of these discussions - where we disagree is our personal feeling toward what could potentially happen, because I'm an opportunist I guess - I have this odd feeling I'll figure out a way to manage any situation and protect my family from any hardships I possibly can, so the possibilities of doom don't really scare me all that much

When average prices drop, that could mean more people are buying smaller homes and condos during the time period. It doesn't necessarily mean the value of every individual home went down by that amount.
It could, but one stat alone is tough to interpret. Many variables to consider, of course....


I can't STAND this practice. "Sold in 1 day for 102% of asking?" um, NO, you actually sold in 37 days for 93% of the original asking.... sorry, I hate this scam too... There are entire brokerages that bank on this practice.


Thanks Happy to know people feel I stand out from the pack. And if you haven't guessed by now, I LOVE talking about this stuff

I would NEVER, EVER sell them this home because I would never suggest a 35yr mortgage. (I wouldn't reject their business, we'd sit down and look at ALL the options)

I despise 35yr mortgages (search for my posts on reaming out some of the mortgage reps that pushed the 35 and old 40yr ones.

For me, this is a referral business. If my clients are miserable and poor in 2 yrs, will I be happy with a few thousand bucks? No. Will I get referral business from them? likely not.

Ask any of my current or past clients, that listen to me rip apart houses as we walk through them together I point out faults they don't see, potential money pits, and never EVER send listings above the prive ranges we initially agree to. A quick commission is short lived, and doesn't get me ahead at all. It also doesn't get me +20 karma either
Clients come first, the commissions will come naturally. That sounds super-CHEEZE but it is absolutely true, and I can sleep at night quite easily

Please, the 80's crash was because interest rates went up to 13%!

I don't know very much about the 80's interest rates, cause I was starting grade school at that time, but according to this Chart from the Bank of Canada it looks like 1975 to the end of 1979 had an interest rate average of under 10% The 80's interest rates started at around 13% and spiked to around 22%. Therefore in under 4 years (1979-1983) interst rates went up by 12% that more then doubled what people were paying 4 years earlier. At this point no one knew what would happen next. They could not foresee the future nor could they have know that interest rate would drop soon. Business must have been scared and layed of by the thousands, with most households having only one income this would have had a huge impact on any outside spending.
Large decissions were to be made at this time, decissions that would effect the economy ie: sell the house and loose money or hold onto it and hope to make it out without going bankrupt. I'm sure many people sold/lost their homes and business during this depressing time.
Small and large business owners must have been scared and layed of by the thousands, with only one income this would have had a huge impact.
I'm no expert but I would imagine that this would make a pretty big ripple in the market. I don't see how you can just pass this off. Of course this was not the only thing that caused the ressession, but surly it must have had a huge impact on it.

Anything's possible, but thanks for the positive words.
I haven't yet come up with a long term growth plan as of yet - I'm just maintaining my max of 3 clients at a time and balancing my family time (the most important piece of the pie for me!), and loving every minute of it. I agree, there will definitely be some good opportunities with a downturn, because many part-time agents will leave the industry, and the cut-throat guys will eat other up. I'll maintain my niche of the honest, knowledgeable, hard-working agent that people trust - there are a few of us out there, and I'm sure all of us will be fine even in a downtown (2011-2012 or 2020, whenever this next one actually happens.)

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"Just when I thought I was out....he pulls me back in..." Sorry to take a little liberties with the classic Godfather quote.

Funny that in a topic based on a predicted drop in price, you glance over the pricing and focus on sales.

yes, the number of sales are down, as had been predicted all year for the second half of the year. But if you look at price, it is up year over year, and in line with the peak this year as well. You can;t look at average price, you need to look at median price - average is too affected by swings dues to outliers in price (both low and high), while median is much more consistent (median is exactly half the sales were higher, half were lower.)

Looking at median price, Milton has matched the highest YTD median, and is slightly off the high for the year - which was not in May ($371,650 median price), but in (drum roll please...) July! July had the largest drop in sales year over year, yet the median price was higher than at any other time ($381,000).

If you look back to our original "disagreement", I said you were taking too many liberties with stats to try and prove your point - you still are doing the same.

Let me just say - I hope you are right and that a 10% (or even 20%) drop in price happens next spring - I am looking to move up to a larger home and would actually welcome a drop of that size. However, if you read any of the various banks and real estate associations who track and predict, everyone is saying that the market is soft right now and prices are generally holding steady or growing slightly over the next 6 months.

However, I owe you a drink of your choice should prices drop by 10% or more any time in the next year.

Deal?

dot dot dot... "In overvalued areas."

Think downtown Toronto, downtown Vancouver. 60 year old homes selling for $800k

35%?!?!? Now you are just talking crazy - 10% may happen - and that will be in overvalued areas. Milton will (hopefully) see a 5-10% drop and nothing more. Also, CIBC said that houses , on average, are 11.8% overvalued, with the majority of the average caused by Vancouver and Calgary - they did not say that there will definitely be a drop in price, but that houses are overvalued. However, perception can and often does become reality, and then they will not be overvalued - they will be simply at value.

We will not have the same foreclosure issues, at least anywhere near the same extent, as the US, and any drop in price will again be moderated by net immigration to Canada and the fact that people move mainly to the urban areas around the GTA.

You say you have been calling this for 2 years, and yet it has not happened yet. A 10% drop is at least plausible if not probably, but 35% will not be happening.

With that said, I am withdrawing from the conversation yet again (I'm sure you can pull me back in at some point.) I do not mean to continually argue with you, as we each have our opinions, and my offer still stands - if median prices drop by 10% in the next year - if median price drops to $327K in Milton, I owe you a drink.

sorry ol skool but get your facts right, you are incorrect as not all major banks have predicted 10% drop. a slow down yes as we have seen less listings but pricing is still not just holding up but increases as well, Toronto and gta prices are still very attractive on a global scale and pretty well a bargain. Over valued are vague words. as much is tied into employment and wages. Demand is what fuels pricing, Toronto will have its fair amount if immigration over the next 5 to 10 yrs, people need places to live, its actually very simple. i dont understand the basis for your posts as it sounds like your hoping pricing will come down? who would want that? there is no benefit in any scenario. most peoples biggest asset is their house. i know i wouldnt want a steep correction.

We also tend to have the highest numbers of immigrants from countries where living with extended families is normal. This is what keeps prices going up because regardless of how low the wages go, the number of people living in a house can easily contribute to the mortgage regardless of the price. It's not uncommon for new immigrants to buy half million dollar homes through bidding wars just to be in preferred areas and then live with 2-3 generations.