HawthorneVillager.com

March stats are out... 2nd highest record in sales...

http://www.torontorealestateboard.com/c ... mw1103.pdf

I guess the bubble isn't bursting this spring.. maybe next year... right?

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So sales in March 2011 were lower than March 2010 by 11%.
How are lower sales better? I guess depends on how you interpret things.
Maybe next year will be the third highest March on record.
With the elemination of 35yr amortization I thought the sales numbers would actually be a lot higher for March 2011.

March 2010 was insane. March 2011 was the second highest ON RECORD. That means it was better than any other March since they started recording history. That means better than 2009, 2008, 2007, 2006 etc.

Reality is, if you sat out last year hoping this spring would be the pop -- the price of the house you wanted went up more.

There is no denying, real estate goes up and it goes down. It will go down -- but what happens if it doesn't go down for 10 more years? What happens if it goes up by another 25%, then drops by 30% meaning you are still going to pay more when it bursts than you would have paid last year - except you sat out for 10 years.

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Yes, March 2010 was insane. People were spooked about the looming HST.
This year it was the amortization reduction from 35yrs to 30yrs.
So, I hope things are stabilizing more.
If next year is the 3rd highest March on record is that a good thing if sales keep slipping?
I am not a math genius but won't the sale of fewer entry level homes skew the numbers higher?
I always thought it was the first time home buyers that fueled the real estate market.
If someone does have more insight into this I'd like to know.

I'm patiently waiting for this drop so I can upgrade!

many have sat on the sidelines and waited for 5+ years, and unfortunately homes that were within their reach then are no longer.

so best case scenerio is that even if there is a correction (which I do not believe will be drastic in any way), it will only bring prices back to what they were a couple of years ago not 5+ years ago.


so even with the correction they are still paying more then they would have if they purchased when they originally wanted to.

I was in a position to buy since 2006. By that time, prices had already jumped and I was doing the MLS searches daily looking for newer detached properties within range of my workplace under $300k. There weren't many available at that time.

As each year went on, the 300k turned into 310k, 320k, etc. until by 2010 I was unable to find anything under 400k (actually closer to 440k).

I ended up buying in a new area with quite a commute (well for me it's about the same as living in Milton) but it was well under the going prices anywhere else and works for me (I'm a bit paranoid about debt so I couldn't justify spending 400k). It's now 2011, the house I purchased will be ready in about 2 more months -- it's gone up over $50,000 since I signed on the dotted line last year and comparable houses in the area are selling in under a week at $70,000 to $80,000 more than I paid.

If I didn't sign on the dotted line last year, I'd still be sitting out now.. because I wouldn't pay the price it's going for now and be able to sleep at night.

So the reality is.. It would take a over a 20% correction to even bring it back down to what I paid in 2010. It would take 40-45% to wipe out the increases and my down payment (leaving me under water so to speak).

This could happen. No doubt. But it could not happen. I'm not getting younger, I could sit out for another year and have a crash, then score the house at way less... or I could sit out another 10 years.. not see any significant crash and guarantee myself to never be able to purchase... or it could crash in 10 years, the price could end up slightly lower than I paid last year.. but I would have been paying rent for 10 years instead of paying down 70% of the mortgage.

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True, I can agree with that. I am below 3:1 on our house and I wouldn't consider moving much higher than that ratio. If I had to, I would downsize.. from detached to semi... if still not in that ratio... from semi to town... and finally down to a condo. If I couldn't afford a condo at 3:1 (think Downtown Toronto/Vancouver), I'd rent or move further away.

I think we can both agree that a 440 sq/ft condo downtown isn't worth $430,000 + $30,000 parking - no matter what the location is.

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Here's the deal my friends......and if I was you I'd listen up because I all but guarantee I'm the richest mofo who's ever posted on this board.

In the short term markets, being real estate, pork bellies, oil, stocks, bonds, currencies, whatever trade on sentiment. Psychology, emotion, short term supply/demand pictures etc.

Over the long term markets trade off of fundamentals. The "fundamental" value of real estate is roughly 3.5 x earnings or a price/growth rate of roughly inflation + a couple percent. Eventually prices will revert back to those fundamentals one way or the other. It could be a quick, violent decline in the area of 25% as a result of a sudden jump in interest rates. The more than likely scenario is one in which rates rise, we get a 10-15% pullback and then prices go sideways or down small for 5+ years to bring the market back into line with the long term "fundamental" value of real estate.

I'm not a doomer, just a student of history and economics. The problem with predicting any of this is timing. Markets can remain "irrational", diverge from their fundamentals for long periods of time. I've been relatively bearish on real estate for a few years and have obviously been wrong, but sooner or later prices will trade back to there long-term fundamental averages one way or the other.

Beware of anybody who claims to be able to predict the future. In my career the smartest guys I've worked with in this business are quick to admit they don't know what the short term holds.

A few comments on frequent posters to this topic:

Bremer - is one smart dude, you should follow his advice.
Ol Skool - bright guy, but his belief in himself about predicting what will happen is laughable. Following Ol Skools advice during the depths of the finanacial crisis would have lost you a fortune. I wonder aloud how anybody who has any kind of professional occupation has the time or energy to make daily posts on here arguing with people who have no clue.

That is all...........

Any guy that starts off a post that we should all listen because hes the richest on this board if just a f@@###@ckin idiot! i wouldnt have you advise me on how to use an a.t.m. didnt even bother reading your other rant.

Just stating a fact F....no need to be such and angry douchebag

Not angry at all. just stating a fact as well, funny as some of my clients are bay street guys. none live in Milton. A douchebag is a guy making claims of his imaginary riches.

Why even reply to him? If he was so rich he wouldn't be on this board in the first place.
Just another pretentious baystreet douchebag - nothing new here.

yeah your right,

Dabills/DTC, you seem very passionate on this topic and both have very good points in this thread, so curious to get your thougths, others ofcourse welcome.

Recently purchased a builder home in milton (due to close summer 2012).
Like to expect to sell current home next year for approx current year value (not 10% less, and not expecting any higher).

I know no one can truly predict where the market will be next year, but would like to get your thoughts on what you would do in this situation.

1. sell next year and prepare to accept value (up/down)
2. sell now and rent for a year (uproot family 2x)
3. other options?

Also will ask you to factor in todays BOC decision to mantain rates and last years 3 (.25%) increases impact on the market.