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.
Have a super summer 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
