Maybe it’s the warm weather, or maybe it’s because the Hockey team canada are in first place.
Whatever the cause, there’s no denying that the Toronto real estate market has picked up significantly in the last four weeks.
Is this a turn-around? Or is it just a bear market rally?
Seriously though, what are the olympic hockey games doing in first place? Has the whole world gone topsy-turvey?
Here is the definition of a “Bear Market Rally” according to one source:
“An increase in prices during a primary trend bear market is called a bear market rally. A bear market rally is sometimes defined as an increase of 10% – 20%. Bear market rallies typically begin suddenly and are often short lived. A notable bear market rally occurred in the Dow Jones Index after the 1929 stock market crash leading down to the market bottom in 1932…”
Now keep in mind that this information on bear market rallies is with respect to the stock market, and not to real estate.
But they’re both markets, right?
Real estate and the stock market are not one and the same, but they’re similar, no?
As has been well documented by just about any informational source in existence, the world economy began to tank in the Fall of 2008, and nobody and nothing was immune.
The Toronto real estate market seemed to have “peaked” around this time last year, although some say the peak actually took place in the Fall of 2007.
September, October, November, and December were very lean months in the Toronto real estate market, and January and February seemed to be the depth of despair.
But as we move into April, things have completely turned around.
And I ask this question: Have we turned a corner? Or is this just a bear market rally?
Take a look at the graph , and everything I’m talking about will become more clear.
This graph shows a long-term down-trend, with a bear market rally taking place in between.
All markets fluctuate, but the real estate cycle is much, much longer than that of the financial markets.
So is the recent boom in Toronto’s real estate market a sign that “the worst is over,” or is this just Spring Fever and the market will continue to slide?
In January of this year, purchased a house up in the Agincourt or Markham area for $710,000. lets assume The house is simply spectacular, and since it was built and occupied by a developer, the quality of construction is unparallelled when you compare it to other houses on the street.
To say that this house was taking unusually long to sell would be an understatement. It had been listed twice previously, and was gathering dust on the market after almost four months.
I’m convinced that if this house was listed for sale tomorrow at $749,000, it would sell quickly and for close to that price.
and investor bought this house when the market was at its slowest. And I say “slowest” because I can’t claim that this was a market bottom; I simply don’t know that to be true.
Fast forward three months, and there are far more active buyers out there meaning that properties are moving quickly!
On last wk , a colleague of mine received three offers on his Markham townhouse. The property sold for over-asking.
Also on , another realtor was in multiple offers on a condo with her first-time-buyer client. There can be two offers, and while the property didn’t sell for over-asking, agents’ client wasn’t even in the game offering $315,000 for a $324,900 property. Not with two offers on the table.
Sure, there are isolated incidents that I have picked to prove my point, but if you look back at January & February, you’d be hard-pressed to find a not too many property in Toronto that garnered multiple offers.
Properties – Are – Selling. Period.
They are selling quickly, and frequently.
And our clients who say “I don’t have time tonight,” or “Let’s wait until the weekend,” are often being left quite dissapointed when a property sells in one day and they never had a chance to view it.
There is no denying that prices are down significantly from the real estate peak, but the prices have increased since January as has the volume of sales in our city.
So what do we make of this?
Well, I don’t have a crystal ball, and I will be the very first person to tell my clients or a blind lady playing the violin in the subway, “I have no idea where the market is headed.”
I’m not going to be a Brad Lamb and make a ridiculous, cue-ball-headed claim such as “The next real estate boom in Toronto will take place in the Fall of 2010 and last for 3-4 years.”
That’s just stupid.
After a seven-year boom, and a five month drop, how can we be in store for seven months of stagnant sales followed by another 3-4 year boom?
I don’t foresee a real estate boom, but I wouldn’t be surprised to see a period of moderate growth (ie. 1-2%) for the remainder of 2010.
Or, perhaps April to June of 2010 will be viewed historically as a bear market rally as the world economy implodes and Toronto real estate prices plummet 25% in the next 2-3 years. and dont forget HST and tightning Mortgage rules
I don’t have a crystal ball.
But in the meantime, I’m working with more buyers than I ever have in the past years and we’re all watching as hot properties hit the market and sell in a day or a week.see my web site www.vijaygandhi.com
We can’t worry ourselves into a tizzy about whether or not we’ve reached the market bottom. There’s simply nothing we can do but wait for it to play itself out.
And with weather like this, who has time to worry?
Oh, and did I mention the Olympic Hockey Team Canada are in first place??
When people ask Vijay Gandhi what he does for a living, he replies, “I help individuals build their future and create their legacy by investing in real estate.” Vijay can not think of a better way to spend his day! There is no greater joy to him than when he sees a satisfied and excited client to start a grand new chapter in their life.
It’s no wonder that Vijay Gandhi is now considered a Top Expert in his area. As you could imagine, his clients are extremely grateful and are very satisfied!
Click here to visit http://www.vijaygandhi.com a excellent Real Estate resource!
Wishing you the best house hunt ….
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