Toronto Loft Conversions

Toronto Loft Conversions

I know classic brick and beam lofts! From warehouses to factories to churches, Laurin will help you find your perfect new loft.

Modern Toronto Lofts

Modern Toronto Lofts

Not just converted lofts, I can help you find the latest cool and modern space. There are tons of new urban spaces across the city.

Unique Toronto Homes

Unique Toronto Homes

More than just lofts, I can also help you find that perfect house. From the latest architectural marvel to a piece of our Victorian past, the best and most creative spaces abound.

Condos in Toronto

Condos in Toronto

I started off selling mainly condos, helping first time buyers get a foothold in the Toronto real estate market. Now working with investors and helping empty nesters find that perfect luxury suite.

Toronto Real Estate

Toronto Real Estate

For all of your Toronto real estate needs, contact Laurin. I am dedicated to helping you find that perfect and unique new home to call your own.

 

Tag Archives: market meltdown

Consumers turned around the housing market

Garry Marr – Financial Post

With time winding down to get in on some of the best mortgage rates in Canadian history, consumers pulled the trigger on purchases and in the process seemed to have turned around the housing market.

Comment: I do wonder if that is behind the crazy high jumps in housing sales we have seen the past few months.

The Ottawa-based Canadian Real Estate Association, which represents about 100 boards across the country, has once again upped its forecast for sales in 2013, citing low interest rates and a strong economy.

“Sales after a slow start of the year have improved more than we had projected,” said Gregory Klump, chief economist with the group. “The increase in the discounted mortgage rate has moved forward activity that would have taken place later in the year.”

Comment: Not sure if the increase in discounted mortgage rates pulled sales forward as much as the threat of rising rates. Rates went up 0.6% for the first time in a while. People with 120-day rate guarantees are seeing those 2.xx% rates expiring right around now. If sales drop for the the last 3 months of the year, we know that was the root cause of the massive upswing. If sales continue to rise, then there is something else at play.

Many consumers pre-approved for mortgages had their rates on 90-day to 120-day holds with the option to buy now or face an interest rate that could have jumped as much one as percentage point.

August sales numbers seem to reflect the trend as they rose 2.7% from July on a seasonally adjusted basis. On a year over year basis, sales were up 11.1% in August.

Comment: With Toronto sales up 30% last month! That is nuts!

CREA is now saying that sales for 2013 will reach 449,900 just 1% below 2012 and a far cry from the market meltdown many had predicted for Canadian housing. By 2014, the group is predicting homes sales will actually climb 3.5%.

Comment: I bet we see a positive difference by the end of the year. And next year… and the year after that.

Mr. Klump said pre-approval mortgages have largely run their course for 2013 so CREA’s new estimate also takes into account a slowdown in the market for the rest of this year.

“The downturn?” the economist said, with a laugh. “Wasn’t that the crash? We’ve avoided that and that in no small part points to the success of Finance Minister Jim Flaherty having tightened regulations to stop a bubble from forming.”

Comment: What downturn? July 2012 to June 2013? Those were fake numbers generate by comparing dissimilar data. Same as the extra-high 2013 numbers are artificially inflated. Compare 2013 to 2011 for a more accurate assessment.

The market seems to have adjusted to the changes imposed by Mr. Flaherty, the most notable being a limit on amortization lengths. They’ve been shortened to 25 years after being as high as 40 years for government-backed insured mortgages.

Bank of Montreal Chief economist Doug Porter says sales are now close to their 10-year average, even with the comeback we’ve seen.

“Sales are not running away. They definitely bare watching but they are not in a situation yet where the government needs to step in and take action,” said Mr. Porter.

He says the state of the market will probably be better assessed by October, adding a rising rate environment has just taken a little bit of steam out of the market. “I don’t think it has killed the market,” said Mr. Porter.

Comment: Well duh! Just look at the numbers.

CREA expects it will slow down price increases and now predicts the average price of a home across Canada will reach $376,300 this year, a 3.6% increase from 2012. In 2014, prices are forecast to inch up another 1.7%.

Comment: But still rising both years.

“I think the real story is sales will be flat for the year and nobody predicted that at the beginning of the year, they were heading down for the count,” said Mr. Porter.

Comment: I did. I said they would rise. And mark my words, they will still be up by the end of the year, even if it is only 1%.

Interest rates have been key, and while the fear is they will be rising fast, by historical standards they remain relatively low.

Comment: And after that 0.6% bump in the summer, there has been no other movement. This stupidity in the US will only serve to push down stock markets, interest rates and mortgages. Thank John Boehner for continuing low mortgage rates.

“The five-year fixed rate [mortgage] has gone up 30%,” since April,” said Kelvin Mangaroo, president of RateSupermarket.ca. “The five-year bond yields, which are related, have gone up almost 90% since April. There has been a huge run up, so there is room for [mortgage rates] to increase.”

But to keep it all in perspective, his website still has an advertised five-year fixed rate closed mortgage of 3.14%. It’s just that same term that was as low as 2.62% at one point during this cycle.

“We are still relatively low looking at long-term average for rates,” said Mr. Mangaroo.

—————————————————————————————————–
Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto Realtor with Century 21 Regal Realty. He did not
write these articles, he just reproduces them here for people who are
interested in Toronto real estate. He does not work for any builders.

—————————————————————————————————–