Buyer Confusion in Today's GTA Real Estate Market

How can today's Real Estate Buyers not be confused! The Globe and Mail's "Report on Business", of Aug. 26th, 2010, features an article by Sunny Freeman entitled "Home Sales drop 25% as prices climb". Read the heading alone, you will be gripped by fear--fear that if you're buying in today's real estate market you'll be sorry. But if you go on to actually read the article, you'll find the Canadian home prices are still on the rise even as sales fall and demand peters out.

Home sales fell by 25% since the peak at the beginning of the year, when there was very little real estate inventory , and more buyers than properties to buy. As more homes became available, and mortgage requirements became tighter, the "multiple offers" scenario decreased. But, according to a study by the Conference Board of Canada, Canadian home prices are still on the rise, a trend that is likely to continue, said conference board associate director, Michael Burt.

According to Michael Burt, "most of the costs associated with home ownership, such as mortgage costs and insurance, are outstripping inflation and income growth". "As a result, housing affordability in Canada, which has been deteriorating over the past decade, will continue to decline during the next two years."

Sales in the GTA for July were down 30% from 2009, but prices were essentially flat. As more resale houses come onto the market and fewer buyers compete for homes, the GTA housing market is at a "crossroads", between a balanced market and one that favours buyers. Some economists predict that the real estate market could move further toward a buyers market, which could lead to a deceleration of price increases, or a price drop.

Seasonally-adjusted homes sales in the GTA fell 8.2% in June from the previous month, and shrunk 19.7% compared to June of 2009, according to the Canadian Real Estate Association. However, the average Canadian home price sat at $342,662 compared to $326,689 in 2009. Real Estate sales activity this year is up 5.6%, compared to the first seven months of 2009.

Confused! Who wouldn't be! The best advice that I could give anyone wanting to buy a home or condo in the GTA is , if you're working and can afford home ownership, go for it! No one really knows what's ahead for us--no one economist, no one realtor, and certainly not the media. If you compare home ownership with any other investment that you can make in today's GTA marketplace, real estate has traditionally out performed them all. And besides, instead of paying your landlord's mortgage, you will be paying your own and have a HOME to show for it.

If you are considering home ownership is today's GTA marketplace, and would like the consultation of a REAL ESTATE PROFESSIONAL, feel free to contact Gitta Levi directly at 416-587-8222, or email gitta@gittalevi.com.