How Will the Financial Meltdown Affect the Toronto Housing Market?

Yesterday I was having a conversation with some clients who were discussing the impact that the recent financial tsunami might have on the Toronto real estate market. Before the Wall Street crisis, our market had already begun to slow down. 

How did we get here? An abnormally low inventory of homes for sale, along with the lowest mortgage rates in years was the main fuel for the last boom in home sales in Toronto. Today the number of homes listed for sale has gone up across the board and mortgage money is becoming tighter as lenders become cautious not to see a repeat of the U.S. experience. 

These most recent developments in the financial market can only contribute to a further decline in both the number of homes sold and the average price. Toronto is not a real estate island, immune to the current global financial storms. What happens on Wall Street is bound to affect us here too. 

Essentially, we have gone from a sellers’ market to a buyers’ market. Listings have gone up and home sales have declined. In Toronto, the most affected neighbourhoods are mostly in the suburbs. So far, some areas in Central Toronto have been able to buck the trend, with some actually recording average price increases, despite higher home inventories and fewer home sales. A confusing situation, no doubt!

Where do we go from here? From now on we need to keep a close eye on how this financial turmoil will impact our housing market. Homes are not stocks or mutual funds. We invest in them for shelter, security and comfort. No matter what the financial markets do, most of us will keep on investing our hard-earned dollars in home ownership.

However, what we must accept is that it’s no longer business as usual.

This message is especially directed to home sellers. The real estate future looks uncertain for now. If you are seriously motivated to sell, be aware that you have more competition from other sellers. There are fewer buyers and the mortgage institutions are tightening their lending guidelines.

Stay tuned!  

Have a question? 
Simply send me an email, or call me: Rosalin Smith-Carr, at my direct line (416) 482-8330 ext. 3519 
I will be glad to answer all your Toronto housing related questions or concerns.

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Why Retiring Baby Boomers Hold The Key to The Future of Housing Prices in Canada

Let’s face it, with the world’s financial markets in free-fall one day and soaring the next, and the impact of the largely American sub-prime meltdown on the Canadian real estate market still uncertain, it’s not surprising that many current and aspiring homeowners have decided to wait out the turmoil.

But there are other factors that will also have a major effect on the future of home values for Canadians. These include the gyrating price of oil, the performance of the U.S. economy, and potential military conflict with Iran.

All of this makes the timing of your decision to sell more complex than perhaps at any other time in history.

And now you can add to this confusion yet another looming crisis, the end of the “generational housing bubble”.

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More Homes for Sale and Fewer Buyers – The New Challenge for Home Sellers

True, you may be kicking yourself for not selling your home last year when the market was hot and sellers had the advantage. But selling in a buyers’ market need not be a traumatic experience.

Just keep in mind that with more homes on the market and fewer buyers, impulse buying is virtually non-existent, so home buyers again need to be “wowed”.

Once again though, this dramatic shift in the real estate market shouldn’t worry you. The key is to anticipate what to expect, and prepare accordingly.

First and foremost — you need to “Stand Out From the Crowd.”

Your home MUST appear impeccable. When buyers set out to look at homes, they take all their dreams and images of the perfect home with them. The closer your home matches those images, the more likely the buyers will reward you with a great offer to purchase.

Secondly — you’ll need powerful marketing that emphasizes online advertising.

Recent surveys show that women – responsible for 80 percent of all household purchasing decisions – are abandoning newspapers and embracing the internet for their home search, and are “using newspapers to line the canary cage.”

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Top Seven Most Offensive Home Buyer Turn Offs and How to Avoid Them

Toronto’s housing market has made a 180-degree turn from a sellers’ to a buyers’ market. That means that buyers are now in the driver’s seat.  

What worked in the buying frenzy pre-2008, won’t work now. This is especially true for you as a home seller. In order to attract buyers, you not only need to make your home stand out from the competition, but you also have to avoid turning off buyers.  

The seven biggest buyer turn-offs:

Overstuffing. Having too much furniture, trinkets and mementos on display. Put most of them in storage. Buyers want to see your house, not your stuff!

Pet distractions. Some people are terrified of dogs (or even cats). So don’t turn off potential buyers by keeping Fido and Fluffy around during showings. Dog and cat odours are likewise a major turn-off, not to mention serious allergies that some buyers may have to them.

The jungle front or back gardens. The message you send to buyers is that the rest of your house is probably neglected too. No curb appeal means lower offers from buyers.

Bad paint or wallpaper choices. If your wall colours are anything but neutral, consider having them redone before starting your showings. Nothing turns a buyer off faster than seeing a colour or pattern which they consider to be “hideous”, splashed all over the walls.

The dirty bathroom. Anything less than a spic ‘n’ span washroom is unacceptable. Even a water stain in the sink can bring out the “ewww” response in buyers.

The mildewy basement. The first stop for many buyers is the basement – will yours pass the sniff test? What buyers DON’T want to smell is mold or mildew. If your basement has even a borderline odour, invest in a de-humidifier.

The overly ambitious asking price. In a buyers’ market, this alone will be enough to stop people from even looking at your home. Statistics show that the percentage of potential buyers will increase as much as seventy-five percent for every $20,000 to $40,000 you adjust your asking price, depending on the price range of homes in your neighbourhood.  

Read Other Related Articles: 
Single Biggest Mistake Home Sellers Make in a Buyers Market
 
How to Get the Most for Your Home in a Slowing Toronto Real Estate Market – Part One 

How to Get the Most for Your Home in a Slowing Toronto Real Estate Market – Part Two 

How to Get the Most for Your Home in a Slowing Toronto Real Estate Market – Part Three 

Unsure as to what to do in this market? Simply send me an email, or call me Rosalin Smith-Carr, at my direct line (416) 482-8330 ext. 3519

Buyer Sues Real Estate Agent Because She Overpaid for Her Home

I overheard the following conversation between two agents at my office a few days ago: “Did you hear about the buyer in the States who is suing her agent because she claims she paid too much for her house?” To which the other colleague replied: “If this ever reaches Toronto, half the real estate agents will be in court!” 

It was only a matter of time before something like this would happen. Fortunately for all concerned, home prices in Toronto are holding their own, so we are not likely to see a train wreck here like we are seeing with our neighbours to the south. 

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Single Biggest Mistake Home Sellers Make in a Buyers Market

Your mother probably warned you to stay out of the sun or you might get burned due to overexposure. Well, I’m here to warn you that overexposing your home to the market could burn you too.

When I show a home, the firt two questions the buyers will invariably have are, number one - what is the asking price, and two -how long has it been on the market.

Then they get around to asking the bricks-and-mortar type questions; how old is the roof, the furnace, is there any knob and tube wiring?

The reason for asking how long a home has been on the market is, buyers want to assess if there might be something wrong with this house that has made other buyers shy away from it.  

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Leaside Homes for Sale and Average Price – September 2008

Home sales in Leaside comparing August 2007 with August 2008 using total homes sold, average sale price and days on the market.

It is important to point out that these one month statics do not necessarily reflect a market trend. To keep abreast of home sales in Leaside visit our site frequently.

For more information on any of these homes, call me at 416-482-8330 ext.3519 or send me an email,

Why Toronto Housing Prices Are at Risk

History does repeat itself. The question is … do we heed any of its lessons?

For those of us who have been selling real estate in Toronto for more than two decades, the unfolding chain of events we are beginning to see in the financial sector and in the car industry is like watching a movie re-run. In my real estate career I have experienced more than a handful of booms, busts, slowdowns and recessions.

Some of those times were very difficult, personally and for my clients. Twenty four per cent interest rate mortgages, a briefcase full of clients’ houses for sale, and not in a buyer in sight, have made me a better real estate agent.

Recently when the buying frenzy began to slow down, some real estate agents began to look in the rear view mirror for signs of reassurance. They wondered whether the market had stopped for good, or was this market shift the result of the cold winter we had just been through.

Today, both home buyers and sellers are also turning their eyes to other industries to see comforting sings that things are still OK. So how are other industries doing these days? Well … as Ronald Reagan would say, things are starting to look a bit scary;

• The financial markets “PANICKED” some headlines this past Friday read.

• The composite index for the S&P/TSX plunged 957 points in less than three days. John Stephenson, senior vice-president and portfolio manager at First Asset Investment Management said “The sentiment has gone from euphoria to panic”, “Right now people want out at any price.”

• The figures for automobile sales are out and the numbers there also are looking very dim. Canadian vehicle sales suffered its worst performance of the year in August as the slump that hit the U.S. market crossed over to Canada. Car sales dropped 7 per cent following big declines at Chrysler Canada Inc., General Motors of Canada Ltd. and Honda Canada Inc.
• Employment growth is slow “and people are getting a bit more worried that [the economy] is going to slow down,” noted Dina Cover, a Toronto-Dominion Bank economist.

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Lawrence Park Homes for Sale and Average Price – September 2008

It is important to point out that these one month statics do not necessarily reflect a market trend. To keep abreast of home sales in Lawrence Park come back to our site frequently.

The homes shown here are MLS listings by various broker companies, sales representatives and broker members of the Toronto Real Estate Board. For more information on any of these homes, call me at 416-482-8330 ext.3519 or send me an email,