What the hell is going on in the housing market in Toronto?

Here are my observations from the front line:

1. Supply is lower

2. Prices are coming off but they're overall up above 10% year to date. It's just of late in many pockets we've seen a downward movement

3. Homes in certain pockets; Leaside, Forest Hill are still seeing multiple offers and selling above as recent as yesterday. Why? Supply is low and people need to purchase ahead of the school year.

4. The market prices don't look like they're going to show a sizable drop in the near future

5. Interest rates aren't much of a threat. The U.S. is dealing with deflation and Canada is seeing treasury yields fall as people park their money in safe havens. As such banks are reducing their closed mortgage rates....so the rates are still looking great for the next while

6. HST is an issue, but understand it doesn't affect resale home prices. Some periphery services will increase a bit

7. It was presumed that HST would have led to a heightened inflation index. It didn't for the most part.

8. People always need to buy and sell. Households get larger or smaller. People want a certain school district and new condos need occupants. So there is a market. We should see an increase in inventory in September and its important to note that August is tradtionally the slowest month of the year for real estate.

So...hopefully you've enjoyed your summer vacation, saved up your downpayment and are getting excited about the purchase of your new home this fall or winter.

If you have any questions; would like more detailed information on a certain pocket; gain access to listings with no strings attached or are interviewing agent(s)...please contact me anytime.

My best---
www.TheSmithsBuyAHouse.com

Toronto Mortgages in a Buyer Market. Deflation and Rates?

Its looking like there's reason for the B of C to gradually increase the overnight lending rates (short terms). These affect variable rates mortgages indirectly as they're tied to the prime rate. So barring some seriously corrupt news from the US, this would be my guess.

That said, we find ourselves in an environment where fixed rates with the likes of the 5 yr rate going down. Royal Bank just dropped their posted rate.

Why? In short, the US is worried about deflation as oppose to inflation. There's talk of the FEDS injected money back into the economy by way of buying up long terms bonds, thus creating the demand to keep rates low and flushing banks with more money to lend and not hoard.

This money in theory should go to writing mortgages and stimulating the economy. But US households are on a savings kick and unemployment should inch up.]

Put all that together and fixed bonds yields should fall. The more who run into the bonds for safety lessen the yield that needs to be paid. People are happy with low yields these days as long as they're not losing money.

B/c Canada is linked to US the bond market rally continues here and as a result fixed rates are temporarily going down, while prices have certainly gone up year over year, a more balanced market should keep prices flat.

So, once again BUYER's go get preapproved, start looking at homes and for god sakes find a good agent.

visit http://www.TheSmithsBuyAHouse.com

Cheers-