Taking the temperature of the Toronto market

It's April -- baseball has started, the Maple Leafs are golfing, and (traditionally) "for sale" signs should be sprouting. In an article in yesterday's Globe Real Estate section , available at http://preview.tinyurl.com/4xs76j, there were some interesting points made.

A CIBC World Markets economist said that for the first time in 7 or 8 years, it looks like it will be a balanced market between buyers and sellers. He anticipates a market where buyers will be able to take their time, have a house inspection done, and be able to avoid bidding wars. His prediction is that prices will rise, but at the general inflation rate of about 2 per cent.

Since I'm not planning on selling my house this year, I think this is good news for the home market. We've aways seen articles about more than a dozen competing offers on the "must-have" house in the hot neighbourhood. (There was a good example in last month's Toronto Life.) Being able to sit down ahead of time and figure out what you can afford, and then know that the list price for the house is not likely to be the starting point.

So, is this the time to buy? If you were considering a purchase, I see no reason to change your mind. And if you've been considering the possibility, why not check the open houses that will be coming soon to a subdivision near you.

And keep an eye on new listings in the areas you are considering. In the Globe article, an agent said that the problem is "there's not much inventory, but what there is, is selling."

And if you are interested in checking out the market, but aren't sure what kind of mortgage you'd qualify for (or, indeed, would be best for you) get in touch with me.

Happy home hunting

U.S. mortgage brokers fight back against proposals (National Post, 10 Apr 2008, Page P14)

I saw this article in today's National Post (it's probably in other papers as well, but that's the paper I have electronic access to). While I agree that there were cases of people getting the wrong mortgages, there is no indication in the article that there is a reason for the increased "yield-spread premiums."

People with 'bruised' credit are harder to place, and the lenders offer a higher finder's fee to the broker for placing these clients. An unintended consequence of such a change, I would think, is that it would be harder to get credit for these people. Shouldn't we be encouraging people to build home equity and re-establish their credit. (In Canada, anyway, people in this predicament would be required to put some of their own money down.)

---

U.S. mortgage brokers fight back against proposals
BY RUTH MANTELL Dow Jones
National Post
10 Apr 2008

NEW YORK • Plenty of parties share blame for the housing crisis, but one of the most maligned groups has been mortgage brokers, who critics claim pushed thousands of homeowners into expensive mortgages they should have never been given. New rules from...read more...

Related:
Washington shares blame for Bear Stearns collapse
Washington shares blame for Bear Stearns collapse
U.S. OVERHAUL COULD TAKE YEARS Overhaul would give U.S. Fed more power

Tech Tags: National Post newspaper Fp Property

What some people will say!

I was doing a cursory glance through my email on my Treo this morning to see if there was anything urgent to attend to, when I was surprised by a comment that "everyone is saying that real estate is about to take a major plunge downwards." (Of course, a few paragraphs earlier the writer had started a thought by saying "Don't you just wonder sometimes where people get their ideas?" Don't you just love irony?!?)

I sent a reply pointing out that, actually, not everyone is saying that, and linked to a CMHC publication last month that the Canadian market is moving to a balanced market from a sellers' market. (Not ideal for buyers, but better.) But the bigger point is that it is dangerous to listen to "everyone thinks" or "didn't you know..." type thinking. There is an article on this point in the April issue of my newsletter. If you would like a copy, let me know (no charge, no obligation; available in hard or soft copy).

All in the family

While I am collecting some information for a new posting on the variable mortgage outlook here in the GTA, I came across a posting on Slate that called out to be linked to. If you've wondered how companies were trying to dig themselves out from under in the U.S. mortgage crisis, take a look at http://www.slate.com/id/2188248/

It's a wonder they aren't the real estate agent as well.