A POSITIVE PERSPECTIVE TO REAL ESTATE DOWNTURN IN REPORT
This article appeared in the Toronto Star on Saturday, December 6th, 2008 and was reported by Michael Moldenhauer. It just brings some positive information from a third party. Agree with it/disagree with it, it's just some better news after the doom and gloom that we have been hearing. You will be seeing this article posted by many in the real estate business.
There's actually some good news out there, although you'd never know it most days. For example, the "Real Estate Trends" report recently released by the Scotiabank Group was remarkably positive once you got past the first line. As I have said in a previous blog, don't just read the first line and the last line. Get into the middle of an article and sometimes there is good news.
The opening line of the Global Economic Research report by Adrienne Warren of Scotia Economics bluntly declared that "Canada's longest housing boom of the postwar period has come to an end."
We all know that, but the balance of the report put that opening statement into some healthy perspective, something that has been sorely lacking in most recent media reports on the state of the housing market.
"We argue against taking an overly alarmist view to domestic housing prospects," says Warren. "This is not a U.S.-style bust caused by overbuilding, speculative buying and imprudent lending, but rather a cyclical slow-down accompanied by a valuation adjustment in several large centres (out West) where booming demand conditions and temporary supply constraints led to an over-shooting in prices."
Driving home the U.S. comparison, Warren writes that "Canada's mortgage market is significantly different than its U.S. counterpart, with a much smaller sub prime exposure, less interest rate reset risk, lower use of home equity withdrawal and investor mortgages and more conservative lending criteria.
"Canadian households are far less leveraged than those in the U.S., and less exposed to any erosion in underlying asset values, "Warren continues. "Record unsold housing inventories, mounting foreclosures, overbuilding and credit constraints are bigger factors behind the continuing and steep slide in U.S. home prices than overvaluation, none of which are major concerns in Canada."
"With builders in most jurisdictions beginning to slow the pace of new construction, and with a low risk of widespread foreclosures, the Canadian market does not fact the massive inventory glut underlying record-setting U.S. price declines."
Canada's housing market is the "least overvalued". There will be a correction in national average prices. This adjustment will occur in the 3 western province, and will leave intact most of the significant price appreciation of recent years. This speaks to the reason that it's always a good time to buy if you are buying for the right reasons, namely shelter and long-term financial security.
There never is pressure to purchase property, and if you are ready then call me and let's talk. I could cover all your questions. Even if you think that you would like to wait, that's okay too. Someone asked me, "When is it a good time to sell or buy property?" My answer to that is, when you are ready. Because of our diversity of nationalities in Mississauga, Oakville, and Burlington, buyers buy and sellers sell throughout the year. Holiday festivities keep us busy, therefore anyone looking to buy this time of year are actually interested. A house MUST be priced correctly in accordance to what the market is telling us. I have said it before, and I think it bears repeating -- we have come back to a normal market. The gold rush is over for the time being.
Contact Betty Bartusevicius to discuss the above article or to chat about real estate and how I can help at 905 828 3434 or directly at 416 427 1875
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