Keep Things Simple and Conservative in 2009
“Sales in March increased at a rate over and above what would be expected from the normal spring time bump,” said Jason Mercer, the Toronto Real Estate Board’s analyst. “A greater number of households have taken advantage of increased affordability in the housing marketplace.” The Toronto Star, April 6/09
“In fact, over the past two months, the situation in the housing market has improved.” Said TREB President Maureen O’Neill.
One Toronto Realtor who believes in the value of the real estate investment was recently quoted in the Vancouver Sun: If your job prospects are good, he said, “Relax, take a breath, be smart. If you don’t need that big flat screen TV, don’t buy it. But if you need a place to live, prices are down a bit, mortgage rates are stupidly low. It’s not a bad time [to buy].”
Bill Bobyk, general manager of the Sterling Group of Companies, says there are two basic reasons people should be buying: “Very good” prices and attractive mortgage rates.
Royal LePage Real Estate Services President Phil Soper appeared on Canada A.M. this morning and said the current data shows the hottest housing market to be in St. John’s, where prices for standard two-storey homes rose 15 per cent year over year.
In Ontario and Quebec, Royal LePage said the markets “held steady” with some small gains and declines. But overall, Ontario typically saw “mid to low single digit declines” in its housing prices, their recent survey said.
The survey said that Western provinces saw “significant changes” in real estate prices, with double-digit declines in many areas. Manitoba was the lone major exception to this trend.
The same survey predicted that B.C. and Alberta may be among the first areas in Canada to see pricing gains because those provinces experienced market corrections prior to the brunt of the economic crisis.
“There is a remarkable uptick in March in buying activity…” said Soper.
Still hearing doom and gloom? The most recent gloomy predictions may be based on factual information- but may be being confused by the commercial sector rumblings.
David Henry, president of U.S.-based Kimco Realty Corp., said Tuesday that it’s big commercial real estate that is in for “a very bad year”. “We have a massive wave of debt maturities coming, at least in the U.S.,” Henry said during a panel discussion at the Canadian Imperial Bank of Commerce’s on North American real estate equities annual conference. However, panel members said there is some reason for optimism, in Canada.
Tom Farley, president and chief executive of Brookfield Properties Corp. (TSX:BPO), said deleveraging is a “brutal” problem in the U.S. but isn’t a serious issue in Canada. Farley said that Canada’s real estate fundamentals are stronger than in the U.S., and Brookfield has a 99 per cent occupancy rate in its Canadian properties, which include First Canadian Place in downtown Toronto.
Both Kimco and Cadillac Fairview agreed that their Canadian portfolios are holding up better than any of their other properties.
Everyone involved in real property transactions is being more careful today- this includes Buyers, Sellers, Lenders and Insurers, too.
Chris Gleason, the Managing Director of a California-based real estate opportunity fund has offered this Golden Rule for ’09 :
“There are far too many opportunities out there this year. Don’t even think about taking on unnecessary risk. Even if you only go after the best deals, you’ll have plenty to feast on and you won’t suffer any losses that could have easily been avoided. Make sure that you’re in love with an investment before you make any commitments, and leave the so-so deals for novice investors to pick up. You’ll be much better off for it in the long run.”
And I would add: Even in a Buyer’s Market, nobody buys for the sake of buying. Smart investors look for a property that fits their lifestyle as well as future needs.
reviewed by Moishe Alexander, CFC CEO
http://blog.getrealinontario.com/index.php/2009/04/08/keep_things_simple_and_conservative_in_2009