October Sales Confirm Slowing Real Estate Market

Real Estate Agent with Re/Max Realty Specialists

Now Is That Good or Bad?

As anticipated in the present financial atmosphere, home buyers last month across the GTA reacted to the negative climate with reluctance to support previous home prices.  The number of sales in October was down one third from 2007 and prices across the Toronto area were an average of 10% below October 2007.  The Toronto Real Estate Board reported a greater drop in the city of Toronto that in the suburban area... 13% vs. 8%.  Perhaps the new Toronto city land transfer tax had something to do with that?


Avg Prie for Toronto 2002 - 2008 


While we are prone to label such a market "bad", that moniker may not be as deserved as you think. It depends on your viewpoint.  Houses may not continue to sell at the same inflated price levels... and at the same pace... as they may have earlier this year, but that is not all bad. A more relaxed market takes a lot of stress out of the process and gives buyers the luxury of seeing a home they like one day... sleeping on their decision... and still having the opportunity to buy it the next day... without the likelihood of being involved in multiple offers.  While sellers may have to accept less... they'll love it when they in turn are on the buying end.  Those who have sufficient equity may also find the opportunity they have been waiting for to move up to the dream home that was previously out of reach.  Here is an example...

Assume for a moment that real estate prices in a given area have dropped 10%.  A home selling previously for $400,000 may now go for $360,000... a drop of $40,000.  On the other hand, the owners may have had their eyes on a home in the $500,000 range but couldn't see their way clear to spend the extra $100,000.  After a reduction of 10% that home is now just $450,000.  The new difference of only $90,000 may be comfortably within the reach of our buyers.  Of course, a drop in excess of 10% would only bring the prices closer... and as we have always known when trading automobiles, it is the difference that counts.

Closing costs calculated on a percentage basis, such as real estate fees, would also be significantly lower... as would land transfer taxes.

If you have thought of moving up for awhile, there may be no time like the present to make your move.



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