Some of my colleagues may not want to believe it, but we are now in a new market reality. The extremely bullish market we have been experiencing for the past 12 months, at times accelerating at a break neck pace, has ended. Top-10 anecdotal signs that the market has already peaked:
- ‘Fake’ developer websites for new developments are at an all-time high. These are websites set up by Realtors looking to capture buyers when a new development launches. Many of these sites are designed to mimic the developer’s official websites / registration forms. We saw this trend emerge right before the market dipped in mid 2008.
- Developers are starting to LOWER their commission offerings to agents. Lower commissions can only mean one thing: Developers believe it’s too easy to sell condos in Toronto right now.
- Positive cash-flow is now a complete impossibility at just about every new development or resale condo downtown. Investors with a traditional investment mindset are heading for other markets.
- One Bloor has about 700 units to sell, and the minimum up front investment is $100K. Demanding so much cash up front from buyers means the banks are restricting the cash flow to developers.
- Developers have been practically encouraging ‘flippers’ by offering $0 assignments during the first 90 days of buying into a new development.
- Resale sellers are holding off on offers, not getting an offers, then raising their asking prices in response. Buyers are moving on to other properties.
- Listings for the GTA are up 48% for the first half of April compared to this time last year.
- Listings are at an all time high for my company – Re/Max Condos Plus – one of the biggest players in the downtown condo market.
- Interest rates have risen almost a full 1% over the past few months and (most likely) will continue to rise.
- Government + the banking industry appear to be consorting to stifle demand for fear of creating a housing bubble.
Questions? Comments? Got your own anecdotes or stats to add to this list? Think I’ve totally lost my mind? Contact me.
04.26.10 at 6:45 pm
Roy Bhandari
Bang on the money – I think the peak has already been and gone. Working in the market, I’m seeing offer dates come and go – whereas a month ago they would have sold in a heartbeat. I’m showing more condo’s at a time with more inventory.
I think there will be one last rush around July-August when the pre-approval for the low rates will be expiring and then we’re in for an interesting summer/fall as the market balances out.
End of the day, it’s all supply and demand – before we had too much demand and not enough supply – it’s just evening out as our supply increases.
05.01.10 at 1:08 pm
Peter
The housing and condo markets are set to crash and crash hard. Condo sales have frozen and prices are starting to fall with inventory going through the roof. I know of three flippers trying to sell their condo with no luck. Looks like they will take a bath .