My Real Estate observations and predictions
for our local Mississauga, GTA and Canadian Real Estate
market for 2008
Specifically, if you are thinking of selling and/or buying a
home in the next few months, this article will apply to you.
defined as a website where postings about commentary
or news are shown in reverse chronological order. It's
supposed to be personal writings that compel you to
continue reading the story. All
too often my blog has contained plenty of facts and
information and been short on my personal views, observations
and opinions. Part
of this is due to time constraints, part to the fact
that I am a logical engineer thinker and mostly because
I am not much of a creative writer. So here goes
my shot at wowing you with my words of wisdom.
My current market thoughts
and observations :
- One of the interesting things
I've noticed as I am free falling toward
50 Year Old is that I feel I have
the right to express my opinions more freely
due to my earned right of experience. I
teach a course to other 'newer' agents about
the internet and the importance of having a
presence on the web. I preach that the
web is the place to be and that you must hang
your shingle for all to see, good or bad. Certainly
I've tried to maintain a high profile on the
web by uploading over 1700 pages on my website,
to date. That
does not include my 358 blog posts or so. The
internet will turn out to be one of the greatest
paradigm shifts in the history of mankind, similar
to and possibly greater than the industrial
- After 20 years in
the real estate business and having gone through
the dark recession years for real estate from March
1989 to 1994 you can understand if I'm a little
gun shy when I look at the current state of our
real estate market. We've now experienced
about 12 years of unprecedented growth in the real
estate market. If
you don't believe me, check
out this graph. Old
school business thinking was that economics repeated
itself very predictably in 7 year cycles. Clearly
this is NOT the case in the GTA real estate marketplace
over the past 12 years. (As
an aside: Long
live Garth Turner and his 7 year cycles and boom
and bust predictions and
analysis. He would always go out
on a limb, but one common thread in all of his writings
was to not necessarily follow the herd, invest wisely
and for the long run.
He was always an inspiration to me, good or bad,
he would hang his thoughts on the line at any time.
I miss his articles and predictions. Again,
I digress )
- We've experienced year over
year increases for 12 years in a row with no end in
sight. I wrote this time last year and predicted
a 4-6% increase in prices for 2007 Boy was I ever
wrong! It seems that our prices will increase
over 11% this year! Last year at this time I was
worried that maybe our market was stalling a little
due to increasing interest rates and slowing sales. Again
I was a little too conservative.
- So here we sit in Canada with low
inflation, low unemployment, low interest rates and
a strong economy. The US is faltering due to their
sub-prime lending crisis and looks like it will last
another 8-18 months, at least. November 2008 is
a US election and in all US election years in the past
20 years our market has slowed in the 3 to 4 months
preceding a US election. Canadian dollar all time
highs. So with all these upcoming uncertainties
you would think that I would predict lower increases
or a softening of our marketplace. Nope. I
think our market will continue to hum along due to low
vacancy and rates and more buyers than sellers and continuing
lack of land for new development.
- For 2007 I am happy to report
that I was wrong. I predicted an increase in the
GTA average price of about 3-4% and the actual increase
was about 11% Wow, was I ever wrong on that number,
and many people are quite thrilled about that!
This is what I predicted that
would happen in 2007
- I believe that we
will see a steady and 'normal' market in 2007. We
will not see the huge price increases that we saw
in 2004 and 2005. Prices should increase about
3-4%, a little better than inflation for the year. As
always, if you are thinking of selling, February or
March may be the best months in 2007.
- This is what I predicted in December of
2005 for the real estate market in 2006. I
was just a little lucky!
- It is interesting that many of the experts are predicting
prices to rise only slightly for 2006, but nearly as
not as much as they did in 2005. I would agree
with this line of thinking. The last 4 months
of 2005 showed signs of a more "normal" market. The
market so far in 2006, up to the end of February has
been normal, but nowhere near the sales volume or price
increases that were experienced in early spring of 2005.
- As long as rates stay about where they are we should
see another year with a healthy real estate market for
2006 with modest price increases.
- And sure enough, it appears that 2006 price increases
will be about 5% compared to the nearly 10% we saw in
2005. The real estate boom in Toronto and the
GTA is over, for the time being that is! We will
have another real estate boom in Toronto, it's only
a matter of time.
Historically, our real estate
market in the Mississauga, Brampton and GTA peaks beginning
about the end of the March break and ending about the
end of April. See the historical
seasonal trends here. Given the pent-up demand
in our marketplace, the fact that listing inventories
are down, we could see a shift of the spring market
and our market may be very strong in early 2008. I
can see this happening, so if you are thinking of selling
in the spring, you may be wise to get on the market
earlier rather than later to capitalize on the early
Conclusion that I draw from this and other sources and my predictions for 2008
Mark's Crystal Ball for 2008
This is what I predict for 2008 in real estate, interest rates and more!
- I see that our marketplace in the GTA will see price increases just above inflation, in the range of 4-6%
Update on January 7th, 2009: Still waiting for
2008 figures, but it appears our priced gained
about 5.5% (lucky I guess!)
- I believe that mortgage interest rates will come down in the beginning of the year and stay lower compared to today's rates and not increase again until just before the US election in the fall
Update on January 7th, 2009: mortgage rates
are lower, 2.7% is bank prime and rates are
still looking to drop slightly in 2009
- Rental vacancy rates will decrease, thus rental rates will increase about 7-10% or more this year. A 'typical' 10 year old 3 bedroom townhome in Erin Mills currently rents for about $1400 to $1550 per month and this will increase by at least $100 per month by this time in 2008 This will only continue to make real estate investment properties more desirable and lucrative, it's time to buy another property if you can afford it!
Update on January 7th, 2009: rentals are still
- The condo market will remain a strong part of our marketplace, due to affordability and lifestyle choices
Update on January 7th, 2009: this is still very
- I believe that the US will be just begin to see the light at the end of the tunnel by the end of 2008, their sub-prime mortgage crisis will have peaked and they will be on the road to recovery
Update on January 7th, 2009: there was a
glimmer of hope duirng the holidays, the
markets increased quite substantially during
that period, again, only time will tell,
but there is much hope with Obama being
sworn into office later this month
- A barrel of oil will have reached $120 per barrel sometime in 2008, mostly due to an international crisis and absurd speculation fueled by the pundits and the press
Update on January 7th, 2009: I think the spot
price was much higher, more like $140 but
has now plummeted to just over $50 per barrel.
- Along a similar vein to the last prediction, gasoline prices will peak at $1.20 per litre sometime in 2008 but will be $1.00 by year end.
Update on January 7th, 2009: gasoline was
70.2 cents per litre after dropping to
abou 67 to 68 cents per litre over the
holidays in 2008
- Gold will break $900 (and it does not matter whether it's US$ or CDN$ much anymore!) sometime in 2008 but settle to $735 by end of 2008
Update on January 7th, 2009: gold broke $1000
but is now down to about $825 per ounce, problem
is that the Canadian Dollar is only at about
82 cents, so gold is well over $1000 in terms
of Canadian dollars
- If the experts are now stating that 82% of all buyers begin their real estate search on the internet, I believe that it will be 90% by the end of 2008
Update on January 7th, 2009: no stats yet, but
we are all hearing that about 90% of people
use the internet for their home search.
- Watch out for following the emotions of the marketplace and stick to your long range goals
Update on January 7th, 2009: this has always
been the best method in real estate to
become independently wealthy
- I believe that Mississauga will continue to be one of the top cities in Canada and the world to live in and that people will continue to choose Mississauga as one of their top choices of places to live in the GTA Read about the psychology of ownership. Real estate will always be an excellent investment especially if you get a firm hold on your finances and will continue to be the best long term investments in your future and your children's future that you can make!
Update on January 7th, 2009: this is still true!
So, if you
are thinking of selling and buying a homes this year,
should you buy or sell first? I've
had many clients purchase before they sell. I
just want you to have all the information so you can make
the best decision for yourself and your family. You
may read more about buying
or selling first here
If you would
like to discuss issues like this or other questions you may have, please
email me at anytime .
Read what I predicted last year at this time!
I hope this helps a little to
answer your questions and give you a little insight
into my thoughts on 2008. I will post this on my
blog for others to see. Any comments
from you would be appreciated.
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