My Real Estate observations and predictions
for our local Mississauga, GTA and Canadian Real Estate
market for 2009 and 2010
Specifically, if you are thinking of selling and/or buying a
home in the next few months, this article will apply to you.
Blogging is
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 :
Well, now I am past the big 50 and heading to the next one in September 2009 Again, as I 'age' I feel I can express my opinions more. I expressed my thoughts on the current and future real estate market on my blog at this post and did I ever take heat over this one. Even Garth Turner commented that I was wrong, the nerve of him!
After 21 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 13 years of unprecedented growth in the real
estate market and it was due to come to an end. And it did in September of 2008.. 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 bustpredictions 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.
Good old Garth is up to his tricks again and is now predicting that our real estate market is at it's Zenith, sorry, don't believe it.
I wrote this time last year that "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 our prices will increase
over 11% this year! This is about where the prices ended up at the end of 08
As of July 21, 2009, one day after the 40th anniversary of those famous words, "One small step for a man, one giant leap for mankind" here we sit in Canada with extremely low
inflation, almost negative inflation, called deflation, relatively low unemployment, almost all time low interest rates and
a reasonably strong economy here in the GTA. The US is still wailing form their
sub-prime lending crisis and the world economy continues to limp along and it appears that it will last
another 1 to 2 years. November 2008 was a US election and Obama won, injected optimism and new positive feelings into the US situation and he is doing things to rectify things in the US, but this will take time.
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!
For 2008 I predicted a 10% increase in GTA prices and I was about right, lucky guess!
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
market strength.
Conclusion that I draw from this and other sources and my predictions for 2009 and 2010
Mark's Crystal Ball for 2009 and 2010
This is what I predict for 2009 - 2010 in real estate, interest rates and more!
I see that our marketplace in the GTA will see price increases of about 8 to 10% this year.
I believe that mortgage interest rates will be about the same as they are now, see current rates here, and they will stay this way until about September of 2010, maybe be .5% higher, just so the banks can make money! lol
Rental vacancy rates will increase slightly, thus rental rates will stay about the same as they are or slightly decrease by December of 2009. A 'typical' 10 year old 3 bedroom townhome in Erin Mills currently rents for about $1400 to $1550 per month and this will be about the same in 2009 to 2010
With interest rates at an all time low, 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!
The condo market will soften due to oversupply and many buildings coming on the market
I believe that the US will be just begin to see the light at the end of the tunnel by the end of 2009, and they will be on the road to recovery
A barrel of oil will have reached $90 per barrel sometime in 2009, mostly due to an international crisis and absurd speculation fueled by the pundits and the press
Along a similar vein to the last prediction, gasoline prices will peak at $1.20 per litre sometime in late 2009 but will be $1.09 by year end.
Gold will be soft and less than $900 by end of 2009
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 and by 2010 well over 90% of everyone buying real estate will use the internet
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 July 21st, 2009: this is still true!
All the Best!
Mark
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
I wish you much success, good health and happiness in 2008 and always!
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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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.
Good old Garth is up to his tricks again and is now predicting that our real estate market is at it's Zenith, sorry, don't believe it. 
I wrote this time last year that "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 our prices will increase
over 11% this year! This is about where the prices ended up at the end of 08
mark@mississauga4sale.com Copyright © A. Mark Argentino, P.Eng., Broker, RE/MAX Realty Specialists Inc., Brokerage, Mississauga, Ontario, Canada L5M 7A1 (905) 828-3434 First created - Tuesday, July 16th, 1996 at 3:48:41 PM -
