Are property prices slipping in GTA.

A>
A property in my area was sold in the last couple of weeks for 283K..

has Garage and deck
Slightly small yard

B>
My friend bought a similar house in same area.. 2 houses down.. for 259K in 2007 Jan.
no Garage and deck
Slightly larger yard


24K is a big difference.. tells me his property value has appretiated by 10-15K.. in 1 1/2 year.. All the while he is actually making 850$ + 30% utilities on his basement..

Credit crisis, food, energy prices still plague world economy


The U.S. credit crisis has not hit bottom and world food prices have not yet peaked, making continued financial volatility likely in the midterm, central bankers and international economists said Monday.

"It's likely that the market adjustment process will continue for a considerable period of time and there is significant uncertainty about its impact on the economy," European Central Bank vice-president Lucas Papademos told a Buenos Aires forum that drew experts from more than 30 countries.

Trade and investment flows have linked world economies, allowing U.S. economic troubles to spread and dashing hopes of the financial "decoupling" some thought would protect emerging economies, U.S. Federal Reserve Board governor Randall Kroszner said.

More than $500 billion in sub-prime related losses by many of the world's biggest banks is drying up credit and slowing growth, prompting policy makers to cut interest rates in a bid to boost economic activity. But rising food and energy prices also are driving inflation worldwide - making those interest rate cuts increasingly complicated.

Turkey's Central Bank president Durmus Yilmaz said he expected food prices to keep climbing for the rest of the year, as increased food production fails to keep pace with swelling demand from China and India. Food price hikes accounted for 70 per cent of all inflation in Turkey last year, up from just 10 per cent in 2006, Yilmaz said.

In Argentina, Central Bank president Martin Redrado stressed volatile world markets and not Argentine economic policy pose the biggest risk to growth.

The $47.2 billion in foreign currency reserves Argentina has accumulated since its historic 2001 default are helping it withstand economic shocks from abroad, he said.

Still, "until the real estate market reaches its bottom, we won't see any reduction in financial market volatility," he said.

Quote:

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Originally posted by dudewheresmycar

Recently i bought a power of sale old Semi detached 3 bed room home in Brampton... The place has yard walk out to park.

Avg sale price in area is 26000$.I bought the house for 245000. Had a 1 bedroom finished basement.

Did some minor repairs, paint job and new stainless steel appliances for 4000$. Total cost after closing cost 25000$.

I got a mortgage of 196000 at variable rate of .95 below prime currently working out to 3.80%.


Here is the math.
Interest 615$
Property tax 225$
Utilities 300$(Estimated avg)
Propery Ins 60$
Total cost 1200$

Basement has been rented out for 500$.

Actual cost of owning 700$ v/s renting 1050$.


Even if the variable rate goes up by about 2% still i am in the clear as far as rent v/s owning goes..
The only downside is i take is market risk, which i think for my property and location is very marginal.. the other risk is major incidental maintainance

I am not saying buying is for everybody.. I did have a sleepless month after i decided bought the place.. But today i am beginning to enjoy the 350$ difference and well as the house..

Mind u the appartment was crap and a good decent appartment in my area cost 1250$ and the space in my house is atleast 1 - 1/2 times the rental place (exculding the basement)

The dude..

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50000 making 400$ a month.. wow... U must be really good at investing..

well i am not.. I used to make 150$ a month on CDs.. and had to pay tax at the top end of the bracket.. making about 100$ a month..

That would take the cost of owenrship to 1300$pm... still good appartments here cost that much...

Quote:

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Originally posted by newton

Quote:

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Originally posted by dudewheresmycar

Recently i bought a power of sale old Semi detached 3 bed room home in Brampton... The place has yard walk out to park.

Avg sale price in area is 26000$.I bought the house for 245000. Had a 1 bedroom finished basement.

Did some minor repairs, paint job and new stainless steel appliances for 4000$. Total cost after closing cost 25000$.

I got a mortgage of 196000 at variable rate of .95 below prime currently working out to 3.80%.


Here is the math.
Interest 615$
Property tax 225$
Utilities 300$(Estimated avg)
Propery Ins 60$
Total cost 1200$

Basement has been rented out for 500$.

Actual cost of owning 700$ v/s renting 1050$.


Even if the variable rate goes up by about 2% still i am in the clear as far as rent v/s owning goes..
The only downside is i take is market risk, which i think for my property and location is very marginal.. the other risk is major incidental maintainance

I am not saying buying is for everybody.. I did have a sleepless month after i decided bought the place.. But today i am beginning to enjoy the 350$ difference and well as the house..

Mind u the appartment was crap and a good decent appartment in my area cost 1250$ and the space in my house is atleast 1 - 1/2 times the rental place (exculding the basement)

The dude..

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Buying a house is a lifestyle choice and should not be considered an investment because how do you value the feeling you get once you are an owner.....however...if you have to make a monetary comparison you have to take into account the interest on the $50,000 downpayment. This could come to about $150 to $400 per month depending on how you invest it.

Of course if your house appreciates by $5000 per year you make 10% on your investment.

Also the $500 you make from your basement rental has costs associated with it in terms of nuisance, repairs, disturbance, wear and tear etc.

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“Home ownership is a privilege with great responsibility and not the right to cover your head with name of home ownership at any cost.”

Buying home is great idea and people should think and save money for that great cause. But it's not always. After seeing the complete housing movie in US/UK (started in Canada too) if people are not learning and still want to measure temp of fire then God is helpless. If people do not understand role of govt., banks, credit card companies, mortgages companies, experts, RE boards and media then it's really big problem and they always get rip of with their hands. If you get time please watch some video/interview of Ron Paul.

Experts always say "Why are you paying someone else’s mortgage if you are buying for living so it's always good time to buy for living".

Can we say "Home owners please keep my rent subsidize and you pay my rent to mortgage difference, taxes, condo fee and maintenance and I will buy when you can not keep that promise and broke"? Is it going to happen? Yes it's started already. 65k loss in 13 months in SFH Calgary. Its sounds like good down payment or saving of 3 years. GTA is not far. Some areas in GTA having price down and inventory are already plumping.

But liars are still making good pitch ""I think it's a great time to buy now. If we're going to see any softening in prices, it's going to be in the second quarter, which is right now. This kind of inventory is going to thin out as we get into the fall - Ed Jensen CREB president.”


I never seen any Realtor who blame their God father or corrupt institute they belong/certified to serve the people and top of that compare their job/responsibilities to doctors/CEO/Engineers.

Any thoughts?
Any GTA data/comparison for month of Aug?

Home-Price Bottom May Still Be a Year Away

Home Depot Inc. CEO Frank Blake told a Goldman Sachs retail conference that some recent housing trends indicate “we’re getting awfully close to the bottom” of the current correction, but economists at Credit Suisse say that one of the major metrics — home prices — aren’t going to reach lows for at least a year.

Blake pointed to trends showing private residential investment has fallen to about 3.5% of gross domestic product at the end of the second quarter from a peak of about 6.25% at the end of 2005. Other housing data, such as mortgage equity withdrawal rates, also indicate “a lot of the over-exuberance in our market is getting squeezed out,” Blake said. “We don’t think we’re at the bottom yet, but we think you can see it from here,” he said.

However, any bottom call in housing will hinge on the direction of prices, which have been on the decline for three years. Finding the low point for home prices is difficult, as there isn’t just one index to track, but at least three major gauges — the S&P/Case-Shiller index, the Ofheo home-price index and the National Association of Realtors median existing-home price data — that all have advantages and shortcomings. Economists at Credit Suisse looked at the different indexes compared to several metrics and see equilibrium being achieved in 12 to 18 months.

One of the key comparisons was the NAR median existing-home price (seasonally adjusted by Credit Suisse) to median family income. The ratio maintained a relatively narrow range from 1981 to 2000, when it started to explode. Assuming that trends in prices and incomes remain constant, Credit Suisse forecasts that home price will return to the historical range some time late next year.

“What’s evident is that a substantial down payment on the housing adjustment has already been made, although there still appears to be wood left to chop,” Credit Suisse said in it research report. –Phil Izzo



http://blogs.wsj.com/economics/2008/09/03/home-price-bottom-may-still-be-a-year-away/trackback/

http://www.greaterfool.ca/2008/09/03/illiquiditys-a-bitch/#comments

http://www.movesmartly.com/2008/09/toronto-real-es.html

The data for August 2008 is out, price dropped 1% in Toronto, inflation was 4% this year, so not too much of a price drop: Only -5% (not very bad, unless the trend accelerates)

I quote:
”
Within Toronto proper, the average actually
fell one per cent to $377,990 from last
August’s $381,681

Units transacted within the
City of Toronto, at 2,437, were down 25
per cent from the 3,243 recorded in
August of 2007, while down 10 per
cent from the 2,706 figure in the same
month of 2006.

Housing Market Indicators
August 2008 vs August 2007
——————————
Sales 8,059 vs 6,318 (-22%)
Listings 19,145 vs 25,076 (+31%)

Any comments?
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http://www.greaterfool.ca/2008/09/03/illiquiditys-a-bitch/#comments
I live in the Dundas & Ossington area. My neighbour’s duplex was put on the market in June @ $625k. 3 weeks later the price dropped to $589k, then on down to $529k before being taken off the market.

~ $95k drop, and no sale. There are two brand new units being built down the street (original was torn down). They may be tough to sell, at least for what the builder thought that they would originally go for..
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