Toronto’s Real Estate Team Sells 9 Homes Last Week

RE/MAX Hallmark Realty Ltd Brokerage Sales Up 9% In February Over One Year Ago

Despite the recent doom and gloom on the TSE and the NYSE, real estate sales are happening in Toronto. Maybe not for everyone (one brokerage I heard about with 40-50 agents only sold 18 homes in the past two months), but certainly for the Realtors who work hard, know the market and know their profession, clients appreciate their knowledge and skills and deals are happening.

Now to the why… why are Toronto home buyers feeling the urge to purchase? Basically I think it’s because people realize this is a GOOD time to buy… prices are down and they may not stay that way for long.

One of the forms we have our buyer clients fill in prior to coming in for a Buyer Consultation is called an “Ultimate Scenario Form“. We’ve had several recent comments to the question “What’s your biggest fear if you don’t buy?” to the effect that “Prices will go up before I get a chance to purchase a home”.

But this is not all coming from us. According to the 16th annual RBC Homeownership Survey recently completed, 30% of Ontario residents say they plan to purchase a home in the next 24 months. Almost half of people surveyed said they thought is made sense to buy a home now rather than waiting until next year!

In the group of Canadians under the age of 35, a full 48% indicated they plan to buy, up from 36% last year at this time.

“The current economic environment does not appear to have dampened Canadians’ overall confidence in the housing market,” said Karen Leggett, head, Home Equity Financing, RBC Royal Bank. “Canadians continue to have an overwhelming belief in the long-term value of a home and we’re seeing this in the buying intentions of many first time homebuyers this year.”

30% of those polled said that favourable housing prices were the biggest reason driving their decision. “Low mortgage rates and favourable housing prices are influencing home purchase intentions this year and may be the reason why more Canadians are poised to purchase over the next two years,” added Leggett.

On Tuesday the Bank Of Canada dropped its bank rate to a precedent-setting 0.5% and banks followed suit immediately to drop their Prime Rate to 2.5%. The prime directly influences the Variable Rate mortgage… current home owners often have a Prime minus 0.75% rate on their variable putting them at below 2% on their mortgage! New borrowers now have to pay Priime plus 0.75% which still puts them at only 3.25%.

The 5-year fixed-rate discounted mortgage is now at a low 4.39%, meaning that the monthly payment for every $1,000 of mortgage would be $4.64 with a 35-year amortization (or $464/mo for every $100K of mortgage). Now that’s incredible!!!

Since these rates are at almost historic lows, we’re typically suggesting to our buyer clients that they lock in at this rate rather than playing mortgage roulette with a variable rate mortgage which is almost certain to go up in the next 12-18 months as the recession lifts.

So if you are one of the 48% who are planning to buy in the next 12-24 months one of the best things you can do for yourself now is to start your real estate education. If you’re open to enrolling for some training, CLICK HERE and find out what options you might have.

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