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October 2, 2017 | Not yet

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

Back in May just over half of us said house prices would, for sure, increase in the next six months. Days later the fastest decline in the history of housing (at least in the GTA) started. By the time the summer ended, values were lower by an average of 20%. So much for common wisdom. No wonder people like garage sales.

Where are we now? The latest poll of consumer sentiment from Nik Nanos finds 37% still believe prices will go up. About 15% expect declines. And 48% apparently have no idea what the hell’s going on. How can you blame them?

On one hand, rates are rising and there’s more to come. Mortgage regs are about to be tightened again. NAFTA could blow up. Maybe you work for Sears, or Bombardier. And houses are still stupid expensive in most cities.

On the other hand, the average property in the largest market costs $200,000 less than six months ago. Mortgages are still dirt cheap by historic standards. And maybe the best time to buy is when others aren’t, or before politicians diddle things further and interest rates augment. Waiting until the universal stress test is enacted could guarantee less choice for most buyers, since they’ll qualify to borrow a smaller amount.

Such things could be behind the September rebound in the GTA. Well, not exactly a rebound. More like a little hump. Or even a dead cat bounce. (That’s when you throw a deceased feline off a balcony. It bounces. But it’s still dead.)

In any case, GreaterFool brings you the latest market stats for September – a prelude to what the realtor cartel will unveil days from now (thanks to realtors Alex Prikhodko and John Pasalis). Here are some highlights:

  • A big kitty bounce in Toronto with the average detached house price plumping up by a hundred grand, back to the $1 million mark. But, sales fell by more than a third. Were the buyers cunning, or reckless?
  • Stable conditions in Mississauga and Brampton, where volumes and prices plunged in mid-summer.
  • No joy, however, in York Region with Vaughan, Richmond Hill, Aurora and Newmarket seeing big drops. Sales in York dumped by half.
  • “While September sales ended up surpassing August numbers by an average of 20.8%,” says Prikhodko, “the sales volume of detached homes was over 50% lower compared to September of 2016. The recovery everyone is waiting for has not materialized and there is an increasing supply, currently standing at 26,844 listings.”
  • Across the region of six million souls, overall sales were down 36%. Houses plopped 39% and condos fell 20%.
  • In general, prices edged higher 3% in September, but that was almost completely driven by moisters moving into condos. Poor things.

The detached-house scorecard:

 

Click on chart to expand.

The conclusion seems obvious. September changed nothing. The market momentum is lackluster, weak, hesitant, tepid. Listings are starting to pile up again. Sellers waiting for the price and sales rebound are still waiting. The detached and move-up market is marking time. Kids lacking perspective or history continue to buy. October and beyond look gritty, given what’s coming.

Of course, most people are now focused on Thanksgiving. Then Haloween. Then Christmas. And after that they might not know what hit them. Save your offers until then.

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October 2nd, 2017

Posted In: The Greater Fool

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