It's official. This is a buyer's market! There is little doubt that October 2008 was the tipping point in Toronto’s real estate market. However, unlike the United States, we’re experiencing more of a correction than a crash. The extent of this correction is still to be determined as prices stabilize. In the Toronto loft market there is certainly not enough data on recent sales to quantify exactly where things stand. However, higher inventory levels and slower sales (see figure 1.1) have changed the market dynamic, and for the first time in many years, it's favouring the buyer.
Despite the uncertainty and negative talk about the economy, we remain cautiously optimistic and focused on the long-term. Like the stock market, or any type of market, the real estate market is influenced by psychology For those who worry or are nervous about today’s market, we remind you of a quote by the famous businessman and investor Warren Buffett,
"Be fearful when others are greedy and greedy when others fearful."
The economy and the real estate market always moves in cycles, and we are approaching the bottom of a cycle. Although one cannot predict exactly when markets will improve, history has shown us that the economy, real estate, and employment WILL improve again. Considering this recession does not have high interest rates, high inflation or high unemployment, many commenators feel this (bear) market will be short lived.
To quote another famous investor, the late Sir John Templeton,
"Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria."
With prices coming down, with selection and inventory growing, and with very low interest rates, we could be in the early stages of the next real estate bull market. We, the Mr. Loft team, believe now is a great time start negotiating for your perfect loft!
While some sellers may be disappointed having missed the boat on selling at the peak of the market, at least you could offset any particular loss when purchasing on the flip-side. In fact, the greatest opportunity right now exists for Move-Up/ 2nd time buyers looking for a bigger space as the market in the lower price ranges still remains fairly tight.