The past two posts about the Real Estate Market from the Canadian Real Estate Association and The Toronto Real Estate Board have one common theme: the number of MLS listings has increased. My 10,000 foot view is this….it has a little to do with Mortgage Rates, HST and the economy and a lot to do with that old saw “The Baby Boom “.
I know because FINTRAC (The Financial Transaction Act) has force Realtors to identify their Sellers and mine mostly seem to be empty-nesters who are moving to enjoy a new and different lifestyle. No they are not “cashing out”, they are moving ahead with new life plans.
Baby Boomer cohort #1 (born from circa 1946 to 1955) are now in their mid 50’s to mid 60’s and their children are moving on. They are a group that were very committed to home ownership and they are now living in larger-than-needed properties.
Generation X and Y however are much smaller groups. The graph above says it all. It is a US graph that was available on Wikipedia but would also reflect the Canadian Boomers.
So keeping this all in mind, and with my “Crystal Ball” what does the future hold?
- More options for buyers moving up to larger homes. We are moving from a Sellers market, into a Balanced market and will move into a Buyer’s market.
- A real scarcity in the Toronto Condo Market of large Family-Sized Condominiums and rentals, causing the existing stock of larger Condos to increase in value especially in the mid-range ($500/sf).
- Activity will continue at all levels but the crazy world of multiple offers (which really only occurred in less than 20% of the offers presented) will drop off as the anxiety to Buy will diminish.
- If the housing market grows it will be led by new Canadians…
As these changes occur the Media will jump on the old “SKY IS FALLING” bandwagon. The Bubble will not burst but it may deflate a bit. Control of the market will pass from the Sellers to the Buyers. Change happens and with change comes opportunities. At the end of the day you are either buying or selling a HOME and not a STOCK or a BOND. However, if you choose to follow Real Estate as a commodity, keep an eye always on Interest rates, and demographics, especially immigration….They will give you a good read on potential value.
Those are my thought but I would love to hear yours!