April 2007 Newsletter

April ’07 was the busiest month in the history of the Toronto Real Estate Board, with 9,452 sales recorded. As active as the market is, and with quite a bit of attention being paid to ‘bidding wars’ and sale prices tens of thousands of dollars over asking, it’s interesting to note that the year-over-year price increase was just 3%. Buyers, watch for unusually low list prices: they’re usually pegged to generate competition! If it looks too good to be true, it probably is!

Be Prepared to Make an OfferShopping for a house in a market this busy can be stressful. On many nights, lots of bidders are going home empty-handed. However, many buyers are wizening up to the low price strategy, and are waiting in the wings to see what happens on offer day. If nobody else steps in, they wait a day or two then make their move. This has resulted in some buyers making a good purchase, but has also been leading to competition 2 or 3 days after the scheduled offer night. If you are interested in making an offer, but don’t want to get buried in competition, be ready to go on offer day. If nobody else shows up (or just 1 or 2 others), you have a good chance of purchasing the house that night. If you wait too long to see what happens you may miss out!

Interest Rates May Rise

Canada’s economy continues to steam ahead. Job creation is great, GDP growth is steady, housing permits are up, and interest rates are still low. However, concerns about rising inflation may lead to a Prime hike, which will likely lead to Mortgage rate hikes. Most borrowers can still get an interest rate around 5% – through a Mortgage Broker – but that probably won’t last long. If you’re in the market for either a new mortgage or a mortgage renewal, make sure you shop around! I work with 3 Mortage Broker companies. Call me if you would like a referral to speak with one of them about your options.

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