What Is The Fate Of Torontos Housing Market?

With many saying that home prices in Toronto are highly overvalued

, and others saying that theyve seen a drop or will soon see a reduction in prices, it can be confusing for both buyers and sellers as to what the fate of Torontos housing market holds. But those who think that Toronto is a bubble thats in danger of bursting neednt worry; while those that think housing prices are going to go down anytime in the near future need to look at the current stats of the market.

Today, Torontos home prices are increasing ever steady and theres one reason for it historically low interest rates. And, as long as those rates are so low, Torontos housing market is going to be booming, and prices are going to continue rising. According to a report released by the Toronto Real Estate Board on April 4, 2012, sales on Toronto homes were up by 9,690 more sales than March of 2011, an increase of 8%. The low interest rates are motivating buyers and pushing them into the streets, as they realize now is the time to find the home of their dreams. As such, Torontos housing market is seeing a huge flurry of activity.

Sellers are not only realizing that the influx of buyers makes this a great time to list on the Toronto housing market, but theyre also realizing that its a great time to set a high price for their home. In March of 2011, the average price on a Toronto home was $424,801, while April 2012 sees the average price listed at $504,117 an increase of 10.5%, and rising. What buyers might be saving in interest on their Toronto mortgage, they might pay for in high home prices. Still, theres no reason to worry that Toronto has raised itself into a bubble.

Interest rates are expected to rise as early as late fall or early winter this year; and theyre definitely going to climb at some point in 2013 if they havent before then. At that time, buyers will start to move out of the market and sellers will once again be forced into a position of pricing their home more competitively when its time to sell. While they wont feel too great a pinch and are still likely to get the full value, if not more, on their home, Toronto sellers who are too late to become active in the market could miss out on the huge profit their home could bring them if they were to sell now, or sometime within 2012.

There are many that are worried about the fate of Torontos housing market, whether its because they feel housing prices are climbing too high too fast; or because they think the bottoms about to fall out from under the bubble. Once interest rates stabilize to more normal levels however, the market will correct itself, just as Finance Minister Jim Flaherty has been saying hes hoping it will.

by: Bryan.J

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