See, I'm keeping my word about updating and in such a short time too!  *pat on my back*

So I went down to the States in June/July - LA and Vegas to be particular.  It was truly, truly, truly a sad state of affairs for the real estate market down there.  Property values have plummeted and for sale signs are rampant everywhere you go.  I almost couldn't believe my eyes and had a hard time comprehending how a housing bubble of such magnitude could have bursted, blew up and destroyed so many lives and bank account balances!  How could an entire country not have an idea of what was coming?  I mean, many of the people caught in the bubble are educated folk, so who is to blame here?

I took a drive up Hollywood Hills and there were for sale signs on at least 1 in every 3 or 4 homes.  This was in stark contrast with the last time I took that drive 5 years ago when nothing was for sale because the turnover up there isn't very high.  It's just so hard to believe that this is happening and when you see Foreclosure Bus Tours driving around, you really start scratching your head.  I mean good on them for capitalizing on the current state of the market, but wow! 

Then in Vegas, I stayed in the Panorama condo towers (Leonardo DiCaprio lives there!) and again, I was in shock to see and hear about how much the property values had plummeted.  The same 2 bedroom suites that were selling for $500,000 a few years back are sitting on the market for months not selling at $400,000... and I'm sure it's just going to get worse from there.  I heard one story about a girl renting a 2 bedroom, 2 bathroom condo for only $1,300 because her landlord was so afraid of keeping the place vacant.  That's just insane and I hope it's just a one off situation, but regardless, you Americans are in some big, big, big trouble!!!

Flipping things back up North to Toronto, now I look at the market here and I have a sincere appreciation of how different our situation is.  Canada typically parallels the US economy and while I think things will stabilize a bit here to balance out, I can probably say with a good level of certainty that "shit won't hit the fan" the same way as it has in the States.  Our market dynamics and in particular, our mortgage lending practices are a million times safer with our centralized banking system.  We don't have anywhere close to the same sub-prime market and credit crunch situation that the US does.  Yay for Canada being safe and conservative on that front! 

Canadian Housing and Mortgage Corporation (CMHC) and all the banks have even pulled the 0% down mortgages and 40 year amortization options effective October of this year, so that will help ease things up a bit too.  The other positive thing for Ontario is that we don't have forclosures here (I talked about this in a previous blog entry: http://www.thinktorontohomes.com/blog/2007/3/27/the-411-on-foreclosures-and-power-of-sales.html), so we'll never run into the same situation as the US where people lose all their equity and the banks own billions of dollars of real estate and start selling for a steal because they have no other option.

Thus, I am cautiously optimistic for our market here in Toronto.  I'm not going to lie and say that we won't get affected at all by what's happening down south, but the problems they have there are really different.  Things are slowing down slightly already with the number of active listings going up and actual sales numbers going down, but ironically the average price is still increasingly steadily (see this article on the ThinkTorontoHomes.com blog: http://www.thinktorontohomes.com/blog/2008/9/4/heading-for-a-soft-landing.html).  What that shows is in core areas, the demand for "good" properties is still high and with the unbelivable gas prices, people are still choosing to move closer to their work and be in core areas that are accessible to public transit.  All of this is great news for buyers who can finally have a little more choice and time to find a home and hopefully not have to get involved in a bidding war.

Lastly, I'm just going to be proactive and answer this question because I know it's on everyone's mind... "Is now a good time to buy or sell in Toronto?"  My reply is that it depends.  Anytime is a good time to buy or sell if you're buying or selling the right thing for the right reasons... and I'm not just saying that in an attempt to paint a rosy picture for the Toronto real estate market.  I stand behind it because I've personally just bought 1, sold 2 and am still on the lookout for places.  There's proof behind my pudding and that will be the subject of my next post.  Until then, ta-ta.