After some sluggish months in January and February it’s nice to be shaking off the winter rust and enjoying longer days while the thermometer makes its slow ascent towards permanent double digits. Still, nothing excites Torontonians like seeing both the Leafs and the Raptors enter the playoffs with teams capable of going all the way to the finals. But hey, who’s kidding who? Now’s also the time when the hibernating real estate market is supposed to be fully awake and active. And though 2018 was supposed to launch us into a better, more productive 2019, sales through March lagged, down 1% over the same period last year.
What’s up With the Downturn?
Due to mixed messaging last year from both the Fed in the US and the Bank of Canada here – the promise of incremental hikes in interest rates – uncertainty reigned because those declarations got walked back. In fact Donald Trump is now pushing for O% interest rates in the US. That uncertainty, plus government intervention to cool the market, led to more stringent lending practices among the big banks making it harder for buyers to qualify for mortgages. Fewer qualified buyers would seem to mean fewer sales. Add to that fewer listings and the outlook for the coming weeks and months may appear bleak. But there’s another perspective to consider. Fewer listings actually means continued competition among buyers for those fewer properties and that’s keeping prices more than adequately supported. And more expensive homes and condos seem impervious to the mild depression seen in Q1 of this year. Furthermore, there’s been a slight uptick in prices over this time last year.
The Trump Effect – Yeah, That Trump!
There’s no denying the effect Donald Trump’s erratic behavior and threats of aggressive trade and economic policies has on America’s traditional trading partners. The imposing of tariffs, while renegotiating longstanding trade agreements, has all its trade partners walking on egg shells. For the time being, at any rate, Canada’s economy is still so intrinsically tied to America’s that we can’t help but catch a cold when the US sniffles. So while uncertainty exists in the real estate market, it’s safe to say that uncertainty rules across all business categories here and that means everybody’s hunkered down, less willing to part with money they may need simply to survive an unforeseen shortfall. In other words, we’re all in this together. The upside is, things change so fast these days that anything could happen, at any moment, to suddenly reignite confidence and freer spending in all sectors.
How Holley Helps
It doesn’t matter the business, there are certain aspects of its performance that can and should be effectively managed by the decision makers. However there are national and international market forces that go beyond the power of even the most influential CEO’s. One of those market forces we at Holley Home Inspection believe we can help agents and buyers manage is the lending “stress test” imposed by the OFSI. Not the whole thing but, specifically, the property “appraisal” clause.
Because the folks at Holley are former builders and housing project managers, we’re especially capable of distinguishing unique value in a home, specifics that many inspectors would overlook. And while we know the banks engage independent appraisers to provide general, market related appraisals of properties, we can provide inspections that speak to the specific assets of a property, assets that can be the difference between the granting of a mortgage or denial.
While it’s unlikely we’re to return to the salad days of 2016 and early 2017, at least any time soon, there’s every reason to believe the 2019 real estate market in the GTA will continue to hold its own. With that in mind we look forward to working with you throughout this and the years to come. Oh, and Go Leafs, Go Raptors!
Holley Home Inspections
Who better to inspect your home than the folks who know how to build them?