What The “Recession” Really Is … And What It Means For Your Real Estate Market Part 6

February 25, 2010

Eppel: There is some merit in the idea of taking advantage of other people’s panic-selling situations, but I don’t know if that’s necessarily out there yet in the real estate market.

Cooper: I’d say wait.

Post: How long?

Cooper: I don’t know.

The funny thing about Cooper and the doom and gloomers like her is they purport to be experts on the economy, yet they almost never see any of these economic woes coming and they have no idea how long these woes will last.  Worst of all, they don’t offer any viable solution to people on what to do during a recession.  The doom and gloomers seem to say you should basically bury your head in the sand: keep working, thank God every day that you still have your job, save up every penny, scale back your lifestyle, become a miser, and live in fear of what may come.  Who wants to live like that?  Who actually does?  No one.

It makes no sense whatsoever to wait buying a home in the Toronto area.  Who really postpones a major decision like buying a home because of what the newspapers or television or anyone says?  Those that can buy, do.  Life happens.  People get married, babies arrive.  Such people need homes.

Waiting makes no money sense either in most cases.  In places like Florida you can expect prices to drop dramatically from their peak because they were sky high to begin with, and that was due to massive overbuilding and rampant investor speculation!  I know people who have looked at Florida homes in the past 2 years which changed hands 5 or more times by speculators without even having been lived in.

But in Canada this sort of speculation and overbuilding never happened nearly to the extent that it did in the US.  The Canadian banks just didn’t have the government safety net the US banks had.  So in recent years it was pretty much business as usual for the Canadian banks: they lent out money based on what people could actually afford.

Take a look at the actual recent sold prices in most places in the Toronto area.  Have they really dropped all that dramatically from their peak?  Not really.

In many cases, things haven’t changed much at all since the boom times of recent years.  Here are some recent sold prices in and around a neighborhood in the west end of Toronto called Roncesvalles Village:

Filed under: Inspiration

Tags: Big City Broker, Brad J Lamb, Brad Lamb, carriage trade, depression, doom and gloom, economy, Elise Kalles, Garth Turner, Harry Stinson, Harvey Kalles, Mike Eppel, real estate market, recession, Richard Wengle, Sherry Cooper