Toronto prices decline 15% in mid-October

[cdr108]

Good day all,

Newbie here. Mr. Cdr108, a question for you please:

If you honestly believed that the DJIA was poised for a 40% drop in 2007 then did you act on your belief with an index put?

Also, do you have any other words of wisdom for us novice investors today? Is oil going to rebound? Will the US tank against Euro? Is there a rebound coming in the housing market such that US MBS debt is priced at a steal?

Thank you very much for your valuable input.

Seeker

Personal opinions.

Options are a losing proposition ... no put, just short but I didn't do it at the peak.

Crude may go down to $45 US/bbl, then go long but don't expect quick run up to $147. Alot of it was speculative froth - there were no fundamental reasons to go up from $70 in January 2007 to $147 in July 2008. Hence, the dramatic decline.

I don't do currency / FX markets.

I wouldn't touch US MBS debt unless it was $0.10 on the dollar.
Too much leverage/securitization to know what's the underlying asset.
I don't know if it's available to retail investors ... if you do, I'd be interested to know more.

 

[TrickyRicky]

So we are finally getting over the denial stage phase 1. There is still some mop up convincing to do but the mass of opinion is now in agreement that real estate values and activity are poised to drop and drop significantly.

The second denial stage is the imminent rebound denial phase. We are already hearing the first preachers of this faith thundering from the pulpit. I'm the first one to admit that no one can predict specific events more than 6 months in advance. History would suggest however that we are in for a long period of stagnation at minimum and that the real rebound will not occur for many many years. The most painful period are the coming few years because many companies and individual investors and families will just financially bleed to death waiting for recovery. I wish everyone well and best of luck. Dig in deep!

 

[jb007]

Out of curiousity has anyone been looking for a condo in downtown toronto and noticed a signficant drop in prices?

Im currently overseas and have been checking out the property values occasionaly online and to be honest have not noticed any change in listed or requested values.

According to all the news and articles about, values should be down 10-15%; ive yet to see this.

Thanks for any input

 

[cdr108]

Out of curiousity has anyone been looking for a condo in downtown toronto and noticed a signficant drop in prices?

Im currently overseas and have been checking out the property values occasionaly online and to be honest have not noticed any change in listed or requested values.

According to all the news and articles about, values should be down 10-15%; ive yet to see this.

Thanks for any input

I've seen some lower prices for the 'list price' but not much (~ 5% below last year); however, RE prices adjustments by sellers are stubborn especially at the beginning of a decline because there's a tendency to still think they can get the peak prices.

More valuable information can be found from sold prices. Keep in mind, in Canada we are at the start of the start of the correction while many countries are already in their 2nd year. You will definitely notice a difference next year.

 

[rbt]

Out of curiousity has anyone been looking for a condo in downtown toronto and noticed a signficant drop in prices?

The one building I've been eyeing with the active intention to purchase in have actually been listing slightly higher since September.

If prices had dropped 15% in it I probably would have moved in already.

Of course, list price and the actual closing price may be two different things. I'm considering low balling a couple of units in December.

 

[detroitbootybass]

Out of curiousity has anyone been looking for a condo in downtown toronto and noticed a signficant drop in prices?

Im currently overseas and have been checking out the property values occasionaly online and to be honest have not noticed any change in listed or requested values.

According to all the news and articles about, values should be down 10-15%; ive yet to see this.

Thanks for any input

I always checked out units in the M5C postal code area and have noticed the list prices dropping since late spring. On average, i'd say the median list price is down 25 - 30% (in that area and since May of 2008).

 

[AKS]

I just searched M5C and the prices are suppose to have dropped? If it did, it doesn't seem like the east end of Yonge is cheaper than west end.

 

[taal]

You might not notice signficant drop in Condos, it may be more noticible in houses around the downtown core.

It's very hard to get a good figure just by looking at the MLS listing i.e. I've noticed a 25-30% drop is a very hard conclusion to reach.

I for one have been checking a couple condos (old) / some houses around the downtown core and they're all up. Most Condo's on the waterfront seem to still have increased in the last month.

But again you can't really reach such a conclusion by looking.

If the average in the area is 15% ... say in Toronto in particular it's likely downtown experienced less then that for that month, particularly in condos but other areas had slightly more then that in the city.

 

[MBS-Guru]

i definitely notice some of the houses with significantly lower listed prices in the yonge/lawrence upto yonge/sheppard areas compared to a few months ago. However, due to the sudden changes in the market, you still have a glut of unsold houses from months before that are still listed at 2007 prices. I see a lot of similar houses in the same neighborhood with a $50,000 to $100,000 price differences ...... so those who don't come down to reality will be pretty much sitting in their homes for a long long time.

 

[cdr108]

There was a news article I read - can't recall if it was in the Toronto Star or Globe, that discussed price reduction resistance by sellers in FL when the RE downturn in the US began 2 years ago.

I am sure we can experience similar resistance by sellers here in Toronto also. Some will be willing to reduce to get sold; some will hold firm; others will pull their property and relist for the same price in the spring in the belief the market will pick up by then.