Tuesday, January 27, 2009

Real Estate Matters

Every few months I receive a detailed "Market Report" relating to condos for sale or for rent in the downtown area of Toronto. I received the latest yesterday and held my breath while I looked it over. You see, as mentioned on a previous blog, I own the condo that I live in and I also have purchased a condo "to be built" in the same neighbourhood. If the real estate market was doing what it had been doing over the last many years I would be looking forward to a tidy profit at some point when I sold one or both of them. When I purchased these units values were increasing and there was no job uncertainty. Now this is not the case. So I wonder how I will fare with these investments over the next period of time and I hope like hell that I won't be in a position to have to sell either one of them in the near future. However that may not be the case, so I look at these market reports with quite some interest.

So the word is (well according to the RE/MAX agent that authors the thing) that downtown Condo sales will be 5% higher by the end 0f 2009. Prices for smaller units will continue to appreciate as buyers will not be able to afford the larger ones. Also, the rental market will grow significantly, as many people will be knocked out of the housing market as they will no longer qualify for mortgages. This is good news for me as I hope to rent one of the condos rather than just sell one to pay for the other. Of course that depends on the good will of my bankers, but I expect that they will be happy to collect another mortgage payment from me each month. My scan of the market report left me moderately pleased that all was not in the toilet.

Some encouraging thoughts for those who are looking to buy a condo in the Toronto area during these desperate times - there are apparently big bargains to be had buying purchase assignments. These are resale’s of as yet unbuilt condos. When someone buys one of these condos from plans and it is 4 or 5 years from the date they put in the offer circumstances can change. They just might not qualify for the mortgage as it comes closer to the closing date (job loss) or they may want to get out of a deal and buy something ready to move in now rather than waiting another year or two. What you do is buy their "deal" from them. These folks can end up selling at a loss on their original price - they may even help you finance your down payment a bit to unload the obligation. As it gets closer to the occupancy date – the date they take possession there are deals to be had, according to this RE/MAX agent.

I am not counting on it, but this agent still anticipates that downtown Toronto Condo values will double within 10 years! That would certainly suit me fine!

Hmmm, 540 words, I seem to have a bit of trouble with the length of these things. Although I have been told that 300 words seems just to short. What do you think? (comments, anyone?)

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