Skip to content

When is a Bubble a Bubble? Real Estate housing debate is far from over…

January 20, 2010

Is it a real estate housing bubble? Should I sell? Should I wait? What the heck is going on?

It’s no surprise that there is confusion over the current state of our real estate market in Oakville, Mississauga and the rest of the Greater Toronto Area.  I’ve used the term schizophrenic before and in my mind, maybe bi-polar is better. At any rate,  there’s a number of reasons why the current real estate market would be confusing to home buyers and home sellers.

First, the real estate industry, of which I am a part of, has a vested interest to keep people buying and selling their homes, condos, townhouses, etc… We make our living when people buy or sell their home or condo.

I think that the danger comes when the real estate industry blindly tells people ‘everything’s ok’, ‘Sell, sell, sell’ and ‘Buy, buy, buy’. Now, don’t get me wrong, this isn’t the case across the board, but there are always two sides to every story and it’s important to look at the big picture.

My clients entrust what is usually their biggest investment with me, their home and I don’t take that lightly -no one should.  I wouldn’t expect them to make a decision based on the fact that I say “The market is hot, hot, hot – now is the best time to sell“. They shouldn’t.  I’m a full-service real estate broker and part of that is working with each client’s needs and situation and advising them so they can make the best possible decision for them.

So when you look at the housing stats over the last couple years, we’ve seen significant rises in property values and lending rates are at historic lows.  Mortgage rates have only one direction to go, up.  Are you trying to tell me that everyone that’s purchased a home or condo in the last few years has done so within their means and hasn’t maximized their ‘debt service’?? Come on… next you’ll tell me you’ve got some cheap swampland in Florida.

The Bank of Canada has been making some different noises in the last few months saying that ‘it will raise rates after the first half of 2010’, maybe sooner if need be.  Now, there’s word that they’re softening the term ‘bubble’ and saying we’re not experiencing a ‘housing bubble’.  Just yesterday, the Bank of Canada announced it would be holding the benchmark interest rate steady at 0.25%… for  now.

Moving into the spring real estate market, I believe we will see more homes and condos for sale in Oakville and Mississauga.  People will be looking to take advantage of the strong buying that closed out 2009.  Will we see bidding wars and crazy increases in home values? I don’t think we will to the same extent.  I am anticipating more available listings, which will encourage a leveling off of prices.

The first 6 months of this year will be an interesting one to watch as we find out what will happen to home prices and will interest rates rise and how much? One thing is for certain, the housing bubble debate is far from over…

Related Reading: Gary Marr’s full article “Housing bubble debate is far from settled” in the Nanaimo Daily News (January 18, 2010).

Ryan Chelak is a real estate agent in Oakville and longtime Oakville resident. Subscribe to my blog to keep up to date on local news, information, events and of course everything you want to know about Oakville & Mississauga real estate. Are you thinking of buying or selling your home or condo? If you would like to confidentially discuss your real estate needs please contact me.

No comments yet

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: