It's a Seller's Market Out There



By: DAN VERBIN  
Published: January 23rd 2010


Erez Tamir
Pic: Erez Tamir

 

Erez Tamir has worked all over the world in the real estate industry. After studying engineering at Tel Aviv University, Tamir worked in the real estate industry in management from Eastern Europe to Africa and the United States. Eventually, after marrying a Canadian woman who he met in Israel, he found his way to Canada, where he is currently the top producer for Remax West in Thornhill.

 

Yet, through all his years in real estate, Tamir told Shalom Life that he has rarely seen prices skyrocket as they have in the past year in the Toronto area, specifically in Vaughan, including heavily Jewish neighbourhoods in Thornhill. Due to historically low interest rates and a shortage of new, and even resale, houses, he said that prices have climbed an average of 15 per cent since last year.

 

“If you want to sell your home, this is the right time,” he said. “There is no supply in the market and there is a lot of demand because of low interest rates.”

 

He gave several examples of extraordinary price increases:

 

In the Thornhill Woods area, a house sold for $430,000 last year. Two months ago, it sold for $510,000.

 

In Richmond hill, a house sold for $430,000 in June. It recently sold for $510,000, an unheard of gain of $80,000 in only six months.

 

A townhouse went from $435,000 to over $500,000. A two-bedroom condo from $250,000 to $300,000. The list goes on and on.

 

Tamir said that with rates so low on mortgages, you can pay the same price as you would to rent an apartment but instead buy a home. One of his clients recently purchased a $490,000 house and put 5 per cent down. He pays $1,600 a month for his mortgage. Unbelievably, the client and his family moved from a three-bedroom apartment where they were paying approximately the same amount in monthly rent.

 

One of the major reasons houses are selling for such astronomical prices is because of a shortage of new homes being built. Last winter, there was a crisis period where builders refrained from any new building. While, the home building industry is slowly getting back to normal, catching up, this temporary pause caused a shortage of new homes and a rush to buy resale homes, pushing up housing prices in general.

 

He explained that in the Thornhill area, there are no good quality houses selling for under $550,000.

 

“Most of the houses are getting multiple offers,” he said. “People are fighting and pay more than the asking price.”

These houses are not only selling for more, they are selling without conditions, such as an extra five days to set up financing or time for a home inspection.

 

The real estate agent believes that the market will stay this way for some time still because there is such a shortage of available houses, new and resale.

 

“People say, “Oh, maybe this is not a good time to buy,’ but it is always a good time to buy because in the long run in real estate, the houses will go up in price,” said Tamir.

 

With prices that may seem sky-high, it might be reassuring to potential home buyers to know that compared to other major cities, such as Tel Aviv, New York City, Tokyo or Moscow, Tamir said that “Toronto is still not expensive at all. It’s still cheap.”

 

He gave the example of New York City, where the average condo will run a buyer at least $1 million.

 




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