What Does the Future Hold for the Toronto Real Estate Market?

With all the news of falling home prices in Toronto, decreasing value, job cuts and foreclosures, many wonder when this recession will come to an end. The real estate market has suffered badly in this economic climate with default rates on loans rising to an all-time high. At the same time, lending restrictions are making it harder for first time home buyers to become homeowners and therefore continue to rent and bide their time. In many parts of the country, such as California and Florida, the rate of foreclosures is rising on a daily basis.

According to the statistics, house prices in Toronto are expected to continue to drop in 2009, just as they did in 2008. Things are definitely going to get worse before they get better. One of the chief reasons for this continued decline is that lenders are experiencing difficulty obtaining credit because their sources of investment have dried up. Interest rates are down to the lowest they have ever been so that lenders who do approve mortgages are not going to realize the large profits that they did in the past few years.

Commercial real estate is expected to take a big hit in the next few months. The real estate crash of 2008 occurred mainly when homeowners with adjustable rate mortgages received their new statements according to the adjusted rates and realized that they just could not make the payments required. As a result they essentially gave up and didn’t pay the loan, resulting in foreclosure of their properties. Just about all apartment and condo buildings, shopping malls and office buildings are mortgaged and as business close up, the source of revenue from the monthly rent will dry up as well leaving the owners looking for ways to find the funding needed to make these huge payments.

Experts predict that the Toronto real estate market will not start to rebound until at least 2010. Until that time, house prices are down and there is an overwhelming number of homes on the market. These will need to be handled and taken care of before we can expect to see any stabilization in the market and a rise in the prices of homes. According to the US Census Bureau, there were more homes vacant and for sale in 2008 than at any other time since 1965.

Demand for housing is not expected to improve in the immediate future and this fact alone will keep prices down. In times when there is more demand than supply with more buyers than sellers, prices rise. That is not the case today and there are way more homes for sale than there are interested buyers. Those who may be interested in buying a home for the first time are unable to do so because of the huge down payment that lenders now require to reduce the risk they have in giving out the mortgage.

Experts advise that the housing market will start to level out, but they are not quite sure when this will happen. It has to bottom out first before it can start to crawl back up from this slump. If you're looking to pick up a nice piece of real estate in Toronto, start at http://www.nicerealestate.com/