The chart represents the average sale price of houses in the Toronto area over time. In stock trading, this price pattern resembles a parabolic rise followed by a correction and stabilization, which is often seen in speculative bubbles or cyclical markets.

Key Observations

Strong Uptrend (2015-2022) – A steady rise, followed by a sharp acceleration from 2020 to early 2022.

Sharp Peak and Decline (2022) – A bubble-like top where prices peaked sharply and then dropped rapidly.

Sideways Consolidation (2023-Present) – After the correction, prices seem to be moving in a range, fluctuating but not showing a strong new uptrend.

Comparable Stock Trading Pattern

Blow-Off Top: This pattern is seen when an asset experiences rapid price appreciation, followed by a steep decline. It resembles parabolic patterns found in speculative stock or crypto markets.

Head and Shoulders: If we look closely, the chart might suggest a broad head-and-shoulders pattern, which is a bearish reversal indicator.

Support and Resistance: The price appears to be bouncing around a level (~$1.3M) but is failing to break into new highs.

Prediction: Up or Down?

Bearish Outlook (More likely): Given the overall pattern, we might expect further declines if economic conditions (interest rates, demand, supply) remain unfavorable. The market has already corrected from the peak, and if it forms a lower high, we could see another leg down.

Bullish Scenario: If demand stabilizes and economic factors support growth, prices could hold at this level and potentially rise again.

Conclusion

The most likely scenario is continued consolidation or a slow decline unless a significant economic or policy shift boosts demand. If you’re using this chart for a housing market decision, consider external factors like interest rates, inflation, and government policies before making a final judgment.

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As real estate prices rise, demand is growing for affordable downtown living in Canada’s biggest cities. The solution may be to shrink the amount of space you buy. Smart House Condos is a new joint development by Malibu Investments and Urban Capital at the corner of Queen Street and University Avenue in downtown Toronto. Units start at $227,000 for a 300 square foot unit. Terry Lustig, development manager at Malibu Investments says micro-condos are popular with people who want to live downtown, but not spend all of their money on a mortgage. She also believes they will be a growing trend in Toronto. But how much bang for your buck are you getting? According to research firm Urbanation, new condos in Toronto had an average price of $539 per square foot in the second quarter of 2013. A unit in Smart House will cost around $700 per square foot. As the saying goes, in real estate it’s all about location, location, location. While the units may sound small, they’re designed to save space. The bed folds down from the wall, it has a combined washer-dryer, and extra counter space comes in a drawer. Amber Kanwar, host of The Business News, got a tour of the space-saving design.

In September, I spent a week in Muskoka (cottage country, for those not in the know). It was breathtakingly beautiful and so peaceful. (Internet access was sporadic and Starbucks is at least 1.5hrs hours away, but that’s another story.) There were lots of really nice homes in the area and I wanted to see how much they cost. To my shock, a mansion can be had for $300K. A mansion! It opened up lots of possibilities – until that moment I never though of living anywhere other than in a city. I started picturing that kind of lifestyle… and it made me very sad. I couldn’t stand the thought of living out in the woods. I like running away there sometimes. But  I want the energy of the city around me, even though most of the time I whine about the noise, smell, annoying people, and frankly, I don’t even take advantage of all that the city has to offer. And so I remain, in this dissatisfied state, living in a regular-sized condo downtown. Below is a snapshot of life in Brazil.

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When I hear the phrase “real estate community”, I think of “The Glades” episode about a nudist colony. Also, my friend in Florida comes to mind. He took advantage of the real estate bust and got a mansion in a gated community for a song. 5 bedrooms for under $150K or something. He’s got an active business, wife 12 years his junior and three teenage daughters. Clearly, it’s not for retirement only.

Google didn’t give much on this topic maybe because the terms are pretty generic, but this seems to be a uniquely American phenomenon. Lots of Canadians buy vacation homes in communities in the US, and I can see how secluded surroundings and privacy can be appealing. In fact, some of America’s most desirable real estate resides within gated or secluded communities, with a unique life of their own. MSN.com lists a few of the exclusive real estate communities in the US. For example, Beverley Park in Los Angeles properties regularly sell for $30+ million. The value in these resorts comes from the association with the community, celebrity residents, and the seclusion that comes from being part of an insulated community

While these exclusive communities are profiled in the media, most real estate resorts are much more accessible to the average buyer. Communities often have their own facilities and amenities which can add value when the time comes to sell the property. While my friend got a great deal, his house was still selling for about 25% more than comparable ones outside the resort. Clearly, community real estate prices are more resilient in times of crisis.

Some real estate communities are themed resorts, based around leisure facilities like golf clubs and fishing lakes. These properties are often more than just quality homes, they offer residents the chance to live in idyllic surroundings, with more convenient access to leisure pursuits – the perfect edge should you ever come to sell your real estate community home. It’s like living at the cottage full time, while still being in the city.

Other communities are based around a particular location or lifestyle, without necessarily having such a strong connection. Gated communities, for example, can provide a degree of isolation and security. While community real estate tends to be somewhat more expensive, prices account for the additional benefits that come with living and owning real estate in an exclusive residential community.

DMB Real Estate, who specialize in residential and community real estate, suggest that buyers prefer the seclusion and exclusivity of resort-based real estate, while enjoying the practical advantages this can bring.

Being close to a golf course or living in the midst of scenic countryside has its distinct advantages. Resort properties often appeal to those that are in pursuit of their favorite leisure activities, or those that are looking for a vacation home. But for a peaceful, secluded place to live, these residential communities tend to be amongst some of the most prized real estate in the country.

It’s not just those that are looking to buy a home for themselves that choose to research real estate communities further. In an uncertain housing market, resort real estate is proving a persistently popular choice for real estate investment. For those investing for both residential and vacation purposes, communities can provide a ready-made appeal for their property when it comes to selling on.

I just spent a good hour looking at these properties, and am in a bit of a shock… Here’s a random example. Depending on the finish options and floorplan, prices for these real estate community homes range from $310,000 to $370,000. That’s less than you’d pay for a tiny 2-bedroom condo in Toronto!!! Yes, this is not LA. It’s Mesa, Arizona, but it’s not that small, with a population of 450,000. Not really a small town. Wow. What the hell am I doing here?

Click pictures to enlarge

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NEW YORK – Former Federal Reserve chairman Alan Greenspan, whose legacy has been tarnished by the global financial crisis, on Thursday laid out a scholarly defence of why Fed policy did not fuel the housing bubble.

He did offer somewhat of a mea culpa, though, noting that the regulatory system failed by not demanding financial firms hold much larger capital buffers. Mr. Greenspan, who led the U.S. central bank from 1987 to 2006, has been criticized by some analysts who argue he kept short-term, benchmark interest rates too low for too long in the early 2000s.

The former Fed chief defended the central bank’s actions, saying that the seeds of the housing boom were sown by geopolitical events that were out of the Fed’s control, an argument he has presented a number of times in the past.

The fall of the Soviet Union led to hundreds of millions of workers entering the global marketplace, he said in a paper to be presented to a Brookings Institution conference. This new market-based workforce, Mr. Greenspan said, helped push up growth in the developing world. This in turn fuelled a global savings glut that drove down long-term interest rates, leading to an “unsustainable boom” in house prices, he said.

Source: Financial Post

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Source: http://blog.buzzbuzzhome.com/2010/02/ottawa-considers-making-it-harder-to.html

Kiyoko Fujimura
Buzzbuzzhome Corp.
February 12, 2010

You can’t read about Canadian real estate news right now without hearing the word bubble. While we’re still unsure whether or not a bubble is truly in our midst, Finance Minister Jim Flaherty is considering policy options to curb a bubble in the housing market. With Toronto housing prices up as much 19% (by some estimates) in one year, it seems like the market needs a readjustment.

Under consideration are two policies. First, an increase in the minimum down payment. Second, a decrease in the maximum length of mortgages (amortization period). The larger down payment or the increase in monthly payments associated with a decrease in the amortization period would leave some potential buyers unable to purchase. This, in turn, should lead to an easing of demand and cooling prices.

Peter Aceto, head of ING, said:

“There are some concerns because of what’s going on with real estate, in terms of rapidly increased property values and the theory they’re being fuelled by very low interest rates, that a bubble is being created similar to what happened in the U.S.” Yourhome.ca

Interest rates have sat at record-low’s for a while now triggering what some are considering a bubble. For further analysis of this trend see my previous blog post here.

Discussion

Given Flaherty’s track record (I, of course, mean the Income Trust debacle), he’s very much capable of doing something drastic.

I’ve been a nervous wreck trying to decide if it’s the time to sell our condo. Real estate agent promos tell me I should sell now!

Future potential negatives for the Canadian, and in particular Toronto, real estate are:

• Property taxes in Toronto are set to increase soon.
• Then we have that stupid HST this summer – instead of 5% people will be paying 13% on closing and legal fees. Not to mention a reduction in disposable income due to all these extra levies and taxes.
• Interest rates, supposed to increase this summer.

By the way, did you notice, they’re heavily advertising government tax relief programs? I see what they’re doing though! Instead of waiting for the income tax revenue (which would probably be lower this year), they will now take their share “on the spot”. You won’t have a choice but to pay.

They end up looking ‘kind of’ good because of the temporary income tax cuts, yet they get to eat their tax pie thanks to the HST.

I know I’m over-simplifying.

Ok, let’s assume they really raise the minimum downpayment or decrease the amortization period. Wouldn’t it mean that people would buy smaller, more affordable units?

What are the signs of a real estate bubble? Everyone says it’s a bubble, and sentiment-wise, I don’t think bubbles are that obvious, right? Or have people wisened up after the US real estate crash?

I need some input. If you were patient enough to read this, please take a minute to voice your opinion. Is Canadian real estate in a bubble? Why or why not? And what would happen if there was another “Flaherty massacre”?

The post Ottawa Considers Making It Harder to Buy a Home appeared first on Phantasmix.com.

And this is from the US:

a bit outdated

In Canada, we will probably have the same but with a bit of a delay.

I squint just thinking about another potential “double dip” in the economy. Lots of people around me are getting that glint of hope in their eyes again, work is starting to pick up. Would hate to see these “green shoots” destroyed by the second wave of mortgage defaults.

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Toronto Real Estate Sales UP 17%

GTA Realtors report December resale housing market data.

Greater Toronto Realtors reported 87,308 MLS® transactions in 2009 – a 17 per cent increase over 2008. This result included 5,541 sales in December. The 2009 result was in line with the healthy levels of sales experienced between 2004 and 2006, but lower than the record of 93,193 set in 2007.

Royal LePage forecasts market for 2010

Canadian real estate market to continue strong gains in the first half of 2010 with demand and supply finding balance in the second half of the year.

Canada’s residential real estate market is forecast to remain unusually strong through the first half of 2010 as economic conditions across the country improve and the stimulus impact of low interest rates continues to stoke demand, according to today’s Royal LePage House Price Survey and Market Survey Forecast. As confidence in the recovery builds in early 2010, increases in average house price levels and overall market activity are expected to continue. The gradual erosion of affordability driven by higher house prices and the expected late-year modest upward movement of interest rates, together with an improvement in listings supply as confidence improves, are expected to bring the market back into balance in the second half of the year, when home price increases are expected to moderate.

Source: Real Estate Intelligence

Canadians are generally quite conservative, so when the crisis hit in the States in 2008, we (collectively) just hunkered down and refused to sell or buy. Everything came to a stand-still. In addition to the American financial problems, we’ve had about 1.5 years of increasing interest rates. So, overall demand for properties had been dropping at that time.

Come summer 2009 however, and like my friends like to say, it was “the perfect storm” – low interest rates, pent up demand and realization that things aren’t that bad (at least yet, and at least in Canada).

Agents are still saying that there’s very little on the market in the Toronto core. Property values in some areas in Ontario have increased 40% (!, Pickering) in the last year. Not my area, thankfully. I’d be selling fast if that happened here. Sounds like a bubble.

I got a letter today from an agent specializing in downtown condo sales. The letter stated that there haven’t been any units for sale in our building in over 3 months! We constantly get calls from agents saying they have buyers interested in this area.

It may speak more about desirability of this particular building (certainly, gives me a warm and fuzzy feeling) but may also be an indication of the overall state of the market. Still not much for sale, at least downtown Toronto. Yes, there’s a lot of new developments but most aren’t due until summer 2011 and later. Not to mention the registration process, those units won’t go on sale until 2012.

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Canada’s resale housing market for July posted the largest year-over-year gain in two years, with Western homebuyers leading the way, according to statistics released Friday by The Canadian Real Estate Association. For the first time on record, sales of existing homes climbed to more than 50,000 units for July…

Demand is rebounding sharply in some of Canada’s priciest housing markets, skewing the national average price upward, with the average price rising 7.6 per cent from one year ago to $326,832.

Source: Toronto Real Estate Blog

Toronto real-life anecdote:
A friend of mine sold a condo this July for quite a bit more than what he paid for it 2 years ago.

Seems now is the perfect storm of low interest rates, pent up demand from winter (people got scared by the crisis/recession talk and weren’t willing to sell at firesale prices) and still, very few listings, especially downtown.

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Apparently, the banks can really do it and in fact they had done it in the 80’s, though selectively. I never read that fine print of our mortgage, but I hear that this clause is there.

Anyway, so this happens, and obviously most people can’t pay what they owe, so they start listing their properties for sale and there’s a glut of properties and prices are dropping. How many people can really pay for real estate in cash? Very few. So the prices are dropping, and it’s pretty much impossible to sell the place and pay the bank so the only thing we can do is leave.

That scared the hell out of me because recently I started thinking of our condo ‘equity’ as part of our net worth. Not for lines of credit or whatever, just it’s nice to think that should we sell the place we’ll have an X amount of money in our pocket. If the above scenario plays out, the only money we’ll realistically have is the money in the bank.

It’s probably an unlikely scenario in Canada … at the moment (knock on wood), but always keep in mind that this is a fragile system, as we’re observing the U.S. real estate market.

This would be an easy way to completely decimate the middle class, by the way.

Moral of the story – having cash is nice, the more the better.

But I have another – waking – nightmare related to hoarding cash. Will tell all about it in part 2.

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