Not factoring what happens or doesn't happen in China January or February 2024 is the time to buy. Everything hinges on what happens to real estate in China in the interim.😮
@@parkerbohnn I gotta say China factor is serious but it has been there for over two decades. The chance of US recession I believe is much more crucial
@@hoolala35 America can't get a real recession with money printing still going on and no QT and the Fed funds rate is so much lower than inflation they'll get runaway inflation.
When a housing market declines, there is a factor you haven't touched on, which is the different affect on low value homes vs. high value homes. During the decline of the early 90's, my home with had been valued at $250K dropped to $190 K. People said; "Why would you sell when your home has dropped $60K in value?" We sold and upgraded to a home which was previously valued at $390K, which we obtained for $240K through a bank foreclosure. The replacement home had dropped $150K in value, so we netted an advantage of $90K. Today, the home is fully owned and valued at $2.4 million and I won't be parting with it in the near future.
Yes great point I tell my clients all the time, upgrade in a declining or weak market and downgrade/downsize in a rising or strong market. For the reason you stated
This is what Im trying to do at the moment. Where it was a 3-500k difference back in late 2021 and early 2022, its now reduced to a 1-200k difference. My mortgage will still be larger than what I used to have but it's an upgrade for an area, quality of life and accessibility, all of which are worth the extra $ Im about to pay
Great video, data is a powerful thing. So many videos out there have no supporting data. I completely agree real estate prices will continue to drop well into the end of 2023. Sellers if you need to sell and your greedy you’ll be getting a real wake up call. Price your house below the going market and hope for an impulsive buyer. It’s going to get much worse.
That's because they are worried about their jobs and not being busy over the next few yrs. I know of 3 agents personally that are taking on side jobs because no one is coming to view their listings....
If they could back up their advice with some hard data or evidence I would listen but it's usually just an opinion and they say something like "it can't go down" or "real estate will always go up in the long run"
The graph at 13:25 doesn't go back to the fall of 1982 which was the time to buy real estate and stocks. I bought 3 homes in December that year in Markham. I bought a bunch of 50 year strip bonds that year. It was the apex of the interest rates cycle from the Paul Volcker era. That lasted about 12 years and then the U.S. stock market turned into a three ring circus sideshow around 1994 and only got a lot worse with time. To date only the bankers in Iceland have been jailed.
When I talk to people about the 35% increase in prices in the past 2 years during the pandemic they all acted like it's par for the course. LOL. Now we are seeing 12% decline and they are panicking like this could never go lower. Every correction over corrects and breaks below the long term trend line. That trend line for Toronto is down around 2017/18 prices. On Spet 7th int rates will increase by 0.75%. And then there will be 1 more rate hike after that in the fall. Their targeting 3.75-4%. The CPI data just came in at 8.5%. Interest rates will not be dropping anytime soon. Don't buy. Great info. Thanks! I think you are very accurate with your assessment. The one thing I have noted, the impact of land transfers taxes on sellers. If they are facing a capital loss and 150-200k land transfers taxes it creates a real problem. They also are paying agents... It's a huge hit. I'm seeing sellers putting their prices low, then putting their prices where they think the value is back at the start of the year... then they lower their price a little. And nobody is biting. I saw 1 empty lot where the guy was asking 1 mil and then it changed 3 weeks later to 5.9 mil. This is near Christie Pits. LOL. What a nut.
@@jonflynn Here is the main problem I see. The huge land transfer taxes that helped fuel the prices going up are now added pain keeping people from selling. It’s like a road block. I really wonder if the govts understand what they got into when they instituted these land transfer taxes. And now the city of Toronto has jacked up the development fees for building. Why would anybody even build a home when the fees are 140-170k for developmenting, and 180-200k in land transfer costs?
I'm based in Calgary and currently looking for a house. I'm a numbers guy myself so I wanted to drop a note here to say thank you for presenting the relevant data for where things are going. You back up your perspectives with actual numbers like average sold price instead of fake arbitrary indexs like HPI made up by real estate boards. Keep up the good work.
Excellent analysis and true props to you Jon for being so candid. With this video you should have ppl knocking your door down to get your advice and work with you!
@@jonflynn All old school economics or economics 101. Well all that changed around the year 2015. Now everything and I mean everything hinges on what happens to real estate in China.
Frame this on the wall. "When the first Chinaman buys back into the Canadian real estate market that is the day to put n an offer/offers to purchase". Like I said when one Chinaman buys they all buy and if you miss the boat they can move the market quite a lot in a very short span of time meaning the window of opportunity is very short. Traditionally the Chinese are the among the last buyers in a rising market.
I live in Niagara region and will be buying back in so your advice has been extremely positive and useful. Sold at the beginning of the plandempic out of necessity. Listed March closed late August was locked into to dragged out offer then it was too late and prices overnight went nutso. Due to you I am much calmer and have a more patient plan (living with a friend). Hope you will be my agent once all 4 lines match up! Thank you again for your much invested time in analyzing the market!
Thanks Jon for your recipe. I think you're spot on. 2024 adds up to 8. 8 is a money year in numerology. I'm waiting until then. We sold at the peak. Luckily we owned another property that we could move to free and clear.
@@jonflynn completion December end of 2022. Option 1. Sell it for profit. If it doesent sell/ 2. Rent it but I will have to pay something out of pocket. With that risk is tenant not paying (hope that never happens), 3. Rent the master bedroom, rent the 2nd bedroom & live in the den. Fyi- the monthly carrying costs are higher than expected. The rate promises is- 6.1%. Any thoughts?
Very truthfull and you give your honest thoughts. Inflation to go back to normal is also likely 2 years. I am thinking 3% will be the new norm for central rates as our inflation would bottom in 2024 to a new norm. Renewals of 2020 to 2021 will be renewed in 2024 and 2025 and they will be under pressure to new normal rates. Great work and all you have said is value added.
Such an informative video! Always enjoy watching content like this. It's good to know the best opportunity is still down the line. A lot of ppl especially in gta do not realize and impatiently jump in the moment price falls. Please keep up the good work!
The prices will keep falling until the Chinese come back into the market. There might be a bull trap or suckers' bounce late this year but prices will take a hit the first quarter of 2023 as interest rates spike upwards at the beginning of the New Year in 2023.
Another way to look at the chart at 8:53 is that if you bought real estate in Ontario at ANY period between 1990-2020, you would have done alright, even if you bought at each of the market peaks. Is this run up different than the others? Who knows.
Thank you. I asked you about Montreal last week, although it's not exactly what I wanted to hear; I'm gonna continue schlepping around AirB&Bs and maybe take on a lease for awhile. I sold my house in small town Ontario at the peak of the market. If the right place comes around I'm ready. It's not fun living this way, but I'm hoping it's worth it. I'll keep you posted. Come visit sometime, I'll buy you a bagel.
I would lease for a while if I were you. Prices have just started falling there. You'll probably save yourself $100K by waiting. I'll let you know when I'm in Montreal for that bagel.
We are in the same boat here in Hamilton. Sold at the peak and are trying to move to the country now but kept losing in bidding wars. It worked in our favour! We are now renting an air B and B until the end of the year. We have four kids so it isn’t ideal at all, but watching Jon’s videos backed with all of the data really tell me that holding out will pay off big time. Best of luck to you!!! :)
@@brittanygarrard-amos7104 Thanks for this; because, well, misery loves company! 4 kids is "challenging" to say the least. I'm hoping this pays off and I wish you the best of luck as well. Jon's thoughtful analysis is keeping me hopeful.
Thank you for this data backed analysis. I’m not an economist but with the way the economy is going, the inflation rate and salaries not keeping up with it i don’t know ppl can’t see this disaster. They keep saying prices are falling but it’s still unfordable !
I just bought an investment property in Barrie. Similar houses were going for 1-1.1m back in Dec to Feb. Now it's down to 800k. It likely will drop further to $750k. But 5 years from now, it'll be back to 1-1.1m. And if that happens, I will consider it a good investment.
Good analysis. Though as an exception do what your heart tells you. If you are a first time buyer and need to buy a house to build equity ( instead of paying rent).If yiu have money then keep looking for bargains and buy your dream house at a VARIABLE RATE.. it always evens out in the long run than a fixed rate mortgage. Man its Toronto real estate prices can turn the corner any time.
It’s cheaper to rent with zero down than buy your dream home and watch it devalue over the next 1-2 years. I doubt it will be your dream home then. What data do you have to back up your advice besides emotions?
Lots of great information here. I think the 1.5 year prediction is going to be pretty accurate looking at historical data. Being from the GTA I worry that low inventory is going to be a real issue moving forward.
thanks for the comment. It seems like inventory is always an issue in GTA especially in the city but I think you see it rise in the next 12 months due to defaults etc.
I had previously heard that home starts or new inventory was one of the main factors affecting home prices. Not sure if that is still the case but low supply definitely props up the market even with rising rates. Mortgage insurance is another factor that I feel stops hosing prices from correcting naturally or significantly in Canada compared to the USA.
We have lots of supply it was just being scooped up by investors due to low interest rates and easy access to cash/equity. The mortgage insurance theory is interesting
Hi Jon, though I live in Greater Vancouver, I follow your videos as you have a very blatant view based on pure numbers, while most realtors are coaxing people to still buy. Love your honesty. Would like to hear your opinion on Fraser Valley and where it's headed. Also, I have seen this tactic of lowering price and getting multiple offers in the area I am looking to buy. This particular TH was supposed to go for 1.1M in Feb, but something went wrong and the deal did not go through. The client listed at 800K in July and it got sold in 6 days for 850K. Similar size TH in the same community listed around 900K haven't been sold in over 40 days. I think it was smart as they had to sell and move out, and buyer also got a 250K discount on a TH from Feb pricing, which isn't bad and now they have kind of set a trend, it will be difficult for others to sell over 850K especially with further interest rate hikes expected as they would know they are over paying and as you correctly said it's even costlier to pay mortgage now than was in Feb.
Looking at the Fraser Valley's numbers, they went from an average price of $1,280,000 in feb to $990,000 in july, over 22% decline and sales are pretty much half of what they were last year. They look exactly like the suburbs in Ontario. Big gains which will now result in big losses. It will be the epicentre just like many places in Ontario of the real estate crash or downturn, whatever it ends up becoming.
@@jonflynn Thanks for the response. That's my guess as well. It grew almost 50% in 2 years. While suburban GTA is almost back to July 2021, we are still far away. I m betting on further downward pressure in Fraser Valley post sept and Oct hikes.
I saved this video for future guidance. Watching this again in June 2023 to keep it fresh in mind, and I'm thinking 2024, maybe? When do you see it in today's perspective?
Still targeting 2024-2025, possibly near the end of this year if things get really crazy quick. From listening to many other people and economists it seems reasonable. I think that was in the range of what I said in the video.
some really good info. the most interesting I found were your anecdotal info: 10% with price reductions and developers selling lots. Those are further signs that things are still falling further. Anyway, Toronto condos have been listing low and using offer dates this whole time; certainly a minority but annoyingly often. now several are just listing low period, not even setting a date, just taking offers asap trying to sell. I mean if a product is listed 10% below current market value, it's still going to create a multiple offer situation, not necessarily bidding war
Me and my wife are thinking to buy our first home, I know that the interest rate is high right now. But you can’t win, interest high then homes are cheaper then when interest is low the home prices are high. Now at least it’s a buyers market, I can actually bargain with the seller. Because I don’t think I can win in a bidding war if interest is low. I will be getting a fixed rated and go through the 2-3 years, interest rate will not be keeping going up for 4-5 years. Once this passes we will be in calm waters. Also this is a good time for me and my wife, we are thinking to have a family. Paying high interest for 2-3 years out of 25 years is not that bad, if you look at the bigger picture.
If you buy right now you're buying with a combination of the highest interest rates with high home prices, even though homes prices have come down they're still very high.
Thank you so much for all the efforts and informative videos. I have a quick question! What source did you use for summarizing the 4 indicators that you mentioned in your video? Are there any other indicators that we should watch?
I usually have the sources but it was a combination of CREA for average house prices, my own research and data collection for interest rates, CBA.ca for mortgage arrears, stats can for unemployment, and tradingeconomics for the historical price index. There's probably many other indicators but I haven't researched to say for sure
If RBC is correct and we have the worst market coming up in 50 years then I will by but only if houses drop 70 to 80 percent in the GTA is that going to happen? I just don’t see BOC really raising Rates to even 5 percent we need a bottoming out of at least 7 years.
Wow you guys are getting murdered there. avg sale price down 24.5% from March peak ($821K to $619K) days to sell went from 9 in march to 27 so far in August, number of sales are just over half of what they were in march.
Hello! Thanks for all the informative content. I really enjoy your videos. I do have a question of one of those indicators. Interest rate falling - which usually pushes prices up. Why would that be a good time to buy? If interest rates are high and house prices fall (which is happening now), why would one not purchase for a lower price? Interest rate fluctuates. The initial high monthly payment maybe offset when interest rate go back down. Rather than competing in a low interest/ high house pricing market, isn't it better to do the opposite? House price would determine the transfer tax paid, and the overall interest throughout the lifetime of the property, which again will start off higher but may fall in the next 1-2 years.
When they bring interest rates back down they will be doing to help stimulate the economy because prices are low. It will take a while for prices to recover when that happens.
Thank you for this informative video. Is there a website or public information source that the general public can access in regards to defaults/foreclosures? Not sure if there is sone type of Canada wide or province by province source to keep an eye on this statistic? It seems that some of this information is difficult to access if you are not in the financial/RE industry. Thanks
The feds will be paying for my relocation to st Catherine's, will September be too early to hit near bottom ? Just like stocks, I suck at finding the bottom lol
Yes, too early in my data driven opinion. Leasing is cheaper in St. Cath right now unless you have a big downpayment, either way you'd be buying a declining asset
This is all good. Who really cares if the value of your house went "down", all the other houses have as well so what do you care? And really, if you've been saving up a down payment, suddenly it's worth more in % than before. And yes I own. I don't care if suddenly it's worth 5$ as long as all other comparable homes in the area are around 4-6$ too.
Higher int rates = higher cost of debt/mortgage even with lower house/real estate prices. Affordability may not incr much. New digital currency - central bank (controlled) digital currency (CBDC) - plus reality of job losses predicted to be perm may incr affordability over few yrs. World prob very diff by 2030. Watch digital yuan.
Jon what I have observed about the montreal and Ottawa real estate prices is that last 10 years there has been a very "natural" or gradual incease in prices compared to the GTA and Vancouver markets!. What do you think? What's your impression? As I have children in Ottawa and Montreal I would very much like some coverage. Al'so because there is very little analysis about these 2 markets.
Quebec doesn't have a lot of info on the real estate market but looking at the CREA benchmark price it has shot up significantly just like ontario, except not as extreme, going from the 300's to mid 500's but it's still a very aggressive move. I'd expect some significant cooling there. We're already starting to see it. I figure it will have a good 25-35% pull back from the peak and prices will at least come back to pre Covid levels of just under $400K. That's probably a best case scenario for sellers though
Bond yields peaked in June but inflation will take a second leg up at the very beginning of 2023. This is to counteract all the baloney leading up to the midterms and the COLA for social security in America. Inflation will fall more in America than in Canada for the rest of this year. We might see a bull trap or suckers' market bounce in Canadian real estate towards the end of this year and see another pullback in prices in the first quarter of 2023.
@@jonflynn I have family / RE investor friends out east. I am passing on your vids to them and hopefully they ring you up in regards to biz activity. Just appreciate your no bullshit , concise data style.
Great video, I was taking notes! What do you think of where we are at for rate of monthly price decline? Are we going to accelerate going forward or more of a steady decline? Keeping in mind high immigration but high interest rates at the same time.. nightmare for the rental market?
I think the rate of declines will slow but remain consistent for some time. It may take another month or so until they slow though. This is just an opinion though. The rental market will continue to do well but will collapse once buyers start getting back into the market since there’s so many rental now and vacancy rate will shoot up once it becomes cheaper to buy.
@@jonflynn The very first thing and the only to look at is real estate in China. The entire real estate market in Canada is mirroring the real estate market in China. If the real estate ponzi implodes in China contagion will spread to Canada, New Zealand, Australia and the west coast of America. Home prices will come into line with Canadian incomes if that happens. That would portend about a 65 percent drop from the peak back in February. If it goes down in China sucker money will come into the Canadian housing market from non-Chinese locals. They'll get wiped out because they bought far too early before home prices aligned with Canadian incomes.
@@maximusfuscus search the Calgary real estate board stats, they don’t give the stats like I do with decline from the peak, they do yet over year. You have to go back through their monthly releases and grab the data and calculate yourself. They use year over year numbers
Of course, trying to predict the interest rate future trajectory is difficult However, there are certain indicators that can be reasonably helpful in determining that trajectory. The recession and its consequences of unemplyment and the resulting reduced demand will reduce inflation. These factors will justify and perhaps even induce the BOC to start reversing its policy rate to fight recession. The BOC stimulation will help reducing unemployment. The govoernment also may help with some fiscal goodies to help growth. These factors combined will take care of inflation to an acceptable level for BOC, will stimulate employment and growth. This in turn will bring back to the market buyers who moved to the side line because of high rate. The high rent cost will help on that score. Also, we need to factor the geoplitical tensions in Ukraine, China and Taiwane.many high net worth individuals would leave those war zones to a safer heaven, Canada especially Toronto and vancouver are the best world destination for that capital. Also, internally and for political and economic reasons the fed and provincial government are not going to keep watching interest rate increasing and the recession causing unemployment, foreclosures and perhaps strikes and demonstrations without doing anthing to deal with the situation.
What is your opinion on the Calgary market? It seems the interest rate has much less impact on this market...I mean even I wait for another 1-2years, the price will not drop much...what do you think?
had the most recent stats in last weeks video, calgary have already dropped over 10% from the peak, sales are down too. It's on it's way down just like the rest of Canada. I think Calgary will be a great buying in a couple of years opportunity once Pierre gets in and makes it rich again.
You’re the man. Never have I seen any realtor agent can be as honest and informative as you! 1-2 years to low peak…so could be 2023-2024…
Let’s see!
Thanks for your feedback and prediction
Not factoring what happens or doesn't happen in China January or February 2024 is the time to buy. Everything hinges on what happens to real estate in China in the interim.😮
@@parkerbohnn I gotta say China factor is serious but it has been there for over two decades.
The chance of US recession I believe is much more crucial
@@hoolala35 America can't get a real recession with money printing still going on and no QT and the Fed funds rate is so much lower than inflation they'll get runaway inflation.
@@parkerbohnn
First I didn’t say us will go down to recession
Second The FED has already doing QT
When a housing market declines, there is a factor you haven't touched on, which is the different affect on low value homes vs. high value homes. During the decline of the early 90's, my home with had been valued at $250K dropped to $190 K. People said; "Why would you sell when your home has dropped $60K in value?" We sold and upgraded to a home which was previously valued at $390K, which we obtained for $240K through a bank foreclosure. The replacement home had dropped $150K in value, so we netted an advantage of $90K. Today, the home is fully owned and valued at $2.4 million and I won't be parting with it in the near future.
Yes great point I tell my clients all the time, upgrade in a declining or weak market and downgrade/downsize in a rising or strong market. For the reason you stated
@@jonflynn Down grade to what though. Even in the GTA condos are 700K, not cheap.
@@raczyk well if you sell in gta for 1.5-2 mill and downgrade to 700k . That’s the only way. Talking about people who bought back in the 90s
This is what Im trying to do at the moment. Where it was a 3-500k difference back in late 2021 and early 2022, its now reduced to a 1-200k difference. My mortgage will still be larger than what I used to have but it's an upgrade for an area, quality of life and accessibility, all of which are worth the extra $ Im about to pay
Great video, data is a powerful thing. So many videos out there have no supporting data. I completely agree real estate prices will continue to drop well into the end of 2023. Sellers if you need to sell and your greedy you’ll be getting a real wake up call. Price your house below the going market and hope for an impulsive buyer. It’s going to get much worse.
Well said!
Jon if you’re ever in Toronto I’ll be happy to buy you pints! Thanks for sharing your work
Awesome thanks, gotta be at least $12 for a pint in Toronto now?
@@jonflynn
Well worth it- I relish a good conversation! Offer is real sir
Consistent- again well presented with 100% transparency...
Thanks
It’s hard to find real estate agent nowadays telling you to hold rather than buy buy buy.
most of them say buy buy baby price going up
That's because they are worried about their jobs and not being busy over the next few yrs. I know of 3 agents personally that are taking on side jobs because no one is coming to view their listings....
If they could back up their advice with some hard data or evidence I would listen but it's usually just an opinion and they say something like "it can't go down" or "real estate will always go up in the long run"
Dorky for dorks…blah blah blah drowning in talking and clueless are following…
Thank you for your honest advice backed up by intelligent data analysis !
The graph at 13:25 doesn't go back to the fall of 1982 which was the time to buy real estate and stocks. I bought 3 homes in December that year in Markham. I bought a bunch of 50 year strip bonds that year. It was the apex of the interest rates cycle from the Paul Volcker era. That lasted about 12 years and then the U.S. stock market turned into a three ring circus sideshow around 1994 and only got a lot worse with time. To date only the bankers in Iceland have been jailed.
Thanks for your comment and info
When I talk to people about the 35% increase in prices in the past 2 years during the pandemic they all acted like it's par for the course. LOL. Now we are seeing 12% decline and they are panicking like this could never go lower. Every correction over corrects and breaks below the long term trend line. That trend line for Toronto is down around 2017/18 prices.
On Spet 7th int rates will increase by 0.75%. And then there will be 1 more rate hike after that in the fall. Their targeting 3.75-4%. The CPI data just came in at 8.5%. Interest rates will not be dropping anytime soon. Don't buy.
Great info. Thanks! I think you are very accurate with your assessment.
The one thing I have noted, the impact of land transfers taxes on sellers. If they are facing a capital loss and 150-200k land transfers taxes it creates a real problem. They also are paying agents... It's a huge hit.
I'm seeing sellers putting their prices low, then putting their prices where they think the value is back at the start of the year... then they lower their price a little. And nobody is biting. I saw 1 empty lot where the guy was asking 1 mil and then it changed 3 weeks later to 5.9 mil. This is near Christie Pits. LOL. What a nut.
We will be seeing a lot of crazy things on the way down just like we saw on the way up. Thanks for commenting .
@@jonflynn
Here is the main problem I see. The huge land transfer taxes that helped fuel the prices going up are now added pain keeping people from selling. It’s like a road block. I really wonder if the govts understand what they got into when they instituted these land transfer taxes. And now the city of Toronto has jacked up the development fees for building. Why would anybody even build a home when the fees are 140-170k for developmenting, and 180-200k in land transfer costs?
I'm based in Calgary and currently looking for a house. I'm a numbers guy myself so I wanted to drop a note here to say thank you for presenting the relevant data for where things are going. You back up your perspectives with actual numbers like average sold price instead of fake arbitrary indexs like HPI made up by real estate boards. Keep up the good work.
Thanks for the feedback, much appreciated.
Totally agree!! Great work ‼️
Excellent analysis and true props to you Jon for being so candid. With this video you should have ppl knocking your door down to get your advice and work with you!
I appreciate that!
@@jonflynn All old school economics or economics 101. Well all that changed around the year 2015. Now everything and I mean everything hinges on what happens to real estate in China.
Spot on. Perfect analysis on the indicators and the probable timeline. Thanks a lot.
You're very welcome
Frame this on the wall. "When the first Chinaman buys back into the Canadian real estate market that is the day to put n an offer/offers to purchase". Like I said when one Chinaman buys they all buy and if you miss the boat they can move the market quite a lot in a very short span of time meaning the window of opportunity is very short. Traditionally the Chinese are the among the last buyers in a rising market.
Complete honesty from a Realtor...thank you
I appreciate that!
Thanks for the good info. I have seen price reductions here in Cornwall and inventory has tripled since early spring.
thanks for sharing
I live in Niagara region and will be buying back in so your advice has been extremely positive and useful. Sold at the beginning of the plandempic out of necessity. Listed March closed late August was locked into to dragged out offer then it was too late and prices overnight went nutso. Due to you I am much calmer and have a more patient plan (living with a friend). Hope you will be my agent once all 4 lines match up! Thank you again for your much invested time in analyzing the market!
Thanks for the comment and would love to help you buy once the timing is right.
Best real estate guidance video ever, thanks Jon!
Thanks for watching
Thank you for talking about Montreal! I’ve been looking for stats and someone knowledgeable to speak on the subject
Glad it was helpful!
Always thorough in your research Jon and thanks for talking about what is happening in the local market. Please keep up with the great content!
Thanks will do
Thanks Jon for your recipe. I think you're spot on. 2024 adds up to 8. 8 is a money year in numerology. I'm waiting until then. We sold at the peak. Luckily we owned another property that we could move to free and clear.
Thanks for the feedback, interesting to hear about the money year in 2024
What if I locked into a pre-construction condo (mid town toronto) and I have to close on a higher rate now. Keep it or try to sell it?
depends on your situation, are you moving in? when did you sign the contract? completion?
@@jonflynn completion December end of 2022. Option 1. Sell it for profit. If it doesent sell/ 2. Rent it but I will have to pay something out of pocket. With that risk is tenant not paying (hope that never happens), 3. Rent the master bedroom, rent the 2nd bedroom & live in the den. Fyi- the monthly carrying costs are higher than expected. The rate promises is- 6.1%.
Any thoughts?
This guy puts out a video, i put whatever i'm doing down and watch it.
Thanks
This is a very interesting angle and set of analysis. Well done and many thanks!
Thanks
Your work is phenomenal!!!!!! So big thanks for doing this!
Thanks, I won't stop don't worry
Great show! Thanks for your ideas and info!!
Thanks for watching!
Great information and well researched. Thanks very much...!!
Thanks
Very truthfull and you give your honest thoughts. Inflation to go back to normal is also likely 2 years. I am thinking 3% will be the new norm for central rates as our inflation would bottom in 2024 to a new norm. Renewals of 2020 to 2021 will be renewed in 2024 and 2025 and they will be under pressure to new normal rates. Great work and all you have said is value added.
Thanks for watching and great info
I am moving to BC, Canada from the Uk. Extremely helpful videos, thanks Flynn. Really hope you cover BC Fraser valley area. Thanks
thanks for watching
Such an informative video! Always enjoy watching content like this.
It's good to know the best opportunity is still down the line. A lot of ppl especially in gta do not realize and impatiently jump in the moment price falls.
Please keep up the good work!
thanks for the comment
The prices will keep falling until the Chinese come back into the market. There might be a bull trap or suckers' bounce late this year but prices will take a hit the first quarter of 2023 as interest rates spike upwards at the beginning of the New Year in 2023.
Another way to look at the chart at 8:53 is that if you bought real estate in Ontario at ANY period between 1990-2020, you would have done alright, even if you bought at each of the market peaks. Is this run up different than the others? Who knows.
Great info with data, thank you very much for sharing it.
Glad it was helpful!
Thank you. I asked you about Montreal last week, although it's not exactly what I wanted to hear; I'm gonna continue schlepping around AirB&Bs and maybe take on a lease for awhile. I sold my house in small town Ontario at the peak of the market. If the right place comes around I'm ready. It's not fun living this way, but I'm hoping it's worth it. I'll keep you posted. Come visit sometime, I'll buy you a bagel.
I would lease for a while if I were you. Prices have just started falling there. You'll probably save yourself $100K by waiting. I'll let you know when I'm in Montreal for that bagel.
We are in the same boat here in Hamilton. Sold at the peak and are trying to move to the country now but kept losing in bidding wars. It worked in our favour! We are now renting an air B and B until the end of the year. We have four kids so it isn’t ideal at all, but watching Jon’s videos backed with all of the data really tell me that holding out will pay off big time. Best of luck to you!!! :)
@@brittanygarrard-amos7104 Thanks for this; because, well, misery loves company! 4 kids is "challenging" to say the least. I'm hoping this pays off and I wish you the best of luck as well. Jon's thoughtful analysis is keeping me hopeful.
Montreal inventory is low so can't be too picky
@@lapraxi yeah. But still overpriced i find
Your videos have so much value. Thank you so much!
You're so welcome!
I would buy either January or February 2024 subject to change. Will update if necessary.
Looks like a good target for now
Thank you for this data backed analysis. I’m not an economist but with the way the economy is going, the inflation rate and salaries not keeping up with it i don’t know ppl can’t see this disaster. They keep saying prices are falling but it’s still unfordable !
they will keep falling
Always looking forward to your videos, Jon. Thanks for the great content. As an eventual first time buyer, I will continue to wait!
Smart choice, thanks for watching
Thanks for the honest and amazing info .
My pleasure!
excellent analysis Jon, backed by stats.
Thanks
Great research. Your a gem. Thank you for always doing my homework.
My pleasure!
Interesting that builders are selling off lots. In the Edmonton region, they are offering agents bonus commission right now.
yep, everytime the market slows, builders offer incentives.
I just bought an investment property in Barrie. Similar houses were going for 1-1.1m back in Dec to Feb. Now it's down to 800k. It likely will drop further to $750k. But 5 years from now, it'll be back to 1-1.1m. And if that happens, I will consider it a good investment.
Thanks for sharing
Good analysis. Though as an exception do what your heart tells you. If you are a first time buyer and need to buy a house to build equity ( instead of paying rent).If yiu have money then keep looking for bargains and buy your dream house at a VARIABLE RATE.. it always evens out in the long run than a fixed rate mortgage. Man its Toronto real estate prices can turn the corner any time.
It’s cheaper to rent with zero down than buy your dream home and watch it devalue over the next 1-2 years. I doubt it will be your dream home then. What data do you have to back up your advice besides emotions?
Lots of great information here. I think the 1.5 year prediction is going to be pretty accurate looking at historical data. Being from the GTA I worry that low inventory is going to be a real issue moving forward.
thanks for the comment. It seems like inventory is always an issue in GTA especially in the city but I think you see it rise in the next 12 months due to defaults etc.
I had previously heard that home starts or new inventory was one of the main factors affecting home prices. Not sure if that is still the case but low supply definitely props up the market even with rising rates. Mortgage insurance is another factor that I feel stops hosing prices from correcting naturally or significantly in Canada compared to the USA.
We have lots of supply it was just being scooped up by investors due to low interest rates and easy access to cash/equity. The mortgage insurance theory is interesting
Amazing information all in one video.
thanks
That is great logical thinking when all 4 stars get allied it’s time to buy✅
Thanks
I really appreciate your videos. Thank you mr Flynn!
no problem, thanks
Hi Jon, though I live in Greater Vancouver, I follow your videos as you have a very blatant view based on pure numbers, while most realtors are coaxing people to still buy. Love your honesty. Would like to hear your opinion on Fraser Valley and where it's headed. Also, I have seen this tactic of lowering price and getting multiple offers in the area I am looking to buy. This particular TH was supposed to go for 1.1M in Feb, but something went wrong and the deal did not go through. The client listed at 800K in July and it got sold in 6 days for 850K. Similar size TH in the same community listed around 900K haven't been sold in over 40 days. I think it was smart as they had to sell and move out, and buyer also got a 250K discount on a TH from Feb pricing, which isn't bad and now they have kind of set a trend, it will be difficult for others to sell over 850K especially with further interest rate hikes expected as they would know they are over paying and as you correctly said it's even costlier to pay mortgage now than was in Feb.
Looking at the Fraser Valley's numbers, they went from an average price of $1,280,000 in feb to $990,000 in july, over 22% decline and sales are pretty much half of what they were last year. They look exactly like the suburbs in Ontario. Big gains which will now result in big losses. It will be the epicentre just like many places in Ontario of the real estate crash or downturn, whatever it ends up becoming.
@@jonflynn Thanks for the response. That's my guess as well. It grew almost 50% in 2 years. While suburban GTA is almost back to July 2021, we are still far away. I m betting on further downward pressure in Fraser Valley post sept and Oct hikes.
Thank you for covering montreal ! I keep hearing ppl say “but in quebec its different, prices wont go down cuz they already low !” lol
No problem!!
@@ashk5488 yeah realtors and delusional home owners lol
great video and very insightful Jon!
Much appreciated!
Thanks for the information, great video !
Thanks
thank you for your effort and analysis, very interesting I like your video
Glad you liked it!
Thank you for covering Halifax Jon :)
my pleasure
I saved this video for future guidance. Watching this again in June 2023 to keep it fresh in mind, and I'm thinking 2024, maybe? When do you see it in today's perspective?
Still targeting 2024-2025, possibly near the end of this year if things get really crazy quick. From listening to many other people and economists it seems reasonable. I think that was in the range of what I said in the video.
Any where in the data needs to show if negative gdp quarters affect the numbers.
That would be tied to the one graph that has the recessions highlighted in grey
Very educational and useful! Thank you
thanks for watching
Thank you for your information I just subscribed
Thanks for the sub!
some really good info. the most interesting I found were your anecdotal info: 10% with price reductions and developers selling lots. Those are further signs that things are still falling further. Anyway, Toronto condos have been listing low and using offer dates this whole time; certainly a minority but annoyingly often. now several are just listing low period, not even setting a date, just taking offers asap trying to sell. I mean if a product is listed 10% below current market value, it's still going to create a multiple offer situation, not necessarily bidding war
It’s a dynamic and fast changing market.
Thanks for the great video John. Is there anyway you can super impose all 4 data / graphs in one single chart?
Thank you.
Wanted to do it this week but not enough time to figure it out. I will get it done though
Also alot of low list prices in Hamilton with many bid wars .. but on lower priced homes aka 600k or so
yeah people think it's a deal now, just like gas at $1.55/litre
When do you predict the prices will bottom in B.C.? Thanks so much
same timeline as the rest of the country give or take a few months
Great Info keep it coming. Maybe something about cottage country?
Great suggestion!
Thank you for this! really good look at the data
Glad you like it!
Me and my wife are thinking to buy our first home, I know that the interest rate is high right now. But you can’t win, interest high then homes are cheaper then when interest is low the home prices are high. Now at least it’s a buyers market, I can actually bargain with the seller. Because I don’t think I can win in a bidding war if interest is low. I will be getting a fixed rated and go through the 2-3 years, interest rate will not be keeping going up for 4-5 years. Once this passes we will be in calm waters. Also this is a good time for me and my wife, we are thinking to have a family.
Paying high interest for 2-3 years out of 25 years is not that bad, if you look at the bigger picture.
If you buy right now you're buying with a combination of the highest interest rates with high home prices, even though homes prices have come down they're still very high.
Hows the market in Ottawa and Kanata?
you're sales are way down and average price has decreased about 15-16% from the peak in February. Headed the same way as the rest of the country
Thank you so much for all the efforts and informative videos. I have a quick question!
What source did you use for summarizing the 4 indicators that you mentioned in your video? Are there any other indicators that we should watch?
I usually have the sources but it was a combination of CREA for average house prices, my own research and data collection for interest rates, CBA.ca for mortgage arrears, stats can for unemployment, and tradingeconomics for the historical price index. There's probably many other indicators but I haven't researched to say for sure
If RBC is correct and we have the worst market coming up in 50 years then I will by but only if houses drop 70 to 80 percent in the GTA is that going to happen? I just don’t see BOC really raising Rates to even 5 percent we need a bottoming out of at least 7 years.
Thanks for sharing your comment
Can you provide some stats for London Ontario please…Thanks
Wow you guys are getting murdered there. avg sale price down 24.5% from March peak ($821K to $619K) days to sell went from 9 in march to 27 so far in August, number of sales are just over half of what they were in march.
Thanks sir for the valuable advice
Always welcome
Hello! Thanks for all the informative content. I really enjoy your videos. I do have a question of one of those indicators. Interest rate falling - which usually pushes prices up. Why would that be a good time to buy? If interest rates are high and house prices fall (which is happening now), why would one not purchase for a lower price? Interest rate fluctuates. The initial high monthly payment maybe offset when interest rate go back down. Rather than competing in a low interest/ high house pricing market, isn't it better to do the opposite? House price would determine the transfer tax paid, and the overall interest throughout the lifetime of the property, which again will start off higher but may fall in the next 1-2 years.
When they bring interest rates back down they will be doing to help stimulate the economy because prices are low. It will take a while for prices to recover when that happens.
@@jonflynn You are right. From my personal experience, you have a maximum of 6-9 months to use those bridges, before the stampede.
Thank you for this very informative video!
Glad it was helpful!
Hi Jon, can you pls analyze the current inventory level? Why it is still low?
Just the facts, Bravo !
Thanks
Thank you for this informative video. Is there a website or public information source that the general public can access in regards to defaults/foreclosures? Not sure if there is sone type of Canada wide or province by province source to keep an eye on this statistic? It seems that some of this information is difficult to access if you are not in the financial/RE industry. Thanks
cba.ca/mortgages-in-arrears
Any insight/data on Durham Region. We had ridiculous gains here in Durham (Oshawa) and it was quite depressing to be honest.
Thank you! This is an awesome analysis. I just wonder how would everything that has happened with the pandemic affect this cycle. Opinions?
yes definitely, it made it worse by inflating the market even more with continued super low interest rates and lots of money printing
thanks for your valuable ,honest info
Thanks for watching.
Can you please update this video for 2024?
Very true information, Thank you sir
thanks
Great insights. 👍
Thanks
I love this guy! Very impartial opinion, backed up by credible statistics.
Thanks
How do wars change these prices?
haven't looked into that, but I'm guessing as it's not in our country it shouldn't have too much impact
The feds will be paying for my relocation to st Catherine's, will September be too early to hit near bottom ? Just like stocks, I suck at finding the bottom lol
Yes, too early in my data driven opinion. Leasing is cheaper in St. Cath right now unless you have a big downpayment, either way you'd be buying a declining asset
This is all good. Who really cares if the value of your house went "down", all the other houses have as well so what do you care? And really, if you've been saving up a down payment, suddenly it's worth more in % than before.
And yes I own. I don't care if suddenly it's worth 5$ as long as all other comparable homes in the area are around 4-6$ too.
as long as you don't owe $10
Such positive news. Great to see prices falling. Putting a roof over our head was never meant be so onerous.
I agree
Higher int rates = higher cost of debt/mortgage even with lower house/real estate prices. Affordability may not incr much. New digital currency - central bank (controlled) digital currency (CBDC) - plus reality of job losses predicted to be perm may incr affordability over few yrs. World prob very diff by 2030. Watch digital yuan.
This is amazing Jon
Thanks
Any data on PEI, specifically the Charlottetown area?
I'm guessing they lag behind like NS and NB. CREA might have some info, I'll look into it at some point
Jon,
That video deserved an A or even A+ if it was a paper/ assignment submitted in an MBA course .
Awesome thanks
We look forward to you keeping an eye on all 4 parameters for all of us who follow you . 😊
Jon what I have observed about the montreal and Ottawa real estate prices is that last 10 years there has been a very "natural" or gradual incease in prices compared to the GTA and Vancouver markets!. What do you think? What's your impression? As I have children in Ottawa and Montreal I would very much like some coverage. Al'so because there is very little analysis about these 2 markets.
Quebec doesn't have a lot of info on the real estate market but looking at the CREA benchmark price it has shot up significantly just like ontario, except not as extreme, going from the 300's to mid 500's but it's still a very aggressive move. I'd expect some significant cooling there. We're already starting to see it. I figure it will have a good 25-35% pull back from the peak and prices will at least come back to pre Covid levels of just under $400K. That's probably a best case scenario for sellers though
Bond yields peaked in June but inflation will take a second leg up at the very beginning of 2023. This is to counteract all the baloney leading up to the midterms and the COLA for social security in America. Inflation will fall more in America than in Canada for the rest of this year. We might see a bull trap or suckers' market bounce in Canadian real estate towards the end of this year and see another pullback in prices in the first quarter of 2023.
Great points and thanks for sharing
Some of the lot/vacant land prices out in the Niagara region are absurd. Good luck to those sellers ... -_-
I agree
You keep speaking the truth. Are you sure you are an agent? Nice video
Luckily I won’t have any buyers hating my guts for telling them to buy at the top of the market.
@@jonflynn I have family / RE investor friends out east. I am passing on your vids to them and hopefully they ring you up in regards to biz activity. Just appreciate your no bullshit , concise data style.
You’re the man ,thank you .real legit agent.
I appreciate that
I just sold high in Kelowna and low in Alberta.
good job.
Great video, I was taking notes! What do you think of where we are at for rate of monthly price decline? Are we going to accelerate going forward or more of a steady decline? Keeping in mind high immigration but high interest rates at the same time.. nightmare for the rental market?
I think the rate of declines will slow but remain consistent for some time. It may take another month or so until they slow though. This is just an opinion though. The rental market will continue to do well but will collapse once buyers start getting back into the market since there’s so many rental now and vacancy rate will shoot up once it becomes cheaper to buy.
@@jonflynn The very first thing and the only to look at is real estate in China. The entire real estate market in Canada is mirroring the real estate market in China. If the real estate ponzi implodes in China contagion will spread to Canada, New Zealand, Australia and the west coast of America. Home prices will come into line with Canadian incomes if that happens. That would portend about a 65 percent drop from the peak back in February. If it goes down in China sucker money will come into the Canadian housing market from non-Chinese locals. They'll get wiped out because they bought far too early before home prices aligned with Canadian incomes.
I saw 100 homes in my area come off the market and instead put it up for rent. Terminate listing and then rent 👏🏾
all part of the cycle
Prices not moving in Calgary. What gives?
Average sale price is down 10% from feb high and will be continuing to decline
@@jonflynn - Thanks, where can I find that info? Great videos.
@@maximusfuscus search the Calgary real estate board stats, they don’t give the stats like I do with decline from the peak, they do yet over year. You have to go back through their monthly releases and grab the data and calculate yourself. They use year over year numbers
Thanks a lot!
You're welcome!
Of course, trying to predict the interest rate future trajectory is difficult However, there are certain indicators that can be reasonably helpful in determining that trajectory. The recession and its consequences of unemplyment and the resulting reduced demand will reduce inflation. These factors will justify and perhaps even induce the BOC to start reversing its policy rate to fight recession. The BOC stimulation will help reducing unemployment. The govoernment also may help with some fiscal goodies to help growth. These factors combined will take care of inflation to an acceptable level for BOC, will stimulate employment and growth. This in turn will bring back to the market buyers who moved to the side line because of high rate. The high rent cost will help on that score. Also, we need to factor the geoplitical tensions in Ukraine, China and Taiwane.many high net worth individuals would leave those war zones to a safer heaven, Canada especially Toronto and vancouver are the best world destination for that capital. Also, internally and for political and economic reasons the fed and provincial government are not going to keep watching interest rate increasing and the recession causing unemployment, foreclosures and perhaps strikes and demonstrations without doing anthing to deal with the situation.
all great points, it's a big cycle. Thanks for the comment
What is your opinion on the Calgary market? It seems the interest rate has much less impact on this market...I mean even I wait for another 1-2years, the price will not drop much...what do you think?
had the most recent stats in last weeks video, calgary have already dropped over 10% from the peak, sales are down too. It's on it's way down just like the rest of Canada. I think Calgary will be a great buying in a couple of years opportunity once Pierre gets in and makes it rich again.
Thanks mate for Montreal
Any time!
Very honest opinion.
Thanks, I have no hidden agenda