“My friend told me…”

Toronto Condos Lofts and Real Estate by Yossi KaplanWith significant upwards momentum in real-estate pricing especially this year marking a phenomenal increase in condo values, clients often ask me these two questions: “my friend told me the market is going to go under” and “my friend told me that it’s better to buy a house then a condo”.

So lets look at these two:

The first question is a polite version of “My father told me abut the 1990’s Bubble Burst – will it happen again? prices are sooooo high!”. So here is what you want to look for in a market: is it healthy? how many transactions are occurring? what is the source of the transactions? why are people buying and selling? where are they from? who are they? what kind of financing they have? what kind of debt load are they taking? (email me if you want the answers)

And to qualify the second issue, i.e. “do condos hold their values like houses” research the following: compare similar price brackets and similar locations; compare appreciations over periods past 1-5 years; compare the maintenance costs; deduct house maintenance from value; deduct CHMC costs if you would have to use it (from estimated profits); and don’t compare a grand-Victorian to a 500 sq. ft. condo – it’s just not the same category. If you do, I’ll tell you that a Smart Car and a GM Truck are also comparable.

My point is, never panic, avoid rumors and always look at the facts: “my friend told me so” is NOT a fact – it’s a rumor. Research the area and make an intelligent decision based on facts and expert knowledge (that’s me), then continue there.

For more information email at UrbanRealtyToronto@gmail.com

Keywords: Toronto Condos and Lofts, Toronto Housing Prices, selling and buying Toronto real-estate.

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