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Mississauga Resale Home Prices show relative stability

The average price of a resale home in the GTA for the month of February was $361,305 which, although down by 5% versus the average February 2008 price of $382,048, should be highly reassuring to homeowners amid the current global economic environment. Resale prices in the GTA have clearly not displayed the massive declines that many U.S. major markets have witnessed, a fact which is a testament to the relative strength of our economy and the relative strength of our financial institutions. In fact, the year-over-year decline in median price was just 3% ($312,900 versus $324,000). Many analysts believe that the median price is a superior indicator to the average price in terms of highlighting overall price trends as it tends to do a slightly better job of factoring out the impact of sales mix differences on a year-to-year basis.

 As reflected in our monthly graph of average resale home prices across the GTA, attached, prices went up substantially during February, while remaining mid-way between 2006 and 2007 levels. This holds little surprise, as prices usually escalate in February.  What remains to be seen is whether they will continue to hold for another month or two before trending downwards for the rest of the year.  That is what I would anticipate, as it is the usual recession market pattern… a fairly solid market for the first quarter, then a gentle slide towards December.  That leaves buyers with the question in mind… is this a GOOD TIME to be buying real estate?

 One reason for the rebound in February might have been the calming of the highly visible political fighting going on in Ottawa, and thus a reduction in Canadians’ sense of security. This factor always affects market sales… and, for a good example check the figures for last October when we had abundant political insecurity on both sides of the CAN/USA border, with two elections happening. A sharp price decline… though temporary… was the result.

  A second reason for the February increase could have been the fact that buyers are beginning to understand that this may be THE BEST TIME TO BUY IN OVER 50 YEARS.  It is an opportunity to take advantage of extremely low interest rates, a good supply of homes vs. current demand, and sellers who are willing to negotiate.  As someone said to me last week at our annual Keller Williams conference in Orlando, in a “Buyer’s Market”, buyers ought to realize that it is a GOOD TIME TO BUY.  Some are obviously beginning to understand the wisdom in that statement.

avg-price-feb-2009

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