Toronto Enjoying Growth in Spite of the
Real Estate Crash

Not all areas of the country are in the same situation with the Real Estate market crash. While the news is rife with increasing numbers of foreclosures and defaults on mortgage payments, there are cities that are experiencing a rise in home prices. However, this is likely to be short-lived as the effects of the recession reach these areas. Cities such a Provo, Utah enjoyed the same level of sales in homes until recently and now there is a higher than usual number of homes on the market with no buyers in sight.

The Real Estate market first started to slide downwards in 2006 in a few areas of the country. At first this was disregarded as being confined to these areas and was not expected to hit the rest of the country or the world in the way that it did. This was because while a few areas were encountering drastic decreases in home prices other areas, such as Provo enjoyed an increase in the price of homes to the tune of 14%.

The market that was once hot has experienced a rapid cool down. Homeowners wishing to sell their homes quickly must use creative tactics in order to effect a sale and for the asking price they have set. Buyers are looking for concessions and unless they get what they want they are willing to walk away from a sale. This is because of the glut of homes on the market. A home that would have sold within a week a few years ago now sits on the market for months on end without any interest from prospective buyers. Sellers are finding that in order to sell their properties quickly they have to slash the prices by tens of thousands of dollars and often try to save money by not working with a real estate agent. Many of the advertisements are for buyers without agents as well.

Even in areas where the Real Estate market is not suffering in the same way as other parts of the country, homeowners are seeing a drop in the house prices. The values are not rising at the same rate as they once did. Rapid sales of homes on the market is a thing of the past and buyers are finding that doors that were once open to them for financing are now closed due to the tighter lending restrictions that lenders have out in place. When there are fewer buyers who can obtain mortgages it makes it very difficult to sell homes.

In areas where the economy is thriving, such as in Utah, the Real Estate market is experiencing a slump. Sales are not taking place overnight as they once did and houses that would have been snapped up quickly are languishing on the market. Toronto is another example of a city where the economy has not been affected by the real estate crash, but even here prices are not rising as quickly as they did in the past year. High rates of foreclosures are also starting to creep into the market in Toronto and Utah.

Experts do predict that Toronto is one of the cities in the nation that will not feel the effects of the Real Estate market crash as deeply as other parts of the country. The rental sector remains strong in this city and even though house prices have fallen, they are realistic. The number of houses on the market is higher than usual, but is nowhere near what it is in other cities.

The main reason for the continuing Real Estate market in Toronto and in other Washington state cities is that the state enacted a Growth Management Plan. The result of this plan was that there was a limit placed on the number of houses, condos and apartment buildings that could be constructed. In effect, this state did not go through the construction boom of 2005 and 2006 in the same way as other states, such as Florida and California and so is not suffering in the same manner today.
The Growth Management Plan, while probably not popular at first, has turned out to be advantageous for the state. Today there are no unfinished projects or projects left vacant because the builders couldn’t find buyers or renters.

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