Is Toronto's skyrocketing price per square foot unsustainable? Are buyers being kept out of the market? Will an interest rate shift (or doubling) eliminate you from the market? How will others fare?
Manhattan Condo Listings Snapshot
|Size (ft²)||$ per ft²||Price|
Medians for listings from past 60 days from StreetEasy data. Excludes some extraordinary properties. No representation is made as to the accuracy....
How is the American market dealing with these issues? Has New York City's Value Crashed and Burned? Their Population numbers at 10.5 MM compared to Toronto at 2.5 MM plus our suburbs of Mississauga, Vaughan and Markham. URL to enlarged Image Its worth the Look, See if you can find a landmark in the before and after photo... Some cities in the United States are approaching 14% unemployment rates with an average exceeding 10% nationally.
But we Live in a different Country, With a different banking system, Without Mortgage Interest deductibility. Yes, Torontonians are still buying houses and condos and we are firmly in the grip of a Seller's Market. A market does not become or change over night. It is not a light switch that is flipped from one extreme to the other. It requires time, input, evolution, activity and transactions to develop a pattern that is discernible. The only pattern we can predict is a historic trend. What was before.
The extra factor never dealt with in all this rhetoric is Reproduction Cost New. This is a very simple concept from Accounting and Appraisal. If you built this today, How much would it cost? The construction workmen, the building materials, concrete to tile and flooring plus plumbing, pipe and fixtures, the architects, the planners, the City's portion of levy and assessments, Cranes, Advertising, insurance, financing and the never ending... disputed value of a building lot within the Toronto City limits. OH, and what amenities are included.
If we move (I Hope) to a more Balanced Market that would be ideal. Prices would stabilize and finally everyone would catch their breath. But How does that change the cost of Building it today. I recently came across an ad for a Luxury condo on the waterfront boasting 1031 square feet overlooking the water asking 369K Thats $360 per square foot! Whats the catch? Ahhhh, It's in Midland on Georgian Bay. But the construction cost would the same.
To reexamine the price per square foot debate, in the west end of the City, condos are indeed available at/ or around $400 per square foot. Downtown Toronto has seen $650 psf for units that have a view of the water and one parking. And I understand the prices for affluence are moving nearer to $1,000 per square foot, the higher and larger you go.
So we can debate, we can argue, we can wait and see or you can decide to debate and argue with me as we take this shopportunity for you to find the perfect place in Toronto west. The HST will be introduced in July that may very well shake things up. RE/MAX economic outlook 2010 makes a modest price and activity increase of 2%.
What do you think?