June 2021 RSS Feed

The May market stats were released by TRREB last week, and as anticipated the Toronto housing market is starting to see a cool down after a red hot start to 2021.

During May, 11,951 homes were sold in the area, down from 13,663 in April. This represents a 13% decrease compared to the previous month.

Despite the month-over-month decrease, home sales in Toronto increased by 4,594 compared to the same time period last year.

As expressed in previous market updates, the year-over-year increases are not surprising since it was around this time last year that the market was on pause during the COVID-19 health crisis.

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May is typically the strongest month for Toronto real estate, but considering…

A housing bubble occurs when there is a rapid increase in home prices at an unstable rate.

Under healthy conditions, homeowners continue to earn equity over time, sellers can make a profit on resale, and buyers can still afford to get into the market. But in a housing bubble, a sudden price decrease can result in many owners holding negative equity (a mortgage debt higher than the value of the property).

Homebuyers who purchased a home during a housing bubble likely paid more than the property is worth. Over time, the property will rebound back to its true value and return to positive growth. But those who purchased a home and are now forced to sell will come up short on resale.

For example, someone who purchased at peak market prices,…