Hilts says the gap between where prices are and where he estimates they should be is largely a measure of speculative activity. The price growth since 2007 has been strong, he notes, while the economy has been pretty slow over that time. The 20 per cent estimate hasn't changed in the past few years, he adds, because demand has also risen. Most of the major markets in Canada began deviating from the long-time trend in about 2006, he says. To arrive at that number, he looks at long-term economic fundamentals such as income growth, population growth, the rate of unemployment and housing starts. Hilts, a director in the firm's residential mortgage-backed securities group, believes the national real estate market is overvalued by about 20 per cent. New York-based Stefan Hilts analyzes Canada's housing market for Fitch Ratings. Now it has crunched five years worth of numbers and found that between 20, homes sold for $18,650 higher in May than the average for the calendar year.Ī typical house in Toronto sells in 21 days during the spring market so TheRedPin figures that listing May 1 gives sellers the optimal amount of time to make a sale. Earlier this year TheRedPin pegged the third Tuesday in January as the cheapest day of the year to buy a house. Meanwhile, the real estate brokerage has deemed May 1 the best day to list a home for sale. Some areas have seen jumps because smaller houses are being torn down and replaced with larger ones.
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