Like many major metropolitan markets in the United States, Toronto, Canada is thriving with urban development and vertical construction.  Rising costs have priced many first time home buyers right our of the market.  Buyers with dreams of purchasing a $450,000 detached home are now revising their visions and looking up.  When I say “looking up” of course I mean vertical living with high-rise condos.  Home buyers can find more reasonable prices with condos, generally, and can have a chance to break into the market. 

Many young couples and families are having to be more realistic about their new condo or home purchases so they are not drowning in mortgage payments while trying to raise a family.  Mortgage payments and housing expenses typically should comprise only about 20% to 30% of your monthly expenses.  In many major markets like we see in the States, it can be as much as 50% or more!

This new trend or urban living has been spurred by many things.  Obviously home costs have pushed more people into the condo market.  City planners and developers have also been focusing on infill development and redevelopment of blighted city areas to improve the landscape and appeal of cities. 

Toronto, for example, has 249 projects currently being marketed or in the construction stage, representing 58,000 units, making the city the largest condo site in North America.  All of this new construction will mean that condos will advance to about 50% of the market share for housing.  

OK...so I guess we have all heard by now that the Fed lowered the rate by half a point.  This is exciting news, right?!  In the short term thsi will definitely lower some people's mortgage payments and remove personal financial strain.  Obviously, this does not solve everyone's problems but it will at least free up some money for people. 

So where does this leave the housing market?  Most think that this will not really solve any immediate problems.  One thing to keep in mind however is that many people waiting to purchase condos have been waiting for this exact news...when will the Fed lower rates?  Well, now that they have, will we see some of these condo buyers come off the "fence" and make a purchase.  Now would be the time to lock into a reasonable long term fixed rate mortgage. 

Another questions to ask is "will there be another rate cut to follow this one"?  If so, it will most definitely brings some buyers out of the woodwork...at least we hope!  How will the lending institutions react to this?  There is no doubt the housing industry will now be slightly better off than it was before, but it will be interesting to see how much positive reaction comes from the rate drop.  We should expect to see some activity fluctuation over the next month as a direct result of this news.  We are already seeing great activity in the stock market!

Let's wait and see what happens...

The global concert - on 7 continents - this past Saturday should be a wake up call to the entire population.  I started wondering if developers take into account the erosion rate of beaches and land when they build coastal condos.  When ice melts in the arctic and antarctic, sea levels rise globally.  And, if you watched the global concert, Live Earth, you'll know that Mother Earth is sick.  Should requirements be made to take in erosion rates when cities approve coastal projects?  We should also consider that the fact that we as humans don't like to act on anything unless it's presenting itself in our face.  Well, I was in Vegas this weekend and it reached 115 degrees.  That is not cold.  The ocean water in San Diego is much warmer this year than it was last year at the same time.  This thing called "Global Warming" is real.  We must face it as we are now approaching the 11th hour!

I read an article today about how a condo development in Yakima, WA was burned down. Officials are calling the fire 'suspicious' and to be honest, I have to agree with them. Construction began 7 years ago. ATF had been called in to help diagnose what started the fire. I also suspect that they'll be questioning some people affiliated with this development. One of the things I'm sure ATF will question is 'who benefited?' from this suspicious fire? This is not the first condo relatied fire recently, nor, do I doubt, that it will be the last. I'm sure ATF was brought into this because they are seeing a lot of condo related fires and are treating this as a unique situation. In this day and age of the condo market, I propose that all condo development related fires be handled by the experts. ATF should always be involved and maybe even the FBI? Should these fires be handled with the same sort of attention as inside trading? I don't know but it's worth developing the strictest rules and sanctions for whomever is responsible for the fire.