Andrew's Monthly Musings - January 2023
Monday Jan 16th, 2023
Happy New Year 2023!
The Toronto real estate prices are down 22% from the peak in November 2022, and similarly down for most of the GTA and Southern Ontario suburbs. Sales are remain down almost 50% YOY for the past several months, and properties are taking twice as long to sell when they do; the market is as cool as it was during the first few months of COVID. Inflation remains stubbornly high at a reported ~7%, though everybody knows from the last trip to the grocery store, with heads of lettuce commanding a crushing $5, actual inflation is more like 12% or more. However, the shifting market brings great opportunity!
The Silver Lining
Life is a marathon, not a sprint, and for many it’s actually a great time to acquire property, particularly when upsizing, and for those with cash for significant down-payments. We have seen some fantastic, generational properties available recently, and there will be more as we emerge from the slate greys of winter into the sunny skies of spring. We’ll also be on the lookout for deals on investment properties, where some investors are unable to meet monthly cash-flows and need to unload, the same goes for condos and cottage properties, which are more likely second properties, and the first to sell in a pinch.
For Sellers, please don’t despair, inventory is tight with new listings well below average, so if we list together, we’ll ensure we can win with proven systems, clever positioning, and naturally, a little magic razmataz!
Wise words from Burke: "There's always next season daddy!"
Though inflation is higher and stickier than ideal, it’s still nowhere near the crazy 80s, money’s just not free as we have become accustomed. The “shock and awe” approach of interest rate hikes will soon take hold and cool down consumption, we can’t be immune to these increased costs forever, so inflation will be tamed. Soon intertest rates will return to more affordable levels and mortgage costs will drop again. Also, there were more than 700k new immigrants to Canada last year, and now 500k every year, so demand for housing, along with prices, will soar once more. As always please, get in touch with anything real estate, always happy to help. Spring beckons!
There are also some amazing things going on in the world. AI is becoming real, ChatGPT is a free open-source natural language model just released this week and already scary powerful. I asked it to write a few papers on some topics from university in economics and philosophy, and a few seconds it delivered results good enough for low B grades; imagine this in a few years. Please take five minutes are try it out.
On the energy front, scientists at the Livermore Lab achieved net energy creation from a fusion reaction, which may pave the way to the wholly grail of “free energy”, somewhat more efficient than solar and wind. These economic woes are fleeting, and everyday forward is the best time to be alive!