• housing pricesWhy Shortage of Listings Hurts Housing Prices

    It was 1994, I was working in the mortgage department at Montreal Trust and we had a serious problem. We had a 6% arrears rate and we were in the middle of a serious recession. What does this mean? It meant we had 6% of our mortgage portfolios had actually turned their house keys back to the bank. During these turbulent days, I learned my first real (non-classroom) examples of supply and demand.

    With the public afraid, I was in an example of a stockpile of homes for sale with no buyers. Wow, has the pendulum ever changed. We now have a critical shortage of listings in Southern Ontario. January 2020 saw house prices increase by the following amounts January 2019 to January 2020.

    • Toronto (GTA) – 8%
    • Burlington – 8%
    • Hamilton – 8%
    • Niagara – 10%
    • Ottawa – 14%

    In 1994, we gave homes away. Yes, you heard correctly. Just take the keys and take over the mortgage. Today, I have no answers. I have my thoughts but again, they are meaningless as history in the future will be written.

    It basically appears to be 2017 all over again, where sharp housing prices increases were caused by similar factors as a shortage of homes for sale and the intervention of the stress test. Will the pendulum change? Yes, only I am not smart enough to know when.

    Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

    If you would like to apply for a mortgage online, please follow this link.

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