Happy June! Words to reflect on as we enter the new month: be careful what trends you are banking on. See Why every housing bubble looks like the new normal:
“The Toronto housing market was in a precarious place in the late 1980s. Prices had doubled in a short period, households were piling on debt and the market showed no signs of slowing down. That period represented a peak for Toronto (prices crashed in 1989) but by today’s standards, it looks absolutely quaint. The average home price was a mere $469,000, amounting to 5.4 times the average income. These days, the average home price is between seven and eight times income. To return to the ratio of the 1980s, the average household income has to jump to $160,000, or home prices have to fall back to $460,000.
There is a third possibility: this time is different. Maybe prices in Toronto and the surrounding suburbs really have reached a new normal, and a wide swath of people are permanently shut out of the market….”
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