In 2007, Toronto renter Jeremy Martin was working in a mailroom and checking out the east end of Toronto as a place to put down roots.
With the average price of a house or condo declining for two months in a row, realtors are reporting fewer showings, bully offers and bidding wars.
But for those who’ve been shut out of the market, there’s some simmering animosity toward the speculators, flippers and investors who’ve gotten rich while ordinary families languish on the sidelines.
CMHC’s website shows the rate of delinquency in the fourth quarter of 2021 was .19 per cent in Canada; .08 per cent in Ontario and .07 per cent in Toronto.
Royal LePage CEO Phil Soper expects sales and prices will be lower than the 10-year average in the second half of this year.
For about the last 10 years, Martin and his wife, Beth, have been renting a house and raising two daughters in the neighbourhood they were exploring 15 years ago.
But by May, home sales took flight again as city dwellers looked for more space in which to work, study and isolate.
Before that, there had been a market correction in early 2017, in response to the Ontario Liberal government’s Fair Housing Plan that included a foreign buyers tax.
Soper calls that correction “a soft landing,” with impacts that didn’t last.
But when many people think of a housing crash, they conjure memories of the global financial crisis of 2008 and 2009, and the U.S.
Eric Stein, senior vice-president of the Centre for Responsible Lending, an advocacy group that opposes predatory loan practices, remembers seeing home prices in some parts of the U.S.
When prices were on the rise, if a family ran into trouble paying their bills, they could bank on their home equity — either selling that home for more than they bought it for, or refinancing.
When Canadian home sales drop, as they have this spring, buyers and sellers typically step back to absorb the changing climate.
In the GTA, periods of stagnant or falling home prices tend to last for months, said Soper.
Arizona realtor Deems Dickinson, president of Russ Lyon Sotheby’s International Realty, remembers there were signs of the impending disaster years before the 2008 crash.
Today, Stein describes the housing woes plaguing American cities as similar to those seen in Toronto over recent years, with fevered demand for reasonably priced housing outstripping supply, and pushing prices higher.
A drop in prices doesn’t affect all households equally, Stein says.
But a young family that took out a larger loan more recently, to crack into a white-hot housing market, may be in a more precarious position.
But experts say rising rates will likely make up any difference in home prices.
The upside is that prices have already flattened, and the average buyer can put conditions in their offers again.
It’s the flippers who take a hit in this type of downturn, according to Soper, who distinguishes flippers from renovators, who add value to a property.
Stein looks at home prices as a double-edged sword.
After graduating from McMaster University in 2011, Patel moved to Vancouver Island to find work, moving back to Toronto in 2016 to be near family and friends.
He can’t imagine qualifying for a mortgage in Scarborough, where prices average well above $1 million, and yet homes continue to sell.
He feels fortunate, for now, to no longer live in a basement apartment.