US Recession and the Toronto Real Estate Market
The US Federal Reserve cut interest rates again yesterday, this time by one half of one percent. So what-this is blogTO, who cares right? Well, not exactly. The massive erosion of the US housing market and subsequent slow down in the economy south of the border is something anyone thinking about real estate in Toronto should be watching closely over the coming months ahead.
The tanking of the US housing market might actually act as a catalyst for something good for us in Toronto. And it's not just good for the lucky few who already own property, it also could help those who will be jumping into the market for the first time this year.
The US Fed has cut interest rates by a total of 1.25% in the past 10 days in an effort to stave off what some are calling an inevitable recession. Over the same period, the Bank of Canada has only lowered their rate by .25%. This has sent the Canadian dollar soaring above par once again and we can expect more interest rate cuts ahead here in Canada.
Lower interest rates=lower mortgage rates=improved affordability=potentially another red hot spring market on the horizon in Toronto. That being said, the general sentiment among the pundits is that 2008 will likely fall short of the records set in 2007.
Photo by loss_effekt from the blogTO Flickr Pool.
Andrew la Fleur is a registered real estate agent and regular contributor to blogTO.
