Q&A With Scott Shallow, Veteran Realtor & Market Insider
Scott Shallow has been an agent at Brad J. Lamb Realty for the past 15 years. In that time he has sold over 1000 properties in Toronto and gained a unique and rigorous insight on the ever evolving real estate market. As a contributor to "The Skinny" he obliged us with a brief interview.
The Skinny: So the question everyone is asking is “when will the Toronto real estate market crash?” What is your position on that?
Scott Shallow: A sustained recession may cause a 5% drop in prices but really the only thing that will cause a major correction in prices will be interest rates. If rates go up 2-3 percent we will see a 15-20 percent correction in prices. In reality, prices are rising at 15 percent in the condo sector and over 20 percent in the single family market right now so unless this happens in the next 12 months, price increases will outweigh any negative impact of rate increases.
TS: Why is the Toronto market so strong compared to markets elsewhere in Canada?
SS: Toronto has a supply problem. We are becoming a mature real estate market with very little available land to develop. The city is restricting density forcing developers to go to the Ontario Municipal Board, the OMB is backed up and hearings take a long time. All of this leads to a shortage of new property entering the marketplace in a city which in the past few years has built and moving forward is building more office space than it ever has in it’s history. The fact is, jobs are moving downtown from the suburbs and the youngest and brightest want to work in the core, the service sector is thriving (most of it is located here in Toronto) to a point that it has clawed back approximately half of the GDP losses we have seen in the past few years in Oil and Gas and commodities. Toronto is the greatest real estate market in the world right now based on growth and stability because Toronto is one of the top cities in the world to call home.
TS: What is a better investment a condo or a house?
SS: Good question. Two years ago I would have said house without hesitation as prices in the single family market were growing at 15% while the condo sector was seeing modest 3-4% price growth year over year. Last year that all changed. Single family homes saw 20 plus percent price growth while condos increased by 15 percent. The answer is, they are now both great investments. Purchase whichever you can afford. Toronto is now in a situation where inventory levels in both sectors will be very tight in the years to come.
TS: What can you recommend to Buyers and Sellers trying to navigate this fast moving marketplace?
SS: Get good help. The most important decision you will make in the purchase or sale of a property is the Realtor you hire. Make sure they have a lot of experience. I recommend someone who sells a minimum of 30 properties per year. Choose wisely!!