By Mark LeBaronFinancial PostJanuary 28, 2018This year has been the first time since the 1970s that the home-buying market has gone through a massive bubble, and some analysts have said that a big chunk of the growth has come in the past three years.
The home-buyers market is a hotbed for bubbles in the U.S., with a total of nearly $8 trillion in deals, according to the real-estate analytics firm Trulia.
The average price for a home sold in Canada in 2016 was $1.7 million, up 13 per cent from 2015, according for Toronto Real Estate Board data.
And while many of those deals are for a single-family home or a small condo, it’s not just about the single- and double-wide-unit homes.
“There’s been a massive explosion in single- or two-family homes that aren’t single-sales, or apartments, or condos,” said Chris Ruparel, president of the Canadian Association of Home Builders.
What that means is there are now a lot more deals available to the home buyer.
That’s partly because the number of home sales in Canada is down, but also because more people are opting for smaller, smaller homes, he said.
For example, the average home size is about two-thirds of a square foot, compared to around two-and-a-half times a square-foot in the United States, according data from the National Association of Realtors.
Many buyers are moving to smaller towns, which means they can get a larger home for the same price.
While many people who move are buying a larger, single-story home, Rupalyer says that isn’t always the case.
In fact, some buyers are buying smaller homes and smaller condos, which can create a lot of noise in the sales process.
Rupalyers survey shows the average price of a two-bedroom home is $1,200.
A two-storey home is about $800 and a three-storeys home is between $600 and $700.
People are also moving from cities to rural areas, which often have lower taxes and more limited access to schools, he noted.
To get the most bang for the buck, Rupsarel said, you should look at homes that have a lot less space and less space between the bedrooms.
If you’re looking for something that will have a great view of the backyard, you want a smaller home that’s closer to the house and a larger house that’s farther from the house, Rupparel said.
“I think it’s a little bit of a red flag,” he said, noting that it’s good to look at a lot different homes before you decide which one is best for you.
Even though prices are going up, there’s no guarantee that the boom will last forever.
As long as the market continues to go up, he expects a correction in prices, as it has for decades, he added.
Still, for now, the price bubble is a big part of the market.
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