Fear and Loathing in Q4
My routine is quite simple. I wake up each day close to 6am and debate if it’s a running day or not. After a 15-minute discussion with myself I read the various local papers, I subscribe to. Yes, I’m old and yes, I enjoy the physical print versions of our local community paper in addition to my favorites. There’s something sublime and sophisticated I love about The Globe and Mail and also something off yet honest, about the Toronto Star. I’m not much for the Sun. Joe Warmington is great but the Sun’s lead sports reporter is someone we can all do without.
This week’s leads story in the Star was something out of 2008. The frame is almost sensationalizing and romanticizing about 2009 as if they had just rewatched The Big Short, Too Big to Fail and Inside Job back-to-back to back.
Without getting too donnish I certainly am aware of the one reporter from The Star. As Warmington is to crime or Simmons is to sport, this writer who I must say is quite compelling keeps up a narrative that frankly is a disservice.
For instance.
Nov 3, 2023 -Toronto-area buyers are walking away from deposits on new homes — some losing as much as $300,000.
Oct 13, 2023 – Since July, power of sales events has risen by 10% a month on the Toronto Regional Real Estate Board, according to mortgage broker.
Oct 12, 2023 – One broker says cottages could see a drop in value of as much as 30 per cent due to an expected glut of listings in the spring.
Oct 7, 2023 – The affordability crisis is starting to trump job prospects for new graduates, experts say, which could hinder Toronto’s economic development.
Oct 5, 2023 – For the first time in over a decade, prospective buyers are making conditional offers, asking for home inspections and pulling out if they don’t.
Oct 4, 2023 – Canada is building fewer homes today than during the 2020 lockdowns — and ‘the worst is yet to come.’
I’m not here to rebut this individual’s opinion however I’d like to ask my industry professionals and equally my industry participants whether this is clickbait or fact founded.
How would you know if these are accurate articles? I’ve yet to see any sources in these articles and to address the most recent article about home purchasers leaving $300,000 in deposits and walking away; well, if they exist, please call me. I’m certain there are better alternatives to the actions anonymously describe. Furthermore, is that $300,000 after their Tarion security? Certainly, there is more to the story and frankly the headline is misleading at best.
Reading this, the most popular daily in Ontario often seems dominated by distressing events. It raises legitimate questions about why the media focuses on negativity. This may be due to journalists finding sudden disasters more compelling, preferring cynical articles and clickbait. Possibly readers have trained themselves to do such. People claim they want good news, but research by a 2014 study Trussler and Soroka at McGill University in Canada suggests otherwise.
In McGill’s experiment, participants selected political news stories to read, believing it was for an eye-tracking study. The results were disheartening, as participants often chose negative stories. People interested in politics and the economy were more likely to opt for bad news, even though they claimed to prefer positive news. This “negativity bias” may stem from our evolutionary inclination to react swiftly to potential threats.
There’s also a possibility that we pay more attention to bad news which bleeds irony because most generally have a more optimistic view of the world. We believe we’re better than average, expecting things to turn out well, making bad news stand out against this backdrop of positivity. Our attraction to bad news is likely more complex than mere journalistic cynicism or a dark curiosity, offering hope for humanity on another bad news day.
…Reverting back to real estate and financing which I hope, is why you’re here…
There’s no positive argument that can be voiced about our current overnight rate 5% compared to where we were over the last decade. However, we’re not in 1980 when a 5-year fixed was 13.25% nor 1990 when a 5-year fixed was 13.50%. Oh, and for those like me and in primary school on Black Friday; Prime was 9.75% and a 5-year Fixed was 11%.
So, for those like me reading bad news on the doorstep remember that these headlines do not reflect what I see in the industry daily. The ‘non-fiction’ you read might as well be from another time. I can’t speak for anyone else in the industry, but my clients are still transacting at much lower than posted rates and often are taking short term open financing. They’re not letting said author’s perspective stand in the way of their long game. In fact, given the financing products available are taking advantage of products that give them flexibility to maneuver when changes in rates occur in the next 6 months.
Concluding; when it comes to the real estate and commodity market articles the literature in dailies written publications isn’t nearly close to what is occurring in the daily market and more importantly when said daily literature writes how well the economy is striving, the narrative switches so drastically the underlying principles apply.
Subjectively I would be equating it to those who have gone to the same mechanic or dentist your whole life.; If you sporadically went to someone else, you’d likely receive less value, exaggerated distorted information with a higher cost. However, if you have someone, you’d trusted their decades of experience; you’d be more likely to have less reactionary volatile information. Circling back a homeowner or investor this experience would be exactly the guidance you’d receive to ensure your calm disposition well placed in the long game.
Sure; there’s value in all cited information. There’s no reason to doubt fact. However, in this economy, specifically real estate it’s vital one doesn’t adhere to sunken cost traits nor alarmist headlines.
The lending environment toggles daily to reflect the economy and that is why I continue to see forward thinking transactions rather than herd mentality gloom headlines.
Maybe I’m an optimist or maybe those who’ve made the most gains have the mind of a goldfish.
The happiest species in the world; a 30 second memory and a persistence to forge ahead know that the investing in the future is always better.
Have Questions?
Contact us today to schedule your personalized consultation and take the first step towards turning your homeownership dreams into reality or look into better investing opportunities by phone at 519.497.3667 or by email at mathew.monks@migroup.ca.
Mathew Monks, Mortgage Agent Level 2
Licence #M18002043
Mortgage Intelligence FSRA
Licence #10428
Phone: 519.497.3667
Email: mathew.monks@migroup.ca
Website: huronmortgages.ca