The longing for briskly plummeting housing cost in Southern Ontario is forcing evaluators to have a second look at properties they have already evaluated to see how much the market has moved.
Claudio Polito, a Toronto evaluator and principal owner of Cross-Town appraisal Ltd., says lenders on value, as divergent to income and credit history, are really trying to stay on top of a market that appears to be changing swiftly.
According to his assessments, the prices in the Greater Toronto Area have plunged anywhere from 5% to 15% over the last month. The next set of data from the Toronto Real Estate Board are due on Monday, thus, will mark the first full month of data since provincial changes to cool the market that incorporated a tax on foreign buyers.
“Lenders I deal with, want to know if your property is still worth $1 million if they are loaning say $650, 000,” said Polito. “They don’t base it on anything else. We have to be exact because it’s not a bank and small lenders can’t afford to lose a dollar.”
“It wouldn’t be the first time, evaluations have trailed purchase prices, a singularity that previously caught some Vancouver buyers by surprise when it was time to close, said Garry Marr from the financial post, “a lower appraisal could gradually be an issue for people with previous deals, not yet closed, in Toronto, especially when buyers are coming up with only the minimum 20% down payment for a non-government backed loan,” he further noted.
A more problematic market to evaluate is one like Calgary, which has seen transactions drying up, making comparisons hard to find.
“The more valid statistics you have access to, the comparable task of preparing the appraisal becomes, said Keith Lancaster, chief executive of the Appraisal Institute of Canada. “When the Calgary market was sluggish, the lender would say we want sales that are within the last 90 days for equivalent. If nothing has sold for as good as 90 days, you ask the lender if they want to extend the time or the geographic window.”
J C Loum