Toronto's last significant Real Estate price crash started in 1989 and ended in 1996. There was 7 years of falling prices, that's hard to imagine as anybody under 45 years old living in the city hasn't experienced that. I talk with older agents who lived and even worked through that time and they all say how hard and awful it was as so many people lost money and had financial problems. Looking at a graph of that event, it's easy to ask how they could not have seen it coming. The older agents explain to me that at the time, the common consensus was 'buy now or you'll never be able to afford to buy'.

I heard a really clever comment the other day about people who believe we're in a bubble. "The thing about bubbles is that you either look stupid before or after they burst." So if someone says we're in a bubble... and it hasn't popped yet and prices go up, they look stupid. If someone says we're not in a bubble, and it does pop, they look stupid. I know it's not possible to predict bubbles, but there's always someone predicting it and someone to say 'I told you so'.

I believe interest rates are the primary factor in todays real estate market. My first mortgage around 2003 was an unheard of 3.2%. They told me that kind of rate was incredible and definitely temporary. Today, we can still find mortgage rates better than what I had back then. Ben Bernanke, former chairman of the Federal Reserve, has said that he "doesn't expect rate normalization during his lifetime." That's a pretty ominous statement. If rates stay low for another 15 years, we're in for significant price growth. Looking at the position of a broke University graduate entering the workforce with these  home prices,  we seem to be moving a little closer to a 'have' or 'have not' society. We're really living in unprecedented times.

Detached homes in Toronto appreciated 8% in 2013, 9% in 2014 and we're off to one heck of a strong start to 2015. So in the past 3 years we're looking at least a 25% increase. In my 8 years selling real estate, I've had dozens of buyer's tell me they're holding off their purchase because the market will be crashing in a couple months. My partner, Elizabeth, was speaking to a man who sold his home in the Kingsway in 2012 because he thought the market was going to crash and he was going to rent and then buy the dip. Well, he's lost a lot of money on that bet.

You can study affordability charts, price history, monitor listing inventory, listen to economists opinions and the latest new headlines... then at least you would have an educated guess, but still only a guess. Nobody can tell you what's going to happen this year or next year, what black swan is around the corner or what is the long term impact of Quantitative Easing (massive money printing). I do believe that over the long run, nobody can argue that prices are going to rise.

My best advice is to buy well within your means, your price range should not be the maximum the bank would lend you with a 5% down payment. Give yourself some breathing space and time to build up equity. Don't try and time the market. We all have to expect to go through peaks and valleys throughout our lifetime, but luckily, the only thing that matters is how much we've made over the long term.

We've also started a real estate website focusing on South Mississauga Real Estate here www.DawsonRealEstateTeam.com.