Im not in the habit of making predictions.

Far too often, predictions prove wrong, and it always seems like the prognosticator can fall back on, It was just a prediction, once events have transpired differently than what was prophesied.

But I would, however, like to discuss the real estate market moving forward into 2014, and take a look at how some other people, media outlets, and institutions think things are going to play out

Do you follow baseball ?

I do.  And every December, there are a slew of free-agent signings in Major League Baseball, all of which are analyzed, scrutinized, and quite often, criticized.

General Managers are giving out $100 $200 Million to sign players this time of year, and there is absolutely, positively, zero guarantee of a return on that investment.

Jacoby Ellsbury signed a 7-year, $153 Million deal, or $21.9M per year.

Shin-Soo Choo signed a 7-year, $140 Million deal, or $20M per year.

Curtis Granderson signed a 4-year, $60 Million deal or $15M per year.

All three of these players are outfielders, and I have no idea how a General Manager is supposed to decide which player is going to achieve what. and how to evaluate that unknown variable.

I have come to believe that signing free agents in baseball amounts to little more than guesswork, which is to say that he who has the most educated guess, screws up the least.

I hate guesswork.  And I hate predictions.

But predictions get people worked up, and they sell newspapers, as well as a slew of financial services!

Over the holidays, I saved a few articles of interest pertaining to the real estate market; some bullish, some bearish; some about Toronto, and some about the United States.

Id like to share those predictions. and seek further opinion from my readers.

And if you think that you cant join the conversation, just remember: everybodys got an opinion

Here are the links to the articles, and the excerpts Ive chosen to share:

By: The Canadian Press

TORONTO — A new forecast suggests fears of a housing bubble and a price collapse are misplaced and predicts rising population and land supply restrictions will result in Toronto house prices doubling over the next 25 years.

The forecast by Central 1 Credit Union says higher mortgage rates in the next three years will restrain housing sales in Ontario as a whole, but not cause a market correction.

Ontario home prices will rise about 4% a year through 2016, down from a decade-long annual average of about 6%.

From The Desk Of Brad J. Lamb Toronto Real Estate Market 2014 & Beyond

By: Brad Lamb

Brad J. Lamb Realty Inc. Brokerage

2010 condo sales of 20,491 units and 2011 sales of 28,190 units.  These were incredible years for new construction condo sales and these sales caused a huge amount of negative doomsdayer type press.  I believe 2013, 2014, 2015, and 2016 will see just 12,000 new condo sales per year in the GTA.  With 2012-2016 likely generating a total of just 60,000 new sales, it is likely that we will see a shortage of 15,000 units by 2018.

With rising construction costs, rising development levies (recently doubling, adding $10,000 in new costs to every new condo), rising land prices (as it disappears), and soon rising demand, and a lower supply, prices are going to start climbing again.  I predict that typical $600PSF condo will rise to $800PSF within the decade.  A 500SF one bedroom suite in the central core in a new building will sell for $400,000 by 2020.

By: Kimberly Miller

The Globe & Mail

South Florida housing experts are trumpeting changes that allow foreclosure sufferers to buy back into the American Dream sooner than they probably imagined, calling 2014 the year of the “boomerang buyer.”

Revisions made over the summer to Federal Housing Administration (FHA) guidelines and technical updates in November to Fannie Mae loan approval systems have opened the door for some former homeowners to buy again just one year after foreclosure.

Founders of the San Diego-based company AfterForeclosure.com said last week that millions of banned borrowers nationwide will be eligible for a mortgage next year, while Jupiter mortgage broker Skip McDonough said his firm is already doing deals with home buyers who were forced into default during the housing bust.

“The old-fashioned way of doing it was a seven-year waiting period,” said McDonough, president of Family Mortgage. “That’s changed, and people who don’t believe they can qualify are qualifying.”

McDonough and Jon Maddux, co-founder of AfterForeclosure.com, said the boomerang buyers are necessary to maintain a growing economy as other drivers fade.

So here we have three very different sources, but all of them seem to push the overall real estate agenda to some degree.

The first article suggests that Toronto real estate prices are going to DOUBLE in the next 25 years.  I dont in any way disagree.

But what does that mean for this year ?  The article says that 4% growth is expected in Ontario through 2016, but Toronto outpaces the average in Ontario, does it not?  So are they expecting 7-8% in Toronto?

And are they expecting prices to drop, ever ?  If prices are to DOUBLE in 25-years, then when is the crash, correction, or re-balancing of the market?

The second article makes some pretty wild claims, and while Im not looking to make any enemies in the Toronto real estate industry, the list not limited to Brad Lamb, I have to question the idea of an $800 per square foot average condo price for new construction.  Thats a LOT of money, isnt it?

Well, if we compared to, say, $1,000 in Vancouver, then its not.

And if we compared to, say, $3,000 in Manhattan, then its even more reasonable!

But the idea of a 500 square foot condo averaging $400,000 in downtown Toronto sickens me.  Thats absolutely insane, and its unnecessary.

And if we truly are going to see the inventory that analysts are predicting (42,000+ condo completions in Toronto in 2014), then how can prices reach an average of $800/sqft?

The last article takes insanity to a whole new level!

My favorite line was, “The old-fashioned way of doing it was a seven-year waiting period.

Lets take that logic, and apply it to some other issues

You used to have to get approved for a line of credit, and that took time!

Once upon a time, criminal background checks were necessary in order to purchase a gun!

In olden days, youd actually test the temperature of the bath water before putting your baby right into it!

This article, which you should all read in FULL, is ridiculous.

This mandatory seven-year waiting period for borrowers who previously defaulted on their mortgages, is now being done away with by many lenders.  Isnt this just asking for trouble?

Did we not learn ANYTHING from the American housing crash a half-decade ago?

And this is happening in Florida, of course, where the market is incredibly depressed, and prospects are bleak.

Sooooo..why not artificially increase the market?

The article says, boomerang buyers are necessary to maintain a growing economy as other drivers fade.  This is basically conceding that the price appreciation isnt happening on its own, so lending rules need to be relaxed so more people can buy, and more buyers can help increase prices!

Whats wrong with the world?

Overall, the feeling south of the border is that the real estate market is in for a very good 2014, but its hard to say whether that will have any affect on Canada.

Open the newspaper in Toronto, and youll see an equal mix of bullish and bearish predictions.

Im not making any predictions for 2014, other than to say that people still have to live somewhere. and the real estate market in Toronto will thrive whether prices are up or down.  Up 2%, down 2% how much does it really affect your life?