As we head toward the end of the year, we always like to reflect on what has happened and also try to figure out what is coming next. Trying to figure out what is going to happen in the market is difficult as even the top economists and other pros have differing opinions. Some of the opinions are based on trends, statistics and the big one . . . gut feeling. We have some buyers that feel the market is going to drop and they will get a better price for their dream home if they wait, but we also have sellers that believe if they wait until spring to sell they will get more for their home . . . but it probably can’t go both ways. One of the biggest questions we get being in the Real Estate industry is, “What do you think the market is going to do?” If the top economists have different opinions, it is fair to say that Real Estate Agents do, too. So based on . . . you guessed it, trends, statistics and gut feeling here are some things we do know:
CREA predicts in 2011, Canada overall will experience a decline of 0.9% in house prices. There is another national report that suggests the average home price will climb by 1.6%. CREA also predicts that sales will decline by 7.3% while the other national report suggests that they will go up by 5.5%. Interest rates are expected to rise in 2011, most seem to agree on this. While at historical lows, any hike in interest rates can have a big effect on pricing and the market. If you are a home buyer it is important to realize that if the market went down only 5% and you were approved at that price, even a 1% interest rate hike could make it hard to qualify for this home. What we can learn from this is, if you like the home you see and can afford it, it is a great time to buy. It is almost impossible to time the market, we usually know it is at its lowest when it has already started going back up. At the end of the day there was a great quote from Mark Twain, "Buy land, they're not making any more of it". Story from Royal LePage Kelowna.
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