Latest Headlines:
Reported by the Canadian Press Wed. March 19: Loonie lower, Bank of Canada chief says interest rate cut can't be ruled out
Reported by Globe & Mail Tues. March 18: First-time home buyers’ average budget rises to $316,000: BMO
Reported by the Toronto Star Wed. March 19: Real estate association trims 2014 home sales forecast as year off to slow start
Taken all togethor it certainly sounds like Mortgage rates will drop in the up coming Buyer's market where your first property will cost you more now than it did a few years ago.
Everything is all speculation until it is fact. It's that simple. Interest rates MAY go down. They haven't today though. Eventually they will go up, it's the nature of the cycle. When? Who knows. Do you bank on the interest rate? No. Bank on your income and your ability to make mortgage payments. If you can afford a mortgage of say, $400 000 at 3.49% with payments that are $1994/month can you afford $2104/month? - that's the difference between a closed and variable. Sounds simple and easy enough but you really need to make sure you can. When rates rise so do your payments. Careful not to borrow so much that you max out on your monthly payment affordability. You need a cushion. One day that mortgage will come up for renewal - will you be able to weather that, should rates increase dramatically? Don't bank on what could happen, just bank on what you know about YOU and YOUR finances and what the rate is doing now. The rate will always go up and always go down.
First time home buyers average budget increases? Well ya. Of course. It's called cost of living, inflation and the nature of the market. No one buys property in hopes that it will depreciate so naturally prices all over Canada will nominally increase year to year. What that percentage increase amounts to varies from City to City and area to area. I think the biggest key here is 1st Time Home Buyer education.
There's been a dramatic shift in today's generation from generations prior. Today's 1st time home buyers want it now, want it all and want it cheap. What ever happened to a starter? The one where the buyer works their way up, puts in some time and effort and slowly collects resources to renovate slowly as budgets permit, their first house. Today, that first Buyer thinks they ought to be able to move into a 3 bed, with hardwood, granite, stainless, finished basement, attached garage with a fenced yard in a good neighborhood for next to nothing. Why? Because they see it on HGTV. Lower your expectations. Realize the value of compromise and know that the first home is not typically forever. It's the first. It's the one that helps you see what you want next.
Trimming the forecast for 2014 on home resale? Well glad they are finally becoming realistic. As an agent, I find too often it's the media, not us, who fuels the fire. Reported statistics and media create a frenzy of want, need, have to sell, need to buy, get in before it's too late, have to price it 100K over value... then the agent steps into the picture after frantic client calls and we must, please don't laugh, be the voice of reason. Yes sales were down in January in the GTA - why? Because it was freakishly cold and we had an unusual amount of snow. It's quite simple. But back in January, those same statistics people were reporting above average sales. Why? Stats are numbers. Mathematical equations. One large or luxury home sale skews those figures. One home that is undervalued by $50K and then sells at 125% over asking, skews those home sales.
I certainly wish the stats would compare apples to apples when they release numbers. Show the figures for say, the 'average bungalow'. How long on the market, average. Average listing price. Average sales price. How many were sold. Do the same for 2 story. The same for luxury. The same for condo's - 1 beds compared to 2 beds. More often than not real estate statistics are a stew, what you are looking for are individual dishes.
In this media age all buyers and sellers are far more savvy & intelligent than ever before and that is most definitely a good thing but too much information, too much competing information, too many numbers and all the info becomes a mash up which does not create a more intelligent real estate client, but a more confused one.
Finally, in the great words of Benjamin Franklin, "do not believe everything you read online, some of it is just not true". Good guy that Ben.
As always, questions, comments or if you are just plain curious about the value of your home,
email nicole@gtalisted.com,
visit our website at www.gtalisted.com,
our facebook page at Sutton West Realty,
follow me on twitter: GTAListed
or text me at: 416-388-7384
Would love to help.
email nicole@gtalisted.com,
visit our website at www.gtalisted.com,
our facebook page at Sutton West Realty,
follow me on twitter: GTAListed
or text me at: 416-388-7384
Would love to help.
Nicole Kreutzberg
Realtor
This blog is not intended to solicit those under agency agreement and has been written as the agents own opinion not to be used as legal advice or otherwise
