That’s an interesting thought, spurred on by the number of conversations I have on this very topic every week. The number of conversations seems to be increasing the last couple of weeks, as people looking at real estate in Milton Ontario, Mississauga, and Campbellville become confused with what is happening out there.
You see, the Main-Stream Media (MSM) has spent so much time and effort fuelling the doom and gloom, and has only just started reversing their story, about 6 months behind what I have been reporting, that the public is only just beginning to catch up with the real reality. As opposed to the reality the MSM has tried to create about the real estate markets in the GTA.
You have to be careful when believing what is being reported by some media giant, and they are all equally bad, because they do no
t have specific data, relevant to your immediate area, updated weekly. Perhaps more importantly, media like The Star, National Post, and The Globe & The Sun, do not have the local expertise to provide real, on-the-ground information with local interpretations of the data.
There’s one part of the key – ‘on-the-ground with local interpretations of the data‘. On my main real estate site, AllMiltonHomes.com, I have an Internet Warning:
REAL ESTATE INTERNET WARNING: Despite advertising claims to the contrary, the Internet is not an experienced Real Estate Professional. It cannot consult, counsel, advise, have knowledge of local laws and market conditions, make judgements, ‘own’ the result, or most importantly, understand your individual goals and needs and care about you as a Client. To obtain an accurate interpretation of any information you obtain online, please contact us.
To me, this pretty much sums it up – data is worthless in the absence of skilled interpretation.
So, on to the subject of this post – are rising house prices better for buyers or sellers? Would a better question be “are rising house prices good for anyone?”
Let’s look at it from a seller’s point of view – when prices are rising, the value of your present house goes up. That’s great if you are in the segment of the market that is down-sizing, and it’s also great if you are relocating to a less-expensive marketplace. However, it is not so great if you are moving up in the same general marketplace. Let’s suppose your present house is valued at $400,000, and prices go up by 10%; that would make your house worth $440,000, which is pretty cool. However, the other side of that is, if you are like the average move-up buyer, you will be spending 30% to 50% more on a house, which means that the $550,000 house you were thinking of buying is now going to cost you $605,000. So, your current house went up $40,000, your new house went up $55,000, with the net result that you lost $15,000. I’d say that rising prices are not so good in that situation, wouldn’t you?
What about looking at things from a buyer’s point of view? Well, that’s a pretty simple conclusion – the more prices rise, the more a house costs you, so it can’t be a good thing, right?
Hmmmmm. So, if rising prices aren’t good for sellers or buyers, why is it that the real estate buying and selling public historically act against their best interests? To understand that thought better, look at the ‘feeding frenzy’ that was the real estate markets for most of the first 2/3rds of this decade – the faster houses were selling and the faster prices were rising, the more buyers their were competing for them. Now, when prices are, in general, lower and houses are, in general, taking longer to sell, there are less buyers out there and less sellers out there. Hmmmm.
So, where are you in the real estate market? Buyer? Seller? Are you active in the market right now? Why not? Let’s talk about it.
