I came across this article today, and it made me think abo u
t the real estate market locally – more specifically, how the market is in kind of a shambles because people have been buying into the messages from the mainstream media (msm) for far too long.
You see, the msm has spent the last 12 months talking about how everything is so bad, and how much worse things are going to get, and everybody listened. It reminds me of the politician who reports when gas prices are going to go up – they go up. What if he reported that gas prices are going to go down? Might they go down?
Anyway, my position on the real estate market has been, and still is, that people have to live somewhere, so why not buy a house? Prices have gone down, rates are crazy-low, and rents have gone up. Talk about three things to stop people from renting! Yet they have continued to hold off on buying a home.
The reasons given are varied:
- Worry about job security. Well, as mentioned, if you have to live somewhere, and it is cheaper to own than to rent, why would you rent?
- Prices are going to go down even more. Are they? They haven’t, and they’re not going to. Why? Because we are not the United States, our systems work very differently, and Canadian banks don’t want to own real estate.
- If it is such a great time to buy, more people would be buying. Actually, the fact of the matter is that if there were more well-priced, well-maintained houses on the market, more people would be buying. There’s almost a herd-mentality amongst homebuyers – when everyone’s buying, it must be a good time to buy. Hmmm. The laws of supply and demand say the opposite, don’t they?
- I’ve got 9 months left on my lease. Yes, and? What I mean by this is that there are all kinds of creative ways to buy now even if you are in a 1-year lease for another 364 days. Call me for details – there are lots of ways to take advantage of the rates and prices before they go up (which they will once everyone else starts buying).
- I don’t have enough of a downpayment saved. Well, what is ‘enough’? You can still get 100% financing; you can still get cash-back. I’m telling you, times are perfect to buy!
So, are you going to just sit back and wait? Wait for changes that won’t come? Wait until the home of your dreams is priced out of what you can afford because prices and/or rates have gone up?
Search on Twitter for GTA real estate agents – they are all saying the same thing: multiple offers. The sellers won’t sit back and wait for you – get into the market while it is to your BEST advantage.
Here’s the article that spurred my thinking:
The Bank of Canada is declaring the recession essentially over in Canada and projecting the economy will bounce back at least twice as strongly as in the United States.
The bank said today it estimates the Canadian economy will advance by 1.3% during the current July-September period, and 3% in the fourth quarter, both at annualized rates.
The bank’s quarterly monetary policy report contains many cautions about how the world and Canada is coming out of the deepest and most painful downturn since the Second World War.
The bank remains concerned that the fragile financial systems in the United States and Europe may contain more unpleasant surprises that will sideswipe the global economy once more, and it believes the strengthening loonie is not helpful given the Canada’s dependence on exports.
As well, it warns the recovery is at best nascent and dependent on massive government stimulus and historic low interest rates to support domestic activity and consumer spending.
But overall, the new outlook represents a clearly more optimistic view of the Canadian economy than governor Mark Carney presented in April, when he saw the contraction that began last October lasting at least until the fourth quarter of 2009, and the dip in the first month of this year breaking all records.
The Bank of Canada first indicated it was about to brighten its outlook on the economy on Tuesday in a statement accompanying the decision to keep short-term interest rates unchanged.
At that time, it said the economy would shrink by 2.3% this year—implying growth had already begun—and expand by 3% in 2010.
On Thursday it said that economic growth “is now projected to turn positive in the third quarter.”
Carney told reporters the recovery it will be a “gradual” process.
“Global economic activity appears to be nearing its trough, and there are increasing signs that activity has begun to expand in many countries in response to monetary and fiscal policy stimulus and measures to stabilize the global financial system,” he said.
“However, this recovery is nascent, and to sustain global growth effective and resolute policy implementation remains critical.”
That effectively means that the downturn that cost Canadians close to 400,000 jobs since October has ended, although the recovery will be modest by historic standards.
The bigger bounce the bank is projecting starting this quarter does not change its overall view that it will take until mid-2011 for Canada’s economy to return to full capacity.
