Serge’s Two Cents…
Well I hope you all had a Happy Holiday!! Now it is time to start thinking about what might happen in the New Year. Current data that I use to forecast the market are skewed right now because of the holiday season so we will wait until we have new data next month to see where the market is going.
It seems the consensus that home values will go up in the New Year, but I don’t think that it will be as much as most people think.
Yes, there are parts of Canada that the market is really getting hot again – but that is only because their home values had dropped more than we had, and their economies were more depressed than what we had experienced here in Edmonton, and Alberta for that matter.
The recovery in the USA isn’t going as well as most people had hoped, and that will slow down any recovery we have here in Canada as they are our biggest trading partner.
I think we will more likely to see a 5% increase in home values as that would be more realistic. We might be able to get lucky and get up to 10%.
But this all could be brought to a halt or slow down as the finance minister is worried that Canadian people have taken on more debt than they ever have in the past. He is thinking about possibly making changes that will affect mortgages and real estate.
Some of the changes they are considering are raising the amount of down payment up from the current 5% to at least 10%. They are also talking about shortening the amortization period from the current 35 years. Another expectation is that the interest rates will be going up this year.
These factors will have a great impact on the ability for people to buy homes, especially for first time buyers. They will now have to wait longer to save for a down payment and they will now qualify for less of a home because of the lower amortization period.
The real estate cycle starts with the first time buyer. They need to get into the market so that everyone else can sell their home and move up into a bigger or more expensive home.
In my opinion if any of these changes are implemented you can expect the real estate market to slow down and curb the chances of valuations to go up.
So if you are a first time buyer I would advise you to do everything in your power to buy sooner than later. We might be able to help you with this process including helping you to get pre-approved with the lowest rates possible ( in many cases lower than the banks), and we can send you a first time buyer package.
To receive the package call Kate at my office at 780-643-8151 or send her an e-mail @ teamleadingedge@shaw.ca
Lets see what this month will give us and hopefully we will have a better indication as to what we can expect in this springs marketplace, and that is my two cents… Serge
Tags: buying, economy, edmonton real estate, edmonton real estate statistics, home sales, housing market, investing, News, Real estate news
