Sustainable housing and real estate in Kitchener-Waterloo Region

Should I buy a home right now?
February 17, 2009, 11:05 pm
Filed under: Buying, Market Conditions, Rebecca Sargent | Tags: , , , ,

Does the news scare you? Are you looking for solid answer on whether you should buy a home in K-W right now?

Unfortunately, there is no solid answer. No one can predict the future. That being said, we can take into account the entire situation and try to reason what the best options are. Most tend to agree we are in currently in a buyer’s market, where there are more buyers than sellers. This means that buyers have more selection and more room to negotiate. When there is more competition to buy, the prices tend to increase. Waiting until the market swings into a seller’s market to buy will mean that the prices will probably increase, resulting in you having to pay more overall for your purchase than you would pay today.

The economy is currently in chaos, but as it begins to repair itself, inflation rates will most likely go higher. This will make the interest rates increase, making it more expensive to carry a mortgage. In fact, the average 5 year interest rate offered by mortgage brokers has come down from 5.80% to 4.49%, making the actual cost of carrying a mortgage decrease considerably from past years.

Yes, certain areas did experience a noticable decrease in average sale price in Ontario in the last little while. Does this mean that prices have actually dropped? No. The decrease may very well be because higher priced homes are not selling, while lower priced ones are– bringing down the overall average. In January 2009, the number of residential properties sold actually increased 23.3% from the previous month in K-W. January is typically a slower time of year for real estate in Canada, so considering the current economic climate– this is actually quite promising.

Realtors have been lobbying to increase the amount of RRSP contributions for first-time home buyers to $25,000 per person and have finally been responded to favorably. This should reflect positively for first-time homebuyers over the next couple of months. Predictions are that there will be a decrease in sales in 2009, but from an historical view, the current number of sales is only slightly off from those 10 years ago. In fact, the current average sale price is only slightly lower than last year, but considerably higher (more than $60K higher) than 10 years ago.

With a new President in the White House and budget packages looming to help bail out the economy, the possibility of an economic upturn in the not-so-distant future is promising.

Should you be scared to buy? No. Not necessarily. If you have a steady job, you are still in good position to buy right now. So take advantage!