Tuesday, November 22, 2011

What Real Estate Market do you live in? Is buying a good idea?

Your Stats Are Not Our Stats.

I just had a question raised from one of my out of town clients. He mentioned that he heard from some of his local REALTORS in his local market (O.N.) that prices for Real Estate will be dropping in Canada and the USA by 10%-20% in 2012. He wanted to know if he should wait for those dropped before he bought. This is what I replied:

We here in the Okanagan frequently hear Real Estate Market Stats that do not pertain to us. We often hear Vancouver stats and Toronto stats and Calgary, Edmonton and Victoria stats and none of those markets are anything like Kelowna's….our market is uniquely our own and we are pretty stable here…maybe a tiny downward trend but I do not believe that we will see anything near a 20% decrease and neither does anyone in my field with whom I speak…but I don't have a crystal ball either so this is strictly my educated guessing. The funny thing about the 10-20% decrease you mention is that I did, literally, just leave a meeting with a few mortgage broker friends of mine and they seem to have their own opinions. They said that the great interest rates we have now will mitigate any decrease in market values as the forecast for interest rates is trending upwards….beyond that I have had many meetings with many people in both the local and canadian wide markets and the feelings are conflicted…simply put there is no way to know what will happen. All I do know is that there are some deals out there right now and a lot of inventory. If you really believe that the prices will decrease another 10-20 % next year why not just use that number in any offers you write now…what I mean is why not (for example) find a condo that is 200k asking price and offer them between 160-180k and if they don't bite move onto another one until someone does….that way you are protected should the price go down and if the price does not go down you will have that much more equity right out of the gate. Not to mention you will be able to lock in your five year fixed for close to 3%! Win win right! 

If you are looking to buy or sell real estate please give me a call!

Century 21 Assurance Realty Kelowna
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