If you want to see the future the best place to look is the past. One of the few benefits of age is experience.  I did business in 1980 when interest rates hit 21% and I did business in 1990 when the market made a dramatic drop.  I feel we will not see prices as high as the spring of 2015 for 3 to 5 years. 

Now with that in mind - I have always felt  one should not pay more than 25% of their income on housing.  The average price of a home in Dundas, On. is approximately $420,000. plus closing and moving costs you pretty much need $50,000.  The average household income in town is $82,000. per year.  Without outside help this is a formidable challenge, but assuming you have it - you now have a mortgage of approximately $380,000.  Over 25 years at 2.75% a payment of about $1754. should do it! Now add $250/month property taxes, another $120/month hydro, $200/month heat and nothing for maintenance or insurance gives us about $2300.  This puts us a little more that 33% at 7% is $2667.18.month plus the usual cost which I expect to increase.  We have housing expenses at a conservative $3237/month.  This represents about 47% on housing.  

Now I am not an economist but I can't see that working out well.  I still believe that real estate is the bluest of the blue chip investments their just not making any more, but after July 1 we will see the occasional anomaly but overall expect a softer market in 2016 and 2017. 

 This being a blog and not a rant this is just one example of what I have used to base my opinion on.


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Harold Pope

Harold Pope

Sales Representative
CENTURY 21 New Age Realty Inc., Brokerage*
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