Which way is the market heading?

Some people believe the market is heading for a significant drop, and others think i'ts still going to continue to grow and go up. There are some who predict we are going to slow down and become more stable.  I for one believe the latter.

We are already seeing a slow down in listings compared to last year and in the amount of sales compared to this time last year; however the prices are still going up compared to last year.  I believe that has only happened because of the growth of the first 2 quarters of 2012.  I think we are going to see  prices stabilize.  Rates may go up a percent or two or down a percent or two depending on the activity in the marketplace. 

There are a few steps that you can take to reduce the risk of prices going down if they do.   Lock into your interest rate.  If you are on a variable interest rate or have a low rate, now may be a good time to lock in.  This way, when rates begin to go up as predicted during 2013, you are still paying a lower rate.   Pay down a little bit more of your mortgage.  You will have more equity to purchase a new home, and wubsequently would have to borrow less.  If you are purchasing a home, know all the costs involved -- the cost of the home, land transfer tax, all utlitlies, insurance, etc.  Make sure that you still have some money left over and you are not "house poor".   If you are investing in residential or commercial real estate, maybe take a partner, check in with tenants, increase the quality of the properties to keep tenants happy and paying rent on time. 

Its impossible to predict where the market is going to be.  You can see where i'ts trending but anything can change.  Rates can jump up, the world economy can recove;, however, the market has been a sellers' market for a very long time, and it finally looks like we may be trending towards a buyers' market.   It may be time to save those extra few bucks and get ready to buy!

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