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The more I hear about "the economy" the more frustrated I become as a real estate agent. Everyone talks about the doom and gloom, which only puts buyers and sellers on edge.
The unemployment rate is up but it is not soaring. Average prices have increased despite fewer sales, so buyers are obviously able to purchase at higher prices in "this economy." Consumer confidence is down, but I think this is a result of sensationalizing matters instead of putting them into perspective.
Interest rates are low, so why not take advantage of them? As well, Canadian mortgage products and insurances (CMHC), government and bank guidelines are stricter than in the US. In short, Canadians enjoy a healthier real estate market compared to the US.
Though the growth in real estate in Montreal has not been as big historically as some Canadian cities, it is this steady growth that has saved Montrealers from an imploding real estate market, as demonstrated elsewhere.
If you are thinking about selling your home in this economy, the asking price is very important. Just 5 per cent above the average could eliminate potential buyers. Some will not qualify. Others may just qualify but the bank may ask that they put more money down and the buyer is not able to.
Ask your agent to provide you with a detailed market analysis to demonstrate what your home could sell for. This should contain comparable sales in the last six months and include active competition in your area, which is your real asking price cap.
There are always buyers, no matter what state the economy is in. Sellers should expect that the average sale time may increase and that buyers may be more cautious. Buyers may want to negotiate more, so don't be so quick to refuse an offer. Keep negotiations moving forward.
For readers thinking about buying a condo in Montreal, it's all about resale. Parking, garage space, and an elevator are sought after features. Also, condos with thick concrete floors are more desirable because they are quieter. Location is important, as is proximity to public transportation and other services. However, it is rare to get everything you want in a property and if you do, you will probably pay a premium for it.
The average sale price of condos continues to increase. Fuelling this could be the "Baby Boomer Echo." They are starting to retire, which may help to maintain the demand. They are looking for smaller homes and conveniences now that the kids have moved out.
If you're thinking about buying a condo or home in the US, no one has a crystal ball that will predict what the country's economy will be like in six months, let alone a year from now. Some reports have suggested that the US real estate market has reached its lowest, and in some areas there are reports of positive average sale price increases. It really depends on where in the US you want to buy.
Also, there are so many homes for sale in the US that it makes looking almost impossible, unless you have a single location in mind. There are hundreds of thousands of properties for sale in Florida alone. One should really focus and be prepared to research for a while. A real estate agent can help you find something but he/she is also limited to the same factor as you - time. Be patient.
Buying for investment with the thought of renting is different from purchasing to occupy. You need to talk to a real estate agent to understand what is involved to be sure that your reasons match the desired goal. If a Canadian were to purchase now, it is very likely that in years to come, a nice profit will be made. But one buys real estate for a reason and depending on that reason, it will either be a good time or a bad time. Talk to a real estate agent and explain your purpose and goals, both short-and long-term. The advice you get is usually free.
Daniel Smyth is a real estate agent with Groupe Sutton-Cloden Inc. in LaSalle.