As we reach the late stages of a 15 year real estate boom, I'm convinced prudent home buyers in Kitchener Waterloo need a 10 year plan. Why? First, let's look at history. Regular readers of this Kitchener Waterloo real estate blog will know I sold real estate through the recession of the early 1990's. In the fall of 1992, I helped a wonderful retired couple find an affordable Kitchener condominium(pictured below). We managed to negotiate the asking price of $93,899 to a sale price of $86,500 or 92% of the asking price. In fact, the sellers were happy to unload it as it had previously sat unsold for 184 days!
Fast forward to the spring of 2000. The husband had passed away and his widow wished to move closer to family in Toronto. After nearly 8 years, what was the property worth? Applying the average recent real estate price appreciation of 5% per year for Kitchener-Waterloo, it should have sold for around $120,000. Unfortunately, it sold for $86,000 or $500 less than they had paid nearly 8 years prior.
This property was by no means a unique situation. Many people who bought at the height of the real estate boom in the late '80's had to wait until 2000 before they could sell for what they paid.
So why should home buyers in Kitchener Waterloo buy a property and plan to stay for a minimum of 10 years? House prices in Waterloo Region have doubled in the past 15 years but with today's low inflation, it's highly unlikely that will be repeated. The local economy has contributed but low interest rates have played a much bigger role. Currently, the Canada Mortgage and Housing Corporation and the big banks are tightening mortgage lending with the view that mortgage rates have nowhere to go but up. In my view, the best case scenario for Kitchener Waterloo real estate prices is an increase of a few per cent yearly. In short, housing, like the example above, is about to become shelter again.
After nearly 26 years as a Century 21 Realtor in Kitchener Waterloo, I'm certain of one thing: happy clients are the key to success. So here's my value proposition as a buyer's agent: The advice I provide is designed to help home buyers avoid mistakes that could end up costing them thousands of dollars.
If you are a Kitchener Waterloo home buyer and feel you could benefit from prudent advice, feel free to call, text or email 519-505-4488 firstname.lastname@example.org.
Century 21 Home Realty Inc. Brokerage
"Delivering results since 1989"