Happy New Year, everyone!
It's January 6, 2010 as I write this blog, and it's very interesting to see how the market has changed over the last year, eh?
At this time a year ago, everyone had gone into hibernation, and adopted a "wait and see" attitude with regards to the economy and the housing market. One year later, and the market has changed drastically! Prices are going up due to several factors (low interest rates, a shortage of homes available for sale, first-time buyers getting into the market, etc) and we're actually seeing bidding wars outside of downtown Toronto!
Here in the west GTA (Brampton, Mississauga, Milton, etc), we're seeing steady price increases. This is mainly because the market has changed into a sellers market, so sellers can charge a little more (but if too overpriced, their homes still won't attract a buyer).
So, what do I think will happen over the next few months? Well, here's my prediction...
1. Prices will continue to increase during the spring market, especially in homes priced under $400K.
2. The spring market will be especially strong, as sellers and buyers try to sell or buy with a closing date prior to July 1st when the new Harmonized Sales Tax (HST) will come into effect. HST will not be charged on a resale home, but on the services surrounding the sale of a resale home i.e. lawyer's fees, home inspection services, staging services, real estate commissions, etc. For brand new homes, HST will be charged on these services and also on the sale price of brand new homes that sell for more than $400K.
3. I think interest rates will continue at their historic low levels for the first half of the year, then we might see a small increase or two in the last half of the year. This is good if your mortgage is coming up for renewal within the next few months, or you're thinking about taking out a mortgage because you're going to buy a home (call me if you are!).
4. It wouldn't surprise me if the federal government announces a change sometime within the next few months (probably with the tabling of the new budget on March 4) to CMHC lending rules, requiring home buyers to have a down payment of 10% instead of the 5% that is currently required. This will "cool" off the market once this change comes into effect, as many first-time buyers only have 5% saved, instead of 10%.
So, those are my thoughts. Feel free to give me a call or send me an email if you have any thoughts, too. And, if you're considering making a move in the near future, don't forget to get in touch!
I'm ready when you are.
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