CRAZY KIDS

by Darrin DeRoches March 11 - 17, 2010

The 18–24 demographic is supposedly going on a house shopping spree. It seems someone (the Royal Bank) did a survey and 15 per cent of this demo is most likely going to buy a property this year.  Last year, only 8 per cent said they would.  The banks have time to do these surveys since in the first quarter this year they made $5 billion, so maybe they know what they are talking about.     So why is this news?  Anything the 18–24 demo does is exciting to marketers, advertisers and the big news guys.  The low interest rates, low down payments and longer amortization are the reasons the young demo is intending to buy. Or, is it because they have a job and realize playing Xbox in their parent’s basement is getting old?  Maybe they have a desire to build wealth, to paint walls, put together furniture from a box, pay their own bills and create roots.  No, it’s probably because money is cheap and banks are willing to lend again!     The majority of Canadians believe that investing in a home is their best bet.  26 per cent believe their home will be the big nest egg for their retirement, so buy when you’re 20, take the 35 year amortization and it’s all freedom 55, baby! But, there is always a but! It seems the majority of Canadians are taking lines of credits against their homes and trying to live la vida loco, keeping up with the Joneses. So maybe it will be retirement at 65 before everyone cracks into the nest egg they call home.     The good news is consumer confidence is up, but the reality is the banks are lending again.  Did I mention they made $5 billion in the last three months?  So housing starts are up, the crazy kids are jumping into the market, and spring is coming early. So how do I profit from all of this?  Sell your home – now!  If you are in a starter home, especially in west Hamilton, sell it! The market is heating up, inventory is low and homes are selling fast.  Sell your starter home and move on up to the biggest home you can afford.  Lock into a five year mortgage and ride the wave… or wait and be stuck with higher rates. Banks will surely tighten up their purse strings and the seller’s market will pass. If you buy now, you can also avoid the HST.                                                                 [DARRIN DEROCHES]