Predictions For 2012

by Darrin DeRoches January 5 - 11, 2012

Let’s pull out a little crystal ball and try to make predictions for real estate in our market of the year ahead 2012. I always find it interesting when ‘the experts’ predict the future and I usually mock them for being so wrong. So in all fairness I should take a stab at making predictions so I can look back in a year and see how right or wrong I am.     First things first – Money. Interest rates have maintained for the last 18 months or so. So in a bold move I will predict that interest rates will go up this year. I know, I know – I am going out on a limb and making such a hard prediction those interest rates will rise. We have been enjoying the lowest interest rates in my lifetime and we are not even taking advantage of it. My mortgage is due in six months and if I am able to renew at current rates I will be saving hundreds of dollars a month. Five years ago, I signed a high rate, in comparison and I was happy to do so. So when it comes due I will not only sign as fast as I can I will sign for as long as I can. There is no way rates will be this low again and even though it will take years to rise, I will sign for a long term as the rates will rise and hopefully level out once my renewal comes due in 5 to 7 years.     Second would be the market itself. Over the holidays people were asking me that they think the market is going to drop due to the crisis in Europe, etc. My prediction is the market is not going to drop, though it will level out. It was predicted that the market would only rise 2 percent in 2011 and about the same in 2012. Our market actually rose above 7 percent in 2011 and it would be easy to say 2012 will stay strong, but I really believe the market has to level out sometime soon. If the market will have small gains or stay pretty level this year. The old saying ‘what goes up must come down’ is true when gravity is involved, but with the financial markets being so volatile around the world a leveling out seems to be in order. Canada has proved in the last two hard years that we have kept our conservative ways and are a leader in the world when it comes to our financial markets. We do not seem to have any ‘skeletons in our closets’ unlike the states that are tearing down homes to right their failing market.     So my two bold predictions for 2012 are that interest rates will rise slightly and the market will cool and level out. It may not be to earth shattering but a consistent and strong market is a good place to invest in. I will seek out advice from other professionals in Hamilton and add it into future articles and see what they believe our year holds for us. Happy New Year! V Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at mail@uniquerealty.ca.