Revised Predictions

by Darrin DeRoches February 24 - March 2, 2011

I am still trying to figure out what is going to happen this year in real estate.  So I looked at what CREA (Canadian Real Estate Association) had to say.  They started out the year with all this doom and gloom, but they are now looking at the numbers and slowing down their predictions. Their revised prediction estimates there will be 439,900 homes sold in 2011 which is down 1.6 percent from 2010. They had started out the year predicting a nine per cent decrease so 1.6 per cent drop is a big change.     The next view they are seeing a positive outlook on is pricing.  They now expect the market to rise 1.3 per cent in 2011, whereas they originally said it was going to drop 1.3 per cent. Again, a big change. As for housing starts, it looks like there will be a 10 per cent decline from last year but I am confident that this will not be the case by the end of the year. So now that the Canadian Real Estate Association has chimed in with a significant change in their outlook, what does it all mean?     We started out this year with some quack suggesting the market is going to drop 25 percent this year. All reports that I come across are looking at a small increase. The mortgage rules are changing in March and this will cool the market for a couple of months but overall it will be a good market this year.  There is no bubble or collapse about to happen.  The market is just leveling out and somehow we are going to avoid a big drop or adjustment. So what to do?     Buy, buy, buy real estate! Name any other investment that has weathered the meltdown of a global financial market, SARS in 2003 and 911 in 2001.  All these major events killed all other investments.  I mean what is left to happen? The real estate market kept moving forward throughout everything.  This is why you should invest in real estate.  Nothing has been able to take it down and even if something did – it will still hold value and bounce back.  This was a tough decade for real estate and it made money. So what are you going to do?     This is the last you will hear me preaching about the perils of investing in real estate.  It has proven itself over and over again.  I believe those who invest in the stock market are just gamblers and those who buy real estate are investors. I like to gamble for entertainment but I love to invest for my family’s future.  Or maybe I should have bought a lottery ticket this week and then invested the winnings into real estate.  Did anyone win? 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.