So Let's Talk Numbers

by Darrin DeRoches February 10 - 16, 2011

So let’s talk about some numbers starting off the New Year. In the Hamilton-Burlington market there were only 613 units sold in January 2011 which is a 7% decrease in sales from the same month last year. The month of January is usually slow and the cold weather does not help anyone. The average sale in the month of January was $217,014 which is an increase of 9.4 per cent over January 2010.  Remax just released a study that showed the overall value of homes in our area in the last decade increased 6.8% per year. So if you bought and held property in the last decade you made 6.8% in rising value, plus you probably paid down almost a quarter of the property in mortgage payments.  Add the increase in value of 6.8%and the 25% in the pay down of the mortgage and you have made money.     The next set of numbers may not sound as good since some “so called experts” are speculating that the values of homes in Canada will drop as much as 25% in the near future.  I call bullshit, but that is just me.  Big numbers in a vague so called near future.  The old saying ‘what goes up must come down’ will hold true in this case.  The real estate market has been strong in the past decade and at some point It will have to slow down or settle.  Today some of the banks increased the mortgage rates up .25% to about a 5.44% mortgage rate for a 5 year closed mortgage.  Why all the doom and gloom? The bank rate stayed the same – there should be no increases.  Banks are like the oil companies.  A tropical storm somewhere in the world will increase the price of gas.  When the bank rate rises, the banks raise their lending rates.  But if nothing is happening, they just make it rise slowly and hope nobody complains.  A .25% increase no big deal or paying $1.15 at the pumps – who cares?     Weather and public perception has a great influence on the buying and selling or all consumer goods. The cold and snow has hurt the sales in the start of the year but the little wharilton Willy ground hog did not see his shadow which means an early spring.  If this does happen than the market will gain the 7% decrease and roll into a brisk spring season.  I am not cleaning up the golf clubs just yet, but if you are looking to buy or sell in the next quarter or so – be prepared for a brisk market.  Once we get out of this deep freeze – things will be moving pretty fast!  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.