Look Back To See The Future

by Darrin DeRoches June 20 - 26, 2013

We are breaking records in sales and everyone is jumping on the bandwagon that the bleak outlook for the real estate market in 2013 was completely unfounded. Sounds like the same old broken record if you ask me. At the beginning of the year they always forecast the “big doom and gloom”. Now that we are in the middle of the year, and hitting above average in sales and listings with an increase in values, well let’s all agree it will not be that bad. At the end of the year we will beat all expectations but next year will be a “huge bubble burst!” again, which never happened.     Let’s be realistic about the real estate market and realize that it has to level out and maybe even dip in the near future. The best way to predict the future is to look into the past and see that the market always corrects itself. The mortgage rates are staying low and the rules have been tightened but people are finding a way to still buy more and more expensive homes.  I can hit you with all the statistics but when you read them it is a bit confusing. Sales are literally about one or two homes higher than last year but the average sale price has increased and that is the real news. Get used to the fact that Hamilton is not a second class city and people are investing in our real estate and companies are moving from Toronto and Burlington and new companies are sprouting up. Why?     Hamilton is the only real city next to Toronto and you can get so much more for your money in Hamilton. Whether it is commercial, land or residential, our values are holding strong. Barton Street just had a successful “open house” on their street and people are taking notice. Sure the street is a little rough but one by one it will become better and better. I had a past client contact me yesterday to look at properties in Hamilton and his big question was where to buy? He is not ready to buy until next year and by that time prices will still be rising and he will be priced out of certain areas. Look at James Street. There are properties listed for over a 1.2 million dollars and quite frankly it seems a little high. Five years ago those same properties would be crazy to ask for half of that price and no one would even think about buying them. Barton Street has a long way to go as does the rest of James Street but the new Go station and new football stadium will help tie these areas together and you will see a big difference.     Five years from now the waterfront, James Street and Barton Street will be drastically different and if you buy into it now you will be able to double your investment. Quality real estate will always sell or rent for a high price so buy low today and sell high in five years. 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 sold@uniquerealty.ca.

Break That Mortgage!

by Darrin DeRoches May 30 - June 5, 2013

I may not be a mathematician but I do understand when it is a good time to make a move and make money. I have spoken with several mortgage brokers about current rates and where they are going. They are all saying the same thing. If you have a current mortgage over 4 per cent, then it is the time to break it open and re–mortgage. At this point I could pull out some charts or graphs to explain the savings but let me put it in simple terms.     Today’s mortgage rate is as low as 2.79 per cent for a 5 year term so if you are paying over 4 per cent then it is worth it to make the change. Yes there is a cost to break a mortgage but it usually cost about .05 per cent which is nominal. Take this half of one percent and the 1.2 per cent difference it can really make a difference. I renewed my mortgage last year since it was up for renewal and it saved me almost $250 a month. Back then I wrote about it and suggested everyone should take a look at their mortgages and do the same. A year later mortgage companies are now advertising for you to break your mortgage and realize the savings. The reasoning is pretty simple – competition.     The mortgage game is starting to get more and more competition and that is good for the consumer. Some companies will even cover the costs of breaking a mortgage and switching over to them. Some offer free gifts but the best way to go is look for the best deal. The rates are supposed to hold until at least next year but they have to rise sometime and if your mortgage is over 4 per cent you will be renewing when the rates are rising and this is the real problem. You break your mortgage today and take the longest term with the lowest rate. It is generally a 5 year but some companies are pushing the 4 year since they know the rates will be higher then and why give you another year at these ridiculously low rates.     So where do you start? Take a look at your mortgage rate and if it is over 4 per cent then send me an email. I can recommend you to several different banks or brokers who will help you make the best decision and show you not only the savings but the peace of mind that knowing that you will have the best rate possible for the next five years. These brokers will shop your mortgage around and find you the best deal out there. If you are comfortable at your bank then just email me which bank you would like to be at and I can refer you to the best mortgage agent in that bank. I stayed with my bank by simply “negotiating the rate” and by doing this we have a great low rate and they paid all costs. Break that mortgage! 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 sold@uniquerealty.ca.

Don't Believe The Hype

by Darrin DeRoches June 6 - 12, 2013

This past weekend there was an article written about Hamilton Real Estate Market called Housing Gone Crazy: Bidding Wars and I am a huge supporter of the city but don’t believe the hype. In any market, there are always bidding wars and houses going over asking but you have to look at the other side of the story to really understand what is going on in our housing market. The article is not wrong in its reporting of these situations, the fact that listings are way down, and it is a seller’s market, but let’s not get excited that the market is becoming unaffordable and that all these deep pocketed Toronto buyers are running into town and buying anything they can find.     The situation where a home went $170,000 over asking is a reflection of the situation and not of the market itself. The agent “purposefully” listed it $70,000 under their perceived selling price, which is a risky way to sell a home. This is done to create interest and create the “bidding war”. In this case the home sold $170,000 over asking and in reality $100,000 more than the agent expected. Who cares what they did? It worked this time, but this type of “salesmenship” does not always work and what if the home is priced way under asking and no one offers that price? The house sits and does not sell and when remarketed it is a real hard sale since you have to explain the huge rise in price.     Pricing a home under or over the “real” market price can really mess up a sale and then bring bad press to the market. If this house was priced accordingly and then sold for a great price fast, the owners would still have the sale and money in their pockets but no headlines or story to tell “$170,000 over asking.” You do not read about the houses that sell for the right price and fast. Which is the real story in today’s market. The home that is priced right is getting a lot of attention, maybe multiple offers but most importantly – they are selling quickly. A fast sale is the best indicator of the market. Most agents do not price homes way under value to create headlines but rather price them right and sell them quickly at top dollar. This is what is happening in our market today and that’s what makes it a strong, vibrant market.     The market has not “Gone crazy” but rather it is strong and powerful like the city it is in. I feel bad for all the agents who had calls this week from their sellers quoting the article that the market has gone crazy and asking why their property is not selling. The indicators are showing faster sales and an increase in selling prices, but don’t get caught up in the hype and list your house too high because it will just sit on the market. For every pseudo success story there are five homes sitting on the market priced wrong. 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 sold@uniquerealty.ca.