Hamilton Is Rising

by Darrin DeRoches December 19 - 25, 2013

Remax issued a report that Hamilton is expected to have the highest appreciation in housing prices in the whole country this year. That is big news when you think about the whole country, not just the province. They say the year will end up with a 7.5 per cent increase in property values and this beats out any predictions from the beginning of the year where most experts looked for a modest increase of two or three per cent. We beat it by double and then some. The average house sale for 2013 will be $387,000 dollars in our fair city. They expect it to break over $400,000 dollars in 2014 and that should be easily obtained. These numbers may not seem like a big deal to those from around the country but the homeowners in this city are making money.     I recently looked into re–finacing one of my income properties and the bank asked me what it was worth and, being a real estate broker, I figured I would go a little lower than I thought. Most people tend to over state the value but I thought $275,000 was a fair number. The appraisal was done and it came out as $291,000. The bank tends to value the properties a little lower than full value since they are lending out the money. If I was to go back year to year on the property it has valued up every year since I owned it. This year alone the property made $20,000 in value plus the amount paid down by tenants.     Five years ago, the average home in Hamilton was valued at $280,000 dollars. Next year this same home will be worth over $400,000 dollars. If this person had negotiated an interest only mortgage and did not pay down one red cent of their mortgage – they just made $120,000 dollars. If they sell it today, after costs they will still walk away with $100,000 for living in a home. If the same buyer bought any type of investment property in the same five years and had the tenants pay down the mortgage, they would stand to make another $30,000 dollars off the mortgage. They actually made $150,000 dollars in five years since they took the chance and bought a second property.     The moral of the story is that Hamilton is going to have the highest return in the country and maybe you should think about taking the money you have made in your home — re–finance it as I am — and invest it into more real estate so that in five years you will be up at least another $150,000 times the two properties (yours and the new one) so you will actually make over $300,000. Give me a call and we can help you find the right property and have one of our mortgage brokers get the equity out of your home and into a second property. 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.