Time to Buy, Sell, or Stay Put?

While some may call it an economic downturn, others may use the dreaded ‘R’ word – RECESSION.  Whatever term you want to use to describe the current state of the global economy, many professionals in the real industry use the term OPPORTUNITY.  Unlike anytime in history, falling prices, rock bottom interest rates and large inventories of homes for sale are making real estate a very attractive investment to average families and first time homebuyers.

At the end of the day, good times or bad, people need a place to live.  Do we rent, or should we buy?  Should we move-up, or stay put?  While we all need shelter over our heads, to purchase or not to purchase is major decision that everyone needs to approach realistically, based on individual circumstances.  This is where we all require the guidance of a professional to help clear through the forest and see the light.

For the first time in more than a decade in the Orangeville and Dufferin County real estate market, young couples can afford to buy a home, the costs of making a move-up have dropped substantially, and home ownership is attractive to investors.   Does that mean we should all dive head first into home ownership, or ownership of more home?  Perhaps, we should first make sure that the water is safe.  After last fall’s near break-down in the global economy (yes that includes Canada for, as much as we may like to think, we are not immune), wouldn’t it be wise to take a step back and try to learn something from our past?  People are once again lining up in droves to jump on the Home Wagon, banks have loosened up the belt buckles and will throw money at anyone who qualifies, the main stream media is pushing real estate so hard I can’t help but flashback to days of grade school peer pressure.  So how do home owners and home buyers sift through the information overload and emotional factors and decide what to do?  I ask my clients the same thing I ask my six-year old - are you going to do it just because everyone is doing it?  And honestly, is everyone else actually doing it?

Everyone needs to assess their own situation.  This means working with ateam of professionals that are there to guide and advise.  Home ownership is not merely a lifestyle choice – it goes beyond the basic need of shelter.  Yes, we all need shelter, but do we all need granite countertops, stainless steel appliances and a Japanese yen water feature in the yard, just because the Joneses do?  The fact is, home ownership is an investment unlike any other.  As an investment, how many people actually consult with a financial planner before they dive in?

We’ve experienced a period of unprecedented growth that we may never see again in our lifetime – at least some of us.  A lot of us have grown up accustomed to constantly rising real estate values, so much that we come to expect it.  Interest rates are low and money is cheap.  Given the record deficit, job losses we haven’t even seen yet, an aging boomer population that will wreak havoc on the health system, soaring interest and inflation rates still to come.  What does that mean 5 or 10 years from now?  Based on how things are going right now, a mortgage taken today, could result in payments that are twice as much and home values that are half as much.  Yes, half as much.  Whether you want to believe it or not, real estate prices can actually decline – and not the phantom drop in market prices that is hyped by the media.

Home ownership fills our basic need of shelter – but so does renting and so does staying put.  The decision to move-out or move-up should be based on your current economic situation – not the global one.  Decisions should be born from needs vs. wants and how much you can afford to buy should be based on your income and net worth, not how much the bank would like to give you.  Consider your future expectations about career, family and finances, and then make a decision to move if its good for you – not because everyone else is doing it.

For more information on whether moving out or moving up is the best move for you, please call me, Lora Schyven at 519-925-2761 and receive a free consultation with no obligation.

For all information pertaining to real estate in Dufferin County and Orangeville, ON please visit North of 9 Real Estate.