Buying a home — is it all about timing, or confidence?
Probably it is a combination of the two is the best answer. While buying at the peak of a market at the highest price is not our objective it does happen. Some buy while the market is trending down.
What doesn't happen is a stop to all buying and selling. There are several reasons why that is so, one of which is because you "NEED" to buy or sell. Those buyers and sellers that are in the real estate market out of necessity are generally always there, albeit with a different face name but the necessity buyer and seller is there.
Which buyer or seller are you? The "Need To" or Want To"?
Need to?
If you need to buy a home in Red Deer or Central Alberta, there are plenty of homes to choose from. Presently in the City of Red Deer you will find close to 600 properties (homes) listed for sale on the MLS.
If you need to sell your home in Red Deer or Central Alberta you can do that as well. The Central Alberta REALTORS Association has recorded 506 sales for the month of July. So yes, sales are occurring daily. If you have been following my previous posts you can see that sales are occurring weekly, and in fact daily.
The need to be in the real estate market is a reality that transpires and can yield success.
Want to?
"I want to sell my home if I can get a good price and find a suitable more desirable replacement". This may be you or...
"I want to invest in real estate, and earn rental income and over time have capital growth". This could be you as well.
Both are statements that describe a "want to" buyer or seller. An real estate investment buyer may have money they need to invest, but they don't necessarily need to invest it in real estate or in this market. On the contrary, they can put that money in other investments and markets at any time. So is now an opportune time to invest in Red Deer real estate?
A recent article in the Red Deer Advocate newspaper suggests that it is. Here is an excerpt from the article found here: Although Central Alberta boasts “opportunities” and “land mines,” said Campbell, it has lots of appeal for real estate investors. “Central Alberta is one of the top regions right now,” he said. “It’s ridden out this downturn better than just about any region in the whole country.” Don Campbell is a founder of REIN. A group that is made up of real estate investors across Canada.
Why you should be buying now, and move into the "Want To" Category:
* Interest rates are low.
* Listing Inventory has decreased and displaying signs of a Balanced Market.
* Economy is Improving and on the Rise.
* Tax Credits for 2009
Despite sounding like a broken record, rates are low. What else do we know about those rates? The Bank of Canada has committed to holding rates. What you should be taking away from that is, "What will happen then?". We are not sure, however it is highly probable that if national economic conditions improve between now and then you could see those rates rise. Bottom Line:lock them in now while they are certain. The impact of rising rates on payments could be huge.
* Listing Inventory has decreased and displaying signs of a Balanced Market.
Increased supply of listings is a key indicator of a buyers market. The fact that the number of new listings for sale is distinctly lower than 2008 is a signal that the market has CHANGED. In my opinion we are in a balanced market. Some price ranges are not quite representing all those signs but overall the Red Deer real estate market is.
Listing Inventory declined from 2008 to 2009 by 6.69% in the City of Red Deer, while July 2009 declined 18.62% from July 2008 in Red Deer.
When supply decrease the pressure on price eases. We have seen the average price remain relatively stable for quite some time now.
* Economy is Improving and on the Rise.
Have you been watching the cots of a barrel of Oil? How about Gas prices. Natural Gas has been hit the hardest and been a lot more depressed than Oil. Not good news at all. Red Deer is very much a Gas services economy, and the low rates certainly have an impact. The positive side (if you want to look at it that way) is they appear to be at the bottom. For those companies involved in Gas services many have already done their lay offs. It is difficult to imagine a further decline in Natural Gas Prices (**Note I am not a commodities expert**). While it is good for our heating bill, I think it is bound to go up soon.
* Tax Credits for 2009
Did you know that there are first time home buyers tax credits as well as home renovation tax credits? Will they still be there for 2010? We're hoping they increase the tax amounts but anything is possible. If you want to take advantage of them the window of opportunity to record that credit for the 2009 year is closing. Who is eligible for the HBTC? An individual will qualify for the HBTC if they acquire a qualifying home; and neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the year of purchase or any of the four preceding years.
I posted a poll on Twitter for a couple of days and the response indicates that yes people that responded also agreed that you should be buying a home today. While the economy is not where it was, it is improved since the fall of 2008 and January 2009. There are several signs that the economy and the real estate market are on the rise, Perhaps slowly , but the worst appears to behind us for the time being. Some headlines have stated that we are no longer in a recession and the ones lending out mortgages are making money.
Your Friend in Real Estate,
— Patrick Galesloot