| Buying Homes in KW in 2008 and 2009: There still is | | | | than doubled. However, it did seem like the Toronto |
| hope! | | | | market had a 'crazy' period not so long ago; housing |
| I have been hearing it all over Kitchener Waterloo: | | | | prices became grossly inflated; so a re-adjustment in |
| "Should I buy a home right now or should I wait?" | | | | value seems natural, even inevitable. In fact a recent |
| I've heard this from people who currently own a | | | | Globe and Mail article stated that, in a year, the |
| home and are toying with the idea of selling as well | | | | average house price in Toronto has dropped from |
| as from people who have never bought a home | | | | $434,022 to $376,896 and overall sales are down 38 |
| before and are thinking of dipping their toes into the | | | | per cent. In KW, although we once had a very |
| biggest financial investment of their lives. | | | | strong 'sellers' market", our prices did not rocket up |
| Nervousness and apprehension saturate the air. A | | | | as explosively as in Toronto, so the readjustment |
| recent article in the Record claimed that sales were | | | | may not be nearly as dramatic. |
| down in October of 2008 by 21.5% because buyers | | | | While house-flipping might be a riskier investment |
| were generally reluctant to put in offers. This has | | | | choice in than in the recent past, I'd wager that if |
| translated in a longer average time for houses to | | | | you bought a property right now (assuming that it is |
| stay on the market, although in KW so far, this time | | | | a viable choice in the first place) and held onto to it |
| difference hasn't added up to much. In September, | | | | for five or more years, you'd get your money back |
| for example, detached houses in KW were only on | | | | and more. Economic cycles are part of life, but I |
| the market a few days more on a average than the | | | | believe that our economic leaders have learned |
| previous year (45 to 49), and while this average | | | | enough to forestall a grand depression in the near |
| period may be expected to increase, I do not believe | | | | future. Am I being optimistic? Yes, but even the |
| that the KW housing market will slow to the same | | | | experts admit that economic forecasts have an |
| degree that Toronto has and will certainly not suffer | | | | element of faith in them; no one really knows all the |
| in the same way as so many regions in the U.S. | | | | economic variables that will pan out in the end or |
| Where does this floating nervousness come from? | | | | how creative we can turn out to be. |
| Some of it connects to recent global market | | | | KW's economy is especially strong and still growing. |
| downturns and some of it to the particularly | | | | Our universities and hospital are expanding; our |
| wounded economy of our giant neighbour to the | | | | downtown and shopping centres are being revitalized. |
| south. What happens to the States will inevitably | | | | New schools are being built and have just been built, |
| filter up to us-that is the common assumption. | | | | including the School of Pharmacy in downtown |
| However, Canadians differ from Americans in | | | | Kitchener. Real estate investors have been flocking |
| fundamental way. For once our widespread | | | | to put the big bucks in. As Dr. Sherry Cooper, Chief |
| parsimony is rising up to save us. To put it simply, we | | | | Economist of BMO Capital Markets stated in a report |
| haven't taken the risks that many American | | | | earlier this year: "Once the current weakness passes, |
| businesses have. We haven't been giving mortgages | | | | we expect growth in Waterloo-Guelph to exceed |
| to anyone who asks for one (mainly) so we are not | | | | both the Ontario and Canadian rates over the |
| faced with a nationally overwhelming subprime crisis. | | | | 2009-12 period" bmocm.com/economics. So why are |
| And culturally-yes I do believe Canadians have a | | | | we afraid? A crash in housing prices seems highly |
| specific culture with common norms-we Canadians | | | | unlikely. |
| have a horror about maxing out our credit cards or | | | | First time buyers can continue paying rent until they |
| engendering bankruptcy so we are not facing the | | | | decide to take the plunge; in the mean time, they |
| back-breaking, economy-crunching debt load of the | | | | may very well miss out on that elusive 'perfect' |
| US. In short, we are in much better economic shape. | | | | house out there. Likewise, sellers can continue holding |
| Are we in for a bit of an economic downturn here? I | | | | onto their property till brighter economic days, but |
| wish I could say no. In fact, like you, I wish I could | | | | when that will happen, remains to be seen. If sellers |
| say: if you bought a house right now and sold it in a | | | | plan to buy another property in this current 'buyers' |
| year, you'd make substantial profit. It seems likely to | | | | market', they may lose a little in the selling, but gain a |
| me that our housing prices will stop increasing so | | | | little in the buying. It all evens out. |
| precipitously, may even dip slightly, but I don't believe | | | | So our local economy is still growing. The housing |
| that we are in for the same kind of real estate | | | | market is actually pretty stable; it is only our |
| shakedown that Toronto has recently experienced. | | | | perceptions of it that have gone a little wonky. As |
| As a former Toronto home owner, I have | | | | Michael Pritchard said "Fear is that little darkroom |
| experienced the Toronto real estate boom firsthand. | | | | where negatives are developed". So I say-take a |
| In twelve years, the value of my property more | | | | chance, believe in us. KW is a wonderful place to live. |