Saturday, February 6, 2010


The headlines in the recent media coverage were certainly scary enough: Home ownership more expensive in the last quarter of 2009 and beginning of the new year; underwater mortgage dog housing sector; market rebound presents new risks, Economic recovery underway but system still fragile. And so on and on. Anyone reading these reports might be spooked into taking action, weather it’s buying before you’re ready or taking on mortgage that may not be best deal for you could get or buying before selling or visa versa...

As a recent or prospective home owner, the last thing you should do is allow such media report to just influence your decision making process and make it informed.
In many cases, these stories are based on big pictures and reports that discuss national trends and averages. When you buy a home, however you do not buy the entire Canadian market. You don’t even buy provincial, regional or even city-wide ones. You buy just one property in a particular area of a city or town.

There’s a big difference. What happens in one neighbourhood may be completely different from what what’s going on in another in the same city, or from one street to another or next one and, of course ,from house to house. If you’re looking to buy a home in Toronto for example, what do you care that the national average home price may be increasing or decreasing, influenced by things going on in market that are completely irreverent to yours? May be TREB statistics can be more helpful in those cases. Or lets say if you are buying in Hamilton, Windsor or Oshawa - the provincial average is down because the housing market has been hammered during the recession and obsolesces, thanks to troubled auto industry?

The fact is, real estate markets are specific. Most people base their decision on where to buy largely on where they work and where they want to live, within a reasonable commute, and of course weighing their option for housing types and prices.

Another major consideration should be the underlying economical fundamentals of an area over the long term, say about five years. When one big plant is closed in the area, no doubt there are lots of media reports predicting dooms and glooms of the city, sending home owners in to panic to sell their properties and head for greener pastures. Informed clients-agents, or prospective buyers, on the other hand, would have known the city can see other upcoming development & projects and economics of shifting of balance. Making the new corrected weight replacement of old economical engine of growth at rise.
The point then is to become as well informed as possible, so you can decipher misleading reports from you really should pay attention to.
Part of that is understanding of the original source of housing reports. It is a credible media outlet that you believe truly understands real estate? Is it a realty, which has vested interest in real estate transactions? Or is it from an objective third party that has absolutely nothing to do or gain with or from its conclusions, good or bad and that is not trying to sell- or buy- anything?
One great source of info resource is Canada mortgage and housing corp.(CMHC),the federal govt. agency you may know mostly as a body that provides high ratio mortgages insurances. They produce excellent report and dig deep before and analyze for the factors that impact housing trends.

And even when your particular area may be affected by a “downturn”, remember to look at the big picture, long term. Lets say you own a home in Toronto worth $ 300,000 and a report warns that average price in the city are off 10%, or $30,000 in your case, reducing your value to $ 270,000. but if you bought the property five year ago for $ 200,000, the value had already increased 50% to reach $ 300,000. so, in reality, your “market” is not down 10%,its actually up 35%.

So, next time when the “scary” report comes out, make sure you have done your home work and you know whether its cause for concern, celebration or just something to absorb as part of your ongoing education as a homeowner.

For further understanding and to find out current value of the property call me and I will be more then delight to help you for your real estate needs

Vijay Gandhi,
Sales Representative- REALTOR®,
RE/MAX Dynasty Realty Inc. Brokerage*
C: 647-267-6338
O: 416-335-4335/905-471-0002
F: 905-471-7441