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so you know what buyers will pay for your home in today's market. You
may also call me at 250-717-3133 for a FREE home buying or selling
consultation to answer any of your real estate questions.
Recently, we sent out an email requesting you to send us a real estate question you've had on your mind. The response was fantastic, so today we'll answer some of the more pressing ones.
You offered to buy my house if it doesn't sell in 29 days - how do you set the price? Am I going to lose money?
This is a great question. Our 29-day sale guarantee starts with an appraisal and we set the price at the market value the appraiser gives us. We are confident that the combination of the right price and our state-of-the-art marketing will get your home sold. If it doesn't, we'll buy it at its appraised value.
What is the state of the market?
We get this question more than any other, and the answer changes along with the market. We're six years from the 2008 market crash and yet prices have not returned to 2007 levels. It helps to think about market cycles: from 2008 to 2012 we were in a recession, or a slump. From the end of 2012 until now, we've been in recovery mode. After this phase there will be a boom. What we're starting to see is an incremental price increase - in the last year, we've seen an appreciation rate of about 5%-6% and we expect to see an appreciation rate of about 6%-7% next year. When looking at the market from this vantage point, you can expect a booming market by the end of next year or the beginning of 2016. That's when we'll see 2007 prices again!
Is there an industry-wide consensus on how much longer rates will remain this low?
As I'm sure you're aware, interest rates have been at all-time lows for the last couple of years. The Bank of Canada meets about eight times a year to discuss many things, interest rates among them, and their next meeting is December 3. It's within the realm of possibility that interest rates will go up after the next meeting. Typically, they look at economic indicators to see whether it's safe to raise rates, and our market seems to be doing quite well right now. If rates rise even a quarter of a point, it could cost you. If you have a $400,000 home with an 80% mortgage, going from 3% to 3.25% would change your payment by roughly $40. That wouldn't much affect you if you have a fixed rate, but it will greatly affect those looking to purchase a home. That quarter of a point rise will cost the buyer as much $10,000 in spending power! We're here to keep you in the loop, so you can make smart real estate moves when the time comes. If you would like more information on the topics covered today, or have another question you would like us to answer, don't hesitate to give us a call or shoot us an email. We would be pleased to assist you!
