All I read is that the market is awesome, everything is awesome, prices are up and going higher, and home ownership is perfect for everyone.
Frankly, I’m tired of this rhetoric. If you are reading some news, such as a developer telling you they are projecting a 5% – 7% increase in prices, ask yourself, WHAT ELSE COULD THEY SAY? If they said they expected a decrease of 5%, you wouldn’t buy their product!
Look to neutral third parties for this type of info. On this topic, and in more detail, watch the blog below.
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Transcription of Video Blog:
Hey everybody, Rowan Smith at the Mortgage Centre. I want to talk today about some of the overwhelmingly exuberant good news that keeps coming out in the media right now. A lot of it, I encourage you to view the source of who is issuing this news, before you really put a lot of stock in it.
I recently read an article from the Rennie Marketing group talking about some of their projects that they had on the go, and how they were ecstatic there was going to be a five to seven percent increase in real estate prices in Vancouver.
I look at that and I say, “What else could that organization say? What else could somebody in that situation say, when it’s their financial livelihood?” Now I have a vested interest in the real estate market, but I also have a fiduciary duty to my clients. If I see them getting into something I think is a bad financial move, I have to tell them.
Now that’s very different from a developer whose financial interest that they’re protecting is their own. When a developer issues a statement saying, “Oh, I’m so glad the market is recovered, ” and “Wow! Things have really taken off, ” and they turn and point to stats that have been issued by the mass media in the last couple of months, chances are that trend has already run it’s course.
It’s time and time again that I see great, great news come out, and immediately we seem to suffer a pullback. Now back in 2007, there was a lot of exuberance. People were writing offers, multiple offers, asking me, “Could we go in with no subject to financing?” Generally, the answer is “No,” by the way.
They were going in against 16 other offers, to try to get in on that property and not getting it. Even though they were going 20 percent over asking price and this kind of thing. That kind of behavior is back again, and with it comes the irrational exuberance of the banks who are now suddenly going, “Well, the market’s clearly recovered. Now is the time to get in.”
The chances are, the time to “get into the market” should have been back in January of 2008. When everybody was screaming and crying about real estate being a terrible investment.
Of course, this is 20/20 hindsight that I’m using right now. I, myself, purchased something at that point in time and I think that anybody that did, has reaped a lot of rewards as a result.
I think the old saying goes “when there’s blood in the streets, buy real estate, ” and that is never more true. Right now in the Vancouver real estate market, there is no blood in the streets. If anything, there’s a lot of wolves. I’m Rowan Smith for the Mortgage Centre.
