Newsletter monologue

What is going on?  Is the market crashing? Is what's happening in the U.S. going to happen here?

GREAT question, but who has the answer?  Here is my take on the situation.  For those of us that were in the market back when interest rates were peaking 12%, 18% & 22%, borrowing money was a tremendous burden, one that many people were not able to manage.  This was a difficult time for homeowners and would be home owners.  Sure prices were lower, but rates were making it impossible to maintain.  Fortunately, although prices have increased dramatically, the cost to carry the property has been very affordable for many home owners.

   Un-like the U.S., Canada's CMHC (Canada Mortgage And Housing Corporation) requires that a homeowner contributes at least 20% of the purchase price as a down payment.  If 20% is not possible, a mortgage is still available but an insurance penalty is added to the mortgage, creating a higher mortgaged amount.  However this forces the purchaser to invest "their money" 20% into the deal.  WE recently had a stock market situation, where world markets dropped  dramatically only to ‘bounce' back the next day.  Money was lost! - but money was made!

   "but how is all of that going to effect me here in Mississauga"?  Well our housing market is still looking strong.  We are still seeing price increases and sales are still good.  And why shouldn't it be.  Erin Mills has a strong reputation for Family nieghbourhoods, parks, paths & trees.  Big business is here too.  As a city, we are still growing. Erin Mills's value has increased and we will be seeing a 4bdrm detached home over the $500K point (Phesant Run).  It is my opinion that with all that is going on around us, World markets, U.S. Economy, Elections etc, we all still need to live somewhere. Our children still need to go to school, we still need to go to our jobs.  With that, buyers are still able to afford to buy as long as the lending rate is still affordable.  As long as it is still affordable buyers will be buying.  Recently those lending rates have increased, interestingly however, there is an indication that rates will drop this year before heading up again.  It is during this time your opportunity to make your move will be most advantageous as your cost to borrow will allow you that move up. If you have been dreaming of a move, the next few months should be of great interest to you.

For more information visit www.Movewithpaul.com - Market Conditions or visit www.CMHC.ca.