Real Talk!

Terms like uncertain, declining, tightening, slowing and recession have become an ever- growing part of conversation these days. Suddenly, debt has become an obsession. Some people think it’s all Bernie Madoff’s fault. Maybe it is.

Steve Rosen of The Kansas City Star said this about Madoff, “Don't trust someone with your money just because they happen to wear a nice suit.”

Now let’s have a little straight talk here. Sure, banks are stiffening lending practices and CMHC is tightening its high ratio program but the news is full of stuff that is a little misleading, too.

Media tends to rely on statistics to inform the public about the real estate market. It doesn’t take much effort to realize that any statistical report can be easily manipulated. In the Canadian real estate market, MLS ® is regulated and controlled by the Canadian Real Estate Association and often commentary focuses on the reports that they release and often those reports are country-wide.

I'm sure I don't have to say that what is happening in Newfoundland has little or nothing to do with real estate trends in Bancroft or Barry’s Bay, Ontario.

Canadian statistics are being affected by the markets in places like Alberta, where the oil sands boom has caused a totally regional market in Calgary and Edmonton. Housing prices were astronomical a year ago… and reports now suggest they are plummeting. Bathurst, Belldune, Big River and Salmon Beach are reporting increases in activity and prices.

Buyers and Sellers have to understand that news reports suggesting an uncertain “global economy” has only a minimal affect on regional real estate markets. In the Renfrew, Haliburton and North Hastings areas we don’t expect any further correction- aside from the usual seasonal variations.

By the same token, a market correction is not something to be afraid of. In the crash of ’89, heck, even in the great depression, the average person did experience some struggle- while at the same time, a small number of brave souls went against the tide and made their fortune. Property can be viewed as any other product. Prices go up, prices go down and prices are negotiable.

It is possible to build a tremendous amount of wealth in troubled economic times if you keep to some basic fundamental strategies:

1/ under most circumstances you shouldn’t count on quick gains, be prepared to hold on for longer term increases
2/ it’s not a good time to speculate for fun- don’t get in too far over your head
3/ be aggressive with offers
4/ do your homework and value invest
5/ with so many options and so many places to look for property; find a well-informed Realtor to work on your behalf
6/ try to put 10% down
7/ shop for financing, carefully
8/ if you select a fixer-upper, be sure that you can handle the job, within the budget

Granted, not all property transactions are cold, calculated financial maneuvers and the aforementioned advice does not hold true in every instance. Being a property owner is something that most people aspire to. It’s so much more than a simple investment.

Wasting good money on rent when you could be building equity is never a great choice- be it your residence, seasonal, or vacation property. Once you’ve spent it, it is gone and that doesn’t feel good.

During dark days of media hysteria,casual conversational panic and fear mongering it’s easy to feel bad about your financial situation. Property ownership provides a sense of pride and accomplishment. Ownership remains a common dream and it’s realizable- particularly in low interest times. Finding a nice deal on a nice property is a feel-good opportunity.

& Coming back to this region, in particular…. there ARE a lot of good deals to be had, it’s time to start looking and be ready to make the jump. Remember- ownership provides the opportunity to build equity. You may not see a huge increase over night but equity is certain to build and, in the meantime, you will have a wonderful place to enjoy.