Historically speaking Now is the best time to buy a home

Thursday October 30th. 2008
Toronto Real Estate, Are mortgage Rates dropping.
I get asked that question often. They go on to ask, what do you see happening with interest rates in the next weeks / months / year? And is it a good idea to be looking to purchase a new Toronto home now or should we wait until spring 2009?
My Answer:
Right now housing prices in the GTA have dropped to an average of about $345,000 and with interest rates being at a record low of 5% and with another rate reduction coming it's historically speaking the best time in the past 30 years to buy up or to just buy and become a home owner for the first time.
If you’re buying to fix up and sell for a profit then things are some what tougher to sell today since this has become a buyers market, but if your buying now and selling in a year only time will tell but overall the Toronto real estate market is stable. Anyone buying a new home in Toronto for the long term will never regret it. There are political talks going on now to open up the borders to Canada to allow more new immigrants to move into Canada to aid in these slower times, increasing the demand on housing thus increasing the Toronto property values.
I looked back at the Toronto area average home prices going back to 1980 when the average home price was $75,000 and interest rates were 14.5% up until today.
1988 the average Toronto area Real estate prices were near $300,000 with a interest rate at that time of approximately 11.5 %. Compared with the $345,000 average price of today and with interest of only 5%. This truly is the best time ever to buy or buy up.

Question #2,
Should home owners be locking in their mortgages or staying on variable rates.
My Answer:
Waiting and capitalizing on the absolute bottom will typically never happen for most of us. The day that the economy starts to show positive signs the market will adjust and home prices and interest rates will react before most can.
Having a variable rate mortgage right now will save you money but before signing that mortgage, make sure that at any time you can lock in at a fixed rate without penalties. I have studied mortgage financing and as a client of mine you receive free mortgage advice not only shopping for best rates but also receiving the best terms that suit you specific requirements.
The Bank of Canada will be meeting December 9th and we can expect another 1/2 point drop in interest rates to match the US. With the US overnight lending rate at a low of 1% to stimulate the US economy we shouldn’t expect much if any other reductions from the US in the near future. But some analysts say it could drop again, maybe another 1/4 in the year to come.
I recommend if you want to look at buying a new home or Condo in Toronto... get pre-approved now for a mortgage with a minimum 60 day agreement in writing. I suggest a variable rate at this moment but you should have the option to lock-in for a fixed term.
Once and If you find a home you like and have an accepted offer, you then can renegotiate and take advantage of the probable lower rates as of December 9th, “that is providing any accepted offer closing date comes after the week of December 9th 2008. If you can find a new home that you will be happy with for the long term right now buy it.
Please forward this to anyone you know who might be interested.
Check back, I’ll be updating this post with more specific details soon.

FRANK JONES, Salesperson
RE/MAX HALLMARK REALTY LTD., BROKERAGE
416-486-5588
www.Central-Toronto-Real-Estate.com