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Here's How Things Look to Me This Morning!

This year (2010) has been really different compared to the last few years in the real estate business.  I think there have been a few obvious trends, but absolutely no consistency.  The year started out great for sellers. Business was swift and houses were being sold in a decent amount of time. Both buyers and sellers were trying to beat the introduction of the HST. Also, back in April, the qualification standards for mortgage financing was tightened up. In the long run, I believe that was a positive step. The last thing anyone wants to see is for Buyers to be over-extended. As we all know from the news in the U.S., foreclosures not only destroy the housing market, but more importantly can be very  distructive for families. 

The HST is another story. True, re-sale homes prices do not include HST, but everything else relating to re-sale homes do. Lawyers fees, commission fees, home inspector fees, repair and service fees, and on and on. For the life of me, I don't understand how  a government can introduce higher taxes in the midst of a global recession and expect good things from it. The less money people have in their pockets, the less money they have to spend. Without consumer spending, the economy slows down. When he economy slows down, people lose jobs. When people lose jobs, the government loses revenue. Basic common sense.

Even worse, homeowners now  have to pay higher utility costs because of the HST. Ask an investment property owner or a landlord how  they feel with having to pay higher utility costs for their rental properties.  Ask the same owner, as well as regular homeowners , how  they feel about the new  smart meters. Higher useage costs PLUS the HST on top of it!  The overall effect, is that people are hesitant to invest, are hesitant to move up to a bigger house, and are very hesitant to buy a brand new  house. The cost for builders are really effected by the HST, which in turn effects price. This, combined with the continuing bad economic news from around the word has slowed the market. Consumer confidence is down, and sellers and buyers alike are thinking twice about taking the plunge to buy or sell.

As a reult of this, the housing market is down across Canada. The thing to remember though, is that although you may have to sell lower, you will be able to buy lower as well. We are fortunate to be in the best economic position in the western world, and there are great opportunitie for those able to do so. It would just be nice if government on all levels  would stay out of our pockets and would manage their cheque books like we do.  After-all, we only have so much to give. What happens when we have nothing left to give at all?