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Archive for January, 2009

Interest Rate Watch

Thu, 29th January, 2009 - Posted by Sean Kavanagh - (0) Comment

Interest Rate Watch

If you read my previous post on the government’s $30 billion dollar stimulus package, you would know that we are experiencing some of the lowest interest rates in recent times.

Click here to read about the interesting things the government is doing to help stimulate our economy.

Term Rate

6 Months  5.20%
1 Year      3.50%
2 Years    4.59%
3 Years    3.75%
4 Years    4.29%
5 Years    4.39%
7 Years    6.05%
10 Years  6.25%
Prime       3.00%
Variable   3.60%

If you would like me to send you periodical interest rate updates, please provide me with your email address so I can pass on the latest rate changes, along with any other market information you may be interested in.

It is always best to shop around to find the best interest rate. Let me help save you money!

Sean Kavanagh

Category : Mortgage

$30 Billion Government Stimulus Package Should Help!

Wed, 28th January, 2009 - Posted by Sean Kavanagh - (0) Comment

The government continues to lower its borrowing rates to stimulate the economy, but we can only expect an upturn once we start spending, according to Benjamin Tal, senior economist for CIBC. The public, however, isn’t spending because of their fears in the economy. It appears we are now caught up in the old classic chicken and egg scenario! We don’t spend due to the economy, but the economy won’t improve until we spend.

Our friends in Ottawa have committed to a fiscal stimulus package to the tune of roughly $30 billion dollars in new spending this coming year. The bulk of this money will be put towards infrastructure, more specifically job creation, as infrastructure spending is proven more effective than cutting taxes. $10 billion of the infrastructure spending will potentially create more than 110,000 new jobs and inject economic growth by up to 1.5 percentage points.

This stimulus package has the Bank of Canada optimistic about our economic future and predicts for a healthy economic recovery in the second half of this year. Benjamin Tal agrees and also believes that this combination of monetary and fiscal stimulus will be powerful enough to turn things around in the second half of this year.

What does that mean for you?

Well, if you were planning on buying a house in the next couple of years, you should consider getting into the real estate market now, before the upturn occurs. Once the economy begins to gain momentum in the latter part of this year, both interest rates and property values will begin to rise.

For more information on buying or selling real estate in Burlington or Oakville, to answer questions about current market trends, or if you are interested in receiving mortgage and interest rate information, please visit me again on my website www.seansells.ca or call me at 905-220-9198 and I’d be glad to answer any questions to accommodate all of your real estate needs.

Category : Market Updates

Markets, they are a changin’

Tue, 6th January, 2009 - Posted by Sean Kavanagh - (0) Comment

According to latest figures from the Canadian Real Estate Association, house prices across Canada have dropped 11 per cent since the peak in May of $316,896, down to $280,880 in November, The drop is weighed more heavily in markets that experienced drastic upswings in property values.

Benjamin Tal, a CIBC World Markets economist said that “it was back to reality in 2008″, referring to the unrealistic increases in prices in certain real estate markets over the last few years. If housing prices climb too quickly, they are more than likely to take a tumble at a point where the market can’t sustain such an increase.

Tal continues to explain how we have moved from a seller’s market to a buyer’s market “in a matter of months.” Tal points to recessionary conditions and low consumer confidence as the cause for the transition.
With consumer confidence at 25-year lows and the economy in recession, potential home buyers are staying on the sidelines until prospects brighten. Banks are also more reluctant to lend money to finance home purchases in markets where prices have been falling. Tal expects the conditions to continue to soften, but “it’s not going to be a freefall.”

Scotiabank economist Adrienne Warren said she also expects the housing market in Canada to soften next year. Warren said she doesn’t anticipate another boom once the market recovers, which she predicts will be in the last half of 2009.

A recent report agrees with Warren and suggests that housing markets should recover as stability returns to the financial sector. If consumer confidence is restored and overall economic activity picks up, so should the housing market and a bounce-back could occur “as early as spring”, the report said.

Buyers should take a long look at this current situation and ask yourself if you want to get in on some of the best deals you have ever seen and will ever see! With mortgage rates being as low as they are and housing prices at a 25 year low, now is the time to take advantage of this current economic climate.

When you are given lemons, make lemonade….or in this case, a sound financial investment.

For more information on Burlington or Oakville homes, selling or buying real estate, current market trends, or mortgage and interest rate information, please visit me again on my website www.seansells.ca or call me at 905-220-9198 and I’d be glad to answer any questions to accommodate all of your real estate needs.

Thanks for visiting.

Sean Kavanagh

Category : Market Updates

The Market Tables Have Turned

Sun, 4th January, 2009 - Posted by Sean Kavanagh - (0) Comment

“How quickly the tables turned!” is the response of most economists when faced with the question about the current Canadian real estate market. Experts have seen markets swing from a seller’s market to a buyer’s market before, but not quite this quickly.

CIBC World Markets economist Benjamin Tal said we have moved from a seller’s market to a buyer’s market “in a matter of months.” Tal continues to explain that we can look to recessionary conditions and a shift in consumer confidence to explain this transition.

So, for anyone who has been considering a first time home purchase or moving into a bigger home, you should really start considering a move while the market is working in your favour.

Consider this: you are currently living in a condo/townhouse that could have fetched you $180,000 in the height of last year’s boom, but now be looking at having to sell for $170,000 in today’s market. $10,000 loss in value!!! Why would I ever want to sell now? In the near future, you also want to move into a larger property close to the $400,000 range but just can’t see how you could afford it. What if I told you that you could get that $400,000 valued property for $360,000? So, by moving up in today’s market, you have lost $10,000 on your initial investment, but gained $40,000 by taking advantage of this down market. That’s a gain of $30,000 in value. You won’t find that return in the stock market or your savings account!

I also forgot to mention that this scenario I just painted for you is not fictitious. My clients are now preparing to move into the home of their dreams, a home they could not afford until now.

My buyers were simply able recognize that as consumer confidence is low, prices will remain low. It is only when confidence is high, connected to an upturn in the national economy, that prices will rise. Buyers don’t have to let the lack of confidence in others deter them from taking advantage of this great opportunity.

When we think about the best time to invest in the stock market, we know it is when it is low. “Buy low, Sell high” is the motto. This also applies to real estate. Buy when the market is low and you will reap the benefits of thousands of dollars in value gained by buying up in this down market.

For more information on Burlington or Oakville homes, selling or buying real estate, current market trends, or mortgage and interest rate information, please visit me again on my website www.seansells.ca or call me at 905-220-9198 and I’d be glad to answer any questions to accommodate all of your real estate needs.

Thanks for visiting.

Sean Kavanagh

Category : Market Updates
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