Opportunity lies in these challenging times

“Those who will win in today’s housing market are forward thinkers and aren’t scared of the most recent past”, says one of Red Deer’s most prominent builders.

He said, “The average consumer isn’t aware of how great we actually have it in today’s market. In the early 80’s when he started building homes, interest rates were just coming off the ceiling of 22% and 9% was a great interest rate.

“The government has learned that we couldn’t let that happen again through this global economic slowdown and it didn’t! Money is practically free these days!,” he said. “And that’s why over the next 12 months he’s developing some of his most ambitious projects yet!”

One evening he and I were speaking of where housing is at, and why some people are sitting on the fence waiting for the market to get better.

“For the most part, people are scared and much of it is where they are getting their information from and unfortunately most of it’s from the six o’clock news and the alarmist language that’s used to increase viewership.

“But the media needs to sell advertising as well. It’s too bad more of them don’t print or speak of more positive news with regards to housing, because there is a lot out there these days with super low interest rates and very attractive properties and pricing.”

Naturally, consumers get scared and don’t want to lose their hard earned money on anything, never mind their largest investment which is supposed to only go up in value. But as my generation has found out, just like our parents did in the early 80’s, they can decrease just as the market does, but it’s takes visionaries to see where the true value lies not in the next six months but over the next five to 10 years and beyond.

Let’s look at how great this market actually is. If you buy a home today and have a mortgage value of $275,000 and took advantage of today’s discounted five-year fixed interest rate of only 3.59%, you will have a payment of only $1,146/month (principal and Interest only) and pay $47,158 in interest to the bank.

In contrast, if you wait too long and end up with the past 20 years average discounted five-year fixed rate of 5.80% you’ll have a monthly payment of $1,518/month and pay almost $30,000 more in interest costs!

No matter what we buy we are always looking for the best deals out there. With regards to buying anything at a discount, it’s called market timing. And boy is the clock ticking!

Since September 2008, we’ve seen a lot of volatility in the world, and living in Alberta, this is something that we are all used to every seven to 10 years. Within these seemingly tougher economic times’ lies opportunity, the visionaries will take heed and grasp at it, and others will be kicking themselves in the butts wishing they had answered the door when it knocked.

What other time in history have you found that you can save $30,000 on a house, without even negotiating a penny?!

Jean-Guy Turcotte is an accredited mortgage professional with his partners at Regional Mortgage Corporation and can be reached for appointments at 403-343-1125, jturcotte@regionalmortgage.ca or texted to 403-391-2552.