Things are Flat, For Now

Recent articles seem to make good arguments that real estate will either do well, or it will do poorly this year. It is important to remember, however, that real estate is directly affected by regional factors, which are often affected by national and international movements. The main driver to real estate prices is the level of people employed in an area.

Generally speaking, the more people there are working in a region the greater the pressure is on housing prices to rise in that same area. When people stop buying cars in the USA, it impacts housing prices indirectly because there is industry in our region that supplies auto parts to auto manufacturers around the world.

Employment growth in Guelph, Waterloo and surrounding area has been pretty flat over the past year, which is why housing prices remained relatively flat in the region. Looking ahead, it is possible that we will see more businesses moving to the region with Guelph’s new business park located near the 401.

Mortgage rates continue to be near 50 year lows, with the 5 year fixed rate sitting near 3.4%, the variable rate at 3%, and the 1 year term as low as 2.75%. Low rates will continue to make a home purchase more affordable for first time buyers.

Written By:
Chris Bisson of The Mortgage Centre

This entry was posted on Tuesday, January 10th, 2012 at 5:50 pm and is filed under Market Updates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.