First-time homebuyers rule current housing market

If you've been thinking about buying your first home or condo, but have been hesitating because of fears about falling prices and the shrinking economy, the time to act may well be now. According to a recent panel of financial and real estate experts convened by the Bank of Montreal (BMO) as part of its launch of a new information kit for first-time homebuyers, the recent market offers some genuine opportunities for first-timers.
 
The panel did not mince words when it came to the near-collapse of the residential market over the last year or so. BMO senior economist Sal Guatierri pointed out that home sales are down as much as 40 percent nationwide and that the construction industry will continue to bleed jobs for the next six months at a rate unseen since the early '80s. But Century 21 Canada president Donald Lawby added that the truth is both more complex, and less alarming, than the statistics indicate. "Markets are always local," he explained. "The Windsor market is substantially different from the Edmonton market, and the worst market statistically (Vancouver/Lower Mainland) was the highest-flying at the peak. Also you have to consider the type of housing. Last year, top-end sales especially were way down, but the entry level—which tends to drive the market as a whole—is showing signs of life."

Today's real estate market
One of the most important changes in the character of today's real estate market is an effective end to the kind of quick-flip speculation that helped drive prices through the roof at the height of the boom years. The panelists generally agreed that while there’s no guarantee that prices will decline any further, the precipitous drop of recent months is over and that modest, more normal increases are expected to return, especially for those who are buying a home rather than a pure investment. "The people who had to sell at any price have already sold and left the market," explained Toronto realtor Brad Lamb, "and power-of-sale homes [which have a dampening effect on overall housing prices] are almost non-existent now. So affordability and value are much more solid, and you can get very attractive mortgage rates now."