Why Would I want to Buy a House in Calgary Right Now?

Most of us think about owning a home, most of us want to own a home some day, why not now?

Prices of homes in Calgary have been falling. One of the major banks recently forecast that the price of an average home in Calgary will drop by 1% in 2009 before an increase occurs in 2010. What this indicates is that we are at, or very close to the bottom in terms of home prices in our city. NOW IS THE TIME TO BUY.

Why would you want to buy when you can rent?

1. Control your payments. Your payments will stay the same under home ownership for the term of your mortgage, can't say that about rent.
2. Build your wealth and security. Over the long haul, Real Estate is the best investment you can make, and your own home is the best investment in Real Estate.

Let's Do Some Math:

• Assume you buy a property with $15,000 down and a mortgage of $250,000. A total value of $265,000. That's about $1,450.00/month (including $250 for taxes and condo fees). You could rent a similar property for about the same.
• If the value of the property does not change for five years you will have gained about $16,000 through reducing the mortgage principal. If you were to sell at this point you would make a modest profit of about $3,000.
• If we assume an average increase of 3% per year over 5 Years (This is very conservative) at the end of the term you will have over $58,000 of equity! If you sell at this point you will make about $45,000.
• From 1999 to 2004, before the "crazy times" the average increase in home prices was 6% per year. If this turns out to be true again for the next five years, you will profit almost $90,000! Not bad!
• From 2004 to 2008 the increase was 82%, or over 16% per year on average!

Taking the middle road, in five years your $265,000 home purchase will pay you about $45,000 when you move out. If you Rent, when you move out you will be lucky if you get your damage deposit back.

Something to think about: Countries around the world are printing money like crazy to combat the financial crisis, this will have the longer term effect of de-valuing currencies. Can you spell I-N-F-L-A-T-I-O-N? How much did you pay for a chocolate bar ten years ago? How much will you pay in ten years from now??