I would expect that houses in the lower city to remain stable with some steady increases in pricing.

I think you'll find greater differences in market conditions (pricing ups and downs) between the lower city and the 'suburban' areas, than market differences between different lower city neighbourhoods.

I think the lower city is somewhat protected from pricing decreases as the prices are already low vis-a-vis what you get for your money. That coupled with higher fuel prices and ready access to services (i.e. transit, healthcare, stores, etc) protect the lower city prices.

$200K would buy a nice sized home in an nice area that is rapidly gentrifying like my neighbourhood just east of Sherman between King & Main. You'd get a south address (more desireable) and be a stones throw from the very nice neighbourhood of Blakely. Close the the King and Main Steet transit corridors.

I think $140K would put in you on the North side of King which has a lot of neighbourhoods that while a little rough around the edges are also gentrifying. My friend paid $97K (I think he overpaid by $6K - 7K) for his home in the Wentworth & Barton area 18 months ago and 2 of his neighbours homes are on the marke to for $135K now. He's thinking of putting his on the market at $139K, but he will only break even after all improvements and fees are taken into account.

It's worth noting that any house, no matter where you purchase, will need a budget of at least $10K for improvements, and more likely $15K - $25K depending on condition. There is all kinds of work being done all over our neighbourhood, new roofs, new windows, new electrical, new porches, etc...... There's hardly a street without at least one house having a dumpster out front.

not too sure about 09 predictions, but over the past year prices on the Mountain and Ancaster dropped 2% while prices in the lower city (what you probably know as 'Hamilton' itself), have risen by 5%. 5% may not seem like a lot, but it's fairly significant considering it takes the entire lower city into account - steelmill neighbourhoods and all.

I know someone who just bought in the Cannon/Sherman area for $159,000...and someone else who bought on the same street/almost identical home (but not nearly as nice inside) for $165,000 3 months later.
Granted, the first house seemed to be a good deal. Apparently it was.

The housing market is starting to slip off the rails in Hamilton. In Halton Region just down the road things are a down right train wreck. Right now houses that are priced right are taking 2 -3 months to sell. I've been watching a few over priced houses in Ancaster and the Burbs that have been on the Market since Feb - March.

It will be a full blown buyers market by the time 2009 rolls around in my opinion. The real estate company analysts will tell you everything is sunshine and roses for 2009 but don't count on it. If you buy a house in 2009 it will be worth slightly less in 2010, by 2011 you might recoup your loses and by 2012 we'll be looking at a healthy housing market again... these are just my guesses of course, I'm not an expert, I just watch and observe things.

$6K isn't that big a price difference. That's only the difference in one feature, i.e a newer roof vs. a 15 year old roof, or updated wiring vs. knob & tube or a newer kitchen/bathroom.

I've been going with my parents doing some house hunting and the new houses are throwing these great benefits lately. Some places are including free fireplace with upgrades like kitchen granite countertop and hardwood floors. Some even with $15,000 worth of upgrade.

I've convinced my parents to hold off for the development at the Chedoke browland. They will probably throw freebies as well. I think that area will be a stable area, not too suburban.

I am also wondering if a variable rate mortgage is the route to go as well. Many times it isn't wise to get this but not with many changes in rates it can be a good way to go. There hasn't been much increase in mortgage rates the past while. My mortgage renews at the end of the year and I am thinking of taking the variable rate. A variable rate is about 4.750% for an open at the time.

Oh Branthaven is going to have this special, pick one of the three doors and get whatever is inside the door, could be $15,000 worth of upgrade, free applicances, free fireplace, free deck, granite countertop, etc.

We chose the variable rate, because I thought it was the way to go at least for the short-term. 6 months in and we've seen one .25pt drop in the rate and a few where it was expected by the Bank of Canada held firm. Our mortage is relatively small so that reduced much of the risk.

Personally, I don't think interest rates are going to increase by much in the next 2 years (but I'm no expert).

Ultimately, it depends on your tolerance for risk, and the size of your mortgage (i.e. potential savings vs. potential added expenses). If you like predictability then go fixed.

A lot of young couples are buying houses in new subdivisions for over $600k in the GTA. They'll be in up over their heads soon enough. When the housing market crashes (it hasn't yet!) their value will plummet but they'll still have a $600k mortgage. This scenario will play out on a grand scale. There will be too many houses and not enough buyers.. prices will come down but interest rates will go up.

That's what I'm afraid will happen. As that can happen in a recession. I've seen that before.

A little too much doom and gloom. While I'll admit that some are in too deep, I think you are being a little too overly pessimistic.

We are not going to see a collapse like we've seen in the US.

Then you have your answer, go long with a fixed rate.

I've been looking to buy for a while and it's definitely a buyers market now.
Houses are on the market a lot longer than before and I've seen many have a few price drops and still sit unsold.

I'm looking for something preferably in the South-east part of the lower city. Unfortunately prices haven't dropped as much as they should - most homes are still overpriced - even if they're going unsold for months. Luckily I won't have much of a mortgage, so the rates won't make that much of a difference to met.

For those shopping mortgages, I recommend PC Financial. When I was buying five years back, they had the best rates by far, and were willing to lock as long as ten years (which is what I went for, being a highly risk-averse kind of guy). Plus, the PC Points awarded for signing the mortgage allowed for a good sundry stock-up session at Fortinos the week of the move.

I hope you are right.. its supposed to stay that way in the US for the next few years... how long can we hold our breath?

That's usually the way Adam, US usually has more effect on us in so many ways. And we tend to follow the same roads as they do in so many ways.

Good choice of location, I've been in this area for over 2 years now and have really enjoyed it. My neighbor just put their house on the market on Monday. 3 bed 1 bath, no driveway but nicely landscaped. $159 900. Just to give you an idea of how much a slightly smaller than average house on a decent street will cost you.

Our housing market isn't 'bubbled' like the US was, it's been a more sustainable growth.

Also, I think the economy has become more global since other times when we just followed the US. Also, it's worth noting that our countries finances are in much better shape than in the US (thank-you Jean Chretien and Paul Martin).

Not to say the US doesn't have a large impact on our economy, it's just not the same as say in 1981. We'll most likely follow, but won't go shoulder to shoulder to the same depths (or heights).

Everything I've read suggests that the Canadian housing market won't crash, merely flatten out and maybe a slight dip.

And that Hamilton's prices had leapt as they were seen as undervalued and also Hamilton houses were being seen as ripe potential commuter belt to Toronto, as you could buy a place twice the size for half the price. However, without the infrastructure in place for a fast link to Toronto (yet) and the rising oil prices, making a car based commute more expensive, demand has slowed from the Toronto commuters.

Its true, Hamilton (downtown especially) will be sheltered from the market downturn since houses were undervalued to start with. A global recession is definitely in the works though.

In the late 80s was a very hot market with high priced houses and interest rates were unreal. Then in the early 90s in that recession the housing prices dropped drastically and didn't the interest rates stay a tad higher? I forgot.

Interesting article here

Another interesting article I just found as well.

http://www.canadianmortgagetrends.co...le-rate-1.html

Yes, very interesting. It confirms my earlier post with the majority of economists (save Merrill) views support that we won't see the same meltdown as has occurred in the US.

Thanks for posting the article.

Upper End of Market Suffering
 

Source: http://www.yourhome.ca/homes/article/506393

I get a kick out of people who act all surprised by this recent news both here and in the US.
I remember having chats with friends and financial advisors 6-7 years ago about this day coming.
Too many people need to turn off the TV and turn on their brain. There is absolutely not one thing shocking about what's going on right now. The only thing shocking to me is that it didn't happen sooner.

Fixed Rates on the Rise
 

Its true - most people who stopped to think about it saw all this coming way before it hit the media

nothing hits the media until it's current...they aren't interested in presenting 'news' or 'research'.
they like hysteria and bold, crazy top stories.

The British media caused the bank and housing crash in the UK as much as the americans did with their subprime mess.

If the media hadn't caused such a huge panic, Northern Rock wouldn't have collapsed. If they hadn't gone on and on about how bad the housing market was, they wouldn't have affected the general consciousness and made people wary about buying properties, thus reducing the sales and forcing house prices down.

^^ I agree, omro. If Media didn't freak out about stuff, the general public wouldn't freak out, and we wouldn't be in such a mess.

The fact that people think they have to spend less is what's hurting the economy, but in reality, we are able to spend just as much as we could in the past... aslong as it's done responsibly.

I hate that people think we need to save every penny since the world's ending. Go about how you lived your lives over the last several years and everything will be fine.

Here in Canada the media is run by a very exclusive non-diversified group.

no offense, but that's horrible advice.
The best advice for all of us is to get out of debt, start living within your means and be careful where your investments lie.

True RTH, but sometimes that is easier said then done when people aren't getting pay raises to go along with the inflation that seems to keep going up and up all the time.

I really don't think there is much to worry about have a little debt. Especially in Hamilton where housing prices are reasonable, it's quite manageable to service the debt with a decent job. I mean you can afford a house on a single 40k income in a whole bunch of areas in Hamilton.

Of course this doesn't mean getting into the US' mess by taking out 103% mortgages and spending the money on expensive goods.

Even though home prices aren't insane in Hamilton, I still think they're overpriced. I've seen way too many homes that were priced at 240k only 5 years ago which are now valued at 360k. A 120k increase in price for a home that has gone through minimal upgrades in a neighbourhood that has seen no changes is too fast/too soon.

Prices are dropping though and with the economy the way it is (and getting worse) and the news of mortgage rates increasing - it should drop even further. I shouldn't have to wait much longer for a reasonably priced home I believe (or at least I hope).

most definitely. I understand it's not easy. I just didn't like DC's tone suggesting that people 'live like you always have' and don't worry about it. I personally think that's a recipe for disaster.

And I see his point, example of spending like $40,000 plus on a car and a huge house. For most people that can take a lifetime to pay off. And with so many job layoffs and companies closing then a person can be up the creek without a paddle if they do lose their job. IMO this is why I didnt want to see free trade, as I saw a lot of jobs going out the window which has turned out to be true so far.

It was probably the flippers and the realtors being greedy, as all the media (them people again) were wittering on about how great Hamilton would be for Toronto commuters, as they could buy twice as much for half the price. However, the demand from the higher paid Toronto commuters isn't there yet. However, as soon as the James North station is in place and the 45min commute is a reality. The flippers will try again.

My advice, if you're going to buy somewhere, try and buy it before the new station opens. I've seen areas in London literally double in value within 2 years of a new station being opened. Not that that's applicable globally, but better transport links will translate into a house price rise of some kind in the neighbourhoods closest to them.

I took DC's comment to mean:

Don't live as if the media's hype is the gospel truth.

If people had ignored the media in the UK and carried on as they were, instead of panicking and ripping their money out of Northern Rock and saying "well, we've been told house prices are going to fall, so let's sit tight and wait for them to fall", Northern Rock wouldn't have collapsed, the mortgage market wouldn't have collapsed from the lack of people wanting to buy houses and house prices wouldn't have dropped due to the lack of demand.

What could and should have happened is that the mortgage companies would have realised they were in a spot of bother, tightened up their practices so that fewer high risk loans were issued and kept a close eye on their existing high risk loans. The housing market would have suffered a slight, but not alarming correction, perhaps a gradual price reduction over time, rather than dropping off a cliff-face, and there wouldn't have been a ripple effect of unemployment within the highly paid and high spending banking sector.

All in all, most people are a herd and believe everything they read in the media and react accordingly. When the media says house prices are going to crash, the herd makes it so.

DC is bang on in that regard.
I would go a step further - don't ever do anything based on anything you read/see in the media. EVER.

Long-term mortgage rates went up last week, but now many are expecting short term to drop.

http://thespec.com/News/Business/article/442046

Note, this is only speculation and has been predicted before recently only to have BoC Governor Mark Carney surprise the 'experts'.

I went to a real estate conference on Saturday. They choose to specialize on Hamilton. They had someone from the city of Hamilton there and they had a presentation on the future transit plans in the city.

You may be familiar with them - they are the organization that releases the top ten towns to invest in.

Anyway, lots of upbeat investors afterwords.

who was the group at the conference??

A unit sold here in the Annex last week on the 3rd floor for 190,000 in one day. That's unheard of up to this point.

Neil Everson was the rep from Hamilton. Real Estate Investment Network was the organization.

Wow that is a respectable price!

Yeah - Move downtown already - the suburbs are boring.

As greenland drys up in the GTA detached and semi housing developers are looking more at Hamilton. Hopefully though we could get hi rise developers as well.

My neighbors house just sold. It only took 2 weeks on the market with no open houses. What can I say, a decent house that is priced right will sell in any market I guess.

Of course not everyone has this kind of good fortune, there's a house at the end of my street that started at $299 999 at the begining of summer, has dropped down to $275 000 and is still sitting on the market.

It seems like houses over $250 000 are just not moving very fast.