Kitchener-Waterloo (CMA)
February 2017 Update
New Home Market
|
February 2017
25 yr CAGR 3.73% (+0.01%) |
February 2017
1 yr GAIN 2.51% |
February 2017
5 yr GAIN 22.77% (-1.69%) |
ReSale Home Market
|
February 2017
25 yr CAGR 3.73% (+0.01%) |
February 2017
1 yr GAIN 2.51% |
February 2017
5 yr GAIN 22.77% (-1.69%) |
Commentary:
The ReSale Home Market eventually will always re-align with price gains recorded in the New Home Market. The delay in correlation is impacted by where a given market is functioning in its current Trading Cycle. Long Time Homeowners understand this correlation is not only certain but price gains in general are supported by a continually renewed and improved housing stock from which higher prices can be supported over the long haul.
The ReSale Home Market eventually will always re-align with price gains recorded in the New Home Market. The delay in correlation is impacted by where a given market is functioning in its current Trading Cycle. Long Time Homeowners understand this correlation is not only certain but price gains in general are supported by a continually renewed and improved housing stock from which higher prices can be supported over the long haul.
The Traditional Homeownership Approach
|
1990
Average New Home Purchase Price Paid $226,608 Average Down Payment Applied from Carry Forward Equity $63,450 (28% down) 5 yr Mortgage Interest Rate 11.00% 25 yr Amortization Monthly Payment $1570.00 Expectation of 25 yr Principle and Interest Paid $471,000 |
2016
Average New Home Purchase Price Paid $490,808 Average Down Payment Applied from Carry Forward Equity $137,426 (28% down) 5 yr Mortgage Interest Rate 2.42% 25 yr Amortization Monthly Payment $1569.00 Expectation of 25 yr Principle and Interest Paid $470,700 |
Home Prices in the Kitchener-Waterloo CMA have barely kept pace with inflation and the renewal costs required for any home to maintain its place in the housing stock pecking order and its market value. What should concern every homeowner expecting to own their home for the next 25 years is that rising interest rates will cause real house prices to decrease and for those renewal and inflationary pressures all homeowners experience, that were made up through house price growth during the last quarter century, will not take place.
