I guess this is the question that everyone has in his/her mind these days. We know for sure that real estate market considers as kind of safe place to invest. Although it has ups and downs but overtime it goes up (at least it is better that most mutual funds and stock markets).
To answer the above question, Yes, I believe the real estate bubble is going to burst in next couple of years. Just consider that the price of single family home in some areas like Leaside has doubled for past 8 years and this is a very significant increase in value. And it is still going up for next couple of years but that is about it and this bubble will pop. How much it goes down? it is hard to say. I would say something in range of 20% to 30% and this could escalate if more sellers go to market.
It is like stock market, when it is time for market correction then major stocks could drop as much as 30% or so (By the way, although so many people think that we are over economic crisis but they are wrong. I believe it is time for major correction - we'll see what happens in next few months).
One of the option is cash in your home equity and buy back later which it has it's own pros and cons and I leave it for you to make this decision and I will not recommend anything.
But if you are thinking to sell your home then there are some simple things that you could do to make best out of selling your home.
- Consider hiring a real estate agent, do not even think about doing it your self to make more money, it is not going to happen.
- A simple touch up painting make a big difference. Go with natural colors. This make your home bigger and brighter an you still leave the option for buyer to come up with his/her own color.
- You do not need to hire someone to stage your home but you can do it yourself. Get rid of extra stuff that you will not use them so often and store them somewhere specially get rid of all clutters.
- Keep your place clean and neat. The goal is that when someone sees your place then thinks that it is his/her on place and could imagine himself/herself living there.
- If your home is outdated and you think that you can add value by doing some renovation then be careful not to go very crazy. There are a lot articles out there that tell you which renovation has the most return value and etc. I would say that kitchen is number one and you the most out of it but again do not go crazy and order $15000 kitchen cabinets. Bathrooms are number two but again watch the money that you spend. Having hardwood floor adds value for sure but do not think that you get all your money back.
Also you might want to consider doing some of the renovation yourself. If your are a handyman/handywoman then this could be fun and challenging and also you could save a lot of money by doing these stuff yourself.
I did so many of the renovation in my place by myself alone. These are what I have done in my place:
- Installing Hardwood flooring.
- Renovating the kitchen (cabinets, counter tops, back splash, ceiling, spot lights, under cabinet lighting, new sink and faucet, new range hood).
- Painting.
Unfortunately I do not have pictures before but these are pictures after i have done renovations.
Well, for me the cost of labour was zero and I tried my best to keep the cost of material low but get good material. I shopped around and tried to wait and get the items on sale. The laminate flooring is from Ikea, I love the white color, it goes well bot with darker color and bright colors on walls. As for cabinets. Let me tell you something. You do not need to change the whole cabinet if base cabinet is good. You can simply change cabinet doors. Well, if the doors don match the base cabinet then you have some cutting to do which was the case for me and you need to have a good table saw for that. Also I installed new cabinet moulding. The counter tops are wooden from Ikea. The wooden counter tops are much better than laminate ones. For laminate if you burn it then that is it or if water goes underneath then have fun. But these are real wood and you can simply sand it and stain it. You can even chop stuff on it. The sink and faucet were from Home depot. The big challenge is when you want to cut the counter top to place new sink (have fun). The back splash was from home Depot again and I used these new sticky mats instead of traditional stuff and used non sanded grout. Also I ended up to do some wiring for under cabinet lighting and spot light on ceiling. Overall I am very satisfied with what I have done and I am sure I get my money back and even more. Well, the point is that I did not go crazy money wise and still my kitchen looks like that you spend more than few thousand dollar in it.
Well, it is better to stop this post right here. I wish you all peaceful life.
