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Once again I find myself looking back at a year that was full of surprises, some small and a few larger than anticipated.  Many good and a few less so, best to leave the bad behind quickly and build on the good. J

In other words, a year very much like everyone else’s.

As far as things Real Estate related go, interest rates have continued to trickle downward and pretty much spent the bulk of the year at or near 3%.  Moving into 2013 most in the industry expect a very similar year rate-wise to what just ended.  50 year record lows with the odd vibration of .10 to .25% – but not much more excitement than that.  Those prime minus variable rate mortgages look very much like the thing to hang onto for the foreseeable future, and hopefully the discounts return soon for those with impending renewals.

Sales activity has been a more dramatic story over the past few months, with the new normal appearing to be sales activity about 30% off of the ten year average.  Prices however, after falling about 15% from the last peak in May have settled around similar levels to the prior peak in 2007/8.  There is not much expectation that prices will move much further down, as the economy remains strong, interest rates remain low, and general demand remains strong enough to absorb the current supply.

Far more people are removing their homes from the market than are willing to take price cuts.  They will simply wait it out, as there is little pressure to sell for most with the economy being as robust as it has been.

My News Years Resolution for you;

As I say every year; Please take the next week to consider and implement either a change in payment frequency, perhaps to accelerated bi-weekly, or a small payment increase, even an increase of $25.00 per month, done year over year this will eventually have a significant impact on reducing your net amortisation.

Although concerns about rates rising remain well off in the distance, a year or more away from the current outlook – The best insurance against rate hikes remains a lower mortgage balance.  Over all other strategies there is none better than simply paying the principle down at a bit faster pace each year.

You also get the added benefit when bumping your payment up artificially each year of creating a buffer against payment shock if you are renewing at a higher rate down the road.

Take control and increase your payment while rates are low, the benefits are multiple and compounded.

Make it a Stellar 2013!

Happy New Year!