A home is more than an investment

This week we feature guest columnist Joanne Tibbles, who is the President-Elect of the Ottawa
Real Estate Board. Courtesy of the Ottawa Real Estate Board Sept. 2, 2010

The late comedian George Carlin once famously joked that a house is nothing but “a place to
keep your stuff.” Obviously, most homeowners believe that their house is so much more than
that. A home is where we live. It’s where we sleep, shower, read, play, and relax. Some people
work from their homes. Sometimes, a home can be an investment, purchased in the hopes of
making a profit. But just because a home is one of the biggest purchases you will make in your
lifetime doesn’t mean that it’s always a good idea to treat a home as an investment with quick
returns. The cable TV channels are fond of shows where people “flip” homes – buy them
cheaply, fix them up nicely and sell them off at a profit – but in the real world that kind of quick
profit isn’t always a sure thing.
As the real estate market moves toward balance in Ottawa, homeowners may begin to worry that
their homes aren’t appreciating in value as quickly as they once were, and that so-called “bidding
wars” (multiple offers) are becoming less common occurrences. This is only cause for concern if
you absolutely have to sell your home in the next little while. If, like many homeowners, you
bought your home because you love it, it suits your family’s needs, and it provides you with
somewhere to sleep, eat, relax and keep your stuff, then there’s no need to panic.
Home values in the Ottawa area have historically increased at a steady pace as the years go by.
Since 1956, the average sale price on homes sold via Ottawa’s MLS® system has only decreased
five times, and never by more than 4.3 per cent (way back in 1961). Average home prices
increased by somewhere between two and eight per cent in 32 of those 54 years, which gives you
a much better idea of how the Ottawa housing market generally operates. Slow and steady
growth is our hallmark here, bolstered by a stable employment market whose backbone is, of
course, the federal government, but that also is not dependent on industry for its stability.
Double-digit average price increases, on the other hand, are rare, occurring in only ten of the last
54 years. History has shown that over the long term, prices will generally rise here in Ottawa, so
housing remains a great long-term investment - but it may not be the best market for a quick
flip. If you do need to sell after a shorter time period, an experienced real estate professional who
knows the Ottawa market can help you sell for a price you’ll be happy with. He or she can also
advise you on up-and-coming neighbourhoods where a home may be more likely to appreciate in
value over the short term. Contact a member of the Ottawa Real Estate Board at
www.OttawaRealEstate.org.
Buying a home you can live in and enjoy for the long haul is never a bad idea, and will likely
turn out to be a good investment. Plus, it gives you somewhere to keep your stuff