The withdrawal of monetary and fiscal stimulus from the Canadian economy in coming months will result in slower growth in both the second half of 2010 and into 2011. This growth slowdown may be further exacerbated by weaker than currently anticipated US and global economic growth as well as a higher Canadian dollar resulting from a rise in Canadian interest rates relative to the United States.

The Closing Stages
The closing stages of any negotiation are vital to the overall success of the final deal. There will come a time when both parties can sense an outcome is possible, and each negotiator needs to be careful not to be too eager to close or else the other party will be tempted to hold back for further concessions.

The best solution to aim for always, is one where both parties feel they have done well despite having to concede on certain issues. This is called a “win-win” solution. Once either side feels they have arrived at the final deal, it is important to signal this to the other party.

A Final Word Of Caution
The closing stages need to be approached with caution. It has been shown that the majority of concessions are given or traded in the last 5% of the time allocated for negotiation. That means if you negotiate for one hour, the last three minutes are when you are most vulnerable.

1. Economy: Currently, Canada has a 'stimulus package' underway that includes among others a low interest policy. The economy will likely slow when the stimulus stops. Expect a good first half of the year; expect trouble in the second half. Expect continued volatility.

2. Interest rates: Half the pundits say they will be up, the other half says they will still the same. Both make fine arguments for up or down! No one knows the outlook for interest rates for sure. Likely: Short term: US will want to (needs to?) keep the rates low until sure recession is over. Expect US Government rates to stay near zero till lend of 2010. Expect Canadian short term rates to stay low - as promised till mid year as the Canadian Government is in a better position. Long term: Government does not determine these. Rates are rising in the bond market - substantially for 4 weeks. Pressure will be for rates to rise. Expect 5 year money to rise to at least 'stated rates' by year end.

3. Surprises: The PIGS (Portugal, Iceland, Greece, Spain) or others - default on Sovereign debt. Result? Instant pressure on all market interest rates and flight into the US dollar. What to watch for? Watch the Libor Rates in the UK. If they start to rise more than 1% - lock in your mortgage (currently the rate has been at about .40% for a while). Get yourself firmly pre-approved ... maybe at 2 financial institutions.

4. Review all real estate holdings ... see what you can hold if rates go up 2, 3, 4 %. SELL the non-performers. Clean up your real estate portfolio in the first 4 months of 2010. Use the BC Assessment sites for free market evaluations.

5. Metro Vancouver's office, retail and industrial lease markets are forecast to face a challenging economic environment, according to Avison Young's 2010 forecast report. The overall office vacancy rate is expected to rise to 8%, almost 3% higher than at the end of 2008. Most oversupply will be in markets like Burnaby and Richmond. Lease rates for suburban landlords will face downward pressure. Lesson: Be VERY nice to your office and commercial tenants!!!

6. Residential vacancy rates. While CMHC is reporting them to still be low the fine CMHC rental vacancy reports do not include investor condos (only rental purpose buildings with 3 units or more). There will be a ton of condos for rent after the Olympics (Many are being held off the market to catch the golden Olympic rental egg. When it's over, there will be a glut.

7. The HST will have a major impact on real estate investment. If your are building, finish before July 1, 2010. It will mean an increase (a mad dash) of small custom or spec building before July. It also will mean a sharp drop off in new spec or custom construction afterwards. Ditto for all renovations for both materials and labour, which will be up 7% after. How it affects all real estate transactions - commercial, residential as well as leases look here: www.bcrea.bc.ca/hst/faq.htm#6.

8. DO write down your REAL ESTATE ACTION PLAN. Only what is written down will motivate you to action. THIS YEAR DO IT!!!! Do ask yourself: Am I a shark? Am I a flipper? Am I an investor? Listen to your answer! It is more important than ever to understand your real estate ownership goals. Not all real estate investment will be good in 2010.

9. Watch pre-sale buying. Contracts have been really tightened up. You buy a new pre-sale YOU WILL be on the hook! Yet, many of the problems of the past few years still may occur. Be very, very careful. A REAL ESTATE LAWYER must review!

10. Do identify an area or two, a town or two that you would like to own real estate in. There are many small towns, that cash flow. (More in the next few weeks.) If you wish to buy a resort property - THIS is the time to make 'stink-bids'. If you want to buy a development property and you have cash ... ditto. (Many developments are still under water).

In a west Toronto neighbourhood that once had a healthy contingent of blue-collar immigrants, there is a house that the neighbours talk about – not for its beauty, but for its former ugliness and disrepair. Listed for sale about a year ago, the owner told the real estate agent not to bother showing the place to buyers.

Some people say agents' low standing is because the Internet, which has made it easier for people to do their own research when looking for or selling a home, dilutes the broker's value. Others cite the distorted incentives of their commission structure. But I think it's also because most people can do basic math, and they intuitively understand what has happened to the pocketbook of a typical agent.

Last year, the number of homes sold was 465,000, an increase of nearly 40 per cent from a decade earlier. But the bigger growth has been in prices, which doubled in that time. Assuming a commission of 4 per cent, a home seller at the average price is now paying some $13,000 for the privilege of having an agent handling the deal. (Commissions can be higher or lower, of course.) So, the total amount of commissions paid to agents was about $6-billion last year, up from $2.1-billion in 1999 (again, we're estimating using 4 per cent as the rate). That's growth of nearly 11 per cent, compounded annually.

Mistake 1: Not knowing how much they can afford to pay for a house before they make an offer.

Prevention: Get pre-qualified for a mortgage from a Lender/Bank, so you know in advance exactly how much you can afford.

Mistake 2: Not finding out in advance whom the real estate agent represents.

Prevention: Asking your Realtor. Most people think their agent is working for them. But unless the agent is working as your buyer representative, he/she represents the seller.

Mistake 3: Not realizing that the wrong mortgage can cost thousands of dollars in unnecessary interest and taxes.

Prevention: Consulting with a mortgage specialist before making a final decision on which mortgage to choose.

Mistake 4: Not discovering hidden defects before buying a home.

Prevention: Hiring a professional to conduct a pre-purchase home inspection.

Mistake 5: Not knowing how debt can affect their ability to buy or refinance a home.

Prevention: Do not apply for credit. Ask your mortgage professional in advance

Everybody knows there are three rules in real estate: Location, location, location.

But are there any times when those rules are not valid?

Some of the old rules do not apply if you are in city like Windsor, Ontario, where the economy has been derailed by the sagging automobile industry. There, I think the term should be the economy, economy, economy! You can be in the best location in the world but if the economy doesn't match the location, what good is it?

We at weSellvancouver.ca say: forget about location if you hit the market at the wrong time.

Timing is often as important a factor as location and, if it is not more important, it is a close second. If everybody has jumped on the bandwagon and you are the last guy on the train, you have probably spent too much, even if it is a prime location.

I see many purchasers in Vancouver that have bought property in the best area of the city only to see the value plummet because they hit the market at the wrong time. Those people end up waiting four or five years for prices to get back to the level where they should be simply because they bought at the wrong time.

Economic factors aside, I still believe location is important but it is more about looking for the up-and-coming neighbourhood versus what is currently hot - find the diamond in the rough. Sometimes, it is predicated on where transit is going or what communities are developing major infrastructure. A location that is marginal now can become a hot go-to area in the near future.

In the end I feel that nothing trumps the location, which is always critical. Just do not forget the other factors!