Imminent Housing Crash

[89coupe]

Originally posted by BavarianBeast


Mainly looking along elbow drive between heritage and 4th street SW.

Our favorite neighborhoods are Chinook Park, Kelvin Grove and Elbow Park/Mt Royal.

I have two different clients looking in the same areas. Huge selection of homes available. Good luck with your search.

[max_boost]

Originally posted by 01RedDX


You mean... your lowball err I mean, offer actually worked? Get right outta town :rofl:

Speaking of meaningless city assessment numbers and true market value, a similarly sized property just up the street from you is selling for a bit less: http://www.realtor.ca/Residential/Single-Family/16020358/104-FORTRESS-BA-SW-Springbank-Hill-Calgary-Alberta-T3H0T3-Springbank-Hill

I'm sure you are aware and I hate to say it, but you may have to look at breaking that psychological 1MM barrier in the near future to be competitive. I already did.

$999k lol :D

[01RedDX]

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[Sugarphreak]

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[you&me]

Originally posted by Sugarphreak



you guys and your 999 deals :rofl:

Just be glad they're not offering $888 :rofl:

[Buster]

Originally posted by 01RedDX


You mean... your lowball err I mean, offer actually worked? Get right outta town :rofl:

Speaking of meaningless city assessment numbers and true market value, a similarly sized property just up the street from you is selling for a bit less: http://www.realtor.ca/Residential/Single-Family/16020358/104-FORTRESS-BA-SW-Springbank-Hill-Calgary-Alberta-T3H0T3-Springbank-Hill

I'm sure you are aware and I hate to say it, but you may have to look at breaking that psychological 1MM barrier in the near future to be competitive.

That jordan listing is SP?

Haha...I drive by that house many times per day....I often wondered if it was a beyonder.

[Zhao Kan]

Originally posted by you&me
I like your point about it not being an on-going business relationship. Frankly, WGAF if a seller's offended by your offer.

FWIW, I've started seeing a lot of infills with ~20% price reductions (mostly developer / new builds). Obviously, a builder probably has more leeway in pricing, but it's far from unheard-of to see reductions in that range in the market today... Heck, look at SP's house - he's ~15% off on his ask already, no?

I bought recently, a house that I was looking at exact clones of last year, in the same area. I saved well over 15%. My estimate is I might of even saved just over 21%. That was a new construction spec home though. I know a bunch of people who have bought recently, and I’m not the only one that has successfully lowballed that hard on a new construction. What I have noticed myself is:

-The housing market for new homes seems to have changed. A bunch of builders blew out all their quick possessions and haven’t really replaced that stock. Having done sales before, my builder stunk of absolute desperation to make a deal with anyone for any price on anything. They were discounting and throwing stuff we were just casually asking about. My wife asked them if it came with XYZ (I forget what she was asking about) and the sales lady said ‘no…. but we’ll throw that in!’. I asked the price and she was oh we can reduce it another 10g. I wasn’t interested in it very much walking into it, but I left there thinking we are buying this place because we are going to low ball the shit out of it and they are going to accept it… and they did lol. I do think the time to lowball on new construction has probably passed though by about 3-4 months.
-Used homes prices haven’t really changed much for what they’re getting listed for, but I’m not sure how much longer that can last because I know in the baller multi 7 figure per home area by me every 3rd home is for sale.
- The new condo market is retarded and I don’t get it. They’re releasing new builds and pricing them like we’re in the biggest boom ever imaginable. I just looked at one as a potential investment on opening day, and they wanted almost 400g for a piece of shit 850sq ft ‘luxury’ condo tower in the suburbs. What a joke, but the funny thing is some real estate agent put deposits on 16 units. I have a feeling foreign investors are still buying like crazy making that market totally not worth it.
-The condo market has fallen out pretty hard here for used. I’ve seen prices on a few that made me scratch my head wondering what the catch was. I saw a unit in the same building I just sold one of my units in 6 months ago, priced at about 10% under what I sold for (same exact floor plan). I was pretty tempted to buy it.

[gwill]

Was that the signature launch? Did they try and tell people they had lots pre sold? I can't imagine that being the case. Which builder did you get a good low ball on? Sounds like you got a great deal.

[89coupe]

Originally posted by Zhao Kan


I bought recently, a house that I was looking at exact clones of last year, in the same area. I saved well over 15%. My estimate is I might of even saved just over 21%. That was a new construction spec home though. I know a bunch of people who have bought recently, and I’m not the only one that has successfully lowballed that hard on a new construction. What I have noticed myself is:

-The housing market for new homes seems to have changed. A bunch of builders blew out all their quick possessions and haven’t really replaced that stock. Having done sales before, my builder stunk of absolute desperation to make a deal with anyone for any price on anything. They were discounting and throwing stuff we were just casually asking about. My wife asked them if it came with XYZ (I forget what she was asking about) and the sales lady said ‘no…. but we’ll throw that in!’. I asked the price and she was oh we can reduce it another 10g. I wasn’t interested in it very much walking into it, but I left there thinking we are buying this place because we are going to low ball the shit out of it and they are going to accept it… and they did lol. I do think the time to lowball on new construction has probably passed though by about 3-4 months.
-Used homes prices haven’t really changed much for what they’re getting listed for, but I’m not sure how much longer that can last because I know in the baller multi 7 figure per home area by me every 3rd home is for sale.
- The new condo market is retarded and I don’t get it. They’re releasing new builds and pricing them like we’re in the biggest boom ever imaginable. I just looked at one as a potential investment on opening day, and they wanted almost 400g for a piece of shit 850sq ft ‘luxury’ condo tower in the suburbs. What a joke, but the funny thing is some real estate agent put deposits on 16 units. I have a feeling foreign investors are still buying like crazy making that market totally not worth it.
-The condo market has fallen out pretty hard here for used. I’ve seen prices on a few that made me scratch my head wondering what the catch was. I saw a unit in the same building I just sold one of my units in 6 months ago, priced at about 10% under what I sold for (same exact floor plan). I was pretty tempted to buy it.

What community did you buy in?

[Zhao Kan]

Yes it was signature, good guess. Did you check it out too?

There was a real estate agent in the lineup in front of me saying he was putting deposits on 16 units though, so that was probably legit. He bought all the ones I’d be interested in, so I’d say good eye on whoever he was buying for, but IMO for rental units there are way better buys out there so I’m really surprised local people are still buying shitty condos for the price of a house with twice the sq feet when it’s not even downtown. That’s my impression anyway and maybe they see something I don’t?


I bought my house in Windermere in Edmonton with M&M, but I know someone who low balled with Reid in sprucegrove successfully on a similar home to mine (2000ish sq feet attached garage, granite/hardwood/good ensuite/all that crap the joneses demand) but didn’t get quite as good deal (I think hers worked out to maybe 15ish% off from what I remember), and someone who got a better deal than me right after me with another builder with a much bigger home (I forget which builder) and they accepted his first offer. Like I said though, I think the window for low balling builders on houses is long gone because we all put our offers in almost at exactly the same time (april/may with quick possessions of about a month). I know with M&M, the sales girl told us we were her first offer, and she was working there for a couple months or something. By the time we closed she had several more offers on the go though, and most of those did officially sell shortly after.

[Cdog]

i read an article on herald today saying sept housing data was worst. So housing crash finally is taking place?

[kenny]

http://www.creb.com/Seller_Resources/Housing_Statistics/

Doesn't look all that bad to me outside of the condo market.

[holden]

Originally posted by kenny
http://www.creb.com/Seller_Resources/Housing_Statistics/

Doesn't look all that bad to me outside of the condo market.

Average detached house price dropped 8.8% YoY for the month of September. Of course, even for a month, the sample size is still small.

[macman64]

Originally posted by holden


Average detached house price dropped 8.8% YoY for the month of September. Of course, even for a month, the sample size is still small.

-4% is median. The average is often skewed. An 8% drop could mean everyone below 700k is getting the same as last year and the million plus places aren't selling.

[you&me]

Originally posted by macman64


-4% is median. The average is often skewed. An 8% drop could mean everyone below 700k is getting the same as last year and the million plus places aren't selling.

Which seems to be essentially what's happening...

[macman64]

Originally posted by you&me


Which seems to be essentially what's happening...

Agreed, I am just saying the 8% number makes it sound much worse.

[Sugarphreak]

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[suntan]

Living in Hillhurst might be in my future so crash, fuckers, crash!

[holden]

First week of October stats in. Average and median detached prices both down 6.8% year over year.

[GQBalla]

Think new home builders are moving on their prices yet?

[Buster]

Originally posted by GQBalla
Think new home builders are moving on their prices yet?

I have heard yes.

Friend of a friend got $40k off a new buildin Auburn.

[max_boost]

Originally posted by Sugarphreak

Well, it was imminent.... haha

How's your place coming along bro?

[Buster]

Every passing day I'm more convinced that Canada and Calgary are going to get sideswiped hard with a housing correction.

[TomcoPDR]

Originally posted by Buster
Every passing day I'm more convinced that Canada and Calgary are going to get sideswiped hard with a housing correction.

Based on what factors??

[Buster]

Originally posted by TomcoPDR


Based on what factors??

1. Macro economic factors - long term global economic health is not going to be moving up any time soon. Trade is collapsing, etc.

2. Energy is going to stay cheap. Really cheap. For a long time.

3. debt/revenue ratios will likely not continue in the same fashion.

4. The public will move from a "housing is a great way to inflate my wealth" mentality to a "housing is a cost" mentality.

5. Canada will not be able to maintain control of its interest rates long term. We're at the mercy of global capital markets much more than we think, and we may not be positively correlated to the US economy forever. In other words, Canadians may become relatively poorer on the global scale, especially compared to Americans. We're seeing this already with out currency.

[Kloubek]

Originally posted by Buster


I have heard yes.

Friend of a friend got $40k off a new buildin Auburn.

Yeah - we were recently looking in Chesteremere at some spec homes, and even the salesperson told us we could get it significantly cheaper and to put in an offer.

[max_boost]

If that's true, great time to buy. could be limited time offer like early 2009 or prolong. Those of you with vision, be fearful when others are greedy and greedy when others are fearful. :D

[TomcoPDR]

Originally posted by Buster


1. Macro economic factors - long term global economic health is not going to be moving up any time soon. Trade is collapsing, etc.

2. Energy is going to stay cheap. Really cheap. For a long time.

3. debt/revenue ratios will likely not continue in the same fashion.

4. The public will move from a "housing is a great way to inflate my wealth" mentality to a "housing is a cost" mentality.

5. Canada will not be able to maintain control of its interest rates long term. We're at the mercy of global capital markets much more than we think, and we may not be positively correlated to the US economy forever. In other words, Canadians may become relatively poorer on the global scale, especially compared to Americans. We're seeing this already with out currency.

#3 is the scariest I fear too

[Buster]

Originally posted by TomcoPDR


#3 is the scariest I fear too

This is true for corporate equity as well.

The market is starting to signal that low rates are no longer going to prop up the equity markets (which have benefited from leveraging/buybacks at a staggering rate). Corporate bond markets can also reach saturation.

Beware your stock portfolio.

[suntan]

Calgary (and most of Canada) does not build housing like they do in the US.

Down there, virtually every home is a spec house. They build entire neighbourhoods all at once and then the salespeople hope to FSM that they can sell all of the units.

Up here, builders and developers build as units are sold. So when downturns happen, they simply stop building. Works well at preserving capital as well as preventing massive housing crashes due to excess new supply.

[Buster]

I'm not sure new house inventory is a big contributor to a housing crash.

[suntan]

Isn't that what I just said?

[Buster]

Originally posted by suntan
Isn't that what I just said?

I think you said that massive housing crashes can happen due to "excess new supply".

[suntan]

It can be a contributor, yes, in the US. Certainly not here though.

[Buster]

Originally posted by suntan
It can be a contributor, yes, in the US. Certainly not here though.

Not to belabor the point, but you said that it would help in avoiding a crash in Canada.

My point is that it wouldn't be a big factor in Canada. It's not going to have much of an impact on mitigating a crash.

[suntan]

Whatever then. I guess supply has nothing to do with prices.

[riander5]

Did the housing crash happen? Did sugarphreak sell his million dollar bungalo? Will the liberals get elected?

All questions i need answers to

[max_boost]

Housing crash hasn't happened yet lol

No I don't think Sugarphreak sold yet. Honestly I don't think it will at that price. I'll put a $100 bet that it won't sell for more than $999,999.99. Deadline Jan 1, 2016 lol Sorry SP don't be mad at me bro. :D

I say 50/50 on Liberals getting elected.

[Buster]

Originally posted by suntan
Whatever then. I guess supply has nothing to do with prices.

In a price shock environment?

Not really.

[Buster]

This election is bad news for home values. At least in the short term.

[Cos]

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[Buster]

Originally posted by Cos
^^ care to elaborate on your guess? Be interested to see how it plays out. My guess a few pages back was proven wrong.

The only thing holding up housing values in Calgary is confidence.

Markets hate uncertainty, and we dont know how the new regime will impact the oil and gas business in Alberta.

As a result, no half intelligent person is going to lever up on a house in this environment. A good portion of people are going to downsize.

At least Vancouver and Toronto a bit have hot money inflowing to prop things up. Our valuations were based in irresponsible yuppies and welders who have no clue.

[Xtrema]

Originally posted by Buster


The only thing holding up housing values in Calgary is confidence.

Markets hate uncertainty, and we dont know how the new regime will impact the oil and gas business in Alberta.

As a result, no half intelligent person is going to lever up on a house in this environment. A good portion of people are going to downsize.

At least Vancouver and Toronto a bit have hot money inflowing to prop things up. Our valuations were based in irresponsible yuppies and welders who have no clue.

We didn't need Federal Liberal before this started to happen. All these already started with provincial NDP along with global energy climate.

Fed Liberal won't be as good as Conservatives but not as bad as Fed NDP.

The problem is, with no Liberal MPs in Alberta, will Trudeau keep caring about Albertans going forward. And how well will Notley works with Trudeau is yet to be seen.

1 thing is for sure. Business climate just got tougher for O&G. I'm cautiously optimistic. And if Trudeau part 2 brings back $1 houses like his dad, I'm ready! :rofl:

[Buster]

Originally posted by Xtrema


We didn't need Federal Liberal before this started to happen. All these already started with provincial NDP along with global energy climate.

Fed Liberal won't be as good as Conservatives but not as bad as Fed NDP.

The problem is, with no Liberal MPs in Alberta, will Trudeau keep caring about Albertans going forward. And how well will Notley works with Trudeau is yet to be seen.

1 thing is for sure. Business climate just got tougher for O&G. I'm cautiously optimistic. And if Trudeau part 2 brings back $1 houses like his dad, I'm ready! :rofl:

Ultimately, I believe a federal liberal win is more dangerous than a provincial NDP win.

The NDP are incompetent, but probably would have figured out not to do something stupid in the end.

The Federal liberals are likely to do something actively punitive. (A carbon policy designed to transfer wealth, for instance.)

[HiTempguy1]

Originally posted by Buster


Ultimately, I believe a federal liberal win is more dangerous than a provincial NDP win.

The NDP are incompetent, but probably would have figured out not to do something stupid in the end.

The Federal liberals are likely to do something actively punitive. (A carbon policy designed to transfer wealth, for instance.)

Exactly. The federal liberals have zero reason to do anything for us at all. It'll be back to the good ol' days

[Cos]

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[Sugarphreak]

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[Cos]

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[Sugarphreak]

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[phreezee]

Deficit spending by the Liberals should send the interest rates up in a year or so.

[Buster]

Reports out of Ft Mac have sales down 40% YOY, with an almost 13% decline in prices this year.

And falling at about 1% per month.

I went and checked MLS...and saw a blue polka dot map.

[Sugarphreak]

...

[Buster]

Do you have volume figures?

[Sugarphreak]

...

[ercchry]

Originally posted by Buster
Reports out of Ft Mac have sales down 40% YOY, with an almost 13% decline in prices this year.

And falling at about 1% per month.

I went and checked MLS...and saw a blue polka dot map.

yet sub-$500k still only gets you into a double wide :nut:

[tirebob]

Houses in our hood in Airdrie seem to sell fast and for good money. My neighbour just sold his in 3 weeks for only $4900 less than asking. Smallest house on the block and sold for only $15k less than the most expensive house sold for last year in summer. No drop in dollar and really I think and increase based on his house. He got 25k more than any of us assumed he would.

[Buster]

Originally posted by Sugarphreak


Just from the CREB site:
http://www.creb.com/Seller_Resources/Housing_Statistics/

Total Sales:
Sep: 1448
Oct: 1095
Last week: 308

Expressed as a percent to last year:
Sep: -32.37%
Oct: -34.94%
Last week: -33.62%

So less houses selling, but at an increased higher cost

Interestingly in September, active listings were up 21% compared to last year. So a lot of people looking to move right now.

Volume way down but prices maintaining is just the pre-cursor. The volume numbers are way more important than the price numbers.

It's probably just the last of the "dumb money" (sorry) getting into the market.

[Buster]

Originally posted by tirebob
Houses in our hood in Airdrie seem to sell fast and for good money. My neighbour just sold his in 3 weeks for only $4900 less than asking. Smallest house on the block and sold for only $15k less than the most expensive house sold for last year in summer. No drop in dollar and really I think and increase based on his house. He got 25k more than any of us assumed he would.

Price adjustments in the marketplace wouldn't be smooth over all price ranges, I wouldn't image (for a variety of reasons).

I'd be looking with most interest at when/how the sales volumes for the entry level houses are going.

A market MUST have entry level buyers willing to buy in order to maintain pricing all the way up the food chain.

[codetrap]

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[Feruk]

Originally posted by Sugarphreak
but at an increased higher cost
Huh? Prices are down, not up. Not understanding...

[bjstare]

Originally posted by Buster


Volume way down but prices maintaining is just the pre-cursor. The volume numbers are way more important than the price numbers.

It's probably just the last of the "dumb money" (sorry) getting into the market.

Couldn't agree more.

Sold our place last week and made a bit of money on it, gonna house sit for my parents for at least the next couple months (probably closer to 6), and see how things turn out. I'm hoping for a slide sooner rather than later, but I'm also thinking we may not see any significant downward movement in prices for 6-12 months. :dunno: Either way, I'm feeling good about my gamble getting out of the market right now.

[Xtrema]

rental market is softening.

Starting to see rent being reduced and/or 1 month free with signing 1 year lease.

Smell like 2008/9 all over again.

[03ozwhip]

I took a gamble building right now but since I plan on staying there for a while, I'm hoping I don't see any dramatic drop in the next 5 years or if it does real soon, that it recovers.

[pheoxs]

Originally posted by Xtrema
rental market is softening.

Starting to see rent being reduced and/or 1 month free with signing 1 year lease.

Smell like 2008/9 all over again.

I noticed that too, I ended up dropping rent for one of my rooms for rent by a little bit. Not a big deal for me since its just extra income for savings but it is noticably slower than this summer.

Shameless plug: Anyone looking for a room to in airdrie :bigpimp:


Originally posted by tirebob
Houses in our hood in Airdrie seem to sell fast and for good money. My neighbour just sold his in 3 weeks for only $4900 less than asking. Smallest house on the block and sold for only $15k less than the most expensive house sold for last year in summer. No drop in dollar and really I think and increase based on his house. He got 25k more than any of us assumed he would.

Which neighbourhood? My neighbhour was asking more than I paid for my house last summer, and mine has the same layout but more upgrades. I saw he sold recently, curious what it sold for.

[max_boost]

rents are down. However pfy owners? Asking price of these condos is lol lol lol

[tirebob]

Originally posted by pheoxs






Which neighbourhood? My neighbhour was asking more than I paid for my house last summer, and mine has the same layout but more upgrades. I saw he sold recently, curious what it sold for.

My house is in Summerhill. It is a bit of an older area (70's/80's) I bought in 2009 for $299,000. It is a typical raised bungalow on a large pie shaped lot with a detached 2.5 car shop. Houses started climbing shortly after buying it. Smaller house without updates (which mine has lots of upgrades I have done) have been going for mid to high 300's with one just going for over 400k last summer. The one that just sold for $385,000 is an average smaller home with some upgrades but far from complete...

Our neighborhood seems to be doing well...

[Tik-Tok]

Originally posted by tirebob

Our neighborhood seems to be doing well...

From what I've seen, and I think others have mentioned, anything under $500g is doing great, anything over not so much.

I'm on a mailing list for houses with a 3+ garage (under $700g), and there isn't a whole lot on the market, but quite a few have been dropping steadily in price for the past few months.

[msommers]

Max, has your place sold already? In the condo yet?

[max_boost]

^^^
Indeed.

I was aggressive. I kept dropping the price until someone made an offer.

I'm still monitoring my complex and many owners are still out to lunch in their asking prices. Some simply don't care. 9 months for sale, so what lol

[TomcoPDR]

Originally posted by max_boost
^^^
Indeed.

I was aggressive. I kept dropping the price until someone made an offer.

I'm still monitoring my complex and many owners are still out to lunch in their asking prices. Some simply don't care. 9 months for sale, so what lol

With the exception of primary home, I just can't see leaving a property on the market over 6 months to be a good "investment".

[max_boost]

Sometimes the wait is worth it. There's only 1 penthouse unit left at Waterfront and it's brand new on market for the past 4 years. One sold last month to a Beyonder's BFF. :D

Just need that one right buyer.

[89coupe]

I just sold a million dollar property today, only 35 days on market. Still money out there.:bigpimp:

[max_boost]

Originally posted by 89coupe
I just sold a million dollar property today, only 35 days on market. Still money out there.:bigpimp: Link? That's boss. :bigpimp:

You are doing great work!:thumbsup:

[89coupe]

Originally posted by max_boost
Link? That's boss. :bigpimp:

You are doing great work!:thumbsup:

I don't think I should post it on here. It's the Priddis Acreage on my site. Conditionally Sold today.:zzz:

[Aaaaaron]

Originally posted by tirebob


My house is in Summerhill. It is a bit of an older area (70's/80's) I bought in 2009 for $299,000. It is a typical raised bungalow on a large pie shaped lot with a detached 2.5 car shop. Houses started climbing shortly after buying it. Smaller house without updates (which mine has lots of upgrades I have done) have been going for mid to high 300's with one just going for over 400k last summer. The one that just sold for $385,000 is an average smaller home with some upgrades but far from complete...

Our neighborhood seems to be doing well...
I've been watching duplexes in Summerhill for quite a while, no budging in the price at all.

Last week I saw a infill town house in Mount Pleasant listed for 300k but was easily worth 500-600k. It's not listed anymore, but I would be curious if it sold or they just took it down.

[Power_Of_Rotary]

What's the outlook of downtown condos for Q1 & Q2 2016?
Seems like the rental value is still there?

[bjstare]

Originally posted by Power_Of_Rotary
What's the outlook of downtown condos for Q1 & Q2 2016?
Seems like the rental value is still there?

lolwut

Its a full on renters market right now. A buddy of mine is looking for condos/apartments to rent and he says there's tons out there. The place he moved out of had over 50 showings on the first day when he got it a couple years ago, and as of right now he's been out of it for over a month and it still sits vacant.

So I guess to answer your question, tons of rental value if you're the renter...

[Buster]

What's the best way to find house rentals. We might consider renting down south calgary instead of buying.

[topsecret]

Originally posted by Buster
What's the best way to find house rentals. We might consider renting down south calgary instead of buying.


I don't see a benefit of renting when you can afford to buy...it's a great time for first time buyers to get into the market right now, interest rates are extremely low and there are constantly good deals that keep popping up, you just have to make sure you are pre approved and act fast on homes that interest you!

[sabad66]

^ rentfaster.ca seems to be the best

[Power_Of_Rotary]

Originally posted by cjblair


lolwut

Its a full on renters market right now. A buddy of mine is looking for condos/apartments to rent and he says there's tons out there. The place he moved out of had over 50 showings on the first day when he got it a couple years ago, and as of right now he's been out of it for over a month and it still sits vacant.

So I guess to answer your question, tons of rental value if you're the renter...

It could be sitting vacant but the rent is still not that cheap (I am referring to DT condos only)

[Buster]

Originally posted by topsecret



I don't see a benefit of renting when you can afford to buy...it's a great time for first time buyers to get into the market right now, interest rates are extremely low and there are constantly good deals that keep popping up, you just have to make sure you are pre approved and act fast on homes that interest you!

You did notice the title of the thread, right?

[bspot]

Originally posted by topsecret



I don't see a benefit of renting when you can afford to buy...it's a great time for first time buyers to get into the market right now, interest rates are extremely low and there are constantly good deals that keep popping up, you just have to make sure you are pre approved and act fast on homes that interest you!

You can't be serious. Prices just starting to come off historic highs, the economy in the shitter, and now is the time to buy? :rofl:

[max_boost]

Originally posted by Power_Of_Rotary
What's the outlook of downtown condos for Q1 & Q2 2016?
Seems like the rental value is still there?

I see brand new 1/1 600sq.ft condos in Eau Claire Waterfront for as low as $1550. I think that's a great deal for the renter. There just isn't any money from an investment standpoint, $400k with $3-400 condo fees and low rents. :nut: :dunno:

[max_boost]

Originally posted by bspot


You can't be serious. Prices just starting to come off historic highs, the economy in the shitter, and now is the time to buy? :rofl:

It's always a good time to buy. Still lots of value out there. :D

[bjstare]

Originally posted by bspot


You can't be serious. Prices just starting to come off historic highs, the economy in the shitter, and now is the time to buy? :rofl:


Originally posted by Buster


[.....]

It's probably just the last of the "dumb money" (sorry) getting into the market.

[Buster]

Originally posted by max_boost


It's always a good time to buy. Still lots of value out there. :D

As someone sitting on a good amount of equity and a good amount of cash and the need to relocate across the city and upgrade by a bedroom....

Well the problem is determining if you have hammered the seller down enough to account for the coming correction.

The house I'm looking at I've had pricing discussions which are down about 16.5% off what I would have considered the market value a year ago. And about 24% off what the City has as the assessment.

[max_boost]

Well no one knows the bottom but will see who blinks first. Good luck. :devil:

[Buster]

Originally posted by max_boost
Well no one knows the bottom but will see who blinks first. Good luck. :devil:

The big Ontario correction was 30% in the early 90's.

So I guess that is something we could use as a baseline.

[max_boost]

Yea that'll wipe out a lot of HELOC's for sure. :rofl:

[Feruk]

Originally posted by topsecret
I don't see a benefit of renting when you can afford to buy...it's a great time for first time buyers to get into the market right now, interest rates are extremely low and there are constantly good deals that keep popping up, you just have to make sure you are pre approved and act fast on homes that interest you!
The whole logic of it being a great time to buy because rates are low is so idiotic. Where the heck do you think rates are gonna go?? You pretty much HAVE to bet that rates will never go up, or that "great investment" of a house is gonna bankrupt you (as a new buyer with little equity).

Hopefully there's my full dose of stupid for the day.

[Buster]

Originally posted by max_boost
Yea that'll wipe out a lot of HELOC's for sure. :rofl:

I think there is an entire generation of home owners that don't know what it is like to see their equity erode.

[Buster]

Originally posted by Feruk

The whole logic of it being a great time to buy because rates are low is so idiotic. Where the heck do you think rates are gonna go?? You pretty much HAVE to bet that rates will never go up, or that "great investment" of a house is gonna bankrupt you (as a new buyer with little equity).

Hopefully there's my full dose of stupid for the day.

I agree with you in terms of risk.

The problem (and this is really a global thing, not just Canada) is that they CAN'T allow rates to rise quickly, if at all. It would create a wave of defaults that would move quickly into social unrest.

Governments have their hands tied.

They can keep short term rates low via the central banks, but the real excitement happens when they try to manage bond yields.

Once you start to realize that the die has been cast on a lot of this stuff, and follow the implications of the current bubbles/monetary/fiscal policies to their logical conclusions...well things get frightening quite quickly.:eek:

[tirebob]

Originally posted by Feruk

The whole logic of it being a great time to buy because rates are low is so idiotic. Where the heck do you think rates are gonna go?? You pretty much HAVE to bet that rates will never go up, or that "great investment" of a house is gonna bankrupt you (as a new buyer with little equity).

Hopefully there's my full dose of stupid for the day. If you are getting in by the skin of your teeth and will lose everything if the rates climb I agree, but with the low rates it is prime time to get mortgages paid down much faster. I know myself, I have been able to drop my mortgage down by 11.5 years in the last 5 years because the rates are so low I can afford to dump extra on my principal every month, and it the rates climb I am able to absorb that. If you are able to pull that off, even temporary low rates can help you save big long term...

[Sugarphreak]

...

[sputnik]

Originally posted by Buster
I think there is an entire generation of home owners that don't know what it is like to see their equity erode.

Equity is imaginary money, unless you plan on moving back into your parents' house.

The real issue is whether or not you can still pay your mortgage.

[Feruk]

I just ran some numbers, and figure at today's rates I gotta pay $2,280/month to get into a $500K house (20% down). I then calculated what that same monthly money can afford at higher rates.

A 1% increase takes the $500K house down to $450K
A 2% increase takes the $500K house down to $413K

An 18% loss in housing value from a 2% rate increase... That completely excludes all other factors (our shitty Alberta economy etc.)

Originally posted by tirebob
If you are getting in by the skin of your teeth and will lose everything if the rates climb I agree, but with the low rates it is prime time to get mortgages paid down much faster. I know myself, I have been able to drop my mortgage down by 11.5 years in the last 5 years because the rates are so low I can afford to dump extra on my principal every month, and it the rates climb I am able to absorb that. If you are able to pull that off, even temporary low rates can help you save big long term...
If your investments can beat your mortgage rate, the ideal strategy is to pay minimum on mortgage, invest the money, and continue until rates start to rise. At that point, you take the money and dump it on your mortgage. What you're doing isn't really taking advantage of low rates.

[Buster]

Originally posted by sputnik


Equity is imaginary money, unless you plan on moving back into your parents' house.

The real issue is whether or not you can still pay your mortgage.

This isn't true. Equity is difficult to calculate accurately in housing because its not a liquid market, but it isn't imaginary.

There are two other areas where equity is "real"

- HELOCs

- upgrading to a new home. This is why the entry level buyer is so important to the upper end of the market. To upgrade from a mid-level house, you need to realize your equity, which is supplied by someone moving up from an entry level use...utilizing their equity which was realized by a first-time buyer. Expensive houses almost always require two, three or four cascading events of people realizing the equity in cheaper houses to move up.

[max_boost]

Or when you down size and free $100K. You don't always have to move back home although that's always an option. Just say you have to take care of your parents. :rofl:

[bspot]

Originally posted by Sugarphreak
I don't think it will be that bad unless this goes on for years.



I fear it's very similar to what happened with natural gas. Tons of cheap supply that can come on quickly. Therefore, no demand outstripping supply to cause a rise in prices.

Even without the cheap supply, the current glut will take a couple years to clear up.

I would put a large amount of money on the fact this will go on for years.