My Brother-in-law is an idiot

[max_boost]

Texas does not have a state property or personal income tax.

I have a buddy who has been talking about moving to Arizona. Your $40k down there goes a lot farther than it does up here

[turbotrip]

Originally posted by sputnik


Mark my words, at some point houses will be cheaper "tomorrow" than they are today.

its going to happen sooner than u think too, the real estate market has already slowed down a lot in the last few weeks. However its not going to drop substantially, it will just go back to how it was 2-3 years ago.

[Aleks]

Damn it. I was sure set on upgrading to a nicer house with my GF. I bought in October and with the two of us we can afford a much nicer house now.

Debating whether to go for it and get a nicer place and not have as many toys or stick with our place now and see what happens to the market.

[turbotrip]

^it would be a very stupid move for you to sell your house right now and buy a bigger house, wait 2-3 months and then think about it. We have a couple of houses for sale right now and I can tell you that the market is definitely slowing down and prices are going to have to drop because many houses arent selling

[max_boost]

^^^
WERD

This market has made some people crazy and greedy. My neighbour wants $679k for his 90 year old 1100 sq.ft bungalow. Sure it sits on a 50X120 lot but not like anyone is going to buy it and tear it down. His double detached garage is probably 90 years old too. If he did sell, it only tempts me but there's nothing like having a house right in the heart of the city.

[Lex350]

Originally posted by Alex_FORD


I have a second brother-in-law that made that same decision to wait in the mid 80s when the average house was worth 120k, so we waited 10 years and it costed him an extra 100 grand because the prices never did go to "shit"

have you ever heard of BreX?

there is something to be said about getting out when things are good. Greed, hurts many people. So you leave 20k on the table by selling early. It's better than what may happen if you hold on to things to long.

With all investing, you need to set a target and stick with it. Pushing for those last few bucks has a way of blowing up in your face.

[gran turismo]

Originally posted by googe


1) Fixed mortgages have nothing to do with prime rate (common misconception). They are determined by the bond market.

I'm curious as to what drives the Bond market. I thought it was interest rates. You know, the whole inverse relationship "theory".

[01RedDX]

.

[googe]

haha, "greed hurts many people" might be true, but comparing the real estate market to bre-x is nothing short of retarded the two have nothing in common

[Lex350]

ITS A METAPHOR YOU PUTZ!!!!


Used to make a point.



sorry if it was over your head.

[Alex_FORD]

Originally posted by rotten42


have you ever heard of BreX?

there is something to be said about getting out when things are good. Greed, hurts many people. So you leave 20k on the table by selling early. It's better than what may happen if you hold on to things to long.

With all investing, you need to set a target and stick with it. Pushing for those last few bucks has a way of blowing up in your face.

I lost on Bre-X but I didn't lose lots because my ownership was indirect through mutual funds,

However, you comment is in reply to my second brother-in-law who waited for housing to come down, but it never did. I don't see how it applies to him, because he wasn't a seller - he was a buyer.

I like your comment about selling early, and leaving 20k on the table. I think playing the timing game well is an ideal way to do 'business' but I also think its risky to play games with your home.
I bought my house primarily as a home - not an investment. In fact, I'm not too excited about investments that require continual payments yet no revenue - as is the case with my home.

Yikes, just like Robert Kiyosaki, I shiver everytime someone says that their house is a great asset.

[Maxt]

One more thing that will put an economic bite into people, that will push selling prices down somewhat, is reassesment under "market value" property tax assesment.. Once reality hits on the tax bill for a house that was once worth 175k and now is assessed at 350k, Thats going to force more people to give up home ownership , especially fixed income and retirees..While the city tax collectors look like geniuses for coming up with that, sadly it forces many to give up there own homes and puts older people quality of life at stake..
The other variable is what happens to insurance rates, on top of being mortgage poor.. Can you afford to insure your house anymore when the replacement price is double that of 2 years ago?..
Even if the purchase price freezes, there will be deals to be had in the assumables when the economy cannot bare so many increases at once..
Someone made the comment about wages versus costs, yes wages have gone up for some "menial Task" type jobs, but even 14/hour up from 9.50 isnt going to buy you house, a car and energy...To keep pace with alot of the increases, wages need to go from 9.50 to 19.00, which they are not... Even in the trades sectors , where there is a supposed shortage, wages havent risen by any measurable amount.. There are bonus's being paid for shit Jobs, in Crapville Alberta, but for Air conditioning mechanics, plumbers, electricians, mill wrights what ever in the major centres, the hourly rates has gone up by maybe .80/hour overly the last year or so... As a tradesmen myself,, my trade is one of the highest paid trade in Alberta, yet even I find the rising costs taking bites out of other parts of my life.. There is alot of media hype about working in Alberta, and wages, that really isnt true...

[lint]

Originally posted by googe
haha, "greed hurts many people" might be true, but comparing the real estate market to bre-x is nothing short of retarded the two have nothing in common

Both have a problem with speculation driving up the prices. Unless you truly believe that the increase in housing costs (50% in the past year) are entirely attributed to population growth/immigration. There are supply and demand factors, but not to justify the insane price jumps.

[grandmasterE]

Originally posted by max_boost
Texas does not have a state property or personal income tax.

I have a buddy who has been talking about moving to Arizona. Your $40k down there goes a lot farther than it does up here

The Texas cities have more than enough property tax (~3% of house value per year! That's $12,000 per year on that $400,000 house). Add the cost of house insurance (another ~$8-10,000 per year in Houston) and it's not going to help your lifestyle.

I think one of the facts that people seem to forget about is the fact that many people that are buying houses already own houses and may be selling them to upgrade. The 5000-10000 new households (just a guess) that are migrating here or buying a first home can complain all they want, but the larger market force is the 300,000 (also just a guess) existing households that have no problem paying $500K or more for a house. Another force that will control any decline in the market is the market perspective. Not many people will be willing to reduce the asking price of a house that is 'worth' $400K today below $400K (a few panic sellers aside). Most will simply let the house sit on the market for 90-120 days (which is more reasonable anyways). If no one is willing to reduce their price unfortunately you have to pay it. This is exactly what is going on in many expensive markets in Canada. A prime example would be Montreal where some $800K condos will sit on the market for a year or two, but you'll never be able to buy it for $700K.

Housing isn't completely a market economy; few present owners 'need' to sell their houses, so they are free to sell for whatever price they set. Unfortunately in this case the demand for houses is at the mercy of the supply.

One final thing to think about is this: after the recent skyrocketting prices in Calgary, my guess is that very few people would be in trouble if the interest rates went up. If the interest rates went up, almost everyone could simply refinance over a longer term, keep the same payments, and keep all the equity they have in their houses. Here is an example with a home purchased at the median value 1 year ago, with a 5-year mortgage renewal:

house value then: $280,000
house value now: $370,000
house value 5 years from purchase (assume 4% growth which is very conservative): $432,000

assume you put 5% down (ignore CMHC for now) use 4.5% interest:

$14,000 down, $1478 per month. End of term (5 years) owe: $233, 702.

If rates go up to 8% (almost double):

refinance your mortgage over 25 years: $1727 per month.

So your payment goes up $249/month, but you have $152,000 in equity. Hopefully in five years, you're making $250 per month more (quite realistic I would think). That's only $1556 inflation adjusted (assuming 2.1% annual inflation) to the beginning of the mortgage. That is if the lending rate doubles (which is very pessimistic). Does this sound like the kind of situation that will have the ~300,000 existing households (again, that number is just a guess) that owned houses before June 2005 selling their houses for $1? I wouldn't think so!

Sorry to the people who aren't already in the market, but I wouldn't expect even a doubling of interest rates over five years to cause any 'fire sales'.

[Alex_FORD]

The asking value of the house across the street from me is on MLS.ca......it's twice the price that I paid in 2001.

Sweet for me

Not so sweet for the naysayers that were hoping for the prices to drop. It sucks to play games with your home

[googe]

Announcement was today...

July 11 (Bloomberg) -- The Bank of Canada kept its benchmark interest rate unchanged after seven prior increases and repeated a May statement that those moves are enough to return inflation to its 2 percent goal.

The target rate for overnight loans between commercial banks remains 4.25 percent, the highest since August 2001, and 1 percentage point less than the U.S. federal funds rate. Seventeen of 24 economists polled by Bloomberg News predicted today's decision, with the rest forecasting a quarter-point increase.

once again, economists > beyond speculators. no double digit interest rates for us.

A drop in employment and a narrower trade surplus reported since the bank's May 24 meeting suggest the world's eighth- largest economy is cooling. Canada's seven quarter-point increases beginning in September represented the biggest cumulative rise since 1997-98, and the country's dollar reached the highest since 1978 after the last move, hurting exports.

^^similar to what I was saying about increasing it to curb inflation having a negative effect on foreign investment.

[syeve]

Originally posted by turbotrip


its going to happen sooner than u think too, the real estate market has already slowed down a lot in the last few weeks. However its not going to drop substantially, it will just go back to how it was 2-3 years ago.

No substantial drop and 2003 house prices in the same sentence? House prices were half what they are today.

[turbotrip]

^ i dont mean prices, i mean price trends

[k98303]

i love bc, at least it does not snow as much as here....

[syeve]

Originally posted by turbotrip
^ i dont mean prices, i mean price trends

Ahhhh