Home buying - 300K house or 400K house
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Posted on: 02-06-10 15:37:29
It seems CREA is not doing his job and RE industry is not happy.
If crea is calling price decline means- ready for crash. They are last one to predict Tsunami when you can see Tsunami with naked eyes.
http://www.theglobeandmail.com/report-on-business/house-prices-to-fall-next-year/article1589243/
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Houses prices are whatever people are willing to borrow and the banks are willing to lend.
Quote:We have been hearing these housing crash warnings for at least 4 years now.
Originally posted by rahul_singh23
If crea is calling price decline means- ready for crash. They are last one to predict Tsunami when you can see Tsunami with naked eyes.
It's always "coming" and "around the corner" and "very close".
Other than a few months in 2009 during the peak of the credit crisis, there hasn't been any evidence of large scale "crash".
I agree there has been some level of "correction" in very small, specific parts of the country like Calgary and the oil sands townships but overall it's far from being called a "crash".
If someone keeps crying wolf, eventually the wolf is gonna come some day.
Even a broken clock is right twice a day.
I do agree with you that "houses prices are whatever people are willing to borrow and the banks are willing to lend."
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Atleast we agree on one thing.
Quote:
Originally posted by pratickm
I do agree with you that "houses prices are whatever people are willing to borrow and the banks are willing to lend."
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Lot of experts were saying interest rate can not go high as Govt can not make RE price go down . 0.25 or 0.5 does not make too much difference but it creates panic in sheep.
RE was all set to correct in 2008-09 but Jim F came with great idea of cheap load of money with combo package 0/40, 5/35 and all risk pass to taxpayers (CMHC). That great idea sucked more people into bubble but helped some investors to rid off their properties.
All bust start from soft landing/correction. really good video.
http://albertabubbleblog.blogspot.com/2010/05/peter-schiff.html
Vancouver Realtor "we are different as all millionaires in the world are coming to Vancouver. We had Olympics."
Calgary Realtor " We are different as we have one the highest earning jobs, intermigration and young population"
Regina Realtor "We are different because we are booming and still cheap"
Winnipeg Realtor "We are different because wheat/food is sky rocketing and we are still cheap"
GTA realtor "We are different because we are biggest city, financial sector and most immigrant population"
Montreal realtor "We are different because all French speaking people in world wish to settle here. We love AB money and hate oil sand"
Halifax realtor "We are different because we are near to Europe and fresh/clean sea available here, forget Gulf of Mexico"
There is one thing common recent 80% first time buyers do not have even 10% down payment and lot of them are 3 paychecks away.
http://www.greaterfool.ca/2010/06/04/lessons/
Lesson one: Sellers disbelieve what’s happening. Lower asking prices take months to materialize.
My take: Last Q 2010 will be interesting. RE experts and salesman already feeling heat.
Lesson three: Anyone saying ‘it’s different here’ isn’t paying attention. In fact, those cities believed to be the most desirable can suffer the greatest damage.
My take: Common problem - No or 5% money down, 35 yrs mortgage and lowest interest rate possible without preparation of future.
Lesson four: Real estate is the most emotional of assets. When the emotion is fear, no sale.
My take: Little moment to higher interest rate will create fear in sheep
Lesson five: Houses can go to zero.
My take: For lot of people when mortgage is more than market price and that is only investment/saving they have.
Lesson seven: When the storms sets in, everyone’s hit.
My take: Storm is already set, how long and effective will be we have to wait/watch.
Can somebody guide some which good areas (intersections) in the GTA to buy a condo/townhouse.
It seems the thread has turned into a debate whether their will 
(or not !! 
) be a housing market crash.
Quote:
Originally posted by rahul_singh23
http://www.greaterfool.ca/2010/06/04/lessons/
Lesson one: Sellers disbelieve what’s happening. Lower asking prices take months to materialize.
My take: Last Q 2010 will be interesting. RE experts and salesman already feeling heat.
Lesson three: Anyone saying ‘it’s different here’ isn’t paying attention. In fact, those cities believed to be the most desirable can suffer the greatest damage.
My take: Common problem - No or 5% money down, 35 yrs mortgage and lowest interest rate possible without preparation of future.
Lesson four: Real estate is the most emotional of assets. When the emotion is fear, no sale.
My take: Little moment to higher interest rate will create fear in sheep
Lesson five: Houses can go to zero.
My take: For lot of people when mortgage is more than market price and that is only investment/saving they have.
Lesson seven: When the storms sets in, everyone’s hit.
My take: Storm is already set, how long and effective will be we have to wait/watch.
Canada home resales cool in May, listings fall
Sales of existing homes in Canada fell 9.5 percent in May from April as the country's real estate market slowed following months of brisk activity spurred by low interest rates, data on Wednesday showed.
The Canadian Real Estate Association said 37,576 homes were sold in May, down 9.5 percent from near-record activity in April and down 2.8 percent from May 2009.
The industry group said May's drop largely resulted from fewer sales in Toronto, Vancouver and Ottawa.
The cooler pace of activity is in line with a long-held view by economists that the market would start to slow with the onset of summer as more homes are put up for sale and interest rates began to rise. Sales peaked in December.
"Life in the fast lane is over for Canada's housing market. Now the question is whether it will stay in the middle lane, or brake even more aggressively," said Doug Porter, deputy chief economist at BMO Capital Markets in a commentary.
Can Rahul Singh give his experts opinion on this fall for the benefit of all?
Thanks,
"There is not one time in history when a bubble has not burst. When bubbles burst, they not only fall back to their mean average, they usually drop well below it."
When govt tries to work against free market ( low interest rates, 0/40, 5/35) leads to longer recession and more people got suck into this bubble. But what govt can do when 50%+ voters are on bubble side.
Every month we would see new data/reports which make us similar to US cities. Home ownership is not a human right but a privilege which comes with lot of financial discipline and responsibilities. But our govt, brokers, banks, CMHC and buyers made DEBT (Mortgage) available for anyone who can fog the mirror in winter.
Quote:
Originally posted by ashedfc
So, if you are buying to live: pick is spot a buy it (price does'nt matter, negotiate the mortgage in such a way that, even if you loose your job, you should be able to afford your home).
Price is the most important thing that matters. Debt is constant when buyer sign the paper, but its evaluation with interest change with time.
if house price is 15-20% down and interest rate is 1 or 2% higher which makes more sense when you are having good down payment?
You can not compete with the people who has nothing to loose so wait for right time when these people are not eligible to compete.
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Calgary's residential MLS sales plummet in May: CREA
http://www.calgaryherald.com/business/real-estate/Calgary+residential+sales+plummet+CREA/3160664/story.html
18.7% drop almost four times the national average
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