tag:blogger.com,1999:blog-7123542260692860177.post2657016660572513413..comments2023-12-02T00:38:46.467-08:00Comments on House Hunt Victoria: AdviceHouseHuntVictoriahttp://www.blogger.com/profile/07456914359088891317noreply@blogger.comBlogger32125tag:blogger.com,1999:blog-7123542260692860177.post-87585422007075596672010-03-21T13:03:53.615-07:002010-03-21T13:03:53.615-07:00Yep... I've been predicting that on here for y...Yep... I've been predicting that on here for years. Goes hand in hand with folks fleeing after the "Olympic bounce" turned out to be the "olympic SPLAT".PainInThehttps://www.blogger.com/profile/09632899342107018371noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-42343888377341962102010-03-19T21:05:20.854-07:002010-03-19T21:05:20.854-07:00Has anybody seen the amount of properties coming o...Has anybody seen the amount of properties coming out for rent in websites like craiglist and kijiji lately, I would say we will see a huge correction in rentals in the next 2 monthsWiseInvestor70https://www.blogger.com/profile/08086635041630006514noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-58266009689952878822010-03-16T20:24:09.226-07:002010-03-16T20:24:09.226-07:00Make that "Bull and Flatulent"Make that "Bull and Flatulent"PainInThehttps://www.blogger.com/profile/09632899342107018371noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-84786382339653558292010-03-16T20:16:55.286-07:002010-03-16T20:16:55.286-07:00"Sure, just quit your job and move to somewhe...<i>"Sure, just quit your job and move to somewhere economically depressed enough that houses are 250K." - B&F (Bull and Fake)</i><br /><br />Just for your information, there are plenty of places in the US where nothing is "economically depressed" save real estate values where $250k can get you what would cost well over a million here. There are millions of people still working in Las Vegas, Phoenix, and Southern California with good well-paying jobs.<br /><br />Just because you and a group of fools accept ridiculous bubble prices far above what average people can afford doesn't mean they are representative of a good economy, or that they're going to last.<br /><br />Once again, you merely reveal your elitist conceit.PainInThehttps://www.blogger.com/profile/09632899342107018371noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-41163587302117859452010-03-16T15:35:51.616-07:002010-03-16T15:35:51.616-07:00From Mish
Canadian credit bubble in pictures
Yo...From Mish <br /><br /><a href="http://globaleconomicanalysis.blogspot.com/2010/03/canadian-credit-bubble-in-pictures.html" rel="nofollow">Canadian credit bubble in pictures</a><br /><br />Yowza those are some steep graphs.Robert Reynolds - HMR Insurancehttps://www.blogger.com/profile/10939128478955272061noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-77782639703142856932010-03-16T11:42:55.147-07:002010-03-16T11:42:55.147-07:00Financial Post reports:
Pricey real estate points...<i>Financial Post reports:<br /><br />Pricey real estate points to faster rise in Canadian rates</i><br /><br />Notice that the Financial Post talks a different line from the TC, Sun, etc. although all are owned by Canwest?<br /><br />Reason is the FP is marketed to people who actually know something about finance and are not a bunch of dupes like the readers of the local papers.patriotzhttps://www.blogger.com/profile/11154064267408955762noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-44038770396341028472010-03-16T07:48:04.939-07:002010-03-16T07:48:04.939-07:00I'm curious if others have the same glimmer of...I'm curious if others have the same glimmer of hope I do. I've been lurking on this blog for a few years now waiting for the downward trend to start. <br /><br /> Last year I finally saw the end to the market as fundamentals came home to roost and the housing market hit a wall. With everywhere else in the world going through tough times I didn't think our government would throw more fuel on the fire... then the interest rates dropped to the lowest level in our history.<br /><br /> Fast forward to the present and I think something major has changed. It looks like the government isn't going to topple the housing bubble on its own, but has stepped away from it refusing to help it any further. <br /><br /> So... in a very long winded way, I feel some hope. The upward market appears to have run out of it's own steam and for the first time I can't see anyone around who will throw more coal into the burner. Even if it finds a few more miles of track, does anyone see an external source on real estates side?Inglishmagorhttps://www.blogger.com/profile/06512753372584425267noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-13456031532310031192010-03-16T02:26:30.518-07:002010-03-16T02:26:30.518-07:00This comment has been removed by a blog administrator.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-30735288252057480492010-03-15T16:37:16.371-07:002010-03-15T16:37:16.371-07:00OMC,
Thanks for the link to that article. I see ...OMC,<br /><br />Thanks for the link to that article. I see it is now online at the <a href="http://www.timescolonist.com/business/Canadian+housing+market+shows+signs+cooling/2686067/story.html" rel="nofollow">Times Colonist - click here</a> <br /><br /><b>Canada's hot housing market now cooling off</b><br /><br />Should be in tomorrow's paper. A local article by Darren or Carla may appear later this week. This is what bears like to read...<br /><br /><i>"Time will tell how normal the market becomes, but I think there are pretty clear signs that some self-correcting mechanisms are starting to take over and lead to a calmer market, compared to what we saw in late 2009," said Douglas Porter, deputy chief economist at BMO Capital Markets.<br /><br />January and February are generally not considered great months in the real estate industry, as potential buyers put off house shopping until the weather improves. Still, Porter said each month's data are crucial, and <b>he recalled that weak sales in the early winter of 2008 foreshadowed a downturn in real estate that year.</b></i>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-20120719447967544322010-03-15T16:13:23.733-07:002010-03-15T16:13:23.733-07:00If they want the house really badly (i.e. feel the...If they want the house really badly (i.e. feel they will greatly benefit from the INTANGIBLES of home ownership) and won’t be stretching hugely to buy it, then buy the damn thing and stop hanging around bear blogs ;-) This is especially true if they have very secure jobs and/or are very sure they want to live in Victoria for a long time. Inflation will probably skate their house purchase on-side (in nominal terms) over the long haul.<br /><br />If they have to stretch to buy the place they want they would be better off waiting a few years in their current situation if it isn’t intolerable. Save money aggressively. Their condo value could fall, but likely the house they want will fall proportionally which will still produce a savings (the house falls same % but more $ since it is probably twice as expensive). <br /><br />If they sell they face immediate transaction costs, they also face a crappy investment environment for their $ in the short term. GICs are currently pathetic as are bonds. Stock market returns should be adequate over the long term. But over the short term (1-5 years) it wouldn’t make sense to put their proceeds in the stock market if they are waiting to jump back into housing. The scenario that caused a rapid plunge in Victoria home prices could also cause a plunge in the stock markets. That said if they value flexibility and mobility maybe the selling and renting option makes sense. Also if they use that cash to top up RRSPs, TFSAs, RESPs etc they will be more financially secure than the vast majority of Canadians. If they sell, they should sell because they are sold on the benefits of renting (flexibility, mobility, diversifying their assets, etc.)<br /><br />My worry about selling ONLY to take advantage of the coming plunge in house prices is that the “plunge” might be in slow motion and might last years. The “plunge” might even just consist of stagnant prices for ten years so that house prices fall in real terms, but hardly at all in nominal price. Or the “plunge” could happen soon and be a true plunge of 20 to 50%. Even if housing prices do plunge there is no guarantee they buy the bottom. So they are unlikely to get the full theoretical benefit of their strategy. Finally, selling JUST to wait for the plunge makes them heavily invested in one possible evolution of the housing market. That adds one worry that they probably don’t need.<br /><br />How’s that for an ambiguous answer ;-)caveat emptorhttps://www.blogger.com/profile/15318994505715193523noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-76342197717518494332010-03-15T15:42:17.154-07:002010-03-15T15:42:17.154-07:00Just Janice,
you did not mention taxes in your ca...Just Janice,<br /><br />you did not mention taxes in your calculation. They would affect the income stream from the money in the bank, no?Unknownhttps://www.blogger.com/profile/03610949355592602680noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-52314437026336852192010-03-15T15:20:09.636-07:002010-03-15T15:20:09.636-07:00Some more bear scat<a href="http://www.vancouversun.com/business/Home+resales+decline+February+with+biggest+drop+Vancouver/2684675/story.html" rel="nofollow"><br />Some more bear scat</a>omchttps://www.blogger.com/profile/11570216584047858772noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-9561455106694265702010-03-15T14:19:35.432-07:002010-03-15T14:19:35.432-07:00Sell. Rent. Buy later (when the numbers make sen...Sell. Rent. Buy later (when the numbers make sense).<br /><br />No decision in this scenario is 'free', all involve costs (some are better known as opportunity costs), some involve lower costs than others. Further nothing in this scenario is risk free.<br /><br />If they sell now and put the money in the bank, that money earns interest ($275,000 after commissions, etc. @ 3% = $687.50 per month). That amount should be deducted from the amount you would pay in rent, as its money you get by selling and earning interest on the money. Conversely, if they stay put, it's part of the cost of owning and should be added to their monthly costs. They also pay property taxes (est. $100 per month) and condo fees (est. $200 per month). Therefore the 'rent' associated with this 'paid for' home is probably $987.50 per month...assuming no price depreciation.<br /><br />If the condo market corrects by 25% you can add to that an additional $75,000 in cost. That's a heck of a lot of 'rent' to pay for staying put and instead of having $275,000 to put towards the next place, they'd likely only have $200,000.<br /><br />Renting has certainty associated with it. The costs of renting over the next year are certain, as are the benefits. What is uncertain is what the market will do in the interim with respect to interest rates and prices. What is also certain is that his present place is too small. So he can either buy in to the market even more at an even greater risk in the event of a correction, or he can rent.<br /><br />At the end of the day though he needs to make up his mind about what is best for him. If I were in the same shoes, I'd sell, find a place I could like to rent for a while (do the math on the rental versus ownership costs in terms of 'opportunity costs' and other ownership costs - ie. property taxes, opportunity costs on downpayment, maintenance) and be happy.Just Janicehttps://www.blogger.com/profile/06002680972898096266noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-75530999634821380122010-03-15T12:55:26.154-07:002010-03-15T12:55:26.154-07:00Thanks for the graphs Double-Agent, you and I cert...Thanks for the graphs Double-Agent, you and I certainly see things the same way ;)thinkhttps://www.blogger.com/profile/04527051722420253429noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-27194341444592320252010-03-15T12:37:09.283-07:002010-03-15T12:37:09.283-07:00I don't think there is anything wrong with giv...I don't think there is anything wrong with giving someone your opinion or advice. I think it is better for people to read different points of view and then weigh the issues and make their own informed choice.<br /><br />The only bad advice that I have ever had in my life is no advice. Maybe its different today, in this age of zero accountability where people need to blame someone else for their own failings. When following the pack is safer and more important, than making your own path.<br /><br />Right or wrong I made my own path and sure I made big mistakes, but these are my mistakes and I own them.Johnny-Dollarhttps://www.blogger.com/profile/12950799399842707067noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-60848404070704819132010-03-15T11:19:35.182-07:002010-03-15T11:19:35.182-07:00I would never give advice to someone to temporaril...I would never give advice to someone to temporarily rent if their primary objective is to speculate on future lower prices. If their lifestyle allows that renting, say, a house or townhouse is equivalent to owning a condo, I would sell now. If renting is considered inferior for whatever reason I would stay put and buy a larger place when prices are lower (ensuring they are actually saving for a larger down payment in lieu of a mortgage).jessehttps://www.blogger.com/profile/02155122147972263497noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-20868827714098467812010-03-15T10:36:35.846-07:002010-03-15T10:36:35.846-07:00I dusted off the bike this weekend and took a tour...I dusted off the bike this weekend and took a tour through the Garden City and saw a lot of RE signs too. A lot of them were in Oak Bay which were up for sale the last time I went biking. Which was a couple months and several pounds ago.Johnny-Dollarhttps://www.blogger.com/profile/12950799399842707067noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-32789665127630090762010-03-15T10:17:03.894-07:002010-03-15T10:17:03.894-07:00I know it's only anecdotal evidence but drivin...I know it's only anecdotal evidence but driving around town this weekend with my wife we noticed a marked increase in for sale signs which seems to confirm the listings numbers from Think.HachiRokuhttps://www.blogger.com/profile/16603139186149420323noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-40662986788806691412010-03-15T09:50:24.809-07:002010-03-15T09:50:24.809-07:00I think this is more about risk and missed opportu...I think this is more about risk and missed opportunities. If they don't have any RRSP's, then the tax rebates are going to be significant. How about a RESP for the little one.<br /><br />$250,000 in cash can provide a lot of financial security for the years to come. Real estate should be in their portfolio, but if they loaded up their RRSP's and the market corrected, they could give themselves a self directed mortgage on their next home.<br /><br />So, you would have to play a worse case scenario if you sold and rented assuming that real estate continued to increase forever.<br /><br />They would be fully loaded up in their RRSP's<br />They would be fully loaded up in their TFSA's<br />They child would have an RESP plan<br /><br />And they would be renting until, they had maxed out enough in their RRSP's to give themselves a mortgage.<br /><br />It would be pretty cool to have all of this done by your mid 30's with another 35 years of compounding interest to go. Having the money working for you. It would be like adding another income to your family.<br /><br />My way of thinking, is that this is an opportunity that has never existed before. To sell an asset that will develop a future income stream and security. <br /><br />But, the asset isn't gone. A home can be bought at any time with 5 percent down. In the event that we have a US style meltdown that opportunity to develop a future income stream may never be present again.Johnny-Dollarhttps://www.blogger.com/profile/12950799399842707067noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-26144863411763356992010-03-15T09:15:24.903-07:002010-03-15T09:15:24.903-07:00Well, the trend continues, enjoy the numbers...
s...Well, the trend continues, enjoy the numbers...<br /><br />sales 146<br />new listings 371<br />total listings 3453<br /><br />sell/list ratio 39%<br /><br />Interesting to note that sales to date for March are 308 - if this trend continues we will have less sales than in Feb. Also note that total listings is growing steadily. Overall, sales continue to be at best "typical" and maybe even showing signs of weakening and the new listings just keep piling on. A sell/list ratio of 39% is solid bear. Enjoy and lets hope it keeps going :) This market correction is so overdue, glad it is here now!thinkhttps://www.blogger.com/profile/04527051722420253429noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-36380546220721933172010-03-15T09:02:32.860-07:002010-03-15T09:02:32.860-07:00Surprising how quickly BC, AB, SK sales/list ratio...Surprising how quickly BC, AB, SK sales/list ratios are shifting (..i don’t follow Eastern).<br /><br />http://agentwill.com/weekly-stats/ <br /><br />Looks like we’re fairly synchronized with US, UK`s double-dip this time..<br /><br />http://www.telegraph.co.uk/finance/economics/houseprices/7442568/House-prices-on-verge-of-double-dip.htmlbullbearhttps://www.blogger.com/profile/02993875002639976519noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-70318734413566655032010-03-15T09:01:28.534-07:002010-03-15T09:01:28.534-07:00This comment has been removed by the author.bullbearhttps://www.blogger.com/profile/02993875002639976519noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-81794889088489019712010-03-15T08:26:31.349-07:002010-03-15T08:26:31.349-07:00I'd move up to a forever house no question abo...I'd move up to a forever house no question about it. You could probably make it happen and end up with a mortgage of about 250k which at today's rates is way less than rent even on a 15 year amortization. Yeah sure the market might tank later but who really cares if you plan on staying in your home for the long term anyway?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-39488832623995668902010-03-15T08:10:02.065-07:002010-03-15T08:10:02.065-07:00Just Jack,
Moving will cost them, staying put is ...Just Jack,<br /><br />Moving will cost them, staying put is the cheapest option. They can diversify quicker by not moving, either renting or buying.<br /><br />I completely agree about seeking professional financial planning advice.HouseHuntVictoriahttps://www.blogger.com/profile/07456914359088891317noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-71289013542745368542010-03-15T07:34:17.374-07:002010-03-15T07:34:17.374-07:00You have to know more about the people. What leve...You have to know more about the people. What level of risk they are willing to take. Are they risk takers or risk adverse. Are they willing to rent a town home and see prices continue to increase? How old are they? Are they financially secure?. Is there only asset real estate?<br /><br />But in a nutshell. If your young and your only asset is real estate, even if the real estate market continues to increase, it would be better to get out of real estate, rent and improve your financial portfolio, RRSP and TFSA's. The affect of compounding, when started at an early age, is one of the biggest steps step to being financially secure. You can't get your youth back. You can at any time buy real estate.<br /><br />A bird in the hand is worth two in the bush.<br />Better to have $250,000 in cash than $250,000 in home equity.<br /><br />The bigger they are - the harder they fall.<br />The higher the market goes - the bigger the fall will be.<br /><br /><br /><br />There better off talking with several financial planners that have different points of view, and then making their choice.Johnny-Dollarhttps://www.blogger.com/profile/12950799399842707067noreply@blogger.com