Housing Bust 2011

Leveraging, renting vs owning, making an investment or buying a home?
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kcowan
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Re: Housing Bust 2011

Post by kcowan »

patriot1 wrote:Owner-occupiers also get a break on imputed income and capital gains...
They also get lots of seniors benefits that they would lose if they invested the capital and rented due to clawbacks. GIS, drugs, property taxes.
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Re: Housing Bust 2011

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If I remember rightly they had a pretty good return in the early 80’s.
"It's a whole different world from 1981-82, when CSBs offered a whopping 19.5 per cent in the first year and 10.5 per cent for the remaining six years."
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Re: Housing Bust 2011

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BRIAN5000 wrote:
If I remember rightly they had a pretty good return in the early 80’s.
"It's a whole different world from 1981-82, when CSBs offered a whopping 19.5 per cent in the first year and 10.5 per cent for the remaining six years."
19.5%... That's almost unimaginable to me. I know I shouldn't think like this but in my mind interest rates and interest will always be single digit.
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Re: Housing Bust 2011

Post by Rickson9 »

Anchoring and adjustment heuristic.

Just like those in the 80's that felt that rates would always be double digit.
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Re: Housing Bust 2011

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bowtie wrote: 19.5%... That's almost unimaginable to me. I know I shouldn't think like this but in my mind interest rates and interest will always be single digit.
Interest rates would have to remain in the low single digits for current Canadian RE prices to be anywhere near sustainable. Even 6% would clobber them.

And do note that the US has rates as low as ours and that was not good enough to support prices. And they can lock in the low rates for the whole life of the mortgage unlike us.
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Re: Housing Bust 2011

Post by Bylo Selhi »

bowtie wrote:
"It's a whole different world from 1981-82, when CSBs offered a whopping 19.5 per cent in the first year and 10.5 per cent for the remaining six years."
19.5%... That's almost unimaginable to me. I know I shouldn't think like this but in my mind interest rates and interest will always be single digit.
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Re: Housing Bust 2011

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I was reading last week, that Vancouver house prices, on a yearly bases, are up 24.5%, which puts 19.5% to shame. Better than a CSB, since it's also tax-free. I think that they're up to about $728,000 average, with Toronto's median price at about $428k, it has a long way to go yet, to catch up.
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Re: Housing Bust 2011

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This Lake is no longer valued at a per foot price, it is now valued at a per inch price of $1000.00 per inch of lakefront!
Chelan Lake

Lake Chelan is a narrow, 56-mile-long lake in Chelan County, northern Washington State, USA

http://www.lfr123.com/lakestats/
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Re: Housing Bust 2011

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$6,336,000,000 for the entire lakeshore. That would sure pare down the deficit if the lake was expropriated and sold to the public.
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Re: Housing Bust 2011

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The total property assessment for King County, Washington (which includes Seattle and Lake Washington) is $330,414,998,614.

Methinks there is a bit of hype going on here.
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Re: Housing Bust 2011

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BRIAN5000 wrote:Lake Chelan is a narrow, 56-mile-long lake in Chelan County, northern Washington State, USA
http://www.lfr123.com/lakestats/
Pretty lake to look at but don't swim in it or waterski on it. It is freezing cold all year long because it is deep and has no shelves for warming!
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Re: Housing Bust 2011

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This analyst and his co. sees a decline in the next three years of 25% in the Canadian housing market even if interest rates stay the same.

How bad could it get in the housing market?
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Re: Housing Bust 2011

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CROCKD wrote:This analyst and his co. sees a decline in the next three years of 25% in the Canadian housing market even if interest rates stay the same.

How bad could it get in the housing market?
they been saying that for 10 yrs. meanwhile, prices doubled in that time. if you listened to these guys, everybody should sell their house and move into a hotel and wait 3 yrs to buy their house back.
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Re: Housing Bust 2011

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Contrarian wrote: they been saying that for 10 yrs.
No they haven't. Nor did their counterparts in the US - only for a couple of years before prices peaked.
meanwhile, prices doubled in that time.
And what happened in the US after prices doubled with hardly any increase in personal incomes?
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Re: Housing Bust 2011

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patriot1 wrote:
Contrarian wrote: they been saying that for 10 yrs.
No they haven't. Nor did their counterparts in the US - only for a couple of years before prices peaked.
meanwhile, prices doubled in that time.
And what happened in the US after prices doubled with hardly any increase in personal incomes?
I'm buying a house in vancouver area so I hope it crashes before sept. The US crashed because of their banking system.

there are 2 million people in bc and 2000 million in china wanting in so i doubt our real estate prices will ever go down.
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Re: Housing Bust 2011

Post by patriot1 »

Contrarian wrote: The US crashed because of their banking system.
Actually prices crashed in only parts of the US. For example, there was no crash in Texas and much of the Midwest and South.

How come?
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Re: Housing Bust 2011

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Contrarian wrote:...so i doubt our real estate prices will ever go down.
Well your name is Contrarian! So I guess that fits... :rofl:
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Re: Housing Bust 2011

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Lawrence Solomon: Deregulate housing
The National Post, Jun 24, 2011

"The most important way to deleverage housing is a privatization or dismantling of the Canada Mortgage and Housing Corporation, the juggernaut created in the 1940s to provide housing for servicemen returning home after the Second World War. CMHC has morphed into a gargantuan agency that primarily serves to inflate the housing sector through various programs subsidized through government guarantees. Wind down the CMHC — the private sector is fully capable of performing its functions without subsidy, and without inviting taxpayer risk — and the federal government will be eliminating half a trillion dollars in housing liabilities, the type of risks for Canada that Fanny Mae and Freddie Mac visited on the United States in its catastrophic housing collapse of 2008."

http://opinion.financialpost.com/2011/0 ... e-housing/
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Re: Housing Bust 2011

Post by adrian2 »

randomwalker wrote:Lawrence Solomon: Deregulate housing
Good luck with that - no major political party will touch this third rail, just as nobody in the US will touch the much mis-understood mortgage interest deductibility, who's benefiting mostly the rich, but sounds populist on paper.
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Re: Housing Bust 2011

Post by steves »

I just scanned the real estate weekly for West Vancouver.... roughly 800 listings. Of those 800 listings only 44 were under $1M, and most of those were condos. All the remaining houses and condos were listed well over $1M, and I believe the highest price was $30M. Oh, and no where were the words 'reduced' or 'new price' to be found. Wacky!
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Re: Housing Bust 2011

Post by patriot1 »

Between 2008 and 2010, the average selling price on Salt Spring dropped to $508,000 from $635,000. In May, there were more than 400 listings on an island where, on average, only 15 residences are sold a month. Ozzie Jurock, a prominent Vancouver real estate consultant, recently surveyed the moribund B.C. recreational market on his blog, citing area after area where prices had dropped as much as 50% from the 2007–2008 peak, yet sale activity still lagged...

Scott Simmons is seeing the flip side of the phenomenon that keeps Jurock busy guiding Canadians around American vacation spots. He believes about 20% of the listings rapidly accumulating on the island arise from Americans who bought a decade ago when prices in Canada were much lower and the loonie was worth 65¢ in U.S. dollar terms. Now, they want to sell here and buy closer to home in Washington state.
http://www.canadianbusiness.com/article ... tern-slump

Things are even worse in the BC Interior.
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Re: Housing Bust 2011

Post by AltaRed »

patriot1 wrote:Things are even worse in the BC Interior.
I read that article as well. I am looking for multi-year stats for the Kelowna area that I had previously found a year or so ago because I am somewhat seriously thinking about 'bottom feeding' on recreational property in West Kelowna. But I cannot find that multi-year graph (it had shown about a 40% drop from peak at that time). You seem to be able to find stuff that I cannot - do you have a link?
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Re: Housing Bust 2011

Post by patriot1 »

Well all the data can be found here:

http://www.omreb.com/page.php?sectionID=2

There are lots of graphs out there which mostly seem to be put together by RE agents. Note that in the Okanagan you only have average and median prices rather than a standardized price index.

I don't think anyone is claiming that the Kelowna market as a whole is 40% off peak but I think I have heard of some condos selling for 40% off the pre-sale price.
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Re: Housing Bust 2011

Post by FinEcon »

patriot1 wrote: I don't think anyone is claiming that the Kelowna market as a whole is 40% off peak but I think I have heard of some condos selling for 40% off the pre-sale price.
I can see it from my house, they still haven't sold the entire stock on that building. Sadly, it's a bit of a one off, the development you refer to suffered from severe functional obsolescence the day it was designed, i.e the developer gambled on a type building which the market has little use for. As an example, it has a rooftop cabana with a pool........3 feet deep, a yoga studio, a dog-wash, etc, etc. That and it was the victim of a firebug during the concrete structure phase.

Almost forgot, there's a new building right next door which is low rise but a superior substitute in every way on a unit to unit comparison.
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Re: Housing Bust 2011

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Chinese property risks fuel concerns
Just two months ago, China expert Nicholas Lardy dismissed concerns about what he labelled a "so-called property bubble" during a conference at the Peterson Institute for International Economics in Washington.

Now, he says a housing downturn could produce a "major, major economic correction" in China, a view shared by other mainstream economists.

What changed? A growing realisation that much of China's massive stimulus spending and lending in 2009 and 2010 ended up in land purchases, driving up prices in an unsustainable fashion. And a recognition that the Chinese economic system routinely produces bubbles and is unlikely to change any time soon.
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