Housing Bust 2012

Leveraging, renting vs owning, making an investment or buying a home?
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Shakespeare
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Re: Housing Bust 2012

Post by Shakespeare »

Another excellent G&M article:

Ottawa’s $800-billion housing problem - The Globe and Mail
“You can never really provide cheap housing,” argues Moin Yahya, associate professor of law at the University of Alberta. “All you can really do is provide cheap cash, which of course then drives up the price of housing. You’re only distorting the market.”....

“What’s immediately at risk in the event of a significant downturn is the capital of CMHC, which is about $12-billion, so once they blow through that, then they start turning to the public purse,” says Finn Poschmann, vice-president of research at the C.D. Howe Institute.

“To blow through that, you need unemployment that stays high for a little while and a significant increase in the number of mortgage defaults. That’s not farfetched – it has happened before....


Ottawa is already in too deep.

“The system as a whole is too big to fail,” [David Dodge] says.

“And when something is too big to fail, the government will come in.”
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Re: Housing Bust 2012

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kcowan
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Re: Housing Bust 2012

Post by kcowan »

I believe the event was posted but not the detail, including the resulting increase in net book value for Genworth!
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kcowan
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Re: Housing Bust 2012

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http://www.ritholtz.com/blog/wp-content ... 183607.jpg

US Prices continue to stabilize at their trough values.
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Re: Housing Bust 2012

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An opinion with which I largely disagree, but here it is anyway


CANADA’S HOUSING HANGOVER
CMHC must stay in government hands
GRANT BISHOP, Special to The Globe and Mail
Published Friday, Dec. 28 2012

http://www.theglobeandmail.com/report-o ... le6790504/
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big easy
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Re: Housing Bust 2012

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http://www.theglobeandmail.com/globe-in ... le6738812/

Interest rates will remain low, so don't worry - be happy.
We should all be expecting a 25% raise in 2013 to "normalise" the price-income ratio.
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Re: Housing Bust 2012

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big easy wrote:http://www.theglobeandmail.com/globe-in ... le6738812/

Interest rates will remain low, so don't worry - be happy.
We should all be expecting a 25% raise in 2013 to "normalise" the price-income ratio.
All good prognosticators will make a prediction of either price or time period but not both. In this case Mr MacDonald suggests that today's house prices will be justified by rising incomes though he fails to mention how long it will take for incomes to rise to the appropriate level, surely he doesn't see it happening in 2013 alone. Does Mr MacDonald see house prices moving sideways for an extended period of time or simply rising slower than incomes. Either way you do the math to figure how long it will take for incomes to rise so as to justify the current values of residential real-estate. Around the world reversion to the mean has taken the form of falling house prices not rising income. Perhaps in Canada "this time it's different."
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Re: Housing Bust 2012

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randomwalker wrote:An opinion with which I largely disagree, but here it is anyway


CANADA’S HOUSING HANGOVER
CMHC must stay in government hands
GRANT BISHOP, Special to The Globe and Mail
Published Friday, Dec. 28 2012

http://www.theglobeandmail.com/report-o ... le6790504/
From that article: "private mortgage insurers ... could resist measures to curb risky behaviour". It is difficult for me to imagine private issuers doing worse than the CMHC in this regard.

Now onto the 2003 thread :-)
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Re: Housing Bust 2012

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Benchwarmer wrote:Now onto the 2003 thread :-)
Or as they say it, back to the future! :D
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