Bubble I think I know why

[dogcom]

Housing is way to expensive right now and that is mostly because interest rates are so low. I would far prefer buying when interest rates are high and ready to turn down rather then buy when they are at rock bottom. Also ask anyone in 1980 in Vancouver and Toronto in 1990 if house prices can drop because they certainly can.

Having said that people are right on the stock market being risky and owning a home is better, but wrong that real estate prices can't drop. Everyone can put out all the data they want that stocks are better historically and so on. But you ask any accountant over the last 60 years and they would be hard pressed to find very many people doing well in the stock market but could find tons of people doing well in real estate. Also buying stocks you have to deal with a large number of cheaters and scammers that real estate doesn't have to deal with on a large scale. You also have a ton of excellent companies over the decades that you could hold forever but for some reason they went under.

I have argued all this before but in the end stock returns just aren't a reality for most people and real estate returns are.

[canadianbanks]

Your bank shares do better but wouldn't real estate come out on top because of the greater leverage you can get.

Yes, but leverage works with the same speed against you on the way down .

[Berubeland]

Housing is way to expensive right now and that is mostly because interest rates are so low. I would far prefer buying when interest rates are high and ready to turn down rather then buy when they are at rock bottom. Also ask anyone in 1980 in Vancouver and Toronto in 1990 if house prices can drop because they certainly can.

Having said that people are right on the stock market being risky and owning a home is better, but wrong that real estate prices can't drop. Everyone can put out all the data they want that stocks are better historically and so on. But you ask any accountant over the last 60 years and they would be hard pressed to find very many people doing well in the stock market but could find tons of people doing well in real estate. Also buying stocks you have to deal with a large number of cheaters and scammers that real estate doesn't have to deal with on a large scale. You also have a ton of excellent companies over the decades that you could hold forever but for some reason they went under.

I have argued all this before but in the end stock returns just aren't a reality for most people and real estate returns are.

Dogcom you're just saying that because your million dollar bungalow hasn't crashed yet. When it's worth $500K or less we'll discuss your "rate of return" It's isn't worth a damn thing unless you sell it.

[marina628]

I hope this is appropriate for this thread but I wanted to ask how you guys think the next year will be for the USA Housing Market particularly Florida .Just want to make a comment as well :I own five rental homes in Canada in the Whitby /Oshawa/Bowmanville area where the million dollar bungalow sells for about $300,000 .

These homes are part of my retirement plan they consist of One bungalow with two rental units and 4 single family homes.I paid $160,000 -$245,000 for them and range from 2004-2007 in age.My most expensive mortgage is $127,000 on my rentals so personally for myself any bubble won't affect me as the rental income more than sustains our liability.I love real estate about the same as I love poker but with the situation in Europe , USA and Now Iran I find myself tightening my belt and do not plan to buy any new Real Estate for Investment purposes.

I bought my first home in 1991 for $160,000 which was listed for sale in 1990 for $240,000 and my first mortgage was 8.75% with first line trust.I know many CMF members have bought their first homes with double digit mortgages.My husband and i rented our basement and had a family member living with us paying us $400 a month ,we thought owing $100,000 was horrible and we both worked so hard to pay down that first mortgage.
I think today's buyers have been conditioned to look at the monthly payment not the big $500,000 mortgage and they count on appreciation to build equity to move on to the next house.
I do support people buying a home if they plan to live there long term and can still SAVE money while living in the home.The people who scare me are the ones who wipe out all savings to get into a house and then are living paycheck to paycheck just to cover the bills.There is no shame in renting and being a home owner does not instantly make you a successful person.

[v_tofu]

CMHC + low interest rates, 0% down = bubble

Ok, ppl keep saying this, but I could have swore they got rid of 0% down didn't they? as well as 40 yr amorts?

[v_tofu]

It is a physical entity that you buy, do stuff with then sell. Where as stocks and funds are some mystical virtual object.

These are the only physical entities that I invest in, but I'm the guy with the tin foil hat on this forum so take everything I say with a grain of salt + a little crazy.

[KaeJS]

^ They did.

It's 5% down and the max is usually 30 years.

[Berubeland]

^ They did.

It's 5% down and the max is usually 30 years.

They have cash back mortages so you need 0$ down

http://www.ratehub.ca/best-mortgage-...FRQUKgod5HO3UA

[dogcom]

Berubeland if you read what I said, I said home prices are to high today and I would rather buy when rates are higher and about to come down. When I first bought my home in 1991 after a correction had taken place I wasn't worried about the price falling because I wasn't going to sell for years. I have to admit though if I bought today with a big mortgage I would be very worried about prices falling even though I would still plan to live in it for years.

Still companies are full of untrustworthy people that you don't see trying to manipulate and screw with the numbers and so on. Sorry but the stock people always spout the numbers of the past but the reality is very few people ever realize those numbers in their portfolios. So those stupid people over the last decades are usually right and destroying the numbers of the stock types so who can blame them for thinking the way they do. They will get a wakeup call probably soon but the stock owners have already had numerous wake up calls.

[dogcom]

Here is a good one for you guys.

If the bank gave you a million dollar loan and said you had to invest it in the equivalent real estate detached freehold house where you live or in the stock market value today with one catch. The catch is you had to get a member of this forum at random and not the mods to invest it what would you do. And one more thing they couldn't buy drug houses or houses with big known problems or penny stocks and stocks with big known trouble like RIM.

For me even though I know the real estate market is to high I would still rather hold a property in Richmond where I live then take a chance on the stock picks.