As far as deflation goes... there WAS a danger of deflation in 2008 due to the mortgage crisis, possible bank failures and real estate crash in the US. But the government stepped in with bailouts, low interest rates and free and easy monetary policy to prevent it.
The crisis is now over. The next thing to deal with is the inflationary effects of the above policies, which of course, are inflationary for real estate along with everything else.
Garth Turner is a fool. He doesn't even know how a mortgage works. I know, I have read some of his stuff. Don't go by what he says.
I agree with Rusty O'Toole.
There is no crash, no apparent signs of one, and very slim chances of one occuring.
The govt. is doing whatever it can to keep the RE market fully inflated and pumped up.
The recent changes are a magician's manœuvre of keeping everyone focused on the right hand, while the left hand is doing the real "magic".
At the slightest signs of a crash, they will do whatever it takes to re-inflate the bubble.
Love my (paid for) house, my neighbourhood and my neighbours! Just spent $20k on some projects around the house (new roof, etc.) and the place looks great. Love my pool and swimming with my kids every day. We have a very private yard that backs onto a nice deep ravine and nobody on my street sells (most are original owners from when they were built 10-12 years ago). I think the house is probably worth $800-850k or so but I wouldn't sell it even if someone offered me $900k.
Good neighbours are a huge part of it all. We have a lot of fun with the families around us, there are no evil rude neighbours and that is worth a lot more than a bag of cash to me.
Good neighbors are hard to find...I miss my one neighbor but am happy to be far away from the rest.
Were they [licensed] marijuana growers/smokers?Originally Posted by Eder
http://www.cbc.ca/news/canada/toront...th-canada.html
“Simplicity is the ultimate sophistication.”
What about the person living with mom, or renting, who landed their dream job, unionized, and ready to take the big step to buy a new house?
Would you recommend, they stay with mom for another long year, and take a risk, that the prices will go up or down?
It also depends which part of the country you're in...
Vancouver and Toronto condos could decrease
but in the prairies we aren't moving :P
All the fees associated with moving, I don't think it would be a smart move, unless you were planning a big change in your life, ie you have a 200k house, but looking to get a 500k house
sell the 200k rent for a couple years ++ then buy the 500k house at 400k(assuming bubble bursts)
As one person said, real estate is just a long long long stock market
People will always need roofs to be under
Everything eventually goes up, including wages :P
The position you speak of sheabutters has the luxury of not worrying about many of the decisions and costs Four Pillars pointed out so they can wait awhile and save more money. The only risk they take is prices rising and at this time I don't think they will go up a lot in Vancouver or Toronto so the risk of waiting seems to be the better risk right now.
Wow some people are in serious denial ie. Rusty O'Fool.
I would sell, heres why to name a few...
-Historically low interest rates will not stay historically low forever.
-Amortizations have been reduced to 25 years to qualify for CHMC insurance, this will affect first time home buyers the most.
-The bombardement of bubble talk in the media which was not present 1 to 2 years ago, is affecting sentiment/perception. Take this thread for example.
-I would rather have a higher interest rate than a higher principle.
-Demographics, lots of old people in this country looking to finance retirement with the equity in their houses.
There was a story on the National the other day saying in 2002 the average house price was in the $188000 range in Canada with household incomes averaging $75,000. Today average household incomes have risen to $83,250, 11% in 10 years. Meanwhile average price houses have risen to around $350,000 around 90% in the same time period. Interestingly Canadian household debt is at a all time high, see the connection? Inflationary yes, for incomes no. No bubble here no sir. Can't see any reason for a real estate crash.
Last edited by Chad; 2012-07-14 at 12:16 AM.
Huge corrections will not happen as long as our unemployment rate stays relatively constant. You start getting 10% or more unemployment, I predict some fireworks. As long as folks have jobs, they will keep spending; on houses included.
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