Would You Do It?

[donald]

I should add(if your interested)during the same time i was selling was the same time i dumped my rbc mutal fund salesman(went self direct with the rsp,tfsa)believe it or not i have actually made some decent gains during the last year(over 8k on aapl,2k on pm,some soild gains on bce,cnr,enb,t and just recently toll brothers*us builder*(i bought 100 shs @ 23 just in the springs)I hold a few decent loses thou-esp on my cat holding and td(bought @ a bad time)but im up overall 8k on over 200k in stock/rsp inc-so i guess about 4% but i got the stream going/happening on my large cap divs.Plus i find the stock market fascinating(i can read all night on companies,look through the globe/new york times/forbes/even twitter on the pros look through links ect ect-I got the bug!No sure if im a sucker and a idiot lol.....i will know as my investment life unfolds.(im conservative though,no pennies,only 1 or 2 small caps,and what i believe a soild asset allocation with correct weighting ect)

I still have some money for a flip/build in the future(the downpayment for a construction loan or for a flip/fix.

[dogcom]

Good thinking and looking ahead donald.

In the end however with your skill, know how and people you can probably call on, you can make a killing buying, living in, renovating at leisure and selling houses.

We certainly need a correction in Vancouver and Toronto but once that settles down there is huge potential for money making for someone like you. Looking down south those flippers seem to be doing well buying very cheap homes in good areas. I think today we are seeing better flip shows because they can't really on always rising markets to buy and sell in.

[gtprince]

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 .

I'm not sure if you realize it or not, but he's just trying to contribute and I believe amongst others that no-one really appreciates your putdowns.

[Berubeland]

The problem right now with this market is that it's so overheated that it doesn't seem to matter if the place is a dump, people figure the house could sell for $300K the renos will cost 20K and it gets listed for $290K.

In the past it was not unusual for people in the trades to buy properties and maintain them and rent them out as a retirement income, figuring they would piddle around and have a few places.

There are some contractors who renovate homes but basically just employ themselves and a few workers. They've done alright but they get killed when the market goes down.

[Chad]

I'm not sure if you realize it or not, but he's just trying to contribute and I believe amongst others that no-one really appreciates your putdowns.

I calls it the ways I sees it gtprince. Seriously anyone who claims that they don't see any reason for a real estate crash and states there is no speculation in todays real estate market either:

1. Has the same intellectual capacity of a turnip or,
2. Has a vested interest in keeping the current real estate bubble going. Hmm who could that be?

If anyone has felt offended by the above comment or any others for that matter, please call
1-800-EAT-SH!T to file a formal complaint.

[dogcom]

Reading Chad's comments I would say they are fine other then the name calling which we could do without. The one I agree the most with is higher interest rates. Buying after high interest rates has kicked everyone on the edge to the curb is the usually the best time to buy a house and yes at lower principle which is far better then lower rates.

[dogcom]

There isn't going to be any crash. I thought there was too, back in 2008 when the US hit the skids, I thought our market would follow suit. So I sold some nice rental houses. Wish I could buy them back now for what I sold them for, or even $50,000 more. The market dipped all right, for about 2 months, to the tune of 10% or so, then bounced right back.

I don't see any reason for a real estate crash. In fact we are in an inflationary period right now. I know no one is talking about it in the media, but if you keep tabs on what you are paying for groceries, insurance, heating oil etc. you know it is a much bigger factor than most people believe. An inflation rate of just 5% causes prices to double in 12 years.


The last real crash we had was in 1990. That was following 8 years of wild speculation when prices double and redoubled in a few years. Interest rates were higher, rental properties were selling with bad, bad negative cash flow, everyone was talking about real estate, and jumping into speculations even though they had no idea what they were doing. New real estate offices, and new agents, all over the place.

None of those things apply today. Prices have been rising slowly and steadily. Interest rates are low. Inflation is rising. Nobody is speculating, or talking about or encouraging speculation.

To me this is a better time to buy than to sell, especially if you can lock in a long term mortgage at today's cheap rates and enjoy a monthly payment that is cheaper than rent.

Reading over Rusty O'Toole's comments I would say they give us a good difference of opinion or argument which is much needed on the forum whether we agree or not. While I don't agree that this is a better time to buy I do think speculation is lower and Canadians are being conditioned not to expect price increases to bail them out and are thus not willing to pay just about any amount to get in. Inflation is higher in certain areas and could get out of hand if central banks decide to fight deflation to the point their money printing sends the velocity of money out of control. I would also not be over confident that prices can't rise as Garth Turner knows all to well.

[Berubeland]

I calls it the ways I sees it gtprince. Seriously anyone who claims that they don't see any reason for a real estate crash and states there is no speculation in todays real estate market either:

1. Has the same intellectual capacity of a turnip or,
2. Has a vested interest in keeping the current real estate bubble going. Hmm who could that be?

If anyone has felt offended by the above comment or any others for that matter, please call
1-800-EAT-SH!T to file a formal complaint.

Dialing 1-800-EAT SHIT.

You have reached a forum where ad hominem attacks will get you banned. Frankly I agree with your position and I will state this. This is not a space where you let your inner monologue run wild. You don't get to make fun of people's names or use them in derogatory fashion. You don't get to insult their intellectual capacity.

This is because even when people have wildly differing and opposing viewpoints they may introduce you to an idea that makes sense to you and causes you to reverse your position. I personally would like to have my bearish stance on real estate changed. The idea that inflation is going to moderate the real estate market is a welcome one and not stupid.

I have been wrong about many things and events in my life but there are two things I have really appreciated, people who do not rub it in my face when I have been proven wrong and people allow me the dignity of having my own opinions until the dust has settled.

Despite the bearish bent on this forum, all the bears have been wrong me included for 20 years with a few minor blips. In any case regardless is I am wrong or right, I quite enjoy that this forum is, with a few minor exceptions, a safe place to be and discuss issues. And in that we all win, because if we continue to be wrong...Rusty isn't allowed to call us losers or turnips six months from now when the entire "crash thing" blows over just like it did in 2008 (Not that I think it will...this time)

[sags]

See..........that's the thing about real estate, as Garth Turner has repeated endlessly.

It evokes very emotional responses from people.

Lean over the backyard fence, and tell your neighbor that your home is worth more than theirs, because you have (nicer fence, wider driveway, ceramic tile.......whatever) and watch the response. It is like you told them their baby is the ugliest one you ever saw.

It is these emotional ties to home ownership that fuels a market where normally rational people will line up outside an office and spend 600,000 in 10 minutes, without much discussion about the actual home.

It is these emotional ties that apply pressure on young couples to buy that first home.......and become "established" lest they remain..............dare I say it...........lifetime renters...........(something akin to hobos and gypsies)

Oh my goodness..........what are they like.........those renters? Is it true they smell funny and can't read?

Emotions.......when people know they "should" sell because they are way over their financial heads......but won't because they just "love their home".

I know..........I have the disease too.

We owned many homes over the years.........rent now. It doesn't make financial sense for us to own. It doesn't make sense for us to own because we can't maintain the property as we used to. But...........I still feel less worthy.

The lenders, realtors, Sunday papers.............have really done a number on us.

We should sue.

Bottom line..........as I see it.

If you can afford to buy....really afford to buy, and you want to buy..........why care where the future price is going?

Buy a home you love and stay in for a long time..........and avoid divorce.

Good luck............and peace everyone.