# Priced out of the house sale market on retirement possibility



## Longtimeago (Aug 8, 2018)

Recently I was having a conversation with someone who plans to sell their city home when they retire in a few years. Their plan is to sell, move to a lower housing cost area and invest the capital that would be freed up, to produce some income. A common plan for many going into retirement. However, their concern is that by the time they do so, the percentage of home buyers who could afford to buy their house will be even smaller than it currently is. It's a different view of what increased property values can mean.

Currently, their house is worth around $1 mil plus. What percentage of all home buyers do you think could afford to buy it? It certainly is beyond the reach of the majority of buyers I would think. Here is an article which suggests a couple would need an income of $189k to afford to buy a million dollar house.
https://www.ratehub.ca/blog/can-i-afford-a-million-dollar-home/ What percentage of households have that much income, I don't know but I doubt it is a very large percentage.

So I can see where the concern is, when it comes time to sell, there will be a very small market of buyers to sell to and that percentage may decrease every year if prices continue to rise. Baby Boomers certainly aren't likely to want to buy it, they too are looking to cash in or just stay where they are. Millennials probably can't afford it and are also apparently eschewing the 'bigger is better' syndrome and opting for buying smaller homes. This particular house has a pool and that actually eliminates another segment of buyers who have concerns about child safety and legal liability that a pool brings with it. 

But it may be that the prospects are even worse than just having to sell into a small and shrinking market. As the following linked article suggests, the house price may decrease over the next few years.
https://www.cp24.com/news/toronto-h...pril-average-price-up-from-year-ago-1.4409441

According to that article, while overall housing sales are up and there are indications of continuing price increases, that is not true of detached homes! The price of detached homes actually fell 1.3% in April of this year in the GTA. 

So, what to do? Sell now, buy a condo in the city to live in till retirement perhaps? Condo prices continue to rise and it may be far easier to sell the condo when retiring. Meanwhile the capital freed up by selling the house could be invested now or the retirement property could be bought now with the difference and used as a cottage perhaps. I think there is food for thought for those here who are also planning to retire in the near (1-5 years) future perhaps.

Whadda ya think?


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## ian (Jun 18, 2016)

It depends what market you happen to live in and what the predictions are for that market.

We downsized and sold when the market for single homes was high in our area. When we returned from seven months of travel it became clear that the market was softening. So we rented a furnished apt (our belongings were in storage) for three months. At the end of that period it was clear to us that the market was tanking. Especially for condos. So we rented for four years. Renting was very much to our financial advantage during that period. Plus, we enjoyed renting very much. Such a change from ownership. The fridge in our rental condo was going south. Called the landlord and had a new one delivered the next day. Not to mention two assessments of $35K and $5K that the owner picked up during those four years.

My advice to anyone in an inflated market situation who is close to retirement and thinking of moving or downsizing is to sell, take the money. Rent or buy that condo-IF the conditions are right for you. 

I could never understand the resistance of some people to rent vs buy. Do what makes sense in your market and based on your financial situation.


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## OptsyEagle (Nov 29, 2009)

I would not rebuy a condo if I thought any housing market might be over-valued or if I did not plan to own it for many, many years. I would just rent.

Obviously there is probably as much chance that this person's house goes up in value as there is for it going down. No one knows. The fact that there are less buyers for each incremental rise in price is irrelevant. What is important is that there is enough buyers for each incremental rise in price. So far there have actually been more buyers then sellers as proven by the rising prices of houses. The main determining factor for housing prices, in my opinion, will be mortgage rates. As they go up one should expect house prices to go down or stabilize and vice versa, but again, this will be effected significantly by other supply and demand factors, as well.

Bottom line. If I were this person and I had enough money to do everything I needed for retirement, with current prices, I would sell now and rent until retirement. If I didn't, I would role the dice and hope for the same or higher prices later. Not much else one can do without a crystal ball. Some day someone will invent a product, like an options collar for real estate, where one can lock in today's price and be able to sell at some later date without carrying the price risk into that future date. Unfortuneately, that product is currently not available to my knowledge.


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## Longtimeago (Aug 8, 2018)

OptsyEagle said:


> I would not rebuy a condo if I thought any housing market might be over-valued or if I did not plan to own it for many, many years. I would just rent.
> 
> Obviously there is probably as much chance that this person's house goes up in value as there is for it going down. No one knows. The fact that there are less buyers for each incremental rise in price is irrelevant. What is important is that there is enough buyers for each incremental rise in price. So far there have actually been more buyers then sellers as proven by the rising prices of houses. The main determining factor for housing prices, in my opinion, will be mortgage rates. As they go up one should expect house prices to go down or stabilize and vice versa, but again, this will be effected significantly by other supply and demand factors, as well.
> 
> Bottom line. If I were this person and I had enough money to do everything I needed for retirement, with current prices, I would sell now and rent until retirement. If I didn't, I would role the dice and hope for the same or higher prices later. Not much else one can do without a crystal ball. Some day someone will invent a product, like an options collar for real estate, where one can lock in today's price and be able to sell at some later date without carrying the price risk into that future date. Unfortuneately, that product is currently not available to my knowledge.


If you checked the link I gave OptsyEagle you would see that detached house prices went down 1.3% while condos continued to climb by over 5% in price for April. So if making the decision today, it may well make sense to buy the condo rather than rent. Especially as they intend to continue to work for up to 6 years. The idea then is that the condo will be turned into an rental income stream when they move to the new house in the country permanently. In that case, even if condo prices went down, it wouldn't have any real impact. They could afford to 'sit on it', collect rent and wait for the market to rise once again. 

They have more than enough money to buy both a condo and a house in the country without difficulty. Actually, the purchase of both would most likely be for cash, no mortgage on either. 

I do think it is interesting though when everyone is talking about how property values are going through the roof, detached homes in the GTA are in fact going down in price according to that link. I don't think most people will realize that and it may matter to those in such a situation.


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## lonewolf :) (Sep 13, 2016)

Would sell then rent in a lower housing cost area before the end of August. Property taxes in the cities will raise further. Would buy when a house can be purchased for under 10,000 when 3 D printing of homes moves into the area.


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## sags (May 15, 2010)

My sister and brother in law own a large home that is paid off.

My sister worked at Walmart since the days they were called Woolco. They had a meeting and told her she had the choice of working nights stocking shelves or taking a buyout.

She took the buyout of 6 months pay and then nothing........no pension, no money, nothing.

Her husband is management with a self directed RRSP. He had built it up substantially over the years, lost half of it during the recession, and built it back up to where it was.

He will have a few hundred thousand dollars in RRSP money..........no pension, no other money.

They planned to sell their home and buy a modern smaller place, but it will cost more than they will get for their older home. Their home will sell for about $270,000.

So basically, they have to rent and live off their money (maybe $500,000 total) until it runs out. I told my sister they will need to be careful with their spending.

We have been retired for 14 years and have spent over $1 million dollars over that time period, of which $700,000 was private DB pension money. (which they won't have)

They did everything right but are still likely to struggle financially. It is going to be a tough world for a lot of future retirees.


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## Eclectic12 (Oct 20, 2010)

sags said:


> ... My sister worked at Walmart since the days they were called Woolco ...


Perhaps you are confusing when that particular Woolco Canada store renamed/rebranded after Walmart bought Woolco Canada in '94?

The company Walmart was founded the same year as the company Woolco (iow - they were competitors) in '62. 
The US Woolco stores closed in '83.


Cheers


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## MrMatt (Dec 21, 2011)

Longtimeago said:


> However, their concern is that by the time they do so, the percentage of home buyers who could afford to buy their house will be even smaller than it currently is. It's a different view of what increased property values can mean.
> 
> Currently, their house is worth around $1 mil plus. What percentage of all home buyers do you think could afford to buy it? It certainly is beyond the reach of the majority of buyers I would think.
> 
> Whadda ya think?


You're not selling to the majority of buyers, you're selling to a slim band, and you only need 1 buyer.

Real estates on the "average" house price don't correct for the type of house.
Maybe a lot of big fancy houses sold, and now it's smaller more modest dwellings that happen to land in the same category.


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## ian (Jun 18, 2016)

Our experience in buying and in selling homes in large metropolitan areas is that averages are meaningless. Nor can one depend on real estate board stats that are designed to enhance the marketplace. It comes down to specific area, and to a specific price range of home or condo, etc. Averages can be easily skewed. The average for a large city may be very different from the average in a particular area and product of that city. Exactly the same for provincial and for national stats.


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## sags (May 15, 2010)

Eclectic12 said:


> Perhaps you are confusing when that particular Woolco Canada store renamed/rebranded after Walmart bought Woolco Canada in '94?
> 
> The company Walmart was founded the same year as the company Woolco (iow - they were competitors) in '62.
> The US Woolco stores closed in '83.
> ...


What causes you the confusion ?


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## Longtimeago (Aug 8, 2018)

MrMatt said:


> You're not selling to the majority of buyers, you're selling to a slim band, and you only need 1 buyer.
> 
> Real estates on the "average" house price don't correct for the type of house.
> Maybe a lot of big fancy houses sold, and now it's smaller more modest dwellings that happen to land in the same category.


I think the point should be clear to anyone giving it some thought MrMatt. Yes, you only need one buyer but as prices rise, there comes a 'tipping point' at which the number of potential buyers is less than the number of homes for sale in that price range. Everything has a tipping point and if prices continue to move upwards, reaching that point becomes more and more likely. When it happens, it's called a 'market correction' and the question is whether detached homes valued at $1 mil plus may be reaching or have reached that point.

It's fine to say that you only need one buyer but that doesn't mean there will be one buyer at the price you expected to get for your house. The point of the thread is that those who are planning to sell in the next few years and retire, should be considering WHEN to sell separately from WHEN they plan to retire.


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## Longtimeago (Aug 8, 2018)

ian said:


> Our experience in buying and in selling homes in large metropolitan areas is that averages are meaningless. Nor can one depend on real estate board stats that are designed to enhance the marketplace. It comes down to specific area, and to a specific price range of home or condo, etc. Averages can be easily skewed. The average for a large city may be very different from the average in a particular area and product of that city. Exactly the same for provincial and for national stats.


Ian, the issue is about those planning to retire soon with houses valued at over $1 mil and what they should be considering in terms of when to sell. It is indeed about how the market is trending and averages do give you an indication of that. Yes, it also depends on a specific property and it is for those in those specific properties that this thread is intended to suggest giving what they plan to do some specific thought about their specific house.

For example, the last house I owned in Toronto was bought for $450k in 1989. That is exactly 30 years ago. There are many Boomers coming up to retirement who are in a similar situation but unlike me, still live in that same home. Those homes in that area today are valued at over $2 mil. Here are two similar in size for sale in the same area.
https://www.realtor.ca/real-estate/...lingbrook-woods-toronto-birchcliffe-cliffside
https://www.realtor.ca/real-estate/...ingbrook-woods-toronto-birchcliffe-cliffside?

One has had little done to it in terms of renovations compared to the other and that is reflected in the price difference. Size wise and lot size are much the same. So if you owned either one today, what might you want to consider in regards as to when to sell given the current market conditions, if you intended to retire in the next few years? That's the situation the thread is addressing. Sell now/soon or wait till you retire to sell? 

The question raised is 'what if you end up priced out of the market' in regards to what you expected to get for the house when you sell after retiring? It will sell if you lower the price enough obviously but if you have to do that, it can put a serious dent in your financial plans in your retirement. So is the market for such houses 'correcting' or not? That's the question to consider right?

This thread is not aimed at those who own a more modestly valued house somewhere, it is aimed at a very specific value which has a very much more limited market to sell to. Forget the validity of averages etc. what should such an owner do in your opinion?


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## ian (Jun 18, 2016)

We unloaded our home.

But that certainly does not mean that this is the right course of action for everyone. It happened to be the right move for us. The financial advantage was not our main reason to cash out. People have different priorities and desires-financial and otherwise. I do not think that there is a one size fits all answer. We waited until we were retiring early. We made the move to sell when we did because of the market situation and our personal desires. We would have been fine with selling earlier or later if we felt the market was right in our area. Two offers, sold in a week and walked.

Some people are married to their homes for emotional reasons. I understand this. You cannot put a price on that. We did not have those feelings. When the sale went through we felt that a millstone had been lifted from our backs. We felt that we could now move forward with our lives and with our retirement plans. And we did.

My best guess is that the condo market and the single home market in suburban areas will be out of sync from time to time but perhaps not in the longer term. The market tends to correct itself.


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## MrMatt (Dec 21, 2011)

Longtimeago said:


> I think the point should be clear to anyone giving it some thought MrMatt. Yes, you only need one buyer but as prices rise, there comes a 'tipping point' at which the number of potential buyers is less than the number of homes for sale in that price range. Everything has a tipping point and if prices continue to move upwards, reaching that point becomes more and more likely. When it happens, it's called a 'market correction' and the question is whether detached homes valued at $1 mil plus may be reaching or have reached that point.
> 
> It's fine to say that you only need one buyer but that doesn't mean there will be one buyer at the price you expected to get for your house. The point of the thread is that those who are planning to sell in the next few years and retire, should be considering WHEN to sell separately from WHEN they plan to retire.


I agree, in my neighbourhood the "hot" houses are selling in a few days at 400-500.
Above that range they wait a long time, below that range they can take a week or two.

I think timing the market is a fools game, sell when it doesn't fit your plan.


As far as pricing, I think that if the neighbourhood is interesting because of a good location, it should stay strong, if it's just the newest subdivision it will cool off quicker.


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## lightcycle (Mar 24, 2012)

Longtimeago said:


> This thread is not aimed at those who own a more modestly valued house somewhere, it is aimed at a very specific value which has a very much more limited market to sell to. Forget the validity of averages etc. what should such an owner do in your opinion?


Is the answer not painfully clear?

If your market is limited because of the price... you lower the price. It's basic supply and demand. Obviously your friend still thinks it's 2018.


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## ian (Jun 18, 2016)

There is an easy solution. IF you are priced out of the market or cannot obtain the desired price for your home than do not sell or delay selling. Look at other options such as deferring you property tax if finances are an issue and this is an option where you live. Far better option than a home equity loan.


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## Plugging Along (Jan 3, 2011)

> This thread is not aimed at those who own a more modestly valued house somewhere, it is aimed at a very specific value which has a very much more limited market to sell to. Forget the validity of averages etc. what should such an owner do in your opinion?


Since I don't have a crystal ball to time the market, the considerations are really the following:

What is the impact of the sale of the home to retirement?

A. No, impact or the money isn't really need, or is a nice to have = Delay selling until there is a buyer that meets the asking price. If one doesn't need the money, then they have time on their side and can wait it out. If it doesn't sell, then there, it doesn't matter because it doesn't impact their retirement

B. Need the money to retire. = Sell while you can. Bird in hand is worth two in the bush. Or 'You don't know there from here' or whatever it is. 

This applies to a million dollar home or a $200k home. In terms of there are less buyers, that's is true, but as someone else, said you only need one. You can't find the one, then lower the price. If the thought of lowering the price doesn't appeal, go back to A and B see which one applies. 

The price doesn't matter. Million dollar homes are still selling in my city despite that fact we are in a recession. There is always someone with money to come and buy it, but it just depends on how long do you want to wait.


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## yyz (Aug 11, 2013)

lonewolf :) said:


> Would sell then rent in a lower housing cost area before the end of August. Property taxes in the cities will raise further. Would buy when a house can be purchased for under 10,000 when 3 D printing of homes moves into the area.


You are kidding (again) right?


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## Longtimeago (Aug 8, 2018)

Plugging Along said:


> Since I don't have a crystal ball to time the market, the considerations are really the following:
> 
> What is the impact of the sale of the home to retirement?
> 
> ...


It would be interesting to hear from someone here who is in the position of planning to retire in the next few years and does own a home valued at over $1 mil. How they view the point being raised here.

As for the person I know in this position, as I wrote, they are struggling with the issue and whether to sell now or later. It is not a question of 'having' to sell when they retire or being able to delay selling. They will have enough income to stay forever if they wish to. But they do not WANT to stay after they retire, they WANT to move to the country. At the same time, they WANT to gain the most they can from the sale. It is a purely financial question of which will give them the most financial benefit. Saying they can wait or they can lower the price does not meet either of those wants.

I don't see why it is so hard for some people to put themselves in THEIR shoes and see their dilemma. You don't have to need more money to want to have as much money as possible. Some might say, 'well that's a nice problem to have. I wish I had to decide between whether to retire with $1m in the bank or $1.2m.' I doubt anyone in that position however would be saying, 'I don't care which it is, $1.0m or $1.2m'.

Q: Do you want to retire with $1m in the bank or with $1.2m?
A: Oh, I'm indifferent.


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## cainvest (May 1, 2013)

Longtimeago said:


> They will have enough income to stay forever if they wish to. But they do not WANT to stay after they retire, they WANT to move to the country. At the same time, they WANT to gain the most they can from the sale. It is a purely financial question of which will give them the most financial benefit.


So they are trying to time the real estate market in their area ... good luck with that, could go either way.


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## Spudd (Oct 11, 2011)

I don't think anyone can predict what the real estate market will do. It is a complete crap shoot as to whether they will get more money from selling now or selling later.

Purely for convenience's sake, I would stay in the home until I wanted to move. Selling and having to move is a hassle that can be put off until they know their final destination.


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## Eclectic12 (Oct 20, 2010)

Longtimeago said:


> It would be interesting to hear from someone here who is in the position of planning to retire in the next few years and does own a home valued at over $1 mil. How they view the point being raised here ...


It would be.

Closest I can come is the person who complained to me that their Nortel stock was worth other $1 million but they didn't pay attention so when they did sell, the received about $2K for it.




Longtimeago said:


> ... But they do not WANT to stay after they retire, they WANT to move to the country. At the same time, they WANT to gain the most they can from the sale. It is a purely financial question of which will give them the most financial benefit. Saying they can wait or they can lower the price does not meet either of those wants.
> 
> I don't see why it is so hard for some people to put themselves in THEIR shoes and see their dilemma ...


They are in a similar position as someone with large unrealised capital gains. They aren't going to know for sure what was best without the benefit of hindsight.




Longtimeago said:


> ... You don't have to need more money to want to have as much money as possible.


And that's part of the problem - wanting more money for many people has resulted in having less money. Throw in that RE isn't as quick to sell as stock and there's likely more risk for this person.




Longtimeago said:


> ... I wish I had to decide between whether to retire with $1m in the bank or $1.2m.' I doubt anyone in that position however would be saying, 'I don't care which it is, $1.0m or $1.2m'.
> 
> Q: Do you want to retire with $1m in the bank or with $1.2m?
> A: Oh, I'm indifferent.


If I had an asset to sell that could be replaced more cheaply, I wouldn't care whether it was $800K, $1 m or $1.2m. 
Probably because I know so many people who refused to cash in when the asset was worth the upper end of what was in hindsight the scale and ended up doing so for half or less.


Since this person says they are concerned now - I'd remind them of that a bird in hand is worth two in the bush. Being free of worry is worth it IMO.


Cheers


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## ian (Jun 18, 2016)

I cashed out stock options when some others in the same situation did not I happily paid the the 18.5 effective tax rate on them in order to financially secure our early retirement. Others held because of the tax consequences. The stock kept going down while others were hoping that it would recover. It did not. Real estate, equities...all the same. Make a decision and cash out. Tomorrow the market could be in the toilet. 

I think that this depends on your temperment, your attitude towards risk, and what percentage of your resources are tied up in real estate or in any other indivisible asset. The latter is the real issue with real estate. You cannot average up or down. It is all in or all out.


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## sags (May 15, 2010)

I agree it is impossible to perfectly time real estate markets, but one can identify trends and statistics and make an educated judgement call.

I remember after the US housing crash and some said that nobody forecast it was coming. In fact there were people sounding the alarm but their warnings were ridiculed and ignored.

One of those people owned a blog called the Housing Collapse, which predicted the crash.

By many metrics the Canadian real estate market is a bubble that dwarfs the US bubble before the collapse.

It may continue or it may not, but I think the odds are high the bubble will more likely burst than not.


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## sags (May 15, 2010)

Some older people will never voluntarily sell their homes, regardless of the price.

My wife's cousin bought a home overlooking the ocean in West Vancouver in the 1960s. She probably paid what.......$30,000 for it.

Over the years the house rose in value. When would a person sell........at $100,000......$500,000.......$1,000,000.......$3,000,000 ?

Recently homes around her were selling for up to $6 million dollars. She doesn't care. She isn't selling.

In our city the city wants to widen a corner and the woman won't sell. The city offered to move her house across the street but she refused, so they expropriated her property.

In Atlantic City, one woman refused to sell to the new casinos.......so they built around her home.

In Woodstock, Ontario some people refused to sell their property that backed onto the proposed new Toyota factory. 

Toyota built their plant and now the people have trucks and trains rolling behind them all day and night.

There have been more than one story in the media of an elderly person living in abject poverty in a run down home that is worth more than $1,000,000.

Everybody has their own story, and many will be forced to sell to provide retirement income. For many it won't be an easy decision because there is more involved than just money.


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## ian (Jun 18, 2016)

Sometimes common sense is not so common. Emotion is one thing however numbers and common sense should hopefully prevail at some stage.


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## sags (May 15, 2010)

Emotion towards a home can be very strong.

I often go to look at my parents first home they bought new in 1951 at a cost of $6500. We were raised there and it looks beautiful and brand new still today.

And I drive over to my grandparents homes and take a look. It is always a warm, nostalgic feeling when I take those drives.


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## Retired Peasant (Apr 22, 2013)

Longtimeago said:


> I don't see why it is so hard for some people to put themselves in THEIR shoes and see their dilemma.


Gee I don't know; weren't you the one that insisted non-retirees couldn't possibly have thoughts on the joys of retirement?each:

I just couldn't resist.


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## Eclectic12 (Oct 20, 2010)

sags said:


> I agree it is impossible to perfectly time real estate markets, but one can identify trends and statistics and make an educated judgement call.
> 
> I remember after the US housing crash and some said that nobody forecast it was coming. In fact there were people sounding the alarm but their warnings were ridiculed and ignored ...


Sure ... though about a year before the "crash", I recall seeing a US cable show for selling houses. 

A brady bunch family had built their dream home (i.e. each spouse brought kids to the combined family) and were trying to sell their two pre-marriage homes. The RE expert gave them the bad news with the way the RE market in that area was dropping, they needed to cut something like $400K off the asking price for each house they were trying to sell. I have no idea how much earlier than when I saw it that it was filmed.


Even then - if buyer don't bite, educated guesses won't matter. 


Cheers


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## Longtimeago (Aug 8, 2018)

ian said:


> Sometimes common sense is not so common. Emotion is one thing however numbers and common sense should hopefully prevail at some stage.


The quote is, 'if common sense were in fact common, the term would not exist.' 

As for comments about being emotionally attached to a house etc. they are not relevant to this thread. It's a purely financial decision that is the question here.


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## Longtimeago (Aug 8, 2018)

Retired Peasant said:


> Gee I don't know; weren't you the one that insisted non-retirees couldn't possibly have thoughts on the joys of retirement?each:
> 
> I just couldn't resist.


Non-retirees by definition cannot know what the joys of retirement for them will be. They can have an opinion of what they MIGHT be but they cannot KNOW until they get there. While those who do not have a property valued at over $1 mil also cannot KNOW what they would do in the situation explained here. But you aren't being asked what you would do, only what your opinion is, which you can give when asked. That is not the same as a non-retiree answering a post on the joys of retirement, which asked for KNOWN joys, not opinions of potential or anticipated guesses as to future joys. 

There is a difference between a question that asks for opinions and a question that asks for factual or first hand experience.


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## ian (Jun 18, 2016)

I don't know about that. We traveled extensively prior to retirement but were constrained by work schedules. We were well aware that one of the major joys of retirement for us would be the ability to go when and where we wanted, the ability to travel for extended periods, the ability to travel spontaneously, and the ability to take advantage of attractive last minute travel offers. 

In retirement our expectations were met. We were very well aware of what those joys would be prior to retirement. Which is one of the reasons why we did early retirement. Our expectations were spot on.

We are not so arrogant as to think that our experiences, beliefs, and opinions are those or should be those of the majority and that those with different views are off base.


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## Plugging Along (Jan 3, 2011)

Longtimeago said:


> Non-retirees by definition cannot know what the joys of retirement for them will be. They can have an opinion of what they MIGHT be but they cannot KNOW until they get there. While those who do not have a property valued at over $1 mil also cannot KNOW what they would do in the situation explained here. But you aren't being asked what you would do, only what your opinion is, which you can give when asked. That is not the same as a non-retiree answering a post on the joys of retirement, which asked for KNOWN joys, not opinions of potential or anticipated guesses as to future joys.
> 
> There is a difference between a question that asks for opinions and a question that asks for factual or first hand experience.


Why is it that some people have so many problems understanding that they should not try and ask people not to post on an online forum unless they are the owner or moderator? The results will not garner any the posts one desires.


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## Plugging Along (Jan 3, 2011)

Longtimeago said:


> The quote is, 'if common sense were in fact common, the term would not exist.'
> 
> As for comments about being emotionally attached to a house etc. they are not relevant to this thread. It's a purely financial decision that is the question here.


But Ian did not use quotations. 

The purely financial decision is there is no crystal ball. The responses will differ for a million dollar home in different real estate markets even in sub markets. There can be no answer based on your purely financial question which already has been said. There is nothing relevant any more, therefore everything is relevant. This leads being to post other considerations when selling house in retirement or a million dollar house.


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## humble_pie (Jun 7, 2009)

Longtimeago said:


> Non-retirees by definition cannot know what the joys of retirement for them will be. They can have an opinion of what they MIGHT be but they cannot KNOW until they get there. While those who do not have a property valued at over $1 mil also cannot KNOW what they would do in the situation explained here.
> 
> But you aren't being asked what you would do, only what your opinion is, which you can give when asked. That is not the same as a non-retiree answering a post on the joys of retirement, which asked for KNOWN joys, not opinions of potential or anticipated guesses as to future joys.
> 
> There is a difference between a question that asks for opinions and a question that asks for factual or first hand experience.





Longtimeago said:


> As for comments about being emotionally attached to a house etc. they are not relevant to this thread.




gosh
i just spotted these
the thought police are more advanced than i'd realized
each:


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## doctrine (Sep 30, 2011)

Your 189k income estimate for a 1 million dollar house is reasonable, if the buyer does not have a large downpayment. Generally speaking, there are a lot less buyers especially above $600k or so, which is typically the maximum that someone with a slightly above average income ($80-90k) would be allowed to borrow under the new stress test rules. Houses and condos below $600k are selling a lot better. But it doesn't mean those bigger ones won't sell, but you may not have an immediate bidding war on your hands.


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## oldmanrockband (Dec 27, 2016)

There's no such thing as 'the percentage of home buyers who could afford to buy their house will be even smaller than it currently is' Their home is worth what someone will pay for it. That's how free markets work. If nobody will pay the price they ask, the home is overvalued, in an undesirable neighbourhood, or they're not prepared to wait long enough to sell.


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## james4beach (Nov 15, 2012)

oldmanrockband said:


> Their home is worth what someone will pay for it. That's how free markets work. If nobody will pay the price they ask, the home is overvalued, in an undesirable neighbourhood, or they're not prepared to wait long enough to sell.


It's not a free market when the central bank and government print money (low interest rates and CMHC) deliberately to boost home values. That's artificial stimulus which causes a major distortion in the housing market.

So this isn't a free market in housing. In a free market, banks, businesses and investors would determine the cost of money (interest rate) between themselves and there wouldn't be artificial stimulus via CMHC. Nor a Bank of Canada pumping effectively free money at rock bottom interest rates into the banking system. In a _free market_, loans would cost a lot more than they do today, and banks wouldn't be able to offload lending risk to CMHC.

There would be far fewer home buyers with higher interest rates, and home prices would be lower. A big reason homes are unaffordable for many of us younger Canadians is because of these distortions.


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## james4beach (Nov 15, 2012)

ian said:


> I don't know about that. We traveled extensively prior to retirement but were constrained by work schedules. We were well aware that one of the major joys of retirement for us would be the ability to go when and where we wanted, the ability to travel for extended periods, the ability to travel spontaneously, and the ability to take advantage of attractive last minute travel offers.
> 
> In retirement our expectations were met. We were very well aware of what those joys would be prior to retirement. Which is one of the reasons why we did early retirement. Our expectations were spot on.


I agree, that's a joy of retirement that can easily be seen. I share similar tastes to yours (love to travel) and work has always limited me as well.

I'm not retired, but am starting a sabbatical period and have already been able to realize that particular joy. Spontaneous travels and expeditions with no constraints of work demands. It's great!


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## Just a Guy (Mar 27, 2012)

James, it’s still a free market, in a fixed environment. People are free to pay whatever they want and can afford. If the government manipulated the environment, it doesn’t change what people have to offer. No one said they had to offer more because money was cheap, that was the fools overpaying because they could afford it in a low interest environment. I don’t overpay for my places and I’m in the same environment.


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## oldmanrockband (Dec 27, 2016)

Just a Guy said:


> James, it’s still a free market, in a fixed environment. People are free to pay whatever they want and can afford. If the government manipulated the environment, it doesn’t change what people have to offer. No one said they had to offer more because money was cheap, that was the fools overpaying because they could afford it in a low interest environment. I don’t overpay for my places and I’m in the same environment.


Amen...


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