My stocks stink.

Thats it! I’m cashing out all my stock and buying pre-sale condos in downtown Vancouver. US and Canadian markets had another stumble today on more bad news from the home-lending sector and fears of a wilting economy. Gold mining stocks lost their glitter today and sub-prime lender New Century Financial isn’t looking so shiny either. Just how the hell is a fella s’posed to get rich these days?

The Mortgage Bankers Association said delinquencies among all borrowers reached the highest since the second quarter of 2003. Government data also showed February retail sales rose less than economists forecast, spurring concern department stores and discount retailers will be hurt by the fallout from the home-lending market.

“I would be very surprised if it didn’t spread,” said Alex Motola, who manages the $2 billion Thornburg Core Growth Fund in Santa Fe, New Mexico. “The consumer is at risk again.”

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Freako
Freako
13 years ago

If you bought at the peak in 1981 your net rental income would have been negative for a decade or more. It can be viewed a couple of ways. The important thing is apples to apples. If you are looking at it in real terms, you should not include debt, so net rental income is merely rent minus non-interest costs. And technically, the net rental income should be carried forward at real return of risk free (which is probably negligible.)

satv
satv
13 years ago

yeah you guys are right but I land in 1995 I am only 36 in 82 I was in school.my dad was construction worker he made tonz of home expect for himself.So I am kind of from zero to what ever.1996 first time I start working after graduation and some computer.yeah if anybody in 82 that should apply.

patriotz
patriotz
13 years ago

Depends a lot on what you mean by "profitable".Is that an annual operating profit, or a total return of > 0 from time of purchase?If you bought at the peak in 1981 your net rental income would have been negative for a decade or more. So your break even point is when the present value of your net rental losses equals the capital gain on your purchase price.And I think anyone buying today is in for a really long wait before the break even point is reached.Note that the above applies both to investment properties and owner-occupiers (imputed rent). The break even points will be different because of income tax considerations for the investment property.

Freako
Freako
13 years ago

satv, do you understand that if you bought at the peak in Vancouver in 1982, you just became profitable last year? You reached real price break even. I don't have specifics, but you would have been "profitable" far earlier than that. For one thing, you are ignoring net rental income.

ReductiMat
ReductiMat
13 years ago

satv, do you understand that if you bought at the peak in Vancouver in 1982, you just became profitable last year?

satv
satv
13 years ago

Even 97 is not bad 65k to 215k=151k98 250k 500k=250'1/42006 380k 470k =90k2007 Jan260k 375k = 115k in one and half month not badup and coming I will sell the last purchased after june 2008

ReductiMat
ReductiMat
13 years ago

satv, do you understand that if you bought at the peak in Vancouver in 1982, you just became profitable last year?

satv
satv
13 years ago

FreakoI appreciate thatakhen I appreciate your knowledge about share mkt.My opinion is not to hurt share mkt.and not to gain r.e.my comments comes from personel experiance that is based since July 1997 and knowledge through up's and down in life.so far I only lose if I play lotto some time but I am not crazy player only play one chance lose$3.00 as not a winer occasionally. LIVE RESPONSIBLY/BUY CONFIDENTIALY

OnTheIsle
OnTheIsle
13 years ago

"The average national price tag of $311,101 is a 10-per-cent leap from last February's average price of $282,744, the Canadian Real Estate Association said in a report released Wednesday."Gee, I make an average wage but that average price is a like $200,000 from the average price in Victoria and much more than Vancouver. Funny how the west coast averages aren't mentioned in the article,guess they know we are all in La La Land out here so use reminding us how ridiculous it has got. 80% affordability index coming up !

Freako
Freako
13 years ago

"but real estate depend on population you can always predict that will grow up the world is witness unless or otherwise(fear of "If you believe that markets are remotely efficient in the long run, such factors are long priced in. Risk-return you know. Finance 101.If the income stream is obvious and riskfree, the appreciation has already happened. Markets are forward looking.

satv
satv
13 years ago

ReductiMatno I am a warehouse worker 10 year on my current job.

Akhen
Akhen
13 years ago

SATV, cash is the lifeblood of a business just as it is the financial lifeblood of your personal finances.If you can't stay liquid, you will die (financially).Value of a company is determined by its ability to increase revenue and decrease its relative costs (increasing net profit is always good).Stock market values (partially true in the RE market) are driven by greed and fear . . . another word, emotions. Those that has bought real property but can't really afford it and had to borrow to finance nearly or the entire purchase price, if they are cash poor, when the market turns, they WILL get killed as they can't stay liquid enough.That is why we have a huge problem (will be even greater) in the States with loan defaults. In Canada, there's the CMHC to mitigate the risk of 0 percent… Read more »

ReductiMat
ReductiMat
13 years ago

satv, is your profession in any way linked to real estate?

satv
satv
13 years ago

STANDING TALL(R.E.)ReductiMatReal estate have edge over share market.even when market goes down still you or some one as owner or tenant can continue use the land for peaceful living and reduce the debt as you go that is automaticaly bring you in profit.if we lost share what is left there to use and holding property sooner later can pop up again,but share market that part you holding share hard to predict. AKHENCompanies get stronger because you have little margin in your hands that you never want to cash.it is like some one playing with your emotion.but real estate depend on population you can always predict that will grow up the world is witness unless or otherwise(fear of terrorism,earthquake,or fear of tsunami)other fact hardly knock down because of local overflow flow over to nearest not on to another border unless trading… Read more »

slugora
slugora
13 years ago

There may be more to our licketyclit than just a loose tongue.

duck
duck
13 years ago

Before you heed my investment advice on downtown condos you may want to take into consideration that I'm an inveterate liar and a cheat.Also I kick puppies.I figured out the integrated inverted coding system of your 3/13/07 12:29PM message above, to wit: you lied about kicking puppies and being a liar and a cheat, and cleverly tried to mislead me into thinking you were giving bad advice on investing in downtown condos.So the hidden message for clever people such as myself was "buy now!". And since you run a blog, you must know. I didn't like any of the pre-sales I found, mostly because the lineups were non-existent so that must mean that they aren't making them as good as they used to. So I just bought ten used ones (condos, not puppies) from a guy on CraigsList who gave… Read more »

duck
duck
13 years ago

It all depends on how fast the panic can be spread, and for the first time ever, we have the internet to fuel the fire.I think the internet (particularly blogs) has played a role in the speed (but not the inevitability) with which the U.S. mortgage saga has begun to unfold.

licketyclit
licketyclit
13 years ago

About the only thing I find hard to disagree with about the looming crash is the time it will take to reach a bottom.Although the market languished for some time after hitting bottom in 82, most of the damage was done within a year. The 90 crash was even shorter. After the double top (early 95 and late 96) bottoms were reached in less than 6 months, only to stay flat for the next 5 years. If the biggest up-spikes are followed by the fastest drop, then our unprecedented bubble could drop with unprecedented speed. It all depends on how fast the panic can be spread, and for the first time ever, we have the internet to fuel the fire.All the crap about the olympics may not be that outrageous, because our market will have crashed long before then, and… Read more »

Akhen
Akhen
13 years ago

Housing price continue to climb!Article in the Globe and MailAhkenaten

Akhen
Akhen
13 years ago

Good news!At least mortgage rates won't be going up anytime soon . . . inverted yield curve.Ahkenaten

Akhen
Akhen
13 years ago

satv, if a company's executive upgrades and makes business decisions based on their fear/fondness of stock market investors, the company deserves to go bankrupt.Share prices trade in cycles reflecting the overall economic cycle. This "cycle", prior to the institution and adaption of our modern day fiscal and monetary policies based on Keynesian economics were even shorter. Peaks to trough now generally runs from 2 to 3 years. In the pre-keynesian days, it use to run in months. Imagine that!Ahkenaten

Akhen
Akhen
13 years ago

A top takes weeks if not months to form. The market downtrend (larger trend reversal) have not even started…if you short and trade with derivatives, don't get killed by the pullbacks (both up n' down).Friends of mine in 94'-95' that gambled and bought (RE mkt)couldn't get out in time and was caught in the downtrend. There are also others that got caught up in the asian market-uptrend feeding frenzy and was wiped out. My friend's boss had 10 luxury condos in Singapore valued at over 1mil ea. and when the market finally rolled over, he of course couldn't sell. Unless you want to take a huge loss, you'd have to keep feeding the mortgage monster. Eventually, he had to walk.Don't get caught holdin' the bag.Ahkenaten

ReductiMat
ReductiMat
13 years ago

Satv, I'm not sure if you read these first hand, or if you go at them through babelfish, but if I managed to parse your last post…Are you seriously implying that real estate over the long term is better than the stock market?

Lethargio
Lethargio
13 years ago

One of the big US subprime lenders is a client up here in Canada. They opened a big office in Richmond and were planning a bigger one in Missausaga. I read today that they are planning to cut a lot of jobs to maintain liquidity. Lots of Canadian residents are going to lose their jobs.

satv
satv
13 years ago

LOSER MUST THE VALUE OF GAMECome late come correct but a bit late to learn Vancouver real estate is too late.Who must the value of game,one who loose or one who win?answer is the one who lose.What is share market?When some companies earn profit share goes up companies always start worries about fear that investor will with draw their share,then what companies do they run upgrade and expand their bussiness which slow down their sales and bring market down otherside companies get stronger and no body knows that,this is my understanding because I am kind of witness that takes atleast 3 year to jump back to normal or high till that time what will happen to investor but there is always little margin of profit that we can't lough/cry