Comments on: friday free for all!

By: grant

grant — Thu, 23 Aug 2007 13:49:00 +0000

casual observer,if I was running the mortgage dept. of a bank, I would prefer that all of the mortgages issued be high-ratio mortgages, and subsequently be insured for default risk.During one of my mortgage applications, my broker told me I got a 0.05% reduction in my rate because I was CMHC insured.I'm surprised these discounts aren't more common!

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By: satv

satv — Mon, 20 Aug 2007 19:52:00 +0000

yeah one thing I can tell you that would be good to guess.residential sales volume on mls in bc up 44%residential unit sales up 25%no more question please you will find out next month.thanx alpha.I know source are very importent to present solid arguments ,but I am not arguing this is just a little info for us for here.

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By: satv

satv — Mon, 20 Aug 2007 19:41:00 +0000

alpha bear,sorry thats one sided true numbers don't look for source.

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By: Alpha_Bear

Alpha_Bear — Mon, 20 Aug 2007 11:45:00 +0000

Satv,According to the OMREB, the YTD residential sales in the Central Okanagan were 1855, while last years residential sales YTD were 1620, for a YTD increase of 14.51%For the North Okanagan, the residential sales YTD totalled 753, while last years figures YTD were 767, for a DECREASE of 1.83%I can't see how you manage to get a 13.7% increase from these figures.If you add the North Okanagan and Central Okanagan figures together, you'll wind up with 2608 residential sales YTD, and 2387 residential sales last YTD, for a percentage increase of 9.26%

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By: satv

satv — Mon, 20 Aug 2007 08:11:00 +0000

Alpha_Bear.,Okanagan Mainline up 13.7%South Okanagan----up 11.8%mls residential price up $446,386 thats 15.2% up yoy.

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By: TheVanMan

TheVanMan — Mon, 20 Aug 2007 07:14:00 +0000

If this is truly the case, then if I was running the mortgage dept. of a bank, I would prefer that all of the mortgages issued be high-ratio mortgages, and subsequently be insured for default risk. As a lender, my butt would be about as completely covered as you can get.I say:That's the way banks operate in a deficit mode and loan structure are designed to do what?"To always protect the lender first".You see, banks only have about 5% of cash on hand for depositors. The rest goes to business loans and mortgages. We all know what happened to some of the shady business loans (Enron, Global Crossing and 360 net). They were failures, but still all banks recovered after since. Who suffered? Shareholders of those companies did.In this round of mortgage mess, banks will not suffer because as long as there is no on mass bank runs, the banks will do just fine as they had always did for centuries. They are protected against any calamities.The homeowners, however, are going to be suckers in this game. If you read the CMHC guideline, it mentioned "NOTHING" against protection of loss of build equity in the home for home owners. Your down payment or your payments towards reducing your principle are not protected. If you have 20% built-up equity in a home and the market lost 10%, you would loose 50% of your own equity. Banks loose nothing. You see the beauty of this. You loose, they don't.We all know the market could correct back to 1997 levels. That's not a 10% correction btw. In the end, most of these suckers will have no choice but to continue mortgaging at a loss, but some will just sell.

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By: TheVanMan

TheVanMan — Mon, 20 Aug 2007 06:51:00 +0000

"I think you are using the popular, but bogus, definition of "investment" as "an asset with a guaranteed capital gain". Not only does housing not provide this, no other asset can, either."I say:That means you never had an education? And that you're destined to become a low wage earner for the rest of your natural lives?Let's make one thing clear what is an asset. An asset is an entity for generating cash flow, which is the opposite of liability.We all possess some asset that make us unique. Our brain, for example, is a given asset. It contains knowledge, to allow you and myself to perform admirably in our vocation. Our vocation is what provides us with income, aka cash flow. How do we get that knowledge?!? By going to school right?Yeah, but apparently many of you seemed to have forgotten this.The last time I've checked, going to UBC or SFU to earn a degree wasn't free, nor going to BCIT wasn't free either. Who pays for this? When you go to school to learn a new thing, you are inevitably "INVESTING" in the future. And that the new knowledge (aka asset) will help you attain guaranteed higher income than your current cash flow can allow. If you study law, politics, engineering or medicine, your income will undoubtedly be higher than a high school graduate could attain. Knowledge is power and a guaranteed capital gain in the end in the form of wage compensation.While a car is a liability to us, but it is an asset to a taxi driver or a traveling salesman. Because, they need a car to make a living and produce a guaranteed income. No car, no taxi driver. Get it!?!A home is also an asset to some people. Home daycare for instance is a good example. Use your home as a daycare center. Not only can you deduct business expenses, and with some creative financial arrangements, you can also deduct interest expenses too and apply that to your mortgage. Happens all the time. What about home businesses or people who telecommute? I agree that these days, most homes are bought to generate capital gain yield. This is the attraction. Borrow with low interest to buy asset that could bring in higher yield, but different individuals obviously gain differently depending upon how they use their homes for..

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By: bogdan

bogdan — Mon, 20 Aug 2007 06:48:00 +0000

Here we go again...up and only upCanadian home sales forecast liftedROMA LUCIWGlobe and Mail UpdateAugust 20, 2007 at 10:26 AM EDTEven as the U.S. housing market continues to unravel, the Canadian Real Estate Association has hiked its 2007 year-over-year sales growth target from 6.5 per cent to 8.1 per cent.Canadian home sales are now expected to reach 523,100 units this year, up from a previous target of 514,450 units, and the highest level on record in most provinces, CREA said in a new residential forecast released Monday.â€œActivity is forecast to edge slightly lower in 2008, but will reach the second highest annual level on record in almost all provinces,â€ CREA said. â€œPrices are forecast to set new records in every province this year and in 2008, but price increases will be smaller next year.â€

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By: Alpha_Bear

Alpha_Bear — Mon, 20 Aug 2007 06:31:00 +0000

Satv said,"Residential sales year to date change.Okanagan+13.7%"I don't know where you're getting your figures for the Okanagan, Satv, but they don't match the OMREB July release.

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By: Clarke

Clarke — Mon, 20 Aug 2007 04:17:00 +0000

"I think you are using the popular, but bogus, definition of "investment" as "an asset with a guaranteed capital gain". Not only does housing not provide this, no other asset can, either."Thanks for the correction Patriotz. I could not seem to find the proper phrasing for the concept of "investment" as typically used in popular discussions on real estate. I seem to run into more and more people that have recently bought into the market. Invariably, every discussion I have with these people involves their belief that this is a great "investment" because RE always goes up. Valuation of this investment in terms of the income stream it generates or the rent expense it offsets, is simply not considered. Makes me wonder how these people would value shares of stock or bonds. Bear in mind I work in the financial services sector, and the people I usually run into who have just bought in are colleagues and associates. Be afraid, very afraid.

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