Comments on: First time homebuyers dissapointed http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html Bubble? What Bubble? Thu, 09 Feb 2012 10:10:43 +0000 hourly 1 By: krrish http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-8393 krrish Sun, 06 Jan 2008 04:41:35 +0000 http://vancouvercondo.info/?p=359#comment-8393 <a href="http://realtylink.org/hpi/rebgv/images/1207-hpi1.gif" rel="nofollow">Hpi graph</a><p class="top-comments">Current score: <span class="top-comments-karma" id="karma-8393">0</span> <small>(to vote for this comment, please visit the site)</small></p> Hpi graph

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]]> By: VanCon http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-8333 VanCon Sat, 05 Jan 2008 04:12:58 +0000 http://vancouvercondo.info/?p=359#comment-8333 Wha??<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-8333">0</span> <small>(to vote for this comment, please visit the site)</small></p> Wha??

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]]> By: freako http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-8000 freako Fri, 14 Dec 2007 22:12:00 +0000 http://vancouvercondo.info/?p=359#comment-8000 The 40 term in itself is not a big deal. All else the same, a buyer could invest the "savings" in equities or whatever. The problem happens when prices go up in response.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-8000">0</span> <small>(to vote for this comment, please visit the site)</small></p> The 40 term in itself is not a big deal. All else the same, a buyer could invest the “savings” in equities or whatever. The problem happens when prices go up in response.

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]]> By: freako http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-7999 freako Fri, 14 Dec 2007 22:10:00 +0000 http://vancouvercondo.info/?p=359#comment-7999 <b>The difference in monthly payments between 40 year and longer amortizations (including interest-only, which is infinite) is very small </b><br/><br/>That is exactly the thing. Going from one extreme (25 year) to the other (interest only) only lowers the payments by 20%. And that is a one time shot that gets eaten up in a year and change juding by recent appreciation.<br/><br/>When you buy a place with 25% down, you are paying 80% interest to start.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-7999">0</span> <small>(to vote for this comment, please visit the site)</small></p> The difference in monthly payments between 40 year and longer amortizations (including interest-only, which is infinite) is very small

That is exactly the thing. Going from one extreme (25 year) to the other (interest only) only lowers the payments by 20%. And that is a one time shot that gets eaten up in a year and change juding by recent appreciation.

When you buy a place with 25% down, you are paying 80% interest to start.

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]]> By: e http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-7998 e Fri, 14 Dec 2007 17:17:00 +0000 http://vancouvercondo.info/?p=359#comment-7998 40 year mortgage is crazy.<br/><br/>Assuming they can buy a $400k property (cheap townhouse somewhere?), it will cost $1725/mo in mortgage, and $350/mo in property tax/maintennace.<br/>Assuming same thing can rent for $1400/mo.<br/>That means every year, if they save the money saved by renting ($2075-1400), they will save $8100/year. Over 40 years compounded at a reasonable 7%, that means at the end of the 40 years, they will have 1.6M$. That house better be worth more than 1.6M in 40 years.<br/><br/>If they invest in an index market fund which is 12% avg over its history (i.e. DOW), then that house better be worth over $6.2M after 40 years. The house has to go up 7% each and every year for 40 years in order to reach that level (break-even).<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-7998">0</span> <small>(to vote for this comment, please visit the site)</small></p> 40 year mortgage is crazy.

Assuming they can buy a $400k property (cheap townhouse somewhere?), it will cost $1725/mo in mortgage, and $350/mo in property tax/maintennace.
Assuming same thing can rent for $1400/mo.
That means every year, if they save the money saved by renting ($2075-1400), they will save $8100/year. Over 40 years compounded at a reasonable 7%, that means at the end of the 40 years, they will have 1.6M$. That house better be worth more than 1.6M in 40 years.

If they invest in an index market fund which is 12% avg over its history (i.e. DOW), then that house better be worth over $6.2M after 40 years. The house has to go up 7% each and every year for 40 years in order to reach that level (break-even).

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]]> By: patriotz http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-7997 patriotz Fri, 14 Dec 2007 11:14:00 +0000 http://vancouvercondo.info/?p=359#comment-7997 <i>In Spain they have 100-year amortizations. Don't think it couldn't happen here.</i><br/><br/>The difference in monthly payments between 40 year and longer amortizations (including interest-only, which is infinite) is very small - no more than 1/10 of the monthly payment at 6%. It doesn't raise the bar much.<br/><br/>With a 40 year term and 6% interest, it takes <b>12 years</b> just to pay off the first 1/10 of the mortgage balance. And God help the buyer if interest rates go up when it's time to renew after 5 years or whatever. This means that first-time buyers will not have the resources to trade up for a very long time. Any market where 40 year (or longer) term becomes the norm is headed for long term decline.<br/><br/>Like Japan, you know?<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-7997">0</span> <small>(to vote for this comment, please visit the site)</small></p> In Spain they have 100-year amortizations. Don’t think it couldn’t happen here.

The difference in monthly payments between 40 year and longer amortizations (including interest-only, which is infinite) is very small – no more than 1/10 of the monthly payment at 6%. It doesn’t raise the bar much.

With a 40 year term and 6% interest, it takes 12 years just to pay off the first 1/10 of the mortgage balance. And God help the buyer if interest rates go up when it’s time to renew after 5 years or whatever. This means that first-time buyers will not have the resources to trade up for a very long time. Any market where 40 year (or longer) term becomes the norm is headed for long term decline.

Like Japan, you know?

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]]> By: Ulsterman http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-7996 Ulsterman Fri, 14 Dec 2007 08:09:00 +0000 http://vancouvercondo.info/?p=359#comment-7996 what i don't get about Vancouver being the "Best Place on Earth" is that 95% of people here don't do anything outdoorsy on a regular basis.<br/><br/>I you don't golf, ski, mountain bike, play beach volley ball, or rollerblade the seawall why move here?<br/><br/>It certainly isn't for the high-paid head office jobs or the diverse cultural scene.<br/><br/>Maybe everyone just loves the rain and traffic...<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-7996">0</span> <small>(to vote for this comment, please visit the site)</small></p> what i don’t get about Vancouver being the “Best Place on Earth” is that 95% of people here don’t do anything outdoorsy on a regular basis.

I you don’t golf, ski, mountain bike, play beach volley ball, or rollerblade the seawall why move here?

It certainly isn’t for the high-paid head office jobs or the diverse cultural scene.

Maybe everyone just loves the rain and traffic…

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]]> By: wizardofozziejurock http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-7995 wizardofozziejurock Fri, 14 Dec 2007 04:49:00 +0000 http://vancouvercondo.info/?p=359#comment-7995 The percentage of first-time buyers going with 40-year mortgages is astounding. It's Canada's own version of the subprime market. Politicians, bureacrats, media (for the most part) just want to ignore it and feel all smug whilst the US housing market tanks. It's like watching an accident in slow motion.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-7995">0</span> <small>(to vote for this comment, please visit the site)</small></p> The percentage of first-time buyers going with 40-year mortgages is astounding. It’s Canada’s own version of the subprime market. Politicians, bureacrats, media (for the most part) just want to ignore it and feel all smug whilst the US housing market tanks. It’s like watching an accident in slow motion.

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]]> By: Swirlyman http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-7994 Swirlyman Fri, 14 Dec 2007 03:50:00 +0000 http://vancouvercondo.info/?p=359#comment-7994 Whatever it takes to get people to scrounge up a monthly payment. In Spain they have 100-year amortizations. Don't think it couldn't happen here. (You probably have to have children for the bank to give you one of those, though.)<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-7994">0</span> <small>(to vote for this comment, please visit the site)</small></p> Whatever it takes to get people to scrounge up a monthly payment. In Spain they have 100-year amortizations. Don’t think it couldn’t happen here. (You probably have to have children for the bank to give you one of those, though.)

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]]> By: ThumbsUp http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-7993 ThumbsUp Fri, 14 Dec 2007 02:46:00 +0000 http://vancouvercondo.info/?p=359#comment-7993 Sophia,<br/><br/>I have explained that earlier price to rent or buy can be fixed by floors,view,amenities,utilities,unfurnished or full furnished etc.<br/>Sophia,<br/>it's!ok<br/><br/>because starata man did not find a detail on phone so just forgive him to confuse us.<br/><br/>Drachen,<br/>those folks are doing something even today which you should have done that long ago.Our own home is a wonderful place on this earth.<br/>Again who ever can afford monthly payment for term,Drachen.<br/><br/>It's!Ok.<br/><br/>seen that article about Age 25,30 this time it's not me but statistic Canada drachen.<br/><br/>It's!OK<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-7993">0</span> <small>(to vote for this comment, please visit the site)</small></p> Sophia,

I have explained that earlier price to rent or buy can be fixed by floors,view,amenities,utilities,unfurnished or full furnished etc.
Sophia,
it’s!ok

because starata man did not find a detail on phone so just forgive him to confuse us.

Drachen,
those folks are doing something even today which you should have done that long ago.Our own home is a wonderful place on this earth.
Again who ever can afford monthly payment for term,Drachen.

It’s!Ok.

seen that article about Age 25,30 this time it’s not me but statistic Canada drachen.

It’s!OK

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]]> By: Strataman http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-7992 Strataman Fri, 14 Dec 2007 02:31:00 +0000 http://vancouvercondo.info/?p=359#comment-7992 Scullboy " Personally I really do love Vancouver, but you don't have to buy to enjoy the lifestyle. YOu can rent at half the price and let some other chump worry about interest rates and in-suite repairs."<br/>I agree and most if not all of the bulls on here are here cause they are having trouble sleeping..me I sleep really good and think of the$2000 net in my pocket each month that I would be paying if I owned this place with 25% down. In the meantime my wife and I manage to have a lot of fun. Time is short least if I get run over by a bus I'll have enjoyed every day! :-) A 40 year mortgage is a LOT of bus dodging! :-)<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-7992">0</span> <small>(to vote for this comment, please visit the site)</small></p> Scullboy ” Personally I really do love Vancouver, but you don’t have to buy to enjoy the lifestyle. YOu can rent at half the price and let some other chump worry about interest rates and in-suite repairs.”
I agree and most if not all of the bulls on here are here cause they are having trouble sleeping..me I sleep really good and think of the$2000 net in my pocket each month that I would be paying if I owned this place with 25% down. In the meantime my wife and I manage to have a lot of fun. Time is short least if I get run over by a bus I’ll have enjoyed every day! :-) A 40 year mortgage is a LOT of bus dodging! :-)

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]]> By: Scullboy http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-7991 Scullboy Fri, 14 Dec 2007 02:19:00 +0000 http://vancouvercondo.info/?p=359#comment-7991 Strataman (and company),<br/><br/>I think that "Luxury loft style townhouse" is our canary in the lovely Vancouver coal mine. Well that and Thumbs.<br/><br/>I hope "Amby" never finds out how much joy he/she's brought to the rest of us. <br/><br/>I just can't figure it out. Personally I really do love Vancouver, but you don't have to buy to enjoy the lifestyle. YOu can rent at half the price and let some other chump worry about interest rates and in-suite repairs. <br/><br/>I think people are going to figure out pretty soon that they made a mistake.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-7991">0</span> <small>(to vote for this comment, please visit the site)</small></p> Strataman (and company),

I think that “Luxury loft style townhouse” is our canary in the lovely Vancouver coal mine. Well that and Thumbs.

I hope “Amby” never finds out how much joy he/she’s brought to the rest of us.

I just can’t figure it out. Personally I really do love Vancouver, but you don’t have to buy to enjoy the lifestyle. YOu can rent at half the price and let some other chump worry about interest rates and in-suite repairs.

I think people are going to figure out pretty soon that they made a mistake.

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]]> By: Strataman http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-7990 Strataman Fri, 14 Dec 2007 01:56:00 +0000 http://vancouvercondo.info/?p=359#comment-7990 http://tinyurl.com/2o7ep5<br/><br/>Down she goes $300.00 rent reduction on empty brand new condo. Love it!<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-7990">0</span> <small>(to vote for this comment, please visit the site)</small></p> http://tinyurl.com/2o7ep5

Down she goes $300.00 rent reduction on empty brand new condo. Love it!

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]]> By: Richard http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-7989 Richard Fri, 14 Dec 2007 01:51:00 +0000 http://vancouvercondo.info/?p=359#comment-7989 what was the reason the cmhc is into 40 year mortgages again? Was it because of competition or are they just nuts?<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-7989">0</span> <small>(to vote for this comment, please visit the site)</small></p> what was the reason the cmhc is into 40 year mortgages again? Was it because of competition or are they just nuts?

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]]> By: Drachen http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-7988 Drachen Fri, 14 Dec 2007 00:47:00 +0000 http://vancouvercondo.info/?p=359#comment-7988 I agree mold, 40 years of surviving on bread crumbs and maxed out credit cards, sounds like Vancouver really IS paradise! Too bad you can't afford to take time off from your 3 jobs to go to the beach once in a while (never mind ski, you can't even AFFORD that, never mind the time it takes).<br/><br/>Or maybe Thumbsup is right. "Vancouver best city on earth, better a slave in nice place being than king in a nice but not quite as nice place like Halifax or Montreal." (paraphrasing)<br/><br/>I think his argument goes something like that.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-7988">0</span> <small>(to vote for this comment, please visit the site)</small></p> I agree mold, 40 years of surviving on bread crumbs and maxed out credit cards, sounds like Vancouver really IS paradise! Too bad you can’t afford to take time off from your 3 jobs to go to the beach once in a while (never mind ski, you can’t even AFFORD that, never mind the time it takes).

Or maybe Thumbsup is right. “Vancouver best city on earth, better a slave in nice place being than king in a nice but not quite as nice place like Halifax or Montreal.” (paraphrasing)

I think his argument goes something like that.

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]]> By: mold city http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-7987 mold city Fri, 14 Dec 2007 00:37:00 +0000 http://vancouvercondo.info/?p=359#comment-7987 But who really cares if they're dissapointed? If they don't like what they're buying, but are too stupid not to buy it then f##'em.<br/><br/>Particularly if they're signing up for 40 year mortgages for the joy of living where they don't want to. <br/><br/>What a bunch of maroons.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-7987">0</span> <small>(to vote for this comment, please visit the site)</small></p> But who really cares if they’re dissapointed? If they don’t like what they’re buying, but are too stupid not to buy it then f##’em.

Particularly if they’re signing up for 40 year mortgages for the joy of living where they don’t want to.

What a bunch of maroons.

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]]> By: mold city http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-7986 mold city Fri, 14 Dec 2007 00:22:00 +0000 http://vancouvercondo.info/?p=359#comment-7986 Whaddya mean nothing left over? You've heard of credit cards haven't you? Plus if you run into trouble you just take out a reverse mortgage and double your money no problem! Its not a place to live, its a magical money dispenser! <br/><br/>All rich people own property, therefore if you own property you can be wealthy too!<br/><br/>.. There must have been some magic in that old straw-hat they smoked..<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-7986">0</span> <small>(to vote for this comment, please visit the site)</small></p> Whaddya mean nothing left over? You’ve heard of credit cards haven’t you? Plus if you run into trouble you just take out a reverse mortgage and double your money no problem! Its not a place to live, its a magical money dispenser!

All rich people own property, therefore if you own property you can be wealthy too!

.. There must have been some magic in that old straw-hat they smoked..

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]]> By: Drachen http://vancouvercondo.info/2007/12/first-time-homebuyers-dissapointed.html#comment-7985 Drachen Fri, 14 Dec 2007 00:16:00 +0000 http://vancouvercondo.info/?p=359#comment-7985 70% before taxes I am guessing. Which means that after taxes they have essentially nothing left for food, transportation etc. I recall someone worked it out a while back that an average family (income wise) buying an average house will end up spending 60-70% of their pre-tax income with 25% down.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-7985">0</span> <small>(to vote for this comment, please visit the site)</small></p> 70% before taxes I am guessing. Which means that after taxes they have essentially nothing left for food, transportation etc. I recall someone worked it out a while back that an average family (income wise) buying an average house will end up spending 60-70% of their pre-tax income with 25% down.

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