Friday Free For All!
It’s time for our end of the week news round up and open topic discussion! Here are a few stories I’ve noticed, feel free to comment on these or add your own links in the comment section:
- Canada in a recession?
- Brace for inflation
- The stink of corruption?
- Job Market better than it appears
- Dropping house prices increase inflation?
- Vancouver homeless rights complaint
- You’re richer than you think.
- BC: Number 1 in property crime
- Flaherty: No housing bubble in Canada
- Bay Area prices drop 27% in one year
- Pitfalls of a cheaper US market
- US Rate hike debated
- Merrill Lynch: 1 year, $19.2 billion lost
So what are you seeing out there? Post your news, links and anecdotes here and have an excellent weekend!
note: any conversation on real estate or economics is allowed, please keep it civilized. When posting articles please only quote pertinent points and link to the original instead of pasting the entire article here. Pasting a link will automatically create a clickable hot-link. Thanks!
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July 22nd, 2008 at 2:18 pm
I can’t for the life of me understand why people can’t wrap their heads around the fact that 40 amortizations are every bit as toxic as “teaser rates”, ARM’s, and all the rest of the sub-prime fiasco’s evil products.
The problem, the FUNDAMENTAL PROBLEM with these products is that over the first 5-7 years, the home buyers’ accumulate very little if any equity in the home. They are mostly paying off interest and barely paying down any principle.
You can use any mortgage calculator on any bank website to check this if you would like. If a home buyer has 0-5% equity in their home but the value of the home drops 10%, that is negative equity.
Negative equity is what prompts the most foreclosures. When people are in a negative equity situation, they WANT to default on their mortgages. They want to walk away and so they stop paying their mortgage payments.
Now in Canada, the fact that people CANNOT walk away from their mortgages actually will make our housing correction last LONGER. People will still be paying mortgage payments that they cannot really afford and will not be able to save any money to get BACK into the housing market.
In Canada, we may not have a “crash” the way that the US is having… but it will be just as painful overall except that it will take longer to get back to a “boom”.
July 22nd, 2008 at 12:43 pm
Replying to Vansanity about the friend selling his place for $378k. I don’t think his carrying costs are as high as you said, but you make a nice point. His profits from selling are not $378k – $320k. His carrying costs are probably around $40k for 3 years. His RE fees should be around $12k when he sells eventually. I initially thought he was making a huge profit, but now it doesn’t look like that much.
July 22nd, 2008 at 8:40 am
John, you just sound flat. Try running through a translator to, e.g, German and back again:
“BC is the best place on the earth to invest, and yes, what boats a good investment are. If you bought 17 ft double eagle last year, as a petrol was inexpensive, you would have made at least 2 splendidly, in the meantime. Albertans to dear boats and some Asians also. I buy boats and freehold flats and sometimes big SUVs as investments.”
July 22nd, 2008 at 8:21 am
BOP
You’re mean.
But I like it
July 22nd, 2008 at 7:32 am
Nothing is selling. It is time to make very low ball offers, like 50% off list. Even if they don’t bite immediately, it will demoralize owners and their realtors, contributing to negative psychology.
July 22nd, 2008 at 7:31 am
Recently Rob Chipman posted quotes from Sir John Templeton. He left out Templeton’s real estate advice. Here it is:
“After home prices go down to one-tenth of the highest price homeowners paid, then buy.”
http://traceysmarketupdate.com.....templeton/
July 21st, 2008 at 10:38 pm
19845 units for REBGV. We’re 155 away from 20K folks!
July 21st, 2008 at 10:03 pm
BC is the best place on earth to invest and yes boats are a good investment. If you bought a 17 ft double eagle last year when gas was cheap you would have made at least 2 grand by now. Albertans love boats and so do some asians. I buy boats and condos and sometimes big SUVs as investments.
July 21st, 2008 at 9:48 pm
“Investor lose 29%”
Who told them to buy in USA buy in Canada specially in Vancouver British Columbia “*The*Best*Place*On*Earth*”-bdk?
July 21st, 2008 at 9:44 pm
oops, i meant boats…
July 21st, 2008 at 9:43 pm
lol john! 5% on your boat already! maybe boast are the next bubble?!
July 21st, 2008 at 7:06 pm
Exactly right anonymous. Now is the time to buy before the asians come and buy them all. Just look at what’s happening in Alberta.
July 21st, 2008 at 6:20 pm
Investor lose 29% this month wisemans make money so buy now and ask higher price and seller pay higher price market
http://www.forbes.com/feeds/ap.....23017.html
“the best time to sell is totally opposite”