Comments on: Friday Free For All!

By: Esoteric

Esoteric — Tue, 22 Jul 2008 21:18:37 +0000

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”.

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By: JC

JC — Tue, 22 Jul 2008 19:43:17 +0000

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.

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By: patriotz

patriotz — Tue, 22 Jul 2008 15:40:33 +0000

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.”

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By: Drachen

Drachen — Tue, 22 Jul 2008 15:21:23 +0000

BOP

You’re mean.

But I like it

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By: Burden of Proof

Burden of Proof — Tue, 22 Jul 2008 14:32:23 +0000

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.

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By: Burden of Proof

Burden of Proof — Tue, 22 Jul 2008 14:31:01 +0000

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/

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By: Anonymous

Anonymous — Tue, 22 Jul 2008 05:38:16 +0000

19845 units for REBGV. We’re 155 away from 20K folks!

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By: john

john — Tue, 22 Jul 2008 05:03:18 +0000

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.

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By: Anonymous

Anonymous — Tue, 22 Jul 2008 04:48:17 +0000

“Investor lose 29%”

Who told them to buy in USA buy in Canada specially in Vancouver British Columbia “*The*Best*Place*On*Earth*”-bdk?

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By: mk-kids

mk-kids — Tue, 22 Jul 2008 04:44:51 +0000

oops, i meant boats…

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By: mk-kids

mk-kids — Tue, 22 Jul 2008 04:43:46 +0000

lol john! 5% on your boat already! maybe boast are the next bubble?!

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By: john

john — Tue, 22 Jul 2008 02:06:00 +0000

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.

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By: Anonymous

Anonymous — Tue, 22 Jul 2008 01:20:51 +0000

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”

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By: patriotz

patriotz — Tue, 22 Jul 2008 00:32:07 +0000

ala the recent NewYorker Magazine cover with Obama dressed up as a muslim

Dressed up as a Yemeni, I would think. What you said is sort of like saying someone wearing a cowboy hat, boots, etc. is “dressed up like a Christian”.

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By: alexcanuck

alexcanuck — Tue, 22 Jul 2008 00:14:38 +0000

Hey, John.
That was Olympic Boat Center you stopped by, wasn’t it? I thought I saw you there. You were in a pretty heated discussion at the time, I didn’t want to but in. About that deposit on your new yacht you were talking about with the manager? Bad news I’m afraid: http://tinyurl.com/6movl2 Bankrupts don’t refund deposits, do they?
Still, to walk away from that deposit money and know they won’t be coming after you for the rest must be a good feeling compared to your presale condo deposits now that you can’t flip, can’t close and can’t carry!

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By: Tom

Tom — Mon, 21 Jul 2008 22:29:13 +0000

John, they might like the smell of a new condo but they sure like the smell of a bargain even more !

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By: john

john — Mon, 21 Jul 2008 22:27:15 +0000

I stopped into the boat yard today and was told my new boat has already apreciated 5% because of the rich albertans and the celebration of lights. The condos are looking nice and pristine. I checked them out today. I like to keep them empty because rich asians like new condo smell.

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By: blueskies

blueskies — Mon, 21 Jul 2008 21:24:27 +0000

there’s a guy in my office w/ 7 condos.

if purchased recently and leveraged i know i’d be losing sleep….

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By: Vansanity

Vansanity — Mon, 21 Jul 2008 21:23:23 +0000

Anon #85
Friend who Bought for $320K and up for sale at $378K. Is he living in the unit? Paying the bills? Because if so, the carrying costs of that house may have already put him in the negative. An excercise anyone buying or selling should do.

Here’s an example with your friend, assuming he lives there:
2005 - 2008 - 36 months (this is likely off, so we’ll use 30)
Mortgage on $300,000 - $1,800 (plus expenses, taxes, etc.)
We’ll say monthly payment $2,000 to be kind.
Total carrying costs to date - $60,000
If he were to sell at current list he would be net $2,000 lost. And we’re being very conservative here, just in case he threw down more than $20,000.

Just out of curiousity, what are the rest of the details to his situation?

(PS - Anons - you guys should really create a name, easier to reply to for the rest of us)

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By: M-

M- — Mon, 21 Jul 2008 21:14:52 +0000

Drachen: there’s a guy in my office w/ 7 condos.

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By: renter-babe

renter-babe — Mon, 21 Jul 2008 20:42:38 +0000

Anecdote: I hear from a realtor that he was the only one at the office on Sunday. They’ve had a couple agents quit and leave clients in the lurch. Everyone is booking holidays and not even in the office.

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By: Drachen

Drachen — Mon, 21 Jul 2008 19:39:35 +0000

“Actually, I think John is a pretty good satirist… many/most do not see the satire that was intended.”

That’s a contradiction. If he were a good satirist most people would be able to see it as satire. How can it be good if it’s unclear? I think he’s more of a troll than a satirist. A true satirist would push the envelope a bit further when he realized that he wasn’t creating a caricature so much as an extreme example of reality.

Sadly I’m sure there ARE people who own 5 condos and a new boat in Vancouver and expect their real estate ‘investment’ to be their ticket to everlasting wealth. There are probably dozens of people if not hundreds in similar positions.

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By: Re-diculous

Re-diculous — Mon, 21 Jul 2008 19:23:45 +0000

Actually, I think John is a pretty good satirist (ala the recent NewYorker Magazine cover with Obama dressed up as a muslim etc). Unfortunately, as in the case of this recent cover, many/most do not see the satire that was intended.

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By: blueskies

blueskies — Mon, 21 Jul 2008 18:32:28 +0000

john: you are wasting bandwidth.

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By: john

john — Mon, 21 Jul 2008 18:17:48 +0000

The vancouver real estate market remains stable and steady. Prices are high and continue to appreciate in smaller increments than in the past. The celebration of lights is attracting a lot of interest from foreign investors and oil soaked Albertans. I just bought 5 condos and a new boat. I’ve refinanced my second mortgage on my million dollar east side house to buy a smart car and a prius for the wife. We like hanging out in Kits though.

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