High cost of housing is bad for society. It made me think of fleeing, it made me not wanting to spend, it made me uncertain of the future. So what do one do? One gets into the prepare for disaster mode: spend as little as possible, get rid off stuff, be prepared to move on a short notice, and be very careful of whom you may trust.

Apparently I could not trust the media, the blingy realtors, the government, or banks.

So, being observant, making own sense out of the mess, I had to rely on my own gut, logic, thinking.

Nobody I knew had gotten any raises, so how can housing keep going up like this? The media did not say anything that would make the equation work, searched the internet – somebody, there must be somebody out there that must have felt something was out of kilter. Salvation: Vancouver Housing blog. Finally, I felt I was not some weird loner, an outcast that refused to follow the lemmels. I am a thinking human and happy to find other humans that questioned and think.

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I lost my own job in 1982, so I've never thought "it could never happen to me".

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At least when/if your home goes down in value 50%, you still have a home to live in, not just a piece of paper saying you own a home.

What you have is a piece of paper that says you "own" a house worth, say, 300K, and another piece of paper that says you owe the bank 600K on which you have to pay interest for decades.

To stay in that house, you have to pay the bank twice as much as to rent the same house.

You don't really own anything. The bank owns you.

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My examples were over simplified. There are so many things to consider if it's the right time to buy. Inflation and higher rates do put pressure on real estate prices, but after it normalizes, I think higher inflation and higher rates actually deliver a benefit to those who have mortgages since home prices catch up with the inflation (historically), but the amount you owe on your mortgage doesn't.

Nobody can predict where prices will be exactly in 1, 5, or 10 years. If I had to guess, I'd say in 1 year they will be down. I wouldn't even bother to guess about 5 years or 10 years.

You do have to look at real estate as an investment, but when stocks are down 50%, you have a 50% loss (on paper anyways). At least when/if your home goes down in value 50%, you still have a home to live in, not just a piece of paper saying you own a home.

I think this blog serves a useful purpose, but it isn't really a great place to share different opinions. People who are real estate bears tend to flock here and support each other, and there will always be real estate bears, even at the very very bottom of the market (which we won't know until we are looking back at it!)

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http://tinyurl.com/ch4skl

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China + Amero = Chimero

we are joined at the hip!

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!

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