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October 18th, 2009 at 1:09 pm
logic, not much is going to happen now until there is either an inflationary or deflationary shock. some of the recent demand was pushed from last fall into this year, more noticeable results from premium markets like north shore and vancouver proper.
October 18th, 2009 at 12:51 pm
“more of that demand can move into the supply”?
–
What now?
October 18th, 2009 at 12:49 pm
no longer looking, demand for sfh’s far exceeds supply for the areas you mention. low interest rates mean more of that demand can move into the supply.
October 18th, 2009 at 12:31 pm
What I find so odd is how this latest spike is so concentrated in Van West, Van East, and North Van SFH (stats show this). You don’t have to go far out into the suburbs to find prices like last year. I wonder why the craze is so much more narrowly focused than it was pre-2008.
October 18th, 2009 at 11:34 am
Hey boys and girls, there are more mainlanders from China invading Vancouver in the next 6 months, good luck with all your price drop fantasies.
October 18th, 2009 at 9:17 am
@asalvari1:
As opposed to the ‘impending’ drop in prices which is grounded in fact?
October 18th, 2009 at 9:15 am
@asalvari1: Right, and on the same token, it could take longer than 5 years. It completely depends on your family situation too.
October 18th, 2009 at 8:00 am
@!(EconomicsDegree):
How you figured out the wait of 5 years ?
there will be no need to wait 5 years to see lower prices. The prices follow the market dynamic, and they depend on the current rates, affordability and economic situation in general. So, if the factors turn out in 2 years, the market is going to reflect it much sooner then the 5 year timeframe you made up of thin air.
October 18th, 2009 at 6:16 am
Patriotz: people buying using other people’s money could well find affordability at low rates and high prices similar to the opposite for some time.
I have little doubt those who wait for low prices will be financially better off but those who desire to buy have different constraints that make purchasing today at high prices/lower rates tolerable, most notably not wanting to wait five more years to buy.
October 18th, 2009 at 4:01 am
@!(EconomicsDegree):
You really didn`t think we`d let this canard go by, did you?
As I have already said upthread, someone buying now at a high price and low rates will almost certainly face higher rates – and much higher payments – upon mortgage renewal.
So who ends up paying less – the person buying at a high price and low rates, or the person who waits to buy at a low price and high rates?
Think real hard.
October 18th, 2009 at 1:34 am
@Van Housing Bull:
What you are describing is Utopian Socialism which negates the market economy of the ‘democracy’ that you also mention. If there is a ‘right ‘ to home ownership and that right is supported by government programs which interfere with market economics, then what is the value of your property? Ask yourself, will a change in government policy negate the value of your holdings when the election cycle brings in a new ideology?
At the current time the government is effectivley purchasing real estate for unqualified buyers who cannot support the purchase without subsidy. This is a bit like the valuation of a business which includes ‘goodwill’ and ascertained as an accounting feature and does not represent true value as expressed on the P&L.
What is the goodwill value in the current market? I suggest that it is manipulated interest rates and the CHMC subsidy, both of which saddle the debt onto the taxpayer and away from the marketplace in which values are truly formulated by willing and able buyers and sellers.
Every application of socialism has failed historically. The burden on the individual becomes too excessive as revenues shink due to the lack of an incentive to produce goods or services ( aside from bullets and prison camps) in abundance. What you are describing is a pyramid scheme not a model of democratic government. Rather it is a grotesquery of the old Tommy Douglas model of coopertive insurance for the nation.
OK, we have Medical and EI, but does anyone really think that the government can artificially support and increase in real estate values ad perpetuum? If it is true that every new home buyer is withing 1% of being underwater in their mortgage currently will the government ‘chip in’ to refinance the second mortgages that will be legally neccessary when the Bank Act cannot support negative equity applications every time a refi comes up short?
In every experimaent of socialism the pattern is the same, the state becomes burdened with unsupportable costs and in turn removes the right to ownership from the citizen. Then there is the blood and the secret police period until the inevitable revolution. And all this blood loss was for what? So a few lazy shirkers could do less and get more while the diligent are stripped of their honest labour?
You would do very well at a labour or an NDP weekend. I always remember the words of Churchill who said
” If you’re not a socialist at twenty , you have no heart. If you’re still a socialist at thirty , you have no brain”.
And the keen words of W.A.C. Bennett
” Those assholes couldn’t run a lemonade stand”.
What the government is doing now is very short term thinking and the consequences will dig directly into your pocket by way of increased taxes, higher costs and less competition. The downward spiral has already begun from a macro economic perspective. All that money that you suggest comes out of the pocket of the ‘democracy’ is actually coming from where? Higher taxes equal fewer jobs, less economic activity and fewer prospects for your children.
I think the government sees this and is planning for it all. Many civillibertarians can also see it and are concerned about the encroaching state suspension of rights and an ominous development of a police state. But you don’t want to think about that and I don’t want ot rattle the clown master.
October 18th, 2009 at 12:34 am
Real Paul: I think there is something to consider re: the CHMC case. Assuming the CHMC = Government of Canada, the ability to bear risk is more robust than for individual banks that can be subject to runs. There’s an implicit diversification function by having backing from a pool of tax payers under a democratic system with property rights. This also lowers required returns since the overall risk profile is more diversified than otherwise (i.e. less). The government is the ultimate risk manager which can shepherd the economy to a improved state when things go awry (like we’ve seen over the past few months). What the government is doing is exactly what we need on a rainy day.
October 17th, 2009 at 11:57 pm
@logic: What do you mean by “not so”. I agree with the rest of what you say. She is lucky for both reasons (gets to be expropriated unlike some of her neighbours and gets to be expropriated at this time), and does not realize it.
October 17th, 2009 at 11:25 pm
X elise Says:
October 17th, 2009 at 6:32 pm
Last time the CAD shot up I bought at 1.10 and sold at .85
———————————-
Hope you declared the profit. We are watching.
October 17th, 2009 at 11:22 pm
86 = not so. She will get current maket value (ie: far more than it’s really worth), and thus be forced to sell at the peak. Good fortune for her really.
October 17th, 2009 at 10:07 pm
Why you never really own your home:
http://www.ctvbc.ctv.ca/servle.....lumbiaHome
Eight Coquitlam homes to be expropriated for the Evergreen Line. What Tang doesn’t realize is she’s one of the lucky ones. Other people around her won’t have the good fortune to be expropriated. Nope, they will get to wave to the passing Skytrain as they eat their breakfast. No more suntanning on the back deck, I guess.
October 17th, 2009 at 9:49 pm
A somewhat vague train of thought.
I was watching the news about how our internet broadband is slow and expensive when compared to many other countries (some surprising rankings). It got me thinking there is a pattern here. Our cell phone service is also not very competitive. For that matter, one could also say the same of our banking system. Closely related characteristics are a lack of transparency and accountability.
Although we seem to have weathered the financial crisis relatively well, I wonder if this is simply because of this lack transparency, accountability, and competitiveness in our market places. Namely, because our markets are not as free and efficient as in other countries, the effects are just taking longer to take foot and to be reported. And when they finally do, it will take us longer to get out compared to other countries for the same reasons.
October 17th, 2009 at 9:42 pm
@Depeche a la Mode: Depeche a la mode, do you think they mainly bought in prime areas like COV? Were they the nuts bidding well over a million for East Van houses? What a way to spend your holiday…messing with a real estate market across the ocean. Time for some laws on foreign speculation?
October 17th, 2009 at 9:04 pm
@Depeche a la Mode: You know, I wasn’t sure about that rumour. But now, yeah, I guess there’s some truth to it. No doubt it inspired a frenzy among local buyers too.
Could this be the blow-off top? http://www.answers.com/topic/blow-off-top
October 17th, 2009 at 8:14 pm
No Longer Looking 78 says: wonder what’s going on. I know its only one week, but this seems odd.
Golden week holiday, people from China buying SFH. This should be the week subjects are completed and closed.
October 17th, 2009 at 8:07 pm
@Gary: It works until it doesn’t. Or put another way. If it is clear to everyone that the bubble will persist longer than you think and people keep on buying on that basis, the parameters of the situation will simply move to a point where it is no longer clear the bubble will persist even if one thinks bubbles persist longer than they should. It is more like looking across a lake and realizing it is further than you think rather than a mirage which never can be reached.
October 17th, 2009 at 7:23 pm
@elise:
#76 E, If you see things as a tangled contiguous and synchronous web of macro socio economics the vagaries of politics and application are impossible to ignore as irrelevant in the larger scheme of things. Of course this is way too big for the deniers and bashers who find solace in the void. But do I care, no, not a whit.
This is the Socaratic method where the process of teaching is too push the limits of a students comfort zone by aggressive ‘in your face’ tactics until epiphany occurs. Either that or the student slinks away angry with a very sore ass, as was the case with Socrates. People are going to learn to accept the truth or they are going to continually wake up from a nightmare screaming for my head at 3 AM until they do. Such is life. Truth can be uncomfortable and making excuses about time and place is silly. This is not your mothers internet etiquette I know, but do I care….nope.
My read on the CDN/USD dichotomy is that the US is at war, as usual, with themselves. The Obama administration has picked up right where the Bush administration left off and will manipulate American society to its own ends. The USD will continue to be allowed to swoon until the late fourth quarter of the third year of the Obama term. This will drive up US exports and begin to balance the trade deficit while also growing the jobs numbers.
This is a media driven ‘sweet spot’ for the Dems to go into the fourth and vitally important ‘Presidential year’ will sugar coat the history of the administration with headline numbers which look positive. This is all a set up for the 2nd term Obama administration. I believe the Obama took the initiatives created for them by the BUSH administration. The Bushites were driving the population into fear and tension, and as such were much easier to control. Very Stalinist. The Christian crazies were actually in sight of the ‘end days’, resurrection and all.
It has worked out well for Obama as he inherited a population on shaky ground and desperate for leadership even though its only the voice of a decent speech writer through the mouth of a politically correct drone being. The population is on its back foot and reeling, seeing bug a boos and terrorists under every bed. Good set up for a totalitarian to take control and lead the sheep to safety.
Economically Canada is a headless chicken, powerless without the focus of direction comiing out of the USA. The USA has adroitly engineered a deflationary enviornment which will be set up as a ‘recovery’, Canada has foolishly done the opposite and price inflation is running uncontained ( food, real estate etc all up double digits)so that no recovery scenario is possible without even further cost escalation , taxes and higher interest rates.
This business exposed by Garth Turner regarding the Conservs trebling the risk to the taxpayer from behind the CMHC to falsely support a declining real estate industry should be treasonous but the condo drones will walk over a dead body to get a ten cent uptick on their assesments, such is the canadian no-mind set.
As I said, foriegners have to buy Canadian dollars to buy Canadian commodities, this will continue to put demand into the money supply forcing the dollar up through daily requirements for a finite supply of dollars. The bottom line is that the $CDN will continue to strengthen until the US decides to turn the tables.
I am not intending to give anyone investment advice.
October 17th, 2009 at 7:22 pm
For some reason there is a recent frenzy in “SFH” sales but not for condos:
http://www.nvcondos.ca/page_content-10.html
I wonder what’s going on. I know its only one week, but this seems odd.
October 17th, 2009 at 6:44 pm
@realpaul:
65
“Rio state Gov. Sergio Cabral grimly told reporters that Rio’s security challenges can’t be cured “by magic in the short term,” but he said money is being poured into programs to reduce crime and authorities are prepared to mount an overwhelming security presence at the sporting events to ensure safety.
“We told the International Olympic Committee that this won’t be an easy thing, and they know that,” Cabral said. “We can put 40,000 people on the streets — federal, state and municipal police — and pull off the event.”
-Looks like the only people attending will be the jailers. Would the 6 to 7 billion equivelant they pissed away here have ‘been poured’ into hospitals, schools and facilities where people could have some benefit? Its not like no one knows where Rio is because of the Carnival. They need the Olympics like a hole in the head. I guess a whole lot of Brazillians are going to die because of the Olympic sports business aspirations. What BS.
October 17th, 2009 at 6:32 pm
@realpaul: Thanks for the insightful and on topic comment. I come here for commentary like that, rather than the rants about police corruption (even though I agree with you on that topic as well).
Are many people here buying USD? I’m a bit foggy on how their deficit is going to affect the value of the the USD vs CAD going forward. I am taking advantage of some of the price discrepencies by shopping in the US right now, just not sure how much USD I want to hold for the next year or so.
Last time the CAD shot up I bought at 1.10 and sold at .85 which was a nice easy return. It was a bit of a fluke though, wondering if an oppourtunity like that will repeat itself again.
October 17th, 2009 at 6:28 pm
@other ted: “But I do believe Vancouver’s fake socialist economy allows many public sector workers to hang on to their jobs. Thus it will take interest rates to kill the market here.”
Well the money has to come from somewhere. From what I’m seeing the government is cutting back spending, not increasing it. There is a huge deficit but government revenues are down even more. It’s funny how the government cuts back in areas like health care and education on one hand then “stimulates” the economy with infrastructure on the other.
Apparently net budget cuts == stimulating the economy in BC. Don’t believe a word of it.
October 17th, 2009 at 5:00 pm
http://www.youtube.com/watch?v.....ature=fvsr
“You have a job and then you don’t even make enough for the sh*t you don’t even own…You don’t even get the pride of saying, ‘I have this job, and because I have it, I have this car’”.
Funny, sad and true.
October 17th, 2009 at 4:09 pm
@Anonymous:
Garth has more bad facts, should he die?
http://www.greaterfool.ca/2009.....ment-46712
October 17th, 2009 at 4:07 pm
RE: CHMC. This was originally posted on Chipman’s blog.
Yes, CHMC is a big scam. Thanks for the article and tips GG.
The insurance provided by tax payers through CHMC reduces the interest rate charged to people with low downpayment.
In short, this means that tax payers are takingon part of the ownership cost (interest) which should be paid by new homeowners.
Write to your MP and make yourslef heard. This is a scam and it won’t end well.
Once we hit the affordability ceiling (5% down, 40 years seems hard to strecth further) the whole domino will come crashing down.
The only thing left to do for politicians and buraucrats wil be to have a spurt of inflation, which hopefully will erase all nominal debts and liabilities.
Time will be our judge.
October 17th, 2009 at 3:56 pm
@rentah:
#61, R, it is obvious that the petulant failure of the Treasury auctions and the CSB rate are concerted actions to force international investors to look elsewhere. No one is going to accept .4% when competing rates are so much more attractive. Savings are currently paid 4.25% in Aussie for example. Anyone can buy Aussie bonds through the Forex dept of HSBC Singapore , applied for in any HSBC bank branch locally.
Boy, are the Canadian seniors ever getting screwed. Anyone expecting an inheritance is going to sucking up a dry straw the way the seniors are having their savings clawed back into taxable income just to pay the rent and put a bowl of macaroni on the table.
What the outcome of this is though is that Canada is having to raise funds through restraint and taxes whereas Aussie ( for example) has money flowing in from overseas. Canadians are the loser all around in the attempt to keep the $CDN below the USD. The $CDN is one of the worst performers against the USD, look at the Real, Peso, Rand etc for comparables.
The push by the Government of Canada to stop foriegn money flow into Canada is quite obvious. For why you ask. The deniers and the unionists will tell you that Canada will die without a weak loonie. Tell that to the specialized Scadanavians, the Italians or the Germans. All high wage countries based on specialized manufacturing.
The Canadian dollar is rising not because of faith in the economic prospects of the country but instead it is exchanged for foriegn currency as foriegn entities buy commodities in Canadian transactions. It has nothing to do with confidence. Consumption has created the demand not the good policies of the politicians. Foriegners are buying commoditities as alternatives to the USD. Its all about the real inflation that your government says doesn’t exist.
The ‘horrible’ prospect of raising interest rates will really put a damper on the governments race to the bottom aagainst the USD. The BOC I’m sure is desperate and frantic to see a recovery in the US to raise rates as quickly as they can. Our trade surplus is decidedly negative and the lack of investment is drainging the treasury and can only force up taxes and force a rapid cut in all services. When the BOC talks of halting the dollars rise with ‘Quantitative easing’ you should be howling at your MP to stop such idiocy. QE is the effective devaluation of your life savings and the permanent increase in your taxes that will erode purchasing power.
For all those anto patriotic Canadians shopping ‘across the line’ now good for you. It will put additional pressure on the government, probably by Christmas when the big retailers start to fail. For all those really bright Canadians who have been buying USD hand over fist, aren’t you the little smarty pants. This evidence is also being reported in the media ( CBC for example) and gutting the lies that the BOC has been putting out about the ‘confidence’ that CDN’s have with the economy. Like most other entities and agencies in Canada they hate being outed for their idiocy and nefarious deeds, they prefer to operate on the basis of an ignorant and complacent population of deniers and sheep.
October 17th, 2009 at 2:13 pm
“I’m starting to wonder if this flippin bubble will ever pop.”
One rule of bubble economics is…the bubbles always last longer than expected. It’s an interesting rule since even if everyone knows the rule, and adjusts their buying/selling behaviour to compensate for it, their adjustments actually reinforce the rule! I love it…
October 17th, 2009 at 1:31 pm
@gorky: #61
Well said. The point I was trying to make was that the poster should work through and understand the rationale of the arguments themselves, not to disparage the great discussion that happens here (which I’ve been following since the days of VHB). My comment was poorly thought out. Mea culpa.
October 17th, 2009 at 12:56 pm
Dave. I too live rent free, as the income from my savings pays my rent. And it took me much less than 35 years to put myself in this position.
Next fallacy please.
October 17th, 2009 at 12:56 pm
Reading Dave’s comments, I’ve decided the debate comes down to this:
Bears on Canadian real estate, Vancouver in particular, think that the economic *system* is out of balance and RE is implicated – that just because our bubble wasn’t structured in the same way or burst at the same time as the states’ bubble, doesn’t mean that it won’t, because fundamentally an economy with real estate at 400X rental multiples is a broken economy – like a pickup truck with one monster truck wheel and the other three normal.
Okay, say the bears, maybe it’s working right now – but the moment you try to corner the thing or take it above a certain speed it’s going to explode or flip the truck. It can’t be sustained.
This is what I believe: the economy’s hugely unbalanced, especially Vancouver, and we have a demographic bump, and a sustainability curve in the road coming that’d challenge a well balanced vehicle.
Bulls, on the other hand, don’t see a systemic issue. As far as I can tell they think, overall, the vehicle has just evolved, and that those of us who are pointing at the current economic vehicles as unbalanced just don’t “get” that things have changed. In the bullish view, bears expect a hovercraft to look like a 4X4. Sure, prices might drop a bit, as they do in every market, but we’re not seeing anything extraordinary, just the sign of something new, a new way of being capitalist.
Now, certainly, real estate isn’t held to one paradigm. Serfdom used to be the name o’ the game, for example; real estate was traded differently in those days. In some other place, private real estate isn’t run the way it is here – if you’re not using your lawn, someone’s welcome to farm it or build a house there. So, it’s possible that a new paradigm of real estate will show up.
Problem is, bulls aren’t talking about the larger economic SYSTEM. You can’t run a hovercraft down Granville St. Got to have infrastructure to allow it to function.
October 17th, 2009 at 12:36 pm
@Drachen:
Eventually those owners pay off their mortgage and after that, they are basically rent free for life.
Considering that you think this ‘bubble’ started in the early 80′s, I seriously doubt that you will ever buy.
The odds of real estate dropping 50% is close to zero.
October 17th, 2009 at 12:25 pm
@Salubrious Stan:
#41The link to my TD bank account (where the monthly deposits come from) is apparently “no longer active” despite no activity or change on my part…
++++++++++
Me thinks you might have an individual issue. My account at ING and external links all seem to be working fine.
October 17th, 2009 at 11:38 am
Olympic city welcomes oversight. lol
http://news.yahoo.com/s/ap/200.....Nob290ZG8-
October 17th, 2009 at 11:32 am
@No Longer Looking:
New credit is available to the desperate.
http://www.nbcsandiego.com/aro.....atrick.net
October 17th, 2009 at 11:16 am
“#43 Dave. Nice how you encourage the impulsive buying of real estate. ”
that’s why i could never shake the feeling dave is in deep with the RE industry in some way.
October 17th, 2009 at 11:07 am
#43 Dave. Nice how you encourage the impulsive buying of real estate. Some quality advice right there…that is if you got 500K to spare.
Fool.
#57 Skiff. Gosh even more of the brilliant advice. Well you go and trust the ‘economists’ and ‘RE specialists’ on TV, that’s fine. As for me I actually do trust a healthy non biased discussion between folks online (or any media for that matter) that back up their points by proveable facts and fundamentals and thus prove their expertise in the matter that way. I guess key is to find this kind of healthy discussion for the subject you’re interested in. This blog has had some good runs with lots of great points made backed by facts, with people arguing with fundamentals in mind, not using gut feel.
Skiff, i vote you the fool of the day. Go get he crown from Davie.
October 17th, 2009 at 10:55 am
@patriotz: Thanks for clarification request. Agree with your statements.
I was referring to the Bank of Canada’s sales of treasury bills, and the way in which the market automatically requires that we keep those rates attractive compared with similar bills issued by other countries.
So, even though ‘we’ (Canada the country, the Bank of Canada) may not like it, ‘we’ may have to raise rates to service debt despite a currently strong loonie.
October 17th, 2009 at 10:53 am
I stumbled on this article called The world’s best places to retire on MSN Money today.
Vancouver or Victoria are not on the top ten list, which comes to no surprise if you look at the list. I guess Vancouver will remain a coveted destination only for slave-factory millionaires who can freely come here to invest but not pay taxes. It’s a “Uin-Uin” situation for them!
Also, I thought “Everyone wants to come to Vancouver”! Wrong, if you read this article from “International Living” website. Everybody Wants to Come to Uruguay… And they got the hard numbers to back their claim, instead of some wane wishful thinking we see here.
October 17th, 2009 at 10:37 am
@skiff: Well, whose advice do you follow then? Realwhores? Homoaners? Banksters? Politicians?
Don’t follow anyone’s advice. Do your own research and make your own conclusions.
Myself, I made my decision in late 2006 when I returned to Vancouver after being away for many years. I decided not to buy then and I don’t regret it.
Why?
I was laid off a couple of months ago. Because I’m a renter, my expenses are low, cash is available and mobility is high. If I had bought, I would have shown some modest appreciation (but really the same as my GICs) but would have been crushed financially at this time. The appreciation would have only been on paper too, and would be partially eaten by realtors if I sold.
Nope, no regrets at all.
October 17th, 2009 at 10:04 am
@confused:
This probably goes without saying, but… while there is lots of interesting analysis on this site and others, you really should understand the reasoning for yourself. In the end, think how foolish you will feel if all these bears are wrong and when someone asks why you didn’t buy your answer is “I was following the advice of anonymous people on the internet.”
Even if you don’t buy and time the market perfectly and people are congratulating you on your real-estate savvy, the same words would still be kind of embarassing.
October 17th, 2009 at 9:29 am
http://tinyurl.com/yjqf66v
Good article from G&B about exponentially increasing balance sheet over at CMHC.
This summer’s boom financed and risk-transfered to you by your own government…
October 17th, 2009 at 6:49 am
@PorkyFlu:
Well the ticker symbol says it all doesn’t it.
Current price of 38.90 is near the 1-year high. Last winter you could get it for 25.55 . That’s when I was buying corporate bonds and preferreds. Buy low, sell high. One more thing – that’s a US ETF and you’re getting USD exchange risk on top of the default risk.
http://www.globeinvestor.com/s.....i_sponsor=
I do not recommend anything other than government insured deposits and bonds for those saving for a house purchase.
October 17th, 2009 at 6:34 am
@rentah:
Not quite sure who you mean by “we”. The bond market sets interest rates. The fact that you can get a VR mortgage for 2.65% or whatever means that someone is willing to lend money to the bank for less than that. That someone of course is bank depositors and bank bondholders.
What I’m saying is that “we” don’t set interest rates to attract buyers for debt, it’s the debt buyers themselves (depositors and bondholders) who determine at what interest rates they are willing to lend money. If they don’t like the market rates, there are other places they can put their money – foreign currencies, stocks, gold, yes even RE.
As to why debtholders are willing to accept such low rates, it’s because they are expecting the buying power of the CAD to remain very strong, i.e. they are expecting the CAD to strengthen versus the USD and consumer price inflation to remain low. If either of these turns out to be not the case, you will see a flight from the CAD and higher interest rates in short order. An oil price bust would bring on a decline in the CAD, for example.
October 17th, 2009 at 1:48 am
#52 the answer to your question is yes prices can fall quickly with low interest rates just look south of the border. But I do believe Vancouver’s fake socialist economy allows many public sector workers to hang on to their jobs. Thus it will take interest rates to kill the market here.
But I do believe that higher rates are coming. The big news today is the US made it official that the defit was 1.4Billion for 2009.
October 16th, 2009 at 11:59 pm
@confused: “but must admit I am becoming frustrated. “
If prices fall significantly in the next few years it will likely be coupled with higher interest rates. If you have cash on hand you’d make a killing but if you need financing to buy, you won’t be much better off on a cash flow basis compared to what you would experience today.
Or we could end up like Japan but the property market deflated over decades, not in a few years. Can prices fall significantly and quickly when interest rates are low? We’re about to find out in the next few years.
October 16th, 2009 at 11:27 pm
“More than a few years have past since you suggested to “wait a few years” for the correction”
Oh, just wait a few years more. And then maybe a few years, and … ok, a few more years after that….
Irrationality is going to persist longer than you can wait. You are a renter and there’s nothing wrong with that. You have actual bankable tappable capital. Enjoy.