Waiting for the right price

Paulb and paintedturtle pointed out this article in the Globe and Mail – Housing Affordability: the great quandry.  Why there’s time to wait for the right home at the right price.

The one city to worry about if you’re a homeowner is Vancouver, where normal mortgage rates would have resulted in the typical household spending 78 per cent of its income to carry a bungalow, just shy of the peak level.

History shows that it’s impossible to accurately predict short-term movements of house prices – markets regularly overshoot rational levels both on the way up and the way down. What we can say is that based on current affordability, if house prices do continue to escalate, at some point they’re almost certain to correct back down.

That means there’s no rush to buy and time to wait for the right home at the right price – and that for the next while at least home buyers should evaluate houses as places to live rather than on their potential for appreciation.

Ok. I see what’s going on here.  The Globe and Mail has worked themselves into a jealous rage because our properties are worth so much and are trying to talk down our market.  It won’t work guys.  We know better than that, we evaluate property purchases based on how much a month they cost with record low interest rates and pencil in 12% increase in prices each year.  Everybody knows prices never drop in Vancouver.

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buffates
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buffates

My wife's friend is a new homeowner (last year and a half). They rent the basement, have a newborn, they both work (grandma looks after the kid). She says that she privately cries every night alone because she is so petrified they're going to lose the house. If that's the case with these two then how many Vancouverites are out there a half a paycheque away from tanking?

auditnerd
Guest
auditnerd

@buffates

A house is a possession. If you can't afford it, you lose it. Nothing to cry about, provided she has enough to make rent. Some individuals emotionally attached to 'things' beyond all reason.

I was watching that vile "Property Virgins" show the other day. There was a young couple in Miami who bought a house at the absolute maximum they could afford. When the estate agent gave them the keys the female started crying and they went on about how happy they were to have bought. How absurd. Either you buy or you don't. Why cry? Why the happiness? The propaganda from banksters and other industry parasites has completely fried our minds. Oh, I'm so happy, I own half a million dollars!!

auditnerd
Guest
auditnerd

Should be "I owe" and "become emotionally attached".

Haven't had my am coffee.

Anonymous
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Anonymous

If a guy from Toronto says it's a problem… Where was he a year ago 🙄

Lilypad
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Lilypad

@buffates: Hey Buff: Imagine how it would feel for a family who doesn't have Grandma to look after their little one — they have to pay upwards of $1000 – $1600 per month for daycare!

macchiato
Guest
macchiato

Gov Cad 5yr is getting juiced, yield now down to 2.89%, might be a bit quick to call in the increase in rates, that being said, the market did collapse under its own weight in 2008, so maybe higher rates aren't required.

VRENGD
Guest
VRENGD
@buffates: I have a similar story. My sister is a doctor. Yesterday she had a patient who said that he and his wife work seven days a week and can't afford asthma medication for their son because they bought a house. They buy enough medicine to treat half of the son's asthma attacks and go to emergency the other half of the time. There are two things to note from this annecdote. First, this person and likely many others make extraordinarily stupid decisions. Why doesn't this family rent for 1/3 the monthly cost and buy medicine for their son (and take him on a nice vacation every year). Second, the family's stupid decision to own a house is being subsidised by the taxpayer through the family's increased use of the healthcare system. People are sacrificing everything to own. Many homeowners… Read more »
Dan in Calgary
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Dan in Calgary
Lilypad wrote, "@buffates: Hey Buff: Imagine how it would feel for a family who doesn’t have Grandma to look after their little one — they have to pay upwards of $1000 – $1600 per month for daycare!" After we sold in Cloverdale (at a loss) and moved to Vancouver, we didn't have the money to buy a new house because of the price differential. We had a sick child who required constant care from a live-in caregiver (whom we paid generously, btw). So we couldn't afford to buy. Oh well, life's just like that. We rented, and I learned (again) that rental houses require less of my energy than the house we "owned" and which had taken over my life. auditnerd wrote, "A house is a possession. If you can’t afford it, you lose it. Nothing to cry about, provided… Read more »
joycer
Member
joycer

@macchiato:

The market is getting juiced by debt fears… probably nothing to worry about (or cry over) in Vancouver. I'm sure the last 5+ years have all been cash buyers and rich asians ;).

Dan in Calgary
Guest
Dan in Calgary

Followup to my own post: when we left Vancouver, we had been renting a Cambie-area house that had seen some limited (former) grow-op experience. Leaking roof, rotting deck, rickety back stairs, moss-infested lawn, garden full of weeds. Rent + utilities was about $2000/month. The new tenants would pay about $2200/month for rent alone. Vancouver sure is overpriced for "rent" or "own".

Best place on meth
Member
Best place on meth

@macchiato:

Temporary dip in the yield, nothing goes straight up.

With sovereign debt being the issue of the next decade, yields will keep climbing long term.

freedom
Guest
freedom

VRENGD: "Yesterday she had a patient who said that he and his wife work seven days a week and can’t afford asthma medication for their son because they bought a house. They buy enough medicine to treat half of the son’s asthma attacks and go to emergency the other half of the time."

Just show what we have become when we are propagandized by the political and financial class in this country. We do not have FREEDOM to even TO THINK clearly in this country. Welcome to serfdom.

ulsterman
Guest
ulsterman
Today's story on cknw about the Irish housing bubble and 1 in 5 houses now empty is very topical for me. (1) I'm Irish (2) I believe we have a bubble here (3)I'm severely bearish on the BC market. Like many here the market has remained solvent longer than i can remain publicly bearish. I'm now in the closet – been wrong so long that i make only neutral comments when the inevitable real estate conversation turns to "but we are different here". My worry is this. In the Irish example referred to on cknw, 1 in 5 houses are empty. Entire housing developments have become ghost towns. The Irish economy is on the edge of bankruptcy and Ireland is one of europe's economic PIIGS. HOWEVER, after 2-3 years of this calamity, prices are down maybe a 1/3. My concern… Read more »
painted turtle
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painted turtle

@buffates

You said:" … have a newborn, they both work (grandma looks after the kid). She says that she privately cries every night alone because she is so petrified they’re going to lose the house. "

In my opinion, this is postpartum depression. It can be triggered by the fact that SHE HAS TO WORK and leave the newborn with GRANDMA, in order to repay the mortgage. She might be confusing this house with her nest… For me, she would be much better off without the mortgage, being allowed to stay home with the baby in a nice cute little rental apartment.

Dave
Member
Active Member

@ulsterman:

I don't think you can make the same analogies with our market. Having 1 in 5 households empty in the Lower Mainland is impossible. The vacancy rate is very low and new inventory is a small percent of the overall market.

Realpaul
Guest
Realpaul
#1 B, will it come to this? I've seen it before here and I'm sure it will happen again. CMHV has increased their default war chest to 1.3 billion, its like they are stocking up for the inevitable. http://www.toledoblade.com/apps/pbcs.dll/article?… Hey if people who were 'qualifying' for mortgages at 1% can't afford two percent theres going to be a lot more sleepless nights. The post about parents not being able to afford athsma meds for the kid, is typical, heard it before. This news is not popular on the TV news circuit, but happens all the time. Daycare expenses and and afterschool sports programs are killing a lot of happy homebuyers. I know from what I have been told that sports programs are way down because parents can't afford the fees. I saw a story from Toronto where hockey registration has… Read more »
Rob A.
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Rob A.

"The Globe and Mail has worked themselves into a jealous rage because our properties are worth so much and are trying to talk

down our market."

I think that this statement is way wrong. The globe and mail is a reputable publication.

vreaa
Member

In response to threats of legal action from a local realtor, we have taken the unusual step of taking down a post at VREAA.

The post 'Bears Take It To The Streets – "Vancouver Housing Bubble Ready To Pop!" Signs In Downtown Core' (30 April 2010) showed images of the recent campaign by unknown individuals to publicize the Vancouver RE bubble via signs on lampposts and stickers on realtor signs. The realtor objected to the images of the stickers on realtor signs, arguing that by posting these images we were inciting individuals to break the law.

More here:
http://wp.me/pcq1o-OQ

VRENGD
Guest
VRENGD

@vreaa: If you are publishing photos of what is going on, like a news magazine, you are not liable for anything. MOreover, you can't be sued for inciting someone to break the law (which you are not doing anyway).

Purp1
Guest
Purp1

Dave says "…I don’t think you can make the same analogies with our market. Having 1 in 5 households empty in the Lower Mainland is impossible…" — not sure why this is voted down (besides being Dave). It's clear that as a whole the lower mainland is not as overbuilt as some of the bubblier markets. But what about the downtown condo-land. 1 in 5 is likely there…heck it's probably already the case!

freedom
Guest
freedom

@vreaa:

They are just brutally threatening you. Be careful, some realtors are behaving like mafiosi. The whole industry is corrupt to the bone.

/////////////

Hey VancouverGuy, I have been debating with you about lack of FREEDOM in our cities and country. Where is our FREEDOM of SPEECH in this case when we can not even report what is happening in our community. It is not like that housing bubble is some kind of taboo in Canada like female driving in Saudi Arabia. Or is it?

logic
Guest
logic

I think Dave was voted down because NO ONE was making such an analogy. Dave was shooting down yet another straw man.

Oh, and also maybe because he's an idiotic troll. 🙂

asalvari1
Guest
asalvari1

@vreaa:

wtf ? Take Down ?!? Its part of the history!

can you change the text and instead of promoting this behavior, state that is unacceptable and vandalism.

As fellow citizen that cares for his/her citizens you are just reporting another case of vandalism.

Please, don't take it down, just add comment that is unacceptable.

asalvari1
Guest
asalvari1

@asalvari1:

another way is to post the name of that Realtor, and we can all call him to check on his services to purchase our properties asap.

paulb
Member
Active Member

My buddy a Realtor just sent me this:

"High Listing Volumes in MLS

The MLS department is experiencing an extremely high volume of

listings at this time. MLS staff are working as late as 9 pm, whenever necessary, to ensure that all listings are entered within our 48-hour commitment. There are also many new listings being entered by Broker Load offices. For this reason, we ask that you always allow one extra day when searching for new listings."

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