Real-estate market 'almost at a crisis situation'

[trimmer21]

My TD Canada Trust loans officer neighbor tells me 70% of young clients are mortgaged to the eyeballs relying on real estate to continue it's growth to build equity in property to offset liabilities and have credit card debt accumulating from only making minimum payments every month. Man,this can't be good going forward,no matter which way it's sliced.

[Fisherman]

My TD Canada Trust loans officer neighbor tells me 70% of young clients are mortgaged to the eyeballs relying on real estate to continue it's growth to build equity in property to offset liabilities and have credit card debt accumulating from only making minimum payments every month. Man,this can't be good going forward,no matter which way it's sliced.

You got that right and when the "correction" occurs or "bubble bursts", there will be a lot of hurt. Then it will be time to buy. There are far too many people buying homes that are out of their so called approved budget. No one really needs 3000sq/ft homes. It's a waste of heat and hydro right from the start.

[JoePa]

Boy when you look at the cost of things in Ontario compared to down here one wonders how people make it - the exchange rate now is approximately 1 American is worth 133.5 Canadian - if a piece of land is for sale say at $300,000 I would be paying $225,000 for it - comparing prices of selected items in stores like Home Depot, Target and Cosco one finds that the same item costs from 20% to 40% higher in Ontario - then if you have to live anywhere near the GTA the cost of houses are 2 to 3 times higher for the same size house - gas is so much more expensive - how are you able to get along - saw a video of Canadians coming down to a border town in New York and just about emptying the shelves because of the cheaper food prices - maybe its time to start thinking of moving -

[BIG MAC]

Well experienced first hand this weekend in Windsor what is happening in the GTA. Bungalow Listed at $279,000. probably low on purpose, well it attracted 12 BIDDERS, ( as to me you are not making an offer you are bidding on a place ) and it ended up going for $62,000. over asking and probably needs $40,000. - $50,000. needless to say we are now as J Ben stated starting to look again this week to place our BID next week. as I said to my daughter even if you get the house your not sure ir you WON or LOST. Sure investors have started to move to this area to invest their money . andif the bubble does burst they don't lose as much...........HAPPY HUNTING , Glad I went ice fishing yesterday so didn't have to sit around and wait for the news. our agent was totally shocked and she said she figures we didn't even come in second as someone had a cash offer of $325,000. and was shocked as well.

[JBen]

Jeez another caught in the insanity. Sorry to hear you to are caught in it BM.
I seem to be having friends over at the right times. A friend of mine is an agent ( not my agent, just a friend thats a good agent) and was over last night. Like us, he got out of dodge last year, moved to Lindsay in the fall. One of the things talked about, and like this thread we covered everything. From what it's doing to our children (he has kids to), to reverse mortgages, people without pensions, job markets etc. Basically this thread.

His office, stats are saying buyers are having to put in an average of 10 offers before they throw everything they can at something to get it. My agent last year was saying their office was 13. So for all intents and purposes doesn't look like much has changed on that front.

BM, as mentioned earlier in the thread to Rick. It helped us some, hopefully it can help you. As your looking at places online tomorrow-thurs ( the new listings). Print the ones off you want to see in three piles.
Monday Offers
Tue offers
other.

Ideally your #1 place is a place that
A) Not holding offers but you can expect the normal 24 hours non revocable...This basically ties your hands for those 24 hours once an offer is in, but you can avoid the bidding wars. Its how we got this place

B) Or is accepting offers on the Tue. You will still be up against other buyers that lost out on Monday....if they are mentally prepared with their Tue back up. Many aren't, especially wives. They get their heart and hopes up for one they are bidding on Monday, and if they don't get it are crushed and frustrated, not really to go right back in Tuesday. Basically it can reduce the competition......

C) Mondays. If your #1 choice is accepting on the Monday, try as much as you are able to avoid places you just know will get into multiple offers. Either because its close a school, has blinded out kitchens/baths ( lots of people want turn key, not willing to wait 6 months or a year to do a reno, or DIY) etc, etc. Basically you just know there are going to a lot of offers for it....Let people beat each other up, while you find the sleeper.

Good luck BM, sincerely hope the stress doesn't sideline you for a long time, nor reduce your family to tears.

[BIG MAC]

Yes, we are back looking at places today , doesn't effect me as much as it does the wife that is for sure. I don't even get excited while sitting at the realtors office signing all the paperwork. we also have to shift gears to include Raised Ranches as well as Bungalows realizing that for every 50 or so raised ranches 1 bungalow comes up on the market. we are lucky in we have time on our hands but looks like the GTA prices are rising weekly in Windsor. Sometimes hard to make a point to the wife when we offered X amount of $ last year on a house but it was $ 7,000. below asking and on Kijiji to boot ( so the seller wasn't paying a nickel in Realtor fees ) to losing out on this one at a lower $ # even though we where $ 40,000. over asking price but this asking price was $90, 000 lower than the other house . So I said no matter what the house is listed at we should just say here take this top # we had last year and throw away money. I'm sure the house will come along as the # of houses coming onto the market will only increase in the next few months. I would suggest to anyone who has an extra Million $ laying around to invest it in real estate in Windsor, Ontario's next hot spot, get in while the getting is good.

[poltrojan]

... fvck this. i'm staying out of this race. no point in stressing out after the wedding. jesus. Honestly I'm praying for a "bubble" or at least some kind of large tax against foreign investors in real estate to kill it off; especially empty houses on hold for investment purposes. Houses are meant to shelter people and provide safe refuge not a stress killer. There are at least 2-3 empty houses on my street, fvcking salesman bought them and renovated last year for this year summer sale.

[Fisherman]

... fvck this. i'm staying out of this race. no point in stressing out after the wedding. jesus. Honestly I'm praying for a "bubble" or at least some kind of large tax against foreign investors in real estate to kill it off; especially empty houses on hold for investment purposes. Houses are meant to shelter people and provide safe refuge not a stress killer. There are at least 2-3 empty houses on my street, fvcking salesman bought them and renovated last year for this year summer sale.

I know somewhere(Florida ?) they have a non occupancy tax to discourage this. Maybe we need it too.

[trimmer21]

I know somewhere(Florida ?) they have a non occupancy tax to discourage this. Maybe we need it too.

The City of Vancouver is now using this. Taxes are very high and it's very effective. A good barometer of pending market 'corrections" is to watch sales of vacation properties. When finances start getting tight,people dump these on the market to off set mortgages that are coming due at term should interest rates start to rise.

[MarkB]

I know a guy who sold out in the late 90's thinking there was a bubble, and he sat and waited to buy back in. He was sure sorry when it didn't happen.

The banks know people are in over their heads. So does that government. They won't raise interest rates unless they are forced to.

We have a massive immigration challenge, people need houses.

There's a lack of property to build, especially homes with cities now pushing high density.

I am concerned about the high prices, but I'm not convinced there's going to be a bubble bursting.