Real-estate market 'almost at a crisis situation'

[skypilot]

Much depends on when/if foreign money just switches from Vancouver to TO and or proxy buyers are rampant.

It will definitely adjust, as prices will out strip income/investment. Whose income is the question. Will it be from the Income from Canadians(affordability) or investment from foreign buyers. Regardless, sooner or later prices reach a point where demand, availability, pricing, ability to pay reach a maximum.

Whatever you do don't buy Genworth or Home Capital stocks. They are forehead deep in subprime mortgage loans. If things go bad they are holding "bad" paper.

The BIG red flag on home ownership is exactly what we are posting about....there is NO sane reason for housing to be this unaffordable to the vast population. So ANYTIME something is this far outside of normal, basic mortgage fundamentals, it is hard to predict, but potentially dangerous.

Even more so if this is a major, one shot, lifetime investment that if it goes bad, will have everlasting and likely unrecoverable consequences.
Other side is, there is no potential appreciation being taken advantage of.

It's the same old problem of when is the proper/optimum time for you to jump into an investment.

Lots of Canadians are pissed about the unaffordability of housing and it hurt Harper. I heard him state he wasn't going to get involved in the skyrocketing home pricing. He lost my support at that point.

[JBen]

He brought in some steps back around 2009-2010 by killing the old 40yr Amortizations, believe it was him that put an end to zero down, and there have been many changes in our industry ( some instituted by the Feds, some by our regulators be they OSFI, or banking regulators, or even those abroad like FATF and Basel) because it all is so deeply intertwined). When the German authorities seized our German Office ( trumped up tax evasion money laundering that were entirely retroactive...what was legal in 2008, was made illegal in 2012 and they went after many "banks). Little ole us were made examples of. They didnt realize that by cutting the one office off it would trigger a death spiral in bankruptcy and touch more than just us. Word we got was they were shocked...( lol great, the people who should have known.....). So they circled wagons and tried to make sure German depositors weren't touched ( kinda like Greece)....Authorites here circled wagons too and kinda said "fu". Some aspects are still before the courts.

Ontario Teachers Pension Plan was, as was National Bank. Thankfully despite what we did and numbers would shock people....we are nothing, not even a drip in the ocean. They both had to set aside hundreds of millions for write downs....

But our bigger institutions......."if" it goes south, well the far ranging effects are way beyond me. Deep dark cave.

Other changes that pertain to auditing/capital reserves, etc. But enough?
Well fast forward to today.

[JBen]

Really dont want to bore people to tears but these things relate, to so much.

If remotely interested, skim through some of this. Its a basic overview. I dont recall just how large the market is anymore, but its way more than banks have in cash/gold etc. In fact if everyone panicked and tried to sell/cash in just their Mutual Funds tomorrow, the banks wouldnt be able to get the cash.

http://www.fincad.com/resources/reso...it-derivatives

Does all this relate? Yes.

For the average home buyer who for whatever reason finds themselves in the RE market. Do everything you can to avoid bidding wars (most of it covered). What does it mean going forward. So many variables, population growth, economic growth, more. But as R said, the fact few "experts" can agree on what's driving it.....red flag

[poltrojan]

Thanks for the kind words guys, encouragements and understanding. Right now I will be focused more on wedding and paying off any debt that we have (cars, loans. etc) before we can actually focus on even putting a down payment on a house, still 20% in today's market? could be between $50-200k. Right now one of our family friends who is going to list his house, we know they bought it for around $500k and its less than my parent's in square footage in size. The agent had it quoted at $1.2 million... in less than 6 years? Jesus. My parents that bought this house in 2010 got it for $350k...a nice bungalow about 1500 sq ft; the houses in my neighbourhood had been selling for $750k minimum and that was last year early March in 2016. My next door neighbour (retired) will most likely downsize within next two years since the house is too big for her.

Right now, my fiance and I unfortunately will have to rent out the co-ed apartment for now, while I have to find a storage unit to store my tools, equipment.
I spoke with my friend who is in RE; he said he would prefer to sell more houses at lower costs that were 10 years in affordability range rather than now with all the bidding wars and overprice market. He doesn't like it when there is so many people trying to obtain a sustainable house to live but can't afford to.

[BIG MAC]

Was talking to my son in law in Windsor on the weekend, we hope to moving there soon and the houses are starting to rise in price there as well, most places are now Multiply offer, what he mentioned was working in downtown Toronto and buying a house in Windsor, nices houses going for $350, - $400, range and then flying back and forth every day with Porter arilines. he said it was about a 1/2 hour flight and that they had
packages that went for $20,000. for the year for your flights. might be better than fighting the traffic to Oakville, Burlington and living in that 1.2 mil home that is the same size. Sure these are options some people are going to have to face in the coming days. anyone who bought a house in the mid to late 90's probably made a GREAT return on their investment. know we would never have made this much money investing anywhere else. Good Luck out there. Scary time to be buying a place in the GTA.

[last5oh_302]

The place I'm bidding on closes this evening. There are 7 offers registered so far. I'm going 81 grand over. Can't afford to lose it at this point. Yikes!

[Bluebulldog]

Was talking to my son in law in Windsor on the weekend, we hope to moving there soon and the houses are starting to rise in price there as well, most places are now Multiply offer, what he mentioned was working in downtown Toronto and buying a house in Windsor, nices houses going for $350, - $400, range and then flying back and forth every day with Porter arilines. he said it was about a 1/2 hour flight and that they had
packages that went for $20,000. for the year for your flights. might be better than fighting the traffic to Oakville, Burlington and living in that 1.2 mil home that is the same size. Sure these are options some people are going to have to face in the coming days. anyone who bought a house in the mid to late 90's probably made a GREAT return on their investment. know we would never have made this much money investing anywhere else. Good Luck out there. Scary time to be buying a place in the GTA.

Now that's an interesting idea....

20K per year amounts to $1600 per month.

I wonder what some folks who have a 5 hour round trip commute spend? The G&M just did an article on Shelburne ON ( Just North of me), where there are in fact people commuting into downtown TO.

$400 per week in airfare that puts you essentially right downtown......

[JBen]

The place I'm bidding on closes this evening. There are 7 offers registered so far. I'm going 81 grand over. Can't afford to lose it at this point. Yikes!

, good luck R, hope you get it, but its exactly just some of what I've been speaking to. That and ultimately how it changes peoples physiological behavior ( not necessarily you), and the longer it goes on, the more houses lost out on ( need to reset each Monday) the worse it gets. The RE industry shoulders a lot of this blame ( greed).

That said, know a few agents myself. Dont be thinking a lot of agents are rolling in the dough. Yeah their commission structure is stupid. But these days theres nowhere near enough inventory. So if an agent is getting a lot of listings on the sell side, yeah some might be getting filthy rich without having to do any work. List it and boom its sells for X% over and the more it sells for the better their payout.

Demand>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>Suppl y.

Most agents are breaking their backs on the buy side. Taking clients to multiple showings a week. For many weeks. Driving all over the place, taking their clients to places all over the place....Spending hours driving, showing houses, getting ready for the Monday night war...
"Sorry, try again" we start from scratch Wednesday.


Fear and greed are extremely powerful influences and colour a lot of the way we go about things.
**************

Im 10 minutes from Lindsay, quite a few of the people in this little pocket make the drive into Scarborough, Markam every day at 4-5am.....St Cats, Bethany, Newmarket, Port Hope....
Some take via rail from places into Union Station.......and have for years.

/sigh
Guess thats what happens when planners, politicians, (and not just today's) put all their eggs in one basket. The Golden TA

[skypilot]

Now that's an interesting idea....

20K per year amounts to $1600 per month.

I wonder what some folks who have a 5 hour round trip commute spend? The G&M just did an article on Shelburne ON ( Just North of me), where there are in fact people commuting into downtown TO.

$400 per week in airfare that puts you essentially right downtown......

83 bucks and change a day for round a trip from Windsor to TO and only a half hour? Sounds like a deal to me if the duckies are right.

[last5oh_302]

, good luck R, hope you get it, but its exactly just some of what I've been speaking to. That and ultimately how it changes peoples physiological behavior ( not necessarily you), and the longer it goes on, the more houses lost out on ( need to reset each Monday) the worse it gets. The RE industry shoulders a lot of this blame ( greed).

That said, know a few agents myself. Dont be thinking a lot of agents are rolling in the dough. Yeah their commission structure is stupid. But these days theres nowhere near enough inventory. So if an agent is getting a lot of listings on the sell side, yeah some might be getting filthy rich without having to do any work. List it and boom its sells for X% over and the more it sells for the better their payout.

Demand>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>Suppl y.

Most agents are breaking their backs on the buy side. Taking clients to multiple showings a week. For many weeks. Driving all over the place, taking their clients to places all over the place....Spending hours driving, showing houses, getting ready for the Monday night war...
"Sorry, try again" we start from scratch Wednesday.


Fear and greed are extremely powerful influences and colour a lot of the way we go about things.
**************

Im 10 minutes from Lindsay, quite a few of the people in this little pocket make the drive into Scarborough, Markam every day at 4-5am.....St Cats, Bethany, Newmarket, Port Hope....
Some take via rail from places into Union Station.......and have for years.

/sigh
Guess thats what happens when planners, politicians, (and not just today's) put all their eggs in one basket. The Golden TA

Thanks JBen. My agent just called. There are 11 registered offers in now. Crazy!!