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Thread: real estate..... is it true??

  1. #433
    If inflation hits with all the money being flooded into the system then interest rates could rise.

    That could become a factor in this.
    I endorse Senator Bernie Sanders for President in 2020.

    It is my hope Tulsi Gabbard becomes his running mate.

  2. #434
    The government believes that at this time 25% of businesses are in big trouble having to shut down, and 33% of people that are not working have no savings. As the shut down stretches out more businesses are getting into trouble, and more people are getting deeper in debt. This shut down of society will continue at least till May before be start to return to normal, it may even be a month or two longer than that. How much savings will have been eaten away even if the shut down is short. It will take years for us to get back to a point where we were two months ago. How many people will not buy their first home or buy it many years later than they planned to. This covid-19 crisis has diminished the ability of people to buy and diminished the value of housing.


    Ceiling Cat
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  3. #435
    Quote Originally Posted by Smallcock View Post
    omg this article was amazing, thank you smallcock!
    PRIVATE LENDING! I can't wait to be able to dabble in that in the future. Can you imagine - purchasing mortgages!? Aha!

  4. #436
    Quote Originally Posted by FlorenceYi View Post
    omg this article was amazing, thank you smallcock!
    PRIVATE LENDING! I can't wait to be able to dabble in that in the future. Can you imagine - purchasing mortgages!? Aha!
    This is what caused the 2008 crises. Selling bad debt off to investors.
    I endorse Senator Bernie Sanders for President in 2020.

    It is my hope Tulsi Gabbard becomes his running mate.

  5. #437
    Insiders at all the major banks are already writing off a minimum of 20% value on real estate across Canada. Interestingly the numbers they project are worse for Toronto as there seems to be the least amount of traditional savings built up in this major metropolitan area. Small business owners are being completely wiped out and left negotiating with commercial landlords for 30cents on the dollar.... if they don't just walk away and face future law suits.
    Toronto is facing at least 30% drops in market values sustaining for up to 2-5 years. That should provide a healthier balance of buyers and sellers in the long term.

    I agree with most optimists that our real estate here in the "6" will be fine. It will just be very much deflated for a just few years. It's unfortunate for those who have purchased homes in the last 5-10 years. Their equity will be wiped away.

  6. #438
    Quote Originally Posted by wonkyknee View Post
    Insiders at all the major banks are already writing off a minimum of 20% value on real estate across Canada. Interestingly the numbers they project are worse for Toronto as there seems to be the least amount of traditional savings built up in this major metropolitan area. Small business owners are being completely wiped out and left negotiating with commercial landlords for 30cents on the dollar.... if they don't just walk away and face future law suits.
    Toronto is facing at least 30% drops in market values sustaining for up to 2-5 years. That should provide a healthier balance of buyers and sellers in the long term.

    I agree with most optimists that our real estate here in the "6" will be fine. It will just be very much deflated for a just few years. It's unfortunate for those who have purchased homes in the last 5-10 years. Their equity will be wiped away.
    If real estate values drop by 30%, that would only wipe out equity built up for the past 2 or 3 years.


    "...for the first time, in that night alive with signs and stars, I opened myself to the gentle indifference of the world. Finding it so much like myself—so like a brother, really—I felt that I had been happy and that I was happy again. For everything to be consummated, for me to feel less alone, I had only to wish that there be a large crowd of spectators the day of my execution and that they greet me with cries of hate."

  7. #439
    Quote Originally Posted by Smallcock View Post
    If real estate values drop by 30%, that would only wipe out equity built up for the past 2 or 3 years.
    That's true in some parts. There's a wide range, and yet how quickly are most to spend their equity, on another property, or on a toy, or a car, or a vacation? No one wants to see finances fall apart, but whether you are extended on the stock market or with your real estate it never ends well in a crisis. And with all the studies of how Canadians would fair missing a monthly paycheque, we'll now see how that works over 3-6 months of greatly reduced income in a massive percentage of households.

  8. #440
    Quote Originally Posted by Butler1000 View Post
    If inflation hits with all the money being flooded into the system then interest rates could rise.

    That could become a factor in this.
    I don't think the conditions are ripe for structural inflation across the economy. Interest rates, ehhh. There's nowhere out there for people with money to earn a high return. That's generally how interest rates go up in mature economies.

  9. #441
    Flooding an economy with cash can create inflation. Problem is there is no economy. The flooding of cash is soley for survival during the shutdown

  10. #442
    Quote Originally Posted by WyattEarp View Post
    I don't think the conditions are ripe for structural inflation across the economy. Interest rates, ehhh. There's nowhere out there for people with money to earn a high return. That's generally how interest rates go up in mature economies.
    It's already happening in grocery stores.
    I endorse Senator Bernie Sanders for President in 2020.

    It is my hope Tulsi Gabbard becomes his running mate.

  11. #443
    The realestate market is dead.

  12. #444
    Quote Originally Posted by Bigdaug View Post
    The realestate market is dead.
    ............it is dead for now, if you own property it will be worth something in the future.


    Ceiling Cat
    A.K.A Van Helsing - Cackler Killer

  13. #445
    Quote Originally Posted by Ceiling Cat View Post
    ............it is dead for now, if you own property it will be worth something in the future.
    True. I can't see values dropping by more than 30-40% and then recovery could be within 3-5 years if we go by the model during the financial crisis. This time U.S. prices will recover more quickly and Canadian values will take longer to recover. Canadians this time were caught further stretched and leveraged.

  14. #446
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    Quote Originally Posted by wonkyknee View Post

    I agree with most optimists that our real estate here in the "6" will be fine. It will just be very much deflated for a just few years. It's unfortunate for those who have purchased homes in the last 5-10 years. Their equity will be wiped away.
    imo, house prices will remain stagnate (no change) in the '6' , if this bug recedes, we may see another increase this year



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  15. #447
    Quote Originally Posted by malata View Post
    imo, house prices will remain stagnate (no change) in the '6' , if this bug recedes, we may see another increase this year

    Is the opinion based on anything? If incomes are drastically reduced, and mortgages increasing with deferred payments. Many businesses are closing for good. Airbnb is decimated. Why would home prices in Toronto increase? Keep in mind prices dropped 2 years ago with just a small increase in mortgage rates.

  16. #448
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    Quote Originally Posted by wonkyknee View Post
    Is the opinion based on anything? If incomes are drastically reduced, and mortgages increasing with deferred payments. Many businesses are closing for good. Airbnb is decimated. Why would home prices in Toronto increase? Keep in mind prices dropped 2 years ago with just a small increase in mortgage rates.
    you're referring to two different things. i'm specifically referring to detached houses and not condos or airbnb rentals. supply is still tight and the gta is a world class city with plenty of buyers with money to absorb the market. mortgage rates have dropped since this pandemic and though house prices have decreased slightly the last 2 years, it has gone up slightly to almost break even



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  17. #449
    There a tons of detached houses being used as Airbnb rentals? I've stayed in a few myself that are no longer available today. How do you separate the two? Detached homes are owned by thousands of people who are being hurt by the shut down. Incomes are down. Hundreds of businesses are shutting down permanently. A good number of job losses will be permanent. Lower interest rates haven' changed fixed rate mortgages. Hence the name fixed rate. People have to make up deferred utility payments and property taxes later this year. Savings are being wiped out. Lease payments need to be made up. Sure there are people who can survive all of this, but expecting a bull market and higher prices in Toronto with 4-5 headwinds is pretty optimistic when all it took was 3 interest rate hikes 3 years ago and the market stalled completely and prices dropped.
    All you say is true and bodes well for the long term, but markets go up and down, and with 4-5 pretty tough head wind in the face of all Real Estate markets make it hard to be bullish...very hard. Recency bias is one of the toughest things in to overcome with analysis, especially when things have indeed gone so well for so long and we fared so well during the financial crisis. I have no problem with my stocks going down and I don't have a problem with my property dropping in value temporarily. In fact I don't know why people want the cost of living to rise all the time????

  18. #450
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    Quote Originally Posted by wonkyknee View Post
    There a tons of detached houses being used as Airbnb rentals? I've stayed in a few myself that are no longer available today. How do you separate the two? Detached homes are owned by thousands of people who are being hurt by the shut down.
    house ownership is a true reflection of supply and new house builds is a true reflection for demand

    Quote Originally Posted by wonkyknee View Post
    Lower interest rates haven' changed fixed rate mortgages. Hence the name fixed rate.
    i was making a point that fixed mortgage rates are at a historical lows. We had fixed 5yr rates as high as 21% in 1981, mid-range at 10.75% in ’95, and started dipping in ’02 from 8.75% to 3-4% today. Lower rates can drive up demand

    Quote Originally Posted by wonkyknee View Post
    Sure there are people who can survive all of this, but expecting a bull market and higher prices in Toronto with 4-5 headwinds is pretty optimistic when all it took was 3 interest rate hikes 3 years ago and the market stalled completely and prices dropped.
    the slight dip in 2018 with house prices, was due to the mortgage stress test to slow the increases in housing price


    Quote Originally Posted by wonkyknee View Post
    All you say is true and bodes well for the long term, but markets go up and down, and with 4-5 pretty tough head wind in the face of all Real Estate markets make it hard to be bullish...very hard. Recency bias is one of the toughest things in to overcome with analysis, especially when things have indeed gone so well for so long and we fared so well during the financial crisis. I have no problem with my stocks going down and I don't have a problem with my property dropping in value temporarily. In fact I don't know why people want the cost of living to rise all the time????
    though I agree with you with the hard times ahead, real estate is about location, location and the supply-demand curve. technically, we are not doing bad under these conditions. imo
    but who the fuck knows. shit could hit the fan and things can go south



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