Prices of houses just keep climbing up and up!! Where does it stop, I m already a homeowner looking to buy something as a investment but the prices are just crazy, then six months later your kicking yourself in the but. Where will it stop?
Is there a housing Bubble in the GTA!!!
- Thread starter MYSITEONLY
- Start date
Never gonna stop, but the rising curve may dip for a bit—say a few years to a decade like last time—and by a few tens of thousands. That may be the "pop" for you. It takes skill and cunning to buy and sell real estate for profit, or we'd all be doing it. But as the man said, they aren't making it any more, and we are making people. So bend close, I'm gonna whisper: Buy cheap, hold long, sell high My ex is still in the 2 bedroom house we bought for 40K in '76, and she has agents offer ten times that weekly. But there was a time in the nineties she would have been hardpressed to even get her equity out. Somewhere on that roller-coaster there's money to be made. You do the math.
Meantime—say six months ago you bought that house you mention—are you the really kinda guy who would have it back on the market now? And would the two closing costs, the carrying costs, shot-term insurance and the capital gains taxes (gotta live there or it's a business and you pay) still leave you with better than say $20 an hour for your time?
Meantime—say six months ago you bought that house you mention—are you the really kinda guy who would have it back on the market now? And would the two closing costs, the carrying costs, shot-term insurance and the capital gains taxes (gotta live there or it's a business and you pay) still leave you with better than say $20 an hour for your time?
Housing bubble in the GTA? Maybe. New York and LA? Yes.
The real question is when is it going to pop. Probably not any time soon. Interest rates are going up too slowly.
The real question is when is it going to pop. Probably not any time soon. Interest rates are going up too slowly.
I was telling my accountant that we were looking for an investment property (condo/house/duplex etc) in the months to come as we just finished paying off our house.
He told us to wait, said that he had a bunch of clients that were big into investment properties (8 - 10 houses condos per client) that were selling now, taking equity, and they would buy on the way back up.
Remember the "7 year" rule in real estate....... we are at just over 7 years since the last low cycle.......if you wait it out, you can buy when it is in the trough and really maximize.
BUT, nowadays real estate is never really a gamble.
He told us to wait, said that he had a bunch of clients that were big into investment properties (8 - 10 houses condos per client) that were selling now, taking equity, and they would buy on the way back up.
Remember the "7 year" rule in real estate....... we are at just over 7 years since the last low cycle.......if you wait it out, you can buy when it is in the trough and really maximize.
BUT, nowadays real estate is never really a gamble.
I m looking at a townhouse approx. 1740 sq ft. for $325,900, but I m thinking maybe I should buy a semi for $350,000 about the same size. When I think about it it seems like a lot of money for what I m getting. Any input????
Power Bubble
The only bubble that you might have to worry about is the power bubble. with all the extra power consumption from the new units in Toronto there is going to be a power crunch. The prices will adjust downward when the rolling blackouts start. Who wants to live in the dark?
The only bubble that you might have to worry about is the power bubble. with all the extra power consumption from the new units in Toronto there is going to be a power crunch. The prices will adjust downward when the rolling blackouts start. Who wants to live in the dark?
MYSITEONLY said:
Depends on where.... that sounds about right to me, for either a t/h or a semi.........what location are you thinking?
We had a t/h 1 block from the Lake in Oakville downtown area before we had our most recent place, and sold it for $360,000 2 1/2 years ago. It was 1700 sq ft.
Right now we live in West end Toronto and our place which was purchased for $417,000 in late 2003 would sell for the low $600,000's........
I lived there for the first housing boom. Bought a 4 bedroom house in Etobicoke for $81,000 in 1980. All of a sudden people were standing in line overnight for a chance to by houses that weren't even built. Moved in 1986 and sold the house for $239,000. Seems like the bubble never burst, just leaks a little air now and then.
Move down to Western New York. The $120,000 house I bought in 1988 is worth about $120,000 today.
Move down to Western New York. The $120,000 house I bought in 1988 is worth about $120,000 today.
I think I may take a shot and buy the townhome!! for 325K it won't be built till next year!! Its in Woodbride just off Hwy 7 any suggestions?
You never know.
Over the loooonnnnngggggg term, real estate is nothing but up.
Looking back at 92, interest rates were much higher, as was unemployment, inflation, etc.
Nothing goes up forever though.
I really really doubt you will ever see prices back to their 94 / 95 levels though. Missed the boat there.
The other thing to consider is that Toronto is growing in leaps and bounds with the population projected to double in the next 20 some odd years.
As that growth continues, housing IN THE CITY will do nothing but appreciate over time.
You might see the curve level off, even drop, but it' s not going to crash unless there is something catastrophic coming our way in the economy (terrorism, US currency crisis, etc.)
I have a good friend who has been waiting to buy now for 6 or 7 years. He keeps waiting for it to pop and keeps shaking his head when it doesn't.
Over the loooonnnnngggggg term, real estate is nothing but up.
Looking back at 92, interest rates were much higher, as was unemployment, inflation, etc.
Nothing goes up forever though.
I really really doubt you will ever see prices back to their 94 / 95 levels though. Missed the boat there.
The other thing to consider is that Toronto is growing in leaps and bounds with the population projected to double in the next 20 some odd years.
As that growth continues, housing IN THE CITY will do nothing but appreciate over time.
You might see the curve level off, even drop, but it' s not going to crash unless there is something catastrophic coming our way in the economy (terrorism, US currency crisis, etc.)
I have a good friend who has been waiting to buy now for 6 or 7 years. He keeps waiting for it to pop and keeps shaking his head when it doesn't.
Actually, rising interest rates stock the fire to the loonie and cause it to rise.nip said:
If the BOC wants to drop the value of the loonie, they must lower interest rates.
Hence the catch 22 right now. The bank wants to RAISE rates, but the more they raise the higher the loonie goes (being propelled by high commodity prices, a balanced gov't budget, a safe investment, etc. etc.)
The higher the loonie, the more the impact on the manufacturing sector which for years has been relying on the low dollar as a means to compete with the Americans rather than increasing productivity to decrease costs.
350 K sounds high for woodbridge and is it a free hold or condominium? Condos typically haven't realized the growth that individual homes have and (whoever said it) there are a ton on the market. You also have to consider the maintenance cost. Some condos maintenance costs equate to the same as your mortgage payment therefore to rent it, you have to charge way too much just to break even. You also have to consider that the maintenance costs WILL go up over the years as electricity and other utility costs go up.
Just remember the golden rule for real estate: location location location. The best bet would be to buy the cheapest house in the best neighbourhood.
Also lofts are the next big thing although they too (like condos) are cooling their heels a bit. Finally I did something at the right time and 7 yrs ago paid $75,000.00 for my loft and it was recently appraised at $240,000.00.
Just remember the golden rule for real estate: location location location. The best bet would be to buy the cheapest house in the best neighbourhood.
Also lofts are the next big thing although they too (like condos) are cooling their heels a bit. Finally I did something at the right time and 7 yrs ago paid $75,000.00 for my loft and it was recently appraised at $240,000.00.
Sometimes I wonder if people really realize how much 350,000 dollars really is.
When you convert that to house building money, you would be suprised how much of a house you could actually build for that kinda money. The average subdivision house is framed for between 3500 and 4 grand. Now how much money do you think bricks, wood, concrete and windows are for that house...
if your thinking...holy...shi...then your right. Builders make allot of the money
on the land cost alone..but what if you were to find yourself a nice property
and build..just imagine..
When you convert that to house building money, you would be suprised how much of a house you could actually build for that kinda money. The average subdivision house is framed for between 3500 and 4 grand. Now how much money do you think bricks, wood, concrete and windows are for that house...
if your thinking...holy...shi...then your right. Builders make allot of the money
on the land cost alone..but what if you were to find yourself a nice property
and build..just imagine..
Dude, you don't know what the hell you're talking about....it costs about $150.00 per square foot to build a house and that doesn't include the cost of the property, utility feeds, lot development, etc.tightfit said:
Windows on an average house: $8000.00
Flooring (hardwood): $4,000.00
Appliances: $2000.00
Kitchen Cabinets: $25 - 3000.00
Furnace: $2 - $3000.00
A/C: $3000.00
Roof: $4000.00
What about the roads? Who do you think pays for them? The sidewalks? all the grass? the sewers?
As for a building lot ANYWHERE in southern Ontario is cheap? You're whacked. A half decent sized lot out in BF nowhere will run you about $60 - $100 K. and that is just a building lot that you have to clear, level, provide access. Did you know it costs about $1200.00 a pole just to run power to the building?
You think builders make a ton of money on a house? You DON'T have any idea. I worked as a trim carpenter up in O'ville and that builder, after all expenses, made about $5000.00 per house which equates to a profit margin of about 1% and that isn't ALL profit as they have all the legal fees/levys associated with turning a field into a subdivision. How do I know this? We were talking about building ME a house there and he showed me a spreasheet he had on the model I wanted. Now this wasn't one of those promo pieces you see at the sales office. This was directly off his accounting program and it wasn't Bullshit as we were looking at areas that I could do myself to cut the price down.
BTW: have you priced out a sheet of exterior grade plywood recently? It has gone from $20.00 a sheet to about $45.00 and ALL materials have gone up due to the demand.
How about copper pipe? Copper is at an all time high....
I just love how people not involved in the industry make BS statements like that.....
"You think builders make a ton of money on a house? You DON'T have any idea. I worked as a trim carpenter up in O'ville and that builder, after all expenses, made about $5000.00 per house which equates to a profit margin of about 1% and that isn't ALL profit as they have all the legal fees/levys associated with turning a field into a subdivision. How do I know this? We were talking about building ME a house there and he showed me a spreasheet he had on the model I wanted. Now this wasn't one of those promo pieces you see at the sales office. This was directly off his accounting program and it wasn't Bullshit as we were looking at areas that I could do myself to cut the price down.
BTW: have you priced out a sheet of exterior grade plywood recently? It has gone from $20.00 a sheet to about $45.00 and ALL materials have gone up due to the demand.
How about copper pipe? Copper is at an all time high....
I just love how people not involved in the industry make BS statements like that.....
"
geez.. I hate it when you get some smartass who thinks he knows everything
and states he is the authority..when in fact it is he that really knows shit...
listen up my trim carpenter buddy..if your builder buddy has told you that he only makes $5000.00 a house (and I know a few of these builder buddies) and you believe that, then I suggest you keep doing whatever it is that you are doing.. and I would ask him why he would go through all the risk of building a house only to make 5 grand..there are easier ways to make money with allot less risk. As for my experience.. not that i need to justify anything to any fellow terbs but I am finishing building my 8th house (second over 6000 sq/ft, still a novice at the game). Now if you want to talk about adding development charges and planning/engineering fees to the equation then I agree that building a few houses (lets say 20 for example) from one piece of land can be very costly and if you build off of a model like that, then yes your profit could be 5 grand a house. But lets get back to reality for a sec. You as an individual are not going to live in 10 houses are you? No..so we're talking about building one house...yes one house. And if you think that you can't build a house for 350 grand then you never will be able to build a house period. And any builder that tells you that he can't build a pretty damn nice
house for 350 grand is BS'ING you and himself.
Building a house takes more than throwing a figure of $150.00 a sq/ft around. It calls for you to take a risk. If you don't have the balls to risk then you can't build. If you think that 350 grand is not going to allow you to build a house then it probably won't..but what if it was enough? If you are really interested in seeing what can be built for that kind of money, I'll let you in on a few secrets your builder buddy didn't show you. As for your figures, I can assure you that if a builder is making 5 grand on a house then he better be Greenpark or the like where 600 house subdivisions are built, because the only guys that can build this way are the guys building in big numbers. Anyone risking 345,000 to make 5 grand, either is a fool, or has cut the risk down by building many multiple houses.
oh..maybe your right about the copper pipe pricing as well..as I build with the new pvc pipe I rarely have had to purchase more than a few lengths of the copper..
I don't follow the copper market.
BTW: have you priced out a sheet of exterior grade plywood recently? It has gone from $20.00 a sheet to about $45.00 and ALL materials have gone up due to the demand.
How about copper pipe? Copper is at an all time high....
I just love how people not involved in the industry make BS statements like that.....
"
geez.. I hate it when you get some smartass who thinks he knows everything
and states he is the authority..when in fact it is he that really knows shit...
listen up my trim carpenter buddy..if your builder buddy has told you that he only makes $5000.00 a house (and I know a few of these builder buddies) and you believe that, then I suggest you keep doing whatever it is that you are doing.. and I would ask him why he would go through all the risk of building a house only to make 5 grand..there are easier ways to make money with allot less risk. As for my experience.. not that i need to justify anything to any fellow terbs but I am finishing building my 8th house (second over 6000 sq/ft, still a novice at the game). Now if you want to talk about adding development charges and planning/engineering fees to the equation then I agree that building a few houses (lets say 20 for example) from one piece of land can be very costly and if you build off of a model like that, then yes your profit could be 5 grand a house. But lets get back to reality for a sec. You as an individual are not going to live in 10 houses are you? No..so we're talking about building one house...yes one house. And if you think that you can't build a house for 350 grand then you never will be able to build a house period. And any builder that tells you that he can't build a pretty damn nice
house for 350 grand is BS'ING you and himself.
Building a house takes more than throwing a figure of $150.00 a sq/ft around. It calls for you to take a risk. If you don't have the balls to risk then you can't build. If you think that 350 grand is not going to allow you to build a house then it probably won't..but what if it was enough? If you are really interested in seeing what can be built for that kind of money, I'll let you in on a few secrets your builder buddy didn't show you. As for your figures, I can assure you that if a builder is making 5 grand on a house then he better be Greenpark or the like where 600 house subdivisions are built, because the only guys that can build this way are the guys building in big numbers. Anyone risking 345,000 to make 5 grand, either is a fool, or has cut the risk down by building many multiple houses.
oh..maybe your right about the copper pipe pricing as well..as I build with the new pvc pipe I rarely have had to purchase more than a few lengths of the copper..
I don't follow the copper market.
Actually, I was involved with a townhouse development in Etobicoke.
They were building 200 units.
They claimed their profit was $10,000 per unit.
Not alot for the amount of risk.
Mind you, that was profit, pure unadulterated profit.
The developers worked their salaries into the costs of the units as well.
I don't know who thinks you can frame a house for 4 grand though. That's pretty cheap.
They were building 200 units.
They claimed their profit was $10,000 per unit.
Not alot for the amount of risk.
Mind you, that was profit, pure unadulterated profit.
The developers worked their salaries into the costs of the units as well.
I don't know who thinks you can frame a house for 4 grand though. That's pretty cheap.
