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whattodo
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What to do NOW?

Tue Oct 27, 2015 12:37 pm

I have been reading this site for a long time. It looks like the bulls were right & the bears were wrong.

My question is what would you do now? And don't say I should have bought 10 or 15 years ago. I was a student in university & had no income back then.

I have a good size down payment & it is growing by $50,000 per year. I have a fairly good income too. It seems I have always been in a situation where I could buy a crappy small old house but i want a newer larger place. So, I kept saving and obviously house prices are increasing by a larger amount than I can save & invest. I did buy a townhouse 5 years ago to hedge my bets. I also realize that anyone who prayed for a huge price drop and who hasn't saved a huge down payment has no chance ever to buy a house in this market. Even if there was a 30% drop they are still screwed.

So, should i just get any crappy house now & hope for continued appreciation forever. Or wait & keep saving and then hopefully buy a nice place. While I am hoping for a price drop it has not happened. Even if prices would remain constant or grow slowly (2 - 3%) it would help me out since my down payment then would grow faster than prices increase.

My thoughts are easy money (low interest) and HAM are really driving up prices. NO HAM & higher rates will kill prices fast but this may never happen.

Aren't any of you bulls worries about rising interest rates. I know I am!

I already have a decision made I just want to see what others think.
 
eyesthebye2
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Re: What to do NOW?

Tue Oct 27, 2015 9:36 pm

where are you buying?
 
whattodo
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Re: What to do NOW?

Tue Oct 27, 2015 10:21 pm

Most likely somewhere between Port Coquitlam & Maple Ridge. From Coquitlam westward prices are just too high.
 
eyesthebye2
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Re: What to do NOW?

Wed Oct 28, 2015 8:50 am

Most likely somewhere between Port Coquitlam & Maple Ridge. From Coquitlam westward prices are just too high.
Coquitlam is still good value.
Buy the worst house on the biggest piece of land in a good area. Set your sites on future redevelopment. Even if you don't
do it yourself the potential will add more value. Stay way from busy streets and not too close to skytrain
 
whattodo
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Re: What to do NOW?

Wed Oct 28, 2015 12:36 pm

thanks for the answers Eyesthebye2. I guess you are saying buy now don't wait? That was my original question.

Coquitlam has some value. I see value in land too. But for under a million most places are old and small. My wife won't live in "the worst house". She would prefer a small piece of land with a big newer house on it. I would prefer an older smaller house with more land. Time to get a new wife (LOL) :D as a newer large house on a large piece of land is out of the question. That would be over 1.5 million :?: in Coquitlam which is over my budget.

Anyone else? Geyser? Whipmaster?
 
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WhipMaster
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Re: What to do NOW?

Wed Oct 28, 2015 6:26 pm

I would buy Coquitlam or farther out. I would buy the Valley.
Land is where it's at. They are building condos like there's no tomorrow, but who can live in a condo?
A single family home is going to be a rare thing in the future.
HAM is driving this market. But also, we are going to have more people here, refugees, temporary foreign workers, and so there's going to be a huge upward demand for residential property.

The market is full on right now. Coquitlam and further out are gonna go nuts if they aren't already.

PoCo and Maple Ridge are good. Anywhere that you can afford is good.
Hoo~Cudda~Not~Nod~ed????? :-)
 
tdma800
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Re: What to do NOW?

Thu Oct 29, 2015 9:00 am

To the moon!

http://www.ctvnews.ca/business/problema ... -1.2633539

"While some overvaluation was detected in Vancouver, “overheating, acceleration in house prices and overbuilding are not a concern in this market,” the CMHC says."
 
tapioca
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Re: What to do NOW?

Thu Oct 29, 2015 10:44 am

i agree with ETB and Whip. It's all about the land, not the house - a new house will depreciate anyway, just like a car. It's the land value that matters. You need to educate your wife :mrgreen:

I'm not sure there are many deals left in Coquitlam - it's the new Burnaby. If it were me:

Poco

Surrey SFH closer to skytrain but not on busy streets

also people around me are talking about Delta seriously in a way they weren't even 2 years ago. Some amazing houses on large lots in Delta for far less. And, the tunnel is going to be replaced by a bridge, and who knows what else now the Libs are in.

My 2 cents.
 
Fabien
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Re: What to do NOW?

Thu Oct 29, 2015 1:29 pm

This thread is hilarious. its like amateur hour for reckless gamblers!

Advice thus far: Follow the refugees! - they've got a million or two to splurge! Or TFW's! When they're not too busy doing the jobs we wont do for $10 an hour they're out buying / renting SFH - didn't you know?!

It's all about land! Yes Canada has no land! Forget price, location, the huge ALR, the border, median wage - its all about land! $1 million, $2 million, $3 million per plot - it really doesn't matter!

Look. It aint that cut and dry. I already suspect we have too many condos. Im pretty certain that investors are buying the majority, I'm even more certain that its only record low interest rates that are keeping these 'investments' from being cash flow negative.

Ironically it's only Whipmaster thus far who also has the correct market insight if you ignore the absurdities about refugees and TFW. This market has been taken to impossible levels by external foreign money - or liquidity. We (or enough of us in poorly paid Vancouver) just can't get the credit to take it to these impossible levels.San Franciso, or New York, or even Seattle we are not. In macro terms it defied logic some time ago.

So imho... When rates go up on a consistent basis the market WILL go the opposite way. Bottom (condo) will be hit first, as the far, far too many investors start losing money month-over-month and look to bail, then up to SFH. Its only a matter of when, not if. When rates (mortages) go up.

Again imho.. if foreign liquidity dries up through regulation, greater tracking, increased taxes, some actual political strength, etc then the market will be hit top (SFH), flowing down.

If rates go up and foreign liquidity dries up then who is gonna be doing the buying? These are million dollar trades. All bets are off. Anything could happen.

Again just my opinion. Rates may stay low forever. External foreign liquidity may be allowed to flood into Vancouver unabated for the next decade due to political you-know-what. The RE party could carry on, and on and on. I happen to think it wont. In 2009 there was room, but this is 2015.

However on thing is certain. This iSNT a one way bet. Be careful and be prepared for all eventualities. That is the only sober assessment right now in late 2015.

Bookmarked!
 
tdma800
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Re: What to do NOW?

Thu Oct 29, 2015 2:59 pm

over 200,000 new residents a year coming to canada not including the refugees, students, workers, etc that need a place to live
 
rofina
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Re: What to do NOW?

Thu Oct 29, 2015 4:24 pm

All good points above.

I think the greatest risk in SFH today is the price - might seem obvious but I don't think people look at a price any more, its about monthly carrying costs.

Specifically, how do you plan to pay off a $700,000+ mortgage? What savings rate do you need to achieve to make meaningful contributions towards paying off the mortgage?

Or, does the buyer not intend to ever be mortgage free?

This might seem conflicting; I think the market will continue to go up, but I don't think participating for locals is a good idea. Might seem counterintuitive, but I believe the players that are driving the market at these prices can largely afford the risk. Local earners, and local families cannot, the risk levels for them are only blurred because of the favourable lending conditions that largely continue in Canada.

Lastly - its about lifestyle. We are in a unique situation, no kids, no pets, no need for a house. To dedicate a disproportionately large portion of income towards servicing housing debt, versus travelling and enjoy Vancouver seems like a poor trade off. However, I will note, a trade off that some need to make due to unique circumstances.
 
Geyser
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Re: What to do NOW?

Thu Oct 29, 2015 4:29 pm

I agree with Rofina and Fabien on most points but I'm not convinced that condos will do worse than SFH's in the inevitable correction because, as Tsur Somerville pointed out, it's all about the land. Condos usually have a lot less land associated with each unit and, in any given location, can (according to Tsur) can be expected to lag behind SFH's in a boom but fall less during a bust.

In most bubbles, what goes up the most, drops the most. We have seen the current bull market prove the first part of his theory, condo prices are nowhere near as inflated as SFH's, but of course overbuilding of condos could change that during the bust.

I also don't believe that prices can keep going up without occasional corrections, sometimes really big ones. We seem to be well overdue for one of those but that just means that it finally arrives it will probably be bigger and longer.

We had strong immigration during previous major price collapses, but few seem to want to think about that.
In fond memory of Taipan, a model of modesty, decency, dignity and tolerance. Long may we all prosper from the tremendous legacy of worldly wisdom and specialized real estate knowledge which he left in the "Arguments" thread.
 
eyesthebye2
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Re: What to do NOW?

Fri Oct 30, 2015 6:37 am

thanks for the answers Eyesthebye2. I guess you are saying buy now don't wait? That was my original question.

Coquitlam has some value. I see value in land too. But for under a million most places are old and small. My wife won't live in "the worst house". She would prefer a small piece of land with a big newer house on it. I would prefer an older smaller house with more land. Time to get a new wife (LOL) :D as a newer large house on a large piece of land is out of the question. That would be over 1.5 million :?: in Coquitlam which is over my budget.

Anyone else? Geyser? Whipmaster?
one year add 45,000 more new immigrants to the lower mainland, 2 years 90K...
Since I bought my place 600K new residents to the lower mainland.
Do you honestly think you should wait? If you want a condo you can wait. If you want land different story
 
tdma800
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Re: What to do NOW?

Fri Oct 30, 2015 6:40 am

The Liberals will increase many categories of immigrants as well
 
eyesthebye2
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Re: What to do NOW?

Fri Oct 30, 2015 7:05 am

Fabien,

this is the same "sober assessment" you gave your dear readers as far back as your posts can be researched. 5 years is a long, long time in terms of real estate change.
You attempted to spread fear back then...not to be bold when others are fearful.

Vancouver east detached Feb 2011 = $741,100
Vancouver east detached Sept 2015 = $1,160,900

so maybe your posts were read by someone who made the decision NOT to buy after reading. I'd say you owe them $420,000.

You don't seem to be able to grasp immigration and the effects on housing. Even if we were to eliminate an immigration group
like "investor" or "business class" we still have 45,000 new residents with a cross section of every economic class moving here. There will
be those at the top 25% income/wealth who will most certainly put upward pressure on the detached market.

The remedy is simple, ease the flow of immigration back to mid 1980s level (approx. 100K/yr) and the market will adjust. Good luck with that.
Fabien » Mon Feb 28, 2011 11:16 am

I couldnt have made it clearer that im talking about now!

Back in 2009 I was one of the few casting doubt on the incredibly wild claims of a 50% (75% in some cases!) Vancouver crash. I said that some of the posts and graphs were agenda driven.

You didnt hear me questioning the wisdom of a (your) SFH purchase back then. On the contrary, rates we low and the prices had fallen - factors that many on here who were predicting armageddon inexplicably chose to overlook. You're home and dry in the long run and fair play to you,

Im talking about the here and now, not the yesterday! This is where we part paths.. :D

Detached buyer now had better be very rich or very brave, that's all im saying..
This thread is hilarious. its like amateur hour for reckless gamblers!

Advice thus far: Follow the refugees! - they've got a million or two to splurge! Or TFW's! When they're not too busy doing the jobs we wont do for $10 an hour they're out buying / renting SFH - didn't you know?!

It's all about land! Yes Canada has no land! Forget price, location, the huge ALR, the border, median wage - its all about land! $1 million, $2 million, $3 million per plot - it really doesn't matter!

Look. It aint that cut and dry. I already suspect we have too many condos. Im pretty certain that investors are buying the majority, I'm even more certain that its only record low interest rates that are keeping these 'investments' from being cash flow negative.

Ironically it's only Whipmaster thus far who also has the correct market insight if you ignore the absurdities about refugees and TFW. This market has been taken to impossible levels by external foreign money - or liquidity. We (or enough of us in poorly paid Vancouver) just can't get the credit to take it to these impossible levels.San Franciso, or New York, or even Seattle we are not. In macro terms it defied logic some time ago.

So imho... When rates go up on a consistent basis the market WILL go the opposite way. Bottom (condo) will be hit first, as the far, far too many investors start losing money month-over-month and look to bail, then up to SFH. Its only a matter of when, not if. When rates (mortages) go up.

Again imho.. if foreign liquidity dries up through regulation, greater tracking, increased taxes, some actual political strength, etc then the market will be hit top (SFH), flowing down.

If rates go up and foreign liquidity dries up then who is gonna be doing the buying? These are million dollar trades. All bets are off. Anything could happen.

Again just my opinion. Rates may stay low forever. External foreign liquidity may be allowed to flood into Vancouver unabated for the next decade due to political you-know-what. The RE party could carry on, and on and on. I happen to think it wont. In 2009 there was room, but this is 2015.

However on thing is certain. This iSNT a one way bet. Be careful and be prepared for all eventualities. That is the only sober assessment right now in late 2015.

Bookmarked!

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