Just a few points in response. Vancouver has had a 90% crash before and there was no earthquake.
there was a World War though, kinda a big deal. Also back in those days you could trade real estate for horses
Geyser wrote:More recently Tokyo had a 90% crash too, and again no earthquake. And how about Vancouver's crash of between 40% and 50% back in the early eighties? Once again, no earthquake or nuke and the economy didn't collapse except for those who were overleveraged and lost their homes.
Actually the crash of 1981/82 coincided with a severe global recession...also interest rates of 22% were a killer and inflation was at 12%.
As for my "rant", couldn't be cut and pasted from 2006 because that's back when I was being called an idiotic perma-bull by Taipan. I didn't turn bearish until a few years ago.
I believe Taipan came later, 2006 was the likes of Freako, Rentah and the gang with their crazed Bear message relentlessly stating a crash was going to be 60% or more and the market couldn't sustain current prices...blah blah blah.
I don't disagree with some of your thinking and reasoning and certainly a smart move to divest some real estate holdings, I'm working on that as well, but still need a bit more time personally, and don't really want to dump some holdings that are too good to let go, but taking profits is enticing.
I'm glad that you have been a homeowner long enough to be relatively safe from a serious crash, just keep in mind that the effects of leverage which rewarded so many of us so generously in the upmarket years can be just a rural enemy in a down market. Leverage works both ways if are unfortunate enough to still carry a significant mortgage, that's why I almost halved my Vancouver real estate holdings and paid off all the remaining mortgages a few years ago. Sure I was too early and I Missed some additional profits but I sleep soundly, besides, I've never met anybody who was able to reliably predict peaks and troughs. I remain in the market but I'm not too worried about price crashes because I have zero leverage.
Plus you are old and going to die soon...you can't take it with you!!!
FWIW, I'm not anticipating a 90% price crash this time, although I would never say it's impossible, especially with an NDP government. It does seem likely to me that a correction of somewhere between 30% and 70% is more within the range of reasonable, fundamentally based expectations. Toronto is already closing in on the lower number.
I would say 90% is almost impossible...probably like a one in a billion chance of that happening....Something like a War or Big Earthquake would have to happen to trigger such a massive crash. Anything over 30% will be unlikely in my opinion, especially given the current housing crunch, and when will that come to pass is unknown. Toronto is playing out in a similar fashion to Vancouver after the foreign buyer tax was announced...I suspect its not quite as bad as the Average Price shows right now...but should be fun times ahead in GTO.
Lastly I see many US markets are catching up to Vancouver again...Seattle sure isn't cheap these days, if you factor in the exchange rate they are probably almost on par with Vancouver.