cabbagetowner
Active Member
95% - using cabbage theorem.
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- Thread starter The Condo Observer
- Start date
Shtopor
New Member
I am an electritian, and was thinking of buying propery for the past 2-3 years.
what was holding me though 2 years ago was biding wars, 1 year ago situation with housing in USA, now I am holding due to the fact that if you look at history then you will easily find out if house prices start falling they loose their value in the first year more abruptly then in the next 2. Overall I think as it was before bottom will be reached in 3 years since price declines started ( 2011), that IF.... all this credit crisis will not grow into something uglier then a regular recession ( and chances of that happening seem to escalate from day to day).
Ohh and btw most of renovations that I took part in the past 2-3 years was carried out by realtors - flippers, they all hey general contractors who turn anything into something in mere weeks.
I am BLOODY HELL "WILL BE" sitting on the sidelines till last sheet is squeezed out of those who fullishly bought into hype created by RE industry.
what was holding me though 2 years ago was biding wars, 1 year ago situation with housing in USA, now I am holding due to the fact that if you look at history then you will easily find out if house prices start falling they loose their value in the first year more abruptly then in the next 2. Overall I think as it was before bottom will be reached in 3 years since price declines started ( 2011), that IF.... all this credit crisis will not grow into something uglier then a regular recession ( and chances of that happening seem to escalate from day to day).
Ohh and btw most of renovations that I took part in the past 2-3 years was carried out by realtors - flippers, they all hey general contractors who turn anything into something in mere weeks.
I am BLOODY HELL "WILL BE" sitting on the sidelines till last sheet is squeezed out of those who fullishly bought into hype created by RE industry.
cdr108
Senior Member
Hey Shtopor, welcome to the forum.
Your analysis is similar to mine in debate with another poster who touted that it's a good time to buy now ... I've attached the info for your reference.
You sound more like a 'Big City Broker' or a perma-bull.
According to the graph you provided:
The first RE recession in 1959 and lasted until 1964 (ie. 5 years); values peaked at $125,000 and dropped 20% to ~$100,000.
There was a burst of 125% growth from 1965 to 1974; but then the next RE recession started and lasted until 1980 (ie. 6 years); then stagnated for another 5 years until 1985, when it sky-rocketed to a peak in 1989 and crashed back down.
In real terms, values dropped 20% from 1974 to 1980; and after the bubble of late 1980s, there was only 5% appreciation over a 22 year span from 1974 to 1996.
Last RE recession occurred between 1989 to 1996 (ie. 7 years) before there was any appreciation in the markets.
During that time, in real terms, values dropped 37% from $400K => $250K; and still HAVE NOT reached their peak after 18 years.
The point is, there is a danger of buying at the peak, which we are at (or just passed depending on your sources).
The "7 to 10 percent or more a year for the past seven years" appreciation you quoted is unsustainable and perpetuated by cheap interest rates.
Since you bring up historical values and trends then use them and not cherry pick. Historical data shows TO values will decline by at least 20%, some say as much as 30% from it's peak.
RE is cyclical ... you probably have at least 4 or 5 years from the peak to buy before there is any uptrend again.
When the average house price is around $320,000 then one should consider buying.
There will be less market risk, still some but less so than currently.
At an average value of $368,582 according to TREB; or $406,741 as referenced by Teranet Inc and National Bank, we are still WAY OVERPRICED and too much risk of being in NEGATIVE equity in the next coming 5 years.
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daveto
Active Member
MavRK, you were correct up until the final sentance, which should have read "...when the disease is present...". Perhaps that was a mistype on your part?
In any event, my point is that it is very very easy to use a couple of facts, toss in a twist, and COMPLETELY fool most readers (even if they are looking for the con).
To suggest that TREB is not able to spindoctor its stats, simply because there are 15 pages of them..., well I can assure you that there is nothing simpler.
I work in a statistics related field, and I see miststatements, spins, and outright lies published in the media as fact all the time.
Observer Walt
Senior Member
Dave, your point is a good one, and you made it effectively.
I have sometimes been a bit taken aback myself by "spin" coming from TREB. They used to have a practice each month of highlighting one or two districts which had shown exceptionally good results in the previous month. If you didn't read carefully you might have thought that these were intended to be typical of the whole market. I notice that in the past few months they haven't been doing this any longer.
My own favourite example from about a year ago was when they highlighted Caledon, and said that results in that district for the month had been good mainly because of strong condo sales. If you know Caledon at all, you'll know that it has few condos, and TREB's own statistics showed that none at all had been sold that month.
However, my own point was that when quite detailed statistics are published, those of us who are interested in such things can go through the numbers and come to our own conclusion. The raw numbers don't lie, and spin, if any, can be ignored.
I have sometimes been a bit taken aback myself by "spin" coming from TREB. They used to have a practice each month of highlighting one or two districts which had shown exceptionally good results in the previous month. If you didn't read carefully you might have thought that these were intended to be typical of the whole market. I notice that in the past few months they haven't been doing this any longer.
My own favourite example from about a year ago was when they highlighted Caledon, and said that results in that district for the month had been good mainly because of strong condo sales. If you know Caledon at all, you'll know that it has few condos, and TREB's own statistics showed that none at all had been sold that month.
However, my own point was that when quite detailed statistics are published, those of us who are interested in such things can go through the numbers and come to our own conclusion. The raw numbers don't lie, and spin, if any, can be ignored.
urbandreamer
recession proof
Repos hitting downtown core at last
Heard something interesting: repossessions of homes and condos have finally hit downtown Toronto quite hard these past few months.
Apparently, last year it was beginning to occur quite frequently in the manufacturing towns (Windsor, St Catherines, Hamilton, Kitchener), while the end of 2008/beginning of 2009 saw an uptick in the 905--Oshawa, Thornhill, etc. I'm talking about normal middle class folks who've been recently laid off....
Interested to hear what any insiders have heard?
Heard something interesting: repossessions of homes and condos have finally hit downtown Toronto quite hard these past few months.
Apparently, last year it was beginning to occur quite frequently in the manufacturing towns (Windsor, St Catherines, Hamilton, Kitchener), while the end of 2008/beginning of 2009 saw an uptick in the 905--Oshawa, Thornhill, etc. I'm talking about normal middle class folks who've been recently laid off....
Interested to hear what any insiders have heard?
cdr108
Senior Member
^^^
UD, would you have a source for this info.
I believe it's happening and actually for awhile bc if you look at some of the other venues that realtors use to sell besides MLS like craigslist or kijiji.
I noticed there were many POS in the last year as you noted but mostly in the 905 like Brampton, Mississauga, Markham, etc; however, there were a few condos in CP.
UD, would you have a source for this info.
I believe it's happening and actually for awhile bc if you look at some of the other venues that realtors use to sell besides MLS like craigslist or kijiji.
I noticed there were many POS in the last year as you noted but mostly in the 905 like Brampton, Mississauga, Markham, etc; however, there were a few condos in CP.