Ron
New Member
Should I sell my condo now, if prices are going to drop then that not good. I bought my condo during the wall street crash in 2008-2009, got a good price and could make some money if I sell now.
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- Thread starter simuls
- Start date
Jonny5
Senior Member
The DOW is now above the level it was beofre Lehman Bros. went bankrupt. Junk bond and commodity prices are through the roof. Appetites for risk are clearly back and Toronto's 15 minutes of international fame for being conservative must be over by now. The Canadian dollar has been very weak this past summer and fall, off more than 10% against the Euro and Yen. It's off even more against countries that produce commodities like we do. If I were an international investor, I'd be worried about having exposure to Canada.
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interested
Senior Member
If you don't need it to live and are prepared to rent, it may make sense. However, remember the costs to sell: R/E, discharge a mortgage early, legal fees, staging if done, moving costs. All this will affect your bottom line. Then there is the inconvenience.
Alot of us, myself included expect a price realignment: personally I don't think it will be more than another 10-15% at most. But all of us, myself included are not clair voyant. Maybe things will cruise along with minimal adjustment for 2 years. Even if they come down another 5-10%, most of that will be eaten up with the fees/expenses above.
So Ron, make a decision that works and makes sense to you. No one gets it right everytime. You bought during the Wall street crash and you were very smart and probably lucky. Prices rebounded much faster and back up, I would argue irrationally within 9 months. Next time you may not be so lucky (though you may be very smart). Alot of very smart people got caught out both ways on this major event.
interested
Senior Member
This in the Globe and Mail today:
http://www.theglobeandmail.com/repo...ashes-home-sales-forecast/article1786967/CREA slashes home-sales forecast
TAVIA GRANT
Globe and Mail Update
Published Friday, Nov. 05, 2010 9:30AM EDT
Last updated Friday, Nov. 05, 2010 9:38AM EDT
The Canadian Real Estate Association slashed its forecast for home-sales activity Friday, saying activity will decline this year and next.
National sales activity is now expected to fall 4.9 per cent this year and sales will tumble another 9 per cent next year.
Lackluster economic and job growth, muted consumer confidence, and the resumption of interest rate hikes next year are the main reasons behind the lower forecast.
Even [U]Crea is now acknowledging what has been clear to the rest of us for months. Home sales are dropping. Simuls you expressed clearly what even now CREA has to acknowledge.
CG where are you and what do you have to say: or is this a phenomenon elsewhere but not in Toronto?[/U]
http://www.theglobeandmail.com/repo...ashes-home-sales-forecast/article1786967/CREA slashes home-sales forecast
TAVIA GRANT
Globe and Mail Update
Published Friday, Nov. 05, 2010 9:30AM EDT
Last updated Friday, Nov. 05, 2010 9:38AM EDT
The Canadian Real Estate Association slashed its forecast for home-sales activity Friday, saying activity will decline this year and next.
National sales activity is now expected to fall 4.9 per cent this year and sales will tumble another 9 per cent next year.
Lackluster economic and job growth, muted consumer confidence, and the resumption of interest rate hikes next year are the main reasons behind the lower forecast.
Even [U]Crea is now acknowledging what has been clear to the rest of us for months. Home sales are dropping. Simuls you expressed clearly what even now CREA has to acknowledge.
CG where are you and what do you have to say: or is this a phenomenon elsewhere but not in Toronto?[/U]
cdr108
Senior Member
???
so you're saying one shouldn't expect prices to go down annually, but we SHOULD expect the annual 10% appreciation ?!?!?
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CN Tower
Banned
simuls
Senior Member
CREA have now adjusted their forecast down by 18.2%!!!! (from an increase of 13.3% to a decrease of 4.9%) This just goes to show you that these people are either a) completely living in a bubble of their own, b) unadulterated shills, c) not to be trusted, d) all of the above or e) just plain stupid. While e) would honestly be my preferred choice I think the more accurate answer is d) - this is tragic and hopefully the Canadian homepurchaser/seller will punish the industry and use the new competition rules to list for next to nothing. Can't wait to see how this news gets spun.
detroitbootybass
Active Member
Industry groups always skew data in favor of their member's best interests. Individuals should also be highly skeptical of those people/groups that are dispensing information and whose livelihood is dependent on the real estate market rising. It's an obvious major conflict of interest.
interested
Senior Member
I will be a bit more generous. However I do believe that they do put spin on (as evidenced by multiple posts and "interpretations of data"). They will begrugingly come late to the party with the obvious negatives so they can say later on they did say it. But not until it was becoming too obvious to ignore. On the other hand, good news and good news extrapolation will be there with 1 week of positive data, but the bad only after 6 months of obvious worsening will it be recognized as such.
CN Tower
Banned
In other news, CREA is expected to launch a new and improved property listing service called the Building Search System or "BS" System for short. The BS System will only be accessible to CREA members and will only report positive market data to the public. Complimenting the BS System will be the BS Index designed to measure the performance of all properties listed and sold on the BS System. It is widely expected that the BS Index will rise in perpetuity, ad infinitum, or until the Competition Bureau shuts its down.
Asked about the new system, CREA president James McShifty (fictitious) was overheard telling industry sources that "the public deserves BS and CREA promises to give it to them, by the tonne!"
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TrickyRicky
Senior Member
I love reading the spastic media and blog posts about real estate trends and market conditions. These trends are going to take a long time to play out. A long time. Like multiply everything from 2-5 times. If prices start to drop they will not drop for 3 months, they will drop for 3-5 years. Seasonal variations will give lots of drama for more spastic media and blog posts. I hope that we will continue to see a base-line of projects and developments going on in this city. But we should not forget that construction and development are lagging activities. Hard times in these industries do not occur when prices peak but many years later. There was a period in the 90's lest we forget, when construction cranes were an endangered species. This was many many years after the price peak.
X2 Buyer
Active Member
The Fed's big gamble: Here's what could go wrong
An interesting article - although the topic is after US plan to print again another $600 billion money - the following comment may suit Canadian situation as well. We will see if the bubble will burst this round or a new bubble can solve the previous bubble.
-BLOWING BUBBLES
Buying bundles of Treasurys knocks down interest rates, making borrowing cheap. But it also motivates investors to move out of safe investments into riskier ones in search of better returns. The stock market, for instance, rises in value and everyone with savings in stocks feels wealthier. Ideally, it produces what economists call a "wealth effect": People who feel better off spend more.
The problem, according to some critics, is that cheap borrowing costs and buoyant markets make a fertile environment for bubbles, which eventually pop. "The effort to help the economy sets up another more dangerous bubble," says Grantham, who warned of Japan's surging real estate and stock markets in the 1980s, soaring Internet stocks in the 1990s and the housing market in the 2000s.
Stocks in developing countries are a likely candidate for the next bubble. Cash from Europe and the U.S. has plowed into emerging markets, such as Brazil and Chile, since the financial crisis, largely because these countries have less debt and faster economic growth than in the developed world.
Another concern: Hedge funds borrowing cheap money can magnify their bets, taking a loan at 2 percent to buy a security that's rising 10 percent. They sell the security, pay off the bank and pocket the rest. That's true whenever interest rates remain low. Falling rates allow speculators to borrow larger amounts. In the extreme, losses from hedge funds and other borrowers can put their banks at risk and leave governments to clean up the mess.
The game only works as long as the investment keeps climbing. When the bubble breaks, the fallout can devastate an economy.
"I think bubbles are the main villain in this piece," Grantham says.
Cheap debt provided the fuel for the housing bubble, allowing home buyers to take out larger loans on the belief that somebody else would buy the house at a higher price. Fed chief Ben Bernanke's answer, Grantham said, is to start the cycle over again by blowing a new bubble. "All they can do is replace one bubble with another one," he said.
I guess my point is, being more specific - the global inflation will be unavoidable; it drives up everything's prices: stocks, bonds, (I know usually stocks and bonds are on two ends but it is unusual in this special occasion), commodities and housing etc. People are trying to over-purchase to offset the loss of their cash value they can foresee over the term. On the other hand there are bubbles (not only in R/E market but also stock market and others most likely) and possibilities they will burst, the safest way is to sell now and prevent greater loss in future in essence safer to hold cashes on hand. Well which side are you deciding to jump on - hold cash lose value / hold things risk of burst? Or shall we say half half, cashing out half of your asset and equity is the optimal way?
An interesting article - although the topic is after US plan to print again another $600 billion money - the following comment may suit Canadian situation as well. We will see if the bubble will burst this round or a new bubble can solve the previous bubble.
-BLOWING BUBBLES
Buying bundles of Treasurys knocks down interest rates, making borrowing cheap. But it also motivates investors to move out of safe investments into riskier ones in search of better returns. The stock market, for instance, rises in value and everyone with savings in stocks feels wealthier. Ideally, it produces what economists call a "wealth effect": People who feel better off spend more.
The problem, according to some critics, is that cheap borrowing costs and buoyant markets make a fertile environment for bubbles, which eventually pop. "The effort to help the economy sets up another more dangerous bubble," says Grantham, who warned of Japan's surging real estate and stock markets in the 1980s, soaring Internet stocks in the 1990s and the housing market in the 2000s.
Stocks in developing countries are a likely candidate for the next bubble. Cash from Europe and the U.S. has plowed into emerging markets, such as Brazil and Chile, since the financial crisis, largely because these countries have less debt and faster economic growth than in the developed world.
Another concern: Hedge funds borrowing cheap money can magnify their bets, taking a loan at 2 percent to buy a security that's rising 10 percent. They sell the security, pay off the bank and pocket the rest. That's true whenever interest rates remain low. Falling rates allow speculators to borrow larger amounts. In the extreme, losses from hedge funds and other borrowers can put their banks at risk and leave governments to clean up the mess.
The game only works as long as the investment keeps climbing. When the bubble breaks, the fallout can devastate an economy.
"I think bubbles are the main villain in this piece," Grantham says.
Cheap debt provided the fuel for the housing bubble, allowing home buyers to take out larger loans on the belief that somebody else would buy the house at a higher price. Fed chief Ben Bernanke's answer, Grantham said, is to start the cycle over again by blowing a new bubble. "All they can do is replace one bubble with another one," he said.
I guess my point is, being more specific - the global inflation will be unavoidable; it drives up everything's prices: stocks, bonds, (I know usually stocks and bonds are on two ends but it is unusual in this special occasion), commodities and housing etc. People are trying to over-purchase to offset the loss of their cash value they can foresee over the term. On the other hand there are bubbles (not only in R/E market but also stock market and others most likely) and possibilities they will burst, the safest way is to sell now and prevent greater loss in future in essence safer to hold cashes on hand. Well which side are you deciding to jump on - hold cash lose value / hold things risk of burst? Or shall we say half half, cashing out half of your asset and equity is the optimal way?
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interested
Senior Member
I think this is the point.
No one really knows what to do.
Even the Fed admits we are in unchartered territories. QE of the scale we are seeing and certainly in the US is a direct response of Ben Bernanke to avoid a 1929 depression and the severe recessionof 1932. Problem is since it has not been tried essentially before, the big question is collateral effects that are unanticipated.
To answer your question X2.
I am a firm believer in spreading your risk.
It is impossible to be smart here. You may be lucky. Guess right, make a fortune. Guess wrong and wipe out. Therefore spread the risk and maybe it will be clearer later on.
No one really knows what to do.
Even the Fed admits we are in unchartered territories. QE of the scale we are seeing and certainly in the US is a direct response of Ben Bernanke to avoid a 1929 depression and the severe recessionof 1932. Problem is since it has not been tried essentially before, the big question is collateral effects that are unanticipated.
To answer your question X2.
I am a firm believer in spreading your risk.
It is impossible to be smart here. You may be lucky. Guess right, make a fortune. Guess wrong and wipe out. Therefore spread the risk and maybe it will be clearer later on.
interested
Senior Member
More data showing slowdown:[/U Sorry, there are graphs on the article but did not replicate here.
visual look at Canada’s housing starts
Andrew Barr/National Post
A break down of Canada's October housing starts.
The Canada Mortgage and Housing Corp revealed on Monday that housing starts fell more than expected in October. There were 167,900 starts last month (based on an annualized rate), down 9.2% from 185,000 in September.
Above, we break down the numbers to give you an idea of where starts were weakest, and which provinces and areas bucked the trend.
.
Posted in: FP Post
Read more: http://business.financialpost.com/2...=14228&preview_nonce=4d95338fb8#ixzz14iOjveop
visual look at Canada’s housing starts
Andrew Barr/National Post
A break down of Canada's October housing starts.
The Canada Mortgage and Housing Corp revealed on Monday that housing starts fell more than expected in October. There were 167,900 starts last month (based on an annualized rate), down 9.2% from 185,000 in September.
Above, we break down the numbers to give you an idea of where starts were weakest, and which provinces and areas bucked the trend.
.
Posted in: FP Post
Read more: http://business.financialpost.com/2...=14228&preview_nonce=4d95338fb8#ixzz14iOjveop
Yoshimura
Active Member
Goldbug over here,
A big rise in inflation means that you should invest in gold. Don't hold your cash, don't hold on to things that risk bursts. It's worked for me so far
Are you familiar with Peter Schiff? He has had a great record since the 90s. Checkout his Youtube channel: http://www.youtube.com/user/SchiffReport
And perhaps we should start calling things by their true meaning: Stimulus = Depressant & Quantitative Easing = Quantitative Stealing
Peace
