MadMax
Active Member
Funny....I went to Sherway Gardens on Saturday with the wife and kid, couldn't find a parking spot for 10 minutes!!! I hate this recession....such inconvenience.
|
|
|
- Thread starter simuls
- Start date
Eug
Senior Member
It's pretty hard to take ANYTHING on Turner's blog seriously, regardless of who posts it.
There are good reasons to predict a pullback, but the people over there have been crying that the-sky-is-falling for so long it's pathetic. It's basically a hardcore religion over there now.
andrejeffry
Active Member
jacek.mazurek
New Member
The Sky is falling
I think that prices will continue to rise for the time being.
I think some people are due to get hurt. Those people would be primarily those who purchased with nothing down and also purchased a home/condo at the max they got approved for at the bank.
One the other hand, what I do see happening in TO is that people will become slaves to their homes.
Instead of having 2 vehicles, like many have in the past, people will have 1 or none, which is not a bad thing.
People will also commit more of their income (percentage wise) to their homes, which will have an impact on the economy in a bad way, and also, people will wait longer or won't at all have families.
People will control the variables they can to save their homes and will only work and sleep in order to keep their homes.
I do believe it to be inevitable that we will see a correction, as history has repeated itself so many times in the past, why would it skip this generation. I think it has been delayed with stimulus money and low interest rates, but the way people are buying, it has to catch up to people sooner or later.
When will this correction happen?
If I knew that, I would not be typing here, nor would I be moving into a townhouse in Vaughan @ $355k.
My guess would be a bit of a pullback or at least a slowdown from this frenzy next year with HST and an increase in interest rates, if the gov't follows through with that, but a likely bigger pullback in prices in 3-5 years when people start to renew their 3% mortgages for 8% mortgages, as I'm sure they did not take advantage of the low rates now to try and overpay over the next few years.
Those are my 2 cents.
Jack
I think that prices will continue to rise for the time being.
I think some people are due to get hurt. Those people would be primarily those who purchased with nothing down and also purchased a home/condo at the max they got approved for at the bank.
One the other hand, what I do see happening in TO is that people will become slaves to their homes.
Instead of having 2 vehicles, like many have in the past, people will have 1 or none, which is not a bad thing.
People will also commit more of their income (percentage wise) to their homes, which will have an impact on the economy in a bad way, and also, people will wait longer or won't at all have families.
People will control the variables they can to save their homes and will only work and sleep in order to keep their homes.
I do believe it to be inevitable that we will see a correction, as history has repeated itself so many times in the past, why would it skip this generation. I think it has been delayed with stimulus money and low interest rates, but the way people are buying, it has to catch up to people sooner or later.
When will this correction happen?
If I knew that, I would not be typing here, nor would I be moving into a townhouse in Vaughan @ $355k.
My guess would be a bit of a pullback or at least a slowdown from this frenzy next year with HST and an increase in interest rates, if the gov't follows through with that, but a likely bigger pullback in prices in 3-5 years when people start to renew their 3% mortgages for 8% mortgages, as I'm sure they did not take advantage of the low rates now to try and overpay over the next few years.
Those are my 2 cents.
Jack
Eug
Senior Member
There are some here who actually try to discuss it. The times I've been over there, THEHUMUNGOUSCRASHISIMMINENT sentiment has been basically considered as fact, as a basic starting point. Thus, I never bother wasting my time with that useless site anymore.
P.S. My prediction years ago for the US was a mild to maybe moderate pullback and then years of stagnation. Nope, it was a severe pullback.
My prediction for Canada was a mild pullback and then years of stagnation. Nope, prices have actually gone up 15% since then.
Last edited:
TrickyRicky
Senior Member
I think people are far too focused on short-term time frames. I think for a whole set of reasons (technology, the short-term fixation of stock market culture etc.) people want trends to occur quickly. Time and time again however we see that in real estate trend timing may be vital but it is extremely difficult.
Take a 6 month window for example. Everyone wants to know what will happen 6 months from now. People who predict correctly 6 months on are called heros, people who are wrong are called morons. But wait a second. This might be an extreme example, but take the guy who bought in 1989 and had to wait until 2005 for his property value to return to its point of origin. 6 months represents 3% of the time frame between these points. During this period prices did two general things, they went down, and then they went back up. So 6 months represents an essentially insignificant amount of time in that general cycle. If you predicted prices rising or falling during some 6 month period during that cycle your prediction was essentially of no significant value.
This does not mean there are not over-arching factors that will drive the market up or down or flat. What it means is that the fall in prices this spring and the rise in prices this summer may actually be insignificant events compared to the general trend. Predicting that prices will rise or fall and being years off in timing is actually not as inaccurate as you may think.
In 1989 the stock market crashed. The following events, directly related to the subsequent recession, forget about the details of the events just how they relate to the 1989 event:
-1989 stock market crash
-GST starts 1991 (2, 6-month periods later)
-O&Y bankcrupt 1992 (5, 6-month periods later)
-unemployment peaks 11.6% 1992 (5, 6-month periods later)
-Housing bottoms I think 1993 (7, 6-month periods later)
-PC government fails 1993 (7, 6-month periods later)
Convert these dates into our present situation. This is a thought exercise, it is not ment to be a factual prediction, just something to illustrate time periods:
-2008 stock market crash
-HST starts 2010 (3 6-month periods later)
-Promenant developers go bankrupt 2011
-unemployment peaks 2011
-Housing bottoms 2012
-Major change of government 2012
Take a 6 month window for example. Everyone wants to know what will happen 6 months from now. People who predict correctly 6 months on are called heros, people who are wrong are called morons. But wait a second. This might be an extreme example, but take the guy who bought in 1989 and had to wait until 2005 for his property value to return to its point of origin. 6 months represents 3% of the time frame between these points. During this period prices did two general things, they went down, and then they went back up. So 6 months represents an essentially insignificant amount of time in that general cycle. If you predicted prices rising or falling during some 6 month period during that cycle your prediction was essentially of no significant value.
This does not mean there are not over-arching factors that will drive the market up or down or flat. What it means is that the fall in prices this spring and the rise in prices this summer may actually be insignificant events compared to the general trend. Predicting that prices will rise or fall and being years off in timing is actually not as inaccurate as you may think.
In 1989 the stock market crashed. The following events, directly related to the subsequent recession, forget about the details of the events just how they relate to the 1989 event:
-1989 stock market crash
-GST starts 1991 (2, 6-month periods later)
-O&Y bankcrupt 1992 (5, 6-month periods later)
-unemployment peaks 11.6% 1992 (5, 6-month periods later)
-Housing bottoms I think 1993 (7, 6-month periods later)
-PC government fails 1993 (7, 6-month periods later)
Convert these dates into our present situation. This is a thought exercise, it is not ment to be a factual prediction, just something to illustrate time periods:
-2008 stock market crash
-HST starts 2010 (3 6-month periods later)
-Promenant developers go bankrupt 2011
-unemployment peaks 2011
-Housing bottoms 2012
-Major change of government 2012
Last edited:
urbandreamer
recession proof
^But 2011 is year of the (lucky and financially savvy) rabbit! Late 2010-early 2011 is the bottom.
Johnzz
Active Member
I agree.
Most people find it difficult conceptualising an event 5-10 years away. As a result, they simply take the short term trend and extrapolate forever. Albeit much easier, this method rarely paints an accurate picture of what’s to come.
CNBC only serves up what the masses want.
safeashouses
Banned
http://www.usatoday.com/travel/destinations/secondhomes/2009-11-05-toronto_N.htm
Even USA Today thinks there a bubble in the condo market!
Calling Toronto, Ontario, Canada a legitimate market for Second Homes is very disturbing and further evidence of the enormous impact that outside buyers have on the market.
Even USA Today thinks there a bubble in the condo market!
Calling Toronto, Ontario, Canada a legitimate market for Second Homes is very disturbing and further evidence of the enormous impact that outside buyers have on the market.
Last edited:
urbandreamer
recession proof
^You calling me a liar?
Come to Blowfish Thursday night to settle the score!
Come to Blowfish Thursday night to settle the score!
safeashouses
Banned
^You calling me a liar?
Come to Blowfish Thursday night to settle the score!
Lol. Haven't been there in a while. How's the scene these days?
My favorite quote from the article:
• King West. The equivalent of New York's Meatpacking District, it's Toronto's old garment district, Lamb says. "It's where people under 50 want to live." Prices here are average for downtown; Lamb says the most-popular second-home choice is a 600-square-foot one-bedroom for around $290,000.
Under 50? More like under 30.
Second home choice???
Last edited:
urbandreamer
recession proof
^Is BJL still under 50? That explains it.
toskier
New Member
Difference is 10-13% interest rates in the early 90's
Commodities are booming and will continue to boom =high dolllar=low rates
No new rental stock being built in Toronto since the 70's
Commodities are booming and will continue to boom =high dolllar=low rates
No new rental stock being built in Toronto since the 70's
The Condo Observer
Active Member
Let's not forget that even in less conservative financial times developers had to have 70 percent sales before financing kicked in. That percentage has now been raised. Within those pre-sales is also a built in mechanism whereby buyers have to prove to the developer that they have financing - a pre approval from a mortgage granting institution or other sources of funds. These condos are not springing up on speculation, but on hard demand backed by hard sales. So it comes back down to the job and salary criteria mentioned a couple posts above.
That said, interest rates and the appearance of affordability is driving the market, sucking sales from the future. Buyers should all lock in their rates for as long as possible. If purchasing for investment, look into the ten year rates which may appear high in the current environment, but actually are still low compared to historical averages. Locking in a rate for longer periods minimizes shocks to your cash flow / rental income over time.
Last edited:
Riverdale Rink Rat
Senior Member
Your timeline would make more sense...
... if the stock market crash hadn't been 1987.
... if the stock market crash hadn't been 1987.