cdr108
Senior Member
^^^
Eug, Jacek is absolutely correct with his comment.
However, extrapolating this further is exactly what puts us into bubble territory and at risk for a correction. The comment that "people are no longer waiting for the market to come to them but getting in now, with whatever means they have" suggests to me they have thrown caution and rational thought to the wind.
I am not saying they won't be proven right...in fact I readily acknowledge I have been in the "wrong camp" on this one. But it has not been for lack of trying to reason or ponder the problem. Also, I have made decisions which I appreciate, understand the risks, and while I will be hurt, I will not be crying if there is a major correction on this forum or anywhere else and blaming others (the banks, the government, the mortgage lenders etc.) for the fact that I may be in over my head and made decisions to get in now at whatever means I presently have with no ability to compensate for a rise in interest rate which may/may not happen or other unexpected event.
that said, I do sympathize with Jack and others and I am happy they bought when they did. My concern is as expressed before, the further we get out, with prices at $650-700/sq.ft. and 3% interest rates....who do you sell to when/if interest rates go back to historical norms...rents don't cover....the economy perhaps falters....some other event happens. Do you then say "the taxpayer....read me and others" have to bail you out because you chose to gamble and could not cover anymore? This is when I lose my sympathy....especially when the "investor" is sitting on 10 properties with 20% equity and refinancing everything allowing for today's rates without consideration of the "what if scenarios". For the person putting a roof over his head, so long as he puts in reasonable equity...whatever that is... is in for the long term....I have understanding for the logic to jump in.
One further thought, my first home we took basement furniture from my parents home that became our family/living room. There was no question of "SS appliances and granite". Washrooms in which to ballroom dance. You get my gist. My simple point is young people have to appreciate they cannot have everything now and today, despite the advertisements and credit card company's continued attempts and the marketers to tell everyone they deserve everything "today".
i find your last statement quite accurate and the marketing by the developer/RE industry of having the 'lifestyle' of the wanna-be rich and famous is rampant .. jersey shore, housewives of 'x', kardashian (sp???), etc
cheaper and cheaper credit with easier availability the last decade has made the above possible for the average person.
coupled with the digital age where everything is instantaneous, they (ie. 20s/early 30s) expect 'gratification' now.
what took their parents and grandparents decades to acquire by saving and sacrifice, it is wanted/needed in their minds immediately.
personal experience ... my nephew and niece graduated from university several years ago, which was paid by mommy and daddy btw. the nephew through a nissy fit when the parents didn't buy them a condo immediately. after a few years, the parents decided to buy one (well the downpayment at least) and have the kids pay rent for it. i don't know if they are planning on giving it to the kids or keeping it themselves ... frankly i don't think the parents know yet.
back to UDs question ... i'm the owner of SFH and rental property.
economically, buying at $650-700/sq.ft. and 3% interest rates doesn't make financial sense as a landlord.
too much risk and headaches with little/no return (NOI) when one can't take appreciation as a given considering interest rates are at historic lows and prices are inversely related to rates, when incomes and rents have been stagnate for the past decade+ so i can't contribute any rise in prices to the last 2 factors.
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