w.ll.am
Active Member
Yes... because stocks and housing markets are comparable.
/sarcasm.
/sarcasm.
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- Thread starter Solaris
- Start date
cdr108
Senior Member
Both have irrational exuberance and can be highly leveraged ... so yes.
The difference though has to due with liquidity and pricing.
The stock market is much more liquid and is supposed to be forward looking about 6-12 months so pricing reflects what the individual participants feel it is worth considering the future prospects for the company and economy.
The housing market is much less liquid and initial sellers pricing tends to be only forward looking of 25 years irregardless of the immediate economic conditions. It's pretty much guaranteed that valuations will increase in 25 years - that's a no brainer; but the amount of increase will vary based on the initial cost and when purchased in the economic cycle.
Sellers tend to be less flexible in pricing so a listing can sit for months, then more product becomes available and pushes prices lower.
I feel concerned for anyone who put less than 20% downpayment because they could end up with negative equity by the time their mortgage comes up for renewal. It will be a shocker when they have to shell out more $$$ to cover the difference, and find out that all those monthly mortgage payments paid very little towards the principal.
confused5o1
New Member
Its great to see the mortgage crisis now dramatically spilling over to Europe.. its only a matter of time
The Condo Observer
Active Member
Mortgage Specialists...Please respond
I keep hearing that our mortgage markets are more regulated, and that the meltdown happening south of the border cannot really happen here....Of course the financial institutions have already taken a hit, like CIBC due to exposure to the secruitzed mortgage instruments that tanked. Hoping someone well versed in the canadian mortgage industry would chime in at some point and give us some insight..
I keep hearing that our mortgage markets are more regulated, and that the meltdown happening south of the border cannot really happen here....Of course the financial institutions have already taken a hit, like CIBC due to exposure to the secruitzed mortgage instruments that tanked. Hoping someone well versed in the canadian mortgage industry would chime in at some point and give us some insight..
cabbagetowner
Active Member
i don't think canadian lendors have ever been as innovative as their american counterparts. but you would have to have your head in the sand if you think we'll be fully insulated from the credit crisis. money for commercial deals have dried up. even residential lending is getting more careful. appraisals are coming back way to conservative, so it's tougher to get full financing. y
Solaris
Senior Member
Toronto Star - Duncan sounds Ontario economic warning
'Tough times ahead' for province's economy, finance minister says, but not 'a big black hole'
Sep 30, 2008 04:30 AM
Rob Ferguson
Queen's Park Bureau
Ontarians should gird for "tough times ahead," Finance Minister Dwight Duncan warned as he released figures showing the economy shrank slightly in the first six months of the year, despite slight growth in the second quarter.
"There's more uncertainty than I would like as finance minister," Duncan acknowledged yesterday, as the U.S. financial crisis worsened.
But with his fall economic statement due Oct. 22, Duncan was coy when asked what spending will be trimmed as the government copes with lower revenues.
"Whatever restraint is necessary ... it will be fairly modest in the beginning," he said.
While his wording raised the spectre of deeper cuts, Duncan sought to reassure Ontarians.
"We're not looking at a big black hole. We're looking at adjustments in the economy," he told a hastily called news conference to announce the government's second-quarter financial results.
Duncan said Ontario's economy grew slightly, by 0.3 per cent, in the three months from April to June – a rebound from a decline of 0.4 per cent in the first quarter. Taken together, Ontario's economy shrank 0.1 per cent in the first half of the year.
Officials said the second-quarter rise was due to increases in business inventories, and household and business spending, although exports were lower with the manufacturing sector hard-hit by the higher dollar and U.S. slowdown.
Duncan added this is no time to bring in a carbon tax – something his federal Liberal cousins are proposing, with a carbon tax in their election platform.
"One of the things that I think would be a mistake right now is massive shifts in the tax burden at a time when there's uncertainty," he said.
The second-quarter gain means Ontario is not technically in a recession, defined as two consecutive quarters of decline, but Duncan said his biggest fear remains a "protracted" period of little or no growth in the economy.
"I take my cue from the people of Ontario and the people I talk to are nervous," he added.
But thousands of laid-off manufacturing workers feel like the province is in a recession, opposition critics said.
The Liberals need to do more to help the economy – such as tax cuts to spur business – than they've been doing with their five-point plan that includes more worker retraining, said Progressive Conservative finance critic Ted Chudleigh.
NDP Leader Howard Hampton said the Liberal government is "out of touch."
'Tough times ahead' for province's economy, finance minister says, but not 'a big black hole'
Sep 30, 2008 04:30 AM
Rob Ferguson
Queen's Park Bureau
Ontarians should gird for "tough times ahead," Finance Minister Dwight Duncan warned as he released figures showing the economy shrank slightly in the first six months of the year, despite slight growth in the second quarter.
"There's more uncertainty than I would like as finance minister," Duncan acknowledged yesterday, as the U.S. financial crisis worsened.
But with his fall economic statement due Oct. 22, Duncan was coy when asked what spending will be trimmed as the government copes with lower revenues.
"Whatever restraint is necessary ... it will be fairly modest in the beginning," he said.
While his wording raised the spectre of deeper cuts, Duncan sought to reassure Ontarians.
"We're not looking at a big black hole. We're looking at adjustments in the economy," he told a hastily called news conference to announce the government's second-quarter financial results.
Duncan said Ontario's economy grew slightly, by 0.3 per cent, in the three months from April to June – a rebound from a decline of 0.4 per cent in the first quarter. Taken together, Ontario's economy shrank 0.1 per cent in the first half of the year.
Officials said the second-quarter rise was due to increases in business inventories, and household and business spending, although exports were lower with the manufacturing sector hard-hit by the higher dollar and U.S. slowdown.
Duncan added this is no time to bring in a carbon tax – something his federal Liberal cousins are proposing, with a carbon tax in their election platform.
"One of the things that I think would be a mistake right now is massive shifts in the tax burden at a time when there's uncertainty," he said.
The second-quarter gain means Ontario is not technically in a recession, defined as two consecutive quarters of decline, but Duncan said his biggest fear remains a "protracted" period of little or no growth in the economy.
"I take my cue from the people of Ontario and the people I talk to are nervous," he added.
But thousands of laid-off manufacturing workers feel like the province is in a recession, opposition critics said.
The Liberals need to do more to help the economy – such as tax cuts to spur business – than they've been doing with their five-point plan that includes more worker retraining, said Progressive Conservative finance critic Ted Chudleigh.
NDP Leader Howard Hampton said the Liberal government is "out of touch."