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Housing affordability drops to 18-year low ... (pg. 2)
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| malek |
it was 32% for Montreal, now 37, over 10% of degradation!...
Its the ing employers, they don't want to pay anything, its the 1930s repeat... way too much profit, not enough for the working class to be able to afford the commodities produced. |
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| Vivid Boy |
| quote: | Originally posted by Jayx1
actually he made it... lost it all and then some and made it all back. A guy who can make a fortune twice is quite impressive. He is a celebrity because hes a billionaire, not the other way around. As for kiyosaki and his books, same thing. These guys have just proven that they know how to create new business opportunities over and over.
I dont know either of them personally and i dont know whether they are men to like or hate. But im certainly not going to hate on people because they are successful! |
buddy dont think he made it back by himself. donald trumps father is the man pulling the strings my friend. If you want to talk about real estate tycoons talk about donald trumps father who made millions in land development back in the 50's and 60's and gave the trump's the trump name in real estate.
Donald is a nobody, hes a trust fund baby. he should stick to seminars and comb overs |
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| MarkT |
the market is already settling down in the GTA and in some other markets that have been running out of control in recent years (like Calgary). GTA is not going to see the same massive price increasese this year.
40 year amortization option, and a plethora of new qualification programs from the insurers (plus a new insurer in the market), are making it easier than ever to buy a home.
The Prime rate, based on the Bank of Canada's overnight rate, has dropped a full percentage point in less than 4 months with further cuts likely to come...so even if the fixed rates don't drop, there are still low interest options for those who know how to restrain themselves.
the problem is that instead of using these options to keep reasonable costs lower, people simply buy something more expenseive (and take on bigger mortgages) or buy before they are truly financially ready, which is NOT what they should be doing. Or they see their existing equity from price increases as "wealth" and refinance to do renos, buy cars, go on trips, etc. and end up simply taking on more debt.
I see this ALL the time in my job in mortgage sales...people being irresponsbile by taking on too much. so it's fine to blame the market, blame the economy, blah blah...but it's the people themselves who are often being irresponsible. |
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| DigiNut |
What a brilliant ing analysis, inflated housing prices driven by a solid job market. I'm sure that's the same reason gas prices are going up, too. And that also explains why Edmonton is so much cheaper... oh wait, no it doesn't.
Does anybody even stop to consider the supply-side equation anymore, or did that die with the Reagan administration? Economic growth doesn't cause that level of inflation; that only happens when demand outstrips supply, and that's been the case for a long time in Toronto. Take explosive immigration, layers upon layers of bureaucratic red tape for builders, sellers, AND buyers, "affordable" housing and unfair rent control programs that lower profitability and make all non-public housing far less affordable, and ever-rising hydro and gas costs, and add to that a little economic growth and very low mortgage rates (I've seen as low as 5%), and then you have a mondo ty real-estate market.
As for Donald Trump, with the game he's in, you have to pay to play. Most people can't afford to invest the kind of cash he does, and even if they could, they'd still probably screw it up. Picking Donald Trump as your model for personal finance is like picking Apple for your marketing model; just because they can sell a product by pissing on everyone who doesn't already own one doesn't mean you can get away with it.
Kiyosaki is a hack who's made his (small) fortune from peddling easy answers, sprinkled liberally with abject lies and half-truths. If you think that selling snake oil counts as "creating new business opportunities", I wish you the best of luck, but you might first want to check on Kiyosaki's net worth. Unless he's got millions stashed away in some offshore bank account, it's nothing to write home about. You'll probably find more success in a typical MLM scam.
And Malek, quit whining about the employers and the poor, poor "working classes". Last time I checked, you worked in software and the salaries for us tech workers have doubled over the past 20 years. You think it's all fun and games for the execs and their swimming pools filled with money, but you might be surprised at how many sleepless nights they've spent wondering if there's still going to be a business to run tomorrow morning. You think they're just exploiting people? Try starting your own company then, if you think it's so simple - I'm sure you'll have no trouble finding talented workers at double their market value. On the other hand, you might run into a few problems paying the lease on your office space (back to those pesky real-estate prices!) |
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| Pett |
| quote: | Originally posted by DigiNut
very low mortgage rates (I've seen as low as 5%) |
4.35%
yup im living the dream |
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| jeeper_095 |
| quote: | Originally posted by Pett
4.35%
yup im living the dream |
hopped in the same wagon...4.4%
when do you all forecast the housing market cooling down bit? Some say that early June is about time to purchase investment properties ( for those who can afford it).
Discuss! |
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| MarkT |
| quote: | Originally posted by DigiNut
[COLOR=#99CCEE]What a brilliant ing analysis, inflated housing prices driven by a solid job market. I'm sure that's the same reason gas prices are going up, too. And that also explains why Edmonton is so much cheaper... oh wait, no it doesn't.
Does anybody even stop to consider the supply-side equation anymore, or did that die with the Reagan administration? Economic growth doesn't cause that level of inflation; that only happens when demand outstrips supply, and that's been the case for a long time in Toronto. Take explosive immigration, layers upon layers of bureaucratic red tape for builders, sellers, AND buyers, "affordable" housing and unfair rent control programs that lower profitability and make all non-public housing far less affordable, and ever-rising hydro and gas costs, and add to that a little economic growth and very low mortgage rates (I've seen as low as 5%), and then you have a mondo ty real-estate market.
...[COLOR] |
there is nothing wrong with that analysis. the job market is part of the reason that demand is high. It might be more expensive than ever to buy a home, but more people are in positions to do so (for reasons I mentioned earlier, like low rates, extended amortization options, and flexible insurer programs...and also due to booming job markets in many areas).
Edmonton is far from cheap right now. Calgary, Edmonton, and even parts of Saskatchewan have been blowing up and seeing massive price increases over the last several years...and it is the job market.
| quote: | Saskatchewan: During 2007, the Saskatchewan economy was quite buoyant, thanks to a strong natural resource sector, high labour force participation and an improved migration
picture. Saskatchewan has become an alternative to Alberta for economic prosperity and less expensive housing. Housing starts jumped from 3,715 units in 2006 to about 6,000 units in 2007, a 61.7 per cent gain, making 2007 the best performance in over 20 years. Modest
declines in new home construction to 5,600 units is expected in 2008. The average MLS® price in Saskatchewan should rise by 31.7 per cent in 2007, 26.4 per cent in 2008 and 8.2 per cent in 2009. |
and those are after ridiculous increases already. Calgary, Edmonton and parts of BC have seen the same. people are moving out there from here or further east. you can be a "driver" for a company and make 60-70k, lol.
| quote: | Net inter-provincial migration to Alberta, British Columbia
and Saskatchewan will continue to support demand for both rental and
ownership housing in these provinces in 2008. |
source: CMHC Housing Market Outlook - 1st Quarter 2008 |
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| SuperJimbo |
Here is a taste of what is going on in the housing market in the US...and the ripple effect on the US (Global) financial system...madness...
The Financial Times
We will never have a perfect model of risk
By Alan Greenspan
March 16 2008 18:25
The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war. It will end eventually when home prices stabilise and with them the value of equity in homes supporting troubled mortgage securities.
Home price stabilisation will restore much-needed clarity to the marketplace because losses will be realised rather than prospective. The major source of contagion will be removed. Financial institutions will then recapitalise or go out of business. Trust in the solvency of remaining counterparties will be gradually restored and issuance of loans and securities will slowly return to normal. Although inventories of vacant single-family homes – those belonging to builders and investors – have recently peaked, until liquidation of these inventories proceeds in earnest, the level at which home prices will stabilise remains problematic.
The American housing bubble peaked in early 2006, followed by an abrupt and rapid retreat over the past two years. Since summer 2006, hundreds of thousands of homeowners, many forced by foreclosure, have moved out of single-family homes into rental housing, creating an excess of approximately 600,000 vacant, largely investor-owned single-family units for sale. Homebuilders caught by the market’s rapid contraction have involuntarily added an additional 200,000 newly built homes to the “empty-house-for-sale” market.
Home prices have been receding rapidly under the weight of this inventory overhang. Single-family housing starts have declined by 60 per cent since early 2006, but have only recently fallen below single-family home demand. Indeed, this sharply lower level of pending housing additions, together with the expected 1m increase in the number of US households this year as well as underlying demand for second homes and replacement homes, together imply a decline in the stock of vacant single-family homes for sale of approximately 400,000 over the course of 2008.
The pace of liquidation is likely to pick up even more as new-home construction falls further. The level of home prices will probably stabilise as soon as the rate of inventory liquidation reaches its maximum, well before the ultimate elimination of inventory excess. That point, however, is still an indeterminate number of months in the future.
The crisis will leave many casualties. Particularly hard hit will be much of today’s financial risk-valuation system, significant parts of which failed under stress. Those of us who look to the self-interest of lending institutions to protect shareholder equity have to be in a state of shocked disbelief. But I hope that one of the casualties will not be reliance on counterparty surveillance, and more generally financial self-regulation, as the fundamental balance mechanism for global finance.
The problems, at least in the early stages of this crisis, were most pronounced among banks whose regulatory oversight has been elaborate for years. To be sure, the systems of setting bank capital requirements, both economic and regulatory, which have developed over the past two decades will be overhauled substantially in light of recent experience. Indeed, private investors are already demanding larger capital buffers and collateral, and the mavens convened under the auspices of the Bank for International Settlements will surely amend the newly minted Basel II international regulatory accord. Also being questioned, tangentially, are the mathematically elegant economic forecasting models that once again have been unable to anticipate a financial crisis or the onset of recession.
Credit market systems and their degree of leverage and liquidity are rooted in trust in the solvency of counterparties. That trust was badly shaken on August 9 2007 when BNP Paribas revealed large unanticipated losses on US subprime securities. Risk management systems – and the models at their core – were supposed to guard against outsized losses. How did we go so wrong?
The essential problem is that our models – both risk models and econometric models – as complex as they have become, are still too simple to capture the full array of governing variables that drive global economic reality. A model, of necessity, is an abstraction from the full detail of the real world. In line with the time-honoured observation that diversification lowers risk, computers crunched reams of historical data in quest of negative correlations between prices of tradeable assets; correlations that could help insulate investment portfolios from the broad swings in an economy. When such asset prices, rather than offsetting each other’s movements, fell in unison on and following August 9 last year, huge losses across virtually all risk-asset classes ensued.
The most credible explanation of why risk management based on state-of-the-art statistical models can perform so poorly is that the underlying data used to estimate a model’s structure are drawn generally from both periods of euphoria and periods of fear, that is, from regimes with importantly different dynamics.
The contraction phase of credit and business cycles, driven by fear, have historically been far shorter and far more abrupt than the expansion phase, which is driven by a slow but cumulative build-up of euphoria. Over the past half-century, the American economy was in contraction only one-seventh of the time. But it is the onset of that one-seventh for which risk management must be most prepared. Negative correlations among asset classes, so evident during an expansion, can collapse as all asset prices fall together, undermining the strategy of improving risk/reward trade-offs through diversification.
If we could adequately model each phase of the cycle separately and divine the signals that tell us when the shift in regimes is about to occur, risk management systems would be improved significantly. One difficult problem is that much of the dubious financial-market behaviour that chronically emerges during the expansion phase is the result not of ignorance of badly underpriced risk, but of the concern that unless firms participate in a current euphoria, they will irretrievably lose market share.
Risk management seeks to maximise risk-adjusted rates of return on equity; often, in the process, underused capital is considered “waste”. Gone are the days when banks prided themselves on triple-A ratings and sometimes hinted at hidden balance-sheet reserves (often true) that conveyed an aura of invulnerability. Today, or at least prior to August 9 2007, the assets and capital that define triple-A status, or seemed to, entailed too high a competitive cost.
I do not say that the current systems of risk management or econometric forecasting are not in large measure soundly rooted in the real world. The exploration of the benefits of diversification in risk-management models is unquestionably sound and the use of an elaborate macroeconometric model does enforce forecasting discipline. It requires, for example, that saving equal investment, that the marginal propensity to consume be positive, and that inventories be non-negative. These restraints, among others, eliminated most of the distressing inconsistencies of the unsophisticated forecasting world of a half century ago.
But these models do not fully capture what I believe has been, to date, only a peripheral addendum to business-cycle and financial modelling – the innate human responses that result in swings between euphoria and fear that repeat themselves generation after generation with little evidence of a learning curve. Asset-price bubbles build and burst today as they have since the early 18th century, when modern competitive markets evolved. To be sure, we tend to label such behavioural responses as non-rational. But forecasters’ concerns should be not whether human response is rational or irrational, only that it is observable and systematic.
This, to me, is the large missing “explanatory variable” in both risk-management and macroeconometric models. Current practice is to introduce notions of “animal spirits”, as John Maynard Keynes put it, through “add factors”. That is, we arbitrarily change the outcome of our model’s equations. Add-factoring, however, is an implicit recognition that models, as we currently employ them, are structurally deficient; it does not sufficiently address the problem of the missing variable.
We will never be able to anticipate all discontinuities in financial markets. Discontinuities are, of necessity, a surprise. Anticipated events are arbitraged away. But if, as I strongly suspect, periods of euphoria are very difficult to suppress as they build, they will not collapse until the speculative fever breaks on its own. Paradoxically, to the extent risk management succeeds in identifying such episodes, it can prolong and enlarge the period of euphoria. But risk management can never reach perfection. It will eventually fail and a disturbing reality will be laid bare, prompting an unexpected and sharp discontinuous response.
In the current crisis, as in past crises, we can learn much, and policy in the future will be informed by these lessons. But we cannot hope to anticipate the specifics of future crises with any degree of confidence. Thus it is important, indeed crucial, that any reforms in, and adjustments to, the structure of markets and regulation not inhibit our most reliable and effective safeguards against cumulative economic failure: market flexibility and open competition.
The writer is former chairman of the US Federal Reserve and author of The Age of Turbulence: Adventures in a New World
http://www.ft.com/cms/s/0/edbdbcf6-...?nclick_check=1 |
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| Jem_hadar |
| quote: | Originally posted by Pett
4.35%
yup im living the dream |
JESUS CHRIST Petty!!
Wow dude. All I can say is "wow" and "congrats"
Incredible dude. Simply incredible. |
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| Angx |
| @ 4.35 % thats amazing. Hopefully it wil lbe the same by the summer so I can make some $ out of this mother F*cker |
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| MarkT |
4.25% here ;) (1.00% < Prime).
Anyone who elected to take a deeply discounted variable rate is pretty damn happy now...especially with further cuts to the Bank of Canada's overnight rate being a likely scenario.
For a quick summary of the current 'sub-prime crisis' in the U.S. that is impacting worldwide markets, check out the following article, while also keeping in mind that major financial institutions here don't engage in such skethcy lending practices...so what happened in the U.S. market can't and won't happen here.
http://www.thestar.com/Business/article/346989
| quote: | Mar 17, 2008 05:06 PM
David Olive
Business Columnist
You wouldn't think something as prosaic as housing could trigger a global credit crisis. But that's what we're in the midst of, and that's how it started, when illustrious financial institutions like brokerage giant Bear Stearns & Co. of New York began buying "bundles" of dubious "subprime" – or junk – mortgages issued earlier this decade to low-income Americans. Many of them had poor credit histories and no down-payment to offer, and were even encouraged by some unscrupulous lenders to lie about their income.
Bear Stearns signalled the credit crisis last summer when two of its hedge funds, stuffed with junk mortgages and other shoddy investments, could not be refinanced. Bear Stearns found it could no longer flip assets to the next sucker – a bank in Zurich, a brokerage in Frankfurt, another hedge fund in London, or a municipal government pension fund in Lyon.
That game of passing hot potatoes, engaged in by scores of the world's largest banks and securities firms over the past few years, including some of Canada's Big Five banks, came to a screeching halt last summer when the financial wizards suddenly began to doubt the triple-A ratings the junk was labelled with, and subprime mortgages began to default on monthly payments that had suddenly doubled over the low "teaser" rates that lured them into buying houses they couldn't afford.
In recent months, hundreds of thousands of low-income U.S. homeowners have defaulted on their mortgages, unable to cope with payments that suddenly doubled over the initial "teaser" rates by which they were drawn into taking on unsustainable debt. An estimated two million Americans may lose their homes before the subprime crisis runs its course over the next two years.
Britain's Northern Rock PLC, the largest U.K. mortgage lender, was the first corporate victim of the collapse, bailed out by the Bank of England earlier this year.
Late Sunday, the U.S. Federal Reserve Board rescued Bear Stearns, which was hours away from filing bankruptcy papers, by backstopping its forced merger with JP Morgan Chase & Co., America's third-largest commercial bank. Stocks in financial institutions worldwide took a hit Monday, due to investor uncertainty about "time-bomb" writeoffs hidden at other large financial institutions.
And why not? Bear Stearns assured the public to the end, late Thursday, that it was in fine shape. On Friday, it informed Washington it was at death's door.
The question now is how solvent, exactly, is the rest of the global financial system, which has been raising interest rates on loans to shore up its collective balance sheet even as the Fed is expected to slash its key lending rate today by as much as 1.25 per cent to ease the crisis and stimulate a U.S. economy that many economists believe already is in recession.
More than a few angry bankers on Wall Street are saying Bear Stearns should have been left to die as punishment for reckless investing practices that encouraged its peers to buy their own junk-mortgage portfolios without a scintilla of due diligence.
It doesn't work that way, of course. Today's global financial system is so bound together by inter-bank loans that every large institution is "too big to fail" for fear of a calamitous domino effect.
And all that because a few years ago, predatory mortgage lenders were able not only to talk low-income prospective home owners into taking on unsustainable debt, but to flip these suspect mortgages to ever larger and more remote financial institutions.
If it's any consolation, in the rushed takeover of Bear Stearns, the value of company shares held by its CEO plummeted in value to just $13 million (U.S.). They were worth $1.2 billion in January of last year, only 15 months ago.
But at least he still has a house.
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| malek |
i had 3%, not its 4% ;)
diginut: I'll come back to you, you didn't get my drift. |
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