Real Estate Prices in Van

alert klaxon

Thread derailment has occured.

sits back and waits for Gooch to post

• This message is hidden because shrankman is on your ignore list. *

I finally got tired of reading Shranky's nonsense

• This message is hidden because shrankman is on your ignore list. *

I finally got tired of reading Shranky's nonsense

:lol: :lol:

The only other person I ever threw on ignore was Hobo_man - mainly cause he had a weird man-fetish for Danny Brody (I still don't know who that is) and refused to spell anything correctly.

Shranky just douches up every thread he gets into - it's painful to read.

I have attached an interesting chart indicating the Japanese market that was soooo HOT once before.

Just something to consider.
Pedro

The late 1980's Japan real estate crash was something to watch for sure. During the height of the market the Imperial grounds in Tokyo were worth more than all of California.

My in-laws had a small place in Osaka and it went from 200k to 800k overnight. Everyone started cashing in and buying up into larger places with crazy mortgages that were into the millions. The banks started getting greedy and many started handing out mortgage loans to people who could never hope to pay it off.

It was a time bomb, with a nationwide boom and everyone holding onto a mortgages that they should never had been qualified for it was the perfect storm. When it did crash many people who now had a million dollar mortgage and a house worth 80% less walked away and defaulted. This was also on a nationwide scale and the banks also started to default.

The government had been keeping many of the banks alive but in the end only the largest ones did survive. My in-laws did not sell and during the boom/bust and holding onto the property was the best move.

for years you could get a 0.0% interest rate for a mortgage in Japan.

I do not know if that type of crash could happen again.

Thread back on track - One thing I do find concerning, is the mortgage trends that are occurring. I'm all for trying to help people get into home ownership, but 30+ year terms (I've heard that a 50yr term is available) and zero down mortgage's are just asking people to get in over their heads.

Thread back on track - One thing I do find concerning, is the mortgage trends that are occurring. I'm all for trying to help people get into home ownership, but 30+ year terms (I've heard that a 50yr term is available) and zero down mortgage's are just asking people to get in over their heads.

It depends. If you do not mind giving the banks that extra interest for the new 35 and 50 year amortization. It can be about the same as a 2 bedroom apt rent.

I was a little concerned also with what your talking about, especially the new interest only mortgage "where you only have to pay the interest on your mortgage amount" and never pay down the principle. But then once you think about the money each month is about the same as rent then your not taking a large risk really. People get kicked out of apartments all the time to.

Using real estate like the stock market would be scary for me, but as the roof over my head its not so scary.

SIlk the other thing to go with you Japan data is that they invested heavily outside of the country, Cali and Hawaii, at one time I believe 75% of the office space in LA was Japanese owned.

Moms dead so thats a wierd fetish you have

How was I supposed to know your mother killed herself?

Derailed

PLAY NICE PEOPLE.

If you can't discuss this without getting bitchy I'll shut the thread.

No need to suggest armpit fetishes or involve mothers.

Have a little respect for everyone's opinion - even when you feel they are wrong. It actually makes the discussion more interesting that way. You actually find out where they are coming from.

So PLAY NICE.

Sermon over.

slams back Caffine and Glenfiddich

Atitude adjusted.

Pedro,

I hate to be on gw's side here (haha) but I'll point out where the Vancouver - US comparison is difficult to maintain. You'll have to do a lot of research on your own. I've linked a bunch of research under my login as LeeLau in www.realestatetalks.com so that will help you but you're a resourceful chap so hope this will help.

1. A significantly higher percentage of Vancouver homeowners bought their residences as principal residences compared to Australia and the US in particular. In general, principal residence owners are quite a bit more impervious to equity erosion then investment residence owners due to a variety of factors (ie. difficulty and expense of foreclosure, long time-frame outlook of principal residence owners etc). Source CMHC study. Various Economist articles.

2. The US has ARMs, interest-free products and other financing that is significantly cheaper then Canada's financing options. Source - various Economist articles. Article and study by Phillps Hager North

3. The US housing bubble implosion articles invariably abstract housing price decreases from areas where the prices increased the most. In almost all those cases house prices in those geographic areas (NY, Boston, Bay Area) increased by a factor of 1.5x to 2x more then did housing prices in Vancouver.
Multiple sources; Economist, WSJ, various print media.

4. Difficulty of build out to increase supply in Vancouver. Someone else talked about geographic constraints. Despite the transportation infrastructure capital budgets planned, there still are significant barriers to people living far away from core areas of employment thus placing barriers on expansion of building out residential housing inventory (relative to other cities). Source is Business In Vancouver article of 6 months ago comparing development permits and timelines for various cities throughout North America

I know you are talking about Vancouver and your examples are clearly local and I agree that Vancouver has indeed enjoyed the benefits of the real estate boom but by no means makes the Wikipedia article WRONG.

I will summerize my understanding of the article and please point out where it appears to be WRONG:

1. DotComs crash sending the US into a minor recession.
2. Speculators/Investors look for a new place to invest given the instability of the stock market.
3. US economical head huncho jump-starts US economy by lowering interest rates and therefore encouraging speculators to invest into real estate.
4. Demand for real estate drives prices up.
5. US citizens thinking that all of a sudden they have more money (since their house is worth more) go on a spending spree (on CREDIT of course) driving the US economy into the Green increasing consumer spending/confidence. Adding to this, US media perpetuates real estate investment myths and more and more jump on the band wagon driving prices even higher.
6. US house prices level off leading to waining consumer confidence and spending inherently leading to a slow down in the US economy.
7. As a logical consequence of an economcal slow-down people are less confident to purchase real estate leading to lower house prices. Adding to this, 2007 is the first year in which mortgages with record-low interest rates are expiring leading home owners with a much higher (30% average) morgage to pay beyond 2007 hence leading to an even lower consumer confidence which results in an even greater slow-down in economy leading a recession which of course leads to lower housing prices….

Please point out where the article doesn't make sense.

Of course the above cannot exactly be applied to Vancouver but many factors outlined in it do apply…

Pedro

For someone looking to buy a principal residence this thread has been super informative.