Vancouver Forum: Home Sales Up?! What The..are you serious

smelly, on 04 November 2009 - 12:36 AM, said:

Studies have shown otherwise.

Match.com - Everyone knows someone who met on Match.com. Now it’s your turn. Search Now!

I just can't figure out why some people have such a fear of the minimum wage being raised up. Big business suits give themselves raises, whether times are good or not. Our own government officials give themselves huge raises, whether times are good or not. The rich are certainly not getting any poorer.

And yet, out of all the capitalistic greed that is slowly but surely bringing the world to its eventual downfall, people still cry about the "huge repercussions" that will follow if BC's lowest paid workers are paid a buck or two more an hour.

Case in point - Florida & California real estate bubble that HAS burst !

<H3 class=post-title>

Adjustable-rate mortgages, or ARMs, the vehicle of choice during the housing boom, are now turning into a nightmare for those home owners that took them. ARMs have dominated mortgage delinquencies and home foreclosures.

Nationally, 48 percent of subprime ARM loans were at least one payment past due in the MBA's latest report.

In Florida, the subprime ARM delinquency rate was more than 60 percent.
And, in the second quarter of 2008, Florida and California accounted for 58 percent of the nation's prime ARM foreclosure starts.


With home values dropping anywhere from 20 to 50%, returning values back to 2003 prices, most South Floridians with option ARMs are unable to refinance because their loan is upside-down, meaning they owe more than the house is worth.


Adding to the problem were all of the toxic ARMs that were developled during the bubble, to put people in houses they couldn't afford, and to pay higher commissions to the salesmen pushing them.

Often called ''liar's loans'', these were often given to the borower without any income verfication (anyone remember Casey Serin?) , interest-only loans that often balloon when adjusting and ''option'' ARMs in which the homeowner initially may choose from a variety of payments, including one incredibly insane option that doesn't even cover the monthly interest amount, adding to the principal of the loan (so-called negative amortization).



Adding to the problem, rates are rising. Despite Bernanke and the Obama administration printing up hundreds of billions of dollars, and buying up hundreds of billions in Treasuries and MBS's, yields are higher than at the beginning of the year.

The average rate for a 30-year loan jumped from 4.82 percent a week ago to 5,45 percent by the end of the week. Every 100bp increase means the borrower has about 10% less buying power, based on payment.



It doesn't really matter where rates are if you are in a negative equity situation, or if you lost your job.

How many people have or want to write a check for $50,000 to refinance a house? Most people are stuck in these loans, and have to make the decision to either keep paying or walk way.

As evidenced by the massive increase in foreclosures, it appears people are choosing the latter.


To get an idea of how large this problem is, for the next two years we are going to see about 50 billion dollars a month in resets or recasts. That is a ridiculous amount. If we are running at 40 to 60% delinquency rates now, what is going to happen when this next wave of inventory floods the market, depressing prices further?


Is Canada real estate pricing setting itself up for more of the same ????</H3>

This post has been edited by Yvr Man: 04 November 2009 - 06:17 AM

razzmatazz, on 04 November 2009 - 02:50 AM, said:

Its not a fear - it just wont do what you think it'd do..

Again - it's simple math.. start a new topic and i'll explain later at work when im bored..

the only RE sales that are steady in BC is fom Chinese Triad investment, although I am not sure if it is beneficial to Canada in the long run. The same goes for TO and Montreal.

DocWatson, on 04 November 2009 - 08:16 AM, said:

China again! Once again Sinophobia raises its ugly head.

smelly, on 03 November 2009 - 09:08 PM, said:

This has to the the stupidest post yet smelly!!! You'll NEVER make money by paying someone rent.

so if I'm living paycheck to paycheck with little to no disposable income left after paying my rent, I'm still making money?!!

brilliant.

Hint, consider the same scenario as above, but paying down a mortgage instead of rent...

There, is the puck dropping o smelly one?

AA Lavey, on 15 August 2009 - 11:51 AM, said:

Hmm, some interesting comments.

So if the average mortgage here is about $250,000, then the median (middle) is probably $350-375,000?

That's a staggering amount, average or median - considering the average house price in most parts of North America is $250,00 or less.

So Vancouverites are probably the most indebted homeowners on the continent.

BTW, So where do you see inflation going? Up or down?

Interest rates?

Would be interesting to read your explanation.

.or?, on 04 November 2009 - 08:52 AM, said:

Interest rates as I have read will start to move mid-late 2010 which is when the first signs of inflation will show. Definitely an upward trend in the long term
Still not going to be a rapid rise.
Oil price will be the tell all for the Canadian economy. Once we cross 100 a barrel things will look a lot better.

Vancouver compared to just Canadian median pricing is higher but the desire to live here is obviously not a fad. We continue to see positive population growth even in this recession. That said it wasnt long ago that the NDP had 50 000 people leaving here in a 2 year period. It could happen again in which case the housing market would drop

schmoozer, on 04 November 2009 - 08:46 AM, said:

I explained the math on the previous page. Even if you somehow find somewhere to rent which is the same price as your monthly mortgage - the math still doesnt work out at the moment. But the reality is, most equivalent properties are cheaper to rent at the moment than buy - but even if that wasnt the case (and im sure you're already searching for something to prove me wrong here) - even if that wasnt the case.. even if you could find somewhere thats the same price to rent than buy.. long term it can work out better for you to rent.

The math is on the previous page, it's not hard to understand.. even a child could figure it out.

.or?, on 04 November 2009 - 09:52 AM, said:

...and you can get so much more in other places for waaaaaay less.

smelly, on 04 November 2009 - 01:36 AM, said:

Huh?? whaaa?? MATH?!!

smelly I know this is your stock retort for apparently everything here but I made no reference to numbers or figures whatsoever.

Pay more attention you idiot!

which one's yours smellly?

^^
Isn't that Hamilton, Ontario?

schmoozer, on 04 November 2009 - 12:54 PM, said:

On marienstrasse in herrenberg.

This post has been edited by smelly: 05 November 2009 - 01:20 AM

Where do you rent advocates think your money is going? You're paying someone else's mortgage, but you think buying is stupid?

The average person doesn't have the investment savvy or discipline to pay lower rent while investing the remainder. Besides, markets crash and stocks become worthless. Land does not. And the economy would only worsen without new housing starts and subsequent job creation.

The likelihood of pension funds collapsing is greater than a total, permanent market/mortgaging collapse. Meaning, the longer you wait, the greater risk you face of being a retiree paying 90% of your meager monthly income to someone whose mortgage you paid off years ago.

I don't have anything against renters, but I paid over $100K in rent and have nothing to show for it. I'll take my chances and assume the sky isn't going to fall. That said, I'm glad I bought in the 'burbs overlooking DFO-protected park land, rather than a ridiculously overpriced box in the sky downtown.

Zebra, on 05 November 2009 - 09:46 AM, said:

Bang on!!