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Real-estate slump could clip forecasts (TC)

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Re: Real-estate slump could clip forecasts (TC)

Postby otxena on Mon Mar 11, 2013 9:56 pm

Idk, I think there is so much more out there than what Garth turner says. Each house is going to depend on when someone bought it, what they are willing to accept for an offer, how bad they need to sell. Unless they have to leave here, no one is going to take a big fat loss on their house. People seem to be thinking they can just lowball 20% - if you find the right situation that can work but it won't for most who don't need to sell. Everyone wants to encapsulate the market in a statement or quote . . . You just can't. Some things are still selling WAY over assessment (as some should . . .last time our house was physically assessed for ex. was 1936, two major renos/additions ago, not that we would be in the aforementioned position) and some houses that are just junk that would have made a mint a few years ago are forced to assess the quality of their offerings and be more reasonable in their expectations. It's just.not.that.simple. We are looking right now and when the right house, not a p.o.s., comes up, we will go for it rather than waiting on what some analyst says. One change in government policy can change everything.
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Re: Real-estate slump could clip forecasts (TC)

Postby otxena on Mon Mar 11, 2013 9:58 pm

And yes yes to Mr. Barnard with it never being risk free. Once you're "in", you buy and sell as your life dictates, and hope the market works in your favour. It's an investment; you win some and you lose some.
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Re: Real-estate slump could clip forecasts (TC)

Postby quest on Mon Mar 11, 2013 10:39 pm

.....because of living in the co-op that had reasonably rent I'm sure this gave you a better chance to save a decent down payment which made buying easier for your family .You might be one of the lucky ones who comes out ahead .Other people come out ahead investing and renting . I'm sure it helps with your brother in the trades for advise ,good advise can help keep reno cost down big time
Anyways sounds like this works for your family.
Just like renting for sum works better for their family for the time being .surely you see this

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Re: Real-estate slump could clip forecasts (TC)

Postby TazDevil on Tue Mar 12, 2013 6:12 am

Be a yardstick of quality. Some people aren't used to an environment where excellence is expected.

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Re: Real-estate slump could clip forecasts (TC)

Postby TazDevil on Tue Mar 12, 2013 6:22 am

Be a yardstick of quality. Some people aren't used to an environment where excellence is expected.

Steve Jobs
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Re: Real-estate slump could clip forecasts (TC)

Postby bigaboy on Tue Mar 12, 2013 7:22 am

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Re: Real-estate slump could clip forecasts (TC)

Postby bigaboy on Tue Mar 12, 2013 7:50 am

Last edited by bigaboy on Tue Mar 12, 2013 10:33 am, edited 1 time in total.
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Re: Real-estate slump could clip forecasts (TC)

Postby OnceHarmony on Tue Mar 12, 2013 8:38 am

Don't go broke trying to look rich - unknown
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Re: Real-estate slump could clip forecasts (TC)

Postby DELETEPLEASE on Tue Mar 12, 2013 9:48 am

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Re: Real-estate slump could clip forecasts (TC)

Postby DELETEPLEASE on Tue Mar 12, 2013 10:02 am

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Re: Real-estate slump could clip forecasts (TC)

Postby Arran McLellan on Tue Mar 12, 2013 12:59 pm

This is a great thread...

Remember that predicting is NOT an exact science. Economists have a 50% chance of being correct just like a stock broker.

Supply and demand is what fundamentally drives the market.

Buyers are waiting for lows and Seller's are looking for a rebound. At the end of the day each person has different circumstances and that is what will dictate what they do in terms the housing market.

A basic tenet of modern economic theory is that low interest rates promote economic activity and create growth (and support real estate prices), and high interest rates retard growth. This relates to the availability of capital and the fact that all businesses need capital to grow. So interest rates are both an indicator of the current level of economic activity and a tool to be used by governments to control economic activity and therefore by proxy inflation as well. The Great Recession of 2008 to 2010 showed this, as governments worldwide (including in the U.S.) slashed interest rates to less than 1 percent for an extended period of time to stimulate economic growth. Increasing interest rates are considered a negative for real estate values as higher rates discourages borrowing.


While the historical rule has been that real estate is a good asset class to own in times of inflation, this is only true in a relative sense and is again closely connected to economic cycles. Typically, real estate investments do not do particularly well at the beginning of an inflationary economic cycle. This is because income related to real estate (rent and so forth) generally does not increase until property values increase, which tends to not occur until an inflationary cycle has been clearly established (several months or even a year or more). It boils down to prices for food, clothes and the like increasing early in an inflationary cycle, but it takes time for that effect to "trickle up" and reflect in higher property values. However, too much inflation for too long (hyperinflation) will wreck an economy by devaluing the currency (leading to recession/depression and lower real estate prices).

In Victoria we have a diverse economy and housing prices reflect this. However, we are seeing an increase in vacancy rates and lower home prices due to the lack of consumption which will continue to drive prices down.
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Re: Real-estate slump could clip forecasts (TC)

Postby bigaboy on Tue Mar 12, 2013 1:12 pm

You forgot to say.......It's a great time to buy. :D
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Re: Real-estate slump could clip forecasts (TC)

Postby OnceHarmony on Tue Mar 12, 2013 5:28 pm

[/quote]Sure. But the reality is that Victoria is a relatively high-priced market even after it corrects. So if you are not a high earner, you will be over your 25% limit if you want a house. Even at the bottom of the last correction, it still took 28% of the median gross economic family income to buy a detached house in Victoria (with a 25 year mortgage). Was that risky? Perhaps, but it was also an excellent move, as prices increased massively over the next 10 years.

I don't disagree with your assessment of increased risk, but using this 25%/15 year guide as a basis for whether to buy or not would not have necessarily served one well in the past in Victoria.[/quote]


It doesn't matter when you bought your house. This is not about buying a house. This is about risk.

As you sit behind your screen right now, if you are paying more then 25% of your gross income on a mortgage payment and you have 15 years or more left to pay you are at risk.

It doesn't matter what you paid for the house. It's what you have left to pay on the house.
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Re: Real-estate slump could clip forecasts (TC)

Postby TazDevil on Tue Mar 12, 2013 5:35 pm

Be a yardstick of quality. Some people aren't used to an environment where excellence is expected.

Steve Jobs
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Re: Real-estate slump could clip forecasts (TC)

Postby TazDevil on Tue Mar 12, 2013 5:40 pm

Be a yardstick of quality. Some people aren't used to an environment where excellence is expected.

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