COVID and the housing market

[Bobo]

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Ambition is good , incurring unnecessary debt due to ambition, not good . Moderate growth within your means is a key ingredient to success. For every “ I took a flyer and here I am! “ there is an equal or larger number of “ oh fook” . Learn happiness and contentment with where you are then any small victory feels like a massive win .


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…yes but if your ambitious and going to take chances , do it when your young and you can sit back on your equity later in life and cash in when the kids are gone or when your retired etc. I got married and bought my first house in my late twenties, worked night and day and paid it off in 3 years. Got divorced and shortly thereafter bought another house, worked night and day, paid that one off in 3 1/2 years. Those few short years determined my financial stability for years to come. Could I do that today, the answer is a hard no, I’d be dead. I always saw the equity that I’ve accumulated in that short time as a subsidy to my pension. Let’s face it, pensions are not what they use to be unless you’re a government employee and your pension is indexed. Recent rounds of inflation have decimated my pension, thank god I wasn’t relying on it to live. Your results may vary.

 

[Bobo]

…yes but if your ambitious and going to take chances , do it when your young and you can sit back on your equity later in life and cash in when the kids are gone or when your retired etc. I got married and bought my first house in my late twenties, worked night and day and paid it off in 3 years. Got divorced and shortly thereafter bought another house, worked night and day, paid that one off in 3 1/2 years. Those few short years set me up to live financially comfortable. Could I do that today, the answer is a hard no, I’d be dead. I always saw the equity that I’ve accumulated in that short time as a subsidy to my pension. Let’s face it, pensions are not what they use to be unless you’re a government employee and your pension is indexed. Recent rounds of inflation have decimated my pension, thank god I wasn’t relying on it to live. Your results may vary.

… the condensed moral of that story is don’t get married.

 

[GreyGhost]

… the condensed moral of that story is don’t get married.

A wrong choice can blow up your financial life but the right choice can improve it substantially. I would be likely be in a worse place financially if I was single.

 

[Bobo]

A wrong choice can blow up your financial life but the right choice can improve it substantially. I would be likely be in a worse place financially if I was single.

… as I said, your results may vary

 

[crankcall]

There is the magic of compound interest.
And if it floats flys or Fs , rent it


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[Dresden]

I hate debt so I pay everything off. Opportunity cost may be high but I sleep well.

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My dad was like this. Younger me hated his mentality but as I've grown older, I understand why.

Had a million dollars in cash in 2006.
Slept peacefully through the night.

Had a million dollars in cash in 2008.
Slept extremely peacefully through the night.

Had a million dollars in cash in the 2020s.
Still sleep well, but not peacefully.

 

[Dresden]

Do people feel we have hit the low in the market, or is this still to come?

Downtown Toronto specific:
It has been my opinion for a while that the well run buildings with good layouts had already hit a low a while ago.

Seeing the garbage stuff on "sale" find buyers is ... encouraging news to me, not the other way around.
The quicker these are off the market the better off it is for pricing in the long run as we return to the "norm".

Of course, how quickly they move is the real metric to watch. These are all going to sophisticated investors whose only concern is rental yield.

I think we see rents start ticking up in the core as more corporate landlords enter the game.

 

[nobbie48]

My dad was like this. Younger me hated his mentality but as I've grown older, I understand why.

Had a million dollars in cash in 2006.
Slept peacefully through the night.

Had a million dollars in cash in 2008.
Slept extremely peacefully through the night.

Had a million dollars in cash in the 2020s.
Still sleep well, but not peacefully.

A friend in Trenton commented his dad only paid cash. He finally bought a cottage for cash when his son was around 20.

His son was old enough to want to spend weekends in the city with his friends but would have loved the cottage fishing with his father when he was younger.

 

[GreyGhost]

Big ouch. Another lesson for co-signors. Original buyer needed to apply for creditor protection, co-signor will end up with a bill to pay deep into six figures. After all that pain, the buyer will own nothing.




EDIT:
I wonder if the co-signor would have been ahead by closing. They could post it for rent, not find a tenant that covers costs and then sell it to generate a 400K capital loss. As they never took possession in the current path, I suspect the loss is after tax dollars. Double ouch.

 

[crankcall]

Interesting the posted owner and co signer are described to as one percenters. Thats a fairly pointed reference. Odd .


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[crankcall]

Just home from Fort Mac , the house my daughter bought ten yrs ago for five fifty , ten yrs later is … five fifty . Such a weird market.


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[GreyGhost]

Just home from Fort Mac , the house my daughter bought ten yrs ago for five fifty , ten yrs later is … five fifty . Such a weird market.


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I am assuming she is up financially when comparing property tax and maintenance to renting over that period? Probably down compared to renting and investing the down payment. It's not all about pure finances though.

 

[Dresden]

Just home from Fort Mac , the house my daughter bought ten yrs ago for five fifty , ten yrs later is … five fifty . Such a weird market.


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IIRC the oil bust happened in 2015. Low to low.

Real winner is the bank that mortgaged the property.

I am assuming she is up financially when comparing property tax and maintenance to renting over that period? Probably down compared to renting and investing the down payment. It's not all about pure finances though.

I've run the numbers over and over again - investing in capital markets wins in almost every scenario.

The good thing about owning is that the trees you plant are yours. Personally, I'm hardwired to own .. at any price.

 

[crankcall]

it hard to gauge if your just looking at math, she would have paid about 220k rent in ten years for an equivalent house and had nothing to show for it . But she has been able to paint whatever color she likes and its hers . My son is paying $1750 month for a 3bd town about 15 mins walk from his sister. He wont buy because he isnt sure how long hes staying . He has been there 12yrs......
I'd buy , but I'm predisposed to not paying someone elses mortgage .

 

[nobbie48]

it hard to gauge if your just looking at math, she would have paid about 220k rent in ten years for an equivalent house and had nothing to show for it . But she has been able to paint whatever color she likes and its hers . My son is paying $1750 month for a 3bd town about 15 mins walk from his sister. He wont buy because he isnt sure how long hes staying . He has been there 12yrs......
I'd buy , but I'm predisposed to not paying someone elses mortgage .

When you rent you leave behind anything you fasten to the structure so you live with old cupboards and carpet. Upgrade them and the owner could throw you out and rent the unit to a new tenant at a higher price.

I rented an industrial unit for a couple of years and detested every base improvement. Then I bought one and happily redid the electrics.

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