I think people started feeling that it's the low end...and now all this talk of rate raises next week have put people on guard again in a wait and see type of moment.
If you look at a hyper-local market like your street, a few panic/indiference sales (divorce, estate, relocation to LTC, etc) can depress the values substantially. In that case, the comp price doesn't really represent the price of that product in that market but it will still be used for future sales and take a long time for values to recover to match nearby similar streets.
Sadly you are correct.
As I’ve said before, the next year or two could be a good time to turn lemons into lemonade if you’ve got a few bucks, the stomach and the time. I remember looking at 4 bedroom houses in the Beaches (with parking) in ‘95 for $320k-$360 when the market tanked. I chickened out and played it safe with a $215k subdivision house in Brooklin. I wasted all the money I saved on motorcycles and women, don’t be that guy. If I had bought one of those houses in the Beaches my net worth today would be significantly higher. When you’ve lived through a few economic cycles you see things a little differently.
Probably but also your disposable income over all these years would almost certainly have been much lower. Would you have been happier with more house and less bikes? Housing net worth is a fun number on paper but for most people, it represents dead money that they will never get to enjoy and it will pass to their heirs (either after a move to LTC or death).
That’s true if you only have a primary residence but having a higher net worth allows you to acquire additional investment properties when golden opportunities present themselves, residential or otherwise. The most financially successful people I’ve known over the years have had two things in common, they all did it through real estate and were not particularly intelligent people.
Buying rental properties is an entirely different conversation than buying a more expensive house to live in. There is a path where the beaches house appreciated faster which allowed you to pull more out which allowed you to buy more rental properties but most people don't have the stones to leverage their primary residence to the limit. I try to keep 30-50% leverage and that is scary/painful enough at times. I understand the appeal of a paid-off house but the missed opportunity cost is ridiculously large (millions over a lifetime for many homeowners).
I hate debt so I pay everything off. Opportunity cost may be high but I sleep well.
That's a reasonable position to take. You also took a different path to wealth, leverage isn't the only one. As long as people understand and make educated decisions, I can't criticize the choice they make. If my net worth was 10x what it is now, would I keep my foot on the gas and keep so much risk exposure? Probably not. At that point, I may choose to pay off loans as that's a guaranteed ~4% after tax. I think I'll always keep a percentage exposed but that percentage will change over time.
Imo, his street has been hit hard by recent fire sales. Unless he wanted to buy on his street, imo the gap between what he has and what he wants has grown by hundreds of thousands temporarily.
