COVID and the housing market | Page 18 | GTAMotorcycle.com

COVID and the housing market

Indeed. Lightcycle is right I never had a mortgage much over 100K if that.
First house cost 30K (chatham poor part of town 1986)
Second 140K (guelph 1991)
Third 142K (st marys 1993)
Condo 70K (london 2012)

The condo really brings it home for me - they now go for north of 200K (gonna have to pay some cap gains on it but hey it's better than a capital loss right??)
 
By mimicos "for kicks"math the young guy could buy a 350K house and pay about the same as the old guy. IF there was a 350K house - Good Luck
 
mimico_polak said:
EDIT: For kicks
1. 100k with 10% down at 18% = $626/bi-weekly
2. 700k with 10% down at 3% = $1,418/bibi-weekly
Click to expand...

When my mortgage was >20%, I was making $6 / hr.
I paid $32,000 for that house in 1986.
Same job today pays $35. Same house is ~$400,000.

MP. You need a wage price comparison too.
 
Gary said:
When my mortgage was >20%, I was making $6 / hr.
I paid $32,000 for that house in 1986.
Same job today pays $35. Same house is ~$400,000.

MP. You need a wage price comparison too.
Click to expand...
Yes you are correct. I didn't account for salaries.

But as we had discussed, you're not going to find a house for 400k in the GTA. Average salary has not kept up to house prices so I didn't even bother including it.

As for mortgage, for those interested I've always used this file for a comparison:

www.vertex42.com

Free Mortgage Calculators by Vertex42

Download free Mortgage Calculators for Excel. Include extra payments. Analyze home equity loans. Create amortization schedules.
www.vertex42.com www.vertex42.com
 
timtune said:
I can't believe this 2.99% and you want to renew for lower. Here I am dating myself but my first mortgage was just under 12% and at the time my coworkers thought I was hero to negotiate that. I would think when you're going from 2.99 to 1.99 you're starting to edge up against the law of diminishing returns.

That said none of my mortgages would have been anywhere near the amounts needed today.
Click to expand...
My folks moved to Calgary in 1980. Buying a house was a panic because interest rates were going up so fast that delaying an offer by even a few hours could see another bump.

Of course, three years later it was a different story...

Low rates are a huge reason why we're here with inflated home prices. Even if monthly payments are higher, it doesn't feel so bad putting that money into the principal vs. paying off interest...
 
Priller said:
My folks moved to Calgary in 1980. Buying a house was a panic because interest rates were going up so fast that delaying an offer by even a few hours could see another bump.

Of course, three years later it was a different story...

Low rates are a huge reason why we're here with inflated home prices. Even if monthly payments are higher, it doesn't feel so bad putting that money into the principal vs. paying off interest...
Click to expand...
Thankfully, I've only had (and likely will only ever have) one year where interest was more than principal on a mortgage. I know in the old days you were a long way through the mortgage before that magical day happened. A hell of a lot less principal to beat down then though. Even if I was paying zero interest I would have a lot of years of mortgage payments.
 
Gary said:
When my mortgage was >20%, I was making $6 / hr.
I paid $32,000 for that house in 1986.
Same job today pays $35. Same house is ~$400,000.

MP. You need a wage price comparison too.
Click to expand...
To have kept the same ratio that house will need to sell for $187K today or if the house was actually worth only $400K the job needs to pay ~$75/hr.

You also have to factor in interest rate in this or....just monthly payment (P+I) vs pay not just pay vs price.

***
There are also other differences of course.

An almost entirely new class of home exists today, condos. While they have been around a long time but the popularity really started in the 80/90s and ramped up from there. Some will argue it is not apples to apples but having a new class changes the overall dynamic, is it the cause or was it caused...

Go back long enough and housing was paid for by a single income, today usually two. There is an entire discussion about basic supply and demand concepts here.

We also have a view here that people need a house. In many parts of the first world the entire concept of just buying a detached home has been out of reach for many decades, sometimes longer. People buy small condos or property gets passed down...

And of course well covered, more people means higher prices unless supply can increase as fast as the demand (population).

****
EDIT:
Factoring in Interest rate, assuming a "hated" boomer buying somewhere between 1975 and 1995 a typical interest rate of ~12%...

Buying at 32K then making $6/hr
Results in 420K today making $35/hr when factoring in today's sub 3% interest rates. Can be refined by knowing the actual 32K buy date.
Adding in the concept of dual income vs boomer single we hit affordability of ~800K (of course it is less as both may not make the full $35 and there will be time off when having kids...).
 
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I might have to stretch my budget to 1.7m to buy a house that we like. Our budget started at 1.2m... FML

Sent from my M2007J20CG using Tapatalk
 
backmarkerducati said:
We also have a view here that people need a house. In many parts of the first world the entire concept of just buying a detached home has been out of reach for many decades, sometimes longer.
Click to expand...

We moved here in the 70s. Much of the outlying 416 was either just farmland or completely undeveloped. Buying property back then was literally a land-grab.

Half a century changes a lot of things. Land becomes scarce, and... well... everyone knows the rest...
 
backmarkerducati said:
To have kept the same ratio that house will need to sell for $187K today or if the house was actually worth only $400K the job needs to pay ~$75/hr.

You also have to factor in interest rate in this or....just monthly payment (P+I) vs pay not just pay vs price.

***
There are also other differences of course.

An almost entirely new class of home exists today, condos. While they have been around a long time but the popularity really started in the 80/90s and ramped up from there. Some will argue it is not apples to apples but having a new class changes the overall dynamic, is it the cause or was it caused...

Go back long enough and housing was paid for by a single income, today usually two. There is an entire discussion about basic supply and demand concepts here.

We also have a view here that people need a house. In many parts of the first world the entire concept of just buying a detached home has been out of reach for many decades, sometimes longer. People buy small condos or property gets passed down...

And of course well covered, more people means higher prices unless supply can increase as fast as the demand (population).
Click to expand...
Also the detached house of today is substantially different. As Conner said before, 2400 sq ft was huge growing up. Now they are making townhouses that size and it's shockingly common to see detached at triple that even in subdivisions. Part of it is the finished floor area vs the old-school above ground area. With so many houses having walkout basements, discounting that area does not make sense to me. Hell, the basement in our current house is larger than total finished sq footage of our last house.
 
mimico_polak said:
Pretty fortunate you can even look at houses in that range. A lot of people don't have that option anywhere in their lifetime.
Click to expand...

This is quite sad, when the possibility of home ownership rests entirely on "when" you were born.

I'd hazard a guess that the period that separates the winners and losers of the birthdate/home-ownership lottery is maybe 10 years or less.

Anyone born at the start of that 10-year period gets to afford a home. At the end... well, you're not ordering avocado on your sub at Subway...
 
mimico_polak said:
Pretty fortunate you can even look at houses in that range. A lot of people don't have that option anywhere in their lifetime.
Click to expand...
In normally only works because you were part of the ponzi scheme already. So few have enough income to think about house prices like that, but many are selling off existing dwellings with 200K to 1M or more in equity. At that point, his 1.7 house is less of a stretch than an 800K house for someone not in the market already. You are looking at relative prices, not absolute as most people are buying jumps. The first jump is the hardest.
 
mimico_polak said:
Pretty fortunate you can even look at houses in that range. A lot of people don't have that option anywhere in their lifetime.
Click to expand...
Yeah, I consider myself lucky. Both my wife and I have similar values. No useless purchases, 1 car (2013 ford focus), no fancy vacations, Ikea furniture, etc.

We saved tons, our current mortgage can be paired off in 5 yrs.

Both of us got promoted last year in a very stable job, pulling 220k.

Funnily, most detached in 1.2m range now don't even look like that much of an upgrade from our current townhouse. It'd be like going from ninja 300 to CBR 500.

Sent from my M2007J20CG using Tapatalk
 
I wanna live within my means, so maybe I could pull off a million dollar home, and rent out of a couple of rooms but then that whole living within my means thing goes out the window
 
moarmoto said:
Yeah, I consider myself lucky. Both my wife and I have similar values. No useless purchases, 1 car (2013 ford focus), no fancy vacations, Ikea furniture, etc.

We saved tons, our current mortgage can be paired off in 5 yrs.

Both of us got promoted last year in a very stable job, pulling 220k.

Funnily, most detached in 1.2m range now don't even look like that much of an upgrade from our current townhouse. It'd be like going from ninja 300 to CBR 500.

Sent from my M2007J20CG using Tapatalk
Click to expand...
That's part of the reason we moved north. To go from a 3 bedroom 1.5 bath single garage to typical subdivision house in the same neighbourhood with 4 bed, two car garage was ~250K. Boo. For 500 more, you might get 5 bed, two car garage, 10' wider lot on a less busy street. If you move north, holy crap. House prices align with your mental picture of what a house of that price should look like.
 
GreyGhost said:
That's part of the reason we moved north. To go from a 3 bedroom 1.5 bath single garage to typical subdivision house in the same neighbourhood with 4 bed, two car garage was ~250K. Boo. For 500 more, you might get 5 bed, two car garage, 10' wider lot on a less busy street. If you move north, holy crap. House prices align with your mental picture of what a house of that price should look like.
Click to expand...
you guys are in the barrie area right?
 
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