COVID and the housing market | Page 246 | GTAMotorcycle.com

COVID and the housing market

GreyGhost said:
Boc and Cmhc recently have been less accurate than a monkey throwing darts. They seem to predict the opposite of what actually happens
Not sure if that is due to political interference or lack of competence and complete separation of performance required for continued employment.

Edit:
That article says average mortgage payment is 1260. Like hell it is. That would mean that the average loan at initial was ~250K. There is no way that is the average. Did they average in zeroes for all the dwellings that were paid off? Over the last 5 to 10 years, probably 95% of mortgage initiations were more than 250k. Many three or four times that. Older mortgages may be lower but they will only represent half the pool of open mortgages and many wpuldnt be a hell of a lot lower.
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Man, I love the doom and gloom. Escalator up and elevator down right?
...anyways,

In 2019, the rate was 3.65%, and if you looked at Feb/March/April of 2020, the market was recovering and going up at a decent 4-7% projected (month over month, which I was hoping to be around 7%). Then the pandemic craziness happened and here we are.

I want and hope the prices adjust to last summer's or even 2021 Jan's price point, which is where I think we should be in line with the mortgage rates. So the 10% jump from Jan 2021 to March 2021, and the crazy/weird 15% Jump on Oct/Nov 21 to Feb/March 22 (Mostly Peel and Durham), needs to be wiped out. And those were the speculations, I have no idea how a house that's worth $1.2M went for $1.6 in few months, other than herd mentality and over speculation from novice investors and overzealous agents.

BoC is predicting the GDP shrink of (.07) from housing for this year, where 1.3% of the 4.6% growth came from housing last year. Decrease of 2% , which is HUGE. I think they know what they're doing with what they have available. But, nothing happens in a vacuum so who knows.

To the people who bought in 2021 and Q1/2 of 22, just hold and service, it will be back. "When?", is mostly based on "location, location, location".
 
xfactor said:
Man, I love the doom and gloom. Escalator up and elevator down right?
...anyways,

In 2019, the rate was 3.65%, and if you looked at Feb/March/April of 2020, the market was recovering and going up at a decent 4-7% projected (month over month, which I was hoping to be around 7%). Then the pandemic craziness happened and here we are.

I want and hope the prices adjust to last summer's or even 2021 Jan's price point, which is where I think we should be in line with the mortgage rates. So the 10% jump from Jan 2021 to March 2021, and the crazy/weird 15% Jump on Oct/Nov 21 to Feb/March 22 (Mostly Peel and Durham), needs to be wiped out. And those were the speculations, I have no idea how a house that's worth $1.2M went for $1.6 in few months, other than herd mentality and over speculation from novice investors and overzealous agents.

BoC is predicting the GDP shrink of (.07) from housing for this year, where 1.3% of the 4.6% growth came from housing last year. Decrease of 2% , which is HUGE. I think they know what they're doing with what they have available. But, nothing happens in a vacuum so who knows.

To the people who bought in 2021 and Q1/2 of 22, just hold and service, it will be back. "When?", is mostly based on "location, location, location".
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The interesting ones will be entire subdivisions that were locked in at speculator prices. Banks will refuse to grant the expected mortgage. Buyers cant come up with the cash (half were probably counting on assignment sale so they have no cash). Builders need the money asap as they have done all the spending and construction financing is really expensive. It will be interesting to see how it plays out.
 
GreyGhost said:
The interesting ones will be entire subdivisions that were locked in at speculator prices. Banks will refuse to grant the expected mortgage. Buyers cant come up with the cash (half were probably counting on assignment sale so they have no cash). Builders need the money asap as they have done all the spending and construction financing is really expensive. It will be interesting to see how it plays out.
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And then we'll have a ton of different articles how the big bad developers won't drop their prices to accommodate the new reality.

But if it goes the other way...smart investors.

Anyway developers that cancel and re-start projects with new prices should be shot...but that's another story.
 
GreyGhost said:
Boc and Cmhc recently have been less accurate than a monkey throwing darts. They seem to predict the opposite of what actually happens
Not sure if that is due to political interference or lack of competence and complete separation of performance required for continued employment.

Edit:
That article says average mortgage payment is 1260. Like hell it is. That would mean that the average loan at initiatiation was ~250K. There is no way that is the average. Did they average in zeroes for all the dwellings that were paid off? Over the last 5 to 10 years, probably 95% of mortgage initiations were more than 250k. Many three or four times that. Older mortgages may be lower but they will only represent half the pool of open mortgages and many wouldnt be a hell of a lot lower.
Click to expand...

I have a HOLOC with zero balance. Do I affect the numbers?
 
nobbie48 said:
I have a HOLOC with zero balance. Do I affect the numbers?
Click to expand...
I dont know. Something is very fishy with those numbers. Using open loans with zero balance could provide the desired twist to the real story.

Edit:

Here are some numbers that seem more realistic. 1250 was average in 2015. Was up to almost 1500 by 2020. Should have risen substantially from there with so many large mortgages being taken out.

www.mpamag.com

Has the pandemic affected Canadians' monthly mortgage payments?

Data from CMHC suggests a not-so-surprising answer
www.mpamag.com www.mpamag.com


House nearby that recently sold with the owners likely making 1M tax free in one year has a new baby blue range rover (full snot rr not the sport) out front. Sale hasn't closed yet.

Edit:
Added a cls 63. Spending their lottery money already and hoping the ticket pays off.
 
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GreyGhost said:
Boc and Cmhc recently have been less accurate than a monkey throwing darts. They seem to predict the opposite of what actually happens
Not sure if that is due to political interference or lack of competence and complete separation of performance required for continued employment.

Edit:
That article says average mortgage payment is 1260. Like hell it is. That would mean that the average loan at initiatiation was ~250K. There is no way that is the average. Did they average in zeroes for all the dwellings that were paid off? Over the last 5 to 10 years, probably 95% of mortgage initiations were more than 250k. Many three or four times that. Older mortgages may be lower but they will only represent half the pool of open mortgages and many wouldnt be a hell of a lot lower.
Click to expand...
I think that's about right. About 1/2 of sll homeowners own outright, based on whst I remember from my banking days, a good number of mortgages are winding down. Remember, 1 in 5 mortgages originated 20+ years ago, 2 in 5 15 years ago... The average price of a home in the gta was under $500k 10 years ago, tge national average under $250k.

More than 1/2 the mortgages outstanding today were written before 2012 when prices were waaasy lower.
 
Mad Mike said:
I think that's about right. About 1/2 of sll homeowners own outright, based on whst I remember from my banking days, a good number of mortgages are winding down. Remember, 1 in 5 mortgages originated 20+ years ago, 2 in 5 15 years ago... The average price of a home in the gta was under $500k 10 years ago, tge national average under $250k.

More than 1/2 the mortgages outstanding today were written before 2012 when prices were waaasy lower.
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That assumes that people stay in one house and pay it off over 25 years. In my generation I know very few people that did that. Most jumped at least once which reset the 25 year clock (and mortgage on second dwelling was far larger than mortgage on first dwelling). My parents generation were more likely to buy one dwelling and stay in it but they finished paying decades ago.
 
nobbie48 said:
I have a HOLOC with zero balance. Do I affect the numbers?
Click to expand...
Your indebtedness is whats counted. You would draw the average down by the amount owed, not by your available credit.
 
GreyGhost said:
That assumes that people stay in one house and pay it off over 25 years. In my generation I know very few people that did that. Most jumped at least once which reset the 25 year clock (and mortgage on second dwelling was far larger than mortgage on first dwelling). My parents generation were more likely to buy one dwelling and stay in it but they finished paying decades ago.
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There are still lots like your parents. I used to see mortgages every day with $50 monthly payments.
 
A house converted into five apartments outside of Barrie. Purchased in late 2020 for 1.1. Just relisted for 1.9. I think we are seeing the leading edge of investors realizing their ability to service mortgage is in jeopardy. Just the tip though so they are still pricing to the moon and hoping for the best. It will be interesting to see what happens with this one. It was purchased fully rented so the only thing that would justify that price bump is if they evicted the tenants and brought in new ones at a higher rate.
 
That’s sort of the problem right now , so many remember historic pricing and the reality is hard to fathom. A new SUV costs more than an early eighties townhouse . I bought a new motorcycle last week that cost more than my parents first or second house .
But the BoC will sort that out …..


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crankcall said:
That’s sort of the problem right now , so many remember historic pricing and the reality is hard to fathom. A new SUV costs more than an early eighties townhouse . I bought a new motorcycle last week that cost more than my parents first or second house .
But the BoC will sort that out …..


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Will they? I know in Poland for instance….rates are 8-10% yet inflation is still cranking forward.

Obvious hearsay but suicides are becoming more and more common, especially in farming and business owners, because they spent like drunken sailors and now can’t keep up with costs.

My cousins car went up in monthly lease costs, as they are variable rate/payment, by over $500CAD/month.

He can weather it easily…but many cant.
 
crankcall said:
That’s sort of the problem right now , so many remember historic pricing and the reality is hard to fathom. A new SUV costs more than an early eighties townhouse . I bought a new motorcycle last week that cost more than my parents first or second house .
But the BoC will sort that out …..


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The last fill up on the Hyundai cost more than my first mortgage payment.
 
Doesn’t actually matter which Gen you are , beyond your means is beyond your means .
If you need a gym membership because it’s too cold to run outside ? Harden up .
I like avocado toast , but if it means not paying off a charge card , eat less toast.
A lot of this is hard , a lot of it is not hard .


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