COVID and the housing market

[Jay Alexander]

As a younger person (close to 40, but pretty sure younger than the median age here), I see a lot of anecdotes about really naive/misinformed/straight dumb younger people being referenced in this thread.

Making a sweeping generalization comparing two generations is meaningless. Pointing a finger at a stupid 20 year old kid saying "See? This generation is wasted" is not only a common bias (frequency illusion and salience), but it's also not constructive.

The fact is that cost of housing (rent AND owning) in the GTA has far outpaced the median incomes of people new in their careers. It is actually insane the difference a low-skilled factory job provided for 20-30 years ago compared to today. Simply put, the younger generation - naive/dumb/smart/lazy/hard-working - all have the shorter end of the stick of people who simply bought earlier.

This market is messed.

 

[mimico_polak]

The first rule of being a Toronto land baron. Never turn down stuff from mom and pops.

I will not. Just a matter of now….or a few years from now.

I’d rather have the time with my parents than the stuff.

 

[Evoex]

As a younger person (close to 40, but pretty sure younger than the median age here), I see a lot of anecdotes about really naive/misinformed/straight dumb younger people being referenced in this thread.

Making a sweeping generalization comparing two generations is meaningless. Pointing a finger at a stupid 20 year old kid saying "See? This generation is wasted" is not only a common bias (frequency illusion and salience), but it's also not constructive.

The fact is that cost of housing (rent AND owning) in the GTA has far outpaced the median incomes of people new in their careers. It is actually insane the difference a low-skilled factory job provided for 20-30 years ago compared to today. Simply put, the younger generation - naive/dumb/smart/lazy/hard-working - all have the shorter end of the stick of people who simply bought earlier.

This market is messed.

Well we’d need to be more specific here.

20 year old not living on ramen for save for a McMansion? Yeah whose going to reasonably expect that.

20 year old not showing up on time, not bothering to call into work on sick days so his boss doesn’t think they are dead in a ditch somewhere, or quitting the moment a boss told them off?

Not going to afford a basement apartment in Sudbury with that level of work ethic.

My opinion is this incoming generation is soft. Life is hard, they needed to get the belt more often to realize that actions have consequences. I pray for strong parents out there to not let their kids just sit on their laurels and wait to inherit.

 

[crankcall]

At 20 I was gainfully employed, but completely financially stupid . At 20 my brother was like a little Warren Buffet .
Fast forward , he’s still pretty focused but I got the nicer house , cottage and yacht . I did get a little smarter with money , but I would never end up where I am starting over .
The housing market is so skewed in the last decade , it’s not impossible to get in , but I don’t think it’s for joe average anymore


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[Jay Alexander]

Well we’d need to be more specific here.

20 year old not living on ramen for save for a McMansion? Yeah whose going to reasonably expect that.

20 year old not showing up on time, not bothering to call into work on sick days so his boss doesn’t think they are dead in a ditch somewhere, or quitting the moment a boss told them off?

Not going to afford a basement apartment in Sudbury with that level of work ethic.

My opinion is this incoming generation is soft. Life is hard, they needed to get the belt more often to realize that actions have consequences. I pray for strong parents out there to not let their kids just sit on their laurels and wait to inherit.

I disagree. If the point of discussion is the market, it's apathetic towards people. Regardless if some are soft or not (and I highly think this is a bias, soft people are part of every generation), the market doesn't care. It doesn't care if you earn a ton of money or very little money. The price is the same regardless who's looking to rent or buy.

As for comparing generations, I mean come on. Social media is not a good representation of a population as a whole - it only represents the personalities inclined to overshare their opinions. I have many friends and family members in their 20s and they can vary from extremely smart/hard-working to hard-partiers who are more laid-back.

My question would be where you're basing this opinion off of?

 

[Evoex]

I disagree. If the point of discussion is the market, it's apathetic towards people. Regardless if some are soft or not (and I highly think this is a bias, soft people are part of every generation), the market doesn't care. It doesn't care if you earn a ton of money or very little money. The price is the same regardless who's looking to rent or buy.

As for comparing generations, I mean come on. Social media is not a good representation of a population as a whole - it only represents the personalities inclined to overshare their opinions. I have many friends and family members in their 20s and they can vary from extremely smart/hard-working to hard-partiers who are more laid-back.

My question would be where you're basing this opinion off of?

I have 3 very different jobs, so 3 ways to interact and observe people.

I’ve worked with one guy in his 20s who hasn’t shown up to work on time once that I’ve worked with him in the last 2 years. He spent all of last weekend telling me how excited he his to be applying to the the police constabulary.

I suspect he’s in for a rude awakening.

I’ve seen another accept a job offer, 2 weeks in he asked when could we work from home? “You don’t.” Complained to HR that they should change the policy and quit the next day.

Yet another who when hired was told he couldn’t smoke in uniform because guests were complaining. He accepted the position with this mutual understanding. Fast forward 3 weeks and I saw 4 complaints from managers about the smell of cigarettes wafting off him. We reminded him of the policy and he told us to **** ourselves and walked off the job.

Anyways we appear to be having 2 separate conversations. I’ll let this get back on the rails.

 

[nobbie48]

As a younger person (close to 40, but pretty sure younger than the median age here), I see a lot of anecdotes about really naive/misinformed/straight dumb younger people being referenced in this thread.

Making a sweeping generalization comparing two generations is meaningless. Pointing a finger at a stupid 20 year old kid saying "See? This generation is wasted" is not only a common bias (frequency illusion and salience), but it's also not constructive.

The fact is that cost of housing (rent AND owning) in the GTA has far outpaced the median incomes of people new in their careers. It is actually insane the difference a low-skilled factory job provided for 20-30 years ago compared to today. Simply put, the younger generation - naive/dumb/smart/lazy/hard-working - all have the shorter end of the stick of people who simply bought earlier.

This market is messed.

The book, Limits to Growth, was written in 1972 and pointed out the future. However if everyone listened we would possibly have not spent as much, had as many toys. Instead, the rich got richer and the poor got poorer.

A bank economist, I don't recall his name, on one of the news programs discussing inflation, he bluntly stated prices will not go back to pre covid levels and raises will not match inflation.

Who, fifty years ago, thought it would come to this? If you're 40-50 years old did your parents point out that the growth was not sustainable?

Saving for a home is a joke for the average person, $55K a year. Modest inflation on a house in the GTA is 5% on a million plus property. All one can do is keep up with the inflation factor if they don't eat or sleep indoors.

Theoretically one could get ahead by renting out rooms, going to food banks, thrift shops and never enjoying the things of youth, having children etc. Maybe by the time you retire you're mortgage free. Whoopee!

Investment instead of saving is the only hope but sports cars are more fun than stocks and bonds.

The attitude of "If you can't have a house, have nice toys" is understandable. If the parents didn't have any assets it's worse.

To get ahead, a high school diploma doesn't cut it so enter the workforce with $100K in school loans as well.

It isn't going to get better. If you want to get ahead you have to work and think smarter.

 

[GreyGhost]

Interesting situation. 130 ardagh rd barrie. 1 acre lot with a house. Last public sale was 2003 for 152.5. Up for public auction now. Buyer must assume responsibility for all mortgages, charges, liens, taxes and other encumbrances. Existing creditor is The Sarjeant Company Ltd. How did a ready mix supplier end up forclosing on a house? Must be an interesting story there.

 

[nobbie48]

I once had a chat with a business owner a few years back.

He told me;

“This generation is screwed. All self entitlement, no drive to work. I can teach anyone how to install a network or setup a PC.

What I can’t teach is how to show up to work on time and critical thinking.”

The most important quality of an employee is honesty. The employer can adjust for just about anything else.

Lazy, you have to push them. Dumb you have to teach more. Physically weak, you give them assists.

Dishonest people have a million ways of stabbing you or your profits in the back with no warning and from any direction. Theft of time is probably the worst. Smoke breaks, long lunches, online shopping, personal texting and emails, in late out early etc.

My accountant figures they lose an hour per day per person, ~15% of the payroll. If the employer comes down hard they lose staff. My wife worked for an insurance company and went to the office to work. She figured the rest came for the free WiFi.

 

[nobbie48]

Interesting situation. 130 ardagh rd barrie. 1 acre lot with a house. Last public sale was 2003 for 152.5. Up for public auction now. Buyer must assume responsibility for all mortgages, charges, liens, taxes and other encumbrances. Existing creditor is The Sarjeant Company Ltd. How did a ready mix supplier end up forclosing on a house? Must be an interesting story there.

Put his house on the line to finance another build?

 

[GreyGhost]

Put his house on the line to finance another build?

Maybe? Seems like too much collateral for not enough product though. Maybe they have owner/operator trucks and he defaulted, maybe they lend money on the side. In any case, it's surprising it's made it to this point. It can't be a surprise and market was rocking so it wouldn't have been hard to sell to clear the loan.

 

[GreyGhost]

Another reasonably quick resale outside of barrie. Bought early 2021. Listed May 2022 for 35% more (no sale). Dropped price a few times, sold for ~20% more than 2021 sale. Not getting rich with the crazy transaction fees but anytime you can unwind real estate owned for less than five years and not lose your shirt, I'd call that an ownership win.

 

[Jay Alexander]

I have 3 very different jobs, so 3 ways to interact and observe people.

I’ve worked with one guy in his 20s who hasn’t shown up to work on time once that I’ve worked with him in the last 2 years. He spent all of last weekend telling me how excited he his to be applying to the the police constabulary.

I suspect he’s in for a rude awakening.

I’ve seen another accept a job offer, 2 weeks in he asked when could we work from home? “You don’t.” Complained to HR that they should change the policy and quit the next day.

Yet another who when hired was told he couldn’t smoke in uniform because guests were complaining. He accepted the position with this mutual understanding. Fast forward 3 weeks and I saw 4 complaints from managers about the smell of cigarettes wafting off him. We reminded him of the policy and he told us to **** ourselves and walked off the job.

Anyways we appear to be having 2 separate conversations. I’ll let this get back on the rails.

3 examples does not represent an entire demographic. Otherwise I can list 3 friends of mine, all each making a ton of money. One friend who is mid-20s, 3 years into his career and earning $250k, won't buy a car, won't move from a small place he's currently at. Another example is someone I know who is a consultant making stupid money and bought a house recently in Lawrence Park. The third one I'm skipping because I don't want to type more.

These examples are meaningless. To provide context, I'd also add what those actual jobs were for, their pay, and work environment. But regardless of these details, it's still meaningless because demographics cannot be represented by such a small amount of individuals.

This is analogous to when people say "good" music isn't made anymore, only older stuff is good. That fails a recency bias, since obviously the stuff that's old that still is being played today is objectively better than 95% of the actual output of all music released in that era.

 

[Evoex]

3 examples does not represent an entire demographic. Otherwise I can list 3 friends of mine, all each making a ton of money. One friend who is mid-20s, 3 years into his career and earning $250k, won't buy a car, won't move from a small place he's currently at. Another example is someone I know who is a consultant making stupid money and bought a house recently in Lawrence Park. The third one I'm skipping because I don't want to type more.

These examples are meaningless. To provide context, I'd also add what those actual jobs were for, their pay, and work environment. But regardless of these details, it's still meaningless because demographics cannot be represented by such a small amount of individuals.

This is analogous to when people say "good" music isn't made anymore, only older stuff is good. That fails a recency bias, since obviously the stuff that's old that still is being played today is objectively better than 95% of the actual output of all music released in that era.

Sure, should I not take my new job and instead dedicate my hours to providing sufficient examples until you are convinced? Why do you get to decide that number?

It’s an opinion nothing more. So we can agree to disagree.

However, associating a large bank account with work effort is a laughable example.

 

[Jay Alexander]

I'm not equating a bank account with effort. I'm trying to do the opposite. It's irrelevant. Pointing out there are many different people of all types that are younger that aren't bad in a job.

Just pointing out a flaw with this line of thinking. I understand it's an opinion, but making a judgement with a small selection is literally against the scientific method. I don't decide on a number of examples. But for every cherry-picked anecdote, there is another differing example.

 

[Jay Alexander]

However, associating a large bank account with work effort is a laughable example.

On second thought, high earners do have a better work ethic. They have to. Which is partially why asked the job, pay, work environment, location...

These absolutely have a tremendous impact on who you see, the type of attitude they have, income level, it's all tied in there.

People are all different, but a more affluent neighbourhood will attract and represent a wealthier population than most. This can skew the personalities you interact with.

 

[Mad Mike]

As a younger person (close to 40, but pretty sure younger than the median age here), I see a lot of anecdotes about really naive/misinformed/straight dumb younger people being referenced in this thread.

Making a sweeping generalization comparing two generations is meaningless. Pointing a finger at a stupid 20 year old kid saying "See? This generation is wasted" is not only a common bias (frequency illusion and salience), but it's also not constructive.

The fact is that cost of housing (rent AND owning) in the GTA has far outpaced the median incomes of people new in their careers. It is actually insane the difference a low-skilled factory job provided for 20-30 years ago compared to today. Simply put, the younger generation - naive/dumb/smart/lazy/hard-working - all have the shorter end of the stick of people who simply bought earlier.

This market is messed.

I don't think it's so much about younger folks being dumb or naive - at least not from my perspective. I see millennials talk a lot about how hard home ownership is for them, seeming to think it was a cakewalk for the generation before them. It wasn't. Up till about the last 24 months, your parents had comparable challenges getting into the game. My first house was an hour from the city and PIT was 80% of me and the wife's net income. We made a lot of sacrifices in our 20s to getour first house, as did many of my friends.

You can't simply compare the price of a house today to 30 years ago. While there is certainly a difference, there are also differences like salaries and mortgage rates that need to be factored into the discussion. If you parents have a home, ask them their salaries, interest rates and purchase price of their first place then do the math.

I will agree that the last 24 months have pushed the bar to entry very high, but if one is 40, what would be the excuse for not jumping in anytime in the prior 15 years when the level of difficulty was similar to what your parents faced? The good news is prices seem to be falling on entry homes within an hour of the GTA.

I know several 1990 millennials (classmates of my son) who managed. Their first places were $350-$600K, they bought in Keswick, Port Perry, Clarington, Cookstown. You can still get a house in those areas for <$600K.

Another option is to leave the GTA. Hundreds of thousands uproot and come to Canada every year to live a better easier life, how hard could it be to relo to Peterborough, or Alberta where there are lots of jobs and entry-level homes are under $400K?

 

[Jay Alexander]

I don't think it's so much about younger folks being dumb or naive - at least not from my perspective. I see millennials talk a lot about how hard home ownership is for them, seeming to think it was a cakewalk for the generation before them. It wasn't. Up till about the last 24 months, your parents had comparable challenges getting into the game. My first house was an hour from the city and PIT was 80% of me and the wife's net income. We made a lot of sacrifices in our 20s to getour first house, as did many of my friends.

You can't simply compare the price of a house today to 30 years ago. While there is certainly a difference, there are also differences like salaries and mortgage rates that need to be factored into the discussion. If you parents have a home, ask them their salaries, interest rates and purchase price of their first place then do the math.

I will agree that the last 24 months have pushed the bar to entry very high, but if one is 40, what would be the excuse for not jumping in anytime in the prior 15 years when the level of difficulty was similar to what your parents faced? The good news is prices seem to be falling on entry homes within an hour of the GTA.

I know several 1990 millennials (classmates of my son) who managed. Their first places were $350-$600K, they bought in Keswick, Port Perry, Clarington, Cookstown. You can still get a house in those areas for <$600K.

Another option is to leave the GTA. Hundreds of thousands uproot and come to Canada every year to live a better easier life, how hard could it be to relo to Peterborough, or Alberta where there are lots of jobs and entry-level homes are under $400K?

Let's compare the historical data of median household income against the average selling price of homes in Toronto. You also mentioned the interest rates, which can be seen in the third image. The cost of homes have exploded compared to a small uptick of median salaries over the years. The interest rates, even compounded over a 30-year term, still cannot account for most of that chasm between income and house price.

I'm speaking for specifically GTA (Toronto, Peel, Durham, etc.), not Clarington, Keswick, etc. I'm not speaking as to relocating, or shifting the issue specifically, and that is that housing has exploded, even when factoring in income and interest rate changes.

I couldn't find data on household income since 2010. Also I never mentioned whether or not I'm trying to buy/already an owner. That's irrelevant.

 

[crankcall]

I’d say the house vs salary in the GTA is now exponentially out of whack . My first house was about 5x my wife and I annual income, it would now be a lot more .

I also wonder if expectations have changed . We had a 3bd 1 bath originally, nobody has or builds 1 bath now


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[Scuba Steve]

I’d say the house vs salary in the GTA is now exponentially out of whack . My first house was about 5x my wife and I annual income, it would now be a lot more .

I also wonder if expectations have changed . We had a 3bd 1 bath originally, nobody has or builds 1 bath now


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My first house was 2x My current house isn't far off that now. First was 3 bed 1 bath semi.

Sent from the future