COVID and the housing market | Page 277 | GTAMotorcycle.com

COVID and the housing market

Interesting article. Lines up with what I suspected. It is polled data though so always worth questioning.

It is interesting that their conclusion is to aim for at least 40% of net worth in stocks. That can be very hard to do with current house prices. Do you downsize your house to try to get that balance? Pull a huge secured loan against the house to get the balance? The author provides no insight on how to achieve that balance. I think that is because there is no magic. You have people that own dwellings that are mostly very overweight in housing and those that don't own dwellings that are very overweight in more liquid/conventional investments like stocks.

Just for fun, assume a first time buyer looking at an Toronto average condo (700K). Assume 20% down (140K cough). Assuming that 140 was 60% of your net worth, it is smart to leave 90K invested in stocks while sitting on a 560K mortgage? Maybe? Doesn't seem like the right solution for many though (especially since a 235K net worth is nothing to sneeze for a first time buyer). If they had less saved the percentage will be swung even further towards housing (for most first times buyers close to 100%). Looking at an established owner that bought long ago, their house could easily be worth 2M+. Sure they have investments but are the investments worth 2M+? Do they move to a condo or another city to rebalance their portfolio? Do they pull a 1M mortgage to invest (probably won't be granted based on income)? I don't think so. Most will ignore most of the money trapped in their house and enjoy life. It's almost funny money as it's so hard to use a substantial portion of it. Hell, I am trying to keep some leverage up on the house but at some point the bank is going to tell me to screw off as income doesn't support the size of the loan.


"An Ipsos poll of 18,000 people documents how much of this country’s total household assets are tied up in real estate. For all Canadians, it’s 77 per cent. Generationally, real estate’s share of assets ranges from lows of 68 per cent for seniors and 71 per cent for boomers to a high of 89 per cent for the young adults of Gen Z.

A 50-50 blend of real estate and traditional investments would be ideal, but 60-40 in favour of real estate is more realistic in light of the Ipsos findings.

A bonus of also holding stocks and bonds: You can sell them with a mouse-click and get access to your money. It’s way more complicated to turn a house into cash you can use."
 
"Lots Of Potential Future Upside For Those Who Want To Build A Luxury Home On This Coveted Street Boasting Many Luxurious $3-4 Million ++ Homes" Hahaha. The neighbour (167) sold the old house for 1.3 in 2017 and built a 4700 sq ft house that sold in 2019 for 3M. Doing the same to this lot would be 4700*~400/sq ft=1.9M for the house alone. Add in the 2M for the lot and you have paid 4M for a house that might be worth 4M. Not a lot of upside there (sure house prices may continue to rise but construction could easily cost much more). Add in the interest rate escalation and unless people are sitting on many millions in uninvested assets it would be tough to swing. On the flipside, any money spent to renovate the current house will be lit on fire. It will not effect the resale value at all. Oct 2021 a 4 bed 2 storey a block away went for 2.3 and looked like a nice place for a family to live as is. I suspect the number for this house will be closer to 1.5. Sure the person buying it could afford to pay more but they don't want to. They got rich by putting the screws to others not by being generous.

It is a nice enough house and lot but I think they may have trouble getting 2M (but I have been wrong many times).
Basically a starter home for someone wanting the cachet of a Kingsway address. It's a bit like buying a low end BMW or MB. You can brag about the ownership but you're only fooling other fools.
 
Just read an article that focused on what 1 mill bought last yr , versus this yr . The 22% drop is significant, I’m seeing houses around me sit on market .
Interesting enough 3 towns in a row around the corner for sale 1.1, 1.159 and 1.2 , the most expensive sold , the others are sitting . It was the nicest and people seem to be figuring out ‘ we will buy low and fix up on our own’ is really friggin expensive. Better to buy a better house right now


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Just read an article that focused on what 1 mill bought last yr , versus this yr . The 22% drop is significant, I’m seeing houses around me sit on market .
Interesting enough 3 towns in a row around the corner for sale 1.1, 1.159 and 1.2 , the most expensive sold , the others are sitting . It was the nicest and people seem to be figuring out ‘ we will buy low and fix up on our own’ is really friggin expensive. Better to buy a better house right now


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Out my way they are still holding. Only 15 sales in Markham last week, last year avg weekly solds was about 45. There are no listing in my hood, haven't seen that for a long-time. Prices are holding, sep prices up slightly from sep 21.

Not so rosy in at the other end of the GTA, sis was thinking about moving up in Burlington, the hoid she's been eyeing is down 20% year on year.
Lenders are getting skittish too. 2 years ago my broker was writing deals on phone call. Almost like those radio ads.. "Do you own a house?" APPROVED!!! I'm closing a small place up north, $100k conventional mortgage, without CMHC they'asking me to pay for an appraisal and show proof of income
 
I can see Lenders getting more skittish and tighter , banks want to lend money the last thing they want is owning a house .


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When do the new build deals of six months ago get occupancy permits and the buyers have to pony up. I knew a guy that lost it all in Calgary a generation ago. Buy the biggest place you can and inflation wil make you rich they said. Completely true if you can survive the journey.

He moved there and bought big. When oil crashed he saw others called into the main office and then walked to the door. He never thought they would call his name and when they did it came with a thud.
 
When do the new build deals of six months ago get occupancy permits and the buyers have to pony up. I knew a guy that lost it all in Calgary a generation ago. Buy the biggest place you can and inflation wil make you rich they said. Completely true if you can survive the journey.

He moved there and bought big. When oil crashed he saw others called into the main office and then walked to the door. He never thought they would call his name and when they did it came with a thud.
I know lots of young folks that hot on the pre-built party train. Most are a year or two in, some facing their first renewals. Banks aren't getting tough on equity ratios st renewals-- yet, but those 600k mortgages aren't renewing at 1.7%.
 
When do the new build deals of six months ago get occupancy permits and the buyers have to pony up. I knew a guy that lost it all in Calgary a generation ago. Buy the biggest place you can and inflation wil make you rich they said. Completely true if you can survive the journey.

He moved there and bought big. When oil crashed he saw others called into the main office and then walked to the door. He never thought they would call his name and when they did it came with a thud.
a lot might not be closing anytime soon. ours was in 2 years and now officially delayed to 3. Strike, covid, supply chain issues.
 
House becomes 'disaster' for Ontario couple after skipping home inspection

"they would “do it all again” for the price they paid"
Really poorly written. Foundation began rotting after they bought? Nope. Four bed, 1.5 bath on 0.5 acre for 500k was decent. Problems listed sound annoying but without substantially more information calling it a disaster is media stupidity. Dishwasher leak ruining floor would not have been picked up by home inspection. That water event could have caused some of the drywall cracking if the water was left for a while before cleanup.

FWIW, recent build two car garage subdivision house outside barrie just sold for 1.6.
 
$500 HO helped me knock $5000 off my final price. I was seriously impressed with the thoroughness of the inspector. He picked up a small leak from the washer, and took pictures of a faint scale line to show it was a recurring issue.
 
House becomes 'disaster' for Ontario couple after skipping home inspection

"they would “do it all again” for the price they paid"
As I understand it the owner has to disclose a previous grow op or UFFI. I don't know if mushrooms are covered.

Ask me no questions and I'll tell you no lies.

Toilet sinking into a rotting foundation is hard to imagine.

Quote "First, it was the kitchen floor, which they ripped out after a dishwasher leak. Then, the drywall started splitting at the corners and the foundation began rotting. “That was the start of it,” she said."

So the damage was after they took possession and they'd do it again. A lot depends on the new owner's skill's and ability to get sweat equity.

Cub reporter strikes again.
 
Plywood was already saturated and the leaking unit just pushed it over the top.

Problem is some things you won’t find until you start doing something else…and then it becomes a domino effect as each opened door leads to another and another.
 
Plywood was already saturated and the leaking unit just pushed it over the top.

Problem is some things you won’t find until you start doing something else…and then it becomes a domino effect as each opened door leads to another and another.
Was the house built by Kevin and is a time bomb with a 35 year fuse?

There's little worse than something built under the banner of "What's the cheapest".
 
This is one to watch.

An example of location, location, location that would have been jumped on by a builder six months ago. The house is not in bad shape other than granny to the max, but in the end it is a two bedroom bungalow tear-down with likely older owners timing out....on a 42X144 lot--asking $2M at the moment.

Price has dropped to 1.88M already, estate sale.... it will be interesting to see what it finally goes for.
 
34 Kipling Place Barrie. 3 Bed Semi on 41x121 lot. Heavy smoker lived in it for years (recently deceased). Small rooms, no recent renovations. Reaks and heavily stained by smoking. Only two pics in listing of outside. Asking 525K. Similar house that looked much nicer sold in July for 571. Semi means tearing it down isn't really an option. Only way to get that smoke out would be a gut and refinish interior. Not a lot of room for a flipper if they pay close to asking price. If they could get a big discount, maybe they could paint, slap in laminate and run industrial ozone and get it back on the market.

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EDIT:
Also an architectural monstrosity. Check out those first floor "shutters" that are taller than the window but not wide enough to cover it.
 
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