COVID and the housing market

[MacDoc]

Could never do that, no guarantee you’ll make it out of bed tomorrow.

many learned a hard lesson about that with Covid.
I was always the rolling stone and have thousands of travel photos to show it.

Put money into building a business that let me travel ( and the kids ) when young enough to really enjoy it. Briefly a homeowner in the early 90s when $300k bought a decent house in Sauga thanks to the lat 80s crash. Sold on divorce ( another "you never know event )and took the $40k benefit and kept the biz running.
Always ran the biz from home and never any retail ( too restricting ).
Travelled a lot and now settled in Australia with little to show except the constantly rotating travel photos on the 3 screens. I always resented the ill treatment of the banks to small business compared to "step right get your dream home ?"
Experiences are best savoured in youth including with the kids.
I'm happy to live as a 75 year old pensioner on the poor side of the table with a modest stipend monthly that matched with partners gets us by.
My only regret from a real estate standpoint is not being able to hold on to 35 acres of ocean front in New Brunswick we bought for $30k when I was in my 20s. The two partners needed to sell to continue schooling and we "cashed out" for $31k a few years later ....I could not raise $20k then.
Zoned for 18 2 acre Lots - 9 ocean front 9 on the already existing road.
Warm water beach and next to a Provincial Park at Shediac.
The old farmer wouldn't take anything but cash in hand for it and one of the very few swimmable beaches on the east coast as the Gulf Stream swung by....sigh...life goes on.
My goal was always to have a business and employ people and I managed to for about 50 years ...... not without its drama.
That risk is not comfortable for many.

 

[AllistonGT]

Could never do that, no guarantee you’ll make it out of bed tomorrow.

I cant argue with that. As I said. It's not for everyone.

 

[Evoex]

Of course they can…but they need to be positive…and there’s lots of people who put money in the market recently cause ‘it’ll only go up!’

And with recent market conditions…

View attachment 57976

The market does eventually go up. Can you afford to ride out the storm is the question.

 

[MacDoc]

Partner was one and even her accountant thought it a good idea.
Instead paid off the house and even now downsizing to a granny flat so we can travel before I my health deteriorates further.
I always wondered why housing didn't command the same decline in value as a used car.
Rates and taxes are the new rent and you are responsible for repairs. ....nah

 

[GreyGhost]

Partner was one and even her accountant thought it a good idea.
Instead paid off the house and even now downsizing to a granny flat so we can travel before I my health deteriorates further.
I always wondered why housing didn't command the same decline in value as a used car.

Because the supply of used cars consrantly increases but land is finite. Some places are even losing useful land (either swept away or within a flood plane so buildings get destroyed often). Sure, it is possible to make land (Dubai and Hong Kong airport come to mind) but that land is even more expensive than existing land.

 

[MacDoc]

And yet Singapore manages to house everyone at affordable prices. It's always a choice.
The market sucks when it comes to shelter.
The mafia bought all the farm land around the GTA in the 70s ( my landlord was one ) knowing they would never be appropriated for affordable housing.
It's a mindset ....nothing more.

 

[GreyGhost]

And yet Singapore manages to house everyone at affordable prices. It's always a choice.
The market sucks when it comes to shelter.
The mafia bought all the farm land around the GTA in the 70s ( my landlord was one ) knowing they would never be appropriated for affordable housing.
It's a mindset ....nothing more.

It's also a substantial difference in built form. Average dwelling size in Singapore is 750 sq ft. Depending on the source you believe, canada average detached dwelling is 1500 to 1800 sq ft and condo is now <700. Take an R1 lot (1M), put on a sixplex with 700 sq ft units (plausible and similar in scale to a max building envelope single family dwelling), keep government fees out (reduces cost by six figures per unit) and you could be <$500k per unit (~30% land, 70% building). If you want cheaper, you either need more units on same land (preferably without needing expensive upgrades like elevators and underground parking) or get the cost to build down (not sure how to do that substantially).

The cost of Materials to add 10 outlets on five circuits and a light runs close to $600 now. Even without gouging or people taking advantage, constructing housing is not affordable.

 

[Mad Mike]

It's also a substantial difference in built form. Average dwelling size in Singapore is 750 sq ft. Depending on the source you believe, canada average detached dwelling is 1500 to 1800 sq ft and condo is now <700. Take an R1 lot (1M), put on a sixplex with 700 sq ft units (plausible and similar in scale to a max building envelope single family dwelling), keep government fees out (reduces cost by six figures per unit) and you could be <$500k per unit (~30% land, 70% building). If you want cheaper, you either need more units on same land (preferably without needing expensive upgrades like elevators and underground parking) or get the cost to build down (not sure how to do that substantially).

The cost of Materials to add 10 outlets on five circuits and a light runs close to $600 now. Even without gouging or people taking advantage, constructing housing is not affordable.

Demand is also quelled somewhat by qualifying rules. In Singapore, basic public housing can be purchased for about $500/sq'. Must be your only property, must be a citizen and have lived in SG for 3 years, can't sell for 5 years, can't rent out your space.... and more.

This might work in Toronto if rules were enforced.

 

[crankcall]

There are things done in Asia ( Singapore) that would NEVER fly here . It’s like that , well in Norway… argument.


Sent from my iPhone using GTAMotorcycle.com

 

[crankcall]

Everyone approaches life differently. We bought a house , paid it off , bought a vacation house , paid it off . Sold vacation house , moved to stupid expensive house ( for what it is) and paid it off . It’s our comfort level, we can sleep at night .
We also have had 2-3 good trips per yr. It’s all about balance and planning.
And not getting a divorce……


Sent from my iPhone using GTAMotorcycle.com

 

[crankcall]

@MacDoc , I gotta ask , you’ve mentioned in several threads small business getting the poopy end of the sticks by banks. You ran your business from home , didn’t do retail so little inventory, I’m assuming a service based business , what sort of business finance could you ever have needed ?


Sent from my iPhone using GTAMotorcycle.com

 

[MacDoc]

Why would you assume little inventory.
Service was a minor aspect maybe 10% - the rest B2B - we would stock up to 1/4 million.
One rack of laptops was worth 85k and I had 1/3 of working capital tied up in 2019 iMacs alone. Many Pro clients did not like the newer OS - including me.
RAM and drives took almost zero space but very high value.

Appointment only ...no walk in, no signage, no set hours. Still retained my first client from 1985.

 

[Mad Mike]

@MacDoc , I gotta ask , you’ve mentioned in several threads small business getting the poopy end of the sticks by banks. You ran your business from home , didn’t do retail so little inventory, I’m assuming a service based business , what sort of business finance could you ever have needed ?


Sent from my iPhone using GTAMotorcycle.com

IF one has a 700 credit score, getting a small biz ULOC should be easy. My wife was a stay-at-home mom with a home-based business doing $60K a year -- she got a $60K ULOC from CIBC back in 2002. Same for my kids, my son got a $50K ULOC from RBC in a couple of days, he was making $12/hr but wanted to start his own business in 2014.

It's still easy. My other son got $50K overnight from RBC last year with no particular need for the cash.

 

[MacDoc]

Not the scale needed and with very high CC levels TD would not increase ULOC above $12k. Then because I rarely used it they decided I only needed $5k....reasoning "well you didn't need it as you didn't use it" My credit scores were never in the 700+, rather in the mid to high 600s and they would give me lots of CC but never a decent sized ULOC.
I suspect other factors in your tale of easy access. Count me from Missourah.
When you add in prime +6% on ULOCs the 30 days of free float on the the CC was more attractive as generally cashflow allowed consistent payment and the Uloc was only for topping off a CC payment. CC travel perks also useful.

 

[mimico_polak]

Have always admired people that were able to make a business out of nothing and enjoy their life’s work doing so.

Kudos @MacDoc and congrats on the success. Same to @crankcall seems like you’ve been very successful!

Me…I’m an idiot. Just working away for the govt and fantasizing about doing my own thing. Maybe one day.

 

[MacDoc]

Success is relative term but thanks. Generally succeeded in my life goals and really enjoyed most of the creative clients over the years and remain in touch with several as friends. One is visiting next month - he has a dottor in Aus and one in Canada and playing snowbird between them.
I was very early into the work from home and that really benefitted during covid. In truth I got to see more of the kids than many dads do.....my dottor told me she missed my driving her to private school once she got her own licence.
I'm told selling out a small business is tough but a long nurtured relationship with a growing multi-national made it possible....10 years of talking about it finally produce results last year. Still somewhat a work in progress.
There is a trade off between the security of working, especially for gov and the opportunity independence brings. One of each in a relationship seems a decent mix....

Crankcall - - well done...and crucial is this

And not getting a divorce……
.

..ex set herself up in an import biz in a protected medical field and did extremely well found a loophole and exploited it √
......for me - Apple ate/eats all the margin and other gear constantly declines in value so it was always a scramble for margin and holding value tho used gear was beneficial.
Had I bought 10k of Applestock in the 90s as my best friend from uni did, I'd be far better off.
Stayed small/boutique and lower stress and more time to ride and travel.

 

[crankcall]

I have been successful , but largly through luck. I married somebody that had a decent job, that took a lot of early stress out of the equation. We mostly liked the same stuff . I took a job with a group of like minded individuals and have never worked "hard" . I have been very fortunate. And while in my social group of 6 other couples , wife and I are the only ones on an original partner. You have less when you see half go away.

 

[mimico_polak]

My buddy is just going into divorce proceedings from what I understand.

Been together for approx 20 years, 3 kids, stay at home wife the entire time, and his salary of 150-170k/year...

I don't ask, but I heard that she upped and moved out and he's footing the bill for $3500/month on a rental for her and the kids.

Other buddy...married 40 odd years, caught the wife cheating with the neighbour when he went home from work...divorce cost him a fortune (maybe 100k) and as he got divorced at the highest income ever he was on the hook for about $5500/month.

Went from being on top of the world, to an arrest record, losing his house, losing the gf that he got, and passed away (from what I suspect is suicide) within a span of 2 years.

 

[GreyGhost]

My buddy is just going into divorce proceedings from what I understand.

Been together for approx 20 years, 3 kids, stay at home wife the entire time, and his salary of 150-170k/year...

I don't ask, but I heard that she upped and moved out and he's footing the bill for $3500/month on a rental for her and the kids.

Other buddy...married 40 odd years, caught the wife cheating with the neighbour when he went home from work...divorce cost him a fortune (maybe 100k) and as he got divorced at the highest income ever he was on the hook for about $5500/month.

Went from being on top of the world, to an arrest record, losing his house, losing the gf that he got, and passed away (from what I suspect is suicide) within a span of 2 years.

At our old house, the neighbour was a rental I called the house of broken dreams. Occupied a year at a time by a chain of freshly separated women that realized that they needed less space so rented 2400 sq ft instead of the 4000+ they were used to. After a year they realized that for one person, 2400 sq ft is way bigger than they need or want and would downsize again.

 

[Georg3__]

My buddy is just going into divorce proceedings from what I understand.

Been together for approx 20 years, 3 kids, stay at home wife the entire time, and his salary of 150-170k/year...

I don't ask, but I heard that she upped and moved out and he's footing the bill for $3500/month on a rental for her and the kids.

Other buddy...married 40 odd years, caught the wife cheating with the neighbour when he went home from work...divorce cost him a fortune (maybe 100k) and as he got divorced at the highest income ever he was on the hook for about $5500/month.

Went from being on top of the world, to an arrest record, losing his house, losing the gf that he got, and passed away (from what I suspect is suicide) within a span of 2 years.

FAK