[cornholio]

Originally Posted by connect2source

Been in this a long time, been through downturns. Not here to coach, just witness to 100's of clients who've done amazingly well in real estate, it's either for you or it's not, people were talking 'bubble' 4-5 years ago, those who took the plunge have made amazing gains. I'm good at what I do, I'm cautious, pragmatic, highly experienced and educated, can't speak for all of my colleagues.

People were talking bubble 4 to 5 years ago because the western world led by the US was supposed to start normalizing rates again. There was a delay with expected results, for example very nice profits for your clients.

Jan 25th 2012:

WASHINGTON — The Federal Reserve, declaring that the economy would need help for years to come, said Wednesday it would extend by 18 months the period that it plans to hold down interest rates in an effort to spur growth.

The Fed said that it now planned to keep short-term interest rates near zero until late 2014, continuing the transformation of a policy that began as shock therapy in the winter of 2008 into a six-year campaign to increase spending by rewarding borrowers and punishing savers.

Ninety minutes later, the Fed published for the first time the predictions of the committee’s members on when they would raise interest rates. It showed that 11 of the 17 members expected the Fed to raise rates by the end of 2014. Taken together, the documents suggested that the Fed expected to keep rates near zero until late 2014, but probably not any longer than that.

http://www.nytimes.com/2012/01/26/busine...n-rates-near-zero-through-late-2014.html

The bubble is there. We know all about off shore money etc flowing in as well, but in this case lets stick to rates. Rates are going up. They are going up as we speak. Any pre sale today will be in all probability facing a Canada with interest rates at around 4 points (at least) by the time it is complete and ready for a real mortgage. Today we are at 0.5 points in Canada and the US is at 1 point, and will be probably at at-least 1.75 points before the end of the year (and it was at 0.25 points not too long ago). *Also inventory can be low because of market shock when people hold off on selling, for various reasons which I will not discuss right now. The region has been if anything overbuilding for some time, if true that means there is tons of hidden inventory that can suddenly show up very quickly once poked out from hiding.

Fed, in shift, may move to faster pace of rate hikes

http://www.theglobeandmail.com/report-on...ster-pace-of-rate-hikes/article34295613/

Normalization:
https://www.stlouisfed.org/annual-report/2015/what-is-monetary-policy-normalization

In sum, my testimony showed that the high level of reserves is a legacy of QE, that with the supply of reserves now much greater than demand, the Fed has no alternative to paying interest on reserves as it normalizes policy, and that in the years ahead the balance sheet should be bought down in size to be consistent with a market determined interest rate rather than administratively determined by the Fed. The normalization period, during which monetary policy returns to a normal state, should be as short as possible. In my view, normalization should be shorter than currently implied by the Fed’s “Policy Normalization Principles and Plans.”

https://economicsone.com/2016/05/18/the-feds-normalization-how-long-and-how-far/

My question to you is what do you think these rate increases will do to the value of pre-sales that wont be ready for occupancy or a mortgage for maybe 3 years?