Canada's 'housing bubble' deemed close to bursting

[SignalHillHiker]

Home inspection was the most stressful part of buying for me. These 100+-year-old houses often have irredeemable damage that only comes to light during a sale (a few have been, for example, condemned). It was the only thing that could go wrong after my offer was accepted. Fortunately, not much - a few spots of wood rot around the front door, some interior oddities not up to code (“pinches” behind hand rails on the stairs, etc.) Only major concern was the house is basically held up with matchsticks and I’ll get that strengthened soon enough.

I could never, ever buy a house without a home inspection, even if I lived in an area where that made it impossible to buy. It’s just too great a risk - and you can’t then resell without disclosing the way the previous owner is usually able to get away with doing.

[casper]

Originally Posted by SignalHillHiker

Home inspection was the most stressful part of buying for me. These 100+-year-old houses often have irredeemable damage that only comes to light during a sale (a few have been, for example, condemned). It was the only thing that could go wrong after my offer was accepted. Fortunately, not much - a few spots of wood rot around the front door, some interior oddities not up to code (“pinches” behind hand rails on the stairs, etc.) Only major concern was the house is basically held up with matchsticks and I’ll get that strengthened soon enough.

I could never, ever buy a house without a home inspection, even if I lived in an area where that made it impossible to buy. It’s just too great a risk - and you can’t then resell without disclosing the way the previous owner is usually able to get away with doing.

Only time I had done a purchase without a home inspection has been a condo in a new development where I was buying from the developer and the first owner. I agree, otherwise it is to great a risk.

I would be concerned about a previous owner not disclosing. I had had that where it has been an estate sale.

[whatnext]

Originally Posted by thewave46

It is easy to hate on this couple. They literally made about every big mistake one could make while purchasing a home/relocating to a city. They decided to go all-in on moving to a new place, bought sight unseen, overpaid in a city that doesn't have a ton of limitation for growth, and did not include a home inspection as a condition.

There's a lot of garbage houses out there. I have walked though many of them. Cracked foundations, wet basements, sketchy wiring, 'Let's butcher an old home' additions, bank repos, and the 'rented to substance-abusers' special. I must have walked through twenty homes over the course of my purchase.

However, while reading the article, my heart kind of goes out to them. They admit their expensive mistakes, and mostly are trying to warn others not to make the same ones. They're unhappy, but not excessively whiny.

But yes, warning is the key here. I get the pressure/worry of buying a home, and the intangible 'I gotta get anything before I am shut out' feeling. Admittedly, the best choice for the couple would have been to move to Sudbury and rent for a year. For all the mantra of 'Renting is a waste of money' drilled into our skulls, it allows one a way out after a year, no muss, no fuss. That's a huge advantage. It is better to rent, get the feel on the ground if one likes the city, then decide to view homes locally to find what one wants.

From the article, he is originally from Kapuskasing, so relocating to Sudbury does make some sense.

I understand your point but honestly, how much more foolish could these two have been? Buying a house sight unseen is dumb enough but to do so without an inspection? Did they think this was the last house on Earth?

[swimmer_spe]

Originally Posted by Vorkuta

Inspections are a good idea, but people shouldn't think of them as "guarantees". They're good at catching stuff that is VERY visible (or just sometimes oddly done) but it's nearly impossible to catch not-yet-leaking foundation cracks behind finished walls, for example. If you can't afford a home inspector at LEAST take someone though who has dealt with major home repairs or renos before. They've likely found a lot of the "gotchas" themselves. I've seen actual inspections quibble over tiny details (bracings that were technically improper but that were easily fixed and had been stable for 40 years+) but miss other things that were much more costly to repair.

Doesn't help that the "home inspection business" is... kinda wild wild west a lot of times.

There were a few things missed that were behind walls, like carpenter ants. However, seeing ants and putting traps got rid of them. as far as the damage.... wasn't bad enough for me to fix it.

Originally Posted by SignalHillHiker

Home inspection was the most stressful part of buying for me. These 100+-year-old houses often have irredeemable damage that only comes to light during a sale (a few have been, for example, condemned). It was the only thing that could go wrong after my offer was accepted. Fortunately, not much - a few spots of wood rot around the front door, some interior oddities not up to code (“pinches” behind hand rails on the stairs, etc.) Only major concern was the house is basically held up with matchsticks and I’ll get that strengthened soon enough.

I could never, ever buy a house without a home inspection, even if I lived in an area where that made it impossible to buy. It’s just too great a risk - and you can’t then resell without disclosing the way the previous owner is usually able to get away with doing.

That is the point though. It is to help you find out if it is worth getting. It can also be used to haggle on the price. Just like having to find out whether you can get a mortgage and insurance for it, finding out the actual condition is important. With my current house, so far, no real surprises that were not already stated in the inspection.

Originally Posted by casper

Only time I had done a purchase without a home inspection has been a condo in a new development where I was buying from the developer and the first owner. I agree, otherwise it is to great a risk.

I would be concerned about a previous owner not disclosing. I had had that where it has been an estate sale.

So, you think they built it right?You might be surprised how bad new builds are, especially in large subdivision new construction.

[Truenorth00]

Originally Posted by whatnext

I understand your point but honestly, how much more foolish could these two have been? Buying a house sight unseen is dumb enough but to do so without an inspection? Did they think this was the last house on Earth?

You must not know anybody who bought lately. Any condition means offer is rejected. At least until a month ago....

[whatnext]

Originally Posted by Truenorth00

You must not know anybody who bought lately. Any condition means offer is rejected. At least until a month ago....

So continuing renting. Markets don't stay hot forever.

[thewave46]

Originally Posted by whatnext

I understand your point but honestly, how much more foolish could these two have been? Buying a house sight unseen is dumb enough but to do so without an inspection? Did they think this was the last house on Earth?

Like I said before, it's easy to hate on them.

There's a cultural and psychological aspect pressing hard, which doubled down during COVID. When prices shot to the moon and being in a big city didn't confer advantages as clearly, I could see people panicking. It's not necessarily a logical response.

I give them the benefit of the doubt, and the credit for speaking out publicly about not falling for our worst instincts. They'll be learning the lesson the expensive way, so maybe someone will read this and not have to.

[swimmer_spe]

Originally Posted by Truenorth00

You must not know anybody who bought lately. Any condition means offer is rejected. At least until a month ago....

Originally Posted by thewave46

Like I said before, it's easy to hate on them.

There's a cultural and psychological aspect pressing hard, which doubled down during COVID. When prices shot to the moon and being in a big city didn't confer advantages as clearly, I could see people panicking. It's not necessarily a logical response.

I give them the benefit of the doubt, and the credit for speaking out publicly about not falling for our worst instincts. They'll be learning the lesson the expensive way, so maybe someone will read this and not have to.

It is insane how people were rushing into buying a house got. I don't understand it. It was like people were clambering over each other to get out of the cities.

[Architype]

Anybody who really wants cheaper housing can move to one of these cities.

This is where you can still buy homes in Canada for under $200,000

Many Canadians may be feeling priced out of the red-hot real estate market, but there are still some cities in the country where buyers can purchase homes for under $200,000.

But you likely won't find those homes in Ontario or British Columbia . . .

Here are the places in Canada with the largest share of homes listed for less than $200,000. Point2 analyzed the largest cities from each region of the country, including Atlantic Canada, Quebec, Ontario, the Prairies and B.C.

1. Cape Breton, N.S. – 44.2%
2. Regina, Sask. – 36.5%
3. Saint John, N.B. – 26.72%
4. Lethbridge, Alta. – 26.1%
5. Edmonton, Alta. – 24.63%
6. Saskatoon, Sask. – 23.47%
7. Winnipeg, Man. – 23.45%
8. Red Deer, Alta. – 22.8%
9. St. John's, Nfld. – 13.46%
10. Quebec City, Que. – 9.85%

Atlantic Canada had the highest share of affordable homes, with 44.2 per cent of the listings in Cape Breton, N.S. coming in at less than $200,000. However, Halifax – the biggest city in the region – had just 1.63 per cent of homes listed at under $200,000.

The Prairies boast eight cities where affordable homes make up a more significant part of the real estate market. Of the total homes for sale in Regina, Sask., 36.5 per cent are less than $200,000. Lethbridge, Alta. had 26.1 per cent of listed homes priced at less than $200,000, followed by Edmonton, Alta. (24.63 per cent), Saskatoon, Sask. (23.47 per cent), Winnipeg, Man. (23.45 per cent), and Red Deer, Alta. (22.8 per cent).

https://ca.finance.yahoo.com/news/this-i...n-canada-for-under-200000-171717878.html

[SignalHillHiker]

Why do they call out one large, rural region (Cape Breton) when the rest are all cities? Surely it’s even cheaper on the Northern Peninsula here, and rural parts of northern provinces.

[Architype]

Originally Posted by SignalHillHiker

Why do they call out one large, rural region (Cape Breton) when the rest are all cities? Surely it’s even cheaper on the Northern Peninsula here, and rural parts of northern provinces.

Cape Breton is Nova Scotia's idea of a city, a regional municipality like Halifacts.
They have a real mayor.

[Truenorth00]

Originally Posted by swimmer_spe

It is insane how people were rushing into buying a house got. I don't understand it. It was like people were clambering over each other to get out of the cities.

No conditions has been the norm for years in big cities. Even before Covid. At least in any desirable neighborhood. It's going national now as those folks move to smaller cities.

[rousseau]

Originally Posted by Architype

Anybody who really wants cheaper housing can move to one of these cities.

Ugh, no thanks. It's frustrating looking at all the viable options Americans have by comparison. Crikey, if I were an American in my thirties feeling squeezed in a coastal city I would totally be scouring the midwest for groovy places to live like Pittsburgh or Cincinnati. Or Burlington Vermont.

When you're in the middle of the island that is southern Ontario you basically have nowhere else to go. From what I recall there used to be a contingent of twenty-something "creatives" and misfits that would run off to the cheap rents of the Plateau in Montreal, but those days are over.

[Hali87]

Originally Posted by SignalHillHiker

Why do they call out one large, rural region (Cape Breton) when the rest are all cities? Surely it’s even cheaper on the Northern Peninsula here, and rural parts of northern provinces.

In this context they probably mean Sydney-Glace Bay (+surrounding areas, which makes up CBRM). For statistical purposes that chunk of the island is one city called "Cape Breton", although it's kind of ambiguous and I wouldn't be surprised if the researchers get things confused sometimes. There are 4 counties on Cape Breton Island, and one of them is Cape Breton County, and that's essentially what became CBRM - hence the confusing/uncreative name.

[Architype]

Originally Posted by rousseau

Ugh, no thanks. It's frustrating looking at all the viable options Americans have by comparison. Crikey, if I were an American in my thirties feeling squeezed in a coastal city I would totally be scouring the midwest for groovy places to live like Pittsburgh or Cincinnati. Or Burlington Vermont.

When you're in the middle of the island that is southern Ontario you basically have nowhere else to go. From what I recall there used to be a contingent of twenty-something "creatives" and misfits that would run off to the cheap rents of the Plateau in Montreal, but those days are over.

To a limited extent, it's also our option to move to a cheaper American city if we so choose. There are also other places in Canada, notably smaller, which might be more attractive destinations than some of those listed. If you're an American, say in NYC, a move to the Midwest might be equivalent to a move from Ontario to New Brunswick or Winnipeg for a Canadian.

[casper]

Originally Posted by swimmer_spe

So, you think they built it right?You might be surprised how bad new builds are, especially in large subdivision new construction.

I don't work in construction so I am no expert, but I popped in and have a look every week or two during construction. Nothing looked off to me.

Ok, I though it was weird how they fully enclosed the exterior then the following week had to cut a hole in be able to get the dry wall into the second floor.

When I sold a few years later the new buyer had an inspection. The only thing the inspector found was the dishwasher was a fire hazard. Apparently GE had a recall to replace a motor that I was not aware of. The home inspector clearly checked all the appliances for recall notices.

[goodgrowth]

Going to be sorta hilarious when Edmonton is inevitably like 3 million people and still cheaper than 90% of Canadian cities...

[casper]

Originally Posted by goodgrowth

Going to be sorta hilarious when Edmonton is inevitably like 3 million people and still cheaper than 90% of Canadian cities...

Edmonton, Calgary, Saskatoon, Regina and Winnipeg have the advantage that when they need more land, they just expand the city boundaries and develop more land.

[niwell]

Things are probably different now with the (slight) cool-down, but when we were looking in February it was virtually impossible to make an inspection condition of sale anywhere in Southern Ontario. We paid for an inspection before making an offer on very tight timelines and the realtor mentioned that very few people were doing that. Most people were getting into bidding wars without really looking into any of the potential issues. There was a huge amount of pressure to get in an offer lest something get scooped out from under you. And knowing people who were outbid over a dozen times I can see why they may get fed up and just go for it. We gave up on hot markets and went for a secondary house in a small town that was a bit more reasonable.

[Truenorth00]

Originally Posted by goodgrowth

Going to be sorta hilarious when Edmonton is inevitably like 3 million people and still cheaper than 90% of Canadian cities...

Won't be that hilarious when you have 2 hr one way commutes in Edmonton at a third the population of the GTA.