Housing market

[MsMe]

Originally Posted by adam

A lot of young couples are buying houses in new subdivisions for over $600k in the GTA. They'll be in up over their heads soon enough. When the housing market crashes (it hasn't yet!) their value will plummet but they'll still have a $600k mortgage. This scenario will play out on a grand scale. There will be too many houses and not enough buyers.. prices will come down but interest rates will go up.

That's what I'm afraid will happen. As that can happen in a recession. I've seen that before.

[FairHamilton]

Originally Posted by adam

A lot of young couples are buying houses in new subdivisions for over $600k in the GTA. They'll be in up over their heads soon enough. When the housing market crashes (it hasn't yet!) their value will plummet but they'll still have a $600k mortgage. This scenario will play out on a grand scale. There will be too many houses and not enough buyers.. prices will come down but interest rates will go up.

A little too much doom and gloom. While I'll admit that some are in too deep, I think you are being a little too overly pessimistic.

We are not going to see a collapse like we've seen in the US.

[FairHamilton]

Originally Posted by MsMe

That's what I'm afraid will happen. As that can happen in a recession. I've seen that before.

Then you have your answer, go long with a fixed rate.

[Berklon]

I've been looking to buy for a while and it's definitely a buyers market now.
Houses are on the market a lot longer than before and I've seen many have a few price drops and still sit unsold.

I'm looking for something preferably in the South-east part of the lower city. Unfortunately prices haven't dropped as much as they should - most homes are still overpriced - even if they're going unsold for months. Luckily I won't have much of a mortgage, so the rates won't make that much of a difference to met.

[markbarbera]

For those shopping mortgages, I recommend PC Financial. When I was buying five years back, they had the best rates by far, and were willing to lock as long as ten years (which is what I went for, being a highly risk-averse kind of guy). Plus, the PC Points awarded for signing the mortgage allowed for a good sundry stock-up session at Fortinos the week of the move.

[adam]

Originally Posted by FairHamilton

A little too much doom and gloom. While I'll admit that some are in too deep, I think you are being a little too overly pessimistic.

We are not going to see a collapse like we've seen in the US.

I hope you are right.. its supposed to stay that way in the US for the next few years... how long can we hold our breath?

[MsMe]

Originally Posted by adam

I hope you are right.. its supposed to stay that way in the US for the next few years... how long can we hold our breath?

That's usually the way Adam, US usually has more effect on us in so many ways. And we tend to follow the same roads as they do in so many ways.

[BrianE]

Originally Posted by Berklon

I've been looking to buy for a while and it's definitely a buyers market now.
Houses are on the market a lot longer than before and I've seen many have a few price drops and still sit unsold.

I'm looking for something preferably in the South-east part of the lower city. Unfortunately prices haven't dropped as much as they should - most homes are still overpriced - even if they're going unsold for months. Luckily I won't have much of a mortgage, so the rates won't make that much of a difference to met.

Good choice of location, I've been in this area for over 2 years now and have really enjoyed it. My neighbor just put their house on the market on Monday. 3 bed 1 bath, no driveway but nicely landscaped. $159 900. Just to give you an idea of how much a slightly smaller than average house on a decent street will cost you.

[FairHamilton]

Originally Posted by adam

I hope you are right.. its supposed to stay that way in the US for the next few years... how long can we hold our breath?

Our housing market isn't 'bubbled' like the US was, it's been a more sustainable growth.

Also, I think the economy has become more global since other times when we just followed the US. Also, it's worth noting that our countries finances are in much better shape than in the US (thank-you Jean Chretien and Paul Martin).

Not to say the US doesn't have a large impact on our economy, it's just not the same as say in 1981. We'll most likely follow, but won't go shoulder to shoulder to the same depths (or heights).

[omro]

Everything I've read suggests that the Canadian housing market won't crash, merely flatten out and maybe a slight dip.

And that Hamilton's prices had leapt as they were seen as undervalued and also Hamilton houses were being seen as ripe potential commuter belt to Toronto, as you could buy a place twice the size for half the price. However, without the infrastructure in place for a fast link to Toronto (yet) and the rising oil prices, making a car based commute more expensive, demand has slowed from the Toronto commuters.

[adam]

Its true, Hamilton (downtown especially) will be sheltered from the market downturn since houses were undervalued to start with. A global recession is definitely in the works though.

[MsMe]

In the late 80s was a very hot market with high priced houses and interest rates were unreal. Then in the early 90s in that recession the housing prices dropped drastically and didn't the interest rates stay a tad higher? I forgot.

[adam]

Interesting article here

[MsMe]

Another interesting article I just found as well.

http://www.canadianmortgagetrends.co...le-rate-1.html

[FairHamilton]

Originally Posted by adam

Interesting article here

Yes, very interesting. It confirms my earlier post with the majority of economists (save Merrill) views support that we won't see the same meltdown as has occurred in the US.

Thanks for posting the article.

[FairHamilton]

In Hamilton, so dependent on the hard-hit manufacturing industry, cracks are evident in the upper end of the market. Hamilton luxury home sales (defined as $850,000 and higher) have taken a massive hit, down 34 per cent, while the entire market is down 7 per cent.

Source: http://www.yourhome.ca/homes/article/506393

[raisethehammer]

I get a kick out of people who act all surprised by this recent news both here and in the US.
I remember having chats with friends and financial advisors 6-7 years ago about this day coming.
Too many people need to turn off the TV and turn on their brain. There is absolutely not one thing shocking about what's going on right now. The only thing shocking to me is that it didn't happen sooner.

[FairHamilton]

http://www.yourhome.ca/homes/article/506392

[adam]

Its true - most people who stopped to think about it saw all this coming way before it hit the media

[raisethehammer]

nothing hits the media until it's current...they aren't interested in presenting 'news' or 'research'.
they like hysteria and bold, crazy top stories.