real estate agents are paid per percentage so it s normal they encourage higher proposals and now with biding wars ... I saw a shitty house go for a million
Housing crisis in Canada
- Thread starter ZZDown
- Start date
That's not new..the realtor's job is to get the highest possible price for his/her clients. It is a sellers market. You can always move here: https://www.realtor.ca/map#ZoomLevel=4&Center=50.086373,-87.208054&LatitudeMax=60.08208&LongitudeMax=-45.67973&LatitudeMin=37.46741&LongitudeMin=-128.73637&Sort=1-D&PropertyTypeGroupID=1&PropertySearchTypeId=1&TransactionTypeId=2&PriceMax=300000&BedRange=3-3&BathRange=2-2&Currency=CAD
If you are the seller, you don't want higher proposals? Or you would go with the lowest bidder even if it well under your asking price and you would get a loss?
What do you mean by 'encourage'? Do they pull a gun out and force 20 people to bid? Houses are worth what people are willing to pay for them. A "shitty house" that goes today for one million, might go for more in the future if it's more in demand. Agents have nothing to do with this, they are simply surfing the wave.
Remote work has lead to huge increases in property markets in places like the Maritimes where housing prices had remained affordable compared to the rest of Canada and populations were not growing significantly so there wasn’t much inventory. Unfortunately local salaries can’t compete pushing longterm residents out which is a problem faced in many places in Canada for over a decade. Housing prices increasing at such levels doesn’t benefit the majority of the population. Unaffordable housing is not for Canada in the longterm and should have been dealt with 20 years ago. Much harder to deal with now.
Housing market is headed for big crush. Just wait a bit, when market collapses prices will fall (may be for a short period of time), and that will be the time to buy.
If real estate gets a "big crush", people will have bigger problems than being able to afford a house. A recession wouldn't be pretty.
Possibly yes. But that's when real estate investors (the smart ones) buy the property.
Of course, investors do not depend on salaried income. For the very most part of the population though, buying a house would be (i) the least of their problem and (ii) even if they want to buy, extremely difficult without a job.
When we had the last housing crisis in the US it wasn't just wealthy investors who bought homes at a discount. Some average Joes did it too. A guy I know, who lives in California, actually bought 4 townhomes (next to each other) in LA, California (we have special programs/loans for that), and rented 3 of those townhomes ever since. The value of his investment doubled at least in the past 11 years or so, while his tenants were paying his mortgage. FYI, he and his wife are two very ordinary Americans, who had regular, 9-5 jobs. So, it's not just investors who can benefit from housing market collapse.
Large majority who benefited from 2008 crash were not buying their primary residence. Whether they were real estate investors before 2008 or not many started getting into flipping homes or buying discounted properties and of course investors got many more opportunities to increase their real estate portfolios.
What stops one from getting into real estate purchase immediately after crash? It's the best time to flip houses. Once it starts going up, it keeps rising until the next crash. Here are some examples of people who didn't get burned by the 2008 crash, and who were doing 9-5 jobs (not millionaires/investors).:
1. Most their houses in late 90's or first couple of years of new millennium. Even after crash their property was worth twice or more of what they bought it for. And there were plenty of opportunities to buy second/third/fourth property before 2003-2004, when prices started to get ridiculous.
2. They were saving cash each month (whatever they could, $1000/mo or $2000/mo, for years while working their 9-5 jobs. It always comes handy to have $50K-$100K in your savings account which you could use as a down payment to buy a house.
3. They would never think of buying a house at high-interest rates, which people with bad credit or no proof of income were targeted for, and ended up as a main reason behind collapse. They would only buy at low interest rates, and would stay away from the market when it was red hot. They knew it would eventually crash.
To be sure, there were few people who did 1,2 and 3. Many did the opposite, bought when prices went sky high, never saved enough cash to buy second house and etc. But it was doable. It was a matter of doing the right thing and having a will to carry out with it.
Would add savings to put towards a down payment and many don’t want to be a landlord for a variety of reasons and don’t have the time to be a landlord. You can hire someone to manage your property but that often means losing a good amount of your profits and you will often still need to get involved with any problems.
Not everyone lost a job during recession. Unemployment rate (the real one, not the one based on DOL formula) was around 17%, which means about 12% of previously actively employed population lost their jobs. Over 80% of active workforce was still employed. I am not asking why unemployed guy was unable to finance a purchase of a new home. I am asking why couldn't 80%+ do it.
Mortgages were available if you had a good credit history. New law was passed in 2008 which made it harder to get a mortgage (it ended "liars loans"/no income loans, high interest rate mortgages and etc. Just as it is now).
People who wanted to do it did it. I personally didn't do it, but I am not making excuses. I didn't do it because I didn't want to (wasn't wise/smart enough at the time). Anyone determined to do it could do it, with the exception of those who lost jobs without their fault and were out of workforce due to economic conditions. But, as I noted above, this didn't apply to over 80% of active workforce.