Canadians dragging around too much debt

[jthong]

gotta agree with Neptune there. This foreclosed property that I was eyeing, I didn't even have the chance to bargain hard. Some m0r0n offered close to listing price. I can't wait to see other people outbid each other in the court.

[Johnny Horton]

Yes, I've heard that the market is on fire too.
Just wait 3 months.

[Neptune]

Yes, I've heard that the market is on fire too.
Just wait 3 months.

Why, what's gonna happen in 3 months? Flood of listings?

[Johnny Horton]

The market will be a lot cooler.

I think the writing is on the wall.

I've heard so many stories of Sellers not having any dough.

It's not getting any better iether.

[RENoob]

The market will be a lot cooler.

I think the writing is on the wall.

I've heard so many stories of Sellers not having any dough.

It's not getting any better iether.

hey Johnny, if you type in regular size font, does it mean you're not being sarcastic?

[yogurt]

Just wait 3 months.

A year and 3 months. At least.

Next shoe to drop will be Dubya. Then government cutbacks. Than big increases in unemployment. And the coup de grace - interest rates will start going up.

Don't even think about buying before fall 2010.

[ayan]

I find it a bit hard to believe that people are racking up so much debt! How do people sleep at night ?

[Greenhorn]

Yes, I've heard that the market is on fire too.
Just wait 3 months.

I know some investors who would love to sell, but won't because there is no profit on the table. They are underwater on the deals. Now they are bleeding money every month, paying a tenant to live in their investment. They tell me the negative cash flow each month is like Chinese water torture. I wonder if there are any homeowners in this situation?

[meeeeeep]

I think it's a pretty common scenario. There is a newish house in Shaughnessy that the owner picked up in the fall of 2007 for $2.8m. He now can't sell it even for $1.9m. While he waits (for what I'm not sure), he's got it rented out for $4000/month.

[yogurt]

Gross yield on purchase price of 1.7%? Wouldn't that be negative after taxes, maintenance, and insurance?

Can we give this guy a prize?

[meeeeeep]

I'm sure it's super-negative, especially since $4000 was the asking rent and it sat unoccupied for months. The property taxes alone are around $8000/year. Now add maintenance, insurance, landscaping, property manager, etc. etc. etc. Again, though, the fact that he paid $2.8m for this place - you have to see it to understand - in the first place reflects how out of control things had become.

[jesse1]

Gross yield on purchase price of 1.7%? Wouldn't that be negative after taxes, maintenance, and insurance?

Can we give this guy a prize?

Likely he's looking for short-term tenants as he waits for the Olympics or whatever. In such a situation I wouldn't be surprised if he's willing to eat a loss for a short time. Doubtful there are many people around willing to fork over $10,000 per month in rent.

[rentah]

I know of other westside properties with similar numbers.

Also, as I'd mentioned elsewhere, of westside home-owners who are in trouble because of condo speculations gone wrong.
There seem to be lots of ways in which different property areas/levels are inter-related.

[grantness]

gotta agree with Neptune there. This foreclosed property that I was eyeing, I didn't even have the chance to bargain hard. Some m0r0n offered close to listing price. I can't wait to see other people outbid each other in the court.

Before you start namecalling, look in the mirror... you were ignorant if you ever thought you could "bargain hard" on a BC foreclosure.

As for this other buyer being a "m0r0n" well you've basically admitted he offered UNDER market value (since you expect it to bid higher in court) so how exactly did you expect your super-low offer to hold up even if you DID get it accepted by vendor?

[DownTurnLiving]

I know some investors who would love to sell, but won't because there is no profit on the table. They are underwater on the deals. Now they are bleeding money every month, paying a tenant to live in their investment. They tell me the negative cash flow each month is like Chinese water torture. I wonder if there are any homeowners in this situation?

A friend in early '07 bought a 2 bedroom in a development on Pender east of Cambie and fell for the buy now or be priced out forever, hook line and sinker. He thought by the time his building would be complete that somehow magically the neighbourhood would be gentrified in time, and the street wanderers would no longer be there.

He and his girlfriend have since had a child but found the street crowd hasn't magically changed there; so realizing it's not the best neighbourhood to raise a one year old, their only option was to move the family in with girlfriend's mom into her west end rental apartment. Meanwhile, take out a mortgage on their 2 bedroom unit when complete and roll the dice by putting it into the furnished rental pool, while enjoying the benefits of negative cashflow.

And yet to this day, he'll still boast about what great RE decisions he's made.