The Disaster That is Canadian Real Estate ... and Lessons From It

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

I bought a home in Kelowna some years back and learned about all the differences in the mortgage market there.. And how there are differences in each province.. is what you describing how it works in the entire country or is it Province specific.. has Vancouver BC dropped 30% as well..

I have not looked at Kelowna prices in a long while but its hard for me to gauge it since I bought in 2000 and sold in 2002 and made a fat profit at that time.. a lot of it was the currency Delta at the time as well.. buying in US dollars Canadian real estate..

Thank you for this post its most interesting and if this is country wide then your looking I think at the same thing that brought down the US lending / RE market in 08 Neg am.. loans and folks that all of a sudden could not afford the adjustable rates. We called it sub prime.

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Dan Illes

OP

Investor · Waterloo, Ontario · Member since 2018 · 22 posts · 13 votes

2y

Quote from @Jay Hinrichs:

I bought a home in Kelowna some years back and learned about all the differences in the mortgage market there.. And how there are differences in each province.. is what you describing how it works in the entire country or is it Province specific.. has Vancouver BC dropped 30% as well..

I have not looked at Kelowna prices in a long while but its hard for me to gauge it since I bought in 2000 and sold in 2002 and made a fat profit at that time.. a lot of it was the currency Delta at the time as well.. buying in US dollars Canadian real estate..

Thank you for this post its most interesting and if this is country wide then your looking I think at the same thing that brought down the US lending / RE market in 08 Neg am.. loans and folks that all of a sudden could not afford the adjustable rates. We called it sub prime.

Thanks for the reply, Jay. The home value decreases are not as bad as I wrote country-wide, however BC and Ontario have taken a heavy hit as discussed and they represent over 50% of the population. The mortgage problems I discussed, would be felt country-wide.

0 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

Quote from @Dan Illes:

Quote from @Jay Hinrichs:

I bought a home in Kelowna some years back and learned about all the differences in the mortgage market there.. And how there are differences in each province.. is what you describing how it works in the entire country or is it Province specific.. has Vancouver BC dropped 30% as well..

I have not looked at Kelowna prices in a long while but its hard for me to gauge it since I bought in 2000 and sold in 2002 and made a fat profit at that time.. a lot of it was the currency Delta at the time as well.. buying in US dollars Canadian real estate..

Thank you for this post its most interesting and if this is country wide then your looking I think at the same thing that brought down the US lending / RE market in 08 Neg am.. loans and folks that all of a sudden could not afford the adjustable rates. We called it sub prime.

Thanks for the reply, Jay. The home value decreases are not as bad as I wrote country-wide, however BC and Ontario have taken a heavy hit as discussed and they represent over 50% of the population. The mortgage problems I discussed, would be felt country-wide.

I will have to start looking in BC again I want a summer cabin there . Love that Kelowna Kamloops area.

Podcast Guest on Show #222

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Dan Illes

OP

Investor · Waterloo, Ontario · Member since 2018 · 22 posts · 13 votes

2y

Quote from @Jay Hinrichs:

Quote from @Dan Illes:

Quote from @Jay Hinrichs:

I bought a home in Kelowna some years back and learned about all the differences in the mortgage market there.. And how there are differences in each province.. is what you describing how it works in the entire country or is it Province specific.. has Vancouver BC dropped 30% as well..

I have not looked at Kelowna prices in a long while but its hard for me to gauge it since I bought in 2000 and sold in 2002 and made a fat profit at that time.. a lot of it was the currency Delta at the time as well.. buying in US dollars Canadian real estate..

Thank you for this post its most interesting and if this is country wide then your looking I think at the same thing that brought down the US lending / RE market in 08 Neg am.. loans and folks that all of a sudden could not afford the adjustable rates. We called it sub prime.

Thanks for the reply, Jay. The home value decreases are not as bad as I wrote country-wide, however BC and Ontario have taken a heavy hit as discussed and they represent over 50% of the population. The mortgage problems I discussed, would be felt country-wide.

I will have to start looking in BC again I want a summer cabin there . Love that Kelowna Kamloops area.

That area is a beaut. Although prices have went insane in recent years (despite the recent come-down), the dollar is in the toilet again so you'd get a pretty hefty discount.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

Quote from @Dan Illes:

Quote from @Jay Hinrichs:

Quote from @Dan Illes:

Quote from @Jay Hinrichs:

I bought a home in Kelowna some years back and learned about all the differences in the mortgage market there.. And how there are differences in each province.. is what you describing how it works in the entire country or is it Province specific.. has Vancouver BC dropped 30% as well..

I have not looked at Kelowna prices in a long while but its hard for me to gauge it since I bought in 2000 and sold in 2002 and made a fat profit at that time.. a lot of it was the currency Delta at the time as well.. buying in US dollars Canadian real estate..

Thank you for this post its most interesting and if this is country wide then your looking I think at the same thing that brought down the US lending / RE market in 08 Neg am.. loans and folks that all of a sudden could not afford the adjustable rates. We called it sub prime.

Thanks for the reply, Jay. The home value decreases are not as bad as I wrote country-wide, however BC and Ontario have taken a heavy hit as discussed and they represent over 50% of the population. The mortgage problems I discussed, would be felt country-wide.

I will have to start looking in BC again I want a summer cabin there . Love that Kelowna Kamloops area.

That area is a beaut. Although prices have went insane in recent years (despite the recent come-down), the dollar is in the toilet again so you'd get a pretty hefty discount.

when I bought in 2000 I think the Loonie was at 64% of the US dollar.. I mean I went there on a golf trip and had no thought in mind of buying anything but of course being in RE i had to go look at some new builds saw the price saw the currency delta and bought one when I was there right on the Okanagan golf course right above the airport.

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Stevo Sun

Calgary, AB · Member since 2021 · 327 posts · 176 votes

2y

Ontario housing has far out stripped fundamentals. The income and price have uncoupled from each other over many years.

Similar story in BC, but Vancouver has a lot of foreign capital so income is less of a factor.

I live in AB and we saw a huge run up in price because Ontario and BC folks came with significant capital. Even then housing prices here is still less than half of what it is in Ontario and BC. We have not experienced any significant drops yet. Calgary specifically is at all time highs. At this rate we are also decoupling from fundamentals and eventually will be overpriced.

1 Reply

Dan Illes

OP

Investor · Waterloo, Ontario · Member since 2018 · 22 posts · 13 votes

2y

Quote from @Stevo Sun:

Ontario housing has far out stripped fundamentals. The income and price have uncoupled from each other over many years.

Similar story in BC, but Vancouver has a lot of foreign capital so income is less of a factor.

I live in AB and we saw a huge run up in price because Ontario and BC folks came with significant capital. Even then housing prices here is still less than half of what it is in Ontario and BC. We have not experienced any significant drops yet. Calgary specifically is at all time highs. At this rate we are also decoupling from fundamentals and eventually will be overpriced.

Yeah Alberta (especially Calgary) is on its way to becoming the same craziness that Ontario and BC are as well.

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Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

2y

You can get 10 year terms now...I only found out AFTER I had renewed my mortgage as my banker never bothered to tell me.

For sales, I think it is market dependent. I just sold a condo and it went fast at list price. It was on the lower price range for condos and a good location, so that helped. Our prices have been going up over the last year (AB). Prices in BC have been going up a lot over the last decade and the rate of increase has slowed only recently. Where I am in AB (which is quite different than Edmonton or Calgary at times), prices hadn't really increased a lot until last year and right now most starter type homes are selling quickly (within a few days of listing).

the higher interest rates have a big impact on what people can buy and when it comes time for renewals, it can be scary. We do have the stress test, which means most of the people with new mortgages would have been able to afford higher interest rates...assuming they didn't move to a lower paying job and rates are at or below the level they were stress tested at. For those not in Canada, the stress tests means you need to qualify for a mortgage at a much higher rate than the current rates in case rates do go up because as Dan mentioned, our mortgages come up for renewal multiple times. I can't remember the numbers, but I think when mortgage rates were 5%, they were making sure people could afford 8%.

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Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

2y

Quote from @Jay Hinrichs:

I will have to start looking in BC again I want a summer cabin there . Love that Kelowna Kamloops area.

When you start looking, check out locations. BC has a new tax (started a while back, but more areas are being added all the time). If the house is not a primary residence or longer term rental, you have a hefty tax call the speculation tax. They have a map of areas that are included here.

1 Reply

Scott Mac

Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes

2y

The solution could be don't dance with the devil.

A family a wants to buy a house with 30% down, family A's brother wants to buy his own house with 30% down, And family A's sister wants to buy a house with 30% down.

In reality they're all living beyond their means if they do that, and will probably all lose their homes and their down payments.

What does living within their means mean for them. It seems to me they pool their money and buy a house for cash- thereby not dancing with the devil.

The kids get triplet bunk beds and all three families move into one structure and split the Bills. From there they can save up and by another house and eventually another house- perhaps.

But in the meantime they're living within their means. Unless their means are stroking a check for 100% of the price to move in.

In which case they would need to live with their parents until they have that money available to buy the house.

Good Luck!

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Stevo Sun

Calgary, AB · Member since 2021 · 327 posts · 176 votes

2y

Quote from @Dan Illes:

Quote from @Stevo Sun:

Ontario housing has far out stripped fundamentals. The income and price have uncoupled from each other over many years.

Similar story in BC, but Vancouver has a lot of foreign capital so income is less of a factor.

I live in AB and we saw a huge run up in price because Ontario and BC folks came with significant capital. Even then housing prices here is still less than half of what it is in Ontario and BC. We have not experienced any significant drops yet. Calgary specifically is at all time highs. At this rate we are also decoupling from fundamentals and eventually will be overpriced.

Yeah Alberta (especially Calgary) is on its way to becoming the same craziness that Ontario and BC are as well.

I think prices will go up but I highly doubt it'll get as crazy as Ontario and BC just because we have so much land to build on. Relatively the density in Calgary is low, we sprawl out a lot which creates other issues.

What I never understood is how small towns in Ontario can have prices that are double of Calgary. That absolutely makes no sense to me. I assume some of those small towns have seen significant declines from peak.

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Anthony Therrien-Bernard

Realtor · Calgary, Alberta · Member since 2018 · 291 posts · 132 votes

2y

Quote from @Stevo Sun:

Quote from @Dan Illes:

Quote from @Stevo Sun:

Ontario housing has far out stripped fundamentals. The income and price have uncoupled from each other over many years.

Similar story in BC, but Vancouver has a lot of foreign capital so income is less of a factor.

I live in AB and we saw a huge run up in price because Ontario and BC folks came with significant capital. Even then housing prices here is still less than half of what it is in Ontario and BC. We have not experienced any significant drops yet. Calgary specifically is at all time highs. At this rate we are also decoupling from fundamentals and eventually will be overpriced.

Yeah Alberta (especially Calgary) is on its way to becoming the same craziness that Ontario and BC are as well.

I think prices will go up but I highly doubt it'll get as crazy as Ontario and BC just because we have so much land to build on. Relatively the density in Calgary is low, we sprawl out a lot which creates other issues.

What I never understood is how small towns in Ontario can have prices that are double of Calgary. That absolutely makes no sense to me. I assume some of those small towns have seen significant declines from peak.

At least it's still more affordable and a lot of other markets, but eroding quickly

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Cody NeustaedterPro Member

Real Estate Agent · Winnipeg MB, Canada · Member since 2021 · 108 posts · 34 votes

2y

Here in Winnipeg we are still up about 7% from last year. Lots of people moving from Toronto to Winnipeg and we still have low inventory so bidding wars are a given on any somewhat decent house under $500k.

Not saying this is what's happened in your market but I don't like "average sale price" as a metric because it doesn't tie the asset that is selling to it's specific market value. A drop in average sale price could simply mean that only smaller homes are selling/listing because the primary demographic of people selling/listing are those that need to move out of their smaller homes. This is what I am seeing in my market where a large percentage of home sales are estate sales with properties that are outdated significantly (lower purchase price) but comps for those homes haven't dropped compared to what they were selling at 2 years ago. In fact they have gone up. However, the inventory for more expensive homes for sale is down, as those people who might have typically moved in the past are no longer moving - for whatever reason.

204-227-5081

1 Reply

Jeremy H.

Pleasanton, CA · Member since 2015 · 66 posts · 9 votes

2y

Quote from @Dan Illes:

have lost money in the six or seven figures.

People that purchased new construction years ago are not able to close on their purchase as they are now worth much less and can’t afford the payments. This has been one of the biggest disasters. People are walking away from six-figure deposits they’ve made over time. Almost every few weeks there is a news story of new-construction homes burning down sometimes whole subdivisions. We don’t fully know the back story on this, but it wouldn’t be surprising if it was people trying to bide time as homes have to be rebuilt.

How exactly does it work there? Does it take years to build a new construction and when does the mortgage start for those?

Also in Canada when people sign their loan docs do they show a chart or disclaimer that if interest increased to xx% , what your monthly payment would be?

They make home purchase risky there, with the 5 year renewal that's for sure. But i guess people are used to things like that, ICBC comes to mind.

0 Reply

Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

2y

Quote from @Jeremy H.:

Quote from @Dan Illes:

have lost money in the six or seven figures.

People that purchased new construction years ago are not able to close on their purchase as they are now worth much less and can’t afford the payments. This has been one of the biggest disasters. People are walking away from six-figure deposits they’ve made over time. Almost every few weeks there is a news story of new-construction homes burning down sometimes whole subdivisions. We don’t fully know the back story on this, but it wouldn’t be surprising if it was people trying to bide time as homes have to be rebuilt.

How exactly does it work there? Does it take years to build a new construction and when does the mortgage start for those?

Also in Canada when people sign their loan docs do they show a chart or disclaimer that if interest increased to xx% , what your monthly payment would be?

They make home purchase risky there, with the 5 year renewal that's for sure. But i guess people are used to things like that, ICBC comes to mind.

You are right, it is partly a matter of what you are used to.

For new construction, it doesn't normally take years to build (large condo complexes perhaps) and you use a construction loan (I think that's what it is called, I know it isn't a normal mortgage) or put a down payment with the developer (if they are building a condo). Once occupancy permits are done, then you get a regular mortgage. Some people buy pre-construction before anything is even started and there have been some stories lately about both developers and buyers walking away. A friend many years ago (~10) had a house built and it took a while as there was a construction boom. As she'd signed the papers at a much lower purchase price, the builder was in no hurry to build it. I think that might have taken a year to build.

When you get a pre-approved for a regular purchase, you can get a locked in interest rate, but it is only good for so long (I can't remember, but google says 90-120 days.

I can't remember if they show a chart of payments at different interest rates, but there are online calculators where you can get an idea. They will show you a few different rates and associated payments as the rates vary with the length of the term (eg 1 yr vs 5 yr).

I'd still rather own a home than rent. Much more stability.

0 Reply

Carlos Ptriawan

Member since 2019 · 7k+ posts · 4k+ votes

2y

Quote from @Dan Illes:

I wanted to share something that has been going on up here as I believe there are lessons for everyone, and I don’t think this gets coverage at all in the US.

Up here in Canada we have had interest rates increase at the same crazy pace that the US experienced but are seeing some very negative consequences from it that are unique up here.

In Canada we do not have 30 year fixed mortgages. We have fixed mortgages that can be amortized for 30 years, but typically can only lock them in for 5 years maximum. Once that term is up you have to renew at the current rate. As this happens people’s mortgage payments have gone up somewhere around 60% in the worst scenarios. Our housing prices are insanely high to begin with.

We take adjustable rate mortgages at levels you would never see in the US. This happens because there are stiff penalties for breaking a fixed mortgage where you end up owing all the missed interest to the bank. I do not believe the US has these penalties at least not in the same way. Going adjustable gets you out of these penalties should you break an adjustable mortgage. Somewhere around a third of mortgages are adjustable. People on these mortgages had their payments go up automatically with every interest rate increase and saw cashflow completely wiped out. I personally had one go from $771/mo to $1250/mo. Luckily, I still cashflow a little bit. Some of the adjustable products, the payment stays the same, but the principal to interest allocation changes to the point where people are only paying interest and are now in a negative amortization where the amount they owe is actually going up. Not good!

Prices have fallen 25-30% since the peak. The majority of this happened in 2022. People flipping homes instantly got crushed and many people doing BRRRRs ended up under water both in equity and monthly payments as rates went up. Places would no longer appraise.

People cannot sell their homes easily either as there has been a flood of inventory, seller expectations are still yesterday’s prices and days on market are through the roof.

I personally know a number of people that have went bankrupt, lost properties and a ton of people that have lost money in the six or seven figures.

People that purchased new construction years ago are not able to close on their purchase as they are now worth much less and can’t afford the payments. This has been one of the biggest disasters. People are walking away from six-figure deposits they’ve made over time. Almost every few weeks there is a news story of new-construction homes burning down sometimes whole subdivisions. We don’t fully know the back story on this, but it wouldn’t be surprising if it was people trying to bide time as homes have to be rebuilt.

I decided to share this story as I’m sure anyone in the real estate world would find it interesting and there are some takeaways from this. On the flip side, this has presented some opportunities for the creative real estate investor as well.

Some news story links and a snapshot of what has happened to prices in my city.

https://www.cp24.com/news/video-shows-massive-fire-that-destroyed-under-construction-homes-in-burlington-1.6671785

https://www.thestar.com/real-estate/toronto-area-buyers-are-walking-away-from-deposits-on-new-homes-some-losing-as-much/article_db451c58-5c4b-5269-8510-17095d5496e1.html

Asset price is dedicate of supply and demand

Supply and demand is derivative of central bank rate vs short/long term financing

Nothing surprise it is all in the math.

0 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

Quote from @Jeremy H.:

Quote from @Dan Illes:

have lost money in the six or seven figures.

People that purchased new construction years ago are not able to close on their purchase as they are now worth much less and can’t afford the payments. This has been one of the biggest disasters. People are walking away from six-figure deposits they’ve made over time. Almost every few weeks there is a news story of new-construction homes burning down sometimes whole subdivisions. We don’t fully know the back story on this, but it wouldn’t be surprising if it was people trying to bide time as homes have to be rebuilt.

How exactly does it work there? Does it take years to build a new construction and when does the mortgage start for those?

Also in Canada when people sign their loan docs do they show a chart or disclaimer that if interest increased to xx% , what your monthly payment would be?

They make home purchase risky there, with the 5 year renewal that's for sure. But i guess people are used to things like that, ICBC comes to mind.

I did get a mortgage for the home i bought in Kelowna.. And being a non resident was a little more tricky. but at least at that time period what I learned is there are only about 4 or 5 banks in CA and there is not this whole sub market of loans like we have in the US.. So where you bank is where you get your mortgage and rates when I did it were very similar at each bank.. So what I was was you have a bank for life they do your normal banking your mortgage your car loan etc etc. not sure if its changed any.. And I did not borrow more than about 30% LTV so it was a pretty easy loan to get.. The big issue for me being a foreigner was when I sold REV CA keeps 25% of your proceeds until you file a final tax return.. and since I had a bunch of cash tied up in this that was un expected.

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James De Stefano

Real Estate Agent · Houston, TX · Member since 2017 · 290 posts · 233 votes

2y

Pretty wild, thanks for the knowledge about "limited" fixed rate mortgages. Seems like a mess that could be preventable.

But U.S. is going to have our own issues with the 2.5 % fixed rate loans that all went out, and is possible we don't see anything close to 4% rates for another 1/2 decade.

It'll be interesting. and probably something coming up to surprises 99.9% of people, like it always does

1 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

Quote from @James De Stefano:

Pretty wild, thanks for the knowledge about "limited" fixed rate mortgages. Seems like a mess that could be preventable.

But U.S. is going to have our own issues with the 2.5 % fixed rate loans that all went out, and is possible we don't see anything close to 4% rates for another 1/2 decade.

It'll be interesting. and probably something coming up to surprises 99.9% of people, like it always does

it could be decades or never before we get sub 5% I mean I started in RE in 75 and rates never really got below 5% until what 2012 ish or so 47 years of 5% or more. ??

Podcast Guest on Show #222

JLH Capital Partners51 Review

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1 Reply

James De Stefano

Real Estate Agent · Houston, TX · Member since 2017 · 290 posts · 233 votes

2y

Quote from @Jay Hinrichs:

Quote from @James De Stefano:

Pretty wild, thanks for the knowledge about "limited" fixed rate mortgages. Seems like a mess that could be preventable.

But U.S. is going to have our own issues with the 2.5 % fixed rate loans that all went out, and is possible we don't see anything close to 4% rates for another 1/2 decade.

It'll be interesting. and probably something coming up to surprises 99.9% of people, like it always does

it could be decades or never before we get sub 5% I mean I started in RE in 75 and rates never really got below 5% until what 2012 ish or so 47 years of 5% or more. ??

Yup. But man o man the prices were a fraction of this back in the 70's , 80's. 9 or 10% mortgage on a $60,000 loan was nothing too devastating, even with the lower income at the time.

7% mortgage on 500,000 loan is brutal! Not sustainable except for the top 10-15% of Americans. But corporations can handle it !!

0 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

Quote from @James De Stefano:

Quote from @Jay Hinrichs:

Quote from @James De Stefano:

Pretty wild, thanks for the knowledge about "limited" fixed rate mortgages. Seems like a mess that could be preventable.

But U.S. is going to have our own issues with the 2.5 % fixed rate loans that all went out, and is possible we don't see anything close to 4% rates for another 1/2 decade.

It'll be interesting. and probably something coming up to surprises 99.9% of people, like it always does

it could be decades or never before we get sub 5% I mean I started in RE in 75 and rates never really got below 5% until what 2012 ish or so 47 years of 5% or more. ??

Yup. But man o man the prices were a fraction of this back in the 70's , 80's. 9 or 10% mortgage on a $60,000 loan was nothing too devastating, even with the lower income at the time.

7% mortgage on 500,000 loan is brutal! Not sustainable except for the top 10-15% of Americans. But corporations can handle it !!

depends on where you were in the country I was in Palo Alto CA in late 80s and paid 500k for my house Not 60k.. :) and that was a 3 1 900 sq ft small ranch home .. which of course today is worth north of 3 million as lots in that area of Palo Alto are 2.5 mil and up.

Podcast Guest on Show #222

JLH Capital Partners51 Review

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Carlos Ptriawan

Member since 2019 · 7k+ posts · 4k+ votes

2y

Quote from @James De Stefano:

Quote from @Jay Hinrichs:

Quote from @James De Stefano:

Pretty wild, thanks for the knowledge about "limited" fixed rate mortgages. Seems like a mess that could be preventable.

But U.S. is going to have our own issues with the 2.5 % fixed rate loans that all went out, and is possible we don't see anything close to 4% rates for another 1/2 decade.

It'll be interesting. and probably something coming up to surprises 99.9% of people, like it always does

it could be decades or never before we get sub 5% I mean I started in RE in 75 and rates never really got below 5% until what 2012 ish or so 47 years of 5% or more. ??

Yup. But man o man the prices were a fraction of this back in the 70's , 80's. 9 or 10% mortgage on a $60,000 loan was nothing too devastating, even with the lower income at the time.

7% mortgage on 500,000 loan is brutal! Not sustainable except for the top 10-15% of Americans. But corporations can handle it !!

I think what the bank can offer later on would be 40 years loan with 30 year amortization, one can save 200-300 per month.

0 Reply

Eric James

Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes

2y

Quote from @Jay Hinrichs:

Quote from @James De Stefano:

Quote from @Jay Hinrichs:

Quote from @James De Stefano:

Pretty wild, thanks for the knowledge about "limited" fixed rate mortgages. Seems like a mess that could be preventable.

But U.S. is going to have our own issues with the 2.5 % fixed rate loans that all went out, and is possible we don't see anything close to 4% rates for another 1/2 decade.

It'll be interesting. and probably something coming up to surprises 99.9% of people, like it always does

it could be decades or never before we get sub 5% I mean I started in RE in 75 and rates never really got below 5% until what 2012 ish or so 47 years of 5% or more. ??

Yup. But man o man the prices were a fraction of this back in the 70's , 80's. 9 or 10% mortgage on a $60,000 loan was nothing too devastating, even with the lower income at the time.

7% mortgage on 500,000 loan is brutal! Not sustainable except for the top 10-15% of Americans. But corporations can handle it !!

depends on where you were in the country I was in Palo Alto CA in late 80s and paid 500k for my house Not 60k.. :) and that was a 3 1 900 sq ft small ranch home .. which of course today is worth north of 3 million as lots in that area of Palo Alto are 2.5 mil and up.

$500k to $3.8M in those 35 years is 6% annual appreciation. I thought CA was a huge appreciation market.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

Quote from @Eric James: