Homebuying Questions

[Oexmelin]

Same here. 

How's the Montreal market looking?

You going fixed 5 years? You have enough for a 20% down payment, avoiding the insurance & test?

Not the Montreal market...  and no, I do not have the 20% down payment. I wasn't planning on this and my savings are not especially liquid.

[Grey Fox]

Eh, I understand that!

[Valmy]

Not the Montreal market...  and no, I do not have the 20% down payment. I wasn't planning on this and my savings are not especially liquid.

Commuting from Tadoussac then?

[DontSayBanana]

I found a house that I love, that's in my price range. My friend is going to go tour it on Sunday, with me on video. She's always loved the house and this is a great excuse for her to go look at the inside of it while showing it to me. I won't be ready to put in a bid until December, but the house has been on the market a bit already, so there's half a chance it will still be available.

Luckily, I'm not the type to "fall in love" with a house. There are a bunch that I've liked; this is just one more.

https://www.zillow.com/homes/3518-N-Knoxville-Ave-Peoria,-IL,-61603_rb/5130467_zpid/

Holy crap- I knew Jersey was expensive, but my $150k house probably isn't much bigger than that carport.

Seconding Nappy, rates are REALLY good right now, especially if you can get fixed. My mortgage company is telling me I can shave $100/mo without even going through a real refi just because our rate when we bought in 2018 was 5.125%.

[Malthus]

It's been a wild ride to see, as it were, from the sidelines (as I'm nether buying nor selling). Many articles recently have been predicting, or are predicting in the near future, that we are in a real estate bubble and due for a downturn ... just more urgently than the similar predictions made over the last decade or two up here in Canada.

On one read, there's a good case. The pandemic has cut down immigration, has made jobs insecure, low interest rates can't last forever, Toronto and Vancouver markets are hugely overpriced, etc. Yet the bubble never seems to actually pop ... perhaps because so many people so clearly want to to. It's gotten to the point where every time I read another article declaring that a downturn is inevitable I'm reminded of the doctor who told every one of her patients they were going to die ... I mean, it is always true, but the question surely is when.

In a way, this is a very bad thing. No-one wants a violent fluctuation, but this continual increase is accelerating the trend towards lack of social mobility - money is concentrating in the hands of those who already own property and can afford to give their kids a leg up.

[DontSayBanana]

It's been a wild ride to see, as it were, from the sidelines (as I'm nether buying nor selling). Many articles recently have been predicting, or are predicting in the near future, that we are in a real estate bubble and due for a downturn ... just more urgently than the similar predictions made over the last decade or two up here in Canada.

On one read, there's a good case. The pandemic has cut down immigration, has made jobs insecure, low interest rates can't last forever, Toronto and Vancouver markets are hugely overpriced, etc. Yet the bubble never seems to actually pop ... perhaps because so many people so clearly want to to. It's gotten to the point where every time I read another article declaring that a downturn is inevitable I'm reminded of the doctor who told every one of her patients they were going to die ... I mean, it is always true, but the question surely is when.

In a way, this is a very bad thing. No-one wants a violent fluctuation, but this continual increase is accelerating the trend towards lack of social mobility - money is concentrating in the hands of those who already own property and can afford to give their kids a leg up.

Agreed. I'm naturally anxious, but our house is looking more and more like it's going to need to be a "5 and flip" situation, and I'm not looking forward to the possibility of trying to sell a small house in a bust market- without some major upward career movement, we're not in a position to take on mortgaging/renting two homes at the same time.

[Sheilbh]

It's been a wild ride to see, as it were, from the sidelines (as I'm nether buying nor selling). Many articles recently have been predicting, or are predicting in the near future, that we are in a real estate bubble and due for a downturn ... just more urgently than the similar predictions made over the last decade or two up here in Canada.

On one read, there's a good case. The pandemic has cut down immigration, has made jobs insecure, low interest rates can't last forever, Toronto and Vancouver markets are hugely overpriced, etc. Yet the bubble never seems to actually pop ... perhaps because so many people so clearly want to to. It's gotten to the point where every time I read another article declaring that a downturn is inevitable I'm reminded of the doctor who told every one of her patients they were going to die ... I mean, it is always true, but the question surely is when.

In a way, this is a very bad thing. No-one wants a violent fluctuation, but this continual increase is accelerating the trend towards lack of social mobility - money is concentrating in the hands of those who already own property and can afford to give their kids a leg up.

Yeah agreed. This is a huge issue in the UK especially for the Tory party who realise their biggest issue with getting younger voters is the inability of people to buy houses, but also know their biggest current constituency is people who bought a house in 1978 for £26 and it's now worth £500,000.

There seems to be a bit of an interesting thing emerging during the pandemic of young journos/think tankers etc on the right and the left starting to talk to each other about the rentier issue.

I don't think the bubble will burst in the UK because I don't think it's a bubble. But I think demand will change - we're already seeing apparently a large rise in people looking at places in outer central London (zone 3) with outdoor space.

[Napoleon XIV]

It's been a wild ride to see, as it were, from the sidelines (as I'm nether buying nor selling). Many articles recently have been predicting, or are predicting in the near future, that we are in a real estate bubble and due for a downturn ... just more urgently than the similar predictions made over the last decade or two up here in Canada.

On one read, there's a good case. The pandemic has cut down immigration, has made jobs insecure, low interest rates can't last forever, Toronto and Vancouver markets are hugely overpriced, etc. Yet the bubble never seems to actually pop ... perhaps because so many people so clearly want to to. It's gotten to the point where every time I read another article declaring that a downturn is inevitable I'm reminded of the doctor who told every one of her patients they were going to die ... I mean, it is always true, but the question surely is when.

In a way, this is a very bad thing. No-one wants a violent fluctuation, but this continual increase is accelerating the trend towards lack of social mobility - money is concentrating in the hands of those who already own property and can afford to give their kids a leg up.

I don't know if we're in a bubble as such.  There's a bit of a sugar high right now arising out of a flight of from various cities, but even if that dries up, I don't think we're going to see a major decrease in value; rather I figure we'll see a reversion to the mean which I figure is a, on average, 2% to 4% compounding annual increase absent other factors intrinsic to the property (e.g. improvements, infrastructure, demographic shifts, etc).  The one thing I see that could conceivably knock things down below trend for a bit would be when the various moratoriums on foreclosures and evictions end, which could lead to a pumping up of supply.

The things I see keeping prices high going forward are: 

1) Low interest rates that are likely to remain historically low as far as we can reasonably predict into the future.  Since around 1980 interest rates have done essentially nothing but go down.  Unless we believe that inflation, and not deflation, is likely to tick up in the future, I don't particularly see how rates do go up markedly.  I mean, the money supply has been blowing up as the printing press goes Brrrr and we're not seeing all that much inflation.

2)  Restriction of new supply.  Like Shielbh mentioned, there is a substantial bloc of people who bought for "cheap" ages ago and are now sitting on a golden egg.  Those people are motivated voters who can and very often do oppose new development, in particular apartments and higher density residential, as those sorts of developments are perceived as bringing down values.

I also don't think it helps that the Covid-19 recovery, such as it is, is looking very much like a K shaped recovery, and that would tend to bring about the lack of social mobility that you mentioned.

[merithyn]

I found a house that I love, that's in my price range. My friend is going to go tour it on Sunday, with me on video. She's always loved the house and this is a great excuse for her to go look at the inside of it while showing it to me. I won't be ready to put in a bid until December, but the house has been on the market a bit already, so there's half a chance it will still be available.

Luckily, I'm not the type to "fall in love" with a house. There are a bunch that I've liked; this is just one more.

I offered $190,000 plus they cover closing costs. I guess we'll see.

[Valmy]

Man I am so excited for you. That is a gorgeous property.

[katmai]

Man I am so excited for you. That is a gorgeous property.

it is?

[Richard Hakluyt]

The cool thing is, that whenever we are wondering how something will play in Peoria, in future we can simply ask meri 

Good luck with the offer.

[Valmy]

Man I am so excited for you. That is a gorgeous property.

it is?

I live in the heart of McMansionland. My standards might be low. But for what it is worth, yes.

[merithyn]

Man I am so excited for you. That is a gorgeous property.

it is?

It may not be to your taste,  but it's still a nice house.

[merithyn]

Man I am so excited for you. That is a gorgeous property.

Thanks,  Valmy. Plenty of room for you and the family. 

The cool thing is, that whenever we are wondering how something will play in Peoria, in future we can simply ask meri 

Good luck with the offer.

Thanks, RH.

I might be closer to the center of the US than anyone else now. Languish meet in Peoria?