tag:blogger.com,1999:blog-31427364.post1662635146477316923..comments2024-03-26T03:52:23.395-07:00Comments on Housing Analysis: Survey of Buyers and Sellersmohicanhttp://www.blogger.com/profile/06094213357140749289noreply@blogger.comBlogger31125tag:blogger.com,1999:blog-31427364.post-72499238490104583942007-12-21T21:21:00.000-08:002007-12-21T21:21:00.000-08:00It wouldn't take nitpicking, I can bet that 90% of...It wouldn't take nitpicking, I can bet that 90% of the soon to be failed mortgages are fraudulent.<BR/><BR/>How many people do you know that have a mortgage which is twice the size of the theoretical 'maximum' allowed by the bank?Mark Fengerhttps://www.blogger.com/profile/01922616270777907779noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-74121476534793239612007-12-20T23:42:00.000-08:002007-12-20T23:42:00.000-08:00"Given A and B I can conclude, they are either inc...<I>"Given A and B I can conclude, they are either incompetent at risk management and about to lose a LOT of money..."</I><BR/><BR/>You may be right. You are probably right. While they may be incompetent at risk management they may be competent at nitpicking on contractual details to avoid payouts.jessehttps://www.blogger.com/profile/02155122147972263497noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-67570573070595094992007-12-20T19:23:00.000-08:002007-12-20T19:23:00.000-08:00There is an alternate conclusion. What is CMHC's r...There is an alternate conclusion. What is CMHC's real mandate? To make housing affordable, or to make housing as expensive as possible, thus maximizing profits for the RE industry, and the consumers and taxpayers be damned.<BR/><BR/>If it's the latter, they're not incompetent at all, just as people like Cam Muir aren't incompetent (who used to work for CMHC BTW). Just corrupt.patriotzhttps://www.blogger.com/profile/11154064267408955762noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-21602445467933679742007-12-20T16:03:00.000-08:002007-12-20T16:03:00.000-08:00A) They're giving insurance on 0 down for any resi...A) They're giving insurance on 0 down for any residential property, first, third or fiftieth. <BR/><BR/>b) If they don't know that property is nearly 3x overvalued they should.<BR/><BR/>Given A and B I can conclude, they are either incompetent at risk management and about to lose a LOT of money or they are ignorant of B, which means that they're incompetent at data gathering and economic prediction.<BR/><BR/>How is the conclusion of incompetence avoidable?<BR/><BR/><BR/>- Note I don't ASSUME they're incompetent. I demonstrate how they are incompetent through logic.Mark Fengerhttps://www.blogger.com/profile/01922616270777907779noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-61618529862253490432007-12-20T11:33:00.000-08:002007-12-20T11:33:00.000-08:00"CMHC is a branch of the government, their primary...<I>"CMHC is a branch of the government, their primary goal is NOT to make money because any shortfalls are made up by taxpayers."</I><BR/><BR/>As much as I take your point, CMHC, like other pseudo government bodies, is accountable. The government in the past 15 years has moved closer to a corporate model for these entities. Their bosses will be fired if they take a loss and this is a powerful motivator. Not always, but don't assume CMHC is incompetent.jessehttps://www.blogger.com/profile/02155122147972263497noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-15232715030689201872007-12-20T10:05:00.000-08:002007-12-20T10:05:00.000-08:00jesse:CMHC is a branch of the government, their pr...jesse:<BR/><BR/>CMHC is a branch of the government, their primary goal is NOT to make money because any shortfalls are made up by taxpayers.Mark Fengerhttps://www.blogger.com/profile/01922616270777907779noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-91709655935535992062007-12-19T15:00:00.000-08:002007-12-19T15:00:00.000-08:00"On that topic, what will end FTBs fuelling this t...<I>"On that topic, what will end FTBs fuelling this thing? Home ownership rate increases are finite. Access to financing? ... but with the tax payer backed CMHC at the help, unlikely. "</I><BR/><BR/>It may come down to a greater % of potential FTBs being out of work. <BR/><BR/>Food for thought, but CMHC/Genworth try to make money and they don't do this by insuring toxic waste when it comes right down to it, even with government underwriting. Also some lenders may find, like the rest of us, that collecting from insurers can be harder than it looks. This could force lenders to be more cautious after they try to claim and run into roadblocks. Avoiding due dilligence because something is "insured" is a lazy way of doing business and, in aggregate, such practices are punished.jessehttps://www.blogger.com/profile/02155122147972263497noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-23817521286988522472007-12-18T18:33:00.000-08:002007-12-18T18:33:00.000-08:00A change in FTBs buying existing stock will have a...<B> A change in FTBs buying existing stock will have a 2-3X lever in inventory</B><BR/><BR/>Yes, I think FTBs (and access to financing) holds the key to the whole game.<BR/><BR/>On that topic, what will end FTBs fuelling this thing? Running out of fundamental demand? Home ownership rate increases are finite. Access to financing? Maybe the 0 down, but with the tax payer backed CMHC at the help, unlikely. Affordability? Perhaps. Even apartments are getting pricey. The median benchmark apartment in Greater Vancouver cost more than the median SFH in Seattle. And they are hurting. Or maybe so many completions will come on the market that prices flattens and psychology turns.<BR/><BR/>hadenough, sorry about your loss.freakohttps://www.blogger.com/profile/06236681769619303395noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-2028599898883872802007-12-18T17:22:00.000-08:002007-12-18T17:22:00.000-08:00Patriotz,That was it. My husband dealt with all t...Patriotz,<BR/><BR/>That was it. My husband dealt with all the financial stuff - it was a blur to me.Nancyhttps://www.blogger.com/profile/13756361299909314983noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-11785388043077438902007-12-18T14:05:00.000-08:002007-12-18T14:05:00.000-08:00"The move up housing market is around 65 percent."...<I>"The move up housing market is around 65 percent."</I><BR/><BR/>Put another way, the ladder is about three rungs long. For every person entering the market there are a bit less than two that depend on a FTB sale happening (taking into account a few % of FTBs buying new homes and therefore not impacting other sales). A change in FTBs buying existing stock will have a 2-3X lever in inventory.jessehttps://www.blogger.com/profile/02155122147972263497noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-43763483583331693472007-12-18T12:59:00.000-08:002007-12-18T12:59:00.000-08:00Are you sure? My parents died five years ago (sudd...<I>Are you sure? My parents died five years ago (suddenly) and there were plenty of estate taxes.</I><BR/><BR/>Yes I'm sure. Your parents' estates likely paid income taxes on realization of capital gains and/or deregistration of RRSP's. These are not estate taxes because these events are taxable whether they are the result of someone dying or not, and whether there is any net value in the estate to be bequeathed or not.patriotzhttps://www.blogger.com/profile/11154064267408955762noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-23268613180684063572007-12-18T11:54:00.000-08:002007-12-18T11:54:00.000-08:00VomitingDog:Perhaps if you wait more than 2 minute...VomitingDog:<BR/><BR/>Perhaps if you wait more than 2 minutes for a reply someone will come along.<BR/><BR/>I know little of the sector you're talking about but it sounds risky to me.Mark Fengerhttps://www.blogger.com/profile/01922616270777907779noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-78734905806256543352007-12-18T10:49:00.000-08:002007-12-18T10:49:00.000-08:00Patriotz,Canada has no estate taxes?Are you sure? ...Patriotz,<BR/><BR/>Canada has no estate taxes?<BR/><BR/>Are you sure? My parents died five years ago (suddenly) and there were plenty of estate taxes. Most people are shocked the amount you have to pay to the government. I can't remember the rate but it was pretty big.<BR/><BR/>However there were no taxes on their house. My lawyer explained that it is the only thing that is basically untaxable in this country.Nancyhttps://www.blogger.com/profile/13756361299909314983noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-82331500992387610222007-12-18T10:31:00.000-08:002007-12-18T10:31:00.000-08:00Can anyone comment on Mortgage Investment Corporat...Can anyone comment on Mortgage Investment Corporations and whether they are a good investment in the times that are a coming?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-31427364.post-28049191111900426182007-12-18T10:29:00.000-08:002007-12-18T10:29:00.000-08:00Any comments on mortgage investment accounts and w...Any comments on mortgage investment accounts and whether they will weather the upcoming storm?<BR/><BR/>I am thinking specifically of a Canadian firm in the Okanagan that has done quite well lending second mortgages to small developers who develop residential buildings in specific markets. They charge a premium over the bank rate and are paid back first for this very reason. Their return for the last 10 years has been at least 8%.<BR/><BR/>Any thoughts?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-31427364.post-34275623699884993522007-12-18T10:27:00.000-08:002007-12-18T10:27:00.000-08:00Can anyone comment on Mortgage Investment Corporat...Can anyone comment on Mortgage Investment Corporations and whether they are a good investment in the times that are a coming?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-31427364.post-67953541671900381012007-12-18T10:14:00.000-08:002007-12-18T10:14:00.000-08:00Okay, my read on this survey.20% of sales are for ...Okay, my read on this survey.<BR/>20% of sales are for an investment property. This would give a base for the level of speculation in the market.<BR/><BR/>The move up housing market is around 65 percent. In this group will be people who are intending to resell in the next one, two or three years. A portion of these, I would consider to be speculators as well. So, the level of speculation would be 20% at the least and 85% at the extreme.<BR/><BR/>I'm guessing that the level of speculation of people buying a home to sell in the next two years is 40 percent.Johnny-Dollarhttps://www.blogger.com/profile/12950799399842707067noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-14435546079268273922007-12-18T01:49:00.000-08:002007-12-18T01:49:00.000-08:00HBB is full of stories about seniors betting every...HBB is full of stories about seniors betting everything on RE and ending up penniless. My favourite was a couple who bought a house in Orange Country for < 100K in the 70's, and now owe 700K on it.<BR/><BR/>Equally disturbing, there is a big surge in IRA (~RRSP) early withdrawls, many of which are likely vain attempts to hold on to a house which will be lost anyway. What is really crazy about this is that IRA's are protected against creditors in bankruptcy. People are voluntarily handing over their retirement funding to their creditors.<BR/><BR/><I>I'm surprised at the 2.7 person average household size.</I><BR/><BR/>Can you say "monster house"?<BR/><BR/><I>Also there may be tax advantages to gifting but IANATL.</I><BR/><BR/>Canada has no estate taxes so they would just avoid probate fees which are pretty small in % terms.patriotzhttps://www.blogger.com/profile/11154064267408955762noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-58255704302211113472007-12-17T20:03:00.000-08:002007-12-17T20:03:00.000-08:00"I also met a guy here who said his pension is in ..."I also met a guy here who said his pension is in his house. He is going to retire in a few years and yes he has a big mortgage (and a big house) but it will be worth millions in a couple of years that there should be no problems even though he and his wife have saved nothing." <BR/><BR/>Hmmm. Sounds a lot like the stuff I heard people say during the dot com boom.....A lot of "freedom 45" plans turned into "freedom 95".....Clarkehttps://www.blogger.com/profile/01598503256501613406noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-59025971417170963552007-12-17T18:45:00.000-08:002007-12-17T18:45:00.000-08:00"How many boomers can really part with hundreds of..."How many boomers can really part with hundreds of thousands of dollars?"<BR/><BR/>We all know boomers live through their children and can't say no.<BR/><BR/>But, if people have more than one child what they give to one they must give to another.<BR/><BR/>I said this before but my husband was talking to our banker in Toronto the other day and she said she was amazed how many baby boomers took out massive loans and second mortgages so close to retirement - at a time they should be downsizing. They just can't stop buying. She has been in the business for 25 years and had never seen this before. The Banks just kept on lending.<BR/><BR/>A friend's parents just took about a 2nd mortgage (they bought themselves a trophy house a few years ago) to help her and her husband buy a house. They are both 60 and my friend in her late 30s. They (the parents) are hoping that their house will be worth so much that in the next few years they can downsize and pay-off both mortgages. The mother had to quit her job because she has cancer. This is going to end up ugly.<BR/><BR/>I also met a guy here who said his pension is in his house. He is going to retire in a few years and yes he has a big mortgage (and a big house) but it will be worth millions in a couple of years that there should be no problems even though he and his wife have saved nothing. When I said "what will you do if property goes down?" he said "it will never go down in Victoria".Nancyhttps://www.blogger.com/profile/13756361299909314983noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-37976401399256256422007-12-17T16:24:00.000-08:002007-12-17T16:24:00.000-08:00"How many boomers can really part with hundreds of...<I>"How many boomers can really part with hundreds of thousands of dollars?"</I><BR/><BR/>I think % wise not a lot but not all gifts are as high as 200K. A HELOC gifted to a child is the gift that keeps on taking. Straight cash would seem preferable in this case. <BR/><BR/>There is a big variance between peoples' financial health so the ones that have over-provisioned and nearing retirement may want put the inheritance to tangible benefit in their lifetimes. But they too have effectively bought into the "RE goes up" mantra or perhaps are wise enough to realise it doesn't matter (or not so wisely infer their experience with real estate must translate to the next generation).<BR/><BR/>Also there may be tax advantages to gifting but IANATL.jessehttps://www.blogger.com/profile/02155122147972263497noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-31875497698387645222007-12-17T15:13:00.000-08:002007-12-17T15:13:00.000-08:00Another Canadian subprime lender bites the dust.Another Canadian subprime lender <A HREF="http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2007/12/moneyconnect-ha.html" REL="nofollow">bites the dust</A>.oh pleasehttps://www.blogger.com/profile/07952659888033116608noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-37464581032911876622007-12-17T14:08:00.000-08:002007-12-17T14:08:00.000-08:00"straight cash injection"How many boomers can real..."straight cash injection"<BR/><BR/>How many boomers can really part with hundreds of thousands of dollars? They need to fund their retirement, don't they?Patiently Waitinghttps://www.blogger.com/profile/10077409076754524375noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-53176426787090279592007-12-17T14:02:00.000-08:002007-12-17T14:02:00.000-08:00"2% only sold a property"This seems to show that a..."2% only sold a property"<BR/><BR/>This seems to show that almost none of the speculators have the sense to stop now and cash out. We will hear stories like those on HBB where the gamblers keep buying more and more real estate, and end up in bankruptcy and foreclosures.Patiently Waitinghttps://www.blogger.com/profile/10077409076754524375noreply@blogger.comtag:blogger.com,1999:blog-31427364.post-88163278388303786632007-12-17T13:58:00.000-08:002007-12-17T13:58:00.000-08:00"Mom and Dad peel $200K off their paid-for house, ...<I>"Mom and Dad peel $200K off their paid-for house, junior gets a $200K mortgage, and now junior buys a $400K condo."</I><BR/><BR/>This does happen (I know people who have done this). I think a lot of the time parents do a straight cash injection and do not necessarily take on debt.<BR/><BR/>Remember this: parents are only as happy as their least happy child. And happiness is not being priced out of home ownership.jessehttps://www.blogger.com/profile/02155122147972263497noreply@blogger.com