Real Estate

Where are millennials supposed to go? Buy a house or keep on renting?

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  • Jun 15th, 2016 4:33 pm
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Banned
Dec 5, 2015
2038 posts
429 upvotes
Concord, ON
fdl wrote: To each his own, but condo/apartment living is not for everyone is my point. I have a 3 kids and wouldn't ever want to raise them in a shoebox. That's just my preference.
But you're using your family formation as a measuring stick when you're family is not the norm or average

Sure if you're Jon and Kate plus 8..a condo won't do and you need a 14 passenger van..

In GTA..each household on average has less than 3 ppl and married couples on average have much less than 2 kids....
.so it's clear majority of people don't need a house
Deal Fanatic
Apr 5, 2016
6116 posts
4613 upvotes
Calgary/Vancouver
payam1981 wrote: You are clueless to say the least if you think realtors can manipulate buyers/sellers. People are not as dumb as you think.

It is a simple supply vs. demand.

The reason why the real estate market is so mysterious to so many people is also due to a fast growing income gap. For an average joe making 60-80k gross who comes on here shocked and biwildered at how buyers could pay so much over asking is because the average joe is trying to put himself in that position and of course it sounds insane to him. For a couple making 350-400k gross, 20% of 100k is pocket change. Heck even if they are already at maximum 5.5x ratio, coming up with 100k with that income won't be impossible at all. There is no shortage of people making this $ either between all the Chinese immigration and Canadian professionals.

This is hard to understand for many middle class, paycheck dependant folks.
Actually not true anymore. Realtors actually have a hand in manipulating the market as well. This was a big news recently in Vancouver. Real estate agents were shadow flipping client's homes.
Deal Addict
Aug 19, 2011
4226 posts
3152 upvotes
Markham
bomber17 wrote: Actually not true anymore. Realtors actually have a hand in manipulating the market as well. This was a big news recently in Vancouver. Real estate agents were shadow flipping client's homes.
There was nothing really 'shadowy' about that at all. Person A agreed to list their house at $X to person B. So in between then and closing Person B found person C who agreed to buy at $Y and bought the contract. This is basically little more than an assignment sale.

The seller could always put a non-assignment clause in the contrct too but what sifference would it make if they already agreed to sell at $X? And of course the seller could always walk away from the sale if they chose to. If difference between X and Y is large enough it may even be worth the liablity I guess.

The media sure like to make it sound all shady as if the sellers were helpless. A more approprite term would have been turnkey flipping. :)
Penalty Box
Dec 27, 2013
8003 posts
4050 upvotes
Toronto
payam1981 wrote: You are clueless to say the least if you think realtors can manipulate buyers/sellers. People are not as dumb as you think.

It is a simple supply vs. demand.

The reason why the real estate market is so mysterious to so many people is also due to a fast growing income gap. For an average joe making 60-80k gross who comes on here shocked and biwildered at how buyers could pay so much over asking is because the average joe is trying to put himself in that position and of course it sounds insane to him. For a couple making 350-400k gross, 20% of 100k is pocket change. Heck even if they are already at maximum 5.5x ratio, coming up with 100k with that income won't be impossible at all. There is no shortage of people making this $ either between all the Chinese immigration and Canadian professionals.

This is hard to understand for many middle class, paycheck dependant folks.
LOL, you so very much got a clue... Yeah, all the houses in Toronto are being sold to people that make $400,000... LOL.. K...

And that justifies paying $200,000 over asking, on a shack?

Just because you make $400,000 a year, doesn't mean you throw it away on a shitty house that needs a lot of work.. SOmeone that makes $400,000 isn't buying shitty homes. Someone making $400,000 is buying 1.1 to 2+mil plus homes, where they are TURN KEY MOVE IN READY. something you don't seem to understand about housing in Toronto. There are lots of NICE TURN KEY ready homes, that have been nicely renovated. WHY ON EARTH would someone buy a dilapitated home to fix it up?? Are you kidding me, rich people don't do that. Well to do people don't really do that..

The only people buying houses that need a lot of work are MIDDLE CLASS, and developers/reno workers. The middle class thinks its saving buy going all in and then doing reno work.

you sir, have no clue how this market works if you think a rich dude, "well to do dude", is buying a house so that he can renovate it, and also just wasting an extra $100K like it's nothing... LOL @ someone making $400,000 a year, $100,000 is nothing. what a joke.
That's not what well to do people do.
Banned
Dec 5, 2015
2038 posts
429 upvotes
Concord, ON
Its quite clear the reason why kids can't have a house like their parents is because their parents aren't selling the house

Its clear to not have the increased demand..when their kids want a house.. the parents have to sell it..otherwise there's need for extra houzes because as the kids move out and want their own house..someone else's parents will have to sell it to them..otherwise, we need to build another one. Well houses take up space

So clearly the problem is that parents aren't selling their homes when their kids reach 25
Penalty Box
Dec 27, 2013
8003 posts
4050 upvotes
Toronto
payam1981 wrote: There was nothing really 'shadowy' about that at all. Person A agreed to list their house at $X to person B. So in between then and closing Person B found person C who agreed to buy at $Y and bought the contract. This is basically little more than an assignment sale.

The seller could always put a non-assignment clause in the contrct too but what sifference would it make if they already agreed to sell at $X? And of course the seller could always walk away from the sale if they chose to. If difference between X and Y is large enough it may even be worth the liablity I guess.

The media sure like to make it sound all shady as if the sellers were helpless. A more approprite term would have been turnkey flipping. :)
you don't understand what collusion means.

I'm selling a house.
You want to buy the house.

2 realtors.
Your realtor is my friend. look dude, this is a super hot property, lots and lots of interest and lots of offers coming in way over asking. You're going to have to make the BEST BEST OFFER that you can afford to make. DO NOT HOLD BACK go all in if you want it.

OK sir realtor, it's listed at $700,000, but I think I want it bad enough I'll put $900,000 in.

Meanwhile, your the only offer that comes in at $900,000 while everyone else was offer $750,000. How can any realtor, be ok with their client offering $900,000 on a house truly worth $750,000?

That's not collusion? Thats not manipulation? When you don't know what other people are offering?

You are being gamed and you don't realize it.

If you think this has something to do with middle class and paycheques, you're deluded. You don't get to making $400,000 per year, by being an idiot.

I can almost guarnatee you that the houses in the sub $1million range (after closing) are being sold exclusively to people that make less than $200,000 a year.
Jr. Member
Nov 15, 2015
181 posts
114 upvotes
Etobicoke, ON
payam1981 wrote: There was nothing really 'shadowy' about that at all. Person A agreed to list their house at $X to person B. So in between then and closing Person B found person C who agreed to buy at $Y and bought the contract. This is basically little more than an assignment sale.

The seller could always put a non-assignment clause in the contrct too but what sifference would it make if they already agreed to sell at $X? And of course the seller could always walk away from the sale if they chose to. If difference between X and Y is large enough it may even be worth the liablity I guess.

The media sure like to make it sound all shady as if the sellers were helpless. A more approprite term would have been turnkey flipping. :)
People are absolutely getting scammed by realtors going door to door, soliciting people to sell their unlisted homes for below market value, and using the little known assignment clause to make huge profits in only months. U could say seller beware, and that nothing technically illegal is happening, but the reality is these agents have an inside advantage and foreign money at their disposal, making the whole thing very shady
Banned
Dec 5, 2015
2038 posts
429 upvotes
Concord, ON
crystallight wrote: I know you're not the first and won't be the last to do this as I'm always hearing about these insanely long line ups for pre-constructions. But this leads me to wonder...why wouldn't the developers just raise the prices since the demand is so strong?
They do..that's why people line up because they jack up the price arbitrarily after the first group of ppl..this is how they get ppl to lineup and create a frenzy

Think of holding the line at a club even if there's room inside
Deal Addict
Apr 10, 2011
3914 posts
4767 upvotes
Canada
Rent or buy condo

Buy
- high prices per S.f. currently, but no sign of slowing down due to ongoing inflows of large capital flows from China and lowering of Canadian $
- you'll probably have a sizable mortgage and if you either have an employment problem one day, or interest rates rise (doubtful due to large base in large debt) there could be future difficulties
- don't forget to add all the expenses... strata fees, property taxes, possible future assessments, insurance, etc.
- if you can get land, do it, you can always get out

Rent
- nice to be able to change quickly due to job changes, bad neighbors, etc.
Penalty Box
Apr 15, 2011
5156 posts
1887 upvotes
Scarborough
all this stress over a house, id rather just waste the money on a condo and rest in stocks. Buy a nice house in novascotia right on the water..summer house for maybe 200g
Sr. Member
User avatar
Jul 6, 2008
675 posts
193 upvotes
Toronto
As a millennial myself, I can honestly say if you don't make 100k rfd standard, you are screwed. Rent4lyfe.
Deal Expert
User avatar
Oct 19, 2003
20241 posts
8367 upvotes
Toronto (Bloor West …
Camping to buy a house in Ajax? :facepalm:
Deal Expert
User avatar
Oct 26, 2003
39339 posts
6342 upvotes
Winnipeg
Bobby66 wrote: As a millennial myself, I can honestly say if you don't make 100k rfd standard, you are screwed. Rent4lyfe.
won't be long till RE goes beyond 6 figures to sustain
Deal Expert
User avatar
Oct 26, 2003
39339 posts
6342 upvotes
Winnipeg
GrandePike wrote: Its quite clear the reason why kids can't have a house like their parents is because their parents aren't selling the house

Its clear to not have the increased demand..when their kids want a house.. the parents have to sell it..otherwise there's need for extra houzes because as the kids move out and want their own house..someone else's parents will have to sell it to them..otherwise, we need to build another one. Well houses take up space

So clearly the problem is that parents aren't selling their homes when their kids reach 25
then build more, we still have space
Member
May 11, 2011
376 posts
470 upvotes
Vancouver
Definitely buy a house. It forces you to save. Best, safest investment. House value went up 50% in last 3 years. It is still considered cheap relative to global cities like New York, London, Hong Kong.
Banned
Dec 5, 2015
2038 posts
429 upvotes
Concord, ON
divx wrote: then build more, we still have space
We do..but people want to live in Toronto or where they grew up...there's no space there because the parents aren't selling and they can't build houses on top of each other and the areas they grew up in is all built up

If they want to stay in the city..they can..but they don't want a condo because they're too entitled to live in one
Newbie
Mar 1, 2016
48 posts
10 upvotes
Toronto
payam1981 wrote: The point is $400 extra a month won't likely bankrupt most people. So even if the interest rate increase eventually materialises it won't be the big armaggedon some are making out to be.

The downpayment increase does screen out 'random jerks' as you now have to put out equity even if you have a high paying job and great credit. This is a very effective way of preventing a US style meltdown from happening here.
Apparently $400\month WILL bankrupt about half of us...: http://business.financialpost.com/news/ ... poll-finds
Penalty Box
Dec 27, 2013
8003 posts
4050 upvotes
Toronto
BinaryJay wrote: Asking price means absolutely nothing, and it's not because people are willing to overpay, it's because it literally means nothing. It's just a tool to get the gullible to look at the place, when anybody with a brain would look at the sales history for the neighborhood to determine what the true price should/will be. So when things go 200,000 over asking, I don't go "wow, they got so much more money than they should have" I just think "well they really under priced it".
absolutely true.

but then you also have to look at the value of the land and the value of the house. and if you look at it, the true value is usually very close to the listing price. I would say that in the scenario I wrote about, the true value of that house was $750,000.


obviously, someone thought it was worth more and bought it at $900,000. However I would say that person was a complete fool. Because when you have larger lots closing at less than $900,000, then theres something wrong with the equation.

But there are lots of variables in play.
Sr. Member
Aug 30, 2013
824 posts
999 upvotes
mingyang wrote: then they'll cut back on spending $ on restaurant or new cars. $400 extra interest wont crash the house market lol
'it will certainly start a fast rolling ball of listings increases which will lead to increased supply and therefore price decreases by those who cannot afford. and that will only worsen as interest rates continue to rise.

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