Real Estate

Why are so many people hoping for a market crash?

  • Last Updated:
  • Sep 20th, 2017 12:33 pm
[OP]
Deal Addict
Nov 22, 2009
1536 posts
134 upvotes
Toronto

Why are so many people hoping for a market crash?

They did not want to buy when it was cheap, how would a market crash right now benefit them? The crash will affect a lot of industries and the economy as a whole, so even if housing prices go down they might be too hesitent to buy anyways if the job market isnt stable.
155 replies
Newbie
Jan 15, 2010
93 posts
76 upvotes
Toronto
Because shit is expensive. I'm not looking to spend 450k-500k on a 1 bedroom condo in the city. I know the price I would buy in at (PSF), and as soon as I can get it I will buy with no hesitation. If I cannot, then I will continue to rent.
Deal Addict
Feb 22, 2011
1382 posts
1249 upvotes
Toronto
Either angry they can't afford it, jealous others have made millions or scared it will hurt the economy with soaring debt.
Sr. Member
Jan 14, 2009
801 posts
289 upvotes
Vancouver, BC
They think high house prices contributes to inequality and they are on the wrong end of it.
Last edited by zakarydoks on Sep 13th, 2017 8:25 pm, edited 1 time in total.
Deal Fanatic
User avatar
Oct 23, 2003
6505 posts
701 upvotes
blitzforce wrote:
Sep 13th, 2017 6:56 pm
They did not want to buy when it was cheap, how would a market crash right now benefit them? The crash will affect a lot of industries and the economy as a whole, so even if housing prices go down they might be too hesitent to buy anyways if the job market isnt stable.
Please tell me how kids between the ages of 0 to 16+ years old back then, could afford a "cheap" house with a McJob paying $6-8/hr which was minimum wage at the time. lol

How would a market crash benefit all people under the age of 35? Lots of ways.
Deal Addict
Feb 9, 2009
4197 posts
1929 upvotes
Buggy166 wrote:
Sep 13th, 2017 8:28 pm
Please tell me how kids between the ages of 0 to 16+ years old back then, could afford a "cheap" house with a McJob paying $6-8/hr which was minimum wage at the time. lol

How would a market crash benefit all people under the age of 35? Lots of ways.
Lots of people in 2008 were calling bubble too -- heck Ive heard bubble talk since about 2005... but 10-13 years later.. here we are...
Newbie
May 13, 2015
51 posts
24 upvotes
Brampton, ON
Buggy166 wrote:
Sep 13th, 2017 8:28 pm
Please tell me how kids between the ages of 0 to 16+ years old back then, could afford a "cheap" house with a McJob paying $6-8/hr which was minimum wage at the time. lol

How would a market crash benefit all people under the age of 35? Lots of ways.
This.
Jr. Member
Jun 19, 2017
103 posts
176 upvotes
Many don't believe - but homes have an intrinsic value. The prices people pay will fluctuate around this sustainable value. Let's say that the intrinsic value compounds at 4%.

If prices then go up by 20% and 30% in consecutive years, sounds like some people are implying that is good for the economy? On the surface you would think that any increase is good, but not when you think it will go back down to the 4% growth trendline eventually. Especially when everybody have convinced themselves that it's different this time, and start speculating and investing based on false assumptions. Then people get hurt when the inevitable happens.

When prices correct in bubbles they often over shoot - due to fear, psychology and in many cases forced selling. Wouldn't it have been better then if prices just grew at their intrinsic value? Slow and steady wins the race. It is actually the price spike that's bad for the economy, not the regression back down to sustainable levels - which is inevitable.

If prices spike and stay high for 2 years, that's bad enough, but if prices stay at those inflated levels for 5 or 7 years, not only do individuals convince themselves that the bubble prices are sustainable and normal, but lenders also buy the story and underwriting is based on the "equity" retained in housing after years of correctionless increases. Then ultimately when prices start correcting back down to their intrinsic levels, (and overshoot them) we have a bigger mess on our hands, all of a sudden our financial system becomes at risk. So when the BoC, regulators and the gov act to cool things down sooner rather than later, thank them.

Slow and steady that's what we want, we'll have a stronger economy for it in the long run.
Newbie
Jul 8, 2017
57 posts
34 upvotes
zakarydoks wrote:
Sep 13th, 2017 8:25 pm
They think high house prices contributes to inequality and they are on the wrong end of it.
Inequality is for sure the end result, are the ones getting the down payment from their parents complaining in here? It used to be if I work hard, I should get a better life, now it is if my parents work harder than your parents I should deserve a better life.
Jr. Member
Jun 19, 2017
103 posts
176 upvotes
Sanyo wrote:
Sep 13th, 2017 8:50 pm
Lots of people in 2008 were calling bubble too -- heck Ive heard bubble talk since about 2005... but 10-13 years later.. here we are...
Maybe it could have been a bubble if rates went up instead of down. I'm sure all the bulls accurately predicted the decline in the BoC rate to 0.5%? I think that's just luck. Either way the prices in April had much lower affordability than in 2008, the future won't mirror the past.
Last edited by Qrewpt on Sep 13th, 2017 9:44 pm, edited 1 time in total.
Deal Addict
Dec 5, 2009
4471 posts
2308 upvotes
False premise. I don't think many people are "hoping for a crash" . Predicting, perhaps.

myself personally, I was hoping for some sort of a correction over the past couple of years as I felt the market was/is very unhealthy. It needed to blow off some steam, to AVOID a major crash. Hopefully it's not too late.

I'm a home owner by the way.
Newbie
Mar 13, 2017
71 posts
98 upvotes
I was cautioned in '99 to stay far away from home ownership.
At the time I had a family friend who was a senior advisor for a large public pension fund who talked my ear off about it. Suggested I'd see more depreciation on a home purchase than a new car.
Sanyo wrote:
Sep 13th, 2017 8:50 pm
Lots of people in 2008 were calling bubble too -- heck Ive heard bubble talk since about 2005... but 10-13 years later.. here we are...
Sr. Member
Jul 14, 2002
934 posts
267 upvotes
1cat2dogs wrote:
Sep 13th, 2017 10:40 pm
I was cautioned in '99 to stay far away from home ownership.
At the time I had a family friend who was a senior advisor for a large public pension fund who talked my ear off about it. Suggested I'd see more depreciation on a home purchase than a new car.
that's when you buy. and when everyone says buy, sell.
Deal Addict
Feb 9, 2009
4197 posts
1929 upvotes
Qrewpt wrote:
Sep 13th, 2017 9:44 pm
Maybe it could have been a bubble if rates went up instead of down. I'm sure all the bulls accurately predicted the decline in the BoC rate to 0.5%? I think that's just luck. Either way the prices in April had much lower affordability than in 2008, the future won't mirror the past.
Rates went up twice in 2010... and has been sideways since... and yes in 2015 rates decreased 0.5%... back to 2008-2010 levels.

Anyways no one is saying we will have the 20-30% increases for a while but hoping for some miracle crash back to 2008 levels is daydreaming.
Deal Addict
Feb 9, 2009
4197 posts
1929 upvotes
dantey wrote:
Sep 13th, 2017 11:02 pm
that's when you buy. and when everyone says buy, sell.
Everyone is saying sell again and the number of bears in the last two months on this forum has been insane... so it's that time to buy.

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