S.W.A.T.
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Want's vs Needs.
Recession just around the corner?
- Thread starter neilsleder
- Start date
Want's vs Needs.
fidorama
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I dunno about you? but I need my phone, no "wants" about that! I don't need a land line
Work2Ride
Active VIP Member
There was the theory when the market crashed in 2008, that lenders were making money off people foreclosing because the amount of penalties they had to pay. If interest rates increase by 2-3%, a lot of people won't be able to qualify or afford to refinance their house because if people get pre-approved to 400,000, they more than likely purchase a home near that price. Not very often a person will be like oh well I only need a 300,000 house so that's what I'll buy.
The way to succeed in any market, don't do what everybody else is doing. Everyone is signing into a 5 year mortgage, house sales are continuing to rise. 10 years from now is 2018-2019, what happens every 10 years? A crash of some sort, but what do you do? Live in your camper? Rent a house for 1500-2000 a month for the next 60 months and lose 90,000-120,000 to your landlord?
If I were to buy right now, I would look into locking in for 10 years. Yea, you pay a bit more interest for more security. Plus you can buy that house, live in it for a few years, rent it out and go purchase another house or if the market happens to strive through 2018-2019 or you can port the mortgage to another property.
The way to succeed in any market, don't do what everybody else is doing. Everyone is signing into a 5 year mortgage, house sales are continuing to rise. 10 years from now is 2018-2019, what happens every 10 years? A crash of some sort, but what do you do? Live in your camper? Rent a house for 1500-2000 a month for the next 60 months and lose 90,000-120,000 to your landlord?
If I were to buy right now, I would look into locking in for 10 years. Yea, you pay a bit more interest for more security. Plus you can buy that house, live in it for a few years, rent it out and go purchase another house or if the market happens to strive through 2018-2019 or you can port the mortgage to another property.
S.W.A.T.
Active VIP Member
You need a $750 appliance that takes pics, organizes photo's, allows you to twit and crackbook, play music and whatever else they do? Or do you need to make a phone call?
Do people need leather seats and hot washer fluid or do they want it? Im not saying anything directed towards yourself, but have seen people finance everything from phones to pots and pans, even buying groceries on credit. To me that's scary
fidorama
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I totally understand your point, and I personally do my best to avoid credit. It is scary paying 18% extra on whatever! but how many of us can afford to go out and pay cash for a car, or house? or even just a phone?
Yeah when you sign a 5year contract or some BS,,, I won't be too surprised by a recession, as people are to busy staring at there Icrap to be productive...lol
Joholio
Active VIP Member
Hey lay off the heated seats eh...! Need > want
Like I said before, a recession is society fearing the worst and hunkering down.
To keep the economy going, you have to spend spend spend.
So keep buying your jacked up chebys, and $1300 iPhones and 500g houses... on credit.
To keep the economy going, you have to spend spend spend.
So keep buying your jacked up chebys, and $1300 iPhones and 500g houses... on credit.
I always wonder how many of the "high rollers" we all know with new this, that and the other thing would actually write a big fat cheque for the things they have bought on credit.
What I'm saying is, if they actually had that $50,000 in the bank would they write the cheque for that new pickup or 5th wheel... it's easy to sign on the dotted line, it takes a little more to save up and pay cash.
I made my first 38 years debt free. Wish i could have continued. On a single income trying to feed his family low interest morgaging is attractive cant deny it. Unfortunately its so attractive like so many mentioned we do obtain more than we should. We may see a recession in some avenues, and hope it dont affect families to much, but i dont see a major turn down in the oil and gas sector for companies not already in the funnel. But then again im going on year 7 for my sled rather than financing a new one i dont need, i always like to keep stabler than i did in my earlier years just in case.
C of Red
Active VIP Member
Also in the O&G industry. I personally do not believe the economy every truly recovered. This is the reason the Bank of Canada kept interest rates so low. They have been trying to stimulate the economy with people's easy access to cheap credit. As the price of Oil drops individuals in the industry will loose there jobs.
What concerns me most is all the individuals who mortgaged the crap out of themselves. There are so many folks out there with astronomical mortgages. When the interest rates rise from 3-5% their payments are going to skyrocket. IF all these homes hit the market from foreclosures etc ALL our values will hit the crapper (i.e. Phoenix). Those of us who were responsible will pay the price also since a home is generally a persons largest investment.
Hoping it isn't to bad, but stats Canada has been warning Canadians for years over their personal debt load. Thats why they dropped the 40 yr mortgage back to 25yr.
What concerns me most is all the individuals who mortgaged the crap out of themselves. There are so many folks out there with astronomical mortgages. When the interest rates rise from 3-5% their payments are going to skyrocket. IF all these homes hit the market from foreclosures etc ALL our values will hit the crapper (i.e. Phoenix). Those of us who were responsible will pay the price also since a home is generally a persons largest investment.
Hoping it isn't to bad, but stats Canada has been warning Canadians for years over their personal debt load. Thats why they dropped the 40 yr mortgage back to 25yr.
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C of Red
Active VIP Member
Correct, at the end of a recession interest rates generally rise to slow down the rate of inflation. This has yet to happen which to me is very concerning if we have another significant dip in the economy. Personal debt loads of the masses likely cannot take another significant hit.
Interesting, I think 08 was a tune up for most. I sure don't see the onslaught of sign here and don't start paying for a year this go round. Responsible credit management seems to have prevailed for most. As far as housing goes real estate is very much cyclic, short term there are swings however take any 10year span and you will be on the positive side (in the black) of things to varying degrees. You can never go wrong owning provided it's your primary residence. Another thing to consider, if you had to rent your house out would the revenues put you in in a positive cash flow situation? Only reason I say this is if your income drops by 25-30% and your mortgage is 25-30% lower than renting it will be a push. Only down side here is no "turbo Maverick" for you....better than being homeless, been there done that....
Ps: I'm probably preaching to the quire here our very demographic (toys) shows positive signs of financial responsibility....
Ps: I'm probably preaching to the quire here our very demographic (toys) shows positive signs of financial responsibility....
S.W.A.T.
Active VIP Member
Was 08 really that bad? Majority of Canadian's took a hit of some sort but probably wasn't that bad. For myself I had to take a pay cut and was knocked back in the ranks but still was able to put food on the table. During the down turn Canadians had lots going, shale gas discoveries, Olympics and other large construction projects. I wouldn't judge a prosperous economy based on the number of "toys" one has in the garage but rather by how little debt the citizens carry. One day the bank will come knocking and wan their money back, point incase what happened in the states.
fidorama
Active VIP Member
I agree. after all the work put in to earning that $50g, sort of puts a different prospective on what it takes to make that amount, an certainly would make one think a bit more about such large purchases.
A recession Is societies way of getting rid of the hacks that come along with a boom. To much work means quality goes down because people are all in a hurry to make the most, when actually rushing is only hurting them in the long run... im fortunate that I haven't slowed down, but the quality of my work reflects why I never have. Simple solution, work hard and care about what your doing. Seems no one has any pride in anything anymore.
Work2Ride
Active VIP Member
The banks are keeping the rates low because they're doing enough volume to suffice. The Canadian government can't regulate the rates but they have been tightening up the mortgage rules through the insurers(CMHC, Genworth, Etc..) and not approving as many people. Grande Prairie and Area has had a solid 5-6% appreciation in real estate for the last 4 years. I think that's a healthy figure, considering inflation is about 2% a year.
The problem with too good of an economy is cost of everything goes up but the level of service depreciates. The more people are getting paid and feeling comfortable financially, the lazier they become, truth to the saying "A hungry dog, works harder."
The problem with too good of an economy is cost of everything goes up but the level of service depreciates. The more people are getting paid and feeling comfortable financially, the lazier they become, truth to the saying "A hungry dog, works harder."
I've been hearing that these low oil prices we see today are a result of the American shale gas production reducing their purchases from the Saudis, and now the Saudis are flooding the market because their margins are untouchable.
They can sell oil cheap and curb any further production over here.
Sounds legit right? Unfortunately it's all dependent on government policy and actions.
'12 T4
Husaberg 570FE
They can sell oil cheap and curb any further production over here.
Sounds legit right? Unfortunately it's all dependent on government policy and actions.
'12 T4
Husaberg 570FE
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