Recession just around the corner?

[eagle eye]

How many houses do you presently own ? You know, that you've swooped in and bought for pennies on the dollar.
Additionally, Are you aware of any situations in the last 100 yrs or so that the stock market prices or values did the unthinkable and dropped thru the floor leaving even some of the most seasoned and knowledgable investors holding a lot of worthless paper ?

Im not telling people to throw their life savings into stocks vs housing vs whatever its a risk reward play stocks can get me rich flipping houses can't. Yes I own a house I made 55k selling one within a yr and my current one should make me about 70-80 but I didn't buy them to make money I needed a place to live so I found a good enough deal that I could give someone else a good deal when i sold. With that being said I have a house in a small town near a new potash mine. A yr ago guys were Renting 1 part of a duplex for 2200 a month and you couldn't buy a house in town, now there is 30 houses for sale and nothing is moving. Nothing has changed but there's nothing happening? Even looking at the cities I've watched housing prices for ages and they have dropped a lot. My friends in ft Mac say the same thing (I haven't cared enough to look into that) but it's definetly being seen even though the Bigger cities never normally fall as hard. With this all being said when i put my money in stocks I realize it can be all gone when I wake up, housing always has some equity but there's also things to look at like capital gains etc when you sell down the road and as far as rebting one bad renter can cost you a yrs profit in no time. In any event this market can't go forever and if you understand the market you would know that.

 

[LennyR]

Im not telling people to throw their life savings into stocks vs housing vs whatever its a risk reward play stocks can get me rich flipping houses can't. Yes I own a house I made 55k selling one within a yr and my current one should make me about 70-80 but I didn't buy them to make money I needed a place to live so I found a good enough deal that I could give someone else a good deal when i sold. With that being said I have a house in a small town near a new potash mine. A yr ago guys were Renting 1 part of a duplex for 2200 a month and you couldn't buy a house in town, now there is 30 houses for sale and nothing is moving. Nothing has changed but there's nothing happening? Even looking at the cities I've watched housing prices for ages and they have dropped a lot. My friends in ft Mac say the same thing (I haven't cared enough to look into that) but it's definetly being seen even though the Bigger cities never normally fall as hard. With this all being said when i put my money in stocks I realize it can be all gone when I wake up, housing always has some equity but there's also things to look at like capital gains etc when you sell down the road and as far as rebting one bad renter can cost you a yrs profit in no time. In any event this market can't go forever and if you understand the market you would know that.

It certainly is evident that one of us doesn't understand the Real estate market .

 

[rzrgade]

Good luck eagle in the stock market,I will stick to REAL estate......

 

[gates559]

How can it go much higher? It's outpacing the income of most Albertans. If you drop the lower mainland out of BC average house price it's a different story.

Look at California, the price of housing doesnt have to relate to incomes. . And I disagree. A mortgage payment hardly makes a dent in most Albertans pay checks. Thats why everyone has a 500k house with two 80k vehicles sitting in driveway, a garage full of toys, camper and boat parked in the back yard and a rented storage unit to hold their junk.

 

[rzrgade]

You gotta love it when people pay tens of thousands of $$$ in rent so they don't BUY when the market is too high......LMFAO

Lets say your paying 2000+ a month for rent (minimum) x I don't know say , 7 or 8 year cycles (lol)

Well at 7 years you have paid just over 168000$......on the other hand , if we have a real crash (if you own ,you do not have to sell in this time period) but anyways . Let's say you lose 20% on a 400k home or 80000$

Please tell me how the home owner.....loses on this one !!!! On the flip side most homes average a 7 to 10 % growth return over long time. So add roughly 28000$ per year in appreciation over 7 years, or 196000$

No one lives for free, but if you are renting,especially right now congrats are in order !
Not only are you paying your landlords mortgage ,but you migh be paying his bar tab as well....
If your young ......buy real estate.......

 

[deaner]

Long term rate of return on real estate is nowhere near 7-10%. It is usually just above the rate of inflation. Last time I looked at an andex chart it was right around 4%

 

[DRD]

Look at California, the price of housing doesnt have to relate to incomes. . And I disagree. A mortgage payment hardly makes a dent in most Albertans pay checks. Thats why everyone has a 500k house with two 80k vehicles sitting in driveway, a garage full of toys, camper and boat parked in the back yard and a rented storage unit to hold their junk.

And a lot of Albertans will lose there ass when rates go up a bit or if things slow down.
Being one pay cycle away from the money lenders isn't for me. Hopefully when there is a correction I can get that farm I want at the price its worth.

 

[ABMax24]

And a lot of Albertans will lose there ass when rates go up a bit or if things slow down.
Being one pay cycle away from the money lenders isn't for me. Hopefully when there is a correction I can get that farm I want at the price its worth.

Exactly, with everyone scared of a house being more expensive tomorrow they buy today whether they can afford it or not, when Alberta sees a correction I think social structure will reverse, those that managed their money will end up in nice house for cheap, and those that bought everything with credit will be left with nothing. And with the price of Oil at $75 and with low natural gas prices this might happen sooner than later.

 

[rzrgade]

Long term rate of return on real estate is nowhere near 7-10%. It is usually just above the rate of inflation. Last time I looked at an andex chart it was right around 4%

yeah right and inflation is always 1%......all that chart bs is good for is your fire pit. The paper is too rough to wipe you razz with......

 

[ABMax24]

You gotta love it when people pay tens of thousands of $$$ in rent so they don't BUY when the market is too high......

Lets say your paying 2000+ a month for rent (minimum) x I don't know say 7 or 8 year cycles (lol)

Well at 7 years you have paid just over 168000$......on the other hand we have a real crash (if you own u do not have to sell in this time period) but anyways . Let's say you lose 20% on a 400k home or 80000$

Please tell me how the home owner.....loses on this one !!!! On the flip side most homes average a 7 to 10 % growth return over long time. So add roughly 28000$ per year in appreciation over 7 years, or 196000$

If your young ......buy real estate.......

yeah right and inflation is always 1%......all that chart bs is good for is your fire pit. The paper is too rough to wipe you razz with......

How in the world can real estate prices keep outpacing inflation without a correction? Young people can't afford to buy houses now, never mind if the prices continue to go up, this trend will end and many speculators are going to get bit in the a$$.

 

[pfi572]

Sure can tell the different ages groups on this thread ? Lol

Or peeps that are in sales ?

 

[rzrgade]

Sorry young people CAN afford it, the more relevant question is whether they CHOOSE too or not.....If you put toys (exc exc ) a bigger priority than a house you are quite right. You will never afford it......
If you are paying rent right now,chances are good that you are paying more than a mortgage would cost you (in alberta).
Simply put you can't afford not to own a house........I

I am a real estate developer,and it is interesting to say the least. The guy with the new dura max and XM in the back always says : "Houses are too expensive,can't afford it "......lol . He always has an excuse .The couple with the old 96 Ford half ton always buy....

Tell me who's laughing 10 years later.......

 

[pfi572]

^^^
Correct ?
I did without a lot of toys and holidays in exchange for work but it's sure nice to not owe .

 

[rzrgade]

While no one likes to owe.....there is a big difference between owing and investing.

 

[LennyR]

Lol. Not sure if interesting is the right word for this thread. It is very apparent that a lot of the comments are being made by some younger guys who have gained their opinions based on their limited experiences. It's to bad that a lot of people have to make the same mistakes others have made, then realize to late that the formula for success and a healthier financial situation for their families was possible and attainable. I think a lot of guys think they're smart enough to take short cuts (cause they're smarter than everyone else) and guaranteed investments like real estate are way to slow, and retirement , early or otherwise isn't on their minds yet, just having everything they want right now. Real estate will always , always gain huge equity from appreciation over the long haul, again, you need a plan when you buy it, you'll never lose money on real estate if you sell according to the plan you made, if the market isn't right, don't sell, wait till it works for you.
My thoughts are not that people can't afford to buy, I believe they can't afford to rent, not if they could see into the future.
Example , A house sold in our city in 1984 for $68500, That same home sold this year for $316,000. And the people lived in it during that time. In that 30 year period the price went up and down a few times, but still gained a quarter of a million dollars , while they lived in it. I actually know the family that built that home in the mid 60's, they spent $11,500 building it . They did ok also. My folks bought a home for $6500 in 1965, they sold it in 1973 for $24000 bought one for $37000 today it's worth $280,000. It amazes me that people keep saying that this present situation of appreciation and increase can't continue, the same as pessimists have been saying annually for god knows how long, but it keeps rolling along.
Maybe this time you gloom and doomers are right................ But I don't think so.
There are a lot of investments that can generate income and gain equity, and its great to be diversified, but I believe real estate is the safest, long term.

 

[rzrgade]

Lol. Not sure if interesting is the right word for this thread. It is very apparent that a lot of the comments are being made by some younger guys who have gained their opinions based on their limited experiences. It's to bad that a lot of people have to make the same mistakes others have made, then realize to late that the formula for success and a healthier financial situation for their families was possible and attainable. I think a lot of guys think they're smart enough to take short cuts (cause they're smarter than everyone else) and guaranteed investments like real estate are way to slow, and retirement , early or otherwise isn't on their minds yet, just having everything they want right now. Real estate will always , always gain huge equity from appreciation over the long haul, again, you need a plan when you buy it, you'll never lose money on real estate if you sell according to the plan you made, if the market isn't right, don't sell, wait till it works for you.
My thoughts are not that people can't afford to buy, I believe they can't afford to rent, not if they could see into the future.
Example , A house sold in our city in 1984 for $68500, That same home sold this year for $316,000. And the people lived in it during that time. In that 30 year period the price went up and down a few times, but still gained a quarter of a million dollars , while they lived in it. I actually know the family that built that home in the mid 60's, they spent $11,500 building it . They did ok also. My folks bought a home for $6500 in 1965, they sold it in 1973 for $24000 bought one for $37000 today it's worth $280,000. It amazes me that people keep saying that this present situation of appreciation and increase can't continue, the same as pessimists have been saying annually for god knows how long, but it keeps rolling along.
Maybe this time you gloom and doomers are right................ But I don't think so.
There are a lot of investments that can generate income and gain equity, and its great to be diversified, but I believe real estate is the safest, long term.

X2 well put. I would also like to add something overlooked too often....TAX FREE DOLLARS

 

[deaner]

Lol. Not sure if interesting is the right word for this thread. It is very apparent that a lot of the comments are being made by some younger guys who have gained their opinions based on their limited experiences. It's to bad that a lot of people have to make the same mistakes others have made, then realize to late that the formula for success and a healthier financial situation for their families was possible and attainable. I think a lot of guys think they're smart enough to take short cuts (cause they're smarter than everyone else) and guaranteed investments like real estate are way to slow, and retirement , early or otherwise isn't on their minds yet, just having everything they want right now. Real estate will always , always gain huge equity from appreciation over the long haul, again, you need a plan when you buy it, you'll never lose money on real estate if you sell according to the plan you made, if the market isn't right, don't sell, wait till it works for you.
My thoughts are not that people can't afford to buy, I believe they can't afford to rent, not if they could see into the future.
Example , A house sold in our city in 1984 for $68500, That same home sold this year for $316,000. And the people lived in it during that time. In that 30 year period the price went up and down a few times, but still gained a quarter of a million dollars , while they lived in it. I actually know the family that built that home in the mid 60's, they spent $11,500 building it . They did ok also. My folks bought a home for $6500 in 1965, they sold it in 1973 for $24000 bought one for $37000 today it's worth $280,000. It amazes me that people keep saying that this present situation of appreciation and increase can't continue, the same as pessimists have been saying annually for god knows how long, but it keeps rolling along.
Maybe this time you gloom and doomers are right................ But I don't think so.
There are a lot of investments that can generate income and gain equity, and its great to be diversified, but I believe real estate is the safest, long term.

As usual, your arrogance and lack of knowledge is shining through. Real estate is an ok investment generally speaking, but not the be all and end all. And at the end of a short run in real estate where you basically couldnt lose if you tried, sure the simpletons are going to feel like genius's for making money. But if you are looking at things honestly and objectively, there are much better investments. If your friend would have invested that same 68500 in 1984 in the stock market it would be worth over 950k today. Your mommy and daddys house would have been worth somewhere in the neighborhood of 560k on the stock market rather than the housing market.

Principal residences are an exception. Tax free growth and you need a place to live anyways. But to say rental properties as an investment are the cream of the crop is just down right stupid. Way more gains to be had in the stock market without the headache of property management, expenses (insurance, taxes, repairs, etc). But as part of a balanced portfolio they can be a great addition.

 

[LennyR]

As usual, your arrogance and lack of knowledge is shining through. Real estate is an ok investment generally speaking, but not the be all and end all. And at the end of a short run in real estate where you basically couldnt lose if you tried, sure the simpletons are going to feel like genius's for making money. But if you are looking at things honestly and objectively, there are much better investments. If your friend would have invested that same 68500 in 1984 in the stock market it would be worth over 950k today. Your mommy and daddys house would have been worth somewhere in the neighborhood of 560k on the stock market rather than the housing market.

Principal residences are an exception. Tax free growth and you need a place to live anyways. But to say rental properties as an investment are the cream of the crop is just down right stupid. Way more gains to be had in the stock market without the headache of property management, expenses (insurance, taxes, repairs, etc). But as part of a balanced portfolio they can be a great addition.

LOL. Twice. Arrogance like yours has lost millions. $68500 in the markets could have dwindled to nothing or vanished completely in one of the 7 or 8 corrections since 1984. I know a few guys that chose the stock market as a career, started with a whole stack of cash, a couple of them lasted a couple years ish before they got sick of researching and sitting at a computer 12 hrs a day trying to sift thru what's real and what's planted. We have a few doctors in the area that all used the same broker, really sharp,guy in the last stock slip, they invested huge, now they're 60 +and back to seeing patients everyday. A couple of these guys actually left and started new careers with a few bucks left. These were smart guys, not some dufus from BC banging on a snowmobile forum. Lol.
But you're partly right , maybe Not totally stupid, There are a lot of people who made lots of money on stock market, but reality is the big scores, most of them were somehow invited in on the ground floor of a sale of stocks that was manipulated from the get go. One down side to stock market is that for every dollar one guy earns, some other sucker has to lose it. If you have a method of insuring you're the guy earning the dollar instead of losing it, share it, you'll be famous. Of course if you knew how to do that, I suspect you're already rich beyond your wildest dreams. The one buddy, who played the market for almost 3 years, he lost a bunch, is retired now, he had quite a few real estate holdings. He sold a couple, we talked a while ago, his plans are to enjoy retirement and sell one of the couple homes or commercial properties he has every couple years and enjoy he proceeds.
Your scenario problem, It's all the same money, one guy makes money on another guys loss. Talks cheap, so's the paper you own.

 

[Cdnfireman]

The guy who sleeps the best and worries the least is the guy who has no debt. Always has always will. Particularly so if your house is paid for. Every pay check that rolls in is (after expenses) yours to enjoy. Bank it, vacation with it, what ever you want. Sure, you real estate gurus might have lots of wealth but when you leverage one property against the other it's not as rosy as it appears. Lots of people have gone bust on real estate too, remember it only has value if someone wants to buy it. If interest rates rise (and they will) that affordable property becomes unaffordable fast. If you've got the resources to buy several properties and rent them out, and economics allow you to do this long enough, then you'll be rich. But in the meantime, you get to worry about everything from banks to taxes to deadbeat tenants.
my line of work has taught me that life is short and can be fragile. Worry kills more people than work, and it's been my experience that the more money people have the more they worry about money. I'm debt free and loving it.

 

[Skyhigh]

The guy who sleeps the best and worries the least is the guy who has no debt. Always has always will. Particularly so if your house is paid for. Every pay check that rolls in is (after expenses) yours to enjoy. Bank it, vacation with it, what ever you want. Sure, you real estate gurus might have lots of wealth but when you leverage one property against the other it's not as rosy as it appears. Lots of people have gone bust on real estate too, remember it only has value if someone wants to buy it. If interest rates rise (and they will) that affordable property becomes unaffordable fast. If you've got the resources to buy several properties and rent them out, and economics allow you to do this long enough, then you'll be rich. But in the meantime, you get to worry about everything from banks to taxes to deadbeat tenants.
my line of work has taught me that life is short and can be fragile. Worry kills more people than work, and it's been my experience that the more money people have the more they worry about money. I'm debt free and loving it.

Well said, well said!