Amos Moses posted:

Wasting posted:

I'm sorry if I've missed it, but have you made an honest, thorough search for a better rental? I understand getting frustrated with moving, but it may be your best option.

I use moves as a time to redo my budget and cull some of the crap I no longer need, so that at least the headache ends with simplicity.

Bleu posted:

When did 'buy low, sell high' stop being a thing people understood? I learned that poo poo by playing Drug Wars on my TI-83+ in high school.

Maybe it should be bilingually labelled.

Amos Moses posted:

And that's why I'm here right. I might come off like "Hey this is my plan look" but what I'm really looking for is guidance from experienced goons who know far more than I do in this regard.

To give you an idea of what I'm looking at property wise around here. a 625sq ft home with 2 bedrooms, 1 bath and no garage is now going for $195,000, for a house built in the 1940's with no major upgrades.

Amos Moses posted:

I'm stuck behind a rock and hard place rental wise. Any private renter here will quickly give you the heave-ho from say a basement apartment if they have a friend who needs a place to rent
or some poo poo like that. Grandma can't take of herself anymore? Sorry, need the apartment now.

Amos Moses posted:

And that's why I'm here right. I might come off like "Hey this is my plan look" but what I'm really looking for is guidance from experienced goons who know far more than I do in this regard.

To give you an idea of what I'm looking at property wise around here. a 625sq ft home with 2 bedrooms, 1 bath and no garage is now going for $195,000, for a house built in the 1940's with no major upgrades.

Cultural Imperial posted:

That's crazy. Generally speaking, anything built before the 00's is much bigger. How the hell do you fit 2 bedrooms in 600 odd sqft? This is a standalone house?

LemonDrizzle posted:

2 bedrooms in 625 square feet sounds very cramped, but at least you're not looking at a crazy income multiple there.

Cultural Imperial posted:

That's crazy. Generally speaking, anything built before the 00's is much bigger. How the hell do you fit 2 bedrooms in 600 odd sqft? This is a standalone house?

Amos Moses posted:

The city was never originally expected to have the expansion it did. They cannot zone eastward on one entire side of the town because o massive petrochemical upgrader..
What new homes are being built are being built southwest of the city core which is swamp-land. Huge developments of $500,000 homes that would cost $220,000 in any sane market that experience extensive flooding and just the general all lovely-ness of living on what used to be a swamp.

Antifreeze Head posted:

Going from 680 sq ft to 625 isn't a massive drop in livable space. Lots depends on layout as the kitchen sounds terrible in the apartment, it could be better in the house. And if there is a full basement, then it's actually a gain in usable space.


That's a very broad brush you're painting with. Maybe it's true where you live, but it certainly doesn't hold true everywhere. In prairie cities, there are scores of homes in the 600-700 square foot range that were slapped up after World War Two. I've even seen some into the low 500s.

And the bedrooms are no different size in a house of that size than they are in an apartment that size.

PT6A posted:

That's not strictly true. Additional room is needed for things like, say, a water heater and other utilities in a standalone house, that would not be needed in an apartment because it's located in a common area of the building. It may not be a huge difference, mind you. I know all the apartments I've lived in have storage lockers located in a common area as well, but in a house you'd have to take that into account.

Antifreeze Head posted:

It's really only not true if the house doesn't have a basement as that serves as a home for all the utilities, plus storage. I can only guess that the rest of the prairies are similar to Winnipeg where homes with just a crawlspace are in a very small minority. If basements are more prolific here, it may well be because it's better to send waterlines into a heated basement as it keeps them well below the frost line. Even then, we've had something like 2500-3000 homes and businesses lose their water here because their lines froze.

PT6A posted:

Wouldn't a theoretical basement be included in square footage figures? I've never rented/bought a house, so I'm honestly not sure what standard practice is, but I don't know why a basement wouldn't be counted.

Kalenn Istarion posted:

Depends on where you're looking. Standard in Toronto is to exclude basement area in size quotes unless it's fully finished / furnished as a rental unit or something like that. In Vancouver it seems more like basements get included most of the time.

pacerhimself posted:

Reading about the market in Winnipeg, and it seems like 20-30s who aren't willing to leverage their future against incredible amounts of personal debt are being priced out of the market completely.

Fixer upper 1000 sq ft houses are regularly going for $25k+ over asking price, and the asking price is already too high for what you're getting. My plan of renting for a while once I return there is starting to look like a much better plan.

etalian posted:

Also if you do need to buy it makes sense to buy after the bubble assuming you have decent employment.

Never makes sense to buy high given the overinflated nature of Canadian real estate especially in the big population centers.

PT6A posted:

Wouldn't a theoretical basement be included in square footage figures? I've never rented/bought a house, so I'm honestly not sure what standard practice is, but I don't know why a basement wouldn't be counted.

pacerhimself posted:

Reading about the market in Winnipeg, and it seems like 20-30s who aren't willing to leverage their future against incredible amounts of personal debt are being priced out of the market completely.

Fixer upper 1000 sq ft houses are regularly going for $25k+ over asking price, and the asking price is already too high for what you're getting. My plan of renting for a while once I return there is starting to look like a much better plan.

quote:

Then there are the bare facts about recent market performance. Prices have been rising but, outside top-end central London, not by a huge amount. And they are still below their previous peak. What’s more, although mortgage lending is increasing rapidly, it is still low compared to the past. To top it all, the economy is recovering, employment is rising and the squeeze on real earnings is about to end. So why worry?

I’ll tell you why. Affordability is not the be-all and end-all. The fact that it reflects both the average size of mortgages and the interest rates that are paid on those mortgages is a good thing when you are thinking about short-term movements. But, when interest rates are currently well out of their normal range, as they are now, it is a curse. I much prefer the ratio of average house prices to average earnings. That is currently standing well above its long-term average. It is easy to reconcile these conflicting measures. Official interest rates at 0.5pc are at an all-time British low. Yet we all know that at some point they will have to go higher.

Even if, as I believe, they top out much lower than previous peaks, that will still be a major change from the current level. If you assume a mortgage rate of 5pc or 6pc, the ratio of mortgage payments to income would be well above the historical average. What’s more, the historical average has to be interpreted with care. In the bad old inflationary days, a high burden of mortgage debt would soon be relieved by increased pay.

In other words, compared to those days, a given percentage of earnings going on mortgage payments now represents a bigger mortgage burden over the life of a mortgage.

As for the fact that, on average, prices are still not back to their previous peak, the argument turns on what you think of the previous peak. If you think that it represented fair value, then the fact that it has not been regained suggests that current market strength is well-founded.

But the previous peak was the top of the biggest house price boom in this country. After that peak, prices fell a good way but nowhere near enough to bring the market back to fair value. The result is that prices are now rising from a level that was itself much too high, in marked contrast to the United States and also to what happened in this country in the mid-1990s.

Nor is low mortgage lending particularly consoling. With transactions low, mortgage lending should also be low. For a time, a market can levitate as buyers and sellers both expect prices to rise. Indeed, in principle, it can move higher without any transactions taking place and therefore no new lending at all. Moreover, with many youngsters unable to afford to buy even at these low interest rates, their parents often step in to supply the wanted cash.

Housing is a market unlike all others.

For a start, we all have to live somewhere and there is much to be said for the benefits of ownership rather than renting. Second, there are huge tax advantages to owner-occupation. Third, unlike virtually any other asset category, the ordinary person can borrow easily and therefore gear up their investment. Fourth, because of their familiarity with it, people think they understand property in a way that they don’t understand other assets – least of all pensions.

The result is that it is easy to persuade people that property is a one-way bet and for speculative behaviour to take hold. This is happening now. It isn’t only about greed. It is also about fear – the fear that if you don’t buy now, you will never be able to afford to. This feeds on itself and a bubble inflates.

The worst aspect of all this is that although particular individuals become better off as a result, people overall do not. The housing market is the greatest source of investment delusion known to man. As I said a few years ago, people are encouraged to believe in “money for nothing”. As house prices go up, they are led to believe that as a society we are richer and yet if no new assets are produced, clearly we are no richer at all. On the contrary, we would be richer if a prolonged and pronounced building boom caused house prices to fall.

For this you cannot blame Mr and Mrs Average, whether driven by greed or fear. This is the result of a massive failure of public policy: tight control of building land and massive subsidies to home-ownership, combined with a lax immigration policy. I am not saying that each of these is necessarily wrong but the combination of the three has been catastrophic – wasting resources, distorting the economy, leading to misery and frustration for millions of people and diverting their energies into the zero-sum game of climbing the housing ladder.

Politicians are constantly in search of purpose. That is why they meddle in so many things that should not concern them. Yet here is an area where they could have a transformative effect on so many people’s lives. Moreover, what has gone wrong is a direct result of their actions. Will a government ever have the nerve to deliver radical reform? Don’t hold your breath. For the next year or so at least, the housing market is cast in its time-honoured role of creating an illusion of prosperity and helping the governing incumbents to win the next election.

Roger Bootle is managing director of Capital Economics. Contact him on roger.bootle@capitaleconomics.com

Antifreeze Head posted:

That really depends on the neighbourhood. In Scotia Heights, Wolseley and River Heights that is probably the case, but that's because they are filled with those who will pay a premium to live exclusively next to other white people. Look in Sargent Park, Weston, Brooklands or old Elmwood and you'll usually find stuff going well under 200-thousand dollars and often at or below initial asking price. And you certainly won't be leveraging against your financial future if you buy in the north end where you can get a two storey house on Alfred for $99,900.

quote:

StatsCan: output of RE agents and brokers -4.9% in January, down for 4th consecutive month, as activity in the home resale mkt falls

Cultural Imperial posted:

Check out @LJKawa's Tweet: https://twitter.com/LJKawa/status/450612123673296896

Lexicon posted:

Separately, could someone explain to me why mortgage brokers even exist? I get the impression they are well compensated, and you can't walk past a bus bench without seeing one of their photographs; however, what the hell is their purpose? Financial institutions are competing on a lending rate for the most fungible thing ever - money. It's practically the least subjective transaction one can participate in. Why is this not simply a matter of visiting a website, sorting financial institutions by offered rate, and getting a mortgage through that one? Why does this middleman exist? Genuine question.

Lexicon posted:

I'm quite impressed by LJKawa. He seems a really sharp dude and posts lots of interesting stuff (pity about the fratboy appearance and expression in the photo).

Separately, could someone explain to me why mortgage brokers even exist? I get the impression they are well compensated, and you can't walk past a bus bench without seeing one of their photographs; however, what the hell is their purpose? Financial institutions are competing on a lending rate for the most fungible thing ever - money. It's practically the least subjective transaction one can participate in. Why is this not simply a matter of visiting a website, sorting financial institutions by offered rate, and getting a mortgage through that one? Why does this middleman exist? Genuine question.

ocrumsprug posted:

It is generally a very subjective transaction, at least in a regular environment.

When my wife and I were looking in 2000, we found that we could not even get a bank to talk to us. It was a combination of employment lengths, being (or not) a current customer of the bank and racism. The mortgage broker magically made all of the a non-issue, plus he dealt with all the paperwork.

Considering it doesn't cost me anything, and has no downside I'm aware of I would recommend using one.

FrozenVent posted:

A broker spends all his time researching mortgages and applying for them, while you might do so once or twice in your life. He'll have relationships with the lenders he work with, so he can bypass some of the initial screenings. They'll also know if there's any quirks in the systems, peculiarities of a given lenders and whatever.

Much like any brokers, really, you're hiring them for the expertise and their network. I assume that much like any other kind of brokers, there are good ones and there are bad ones.

Saltin posted:

My sense is that often, the rate(s) the bank posts and they rate they are willing to extend to a potential customer are two different things. The last time I renewed my mortgage we had a long and serious chat about what I expected and what they were willing to offer. My rate was significantly discounted from any posted rate. My wife later puzzled at why I was negotiating over fractions of a percentage, until we got home and I showed her how important that poo poo is in money terms.

A mortgage broker is often able to suss out the best rate possible given the client, and clients often have no loving idea about anything at all other than what type of tiles are going into the kitchen, so it might be advantageous in that regard.

Lexicon posted:

I'm quite impressed by LJKawa. He seems a really sharp dude and posts lots of interesting stuff (pity about the fratboy appearance and expression in the photo).

Separately, could someone explain to me why mortgage brokers even exist? I get the impression they are well compensated, and you can't walk past a bus bench without seeing one of their photographs; however, what the hell is their purpose? Financial institutions are competing on a lending rate for the most fungible thing ever - money. It's practically the least subjective transaction one can participate in. Why is this not simply a matter of visiting a website, sorting financial institutions by offered rate, and getting a mortgage through that one? Why does this middleman exist? Genuine question.

Throatwarbler posted:

Why do salespeople of any kind exist?

Lexicon posted:

I guess I come from the point of view that a broker is useful in cases where you have a buyer of a rare thing and a seller of a rare thing. The broker adds economic value by making that relationship happen.

A mortgage is nothing more than money borrowed at a particular rate, and with [highly-regulated] terms attached. It's the exact opposite of a 'rare thing being sold' - bank A's money is just as good as any other bank's money, and they're only really differentiated by their rate - hence my argument that this should be a matter of ranking by cost and starting at the lowest.

Disclaimer: I've never bought property or gone through this process - so I know nothing about it from a practical standpoint. It just seems stupid, as an external party looking-in.

ocrumsprug posted:

They might have been the only realistic method of purchasing a home in the late90-early00s, for those that were under 40.