The Housing Market needs to crash.

Discussion in 'Toronto Issues' started by denfromoakvillemilton, Apr 28, 2012.

  1. denfromoakvillemilton

    denfromoakvillemilton Senior Member

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    I was just looking in high park 600k for a decent home? This was not like that back in 1999! East York 450k? Former city of york is the only cheap area in Toronto.


    I graduate next year, I'll be stuck renting for 10 years if the housing market does not correct.
     
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  2. cdr108

    cdr108 Senior Member

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    while i concur that the housing market is over-inflated, why is it necessary for you to immediately purchase something right after you graduate from university?

    how much do/did you plan on putting down as a deposit?

    it seems to me that many in their 20s-30s want everything their parents have NOW, without having to save and accumulate over time. it's the buy now and pay later attitude, and sense of entitlement.

    without knowing what you're graduating from, are you aware that most graduates with bachelors degree earn mid-$30K in the beginning?
    looking in the 600K range would still be 17x income.
     
    Last edited: Apr 28, 2012
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  3. denfromoakvillemilton

    denfromoakvillemilton Senior Member

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    I agree. I was hoping for something for 350k-400k in high park/parkdale/roncesvalles, Little italy, but I was shocked when I saw the prices.
     
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  4. unimaginative2

    unimaginative2 Senior Member

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    Before getting into the "Kids these days get it all so easy and feel so entitled" attitude that is so eternally popular, it's worth knowing a little history: in the 1950s, it was entirely normal for a couple to buy a house just out of university. Same with veterans in their early 20s just returning from World War II. Governments had very elaborate policies to permit young people to buy new houses with little or no money down. House prices have increased far more rapidly than consumer price inflation and the median household income over the past decades.

    Toronto's probably is an undersupply of prewar houses. Since Toronto was a pretty small city before the war and there are hundreds of thousands of people who want their own bay-and-gable now, demand in older Central Toronto neighbourhoods will keep driving prices of what should be a reasonable middle class home out of the price range of middle class families.
     
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  5. denfromoakvillemilton

    denfromoakvillemilton Senior Member

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    that above all else is my problem!!
     
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  6. Memph

    Memph Active Member

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    Also back then those new houses were on the outskirts and quite small. If developers started building 1000 square foot bungalows in Brampton, I think they would be fairly affordable. Though I wonder if people in the 50s were in a better financial situation with higher incomes/less debt adjusted for inflation.
     
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  7. TheKingEast

    TheKingEast Senior Member

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    So because you can't buy a house straight out of school you want the market to crash? If the market does crash, you will probably be out of a job along with many loved ones.
     
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  8. denfromoakvillemilton

    denfromoakvillemilton Senior Member

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    In reality I just need the prices to go down.
     
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  9. Eug

    Eug Senior Member

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    That's over 60 years ago. People didn't even have colour TVs back then.
     
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  10. James

    James Senior Member

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    There's no doubt that it's becoming more and more difficult to buy a single family home in the older central Toronto neighborhoods, but then again, you have to keep in mind there is a limited amount of inventory and these are, for the most part, the most sought after neighborhoods in the entire GTA.
     
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  11. Grimace

    Grimace Active Member

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    In relation to other cities of comparable size, Toronto is unique in having extensive pre-war residential neighbourhoods close to the urban core. These are the sort of neighbourhoods that were emptied in many cities in the mid 20th century as the white middle class moved to the suburbs. I am not a historian, but my impression is that in Toronto these neighbourhoods were preserved by the influx of immigrant communities, such that you still see the Polish influence in Roncesvalle, the Portuguese/Brazilian influence in Little Portugal, Italians in Little Italy, etc. As these immigrant communities aged, and started moving to suburban ethnic enclaves like Woodbridge, a number of these areas entered into decline (much later than comparable neighbourhoods in other NA cities). For instance, my area of North High Park, South Junction, or whatever you want to call it, was in material decline in the 1990s but this was arrested by the very significant cultural shift (assisting in part by the commuter problem) that resulted in many young families wanting to stay in the City. Almost none of the young people I know (by which I mean under 40) look to move out of the City of Toronto (not old but amalgamated) if they work downtown. Increased home prices is a result. This is a GREAT thing for the City.

    I worked for 5 years after a graduate degree in a well remunerated field before I bought a 1400 square foot home. I was into my 30s. Most of those years were in NYC, making US dollars when that meant something. That's the way it is. If kids out of school with undergrad degrees and no parental support could buy homes in my area, that would be a problem, because it would mean it was the 1990s all over again and my area would be in decline.

    Moreover, if you're straight out of undergrad, unmarried and no kids (I'm guessing here), why do you want a house in High Park? I suspect it is due to the misconception that renting is throwing money away, while buying is getting you equity. Well let me tell you, if you don't have a decent downpayment you're paying more in interest than you would be paying in rent, and if you're buying a 100 year-old home in High Park (mine is 106) maintenance is a big portion as well.

    I don't mean to diminish the challenges this housing market can impose on people, but my sympathies don't lie with a well-employed kid just out of school who can afford a $450,000 place. The fact that many well-off families are rejuvenating our inner city victorian and post-victorian housing stock, and sacrificing significant square footage to do so (compared to what they could get in the suburbs), is one of the best things happening in the city right now. The huge numbers of condos going up in the city are perfectly suited for the likes of denfromoakvillemilton.
     
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  12. TheKingEast

    TheKingEast Senior Member

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    They will. But it's going to still be difficult to purchase property. Although the prices may come down, it will be harder to afford property due to rate increase and tougher lending rules. If we end up going to 25 year amortization, a lot of people will be priced out of the market.
     
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  13. denfromoakvillemilton

    denfromoakvillemilton Senior Member

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    I want to believe you and this guy (http://www.thestar.com/business/art...apple-tulips-and-beanie-babies-have-in-common) but the prices have been high for some time now.
     
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  14. denfromoakvillemilton

    denfromoakvillemilton Senior Member

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    That, and we used to live there before I moved to Oakville for highschool. But I will take your post into consideration.
     
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  15. TrickyRicky

    TrickyRicky Senior Member

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    KingEast points out the major fallacy of waiting for a crash. The absolute value of housing is of less importance than your relative position. If you want to buy in a central location denfromoakvillemilton you need to leverage your assets. As a young man your assets are not money. The competition on a relative basis will utterly slaughter you in terms of income and financial assets when you are looking to buy. If you are dead set on a house over a condo (and I personally do not believe in owning condos) you need to know what your assets are. Your assets are flexiblity, time, determination, and risk-tolerance.

    What that means is for you to enter the market you need to buy a crappy house in a marginal zone with potential and good bones and fix it up yourself over time while renting out part of it. If this sounds unappealing than you only have two options: win the lottery or buy a condo.
     
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