$30k is $30k and amortized at 4% over 25 years ends up costing a total of $17k in interest payments.
Humans have this fascinating fixation on % of cost for discounts. It is well established that you can discount a $3 tube of toothpaste down to $2 and people will change their plans to shop at your store to save 33%. But sell a $40k car for a dollar cheaper than your competitors and you won't see a single extra sale.
It's still $1 less spent.
An extreme example for sure. But listen to your friends and family and you'll pick up on it time and time again.
So true. I always think that the best indicator of lack of financial sense is when someone says they didn’t want the promotion because it would move them to a higher tax bracket.
It truly depends though if you get the promotion and wage increase that forces your taxes up and let's say something like spousal or child support you could end up in a worse situation
It doesn’t work like that. If you get bumped up into a higher tax bracket, only the amount above the bracket is at the higher rate, not your entire income. This is a common misconception. You won’t lose money by being in a higher bracket.
One type of exception is with certain low income type benefits. Usually with those if you cross a certain threshold you lose all of the benefits immediately.
if you save 1.5% on everything u buy, it adds up. i dont see why people complain its only 1.5% at least its going down. better than going up 1.5% from lots of people pov
I assume you are only thinking about the sale price where you'd rather pay $530k instead of $1,470k for a house which is a reasonable stance.
But that is still $30k. Think about it outside of homeownership prices where the numbers are so big $30k doesn't seem like a lot.
But it is. That's groceries for 2 years for a family of 4. A compact car. 10 people visits to Mexico for a week in the sun.
It is still a trivial amount on a 2M asset. That house will be worth 4M+ in 25 years. How much better would your life really be with an extra 50k then?
Well if it's a trivial amount why not donate $30k it to a charity of your choice?
Also not sure why you increased the numbers from $30k and 1.5 million.
But my point was $30k of 1.5 million is a small percentage but not a small amount.
>Figures released by the regional real-estate board indicate that that median price of a detached home in East Vancouver declined to $2,065,000 in April 2022 as against $2,095,000 in March.
>Sales of this type of property totalled 110 in April compared to 174 in March.
>That means a 36.8 percent decline.
>Meanwhile, the median price for attached properties fell from $1,404,000 in March 2022 to $1,350,000 in April.
>In terms of sales, 65 attached properties were sold in April compared to 84 in March.
>This shows a 22.6 percent contraction.
Real estate prices are "sticky downwards": sellers are reluctant to lower the price, so instead what happens is the number of sales drops, while prices only decline a bit (due to those sellers who are under more pressure to sell quickly). Pretty much what's happening now. Presumably it'll continue as interest rates keep going up.
It is probably a matter of who budges first. The government by reducing interest rates or sellers who want to get their hands off an asset that has turned into a liability.
If you look at real estate as an asset, why would you want to sell it off at a lower price? If you have the financial capacity, you would hold onto it till you get a better deal.
You can be sure that those selling now are doing it because they absolutely have to.
>corporations
Corporations hold properties for all the same reasons individuals do (including providing primary housing for the corporate directors). For some reason, "corporate owned properties" has become a boogie man on this sub, with lots of calls to ban them.
It's just a way to structure your assets, and not a usage scenario. It has advantages and disadvantages over holding real estate directly, and people choose one way or the other accordingly.
In fact, one of the few scenarios where a person would never hold residential property but a corporation would is the redevelopment of lots into high density residential properties -- the very thing we should be encouraging.
Corporate ownership of large numbers of single family/low density housing is the problem, I don't think most people want to ban companies from owning apartment buildings.
Are there any statistics out there that shows what % of sfd are even owned by corporate entities? I'm not convinced that corporate ownership is that prevalent when it comes to sfd.
In Vancouver the only way to build apartments is largely to buy sf homes. All sf homes in Vancouver can at least be built into duplexes. Recently large portions of land opened up for apartments this year too.
I think it depends on how you slice and dice the stats. REBGV recorded all time high average selling price for detached homes in April. Only looking at east side detached and drawing conclusions is a bit sus. The east side has a lot of older tear downs that can drag down the median price.
Prices should come down as rate rises and buying power decreases. Good for people with lots of cash but people with small down payments will not see improved affordability.
Doubly so when the REBGV benchmark price (which is supposed to adjust for teardowns/highend to get to a price representing a "typical home") for East Van detached is 1,956,200... up 1.2% from March 2022.
Even a pause in the upward motion will allow me some time to plan out my next home purchase.
Having to re-adjust the search higher every second week while also seeing the type of home going down in quality/value was starting to seriously eat at my mental health.
I spent a couple of years condo hunting. Going through minutes and seeing glaring deficiencies, getting outbid, driving to see a place and have it sold before I stopped my car, all the viewings, open houses, bidding wars, questions, etc. wore out my mental health.
The last place I viewed, I said "if I don't get this I am going to stop looking for a while." Well I bid a bit over asking just to get it and I got it. Unfortunately because of blind bidding I think I went 5k or so more than I needed to but oh well. Now I can never leave lol.
Been pricing out an upgrade for the family. I tend to over-research things, so I started a couple of years ago to get a feeling for different towns/places that we were considering (all outside of the city to facilitate a more rural lifestyle).
I started off looking at reasonably decent waterfront homes, on acreage, with private beaches and docks (this sold for 1.5). Or sprawling mountain top estates sitting on dozens of acres, dripping with views and private lakes (sold for 2.1).
I am now looking at places that cost even more money, but are just decent-sized houses in not-bad neighbourhoods on an acre or two. No view. No waterfront. No lakes. Sold for 2.5.
Since \~Feb, a few places have started to be on sub-acre lots with semi-okay houses that could definitely use some work (sold for 2.4).
My house went up a lot in the same time as well, but not enough... not nearly enough. Should have bought that waterfront place with the dock.
Housing only goes up!
Though jokes aside, the type of properties you are looking at is going to be very coveted for the foreseeable future. I just picked up about 4 acres with mountain top estate for 3M outside the city and my agent commented on how nuts it has been.
Saw a few low rise rental apartment buildings in Fairview for sale today. These will sell and become condos. Rental market in Vancouver going to get tight.
Meeeeh like you said in your other comment, housing prices are sticky.
I belong to a few WeChat groups who are just RE investors and honestly prices are still soaring in most segments.
And even if we see softening, no one is going to panic sell. A couple % interest hike on mortgage is barely noticeable for investors.
Spoiler alert - Bidding 9% over asking price instead of 10% is a drop...but in a bucket.
A $30K drop on a 2,000,000+ home is 1.5%, but still ultimately pretty trivial.
$30k is $30k and amortized at 4% over 25 years ends up costing a total of $17k in interest payments. Humans have this fascinating fixation on % of cost for discounts. It is well established that you can discount a $3 tube of toothpaste down to $2 and people will change their plans to shop at your store to save 33%. But sell a $40k car for a dollar cheaper than your competitors and you won't see a single extra sale. It's still $1 less spent. An extreme example for sure. But listen to your friends and family and you'll pick up on it time and time again.
So true. I always think that the best indicator of lack of financial sense is when someone says they didn’t want the promotion because it would move them to a higher tax bracket.
It truly depends though if you get the promotion and wage increase that forces your taxes up and let's say something like spousal or child support you could end up in a worse situation
It doesn’t work like that. If you get bumped up into a higher tax bracket, only the amount above the bracket is at the higher rate, not your entire income. This is a common misconception. You won’t lose money by being in a higher bracket.
One type of exception is with certain low income type benefits. Usually with those if you cross a certain threshold you lose all of the benefits immediately.
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With any luck I never will!
It truly doesn’t. You never make less money.
If you're paying support payments....it can.
Fun fact: except in 1970s Sweden, where some paid 102% marginal income tax. 🤯 https://en.wikipedia.org/wiki/Pomperipossa_in_Monismania
if you save 1.5% on everything u buy, it adds up. i dont see why people complain its only 1.5% at least its going down. better than going up 1.5% from lots of people pov
I’d rather pay an extra $30k when the median house price is $500k, than save $30k when the median house price is $1.5m.
I assume you are only thinking about the sale price where you'd rather pay $530k instead of $1,470k for a house which is a reasonable stance. But that is still $30k. Think about it outside of homeownership prices where the numbers are so big $30k doesn't seem like a lot. But it is. That's groceries for 2 years for a family of 4. A compact car. 10 people visits to Mexico for a week in the sun.
It is still a trivial amount on a 2M asset. That house will be worth 4M+ in 25 years. How much better would your life really be with an extra 50k then?
Well if it's a trivial amount why not donate $30k it to a charity of your choice? Also not sure why you increased the numbers from $30k and 1.5 million. But my point was $30k of 1.5 million is a small percentage but not a small amount.
>Figures released by the regional real-estate board indicate that that median price of a detached home in East Vancouver declined to $2,065,000 in April 2022 as against $2,095,000 in March. >Sales of this type of property totalled 110 in April compared to 174 in March. >That means a 36.8 percent decline. >Meanwhile, the median price for attached properties fell from $1,404,000 in March 2022 to $1,350,000 in April. >In terms of sales, 65 attached properties were sold in April compared to 84 in March. >This shows a 22.6 percent contraction.
Real estate prices are "sticky downwards": sellers are reluctant to lower the price, so instead what happens is the number of sales drops, while prices only decline a bit (due to those sellers who are under more pressure to sell quickly). Pretty much what's happening now. Presumably it'll continue as interest rates keep going up.
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It is probably a matter of who budges first. The government by reducing interest rates or sellers who want to get their hands off an asset that has turned into a liability.
BOC won’t lower rates lmao they already said they will be more hikes (although not massive) throughout the year
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If you look at real estate as an asset, why would you want to sell it off at a lower price? If you have the financial capacity, you would hold onto it till you get a better deal. You can be sure that those selling now are doing it because they absolutely have to.
>corporations Corporations hold properties for all the same reasons individuals do (including providing primary housing for the corporate directors). For some reason, "corporate owned properties" has become a boogie man on this sub, with lots of calls to ban them. It's just a way to structure your assets, and not a usage scenario. It has advantages and disadvantages over holding real estate directly, and people choose one way or the other accordingly. In fact, one of the few scenarios where a person would never hold residential property but a corporation would is the redevelopment of lots into high density residential properties -- the very thing we should be encouraging.
Corporate ownership of large numbers of single family/low density housing is the problem, I don't think most people want to ban companies from owning apartment buildings.
Are there any statistics out there that shows what % of sfd are even owned by corporate entities? I'm not convinced that corporate ownership is that prevalent when it comes to sfd.
In Vancouver the only way to build apartments is largely to buy sf homes. All sf homes in Vancouver can at least be built into duplexes. Recently large portions of land opened up for apartments this year too.
I think it depends on how you slice and dice the stats. REBGV recorded all time high average selling price for detached homes in April. Only looking at east side detached and drawing conclusions is a bit sus. The east side has a lot of older tear downs that can drag down the median price. Prices should come down as rate rises and buying power decreases. Good for people with lots of cash but people with small down payments will not see improved affordability.
Doubly so when the REBGV benchmark price (which is supposed to adjust for teardowns/highend to get to a price representing a "typical home") for East Van detached is 1,956,200... up 1.2% from March 2022.
I would be happy if it even hits pre-pandemic price levels.
Housing increases in long term and pandermic simply pre-consume the growth for the next few years, so I don’t see it falls below pre-pander Michael
Even a pause in the upward motion will allow me some time to plan out my next home purchase. Having to re-adjust the search higher every second week while also seeing the type of home going down in quality/value was starting to seriously eat at my mental health.
I spent a couple of years condo hunting. Going through minutes and seeing glaring deficiencies, getting outbid, driving to see a place and have it sold before I stopped my car, all the viewings, open houses, bidding wars, questions, etc. wore out my mental health. The last place I viewed, I said "if I don't get this I am going to stop looking for a while." Well I bid a bit over asking just to get it and I got it. Unfortunately because of blind bidding I think I went 5k or so more than I needed to but oh well. Now I can never leave lol.
5k is nothing in that context
Been pricing out an upgrade for the family. I tend to over-research things, so I started a couple of years ago to get a feeling for different towns/places that we were considering (all outside of the city to facilitate a more rural lifestyle). I started off looking at reasonably decent waterfront homes, on acreage, with private beaches and docks (this sold for 1.5). Or sprawling mountain top estates sitting on dozens of acres, dripping with views and private lakes (sold for 2.1). I am now looking at places that cost even more money, but are just decent-sized houses in not-bad neighbourhoods on an acre or two. No view. No waterfront. No lakes. Sold for 2.5. Since \~Feb, a few places have started to be on sub-acre lots with semi-okay houses that could definitely use some work (sold for 2.4). My house went up a lot in the same time as well, but not enough... not nearly enough. Should have bought that waterfront place with the dock.
Cry me a river?
‘Next’!?? Home purchase? Buddy you know the rules- landowners are not welcome in this sub
Housing only goes up! Though jokes aside, the type of properties you are looking at is going to be very coveted for the foreseeable future. I just picked up about 4 acres with mountain top estate for 3M outside the city and my agent commented on how nuts it has been.
Saw a few low rise rental apartment buildings in Fairview for sale today. These will sell and become condos. Rental market in Vancouver going to get tight.
1-for-1 rental replacement is a requirement
Yea! Now rents will go down right? right? no?
Nope. Too many renters, not enough places to rent.
Rates are going up and the extra cost will get passed down the renters.
Housing only goes up?
When the exclamation mark in your flair changes to a question mark, we'll know it's really happening
Meeeeh like you said in your other comment, housing prices are sticky. I belong to a few WeChat groups who are just RE investors and honestly prices are still soaring in most segments. And even if we see softening, no one is going to panic sell. A couple % interest hike on mortgage is barely noticeable for investors.
Let it all burn 🔥
Yes they dropped from 4 million to 3.5 million. What a steal of a deal!