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Old 2013-03-04, 08:19 PM
JB Nimble JB Nimble is offline
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Default Ontario Housing prices - 20% overpriced!

Something I've been saying for a few years now. Nice to see someone else shares my views. I mean it's so obvious especially here in Ottawa.

One example, I could have purchased a NEW single family home on a 35 foot lot for 315k back in 2009. The same house just sold for 450k. Funny Money.

http://www.ottawacitizen.com/busines...034/story.html
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Old 2013-03-04, 08:44 PM
AvalonMacpherson AvalonMacpherson is offline
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Www.greaterfool.CA
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Old 2013-03-04, 08:56 PM
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xdarrylx xdarrylx is offline
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People are still paying the prices so woohoo!
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Old 2013-03-04, 10:20 PM
JB Nimble JB Nimble is offline
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Quote:
Originally Posted by xdarrylx View Post
People are still paying the prices so woohoo!
Not me. I bought a house in 2004 and 2009, the prices seem to have gone crazy the last half of 2009 to present. I'll stick with my 2000 sq foot town and 150k mortgage @ 2.1%.
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Old 2013-03-04, 11:34 PM
Mike83 Mike83 is offline
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Started watching MLS/grapevine in January... Lots of homes for sale around fairwinds. Most if not all have lowered their prices and have been listed for quite some time. Just an observation...
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Old 2013-03-05, 12:15 AM
Fairwinds5B Fairwinds5B is offline
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Ottawa is rarely mentioned in any of the overpriced real estate articles.
Although like you all mentioned the prices are up by 20-25% in the last 4 years.
Most of the percentage of the Ontario's number is contributed by Toronto downtown condos i guess.
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Old 2013-03-05, 07:47 AM
elrond99 elrond99 is offline
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Define "overpriced."

A) Your article is quoting Fitch, one of the American rating companies that was giving Collateralized Debt Obligations AAA investment ratings in the U.S. - so you'll have to forgive me for not valuing their opinion at all.

B) Welcome to basic economics. Supply and demand drives any economy. If people are willing to pay the price for something (especially a large group of people), then that's what it's value is. If housing prices were truly too high, then the number of people paying them would drop dramatically, and comapnies would be forced to lower the prices to attract more customers.

C) Like Fairwinds5B said, Toronto's housing prices are much higher than Ottawa's and is likely driving most of that 21% figure anyway.
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Old 2013-03-05, 07:55 AM
Bytowner Bytowner is offline
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I don't know why people pick a year, say "look how cheap houses were! Obviously they're overvalued now."

Why would anyone expect a city with a median income of $100,000 to have new homes for sale at $300,000? Ottawa homes are overvalued in a future where most public servants lose their jobs. That's certainly a possibility, but the average residential price is still below $400,000, that seems to match up with income very well.
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Old 2013-03-05, 08:08 AM
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canabiz canabiz is offline
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Quote:
Originally Posted by AvalonMacpherson View Post
Didn't Garth predict a housing crash back in 2005 (and every year after) as well?
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Old 2013-03-05, 09:51 AM
bcpl bcpl is offline
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So what is the deal?
Do you guys who are concerned about this flip houses? Are these investments? Are you being forced to sell after a period of time? Will you lose money on this house investment?

Or, is everyone concerned because they might have been able to save money if they bought in a few years?

The way I look at it...we bought a house not stocks (even if it was stock consider Buffet's long-term holding positions). This is something that we will have for many, many years. We can (and likely will) hold this place for longer than any market correction will last.

While if I was guaranteed a 20% discount if I waited a few years, I likely would have taken it. But this was not and still is not the case.

Plus, who knows what interest rates will do in the future? If they go up as prices come down (remember the BoC will move toward raising interest rates if there is a hint of deflation), then that will eat into any savings that were acheived by waiting.

My house was not a short-term investment plan.
We made a wise decision based on what we could afford without over-extend ourselves and taking into account anything that could have affected our ability to pay for the house in the future (loss/reduction in income, increasing interest rates).

I like my house (except that damn air-leaking fireplace).

Thoughts on Garth Turner's 2009 predictions
"Where was the talk coming from? The most prominently quoted source wasn't an economist or a real-estate expert ; it was Garth Turner, a former politician who had been promoting a book predicting a housing collapse."

More thoughts on Garth Turner's 2009 predictions
This is my favourite part of this one:
"The difference between 90% and 47% isn’t exactly a rounding error, so we asked Garth where he got his figures. He said he “doesn’t have a source.” He apparently derived that number from some industry executives he spoke to a while back"

Ottawa's steady house prices 2012
"The capital’s famously steady real estate market continued its calm course in 2012, seemingly immune to the pressures that have cut into sales — and to a lesser extent, prices — in other centres."


I have to point out that the article re: 20% overvalued also states
“Actual nominal declines could range from the low single digits (for Alberta), up to more than 15 per cent (for B.C. and Quebec) over the next several years assuming values start falling immediately and taking into account inflation and other market dynamics,” said Fitch"

Any savings that might be had by delaying should not be compared against the 20% but rather the nominal amount of between 2-3% and 15% depending on the market.

Last edited by bcpl; 2013-03-05 at 01:01 PM.
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