Tuesday, March 18, 2008
The drama is building in the Real Estate blogosphere. I want to add my $0.02
Dear Wanton Specuvesters and Ramens,
Not ever person is born a homeowner. Some people may not have been in a position to buy in 2005. Some people are in their 20s and rent to shelter themselves not because they hate the world. Saving up for a downpayment is not doom and gloom, instead it is being prudent and responsible. It has been demonstrated from the numbers that the Alberta real estate market got carried away in 2007 and caution was justified.
Don't be deluded about the value of your investment property. If you bought a home for $250K and are now having trouble selling it for $400K, you can lower the price. You are deluded if you think that buyers are collectively being irrational regarding your property. Try selling for $350K, or even $330K. consider the point of view of a first time buyer - that is still a lot of money.
Dear Jealous Bitter Renters,
There is a set of people out there that are buying properties they like and can afford. I don't know what that percentage is but they do exist. They may lose paper money in the future but they may not. I do not know for certain.
Re-evaluate your situation without pre-judging that buying is terrible. Be sure to consider actual market rents to buying. Your current rent may be under marginal market rents as many landlords limit their increases to keep good tenants and to avoid conflict. Its good to be aware of what market rents are anyway so that you can prepare for any increases and will understand what is reasonable. House prices may not crash- consider this possibility when planning for your future. Consider alternatives to a brand new house on a huge lot if home ownership is a serious goal. This could be a duplex or townhouse, or a home with a basement suite. It could be a further drive. Determine seriously what debt level and home you will be happy with and make a plan to get there (that does not necessarily mean to buy now).