patrick.net

They taste like bacon, or so I've heard.

The great immune Canada, which has been held aloft as much by the Fed buying up bad securities as California, sees slowing demand just when the US bulls are counting on recovery.

So is speculator money moving to us from Canadian opportunities? Why are those speculators so convinced that real estate will see better performance than other investments? Just because they believe OTHER investors also believe?

I love this paragraph:

Like a domino, if it topples, it triggers a chain reaction. Construction jobs are lost, household net worth diminishes, confidence drops and consumers start cutting back on other spending. On top of that, with families already highly indebted, defaults will almost certainly increase and lenders, such as banks, could find themselves taking enormous losses, dropping equity values, leading to tighter credit and slower growth. And on it goes in what economists call a re-inforcing negative feed-back loop.

Income to purchase price (adjusted for interest rate and funky loan packages) can only become obsolete when mortgages become obsolete

I think Canada must be in a bubble simply because HGTV suddenly has based a ton of shows in Canada showing average middle class people buying 800k homes that are old and beat up.

theoakman says

I think Canada must be in a bubble simply because HGTV suddenly has based a ton of shows in Canada showing average middle class people buying 800k homes that are old and beat up.

There was one episode of "love it or list it" where the owner remarked that his house had tripled in value in 10 years.

I left Canada in 2010 as I realized that I would never be able to afford a respectable/decent SFH even though I was in the top 90% income bracket. I simply could not compete with all the foreign money and the previous decade real estate lotto winners. IMHO what really points to a bubble there is that the rent to mortgage ratio is completely out of whack and does not support the prices. When you can rent a 1.5 million dollar condo/sfh for under 3K/month, you know the home is way over priced.

Buster says

When you can rent a 1.5 million dollar condo/sfh for under 3K/month, you know the home is way over priced.

Sounds a lot like the SFBA to me.