Home sales dropping because of higher interest rates

[fluffy]

I think they'll raise rates again.

There is certainly no shortage of economists predicting just that, that the BoC will boost interest rates again come the next review date on June 07, citing inflation and debt load concerns. They are worried about people's ability to absorb payment increases as many will see mortgage payments rise 20% to 40% as mortgages are renewed over the next few years.

https://www.theglobeandmail.com/busines ... -payments/

[Mazdatruck]

Bankers starting to panic. They can't sell people mortgages when houses are selling for 12 times the yearly average salary in Canada.

All the old boomers are trapped because if they sell their million dollar retirement plan they can only afford a cardboard box to move into. Real estate stagnation.

[rustled]

All the old boomers are trapped because if they sell their million dollar retirement plan they can only afford a cardboard box to move into. Real estate stagnation.

I don't understand this. If a boomer sells a million-dollar home, why would that boomer only be able to afford a cardboard box to move into?

[Even Steven]

This province/country is so screwed.

[Mazdatruck]

All the old boomers are trapped because if they sell their million dollar retirement plan they can only afford a cardboard box to move into. Real estate stagnation.

I don't understand this. If a boomer sells a million-dollar home, why would that boomer only be able to afford a cardboard box to move into?

They bought a 4 bedroom double lot house for 120k in West Kelowna in 1990. Today they are selling for 1.5 million but in order to move anywhere close to what they are used to, their entire retirement wad from the house sale will get spent.

They can get a small condo for 600k with $500 dollar monthly fees if they move no room for any toys they get a cubby storage locker that can fit suitcases and xmas decorations. Retirement funds cut in half, quality of life diminished significantly.

This is why there is a lack of stock. 60-70% of houses in Toronto Vancouver and Kelowna are completely paid for bought at times when a house was very reasonable. Housing is no longer reasonable at all so anybody that sells is forced to buy into the Ponzi at Peak prices.

That's why everybody's just staying put.

[rustled]

I don't understand this. If a boomer sells a million-dollar home, why would that boomer only be able to afford a cardboard box to move into?

They bought a 4 bedroom double lot house for 120k in West Kelowna in 1990. Today they are selling for 1.5 million but in order to move anywhere close to what they are used to, their entire retirement wad from the house sale will get spent.

They can get a small condo for 600k with $500 dollar monthly fees if they move no room for any toys they get a cubby storage locker that can fit suitcases and xmas decorations. Retirement funds cut in half, quality of life diminished significantly.

This is why there is a lack of stock. 60-70% of houses in Toronto Vancouver and Kelowna are completely paid for bought at times when a house was very reasonable. Housing is no longer reasonable at all so anybody that sells is forced to buy into the Ponzi at Peak prices.

That's why everybody's just staying put.

Most boomers I know who are selling the family home are not looking for something similar to what they're used to, though. They're downsizing, getting rid of stuff (our "kids" don't want the family heirlooms) and looking for smaller digs with no maintenance they can be away from for weeks at a time - not another family-sized home on a large lot.

And most are not solely relying on the sale of the family home to finance their retirements. I wonder if the boomers I know are the exceptions? It would be interesting to see some stats on that.

A retiree here with a million-dollar property could easily sell and relocate to a much less expensive market, have a small base property on which to store the toys, and still have $$ for travel and fun stuff.

[LeroyJ]

They bought a 4 bedroom double lot house for 120k in West Kelowna in 1990. Today they are selling for 1.5 million but in order to move anywhere close to what they are used to, their entire retirement wad from the house sale will get spent.

They can get a small condo for 600k with $500 dollar monthly fees if they move no room for any toys they get a cubby storage locker that can fit suitcases and xmas decorations. Retirement funds cut in half, quality of life diminished significantly.

This is exactly what down-sizing is... no longer wanting what they had and getting rid of a bunch of stuff... lol.

[countmeout]

They bought a 4 bedroom double lot house for 120k in West Kelowna in 1990. Today they are selling for 1.5 million but in order to move anywhere close to what they are used to, their entire retirement wad from the house sale will get spent.

They can get a small condo for 600k with $500 dollar monthly fees if they move no room for any toys they get a cubby storage locker that can fit suitcases and xmas decorations. Retirement funds cut in half, quality of life diminished significantly.

This is why there is a lack of stock. 60-70% of houses in Toronto Vancouver and Kelowna are completely paid for bought at times when a house was very reasonable. Housing is no longer reasonable at all so anybody that sells is forced to buy into the Ponzi at Peak prices.

That's why everybody's just staying put.

I don't think you understand how ratios work.

Why does it work better I'm your mind if they sell for say $500,000 instead of $1.5 million? Wouldn't they just have less money and still have to buy a condo?

[Mazdatruck]

Nobody is downsizing because when they sell there is very little inventory and prices are jacked to the brim.

People are holding out and waiting for a price correction to downsize just like first time buyers are. The downsizers want the HIGHEST price when they sell and when they downsize they want LOWEST possible price which just is not happening in 2023. Literally in a financial conflict with themselves!

Most boomers I know who are selling the family home are not looking for something similar to what they're used to, though.

People want to downsize but how much house they get with their money has been severely reduced and many do not want to spend 5,6,700k on a CONDO with very high fees. Their house sale profits is all they have. They dont want a large house but paying that much money for a tiny little plastic and tin condo is out of the question - so they stay put and they are "trapped" so to speak.

These people could never re-enter the market with their wages and pensions all they have is that giant wad of cash from the house sale which gets eaten right up and devalued massively as soon as they re-buy at 2023 prices.

THIS IS THE REASON THERE IS NO INVENTORY.

Nobody is selling because the re-buy market is so grossly inflated and they don't have to sell.

A retiree here with a million-dollar property could easily sell and relocate to a much less expensive market

Is a small condo in the prairies worth more than half of large house with a view in Kelowna? That's quite the downgrade to ones quality of life for more than half of the value of your life here in the Okanagan.

Rents up +42% YoY in Calgary. Are we suggesting the far north now for retirees?

And most are not solely relying on the sale of the family home to finance their retirements. I wonder if the boomers I know are the exceptions? It would be interesting to see some stats on that.

The numbers are pretty clear. Pensions are a thing of the past and the reason that the Canadian Government is protecting and artificially inflating house prices is exactly this. Most Canadians do not have a savings or pensions and the family home is the ONLY way they could have ever got ahead. They even specifically said this in the last federal election :

"Yes we want afforable housing - but - most Canadians retirements depend on the sale of their family home"

Our whole economy depends on it.

[rustled]

Well, at least the terminology has changed from "cardboard box" to "a tiny little plastic and tin condo".

Nothing's really changed re what every homeowner who wants to sell and buy in the same market has always faced when they're fortunate enough to already own in an inflated market.

And people who live here, retirees included, have the option of selling in an inflated market and buying in a less desirable one. Less desirable doesn't mean "the far north".

IMO, when the point can't be made without exaggerations like we're seeing in that post, it's not much of a point.

Canadians retiring without company pensions is nothing new, and I'd like to see proof "most Canadians retirements depend on the sale of their family home" - this certainly doesn't ring true. It's likely part of the same "the government must do something" narrative.

[Patron]

it's just plain common sense, if the home prices are high all across the board which they are here, doesn't matter what type of home, then selling high means you'll be paying a high price when down sizing

condo's, townhouse, mobile homes are not cheap here anymore and some strata fees in some places are as high as a mortgage payment

and retirees usually start having health issues so living in tim buck two with bad healthcare or an ER that has to close every weekend and travelling an hr or 2 to a bigger city for your healthcare needs doesn't seem very appealing

[Mazdatruck]

it's just plain common sense, if the home prices are high all across the board which they are here, doesn't matter what type of home, then selling high means you'll be paying a high price when down sizing

condo's, townhouse, mobile homes are not cheap here anymore and some strata fees in some places are as high as a mortgage payment

and retirees usually start having health issues so living in tim buck two with bad healthcare or an ER that has to close every weekend and travelling an hr or 2 to a bigger city for your healthcare needs doesn't seem very appealing

Generally when Canadians retire they want to move to larger cities with medical services and better weather.

There goes that retirement wad on a little cardboard box plastic and tin condo.

Hence they stay put and there is no inventory.

To sum up the housing bull factoids :

- new homebuyers in Canada need to move to small prairie towns with harsh winters
- retirees need to move to small prairie towns with harsh winters
- everyone else that owns earned/deserves where they are
- nothing has changed in Canadian real estate in the last 20 years. It's just like it's always been, ignore the numbers.

[Patron]

have friends who lived in Princeton for most of their lives that sold there because the hospital there is a joke and travelling to Penticton twice a mth for doc appointments cost them lots for fuel ( 3 hr driving times there and back) and of course when it's bad weather it's white knuckle driving and some seniors can't handle bad weather driving or simply don't like it

so they sold and bought a condo in Penticton and they hate it. No more yard/garden, lots more noise than they have ever been used to, very limited parking in their condo , had to sell the fishing boat/toys because storage costs run about a $100 per mth and they just had a fairly large strata fee increase because the building needs more work and the contingency fund has to be a healthy size for major reno's like carpeting, roof etc..everything needs maintenance sooner or later

their funds from the sale of their bigger home and property in Princeton is getting quickly chewed up , but they had no real choice because they need to be around decent healthcare

[Mazdatruck]

Princeton is still without drinkable water.

These are the afforable places.

Nice country we have.

[ferri]

Home sales dropping because of higher interest rates