Quote:

---

Originally posted by ILOVENA

I have been following rahul singh's posts, which smack of nothing but pessimism. It pains me to see such a disheartened, pessimistic person, who sees nothing but darkness, and the doomsday ahead. This is not a personal attack, but a expression of anguish.

People like rahul in the name of \"logic\" would like to tell you that no matter what you see, feel or hear, nothing good can happen (and all you see is unreal). I personally fail to understand what he wishes to achieve by telling you that every person who has a mortgage is financially a loser, that the appreciation we see in real estate is not true (and if it is, will be short lived).

Does he mean to say that one should rent a basement, and live there for the rest of his life? Now this logic is wrong too, because unless someone buys a house, there will be no basements to rent!!

Going by the warped sense of logic that buying a house is one of the biggest risks of one's life, I shouldn't be doing these.

1) I shouldn't go to bed tonight because I may never wake up tomorrow

2) I shouldn't drive because I could be in a collision, and end up in a hospital bed.

3) My kids shouldn't go to school...... don't know what will happen there.

4) I should never take a flight (remember what happened to the Air France flight?).

5) I shouldn't have friends, because one of them may be jealous of me and start plotting against me.

6) I should stop breathing, because there may be dangerous gasses lurking in the air.

The list is getting bigger, by the moment.

************************************************************

Now I am really scared! I am going to join the extreme right movement or one of the fundamentalist churches. Is there anyone there, who wants to join me?

---

ILOVENA: Affordable housing and more saving for families is not pessimism.
Pessimism is when responsible people have to bail out financially irresponsible institutes and people. We all like cheaper gas, food, hotel, car, electronic, flight. So why not RE which is most expensive part of life?


1) what is affordable housing? Isn't that a personal thing, related to one's income? If I have the income to afford a mortgage at a higher rate, that's affordable to me....... I don't think we can define what \" affordable\" is..


2) Why is real estate the most expensive part of life? This again is very relative....... what is expensive to you may not seem so to another........ I know a lady who learnt to drive just about 4 months back............ guess what she drives? a BMW. She finds it inexpensive to own and maintain a BMW, which might just be a pipe dream for many.

My million dollar question to you, rahul is..................... do you have a workable plan to make real estate \"affordable\" to everyone? Don't you think that there are many factors and forces at work, that are beyond our control. Now what your perception about \"growth, hypergrowth, boom and bust\" are, will be relative to your relationship with the real estate industry........... which real estate agent would like the industry to be in the doldrums, not perform and go bust? If the real estate industry has to start booming, that would mean that houses are not going to be \"affordable\" to some. It can not be a win-win for everybody all the time.

No matter what you say, my question to you would be: do you have real solutions or just the problem to present? Do you think they are workable ?

I am sure you would have the answers.

Quote:

---

Originally posted by Blue_Peafowl

I am planing to buy house in couple of months...

Should i wait till next year ? or i should go and buy ?

As per rahul it is not a good time - i am not againts his opinion - we might see more price crash - but not sure though


Yesterday i met a very old RE Agent - the guy has been in market for 23 years ( he is retired now) - he told me this is buyer market and i should go and buy it. i asked him that chances are price is going further down in coming month. so i should wait.

in return he almost insulted me ( in a nice way) he goes u think u know to much about RE market and u r like economy experts - but u dont know anything.
so stop thinking about to much and go ahead and buy.

now my dilema is : the guy looks honest and experiance , plus he is not into the market - so he might telling truth - but then again he was RE agent so he must have soft feeling about RE person. So should i listen to him ? or should i wait ?

---

-----------------------------------------------------------------
If you have a gun, you can rob a bank.
If you have a bank, you can rob everyone.
- Bill Maher

Wow.. I don’t know where to start from this logic if dream house is bought by some one else. It sounds like House price never go down. We have seen that kind of scary logic from RE experts on both side of the border.

It seems like interest rate is affecting only one person and he can not afford but other can afford. How about your down payment can go further with lower RE price and you will have less debt to pay. More over higher interest will cut down competition from buyers who have not thing to loose.

My friend-" Debt is constant after signing the papers but interest rate varies all the time."

Low interest killed USA RE estate market... why will we be different? We have already has 15-20% lower price as compare to 2007 peak price in AB.


ILOVENA: Thanks for nice post and you explained nicely about economic cycle - \"growth, hypergrowth, boom and bust\". We are top of iceberg and ready to bust. RE market were start falling last year but Govt. brought low interest (sub-prime) innovative drug.
Let see……..How long drug affect will stay?

------------------------------------------------------------------
http://www.greaterfool.ca/

As for buying now, get an income-producing property like a duplex if you must buy. Or a smaller home further out. Or, wait. Another year of rent won’t kill you, and could in fact be the smartest financial decision possible. After all, if you get a house in a bidding war and finance it with a 35-year amortization, all of your monthly is interest – no equity. Then, what if the market drops by 5% or 10% in a year or two? No equity, in fact negative equity. Then, what happens in five years if mortgage rates double? The market will reflect that. No equity.

Quote:

---

Originally

So you wait. When the rates go up, you may not be able to afford the same house you liked before or it may already be taken. By then, the value of the house will have increased.

---

Thanks Rahul i like your logic

-----------------------------------------------------------------
'Some goals are so worthy, it's glorious even to fail.' (Param Vir Chakra awardee Lt. Manoj Pandey)

Quote:

---

Originally posted by rahul_singh23

Wow.. I don’t know where to start from this logic if dream house is bought by some one else. It sounds like House price never go down.

---

-----------------------------------------------------------------
If you have a gun, you can rob a bank.
If you have a bank, you can rob everyone.
- Bill Maher

I personally see two things in Rahul’s post:

1. Pessimism and only one thought in his mind – real estate (I do not remember him writing about anything else – not even contributing to other topics). It is his choice, but seems he is obsessed with RE, and that overshadows his power to think of other things in life for which investing in RE seems more logical to other people.

2. A thought that whoever is buying RE is doing beyond his means and one should put only 20 percent of his total earnings in RE and nothing more.

That, in my opinion is flawed. My reasons:

For point number 1:
----------------------
1. I bought a house and after owing it for 5 years, my investment is worth 30% more today. And unfortunately I had waited for three year to buy the same property – if I had bought it three years ago, my investment would have been worth almost 70% more than the cost.

2. During the same period, I bought and sold two houses – and made a return of more than 50% on my investment.

3. If I had not done that, I would have been sitting on my cash in saving account earning a paltry .5% average over the years.

For point number 2:
----------------------

How can one decide what is affordable for someone and what he/she needs to save? If I think that spending more on RE brings me more joy than providing for good food/clothes or vacation, it is my choice. If I am not worried what will happen to my mortgage if my job is lost because I know I will have financial support from some other sources (family/friends) because of my relationships with them, how can one say I should not buy something which does not leave me any savings?

When I lost my father, he had no savings – since he (over) spent on our education, housing and food – and I was still in my primary school. Still I was able to survive with help from others, and confidance in myself, and achieve good education and good jobs. And I personally am not afraid of losing my last penny, since I know I will able to come out of that again– it will simply be a testing time. By being afraid of that testing time, which might never come, I don’t want to sacrifice my great PRESENT.

I intimately know a person who had a great job and lived in a condo costing over a million dollars. He lost his great job and was jobless for two years. During these two years, neither did he come out of that expensive condo, nor started living frugally. Infact, he invested into his living and lived as if everything was great and this break had given him a chance to relax. And this all brought him a better job than he had earlier – one beyond his expectations. Why? Because he lived well, technically beyond his means, and kept the network of people from the elite class. Many noticed his confidence, and one of them thought about him when he wanted to employ a person with such confidence. So infact, living beyond his means gave him a job that brought his living very much within his means.

So Rahul thinks that one should save and save and save for the rainy day and keep hoping that one can buy RE at the lowest.

In my lifetime I have seen people live well by saving and saving and saving. However, I have seen people living extremely well (not just well) taking risks by investing, investing and investing.

Any take on that?

-----------------------------------------------------------------
Chandresh

Advice is free – lessons I charge for!!