There are still people out there who don’t believe Canada is about to be hit by a devastating housing crisis, but Riaz Kassam isn’t one of them. For him, the crisis has already arrived.
Last July, he made an $80,000 pre-sale payment on a $1.5-million penthouse condominium in Vancouver’s tony H&H Yaletown building, just a few blocks away from where he lives. Kassam, a 42-year-old computer analyst, who’s married with no kids, expected to move in by the end of 2008. But when he put his current apartment on the market, he didn’t get a single offer. He thought maybe he had priced it a little high, so he knocked a bit off. Still, no offers. He lowered it again, and again, until eventually he was offering his apartment for a full $120,000 less than his initial asking price. That’s when he realized he was in trouble. “We reached the point where we couldn’t drop the price any more,” he says, “or we wouldn’t have enough for the down payment on the new property.”
He was caught between a rock and a hard place. Nobody would buy his condo, and therefore he didn’t have enough money for the down payment on the condo he’d already agreed to buy. “We told them that we can’t complete, we can’t sell our place, and we’d just have to forfeit our $80,000.”
ALSO AT MACLEANS.CA: What kind of house can $500,000 buy you? and Attack of the condo craters
Painful enough, but it was only the beginning. Kassam discovered that even if he had sold his old apartment, his bank “wouldn’t even consider” giving him a $1.5-million mortgage for his new place. Prices in Vancouver had been plummeting, and in just a few months, the assessed value of his new place had fallen to roughly $1.2 million—and his bank wouldn’t issue a mortgage for more than the property was worth. Meanwhile, the condo developer was finding that it couldn’t sell its units either, at least not for anything close to the $1.5 million Kassam had agreed to pay. So it held a “blow-out sale,” offering units for as much as 40 per cent off the original listed price. Kassam’s unit wasn’t one of them, but the sale made it clear that his penthouse was worth even less than $1.2 million. Shortly after Christmas, the developer told him he was liable for the difference. He had signed a pre-sale agreement saying he would buy that condo for $1.5 million, they reminded him, and they reserved the right to pursue him for the drop in that condo’s value. Which means they’re probably not just going to keep his $80,000 deposit. They’re probably going to come after him for more than $300,000.
Kassam thought he’d be settled into his gorgeous new penthouse by now, but instead he’s still at his old place, facing a long and expensive court battle with the Bowra Group, owner of the H&H Yaletown. He’s planning to strike first, with a lawsuit alleging that the developer didn’t deliver his unit on time, but he’s not sure he’s going to win. If he doesn’t, “our nightmare begins,” he says. “It’s going to be devastating if we have a judgment against us.”
Kassam is just one of thousands of people getting buried in the rubble of Vancouver’s collapsing prices; a dream market has turned into a nightmare, faster than anyone thought possible. For over a decade, the real estate industry has pumped out glowing reports, detailing the latest surges in prices and transactions, and predicting nothing but blue skies ahead. The heady combination of a strong economy, urban renewal and low interest rates triggered a stampede into houses and condos. Now the boom is shifting into reverse, and economists are warily backing away from their sunny predictions, and grappling with a question no one has posed for 20 years: how bad is it going to get? It’s becoming increasingly likely that the answer to that question will be “even worse than you imagined.”
The H&H Yaletown has now sent out several warning letters to buyers in retreat. Another developer, the Onni Group, is actively suing at least 20 purchasers of its Aria 2 development in Port Moody for backing out of their pre-sale agreements. Real estate developer Amacon is suing seven purchasers of its Morgan Heights development in Surrey for the same. Condo fire sales are raging—the Onni group has been taking out full-page ads in the local papers trumpeting “Vancouver’s largest real estate liquidation event”—and John White, a Vancouver lawyer representing several retreating buyers, says he now gets about “two or three calls a day” from people who have issues with their contracts.
“No one even came close to realizing the impact of this crisis,” Kassam says. Back when he signed the pre-sale agreement, he was following the news, and “they said the real estate market was slowing down, but they were only predicting maybe a one or two per cent drop in property values—nothing to this extent.” But Kassam has learned that you shouldn’t always believe what you read in the papers and what the economists say on TV. Especially now, because despite the carnage in Vancouver, many economists and real estate groups are still predicting that we’ll have just a little stumble—maybe a drop of three to eight per cent in prices—and then the market will roar back to life by the end of the year. But new data on the plunging housing market suggests that those relatively upbeat assessments are wrong, and Canada could see a 20 per cent drop in average house prices between now and late 2011. If sophisticated investors are correct, it might be close to a decade before we once again see prices as high as they were last summer.
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Realist said “Feb 25, 2009 at 11:21 pmReport AbuseWow..this is so pathetically ultra left wing Canuckistanian! To all of you lefty loser living in someone elses basement suite, concrete coffins or are just anti anyone that wishes to better their families future etc. etc. etc. Stop screaming that “the worlds coming to an end” because it isn’t! Your all a bunch of chicken little wannabes fresh off the protest line..or some other line for that matter. If you want ”
Dooood… take a chill pill. How underwater are you on your specuvestor purchases? You’ll be even further underwater this time next year. Maybe put some of that negitive energy towards dumping whatever you got before you lose even more. kisses and good luck!
How about we take an ACTUALl look at what CREA really said in their most recent media release (before the media gets their hands on it and twists it to what sells papers and magazines). I think most would agree that they are providing a pretty realistic and accurate view of what is happening out there.
I grabbed this from their website:
MLS® home sales to decline further in 2009, rebound in 2010
OTTAWA – February 9th, 2009 – National MLS® home sales activity is expected to
decline in 2009 before rebounding in 2010, according to a new residential housing
forecast prepared by The Canadian Real Estate Association.
National MLS® home sales activity declined 17.1 per cent in 2008, and MLS® sales
activity is forecast to fall an additional 16.9 per cent to 360,900 units in 2009. This would
be the lowest level for national sales activity since the year 2000. Sales activity is
expected to decline from levels set in 2008 in every province, led by declines in British
Columbia, Alberta and Ontario.
National MLS® home sales activity is forecast to rebound by 9.9 per cent to 396,600
units in 2010, marked by an acceleration in activity in the second half of that year. The
rebound in activity in 2010 is forecast to be biggest in British Columbia and Alberta.
New listings on the MLS® systems of real estate Boards in Canada have been trending
steadily lower since peaking in the second quarter of 2008, and that trend is forecast to
continue. It is that combination of rebounding sales activity and fewer new listings that
will stabilize the MLS® resale housing market in 2010.
“We are caught in a cycle where consumer confidence has been eroded because of job
losses, and consumer confidence is an essential ingredient for housing sales activity,”
says the President of The Canadian Real Estate Association, Calvin Lindberg of
Vancouver. “And housing activity helps creates jobs.”
“The essential selling ingredients in today’s market are realistic pricing, marketing, and
preparation. There are potential buyers making inquiries, but the barrage of economic
news makes them much more cautious than before.”
The MLS® sales forecast developed by CREA Chief Economist Gregory Klump shows
that fewer transactions in some of Canada’s more expensive housing markets,
combined with reduced asking prices, will continue to put downward pressure on
average MLS® sale prices.
The national MLS® average home price is forecast to decline eight per cent in 2009,
with prices down most in Western provinces and Ontario. By contrast, the average home
price in Newfoundland & Labrador is forecast to rise 4.8 percent in 2009. Prices are
forecast to stabilize in 2010, with annual price increases of one per cent or less in five
provinces.
The price trend is similar but less dramatic for the weighted national MLS® average
price, which compensates for changes in provincial sales activity by taking into account
provincial proportions of privately owned housing stock. The weighted national MLS®
average price is forecast to decline 6.4 per cent in 2009, and hold steady in 2010.
Page 2
“Increasingly cautious homebuyers and mortgage lenders means that active listings will
take longer to sell in 2009 compared to previous years,” said CREA Chief Economist
Gregory Klump.
“The national housing market is recalibrating due to weak sales activity,” said Klump.
“Supply will take time to adjust to lower demand, but sellers unwilling to accept offers
below their expectations will remove their home from the market,” he added. “Fewer
active listings reduces buyer choice, and in time puts a floor under prices,” CREA’s Chief
Economist added.
HAHA…”recalibrating”… that’s what they are calling it now are they. Dream on. The excrament has only started to hit the air conditioning device. Do you really think all these people losing everything have the option to just take their home off the market? Well keep buying into the blather from the real estate industry. I didn’t hear you complaining when that darn media was hyping real estate long after the bubble had burst. If anyone thinks this is all gonna turn around in another 12 months or so you must also assume the millions of decent jobs that have disappeared forever from this country are magically going to reappear. People working at Wal-Mart(and that’s about the only place hiring) can’t afford to buy anything. Cheers.
One of the greatest mids of economics gives you reason after reason and yet, you sheeple continue to burry your heads in the sand.
Don’t come back on here crying about how you never saw this coming. Pick up a book and do some homework. You sheeple think you know it all, don’t you.?
“The dumbest people I know, know it all.”
Good luck! You will all need it.
[...] read this article today and thought well everyone knows that Vancouver’s real estate market, especially the [...]
Oh I love Albertans, especially Alberta Real Estate industry… hanging on to the 06 bubble just like Flames’ fans keep hanging on to the 04 run… Edmonton and Calgary are in MELTDOWN, like it or not. This article mentions 20% further decline by 2011, for Alberta it will be 2010. Did you see the article in March 13 Calgary Herald business section, Alberta will be the worst hit by this economic crisis, according to experts at RBC… Good luck Alberta realtors, find new work, maybe cleaning up those tar sand tailing pools up north, haha, the Sun has set this real estate market.
[...] long Maclenas article, “The shocking truth about the value of your home,” about the housing crash in Canada is mostly just more of the same, except for an especially [...]
First of all, if you are purchasing a 1.5 million dollar condo, you should not be looking for a 1.5 million dollar mortgage. The 80,000 he put down is only 5%. Why in anyone’s right mind would they put 5% down on a $1.5 million dollar place. This is what got America into trouble in the first place.
Secondly, why would anybody purchase a place firm without knowing exactly what he will have from selling his place?!?!? unless they have the ability to carry two places at the same time. Common Sense here….
You cannot arbitrarily ask a certain price for a property basing it on the amout you require to close the next transaction. The public is well educated and will only pay the current market value for a place.
I think this fellow dug his own hole……. This is definately not the norm….
Come on McClean’s, don’t make a story out of this portraying this as the real estate climate in Canada. This is an isolated case of one greedy individual who obviously tried to live the high life but could not afford it!
This is a brilliant article. I have been telling my Canadian associates about the problems with the housing sector. Canada is not immune from a housing bubble similar to what burst in southern California.
In Winnipeg , the Provincial government, (NDP) gave the City of Winnipeg permission to re assess the housing every two years . This is not right . The City and the Province have to learn to pay their bills and live within their budgets just like the poor Tax Payers of this City and Province.
“Last week, for instance, the Canadian Real Estate Association (CREA) predicted a drop of just eight per cent in 2009, followed by a speedy recovery that would see prices starting to edge up again in 2010.”
Monkeys. When will they finally round them up and take them back to the zoo?
[...] Read the rest of the story… [...]
It is still unclear to me why everybody is so concerned about Mr. Kassam. He apparently owns four more high end rental apartments in Vancouver downtown area. He can just sell one of those apartments and pay for his penthouse. It’s weird that they found just this guy to provide an example.
That house prices became overheated is well known, what effect the drop in employment will have on housing will take some time to realize. One would suspect that many of the people laid off in the past three months are still able to function with EI and savings/credit etc., once the EI support, savings and credit runs out, and the new job doesn’t offer the same level of pay, only then will we know where the market is going. Logic would dictate down! For example many of the jobs being lost in Ontario (38% of Canada’s population and 41% of GDP) are highly paid and provide much discretionary income. This loss will depress spin-off jobs, leading to further lay-offs and further reduce the amount of potential home buyers. The economy will eventually stop receding, however new job creation will take additional time to kick in, and in the face of a higher Canadian dollar created by the global demand for Canada’s resources, it is unlikely that we will see a replacement for the high paying jobs lost in Ontario. As house prices reflect what people can afford, lower wages will mean lower prices. The assumption that house prices will remain flat for an extended period seems logical and most likely underscores a new reality for Canada. Given that the largest employer in most provinces are governments and these are paid for by value added workers such as manufacturing, low housing prices may be the least of our worries. My $.02
This is exactly the point I have been trying to make here with people who just refuse to face the truth. As I have said, economists, real estate people and other “experts” who explain very earnestly that prices will “recalibrate” in 12 months or so must also assume the millions of good jobs that have left Canada forever to be done in third world hell holes will magically reappear. Give your hear a shake. They are not. As you point out the fallout of this mess hasn’t even started yet. wait till people’s savings and EI run out.
The larger picture here that the “rose colored glasses crowd” refuse to fess up to is the fact that to have these insane prices you need a middle class population able to pay them. Middle class and then some. The truth is, it has been a long time coming, but in the new global economy, the North American middle class is no longer required and the corprate greed heads have trown them overboard as uneccessary baggage. I’m not sure who they think will now buy their poisionous crap from China. I hear these people were just stunned when the economies of China/India have also come to a grinding halt. Considering those poor buggers working in these hell holes don’t have enough money to buy toilet paper, that leaves no one to be a “consumer” or house buyer for that matter. Cheers.
So much for being able to retire on a nest egg that was founded by real estate. We were told countless times that you can never lose money on real estate. Well, surprise surprise; twenty percent this year and another forcasted fo next year. That will be almost 50% in two years- and like a bad stock people will want to dump their overly high mortgages and ditch living in Toronto for the burbs and once again add to the traffic and pollution of the commuter population and Toronto will become a ghost town of boarded up homes and multilevel rentals and turn back into the crappy neighbourhoods that had finally improved over the recent decades – when people preferred living closer to where they were working and enjoying the benefits of city living. A warm welcome to all new red necks and welfare cases and newly landed immigrants- Toronto can once again become your dicrepid, decaying playground just like it was over a decade ago. Glad to have you all back.
Personally I hope that real estate prices continue to plummet until regular folks can afford to buy an ordinary little frickin’ wooden house without paying 50%-80% of the combined gross income of two working professionals just to keep up on mortgage payments. Prices in Vancouver, a city I left nearly a year ago partly because it was obvious I’d never be able to own even a doghouse there, were (and still are) completely insane. In most other cities in Canada, they’re just crazy.
Moreover, I think realtors ought to get paid about as much as baristas on a per-hour basis for the oh-so-arduous task of driving around showing houses to people, with a small additional flat fee of less than $1,000 for getting the paperwork done on a sale. Giving them a percentage of a house sale is essentially giving them a percentage of a person’s lifetime effort at earning a living, and it’s a key cause of house price inflation (every time a house or condo flips, there’s built-in inflation of several per cent just to pay the damn realtor for doing a little driving around and paperwork-filing). The people who actually build the houses — carpenters, drywallers, plumbers — earn their pay. A guy who goes around opening doors for people and chatting them up should never get paid as much as a tradesman who does real work requiring actual skills. It’s time to replace realtors with online free listings, “key boys” and flat-fee notaries; together, such a package would allow us to get rid of these inflation-causing parasites altogether. Have a nice day.
The problem these days is people don’t want to do research for themselves. It is easier to just believe what those “inflation-causing parasites” aka realtors tell you. I come across so many people who believe the nonsense that the mainstream media feeds the general public. People have to learn to seek out information from sources that aren’t mainstream. It is time to wake up, educate yourself and stop blaming other people, no realtor, banker, or lawyer every forced anyone to sign a contract, it was done entirely by free will. There are always frauds and misrepresentation out there, buyer beware! Unfortunately this is the world we live in.
Time to wake up as a society and pull our heads out of the sand. We are going to experience a financial and economic crisis that many of us have not seen in our lifetime. Don’t let the mainstream media form your opinions and beliefs, form your own opinions. Everyone acts like a bunch of sheeple (definition: people that are like sheep and follow the herd).
The fear mongering on this blog is mental……1982 was wayyyyy worse than this.
We had 18% mortgage rates !
You kids don’t know what a crisis is.
This is nothing but a blip……if you’re worried, pay off your credit lines and credit cards….the rest will come around.
And if you’re only putting down 5% you deserve what you get…..in any market….good or bad.
I,ve been reading as much as possible on the market and its state of “well or not so well being” and what I’ve found is all the reports have a hidden agenda behind them. Now, as a layman (electrician not realtor or hot shot businessman) I agree that realtors are way overpaid. The ambitious ones are making (or were making ) huge money for doing not alot of work and they pat themselves on the back all the time when all they did was take an about 3 month course and were off. The guy I work with (and yes I’ve had thegood fortune of taking advantage of the crazy market that was) is currently calling me quite regularly to tell me about this property that “He really likes” but won’t buy himself while he sold his house and is now renting…What does that tell you?
Hey Maclean’s
thanks for publishing a balanced article. I’m sure the fact you don’t rely on real estate advertising helps, but couldn’t you have published something like this a year ago.
Also, for anyone hassling Scott Simmons on Salt Spring, I can say I don’t know him personally, but he has been taking the same open-minded approach for a couple years, in acknowledging prices are too high in various public forums like Realty Talks. Give the guy some credit for that. Not all realtors are busy spinning the market situation to the disadvantage of the buyers – though I admit todays’ release of February 2009 numbers by the Victoria Real Estate Board full of spin…
RE/MAX has taken it right back to this article.. Download the copy of the letter sent by RE/MAX to the editor….
It is articles like this that will cripple consumer confidence and I want you to know that you have my commitment to ensure that as Canada’s leading real estate company, we will continue to challenge the media with this type of reporting. http://www.remaxoa.com/09/regional/macleansletterfeb2009.pdf
canadian homes right now are a true bargain, and this will only get better for home buyers at the end of 2009.
No, homes right now are not a true bargain. Compaired to what? Not to worry though. They soon will be. I have just read on another site that for all intents and purposes the steel industry has been shut down in Hamilton. Bet ya homes are gonna be a real bargoon there when everyone’s saving and EI run out. Only problem is…you gotta kind of have a job to get a morgage. Oooops, guess the “experts” couldn’t see that one coming either. Cheers
Perhaps all those losing these “great” jobs should have considered the fact that it was relatively clear 20 years ago that the future of the Canadian economy was not in over-waged and manufacturing, but in the service economy.
Those who I know that pursued a post-secondary education and are able to participate in the knowledge economy or those who gained a viable skill set (i.e. they can fix things that are broken) tend to have relatively stable and secure jobs. In fact, despite the doom and gloom, several of these sectors continue to face worker shortages…such as a shortage of auto mechanics in NB.
Those who appear hardest hit by the correcting economy are those that felt they should be able to make as much or more than such workers, while investing less time and effort in their career paths. The easy fast road is not necessarily the best road.
The others who are suffering are those that felt there was nothing wrong with leveraging themselves to the point where they had little to no discretionary income. While living pay cheque to pay cheque may have seemed fashionable, we should all think twice about such lifestyle decisions.
Nevertheless, the lesson of the story should really be that if you need not sell right now, don’t — and if you must, chances are you will also buy a new place at a reduced price…if the value of my house has dropped by 5, 10 or 20%, so has that of my neighbour’s who I would need to buy.
[...] against housing price declines. Initial betting on the forward market showed expectations of a 20% drop in housing prices, and seven years for prices to [...]
Its a great time to buy a home. Interest rates have never been lower. There is lots of selection and people have to live somewhere, so rent if you must but its still better buy your own place if you can afford it. Vancouver Island has the best climate in the country and our prices here are very affordable. With the downturn, we are seeing prices for modest starter homes in the 250-275000 range again. I agree it got out of hand and I for one am happy to see it this bubble pop so we can get back to more normal levels of business. For those of you who think that it was the realtors who created this think again. Many consumers benefited from the increase in equity and for those that manage their money and lifestyle well, it should not be a problem. For those that overextended themselves its now time to pay the piper. For the ridiculous insane prices of property in places like Vancouver, thats the price you pay to live in a big city. Yes I am a realtor and have been one for almost 30 years. Many, many of my clients have made money speculating in the real estate market and some have lost as well. Thats life! Get over it!
[...] because we want a home, not because we think our plot of land has some kind of future value. In this article from Maclean’s magazine, we learn of the freefall in prices, specifically in Vancouver. I am [...]
Lets’s put some reason in this. We pay hundreds of thousands for houses made of wood, gypsum and paper and we still believe these are “bargains”? The Canadian house is just a glorified barn, please ask anybody who had the chance to see how Europe builds (even the East), we are decades behind and we have no clue what quality means.
To the best of my knowledge no realtor or builder has ever forced anyones hand to sign an agreement to purchase or an agreement to sell. You are not mandated to use a realtor for the sale or purchase of your property. For some people they require a realtor to do the research for them, help them make an informed decision, protect their best interest, and the list can go on. For others, who perhaps have more time and knowledge, they do not require the services of a realtor. That’s fine by me.
I am a realtor. I work very hard helping people. I will admit some transactions do proceed smoother than others but it’s not just about driving people around, showing them a few houses, and doing paperwork. On average I show each buyer approximately 30 homes. The highest amount of homes I’ve shown to buyers is 97 homes. Am I complaining? NO WAY. Realtors who are doing their job negotiate, do leg work in advance, provide statistics that are not slanted, help purchasers and sellers make an informed decision, deal with emotional people & diffuse tense, volatile situations. Not to mention take on an enormous amount of risk brokering the deal. It’s not a 3 month course to become a Realtor. More like 18 months to 2 years. Not to mention the continuing education MANDATED by real estate associations.
I am the first to admit to all my clients that no one really knows what values are going to be in the future. We can only speculate. Presenting the positive and negative facts in an honest and non slanted way is responsible and looking out for your clients best interest. The fact of the matter is, it’s not a very nice economic state the world is in right now but there are still opportunities out there for everyone. Here in Toronto, some homes are still selling over asking price much to many’s disbelief while most are getting close to asking, and some selling for significantly under asking. There are always curve balls in every market. In my opinion, the market is doing exactly what it was designed to do, correct itself.
Realtor that cares,
that is one of the most intelligent posts of the week. I too care for my clients and work hard for them. For those people that have been slinging mud at realtors take a look in the mirror and clean off your own face. We are not to blame for the current state of affairs. Our market on Vancouver Island is doing quite fine. We are having a modest market correction but all in all things are holding up quite well.
You people just aren’t getting it….. Canadian real estate does go up and down, and there always is a buyer and a seller… people buy and sell for many reasons, but they also need a roof over their head…. sell to rent, rent to save, then buy, sell for profit, sell at a loss, divorce, splitzo, separation, death, loss of a job, moving up, moving down, up sizing, down sizing, it is all the same and will be for eternity… the global mess may have an impact on the home psyche but that’s it! The world may be going to hell in a hand basket, but you still need a place to live! If they aren’t building anymore, you can bet your sorry little butt that home prices will remain relatively the same… up or down 10 or 30 percent… who cares! We are not over mortgaged like the US, and even if we were, we have less than a tenth of their problems…. and more of what the world will need from our resources: which is more than any other nation on this planet! So stop playing the harbinger, and set your personal perspective/heights in a more positive light!
Who cares if your home’s market value is less than what it was two years ago, it will rebound! Stick it out!
You want to rent for the rest of your life? Then you better prepay your cemetery plot now!
As a speculator Mr. Kassam Failed in many ways… overpricing his listing, not getting pre approval from a lending institution and putting only 5% down on a presale project. Most unfortunate is that he did not employ a REALTOR who could have told him that when the original builder went bankrupt, and a new disclosure statement was released, thus giving him 7 days to get out of the contract and all his deposit back. of course this vital information would have cost him nothing if he had hired a REALTOR
I totally agree. In addition, as a realtor I would NEVER have advised a client to commit to an unconditional purchase without first securing a firm offer on his current residence. A realtor’s services are free to a buyer and our job is to protect them from just such an incident. When people go in and deal with the developer directly one has assume whose best interests are being served. Also, it does not sound like Mr. Kassam listed his home with a realtor either (I could be speaking out of turn here since it wasn’t mentioned either way) and instead may have been trying to sell it himself. While that can be most successful in a rip roaring Seller’s market that is certainly not the case. A realtor might have advised him to lower his price immediately when he first put it on rather than chase the market down after the fact.
I stopped reading comments after a few self righteous people started flapping their mouths.
First I don’t know this guy but it’s clear from the article he wasn’t only putting $80k DOWN, he put down an $80k DEPOSIT and the rest of his equity was to come from the condo he was selling. It says so in the text of the article “We reached the point where we couldn’t drop the price any more,” he says, “or we wouldn’t have enough for the down payment on the new property.”
Furthermore, for people who think this guy is alone, you have your heads in the sand. So many people did things like this. And is he partly to blame? Absolutely. Is he solely to blame? Of course not, everyone, from bankers, to realtors, to taxi drivers, to people on the news and in the papers, etc… believed that prices would go up forever and there would always be a buyer on the other side. Well prices can only go up until people realize they’re way too high… incomes have not been going up like prices. When your housing prices are 8X income.. look out.. they should be between 3-4X income.
Wow. With the replies that I am reading we are definitely headed for a depression. I have never heard so many negative people. If everyone starts thinking this way well we will only have ourselves to blame. This too shall pass and if we start to think postive things will get better.
I am also in a similar situation and feel no one could have predicted the speed and severity of this financial crisis. However my builder is willing to work with me so that we both come out alive. Not all contractors are like this one
Dave,
Enjoy seeing the equity on your house melt over the next 10 years. You’ve been forewarned. You are what is called a “GREATER FOOL”. Get it?