I’m not saying you should fault anyone.. All you should worry about is your family and your own investments. The issue with the crazy housing market is people are living beyond their means. It’s not your fault if someone can’t afford an intrastate hike. If people didn’t react and pay absorbent prices for houses we wouldn’t be in this position and if now those same people go broke that’s life sadly.

I think the issue with that is the people who leveraged themselves believing it was now or never. Not so much those who actively couldn’t afford it but those who figured this was the last chance to get their family a home and stretched to do it. Those are really the only people I feel bad for

Sold for $5.25M today. I guess someone didn't mind the outdoor walk to the garage lol.

Your friend is likely right in the sense that raising interest rates will likely negatively impact most asset classes (including housing). From my observations, land prices are down <5% in the last 4 months and prices are likely to continue to go down. Will we see a massive # of foreclosures? Not a chance. Anyone who's ever worked with a bank & borrowed $ regularly can tell you that.

If he is self-employed, the biggest challenge for him will be obtaining a mortgage as banks do not look favorably towards self-employed income. Furthermore, if he actually has a big income, he should already have a down payment automatically saved up. Finally, let's say your friend has all the finances figured out. At what point will he buy in? When prices drop 5%? 10%? 20%? Or will he continue to chase prices down since he doesn't want to catch a falling knife, and then chase prices up since he doesn't want to fomo in?

Vancouver's Real Estate Market
 

You are correct about my friend’s lack of understanding of macro economics and the real estate market.

I know this friend well though. -know him for over 35 years. Yeah, you can say that I am old pasta haha.

His post production film company and event marketing businesses are doing quite well. He expanded his company into NYC before Covid.

As far as I know, his company revenues just for his Canadian based businesses are seven figures each year for many years.

His businesses are going to “survive” haha.

This friend is a big spender though. His discretionary spending would affect the size of his down payment on a house.

I know that his businesses are doing well because I have a brother who helped this friend with income tax filing for several years. Bookkeeping work.

Word gets out quick in my family.


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7 figure revenues and is renting a 2bdroom condo in the west end? What lol. I guess we should also be thanking him for keeping the small business, service & retail industry employed. He probably put a few kids through college too.

Vancouver's Real Estate Market
 

Yeah, it’s complicated. Like I mentioned in my last post, this friend is a big spender.

He also had to provide some financial support to some of his immediate family members when he was starting up his event marketing and film post production companies many years ago.


High company revenues combined with high discretionary spending and financial support of family members can put a dent into a down payment for a house.

That’s his life.

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7 figure revenues is what businesses owners like to flex when they have low 6 figure/high 5 figure salaries.
"I made a million dollars last year"
"you mean you did a million in sales or took home a million dollars?"
*silence ensues

https://twitter.com/ianjamesyoung70/...qQRe0v-3baDnfg

7 figure revenue, but also 7 figure expenses :troll:

Renters are also going to be extremely disappointed when they find out that none of this will result in lower or stall rents, rents are gonna go up with the cost of a mortgage and when those rates inevitably come down, no way in hell are those rents gonna drop.

And even that might not be enough money :pokerface:

^^ water front views at crab park is free, you can sleep in the back of a type r :pokerface: you can probably stir up some live hobo fights for entertainment for a few bucks, then live stream on YouTube ??? Profit :lawl:

Looking at the current rental market is $3,000 - 3,500/month 2 BR condos at Brentwood. Curious if anyone is renting it.

I had lease that was $2,300/month + utilities, would've been nice to sublet it now.

Was talking to my neighbour, his daughter & her friend were trying to rent a 2bd condo @ lougheed/burquitlam and landlords were asking $2800. But because they had a small dog they couldn't find a place...

Where I am in SW Coquitlam, a 2bd basement suite is now $2000... up ~20% since winter.

I'm seeing 2 beds for for $2000+ in Surrey near the skytrains. $3000 is a lot but doesn't surprise me anymore sadly

That's value, but Surrey is so far to commute. All my friends who grew up there see it as the norm though.

I was taught a long time ago, the bank would prefer to see a business that makes 15 points on $1 million of sales than a company that makes 5 points on $10 million in sales.

I have a feeling pasta's friend also doesn't understand that. As an example he probably passes all event rental bookings or event spending expenses through his business, even though the client directly pays for all of them and they likely dont get marked up. This dilutes his revenue to profit ratio.

You should only incur costs on your books if you are allowed to mark up those costs. The same way I dont pass purchases of equipment for my clients through my books, the client just pays for them directly, and I manage the sale. The client isn't going to accept a markup of 10 or 15% on the purchase of $30 million bucks worth of yellow iron, so while I could pass that purchase through my books, it would still mean I dont make profit on it, which means it would dilute my revenue to profit margin so fucking much the bank thinks I basically can't grow a business while still making money.

EDIT: just to clarify this is just a guess. Or maybe buddy just spends a lot on hookers and blow.

The trick of living east of the Fraser is staying East of the Fraser River. I cross a bridge maybe two or three times a year, slightly more if my son has some sporting event I'm attending. I'm at the point of my life where I would not accept a job that wasn't on this side of the Fraser River.

I used to go to Vancouver so much with my last job, I was driving an average of 200 KMs per day all around the lower mainland visiting different job sites, not going to do that ever again lol.

the worst is when people have a small business and give themselves the title of CEO in their email signatures or business cards. like dude you have an etsy shop selling cat toys

Bro.. I went to HS with a guy, the guy lives in his parents basement still at 37, he has like some sort of audio company or sonthing irrelevant.

On LinkedIn he is the CEO and VP of 2 separate companies…. Bra..having a business licence you’ve never filed income under don’t make ya the CEO of the basement ffs..

what if his 2 bedroom rental is also an office

business expense

:troll:

Why would rates come back down in 2025 .. ? what do you see in your crystal ball

I don't see rates going that high, cuz eKoNomiEz. Look at how bad it was when we closed for like 3 weeks, restaurant shut downs. The gov can report whatever inflation numbers, but real inflation as we see it is much higher. Just look at gas prices, food price increases.

The economy we have at this point cannot support this level of interest, it is just too weak we literally just started the reopen. Remember how desperate the gov was to reopen cuz economy > health? Best summer ever? :lawl: The gov themselves will have to pay more on higher interest payments themselves with invisible money that they don't have.

This will eventually hit but regular people are being fucked on both ends, higher prices, higher taxes because we pay higher prices, plus higher cost of living due to higher interest rates. So people will naturally have to spend less buy less things cuz they have less money in their pockets, stonks are down.

And what does less spending mean? Less sales and smaller profits for businesses, ppl get laid off, bam the death spiral begins. Tech companies are already firing ppl, Tesla, crypto companies. These are educated ppl that earn big bucks to support the economy not the hurr duur mah rights and protest on a ladder in front of a tunnel and bridge type.

There are literally two easy ways right now to stop inflation

A. Lock down for a month China style, = no spending no demand.

B. Unsanction Russia. Remember it's not Russia not selling us oil and what ever. It's Western world on their high horse thinking they are all politically better than others choosing not to buy their oil. And we're too good for pipelines cuz they for poor people. Maybe we can fill our cars and heat our houses with those extra vintage virgin extra aged old growth trees we have :lawl::troll::troll:

Yea basically we fucked ourselves over, we had the chance but due to mismanagement of our resources, our love of this imaginary feeling of saving the environment this is the price we pay. We can just give a big tree to each person that becomes homeless. :pokerface: our great government supports you