Even when the Fed Funds rate does come down, I bet it'll settle at like 3%+ -- it was already 2.5% before COVID hit and all the money printing etc happened, without mentioning what's happening geopolitically that will likely drive inflation or stuff like government spending.
And the Fed Funds rate coming down also doesn't mean treasury yields will come down concurrently
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03-27-2024, 12:59 PM #61
- Join Date: Apr 2012
- Location: Alberta, Canada
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Last edited by Destor; 03-27-2024 at 01:09 PM.
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03-27-2024, 01:07 PM #62
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03-27-2024, 01:07 PM #63
The next 12-18 months are questionable, but obviously in the longer term prices will revert back towards normal. They always do. A housing bust hasn't happened already because mortgage rates were around 3-4% for over a decade. It wasn't just the Covid period. So a ton of us are happy to stick where we are.Light weight! Light weight baby!!!!
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03-27-2024, 01:13 PM #64
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03-28-2024, 04:14 AM #65
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03-28-2024, 04:50 AM #66
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03-28-2024, 05:03 AM #67
Yeah, taxes have become absurd during the last couple years. Along with high interest rates, it really has a significant impact on the valuation of properties(especially Income properties).
I've been valuing quite a few lately, and there are people who believe their properties are worth 4M, when in reality they're worth about $3M in the current environment.
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03-28-2024, 05:13 AM #68
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03-28-2024, 05:15 AM #69
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03-28-2024, 05:17 AM #70
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03-28-2024, 05:19 AM #71
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03-28-2024, 05:21 AM #72
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03-28-2024, 05:23 AM #73
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03-28-2024, 05:25 AM #74
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03-28-2024, 06:41 AM #75
Then there need to be consequences for overpaying for houses. Some people are starting to realize those, especially come mortgage renewal time in Canada or if they have unforeseen expenses. Investors should be taxed higher for every residence they have in a tiered way, so like 10% for the first, 20% for second, etc. Temporary rentals like Air BnB needs to be gone (this is already happening in a lot of places). Then you have cultural vultures that will give high interest mortgages to immigrant families who will pack fifteen people into a four bedroom house without any issue just to be able to get into the market.
Part of the main problem with real estate is that value is all subjective, and it comes down to if one idiot pays 200k more for a house in an area, then suddenly all the other houses are perceived to be worth that much even though two months ago they weren't. Things are worth what people are willing to pay, and all it takes is a couple of people to completely skew the system.
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03-28-2024, 07:36 AM #76
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03-28-2024, 10:27 AM #77
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