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To all Real Estate investors out there

AstonMartinOne77

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Dec 13, 2017
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Hello fellow entrepreneurs,

Considering that we are in a rising interest rates environment in the US and Canada,

does it still make sense to start investing in real estate?
is it worth to invest in real estate right now?

Of course, you might say that lots of entrepreneurs have become millionaire through real estate. However, it is much easier to be wealthy in real estate when interest rates are working WITH you and not AGAINST you.

The last few years, interest rates have gone down, raising the price of houses up and lowering monthly payments, and thus increasing monthly cashflow for the investor, but what if the rates go up...

Current interest rates
US Interest rate – 1.5 %
Canadian Interest rate – 1.00 %

Forecast for 2018 is three rate hikes.

Lets consider how monthly payments increase as the interest rate increases

On a $ 200 000 mortgage, at 1% interest rate, mortgages payments are => $753
On a $ 200 000 mortgage, at 1.25 % interest rate, mortgages payments are => $776
On a $ 200 000 mortgage, at 1.5 % interest rate, mortgages payments are => $799
On a $ 200 000 mortgage, at 1.75 % interest rate, mortgages payments are => $822

So the investor looses $69 of monthly cashflow when the rate goes up ¾ %

Theoretically, keep in mind that when the interest rate increases, house prices go down and mortgage payments go up. So, its a double edged decrease in profitability.

Now, lets consider how much the price of the house will go down if interest goes up.

When choosing how expensive a house we can afford, we take a look at the monthly payments, not the actual price unless the buyer is willing to pay cash.

Lets see how much we have to decrease the property price so the monthly payment stays the same when rate goes up

Lets stay with the first example of the $ 200 000 property and we can afford a maximum of $753 of monthly payments.

As the seller, how much do I have to reduce the asking price of my property so that the buyer still pays the same amount of monthly payments:

$200 000 at 1 %, mortgage payments are => $753
$194 000 at 1.25 %, mortgage payments are => $753
$188 500 at 1.5 %, mortgage payments are => $753
$183 000 at 1.75 %, mortgage payments are => $753

So the investor looses $17 000 when selling the property when the rate goes up ¾ %

What if the rate goes even higher in 2019, 2020...

Of course, the goal of the real estate investor is to find good deals and buy properties below market value.

I'm not saying you won't make any money, but still the interest rates are working against you.

Is it still worth to start investing in real estate now?

So then, you might ask, what are the alternatives:
- You could instead invest in the stock market
- Invest into your business

I would like to hear opinion of other fastlane entrepreneurs or future entrepreneurs.
 

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DrunkFish

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I'm in. Real estate investing is something i'm very interested in and most likely soon to be involved in, although on a macro scale, I'm behind.
 

Burning Desire

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It's a poor point in the cycle to start investing in real estate.

The current problem is that NOI yields are extremely low, driven by the low interest rate environment. In a rising interest rate environment, you should expect the NOI yield to increase hence putting your equity at risk.

However, it will still be possible to generate ALPA:
  • Refurbishment
  • Choosing regeneration areas
  • Tenant arbitrage (i.e. vacant or occupied by low-quality tenant > bring in high quality tenant and the NOI yield reduces, thus increasing capital value at similar rent)
The macro is against you, but there is always room for best-in-class execution.
 

EvanOkanagan

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"Investing in Real Estate" is such a broad term.

I'd always recommend Canadian RE investors start with the book by Don Campbell called Secrets of the Canadian Real Estate Cycle.

What stage of the cycle is it in YOUR market? It really depends based on location, as some markets are in a Boom and others are in a Recovery right now...some perhaps still in the Slump phase.

In my market it's in the "Boom" phase, which is the worst time to invest in "buy & hold" properties for rental cashflow. However, I've purchased 9 units over the past year for this purpose... my criteria though has become MUCH more strict, and deals come up very seldom as compared to when my market was in it's slump or recovery phase. In this phase of my market, the better investment would be in development or fix-and-flips to capitalize on the sky-high home prices.

In my opinion, in the long term Real Estate is going to shift to a majority of renters. Population is increasing, and they aren't making any more land. There will be a smaller group of people/companies who own most of the land/housing and it won't be affordable for the average citizen to purchase so renting will be the standard.
 

ironman150

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In my opinion, in the long term Real Estate is going to shift to a majority of renters. Population is increasing, and they aren't making any more land. There will be a smaller group of people/companies who own most of the land/housing and it won't be affordable for the average citizen to purchase so renting will be the standard.

So very true and at the same time very sad. Will have make sure we are some of the folks who own the properties.
 

AlessioLC

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Same in France, and i'm considering investing but taxes has gone up and the interest rate too a bit and i'll increase every year
 

GetRichODT

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"Investing in Real Estate" is such a broad term.

I'd always recommend Canadian RE investors start with the book by Don Campbell called Secrets of the Canadian Real Estate Cycle.

What stage of the cycle is it in YOUR market? It really depends based on location, as some markets are in a Boom and others are in a Recovery right now...some perhaps still in the Slump phase.

In my market it's in the "Boom" phase, which is the worst time to invest in "buy & hold" properties for rental cashflow. However, I've purchased 9 units over the past year for this purpose... my criteria though has become MUCH more strict, and deals come up very seldom as compared to when my market was in it's slump or recovery phase. In this phase of my market, the better investment would be in development or fix-and-flips to capitalize on the sky-high home prices.

In my opinion, in the long term Real Estate is going to shift to a majority of renters. Population is increasing, and they aren't making any more land. There will be a smaller group of people/companies who own most of the land/housing and it won't be affordable for the average citizen to purchase so renting will be the standard.

Congratulations on the 9 properties.

How did you fund them? Even at $100k each and $20k down that's a $180k cash commitment.

We're they less expensive? Anything g you're willing to share I'd appreciate as I try to learn.
 

WJK

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For you? Against you? Interest rates on real estate in 1976 when I bought my first house were 9.5%. In the early 1980s, they were 21% to 23%. Get some perspective, guys... Rates are be held down for governmental purposes.

Yes, I too have noted that home ownership is down and the number of renters is on the increase. I believe that this is in part due to the lack of stability of the job market. When I was young, a lot of people went to work and stayed there for their whole careers. Now we change job like we change our clothes -- often and with very little thought. That requires a lot more moving around.
I also think that are young people are being sold a bill of goods... They don't seem to realize that by not buying and putting down roots, they won't be able to build up equities and personal wealth like their parents did. How can they retire when they're going to still have to pay market rents?

So, with all that being said, yes, the rental business is timely and can be great passive income!
 

EvanOkanagan

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Congratulations on the 9 properties.

How did you fund them? Even at $100k each and $20k down that's a $180k cash commitment.

We're they less expensive? Anything g you're willing to share I'd appreciate as I try to learn.

Was just over 1.8m total combined so over 370k cash commitment (for DP's only--add closing costs closer to 400k). The 9 units were from 3 properties and different sources of cash:

550k Triplex - I previously sold two of my properties and had money in the bank for the purchase.
650k Duplex - I had equity in another property of mine that I refinanced and used the funds to purchase.
635k Fourplex - This one was a stretch. I literally drained my entire registered retirement account, borrowed from one of my partners, and maxed out all of my unsecured Lines of Credit (Don't recommend this route unless you have a high risk tolerance lol).
 

GetRichODT

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Was just over 1.8m total combined so over 370k cash commitment (for DP's only--add closing costs closer to 400k). The 9 units were from 3 properties and different sources of cash:

550k Triplex - I previously sold two of my properties and had money in the bank for the purchase.
650k Duplex - I had equity in another property of mine that I refinanced and used the funds to purchase.
635k Fourplex - This one was a stretch. I literally drained my entire registered retirement account, borrowed from one of my partners, and maxed out all of my unsecured Lines of Credit (Don't recommend this route unless you have a high risk tolerance lol).

Awesome! Thanks for the details. So on these properties, it sounds like you have about 20% equity and to fund them drained almost all available reserves.

Am I reading that right?

for the properties that i "own", I have in total about 35% equity in them but have reserves invested and in cash that represent may another 30%. Of course, if we had a stock market crash, that 30% falls by quite a bit.

I'm trying to determine if I'm stretched way too far (or at all) or being overly conservative. Then I read cases like the one you provide and wonder if I'm doing it wrong.

What are your thoughts?

Of course, "comfort" is for each individual to decide, but I'm torn between plowing excess funds into the stock market and other investments (non-real estate) or building up cash outside of the stock market, etc as quickly as possible should a crash come.
 

Real Deal Denver

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$200 000 at 1 %, mortgage payments are => $753
$194 000 at 1.25 %, mortgage payments are => $753
$188 500 at 1.5 %, mortgage payments are => $753
$183 000 at 1.75 %, mortgage payments are => $753

You answered your own question with the analysis above.

When interest rates go up, this oppresses buyers and that is a great deterrent. As you have already figured out, they either pay more, or get less.

There will always be demand for rental properties. The fact that the bar is being raised higher only increases that demand.

But, let's think for a moment. What are your other options? The stock market? Sure, put your money in the hands of people that you know nothing about, and you sure can't predict what they will do to run their business. No thank you, very much. No control.

Bank CDs or bonds? Sure - have at it. Huge money in that. Maybe 4% and wait 20 years? Then pay taxes on your gains.

Or, you can open your own business. Cha ching - good choice! Open a business - or invent something. You control your own destiny. Hope it weathers the business cycles and the competition though. Hope you aren't just creating a job for yourself, but a real business entity that can be valued and sold.

A business demands work and attention to detail. Real estate is, well - easy peasy. Pretty much. Wish I knew what I know now, 30 years ago - I'd be a multi-millionaire for sure.
 

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GetRichODT

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You answered your own question with the analysis above.

When interest rates go up, this oppresses buyers and that is a great deterrent. As you have already figured out, they either pay more, or get less.

There will always be demand for rental properties. The fact that the bar is being raised higher only increases that demand.

But, let's think for a moment. What are your other options? The stock market? Sure, put your money in the hands of people that you know nothing about, and you sure can't predict what they will do to run their business. No thank you, very much. No control.

Bank CDs or bonds? Sure - have at it. Huge money in that. Maybe 4% and wait 20 years? Then pay taxes on your gains.

Or, you can open your own business. Cha ching - good choice! Open a business - or invent something. You control your own destiny. Hope it weathers the business cycles and the competition though. Hope you aren't just creating a job for yourself, but a real business entity that can be valued and sold.

A business demands work and attention to detail. Real estate is, well - easy peasy. Pretty much. Wish I knew what I know now, 30 years ago - I'd be a multi-millionaire for sure.

The knowledge I feel i may be missing is how to turbocharge what I'm doing. I have great properties that return at least 9% cash on cash. They are all in great areas.

However, I'm not to a point of financial freedom from them. I believe I could be there in the next 4 to 5 years if I applied all my excess capital to them.

Many in real estate would say just leverage more and maybe that's something I'll do, but I'd prefer to build up some reserves for now.

Paying off mortgages that are < 4% doesn't seem like a good option.

I do have a couple of credit unions that pay 4.5% but that also seems very slow lane, but not a bad "temporary" spot to apply my funds while I look for the next deal.
 

Real Deal Denver

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The knowledge I feel i may be missing is how to turbocharge what I'm doing. I have great properties that return at least 9% cash on cash. They are all in great areas.

However, I'm not to a point of financial freedom from them. I believe I could be there in the next 4 to 5 years if I applied all my excess capital to them.

Many in real estate would say just leverage more and maybe that's something I'll do, but I'd prefer to build up some reserves for now.

Paying off mortgages that are < 4% doesn't seem like a good option.

I do have a couple of credit unions that pay 4.5% but that also seems very slow lane, but not a bad "temporary" spot to apply my funds while I look for the next deal.

You're lucky. Today I'm running a special. I'm gonna give you lesson 23 on how to make the big bucks renting real estate. Free. Cause, I like you. Hold on. You're gonna really really like this.

It's nothing new, or brilliant. But it is a huge tool that will boost your profits through the roof, as well as giving you more security. The downside? Nothing.

Find a property to rent that can be subdivided. A property with a separate basement entrance is ideal. This way you can have two renters instead of one. If one leaves, you still have income. These are not hard to find. I can find 3 or 4 a week with a little research. I can even find them with the basement already finished and set up to be separate living area - which means it has a fully equipped kitchen and dining room. All for no extra charge.

You rent each space for less, which makes the property MUCH more attractive in the rental market. For example, instead of renting the entire property for $1,500, rent the main floor for $1,000 and the finished basement for $800. You have now increased your rental income by 20%. Wah - lah. If it has a garage, that's another factor you can deal with. I suggest including it in the higher rent - in exchange for something - like taking care of the yard work and having both rental payments collected and ready to go on the first of every month. DELEGATE. Win win. Your renters will love you, and you will love them. That's the way it's supposed to work, but too many people can't figure out how to RUN an enterprise efficiently. Year in and year out - they keep doing the same things the same old way.

See? It's not hard. Anyone can figure this stuff out. Once you think outside the box.

That's only ONE lesson. Now that your brain is somewhat untethered, I'll let you figure out more options on your own. First you learn the rules, then learn how to play the game better than anyone else. Guess who said that? Einstein. Not only was he on the cutting edge of fashion for his time (hair!) but he was a business genius as well!
 

EvanOkanagan

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So on these properties, it sounds like you have about 20% equity and to fund them drained almost all available reserves.

Am I reading that right?

for the properties that i "own", I have in total about 35% equity in them but have reserves invested and in cash that represent may another 30%. Of course, if we had a stock market crash, that 30% falls by quite a bit.

I'm trying to determine if I'm stretched way too far (or at all) or being overly conservative. Then I read cases like the one you provide and wonder if I'm doing it wrong.

What are your thoughts?

Of course, "comfort" is for each individual to decide, but I'm torn between plowing excess funds into the stock market and other investments (non-real estate) or building up cash outside of the stock market, etc as quickly as possible should a crash come.

You read it right, but maybe assumed that they were worth the same today (which isn't the case). I actually have about 60-65% LTV across my portfolio right now (so 35-40% equity). My comfort level is about 70% LTV as I'd still be able to handle pretty well any "correction" in the market that came at me-- so I'll be likely accessing this extra 5-10% equity in the coming year.

All of these properties I bought were well thought-out and I either bought them under market value, added value, or bought in an upcoming area:

550k Triplex - this was a PRIVATE sale and basically the guy owning it got sick of dealing with tenants (had some biker tenants in there he couldn't deal with). I came in, booted them out and cleaned up the place, added separate laundry & a new bathroom to one of the suites. This would easily sell for 650k or potentially closer to 700k today.
650k Duplex - this property was in an area that was just about to be rezoned that the public didn't know about (found out from the mayor and inside scoop from city council). I just had this appraised by the bank the other week, and without doing any work since the re-zoning the appraisal came in at 730k.
635k Fourplex - This one started off as a Duplex with unfinished basements. This property had potential to "stratify" and sell off the sides separately vs being on one single title when I bought it. I put about 25k into it to clean it up and go through the stratification process. Each side would sell for faster and more money than selling the whole as it's in a much wider net of a buyer pool. I could sell today as a whole for about 700k... as separate "half duplex" sides though they could easily fetch 400k EACH, so now worth 800k on the conservative side.
 

WJK

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...What are your thoughts?
Of course, "comfort" is for each individual to decide, but I'm torn between plowing excess funds into the stock market and other investments (non-real estate) or building up cash outside of the stock market, etc as quickly as possible should a crash come.
I would be uncomfortable with the high LTVs (Loan to Value Ratio). I remember the late 1980s in the Los Angeles area. Those years were about OPM (other people's money). My friends borrowed as much as they could to buy properties and they tried to have very small equities. And then the recession started around 1990 and it lasted most of that decade. The market values contracted, and banks called for the investors to pay down on their upside down loans. Most of those aggressive investors that I knew ended up bankrupt. That was also when the entire Savings and Loan industry meet its demise. And that's just one example...

Here, in my little corner of Alaska, we're having our first recession since the 1980s. Oil prices have kept that boogie man away from here, until they collapsed a couple years ago. Last winter I suddenly had 8 rental vacancies -- and on top of that, I had to do 6 evictions. My cash flow dropped for the first time in many years. I adjusted my rents -- I got the cash flow back on track. This winter, I had one vacancy, which I rented this last week.

I need more "wiggle room" in order to be comfortable. Do what makes you happy, but I'm into having very low LTVs. I don't want to start over and do all that work again. Those years are gone for me.
 

bambambam

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I just closed on my first four properties in the last three months. I own a duplex, a duplex + house, a 5 plex, and a four plex that I am renting out as 12 individual rooms to college students.

I went from 0 units to 22 units in about 30 days. It has been a whirlwind. Lots of good and lots of bad already, from evicting a tenant to a broken water heater to finding two new tenants to a roof replacement.

I had about $150,000 sitting around in a taxable stock account and wanted to get into real estate. I figured I may as well jump in and figure out if I love it or hate it. I bought $700,000 worth of property that rents for $10,000/month when full. Currently sitting at about 60% occupancy.

Would love to talk more if it is helpful to anyone
 

WJK

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I just closed on my first four properties in the last three months. I own a duplex, a duplex + house, a 5 plex, and a four plex that I am renting out as 12 individual rooms to college students.

I went from 0 units to 22 units in about 30 days. It has been a whirlwind. Lots of good and lots of bad already, from evicting a tenant to a broken water heater to finding two new tenants to a roof replacement.

I had about $150,000 sitting around in a taxable stock account and wanted to get into real estate. I figured I may as well jump in and figure out if I love it or hate it. I bought $700,000 worth of property that rents for $10,000/month when full. Currently sitting at about 60% occupancy.

Would love to talk more if it is helpful to anyone
Years ago, we had an "animal house" close to USC in Los Angeles. The winter problem was getting the kids to do their dishes and clean up the common areas. The summer problem was that the students went home and we lost our income for that property. It was a fun adventure for a few years...
 

Real Deal Denver

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I just closed on my first four properties in the last three months. I own a duplex, a duplex + house, a 5 plex, and a four plex that I am renting out as 12 individual rooms to college students.

I went from 0 units to 22 units in about 30 days. It has been a whirlwind. Lots of good and lots of bad already, from evicting a tenant to a broken water heater to finding two new tenants to a roof replacement.

I had about $150,000 sitting around in a taxable stock account and wanted to get into real estate. I figured I may as well jump in and figure out if I love it or hate it. I bought $700,000 worth of property that rents for $10,000/month when full. Currently sitting at about 60% occupancy.

Would love to talk more if it is helpful to anyone

HECK YES this is interesting! Thanks for the post. You took a giant leap. Congrats on not wading in to the water slowly, but just going headlong into the deep end!

My question is that your 60% occupancy rate seems very low. In my market, properties are rented within hours. Why is your rate so low, and what plans do you have to increase it? When you get to 90% or more occupancy, what do your expect your net income to be? And what is that compared to what you were getting in your stock account?

Talk as much as you want to. I absorb every word!!!
 

EvanOkanagan

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That logic doesn't hold up. Where do you think rentals come from? They have to be purchased just like houses that homeowners live in. And, rental economics only make sense for landlords if rentals can generate an income stream that approximates what a homeowner would pay -- remember, the landlord needs to cover all the costs of a homeowner (taxes, insurance, maintenance, capex, etc), plus an income stream over and above any debt financing.

Historically, the cost of renting is pretty close to the cost of homeownership. If renting were ever considerably cheaper than homeownership, that would mean that landlords weren't generating enough of a profit to justify the investment.

I'll chime in because I think he directly quoted a previous post of mine. Open to your input on this as well...

I don't think that rental rates will go down-- I believe the opposite. With the climbing home prices, the ability to afford to finance/purchase a home will be more and more difficult as time goes and thus, there will be a higher percentage of people renting (at increased rental rates).

Back in the 50's & 60's you could buy a house with 1-2x your annual income, now in some areas people are lucky if they can purchase a home with 15x their annual income. As history of homeownership has progressed, I'm sure the amount of people renting vs. owning has been on the rise.
 

AlessioLC

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@EvanOkanagan Same here in France, the interest rate is still low, but it will rise soon or later, it's about time.
 

BrandonS85

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Is the deal profitable?


That's what matters unless you're on a bunch of ARMs for your investments.

Don't forget that we tend to see 1%-2% inflation per year, so the money you use tomorrow to pay down the loan is worth a little less (And your property hopefully earns a little more).
 

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EvanOkanagan

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That's assuming you believe home prices will keep going up. As you mentioned, the current price of homes (relative to income) is at an historic high, and is likely unsustainable. Like most things, it will likely revert back to the mean at some point, and my guess is sooner rather than later...

As I'm sure you know, real estate is cyclical (Slump followed by Recovery followed by Boom--then back to slump and so forth)... I don't believe prices will "keep going up" short-term in many markets as they may be in their Boom phase.. eventually these markets will see a correction and enter the slump which will level out pricing to a degree (potentially 5-20% decrease). But what happens when the market then shifts to the next recovery and boom period? Prices go up.. and historically higher than the last "slump" period. Are you disagreeing? Over the past 70+ years this has happened. Is it just now becoming unsustainable and will buck the trend that's been ongoing for nearly a century?

To quote myself:

"In my opinion, in the long term Real Estate is going to shift to a majority of renters. Population is increasing, and they aren't making any more land. There will be a smaller group of people/companies who own most of the land/housing and it won't be affordable for the average citizen to purchase so renting will be the standard."

The population is at a historical high, will it revert back to a mean at some point? What happens when the population of a city keeps rising and you own a chunk of that city (through Real Estate). Wouldn't the demand be greater because there is less supply for the increased population, thus increase the prices?
 

KingWing26

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I believe a much bigger issue is the inventory available to buyers....which is at an all-time low. Any property that pops up in this market is 1. Over-valued and 2. Swarmed with competition. This classic supply and demand issue is causing a massive bubble. Pair that with an increase in interest rates and it almost makes 0 sense to buy right now. Off-market deals are and will always be the way to go.

I do believe that inventory will open up soon as homeowners look to sell high and we are heading into the hotter Spring/Summer markets.

With all of that said, if a property cash flows and the numbers work then still go for it.
 

EvanOkanagan

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Real estate value increases have, for the most part, tracked inflation for the past 100 years or so. Likewise, so have wages. So, assuming you agree that values will revert back to the mean, you should also agree that the cost of a house should, in inflation-adjusted dollars, not be too different than it was 100 years ago, as a percentage of income.

When did I say "inflation-adjusted dollars"?

But regardless.. are you so sure? Please explain this data then:

screen-shot-2018-02-22-at-5-39-52-pm-png.18214

That's just in Canada maybe? Think again:

Here’s how much housing prices have skyrocketed over the last 50 years

"If you want to buy a house this year, you may well be paying around $199,200, the median price for a home in the U.S., according to Zillow.

Houses weren't always this expensive. In 1940, the median home value in the U.S. was just $2,938. In 1980, it was $47,200, and by 2000, it had risen to $119,600. Even adjusted for inflation, the median home price in 1940 would only have been $30,600 in 2000 dollars, according to data from the U.S. Census."



Btw, you said, "potentially 5-20% decrease" -- are you making that number up or do you have data to support it?

It's apparent I'm making that number up as I said "potentially". This was roughly the drop from the peak of the boom to the bottom of the slump in most of the surrounding areas close to my market the last two cycles.

The cost of renting and the cost of homeownership have been substantially the same for decades.

Are you making this up, or do you have the data to support it?

Absolutely. At some point (sooner or later), there will be a natural disaster, global changes and/or a pandemic that wipes out a significant portion of the population. This is the way it's been throughout all of recorded history...why should the forces of nature change now?

Are you just trying to find a way to disagree with everything I say? You're right-- over the hundreds of thousands of years of humankind there have been multiple occasions where a portion of the population has been wiped out. I find it funny that you're comparing our hunter-gatherer ancestors with our agriculturally, industrially, and technologically advanced society today.
 

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WJK

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As I'm sure you know, real estate is cyclical (Slump followed by Recovery followed by Boom--then back to slump and so forth)... I don't believe prices will "keep going up" short-term in many markets as they may be in their Boom phase.. eventually these markets will see a correction and enter the slump which will level out pricing to a degree (potentially 5-20% decrease). But what happens when the market then shifts to the next recovery and boom period? Prices go up.. and historically higher than the last "slump" period. Are you disagreeing? Over the past 70+ years this has happened. Is it just now becoming unsustainable and will buck the trend that's been ongoing for nearly a century?

To quote myself:

"In my opinion, in the long term Real Estate is going to shift to a majority of renters. Population is increasing, and they aren't making any more land. There will be a smaller group of people/companies who own most of the land/housing and it won't be affordable for the average citizen to purchase so renting will be the standard."

The population is at a historical high, will it revert back to a mean at some point? What happens when the population of a city keeps rising and you own a chunk of that city (through Real Estate). Wouldn't the demand be greater because there is less supply for the increased population, thus increase the prices?
I too think we're shifting to a lot more people renting rather than owning their homes. And the trend is away from huge houses, which we're all the rage in the 1990s. Some reasons for the shift away from home ownership are because the birth rate is down and family formation is down. People aren't working at the same job for their whole careers -- they're moving around a lot more. And the biggie -- drum roll please.. many young people don't understand the value of having a free and clear home for a place, or a jumping off point, to retire.
 

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