I’m a new dad, I moved to the Bay Area a few years ago and I’m thinking of purchasing a single family home, but with real estate prices currently through the roof, is it still a good idea to buy a home or should I invest in stocks for now and just wait for a housing market correction? I heard Nvidia and AMD are strong buys.
Certain Ai companies are rumoured to be overvalued and might cause a market correction, I’d suggest you go with a managed portfolio, but even those don’t perform so well, so it’s best you reach out to a proper fiduciary to guide you, that’s what works for my spouse and I.
I won't pretend to know everything, though. Her name is Melissa Rose Francks but I won't say anything more. Most likely, you can find her basic information online; you are welcome to do further study.
Excited to be selling my home this spring and moving down to Georgia. Can’t wait to get out of this dumpster fire of Country. I’m a proud Canadian but I can’t do it anymore! The US is far from perfect but a shot at an affordable middle class lifestyle is worth taking the chance.
Are you moving to work down there? I’m considering the same thing. Changing jobs and moving to US Carolinas, Georgia, Florida or Texas. I have like 300K equity in my house for a 650K house. I can use 300CAD to purchase something in US market. What do you think? I’m not very well versed in American real estate. I just want to go to a red state that’s warm.
@@JJ-qp6jw investor visa easiest way. Business plan to have 100k invested... food truck or something. Anyways pretty easy doesnt mean you need to blow 100k. Just that 100k.will circulate in a business. Ya leaving this country before it goes completely to shiiiit.
I am one of those immigrants that arrived in 2019 and you are correct on your assumption, I am on the go to house hunt this year. I have all the checkmarks crossed (downpayment, emergency fund, credit score, no kids lol, etc). Funny enough I am also the specific case of renting a basement. $1,072 a month, all utilities included for a one bedroom, one parking spot, shared laundry. So that allowed us to bank all these years. No rush to move out soon, so we'll just lowball any properties we would like. My realtor will probably not like the paperwork I am going to put him thru but its his job if he wants the commission.
A friend owns a brokerage and another who now have Cdn citizens and sold their first home thru them. They bought in a hurry the first time having been here not long. Funny for this second house they made our broker friend look at ~50 houses before buying. Too funny. First home was fully paid so they rented it out.
Housing has to go down one way or another.... home owners that can't afford mortgage payments with higher interest rates and renters that can't afford high rent prices with alternate rental options running out...then as mentioned, inflation and unemployment deepening the situation.
I agree with your comment but have to add that prices should decline from here only in "Real Terms", not in nominal terms as the financial system can't afford a nominal price meld-down.
Sure, but builders won't build for discounted prices. So, I think we are stuck between a rock and a hard place going forward. It costs are certain amount to build a square footage of home, a certain amount to buy a lot, to connect it to utilities etc. - all of this creates a floor on prices. Sellers will be reluctant to sell their properties below their real value and builders won't build when they can't get back what it cost to build the home. Banks also set a floor - you are forgetting that last year they were ordered by our gov to be compassionate to struggling homeowners and make exceptions... they won't allow you to offload a property for less than it's real value, so I am seeing forced sales turning into "leasing" of the property, or amortization periods are getting extended for decades to avoid having to sell. AND... we are also forgetting about the fact that if there are folks who have to sell, Tricon/Blackstone have loads of investors' money (even our CCP is in vested in them) and they are buying up SFH that you can then lease back from them. That is the grim future - so hold on to your house if you can, because SFH inventory will continue to decrease as they get bought up by corporations to lease back to you. And this time IS DIFFERENT than in the past... there is NOT enough supply, so it is naive to think prices will slide further when rates go down. The pent-up demand is huge, the amount of money on the sidelines is also huge and accumulating pleasant interest if invested smartly. So some buyers on the sideline are doing wvery well and accumulating wealth to soon afford themselves a better home.
@@Joey-c7xAbsolutely. We're very near to the floor right now. Banks will kick and scream like 16 year girls seeking attention if collateral values get much lower. Talking heads (with no offense to Jon), must get a grip that banks need collateral to issue credit. A bank that does not lend does not have revenues. No revenues, no profits. No profits, no share price. No share price, no executive bonuses.
Rates are staying at this level as far as mortgages are concerned because the bond investors are finding our country nuch riskier so even if the BOC cuts the overnight rate lowering the front end of the curve dont expect the 5 year yield to come down as it will more then likely rise as the frony end comes down
One property sold here "at asking after 8 days", except it's been on the market for months. The truth is it sold "260k below asking after 6+ months". Another property listed with offer night for 799k, relisted a day later at 880k after it didn't sell on offer night.
Problem is the cost of building a new home sets the selling price for all homes. A new home builder expects to sell what they build for the costs plus labour & profit (their wages). When you purchase a preowned home you may spend a little less, but the price is more about replacement cost. A buyer is willing to spend a certain amount for a used home instead of paying the price for brand new. And the sellers need to make a certain amount in order to buy their next home. If the used home market drops drastically, then new home builders will not be able to sell their homes at what it costs them to build, so naturally they will stop building and the inventory will go down. Then what do you suppose will happen to the existing homes for sale (supply and demand)? Adding to that is the rapidly increasing price of land (again, supply and demand).
I keep seeing the headline that the Spring Market will be hot, bidding wars are back and lots of people are ready to buy. Although I own I would like to see the prices come down some.
Good work bringing that up nobody is talking about this inflated stock market it seem way to high compared to all the remaining data ... someone will sold soon
Had a chat a few days ago with GTA realtor. She said literally this - "almost nothing moves". There are buyers but very few sellers are willing to accept those (low-ish) offers. It's a standstill, but it can't stay like this forever. Something will give.
Well done, Jon! I've been watching you for quite awhile - the straight stories you share backed by data and your experience should be considered by everyone. You certainly made a difference in my house sale - very very positive difference. Subscribed and will continue watching you for truth - thank you for all the hard work and insight. You're a good man and a good realtor who obviously puts the interests of both sellers and buyers first.
Lots of overpriced luxury condos in Kitchener Waterloo empty. People can't afford the mortgage plus condo fee. Can these investor builders hang on forever???
Hi Jon, what is your opinion on the Edmonton market? The prices are increasing over 5% with low inventory, the word is the prices are going to keep increasing significantly, will the proces fall in the near future here in Edmonton? We are getting a lot of interprovincial movement.
Home prices ain’t coming down in fact with constant attack on landlords with accusations of charging sky high rent affordability will only get worse when investors start to bail out from real estate sector. People fail to understand that they are the real drivers of inventory
Great data, however the home prices selling over or under list misleading. Few years ago house went up once sold over asking. Now? It goes up 7 times. Then sells. It's not registering the first time they list. Just the last listing.
Mark Carney had the opportunity as finance minister to control inflation by raising interest rates early on ,in stead he lowered rates putting the country were it is today !
Elected MPs or MLAs don't have control of interest rates. The Bank of Canada controls the overnight rate, which is really just a guide. The bond market controls the fate of the mortgage rates that are set by the banks. If bonds are risky to buy they demand a higher payback on maturity. Higher payback on bonds translates to higher mortgage interest rates set by the banks. Hope this helps.
It's so sad, having to pay a house over 1 million and on top of that you have to "share" (rent) the basement to be able to pay your mortgage!! you can't even enjoy your entire space :'(
You don't know how much I get downvoted on Reddit by saying that immigrants are not raising home prices, but it's instead a function of the M2 supply. Sure, immigrants are raising rents, as your graph shows, but not home prices. But alas, telling this to people results in downvotes.
Thought experiment: I'd like to buy a house but don't like the prices. So now my instinct is to rent and wait out the bubble. Unfortunately, due to high immigration, rents have near doubled, and my plan is not so attractive anymore. And with 500 000 immigrants coming in every year for at least the next 3 years, the rent situation is only going to worsen. As a result I'll probably end up buying an overpriced house anyway. And what about older people who would otherwise be cashing out if only they could find reasonable rent that won't quickly eat away their nest egg. Maybe they don't end up moving either, which means fewer houses hitting the market, which means less supply. You see... immigrants do keep the market bubbled. And Reddit should be downvoting you. ;)
@@SlykeThePhoxenixRight, you wrote: "You don't know how much I get downvoted on Reddit by saying that immigrants are not raising home prices..." My point was that they most certainly are raising home prices. A large part of that is the result of what they're doing to the rental market. It's all connected and quite simple. However you're correct that printing money has contributed to the inflation of assets, including home prices.
Key word politicians, talking heads and media omit from headlines and sound bites: AFFORDABLE incl rentals. Too many corp rental mgt cos (btw tenet and developer) who don’t do their job. No motivation to. They skim off top of their monthly % fee from all units for profit and do the min. Needs to be stronger accessible legal systems properly funded and regulated that favors neither renter and tenet. Edit: urban planning videos have great content on why/ how city designs and traffic are so much more effective in Europe esp Scandinavian countries. Not just building more suburbs that incr need for taxes (good videos on this.) Majority of money for an area comes from the downtown core of cities vs suburbs. If I find the videos again I’ll put in comments.
@Jon maybe I missed it, but can you please do a video on the primary cause of housing affordability? Other RUclips Realtors keep saying it is a "supply issue", but as far as I can tell the supply has been relatively stable. I would love to see one chart from 2002 to 2022 with the following info: - housing supply - money supply - interest rates - house prices - incomes - population
More density and more population is helping with canadas climate and environmental goals. I’m glad we are on the right path moving into a bright green future.
homes will not come down until more new homes get constructed at affordable prices.... does not matter the market people is living int he crazy bubble, and until the Feds and the local govs do not incentivice builders to contruct new cheaper homes then prices will not go down, i will wait 2 year to build my new prefab :D will be probably on the floor proces after the goverment have started to implement stuff for builders
Banks like HSBC have been busted committing mortgage fraud. A blackjack dealer in Ontario holding mortgages for 4 houses, claiming he made $400,000k a year doing online work back in his motherland and the bank not verifying any of it, all while only making min wage in Canada. Other banks have been called out as well yet no one is investigating. Hopefully that answers your question.
I live in a van and I’m not an immigrant. Just don’t want to give all my earnings to a landlord. Rental rates are just stupid right now. Smart people know how to dodge this. I have saved huge $ in the last two years by avoiding the housing market. Lucky my kids are grown.
Jon, does your data/trend apply to Calgary? Pundits all say that hoards of people are flowing into Calgary and there will never be enough homes to sell no matter how high the prices go. I believe in data, but I can't see how it applies to Calgary. Please enlighten me.
People are flocking to Calgary to purchase because it’s the last big city in Canada that you can still get a home at 2019 prices. Once the market breaks it will be devastated just like everywhere else
It doesn’t matter which way it is going everyone is frustrated homeowners and renters we are being crushed by the idiot government and the greed of individuals who are ruining our lives .
There's a simple solution: permanently ban foreigners from buying real estate and force them to sell their holdings within the year. It's not like I can buy up houses in China and rent them back to the Chinese.
Hey Jon if you control for inflation, home prices are already at 2018 prices. Why would we expect prices to go below then, given everything thats changed about Canada?
Prices are out of line with peoples incomes and we are in a debt/credit bubble that is unsustainable. GTA real estate and various citys within an 1.5 hours drive were about 20 percent over valued prior to the pandemic and were due for a correction instead prices soared 40 to 60 percent and have since come down 15 to 30 percent depending on the specific city. Therefore prices are over valued 35 to 50 percent before being adjusted for normal inflation so lets call that 12.5 percent so some areas are overvalued about 22 percent and some as high as 37 percent. Tack on say 5 percent for immigration which should be 1 for 1 so meaning a 5 percent increase in prices and you are looking at best case price declines of 17 percent to 35 percent between now and 2027 depending on the exact city. Hopefully we see a controlled burn over the next 34 months which will help keep the banking system solvent instead of an actual crash due to liquidity issues. This is your most likely scenario if mortgage rates stay where they are.
How will prices fall if rates are cut? Could you please explain this as the logic doesn't make sense to me. If rates are cut, why wouldn't prices start to rise? Thanks.
Because if rates drop that means the economy is in really bad shape....jobs are being lost... companies are shutting down....so history...this resulted with price drops in housing
exactly what treaty8631 said, also the lag effect, will take 2 years for low rates to take affect just like it's taken almost 2 years for higher rates to take affect. You haven't seen anything yet.
@@jonflynnI'm not sure that's why governments cut rates these days. We've entered a new era of pedal to the metal, quantitative easing, import people economics. Were times so tough and unemployment so bad over the last 15 years that they had to keep rates cut to nil the whole time? Not at all. They just continue to inflate bubbles... it's the new ethic. What we need is for the stock market to crash and a good, healthy recession. In order for the fiormer to happen we need some major event to send it tumbling. The seven year cycle no longer applies.
This is not really what we are seeing on Vancouver Island. Record low inventory, increasing prices and things starting to sell quickly. People are listing their places for sale fo fear of having nowhere to go. Why so different?
Different demographics buying properties in Vancouver vs Toronto. Vancouver will always be high demand due to offshore cash lending there, climate, and beauty.
Why does it feel like this is the start of some sort of a slow slow crash of the housing market, or not just the housing market but overall economy overleveraged on housing?
So Jon why do you think prices of home will or should go down 30-50%? Will supply of homes increase faster than population(demand) growth? Will people stop immigrating to Canada? Will rents go down to make that option more attractive than buying?
Well, buying for first timers is not right time for them. I will say, people selling their homes for whatever reason at a high price can use that to upgrade to another. It doesn't matter if their home depreciates as tbey already took out equity on previous home sold. Yes, interest is high but thats temporary. Deals are also coming for cash buyers to.
Some people just can’t readjust to the new reality. Unless they can hold for the next ten year waiting to profit they will get burnt. And deservedly. Greed doesn’t always win.
Saw a graphic that avg. house price still over 12 times the median wage when it should be around 3.5 with higher mortgage rates and the banks solution is amortz. of 250 years ..lol. This mess will be fun to watch and glad sold at covid top and moved to a friendlier tax jurisdiction outside good old Canada eh ? 😄
Also, it's important to consider that the economy is slowing down. Job losses are cumulating, people line up at job fairs, inflation and high rents are eating people's bank accounts. I saw in the news recently Montreal saw a $1 billion reduction in foreign investments in 2023. If people don't have a down payment, they can't buy a house. These immigrants are mostly in that situation right now, so even if they want to buy, they don't have the cash in hands for it. And with people renewing their mortgages into 2025 and 2026 at higher rates, distressed sellers and foreclosures will only pile up. I see a bunch of buying opportunities ahead for those who are saving for it.
History. Recession indicators. Inflation. Money Velocity. A bunch of reasons. Same reason why not getting the BoC rate above CPI at peak was a huge mistake and inflation is coming back and simply basing. For about THREE MONTHS we were restrictive.
One house, primary residence. I did own multiple properties at one time but sold them years ago, didn't want to be involved in the greedy real estate hoarding game.
I agree with majority of the people on the internet talking about the lunacy of the real estate market. You guys are the moral voices. However until anyone recognizes that the banks run the show here and the US and will bend rules to make sure there is not a crisis that jeopardizes their collateral (i.e. real estate) then you guys don’t understand how the world works. Doom and gloom clickbate doesn’t help anybody out.
How about they raise everyone’s incomes to finally close that wage gap that’s been building for decades. We’re seeing corporate profits skyrocketing and yet since 2020 our buying power has eroded by 23%.
can you take into account the 158,000 extra deaths and the number is going up each month. governments are looking into it but the numbers of extra deaths from last year will make a difference in the house sale numbers, also why are none of you talking about jab injuries numbers? a lot of people can not work if your not working your not buying a new home
Keep listening to this gibberish. House prices will finish the year 10-15% up due to lack of inventory, increased sales, and upcoming rate cuts. As simple as that. It is dangerous to be married to your ideas.
Wow that's some major math gymnastics to try and fit your narrative Jon. Like cutting off charts right before they dramatically shift away from your narrative. I guess if I did as few deals in a year as you do, I would probably say the market is crap too.
I think with all this doomsday stuff, what is being forgotten is the ACTUAL REAL COST of building a house. That won't be coming down anytime soon, if ever. Labor costs will go up, not down, materials might stagnate, fees for building will also go up... this all equals higher or at least stable, for now, home prices. The aforementioned give house values a FLOOR and nobody will be selling below that because then nobody would be building. So the best advice is to do the math, have a good agent who helps you calculate how much each listing you are interested in would cost to build TODAY, not YESTERDAY, and go from there. There are already some good deals out there with houses actually selling for the real value of building one today, purchasing a lot, hooking up utilities etc. So I would like to ask you Jon, do you really think people are going to start selling their homes for less than real value? I sincerely doubt that, RE agents won't hear of it and won't even allow it.
the industry is evolving together with new materials / prefab processes / concept. example is Elon Musk's mini house from Boxbal company, only 50k USD, a capsule house is not only low-price, but also a luxury design, anti-fire, anti-earthquake, low maintenance. NZ govt employed a Chinese company to build 10 level buildings with prefab parts in 48 hours, with a very low costs and 10 times stronger. with this in mind, will builders still follow the approaches century old at unaffordable costs? will buyers like me willing to buy , especially with a heavy loan, for the moment, certainly there are still people willing to buy and still thinking they can sell in future at a higher price to somebody else.
I don't know anyone who would want to live in a box (ummm capsule). It's not going to be popular. The scenario of Tricon/Blackstone buying up more than 50% of housing stock and leasing it back to us is more probable. People want to live in comfy homes, and will accept the fact they will lease for life rather than live in a capsule. @@tsingtsao568
@@Joey-c7x Sir, very good argument, by diminishing Capsule house, and I would also site Celebrities as arguments, so even people like Elon Mask can live in a Boxbal mini house, why not me ? The capsure house, is 40m2, 5-star category, 4.5k Euro, but a studio you could get here ? for that 30m2 studio, I could by 4 , considering the land, septic/solar , I bet I can still buy 2 = 80m2. the question really is who would buy a 30m2 studio at 1/3 of million ?
45k Euro, type. and the Elon Mush type of mini house is less than Capsule house. Also I'd rather choose Capsule house than Elon Musk one, because it is made of Aluminium alloy with spacious windows all over, automatic curtains, equipped with 2 ACs, a studio congested in a building, that is what I call a box.
@@Joey-c7x by the way I also heard about that news, the question is how they would put that into action ? I can image, when the market crashed resulting abandoned houses, insolvancy, etc, somebody has to step out to clean the mass, the question is at what price they would think it lucrative.
2 comments: 1) You and everyone else who have blamed immigrants for the housing crisis are wrong. I have always said most newcomers live by renting rooms in houses. They actually help homeowners pay their mortgages. Very often they help immigrant home owners pay their mortgages because these are the homeowners willing to rent to immigrants. So newcomers arrivals do not create more housing crisis, they help with it. 2) For someone who has blamed everything on immigrants for almost 2 years, I find it hilarious to hear your own immigration story. Man, even the federal government had to shut down international students admissions because everyone started saying they make the housing crisis worse. That's not true.
Quite disagree. 1)Newcomers increase demand in the rental market so rent goes up. If rents go up more people are willing to pay a big price for housing. Everything is related.2) This crisis is not about lack of renters, it is about lack of inventory. So newcomers are not helping but making it worse.
@@G233-s6x Not true. This is a narrative that always happens in society in times of austerity. Do you have the data on how many new renters join the market every year? If you find that data, you would have to subtract how many people leave their parents house to rent and how many people move from houses to rentals, before you consider the contribution of newcomers to the number of renters. Your equation would logically include: New renters in the market= nb of people who left parents house + nb of people moved to rental from owning + nb of newcomers who need rentals. The latter is only one part of the equation. How could you attribute the rise of rental need to only newcomers? It is a logical fallacy. You guys act like only newcomers add to rental needs. It's not true. As a matter of fact very few newcomers actually rent apartments where they live alone. It does not happen. Newcomers live 3 or 4 with other newcomers, they live in basements and many are in shelters. These are the people you blame for your housing crisis because immigrants are always blamed, period. What is driving up rental cost is capitalism, it is part of the system that rent cost rise. If your logic had any sense at all, it would not explain how different western countries with different immigration policies all experience higher rental costs. You guys are just being racist as usual. Remember that you came as an immigrant yourself. If considerations about immigration were only about private interest macro economics, then why did Canada welcome your family and why wouldn't Canada welcome the immigrants of today? Do you remember what people were saying about your immigrant parents? Please stop.
@user-vc1wk5en9z Canada is in a population shortage. This immigration blaming is a distraction from whose really at fault in this housing sector, and no its not bureaucracy who is at fault either. It's just plain scapegoating to save what's left of their positions
@@Myviews-y5jThe problem is not with immigrants them self but with non-responsible government immigration policy. The current government invites a record high number of immigrants for which they don't have the infrastructure ready. Your statement about racism is irrelevant here. The rental cost is not driven by capitalist greed only. It is an equation between supply and demand and other reasons (inflation, cost of insurance etc..). If your apartment stays empty for a long period, you will drop the price in order to rent it. If you have a high demand for your dwelling, you will bump the price accordingly. Simple as that.
I’m a new dad, I moved to the Bay Area a few years ago and I’m thinking of purchasing a single family home, but with real estate prices currently through the roof, is it still a good idea to buy a home or should I invest in stocks for now and just wait for a housing market correction? I heard Nvidia and AMD are strong buys.
it’s a personal decision, but according to Forbes, housing activities will remain stagnant for the most part of the year, so maybe hold off a little.
well you could put a downpayment on a home and as well diversify as much as you can into Ai and pharm. stocks like Pfizer and JnJ.
Certain Ai companies are rumoured to be overvalued and might cause a market correction, I’d suggest you go with a managed portfolio, but even those don’t perform so well, so it’s best you reach out to a proper fiduciary to guide you, that’s what works for my spouse and I.
I won't pretend to know everything, though. Her name is Melissa Rose Francks but I won't say anything more. Most likely, you can find her basic information online; you are welcome to do further study.
Excited to be selling my home this spring and moving down to Georgia. Can’t wait to get out of this dumpster fire of Country. I’m a proud Canadian but I can’t do it anymore! The US is far from perfect but a shot at an affordable middle class lifestyle is worth taking the chance.
If any country is a "dumpster fire" it's the US. Politics in the US have become so toxic it's damaging the very fabric of America society.
Go for it man. We are headed down in 2 years. Better weather. Better purchasing power.
Are you moving to work down there? I’m considering the same thing. Changing jobs and moving to US Carolinas, Georgia, Florida or Texas.
I have like 300K equity in my house for a 650K house.
I can use 300CAD to purchase something in US market. What do you think? I’m not very well versed in American real estate. I just want to go to a red state that’s warm.
@@JJ-qp6jw investor visa easiest way. Business plan to have 100k invested... food truck or something. Anyways pretty easy doesnt mean you need to blow 100k. Just that 100k.will circulate in a business. Ya leaving this country before it goes completely to shiiiit.
I am one of those immigrants that arrived in 2019 and you are correct on your assumption, I am on the go to house hunt this year. I have all the checkmarks crossed (downpayment, emergency fund, credit score, no kids lol, etc). Funny enough I am also the specific case of renting a basement. $1,072 a month, all utilities included for a one bedroom, one parking spot, shared laundry. So that allowed us to bank all these years. No rush to move out soon, so we'll just lowball any properties we would like. My realtor will probably not like the paperwork I am going to put him thru but its his job if he wants the commission.
Thanks for the info and comment. Don't overpay that's for sure.
A friend owns a brokerage and another who now have Cdn citizens and sold their first home thru them. They bought in a hurry the first time having been here not long. Funny for this second house they made our broker friend look at ~50 houses before buying. Too funny. First home was fully paid so they rented it out.
The title alone made me subscribe. Love honesty…
I respect your hard work buddy
Traditional markets there had always been a spring bounce after a winter lull.
Housing has to go down one way or another.... home owners that can't afford mortgage payments with higher interest rates and renters that can't afford high rent prices with alternate rental options running out...then as mentioned, inflation and unemployment deepening the situation.
I agree with your comment but have to add that prices should decline from here only in "Real Terms", not in nominal terms as the financial system can't afford a nominal price meld-down.
@@DarR1299 I understand your point.
@@DarR1299 You are right, Canada will inflate their way out of this mess. Hard assets looking better and better
Sure, but builders won't build for discounted prices. So, I think we are stuck between a rock and a hard place going forward. It costs are certain amount to build a square footage of home, a certain amount to buy a lot, to connect it to utilities etc. - all of this creates a floor on prices. Sellers will be reluctant to sell their properties below their real value and builders won't build when they can't get back what it cost to build the home. Banks also set a floor - you are forgetting that last year they were ordered by our gov to be compassionate to struggling homeowners and make exceptions... they won't allow you to offload a property for less than it's real value, so I am seeing forced sales turning into "leasing" of the property, or amortization periods are getting extended for decades to avoid having to sell. AND... we are also forgetting about the fact that if there are folks who have to sell, Tricon/Blackstone have loads of investors' money (even our CCP is in vested in them) and they are buying up SFH that you can then lease back from them. That is the grim future - so hold on to your house if you can, because SFH inventory will continue to decrease as they get bought up by corporations to lease back to you. And this time IS DIFFERENT than in the past... there is NOT enough supply, so it is naive to think prices will slide further when rates go down. The pent-up demand is huge, the amount of money on the sidelines is also huge and accumulating pleasant interest if invested smartly. So some buyers on the sideline are doing wvery well and accumulating wealth to soon afford themselves a better home.
@@Joey-c7xAbsolutely. We're very near to the floor right now. Banks will kick and scream like 16 year girls seeking attention if collateral values get much lower. Talking heads (with no offense to Jon), must get a grip that banks need collateral to issue credit. A bank that does not lend does not have revenues. No revenues, no profits. No profits, no share price. No share price, no executive bonuses.
Rates should go higher, albeit all the pain but inflation is the worst.
and stay higher for years.
Rates are staying at this level as far as mortgages are concerned because the bond investors are finding our country nuch riskier so even if the BOC cuts the overnight rate lowering the front end of the curve dont expect the 5 year yield to come down as it will more then likely rise as the frony end comes down
Great update Jon
One property sold here "at asking after 8 days", except it's been on the market for months. The truth is it sold "260k below asking after 6+ months". Another property listed with offer night for 799k, relisted a day later at 880k after it didn't sell on offer night.
Thanks for the info
Where? In CA in desirable areas, multiple offers in just days. Median price 800's
Hi Jon, thank you very much for the data. It is very helpful.👍
No problem, thanks for watching and commenting
Nothing matters more than printing money and inflation. If we keep printing- the value(price) of the home will go up.
Exactly.
Problem is the cost of building a new home sets the selling price for all homes. A new home builder expects to sell what they build for the costs plus labour & profit (their wages). When you purchase a preowned home you may spend a little less, but the price is more about replacement cost. A buyer is willing to spend a certain amount for a used home instead of paying the price for brand new. And the sellers need to make a certain amount in order to buy their next home. If the used home market drops drastically, then new home builders will not be able to sell their homes at what it costs them to build, so naturally they will stop building and the inventory will go down. Then what do you suppose will happen to the existing homes for sale (supply and demand)? Adding to that is the rapidly increasing price of land (again, supply and demand).
I keep seeing the headline that the Spring Market will be hot, bidding wars are back and lots of people are ready to buy. Although I own I would like to see the prices come down some.
Good work bringing that up nobody is talking about this inflated stock market it seem way to high compared to all the remaining data ... someone will sold soon
Thanks for the comment
Had a chat a few days ago with GTA realtor. She said literally this - "almost nothing moves". There are buyers but very few sellers are willing to accept those (low-ish) offers. It's a standstill, but it can't stay like this forever. Something will give.
The bottom line is people need a place to live.
@@Joe-mz6dc
The bottom line is always how much money or credit you have.
The sellers will blink first because the buyers control the prices. The buyers have the cheque book. No one HAS to buy but many HAVE to sell.
Watch what happens when mortgage rates double bottom on your ass.@@Stormshfter
Bottom line is people need employment and a salary. @@Joe-mz6dc
Well done, Jon! I've been watching you for quite awhile - the straight stories you share backed by data and your experience should be considered by everyone. You certainly made a difference in my house sale - very very positive difference. Subscribed and will continue watching you for truth - thank you for all the hard work and insight. You're a good man and a good realtor who obviously puts the interests of both sellers and buyers first.
Only joke here is "Spring" 😂
-20 here in Alberta.
we've had spring since Jan 1
Lots of overpriced luxury condos in Kitchener Waterloo empty. People can't afford the mortgage plus condo fee. Can these investor builders hang on forever???
they will slowly get bled dry
Spring market will be a bull trap for sure.
When are we going to see the recession you have been predicting for over a year now? How about all the job losses?
Thanks for your the genuine and unbiased advice
Brampton county had to put strict laws for basement renting as the capacity exceeded much more legally
do they still enforce?
Hi Jon, what is your opinion on the Edmonton market? The prices are increasing over 5% with low inventory, the word is the prices are going to keep increasing significantly, will the proces fall in the near future here in Edmonton? We are getting a lot of interprovincial movement.
Really nice data and charts. Especially like the buying recipe/batteries!
Awesome thanks
Great content.
Thanks
Thank you for weekly update
no problem, thanks for watching
Home prices ain’t coming down in fact with constant attack on landlords with accusations of charging sky high rent affordability will only get worse when investors start to bail out from real estate sector. People fail to understand that they are the real drivers of inventory
thanks for the comment
Your right
Good report. Thumbs up subscribed. Keep up the good work.
Great data, however the home prices selling over or under list misleading. Few years ago house went up once sold over asking. Now? It goes up 7 times. Then sells. It's not registering the first time they list. Just the last listing.
amazing work and data, love it, thank you
Thanks John
Thanks John for another great video
Great analysis! Keep up the good work.
Thanks will do, and thanks for watching
Let's see if these buyers qualify for mortgages 😮
Let’s see if renters qualify for the going market rent !
Meaning prices going down especially in a recession with job losses
Hey Jon, great videos. What do think about houses on the extreme low end of cost (under $400k)? Do you think those are going to drop as well?
yes, but it won't be so bad in that price range
Mark Carney had the opportunity as finance minister to control inflation by raising interest rates early on ,in stead he lowered rates putting the country were it is today !
Elected MPs or MLAs don't have control of interest rates.
The Bank of Canada controls the overnight rate, which is really just a guide.
The bond market controls the fate of the mortgage rates that are set by the banks.
If bonds are risky to buy they demand a higher payback on maturity. Higher payback on bonds translates to higher mortgage interest rates set by the banks.
Hope this helps.
Good knowledge in this video
Thanks
FOMO, yes, but FOMO of missing the next meal or rent or payment.
It's so sad, having to pay a house over 1 million and on top of that you have to "share" (rent) the basement to be able to pay your mortgage!! you can't even enjoy your entire space :'(
this is what Canada has come to
Great update John.
Thanks
Thank you, Jon.
thanks for watching
Very insightful again.
Thanks for the comment
Thanks for the updates! 👍👌
No problem 👍
TV news said tons of Buyers just waiting for interest rates to drop 0.25% so they qualify. .... Everyone get ready !!!!🧐😂
😂😂😂😂
Hi Jon, may I suggest that you overlay your Sales/New Listings bar chart with a sales line and an inventory line?
thanks for the suggestion
Bears on Parade! 🎵 🎸
Great info 😊
Thanks
Thanks for not humming and hawing!
no problem
The multi factor indicator is very helpful.
You don't know how much I get downvoted on Reddit by saying that immigrants are not raising home prices, but it's instead a function of the M2 supply. Sure, immigrants are raising rents, as your graph shows, but not home prices.
But alas, telling this to people results in downvotes.
Thought experiment:
I'd like to buy a house but don't like the prices. So now my instinct is to rent and wait out the bubble. Unfortunately, due to high immigration, rents have near doubled, and my plan is not so attractive anymore. And with 500 000 immigrants coming in every year for at least the next 3 years, the rent situation is only going to worsen. As a result I'll probably end up buying an overpriced house anyway. And what about older people who would otherwise be cashing out if only they could find reasonable rent that won't quickly eat away their nest egg. Maybe they don't end up moving either, which means fewer houses hitting the market, which means less supply.
You see... immigrants do keep the market bubbled. And Reddit should be downvoting you. ;)
@@yiranimal I never said immigrants didn't increase rent. I said money printing will increase house prices, regardless of rental supply.
@@SlykeThePhoxenixRight, you wrote:
"You don't know how much I get downvoted on Reddit by saying that immigrants are not raising home prices..."
My point was that they most certainly are raising home prices. A large part of that is the result of what they're doing to the rental market. It's all connected and quite simple. However you're correct that printing money has contributed to the inflation of assets, including home prices.
Listen to 2:35, are you seriously saying when rates fall prices fall?
I wish you would do this type of analysis for Alberta. Its a completely different picture
Jon….. you are the man🔥
Key word politicians, talking heads and media omit from headlines and sound bites: AFFORDABLE incl rentals. Too many corp rental mgt cos (btw tenet and developer) who don’t do their job. No motivation to. They skim off top of their monthly % fee from all units for profit and do the min. Needs to be stronger accessible legal systems properly funded and regulated that favors neither renter and tenet. Edit: urban planning videos have great content on why/ how city designs and traffic are so much more effective in Europe esp Scandinavian countries. Not just building more suburbs that incr need for taxes (good videos on this.) Majority of money for an area comes from the downtown core of cities vs suburbs. If I find the videos again I’ll put in comments.
Nice charts. The title really suits my Peglyte prep I'm doing right now.
@Jon maybe I missed it, but can you please do a video on the primary cause of housing affordability?
Other RUclips Realtors keep saying it is a "supply issue", but as far as I can tell the supply has been relatively stable.
I would love to see one chart from 2002 to 2022 with the following info:
- housing supply
- money supply
- interest rates
- house prices
- incomes
- population
The primary cause is speculation. The second cause is money laundering, the third is fraud
Because the elephant in the room is pricing. And everyone is HODLing, including banks issuing those loans.
😂 you cant be this daft. look around you at all the indians lmao
Yes it seems like deja vu like last year and by Sept 2024 prices were down.
yep
Buy now, to the mooooon! Real estate only goes up forever
Anyone remember Ross Kay?
5000%…. Nothing to see here 😵💫
People are going to hold out for a while now that fixed income pays more than inflation. Put that down payment to work!
yep
More density and more population is helping with canadas climate and environmental goals. I’m glad we are on the right path moving into a bright green future.
haha, yeah well said
homes will not come down until more new homes get constructed at affordable prices.... does not matter the market people is living int he crazy bubble, and until the Feds and the local govs do not incentivice builders to contruct new cheaper homes then prices will not go down, i will wait 2 year to build my new prefab :D will be probably on the floor proces after the goverment have started to implement stuff for builders
Are these immigrants actually in the home market? What kind of mortgage could they qualify for?
Not much. Uber isn't paying great. But no layoffs.
Banks like HSBC have been busted committing mortgage fraud. A blackjack dealer in Ontario holding mortgages for 4 houses, claiming he made $400,000k a year doing online work back in his motherland and the bank not verifying any of it, all while only making min wage in Canada. Other banks have been called out as well yet no one is investigating. Hopefully that answers your question.
@@ZRadenSo the answer for the OP is:
More than you can afford (legally) pal.
Interesting
Brampton is
You mean all the realtors say it's all good.
something like that
I live in a basement and I’m not an immigrant
I live in a van and I’m not an immigrant. Just don’t want to give all my earnings to a landlord. Rental rates are just stupid right now. Smart people know how to dodge this. I have saved huge $ in the last two years by avoiding the housing market. Lucky my kids are grown.
Jon, does your data/trend apply to Calgary? Pundits all say that hoards of people are flowing into Calgary and there will never be enough homes to sell no matter how high the prices go. I believe in data, but I can't see how it applies to Calgary. Please enlighten me.
People are flocking to Calgary to purchase because it’s the last big city in Canada that you can still get a home at 2019 prices. Once the market breaks it will be devastated just like everywhere else
It doesn’t matter which way it is going everyone is frustrated homeowners and renters we are being crushed by the idiot government and the greed of individuals who are ruining our lives .
There's a simple solution: permanently ban foreigners from buying real estate and force them to sell their holdings within the year. It's not like I can buy up houses in China and rent them back to the Chinese.
But I thought real estate always goes up 😂
except when it's going down
@@jonflynn interesting. Not seeing any slowdown in my market (Mississauga)
Hey Jon if you control for inflation, home prices are already at 2018 prices. Why would we expect prices to go below then, given everything thats changed about Canada?
Prices are out of line with peoples incomes and we are in a debt/credit bubble that is unsustainable. GTA real estate and various citys within an 1.5 hours drive were about 20 percent over valued prior to the pandemic and were due for a correction instead prices soared 40 to 60 percent and have
since come down 15 to 30 percent depending on the specific city. Therefore prices are over valued 35 to 50 percent before being adjusted for normal inflation so lets call that 12.5 percent so some areas are overvalued about 22 percent and some as high as 37 percent. Tack on say 5 percent for immigration which should be 1 for 1 so meaning a 5 percent increase in prices and you are looking at best case price declines of 17 percent to 35 percent between now and 2027 depending on the exact city. Hopefully we see a controlled burn over the next 34 months which will help keep the banking system solvent instead of an actual crash due to liquidity issues. This is your most likely scenario if mortgage rates stay where they are.
How will prices fall if rates are cut? Could you please explain this as the logic doesn't make sense to me. If rates are cut, why wouldn't prices start to rise? Thanks.
Because if rates drop that means the economy is in really bad shape....jobs are being lost... companies are shutting down....so history...this resulted with price drops in housing
exactly what treaty8631 said, also the lag effect, will take 2 years for low rates to take affect just like it's taken almost 2 years for higher rates to take affect. You haven't seen anything yet.
So when would be the best time to buy? I'm a first time home buyer located in BC. Thanks@@jonflynn
@@jonflynnI'm not sure that's why governments cut rates these days. We've entered a new era of pedal to the metal, quantitative easing, import people economics. Were times so tough and unemployment so bad over the last 15 years that they had to keep rates cut to nil the whole time? Not at all. They just continue to inflate bubbles... it's the new ethic.
What we need is for the stock market to crash and a good, healthy recession. In order for the fiormer to happen we need some major event to send it tumbling. The seven year cycle no longer applies.
This is not really what we are seeing on Vancouver Island. Record low inventory, increasing prices and things starting to sell quickly. People are listing their places for sale fo fear of having nowhere to go. Why so different?
Because Jon only says the market is crap and is going to crash. It's his narrative and he is sticking to it.
Different demographics buying properties in Vancouver vs Toronto. Vancouver will always be high demand due to offshore cash lending there, climate, and beauty.
Toronto is the same. This guy doesn’t know what he is talking about.
It's a brave person who dares to catch a falling knife.
There's a lot of brave people out there
Great video, Jon!
Sorry but do you also work as a car salesperson at Toyota?
haha, I love Toyota's but no not employed by them. My brother owns a car dealership and I help out from time to time. Good eye
Haha I called one of Toyota’s dealership today and the sales guy said my name is John Flynn so I thought it must be you 😅
Why does it feel like this is the start of some sort of a slow slow crash of the housing market, or not just the housing market but overall economy overleveraged on housing?
Let’s hope so.👍
I hope not.
go to hell :)@@seahorse2
Because it is
stop dreaming... prices will stay high, plenty of fools out there!
So Jon why do you think prices of home will or should go down 30-50%? Will supply of homes increase faster than population(demand) growth? Will people stop immigrating to Canada? Will rents go down to make that option more attractive than buying?
Well, buying for first timers is not right time for them. I will say, people selling their homes for whatever reason at a high price can use that to upgrade to another. It doesn't matter if their home depreciates as tbey already took out equity on previous home sold. Yes, interest is high but thats temporary. Deals are also coming for cash buyers to.
Some people just can’t readjust to the new reality. Unless they can hold for the next ten year waiting to profit they will get burnt. And deservedly. Greed doesn’t always win.
In the end greed always loses
Multiple offers lets gooooooo everything is selling go go go go. Call frank leo lmaoo
Totally crap, yes.
yep
immigrant whos category is investor might be able to buy a house with average here over a million
Saw a graphic that avg. house price still over 12 times the median wage when it should be around 3.5 with higher mortgage rates and the banks solution is amortz. of 250 years ..lol. This mess will be fun to watch and glad sold at covid top and moved to a friendlier tax jurisdiction outside good old Canada eh ? 😄
I can send you fraser valley (2nd largest n fastest growing market ) data if you like
Also, it's important to consider that the economy is slowing down. Job losses are cumulating, people line up at job fairs, inflation and high rents are eating people's bank accounts. I saw in the news recently Montreal saw a $1 billion reduction in foreign investments in 2023. If people don't have a down payment, they can't buy a house. These immigrants are mostly in that situation right now, so even if they want to buy, they don't have the cash in hands for it. And with people renewing their mortgages into 2025 and 2026 at higher rates, distressed sellers and foreclosures will only pile up. I see a bunch of buying opportunities ahead for those who are saving for it.
Why does unemployment need to rise for home prices to fall?? Does this mean people can’t afford mortgage payments so are forced to sell?
History. Recession indicators. Inflation. Money Velocity. A bunch of reasons. Same reason why not getting the BoC rate above CPI at peak was a huge mistake and inflation is coming back and simply basing.
For about THREE MONTHS we were restrictive.
More common is your rental properties lose money.
Renters are 4x more likely to lose there jobs than homeowners.
If unemployment rises.
Thanks for the information guys!
Job losses equals rent losses equals more homes on the market as there is no one to rent
Do you own property Jon? If so, how many?
One house, primary residence. I did own multiple properties at one time but sold them years ago, didn't want to be involved in the greedy real estate hoarding game.
I agree with majority of the people on the internet talking about the lunacy of the real estate market. You guys are the moral voices. However until anyone recognizes that the banks run the show here and the US and will bend rules to make sure there is not a crisis that jeopardizes their collateral (i.e. real estate) then you guys don’t understand how the world works. Doom and gloom clickbate doesn’t help anybody out.
How about they raise everyone’s incomes to finally close that wage gap that’s been building for decades. We’re seeing corporate profits skyrocketing and yet since 2020 our buying power has eroded by 23%.
Socialism is what got us in this situation in the first place
You said it "Corporate profits" They don't want to share!
They want people to be poor.... they're too rich for their liking
To raise the income, first Canadians must be educated on how the economy is meant to work otherwise inflation will occur
can you take into account the 158,000 extra deaths and the number is going up each month. governments are looking into it but the numbers of extra deaths from last year will make a difference in the house sale numbers, also why are none of you talking about jab injuries numbers? a lot of people can not work if your not working your not buying a new home
Keep listening to this gibberish. House prices will finish the year 10-15% up due to lack of inventory, increased sales, and upcoming rate cuts. As simple as that. It is dangerous to be married to your ideas.
This is all BS. It will go up like 20-30% over the next 3-4 years. Screenshot my message!
No no, Jon always says the crash is just around the corner. He will be doing the same videos in 3-4 years saying the same thing.
1st comment :)
Wow that's some major math gymnastics to try and fit your narrative Jon. Like cutting off charts right before they dramatically shift away from your narrative.
I guess if I did as few deals in a year as you do, I would probably say the market is crap too.
I don’t Know, what John is reporting seems to line up what I’m seeing in our area very closely.
I think with all this doomsday stuff, what is being forgotten is the ACTUAL REAL COST of building a house. That won't be coming down anytime soon, if ever. Labor costs will go up, not down, materials might stagnate, fees for building will also go up... this all equals higher or at least stable, for now, home prices. The aforementioned give house values a FLOOR and nobody will be selling below that because then nobody would be building. So the best advice is to do the math, have a good agent who helps you calculate how much each listing you are interested in would cost to build TODAY, not YESTERDAY, and go from there. There are already some good deals out there with houses actually selling for the real value of building one today, purchasing a lot, hooking up utilities etc.
So I would like to ask you Jon, do you really think people are going to start selling their homes for less than real value? I sincerely doubt that, RE agents won't hear of it and won't even allow it.
the industry is evolving together with new materials / prefab processes / concept.
example is Elon Musk's mini house from Boxbal company, only 50k USD, a capsule house is not only low-price, but also a luxury design, anti-fire, anti-earthquake, low maintenance. NZ govt employed a Chinese company to build 10 level buildings with prefab parts in 48 hours, with a very low costs and 10 times stronger.
with this in mind, will builders still follow the approaches century old at unaffordable costs?
will buyers like me willing to buy , especially with a heavy loan,
for the moment, certainly there are still people willing to buy and still thinking they can sell in future at a higher price to somebody else.
I don't know anyone who would want to live in a box (ummm capsule). It's not going to be popular. The scenario of Tricon/Blackstone buying up more than 50% of housing stock and leasing it back to us is more probable. People want to live in comfy homes, and will accept the fact they will lease for life rather than live in a capsule.
@@tsingtsao568
@@Joey-c7x Sir, very good argument, by diminishing Capsule house, and I would also site Celebrities as arguments, so even people like Elon Mask can live in a Boxbal mini house, why not me ? The capsure house, is 40m2, 5-star category, 4.5k Euro, but a studio you could get here ? for that 30m2 studio, I could by 4 , considering the land, septic/solar , I bet I can still buy 2 = 80m2. the question really is who would buy a 30m2 studio at 1/3 of million ?
45k Euro, type. and the Elon Mush type of mini house is less than Capsule house.
Also I'd rather choose Capsule house than Elon Musk one, because it is made of Aluminium alloy with spacious windows all over, automatic curtains, equipped with 2 ACs, a studio congested in a building, that is what I call a box.
@@Joey-c7x by the way I also heard about that news, the question is how they would put that into action ? I can image, when the market crashed resulting abandoned houses, insolvancy, etc, somebody has to step out to clean the mass, the question is at what price they would think it lucrative.
2 comments: 1) You and everyone else who have blamed immigrants for the housing crisis are wrong. I have always said most newcomers live by renting rooms in houses. They actually help homeowners pay their mortgages. Very often they help immigrant home owners pay their mortgages because these are the homeowners willing to rent to immigrants. So newcomers arrivals do not create more housing crisis, they help with it. 2) For someone who has blamed everything on immigrants for almost 2 years, I find it hilarious to hear your own immigration story. Man, even the federal government had to shut down international students admissions because everyone started saying they make the housing crisis worse. That's not true.
Quite disagree. 1)Newcomers increase demand in the rental market so rent goes up. If rents go up more people are willing to pay a big price for housing. Everything is related.2) This crisis is not about lack of renters, it is about lack of inventory. So newcomers are not helping but making it worse.
@@G233-s6x Not true. This is a narrative that always happens in society in times of austerity. Do you have the data on how many new renters join the market every year? If you find that data, you would have to subtract how many people leave their parents house to rent and how many people move from houses to rentals, before you consider the contribution of newcomers to the number of renters. Your equation would logically include: New renters in the market= nb of people who left parents house + nb of people moved to rental from owning + nb of newcomers who need rentals. The latter is only one part of the equation. How could you attribute the rise of rental need to only newcomers? It is a logical fallacy. You guys act like only newcomers add to rental needs. It's not true. As a matter of fact very few newcomers actually rent apartments where they live alone. It does not happen. Newcomers live 3 or 4 with other newcomers, they live in basements and many are in shelters. These are the people you blame for your housing crisis because immigrants are always blamed, period. What is driving up rental cost is capitalism, it is part of the system that rent cost rise. If your logic had any sense at all, it would not explain how different western countries with different immigration policies all experience higher rental costs. You guys are just being racist as usual. Remember that you came as an immigrant yourself. If considerations about immigration were only about private interest macro economics, then why did Canada welcome your family and why wouldn't Canada welcome the immigrants of today? Do you remember what people were saying about your immigrant parents? Please stop.
@user-vc1wk5en9z Canada is in a population shortage. This immigration blaming is a distraction from whose really at fault in this housing sector, and no its not bureaucracy who is at fault either. It's just plain scapegoating to save what's left of their positions
@user-wx6wy9dp9e this cannot be blamed on capitalism, for it is pure greed that is at play here m
@@Myviews-y5jThe problem is not with immigrants them self but with non-responsible government immigration policy. The current government invites a record high number of immigrants for which they don't have the infrastructure ready.
Your statement about racism is irrelevant here. The rental cost is not driven by capitalist greed only. It is an equation between supply and demand and other reasons (inflation, cost of insurance etc..). If your apartment stays empty for a long period, you will drop the price in order to rent it. If you have a high demand for your dwelling, you will bump the price accordingly. Simple as that.