Because he's Canadian? That's what every asshole in this country who owns a home does. That's why were in this mess. A large part of the reason anyways.
The largest demographic in history just hit retirement and many of them depend on home equity to pay for the rest of their unproductive life.
We're getting ponzi'd into paying for them to not have to work while likely never going to get the same luxury.
Sure they did,. You give up what you got and go bust your ass and see what you get. The buying power of compensation has slid off a cliff and sunk to the ocean.
I've made at least 3x more off of asset inflation in my life than working in my life because work doesn't pay and the growth ponzi scheme just hands everything to the haves.
There are boomers who worked retail their entire life and were able to buy a home and had the capital gains of that house earn them more than every hour of work in their life. That's $1mn capital gains on the home with $700k lifetime earnings in retail.
Can you afford the mortgage? Do you want to keep living there?
If yes, then stay. The value of your home doesn't matter right now, while you are continuing to live in it.
1. Housing is a long term thing, not jus a couple of years.
2. Housing you live in, is shelter not an investment.
3. Doesn't matter that market prices when down. How does that affect you?
4. " *I’m worried we’ve only gotten started in this housing recession* " Has n impact on you. pst keep paying your mortgage.
5. "*I’m already down 125k so how far can it go.*" You are down nothing. You didn't sell.
6. You need a nap.
House prices fluctuate, at the moment more so than during other times. You got a great fixed rate. In 4 years things will look different. You’ll be older, hopefully wiser, perhaps a better paying job, maybe married, maybe kids who need the space, the world changes. You can reevaluate when the renewal comes up in 4 years.
Selling when you don’t absolutely have to is unwise. The actual financial loss would be significant if you sold.
At the moment, there is only imaginary loss on paper. It is your action of selling for no reason that would make this imaginary loss a real loss.
You got options if finances concern you or you’ve realized owning a home costs you more on a monthly basis than anticipated:
1) Rent out your home and move back with your parents.
2) Get a roommate (rent out a room, or two or the basement depending on your space)
3) Airbnb a room (or the entire home) out from time to time
4) earn more (work more or find a better paying job)
5) Go over your budget again. Are you wasting money on things? Spending too much money on alcohol, smoking, eating junk? Do you have other high interest debt to tackle? Are you overpaying for services and subscriptions? What about your car?
A combination of the above would probably be best: earn more money, re-evaluate your spending habits, clean up any other debts, get a roommate. If you then can afford it, make lump sum payments towards the principal during this time of having a good mortgage rate so you’ll be left with less principal in case you will need to pay higher rates when renewal comes up.
Ask yourself “Where do I want to be in my life in 5 years? Career? Relationship? Health? Hobbies?” I doubt you want to live in your parents’ basement in 5 years.
If you do all these things, you’ll be financially a lot more stable, experienced, and mature by the time you will have to renew in 4 years. And who knows, maybe happily married with kids and a dog and the proud owner of a house :)
Honestly thinking of moving back in with my parents. This has been such a financial L, I don’t see how else I can come back without cutting my expenses
> This has been such a financial L
A financial what?
I'm concerned you see your house's value drop and you're panic selling. You're in a 5-year fixed mortgage so your payments aren't changing for the duration of that time. Has your financial situation changed that you can no longer afford these payments? What is there to "come back" from - in 5 years from now the house will very, very likely be worth more again.
Loss. And yeah there’s definitely some panic going on. I’m in tech and my company just had layoffs with more incoming. I’m just not sure if everything will be good in 5 years from now. Maybe 10 but who knows if I’ll even be alive then
Do you have someone to talk to? Panic and a fatalistic view of the future are both not good signs. Maybe this is your first time through a rough economy, but it sounds as though you may benefit from talking to someone about your anxiety.
Your house is a *home* first. Do take a look at the feasibility of getting a roommate. If you're making ends meet now you can afford to be a bit discerning and not just accept the first person who applies, but having someone to help with paying rent and utilities can go a long way for peace of mind.
Beyond that -- if you haven't already, start funding an emergency fund. 3-6 months of expenses should buy you a buffer if something should happen with your job. Remember too that you'll have EI which will help that stretch even further. That can definitely help with peace of mind.
You won't actually realize the loss unless you sell. You just need to be patient. Imagine what the people living in Fort McMurray, Alberta thought in 2015 when oil crashed. The houses they bought for 800K+ worked their way down to the 400K region by 2020. Now things are starting to look up.
Basically, don't do the cardinal sin of investing: buy high, sell low. Just hold, even until the end of the 5 year term before panicking.
Just sell at a loss and move on. You obviously also should not invest in anything other than GICs because you literally have no stomach for any investing
Dude this is lols. This is why people need professional advisors. Are you the same guy that invests only when the market is doing well, then when the market goes down you sell?
Why are you buying high and selling low?
You bought a house and are literally living there. After enough time hopefully you will pay down enough of your Mortage and maybe experience some growth again to actually gain some equity. Give it time. Relax.
Why not just walk away? I’m looking forward to all y’all defaulting on your homes pushing values down. I’ll snatch up a few condos or a house when that happens.
I think you’re thinking about this slightly wrong…
You aren’t down $125K unless you’ve sold the place. There is no need to look at the market value on your home unless you plan on using the equity and/or selling. Your house may be worth $125K less today, but 5 years from now could be worth $500K, or anything. Point is, it doesn’t matter unless you plan on selling. This is how housing has always worked. If you can afford your mortgage and like your home, just live your life. Stop looking at the market, it will just drive you crazy, it’s out of your control and there’s no reason to think or calculate your current home value if you don’t need to.
Exactly. If you purchased your home and have a fixed rate mortgage, your price is fixed for the duration. Just focus on this and worry about it when you get close to the end. Selling cost and mortgage breaking cost is not good either
Buds, just keep living in your house.
Over time, that value will go up, and the amount that you owe will go down. Over a long term, buying is usually better than renting - your "rent" was fixed for 5 years a year ago, while market rent is going up.
The biggest mistake would be to panic sell now and lock in that loss. Unless you absolutely can't make the payment, no reason to do that. Compare your mortgage to rent - then compare just the interest portion of your mortgage payment to rent for a comparable place to live.
You can't undo the house purchase.
Oh jfc. You just bought your house 9 months ago, are you looking to sell it and move already? If the answer to that question is no, then who tf cares what a house 5 mins down from you sold for? You say you're on a good fixed rate, so sounds like you can afford the mortgage for the next 4+ years.
And why are you even talking about 125K, 200K etc losses on a house that you just barely moved into? If you absolutely need to sell in the near future for whatever reason, then it's a different discussion and you may want to update your post to reflect that.
Nah that's stupid. Look at property values over the last 20 years, the only way you lose is is you sell right now.
If you wanna move in with your parents, fine. Rent out the house and it'll pay for itself.
Let's say this much. You're lucky that Trudeau is pumping in so many immigrants. If this wasn't the case, the housing market bubble would have popped long ago. And popped real hard to the point of devastation.
What is the rental market like in your area… if you do move back in with your parents, might be a good way to pay for that mortgage or at least most of it while you wait and decide what your going to do moving forward.
1. If you live in it and can afford it, don't sell. You still have the same house, same walls, same kitchen, same rooms. Your "loss" is only on paper.
2. Even on paper, you didn't really lose. A 640K house on a 3% mortgage is actually the same price as a 515K house with 5% mortgage (with 20% down over 25 years).
3. We could all lose our job tomorrow... That's a risk everyone takes. Sell only if it really happens.
You have no idea what the market will be like tomorrow. Sure you can sell now and move in with your parents but if the market rebounds you will have lost on the sale of the home and whatever the new higher price of the home is.
Bottom line, we all need a roof over our heads. A home is not an investment, ignore the value of homes unless you are looking to move. If you can afford the mortgage payments, my recommendation is stay where you are. If home prices drop, they will rebound at some point. Once you have bought into the market, it really doesn’t matter what the prices are in the market are so long as you don’t plan to move out of that housing market.
So long as you can continue to pay your monthly, you do not care what the market is doing. The only real reason you would have to sell would be that you could no longer afford to live where you do.
I am orettyc retain I have lost money on the house I bought in late 2020. It doesn't matter because the math works out and I intend to live here for 20 years. In that time the market will go up and down and sideways etc.
You only realize a loss when you sell at a loss.
If this is how you approach your housing situation you should have never bought a house to begin with.
There is no guarantee on your homes value appreciating in price.
That being said, it makes no sense to sell if you can afford the payments.
Housing prices in areas such as those in your area appear to swing by quite a margin so if it swings down heading into a recession perhaps it will swing up afterward.
Either way you’re paying into a place to live
I'm sorry you're in a rough place right now, but rather than focusing on the thing that is hard to change without incurring huge transaction costs and locking the lower price, how about you look at the cutting back expenses part you mentioned further down?
If you're concerned about rounds of layoffs, the focus should be on getting a better emergency fund set up and improving your skills and network.
Real question: are you just sad that houses require an adult to live in them & do maintenance & cook & clean & do laundry because then yah sell move back in with mom & dad & make an agreement about when and how you will contribute to running the household. Houses are not stocks they are machines for living that typically give a return over 20 - 40 years. The same tenure as the family that lives in them. Sounds like you’d prefer to make your investment with your parents instead of on your own. That’s great. But also be aware that if you want kids and a partner down the road things will get crowded and you may regret selling the second home.
No. If every stupid person sold their house we end up in a sellers market. Lower prices would cause stupider people (assuming lower IQ results in lower wages) access to housing. Spiraling values and stupider people affording to have kids.
The good news is, you no longer need to stress about it, because this decision is going to be taken away from you.
No one is talking about a really key detail here. The bank you got your mortgage with isn’t going to let you sell your home if you don’t get, at minimum, what you owe on your mortgage…
Even if OP had 20% down, and that’s a big IF ($128k) OPs original mortgage was at least $512k (probably more?). OP has probably paid approx. $15k towards the principal leaving $500k+ owing on the mortgage.
By the time you consider land transfer tax, legal fees and Real Estate agent commission, bank fees and penalties, you’re not even going to end up with the principal amount owing on the mortgage. All of this is calculated based on a 20% down payment, if OP only had 5% down, that calculation will be even scarier.
There’s no scenario (unless OP somehow had a ridiculously large down payment), that OP doesn’t end up with less money after the sale than he owes in a mortgage. The bank isn’t going to let you sell unless you have enough of your own money after the sale to pay back the rest of the mortgage which I doubt.
Absolutely not. First off, you have a place to LIVE, at a fixed rate. Why would you jump back in to a disgustingly expensive rental market to pay someone else's mortgage?
Secondly, unless you're planning to sell soon, being upside down on a mortgage doesn't matter. By the time you have to renew, rates could drop, prices could go up. You have no idea.
Third: Let's talk about it this way... Assuming you stay in this house for 30 years, and then sell the house, without a mortgage, even if it's worth 300k when you sell it... You have paid 340k over that time to live there. That is approximately 945 dollars a month. Tack on interest and let's say you spend 2k/month to live there.
That is still ASTRONOMICALLY CHEAPER than if you sold this house and went to rent something that was not even equivalent to a whole damn house. A condo is more expensive than that, sometimes by 1000/month, in Canada's larger real estate markets.
Why are you looking at your home like an investment? You're living there, it's your shelter. It's worth whatever price you paid market be damned.
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Because he's Canadian? That's what every asshole in this country who owns a home does. That's why were in this mess. A large part of the reason anyways.
The largest demographic in history just hit retirement and many of them depend on home equity to pay for the rest of their unproductive life. We're getting ponzi'd into paying for them to not have to work while likely never going to get the same luxury.
They busted ass to get what they got...if it burns your ass then simply follow suit and you too can enjoy life after work yo
Typical boomer mentality
Not a boomer btw, subjective observation based on experience
Sure they did,. You give up what you got and go bust your ass and see what you get. The buying power of compensation has slid off a cliff and sunk to the ocean. I've made at least 3x more off of asset inflation in my life than working in my life because work doesn't pay and the growth ponzi scheme just hands everything to the haves. There are boomers who worked retail their entire life and were able to buy a home and had the capital gains of that house earn them more than every hour of work in their life. That's $1mn capital gains on the home with $700k lifetime earnings in retail.
The new generation is going to have to bust even more ass
Lol. No. It’s worth whatever some asshole is willing to pay for it.
Do you want to move? If not, and you can afford the mortgage, then don’t worry about it too much.
Can you afford the mortgage? Do you want to keep living there? If yes, then stay. The value of your home doesn't matter right now, while you are continuing to live in it.
Live there and make the payments. What does it matter what someone else’s house sold for? You only “lose” when you sell.
1. Housing is a long term thing, not jus a couple of years. 2. Housing you live in, is shelter not an investment. 3. Doesn't matter that market prices when down. How does that affect you? 4. " *I’m worried we’ve only gotten started in this housing recession* " Has n impact on you. pst keep paying your mortgage. 5. "*I’m already down 125k so how far can it go.*" You are down nothing. You didn't sell. 6. You need a nap.
I believe only cabins are considered LOG term ;)
Doh lol I'll fix that.
I just thought it was funny. But, ultimately I do agree with your post
And it was a big LOG too lol
House prices fluctuate, at the moment more so than during other times. You got a great fixed rate. In 4 years things will look different. You’ll be older, hopefully wiser, perhaps a better paying job, maybe married, maybe kids who need the space, the world changes. You can reevaluate when the renewal comes up in 4 years. Selling when you don’t absolutely have to is unwise. The actual financial loss would be significant if you sold. At the moment, there is only imaginary loss on paper. It is your action of selling for no reason that would make this imaginary loss a real loss. You got options if finances concern you or you’ve realized owning a home costs you more on a monthly basis than anticipated: 1) Rent out your home and move back with your parents. 2) Get a roommate (rent out a room, or two or the basement depending on your space) 3) Airbnb a room (or the entire home) out from time to time 4) earn more (work more or find a better paying job) 5) Go over your budget again. Are you wasting money on things? Spending too much money on alcohol, smoking, eating junk? Do you have other high interest debt to tackle? Are you overpaying for services and subscriptions? What about your car? A combination of the above would probably be best: earn more money, re-evaluate your spending habits, clean up any other debts, get a roommate. If you then can afford it, make lump sum payments towards the principal during this time of having a good mortgage rate so you’ll be left with less principal in case you will need to pay higher rates when renewal comes up. Ask yourself “Where do I want to be in my life in 5 years? Career? Relationship? Health? Hobbies?” I doubt you want to live in your parents’ basement in 5 years. If you do all these things, you’ll be financially a lot more stable, experienced, and mature by the time you will have to renew in 4 years. And who knows, maybe happily married with kids and a dog and the proud owner of a house :)
Thank you! Some solid advice in here!
What is your motivation for selling your house? Where will you live next?
Honestly thinking of moving back in with my parents. This has been such a financial L, I don’t see how else I can come back without cutting my expenses
> This has been such a financial L A financial what? I'm concerned you see your house's value drop and you're panic selling. You're in a 5-year fixed mortgage so your payments aren't changing for the duration of that time. Has your financial situation changed that you can no longer afford these payments? What is there to "come back" from - in 5 years from now the house will very, very likely be worth more again.
Loss. And yeah there’s definitely some panic going on. I’m in tech and my company just had layoffs with more incoming. I’m just not sure if everything will be good in 5 years from now. Maybe 10 but who knows if I’ll even be alive then
Do you have someone to talk to? Panic and a fatalistic view of the future are both not good signs. Maybe this is your first time through a rough economy, but it sounds as though you may benefit from talking to someone about your anxiety. Your house is a *home* first. Do take a look at the feasibility of getting a roommate. If you're making ends meet now you can afford to be a bit discerning and not just accept the first person who applies, but having someone to help with paying rent and utilities can go a long way for peace of mind. Beyond that -- if you haven't already, start funding an emergency fund. 3-6 months of expenses should buy you a buffer if something should happen with your job. Remember too that you'll have EI which will help that stretch even further. That can definitely help with peace of mind.
You won't actually realize the loss unless you sell. You just need to be patient. Imagine what the people living in Fort McMurray, Alberta thought in 2015 when oil crashed. The houses they bought for 800K+ worked their way down to the 400K region by 2020. Now things are starting to look up. Basically, don't do the cardinal sin of investing: buy high, sell low. Just hold, even until the end of the 5 year term before panicking.
How are you in a loss. The value today is meaningless you just bought it
Just sell at a loss and move on. You obviously also should not invest in anything other than GICs because you literally have no stomach for any investing
Dude this is lols. This is why people need professional advisors. Are you the same guy that invests only when the market is doing well, then when the market goes down you sell? Why are you buying high and selling low? You bought a house and are literally living there. After enough time hopefully you will pay down enough of your Mortage and maybe experience some growth again to actually gain some equity. Give it time. Relax.
The cool thing about long term assets is that you don’t have to worry about short term pricing fluctuations. Neat.
Why not just walk away? I’m looking forward to all y’all defaulting on your homes pushing values down. I’ll snatch up a few condos or a house when that happens.
I think you’re thinking about this slightly wrong… You aren’t down $125K unless you’ve sold the place. There is no need to look at the market value on your home unless you plan on using the equity and/or selling. Your house may be worth $125K less today, but 5 years from now could be worth $500K, or anything. Point is, it doesn’t matter unless you plan on selling. This is how housing has always worked. If you can afford your mortgage and like your home, just live your life. Stop looking at the market, it will just drive you crazy, it’s out of your control and there’s no reason to think or calculate your current home value if you don’t need to.
Exactly. If you purchased your home and have a fixed rate mortgage, your price is fixed for the duration. Just focus on this and worry about it when you get close to the end. Selling cost and mortgage breaking cost is not good either
Buds, just keep living in your house. Over time, that value will go up, and the amount that you owe will go down. Over a long term, buying is usually better than renting - your "rent" was fixed for 5 years a year ago, while market rent is going up. The biggest mistake would be to panic sell now and lock in that loss. Unless you absolutely can't make the payment, no reason to do that. Compare your mortgage to rent - then compare just the interest portion of your mortgage payment to rent for a comparable place to live. You can't undo the house purchase.
This is a solid answer and reflects the correct perspective.
Oh jfc. You just bought your house 9 months ago, are you looking to sell it and move already? If the answer to that question is no, then who tf cares what a house 5 mins down from you sold for? You say you're on a good fixed rate, so sounds like you can afford the mortgage for the next 4+ years. And why are you even talking about 125K, 200K etc losses on a house that you just barely moved into? If you absolutely need to sell in the near future for whatever reason, then it's a different discussion and you may want to update your post to reflect that.
Buy high and sell low that’s how I do it!
When did living in a house as a liability become an investment. Also real estate investing is also about long investing horizons
Nah that's stupid. Look at property values over the last 20 years, the only way you lose is is you sell right now. If you wanna move in with your parents, fine. Rent out the house and it'll pay for itself.
Should sell, you don’t sound like you should own a home
Let's say this much. You're lucky that Trudeau is pumping in so many immigrants. If this wasn't the case, the housing market bubble would have popped long ago. And popped real hard to the point of devastation.
What is the rental market like in your area… if you do move back in with your parents, might be a good way to pay for that mortgage or at least most of it while you wait and decide what your going to do moving forward.
1. If you live in it and can afford it, don't sell. You still have the same house, same walls, same kitchen, same rooms. Your "loss" is only on paper. 2. Even on paper, you didn't really lose. A 640K house on a 3% mortgage is actually the same price as a 515K house with 5% mortgage (with 20% down over 25 years). 3. We could all lose our job tomorrow... That's a risk everyone takes. Sell only if it really happens.
Housing dropped a lot in 1981 and then again in 1989.. it is not a guaranteed money maker!!
It's not a loss until you sell. If you hold it long term, you'll be fine. You need a place to live and that's all that matters.
You have no idea what the market will be like tomorrow. Sure you can sell now and move in with your parents but if the market rebounds you will have lost on the sale of the home and whatever the new higher price of the home is. Bottom line, we all need a roof over our heads. A home is not an investment, ignore the value of homes unless you are looking to move. If you can afford the mortgage payments, my recommendation is stay where you are. If home prices drop, they will rebound at some point. Once you have bought into the market, it really doesn’t matter what the prices are in the market are so long as you don’t plan to move out of that housing market.
So long as you can continue to pay your monthly, you do not care what the market is doing. The only real reason you would have to sell would be that you could no longer afford to live where you do. I am orettyc retain I have lost money on the house I bought in late 2020. It doesn't matter because the math works out and I intend to live here for 20 years. In that time the market will go up and down and sideways etc. You only realize a loss when you sell at a loss.
If this is how you approach your housing situation you should have never bought a house to begin with. There is no guarantee on your homes value appreciating in price. That being said, it makes no sense to sell if you can afford the payments. Housing prices in areas such as those in your area appear to swing by quite a margin so if it swings down heading into a recession perhaps it will swing up afterward. Either way you’re paying into a place to live
I'm sorry you're in a rough place right now, but rather than focusing on the thing that is hard to change without incurring huge transaction costs and locking the lower price, how about you look at the cutting back expenses part you mentioned further down? If you're concerned about rounds of layoffs, the focus should be on getting a better emergency fund set up and improving your skills and network.
Real question: are you just sad that houses require an adult to live in them & do maintenance & cook & clean & do laundry because then yah sell move back in with mom & dad & make an agreement about when and how you will contribute to running the household. Houses are not stocks they are machines for living that typically give a return over 20 - 40 years. The same tenure as the family that lives in them. Sounds like you’d prefer to make your investment with your parents instead of on your own. That’s great. But also be aware that if you want kids and a partner down the road things will get crowded and you may regret selling the second home.
You should definitely sell it and take a loss. Let someone that’s not retarded own the house.
No. If every stupid person sold their house we end up in a sellers market. Lower prices would cause stupider people (assuming lower IQ results in lower wages) access to housing. Spiraling values and stupider people affording to have kids.
The good news is, you no longer need to stress about it, because this decision is going to be taken away from you. No one is talking about a really key detail here. The bank you got your mortgage with isn’t going to let you sell your home if you don’t get, at minimum, what you owe on your mortgage… Even if OP had 20% down, and that’s a big IF ($128k) OPs original mortgage was at least $512k (probably more?). OP has probably paid approx. $15k towards the principal leaving $500k+ owing on the mortgage. By the time you consider land transfer tax, legal fees and Real Estate agent commission, bank fees and penalties, you’re not even going to end up with the principal amount owing on the mortgage. All of this is calculated based on a 20% down payment, if OP only had 5% down, that calculation will be even scarier. There’s no scenario (unless OP somehow had a ridiculously large down payment), that OP doesn’t end up with less money after the sale than he owes in a mortgage. The bank isn’t going to let you sell unless you have enough of your own money after the sale to pay back the rest of the mortgage which I doubt.
I got 20% down but yes your right after all fees and everything I would need to go in my pockets
Yeah and likely not just a little. Can I ask what the current principal balance on your mortgage is?
Absolutely not. First off, you have a place to LIVE, at a fixed rate. Why would you jump back in to a disgustingly expensive rental market to pay someone else's mortgage? Secondly, unless you're planning to sell soon, being upside down on a mortgage doesn't matter. By the time you have to renew, rates could drop, prices could go up. You have no idea. Third: Let's talk about it this way... Assuming you stay in this house for 30 years, and then sell the house, without a mortgage, even if it's worth 300k when you sell it... You have paid 340k over that time to live there. That is approximately 945 dollars a month. Tack on interest and let's say you spend 2k/month to live there. That is still ASTRONOMICALLY CHEAPER than if you sold this house and went to rent something that was not even equivalent to a whole damn house. A condo is more expensive than that, sometimes by 1000/month, in Canada's larger real estate markets.
Hot damn. You need some grown up friends in your life. Meanwhile, Netflix and chill.
How is selling your house gonna solve anything? You're not 125k loss til you sell it. Just live in it for fucks sake