Real Estate: Losing Value/Buying at the Peak

 Real Estate: Losing Value/Buying at the Peak

 “The sales in the $725K-$800K range caused cries of disbelief and anger from my close family who bought a house down the street for almost $1M, in June.”

“Sellers in Burnaby North, like many markets, are busy chasing the market down, with very few getting out in front of the declines. I’m fortunate to have access to MLS, and I’m seeing many listings that were priced >$1M as late as August now well in to the $800k range.”

v972997_1
“This one, V972997, a foreclosure, is particulary extreme: original list $1.8M in Dec 2011, now listed at a fire sale price of 900k.”

“A couple of decent houses (V967123, V981232) in Brentwood Park area just sold for <725k.

V967123 was originally listed for 988k in May! The sales caused cries of disbelief and anger from my close family who recently bought a house down the street for almost $1M in June.

Their lot/house is nicer but still, you can see the doubt creeping in, even as they vociferously defend their investment.Things are changing in that market, and fast.”

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COMMENT:

“Money” is a funny thing (but then again ….if its simply created out of thin air  via Fiat Currency..Fractional Reserve Banking……..what do we expect ?).

There is a saying that people know the  ” PRICE ” of EVERYTHING, but the ” VALUE ” of NOTHING.

When money  is cheap……people will inflate the “PRICE ” aka value of a given commodity they perceive as an investment .

When money is expensive, the converse of the aforementioned generally holds.

However, Has the “VALUE” changed ?  Price and Value or often polar opposites in the modern economy.

 

Again, to re-iterate:  History has shown that when the cost of borrowing is cheap….we have an epidemic of Greater Fools.  People are sucked into a delusional vortex…that they can either speculate their way to riches….and/or else that they must buy NOW or else be priced out forever.

 

Unfortunately, the Public School System is guilty of many ” Sins of Omission” . It wouldn’t take more  than a few lessons in how Basic Economics work to give the students an idea of how they become debt slaves once they graduate. Then again….the ” Sins of Omission” is part of the Big Brother indoctrination agenda .

In the anecdote cited above…we see another “victim” aka “Greater Fool”. They swallowed the Kool Aid…paid peak price….now the SHTF…..compounded by denial. They paid for something in JUNE that they could have bought for 20% less if they waited 6 Months. The differential is approx. $ 200,000, which requires “after tax” dollars to pay off. By not doing a small modicum of homework and research, and realizing that the economy was a “bubble” market that many warned would implode…and they have unfortunately enslaved themselves. Their ignorance and greed has effectively F*cked up the market and has a huge negative ripple effect on us all.

 

The fact is…once the market winds change….. it is like falling off a cliff.  Rising Euphoria switches to the Gravity of Panic. Or “cutting your losses”. YOUR bad bet means nothing to the market… nothing special about your house…as it becomes a BUYERS MARKET……a smorgasbord of choices. 

 

Note the term used “Chasing the Market down” which I have cited several times.It is an exit strategy…to attract buyers and minimize losses…ie if the average market price is 10% off peak…you cut it even more ie 15 %.

In other words, unfortunately, it IS every person for themselves…

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