Has the war made life in the US incredibly expensive as well? (Page 3/8)
maryjane JUL 16, 09:37 AM

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If interest rates continue to climb and go back up to around what they were in the 80s and 90s... then I suspect people will have to start buying smaller tract homes like people had in the 50s and 70s. Unless supplies / materials go WAY down in price, which could lead to people being able to buy larger homes for a comparable price.


Lumber has dropped in cost compared to what it was a year or 2 ago.
Anything metal tho is still pretty high.

I know all about 'little boxes' but not because of interest rates or other costs.

https://www.youtube.com/watch?v=HlSpc87Jfr0

[This message has been edited by maryjane (edited 07-16-2022).]

82-T/A [At Work] JUL 16, 10:45 AM

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Originally posted by maryjane:

Lumber has dropped in cost compared to what it was a year or 2 ago.
Anything metal tho is still pretty high.

I know all about 'little boxes' but not because of interest rates or other costs.

https://www.youtube.com/watch?v=HlSpc87Jfr0





Hahahah! I will say this though MJ... homes in Florida are not made of TickyTacky... they're made out of solid concrete, reinforced with rebar!!! (Tim Allen grunts).

I totally knew where this was going. I'm 3/4ths of the way through, and convinced that the people will end up in little boxes, buried in the ground, made out of ticky-tacky.

I will say though, before I finish the song... many of these people living in the tiny boxes, also invent and design rockets that will take us to Mars. While their homes in Boca Chico are made out of Ticky Tacky, the homes on Mars most certainly will not. They'll be made out of Clicky-Clacky.


EDIT: On the lumber, I think this will eventually lead to a lower cost of home ownership, but with inflation being what it is... all the other things will continue to go up in price. I can't wrap my head around it... but 50-60 years ago, homes were made with more intricate details. You had more distinctive styles... Craftsman, Arts & Crafts, Queen Anne, Queen Victorian, Tudors, Shirtwaist... and that's just the North East and Mid-West... you look at New Orleans architecture, or South Florida architecture (Spanish or Art Deco), or South Western, or even North Western architecture... and they're all extremely distinctive.

I won't say homes are built better, because they are not. They're more modern in terms of the technology and their efficiency, but they're also more mass produced and everything is quick and cheap. But remember that a 2x4 was $1.80 just three years ago. Now it's... what, $5.70 down from $8 bucks at one point? People were building homes with mahogany and oak beams because it was cheaper than pine and poplar studs. Which is absolutely crazy in my mind.

Anyway... I can't put two and two together on where this goes... I suspect they'll build more "ticky tacky" boxes all throughout the country, and it will lead to further destruction of cultural identity and style of each of the individual states as people seek cheaper homes. I think we'll see more starter homes... but possibly, we see more older homes getting renovated.

And this brings me to my bonus rambling point. There are so many small towns in this country that have amazing, absolutely amazing old homes. I don't know about now... but 3-4 years ago, you could buy a MANSION in the town of Beaumont. I mean, literally a 5,000+ square foot home with massive entry foyer with dual staircases going up the center of the room with big chandelier and balcony... which have two-story libraries with fire places and the sliding book-shelf ladder. Homes like these were going for $70-80k... all made in the late 1800s or early 1900s in places like Beaumont, TX... or Brookfield, Missouri, or places like that. Hopefully with people being able to work remotely, they move to these smaller towns and renovate these homes. I'm sure it'll be met with mixed emotions, "city folk" moving in and bringing their liberal ways... but at least the architecture will be saved.

[This message has been edited by 82-T/A [At Work] (edited 07-16-2022).]

hammer JUL 16, 11:04 AM
IDK about the reduction in lumber cost around here...yesterday I had to pay 80$ for two sheets of 3/8 cdx plywood
Patrick JUL 16, 06:04 PM

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Originally posted by MidEngineManiac:

Well, you can just keep that left-coast wack-job, pronoun-using multi-cultural-leftist-whatever hell hole.



I wish more people felt the way you do. Seriously. There'd then be far fewer people clamoring to live in this beautiful place. It's starting to get a little crowded here on the west coast!
Patrick JUL 16, 06:30 PM

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Originally posted by blackrams:

Based on the above posting, I have to assume that variable home loans are a big deal in Canada. Initially low interest rates that can rise/fall within agreed upon limits (normally set by the lender). If so, those can be a real problem and I'm surprised people use them.




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Originally posted by 82-T/A [At Work]:

I don't know about the comment though about their mortgage rates increasing. Most people today purchase homes at a fixed interest rate. 30-Year "Fixed." It's not like it was in 2007 when you had a lot of people with adjustable rate mortgages.



The housing situation in Greater Vancouver area is nuts. See my previous post. A city lot with a "knock-down" on it here goes for $1.5M... and I'm not referring to some exclusive expensive neighborhood either. So people are forced to pay more than they can actually afford if they want a house anywhere in this region.

It's no mystery then why variable rate mortgages were favored by many home purchasers. They had no choice (if they were insistent on buying a house). The rates were simply lower than they were for fixed rate mortgages. These people couldn't afford the larger monthly mortgage payments that would've been set by utilizing the higher fixed interest rate, so they gambled on the lower variable interest rate as they felt they could "afford" those smaller monthly payments. Well, now that the prime rate has shot up... those variable rate monthly payments are beyond reach for many people who had bought a place during the period of low interest/mortgage rates.

[This message has been edited by Patrick (edited 07-16-2022).]

Wichita JUL 16, 08:14 PM
82-T/A [At Work] JUL 16, 08:48 PM

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Originally posted by Patrick:

The housing situation in Greater Vancouver area is nuts. See my previous post. A city lot with a "knock-down" on it here goes for $1.5M... and I'm not referring to some exclusive expensive neighborhood either. So people are forced to pay more than they can actually afford if they want a house anywhere in this region.

It's no mystery then why variable rate mortgages were favored by many home purchasers. They had no choice (if they were insistent on buying a house). The rates were simply lower than they were for fixed rate mortgages. These people couldn't afford the larger monthly mortgage payments that would've been set by utilizing the higher fixed interest rate, so they gambled on the lower variable interest rate as they felt they could "afford" those smaller monthly payments. Well, now that the prime rate has shot up... those variable rate monthly payments are beyond reach for many people who had bought a place during the period of low rates.





If what you're saying is what I think is going to happen, then this will be really, really bad for Canada's economy... or at least the housing market. In the U.S., we were "bitten" by the housing collapse in 2007, so they generally don't offer variable rate interest rates on homes unless there's a very specific reason why you need one.

In 2007, a ton of people defaulted because of those variable rate mortgages. Some of them even had something called a "balloon payment," which I assume was some agreed-upon payment that would take place after a certain amount of time. I just really consider myself so lucky that I got the interest rates I did, and when I did. I balked at times that I didn't try to go even lower, like 2.5% or something like that. But man do I feel lucky now.

That really sucks though... I know people don't have anyone but themselves to blame, but I really do blame social media and HGTV. Everyone wants to live in a super trendy area, and everyone wants to have ultra-luxury. What a time we live in.
Wichita JUL 16, 08:59 PM

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Originally posted by 82-T/A [At Work]:
If what you're saying is what I think is going to happen, then this will be really, really bad for Canada's economy... or at least the housing market. In the U.S., we were "bitten" by the housing collapse in 2007, so they generally don't offer variable rate interest rates on homes unless there's a very specific reason why you need one.

In 2007, a ton of people defaulted because of those variable rate mortgages. Some of them even had something called a "balloon payment," which I assume was some agreed-upon payment that would take place after a certain amount of time. I just really consider myself so lucky that I got the interest rates I did, and when I did. I balked at times that I didn't try to go even lower, like 2.5% or something like that. But man do I feel lucky now.

That really sucks though... I know people don't have anyone but themselves to blame, but I really do blame social media and HGTV. Everyone wants to live in a super trendy area, and everyone wants to have ultra-luxury. What a time we live in.



Not only did they have variable rate mortgages, balloon mortgages (really designed for property flippers), but these interest only loans. I've read people being stuck on these for a good solid 10-years before they could refinance to a loan that paid down the principle.
82-T/A [At Work] JUL 16, 09:12 PM

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Originally posted by Wichita:

Not only did they have variable rate mortgages, balloon mortgages (really designed for property flippers), but these interest only loans. I've read people being stuck on these for a good solid 10-years before they could refinance to a loan that paid down the principle.



Holy **** ! I forgot about the "interest only" loans. Can you imagine living in a home for 10 years, and literally not have even a single cent of principle paid into it? You're basically renting... because then at that point, you now have to not only renegotiate for a new mortgage, but you'd have to also qualify for one too. Ugh.
Patrick JUL 16, 09:39 PM

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Originally posted by 82-T/A [At Work]:

If what you're saying is what I think is going to happen, then this will be really, really bad for Canada's economy... or at least the housing market.



Keep in mind that Vancouver (and Toronto) will be the worse case scenarios in regards to a housing market "correction". It's not nearly as bad in most other locations across the country.


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Originally posted by 82-T/A [At Work]:

In the U.S., we were "bitten" by the housing collapse in 2007, so they generally don't offer variable rate interest rates on homes unless there's a very specific reason why you need one.



There were supposedly safeguards put into place to prevent a re-occurrence here of what you're referring to, but the writing was on the wall at least a year ago that things could/would go south. There were some further steps taken to make it more difficult to qualify for a mortgage, but it was too little too late. The Bank of Canada began raising the prime rate a couple of months ago to slow down inflation, and then again levied a big increase just a few days ago (as I linked to Here).

I was house hunting prior to the pandemic, and then paused my search during the worst of COVID. I started looking again a few months ago, but the already crazy prices were literally increasing by the day. Most, if not all houses were being sold for above asking price (by hundreds of thousands of dollars, I'm not kidding*) as people were trying to take "advantage" of the low mortgage rates. Now these people are in trouble, houses will need to be sold, prices will plummet... and I'm back in the hunt. I'm so glad I didn't allow myself to be caught up in the house-buying frenzy of this past spring.

*Two months ago my neighbors put their "knock-down" of a house up for sale. It's assessed value was $1.4M, they listed it at $1.6M and it sold eight days later for $1.9M. The housing market here has been totally nuts. Hopefully it will soon get back to some semblance of "normal".

[This message has been edited by Patrick (edited 07-16-2022).]