HawthorneVillager.com

The reason why people are walking away from their mortgages in the US is because their mortgage payments have gone up significantly (once their initial 'teaser' rates expired) to a point where they can no longer afford the payments. On top of that, they had negative equity in the property to begin with as they were lent more than the property was worth. Add the fact that they had no credit to protect.
Let's say someone did lose their job here. Why would they walk away if they had equity in their home? Or if they had decent credit that they cared about? They are not going to walk away from their mortgage. They are going to put the house up for sale (if they don't find another job).

_________________
Paul Meredith
Mortgage Broker
CityCan Financial (est 1976)
416-409-8009
http://www.easy123mortgage.ca
paulm@citycan.com
Lic#10532

Follow me on Twitter! http://www.twitter.com/paulmeredith

Ontario is growing by 100K each year at least. Immigration is the only source.
100K is the size of Guelph. They all need homes and many of them are buying homes few years after landing or even right away.

That was the theory in Vegas, California and Florida too kfo95
Markets are cyclical....Housing, stocks, commodities, bonds....since the dawn of time...This time ain't no different....we're due for a hard pullback.

Economics & Strategy
CIBC WORLD MARKETS INC.
Weekly Market Insight July 11, 2008

NORTH AMERICAN & INTERNATIONAL ECONOMIC HIGHLIGHTS
The US stock market is officially in a bear market and the TSX lost more than 6% since the beginning of July. A
year from now we will refer to the current period as the “bad times”.
But between now and then, what will define the next six to twelve months? The following is a brief list of the
main themes that we think will dominate the economy and markets in the near term.

Economic Activity
We are probably at the bottom of the cycle. In the US, the economy is probably shrinking and in Canada, we
are starting to see growing consistent signs that the labour market is slowing. We probably will stay at this
bottom for a few more months with some early signs of a sustained recovery becoming visible in the fourth
quarter of 2008.

Inflation
The trend is up. The main reason for higher inflation down the road is surging energy and food prices. Note
that until recently the Fed and the Bank of Canada were focusing only on core inflation (which excludes food
and energy prices). But realizing that the current rise in food and energy prices is more structural in nature,
both central banks are now focusing more and more on “all-items” inflation that includes the food and energy
components. Accordingly, look for US inflation to reach 4.2% by year-end. In Canada, we have not yet felt the
impact of higher food prices due to the appreciation of the dollar. But in economics almost everything is
determined at the margin. And with the Canadian dollar remaining more or less at current level, food inflation
will no longer be protected by a rising currency, and therefore it will take overall inflation in Canada to 3% by
year-end.

Interest Rates
With inflation rising and the economy slowing, we are in stagflation. The Fed and the Bank of Canada are in a
difficult position since raising rates now to fight inflation will further damage an already fragile economy. So
what to do? The best guess is that both central banks will wait until the end of the year, when the signs of a
sustained recovery are extremely clear before starting to raise rates. Accordingly, we expect the Fed to raise
rates by 150-200 basis points and long-term rates in the US to rise by roughly 60-70 basis points. In Canada,
with inflation a bit lower and economic growth stronger than in the US, the Bank will probably raise the bank
rate by only 100 basis points with long-term rates rising by only 30-40 basis points.

The Stock Market
The US market is officially in bear territory and probably will stay there for a while. Given current sentiment, it
is hard to see a recovery in the near term. In fact, we expect additional sell-offs in the very near term. In terms
of the duration of the market decline, we are still 2-3 months short of the average duration of all previous bear
markets as the magnitude of the decline is still 5%-10% short than the average. Having said that, we believe
that the market is cheap (and probably will get cheaper in the coming months or two). This means that
currently there are many opportunities from a 2-year investment horizon perspective.

In Canada, the recent decline in the stock market reflects the ongoing impact of the credit crunch on the
financial as well as general fears that the stagflationary conditions will further damage the Canadian economy.
The energy sector will remain relatively robust due to our belief that energy prices will remain elevated. Overall,
it is difficult to see a sustained recovery in the TSX before there are convincing signs that the US market has
reached a bottom. As is the case in the US, at current valuations, the non-commodity segment of the market is
very cheap.
Benjamin Tal
Senior Economist

_________________
Paul Meredith
Mortgage Broker
CityCan Financial (est 1976)
416-409-8009
http://www.easy123mortgage.ca
paulm@citycan.com
Lic#10532

Follow me on Twitter! http://www.twitter.com/paulmeredith

I agree immigration plays a large roll in Canada.
I also believe that the government does not want to see another fall like the late 1980's early 90's. .
In the past there has been falls every 10 years it's been a cycle. Since the fall in the 90's, we have not seen any major down cycles, what we have had is what I call mini's.
If you recall 9 years ago this same talk was going on when Crysler had layoffs and a few months later nortel had there adventures. Everyone was so uptight. That's when I bought my first home. Since then the market surely hasn't dropped nor has the economy.
Let's not forget that oil has gone up, but so has Gold. This is a mineral that they have stopped mining in Canada for over 20 years now, The old mines are opening up and the jobs are pouring in. Again bringing skilled miners to Canada, thus helping the economy plus the mineral.
The only thing that can hurt us is the American dollar, if that stays low we will be hurt and so will the rest of the world. This is why everyone from Canada to China has been trying to get the American dollar back up. The Chinese government has given America a large sum of money to help in this matter. (more is to come I'm sure)
I do see the American dollar slowly rising so I say no worries.
Ummm... what house should I by next ...lol

I disagree, let's not forget the people who have immigrated here live all in one house. These families will slowly become Canadian and move out onto there own. Just as all the other immigrants have done in the 70's. ie. the Italians. Now they all own there own nice homes. They will not move back to there country, it is not that nice there.

Is retarded a bad word?

I’m not familiar with rest of Canada. But I was in all major cities for business several times already. Take Vancouver as an example. Not so long time ago they were getting people from Hong-Kong. Those people were rich enough to buy properties on prime locations right away, because they were able to sell their properties before they moved to Canada. They say prices went high because of this reason.
I was in sales office with one guy from country which is one of the major sources of immigration for these days. He told me after 9.11 some people reinvested their money to his country real estate. As result prices went up and their homes are equal by price to local homes here. So they are selling their homes and buying homes here almost mortgage free.
I’m not really sure about job opportunity as major motivation for immigration. May be it is major for illegal immigration to have job eight bucks per hour instead of dying from starvation at home country. I believe, it is more common in USA not here. Most of legal immigrants I know coming here were very well paid specialists before they moved to Canada. Or just lucky-tricky guys making a fortune and moving out before they get in trouble. Job opportunity in Canada sometimes is a joke for them, but they are moving here for better live which is not just a job as here in Canada for most Canadians who was born here. We escaped our country because we were sick and tired of corruption and criminals to be everywhere. Job and money was never a problem. But I know some Canadians who are coming now to our mother country to make quick and dirty money without paying any taxes to pay their homes mortgages here. It works perfect for them.
My point which I’m trying to make is – immigration in Ontario is very often not empty pocketed poor people looking for job. And it is huge by numbers. It makes huge difference with LV for sure and with USA in general.
This is how it works in general. Very simple. Manufacturing is a backbone of strong economy. USA and Canada are exporting jobs to other counties and also depending on oil from other countries. Those countries are huge and majority of their people are working for nothing, but some of them are very well paid. So every year Ontario receiving 100K+ immigrants and many of them are coming with huge money. I mean this is so obvious for insider like me. Once you start visiting local sales offices and look around at people it will become obvious for you. I have seen many times how recent immigrant was asking openly sales person how good this home will be for flipping. I spoke with several of them. They do have money for their home and they do have money to buy another property for flipping. Perhaps they were more comfortable to talk with me, because of my bad English.
Again this is my own point of view why Ontario housing market is not going to be collapsed as in USA which was giving fake mortgages for local residents for years.
Nobody was giving this kind of mortgages in Ontario.
But. Perhaps it is going to change. More condos and townhomes instead of 3K sq.f detached. It is less and less land available at local cities here and prices went too high. First of all because of speculation and huge grow of local population for last decade. Now it is also inflation on everything which is involved in construction industry due to weak USA dollar and as result speculation on oil which is causing inflation.
Look at 15b phase. Their 36 lot with home size around 2500sq.f is going to be well after 400K. If they will need to sell their homes just flat no profit they will have to price it for something like 460K. Doesn’t seem to be easy even after two years from now. The reason why is because across the street another people who purchased their homes two or more years ago were paying almost twice less for their homes. So if they will need to sell their home they will drop price and they will have room to get profit even if they will sell it deep below current market price. This is going to be major issue for housing resale market across GTA for next decade or so.

Very well said, 100% agreed.

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Well to each his/her own opinion on the market...

In reality, noone knows what the future holds.

3 days ago TD and all other canadian banks were in deep sh*t with a 6% drop... The oil was at it's highest levels at $147/barrel... BOC held lending rates due to its believes we are going through a big slowdown.

Today, we see the oil at $129, all banks enjoying a great day as if nothing had happened on monday and BOC comes out with a surprising great report saying we have passed the worst and we are back on track...

What I want to say is that we can sit and guess like williamsb had done 2 years ago saying rates are coming down... Eventually it will happen in one, two or ten years... it's a 50% chance.

Who knows better wouldn't be a miltonian... he would have a castle on bridal path.

What are you talking about?
As someone who will be selling a sterling in the near future, I've been following the prices day by day...
It is true that the market has slowed down but price wise we still doin' good.Only desperate sellers are lowering their prices as some do not want to bridge mortgages.

I will use sterling/thistle bay as example.
In Feb the prices were ranging from $390 to $420... Today on MLS you'll see that these prices varie between $389 and $425... It all depends on the house itself.

I have been watching the market since January 2007, I had a sterling model and was interested in the prices. I noticed that in February 2007 the prices were very strong as the summer approached the prices softened on all sterling models, the upgrades are not that important It's more about location

It's not about the market falling it's about timing. No one is shopping for a home in the middle of summer. Everyone on vacation and at the beach when possible.
There are also lot more homes for sale in the summer so the people who are buying have lot to choose from this is what lowers the value of your home. I
n February there are very few homes for sale, thus enabling you to sell your home at a higher price do to lack of choice.