519-646-2222Housing – What are the Pundits saying?
What are the pundits saying about the housing market? I once read about Buddhism “a thousand monks, a thousand religions” – and that saying certainly seems apt when discussing Canada’s real estate market. Everyone seems to have an opinion but not many of them are based on statistical data – and while statistics can be, and often are, manipulated to nudge the data towards a preconceived idea, they still tell an interesting tale.
In this piece I am referring to a recent article by Niagara area realtor and YouTubeist John Flynn who produced this very interesting vlog on the history of monetary value its association with gold (as a standard) and the price of housing. This vlog also leans into unemployment and income values.
We have been blogging for some time about excessive debt as well as the problem of the pricing of real estate. In past we have talked about how the average over the last hundred years the average mortgage rate has been about 8% and in 1981 rates peaked very briefly at 28% – yet fewer people lost their homes, and that was because of the relative value on incomes and the price of housing.
The biggest challenges people face today are not rates, they are lower than average, but declining incomes and house prices that have not yet corrected sufficiently to reenter the affordability range. Through into the mix that Canadians also pay among the highest taxes in the world and carry the most consumer debt and it becomes very difficult to see a path forward to a more buoyant economy (regardless of political stripes).
For a discussion about rates and market fluctuations, timing and cases Ron Butler – “the Angry Mortgage Broker” – provides some great articles, often speaking from his expertise as an expert witness.
Another interesting Canadian/British commentator is Luke, who runs the YouTube channel Market Mania, Luke is higher on hyperbole but still uses statistical data to back up his postulations. Although, I must say the most interesting economist I have been following on YouTube is by far Gary Stevenson, a former British Trader for Citibank, who has quit the trading business and promotes the notion of wealth (as opposed to income) equality.
Gary makes some very thoughtful and insightful points when analyzing the challenges of today’s changing economy and the financial woes faced by ordinary people. Economics, is certainly not everyone’s cup of tea, but the way that Gary presents his information is succinct and salient and dummied down enough that ordinary people with little background in finance can grasp what he talks about.
My personal view is that I am extremely debt averse and I live a very modest lifestyle. My only indulgence is my hobby of training horses. I generally recommend that people don’t use their homes to speculate but rather for security, and avoid using debt for any purchase that is unnecessary or is of an everyday nature and can be purchased out of pocket.