January 2009 Real Estate stats...

[paulal]

Publicly-financed borrowing

Is another contributing factor to the crash south of the border.

The American government encourages home ownership by making interest on mortgages tax-deductible. This law has always given an excessive boost to the housing market. But recently, lenders perversely used this policy to push those who already owned their homes to take out new mortgages. A law designed to encourage home ownership was distorted to underwrite personal debt! Taxpayer subsidized personal borrowing!!!

The American system is so thoroughly messed up!

Let's face facts: Canadians will be much better off than our American cousins and housing in Vancouver will most certainly not fall like it did in south Florida or Detroit. Nonetheless, our economy will not avoid getting dragged down by the Yankees and their desperate clutches. It's like sitting on a lifeboat with someone in the water clinging to your arm. We're not going to get away easily!

 

[FunSugarDaddy]

Parts of the USA are already at 25% unemployment. Most of the USA is already at or over 7% unemployment.

That's news to me. Can you reference this 25% unemployment rate, cause this is the first I've heard of it and I read up on this daily.

On CNN the other day they had a panel discussion on the economy and they said in some states it's in excess of 10% with Michigan being higher (ie 12-15%)..but no one mentioned 25%.

As far as the 38% ratio of mortage payments/income goes, in Vancouver I'm pretty sure many home owners greatly exceed this ratio. The rule of thumb is 32% should be the maximum and 40% the max including all debt obligations. (ie credit cards, car payments etc. added to the mortgage obligation)

 

[FunSugarDaddy]

Clarification

The unemployment rate isn't anywhere 25% those were the rates in the depression. The rates aren't even all that close to 17%. They had a CNN correspondence in Michigan yesterday and he said the rate was 10.7 and he said that was the worst in the country.

Now if someone wants to include those who are "under" employed, as opposed to "un" employed, then you might get close to the 17% range, but even that would be stretch, and under no circumstances is any area of the US even close to having a 25% rate.

Now if I'm incorrect, please let me know, but I do spend probably 3-4 hours a day reading and watching these types of issues.

Also stats don't always tell the whole picture. I own property on the Sunshine Coast and I have yet to find anyone who wants to work on these "over the table". They all want cash, and cringe at having to issue receipts. Many of these people would likely show up as being unemployed if stats were taken.