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Ron Butler

@ronmortgageguy

11 Mar

How Does This RE Madness in 🇨🇦 End?

And this ain't prediction, because prediction is a crap business and BTW I am not suggesting a crash or the bursting of a bubble, I am saying when do these batshit crazy prices increases end?

Because the wild increases will end

2/

And that's analysis not prediction

Either the government stops it with mortgage rule changes, or inflation pushes bond yields and in turn fixed rates to a point consumers step back or the market burns out on its own accord, enough people just quit looking

Do I know when?

3/

No I don't, maybe some time this year

Will prices reverse? Maybe, I simply know the ridiculous appreciation will stop

So what does that mean? Well what it historically means is some sort of price dip occurs even if only because people who bought have to sell

(Hello 2017)

3/

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Ron Butler

@ronmortgageguy

25 Feb

Strange Days Indeed in Mortgage World

I wrote last week about some Buyers giving up after endless wasted visits and crazy bidding war outcomes

But here comes fresh waves: condo buyers downtown (end users) who's big company managers have let them know they will come back

2/

to the bank towers in the late Fall

Couple of townhouses outside of Barrie different spots, expensive and FTHB

Or buying a house in Shelbourne, young, long time Downtown Couple

And here's the really worrying subtext of it

It's not FOMO

It's FWBF

Fear We'll Be F**KED

3/

Fear they will NEVER be able to buy a home of their own unless they act now

Because RE prices will grow to the Sky

A deep worry that a 2400 sq ft Detached in Whitby will start at $2.5M in 3 years

"That's absurb!!" you say, likely it is but how do they know that?

4/

Read 4 tweets

Ron Butler

@ronmortgageguy

22 Feb

Canadian Real Estate Prices Leading Some to Craziness

I posted the other day about Buyer exhaustion at the stressful RE bidding wars that caused some folks to quit looking which conceptually could level off RE price trends

Many interesting responses but a few were wild

2/

Some thought house prices could go much higher

And a couple thought Toronto house prices were LOW and needed to catch up with Vancouver house prices

People are entitled to think whatever they want, that's the beauty of Canada

Here's a thought though:

3/

There is a fault line in RE in many regions

When you want to get into the market you hate the high prices

The day your offer is accepted you pray the prices keep running up

And it not like Equities, RE is an illiquid product, unlike stocks your kids sleep in the RE

4/

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Ron Butler

@ronmortgageguy

29 Nov 20

The Truth About Credit Scores

Here's a subject that will get some comments / questions

I may not reply to all of them because this is NOT technical analysis this is conceptual stuff

Firstly and most important: Credit Scores are NOT built for consumers

NOT AT ALL

2/

The single most important thing to understand about Credit Scores and Credit Reports is that they are solely designed for Lenders

Sure, Landlords and Insurance companies use them but they're for credit granters

Another shocker: Good and Bad score; not how we look at it

3/

We think: In or Out

Either the score qualifies for lending or not

A 900 score is meaningless, once the score passes 780 who cares

Because Score isn't subjective, its just 680 is pass for normal lending 600 is not

Below 450 will disqualifies for anything but private

4/

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Ron Butler

@ronmortgageguy

17 Oct 20

Will the Condo-19 Virus Spread

The massive downturn in the Toronto condo market is documented everyday

The facts are just easy, Airbnb collapse, foreign University student collapse, downtown restaurant and hospitality worker renter exodus, flight from small living spaces

2/

It's a long list that radically reduces the number of renters and drives condo owners to seek freehold housing

Heck, we even have relentless addition of new condos from completing construction projects

The simple supply / demand math destroys value with no end in sight

3/

Well maybe a 2022 end in sight but 12 - 18 months of mayhem

Likely 25% - 35% down from peak condo pricing VERY dependent on product with the sub 500 sq ft product in real trouble

But will the contagion spread to Freehold: Towns, Semis and Detached?

Big Question

4/

Read 8 tweets

Ron Butler

@ronmortgageguy

5 Oct 20

What's With Toronto Condos?

Hey, I am not in the prediction business but I am in the observation business

Simple facts: downtown Toronto rents are falling steadily and if they continue to fall prices will errode

That's facts and math not prediction

And rents will fall

2/

This is simple stuff all Covid related

1) No foreign students, turns out this was big, rarely talked about and looks like they're gone till Fall 2021
2) No Airbnb, not just no tourists, no sporting events, weddings, proms huge list, Fall 2021 for return but slow even then

3/

3) Too many renters in Hospitality lost their jobs and moved back with parents or doubled with friends: Fall 2021 or never
4) For people with ongoing jobs, downtown offices empty, WFH but HATED cooped up experience, bought Towns or Detached likely NEVER back

4/

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