I was browsing online today and found an article in the LA Times which I thought was an interesting read and something that is parallel to the “symptoms” we are starting to see in the Calgary market these days.
How We Cashed In Before the Housing Crash
Despite being hounded for selling then renting, the writer of the article had the last laugh.
Anyways, have a good weekend! Consider this an open thread. What’s on your mind?
“The choice was simple for Amanda Brown and Anders Nielsen: Pay some of the highest rents in the nation, or sink that money into a mortgage instead. The couple chose the latter, buying a one-bedroom northwest condo for $230,000 and marking their first foray into Calgary’s housing market. Now they regret it.“
The following article was on the front page news of the Calgary Herald yesterday. First and foremost, I don’t personally know the couple and the basis of my post is not one to judge them. When I read the profile of the young couple, I couldn’t help but think that these were some the prototypical buyers in the market 1-2 years ago. Buyers who were not overly prepared (or researched enough) to buy a property but yet ended up doing so after being influenced by MSM and DDS propaganda. Buyers who thought only short term and not long term. It was sexy to own a property in the last year and watch prices go up. Many of the buyers were rushed into the market fearing that they would “be priced out of the market forever.” Fast forward one year and now this couple is faced with a $32,000 bill (half to be paid by the end of May 2008, the other half to be paid by May 2009) on top of their $230,000 mortgage for a 1 bedroom Edgemont condo. One is a student and the other is working full time in the oil patch. I wonder what their next steps will be? It’s really an unfortunate situation and I definitely feel for them. Not to be pessimistic, but what if prices decline further this year or mortgage rates increase (or even a combination of both)? Eventually, they will be upside down on their mortgage and still required to pay for the repair bill on the leaking roof. I sure hope everything works out in the end for the couple, but I’m sure finances will be extremely tight during the next couple of years.
Which draws me to my next point. One of the dangers in buying a condominium is that you own what is inside the walls of your unit, nothing more and nothing less. Now not all condominium projects are built to fall apart, but as a condo owner there is an inherent risk of having no control over repair fees. Generally, if the building requires repair, the tenants are the ones who are required to pay the bill – whether they want to or not.
Maybe sometimes, renting isn’t that bad after all?
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