The other day my 11-year old daughter was watching one of those house flipping shows on HGTV. When I came home she exclaimed "Dad! There was this woman doing a flip, and when she bought the house she didn’t even get an inspection! Can you believe that?" The story continued, "When they started the renovations they found termites, and cockroaches! There was all kinds of damage and it kept costing her more and more money! So she had to work during the day to get more money for the flip, and then she’d get mad about what happened to the house when she wasn’t there. I mean, what does she expect? She totally didn’t know what she was doing…"
"I can’t believe it," I said while thinking to myself that even a 6th grader knows you should get an inspection, and can tell when someone isn’t prepared to flip houses. I had to feel sorry for the dupe who ended up buying the house from her (if anyone ever did) because I’m sure those renovations weren’t done as well as they should’ve been. These flipping shows make it seem like such easy money, but rarely do they ever indicate what the home actually sells for – the ones I’ve seen end with what the seller is going to ask for the home. Flipping for a profit is much easier when the market is going up, I would expect we’ll see fewer of these shows as some markets in the US continue to languish.
PS – house sales in the US went up 2.9% this month!
I think you mean sales volume increased 2.9%.
“Purchases increased 2.9 percent, the first gain in seven months, to an annual rate of 5.03 million, the National Association of Realtors said today in Washington. The median home value dropped 8.2 percent from a year earlier, the most since the organization began keeping records in 1968″
http://www.bloomberg.com/apps/news?pid=20601087&sid=aHOMZAVSyBks&refer=home
yes, february 08 sales were up 2.9% over January/08 sales, but down 27% compared to February/07, please stop the spin
“PS – house sales in the US went up 2.9% this month!”
It must be all the Arizona realtor’s spamming Edmonton craigslist!
Yes Nate, thanks to AZ realtors local baby boomers now know that it makes perfect sense to get rid of their old junk house in Edmonton, buy a great home in Arizona and invest or spend the difference
Most baby-boomers are moving to BC and Ontario not Arizona. Free health care.
I work with 8 people, two couples (the only baby boomers+) are moving to BC/ON within 2 years.
If Sheldon can spin one glitch in stats… in the rediculuous state of affairs that US is in as good news, I mean the worst ever in the history of record keeping – my god, I am sure he thinks that Edm market is about to go to $1mil in a year (median).
WOW!
The report is seasonally adjusted but I am not sure if it considers the leap day. That alone will push sales up 3%.
CTV.ca – March 26, 2008
“We’re into the most incredible renter’s market coming up. If you simply want to make money and secure your finances, you’re going to rent, because renting is far, far less than the cost of owning right now,” Turner said. “And it will remain that way for the next couple of years.”
So Vern, what are you going to rent? What ever it is, it is owned by someone. Someone had to buy in order for you to rent it so if no one buys then no more new product and nothing to rent. Good solid thinking Vern, do you rent your car too? How about your furniture? I don’t actually care if you rent or buy cause you will still need a place to live and that means someone is still going to make money off of you. Bravo Vern.
Car27 -
Your dumb rant makes my point better than I made it myself.
My money will be going towards my living expenses while renting – it is only 2X as much as my car – well worth it. The rest of it will be invested and saved.
If I buy a house now, I will loose most of my life savings when the price goes down – even if it goes down by 5%. The number of empty houses sitting on the market are about 40%
Additionally the interest alone initially would be much higher than my current rent.
Thanks but no thanks. I won’t be buying the house that you speculated on.
I will wait for some sanity in this blue-collar town. Bottom line is, 35% affordability number is just right for Edm.
Hopefully your daughter is not learning that flipping homes is a great way to earn a living… inherently risky and there is a moral hazard.