Comments on: The Greater Fool Theory

By: Michael Zou

Michael Zou — Sun, 24 Sep 2006 23:21:32 +0000

I don’t know if Option ARM (Adjustable Rate Mortgage) is availible in Canada but in the States many first time home owners are using Option ARM to finance their homes. Option ARM is a mortgage that enables home owners to pay low interest minimum payment for the first few years then pay a higher interest when the mortgage resets on top of the interest difference that was compounded from paying low interest in the beginning. Little did they know a $2000 montly payment in the beginning period can readjust to $3500 when the mortgage resets. A high percentage of American home owners (12.3% through the first five months of 2006) that are not interest/finance savvy already bought option ARM to finance their homes. This will only lead to a bigger burst More than ever in history, more Americans will default on their mortgages. God bless all the home purchasers that used option ARM.

source: http://www.businessweek.com/magazine/content/06_37/b4000001.htm

By: Lawrence

Lawrence — Fri, 22 Sep 2006 23:58:07 +0000

Home Depot has been reporting slower sales…. that could be a good indicator.

By: Jan

Jan — Thu, 21 Sep 2006 16:41:05 +0000

BC will be fine especially places like the okanagan that attract baby boomers by the fistful. As the population ages in Canada boomers don’t want to live in extreme winter climate and only lower bc can offer them that. While I don’t think we’ll see the growth we have the last three years, I also highly doubt any significant declines.

By: Steve

Steve — Thu, 21 Sep 2006 03:17:54 +0000

My dad and I own a large manufacturing company that builds components for houses with 5 locations on the west coast. Single Family Homes are not looking very pretty now. Most of our customers are 50% of last year. I’d sit tight for at least 1 year anywhere on the west coast.

By: Marco

Marco — Wed, 20 Sep 2006 23:56:54 +0000

People say its a bubble but I think its just part of the boom/bust cycle that economies tend to go through…

By: John Chow

John Chow — Wed, 20 Sep 2006 21:23:13 +0000

If I knew when the bubble will burst I’ll be super rich!

If you’re buying a house to live in and not as an investment then timing really doesn’t enter the equation - you have to live somewhere. Your decision to buy or not should be based on your current financial situation and not on what the market is doing. If you do that, you’ll never buy anything.

By: Austin

Austin — Wed, 20 Sep 2006 11:08:47 +0000

So when do you expect the bubble to pop? 1year? 5years? 10years? I am starting to get into the process of finding out what it takes to purchase a house within the next year or two and I was wondering if it would be wise to wait until the bubble pops?

Also I just wanted to say that your posts really have helped me out and are VERY informative. Keep it up!