I must say I'm really tempted by these cheap prices because of foreclosures and what not, but is now the best time to invest or should I wait a bit? The price of some of these condos are 1/5th of what a condo costs in Toronto so I'm thinking about it...

If you can afford it and have money in the bank to pay off your debts (assuming you will not pay in full) then go for it. If I had the money, I would definitely buy a home in a good location. However, do your homework about condos. I hear they are very annoying because not only you will have to pay monthly dues to the property (though if the dues are low, then its worth it because it includes utilities), you may have to pay the end of the year taxes. I don't know the laws in Canada so I could be very wrong in this. However, in California, it is forever changing and property taxes increases this year! X( OH, and the monthly dues to the condo may increase annually so you should ask their increase rates just in case they will sky rocket the next year and then you are screwed. I think you should invest in a house. Sure it may cost more, but people tend to like houses better so in the long run, you can make good money.

oh, and it is the BEST time to start buying a home, to live in or to invest. The interest rates are lower than what it was before so do it now. It may go down and it may go up but you will kick yourself if you miss the chance on a very good deal. Good luck!

^ Cool. And another thing, that $8,000 tax credit, is it only for US citizens? =/

they are trying to get you with teaser rates. then once you buy it
in a few years the APR is going to default on your arse.

don't be fooled.

it's called business.

If you can buy it cash, do it.
If you have to take out a loan... maybe not.

Don't listen to any of us unless we know the Canadian, more so, the Toronto real estate market. Otherwise, this is all useless advice.

How so...? I know the Toronto real estate market is gonna collapse soon. The market is unsustainable at those prices and not enough demand. Prices are gonna fall soon. But I need advice on US real estate, not Canadian real estate.

Um .... fixed mortgages? You could easily find ones below 5%, zero points.

Besides, these days, no lender is going to give any money to a client who doesn't have excellent credit. They'd rather strike a deal than have the client default.

Well it's great if you can handle the money, I mean the economy is going to go back up eventually. Most ppl that invest in real estate they hold on to the either the land or whatever they bought for a long ace time. Its the best time to buy now as long as you have money and its very very stable. Although I don't know if there is a difference if your Canadian or us citizen(taxes wise, I'm going to assume you would get taxed more because your not us citizen)... >_>

I mean if here is example if you have the money and stable income or whatever and your a new buyer (think of someone that already graduated college is ready to start a family then buying a house while it's cheap is great. and know about the APR stuff. BEWARE of FORECLOSE stuff, I know a few ppl that weren't looking closely to what they were signing and the taxes and other stuff were so much.. it wasn't worth buying. >_>

I think you can also wait for prices to go down cheaper because here (places in the bay area) are still going way down. When it comes to lands stuff look for a super cheap land but a place that is develping ^__^

You were talking about the Toronto market in the original post. How do I know what you are talking about?

And on U.S. real estate front, monkeytree's advice is pretty basic and good. But it's like anything else when you invest in something, have enough capital and don't screw yourself over with the debt. And do your research in the market area. That's it. The U.S. real estate market has bottomed it with this mortgage crisis. Recovery is going to be earnest.

I believe the 8grand already expired. You just have to take chances and get on it if you want a house here. Its very competitive in my area. Homes are for sale at a lower rate but the bidding will increase it. Its tough because you are not the only person wanting to invest. that is why the rich gets richer. They have the money to spend now to make more money later. If you have money, go ask around, look around and please, don't go into one place and decide you want it. Go to many places to compare. you will see what you like, what you don't. You will also see the different architectures and designs of the homes. Compare which styles sell for more and the reasons why. that is the key to investment.

Great, hope you can keep an eye on the California market for me then and let me know where the good deals are haha

I'm more a stock guy than a real estate guy but one thing to watch out for in the foreseeable future is the continued fall of the American dollar. It's at $0.96 today against the Canadian dollar but will almost certainly hit par soon. And what if it hits par? That means if you were to buy a house in the States today, you'll lose 4% on the exchange rate later on when you want to cash out. And what if the Canadian dollar continues to strengthen against the American dollar? You could possibly lose over 10% just having investments in the States and having American dollars.

They're like trying to print money to get out of debt down there so the value of their dollar is naturally going to drop. I'm sure the Canadian government cannot afford to have the dollar at par because exports to the States would be bad so it will be interesting to see what we try to do up here to offset that and maintain a competitive balance.

Anyways, it's just something to keep in mind i guess. No one really knows what's going to happen in 2 to 5 years so if you're looking at an extreme long term investment, then now seems like a decent time to get into the US market. But then again, some are suggesting there's going to have be a second wave of real estate crash down there because those who got laid off from earlier this year will start to run out of money and have to give up their homes.

Short term, long term. It is a great point that the US dollar will drop against the Canadian dollar. (Actually, I'm pretty sure the correct way of saying that is that the Canadian dollar will rise against the US dollar.) But buying real-estate should never been seen as a short term investment, at least not in this day and age. So even though within the next 5 or so years the US dollar faces a lot of uncertainty, if anyone is seeking a solid investment, the US dollar is probably the way to go. The US dollar isn't going anywhere. So many country uses the US dollar as its currency reserve that it would be darn near impossible for it to sink like a ship.

Due to the trends of real-estate over the past century, I think it would be safe to say that the value of land will increase, not decrease.


There is a complexity to this topic, as you're a Canadian. While I point out the strength of the US dollar, it isn't like the Canadian dollar is going anywhere either. I'm sure either route you take, it'll be a fine investment. (I'm still one of those people who thinks real-estate is a safe investment.)

Well in general, it's important to study a country's currency before investing in their country. You wouldn't want to lose money on the exchange because in some cases, that could negate all profits and produce loses. I know the American dollar isn't going anywhere anytime soon but like you said, neither is the Canadian dollar. In fact, while gold has moved from $950 to $1060 USD since July1st, the Canadian dollar has moved from $0.86 to $0.97. This means an American holding Canadian cash would have made more money than holding gold.

Again, nobody knows what's going to happen in the next 2 to 5 years but in the next few months at least, the Canadian dollar will continue to rise against the American dollar because Obama is not raising interest rates soon and Canada is not expected to do anything about it until the two dollars become equal. This means, by not buying into the US real estate and waiting a couple more months, Canadians can enjoy an even better exchange rate before entering the American market probably around December or January.

Of course, the million dollar question is, will the American real estate market rise more than the value of the Canadian dollar during this time? In my opinion, no. I think most real estate market activity that's going on right now is the result of people downgrading from a bigger home to a smaller home. Unemployment rate in the US is at record highs and "real" unemployment rate is estimated to be around 19% and rising. American GDP rose slightly last quarter but unfortunately, spending rose even sharper on the false premise that the economy is recovering. In fact, recent reports show American savings are at all time lows after they rose earlier in the year. Spending is back to pre-crisis levels before the economy has even recovered back to pre-crisis levels. Where is the money to sustain real estate growth?

Yes, real estate does tend to rise in the long term so since prices are so cheap now, you'll almost certainly make money on the investment long term (like 2 to 5 years). However, if anyone is looking for a better entry point, one may be coming in the near future. Just be patient.

Depending on the state, don't forget about the very real risks to your margin:

American tax instability - The taxation schemes (both local and federal) are not set in stone. With the wasteful and unsustainable approach on spending that Obama has taken, we're seeing a rapidly increasing deficit, with no plans to reign in spending any time soon. Also, if you're considering NYS, note that annual tax revenues were way down. Increasing income tax is political suicide, so politicians will seek to make it up via other avenues. Property tax assessments are likely to increase, with possible tertiary impact via fees, etc. as well.

F/X rates - Assuming a mortgage is a form of leverage; when you take it cross-currency, you're assuming the risk of future currency movement in addition to all other possible risk. While this risk can largely be mitigated through currency forwarding, it's worth considering that the US dollar is likely to suffer from continued downward pressure.

Geographical/transit costs - Depending on whether you're based out of Toronto or NYC, maintenance/regulatory issues may factor into increased costs.

If it is cheap, you can make the payments, location's good, and you plan to stay at least for the next 5-6 yrs.... then why not? When the market swings back around, you can make some money off it. Just do your research.

Lancaster, Ca is great for land= near LA and it's developing.

Or for houses look for in anywhere in Bay area from anywhere from San Francisco (if you like the city life) or to San Jose for residential area, but close to everything

Nice info. I think its fair to say tuff has the best insight on this matter thus far.

This is an excellent article on the US real estate market just released yesterday...
http://www.reuters.com/article/companyNews...lBrandChannel=0




So, take it for what it's worth. According to the analyst, fewer new homes are being built which should lead to existing homes increasing their sales activity and leading to price stability. On the other hand, there appears to be some worry that once the $8,000 tax credit stops, then so will a lot of the housing activity. So, maybe wait and see if the tax credit will be extended or not before getting into the housing market as an investment. As soon as the tax credits end, sales activity could slow down causing more housing prices to drop.

I would not buy into real estate in the U.S. at this time -- certainly not as an investment. If you want to live in a house for long term housing, then now is a great time to buy. But in terms of investment, not a good idea. It might be better to buy stocks in real estate-- but even that is not a solid option now. I have lost a lot of money in real estate, although my latest quarter was better, but that's because I pulled out of real estate and went more into socially conscious biotechnology like green energy.

Do your research. Don't be fooled by many of the news stories about the supposed recovery. American media is basically B.S. because there is no independent media. Most media has very close relationships with CEOs of corporations and banks, which is why even before AIG's collapse, MSNBC and other news networks were doing pieces on how the company was fine.

Move a quarter of your stock holdings overseas -- buy stuff in Euros rather than in dollars. The fact that OPEC is pushing to trade in Euro rather than the dollar, with China slowing down and even halting its buy-up of US treasuries, and Israel pushing U.S. to bomb Iran even as U.S. is mired in two wars costing over a trillion dollars, are all reasons to doubt recovery of U.S. economy. Even if things are fine for now or the next ten years, the enormous debt that the U.S. is in will catch up.

If you have the money, put it in a good, solid insured account and let it quietly accumulate interest for the next few years. This is not the time to throw money around, imo. I have been transferring my money into stable locked-in savings accounts and into companies with innovative (but solid) ideas about green energy, including bio-food.