“I’m a single person who makes a pretty good salary but housing costs and all of the taxes keep me at home. I’m just trying to keep my head above water so that I don’t have to sell my condo.”

Posted on 21 October 2011 | 14 Comments

“I’m a single person who makes a pretty good salary but again, housing costs and all of the taxes that I keep getting hammered with keep me at home. I pay my bills, have too much debt after being unemployed for a little while and I’m just trying to keep my head above water so that I don’t have to sell my condo. I really wish the governments would wake up to the fact that we can’t afford to pay anymore taxes!”
- Kittybay, comment in Vancouver Sun 18 Oct 2011 9:03am

This entry was posted in 05. Where do Buyers get the money?, 08. Overextended Buyers, 11. Regrets about Investing in RE, 18. Spot The Speculator and tagged , , , , , , , . Bookmark the permalink.

14 Responses to “I’m a single person who makes a pretty good salary but housing costs and all of the taxes keep me at home. I’m just trying to keep my head above water so that I don’t have to sell my condo.”

  1. E.G. | 21 October 2011 at 6:29 am | Reply

    It’s hard for me to feel sorry here. He/She knew what he/she was doing when getting into the deal in the first place.

    When I buy a mutual fund, stock, or bond, and it tanks, I don’t cry a river about it to everyone. I suck it up and live with the loss. But then again, I didn’t borrow to the hilt (didn’t borrow at all, actually) to buy it in the first place.

    And therein lies the rub. This person took on a risky investment (as all investments are to some extent), but leveraged themselves to the hilt to do it.

    Here’s my solution. Sell that condo for as close to what they bought it for as they can. Find cheap rent in Vancouver. OR look elsewhere, for crying out loud. It’s not like the GVRD is the only place on earth… or even the only place in BC. I hear that there are jobs to be had in Alberta.

    Geez.

    • vreaa | 21 October 2011 at 6:43 am | Reply

      E.G. -> We understand your position.
      Thing is, most in his/her position will not do what you’re suggesting.
      At this point in the market cycle, they are still conditioned to believe that it is responsible and wise to hang on, tooth and nail: they’re sure that ongoing rising prices will make their ‘investment’ a good one.
      The fact that so many ‘innocents’ are playing so large, with leverage, remains underappreciated.

      • E.G. | 21 October 2011 at 10:27 am |

        True enough. But, if they’re so sure about this (even when doom is staring them in the face), then they need to accept the costs of this type of “investment.”

        So, crying about taxes is nuts. Really, how much are his/her taxes compared to the interest payments this person is dumping into the bank? Peanuts!

        And, for that matter, crying about bank profits (“let’s go occupy!!!”) is nuts as well. You sign up for it, you pay it until you can get out of it. If you really want to play financial games with the roof over your head, that’s your business. If the bank, the CMHC, and the government enable it, then fine and dandy as well. You got into the game because you thought it was a way to sure riches. Find a way to leave the game or take your lumps.

        No one is innocent here. Some are just more (or less) innocent than others.

        —–

        On that note, the Vancouver “occupy” stuff drives me up the wall. There are literally hundreds of places to live and work across the country where you are not nearly as beholden to the banks.

        And, anyhow, even the “poorest” person at one of those protests is, for all intents and purposes, infinitely wealthier than the vast majority of the rest of the world. The reality is that sub-Saharan Africans, et al., should be the ones yelling “we are the 90-something percent.” But most of them are too poor to do anything other than find ways to survive from day to day.

        With that perspective, in my opinion, Vancouver mortgage/tax/whatever crybabies can take a hike.

        ::end of rant:: :)

    • jesse | 21 October 2011 at 10:42 am | Reply

      She’s complaining about taxes when tax rates have fallen for 10 years and now there’s in effect a structural deficit. It sounds like she has a bit of a structural deficit of her own. No irony there.

  2. Gord | 21 October 2011 at 11:15 am | Reply

    VREAA says “conditioned.” He’s just being politically correct. :-) The more accurate term is “brainwashed.” Never underestimate the power or the reach of the real estate industry and the ownership message.

    It’s simply incomprehensible to most people in our little rainforest that values could *ever* hit a steep, prolonged decline. Hit them with as much logic as you want, show them how prices are already ebbing all over the place, remind them they can buy a brand new SFH just five minutes south of White Rock for a mere $200,000, point then to Canada’s crushing per capita debt, play them excerpts from Tanya Beja’s Global series – it just doesn’t matter.

    Must…hang…on…to…condo…above…all…else.

    • vreaa | 21 October 2011 at 12:17 pm | Reply

      Agree in spirit, Gord.
      I would still put in an argument for the term “conditioned” though, because it includes activities we’d see as “brainwashing” coming from all the vested interests, but it also embraces all those other incidental, non-planned factors that cause an individual to believe that ‘owning = good’.
      For instance, the most obvious such example is the ‘conditioning’ caused by rising prices… prices rise, it feels good to be participating as an owner, “I was right to buy”, then they rise some more, it feels even better.. ‘owning = good’ (and the converse for not owning). The market has no intent in-and-of-itself, it isn’t intentionally ‘brainwashing’ the owner, but its natural action is conditioning them to believe that owning is good. Powerful positive feedback loop; leads people to buy even more; leads other people to buy in attempt to emulate success; prices keep rising; etc. This is why speculative manias gain such powerful momentum, because there are naturally occurring positive reinforcements that are inherent in an inflating bubble. These forces are more important than the “brainwashing” that the vested interests perpetrate.
      Like the proverbial piss-up-in-a-brewery, the direct effects of the alcohol are far more important than precise way in which the beer is promoted or served. You don’t have to sell it to us, we’ll fight to get it ourselves.
      If you are going to brainwash a community, it is wisest to do it in the same direction as ‘natural’ forces that are already at work.
      –
      Using editorial license to elaborate off-topic:
      This is partly why it’s hard to organize large outbreaks of peace.

  3. rob@bob.com | 21 October 2011 at 11:58 am | Reply

    She wants to hang on to her condo because, I’d bet, she seems to think she owns her condo. In fact the bank owns it and she only owns whatever she could get for it less what she owes. No doubt she is in a precarious position. I don’t know her details but if she’s like the majority of newer “owners” in the region whatever equity she has will quickly disappear on sale through commissions, lawyer fees, discharge of the mortgage (Interest rate differential/early discharge fees), and moving costs. Say you have 10% equity in a $300k condo… after those charges your left with maybe $10k and no home. Go rent and that $10k will be gone in 7 months.

    Still… I’d rather sell now and take the 10k then sell later and owe when the values fall. Then move to a better place with better jobs and better housing at better prices looking at better weather. Living with stress like she has is no way to live at all.

  4. Beyond Debt | 21 October 2011 at 12:11 pm | Reply

    “And, anyhow, even the “poorest” person at one of those protests is, for all intents and purposes, infinitely wealthier than the vast majority of the rest of the world. The reality is that sub-Saharan Africans, et al., should be the ones yelling “we are the 90-something percent.” But most of them are too poor to do anything other than find ways to survive from day to day.”

    I’m not sure what you’re arguing here? Just shut up, and put up, until you’re so weak can’t say anything anyhow. WTF.

    Why should we let billionaires get rich at our expense because people elsewhere are starving? Your points don’t connect.

    • E.G. | 21 October 2011 at 1:07 pm | Reply

      No. I understand the grievances. I am no fan of corporatist nonsense either.

      I’m not saying “don’t protest.” I am saying that a bit of perspective is necessary. I’m also saying that a lot of the protesters don’t have a freakin’ clue about how good they actually have it.

      I’m also saying that there are ways to avoid being beholden to the corporate fat cats. One way, among others, is to not take on big mortgage debt. Or other debt.

      But most big city dwellers (and particularly most Vancouverites these days) are too myopic to see much of anything other than their immediate environment. And so they get sucked into the corporate morass and soon find themselves in the breadline, or the protest line, or both.

      • terminalcitygirl | 21 October 2011 at 2:45 pm |

        Beyond Debt took the words right out of my mouth… also:

        “I am saying that a bit of perspective is necessary. I’m also saying that a lot of the protesters don’t have a freakin’ clue about how good they actually have it.”

        Really? I think the majority of alternative media stuff I’ve seen on the protests indicate the protesters do have perspective and a clue. How have you come to the conclusion otherwise?
        What drives me crazy is people bashing the protests/ protesters who are out there everyday, trying to educate and exploring different ways we might approach living in a world that serves the interests of everyone and not only a select few. They put up with a lot of shit from the msm, cops, hecklers, etc… I think they’re brave for doing it, thank god someone is. Finally.

    • anonymous | 23 October 2011 at 5:56 pm | Reply

      Here’s the point: if you demand redistribution in order to reduce inequality, be careful what you wish for. Because a true redistribution — on a global scale — would mean you would lose, not gain.

      Imagine a millionaire telling you, “Hey, I’m part of the 99.9%, just like you. Let’s join forces and gang up on the 0.1%” Would you buy that? I doubt it. Well, to the folks living on $1 or $2 a day, this “99%” business sounds just as phony. They’re the 90%, you’re the 10%. You aren’t “us”; you’re “them”. Yes, you.

      You complain about the rich… but you ARE the rich. And if push came to shove, you’d be every bit as reactionary and selfish as those you criticize, sooner than give up your booze and smokes and lattes and iPads and 420.

  5. Robert Dudek | 21 October 2011 at 3:13 pm | Reply

    Agreed about the protesters. The fact that poor people in the world are exploited doesn’t mean the ordinary people of the “developed” world are not being squeezed. It is basically the same group of people (and their system) doing both. The protestors should be seen as allies of the global poor.

    • MM | 21 October 2011 at 4:35 pm | Reply

      Maybe RE contracts need a big sticker: “Know you limit, play within it”

      Somehow the lesson about financial prudence was removed from the curriculum, or maybe something you need to learn on your own (but didn’t)?

    • anonymous | 23 October 2011 at 6:13 pm | Reply

      I doubt the global poor see it that way. If Donald Trump complains that’s he’s poorer than Bill Gates, would you care? By the same token, a person living on $1 to $2 a day (that’s at least 25% or more of the world’s population) is not going to be particularly sympathetic to you. You’re wealthy in their eyes.

      Arguably, it’s the 1% who are natural allies of the global poor, because they’re outsourcing jobs and importing products made by workers overseas. For example, China’s export industries have lifted hundreds of millions of people out of abject poverty over the last three decades, and Walmart and other companies have abetted that process. Viewed in a certain light, globalization by multinational corporations has actually been a powerful force for income redistribution on a planetwide scale.

      Yeah, that’s a devil’s advocate argument to some extent. Nevertheless, it’s rather presumptuous to claim that the global poor ought to align their interests with yours. They’re likely to see things quite differently.

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