The math of home prices

We received a phone call and my friend asked me if my assessment went up? I said “yes it did” and he said well we are millionaires now.  It will only mean something when you sell or move or die, take your pick which comes first. 

West Kelowna up 23%, just crazy.  Math is pure, it is always the same, does not alter or change. Put math to work and it can do wonders. Put it to work on the rise of home prices and see what happens. Homes cannot keep increasing and still find buyers but people look at the bottom line and say, ” I am rich”. 

My friend in Vancouver wanted to move to a smaller house but he was clever enough to bind the two deals into one and not put himself in limbo between two expensive deals. It is a fact that offshore money is pressing the prices up as well as more people moving into our areas of Okanagan and Vancouver. The overflow pressure is now into Victoria. 

So, what good are the higher assessments? Well, when you die, your estate can now help your children buy into a home if that is the case. Unless you sell your million dollar home you will not really spend any of it, you will just pay the taxes on it, enjoy. Don’t forget, with higher assessments the insurance companies will also demand more dollars to insure your casa especially if you owe a lot of money on your million dollar home. We all forget the dirty 30's and some of us don’t even know what they were but history can repeat itself. 

Everyone is happy if they fell like winners but can really cry when they lose. Does no one think of the young people wanting a home and family? With these crazy prices no one can move to Vancouver or the Okanagan to work unless they already have a large wheelbarrow full of cash. Remember, I read that there are 27,000 empty homes in Vancouver alone, who will fix that? 

This is already out of control and many people will be hurt when the miracle turns the other way. The banks have never lent so much cash out but rest yourself, it is not really cash, it is only computer entries. Put your mortgage papers out on your table and look at them everyday, it will bring reality to your mind that the math is still there waiting for you to pay. 

Jorgen Hansen

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