Sorry it has been so long since my last post. Staying at home should have meant more time to do posts. But I hit a dry period in my creativity. I have been getting asked a lot lately about Real Estate Investing and investing in general. Seems more people are interested in their financial well being all of a sudden.
I am being asked what I think will happen with Real Estate, and Investments. I doubt that anyone has a clear view in their crystal ball about the future. It is tough to predict what will happen after a situation we have never gone through before. All I can tell you is what I see, and what I think might happen.
When it comes to Real Estate, I think it all depends on where you are. Across Ontario we started 2020 with a very small inventory of properties. We were hoping that the spring would bring out more sellers. But then we all had to go into lock down. The inventory we had was harder to show, and new listings were few.
It surprised me that things stayed pretty active. I had a listing that started during the lock down, and we still had 2-3 showings a week. When we started stage one, the showings went to 1 a day. And the property sold in a week. Around here it is still a seller’s market for reasonably priced homes. (less than $450K.) The comments I hear from clients is that they want out of the city. Our prices have gone up, not down. That may not be the same in the city.
Interest rates are still low, and except for CMHC, the rules for mortgage qualifications have not changed. If you have gone back to work, you should not have to default on your mortgage. There are people who think that there will be all kinds of defaults on the market after September. Not sure the hardest hit occupations where a major group owning houses. No doubt there will be some defaults added to the inventory. If your thinking of getting into Real Estate investing start now. You never know when that great deal will come along. If your at least looking or having me look for you, you won’t miss out.
We saved a lot of expenses with not traveling, and not eating out as much. We actually put more into our investments. There was a huge shift of wealth from the middle class to the wealthy. That usually happens when the stock market tanks. I check “Insider” buying and selling every day. Normally for the last few years the ratio of buyers to sellers has been between 2-1 and 3-1. From the middle of March to the second week in April it ranged from 50-1 to 20-1. That means that there were 50 people buying for every one selling. Stocks, are like houses. You can’t sell a stock unless there is someone willing to buy it. The only way you could sell, at the volumes that were sold, is if you had buyers for all that stock. Good quality stocks that were $10 in February, and sold in mid March for $1.98 were a bargain. Were you buying or selling??? Those same stocks today are at the $4-$6 range.
I bought as much as I could. I look like a genius today. You could have bought almost anything in the third week of March and you would be up today. I am much more bullish (means I like then better) on Canadian Stocks than I am on American ones. I’m not just patriotic, statically Canadian stock are far more undervalued than American stocks. Were there some real winners during the crash??
Yes. I did a Post on a Canadian Company called Pyogenesis. Mid March they were at $.21 a share. I sold them June 21st for $1.94 a share. Yes, I was stupid. Last Friday they closed at $5.48. But Warren Buffet has a saying: “I made most of my money by selling too soon.” Doesn’t make me feel that much better. Pyrogenesis was not alone. I just wish the Pot stocks would come back.
I get frustrated when someone says, “I think maybe I’ll wait till things get better.” In both Real Estate, and Stocks/Mutual Funds there are “DEALS” out there every day. You just have to know how, and where to look. Then you actually need to act! You can start learning without spending any money. For those that would like to learn how or have some guidance, email me. I will be starting to hold courses in the Belleville to Bowmanville areas when we can book meeting rooms again. When is the right time to start investing?? NOW!