I spent part of yesterday listening to the rebroadcast of a radio interview with a real estate investor – Lets just call him Mr. OT – who claimed, mid last year, that he was sure that the Vancouver Real Estate market was in a huge bubble and that when the bubble burst, housing values would drop 50% – 80%. He also indicated that he was “short selling” his positions in a specific mortgage lender, in order to gain from market losses. The market losses he suggested, would have been not just bad, but cataclysmic, not just for BC but potentially for the whole country, if he had been correct.
On the opposite side of the studio, taking a much more moderate position, was a fellow Mortgage Professional; one of the local leaders of our trade and board member for our association. Let’s call him by his superhero name, Derwood Henhouse. I made that name up a while ago and it still amuses me. It’s a combination of a character’s nickname from an ancient TV show and the name of one of my favourite albums.
Anyway, what struck me about Derwood’s opening statements was the passion he has for his client’s best interests. He stated that he had merely come on the show to hopefully stop the one person that might heed Mr. OT’s advice and sell up, waiting on the sidelines for prices to drop and then come back into the market. He wanted to remind listeners that unlike Mr. OT, most of them should consider that it’s their home, not an investment, that they were potentially playing with.
Yes, yes, I know. You have an investment in your home – but have you considered what type of investment it really is? Brokers and Realtors commonly say that people search with their heads but buy with their hearts.
By necessity, we all have a financial stake in our homes, but I think the emotional investment is much more significant.
After all, most of us;
Buy our home with a partner – It becomes a life event just because of that.
Invite a dog or cat to come live with us.
Raise a family there.
Have one special place in the home, that’s ours, the place we think of when we’re away from, and thinking about home.
Hide out there, in times when we are grieving.
Over time, the fabric we weave with all those events becomes the blanket we pull over ourselves when we sleep at night, when we go to the kitchen on a cold morning to make that first cup of coffee or when we’re not feeling well.
During times when we hear people like Mr. Oxygen Thief speak, it can feel like that emotionally invested comfort is being pulled from our shoulders. In those times of doubt, it’s best to remember that the value of your home never changes as long as you are invested in it.
If that doesn’t help, well – Keep calm and call your Mortgage Broker. Helping is our superpower.
Want to understand bubbles better, so you can decide for yourself? Go here.