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> Whats the issue with your home not being worth the debt you took on? Good point. The problem would arise if I lost my job, had to broaden the cities I apply

> Whats the issue with your home not being worth the debt you took on? Good point. The problem would arise if I lost my job, had to broaden the cities I apply to jobs for and I had to sell my house to move to a new city. Presumably, the market would contract forcing employers to downsize. My employer would downsize and I would get caught up in it. I would then have to choose to keep the house but limit my job prospects or cast a wider net by applying in other cities. At that point, I would have to realize a loss on my house, potentially tapping into my already constrained finances. However; best case scenario I wouldn't lose my job and I get to weather a deleveraging in the house I just bought.

joering2 8y ago
Last crash was before AirBnB that’s one. Second you could always rent the whole unit just to cover the cost of mortage. I seen friends houses going from 180,000 to 30,000 during crash, only to get back to 170,000 some 8 years later. So so long as you can get hired as McDonald burger flipper, you should be able to withstand next crisis, even if it chops off 80% of your home value.
- refurb 8y ago
  Second you could always rent the whole unit just to cover the cost of mortage. That’s not always possible. A great example is Vancouver right now. A 2 bedroom condo is around $600k. That’s almost $5000k when you include mortgage, insurance, property taxes and opportunity cost of your down payment. Units like that usually rent for $3000 tops.
  - Bombthecat 8y ago
    But that is an indication where rent will go to, no?
    - kgwgk 8y ago
      Or an indication of where the selling price will go to....
    - refurb 8y ago
      The rental and purchase markets are linked, but don’t necessarily need to be equal (cost of renting = cost of owning). There is a ton of speculation happening in the hot markets so people will take the monthly loss in rent hoping that the equity gain will offset it.
- irq11 8y ago
  If we enter an economic correction strong enough to drop housing prices by 20% nationwide, AirBnB activity will tank. Travel is a discretionary expense, and people cut back on those in a downturn. If you need a frame of reference, check what happened to marriott during the 2008 crash (fell by almost 2/3).

joering2 8y ago

Last crash was before AirBnB that’s one. Second you could always rent the whole unit just to cover the cost of mortage. I seen friends houses going from 180,000 to 30,000 during crash, only to get back to 170,000 some 8 years later. So so long as you can get hired as McDonald burger flipper, you should be able to withstand next crisis, even if it chops off 80% of your home value.

refurb 8y ago
Second you could always rent the whole unit just to cover the cost of mortage. That’s not always possible. A great example is Vancouver right now. A 2 bedroom condo is around $600k. That’s almost $5000k when you include mortgage, insurance, property taxes and opportunity cost of your down payment. Units like that usually rent for $3000 tops.
- Bombthecat 8y ago
  But that is an indication where rent will go to, no?
  - kgwgk 8y ago
    Or an indication of where the selling price will go to....
  - refurb 8y ago
    The rental and purchase markets are linked, but don’t necessarily need to be equal (cost of renting = cost of owning). There is a ton of speculation happening in the hot markets so people will take the monthly loss in rent hoping that the equity gain will offset it.
irq11 8y ago
If we enter an economic correction strong enough to drop housing prices by 20% nationwide, AirBnB activity will tank. Travel is a discretionary expense, and people cut back on those in a downturn. If you need a frame of reference, check what happened to marriott during the 2008 crash (fell by almost 2/3).