The Motley Fool and Toronto real estate

I have been bearish on Toronto real estate for a while. The moon and the stars are lining up against the market. Affordability, new mortgage rules and the insane amount of debt that Torontonians carry. Here is an article that makes me wonder from the Motley Fool: Will 2017 Finally Be the Year Toronto’s Real Estate Bubble Bursts? Now I am not so sure. The Motley Fool is a tip sheet, in my opinion, selling products that no one needs. The writers are amateurs. In this case, the writer looks too young to have experienced any real estate downturns in Toronto, how quickly they happen and the damage done to homeowners. Some will say it doesn’t matter, but I believe that an experienced hand is an experienced hand.

The party will end

Every bubble ends badly. It’s only a matter of time.

I don’t know if 2017 will be that year. Nobody does. The market could continue rising for years. Or it could crash spectacularly. Anything could happen.

All I know is this: eventually, real estate will get out of favour. The froth will leave the market, and we will see values decline.

The time to sell is before this happens. Don’t worry about capturing the last 10% or 20%. Just focus on the 100% run-up.

Sounds like wise advice, but it provides little help for those that need to get into the market……some day it will happen. I’m not sure if he’s talking about homeowners or stock investments. Matters not. In the end, the inevitable rise in interest rates will bring this to a crashing halt the same way other real estate bubbles were brought to a halt. But this does not mean to say that the rise in real estate prices over the long term will not occur, albeit at likely a more muted pace.