Counterintuitive means "contrary to what seems intuitively right or correct".
This is so true especially when it comes to making investment & financial decisions. When stocks are on the rise, everyone joins the bandwagon and buys & buys & buys stocks, pushing and pushing prices up until a crash OR when real estate became a very hot commodity (remember the pre-2008 days?) when every Tom, Dick, Harry & Jane owned at least one (or two or more) investment property (s) until the bubble burst and people walked away from their investments, resulting in a crash that left the US economy at its weakest since the Great Depression.
And yet - when it makes more sense - people sit on the fence and wait & wait & wait until it no longer makes sense.
A perfect example is investing in U.S. real estate. Doesn't it make sense that NOW (no, it's not too late) is a good time to work towards financial independence and create generational wealth in families as real estate prices have never been this affordable in many cities and states in the United States?
It's a good time for ordinary, everyday people like us to have access to investments that can bring us passive income which we can enjoy in our retirement years and pass on to our children and the future generations of our families.
And here's another one - the Toronto Condo story...
Year after year, blaring news had it that the condo bubble is (was) about to burst, that the condo segment is overbuilt, inventory was up and out of control, etc. etc. From roughly 2008 to early 2012, investors almost single-handedly drove Toronto's condo market - fuelling the push for smaller and smaller condos and fears the market was a bubble bound to eventually burst.
So far, the bubble has not burst and here are some facts:
*** 2013 saw the lowest number of new launches in a decade with the exception of 2009
*** The number of unsold condo units continues to climb in projects still in the pre-construction phase and it will be years until most of those units are built and some many never go ahead (buyers are protected -deposits are held in trust and earning interest and will be returned if the project is deemed not viable).
*** Developers have been cautious but the success of some key projects this year and solid performances of the resale and rental condo markets should improve confidence.
*** Most investors have opted to rent out their units, rather than sell, given vacancy rates hovering at just one per cent and the unprecedented demand now to live downtown AND not counting the hundreds of foreign students who prefer to live in luxurious condos rather than in dormitories.
*** A noticeable pullback in investor demand , more end-users, mostly first-time buyers tired of paying rents in downtown condos averaging more than $1,800 a month, appear to be buying again.
Condo sales are likely to creep up as developers remain COMPETITIVE IN THEIR PRICING AND SITE SELECTION, largely sticking to high-demand, Triple A locations close to core and transit lines.
Developers will be focusing on selling off their record inventory of unsold units rather than launching new projects.
Why condos and not single-family homes? With the average price of a detached home in the GTA in $600,000s - condos offer a more affordable option. For under $300,000 - one can still buy a unit in a centrally located area and with a 20% downpayment, rent almost always covers the carrying cost.
ARE YOU GOING TO BE COUNTERINTUITIVE OR DO YOU PLAN TO DO SOMETHING ABOUT THIS OPPORTUNITY?
We will be more than willing to sit down with you and your family and help you navigate through this process. Our aim is to help you make prudent and informed decisions that will hopefully help you achieve your goals & dreams.
***Excerpts from Susan Pigg of Toronto Star & Shaun Hildebrand of Urbanation