Amazing but (apparently) true stories from The Bubble That Ate VanTown.

We’re not making this up. Nobody can make this up.

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What a million buys…

This 1926 home features hardwood floors, a large renovated kitchen, a bright two-bedroom basement suite, a white picket fence and a tree swing.

Sure, the yard is small, the view out the back is of a giant condo complex, the bedrooms are tiny – the master is only slightly more than 100 square feet – and it is just half a block off one of the city’s busiest thoroughfares. But those shortcomings were quickly forgiven by the dozens of prospective buyers who streamed through the first open house saying, “Honey, I love it” while trying to imagine life without closets.

Think you’d be interested? Too late.

Five days after that open house, seven agents lined up to make their offers. The asking price was $959,000, but because of the competition, the bidding war pushed the price higher. Only two bids came in at less than $1 million. In the end, the home sold for a staggering $1.142 million – more than $180,000 over the original price tag. — Source

Want more? Whispers from the Edge of the Rainforest.

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Meanwhile, the doctor is now sober enough to be IN:

Garth: I currently am in the last year of my 5 year 4.15% mortgage. Mortgage is due September 2010 however, Scotia will allow me to renew six months in advance which means March 2010. Do you think I still have a good shot at getting in to renew in March before interest rates go up or should I start looking at maybe renewing now? Scotia’s “Special Rate” 5 year rate is 4.19% which is basically what I currently have and been able to easily make my weekly payments plus some.

While I have you I have another question regarding the housing market. I have really been considering cashing out on my home but having a wife and two kids under 5 makes it a little difficult to just pick up and move just because we can make some money.  I am 34, I have a detached 4 bedroom house in the Bloor West Village, purchased 4 years ago for just under 500, mortgage currently is about half of what I purchased for.  Had an agent come and give me a free evaluation and I have been told it could fetch somewhere around the 700 mark. So a 200ish profit in 4 years minus all the fees of course so still not bad.

So in the end after all that writing, my questions remains the same, when do you anticipate the BOC will increase the rates? Because once they do my guess is the whole real estate bubble is going to go bust, and it will be too late. — Doug in Toronto

Sell. Where else will you find $200K in tax-free capital gains in your lifetime? This market clearly will not survive many months of rising interest rates, and when they do start to sizzle you could see an imbalance between listings and demand materialize within a few days. Your ‘considerations’ – young kids and a possible minor adjustment on your mortgage (even a three-month penalty) pale in comparison to the potential gain to be collected.

Just make sure the agent isn’t lying to you (been known to happen). Get two more opinions, and list now. This weekend.

We are like the hoards of first time home buyers in Canada – we want a house.  For a year we were renting and torn between the hormonal decision to buy or to sensibly wait until the market corrects to vultch.  Anyway, hormones were victorious and we’ve recently bought in an older neighbourhood in Calgary :)  We’ve tried to follow some of your guidelines in selecting a house that is close to transportation, has a yard for a garden, isn’t a McMansion so bills are manageable and if my husband has his way, we will be buying a generator and solar panels.  This is a long term home for us (we’re 28 and 33) and have selected the neighbourhood for schools, parks, family nearby and the house itself is exactly what we wanted.  We’ve not got more than half out net worth in the home and we’ve put just about 50% down.  Now the question becomes – HELOC or traditional mortgage.  I’ve always been under the assumption that mortgages are a terribly expensive way to borrow money, so when we qualified for a HELOC, we thought that was the way to go.  My husband and I both believe that interest rates will rise and since our HELOC is prime + 1%, maybe it is best to lock into a fixed rate 5yr.  Our goal is to pay it off as quickly as possible, but we’re thinking about kids in the next few years so we’ll be on one income.  Any thoughts? — Morgan in Calgary

Obviously you’d have paid and financed less if you’d waited another year, but at least you have a 50% stake in your home. This means you’ll avoid the negative equity surprise which is awaiting too many young buyers.

A home equity line of credit at 3.25% is no bargain since that rate will be rising faster than conventional mortgages, for reasons which make bankers moan at night. Besides, you can construct a mortgage for yourselves which accomplishes the same, but better protects you from rate fluctuations. Just take out a conventional home loan and shorten the amortization, plus arrange to have weekly payments (the right kind). You can still lock in a rate, spread some of the interest pain out over future years, and yet pay off the principal fast.

Maybe even before your hormones run out.

Garth, I would like your thoughts on raw/farmland. The wife and I have a change to add to the 160 Ac we have now. This would bring the total to 260+/- Ac. It is going to cost us $1200/Ac to buy. This will increase our debt to over $200,000. There is oil lease revenue (4 Wells) with this land to add to 4 wells on the 160 Ac we have now. This would be around $16,000 revenue plus what we get from the land revenue. We are in our 40’s and both work full time in the food store/ oil industries in the western prairies. Would like your thoughts along with the blog hounds. — Doug on the Prairies

Well, cowboy, I think you should go for it.

The purchase price of $192,000 for 160 acres seems reasonable in your neck of the woods, but more importantly, the oil lease revenue will finance the whole thing. If you borrow 100% of the cost on a three-year term at 4%, the financing charges are just over $1,000 a month. And unlike raw farmland, financing should not be a problem if you can throw some binding leases on the banke’s desk.

Besides, this is a cool thing to do. Oil will be over $100 a barrel in the foreseeable future. Peak oil is a looming reality in our lifetime, so the prospects are nothing but sound for small producers. And unlike all the vulnerable, flaccid, dependent, urbanite weenies in this country, you have spurting crude!

I`m starting to tingle typing this. Mail my barrels to Box 9, Caledon Village Ontario.