Two nights ago Mary waited for offers to pour in on her client’s home in north Toronto. And pour they did. Thirteen of them, four from other realtors. But it didn’t end there.
“One agent who didn’t get the house actually followed my clients home from the office,” the broker of nine years tells me. “The clients had already accepted a firm offer, but he confronted them on the driveway and tried to get them to take more.”
So this is what it’s come to. Realtor stalkers.
About the same time, two reporters showed up outside a failed Italian restaurant on 11th Avenue in Calgary to witness a ragtag collection of people with blankets and lawn chairs snaking across a parking lot (above). This was the hastily-outfitted presentation centre for The Guardian, whose claim to fame in a testo-drenched town is that it’ll be the tallest residential pointy thing sticking out of the dirt by the time it’s built in 2015 (or maybe 2016).
One reporter, for the breathless Sun, rushed back and wrote a story.
“Eager home buyers lined up in droves — some even camped overnight — for the first chance to buy units in what is slated to be the city’s tallest residential tower,” it read. “Armed with a tent and sleeping bag, Kenneth Ho showed up with his sister around 6:30 p.m. Friday, nearly 18 hours ahead of the noon Saturday start of public sales at The Guardian, a 44-storey tower slated for the East Village.”
And this: “With prices starting around $150,000, interest was expected to be high, said Guardian spokesman Brian Woolley. ‘We probably had 150 calls (Friday),”’he said. But industry insiders say it’s a sure sign of an improving market that cooled considerably after the heated days of 2006 and 2007.”
The other reporter, for the Herald, didn’t impress so easily. “I was assigned to be there,” he told me, “but we canned the story.” With good reason. The frenzy had been largely manufactured. While The Guardian was advertised as being a towering monument to affordability, turns out only one of the 321 units was offered at $150,000 and six more under $180,000. For that, a few people managed to buy 450-square-foot closets.
Oh yeah, and there was also a special on two-bedroom units dangled like red meat in front of the frozen masses – just $314,000. Sadly, only one was available.
“Another fun fact,” the cynical reporter reports, “a condo building on that same site went into receivership in 2009.”
In fact, the average Calgary condo sells for less today than it did a year ago ($289,000), and has yet to recover to the average price in February of 2008 ($295,000) or the winter of 2007 ($301,777). This pathetic blog has been peppered with woeful tales of young virgins lured into the Cowtown condo morass only to end up in negative equity, and hating their house-horny mother-in-laws.
But don’t let that deter anyone.
“When we look at Alberta, and in particular Calgary, you’ve got strong employment growth, you’ve got in-migration and you’ve got vacancy rates that are plummeting and that all points to a strong real estate market,” says the big-erection condo guy. “If you went to Vancouver to buy, you’ve be paying a lot more for the same suite.”
But wait, Calgary has far fewer Starbucks. And gay people. And more Silverados with balls. How on earth can there be a valid comparison? Besides, the Van condo market is coming apart at the seams, and it’s been months since developers rented people to sit in front of a sales centre, and fool Global TV. This is the stuff all good economists quantify.
No, what the above tells us – in both Toronto and Calgary (and places like Richmond Hill, as documented some days ago) – is that residential real estate has entered the demented phase in which common sense is replaced by panicked competition. The ‘buy now or buy never’ mentality never fails to mark a market top, that point of greatest risk.
By the way, a new condo tower on Toronto’s downtown Yonge Street – not to be occupied until 2016 – is now selling parking spaces for $60,000. But to qualify, you have to buy a unit worth more than $500,000. Sigh.
By the way, on Sunday the Government of Canada, now officially called ‘The Harper Government’ announced a new mortgage code aimed at making it clear what penalty you’ll incur for breaking a mortgage before the end of the term. As you probably know, this has been a massive shocker to many people who thought they’d face a three-month penalty and end up with an interest rate differential (IRD) payment vastly higher.
So does the code tell the banks how much they can demand? Are you kidding? But they’ll soon have to disclose their rules in advance, clearly. You can read the document for yourself here. (I expect to be sending out some updates on this shortly, on Twitter. You can follow me @garthturner.)
On a sadly related note, the land transfer tax on the average SFH in 416 is now $24,000.
Yes, everything is completely normal.
Update: The Calgary Herald did in fact run a story on The Guardian mania in yesterday’s edition. Read it here. Notable were the final words: “It’s another sign that potential homebuyers in the city have an appetite once again for inner-city residential condos. And that is being fuelled by a growing local economy and the resulting positive outlook people have in the future.” Once again, the MSM steps across the line, leaping the distance from reporting to boosterism. At least the advertisers are happy.