Statistics

Month after month, the real estate industry churns out numbers designed to obfuscate and mislead. And it works. Despite record debt, unreal prices and the growing risk of painful losses, most people you know are still house horny, right?. They’ve been conditioned to think that financial assets are scary and real estate’s safe. Proof? Look at the comments posted here yesterday. Worthy of a pathetic blog.

Real estate boards were once content to shove average numbers down consumers’ gullets, even when they didn’t reflect median values or emerging trends. Now it’s worse. Major boards have adopted the fabricated ‘MLS Home Price Index’, making it virtually impossible to detect shifting market conditions. The frankenumber was hatched just as housing was set to enter its big slide. Talk about coincidence!

Let’s scratch at the numbers released in Toronto yesterday. Here’s what the realtor cartel had to say:

The average selling price in the first half of July was $473,466 – up by 2.3 per cent compared to last year. On average, homes sold for 98 per cent of the asking price in 25 days – in line with July 2011. Price growth was strongest in the City of Toronto, climbing by 3.5 per cent to $496,645.

“A better supplied market contributed to a slower annual rate of price growth in July relative to the first half of 2012,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

And what do you think the average granite-lusty reader of the Toronto Star will think when absorbing that? Of course. The market’s hot, especially in the downtown areas. So, let’s buy that condo, babe!

This is exactly what the industry wants you to believe, even as the foundations start to crumble beneath it in the wake of new lending regulations, flatlining incomes, ballooning listings and eroding prices and sales. But how could things be the least negative when the ‘authorities’ say they’re swell?

Easy. Numbers lie, and they conceal.

For example, while the real estate board says “price growth was strongest in the City of Toronto, climbing 3.5%,” when it comes to detached homes the opposite is true. Sales fell in the centre (down 4%, even when unbuilt condos are added in, fudging the stats), and prices went south. Consider the market value of a SFH in 416, which has just tumbled to the lowest point since January.

In March that average home was trading hands for $842,235. By June it had wavered a little, down to $817,678. And by last week it had plunged to $728,834. That’s a decline of 13% from the spring, and a withering 10.8% in a single month.

Realtors are blaming Toronto’s dumbass double land transfer tax, which would be valid if it had been introduced in, say, May. But the thing is now four and a half years old and part of the woodwork. The reason prices just tumbled should be obvious to everyone: they rose too far too fast on a wave of cheap money, lax lending and public avarice. Houses reached the point of unaffordability in both Toronto and Vancouver this Spring, and now there’s only one direction in which to travel, pushed along by a government terrified of a bursting bubble.

This is not news to Ross Kay, a GTA realtor who risks shunning and prolonged backroom torture at the next CREA convention for reading this blog. “Since your site is one of the few to try and separate the truth from the propaganda, I thought I would forward the following,” he says.

Real Estate values have truthfully fallen far further than is being reported in both Vancouver and the GTA (even Oakville).  The public, through marketing vehicles like average home prices, regional real estate association average monthly home sales statistics and most recently the HPI, are having their attention diverted from reality to a statistic that holds little value.

In a rising market, like the one the GTA has seen since 2000, the actual market value of a home is established from the last sale price of a similar home.  It is not an average of the last 3 sales, but rather based on how high the last one sold for and can we get anymore.  Where 3 similar homes over the last 45 days sell for 300,000, 305,000 and then $345,000 (the last in a competitive bidding war) the next home listed (assuming no big negative features) will not be the average of  $316,666 but rather $349,900. After that 345 sales takes place buyers, sellers and agents all assume the next sale will be even more and act accordingly.  THIS SHOULD BE VIEWED AS PEAK PRICING

In a stable market, where the buyers and sellers are under equal pressures, the average sale price is valid.  So, in the example above the next home listed would probably be $319,900 at list with a willingness to accept anything over $305,000 being the understanding of buyer, seller and agent. THIS SHOULD BE VIEWED AS AVERAGE PRICING

In a declining market, where sellers outnumber buyers, the average sale price is again not valid.  In the above example the next home listed would be $309,900 with the seller and agent praying to get an offer of $300,000 but with a buyer thinking $295,000. THIS SHOULD BE VIEWED AS TROUGH PRICING.

So how does this apply to the market as it exists now? It was not unusual in the GTA to see homes sell for 15% over list in competitive bidding wars.  Those wars have basically ended (unless the home is truly under priced).  That $345,000 home has quickly returned to $305,000 or a reduction of $40,000 overnight.  The math quickly adds up to an 11.6% drop.

So the truth is, the bubble burst the day the bidding wars stopped.  The unlucky few who purchased at PEAK PRICING have already lost about 12% equity and in most cases are already living in a home 7-9% over mortgaged (as they bought with 5% down).  In some cases where Fees and Cash back was involved, they are already in a 10-15% negative position.

I wonder why CMHC or any other real estate voice doesn’t communicate this truth.  The truth is: “If you bought at PEAK PRICING” with less than 15% down, you are already under water with your mortgage, even if that purchase took place one month ago.”

The reason’s simple, Ross. People can’t handle the truth. They believe they’re richer than they think. We are so screwed.

198 comments ↓

#1 TurnerNation on 07.18.12 at 9:53 pm

Is that Bandit in the pic?

#2 Grim Reaper/Crypt Speculator on 07.18.12 at 9:54 pm

Fiiirsssszzztttttttttttdddttt.

#3 Randy on 07.18.12 at 9:56 pm

Almost as honest as the inflation and unemployment statistics….Bahaha…

#4 North o' TO on 07.18.12 at 9:58 pm

Does the CREA not understand that they are seriously hurting their reputation in the long run? I’d anticipate nothing less than a massive backlash when the current housebuyers learn that CREAs obfuscation has cost them massive and possibly lifelong losses.

#5 Dr. WAYNE on 07.18.12 at 9:59 pm

I was going to ask “where is the ethics and morality of statements made by real estate boards” … then I thought … what a stupid fricken question … they don’t have ‘any’ ethics or morals’ …

#6 Debt's Dark Embrace on 07.18.12 at 10:01 pm

Hahahahh… Funny thing about numbers……I once asked an accountant “What do all these numbers mean ?” He replied ” What do you want them to mean ?”

#7 T.O. Bubble Boy on 07.18.12 at 10:02 pm

This is not news to Ross Kay, a GTA realtor who risks shunning and prolonged backroom torture at the next CREA convention for reading this blog.

I’m pretty sure being at a CREA convention is torture enough.

as the kids would say: Ross is Boss.

#8 gloom and doom on 07.18.12 at 10:04 pm

let the games begin!

#9 JayBe on 07.18.12 at 10:04 pm

Hey Mom! I’m on Garth!

#10 ronthecivil on 07.18.12 at 10:05 pm

Yep, just devalued the gfs condo by 10k on our monthly numbers analysis.

In good news the place is out in the Valley and at the low end of the market so as much as she hates renting she at least knows the market is coming down so we can hold off upgrading. In the meantime being at the low end either one of us can fund the mortgage even at a way higher rate.

#11 sotiri on 07.18.12 at 10:06 pm

Good post as usually…thanks Garth.

#12 youliana on 07.18.12 at 10:08 pm

It is really unfortunate that statistics can be twisted and turned anyway you like to serve certain interests.
HPI is one of them. Should not have been invented.

#13 vincent on 07.18.12 at 10:09 pm

Does anyone know how the “MLS Home Price Index” is calculated?

#14 Ryan Perich on 07.18.12 at 10:10 pm

I am waiting for the big “national” on CBC with Peter Mansbridge or Lloyd Robertson on an expose on “how were Canadians duped into beleiveing that month after month, year after year since 2008, everybody’s house price kept rising every month, and during the recent months, nobody saw anywhere written that house prices dropped THIS month…it was always years ago it happened, when it was written (I’ve come across a few articles of “oh, ya , that year in 2008 housing prices fell”…written in 2011, and not a word written that I saw in any newspaper or magazine actually during that time. In 5 years in Edmonton I haven’t heard of a single person getting their asking price what their realtor suggested. and at no recent time did EREB state “prices are DOWN !” during the most recent 3 months…only prices are up.
and how, after iceland, Japan in 1990, Ireland, portugal, spain, Australia, U.S., etc, etc where house were often LESS expensive relative to incomes with LESS land area than Canada, Canadians think “housing prices will still continue to go higher” . we really are that stupid.

#15 East Van on 07.18.12 at 10:13 pm

The most accurate numbers are in this index:

http://www.housepriceindex.ca/

#16 Smitty on 07.18.12 at 10:13 pm

Thats what she said.

#17 ShowbiZZa on 07.18.12 at 10:14 pm

Primo! 
I’ve followed your blog for years and generally agree with almost all your points. Thanks for all your keen insights!
However, Garth,  I will remember you saying  2 days ago ” Even in the 2008 crash (which will not be repeated in our lifetimes)”
How can you say that given sovereign debt crisis’, Arab springs, and a world of increasing volatility?

Easily. It won’t happen again. — Garth

#18 TT on 07.18.12 at 10:14 pm

Very nice and clear… I don’t think most of Ross’s colleague actually understand any of this though. I often hear “it’s a fact that RE will always go UP….look at the stats!”

#19 Musings on 07.18.12 at 10:14 pm

Every one pitches their own version of reality. Fuzzy logic like fuzzy math makes for a bad, bad ending.

#20 Keeping the Faith on 07.18.12 at 10:15 pm

yeah richer than they think … dumber than they know

#21 Lost cash on 07.18.12 at 10:16 pm

If prices are down that much, when is the buying opp going to be best? One year , six months, three years?

#22 bigrider on 07.18.12 at 10:16 pm

Always wondered.

If commissioned based advisors were so bad and fee based advisors were embraced with great vigor as they seem to be these days, how well would an advisor who offers a menu of services at a specific cost for each service, regardless of portfolio size, do at gathering clientele.

I know, deleted again.

Just don’t ban me GT.

#23 Saskatoon-Living on 07.18.12 at 10:17 pm

Bring on the Saskatoon analysis Garth!!!

#24 Duke on 07.18.12 at 10:18 pm

Down 12% in Godless Toronto and 15-20% in Vancouver based on the Realtors own pricing model. And we haven’t seen anything yet.

I had the opportunity to purchase an unrenovated 3 bedroom bung in 2002 for 250k. It recently sold for 650k in worse condition. I think the Suburbs and Condo Communities are destined to failure. The country and small towns are the future.

#25 Paully on 07.18.12 at 10:19 pm

How does the old saying go?

“There are lies, damned lies, and statistics!”

I also like this one:

“Statistics are like a bikini. What they reveal may be interesting, but what they conceal is vital!”

#26 same house 24 years on 07.18.12 at 10:21 pm

there is the other real estate index teranet index which gives a better indication of price movement
http://www.housepriceindex.ca/

because the sellers are more vocal hawking their wares their hypie index gets quoted in the press and taken at face value by the sleepy public.

#27 Tanya on 07.18.12 at 10:23 pm

People I know still think the markets going up ….next year!!!

#28 Scalgary on 07.18.12 at 10:23 pm

Garth,

Very interesting post from Ross..! Can i sue RE board for misleading information?

Does all RE board across Canada apply this calculative method?

Thanks for the eye-opener…!

#29 Smoking Man on 07.18.12 at 10:25 pm

Garth you know darn well that july prices are always lower than March april prices, year after year.

If say Mar 2013 is lower than Mar 2012 I would say the fat Lady is on the stage. Till I see a month year to previous month year which is lower. Its premature crashulation

So explain a 10% drop June to July. — Garth

#30 Hello Garth! on 07.18.12 at 10:25 pm

You never talk about negative correlation of preferred shares and interest rates (you herald higher interest rates which will affect negatively preferred shares price). How should I unedrstand it?

I said I would address preferreds shortly. Stay afraid. — Garth

#31 Frank on 07.18.12 at 10:26 pm

Many more for sale signs in Peterborough and not many selling as before. The tide seems to have turned.

#32 Loan money to anyone on 07.18.12 at 10:26 pm

There was ominous news in last Saturday’s Calgary Herald on page C1:

“Drilling for dry natural gas has ground to a halt and conventional oil and liquids producers have been cutting capital budgets”. The articles says there is no pullback in expenditure from the oilsands companies, however, there are serious issues (pipeline uncertainties, wide price diferentials). Also, the oilsands are almost 800 km from Calgary.

You gotta wonder if Calgary home prices will be dropping soon like they are in other Canadian cities.

#33 eviee1973 on 07.18.12 at 10:27 pm

What’s up, the public site still shows yesterdays article “Fear Factor”, yet as a link through Facebook Thursday’s article of “Statistics” is readable

#34 MC on 07.18.12 at 10:28 pm

The ignorance of some posters on this blog is saddening. You go on and on whining about how investing in REITs and preffereds is gambling and how the only way to go is GIC’s.

Now ask yourself this question…When was the last time you were speeding on the 401 or cut of a transport truck to close. Or when was the last time your kid almost critically hurt themself tripping over something in your house…

And you guys are worried about loosing some money in one of the more safer high yielding investment. I don’t know about you but i’d worry much more about the risks on the roads, and the life of myself and my family, than with some well placed investments.

It is my theory that the real wealth with those in the 1% is their ability to logically understand and manage risk. Anybody can get lucky and win the lottery…

#35 furst on 07.18.12 at 10:33 pm

FURRSSSST! Ross Kay is da man. Loved his objective analysis and crisp explanation of the market as it stands. Wonder if TD is predicting a 15% dip from Trough pricing?

#36 Amazing on 07.18.12 at 10:35 pm

Now.. if I had a dollar for every time someone said “I hate typing on my iPad or iPhone”… I would be a rich individual… I agree with the posts that say that the market is far worse then we even know. My neighbour just changed agents, she is frantically staging, painting, emptying the house. The other agent is probably freaking out. There are soooo many agents. I predict there will be more and more looking for a “J… O… B” It is sad that the market got to this point. It’s confusing for people to decide what to do. Get out, stay, rent, buy… so many options. However it is nice that there are still options. This could change for many people in the near future. Break out the popcorn and enjoy. If you are diversified and living within your means… things should work out ok. I will tell you one thing… even though people are maxed out financially they will not give up their house or vacation. It will be interesting if they actually have to start sacrificing something. Interesting times.

#37 Prepmonkey on 07.18.12 at 10:35 pm

First! Where I work close to Richmond I was stunned at the amount of commercial real estate available. For example, a 143,000 square foot building previously occupied by Kodak. I don’t know who thinks this is a great time to get involved in a major purchase after seeing the sheer volume of “For Leas” signs…

#38 So sad on 07.18.12 at 10:37 pm

Don’t forget that housing prices , average or otherwise, don’t take into account the quality of the property.

Most SFD in the downtown core are at least 50 years old and vary from “original condition” to gutted, underpinned, extended and granite countered up to the ying yang, plus every condition in between. Trying to figure out where in this continuum any specific listing
lies needs a crystal ball.

Getting the place inspected isn’t a guarantee, either.

Throw in a buyer who is willing to throw $$$$$$$$ around with as much thought as if they are buying a
coffee at Starbucks and you have the madness we see today.

Have people started to clue in? Doubt it

#39 Curious George on 07.18.12 at 10:40 pm

If these recent over-bidders are in fact already underwater by 10~15%, they may as well get a HELOC and renovate their place into a church/temple/synagogue.

Cause there’s gonna be a lot of praying over the next 5 years.

#40 What's your plan "B" on 07.18.12 at 10:42 pm

I realy do not wish to sound mean but for as long as there are turkeys there will be Christmas diners. And i am not even a realtor……

#41 Julia on 07.18.12 at 10:42 pm

There is one factor that can’t be underestimated. Regardless of property values, a house is a forced savings vehicle, especially for people who had a good sized down payment and who pay their mortgage biweekly or do double up payments. The reality for many of these people is if they rented, they would not put aside the same amount of money into savings and investments. People sacrifice to pay their mortgages, but few people would sacifice vacations, toys, cars, and meals out to put money in an ETF… Let’s be real. I might… But most people wouldn’t. I did a little informal survey with some colleagues and none said they would be able to save a cent if they didn’t have to… i.e., into their mortgages. Just something to consider…

#42 realtors in an all out panic on 07.18.12 at 10:43 pm

Anyone can see prices in Toronto crashed 15% over the past two months. Blog dogs hit the media outlets talk to your friends and let them all know the crash is here. Last month my hair dresser was thinking of buying and today she tells me thank you for my knowledge as see can see the crash happening. It’s going to be a nasty crash realtors a nasty crash. Post in a panic.

#43 Toronto_CA on 07.18.12 at 10:44 pm

” That’s a decline of 13% from the spring, and a withering 10.8% in a single month.”
(today’s post)

and from July 6th:

“Big sales drops will result in price cuts large enough to shrink the national average by 15%. That could mean 25% in Edmonton, 30% in Winnipeg and Saskatoon, and 10% in 416.”

So…are we done in the 416? (asked tongue in cheek, we of course need to wait and see how this plays out)

It is amazing how they are blaming that 4 year old land transfer tax when the prices come down…but it never gets mentioned when they go up.

My reference in this post was to SFHs in 416, not all properties in the GTA (as before). You’re an accountant. Act like one. — Garth

#44 torontorocks on 07.18.12 at 10:46 pm

listen to me. this market has NOT been fuelled by low interest rates. It has been fuelled by the following factors:
1) Iranians, Chinese and other wealthy internationals are parking their cash in Toronto. Its a big city, there are lots of free benefits and its safe.
2) They are not building more land. The land is used, scarce, populated.
3) Prices will always go up b/c of the above two and the fact that NO ONE walks from their mortgage. Ever. Or will ever again.
4) The government CANNOT allow prices to fall. Ever. Or we’ll be more screwed than the US.

That is all.

And stop saying”This will be ugly” “This will not end well” or the other one “I pity the fool”

Later

I pity you. — Garth

#45 Toon Town Boomer on 07.18.12 at 10:48 pm

Not that stupid catchy little phrase again. More like, Your falling deeper in debt faster than you know.

#46 T.O. Bubble Boy on 07.18.12 at 10:56 pm

@ #38 So sad

Don’t forget that housing prices , average or otherwise, don’t take into account the quality of the property.

Excellent point (often overlooked) — you’ve got to question whether average prices are really going up because of land values etc. as the RE industry would want you to believe, or are people just putting in ridiculous amounts of home reno dollars (a.k.a. Flaherty Stimulus) into their homes and expecting to get these dollars back in the selling price?

With all of the HGTV and W Network house porn (ahem – Property Brothers, ahem – Love It Or List It) promoting the idea that home values go up MORE that the $ put into home renos, I truly believe that a large percentage of house price increases since 2008 are tied to home renos.

Take Toronto as the example — how could average prices NOT go up when the average Lawrence Park or Leaside house has doubled in square footage from the most recent reno/re-build?

#47 Devore on 07.18.12 at 10:56 pm

The economic fact Ross is dancing about is that prices are established at the margin. In plain English, it means the latest sale establishes the price of similar product. If supply is decreasing/demand increasing, this sets the floor for the value of the product. If the opposite trend is taking place, the latest sale establishes the most one can hope to obtain from the next sale.

It simply does not matter how many or how few properties change hands. The market does not care about the houses that do not sell or are not for sale. All the same, their valuation is set by comparable houses that do sell. The obvious difficulty with houses is that location, features and condition makes them somewhat unique. But, although they are not identical, they are similar enough that comparables are not hard to come by at all. Buyers will use a sliding scale/ladder approach, adding or subtracting value from other recent sales, for example, this house has a bonus room, that’s worth $10,000 over a similar recently sold house that did not have one.

No one, no matter what their budget, buys the ideal house. So buyers always have several acceptable options to choose from at their price point.

Sellers, however, nearly always believe their property is unique and special, and should command a higher price than comparables. Those houses are the ones that sit on market, their owners waiting for the “right” buyer to come along, hoping he will fall in love with the bricks, abandon reason, and pay their ludicrous asking price. And so they keep chasing the market down, always a step behind reality. This works in a high-demand market, because a mispriced house will unwittingly attract a bidding war or a desperate buyer who will buy anything, but in a slow market buyers will simply pass over it, rather than wrestle with a delusional seller.

#48 Smoking Man on 07.18.12 at 11:04 pm

So explain a 10% drop June to July. — Garth

Boating season, one hell of a hot one. Plus the daily gloom and doom by msm, as soon as F & C get their -15% bad press vanishes, instantly as, swine flew did, and even greece as of late, what happend to greece in msm.

Everything by order of the machine.

and like you have said a zillion times here one month stats mean nothing, so I guess when 1/2 a month stats favore your opinion , it’s solid.

You so don’t know the herd.

You are so a pumper. — Garth

#49 That genius F. on 07.18.12 at 11:10 pm

That genius F. did it again. Everyone thinks that he is trying to cool RE market, but the opposite is true. He always is timing his “measures” for the spring market, which is the strongest. This time he convinced many people that the government “cannot allow prices to fall”. As a proof please read post #40 torontorocks (he must be a neo-comunnist since for him all the good comes from the government – all he needs to do is buy a house or condo and load a tons of debt). Good luck to you, commie!

#50 zeeman on 07.18.12 at 11:12 pm

hi garth

i still think its too early to say that market is correcting. we need more of these types of stats from the next few months to come to any conclusion on the market.

also, what happened to your “demand area theory” where prices never go down in certain areas…..with the numbers you posted on sales and average prices i am sure that your theory did not hold up

Toronto (416) has 2,615,000 people in it (the GTA has six million). Demand areas like the Beaches, Lawrence Park, Moore Park or Chaplin Estates are micro-markets with a few thousand people living in each. My theory holds just fine. You need to get out of Estevan more. — Garth

#51 Joe The Realtor on 07.18.12 at 11:13 pm

realtors in an all out panic #42

you are an idiot who doesn’t understand that without RE Canada is doomed for a very bad recession. Yes prices are down in Toronto 10% last month but do you understand the effect on the economy? I used to call four movers to help stage houses but you know what ???last month I didn’t call them once and the furniture store didn’t get ant business either. My office assistant now has reduced hours and no way you will see me dine out three times a week. You idiots wish for a recession???? You are going to get a recession and a bad one.

Yes, let’s build an economy on stagers. Great idea. Just like California circa 2005. That worked out so well. — Garth

#52 TNT on 07.18.12 at 11:14 pm

I sold 3.5 months ago, my RE agent said that the house has since lost 135k+. Many awoken old timers will sell once they get a wiff of the downturn wanting to preserve cash for downsizing, renting or relocation, willing to cut their losses. As the Global engine continues to stall, job losses and fear will also continue to carve out the new trend. This house of cards Ponzi will eventually implode.

#53 Toronto_CA on 07.18.12 at 11:17 pm

“My reference in this post was to SFHs in 416, not all properties in the GTA (as before). You’re an accountant. Act like one. — Garth”

I said I was being tongue in cheek. Anyway:

416……………….July 14……Jun 30……. %

Detached…………728,834…. 803,671….. -9.3%
Semi-Detached….516,688….. 562,057…..-8.1%
Townhouse………417,824….. 448,993….. -6.9%
Condo Apartment..349,730…..364,597…. -4.1%

So…-9.3% if we call detached SFH? As I said, we need more time. One half month of stats does not mean much. I can’t wait for the fall stats.

I said my numbers were month-over-month, in other words, mid-July compared with mid-June. Try to be accurate or we’ll take the Bimmer back. — Garth

#54 I have a bunch of tulip bulbs (very rare) on 07.18.12 at 11:17 pm

…and will exchange them for a house. The house must be in a very good shape. Will consider Rotterdam, Amsterdam, or Toronto. No specific reason besides that people in these places are willing participants in this type of transactions.

#55 Jim on 07.18.12 at 11:22 pm

#34, MC

“It is my theory that the real wealth with those in the 1% is their ability to logically understand and manage risk.”

Your theory is probably bunk, depending on what meaning you give to the term ‘logical’. If you actually mean, using principles of logic (e.g., formal logic), then not likely. In fact, a ‘logical’ understanding of risk makes no sense, because risk analysis is NOT based in deduction. It is really based on probability, typically subjective probabilities. The idea that the top 1% are experts in risk management and probability theory is kind of laughable.

A much better theory is that the people with a lot of wealth have social and political power that allows them access to the best means of accumulating wealth – namely, taking it from others through the power of taxation, corruption and currency debasement.

It is VERY difficult to be a self made millionaire, since one has to actually produce products that others willingly buy in a free market. Far easier to become rich by redirecting taxpayer funds (e.g., bank bailouts, stimulus slush funds, non-tendered contracts, or by being given control over a nation’s currency).

#56 Steven Rowlandson on 07.18.12 at 11:23 pm

Houses reached the point of unaffordability in both Toronto and Vancouver this Spring, and now there’s only one direction in which to travel, pushed along by a government terrified of a bursting bubble.

Of course the government should be terrified of a bursting bubble. Those fools insured the mortgages in the service of vote buying. They really should have stayed away from the real estate market and told the banks to DYODD when it comes to mortgage lending.
When real estate prices crash and burn the government will be on the hook to cover losses and that could be alot of money.

#57 to numero 52 - TNT on 07.18.12 at 11:24 pm

It’s not fair! You should refund at least part of that difference to the buyer. How would you feel in a similar position? BE NICE!!!!

#58 GTA Girl on 07.18.12 at 11:29 pm

I’m betting Toronto Rocks is a newbie son of a developer. Hangs out at One in Yorkville, drives a M5 BMW, married with a wife maxing out the lines of credit for terrazzo from Italy for their reno’ed Forest Hill house..they moved from Dad’s neighborhood , near The National.

He keeps going by the condo sales office haranguing staff, demanding to know why the showroom is empty. Fires a few people, takes a few sniffs of powder off the Carrera marble vanity in his exec washroom. Jumps back in his car, races down to the Lakeshore condo project near Park Lawn to yell at trades.

All of 40 sonething years old..never put away any money. Put everything in the next project and lived like a despot from Libya. He is starting to get the shakes because his banking buddies aren’t returning his phone calls.

Oops…did I say too much??

#59 Dom on 07.18.12 at 11:30 pm

How many realtors are on this blog? Sorry smokingman you are a realtor and from your posts you seem very worried. The other realtors here sound delusional and unable to grasp economic reality.

Alot of realtors are out tonight in full force as the facts are coming to light that prices in Toronto are down 15 percent. Anyone with MLS can see the price drops/ increased listings and fewer sales. Even around the office no one wants to talk RE anymore and there are a few trying to sell their condo. Doesn’t look like anyone had any luck selling.

#60 to: #51 - Joe The Realtor on 07.18.12 at 11:31 pm

Hey, Joe! You should always dine man!!! Don’t skip on meals. It definitely affects your thinking. Negatively.
By the way, where from did you get these ideas on economy? I said, don’t skip your meals!!!

#61 TNT on 07.18.12 at 11:34 pm

So then we rented a house that HAM pulled off the market listed at 1.35 for 2300.00 a month, feels good .

#62 Sreven Rowlandson, my friend on 07.18.12 at 11:35 pm

Look, my dear. The government always pays from our pockets. I would not be worried about the government. I would worry about my pocket. Be sure, higher taxes are coming, in one form or another. Direct, indirect, inflation, fees, etc. We are screwed by this government.

#63 TaxHaven on 07.18.12 at 11:36 pm

The deception goes further than just real estate. It’s bigger than just houses. The news media perpetuate the myth, too, that the overall economy is “strong”. But IS it?

Walking down any street, in any town, it doesn’t look quite as good to me. I suspect that most small businesses are just hanging on by their fingernails, that sales at all businesses are slack and that debt is still rising.

Canadian rents, labour costs, benefit costs, taxes, fees, and regulations are so unrealistically high now that it is probably impossible to get anywhere operating a small business of any kind now…

Vacant office space is everywhere, as are unemployed and underemployed people and government “workers”.

And who’s actually PRODUCING anything? With so many, many people now flogging health and beauty aids, dog grooming, shiatsu massage, life insurance, RVs and quad bikes, expensive health foods and high-cost eco-tourist trips how can the Canadian economy possibly be “healthy”…?

Am I wrong? Am I missing something? It just LOOKS like a (dead) duck…

#64 Statistics | The Retiring Boomer™ on 07.18.12 at 11:37 pm

[…] As published in The Greater Fool […]

#65 Canadian Watchdog on 07.18.12 at 11:42 pm

Remember this chart Garth, cause if the average price dips below the threshold line and sustains into January, the media headlines will be raining all over the 2013 spring market.

http://postimage.org/image/84f6twfit/

#66 Stupid Canucks on 07.18.12 at 11:51 pm

What the realtor in question is talking about, but lackonf the abilty to explain, is the mathematical / statistical concept of mode (see http://en.m.wikipedia.org/wiki/Mode_(statistics)).
I do agree that mode numbers are trendsetters, but the appropriate statistical measurement tool when discussing real estate prices in general is median pricing, i.e. the proponderance of pricing to gravitate toward a certain median marker in the market place.

I never understood the logic of using unweighted average numbers to depict real estate pricing trends in Canada, an oddity of a housing and banking industry cartel poised for a rude awakening from its afternoon regal English tea slumber in the years ahead.

#67 MC on 07.18.12 at 11:53 pm

@ #55 Jim

DELETED

#68 Stupid Canucks on 07.18.12 at 11:57 pm

Gotta hate iPhone spellcheck…RIMM is a busted company, but I do like their keyboard. Apple’s devices are clearly deficient in this regard.

#69 45north on 07.18.12 at 11:59 pm

TorontoRocks: listen to me

I read what you wrote. The real estate market is in trouble.

Speaking of trouble: TORONTO – The man at the centre of the Ornge scandal says he doesn’t know what went wrong with the troubled air ambulance service, but the government never told him he was veering off course.

Read more: http://www.ottawacitizen.com/health/Chris+Mazza+says+government+never+told+Ornge+course/6950249/story.html#ixzz212MmAjSi

you know there are so many ways Mazza could have played it better, he looked like such a spoiled baby today

some more stuff:
Ornge signed a 25-year lease in January, 2011, agreeing to pay $19.45 a square foot for the 75,000 square foot building, land title documents show. The going rate for office space in Mississauga ranges from about $12 to $15 a square foot.

The lease inflated the value of the building – an Ornge entity had acquired it two years earlier for $15.6-million – and provided the collateral for a $24-million mortgage loan, the documents show.

http://m.theglobeandmail.com/news/politics/convoluted-transactions-inflated-value-of-ornges-head-office/article535027/?service=mobile

#70 Spiltbongwater on 07.19.12 at 12:05 am

If a listing goes stale, ie is 6 months old, and the realtor convinces the seller to cancel the listing, reduce the price and relist, house sells in 50 days on the new listing, is the reported DOM 50 days, or does the old expired listing get added to it? The real estate “professionals” are lieing, misleading everybody while they try to cash the commission cheques. Real estate agents are as useless as the guy who answers the phone when activation a credit card trying to sell the cardholder into accepting the credit cards insurance.

#71 Sid on 07.19.12 at 12:06 am

Eerily similar….shortly before the bubble burst, US real estate cartel continued to deny its existence

http://bubblemeter.blogspot.ca/2006/08/discredited-national-association-of.html

#72 gloom and doom on 07.19.12 at 12:10 am

I donno what all you people are talking about i just checked realtor .ca around the gta doesn,t look like any prices have gone down still way overpriced and i don,t see any saying reduced either ?

#73 canadians richer than americans on 07.19.12 at 12:16 am

for the first time, canadians are apparently richer than americans…and guess what?

it’s because of housing:

“According to the report, real estate held by Canadians is worth more than $140,000 more on average and they have almost four times as much equity in their real estate investments.”

http://www.usnews.com/news/articles/2012/07/18/for-the-first-time-canadians-now-richer-than-americans

#74 hehe hey Joe on 07.19.12 at 12:21 am

nice post there #51 Joe The Realtor

you just underlined all the reasons why housing should crash. ooohhh…movers don’t get your call, stagers don’t get your call, you don’t get to dine out?

talk about first world problems.

a pox on you and your ilk sire.

#75 thx GTA Girl on 07.19.12 at 12:22 am

great post. Bang on.

really appreciate your perspective.

are you sure you don’t know Big Rider?
kidding :)

#76 smartalox on 07.19.12 at 12:27 am

@ Stupid Canucks (#68)

Six months ago, all the executives at my company were hot to trot to get iphones as their corporate communications devices.

Now, after more than a few, MAJOR spell-check induced embarrassments, they all want to switch back to Blackberry.

They’re keeping their ipads though.

#77 ANONYMOUS on 07.19.12 at 12:34 am

Funny, if its true that house prices are already starting to fall, then what will happen when the job market comes roaring back (in 25 years time) and interest rates start to rise?

I say 25 years because most of the 55 year old boomers are so far up to their eyeballs in debt that they all say that they will keep working for another 50 years, but the truth is that when they hit 70 to 75 they will simply drop dead like flies, they will do the ‘STEVE JOBS’ thing, and work till they drop dead at work.

#78 Jon B on 07.19.12 at 12:35 am

Quite the collection of dumb comments today. Normally the quality is pretty good. The one suggesting the federal government will “not allow” RE prices to fall takes the cake. Nice work torontorocks.

#79 Observer on 07.19.12 at 12:37 am

Mark, it’s time to raise interest rates and cleanse the economy. The debt driven ponzi scheme has no more room to run.
Any delay in what has just been spoken will make the future even worse.

#80 Tim on 07.19.12 at 12:43 am

Pubs in BC are Bringing in Exotic Dancers to Boost Sales:

http://ca.news.yahoo.com/blogs/dailybrew/pubs-clubs-b-c-call-exotic-dancers-boost-153012256.html

If one can no longer make easy money with a six week education selling real estate, then there are other options…

#81 house burden on 07.19.12 at 12:46 am

#13 vincent on 07.18.12 at 10:09 pm

Does anyone know how the “MLS Home Price Index” is calculated?
====================

Frogs legs, lizzard gizzard and toes nails.

Poof , sounds good its magic!!!!

#82 Nostradamus Le Mad Vlad on 07.19.12 at 12:47 am


“Talk about coincidence! We are so screwed. So, let’s buy that condo, babe! People can’t handle the truth. They believe they’re richer than they think.”

Leading to #146 DM in C on 07.18.12 at 6:07 pm — “For the first time, Canadians richer than Americans”
— and —
#154 Victor on 07.18.12 at 7:55 pm — “OTTAWA — Canadian households will see their debt burden worsen further in coming months . . .”
— with —
#45 Toon Town Boomer — “Your falling deeper in debt faster than you know.”

The first one — Cdns. richer than Americans” — gives a false, smug sense of security / vanity, the ‘It’s different here’ feeling of superiority, thus leading to the second and third ones, increasing debt loads and dumping the bills on their latch-key kids while parents live it up. One option to be considered: Can children divorce their parents?

#62 Sreven Rowlandson, my friend — “We are screwed by this government.” — Well said. The CPC couldn’t care less about sheeples / citizens, as long as we pay taxes and keep our mouths shut. But hey, we elected them, didn’t we?
*
Recovery? Not here, it seems; 0:18 clip Now you see ’em, now you don’t (demolished); Bank split QE3 or bust, but IMF encourages ECB to turn on the presses; Flood Claims Weather is an expensive business; Oligarchs and BP; Think Again 2020 is a yardstick; Sicily Isn’t that where the Mafia’s headquarters are? Employment What happens when the ‘lympdicks are over? AT&T Wonder if this will spill over here? Sony Walkman Comeback kid? Zombie and Monopoly Money One and the same; GS More stimuli after election; Big Banks don’t commit fraud . . . do they? Hire More Teens Take trouble off the streets; Puddle of Money Running dry? Commodity Corrections are coming; Real Source of economic problems; China’s Century? It will be about two and a half centuries.Constant Change (evolution) New factories open, old ones close.

US and UK austerity = Fascism; China rebalancing Looks interesting; Bernanke doesn’t like Ron Paul, and Bernanke’s punch bowl; Home Building At least one part of the economy is working well; GermanySmart cookies; The Workforce Die young, live much longer; Berlin, Germany owes trillions; Good Investments Sports franchises; Investors Armageddon; Ten Tallest Skyscrapers; Oil Price Spike Something worse.
*
US – Israel Using Syria to wage covert war on Iran; Cavemen and Amazons Men used to do the vacuuming, cleaning etc. — here’s proof; Lasagna Burgers Now you’re talking; Agenda 21 Presently Chinese and African ghost towns?

#83 XKR on 07.19.12 at 12:50 am

#51. Joe, bring it on, bring it on! Great wealth is to be made in recessions.

#84 Popeye the Sailor Man on 07.19.12 at 1:01 am

Spruce Grove has more red dots on MLS then when we were shopping for a house and even more over the last couple of months.

We bought our house for $100,000 less than the owners paid in 2006 before us. yet I now see some homes that are better than mine for the same price or a bit less than I paid for mine in Dec 2009. Things are going soft here.

I did buy with eyes open to the fact prices will soften and we have 75% paid off and making double payments. We will still take a hit but won’t lose the house.

#85 Across the Pond on 07.19.12 at 1:03 am

#44 torontorocks
[i]”listen to me. this market has NOT been fuelled by low interest rates. It has been fuelled by the following factors:
1) Iranians, Chinese and other wealthy internationals are parking their cash in Toronto. Its a big city, there are lots of free benefits and its safe.
2) They are not building more land. The land is used, scarce, populated.
3) Prices will always go up b/c of the above two and the fact that NO ONE walks from their mortgage. Ever. Or will ever again.
4) The government CANNOT allow prices to fall. Ever. Or we’ll be more screwed than the US.”[/i]

1.) There seems to be a heck of a lot more empirical evidence for low rates.
2.) Suburban sprawl and inner city housing density. Saves having to build the land.
3.) That’s completely true (as long as no one ever needs to cash out their property to fund their retirement or relocate for a job).
4.) The government can only lead a horse to water. It takes a true mathematical invalid to continue chugging that Cool-Aid.

#86 PoorgEoisie on 07.19.12 at 1:05 am

Fun example for a house in Hypothetica where there are no realtor fees and the super nice bank never charges interest:
Price 300k
5%cash back for the down
Borrower owes 315k (already underwater from day 1)
In Hypothetica there are no Chinese millionaires (everyone is from Finland) and the housing market loses 10% a month after our borrower “Jarrko Luusaanen” signed for it. Jarrko now owes 315k for a house he can only sell for 270k, a 45k difference which is a lot to a guy who couldn’t slap down the 5% on his own. So Jarrko remains positive but he loses another 2 percent next month and after a few more months of losing Jarrko is staring at a mountain of debt he never expected to have.

Not much of a savings vehicle for our buddy, now he lives in an actual vehicle, it’s 96 skoda with no a/c.

#87 Vancouver_Bear on 07.19.12 at 1:08 am

Honest realtor is a myth and CREA is a great confirmation of that.
Just take a look at these listings – V955138, V960877, V943543, V961601.
All in the same building, three units on the 6th floor were built in 2005…while the unit on 9th floor was built in 1983. The bulding is 29 years old…but somehow 6th floor units are only 7 years old.
Realturds are the most disgusting bloodsuckers of human kind!
These listings are a very good example, that you will get creamed… So go buy that “7 year” old unit in almost 3 decades old and exhausted leaking building.

#88 Rob on 07.19.12 at 1:12 am

Great explanation, Ross. As a fellow Realtor I appreciate your candid comments.

#89 Vancouver_Bear on 07.19.12 at 1:12 am

#51 Joe The Realtor on 07.18.12 at 11:13 pm

Go find a real day job, you are fired!!!!

#90 Bobby on 07.19.12 at 1:16 am

I cannot but chuckle when I read much of the fluff put out by CREA. You can make statistics read whatever you wish.
Here in Victoria, I just received an updated listing of condos that I’m looking at. Most are for price reductions and some of these units have been on the market for 180 days plus. Also just saw a revised listing for a home I looked at a few years ago. Someone bought it at the price I refused. House is now listed again and has been extensively renovated, yet the asking price has dropped $90k less than what was originally paid.
No……I don’t think prices are going up. I’ve got to slap my realtor on the back. She’s choking!

#91 TimV on 07.19.12 at 1:30 am

Yesterday I posted made-up data (okay, it was slightly better than that) for prices normalized to (approx estimated) tax assessment, in the East York region of 416. It seems appropriate today to add data for the fraction of solds that exceed list. So here it is. Fewer problems with the data, since it’s easier to test sold vs list price (whereas taxes are a nuisance).

YYYYMMM: ___ Apri May_ June July
Blake-Jones______ all 0.67 0.86 1.00 na
Broadview North__ all 0.80 1.00 0.50 1.00
Crescent Town____ all 0.75 0.33 na 0.00
Danforth Village_ all 0.67 0.58 0.62 0.67
East End-Danforth all 0.75 0.67 0.67 0.43
East York________ all 0.75 0.67 0.88 0.20
Greenwood-Coxwell all 0.82 0.62 0.50 0.50
North Riverdale__ all 0.50 0.62 0.80 0.50
O’Connor Parkview all 0.56 0.78 0.29 1.00
Playter-Estates__ all 0.80 0.33 0.80 na
South Riverdale__ all 0.73 0.71 0.71 0.80
The Beaches______ all 0.52 0.48 0.50 0.75
Woodbine Corridor all 0.83 0.40 0.25 0.67
Woodbine-Lumsden_ all 0.60 0.88 0.83 1.00

all Att/Row/Townhouse 0.50 0.33 1.00 na
all Detached________ 0.68 0.56 0.57 0.50
all Semi-Detached___ 0.71 0.71 0.75 0.75
all all_____________ 0.68 0.63 0.64 0.58

There must be some way to make tables more legible.

If sold-price equals list-price, then I pretend it was sold for less than list-price.

Anyhow, the data do show what any honest realtor will tell you — namely that multiple offers and bidding wars have decreased in frequency. It’s not as dramatic as I expected, though: Fraction detached sold for above list dropped only from ~56% to 50%. And the semi-detached market continues to stay at 75%.

Note that semis are not evenly distributed throughout the region. So some neighbourhoods have far more semis than others – but even accounting for this it still looks like the semi market is “stronger”.

As a reminder, Playter Estates, South Riverdale, Broadview North (most, but not all of it) are the expensive neighbourhoods. Blake-Jones and Crescent Town are the less expensive neighbourhoods.

It can be argued that the data are consistent with an hypothesis that the very least expensive areas (looking at Crescent Town, East-end Danforth, and old East York (which includes a couple very small but expensive regions)) have seen a bigger drop in multiple-offers than average. This is sort-of a corollary to the “Leaside hypothesis”.

Overall, however, this data strikes me as surprisingly strong. The lack of any decrease in multiple-offers for semi-detacheds is quite surprising.

I wasn’t surprised that yesterday’s pricing data showed no obvious drop in prices, since pricing typically lags sales (I think Garth likes to quote a 9 month lag). However, this data does surprise me. In particular, I always suspected the semi market had a bit more “strength” than the detached, but the magnitude (75% above-ask versus 50% above-ask) surprised me.

Incidentally, this data would be completely different if I looked at high-rise condos. None of those ever sell above list. But everyone here already knows that.

I don’t believe that these data are consistent with an 11% price reduction for this particular region (yet?).

#92 Blacksheep on 07.19.12 at 1:40 am

Smok’in man,

Dude, what happened to the booze, hookers and Floyd? Where’s our resident happy go lucky, rambl’in, gambl’in man? What…Not having fun anymore? For someone with claimed excessive wealth, you sure seem concerned about the state of RE.

You should, care less.

Upside down batman can’t, doesn’t want to, or outright denies (bad for busi.) seeing, the forest for the trees, that have now become fully visible to the rest of the Dogs.

take care,
Blacksheep

#93 LB on 07.19.12 at 1:47 am

#55 Jim

Well stated. The truth in a nutshell with regard to the powerful and wealthy helping themselves to taxpayer funds to become even more powerful and wealthy via owning politicians who change legislation to serve THEIR interests, not the electorate who voted for them.

What does that say about our third party representation system and how corrupt and misrepresentative it really is?

Time for democracy to evolve again, taken back by citizens, through the use and power of individual technology, effectively circumventing the established systems.

This blog is but one example.
of this.

The (r)evolution has already begun.

#94 Ryan on 07.19.12 at 1:55 am

All the talk here is about Vancouver, Toronto, Calgary, Montreal, etc. What about real estate in the forgotten parts of Canada (Windsor, Chatham, Sarnia, London, Thunder Bay, Sault St. Marie, Moncton, Cape Breton, etc.)? Will the housing crash affect these places too or will the housing crash lead to a significant relative wealth increase for people living in rural areas and small cities?

#95 patiently Waiting on 07.19.12 at 2:13 am

#70 Spiltbongwater
If a listing goes stale, ie is 6 months old, and the realtor convinces the seller to cancel the listing, reduce the price and relist, house sells in 50 days on the new listing, is the reported DOM 50 days, or does the old expired listing get added to it?
—————————————————————-
You should know by now that the real estate cartel would only report the sale as being on the market for the shorter 50 days, even though the property was really on the market much longer. That is the whole reason why agents regularly cancel listings and put the properties right back on the market as a new listing.

#96 TNT on 07.19.12 at 2:37 am

The photo reminds me of a costume party i went to in the 80’s. A biker (it turns out) approached me draped in what appeared to be a real wolf, it turned out it was his deceased husky that he had skinned. Anyway he was intrested in the 40lbr of wine i had and proceeded to grab it smash me over the head and flee….i wonder if he was in RE…

#97 cynically on 07.19.12 at 2:42 am

A better supplied market contributed to a slower annual rate of price growth is REspeak for too many properties for sale kept prices down. Their gibberish is what makes it difficult for the average clone to follow the market.

#98 TRT on 07.19.12 at 2:50 am

I think people should be scared of Google Glasses more than the impending Real estate meltdown.

Google Glasses will be glasses you wear and will record what you see on a cloud based server. The glasses will serve as a wallet, a camera, and a navigation device. Your spouse will have access to what you see as will others. For your kids to get a job, they better have a Google Glasses history the employer can look into. They will help you retrieve information by sight. CREA will also know when you have looked at a sight authored by Garth. What to do?

You are so screwed in the future Garth.

#99 cynically on 07.19.12 at 3:15 am

#44 torontorocks must be a chamber of commerce guy or with the tourist bureau if he really believes what he wrote. Otherwise as the REs in REspeak would say, he has a vacuous sensory cerebrum.

#100 An Observer on 07.19.12 at 3:36 am

All of the released stats on days on market, sold above/below list, % of list etc etc are all lies and complete manipulation since listings are constantly being pulled and relisted a day or two later with a new price and a new MLS Number…

For Example, house A lists for $1.5 million and sits for 6 months then expires or gets pulled and it then relists for $1.1 million and sells for $1.2 million in 7 days.

This is market as a 7 day DOM and 9% above asking instead of the reality which is > 6 months and 20% below asking.

Manipulation and deception all over the place

#101 live within your means on 07.19.12 at 4:05 am

BIL & a friend had to redo a horribly contractor installed bay window. Too many problems to go into. He complained about the costs. Then yesterday he sent us pics of how he was redoing it – beige marble on the ledge and other expensive faux brick around it. Spent many $Ks on it. He lost big time on Nortel & will never invest again. He can’t afford to visit his elderly parents in the old country because his parents now put money in an act. that he can’t touch from Cda. His wife is a spendthrift. We spent last Xmas w/them – unbelievable extravagance.

#102 Buy? Curious? on 07.19.12 at 4:45 am

Garth, you know, I feel sorry for the real estate agents of today. Not the older, grey haired dinosaurs, that were demographically blessed with being at the right place, at the right time, but the younger ones who saw these old buggers driving fancy cars and talking like Gordon Gecko who wanted to be like them. Their business model is so squeezed with fees, up-front costs, open information, and an overall dislike for the profession that there’s no way they’re going to make the kind of money their predecessors made. The old ones who talk about real estate like High Priests of cult may get out of this impeding tsunami of despair able to retire at the family cottage but the ones just starting out, they’re doomed, DOOMED! I just hope their driving licenses are revoked and the cost of mobility scooters go up.

http://www.youtube.com/watch?v=A_JPcBwYGmo

#103 Deb on 07.19.12 at 6:10 am

#25 Paully

I was thinking about that one myself.

“There are three kinds of lies: Lies, damned lies, and statistics.”

This quote, attributed by Mark Twain to Benjamin Disraeli, reflects a commonly held belief that statistics should not be trusted. Keep in mind that statistical techniques are tools and like any tool statistics can be misused, resulting in incorrect conclusions.

#104 John on 07.19.12 at 6:17 am

Does anyone remember that old quote..was it from Mark Twain? “There are three kinds of lies: Lies, damn lies, and statistics”.

Yeah, statistics lie. But it’s not only the massaging of the numbers, it’s the assumption that the number is a driver and “you need to follow this to see the trend in something important to your interests”.

That’s the bigger lie, and the housing sub-cartel follows that lie to the letter…for reasons in plain view..and exposed here on this blog repeatedly.

Follow the delusions of this poster regarding the now wholly defunct REIT’s debate ( etc….it wasn’t relevant and refers to the “bigger lie” as per assumption manipulation in reporting numbers).

Here it is. See if you can spot the mistake:

Boomer 21 wrote:

“get it! RE downturn or slow melt or crash in the RE market, whatever you want to call it does not, will not, adversely effect REITS. Higher interest rates in the future may effect the value but you still get the income. Read, learn, understand and then comment. Sorry for the rant Garth but I don’t know how many times you can go over the same concepts without just going ape sh*t. ”
———

You see Boomer21 got suckered by stats. He thinks commercial real estate will source him revenue as the fake global funny money real estate baloon pops. Those “houses” with digits and zeros attached to them? It’s same no-fibre fraudulant Goldman Sachs et al glucose system that funds commercial real estate. The greater fools and false “net worth” folks BUY. They consume. This is the “economy”. In part, that’s how commercial real estate stays afloat. Debt-soaking allows that. HELOCS also float commercial real estate for example.

That’s folks believing the funny money “net worth” zeros are real, and spending it. Imagine. Borrowing “money” from “equity” on your house. That’s also part of a REIT dynamic. All fake money is plugged into it.

As long as a guy sticks to “keep it simple”, statistics are not a problem.

The article today shows that. Real estate guys plugged into the Goldman Crew Show want their piece. So they use the assumption that real estate is “important” and then warp perception with massaged numbers.

The failure to look at assumptions and principles is the problem. Look at Boomer21. His fail comes only from that.

The best antidote is just to think for yourself. Not a big value in Canadian culture.

Why does hr

#105 Smoking Man on 07.19.12 at 6:23 am

#92 Blacksheep.

Just trying to pull LaughingCDN chain.

#106 Johnny D on 07.19.12 at 6:26 am

@#51 Joe The Realtor

See Joe, this is why the economy sucks…. because people like you. Garth said it best that you can’t base an economy on stagers. And just look to the U.S. to see you can’t base an economy on real estate. We actually have to get back to making stuff here in Canada, not enlisting the useless “services” from guys like you. Your job is obsolete anyway, as more and more people realize that buying and selling privately is the way to go. Having that REALTOR(tm) “stamp of approval” means nothing on a house at all. Buyers still need to pay for their own inspections prior to purchase and as a seller I’ll easily split the cost of a lawyer with a buyer any day to handle the legal stuff (about $1000 or so, as opposed to about 10% commission to a scum realtor). Everytime I hear a realtor talk, it becomes more apparent that they know nothing of the economy and you’re just further proof of that. Now quit your day job and go work at an Arby’s or something. You’re not even cut for Burger King you hack.

#107 Intuitive Missus on 07.19.12 at 7:02 am

#100 – An Observer

You are absolutely right. I have been keenly following two GTA markets for over a year now and have observed the same thing. Also, on tosolds.ca they often show the original listed price, then the reduced price and then the sold price. The % of sell vs list is always measured against the reduced list price and not against the original list price.

These observations have reinforced what I have always thought. I find it better to weigh the information against gut feeling, my own BS meter. So far it’s served me well.

#108 Smoking Man on 07.19.12 at 7:18 am

Garth. Now I’m a real estate pumper. Seriously?

I have stated her many times the real estate prices in the toronto are insane. Bidding wars are insane and I have said I would love a crash as that would benifit and help me rid the offspring.

But 15 days worth of stats do not convince me. I don’t jump on any band wagon that rolls threw town.

I do know the machine and I do know the herd.

With out big job losses or huge spikes in rates the herd will bunker down. But will not capitulate. The could have in 2008 they could have listed in mas. They just went to side lines.

So because I see it a bit different than the average bear I’m a pumper now. I can’t even get a f-en boat slip in toronto big waiting list

That should tell you something about toronto

I miss you drunk. — Garth

#109 tony w on 07.19.12 at 8:22 am

If you compare 416 resale SFH and condo prices for the 1st 15 days of July ’12 vs July ’11, the average price increase for both categories is 0%! (TREB figures).

I believe this is a more accurate comparison to use than one month to the next.

New listings are also UP 14.4% over the same time frame which will lead to different market conditions than for the past several years.

It’s all about momentum. — Garth

#110 torontorocks on 07.19.12 at 8:23 am

You know, ladies, I was being sarcastic. That’s the speak I hear which drives the momentum. I had just walked away from a discussion with a relative of mine who was smugly shaking her head that prices can’t go down (and I rattled off those reasons above as reasons “is this why?”). I mentioned that her and her crew have only seen price escalation – for instance, they turn on the TV and see Disney shows and think its ALWAYS been Disney shows. And Brad Lamb and his elitist “those who say its unaffordable can’t afford it” but then “I don’t know why things have slowed down with the foreign money” not realized in that squished cranium of his (aka too small for his body) that the transfer of bubbles is what is being held up – slowdown in china bubble equals less transfer of bubble money to create another bubble city.

but ya, I can see the logic when all you’ve ever seen are price increases (on paper).

we’ll see what happens, I guess. and how it ends is probably pretty obvious. reversion to the mean, either by Mistah Garth’s slow melt logic or a pop off down.

I’m also not a commie hahahaha that was good.

#111 Alberta Ed on 07.19.12 at 8:29 am

“Month after month, the real estate industry churns out numbers designed to obfuscate and mislead.”

Given the degree of financial illiteracy in the MSM, it’s not surprising that the general public is unaware of the RE bund’s complicity in obscuring what is really happening.

#112 TurnerNation on 07.19.12 at 8:36 am

Realtors in a panic! They’re spending hours on this blog, badgering our forum host via email. So must for the “hot summer market”. Having only overpriced krap to sell is taking it toll on them.

1/2 million for a concrete Toronto condo tomb (plus two land transfer taxes, natch). Within a few years, will likely fall apart like the Gardiner Expressway’s concrete.

http://www.realtor.ca/propertyDetails.aspx?propertyId=12222249&PidKey=-1764232859

#113 musicman on 07.19.12 at 8:37 am

I wrote to the Toronto Star yesterday about their misleading articles and headlines. Here is my e-mail to their reporter Ms. Pigg:

To: ‘[email protected]
Subject: Your July 16 article on house prices and the July 6 article

Ms. Pigg, this is the second time this month (also July 6) in which articles published in the Star
have been misleading, especially the headlines.

You indicate that sales are down but prices keep going up. This seems surprising, but are they?
The July 6 article indicates that the average GTA home sold for $508,622 in June. When I read
carefully the June 2012 Market Report published by the Toronto Real Estate Board, which
presumably was the source of the Star’s article, I learned that the average GTA home sold for
$516,350 in May, 2012 and $516,608 in April, 2012. So aren’t house prices going down? Looks
like it to me.

In my view, the Star’s headlines are misleading, as well as the articles themselves. I don’t think
your job as a reporter is simply to regurgitate the information from the Toronto Real Estate
Board. Shouldn’t you be taking the time to me to critically examine the information. After all,
the Toronto Real Estate Board would have no reason to continue to present a rosy view of the
real estate market, would they?

I would appreciate a response.

The only response I got was ” I don’t write the headlines”

#114 Form Man on 07.19.12 at 8:46 am

headwinds

http://brighterlife.ca/2012/06/20/is-the-canadian-economy-in-trouble/?wt.mc_id=en-ca%3ASEM%3ALinkgen%3AOutBrain%3ABLGeneral%3ACanadian_Economy_Trouble

#115 Just(not)AnotherSheeple on 07.19.12 at 8:52 am

RE: #29 Smoking Man
Garth you know darn well that july prices are always lower than March april prices, year after year.

If say Mar 2013 is lower than Mar 2012 I would say the fat Lady is on the stage. Till I see a month year to previous month year which is lower. Its premature crashulation.
=====================================

Here you go (no need to wait until 2013)
Condos in 416 (Toronto proper) area:

July 1-14,2011 – 668 units @ Av.price $351,040
July 1-14,2012 – 591 units @ Av.price $349,730

Volume YoY down 11.5% and the price Y0Y is down too – not much so TREB can claim no change and you can claim the very hot boating season.

Anyway – one can look at this post that summarizes in a table view the volume and the Av.Prices – http://forums.redflagdeals.com/vancouver-bubble-road-50-housing-crash-w-monthly-stats-1194032/50/#post15058206

As you can see usually the mid month figures are higher than the whole month so thou shall see how this will turn out in 2 weeks and one day.
Numbers to watch out and compare to – 1452 units @$353,189 for July 2011

#116 “Where I work close to Richmond I was stunned at the amount of commercial real estate available.” | Vancouver Real Estate Anecdote Archive on 07.19.12 at 9:00 am

[…] get involved in a major purchase after seeing the sheer volume of “For Lease” signs…” – Prepmonkey at greaterfool.ca 18 Jul 2012 10:35pm Share: This entry was posted in 15. Misallocation of Resources and tagged Anecdotes, British […]

#117 Dupcheck on 07.19.12 at 9:05 am

CREA is a joke. CHMC is a joke. Unions are a joke. GOV’s are becoming jokes.

It looks like we do not only have a RE bubble, we have a Gov supported bureaucratic bubble that slows our productivity and moral down.

We need to puncture these Zits ASAP and run lean.

#118 Canuck Abroad on 07.19.12 at 9:07 am

O. M. G. Why do all these old people have mortgages?

http://www.marketwatch.com/story/retirees-hit-hard-by-foreclosures-2012-07-19

http://www.nytimes.com/2012/07/19/us/foreclosure-rates-surge-for-older-americans-aarp-says.html

#119 refinow on 07.19.12 at 9:17 am

Ross Kay, the Realtor-Gone-Wild, is revealing the truth..

Like a senior citizen going to Mardi Gras for the first time, earning her first set of beads….

You know its going to be ugly once revealed.

#120 therooster on 07.19.12 at 9:20 am

Never use a realtor to valuate a property, especially if you’re selling. The conflict is cultural to the service. As the top home marketing consultant in Canada (a paid for fee based , arm’s length service), going back some 20 years, I would always advise my clients to rely on an independent (fee based) appraisal when pricing a home they were marketing. It not only gave home owners unbiased guidance, it was a very powerful closing tool once an offer was secured.

#121 2centsCdn on 07.19.12 at 9:22 am

#113 musicman
I wrote to the Toronto Star yesterday about their misleading articles and headlines. Here is my e-mail to their reporter Ms. Pigg: …..

They don’t care. Please don’t believe everything you read or hear in the press (real estate or otherwise). It’s not in the Toronto Stars (or the media monsters) best interest to help educate it’s readers about whats really going on in the real estate world. Look through the paper and ads …… how many square inches of type or TV hours are dedicated to home related ads or articles? Newspapers need something to put between the advertisements. I read a few other readers on here asking if they should sue for wrong information. If you read a lot of the info and stats given by the TREB …. they aren’t actually lies …. they’re just extremely carefully worded and calculated bits of information. I think out and out lying is illegal and sue-able (if you have a lot of time and money) …. the word “misleading” however is wide open for interpretation.

#122 Toronto_CA on 07.19.12 at 9:26 am

#115 Just(not)AnotherSheeple on 07.19.12 at 8:52 am

Totally on board with the stats and I believe condo prices have already started plummeting (seriously who is spending $542k on a Bathhurst/Adelaide 1bd/1bth condo?) but condo sizes are getting smaller and smaller. Maybe not the ones already on the market, but definitely the pre-builds where you can find “junior one bedrooms” that are 400 square feet and a 750 square foot 2 bedroom (what fresh hell is that?).

Wish we could see average condo price per square foot or something along with these stats. Regardless, anyone buying a peak priced condo right now is a huge Greater Fool.

#123 The American on 07.19.12 at 9:59 am

This is clever. Some U.S. cities are now considering using power of eminent domain to buy up underwater houses and restructure those mortgages to keep the home owners in them. Banks are pissed, needless to say. LOL

http://realestate.yahoo.com/news/could-seizing-a-home-save-a-homeowner-.html

#124 truth hammer on 07.19.12 at 10:09 am

The realtards assumption that ‘trough pricing’ is so easily discernible is just crap…on a stick. prices in the US are still falling despite the industry, banks and government desperate atempts to put a bottom in.

The government and the eal tad industry can not draw a line in the sand and say ‘prices will fall no further’……that just isn’t reality……………unless they bring in a 50-100 year amortization and give away the money for a downpayment with every newly minted passport.

‘They’ are worried about deflation….so they say…..but fail to admit that the massive ramp up in inflation is entirely unrealistic. Real Estate prices have only been ramped up to satisfy local budgets…..nothing to do with demand……..the current prices are a fallacy of the argument that prices can not come down in double digits and keep falling as true demand is stripped from the market place by unrealistic pricing. This is exactly what has happened in the US, UK, IR and Spain to list a few……this is not ‘deflation’ by any stretch of the imagination. Phony pricing and phony rates will lead to real adjustments in demand…….we will find out if we are richer than we think……if we are richer than the Americans…….because if that BS gets you to wave a flag….you’re in for a surprise.

#125 TorontoGal on 07.19.12 at 10:12 am

I’m thinking I’ll just ‘invest’ in furthering my education a little further…maybe get a JD. :)

#126 From Mississauga With Love on 07.19.12 at 10:24 am

So explain a 10% drop June to July. — Garth

the drop in average price from June to July is 5% not 10%.
Nevertheless it is significant. The fat lady would be on the stage if we start crossing over and the price for a month starts dropping below the previous year’s price in the same month. And then the pattern has to continue. The last nail in the coffin would be if the 2013 Spring could not save the GTA market.
then we can conclude the crash has started.

The one-month (mid-month) SFH price drop in 416 is 10%. Need a calculator? — Garth

#127 kim on 07.19.12 at 11:00 am

musicman #113

Good job in writing to thestar. I think we blog dogs need to write and force these paid shill outlets to report the facts and not the paid for propaganda from CREA or CHMC or whoever. Together with garth we can spread the truth.

#128 teacher on 07.19.12 at 11:00 am

Smoking man. Smart people use spell check before posting on a public blog. Smart people who have money do not admit they do on public blogs, people that do don’t have any money

#129 CP on 07.19.12 at 11:00 am

Garth,
You constantly quote the misleading nature of the CREA Index. I would be interested to learn how they compute the index? Can you provide an example (real or hypothetical) of how their results would differ from say, average pricing or median pricing, using similar sales data?
Thanks

#130 Rahim on 07.19.12 at 11:11 am

Here is what the condominium price statistics for June look like over the past 7 years for my inner-city Calgary hood (Connaught):

Jun 2006 AvgSale$: 281,818 Median$: 272,500
Jun 2007 AvgSale$: 353,123 Median$: 330,000
June 2008 AvgSale$: 334,821 Median$: 313,000
June 2009 AvgSale$: 283,980 Median$: 285,000 June 2010 AvgSale$: 291,420 Median$: 290,000
June 2011 AvgSale$: 292,097 Median$: 253,500
June 2012 AvgSale$: 310,416 Median$: 293,000

As you can see, there was a short-lived but dramatic correction in late 2008 / early 2009. That’s when I got into the market. Since then, Calgary condominium prices haven’t returned to their 2007 highs, but they are not that far off either…

If this is what the correction pattern will look like for Toronto or Vancouver, then I say, “meh”. Big deal.

#131 Interesting Times on 07.19.12 at 11:16 am

Now that the US housing market appears to have hit bottom and may be starting to turn up again, will this have any effect on the psychology of the Canadian market?

#132 Roial1 on 07.19.12 at 12:01 pm

#56Steven Rowlandson on 07.18.12 at 11:23 pm

When real estate prices crash and burn the government will be on the hook to cover losses and that could be alot of money.

No. The Government will not “be on the hook”

YOU WILL! Tax payer!

And Flatulence himself will be running about repeting “Not my fault, Not my fault”.

#133 M on 07.19.12 at 12:07 pm

In March that average home was trading hands for $842,235. By June it had wavered a little, down to $817,678. And by last week it had plunged to $728,834. That’s a decline of 13% from the spring, and a withering 10.8% in a single month.

*Over the same time period, condo prices (416) increased. From what I understand, this is b/c pre-con units (at a higher price per sq ft) continue to skew this number. Never understood why someone would pay more per sq ft on a riskier, unbuilt unit (to live or invest) when there could be one right accross the street in a 5 year old building selling at a 10-15% discount.

I still think re-sale condos in Toronto are reasonable though. $500 sq ft within walking distance to the core does not seem that irrational. How do you see the price decline unfolding in condos? Not sure I agree with the consesus that pre-con investors will dump condos for a loss upon closing to the extent that some people suggest

#134 pjwlk on 07.19.12 at 12:14 pm

“I wonder why CMHC or any other real estate voice doesn’t communicate this truth.”

Since most of our manufacturing jobs have gone to China, Big Box stores are ridding themselves of people at the check-outs, and our call centres, programmers and tooling trades have been moved to other countries, I don’t think anyone is in a hurry to kill of what is pretty much the last hope in most of our country for keeping our people employed. That would be the housing industry. One of the very few industries left that can’t effectively be outsourced.

I could go on, but I’ll spare you…

#135 Anne "Pom Pom" Rohmer on 07.19.12 at 12:31 pm

#55 Jim on 07.18.12 at 11:22 pm
A much better theory is that the people with a lot of wealth have social and political power that allows them access to the best means of accumulating wealth – namely, taking it from others through the power of taxation, corruption and currency debasement.

Great observation Jim…I guess we will never learn from history as convincing ourselves that “it’s different this time” is much easier

Quote from John Maynard Keynes from The Economic Consequences of the Peace.

“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some. – As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

“Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” Amazing words

#136 zeeman1 on 07.19.12 at 12:51 pm

#58 GTA Girl.

That was funny!

#137 Not 1st on 07.19.12 at 1:05 pm

Here in sask, there were a handful of houses over the million dollar mark. For sask, thats an expensive home. Since June 20th each has been subsequently reduced to just under one million. Some of these reductions were a few hundred thousand. Once that happened, showings came to a halt and its crickets around here.

#138 Ross K on 07.19.12 at 1:08 pm

To Garth’s Readers,
(your really lucky this guy continues year after year to weather the attacks of his naysayers)

Just like the Canadians who choose not to read Greater Fool and instead take tidbits from a news cast and then make life affecting decisions, you should always read the CREA statements. CREA always says “Talk to your REALTOR” for local advice and they mean it!

A few facts you should know about my profession:
1) Every 3 homes I sell, employs one of my neighbours for 1 full year.
2) Any sale that I screw up costs one of my neighbours 1 full year of employment.
3) Every home I sell adds $42,000 to the GDP
4) A good REALTOR actually saves you money if you sell your old home and buy a new one through them
5) The Government fine in Ontario for me forgetting to put “sales representative” under my name in an ad is $5000. My office pays another $5000 as well.
6) If it tell you “this home is a great buy” and it’s not, you can easily sue me and win
7) Agents across Canada spend over $80 million each year to maintain the infrastructure that supports your using realtor.ca (the only such national site in the world) and the statistics that are available to you today.

Yes, you can pick a bad apple. Sure you can drink the honey from a bee. But…. if you select your REALTOR properly, they can save you far more than you will ever pay them.

#139 Bigrider on 07.19.12 at 1:11 pm

#58 GTA Girl.

Your are a markswomen!!

I have a crush on you.. LOL and so does my wife LMAO

#140 fraud and jail on 07.19.12 at 1:20 pm

isn’t the mls hpi fraud?

why don’t any of these people get charged?

fined?

jailed?

let’s bring out the lawyers and send these yahoo realtors away for good.

#141 joe on 07.19.12 at 1:33 pm

The HPI was specifically designed by CREA with support from the government to mislead the sheep into thinking the housing market is fine and dandy. In Calgary the way I gauge the market is by using my friends properties that were bought in the peak of the market (July 2007) and what they sell for today. A townhouse in Shawnessy which sold for $285000 in summer of 07 is on the market today for $249900 asking, has been on the market for 6mos. Since 09 I have heard nothing but MSM pumping about prices going up and in my inbox I see price reduced listings everyday. Something isnt adding up.

An example of the townhouses I was talking about, personally saw these listed at $285K, friend who lives in complex claims that neighbor bought his for $310K, now selling for $249? And the market is going up according to MSM? I wouldnt trust sales numbers, average price, inventory, nothing.

http://www.realtor.ca/propertyDetails.aspx?propertyId=11803236&PidKey=1894253139

#142 tkid on 07.19.12 at 1:37 pm

Never understood why someone would pay more per sq ft on a riskier, unbuilt unit (to live or invest) when there could be one right accross the street in a 5 year old building selling at a 10-15% discount.

I bought an unbuilt – didn’t even have a shiny model unit to oooh over, although that didn’t stop me from visiting the site agents every weekend for two years in a row – but the unbuilt was miles cheaper than everything else, had a decent layout, and the math fit.

My landlady is selling my current rental for one heckuva price so I haven’t had to deal with anyone tromping through my place on the weekends, weekdays, weeknights. Not! One! Visitor! The resales are not that cheap? Enticing?

$500 sq ft within walking distance to the core does not seem that irrational.

That math does not fit. I paid $90k for 540 sq feet (within walking distance to the core), and would maybe pay $120-150 for the same place now if the job was safe. Shiny surfaces mean less to me than a decent layout with good bones.

Not sure I agree with the consensus that pre-con investors will dump condos for a loss upon closing to the extent that some people suggest.

I agree. They’ll try to squirm out of the contract, assign the deal to another, walk away from deposits, picket outside the building holding ‘Unfair’ signs … anything but close the deal IMHO. Builders will need court orders to get many of those sales completed.

#143 Harlee on 07.19.12 at 2:05 pm

#98 Jon B.
Ever hear of ‘Sturgeon’s Law’ ?: 90 % of everything is sh!t.Basically, there is only 10% of greatness in anything. The rest is merely average, mediocre,bland or just plain useless. That includes all the blog sites on the internet and the comments posted on those sites.Take a look at TV,movies,books,music – same thing. This goes for anything produced in a day,week,months,years. It’s all our challenge to find that 10 % of greatness and go with it. If one can “find” the 10% of genius then life might just be a bit easier (but still a challenge).
Smoking Man: “I miss you drunk”-Garth”. No ! Try to stay sober. Even if your non-drugged postings are less “amusing”, they are far more interesting than when you’re loaded. Does anybody here think you’re a “pumper” ? Probably. That’s still better than being a “barbarian” though.

#144 blase on 07.19.12 at 2:07 pm

3-bedroom “executive condo” in a “meh” area of Calgary is listed in high $400s. Not accessible to LRT, close to Indian reserve (break-ins anyone?).

5-bedroom house in London, Ontario can be had for low $200s, for $300,000 you are in a place that would cost you double to live in Calgary.

Yes, I realize London has unemployment, but there are always jobs in a town of 400,000. Drive a truck, work a call center, take a course. In the end, living in lake country for half the cost of housing minus mortgage interest is not a hard decision.

#145 C on 07.19.12 at 2:24 pm

Not sure if this has been mentioned yet but in looking at the July 2012 mid month GTA real estate stats the average price for the GTA was $473,466.

June 30th, 2012 the average price in the GTA was $508,622. That’s a decline of almost 7%. I know there are other factors such as summer weakness, etc but there also should have been a pop since 30 yr CMHC insured mortgages were available until July 9th (ish).

#146 Ralph Cramdown on 07.19.12 at 2:28 pm

A few facts you should know about my profession:
1) Every 3 homes I sell, employs one of my neighbours for 1 full year.
2) Any sale that I screw up costs one of my neighbours 1 full year of employment.

3) Logical consistency and math aren’t required skills.

#147 coastal on 07.19.12 at 2:50 pm

“Everytime I hear a realtor talk, it becomes more apparent that they know nothing of the economy and you’re just further proof of that.”

I hear ya, they all yap it up that they are highly educated with PHD’s and degrees in this and that, but they clearly have never taken a basic economics course and understand the simple math that markets that boom always go bust at some point and those in hardship or urgency are what drive the market prices lower.

These so called “intelligent” rookie agents don’t know jack shit about real life, and base every so called “intelligent” and educated person they suck into a sale as God’s truth to who is driving the market. They don’t mention those who are in over their head, those who got divorced, those who had a medical condition and is forced to sell. Only those with bucks and a piece of paper count, as to try and prove the market will never go down. Makes you want to hurl sometimes reading this ridiculous garbage.

#148 Westernman on 07.19.12 at 2:53 pm

Ross k @ # 138,
Quite a self-serving Pr piece there Ross… to which I say horseshit! I’ve never met a realtor yet that knew his ass from a hole in the ground about construction, mechanical systyms or anything else for that matter… really the only thing they know well is slinging B.S. and operating fax machines… and the female realtors are even stupider as hard as that is to believe.
Anyone who has anything on the ball can inspect and determine if a house is sound and/or worth the money.
Of course I don’t disagree that you and anyone else should be allowed to feast on the ignorant sheeple ( after all, what else are they good for ) but I just thought I’d put your B.S. to the task…

#149 1love on 07.19.12 at 3:08 pm

http://vreaa.files.wordpress.com/2012/05/canadian-cities-house-price-index-with-quotes-1980.jpg

#150 patiently waiting on 07.19.12 at 3:10 pm

Below is an example of a listing that shows days on market (DOM) at 63, and a a current asking price of $1,398,000. But when checking the listing history it shows that the property has been on the market for more than 1 year, and the current price is $250,800 below the original listing price. If and when this property sells, unfortunately the reported sale will not reflect the true days on market, or the massive price reduction that has already taken place.

Buyers are so at the mercy of this type of manipulation . . . as they have no idea what is really going on in the market . . .

PW

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=440755311&s=BRC&t=BRC

#151 refinow on 07.19.12 at 3:13 pm

Ross K #138

You were doing so well, and then you went all “realtor” on us again..

You can’t “suck and blow” at the same time.

Tell us on one hand all the stats from your organizations are full of shyte, then pat yourself on the back at what a wonderful job realtors do for the financial well being of the home owner.

Pick a side, and stay there….

This back and forth ruins your credibility.

#152 Realtors don't like realtors either.... on 07.19.12 at 3:21 pm

As my title says – Even realtors hate realtors….

Look, if a dentist did crappy work and lied to his patients, he’d be sued.
If a mechanic lied to their clients, other mechanics would black ball them.
If a Mike Holmes saw a building that was done poorly and the owner lied to, he’d call the contract out!!!!@
HOWEVER>…
If a realtor lies and misleads and profits, it’s just good business sense.
If the LIBOR scandal shows you anything, people will lie and cheat for money.
All that matters is to empty your profits for personal gain..

HPI what a scam..

LIBOR>>>>>>> so will the president of the CREA ever step down or be held accountable? NO

How about their Pseudo Economist mouthpieces? Nope.

If a FORD spokesperson said Pinto’s were safe and don’t blow up in flames – they’d be hung by the FEDS.

POINT IS – There is Propoganda, and then there is “Good Business Sense”……

Even a used car dealer has the balls to call another scamer car dealer a weasle. In the CREA, they just call is business as usual……..

Ebay for homes please …..

#153 fraud, jail, and cramdown on 07.19.12 at 3:28 pm

#146 Ralph Cramdown

You gotta be joking, man!

Bahahaha!

#154 Canadian Watchdog on 07.19.12 at 3:29 pm

#146 Ralph Cramdown

Who needs skills when they can pontificate CREA’s how to be a realtor/economist guide.

#155 Realtors don't like realtors either.... on 07.19.12 at 3:30 pm

#138 ROSS K the realtor wierdo….

Hey buddy, I assume your are not from North America, and have proven your intellect as a realtor….

“YOU cannot drink honey from a BEE!”

Think about it, if you are sucking on something on a bee, it is not Honey you are getting. Much like the Real Estate industry…..

Secondly – you are not employing your neighbour for a year, unless he is a litigation lawyer suing the seller…..

#156 2centCdn on 07.19.12 at 3:33 pm

#146 Ralph
If believing that POC helps keep you going, then keep on believin! You’re helping man kind … god bless you. But please check the dictionary definition of the word “fact”. I think you are miss using it here. You can and will still sell houses, just not as many, not as often and not for as much. And now the buyers who had a gun held to their head will be holding the gun to yours …. carma.

#157 2centCdn on 07.19.12 at 3:39 pm

… or Karma as my Buddhist friends call it : )

#158 DonDWest on 07.19.12 at 3:41 pm

Ontario strikes me as the most mysterious province when it comes to the housing bubble. The province has some of the lowest and highest priced regional markets throughout the nation.

I’m from Halifax and I can’t help but to drool over Windsor, London, St.Catherines/Niagara, Hamilton and Oshawa. These markets come across as relatively cheap, even for Halifax, I can only imagine how someone from the perspective of say Calgary sees it. . .

Now, Ontario has some of the most ridiculous markets as well. Toronto, Brampton, Markham, and Mississauga are laughable to say the least.

In many ways, I just don’t get it. People say jobs are the cause, but Windsor and Niagara are border cities. There will always be jobs to be had along the USA border. Sure, they may not be the most glamorous jobs or the highest paying, but when it costs you 130K for a 4 bedroom Victorian house right next to major shopping malls, why should you give a crap? All of the bearish cities I mentioned have anywhere from 200k to 500k people, so it’s not rural hicks town, there are jobs.

So what’s so special about Markham, Brampton, Toronto, and Mississauga? Don’t know, confusing why some cities no more than a couple of hours away from the GTA are so cheap compared to the GTA itself.
People blame Asians, but I can only think of one problem – prestige. As Garth has said, real estate is such an emotional purchase. People would rather become a 100K financial analyst in the GTA, take out 30K worth of student loans to do it, and pay 1.1 million for a dirty bungalow; than spend a couple of years to work their way up in a call center, get 40K a year, and then buy a nice 4 bedroom Victorian in London for 150k.

Not to mention the guy at the call center would probably have more free time on his hands to spend with his family, maybe start a side business on E-Bay to get additional income, or read Garth’s books so he doesn’t make stupid financial decisions.

The only thing Asians are guilty of is chasing prestige. Many Canadians are guilty of the same emotional bliss. It’s quite toxically prevalent in Asian culture, but it’s no stranger amongst Caucasians if Calgary is any indication. We chase titles and glamour, leading us down the jaws of the housing python.

There’s a certain irony that people with the highest levels of education and salaries are being conned by a realtor high school dropout. What makes the situation even more remarkable is that same high school dropout realtor can’t pull the same crap off in London amongst equally uneducated peers.

I wonder if psychology has something to do with it. An educated young person is already 100K in debt so what’s another million for a house?

Overall, my friends in the USA can’t help but to laugh at my fellow Canadians. Refusing to live in “lesser cities” and take “lesser jobs;” and instead opting for “greater cities” and “greater jobs” even if it costs them a million dollars for a bungalow. They’re sentenced to childhood abortion through economic destitution. They can’t claim lack of access as the “lesser cities” are a two hour drive away. Unfortunately, I conceitedly must agree with my American friends. We’ve become the world’s most snobbish nation! How could we let this happen and how?

#159 Editor on 07.19.12 at 3:41 pm

#131 Why would the US housing market ‘bottoming out’ have an impact here? It’s a fair question to ask, but people with money to spend in Canada who live at least half a year in Canada will make a local decision based on local values. A better feeling about US real estate — meaning only that it’s momentarily not bleeding and may be scraping along a long bottom — can’t translate to a better feeling about Canadian real estate. Their prices now make sense. Ours do not. Their bad credit is getting flushed out of the system. Ours hasn’t. Their housing prices are more in line with income. Ours aren’t. Doubt there is a halo effect for housing across borders. After all, Canadian housing being “strong” didn’t lend its halo to American real estate. Now let’s look at a moneyed immigrant with a choice to live in Canada or the USA, with housing value a top priority. All things being equal, which country would that person pick?

#160 Mister Obvious on 07.19.12 at 3:44 pm

#41 Julia

Regardless of property values, a house is a forced savings vehicle…
———————-

Regardless of property values? Did you think before you wrote that? If you buy an overpriced home with even 20% down, then pay the mortgage for a few years while it diminishes in value, where are these savings?

You would have been correct to say a house was a forced savings vehicle in past decades. Those days are now ending. That’s the crux of public misunderstanding and the reason for the existence of this blog.

#161 Crashing Yuppy on 07.19.12 at 3:57 pm

So Many Realtors posting now.

This is the final stage before total collapse. They are like little punks talking tough because their bodyguard is behind them only to realize they have run off.

This will be ugly, swift and the realturd pimps will be asking “would you like to supersize this” at McDs

#162 Dupcheck on 07.19.12 at 4:02 pm

#51 Joe The Realtor

RE agents are unscrupulous, they have make more money than the owners selling the houses. RE firms have created a monopoly with their schemes that they pull on the buyers and sellers, inflating the market to a unsustainable point where it is now. It has come time for RE agents to be regulated, restricted on how much they can make, and also be held responsible on the lies that they sell. Buying a home is the most expensive transaction most will ever make, and it is a big decision. It is not a stop at the supermarket buying a bag of potatoes. If an RE agent lies and pushes someone to buy a place, they ruin a family’s life. It is no different than a doctor giving a bad diagnosis or an engineer designing a faulty bridge. You should and will be held responsible for influencing lots of people’s decisions and by default ruining their economic stability and future. History will show how a lot of you are just bad for the economy in the long run.

#163 Industrial Guy on 07.19.12 at 4:08 pm

Hi Joe The Realtor. If you have any fund left. Please visit the following place in Southern Alberta:

http://en.wikipedia.org/wiki/Head-Smashed-In_Buffalo_Jump

This is what your”profession” did to thousands of young families in Canada. Just like the Buffalo, you panicked them over a precipice until there were none left. Now you’re going to starve because your greed destroyed your only source of income. Idiots.

#164 Kenny Banya on 07.19.12 at 4:10 pm

I know it’s childish but the summary from Ross makes me very happy. The house next door sold for >$100k over asking less than 2 months ago, and the new owners never ever smile at us scummy renters next door. Knowing that they are already underwater is some small consolation for those of us on the bottom of the social ladder.

#165 Linda Pearson on 07.19.12 at 4:23 pm

#144blase on 07.19.12 at 2:07 pm
3-bedroom “executive condo” in a “meh” area of Calgary is listed in high $400s. Not accessible to LRT, close to Indian reserve (break-ins anyone?).

Are you suggesting the new home-owner would resort to burglary in order to afford his high $400s house? What a scandolous suggestion!

#166 Linda Pearson on 07.19.12 at 4:24 pm

Blast it…make that scandalous please.

#167 torontorocks on 07.19.12 at 4:27 pm

oh and GTA Girl you had it so wrong. I’ve posted here at least as long as you I wouldn’t have figured you’d remember my posts. Then again, if we’d met, you’d definitely have remembered me.

#168 Snowboid on 07.19.12 at 4:42 pm

#138 Ross K on 07.19.12 at 1:08 pm…

And I used to think that the banned Gold Standard of Okanagan RE had a big ‘ego’!

Ross Kay – you are now number ONE!

And BTW, can you quantify ‘neighbours’? Is that six, fifty, or a thousand?!!

#169 cramar on 07.19.12 at 4:47 pm

138 Ross K on 07.19.12 at 1:08 pm

A few facts you should know about my profession:

4) A good REALTOR actually saves you money if you sell your old home and buy a new one through them

—————————————

Can you elaborate on just how using a REALTOR would have saved me money in recently selling my house? Only if a REALTOR could instigate a bidding war with the final price more than the commission plus HST. I wasn’t comfortable with that and I’m sure the actual buyers would have been real cheesed at loosing out or having to pay more.

#170 Nick on 07.19.12 at 4:47 pm

#79 Observer

YES!

#171 brainsail on 07.19.12 at 4:48 pm

“Barclays the biggest Libor liar? No, that may have been Citi”

“In early 2010, two economics professors from UCLA and the University of Minnesota looked at Libor manipulation and found that, at least according to one measure, Citi had misstated its lending rate by more than any other large U.S. bank in the run up to the financial crisis. The worst offender worldwide, according to the analysis, was the Royal Bank of Canada.”

http://finance.fortune.cnn.com/2012/07/19/citigroup-biggest-libor-liar/

#172 NoName on 07.19.12 at 5:14 pm

#138 Ross K on 07.19.12 at 1:08 pm

i do agree with you on a few points but there,
but you are taking more credit you should…

1) Every 3 homes I sell, employs one of my neighbours for 1 full year.
2) Any sale that I screw up costs one of my neighbours 1 full year of employment.
i dont understan logic here

3) Every home I sell adds $42,000 to the GDP
every home that you sell someone else adds 42 000$ to gdp

4) A good REALTOR actually saves you money if you sell your old home and buy a new one through them
i agree on this one with you, agent we used back when we where buying our house was great he wasnt shugar coting enything… he was honest and up front, cant thank him enough

5) The Government fine in Ontario for me forgetting to put “sales representative”
under my name in an ad is $5000. My office pays another $5000 as well.
it is called due diligence, maybe in your case looks ridicolous but same rules are there for everione

6) If it tell you “this home is a great buy” and it’s not, you can easily sue me and win
it is miss leading, plus you guys have BRA to protect you

7) Agents across Canada spend over $80 million each year to maintain the infrastructure that
supports your using realtor.ca (the only such national site in the world)
and the statistics that are available to you today.
other companies provide sales number and stats too, and they maintain web where they advertise product and service they provide

just sayin’

#173 Questioning Calgary stats on 07.19.12 at 5:23 pm

#130 Rahim

It doesn’t appear you are aware of what has been happening with CMHC since 2009. You will notice that prices in Calgary in June 2009 were crashing compared to June 2008. Suddenly a dramatic reversal. Why? That’s simple. A massive market intervention took place.

In 2009 CMHC was mandated to insure more high risk mortgages because the housing market across Canada was tanking. That year CMHC had a total of about $300 B on its books. Three years later, that total is now almost $600 B. As well interest rates were set at emergency levels and kept there. Without this massive, unprecedented, emergency intervention, Calgary house prices would have continued to tank from 2009 onward.

However, the CMHC pipeline has recently been reduced to low flow as the cap of $600 B has not been set higher. The new mortgage rule changes will guarantee that. There will be smaller mortgages and less buyers moving forward in Calgary.

#174 sayingyouareimportantdoesntmakeitso on 07.19.12 at 6:04 pm

“if you select your REALTOR properly, they can save you far more than you will ever pay them.”

Explain how.

I see no value added over what my ideal system would look like; national database of homes for sale where the lister would be obligated to have XYZ paperwork completed. The buyer could go directly to the seller.

The only thing I can see realtors providing is some kind of 3rd party negotiation system between buyer and seller. The obvious failing here is that all parties have a vested interest in screwing the buyer. A per transaction fee for an arbitrator would facilitate the negotiations much more fairly.

I don’t own a home – I have no idea what a realtor could possibly offer me as a buyer – To me they are all bored housewives and people who failed to find a real profession.

#175 Form Man on 07.19.12 at 6:06 pm

perhaps we won’t stay wealthier than Americans for long……..

http://www.bloomberg.com/news/2012-07-19/congratulations-canada-on-your-ongoing-housing-bubble.html

#176 John on 07.19.12 at 6:07 pm

Crimes is going up in Toronto as credit is drying up and people are no longer able to borrow money they don’t have and can never pay back. The housing market is crashing in T.O as people who are maxed out and on the brink of going bankrupt are lowering their prices by 15% in a bid to get out before prices far further. I think many in the RE industry are expecting a huge drop in prices as one agent said in private that a 50%+ drop in the condo market and 40% in SFH is to be expected over the next three years.

#177 jess on 07.19.12 at 6:37 pm

118 Canuck Abroad

Perhaps he was just foolish
From the article: “For Mr. Johnson, it was painful to watch the house he built 48 years earlier sell for only $33,000 at auction last year. ”

If Little Else, Banker’s Trial May Show Wall St. Foolishness
By STEVEN M. DAVIDOFF

Yves Smith
Quelle Surprise! New York Times’ “Deal Professor” Ignores Facts and Law to Defend Citi Employee Stoker in SEC Toxic CDO Case Rakoff Highlighted – 07/19/2012 – Yves Smith

#178 jess on 07.19.12 at 6:51 pm

more fallout from the “statistics”

SEC Charges Mizuho Securities USA with Misleading Investors by Obtaining False Credit Ratings for CDO
Washington, D.C., July 18, 2012 — The Securities and Exchange Commission today charged the U.S. investment banking subsidiary of Japan-based Mizuho Financial Group and three former employees with misleading investors in a collateralized debt obligation (CDO) by using “dummy assets” to inflate the deal’s credit ratings. The SEC also charged the firm that served as the deal’s collateral manager and the person who was its portfolio manager…
The SEC alleges that Mizuho structured and marketed Delphinus CDO 2007-1, a CDO that was backed by subprime bonds at a time when the housing market was showing signs of severe distress. The deal was contingent upon Mizuho obtaining credit ratings it used to market the notes to investors. When its employees realized that Delphinus could not meet one rating agency’s newly announced criteria intended to protect CDO investors from the uncertainty of ratings downgrades, they submitted to the rating firm a portfolio containing millions of dollars in dummy assets that inaccurately reflected the collateral held by Delphinus. Once the firm rated the inaccurate portfolio, Mizuho closed the transaction and sold the notes to investors using the misleading ratings. Delphinus defaulted in 2008 and eventually was liquidated in 2010. Mizuho sustained substantial losses from Delphinus….

“This case demonstrates once again that bankers and market participants who embrace a ‘get the deal done at all costs’ strategy will be identified, charged, and punished,” said Robert Khuzami

http://www.sec.gov/news/press/2012/2012-139.htm

#179 John on 07.19.12 at 6:59 pm

Here’s a little something to put it all into perspective…and it’s absolutely connected. Also given that this blog makes a lot of sexual metaphors.

Say your a single man in Toronto, aged 21-50. Ok, forget that as a cohort. Say you’re a man with a prostate.

Walk down the street, any street, and pass 50 women. How many looked at you? The number will be zero. That’s right, zero. Consider what this means. The social context in Canada’s largest city and financial hub is “no limts”. Where there are no limits, you basically have no boundaries. Just a wall. Boundaries are semi-transparent “yes, no, maybe” judgement tools an independent, inter-dependent free individual uses to get needs met. To serve and be served.

This is the social interface that defines what’s going on in the society. At many levels. How accurate and healthy judgement is.

Try it out. What’s your number? That statistic might just mean something. What’s going on in that situation…where there are no real limits ( needed for a community where there is real service being exchanged in every human way).

Why would women be like that? Why the wall of mistrust for men? It’s not for nothing. And it provides the social context for the Toronto “real estate” scam….and the “value” offerings at all levels.

It’s always about value. And they aren’t detecting much.

#180 Spiltbongwater on 07.19.12 at 7:03 pm

#150 patiently waiting on 07.19.12 at 3:10 pm

Does that even seem possibly correct the taxes at $2800 annually for a house valued that high? I think based on the value and area of the house, should be at least $5000 annually.

#181 Newwest on 07.19.12 at 7:12 pm

Have a look at the world housing bubble blogspot – http://worldhousingbubble.blogspot.ca/ to see the recent breakdown of buyers of U.S. real estate. Also shows the state in which they are buying too.

#182 Daisy Mae on 07.19.12 at 7:17 pm

#56 STEVE: “When real estate prices crash and burn the government will be on the hook to cover losses and that could be alot of money.”

********************

CORRECTION: The taxpayers will be on the hook….

#183 Rahim on 07.19.12 at 7:21 pm

Questioning Calgary Stats: So what? Does that in an of itself guarantee another correction? So CMHC lending is capped. So mortgage rules are tightened. Does that mean prices have to go down? I don’t think so…

At least I have the stats for 7 plus years to show what has been going on in my neighbourhood. In fact I have them for all Calgary-area SFHs and condos. Guess what. No, I’m not a Realtor. I’m a market watcher.

I think there may be lots of ways yet that Canadians and Calgarians find to get around the new mortgage rules.

Have you heard of attainablehomescalgary.ca ?

They’ll give you a down payment…

#184 Daisy Mae on 07.19.12 at 7:50 pm

#82 NOSTY: “But hey, we elected them, didn’t we?”

*********************

“We elected them”? Sorry, I’m like a dog with a bone. The cons have a pathetic 38% ‘majority’ and I’m still trying to figure out just how that can happen. Something has to be wrong with the system….62% did NOT vote for the cons.

#185 Daisy Mae on 07.19.12 at 7:55 pm

#87 Vancouver_Bear: “Realturds are the most disgusting bloodsuckers of human kind!”

***********************

Why can’t something be done about the outrageous commissions they’re getting — 7% and 3% is ludicrous.

#186 Ralph Cramdown on 07.19.12 at 7:57 pm

In many ways, I just don’t get it. People say jobs are the cause, but Windsor and Niagara are border cities. There will always be jobs to be had along the USA border.

Dude, if you think the Niagara region is cheap, check out prices in Buffalo, NY!

#187 Nostradamus Le Mad Vlad on 07.19.12 at 8:05 pm


Thought For The Day! “When the American citizen is living in debt… When American business is operating in debt…When the American government is in debt…Bankers rule the world.” — Mr George Champion, formerly President of City Bank and President of the Economic Development Council of New York 1972 (wrh.com).
*
#176 John — “Crimes is going up in Toronto as credit is drying up and people are no longer able to borrow money they don’t have and can never pay back.” — Well pointed out. As money becomes more and more scarce, sheeple resort to barbarianism to get what they need, consequences be damned.
*
Three Factors may cut US forecasts by 771%; Export Revolution UK now selling to more countries out of the EU than in it; Murdoch going? He won’t be missed; Persian Gulf “The US government DESPERATELY needs this war to happen, ahead of a complete crash of the US economy, because then it can blame the crash of the US economy on the war. Unfortunately, it is only a matter if “when”, rather than “if”, right now.” wrh.com; Six Walmart heirs hold more wealth than 42% of Americans; Germany Ghost of deutschmarks still living; Western bullying China lends Africa big bucks to stop it.
*
Gorillas working together Dismantling poachers’ traps. We humans think we’re so smart, but the reality is, we don’t know very much about anything; Agenda 21 With GPS trackers in every car, makes its appearance in San Fran.; Russia “Translation: The US/Israeli mercenary army has failed to overthrow Assad even with the decapitation strike, and now they are looking for someone to blame their defeat on.” wrh.com; At last A new ‘net provider who puts privacy first; Quite a figure One in seven MPs have never had a real job; Desperation Why would Iran commit terrorist attacks in Bulgaria? David Cameron supports terrorism. Another zionist schmuck; Eating Hemp? Never heard of it, but it supposedly does have some beneficial effects.

#188 Devore on 07.19.12 at 8:26 pm

#138 Ross K

3) Every home I sell adds $42,000 to the GDP

Here’s an idea: lets have all home owners sell their houses to each other every year, that would be a huge boost to GDP!

Just another reason for real estate to be as small a portion of GDP as possible, and that high real estate prices are a net drag on the economy, as capital directed to it would be far better spent on productive sectors of the economy instead.

#189 TaxHaven on 07.19.12 at 8:31 pm

Blind optimism never dies. Eyes wide shut.

Garth, people here are missing your message about real estate being a dead horse for the next few years.

Commenters on this blog seem still busy fiddling, wangling, concocting and scheming up new ways to borrow even more money and “make a killing” in real estate. 184 comments and about half are busy doing this.

Even as the Canadian economy – and their jobs – rots…

#190 Devore on 07.19.12 at 8:35 pm

#138 Ross K

As is hopefully obvious by now, people selling houses to each other is not a productive activity that adds to GDP, which measures value add. If I improve my house and increase its value by $42,000 then sell it, your commission just wiped out my contribution to the GDP.

#191 TaxHaven on 07.19.12 at 8:50 pm

@ Devore

Government spending is – perplexingly – also included in GDP calculations. So, as you mention, are house sales.

Should retailing even be included at all? If selling a house to another produces “wealth”, so must selling a pizza or an exercise machine? What nonsense.

“GDP” should be calculated in some way based on actual GOODS produced and NOT denominated in dollars.

#192 question for torontorocks on 07.19.12 at 9:02 pm

**************************************
“#167 torontorocks on 07.19.12 at 4:27 pm
oh and GTA Girl you had it so wrong. I’ve posted here at least as long as you I wouldn’t have figured you’d remember my posts. Then again, if we’d met, you’d definitely have remembered me.”
***************************************

Why, because you’re a total wanker?

#193 Tony on 07.19.12 at 11:42 pm

Re: #34 MC on 07.18.12 at 10:28 pm

Just stay long the market pal you’ll learn. Everything will go down in wave after wave of selling including your precious Canadian REIT’s and preferred shares.

#194 bclandguy on 07.20.12 at 12:28 am

Cam Good, I ask you Cam, what are your real credentials, and how much commission have you made on sales in 2011?….There are way too many cranes in Vancouver now and that is real info from a 28 year veteran in the concrete biz…please explain?

#195 cynically on 07.20.12 at 2:25 am

#159 Editor – you make some sense with your comparison between Cda and US RE but everything being equal, your moneyed immigrant would probably pick the States because that’s where the overall living values are i.e. variety of consumer goods and their prices, real estate value in desirable areas and the action which goes aling with it all (not boring). #185 Daisy Mae — Sure something is wrong with the system – it’s the parliamentary system handed down from Mother Britain-3 or more parties running so that there is seldom a substantial majority to govern. #188 Nostra — You spew a lot of crap intermingled with a couple of gems but you are wrong regarding the suppliers of arms to the Syrian freedom fighters. At the present time it’s the gulf Arab countries and Turkey not the US and Israel, at least openly.

#196 jess on 07.20.12 at 11:37 am

attainablehomescalgary.ca ?

“They’ll give you a down payment.”

you mean “gifted”
..so is this a tax right off

AHCC administers the Attainable Home Ownership Program (AHOP). AHOP is for working middle-income Calgarians with household earnings that are less than $80,000 and who can qualify for a mortgage. This income bracket is often excluded from owning a home due to the high average price in Calgary and the difficulty of saving for a down payment in today’s market. AHCC is able to provide them with a gifted 5% down payment on their purchase of an Attainable home. Through AHCC, families can fulfill the dream of home ownership for approximately what they would pay in rent with only $2,000 down of their own money.

==

“gifted ” i hope they have better checks and balances in place
The mortgage fraud scheme based on properties in the Stonegate subdivision involved illegal property “flipping” to out-of-state borrowers at inflated prices using a company called “The Gift Program” or “Advanced Capital Services

Utah Man Pleads Guilty to Charges Connected to Multi-Million-Dollar
http://www.fbi.gov/pittsburgh/press-releases/2012/utah-man-pleads-guilty-to-charges-connected-to-multi-million-dollar-mortgage-fraud-scheme
Jul 12, 2012 … The mortgage fraud scheme based on properties in the Stonegate … Hurd further
admitted that he used The Gift Program to create an elaborate …

Published on: 2012/07/12, Last Modified on: 2012/07/18

#197 TurnerNation on 07.21.12 at 12:56 am

#179John on 07.19.12 at 6:59 pm

Funny, this morning did an informal poll while downtown, morning commute. Fully 40% of people wore earbud headphones. I refuse to even engage anyone who wears them.

Tune in, drop out. There. I’ve edited it, for our decade.

#198 Sunday Morning Dump: Spiderman Edition » Financial Uproar on 07.22.12 at 1:18 pm

[…] Canadian real estate bear Garth Turner outlines how the Canadian Real Estate Association has changed their way of recording data, which will undoubtedly make the upcoming crash seem less severe. Well done, […]