A full-time Victoria realtor, with many years of experience, posts this on her Facebook page:
Seeking part time work. Hit me up if you know anyone hiring. The Real Estate market seems to have come to a stand still and one can only deliver so many flyers. I suppose many don’t want to list over the holidays!!
In Toronto, amid growing panic in the forest of condo towers, a noted broker sends out this email blast desperately marketing a project in trouble:
SAVE UP TO $35,000+!! HERE IS A RECAP OF WHY THIS IS SUCH A KILLER DEAL:
§ $18,000 + OFF STUDIOS AND 1 BED SUITES
§ $20,000 + OFF 1 BED + DEN SUITES
§ $30,000 + OFF 2 BED AND 2 BED + DEN SUITES
§ Permission to lease on Occupancy at $0.00 fee
§ Assignment Clause is reduced from $5000 to $0.00
DEPOSIT – only 5% down
UNITS ARE AS LOW AS $430/SF!!! Neighbourhood averages are $500+ /SF. THESE
ARE HANDS DOWN THE BEST PRICES IN DOWNTOWN TORONTO AND THIS WILL BE THE HIGHEST-END BUILDING IN QUEEN WEST.
In Vancouver, realtor Sam Wyatt tells his clients that prices are down as much as 23% on the once-unflappable Westside. He adds this:
Unfortunately, I do not subscribe to the wishful thinking that the Spring market will bring with it a change in the present market dynamics. On the contrary, I suspect that we will see a new glut of listings hit the market from February through May and that in spite of increased sales volumes of the freshly lower priced properties, the MOI (months of inventory) will likely remain high.
Writing a piece for the parsimonious Globe and Mail, mortgage journalist Robert McLister details the fact record numbers of Boomers are now unable to pay off their mortgages before retirement. He adds:
The chilling truth is that there are just over 9.3 million Canadians age 55 and over and 43 per cent of them say they haven’t saved enough for retirement. But by 55, time is running out. A Statistics Canada study in 2009 found that people in their 70s spend only five per cent less than they did in their 40s. It takes years of saving to replace that kind of income and dispose of a mortgage.
Hmmm. Was it only 13 months ago the same guy started his column in Canadian Mortgage Trends with this statement?
Predictions of a Canadian housing crash have been unsubstantiated and have emanated largely from one man: Garth Turner.
Obviously when realtors, mortgage dudes, mainstream journalists and condo floggers are all singing variations of the same song, what comes next should be no great mystery. For the past two years it’s been apparent to me what pattern the Canadian housing correction would take, and we’re right on track. First a price reduction of about 15% nationally which takes roughly a year to roll out, followed by a languishing period of rolling decline – a melt. How long that lasts cannot yet be known, as it depends on economic growth, jobs, rates and the pace of US recovery.
Not all markets will behave the same, but all will be impacted. Parts of Vancouver and the Lower Mainland will lose 40% of their value (some are already edging 30%) while sleepy cities like Moncton will be barely affected. Montreal will suffer the extra burden of being in a province run by idiot idealists, while 416 will fare far better than 905. The GTA will end up being a housing microcosm, with some of its in-demand mini-markets barely affected other than longer DOM, while Brampton and Milton wither. Cottage markets everywhere will be smoked.
Shocking numbers of people who now work as realtors and mortgage lenders won’t be doing that by next summer. In fact the mortgage brokerage business will be on shaky ground, and likely rocked by a wave of consolidation. F will be under big pressure to buckle and reinstate 30-year ams and cash-backs. But Mark Carney will likely threaten to resign if he does.
There won’t be a crash, as the media defines it. But if you own a property you can’t sell, which has lost a fifth of its value, and is mortgaged for more than it’s now worth, what’s the difference? To you, that’s a crash. If you’re one of the three million Boomers who must sell to afford retirement, and the only buyers are vultures, then it’s a crash. If your desperate neighbour accepts an offer for 20% less than you thought your identical suburban house was worth, and you have only 15% equity, it’s a crash.
In many markets there is still time to prepare. To get liquid. Deal with debt. Downsize.
Or, you can have a nice Christmas.