Fail

Forget the markets. It’s human nature that’ll kill ya.

This is why people bought raging dot-com stocks with no earnings in 1999 or bailed out of their mutual funds at horrific losses in March of 2009 – because everyone else was. It explains bidding wars for homes in Toronto last March, when prices peaked, and empty open houses now when they cost 15% less. It’s why we wanted Bre-X, RIM, or Nortel at nosebleed prices. Why condo sales just fell by a third. Why Richmond real estate was torrid, but now languishes.

People abhor losses more than they enjoy profits. So fear trumps greed. We hold onto a losing investment, rather than sell and admit we bought out of idiocy. Human nature makes us value things other people want, no matter the cost. The same lack of confidence keeps us from buying or investing because others don’t. Being humans, we trust those we know – mothers, brothers-in-law, hockey buddies – and distrust those we envy. We loving taking advice from people we agree with.

So, we usually buy high and sell low. Making money’s almost always an accident. Losing it’s the norm.

And this brings us to Trish.

Many on this pathetic blog have speculated how it will be when former property virgins (a) realize what nimrods they were to buy a first home in the last few years, (b) understand why microscopic condos are a really, really bad idea, (c) face selling at a substantial loss or (d) wake up to the fact their own greed and fear screwed them.

Sweet little urban-suburban Trish may furnish some insight:

I’ve been enjoying your informative blog for some time now, so thank you for that!

I unfortunately, seem to be one of those people trapped with an overpriced condo in downtown Toronto. We had a friendly realtor, seemed to know what she was doing. It wasn’t until months later that we learned that she had bent us over and had her way with us. Being completely green, we stupidly trusted her.

Six months after we moved in, we realized living in an area that small wouldn’t work, so we started house hunting (this was all in 2010 by the way). Only then did we find out exactly what the realtor neglected to tell us (the condo seller made a killing off us). So we used a different realtor and assumed we could at least ballpark break-even on the condo (we had put 20% down). Listed it 30k under what we paid, but not a single offer.

Eventually we found a house out in the distant burbs. We paid just 10k more than what we paid for the condo and put down another 20%. Three weeks later, we realized the commute was killer, bought a car and ploughed on. Two years later, the 2.5 hour daily commute into the city is driving us to the brink. Unfortunately, of the areas closer to the city, East York seems to be the most affordable. The prices were mainly in the 450/490k range, but they have been steadily falling to the 350/450k range.

My long winded question is this: With 20% down, the bank has preapproved us for 450k, I don’t want to go that high, but staying here isn’t an option unless I want to go postal. The condo has finally gotten to the point of breaking even with the tenant, and selling it and walking away with a mortgage owing isn’t going to happen, so the bank hasn’t included it in the preapproval. But now I’m scared to death of having a(nother!) mortgage that high on a property that we wouldn’t be able to sell without taking a huge hit on.

How much do you think that an SFH in the East York area will fall in the coming years? Would it be worth it for us to ride it out for another year or two? Hell, even six months? I’m not too worried about selling the current house at a loss, this seems to be one of the only areas where houses are still moving – something to do with the majority of houses going for under 300k would help I think. Any advice would be greatly appreciated! — Trish

Hard to know where to start, Trish. The fact you bought a tiny condo when you could have rented it for half the cost, then walked away at will? Snapping a house in the burbs without doing your homework, because it had big spaces and deep granite? Not bailing out of the downtown property because you feared a loss, only to incur a larger one? Spending tens of thousands on realtors and closing costs you’ll never see again? Blindly believing lenders who want to indenture you with greater piles of debt? Buying real estate with less thought and research than you’d put into a new Lululemon yoga mat? Thinking bankers and realtors are your friends, rather than agents who profit from your naivety and greed?

You ask when Toronto prices will fall so you can do it all again. That’s not the right question. Rather, ask, how can I rescue my financial future from my own appalling decisions?

The easy answer is to dump the condo before the market deteriorates further. Sell your moose pasture house if you can escape with your downpayment intact (or even a small loss). Rent for five years and repair your finances by saving and investing. Reflect on your stupidity, catalogue it, and swear to learn from it.

As a reader of this blog, you fail. Bad Trish. I recommend more time with non-humans.

236 comments ↓

#1 TurnerNation on 11.18.12 at 8:14 pm

- Vancouver is still asking $1500(!) sq/foot for small expanses of white-painted drywall, concrete columns, and dark hardwood.

http://www.6717000.com/estates/listings/

- In Toronto’s subway system every other ad is pitching paid education outfits.
10k-30k “Obedience Certificates”? Promising to help you to get ahead in business.
And RBC’s credit-card-for-new-immigrants ads. No Credit History Required! Explains why they’re charging everyone at a 20% rate of interest.

- Might be related to the Economy, worth noting that in one of the wealthiest province we have the most grief.
They are living under “Compassionate Conservative” rule?

Canadian Watchdog I will also link to your earlier Chart. Calgary is also off this chart:
http://postimage.org/image/czxf2pool/full/

“Alberta suicide rates among the highest in Canada
In 2011, an estimated 500 Albertans took their own lives ”
http://www.cbc.ca/news/canada/calgary/story/2012/11/17/calgary-suicide-survivors-day.html

#2 TurnerNation on 11.18.12 at 8:19 pm

“It wasn’t until months later that we learned that she had bent us over and had her way with us. ”

Oh my virgin eyes!

#3 Daisy Mae on 11.18.12 at 8:21 pm

“We can repair what your husband fixed.”

I usually hum softly to myself as I repair stuff: “Anything you can do, I can do better…”

#4 lucyj on 11.18.12 at 8:22 pm

Perhaps some patience is in order.The theory of doing something even if it is wrong just does’t work any more. Take some time and think about what you have done regarding your real estate ventures, if you fail to see your financial shortcomings you are really going to screwed. Let us hope you can recover and move forward in a positive way.

#5 Kurt on 11.18.12 at 8:25 pm

“I recommend more time with non-humans.”

Arf! Arf!

#6 Toronto_CA on 11.18.12 at 8:29 pm

Definitely agree with the assessment that this letter writer has made some bad decisions and seems to want to make more.

They must have decent income though to be continuously dropping 20% downpayments every few years on 300k-400k properties, though.

Really odd that someone would buy a house without considering the commute to work though, I think that would be the first thing that came to my mind…you know, location. Right now I continuously weigh my hatred of commuting with my hatred of living downtown. Turns out I hate commuting more! Though when the busker drummers keep beating their buckets until midnight on a week day I sometimes wonder…

#7 The end is nigh on 11.18.12 at 8:45 pm

Trash,
Just get off your RE fix and start drinking like Smoking Man.
One way or another we are all junkies.

#8 Medic on 11.18.12 at 8:53 pm

Has renting really become so shameful that Trish couldn’t even list this as an option for her family?

#9 Freedom First on 11.18.12 at 9:00 pm

Excellent post Garth!

Yes, when the water goes out we see who has been swimming naked. That was very kind of you to be so gentle with Trish & her partner. It is mind-blowing to read on your blog, and meet people in my personal life today, the #’s of people who are smart enough to attain well paid employment, and yet remain financially illiterate, destroying their financial health and affecting their whole lives in numerous negative ways. How high any families annual income is, has little bearing on the enormity of the ensuing disaster of who is affected, except the #’s of $’s is higher. The outcomes are very bad for all of the naked.

#10 CalgaryBoy on 11.18.12 at 9:00 pm

Real estate agents and bankers are not your friends. They are nice to you to make money from you. They are business people and will take your business multiple times. I’ve heard so many times from people who have bought “he’s was so nice to us”. Why of course when he makes commission of $20 K from you.

I love how Garth is so honest in his response to your question.

#11 Mister Obvious on 11.18.12 at 9:07 pm

“Has renting really become so shameful that Trish couldn’t even list this as an option for her family?”

In a word… Yes.

#12 tkid on 11.18.12 at 9:08 pm

Where in God’s green earth is Trish commuting from that it takes her 2.5 hours to get into Toronto? Unless she means 2.5 hours for the entire trip, she’s duplicating my current commute from Niagara Falls.

And if her commute is only 2.5 hours round trip, then she’s an utter wuss, and the commute won’t get any shorter from East York. I’ve been to East York, you can’t from from point A to point B during rush hour without Grandma and her shopping cart on the sidewalk overtaking your car/bus ride.

Trish! Get both properties sold, and get ‘em sold now! And then rent! Or you’ll find yourself living in the freaking condo again.

She and the hubby must be making sweet amounts of money to lose unholy amounts of cash on real estate every few years.

#13 CrowdedElevatorfartz on 11.18.12 at 9:13 pm

Garth’s comment
“Being humans, we trust those we know – mothers, brothers-in-law, hockey buddies – and distrust those we envy. We loving taking advice from people we agree with.”

Perfect.

As a nonconformist, I usually end my real estate predictions with….” I’m either gonna look real smart or real stupid in about 12 months”

Oh and FYI BPOE…….I just sold for a very handsome profit and have rented…..The gal in the rental office stated. ‘ You’re the 5th person in the past month to sell their house and rent…….”

Gotta luv greater fools…. :)

#14 White Rock Mom on 11.18.12 at 9:17 pm

Patiently Waiting, I have noticed that prices in South Surrey are slowly coming down although not enough for my liking. West Vancouver prices are falling off a cliff. I saw a sale go through for $275,000 less than offering. It was offered at $1,300,000. I would like to know who that buying agent was. Do you ave any information on West Vancouver properties priced less than $1,500,000?
Many Thanks,
Mom

#15 Randy on 11.18.12 at 9:18 pm

Won’t a lot of Boomers be forced to stay in their homes and get sucked into the reverse mortgage deal because they didn’t kick out their 30 year kids living in the basement and sell when they should have ?

#16 Smoking Man on 11.18.12 at 9:25 pm

My minions out west are whispiring in my eyr that all is not good with the market out there.

Perhaps prices will start to finally crash hard now and we’ll see Gartho’s predictions come true.

Stranger things have happened.

#17 45north on 11.18.12 at 9:26 pm

so Trish owns a condo downtown and a house in the distant burbs (Brampton?) and she doesn’t want either one. She says she would take a loss on the condo and break even on the house.

sell both and take the loss on the condo

#18 Trader on 11.18.12 at 9:27 pm

Involved with some realtors on the Island, and it is amazing the “fear” that is out there. Just sold a place for wayyyyyy less than I thought, but at least got a tiny profit… but what I can buy now with the same amount or less of cash, is amazing!

Property lots in some areas, are CHEAP… some guys selling just for cash flow. May as well take the cash, and put it into the deal.

#19 TimV on 11.18.12 at 9:28 pm

Garth didn’t actually answer your question, which was probably the responsible thing to do giving the missing information (eg: expected years until retirement, presence of any kids who require post-secondary funding, earnings, etc). However…

You are covering a pretty large range of markets when you say “East York”. Everything from swanky Beaches to less, um, “savoury” areas. Or did you mean specifically old East York, which is a pretty small area?

For personal reasons, I like to watch the Woodbine-Lumsden area a bit closer than other parts. Frontage is still around $250k/20′, which hasn’t changed much, yet. Much more of course as you head west or for houses close enough to hear the rumble of the subway.

I’ll assert that land prices have changed much yet. Taking your number of $450k dropping to $350k would be a -23% drop in value of developed lots. I’m somewhat skeptical that this has happened yet. A drop from $450k to $300k would be a -34% drop. I couldn’t find Garth’s most recent official prediction, but I think it was around 15% nationwide. You are asking for more than a 2X on the nationwide prediction.

Further, the worst-hit areas, aside from anything starting with “Van”, are likely to be distant suburbs and overbuilt condos. This was my vague recollection from Garth’s somewhat early book “The Greater Fool”, anyways.

Anyhow, here’s your East York data. Usually caveats apply – some sales get missed since they are either ill-formatted or are missing crucial data. I try to exclude commercial and new-builds (spec) but not renos; I’m not always succesful.

I’m showing average price since it seems more relevant today. The more interesting number is above-ask and under-ask counts; short answer is that above-ask dropped to 37 of 104 (overall) for October detached and 32 of 68 for October semi. Compare against May which was 57 of 98 (detached) and 55 of 79 (semi-detached). Clearly a softening market, but I have no data on how much of that is just typical seasonal softening versus how much is “the big crash”.

_________________ Apr May Jun July Aug Sept Oct Nov
Birchcliffe-Cliffside all 495k 596k 453k 516k 480k na__ 465k 583k
Blake-Jones______ all 583k 584k 654k na__ na__ na__ 507k na__
Broadview North__ all 509k na__ na__ na__ na__ na__ na__ na__
Crescent Town____ all na__ na__ na__ na__ na__ na__ na__ na__
Danforth Village_ all 553k 563k 535k 580k 529k 538k 609k 530k
East End-Danforth all 551k 509k 516k 577k na__ na__ 512k na__
East York________ all na__ 600k 582k 619k na__ 569k 563k na__
Greenwood-Coxwell all 496k 556k 574k 561k 456k 540k 549k 498k
North Riverdale__ all 865k 1012k 870k na__ na__ 1012k 1106k na__
O’Connor Parkview all 603k 568k 668k 572k 438k na__ 577k na__
Oakridge_________ all na__ 411k na__ na__ 374k na__ na__ na__
Playter-Estates__ all 1065k na__ 866k na__ na__ na__ 884k na__
South Riverdale__ all 627k 636k 566k 629k 589k 670k 597k na__
The Beaches______ all 869k 790k 761k 939k 1289k 942k 755k na__
Woodbine Corridor all 598k 532k na__ 575k na__ 537k 546k na__
Woodbine-Lumsden_ all 419k 562k 432k 456k na__ na__ 386k na__
all______________ Att/Row/Townhouse na__ na__ na__ na__ na__ na__ na__ na__
all______________ Detached 640k 648k 608k 665k 620k 672k 629k 596k
all______________ Semi-Detached 610k 591k 573k 600k 519k 637k 564k 574k
all______________ all 618k 620k 598k 640k 588k 657k 596k 586k
all______________ unknown 471k 584k na__ na__ na__ na__ 529k na__

Average price going upwards in North Riverdale. Beaches continues to be highly volatile. Major crash in Woodbine-Lumsden, but giving the small number of solds, it’s tough to say much. Old East York seems to be a bit above the price range you’re interested in.

Are you willing to take the bus? If you want a spacious lot and are willing to take the bus into work, then O’Conner Parkview is a really nice area. Don’t know if the local school is important to you or not. Heading east along the beach towards Scarborough you can get some nice landscape at good prices … but transit gets progressively worse the farther you go.

I went from walking to work to a 20min subway ride. A ~15 to ~20min overall increase in commute time due to the daycare location. The commute is much more effort. Say all the criticims you want about shoe-box condos, but the ability to have zero commute time is sometimes worth a lot of sacrifices.

Anyways, still doesn’t answer your question, but hopefully mildly amusing. My gut instinct is that $300k is never ever again going to buy you anything much more than a tear-down or gut-job unless you head for >10+ minute walk from the subway or farther east to Victoria Park. (Unless you’re looking for a townhome or condo, in which case $300k can probably do you pretty good, with patience and a couple years – I’m hypothesing specifically only to semis and detacheds).

#20 Fortunate Fool on 11.18.12 at 9:30 pm

A new article on the Canadian Economy has been issued by Leap/2020 on its November issue of the GEAB newsletter. It’s only available through subscription, but if you send me an email ([email protected]) i’ll be happy to send you a copy.

Here is the introduction of the article:

A Canadian Tragedy – The Fall of its Real Estate Market

In April 2012 (GEAB 64), LEAP/2020 issued a warning about the Canadian Real Estate market and its imminent collapse. In the article “The Canadian real estate insanity, a repetition of the US mistakes – Towards a 15% to 25% fall in prices from 2013”, the LEAP/2020 team explained in detail the various drivers behind what is now a bigger real estate bubble than in the US, mainly ultra-low interest rates, government intervention via the Canada Mortgage and Housing Corporation (CMHC), and widespread toxic lending practices. The two most over-heated markets identified in the article, Toronto Condos and Vancouver, are now collapsing. Unlike the majority of industry commentators and economists from Canadian banks who only anticipate a minor and localized correction, the LEAP/2020 team predicts that the current weaknesses observed in Toronto and Vancouver are just the first signs of the burst of the Canadian Real Estate bubble, which will have deep and widespread consequences on the economy.

#21 Old Man on 11.18.12 at 9:31 pm

I took one hit with a 15% net loss with the crash of 1989/91, as waited too long to bail out free and clear, as saw it coming well ahead of time, but the buyers dried up, and sat for 9 months looking for an offer, so cashed in before the meltdown. I moved into an apartment waiting for my revenge, and life was fun, and then saw the opportunity.

I was going to hit the next real estate cycle, as this massive project across the road from the Four Seasons Hotel was getting started in 1998, more or less, and the presales were going for $400,000, so put down $25,000 for a one bedroom plus a den, and on completion were selling for $800,000; it is all a matter of timing the cycle.

Now when this next bust comes about it will take 10 to 15 years to begin to recapture capital, as they will be no big bounce this time, as the world has changed. I have no idea what young married couples can do at this point, but to cash in with condos in areas that will take a huge hit to move sideways into a rental unit and park with cash for a better day.

#22 Smoking Man on 11.18.12 at 9:36 pm

Confession coming up.

What is it that drives huge amounts of traffic to this pathetic blog, what makes it so unique and awesome vs. other blogs?

First off, Garth’s advice is good, it’s very good for those that are not comfortable with risk. If you want, steady, safe, tax advantage, ok returns, practical investing. This site is it.

So after a reader comes in gets their Gartho fix, they come to follow the ongoing soap opera and the on-going story taking place every day in the comment section.

The Characters we have created produce some very entertaining and insightful reading. This is a real time soap, with the villains, and hero’s. shyster’s and propagandists.

Garth being the really good sport allows us to share his huge audience and come on here every day and play. Thanks Garth I mean it.

The Smoking Man Character I created has held your attention, you have loved him and hated him. Felt sorry for him and proud of him. Love, Pity and contempt on the same day. The Smoking Man Character is just a bloody Character.

Let’s be truthful.
Smoking Man a Un schooled man, travels the world making deals and millions, has done thousands of hookers, day trades, works as a dyslexic code smith on bay street, at the same time owns and runs two companies with 20 employees, while blogging on here every day drunk. Now is that not far fetched.

What are the odds?

So who is the author of this grand Anti Hero. Smoking Man.

My real name is Smith, I’m shy, I live in Oakville, been with the same woman my whole life, never cheated, I have two daughters; one is 7 the other is 10. I teach at a community college, creative writing. Blogging was a project we started 4 years ago, and have been evolving it.

Everything about the character my class created is a story, fiction, now the question, do you want us to kill Smoking Man and contribute as, Smith. Or do you want The Great Smoking Man.?

Personally I don’t smoke, drink, or gamble. I go to church and volunteer in our community, the gent who went to the Gartho show was an actor in our drama club. The 10 of us in the audience killing ourselves laughing when he shook Garths hand, and laughed at the hundreds in the bar that came out to peek at the Smoking Man

But then again the above story I just created could be just Bull Shit.

Right out of chapter one, the art of lying.
You decide.

Which way will you’re wishful bias take you, that is the question?

Crash or no Crash, Smoking Man or Smith?

fk I’m a genius.

#23 T.O. Bubble Boy on 11.18.12 at 9:51 pm

This sounds like “the 3 bears”, re-told as a story about RE buying… the first one was too hot, the second was too cold, the third one will be JUST RIGHT!

Trish must love paying realtor fees and lawyers and land transfer taxes.

#24 Ralph Cramdown on 11.18.12 at 9:53 pm

Suck it up and figure it out for yourself — this isn’t a method blogging seminar.

#25 TimV on 11.18.12 at 9:56 pm

Oh, and why is it “unfortunate” that East York is the area that is within commuting distance and acceptably priced?

Obviously, of course, if you move every two years, then you’ll pretty much always be better of renting. But that’s no fun when you can still get a mortgage from the bank.

#26 periwinkles on 11.18.12 at 9:56 pm

Hi Trish

Hurtful question but where’d you get the money from when your so useless with it? Seems your advantaged more than others but can’t plan your life woman. Become a minimalist – no property inc no car – rent close to work and concentrate on saving & investing and keeping it for yourself. Stuff the nice people who like wads of cash.

#27 Tim on 11.18.12 at 10:00 pm

a 2.5 hour commute? Come on Garth, you make this stuff up

An hour each way is not uncommon in the GTA. — Garth

#28 The end is nigh on 11.18.12 at 10:06 pm

Schmocking Man,
Great drama, coming out of the bottle.
The next bottle of Scotch is on me.
Without you, this blog would be, ah, just a blog.

#29 Mike on 11.18.12 at 10:10 pm

DELETED

#30 Ralph Cramdown on 11.18.12 at 10:11 pm

“Trish must love paying realtor fees and lawyers and land transfer taxes.”

Well, she probably doesn’t think she’s paid any realtors yet since she hasn’t sold anything and she can buy for “free.” But all the realtors see her as $40k of pent-up demand for their services, that’s for sure.

P.S. Don’t you LOVE how GTA realtors are getting their wish about LTT? They complained that Toronto’s unique double tax was pushing demand out to the 905, so now Mississauga’s debating instituting one of its own! And agents figured they had a monopoly on imposing a spread of >1% between what the buyer pays and what the seller gets. Lovin’ it!

#31 Extron on 11.18.12 at 10:11 pm

# 22 Smoking Man
Jeez man I always thought you were Bi …. not that there’s anything wrong with that. Keep on keeping on man. Any one who listens to floyd is good in my binders full of women.

#32 randman on 11.18.12 at 10:15 pm

Smoking man…

How about going with SmokingSmith?

Just askin…..

#33 eddy on 11.18.12 at 10:16 pm

There is no evidence of entry prices falling in East York, E01 E02 etc. There is a shortage of houses for sale. Up in C10 two 850sq ft bungalows on Broadway Ave just sold last week for over 900k: in 2010 they would have gone for 650k

#34 Fabrega on 11.18.12 at 10:24 pm

#18 Trader
Are you talking about Vancouver Island? If yes, you must be a realtor. The island is still grossly overpriced. People are still asking $400,000 for tear downs. Ridiculous.

#35 45north on 11.18.12 at 10:31 pm

FortunateFool: the LEAP/2020 team predicts that the current weaknesses observed in Toronto and Vancouver are just the first signs of the burst of the Canadian Real Estate bubble, which will have deep and widespread consequences on the economy.

I am still amazed that the US prices dropped 35% peak to trough. 35% is the average. Mark Hanson says that half of Americans who have mortgages are effectively underwater.

I see signs that the Canadian market is near collapse – my children are squeezing into rental space so they don’t get stuck with a mortgage. The US market shows that the housing market is like a slow train wreak. Yeah I believe that Calgary is doing great, I have seen Kirkland Lake Ontario and it’s doing great but that doesn’t mean that things are great.

#36 Randy on 11.18.12 at 10:37 pm

“It wasn’t until months later that we learned that she had bent us over and had her way with us. ”

I was surprised when I heard a female commentator say…”Now we are getting down to the short strokes”……

But then I realized that she could have been making a golf reference….

Still not clear as to the ‘bent us over’ analogy ?

#37 Van Isle Renter on 11.18.12 at 10:38 pm

Had dinner with friends last week. They were the first ones who figured it out and said that we were smart doing what we’re doing (renting even though we could buy whatever we want). The others still don’t get it.

Our dinner friends only wish that they had put their house up for sale earlier. No offers so far.

#38 Old Man on 11.18.12 at 10:54 pm

#27 Tim – years ago took the go train from Port Credit to Union Station for a short walk to my office in the TD Centre, and loved every minute of it all -why? It mattered not the commute time in the least, as was meeting babes for dates, so my time was well spent going back and forth. :)

#39 Retired Boomer - WI on 11.18.12 at 11:03 pm

Smoking Man….a “creative writing” teacher, from Oakville?
Fits Go Train stories…..Fits some of the other character creations…..

Well, Me. Smith, er, Smoking Man it could really go either way to this casual reader.

How about creating a few entries by each moniker, and let the readership decide? The confession was too much to absorb in just one column.

#40 Mr Buyer on 11.18.12 at 11:10 pm

Medicine for profit
There has been some assertions in the past that privatization is the way to go with respect to rising (soaring more accurately) medical costs. Well I have been known from time to time to extol the virtues of Japan and appear at least on the surface to be an unlikely Japanophile. I know all too well the trite generalizations and have espoused them myself in my pre-Japan days and thus I am loath to offer up any criticisms of an obviously not perfect society. One particularly sore point is the medical system that is both cutting edge in technique and technology yet far from this from an administrative standpoint. In brief the billing system is set up such that doctors can only charge small fees for each visit but are able to charge for many visits for the same condition. This is the case for many but not all treatments and procedures (Cancer and Trauma care are as good as it is going to get anywhere for now). Case in point, I had a toothache some 7 weeks ago. I of course chose to ignore it for the first 2 weeks before giving in and going to see a dentist that proceeded to ‘care for’ my tooth for 4 weeks until finally taking an X-Ray and informing I had a cavity. After further informing me that I will need an unspecified amount of further visits to ‘care for’ the cavity I chose to decline the offer and found another dentist that cared for it in 2 visits. I am now going through the same caring for an eye infection that I am told is not an eye infection but rather dry eye that needs ‘caring for.’ These are the same symptoms I presented two years ago and was given same day treatment for viral conjunctivitis at the same clinic. I should point out that the clinic underwent a massive renovation and economics could possibly be impacting the diagnosis. A clinic that once provided same day care comprehensive care has now become a more ‘care for’ type of establishment. I have to return in 2 weeks to have the eye further ‘cared for.’ This is not only a huge waste of time but there is the question of leaving infections to run run their course (admittedly a good thing from a resistance standpoint in SOME cases). If in Japan and in need of medical care I would suggest finding a University Hospital with clinics. They are under strict guidelines and are limited in the amount billable for most procedures both by governmental bodies and by the University (mileage may vary). Economics have no place in diagnosis.

#41 Smoking Man on 11.18.12 at 11:10 pm

#40 Old Man on 11.18.12 at 10:54 pm

Would not happen today old man, everybody on iphone and smart phones. They don’t talk anymore on the train.

One night coming home from the duke half cut, I loaded a vid from redtube, a porno site, cranked the volumn.

I was sitting with 3 hotties in mid 20′s. Well I was shocked, I was just trying to get a raise out off them, gauge a reaction for a chapter in the book, and they knew the names of the porno stars and said the resolution of my phone was amazing.

WTF we were born too soon.

#42 Grantmi on 11.18.12 at 11:18 pm

#15 Randy on 11.18.12 at 9:18 pm
Won’t a lot of Boomers be forced to stay in their homes and get sucked into the reverse mortgage deal because they didn’t kick out their 30 year kids living in the basement and sell when they should have?

That’s the only radio ads you here any more on the radio stations in Hongcouver. Reverse mortgage companies.

#43 Mr Buyer on 11.18.12 at 11:19 pm

After thinking about it for awhile a scary thought dawned upon me. Imagine a world in which doctors ‘care for’ preliminary less lucrative stages of a disease in such a manner that the disease progresses to more lucrative and dire stages. In a word CORRUPTION.

#44 happy renter on 11.18.12 at 11:20 pm

Sad but true,renting is for the poor and uneducated fool. Thats what Canadians believe because of all the propaganda out there.
Any way all the countries in the world are debasing their currency over the last ten years.Go look at the price of gold and silver in 2001 and what it is today.Next year will be even higher and so on.Even Garth can’t be that niave and think it won’t with qe 1,2,3 to ifinity.History repeats itself just like in the l790′s in France and in the Roman times.So buy gold and silver and don’t worry about the short term manipulations by the bankers who got us in this mess in the first place.I’ve been buying gold and silver coins since 2003 and still buy some every month but mostly silver.

#45 LJ on 11.18.12 at 11:25 pm

Smoking man/Smith, doesn’t matter. It’s all a distraction anyhow…

#46 Hugh Jasz on 11.18.12 at 11:26 pm

#12 tkid on 11.18.12 at 9:08 pm
Where in God’s green earth is Trish commuting from that it takes her 2.5 hours to get into Toronto?…..

The hinterlands of near-905 can easily take 2.5h round trip if you’re talking door to desk time.

If I don’t leave early, my short 15km haul to North Toronto can take 25 minutes……or a miserable 40 minutes with hoofing it to the TTC.

If you’re doing something not abnormal, like, say, Whitby to downtown or Brampton to downtown you’re easily at a 2h+ average commute, GO, TTC, or car.

…….and the commute won’t get any shorter from East York. I’ve been to East York, you can’t from from point A to point B during rush hour without Grandma and her shopping cart on the sidewalk overtaking your car/bus ride.

Depends. East York certainly doesn’t move quickly during rush hour, but I pass through it one or two times a month for business. I can clear VP to Pape in about 15 minutes even during the worst of it.

If you’re within a couple minutes walk to a subway or to Danforth GO, and that’s your ride downtown, your commute is a damned sight shorter than most.

Bonus – if the TTC were to do a wildcat strike, or you get stuck in another three day blackout, you could actually walk or bike to and from downtown from many parts of East York.

If you’re driving, well, this area may be on the congested side, but as a starting point, it still certainly beats the shit out of the hinterlands!

#47 Mr Buyer on 11.18.12 at 11:29 pm

It seems the old derogatory mantra, got a problem take a pill has a flip side. Got a problem gargle with salt water and die from a treatable bacterial infection (a beautiful, pregnant 27 year old friend did just that ten years back in Canada because she knew how futile it was to go to a hospital emergency room without an open gushing wound. She was not medically inclined and thus likely did not know that her pregnancy meant her immune system would not cope with infection in the same manner as non-pregnant people and thus a triage nurse would hopefully take that into account).

#48 JustTryingToProtectEquity on 11.18.12 at 11:30 pm

#22 Smoking Man

Boring.

Church goer? Genius?

Does not compute.

#49 Mr Buyer on 11.18.12 at 11:48 pm

People should not even think about buying for 2 years. Some areas in Japan took huge nose dives three years after the bubble burst after seeing slight declines. It has been said on this blog it is like a slow train wreck but I like to think of it like stopping a huge container ship and turning it around. This is only the beginning and I have not seen anything in America yet that shows real estate is not in for the whole Japanese experience but I am not a prophet or even reasonably informed with an even remotely passable understanding of our situation.

#50 Ty on 11.18.12 at 11:50 pm

How on earth does someone have the ability to put down 20% on 400k properties after a few years each?

This is insanity. 100k here, 100k there.

#51 the_hundredaire on 11.19.12 at 12:01 am

This place is too close! This place is too far! This place is juuuust right.

It frightens me how little thought people put into buying a place. Of course RE agents don’t help the situation by pretending it’s no big deal to sign an offer on a house.

We need financial literacy courses taught in schools.

#52 Freedom First on 11.19.12 at 12:14 am

#22 Smoking Man

Smoking Man or Smith? I don’t think anyone will notice the difference after a while. You will still come through loud and clear as the same man.

#53 Grim Reaper/Crypt Speculator on 11.19.12 at 12:18 am

I gave DokTor Wanker a mulligan…still nutink

Uber Luuuuzer

#54 Julia on 11.19.12 at 12:20 am

Maybe Garth is Smoking Man. Maybe he makes up all the characters, everyone who allegedly writes to him. Maybe Garth is writing this.

#55 patiently Waiting on 11.19.12 at 12:20 am

White Rock Mom on 11.18.12 at 9:17 pm

Patiently Waiting, I have noticed that prices in South Surrey are slowly coming down although not enough for my liking. West Vancouver prices are falling off a cliff. I saw a sale go through for $275,000 less than offering. It was offered at $1,300,000. I would like to know who that buying agent was. Do you ave any information on West Vancouver properties priced less than $1,500,000?
Many Thanks,
Mom
===================================

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=1304321463&s=BRC&t=BRC

Originally sold in 2007 for $1,436,000
Assessed Value $1,422,000
Original list Price $ $1,568,000 (Aug 2012)
Reduced to $$1,488,000
Then reduced to $1,338,000
Finally sold for $1,260,000 (Oct 18th, 2012)

Hope that helps
Cheers
pw

#56 GTA Girl on 11.19.12 at 12:21 am

Being a female this is difficult to say..

Trish’s partner should be worried.

I’m sure it’s all sunshine and ponies, when Trisha is happily visiting condo sales centers or open houses in far reaches of Oakville/Oshawa. But she must be told to back off and sit down.

You don’t need to own to survive. Many Europeans rent, as do Japanese, hey…even New Yorkers!

Trisha needs a new fetish.

#57 Hugh Jasz on 11.19.12 at 12:24 am

46 Happy Renter – it’s easy to claim you’re a genius and be believed if you’ve been buying PMs steadily since 2001. Wondering if you really are a genius and have crystalized some of your paper gains.

Our gracious host never told you to shun metals.

He’s told you to keep them as a sane percentage of a balanced portfolio (his last book, I believe, suggested 5 to 15%).

He’s also suggested to rebalance and take profits periodically.

I think he’s also gone out on a limb to suggest that piling on to buy during the final runup to ~$1900 plus wasn’t really a very smart idea!

A couple of years ago, I was reading a few gold bug forums and getting tempted to make some big bets. As I looked at it, and worked out the detailed logistics of buying, selling, holding (if you’re betting on the end of the world, you need the yellow rocks in your hands……it’s an interesting storage problem!!)

Anyway, I figured the same thing out for myself – that going “all in” is dumb, but Garth puts it so much more eloquently.

#58 patiently Waiting on 11.19.12 at 12:24 am

White Rock prices are coming down, just taking a little longer than West Van and Vancouver West Side. I think that the correction in White Rock prices will pick up steam in the new year. There are many over leveraged home owners in White Rock (I have seen 2 and three, and some with even 4 mortgages) . . . it is only a matter of time . . . patience . . .

pw

#59 Interesting Times on 11.19.12 at 12:29 am

HGTV Virgins get out there and start low balling these realtards by 50 percent. Don’t waste your time going to open houses when you could just sit on MLS and low ball these used car salespeople by email. Get out there and get your revenge. Show them that you are not as stupid as the show protrays you!

- Europe already in recession/depression, Japan and US right behind them. This will have a negative feed back loop across the global economy.

- jobs being lost everywhere still and the Canadian economy is slowing down.

- austerity starting already in Canada. Many in government jobs will be bye, bye. Federal government last week fired over 10,000 workers in Ottawa and more to come!

- manufacturing jobs have moved to Asia and back to the US.

- 70 percent of CDN living pay cheque to pay cheque and have no savings and over 50% have no pensions

- 60% of boomers 60 years and older entering retirement in debt

- empty condos being built everywhere and will be going for 50 percent off soon.

- empty homes all over the MLS, can you say power of sales have started

- for lease signs everywhere in business districts and commercial areas, I guess business has moved away from Canada

- Canadians are 163 percent in debt! More than the US, Ireland, and UK when they had there crash.

- Over 6 months of dropping RE sales. Next thing to drop will be prices by 50%.

- over 60% of mortgages in Canada are 5% or 0 down CHMC mortgages. Can you say high risk and backed by the taxpayer. When this baby blows up kiss your social services good bye. This is what the in action plan looks like. We supported our banks with free taxpayer dollars to give out loans to people with no money creating a RE ponzu scheme.

- And remember a home is only worth what a buyer will pay.

- the realtards, brokers, banks and builders are in full out panic

The 50 percent crash is here my virgins. Get out there and start low balling as the time is now for your revenge. Don’t sign up for bank slavery like the other 70 percent of the virgins in Canada. They are screwed for life now as they were sold the Koolaid by the RE industry!

#60 rentin on 11.19.12 at 12:30 am

Without people like Trish, there wouldn’t be wealthy people.

Thanks Trish.

#61 Hugh Jasz on 11.19.12 at 12:38 am

Oh, and further to post no. 48 of mine, I laugh at the long distance commuters.

Few that I talk to will admit that it’s anything longer than 45 minutes each way.

Hehe!

I have done the run from North 905 and near 705 many many times.

I know exactly how long this took me ten years ago when there weren’t as many tax-wage slaves making the drive.

I also know what it cost me in fuel and maintenance……..and that was back when I was driving a gas-sipping Kraut sedan, and when premium was only at a $0.56 a litre or so.

Anyway, I haven’t retained as much wisdom as I’d like , but I’ve picked up a few gems:

-It’s nice to have a McMansion on a 50′ or wider lot in the hinterlands, and fewer ethnics in your neighbourhood, but this is drastically overrated.

-Commuting long distances sucks

-If you base a financial assessment of the benefits of living close to work versus far way AND you base this on the real costs of commuting , you can almost carry the premium in property price closer to the city.

-Time is irreplaceable and it’s dumb to waste lots of it in a car, GO train, or both. I found that it was better to live close, so I could put in a little bit of extra time while my schmuck colleagues were just stealing oxygen on the highway. You’d be amazed how much happier clients are if you spend an extra hour per day on them, and what this can do for your career prospects.

Anyway, that’s enough ranting.

#62 meslippery on 11.19.12 at 1:08 am

#15 Randy on 11.18.12 at 9:18 pm

Won’t a lot of Boomers be forced to stay in their homes and get sucked into the reverse mortgage deal because they didn’t kick out their 30 year kids living in the basement and sell when they should have ?

Make your 30 year old kids YOUR reverse mortgage.
Or no soup (Wealth ) for YOU.

#63 Humpty Dumpty on 11.19.12 at 1:12 am

Only a fool put his trust in man…..

http://www.rawstory.com/rs/2012/09/17/former-justice-souter-pervasive-civic-ignorance-in-u-s-could-bring-dictatorship/

http://www.cnbc.com/id/49117901/Dalio_Fears_Social_Unrest_That_Led_to_Hitler_s_Rise

Envy is no excuse for ignorance…

#64 Soylent Green is People on 11.19.12 at 1:19 am

Trish does not know the value of a dollar. Whats the point of working only to throw it all away, what a wasteful way to live, paying taxes to Harper who gives it to israel to use to kill Gaza children. Shame on all of consumer stoopid sheeple canada

.

#65 TimV on 11.19.12 at 1:21 am

#34 eddy: disagree; anecdotal evidence is always cute, but the numbers I’ve gathered show that comfortably fewer than 50% of places go for over asking now. Crash? No. Change in momentum? Yup. Especially for detacheds, which have been a weaker market all summer.

I suppose it might be interesting to break-out over vs under for houses < 500k to see entry-level homes specifically.

I do agree that Trish seems to have a bit of wishful thinking regarding the magnitude of the momentum change, though.

#66 Old Man on 11.19.12 at 1:36 am

#56 Julia – I will take your observation seriously, as am a member of an uncensored rant room, and Smoking Man would go into a state of shock just to see what the women have to say, as he would have a heart attack about it all. You women can start more rumours in life than Niagara Falls, but when all is said and done how did you guess correctly, or wrongly? I would love to invite Smoking Man into my private rant room some day to meet the ladies from Canada and USA; as they are a wild bunch, and are waiting at this late hour for me to make my appearance. Oh this is going to be a wild time, as anything goes.

#67 agent.smith on 11.19.12 at 1:40 am

Smoking Man -

I am the real Smith.

#68 Roial1 on 11.19.12 at 1:44 am

#35 Fabrega on 11.18.12 at 10:24 pm
Are you talking about Vancouver Island? If yes, you must be a realtor. The island is still grossly overpriced. People are still asking $400,000 for tear downs. Ridiculous.

Just was going over the local paper here on the mid island and the prices are showing some substancial drops.
Not on all that many so far but it is showing. No prices are going up thats for sure.

#69 tigerbaby on 11.19.12 at 1:45 am

> My real name is Smith …

!! I was sure that the real smoke is a zit faced WOW warrior who hails from some obscure internet cafe LOL

I guess what they say is true … don’t judge a troll by the grammatical errors

#70 Waterloo Resident on 11.19.12 at 2:02 am

The problem with price in the Toronto area is that people simply WON’T sell for less than they bought for.

THAT’S THE FACT.

So the only time you can get a sale is when people lose their house to the bank.

When you hear that average home prices have dropped 10%, it simply means that there are more LOW-PRICED / smaller houses selling instead of the larger houses selling, it does not mean that the prices of the homes themselves have dropped.

In other words, PRICES ARE STICKY. They are stuck with crazy-glue, and are just about IMPOSSIBLE to move down, that’s how it is here in the Toronto area.

#71 new canadian on 11.19.12 at 2:04 am

#27 Tim
Toronto (2.5 mil) traffic is much worse than NYC. (18 mil)
It’s the PEOPLE!
It’s road construction planners!
It’s Police, who will close WHOLE highway for 6 hours to investigate a simple crash.
It’s those recorded here: http://leftlaneidiots.yolasite.com/
It’s drivers who can barely walk without a stick but drive.
It’s ME who stopped signalling before changing lanes. I found it very useless, after driving in Halton and Peel regions. You feel like 1% somehow. Also noticed, even US-plated cars quickly adapt to this weird driving system.

#72 Patz on 11.19.12 at 2:18 am

The word is comin’ further down the mountain, Garth. I had a talk with my mechanic whose wife is pressuring him to buy a house, their first, in New Westminster (Greater Vancouver). I gave him a shake and your url. Rest is up to you!

#73 Alberta Ed on 11.19.12 at 2:24 am

Apparently builders in beautiful Sidney-by-the-Sea, BC, (until the Big One hits any day now and drastically adjusts property values downwards) haven’t got the news yet. They’re still throwing up Texas doghouses and asking $500k+. Sidney’s renowned as the “City of the nearly dead and newly wed”, but I doubt that either are likely to cough up half a mil for a condo with no view, below the tsunami line.

#74 Gunboat denier on 11.19.12 at 2:26 am

35 Fabrega – you can buy brand new on the island for $400K.

#75 westcanguy on 11.19.12 at 2:27 am

Crash or no Crash, Smoking Man or Smith?

Do you really think there are enough people on here who really care? Get over yourself.

#76 TRT on 11.19.12 at 2:30 am

San Francisco and Bay Area housing are prices are Super-High.

Small Houses without a Lot going for $900,000 —- 80 km from downtown San Fran in the worst areas of san Jose. After going to a few developments, building activity picking up massively. Pre-sales happening again. Who can afford $900,000 houses? and this is at the bottom of a crash.

Goes to show that income to house price ratios are irrelevant in land constrained cities. Vancouver is very similar to San Fran’s Bay area although much smaller.

#77 Van guy on 11.19.12 at 2:32 am

Only 11 sfh sales so far this month in Richmond lol!

8100 Elesmore rd
list 965k
reduced 859k
sold 800k after 101 dom
assessed 958k

4851 Foxglove Cr
List (HAM pricing) 988,888
reduced 808k reduced 798k
sold 738k after 202 dom
assessed 1,049k over 300k below assessed!! how is this not a crash?

11731 Yoshida Ct
list 758k
reduced 738k
sold 680k
assessed 743k

6731 Dunsany Pl
list 939k
sold 886k
assessed 1,100k

3411 Barmond ave
list 1,398k
sold 1,209k
assessed 1,371k

8151 Dalemore Rd
list 1,599k
sold 1,505k
assessed 1,769k

These few sales are all from long time owners that bought all before 98′. These owners will control the market as they will discount the most and tank this market further down the drain. If you bought after 2005, watch out, the equity thief is on the prowl

This is also indication that the smart baby boomers are now selling their homes in order to pay for retirement. 33% of Canada’s population are geezers and Garth has been warning about this for quite some time.

#78 DML on 11.19.12 at 2:38 am

#62rentin
“Without people like Trish, there wouldn’t be wealthy people.”

Wrong,wealth creation is not a zero-sum game.

#79 Robert on 11.19.12 at 3:09 am

Friend of mine is a teacher working in Surrey, wife is clerical working on contract for the Feds. Living in a townhouse and want to upsize but can’t sell the townhouse because there’s a legal action on the complex from a owner with a roof leak. Solution, rent the unit for the time being, get a half million 5% down mortgage for a 3 bedroom Ladner box from their friendly neighbourhood credit union (it’s in the wife’s name as the townhouse is hubby’s so she qualifies as first time homebuyer). Oh, and the downpayment is coming from their combined LOC. I know them well and they are living paycheck to paycheck already. There is still 200 large on the townhouse mortgage, so their combined debt will be 650 when all is settled. Just one layoff away from financial disaster courtesy of CMHC and lax lending. It’s not over yet when money is still being ladled out.

#80 TRT on 11.19.12 at 3:18 am

Don’t expect a return to the mean with regard to prices in Vancouver or Toronto. Here is a graph of a suburb in San Diego. Correction followed by a plateau (melt if you factor in inflation).

But still much higher than 10 years ago. Much higher! and this at a time when RE has no where to go but up since the US crash is over.

http://www.zillow.com/local-info/CA-Coronado-home-value/r_17587/

Again, nothing to with incomes. Believe it or not.

#81 InLimbo on 11.19.12 at 3:42 am

I’ve lived in the Finl District for many years (though not for much longer). The reason I chose to live downtown was because of the soul rotting commute from the 905 to downtown (at one point it was from far North 416 to downtown which was still about ~1 to nearly 1.25 hours one-way IIRC). I figured it was best to be ridiculously close to a place where you have to be at at a certain time (work)…and every other destination (personal/family) doesn’t matter as much for timeliness.

I’ve taken 905 transit (Hwy 7) to downtown a few times outside of rush hour in the past few months and it is pretty much a 3-hour roundtrip.

#82 Buy? Curious? on 11.19.12 at 3:48 am

Smoking Man 22, Don’t lie. I know exactly who you are! Why of all moments would now try to reveal yourself? Let me paint a clearer picture of who you are to the readers here, and I swear to God I know who are. So much so, that I will even send you something in the mail. Garth, may I? Thank you.

You’re 5’8 and half, 5’9 if you wash and blow dry your hair. You’re stocky but in an Ed Asner type of way. You smoke but not cigarettes or weed (legalise it!) you smoke cigars. Your wife left you about 15 years ago, probably because of the drinking. Even the nicest of drunks can have the occasional bad night and considering how much you drink (And people he does drink as much as he says) you’ve had more of those than most people have hot dinners. You’ve gone on a few dates but nothing lasts, nothing long term. Your boys, I don’t think you spoke much of them. You weren’t around for them much because of work and booze. They weren’t as smart as you hoped they’d be. You’re kind of smart. You worked as a Project Manager at IBM but were laid off in the mid 90′s. You worked there for years but because of the hangovers, the bullying and the changing demographics at the Markham campus, you were offered a package to leave. You do live along the Long Branch, near the lake.

Expect some mail.

http://www.youtube.com/watch?v=DHpluwP328A

#83 Nubbers on 11.19.12 at 3:52 am

Harsh words, but true. Best to sell everything up and take the pain now, rather than hold on and make bigger losses and very long term pain.

I notice everyone is hung up on the 2.5 hour round trip. That is nothing in the South East of England where I am now. The longest daily commute I have personally ever come across is Isle of Wight to the MoD in London – car, ferry, train, tube (that’s subway to you).

Can’t wait to get back to Toronto and have a life (no, really, there are a lot worse places to live).

#84 Rural Rick on 11.19.12 at 4:05 am

Smoking Man the story smith
Kudos amigo

#85 Canuck Abroad on 11.19.12 at 4:32 am

Trish says “…The condo has finally gotten to the point of breaking even with the tenant, and selling it and walking away with a mortgage owing isn’t going to happen…”

Trish, how did you determine your condo is breaking even? I’m guessing you’re talking about only your monthly carrying costs? If so, that’s not breaking even. And don’t assume that will continue, with the flood of units coming onto the market over the next few years which will drive up vacancies and drive down prices and increase your risk of rental voids. If your crappy little condo is too small for you, what makes you think other people will be willing to overpay to live there?

Why is selling the condo and walking away with a mortgage owing not an option? I’m guessing you mean you are underwater and don’t want to write a big check to get out of your mortgage. But why not? You clearly have the cash, if you are willing to sink funds into yet another property? Getting out of your condo now is called “cutting your losses”. Go for it. Briefly painful, but wildly instructive, and you will sleep better.

Is renting beneath you? You don’t want to “throw money away on rent” just like you don’t want to recognise a loss on your condo? You will need to get past that, because now you are stuck with hundreds of thousands in unwanted realty, just so you don’t have to admit you screwed up. Twice.

If you are going to move AGAIN, at least move very close to your jobs. Is East York really close? RENT somewhere really close and a nice size in a decent building. Two bedrooms so you can use one as an office and have guests visit. Older buildings are much more spacious, so consider that as an option. Don’t be cheap about this or you will just want to move again (but trust me, moving from a rental is easier).

Then sit down and do up a little spreadsheet of all the money you have pissed away over the last several years on your doomed real estate ventures, and thank your lucky stars you are (a) renting and (b) young enough to recover and move on.

#86 live within your means on 11.19.12 at 4:59 am

Always amazes me that people who say they have read Garth’s blog for some time ask him for advice. I guess their reading comprehension is totally lacking.

When we bought our current home 21 years ago, we definitely took into consideration commute times. We looked at some homes further away from the city, but considered commute times, gas costs, etc. We couldn’t travel together as I worked downtown and DH in another direction. I ended up selling my car I loved to a bro. & travelled with my cousin’s husband to the ferry & then walked 5 mins. to work. One day I found out at the last minute he couldn’t take me & his other passengers home. It took me 1-1/2 hours to get home because of transfers & our lousy bus system. Me in my high heels, business suit & a heavy briefcase walking up a fairly steep hill from the bus stop in the heat of summer. I screwed up & didn’t investigate the bus system. That eve I told DH I’m buying a car. I lucked out. I always managed till the day I retired, to find really cheap parking downtown. One couple I knew owned a condo < 5 min. walk to work with a parking space outside. They didn't have a car & refused to let me pay them for the spot. At Xmas, I always gave them a beautiful gift & bought them a few drinks when a group of us got together Friday after work at a local bar downtown. Unfortunately, most of the group are now deceased & were older than I. Have some great memories of our times together.

My nostalgic rant for the day.

#87 Richard and Zeus on 11.19.12 at 5:56 am

The three bedroom condo we own is almost done. Putting in new bamboo floors and tile. Putting up some nice matte pics and mounting the tv on the wall.

So glad we sold the cash sucking house in the country. $1100 pre tax a month just to live there with taxes, insurance, garbage, heating and maintenance. Thats before the mortgage. It was a 550k house. Big deal.

Well the corporates and Guvmints can go f$$k themselves. We’re not paying into that money sucking hole anymore….those pencil pushing guvmint werkers kin find themselves a new way to suck taxes from us…..cz it ain’t cuming frum our house no more yuk yuk !!

#88 I'm stupid on 11.19.12 at 6:59 am

#27 Tim on 11.18.12 at 10:00 pm

2.5 hour travel time is not uncommon in the gta. Friends of mine (a recently married couple) bought in suburbia. She works downtown and travels by go bus. The commute its about 2.5 hours round trip. It is putting a strain on the marriage. Imagine how hard life is if an 8 hour work day translates into 10.5 hours then having to go home and do house work. This is not life, it’s insanity.

#89 housedoc on 11.19.12 at 7:53 am

#74 Robert
“Solution, rent the unit for the time being, get a half million 5% down mortgage for a 3 bedroom Ladner box from their friendly neighbourhood credit union (it’s in the wife’s name as the townhouse is hubby’s so she qualifies as first time homebuyer).”
————————————————————
WRONG!
5 year rule applies to spouse as well.

#90 eagle eyes on 11.19.12 at 8:02 am

#79 Van guy on 11.19.12 at 2:32 am

Thanks for all the data on Richmond Sales this month. Although the prices are much lower than asking or assessed, do you really believe that those houses deserved a range close to one million dollars? Swamp-land, ditches, earthquake liquification zone, flood-plains, farmland? ONE MILLION DOLLARS? 11X average income is crazy. It won’t be normal until prices drop 50% from today.

Is renting really all that bad? Yes it is. If you have a family, it is difficult to move every year or so. Generally, most people look down on renters. Don’t have a sense of stability. Would I buy a house at today’s nosebleed prices because of this? Absolutely not.

#91 live within your means on 11.19.12 at 8:19 am

#89 Richard and Zeus on 11.19.12 at 5:56 am

Doesn’t matter where you live, SF house, condo or rental, you’ll always have to pay property taxes.

#92 House Horny Housewife on 11.19.12 at 8:40 am

Wow Garth,

Did you make that up or is Trish a real person ? If Trish is real than heaven help her. That’s what I call impulsive buying. However, unlike a pair of boots, this is a huge chunk of change she is risking.

Trish, honey, have you ever thought of simply selling everything for the best price that you can get and just renting in the area that you want ? In addition to what Garth says, this is also a great way to get a “feel” for the neighbourhood and what it would be like to live there. Don’t be in such a rush to buy something and don’t settle for anything but what you really want.

When it comes to properties, compromising translates to unhappiness and dissatisfaction later on. I am not saying that you should be unrealistic about what your budget can buy, but be demanding and if that property that you are looking for isn’t out there right now for the price you can afford, then wait for it.

It took my husband and I over 2 years and at least 50 visits (if not more) to find our current property. Not to mention having our hearts broken because we had to walk away from a deal or risk getting screwed (we walked). I was ready to give up and simply stay put when our current property came on the market at a decent price and we moved quickly to snap it up. Despite my intense desire to move out of the city and leave a more peaceful life, I was not willing to get screwed by greedy sellers or get talked into something by agents who had no idea what we wanted. I knew what I wanted and what I was willing to pay for it. You should too, Trish, so seek this out in yourself first.

Rent a place in the neighbourhood that strikes your fancy and if after one year you really think that it is for you then start to study that market carefully to get an idea of what properties there are worth. Study sale prices and not asking prices and see what your budget is capable of buying you. Whatever the bank says you are capable of supporting, cut it by at least 30% and that is really what you can afford.

And for heaven’s sake, look at the property as well as the house. Yes the house is important as it has to fit your family’s lifestyle but a lot of things in a house can be changed whereas many property attributes cannot. Of course be sure to get that inspection and hire someone who is competent .. nowadays anyone and everyone is calling themselves a house inspector. If you have a contractor that you trust, use him (or her) instead of someone you found in the yellow pages.

Do your homework and know what problems are possible with what age of house. An old house can be beautiful to look at but it can also come with major electrical and plumbing issues that need to be updated and most likely has no drainage around it (meaning a finished basement in a 1920′s home should be investigated) .. may also have asbestos issues etc.. Older homes need a lot of love and attention. Newer homes have other issues that may not show themselves until a decade after they are built … builders nowadays are none too bright and build anywhere, not thinking about drainage and foundation issues or proper sewage line placement etc..

You see how much more complicated it is buying a property ? You cannot simply pick one up on your way home one day ? Renting is so much simpler. You don’t like it, you move and transfer your lease onto someone else. Buying isn’t for everyone Trish .. it is a huge committment, an investment of your time and money which can cause much anxiety sometimes and I would even go as far as to say a labour of love because most of the time, you will not get back what you paid into it.

Think long and hard about it Trish …

HHHW

#93 live within your means on 11.19.12 at 8:43 am

When I bought another car & parked downtown I was lucky enough to be on flex hours. Left the house at 6:45 am, got a coffee, read part of the the paper in the food court & started work at 7:30 am. Was the first one in our office. Left the office at 4 pm to avoid major traffic.

#94 House Horny Housewife on 11.19.12 at 8:45 am

Uhmmm … oops, I meant I wanted to “live” a more peaceful life and not “leave” a more peaceful life .. obviously city living in definitely not that peaceful is it ? (albeit more convenient).

HHHW

#95 Victor V on 11.19.12 at 9:26 am

http://www.thestar.com/business/article/1289698–trump-tower-developer-suing-7-disgruntled-investors-to-close-deals-they-now-regret

Dozens of purchasers of suites in the 65-storey luxury hotel are now trying to get deposits back and renege on final payments averaging over $500,000.

Other buyers, some too frightened of the legal ramifications to walk away from deals penned up to seven years ago, say they are finding themselves in a crippling Catch-22 — unable to sell the units or secure mortgages on balances due to Talon Nov. 29.

“One mortgage company asked me, ‘How could I give you a mortgage on a property that is losing money every single day?” said one devastated buyer, a blue-collar worker who borrowed the $175,000 down payment from his immigrant parents and owes $750,000 at month’s end.

“It’s very scary,” says the GTA resident, one of about a dozen investors who spoke to The Star on condition their names not be used.

Most were caught up in the get-rich-quick mentality of Toronto’s booming condo market and intended to flip the units or use them to generate retirement income.

Talon has been facing an escalating buyer revolt since last February as the glitzy Trump Hotel set to open and buyers found out that maintenance fees, property taxes and other incidentals on the project’s 276 hotel-condo units had skyrocketed from Talon’s earlier projections.

================

Sometimes, greed does not end well.

#96 live within your means on 11.19.12 at 9:29 am

Another rant. Years ago I worked in IT. Our govt. spent millions on DMR’s Systems Methodology (now called Macroscope – http://en.wikipedia.org/wiki/Macroscope_(methodology_suite)/.

Boss & I went to Minneapolis to learn Systems Engineering product for 3 days. Both of us were totally lost. Neither of us had ever used a mouse. Believe most in the class were lost too. When we got back to the office we had a mouse & the largest monitors in the govt. Our govt chose the worst (huge) project to test the methodology & software. I was part of it, but had a hard time as I had never been a programmer. The smallest detail of a process had to be documented. We spent 2 – 3 years on it & then I ended up supporting & teaching SE to govt techs. Unfortunately, Systems Engineering couldn’t do reverse engineering then so the govt scrapped it after having spent millions on it. I think the govt. scrapped DMR’s methodology too.

#97 Eaglebay - Parksville on 11.19.12 at 9:57 am

#75 Alberta Ed on 11.19.12 at 2:24 am

The ‘big one’ will not hurt Vancouver Island which is a solid rock.
Richmond and Surrey are a different matter.
And no tsunami. A tsunami would roll away from the Island.

#98 Eaglebay - Parksville on 11.19.12 at 9:59 am

#76 Gunboat denier on 11.19.12 at 2:26 am
35 Fabrega – you can buy brand new on the island for $400K.
__________________

Try $300K in the Oceanside area.

#99 refinow on 11.19.12 at 10:12 am

Maybe Smoking man is Garth. Did anyone tug on Garth’s face after his Toronto Gig. Like a scene from Mission Impossible.

#100 Toronto_CA on 11.19.12 at 10:15 am

#82 TRT on 11.19.12 at 3:18 am

Are you really correlating the home prices on a tawny island in San Diego with gorgeous beaches to the entire GTA and Vancouver?

You see nothing wrong with that? You’re normally smarter.

#101 Canadian Watchdog on 11.19.12 at 10:20 am

GTA REALTORS® Release Mid-Month Resale Figures

“The stronger rate of growth for the median selling price suggests that fewer high-end homes sold this year compared to last.”

Since when does TREB report median prices?

#102 refinow on 11.19.12 at 10:26 am

This weekend I saw the most clear and concise evidence of the Bubble has in fact burst.

Mortgage Broker in Burlington with more than 23 years in the industry, with a “For Rent” sign on the lawn of her own office Unit.

If that doesn’t scream volumes??

#103 Toronto_CA on 11.19.12 at 10:35 am

How long is the TREB going to beat that land transfer tax dead horse…the sales are not declining double digit percentages in the Fall of 2012 because of a tax that came into place over 5 years ago.

#104 Ralph Cramdown on 11.19.12 at 10:38 am

Since when does TREB report median prices?

Since they don’t want you and the press to notice that sales are down 27% YoY (same number of weekdays) in the 416, with YoY prices down there, too.

#105 SS on 11.19.12 at 10:45 am

Went to the Mattamy homes opening for The Preserve in Oakville this past Saturday. The place was a zoo. Pricing has gone up quickly as the line increased. It was not cheap compare to other resales in Oakville. Not sure why people are going crazy on this.

#106 Gord In Vancouver on 11.19.12 at 10:48 am

Even more proof that Garth was right….

http://www.theglobeandmail.com/report-on-business/economy/housing/flahertys-rule-changes-will-bite-hard-mortgage-brokers/article5410889/

#107 Jim on 11.19.12 at 10:52 am

Good lord, I wouldn’t buy a car with the lack of research that Trish manifested. Buy a car, find it doesn’t suit your tastes, buy another, find it is unreliable and needs frequent repairs, buy another….

Who in god’s name does this with housing? Don’t people realize that the transaction costs involved in housing can eat up significant amounts of money? (I don’t say ‘significant amounts of savings’, because no one saves anymore)

#108 Jim on 11.19.12 at 10:58 am

72,

“In other words, PRICES ARE STICKY. They are stuck with crazy-glue, and are just about IMPOSSIBLE to move down, that’s how it is here in the Toronto area.”

Saying something is impossible is generally a bad idea, because it is very likely to be wrong.

There’s little evidence Toronto prices are stuck with crazy glue. Give it time. I have more faith in comparing Toronto to past asset bubbles than in metaphors like crazy glue.

#109 Franke le Skank on 11.19.12 at 10:58 am

Unfortunately, Toronto is plagued by poor/lack of planning when it comes to highways. All North East gets funnelled onto the DVP which bottlenecks into 2 lanes at the 401, then add all traffic from Durham and beyond. To the West, you have one option for highway access downtown, the Gardiner, everybody pile on and good luck getting to it. On top of TO’s poor highway planning, the Transit is expensive and inefficient unless you’re close to the subway. Yes its to easy to criticize and complain, but those are the facts and the population in this city is only getting bigger and I don’t see any new highways being planned. Lots of TTC talk but those plans will take over a decade to materialize. Lets keep building endless sub divisions without expanding out highways.

#110 White Rock Mom on 11.19.12 at 11:00 am

Thank you Patiently Waiting for the encouraging words. I have been waiting four years to get back into real estate. I just want a stable home to raise my children. Having to move last year because my landlord sold the house, I always worry the same thing will happen again. West West Vancouver is starting to look more attractive the me. The prices are lower the farther west you go but the commute down town is still half as long as from South Surrey.
Thanks again,
Mom

#111 GTA Girl on 11.19.12 at 11:02 am

Trump Tower Toronto disaster:

http://www.thestar.com/business/article/1289698–trump-tower-developer-suing-7-disgruntled-investors-to-close-deals-they-now-regret

The beginning of the ponzi scheme’s tumble.

This project like many Toronto projects was a problem from beginning.

Many condo/hotel projects have unpaid trades entering litigation, shady offshore investor clusters..and subtrades who were shoddy and skimmed over codes.

It’s why when you go to RITZ Carleton, Trump, Thompson Hotel/condo, you ask yourself… “For this amount of bucks, why does the whole place look like big white dry walled rooms w/bad tiles, floor jobs”

I’m hearing that the Four Seasons problem may surface in next while.

The poor investor who is a labourer w/retiree parents, is one of those schmucks that got dragged in by a developer conman.

Condo’s aren’t investments. Haven’t been for last 4 yrs. it’s a place where the stupid, the corrupt park their money.

#112 Jeff in Moose Jaw on 11.19.12 at 11:07 am

#22 – Smoking Man,

Smith – who’s that?
Life’s one big project man (stoner laugh), why live it being Smith, when you can be a Smoking Man?
Much rather classic Smoking Man, than classic Smith.
In regards to today’s post, good luck Trish, living life in the fast lane.

#113 Daisy Mae on 11.19.12 at 11:19 am

27Tim: “a 2.5 hour commute? Come on Garth, you make this stuff up”

An hour each way is not uncommon in the GTA. — Garth

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

Lower mainland drivers in BC face the same long commute — to/from work via the Lougheed Hwy.

#114 Dave99 on 11.19.12 at 11:21 am

#82, TRT, you wrote

“Don’t expect a return to the mean with regard to prices in Vancouver or Toronto. Here is a graph of a suburb in San Diego. Correction followed by a plateau (melt if you factor in inflation).
http://www.zillow.com/local-info/CA-Coronado-home-value/r_17587/
But still much higher than 10 years ago. Much higher!”

***
I took a look at that link, and prices are currently about 35% higher in nominal dollars than 10 years ago. But if you adjust for inflation, then the price increase over 10 years is only 10%.

#115 };-) aka D.A. on 11.19.12 at 11:21 am

Trish;

I’m not offering advice one way or the other but; of all the properties I have ever owned and subsequently sold because I thought, for one reason or another, I had to; there isn’t one if I could do it over again I wouldn’t have held on to instead. Of course every property I ever bought I did carefully research myself and made sure I employed the services of trusted advisors I was confident were looking out for my best interests.

Could it be you have and continue to be too impatient?

Before succumbing to Garth’s castigation and following his advice;

You ask when Toronto prices will fall so you can do it all again. That’s not the right question. Rather, ask, how can I rescue my financial future from my own appalling decisions?

The easy answer is to dump the condo before the market deteriorates further. Sell your moose pasture house if you can escape with your downpayment intact (or even a small loss). Rent for five years and repair your finances by saving and investing. Reflect on your stupidity, catalogue it, and swear to learn from it. – Garth

be a big girl and ask yourself instead you might not be better to just hang on to what you’ve got rather than selling, at a loss, and trying to recoup while paying five years of someone else’s mortgage when you’ve got a renter doing that for you now.

Maybe you made some mistakes, maybe you didn’t. Certainly if you were to sell now you would be crystalize the former rather than taking opportunity to possibly realize the later. Seriously, I’ve been where you are, done what you are contemplating doing and now wish I hadn’t.

Neither Garth nor I have a crystal ball. That said Garth does at least reside and work closer to where you are in the Big Smoke while I live and play in Lotus Land a whole continent away.

#116 Junius on 11.19.12 at 11:25 am

#72 Waterloo Resident,

You said, “The problem with price in the Toronto area is that people simply WON’T sell for less than they bought for.

THAT’S THE FACT.”

Really? Is this because it is capitalized. Does that mean you wrote in crayon?

People will ultimately sell for what the market offers. They may list and re-list but eventually those who must sell will force the prices downwards. This is what has happened everywhere.

#117 Junius on 11.19.12 at 11:30 am

#78 TRT,

You said, “Goes to show that income to house price ratios are irrelevant in land constrained cities. Vancouver is very similar to San Fran’s Bay area although much smaller.”

Actually goes to show that you are incapable of an objective analysis of anything. The average price of a home in San Francisco is still below $500,000. Why is it so much lower than Vancouver when it is the centre of one of the greatest job creation regions in the US?

You are all hat and no cattle. All agenda – pump, pump, pump.

#118 Regan on 11.19.12 at 11:37 am

Trish – I second the comments on others that you should test drive a neighbourhood by renting in a specific area and taking your time to look for a house – preferably escorted by a cynical misanthropist who hates realtors and thinks everything at Costco is still overpriced crap. You seem to have a hard time figuring out what you want – first a place that’s too small and then a terrible location. But… size and location are pretty much the most important things in a home, so it’s a big red flag that you didn’t notice that. The worst thing you can do in any market is churn through properties and incur so many fees and taxes. Even in a rising market, the profits get eaten away. In a falling market, it’s just so much more painful
Sell your places, settle your accounts and find a place to rent in your target area to see how it goes. After 6 months assess what you’d like in a long-term home and gently begin looking at real estate porn again with intermittent cold showers. Be sure to consider a 10 year commitment, include the appropriate number of children to house and school and ask your partner (and cynical friend) for input. Good luck.

#119 Maiannus Ismaili on 11.19.12 at 11:54 am

Someone above says:

“………start low balling these realtards by 50 percent. Don’t waste your time going to open houses when you could just sit on MLS and low ball these used car salespeople by email………..”

Anyone else wondering if you are seriously suggesting to make offers this way?

Even if your stink bid gets accepted, you’re still offering hundreds of thousands without even frigging looking at a place.

#120 Have to Speak Up on 11.19.12 at 12:02 pm

#66 Soylent Green

Garth, please ban the racist comments from Soylent Green regarding Israel. They are very offensive and have no place on a real estate blog.

You said a couple of days ago,

“There will be no further posts on this topic. — Garth”,

and yet here he goes again.

#121 Bottoms_Up on 11.19.12 at 12:05 pm

Trish, you can benefit by going against the herd. Houses within a 45 min. commute to downtown T.O. will likely hold value, because people will not put up with 2.5 hr commutes! If prices have come down in a nice commutable area, that’s probably a blessing. Those places will likely hold up better than the outer burbs?

#122 Penny Henny on 11.19.12 at 12:07 pm

to-#98live within your means on 11.19.12 at 9:29 am

SNORE.

go bother your neighbours or something.

#123 Daisy Mae on 11.19.12 at 12:08 pm

#99 Eaglebay: “The ‘big one’ will not hurt Vancouver Island which is a solid rock.
Richmond and Surrey are a different matter.
And no tsunami. A tsunami would roll away from the Island.”

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

Tell us more. WHY would a tsunami ‘roll away from the island’?

#124 Mister Obvious on 11.19.12 at 12:34 pm

#92 eagle eyes

“Is renting really all that bad? Yes it is. If you have a family, it is difficult to move every year or so. Generally, most people look down on renters. Don’t have a sense of stability.”
———————————–

I completely disagree.

I live in an excellent purpose-built rental building in downtown Vancouver. The building is about 25 years old. A few of the residents have been here since day one.

Many have been here 10 years or longer. Some have raised kids here. Most of the tenants I’ve met say they haven’t had a good reason to move. The building is sound, the management good, and the location great.

In Vancouver city today, it is superior to owning in every conceivable way.

#125 zeeman1 on 11.19.12 at 12:36 pm

Garth, I’m with Smoking man on this one.

People like Trish are so dumb they simply deserve to be bent over by the realtor and others and f&^%#d.

Wolves have no morals and rarely pass up easy prey.

#126 VINNY on 11.19.12 at 12:38 pm

” You ask when Toronto prices will fall so you can do it all again. That’s not the right question. Rather, ask, how can I rescue my financial future from my own appalling decisions? ”

VOW! POWERFULL COMMENT AND ONCE AGAIN MY HAT ARE OFF FOR YOU…..

#127 Junius on 11.19.12 at 12:44 pm

#113 GTA Girl,

I had a meeting in the bar at the Trump Tower last time I was in Toronto. It was over priced, tacky, cheesy and empty. Much like Donald Trump. I notice that the daughter is on all the marketing instead of the Bloviating One himself.

Vancouver has the Residences at the Georgia. Now Toronto has the Trump Tower. It keeps adding up.

#128 Junius on 11.19.12 at 12:56 pm

#82 TRT,

This post is another one of your classics in cherry picking facts and extrapolating information to try and prove something that does not exist.

Coronado is a small, affluent community of roughly 25,000 people outside of San Diego. It is very rich and the housing prices are 3 to 4 times those of nearby communities as a Zillow.com search will easily prove.

Regardless, the prices of homes in 2004 averaged $964K and in 2012 were $906K. They have dropped in the past 8 years. Using 10 years as you do is deceptive.

All this proves is that the homes for the 1% will fall less than the homes for everyone else. You can’t extrapolate this to include all of Vancouver of Toronto anymore than you can for all of San Diego.

You are relentless and wrong. Again.

#129 refinow on 11.19.12 at 1:01 pm

http://www.canadianrealestatemagazine.ca/news/item/1433-top-3-reasons-buy-an-investment-property-now

One of the most common catch phrases, veteran investor Paul Kondakos hears from Canadians reluctance to invest in real estate is “It’s not a good time.” Ah, but it is, he writes in this Top 3 list of reasons to commit.

I can’t believe that they keep allowing these articles to be written. Are people really that stupid.

#130 Bottoms_Up on 11.19.12 at 1:09 pm

#45 Mr Buyer on 11.18.12 at 11:19 pm
—————————————–
That’s already happened/happening in a sense. Why isn’t smoking banned? Why aren’t underagers charged for smoking? Why was physical education banned from schools? Why is pot inching toward legalisation?

It’s been proven these things lead to less healthy adults, and the cost to the healthcare system is horrendous.

#131 Southern Ontarian on 11.19.12 at 1:10 pm

#122 Have to Speak Up on 11.19.12 at 12:02 pm

Nothing that was posted in comment #66 was racist. It may or may not have been correct, but it was most definitely not racist.

#132 Linda Pearson on 11.19.12 at 1:20 pm

#124Penny Henny on 11.19.12 at 12:07 pm
SNORE.
go bother your neighbours or something.
*****************************************

As opposed to your own sterling contributions? Get real; you’re not that interesting.

#133 JB on 11.19.12 at 1:22 pm

I can´t help to think that you have to invent these emails. Is it even possible that someone who claims to read your blog even thinks like Trish? I mean even realtors themselves know what is going on there. Condo situation in Toronto is an unstable cocktail that is going to explode. Or implode.

It is sad that you hear about those people who still think they would sell 30k down from what they paid. I would say that rather 20-30 %. Yeah the official statistics say that the price has not even dropped. But we all know it is a desperate intent from developers to maintain prices high. So don´t believe them. I know what I´m talking about. Because of the current condo offer, it would be a surprise you would even get an offer with the 2010 price – 30k.

#134 Gerry on 11.19.12 at 1:24 pm

#92 eagle eyes on 11.19.12 at 8:02 am

Richmond is extremely overpriced. But look at why and how prices got here. HAM is a huge factor for the massive gains. HAM kids are driving Ferrari’s,Maserati’s, Audi a8′s, Lamborghini’s, to HIGH SCHOOL! Every asian restaurant is jammed packed and these people are spending!

#135 IM in C on 11.19.12 at 1:29 pm

Garth
I recall you commenting on the Trump project in one of your past posts. Here we have Susan Pigg, the Toronto star’s resident real estate shill, cautiously observing that all real estate deakls might not be perfect.

http://www.thestar.com/business/article/1289698–trump-tower-developer-suing-7-disgruntled-investors-to-close-deals-they-now-regret

#136 futurologist on 11.19.12 at 1:39 pm

#66 Soylent Green is People on 11.19.12 at 1:19 am

Whats the point of working only to throw it all away, what a wasteful way to live, paying taxes to Harper who gives it to Israel to use to kill gaza children.

So, Harper is smart, respectful leader!
He knows what to do!
Viva Harper!

#137 Toronto_CA on 11.19.12 at 1:49 pm

Miss Piggy is up to her usual RE spewage

http://www.thestar.com/business/article/1289721–tighter-mortgage-rules-doing-harm-brokers-say

#138 TimV on 11.19.12 at 1:52 pm

#34 eddy: further data on why I disagree when you state “no evidence of entry prices falling” — For May 2012, looking at the fraction of houses (det+semi) sold for above-list, and breaking them apart by >$500k sold price and <$500k sold price (and double-counting any at exactly $500k):

Over $500k: May to October, dropped from 91 or 141 to 58 of 124 (64% to 47%)
Under $500k: May to October, dropped from 33 of 53 to 20 of 67 (62% to 30%)

So it is actually the entry-level under-$500k houses that are getting hit the hardest, at least initially. Over an extended period of time, I imagine the effect will be roughly equal on both groups. But looking at the initial data, entry-level falls more. This is understating the effect, arguably — the semidetached market seems to be stronger than the detached market, but semis typically sell for less than detacheds. If I broke into four groups "entry-level detached", "non-entry detached", "entry semi", "non-entry semi", then you would probably see an even bigger drop-off in entry-level prices.
I like comparing May versus October since the total number of sales is roughly comparable … that hopefully reduces the seasonality effects.

#139 };-) aka D.A. on 11.19.12 at 1:57 pm

Remodeling Trend: ‘Forever Homes’

#140 TimV on 11.19.12 at 1:58 pm

A further thought on the price differentiation between entry-level vs non-entry and semi vs detached: One possible interpretation is that the “entry-level” ones are really fixer-uppers, gut-jobs, tear-downs, etc. The buyers who are disappearing may be the builders and renovators. The actual home-buyers themselves may be shifting towards cheaper houses (eg, semis) but refusing to consider gut-jobs. This hypothesis would explain the difference between the strength of the semi-detached market but the weakness of the entry-level house prices. As well, it would be consistent with the idea that the “smart money” (ie, builders, renovators) gets out first before the rabble (ie, home buyers) realize that it’s time to get out.

Purely hypothetical.

#141 Elchavo on 11.19.12 at 1:59 pm

“Six months after we moved in, we realized living in an area that small wouldn’t work, so we started house hunting…”

…. how can you not “realize” about things before making the biggest purchase of your life…

reading stories like Trish’s gives me a very nice and warm Schadenfreude. Keep em’ coming Garth.

Saddest part is that people don’t even realize about what their doing… since they’re just doing what’s right, what you’re “supposed to do” … you know.. the “responsible thing”… “building equity” and such…

Ahh… next year is going to be an unforgettable year for so many.

#142 };-) aka D.A. on 11.19.12 at 2:03 pm

And you all thought Vancouver real estate was expensive…
Sneddon said that the average Trump International Realty listing is on the market for $3 million. In comparison, the average sale price in New York City is about $1.4 million, he said.

Read more: http://www.businessinsider.com/trump-international-realty-launches-in-nyc-2012-11#ixzz2Ch18ai4D

#143 Mixed Bag on 11.19.12 at 2:07 pm

#53 the_hundredaire on 11.19.12 at 12:01 am
“We need financial literacy courses taught in schools.”

Why is this comment made often now? Did any of you have financial literacy taught in schools? What is different now that people think this needs to be taught in schools, instead of at home by your parents where it should be? Is it that finances have become so complicated over the last generation? Still, the basics of “save your money” and “don’t trust strangers” are obvious.

#144 Canadian Watchdog on 11.19.12 at 2:36 pm

Canada’s Housing Bubble Story: Mortgage Securitization, the State, and the Global Financial Crisis Link

Canada’s experience during and after the financial crisis appears to distinguish it from its international peers. Canadian real estate sales and values experienced record increases since the global financial crisis emerged in 2008, rather than declines, and Canada did not witness any bank failures. The dominant trope concerning Canada’s financial and housing markets is that they are sound, prudent, appropriately regulated and ‘boring but effective’.

It is widely assumed that Canadian banks did not need, nor receive, a ‘bailout’, that mortgage lending standards remained high, and that the securitization of mortgages was not widespread. The truth, however, does not accord with this mainstream view. In fact, the Canadian financial and housing markets reveal marked similarities with their international peers. Canada’s banks needed, and received, a substantial ‘bailout’, while federal policies before and after the financial crisis resulted in the massive growth of mortgage securitization and record household indebtedness.

This article documents the growth of Canada’s housing bubble, the history of mortgage securitization, and of government policies implemented before and after the crisis. Instead of making the Canadian financial and housing sectors more resilient and sustainable, the outcomes of state responses are best understood as regressively redistributive.

—–

“Regressively redistributive”, as in your tax dollars being used to bailout distressed homeowners/speculators; boost capital in insurance companies like Genworth, and as of recent laws reformed, to allow public pensions funds to invest directly into banks by commercial investments.

The embracement and continuation of a socialist system is what will destroy Canada.

#145 broadway skytrain on 11.19.12 at 2:36 pm

#111 Franke le Skank on 11.19.12 at 10:58 am
I don’t see any new highways being planned.
———————————————-
Very good point, it was bad 18 yrs ago, i can’t imagine how bad today.

Ever though our vcr mayor wants to kill cars and removes lanes regularly, the region is on the ball and making good roads.

3B still gets you alot of concrete and steel out west.

http://en.wikipedia.org/wiki/Gateway_Program

its a beautiful new bridge opened yesterday , ten lanes
http://t0.gstatic.com/images?q=tbn:ANd9GcTTkE6OaXqnBS7yX04q4qZfGgP0foBrUMOPj-DrsoQye-0Zo7LU

#146 45north on 11.19.12 at 2:37 pm

House Horny Housewife: Despite my intense desire to move out of the city and live a more peaceful life

I’m of the opinion that the city and the country are illusions. They used to be separate. In the fifties, people on the farms near your house would drive in to Sherbrooke once a week. Now they drive in once a day. People from Montreal visiting near your house will turn around if the wrong sister-in-law shows up.

#147 broadway skytrain on 11.19.12 at 2:42 pm

sorry , i meant to say “3B still gets you alot of concrete and steel out west without *le bonne politicianne de quebec* getting involved”

#148 AK on 11.19.12 at 2:55 pm

#82 TRT

Coronado island is one of the most affluent areas in the United States with an average household income well above that of families living in Vancouver. Could you provide further elaboration on your comparison?

#149 broadway skytrain on 11.19.12 at 2:56 pm

re DA -you are in the Big Smoke while I live and play in Lotus Land a whole continent away.

travel much?
as an ex maritimer and ontarioan ive always considered it roughly half a continent from here

Toronto to the end of the continent is another 24-40hrs drive or 3-4hr flight and jebus h mercy does air canada hit you hard for it!

#150 broadway skytrain on 11.19.12 at 3:11 pm

#119 Junius on 11.19.12 at 11:30 am
The average price of a home in San Francisco is still below $500,000.

——————-
who is the big fat liar now???

San Francisco Summary
The median sales price for homes (incl condos) in San Francisco CA for Aug 12 to Oct 12 was $725,000. This represents an increase of 3.4%, or $24,000, compared to the prior quarter and an increase of 12.8% compared to the prior year. Sales prices have depreciated 8.8% over the last 5 years in San Francisco. The average listing price for San Francisco homes for sale on Trulia was $1,484,041 for the week ending Nov 07, which represents an increase of 1.3%, or $18,327, compared to the prior week and an increase of 1.1%, or $15,485, compared to the week ending Oct 17.

http://www.trulia.com/real_estate/San_Francisco-California/market-trends/

#151 Picasso on 11.19.12 at 3:12 pm

Obama says thanks

Gas $3.00 a gallon

Dallas

#152 KingBubbles on 11.19.12 at 3:13 pm

Mortgage Crackdown threatens economy …

http://www.cbc.ca/news/business/story/2012/11/19/caamp-housing-mortgage.html

Sponsored by CREA ?

#153 Ralph Cramdown on 11.19.12 at 3:16 pm

“Any day now some sellers are going to start advertising vendor take back financing.” — Me, 26 September 2012

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=12485734&PidKey=104260125

Just sayin’

#154 Ronaldo on 11.19.12 at 3:20 pm

http://www.tmxmoney.com/en/cpnews/19TB739.html

Mortgage brokers concerned over new rules and effect on first time buyers. Will Dunning has this to say about it:

“The housing resale numbers behave like a canary in the mine for us,” Dunning said. “My concern is that a policy-induced housing market downturn creates unnecessary risk that directly affects not just housing but job creation and the economy as a whole.”

What about the risk created by a policy-induced housing bubble? No problem there I guess.

#155 broadway skytrain on 11.19.12 at 3:20 pm

#134 Linda Pearson on 11.19.12 at 1:20 pm
#124Penny Henny on 11.19.12 at 12:07 pm
SNORE.
go bother your neighbours or something.
*****************************************

As opposed to your own sterling contributions? Get real; you’re not that interesting.——-
—————————————————
penny’s right, even the ‘firsters’ had more zing.

we all know the government uses poorly qualified ppl and wastes money daily.

#156 CP on 11.19.12 at 3:22 pm

Cue crying babies:

http://www.huffingtonpost.ca/2012/11/19/housing-canada-new-mortgage-rules-caamp_n_2159442.html

#157 Devore on 11.19.12 at 3:26 pm

#72 Waterloo Resident

You’re just doing two things realtors and their REB buddies do all the time: 1) take today, and extrapolate in straight line into tomorrow, 2) it’s different here. Prices elsewhere have fallen for all types of properties, and prices in Toronto have fallen before, and will again. How many properties changed hands in the last few years? Plenty of people bought 5, 10, 15 20 years ago, plenty bought with more than 20, 30, 40% down, and plenty of investors and speculators are getting twitchy. There is lots of room on the downside. There is no requirement everyone has to sell; not a single person who is underwater needs to sell. Prices will go down regardless of all the “stickiness” hand-wringing.

#158 NoName on 11.19.12 at 3:37 pm

interesting

“The plan, unveiled by Trade Ministry secretary Jaime Garcia-Legaz Monday and expected to be approved in the coming weeks, would be aimed principally at Chinese and Russian buyers. Spain has more than 700,000 unsold houses following the collapse of its real estate market in 2008 and demand from the recession-hit domestic market is stagnant.”

http://goo.gl/ieZkN

#159 Devore on 11.19.12 at 3:47 pm

Trish is just another in a long line who profess to reading Garth for years while driving themselves head first into financial suicide. I have a feeling if Garth stopped posting funny pictures, his “readership” would drop 80%.

In order to learn from history so as not to repeat it, one must first learn history, and clearly Trish and her ilk are failing big time here.

#160 Junius on 11.19.12 at 3:57 pm

#152 Broadway Skytrain,

Sales prices does not often represent the average value. Maybe learn that before accusing people of lying.

This chart has the median at $421,000.00. That is different than sales price.

See below:

http://www.bloomberg.com/news/2012-08-15/san-francisco-area-home-prices-jump-to-a-four-year-high.html

#161 Junius on 11.19.12 at 4:01 pm

#146 Canadian Watchdog,

I thought your post was excellent right up to the last line which was;

“The embracement and continuation of a socialist system is what will destroy Canada.”

How do you connect the banking deregulation and housing speculation with socialism? If anything, the opposite is true and it is associated with unfettered capitalism. Looks like a disconnect to me.

#162 DonDWest on 11.19.12 at 4:03 pm

#72 Waterloo Resident on 11.19.12 at 2:02 am

“The problem with price in the Toronto area is that people simply WON’T sell for less than they bought for. . .”

Same problem here in Haliax. I wouldn’t be surprised to learn the problem is on a national scale with the exception of maybe a few cities/areas that are known to have a large tourism/cottage industry, such as Kelowna, the south shores of Nova Scotia, and Victoria.

The only way I can buy a house is to get a foreclosure. The houses can often sit long at half the price of assessment (there are no buyers), but unfortunately there’s often a good reason why the house is foreclosed – the crime rate is usually high in that region.

Canada isn’t like the United States, if you care about your house the chances of you getting foreclosed on are close to nil, even if you can’t pay the bills. Now if you don’t care. . .

#163 Old Man on 11.19.12 at 4:20 pm

I have a thought for the day for those that might want to sell a condo or whatever to move into safety to conserve capital. In life when one has a complex problem that is overwhelming have found it helpful to put all aside, and concentrate on a few simple parts of the equation.

Ask yourself just one question only after reviewing the total financial situation in regards to Real Estate based on facts, and your particular location. We are here now with market prices falling; sales falling; jobs being lost; and our debt = X, so hold or sell? The other question is simple, if we hold out with a mortgage renewal coming up will we be in a better position in 2013 and thereafter? :))

#164 Trish on 11.19.12 at 4:28 pm

Hi guys,
I deserve some of your abuse, yes, but in early 2010, who knew? I couldn’t have been the only one. I’m guessing from the bitterness there were some of you that took the fall alongside me.
A little clarification though, both properties were bought <$450k total (incl taxes). The house will not take a loss (in today's market we would walk away with at least 150% of our deposit according to comparable deals that closed last week. Next month, who knows), we bought it under market. As for the distance, at the time of purchase, we were promised a brand spanking new RT line to the subway about 30 steps away until that got scrapped.

As for the condo, when I spoke of loss, it averaged $6/month, but where in Toronto can you find parking downtown for that a month? Now that it's making money and providing me a "free" parking spot, the common consensus is to sell it at a loss, and go rent?

If anyone can make any suggestions as to where I can find a dog friendly house/condo/apartment that isn't filled to the rafters with cockroaches and junky tenants in the city centre for less than $850/month, please let me know!!

And renting a condo downtown for less than $750 is a pipedream folks.

And I don't do yoga.

Trish

#165 JohnG on 11.19.12 at 4:36 pm

http://winnipegrealestatenews.com/Resources/Article/?sysid=1723

40% of Canadian home owners are living mortgage free? That sounds higher than I would have expected.

Other than that, the article contains allot of very carefully selected wording.

J

#166 Debtfree on 11.19.12 at 4:42 pm

50% off anyone?
http://univs.com/zh-cn/blog/Univs/2012/11/13/west-kelowna-lakewind/

#167 };-) aka D.A. on 11.19.12 at 4:48 pm

#151broadway skytrain on 11.19.12 at 2:56 pm
re DA -you are in the Big Smoke while I live and play in Lotus Land a whole continent away.

travel much?
as an ex maritimer and ontarioan ive always considered it roughly half a continent from here

Toronto to the end of the continent is another 24-40hrs drive or 3-4hr flight and jebus h mercy does air canada hit you hard for it!

Yes of course, if you want to nitpick, you are technically correct. But I’d venture to say, on so many levels, we’re practically a whole world away.

#168 Devore on 11.19.12 at 4:48 pm

#90 I’m stupid

People with long commute times (2.5+ hours) really have no life outside of work. They need to go to bed early to get up at 5 or 5:30 to make it in to work, then get home late afternoon in time to do some chores and assorted administrivia and necessaties (like shopping), leaving probably less than an hour to eat dinner and do everything else. They live for weekends, when they catch up on household work (pride of ownership represent!), sleep, and, maybe, visiting friends/family. This is before kids, how do you fit children into this schedule? Is there even any desire to have children in this situation? Only their loser renter friends get home at a reasonable time, and can enjoy the fruits of their labour without having to go to bed before sundown to begin it all over again.

You’re right, this is not a life, it’s not insanity either, it’s slavery. They’re slaves to their mortgage and their jobs.

#169 Mnbv on 11.19.12 at 4:54 pm

Hey TRT

7.8 million people live in Frisco and just over 2 million live the lower mainland Fraser valley— land constraints?
And, I’m very confident that silicon valley engineers make more than Vancouver coffee baristas— incomes don’t matter?

Nice try

#170 broadway skytrain on 11.19.12 at 4:59 pm

#162 Junius on 11.19.12 at 3:57 pm

READ man , read!
Your link itself, the headline of the article, and the first sentence ALL state clearly the data in question is not exclusive to the city of SF but is for the bay area. toronto is not milton.
you make that deceptive omission in your quote.
be honest.

#171 Devore on 11.19.12 at 5:03 pm

Of course, if you are not willing to put up with the commute from distant burbs, your only logical option is to buy in the city, live in the basement of your century house, and rent out the rest. Like these guys:

http://vancouver.en.craigslist.ca/van/apa/3416496911.html

They changed it to say they’re living in the basement because they travel a lot, but that just makes it all the worse. Because after vising beautiful places around the world, what you really want to do is return to your dark, dank, damp subterranean dwelling. When this house was built, no one designed basements and attics for living in. Even animals wouldn’t be kept there, as it would be considered cruel.

#172 Old Man on 11.19.12 at 5:10 pm

#166 Trish – had to read your story over again, and have nothing to add, as Garth said it all. He is 100% correct, and what can I say! Now for a rental option with a dog do your homework ; get busy gal, as you would be surprised what is out there, as some landlords do have a clean accomodation who love dogs, but you will have to pay a reasonable rent, and do not overlook a unique situation called a coach house scenerio near the subway line.

#173 debtified on 11.19.12 at 5:10 pm

Smoking Man, just be yourself. You lose your edge when you try to be someTHING else.

Never lose sight of the fact that, at the end of the day (just like everybody else here), you are irrelevant.

- A Fan

P.S. Been a while since I last thanked you, Garth. So, Thank You!

#174 Devore on 11.19.12 at 5:14 pm

#92 eagle eyes

Is renting really all that bad? Yes it is. If you have a family, it is difficult to move every year or so. Generally, most people look down on renters. Don’t have a sense of stability. Would I buy a house at today’s nosebleed prices because of this? Absolutely not.

It is called a lease. Do some research for pete’s sake before you settle in something that costs you a couple grand a month. Ask for a 3 year lease. If the landlord balks, move on. If you don’t want to be tied down for 3 years (oh goodness, TOO MUCH stability!) renegotiate to a 1 year lease, and renew early for another year as you feel like it. Yes, the bubble and speculation has created a lousy situation for family rentals in many cities, but it is hardly the hopeless, throw in the towel scenario so many portray it.

And hey, if you’re so afraid of people “looking down” on you because you’re saving tons of money on a necessary expense, then you are a sucker and deserve to lose everything you have.

#175 Spiltbongwater on 11.19.12 at 5:21 pm

Garth, did you load up on AAPLs last week when they were on sale?

#176 Trish on 11.19.12 at 5:26 pm

#19 TimV
Actually we were looking in the O’Connor/Danforth/Woodbine sort of rough area, you seem to know it well. Preferably something walkable (<45min walk) to the subway.
Lowest I've seen recently is 350ish in that area, and they were holding offers. Not sure if it's closed as of yet though. A nice little semi or det would be great, but we're not buying until we sell.

Since you came the closest to actually answering my question instead of just outright insulting me, what do you think, that values will plummet to the 200k range in that area? That's all I really wanted to know. A nice little two bedroom bungalow that wouldn't halve in value in the next 5 years. Does anyone know what the average out there was before this "boom" hit? Safe to say most houses in Toronto won't plummet to "39K MUST SELL" like the US. Otherwise I'll wait to buy 10.

And I meant fortunately, my SO loves the Danforth. :)

#177 Maiannus Ismaili on 11.19.12 at 5:29 pm

Trish says:

“As for the distance, at the time of purchase, we were promised a brand spanking new RT line to the subway about 30 steps away until that got scrapped.”

So, you’re within 416, and your commute still takes 2.5h round trip?

Toronto prices for a Milton commute.

Sucks to be you!

#178 TimV on 11.19.12 at 5:37 pm

It is, of course, possible to rent an entire house in East York. The cap rates are around 5%, ie, a price:rent ratio of about 20X. At 20X, it is plausible to get a 30+% price drop depending on where interest rates end-up, but assuming a very slow albiet steady increase in rates, I don’t think the nominal drop will come near 30+%. That said, Trish: you seem to think in terms of lost deposit and nominal dollars. Keep in mind that equity in your properties represents opportunity cost, since that money could be invested elsewhere (preferred shares or whatever).

As your point on parking makes clear, there’s too many missing variables to credibly offer concensus advice. That said, if you execute your plan and move closer to the city, why will you need parking at your old condo? I’m assuming that if you move to East York or Scarborough (much cheaper if you compare equal-quality houses, and still on the Danforth subway line), then you will not be commuting via car to downtown. If you do plan on commuting via car, then you definitely want to rent, since you may quickly find that the commute time hasn’t actually improved…

(Depending on the location, free parking could be worth up to $200/month, as I’m sure you’re aware).

#179 GTA Girl on 11.19.12 at 5:38 pm

Monthly parking averages $200/mos in good areas.

Your parking space isn’t free. See? You are doing it again. You paid for that parking spot. Every month you are paying for that spot. If/when your tenant leaves, your building has collapsed parking garage floor, leaks, elevator problems, glass envelope fails…you are exposed to tens of thousands of dollars more.

And the market in Scarborough is far from secure. People avoided Scarborough and many chose any other area but Scarborough. Unfortunately certain areas reflect on the name as a whole.

Nothing is free, Trish. And your attitude of entitlement speaks thru your words.

Being $1mill in debt (factoring taxes, fees) is not something to be proud about.

One has to wonder about your line of credit/card debt.

Wake up.

#180 Herb on 11.19.12 at 5:39 pm

Smoking Man Smith,

I don’t care what you call yourself in future, as long as you stop trying to turn Garth’s blog into the Smoking Man Gong Show.

#181 Old Man on 11.19.12 at 5:43 pm

#166 Trish – I will give you a tip where to find unique accommodation as it might be off the books with a website called Kijiji. You would be surprised what is there, as there are landlords who will provide clean rental units that will accept a dog; especially some old rich lady who has a coach house or a mansion with several rental units for the right married couple.

I know has have done this for others, and being near a subway line might not be a problem, and with the right landlord the cost of rent can be negotiated, as some landlords do not need the money, but rather a good married couple with a dog; kind of like a family type of thing to fit in according to a sense of perception. It is out there, as have seen it all.

#182 GTA Girl on 11.19.12 at 5:43 pm

Garth? The lass is speaking in circles. Asking for a tiny semi in upper beaches?

Mold and bad/cheap Reno heaven.

She hasn’t learned, didn’t read nor digest what you wrote.

The real victim is the person she drags around to all these ‘brilliant ideas-turned hell on earth” places.

The bank just bought itself a lifetime member slave

#183 GNFINGR on 11.19.12 at 5:48 pm

#112 white rock mom, how do you find south surrey? We are interested in the neighborhood, as we can get a big new place with a nanny suite for family who lives all over, and there seem to be lots of nice young families and good sporting centers. Where we live in Richmond there is no neighborhood feel. The problem is that we both work downtown and the commute seems abysmal! Any thoughts, experience?

#184 TimV on 11.19.12 at 5:58 pm

#178 Trish: O’Conner, Danforth, Woodbine: covers a large area. Obviously, I can’t predict the future. A couple thoughts:

1) O’Conner, you’re taking the bus, or you’re driving to the nearest subway. There’s pretty cheap parking if you’re early in the morning – say drive to Woodbine subway and park there. But, how many years will that be available? Eventually most parking lots get built over. Taking the bus will involve a transfer at Broadview. Transfers are slow, and busses will be impeded by rush hour traffic. Try it, and time it, several times, during the times where you normally go to work, if you are serious about going this far north.
2) If you are not as picky about your neighbours or your school district, you can save a lot of money and get much more land by going even just a little bit farther east. Staying south of Mortimer, west of Woodbine you’re around $250k/20′ frontage. By the time you hit Coxwell, it rises quickly to $300k/20′, and eventually $350k/20′. By the time you’re at Jackson School, it’s a different ballgame entirely. So if you can, consider going a little bit farther east. The subway commute increases only by a bit. You’ll have an empty seat on the train in the morning. And you’ll save a wack of money. But your school district might be worse, and your friends may look down on you.
3) Will you find a decent place in the listed area for $300k within the next two years? Plausibly. There are some very small houses and plots of land; those might dip to the point you’re looking for. But anything that’s really close to the subway … probably not. Take the $250k/20′ frontage for east of woodbine (current prices), subtract say 15%, add $100k for the house itself, and you’re at $315k. With a bit of luck, a good deal could get you down to $300k, maybe needing some minor fixups. Keep in mind that you left your condo because it was too small, though … some of these houses are not much bigger than a condo. If you’re serious about trying to do this, you should be looking at houses now to understand market dynamics, what’s available, etc. But yes, it might work. There are some lots that go down to about 15′, which should save another $62k on the price … but parking may be an issue (street parking okay?).

Going northwards towards O’Conner, the problem you have is that the average lot size increases. Prices decrease, but if you can’t buy a small enough lot/house, then it doesn’t matter. Plus, your commute will be longer. I’ll see if I can dig-up some more useful data for you later tonight (probably not, since real world intervenes typically).

#185 TimV on 11.19.12 at 6:04 pm

Trish: just re-read your comment. If you’re really willing to walk 45min to the subway, and if you really don’t need a large lot, then $300k seems quite plausible. Do you really want to walk 45min to the subway in all weather conditions, though?

Fwiw, my wife and I set a target of 10min to the subway. We wanted a lot of around 5000′, and west of Woodbine. We failed only on the last count. Consider going farther east and spending more time on the subway but less time walking… That was basically the choice we made. Once you get to Main Street, the Danforth becomes somewhat less interesting (big box stores, vacant storefronts, etc; depends on whether you value this or not).

If I did it over again, the one thing I would do different would be to consider south of Danforth as well. The Gerrard streetcar is wickedly slow during rush hour, but if you’re really willing to do the 45min walk, you should really consider south of Danforth as well. Gets you in some interesting areas (more termites, more beaches, more prestige, etc), and there are some nice places there.

#186 John Prine on 11.19.12 at 6:06 pm

#35 Fabrega on 11.18.12 at 10:24 pm
Are you talking about Vancouver Island? If yes, you must be a realtor. The island is still grossly overpriced. People are still asking $400,000 for tear downs. Ridiculous.

Just was going over the local paper here on the mid island and the prices are showing some substancial drops.
Not on all that many so far but it is showing. No prices are going up thats for sure.
——————————————————————–
Parksville and Qualicum have hardly any sales and the ones that have sold are down a lot….Many off the market in the last week or so. Waiting for the spring “buying season”. Many have been for sale for 2 years now.

#187 };-) aka Devil's Advocate on 11.19.12 at 6:20 pm

House prices: 9 reasons not to panic

#188 Smoking Man on 11.19.12 at 6:20 pm

#177
Look at the aapl bounce. On zero volume.
Hope you didn’t buy, looks like a short squeeze on late shorterers.
The volume was the lowest in two years.

Mind you stranger thinks have happened. See what tomorrow brings

#189 Junius on 11.19.12 at 6:21 pm

#172 Broadway Station,

You said, “READ man , read!”

You should take your own advice. The example used by TRT is for the entire San Francisco area not just the City of San Francisco. The issue is land constraints. My link was for the greater S.F. region which was relevant to the issue and my comment. GTA and Lower Mainland as to greater S.F.

So take your own advice – READ. Try to keep up.

#190 Smoking Man on 11.19.12 at 6:24 pm

#182 Herb
He can banish me anytime, won’t be the first time I have been disenvited to things.

#191 TimV on 11.19.12 at 6:27 pm

Trish: one other thought — I think you’re asking the wrong question. If you are certain that living in your current house is not an option, then the question to ask is: “Will prices in East York decrease faster than prices in ?”. It doesn’t matter whether East York prices fall 10%, 20%, or 50%. The question you probably want to ask is simply “will they fall faster than the price of my existing home”.

This assumes you’re not willing to rent. If you are willing to rent, then the question “should I wait a couple years” is a good one to ask.

#192 Canadian Watchdog on 11.19.12 at 6:28 pm

#163 Junius

On the surface, it appears to be a capitalism, but underneath it all, taxpayers have socialized the entire housing market via CMHC and now, private mortgage insurers like Genworth who are not required to post any collateral for the government’s 90% guarantee. This is Canada’s wealth distribution model managed by our profligate government who has leveraged household debt to a whopping 90% of GDP, the second worst in the world!

Capitalism is alternative to what we have now, which is best described as crony capitalism. First, with the worst concentration of media ownership in the G8 and second, state-organized oligopolies (banks, insurers, corporations) who are lobbying and corrupting regulators (OSFI) to neglect criminal activity by hiring ex bank traders and analysts as bank cops. What did Public Service Commission have to say about OSFI’s appointments? Link

“4.6 Our review of the OSFI’s appointment files indicated that the compliance of the OSFI’s appointments and appointment processes with the PSEA, the PSER and the PSC Appointment Framework requires improvement. We found that merit was met in just less than half of the appointments we audited. However, in almost half of the appointments we reviewed, we found that merit was not demonstrated and, in a few appointments, merit was not met.”

This is Canada’s top regulator. Now just imagine what’s going on in other crown agencies.

It should be clear by now that Canada is not the country you once thought it was: rather it’s become a banana republic freely-attracting immigrants from around the world who are targeted by the banks as excessive credit consumers. We export oil and import new FICO scores. That’s our business.

There’s a lot more at stake here then the value of homes. Those who are smart enough to manage the preservation of their labour will do well. The others should be feared.

#193 Old Man on 11.19.12 at 6:45 pm

#181 GTA Girl – name the parking area of your choice and you can rig a parking space with small business operations to park for cash in any area of Toronto for a huge discount, as they will keep it off their books.

#194 Canuck Abroad on 11.19.12 at 6:48 pm

If Trish is going to spend 45 minutes walking to the subway, then her commute is not going to improve much. Really? An hour and a half a day walking? Do you have a rain/snow backup plan? How is that better?

Maybe you meant to type 4 – 5 minutes to the subway? That’s very different. I agree with GTA girl, you are a lost cause Trish. Two completely stupid purchases in a matter of a couple of years, and you can’t wait to repeat it all over again in another place. And you are looking for advice from TimV, whose opinion you will use to spend another couple hundred grand, because he wasn’t mean to you. Wow.

#195 Triplenet on 11.19.12 at 6:49 pm

#180 TimV

A 5% cap rate attributable to a house?
Please explain that.

#196 doctore on 11.19.12 at 6:55 pm

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2012/11/kevin-oleary-on-oleary-mortgages.html

#197 Old Man on 11.19.12 at 6:55 pm

Smoking Man in my private rant room have a stable of babes from Canada and USA who want to size you up, and many are from Toronto. Hey they rip me apart on a nightly basis, and just laugh, as they all want me, but how do I give you the codes for this room, as to enter is complex; they all want to meet the Smoking Man lol.

#198 I'm stupid on 11.19.12 at 6:59 pm

#170 Devore on 11.19.12 at 4:48 pm

I absolutely agree. This marriage is not going to end well either. I think people like my friends are delusional. I wish they offered refunds on the wedding gifts.

#199 TRT on 11.19.12 at 7:00 pm

#194 Canadian Watchdog

I agree 100%. Capitalism is the best system in the world. We do not have this in Canada…more like Fascism (Politicians in the hands of Corps/Criminal syndicates creating endless regulations etc.).

Most of my sane posts are based on this underlying theme.

#200 tkid on 11.19.12 at 7:15 pm

Trish, you’ll make back 150% of your deposit – so apply that to the loss you’ll take on the condo and sell both.

The parking space isn’t free. Parking spaces get you $200 in rent, so the space is costing you $2400 a year.

But if you want to own two or three properties, why in heck are you soliciting advice from a known sell-the-house-why-you-can website? Just buy the place already and be done with it.

#201 Herb on 11.19.12 at 7:20 pm

Canadian Watchdog, Junius,

you might be interested in who really makes the political economy of Canada –

http://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2012/11/Shrinking_Universe.pdf

#202 IM in C on 11.19.12 at 7:32 pm

Note to Trish:
My sister is renting a 3 bedroom bungalow with detached garage, 5 appliances etc. in the east York area of Toronto, for $2400 all in. That seems to be the going rate.

#203 tkid on 11.19.12 at 7:33 pm

http://business.financialpost.com/2012/11/19/imf-considering-loonie-as-reserve-currency/

I am picturing faces of people all over the world as they wonder ‘why is a reserve currency called a loonie?

#204 Junius on 11.19.12 at 7:35 pm

#193 Canada’s Watchdog,

You said, “On the surface, it appears to be a capitalism, but underneath it all, taxpayers have socialized the entire housing market via CMHC and now, private mortgage insurers like Genworth who are not required to post any collateral for the government’s 90% guarantee.”

I agree with how you identify with what they have done but you don’t identify it properly. The Banks, Genworth and the rest get away with the profits while we socialize the losses. This is not socialism or we would all profit.

I agree that this is Crony Corporatism run by a Plutocracy or an Oligarchy. The few benefit while the many get screwed. I am a tax payer and I will be among those who have to bail them out.

Where I expect we disagree is the remedy. You appear to be believe that it is caused by regulation. I believe it is caused by poor regulation and in this case poor government policies. However more unfettered capitalism is clearly not the answer as any sane review of the US collapse will demonstrate.

I agree with less media and corporate concentration. The short answer is that we need a competitive capitalism that puts the good of society ahead of the selfish interests of a few large corporations. This will only come through better government and proper regulation. Unfettered capitalism will only make it worse.

#205 TRT on 11.19.12 at 7:36 pm

#150 AK,

Just an example…equating Coronado with for example with Forest Hill or a West Vancouver. In Coronado, there is wealth. Just looking at yearly net incomes in these areas is erroneous (even Coronado incomes don’t support present real estate values there). That’s why in these areas, income to house prices means nothing anymore. The Coronado ratio of house prices to incomes has only one way to go now — that is Up.

This after a crash.

#206 TRT on 11.19.12 at 7:39 pm

Junius,

Sometimes I feel sorry for you. I wish you had a BALANCED education (Heard Santa is already at Coquitlam Centre Mall). Having parents pay for your education, spending countless hours in the library, etc., etc., etc…..something was missed whether you realize it or not.

#207 TRT on 11.19.12 at 7:42 pm

#171 MNBV

No. Wealth (Net Worth) matters more than yearly incomes on a tax return.

#208 TRT on 11.19.12 at 7:54 pm

#116 Dave 99 said

“I took a look at that link, and prices are currently about 35% higher in nominal dollars than 10 years ago. But if you adjust for inflation, then the price increase over 10 years is only 10%.”

Then by that logic, you could also say that the original mortgage debt has been whittled away by inflation….by 25% as per your example.

#209 Canadian Watchdog on 11.19.12 at 7:54 pm

#201 TRT

Either way, household debt will implode and get transferred to corporate and government balance sheets. No matter how powerful our governing system is, they will eventually cause a major crisis by their unwillingness do the right thing.

#210 TurnerNation on 11.19.12 at 7:55 pm

Bottom’s in…’till Christmas.

Nailed it:

#22TurnerNation on 11.15.12 at 10:15 pm
Picked up some index calls at the close as all my downside targets hit. Plan the trade, trade the plan.

#211 broadway skytrain on 11.19.12 at 8:14 pm

” I’ve spoken to many engineers at the Valley’s biggest companies, and from what I can tell, their salaries range from $100,000 to $150,000. You find people making more than $200,000, but they’re the exception, not the norm. The starting salary for engineers at Facebook and Google is around $100,000 a year.”

the oil/gas and mining engineers in van make every bit as much (or more) and don;t have to do insane overtime.

#212 Smoking Man on 11.19.12 at 8:16 pm

#199 Old Man on 11.19.12 at 6:55 pm

Bring em to the bears den on Sat, after the show, I could not get tickets damn, bring em to the centre bar, that’s where I will be. I will buy an old man hat so you know who I am.

Problem Solved

#213 Form Man on 11.19.12 at 8:20 pm

#206 Junius

excellent post

TRT ……..you spout nonsense

#214 TurnerNation on 11.19.12 at 8:20 pm

DJ MARKET TALK: Canada Regulators Got It Wrong, Mortgage Brokers Say

10:54 EST – Regulators are supposed to discourage “pro-cyclical lending” — the tendency of lenders to make credit more available in good times and less available in bad times, leading to frothier economic peaks and deeper troughs, respectively. Canada has done the opposite, contends a new report from the Canadian Association of Accredited Mortgage Professionals. Federally-backed mortgage insurance criteria became “very liberal” at the 2006-2007 peak of Canada’s housing market and now, the criteria has tightened “at the wrong time, and to too great a degree,” CAAMP says. The 8% drop in housing resales from August to October after the fourth-round of rule tightening in July foreshadows an overall housing-market decline and creates “unnecessary risk” to job creation and the economy, CAAMP says.

#215 };-) aka Devil's Advocate on 11.19.12 at 8:22 pm

Here’s the direct link to that Canadian Business Article

“House Prices: 9 reasons not to panic”

http://www.canadianbusiness.com/print/82720

The author was discredited with his last attempt at this. — Garth

#216 Tony on 11.19.12 at 8:29 pm

We’ve seen what buy low and sell high did to the Templeton Fund (Sir John’s old adage buy when it’s completely out of favour and hold for the long run used to work but Wall Street ages ago replaced that with what’s high will go higher and what’s low will go lower) it nearly bankrupted them.

#217 Junius on 11.19.12 at 8:34 pm

#211 Canadian Watchdog,

You said, “Either way, household debt will implode and get transferred to corporate and government balance sheets.”

Government – yes. Corporate – no.

#218 Tony on 11.19.12 at 8:45 pm

DELETED

#219 TimV on 11.19.12 at 8:51 pm

Trish:

I didn’t have time to look at everything, but some that are close enough to $300k that they could quite reasonably hit $300k with a bit of luck and the right market conditions.

1) 25 Palmer Ave – Narrow two-bedroom townhouse, looks like good condition, and quite close to the subway. You may not like the school district. Only a small drop needed to get to your price point. Pretty easy to imagine.

2) 39a Blake Street – 15′ frontage, semi-detached. Needed work, but for the price it sold for, you could afford to do major renovations and still stay under $300k, assuming a 10% drop in prices (price was comfortably under $300k when it sold in May 2012). Major bonus: this land is a low-desireability location right now (due to the reputation and school district), but if the downtown relief subway line ever gets built, you could make a LOT of money off of this property .. depending on exactly where the nearest subway stop is to this address.

3) 1346 Woodbine – a bit farther north than you really want, about 15 min walk to subway … and walking along Woodbine will “feel” much longer than walking 15 minutes along a less traffic-y road … But with a smallish % price decrease (less than Garth’s 15% prediction), this would hit your $300k target. Quite plausible.

There’s more, but anyways. Main points are that your hunting will be few and far between (I found only three flipping through April and May solds, which are the busiest months), and getting to really walkable distance from the subway will be tough (unless you’re willing to go farther east or south into say Blake-Jones area), but with patience and the right market, okay, doable.

Good luck. You’re helped by the huge variety of lot sizes, house conditions (old, new, renovated, decrepit), and house sizes that exist in East York. Other areas are much cheaper, but what’s the point of being cheaper if you can only buy a monster lot? Like the “buy 1 get 2 free” sale … still expensive if you only really need “1″.

#220 Junius on 11.19.12 at 8:52 pm

#203 Herb,

Good link! Thanks for posting.

#221 Trish on 11.19.12 at 8:53 pm

#196 Canuck Abroad – The distance isn’t set in stone, and obviously closer to the core there would be options (car, bus, cab)
A max 45 min walk easily translates to a 15 min drive, 20-25 min bus ride. Or a nice walk home in the summer.

#204 IM in C This is what I need help in understanding, if you’re paying ballpark $2400 for a rental, how can you justify the difference in paying a mortgage for a comparable house at $1800 all in. That’s $600/month, 7200/yr apx 5 year ownership is 36k in money gone. Even if the house values fall, at least you would have something. I understand the need for liquidity, and always maintain easily accessible cash assets to support us for a year. But to spend 144,000 in rent for the same 5 year period and to just walk away with nothing doesn’t make sense. Unless of course you’re planning on buying the lawyer’s house on O’Connor for 1.6mil. Then yeah, rent.

#181 GTA Girl
Not sure where you got the random 1 mil of debt from, but you do make a good point on the parking.

Unfortunately, when we did have it listed, we priced under market and didn’t get a single offer. It’s not worth draining the bank accounts to pay the outstanding mortgage on it and then being homeless and destitute, is it?
Believe me, with a pain in the rear tenant, keeping it wasn’t our dream come true. But you all insist sell sell sell, but if no one is buying, any suggestions on making the best of a bad situation? Jebus.

#222 Stupesing in Cabbagetown on 11.19.12 at 9:00 pm

#99 Eaglebay – Parksville – you must be unaware of the tsunami that hit Port Alberni in 1964.

#223 Tony on 11.19.12 at 9:03 pm

Re: #46 happy renter on 11.18.12 at 11:20 pm

Gold and silver will be hammered to the downside starting January 2013. Sell all precious metals before then while you still can.

#224 Canadian Watchdog on 11.19.12 at 9:04 pm

#203 Junius

“The Banks, Genworth and the rest get away with the profits while we socialize the losses. This is not socialism or we would all profit.”

CMHC and Genworth are selectively offering ‘work-outs’ to distressed homeowners who ‘they’ feel qualify for homeowners assistant. That is an indirect way of distributing wealth from non-homeowners to banks and distressed borrowers (including many who speculated with very little money). Call it what it is: phony wealth creation. But here’s the key to socialism: What do you suppose happens next when millions of homeowners lose their wealth over the next few years? Who will they vote in the next election to ‘save’ them? Answer: Look at what happened in the U.S. election. Obama paid for voters by giving auto-bailouts, food stamps, free cell phones, healthcare and more to minorities.

As I stated above, it’s the ‘others’ who want a free lunch that should be feared the most.

#225 TurnerNation on 11.19.12 at 9:04 pm

#166Trish on 11.19.12

Condo’s losses are $6/month until next year.

Toronto’s water rates up 9% announced today. Expect hydro’s the same. Maybe 4-5% in prop taxes.

Condos’ water, common area hydro, taxes will rise to suit. Condo fees will rise. Bet on it.

#226 TurnerNation on 11.19.12 at 9:08 pm

#141};-) aka D.A.

Forever homes? With up to 50% of couples/marriages’ partnerships ending with divorce?
Till debt do we part.

#227 TimV on 11.19.12 at 9:20 pm

#197, Triplenet: you are correct, the cap rate is lower than 5% since to properly do it, you have to subtract various operating costs. Aside from property tax and minimal maintenance/upkeep, most of those operating costs can typically be pushed onto your renters, though. The actual cap rate will drop a bit below 5%. Within error bars and rounding, though, 5%. 4%, whatever.

#228 DonDWest on 11.19.12 at 9:28 pm

#228 TurnerNation

Which is why if I buy a home, I plan to buy a home completely on my own – the old fashioned way. My wife/girlfriend can enjoy the benefits of living rent free. I’ll make sure the title is in my name alone.

Given the divorce statistics and the laws that favor women – a man would be a fool to share a mortgage payment/land title with a woman.

#229 TimV on 11.19.12 at 9:32 pm

#223 Trish: careful. A 45min walk doesn’t necessarily translate into a 20min drive once you factor in parking. Some subway locations have cheap and nearby parking. Some do not. 20 years from now, I doubt any subway stations in East York will have cheap and nearby parking.

Bus can be an option. It has drawbacks, of course. Some people are quite happy with it; maybe consider trying it during the appropriate hours when you would normally commute from your new hypothetical home. Still don’t know anything about constraints such as school district, but someone who is *unconstrained* will probably have better quality-of-life with the shorter walk from a less desirable neighbourhood (eg: the 39 Palmer house mentioned earlier) than a more desirable neighbourhood but with a bus-ride (or long walk).

I don’t mean to imply that your best choice is necessarily to buy another house, though (that depends on many many things and isn’t always just a financial choice).

#230 Derek R on 11.19.12 at 9:52 pm

#223 Trish on 11.19.12 at 8:53 pm wrote:
This is what I need help in understanding, if you’re paying ballpark $2400 for a rental, how can you justify the difference in paying a mortgage for a comparable house at $1800 all in. That’s $600/month, 7200/yr apx 5 year ownership is 36k in money gone.

Thing is that the cost of owning a house isn’t just the cost of the mortgage: it’s the cost of maintenance; it’s the cost of property taxes; it’s the cost of insurance. When you’re comparing the $2400 monthly rent, you need to compare it against the $1800 mortgage plus the tax + the maintenance + the tax + the insurance (+ loss of interest on money sunk in the house, + cost of upgrades, etc.).

Once you add in those “hidden” costs, you’ll find that that $600 dollar per month difference between owning and renting vanishes. And that’s before you worry about how much your house is dropping in price per month. Sure, you won’t see that coming out of your bank balance now. But 5 years hence (or whenever you need to sell) you’ll see it.

#231 Robert on 11.19.12 at 11:54 pm

#91 — I wish that were so, but they are newly married (2 years) and the original home is in his name from 5 years ago. Nope, they qualify (and did already) so deed is done and so are we.

#232 Gunboat denier on 11.20.12 at 2:47 am

224 Stupesing – Alberni is on the west coast of the island at the head of a long inlet. There was no tsunami at that time on the east coast of VI. Pville is on the east coast.

#233 Richard and Zeus on 11.20.12 at 3:58 am

“#66 Soylent Green

Garth, please ban the racist comments from Soylent Green regarding Israel. They are very offensive and have no place on a real estate blog.”

How is it offensive to point out Harper who supports Israhell is supporting a country who is blowing babies to bits?

Unless its WHAT the Jews are doing…..that offends you.

#234 TurnerNation on 11.20.12 at 9:25 am

#230DonDWest

Naw man you got it all wrong. Move into HER home, stay liquid ;-). If things go bad, just pack up and move on. It’s the 00′s now.
“You’ve come a long way, Baby”.

#235 think again on 11.20.12 at 1:36 pm

When the wind blows hard even turkeys can fly…

#236 cynically on 11.20.12 at 4:41 pm

#226 Cdn. Watchdog – If you are Canada’s watchdog then may the Lord help us. You can’t know what is really happening here if you spout the rightwing lies and Romney’s excuses by your claims that Obama won by bailouts, food stamps, free cell phones, healthcare and more, to minorities when the more honest, cerebral Republicans are explaining the loss by the Dems great organization, particularly in the swing states and the fact that the Reps have completely ignored the changing grassroots makeup of the country (latinos and blacks) and their views toward women. All three groups voted overwhelmingly for Obama and the Dems had increases in both the Senate and the House so turn off Fox News or Rush’s radio crap or better still, stick to something closer to home – Canadian politics and problems.