Ominous parallels

On Sunday I told you to expect a 30% cratering of house sales in Vancouver when the realtors made their big reveal a day or two later. I was wrong. It was 29%. But November was so bleak that sales were 30.3% below the 10-year average. Anyway you cut it, this is substantial news. Even the financial guys now know it.

Says BMO Nesbitt Burns: “Vancouver’s market is on the down slope of its historical roller-coaster ride.” When bankers start talking macho like that, you know what’s ahead. Minimum-wage hairdressers in East Van will have a nasty time getting million-dollar mortgages. It’s just so unfair.

Says veteran agent (and Van bad boy realtor) Sam Wyatt: “Anyway that you look at the pricing for detached Westside houses, they are falling… the lowest figures seen in nearly 2 years.  Some argue that there is “pent-up” demand and that as prices fall we will see a flurry of buying in the spring.  I believe that we will see large listing volumes in the spring and not enough demand to reverse the present downward trend.

“SELLERS:  Act decisively and price below the previous sales comparables.  In this market, a quick sale is the sale that will get you the most for your property.

“BUYERS:  You have a huge inventory to choose from and plenty of vendors willing (or those who are compelled by circumstance) to negotiate in earnest.  If you need a long term home it is a fun time to be shopping (though tiring with so much to see).”

Of course Vancouver housing is a proxy for real estate across the country. They just don’t know that yet in Calgary. The declines will not likely be as severe as they’ll end up being in The City that Mold Loves, but lower prices and sagging sales will be universal. And all the way down, real estate boards will probably lie to you.

For example, consider what’s happened to the price of a single-family home in Vancouver this year, sliding from above $1.2 million down to a still-unaffordable $1.053 million. It’s a reduction of more than 12%. The realtors, on the other hand, state Van housing prices are lower by only 1.7%, year-over-year. You can see from the chart below (provided in a weak moment by the Vancouver Real Estate Board) that (a) there’s an ominous parallel to 2008, (b) the reduction is real, and not 1.7%, and (c) SFH prices clearly hit a high in the Spring, retreated, retested the high and are now in retreat. If this was a chart of, oh, RIM stock, the exits would be clogged.

But why couldn’t prices rebound in 2013 the way they did in 2009?

Simple – mortgage rates. In 2008 a variable-rate mortgage was 6% and a five-year loan was 5.75%. The world fell into a financial funk, unemployment spiked, Wall Street banks imploded, carmakers crashed and the Bank of Canada rushed in emergency interest rates. By May of 2009 a VRM had collapsed to just 2.25% – the lowest point in history. With rates almost 4% lower than they’d been months earlier, and mortgage payments slashed by more than half, the collapse in real estate prices and sales was quickly reversed.

People in Vancouver, as in Toronto, pigged out on debt, took advantage of 40-year amortizations and 0%-down mortgages insured by CMHC, plus cash-back loans which saw banks put up 100% of the purchase price, and started bidding wars. Personal debt levels soared to historic highs. The savings rate at the same time toppled by 50%. We went ape for real estate, and this pathetic blog was born.

As you know, those emergency rates are still in effect. There will be no more declines. Ottawa woke up and eliminated 0/40 mortgages and has banned banks from handing out downpayments. Unlike 2009, families are massively indebted and have converted most of their savings into real estate. Unemployment is still north of 7% nationally (almost 9% in Toronto) and the economy has again slowed to a crawl.

No, we’re not headed for another 2008-style financial or economic meltdown. But don’t expect another 2009-style orgy, either. It’s over.

This is why realtors sound so silly and dangerous when they say things like: “People from all around the world still want to invest and live here. We don’t see a housing bubble because there isn’t much speculation. Prices haven’t shifted much.” (Eugen Klein, Vancouver real estate board boss.)

Just as the next five years will bring deleveraging by households – people spending their money reducing debt instead of buying new stuff – so will they bring a meaningful correction to real estate markets drugged by the crack cocaine of cheap money. The peak was last Spring, which is why deep troughs in sales in Toronto and Vancouver this autumn are so indicative of what lies ahead.

187 comments ↓

#1 I am Furst! on 12.04.12 at 10:24 pm

Furrrst!

#2 Aleksey on 12.04.12 at 10:26 pm

2013 will be unlucky number for many people in Vancouver

#3 salonist on 12.04.12 at 10:27 pm

you know what, after all is said and done,prices wil drop, prices will rise.so what’s the big deal.buy hold oakville

#4 jim d on 12.04.12 at 10:28 pm

read your blog everyday , do you think edmonton will correct ,waiting to move up but , prices not moving much

#5 Smoking Man on 12.04.12 at 10:30 pm

O Garth so wrong about Toronto.

Spring will be nuts Record prices. On low volume sales cause there aint no inventory.

#6 timmy on 12.04.12 at 10:32 pm

lobbyists turning Canada into petro state
http://www.huffingtonpost.ca/2012/12/04/oil-gas-lobbying-canada-polaris_n_2237826.html

Were we surprised given the puppet of big oil-Stephen Harper?

#7 Nodebt on 12.04.12 at 10:32 pm

2nd!!!

#8 I am Furst! on 12.04.12 at 10:33 pm

Toronto sfh won’t fall by much. Trust me.

#9 Milionaire Machini$t on 12.04.12 at 10:33 pm

Hey losers, QUIT it with the “first” thing and get a life dammit….

#10 gold bug on 12.04.12 at 10:33 pm

DELETED

#11 Teulon on 12.04.12 at 10:35 pm

Garth – you make an excellent point in noting rates are already at rock bottom thereby eliminating any chance of a 2013 upturn in real estate prices like in 2009.

#12 Zarathustra on 12.04.12 at 10:39 pm

Garth, could you please give further analysis of the Vancouver city market? How much have condo prices fallen and how much have SFDs fallen? Which will fare worse in the future?

#13 Bigrider on 12.04.12 at 10:43 pm

Garth, any thoughts/knowledge on Fortress Capital. Seems to be a product offering 8% returns on syndicated mortgages, secured against real property in various cities across the country. Bonuses are offered as well.

The word is out and the products and there sellers seem to be securing monies from RRSP’s and non registered accounts en masse.

Any thoughts? Anyone?

The slaughter of the yield pigs. — Garth

#14 Smartalox on 12.04.12 at 10:43 pm

Has anyone else noticed how the Vancouver real estate board ‘s numbers are coming out much earlier than they used to? We used to have to wait until mid month to get the announcement, now they’re out by the 3rd.

Maybe it’s because there are fewer numbers to add up?

I bet it’s because everyone is eager to learn just how bad the damage is THIS month.

#15 Smoking Man on 12.04.12 at 10:46 pm

#8 I am Furst! on 12.04.12 at 10:33 pm
Toronto sfh won’t fall by much. Trust me.

Dude they aint going to fall period, price will hit records this spring.

Not Condos. They will get a hair cut.

#16 Amazed on 12.04.12 at 10:50 pm

Everyone is relisting in the spring. Which means huge losses in carrying costs over the next few months. Gambling that the situation will get better and yet they will be even less liquid in the spring. People are maxed out. Yes the shopping malls are full… But people have no money in the bank… They are mortgaged to the max. It looks scary over the next couple of years.

#17 Smoking Man on 12.04.12 at 10:50 pm

#12 Zarathustra on 12.04.12 at 10:39 pm

Expect supply to disappear…………

With out Higher rates, or massive job loses , do you think owners will give in to pimple faced basement dwellers. dream on……………………………..

Real estate in their minds is safe…………Stocks, Bonds, Mutual Funds, advisors…. They aren’t trusted.

Re in a track6ers mind is it……………

#18 Country Girl on 12.04.12 at 10:52 pm

The banks, economists, and real estate moguls couldn’t see the forest for the trees until the November numbers jumped out at them and now they clearly see the truth about Canadian real estate.

Meanwhile, the fortunate ones were enlightened well in advance by reading Garth’s blogs.

#19 Devore on 12.04.12 at 10:52 pm

(Eugen Klein, Vancouver real estate bard boss.)

Freudian slip, or innocent typo? In video games, a bard is a class that inspires and emboldens the troops with his songs and words. It is of course the job of any REB to serve their membership, the realtors.

#20 Amazed on 12.04.12 at 10:53 pm

I agree with the people that are amazed with people relisting with higher asking prices… But it seems like if it doesn’t cost a lot that it just might not be worth buying… Even in tempted to list really high just to see what happens.. Only problem is… I don’t actually
Want to move. But I guess everyone has a price.

#21 Smoking Man on 12.04.12 at 10:56 pm

#11 Teulon on 12.04.12 at 10:35 pm
Garth – you make an excellent point in noting rates are already at rock bottom thereby eliminating any chance of a 2013 upturn in real estate prices like in 2009.

………………………………………………………..

Lets see IMF looking at Canada as reserve currency, every country in the world is lowering rates to help them with exports, 3 months of negative trade data.

elfin policy makers will capitulate as election looms.

Watch the rates drop……………………….

Rock bottom, you anit seen nothing yet. dan dan. you you just aint seen nothing yet

#22 Editor on 12.04.12 at 10:56 pm

In looking at percentage price drops of “only” 10 percent, people forget that 10% off a million dollar home is $100,000 whereas 10% off a $400,000 home is $40,000. Drops from today’s inflated prices matter because if a house sale is the primary source of retirement income, you stand to lose so much more proportionally from an overvalued house. Financial plan assumptions must be calibrated accordingly. And these million dollar homes aren’t held by “rich” people compared to the “poor” owners of the half a million dollar homes — if anything they are more leveraged and so have more to lose.

The harder they come, the harder they fall, one and all.

#23 Boomer21 on 12.04.12 at 11:01 pm

#12Zarathustra
Good God man/woman, are you so lazy and inept that you can’t do a little research on your own. Read my lips
I N T E R N E T. Where do you think Garth gets his information from? He doesn’t pull it out of thin air (SM don’t even think about commenting) Anyway use your brain and quit expecting Garth to spoon feed you, man up! Get off your a** and do some research. Some of the questions you get asked Garth would try the patience of Job, I don’t know how you hold your tongue most of the time.
Alright, I have the flu and feel crappy, rant over. BTW if you haven’t had the flu shot, get it, trust me.

#24 Grim Reaper/Crypt Speculator on 12.04.12 at 11:07 pm

Dr Wanker……Donald TRUMPed again!

#25 C on 12.04.12 at 11:10 pm

Wishful thinking smoking man. The tide is turning in the GTA and if you look at the the numbers inventory is higher yr/yr. You sound like one of the sheeple saying the GTA is different. You of all people should know better.

#26 Interesting Times on 12.04.12 at 11:12 pm

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 the 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 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. Canadians can’t compete with the New America where the factory worker now makes $12.00 an hour and can buy a nice home for $100,000K. You are so screwed.

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

- 60% of boomers 60 years and older entering retirement in a shit load of debt. Also, a lot of these boomer fools co-signed for their kids $800,000 Mc Mansions. The banksters will wipe the floor clean with both the kids and parents after this 50% RE Crash when they both lose there homes!

- empty condos being built everywhere and will be going for 50% off soon. HGTV Virgins will be crushed!!!

- 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 out of Canada

- Canadians are 163 percent in debt! More than the US, Ireland, and UK when they had there RE 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 ponzi scheme 10 times bigger than the US, Spain, Ireland etc.

- 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% 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% of the virgins in Canada. They are screwed for life now as they were sold the Koolaid by the RE industry!

Garth thank you also for the great public service you are providing for all the HGTV Virgins out here!

#27 45north on 12.04.12 at 11:13 pm

On Sunday I told you to expect a 30% cratering of house sales in Vancouver when the realtors made their big reveal a day or two later. I was wrong. It was 29%.

pretty funny

where’s BPOE ?

#28 Proud Basement Dweller on 12.04.12 at 11:20 pm

OMG Did you see what Mark Carneys Economic Expert team concluded and just announced this month???!!!!

“Although underlying momentum appears slightly softer than previously anticipated, the pace of economic growth is expected to pick up through 2013,” the bank said in its policy statement.

Sheer Genius. No wonder the UK headhunted our man.

#29 Fort Mac Flatlander on 12.04.12 at 11:22 pm

Had a friend referred to as a “success story”, because he owns 4 homes in Kelowna. What the person saying this didn’t understand was that all 4 are underwater. I nearly pi#@ed myself trying to hold in the laughter. Many people are in store for a reality check and I have gone from being callous to simply feeling pity for the masses.

#30 Mr Buyer on 12.04.12 at 11:23 pm

Clarity. There is a sound quality that truth has that unfortunately is both not unique to truth alone and words fail to describe. It has to be heard, even if it is from the lips of the old man in my head that speaks the words aloud that I am reading.

#31 Smoking Man on 12.04.12 at 11:23 pm

What is this new flash, Obama wants to tax the rich……..

Hum………………………….

Fat Bastard the only hold out on that touchy topic…..over seas.

I have a vision…………….. climate not bad in hog town……………….

Kosher restaurants are going to be a growth industry in Pig Town……..

a hahahahah

#32 Miss GTA on 12.04.12 at 11:25 pm

How about mississauga land transfer tax? Got to put another nail in the GTA market.

#33 Proud Basement Dweller on 12.04.12 at 11:26 pm

Report from the Wet Coast:

Nanaimo real estate booths in the mall are empty all day long as holiday shoppers mingle. Rumour is the RE Agents are looking for any part time work they can get, market deader than a door nail…

Victoria – houses in the 400-500k range are listing consistently for 20-30 Percent below recent assessment. Trust those numbers as ones that actually mean something instead of RE industry Gobbledegook numbers out there.

#34 Mr Buyer on 12.04.12 at 11:29 pm

I worked with a few bush pilots a hundred years ago and they bravely acknowledged the distinct possibility of winding up at the bottom of a smoking hole despite their ever improving skills and best intentions. That imagery, the bottom of a smoking hole, left quite an impression and was brought to mind once again while reading today’s post.

#35 Aussie Roy on 12.04.12 at 11:30 pm

Aussie Update

A$ as a “safe haven” ??? – No

Australia has run a current account deficit for 30 years. This is not news. But surely this structural feature of the economy would figure in whether the Aussie dollar is actually a safe haven. According to London-based fund manager Andy Seaman, the real measure of a country’s safety and creditworthiness is how much it relies on foreign capital to finance its growth.

Seaman says Australia’s net foreign assets-to-GDP ratio is negative 81%. This is basically a measure of a country’s net foreign liabilities. Foreigners are cleaning up on their ownership of Australian assets, or at least own more Aussie assets than vice versa. Seaman reckons this is a sign of weakness.

http://www.dailyreckoning.com.au/why-you-should-take-interest-in-the-current-account-deficit/2012/12/05/

There goes the GDP growth

(ABS) today released the national accounts for the September quarter, which registered a 0.5% increase in real GDP over the quarter and a 3.1% rise over the year. The market had expected GDP to increase by 0.6% over the quarter. On a per capita basis, real GDP was flat, meaning that it just managed to keep up with population growth over the quarter.

Overall, this is a weak result. Growth of real GDP per capita was flat, growth in the non-mining economy is clearly weakening, and disposable incomes are on the slide. The RBA was clearly justified in reducing interest rates yesterday. And you can expect more rate cuts as the mining boom unwinds.

http://www.macrobusiness.com.au/2012/12/gdp-here-comes-the-income-shock/

Emergency levels in 2008 but not in 2012 ?

Today’s rate cut brings the cash rate to 3.00 per cent equal to the low recorded during the heights of the Global Financial Crisis (GFC), a point not missed by one journalist who quizzed Swan with “Didn’t you once refer to the level of three per cent as an emergency level, so how can today be all good news?”

In the two decades prior to 2008, Australian households had an insatiable appetite for debt. Household debt levels grew from 40% of household disposable income to just shy of 160%. 90 per cent of this debt was “invested” in the residential property market. But we were not alone, many countries saw similar unsustainable growth in household debt levels or house asset prices and this lead to the GFC.

Rather than try to encourage Australian’s away from their debt addiction, the Government embraced it. Free money was offered to naïve young Australian’s to leverage up into the Australian dream. Effectively instead of letting an unsustainable bubble burst, they assisted to turn a large bubble, into an even bigger one; I suppose you could call it a super bubble.

From the Government’s point of view, it was a leveraged stimulus plan

But our Government does have a plan. It hopes housing construction can take over from where our commodities super cycle left off. I guess all we need is more leverage and another housing grant.

http://www.whocrashedtheeconomy.com/blog/2012/12/unqualified-to-run-a-modern-economy/

#36 HogtownIndebted on 12.04.12 at 11:31 pm

The SFH in Toronto will indeed face pressure, methinks.

Here’s just a taste from about two hours ago: “huge property tax increases…” (Toronto Star) Could be part of a perfect storm affecting the strapped coffers of people who are mortgaged to the hilt with overpriced SFH stock.

http://www.thestar.com/news/gta/article/1297706–biggest-property-tax-increases-expected-in-davenport-willowdale-neighbourhoods

#37 Patiently Waiting on 12.04.12 at 11:35 pm

#13 Bigrider on 12.04.12 at 10:43 pm
Garth, any thoughts/knowledge on Fortress Capital. Seems to be a product offering 8% returns on syndicated mortgages, secured against real property in various cities across the country. Bonuses are offered as well.

The word is out and the products and there sellers seem to be securing monies from RRSP’s and non registered accounts en masse.

Any thoughts? Anyone?
—————————————————————

Sorry Bigrider, Garth is correct on this one – investing in high yielding second mortgaes works well in a rising real estate market, but is a great way to lose money in a real estate correction. These are mortgages where there is little if any equity, and the 2nd mortgage stands in second position behind the bank in any foreclosure. This means there isn’t usually anything left to pay out the second mortgage holder when sold through a court order sale … even the banks are vulnerable to losing money in these situations … some already are …

pw

#38 Miko on 12.04.12 at 11:39 pm

what is the best website for looking at listings in Toronto?
mls.ca won’t allow me to put in a neighbourhood, like “leaside”, unless I’m missing something?

vancouver has realtylink.org which is great for searching different hoods in Van.

thanks in advance for any help

#39 tony b on 12.04.12 at 11:40 pm

Lots of -SKY IS FALLING talk -again—every time Vancouver and BC deflate from their overpriced threshold–the highest in Canada all the doomers that worship the bible of Garth come out and exhibit their negativity

Vancouver and BC are having a correction–to assume its going on everywhere or will go on everywhere in Canada is saying that all conditions are the same—THIS IS FALSE—most of southern Ontario, Calgary and Edmonton are still going up

#26-Intersting Times–next you will be predicting a pestilence to invade Canada and help bring prices down—your pessimism is remarkable and not to hurt your feelings because I wish to stay positive but most of what you say is complete hokum–please reread–it sounds like someone on a bender

Where is the 50% crash?—where are condos at 50%–I’ll buy one?–

-the USA is actually leading the world out of the slowdown once the fiscal cliff negtiations are done

House prices there and consumer confidence is returning there—we follow them—my prediction is we go thru a soft correction or perhaps no correction—just stop going up for a few quarters

50% was more like depression era numbers

but

THE SKY IS Falling–the sky is falling

It is in BC but that is not all of Canada

#40 Guy_in_Regina on 12.04.12 at 11:48 pm

Sales down 25% YOY in Regina – extending the steep downward trend in sales to four months. Prices up rather sharply though.

#41 Dr.suess on 12.04.12 at 11:48 pm

Why was my post deleted

If this blog is unworthy of you, just leave. We’ll get by. — Garth

#42 brainsail on 12.04.12 at 11:52 pm

#39 tony b on 12.04.12 at 11:40 pm

“Calgary and Edmonton are still going up”

Calgary and Edmonton house prices peaked in May of 2007 and have not returned since. Where are you from, Mars?

#43 PoorgEoisie on 12.05.12 at 12:03 am

Smoking man… Massive job cuts?
http://www.cbc.ca/news/business/story/2012/12/04/cp-selling-midwest-line.html

4500 jobs yikes weren’t they just legislated back to work?

#44 Aussie Roy on 12.05.12 at 12:07 am

tony b
on 12.04.12 at 11:40 pm

Lots of -SKY IS FALLING talk

……………………………………………………………………

Only person I ever read that says the sky is falling, is you..

Is that because you can’t give a decent logical rebuttle?.

Seems to me only those who have nothing intelligent to add resort to calling people names.

Just a thought….

#45 Realtors in an all out PANIC! on 12.05.12 at 12:08 am

Look at realtor smokingman waiting all day and night to be the first to post on garths blog. This out of work realtor thinks his weak propaganda of lies will get people to run out and buy. Sorry noworkman but the housing crash is in full effect in 416 and all over the GTA. 1.2 milllion houses sitting empty now at 900K or 900 K houses sitting empty at $700K as prices crash and no one buys. Canadas housing ponzi was built on cheap and easy money CHMC. Without it prices would crash over 50% overnight. You know it , your criminal liar realtor friends know it. The bankers and mortgage brokers know it and every mark the talk carney knows it.

It’s going to be a NASTY housing crash realtors, A nasty crash. BTW the 600 B CHMC sub-prime loan limit is getting closer by the day. Bye bye criminal realtors. Oh ya my friends listed for flat fee $1000 and sold their house without a useless criminal realtor(since they priced it lower with the money they saved not paying a realtor). All you need is MLS since most realtors add zero value. It’s going to be a NASTY housing crash realtors, A nasty crash

Stop spitting. The blog’s getting slippery. — Garth

#46 Smoking Man on 12.05.12 at 12:10 am

#25 C

When I read your name had a great visual and it wasn’t Carney.

It’s called wishful bias. And I don’t have it. I count red dots on mls ca in three areas that have my interest.

When the dots vanish I do a drive by and see if the sign has sold on it or if it’s gone.

So they ain’t selling in two weeks, it takes 3. My point for prices to fall supply needs to out strip demand. I don’t see it. I see demand being cooled but I’m betting supply will dry up too.

You’re suffering wishful bias. Not me.

The second I sence a crash. I will be first to tell it here.

Not going to happen………….

NYC climate same as Toronto.

The rich are coming. O communist is scaring them away.

#47 Ronaldo on 12.05.12 at 12:13 am

#13 – Bigrider – sometimes if it sounds too good to be true, it just is. You may wish to read the link below. I know some who got caught up in this one. Need to do some dd before jumping into these things. Be careful.

http://www.cbc.ca/news/business/story/2005/04/05/eron-050405.html

#48 Debt's Dark Embrace on 12.05.12 at 12:18 am

Garth, what about that rrsp meltdown you were teasing us with a few weeks ago ?

#49 Humpty Dumpty on 12.05.12 at 12:20 am

Resonant Parallels

http://www.huffingtonpost.com/2012/12/04/carine-felizardo-brazils-miss-bum-bum_n_2237241.html?utm_hp_ref=canada&ir=Canada

#50 Ronaldo on 12.05.12 at 12:33 am

#39 tony b on 12.04.12 at 11:40 pm

“Calgary and Edmonton are still going up”

#42 – Brainsail -

”Calgary and Edmonton house prices peaked in May of 2007 and have not returned since. Where are you from, Mars?”

Brainsail, agree totally. Prices in most places are still below the 2007 peak by as much as 10%.

#51 prairie gal on 12.05.12 at 12:42 am

Bigrider on 12.04.12 at 10:43 pm
Garth, any thoughts/knowledge on Fortress Capital. Seems to be a product offering 8% returns on syndicated mortgages, secured against real property in various cities across the country. Bonuses are offered as well.

The word is out and the products and there sellers seem to be securing monies from RRSP’s and non registered accounts en masse.

Any thoughts? Anyone?

The slaughter of the yield pigs. — Garth

Echoes of USA 2005… Where are the securities regulators?

#52 Brad in Cowtown on 12.05.12 at 12:43 am

#42 brainsail
Calgary and Edmonton house prices peaked in May of 2007 and have not returned since. Where are you from, Mars?

Folks, can we all please agree that no chart goes up forever, without healthy corrections along the way?

Seriously, how can you not see how flawed your logic is by picking the all-time peak for comparing today’s prices to?

More relevant of course is that Calgary prices almost doubled in the two year span prior to that peak. It is, frankly, incredible that Calgary real estate did not correct more.

It is also more relevant that since the correction bottomed in late 2008/early 2009, Calgary prices ARE trending up again, albeit slowly.

But go ahead and pick the all-time high as a starting point for you analysis, if you wish. Do it at your own peril. Just like Garth does with the all-time peaks for gold and silver (completely ignoring the long term bullish trend upwards, for reasons known only to him).

#53 GTA Girl on 12.05.12 at 12:43 am

BigRider, you know our mutual friend has climbed Into bed with Fortress.

It’s a bad state. When all the sheep run for the exits, it’s awful easy to see the wolves.

#54 LaughingCon on 12.05.12 at 12:51 am

Re: Smoking Man / Whazzup
Posts #5, 15, 17, 21, 31, 46 – it is 6/49 as I type this.

Feeling the heat already???

Do not worry, there is still time until the tomorrow’s TREB release, and then we have elections end of January and budget discussion coupled with possible Ontario downgrade Feb/March – just before the the spring flood of listings and price “weakening” in the RE parlance – SFH Toronto included.

It is going to be a nasty crash realtors, a nasty crash.

#55 Soylent Green is People on 12.05.12 at 12:53 am

Like guy said above

OTTAWA – A new study reveals heavy lobbying by the oil and gas industry has far outstripped any other interest group seeking to influence the Harper government over the last four years.

The left-leaning Polaris Institute contends that the more than 2,700 meetings between oil and gas lobbyists and federal office holders since 2008 have helped turn Canada into what it calls a petro state.

The Conservative government continues to rewrite or repeal laws governing environmental assessments, navigable waterways and other measures it says are an impediment to major resource developments.

Using the lobbyist registry to track meetings, the Polaris study shows that oil and gas interests dwarfed contact by other major industry groups, including the mining industry, car makers and the forestry industry.

The study found that environmental groups were all but shut out by the Conservative government.

The reports’ authors say in a release that Canadians should be aware of the amount of lobbying by the oil and gas industry and its impact on public policy decisions.

http://www2.macleans.ca/2012/12/04/canada-is-a-petro-state-thanks-to-heavy-oil-and-gas-lobbying-polaris-study/

.

#56 Ronaldo on 12.05.12 at 1:02 am

http://www.breitbart.com/Big-Government/2012/11/29/1-Trillion-Dollar-Bailout-The-Student-Loan-Catch-22

Student loan bubble in the U.S. at 1 trillion. Seems Obama is looking at bailing them out too. Student loans up 74% since he took office. Kinda like the mortgage thing. Don’t have to have any credit rating and pretty much get what you want for anything you want. Bankruptcy, a heck of a way to start out a career.

#57 bill on 12.05.12 at 1:08 am

humpty dumpty……mulher melancia

#58 earlybird on 12.05.12 at 1:08 am

Greed works on the downside as well, as soon as the public whiffs falling PRICES, RE virgins or not, people will become greedy, and wait. Thats not the spiral we should hope for, but that tends to happen where humans are concerned…fear and greed.

#59 Soylent Green is People on 12.05.12 at 1:08 am

Dr. Shiv Chopra was a drug company insider, and also worked for what is now Health Canada — the Canadian equivalent of the FDA.

He is uniquely qualified to explain why no flu vaccine has ever worked, and that swine flu and avian flu are nothing more than hoaxes.

http://www.youtube.com/watch?v=ywyiwNgko30&NR=1

http://news.yahoo.com/ex-official-arrested-over-swine-flu-vaccines-111741414.html

.
.
.

#60 debtors_winners on 12.05.12 at 1:13 am

For the las 30 years government has been pouring credit money into canadian economy. The entire financial infrastructure has been created based on such economic model. Financial sector in the economy has increased from 20% in 70s to 50% nowadays. Those guys are very capable financially and might be close to some powerful decision makers, – they won’t let that “credit orgy” diminish.
Then, the prime rate has not reached 0% yet – so there is still room for bubble expansion… the only hope is that Flaherty is patriotic enough and won’t let it happen

#61 Knucklewalker on 12.05.12 at 1:35 am

Why dont you talk about the BOC Dude taking a UK job to side up with the ex BC premier… Sounds like a trend…

#62 martin9999 on 12.05.12 at 1:42 am

trader talk on the second picture !! try harder dude

#63 Nostradamus Le Mad Vlad on 12.05.12 at 1:45 am

-
While the world was in a financial tizzy, C – H -F bought in cheap rates and lax lending standards, to make it easy for sheeple to borrow themselves to death.

Wasn’t it convenient that when the world was in such a shambles, that hardly anyone bothered to take notice of, or question why and what the politicos were doing. Where were the critical thinkers in all this, someone who said “Whoa! Enough is enough! Don’t toy with the financial system!” Too late for anything good to come of this now. Red and Blue This is what TPTB want, because if people are arguing with one another, then they are not paying attention to what’s going on. Divide and conquer — it worked well for Harper.

“. . . people spending their money reducing debt instead of buying new stuff . . .” — That alone will stagnate any economy, plus a ton of boomers ready to retire, lost mfg. / IT jobs going the way of the dodo bird and numerous other things happening, the future will be interesting.
—-
#21 Smoking Man — “Lets see IMF looking at Canada as reserve currency . . .” — The IMF is the kiss of death, as proven by Ireland, Greece etc.!

Better to let a new gold-backed Renmibi supercede the US$. At least Kannaduhhh might have a slim chance of survival, but in what shape or form, no one knows.

#27 45north — “where’s BPOE ?” — Holed up in the 103 stages of grief. He’ll be back next lifecycle, still blathering on!

#46 Smoking Man — “The rich are coming. O communist is scaring them away.” — Fair assessment, but what if the CPC is ordered to follow Obomba’s lead? That will stir things up. Here’s a link and Manipulation. Don’t ever follow the herd!
*
Who Hates Putin? Interesting article. Socialists, Keynesians and others are among them, esp. for the reasons given; Entitlement Mentality Sheep are feeding at the trough again; Fedzilla Pension heist coming? US$3.5 tri.; Port Strike Containers can’t be unloaded; Housing Revival SMan, you may be on to something; Banks’ 1/4ly Profits from all the bailout money; Spending Cuts and Revenue Hikes Further wiping out of the middle class; Shanghai goes ballistic; Gold Bubble collapsing soon; Profitable oil field in the US, but Where does this come into play?
*
UFO — Strange Encounters Live Within Your Means — this 1:50 clip was shot in the south of France, just in time for the end of the Mayan age. Not sure what part it’s in; 8:47 clip DUMBS. See what they mean, and Trouble in Asia “The same organisations bolstering the opposition in Kuala Lumpur have successfully fomented events that led to the series of uprisings across the Arab World in 2011.”; Safety Gloves Even they may not be enough to handle this burger; Tall tale World’s tallest woman passes over; UK Cuisine Deep fried Xmas pudding; Swim Champs at nine months old; Obombination in bed with The Toilet, and couldn’t care less; Mitt Romney Remember him? Plate Tectonics Theory The earth is constantly changing; Karl Rove The bigger one gets . . .; Expensive Movies 25 of them; Ad of the Day Parallel parking with a twist; Starving Almost war time; New Bugatti Veyron Work of art.

#64 Hoof-Hearted on 12.05.12 at 1:47 am

As per the previous post..

Real Estate Auctions will slither their way across the border….as they should.

No better way to gauge the current market value of any commodity/asset than via a live auction with pre -approved financing.

#65 g-unit on 12.05.12 at 2:00 am

Enjoy.

http://www.safehaven.com/article/27916/exit-pursued-by-bear

http://www.zerohedge.com/news/2012-11-08/eight-scariest-charts-equity-bulls

#66 prairieperson on 12.05.12 at 2:12 am

Just heard that a friend of mine in Manitoba pulled his house off the market to wait until the spring. No offers. Nice place, nice location butthe asking is justabout double the assessed price. If he’dmoved earlier, hemight have got it. I knew we had to be close to a peak in prices when this summer I had people with no RE experience saying I just bought a lot at the beaches, you can’t lose money. They just keep going up. When theshoe shine boy starts giving tips on the market, it’s time to sell. When people with no experience in RE start talking about borrowing a million dollars and building a house to flip there is no place to go but down.
Unlike the tulip craze, there is some value in property and structures adn people do have to have some place to live so the fall will not be so dramatic. However, anyone who has to sell will get hurt. Came across this ad on Kijii today, “Got sell ASAP”. Now, there’s an ad that smacks of desperation and doesn’t put the owner in a good position for negotiating price. What, I wonder, would an auction bring?

#67 TRT on 12.05.12 at 2:46 am

Smoking Man,

I agree. SFH (detached) will not fall in price in Toronto or Vancouver by that much because they are becoming a lesser percentage of the overall stock of housing. Condos and Townhomes are the bulk of new construction — These will take a haircut.

As detached homes become ‘rarer’, the entry point to get into one ($$) will get higher and higher. Rarer — because of land use restrictions (ALR, Greenbelt, etc.)

For example, if only 20% of Households are in a detached home, do you really think these homes will revert to 3X average income. They will only be meant for the Top ’20%’ .Good Luck!

#68 Van guy on 12.05.12 at 2:49 am

I’m not sure why my posts didn’t make it. I just brought some really good individual sales stats showing some scary numbers in Richmond. Garth, do you own in Richmond or something?

#69 The end is nigh on 12.05.12 at 3:00 am

# 26 int times.
Right on.
Pupils listen to the wise man.

#70 Canuck Abroad on 12.05.12 at 3:06 am

38 Miko – mls.ca (or realtor.ca) is the one that I use but you need to know the code for the neighbourhood in Toronto that you are looking for. So in the location box, you will type in “Toronto c9″ and it will find you all the homes in Rosedale / Moore Park / Leaside.

Neighbourhoods are here:

http://thetorontolist.com/toronto-mls-zones.php

You can probably type Leaside into Craigslist or Kajiji as well, but I have never tried that…

#71 Canuck Abroad on 12.05.12 at 3:09 am

Oops, my bad. Make that “Toronto c11″.

#72 Bob, Just Bob on 12.05.12 at 3:22 am

@ Aleksey said: “2013 will be unlucky number for many people in Vancouver”

Nah, there aren’t any 4′s in 2013.

#73 Canuck Abroad on 12.05.12 at 3:33 am

36 HogtownIndebted – Thanks for posting that. A big spike in property taxes will probably cause some marginal selling, eg by people who were already on the edge budget-wise and will just want to end the pain. If they can convince themselves prices will fall for a few more years they will list.

Saw this in Whistler about 8-10 years back when property prices spiked – many long-time locals selling up because they could no longer afford the property taxes. A year or two later the bubble had burst and prices were falling.

The chart of price/sq ft in the below is interesting. You can see Whistler Benchlands topped out at nearly $800 back in 2004. Then prices fell, which was blamed on the GFC. Partly true, because most of the sellers back then were Americans who needed the cash (also because the stronger Cdn dollar was making running costs go up for them). And it was partly just natural unwind of the bubble years pre 2004. As you can see, prices have still not recovered.

http://www.whistlerplatinum.com/newsletter/nov_2010/whistler-real-estate-outlook.pdf

My expectation is that you will see another decline in price/sq ft, this time because all the BC purchases who bought from the fleeing Americans post 2005-6 will now need to dump their trophy properties for the same reason the Americans did. ‘Cause history rhymes etc…

#74 eagle eyes on 12.05.12 at 3:43 am

Garth, the pendulum has swing far left in Richmond –
204-3411 Springfield Drive
Assessed – $264,900
Listed – $264,900 May 2012 Court Ordered Sale
Reduced – $139,900 December 2012
Not yet sold. Asking 48% less than tax assessment.

#75 Canuck Abroad on 12.05.12 at 3:52 am

And just for a little bit of extra context, the place I bought in Whistler, I paid $120/ sq ft in 1994 (also on the Benchlands). So, prices increased 6X in ten years before they started to fall. Anybody who thinks prices are finished falling (like the realtor who assembled the chart) is probably being optimistic…

Anyone with a proper long term (20 years?) chart of Whistler prices I would be interested to see it, kindly post.

#76 Canuck Abroad on 12.05.12 at 4:03 am

Some excellent charts of possible price outcomes for Vancouver:

http://vreaa.wordpress.com/2010/09/11/five-charts-predicting-future-vancouver-housing-prices-with-the-aid-of-technical-analysis/

#77 Moo Latté on 12.05.12 at 4:14 am

And

#78 Vancouver_Bear on 12.05.12 at 4:16 am

#114tony b on 12.03.12 at 2:53 pm

I never said that “sky was falling”, our government already admitted it by going into damage control mode and tightened the mortgage rules. Before GFC Fannie and Freddie held around 5 trillion of liability on it’s books, CMHC now holds close to 600 billion of mortgages. Our economy is 10 times smaller then of US, so we are in a deeper dodo then Americans ever were. Where it does not make sense?
You said that Americans were lending money to deadbeats, and that ended with GFC. I know a few Canadians of that kind who rushed to buy with 105%financing before rules changed this year. And guess what they got the financing and live happily, ’cause when you owe $100 to somebody it’s your problem to pay it back. When you owe 500k to somebody it’s the problem of the lender/insurer. That is the mentality of local sheeple here. Will this end well? Let’s wait and see. My guees is not.

#79 Moo Latté on 12.05.12 at 4:16 am

And don’t forget, a 20% drop means you need a 25% gain to be back to normal. Math is funny that way. Or put another way… a 100% increase in price only needs a 50% drop to be back to square 1.

$100k – 20% = $80k
80k + 20% = $96k
80k + 25% = $100k

#80 Munch on 12.05.12 at 4:16 am

LAST!!!

Last???

#81 EinsatzgruppenVancouver on 12.05.12 at 5:05 am

@ #46 smoking man – ok, be honest, we’re all friends here, you’re a realtor or something, right? You have to have _some_ financial stake in this, some “dog in this fight”, right? Who was it said “it is difficult to get a man to understand something, when his paycheque depends on him not understanding it…”?

Your point about supply and demand is normally a good one, if we were talking about a normal market for goods or labor or services. But we aren’t. Real estate isn’t an adam-smith-style free market, it’s a collection of distortions of a free market.

Prices aren’t set by rational consumer decisions, they’re set by how much the bank will lend, which is a function of their financial situation and interest rates and CMHC lending rules. So supply and demand aren’t really that relevant to prices for homes in Canada right now.

But of course, that’s just my opinion. Opinions are like assholes, everybody’s got one. So how about you put your money where your mouth is? Go over to longbets.org, it lets you make a prediction about the future, bet on it, proceeds to charity of your choice. So if you make a prediction like “the price of a sfh in toronto, one year from now, will be no lower than it is today”, I’ll take the other side of that for $1000. According to you you’ve got tons of money, surely you can afford to toss $1000 to doctors without borders or the hurricane sandy relief or some worthy cause?

Surely saunt Garth can give us some advice on coming up with a fair way to measure this, what metric to use, etc? He seems like a guy who’s good with numbers…

I look forward to your reply! But I’m going to predict you’ll have some reason why you can’t put your money where your mouth is…

#82 Form Man on 12.05.12 at 5:08 am

#39 tony b

how about brand new condos at more than 50% off ?

http://lakewindliving.com/

#83 Asse on 12.05.12 at 5:50 am

Toronto prices may fall. The hit will be condos, they will get hammered but it may take much longer than the meltdown being witnessed in Vancouver. While the influx of new condos coming on the market is large what will slow it down is the fact that they can only build them so fast. Sfh’s with good postal codes may hardly be affected. There’s just too much demand and very little supply as opposed to the 905. It would take a realignment of Torontos job market and if that happens all bets are off. If we have another serious gasoline increase the 905 will be battered…except Mississauga and Brampton…they have multiple incomes. Milton, Stoufville, Brantford and other ‘commuter’ communities will be toast.
Property taxes will increase, I got my reassessment and it’s large but it will be phased in over a couple of years. The market in Torontos Sfh’s has changed. People who buy have excellent jobs or an inheritance. Blue collar just can’t afford, or aren’t willing to spend this much money. I see it with my neighbors. The new owners are professionals who work in Toronto and/or used to have condos but have decided to settle down and commute/neighborhood is important/justified to them.

#84 Buy? Curious? on 12.05.12 at 5:59 am

Hey, I didn’t edit this but check out this video! It’s actually real! It’s like Arnold Scharzenneger with AIDS is interviewing a real, Real Estate agent.

How can you not understand his logic? Oh. He’s from Otta-wha?

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

#85 Beach on 12.05.12 at 6:00 am

#46 Smoking man

The trouble with counting on the US rich to flock to the cultural desert that is TO is that the long arm of Uncle Sam extends beyond US borders. Double taxation and the requirement to report all off shore income means that Americans can run but not hide. And if they do try to hide, well, you’ve seen how ready the IRS and other federal institutions are to prosecute. Canada is not going to shelter these guys and there is nothing that would play better domestically for Obama than stringing up a few rich guys that bugged out on the Stars and Stripes.

#86 Johnny D on 12.05.12 at 6:02 am

More garbage from Regina’s favorite real estate flyer ‘The Leader Post’

http://www.leaderpost.com/business/Home+sales+down+prices+November/7647057/story.html

#87 drydock on 12.05.12 at 7:22 am

#46

Lived in Toronto for seven years,there is no way in hell that the “climate” in Toronto is the same as NYC.

When was the last time the TTC subway flooded? — Garth

#88 Ralph Cramdown on 12.05.12 at 8:06 am

“NYC climate same as Toronto.”

I’ve heard a lot of real estate bull over the years, but that’s a classic.

#89 Victor V on 12.05.12 at 9:08 am

http://www.thestar.com/business/article/1296946–more-trump-hotel-buyers-turn-to-courts

Younho Song saw in Donald Trump a way to attain what she wanted most in life — enough money to put her daughter through law school and a little income so she wouldn’t be a burden in old age.

So did her good friend Young-Sook Lee.

Together, the women — Song, 51, is divorced, Lee, 58, is widowed — pooled their meagre life savings to buy what appeared to be pure Hollywood gold, a stake in one of the glitziest highrise projects to hit the Toronto skyline, the Trump International Hotel and Tower.

Today, Song and Lee fear they have not only lost their $100,000 deposit on a hotel-condo suite in the project, but that they continue to rack up thousands of dollars in outstanding maintenance fees and taxes each month. On top of that, they face huge legal fees to get out of a $753,000 deal penned in 2011.

#90 jess on 12.05.12 at 9:14 am

routers

The Phantom Accounts Organized Crime and Corruption Reporting Project
Nov 20 – A story of laundering US$680 million a year through a Latvian bank account registered to a New Zealand shell company. “Tracing the transactions took reporters to Chisinau, Moscow, Kiev, Riga, Bucharest, London and Auckland, cities that have become hubs in a huge network of banks, proxies, financial consultants and offshore companies that launder money and hide stolen assets …
All of these companies were established by the Taylor network in New Zealand. The companies show up on Suspicious Activity Reports, reports banks file when they suspect money laundering. These reports became the basis for a US government money laundering case against Wachovia which was accused of laundering billions of dollars for the Mexican Sinaloa drug cartel. Wachovia was fined US$50 million and it surrendered US$110 million in profit, which was the highest fine levied against a bank in the US history

http://www.reportingproject.net/proxy/en/the-phantom-accounts

#91 Victor V on 12.05.12 at 9:16 am

http://www.thestar.com/business/article/1297605–buyers-in-toronto-s-trump-international-hotel-run-out-of-options

Panicked buyers in Toronto’s Trump International Hotel and Tower have run out of options.

Developer Talon International Inc. announced Tuesday that buyers have until Dec. 13 to come up with final payments on pricey hotel-condo units, now that the Ontario Securities Commission has decided it won’t take regulatory action against the developer.

Tuesday’s developments leave many buyers in a horrible Catch-22 — owing an average of more than $500,000 each on hotel-condo units that are costing them thousands of dollars per month to keep, and unable to get conventional financing from banks that are taking the view the units are commercial ventures rather than real estate investments.

“That could mean you’re going to see buyers just walk away. We haven’t seen that in a while — since the (real estate bust of the) 1980s,” said mortgage broker Steve Garganis.

“These are very specialized projects. They aren’t like conventional condos and lenders generally consider them risky. You have to have deep pockets if you are going to get involved in something like this.”

One buyer who was interviewed by OSC staff as part of their probe of Talon’s sales tactics, said he was “shocked” by Tuesday’s announcement from the commission that “we have determined not to pursue regulatory action.”

“I’m extremely disappointed,” said the buyer, a blue-collar worker who borrowed the $175,000 down payment from his immigrant parents and has run out of money to cover the thousands of dollars per month in maintenance fees and taxes.

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

This is not ending well.

#92 john m on 12.05.12 at 9:26 am

“F”-remarks while taking credit for the slow down—-”Less demand, lower prices, modestly, in the housing market are much better for Canadians than a boom followed by a bust. So I’m all for a soft landing.”……..Is this not what he created?

#93 Bigrider on 12.05.12 at 9:30 am

#53 GTA Girl, #51 Prairiegirl #37 patientlywaiting.

I am aware of all you have said regarding Fortress Capital. I thought I would mention it, knowing it would ellicit a response from Garth, as a warning that momentum for the product has reached a crescendo and has reached every corner of the GTA.

GTA girl, since we both seem to be closest to the ground here in the GTA, I smell an ugly end to this ,even as RRSP’s are raped of their financial market holdings for the ‘guarantee’ of investing in RE projects throughout the city.

Seriously, why would a builder like Brad Lamb, or any other deeply pocketed developer need to borrow money at an 8% rate plus fees..silly.

#94 Tony Right on 12.05.12 at 9:42 am

Going to get my eyes checked because I swear I just saw a chart that shows that the price of a SFH home in Vancouver more than doubled in 4 years. After a world meltdown!! Must be seeing things.

#95 willworkforpickles on 12.05.12 at 9:48 am

The delusional will use their minds to keep re prices up and rising. In their minds . In their minds. They already are. In their minds. In their minds.

#96 Waterloo Resident on 12.05.12 at 9:50 am

HEY EVERYBODY, check the stats from these 2 links, they show that Canada is probably in trouble.

First one:
http://www.bloomberg.com/news/2012-12-05/swedish-household-debt-growth-is-swedbank-s-biggest-worry.html

That one says that Sweden is worried because consumer debt there is at 170%. Well, that’s funny, we are almost there (165%), yet no one here in Canada seems to be worried? Do you think that maybe the Swedes know something that we don’t?

Then there’s this link:
http://finance.yahoo.com/news/finlands-economy-slips-recession-103920157.html

Finland’s economy is a lot like Canada’s; its dependent upon EXPORTS, and for that reason its fallen into recession. Oops, isn’t our economy also dependent upon exports; so won’t our economy ALSO start to slow down soon from the 2% growth we were enjoying?

Both of these articles are a bit worrying.

Oh yeah; Toyota has frozen all new hire’s pay (contract workers) at $18 or less for the next 35 years !!! 35 years ! Holly Cow.

#97 hangfire on 12.05.12 at 9:54 am

And so the realtard lobby fights back with crap like ‘livability surveys’?

http://www.vancouversun.com/business/Vancouver+ranks+fifth+global+2012+quality+living+rankings/7649523/story.html

The wicked sin in all these studies is that they do not have to disclose the criteria for the study and who has paid for it. Just like when Vancouver fought back against the British press exposing the nasty and very real homelessness issue by taking out ads in Italian newspapers and then citing them as ‘source material’….total lies…but without even the minimal consumer prtoection laws being applied to disclosure principals the people of Vancouver will continue to soak in a bath tub of BS when it comes to the tourist and real estate investment lobbies.

What constitutes a ‘standard’ when it comes to livability……one thing they ‘count’ is the number of civil servants per capita…….and tyhats supposed to be a good thing? It’s like you’re momma taught you…”Believe half of what you see and less of what you read”.

#98 Austrian school on 12.05.12 at 9:55 am

Thank god, I thought gold was in a bubble.

http://www.businessinsider.com/goldman-calls-the-end-of-the-gold-bull-market-2012-12

#99 LaughingCon on 12.05.12 at 10:02 am

Note to Smoking Man /Whazzup

Check the TREB results for SFH in Toronto 416 – down 3.8% YOY for November. Sales down 18.5%.
Good luck with your prediction power.

It is going to be a nasty crash realtors, a nasty crash!

#100 JustTryingToProtectEquity on 12.05.12 at 10:03 am

#81 Asse

You talk as though housing corrections never happen in the 416. My wife and I bought a SFH in Bloor West Village 16 years ago, 1996, for $325K. Eighteen months before we bought it, it was listed at $580K. We have many friends in our neighbourhood who fared even better than us… again, literally saving hundreds of thousands of dollars in a year and a half. Having paid off our mortgage, we sold our house last Spring for $975K. Three times what we bought it for. Madness. We’re now renting in the neighbourhood and following Mr. Turner’s investment directives. (Though we are leaving much of it in cash too, for the time being). The simple fact is this, far too many of the people buying condos and houses in Toronto are too indebted. They’re buying homes with one mortgage and taking out second mortgages to gut and renovate them. They have extended lines of credit, leased vehicles. Sooner or later, it will catch up to them. We’re already seeing reduced prices in the High Park/Bloor West area. We recently saw a home, originally listed at $1.2M, reduced by $200K, then taken off the market, presumably to relist and sell in the Spring? When the condo market deflates and their owners realize that they’ll no longer get what they had hoped for in selling them, the SFH market will decline in price too. In our neighbourhood, many of the homes that are being bought are people moving up from the condos. Prices going down in condos leads to prices going down in SFHs. Prices going down leads to panic. Especially if you’ve bought in the last few years and you find yourself under water. Selling isn’t for everybody, some people are well diversified, with no debt. But Stats Canada tells us many of us will be in debt when we retire. If you’re nearing retirement and your plan is for your home to even partially fund your retirement… now is the time to
sell. If you’re young, in your 30s, and have just bought in the last two to three years, with a first and second mortgage (very common) and leased vehicles (also very common), you are in serious financial trouble. Good luck to everyone!

#101 Smoking Man on 12.05.12 at 10:13 am

LaughingCon.

Treb report out.

Head line reads

SALES DIP IN NOV WHILE SELLING PRICE INCREASES.

Ave price up 1.6 precent. Sales down 16 precent.

Last year a record year for sales.

Natsy crash lol

Nov and Dec. Always slowest time of year for sales.

#102 Toronto_CA on 12.05.12 at 10:18 am

#92 Tony Right on 12.05.12 at 9:42 am

What you saw was the cost of borrowing money drop 50% after a world meltdown.

#103 Toronto_CA on 12.05.12 at 10:21 am

“When was the last time the TTC subway flooded? — Garth”

Really Garth? Your memory is that short?

http://www.cbc.ca/news/canada/toronto/story/2012/06/01/toronto-ttc-shutdown.html

Not that long ago, it turns out.

A one-station event? You jest. — Garth

#104 JohnnyBoy on 12.05.12 at 10:30 am

Men can never be free, because they’re weak, corrupt, worthless… and restless. The people believe in authority. They’ve grown tired of waiting for miracle or mystery. Invest in condos, flip SFH’s. Speculators sitting in the dark like giant arachnids waiting for the their next prey to foolishly saunter into the trap. Now the housing investment bondage fools are going to shrivel up and die. The prey or “sheep” have noticed that their farmer has not given them more food in the trough this year, in fact he has cut back on the water, government dogs that protect them, and he may even send them to another land to do their work. These sheep won’t wonder into the spider’s lair. They are huddling together and talking to each other….They say “Don’t buyyyyyyy, buyyyyyyy.

#105 Simon on 12.05.12 at 10:36 am

Hey Garth,

I just took your advice, sold my home and went liquid. I am renting a semi-detached house since yesterday.

You were spot on calling the 30% drop in Vancouver! I’d like to see how good you are predicting the drop in the Ottawa market for SFH. Care to make a guess, just for giggles?

Cheers!

Simon

#106 Greg on 12.05.12 at 10:42 am

To whoever posted about Fortress Capital – Google the name “Jawad Rathore” their president and CEO. Interesting history with both the OSC and MFDA.

#107 jess on 12.05.12 at 10:42 am

And so it is Christmas…

http://www.uncounted.org.uk/2012/11/fighting-inequality-to-bend-the-arc-of-history/
When World Bank President Jim Yong Kim addressed the joint boards of governors of the Bank and the IMF in Tokyo last month, he took a powerful theme. President Kim cited Dr Martin Luther King’s optimistic view, that while “the arc of the moral universe is long, it bends towards justice.” With this starting point, President Kim talked of his and the Bank’s resolve to pursue justice, “because wherever there is poverty and inequality, there is too often injustice.” The scenario driving him, he said, “is the path where we come together to bend the arc of history and accelerate progress.”

Save the Children’s new report, Born Equal, presents new evidence on just how far we will have to bend the arc.
http://www.savethechildren.org.uk/sites/default/files/images/Born_Equal.pdf
=========

Caught on polycarbonate

western state of North Rhine-Westphalia bought 4
http://www.sueddeutsche.de/wirtschaft/deutsche-kunden-bei-schweizer-bank-ubs-daten-von-steuer-cd-enthuellen-milliarden-betrug-1.1540630

http://www.spiegel.de/international/germany/german-city-finds-3-billion-euros-hidden-by-tax-evaders-in-swiss-bank-a-870831.html

“Public prosecutors in the western German city of Bochum have found some €2.9 billion hidden in accounts at the Swiss bank UBS after analyzing a CD with the names and bank data of clients thought to be evading taxes, according to a Monday newspaper report. Authorities said the discovery was one of their most lucrative ever.
=
============
The Idea
map of the smart grid
http://www.spiegel.de/flash/0,5532,24396,00.html

launched in 2009 Desertec ( energy from the desert)
http://www.spiegel.de/international/europe/the-desertec-solar-energy-project-has-run-into-trouble-a-867077.html

#108 refinow on 12.05.12 at 10:52 am

After 20 years brokering mortgages, when people keep saying it will only happen in BC, and the rest of Canada is going to be spared, give your heads a shake.

Mortgage lending policies are “National Policies” that will affect every province.

It is very evident in Vancouver because they blew more air into their bubble.

To say that prices have not dropped in Ontario, just look at the # of price reductions on the MLS each and every day.

Talk to your friendly neighborhood realtor and ask him how things are, when he first answers “Unbelievable, busiest i have ever been”, just ask again…Really ?? Most will then admit things have really dropped off.

#109 Patiently Waiting on 12.05.12 at 10:54 am

Victor V on 12.05.12 at 9:16 am
http://www.thestar.com/business/article/1297605–buyers-in-toronto-s-trump-international-hotel-run-out-of-options

Panicked buyers in Toronto’s Trump International Hotel and Tower have run out of options.

“That could mean you’re going to see buyers just walk away. We haven’t seen that in a while — since the (real estate bust of the) 1980s,” said mortgage broker Steve Garganis.

One buyer who was interviewed by OSC staff as part of their probe of Talon’s sales tactics, said he was “shocked” by Tuesday’s announcement from the commission that “we have determined not to pursue regulatory action.”

“I’m extremely disappointed,” said the buyer, a blue-collar worker who borrowed the $175,000 down payment from his immigrant parents and has run out of money to cover the thousands of dollars per month in maintenance fees and taxes.

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

First they allowed their greed to drink the real estate cool aid, now that things didn”t turn out they all are crying for a bail out … unfortunately we will see more of this in the near future as this real estate bubble unwinds … it is unlikely they will get any support from OSC or any other similar body as doing so would open the flood gates …

pw

#110 PoorgEoisie on 12.05.12 at 11:07 am

A young family in TO has a few choices when purchasing a home: condo, SFH, townhouse etc. Right now there are many hundreds of condo units that are priced between 500k-1mil. Surprisingly, people have bought these units instead of SFHs.
So if condos get creamed 35-40%, they will only become more attractive when compared to SFH. Personally, I would prefer an SFH but such a correction could swing me the other way. My mom thinks I’m special but I don’t think my line of thinking is all that unique. There will be many like me and that will cause a drain on suburban SFH demand. Sure if your neighbour “plays” for the leafs or everyone one your street is a multi-millionaire you may not get hit as hard but I’m not sure anywhere with a substantial commute will get off easy.
Even if the states goes over the cliff people making more than 250k will be paying less taxes than if they were in Canada. Additionally, just about everything costs more here so why would rich Americans come here by the truckload?

#111 Daisy Mae on 12.05.12 at 11:10 am

#22 Editor: “….you stand to lose so much more proportionally from an overvalued house.”

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

If it’s overvalued, they deserve to lose. They’re being greedy….

#112 Daisy Mae on 12.05.12 at 11:16 am

#23 Boomer21: “Alright, I have the flu and feel crappy, rant over. BTW if you haven’t had the flu shot, get it, trust me.”

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

Yes. Get your shot. At Kelownas’ general hospital staff/volunteers who do NOT get their flu shot must wear a face mask from December 1st onward.

Hope you’re feeling better soon, Boomer21….

#113 Mel Eager on 12.05.12 at 11:19 am

#3 Salonist

I wholeheartedly agree! I live in Oakville, south of the QEW, West end and for sales signs are going up, and many properties are getting sold! Granted, I do not know what they sold for (thanks for nothing, MLS) can only comment on what they were listed at. Anyhow, there is sales activity, and does not seem to be a stagnant market here. Cheers, Mel.

#114 squidly77 on 12.05.12 at 11:23 am

Trusting people that need to sell in Calgary put their faith in desperate pump and dump realtors that spew here and on other sites that Calgary’s on fire people ! Cant you see it.

Sales are up 5% YOY they belch, while failing to mention that sales are down 30% plus when compared to just a few short years ago.

Truth is, Calgary prices are way down when compared to selling prices of almost 6 years ago. No Calgary house price inflation at all. Nada. Most Calgary neighbourhoods are down 15% plus, and falling. Fast.

Unscrupulous realtors that are desperate to seduce and sucker in a few more trusting and innocent young families into buying into what is very obviously a dead market, embarrass the very few good and honest realtors Calgary has.

Brad in Calgary, you should be shamed. You sir are a liar.

#115 Daisy Mae on 12.05.12 at 11:35 am

#39 Tony B: “………most of southern Ontario, Calgary and Edmonton are still going up.”

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

Asking prices can go as high as sellers want to put them. What is the advantage if there are no buyers?

#116 Daisy Mae on 12.05.12 at 11:43 am

“Stop spitting. The blog’s getting slippery. — Garth”

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

My first laugh of the day! You’re a riot! LOL

#117 squidly77 on 12.05.12 at 11:50 am

Calgary home sales worse now than in 2001. In 2001 Calgarys population was 25% less than in 2011.
http://tombushey.ca/_media/Images/Calgary-SF-Condo-SalesYTD.jpg

Some people can not see through the stink.

#118 Paul on 12.05.12 at 11:52 am

#110 Daisy Mae on 12.05.12 at 11:16 am
#23 Boomer21: “Alright, I have the flu and feel crappy, rant over. BTW if you haven’t had the flu shot, get it, trust me.”

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

Yes. Get your shot. At Kelownas’ general hospital staff/volunteers who do NOT get their flu shot must wear a face mask from December 1st onward.

Hope you’re feeling better soon, Boomer21….

Well I hope thats not true. everyone walking into a hospital to visit or anything else should be required to wear a mask. You carry the flu virus before showing symptoms. Lets make it fair instead of picking on the ones that spend their lives helping us.

http://www.cbc.ca/news/canada/british-columbia/story/2012/12/04/bc-health-workers-flu-shot.html

#119 squidly77 on 12.05.12 at 11:53 am

Yeah baby, lets rock and roll in Cowtown.
http://frasergrouphomes.com/files/2012/01/CREB-GRAPH-Jan-31.jpg

#120 Tony on 12.05.12 at 12:00 pm

Re: #4 jim d on 12.04.12 at 10:28 pm

In Edmonton people only buy to rent the place out. Many houses sit on mls for decades without selling. You have to look at the vacancy rate which actually is falling. The property tax yearly increases were so large rents actually increased or the owners would all go bankrupt. Lowball offers by 50 percent off the asking price and if no one bites (not likely) don’t buy.

#121 squidly77 on 12.05.12 at 12:06 pm

Some people and surprisingly some analyst are easily duped, sure sales are up in Calgary this year, but compared to what ?

Its like saying, last year I was $400 short of making the rent payment, but things are so much better now, I am only $200 short this month.

Short is short and down is never up.

Calgary home sales have crashed when compared to years past.

#122 live within your means on 12.05.12 at 12:09 pm

#63 Nostradamus Le Mad Vlad on 12.05.12 at 1:45 am

UFO — Strange Encounters Live Within Your Means — this 1:50 clip was shot in the south of France, just in time for the end of the Mayan age. Not sure what part it’s in.

IIRC, it’s in the Languedoc-Rousillon region near the Spanish border. We were there last summer visiting family. Never heard of Bugarach & don’t believe in this end of the world garbage.

#123 Tony on 12.05.12 at 12:11 pm

Re: #39 tony b on 12.04.12 at 11:40 pm

No city in southern Ontario is going up in price. Townhouses and apartments in both Calgary and Edmonton are still still fifty percent lower than the 2007 (Edmonton) and 2008 peak (Calgary). Houses did rebound somewhat off the 2007 lows. America is kaput housing is falling in price again month over month unemployment is increasing and will probably hit 25 to 30 percent in the next decade.

#124 Country Girl on 12.05.12 at 12:21 pm

#94 Waterloo Resident – Oh yeah; Toyota has frozen all new hire’s pay (contract workers) at $18 or less for the next 35 years !!! 35 years ! Holly Cow.

Unless a contract worker has a 35-year contract, Toyota can’t feeeze their pay for 35 years.

#125 JohnnyBoy on 12.05.12 at 12:23 pm

Warrens Rules!!!

Rule No. 1: Never lose money.
Rule No. 2: Never forget Rule No. 1.
He never speculates or gambles. He makes sure that he knows a properties value and that it will far outweigh the price that he paid for, and that is how he sticks to rule No.1.

#126 Brad in Calgary on 12.05.12 at 12:31 pm

#112 squidly77 on 12.05.12 at 11:23 am Truth is, Calgary prices are way down when compared to selling prices of almost 6 years ago.

Holy cow. No wonder you had to shut down your blog if it was filled with blatant lies like that one.
Folks, look up the numbers for yourself! They are readily available. Don’t take my word for it. Certainly don’t take his.
Google “Calgary historical house prices” – go ahead!
Squid is claiming prices are “way down” compared to six years ago. Allrighty then – let’s have a look:

October 2006 – SFH Calgary average price 423,870
October 2012 – SFH Calgary average price 492,777

What EXACTLY is your definition of “way down” Squid ?

Pure hilarity.

#127 PERPLEXED on 12.05.12 at 12:44 pm

HEY LOOKS LIKE EVERYONE IS SOOOOO INTERESTED IN YOUR OPINION OF THE EDMONTON SITUATION.

#128 -=jwk=- on 12.05.12 at 12:44 pm

Speaking of hair dressers. I truly, honestly knew a hairdresser who had over $1m in mortgages. When I was living in LA (2000-2005), and going through the same real estate boom as canada is experiencing now my hair cutter had 3 properties with over $1m in mortgages. She wasn’t even a stylist, worked at Supercuts in Buena park (beach blvd, north of la palma)just a busty, top button undone, curvy red head with great hands my roomates and I used to look forward to wash/massage/cuts.

A the time I had a few condos, roomate had 5 or6 in play. Nothing unusual there. But she was into new construction, so no rental income. I asked her how she floated $6000/mo in mortgage payements. Simple, she didn’t. They always sell yourmortgage a few times anyway, plus you have 90 days to pay before they get serious. So as long as you flip within 6 months or so she never paid a dime. Just let the interest accrue, no big deal. Her ‘mortgage guy’ was awesome and showed her how to do this….

But it’s different here. The Trump buyers were all ‘sophisticated’ investors, not like Sherry!

#129 The under class on 12.05.12 at 12:54 pm

Harper and his belief in the religion of macro economics. You are now witnessing the effect of bean counters and policy makers forcing their misinformed policies on the public.

The every man is falling behind while the rich count their stacks of money and change the financial game to benefit themselves with no regard for the real world consequences

The rich being corrupted by greed is nothing new but the information age has made it more obvious then ever.

Stop buying into the bankers schemes and the politicians prose. They have an agenda and it does not look out for your best interests.

Educate yourself and read between the lines.

#130 Toronto_CA on 12.05.12 at 12:55 pm

http://www.thestar.com/business/article/1297813–condos-take-the-biggest-hit-as-home-sales-drop-in-the-gta

Toronto press reports starting to make it out.

“Condos took the biggest hit with resale transactions down 25.5 per cent across the GTA and prices down an average of 2.3 per cent. The biggest declines in condo prices were in the City of Toronto, where they were down almost 4 per cent year over year.”

So 4% declines in “average” price, although who knows what the median was. I know the units are smaller that are being sold; for condos I wish we could get the price per square foot…but then you’d also need to factor in the condo fees as in some of the older condo buildings they are like a second mortgage.

#131 Dr. WAYNE on 12.05.12 at 12:59 pm

#1 I am Furst! on 12.04.12 at 10:24 pm

Furrrst!

BRILLIANT !!! You are in fact Furrrst … you’ve attained your life-long dream … your life is now, undoubtedly, complete … the universe has smiled favourably on you … however, you ‘should’ add the postscript ” I am an a$$hole” …

#132 Sebee on 12.05.12 at 1:02 pm

How honourable! Sellers are willing to go down with the ship and will pull listed properties off the market instead of selling for less. If only the captain of the Concordia had such honour to go down with the ship! How many people are still holding onto RIM hoping that it will come back above $100?

http://www.theglobeandmail.com/report-on-business/top-business-stories/sellers-in-toronto-vancouver-just-say-no-as-housing-markets-sink/article5991067/

#133 Dr. WAYNE on 12.05.12 at 1:02 pm

#24 Grim Reaper/Crypt Speculator on 12.04.12 at 11:07 pm

Dr Wanker……Donald TRUMPed again!

Hey Grim … it’s so reassuring to know that at least ‘someone’ can’t wait to see my post.

#134 Marc on 12.05.12 at 1:05 pm

Already there. We have started paying down debt and cutting costs on all kinds of stuff. And we’re just 36 and 37! We own our home with very little mortgage left on it (five more years) and we’re looking to build up savings and kill our debt, so…yeah. That’s us at this point. Yay caution and prudence!

#135 T.O. Bubble Boy on 12.05.12 at 1:09 pm

Average price of a Toronto (416) Detached House now down 12.7% from the Mid-May peak:

Mid-May: $835,522
http://www.torontorealestateboard.com/market_news/release_market_updates/news2012/nr_mid_month_0512.htm

November: $741,480
http://www.torontorealestateboard.com/market_news/release_market_updates/news2012/nr_market_watch_1112.htm

#136 drydock on 12.05.12 at 1:14 pm

#85

They bounced back from 9/11, flooded subways won’t stop them.But flooded subways are indicative of rising water levels caused by melting ice.Everyone will be affected by melting ice no matter where you are.

#137 Renting In The GTA on 12.05.12 at 1:16 pm

Even the Toronto Star is saying it’s dropping…

http://www.thestar.com/business/article/1297813–condos-take-the-biggest-hit-as-home-sales-drop-in-the-gta

#138 claudius emperor on 12.05.12 at 1:33 pm

–The slaughter of the yield pigs. — Garth

Garth would you comment on this one? Are you shifting away from your view on dividend paying stocks?

Second mortgage syndicates are not dividend-paying stocks. — Garth

#139 claudius emperor on 12.05.12 at 1:44 pm

Thanks Garth for clarifying.

I absolutely agree.

#140 CalgaryRocks on 12.05.12 at 1:46 pm

#130 Sebee on 12.05.12 at 1:02 pm
How honourable! Sellers are willing to go down with the ship and will pull listed properties off the market instead of selling for less. If only the captain of the Concordia had such honour to go down with the ship! How many people are still holding onto RIM hoping that it will come back above $100?

Yes, RIM stock is just like a house. Good comparison. You must be the genius in the slow kid class.

#141 John Prine on 12.05.12 at 1:53 pm

One bedroom condo at the “Atrium” on the waterfront in North Vancouver just listed for $399,000. These were $549,000 then $499,000 etc…Now after a few more reductions will be possibly worth buying. Going to be buildings with high maintenance costs in a few years, very complicated plumbing and Heating/Air Conditioning as well as sump pumps that run almost continuously to keep the parking levels fro flooding

#142 claudius emperor on 12.05.12 at 1:58 pm

many people did hold Nortel until the very end…

#143 Timmy on 12.05.12 at 2:05 pm

#2 Aleksey on 12.04.12 at 10:26 pm
“2013 will be unlucky number for many people in Vancouver.”

Yes, there are at least 52 “Friday the 13′ in 2013.

#144 Picasso on 12.05.12 at 2:09 pm

Hey Canuck Abroad !!

Ever check out the Florida panhandle? It’s got the nicest beaches in the world, like white flour… squeaks when you walk.

Friend lives in Navarre, you can buy brand new 1,500 sq ft SFH, dbl front att, 6000+ ft lot (Americans don’t believe in zero lot line) everything you need, a walk to the beach. lol

#145 Picasso on 12.05.12 at 2:13 pm

139 Picasso on 12.05.12 at 2:09 pm

Oh I forgot…. that’s all for $150K

#146 tkid on 12.05.12 at 2:13 pm

Yes, RIM stock is just like a house. Good comparison. You must be the genius in the slow kid class.

So you bought RIM stock too?

#147 2centsCdn on 12.05.12 at 2:32 pm

#21 Smoking Man
“Watch the rates drop……………………….

Rock bottom, you anit seen nothing yet. dan dan. you you just aint seen nothing yet”

So what? Do you think the masses will scurry and refinance … squeeze and extra half a point out of their mortgage and buy more big TV’s and trips? Their places won’t appraise at near what they did a few years ago, the banks are starting to build safety in their formula’s … they know what’s coming. And what’s another half point going to do now that CMHC formula’s have been clipped? Rates are now effectively a point higher than 6 months ago. I agree with you that sfh in the 416 land will be slower to lower (on avg.) than the rest of the country … but they WILL come down. Everything to do with economics, common sense and history says so. There is no reason this country should sustain such high real estate prices. We are just the last country on the list to do so. And if there’s one thing I’ve learned from going through this sort of stuff in the late 70′s and late 80″s …. when the “experts” say it can’t happen here … it always does.

#148 JohnnyBoy on 12.05.12 at 3:00 pm

Condos = Towers Therefore housing investment bondage fools arrogance by creating a system of speculation has filled the entire earth. WOW I THINK I HAVE READ THIS BEFORE!

The Bible reveals that all false systems of religion began in the land of Babylon and will have their consummation from the spirit of Babylon in the last days. It is interesting to note that every organized system of religion in the world today has traces of ancient Babylon. The Bible records in Genesis 10:10, that, after the great flood, all men spoke one common language and a man named Nimrod built a city and established a common religion. Nimrod was a descendant of Noah’s son, Ham. Genesis 11:1-9 describes the building of the city and its famous tower “whose top may reach unto heaven.” It also records how God came down and punished the people’s arrogance by creating a confusion of different languages and possibly their racial distinctions. This way man would be forced to obey God’s original command to “be fruitful and fill the whole earth.”

#149 Mad Scientist on 12.05.12 at 3:07 pm

Okay – I am the first to admit of rolling my eyes when some post here of overhearing others in an elevator or in a store talking about real estate -

Yesterday as I stood in line for my afternoon java, 2 guys in front of me were speaking about the Austerity meaures in Greece. They were firm believers that outsiders (IMF, EU and espically Germany) were the true culprits to Greece’s downfall. WTF – austerity was a word coined by some flakey left wing nut job in which the term seems to be a meaning of “unfair” or “unjust”. What Austerity is in reality – which the world needs a heavy dose of – live within your means. If the country can collect $1Billion in taxes – then they should be afforded the right to spend $1Billion – when unforseen events happens and they need to cover a shortfall – the bond markets are there – Countries like Greece lost all aspect of “it has to be paid back” and went hog wild. Now that they bill is due – they point to others – very rich!

Greece and others have their own government to blame – and now that they have to answer to others (because “others” are providing financial help) they take that as an attack on their soveringty….

it’s madning I tell you – the age of entitlement is bestowed upon us – everyone deserves more than what they produce -

#150 Suede on 12.05.12 at 3:11 pm

#55 Soylent Green,

If that were true, the Enbridge pipeline from Alberta to BC’s coast would already be going through.

#151 Old Man on 12.05.12 at 3:14 pm

The first downtown highrise condo in Canada was built in Toronto at 40 Homewood Avenue, so took a first mortgage on it; not the best location. The payments stopped as guy was splitting the country as had some problems, so gave me a quitclaim deed for some cash, or travelling money; there was good equity left.

I decided to become a landlord so rented it out. Once again rent payments stopped, and his phone was disconnected. I did the legal posting for entrance, and went in with someone else 24 hours later. The place was empty, and left with damages that cost plenty to repair, as looked like a war zone; got hooped again.

Do not be critical for me renting out once again to two young women who wanted a private residence, as all their employment took place in highend hotels; not at the condo – never! Now after one year they bought the condo from me with a nice profit, and paid cash. Now for you that know all; you know nothing.

#152 AprilNewwest on 12.05.12 at 3:43 pm

#130 Seebe -Is this sort of journalism trying to convince people that they might as well buy because sellers won’t give in on asking price. Only the un-wise sellers will hold on to go “down with the ship”. There are people who see the bigger picture and they’ll be the ones who help drive prices down because they’ll be willing to take the loss now before further losses in the near future. People holding on to their inflated assets will then have to lower their asking price if they really want to sell.

#153 Sebee on 12.05.12 at 3:43 pm

#138 CalgaryRocks

Yes, RIM stock is just like a house. Good comparison. You must be the genius in the slow kid class.

>
The comparison was insisting on sticking with it even as value decreases. Fortunately, I don’t resort to name calling tactics. Good day to you.

#154 dingus gittens on 12.05.12 at 3:58 pm

Hey Old Man,

what unit is that exactly? maybe the new owners are having an open house?

#155 JohnnyBoy on 12.05.12 at 4:00 pm

Failure Is Not an Option

The 1989 Toronto real estate bubble was caused by massive speculative
investments that exceeded the intrinsic value of the homes being
purchased and exceeded the ability of the purchasers to pay their
mortgages. As more and more people fed into the bubble, housing became more scarce, thus driving up prices even more. The high prices induced more people to invest and the number of available houses decreased yet
more. Eventually, like any bubble, it burst. The end came crashing
down and house prices fell over 25%. Many people lost their shirts and literally their homes. I was there and personally viewed it from across the street where neighbors just bailed overnight.
Today’s issues were cause by speculators with the addition of high unemployment and ridiculously low interested rates. Take that housing investment bondage fools!

#156 Waterloo Resident on 12.05.12 at 4:00 pm

HERE’S PROOF of the wage freeze, and helpful advice for everyone to AVOID trying to seek a job at any Toyota manufacturing place. (Work for a Toyota Dealership instead if you want to work with Toyotas):

http://www.ratemyemployer.ca/employer/employer.aspx?l=en&empID=7331

A few Quotes from that link:

(“This job started off great 10 years ago. It’s been a steady decline ever since. Management are constantly taking benefits/pay away. Contracts are on a permanent wage freeze at $21/hour for first 10 years.
Company is having a hard time attracting new hires due to poor pay/benefits.

—your going to be stuck on contract forever with no pension or decent benefits and right now contracts are on a wage freeze.

—Stay away. TMMC is one of the worst companies to work for. If you value your home life family and self worth you’ll go find a job someplace else. You will be broken down mentally and physically. Harassment runs rampant and nothing is ever done.”

— Family life or personal life comes 2nd to Toyota or you will not have a job. Pay is ridiculous for the work you do.

—-An old japanese proverb, deru kugi ha utareru – ‘the nail that sticks out gets hammered down’. This is the culture of T.M.M.C.. If you do not conform to their ideals you will be hammered down. Stand up for your self you will be hammered down. Get injured you will be hammered down.

— Pay and holidays are the only positive at this point and for new hires, look to be paid $13/ hr less than the full time guy next to you, and no holidays for at LEAST 3 years. Bottom line is the company does not give a crap about their team…

— They fire people with ideas. This place is a hole in the ground is a septic tank. Avoid Avoid Avoid!!!

—plant is run by intimidation instead of motivation. No personal life just work life VERY HIGH DIVORCE RATE.

—-It started as a great place (the pay is nice, but not worth lossing your life)Here is an example -If you are not one of the “boys” you are pretty much harassed and tampered with in places like your process to your personal items in and outside the plant. It is hard to work when you continually hear guys talk about you and wanting to harm you physically.)

#157 ChickenLittle on 12.05.12 at 4:09 pm

Boomer21 – #23 at 11:01 last night:

You are hilarious!! That was fantastic!! I needed a laugh so badly!!
(SM don’t even think about commenting)… Best line in a while!!

#158 JohnnyBoy on 12.05.12 at 4:21 pm

#153 Waterloo Resident on 12.05.12 at 4:00 pm

And that’s why I drive a Ford!

#159 Long from Calgary on 12.05.12 at 4:26 pm

I have been watching economics since early ages and tried to understand how North American ones work, or on a larger scale, world wide.

I bought our very first house back in 2005 with some sense of timing and held on to it without any thoughts of upgrading. Even my wife is always calling for doing so: “right about time now, referenced to our realtor friend”.

I also have been with this blog for a year or two and I totally agree with your sense and analysis that we have a slope to go down, and liquidity is king.

Unfortunately (or fortunately?) only until last month or two I discovered one book from library searching for citing on “Lost decade” for Japan and everything is unfolded in front of me.

Balance Sheet Recession is the term that general public should be educated out of the woods for what we are having at this age.

The book I referenced is called:
The Holy Grail of Macroeconomics: Lessons from Japans Great Recession

Hope more people get the bigger picture.

Regards.

#160 Old Man on 12.05.12 at 4:32 pm

#151 dingus gittens – that condo at 40 Homewood Avenue went up in the early 1970′s, so you are out of luck for an open house, and suspect you would not have been man enough for then or now, and can you imagine they were sisters from the far north at a city called Timmins. I gave them a break with no rental application, and they bought me out a year later via a Lawyer with all cash, and made a nice profit. Now if the Smoking Man had been around at that time; they would have paid attention to him, and kicked you under the bus for a better man.

#161 Picasso on 12.05.12 at 4:49 pm

…..ZERO…..LOT……LINE……

Fill me in, what’s with Canadians and their addiction to ZERO LOT LINE?

Is it something we brought from England 200 years ago?

Were not running out of land, were not living on an island, were the second or third largest land mass country on the planet with no population.

It can’t be because we hate mowing lawn, it’s covered in snow half the year.

Doesn’t matter if it’s a one street town in bald prairie Saskabush, the houses are 16 inches apart.

Please explain.

#162 :) :( Ying Yang on 12.05.12 at 4:58 pm

Come on People! why are whining about the falling real estate values and job losses.
Look on the bright side December 2012 marks the conclusion of a b’ak’tun—a time period in the “Mayan” Mesoamerican Long Count calendar or in other words the end of the earth. I wonder how the real estate market is doing in the Mayan Peninsula? Another Cerveza por favor!

#163 WTF on 12.05.12 at 5:05 pm

#15 Smoking Man on 12.04.12 at 10:46 pm

#8 I am Furst! on 12.04.12 at 10:33 pm
Toronto sfh won’t fall by much. Trust me.

Dude they aint going to fall period, price will hit records this spring.

Not Condos. They will get a hair cut.

Agreed Condos will take a bath, but I believe SFH’s in the big smoke will take a larger hit than you think. Not as bad as a condo but never the less they will get whacked just like Tommy in Good fellas!

#164 Alex on 12.05.12 at 5:32 pm

November TREB stats are out!

Yr/Yr % change 416 area Detached: -3.8%

So finally the detached house prices in 416 are falling!

#165 Mike on 12.05.12 at 5:34 pm

Nice post again Mr Turner.

Can anyone, who is not a realtor, or affiliated with any such organization, explain what a ‘MLS home price index composite benchmark’ is exactly?

Why can’t these people just use the price? Don’t worry, I know the answer.

Reminds of something funny.

Statistics are like a bikini:

interesting – what they reveal
vital – what they keep hidden

Karma is coming for everyone, good or bad. Understand that you asked for it. It’s part of a much larger picture…

#166 brainsail on 12.05.12 at 5:34 pm

AAPL had its biggest single day drop since Dec 17, 2008, today. I read something about Apple is projected to lose its market share due to competition next year by a little. Then I read that several brokerages were going to raise the margin rate from 30% to 60% just for AAPL shares.

I guess a lot of inexperienced investors went balls to the wall with what they thought was a sure thing and blindly dived in at the wrong time and ended up the next day with a margin call.

All those people that bought houses with 0% down or even 5% over 40 years are in for very large hangover!

#167 robert on 12.05.12 at 6:06 pm

Hard luck is one thing and i always feel bad for the little guy who runs into hard luck. But greed is another issue and these buyers of the Trump project are victims of their own greed. This is so indicative of what is truly the beginning of a major RE correction. This will not be the last story as the Condo market is about to implode and the downside to this Condo Casino is about to become very visible and very real. The doors to the casino just shut and there is only one way out right now and that is to close on the deal. Thats right knowingly pay $549,000 for something that is only worth $399,000. How anyone could look at this Condo market and whisper it is ok is beyond me. Developers will be bankrupt in six months and those hoping to see their deposits returned are living in a fairy tale land.

#168 Picasso on 12.05.12 at 6:19 pm

#163 brainsail on 12.05.12 at 5:34 pm
AAPL had its biggest single day drop since Dec 17, 2008, today. I read something about Apple is projected to lose its market share due to competition next year by a little. Then I read that several brokerages were going to raise the margin rate from 30% to 60% just for AAPL shares.

I guess a lot of inexperienced investors went balls to the wall with what they thought was a sure thing and blindly dived in at the wrong time and ended up the next day with a margin call.

All those people that bought houses with 0% down or even 5% over 40 years are in for very large hangover!
…………………………………………………………………

Yup nothing keeps going up forever… NOTHING !!!

#169 Old Man on 12.05.12 at 6:21 pm

I am not finished with those who trashed me, as did indeed presented a new lease for my tenants at 40 Homewood Avenue in Toronto who paid on time with no charge backs at the bank. The two girls said you told us no application, and take care of the condo unit, so we will not sign a new lease, but come for dinner, as we want to make a deal.

They said we can have a meeting of the minds about this all. Now was shocked as they trashed the entire kitchen; both bathrooms; and layed down expensive broadloom throughout, as renovated my condo with big money, and said why? They said you gave us a deal and now we will buy you out with a nice profit because you are did us with respect, and now it is your turn.

#170 DM in C on 12.05.12 at 6:25 pm

Picasso;

It’s not people who are addicted to zero lot lines — it’s the developers and the municipalities who approve zoning — let’s just cram in as many taxpayers as possible onto the footprint.

That’s why in the new burbs, when one house catches fire, four burn.

#171 CalgaryRocks on 12.05.12 at 6:43 pm

#143 tkid on 12.05.12 at 2:13 pm
Yes, RIM stock is just like a house. Good comparison. You must be the genius in the slow kid class.

So you bought RIM stock too?

Not likely. Individual stocks are for gamblers. Even then, if I were a gambler, I’d rather go to Vegas. The odds are better than the rigged Canadian stock market.

#172 brainsail on 12.05.12 at 6:58 pm

#165 Picasso on 12.05.12 at 6:19 pm

Isn’t the weather great here this December? 82 yesterday. Just need a lot of rain to fill up Lake Travis so we can use our sailboat.

#173 Canadian Watchdog on 12.05.12 at 7:19 pm

Spot which 416 area has the highest YTD detached home sales growth rate, racial minorities and low population growth. Chart

#174 Vamanos Pest on 12.05.12 at 7:27 pm

#163 brainsail
The sell-off in APPL is a buy not a sell. over the past few weeks stock rallied from say 525 to say 590. this occurs because people buy it. along the way, for risk protection stop-losses are put in and with today’s sell off these stops were triggered, which exaggerated the sell-off. this is a classic retest of the november lows, and if it can hold say 525 it’s gonna go on and retest all time highs (700), and if (big if) it breaks through, skies the limit. this is a BULLISH chart, not BEARISH.

Admittedly, if it fails to hold 525, next support could be as low as 485. Ugly if you stay long, but great buy opportunity should this occur.

Remember, on the fundamentals, APPL is cheap, not expensive. And any projected loss of market share (to which I assume you’re referring to the smart phone market, as in the tablet market they remain largely unchallenged) will more than be compensated for by the expansion of the market itself (global smart phone sales expected to triple in the next 5 years)

Finally, choose stocks on the fundamentals, trade stocks on the technicals. This strategy states apple is a buy with a stop at about 515 (don’t want to stop out to early). Puts only about 5% of capital at risk with an outstanding upside.

Have a profitable day!

#175 prairieperson on 12.05.12 at 7:35 pm

Did my walkabout through the neighbourhood. The two houses and the vacant lot have been pulled from the market, not sold. The only property still with a for sale sign is the classy condo. What’s been being said in the papers and on this board is true. People are pulling properties off the market and waiting in hope for the spring. There’s going to be a forest of for sale signs. Everyone doing the same thing at the same time. It’s not even just the people who bought with the idea of flipping but the change in mentality required for people who’ve only believed that property will go up in price. When I bought my first house, I bought it to live in, not to make money on. It was a place to live, raise a family. A lot of people who have been buying in recent years have, I assume from what I’ve heard and read, not been doing what I did. They saw/see their house as an investment, just like a stock. If prices drop substantially, a change in attitude that will be painful has got to occur. Speculate on the mkt, speculate on rental property, on raw land, but don’t mix it up with the place you have to live. Personally, I prefer raw land for speculation. Low maintenance, low cost, if things work out, big profits. No tenants.

#176 Smoking Man on 12.05.12 at 7:40 pm

Old Man you are so csis. Nice try.

#177 ozy - don't waste time on 12.05.12 at 7:42 pm

don’t waste time, learn what you need to buy and act before the window of opoortunity closes

sell the kandos, except key areas
buy the detached, but only in key areas

I agree with SM: Spring will be nuts Record prices. On low volume sales cause there aint no QUALITY inventory.

#178 Nostradamus Le Mad Vlad on 12.05.12 at 7:49 pm

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Vanilla Fudge Pannini . . .

In a dark and hazy room, peering into a crystal ball, the Mystic delivered grave news:

“There’s no easy way to tell you this, so I’ll just be blunt. Prepare yourself to be a widow. Your husband will die a violent and horrible death this year.”

Visibly shaken, Laura stared at the woman’s lined face, then at the single flickering candle, then down at her hands.

She took a few deep breaths to compose herself and to stop her mind racing. She simply had to know.

She met the Fortune Teller’s gaze, steadied her voice and asked,

“Will I be acquitted?”

For some reason, wives tend to like this joke . . .
*
#120 live within your means — “Never heard of Bugarach & don’t believe in this end of the world garbage.” — Ditto. Like Dec. 31, 1999 when things were supposed to beak down the following day, nothing happened then and nothing will happen now. It’s all a money-making scam.

#179 T.O. Bubble Boy on 12.05.12 at 8:21 pm

Whoops – divided the wrong number… Detached 416 houses down 11.3% from the mid-may peak (not 12.7%)

#180 Fabrega on 12.05.12 at 8:30 pm

In the land of the newly wed and the almost dead houses are still grossly overpriced.

#181 Smoking Man on 12.05.12 at 8:35 pm

Gartho so want to thank you for not posting my thing about guy I meet at bar at Seneca, and chirping a great charity.

Close call thanks.

Love you man

#182 Mississauga on 12.05.12 at 8:52 pm

Last

#183 Old Man on 12.05.12 at 9:07 pm

#173 Smoking Man – am retired now, but still work part-time, and say nothing, as they still send me all the dirt.

#184 Nostradamus Le Mad Vlad on 12.05.12 at 9:08 pm

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Pentagon Major cuts coming. Is this part of Obomba’s strategy, to downsize the US military while bankrupting the country? But 94% Wot is Kannaduhh’s rate? Economy If true, why is the UK supporting Israel when it knows an attack on Iran would damage its economy? Something stinks here; Shadow Banking System Int. article, esp. re: crooks, etc.; Crunching the abs Not quite. Gold crunch? 3:32 clip It’s good to have friends in high places, ’cause you never know when you’ll need them; Blink! US debt just grew by US$11 tri.; Citigroup 11K jobs gone just before xmas (ObombaCare?); 2:48 clip one in four people skip meals to heat their homes instead; Pathological Wealth We’re close to being the most unequal country in the world.; Strike Settlement Port reopens in LA.
*
Moscow says US break-up / collapse, like the USSR; Interference Like Gadaafi, Assad is probably a hard person to live with, but it is no excuse for other countries’ interference (re: looting and pillaging), Patriot Missile sites and herewith one more — 4:09 clip Syrian rebels equal Muslim Brotherhood, funded by US and Israel. Another point where taxpayers’ money is going to; No enthusiasm Evidently, pressure is growing in UK for sanctions against Israel; Doublespeak These cabbage brained nutheads put out these press releases expecting people to believe them, not question it? Big Pharma given green light, natural health food stores whacked, and GM Wheat Poison; Prince Charles Connections to pedophilia.

#185 chaser on 12.05.12 at 11:51 pm

What’s that Garth? The economy has slown to a crawl now you say?

Slowed. GDP growth 0.10 in Q3. — Garth

#186 Bob Munro on 12.06.12 at 6:34 pm

Garth ; I would like to short the Van condo market . How is that possible ?

#187 morry on 12.06.12 at 8:09 pm

The graph you posted overall shows nothing but an upward trend with a couple of dips.
Buy, Hold, and only Sell at a profit.