Twits

taco

In March they migrate back to the well-treed hoods of North Toronto, flitting from property to property in a fecund frenzy. You can stand there, quietly watching, certain there’s but one obsession on their minds. Nesting.

These are the house hornies, the drivers of real estate in the GTA, as they are in Vancouver or Montreal. They create sales and set prices, and right now they’re molding a different market too few in the business seem to understand.

“Oh Garth,” veteran Toronto realtor Stephen McShane write me after reading a recent article, ”The sky is finally falling! How long has it been since you have been preaching that the real estate market going to hell in a hand basket….10 years? Meanwhile those who ignored your advice (I think I remember you referring to them as fools) and bought anytime in the early 2000′s have seen an appreciation of 75 – 100% of their property as well as built equity with their mortgage payments. And they have been able to do this with as little as 5% of the purchase price as a down payment.”

The guy makes some valid points. We all know what prices have done in the past decade. Let me come back to this in a moment.

First, be clear about the spring frenzy that’s been making some media headlines lately. As the snow banks melted in the demand neighbourhoods of 416 this year there were clogged driveways, busy open houses and multiple offers. But this was not a rerun of the Spring of 2012. A year ago the hot properties were those over $1 million, where asking prices constituted opening bids and the ‘lucky’ buyer paid 125% of list. At the other end of the spectrum, condo sales were fevered, hitting an all-time high as virtually every new development was sold out before a backhoe bit the dirt.

This year that house someone paid $1.5 million for a year ago is worth 15% less. The multiple bids are coming in lower price ranges, typically in the $700,000 zone (a 416 starter home in need of organ transplants). Meanwhile condo sales have collapsed, and prices are stuttering. In fact in February the whole market suffered a 15% year/year sales drop, with condos off by 20% and houses over $2 million decimated more than 30%. When the numbers are in for March, it’s hard to imagine the decline over the same month last year won’t shock.

Without a doubt, the market has changed. Sales are declining, household debt isn’t, buyers are tougher and prices under assault. This is what a correction looks like, as opposed to a crash. After all, Canada is not America and RBC ain’t Washington Mutual savings bank. It’s why I’ve told people for the past few years to ready for a price decline of 15% nationally (more in the frothy areas, less in demand pockets), then years of flatlining or decline as our demographics go negative.

The reasons are obvious. Canada’s economy barely has a pulse, despite 2.99% mortgages. Capital is flowing out of real estate, where profits are evaporating, into financial assets to ride the US recovery. Household and mortgage debt is at record levels, and 70% of families already have property. Millions of wrinkly Boomers are house-rich, cash-poor and poised to sell. So, where is this forever demand supposed to flow from?

Had the feds not engineered emergency interest rates for the past four years, greased CMHC with $575 billion (a 67% increase since 2007), encouraged bankers into excessive risk (legislating 40-year loans and 0% down), bought up bank mortgages to increase credit or directly subsidized real estate (home reno tax credit, first-time tax credits and fatter RSP drawdowns), homes might still be affordable. But they’re not. And the buyers bidding for those $750,000 fixer-uppers in Leslieville only exist because of interest rates which are destined to rise.

So, Stephen McShane’s right. Real estate ownership has benefited many who bought a decade ago. They were able to use extreme leverage and take a risk that paid off. But this is no guarantee of the future. Rates fell. Debt rose. Buying, and prices, reached an apex one year ago. Home ownership’s at saturation levels. The population’s aging. We’re not on the road to where we have been. Responsible realtors see that.

So, no sky falling. No going to hell. Just a steady grind lower, punctuated by the seasonal tweets of the hormonal. And the angry bleats of the floggers.

199 comments ↓

#1 Gypsy Kid on 03.10.13 at 4:36 pm

Could I possibly be first?

#2 Gypsy Kid on 03.10.13 at 4:40 pm

In our neighborhood, the homes are not flying off the shelves anymore like last year and the prices seem a little more reasonable…just a little.

#3 Mike on 03.10.13 at 4:41 pm

Wow, are you sure you only turned you clock one hour ahead Garth? Kind of early :)

#4 Rihanna on 03.10.13 at 4:44 pm

Canceled my show in Boston to catch up on your smoking blog. Selling all my Canadian properties.

#5 Mike on 03.10.13 at 4:47 pm

That slow grind might happen in Toronto but here in Raincouver we are approaching a huge CLIFFF .f..f.f.f.f.f.f

#6 guelphstudent on 03.10.13 at 4:50 pm

Garth you have been saying that prices will fall by 15% nationally for few years now. Since then prices went up by 20% in some places, so does it mean you think the decline will be worse today than if it happened few years ago?

Prices have not increased 20% in the last two years. But, of course, you just made that up. — Garth

#7 Quebec is Great on 03.10.13 at 4:52 pm

Ran into a friend a couple days back. His sister bought a 2nd condo last spring and is currently trying to sell her first one. First condo bought for ~ $425k years back.. best offer she can get is ~ $600k and realtor friend tells her to wait it out she can do better.

I asked him how much risk can she handle… he says she has enough cash to cover 1 month of mortgage payments. Friend is a little “concerned” about her situation but after talking with his own realtor friends, he is not worried.

Told him she could offload first condo @600k, basically bank the net tax free (as it was her primary residence for years) and substantially cut her risk. Probably got a little to aggressive with him, but really was surprised how much they put their trust in realtors when dealing with this massive level of risk.

#8 Vancouver Hipster on 03.10.13 at 4:52 pm

I think it will be “biblical” in Vancouver

Vancouver Hipster
I don’t work. Just ski and surf

#9 T.O. Bubble Boy on 03.10.13 at 5:01 pm

Garth speaks the truth about spring fever… this sub-$1M house (listed at $899k, but will likely go over asking) has been seeing a herd of house-horny couples since it listed this Tuesday:
http://www.realtor.ca/PropertyDetails.aspx?PropertyID=12896063&PidKey=-443661508

#10 jwkimba on 03.10.13 at 5:06 pm

3rd open house week in a row for areally nice half million dolalr semi back split. Still not sold? Where are the masses of desperate buyers?

Visited an open house last weekend 550k for a 90sf bung in a family friendly area. Offers ‘accepted’ on Monday evening only. Property doesn’t havea Sodl sign on it today and that realtor is annoying and known for putting up a SOLD sign ASAP and then leaving it there for a month. What happened??

Many of those throwing 700-999k at a house are using the 200k in equity they ‘earned’ on their downtown condo/starter home. What happens when that equity isn’t available? Hmmm.

#11 rosie "moving forward" on 03.10.13 at 5:10 pm

Not enough diversification? Too much diversification? What to do? It’s tough moving forward. http://business.financialpost.com/2013/03/08/5-things-the-mutual-fund-industry-doesnt-want-you-to-know

#12 Julia on 03.10.13 at 5:14 pm

I see Brian Ross, high volume Remax broker in Riverdale TO, has got his own house across from Withrow Pk on the market. That’s gotta be a sign.

#13 finches on 03.10.13 at 5:16 pm

What is happening around yonge & finch are of willowdale? I drove by this morning and near willowdale & finch there is a townhouses being build some iranians. Each townhome cost $800k minimum.

Cheaply built, corn flakes boards, thin concrete foundations, board divisions…..wonder what fool would buy that????

#14 rosie "moving forward" on 03.10.13 at 5:17 pm

Third try a charm. Fingers crossed. The couple that truly rocks. http://business.financialpost.com/2013/03/08/is-this-couples-financial-vision-an-impossible-dream/

#15 Butch on 03.10.13 at 5:24 pm

Wife took me to see a realtor in Oakville today. Insightful.

He had never heard of Robert Schiller or price-to-rent ratios. In the 8 years he’s been a realtor (aka since 2005), he’s never seen someone loose money on real-estate. Says it’s a sure thing.

Their data is amazing though. Wife is looking at a 25 y/o property. First sold in 1987 for $189,000. Sold again in 1996 for $177,000. Found that amazing. They’re now asking $489,000. That’s ~6% annual return. Wife thinks I’m crazy when I say the property is only worth $290,000.

Am I crazy?

#16 dosouth on 03.10.13 at 5:25 pm

So one of your “old friends” posting on another Victoria blog still working both sides of the street. According to him when he was posting here, things were stable and prices solid. So what a difference a couple of weeks makes…..

“Marko said…

Wrote three offers for buyers last week, all that I thought were reasonable. Sellers not budging, didn’t bring one together. Interesting market place.”

…….go figure?!?

#17 Grim Reaper/Crypt Speculator Ⓤ on 03.10.13 at 5:41 pm

Ah….finally …..the MISSING LINK !

or Smoking Old Mannequin’s mother in law

#18 Mocha on 03.10.13 at 5:42 pm

Fifteen percent: depressing.

#19 Toronto_CA on 03.10.13 at 5:43 pm

It will be interesting to see if Canada can pull off what other major western economies in the USA and Europe could not, a housing “correction” rather than a crash.

The job #s for February were pretty great, but I still say the only thing stopping a correction from becoming a crash is no external influence, like an economic contraction. Canadian economic growth since the recession has been dependent on selling natural resources, increasing household/gov debts, and the housing market. I think all 3 of those growth factors are coming to a halt, so what is going to drive growth or stave off a contraction?

#20 wallflower on 03.10.13 at 5:50 pm

Realtors are morons. Never known one who knows anything of substance. They cannot even answer basic questions about the properties they list or show! A disgusting breed whose time is so over. As one commented on an earlier posting: zillow.ca bring it on. Basically, when I think of “realtor” I think of “person with key or combination.” ~2.5% of strike price is a lot to pay for that simple role.

#21 Henry on 03.10.13 at 5:53 pm

Victoria is not look to good these days. Drove around yesterday and couldn’t help but notice all the empty stores for lease. I saw at least 16 and two new commercial buildings currently being finished off. Almost every single building that rents has at least one apartment for rent. Despite this there is still more residential building going on. And where have all the kids gone? Last year when you drove downtown on a Friday or Saturday night legs were everywhere now they are only around the popular bars.

#22 Rob on 03.10.13 at 5:55 pm

I have been following townhouse prices in Surrey BC and have noticed a 10-15% drop in asking price.

#23 guelphstudent on 03.10.13 at 5:55 pm

#19 wallflower
I so agree with you. All the Realtors care is to seal the deal. Otherwise they will misinform, mislead and do whatever it takes to get their commission. Now there are probably exceptiona, but for the most part Realtors are morons.

#24 Julia on 03.10.13 at 5:58 pm

Stick to your guns Butch. What’s gone up is gonna come down. Even if it doesn’t i highly doubt you will see anything like 6% per year increases going forward in Oakville. Eight years is not much of a time frame to predict the future on.

#25 Shawn Allen on 03.10.13 at 6:02 pm

CAPITAL CANNOT FLOW OUT OF HOUSES

Capital goes into houses when they are built. And it never ever comes out. (The only way it could is if you dismantled the house and sold off the materials which would obviously destroy capital.)

When house prices rise wealth is created from thin air. When house prices drop wealth vaporizes into thin air.

When one person sells a house for a $ million to another person, zero net dollars flow into or out of housing.

The population as a whole is completely powerless to remove capital from housing by selling houses to each other. They do however have the power to vaporize the wealth in housing by bidding house prices down. Just as they did the opposite for many years. The vaporized wealth is not removed and thus available to go into stocks, it is simply vaporized.

An individual can remove his capital from housing but only when a buyer substitutes his precisely equal amount of capital.

#26 guelphstudent on 03.10.13 at 6:22 pm

Garth, I should of been more precise. For some few means two years, for some three, so i picked a middle. Anyways in the city of Toronto for example prices went up by 14% between 2010 and 2012, and 26% between 2009 and 2012. So no I didn’t made up those numbers.

#27 Raven on 03.10.13 at 6:34 pm

H.H.H.H.H

House,Horny,Hormone,Heated, Humans

Please listen carefully, move your hormones out of the way and look down! It is a cliff your are about to step off!

Past performance is to guarantee of future results, especially in RE! If you still read this blog and are on the fence, give it the benift of doubt and err on the side of caution and wait till late spring. If there is no price correction beginning then take your best shot!

Like the markets RE can remain irrational longer than most can stay solvent. It has for a long time but this is the last hoora! I have seen this movie before and it didn’t end well either.

#28 Driesdtl on 03.10.13 at 6:46 pm

Perhaps McShane can point out the parallels in his comment to obscene profits taken by those on wall street right before it blew up.

#29 Humpty Dumpty on 03.10.13 at 6:47 pm

We the people(twits) of the Commonwealth:

Charter of the Commonwealth as of Dec 14, 2012

http://www.thecommonwealth.org/files/252053/FileName/CharteroftheCommonwealth.pdf

Enjoy your taco’s folks….

http://vigilantcitizen.com/latestnews/why-is-queen-elizabeths-nurse-wearing-a-masonic-belt/

#30 HogtownIndebted on 03.10.13 at 6:48 pm

“Canada’s economy barely has a pulse, despite 2.99% mortgages. Capital is flowing out of real estate, where profits are evaporating, into financial assets to ride the US recovery. Household and mortgage debt is at record levels, and 70% of families already have property. Millions of wrinkly Boomers are house-rich, cash-poor and poised to sell. So, where is this forever demand supposed to flow from?” (TGF)

This mirrors some of my thoughts today when, after catching up on the G&M articles on real estate, I headed out for a family outing in the Leaside area.

It was early afternoon, and the shopping centre near Laird and Eglinton south of Wicksteed had a near empty parking lot. The shopping centre with the Canadian Tire and Future Shop just north had a ¾ empty lot. Inside the Future Shop, I noticed only two customers, who had a huge dog with them. (Guess the staff were so happy to have a customer they don’t worry about bylaws) In five minutes in the store, staff outnumbered shoppers by about 10:1. A staffer told me it was like this on Saturday, too. The crappy tire was a little busier, but there were still as many staff as shoppers. Some fellow parents we bumped into near the pet store at the mall chatted to us about plans for the week upcoming and how they could not afford to send their kids to camp this March break, as it was $300 a head and they have two kids. They live on a street with million dollar house price tags, a block away.

I am reminded of a line from one of the G&M articles I have just read:

“I think In the next year or two, “the Canadian consumer will be a shadow of its former self,” says the CIBC’s Mr. Tal.”

http://www.theglobeandmail.com/news/national/from-micro-to-macro-how-were-becoming-a-country-drowning-in-debt/article9562947/

One block north, above Eglinton, I went on Laird a little bit. Lots of cute postwar shacks in a house horny neighbourhood where about half of the properties have been upgraded into McMansions. Same thing to the south, as well. But only about half – and that may be part of a problem. For this Leslieville/ Allenby-wannabe neighbourhood, I wonder if they may find themselves caught in the middle of a problem. Lots of lawn signs can be seen for “Leaside Unite”, a property owners group protesting the growth of big box stores in the area. Much too late to close the barn door on that one, I think. It is already feeling too much like Scarberia or Mississauga for my tastes. Only a few blocks south is the desperate immigrant poverty of high rises in Thorncliffe Park, where 20 buildings had no power most of this weekend. Imagine that.

Just north of Eglinton, one post war shack – 284 Laird – has a huge billboard in front of the house, proclaiming what a great spot for a McMansion this is, with a “preconstruction price” of $1,450,000 – but wait – it’s already reduced to $1,350,000. The one story home has two bedrooms on the main floor, and a basement rec room. A few doors north at #296, a fully completed McMansion is listed on MLS for only $1,398,800 by a nice lady realtor. Been for sale for a while already and I am told has been relisted.

http://www.realtor.ca/propertyDetails.aspx?propertyId=12890655&PidKey=473261431

I left thinking of the other Globe article about whether first-time buyers will prop up this market, and the mentality of people like poor Miss Soo who feels she just has to buy a Burnaby condo before prices go completely beyond her reach.

http://www.theglobeandmail.com/report-on-business/economy/housing/will-nervous-first-time-buyers-make-this-spring-housing-market-bloom/article9559776/?page=2

Garth and others have observed that some demand areas may be resistant, at least to an immediate melt in prices.

But spending a little while today in this part of Leaside, I wasn’t sure if I was in a melt-resistant demand RE area…… or walking along some kind of tectonic, economic fault line.

:

#31 Nostradamus Le Mad Vlad on 03.10.13 at 7:05 pm

I forgot my glasses

Yesterday my daughter again asked why I didn’t do something useful with my time. Talking about my “doing something useful” seemed to be her favorite topic of conversation.

She was “only thinking of me” and suggested I go down to the senior center and hang out with the guys.

I did this and when I got home last night I decided to teach her a lesson about staying out of my business. I told her that I had joined a parachute club.

She said, “Are you nuts? You ‘re almost 72 years old and you’re going to start jumping out of airplanes?”

I proudly showed her that I even got a membership card. She said to me,

“Good grief, where are your glasses! This is a membership to a Prostitute Club, not a Parachute Club.”

“I’m in trouble again, and I don’t know what to do . . . I signed up for five jumps a week,” I told her.

She fainted.

Life as a senior citizen is not getting any easier but sometimes it can be fun.
*
“So, Stephen McShane’s right. But this is no guarantee of the future. Rates fell. Debt rose. Home ownership’s at saturation levels. The population’s aging.”

Plus infrastructure (roads, sewers, hospitals and the like) are all wearing out, cost plenty to replace and the country is running out of people.

Immigration is one answer, but what if those immigrants all end up in Toronto / Vancouver / Montreal?
*
#161 Tom Vu — “A rare trifecta” — Merci! You are a member of the Chinese Triads too, non?!

#187 Chris — Great link. Gives a good idea of how various races are changing ships, as well as religions. Christianity is on the wane, while Islam is on the rise.

#189 Dr. Hoof-Hearted — “That’s progress !!! You are being farmed and harvested folks..a treadmill to oblivion …a minion of Big Brother”

Yes, but progress by whose standards? It wouldn’t be progress for the masses of sheeple, because as the lyrics to “Wish You Were Here” said, “We’re just two lost souls / Swimming in a fish bowl, / Year after year, / Running over the same old ground.”

The only progress being made is by TPTB, who continue to spout their nonsense that owning a home (and being in debt for the rest of one’s life) somehow enriches you. It doesn’t — it enriches them.

#32 Vandamncouver on 03.10.13 at 7:06 pm

Thanks for the honest post today Garth. It adds credibility that you agreed with that realtor in your post. Yes people made a lot of returns in the 2000′s, but to your credit, you bring up a better rebuttal; it’s always risky to do this (as it is a leverage) and the greater fools are the ones who buy in last (i.e. early summer 2012)

#33 Cici on 03.10.13 at 7:14 pm

I so want to buy that awesome dude a taco!

#34 DL on 03.10.13 at 7:21 pm

I’m sure Garth logs ip addresses and some of you are being slanderous and libelous about real estate agents.
Many, many realtors are as qualified as lawyers but without the letters behind the name.
They are businessmen and women who work many unseen hours putting together comparables or offers.
You can thank a realtor for your 100+% increase in your home values over the past years. And you know what? These same people will be there to help you lock in your profit.
You are welcome to swim the shark infested waters without one but be prepared to be dodging lawsuit after potential lawsuit if you haven’t covered all your bases.
Your home is your biggest asset. Use someone who is trained to do the job right, a realtor.

#35 Van Isle Renter on 03.10.13 at 7:24 pm

#26 Shawn Allen on 03.10.13 at 6:02 pm

CAPITAL CANNOT FLOW OUT OF HOUSES…..

Interesting viewpoint, but there is this little accounting thingy called a “capital loss”. It is the opposite of a “capital gain”. In layman terms, it boils down to having less $$ at the end than when you started.

Or as I tell my kids, getting your a$$ handed back to you on a plate. You make it sound like taking a capital loss is a voluntary action, and if only everyone keeps the Ponzi game going, all will be fine.

But somebody, somewhere needs to cash out, and that sets the price … down… for everyone. Using your logic, Nortel is still worth $120 because I didn’t sell.

#36 jess on 03.10.13 at 7:25 pm

“death bonds” mis selling

…despite the Financial Services Authority fining Rockingham £35,000 for mis-selling in September 2011, and banning two directors, the FSCS last week ruled that the advice provided by the firm ‘cannot properly be said to have caused the losses which investors may have suffered’.

Read more: http://www.thisismoney.co.uk/money/pensions/article-2289164/Rockingham-victims-set-adrift-financial-lifeboat.html#ixzz2NAt4nrwm

Watchdog threatens to put payday lenders out of business after it finds them causing ‘misery and hardship’By Tara Evans
..
The UK’s 50 biggest payday lenders, accounting for 90 per cent of the industry, have been given 12 weeks to overhaul the way they run their business by the trading watchdog or face losing their credit licences.

Office of Fair Trading (OFT) said it would consult on whether to refer payday lenders to the Competition Commission after it found ‘fundamental problems’ with how the market operates, leading to ‘misery and hardship for many borrowers’.
Payday loans are designed to be a short term solution to a lack of cash that can be repaid when a borrower’s next pay cheque comes through – but they can come at extraordinary cost of more than 4000 per cent APR

#37 claudius emperor on 03.10.13 at 7:39 pm

Encouraging stupid behaviour by the government has it’s price. I personally would not invest a dime in anything canadian in the next 10 years. Diversified very successfully lately out of the CA $ and was reachly rewarded. And NO, I would NOT be paying the fallout of CHMC and the baby boomeres pensions.

Ripping off the savers and retirees for the ‘no risk’ profit of the banks and the stupid with no income buying houses they can’t afford might sound like a great idea to F. But please when the times comes to pay the bills don’t come to me.

#38 Dean Mason on 03.10.13 at 7:40 pm

I think the best long term strategy with one’s total net worth is to have a maximum 25% in housing. So, a $2,000,000 net worth should not have more than $500,000 in housing. Once people have 40%,50% in housing there is a real peril that they get desperate for cash,cashflow,income.

They make major financial mistakes like taking on too much debt and taking too much risk with their investments.What is even worse is they can run out of money and have not enough financial liquid assets,investments.They need income producing assets like dividend paying shares,bonds,Gic’s,foreign bonds,MBS monthly pay investments, RRIF income but not too much.

#39 chickenlittle on assignment on 03.10.13 at 7:48 pm

Landlord has still not sold his house. 30 days on the market and counting. Not a single offer for a piece of Hazel’s Mississauga pie. Not many people came to the open house today and there have been no showings all week.

#40 claudius emperor on 03.10.13 at 7:50 pm

The fallout of Alberta in times of very high oil prices in indicative. How stupid one must be to dump all these money in real estate instead of buidling pipelines from Alberta east and west and:
1. get cheaper oil in Ontario and Quebec
2. get the alternative option to ship oil to Asia and not have US as the only customer. US pays 50 $ per barrel for Albera oil.

And this is the government that is supposed to represent Alberta oil’s interests. I bet Alberta tycoons are mad at H, he is their protege after all.

Yes, this is how stoooopid they are.

#41 Shawn Allen on 03.10.13 at 7:50 pm

Van Isle Renter at 36…

“Thank you” for refuting things that I never said in my post at 26, or anywhere else for that matter.

I said that the capital that goes into houses at the time they are built is forever in housing. It cannot be removed.

For the population as a whole zero capital will ever flow out of housing since for one to sell another must buy, and for the same price it is sold at too.

I said that the population as a whole creates and destroys wealth from thin air when they bid house prices up or down. I did not comment on whether that was a good thing or a bad thing or can be prevented. I just point out how the math works to refute the erroneous notion that capital can flow out of housing and into stocks. It cannot.

#42 robert james on 03.10.13 at 7:56 pm

#35 DL Do you mean like the realtor that listed this house??.. I am sure she is as competent as lawyers just dosn`t letters behind her name..lol This fake house has since dropped a very real 10 million dollars .. http://whispersfromtheedgeoftherainforest.blogspot.ca/2013/02/fake-condo-line-ups-fake-press-photo.html

#43 EIT on 03.10.13 at 7:58 pm

“Had the feds not engineered emergency interest rates for the past four years, greased CMHC with $575 billion (a 67% increase since 2007), encouraged bankers into excessive risk (legislating 40-year loans and 0% down), bought up bank mortgages to increase credit or directly subsidized real estate (home reno tax credit, first-time tax credits and fatter RSP drawdowns), homes might still be affordable.”

The greatest bubble of all: GOVERNMENTS! F’IN (elfin diety reference) UP THE LANDSCAPE!

#44 Shawn Allen on 03.10.13 at 8:06 pm

Van Isle Renter at 36…

said in response to my post at 26

Using your logic, Nortel is still worth $120 because I didn’t sell.

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

Well Renter that is a non-sequitur, you have arrived at a conclusion that is in no way supported by my logic.

My point is actually that the population of investors are powerless to pull capital out of houses. Just as they were powerless to pull capital out of Nortel.

Much of Nortel’s value was created out of thin air when investors drove the price up. And the wealth ALL vaporized as the stock went to zero. In the net not a single dollar was pulled out of Nortel by equity investors as a population. The billions of value that Nortel represented at $120 simply vaporized. Some investors sold to others but in the net all the value of Nortel simply vaporized as it fell to zero. Capital was not and cannot be pulled out by investors as a population. That is my point.

#45 Freedom First on 03.10.13 at 8:08 pm

Nice post Garth! Things in Canada, not just RE, but the Canadian economy as a hole:) are becoming interesting, what with the debt ridden over leveraged Canadians chasing the Canadian dream of McMansions, 2 SUV’s in every driveway, courtesy of 7-8 year car loans or Helocs’, and maxed out credit cards and LOC’ to pay for vacations and other “wants”. Just had a thought about the old tale: “The tortoise and the hare”.
I don’t care what the outcome for anyone is from their choices of the past, but if anybody goes “all in” on one asset, leveraged or not, but especially leveraged, you are still a fool, and sooner or later, your way of thinking will destroy you unless you change.

#46 Observer on 03.10.13 at 8:15 pm

So, let me get this straight….monetary policy in Canada over the last 10 years has done what? Besides making a necessity like shelter prohibitively more expensive for young families and at the same time, discouraged them from saving. And on the flip side, funding crusty boomer’s retirements and swelling bank profit. Yeah sure, that sounds like an excellent policy with Canada’s future generations as a number one priority.

#47 TurnerNation on 03.10.13 at 8:18 pm

I happend to be out in the west end of the GTA (Garth Turner Area) past Pearson, toward Winston Churchill/Britianna. What bleakness awaited.
Industrial parks, roads as wide as runways, with the odd housing colony purpose-built.

A builder’s sign hailed from the rough. Starting at $800,000. I fled.

#48 The Man From Nantucket on 03.10.13 at 8:21 pm

#13 finches on 03.10.13 at 5:16 pm
What is happening around yonge & finch are of willowdale?

-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.

It’s open season on houses. Just drove through the same hood today. 1/10th of every street seems to be for sale.

If there’s a bloodbath on T-O real estate, I am hoping this is ground zero. This is the neighbourhood I wanted…..I just refused to spend myself and family into complete ruin to get it.

#49 45north on 03.10.13 at 8:21 pm

Sales are declining, household debt isn’t, buyers are tougher and prices under assault. This is what a correction looks like, as opposed to a crash.

I’d say a crash is when prices decline faster than sellers can reduce their prices. Now it may be that sellers cannot reduce their prices because of their mortgages but the fact remains they cannot reduce their prices. My definition of a crash is tricky because there are thousands of sellers in all different circumstances. Some have no mortgages and some are mortgaged to their gills (as if they were fish) yet somehow we will know a crash after the fact.

Julia: Brian Ross, high volume Remax broker in Riverdale TO, has got his own house across from Withrow Pk on the market. That’s gotta be a sign.

gotta be

pinstripe: This couple is working full time for themself, buying, selling, and managing their properties. In this case, the couple has no fear of risk whatsoever.

11 properties – they had better keep up their mortgages

#50 earlybird on 03.10.13 at 8:24 pm

When your leveraged ‘investment’ (home) has appreciated 75 to 100% over a decade…..my god Sell the dam thing, once in a lifetime opportunity!!

#51 guelphstudent on 03.10.13 at 8:31 pm

#35 DL,
Please explain me why should we thank Realtors for rise in prices ?
That’s quite a scare tactic that you are using by saying that with Realtors you won’t get sued.
For most first time buyers a home is their biggest liability, thanks to Realtors who apparently should be thanked for 100% price increase

#52 The Man From Nantucket on 03.10.13 at 8:33 pm

#35 DL on 03.10.13 at 7:21 pm
……..
You can thank a realtor for your 100+% increase in your home values over the past years.
_____________________________________________

Does that mean I can strangle a realtor if I have to sell for less than double?

#53 Tim on 03.10.13 at 8:39 pm

So you are kind of admitting you called it wrong 5 years ago and that those who bought then are better off–even after a 15 percent decline.

Kind of no. — Garth

#54 claudius emperor on 03.10.13 at 8:42 pm

It seems we need legislation to protect us from the government. The maximum taxes and fees that government can enforce should be defined in an international bill of rights.

Than F can screw himself instead of screwing us.

#55 Tim on 03.10.13 at 8:52 pm

#40 pinstripe
Whatcha been smokin?
Alberta’s Austerity Budget
http://www.calgaryherald.com/Alberta+austerity+budget/8076143/story.html

Canada’s Wealthiest Province Cuts Deep
http://www.theglobeandmail.com/news/national/albertas-redford-embraces-austerity-budget/article9474700/

Alberta expects to take in $7.2-billion in resource revenue in the coming year, 46 per cent lower than once projected. It will, under a new law, save 5 per cent of that. All told, Ms. Redford will run a $1.975-billion deficit, despite earlier promises of a surplus.

Are we surprised? Another inept Conservative cannot balance the budget–just like Harper. How can the streets not be paved with gold in Alberta with all of that oil gushing out? A forty year rule by inept Conservatives who were too short-sighted to get more money for oil royalties and too stupid to diversify. Just wait if Venezuela starts to cooperate with the Yanks, then Alberta will be toast!

#56 claudius emperor on 03.10.13 at 9:00 pm

#55Tim

So you are kind of admitting you called it wrong 5 years ago and that those who bought then are better off–even after a 15 percent decline.

——————————–
How about 50-60 % decline? How about eroding future pensions and benefits due to F’s stupidity?
Still feel a winner?

#57 HogtownIndebted on 03.10.13 at 9:01 pm

#35 DL You are too, too funny. You are totally a realtor, right!?

You officiously attempt to fear-monger critics here into silence with suggestions of lawsuits for slander and libel for criticizing realtors.

Then you describe realtors as “…as qualified as lawyers…” ROTFLMAO

Then you claim they work “….many unseen hours…”. Perhaps some do. This is in opposition, of course, to the all too common strategy of “list and wait”. This was employed by the two lazy realtors I had to fire because they failed to market, stage open houses, or even show up for other interested agents before I sold my condo myself, in under a week, above current market prices, last year.

Many unseen hours to produce a list of comparables? How about: point, click, copy, paste, repeat….. Done in more like minutes if you know what you are doing.

BTW – did you do any “unseen hours” of due diligence before your ridiculous post? If you had, you’d know that in Canada defamation does not work for groups, only for identifiable individuals. Unless of course you can prove that the group is an identifiably disadvantaged group such as a racial minority or people with bona fide physical or intellectual challenges (This is different from those realtors who proudly proclaim “B.A.” on their signs, btw)

It’s not likely realtors could form a class action for a hate speech application to the Ontario HRT, sorry.

Interestingly, it even appears unlikely that you could successfully sue someone for any such thing on a blog like this, according to this law firm:

http://zvulony.ca/2010/articles/defamation-articles/definition-defamation/

Note especially their discussion of court rulings under “Defamation in Online Forums”. It doesn’t appear to exist, per court rulings.

(Garth, yer off the hook, so party on, excellent, totally eh…)

Did you notice what I just did there, DL? It’s called a bit of research, some due diligence. You and your realtor friends are enouraged to practice this at all times.

Can a realtor help you dodge “lawsuit after potential lawsuit” as you claim. No, not in the remotest. A good lawyer does that, and mine cost me only $1000 for stellar, accurate and timely service. Not a percentage of my home’s value. (BTW, if you are suggesting doing a job in accordance with the law, making proper disclosures etc… is some kind of value-added service of a realtor, rather than just a basic legal requirement, you are really blowing smoke a little too hard, so take a breather, pal…)

The “shark infested waters” you speak are sometimes thus because of realtors. I certainly found that. My realtors refused to honour an agreement they made with me. Then, when selling on my own, when I refused the many emails from realtors wanting to sell my FSBO property, I found my ads on Craigslist got repeatedly flagged and removed, until I made some threatening noises to the realtors I suspected were involved. (Watch out for this folks, if you are selling on your own)

A realtor on the buyer’s side may make perfect sense, and a good, very active realtor to sell a tough property like a 2013 Toronto condo may also make sense.

But for any of the blustery BS reasons you have suggested? Not a chance.

Your contribution is well-timed. Today’s heading is “Twits”, after all.

(It is common knowledge, btw, that Garth does not log IP addresses, only hip-to-waist ratios.)
————————————————————
And now one for the lawyers to enjoy:

What do you call 1,000 realtors at the bottom of the ocean?

An even BETTER start.

So, sue me……..

#58 X on 03.10.13 at 9:05 pm

A decade…I thought Greaterfool came out in ’08. Seems pretty fair when you consider the lifesupport Re has received since then in the form of 40 year mortgages, generaltionally low rates, no money down…

Which makes me think…when is the next book coming out? And what will its general topic be?

#59 AisA on 03.10.13 at 9:18 pm

And the ROCK says…..

“IT DOESN’T MATTER WHAT YOUR RATE IS!!!”

lolz at RE bullz.

#60 Joanne on 03.10.13 at 9:24 pm

The first nice weekend has sprung in South Ottawa, and so has the housing market. There are for sale and open house signs everywhere. I am wondering why everyone is so anxious to sell?

#61 guelphstudent on 03.10.13 at 9:34 pm

#58 Kudos to you!

#62 blase on 03.10.13 at 9:35 pm

I’m still left wondering, who is left to hold the bag on all the fraudulent loans, the nothing-down loans, the high ration loans, the HELOC-funded mortgages, the whole rotten gasbag of easy lending, when it all goes bad?

It seems to me that the only entity that will be left holding the bag is the Canadian government, via CMHC.

However, in 2009 the government had to bail out the banks with $100+ billion for home loans gone bad. Was this CMHC, or were these non-CMHC loans?

How is this home-loan pyramid scheme called CMHC any different than AIG/Fanny and Freddy/no doc/liar/high ratio loan nightmare that began unravelling in 2006 in the U.S.?

Mostly everyone said it couldn’t explode there, except Michael Burry and a few others. I’m left to wonder who in the investment community, if anyone, is shorting this market, who specifically they are shorting, and where it goes from there.

#63 oh oh on 03.10.13 at 9:37 pm

East Van open houses, we were open house shopping this time last year as well as this weekend, its amazing how things have turned negative in just 1 yr, prices down 15% the couple houses we were interested in last yr both sold over asking and were fixer uppers, they are underwater, this is just the beginning, no doubt another 15% lower this time 2014 Cheers to renting!

#64 Harvard Grad on 03.10.13 at 9:56 pm

I get this feeling that there is a percentage of posters in here who really have a “hate on”for those who own. I honestly can’t figure out why – are you made you missed the grazy train years ago and now have to wait for prices to snail it’s way back down. I don’t believe most who bought (including myself) can chirp they timed it perfectly – no one can forsee the future –

Not every homeowner runs out and buys a $800K home with a $10hr job because the bank approved it. My circle of friends..well I am the last one who still has a mortgage, but if everything goes according to plan – this puppy is done in less than 2 years – so our first home will be paid for in 13 years –

An associate told me that in his culture – many families live under the same roof – without being specific, his $480K home in Mississauga is shared by his brother, cousin and I believe a 3rd party – and they all kick in $5K per month and he assumes he will be mortgage free within 5 years…he loves the idea of being mortgage free and he has no issue of the crowded conditions – back in his home country – you lived like that in a bamboo hut -

This is a golden opportunity for those renewing to take advantage of 2.99% rate – it’s not all about newbie’s with freshly printed diploma’s who are buying – father-in-law, bought in 2002 in Klienburg for $280K – just sold for $825K – will transfer those funds into a home he always dreamt of without carrying a mortgage –

So, lets not all think that everyone is doomed – for us – prices will need to revert back by 64% before they reach the same level we bought –

Renting does suck – and if you love renting – good for you – I just prefer to be “rent free”in my golden years.

#65 Calgaryboomer on 03.10.13 at 9:58 pm

#35

Thats the funniest thing. Just because you print off a prepared real estate contract from your national brokerage and get people to sign it, you think you are “as qualified as a lawyer?”LMFAO. And now trying to scare people with a lawsuit. Wow, you really do think you are a lawyer!

But I’ll give you realtors this much. As much as I’ve said repeatedly that anyone can easily sell their home on a FSBO website with the option of full access to MLS for a few hundred bucks (but the you’ll have to pay the buying realtor commission), there are lots of people that can’t be bothered to do any of this. And there will always be those people and they will want the realtors.

The whole problem is what realtors now get paid compared to decades ago, which is why there are now way too many of them, all looking for the easy money. There are now more and more flat fee-based or low comm realtors that will eventually flush out all the stupidly paid realtors. Simply nobody is worth the $15-30k fee for selling a house. Realtor fees are as stupid as the house prices. I would have total respect for the job of the realtor if he was paid properly and did a good job (I have respect for anyone that works at anything for a living!) but not at these outrageous commissions that were born in a time when houses only cost under a hundred grand and the realtor made a normal living.

And I do agree with another poster here that many have no clue about the houses they are selling. When hunting, I have asked pretty normal questions that they couldn’t answer, and this makes realtors look bad, when in fact a few are good,professional and knowledgable. It’s almost like brokerages are like big box electronic stores where 20 “sales associates” will descend on you when you walk in but most can’t tell you anything about the products in detail, which is why I will look for “that guy” that I dealt with before who knew all the tech details.

But you’re still no lawyer, just a house salesman. Admit it.

#66 Screwed on 03.10.13 at 10:01 pm

Garth,
What’s your opinion on buying older houses on acreages in the Valley? 600 to 700k buys 5 or more acres with some farming opportunity out there.
Thoughts?

Which valley? — Garth

#67 Out Of work Realtors still Here? on 03.10.13 at 10:14 pm

Why do out of work realtors waste so much time posting on greaterfool? The economy is just getting by and people are maxed out and thus Christmas sales were horrible and easy to see by the empty malls all december long. Corporation are in the black by cutting workers/expenses thus the stock market rally. Housing in Canada is so dead. Enjoy the housing crash realtors and yes you will be making no money for months/years to come.

#68 AisA on 03.10.13 at 10:18 pm

#66 Harvard Grad
“So, lets not all think that everyone is doomed – for us – prices will need to revert back by 64% before they reach the same level we bought”

I was thinking 61% as a target, but if you insist, gravy for everyone it is then.

Money for nothing and chicks for free was a music video, leave it at that. ;-)

#69 AisA on 03.10.13 at 10:24 pm

It is not a hate on for those who own, it is a severe “dislike” of those who have opted to rent for the next 40 years and pay a wopping (it actually is) 5% down for the privilege. Derps. All the while making it difficult for life to progress in a natural fashion for those more responsible.

G’night.

#70 littleB on 03.10.13 at 10:27 pm

eeeeeee][[gjgjbgjgjgodoeor fjfjsjiosjf jjjfss jfjfjs f f jfsf fjsfjsjdfj f fjskdksjf

(kitty cat’s view’s on todays post, sorry can’t translate , don’t speak kittycat, the fly on the screen seemed delicious though)

#71 Waterloo Resident on 03.10.13 at 10:28 pm

This is a VALID QUESTION:

- What if you bought a $350,000 condo and now its worth only $250,000 and you want to sell it and move to another city. Now lets say you don’t have ANY spare cash laying around. HOW DO YOU SELL THIS CONDO that has fallen in value?

Please tell me how will all of the buyers who paid too much, be able to unload their properties WITHOUT declaring bankruptcy?

#72 TRON on 03.10.13 at 10:31 pm

Garth I drove around North Van this weekend and noticed one very obvious thing about RE here; tons of open house signs but no vehicles parked out front.

I spoke to a RE agent who has been sending me listings for about a year. I told him that I believed the marked is slow, people are asking too much and prices have got to come down more than 5-10% to get this thing going again. He agreed and told me to wait because prices will come down very soon if people hope to sell their homes.

Divorce, job loses and downsizing is a realty in North Van where ‘keeping up with the Jones’ is a full time job. The stress of having no money is getting to the retailers as well. One retailer told me most local business is down 50% and many shops are closing up only to be replaced with by a pizza chain.

Living here gives me a different point of view on where the market is headed. My gut tells me things are bad here and a crash is more likely than a correction.

#73 tigerbaby on 03.10.13 at 10:36 pm

re: “CAPITAL CANNOT FLOW OUT OF HOUSES”

how about capital teleporting out of houses? :-D

#74 Waterloo Resident on 03.10.13 at 10:40 pm

Garth, what do you mean when you said “Canada’s economy barely has a pulse”?

I thought the Ontario economy was POSITIVELY BOOMING?

Just take a look at your local shopping mall; its packed, right?

#75 Pr on 03.10.13 at 10:40 pm

…no sky falling…

Normalize the interest rate and you will see the sky falling, mathematically guaranty.

#76 Benchwarmers on 03.10.13 at 10:41 pm

Nothing melts slow in Calgary. The Chinook winds are starting to blow and this town is going to look a whole lot different in a few months.
Most people aren’t from here and have no idea how fast things can change in this town.
It’ll be nice to see this place slow down and all these smug f#&kers take it right on the chin and go home with there tails between their legs.

#77 Devore on 03.10.13 at 10:48 pm

#165 Shawn Allen

<blockquote.Um, no. Seller volume is always precisely equal to buyer volume in any market be it stocks, houses or ice cream cones.

A narrow view, that says a seller is someone who sells, and a buyer someone who buys. Obviously, the numbers/volume of each is equal. That’s just volume, not buyers/sellers. While volume can tell you some information, so does the buyer and seller interest, which is not the same as volume.

If you have something for sale, you are a seller. Even if what you have for sale has not sold yet, you are still a seller. Same with buyers. Whether with stocks, or houses, sellers put their merchandise up with an asking price, and buyers place bids. The market brings the two together, and transactions take place. Not always the case that buyers register their interest officially, for example MLS only lists sellers, and some buyers are just browsers looking for opportunities anyways. But as soon as a buyer is interested, he places a bid, which other buyers can also see.

In the stock market, the seller ask records are more or less automatically matched with buyers bid records. But it is pretty clear that at any given time, there may be more or fewer sellers than buyers. The particular numbers vary in each market, but the ratio of buyers to sellers indicates market sentiment and direction. Hence, sellers can outnumber buyers, indicating a declining market (since ask prices need to lower in order to find buyers and end up in transactions).

#78 HogtownIndebted on 03.10.13 at 10:51 pm

#59 Sorry, that should have been waist-to-hip ratio, of course, Garth.

But a babe is a babe, even if upside down….

#79 panhead on 03.10.13 at 10:53 pm

I live in a “burb”of Vancouver and go into East Van every weekend to see my 91 year old dad. I take the same route every week and see the same houses with the same “FOR SALE’ signs every week. This weekend most have a “SOLD’ sign in front of them. Somethings happening.
Just a view from the street …

#80 Pretentious Tofino Bicycles on 03.10.13 at 10:57 pm

Things seem ti have slown right diwn here on mid van island. As the retirees are unable to sell up elsewhere in the country sales have slowed right down in this sought after retirement area

#81 Notta Sheeple on 03.10.13 at 11:01 pm

#35 DL on 03.10.13 at 7:21 pm
“……..Many, many realtors are as qualified as lawyers but without the letters behind the name……..”
=========================

Probably the most laughable statement ever written on this sym-pathetic Blog.

#82 OttawaRenter on 03.10.13 at 11:03 pm

#73 You could walk away from the home and give it to the lender, but you’ll suffer an awful credit score for quite awhile. They might still come after you for the rest of the money though.
Why not keep it and rent it out while you move away, until (hopefully) the value of the home increases?

#83 Clevernam3 on 03.10.13 at 11:26 pm

Enjoyable posts today. #35, the realtor who thinks he’s a lawyer… All I can say is +1 to #59 and 67.
Guelphstudent: yes, in fact a few can mean a few more than two or three; Garth either didn’t read carefully or wasn’t fair to you (but he was uncharacteristically charitable to McShane, so probably he was just in a hurry).
Madvlad: hilarious, thanks for that.
#26 Shawn Allen: you should be writing self help books, your talents are wasted here.
#40 Pinstripe, and your detractor #57 Tim: you’re both right. I see it too, Pinstripe, the crowds, all the young men with big trucks far from home, the fat incomes, the hour wait at the restaurant so a snippy nine year old can cook and serve your Alberta beef (because the older kids are working in McMurray or welding pipelines). But we’ve been here before, and it can end in a nasty way. Remember the bumper stickers from the early eighties: “Lord, give another oil boom, and I promise I won’t piss it away this time.” Things are stupid busy right now, but…..

#84 Tom Vu on 03.10.13 at 11:29 pm

#32 Nostradamus Le Mad Vlad on 03.10.13 at 7:05 pm

#161 Tom Vu — “A rare trifecta” — Merci! You are a member of the Chinese Triads too, non?!

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

Advice:

If daughter pack parachute… adjust will accordingly.

#85 45north on 03.10.13 at 11:30 pm

Waterloo Resident: What if you bought a $350,000 condo and now its worth only $250,000?

indeed it’s a valid question and the answers can be seen in the US – there are whole range of answers from dutifully paying the mortgage to just walking away. In the US politicians have adopted foreclosure moratoriums (or moratoria) as well as mandated mortgage renegotiation. These programs have not helped. The rules have extended the uncertainty and added stress to people who were already highly stressed. Make no mistake this is where marriages break up. Depression is likely. suicide is a possibility.

My plan would pay a family $1000 a month for a year starting from the time the bank had taken the house. In Ontario “power of sale” means that the bank sells the house even though the home owner technically remains the “owner”. So the plan would pay the family once it had received the “power of sale”. All of which does not relieve the home owner from the original mortgage, plus expenses and other charges. The government can bring in programs which can mute or at least diminish legal action against the home owner. The idea is that the home owner accepts his loss and gets on with the rest of his life.

#86 Dr. Hoof-Hearted on 03.10.13 at 11:50 pm

You are all being player for fools.

The great Vampire Squids on Wall Street apparently have so much of the market tied up into the derivatives casino, and they have all their bets covered.

Cui bono ?

#87 Nostradamus Le Mad Vlad on 03.10.13 at 11:50 pm

-
Garth, the pic is bang on the money!
*
1:50 clip From Stalin to sequestration; 55:47 doc. “At 41 minutes comes an explanation of why the Private Central Banks no longer have the gold bullion deposited in them by nations like Germany, Mexico, etc.” wrh.com; Wall St. disaster / replacement plans — trading without people; QE = Inflation? Wells Fargo Interesting to see if this particular case goes any further in court; UK Execs. happy, workers suffer. That’s how socialism and austerity work — privatize the profits, socialize the losses; Debenhams The big squeeze; The Polytix of Life Religion, war, business as usual; Simulation Prepared by and for the govt.; Russia Expect the unexpected; France postpones austerity (chart); Infrastructure Speaking of such; Samsung vs. Apple American Airlines chose Samsung.
*
#187 Chris Further to your link; Age Is No Barrier ‘Tho this is a tad extreme; White Cliffs of Cellphones; World’s Ugliest Dog? The dog doesn’t care; 3:13 clip Chavez in 2010 — ‘The Mossad is trying to kill me’, and Bolivian Prez. agrees. A few days ago, a link said that Israel was happy with Chavez’ death; GoM Curious to see whether all this oil has something to do with the sinkhole in La.; US drones in Africa being operated by the RAF in UK; Quantum Fridge Guess this is what the planet is turning into; 7:38 clip Space lightning and other things; 3:53 clip AIPAC demands war with Iran. Of course, they won’t fight it, US troops will; Af’stan – US One reason the US is still there is drugs, and it’s very lucrative; CC Antarctica is plenty cold and has lotsa ice; Samsung Beating MSoft hands down; Hmmm “As well ask the Scorpion, why does it bite the hand that feeds it?”; Bitter Beer Watered-down suds.

#88 Geeks on 03.11.13 at 12:07 am

I was traveling along the Cascadian subduction zone and found a crystal ball and I can see a crash coming by August 15th 2013. Vancouver RE is going to be crushed by 20-30%. By the end of 2014 the Canadian $ is going to crash too and will be trading at 1.4 to1 USD by early 2015.

Nostradamus reincarnation?

#89 vancouverite on 03.11.13 at 12:09 am

#81 panhead on 03.10.13 at 10:53 pm wrote:

“I live in a “burb”of Vancouver and go into East Van every weekend to see my 91 year old dad. I take the same route every week and see the same houses with the same “FOR SALE’ signs every week. This weekend most have a “SOLD’ sign in front of them. Somethings happening.
Just a view from the street …”
—————————————
Somethings happening? Yes, those sellers likely lowered their prices enough to close the deals (presumeably most of these homes you are referring to are on the main busy routes you are driving on and have already lower prices than identical homes that are 2 blocks in from the busy roads)

#90 View on 03.11.13 at 12:09 am

“Wife thinks I’m crazy when I say the property is only worth $290,000″

Not crazy, I’d offer $294,500 tops!”

#91 Snowboid on 03.11.13 at 12:17 am

#9 T.O. Bubble Boy on 03.10.13 at 5:01 pm…

Or alternatively, there is this $ 799K property we went through today!

http://tinyurl.com/HappyHollow-Carefree

And for Harley lovers…

In nearby Cave Creek there was at least 150 HDs, most of them at http://www.hideaway-usa.com/

One of neighbours makes the trip from the NW Valley to Cave Creek on his early shovelhead every Sunday, without fail!

#92 DON on 03.11.13 at 12:21 am

Can the old and wrinkly who own their house equity take out a reverse mortgage at today’s property assessment value. Is there any possible benefit to escape the coming lower prices?

#93 David McDonald on 03.11.13 at 12:23 am

My wife has decided we are going to buy a condo in Ottawa next summer. I would rather rent and wait but that is not going to happen. Garth says I shouldn’t whine. I don’t want to spend much more than $400,000 for about 110 meters squared in a property that won’t lose too much value.

It’s years since we bought a property so I need advice on how to proceed. Should we immediately find a real estate agent? What about direct sellers on Kijiji and other sites? How do we get hold of the sales history of a property and that of comparables? Are there condo inspectors? What is the best purchase strategy in a falling market?

Garth, if you would please point me in the right direction it will be easier not to whine.

#94 Robbie on 03.11.13 at 12:36 am

#35 DL “Many, many realtors are as qualified as lawyers”

Well, as a long-time ex-teacher who is now a Realtor, I would have to strongly disagree with you. It took me 5 years of University (including teacher training) to get my BEd. but it took me 3 weeks of full time studying and doing assignments (10 to 12 hour days) to complete my Real Estate course on-line. Then I waited about 6 weeks to write the exam, took a 5 day course after that and then I was a Realtor! I agree, a good Realtor is really valuable when buying and selling…but I am certainly not near as qualified as a lawyer. To those who believe Realtors make lots of money…not really. The top 5% of Realtors make most of the money and most of the other Realtors scrape by. Pick one of the “other Realtors” to represent you…he or she will have the time to work with you that the “top 5% Realtor” doesn’t have.

#95 Half Full on 03.11.13 at 12:41 am

#59 HogtownIndebted on 03.10.13 at 9:01 pm

Thank you! Well done!

#96 Screwed on 03.11.13 at 12:44 am

Which valley? — Garth

The Fraser Valley.

#97 observer on 03.11.13 at 12:49 am

Yeah not bubble bursting. Its going be like the chinese water torture. A slow grueling decline , Drip Drip Drip testing your mental state until you reach a point of no return as insanity kicks in!

#98 The Man From Nantucket on 03.11.13 at 12:58 am

#69 Out Of work Realtors still Here? on 03.10.13 at 10:14 pm “…………… thus Christmas sales were horrible and easy to see by the empty malls all december long.”

Yeah.

That little piece of insignificant BS, Internet shopping, had absolutely nothing to do with this ! :-)

Seriously, dude, this internet thing is awesome. Instead of dealing with crap like parking, canned music, foul weather, etc., one can can shop while wearing a bathrobe and guzzling intoxicants if they so choose.

my house had a deluxe Christmas, and there was only one trip to the big box store – to take a look at the TV I ended up ordering for less from their online service!

Anyway, yes, mall sales probably sucked, and there are lots of small to medium business owners that better figure out how to re-work their model.

#99 Shot Ski on 03.11.13 at 12:59 am

# 22 Henry
All the kids have gone to the patch, Fort St John, Grande Prairie, Fort Mack. Newfies without accents I call them.

#100 Small Town Steve on 03.11.13 at 1:02 am

#42 claudius emperor on 03.10.13 at 7:50 pm
The fallout of Alberta in times of very high oil prices in indicative. How stupid one must be to dump all these money in real estate instead of buidling pipelines from Alberta east and west and:
1. get cheaper oil in Ontario and Quebec
2. get the alternative option to ship oil to Asia and not have US as the only customer. US pays 50 $ per barrel for Albera oil.

And this is the government that is supposed to represent Alberta oil’s interests. I bet Alberta tycoons are mad at H, he is their protege after all.

Yes, this is how stoooopid they are.
——————————————————————-

Well they better figure it out fast because Australia just found what could be 233billion barrels of shale oil in their south central area. It is the biggest find in over 50 years and when that hits the market suddenly our oil will not be so sought after in the Asian markets..

On the bright side they are looking to use existing lines/right of ways up through Zama and then on to the territories then back down to a port in Prince Rupert. They better do more than look and start doing it…

#101 John Prine on 03.11.13 at 1:05 am

#21 wallflower on 03.10.13 at 5:50 pm
Realtors are morons. Never known one who knows anything of substance. They cannot even answer basic questions about the properties they list or show! A disgusting breed
_____________________________________________
Some deep seated problem here…Maybe being a wallflower the good realtors never picked you..Thats a pretty broad statement. I know good realtors and bad realtors, same as in any career there are good and bad..

#102 Oceanside on 03.11.13 at 1:18 am

Home sales in Qualicum Beach on Vancouver Island were pretty normal for February and the reason being is that vendors are lowering their prices. Selling prices are down 17% from same time last year. When a good SFH comes on the market and is priced right (Nearly all under $400K) they sell quickly. Not a lot of new listings on March 1st though………

#103 Investx on 03.11.13 at 1:49 am

“#27 guelphstudent:
Garth, I should of been more precise. For some few means two years, for some three, so i picked a middle. Anyways in the city of Toronto for example prices went up by 14% between 2010 and 2012, and 26% between 2009 and 2012. So no I didn’t made up those numbers.”

So if those numbers are true, Garth, shouldn’t City of Toronto prices fall much more than 15%? Or does reversion to the mean not magically apply there?

#104 Bubu on 03.11.13 at 2:02 am

#11rosie “moving forward”
Thank you for the link, much appreciated.

Between this and several of the other things I have learned from this blog,
it is time for me to call my advisor for an appointment this week,
I need to make some changes.
PRONTO…

#105 oh oh on 03.11.13 at 2:05 am

Just was chatting with my friend in the reno business on the westside of Vancouver, no work its brutal, lotsa trades bidding low or at a loss just to keep their businesses operational, he pretty scared, watch. For fire sales prices on white trades vans and trucks

#106 Mr Buyer on 03.11.13 at 2:16 am

#35 DL on 03.10.13 at 7:21 pm
……..
You can thank a realtor for your 100+% increase in your home values over the past years.
……………………………………………………………..
and a banker and the Conservative Party of Canada/Harper government

#107 observer on 03.11.13 at 3:56 am

73 Waterloo Resident on 03.10.13 at 10:28 pm

This is a VALID QUESTION:

– What if you bought a $350,000 condo and now its worth only $250,000 and you want to sell it and move to another city. Now lets say you don’t have ANY spare cash laying around. HOW DO YOU SELL THIS CONDO that has fallen in value?

Please tell me how will all of the buyers who paid too much, be able to unload their properties WITHOUT declaring bankruptcy?
=================================

Let say you save all you life and your now 35 years old. You placed a 5% down payment ( approx 20,000) using your life long savings of 17years . After payments to lawyers and government your down another 5000 bucks.

Fast forward, your place is now worth 100,000 bucks less. After lawyer fees, realitor fees your really down 15,000 + the original 5000.

Conclusion you lost 100,000 bucks and your original down payment of 20,000 bucks went to realitors, banksters and lawyers. You can try to pay that off (since it took you approx 15 years for 20,000 it will take approxiately 75 years to pay off the 100,000 just to break even and zero out. So screw your credit rating zero out now, declare hardship, dish it out for 5 years and your credit ratings will be re-established.

#108 Devore on 03.11.13 at 5:01 am

#81 panhead

Just a view from the street …

The problem is that an anecdote is not the same as data. The good folks at VCI post daily sales/listing/inventory numbers from a local realtor, and the numbers for Jan, Feb and so far in March have been terrible across the board, going as far back as 2000, worse than even 2008. And considering population and households have increased 20%+ since 2000, that’s really bad. There is still one or two semi-lukewarm areas, but that’s to be expected, and that’s the nature of real estate; it’s very local. By and large, the Chinese New Year has been a complete bust, and the spring season is dead on arrival; if something significant is happening, it’s not being reflected in the numbers, at least not yet.

#109 Devore on 03.11.13 at 5:11 am

#35 DL

I’m sure Garth logs ip addresses and some of you are being slanderous and libelous about real estate agents.
Many, many realtors are as qualified as lawyers but without the letters behind the name.

Any lawyer knows the difference between slander and libel, and will never confuse the two, so I am assuming you are one of those realtors who are as qualified as lawyers, but without the letters behind their name. I mean, lawyers are just people who took a test to get a piece of paper, right? Garth, you may release my ip address for the inevitable slander lawsuit against me so I can have a good laugh as I toss it into the recycling.

http://www.youtube.com/watch?v=osR6be2UUHk

#110 habbit on 03.11.13 at 7:21 am

#43 Shawn Allen Good post. You make people think. Thanks for that. If home owner has HELOC and uses it to buy stocks ETF’s whatever, then sells house the heloc then has to be repaid out of the proceeds of sale. If investments not sold then in this way some $ does go out of housing into market no?

#111 The real Kip on 03.11.13 at 7:28 am

“Had the feds not engineered emergency interest rates for the past four years, greased CMHC with $575 billion (a 67% increase since 2007)”

The current low interest environment was engineered in Washington far more than Ottawa. Do you really think Canadian rates will rise before American rates do? Fat chance.

Absolutely. — Garth

#112 Victor V on 03.11.13 at 7:54 am

http://www.theglobeandmail.com/report-on-business/economy/housing/brokers-pursue-mortgage-break-for-first-time-home-buyers/article9579327/

Mortgage brokers are pressing the federal government to make it easier for young people to buy their first homes, just as the spring sales season descends and Ottawa prepares its next budget.

Jim Murphy, the head of the Canadian Association of Accredited Mortgage Professionals, recently met with finance department officials in a bid to convince them that their efforts to cool the housing market have gone too far, especially when it comes to the impact on first-time buyers.

#113 Ralph Cramdown Ⓤ on 03.11.13 at 7:57 am

Everyone, quit getting your knickers in a twist. As we have seen time and time again, real estate agents can’t spell. I’m pretty sure this poster meant to say that many, many realtors are qualified as liars.

#114 Over in Australian on 03.11.13 at 8:05 am

We have our own house hornies here in Australia…

http://smh.domain.com.au/real-estate-news/parents-back-offspring-in-fight-to-take-home-prize-20130308-2fqxb.html

” Matthew Bruce and his fiancee Hannah Aynsley have just bought their first home – a five-bedroom house in Newtown for $1,425,000.

”Obviously my dad guaranteeing the loan was the only way we were going to purchase this,” Mr Bruce said. ”You need to have a 20 per cent deposit otherwise the banks want you to pay insurance … it’s a bit of a rort really.”

Despite his parents’ generosity he said he would still need to rent out a few of the rooms to help pay for the mortgage.”

Rort? — Garth

#115 Turtle on 03.11.13 at 8:42 am

RE: #109 observer

“Let say you save all you life and your now 35 years old. You placed a 5% down payment ( approx 20,000) using your life long savings of 17years .”

This is not good at all. You should be able to save $20,000 in 20 months (let’s say approx. 2 years) with any double full-time income, but not near 20 years. If your savings rate $100/month – do not buy RE. I repeat – DO NOT BUY REAL ESTATE.

#116 Etobicokehead on 03.11.13 at 8:56 am

Inlaws pulled the trigger on a bung in west Burlington this weekend. Listed for 3 months, no takers. 2 price reductions. Finally sold below ask, for 10% less than it’s original list price.

It was owned by a realtor, who just got a valuable lesson in market momentum. Inlaws still overpaid for it. It’s Burlington for god’s sake.

#117 Shawn Allen on 03.11.13 at 9:08 am

CAPITAL COMING OUT OF HOUSING?

habbit at 112 said:

Shawn Allen Good post. You make people think. Thanks for that. If home owner has HELOC and uses it to buy stocks ETF’s whatever, then sells house the heloc then has to be repaid out of the proceeds of sale. If investments not sold then in this way some $ does go out of housing into market no?

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

Firstly, I can tell you are intelligent and think for yourself. Excellent.

What you describe is a individual selling a house and the equity going into stocks. But someone bought the house and so no capital has flowed out of housing.

Individuals can take capital out of housing but only when someone else puts capital in. In the net, for the population as a whole, no capital can flow out of housing. If prices fall wealth is simply destroyed. And that may not be a bad thing. If false wealth was created on the way up it should to go away at some point.

#118 Toronto_CA on 03.11.13 at 9:13 am

#105 Investx on 03.11.13 at 1:49 am

Revision to the mean will happen, but it could happen slowly with a lower drop in a prices over a longer period of time as inflation/incomes catch up. There’s more than one way to go back to the mean, a crash in prices being the most painful (for the economy). This is what Garth keeps talking about in “correction” vs “crash”.

#119 GP on 03.11.13 at 9:14 am

Rort? — Garth
—–
Rort is an Aussie term for a scam – particularly any fraudulent stuff involving the government or a government agency.

#120 On the sidelines on 03.11.13 at 9:18 am

#59 HogtownIndebted
BRAVO….. Best RE KO Iv’e seen on this blog . You’ve #1 in my books ( except for our bearded leader of course )

#121 Ret on 03.11.13 at 9:31 am

Well, I for one, am glad that there is no rorting of the system or government programs going on in Canada, at least not officially.

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

#122 rosie "moving forward" on 03.11.13 at 9:32 am

#73

They will sell the home for a loss. Rent someplace cheap, cheap. Then they will continue to pay off their debt until it is no more. Simple.

#123 Fix or Fall on 03.11.13 at 9:34 am

So you know those often irrelavant ads google squeezes in between youtube videos. It looks like Google has been kind enough to mine my data for Remax so they can tell me I ought to be living in Queen/King west. Google’s gophers nailed the part about me visiting the place, but I wouldn’t want to stay. I’m afraid the smell of hipster would start to rub off after a while.

Apparently there’s a whole series to tell the young hornies where to buy their glass box in the sky.

http://www.torontocondoteam.ca/torontocondos

#124 Grantmi on 03.11.13 at 9:38 am

On CKNW … Mortgage association is begging Ottawa to reverse the mortgage rules. They claim it’s only hurting first time home buyers…

Come here.. Go away… Now come here again!

#125 CP on 03.11.13 at 9:56 am

They’ll do whatever it takes to keep the bubble inflated Garth:

http://www.theglobeandmail.com/report-on-business/economy/housing/brokers-pursue-mortgage-break-for-first-time-home-buyers/article9579327/

#126 Ret on 03.11.13 at 10:01 am

Light to no traffic at north Oakville, Dundas/ Trafalgar road, open houses yesterday. The same in west Oakville and east Burlington.

One west Oakville $550,000, vacant 30 yr old 2 story, had mold in basement and a steel I-beam added to prop up the floor. The whole place was 1982. What do you want for $550,000?

POS estate sale home in West Hamilton creating an Asian investor feeding frenzy. No open house, but non-stop viewings all weekend. Another illegal student rooming house for sure. We gotta get outta here while the suckers are still lining up to buy these places.

#127 Intuitive Missus on 03.11.13 at 10:26 am

#121 – Toronto CA

TD Economics is saying pretty much the same thing. There is no clear answer here. It all depends. Each action causes a reaction. Cannot predict with certainty.

http://www.td.com/document/PDF/economics/special/LongRunRateOfReturnForCanadianHomePrices.pdf

#128 afraidit allmightend on 03.11.13 at 10:31 am

Pickin’s are so slim in Canada that even the immigrants are saying enough!!!! I’ll tell you what I hear most from longer term immigrants….is that the newcomers have not entered on a level playing field. That Canadians are taxed to death and have bugger all to spare at the end of the month while the newcomers from zero tax regimes can bring money in that hasn’t been subject to Canadian taxation levels are push them out of the competition.

Second complaint is the job saving regime that the politically correct government HR have a mandate to enforce……second generation from HK are not ‘new immigrant’ enough to get government jobs…..Bwahahahahahahahaha it’s madness.

http://www.nationalpost.com/index.html

Battered by high taxation and indirect fee rip offs of every kind Canadians of all stripes are up against it. The elite ideologues have designed a politically correct system that skims all the fat of your paycheque and has spread the revenue chain too thin…….it will soon collapse under its own bloated weight.

So who’s getting screwed…the old time taxpayer of course….the ones who should have benefitted from the countries progress but have instead been battered and barred……not the elite who have ingratiated themselves so far up the country’s arse that it will take a roto rooter to dislodge them……but what will be the catalyst to get Canadians up in arms to defens themselves against the elite piggishness that has overtaken the country?

#129 Grantmi on 03.11.13 at 10:38 am

TD Bankster.. predicting a lost decade in housing prices.

http://bit.ly/10D063q

“Come Here.. GO Away! No Wait! Come here AGAIN!!

#130 Holy Crap Wheres The Tylenol on 03.11.13 at 10:44 am

So let me get this straight, Are the price of Taco’s going up or down and if you are picked up dropped off by Aliens is there any Anal probing involved?

#131 Holy Crap Wheres The Tylenol on 03.11.13 at 10:50 am

Well China is definitely off my trip list again!
Lets hope what goes on in China stays in China.
Do not have the pork special here.
Moo Shu Pork
Honey Garlic Spare Ribs
BBQ Pork Slices
BBQ Pork with Beancurd
Pork with Satay Sauce
Pork with Szechuan Garlic Sauce
Ma Po Tofu
Spare Ribs with Garlic & Black Bean Sauce

http://behindthewall.nbcnews.com/

#132 James on 03.11.13 at 10:59 am

As Garth stated 15% correction nationally.

Big deal if you live in Toronto and own or plan to buy an SFD.

Nothing to worry about boys and girls. Tons of good and high paying jobs here on Bay Street.

#133 bill on 03.11.13 at 10:59 am

#72 littleB on 03.10.13 at 10:27 pm

http://www.youtube.com/watch?v=CdEBgZ5Y46U

#134 charles on 03.11.13 at 11:24 am

Got pitchforks?
http://www.youtube.com/watch?feature=player_embedded&v=QPKKQnijnsM

#135 Ralph Cramdown Ⓤ on 03.11.13 at 11:27 am

That TD report on house prices is far more interesting for what it doesn’t say than what it says. What it DOES say:
- average 2% nominal price increases over the next decade
- average 3.5% nominal price increases beyond 2015
OK, math students. If both of those predictions come true, how big is the “gradual, downward housing market adjustment over the next few years” that TD is forecasting.

#136 guelphstudent on 03.11.13 at 11:29 am

#85 Yep, “few” is kinda of a grey area, I should have been more precise in first comment.

#105 Those numbers are true, they are not however adjusted for inflation.

#137 coastal on 03.11.13 at 11:34 am

#16 dosouth,

You can’t believe a word that comes out of that dude’s mouth. The other day he’s bragging of a $3000 over asking sale except he failed to mention it was almost $50,000 under assessment in tony Oak Bay. He tries painfully to prop up the market and tout his well off contacts as the norm in Victoria. Anyone with that small a brain to use that narrow a window of people contact as the norm deserves to get burnt bad in this bizz.

#138 World Traveller on 03.11.13 at 11:38 am

Things are not so fun in Spain.

http://www.murciatoday.com/stock-market-values-of-spanish-real-estate-giants-have-plummeted_15423-a.html

#139 Dr. Hoof - Hearted on 03.11.13 at 11:49 am

#35 DL on 03.10.13 at 7:21 pm

I’m sure Garth logs ip addresses and some of you are being slanderous and libelous about real estate agents.
Many, many realtors are as qualified as lawyers but without the letters behind the name.

You can thank a realtor for your 100+% increase in your home values over the past years.

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

Yes, there are SOME good realtors, that do provide good service.

However, IMHO, ALL realtors have benefitted from a rather surreal market built on speculation, easy $$$ and inflation.

Realtors don’t gain much sympathy nor respect, because they and their allies still want the gravy train to continue, when the best thing would be for it to collapse and start over.

If you don’t understand basic economics and realize all those people financially ruined so you realtors can make a quick commission buck ?

Basically you realtors have screwed yourselves big time…you will self – cull.

#140 More Calgary Less Toronto on 03.11.13 at 12:08 pm

#66 Harvard Grad

“Renting does suck – and if you love renting – good for you – I just prefer to be “rent free” in my golden years.”
_____

Harvard huh? Oy. Guess you missed the class on opportunity cost.

Owners like you (who believe that rent = throwing money away) make it impossible to have intelligent discussion regarding rent vs. own. What’s worse is under-educated folk hold this simple math to be valid. Not to mention it’s this way of thinking spewing from people like you and simpleton realtors that have somehow convinced people to drive themselves into a life-altering abyss of debt.

“Rent free” in the golden years goes your logic huh? Back to the lesson you missed. Let’s for example take that equity value you’ll have tied up in this house of yours in 2 years (arbitrarily 500k). Also arbitrarily let’s say you’ll be 40 at this point and plan on retiring at 65. How much do you figure that 500k could be worth with 25 years of conservative investing? Do you think maybe that might cover any rental costs and more in those golden years?

We could also add in all the ownership costs you’ll have over the next ~50 years (subsidized of course for the lowly renter you speak of). Some of which include maintenance, interest costs, property taxes etcetera – but why start throwing around actual costs now? And let’s definitely not include the intangible benefits (for sake of ease). I guess bull times makes for a nice set of blinders.

For pure intrinsic value, I prefer to own as well. What I really don’t appreciate are folks like you spewing your inaccurate preaching to those too willing to listen.

I’m with Garth – I give up.

#141 Old Man on 03.11.13 at 12:25 pm

Well Mr. Turner in three days I am going to rat you out, and will have the dancing girls ready to party :)

#142 AprilNewwest on 03.11.13 at 12:25 pm

#115 Victor – We know these brokers and realtors don’t give a hoot about first tme buyers. Their only worried about their own fianances.

#143 Fred Tindle on 03.11.13 at 12:26 pm

What made Canada’s economy strong now hurting growth?
………What made Canada’s economy strong now hurting growth?
..By Brenda Bouw | Balance Sheet – 1 hour 34 minutes ago
….Email0
Print…….The Canadian Press – In this Dec. 12, 2012, photo, Lana Nguyen, right, holds up a shirt while helping friend Chris Ghiathi, left, shop in an H&M store, …more in Atlanta. THE CANADIAN PRESS/AP, David Goldman less

….It wasn’t so long ago, during the 2008-09 financial crisis, that Canadians were encouraged to take advantage of cheap debt to help consume the country out of recession.

Almost five years later, it appears that advice has come back to bite the Canadian economy.

According to a recent report from BMO Capital Markets, growing consumer debt, a slowing housing market, slashed government spending and low business investment are to blame for Canada’s current economic drag.

“The Canadian economy, held up as a model for other developed countries following the Great Recession, is now facing its own difficulties,” says the report from senior economist Benjamin Reitzes.

“Domestic growth drivers are all but tapped out.”

For starters, Canadian consumers can no longer be counted on to keep fuelling the recovery, especially considering the current debt to-personal disposal income at a record 153 per cent in the third quarter of 2012, Reitzes notes.

“Canadian consumers were the lynchpin of the economic recovery, contributing more than half of total GDP growth in 2010 and 2011. Unfortunately, a good chunk of that consumption was fuelled by debt, making it unsustainable,”
“Consumers and housing can no longer carry the economy, governments are expected to remain cautious, and business investment likely won’t grow strongly enough to provide a full offset,” Reitzes says, which leaves the country “at the mercy of the global economy.”

It wasn’t so long ago, during the 2008-09 financial crisis, that Canadians were encouraged to take advantage of cheap debt to help consume the country out of recession.

Almost five years later, it appears that advice has come back to bite the Canadian economy.

According to a recent report from BMO Capital Markets, growing consumer debt, a slowing housing market, slashed government spending and low business investment are to blame for Canada’s current economic drag.

http://ca.finance.yahoo.com/blogs/balance-sheet/made-canada-economy-strong-now-hurting-growth-144935170.html

#144 pbrasseur on 03.11.13 at 12:35 pm

28% YTY sales drop in Montreal for february, sales are now as low as they were in the same month of 2009 (remember what was happening then…)

In my own region of Vaudreuil-Soulanges (west of Montreal) sales dropped by 42% from a year ago!!!

Meanwhile listings are up 10%

These are not “soft landing” numbers…

#145 sue on 03.11.13 at 12:55 pm

How can a regular reader of this blog post about going to open houses or looking at properties? I find that really interesting.

#146 tony in hamilton on 03.11.13 at 1:07 pm

Warm day yesterday ib Hamilton–I drove around and checked for open houses. They were packed and when you looked at the sign in sheets at least 50% were Oakville–Toronto.

Prices are still doing very well in selected area–west end (university)–south west (seems like the place to be) and the east mountain (easy access to the Red Hill and hiway)

Most of the posters are from either Toronto or Van and I think there are still spots NOT going thru a melt down

IMO–condos–anything over 1$1 mil and just about anything in Van is getting torched but there is still money to be made and it’s a lot easier than the styock market

Your ‘sign-in’ comment suggests this is a fraudulant post. — Garth

#147 Not 1st on 03.11.13 at 1:08 pm

Garth re: Calgary

You keep referencing this as the next reckoning in real estate but even with budget problems, sub par oil prices and layoffs spreading in the patch, houses and condos are not following suit. What’s it going to take?

#148 lawboy on 03.11.13 at 1:56 pm

#31 HogtownIndebted
Inside the Future Shop, I noticed only two customers, who had a huge dog with them. (Guess the staff were so happy to have a customer they don’t worry about bylaws)
…..

I didn’t realize Future Shop was a food service store?

#149 17 yr old has question on 03.11.13 at 2:03 pm

I want to start investing.

My Dad said to get a TFSA and buy bank preferred dividend producing stocks on a monthly basis.

He said to get an online broker account and buy monthly (dollar cost averaging).

What do you guys think?

Good or bad idea? Any Suggestions

#150 Old Man on 03.11.13 at 2:05 pm

I checked TO out last night with mls, and thought xmas was over, as the dots were lighting up the city like an xmas tree, and had to adjust the spread often, as too many listings. Now, there were certain areas that were devoid of listings for the most part, while others were loaded. Now for the other, as go out daily to shop, so went to just two today, and when I walked in had to shout hello, as nobody around for me to pay my bill, and they came running for the cash – no buying customers in sight.

#151 claudius emperor on 03.11.13 at 2:14 pm

64 blase I’m still left wondering, who is left to hold the bag on all the fraudulent loans, the nothing-down loans, the high ration loans, the HELOC-funded mortgages, the whole rotten gasbag of easy lending, when it all goes bad?
————————————————
You and me, the taxpayers.
You think F would work extra hours to make up the losses?

The way I see it, we are talking about 50-60 k out of my pocket alone.
CHMC could be way worse, in US that would translate to 10 Trillions of government insured mortgages.
Of course it would explode. We will just pretend that nothing is happening so F can retire quietly.
There is no market to short, just the CA$.

#152 fred grindle on 03.11.13 at 2:18 pm

House prices to be flat for 10 years, TD predicts

http://www.cbc.ca/news/canada/ottawa/story/2013/03/11/house-prices-td.html

#153 jess on 03.11.13 at 2:19 pm

art project?

..”"For his latest subversive intervention, the self-described “contemporary artist and pirate” Paolo Cirio wants to give you the offshore tax benefits enjoyed by major multi-national coporations. To that end he hacked the corporate registry website of the government of the Cayman Islands, a popular tax haven south of Cuba that ranks second only to Switzerland for being home to the world’s secret and untaxed fortunes, stealing the identities of 200,000 companies registered there. Now he’s selling off the identities for ¢99 apiece on Loophole4All.com so that small businesses and private citizens can enjoy the same tax breaks.”
Click to enlarge the picture to see an example of what’s available. You can try this yourself, insert the name of your favourite company, and see what’s on offer in the Cayman Islands. (TJN should add, for the avoidance of any doubt: these are not true certificates with legal force but are part of an art project – indeed a truly weird, subversive and interesting one – designed to highlight the fakery that lies at the heart of the offshore system.)

Cirio’s project was reported on in the Cayman Islands too, where a Company Register spokesman said, among other things:

“Just like any member of the public is able to do, the person who claims to have hacked our servers conducted a search for companies on the registry’s website,” Mr. Dixon said. “He then cut and pasted the names of these companies onto a template, in order to create bogus certificates. To the unsuspecting public, these fake certificates appear to be authentic.”
Cirio now responds to the statements with some subversive, interesting and very appropriate points of his own:

Paolo Cirio, spokesman for Paolo Cirio ltd., responds to the Caymans press

Mr. Dixon’s statements are false and he is scamming people. Mr. Dixon, his colleagues, and the Caymans government sell incorporation of fake shell companies, whose main purpose is to defraud the rest of world, causing onshore budget deficits and ever-growing impoverishment. Mr. Dixon’s work must be considered illegal, shameful, and “the biggest tax scam in the world,” as the U.S. President Barack Obama described Caymans activity in 2008.

Mr. Dixon lies when he states that the information of companies registered in the Caymans is public. Simple access to the list of Caymans companies is granted only by request of a password, under legal disclaimers and with limited search functionality. Then, for no more detail than the names, the public must pay $35 for each additional entity, to reveal only a mailbox address and the date of incorporation. It would cost the public more than $7 million to get even a blurry picture of all the bogus companies falsely based in the Caymans islands. This “public” data is yet another fraud Mr. Dixon sells.

The Caymanian Compass reports that there are only 92,000 companies registered in the Cayman Islands. However, the Loophole4all project discovered 215,880 companies. Many of them had suspicious notes attached to their names, showing how the Cayman Registry is nothing near an honest, public account, but has been corrupted by multinational firms and local lawyers….” read more at

http://taxjustice.blogspot.co.uk/2013/03/loophole4all-over-200000-cayman.html

#154 claudius emperor on 03.11.13 at 2:20 pm

#66 Harvard Grad

See my previous post. And be prepared to pay my friend in your golden years for the fallout of the craziest credit bubble in our lifetime.
As for ‘missing the train’ or ‘the plane’ specially if it crashes after that, this is a blessing, not a miss.

#155 jess on 03.11.13 at 2:30 pm

Bermuda, Jersey, Seychelles and Delaware.next

http://www.royalgazette.com/article/20130221/BUSINESS02/702219958

#156 Old Man on 03.11.13 at 3:01 pm

#152: 17 year old – I can only tell you what I was doing at that age, as got me a part-time job, and had it all for the summer months with the same company, so was rolling in cash all year. I learned that cash was king, and bought me a cool set of wheels, as got the babes and dates. Ok when all is said the first step you must take is to acquire education about investing as best you can, and make your own decisions in life or if you have a pile of money that your grandparents left you find a qualified financial advisor; and discount the bank experts, as they know nothing. Eventually you will need to establish three important legal documents; namely a Last Will and Testament; a personal Power of Attorney; and a Medical Power of Attorney. A Life Insurance policy might become part of the equation, and look at nothing except 5 year renewable term.

#157 LP on 03.11.13 at 3:13 pm

#149tony in hamilton on 03.11.13 at 1:07 pm
Warm day yesterday ib Hamilton–I drove around and checked for open houses. They were packed and when you looked at the sign in sheets at least 50% were Oakville–Toronto.
……………………………………………………………………………
Your ‘sign-in’ comment suggests this is a fraudulant post. — Garth
……………………………………………………………………………
Actually Garth, 3 weeks ago at an open house in Wellesley, Ontario, which was staffed by the listing agent, we witnessed an ugly confrontation between the agent and a woman who loudly refused to leave her name. The agent wouldn’t allow her to go through the house so she stormed out, all the while grousing about “big brother” and so forth – quite a show on both their parts. Silly woman; when I’m asked to leave a name I simply write down “Elizabeth Rex” – no one ever bothers to query it.

We are so pleased to have you here, Majesty. — Garth

#158 Pr on 03.11.13 at 3:20 pm

147 pbrasseur
…These are not “soft landing” numbers…

You are absolutely right and its about time!

#159 rosie "moving forward" on 03.11.13 at 3:21 pm

Better jump on board. Looks like quite a ride.
http://www.slate.com/blogs/moneybox/2013/03/11/s_p_near_all_time_high_but_shares_are_still_cheap.html

#160 James on 03.11.13 at 3:27 pm

Quote from TD Report

http://www.td.com/document/PDF/economics/special/LongRunRateOfReturnForCanadianHomePrices.pdf

• Home price growth has traditionally performed well for
those in the above-average group. This trend ought to
continue due to better-than-average economic growth
and healthy levels of migration in store.
In the case of
Vancouver and Toronto, supply might also be difficult
to adjust given land constraints.

#161 sciencemonkey on 03.11.13 at 3:31 pm

I’d like to bring up another point in favour of renting, which is lack of rental increases. Some landlords will apply the maximum allowable yearly rent increase, whereas some will not impose any increase.

I moved into my current North York low-rise walkup in 2009. It was sold from one small landlord to another 1.5 years ago. I am a model tenant, always pay rent on time, etc. Happily, I have not yet had a rent increase. If you assume 3% inflation, that means 4 years later my rent is now 11% less expensive. My math is (1.03)^(-4) = 0.888

I’m curious how long these deals can go on. What if some people rent for decades without increases? One decade would result in 25.6% savings and two decades would be 44.6% savings. More importantly, if increases have not been applied in a yearly fashion, am I in danger of them being applied retroactively?

#162 Old Man on 03.11.13 at 3:37 pm

#158 jess – why do you think that every bank in the world over 100 of them are based in Hong Kong? Now it is under the control of China as a separate territory, and China will sign no agreements for disclosure for foreign deposits that are tax free unless such involves the mainland. China has a policy that Hong Kong is off limits, so the funds come into Hong Kong, and take a hop elsewhere for investments, all coming back 100% tax free. :)

#163 Tony on 03.11.13 at 3:40 pm

Re: #152 17 yr old has question on 03.11.13 at 2:03 pm

Very bad idea as you’re known as the “Johnny come lately”. Those are the people left holding the bag when the stock market manipulators unload. Market fundamentals have never been worst on record ever. This market will crash and burn a repeat of the dot com crash but all the U.S. indexes will be involved.

#164 oslec on 03.11.13 at 4:11 pm

#35 DL on 03.10.13 at 7:21 pm

hey DL, i’ve watched some videos on brain surgery in yoo-toob. I beleeve i am kwalipied to operet on brayns. Ip yoo eber need a brayn, e-male me.
I’ll get my lawyer to draw up a waiver you can sign.
Even better, you can write one up…

#165 raginnn on 03.11.13 at 4:33 pm

Canadian house prices could fall 44% with severe economic shock: Moody’s

http://business.financialpost.com/2013/03/11/canadian-house-prices-could-fall-44-with-severe-economic-shock-moodys/?__lsa=e0bc-7fbd

#166 Tom Vu on 03.11.13 at 4:51 pm

#160 LP on 03.11.13 at 3:13 pm

Actually Garth, 3 weeks ago at an open house in Wellesley, Ontario, which was staffed by the listing agent, we witnessed an ugly confrontation between the agent and a woman who loudly refused to leave her name. The agent wouldn’t allow her to go through the house so she stormed out, all the while grousing about “big brother” and so forth – quite a show on both their parts.

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

Local zoning bylaws should be revised so females only allowed in (2) rooms, (and not simultaneously).

#167 JustTryingToProtectEquity on 03.11.13 at 4:52 pm

#163 James

When are you going to stop drinking the banker’s koolaid? Don’t you see how they benefit from having more and more people buying houses? They aren’t acting in your best interest, why would they? They want your money. They want you to take on enormous debts. That is their only business. And they will soak you dry and soak every penny out of this market.

#168 smartalox on 03.11.13 at 4:57 pm

From the Vancouver Sun, re: TD mortgage report.

Never mind the nifty double-entendre of the headline, “Vancouver House Prices will Outpace National Average, TD Report says” (outpace how? Going up or going down?), I actually read the article, and saw this:

‘By contrast, TD expects prices to fall in the next two or three years, rising to average annual increases of 3.5 per cent after 2015 for an average annual gain of two per cent overall in the upcoming decade’

So I decided to run the numbers: what kind of a drop would prices have to see between 2013 and 2015, such that 3.5% increases from 2015 to 2023 net out to a gain of 2.0%? Starting with Vancouver’s proverbial Average Million Dollar house, I calculated that the property price would have to drop 22.5% by 2015, for the prediction to be accurate, best case scenario.

If the purported average 3.5% per year gains are loaded toward the end of the decade, (as we have seen in the recent large gains in prices with the US recovery) that first big drop gets bigger. A lot bigger.

Kudos to the TD bank, I didn’t think that it was possible to put that much lipstick on a pig. The Chinese could learn a thing or two, about passing off ugly sows, instead of just marching their pigs into the river.

#169 45north on 03.11.13 at 5:03 pm

pbrasseur: In my region of Vaudreuil-Soulanges sales dropped by 42% from a year ago

listings are up 10%

These are not “soft landing” numbers

no they are not, in my neighbourhood – south Ottawa I see sellers chasing the market down. There is no evidence of a soft landing.

just a wild guess but is your first name Pierre?

#170 Bargains everywhere on 03.11.13 at 5:08 pm

Re: #152 17 yr old has question on 03.11.13 at 2:03 pm

I think your dad has given you some excellent advice. Get your TFSA opened up with one of the online brokers and buy some very safe preferred shares to start. You might also want to consider a preferred ETF such as ZPR or CPD to diversify a little more.

As you learn you can branch out into other things but at the beginning it’s better to start with the tried and true safe investments. Don’t delay, once you get started you’ll find it extremely interesting and there’s nothing like it when your dividends start rolling in!

#171 Screwed on 03.11.13 at 5:41 pm

Garth,
What’s your opinion on buying older houses on acreages in the Valley? 600 to 700k buys 5 or more acres with some farming opportunity out there.
Thoughts?

Which valley? — Garth

“THE” Valley – Fraser Valley of course. Within 45mins to an hour from Vancouver.

East Langley, Abby, Mission and beyond … Acreages are priced lower than most SFH in Surrey, Coquitlam, Burnaby or 2-bedroom boxes with a view in the sky of Vancouver.

#172 AK on 03.11.13 at 5:53 pm

#166 Tony on 03.11.13 at 3:40 pm
“Very bad idea as you’re known as the “Johnny come lately”. Those are the people left holding the bag when the stock market manipulators unload. Market fundamentals have never been worst on record ever. This market will crash and burn a repeat of the dot com crash but all the U.S. indexes will be involved.”
——————————————————————–

LOL. I hope you are right. Bring it on..

#173 Old Man on 03.11.13 at 6:09 pm

#164 sciencemonkey – there is a new game in town, as the corporations are spending huge amounts of money, as have my modest penthouse on the cheap, and got my notice as they need to paint my door tomorrow, and next is the new carpets, and no painting anymore as they are installing expensive wall vinyl and the entire project will take two months. I took my building manager aside and he said have no clue, as it makes no sense. The landlord will be going to the rent review board crying that they need to raise the rents to cover the costs of all these expenses. I call bs, and let them hoop me over this all, as will be gone.

#174 Grim Reaper/Crypt Speculator Ⓤ on 03.11.13 at 6:12 pm

DELETED

#175 Tkid on 03.11.13 at 6:25 pm

* when I’m asked to leave a name I simply write down “Elizabeth Rex” *

I give a false name and address to realtors, but I had Coach (handbag shop) demanding to see my drivers license if I wanted to use a gift certificate. Apparently a polite “I don’t give that information out” is incomprehensible to them.

And everyone wants my postal code. Oy vey.

#176 Nostradamus Le Mad Vlad on 03.11.13 at 6:50 pm

#90 Geeks — “Nostradamus reincarnation?” — Whoa, hang in their dude — ain’t finished this lifecycle yet! See you on the other side!

#133 Holy Crap Wheres The Tylenol — “So let me get this straight, Are the price of Taco’s going up or down and if you are picked up dropped off by Aliens is there any Anal probing involved?” — A large, gaseous windbag, an orifice of immense proportions will be discovered at the right time by the right people. Caution: If you value your life, lie down on a road and avoid this!

#158 jess — Great link and #165 Old Man — Good post. Wonder if China will let it’s economy collapse to play (unfairly) with the US?

#177 Smoking Man on 03.11.13 at 6:56 pm

AK 175

How can the market crash, no retail money in. No volume, 1 big hedge fund can move the market any way it wants.

BBRY UP HUGE TODAY…… :)

#178 Mister Obvious on 03.11.13 at 6:59 pm

#168 raginnn

Another contradictory MSM piece. We’re toast! No wait… were OK! But it’s gonna be bad. Well, not so bad really. This thing’s going to blow! Except for those price increases we can expect by 2020. Only a fool would buy now but there’s no time like the present. Prepare for a very rosy future but expect big losses. Tedious newspeak.

#179 Kevin in Winnipeg on 03.11.13 at 7:06 pm

These are the average price and yearly increases in Winnipeg since 2006. It is too embarrassing to go back any further.

In 2006, a friend was selling her house in Riverview listed at $150,000. No joke, there was a 10 inch drop from the kitchen in the back to the living room in the front and a leaky, damp basement. Shockingly, it sold for $180,000 with multiple offers. It is valued at well over $250,000 now, just how it sat then.

It seems life is all about taking risks when the opportunity arrives. Going with the herd also seems a whole lot easier than being a contrarian sometimes.

2006 $151,323.64
2007 $168,212.31 +11.16%
2008 $190,440.67 +13.21%
2009 $202,996.55 +6.59%
2010 $222,049.15 +9.39%
2011 $233,805.08 +5.29%
2012 $245,897.99 +5.17%
2013 $247,634.00 +0.71% (first 2 months of 2013)

#180 Goldfinger on 03.11.13 at 7:07 pm

Front page of CTV news … what will realtors and pumpers say now? TD Bank is wrong too ?

http://www.ctvnews.ca/canada/the-value-of-your-house-may-remain-flat-for-10-years-td-bank-1.1190770

#181 TurnerNation on 03.11.13 at 7:12 pm

Rort = Root?

Where is Aussi Roy these days.

#182 salonist on 03.11.13 at 7:27 pm

dear garth,
condo crane up bronte,lakeshore.
no harley culture in oakville.

#183 James on 03.11.13 at 7:29 pm

JustTryingToProtectEquity

Well basically the return will be similar to GIC. The return might be dismal but at least you own a home and can enjoy it….which is another way to protect equity.

#184 TEMPLE on 03.11.13 at 7:32 pm

#164 sciencemonkey on 03.11.13 at 3:31 pm

More importantly, if increases have not been applied in a yearly fashion, am I in danger of them being applied retroactively?

You probably don’t have to worry too much. There are annual, non-retroactive limits on rent increases at least in BC and Ontario (and probably in most other provinces). A landlord can apply for a larger increase in some circumstances but a tenant can dispute those increases. You should Google this stuff!

Here is a link to get you started:
http://www.rto.gov.bc.ca/content/rightsResponsibilities/rent.aspx#131

Anyhow, a more important thing to keep in mind is the value of a good tenant to a landlord. Depending on where you are living, finding good renters can be quite competitive. I am in an area of high vacancy rates, meaning my landlord doesn’t have much leeway to move my rent up because I will simply move to one of the many other available rentals. I like money more than I hate moving.

If gouging a few extra percent a month is worth it to your landlord, let him or her risk the carrying costs of an empty rental and the hassle of preparing the place for a new tenant. This is a negotiating point if a rent increase notice arrives at your door and you don’t want to pay. It hasn’t always worked for me, but it can. I’ve rented for years in places without rent increases (something that is possible partly because I am a good tenant).

TEMPLE

#185 TEMPLE on 03.11.13 at 7:44 pm

#152 17 yr old has question on 03.11.13 at 2:03 pm

My Dad said to get a TFSA and buy bank preferred dividend producing stocks on a monthly basis…Good or bad idea? Any Suggestions

You are too young for preferred shares (or, as I like to call them, exchange traded bonds). Nothing wrong with preferred shares, but they are old man’s stuff. At the very least, learn about some of the various index funds and ETFs before you buy any preferred shares. Common stocks will give you reasonable dividends and much greater potential for capital gains.

Start reading books on investing! Your local library will have an excellent collection, complete with records of what previous readers were eating while reading. Personally, I really liked ‘Stocks for the Long Run’ by Jeremy Siegel. I am sure people here will recommend some other good ones.

TEMPLE

#186 Grim Reaper/Crypt Speculator Ⓤ on 03.11.13 at 7:49 pm

DELETED ?

Damn and that was a good joke too

#187 Conrad on 03.11.13 at 7:51 pm

[It’s why I’ve told people for the past few years to ready for a price decline of 15% nationally (more in the frothy areas, less in demand pockets), then years of flatlining or decline as our demographics go negative.]

But where are those same people suppose to go? That 100 percent of all homeowners “wrinklies”, “farts”, whatever you want to call them, where will they go? Where should they go? That all boomers are in negative equity positions on their balance sheets across Canada? So every single home owner in Bridle Path will list their house tomorrow in a downward market, and move where? Peterborough? Are you kidding? You really think that’s going to happen? Where have you seen this take place? That because the market values on inflated parcels of land corrects or crashes to the tune of 25 percent across Canada…..where will those “wrinklies” go? They are all going to move to Saskatchewan? You must start finishing your line of reasoning Garth. You cannot merely assert that because all the “wrinklies” in the States handed their keys over to the banks and walked away from their homes that all “wrinklies” will act the same way here in Canada. Makes no difference how much you keep repeating it like a broken record or how much hyperbole you keep injecting into your drivel. Where are those same people suppose to go? Answer that question? Where ought to people go when they witness a 20 percent collapse of home values. What of those people that own outright? That more than 30 % of all homeowners are in negative equity positions on their balance sheets within months and are walking away from their properties??? You generalize and say that people will foreclose, but where are they suppose to go? Where ought they make their homes. In the alley way?

Best estimates are about 30% of Boomers will have little choice but to sell in order to raise income. That’s enough to materially impact the market. You can dis me now, or wait and watch it. — Garth

#188 maxx on 03.11.13 at 7:52 pm

#47 Freedom First on 03.10.13 at 8:08 pm

Helocs, aka Hell-locks. Good post.

#189 Editor on 03.11.13 at 8:03 pm

#187 Correct about landlords – the smart ones anyway – wary of vacancies. We calculated it would take our landlord 16 months to make back the increase in rent they requested if our place was vacant for a month. A little math goes a long way.

#190 Smoking Man on 03.11.13 at 8:29 pm

17 yr old has question on 03.11.13 at 2:03 pmI want to start investing.My Dad said to get a TFSA and buy bank preferred dividend producing stocks on a monthly basis.He said to get an online broker account and buy monthly (dollar cost averaging).What do you guys think?Good or bad idea? Any Suggestions
……………….
Your dad’s an idiot, now if you have a wad of loot it’s not a bad idea. @17 take big risks.. Long full margin on volitle stocks… Heads win, tails you lose……

Start a fund and invest in medical weed in the USA where some states have made it legal… It’s a growth industry :)

#191 CrowdedElevatorfartz on 03.11.13 at 8:31 pm

@#190 Conrad
the last line of your statement,
“but where are they suppose to go? Where ought they make their homes. In the alley way?”

Ever been to downtown Vancouver?
Lotsa cardboard box’ers livin there…….

#192 AK on 03.11.13 at 8:45 pm

#180 Smoking Man on 03.11.13 at 6:56 pm
“AK 175

How can the market crash, no retail money in. No volume, 1 big hedge fund can move the market any way it wants.

BBRY UP HUGE TODAY…… :)”
——————————————————————-

Mr. Smoking Man, the reason there is no volume in the market these days, is due to the corporations buying back their shares in large volumes. The market is cheap and getting cheaper.

The retail investor was scared to death back in 2000 during the dot com days. And the one who are still in the market, like myself, we do not trade excessively.

#193 Dr. Hoof-Hearted on 03.11.13 at 9:06 pm

#193 Smoking Man on 03.11.13 at 8:29 p

Start a fund and invest in medical weed in the USA where some states have made it legal… It’s a growth industry :)

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

Grow all you want..just don’t use it.

RECALL: Employers that insist on drug testing as a condition of employment ….

#194 Tony on 03.11.13 at 9:57 pm

This guy isn’t having a great year and he’s long all these stocks!

http://100000goal.com/

#195 Red_green17 on 03.11.13 at 10:21 pm

@62 – Meanwhile on the west end of Ottawa, we’re seeing houses going up everywhere as well. Some are selling however from what I have noticed. mind you we’ve only just begun. I expect by mid April to see a plethora of homes coming available along with the opening of several house projects (Fernbank Crossing being the largest) in Mid-late March here. Those selling today are the smart ones. Those waiting to compete for my dollars are surely going to be the suckers lowering their price.

#196 Conrad on 03.11.13 at 10:35 pm

Wrong, wrong, wrong. No terribly sorry, you still have to answer the question. Boomers are all going under water in Canada and moving where? Just answer the question. What’s so difficult about answering the question. You yield to some horny realtor by suggesting, “demand pockets??” will not contract as much as “frothy areas.” So you ought not to have problems positing those “frothy” versus “demand” areas. So what the hell is that suppose to mean? Go on answer the question, where are people suppose to foreclose these assets called homes and end up? You tell me, and the rest of the Canadian tax payer scum. We’re all doomed based on your line of reasoning. The boomer is to sell and go where? Say it! Where? Into some dog kennel in the suburbs? Better yet, a dog kennel in Toronto where the strata imposes high fees to the tune of $500.00/month? and Property taxes on top, and utilities on top just to live? That makes a ton of sense to downsize in Canada. No it actually doesn’t. You must start using concrete examples of where people ought to foreclose on these assets called homes and start living in dog kennels/cardboard boxes/alley ways/sewers? You must show what real options are available for those that put capital at risk and do nothing, except choose to live, and pay taxes as any normal human being in Canada does. We all pay taxes irrespective of whether we own homes or don’t own homes. But that everyone that owns a home in Canada and is going to lose more than half their equity in the next 10 years? I don’t know where or how that formulation computes given the options. That everyone in the City of Toronto is going to move to Oshawa to forego a market collapse? And what about paying more for transportation, fuel, other sin taxes while you save on downsizing into cheaper flats? That all Canadians do this? And there will exist zero percent inflation on those same homes in the suburbs as result? Again, all hogwash mathematics prescribed on the merits and principle of “doomsday.” That if you keep repeating it, and change your tone, and inject hyberbole, and verbal masterbation to the exponent of 10 that makes all of what you say true. Strong work. I want concrete examples of areas across Canada that experience the corrections you foresee. It makes no difference what you keep saying to be true now, whilst what you said 36 months ago ceases to come to fruition. Interest rates are still at an all time low. Bank of Canada has been threatening to raise rates for over a decade and nothing. No retort. Nothing.

#197 James on 03.11.13 at 11:07 pm

#199 Conrad

Garth already answered that question. You are too angry to see through.

Let me enlighten you. His point is, it doesn’t take much to move the market in a big way and 30% will be just enough. Where will they move? Again it doesn’t really matter but they ain’t buying a McMansion. Ever heard of renting and old age and & elderly care? Or moving in with family?

Will that happen? Nobody really knows for sure.

Makes sense? Just grab a beer and think about it….

#198 Over in Australia on 03.12.13 at 8:38 am

RE: #117

“rort” Mortgages of greater than 80% of purchase price attract compulsory LMI or Lenders Mortgage Insurance which protects the bank (not you, the underwriter of the LMI then chases you for the money)

Some view it as a rort.. A scam or fraud…

Still holding my call for Gold and Silver this year btw despite current events…

#199 Andrew on 03.12.13 at 8:52 pm

There are only a few thousand houses in Leslieville, and 2.79 million people in the City of Toronto, so there are far fewer houses in Leslieville (or any of the “hot” neighbourhoods in Toronto for that matter) than there are people who want them. Therefore, even if prices fall a bit due to rising interest rates, there is no way that houses in the desirable parts of Toronto will ever be affordable, because there is such a severe shortage of houses in Toronto.