Junkies

CAGE

Four weeks ago at Scotiabank (and others) you could take home a five-year closed mortgage for 2.89%. This week it’s 3.19%. Yeah, still cheap. But things are changing.

Yields have been creeping up in the bond market, which is hardly surprising. With double-digit returns so far this year in equities, money’s flowing out of government securities, bringing prices down. And because banks finance fixed-rate mortgages in the bond market, bingo, up she goes.

So the Big Bank in Ottawa doesn’t need to change its own rate one sous for the cost of home loans to rise, as they are now. This is something nine in ten realtors don’t understand, as they cling to the myth that emergency rates are now permanent.

Also in the air is a new round of tightening, almost invisible. As I told you a few weeks ago, 30-year mortgages, even with 20% down payments, will be eliminated entirely this year. The effect is to raise mortgage payments and reduce sales by up to 10%. And the bank cop, OSFI, has been crawling up the butt of major lenders, pushing them to quash risk and make borrowers jump through new hoops.

As one senior bank lender put it in an email to realtor clients this past weekend:

“What this means to me is….   (1) It is more important than ever that your clients are “future proofed” with their mortgage…..a customized strategy to prepare them for the eventual rate increase they will inevitably face. (2)  documentation requirements and due diligence on the part of all lenders has gotten tighter recently, as a result of OSFI audits being conducted at all lenders…..and we should not expect this to change any time soon…..  getting a mortgage now….is not as it was 3 years ago….so we need to work together to align client’s expectations as to the paperwork that may be requested.”

Why’s this happening?

Simple. The feds know what’s coming. They’re getting ready. It’s why F intervened in the mortgage business several weeks ago, forcing BMO to abandon its 2.99% Special early, and preventing Manulife from marketing a product with an even lower rate. It’s why that 30-year loan is marked for death, and why teams of OFSI inspectors have been blowing through the mortgage departments of the monster banks.

Ottawa won’t use a Bank of Canada rate increase to topple the overheated real estate market, because that would be just too nuclear. Instead, it’s bubblicide by stealth – a suite of actions now starting to seriously scare some observers. One of them is the association of mortgage brokers (CAAMP) which recently made headlines by claiming F’s recent changes will erase 150,000 jobs over the next few years and carve a hunk out of the economy.

This is dramatic, but not extreme. Already construction starts have been scaled back sharply, and the mortgage business sucks. As spring fades into summer, housing sales will continue to slow, just as the feds tighten the screws further on lenders. It’s all heading for what F hopes will be that soft landing, allowing interest rates to stay low enough to breed economic recovery, but without fuelling the credit bubble he’s created.

However, it won’t work. Ottawa may have cut the market off at the knees, but it missed the castration.

Here’s  Vince. He has a good example of why we’ll hit the wall:

My brother listed his 1 bedroom condo for $340k – pretty reasonable.  South of the 401, just off Yonge.  Place is fully staged — and it’s quite obvious that it is. (I almost think this can work against you in a down market because people think that you needed a stager to sell it.)

The buyers didn’t have an agent and decided that they wanted to meet in person to present an offer. First offer: $303. At this point, I should have told my brother there’s no point ‘negotiating against yourself’, i.e. if the offer is so low as to be unreasonable, it’s not a fair starting point.

He was furious, and made the only reasonable counter he could: $338. Second offer: $319 (still $20 under original ask). My brother countered with a final offer of $329.

The buyer came back with a whopping $320. (yes 1k over the previous offer)  And my brother told them to piss off. Either these potential buyers are brilliant, or they read your blog, or both.  Anyway he has had very few bites, even at what is a reasonable price.  It’s rather concerning.

What’s concerning is the existence thousands of sellers who think just like Vince’s idiot brother – that they should get 2011 prices in 2013. They don’t get the concept of ‘market price,’ in other words a valuation determined by a complex set of factors including affordability plus supply and demand. We’re a nation of housing junkies, believing every seller is entitled to a profit, 100% of the time, because real estate always goes up.

Vince’s thick sibling actually turned down an offer which was 94.1% of the ask. Now he has no other prospects, and will probably end up selling in July or August for less than the paper he threw away. I’ve seen this happen over and over again in the last year.

It’s the human reason sales fall far in advance of prices. Real estate entitlement is endemic. We’ve all turned into greedy little Brad Lambs convinced owning a house or condo bestows the right to windfall gains. It will take some pain and fear to change that. And, of course, it’s coming.

165 comments ↓

#1 Tom Vu on 05.26.13 at 4:33 pm

1+1-2 + 1/2 +1/2 +/- Smoking Mans IQ

#2 will on 05.26.13 at 4:34 pm

Makes you wonder what he paid and when he paid for the place.

#3 Pulp Faction (Dorf) on 05.26.13 at 4:34 pm

This will continue to be repeated over and over again in the years to come. Everybody is asking “Fairy Tale” prices, and they feel entitled to get what they ask for it, like it’s the last house on the earth for sale.

#4 TorontoVid on 05.26.13 at 4:43 pm

So true … I am happy I sold my place now I am looking to invest my money and rent .. Just wait 3 more years and buy for cheap again and sell after 10 years to crazy losers that believe to buy when price is high and sell when price is low… Thanks Garth for blog book and education

#5 Van guy on 05.26.13 at 4:44 pm

Hi Garth,

You’ve been saying for a while now that the bond market will affect long term rates. Just this spring when rates went as low as 2.79%. The bond market has almost went unchanged in the last few months, so why are banks raising the rates now?

See for yourself. — Garth

#6 Chooch on 05.26.13 at 4:45 pm

What if I have a ton of equity in my home? Downsize? Or relax. Selling and renting would be big culture shock.

#7 Fed-up on 05.26.13 at 4:53 pm

What’s amazing is that the moronic buyers actually offered $320K for one of thousands of these air spaces for sale right now. They just dodged a bullet, big time.

#8 ben on 05.26.13 at 4:55 pm

Oh god. First.

#9 Brad J Lam on 05.26.13 at 4:56 pm

Geez…you are early Garth! Think I am FUURST! Another great post!

#10 MF on 05.26.13 at 5:01 pm

I don’t understand why the public and media don’t have real numbers to work with, why the only info comes from biased sources (realtors, banks, etc). If the CRA needs to know how to charge you capital gains (even if result =0 due to principle residence) then the gov’t has all the info -number of sales and for how much. So they should be able to anonomize the info and provide real stats to the public. Or the govt could simply make a rule that the selling price and date must be provided to them.

Due to the clear and present danger housing has on the economy, and especially watching the housing bubble carnage around the world recently, why is there still no proper info? People make dumb financial decisions partly because they don’t have all the facts.

Am I missing something in my logic?

#11 tito on 05.26.13 at 5:03 pm

My dad tells me that house prices are actually going up in his Langley BC neighbourhood???

Tell dad to do some research. Median price down $14,000. — Garth

#12 PermaBear on 05.26.13 at 5:03 pm

Even though the Leafs and Raptors are done,
The Big Smoke still has the Jays and the champs Argos.

#13 tito on 05.26.13 at 5:05 pm

And at work (Vancouver) I overheard a conversation where someone remarked that “1.7 Million is nothing for a house these days”…

#14 Mike on 05.26.13 at 5:20 pm

I wonder if anyone has paid attention to the bond yields in relation to sales numbers on a month to month basis. Has anyone noticed that in months with rising yields (however slight), the sales numbers have been particularly bad?

#15 rosie "moving forward" on 05.26.13 at 5:20 pm

The guy in the middle just sold the nice lady beside him (she used to be from the bank) a new condo. The other guy is planning his next blog entry. http://www.postcity.com/images/cache/a3eec97b97c4dc48c6932fb98d0865a4.jpeg

#16 Andrewski on 05.26.13 at 5:23 pm

Forrest Gump quote “Stupid is as stupid does”!

#17 D.D. Corkum on 05.26.13 at 5:25 pm

“The bond market has almost went unchanged in the last few months, so why are banks raising the rates now?”

—-

By no means do I think “technicals” are gospel, but they do give some useful insight here.

The long-term Cdn gov. bond got as low as 2.2% last July. Since then, it has been demonstrating “higher highs” and “higher lows”. If this pattern fully repeats with a breakout above 2.65%, that will be very strong evidence of a long-term upward trend (ie, on the scale of years).

You can expect banks, who probably pay more attention to these things, to be anticipating this trend.

#18 peter on 05.26.13 at 5:27 pm

Over valuation of real estate in Canada is a decade old story. Maybe it is different this time? There is no upward pressure on interest rates so who knows how long this real estate euphoria will run for. Central banks are distorting the natural order of things making it impossible to measure or forecast much.

#19 Texasboy on 05.26.13 at 5:32 pm

I remember a conversation 2-3 years ago where I tried to tell someone at work (different part of the world, so volume was already down there) that lower volume comes before lower prices… I got dismissed under the “volume can only be lower if there is inventory shortage” argument… What could I say… Spoke to that person last month… Kicking themselves of-course since the are now forced to sell and are getting about 25% less than they thought/planned on…

#20 Junkies — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate – The Affluent Boomer on 05.26.13 at 5:35 pm

[...] via Junkies — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. [...]

#21 T.O. Special on 05.26.13 at 5:43 pm

Seriously? The seller countered with $338K? Two big K off the asking price?
WOW!
And then turned down a very reasonable $320K offer on a $340K asking price?
What, the bidding war you were expecting at $340K didn’t materialize?

#22 Herf on 05.26.13 at 5:55 pm

Be interesting to see if some fortunate, patient buyer(s), purchases Vince’s brother’s place for <$300K. That should really make bro' spit sparks!

#23 TurnerNation on 05.26.13 at 5:58 pm

500 Toronto Kandos for sale within 1 large city block. If I move the map up even a smidgen, it maxes out. Wide load, oversized load.

6 months ago, nothing was at less than 300k. Now it’s edging towards 250k. This is big news.

http://tinyurl.com/nubmvjo

#24 Aussie Roy on 05.26.13 at 6:22 pm

Aussie Update

No bubble here, just ask a mortgage provider

Biggest Aussie non bank lender says

BUY and buy now, market has bottomed.

“If you want to pick a time to get into housing, you can’t get a much better time than now,” Mr Symond told more than 3000 agents at the Australian Real Estate Conference on the Gold Coast.

http://www.news.com.au/realestate/buying/australian-property-market-to-turn-corner-after-election-john-symond-says/story-fndban6l-1226646868902#ixzz2URIiXtUk

So the markets bottomed and on the rise?

Better tell RP data, John.

“In the week ended 23 May 2013, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, recorded a large -0.75% decline, which followed last week’s -0.45% fall. It was the biggest weekly decline in over a year.”

“Values are down -4.2% since peak at the 5-city level, with all major capitals in negative territory.”

http://www.macrobusiness.com.au/2013/05/weekly-rp-data-house-price-update-13/

#25 Dr. Hoof - Hearted on 05.26.13 at 6:48 pm

Karma…

It has been my experience, when one is selling something….that very often the BEST and/or O-N-L-Y offer is your FIRST offer.

Re Vince’s brother ?….the potential buyers didn’t have any agent, no evidence the offer was in writing…so the offer may have been a smoke blowing exercise.

#26 John Prine on 05.26.13 at 6:51 pm

On Vancouver Island, Parksville and Qualicum Beach are still doing well, however asking prices are down, in April 2012 there were 53 completed sales and this April 61….Only 3 over $500K though, anything above is pretty much dead in the water. Many have been re-listed several times over the last 3 years..

#27 TurnerNation on 05.26.13 at 6:52 pm

Oh I get today’s photo. Adam & Eve.
A rib (joke) cage.

#28 BWilson on 05.26.13 at 6:54 pm

The Coal Harbour condo market in Vancouver is tettering on the edge of a cliff and won’t take much at all to go over.

Even at the peak of the spring selling season it’s still a “buyers market” based on sales to listings. There are tons of ads on Craigslist for Coal Harbour condos for rent – furnished and about double what a market clearing rent is for an unfurnished unit. Asking isn’t getting in this case obviously and the owners have likely priced their ask to match their carry, because market rent works out to about a 1.5-2.0% cap rate and that won’t pay the mortgage!

Nothing has been moving here for over a year now. With 50% of Downtown Vancouver condos investor owned (based on research from BTA works) all it takes is for people to understand that prices aren’t bouncing back anytime soon for the market to crash. Because at a 1.5-2.0% cap rate, owning a condo only makes sense if you assume prices are going up.

One unit was recently listed at $729k – a premium to assessed value of 702k which is really pushing it in this market. The sellers likely got no interest at that level so decided to try a dramatic drop to 615k in the hopes of starting a bidding war. The listing on MLS even said email your bids by May 13th at 4pm! It’s two weeks later and the price is back up to 699k – I guess the bids weren’t what they were hoping for.

#29 TheMechanic on 05.26.13 at 7:05 pm

A local young couple just bought our South Okanagan home. We had been trying to sell for a couple of years and finally realized that we had to accept that price declines were here to stay. Our realtor told us that 4% of listings in our area had sold this year. The realtors out here watch the Alberta Market, Calgary in particular like hawks. I guess the correlation is that when Calgary is hot, there will be more sales in the Okanagan as some Albertans cash out. From what he says, it’s picking up in Calgary but the realtors are worried that it may be too late to salvage the peak selling season. This will be one of the hardest hit areas as unemployment and poverty rises because the economy here depends on an influx of government, tourism, and retiree money to keep them afloat. If Garth is right, and I see no reason to think otherwise, the coming economic downturn will trap a lot people under big mortgages in the Okanagan.
Just glad we got out.

#30 KG on 05.26.13 at 7:06 pm

Why would a one bedroom in air cost > 300k ? Go buy a hot air balloon for one tenth and you can also choose location location location.

#31 Piccaso on 05.26.13 at 7:18 pm

Are you F&%KING KIDDING ME !!!

I’ve been in the U.S. to long, I’m back home in Canada and have a possible 1 year Nokia contract in bald prairie Regina, Saskatchewan with a population of 200K.

You can’t get a weekly price quote on any extended stay and it’s like $170.00 a night for the cheapest flea bag motel.

What the flying f%&k has happened to this country?

#32 -=jwk=- on 05.26.13 at 7:25 pm

Price hike!

While back I noted a semi in our hood – listed for 499k and had three consecutive open house weekends. Prices drop to 469, then 459 then it sold. took about 9 weeks which is an eternity around here. At the same time a SFH bung (smaller than the semi) was up at499. It was nice for a 2bedroom, busy open house, very popular agent around here. listing pulled 3 weeks later.
Went back up this week, open house this weekend. New price? 565k. Yeah, that’ll work. I’ll keep you posted…

#33 Hiram Abif on 05.26.13 at 7:27 pm

Feeling out prices in etobicoke this weekend,
One house listed on mls for 684k, when i got to open house agent said price dropped to 639k.
Another house in same area dropped from 629k to 599k.
In my area(Woodbridge) townhouse dropped over the weekend from 526k to 498k.
My agent insists he has not seen any price drops!!

#34 Julie on 05.26.13 at 7:27 pm

And just in case you people are wondering where are your “Hard Earned Money” goes…..

We were shopping around for an RV to tour around the US to sell our wares to different suppliers and we were asking who bought those rows upon rows of 150 – 450 thousand dollar RVs…..

Yup….you guessed it…..GOVT WORKERS and their gold plated pensions. Remember that the next time you come down on the lolely MP or MLA. How about the 3000 minions under them that make 150 to 350K a year for pushing around paper and getting nothing done….

Enjoy the day in RAINcouver at 9 degrees Celcius at the beginning of JUNE with Global Warming…..right Bill Good of NW news?

#35 Van guy on 05.26.13 at 7:30 pm

Will preferreds follow the same path as the bond market? Or is that only when the BoC raises their rate?

Thx!

#36 Dr. Hoof - Hearted on 05.26.13 at 7:30 pm

Yikkessss !

http://www.dailymail.co.uk/news/article-2330280/Maybe-sex-doesnt-sell-Prostitutes-going-business-struggle-rising-rent-costs-energy-bills.html#ixzz2UF4zzvh3

#37 Koshy Alex on 05.26.13 at 7:31 pm

You still can get a 5 year fixed for 2.76 from TD,

Link? — Garth

#38 Ralph Cramdown on 05.26.13 at 7:31 pm

If our heroic seller had put the squeeze on his agent for the 2.5% that the agent wouldn’t be paying to a co-operating broker, he’d basically have been getting his full asking price. Just sayin’.

#39 X on 05.26.13 at 7:34 pm

I overheard 2 guys talking at the gym today. 1 guy was saying how overpriced the RE market was, the second guy questioning him, asking how he knew it was overpriced.

His reply made me laugh.

He replied that the condos in the area he wanted were asking about $500,000, and for those prices he would rather do other things with his money and keep renting.

I couldn’t agree with him more.

#40 Sideline Sitter on 05.26.13 at 7:39 pm

went to an open house today… it was nice, but a little bit overpriced. well, about $100k overpriced IMHO. still, with so few houses for sale in the neighborhood, I bet it sells for a tad over asking.

with more than 75% of Toronto families owning, my hope is that there are no more buyers left…

#41 Ralph Cramdown on 05.26.13 at 7:41 pm

Oh and CIBC and RBC both have ads in the weekend papers extolling the virtues of their FOUR year mortgages at 2.99%

#42 T.O. SFH -A short look at numbers for active inventory, % of asking price, average sale prices and DOM (May 01 to date on 05.26.13 at 7:49 pm

This is interesting, very interesting! Apparently F’s June 2012 changes affected the sales for houses above 1 mil $ but look at houses between 1mil $ and 1.4 mil $, REA can still report “over asking” prices. I wonder what this means.

http://recharts.blogspot.ca/2013/05/to-sfh-short-look-at-numbers-for-active.html

#43 Koshy Alex on 05.26.13 at 7:52 pm

You still can get a 5 year fixed for 2.76 from TD,

Link? — Garth

Garth will confirm it if I get the preapproval at this rate this week, this rate was offered to me when we moved the application,

It is not available now. — Garth

#44 Daisy Mae on 05.26.13 at 8:04 pm

43 comments ↓
#1Tom Vu on 05.26.13 at 4:33 pm
1+1-2 + 1/2 +1/2 +/- Smoking Mans IQ

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

Why, oh why, do we have to start off with idiot posts such as this, when Garth is explaining the serious situation we’re in? Very Exasperating…

We know we have alot to learn…and we’re trying to learn it! Geez!

#45 Van guy on 05.26.13 at 8:18 pm

#43 Koshy Alex on 05.26.13 at 7:52 pm
You still can get a 5 year fixed for 2.76 from TD,

Link? — Garth

Garth will confirm it if I get the preapproval at this rate this week, this rate was offered to me when we moved the application,

It is not available now. — Garth
—————————————–
This rate is still well and alive but just not advertised. My good friend is a mortgage broker and he says its still available from several of his lenders. This rate only applies on a quick 30 day close and is not available for renews. The rate for a Re-new is 2.89%.

The assertion was that the rate is currently available from TD. I have evidence that is correct. — Garth

#46 Tony B on 05.26.13 at 8:28 pm

I just received emails from two mortgage brokers last Friday with 5-year fixed mortgages at 2.65%. They stated that the banks emailed them with new lower rate promotions.

#47 MortgageBrokerinToronto on 05.26.13 at 8:35 pm

Major changes happening with lenders right now on how they calculate payments on credit limits available. They are now using 3% of the limit available as a payment in the liability section of applications causing a major increase to TDS ratios. This will have a huge effect on the market. Throw in maximum 25 years amortization regardless of ltv and you’ve got a lot of declined applications for mortgages on the way resulting in lower home prices GUARANTEED. Right now is the absolute worst time to buy a property. Values will be falling steadily for years to come.

#48 AC on 05.26.13 at 8:43 pm

Check this link…
http://www.ratehub.ca/best-mortgage-rates/5-year/fixed

#49 HogtownIndebted on 05.26.13 at 8:43 pm

The house we once rented in C2 Toronto (Winona area) was sold recently. The place was bought five years ago for about $400K, and has been sold for about $985K.

Bought by a young house-horny couple in their early thirties who have “fallen in love” with the neighbourhood. They presented a bully offer, two weeks before the place was to be listed. Reno work is still ongoing. On the same street, another couple has put up flyers saying “we want to buy a house in this area, please call us!”

Before selling, the owners did a gut reno, costing about $150K. I asked the contractors I bumped into one day about some of the things we knew were problems, such as massive leakage in the basement and water incursions from the ancient cracked concrete driveway that slants in toward the foundation. They told me that wasn’t their focus, but they did redo the kitchen and it now has lovely granite countertops. The driveway and foundation work would have cost another $150K, and the owners were not up to it, so a cosmetic cover-up of the basement is all for now.

The house is not too bad a space inside, but has no backyard to speak of, and some nosy neighbours too close to the property line, so no way to enjoy the limited outdoor space with privacy. Two cash money stores have sprung up 200 metres down the road, and weekend nights the street is alive with wannabe gangsters noisily making their way up to Oakwood and Vaughan road area illegal nightclubs. No fewer than five new condo projects are on slate for the area just south on St Clair west, where boarded up stores are now over 10% of the total.

The young couple will find all this out in good time. This will not end well.

#50 Smoking Man on 05.26.13 at 8:48 pm

#44 Daisy Mae on 05.26.13 at 8:04 pm43 comments ↓#1Tom Vu on 05.26.13 at 4:33 pm1+1-2 + 1/2 +1/2 +/- Smoking Mans IQ********************

Why, oh why, do we have to start off with idiot posts such as this, 

…….

Daisy I thought it was funny…….

Everyone here hates banks, Realtors and MSN.
Yet I never hear anyone chirping land lords.

Interesting,

70 precent of us home owners hate land lords, that’s why we bought in the first place.

#51 timmy on 05.26.13 at 8:49 pm

The guy’s brother is clueless. Who would be stupid enough to pay even $300K for a one bedroom condo? It is cheaper to rent it at that price.

#52 Rates2013 on 05.26.13 at 8:49 pm

#46… There’s no way those offers exist @ 2.65%… Nonsense

#53 Smoking Man on 05.26.13 at 8:58 pm

#47 MortgageBrokerinToronto on 05.26.13 at 8:35 pm

Major changes happening with lenders right now on how they calculate payments on credit limits available. They are now using 3% of the limit available as a payment in the liability section of applications causing a major increase to TDS ratios. This will have a huge effect on the market. Throw in maximum 25 years amortization regardless of ltv and you’ve got a lot of declined applications for mortgages on the way resulting in lower home prices GUARANTEED. Right now is the absolute worst time to buy a property. Values will be falling steadily for years to come.

………

A More appropriate name for you would be broken record..

We have had a year of daily gloom and doom, still haven’t put inventory on the market, sfh.

Msm and F and C have done a good job capping demand, buy with no inventory, prices will go up, sorry man..

#54 Aussie Roy on 05.26.13 at 8:59 pm

Aussie Update

Recent presentation to the 66th Annual CFA Conference in Singapore in which Grant Williams discusses the disconnect between financial markets and mathematical reality.

Grant Williams (of Things That Make You Go Hhhmm infamy) provides a must-watch presentation. Starting from the premise (unusual in this day and age) that the laws of mathematics are inviolable (“if it makes no sense, it is nonsense”), the Aussie investment manager sets out his own set of philosophical ‘problems’ that the world of ‘markets’ seems incapable of grasping. In a chart-filled extravaganza, Williams ranges from “Problem 1: If the global economy is stalling, Europe is in recession, China is slowing and growth is seemingly impossible to generate, what are equity markets doing at all-time highs?”

http://www.youtube.com/watch?feature=player_embedded&v=Osq1yxSFVG0

#55 Ford Prefect on 05.26.13 at 9:03 pm

#25: Dr. Hoof-Hearted: I was about to make the exact same comment – my wife and I learned the hard way about 14 years ago that the first offer is usually the best offer. Got a great offer, turned it down on advice of real estate agent and ended up ultimately selling for much less.

It was a different and very experienced real estate agent that passed on this nugget to us, too late of course.

#56 Victor V on 05.26.13 at 9:04 pm

PRICE DROP #3 – 87 Summerhill Avenue

http://themashcanada.blogspot.ca/2013/05/price-drop-3-87-summerhill-avenue.html

This 3 bedroom, 4 bathroom house has been listed since October.

The asking price was $1,995,000.

Sure, it is fully done and it is a good reno. But…..

These owners know they live in a row house, have a tiny backyard, and they don’t have parking, right?

I thought perhaps the listing price was a typo (though I knew it wasn’t) and it was supposed to actually be priced at $1,199,500.

But then the price was dropped at the end of January to $1,949,000 so it clearly wasn’t a typo.

It didn’t sell and the price was dropped again in April….to $1,874,000.

It still hasn’t sold and there has been another price drop.

The new price is…

$1,775,000.

This is going to take a while….

#57 Koshy Alex on 05.26.13 at 9:08 pm

#46 Tony B on 05.26.13 at 8:28 pm
I just received emails from two mortgage brokers last Friday with 5-year fixed mortgages at 2.65%. They stated that the banks emailed them with new lower rate promotions.

Tony could you please provide the names of the companies that is offering these rates, thanks

We have saved up the 20% down, has good credit and meets TDSR requirements, debt is zero, combined together we make more than 100k, I know very well that the market will start sliding soon, but still want to look at what is available now, can’t afford Toronto, looking to the east, will only buy if we get something inside our budget, if I get the preapproval at 2.79, will let you guys know,

#58 Victor V on 05.26.13 at 9:20 pm

http://themashcanada.blogspot.ca/2013/05/and-it-went-for_8819.html

This 5 bedroom, 4 bathrooom house on a 30 x 110 foot lot at 60 Jackman Avenue in Playter Estates was first listed in mid-March.

The asking price was $1,699,000.

Considering that the completely renovated house at 5 Butternut Street just sold for $1,975,000 after being listed at $1,899,000, and this house would need a lot more than $250,000 to getting up to par with that house…

I thought this house was 20% overpriced and that it would sell closer to $1,360,000.

After dropping the price to $1,399,900 on Tuesday, it sold on Wednesday….

For $1,385,000…

18.5% under the first asking price.

#59 Turtle on 05.26.13 at 9:27 pm

RE: #44 Daisy Mae on 05.26.13 at 8:04 pm

” #1Tom Vu on 05.26.13 at 4:33 pm
1+1-2 + 1/2 +1/2 +/- Smoking Mans IQ

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

Why, oh why, do we have to start off with idiot posts such as this, when Garth is explaining the serious situation we’re in? Very Exasperating…

We know we have alot to learn…and we’re trying to learn it! Geez!”

Couple things.

1. Treat all those funny boys as a pre-game show with talking heads… just turn the volume down (I mean ignore them 100%) and go make a sandwich or something… or grab a beer.

2. Maybe Garth keeps those funny boys around to bring some value to his blog, to teach you and me a lesson – “learn how to identify an idiot and ignore him completely”. Looks like he does it, so should we… But if I was Garth I would block those funny boys off the blog.

#60 Retired WI Boomer on 05.26.13 at 9:28 pm

Who would buy bonds with a 10 yr yield of 2%?
Doesn’t cover inflation, let alone “rent” on my money.

There are plenty of equities offering 3% or better yields plus possible price appreciation, plus there are numerous alternatives to bonds.

I don’t trust my government to do the right thing most of the time, and that goes for yours as well.

Of course, they can always change, but I’ll wait to see some proof of reform before “buying” any of their debt.

#61 mike on 05.26.13 at 9:45 pm

check out 440 martin grove in toronto
before:
http://www.homefinder.ca/listings/392592-440-martin-grove-rd-toronto-ontario-pt62100417

after:
http://comfree.com/home-for-sale-etobicoke-ontario-425829

looks like he’s going to get 850K for it.

he shouldn’t have held this long, but he never listens to me. he’ll bank about 140K when it’s over with

#62 Nosty the Booban on 05.26.13 at 9:47 pm

-
#34 Julie — “Yup….you guessed it…..GOVT WORKERS and their gold plated pensions.” — Meh, you mebbe onto sumthing there. Like Napoleon, Hitler, Idi Amin etc., all leaders run their course, and the longer Harper stays in power the more he will shoot himself in the foot, through his control freak and arrogant ways.

As far as Ford (Toronto), why doesn’t he slap a multi-million dollar lawsuit on the gasbagrag Toronto Star, and say put up or pay up? Then the country would know first-hand whether the video exists or not.

SMan – Check the taste and favor of the booze!

BTW, the cage in the pic looks more than big enough to hold the entire IQ of the CPC and lobbyists, with a little room left over.

#63 Toon Town Boomer on 05.26.13 at 9:50 pm

Oh Canada – Our bought and sold out land.

http://www.youtube.com/watch?v=UbACCGf6q-c

Hope you don’t believe that stuff. — Garth

#64 Sideline Sitter on 05.26.13 at 9:54 pm

@60 – Mike

I think you’re advertising for your friend…

$850k for a main street? yikes. Also, “carrera marble” (actually, any marble) for a bathroom is a HUGE mistake – marble is very porous. The poor buyer will have to replace it all in less than 10 years.

Also, the heat from the fridge will spoil whatever wine is stored in the “wine rack”.

The pool is nice though.

Just my $0.02. GL with the sale.

#65 Smoking Man on 05.26.13 at 9:56 pm

#61 mike on 05.26.13 at 9:45 pm

Love it…

#66 AK on 05.26.13 at 10:01 pm

#44 Daisy Mae on 05.26.13 at 8:04 pm
43 comments ↓
#1Tom Vu on 05.26.13 at 4:33 pm
1+1-2 + 1/2 +1/2 +/- Smoking Mans IQ

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

“Why, oh why, do we have to start off with idiot posts such as this, when Garth is explaining the serious situation we’re in? Very Exasperating…

We know we have alot to learn…and we’re trying to learn it! Geez!”
——————————————————————–
Just an Idiotic Moron who has nothing better to do with it’s time.
I have learned to ignore this tool.

#67 Smoking Man on 05.26.13 at 10:07 pm

Anyone can cherry pick listing, depending on, if your a high society owner or a low life, under class scum bag renter.

That’s how people think.. That’s why they buy…. Especially woman.. Forcing the man..

Real estate a long way from correcting in gta.

You rent, 70 present call you a loser,
You buy, what’s in your drive way, then judgement… Ah you made it… Success. Get your ass kissed.

People…. Went golfing yesterday at my old country club..

After faking poverty so my kids would get off there asses, my old buddies shunned me. I’m poor now

A ha love it……. Track6ets with inheritance…

I Am a diabolical genius…

You can’t beat that motivation.

#68 mike on 05.26.13 at 10:13 pm

@60

nope not at all. whatever i think is right.. he does the opposite and gets lucky all the damn time.
i own a few properties in hamilton.

i thought he was going to lose his shirt on this one but apparently not

#69 45north on 05.26.13 at 10:16 pm

It is more important than ever that your clients are “future proofed” with their mortgage…..a customized strategy to prepare them for the eventual rate increase they will inevitably face.

more confirmation that rates will rise and prices will fall

D.D. Corkum The long-term Cdn gov. bond has been demonstrating “higher highs” and “higher lows”. If this pattern fully repeats with a breakout above 2.65%, that will be very strong evidence of a long-term upward trend

high quality post Corkum

BWilson: The Coal Harbour condo market in Vancouver is tettering on the edge of a cliff and won’t take much at all to go over.

great post BWilson

TheMechanic: A local young couple just bought our South Okanagan home. We had been trying to sell for a couple of years and finally realized that we had to accept that price declines were here to stay.

the Devil’s Advocate knows what is going on and doesn’t post anymore.

HogtownIndebted: The house we once rented in Toronto (Winona area) was sold recently.

great post Hogtown You lived there and know what you’re talking about. $985,000! That is a lot of money. As you say the young couple will find out the problems. The basement problem is not going away. Worse changes in the neighbourhood are so beyond their control.

jwk: While back I noted a semi in our hood

where in Winnipeg?

beer store: I’m taking back my empties to the beer store (in Ottawa, Bank Street south of Walkley) – I’m down to 4 bottles of Beck “sans alcool”. Outside there is a crew with yellow gloves. I make eye contact. The man asks me if I want to donate my empties to leukemia research. I say “sure – I’m glad that I don’t have leukemia”. He says “you sure are”.

#70 Joe on 05.26.13 at 10:19 pm

Hope somebody can educate me here, trying to figure out what is a good rent/own ratio. Here in Regina things are a little different. Prices have gone way up, but are still below Canadian average, and rental vacancy rates are less than 1%. The average home in the city was 319K, and to rent a comparable place would be at least 2K/month. Nice 1000sqft apartments or decent basements suites in older homes can be rent in the 1300 – 1500 range. On the other hand sales are down yoy 25% for April. Any thoughts regarding rent vs own here? Any input appreciated.

#71 Inglorious Investor on 05.26.13 at 10:23 pm

Sellers are in a state of emotion that sounds like a river in Egypt.

I know someone who’s home has been on the market for a few more than several months. The owners ‘staged’ it themselves by buying a bunch of new furniture and decorative items. Over thirty showings. Only one “reasonable” but not great offer that fell through.

I suggested (perhaps with a bit too much blunt) that maybe their asking price was too high. If a house is perfectly sellable (and this one is), and if you are getting traffic but hardly any offers, a too high asking price seems like a very real possibility.

No, he said. Their asking price is fair. It must be the agent who is not attracting enough attention. Another problem, he explained, is that there are quite a few homes for sale in his neighbourhood. Oh, and there’s also quite a bit of new construction in the vicinity as well. Maybe the government should put a stop on new construction.

See what I mean? The Nile.

People need to realize that they do not have the privilege of setting the market value of their home. They can ask whatever price they like, but the selling price will be determined by the market. If supply has increased, all other things being equal, the price will fall. Whether you like it or not. And no matter what the market price of your home may have been last year, or last week.

So what’s your house worth?

#72 Sydneysider on 05.26.13 at 10:29 pm

With all due respect to Aussie Roy, the Australian madness is not over yet. This little cottage, 30 min drive from downtown Sydney, sold for AU$2M this weekend:

http://www.domain.com.au/Property/?adid=2010430254

#73 www.fvreb.bc.ca/statistics is quaking in their boots! on 05.26.13 at 10:38 pm

concerning #11 tito on 05.26.13 at 5:03 pm

Garth, you’ve got someone worried, LOL, when I clicked on your hyperlink this is the answer I got:

This page can’t be displayed

•Make sure the web address http://http is correct.
•Look for the page with your search engine.
•Refresh the page in a few minutes.

#74 Inglorious Investor on 05.26.13 at 10:45 pm

#34 Julie on 05.26.13 at 7:27 pm

In the Seventies the forecast was for a new Ice Age. You know: glaciers a mile deep in Downsview. Then, a generation later it was proclaimed that we were all doomed to a dry, scorching future. But when they were proven wrong once again, they finally gave up and decreed, with the usual fear mongering, that we would now suffer the dreaded Climate Change. That’s like saying, in the future water will be wet. Someone should remind them that the earth’s climate is always changing and that it can, and will, swing between extremes with or without carbon-spewing Homo Sapiens. In other words, they should chill.

#75 Kurt on 05.26.13 at 11:05 pm

“Anyway he has had very few bites, even at what is a reasonable price.”

Ahahahah! AAaahahahah!

There is no such thing as real estate that won’t move, only real estate that is incorrectly priced!

The vendor will get exactly what he deserves!

#76 V4Vendetta on 05.26.13 at 11:19 pm

I am all for correction in RE pricing in GTA and rest of Canada, but have to say that we are all under-estimating the power of invisible hand to be able to print paper/fiat money and keep interest rates low for next 25 years. We have reached a point where the only remedy for a drug addict is by providing more drugs and keep the morons sedated.

#77 GenXer on 05.26.13 at 11:27 pm

Garth,

No evidence of a slow down at upper unionville in Markham. The entire city was practically shut down over the weekend as people clambered to put down a certified cheque on a $800,000 chipboard home. I was floored at the number of people who showed up, cheque in hand.

Honestly, where is all this money coming from? How much offshore money is flowing into Canadian real estate? Is no one monitoring the flow of cash into the housing market?

#78 Carpe Diem on 05.26.13 at 11:31 pm

#1 Tom Vu …

Most people knows IQ can’t get under 70 unless you are “retarded”. I assuming you are the low end of the average range of +70 since you can write but can’t not contribute anything useful.

I’d probably consider SM’s IQ closer to mine, that being above average, but booze screwing it up at night.

#79 Piccaso on 05.26.13 at 11:32 pm

LMAO

Paying 1.5M for 80 year old gutted reno’s in TO on a 30×110 lots

#80 betamax on 05.27.13 at 12:04 am

Unretirement ahead for Canadians:

http://brighterlife.ca/2013/02/20/unretirement-ahead-for-more-than-half-of-canadians/?wt.mc_id=en-ca:digital_adv:paid:Outbrain:BrighterLife:SEP:RETIREMENT:Unretirement-ahead-for-more-than-half-of

#81 not 1st on 05.27.13 at 12:10 am

I worry about rates going up as much as I worry about derivatives, or Greece or QE or sovereign debt levels or dollar debasement. So like not at all.

#82 AACI Home-Dog on 05.27.13 at 12:46 am

Hmmm….does that make this a good time to look at adding some bonds to a portfolio ?

Very good post Garth; thanks !

#83 tron on 05.27.13 at 12:46 am

I was watching a PBS documentary on the 29 crash. One economist said in hindsight smart people were too stupid to see the crash coming despite all indication it was inevitable. Also mentioned was the public was told everything was fine and stocks will continue to rise. Sounds awfully familiar.

#84 Tom Vu on 05.27.13 at 12:54 am

DELETED

#85 Stomper on 05.27.13 at 12:58 am

bubblicide by stealth – GOLD!

#86 Tom Vu on 05.27.13 at 1:12 am

DELETED

#87 lpt on 05.27.13 at 1:34 am

Garth,
In India, if the value of the house drops, then the banks can ask for an additional downpayment from the borrower to maintain the equity/debt ratio (Loan to value ratio).
Will Canadian banks do the same ?

#88 Tom Vu on 05.27.13 at 1:38 am

Ok jealous blog poseurs..I won gOLD…by beink fuurszzt
(need more space in cabinet)

Silver is my next aim! .

1+2 – 3 X10 + 1002 .1 -999.1 -2

#89 JL on 05.27.13 at 2:34 am

thank you as usual for putting me in an excellent mood and how about Kelowna review time? pretty please :P

#90 Literate on 05.27.13 at 3:38 am

Well, I think it’s time for landlords to raise their rent. Rent should cover all expenses as well as give a profit, or there is no reason to be a land lord. So rent controls should be abolished.

#91 juno on 05.27.13 at 5:07 am

No vince’s Bro will probably get depress watching housing drop 1000, 2000 , 3000 monthly. (Like slow chinese water torture). Then he will get depress, take it off the market. Just to see the drop pick up steam. Then “PANIC!!!”

Then sell at any price or keep it and go bankrupt.

Garth: what happens when you put 5% down on an 500,000 dollar house (25000). After fees 20,000.

Then the market starts it slow downward spiral losing 15%. Now you lost your down payment + of 20,000. Plus your now -55,000 in equity. (on paper). + Selling fees will probably set you down 70,000.

Will the banks start going after (reprocess) these houses, because now these owners are now really really risky

#92 Yellow Rox Rock~ on 05.27.13 at 5:44 am

The movie that was pasted in post #63 is actually pretty interesting, even though Garth poo-pood it. It’s worth a watch if you have the time.

#93 GenXer on 05.27.13 at 7:18 am

- #90 Literate on 05.27.13 at 3:38 am
Well, I think it’s time for landlords to raise their rent. Rent should cover all expenses as well as give a profit, or there is no reason to be a land lord. So rent controls should be abolished.

Rent controls only apply to buildings established before 1990, and can be circumvented by completing leasehold improvements between tenants. The fact that landlords don’t charge more is because they can’t. Home owners can amortize their monthly payments over long periods – renters actually have to have cash. Less cash in the system = lower rents. Hence the discrepancy between house prices and rents right now.

#94 fancy_pants on 05.27.13 at 7:38 am

That spread offer $320 vs ask $329 could come back to haunt the seller in a downside market. should have sold. He may never see an offer north of $300k again.

Back in early 80′s in Port Moody, BC my father was going to buy a townhouse for @$29k. The seller and him were off by about $500 and the deal never transpired. A year later the same units were going for over $100k. Ouch.

In this current RE market, it may be the sellers left with sleepless nights and remorse over what could have been.

#95 neo on 05.27.13 at 8:12 am

#5Van guy on 05.26.13 at 4:44 pm
Hi Garth,

You’ve been saying for a while now that the bond market will affect long term rates. Just this spring when rates went as low as 2.79%. The bond market has almost went unchanged in the last few months, so why are banks raising the rates now?

See for yourself. — Garth

I looked and it looks like the same thing but worse happened July of 2012. But it still ended up right where it started.

#96 T.O. Bubble Boy on 05.27.13 at 8:20 am

@ #79 Piccaso on 05.26.13 at 11:32 pm
LMAO

Paying 1.5M for 80 year old gutted reno’s in TO on a 30×110 lots
____________________

Yep – that’s what “winning” a bidding war gets you these days.

Exhibit A) Reno’ed on 40×105
http://www.realtor.ca/propertyDetails.aspx?propertyId=13231095&PidKey=1236940689

Exhibit B) Tear-down on 50×100
http://www.realtor.ca/propertyDetails.aspx?propertyId=13130701&PidKey=-414137143

Exhibit C) 2 +1 bdrm on 40 x 113
http://www.realtor.ca/propertyDetails.aspx?propertyId=13218812&PidKey=1099343833

#97 Devore on 05.27.13 at 8:24 am

It’s almost like someone let the air out of the balloon, real suddenlike, like with a pin prick.

#98 David McDonald on 05.27.13 at 8:38 am

I found the following chart insightful:
http://vancouverpricedrop.wordpress.com/2013/02/08/drop-from-peak-chart-january-2013/

In the US it took 32 months from the top to see significant drops. In Canada the drops will probably be shallower and drag

#99 David McDonald on 05.27.13 at 8:54 am

Phat finger

I found the following chart insightful:
http://vancouverpricedrop.wordpress.com/2013/02/08/drop-from-peak-chart-january-2013/

In the US it took 32 months from the top to see significant drops. In Canada the drops will probably be shallower and drag on longer.
This is the way the world ends
This is the way the world ends
This is the way the world ends
Not with a bang but a whimper.

#100 Mississauga Mel on 05.27.13 at 8:55 am

“What’s concerning is the existence thousands of sellers who think just like Vince’s idiot brother – that they should get 2011 prices in 2013.”

Funny but a home sold on my street in Mississauga for about $100k above 2011 prices!

#101 GOTTHARDBAHN on 05.27.13 at 8:55 am

Hey Garth -

What are you talking about?

1) ‘Already construction starts have been scaled back sharply.’

Oh really? As I have mentioned on this pathetic blog numerous times, there is unbelievable condo construction activity going on aroung Yonge & Eligible in the Big Smoke. During a five-minute walk to the tube I can see NINE condos – three announced and six (!) under construction. Plus a handful of new projects being mooted, like a tower atop the Post Office building just north of Eglinton. No slowdown there, Ace.

2) ‘…because real estate always goes up.’

Actually, and you oughtta know, equities are the new real estate, because they always go up. How many record closes on the Dow this year? Or the S&P? Something like twenty apiece? And you think equities are good investments, too. Traders always talk their position, and evidently you’re no exception.

GTA starts are down 50 per cent. Look it up. I don’t buy stocks or recommend people hold individual equities. — Garth

#102 Incubus on 05.27.13 at 9:14 am

“We’re a nation of housing junkies”

It is true on both sides.

I know a couple in the mid twenties who are back in Montreal. They have both university degrees.

I told them to rent because price will go down. I even mentioned your blog.

You know what happened, they just bought a condominium.

I think people have to do their own experiences, they need to get burned in order to understand.

#103 Chickenlittle on 05.27.13 at 9:22 am

#61 mike on 05.26.13 at 9:45 pm
check out 440 martin grove in toronto

Ha! My husband and I looked at a place for sale right across the street from there. It was WAY more money because they bought some furniture and a kitchen from Ikea.

I remember the agent telling people that her house was a better deal than that one because it was renovated. She said the same thing to us not knowing that my husband does finishing carpentry. He is not one to mince words, either. He told her that he would rather have the other one (this one in the link) because then he could build a kitchen himself, etc.

She was not impressed. I was so proud of him!

So yes, there is something called the `Ikea Ratio` that exists. For every $5000 or so Ikea dollars you spend, you get at least an extra $100k when you sell your house. That is a VERY high rate of return. It`s like putting lipstick on a pig, really.

I should invest in Ikea.

#104 Chickenlittle on 05.27.13 at 9:24 am

Having made that comment about the house, we used to live around there and I miss it! It`s a nice neighbourhood!

#105 Seeker on 05.27.13 at 9:39 am

We’ve all turned into greedy little Brad Lambs convinced owning a house or condo bestows the right to windfall gains.
Well said Garth Turner. Please come to Calgary and say this in your next presentation

#106 Toronto_CA on 05.27.13 at 9:52 am

Great picture today Garth. Although I think it would have been more amusing to see a cage with a sign saying that the wife outgrew it and the man got a bigger cage to keep his wife in, because that would be forced down by the PC police!

I was in Burlington this weekend visiting the family on Lakeshore, where Italian looking McMasions have replaced all the old bungalows, squished together on tiny lots that look ridiculous. For sale signs EVERYWHERE, like every 3rd house between Guelph and Applebee Line.

#107 Canadian Watchdog on 05.27.13 at 10:06 am

Street Capital Financial Obtains CMHC Approvals To Securitize Mortgages

(RTTNews.com) – Counsel Corp.(CXS.TO) announced that its residential mortgage lending business, Street Capital Financial Corporation, has received approvals from the Canada Mortgage and Housing Corporation or CMHC to be an approved issuer of National Housing Act mortgage backed securities and an approved seller under the Canada Mortgage Bond program.

Street Capital, sources single-family residential mortgages solely through a network of independent, high quality mortgage brokers across Canada with whom it has built relationships. The company offers a broad lineup of high ratio and conventional mortgages, predominantly to prime borrowers.

Street Capital originated $1.6 billion of mortgages in the first quarter of 2013 and increased its portfolio of mortgages under administration to $13.3 billion at March 31, 2013 compared to $8.3 billion a year earlier. Street Capital was founded by its current senior management team, all of whom have deep experience in the mortgage and consumer lending industry and previously occupied senior management positions at large Canadian financial institutions.

—-

Time to dump those AAA subprimes on global investors.

#108 Devore on 05.27.13 at 10:12 am

#71 Inglorious Investor

So what’s your house worth?

It doesn’t matter unless you have to sell. Or at least it didn’t, until the house also became an ATM, an investment, and a pension plan. Now, of course, nearly every casual conversation turns to real estate and either blabbing about how much you’re “making”, or complaining about the sale down the street (‘oh, they GAVE it away!’).

#109 Morgan on 05.27.13 at 10:15 am

My credit union 4 year at 2.99% and 5 year at 3.09%. Not a big player in the market, but it shows that lenders are still trying to pull in buyers with low rates.
https://www.alterna.ca/AlternaSavings/Rates/
Also, as a warning to anyone on ratehub and other brokers, some of those have low rates but terrible penalties if you break or try to transfer the mortgage, or fees and other traps. Look carefully at the terms and conditions.
#70 Joe – the best way to work it out is first make sure you will be there for a while. If you are only planning for the next 5 years or less, the transaction costs of buying and selling will be outrageous. If you can picture yourself in that home for 10 years or more (i.e. your work is stable, the number of kids is fixed, etc), then compare all the costs, including taxes, utilities, maintenance and transaction fees on similar properties. Done correctly, real estate will actually cost you less to own in the long run, and that’s when you know it’s a good purchase. Anything else is speculation.

#110 Devore on 05.27.13 at 10:19 am

#90 Literate

Well, I think it’s time for landlords to raise their rent. Rent should cover all expenses as well as give a profit, or there is no reason to be a land lord. So rent controls should be abolished.

You can already set whatever rent you like, no rent controls. What does the current price of real estate have to do with your expenses? Not making enough money? Sell it.

#111 Smoking Man on 05.27.13 at 10:29 am

Basement dwellers an bubble heads.. Have some very bad news for you…

New Bank of Canada Governor worked for export development Canada, he knows the pain our exporters suffer from. It’s called a high Canadian dollar.

His latest comment was we need to nurture this choppy economic recovery.

Rates going down dogs just like I called it last year.

Every bank economist, every swap trader, every fx trader, even the great garth last year and where betting on higher rates….

Not I, Never bet against The Smoking Man.

And as far as the bond market yeilds.. It’s drawing in batman’s second ear. You Wana buy bonds do it now.

#112 John Prine on 05.27.13 at 10:31 am

#75 Kurt on 05.26.13 at 11:05 pm
“Anyway he has had very few bites, even at what is a reasonable price.”
**********************************************

Interesting, I keep hearing this about properties that aren’t selling “I don’t understand, it’s priced right” Vendors, at least here on Vancouver Island and the South Okanagan just can’t seem to understand that if it has been listed for 200 days and NOBODY is interested that it is NOT priced right. A lot of homes I see have been listed every spring for 3 years with just small reductions. What a way to live your life, c’mon people price it to sell and get on with your lives. It isn’t going to go back up……….

#113 dosouth on 05.27.13 at 10:32 am

Repugnant, disreputable realtors…..welcome to Vancouver, and the lady still wanted to buy the condo, go figure?!?!

http://tinyurl.com/p6nxv38

#114 Dr. Hoof - Hearted on 05.27.13 at 10:52 am

#83 tron on 05.27.13 at 12:46 am

I was watching a PBS documentary on the 29 crash. One economist said in hindsight smart people were too stupid to see the crash coming despite all indication it was inevitable. Also mentioned was the public was told everything was fine and stocks will continue to rise. Sounds awfully familiar.

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

I was watching a documentary , and in one segment it showed the money supply. when tied to gold was an almost horizontal line till about the 1970′s

Since then its been on a vertical ascent. In the 2008 -2011 range it shot up almost vertically.

In i929 or now…when you flood the market with cheap money, leads to speculation , inflation, and a collapse is due once the restrictions are applied.

#115 Ralph Cramdown on 05.27.13 at 11:15 am

#90 Literate — “Well, I think it’s time for landlords to raise their rent. Rent should cover all expenses as well as give a profit, or there is no reason to be a land lord. So rent controls should be abolished.”

I think you’re putting the cart before the horse. My landlord has no problem making a decent profit (I presume), because my landlord bought years ago and didn’t overpay.

Doing a business calculation, you can either work forward from product cost through overhead and expected margin to get price — AND THEN ASK WHETHER YOU CAN GET CUSTOMERS TO PAY THAT PRICE — or you can work backward from market price (i.e. rents in this case) through margin and overhead to come up with a maximum cost for the property. But your suggestion that landlords should be entitled to a profit no matter what stupid price they paid for the property is insane. If property prices are too high in relation to rents, the rational landlord SELLS THE PROPERTY.

The stupid landlord keeps shovelling cash into the property, knowing that since his rents rise about with inflation while his mortgage interest costs shrink every month, he’ll eventually hit break even, if the Good Lord’s willing and the creek don’t rise. But I’d rather rent from a smarter landlord, because he’s much less likely to go broke or throw in the towel.

#116 Dr. Hoof - Hearted on 05.27.13 at 11:33 am

There must be some sort of buyer interest deceleration…..some point that enough “critical mass” of buyers that wake up and see there are higher odds of price drop than prices stabilizing.

You make money by saving money by sitting it out on the sidelines.

#117 JOJO on 05.27.13 at 11:44 am

Let’s be clear about RE “Crash” in Port Credit area in Mississauga! Highest manipulation in RE MArket from 2010. Oh yes, Mac Dadi.

Prices since 2010 have went up between 60% to ++100%.

http://www.realtor.ca/propertyDetails.aspx?propertyId=13187167&PidKey=65833811
in 2009/2010 prices were 320K for those aptms.

http://www.realtor.ca/propertyDetails.aspx?propertyId=13180339&PidKey=1096921733
This house was bought in 2012 for $530 (it’s “renovated” )

http://www.realtor.ca/propertyDetails.aspx?propertyId=13129508&PidKey=-956463632
In 2010 on the same street similar houses were 330k, just 10 feet from rail road.

This house was bought in 2009/2010 for 380K:
http://www.realtor.ca/propertyDetails.aspx?propertyId=13244471&PidKey=-350055595

#118 DM in C on 05.27.13 at 11:48 am

Interesting editorial from out of left field at the Calgary Herald today.

I couldn’t make out what prompted it — are they on the side of developers who want more land opened up, are they on the side of home owners who want secondary suites approved, or are they on the side of the renters who can’t afford to buy, but are doing so anyway, with the help from the City.

http://www.calgaryherald.com/opinion/editorials/Editorial+Good+intentions+housing+aren+enough/8438698/story.html

#119 bigtown on 05.27.13 at 11:56 am

When my family left Nanaimo, B.C. back in 1999 the floor fell out of the market a good ten months before we listed out BRAND NEW LAKE VIEW FOUR LEVEL WEST COAST BEAUTY in the Long Lake hood called Rutherford and we were forced by our neighbours to lower the price 35% below the previous year’s price. When every third house in the neighbourhood starts lowering the price to get out you either get onboard or you don’t sell. At that point only being “ruthless” will address the utmost truth of selling your home…which is the PRICE.

#120 News on 05.27.13 at 11:57 am

“Almost half of Canadians are keen to buy property, despite cooling market” … “The BMO Housing Confidence Report says the 48% figure is mostly unchanged from late 2012, suggesting continued confidence in the housing market.”

http://business.financialpost.com/2013/05/22/almost-half-of-canadians-are-keen-to-buy-property-despite-cooling-market/?__lsa=3bab-3aa5

#121 Pr on 05.27.13 at 11:59 am

With low interest rates, people are not asked to save. If governments want us to save, they must raise interest rates. The economic recovery will be done with the money saved, not the debt. This stubbornness of the governments to keep it low for so long could also lead us to a period of multiple decades without economic growth.

#122 Post Haste on 05.27.13 at 12:22 pm

Not only am I bewildered how the housing market has been able to keep afloat all these years with sky high prices – but also those who write, bitter that family or co-workers make them out to be idiots because they rent.

News flash – why does anyone tolerate those who belittle them – if co-workers are mocking you, tell them to F&*^K off – and if family is giving you the gears, tell them to mind their own business. Renting or buying is a personal choice – if someone can’t respect that – they were idiots to start with!!

I own, and in the office it rarely ever comes up who owns or rents. I know of one guy who rents and complains because his basement apartment is moldy and mice run around – he brings in good coin, so I tell him either to pay abit more for better digs or buy a place if you’re so unhappy – life moves by too fast to be worried about the small stuff.

Did anyone see Dave Chilton on tv a few nights back – he pretty much said in the lines of Garth, he did question the RRSP issue that when you retire, what is the tax rate at the time – with millions retiring and using RRSP as their lifeline – very unlikely the government will make those cashing out pay dearly in taxes – votes will get you into office – and out as easily.

#123 KLM on 05.27.13 at 12:47 pm

Hi Garth, Great Article.. How are the foreign buyers affecting the Mkt. price and how long would this effect sustain? Appreciate your thoughts.

#124 Mr. Monday Night on 05.27.13 at 1:00 pm

As mentioned ad nauseum on this blog, lower prices are going to take awhile as folks aren’t used to not having bidding wars for their places.

I have a buddy who had a conditional offer in on a townhouse in Ottawa ($600K range). When the inspection turned up a collapsing chimney, the sellers were asked to fix it prior to the sale taking place and they refused, preferring to pass the cost along to prospective buyers. Unbelievable.

I feel that people who have to relocate should rent out of principle for a few years until the sellers are made to understand that market conditions no longer favour them and their unrealistic expecations.

#125 Calgary Rip Off on 05.27.13 at 1:02 pm

#118 DM C:

This article is non commital. I am very happy that there are people due to this plan that are able to get a home. Before 2006 many people who earn a decent income could get a place but that has all changed. Even if you make $100K or more in Calgary it is difficult to pay for everything if you have a family. The reality is that people who have lived here before 2006 only have a surface level appreciation of what the housing situation is like, such as the farmers who own tons of land on the outskirts of the city forcing housing to be cramped. The bad part is that much of this “farmland” is just wide open wasted space that hardly anything is being done with. And Nose Hill park, that’s a joke, it is a fire hazard and a waste of space, it should have houses on it. I hear it all the time when the old people at work go on and on about how they dont make enough money, how they need to go on a vacation and how their mortgage is almost paid-again no concept of the reality of present housing costs in Calgary, and this is why papers such as the Calgary “Herald” are such b.s. because the dumbfu’s writing the article are all old.

This blog is inaccurate. Housing still is expensive and holding expensive since 2007, not much has changed. If you can find a place, qualify for the mortgage and have enough leeway so that you can renew should interest rates skyrocket, you should get the place unless you are retiring soon and will be moving anyway. In that case dont do anything, rent, until you can get out of this overpriced city. Otherwise, if you are going to be here say another 30 years, get a place, because by the time 30 years has gone by housing likely will have gone up, if not just a little bit. Doesnt make sense to subsidize the landlords who bought houses in Calgary when they were $80K and are now renting those places out for $1500/month when the mortgage is paid. Why subsidize these people?

#119 Nanaimo: Pretty there in terms of scenery but depressed economy run by a biker gang. Dangerous. To be avoided.

#126 Dr. Hoof - Hearted on 05.27.13 at 1:16 pm

#121 Pr on 05.27.13 at 11:59 am

With low interest rates, people are not asked to save.

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

That was the first warning sign, at least for me, that something was not right.

I grew up in an era where saving was rewarded with reasonable interest rates. Many seniors had based their retirement on a reasonable return .

When the banks paid next to zero interest, this forced people into other markets aka gamble.

#127 GS on 05.27.13 at 1:19 pm

The most telling part of this email Garth: the emotion inherent in the seller’s reaction. He was “furious”, and “told them to piss off”.

Real estate is an asset, and the buyer is trying to ascertain the market price for that asset through negotiation. Simple but far too many people don’t understand.

#128 Ralph Cramdown on 05.27.13 at 1:31 pm

#121 Pr — “With low interest rates, people are not asked to save. If governments want us to save, they must raise interest rates.”

Tune in a few years from now, when Pr will update us. I predict the quote will be something like “With high interest rates, people can’t afford to save. If governments want us to save, they must lower interest rates.”

#129 Inglorious Investor on 05.27.13 at 1:39 pm

#108 Devore on 05.27.13 at 10:12 am

“Now, of course, nearly every casual conversation turns to real estate and either blabbing about how much you’re ‘making’ […]”

Yeah, rising home prices engender a false wealth effect.

Wealth is relative. So if everyone’s home is rising in price no one is really better off––unless you arbitrage the value of your home somehow by, for example, selling it and then renting or moving to some other part of the world where real estate values are much lower. But if you sell and rent with the intention of buying another home later, your timing has to be right (good luck). I know someone who tried just that tactic back in 2007. Was that a good ‘move?’ Not thus far. IMO a family should not treat their home like a marketable security, but to each his own.

Actually, as home prices rise, we get poorer because property taxes can go up. And furthermore, it drives more people deeper into debt because they can get a bigger HELOC. Yeah, more debt. This is why the banks love rising prices. Inflation is a bank’s best friend. And what about the kids today who will want to buy a home tomorrow? Are inflated prices good for them?

#130 Devore on 05.27.13 at 2:26 pm

#129 Inglorious Investor

Actually, as home prices rise, we get poorer because property taxes can go up.

Higher house prices make it easier to raise property taxes, but they won’t go up just because prices do.

We get poorer as house prices rise because we primarily sell houses to each other. If you sell and re-buy, you are no further ahead, even if prices double in a year. Meanwhile, housing is a necessity, and no one would argue for the price of a necessity to rise endlessly with no connection to the real economy and incomes.

Rising house prices would make sense if rents were rising as well, but this is not the case. Trading a high priced commodity amongst each other is just a zero sum game. The kind of speculation encouraged in real estate by the high leverage and government policies and subsidies is a net negative on society and economy.

#131 AK on 05.27.13 at 2:32 pm

#128 Ralph Cramdown on 05.27.13 at 1:31 pm
“Tune in a few years from now, when Pr will update us. I predict the quote will be something like “With high interest rates, people can’t afford to save. If governments want us to save, they must lower interest rates.”
——————————————————————–
You might be correct, but I do not see that happening anytime in the distant future.

#132 Old Man on 05.27.13 at 2:42 pm

I wish someone could explain to me why there is an upheaval at City Hall in Toronto, as have no clue about this all; like must be stupid, as know nothing. So let us all get back to the Real Estate scenerio with this blog, as nothing is happening in Toronto.

#133 Smoking Man on 05.27.13 at 2:48 pm

#129 Inglorious Investor on 05.27.13 at 1:39 pm

When my dad bought his house that had enough parking for 8 cars dover court and collage, he paid a whopping 15k for it… Over paid at the time.
The

Wages will go up, house prices and wages don’t always go up in unison..

About 200 gazillionairs run the whole show, if they want to keep heads attached to neck, and enjoy life for them and offspring, wages will go up. Or there heads will get chopped off, as history shows.

With fiat, money out of thin air, the model breaks down with no growth, or inflation cause principle can never be paid back in full.

#134 Old Man on 05.27.13 at 2:56 pm

I told Mr. Turner that the thunder storm would hit on Monday, but he took it out, so now the Mayor’s press secretary and deputy have gone, so the Old Man is not an idiot after all. I just sit back and laugh about this all.

#135 Tom Vu on 05.27.13 at 3:01 pm

#132 Old Man on 05.27.13 at 2:42 pm

I wish someone could explain to me why there is an upheaval at City Hall in Toronto, as have no clue about this all;

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

Not sure:

I heard that Rob Ford has grabbed Pamela Wallen , climbed the outside of CN Tower, and thumping his chest and grunting threats .

#136 World Traveller on 05.27.13 at 3:13 pm

Makes me so proud to be a former Torontonian.

http://www.thestar.com/news/crime/2013/05/27/trial_opens_for_police_officer_charged_in_alleged_g20_assault.html

Toronto and Canada, you can just go to hell.

#137 Canadian Watchdog on 05.27.13 at 3:39 pm

If you want to know how to spot a GTA subprime, just take a drive around any completed 905 subdivision and count how many front yards have grass 12-20 tall.

That’s what happens when you put renters in $500-600K homes.

#138 TEMPLE on 05.27.13 at 3:58 pm

#34 Julie on 05.26.13 at 7:27 pm

Yup….you guessed it…..GOVT WORKERS and their gold plated pensions. Remember that the next time you come down on the lolely MP or MLA. How about the 3000 minions under them that make 150 to 350K a year for pushing around paper and getting nothing done….

Enjoy the day in RAINcouver at 9 degrees Celcius at the beginning of JUNE with Global Warming…..right Bill Good of NW news?

Please stop. You are embarrassing yourself.

#74 Inglorious Investor on 05.26.13 at 10:45 pm

Someone should remind them that the earth’s climate is always changing and that it can, and will, swing between extremes with or without carbon-spewing Homo Sapiens. In other words, they should chill.

You too. Try getting some information from actual climate change science, not neocon propaganda.

TEMPLE

#139 Old Man on 05.27.13 at 4:03 pm

I heard this rumour that the Ford Nation at City Hall is in big trouble, so they approached the Smoking Man, as needed a new PR man to work for them, and will pay him well to make all go away, as they know he is the best; will he take to job?

#140 Jason on 05.27.13 at 4:12 pm

An Awesome post Garth. I have taken the time to share some of your wisdom with friends and family. If I keep it up I may not get any more dinner invites.

Thanks a ton for all of your hard work and blogging.

#141 Holy Crap Wheres The Tylenol on 05.27.13 at 4:31 pm

#133 Smoking Man on 05.27.13 at 2:48 pm
#129 Inglorious Investor on 05.27.13 at 1:39 pm
When my dad bought his house that had enough parking for 8 cars dover court and collage, he paid a whopping 15k for it… Over paid at the time.
The Wages will go up, house prices and wages don’t always go up in unison..
About 200 gazillionairs run the whole show, if they want to keep heads attached to neck, and enjoy life for them and offspring, wages will go up. Or there heads will get chopped off, as history shows.
With fiat, money out of thin air, the model breaks down with no growth, or inflation cause principle can never be paid back in full.

Always interesting read with Smoking Man, I had to go back to #129 Inglorious Investor to actually understand what you were saying. So do I buy a Fiat? Perhaps I should drink when I read your eloquent oratory.

#142 Mark on 05.27.13 at 4:32 pm

#95, neo:

“The bond market has almost went unchanged in the last few months, so why are banks raising the rates now?”

Each type of collateral (ie: residential mortgages) has a different set of rates applicable to it, based on investor preferences and the credit-worthiness of the asset class. Since house prices are now going down in nearly all Canadian cities, and since the CMHC is no longer expanding its guarantees to prop up the market — those spreads are expanding.

#143 Herb on 05.27.13 at 4:33 pm

#132 Old Man,

well, Old Man, the truth lies somewhere between your usual “as know all” and your new “as know nothing.”

Looks like staff parachuting from a flaming dirigible. Toronto survived Mel Lastman (“His Clownship”), and will survive the Fords too.

#144 Al on 05.27.13 at 4:39 pm

Sales for more than asking still alive and well at Bayview and Sheppard area as per;
http://www.torontomls.net/PublicWeb/CL_CF.asp?link_no=49044916.206100&t=l&fm=F

#145 Old Man on 05.27.13 at 4:57 pm

#135 Tom Vu – sorry as Rob Ford goes for the young babes south of Etobicoke down by the lakefront, as am confused about this all, as thought he was a married man in life, as he trolls the clubs and bars down that way. :)

#146 JUNO on 05.27.13 at 5:11 pm

Well with the debt load at around 170 now, how do you think Canadians will ever get out of debt. The are doubling down soon for every buck the government takes in, they will have to pay 2!

http://www.cbc.ca/news/business/story/2013/04/30/business-debt-levels.html

Its a downhill slide, we are beginning our free fall. Just waiting to hit the ground with a full “SPLAT!”

#147 Inglorious Investor on 05.27.13 at 5:13 pm

#130 Devore on 05.27.13 at 2:26 pm

Agreed.

#148 Victor V on 05.27.13 at 5:16 pm

5 Scarth Road – ROSEDALE

http://themashcanada.blogspot.ca/2013/05/5-scarth-road-rosedale.html

This house was listed for $2,495,000 in February 2013.

No sale so they dropped the price in April to $1,995,000.

Again, no sale so they dropped the price another time just last week to $1,895,000.

Now, 7 days later, the price has been increased by $600,000….

Back to $2,495,000.

Not going to happen.

#149 Humpty Dumpty on 05.27.13 at 5:33 pm

Money Junkies…

World Bank Insider Blows Whistle on Corruption, Federal Reserve

A former insider at the World Bank, ex-Senior Counsel Karen Hudes, says the global financial system is dominated by a small group of corrupt, power-hungry figures centered around the privately owned U.S. Federal Reserve. The network has seized control of the media to cover up its crimes, too, she explained. In an interview with The New American, Hudes said that when she tried to blow the whistle on multiple problems at the World Bank, she was fired for her efforts. Now, along with a network of fellow whistleblowers, Hudes is determined to expose and end the corruption. And she is confident of success.

While Hudes sounded upbeat, she recognizes that the world is facing serious danger right now — there are even plans in place to impose martial law in the United States, she said. The next steps will be critical for humanity. As such, Hudes argues, it is crucial that the people of the world find out about the lawlessness, corruption, and thievery that are going on at the highest levels — and put a stop to it once and for all. The consequences of inaction would be disastrous.

http://thenewamerican.com/economy/economics/item/15473-world-bank-insider-blows-whistle-on-corruption-federal-reserve

The Rolling Stones Monkey Man
http://www.youtube.com/watch?v=HNY8eYmzdH4

#150 cramar on 05.27.13 at 5:54 pm

So what can you buy in your town for under $400k? Here is my submission:
http://www.realtor.ca/propertyDetails.aspx?propertyId=12738647&PidKey=-2094360415

#151 Bungalo fever on 05.27.13 at 6:00 pm

Bungalo’s are the next big investment!!!!

“He is even thinking about the day when he might buy one [A bungalo] as an investment property himself.”

http://www.theglobeandmail.com/life/home-and-garden/real-estate/in-toronto-the-markets-sweet-spot-is-the-humble-bungalow/article12090080/?cmpid=rss1

#152 jess on 05.27.13 at 6:09 pm

US tax inspector targets Caribbean bank
IRS targets First Caribbean International Bank, formally co-owned by Barclays, in investigation into tax evasion suspects

http://www.guardian.co.uk/business/2013/may/27/us-tax-inspector-caribbean-bank

#153 happy renter on 05.27.13 at 6:10 pm

All central bankers around the world have lowered the interest rates.Its called currency wars.Japan,UK ,and the US will devalue their currency.Japan is doing a great job right now.China will anounce soon it has over 4000 tonnes of gold and that will cause a real wake up call.Max Keiser explains the charade the central bankers are causeing

#154 dienekes on 05.27.13 at 6:27 pm

To everyone that thinks Saskatoon and Regina is different.
Everyone in Saskatchewan was listening to Def Leppard 3 years after they were dead worldwide.
Everyone in Saskatchewan was wearing Mukluks 3 years after they were dead in Europe.
Same with housing, everyone in the province will think its cool to blow there life savings on a home when everywhere else they are tumbling in price. Everone will just view us as you would view a Def Leppard fan; Out of touch., and touched in the head.

#155 Inglorious Investor on 05.27.13 at 6:29 pm

#133 Smoking Man on 05.27.13 at 2:48 pm

Yup.

#156 maxx on 05.27.13 at 6:31 pm

#101 GOTTHARDBAHN on 05.27.13 at 8:55 am

Hey Garth -

What are you talking about?……..

GTA starts are down 50 per cent. Look it up. I don’t buy stocks or recommend people hold individual equities. — Garth

That’s what I’ve been hearing on the ground…..was speaking with an experienced construction project manager, and he says that most current condo construction results from contracts that were signed years ago.

#157 Dr. Hoof - Hearted on 05.27.13 at 7:01 pm

Realtor admits to altering condo sale documents

http://bc.ctvnews.ca/realtor-admits-to-altering-condo-sale-documents-1.1295741

Buying a home is one of the biggest purchases you’ll make, but what if your realtor has their best interests at heart instead of yours? A Vancouver woman claims her realtor faked contracts and altered prices all for the sake of a few thousand dollars in commission.

Janet MacKenzie really wanted to buy a condo in the Yaletown area, but the unit she wanted to purchase was listed with a reduced commission.

She wanted to make an offer but says her realtor, Marco Vincenzi from Sutton Group – West Coast Realty, told her the unit was already sold.

When the condo kept showing up on MLS listings, Vincenzi changed his story. He claimed the deal had fallen through and agreed to present MacKenzie’s offer. She waited and waited to see if it was accepted.

“There were a lot of the reasons for delays that I was being given by my realtor, the fact that these people were away, they were on the beach, they weren’t contacting their realtor regularly,” said MacKenzie.

Unbeknownst to MacKenzie, her realtor, Vincenzi, was trying to make a deal behind her back that would compensate him for the money he stood to lose on that reduced commission.

“The way that I found out what had happened was actually when the sellers’ realtor had contacted me because she had noticed some discrepancies on the documents with my signatures,” said MacKenzie.

etc etc.

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

When the going gets tough…. the realtors get desperate.

#158 Blacksheep on 05.27.13 at 7:13 pm

Smoking Man # 133,

“The Wages will go up, house prices and wages don’t always go up in unison..

About 200 gazillionairs run the whole show, if they want to keep heads attached to neck, and enjoy life for them and offspring, wages will go up. Or there heads will get chopped off, as history shows.”
——————————————————
Supply VS demand applies to all things. Lots of Cattle available to toil, (+ unions busted + technological changes + Automaton + immigration) leads to no pressure on the boss for raises. There’s also 3 billion people in other counties who want first world paying jobs, but will work for much less.

It’s not the late 17th century. Pitch forks or AR-15s won’t get it done.

An armed uprising would be met with a display of overwhelming technology, not be forgotten for generations. Instead the docile Cattle will muddle through, as the fences get built higher.

Control….Control of the economy = control of the media = control of perception = control of emotions. = Control of the Cattle = Control of the farms revenue.
—————————————————–
“With fiat, money out of thin air, the model breaks down with no growth, or inflation cause principle can never be paid back in full.”

Ya that’s a bitch all right, but no amount of rope pushing is going to solve this problem. Your Machine must be reset/cleansed to start over.

Debt Jubilee anyone?

#159 raider on 05.27.13 at 7:18 pm

Just saw this on BNN:
“*Short* Equitable Group (ETC TSX) .
We are looking for a 20 percent decline in residential real estate prices over the next two years. Equitable is a subprime mortgage issuer with close to 22-times leverage, meaning a small decline in mortgage values on their uninsured part of the book will make a large impact on ETC’s earnings and solvency. We believe there is a scenario where ETC equity goes to 0.”

Any opinions anyone. How insured are they?

Garth, is that one of those rare candidates, where one has a fighting chance to profit on the way down.

I never short, and neither should you. — Garth

#160 Old Man on 05.27.13 at 7:20 pm

#143 Herb – Mel Lastman was a clown, and sold his Cadillac to a friend of my called MP, as he was just a joke in life, as just sold my Ford to buy a better car in life, and it says BMW in the front.

#161 maxx on 05.27.13 at 7:49 pm

#116 Dr. Hoof – Hearted on 05.27.13 at 11:33 am

“There must be some sort of buyer interest deceleration…..some point that enough “critical mass” of buyers that wake up and see there are higher odds of price drop than prices stabilizing.

You make money by saving money by sitting it out on the sidelines.”

Over the past few weeks, we’ve been discussing a property with a RE agent. The longer we talk, the more the price drops- so far, we’re into a six-figure drop. Yes, that’s right. We never quite expected this. We’re playing it off of another , this one also inviting offers, lower by nearly the same amount. We’ll find the floor on these, and we may bring a third in our cross-hairs. Could we be seeing the first, solid stirrings of RE ennui?
I’m really feeling that this entire FIRE mess will definitely not result in a soft landing- some parts of the market seem to be off the cliff already. We’re really questioning how low this can go…..
Each of these properties’ agents made a point of calling on occasion to say that “other visits” were coming in, that there were “other interested buyers”, blah, blah…………… (yawn). If you don’t need to buy now, wait, you’ll save mightily.

Perhaps RE ennui is in the first, solid stages of entrenchment.

#162 thiscountryisgoing down the toilet on 05.27.13 at 8:11 pm

I hate it when I’m right…..being a decent stock picker is sooooooo much better than being an braindead ETF goon.

Another example…and I have give ya’ll many many…is MBT…..this has been a double bagger over two years while paying a fat dividend…….and up another 13% in the last two trading days…….try getting these kinds of returns buying the market index…….the fast and loud crowd just sped past….did you see us spitting up dust? Get your heads out of your butts and do some research on the many companies that are going to run past the indexes this year.

ETF investing means a lifetime of shovelling snow…..smart stock picking is sunshine winters in Texas and Thailand……oh I know….I’m a bad Canadian…….boo hoo at me not following the herd…..but I do like to sun my zebra.

#163 Balmuto on 05.27.13 at 8:50 pm

For those who think there will be plenty of time to react before bond yields go up in earnest, here’s what the bond market did in the first six months of 1994:

http://www.tradingeconomics.com/canada/government-bond-yield

#164 Daisy Mae on 05.27.13 at 8:55 pm

#140Jason: “An Awesome post, Garth. I have taken the time to share some of your wisdom with friends and family. If I keep it up I may not get any more dinner invites.”

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

Ain’t it the truth? LOL No one wants to hear the truth….

We all have to….’learn the hard way’.

#165 Blacksheep on 05.27.13 at 9:40 pm

“I never short, and neither should you. — Garth”
———————————————————-
Please tell me this is due too risk assessment, not
passing moral judgement.