Consequences

consequences

Days ago the realtors’ national body said sales in June crawled higher from May, and were a little less than last June. Here is how it was reported by the MSM:

  • Residential real estate heat up in June (Global)
  • Canadian housing market rebounds in June (CBC)
  • Canadian home sales improve in June (Canada NewsWire)
  • Foreigners still see bullish on Canadian Real Estate (Wall Street Journal)
  • Home sales bounce back, but a rate test lies ahead (Globe)
  • Canadian home sales inch upwards (Toronto Star)
  • Calgary price growth for repeat home sales among best in Canada (Calgary Herald)

Well, you get the picture. The house-pumping never stops. And as more media outlets lose money and fire reporters, press releases from outfits like CREA or Royal LePage become news stories, with headlines and bylines slapped on. That suits the realtors just fine. But the death of journalism, as we knew it, robs people of dissenting or differing voices, making life more dangerous.

Here are a few things an informed public should know, in random order.

Sales of houses are not higher than last year. They’re lower. The 240,068 units which changed hands in the first six months of 2013 is 7% less than during the same period a year ago. The statistics in the second half of the year will be, in comparison, dramatic. Anyone thinking they’re safely buying into a rising market is being deceived.

In the prestigious and expensive Oak Bay area of Victoria, 14 houses sold in the most-active price range of $500,000 to 900,000 last month. So far this month (and 17 days have passed), there has been one sale. Asking prices are dropping on a wide range of properties, in some cases, dramatically. A year ago I wrote a column here on a day-long tour I had of luxury homes listed for well over a million. Almost all are still available, or have been taken off the market. Others have been reduced in price by over $400,000, and still sit.

In Nova Scotia, sales are down from this time last year by almost 30%. On one day this week (Wednesday), here was the province-wide tally: New listings – 124. Price reductions – 97. Solds – 39. These numbers could not be worse for sellers. For buyers they’re flashing yellow. Caution. More troubles ahead.

Across Ontario, the mortgage business appears to be in serious trouble. Look at the chart below. Online mortgage applications have crumbled to levels not seen this century. Not hard to see why the big banks are exiting the mortgage brokerage business, and how much of a realtor-based lie it is that F’s financing reforms a year ago had little effect.

Mortgages

Speaking of realtor-provided data, GTA broker Ross Kay sends along this comment on CREA’s latest numbers: “It should be reported June was the 11th consecutive month of declining 2013 to 2012 comparisons in national MLS data, as released by CREA to the media.  Although CREA has not disclosed the actual declines, which are far greater, the fact is even CREA itself has noted declines for the last 11 months.  When July numbers are released and an even bigger percentage decline is seen, it will mean 12 months of consecutive declines.”

And if real estate’s doing so well, why are governments paying people to buy it?

Winnipeg is the latest city to give away money in order to encourage people to purchase homes that apparently can’t sell on the open and free market. Peggers will soon see $2.5 million of their property tax money handed over in $10,000 cheques to anyone buying a new condo in the northeastern part of the downtown.  All purchasers of a new, unsold, previously-unoccupied unit will be eligible for a completely forgivable loan of ten grand, on condition they own it for five years and don’t try to flip the property.

Meanwhile, this is what Winnipeg realtors have been telling citizens:

“Our recent weather has reheated sales to equal the June 2012 statistic” said Richard Dettman, president of Winnipeg board. “2012 was one of the best years on record and repeating this mark is no mean feat.”

So which is it? Local realtors enjoying ‘one of the best years on record’, or tax dollars being used to prop up a failing market?

Well, I cannot remember a time when deception was so everywhere, with so few in positions of influence seeming to care.

There will be consequences.

188 comments ↓

#1 T.O. Bubble Boy on 07.17.13 at 7:27 pm

An alternative view: maybe the government officials responsible for supporting the market with taxpayer $$$ see the price increases as proof that their programs are working?

(ironic, as I’m sure the programs were positioned as a way to provide affordable housing to homebuyers)

#2 Hanlon Eastbound on 07.17.13 at 7:30 pm

This faces at the top of the page are disturbing.

Feeeeeeeeiiiirrrrrst!!!!

#3 Mike T on 07.17.13 at 7:34 pm

‘There will be consequences.’

and one extremely oversized XXXXXL I TOLD YOU SO

#4 Smoking Man on 07.17.13 at 7:36 pm

Consequences

God I hate that word, teachers favorite used on me. Aha didn’t work.

Bottom line, the Bs reporting is as I predicted last year, when machine over shoots it goal, it will blow sunshine.

I said that, you all laughed, hell it’s even pushed laughingCon over the edge… He hasn’t been seen her in months.

I’m thinking he went to get a re license. Jumped, or left country….

The Herd is the market.

Crash coming soon, but not with out a huge spike price. Conditions are right for the last push up..

Better have the place tip top for this spring..

I’m selling moving to Thailand… Opening an ice cream shop… On the beach… I want this weather year round..
And a little something to do

#5 polecat on 07.17.13 at 7:39 pm

Got that right Garth, not much moving here in Nova Scotia. The young people are heading west and the rest of us are taxed to death. This place is becoming a retirement community, and retirees generally do not buy homes. Lots of old age and assisted living developments going up, some of them not cheap either. Love this place but I can see me leaving too in 3 years time. I can’t believe the ask prices on some places, we don’t have those kinds of wages here, must be people thaat got the 30 yr am’s figuring out the property taxes are killing them. Friend of mine went to an open house, asking 525000 and they “staged it” with wal mart furniture. Lots of condos going up as well. I do not understand it. I do own here but it was comparable or cheaper than renting the same place in town, I’m about a 15 minute drive to town and lucked out finding a desperate seller and bought at 2.5 times income with about 8% down. Been following you for a long time, you may thrash me for buying but the math didn’t lie. Thank’s for your service.

#6 sad on 07.17.13 at 7:41 pm

I am sad to see all predictions here being delayed. Too bad I am getting old and have no time for Garth the oracle to be right. Toronto is toronto -406 I mean- you can wait all u want, but price drops won’t occur here _ except scarlem and Jane & finch.
Garth, sorry, u are not God, u are only human

When people like you tell me things like that, no doubt remains. — Garth

#7 peter schiff is a straight up g on 07.17.13 at 7:47 pm

hey garth
ur boy poloz took his benny biy pills and will keep rates low for a long time. and the sword rattling cintinues over the boarder.
but remember as the g man says: q e is not the training whels but the whole goddam bike

got it bro??

#8 Godth on 07.17.13 at 7:51 pm

To sum it all up…
http://www.youtube.com/watch?v=zf00mEe9EOs

#9 espressobob on 07.17.13 at 7:53 pm

The new header is great! comedy never gets old. But wheres Faber, Schiff, Sprott, Or dare I say it, Lamb? Or worse like say Kevin Oleary?

#10 Kaganovich on 07.17.13 at 7:54 pm

Socialist Much?

122 Bottoms up supports Science Monkey at a117 and asks.

Why should we have to compete with internationally-funded people for our own homes, especially when there is so much wealth out there, and corruption?

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

Well we can start with the fact that the house you wish to buy cheaper is not “our own homes”. Those homes belong to the individuals not to some collective of socialsit Canadians.

“Internationally funded” people most often earned their money. That’s the way our wonderful system works.

If you want a house, earn it. You are on team “you”. There is no collective team Canada.

—————————————————————–

Umm, you’re kidding right? This coming from a fellow that has openly bragged about accruing capital gains and dividend incomes (rentier incomes) from his financial investments. Most of the income earned in the past five years would be of the unearned variety if we followed the arguments laid out by theoretical heritage of political economists like Mill for instance. At this point, everyone knows that the disconnect between levitating stock markets and worsening real economies has to do with unprecedented meddling by governments/central banks around the world. Socialism for the rich…the worst kind. It has little to do with your mythology of rugged individualistic/smart investing. This whole ‘team you’ reminds me of Ha-Joon Chang’s thoughts on how the rich tend to try to pull up the ladder once they made it to the top. Your quip sounds like a marketing slogan for that process.

#11 T.O. Bubble Boy on 07.17.13 at 7:56 pm

Thanks for the input. I think we need a straw poll on this, so further comments would be welcomed. — Garth

Change is good, but I’m not sure the new header reflects what this blog is all about (unless it is secretly a blog about the Queen&Ossington area of Toronto).

I would think that the graphic should represent:
1) Garth
2) Real Estate
3) Personal Finance
4) Babes
5) Bubble Behaviour / Speculation (i.e. the “greater fool” theory)

Maybe a cartoon of Garth sitting on a pile of money and ETFs with amazonian women in awe while Brad J Lamb drives his car into a half-built condo tower?

#12 Nemesis on 07.17.13 at 8:02 pm

“But the death of journalism, as we knew it, robs people of dissenting or differing voices, making life more dangerous.” – HonGT

I ‘got out’ in ’91… and yet – by a strange twist of fate – my life did, indeed become far more dangerous.

I like to think that I acquitted myself well over the following decade, though. But you can only do that stuff for so long…

“It’s important to enjoy life while you still can”

http://youtu.be/hTcWTf-pfyU

#13 Cautious on 07.17.13 at 8:04 pm

Bullish on housing = bullish on banks….

Housing slowdown makes Canada’s banks more attractive

“People will become more comfortable with the Canadian housing market again and they’ll recognize that these fears were overblown.”

“Bank stocks will quickly regain their value when it becomes clearer to the market that housing has bottomed out and starts showing improvement”

http://business.financialpost.com/2013/07/17/housing-slowdown-makes-canadas-banks-more-attractive/

#14 Donald Trump on 07.17.13 at 8:07 pm

#1 T.O. Bubble Boy on 07.17.13 at 7:27 pm

An alternative view: maybe the government officials responsible for supporting the market with taxpayer $$$ see the price increases as proof that their programs are working?

(ironic, as I’m sure the programs were positioned as a way to provide affordable housing to homebuyers)

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

That Winnipeg initiative F’n nuts…

Using taxpayers property tax $$$ to subsidize others to by RE? and thus dilute overall value?

In addition, many cities now try to create affordable housing as part of developments. That is not their mandate, as at the end of the day the taxpayers pay.

This is going to get real ugly…..

#15 Soylent Green is People on 07.17.13 at 8:10 pm

Did you hear the new bank of Canada guy (Captain Crunch) talking about the soft landing of Canada’ real estate today on P&P with Evan Solomon over at CBC?

………….

Disturbing reports of enemy lists generated by Harper’s PMO torpedoed Stephen Harper’s attempt at a bright, breezy, teen idol kind of cabinet shuffle this week.

Me = lololz, also I heard on P&P today they think it was leaked by a Conservative insider… HA HA

http://www.theglobeandmail.com/commentary/who-needs-enemies-when-you-have-a-staff-like-stephen-harpers/article13272824/

#16 debttoincome on 07.17.13 at 8:16 pm

Garth: Perhaps a story this week on the TD report that, finally, corrects for the differences between Canadian and US debt to income ratios and clarifies that the CDN debt to income ratio, when properly define and calculated, is not as high as portrayed by stats can and the IMF – still high, sure, but his measure has always been a bunch of BS…

#17 lee on 07.17.13 at 8:17 pm

Does anyone know who the guy pumping condo living on the Lang and Oleary hour tonight was and what his affiliations are? He is a very good public speaker.

#18 CrowdedElevatorfartz on 07.17.13 at 8:20 pm

Well when I look at the Header on this Blog it reminds me of the 1970’s when I was smoking waaaaay too much pot and reading National Lampoon.

Perhaps bank interest rate, monthly sales percentages, you know, the usual boring stuff that will chase away all the non Blog Dogs……….

#19 Happity on 07.17.13 at 8:21 pm

• Bernanke: If the Fed were to tighten policy, the economy “would tank.”

Haha, so much for tapering and the US Economic Renaissance …

He said no such thing. — Garth

#20 jess on 07.17.13 at 8:22 pm

One of Canada’s longest-running lawsuits

The Quebec Court of Appeal has upheld a decision that found auditors Coopers & Lybrand liable for negligence in connection with their work for Castor Holdings Inc. before its $1.6-billion financial collapse

The Quebec Court of Appeal has upheld a decision that found auditors Coopers & Lybrand liable for negligence in connection with their work for Castor Holdings Inc. before its $1.6-billion financial collapse.

The court sided with most of the April 2011 decision by the Quebec Superior Court, putting Castor creditors a step closer to having their losses repaid from the 1992 bankruptcy of the real estate investment company. Coopers had only appealed a portion of the earlier ruling.

#21 jess on 07.17.13 at 8:33 pm

Barclays’ $453m fine for US energy market-rigging upheld

In a series of electronic messages, according to the FERC complaint, the traders boasted of their ability to manipulate markets.

In an email exchange, one of Mr Connelly’s colleagues asks: “You going to have fun with the index all month?” and in another, Mr Connelly responds to details of market volatility with: “Crazy – I love it.”

http://www.bbc.co.uk/news/business-23337178

#22 Dienekes on 07.17.13 at 8:36 pm

Friend went and looked at houses in Saskatoon with realtor. Brought a pile of spec sheets. Most of the houses reduced 3-4%. One listed since sept. 12.
But my God are they building there.
When asked why reductions, realtor told him builders have tons of lots and need to move them.
While we were talking, he received this email. I took it off his phone:

Good Day

Pls check out these properties am sure you will be interested in it,
sign in with your email to view sample below on the secure website

LINK DELETED

Their offer is very good, RE/MAX are given up to 15%-20% discount see if anyone might be interested in these sales offer.

Kind Regards,

Is this a sign? Coincidence?
I do not know how the market is going to absorb the volume of housing being built. Everyone and there dog is a builder there.
If housing caves, Saskatoon is in huge, huge trouble.
The realtor assured my buddy that immigration is absorbing all the housing stock.
Thank God, that taxi driver I paid twelve dollars to take me to the airport will put it to good use.

#23 Squatter on 07.17.13 at 8:43 pm

About the header:
For me , the header represents the greater fools.
And they indeed look fools.
As simple as that.
Garth, why don’t you ask Smoking Man to e-mail his picture, we all would love to see him there!

#24 Retired WI Boomer on 07.17.13 at 8:45 pm

Consequences?? Deception will have consequences?? Not in the USA.

Our fair minded Real Estate sellers, and American Banks, like Citibank, and Bank of America, Indy Mac, and Washington Mutual among others did their best to ensure that only fully qualified individuals were allowed to purchase a home, on reasonable terms during the last decade.

After “a few” of these buyers fell upon hard times, the banks, worked tirelessly to help these homeowners adjust their mortgages, whenever it was possible.

After reading THAT line of deception, my new name is Mother Goose.

I’ll bring you other fairy tales soon. Trust others, they don’t need to lie. The check’s in the mail. Lies I understand, the Consequences are always in the eye of the beholder, or is that the bewildered?

#25 X on 07.17.13 at 8:46 pm

If I lived in Winnipeg, I would definitely let the Mayor know how I felt about my tax dollars subsidizing builders, realtors and buyers with my next vote.

When the market finally does turn, and it may have started to already, I look forward to the RE cartels publicly blaming everything on F, and F calling them on the BS numbers and spins they release.

#26 Dean Mason on 07.17.13 at 8:54 pm

The U.S. 10 year bond is 2.48% and 30 year 3.57%.What happened to higher bond yields? Bernake talking down bond yields again.Just like Greenspan using deflation,deflation to push down bond yields drop 225 basis points in 18-20 months.Now it’s jobs created,unemployment rate, low inflation target,real estate market,mortgage rates etc. data dependent.

This is all a farce.It’s a monetary policy comedic act. Mr. Poloz is a poser and just a Carney clone.The next 5 years will not be great for investors with a jump to catch all the idiots in the trap and then watch out the crap is hitting the fan.We are not still at 2010 bond yield levels,100 basis points to 175 basis points long to short term bond yields.

The S&P 500 was 1,528 in 2000 and now it’s 1,681,Nasdaq is 3,610 versus 5,100 high in 1999-2000.This is so much on shaky ground.

#27 The Prophet Elijah on 07.17.13 at 8:58 pm

Well, I cannot remember a time when deception was so everywhere, with so few in positions of influence seeming to care.
———————————————————–
This is why I’m buying gold and getting out of the system! See everyone in the Caymans! I’m sure guys like Putin and Buffet will be there.

#28 raisemyrent on 07.17.13 at 9:06 pm

to all the people that go like:
“if real estate is dead, how come they’re building so many new units?”
simple, it takes 1-2 years usually to get a building going, from idea/money to construction. those developers are reacting to the market as it was 1-2 years ago (or longer), and havw a number of greater fools to pay for the cash flow (pre-sales) to build the units (50-100% return on each unit sold, when compared to construction costs).

#29 Dean Mason on 07.17.13 at 9:09 pm

Ben Bernake said there could never by a nationwide U.S. housing market decline and that was way off.The fed and Bernake raised Fed Funds rate to 5.50% and that was a big mistake too in 2006-2007.The fed always through history creates asset bubbles,crashes and recessions by their data dependent misreading.

They are going to mess it up again and again.It’s like Groundhog Day.

#30 Herb on 07.17.13 at 9:12 pm

Re header: give this one to SM for use on his blog, and stay sober.

#31 HighRiser on 07.17.13 at 9:13 pm

It’s hard to imagine the general public falling for the current ongoing deception of a rosy market for a long period of time.

When they finally get the true facts and realize what the heck has been going on they will be mad as heck for being deceived, particularly the newbie (albeit few) buyers who are being sucked in to buying at the moment.

When that happens their rage will make an even better story for the MSM eventually.

#32 pathcontrolmonk on 07.17.13 at 9:16 pm

What are the consequences of $6 trillion of bad debt?

China’s shadow banking collapse seems poised to be the catalyst to bring down Canada’s HAM fed housing market. Nightly news coverage in Asia of the $6 trillion shadow banking debt, but seemingly little coverage or concern in the rest of the world.

Japan’s Foreign Minister 2 days ago: “I think a bubble related to real estate is seemingly on the brink of bursting, and under the circumstances the shadow banking system could exert a big impact on China’s economic growth…”

http://www.businessweek.com/articles/2013-05-08/chinas-shadow-banking-sector-tops-5-dot-8-trillion-report-says

#33 valleyrenter on 07.17.13 at 9:16 pm

Watching the news, Surrey food bank is in dire need of help. Over 11,000 people a month use it. They say that there is a GROWING use of the food bank by the elderly. Yep, economy is doing just fine (sarcasm), Surrey is booming according to MSM yet this shows a bleaker picture.

#34 Mister Obvious on 07.17.13 at 9:20 pm

I took a recent walk in Vancouver past the southwest corner of Broadway and Carnarvon street. The old stores on that half block are all now empty and slated for demolition.

But here’s what surprised me: The development is not for condos but for purpose-built rentals and commercial units at street level. Who builds rental accommodation any more? Especially in this city and in that part of town. What does this tell us, if anything?

In fact, the land had to be rezoned for this purpose. Here’s what is says on Vancouver city’s planning update page:

Rezone 3002-3036 West Broadway from C-2C (Commercial) District to CD-1 (Comprehensive Development) District, to permit the development of a five-storey mixed-use building containing 83 units of for-profit affordable rental housing with commercial retail units at grade.

#35 OttawaMike on 07.17.13 at 9:27 pm

Re: New Blog Header

Meh, funny at first glance but gets old fast. Unbecoming for a prestigious blog of this sort..no wait, let me rephrase that…

#36 Nemesis on 07.17.13 at 9:27 pm

@YYZ BubléHonGT/#11

Door #4?

Alright then, if you must take the thematically apropos HighRoad… then go with HeadShots of your favourites as found herein:

http://tinyurl.com/nfvr727

#37 Smoking Man on 07.17.13 at 9:30 pm

In university, mba, you get your delta, gamma, vega, lessons. You will learn how to use the mround function in excel… You will understand risk, and what a yield curve is.

Your teacher will be an arrogant little, twirp who was never hustled door to door.

But no where do they teach about the herd.

Reason, it doesn’t fit nicely into an equation, it’s fluid, unpredictable, and damn difficult to understand.

The herd drives bulls and bears, herds are local, if you study the herd, you can call heads and tails with almost 100 present accuracy.

Garth, economists, experts, industry leaders all learned the same thing..

There ideas will keep you money safe, and growing at a reasonable rate..

My methods could bankrupt you, but you can also become rich over night…

It all depends on your level on insanity, Canadians have never been hungry enough to go insane, YET

#38 dave b on 07.17.13 at 9:32 pm

co-worker finally sold his condo….2 months and 20k lower than listed. he had to drop his price, he bought a house in etobicoke.

#39 dave b on 07.17.13 at 9:33 pm

list price is probably important/relevany 279k

#40 Consequences — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate | The Affluent Boomer on 07.17.13 at 9:35 pm

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

#41 Marco from Van on 07.17.13 at 9:36 pm

DIENEKES Post above is a Phishing site trying to scam your personal online account details!!!

try accessing it with [email protected] with a password “What_a_moron” and as with any other email/password combination will lead to the US re/min landing page with no auction page…

Another con… Realtors are cons and there are consters using realtors to con you from your own email accounts to spread con spam from…

That must be a second line of income for all the realtors who can’t make their nut selling homes nobody wants!!!

Hope this was a public service to all…

Marco from Van…

#42 45north on 07.17.13 at 9:37 pm

It should be reported June was the 11th consecutive month of declining 2013 to 2012 comparisons in national MLS data

it should be reported

you know when you search stuff on the internet and get past the 2nd or 3rd page on google search, the pages start to turn weird. Weird as in unreliable, untrustworthy. Which brings me to the subject of your header. Weird.

CREA must be cheering your new header. Here’s its header:

http://www.crea.ca/

how about the Royal Bank, maybe it feels the need to be a little funky:

http://www.rbc.com/country-select.html

I’d say they had a team to make damn-good-and-sure there wasn’t a spot of funky

how about CMHC:

http://www.cmhc-schl.gc.ca/en/co/

#43 Bottoms_Up on 07.17.13 at 9:39 pm

#180 screwed on 07.17.13 at 6:07 pm
——————————————-
I read a stat on private schools that said 25% of parents can actually afford to pay sticker, 25% beg for a discount, and 50% go into debt for it.

#44 Donald Trump on 07.17.13 at 9:40 pm

Real estate boom aka $$$$ laundering?

http://www.rollingstone.com/culture/news/boss-weed-how-clay-roueche-changed-the-marijuana-game-forever-20130509

QUOTE

In the summer of 2001, Roueche married a Laotian woman from Countess Street in an elaborate traditional wedding.

After that, he tried to take life more seriously. He invested in a waterfront condo project, opened a restaurant called the Millennium Cafe and invested in real estate all over the valley. “I was in this for the long haul,” Roueche says. “I didn’t want to be one of those guys who makes a bunch of money and blows through it all in a couple of years.”

#45 takla on 07.17.13 at 9:40 pm

Been on the front lines of hi-rise condo building for 35 plus yrs and seen my share of boom and bust.Currently knee deep in a project in B.C.Never seen so many wide-eyed,scared sh-tless construction managers,cutting corners everywhere they can to reduce cost..Im getting that same feeling i had back in 08 when sudden 30-40% reductions on condo units became the norm.My last two projects remain 30-40 % unsold with numerous price reductions.I can smell the fear!

#46 TO and GTA Sales and stats -Very low volume of sales for Condos and TO SFH!! on 07.17.13 at 9:41 pm

http://recharts.blogspot.ca/2013/07/to-and-gta-condo-sales-and-stats-july-17.html

http://recharts.blogspot.ca/2013/07/gta-905-sfh-sales-and-stats-july-17.html

http://recharts.blogspot.ca/2013/07/to-sfh-sales-and-state-july-17.html

#47 Justin on 07.17.13 at 9:42 pm

There has to be consequences

http://vimeo.com/70352603#at=0

#48 Nemesis on 07.17.13 at 9:44 pm

@SmokingMan/#38

“Canadians have never been hungry enough to go insane.” – SmokingMan

Au contraire!:

http://en.wikipedia.org/wiki/Henry_Larsen_(explorer)

PS – TheOriginalSmokingMan

http://youtu.be/KWXavWsYBR4

#49 espressobob on 07.17.13 at 9:47 pm

#28 The Phophet Elijah

Your destination will be a lonely one!

#50 Canadian Watchdog on 07.17.13 at 9:47 pm

About that low inventory the boards keep reporting.

How Many FSBO’s Are There?

Generally, in a real estate market where a variety of for sale by owner and full services selling models are offered, about 20-25% of people will opt to sell using a for sale by owner model. Of this 20-25%, about half will opt to purchase a flat fee MLS listing. This proportion depends on the power of the region’s MLS system. Because Canada has one central public MLS® system (owned and managed by the Canadian Association of REALTORS®), it has become almost the sole searching tool for buyers looking for residential real estate. The country’s public MLS® system is resultantly very powerful. As such, the Canadian for sale by owner pool may end up consisting of greater than 50% MLS flat fee listings.

But here's where it get's interesting… In February, CREA added a new footnote in its monthly report that states: "Includes member and non-member data" that can be seen here. This shows that Quebec is the only province to include non-member data (FSBOs) and also clarifies that even though FSBOs are searchable through the MLS system, they are not included in member reported statistics.

How many FSBOs could there be? This is something worth exploring to quantify how many listings may be unreported by the boards. But we now know there are definitely more listings then they claim.

#51 not 1st on 07.17.13 at 9:48 pm

Garth, aside from all other factors, you have failed to address one glaring item in the bubble. The fact that more than half of the cost of a new house is labour. Try calling a contractor these days and get ready to adjust your pacemaker. Since the cost of new home construction labour is so astronomical, the effects have spilled over into the resale market as well.

Tightening mortgage rates or lending standards won’t do the trick on its own. Some catalyst has to knock back labour costs, especially on new homes, before there is a real correction.

#52 Scully on 07.17.13 at 9:55 pm

Garth, that Blog Header is creepy. What I read on here is enough to give me nightmares. ;)
Smoking man’s vision of the herd might be a suggestion.

#53 Smoking Man on 07.17.13 at 9:55 pm

Few weeks a go, a kid knocks on my door, wants to sell his labour, cut grass, clean out garage, don’t what ever.

That kid was hungry, he walked all the way from Islington to browns line, nothing, no takers…

To young drive.. I offer him a glass of water. Then give him a plan. Got my son to drive him home, was getting late.

I told him to get two buddies, two pails two squeegee, put on dress paints and a dress shirt. Gave him 20 bucks to buy them.

To get your windows washed here, it’s about 100 bucks.
I said knock on doors offer to download it for 50 buck so long as they supply the water and ladder. We are kids we don’t drive.

He loved the idea.

Tonight he stopped by, with a big smirk on his face, showed me a wad of cash. He said Mr smokey would you like your Windows washed… I said sure kid.

When he was done refused payment, ha smart I’m thinking. I said if I don’t pay you, you won’t come back.

He took the loot. I said how much you paying your buddies, he said they split 25 a house, I keep 25.

I present a future Canadian zillionare, my creation. Saw it in his eyes..

#54 espressobob on 07.17.13 at 10:10 pm

#27 Dean Mason

This is why some of us hold short term laddered bond ETF’s. It’s part of a bigger picture known as a diversified & balanced portfolio! I know the yields suck, but get over it! Learn how to rebalance, trust me it works!

#55 Calgary Ontarian on 07.17.13 at 10:10 pm

Thanks for the input. I think we need a straw poll on this, so further comments would be welcomed. — Garth

Garth, to be honest, your new header is kind of creepy. I’m sure there are Cdn artists (or maybe even artist-babes) who would design you a sweet website banner for less than the 1% annual fee from one of your modestly endowed clients. You run the best Canadian personal finance blog, therefore you should be able to afford to make it look better than a sketchy geocities site from the 1990’s. Your advice to others is always “seek professional help,” and this is the advice I’m offering to you now: keep up the great writing, seek help on website design.

Thanks for your continued advice and intelligent financial commentary.

#56 Whinepegger on 07.17.13 at 10:12 pm

@ #1 T.O. Bubble Boy

Not likely. This is not a help up for the downtrodden. The average condo price in Winnipeg is $220k. These condos that are getting the $10k handout are $399k and up. And the government programs have had a negative effect. They even admit it. They originally offered developers $20k to build condo units and are now in a glut position. Here’s a snippet – “An existing city-provincial program has provided developers with tax breaks up to $20,000 per unit to build new condos and apartments. That sparked a flurry of warehouse renovations and there is now an abundance of condos on the market.” So its not costing us $10k per unit. Its actually $30k out of the taxpayers pocket.

Read all about it – http://www.winnipegfreepress.com/local/buy-new-condo-pick-up-10k-215785151.html

Manitoba – the Land of Handouts – and all thanks to Canadian taxpayer transfer payments. Manitobans sure don’t have any money to contribute to this. We’re one of the highest taxed jurisdictions in the country with the lowest after-tax income. And you wonder why we don’t see the dramatic highs and lows of GTA, Calgary or Van. Think communism.

#57 TheCatFoodLady on 07.17.13 at 10:14 pm

Starting to tilt downwards in Kingston, where RE is usually as predictably dull as the various herds who inhabit the local ecosystems. Sales down 5% from June a year ago, new residential listings up by 15% & active ones up 23%… all year over year. Prices up a snitch on average but that fits with lower end home sales being hit hardest.

RE agents are dropping prices & interestingly, the ‘price reduced’ notice disappears after a week or two. The shiny gloss of having an ‘income producing suite’,. (aka basement apartment), is tarnishing. Increasingly, such homes state POTENTIAL inlaw suite or rental unit are seen as a drag on sales – too many potential problems & potential partners are wising up to those issues.

Still watching 10 or so local properties. 9 have yet to sell & the one that did surprised me – too high for the work that needs doing in & out.

A common RE tactic used here – “it’s hard to find a decent rental at a decent price… might as well buy.” The rental vacancy rate is very low here; if you find a place that works for you… hang on to it! It’s a shoddy sales tactic though & I shake my head to see so many buyers fall for it.

I watch a few varying herds & none are happy. In my ‘wrong side of the tracks’ part of town, I’m sick of our cable burping every time someone gets cut off for non-payment & it’s happening more frequently in my building. Evictions for non-payment of rent. Repo trucks prowl the roads. What should have been a quick stop at the grocery store took ages – 2 customers ahead of me had credit card after credit card denied.

More & more empty stores with ‘For Lease’ signs on them & many have been empty over a year. Retail managers & staff I know are appalled at the level of sales… they’re appalling with no sign of improvement.

Have to wonder what’s papering up the facade.

#58 Patiently Waiting on 07.17.13 at 10:22 pm

Garth is correct. The real estate boards are not telling the public the truth about the numbers … but what did you expect …

The following are the combined sales for both the Greater Vancouver Real Estate Board & the Fraser Valley Real Estate Board (stats are obtained directly from the boards own computers) for single family homes over the last 30 days. Sales are down 30% compared to the same period for 2012, down 47% form 2011, down 32% from 2010, down 61% from 2009, and yes even down 27% from 2008.

Year / Sales of SFH’s last 30 days
—————————————————
2013 1068

2012 1539

2011 2024

2010 1579

2009 2710

2008 1468

—————————–

Cheers
pw

#59 this is wonderland on 07.17.13 at 10:23 pm

Will be interesting to see if Mattamy can pull of selling 1,727 Sq. Ft homes on 30 Ft lots for 585 000 thou.

http://www.mattamyhomes.com/GTA/Communities/Aurora/St-Johns-Forest/

#60 Julie on 07.17.13 at 10:24 pm

DELETED

#61 this is wonderland on 07.17.13 at 10:26 pm

#56 Calgary Ontarian

Garth, to be honest, your new header is kind of creepy.
—————————————————————–

I second that!

#62 coastal on 07.17.13 at 10:30 pm

I hear ya on the Oak Bay house sales, lots of reduced prices in that area as well as Gordon Head. Nice neighborhoods but most of the houses in that $500 -$900K range do not impress. Most in Oak Bay have very small rooms and have hidden and expensive renos awaiting buyers on those with face-lifts not to mention the highest tax rates in Victoria. This is just the start of a much needed correction, and wait til the BC government starts their promised layoffs.

#63 Furio on 07.17.13 at 10:30 pm

Who cares sales are going down for those of us waiting to buy? Prices continue to go up. People have been waiting for years now….. how long?

#64 T Honorable Garth, PC on 07.17.13 at 10:33 pm

Mr Garth,

Your profile says: author of 14 books yet you show only 9. Any problems with the other 6.

Modest. — Garth

#65 Canadian Watchdog on 07.17.13 at 10:40 pm

Today's quote of the day courtesy of Reuters

BERNANKE ON EFFECTS OF TIGHTENING: "I don't think the Fed can get interest rates up very much, because the economy is weak, inflation rates are low. If we were to tighten policy, the economy would tank."

What else is there to know?

#66 Nemesis on 07.17.13 at 10:46 pm

@THGTPC/#65

http://tinyurl.com/kflg6v3

I used to be so good at keeping secrets.

#67 Victoria - the Original on 07.17.13 at 10:48 pm

Toronto house prices soar

http://www.huffingtonpost.ca/2013/07/17/house-prices-toronto-canada_n_3610458.html

#68 Canker Worm on 07.17.13 at 10:49 pm

I think Winnipeggers, generally stubborn, greedy, and late to catch on, are starting to get it. I’ve been watching some houses I would consider buying if I weren’t better informed sit on MLS long after their “bidding war” date; this would not have happened a year ago. So, I’m thinking buyers are pushing back and calling the sellers’ bluffs.

And ain’t nobody buying those condos in stab-and-rob central, no matter how much money you throw at them…

#69 John in Mtl on 07.17.13 at 10:49 pm

“Well, I cannot remember a time when deception was so everywhere, with so few in positions of influence seeming to care.” – Garth

I love JH Kunstler’s descriptive phrase of the times we live in: “We now live in a world where anything goes, nothing matters and nobody cares”.

John

#70 Entrepreneur on 07.17.13 at 10:52 pm

#54 Smoking Man

Liked how you helped a young man find a business which changed his direction in life & thinking.

I find that most people like to work for someone, get paid, go home maybe get golden pension (politicians). Too many people follow the leader for the mighty buck but that is not how it should be. Another topic, another day.

One thing entrepreneurs have to do is paperwork as the government like to see income & expenses for yearly income taxes. Keep all income receipts & all expenses. Record everyday. This becomes easier with habit. Go to a bookkeeper or accountant for services. This will save your bacon.

I have heard of so many people fail because they do not
realize that paperwork is a must even contracting jobs.

Be prepare to jump from one business to another and it is wise to get insurance as people like to sue.

Entrepreneurs are the real taxpapers.

#71 Moi on 07.17.13 at 10:55 pm

Do a search for rentals on MLS.ca at Yonge and Sheppard in Toronto. Along Yonge St in that area are tons and tons of condos for rent, all of them wanting stupidly greedy amounts of money for rent.

I wonder how many of them will be foreclosed on this time next year?

#72 Donald Trump on 07.17.13 at 10:57 pm

#54 Smoking Man on 07.17.13 at 9:55 pm

Few weeks a go, a kid knocks on my door, wants to sell his labour, cut grass, clean out garage, don’t what ever.

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

By door do mean the lid on the dumpster?

Maybe you should get Old Man to dress up like a monkey(redundandt) as you play the organ……for old times sake.

#73 Nosty in Vladland on 07.17.13 at 11:10 pm

-
SMan – If this were to ever happen to either of us, whut say we invite Jim (Beam), Jack (Daniels), Wild (Turkey), Johnnie (Walker), Gordon’s (Gin) along with a few others, the bloggers at the top of Garth’s masthead and get together for a beer or three?! The new masthead is neat — reminds me of some of the nutbars here!

BTW, #54 Smoking Man — “I present a future Canadian zillionare, my creation. Saw it in his eyes..” — Right on! No post-secondary education or apprenticeship req’d. Smart move!

As far as ObombaCare, things are shaping up nicely, and this.

In a rush? Around the world in four hours. Rudyard Kipling and Jules Verne are happy. Drawback? No windows.

#156 True Animal Lover on 07.17.13 at 3:23 pm — “where’s NOSTY ?”

Basically, I retired from retirement as I have too many other things on my plate. Drop by occasionally, that’s all. Cheers!

#74 Old Man on 07.17.13 at 11:17 pm

I have an idea for a new header, as just change the faces for some real idiots with Caesar and selective greater fools from his so-called Cabinet. :)

#75 KommyKim on 07.17.13 at 11:18 pm

Re: New Blog Header
Are the faces supposed to represent the Kia driving, basement dwelling, bullion licking, posters on this blog? Or are they actual realtors’ pictures that you’ve gathered from the CREA site?

In all seriousness, I agree that something classier is needed. Could still be humorous though. Maybe a scene that contains all those heritage items from Greater Fool. (Kias, Ham, RE agents, basement dwellers, banksters, etc)

#76 ObviousTruth on 07.17.13 at 11:25 pm

Aunt Chip used those exact words.

#77 Junkieman on 07.17.13 at 11:25 pm

#54 Smokingman
“I said knock on doors offer to download it for 50 buck so long as they supply the water and ladder.”

Great idea, until the kid falls off the ladder and gets sue somebody, I guess thats how he is gonna become a zillionaire.

#78 Country Girl on 07.17.13 at 11:29 pm

Don’t like the new header, Garth. Not a good fit in my opinion.

#79 Spiltbongwater on 07.17.13 at 11:29 pm

#58 TheCatFoodLady on 07.17.13 at 10:14 pm

I always thought in law suites where illegal suites, and rental suites were legit registered rentals. I could be wrong, but it is the way I always interpret Realtorese.

#80 Are the Real Estate Agents becoming a little bit more agitated ? on 07.17.13 at 11:31 pm

I have noticed that at least in virtual (Internet) the real estate agents and the mortgage brokers have became very agitated and very irritable. Is this just my impression or they are more nervous these days ?

#81 Marginal on 07.17.13 at 11:33 pm

#28 Prophet in his own land

Just make sure that the gold is not loading down your pockets when another Ivan or son-of-Ivan lands on the Cayman Islands ;-)

#82 Okanagan Kingpin on 07.17.13 at 11:34 pm

Ahh data manipulation at its finest! Information these days seems to be a commodity that is traded and priced to the highest bidder… it is that bidder who then determines said information’s face value to the rest of the world. If you own the information, you control it’s value..

http://mayer320.wordpress.com/2013/07/17/have-you-considered-the-data/

#83 Nosty in Vladland on 07.17.13 at 11:48 pm

-
SMan – Appears you are correct. Universe is downsizing!

#84 Fed Policy & Schiff on 07.17.13 at 11:48 pm

Maybe now there is some uncomfortable shifting in seats as people realize that there is actually a chance Peter Schiff might be right yet again.

Bernanke clearly said the economy will tank without low rates, and is introducing language to the effect that the Fed reserves the right to increase QE (which they will). Ben also now admits there is an employment problem, which means things are getting even worse if he is actually even mentioning it. 7.6% is a fudged number, just like Canadian real estate stats.

#85 Bill Gable on 07.17.13 at 11:48 pm

If I was a Winnipeg tax payer, I would have a stroke, reading this excellent post.

It is just BRUTAL here in Dampcouver. They are still slamming up the condos, as fast as they can. Walking on the west side, I was shocked at the activity. Side by condos that are so poorly built, they have had to ‘reclad’ the building.

People are whacked out. I don’t get it!

#86 Gord on 07.17.13 at 11:51 pm

News from Langley BC (a burb of Vanhattan)

Murray’s Walk is a condo development near Langley Memorial Hospital. The developer dug a hole for underground parking and poured some concrete structures some 4 months ago. There has been no further work done since.

An old office/light industrial building on 64th Avenue near Walmart has been having problems finding tenants for 3+ years. The owner is now converting the building into retail units. The commercial market is very much saturated.

In another part of town two office buildings near the freeway and 201 Street sit vacant. The office market is overbuilt.

There will be consequences.

#87 Harry Wilson on 07.17.13 at 11:59 pm

I know I already addressed the question on yesterday’s post, but this Toronto Albertan just wanted to second the comment by Calgary Ontarian (#56). Whoever designed the Turner-Tomenson site should be consulted on your banner.

As long as we’re allowed the opportunity to vote on the banner pic, how about another straw poll on how firmly the “Abusive, obscene or disrespectful commenters will not be published” rule should be enforced. I assumed the recent upswing in doomer (and other) commenter’s mudslinging was a seasonal thing, since the kiddies are out of school and bored. I went back and reread your posts from July of last year, however, and there was nothing approaching the jerks of recent weeks.

Thanks again, Mr. Turner.

#88 Dean Mason on 07.18.13 at 12:18 am

To espressobob #55

You are not going to get far with bond ETF’s.This strategy of going short for the last 20 years was a disaster.When interest more precisely government bonds was the time to go long term at 11%,10%,9%,8%,7%,6% and short term were not much less most stay short to medium.What a stupid strategy.

Nobody was saying to go long back then.Now you think that staying short is a winning strategy.ETF’s are mutual funds with lower fees in disguise plus 2.30% yields are a joke.Good luck waiting for rates to go higher and stay higher for any meaningful time.

Most Canadians will never have $1 million because they have no real working strategy.They make the financial,banking,investment system this way on purpose.Most people will never have a chance.

#89 Harry Wilson on 07.18.13 at 12:19 am

P.S.

#42 Marco from Van:
Thanks for the heads-up; I worry about some of the toxic-sounding links in the comments.

#65 T Honorable Garth, PC:
The other six books form the rather steamy ‘Amazon Gladiator’ (or is that ‘Gladiatrix’?) series, available in plain brown wrappers.

#90 The Real Truth on 07.18.13 at 12:20 am

Wow. This site still going on about the impending Armageddon…

Check out the archives to the right on the homepage….sounds like the same writing in 2008, 2009, 2010,………

#91 David McDonald on 07.18.13 at 12:43 am

The new governor of the bank of Canada says there will be a soft landing for real estate. I assume he had the option of remaining silent if there was doubt among his advisors. I have to take it at face value that a lot of smart guys in Ottawa believe housing prices will plateau but not correct sharply.

If I had my wishes I would still say the downside risk justifies renting when we return to Canada next month but nobody in the family agrees. It is a very confusing time and there are consequences for making a big financial mistake. There are also consequences if I dig my heels in.

#92 Devore on 07.18.13 at 1:01 am

#1 T.O. Bubble Boy

Subsidies always work at first. Then very quickly they stop working, but are rarely removed for fear of making things even worse. And hey, who’s not gonna vote for free money.

#93 Julie on 07.18.13 at 1:39 am

#34 valleyrenter on 07.17.13 at 9:16 pm
Watching the news, Surrey food bank is in dire need of help. Over 11,000 people a month use it. They say that there is a GROWING use of the food bank by the elderly. Yep, economy is doing just fine (sarcasm), Surrey is booming according to MSM yet this shows a bleaker picture.
————–

Okay let’s try this again. Yes…. I know tons of broke people. Anyone who thinks the economy is doing well is either insane or an overpaid snivel servant. I’ve never met so many broke people in my life everywhere in go in Canada and the USA.

#94 winterpeg on 07.18.13 at 2:09 am

Adding to Whinepeg’s comments 57: The folks I see taking advantage of the plan to give $10000 to purchase a condo in the fancy waterfront area would be: 1) the rich, or 2) The folks who want to appear rich. So what happens to the latter if they default on their mortgages? Who’ll get stuck paying off those condos?
There are also condo developments all over the city. So the wanna-be-trendy waterfront gets preferential treatment?!! None of this makes sense, nor does it pass the smell test. The developers and certain higher ups in city government are in cahoots to profit by this, whether it it succeeds or fails, in my view.
These fancy shmancy condos should just respond to the market without help from anyone.

#95 Burnt Norton on 07.18.13 at 2:10 am

Interesting recent quote from Michael Lewitt on the topic of consequences:

“Many investors will be tempted to see value in suddenly battered debt instruments of all kinds – munis, investment grade and high yield bonds, mortgage-backed securities. It needs to be pointed out that this is only relative value – in absolute terms, all of these instruments – on an average basis – are still trading at artificially depressed yields as a result of the Federal Reserve’s policies (which, just to be clear, haven’t yet changed and are unlikely to change for at least several months). The fact that so few investors in credit were prepared for the recent sell-off is a classic example of Hyman Minsky’s financial-instability hypothesis whereby stability breeds instability: as stable financial market conditions persisted and extended since 2009, credit investors grew increasingly complacent and added leverage, duration and illiquidity to their portfolios. The correct approach was to do the opposite – as the cycle became more extended, they should have been shortening duration, eliminating leverage and selling their least liquid holdings. They might have been “early” and sacrificed some returns in the short-run, but in the long-run their returns would be much better”

As with Canadian real estate, better to have sold and become liquid two years too early than two months too late.

#96 Buy? Curious? on 07.18.13 at 2:11 am

Yes Garth! Sticking it to the Man (and Whoa-man. Sherri Cooper, you’re a sexy house pumper! How’s it going since you sold your house?)!

http://www.youtube.com/watch?v=67V6D0oK0hM

#97 Deb on 07.18.13 at 5:29 am

#53 Scully

Garth, that Blog Header is creepy.

——————————————————————

I want to know whether these people are current or former members of the Canadian Senate?

#98 young & foolish on 07.18.13 at 6:19 am

So, the realtors lie, what’s so shocking about that? Do stock pumpers tell the truth? Do central bankers?

People can “feel” that they do not live in a free economy. Who to trust? What to believe? Carry on and keep calm.

Even David Rosenberg says the RE market is not collapsing but stabilizing (thanks to the government’s intervention).

#99 Craig on 07.18.13 at 8:02 am

Ok, so let me get this straight;

Canadian and US Newspapers lie

Canadian TV Networks lie

Newswires lie

The CREA lies

So have you confirmed that not ONE of those News Agencies have done any investigative work into the CREA’s numbers and confirmed they’re accurate?

Or do you just assume it’s a conspiracy and that everyone is lying?

Not exactly. Realtors manipulate data. Lazy media report it. You believe it. I feel worst for you. — Garth

#100 Chickenlittle on 07.18.13 at 8:34 am

#38 Smoking Man

I have to agree with you on the part about most Canadians not having experienced hunger enough to hustle.

My hubby is Romanian and he knows how to hustle. He knows things won’t just come to you. he knows that if you want something good you have to:

a: Speak up and ask for it
b: Get your butt out there
c: Network and make lots of connections

Most of us fall into the “I want someone to give it to me” category (the 10k Winnie-the-pooh-peg is giving out).

Obeying is not always the best option.

#101 Holy Crap where's The Tylenol on 07.18.13 at 8:49 am

Crash what crash? Toronto is a contrarian investment location! So what do we believe, radio crap, printed crap, television crap, RE listings? Personally the printed crap is my favorite as it can always be used as toilet paper!

http://www.thestar.com/business/real_estate/2013/07/18/homes_in_gta_see_big_price_gain.html

#102 gotthardbahn on 07.18.13 at 8:50 am

Hey Garth –

Excellent column on the MSM and its disconnect from reality. As you put it so well:

‘Well, I cannot remember a time when deception was so everywhere, with so few in positions of influence seeming to care.’

The same could be said of the American media and its shameful love affair with Barack Obama, ignoring the stumbling US economy and the stunning incompetence and arrogance of the Democrats in power. Somehow I doubt that has ever occurred to you and your friends on the left of the political spectrum.

#103 T.O. Bubble Boy on 07.18.13 at 8:56 am

@ #93 Devore on 07.18.13 at 1:01 am
#1 T.O. Bubble Boy

Subsidies always work at first. Then very quickly they stop working, but are rarely removed for fear of making things even worse. And hey, who’s not gonna vote for free money.
_____________

Exactly… the government “supporting affordable housing” by paying risky buyers to purchase over-priced homes is just stupid.

Also – the timing of these types of programs is completely backwards: you already have mortgage rates as low as they’ve ever been (so, affordability is actually higher than it would be historically). The governments are encouraging speculation on the housing bubble by helping unqualified buyers bypass the only barrier that they can’t avoid: having at least a 5% down payment.

Who in their right mind thinks that giving money to people who can’t even save 5% down is a good policy? You’re basically saying “I know that you aren’t capable of managing you finances, but I’ll give you one more chance to prove me wrong by making you house poor and seeing if you survive”… almost as dumb as the GW Bush idea of letting the average joe American “invest his/her own social security contributions in the stock market” because they weren’t saving enough on their own.

#104 Ferrari321 on 07.18.13 at 9:02 am

people are getting desperate … throwing in car incentives if you purchase a condo … LMAO

http://www.kylemorecommunities.com/

#105 gladiator on 07.18.13 at 9:10 am

“Percentage of Mortgage Applications” – percentage out of what? If mtge applications fell under 0.1%, then what is in the rest of the 100%?
The graph makes no sense without telling what is included in the total.

The source is on the chart. Look it up. — Garth

#106 Ann on 07.18.13 at 9:27 am

#64 Furio on 07.17.13 at 10:30 pm
Who cares sales are going down for those of us waiting to buy? Prices continue to go up. People have been waiting for years now….. how long?
.——————————————————————-
Keep waiting as life moves along?

An ill-timed purchase can have long-term consequences and life effects. Careful. — Garth

#107 rosie "moving forward" on 07.18.13 at 9:36 am

#100 Craig and others

The question is, do people lie? The answer is, yes they do. The media is there to find the truth. However, sometimes the truth can be an inconvenience. http://whatreallyhappened.com/WRHARTICLES/incubatorlie.html

#108 BOC suggest there could be a housing crash on 07.18.13 at 9:39 am

Here’s what the Gov. of the BOC said about housing in Canada as reported by the FP yesterday.

“The elevated level of household debt and imbalances in some segments of the housing market remain the most important domestic source of risk to the Canadian economy. In the past several months, there has been a constructive evolution of household sector imbalances. Nevertheless, despite the continued slowing in credit growth, the level of debt remains high. In addition, some of the latest data point to the risk of renewed momentum in the housing market in the context of continuing very low borrowing rates. This renewed momentum would produce a temporary boost to economic activity and inflation, but more importantly, it would exacerbate existing imbalances and therefore increase the probability of a more severe correction later on. Such a correction could have sizable spillover effects to other parts of the economy.”

All of this is BOC bank-speak for there will be no soft landing.

#109 SilverMeridian on 07.18.13 at 9:41 am

SilverMeridian Greater Ottawa surReal Estate Update

http://www2.ottawarealestate.org/home/NewsInformation/LatestNewsRelease.aspx

No wonder mortgage application in Ontario are historically low, who wants to buy wrecks from 60s and 80 for extra-orbital prices. And Ottawa is not a small contributor to that trend. For example, this is how OREB is trying to conceal the fact that the wheels are falling off the Ottawa condo market:

Condo sales dip below average, residential units remain steady

Ottawa, July 4, 2013 – Members of the Ottawa Real Estate Board sold 1,594 residential properties in June through the Board’s Multiple Listing Service® system, compared with 1,662 in June 2012, a decrease of 4.1 per cent.

“The condo market has dipped below average. The five-year average for June condo sales is 368 – putting June in at 17 per cent lower than the average,” says Clarke. “Although, when you look at residential units sold, without looking at condo sales, the decrease from year to year is only one per cent. Inventory on hand had been building up since the beginning of the year, but we’re now starting to see a small decrease, which will bring the Ottawa market into an even more balanced buyer/seller territory.”

So, when the condo sales fall off the cliff, in OREB language it translates into a “dip below average”. Good thing they finally mentioned inventory pile up, and those number are nowhere near boring “averages”. For example in “Residential active Listings” category there are 7500 units for sale, a thousand units more then the same time just a year ago. There is also a disturbing trend in the “New Listings” category, we now sitting at almost 2900 new listing in a single month. “Months of Inventory” is surging to a new heights of 4.7 months, up from 3.9 just a year before, which is not surprising, since the sales are the lowest in the past five years range. As far as I can tell the only trend that truly remains “steady” is inventory build up and sales slowdown, how is that possibly going to ” bring the Ottawa market into an even more balanced buyer/seller territory.” is a mystery to me.

#110 Bottoms_Up on 07.18.13 at 9:48 am

#100 Craig on 07.18.13 at 8:02 am
—————————————-
We have often discussed the cherry picking of data by realtors and newspapers that blindly follow it.

If you actually read the full reports and analyze the stats, available for free, you find that at least as many, if not more, of the indicators are negative for real estate (the rest being positive aspects). Guess which indicators are always reported in the media, and which are almost completely ignored???

This is underscored by them flip-flopping on what they report: on month 1, it might be a year-over-year comparison. Month 2, a month-to-month comparison. Month 3 a quarter-to-quarter comparison. Month 4, reporting on average prices. Month 5, reporting on sales numbers. Month 6, reporting on tight availability of SFHs. Month 7, reporting an increase in mortgage applications. Month 8, reporting on low interest rates. Month 9, reporting the Frankenumber. Etc. etc.

Housing market stats are available for free here if you want to inform yourself, rather than reading the vomit spewed by the media:

http://www.cmhc-schl.gc.ca/en/hoficlincl/homain/stda/index.cfm

#111 TnT on 07.18.13 at 9:57 am

Location, Location, Location

Hard or Soft landings is all about Location

Sales up vs. Sales down is all about Location

Prices up vs. Prices down is all about Location

Buy or Rent is all about Location (mixed with Rule of 90 and a splash of current rates, down payment and long term planning)

Good luck people and be happy with your choices :)

#112 gladiator on 07.18.13 at 9:59 am

“Percentage of Mortgage Applications” – percentage out of what? If mtge applications fell under 0.1%, then what is in the rest of the 100%?
The graph makes no sense without telling what is included in the total.

The source is on the chart. Look it up. — Garth

Thank you, I got it now. So, the online mortgage applications fell to under 0.1% of the total, meaning that offline (in-person) applications are now over 99.9%. Ok, online applications are now totally out of favour. What’s the problem, then? People like to apply for mortgages in-person. It’s their choice.

You’re kidding, right? — Garth

#113 valleyrenter on 07.18.13 at 10:04 am

Meanwhile in B.C.

1. You know the provincial flower (mildew)
2. You know more than 10 ways to order coffee
3. You stand on a deserted corner in the rain waiting for the ‘Walk’ signal
4. You notice “the mountain is out” when it’s a nice day and you can see it
5. You can tell the difference between Chinese, Japanese, Korean, and Thai food
6. You consider swimming an indoor sport
7. You cannot wait for a day “with showers and sunny breaks”
8. You switch to sandals when the temp. gets to 10c, but keep your socks on
9. You buy new sunglasses every year, because it’s been too long and you can’t find your old ones
10. You design your kids’ Halloween costume to fit under a raincoat

#114 Ralph Cramdown on 07.18.13 at 10:11 am

#94 Julie — “Anyone who thinks the economy is doing well is either insane or an overpaid snivel servant.”

That’s quite the strawman. I don’t see anyone saying that. Most people agree that the Canadian and US economies are both significantly below capacity. The question is whether things are getting better, worse or neither.

#115 rosie "moving forward" on 07.18.13 at 10:15 am

# 100 and others

See what I mean. http://www.thestar.com/business/real_estate/2013/07/18/homes_in_gta_see_big_price_gain.html

#116 @idiotic gladiator #114 on 07.18.13 at 10:15 am

Check this chart out

http://img854.imageshack.us/img854/424/yvm2.jpg

If the online mortgages decreased and in-person increased how do you explain that Year to Date GTA $volume is down 4% compared with 2013 and that in the conditions when the chart uses unadjusted numbers for 2013 AND the prices increased since last year.

So we have increased prices but less money spent! That clearly means fewer transactions and mortgage applications! Garth’s data is sound, you are brain dead.

#117 @idiotic gladiator is actually #113 on 07.18.13 at 10:16 am

“Sorry wrong number” but the gladiator stays the same.

#118 Pessimist on 07.18.13 at 10:22 am

#106 gladiator on 07.18.13 at 9:10 am

“Percentage of Mortgage Applications” – percentage out of what? If mtge applications fell under 0.1%, then what is in the rest of the 100%?
The graph makes no sense without telling what is included in the total.

The graph is a bit odd, but I think that I figured it out the first time that Garth posted it.

It is a graph of a 10 year window of applications in Ontario. Now to make the graph, do the following:

1) Find the total number of sales over the time period,
2) Calculate the percentage of the total in each month (all the months add up to 100%)
3) Graph it

One would do this in order to remove big numbers off of the y axis, so you can concentrate on the trend, rather than looking at the absolute numbers.

#119 Ralph Cramdown on 07.18.13 at 10:29 am

#96 Burnt Norton —
Michael Lewitt — “in absolute terms, all of these instruments – on an average basis – are still trading at artificially depressed yields […]”

Every business day the bond markets clear. And every day somebody complains that yields are “artificially” depressed. If people are willing to buy bonds paying 1% or 2% — and they are — who is Michael Lewitt to say they should be paid more?

“The fact that so few investors in credit were prepared for the recent sell-off is a classic example of […]”

…confusing investment and speculation. A serious credit investor cares only about repayment risk. If you’re not willing to hold a bond to maturity, why would you buy it in the first place? Sounds like the greater fool theory applied to credit instruments.

#120 TS on 07.18.13 at 10:35 am

Where is price dropping?

Do you know today’s gas price?

#121 Ralph Cramdown on 07.18.13 at 10:42 am

#103 gotthardbahn — “[…] and the stunning incompetence and arrogance of the Democrats in power.”

It takes a special kind of blindness to see a Republican majority in the H of R, Republican governors in 30 of 50 states, a Supreme Court that’s never been further right, and a Republican minority in the senate that will fillibuster anything and everything, yet claim that the Democrats are in power.

#122 Jim on 07.18.13 at 10:51 am

@valleyrenter #34

You said: “Surrey food bank is in dire need of help. Over 11,000 people a month use it. They say that there is a GROWING use of the food bank by the elderly. Yep, economy is doing just fine (sarcasm), Surrey is booming according to MSM yet this shows a bleaker picture.”

Surrey’s population has been increasingly rapidly. Between 2006 and 2011, the population of Surrey increased 18%. That is the biggest population increase in Metro Vancouver, and far outpaces the City of Vancouver’s growth of 4% during the same time period. The Mayor of Surrey loves to brag about how 1000 people are moving to Surrey every month.

The reality is that many of the people who are moving to Surrey are the poor. The City of Vancouver has gentrified. Rents have gone up across Vancouver and landlords are very picky as to who they accept. Many poor people are leaving Vancouver and moving to Surrey. It has happened over the past few years during that big wave of renoviction in Vancouver a few years back (tenants evicted for renovations so landlords can slap on a coat of paint and jack up the rent for the new tenants). Many of the poor type of migrants (as opposed to the rich HAM type) are settling in Surrey these days as opposed to East Van. East Van used to be the ghetto area, it used to be the place to go to rent somewhere cheap if you were on welfare/minimum wage. Increasingly that is no longer the case. The go-to area for the poor is now Surrey. So yes, the population of Surrey is growing rapidly–but much of the growth is in the ranks of the poor. The poor are literally marginalized in Surrey–on the edge of the metro region and they have to pay hefty three zone bus fares to take the train into Vancouver (when you lived in East Van as a poor person, it’s only one zone to take the bus down–when you move to Surrey, your 3-zone bus fare to go downtown costs double what you would have paid for a one-zone fare if you could have rented a basement hovel in Vancouver). Rents are much cheaper in Surrey so that is attractive to the poor. Also, the landlords in Surrey are less picky and they will often tolerate a small cat or even dog, whereas landlords in Vancouver want the mythical perfect tenant who has no pets. Surrey is growing as Vancouver hollows out–but there are growing pains as a result.

#123 Rapier Wit on 07.18.13 at 10:53 am

Talk about consequences…. this analysis is a fascinating read. Would love to know other’s take.

http://www.cansofunds.com/wp-content/uploads/2013/07/Canso-Px-The-Canadian-Housing-Market-July-2013-Revised-2.pdf

#124 Canadian Watchdog on 07.18.13 at 10:55 am

Bill Gross gets it. Rising stocks is an illusion.

@Gross: Stock mkt volume just 60% of 2011 levels. Investors don’t trust fast computers, fast money, doctored earnings estimates that “beat.”

I sold most of my positions over the past few weeks. I like cash now thank-you.

So you’ve been dissing stocks for a year on this blog while you had positions? Interesting, and consistent. — Garth

#125 Gold Forever on 07.18.13 at 10:57 am

#122 Ralph Cramdown on 07.18.13 at 10:42 am

…confusing investment and speculation. A serious credit investor cares only about repayment risk. If you’re not willing to hold a bond to maturity, why would you buy it in the first place? Sounds like the greater fool theory applied to credit instruments.
___________________________
Thanks for the “chuckle”.

#126 Silver on 07.18.13 at 11:13 am

If you really want to get an “interesting view” of the of the nature of the “Real” estate market…
go down to the courts and watch the court ordered sales for a few days…
follow both the volume and content…”why”…
This is where all the “bad bets at the casino” play out…
Eye opening…, savage and life destroying…,
there were ten to thirty a day going down when I watched in Vancouver…
Found me a “good one” that way.
A lot of people were in serious shit over rising expectations…

#54 Smoking man…
you stop medicating for a moment?… good post.

Silver

#127 Disappointed on 07.18.13 at 11:30 am

Garth, I was always on your side. Yes, it seemed to be reasonable that prosperity on credit is not sustainable.
Unfortunately, we were wrong. The world is irrational. Even Sir Isaak Newton lost money in the South Sea bubble. No shame in thinking for yourself and not to go with the crowd.

#128 Donald Trump on 07.18.13 at 11:32 am

#87 Gord on 07.17.13 at 11:51 pm

Yes, that is a warning sign. I have noted similar things in boom periods that show a bust is looming. You start to notice projects freeze. What gives? Everyone else is still building . Something happened.

Commercial vacancy is another big indicator, I see it all over.

#129 T.O. Bubble Boy on 07.18.13 at 11:32 am

Rob Carrick (Globe & Mail) linked to this research article today:

http://www.cansofunds.com/wp-content/uploads/2013/07/Canso-Px-The-Canadian-Housing-Market-July-2013-Revised-2.pdf

It is very well put together, and highlights (with facts) all kinds of reasons why Canada is in for a “debt hangover”.

Some crazy stats/details (almost all highlighted by Garth at one point or another):
– Insured mortgages went from 55% of the mortgage market in 2003 to 75% in 2013.
– All of the recent “tightening” of lending standards is a bunch of BS (which we all know)… standards were significantly higher before Flaherty took the reigns, and the “tightening” is still looser than pre-2006, and MUCH looser than the historical standards of CMHC.
– CMHC confirmed that they did not track how many mortgages an individual borrower has insured, and there doesn’t seem to have been any coordination between CMHC and the two private mortgage insurance companies until recently!!!
– there has been extensive “gaming” of the EMILI system to fool the algorithm and get approved for excessive prices. If a higher price is required for CMHC insurance coverage, the square footage, which is input by the lender and supplied by the mortgage broker, can be increased as required.
– There is a great chart showing the Actual Price vs. the Affordable Price of a North Toronto 2-storey home… this chart shows that starting in the early 2000’s (when CMHC removed the $250,000 maximum mortgage amount cap), these 2 values started to diverge, and today the Actual Price of a 2-storey house ($900k or so) is 50% higher than the Affordable Price ($600k).
– Housing became more expensive for Canadians because of the misguided efforts of CMHC to make mortgages easier to obtain (oh, the irony).
– The whole non-recourse mortgage myth (“things will be stable because people can’t walk away from their mortgage”) is a joke… if people are highly leveraged (5% down or less in many cases), there are no assets for banks/CMHC to go after anyway!
– 35% of the participants in the RRSP Home Buyers Plan are not making the scheduled repayments and are paying taxes on the amount that was withdrawn!

(this will not end well)

#130 Old Man on 07.18.13 at 12:28 pm

TS – drive to the nearest Native Reservation as they always have a general store and gas station to buy things on the cheap; otherwise you must pay up like a fool.

#131 Mike on 07.18.13 at 12:34 pm

Not sure if this has been posted yet, pretty good summary and comparison of the US and CA RE markets:
http://www.cansofunds.com/wp-content/uploads/2013/07/Canso-Px-The-Canadian-Housing-Market-July-2013-Revised-2.pdf

#132 Blacksheep on 07.18.13 at 12:52 pm

#103 & #122,

Left vs Right it matters not, as they’re fundamentally, two heads on the same snake.

The operational plan of divide and distract is applied to all walks of life.

White vs Black. Straight vs Gay. Pro life vs Pro choice.

The Cattle need to stop pointing the finger and hurting each other.

Only then will they realize, they share a common systemic oppressor.

Only then, can the true problem be addressed.

#133 Canadian Watchdog on 07.18.13 at 12:54 pm

GTA new home sales down 30% y/y in June. Link

If that was the best new homes sales could do during high season, good luck for the rest of year and into 2014 when income verifiction actually begins. This market is toast.

#134 HeyWilly on 07.18.13 at 1:03 pm

133rd?

#135 HeyWilly on 07.18.13 at 1:06 pm

Just noticed that the Toronto Real Estate Board released their mid July numbers for the GTA. They report the average price for the GTA at mid July 2013 was $510,819. BUT, at the end of June 2013 it was $531,374. So a drop of almost 4% in 2 weeks (-$22,555)?

Oh oh, those higher rates are having an effect. Looks like what Rosskay was calling for and you too Garth is setting in.

#136 Panhead on 07.18.13 at 1:08 pm

#94 Julie on 07.18.13 at 1:39 am
#34 valleyrenter on 07.17.13 at 9:16 pm

I’ve never met so many broke people in my life everywhere in go in Canada and the USA.

————————————————————-
Saw the same thing in SoCal. If you stay in the affluent areas all is well, but travel just a few miles away …

Was always like this but not on this scale … scary.

#137 valleyrenter on 07.18.13 at 1:11 pm

#123 Jim

Maybe you missed it, but Surrey is suffering from gentrification too. Go out to Whalley some time and see for yourself, just don’t go before 8am carrying more than 20$ on you or wear a nice suit! BTW, go see a presale there, no shortage of “lawn Asians”

#138 Intuitive Missus on 07.18.13 at 1:17 pm

From the Canso Funds Report on The Canadian Housing Market July 2013

“The Canadian housing race driver, “Jumping Jim” Flaherty, stepped on the gas and the overheating engine laboured to accelerate. As the car entered the last straightaway, smoke began to rise from the engine compartment. A few grinding noises and the screech
of abused metal didn’t distract Flaherty. He kept his foot to the floor, hoping to gain the momentum to coast to the finish line. As flames began to shoot from the engine, Flaherty shifted into neutral, hoping that he would coast over the finish line before the car ex-
ploded…”

OMG Garth, did you write this?

#139 Canadian Watchdog on 07.18.13 at 1:21 pm

Somehow according to MSM and TREB, this is not a warning sign of an abrupt crashing condo market: chart

Oh but average prices are up!!! Sure, while dollar volume heads for the zero lower bound. Now you can't sell.

#140 truthseeker on 07.18.13 at 2:05 pm

Real estate is still booming and will continue to do so as long as interest rates remain at historic low levels.

“The latest data from the Toronto Real Estate Board finds residential real estate prices in Canada’s largest city spiked 8.1 per cent, year over year, in the first half of July. The average price of a house in the Greater Toronto Area broke through the half-million-dollar mark, and now sits at $510,819.

On the national level, the Canadian Real Estate Association reports prices up 4.8 per cent in the year to June, with sales volumes down a small 0.6 per cent.”

Prices increase year/year do not indicate a ‘booming’ market. — Garth

#141 Jim on 07.18.13 at 2:11 pm

@Valleyrenter #138

You said: “Maybe you missed it, but Surrey is suffering from gentrification too. Go out to Whalley some time and see for yourself.”

That is absolutely correct, but it does not negate what I said as Surrey being the new go-to area for the poor.

We have to remember that Surrey is big in AREA. In area, it is about twice the size of the City of Vancouver. When people hear “Surrey” they often think of Whalley, but there is a lot more to Surrey than Whalley.

I agree with you that Whalley is gentrifying. In fact, it’s not even correct to call it Whalley anymore as it has been renamed Downtown Surrey. Whalley is where the skytrain is in Surrey, so yes it is gentrifying as condo towers are built adjacent to skytrain stations. I have also seen some trailer parks in Whalley get converted into condos. The poor people who lived in the trailer parks then have to move even further out in the Valley. I read a report recently that said poverty rates in Newton and Guildford have increased significantly in recent years. Those are the more distant, often forgot about areas of Surrey that you have to take a bus to from the skytrain–those are increasingly the go-to areas for the poor in Metro Vancouver. However, as a renter in Whalley originally from the City of Vancouver, I have to say, it is still a heck of a lot easier to find affordable pet-friendly rental housing in Whalley than compared to my old stomping grounds in City of Vancouver. Maybe we can say Whalley is in the process of gentrifying but it has not completely gentrified yet. There is still a significant amount of purpose-built rental housing in Whalley and the rents are cheaper than City of Vancouver and the landlords seem less picky. It’s still easier to rent in Whalley than City of Vancouver. Although I agree with you that Whalley is gentrifying. Poor people are just moving further out to Newton and Guildford–even Langley Centre is going ghetto now.

#142 Herb on 07.18.13 at 2:21 pm

#73 Donald Trump,

your suggestion brings to mind a priceless line in a favourite book, John Masters’ Bugles and a Tiger:

“This officer has the manners of an organ grinder and the morals of his monkey.”

#143 Donald Trump on 07.18.13 at 2:29 pm

Point grey plan unveiled

Proposal: diverted traffic from neighbourhood will impact macdonald area

http://www.theprovince.com/travel/Point+grey+plan+unveiled/8675190/story.html

QUOTE:

Point grey plan unveiled

A $6-million proposal released Wednesday suggested blocking off Point Grey Road from Macdonald to Alma streets, diverting an estimated 9,700 cars each day.
Photograph by: Mark Van Manen, PNG , The Province

Point Grey Road, home to Vancouver’s swankiest oceanfront mansions, is set to become a residents-only street as soon as this year.

A $6-million proposal released Wednesday suggested blocking off the road from Macdonald to Alma streets, diverting an estimated 9,700 cars each day.

“We’re converting that section of Point Grey Road into a local neighbourhood street with local access for residents,” confirmed the city’s director of transportation, Jerry Dobrovolny. The exorcism of cars from the elite street was one detail of the 68-page Seaside Greenway plan, a project penned by city staff and pegged as a means to connect cyclists from the Burrard Street Bridge to Jericho Beach. According to city estimates, 3,000 cyclists travel the route each day.

“I’m not sure all residents will benefit as much as a certain number of residents,” NPA Coun. George Affleck said, referring to those living on Point Grey.

The bulk of diverted cars will be pushed to Broadway, 16th, 12th and 4th avenues. On the residential strip of Macdonald between Point Grey and 4th, traffic is expected to spike from 10,000 cars per day to 17,000 cars per day.
===================================

You may or may not know…the Leftie Whackos on City of Vancouver have support from the TIDES foundation…funded by George Soros.

If you dig deep into these issues, environmentalism is the new vector for one World Gov’t

Gorbachev’s agenda
http://rense.com/general12/gobie.htm

IMHO, this latest bike plan in Vancouver will benefit and elite (aren’t roads the all -the -public’s property? ) and degrade another neighbourhood via re-directed traffic flow.

The planners have a good idea of what areas will be impacted. Then with higher traffic flow the area may be qualified as an arterial route. Arterial routes can then be rezoned to higher density, condos and towers.

This is what communists like, condos and other high density are great camouflage concentration camps.

#144 craig on 07.18.13 at 2:31 pm

Not exactly. Realtors manipulate data. Lazy media report it. You believe it. I feel worst for you. — Garth

Actually I don’t believe it, nor do I believe most data released from any source that has a vested interest or is impacted by that data.

I said the exact same thing about data flowing out of the US and you said – park the tinfoil hat.

Governments are accountable. Realtors, not so much. — Garth

#145 Donald Trump on 07.18.13 at 2:52 pm

Three-storey Mike Duffy balloon erected in Ottawa to highlight Senate’s ‘hot air’, launch referendum campaign

http://news.nationalpost.com/2013/07/18/three-storey-mike-duffy-balloon-erected-in-ottawa-to-highlight-senates-hot-air-launch-referendum-campaign/

#146 Ralph Cramdown on 07.18.13 at 3:13 pm

“A $6-million proposal released Wednesday suggested blocking off Point Grey Road from Macdonald to Alma streets, diverting an estimated 9,700 cars each day.”

Beg pardon? How will snookums and I get to the yacht club for luncheon?

#147 craig on 07.18.13 at 3:14 pm

#145 Donald Trump

How did that fat slob duffy ever get in the Senate in the first place.

At least the Big M was cool and had a great slap shot.

Time to abolish the whole useless concept!

Put the money saved to good use, like propping up real estate.

#148 Syd on 07.18.13 at 3:20 pm

Garth,

see this
http://www.theglobeandmail.com/report-on-business/top-business-stories/is-canada-losing-some-of-its-safe-haven-appeal/article13273045/

#149 :):( Ying Yang on 07.18.13 at 3:56 pm

#145 craig on 07.18.13 at 2:31 pm
Not exactly. Realtors manipulate data. Lazy media report it. You believe it. I feel worst for you. — Garth

Actually I don’t believe it, nor do I believe most data released from any source that has a vested interest or is impacted by that data.

I said the exact same thing about data flowing out of the US and you said – park the tinfoil hat.
Governments are accountable. Realtors, not so much. — Garth

What to belive, hummm. Your honor I rest my case.

http://www.mirror.co.uk/news/world-news/asiana-airlines-sue-ktvu-tv-over-2056462

#150 :):( Ying Yang on 07.18.13 at 4:02 pm

#54 Smoking Man on 07.17.13 at 9:55 pm

Few weeks a go, a kid knocks on my door, wants to sell his labour, cut grass, clean out garage, don’t what ever.

So that’s how it all starts. New Alpha dog smoking boys, clean windows and become smoking men. Not bad! A successful man is one who can lay a firm foundation with the bricks others have thrown at him!

#151 Canadian Watchdog on 07.18.13 at 4:03 pm

Implied Dollar Volume for GTA New High Rise and Condo Resales: Chart

Can you guess the next sequence for 2014?

Implied H1 Total Dollar Volume for GTA New High Rise/Condo Resales

$9,729,525,666 – 2011
$8,617,337,047 – 2012
$6,572,776,998 – 2013
$x,xxx,xxx,xxx – 2014

If you guessed sub-$5 billion, you may be correct. Alas, a big fat unseen catalyst for detached home prices appears as the central planned wealth effect for FTBs (future move-up buyers) now reverses into negative equity.

#152 Smartalox on 07.18.13 at 4:09 pm

Re: the Canso report.

I wonder how the credit-fueled nature of the over-heated real-estate markets plays into the stickiness of prices. If you have to bring a cheque to cover costs and balance owing at closing, – a deep and actual loss – does this make people more reluctant to cut prices to make a sale, compared with someone who has no debts, and who can cut $50 000 or $100 000 from their price as an unrealized gain.

I wonder if there is some psychology / gaming theory to back this up.

#153 Evangeline on 07.18.13 at 4:15 pm

that great picture reminded me of “which is the guilty dog?” — link below in case anyone hasn’t seen it

http://www.youtube.com/watch?v=_kLdO3EsECs

#154 Post Haste on 07.18.13 at 4:23 pm

As someone eluded to the stresses on Food Banks. I try to donate once a month to our local soup kitchen. The last drop off the attendant told me that donations are way down and they are desperate for any type of food. He said with a sad grin, you can only boil water so many ways.

Sad, we in Ontario get charged $600Million for a Hydro Plant that was shut down to keep the local government in power by buying votes – while sadly in this province some go hungry each night because there is no money to put some crackers on the table…we are a sad society in deed…

Be the guardians of your fellow man and you will be rewarded as such! Prices of homes going up or down is just an afterthought to the true struggles some endure.

#155 gladiator on 07.18.13 at 4:27 pm

@Pessimist: thank you. Your explanation now makes it perfectly clear. I multiplied 127 months (btwn 01/2003 and 07/2013) by the approximate average of 0.8% and got roughly 101%, close to the 100% I was trying to figure out.

@118 idiotic: learn how percentages work: you still couldn’t figure out a clear answer to my question.

#156 Blacksheep on 07.18.13 at 4:27 pm

“Governments are accountable ******* Garth”
——————————————————-
To whom?

Don’t like how the Right runs things, vote em out and bring in the Left.

Four years later….

Don’t like how the Left runs things, vote em out and bring in the Right.

It’s just a big game of Ring around the Rosie.

With no public funding of elections, there is little incentive for representatives that become beholden to lobbyist groups to act in anyone’s interest but their own.

#157 Evangeline on 07.18.13 at 4:32 pm

#79
totally agree with you about the header

The pack howled. I listened. It has been modified. More changes to come. — Garth

#158 Holy Crap Where's The Tylenol on 07.18.13 at 4:41 pm

Well that’s it Detroit just declared bankruptcy!

#159 jess on 07.18.13 at 4:41 pm

Detroit, Michigan, which owes at least $15bn (£10bn), becomes the largest US city to file for bankruptcy

#160 Steven on 07.18.13 at 4:44 pm

The graph pretty well shows 2009 as the market peak for real estate . Funny how hind sight is 20/20 but there is only one way for the market to go in terms of sales volume and price and that is down and I am expecting a 90% plus wipe out for prices. The residential construction industry will be cruelly decimated and realtors will be hard pressed to survive.
The price depression will last at least a generation and maybe more. The longer the market resists writing down prices relative to the single earnings of the houseless the longer it will take for recovery and the lower the birth rate is going to be. The social and economic fall out from the post WW2 real estate mania and its collapse will be painfull, expensive in terms of losses and will inflict a psychological trauma on people that will last a long time. Just like what happened with the stock market between 1929 and the 1950s or even the 1960s. Real estate as an investment will scare the hell out of people. 2009 is the 1929 for real estate.
I know, it has scared the hell out of me since the 1970s.

#161 brainsail on 07.18.13 at 4:56 pm

I liked the header because the pictures represented some of the nutcases (A term describing a person who has totally lost their grip on reality.) that respond to this blog!

#162 craig on 07.18.13 at 4:59 pm

Great recovery !!!

Who’s next?

Detroit filed for bankruptcy, becoming the nation’s largest public sector bankruptcy.

The move could slash pension benefits to city workers and retirees, and leave investors holding the city’s debt with only pennies on the dollar

#163 Evangeline on 07.18.13 at 5:06 pm

“The pack howled. I listened. It has been modified. More changes to come. — Garth”

Thank you for being such a responsive blog host. :)

As I read the thread backwards I came across all the other comments about the banner. I like the new much, much more.

#164 not 1st on 07.18.13 at 5:07 pm

There you go Mr. Turner. Sovereign debt coming home to roost.

http://www.canoe.ca/Canoe/Money/News/2013/07/17/20981061.html

And about a dozen other jurisdictions right behind it. Oh there will be a big federal bailout I am sure. Print more to cover the stuff you printed before.

The U.S. is about to enter the big experiment and no country has come out of it whole yet, not in 2000 years of civilization. Its not different there.

#165 not 1st on 07.18.13 at 5:08 pm

oops bad link:

http://www.businessinsider.com/detroit-likely-to-file-for-bankruptcy-2013-7

#166 Freedom 85 on 07.18.13 at 5:20 pm

Garth,

Our society is rife with this type of leader. They are everywhere, in every aspect of leadership and role. They are a reflection of who we are and who we’ve become as a society.

I’m afraid it does not end well…

#167 Macrath on 07.18.13 at 5:20 pm

Is Garth on H, and his peckerettes Enemies of Canada list ?

http://niagaraatlarge.com/2013/07/18/in-harperland-any-one-of-us-at-any-time-we-stand-up-as-citizens-and-question-the-government-could-be-listed-as-enemies-of-canada/#more-10439

#168 Piccaso on 07.18.13 at 5:27 pm

Detroit files biggest-ever U.S. municipal bankruptcy

http://ca.finance.yahoo.com/news/detroit-preparing-bankruptcy-filing-early-friday-report-191140221.html

#169 craig on 07.18.13 at 5:28 pm

Michigan has in place a Right-to-work law.

How’s that working out?

What happened to all the union jobs paying $32 an hour to push a broom?

I’ll tell you; the floors of the buildings they swept are empty, the jobs were shipped overseas for a $1 an hour and the brooms are now made in China.

But those Wall St earnings, that people keep cheering about, keep flowing in.

God bless America.

#170 EB on 07.18.13 at 5:35 pm

#144 Donald Trump on 07.18.13 at 2:29 pm

Even without the Illuminati and the Leftists and the Lizard Aliens agendas, I’m still convinced that Vancouver’s radical mayor is determined to actively and deliberately make traffic worse in the city, in an effort to make people give up their cars.

The rank madness of creating bicycle lanes for a few hundred riders to the detriment of hundreds of thousands beggars belief. Then again it’s a lot cheaper than doing something about actually increasing public transport options.

#171 Devore on 07.18.13 at 5:41 pm

The banner was disturbing. I imagine the reactions fell along the same lines as the individual’s feelings about clowns. Some thing they’re funny, some think they’re creepy.

#172 observer on 07.18.13 at 5:49 pm

#14 pinstripe on 07.17.13 at 8:05 pm

Yes Pin Stripe, I took hope interest rates stay low.

Therefore my american dollars will go through the roof.
I’m sure they will contain inflation by keeping interest rates low.

I also hope they keep rates low so I can bet against Canada and Hedge it to the american dollar.

gee I think that’s what the hedge fund managers did to greece. Oh yes they did, and that is why it went for a free fall over night.

Bottom, if you don’t understand the tightly coupled global financial system we live and and believe in Voodo Economics then it will stay low forever

Y

#173 valleyrenter on 07.18.13 at 5:58 pm

#142 Jim

Agreed. It’s like Williams said in Enter the Dragon “Ghettoes are the same all over the world. They stink”

#174 Mark W on 07.18.13 at 6:08 pm

The $10,000 cheque thing in Winnipeg is in the Exchange District.

The old part of downtown that was part of Winnipeg’s glory days 100+ years ago.

Yet the problem with this is that it is in one of Winnipeg’s (what I call) “10/10/10″ neighborhoods.

This means that within a ten minute walk radius of your home, that there have been ten murders, within the last ten years.

Hence 10/10/10.

Do not go outside after dark, and even in the daytime best to no walk down the street alone, especially if you are a woman.

Central Winnipeg and the North End have the highest crime and murder rates in the city. Among the highest in Canada.

If you can afford to buy a condo here then you can afford to live in a middle class house elsewhere in the city where it is safe.

Yet get in your car and drive for ten minutes and you are in a middle class suburb.

#175 Nemesis on 07.18.13 at 6:10 pm

@Ralph:#147

No worries! Thurston Howell III would be all too happy to GolfCart you&Snookums over to RVYC’s SaloonLounge… just as soon he finishes his refresher on ModernMonetaryTheory.

http://youtu.be/YlZOSGZnDtM

Please do extend my HeartyCompliments to the Commodore.

#176 broadway skytrain on 07.18.13 at 6:13 pm

172 EB on 07.18.13 at 5:35 pm
Even without the Illuminati and the Leftists and the Lizard Aliens agendas, I’m still convinced that Vancouver’s radical mayor is determined to actively and deliberately make traffic worse in the city, in an effort to make people give up their cars.
————————————————————
cars used to flow freely into dt from the viaduct.
since one lane was removed they sit there and idle excessively while waiting for the lights, spewing fumes into the surrounding condos.

#177 MachoManRandySavage on 07.18.13 at 6:14 pm

Good job on the new banner, Gartho! It’s classy and doesn’t distract from the rest of your blog.

#178 Timing is Everything on 07.18.13 at 6:17 pm

#150 :):( Ying Yang

http://tinyurl.com/lc3qfob

#179 Bill Gable on 07.18.13 at 6:19 pm

The city of Detroit filed the largest municipal bankruptcy case in U.S. history Thursday afternoon, culminating a decades-long slide that transformed the nation’s iconic industrial town into a model of urban decline crippled by population loss, a dwindling tax base and financial problems.

The 16-page petition was filed in U.S. Bankruptcy Court in Detroit.

>> Just like people – spend more than you take in, you are done.

This was not unexpected.

LINK: http://tinyurl.com/keeuzlr

#180 Mister Obvious on 07.18.13 at 6:20 pm

#128 Disappointed

Re Isaac Newton:

It is sobering to think that a man who was quite probably the most rational and accomplished scientist the world has ever produced could be sucked in by a Ponzi scheme.

What hope is there then, in a world of greater fools?

#181 Smoking Man on 07.18.13 at 6:24 pm

I liked the first banner, the heathen had a life story, they all started out as Shiney new nice smelling babys.

Then life happens, I was going to speculate on what happened to each one of them.

Pics are gone, can’t don’t now.

Bummer

#182 Smoking Man on 07.18.13 at 6:25 pm

This dumb auto correct always changes do to don’t.

Complete opposites in meaning, that’s freaky..

#183 CalgaryFloodBoom on 07.18.13 at 6:31 pm

Garth Vs. Bob update #3

Garth 173*
Bob 4**

*Accumulated comments on respective current blogs
**One of Bob’ 4 comments is his own reply to himself since he counts his own replies.

Have to declare a TKO for Garth in this epic battle. (Number of reader comments equated with relevance)

Since this is hardly a fair fight I’ll make this the last update, maybe give Bob a chance to walk away with some dignity…

Take the offer Bob!

And finally…

Here’s the link to bob Truman’s site, I know he’s been desperate for it to be added here and he sure could use the company!

http://bobsrealestateblog.com/

#184 Old Man on 07.18.13 at 6:32 pm

The latest fashion for banners on the net shows a guillotine in action mode with politicians lined up.

#185 a prairie dawg on 07.18.13 at 6:45 pm

#163 brainsail

I liked the header because the pictures represented some of the nutcases that respond to this blog!

– – –

Second that. It was fun matching the persona’s on this blog to those faces. It was like a human version of that picture of the Labs, from a couple days ago. And there seems to be a lot of meth labs here lately too. lol

#186 craig on 07.18.13 at 6:45 pm

List of Bankruptcy Filings Since January 2010

All Municipal Bankruptcy Filings: 36

City and Locality Bankruptcy Filings (8):
— City of Detroit
— City of San Bernardino, Calif.
— Town of Mammoth Lakes, Calf.
— City of Stockton, Calif.
— Jefferson County, Ala.
— City of Harrisburg, Pa.
— City of Central Falls, R.I.
— Boise County, Idaho

And CA has 10 more cities on the brink.

San Jose, Oakland, etc….

Not looking good.

http://www.usatoday.com/story/news/nation/2013/05/15/ten-california-cities-in-distress/2076217/

Most US cities have municipally-run pension plans for civic employees, dissimilar from our provincially-organized plans. Bankruptcy allows them to reopen those plans, reduce benefits to retirees and spare taxpayers the cost of meeting future obligations. Don’t get too smug. — Garth

#187 Marginal on 07.18.13 at 7:16 pm

#169 Macrath
You raise an interesting point. Our blog host may well be on an “enemies list”; I’m sure he wouldn’t be welcome at so called “public” election rallies for the Conservative politicians…..you know the ones where they take your name and vet your background (Facebook, etc.) to make sure you are allowed into the public meeting. What about all of us who post on this essentially non political blog? Since the majority of posters expressing a political opinion tend to be right-of-centre, it would be ironic — from a truly doomer paranoid perspective — if all posters were tarred with the same brush.
By the way, thank you for the link.

#188 a prairie dawg on 07.18.13 at 7:21 pm

Well, I cannot remember a time when deception was so everywhere, with so few in positions of influence seeming to care.

There will be consequences.

– – –

It’s like a perfect storm of hypocrisy.

First, a government who promised openness and accountability, and yet doing the complete opposite. Who also promised to lower spending, while also doing the opposite. Who now has a serious challenger politically to worry about, between now and the next election. The last thing they want is for the wheels to fall off this wagon too early. If the economy crumbles before the next election, they could easily be doomed back to opposition status. Oh the horror!

Then you have banks desperate for even bigger profits who are more than willing to facilitate this gas bag as long as someone else guarantees 95% of the loans. Clear sailing for them.

Plus we now have a media too lazy or understaffed to go out and find and research real news themselves anymore. So it’s become easier to take an industries word for everything, because the advertising dollars pushing their agendas, are the only thing keeping traditional media economically afloat in the information age.

And finally you have those beloved realtors, who are part of an industry where NO ONE gets paid ANY wages at all, if houses stop selling. So it’s pedal to the metal and kick in the Frankenumbers when needed.

Perfect storm indeed. But Hurricane Economy will leave a trail in it’s wake that won’t soon be forgotten.