Manipulation

CAT

Thirty years ago she got into real estate. “I became a Realtor because I enjoyed helping people find a home they could afford, and over the years I’ve introduced hundreds of people to the concept of owning income property and helped them to find profitable investments,” she says. But no more.

“Now I am discouraged with my chosen line of work as the field has attracted a slew of smarmy money-hungry types who couldn’t give a hoot for anything other than the next commission. I was particularly discouraged to attend a compulsory realtor seminar, where a lawyer taught the class how to attract and deal with multiple offers to get the highest price over list. The result of the government’s emergency interest rates and the current cohort of realtors is property prices which have reached the stratosphere.”

Susan’s note reached me the same day CREA pushed its latest numbers onto the media, creating the meme of a vibrant real estate market. Sales in August jumped 11.1% from the same month last year, the realtors said, and prices are ahead 8.4%. Unknown, though, is the number of sold houses which were counted two or three times, as listings were double- and triple-listed on various boards, as I showed you last week.

Also, are the headline numbers even accurate? Are they correct? Would people reading them be lulled into believing it’s okay to buy a house at an inflated level, because the market’s strongly rising? If so, would they be misled?

It’s hard to tell. CREA said on Monday, “National home sales rose 2.8% from July to August.” But this is apparently untrue. Here are the realtor’s monthly reports for June, July and August. Read each and you’ll be able to determine the total number of monthly sales across Canada. In July 44,797 properties changed hands. In August, deals totaled 40,315. Yup, that’s a 10% decline – not a 2.8% increase. The magnitude of the ruse is significant Not a rounding error, or a difference of interpretation, but an apparent falsehood.

But, the idle realtors sulking on this pathetic blog cry, sales last month were w-a-y above those of a year earlier, explain that away, Bilious Blog Boy.

Sure. Last August sucked. Activity collapsed 9% in the wake of F’s blowing up of 30-year mortgages. In fact, it was the worst performance in almost a year. Even CREA’s chief economist said so at the time: “August’s sales figures will no doubt provide comfort to policymakers, providing the first clear indication that the recent changes to mortgage regulations aimed at cooling the market are working as intended.”

So why are prices higher in 2013 when sales are actually lower than a year ago? That’s easy. More debt. Money’s cheap and the housing-industrial complex has persuaded enough people (with news like today’s) that it’s safe to buy something even when it’s the most expensive ever. Keeping this up in the teeth of lousy economic fundamentals has been heroic. Monthly stats have been silently revised. Houses counted twice. Performance numbers fabricated. Rosy forecasts floated.

Add in Susan’s professional observations – mandatory seminars on how to create bidding wars and commission-obsessed realtors – and that’s all you need to know about the market today. It may not be rigged, but the poor buyers are seriously diddled.

Until everyone reads this blog (I have a dream…) expect this all to continue, until it stops. Of course, the longer it goes on, the more painful will be the revision to the mean. The elfin deity knows that. It’s why F intervened in the manic housing market (he helped to create) four times, trying to cool the sucker off. Every time he does, the real estate cartel just works harder to obfuscate reality – which is why you should expect a fifth, and final, federal intervention.

Now here’s Amal. He’s in his mid-thirties, and feel free to hate him. But his comments to me in an email this morning, as he thought about Toronto real estate, are germane:

Garth: I wanted to commend you for being what seems at times the only rationale lone voice in the housing market debate.  I have been working for over 10 years now in a well-paid job since graduation.  I make over $400K a year in the finance industry, have saved up $600K towards a down payment, but still feel ‘poor’ when it comes to buying a house. I know that wealth is relative and that I am in a very fortunate position. But I struggle to think how the average Canadian can afford a decent house in a good neighbourhood these days. I think about my parents and the level of incomes they earn; their house has more than doubled in valued since they bought it 20 years ago. But they would not be able to afford the same house in the same neighbourhood with the same job today.

The rich little whiner’s absolutely right. Seventy per cent of Canadians own houses, but I’d bet only a fraction of them could actually buy the homes they occupy. Prices have outstripped income gains or economic growth, and are supported now only by a foundation of debt. It’s illusory equity. That people would continue to borrow is epic validation realtors are more influential than me.

Now there’s a shock.

162 comments ↓

#1 to taper or not, that is the? on 09.16.13 at 8:33 pm

Are we still on for Fed tapering?

#2 Randy on 09.16.13 at 8:38 pm

My cat thinks he’s Batman….
https://www.facebook.com/photo.php?fbid=10151867039222629&set=p.10151867039222629&type=1&theater

#3 Max Jones on 09.16.13 at 8:38 pm

Big changes are coming for the Government of Alberta Management Employee Pension Plan.

Basically an existing manager who works 35 years and had a best 5 years of $100,000 per year will receive a pension of $70,000 per year.

A new manager hired January 4, 2016 (a Monday) will receive a pension of only $49,000 per year. Huh? That’s a 30% cut. Fortunately she will now be allowed to work more than 35 years to make up for the shortfall. Just 50 years of servitude will restore what she has lost.

And sadly the contribution rate is going up as well. So a smaller monthly pay cheque during her working life, and a smaller pension at the end of it. There’s the “Alberta Advantage”.

http://pensionsustainability.alberta.ca/

#4 Jonassss on 09.16.13 at 8:38 pm

FIRSTTTTTTTTTTTTTTT

Stop it. I have your IP and will let Obama know. — Garth

#5 visorman30 on 09.16.13 at 8:43 pm

Your point about last year being very low brings up the concept of “regression to the mean”. An idea that those with motivated reasoning conveniently forget.

#6 Paul on 09.16.13 at 8:43 pm

Can not do anything about the ethical standards of RE agents but when the crash comes people will be more in favour of regulated the RE industry.

#7 Liquid on 09.16.13 at 8:46 pm

I think home buyers are starting to get the message. I was planning to buy a rental property this year but with mortgage rates on the rise and prices still not falling, I’ve now decided to wait and see at least until next year. Cheap money can only go so far. All bubbles have to either pop, deflate, or stagnate until fundamentals eventually catch up. Congrats to Susan for being in the industry for so long. With 30 years as a realtor in the Canadian market I think she’d be able to retire quite comfortably if she planned her finances right :)

#8 45north on 09.16.13 at 8:52 pm

It’s why Flaherty intervened in the manic housing market four times, trying to cool the sucker off. Every time he does, the real estate cartel just works harder to obfuscate reality – which is why you should expect a fifth, and final, federal intervention.

that got my attention

#9 T5_INCOME on 09.16.13 at 8:56 pm

“Illusory Equity”

So elegant.

#10 Justyn Bieber on 09.16.13 at 9:05 pm

Garth, I make $40 million a year but still feel poor trying to buy a house in Beverly Hills. I mean Mariah Carey was looking at a house worth $150 million and she cannot even sing. Where’s the justice? It’s just not fair.

I can’t even imagine what some whiny loser making 400K in Toronto feels like…

#11 Victoria Real Estate Update on 09.16.13 at 9:08 pm

#7 Liquid

All housing bubbles burst and correct back to where they started. This always involves a big price correction or crash. There had never been an exception to this rule.

Canada’s correction or crash will be no different than any other national housing bubble correction or crash.

#12 retired Boomer - WI on 09.16.13 at 9:08 pm

#3 MAX JANES

Welcome to the real world 2.0 Did you notice the U.S. Fed had revamped their Federal employees retirement plan in 1987? There is a further bill to trim the pension supplements, and increase the pension costs (with no increase in benefits) pending in congress.

Even the US Congress has had their pensions cut for newer members. Teachers, university professors firemen, police virtually every civil servant has had their retirement, or healthcare, or both changed or is facing a pending change.

The basic reason, is they are living beyond the actuarial mean of the initial design and the “systems” can no longer afford it. Sorry about that, if you would have croaked sooner…. well, at least that is the honest answer.

We can ook also at the elimination of the defined benefit pension plans a lot of private entities used to offer. Today, what like 12% still have a fully funded defined benefit plan, not a defined contribution plan the 401K or 403b as they’re known here in the US.

Workers, even business owners are expected to set aside a portion of their earnings for their future retirement use.
Actually, these plans should be most properly called “thrift” plans, but have morphed into the retirement plans most boomers and 88% of future generations will fall into.
Yes, there is still the old age pension plan known as “social security” here in the US. Full benefits come at 66 for anyone retiring in 2013, though you can retire as early as 62 with a 255 loss or as late as 70 with a 32% benefit bonus -you’re freedom of choice.

Retirement 2013 style is NOT what your parents enjoyed, but then nothing is ever going to be “quite what your parents enjoyed.”

So, are you taking the maximum advantages of what your employer offers for YOUR retirement? Are you taking advantage of tax advantaged savings programs the government offers for YOUR retirement? Hey, it is your future, and it will be here before you even realize .

#13 HD on 09.16.13 at 9:12 pm

#209 Victor V on 09.16.13 at 8:13 pm

#201 HD
The diamond industry suggests men use 2 months salary as a guideline for this purchase.
http://science.howstuffworks.com/environmental/earth/geology/diamond5.htm

Thanks for your reply.

From the article you sent:

¬

convincing every woman that she should r¬eceive a diamond ring from her fiancé and c¬onvincing each groom-to-be to pay “two-months salary” for that ring to show how much his love is worth

So this is exercise would to show how much your love is worth?

Best,

HD

#14 Mister Obvious on 09.16.13 at 9:13 pm

It’s a great source of amazement to me people can’t believe the same tactics used to sell automobiles, cosmetics, lottery tickets, kitchen cabinets, sporting equipment or anything else under the sun don’t also find heavy application in the sale of real estate.

A sale is a sale in an unregulated industry. (Hint: residential real estate is one of those.)

#15 dienekes on 09.16.13 at 9:15 pm

What can F do to control this thing?
10% down payment?
What effect on long term closed mortgages would a 1% in prime do?
Will the fed taper less than 10 or more than 10 billion on Wednesday?

#16 Devore on 09.16.13 at 9:23 pm

Seventy per cent of Canadians own houses, but I’d bet only a fraction of them could actually buy the homes they occupy. Prices have outstripped income gains or economic growth, and are supported now only by a foundation of debt.

So how did so many of them afford to buy them in the first place? The only asset even approaching the level of overvaluation of real estate is… other real estate. Asset-based lending, baby.

This will end… poorly.

#17 NoName on 09.16.13 at 9:24 pm

interesting read

http://www.project-syndicate.org/commentary/the-economic-benefits-of-measuring-water-risk-by-andrew-steer

“The costs are mounting. Deutsche Bank Securities estimates that the recent US drought, which affected nearly two-thirds of the country’s lower 48 states, will reduce GDP growth by approximately one percentage point. Climate change, population growth, and other factors are driving up the risks. Twenty percent of global GDP already is produced in water-scarce areas. According to the International Food Policy Research Institute (IFPRI), in the absence of more sustainable water management, the share could rise to 45% by 2050, placing a significant portion of global economic output at risk.”

World first invisible building to be completed in 2014
(S Korea)

http://www.theglobeandmail.com/news/world/worlds-first-invisible-building-to-be-completed-by-2014/article14333981/

#18 Babblemaster on 09.16.13 at 9:25 pm

“That people would continue to borrow is epic validation realtors are more influential than me.” – Garth

————————————————

Indeed they are, because they sell the sizzle. You just sell tough marinating steak. Also, nobody realizes how manipulated the markets are and neither do they care. Sure, by every rational measure houses are overpriced but, they have been so for a long time and have been getting more so as time goes on. So, when will they readjust? When will this overheated housing market go up in flames? There’s plenty of fuel. Plenty of tinder. And certainly plenty of realtor supplied oxygen. All that’s needed is a spark. What will it be?

#19 Albert on 09.16.13 at 9:25 pm

I suppose the only way to pop the housing bubble is the interest rate raising to 7%

I wonder when will that be…

any thoughts?

#20 Son of Ponzi on 09.16.13 at 9:41 pm

Focussed on cat pictures lately.
Get your metaphor.
Cats have nine lives, just like RE in Vancouver.
But now we’re down to the dead cat bounce.
From now on it’s all downhill and fast.

#21 X on 09.16.13 at 9:41 pm

I would love to see F intervene and put the RE cartels in their place. The propaganda they put out needs to be controlled.

Increasing minimum downpayments would control the borrowing aspect of the gov’t concerns.

Strict rules governing what the RE boards release and how they compare monthly and yearly stats should be made. The numbers they put out have only the RE boards best interests in mind, not the publics.

Didn’t Greenspan assume that the banks were going to lend prudently when he kept rates low. The RE board is going to say it wasn’t their fault so many Canadians are indebted, they didn’t have cheap money and didn’t lend them the money either.

F should make a point to show the public how the RE boards have been intentionally misleading the public.

#22 Need Sleep on 09.16.13 at 9:45 pm

This morning my co-workers and I were discussing how ridiculous the housing market still is in Winnipeg. One guy mentioned that he wants to buy a larger house but he wouldn’t even qualify salary-wise to buy his existing house now that it’s valued at 2.5x what he originally paid for it.

That said, every house that sold in this neighborhood recently has sold for less than asking. Here’s to hoping that more buyers start reading this blog.

#23 Hh on 09.16.13 at 9:47 pm

So why are prices higher in 2013 when sales are actually lower than a year ago? That’s easy. More debt…………..

But like you said last week … It is about jobs. Screw the debt.

#24 It's your own fault on 09.16.13 at 9:49 pm

When the house of cards collapses there will be government intervention to help those in arrears or foreclosure. Remember that’s what government’s for. There is no risk to take on as much debt as possible SO LONG AS everyone else is doing it.

#25 CrowdedElevatorfartz on 09.16.13 at 9:52 pm

@#10 Justyn Beiber

Your right about Mariah’s voice but she still looks waaaaaaay better than you when she loses her top.
Time to “bulk up” brudda. You look like a Pez dispenser in baggy jeans.

#26 Editor on 09.16.13 at 9:53 pm

From theory to application: In the GTA ‘burbs, more MLS listings look staged. Are people actually trying to make their houses look nice to sell them? Further, more rental listings are looking and sounding just like sales listings — perhaps because they recently were. In rentals, new ‘perks’ are appearing: appliances named by brand; walls ‘freshly painted.’ You mean someone has to do some work to sell their product?

#27 HD on 09.16.13 at 9:53 pm

@ #22 Shawn on 09.16.13 at 9:43 pm

Thanks

Best,

HD

#28 Spiltbongwater on 09.16.13 at 10:03 pm

Stop it. I have your IP and will let Obama know. — Garth

The Muslim Kenyan born President Obama already knows everything Jonassss has said on the interwebs. What is made of it is another thing. Oh hi there NSA.

#29 Frustrated on 09.16.13 at 10:09 pm

I would like a fifth and final federal intervention, but do you think they would ?

#30 Donald Trump on 09.16.13 at 10:12 pm

As a world renowned Know -it- All, ……bent -nail options/derivate broker….. political poseur …..yada yada yada..I am very upset re: this blogs lack of handicapped parking and non braille supplement to soft porn and animals.

Playboy and PETA….be ready…emails and FAXES !

#31 Sebee on 09.16.13 at 10:19 pm

…you should expect a fifth, and final, federal intervention.

Funny…fifth Die Hard is what it took to kill the franchise, apparently.

#32 Liquid on 09.16.13 at 10:22 pm

@ #11 Victoria Real Estate Update
According to CREA, during the 1980s Canadian house prices more than doubled. Many would have called it a bubble at the time :) Yet despite a decade long run of almost double digit annual price gains on average, we didn’t see a crash. Instead, prices simply remained relatively flat during the following decade (1990s) until economic fundamentals caught up, and people made enough income to service higher debts which once again started to push home prices higher starting in the 2000s. See the following chart for details.
http://wp.me/a2baTT-1A5
For all we know there probably will be a real estate crash in Canada in the upcoming years (o_O) but for the sake of the economy I hope it doesn’t come to that (^_^)

#33 Somking Man on 09.16.13 at 10:23 pm

Lets face it young people are screwd unless they got a dad like me.

University marking the bell curve, putting kids in debt for a wirthless obidiance certificate. if you get one and pops or mom has no connections. screwed.
or if you had a brain.

Learn to sell Smoking man style.

#34 Somking Man on 09.16.13 at 10:27 pm

what make boomers feel successful

beamer, big house, and offspring with certificates

me , a kid that knows how to hunt and fish for loot.

#35 Rabbit One on 09.16.13 at 10:37 pm

If you are securities licenced, you cannot show portfolio performance like this way:

one day – compare to last month (up, but down YTD),

the other day – compare to year before (up, but down from last month)

another time – show YTD (up, but down from month ago and a year ago).

How this is allowed in R/E industries and media?

#36 Somking Man on 09.16.13 at 10:43 pm

Why do you guys bust up realtors, they are just dumber versions of smoking man.

Its the herd that priced you out of the market.

Is it a realtors fault schools dont teach, having dumb virgins paying crazy prices.

Nope.

That teacher you brought apples too did this to you bubble heads.

they dummyed them down

#37 jimmy on 09.16.13 at 11:01 pm

#10 Justyn Bieber
Good one dude!

What does CIR stand for?

a) Calgary Independent Realty
b) Cabbies in Realestate
c) all of the above

#38 T.O. Bubble Boy on 09.16.13 at 11:02 pm

The rich little whiner’s absolutely right. Seventy per cent of Canadians own houses, but I’d bet only a fraction of them could actually buy the homes they occupy. Prices have outstripped income gains or economic growth, and are supported now only by a foundation of debt. It’s illusory equity. That people would continue to borrow is epic validation realtors are more influential than me.

I think that even the realtors are starting to realise that prices have outpaced reality.

Was talking to a realtor on the weekend at an Open House. Until we mentioned that we lived in the neighbourhood already, there was this vibe of “are you SURE you can afford this?”.

This is pretty common when my wife and I happen to walk through a house in North Toronto, as I believe the realtors are expecting only offshore money or rich boomers to be buying at this point.

#39 EJ on 09.16.13 at 11:03 pm

Go on Garth, don’t pull punches. Say it like it is; it’s a rigged market.

It’s rigged and manipulated from so many angles: government monetary policy, CMHC, banks, city/municipal governments, developers, real estate cabal, individual agents, and many others. To say there’s a “free market” in housing is grossly naive.

I’ll all geared to fleece you of the highest possible amount. All those above are getting a bigger and bigger cut and us average folks are giving it to them willingly instead of standing up and saying “I’m mad as hell and I’m not going to take it any longer!”

#40 Cory on 09.16.13 at 11:11 pm

anyone who listens to a realtors advice deserves to go bankrupt. Would you take advice from a realtor who took a weekend course on how to screw people, can barely spell, and can barely tie their own shoes without their mommies help?

#41 T.O RENTER on 09.16.13 at 11:11 pm

#4 GT…….a little humour.

Unfortunately there are many snakes in RE biz.
They don’t get paid to explain the real lay of the land
and talk them out of buying! It would be free advice worth thousands in the long run.

#42 dosouth on 09.16.13 at 11:24 pm

Hey, maybe Nanaimo, B.C. is bucking the trend of fudging… then maybe not? You tell me..

Housing starts see dip with rental surplus

#43 45north on 09.16.13 at 11:43 pm

It’s your own fault: When the house of cards collapses there will be government intervention to help those in arrears or foreclosure.

well there will be government intervention

home affordable modification program is an example of (US) government intervention whose purpose is to help.

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

it’s not a secret program, what I’m suggesting is to have it in mind when similar programs are proposed in Canada.

My plan would pay a homeowner $1000/month after he leaves his house because of a bank action. In many cases the bank doesn’t foreclose it executes “power of sale” which means that the homeowner still owns the house, he pays the taxes and if someone trips on the sidewalk he gets sued not the bank. Power of sale means the bank can sell it while he still owns it. So my plan needs to be worded carefully but it’s still a good plan.

#44 Mark on 09.16.13 at 11:46 pm

http://www.vancouversun.com/business/real-estate/home+sales+continue+surge/8919567/story.html?google_editors_picks=true

The Vancouver Sun sez ….

“B.C. home sales continue to surge.
The B.C. Real Estate association recorded a 29-per-cent increase in home sales across the province in August.”

#45 JimH on 09.17.13 at 12:10 am

#41 EJ
“Go on Garth, don’t pull punches. Say it like it is; it’s a rigged market… It’s rigged and manipulated from so many angles: government monetary policy, CMHC, banks, city/municipal governments, developers, real estate cabal, individual agents, and many others. To say there’s a “free market” in housing is grossly naive…”
=================================
EJ, I deeply sympathize with you and your point of view.

Yes, all markets are, to a greater and lesser degree, “rigged”.

But that should not deter us from both protesting that fact and also profiting from it.

Years ago, I heard Warren Buffet say, “The markets are always throwing pitches at you; fast balls, curve balls, sliders, floaters, knuckle balls and even the occasional spit-ball! But you know, you don’t have to swing at each and every pitch! That is what makes markets “free”. There is no “three strikes and you’re out” rule. They can keep pitching and pitching and pitching, but you never ever actually have to take the bait and swing! There is no limit on how long you can patiently wait for the perfect pitch!”

He was right, of course; and that is the great power of free markets, regulated to the least restrictive degree in order to benefit the commonweal.

If you’re patient and always are on the lookout for opportunities, they will find you.

#46 Mike on 09.17.13 at 12:11 am

@ #3 Max Jones…yeah, its a kick in the balls for sure, but it goes well with our current salary freeze, 10% mgmt. reduction and classification review….all while they push that “reaching our full potential” nonsense at god knows what cost to the taxpayer.

#47 Realist on 09.17.13 at 12:30 am

Interesting article on affordability. Just a few comments on house prices in major Canadian cities. I have had the opportunity to work in many places small towns and large cities in Canada plus overseas.
– The major cities in Canada i.e. Edmonton/Calgary (my experience as lived in both) have seen exponential price increases since 2000. It still surprises me that some towns in AB with lots of wealth (65-100k+ incomes) from forestry/oil and there are about 10 i.e. Rocky Mountain House, Edson, Cold Lake, Slave Lake, Drayton Valley, High Prairie, Peace River. These towns although have increased a lot you can still find many houses for approx. half than the cities i.e. 250 vs 400-550K on average, not the case in the late 90’s in comparison. As some of these towns were more expensive than the average house price in the cities in late 90’s. Just my views as lived in one of those towns for 10 years. Although realize lots of executives, and higher earners in the cities but still big bucks in those small towns although a younger person i.e 20’s to 30’s vs 40-50’s. The point being is a comparible house worth that much more in a major center in Canada in comparison to a smaller town with high incomes. I realize a big city today will always be worth more but twice as much?
– A lot of these 600k to 1 million dollar houses in Edmonton/Calgary are owned by many people in their 60’s+ as know many, plus professional people. Seems to be selling and buying in this age group as they come across massive price appreciation especially since the mid 90’s. I know one person selling a house for 700 k like it is candy in Edmonton and you would have to look hard to find that in those small towns.
– I was in the States for a year and been to many of the major cities especially on the east coast and still amazes me of some of the prices in those cities i.e. Chicago. Similar costs I found in terms of daily living but the house prices were like Garth mentions up to half ours in Canada.
– Still amazes me on the price people are selling their houses in Canada and realize it was not long ago a house in Edmonton was 140K ish in 2000 now close to 375Plus today. Interesting times for sure going forward in Canada. Just a mumble jumble comments but stuff you see travelling/working around the world.

#48 Notta Sheeple on 09.17.13 at 12:34 am

“…. Seventy per cent of Canadians own houses…”
===========================

By 70% ‘home ownership’, are we talking only SFH’s?

Or does that number include all vertically-stacked, glass-fronted rabbit cages with commanding views of adjacent, vertically-stacked, glass-fronted rabbit cages.

Just askin….

#49 JimH on 09.17.13 at 12:44 am

#173 Koshy Alex on 09.16.13 at 12:28 pm
“I do get out… I work for a Canadian Bank” (paraphrase)
=====================================
Hope I didn’t offend. I have the deepest sympathies for any and all who spend their days toiling in the brightly lit and therefore altogether deceptive dungeons of Canadian, American, European, African, Asian and more especially, Chinese banks.

(I still say that you don’t get out enough… but that’s entirely up to you…)

I wish you well. Time will lessen the influence of your authoritarian banking masters. Your future therefor looks bright! Good luck!

#50 young & foolish on 09.17.13 at 12:48 am

OMG … Garth is right …. we’re running out of buyers!

#51 not 1st on 09.17.13 at 12:49 am

Garth, on the Globe and Mail homepage poll yesterday, more than 50% of respondents said they have no debt whatsoever. Are you sure your stats are right?

Seriously? — Garth

#52 JimH on 09.17.13 at 12:49 am

#47 Mark
“The Vancouver Sun sez ….
“B.C. home sales continue to surge.
The B.C. Real Estate association recorded a 29-per-cent increase in home sales across the province in August.”
====================================
Yep! Some surge!
http://www.chpc.biz/vancouver_chart.html

#53 AiC on 09.17.13 at 12:56 am

I looked at the CREA links and focused on the July graph and the August graph and thought Garth must be wrong because the August number is indeed 2.8% higher than the July number. However the little asterisk indicates the July numbers are “seasonally adjusted”. A generous interpretation would be the CREA messed up their stats. Hopefully they will correct this mistake in next month’s report.

#54 snake on 09.17.13 at 1:30 am

1) When a real estate deal collapses, the stakes can be high: deposits can be large and there can be additional damages

http://www.courts.gov.bc.ca/jdb-txt/SC/13/10/2013BCSC1056.htm

2) Vancouver Luxury Detached Sales Up, Condos Down

http://www.bcbusiness.ca/real-estate/vancouver-luxury-detached-sales-up-condos-down?utm_source=MagMail&utm_medium=BCBusiness+Newsletter&utm_campaign=BCBusiness+enewsletter+16Sept2013

3) A Deal’s a Deal, Until it Collapses

http://www.bcbusiness.ca/real-estate/a-deals-a-deal-until-it-collapses

#55 snake on 09.17.13 at 1:37 am

Can anyone explain why this condo price by City Assessment jump close to 200,000 in one year ?

http://www.ecorealtyinc.ca/listing?id=260529034

#56 Dragan on 09.17.13 at 1:41 am

” #35 Somking Man on 09.16.13 at 10:23 pm
Lets face it young people are screwd unless they got a dad like me.
University marking the bell curve, putting kids in debt for a wirthless obidiance certificate. if you get one and pops or mom has no connections. screwed.
or if you had a brain.
Learn to sell Smoking man style. ”

As a “old” man on the tail of “baby boomers” I admit that unfortunately can’t see good future for young people (even my successful kids). It’s sad that I had better living in former Yugoslavia (30-40 years ago).
Things must change definitely.

#57 Chris on 09.17.13 at 2:19 am

http://business.financialpost.com/2013/09/16/fear-of-higher-mortgage-rates-helps-spur-housing-recovery/

Dumbest Canadian real estate headline ever …

#58 mousy on 09.17.13 at 2:45 am

That cat is obviously Hungarian. Regarding Amal and all that money and feeling poor and his parents not being able to buy their own house back at current prices – there was a moment about 8 years ago when my husband said, “you know, we couldn’t buy our own house the way prices have been rising.” I scoffed at him and threw out another one of his old university t-shirts. Deja-vu.

#59 snake on 09.17.13 at 3:03 am

When a real estate deal collapses, the stakes can be high deposits can be large and there can be additional damages

http://www.courts.gov.bc.ca/jdb-txt/SC/13/10/2013BCSC1056.htm

2) Vancouver Luxury Detached Sales Up, Condos Down

http://www.bcbusiness.ca/real-estate/vancouver-luxury-detached-sales-up-condos-down?utm_source=MagMail&utm_medium=BCBusiness+Newsletter&utm_campaign=BCBusiness+enewsletter+16Sept2013

3) A Deal’s a Deal, Until it Collapses

http://www.bcbusiness.ca/real-estate/a-deals-a-deal-until-it-collapses

#60 blase on 09.17.13 at 4:22 am

Pssst…Calgary realtor birdy told me the summer housing frenzy is now a memory…phone has stopped ringing.

#61 Joyce on 09.17.13 at 4:59 am

I still don’t understand why my friend paid almost half a mil on a condo near a sewage on Marine Dr and Kerr in Vancouver. He’s not planning to stay there for long, probably 5 years. Spent thousands of dollars on few pieces of Italian furnitures. Also the construction had some flaws (they kinda half a$$ed it) and it could take months to get it fixed. Such a headache. For $2000 month, might as well rent a nice upper suite home. He’s wasting away his money and now he can’t afford to get married! Shame

#62 arch on 09.17.13 at 5:11 am

I make700,000 per yet I feel so poor in my city of vancouver where I was born.
Trully,you are the only voice of reason in this world.

#63 Westcdn on 09.17.13 at 5:57 am

I was thinking about possible Federal interventions that could cool off housing prices. They could raise the GST rate to 6% or reduce personal income deductions or increase corporate tax rates and see how many jobs losses that would cause. A thought entered my mind. Why not disallow the capital gains deduction on the principal residence the death of a taxpayer. The capital gains tax collected could be used to fund worthy government income supplement programs. Then I realized thoughts like this one make me unelectable in a democratic society and I am not a fan of big government. Probably best to let time work its magic.

#64 Buy? Curious? on 09.17.13 at 6:23 am

Hey Garth! Houses in Whitby are going through some serious price reductions. But do you know what kills me? A house will be initially listed for $395k, then 3 months later and 2 price reductions, it’s listed again for $349k, sells for $352k and the sleazy real estate gets to claim that the house sold over asking! Why does this industry get to make up its own rules? Why, Garth?

http://www.youtube.com/watch?v=S1A0p0F_iH8

#65 Somking Man on 09.17.13 at 6:26 am

#58 Dragan on 09.17.13 at 1:41 am”

#35 Somking Man on 09.16.13 at 10:23 pmLets face it young people are screwd unless they got a dad like me.University marking the bell curve, putting kids in debt for a wirthless obidiance certificate. if you get one and pops or mom has no connections. screwed.or if you had a brain.Learn to sell Smoking man style. ”As a “old” man on the tail of “baby boomers” I admit that unfortunately can’t see good future for young people (even my successful kids). It’s sad that I had better living in former Yugoslavia (30-40 years ago).Things must change definitely.
………….

Dobradan

Not only are the screwed, they don’t know how screwed.
They know some thing is wrong but can’t quite put reason to it.

The old model of get a good education, which brings a good rate of return trading time for wages is broken.
All for a select well connect few.

I say screw it kids, get a product, go hunting for bendoverables, hire bendoverables. And pump and sell like there is no tomorrow.

Only way your going to make it.

#66 Pr on 09.17.13 at 6:27 am

… a fifth, and final, federal intervention….

If it the ban of 20% cash down to obtain the 30 years mortgage, it will have not much impact.

Bring a 10% cash down like in 1998, it should do the job.
The manic as start, Since poor people can buy real estate.

#67 Oakvillain on 09.17.13 at 6:58 am

Interesting post, Garth. However, while the double-reporting of housing sales sounds fraudulent, I don’t see the problem with realtors seeking multiple bids. As an agent for the seller, the realtor has a duty to get the highest price possible, and a bidding war is a great way to do it. Buyers are certainly motivated to pay the lowest price. Greed, as long as it’s honest greed, shouldn’t be a problem in a free market.

The social consequences of unaffordable housing and excessive family debt will far outweigh the benefit to voracious individual sellers. — Garth

#68 fancy_pants on 09.17.13 at 7:34 am

corruption reigns supreme. The longer it goes, the less you have to pull back the covers to find it.

#69 Stickler on 09.17.13 at 7:38 am

@ #63 Joyce on 09.17.13 at 4:59 am

“… He’s wasting away his money and now he can’t afford to get married!”

>> Can’t afford to get married?!? Hope someone can “afford” to marry you…but I’m guessing no one could.

#70 jaguar on 09.17.13 at 7:43 am

“we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military–industrial complex. ” Remember this line by Eisenhower? He should have thrown in Real Estate Cartel. Who knows what the final intervention by F might be, probably making the banks ditch their 30 year amortizations, but it won’t save people. When values drop and homeowners are under water, many will walk. True character is in short supply these days.

#71 Derek R on 09.17.13 at 7:45 am

#65 Westcdn on 09.17.13 at 5:57 am wrote
I was thinking about possible Federal interventions that could cool off housing prices. They could raise the GST rate to 6% or reduce personal income deductions or increase corporate tax rates and see how many jobs losses that would cause.

Yep, that’s the problem. The best tax to use for cooling off house prices is actually the obvious one: property tax. It has least effect on jobs. But popular it ain’t.

#72 jerry on 09.17.13 at 7:45 am

With debt to income ratios around 163% in Canada, I can’t seem to get my head around why preferred shares would a be a good choice and REITS as well.

Don’t these classes require some kind of positive economic intercourse?

at 163% who will have money to go shopping?

Preferreds have nothing to do with household debt or corporate profitability, and are equities with characteristics of bonds, offering a fixed dividend. — Garth

#73 Bob on 09.17.13 at 7:51 am

Goldman says Gold heading to new lows:

http://www.cnbc.com/id/101039476

#74 Steve on 09.17.13 at 7:54 am

Home buyers and home sellers all need to understand what motivates realtors. That motivation is the commission cheque. No matter what realtors say, most of them really don’t have their clients interests at the top of their list of priorities. The same problem exists in the mutual fund sales world. I don’t know what the solution is in the real estate world. Maybe there isn’t one. But buyers and sellers who think their realtor cares about them are dreaming.

#75 2CentsCdn on 09.17.13 at 8:01 am

#31 Frustrated
“I would like a fifth and final federal intervention, but do you think they would ?”

I doubt it …. for anyone who’s ever ridden a skate board down a big hill …. there’s a point where it’s too late to jump off. You cross your fingers and ride it out. I think they’ve let things cross that line. Is it best to create pain to Canadians with a fix-it plan that’s sure to hurt? …… or just let “gravity” do it’s thing and say “you guys did this to yourself”. Either way …. it’s going to be tough to get elected again.

#76 Musty Basement Dweller on 09.17.13 at 8:29 am

“…. Seventy per cent of Canadians own houses…”
===========================

..and I know many Canadians that own more than one. Does anyone else?

It’s surprising how many have invested in multiple properties from this great run we have had in real estate.

One guy that I have coffee with regularly in Vancouver is a foreman for one of big outfits that digs holes for condo buildings in Vancouver. He owns FIVE houses in the lower mainland area.

He’s starting to crap bricks because the phone has really cooled down on ringing for digging new big holes.

I wonder how these multiple home owners will fare in the next few years in Vancouver.

Should be ok because real estate always goes up?

#77 David W on 09.17.13 at 8:34 am

Garth,

Still waiting for prices to come down, how much longer will we 25-35 yr olds have to wait b4 we can afford to move out of our apparentments and parent’s basements?

Invest in a business instead. — Garth

#78 Leading bank looking for 50 credit analysts! (9 months contract) on 09.17.13 at 8:39 am

Have you guys seen this:
http://www.hays.ca/jobs-search/JOB_1100139

The positions (50+) were posted for the first time a couple of weeks ago and since then the job ad has been everywhere.

Something big must be in the pipe since a bank needs 50+ such credit analysts to work shifts.

I wonder what is going on !?

#79 guelphstudent on 09.17.13 at 8:44 am

#34 Liquid
In the early 80s inflation was high, so when the real estate crash came it was masked by it. If you look at Canadian home prices adjusted for inflation, picture is way different. http://bit.ly/14YSHhM

#80 maxx on 09.17.13 at 8:53 am

“….where a lawyer taught the class how to attract and deal with multiple offers to get the highest price over list. ”

There’s a shock.
We recently ran into a realtard, who, in 3 separate transactions, had a seller who:

a- “was out of town and unreachable until sometime next week”;
b- “was in the U.S. and could only respond by telephone and traveled a lot”; and
c- “is elderly and has no fax nor computer and has to be contacted by a third party”.

The more you learn about the industry, the better off you are.

The BS never ends.

#81 John on 09.17.13 at 8:53 am

In this day and age it is difficult to understand how RE agents maintain their monopoly on the industry. The stupid tv ads that pump the benefits of using an agent are perhaps a sign that change is coming. With all the smart young people, and technology today, surely we can move past these intermediaries to a system that reflects the times and is a fraction of the expense. RE agents add zero value other than to themselves.

#82 Steven on 09.17.13 at 9:00 am

The minimum penalty for telling the truth about manipulation and other important stuff that needs to be brought to the attention of everybody is to be labelled a conspiracy theorist or in other words a liar who doesn’t know jack about any thing when infact he does.
The next higher penalty for telling the truth is to be banned from commenting at websites.
After that we get into the realm of hostile interaction with government and quasi government agencies.
As I said in the previous essay posted by Garth the world of finance and even politics is all about manipulation. Infact the MSM itself is party to manipulation due to their propensity to deny that manipulation exists and to lable the manipulation/ conspiracy revelator a conspiracy theorist. They become a party to protecting the official skullduggery and making its opponents look like fools or worse.
The end results are that the elite offenders get what they want and the decieved public are too brainwashed
to think let alone demand accountability. It also creates a public that is also easily persuaded to pay too much for too little when it comes to real estate and play into the hands of special interests that have a vested interest in maintaining inflated real estate prices. The best concealment for manipulation and rigged markets is to have it in plain sight and have a press and brainwashed public that speaks out against those that state the obvious. Those that control the boob tube control the minds of the public. My own mother didn’t believe me when I told her about the bail in provisions in the last federal budget until she heard about it on the television. I rest my case. Too many of the public are boob tube zombies.

You just lied to your mom. — Garth

#83 THe TREB stats are out -Good news- on 09.17.13 at 9:07 am

TO SFH up just 0.8 YoY ..that sucks for investors !
TO condos up just 0.9%

People are still fighting for Townhouse and less for Semis!
THe market is cooling off! More sales like last year but very little progress. August was indeed dead cat’s bounce!

#84 The TREB stats are out -Good news- on 09.17.13 at 9:08 am

I forgot to highlight that Semis are down -4.8% in 416 !!

#85 Sorry Gold Pumpers on 09.17.13 at 9:31 am

http://finance.yahoo.com/news/gold-fall-fresh-lows-us-092500349.html

#86 Siva on 09.17.13 at 9:53 am

Original listing price was low $500s, $519 or $529. They cancelled that and listed again for $499 and sold for $465. But the MLS says original price as $499. Is this legal?

3888 Duke Of York Blvd 2924 Sold: $465,000
Mississauga, Ontario L5B4P5 Peel City Centre List: $499,900
Orig Price: $499,900 Taxes: $4,515.10/2013 93% List

#87 T.O. Bubble Boy on 09.17.13 at 9:58 am

@ #85 THe TREB stats are out -Good news- on 09.17.13 at 9:07 am
TO SFH up just 0.8 YoY ..that sucks for investors !
TO condos up just 0.9%

People are still fighting for Townhouse and less for Semis!
THe market is cooling off! More sales like last year but very little progress. August was indeed dead cat’s bounce!
—————————

Yep, and make sure to look at the equivalent press releases from 2012 and 2011 to get the real comparison.

Mid-September 2011:
http://www.torontorealestateboard.com/market_news/release_market_updates/news2011/nr_mid_month_0911.htm

Mid-September 2012:
http://www.torontorealestateboard.com/market_news/release_market_updates/news2012/nr_mid_month_0912.htm

Mid-September 2013:
http://www.torontorealestateboard.com/market_news/release_market_updates/news2013/nr_mid_month_0913.htm

Here’s what you’ll find:

Detached SFH average price flat in the 416 year-over-year (probably because of high-end houses sitting). Detached SFH volumes up from 2012 (375 vs. 295), but down from 2011 (395).

Condo prices flat in the 416 YOY. Condo volumes in the 416 up significantly (529 vs. 382), but still down from 2011 (583).

Semi-detached prices down ($582k vs. $604k in 2012), but volumes up (101 vs. 92).

What does this all add up to? I’m reading this as more fallout from the $1M CMHC cap. Fewer $1M+ houses selling, and average prices stagnate. The market for $600k-$999k is still hot, which is why the $800k average SFH price stayed steady. I’m also assuming that the drop in Semi-Detached prices is due to a drop in $1M+ semis.

#88 Ralph Cramdown on 09.17.13 at 10:09 am

#83 John — “In this day and age it is difficult to understand how RE agents maintain their monopoly on the industry.”

Not really. It’s the classic network effect. Do you want your house listed for sale on the one exchange that 95% of buyers look at exclusively, or somewhere else? Once one site is established as the place to network, it’s incredibly difficult to dislodge no matter how much better alternative technologies or exchanges are. Witness Ebay and Facebook for example.

The monopoly isn’t in the real estate licensing and regulatory process, which is a joke, but in each local MLS.

Competition and Market Structure in Local Real Estate Markets

#89 45north on 09.17.13 at 10:11 am

snake: from your link:
SUMMARY

[34] The plaintiff is awarded damages in the amount of $753,000, less the deposit paid by the defendant ($271,000 plus accrued interest), which the plaintiff is entitled to retain by the terms of A 9.1(a) of the contract. Further, the plaintiff is awarded consequential damages for the maintenance fees and property taxes paid for the strata lot between November 28, 2011 and May 24, 2012. The plaintiff is also awarded interest pursuant to the Court Order Interest Act and costs at Scale B.

that’s gona leave a mark

#90 Bob Rice on 09.17.13 at 10:39 am

Just peaked at the condo building I lived in until the spring (South Etobicoke) – all units LISTED below what I sold for. Some are 10 to 12% lower. So, if and when they sell, they’ll get 20% What I netted. Tell me the condo market isn’t in crash mode. There are quite a few more listings in that building now than there was when I listed.

Agent representing a home my wife and looked at recently keeps contacting me. She sends me links to cheap mortgage brokers, and asks me if we’re still interested. I’m playing coy… we are pretty certain (like 99.99%) that her dumb client bought before she sold. She down-sizing to a condo (is what was hinted). How smug, eh? “Oh, don’t worry, your home will sell easily…”

#91 squidly77 on 09.17.13 at 10:43 am

How are the statistics calculated?

In order to align our data with the MLS® Home Price Index there have been several changes made to the data that we report, as well as the upcoming Monthly Statistics Package.
Data Changes

Changes to the data were made to better reflect “Residential” sales. These changes not only provide a better residential picture they are more consistent with how CREA and the HPI report our housing statistics. All the data provided through the monthly stats package and graphs available on CREB®Link reflect the adjustments made to the data. Historical packages do not include the changes.

City of Calgary

Only includes sales by members in Zones A, B, C, D
Excludes following sales:
Vacant lots
Time shares
Parking stalls
Mobile homes
Condominiums have been separated into Condominium Apartments and Condominium Townhouse
Condominium Apartment – includes all “Condominium” title properties that are classified by type as either a low-rise of high-rise apartment
Condominium Townhouse – include all “condominium” titled properties that are not classified as an “Apartment”

Historical inventories have been adjusted to best reflect the adjustments made to the data

Total MLS®

Changed to CREB® Total Residential,excludes:
Mobile Homes
Rural land
CREC
Historical inventories have been adjusted to best reflect the adjustments made to the data.

#92 squidly77 on 09.17.13 at 10:44 am

Oh yeah.. http://www.creb.com/public/how-statistics-calculated.php

Phew!! Thats a load of changes.

#93 Dragan on 09.17.13 at 10:48 am

#67 Somking Man on 09.17.13 at 6:26 am

Couldn’t agree more – we have to get critical thinking back to the schools and education for free on any level.

#94 45north on 09.17.13 at 10:50 am

2centsCDN: for anyone who’s ever ridden a skate board down a big hill there’s a point where it’s too late to jump off.

2centsCDN you’ve been rounded down

there was a time when you could buy a pack of gum for 2¢s

#95 Iconoclast on 09.17.13 at 10:58 am

#75 Bob:

If Goldman is publicly saying it’s headed down, historically there’s a good chance they’re looking to buy.

#96 Ray Skunk on 09.17.13 at 10:59 am

Someone has been working in the last 10 years and is now making 400K a year has only 600K saved …. I’m afraid of our financial sector being managed by people like that.

The income is pre-tax. The savings are after-tax. Give your head a shake. — Garth
—————————————-

Assuming Amal started at $150k/yr and gradually built up to $400k/yr, he surely has netted $1.2-$1.5m over this time. From his comments he appears to have no RE obligations right now (perhaps still even living with parents?), and working in finance surely he must be able to achieve some decent returns.

Obviously working in finance carries overheads (Carrera 4S, frequent lunchtime trips to Harry Rosen, bottle service at the Brant House), but $600k still seems a little on the low side.

Here’s the rub: Amal may be (and probably is) canny. While most Canadians are prepared to lump on their entire life savings as downpayment, the $600k is likely a mere slice of his portfolio while the bulk his his cash is diversified elsewhere.

#97 squidly77 on 09.17.13 at 11:03 am

Note this:
At the top of the stats page it says this .
City of Calgary

At the bottom of the stats page, it says something entirely different.

Calgary Metro only. Includes zone A, B, C & D.

Calgary metro area (CMA) http://en.wikipedia.org/wiki/Calgary_Region#Calgary_CMA

City of Calgary http://en.wikipedia.org/wiki/Calgary

I wonder why all the smoke and mirrors?

#98 squidly77 on 09.17.13 at 11:11 am

CMA-The Calgary CMA, as defined by Statistics Canada, includes the following nine municipalities:[3]
two cities (Airdrie and Calgary);

one municipal district (Rocky View County, which includes Langdon – the CMA’s largest hamlet);

four towns (Chestermere, Cochrane, Crossfield, and Irricana);

one village (Beiseker); and

one First Nations reserve (Tsuu T’ina Nation, which includes the Townsite of Redwood Meadows). creb.com

So come on CREB, what is it? The city of Calgary, or the metropolitan area of Calgary?

Come on guys, just be honest with the people that live here. Really, honesty is not that tough.

#99 happity on 09.17.13 at 11:18 am

“National Association of Homebuilders key sentiment index missed Bloomberg median expectations by the most since April”

Yup, that proclaimed USA economic renaissance is well underway…. not.

#100 frank le skank on 09.17.13 at 11:20 am

Mid september still showing a “hot” market when comparing mid-September sales numbers and prices from previous years. Prices have increased by 30% since 2009 and 40% since 2008 when referencing mid-September values. What does this all mean? It means sweet f#$k all since the number are not accurate.

GTA total sales/price Sept 15 2013 – 3,158 – $514,560
GTA total sales/price Sept 15 2012 – 2,544 – $496,786
GTA total sales/price Sept 15 2011 – 3,149 – $454,194
GTA total sales/price Sept 15 2010 – 2,623 – $412,367
GTA total sales/price Sept 15 2009 – 3,361 – $393,818
GTA total sales/price Sept 15 2008 – 2,726 – $366,158

#101 Old Man on 09.17.13 at 11:33 am

This is looking serious as can see the darkness unfolding slowly upon the Real Estate market as surely the final curtain is about to come down upon the greater fools with no way out, and reminds me of a quote. Oh the horror!

” There are men here and there to whom the whole of life is like an after dinner hour with a cigar; easy, pleasant, empty, perhaps enlivened by some fable of strife to be forgotten – BEFORE THE END IS TOLD – even if that happens to be any end to it. ”

– Joseph Conrad I say the end is nigh!

#102 gladiator on 09.17.13 at 11:38 am

Garth,
just wait for the turn in Joe Q Public’s opinion on RE, then you will have your dream come true: suddenly, many more Canadians will be reading your archives and agree with what you were writing a couple of years ago. It’s always 20/20 in hindsight – just like it was with our neighbours to the South. Your moment is close. Are you ready for the many invitations to talk shows, interviews and speeches?

#103 squidly77 on 09.17.13 at 11:44 am

Is there 1 Calgary realtor that’s willing to clarify CREB’s discombobulated statistics on this web page?

Now, I’m talking about clarifying the stats on this site, not scurrying back to your own Calgary realtor sites to simply throw insults and falsehoods at those that challenge you.

Scoffing at, mocking and attempting to dis-credit people that simply ask questions of you is no answer, CREB and it’s members need to man up!! And stop hiding under their Sisters skirt.

#104 Ralph Cramdown on 09.17.13 at 11:45 am

#98 Iconoclast — “If Goldman is publicly saying it’s headed down, historically there’s a good chance they’re looking to buy.”

Sure, sure. On the other hand, if you’d sold back on April 10, when those two Goldman analysts first told you to sell, you’d be up 16% already.

There’s no fool like a gold fool.

#105 Sean on 09.17.13 at 11:52 am

It’s funny, since you pointed the MLS site showing double and triple listings (I noticed it to but thought it was maybe an IT problem they werent bothering fixing), the listings are all Onesy’s now.

Funny.

#106 Donald Trump on 09.17.13 at 11:55 am

One guy that I have coffee with regularly in Vancouver is a foreman for one of big outfits that digs holes for condo buildings in Vancouver. He owns FIVE houses in the lower mainland area.

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

Let me guess…first name is either Tony or George.

#107 squidly77 on 09.17.13 at 12:06 pm

Now, a challenge to ANY CALGARY rEALTORS that have the man balls to answer.

Challenge this..

Is it Calgary CMA?
Or is it City of Calgary?

SFH in most Calgary neighbourhoods are down 15-20%. Yes or no?

Calgary condos are selling for 25% less than they were 6 years ago? Yes or no?

Interest rates are 65% cheaper now than they were in 2007 (7% then opposed 3% now), which cut the yearly interest payments on a $400,000 mortgage from $28,000 to $12,000 (-$16,000), or $1,300/mo? Yes or no?

No looking for rocks and no scurrying, insults or falsehoods please. Just answer the questions.

#108 happity on 09.17.13 at 12:18 pm

$300 trillion in LIBOR was admitted to be manipulated over several years by the big banks that also serve the central banks, but somehow we are supposed to believe that the USA stock market , with a much smaller capitalisation honestly reflects the state of the economy.

#109 Canadian Watchdog on 09.17.13 at 12:20 pm

TREB numbers look great! Only problem is resales has now stolen side-line buyers away from new home sellers and speculators waiting to flip their units on completion. In other words, liquidity for the presale market just took a turn for the worse.

Here's a few charts as a reminder of what F and the Bank of Canada are looking at. Link

#110 squidly77 on 09.17.13 at 12:20 pm

Some of the stuff my snuffed blog predicted.

Oil an NG prices will crash.
Oil down 35%.
NG down 80%.

Apple will crash.
Apple down 45%

Calgary house prices will crash hard.
Not yet, but down by 15%, supported only by government policy.

Precious metal prices will decline.
Should have sold your Silver at $40 oz!

SIRI (sirius radio) is for real. $0.42 to $3.67

DDD The only place this babys going is up.

Believe in the U.S.A.

#111 T.O. Bubble Boy on 09.17.13 at 12:24 pm

#89 b on 09.17.13 at 9:58 am
Someone has been working in the last 10 years and is now making 400K a year has only 600K saved …. I’m afraid of our financial sector being managed by people like that.

The income is pre-tax. The savings are after-tax. Give your head a shake. — Garth

——————————–

Who knows, this guy may have just gotten promoted to a $400k/yr salary level.

If he made say $100k-$200k for 8 or 9 of those 10 years, saving even $50k a year ($500k total) would be impressive.

Also – as was mentioned by others, there may even be funds in registered accounts and other investment vehicles that you wouldn’t necessarily want to pull money from to buy a house.

#112 Old Man on 09.17.13 at 12:36 pm

The intrinsic problem with this bubble that is going on forever is all bills are paid with after-tax dollars, and when it hits the fan many combinations will come into play. Too many people will be underwater, and an increase in earnings will not be in the cards going forward, as so many items will be triggered along the way such as a mortgage renewal or an increase in taxes or condo fees. Too many will want to go down with the ship to hang on, and bust their savings to cough up more capital for a better day, or cut back on their traditional savings programs. This all amounts to an ultimate financial disaster in the end with no way out, as they are trapped into a debt bubble with no end of suffering the new reality. Once the bubble hits a bottom it with take a decade to come back, just to break even. It will happen with a panic sell off followed by a slower meltdown year after year.

#113 Suede on 09.17.13 at 12:53 pm

#79 David W.

The end goal is not to have a house to brag to your friends about dude. It’s the ability to buy a house if you want or blow it all on a Ferrari and boat, or invest in a business or bonds or securities to make more money off your money.

House for people that are waiting for prices to fall = mortgage + budgeting + fights with your spouse + people telling you their opinions + you go nuts + Jack Daniels Single Barrel (cheap stuff is better tho).

Just learned that JD whiskey is actually clear and they add caramel to it to give it that colour.

– The More You Know (TM)

#114 Suede on 09.17.13 at 1:03 pm

#22 Shawn

RE: Diamonds

How to get 60% off retail engagement rings:

Go to a pawn shop. Get a “$20,000” diamond, know what to look for (4 C’s – thanks for the free education Spence and Wikipedia) and get an independent appraiser and inspetor to verify with their instruments.

Pay $5k for the diamond, very easy to find 1.5carat diamonds that are E/F/G colour and shaped nice, no visible inclusions.

$1.5k for the setting and gold worst case.

Then buy a Tiffany’s box off ebay. Her friends will be envious (the only check box you need – nothing else matters).

oh…and deny till you die! lol

#115 Reality Check Calgary on 09.17.13 at 1:11 pm

Everyday is easy compared to what life was like 100 years ago. Most of the so called stresses are self imposed self talk nonsense.

Stop trying to get ahead financially and instead observe what you have in front of you: Likely edible food and drinkable water. Shelter. Lack of war conditions. No immediate threat to survival.

The problem remains that most people are phony because they do not value themselves. Each person is special and to be valued for who they actually are, not who they pretend to be. If you cannot be yourself, you might as well die.

#116 Ralph Cramdown on 09.17.13 at 1:13 pm

#111 happity — “somehow we are supposed to believe that the USA stock market , with a much smaller capitalisation honestly reflects the state of the economy.”

What a silly idea! If you want to know the state of the economy, look at numbers like GDP, employment, retail sales, auto sales, new and used housing sales, imports, exports, wages and inflation.

You should read about Mr. Market. Old Man is the resident Plato expert, so maybe he can tell you how stock market prices are more akin to shadows on a cave wall than real life.

#117 Frédérik on 09.17.13 at 1:18 pm

The APCHQ is the provincial association of home builders in Quebec. Lately they issued TV spots and even resorted to a petition to force the government hand to help real estate accessibility. See: http://www.missiongenerations.ca/

Sorry it’s mostly in french. Basically it says that the current state of downpayments is a problem that should be adressed. They don’t mention how they would do that but I imagine they would like it to be less than the current 5%

I don’t even know what to say.

#118 Chris on 09.17.13 at 1:37 pm

Hi Garth. Just sold my 389k house for 523k (five years later) to a greater fool. I thought 389k was too much back then but then again I wanted 2400 square feet and 40 acres on the river in a northern ontario mining town. Price of gold once was almost 2k. Now my wife and I (net income 205k) plan to invest this newly discovered capital and live a bit more risk free. Thanks man. You set us straight. Here is a fun article from today’s Globe and Mail. Manipulation? Vomit. http://www.theglobeandmail.com/news/toronto/sky-high-home-prices-are-a-vote-of-confidence-in-torontos-future/article14366130/

#119 Nimoucha on 09.17.13 at 1:53 pm

#87 Smoking Man on 09.12.13 at 7:10 am

You see coming from business my mind is trained to keep it simple, efficient, productive. Then move on to next thing. That’s why my stuff don’t break.

The PhD doesn’t think like that, they are always trying to prove how smart they are to other PhD so their apps try and do to much, un nessasay over complex, users experience frustrating . One size fits all is dumb.

With Microsoft technology that’s a disaster waiting to happen.

Special request to Smoking Man
There used to be a nifty little app for Mac computers called MaxMenus. It made working on the computer incredibly easier by adding powerful, fully customizable menus in the corners of the Mac. The menus offer unparalleled ease-of-access to your commonly used applications, documents, folders, volumes, preferences, and everything you can think of. It was very simple, unobtrusive, extremely stable. Many programs exist to facilitate navigation, but none comes even close to the ease of use of Max Menus. Unfortunately, the company disappeared for some mysterious reasons, and many Mac fans would love a suitable substitute. Care to look into this?

#120 @Toronto Bublle #90 on 09.17.13 at 1:53 pm

My stats show that in fact the $500-$1M is cooling off, Avg Sept around 680 , Med around 670
The average has been steady between May and July when it started taking a dive. It reached a bottom in August and now it is going up a little bit

The 800K stability was provided by an increased number of $1M properties that are selling at a discounted price. They started moving since the rates started moving up.

905 is still going up, I guess the buyers have a higher margin there, price reported to income and correlated with locked in rates still in effect

#121 Donald Trump on 09.17.13 at 2:08 pm

QUOTE:

” I was particularly discouraged to attend a compulsory realtor seminar, where a lawyer taught the class how to attract and deal with multiple offers to get the highest price over list. ”

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

Reminds of a good joke:

A fence existed between Heaven and Hell.
Over time, the fence ran into a state of disrepair.

God contacts Satan and they argue over who is supposed to fix it.

Satan refuses to do anything and God says..” OK, Satan I will have to take you to court to settle this “.

Satan replies “Where are YOU going to get a Lawyer?”

#122 Old Man on 09.17.13 at 2:50 pm

#119 Ralf Cramdown – I do not the women in this room to shed tears, but never mind Plato, as this is what has guided me all my life, as is part of an Ode.

“What though the radiance which was once so bright, be now forever taken from my sight. Though nothing can bring back the hour of splendor in the grass, we will grieve not, but rather find strength in what remains behind. ”

– William Wordsworth

#123 zeeman1 on 09.17.13 at 3:13 pm

#3 Max Jones.

Dumb$%s, er, dude, that’s the new reality, as taxpayers can no longer afford the looming public sector defined benefit liability tsunami.

God forbid a public sector worker should still have to work less for more than their private sector counterpart, even after the new adjustments.

#124 zeeman1 on 09.17.13 at 3:20 pm

#96 Dragan.

Critical thinking skills are the pervue of responsible parents, who, being responsible, would never leave the teaching of critical thinking skills to chieldren up to the schools.

#125 JuliaS on 09.17.13 at 3:47 pm

Proof of the housing unaffordability – mega expansion of Dollarama stores across Canada and record profits against declining revenues everywhere else.

Then again, Inida’s experiencing a housing bubble implosion to rival one in the US and the average citizen there lives on $2 a day. Go figure.

#126 Donald Trump on 09.17.13 at 4:10 pm

http://vancouvercondo.info/2013/09/some-whistler-condos-not-such-a-great-investment.html

QUOTE:

Interesting anecdote from this weekend.

At a party with someone who owns one unit in a multi-unit Whistler condo.

The condo is ~30 years old, wood frame construction. Not good condition. About two years ago, the strata agreed upon a plan to renovate the property. Many of the people who owned units did not have much money.

Therefore, there was a lot of debate over how much budget to authorize for the renovation and the owners voted to hire a fixed-price contractor with a set budget.

However, due to rising building costs, including wood, labour etc, the first contractor withdrew. So did a second. The strata council revised upwards the budget, and a third contractor was engaged. Because of the pending renovation, many of the unit owners served eviction notices on their tenants so that the building would be empty.

Of course the evicted tenants, who were probably service industry people in Whistler, weren’t thrilled and held an “eviction party” on their way out, thoroughly trashing the place.

Now the 3rd builder is considering walking away from the project due to concerns over profitability.

At the moment, the building is unliveable. Each owner’s share of the building budget for the renovation is now higher than the market value of similar available-for-sale condos in Whistler on the secondary market. Total mess, and yet owners are only just coming to terms with the fact that their investment is more or less worth zero at this point.

They have about a 1/12th share of the rights to an as of yet unbuilt building, the cost of which would exceed the price of purchasing similar existing condo inventory in Whistler.

etc etc.

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

I recall a notorious strata in Burnaby B.C . ,built in the 1970’s, that ended up to be such a leaker the cost of repair exceeded the improvement value.

Ultimately , a developer bought out each owner (required 100% strata approval ) …..tore the entire strata down and built a new project.

I don’t think this will be an anomaly, but will be repeated all over with old and crumbling stratas.

“Cutting one’s loss ” may be the new economic mantra, forget “profit” or ” breaking even”.

#127 FutureExpatriate on 09.17.13 at 4:35 pm

#127 Whoever schooled you did a bang-up job.

pervue = purview
critical thinking to ‘chieldren’ [sic] – critical thinking OF CHILDREN

Why is it home schoolers always tend to be illiterate?

Don’t answer that; it’s a rhetorical question and the answer is blatantly obvious.

#128 Bob on 09.17.13 at 4:39 pm

David Rosenberg on Canada: “So much for the housing bust”:

http://www.theglobeandmail.com/report-on-business/top-business-stories/david-rosenberg-on-canada-so-much-for-the-housing-bust/article14383332/

#129 Rain bird on 09.17.13 at 4:42 pm

“Over $400,000 in the finance industry”.
What kind of job would that be?
Just curious.

#130 Bob on 09.17.13 at 4:42 pm

David Rosenberg on Canada: ‘So much for the housing bust’ – TRY THIS LINK INSTEAD

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CDIQqQIwAA&url=http%3A%2F%2Fwww.theglobeandmail.com%2Freport-on-business%2Ftop-business-stories%2Fdavid-rosenberg-on-canada-so-much-for-the-housing-bust%2Farticle14383332%2F&ei=ab44Uv6cAoXM2QW1_IAI&usg=AFQjCNFLfhJeWau7Es2AcavLQopp9vOY3Q&sig2=VQ28kOS3um8FzKuFYE-2ew&bvm=bv.52164340,d.b2I

#131 Musty Basement Dweller on 09.17.13 at 4:54 pm

#129 Donald Trump on 09.17.13 at 4:10 pm
http://vancouvercondo.info/2013/09/some-whistler-condos-not-such-a-great-investment.html

QUOTE:

Interesting anecdote from this weekend….etc
================================
That whistler condo story sounds very similar to many stories that happened to people I worked with in Vancouver and owned the famous (thousand and thousands of ) leaky condos.

The scenario played out many times. It goes like this:
1) All the owners first get hit with a horrendously big and unexpected repair proposal for the building, which causes..
2) some of the other owners to bail who can’t afford to keep their place..and..
3) more horrendous costs for the poor suckers that are left.

Yeah it’s so nice to “own” your own place sometimes.

#132 Led on 09.17.13 at 4:59 pm

If anyone could take down CREA – it should be you Garth. You have the brains to do it. But you had better be right.
wouldn’t this have been a hot news scoop back in the day?

#133 JimH on 09.17.13 at 5:00 pm

#102 happity
““National Association of Homebuilders key sentiment index missed Bloomberg median expectations by the most since April”
Yup, that proclaimed USA economic renaissance is well underway…. not.”
====================================
Let me get this straight; you base your entire analysis of the US recovery because, in the opinion of a Bloomberg analyst, builder sentiment is too low??? And you also too lazy to go to the National Association of Homebuilders website and dig a little deeper?

http://www.nahb.org/news_details.aspx?sectionID=134&newsID=16450

Like most of your ilk, you grasp at any flimsy straw while ignoring the great mass of evidence that overwhelmingly contradicts your baseless opinion.

You should also realize that any and all ‘sentiment’ indexes are, by virtue of their inherent subjectivity and fickleness, the most flaky and least quantitatively empirical of all.

Believe what you want; you have a basic human right to be totally wrong. How do you intend to profit from it?

#134 father on 09.17.13 at 5:15 pm

how can one person hear the live chat now

#135 father on 09.17.13 at 5:20 pm

sorry figured it out

#136 zeeman1 on 09.17.13 at 5:28 pm

#130 FutureExpatriate.

My god, Smoking Man would have a field day with you, and good on him.

Nitpicking the messenger, and not the message, is the sign of a weak or non existent argument.

Anything else?

#137 zeeman1 on 09.17.13 at 5:30 pm

#130 FutureExpatriate.

I’m not home schooled, just busy posting between tasks at work.

Oh, and I heard once that home schooled kids made the top entry cohort into Harvard.

Check it out and get back to me.

#138 Somking Man on 09.17.13 at 5:47 pm

#122 Nimoucha on 09.17.13 at 1:53 pm

Would love to do something like that, but son #3 has got me busy like crazy with fast track… He’s not even paying me. He racked up another 8k in sales today. And is looking to hire more reps. Greedy little prick:) I’m trying to
finish my book.

#130 FutureExpatriate
Spelling and Grammar, hell I’m not even going to go there.

I don’t put big bucks on the table, if you feel smart cause you can do it. Knock yourself out.

I prefer hunting……

#139 Nemesis on 09.17.13 at 6:04 pm

Speaking of ‘manipulation’… a few words ‘o wisdom from Henri, le célèbre chat existentialiste.

http://youtu.be/CvQPzmoKuBk

#140 Donald Trump on 09.17.13 at 6:14 pm

#132 Rain bird on 09.17.13 at 4:42 pm

“Over $400,000 in the finance industry”.
What kind of job would that be?
Just curious.

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

Probably : Loan Shark/Bookie

#141 mark on 09.17.13 at 6:24 pm

Dear god…

http://soberlook.com/2013/09/canadian-household-leverage-still.html

#142 Dad on 09.17.13 at 6:26 pm

#118 Reality Check Calgary on 09.17.13 at 1:11 pm

hah, what a legacy you Calgarians are leaving. “hey, don’t worry about the sky-high youth enemployment, crippling debt levels, unaffordable housing, climbing cost of living, static wages and declining birthrates, at least you aren’t living in a warzone!

I thought we’d leave more for our children, but now I know my generation has foresaken our childrens future for a few pennies. How ugly and vile.

#143 Donald Trump on 09.17.13 at 6:29 pm

#136 Musty Basement Dweller on 09.17.13 at 4:54 pm

“Ownership” is actually an abstract concept.

Nothing we own cannot be taken away, whether it be via expropriation, confiscation, tax sale etc.etc.

What one wishes to achieve/exercise is as much personal control as is possible.

Strata is in some ” nether region/other world ” hybrid between owning a SFH and renting.

I would suggest before one buys into strata..SERIOUSLY do some homework/kick the tires/ get to know a Strata owner.

Strata ownership would be my absolutely LAST resort.

#144 Mike in Surrey on 09.17.13 at 6:31 pm

#19 Albert … when interest rate is raised to 7% on a $285,000 mortgage is $2000 per month amortized over 25 years. And today’s 3.5% on a $400,000 mortgage is $2000 per month, so your way of pop is just $115,000. So on a detached home of $615,000 is a pop of 19% to half a Million; not affordable for an average family. How much pop are you looking for?

#145 905 on 09.17.13 at 7:07 pm

What is causing 905 prices to keep rising while the GTA is cooling off?

#146 Devore on 09.17.13 at 7:10 pm

#136 Musty Basement Dweller

Yeah it’s so nice to “own” your own place sometimes.

Strata owners have a unique problem. Sure, all buildings require maintenance. But with a SFH, you exclusively choose the timing, scope, bidding, cost, etc of all work, including doing it yourself. And without a question, a 20-40 storey structure is far more expensive to maintain per square foot.

So far, in BC especially, but also in other locations to various extents, stratas have been able to defer maintenance. EVERY SINGLE special assessment is the result of deferred maintenance (barring unforeseeable acts of god). Now that engineering reports and maintenance schedules are required by law, that is changing. Stratas must now budget for proper maintenance and replacement of the structure.

The special assessment on my condo exceeded the monthly maintenance fees, when prorated over the term of my ownership. The work has been put off for so long, it escalated into a near-emergency. Add to that the costs of spot work that had to be done over the years on an emergency basis, while the strata twiddled its thumbs.

Mismanagement of funds and maintenance work is another cost strata owners must face, and which is entirely out of their control.

I don’t know why Canadian housing affordability rules dictate condo fees are only counted at 50%. Considering you MUST pay them, and if work needs to be done, you cannot opt out or defer your share of it. At least SFH owners can defer maintenance, understanding it will result in depreciation, which might not be a huge issue if there is sufficient equity (another reason 5% downpayments are inherently incredibly risky to both the buyer and lender).

#147 Daisy Mae on 09.17.13 at 7:20 pm

#62 Oakvillian: “I don’t see the problem with realtors seeking multiple bids.”

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

I do. Multiple bids are motivated by realtor greed. They don’t give a damn about anything or anyone else.

The final outcome is going to be strict regulation.

#148 T.O. Bubble Boy on 09.17.13 at 7:21 pm

@ #150 905 on 09.17.13 at 7:07 pm
What is causing 905 prices to keep rising while the GTA is cooling off?
——————
The sheer fact that fewer 905 houses are priced above the CMHC $1M limit.

Bidding wars and massive debts keep flowing.

Also – the reno craze. A lot of burbs properties from the 80’s and 90’s would need to put $50k-$100k in renos into a place, and some do $200k or more.
(and HGTV has convinced everyone that they should get every one of those dollars back in selling price)

#149 Daisy Mae on 09.17.13 at 7:27 pm

#73 Derek R: “The best tax to use for cooling off house prices is actually the obvious one: property tax.”

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

The feds don’t control property taxes. The Provincial Assessment Authorities do.

#150 Stew on 09.17.13 at 7:39 pm

Yup Garth, economic growth is booming:

Census on Obama’s 1st Term: Real Median Income Down $2,627; People in Poverty Up 6,667,000; Record 46,496,000 Now Poor

Who ever said economic growth is even or socially just? — Garth

#151 Daisy Mae on 09.17.13 at 8:03 pm

#134 SHAWN: “Go Dollarama! By the way, if Sam Walton were alive he would be by quite a margin the world’s richest person at about $100 billion. (Not bad for discount retail empire that did not create anything new but which improves lives by making things cheaper for consumers) Go Walmart!”

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

Why pay more than we need to?

#152 Daisy Mae on 09.17.13 at 8:10 pm

Further to last…

Most of us are not ‘high rollers’. We’re just trying to get the best deal wherever possible. I guess it’s all about ‘what the traffic will bear’.

#153 eddy on 09.17.13 at 8:17 pm

Daisy May said-

The feds don’t control property taxes. The Provincial Assessment Authorities do.

^^^^

And Market Value Assessment is a fraud. If you live in Ontario never let MPAC inside your house (especially if you have nice finishes), yup, they want to tax your finishes, but if they can’t get in they will assume the inside is as nice as the outside. It’s all explained on their web site. MPAC was sanctioned by people who say they are representing you. Don’t like your assessment? Don’t call your councilor, call MPAC and pay them to appeal. Yes folks, outsourced corporatism is worse than city hall.

This link is way off topic, but it’s fascinating. It’s Doctor William Davis talking about wheat and your health.

Wheat: The UNhealthy Whole Grain

http://www.youtube.com/watch?v=UbBURnqYVzw&feature=youtu.be

#154 JimmyAAA on 09.17.13 at 8:20 pm

#129 Donald Trump on 09.17.13 at 4:10 pm
I recall a notorious strata in Burnaby B.C . ,built in the 1970′s, that ended up to be such a leaker the cost of repair exceeded the improvement value.
Ultimately , a developer bought out each owner (required 100% strata approval ) …..tore the entire strata down and built a new project.
I don’t think this will be an anomaly, but will be repeated all over with old and crumbling stratas.
“Cutting one’s loss ” may be the new economic mantra, forget “profit” or ” breaking even”.

==================================
It wasn’t notorious, it was interesting. I also think it was built mid 80’s. All owners made a profit (escaped) because builders in the 70’s & 80”s didn’t pursue density like they do know. It was like a 24 unit building on land that had density like for 150 units. The developer paid a large premium I wish I could find the article because right in the article I remember the developer stating that this was rare situation where the owners had an out rather repair and sue.

By the way almost all condos built in the 90’s – the repair cost exceeded the improvement value. I had a $40,000 assessment in 2002 that I just barely recouped in 2 years after repairs. I broke even. Thank god for property value run ups. Or all of the GVRD’s condo owners from the 90’s would be underwater still.

#155 Derek R on 09.17.13 at 9:11 pm

#154 Daisy Mae on 09.17.13 at 7:27 pm wrote:
The feds don’t control property taxes. The Provincial Assessment Authorities do.

Of course. But property taxes are still the best way to cool off house prices.

#156 FutureExpatriate on 09.18.13 at 12:22 am

#143 You heard wrong. Too much Fox “News”.

#157 KZ on 09.18.13 at 7:48 am

Hopefully the one thing that readers take away from the past few years here is the fact that it fruitless to try to predict the future. I am loathe to admit it, but the newpapers and realtors have apparently been proven right over the past five years. As far as the future goes, nobody knows…

That is an incorrect conclusion. — Garth

#158 Julie the Vlad on 09.18.13 at 2:10 pm

The Fed keeps printing money because the US is not recovering (Mc Jobs are NOT a recovering economy).

http://www.cnbc.com/id/101043947

Climate Change is a scam. There has been not “change” for like…….ever…….its just been reported better with better media coverage. And the world is not getting warmer. Krusty Clark…..can we have all the money back you stole from us in the carbon tax in BC? Of course not…..that money goes towards Govt work million dollar pensions.

Apparently the “science” is in a state of “flux” which is Govt speak for bullshit. How long can these SOBs keep lying to people? As long as the public puts up with it I guess as we saw in the last BC election.

http://canadafreepress.com/index.php/article/57923

#159 jr on 09.18.13 at 6:18 pm

Stop it. I have your IP and will let Obama know. — Garth

Garth is in bed with the NSA

#160 espressobob on 09.18.13 at 6:42 pm

Lots of buzz today for more stimulus from Bernanke. I so have to put this dude on the x-mas card list!

Some limit orders triggered today, profit rocks, what was all that chatter about gold? Whatever!