Kids

kids

So the small row house below this sentence sits on a lot 12 feet wide, with no parking on a dodgy street in a poor part of urban Toronto, and made it into the pages of the Globe and Mail this week because some idiot couple paid $113,000 over asking.

LESLIE

Listed for $499,000 (Hey, virgins! We’re having an auction!), it ended up selling for $612,000, which is $51,000 for each twelve inches of frontage. More revealing, it’s $267,000 more than it was worth to the last buyer (now the seller), just two years ago. In fact in one decade this property’s jumped 400% in value – and it’s still a 1,086-square-foot attached row house with no potential for expansion, development or even a Vespa parking pad.

Says agent Cameron Weir: “There’s a huge pool of buyers in the $500,000 to $650,000s … so any homes in that price point are doing extremely well.”

It’s just what this pathetic blog has been bleating on about for some months. The real estate market – at least in Toronto, Montreal and Vancouver – is segmenting fast. New condo sales have crashed (more on that in a moment), listings over seven figures are languishing and getting cheaper, while first-time buyers in the middle are utterly wired. If you want to know why the average property value in a place like the GTA has been hanging in above the half-million mark, take a look at the termite kibble above. The kids are outta control.

Why? Many believe in the same ‘buy now or buy never’ meme that swept Vancouver three years ago. Largely inexperienced buyers, fuelled by cheap mortgage money, creating a short-term self-fulfilling prophecy of escalating prices. They pay huge numbers for housing that’s essentially junk, and in so doing bury 100% of their net worth in one address on one street – often in a part of town (like this one) where the neighbours are scary.

This is a really bad idea. Especially for those who have quite a bit less than 10% to put down. Mortgages taken now at 3% will probably renew in 2018 at 6% or above, with a deleterious effect on affordability and real estate values. Will this house appreciate at 5% a year to keep pace with liquid assets, like preferred shares or equity ETFs? I bet the new owners are counting on that, since they paid 77% more than it sold for 24 months earlier.

But a 5% growth rate means this place must fetch $782,000 by the time the mortgage renews, or $805,000 with closing costs (Toronto has double land transfer tax – $23,400 in this case). The odds of that happening in an environment of creeping mortgage rates? About the same as F sending me a birthday card.

Like I said. The kids have flipped. But their Boomer moms still call them on closing day to say congratulations and tell them they’re special. That’s certainly true.

Meanwhile what’s going on in the condo market, you ask? George works in a trendoid area of DT Toronto where towers full of hipsters grow like mushrooms in the mists of a magic rain forest. “After reading about Lamb being taken to slaughter in Ottawa,” he tells us, “I thought I’d finally take a pic of some of the desperation other builders are facing in what I call a ‘condo clearance centre’.”

Here it is:

CONDO

Yep, $30,000 cash-back payments on two-bedroom condo buyers. The usual 20% down for amateur investors sliced in half. Discounts of ten grand on suites. And developers paying buyers guaranteed rent for two whole years – no doubt so they can declare this as income to help qualify for a mortgage (then have the CRA nail them). As previously detailed, others are waiving monthly fees for a year or two, or giving away BMWs.

This is a market the real estate board says is balanced and affordable. In reality it’s a wealth trap of generational proportion.

Don’t be shocked at what I tell you tomorrow.

147 comments ↓

#1 The end on 10.09.13 at 9:14 pm

We’re all screwed….

#2 Ayn Rand Army on 10.09.13 at 9:16 pm

oh, happy birthday Garth!
Sucks getting older and more crotchety eh. hehe

#3 mortgagebrokeron on 10.09.13 at 9:16 pm

Let me be the FIRST to say, your blog rocks, and I think you should run for premier of ontario,

#4 bob Rice on 10.09.13 at 9:17 pm

That was short and sweet.

#5 KG on 10.09.13 at 9:17 pm

waiting.

#6 Smoking Man on 10.09.13 at 9:18 pm

Started on the wine early tonight. Taken a brake from my crazy schedule.

Theory somewhere in this rant why people still buy condos in Toronto…..But first a bit of fun…

Roger Waters gets scammed, does an Interview with an Israeli news paper Yedioth Ahronoth. They put words in his mouth. Roger, Roger, Roger. What do expect.

You kick sand in someone’s face deserving or not, they are kicking some back. Herdonomics 101, Why get upset man?

Roger leave the Geo politics to the Smoking Man.

Religious fanatics in moderate suits exist everywhere in the world and every corner of our lives, they have deeply penetrated governments in stealth, and some in the open. All organized religions are evil, including Atheists, Agnostics and Swingers.

That’s why I practice my spirituality myself, drinking and getting hammered in the back yard scanning the sky’s waiting for ET to come down and save me from myself. I have my head phones on usually listing to Roger Waters Creations.

I can’t stand stupid mentally weak people, my god is better than your god. “I want that lot by the water”, “no I want that lot”. ”But my God said it belongs to me”. This mind set eventually leads to killing of each others kids as sport down the road. The inhabitance on both sides sickened by this blood spill and stupidity will all still say great job to their leaders horrified of being banished.

Weak people who join a club, a safety net are obligated to follow it’s rules to a Tee.

They follow the rules not because of a holly book, but fear of getting excluded by fellow tribes men, the most painful human emotion know to man. “Being Banished tossed out like the garbage”

Real estate is the same way, just look at all the stupid people still buying over priced condos in Toronto just to fit in.

They have all made it to Smoking Mans, (Loser’s Lounge. :) My wee shit book.

If people get upset with this post save it, you are too dumb to debate me on this topic, plus you’re at a huge mental disadvantage just by virtue of the need of fitting in, and not using logic as your guiding principle.

If you can’t see that any place of worship is really cool and nice at the community level, but as you go up the food chain, up, up to the hire ups on the very top, the little ones hiding in the shadows, the scared little psycho’s in control who could not give one rats ass about you, your family or your community, they will have no problem sacrificing you all at moments notice if there power and existence is threatened.

I support none of these whack jobs, just the homeless and one toothless dude in Long Branch.

And it’s not like I don’t see and talk to god every damn day, mirrors all around.

ET phone home……………………Putting on Crazy Diamonds….

#7 Matt on 10.09.13 at 9:20 pm

Can’t wait for tommorrow!

#8 Victor V on 10.09.13 at 9:21 pm

Peter Munk’s Forest Hill mansion drops in price from $25 million down to $18 million.

http://themashcanada.blogspot.ca/2013/10/peter-munks-house-has-price-drop.html

All that glitters is evidently not gold, in this instance.

#9 shanks on 10.09.13 at 9:22 pm

condo crash… there is a big hole in the ground by my house (one of about 10 actually), and it was the last one to get started. They put up a really nice sales office, fenced off the area, dug the hole… and now crickets for about 2 or 3 weeks. maybe they just dont have the presales to start building?

#10 jaguar on 10.09.13 at 9:22 pm

Big drop in commercial building permits in Calgary. The Real Estate Board cannot do a Frankennumber on that…and while it may be commercial numbers it says something.
I am on pins and needles waiting for Garth to post tomorrow…

#11 Mikey B on 10.09.13 at 9:22 pm

Garth thank you for your advice. I have now sold my condo and on October 25th will be completely liquid.

I am 32 married w/ no kids yet. Renting in the hot area of Thornhill Woods for under 2k/month.

My question is what is the safest way to invest the rest of the money we will be coming into. I already have a 50k RRSP in an streetwise portfolio at ING.

#12 Taxc on 10.09.13 at 9:23 pm

Montreal island implodes:

Median Price YOY

Single-family -7%
Condominium -5%
Plex (2 to 5 units) -3%

http://communications.centris.ca/Tableaux/2013/Tableaux_Communiques_CIGM_2013M09_ENG.pdf

#13 Observer on 10.09.13 at 9:23 pm

Oh well, good thing it’s all happening in T-owe. If it was going on anywhere else, the govt would probably just write it off to eccentricity at the outposts.

#14 Derek R on 10.09.13 at 9:23 pm

I love duct tape.

#15 john smith on 10.09.13 at 9:25 pm

Furst ?! Row house. More like poor-house

#16 Nemesis on 10.09.13 at 9:26 pm

“Don’t be shocked at what I tell you tomorrow.”

Please tell us you’re not going to spring a ‘ChelseaManning’ on us, AuldPol.

#17 Big Sexy on 10.09.13 at 9:27 pm

Geeeeeeez!

#18 visorman30 on 10.09.13 at 9:29 pm

My girlfriend and I have pretty good incomes (80k each) and find it difficult to justify even a 500k house (we’re both 30). Knowing that a lot of other buyers make even less but buying more is certainly disconcerting. Especially when the house they are buying is just not very nice.

More effort is spent getting a sale on jeans and phones than buying a house. Something needs to change.

#19 projectSmith on 10.09.13 at 9:29 pm

Sent this to your twitter good man!

buffoons in #ottawa. website looks 1998 http://www.ottawacondoshow.com @BennetPros #realestate pic.twitter.com/TFhDmvMMAW

#20 Mr. Monday Night on 10.09.13 at 9:36 pm

Brutal.

Some people will do anything to get their names in the paper.

#21 ripped on 10.09.13 at 9:51 pm

A half hour to the south in a city called Detroit this rowhouse sells for $200 bucks. No that’s not a typo.

#22 Victor V on 10.09.13 at 9:57 pm

http://www.thestar.com/business/personal_finance/spending_saving/2013/10/08/toronto_real_estate_some_condo_buyers_scrambling_to_close_deals.html

Mortgage brokers, realtors and developers have seen a surge the last few months in people who bought pre-construction condos two to three years ago “scrambling” to get financing to close deals.

Some have had to walk away from deposits worth tens of thousands of dollars. Others have been forced to borrow from family — or against their principal residence — to come up with final payments on condos that lenders are no longer keen to finance, according to interviews with a number of players in Toronto’s condo industry.

Hardest hit have been the self-employed who had pre-approvals from lenders when they bought their pre-construction units. But now, with the unit almost complete and final payments due, they are being told they need 35 to 50 per cent down, instead of just 20 per cent of the purchase price, unless they want to rely on secondary lenders offering rates that can hit double digits.

#23 Jimmy on 10.09.13 at 9:57 pm

You guys are old crankies.
Prices today are higher for everything from homes to street lights. Get used to it.
Take a look at what half a million dollars buys you here in Calgary:

http://www.cbc.ca/m/touch/canada/calgary/story/1.1930104

#24 LJ on 10.09.13 at 9:58 pm

Read that first sentence: ‘Paid $113,000 for a 12 foot infill in a bad area’ and thought, “not bad.” Then I had to go back and re-read it and saw the punch line: “over asking.”

I really have to slow down and read. Those people are certifiable!!!

Look at the property on the right side and the patch job to their frontage. I’m amazed that the thing sold at all.

From the Globe article: “It features updated mechanics in the bathroom” or put more simply: “a new plunger for the toilet.” Or: “new fencing…” all 12 feet of it is surely worth more than $113,000.

I give up.

#25 Catalyst on 10.09.13 at 10:05 pm

Even if you know better, its an uphill battle to convince the deluded masses around us we all call family.

Oh and Garth, F provided some forward guidance and you wont be recieving any birthday cards for the next 3 years.

#26 Catalyst on 10.09.13 at 10:14 pm

@23

LOL – looks like they are 4 rings short of an olympics

#27 ripped on 10.09.13 at 10:19 pm

Previous seller flips that for $267K or 77% in 3 years… my wage hasn’t gone up 77% in 15 years.

#28 Retired Boomer - WI on 10.09.13 at 10:23 pm

Just because it is SOLD does not mean it has CLOSED.

I’ll believe this when the whole deed is done.

#29 HAWK on 10.09.13 at 10:24 pm

Looked this up on googlemaps and HOLY COW this is way way east of the DVP.

I’d have thought it would be just a little further than Mt. Pleasant etc.

Man this market is INVINCIBLE lol…………..

#30 TurnerNation on 10.09.13 at 10:24 pm

Yes noted it a few week ago after sign was seen:

“#203 TurnerNation on 09.22.13 at 11:43 am
Desperate kando developers in Toronto.

Flogging disparate developments.

Click on building name, to right, see massive discounts:

http://www.inventoryboutique.com/

#31 Blase on 10.09.13 at 10:25 pm

I’m guessing tomorrow will be about Montreal island.

Forget Detroit, that place would go for 99,000 in London Ontario on a good day.

#32 FATHER on 10.09.13 at 10:26 pm

Vancouver has 6-7 foreclosed homes per day

#33 TurnerNation on 10.09.13 at 10:27 pm

I get this by post:

http://www.remaxcondosplus.com/blog/septemberoctober-market-report-2013/

“August sales numbers, as reported by the Toronto Real Estate Board, built on the market turnaround in July. Overall sales were up by 21% over sales in August of 2012. For condos, the increase was 18% and for downtown condos, the sales increase over August of last year was 24%. On a year-to-date basis, overall sales are now only 4% lower than in 2012; but as we said last month, it is almost a certainty that sales will now surpass those of 2012! Remember how everyone predicted a sales decline in 2013, except this Market Report!

Looking closer at the downtown condo market, active listings for August were 5% lower than for August of 2012 which suggests that prices are not going down. On the Etobicoke waterfront, condo sales were up by 20% over August of last year and active listings were unchanged from a year ago. This is a sign that even the slowest condo market in Toronto this year is starting to recover.

Sales reported for the first two weeks of September continue the sales rebound. Overall sales are up by 29% over the same period of 2012. And condo sales ran ahead of the overall market for the first time this year, with sales up by 36%. But before the market hysteria sets in, why don’t we look at 2011 sales results. Sales for August were only 3% higher than for August of 2011. And sales for the first two weeks of September are trending to only match sales for September 2011.”

#34 not 1st on 10.09.13 at 10:33 pm

Garth, wasn’t this bubble set in motion when you were still in parliament? Didn’t you hear any whispers about what they were going to do?

#35 Notta Sheeple on 10.09.13 at 10:37 pm

“……Many believe in the same ‘buy now or buy never’ meme that swept Vancouver three years ago…” – Garth
=========================

“…A famous 1995 study by the Harvard School of Public Health asked students and faculty which of the following two options they preferred: Being paid $50,000 per year while others around them make only $25,000; or receiving $100,000 per year while everyone else makes $200,000. Under both options the price of goods and services stayed the same.

Surprisingly, 50% of the participants in the study picked the first option, choosing to forgo $50,000 per year in order to avoid earning less than their neighbours….”
– Financial Post, Tuesday, October 8th, 2013

http://business.financialpost.com/2013/10/07/how-earnings-could-be-investors-next-headwind/

#36 Obvious Truth on 10.09.13 at 10:38 pm

I wouldn’t live there if the owner paid me to watch the place. These houses were never meant to be standing this long. Red green doesn’t have enough duct tape to save the place.

Neighbourhoods like this ceased to be livable long ago. I know. I grew up in one.

Imagine thinking you getting a great deal in an up and coming place. Then you realize you’ve spent more money than you can ever pay back and you’re stuck in that hell forever.

You feel bad because you just know it’s going to happen to these people and right now they are so proud of themselves.

What a lesson to learn. Depressing.

#37 Canadian Watchdog on 10.09.13 at 10:42 pm

Macro Real Estate Cycles – Annual Average Home Price Returns in Canada 1894 – 2012 Chart

A few notes: Data from 1894 to 1955 isn't perfect, however, since Canada was on a fixed exchange rate for most of that period, using a five year moving average would reflect a relative trend-line for annual returns. Keep in mind this is a long-term chart based on cyclical cycles, therefore periods when home prices declined below zero are mainly hidden due to moving average smoothing.

This idea came to mind while watching an interview with Robert Shiller, who suggested to formulate an extended historic price index for Canada using his data to index pre-world war II prices. It's a very big picture view of market trends, especially when viewing the secular trend juxtaposed against historic rates.

Enjoy.

#38 FATHER on 10.09.13 at 10:43 pm

and I won’t be shocked for tomorrow’s news because you led me on last time you said you have shocking news & that was a long wait for no news (garth you tease) hehe

#39 Van guy on 10.09.13 at 10:50 pm

Hi Garth,

Do u still expect the #FED to get their heads out of their ass this week? Unless they want the massacre on Wall st to continue,(maybe they really do want this) margin investors will bail and this could cause further problems eh?

#40 Notta Sheeple on 10.09.13 at 10:53 pm

#6 Smoking Man on 10.09.13 at 9:18 pm
=========================

Surprisingly, a lot of truth in SM’s post tonight.

You’re on a roll, man.

#41 ILoveCharts on 10.09.13 at 10:57 pm

It’s frustrating.

I went to school. Got an engineering degree. Joined a start-up. Busted my ass. Paid off my student loan. We’re exporting to the US. Doing something useful for the economy. If we exit, I will make some money.

It’s high risk for sure and I accept that. However, it really shouldn’t be higher risk and lower reward than flipping real estate. These bone-heads flipping row-houses are doing way better than I for now.

How could I have expected our government to reward the wrong behaviour for so long?
I can only hope that over the course of my lifetime, my strategy of getting a good education and working hard on innovative stuff that contributes to the economy will lead to higher returns than flipping houses.

I’m around 10 years in and so far I would have been better to get a job in the trades and flip houses.

Rule # 1 of government policy should be to punish the bad behaviour and reward the good behaviour.

#42 Cici on 10.09.13 at 10:58 pm

Oh, that poor baby. I hate that photo!

#43 Stomper on 10.09.13 at 10:58 pm

How could the banks approve a $612,000 valuation on that dump???? Or do they just bury their heads in the sand and rely on the mortgage insurance as risk mitigation?

#44 Smoking Man on 10.09.13 at 10:59 pm

#40 Notta Sheeple on 10.09.13 at 10:53 pm
#6 Smoking Man on 10.09.13 at 9:18 pm
=========================

Surprisingly, a lot of truth in SM’s post tonight.

You’re on a roll, man.
………………………………………..

I hope that was meant with pun intended, it’s a roll alright………………..ahhhhhhhhhhhhhhhhhh

Arthritis pain who………….:)

#45 Obvious Truth on 10.09.13 at 10:59 pm

Just read the article and was going to say “who would want their kids to go to school there”.

Agent lessened my concerns by saying people love the schools.

So just for fun I googled leslieville eqao. Not that I’m a big proponent of these tests because they are heavily biased to socioeconomic status so I don’t judge the kids by it.

However I don’t think the agent did the same google search. Maybe they offer great extracurricular activities and that’s what he’s referring to. Could be the night schools or driving schools. But it surely can’t be the local school.

#46 45north on 10.09.13 at 11:02 pm

it ended up selling for $612,000, and it’s still a 1,086-square-foot attached row house with no potential for expansion, development or even a Vespa parking pad.

this is a huge mis-allocation of resources, other cities have cheaper better housing. Period. this is going to ruin the buyers and weaken the banks and ultimately the country. This unit is worth $100,000. Maybe.

#47 Cici on 10.09.13 at 11:11 pm

#2 Ayn Rand Army

Duh, I think his birthday is on March 14.

If YOU are not yet old and crotchety, you’re at least suffering from dementia.

#48 PKP801 on 10.09.13 at 11:11 pm

Does anybody know -hypothetically – if there are any CDSs for the CMHC? Who would deal that if there were?

#49 Cici on 10.09.13 at 11:15 pm

#6 Smoking Man

“That’s why I practice my spirituality myself, drinking and getting hammered in the back yard scanning the sky’s waiting for ET to come down and save me from myself. I have my head phones on usually listing to Roger Waters Creations.”
_____________________________________________

Forget the book, Smoking Man. This should be a movie; I can visualize this scene clearly. Maybe the dyslexia was supposed to be a sign from God (or the universal conscience consolidator, if you must). Stop writing, start filming!

#50 Cici on 10.09.13 at 11:21 pm

#6 Smoking Man

I’m not sucking up; but I do think that’s a great post today. Keep the wine and Roger’s flowing (but in moderation, LOL).

#51 dosouth on 10.09.13 at 11:21 pm

Just received my second bank notice offering to lower my minimum LOC payment from 2% to 1% monthly. Don’t know if this is to entice me to use them or more people are having a problem making the monthly payments…..?

#52 Cici on 10.09.13 at 11:34 pm

#8 Victor V

Ick, I watched the video. Have to say, his house is gorgeous, but that resort is awful. I couldn’t stand to take my vacation on a huge slab of concrete with hardly any natural surroundings and huge yachts swallowing up the gorgeous view and natural beauty of the ocean. Isn’t that the whole point of sailing, to be out their in the wind and on the water, not hiding away from it in a gigantic, oversized bathtub? And all of those superficial, self-loving, pretentious guys and girls posing for the cameras seem so boring. Nothing better to do than be enthralled with diamonds and your own supposed greatness?

This hippy just doesn’t get it; but thanks God and the universal conscious consolidator that she does not need or want to be that rich.

#53 Nemesis on 10.09.13 at 11:35 pm

@SM… RE: Cici#49

Cici is definitely on to something.

DoIt.

And while you’re at it, please ensure that “one toothless dude in Long Branch” is cast.

He could be your ‘SanchoPanza’. Refer to gOOgleU as required…

#54 Max Jones on 10.09.13 at 11:43 pm

Hey Smoking Man, you just might become a close runner up to Hari Seldon. The only obligation of the state is to create a state of mind. Everything else will be predictable.

#55 Carpe Diem on 10.09.13 at 11:58 pm

#1 The end on 10.09.13 at 9:14 pm

We’re all screwed….

////

You might be screwed but I’ve a free man. I have 11 months in leasing a really nice home in a tall forest. I’ve been here less than a month and love this place. For $450K maybe I should buy a place close by.

Or maybe not.

Maybe next year it will be time to move to the States or somewhere warmer.

#56 Half Full on 10.10.13 at 12:21 am

Don’t like today’s picture.

#57 Ronaldo on 10.10.13 at 12:24 am

#43 Stomper –

”How could the banks approve a $612,000 valuation on that dump???? Or do they just bury their heads in the sand and rely on the mortgage insurance as risk mitigation?”

That’s it.

#58 robert on 10.10.13 at 12:36 am

I’ve owned a couple of homes in my life,they were expensive to me at the time but I did my research on location etc but for the life of me where is the upside for these people buying today?

#59 Fortune500 on 10.10.13 at 12:40 am

ILoveCharts, I hear ya. My wife and I took on jobs overseas that we likely would not have taken had it not been for lack of options in our field in Canada (not complaining, such is life). We took it as a learning experience, and it has been. We have traveled, and we have saved. We paid off our student loans in two years, and we now make the equivalent of $210,000 CDN before tax combined.

The thing is, we look at housing in Canada and it blows our mind. In our early 30s we probably have more savings than most in the same demographic in the Great White North, and our income levels are solid. But, you know what? We still think housing in Canada is insane! Absolutely completely detached from reality.

We cannot fathom how young people are doing it, or why. Luckily, we have enough Irish, Spanish, Emirati, American, Portuguese, and Greek colleagues and friends over here to remind us of the fact that their countrymen and women once thought they were special too …

#60 Freedom First on 10.10.13 at 12:49 am

…..”some idiot couple”…..I think that is the kindest way possible to describe this couple Garth, after what they just did to themselves. I truly do feel sorry for them. They are in for a world of hurt. Toughest way to learn, the school of hard knocks. No wonder Smoking Man mocks our education system. Majority can no longer think/reason/learn. Keep in mind, Canada has no more “Greater Fools” than the rest of the world. And that’s already been proven.

#61 Waterloo Resident on 10.10.13 at 12:51 am

AMERICA IS GOING TO DEFAULT: trust me on that.

#62 Mr. Singh on 10.10.13 at 12:57 am

Where does the bank get all the money it needs to give out hundreds of thousands loans and mortgages? Simple, it type it out on a bank balance sheet into exist using fractional reserve banking method. When people stop spending, and actually start paying off debts, you have a contraction of money, and get deflation, but there is not enough money to pay off all the debts in existence.

The CHMC is backing most of the mortgages in Canada, not the 6 big banks, meaning its now tax payer liability. This undoubtably means higher taxes in future. I wonder how many Canadians will work for 50 cents on the dollar or 40 or 30. With most of Canada with the exception of alberta and maybe saskcthwan is liberal. Liberal is just newspeak for marxist socialist. Most Canadians are not intelligent enough to know this housing bubble was a government created problem, instead Canadians will look to them to find solutions. It happebs everytime.

#63 Fed-up on 10.10.13 at 1:11 am

$612,000 for that rat hole?

These people are complete and utter morons, and I hope they are reading this blog.

I’m completely ashamed to live in this city.

#64 Dominion on 10.10.13 at 1:23 am

But if you were saying the same thing two years ago, and you were, then the couple that bought the row house wouldn’t have made $267,000 on their house.

Two years ago, no one thought, “buy as much over-priced redonc crap in crap neighborhoods because 700 days later, you net a 1/4 mil on the deal”

Is it likely that will happen 2 years from now? My god I hope not, but did people think it would happen 2 years ago? Also probably not.

#65 Steve French on 10.10.13 at 1:31 am

Smoking Man:

You’re a nut-bar.

Crazy like a fox though….

Are you Garth’s alter ego?

#66 Investigative journalism on 10.10.13 at 1:35 am

I wish someone would interview those new owners…
and then blog about here… not to rip them, but to learn.

Garth? Garth? Garth? will you do it? Please? I’d pay for that.

#67 calgaryPhantom on 10.10.13 at 2:08 am

i am pretty sure there are few dead bodies in the basement of this house.

#68 Son of Ponzi on 10.10.13 at 2:13 am

Another tasteless picture.
I think, the authorities should be called in.

#69 Dorothy on 10.10.13 at 3:38 am

Toronto definitely appears to have a problem when it comes to overpriced real estate. But I don’t see that same problem in my neighbourhood, or in many other neighbourhoods across the country.
Reading this blog leads me to believe that there are some in Toronto who have completely “lost their marbles” when it comes to deciding what to pay for real estate, but that doesn’t mean that the rest of us are exhibiting the same, or even similar, behaviour.
In my neighbourhood prices have softened considerably over the past 5 or 6 years, and although they now appear to have leveled off a bit, it’s still very much a buyers market. Homes listed at prices that reflect this reality appear to be selling fairly quickly, while homes that are overpriced languish.
If home prices in Toronto are as far out of whack as this blog says, then maybe the people of Toronto should consider looking for work elsewhere and relocating. Because they could buy a mansion is some communities for the price of a shack in the “big smoke”.

#70 Fortune500 on 10.10.13 at 3:56 am

And then there’s this …

http://www.theglobeandmail.com/report-on-business/gm-canada-chief-concerned-about-credit-driven-car-bubble/article14736583/

#71 Would love to be first but I have a life on 10.10.13 at 5:28 am

“Whenever I read about people not seeing it coming, I get a kick out of it,” Keith Anderson, Soros’s “Keith Anderson, Soros’s former chief investment officer, told me. Tall, burly, and soft-spoken, with a modest office decorated largely with photos of his smiling children, Anderson has a friendly, unpretentious air—more Little League dad than Davos man—and a blue-chip money management CV. “Most every intelligent person—we all understood and knew that there was a housing bubble, that the CDOs and the derivatives were creating distortions.”

“The difficulty was knowing when the bubble would burst. “What the problem was,” he said, was “that many of us had thought that for too long and were wrong. We knew it was occurring, but you wouldn’t want to be betting against it, because you weren’t getting satisfaction.

“There are multiple versions of history,” Anderson explained. “The common one, in the normal newspaper, is ‘What fools! No one saw it coming.’

And

“I’ve been through probably six crises now in my thirty years in the business, and it’s the pendulum of capitalism,” Weinberg told me in June 2009, sitting in a conference room in his firm’s modernist offices in the GM Building on Fifth Avenue. “It’s very, very hard to lean against the wind in a bubble. Very, very hard. And very few people can really do it. . .”

Excerpt From: Freeland, Chrystia. “Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else.” Penguin Press HC, The, 2012-10-11T07:00:00+00:00. iBooks.
This material may be protected by copyright.

#72 angie on 10.10.13 at 7:13 am

It’s interesting to see what people will do to look rich.

Can’t wait to see what you have to say tomorrow.

#73 eddy on 10.10.13 at 7:40 am

‘frothy’ is an understatement. there are very few listings in that area. People don’t want to sell because they have to pay through the nose buy, and the david miller tax killed the upgrade market. when agents hold off offers, it really encourages irresponsible behavior- people go in with certified cheques and no conditions, which is ok if you’re gonna bulldoze it and you have all cash but it’s bad for everyone else. with so many regulating bodies it would be nice if one made holding off offers illegal

#74 Steve on 10.10.13 at 7:41 am

#51 dosouth on 10.09.13 at 11:21 pm Just received my second bank notice offering to lower my minimum LOC payment from 2% to 1% monthly. Don’t know if this is to entice me to use them or more people are having a problem making the monthly payments…..?
_____________________________________
…or maybe the bank wants you to use the LOC, that way they can still loan out money in the face of a general reduction in mortgage lending, and they also want you to never pay it off so that they make more money on interest?

Of course, you night be right and they are really just trying to help people out…

#75 Nimoucha on 10.10.13 at 7:44 am

You will like this one, Smoking Man!
http://zenpencils.com/comic/92-chris-guillebeau-11-ways-to-be-average/#.UlZ7ITOi9jl.facebook

#76 fancy_pants on 10.10.13 at 7:51 am

the folk who ignored your warnings and bought that shack two years ago made off like bandits. When is this nonsense going to end?

Is it time to stop artificially suppressing interest rates and allow some real recovery to take place? oh yeah, cant. back against that wall. pending the removal of the fed’s suppression of US rates

Maybe instead, it is time to chill with a tall glass of kool-aid and be proud of the bloated house prices and general inflation as it played such an integral part of the great Canadian “recovery” that the peckerettes have bragged about the last 4 years.

To all the peckerheads and the one who disappeared across the pond, there is another name for this “recovery” – it is called a BUBBLE. good work.

#77 Steven on 10.10.13 at 7:54 am

Garth these prices for real estate are insane! You could knock a zero off the price and they would still be expensive! Are the majority of home buyers insane or is it merely a case of having no sense of what is too expensive relative to one income? Or is the problem something much worse than insanity or stupidity?

#78 fancy_pants on 10.10.13 at 8:14 am

#61 Waterloo Resident on 10.10.13 at 12:51 am

I agree with you on that. Question is when. next week, not sure. but at some time in the future it will happen. In a death spiral that cant get out of.

there is one way to postponethis – and the feds have been doing this: devalue the greenback by generating $ out of thin air. QE. But when the creditors decide they don’t want America’s IOU’s anymore then the ponzi scheme is over. because that is really what it is. Without QE it would have been “game over” so to speak long ago.

someone else’s mileage may vary. all depends on the drinks you sip and what makes you tick. the sun will still rise tomorrow.

#79 detalumis on 10.10.13 at 8:22 am

This story isn’t about why people are spending 600K on a tiny rowhouse it’s about why we designed huge swaths of cities that nobody likes living in thus creating this scarcity. Instead of continuing the subway westward to Mississauga and created more Bloor West Villages we created a giant parking lot that is a walking wasteland. In 1950 all cities looked like the Toronto model and today almost none of them do. That is the root cause.

#80 Grantmi on 10.10.13 at 8:23 am

#56 Half Full on 10.10.13 at 12:21 am
Don’t like today’s picture.

I know!

How could they have done that terrible thing to Big Bird????

#81 brainsail on 10.10.13 at 8:23 am

Canadian mortgage lenders need to be held more accountable for their lending practices. Someday soon, the loose pre-approvals and appraisals are going to be the death of Canadian real estate.

“Banks Are Making It Harder for You to Buy a Home”

http://finance.yahoo.com/news/banks-making-harder-buy-home-103033714.html

“Banks go on appraisal alert in a volatile housing market ”

Over a year later and almost nothing has changed!

http://www.theglobeandmail.com/report-on-business/banks-go-on-appraisal-alert-in-a-volatile-housing-market/article4253999/

#82 PRR S1 CLASS 6-4-4-6 on 10.10.13 at 8:37 am

Hey Garth –

I was looking at that brochure from the ‘Inventory Boutique’ and those birds look like vultures. Perhaps a swallow in there too; how appropriate.

#83 Penny Henny on 10.10.13 at 8:51 am

Don’t be shocked at what I tell you tomorrow.-Garth
——————————————————-
r u retiring?

#84 The Bearded Mystic Oracle Will Soon be Recognized on 10.10.13 at 8:58 am

The tireless efforts of the bearded mystic oracle, all knowing, all wise, all encompassing, financial prognosticator without equal, denouncer of parliamentarian peckerheads and peckerettes, former minister of national revenues, NYTimes bestselling author, Harley riding badass, Amazonian accompanied, bathed and protected, crystal ball gazing visionary, financial tea leaf reading sage, lone voice of reason in the financial wasteland of Canada and last but not least, all round jolly good fellow, will one day be recognized! They will say that indeed a prophet was among us!

#85 CrowdedElevatorfartz on 10.10.13 at 9:00 am

@#32 Father
“Vancouver has 6-7 foreclosures a day”
++++++++++++++++++++++++++++++++++++
Proof?

and, all things considering.
Not bad for a city of 650,000. or 2.5 million if you take in the rest of the lower mainland.

#86 CrowdedElevatorfartz on 10.10.13 at 9:01 am

……..and for all you people that didnt like the duct taped baby on the wall…….take a pill.
He has his fluffy toy within reach.

#87 Hrundi V. Bakshi on 10.10.13 at 9:12 am

If this sale was conditional on finance, how is it possible that it will meet appraisal criteria? Do the purchasers have a 50 percent downstroke? I highly doubt they would pour it into this dump.

We are supposed to believe that banks have tightening lending standards.

When the RE crash comes, there better not be a single peep from CMHC looking for taxpayer money. This bubble belongs to Flaherty, Carney, Harper and the colluding bankers, developers, brokers and agents.

If people lose homes for which they severely overpaid, that is unfortunate but nobody’s problem but their own.

Misguided federal policy to inflate home prices is far more damaging than a $1billion failed power plant in a Ontario, or Duffy’s $65K gift of taxpayer money to himself.

#88 Danforth Village on 10.10.13 at 9:31 am

I can’t believe how out of touch most of the commenters are here – must be a lot of retirees and suburban baby boomers.

There are a ton of young-ish (say under 40) professionals who want a reasonable commute downtown by transit, a walkable neighbourhood with shops and restaurants, and a reasonably sized house that doesn’t cost too much to maintain. Unfortunately there are only so many neighbourhoods in Toronto that can offer this, so those that fit the profile are gentrifying rapidly.

This house is 30 minutes by streetcar to King & Bay, and is plenty of space for a typical 1 or 2 child family. It’s not a busy street so street parking for one car should easy, and realistically it will just sit most of the time anyway since almost everything is accessible by walking or transit. A couple earning $150K (not particularly unusual) could afford this pretty easily.

#89 George on 10.10.13 at 9:33 am

Honestly, from a Vancouver perspective, $612k for a house in Toronto proper (not the suburbs) sounds cheap to me. Anything that’s not a condo and that’s not in a suburb and that’s under a million dollars sounds cheap to me. Believe me, I am no bull. It’s just that I’ve been living through such an epic bubble in Vancouver for so long, it has distorted how I view things. Really $612k for a house in Toronto sounds like a bargain compared to Vancouver especially when you consider job opportunities and salaries are much better in Toronto than Vancouver.

#90 Sinful Man on 10.10.13 at 10:05 am

G’day Smoking Man, I’m cool with your rant and I love reading your stuff.

I notice that you criticize religion a lot but fail to ever address the key question of good and evil.

So, is there no evil? What would you call Muslim fanatics shooting children in a Kenyan mall?

So, there is no good? What would you call the Brit who risked his hide to make 10 trips back into the mall to save people?

And both of those are mild examples, think of the work of Hitler, Stalin and Pol Pot, all of whom denied God.

Once you accept that good and evil exist, you have a problem because now you have to deal with it.

Rum and pot are fun and they may provide a temporary diversion but they can be destructive and they do nothing to address the issue.

However, your sins are forgiven if you want it. But you know that already.

#91 :):( Ying Yang on 10.10.13 at 10:14 am

#6 Smoking Man on 10.09.13 at 9:18 pm
Smoking Man you can speed up the literary process for your book if you use the infinite monkey theorem.
My brother said since you are a programmer then you could create an algorithm and create a program to complete your book.
The infinite monkey theorem states that a monkey hitting keys at random on a typewriter keyboard for an infinite amount of time will almost surely type a given text, such as the complete works of William Shakespeare.
In this context, “almost surely” is a mathematical term with a precise meaning, and the “monkey” is not an actual monkey, but a metaphor for an abstract device that produces an endless random sequence of letters and symbols.
Hurry up we don’t have an infinite amount of time to wait for the finished product.
Just saying?

#92 Cowpoke on 10.10.13 at 10:18 am

What was the ‘tax assessment’ on this house? Appraised value?

#93 Chris on 10.10.13 at 10:19 am

What about this news?.

Royal LePage records strong house price gains in third quarter of 2013
http://ca.finance.yahoo.com/news/royal-lepage-records-strong-house-price-gains-third-080011104.html

#94 :):( Ying Yang on 10.10.13 at 10:28 am

Smoking Man read the Roger Waters article didn’t appear to be misconstrued at all. I like some of this old guys music but agree I like my musicians to play music not politics. When I go to a show I want melodic sound not noise! But then again my girlfriend constantly plays dance music when shes in my car.

http://imeu.net/news/article0024393.shtml

#95 kilby on 10.10.13 at 10:29 am

The house in the picture is a tear down at best, this purchase defies any logic or common sense. How can anybody with a modicum of intelligence get caught like this? As long as interest rates are this low all Flaherty and crowd are doing is “kicking the can down the road” Maybe waiting until after the next election to say “There was no crash on our watch”

#96 JtP on 10.10.13 at 10:31 am

The devil in me wants to watch these buyers read Garth’s blog.

#97 Buy? Curious? on 10.10.13 at 10:35 am

Hey Garth, I’m not sure if you’re superstitious or look for signs like the proverbial Black Swan, but did you see that the Toronto Raptors’ Mascot hurt himself REAL bad? He’s out for the year! A YEAR! I hope the organisation helps him out. Do you think that it’s a sign about the condo market’s state of health in Toronto?

http://www.youtube.com/watch?v=w7Myff5xAZM

#98 KWaltz on 10.10.13 at 11:00 am

http://www.pacecondo.ca/
I want to know about the Pace development at Dundas E & Jarvis where you have to clear the syringes and crack pipes out of the way to get down the street. Downtown Living! Only 2 blocks from “Hooker” Harveys!

#99 Huuk on 10.10.13 at 11:04 am

This is really simple: There is not enough supply of quality houses for sale close to Toronto (not GTA, real Toronto) under 800K.

Demand GREATLY exceeds Supply in this equation.

Those with financial smarts will continue to rent or live in smaller than desired condos, and not be convinced to buy trashy real estate in the limited pool.

Those that survive on HGTV and the W network will cut every expense and over extend to own the slivers and scraps that are the few ‘affordable’ listings in Toronto.

Unfortunately, we live in the instant gratification generation and the ‘Buy It Now’ is was stronger than the ‘Add to Cart’….

#100 dosouth on 10.10.13 at 11:25 am

#74 Steve on 10.10.13 at 7:41 am

#51 dosouth on 10.09.13 at 11:21 pm Just received my second bank notice offering to lower my minimum LOC payment from 2% to 1% monthly. Don’t know if this is to entice me to use them or more people are having a problem making the monthly payments…..?
_____________________________________
…or maybe the bank wants you to use the LOC, that way they can still loan out money in the face of a general reduction in mortgage lending, and they also want you to never pay it off so that they make more money on interest?

Of course, you night be right and they are really just trying to help people out…
————————————-

Thanks Steve but actually I was just pointing out that it appears that banks are starting to recognize clients are having problems even making their monthly payments so instead of not paying it is giving them an option before bankruptcy.

Just another sign of the “debt load” they are in.

Cheers,

#101 Toon Town Boomer on 10.10.13 at 11:26 am

take a look at the termite kibble above

Exactly, a good chance it’s full of asbestos as well

#102 Ronaldo on 10.10.13 at 11:29 am

#76 Fancy Pants –

”Is it time to stop artificially suppressing interest rates and allow some real recovery to take place? oh yeah, cant. back against that wall. pending the removal of the fed’s suppression of US rates”

It’s to the point now in the major areas like Vancouver and Toronto that even at zero interest rates, prices are unaffordable. The same thing is happening in To as happened in Vancouver. Shacks nearing the million dollar mark. I expect that the one in the picture will probably go for at least another 100 grand in the next while. Prices in Vancr on similar properties rose from around 750,000 to around 1.2. between 08 and 2010. Now the number is $999,000 after the CMHC rules changed. There are many areas in the country outside these major centers that are quite affordable. Son just bought a place in Alberta and snagged a 2.6% variable. Place represents 2 x family income so very affordable. Going to be a lot of boomer parents wiping out their retirement funds helping their virgin children to get into these shacks. Stupidity for sure and total ignorance of the markets.

#103 Spiltbongwater on 10.10.13 at 11:32 am

Those Greaterfools who bought the house 2 years ago don’t look so foolish now? Or would a balanced, diversified portfolio have returned them $267K – closing costs, commissions?

#104 Ronaldo on 10.10.13 at 11:36 am

#72 Angie

”It’s interesting to see what people will do to look
rich.”

In years gone by we used to say, “fake it till you make it”. Not so sure that will work that well today but people still try don’t they? Things are not always as they appear.

#105 grasshopper on 10.10.13 at 11:38 am

This appears more reliable than CREA numbers:

From Reuters/Statscan

OTTAWA (Reuters) – The prices of new houses in Canada rose by 0.1 percent in August from July and were a tame 1.8 percent higher than a year earlier, Statistics Canada said on Thursday.

The new housing price index excludes condominiums, which the government has been eyeing for signs of overheating, but the data indicates that the market for new single-family homes at least is under control.

The median forecast in a Reuters survey of analysts was for a 0.2 percent increase.

Finance Minister Jim Flaherty had said last month that the housing sector was “calming”, after a period of worry that a post-recession housing boom would turn into a bubble.

On Monday, StatsCan noted that building permits for housing had fallen 5.4 percent in August, with single-family units down 3.0 percent. Housing starts data for September, however, showed unexpected strength, with the seasonally adjusted annualized rate rising to 193,600, well above analysts’ expectations for 185,000 starts.

#106 Ronaldo on 10.10.13 at 11:45 am

#69 Dorothy – I totally agree with you Dorothy. In many parts of Alberta for example, house prices have done little since the top in May of 07. Similar on Vanc Island and Okanagan where prices pretty much topped out in 09. People in Toronto and Vancouver and places like Winnipeg need to give their heads a shake.

#107 dosouth on 10.10.13 at 11:48 am

U.S. housing market still in a shambles…

Nevada foreclosures go through the roof…

#108 CantRememberMyName on 10.10.13 at 12:05 pm

#6 Smoking Man on 10.09.13 at 9:18 pm

Love it…

#109 Tony on 10.10.13 at 12:21 pm

Re: #69 Dorothy on 10.10.13 at 3:38 am

That’s right the same semi-detached house in Edmonton would list around $99,900 and sell for around $92,500.

#110 Rexx Rock on 10.10.13 at 12:39 pm

Wow!!What a great investment who bought in Toronto a few years ago,great insight.I believe maybe the new buyers maybe right about price appreciation in the next few years.I heard through a friend who knows very high people that our goverment is allowing way more immigrants in the country than there telling the public.I’m talking possibly over 500,000 to 1,000,000 immigrants allowed in our country a year.The new action plan.This great for the future of real estate,no doubt about it.

Then buy three. Tell us how it works out. — Garth

#111 Old Man on 10.10.13 at 1:20 pm

The subject property that you see above is the biggest loser I have ever seen in my life, and nobody in their right mind would ever have bought it. The capital cost could have been taken elsewhere to buy a real home, and not this dog – the buyer of this property gets my golden award for the Greater Fool. I took a drive around the neighbourhood, and surely this must be a joke of sorts.

#112 Holy Crap Wheres the Tylenol on 10.10.13 at 1:39 pm

Tiny homes……………………………………………

At 800 square feet and $229K that’s still $286 / square foot a pretty good deal, unless you need running water and a place to park your BMW. This home in the photo is $563 / square foot. So it has running water big deal!

http://www.citynews.ca/2013/08/23/cheaper-than-a-condo-tiny-toronto-home-on-sale-for-230k/

#113 Holy Crap Wheres the Tylenol on 10.10.13 at 1:50 pm

Tiny homes……………………………………

Found this one down in Smoking Mans territory.
At an undisclosed size (around 800-900 estimated) it is a better deal for $399K. Close to the lake and Smoking Man could be your neighbor, that has to be worth something? Just saw a tiny home out here in the boonies of Oakville go for an astounding $810K. It’s land, all land, soon another McMansion will bloom from the ashes of the Tiny Phoenix homes.

http://www.realtor.ca/propertyDetails.aspx?propertyId=13697988&PidKey=338947136

#114 Realtor #1 on 10.10.13 at 2:15 pm

5 year mortgage down a tenth of a percentage.
Doesn’t look like a crash just a softening of sales. Also no explosion in inventory.

Also you can tell everyone about the 5 year rate being 6%
in five years all it means is that people will start taking the variable rate instead.
Something needs to produce, so far all I hear is lenders tightening up.

I know, I know, next year.

#115 Realtor #1 on 10.10.13 at 2:21 pm

Looking at Garth’s example above the house sold for 75%
today than it did two years ago.

That would mean you would need at least a 35% reduction off the price.

Never going down to 2010 levels.

#116 Mom's dream on 10.10.13 at 2:23 pm

Mom is 57, dad is retiring next yr. Mom is planning to retire in 5 years. My parents have been renting for more than 10 years in a basement. My mom is DREAMING to own a house! Uh oh! She has the house horny syndrome! My dad wants to move back to Asia but my mom wants to stay. That means she has to take full responsibility for the mortgage. How can one person afford a 750k house in Vancouver? She’s expecting her 3 children, including myself to move in and chip in the payment. Do we really want to live with her? What if 3 of us get married and start a family? Then what? It’s going to happen soon. We’re not getting any younger. I’ve told her many times NO but will she listen? I don’t believe she has enough savings for retirement so how can she afford a mortgage? I don’t get it. Sigh I don’t want her to be paying for her mortgage on her death bed. Or even worse, her children will have to pay it off! How unfair!

#117 Julie the Vlad on 10.10.13 at 2:33 pm

Here come the new “record cold” temperatures. One day these “global warming conspiracy theorists” will wake up from their hibernation. You’ll never hear about record cold temps on the Main Slime Media by the way.

http://usnews.nbcnews.com/_news/2013/10/08/20876196-shutdown-worsens-historic-blizzard-that-killed-tens-of-thousands-of-south-dakota-cattle?lite

50% of Public Employee Pensions paid by working poor and private under paid workers. Make’s you wonder who all the horny’s are that are still buying. Govt workers?

http://www.cfib-fcei.ca/english/article/5039-public-sector-pensions-unsustainable-and-unfair-canada-s-pension-tension.html

Friends in Garrison (match stick junk) Crossing in Chilliwack now selling their row house for 60K more than they bought it for 18 months ago. I told them they were nuts. We told them not to buy. Now we are telling them they are asking too much. Horny’s just never listen.

It looks like this. Wooden, BC West Coast rotting junk. Its only 18 months old and I have already seen the wood rotting in places. People are so dumb.

http://terrymoorerealestate.com/chilliwacksardis-garrison-crossing-town-homes-and-condos.html/details-34543533

#118 happity on 10.10.13 at 3:13 pm

“Will this house appreciate at 5% a year to keep pace with liquid assets, like preferred shares or equity ETFs?”

And there kids is the strawman, assuming 5% in etf’s compounded annually for 5 years.

Garth by any chance since you are canucks #1financial blog could you disclose if you are long etf’s and if you receive any renumeration by any etf dealer?

ETFs don’t pay any compensation to advisors. They are therefore cheap, liquid and diversified. Like you, almost. — Garth

#119 Jamie on 10.10.13 at 3:34 pm

Wow. . .the people reading/commenting on your blog get dumber by the day. You are like a false prophet for a bunch of low lifes. . .like a Jesus appearing in cheese curds or toasted bread ;)

FACT: If you were to invest all your money in real estate when you started this blog you would be a very rich man.

#120 live within your means on 10.10.13 at 3:46 pm

OT – Congrats to Canada’s Alice Munro.

#121 don'tgothere on 10.10.13 at 4:02 pm

But…the fact is that RE is appreciating….as indicated by sales…..sure, things are oversupplied in the TO condo market….bu that is only going to efect the developers involved…small potato’s….otherwise…wheres the evidence of an impending crash?

Yellens appointment means low rates forever…..and a day. Confirmed by bank shares going gangbusters again today. More interesting topic would be when TD bank stock will split.

#122 Penny Henny on 10.10.13 at 4:08 pm

I bet you had more hits than ever today. people must be worried sick about you. if your not retiring then my second guess is you are selling out to the man and generating revenues from ad space. either way, more power to you.

#123 Vamanos Pest on 10.10.13 at 4:26 pm

totally off topic, but have to get this out. I don’t understand the Republican position on the budget/debt ceiling debate. They want Obama to negotiate in return for passing a budget and raising the debt ceiling. But, in negotiation, the thing that you can offer the other side is usually something you don’t want to give. So by deductive reasoning, the Republicans must be FOR a continuation of the government shut-down indefinitely AND FOR a default by the United States. Otherwise, the premise that negotiation is necessary is a false construct, in that one would be foolish to negotiate to get someone to do something they would otherwise want to do anyway.

Am I missing something here?

#124 Greed is God on 10.10.13 at 5:52 pm

http://www.businessinsider.com/3-charts-that-make-us-scared-for-canada-2013-10

When the Yanks are talking about us you know we should be worried.

#125 Derek R on 10.10.13 at 5:56 pm

#81 Julie the Vlad on 10.10.13 at 2:33 pm wrote:
Here come the new “record cold” temperatures. One day these “global warming conspiracy theorists” will wake up from their hibernation. You’ll never hear about record cold temps on the Main Slime Media by the way.

Climate scientists have predicted three things

1) The average annual temperature is going up.
2) The highs and lows are going to be higher and lower.
3) There will be more precipitation.

So instead of getting winter -4°C, summer +30°C (average 13°C) in the old days, we might get winter -7°C summer +35°C (average 14°C) in the next few years. Plus more snow than we used to get. So the occasional early blizzard and record low temperature in South Dakota is right in line with the climate scientists predictions.

#126 e.rick on 10.10.13 at 6:07 pm

Hey All… I’m just in“A Mood!”
Love the “Garths’s Blog cause he cuts to… IT! I’ve been reading for years waiting for the . . . ?
But hey Garth they will never, never raise %!! It will… “CRIPPLE” every person who… wants to “BORROW” an Audi for 3 years!
And you know what, unfortunately… for them “They Can!”
I truly appreciate the “Great Country we live in!” And hope Steve knows?? what he has… created for our “Children?”
I Mean It! I really hopes it works. I’m 55 and have had a “Great RIDE!”… and still riding.
“Lucky Me!”

#127 JuliaS on 10.10.13 at 6:24 pm

#35 Notta Sheeple

“…Under both options the price of goods and services stayed the same.”

And lies the real idiocy in the proposal – not in the practical real world response that the people offered.

In the real world a person with 2x income would drive prices upwards, pushing the half-incomer out of the market. Wages have no absolute value. The value of currency itself is purely arbitrary. What matters at the end of the day is where you stand compared to someone else competing for the same resources.

Did the researchers also ask what people would do if Santa was real (or if he was running the government)?

#128 Smoking Man on 10.10.13 at 6:27 pm

#90 Sinful Man on 10.10.13 at 10:05 amG’day

Smoking Man, I’m cool with your rant and I love reading your stuff.I notice that you criticize religion a lot but fail to ever address the key question of good and evil.So, is there no evil? What would you call fanatics shooting children in a Kenyan mall?
………

I posted it on here but garth deleted it.

He was only protecting me, words and cartoons like that gets your head chopped off.

#129 Nosty In Drag on 10.10.13 at 6:29 pm

#117 Julie the Vlad on 10.10.13 at 2:33 pm — “Here come the new “record cold” temperatures.”

Sshhh, don’t upset them! They’ll have to attend therapy meetings for a few dozen millenia!

Here’s something to keep those GW yahoos awake!

#130 T.O. Bubble Boy on 10.10.13 at 6:33 pm

@ #115 Realtor #1 on 10.10.13 at 2:21 pm
Looking at Garth’s example above the house sold for 75%
today than it did two years ago.

That would mean you would need at least a 35% reduction off the price.

Never going down to 2010 levels.
————————————

Gotta love the “realtor math”.

The house didn’t magically increase by 75%… the flipper clearly renovated it top to bottom, likely spending six figures doing it.

Houses are not appreciating in value at that rate (or even close to it) when you factor in renovation $$$.

This is also why mortgage debt only tells half the story of the dismal Canadian credit situation… HELOCs are also a ticking time bomb.

#131 HD on 10.10.13 at 6:46 pm

@ #90 Sinful Man on 10.10.13 at 10:05 am

Looks like you got it all figured out.

Impressive.

In one short post, you slayed Christopher Hitchens, Richard Dawkins, Sam Harris, Daniel Dennett, Laurence Krauss and the like.

Guess I need a religion asap.

Where do I sign up?

Best,

HD

#132 Canadian Watchdog on 10.10.13 at 6:52 pm

#123 Vamanos Pest

Many are assuming the government will default on Oct 17. This is nonsense. All this fear mongering about default on that day is coming out of MSM (including Google search results) controlled by the left. This is exactly what far right reps are calling the dems bluff on, and was proven right last week when the DOD called back 400 thousand workers. Read between the lines. Campaigning for 2014 mid-elections has begun.

In other breaking news: Obama rejects Republican plan on debt ceiling

And so the bond markets were right again today as stocks levetated wih the help of illegal HFT quote-stuffing momemtum ignition. This is not over.

#133 4 AM Sunrise on 10.10.13 at 6:58 pm

#116 Mom’s dream:

Yikes. I have a feeling that if her kids get married she’s going to want them to stay in her home and be one of those multi-generational Asian households. It sounds like she has some empty nest issues, too. She doesn’t want to acknowledge that she’s now living in a time and a culture where the kids stay at home forever.

Thanks for sharing and good luck.

#134 nancy on 10.10.13 at 6:59 pm

Mom’s dream on 10.10.13 at 2:23 pm
Mom is 57, dad is retiring next yr. Mom is planning to retire in 5 years. My parents have been renting for more than 10 years in a basement. My mom is DREAMING to own a house! Uh oh! She has the house horny syndrome! My dad wants to move back to Asia but my mom wants to stay. That means she has to take full responsibility for the mortgage. How can one person afford a 750k house in Vancouver? She’s expecting her 3 children, including myself to move in and chip in the payment. Do we really want to live with her? What if 3 of us get married and start a family? Then what? It’s going to happen soon. We’re not getting any younger. I’ve told her many times NO but will she listen? I don’t believe she has enough savings for retirement so how can she afford a mortgage? I don’t get it. Sigh I don’t want her to be paying for her mortgage on her death bed. Or even worse, her children will have to pay it off! How unfair!

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You are a spoilt selfish brat. If you are planning to get married soon, then why are the 3 of you “children” still living at home? Are you paying her rent? If it weren’t for you 3 “children” should she not be able to afford a 1 bedroom apartment for herself? without any consideration to have to provide a “house” for you guys? No she should not be buying a house at 57 years old. She raised the 3 of you brats already. Get out! Make sure you help her buy a nice apartment for her retirement without whining about your own needs.

#135 Phil Indablanque on 10.10.13 at 7:15 pm

# 90 Sinful Man

Careful, your assumptions are showing. Good and evil are subjective interpretations of reality.

#136 young & foolish on 10.10.13 at 7:15 pm

Note to idiotic posters:

Housing in large cities which attracts many people has never been cheap. And it won’t be tomorrow either … when conditions appear which force prices down, look around and you will notice economic activity and well paying jobs are down as well.

#137 eddy on 10.10.13 at 7:20 pm

#112 Holy Crap Wheres the Tylenol on 10.10.13 at 1:39 pm

Tiny homes……………………………………………

At 800 square feet and $229K that’s still $286 / square foot a pretty good deal, unless you need running water and a place to park your BMW. This home in the photo is $563 / square foot. So it has running water big deal!

http://www.citynews.ca/2013/08/23/cheaper-than-a-condo-tiny-toronto-home-on-sale-for-230k/
***

It was a garage. That severance should never have been allowed, i just scratch my head. Maybe People in that area with corner lots and detached garages should hire lawyers and planers and try and sever too. There is a central street in TO called Croft, on which the houses were previously garages

#138 young & foolish on 10.10.13 at 7:29 pm

“If home prices in Toronto are as far out of whack as this blog says, then maybe the people of Toronto should consider looking for work elsewhere and relocating. Because they could buy a mansion is some communities for the price of a shack in the “big smoke”.”

Yes, exactly, go and look for non-existing jobs in small town Canada so you can afford a farmer’s mansion. Great career move, and why RE in the countryside is cheap to begin with. RE values have a lot to do with “location”. Ever heard of that before?

#139 CrowdedElevatorfartz on 10.10.13 at 7:30 pm

@#119 jamie

Thanks for those words of whizz dumb jamie, now go back to selling real estate while you still can.

#140 Mr. Monday Night on 10.10.13 at 7:49 pm

nancy on 10.10.13 at 6:59 pm

———————————–

Read the post again. They said ‘move in’, not ‘move with’. Mom’s Dream is not living with Mom, the kids have obviously moved on and have their own places.

Next time you’re about to spout off and call people names, take your time and read slower until you can understand what is being said.

#141 Obvious Truth on 10.10.13 at 7:57 pm

#88 Danforth Village

I understand the commute thing. The problem is that 150k is no where near enough.

You need to factor mortgage and all house expenses not to mention maintenance and waterproofing. Then there’s the car and child expenses or time off with kids. Then kids costs. Did you factor savings of 2000 a month for yourselves a nod resps.

Day to day in that city is expensive too.

Even if you clear 8000 a month this house is too expensive.

Factor in higher rates and softening prices and it gets worse.

Has anyone mentioned job loss or recession.

Nobody puts all this into the cost. Guaranteed it’s more than 8000 and that doesn’t include fun, lulu lemon or Starbucks.

You can’t say its reasonable without doing the math. Nobody is going to take care of you.

#142 Observer on 10.10.13 at 8:05 pm

Fed should ‘quickly’ wind up stimulus program, Flaherty says

http://www.theglobeandmail.com/report-on-business/international-business/us-business/fed-should-quickly-wind-up-stimulus-program-flaherty-says/article14811661/

#143 jess on 10.10.13 at 8:16 pm

http://tedglobal.blog.lemonde.fr/2013/06/13/tedglobal-2013-trois-idees-pour-reprendre-la-main-sur-leconomie/

#144 Smoking Man on 10.10.13 at 8:19 pm

#113 Holy Crap Wheres the Tylenol on 10.10.13 at 1:50 pm
Tiny homes……………………………………

Found this one down in Smoking Mans territory.
At an undisclosed (around 800-900 estimated) it is a better deal for $399K.
………………………………….

Jill Ross, the listing agent is famous in these parts, low balling price then no offers for 14 days. Bidding wars.

That property is a tear down and it will go for over 500. . or close to it.

#145 Daisy Mae on 10.10.13 at 8:26 pm

122 Penny Henny: “I bet you had more hits than ever today. people must be worried sick about you. if your not retiring then my second guess is you are selling out to the man and generating revenues from ad space. either way, more power to you.”

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What are you babbling about? Garth is fine. And tomorrow he will have an interesting blog…. so R E L A X.

#146 Babblemaster on 10.10.13 at 8:44 pm

“This is a market the real estate board says is balanced and affordable. In reality it’s a wealth trap of generational proportion.” – Garth

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Only time will tell, but the 416 SFH market has thus far defied all logic to climb to this insane level. It just may be that the “fools” that are saddling themselves with these massive debt loads will turn out to be prescient and bought before prices went even higher.

You didn’t study economics, did you? — Garth

#147 Behavioral Finance on 10.10.13 at 9:05 pm

That house should be called “Extraordinary Popular Delusions and the Madness of Crowds” :)