Oops

In the first few days of last July, as FOMO gripped Vancouver and the Lower Mainland amid a wildly inflating and seriously unbalanced housing market, I had two words of advice: get out. Harvest your profits. A time to sow, a time to reap. So reap.

One month later, just after the province brought in its Chines Dudes tax, the decline started. Sales plunged and prices followed, especially at the top end of the market.

Well, here we are again. This heretic but heroic blog recent hosted ‘Maybe Week’, saying maybe the GTA market’s more pooched than most people think, and the wise ones are the sellers, not the buyers. In one devastatingly boring post after another, the message was clear: hope you sold. Change is coming.

And here we are. The flip just switched.

Two weeks ago we told you about Derek, whose rambling house in the burbs sold for an eye-popping $2.25 million, only for the buyer to get cold feet 24 hours later. This is not an isolated tale, by any means. Deals are falling apart with regularity now, whereas two months ago buyers were joyous to get in at any price.

“What a shit show!,” he reports. “Buyers actually showed up at our house basically begging us to release them. Husband almost broke down. We basically said nothing other than we felt as far as we are concerned they have bought our house and they should be happy with their purchase.

“Husband came back again early evening begging us to relist for 2 weeks after Easter and hope to sell for same or more. We told him to talk to our lawyer. Our lawyer has since sent him an email to stop communicating with us directly and all communication to go through him. Our lawyer has reviewed the purchase agreement again and says it totally solid, no conditions, no wiggle room for them.”

Remember who the greater fool is? Yup, the fool who follows. The last one in. The person who ignores the warning signs, the excess, the facts and even this pathetic blog, and jumps on emotionally at the top of the pile. He may be waiting years, or decades, or forever, to get his money back.

Real estate is a hormone-driven asset which trades in a market more influenced by house-porn TV shows, Facebook, peer pressure and mass media than by economic data, household income or logic. When it’s going up, everybody wants in because it’s “buy now or never.” But when fear replaces panic buying, the trip down can be just as quick. It doesn’t take much – the threat of a rate hike or two, some scary headlines or a market-dousing policy by government. So, just imagine when it all starts happening at the same time.

You get this…

…and as three levels of government pow-wow on Tuesday to come up with ways of stopping a runaway GTA real estate market in its tracks – with a foreign buyer’s tax, a new speculation tax, universal rent controls or maybe an empty house tax – the negative meme is probably just starting to pick up speed…

Unlike in Vancouver and the Lower Mainland, where sales volumes started to corrode sharply in the four months before government slapped on its foreigners tax, Toronto realtors have been seeing a robust – but not explosive – number of monthly deals. The real wild card is listings. They started to swell last month, with the number of new properties coming to market up 15% – offering embattled buyers thousands of new choices. That’s expected to mushroom noticeably in April and as supply flows, price increases should ebb. More deals will flounder as recent buyers realize they were greater fools. Smart sellers like Derek will play hard ball and force closings, understanding this is a lottery they just won.

Unlike most lotteries, however, this one has losers. Ouch.

192 comments ↓

#1 wallflower on 04.17.17 at 6:03 pm

This
http://www.theglobeandmail.com/report-on-business/economy/economic-insight/we-all-pay-the-price-for-ballooning-student-debt/article34724263/
along with the reality that immigrants since the 1990s are returnagrants, not settlers, is what will shear the housing market right down the cliff side.
Currently, she simply creeps closer to the edge of the abyss.
Who will be the greater fools?
Bring on the offshore buyers. Better them pay the annual taxes and take the hit than the locals.

#2 Strange on 04.17.17 at 6:04 pm

Families no longer have an affordable place to live….but hey, we’ll have lots of legal marijuana….welcome to Canada.

#3 greedy on 04.17.17 at 6:08 pm

derek is not smart, he is greedy. what did he buy the house for $2.00 back in the 80s. he doesnt know why buyer got cold feet. maybe hes not good at math and then realized what he did. derek shouldnt ruin someones life because of a mistake. derek should relist and be happy with what he gets. remember derek karmas a bitch.

#4 Pulp Faction on 04.17.17 at 6:12 pm

Here comes the rain again……

#5 Olly on 04.17.17 at 6:14 pm

Detached inventory doubled in a month, lmao. This is going to be fun.

https://betterdwelling.com/city/toronto/toronto-homeowners-look-to-cash-out-in-march-as-detached-listings-soar/

#6 crowdedelevatorfartz on 04.17.17 at 6:17 pm

@#3 greedy

No.
Derek was smart.
Derek SOLD to the greedy greaterfool that expected the property to keep rising in value……
Derek has done nothing legally or morally wrong.
Stupid people and their money are soon parted.
No one’s fault but their own.
Karma doesnt care.

#7 Pete from St. Cesaire on 04.17.17 at 6:19 pm

Great atrticle that sums up the mentality of Torontonians.

http://thelastpsychiatrist.com/2011/11/luxury_branding_the_future_lea.html

#8 Andrew Woburn on 04.17.17 at 6:21 pm

Is Amazon eating the malls or is it selfies?

– What in the World Is Causing the Retail Meltdown of 2017?

https://www.theatlantic.com/business/archive/2017/04/retail-meltdown-of-2017/522384/

#9 Andrew Woburn on 04.17.17 at 6:23 pm

– Why many Alberta home builders are embracing prefabrication

http://www.theglobeandmail.com/real-estate/why-many-alberta-home-builders-are-embracing-prefabrication/article34714558/

#10 Capt. Serious on 04.17.17 at 6:29 pm

What happens if Derek’s buyer can’t come up with the financing? Is he going to get into a protracted legal battle to get his money, and if so, is that really wise versus taking less for a solid close? I’m not sure, but it seems like in a developing volatile situation the answer is not usually to lawyer up; at least, not unless one really likes paying legal fees. There is quite a difference between being legally owed money and actually collecting it.

#11 common sense on 04.17.17 at 6:30 pm

Upstart local realtor was a knocking on my door this afternoon, offering to sell my house next after the one he just listed across the street sells. It’s listed for double what I paid for mine 3 years ago.

Time to place a little sign out front of mine Sunday when the listing goes live.

#12 Long-Time Lurker on 04.17.17 at 6:30 pm

Wait a minute. There’s a housing bubble?

Your blog isn’t boring at all, Garth. It’s always a pleasure to read it. Thank you for continuing it.

#13 Stone on 04.17.17 at 6:30 pm

@#3 greedy

Really? Really? You sign a legally binding contract with eyes wide open and then think it’s ok to walk away. If that was the case, any business contract in the developed world would be worth nothing. Where would we be then? That’s the equivalent of someone stealing from you. Are you telling me that’s ok? Was it stupid of the buyer to sign the the purchase and sale agreement?Damn straight. Is it the sellers problem? Not a chance. Pay up. Stupid is as stupid does.

#14 Nemesis on 04.17.17 at 6:30 pm

#ChinaDudes!… #WhatChinaDudes?,Or… #Ooops,ThatWarren’sOneWascallyWabbit…

[G&M] – Chinese property website Juwai.com, Berkshire Hathaway team up

…”A real estate brokerage controlled by Warren Buffett’s Berkshire Hathaway Inc. on Monday announced a marketing agreement with Juwai.com, China’s largest international property website, to attract wealthy Chinese citizens hoping to buy homes in the United States.

Berkshire Hathaway HomeServices believes the agreement will make it “much easier” for the two million monthly users of Juwai.com and Juwai.com/luxe to browse franchisees’ residential listings, chief executive Gino Blefari said in a statement.

The Chinese surpassed Canadians as the largest foreign purchasers of U.S. residential property in 2013, according to the National Association of Realtors.”…

http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/chinese-property-website-juwaicom-berkshire-hathaway-team-up/article34723730/

#WonTonLustInThe”BoroughOfHomes”?…

[FT] – Chinese buyers fuel Brooklyn real estate boom: World property markets have become totally disconnected from national economies

…”Foreign money has always played a huge role in luxury property markets like Manhattan and London. While international buyers in New York tend to come and go depending on the strength of the dollar relative to their local currency, veteran appraiser Jonathan Miller, the president and chief executive of Miller Samuel, tells me that foreign buyers over the past few years have come to represent a baseline 15 per cent of the Manhattan luxury market.

What is new is that they are expanding into border neighbourhoods such as Brooklyn, where town houses typically sell for about a third of what they might in prime NYC, and the foreign money — particularly the Chinese money — is staying, regardless of how strong or weak the dollar is. “Even when the dollar began to rise in 2015, the Chinese didn’t leave — they are just moving to Brooklyn, or Houston, or other second cities, and they are buying cheaper properties with more potential upside,” says Mr Miller.”…

https://www.ft.com/content/93d89320-2063-11e7-b7d3-163f5a7f229c

#15 John Mckee on 04.17.17 at 6:33 pm

If it pops in Toronto, will the impending recession will drag down Vancouver too. Mean regression finally?

#16 Christos on 04.17.17 at 6:35 pm

Garth – facts contradict your assertions. On the one hand you claim that Chinese and other foreign buyers play a small insignificant factor in the extravagant bubble – and on the other you cite the fact that after the “Chinese dudes” tax was intro’d in BC sales plummeted – so which is it Garth?

In an unbalanced market any negative can topple the cart. YVR was going down before the tax, which accelerated the corrective phase. — Garth

#17 West Toast on 04.17.17 at 6:37 pm

I blame this real estate bubble squarely on the shoulders of government. This bubble was created by artificially low interest rates for way too long and tax free capital gains. I don’t blame the public, speakers, flippers, foreigners, whoever as this has been the best investment option anyone could make, especially in Vancouver, from about 2004 to winter 2015 hands down. Today’s situation has government very afraid, a hot potato none of them want to touch and no one wants to be responsible for. In the end, your government will blame you for making your own decision to buy a home and if it crashes in value, it will be your own fault.

#18 Mike on 04.17.17 at 6:37 pm

Honestly, I have screwed myself reading this blog. My brother just made 300k on a property he bought 3 years back when he bought against my advise. I am glad he didn’t listen to me then.

#19 Eco Capitalist on 04.17.17 at 6:40 pm

@#6 crowdedelevatorfartz

Exactly.

@#3 greedy

No. That’s what’s wrong with the 21st century; people refuse to take responsibility for their actions and want everyone else to instead.

@Derek

Prepare to be disappointed. They can still walk away on closing day. You will win your case, easy, but winning a judgement isn’t the same as collecting on it.

#20 Al on 04.17.17 at 6:40 pm

Foe Sale signs are sprouting like weeds in the Markham area of the GTA!

#21 The Lesser Fool on 04.17.17 at 6:40 pm

@3

And what did Derek do wrong? The contract was signed. Next.

#22 Cottingham a bargain on 04.17.17 at 6:43 pm

Since the probability of any asset rising or falling over a given short period of time is 50/50 and since the probability of it increasing in value goes up substantially over longer periods of time , I say hold on to your house , all other considerations equal

#23 Greg on 04.17.17 at 6:44 pm

Derek should relist. All contracts have a clause that says the buyer can view the property just before closing and that the seller must maintain it to the same level as it was during the listing. The buyer just walked through the house and picked something that he feels was not maintained to the same level and the deal is off. Does Derek want to fight this in court for a year or just relist and keep it clean.

#24 Ronaldo on 04.17.17 at 6:45 pm

”Smart sellers like Derek will play hard ball and force closings, understanding this is a lottery they just won.

Unlike most lotteries, however, this one has losers. Ouch.”
——————————————————————
Yes, and the losers will be paying for that others win for years to come. Slaves to the banks. Looks like things are definitely starting to unwind. Finally.

#25 JJ on 04.17.17 at 6:48 pm

Three Options:

1. Buy off Derek to release them from the agreement.

2. Forfeit deposit and risk lawsuit.

3. Close on the house and re-list soon after, hoping not too much damage will be done.

Lawyers and real estate agents win again.

#26 Ronaldo on 04.17.17 at 6:52 pm

#3 greedy on 04.17.17 at 6:08 pm

derek is not smart, he is greedy. what did he buy the house for $2.00 back in the 80s. he doesnt know why buyer got cold feet. maybe hes not good at math and then realized what he did. derek shouldnt ruin someones life because of a mistake. derek should relist and be happy with what he gets. remember derek karmas a bitch.
———————————————–
According to Murphy’s Law, it’s immoral to let a sucker keep his money.

#27 IKnow on 04.17.17 at 6:55 pm

Low end cheaper town houses in Surrey are still selling hot and over asking, yearly price increase more than 35%.

#28 45north on 04.17.17 at 6:59 pm

talking about the GTA: The real wild card is listings. They started to swell last month, with the number of new properties coming to market up 15% – offering embattled buyers thousands of new choices. That’s expected to mushroom noticeably in April and as supply flows, prices increases should ebb. More deals will flounder as recent buyers realize they were greater fools.

I’ve said this before: in the past buyers didn’t leave or at least significant numbers of buyers didn’t leave. To me this is the most significant factor and nobody is measuring it.

$1 million from your house in the GTA goes a long long way in Truro NS. The internet’s the same.

#29 suburban coyote and pup on 04.17.17 at 7:00 pm

Yikes… back in 2013 my exhusband put an unconditional offer on a 1.2 million dollar house in Burlington. His existing house listed at 779k never sold. He tried to back out of deal and lost deposit of 60k plus got taken to court by sellers agent over lost commission for another 35k.

He is still trying to dig himself out from under that mess.

Onf52

#30 BlogDog123 on 04.17.17 at 7:01 pm

derek is not smart, he is greedy. what did he buy the house for $2.00 back in the 80s. he doesnt know why buyer got cold feet. maybe hes not good at math and then realized what he did. derek shouldnt ruin someones life because of a mistake. derek should relist and be happy with what he gets. remember derek karmas a bitch.

Derek offered his home for sale and agreed to sell for a price and closing conditions that the buyer was eager to honour. So since Derek did all this work preparing to bargain in good faith, why should he allow the other party to “change the conditions of sale” after they agreed? We live in a common-law jurisdiction, and the law says the sale goes through or the buyer pays a penalty.

#31 greedy part deux on 04.17.17 at 7:01 pm

#9 Capt. Serious

exactly. like i said karmas a bitch.

#32 common sense on 04.17.17 at 7:02 pm

Derek:

Ask him for 10% of the closing price for your time and aggravation having to re-list, etc.

After all, you may have lost out on various opportunities to sell during this nonsense.

Buyer: Be a man and don’t be a child like most of the population when they wake up and think. It’s called being RESPONSIBLE FOR YOUR OWN ACTIONS.

Next…

#33 mike from mtl on 04.17.17 at 7:03 pm

Little early for election season?

Funny how in Montreal since 2000s residential RE has gone up 200%, Calgary like 300%, Vancouver 1000+%.

OMG now it hits T.O. and world disaster.. gobberment now openly declares major issue and does weird fixes. Rather than Poloz putz who somehow thinks low rates are not to blame?

#34 OttawaMike on 04.17.17 at 7:03 pm

Nope

Uncle just sold waterfront place in Kingston in 2 weeks with fast closing.

1.6 Mil

Lots of gas in the tank for real estate. This is once in a generation time to profit from real estate like never before.

#35 traderJim on 04.17.17 at 7:04 pm

#3 Greedy

When prices keep going up no one asks the buyers to give back the house to the seller who sold too soon.

A contract is a contract, and my understanding is a RE contract in Canada is as ironclad as they come.

#36 A Girl Who Invests on 04.17.17 at 7:04 pm

How will this affect the smaller centres in other provinces? Can places like Regina or Winnipeg expect to follow with declines?

#37 traderJim on 04.17.17 at 7:19 pm

I do get the feeling that the GTA market jumped the shark. How could it not when shacks were selling (supposedly, was it real?) for $2m?

Every person who had a detached home thought they could list and get $2m easily. That’s early retirement for a LOT of folks.

This rapid cooling off will mean the pols won’t feel the need to get too extreme with their new measures.

Once the people who listed their $800k place for $2m realize it ain’t gonna happen they will stop holding open houses and listing will drop.

And then we might just see another leg up, as the underlying causes are all still there. Massive liquidity, super easy credit, low rates.

Or maybe I am just hoping that’s the case so my good buddy can get his $2m and get out.

#38 Honey Oil Tycoon on 04.17.17 at 7:24 pm

If so many deals are falling apart, why repeat the same story? Every deal has 2 ends, this vendor will be covered in money even if he sells for less than the original offer, 1st buyer may get sued over and above losing his deposit.

#39 AK on 04.17.17 at 7:25 pm

#6 crowdedelevatorfartz on 04.17.17 at 6:17 pm
@#3 greedy
“No.
Derek was smart.
Derek SOLD to the greedy greaterfool that expected the property to keep rising in value……
Derek has done nothing legally or morally wrong.
Stupid people and their money are soon parted.
No one’s fault but their own.
Karma doesn’t care.”
——————————————————————
Spot on. Just like people who paid $347.00 a share for Valeant. I am sure they would have loved to back out.

#40 traderJim on 04.17.17 at 7:26 pm

Years ago I had a vintage Jaguar roadster that was supposedly worth 100,000 British pounds in the car mania of that time.

I was happy but couldn’t quite believe that price (I had paid 15% of that a few years earlier).

Turns out that price was a fake. It was a staged auction and the motive was to get prices up so that a certain dealer with a large number of E-types could unload.

Once that ‘bubble’ broke prices went to $30,000 and stayed there for over a decade.

It makes you wonder if similar games are not being played in the RE market.

#41 SoggyShorts on 04.17.17 at 7:26 pm

#22 Cottingham a bargain on 04.17.17 at 6:43 pm
Since the probability of any asset rising or falling over a given short period of time is 50/50 and since the probability of it increasing in value goes up substantially over longer periods of time , I say hold on to your house , all other considerations equal
————————————-
Just because there are 2 possible outcomes does not make something 50/50. If you skydive without a parachute you could die, or not. That’s doesn’t mean the probability of living is 50/50

#42 W09 on 04.17.17 at 7:29 pm

Hello folks,

I’ve been buying properties since 1990. I watched the crash happen a few times in both RE and Stock markets, but hung in there. The rental income has been great over the decades, and has allowed me to purchase more properties. My wife and I will ensure our kids take over this rental business and hopefully keep it going.

The last house I bought is in South Kingsway (W08) and is up 60% from last July. Got in at a very good price of course. I had waited over 14 years to buy another house because I thought the prices were too high and of course all the negative news. If the prices drop by 40%, I’ll be back at the price I paid, but doesn’t matter cause the rental income is good and the area is fantastic for families.

fyi, the RE Market is still hot in W09 area of the GTA.
Just in the last week these sold.

55 Poynter; list:850k sold:1.1 mil
101 Saskatoon; list: 830k sold:1.23mil
82 Pettit Dr; list:1.2mil sold: 1.49mil

Interesting, 82 SUN ROW Drive was listed below 1 mil a few weeks ago, but now listed at $1,275,888. If it sells at the new listing, the market is still going.

#43 Welcome to Slurrey on 04.17.17 at 7:30 pm

No offense garth, but you have implied to sell many times in 2011,2012 2013, 2014,2015,2016 ………..in yvr. Prices still not even close to 2013 levels down here, so despite a retreat in prices from peak of last year, those who bought even in 2011 could still cash out now and make a pretty penny on their “speculative” investment. Who’s to say that yvr wont bounce up again, its happened in the past, despite the poor fundamentals to support the asking prices……… just saying 2018 could see an increase in yvr prices again, you cant rule it out …………. this correction is taking forever

#44 Invictus on 04.17.17 at 7:34 pm

https://betterdwelling.com/canada-is-building-homes-at-a-rapid-pace-but-is-population-keeping-up/

Pay attention to the time lines.
Late 80’s- population explosion, housing starts explosion,
housing crash.
Currently -population explosion, housing starts explosion,
housing ??????

#45 nah. on 04.17.17 at 7:39 pm

No crash. Buyers are just waiting to see what happens in budget. Maybe a few weeks of price stagnation. Then back at the price acceleration. All these doom and gloom pumpers are unrealistic. There will be no vulching or cheap acquisitions. You all missed the boat.

#46 Buy some bonds. on 04.17.17 at 7:42 pm

BMO Bundles Uninsured Mortgages in a Canadian Bond First

https://www.bloomberg.com/news/articles/2017-04-17/bank-of-montreal-to-offer-mbs-as-canada-shrinks-mortgage-support

#47 Sean on 04.17.17 at 7:44 pm

Derek was NEITHER smart nor greedy (for wanting to close)! He was BOTH stupid and greedy (for owning GTA real estate in 2017). The seller of Nortel at $140, and Bre-X at $200, was also not smart. He was a greedy fool, likely to lose massively on his next speculation, drunk on hubris, unaware of the massive risk he was bearing.

#48 Ex-Cowtown on 04.17.17 at 7:52 pm

#18 Mike on 04.17.17 at 6:37 pm

Honestly, I have screwed myself reading this blog. My brother just made 300k on a property he bought 3 years back when he bought against my advise. I am glad he didn’t listen to me then.
+++++++++++++++++++++++++++++++++++++

Good thing he sold then and locked in the $300K. He did sell? Right? Or is he thinking he’s up $300K, but in reality still sitting at the table lettin’ it all ride??

Until you’ve closed and walked with the cheque in the bank, all gains vary between theoretical and fantasy.

#49 chelsea on 04.17.17 at 7:58 pm

The more I check the mls/realtors listings I am flabberglasted the opus prices the sellers are asking…. do I need brain surgery to buy a home right now…. NO… the rubbish out there is beyond comprehension…. and to buy the stupid asking prices NOW at unaffordable prices is beyond my sense of common sense.

This stupidity and robbery has to stop NOW…

#50 TurnerNation on 04.17.17 at 7:58 pm

Maybe have bigarider’s boyz pay the hapless buyer a visit. For a bit of convincing. With a baseball analogy.
(That the market always goes Uppa up of course. Say like a fly ball.)

– Those buyers should take on a whopping CMHC mortgage, 5% down and walk away. Sign a long rental lease while their credit’s still looking clean.

It’s as if CMHC is insured by Moral, Hazard, and Co.

#51 rainclouds on 04.17.17 at 7:58 pm

If Derek was to relist wouldn’t the house sales person then be able to go after Derek for breaking some obscure commission lost rule cooked up by the weasels in RE land?
Derek owes nothing to the idiot that desperately wanted it and agreed to buy it. No doubt there were other imbeciles ready to purchase if Mr Huge Regret didn’t .

Few of these examples broadly disseminated would go a long way to highlight the potential pitfalls to the clueless cannon fodder currently purchasing.

#52 Cdn Mom on 04.17.17 at 8:04 pm

#2 Strange on 04.17.17 at 6:04 pm
Families no longer have an affordable place to live….but hey, we’ll have lots of legal marijuana….welcome to Canada.
……….

Families have PLENTY of affordable places to live in Canada.

I’m quite tired of this whining. From the mid 80s to 2003, I moved to various regions of the country for employment for myself or husband. Not really a choice…move and work, or minimum wage job or welfare.

If you cannot afford to live in a certain city, too bad, so sad. Tell your employer you need a raise to live in your region. Good luck with that, though. Maybe your employer will consider moving to a cheaper region…eventually.

Toronto and Vancouver are not the end all, be all. I know, I’ve lived in both, settled in neither.

#53 Mark's life coach on 04.17.17 at 8:07 pm

#42 Ex-Cowtown on 04.17.17 at 7:52 pm
#18 Mike on 04.17.17 at 6:37 pm

Honestly, I have screwed myself reading this blog. My brother just made 300k on a property he bought 3 years back when he bought against my advise. I am glad he didn’t listen to me then.
+++++++++++++++++++++++++++++++++++++

Good thing he sold then and locked in the $300K. He did sell? Right? Or is he thinking he’s up $300K, but in reality still sitting at the table lettin’ it all ride??

Until you’ve closed and walked with the cheque in the bank, all gains vary between theoretical and fantasy.

and net worth is fantasy fiction

#54 Its gotta be over... on 04.17.17 at 8:07 pm

I am convinced the final days have past, the person I consider to be my dumbest acquaintance has recently purchased a home. True story.

#55 Trumpocalypse2017 on 04.17.17 at 8:18 pm

Nukes, as reality and metaphor in Korea and the US stock market too:

http://www.msn.com/en-ca/money/topstories/could-the-stock-market-be-headed-for-a-nuclear-implosion/ar-BBzWeMN?li=AAggNb9&ocid=mailsignout

Autocrats like Trump always seek out military distractions. But the USA economy is also ripe for huge problems, whatever happens with KJU.

Major trouble on the way, in every way.

Prepare.

#56 Cottingham a bargain on 04.17.17 at 8:21 pm

#41 SoggyShorts on 04.17.17 at 7:26 pm
#22 Cottingham a bargain on 04.17.17 at 6:43 pm
Since the probability of any asset rising or falling over a given short period of time is 50/50 and since the probability of it increasing in value goes up substantially over longer periods of time , I say hold on to your house , all other considerations equal
————————————-
Just because there are 2 possible outcomes does not make something 50/50. If you skydive without a parachute you could die, or not. That’s doesn’t mean the probability of living is 50/50

—-

Your comment is true of course . Are you implying that the probability of a price decline is greater then ? Or is it increase ??

I guess my point would be that since the chance of dieing in a skydiving accident is less than 50% as evidence and history would suggest , the evidence suggests that the chances of price increases in RE are at least 50% in any given year and based on the history of GTA RE quite a bit higher .

#57 WUL on 04.17.17 at 8:27 pm

Re Derek and the scuppered deal. Sometimes morality and the law cross paths but not always. For hundreds of years in our British common law, no moral opprobrium attached to breach of contract. If it made sense to breach, you did. It’s just commerce. A reputation might suffer however. Just be prepared to pay damages for the breach. Recently, our nanny Supreme Court injected a hitherto unheardof principle. Contracting parties owe each other honesty in their dealings. If memory serves, the case is Hryniw. The Dominion continues its slide. How’s a guy to make a buck these days?!?!

#58 Millennial-falcon on 04.17.17 at 8:30 pm

In an unbalanced market any negative can topple the cart. YVR was going down before the tax, which accelerated the corrective phase. — Garth
——–
Vancouver prices are heating up again, condos are nuclear , your talkin as if the market is slow, things are still hot here. I like Kay but take luxury sales over 2 million out of his figures and your both of the mark with the market conditions in 604

#59 Smoking Man on 04.17.17 at 8:31 pm

Still not enough supply to curtail demand. Example Shlong Branch. Just one active listing. Alderwood hardly anyting, just last week a tiny bungee tear down land value only went for mid 850k.

Real estate is local. GTA massive population growth. Economy booming. Bidding wars on rentals.

I think it’s still way to early to get fatso on the stage. But then again my predictive skills in the shitter since Trump won.

I’ll find out next week.

#60 NOTHING SURPRISES on 04.17.17 at 8:36 pm

Canadian Snowbird……… Now Home!

UPDATE:

To our American friends………and Canadian if you will listen.

U.S investors are now ignoring what’s happening in Canada.
Most analysts haven’t considered this. They’re too busy focusing on other problems in the U.S.

That’s a serious mistake. After all, if anything was learned from the 2008–2009 financial crisis, it’s that problems in one country can spread across the global economy like wildfire.

The U.S. could have serious problems if Canada’s housing market implodes and the coming Canadian housing crisis could be what triggers the next U.S. financial crisis.

I mentioned this before, along with the downturn in capital borrowing now happening in all sectors.

Hang on for the ride!!
Canadians are going to be shell-shocked; Americans could be collateral damage.

#61 WUL on 04.17.17 at 8:37 pm

Parts of my memory are intact. It’s worse than I thought. A duty of good faith and a sub category of a duty of honesty, for crying out loud!

Basin v. Hrynew. The citation is Wikipedia.

#62 zee on 04.17.17 at 8:40 pm

Garth,

You keep saying that Vancouver is correcting and the top of the market was last year. But prices have now started to move up along with sales.

So why do you keep saying Vancouver is in correcting phase?

#63 Ronaldo on 04.17.17 at 8:46 pm

#21 The Lesser Fool on 04.17.17 at 6:40 pm

@3

And what did Derek do wrong? The contract was signed. Next.
——————————————————————
Exactly. What if the situation was reversed and Derek listed the house for $100 grand less than current market at his realtors suggestion hoping for a bidding war that didn’t materialize and accepted the asking price. Do you think the buyer would have any remorse and give Derek the extra hundred grand. I don’t think so. Would Karma come into the picture in this scenario Greedy?

#64 T-Rev on 04.17.17 at 8:49 pm

Sounds like Derek’s buyer just bought himself a lifetime of debt servitude. I really wish people would educate themselves before signing multi-million dollar contracts; might save a few lives from ruin. But over-sexed, lusty, and emotionally vulnerable buyers with too much FOMO in their pants have a tendency to jump into these things like they’re buying a Hyundai. And the Hyundai comes with a warranty, and you can sell it on kijiji with no transfer tax, no realtor fees and not lose more than a few grand.

Good luck, Mr. Buyer. Be sure to tell your children, your friends, and your family so they can learn from your mistakes. I’ve made some regrettable calls along the road of life, and whenever someone asks me about my success, I usually begin by telling them about my losses and mistakes- the tales of my losses and near-misses are much more educational and useful than bragging about my wins.

#65 Lee on 04.17.17 at 8:51 pm

#18 Mike,

You’re finally figuring it out now?

#66 Millmech on 04.17.17 at 8:53 pm

#3
Derek’s not greedy he’s doing him a favour, just think in a year from know it will be up 35%,a year after that another 35%,and in year three another 35%!
Where else are you going to be able to double your money with only 20% down and all he has to do is relist with a bunch of 8’s in the price and the wealthy,astute foreign buyers who have an eye for a great bargain will probably bid it up another half million over ask of course!
We definitely need more Canadians like Derek willing to help their fellow compatriots out to financial freedom!

#67 Cottingham a bargain on 04.17.17 at 8:58 pm

#50 TurnerNation on 04.17.17 at 7:58 pm
Maybe have bigarider’s boyz pay the hapless buyer a visit. For a bit of convincing. With a baseball analogy.
(That the market always goes Uppa up of course. Say like a fly ball.)

– Those buyers should take on a whopping CMHC mortgage, 5% down and walk away. Sign a long rental lease while their credit’s still looking clean.

It’s as if CMHC is insured by Moral, Hazard, and Co.
——-

“Big riders boys . ” That’s funny . I am kinda a fan of big rider just like you are. Funny comments and I read all of them the few times he (or she ) posts.

I think his ethnic “make fun ery” of Italians is just that, in good humour.

#68 When Will They Raise Rates? on 04.17.17 at 9:01 pm

Who didn’t see this coming? Oh that’s right, the “RE only goes up” crowd. Well, unfortunately for them:

https://youtu.be/A_sY2rjxq6M

#69 Damifino on 04.17.17 at 9:07 pm

#17 West Toast

In the end, your government will blame you for making your own decision to buy a home and if it crashes in value, it will be your own fault.
————————————-

And that is exactly as it should be.

One does make their own decision to buy a home, and one does make their own judgment about their ability pay for it.

I’m not a fan of the way governments encourage people to be stupid, but I’m a huge believer in personal responsibility.

Make your bed, then lay within.

#70 NS Guy on 04.17.17 at 9:09 pm

Real estate bubble in Canada – yes, of course.

Bubble on the stock markets also (particularly the US):

“Just How Overvalued Is the US Equity Market…”

http://www.zerohedge.com/news/2017-04-17/just-how-overvalued-market-here-are-20-metrics-help-you-decide

#71 Confucius on 04.17.17 at 9:10 pm

Confucius say, “Nice Guy Finish Last”

Derek don’t be a nice guy!

Let the buyer relist and take his chances. If the roles were reversed, I doubt very much that this buyer would allow Derek out of the contract. The reason I say this is that, obviously, the price is the catalyst. As much as the buyer doesn’t want to complete the transaction and hand over $2.25M, if that money was coming his way, as the vendor, he would be as tenacious to complete the transaction as he is trying to get out of it. A deal is a deal!

Derek, let your lawyer do the talkin and you do the walkin, with cheque in hand!

We all saw this in 89 and once again, it is back to teach another generation of buyers that prices do not always go up, and will come down!

#72 EJ on 04.17.17 at 9:21 pm

#3 Greedy,

Check your typo guy; you meant to write “remorseful buyer” as your title…

#73 For those about to flop... on 04.17.17 at 9:22 pm

62 Zee at 8:40 pm
Garth,

You keep saying that Vancouver is correcting and the top of the market was last year. But prices have now started to move up along with sales.

So why do you keep saying Vancouver is in correcting phase?

///////////////////////////

Hey zee,the boss didn’t answer you and so I will give you an answer with a different mindset.

Average sales prices in Vancouver are only down a little over 10% last time I looked ,but if you bought in last spring and were speculating and expecting a 20% annual gain,you are not down roughly 10% ,you are down 30% ,based on your own expectations of market performance.

I’ve got no idea what’s happening in Vancouver at the moment,but I’m flying back tomorrow and I bet you I could find you five people in trouble before I go to bed.

Gotta survive another United flight yet…

M42CA

#74 Welcome to Slurrey on 04.17.17 at 9:30 pm

#58 and #62 ……. exactly my sentiment, detached homes now have a long way to come down……………………i felt the bloat in 2011,2012 when new SFH were 675000 in slurrey (on tiny peices of land )…………i feel even worse now in 2017, 2012 prices seem like peanuts now

#75 NS Guy on 04.17.17 at 9:31 pm

Time to hunker down, people. Bad times coming.

1. Trump is going to deal with North Korea. A massive armada of US ships heading there as we speak. He can bomb the sh*t out of NK, however, there will be collateral damage to Seoul and other nearby places.
2. Syria/ISIS/Turkey/Afghanistan/Iraq/Saudi Arabia, many other Middle East countries a powder keg, with Trump not afraid to press the button.
3. The US Fed tightening, raising rates, ending QE.
4. US Debt Ceiling has arrived. US government is bankrupt.
5. European elections/debt crises, Brexit.
6. The Middle Class and “Working Class” in North America and Europe getting crushed by globalization, outsourcing, downsizing, automation, having to compete with 3rd world slave-wages, retail spending falling.
7. Day-to-day life becoming more soul-destroying, awful, rage-inducing. Airline travel used to be a luxury, an exciting event – now every day, some new story of abuse of airline passengers.
8. Traffic getting worse, distracted drivers causing more accidents than impaired driving. More tolls, more delays, more construction, more accidents.
9. Corporations like banks, retailers, insurance, auto, internet, cell-phone becoming less-trustworthy, trying all kinds of gimmicks and tricks to scam more money from their customers.
10. Wealth disparity ever-increasing. Excessive wealthy buying multiple properties when the average Joe-bag-of-donuts being priced out of the real estate market, and finding it extremely difficult to find decent rentals. The majority of new jobs are minimum-wage retail ($10.50-$15.00/hr range).

Hunker down.

#76 oncebittwiceshy on 04.17.17 at 9:32 pm

Millennial-falcon

“things are still hot here.”

“I like Kay but take luxury sales over 2 million out of his figures and your both of the mark with the market conditions in 604”

Yeah, that’s always the sign of a hot market, when you have 651 price drops in listing prices in the 604. Oh, this has been going on for a long time … several months now.

Follow the trend, not your wishful thinking. Those price drops are for every property, condos to houses. You can check every municipality …. down, down, down.

http://myrealtycheck.ca/
Average Change: -1.92% Up:250 Down:651
Overall $ Change: -58271597.00 Average Change Amount:-64674.36

#77 Smoking Man on 04.17.17 at 9:36 pm

Writing. Hemingway was a master at using less words so that the reader can paint a picture based on there own experiences.

So here are two books. In two words.

It’s here.
They’re here.

It will mean different things to different people.

This blog made me aware I’m a great writer that I had no idea of. Be it with shit technical skills.
That’s what university dumb down interns are for.

Get the period right.

Where an I going with this. No idea.

With the blog glitch where I vanished, the hundreds of emails of support realy moved me. Thank you dogs.

And thank you Garth for getting it fixed.

This is my home away from home. Just like alot of you.

https://youtu.be/M4N74EdxwRM

#78 MF on 04.17.17 at 9:40 pm

Still looking for a 2 bedroom condo here in the gta. No luck yet but let me tell you this market is a disaster. Everything way overpriced beyond belief. Half the lock boxes for these condos do not even have their key once you find it. Listing agents sloppy, and do not return my
sgent’s phone calls. One condo had a dog’s poop on the balcony. Nice. Tons of speculators. No one cares. Absolute joke. Yes i have noticed slightly more listings than there were a month ago, but prices are still outrageous for what you “get”. Sellers think they are little geniuses.

Have zero faith in these three idiots meeting to “discuss” the market but yes we deserve a “correction” of epic proportions.

MF

#79 Welcome to Slurrey on 04.17.17 at 9:43 pm

#76 price drops, but nowhere near affordable , how many decent properties under a million?

#80 simplified Chinese on 04.17.17 at 9:44 pm

#14 Nemesis on 04.17.17 at 6:30 pm
#ChinaDudes!… #WhatChinaDudes?,Or… #Ooops,ThatWarren’sOneWascallyWabbit…

[G&M] – Chinese property website Juwai.com, Berkshire Hathaway team up

…”A real estate brokerage controlled by Warren Buffett’s Berkshire Hathaway Inc. on Monday announced a marketing agreement with Juwai.com, China’s largest international property website, to attract wealthy Chinese citizens hoping to buy homes in the United States.

Berkshire Hathaway HomeServices believes the agreement will make it “much easier” for the two million monthly users of Juwai.com and Juwai.com/luxe to browse franchisees’ residential listings, chief executive Gino Blefari said in a statement.

The Chinese surpassed Canadians as the largest foreign purchasers of U.S. residential property in 2013, according to the National Association of Realtors.”…

===

Good old Buffett… His money making is not limited by ideologies about real estate as business.

Juwai.com is a very interesting site.

There are 1141 listings from Toronto, GTA, 13296 Canadian listings

http://www.juwai.com/CAproperty/r-37_c-3489

http://www.juwai.com/CAproperty

#81 I type, therefore I am on 04.17.17 at 9:45 pm

55 Trumpocalypse2017 on 04.17.17 at 8:18 pm
Nukes, as reality and metaphor in Korea and the US stock market too:

http://www.msn.com/en-ca/money/topstories/could-the-stock-market-be-headed-for-a-nuclear-implosion/ar-BBzWeMN?li=AAggNb9&ocid=mailsignout

Autocrats like Trump always seek out military distractions. But the USA economy is also ripe for huge problems, whatever happens with KJU.

Major trouble on the way, in every way.

Prepare.

==
Let me guess, you are a “TV BABY”
Spare us crusher. Nukes are a hoax: they don’t exist, all that Elvis era film footage was faked- do some research. Trump is a pay date and the guy in Korea is an actor.
Have you tried Preparation H?

#82 Nonplused on 04.17.17 at 9:46 pm

“Unlike most lotteries, however, this one has losers. Ouch.” – Garth

How do you figure that lotteries don’t have losers? Almost everyone who plays the lottery loses, just only a bit at a time. Playing the lottery is like cutting off your finger one slice at a time, starting at the end.

Derek is being a jerk. Let the poor guy out for a reasonable break fee. Contracts are only valid if they are not onerous, plenty of law to back that up. And if he asked out within 24 hours, the law is almost certainly on his side.

There is nothing to be proud about if you take advantage of someone who doesn’t know better, in any walk of life. Sure, when prices are rising you can raise yours too, but there is a reason nobody likes a used car salesman.

#83 the Jaguar on 04.17.17 at 9:50 pm

I’m still reeling from the concept of “Elgin and Garth.” Those Scots sure know how to sock it to their kids in the name department.

#19 Eco Capitalist…….would another option not be to find another house lusty buyer and assign the purchase of sale to them for a fee and then walk away from the responsibility? Or would responsibility default to the original purchaser if the second interested party wised up? I have no legal mind, only a conniving one.

#84 Lee on 04.17.17 at 9:52 pm

#70 NS Guy,

Really? Zero Hedge? If you read Zero Hedge every day you’ll jump off a bridge. Now back to the Leafs game.

#85 Iknow on 04.17.17 at 10:00 pm

Low end properties in greater YVR under $1M are selling briskly.
Really cheap properties like townhouses under $400k have appreciated over 30% in last 12 months with bidding war.
Regular detached houses under $2M, prices are not dropping.
We will believe a correction when there actually is one.
Any exaggeration only serves to diminish credibility.

#86 simplified Chinese on 04.17.17 at 10:12 pm

Why investors should expect low stock market returns going forward — in the range of 3% to 4% by hedge fund billionaire investor, Ray Dalio.

http://www.businessinsider.com/bridgewaters-ray-dalio-advice-to-individual-investors-2017-4

#87 WUL on 04.17.17 at 10:17 pm

With the bounce in bonhomie in the Big Smoke attributable to the superlative Leafs, Derek is $250K ahead by June.

#88 Doug in London on 04.17.17 at 10:17 pm

@The Lesser Fool, post #21:
You’re absolutely 100.00% right and 0.00% wrong. Derek did nothing wrong at all. The buyer should have actually thought through what they were doing before they signed a legally binding offer to purchase.

So what’s the problem here? According to the “experts” that post here, prices in the GTA are going to keep going up and up and up and up forever and ever and ever and ever, so this buyer could resell tomorrow for a tidy profit!

#89 Millennial-falcon on 04.17.17 at 10:25 pm

#76 oncebittwiceshy on 04.17.17 at 9:32 pm

http://myrealtycheck.ca/
Average Change: -1.92% Up:250 Down:651
Overall $ Change: -58271597.00 Average Change Amount:-64674.36

Nice stats there Wow bet you’ve had this lil site in your back pocket for awhile waiting to bust it out on a internet comment section, nicely done. 651 price drops out of how many total listings ? And this indicates a trend ? From a amateur site that gets its data from where? Zillow? Lemme guess your holding out for the “crash”. Good luck bud

#90 Hotdogs from Heaven on 04.17.17 at 10:31 pm

#78 MF on 04.17.17 at 9:40 pm

Still looking for a 2 bedroom condo here in the gta. No luck yet but let me tell you this market is a disaster. Everything way overpriced beyond belief. Half the lock boxes for these condos do not even have their key once you find it. Listing agents sloppy, and do not return my
sgent’s phone calls. One condo had a dog’s poop on the balcony. Nice. Tons of speculators. No one cares. Absolute joke. Yes i have noticed slightly more listings than there were a month ago, but prices are still outrageous for what you “get”. Sellers think they are little geniuses.

Have zero faith in these three idiots meeting to “discuss” the market but yes we deserve a “correction” of epic proportions.

MF
————————————————–

Check out condos in Thorncliffe Park. 2 bedroom, 2 bathroom in well maintained buildings going for just over $300,000. Buses stopping in front of the buildings going to subways at St Clair, Donlands, Pape and Broadview. Just a few minutes walk to shopping and restaurants in Leaside or a 1 minute drive to get onto the DVP.

Why the cheap prices? It now has a Sunni muslim majority and most Torontonians, despite all their pro-islam liberal views in public, privately do not want to live in a neighborhood filled with women covering their faces, big bearded tough looking men and a dozen halal grocers on a single block.

One other benefit is that these folks really control their kids so the crime rate and vandalism of other low income neighborhoods does not exist here.

Also, there are no subsidized housing buildings, all free market rentals along with the few condos and town houses so none of the social problems that neighborhoods filled with TCH homes can have.

#91 Joseph on 04.17.17 at 10:33 pm

@ Greedy. Derek listed, and someone legally agreed to purchase. Regardless of whether you think he is greedy or not, once you sign the buyers agreement, you have entered into a legally binding contract. The time to get cold feed was BEFORE you put ink to paper…not after. Remember; everyone is entitled to their own opinion…but not their own facts. You believe Derek is being “mean”; contract law says otherwise.

Good day.

#92 heartbeat on 04.17.17 at 10:34 pm

Tomorrow Trump will sign executive order on buying American first. US governments will buy American companies products and services. Many Canadian companies will lose business and laid off workers.

#93 AK on 04.17.17 at 10:38 pm

Leafs win.

Blue Jays suck…

#94 For those about to flop... on 04.17.17 at 10:38 pm

Pink Pollen falling in Pebble Beach.

This is how easy it is to find someone in trouble in Vancouver.

I simply went on zolo into my home hood of Fraser and seen this house for 2.08m

Something like that would normally be around 1.6/1.7m mainly land value and a house built in the 40’s

I thought they either overpaid last spring or are just putting a stupid number out there to see if it sticks.

Sure as hell they paid 2m last spring and now have listed it for sale at 2.08

The realtors are winning the war…

M42CA

https://www.zolo.ca/vancouver-real-estate/808-e-28th-avenue

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMjhMMA==

#95 Smoking Man on 04.17.17 at 10:40 pm

Figure it out. No man with little arms and a big belly to bitch too.

You win.

https://youtu.be/z7vbH3Yzz0Q

#96 crowdedelevatorfartz on 04.17.17 at 10:51 pm

@#80 I type, therefore I am
“Nukes are a hoax: they don’t exist, all that Elvis era film footage was faked- do some research. Trump is a pay date and the guy in Korea is an actor.
Have you tried Preparation H?”
********************************************

OMG.
You’re my hero.

#97 Eco Capitalist on 04.17.17 at 10:56 pm

@#82 the Jaguar

That happens a lot with pre-construction condos, but being neither a real estate lawyer nor a property speculator, I’m not familiar with the mechanics.

#98 I'm stupid on 04.17.17 at 11:02 pm

#10 capt. serious

What happens if Derek’s buyer can’t come up with the financing? Is he going to get into a protracted legal battle to get his money, and if so, is that really wise versus taking less for a solid close? I’m not sure, but it seems like in a developing volatile situation the answer is not usually to lawyer up; at least, not unless one really likes paying legal fees. There is quite a difference between being legally owed money and actually collecting it.

Derek can re-list the home. If he doesn’t sell for the same or more he can sue for the difference plus add in legal cost and all other cost that came from not closing at the date the buyer agreed to.

#99 I'm stupid on 04.17.17 at 11:11 pm

Why are so many on the buyers side? This is someone who agreed to buy a home worth $2million and didn’t think before he signed to buy it. He deserves to be sued, he might have caused a lot of problems for the seller. He definitely inconvenienced him and possibly cost him money (if he can’t get sell for the price of other offers). Why is the seller greedy? He didn’t force the buyer to buy his home. The buyer was an idiot and should make Derek whole.

#100 Fraservalleyguy on 04.17.17 at 11:13 pm

Meanwhile out in cow country…
Detached, condos and town homes still selling fast and over asking! Some way over, if sales are slowing this spring it’s cause sales last spring were insanely busy. Maybe still spill off from people cashing out in YVR and buying on the cheap or maybe still FOMO. Crazy that 500k only gets ya an old BC box or maybe an end unit townhouse. I guess that’s REal inflation!

#101 MF on 04.17.17 at 11:54 pm

#90 Hotdogs from Heaven on 04.17.17 at 10:31 pm

Awesome. Thank you for the tip. I will take a look, even though i am prepared to pay more for the area i want (yes the parentals are begging to help). Typical millennial situation.

MF

#102 living nice on 04.18.17 at 12:00 am

#90 Hotdogs from Heaven on 04.17.17 at 10:31 pm
#78 MF on 04.17.17 at 9:40 pm

Still looking for a 2 bedroom condo here in the gta. No luck yet but let me tell you this market is a disaster. Everything way overpriced beyond belief. Half the lock boxes for these condos do not even have their key once you find it. Listing agents sloppy, and do not return my
sgent’s phone calls. One condo had a dog’s poop on the balcony. Nice. Tons of speculators. No one cares. Absolute joke. Yes i have noticed slightly more listings than there were a month ago, but prices are still outrageous for what you “get”. Sellers think they are little geniuses.

Have zero faith in these three idiots meeting to “discuss” the market but yes we deserve a “correction” of epic proportions.

MF
————————————————–

Check out condos in Thorncliffe Park. 2 bedroom, 2 bathroom in well maintained buildings going for just over $300,000. Buses stopping in front of the buildings going to subways at St Clair, Donlands, Pape and Broadview. Just a few minutes walk to shopping and restaurants in Leaside or a 1 minute drive to get onto the DVP.

Why the cheap prices? It now has a Sunni muslim majority and most Torontonians, despite all their pro-islam liberal views in public, privately do not want to live in a neighborhood filled with women covering their faces, big bearded tough looking men and a dozen halal grocers on a single block.

One other benefit is that these folks really control their kids so the crime rate and vandalism of other low income neighborhoods does not exist here.

Also, there are no subsidized housing buildings, all free market rentals along with the few condos and town houses so none of the social problems that neighborhoods filled with TCH homes can have.

————-

you know where’s a nice place to live? Burlington…
what you described above also sounds like Mississauga.
however in mississauga the lights are red in all four directions 24 hours a day.

#103 Prince Polo on 04.18.17 at 12:22 am

Maybe WUL can confirm this (or tell me I’m an idiot)….now that Derek was told by the buyer that the buyer is not willing to perform, isn’t it in Derek’s best interest to mitigate his damages by selling for less, to another buyer and then suing the original lame-duck buyer for the difference in a breach of contract motion? I hope my law professor is trolling this website!

#104 Fred on 04.18.17 at 12:33 am

Real estate is a hormone-driven asset which trades in a market more influenced by house-porn TV shows, Facebook, peer pressure and mass media than by economic data, household income or logic.

…….

good grief.

it’s a fantastic asset. In normal conditions it appreciates approx 3% per year, you LIVE in it, raise your family in a place they call home. You are the owner, no one tells you to leave in 3mths

#105 WUL on 04.18.17 at 12:38 am

#103 Prince Polo

It’s nuanced. Just as gains are not crystallized until the shack is sold, contractual damages are not fixed until the shack is sold. Derek has to act reasonably. Reasonable marketing efforts for a reasonable time and accept a reasonable offer if one is received. That would fix the amount of the claim. A fire sale might prove improvident.

Alternatively, he could just live there and walk his dog to the Porsche showroom, have coffee with Rowat and avoid lawyers and judges. And Christie Blatchford.

#106 paulo on 04.18.17 at 1:00 am

A close real estate of mine has mentioned that many deals are failing as banks are not upping pre approval amounts, finding reasons not to advance previously approved mortgages etc. in short the squeeze is on, banks are running scared if you are still considering a purchase in this market you had better do your due diligence,and more importantly make sure you have the “conditional upon obtaining acceptable financing” in your contract. now more than ever the phrase caviet emptor applies:buyer beware

#107 Ronaldo on 04.18.17 at 1:02 am

REAL ESTATE LAW:

http://real-estate-law.freeadvice.com/real-estate-law/buy_sell_a_home/house_offer.htm

#108 Pete from St. Cesaire on 04.18.17 at 1:27 am

isn’t it in Derek’s best interest to mitigate his damages by selling for less, to another buyer and then suing the original lame-duck buyer for the difference in a breach of contract motion?
—————————————–
Probably a bad idea. You’d have to prove that he couldn’t have gotten a better price. And if it works anything like giving private mortgages which end up in re-possession, were he to get more money the first buyer might try to sue him for the difference.

#109 Word of Mouth Stage... on 04.18.17 at 3:01 am

Retired in the EU and did OK in RE but no mini-fortune – recall all these bubbles since mid 70s.

Right now, as history repeats (sorry naysayers), soon enough there will be a mass exodus towards the turnstiles to sell at any price and make any profit.

The press has just begin reporting what Garth said first, that the 416 et al RE bubble is coming or has come to an end. Then watch prices drop as the most vulnerable sellers will sell at any price to get out of the market unscathed.

Per all historical RE price drops/crashes this will take at least a couple of months to play out before the Spring buying peak ends, called “word of mouth” and people comparing notes among themselves (“is it really true?”).

After that, there is a small uptick in sales/prices (as is happening in YVR now) and then will come the crash in prices.

All you need do is Google Images “historical canada hpi index” and peruse past RE crashes, for the naysayers.

You still have posts of “not happening in my area”, to them I say: give it a couple of months.

Then there are those posting prices are comparable to 2011 – the “diehards”, same people saying months ago even if RE drops a lot, same prices as 2 years ago. I expect to read from them, prices are comparable to 2008, soon enough and saying that was no biggie…history repeats and as usual:

Greed & avarice will get you in trouble all of the time, not just some of the time.

Nicely called Garth and ignore those that blame you for not having cashed in on the windfall. They should be grateful for all your advice instead.

#110 Nonplused on 04.18.17 at 3:05 am

#103 Prince Polo

I think you are correct. If Derek’s buyer can not close, due to what ever reason, Derek is entitled to mitigated damages. But those will be based on what the actual selling price of his home was when it does sell, not what he took the sucker for.

So for example, you can’t be held to a contract that says you should have paid $40,000 for a Harley (I choose this example because Garth likes Harleys even though he shouldn’t) when within 24 hours you found that you could get the same bike for $30,000 and wanted out. No contract is enforceable within 24 hours of notice to withdraw, not even a marriage.

Derek is being a jerk, and should take what he can get in a reasonable break fee.

If Derek doesn’t stop being a jerk, he’s going to find out two things about Canadian law. First of all there is a 24 hour “buyer’s remorse” thing, and secondly that when you lose a court case in Canada you pay all legal costs on both sides. Derek may be advised by his lawyer to run this thing up, but what he isn’t paying attention to is that if he loses he pays not only his lawyer but the other lawyer as well. It’s one of the reasons our law system is so much better than the US system.

Anyway, Derek has to stop being a jerk. Take a reasonable amount of money from this would be buyer to pay his realturd and make himself whole, relist, and move on. You can’t get blood from a stone. Forcing this guy to close will just result in him being bankrupt and no money for Derek just his house caught up in legal stuff.

Remember folks, there is no point selling stuff to people that don’t have money. Your kids can’t even sell their home made shiny rocks in bracelets to people that don’t have money.

If you made a sale to someone who can’t complete the transaction, you failed to make a sale.

#111 Era of the "Man-Child" on 04.18.17 at 3:09 am

@ #3 Greedy

derek is not smart, he is greedy. what did he buy the house for $2.00 back in the 80s. he doesnt know why buyer got cold feet. maybe hes not good at math and then realized what he did. derek shouldnt ruin someones life because of a mistake. derek should relist and be happy with what he gets. remember derek karmas a bitch.

—————————————

Actually, Derek is innocent….the buyer was the greedy one. The buyer wanted to win at all cost and this may have left another bidding family heartbroken. This other family may have gone on to buy another home, but always wished they could have purchased Derek’s place.

Zero sympathy for this childish buyer. Any man who sheds tears after something he purchased is a f****** “man-child”. What a screwed up world where a “man-child” can earn enough money to even contemplate buying a 2.25 Million dollar home, yet some men can’t even achieve $40K in annual income but have the courage and self-discipline to die in silence and with dry eyes. Welcome to the new world order…

As for you “@3 Greedy”. Quit being a superstitious baby and put your karma toys away. Time to grow up.

#112 NoName on 04.18.17 at 3:26 am

The migration program should only operate in our national interest. This is all about Australia’s interest,” Mr Turnbull said.

http://mobile.abc.net.au/news/2017-04-18/government-abolishing-457-visas/8450310?pfmredir=sm

#113 nubbers on 04.18.17 at 3:51 am

Given the way real estate selling works in Canada, I think the law is an ass if someone is bound to a life-changing level of debt 24 hours later.

If I were Derek’s buyer, I would get some serious legal advice and take the consequences of backing out, rather than taking on a lifetime of servicing a 2.25 million debt.

He might need to get a bit more imaginative: flee Canada; convert savings into gold or diamonds, anything that can be buried. By the time any statute of limitations runs out, house prices might be sensible again.

#114 Koshy Alex on 04.18.17 at 4:36 am

Al Jazeera Inside the Federal Reserve

https://youtu.be/oiWorb-4Dh8

#115 Jay on 04.18.17 at 4:52 am

To #52,

Amen.

You can buy a house in this province in some towns on your credit card. Only a few cities are truly and powerfully overvalued.

I bought a couple years ago, but the price of my entire house is less than the average house in Vancouver has lost this year alone. There are options. It’s just a matter of taking them.

#116 Stock Picker on 04.18.17 at 5:12 am

I’m with Derek…..it’s idiocy to call him greedy…..the greater fool was greedy-er……and got caught with his pants down…..so what? Derek keeps the deposit as liquidated damages ( cause if he was stupid enough to waive blameless said buyer he’d get sued by the agency for the full commish) ….sues for specific performance and takes the assets of the mooch…..that’s fair. Hey…..Vegas rules baby…..the casino doesn’t give do Evers when you make a wrong bet….even if you were drunk on spazzumo.

Billions are being squeezed out of remorseful buyers coast to coast. Already A years worth of buyers have lost 50% of their Moms deposit money…..things have gone down no doubt…..the $200 grandMom ponied up for the down stroke on the million dollar starter shack just got cut down to $100 grand…..ouchy.

Billions more are leaving Canada in the industrial world…..businesses are flooding out of Ontario due to Wyno-lose nomics. Hundreds of thousands of jobs gone with them…..never mind the tax revenue.

Hundreds of billions of foreign capital have left the mining and energy patch with Trudeaus carbon taxes….no denying we’ll be hurting from this.

Yes…governments can continue to hire special interest groups into the civil services as a sneaky way to offset the job loss numbers….but someone has to pay for that. Right now Trudeau is borrowing billions in his game of musical chairs with Canadian finances…..but we all know we’re going broke when big American and International money runs….not walks out of the country.

When real estate Ponzi schemes collapse in Canada, and they will, the last man standing is the tax payer…..and who pays for all those happy new comer civil service jobs with free dental and houses of worship thrown…..you pal….only you. 100% taxation coming to a union sponsored ballot box sprayed over in Trudeau Liberal red . You’d better hope for self employment…..otherwise you lose everything.

#117 Vit on 04.18.17 at 7:27 am

Last week I lost in a bidding war for a this one. MLS#:W3748838
6 Rockingham Dr Toronto Ontario M9A1P3 Sold:$1,700,000 List:$1,150,000
Was planning to demolish and build a new one , 80% of homes on a street are new …..
So much for a slow market ….

#118 varano on 04.18.17 at 7:40 am

I Disagree with most of this article and I think we’re over exaggerating a simple truth. The markets are over priced without a doubt, but has anyone stopped to consider that spring is typically the start of when the housing market inventory starts to increase dramatically as open houses in blizzards become a thing of 4 months ago?

I’m sure that slow downs are occurring because of the provincial budget yes but we need to look at the obvious as well.

#119 maxx on 04.18.17 at 7:47 am

“The flip just switched.”

You make out with words like a “bandit”.

#120 Grey Dog on 04.18.17 at 7:58 am

Out of the deposit noting intention to purchase, real estate agents get paid FIRST, then the rest will go to Derek. Why doesn’t the purchaser just put it up for sale the moment he gets possession? Why does Derek have to go through the grief of staging again, as he is probably up to his neck in packing boxes right now.

This happened to my MIL, luckily she was heading to a Chartwell, so it didn’t affect her life too much. Personally I would have liked to see the credit rating of purchaser take a hit as he does NOT honour contracts.

#121 maxx on 04.18.17 at 8:09 am

This has been the most accessible lottery win in the history of….mankind.
It has made gobs of millionaires of ordinary people in an incredibly short time span.
Most who bought since 2000, but especially since the GFC have definitely overpaid and blithely signed themselves into funding the enjoyment, quality of life and retirements of some unbelievably lucky sellers.
Anyone buying now had better not get cold feet, because sellers like Derek will lawyer up and either force the sale or slap the buyer with a humongous penalty.

I can’t imagine what it would be like to be paying back a jumbo mortgage, worried about rate increases and job loss, knowing that the seller is wintering on the deck of a cruise ship sipping champagne – and will do for decades to come.

#122 maxx on 04.18.17 at 8:19 am

#2 Strange on 04.17.17 at 6:04 pm

“Families no longer have an affordable place to live….but hey, we’ll have lots of legal marijuana….welcome to Canada.”

Well put. It’s just another income (truly shameful) stream for government. If we thought that DUI and texting at the wheel are problems……………..

#123 cramar on 04.18.17 at 8:19 am

Neighbour that moved from Waterloo last year had family down for Easter weekend. Son-in-law’s parents from Fort Erie loved it so much here in Leamington that they want to sell and move immediately. Actively house hunting. Looking at a couple of good ones in the $220k range.

Mostly sunny days recently with temps in mid 20s on three days. Flowers & trees blooming. Counted three species of butterflies so far. Last week it was a cacophony of song birds. Cut lawn 4x since end of March. This ain’t Truro anymore, Dorothy!

When the masses catch on to great weather and cheap housing—look out below!

#124 Julia on 04.18.17 at 8:35 am

Derek entered into a legally binding contract under mutually agreed terms.

That said, there must be other options. Reasonable people can come to reasonable agreements. How about agreeing to relist without releasing the current buyer and, should there not be an equivalent or higher offer, then that one stands? Surely a lawyer can find a way.

How about the buyer tries to assign the contract?

#125 A Reply to #117 Vit on 04.18.17 at 8:37 am

“Last week I lost in a bidding war for this one….”

Does that mean you were the highest bidder, and bought the property?

#126 att0m on 04.18.17 at 8:52 am

#3 and #10 You can’t just fold a legal contract because you had a change of heart. What happens if it relists and there are no buyers? This isn’t like buying something at the Home Depot and returning it the next day, nor should it.

#127 crowdedelevatorfartz on 04.18.17 at 8:58 am

Well, well well.
Never mine Marine LePencil and Frances insufferable sabre rattling.
Seem the British PM Theresa May is hedging her bets.
Calling a snap election 3 YEARS before she’s required to. June 8th at the polls….which begs the question. Does the Queen have to show ID when she votes?
Anywho.
Brilliant stroke of political manouvering by Ms May in June.
Dont want an election a year after Brexit (2019) when the economy may be spiraling around the WC eh wot!
Might as well strike when the iron is hot and the opposition leader has his head in a pint and his polling numbers are shite.
Rule Britannia

#128 tkid on 04.18.17 at 9:19 am

To everyone who thinks Derek’s buyer ought to just refuse to buy the house, or Derek should re-list and get what the market offers, here’s the catch:

If the house sells at a lower price, Derek’s buyer is responsible for ponying up the difference. If the first sale price is 2.2 million, and the house sells for 1.5, Derek’s buyer has to cough up $700,000 to Derek. And Derek’s buyer would get nothing in return. This is law, and it has been enforced by the courts.

If I was Derek’s buyer, I’d complete the damn sale and then re-list the house for sale. Or rent the thing.

And the whole mess is why I’ve been commuting from Niagara Falls to work in Toronto. The market is nuts, and anyone who participates in it is nuts also.

#129 Lee on 04.18.17 at 9:21 am

#117 Vito,

Not a lot sells in that area for over $3M. You would have been on a tight budget, and who knows what prices will be in 2019 when you would be selling. Consider yourself lucky.

#130 traderJim on 04.18.17 at 9:31 am

Two 50 storey towers coming to Vaughan:

http://theicona.com

There is room for hundreds of these size towers on the outskirts of Toronto.

Supply is not the problem. (Although of course I’d be all for governments making it easier to build instead of harder)

#131 Penny Henny on 04.18.17 at 9:32 am

One week till my house is live on MLS.
South central Etobicoke. North of stinky Shlongbranch.
Today’s meeting to discuss Toronto’s runaway house prices will bear no fruit. Sousa’s budget April 27th will amount to nothing.
True there is more inventory in the market and prices here in Etobicoke seemed to have taken a slight step back since February.
But come May prices are back up and after that? Who knows?

#132 traderJim on 04.18.17 at 10:04 am

I agree with the smart people who say Derek’s buyer is the greedy one. The buyer is the one who thought prices would keep going up (otherwise, why buy in the middle of a obvious mania?)

Clearly the buyer either has the money (hard to make an offer without a finance condition if you don’t have financing in place) or he was a speculator never intending to keep the house but to flip it.

Now that he realizes he might not make $700k a year in house price increases he wants out.

But hey, if the law says we can all back out of RE contracts when we get cold feet, I’ll go out and make a few deals for places and see what happens. If prices fall I’ll walk away and if they rise I’ll close.

I guarantee you there are people out there right now with a lot of contracts waiting to close that the buyer is now scheming to get out of. But for the last 5 years they took the money and ran.

#133 Damifino on 04.18.17 at 10:09 am

#128 tkid

If the first sale price is 2.2 million, and the house sells for 1.5, Derek’s buyer has to cough up $700,000 to Derek
—————————————-

Or else, Derek could just “have a heart, eh?”

#134 James on 04.18.17 at 10:11 am

Caveat emptor!
The only way out is if the seller has not provided full disclosure on everything and I mean everything. I had a neighbour get into a pissing match with realtors, lawyers and the buyers due to the fact that his domicile once had been used as a drug house before he had purchased it, renoed it and lived in it for ten years. He knew it had been a drug house with marijuana growing in it when he purchased it. It was disclosed to him and he got a deal. He thought after the abatement team came in and he gutted everything it was no longer deemed as a former grow op. Wrong! To look at this home from the outside you would never ever know it was a grow op. The neighbour spent at least $180K to clean it out and re do. The home was taken down to the studs and frame literally. It looked like a GEM after he was done. I guess the old saying of you can put lipstick on a pig but its still a pig rings true.

#135 Ronaldo on 04.18.17 at 10:14 am

Well according to Phil, housing correction almost over in Vancouver. Some correction.

http://www.ctvnews.ca/business/early-signs-vancouver-housing-market-correction-may-be-over-royal-lepage-1.3373158

#136 James on 04.18.17 at 10:19 am

#122 maxx on 04.18.17 at 8:19 am

#2 Strange on 04.17.17 at 6:04 pm

“Families no longer have an affordable place to live….but hey, we’ll have lots of legal marijuana….welcome to Canada.”

Well put. It’s just another income (truly shameful) stream for government. If we thought that DUI and texting at the wheel are problems……………..
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Now there is a good question. With all of the millennials and older stoners shortly being able to grow their own marijuana in their domiciles are they legally bound to disclose this when they sell?
I don’t care if they had one plant or a hundred how would we ever know?
I sure as hell wouldn’t want to purchase a home where they had been growing it.
Can we sue the dumb ass that came up with legalizing pot? Oh ya he’s weed head too!
Can hardly wait until the grow op fires start!

#137 Braj on 04.18.17 at 10:24 am

#70 NS Guy on 04.17.17 at 9:09 pm
Real estate bubble in Canada – yes, of course.

Bubble on the stock markets also (particularly the US):

“Just How Overvalued Is the US Equity Market…”

http://www.zerohedge.com/news/2017-04-17/just-how-overvalued-market-here-are-20-metrics-help-you-decide

Get that fear mongering bull sh*t outta here. Zero hedge has zero credibility.

#138 IHCTD9 on 04.18.17 at 10:24 am

#116 Stock Picker on 04.18.17 at 5:12 am

…the last man standing is the tax payer…..and who pays for all those happy new comer civil service jobs with free dental and houses of worship thrown…..you pal….only you. 100% taxation coming to a union sponsored ballot box sprayed over in Trudeau Liberal red . You’d better hope for self employment…..otherwise you lose everything.
________________________________

That’s pretty much what I’ve hung my hat on for the near term – say over the next 10 years. Young voters, unions, and public service members and their families vote for ding-dongs like Wynne and Trudeau. Canadian politicians are cowering PC slaves with the spine of a jellyfish – they’ll always choose the path of least resistance. That path is to tax the private sector schmucks to pacify the public ones. We have already seen Wynne buying off the Teachers Union with public funds to “buy peace” and not rock the boat during her term. Everyone gets a raise, but hey – “pipe down for the next 4 years or so…”

That is why my tax remittance shrank like Trudeau’s Millennial fan club last year. I spent less to pay less. I filled tax shelters, I avoided retail like the plague.

I feel it’s going to get really stupid if major RE markets stop contributing to our economic growth and we’re left with a collection of airheaded Portland shoveling blockheads running a gong-show government in Ottawa to figure out what’s next…

#139 Penny Henny on 04.18.17 at 10:41 am

#78 MF on 04.17.17 at 9:40 pm
Still looking for a 2 bedroom condo here in the gta. No luck yet but let me tell you this market is a disaster. Everything way overpriced beyond belief. Half the lock boxes for these condos do not even have their key once you find it. Listing agents sloppy, and do not return my
sgent’s phone calls. One condo had a dog’s poop on the balcony. Nice. Tons of speculators. No one cares. Absolute joke. Yes i have noticed slightly more listings than there were a month ago, but prices are still outrageous for what you “get”. Sellers think they are little geniuses.
////////////////////////

Oh, oh.
MF is getting into the market?
Dude remember back 3 years ago you got into investing.
And then what happened. Markets down, down , down.
Now you are going to buy a condo?

I’m scared.

#140 westcdn on 04.18.17 at 10:42 am

I lost money today despite an up market. It just goes to say I am a contrarian. My youngest daughter dropped by for a quick visit. Her daughter is the sweetest thing I can know. I guess she was on her way for an Easter Sunday dinner with her mother although she didn’t say. According to other sources, my former wife has lined up with a wealthy musician. It hurts my ego but my life goes on.

#141 A Reply to #123 cramar on 04.18.17 at 10:42 am

“… euphony or symphony (not cacophony) of bird song….”

(Cacophony means a harsh, discordant mixture of sounds — not something you’d want to mention in a sales pitch.)

#142 Kris on 04.18.17 at 10:43 am

I recall 6-7 yrs ago, this blog was awash with supposed proof of the market already imploding, via similar daily anecdotes of wacko deals from.. where else but.. Vancouver. (Well, wacko by 2011 stds, not so wacko per today’s prices)

That’s the problem in extrapolating anecdotal cases as representative of the entire population. You may be right. Or you may be way off, miss major trends.. say “it’s imploding” when the market still has 8 yrs of stream left in it.

Yes, this market will turn, this year I hope. That said, I’m not convinced that everybody’s finances will come toppling down like a ‘house of cards’ when house prices correct. For every wacko anecdote, there are others who have gotten into real estate responsibly, and are sitting pretty.. on huge cap gains as well as income streams from their multiple properties.

#143 IHCTD9 on 04.18.17 at 10:44 am

#121 maxx on 04.18.17 at 8:09 am

I can’t imagine what it would be like to be paying back a jumbo mortgage, worried about rate increases and job loss, knowing that the seller is wintering on the deck of a cruise ship sipping champagne – and will do for decades to come.
___________________________________________

I don’t understand how anyone with a functioning brain would put themselves in a position like this. As I look over the Canadian landscape, I see no indications of near future prosperity, more like uncertainty, and job insecurity.

#144 ownyourmistake on 04.18.17 at 10:45 am

To greedy. Derek is not greedy. The buyer should own his mistake. Why should Derek pay for the buyer’s mistake. Shouldn’t the buyer have done more thinking before bidding? Bidding on a house is not buying a lollipop.

#145 Damifino on 04.18.17 at 10:50 am

#78 MF

Have zero faith in these three idiots meeting to “discuss” the market but yes we deserve a “correction” of epic proportions.
—————————————

Wow, bad attitude.

They intend to appoint a task force whose first job will be to strike up a committee charged with gathering public input. A formal report will be ready by the spring of 2019. Then watch out!

#146 Tony on 04.18.17 at 10:52 am

Re: #131 Penny Henny on 04.18.17 at 9:32 am

Sell before budget day or you might end up with 50 to 100,000 dollars less than you once thought. A foreigners’ tax would be an instant ten percent reduction in your selling price or what your house sells for.

#147 isuckless on 04.18.17 at 11:05 am

Three stooges getting together today won’t change anything.
The initial price drop will be reported and hailed as great government achievement.
After that, prices will go up as usual.
Low interest rates and foreign capital (I am not saying foreign buyers) are the key.
Sorry small people, this is not country for you any more.

#148 Cottingham a bargain on 04.18.17 at 11:08 am

I hope some of you followed my advice to buy Richmond hill past three years .

Still not to late . Stay south of the major on west side of yonge if at all possible ( and you pockets are deep enough) but anything south of the gamble road should work

#149 pBrasseur on 04.18.17 at 11:22 am

I don’t recall this bubble receiving more press than it does now. Bubble talk has gone mainstream, big time!

IMO that fact alone is far more important than anything politicians decide to do at this point…

#150 IHCTD9 on 04.18.17 at 11:25 am

#123 cramar on 04.18.17 at 8:19 am
Neighbour that moved from Waterloo last year had family down for Easter weekend. Son-in-law’s parents from Fort Erie loved it so much here in Leamington that they want to sell and move immediately. Actively house hunting. Looking at a couple of good ones in the $220k range.

Mostly sunny days recently with temps in mid 20s on three days. Flowers & trees blooming. Counted three species of butterflies so far. Last week it was a cacophony of song birds. Cut lawn 4x since end of March. This ain’t Truro anymore, Dorothy!

When the masses catch on to great weather and cheap housing—look out below!
__________________

I would never have guessed that folks would want a house so bad that it’s worth selling their financial soul for it.

I bought in 2000 in a tiny Village 1.5 hrs East of the GTA. Listed at 125K and we offered 123K and was accepted. 1870 farm house all redone, big pond, 2 outbuildings with over 4000 sf of floor space, 4 acres, a lush property with huge Maple and Aspen trees, cedar fences covered in vines, near 1000 sf of deck on the house, over half of it covered. It oozed charm from every pore. Moved in June that year, house had been polished to a shine top to bottom with a bottle of wine and a card from the PO’s on the counter. Our household annual income was about 75-80K back then, house was paid off in 14 years with no special effort, while we simultaneously stacked our portfolio. Compare the above to the current situation in the GTA – what you pay vs what you get, the sacrifice, the typical household incomes – I’d never buy, not in a million years.

My days right now are much like yours. I fall asleep at night to the sound of singing spring peepers out in the pond a couple acres away. I play around with my various hobbies, and ride the great local ATV trails right from my driveway. This year I am harvesting some more cedar rails off of old fence lines in the back 40 to add to my current collection of “decorative’ cedar fences. Always something to do if you like being outside.

With any luck, the GTA “standard commuting” range will eventually extend another 1/2 hr East over the next 10 years enabling us to sell our place to some knucklehead for 750K, and I’ll be able to build new on some little pc of heaven next to a lake north of 7 with plenty of cash left over to pad the portfolio.

#151 Josh in Calgary on 04.18.17 at 11:50 am

This situation with Derek is exactly why most deals, and especially real estate deals have DEPOSITS. When you’re evaluating potential offers you should consider how big the deposit would be. Basically it should be big enough that if the deal falls apart you’re happy with keeping the deposit as a trade off.

If the deposit is small then you have to question if the buyer is serious and/or has the financial ability to complete the transaction. Especially if they have not made it conditional on financing (which is stupid to begin with).

#152 Lee on 04.18.17 at 11:50 am

Ms. Wynne appears to be ready to impose a foreign buyer non-resident speculator’s tax of some sort. What about if the foreign buyers happily pay it? Won’t this just bump prices another 20-30% above wherever they are going to be next year anyway? So now instead of 20% gain next year it’ll be 20% plus the tax. Great plan.

#153 The Wet Coast on 04.18.17 at 11:50 am

To all. Our country is founded on the rule of law. Yes it even protects stupid people, but not from themselves.

#154 Chaddywack on 04.18.17 at 11:55 am

Vancouver correction short lived. Prices up 12% over last year. Apparently the market is still super HOT.

http://www.cbc.ca/news/canada/british-columbia/bad-news-for-metro-vancouver-home-buyers-as-prices-climb-1.4073731

#155 Smoking Man on 04.18.17 at 11:56 am

#131 Penny Henny on 04.18.17 at 9:32 am
One week till my house is live on MLS.
South central Etobicoke. North of stinky Shlongbranch.
Today’s meeting to discuss Toronto’s runaway house prices will bear no fruit. Sousa’s budget April 27th will amount to nothing.
True there is more inventory in the market and prices here in Etobicoke seemed to have taken a slight step back since February.
But come May prices are back up and after that? Who knows?
…..

What do you mean by stinky Shlong Branch? Place is nice.

You coming to the blog dog meet up at the forks on May 13?

#156 Renter's Revenge! on 04.18.17 at 11:58 am

The Schadenfreude is strong today. The blog dogs are foaming at their mouths and the sharks smell blood in the water. Derek’s buyer has been designated the scapegoat for this insane market.

https://medium.com/incerto/no-worship-without-skin-in-the-game-70b4aa341092

“The ScapeGoat

…The theory behind René Girard’s scapegoat, the bouc émissaire, is also about sacrifice, but as a purge, like letting blood to improve one’s health. For Girard, a contagious mass movement, reaching a paroxysm of violence, would select an arbitrary victim, developing a widespread hostility towards it or him, and spreading by a process of “mimetism”. The elimination of the scapegoat would assuage the violent tendencies of the group.”

#157 I'm stupid on 04.18.17 at 12:03 pm

#131 Penny Henny

You should troll elsewhere!

#158 Rexx Rock on 04.18.17 at 12:19 pm

$500,000 profit or more for just living in a dumpy house in Victoria.I missed the boat,I’m ashamed and embarressed of selling to early.Always go with your gut feeliing and not some blogger.Everyone in Victoria is buying new cars and boats with their gained equity.

#159 bdwy sktrn on 04.18.17 at 12:31 pm

http://www.cbc.ca/news/canada/british-columbia/bad-news-for-metro-vancouver-home-buyers-as-prices-climb-1.4073731

#160 Vit on 04.18.17 at 1:08 pm

Re#123 Just google were Leamington is and first what you see news— Man charged with attempted murder after Leamington machete attack–
yaa what a nice little city you live in …

#161 IHCTD9 on 04.18.17 at 1:14 pm

#158 Rexx Rock on 04.18.17 at 12:19 pm
Always go with your gut feeliing and not some blogger. Everyone in Victoria is [borrowing against their homes’ paper gains] to buy new cars and boats.
______________________________________

Fixed.

Buddy, your pals are borrowing their paper gains via a HELOC which they will have to pay back plus compound interest some time in the future. They likely suffered a rate bump on the entire mortgage to enable spending their equity on non-house related items.

And you’ve got sour grapes? What’s your gut telling you about your pals?

Count your blessing and check the green-eyed monster. Worry about your own house, make a plan to achieve your goals and stick to them. To hell with what everyone else is doing.

#162 rainclouds on 04.18.17 at 1:15 pm

#159

Maybe according to the people who gain by their misinformation…….

This would seem to indicate the opposite

http://www.myrealtycheck.ca/

#163 IHCTD9 on 04.18.17 at 1:38 pm

#160 Vit on 04.18.17 at 1:08 pm
Re#123 Just google were Leamington is and first what you see news— Man charged with attempted murder after Leamington machete attack–
yaa what a nice little city you live in …
__________________________________________

Right, and how many murders were there in Leamington last year? Maybe 1? That’s probably about right.

Think machete guy is local?

Where do you live? Let’s see what the crime stats are in your hood hommie…

#164 The Wet Coast on 04.18.17 at 1:49 pm

http://www.huffingtonpost.ca/2017/04/17/housing-bubble-searches-google-canada_n_16061058.html

#165 Tudval on 04.18.17 at 1:51 pm

I need to start an “Idiot quote of the day” blog. All material courtesy of top Toronto market analysts .

How about this one ” Not even the most ardent libertarian would dispute the need for government intervention in the Toronto housing market”.

Say what, Mr. David Rosenberg? Seems you don’t even know what a libertarian is, never mind you don’t need to be one to want the government out of the business of controlling markets. Look what a fine job they did so far. It’s not like they stayed out of it. The issue is not even whether they are well intended (I would not assume anything in this regard) or if the result can be fair . Rather it’s whether anyone, and least of all a bureaucrat, is knowledgeable enough to understand the implications of such intervention. Not just today or tomorrow, but also 5 and 10 years down the road.

Don’t tell me, the buyers who would be ‘helped’ by buying 10 or 20 % lower, will not consider it an investment and will not care about their equity in their homes. I guess that will happen only if govt nationalizes all property and rents it back to us. Perhaps Mr Rosenberg will at some point think that even the most ardent libertarian will not oppose such a plan.

#166 NoHopeTown on 04.18.17 at 2:04 pm

Let me just say, as someone who was totally screwed on a real estate deal last year, having the buyer okay games and want out of the deal is no picnic but you know what’s worse? Having to sue them for the deposit. Sure, you can try and include your court fees in the amount you’re suing for and go for the gusto but who gets the fun job of trying to collect the money when all is said and done? You do. Good luck with that. It’s a complete nightmare and not worth the long, drawn out process. Our lawyer advised us to walk away, hand back the deposit cheque and and realist the house and move on. That’s what we did in the end. The deposit cheque is not automatically handed over to the seller if the buyer backs out. You have to sue them for it and it could take years.

#167 Professor Munchkin on 04.18.17 at 2:08 pm

A great, great interview of a professor suggesting specific tax change for houses, to minimize speculation:

http://www.bnn.ca/real-estate/video/why-policymakers-should-look-at-a-capital-gains-tax-to-tame-toronto-housing~1103296

#168 Capital Changes on 04.18.17 at 2:19 pm

As I said, the Vancouver market is heating back up after a temporary lull….

http://vancouversun.com/news/local-news/early-signs-that-vancouver-housing-market-correction-may-be-over-royal-lepage

A 15% foreign buyers tax was a blip to foreign capital as it accommodated the increased ‘bank fee’ of storing its wealth in Vancouver RE – just like in Hong Kong after thet implemented their foreign buyer’s tax….

So much for all those toothless measures that were supposed to cool the market like the increased down payment rules and stress test qualifying at the 5 year fixed….

Well bears, you have had recessions, interventionist policies, supposed ‘increased financial oversight’ and stress tests, housing supply increases at unparalleled levels, and prices just keep going up.

Ouch…

#169 TnT on 04.18.17 at 2:24 pm

#166 NoHopeTown on 04.18.17 at 2:04 pm

Our lawyer advised us to walk away, hand back the deposit cheque and realist the house and move on.

Deposit is in escrow, any judge will deem it yours. Real Estate agents would be the ones to chase down the dead beat loser who backed out for the commission.

Then you sue for the delta (if any) on the next sale price.

You received and acted on bad advice.

#170 Steve on 04.18.17 at 2:30 pm

So about three years ago we sold our house and started renting. Our landlords are 86 years old. They can’t renew our lease. So we had to find another rental. Prices have jumped so high in the rental market that we almost can’t afford to stay in Kelowna and work our jobs anymore. Our rent is going to be nearly 1000$ a month higher for a worse place right across the street from a half way house. Other than that place, it’s another town, or life on the street. Just to clarify, there are four of us. Three of us work full time, the youngest works part time. No vices like smoking or drugs. We don’t even drink, so absolutely no money is wasted. We have a written budget that accounts for every dollar we make. Despite our earnings in aviation and professional mechanics coming into the house, we can barely afford to live in Kelowna as renters. The other thing is that we are currently in debt for 500$. That’s my total debt. We also save money every month. We can’t afford to go away, have no cable tv, never eat out, drive paid for beaters, and basically have no hope for improvement. All we do is work and come home exhausted and go back to work. This is life for gen X and millenials. The only thing that makes this a rarity around here is debt. You have no clue how close to the ground you fly until the usage of debt is removed. We actually live within our means and it looks an awful lot like poverty. I’m currently sitting on the tailgate of a 800$ truck outside of work. I almost couldn’t afford this truck. It was a hardship obtaining it. But I tell you what: I don’t mind. I sleep soundly at night because I don’t have a debt ridden life. I make a dollar, I move ahead 50 cents. I’m sure that eventually we will be displaced from the town we were born into 40 years ago. My wife, my son’s, and I were all born in the same room in Kelowna general hospital. This is our home. We aren’t covered in barb wire tattoos or full of silicone implants. We knew this place before it turned into Gomorrah. It will never be the same and that’s life nowadays. Anyone thinking of moving here had better do some research…

#171 paulo on 04.18.17 at 2:34 pm

dericks purchaser will have to complete the transaction
unless there is a other hidden situation such as no financing,making a completion of sale impossible.
the lesson dont get caught up in bidding wars and make open ended offers with no protection.

Purchasers: use some common sense, listings setting
“presentation” dates should be avoided at all costs-you will allways pay to much playing this game of greed

if you are interested have your agent register and submit your offer turn the tables in your favor
remember listing agent has to present offers if the listing is active on the mls

never make a no condition offer at the minimum make sure you have inspection clause and subject to acceptable financing clause its your largest purchase in your life you can not make a proper decision based on a 15 min walk through.

at this time take the mental attitude that it is turning to a buyers market dont forget you are buying a home not a ponzi game investment the unwarranted increases
of late are likely to vanish shortly

#172 Long-Time Lurker on 04.18.17 at 2:53 pm

#46 Buy some bonds. on 04.17.17 at 7:42 pm
BMO Bundles Uninsured Mortgages in a Canadian Bond First

https://www.bloomberg.com/news/articles/2017-04-17/bank-of-montreal-to-offer-mbs-as-canada-shrinks-mortgage-support

BMO is off-loading their risky liabilities. Anyone buying that is getting a potential time-bomb. The Canadian housing bubble is looking more and more like the 2008 American one.

http://www.investopedia.com/features/crashes/crashes9.asp

When: 2007-2009
Where: Housing centered in the United States and Britain; Credit crisis occurred around the world

The amount the market declined from peak to bottom: The S&P 500 declined 57% from its high in October 2007 of 1576 to its low in March 2009 of 676; many indicators of credit risk such as the “Ted Spread” or the option adjusted spread (OAS) on corporate bonds reached record highs

Synopsis: Following the bursting of the tech bubble and the recession of the early 2000s, the Federal Reserve kept short-term interest rates low for an extended period of time. This coincided with a global savings glut, as developing countries and commodity producing nations accumulated large financial reserves. As these excess savings were invested, global interest rates declined to record low levels. Frustrated with low returns, investors began to assume more risk by seeking higher returns wherever they could be found. For several years, global financial markets entered a period which came to be called the “Great Moderation” due to the above-average returns and below-average volatility demonstrated by a wide variety of asset classes. (Check out our Federal Reserve Tutorial.)

In the United States, the Great Moderation coincided with a housing boom, as prices soared (particularly on the two coasts and in cities such as Phoenix and Las Vegas.) Rising home prices led to rampant real estate speculation, and also fueled excessive consumer spending as people began to view their homes as a “piggy bank” that they could extract cash from to fuel discretionary purchases. As home prices soared and many homeowners “stretched” to make their mortgage payments, the possibility of a collapse grew. However, the true extent of the danger was hidden because so many mortgages had been securitized and turned into AAA-rated securities.

When the long held belief that home prices do not decline turned out to be inaccurate, prices on mortgage-backed securities plunged, prompting large losses for banks and other financial institutions. These losses soon spread to other asset classes, fueling a crisis of confidence in the health of many of the world’s largest banks. Events reached their climax with the bankruptcy of Lehman Brothers in September 2008, which resulted in a credit freeze that brought the global financial system to the brink of complete collapse. (You might also want to read Case Study: The Collapse of Lehman Brothers.)

#173 TurnerNation on 04.18.17 at 2:57 pm

MF I found you a cheap condo. And close enough to Shlong branch SM can crash in its 3rd bedroom after a big knees-up night at SS Johnny’s.

https://www.realtor.ca/Residential/Single-Family/18033594/104—3835-LAKE-SHORE-Boulevard-West-Toronto-Ontario-M8W1R3-Long-Branch

#174 Funny how... on 04.18.17 at 2:59 pm

Funny how everyone is assuming the buyer wants out of the purchase because of the high price or potential debt load.

The buyer may have found another property he would rather buy. It may not be about the cost, debt, or even about it being an investment – and looking to get out of the purchase agreement in any way possible.

#175 Capital Changes on 04.18.17 at 3:00 pm

As I said, the Vancouver market is heating back up after a temporary lull….

http://vancouversun.com/news/local-news/early-signs-that-vancouver-housing-market-correction-may-be-over-royal-lepage

A 15% foreign buyers tax was a blip to foreign capital as it accommodated the increased ‘bank fee’ of storing its wealth in Vancouver RE – just like in Hong Kong after they implemented their foreign buyer’s tax….

So much for all those toothless measures that were supposed to cool the market like the increased down payment rules and stress test qualifying at the 5 year fixed rate….

You have had recessions, interventionist policies, supposed ‘increased financial oversight’ and stress tests, housing supply increases at unparalleled levels, and prices just keep going up.

Ouch…an unstoppable juggernaut to be sure.

#176 Gary on 04.18.17 at 3:12 pm

Global economies have produced a tsumani of wealthy indiviuals awash in money. There is a dearth of countries awash in decent livability like Canada. Limits on foreign ownership of Cdn realestate is the only certain means of controlling demand generated from just one economy of 1.4 billion people. Unfair to pit an economy of 37 million economy against this goliath (& India..etc).

#177 devore on 04.18.17 at 3:43 pm

Without an escape clause to break the contract, the buyer has no way out without being legally liable for the purchase price. Once the contract was signed, it set in motion other events, like the seller buying another property with the proceeds of his old house contractually guaranteed to be available to him on a certain date. Maybe he quit his job and planned to retire or start a business. You can’t just back out of a purchase like that without consequences. Now Derek’s life is upside down, he had a sold house, now he’s supposed to be happy with nothing? Posters like #1 and others ripping on Derek are living in a fantasy world. They should try joining us here, with the rest of the adults, where decisions have consequences, and sometimes you make a bad one.

#178 Donald J Trump on 04.18.17 at 3:46 pm

Thanks Smoking Man for supporting me but your an illegal alien, Good bye Smoking Man!
President Trump will sign a double-barreled executive order Tuesday that will clamp down on guest worker visas and require agencies to buy more goods and services from U.S. companies and workers.
Trump will sign the so-called “Buy American, Hire American” executive order during a visit to Snap-On Tools in Kenosha, Wis., Tuesday, said two senior officials who spoke on condition they not be identified because the cabinet-level officials who could discuss the matter on the record were unavailable.
By combining aspects of immigration policy with federal procurement regulations, Trump is using executive action to advance his philosophy of economic nationalism without waiting for action from Congress. But like many of his previous executive orders, the order will largely call on cabinet secretaries to fill in the details with reports and recommendations about what the administration can legally do.
Specifically targeted: The H-1B visa program, which allows 85,000 foreign workers into the United States each year to take specific high-skilled jobs with U.S. companies. The program is popular with the information technology industry, which Trump has accused of “importing low-wage workers on H-1B visas to take jobs from young college-trained Americans.”
………………………………………………………………..

#179 Johnny boy on 04.18.17 at 3:58 pm

#155 Smoking Man on 04.18.17 at 11:56 am

#131 Penny Henny on 04.18.17 at 9:32 am
One week till my house is live on MLS.
South central Etobicoke. North of stinky Shlongbranch.
Today’s meeting to discuss Toronto’s runaway house prices will bear no fruit. Sousa’s budget April 27th will amount to nothing.
True there is more inventory in the market and prices here in Etobicoke seemed to have taken a slight step back since February.
But come May prices are back up and after that? Who knows?
……………………………………….

What do you mean by stinky Shlong Branch? Place is nice.
You coming to the blog dog meet up at the forks on May 13?

——————————————————-
Will you not be in Ecuador, Peru, Columbia, or Manhattan? We all hear you got a gig making huuuuge money. Given up on the writing gig and gone back to the banking slag. I have to agree Shlong branch can be very stinky at times in the summer. There is a sewage plant next door. I may come to see if your persona is as real as your bad spelling and grammar. I’m gonna bring my old lady up on the bike. Could be a hoot, will bring video cam for sure.

#180 45north on 04.18.17 at 4:12 pm

again talking about the GTA:

The backdrop is the blistering housing market that helped pay off Curtis and Sarah Blakely’s mortgage. They have just sold their renovated three-bedroom home in Toronto for $1 million – around $700,000 more than they paid for it — and are moving to a home twice as big in Ottawa with no mortgage.

the point is a lot of people are seeing the same thing

Poloz: we are in an “unsustainable zone”

notice the present tense!

http://news.nationalpost.com/full-comment/john-ivison-whoops-liberals-might-have-peaked-too-early-on-the-economy

#181 Gasbag Boomer on 04.18.17 at 4:33 pm

Ah, nothing like enjoying a Woody’s burger in Schlong Branch while inhaling the perfume from Lakeview STP.

Glad I live upwind…..

#182 Penny Henny on 04.18.17 at 4:48 pm

#157 I’m stupid on 04.18.17 at 12:03 pm
#131 Penny Henny

You should troll elsewhere!

//////////////////

Hey Stupid. Which of my comments did you consider trolling?
-Stinky Shlongbranch
-Govt policy which won’t do squat
-Prices going up in May
-I’m cashing in my lotto ticket
Which one was it?

#183 AGuyInVancouver on 04.18.17 at 4:50 pm

#175 Capital Changes – Keep in mind the articles are all based on quotes from real estate pimpers Royal LePage. Not exactly unbiased. What’s hot are condos and cheap townhouses, all that locals can afford. Single Family Houses are priced for Chinese buyers (sorry Garth but it is a fact) and they still aren’t buying. However, greedy homeowners apparently think Christy the Clown will flip flop right after the election and welcome HAM back with open arms so they aren’t lowering their SFH prices.

#184 Tudval on 04.18.17 at 4:50 pm

People are so gullible.. they are buying the line that ‘speculators’ are pushing the prices up.. how? Can they get together, corner the market, talk the market up – what’s commonly known as pump and dump? No! You can try that in the stock or commodity markets, where you can use short term, high leverage, low transaction cost, razor thin bid-ask spread, not in the housing market, let’s get serious now.

What I have seen are agents working with some – usually less than intelligent – ‘speculators’, getting them to buy and sell while the agent pockets the commission and the city pockets the taxes. Only works in fast rising markets and makes little difference – if anything a positive one: how it works is that the agent identifies pockets of opportunity and seasonal trends and gets the ‘speculator’ to act, thus adding liquidity to the market IE buy during seasonally weak periods, sell during strong period. As I said, due to high transaction costs, you also need some other wind at your back. Try it if you dare and thing it’s so easy to make money at it. IT IS NOT the speculator that pays the jaw dropping price on a shack.

#185 Carry on 04.18.17 at 5:17 pm

@ #176 Gary on 04.18.17 at 3:12 pm

It’s really funny that people still think that foreign investors, with unlimited capital, are still piling into this market. They have money because they’re smart, not because they buy after a 30% run.

#186 jess on 04.18.17 at 5:21 pm

Taxes in Nordic countries are so simple, people file them by text message

Chris Weller

Apr. 16, 2017, 12:00 PM 15,160
http://www.businessinsider.com/nordic-countries-file-taxes-by-text-message-2017-4

———
Trump said:
“I will end forever the use of H1B as a cheap labor program, and institute an absolute requirement to hire American workers for every visa and immigration program. No exceptions.”

========
U.S. President Donald Trump took aim at Canadian dairy regulations on Tuesday, saying in a speech to factory workers in Wisconsin that NAFTA trade rules between the U.S. and Canada are a “complete and total disaster” for the U.S.

#187 Capital Changes on 04.18.17 at 5:41 pm

#185 Carry on 04.18.17 at 5:17 pm
@ #176 Gary on 04.18.17 at 3:12 pm

It’s really funny that people still think that foreign investors, with unlimited capital, are still piling into this market. They have money because they’re smart, not because they buy after a 30% run.
———

Its still funny to see people think that after all the media stories of astronaut families, ‘students’ buying $31 million homes, dodgy bureaucrats being hunted by foreign governments for skimming state funds, and shell companies in BC all parking their money in BC -that foreign capital is motivated by ‘smart’ investment decision and investment returns.

Its funny how Canada’s now recognized as one of the top 4 money laundering RE markets in the world – and people still talk about smart foreign capital not contributing to the market highs.

Oh Carry, its 2017 – your foreign investor meme is so 2010…

#188 Lee on 04.18.17 at 5:43 pm

Morneau says no help from him on housing in Toronto. As I have said before, don’t expect Liberal politicians to end this boom. Elections are too close. They want to make sure this does not end badly for them.

#189 crowdedelevatorfartz on 04.18.17 at 5:58 pm

@#182 Penny Henny
” Hey Stupid”
*********************************************
Well. He does come by his name honestly……..

#190 maxx on 04.18.17 at 6:06 pm

#22 Cottingham a bargain on 04.17.17 at 6:43 pm

“Since the probability of any asset rising or falling over a given short period of time is 50/50 and since the probability of it increasing in value goes up substantially over longer periods of time , I say hold on to your house , all other considerations equal”

Much depends on your age, health, job security, health of your primary relationship, state of the economy, rate forecast and goals. So much cash has flown out of people’s wallets through their own faults that re won’t appreciate as rapidly as it has over the past decade and a half.

#191 cramar on 04.18.17 at 6:15 pm

#160 Vit on 04.18.17 at 1:08 pm

Re#123 Just google were Leamington is and first what you see news— Man charged with attempted murder after Leamington machete attack–
yaa what a nice little city you live in …

——————

First machete attack in how many centuries? Too bad he didn’t wait a week until after you googled. Sure put us on the map…for all the wrong reasons. If it happened in Toronto, it would be news also, because guns are used there most every night.

#192 Livin Large on 04.19.17 at 8:41 am

This should be an easy question to answer. A 6-6.5% annual return form a 60/40 balanced portfolio keeps being tossed out here.

Is that 6-6.5% after the 1% “fee for service” the planner gets? Even if that fee is a deduction, you only save the tax on the fee and that brings the net return down to around 5% and frankly that’s anemeic IMO.

My BMO shares keep chugging out better than that in divs alone (I bought some time ago). And the capp app has been rather sweet recently too,