Sales tank, sellers swim

Calgary realtors: “Homes on sale, so buy now!”, here

More homeowners try to sell as prices cool

The once-hot Lower Mainland housing market has cooled significantly, new stats show. Real estate stats for May show home prices have posted only small gains so far in 2008.

Detached house prices are up about 5.5 per cent so far in 2008 in both the Greater Vancouver and Fraser Valley realty areas to $771,250 and $549,610 respectively. Greater Vancouver townhouses sold for 4.8 per cent more in May ($479,000) while condos were up 3.1 per cent to $390,000.

Fraser Valley townhouses and condos are both up less than one per cent for the year so far to $341,000 and $229,700. Both those average selling prices marked a slight drop from April. Both real estate boards reported a sharp drop in sales and many more new listings from prospective sellers compared to a year ago – continuing evidence of a softening market.

Article continues here.

So much house, so much debt

CANADIAN PRESS – Never before have so many Canadians owned homes. And never before have they owed so much for the privilege.

Interest rates at or near historical lows combined with low unemployment and recent changes that allow people to buy houses with less money down and pay off mortgages over longer periods resulted in 68.4 per cent of Canadians in the housing market in 2006.

That’s up from 65.8 per cent in 2001 and 60 per cent in 1971, according to the latest Statistics Canada data. The increase comes despite the fact that the cost of housing in many cities across the country has gone through the roof, outstripping inflation by far, while median incomes have essentially flatlined.

The overall result has been a small increase in the percentage of Canadian homeowners who spend more than 30 per cent of their gross income on shelter costs, according to Statistics Canada census data.

But latest CMHC figures show a sharper spike in mortgage-carrying costs in terms of after-tax income. In 2007, average household spending on monthly mortgage payments had reached 37 per cent of after-tax income, up from 32 per cent in 2006.

“That’s significant – mortgage carrying costs are increasing,” said Recher. “This burden is heavier on the shoulders of first-time buyers because they don’t have the equity.”

One key factor in the rise of home ownership is the relatively new option of mortgages amortized over 40 years.

Paying off loans for homes over a longer period means much higher total interest costs, but lower ongoing monthly payments. The effect is increased affordability. Growth in such long-term mortgages has been nothing short of dramatic, figures show. Between the fall of 2006 and fall 2007, 37 per cent of all mortgages carried amortizations longer than 25 years, up from nine per cent in the preceding period.

One real estate investor-analyst who disagrees with the rosy assessment of the Canadian market is Liberal MP Garth Turner, who argues too many people, especially younger buyers, are taking on too much debt to buy into the housing game.

Low interest rates coupled with 40-year amortizations and negligible downpayments might make it easier to buy higher priced homes, but it’s also leaving buyers vulnerable, Turner says.

“The inevitable conclusion is that the current Canadian real estate market is floating on a sea of unrepayable, and perhaps unserviceable, debt,” Turner maintains in his book, “Greater Fool.”

Collectively, it is a lot of debt.

In total, Canadians owe an amount fast approaching $850 billion on their homes, more than double what it was a decade ago, with percentage growth in double digits in recent years. If trends continue as expected, the value of all outstanding mortgages will surpass the $1-trillion mark sometime toward the end of next year.

81 comments ↓

#1 Sphinx on 06.04.08 at 2:01 pm

….Flaherty said recently. “We’re continuing to watch that.” Keep watching, Flaherty, just keep watching!!

#2 poorguy on 06.04.08 at 6:05 pm

I love the way they paint the rosy picture of
GTA housing market :)

http://www.torontorealestateboard.com/consumer_info/market_news/news2008/nr060408.htm

#3 DavidToronto on 06.04.08 at 6:27 pm

Let’s have a look of the GTA numbers for May.

According to TREB, May saw 9,411 transactions with average price of $382,787, TREB also states that for the first two weeks of May, there were 4,422 sales throughout the GTA with average price of $400,817. So we know for the latter half of May, there were 4989 transactions with price of $395,782 – a $5,000 drop within half a month, and the sales were down from 6143 for the same period, yet they call it a steady market:)

#4 DavidToronto on 06.04.08 at 6:29 pm

sorry for the typo, the average price of May in GTA is $398,148, $$382,787 was price for May last year

#5 dobryi on 06.04.08 at 6:31 pm

http://www.rbc.com/economics/market/pdf/house.pdf

#6 jalarmo on 06.04.08 at 6:36 pm

Has someone mailed Garth’s book to Flaherty yet? If not, I’ll do it. I’m almost done reading it for a second time, and I like to think that Flaherty might at least devote an afternoon to skimming it.

Anyone?

#7 Bruce on 06.04.08 at 7:07 pm

Two things come to mind here: Either people have no idea what they’re getting into(and don’t care), or much of like what’s going in the US, the banks are enticing people to gamble with their financial future and effectively putting them in debt up to their eyeballs for the rest of their lives. These foolhardy individuals who are opting to take out 40yr mortgages so they can buy that million dollar claptrap will still be owing on it well into their senior years! In other words, a young couple in their 30’s just starting out and buying their first home will still be making mortgage payments in their 70’s, at a time when most people are retired and have little to no debts. This, of course, doesn’t include credit cards, student loans, other lines of credit, car payments, etc, etc.

#8 PoppingBubbles on 06.04.08 at 7:36 pm

There is a reason the Ministry of Finance is reviewing the Federal Government’s financial guarentee of CMHC’s obligations!

When the bubble bursts it’s going to be ugly.

#9 PoppingBubbles on 06.04.08 at 7:37 pm

Defaults were at a record low just before the bubble popped in the U.S. too!

#10 PoppingBubbles on 06.04.08 at 7:41 pm

Canadian lending standards may be more conservative than in the U.S., but that doesn’t mean they are conservative enough!! The fact is that the unprecedented run-up in prices have been fueled by a proliferation of risky lending practices such as

(i) a decrease in the required down payment from 10% to 0%

(ii) an increase in the allowed amortization from 25-years to 40-years

(iii) the proliferation of 7% cash back mortgages and other lending gimmicks (teaser rates, step mortgages, skip a payment, builder rate buy downs, etc.)

(iv) the proliferation of home equity lines of credit, and

(v) lenders not being on the hook for the vast majority of risky loans they write (CMHC guarantees low-down payment and/or extended amortizations).

No private lender without a government guarentee would insure mortgages at the same rates as CMHC given where we are at in the cycle.

#11 liverless on 06.04.08 at 8:48 pm

“Anecdotally, we are not seeing any rise in arrears or defaults across the country,”

And why would you? Prices are still going up or at worst flat in most of the country. Low defaults are being used as evidence of better underwriting standards, but it is really only evidence that Canada hasn’t reached the stage the US has.

Now if you can state that we have low defaults after house prices have gone down 10% then I might believe it is evidence that our underwriting standards are ‘much more thorough’. But right now, it means nothing.

#12 moxie on 06.04.08 at 9:05 pm

i love this:
.
“Toronto REALTORS® are passionate about their work. They adhere to a strict code of ethics…” but we’ll overlook all those phantom offers! They really are looking after your best interests.
——– :-P

#13 Terry on 06.04.08 at 10:17 pm

My biggest fear is another 1970’s where Alberta boomed and the rest of Canada sat in the toilet. Alberta went through growing pains much like we have been going through in the last few years. Growth is not always a great thing as it brings it own set of problem such as
homeless poverty, crime and health care system unable to handle growth beyond 1-2% a year, try to get a family doctor in Alberta. Alberta greatest time was the 1990 as it was able to build and attract new business away from the cycle of boom and bust of oil and gas. Much of this new business we have seen in the 1990’s has now left as cost of doing business in Alberta has become to high. Want to see how Alberta is doing, count the daily never ending lineup of car at the local Tim Hortons, Alberta new barometer of economic health. Alberta need a break as it tries to play catchup.

To many people on this site seem to enjoy the pain and suffering that many Canadians are going through and the sad reality is there is more pain to come. The same goes for the US as many Americans ended up being sold sub prime mortgages that even some lawyers could not understand.

#14 T.O. on 06.04.08 at 10:25 pm

Boomers own more homes – and owe more – than ever before:

http://www.theglobeandmail.com/servlet/story/RTGAM.20080604.whousing05/BNStory/National/home

#15 vultur on 06.04.08 at 10:37 pm

I can’t comprehend the venom in these posts. Why do the majority of people here take such pleasure in seeing other people lose money? Take a look at yourself in the mirror and ask yourself,

‘what is so desperately lacking in my life that I need to seek comfort from the suffering of others’

Only then can you begin to understand the true source of your suffering.

Back to the story, low unemployment, low interest rates, should carry the GTA housing market through the brief slowdown that we will experience. Don’t ever overleverage yourself to get in the market but don’t sweat the minute-by-minute pricing of your home or you’ll go slowly insane.

#16 Peter on 06.04.08 at 10:59 pm

These realtors are the real PUMPERS of the housing market !!! No one knows who are the buyers of these phantom offers except that they will throw in as more as they can to boost the sale of a home until the real buyers are bidding on higher and higher and accept the FINAL offer…The real buyer are the one who get BURNED very badly when these bidding wars often raise up 100 % – 150 % of the asking price….It also creates an illusion of these coming sellers who wish to sell their homes that their home is worth close as much or more as much as the previous ones…How ethical they are when they say we sell it for you !!!

#17 Terry on 06.05.08 at 12:16 am

To Peter
Grow up, most realtor’s are hard working honest people who try to establish a reputation of honest dealing. Always remember realtor’s are in business to make money, just like bankers and lawyers. Those who do break the rules do not last long or lose there license. If you feel uneasy dealing with your realtor, walk away. Maybe the buyers and sellers should learn a little before stepping into the biggest financial decision of there life. Like anything else try checking into the history of the agents you are dealing with. If you find yourself in a bidding war, walk away. If dishonest realtor’s find buyers willing to get into a bidding war, the buyers are just as guilty and stupid. As a wise man once said, dishonesty is feed by greed.

#18 sum1 on 06.05.08 at 1:22 am

Peter,
you post is absolute crap. Absolute Horse shit. I read this and many other blogs and try to bite my tongue to not get in on these pointless conversations from people who CLEARLY have no idea what they are talking about. To Peter and mike I believe, from the Calgary related topic below this one refering to these “phantom offers”…
1)At least in Calgary almost no one is getting into multiple offer situations anymore, and havn’t been since May of last year. In the rare case there is one, it is not for much over the list price, if at all. Also, the only reason now for multiple offers is if the list price is so good that it grabs the interest of a few serious buyers, and only for quality homes that are likely worth every penny.
2)Want proof of the other offers? Hmmm, how about, oh I dont know, ask the flippin realtor to see a page from it? If they wont produce a page then, perhaps there are no offers…except for one thing. The realtor would INSTANTLY lose their licence to practice real estate forever, across canada. You would report them to their local board after all right? I HIGHLY doubt there are any realtors running around doing this.

3)Your comment about the bidding war raising the price 100-150%. That just made me laugh. You know other people read this right? Oh man, what a f-ing joke. So, tell me the story were you heard about a $350,000 (approx average price across canada) home for sale, where there were mulitple offers, and the winning offer was $700,000, or even better, +150% to $875,000. oh god, this is the exact kind of pointless blather that got us here.
“My buddy said….I know a guy who sold for…. realtors trick people into multiple offers and double end deals then shun buyers away….” its all crap. Half truths and twisted words..like when kids play that game, they wisper a sentence into one kids ear, then after ten kids it is a totally different sentence. The MEDIA has got you by the balls. None of this is reality. It is simply what makes a good story, and sells papers, therefore perpetuating more myths and half truths, that uneducated masses buy into when they are told to.

One other point about REALTORS for you all. You all love Garth and his wisdom so much.

Did you read his reply to a comment where he said he has sold dozens of homes, used a realtor every time and was happy he did it. Happy to have the assistance and guidance of a professional, and glad to pay for it, as Im sure it eiather netted him a gain, or got him out of a home he no longer wanted to be involved with-both valuable. If the market is going to crash, and most fsbo’s fail to sell and hire a realtor after they realize they cant do it, just ask your self- would you pay 15,000-20,000 to not lose $100,000? Or in a raising market, would you pay the same to have a good realtor get you into a quality property for your income that makes you tens if not hundreds of thousands of dollars? And my last note on this too long of a rant-
hire a good realtor and you will do fine. If you cannot tell what constitutes a good realtor versus a bad one, perhaps you are playing the wrong game.
btw I am a realtor. Im good. Im honest. My team sells 200+ homes a year. We dont cheat anyone. we dont lie. We work hard. We are WORTH it. We earn it. We deserve it. Dont agree…? again get your licence, come see how “easy” it is. -Cheers

#19 patriotz on 06.05.08 at 2:14 am

Why do the majority of people here take such pleasure in seeing other people lose money?

Who says we do? Anyone who buys a house at an inflated price – not justified by rents – is going to lose money, unless they can unload the house onto a greater fool. Regardless whether prices fall or just stay flat.

The sooner house prices return to sane levels, the fewer people will be throwing their money away for the rest of their lives paying off a 40 year mortgage.

Isn’t that a good thing?

#20 Sam on 06.05.08 at 2:26 am

Vultur,

The fact that you cannot comprehend the posts is because you are in the minority over here. If I start to answer your post it will take me a long time.

P.S: I see the change in your tone from ‘ the bust talk is all bull’ to ‘ brief slowdown’ in RE. Looks like you have finally had your cup of coffee. I would advise you to keep your pecolator on……

#21 David on 06.05.08 at 3:16 am

I think Vultur is incorrect saying critics of the housing bubble are gleeful cheerleaders for the impending housing price crash. Most of the overpriced housing inventory may well prove to be a financial albatross for millions of Canadian families for decades to come. With changing patterns of energy use and transportation systems, put quite simply, the folks who hold own these homes might be unable to sell their homes at any price. Even staid and stoic Winnipeg has seen home prices increase between 150% to 200% in the past 8 years. There are also many instances of a consistent pattern of over bidding on list prices.
One can suppose that the biggest permabulls of the housing industry are the vastly over leveraged folks who simply paid too much for their homes. Vultur might wish to attribute the bearish sentiments from a few naysayers huddled in their crummy apartments, but that is simply not so. One can only balance a balloon on a pin for so long. Most sensible Canadians are already quite aware of the inherent dangers 40 year nothing down mortgages on fall apart McMansions and McCondos.

#22 Bruce on 06.05.08 at 8:16 am

I’ve said before as I’ve maintained all along: The biggest single mistake in the history of banking and economics was going off the gold standard, and how our currency was essentially reduced to monopoly money in the process. Trillions and trillions of dollars of worthless paper, all backed up with NOTHING but massive debt and over-inflated homes that we are now losing… Oh the irony! OH, the misery! You ain’t seen nothing yet!

#23 Marky Mark and the funky bunch on 06.05.08 at 8:19 am

Of course people are upset here……….first and foremost…….there is no reason to be financially responsible and prudent with your money anymore…….. we should all spent like a drunken sailor…….its a consumer economy for heaven sake………it will never bust if we just keep spending other peoples’ money.

I’ve met people who have no idea how they are going to pay off their university loans yet see no problem in buying a home?……….please explain the rational fundamental economics behind that line of thinking?

You have various Realtor organizations saying now that price appreciation is in the single digits, affordability is now in reach, yet the average home prices at record highs……….again please explain this rational, because it just seems highly irrational to me.

There is a construction industry building crap quality homes using thousands of illegal workers just for the benefit of some home builders, yet where will they be in coming years when these pieces of junk fall apart……………I can just see it now when people line up wanting government hand outs because they can’t sell these self destructing places.

Then there is the CHMC calling themselves “innovative” for creating the 40 year mortgage and insuring without any consideration of who will have to pay for this damn mess very soon………….I have another word for it……….a financial ‘time bomb’…….notice how inflation is kicking in and prices are going up…….well guess how you flight inflation…….raise interest rates……..but don’t worry the next line of ‘innovative’ mortgages at CHMC are in the pipe……freedom 100…….in 100 years your dream home will be your great grand children’s

So yeah, I am bitter because this is all a shell game at this point and in the end, even though I chose to be on the sidelines because none of it has made any financial sense to me and watch this non-sense quickly come to the end……….I will end up paying as a tax payer in the end to bail out these very people who say on this board that I am being ‘such a downer’.
Garth…….keep spreading your ‘gospel’…….as the truth will set us free!

#24 moxie on 06.05.08 at 9:21 am

i <3 being a spectator in this blog.
.
where i live, there is a house around the corner that listed 2 weeks ago at $549,800 for 1900 sq. ft. and a postage size back yard (i.e pretty much an alley way). after the 1st week of open house, the price dropped $10,000. after the 2nd week of open house, the price dropped another $ 10,000.
.
i’m seeing if it’s dropped another $10,000 this week.
.
the rea estate agent said to me the 1st week that real estate prices were”stabilizing” and it was a good time to buy. who was she kidding? it looks like price freefall to me. :-O
.

#25 Andrew on 06.05.08 at 11:20 am

Homes in foreclosure top 1 million

http://money.cnn.com/2008/06/05/news/economy/foreclosure/index.htm

Mortgage bankers report hits grim benchmark in first quarter, showing that the housing crisis is growing more dire.
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NEW YORK (CNNMoney.com) — More than one million homes are now in foreclosure according to a trade group, showing that the housing crisis is growing worse.

The Mortgage Bankers Association’s first quarter report showed that a record 2.5% of all home loans being serviced by its members are now in foreclosure, which works out to about 1.1 million homes. That’s up from the 2% of loans, or about 938,000 homes, that were in foreclosure at the end of 2007.

The report also showed that 448,000 homes, or about 1% of loans being serviced, began the foreclosure process during the first quarter. That’s up from about 382,000 homes, or 0.83%, that entered foreclosure in the last three months of 2007.

This marks the sixth straight quarter in which a record percentage of loans went into foreclosure. The trend has led to widespread declines in home prices, as well as huge losses for banks and other financial firms that issued or invested in the loans.

Nearly half of the homes in foreclosure are concentrated in six states. But those states are undergoing two very different types of housing meltdowns.

California, Florida, Arizona and Nevada have been hit by a hangover after a home building boom in the middle of the decade, which was fueled by rising home prices and investors snatching up real estate using risky mortgages. Those four states have about 368,000 homes in foreclosure, or a third of the nationwide total. Roughly 3.7% of all of the loans in these states are now in foreclosure.

The other two states that are ground zero for the crisis – Michigan and Ohio – have been hit by the more traditional economic woes stemming from rising job losses, particularly in the automotive sector.

Ohio has about 61,000 homes in foreclosure, while Michigan has about 54,000. The foreclosure rate in those two states is 3.9%.

Seems like the saga continues down south ..

#26 Torontonian on 06.05.08 at 11:29 am

I have noticed alot of “reduced” signs for houses for sale in my area.

Things are sitting alot longer. Treb numbers for May show 19% drop in sales and 15% increase in unsold homes.

Only a matter of time before it gets very ugly.

#27 Jeff Riverdale on 06.05.08 at 11:46 am

I was watching a show on the HGTV last night called “Property Virgins”. The show had a realtor helping a young Toronto couple find a home. The couple had an idea what they could afford for total monthly payments. The realtor though was able to convince them they could afford a lot more and still stay with a 25yr. amortization. Mind you she didn’t take into account, CMHC fees, Property taxes, legal fees etc. I think the young couple had the math figured out – not the realtor. But what I loved best about it was when she said ‘The Banks know how much you can afford and have all the statistics to prove it’ Odd, I wonder how the realtor can explain a financial institution like Washington Mutual (same size as a Canadian Big 5 Bank) who in their 2005 annual report mentioned how ‘We know Real Estate” & “We know lending” at which time their stock was about $60 a share and their annual dividend was about $2.10/yr. Now it’s about an $8 stock with a 4 cent / yr. dividend. I’m fairly certain that they were confident in their ‘statistics’ when they were lending money, just like our banks are right now. Buyer Beware!

#28 Mike on 06.05.08 at 12:18 pm

To Sum 1

Remember the saying..”me thinks thou dost protest to much”
We obviously knew you were a realtor. No illusions there.
No one worships Garth but his points are bang on.
People have relied on real estate to be their big bang homerun to make lots of money. Aiding and abetting in that process are …well guess… People should diversify.. solid advice from Garth… Only way to make money in real estate is to sell it while it is worth more than you paid…. seems logical no complaints here.
I have no issue with Garths points in this forum or in the book. Others have said and written it as well .
I am sure Garth uses many realtors as he admits in his book that you have to get the right one. Agreed. He was a real estate investor and clearly he had to use realtors to be a real estate investor.
Bottom line… many prices are forced up by clumsy or greedy realtors. My realtor has had a number of realtors call her back to get us back to the table to renegotiate or put another offer back in because we may lose out. This is not something I read about or that a friend of a friend might have heard… but what I have experienced over the past 10 months.

Bottom line.. buy low sell high. Don’t get caught up in emotion… its just a house…. don’t be pushed into something you can’t afford…. trust your instincts… if you can’t pay for it then don’t buy…. all sound advice in my book. Some realtors do agree with this but alot tell me to buy now before its too late…..Caveat emptor
really applies to real estate … just be careful.

#29 brazer on 06.05.08 at 12:43 pm

Home sales fall for 5th month
Tough economic times, dwindling affordability hit Toronto market

http://yourhome.ca/homes/article/437201

#30 SMWhite on 06.05.08 at 1:33 pm

Garth, it seems Vultur has jumped from the denial and anger right to the BARGAINING stage of the five stages of real estate.

http://www.greaterfool.ca/2008/03/25/stage-one-denial/

“I can’t comprehend the venom in these posts. Why do the majority of people here take such pleasure in seeing other people lose money?”

Vulture, you had you days of being a real estate guru with no recourse, watching your net worth climb for no reason other then the free market system was being plugged with cheap money, people will take pleasure in seeing others loose because real value investors will win, the little guy that knew buying one house let alone two because he saved an actual down payment will win, isn’t that what its all about? Persistence and patience pay off, not following the masses. It isn’t pleasure, its capitalism at its best. You play the game you pay the price if you get to greedy in quest for the easy money…

You’ve finally shown your true colors and the fact your are a real estate hack/shill. You’ve claimed time and time again that your screen name “vulture” tells the true story of your true intent, but I believe that your all smoke and mirrors. You use the “vulture” screen name to try and give yourself some credibility that you are a smart investor looking for properties/foreclosures on the cheap at somebody’s expense, but yet you continued to ignore all the facts, figures and signs that the average buyer is no longer available to peruse this market. Your acknowledgment of a “slowdown” sounds like that of the neo-cons on Fox finally admitting two years after the decline of real estate in the US that there actually was a problem and it wasn’t as minuscule as you try to make the “herd” believe.

Vulture, continuing to be a real estate bear garners you as much credibility as the banks, CREA as well as CMHC.

On one final note, talk about venom, your the one slagging Garth Turner on this site continually, or anyone with a view that doesn’t coincide with your own real estate investments a la Toronto, now your crying about people being “meanies” by not believing your fairy tale real estate rhetoric, idiots like you caused this problem and happy investing in Calgary and Toronto…

PS Are you Gregory Klump?

#31 patriotz on 06.05.08 at 2:39 pm

many prices are forced up by clumsy or greedy realtors.

No they’re not. Nobody has to buy any house. It’s the buyers, and the buyers alone, who force up RE prices.

#32 moxie on 06.05.08 at 2:43 pm

“many prices are forced up by clumsy or greedy realtors.”

“No they’re not. Nobody has to buy any house. It’s the buyers, and the buyers alone, who force up RE prices.”

i disagree. many biding wars were instigated by real estate agents submitting phantom offers.

#33 moxie on 06.05.08 at 2:49 pm

The secret’s out on phantom bids.

http://www.thestar.com/article/256968

#34 SMWhite on 06.05.08 at 2:56 pm

#29, well using fear as a selling tactic didn’t help the economically ignorant… So the buyers, sellers, media, RE agents, CREA, CMHC and politicians can all take a big slice of the [email protected] sandwich being served for supper.

I personally blame the media for doing their best to distort the truth, Pete Mansbridge last night recommended in a 2 minute snippet on housing on the National that 30% was the number/guideline to follow for cost of housing to income… Stating that some people are going over that and it COULD be a problem.

Love how the media after being the biggest pumpers are slowly trying to get a bit of credibility back. Heard Garth was on TV, is there a link to the story or video?

#35 Calgary_buyer on 06.05.08 at 3:20 pm

But who give expert advice to those buyers?
————–
Houses always increase in value in the long run.

As a renter, you have no opportunity to build equity.

Renting is just throwing money away.

All real estate is local, so you cannot say anything about the national market.

A rental house provides good income.

House prices never fall (in my city).

House prices don’t fall to zero like stock prices, so it’s safer to invest in real estate.

They aren’t making any more land.

Owners can change their houses to suit their tastes
The house down the street sold for 10% over asking, and that proves the market is still hot.

I was lucky that my realtor told me to increase my bid by $50,000. Otherwise I would have lost, because my realtor knew about a secret bid $40,000 above mine.

The MLS proves things are great.

Rich Chinese (or Europeans, or Arabs) are driving up housing prices.

Newspaper articles prove prices are not falling.

It’s not a house, it’s a home.

If you don’t buy now, you’ll never get another chance.

—————-

#36 Mike on 06.05.08 at 3:21 pm

“It’s the buyers, and the buyers alone, who force up RE prices.”

And why would buyers want to pay more pray tell.
It is the realtors who have “night of offers”….”please fax all offers to the realtors home office address”…
It is the realtors who set the prices for the buyers to set their price . Hell, one realtor came out with a price by saying another house sold for xxx price and this one needs 100K worth of work so list it at 100K below the other. Of course he has no way of knowing what it cost to make the houses comparable other than guessing.
It is the realtors who sometimes put the houses up for below market value to attract lots of buyers only to see it sell for above even what they deem market value. The buyers are coaxed into bidding wars just to buy a house
“better buy it now or next year it will cost more”
Buyers would never say that unless they are utter novices.
Buyers are looking for low prices and are suckered into the fray seeing the reasonable price of a home.
I had one agent tell me the owner was his client that he sold it to a year ago for 560K and now was asking 630K. When asked what they did for this increase… he said .. just cosmetics. When I indicated that after closing his seller would not make much money he quickly retorted “well this is going to go for 100K above asking” I said
ya think? He answered “oh I know it”. How would he know. Makes you wonder.
I put an offer in on a commercial property that had been on the market for 10 months or so … had finally relisted at a lower price. No offers… until the day I did an inspection and put my offer in… in comes two other offers. Gotta wonder where these people came from
Who tipped them off? Where they agents?
It is a murky business at best and really it was not at all like this 15 or so years ago from my recollection.
Try and find a deal in T.O. They get snapped up before it even gets to public MLS..

#37 Internal Exile on 06.05.08 at 3:31 pm

http://vancouvercondo.info/forum/viewtopic.php?f=2&t=63

Better make an offer – it won’t last long.

#38 Terry on 06.05.08 at 4:02 pm

A solution to housing prices.
Prices of RV’s crash as fuel prices roar to an all time high. We all buy big gas gussling RV motorhomes. This allows us to move to areas where job are plentiful and parking at Walmart is always free.

#39 ThePope on 06.05.08 at 4:17 pm

Patriotz: Amen.

Particularly at a time in the cycle when rent is cheaper than buying, how is a realtor going to FORCE anyone to buy? Thats ridiculous. People buy because they think its the right decision for them personally, anyone who buys because a salesperson tells them to gets exactly what they deserve.

#40 Internal Exile on 06.05.08 at 4:34 pm

Don’t try to tell me Vancouver RE is overpriced:
http://vancouvercondo.info/forum/viewtopic.php?t=63

#41 Islander on 06.05.08 at 4:37 pm

Patriotz, you beat me to it.
There are many valid criticisms of realtors. But we do not force up the price of anything.
A buyer has a choice: pay the price or walk away.
Free will. Some of you people ought to check out the concept some time.

#42 Wealthy Renter on 06.05.08 at 5:45 pm

“These realtors are the real PUMPERS of the housing market !!! No one knows who are the buyers of these phantom offers except that they will throw in as more as they can to boost the sale of a home until the real buyers are bidding on higher and higher and accept the FINAL offer.”

Peter, this happened to us! We contacted one of the “top sellers” in Etobicoke. We wanted to put an offer on a house in a dual agency situation. We were told that they only way we could get the house was with a “solid” offer which was defined as $50K over the asking price, as there was going to be a bidding war.

When she said we were uninterested in paying more than the asking price (with a thank you,) the agent phoned her at worked a brow-beated her with a condescending lecture on how we were blowing an investment opportunity of a lifetime. My wife (with many years post doctoral education and superior math skills) is sometimes underestimated, but has never been so belittled in a conversation.

If this is a “top ten seller” in (can’t rember the geography,) we can’t wait to deal with the number 11 seller.

The house sold for $9K over asking.

I normally could care less how anybody makes a living, but I now have zero respect for used home salespeople.

#43 Wealthy Renter on 06.05.08 at 5:46 pm

Sorry sloppy keying- at work and brow-beat her.

#44 Vultur the Hypocrite on 06.05.08 at 6:52 pm

I guess people get as much glee from those loosing money as do vermin like you did post denial. Your previously antagonistic postings towards those who have failed to fall into your ponzi scheme or agree with your convoluted logic towards housing. Go away Vulture, you are nothing but a cockroach about to be stomped on.

#45 Jas on 06.05.08 at 8:48 pm

UK House prices: Market sliding faster than in the 1990s recession

House prices are falling at a faster rate than during the recession of the early 1990s, according to data released by Halifax today.

Britain’s biggest mortgage lender said prices fell by 2.4% in May, wiping almost £5,000 off the value of the average house.

The decline follows a 1.3% drop in April and a shock 2.5% drop in March – the biggest monthly decline since 1992 – and means prices have fallen by around 6.5% in the past three months

More here:
http://www.guardian.co.uk/business/2008/jun/05/housingmarket.houseprices

#46 Jas on 06.05.08 at 8:59 pm

CALGARY, June 2 /CNW/ – “Now is not the time to wait until the sale is over and then decide to buy; after you read a headline, the best time to buy has passed,” cautioned, CREB(R) President, Ed Jensen.

Hello President Ed Jensen:
This is housing market, not stock market. It won’t be discounting the RE market conditions 6, 9 or 12 months ahead.
People will enough time to ride the next train but thanks for your ‘sincere’ advice.

#47 vultur on 06.06.08 at 12:00 am

Shock, sadness and horror sums up the tone of this graveyard of lost of souls. So many of you are just sinking further into this extremely painful state of angst and suffering which at its heart demonstrates severe inner turmoil and enormous inadquencies in your own personal cirucmstances poorly disguised as a misguided sense of moral justice accomplished by falling house prices.

The problem is elsewhere- is in trouble at home, with family, friends, work that drives you all to take away other people’s happiness as a bitter attempt at making yourselves feel better? Tragic is the only way to describe this contact.

The housing market has clearly seen its peak. As an investor who has been at all for longer than most of you have been breathing I suspect this may present an interesting opportunity for me to add to my holdings, though the better areas tend to be less affected by downturns that the poor areas which I’ve always avoided.

I think that what most people seem to be overlooking is that the overwhelming majority of homeowners in this country are not over-leveraged and probably are well on their to way to paying off their properties. They dominate the housing market overall. It’s the marginal buyers that may be pushing prices artificially higher with some turbo boost from longer amortizations but the majority of the owners are not highly leveraged and not looking to sell anyway.

I think that most of you will be very surprised how resilient Calgary will prove to be in this next few years, particularly the high rise condo market. The inventory will get absorbed much quicker than any of you believe.

#48 Future Expatriate on 06.06.08 at 4:49 am

Moxie, thanks for posting the article about phony bids and offers. I had NO idea they were illegal, and I’ve just been going around with a certain pair that do it as a matter of course and I’ve got the e-mail proof to back it up if I choose to pursue it.

Thanks!

#49 moxie on 06.06.08 at 7:36 am

@ future expatriate:

i would report them to the real estate board or file a formal complaint if i were in your shoes.
.
can you really trust them now to look after your interest?
.
are they really professional?

#50 Mr 70s on 06.06.08 at 7:45 am

A counter argument.

I think for first time homebuyers in the Toronto market this is the right time to buy. Why? Interest rates are at the lowest they will ever be for the next several years.

Spiraling world inflation (soon to be double digit like in the 70s) and Bernake’s call for a strong US$ suggests interest rates are going to start moving up dramatically after the US presidential election. I remember my father crying over 20% interest rates and not being able to afford to buy food for our family. Have we all forgotten: interest rates will have to keep pace with inflation. Who will afford a house at 10%+ rates.

People on this site are salivating over a possible price collapse. It won’t happen in Toronto. I agree it will soften, 5-10, maybe 15%. The true loss will not be in home prices but in the declining overall buying power of your $$. Think about it, with inflation averaging 5-7% a year, (or more) home prices can stay flat and still loose value.

Why wait 2 or 3 years for slightly softer house prices only to be hit by rocketing interest rates.
Buy now when your $$$ are still worth something and lock in before the rates rise.

I’m not a realtor – just a guy who thinks the looming inflation crisis is the true evil.

#51 PBrasseur on 06.06.08 at 8:46 am

@ vultur and all

I think there is a pretty good possibility that you (vultur) in fact are right. For sure as inflation kicks in and the economy slows the RE market is going to slow and even decline some, maybe a lot in a few hot spots, but after reflecting (and even after reading Garth’s book) I’m not so sure either it’s going to collapse. Even in the US things have to be put in perspective, for talking to many people down there it appears things are not always as bad as big media describes it. Media distortion these days is so intense they make economic down cycle (or sane correction) look like the great depression.

The problem with many posts in this blog and M Turner’s message is that much gloom and doom talk is backed up by a bit too much empty leftist rethoric which makes me suspicious of the whole thing.

For example a lot of M Tuner’s argument is based on the assumption that household income has stagnated during the past 20 years, as stated by Canada Statistics. Well I’m sorry but that’s just bull. For instance in 20 years many people have left welfare and unemployment to enter the work market, enriching both themselves and the country in the process but pulling down the average and median houshold income. Also a household is comprised of less people today than 20 years ago as there are more single parent families. This also bring the household average down but that doesn’t mean individual workers income have stagnated, in fact it’s just the opposite.

And there are many other statistics that Mr turner throws at us in is book that should be put in perspective.

As a matter of fact, despites leftists claims to the contrary, the north american economy is basically sound and in the past 20 years our standard of living has improved dramatically. Much of the growth in the RE market simply reflects that. It is just BS to say like Garth Turner is his book that North America produces nothing and most of the recent economic growth was based on hype and credit.

That is not to say that there is not some hype and that a correction is not in order, but don’t expect a collapse, it just won’t happen. As vultur says the vast majority of owners have their finance well in order. True they may not be saving enough for retirement but that won’t provoke a near term RE collapse.

In the long run it’s a different issue. RE is part of a bigger problem linked to the aging of our population and the un-sustainability of the welfare state throughout the western world. It is true that investing too much in RE and not enough in our own retirement may prove to be a mistake as it is pretty clear the state will not be able to keep all its promises. It is good to discuss these things and warn people about it but there is no reason to panic (yet).

#52 David on 06.06.08 at 9:04 am

Vultur, you think that the bubble was a source of family happiness and financial security do you?
Apparently you seem to believe that the financial carnage being witnessed now in the USA is some anomaly or minor accident of history. The condo bubble in Calgary is benign and will not metastasize into a true stage 4 cancer based on what you are saying. Many like yourself said the same things about San Diego and Miami. Flawed fundamentals, rampant speculation, ridiculous financing schemes and over building will somehow produce a soft landing in Calgary that happend nowhere else.
The actual number of Canadians with free and clear title to their properties is well under 25%. The majority of the new mortgages being written have little equity and nothing down and are for amortisation periods longer than 25 years. Perpetual debt equals wealth and happiness based on your argument. Maybe the rest of us are missing something that you are privy to and can not apprehend due to sheer stupidty and envy.

#53 Mike on 06.06.08 at 9:25 am

To Wealthy Renter

Nice to know that this kind of stuff just doesn’t happen to me or that I am the only one who feels this way about the REs. I guess it really isn’t nice at all when you think about it. We too will soon be wealthy renters. Any recommendations as to area and pricing. How did you find your spot? The newspaper?

#54 SMWhite on 06.06.08 at 10:23 am

Calgary_buyer, sounds like the typical RE rhetoric , you do know that your not supposed to eat the sand from the oil sands. I hope to goodness your not serious but I love the cliches so I’ll play off em.

(1.) Houses always increase in value in the long run.

Sure, people get older too, but if you buy at the top of a bubble you’ll need 10 to 15 years to get your “investment” back. Look into prices in 1988 & 1989. Average over time is 4% to 5%. If you had bought in 1989 it wasn’t until 2003 you increased the worth of the property.

(2.) As a renter, you have no opportunity to build equity.

Yes you do, especially if your paying 1/3 of what your mortgage and carrying costs would be to rent/versus mortgage; investing in treasuries will at least net you the 5% – 6% or around what a home will pay. More careful attention to stocks can net you 5% – 10%+. Gas/Oil and metals have returned substantial profits compared to RE over the past 10 years, 400%.

(3.) Renting is just throwing money away.

Everyone needs shelter, under the right market conditions renting is a better investment in shelter then a home(Like right now almost ANYWHERE in Canada). A better example of throwing money away is a 40 year mortgage, the bank gets your interest and invests into common stock getting the 10% while you just make your rent checks out to the bank for 40 years.

(4.) All real estate is local, so you cannot say anything about the national market.

Eat more oil sands, that’s like saying water is wet.

(5.) A rental house provides good income.

Does it cover your mortgage, does it cover taxes, does it cover maintenance? In this market, probably not. If it isn’t covering those then your investment is LOSING money. Using the simple P/E ratio will tell you how good of an investment it is.

(6.) House prices never fall (in my city).
Is it the emerald city? Are you a wizard by any chance?

(7.) House prices don’t fall to zero like stock prices, so it’s safer to invest in real estate.

I don’t see companies like Corning, Exxon, 3M, Lockheed Martin, etc, etc. aka blue chips EVER going to zero with billions in the bank and billions in hard assests(Like real estate)

If your investing in a startup called “Tech-no-com” yes you have a chance at hitting zero, then again, are you dumping the same amount of money into it as you would home, probably not, people usually invest what they can afford to lose(if you have a brain and most spec RE investors that get their training from the HGTV don’t), unless its the housing market and like a zombie people listen to your “housing” points and actually think prices can’t drop. [email protected] people have been listening to the media spew the same crap for the last 8 years.

BTW Check out the home prices in Cleveland and Detroit, you can’t even sell a home in those towns so you home is worth NOTHING!

(8.)They aren’t making any more land.

Great argument for maybe Japan(Whom just came out of the biggest RE bubble in the world up to this point in time) or Europe who is in the midst of a housing bubble, but not Canada, have you ever flown coast to coast, I’ve seen a few vacant lots across the country.Not to mention the polar bears are starting to do some renos up north and riding their land of ice so we can build more condos.

(9.)Owners can change their houses to suit their tastes
The house down the street sold for 10% over asking, and that proves the market is still hot.

What happened to real estate is local? Just because somebody over payed doesn’t mean the “market” is hot, might have been the only house on a one house street…

(10.)I was lucky that my realtor told me to increase my bid by $50,000. Otherwise I would have lost, because my realtor knew about a secret bid $40,000 above mine.

Good thing you got into the market, cause you might have never with prices continuing to rise upwards, only one problem, if you have to buy now before its too late, who are you going to sell this property to? Remember, I waited to long and can’t afford it anymore, Guess you’ll have to trade houses with your other house rich(poor) friends.

(11.) The MLS proves things are great.

Things are awesome! Never been more inventory in the history of the market.

(12.) Rich Chinese (or Europeans, or Arabs) are driving up housing prices.

A rich arab, rich chinese and a rich european walk into a bar… Actually large groups of wealthy gypsies are buying up Calgary condos at an alarming rate as is snufalufagus and pokaroo…

(13.) Newspaper articles prove prices are not falling.

Believe everything you read, “you sound very smart”.

(14.) It’s not a house, it’s a home.

Its not a home its shelter, its not shelter its a roof, its not a roof its a slap of press-board…

(15.) If you don’t buy now, you’ll never get another chance.

I missed out on the “Hyperglobaltech” IPO, I INTENTIONALLY missed out on the clapping and cheering of the greatest RE bubble in the history of the world, I’ll miss out on the crying and the slaughter of the bubble on the way down.

Maybe I’ll buy a couple condos in the next 3 – 4 years… Rent them out and become a bazillionaire…

#55 SMWhite on 06.06.08 at 11:19 am

PBrasseur, thinking those on this site that aren’t inline with the current economic situation are leftist is silly. For me its quite contrary to that, no fiscal responsible conservative would agree the rocket up in housing prices is a good thing.

I concur with SOME of Vulture’s beliefs such that things will be very stale but this will be the case for years to come as we shift from the boomers to gen X. It is very likely that we will hit a recessionary period close to that of the early 90’s but this time we are protected somewhat from inflation via our strong dollar.

You are very wrong on your average income assumptions and in fact the average family is falling behind, where single families are increasing their salaries by 20% since 2002 and traditional families only by 5%. Regardless how you want to slice the pie, if the average person can not afford the average home, or can’t obtain enough credit to buy the home, who will buy it? CREDIT WILL BE THE BIGGEST ISSUE IN NORTH AMERICA! If I’m a spec-u-flipper or someone that has to move via divorce or transfer in the next year, this should be of concern.

Collapse, no, it will be long and somewhat annoyingly painful like being drawn and quartered, some will lose an arm, some a leg, some both, the majority of responsible citizens will weather the storm. I don’t see any real estate inspired riots in the near future.

http://www40.statcan.ca/l01/cst01/famil21a.htm

Average income to home price ratio is at around 3 – 3.5, so 70K x 3.5 gives us the average of $245K(sounds reasonable), and we’re at what now in Canada, 4.5 ($300K). Of course all real estate is local… :P

#56 Dave in Calgary on 06.06.08 at 12:08 pm

PBrasseur,

With all do respect, your comments stink of right-wing rethoric at least as much as Garth’s leftist comments.

However, I do like reading it from both sides, and I appreaciate your post. If you have a moment, can you please explain how Garth’s statements about the economy are “empty” and your statement that it’s “basically sound” and that we have a much higher standard of living now? Is there not hard evidence about savings rates going to zero, massive debt, manufacturing jobs leaving, boomers who are house rich and cash poor, collapsing health care system?? While anyone can disagree, I don’t think it’s “empty”. Garth offered a lot of hard evidence, stats, charts and graphs, trends etc… Sure it’s open for interpritation, debate, discussion, and disagreement… but “rethoric”?? Isn’t a blanket statement like that rethoric in itself?

It’s obvious which side of the fence I sit on, but I do respect the other side’s opinion, and I do look forward to your response should you have the time.

Thanks

#57 dotava on 06.06.08 at 12:34 pm

vultur

don’t use the worlds that you are not sure there meaning. Check it out what is the moral:

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

BTW – by our standards (ordinary people as myself) – to reap other people is not moral

#58 vultur on 06.06.08 at 12:45 pm

#46 David on 06.06.08 at 9:04 am

Vultur, you think that the bubble was a source of family happiness and financial security do you?
Apparently you seem to believe that the financial carnage being witnessed now in the USA is some anomaly or minor accident of history. The condo bubble in Calgary is benign and will not metastasize into a true stage 4 cancer based on what you are saying. Many like yourself said the same things about San Diego and Miami. Flawed fundamentals, rampant speculation, ridiculous financing schemes and over building will somehow produce a soft landing in Calgary that happend nowhere else.
The actual number of Canadians with free and clear title to their properties is well under 25%. The majority of the new mortgages being written have little equity and nothing down and are for amortisation periods longer than 25 years. Perpetual debt equals wealth and happiness based on your argument. Maybe the rest of us are missing something that you are privy to and can not apprehend due to sheer stupidty and envy.
________________
David,

You sadly mischaracterize and misinterpret my comments. Home equity does not by definition equate to happiness nor does the accumulation of wealth for pure material gains. Those who seek happiness and spiritual harmony through the pursuit of wealth are only attempted to compensate for other areas in their lives that are badly lacking in something meaningful.

I never bought into the hysteria in over-hyped markets like Miami, San Diego, and Las Vegas because those markets were dominated by pure speculation- condos being developed with very few pre-construction sales (not the 70% required by construction lenders in Canada) and the prices rose to outrageous limits that weren’t remotely supported by any fundamental analysis of housing demand or even the more traditional profit margins associated with this kind of development.

Calgary has a degree of speculation in the condo market, let’s all be clear on that point. And, this speculation has caused a tangible amount of artificial demand that has fueled sales prices beyond what end user demand would probably support.

However, offsetting these harmful forces are several important considerations:

1. The Alberta economy is roaring- faster than any part of Canada and certainly well above anything seen in the United States. Albertas have a lot of wealth and many of them are diversifying their wealth away from the 0&g sector into tangible assets like real estate. True, real estate prices may fall 10%-20% in the short term but these people probably see it as a hedge against their o&g windfalls that they believe may not be sustainable

2. The actual construction costs for new high-rise projects in Alberta are insanely expensive because of the labor shortages that the province has experienced. This may be easing somewhat but it still creates a significantly higher floor price for new condo units. I also believe that price increases will reverse somewhat and sales have definitely fallen significantly, but I believe that the inventory will get absorbed at a very high price point due to the fact that the construction costs were so high.

3. Rents in Alberta (Calgary specifically) are still rising and that does help to justify the higher prices to some extent though probaly not enough to support a $600 per square foot unit.

Alberta is a unique circumstances because of its super strong economy. The real estate boom is a side effect of that, not the reverse.

#59 sum1 on 06.06.08 at 12:52 pm

Future Expatriate on 06.06.08 at 4:49 am SAID;

Moxie, thanks for posting the article about phony bids and offers. I had NO idea they were illegal, and I’ve just been going around with a certain pair that do it as a matter of course and I’ve got the e-mail proof to back it up if I choose to pursue it.

Thanks!

This admmitance of guilt by association proves my previous point that we got here by people who have no idea what they are doing. Expat- How can you admit you had no idea this was wrong? You are as slimy and guilty as the perpetrator, and SHAME ON YOU for having this knowledge and not reporting these people to their board immediately. These prices are not the fault of realtors, but the people who use a realtor in this manner as this person did pumping up prices artificially. Realtors are a scapegoat for the greed of the common man. Its simple- many people blame realtors for pumping up prices beyond fundamentals. The realtor did not buy it though- the buyer did. It is up to each individual to ask themselves- is this right? Our society is morally corrupt (which is the real bigger story here), hence the virus like break out of the last several decades of addiction of an entire generation to violence pornogrphy and drugs. Why, when the average family has been getting smaller, does the average home size continue to get bigger? Why does each teenager in your home need a tv/computer in their own room? Why are kids in record numbers being put on Prozac or ritalin type drugs? We are self medicating ourselves into destruction, filling our massive homes with things instead of love. Sounds cheesy- it is the truth.

#60 Al on 06.06.08 at 1:11 pm

From the CREA website (fourth para, like at bottom)

“You can trust a REALTOR® to protect your interests and to look after details. And all the while, you’re an active partner in the process, working with a REALTOR® every step of the way. So the more you know about buying and selling homes, the better your working relationship with a REALTOR®. ”

The first sentence is the challenging part. We’re supposed to be able to trust, yet then we get comments like:

“A buyer has a choice: pay the price or walk away.
Free will. Some of you people ought to check out the concept some time.”

In other words, trust the person telling you that you’re getting a good deal, but it’s your own fault for trusting us. Has an agent ever said it’s not a good time to buy, or has it simply always been a good time to buy?

If agents are using a position of trust to guide people into overpaying, then they have some responsibility.

http://www.crea.ca/public/use_a_realtor/use_a_realtor.htm

#61 brazer on 06.06.08 at 1:28 pm

To: #45 PBrasseur

“Even in the US things have to be put in perspective, for talking to many people down there it appears things are not always as bad as big media describes it.”

How “bad” is the loss of 861K jobs in May and 1.6M within the past year?

http://news.yahoo.com/s/ap/20080606/ap_on_bi_go_ec_fi/economy

The government said the number of unemployed people grew by 861,000 in May — rising to 8.5 million. The over-the-month jump in unemployment reflected more workers losing their jobs as well as an increase in those coming into the job market — especially younger people — to look for work, the Bureau of Labor Statistics said.

A year ago, the number of unemployed stood at 6.9 million and the jobless rate was 4.5 percent.

#62 James on 06.06.08 at 1:37 pm

Read the article. It says that one agent in particular has complained to the real estate board for years about phantom bids and nothing has been done. Let’s face it folks the real estate industry is essentially unregulated. I’ve personally made a complaint about out and out fraud committed by an agent and the only thing that happened was I received a form letter in reply from the board. It’s a joke. So good luck with your complaint about the phantom bids because it will likely go nowhere and you’ll soon discover what a lot of people already have. ARe there good agents out there? I wouldn’t doubt it. There’s also good used car salesmen out there too but would you go to one about an investment???

#63 vultur on 06.06.08 at 2:09 pm

#39 Vultur the Hypocrite on 06.05.08 at 6:52 pm

I guess people get as much glee from those loosing money as do vermin like you did post denial. Your previously antagonistic postings towards those who have failed to fall into your ponzi scheme or agree with your convoluted logic towards housing. Go away Vulture, you are nothing but a cockroach about to be stomped on.
_____________
Your visceral negativity so desperately reveals an inner conflict that you are fighting with yourself. Stop looking for external answers to your problems and instead look inside yourself for the peace and comfort that you desire.

Directing your hostility towards others who are attempting to succeed by assuming risk is not the answer to your problems. Your success lies within you and only you have the ability to alter your circumstances, not me/them.

Go in peace friend.

#64 Cam on 06.06.08 at 3:14 pm

Hey PBrasseur,
You’re making arguments with no evidence. At least make a reference to where you’re getting your opinion from, otherwise its just your opinion and no more relevant than me saying “I think you’re wrong”.

“For example a lot of M Tuner’s argument is based on the assumption that household income has stagnated during the past 20 years, as stated by Canada Statistics. Well I’m sorry but that’s just bull. ”
What, do you think Statistics Canada decided to just make this stuff up?

Speaking for Vancouver,
What do you think about the 33% increase in listings, the 25% decrase in sales and the record number of houses on the market (17,500+)? Is that bull too?

Face it, people have gotten to the point where they’re not willing to mortgage themselves for the rest of their lives and at the expense of any savings or retirement planning.

#65 vultur on 06.06.08 at 6:56 pm

If agents are using a position of trust to guide people into overpaying, then they have some responsibility.

http://www.crea.ca/public/use_a_realtor/use_a_realtor.htm
)))))))))
Don’t fault the agents- fault the system. It’s system that is corrupt, the individuals that are subject to its rules.

#66 Bruce on 06.06.08 at 7:29 pm

PBrasseur,

With all due respect, I respectfully disagree. You said that our standard of living is better today, that we have increased prosperity, and are overall better off than previous generations… Nothing could be further from the truth.

I’ve seen the cost of everything go and up and up, except of course, my paycheck. Gas, oil, groceries, utilities, etc. I have a relative on disability who receives $800/month. I know of many people holding two and three part-time jobs, and still living on or below the poverty line. I see more and more people buying homes and vehicles, already carrying record debt, and haven’t the faintest idea how they’re going to pay for all this… I know a guy with 6 years of post-secondary education, $50k in debt, working part-time at Home Depot because he can’t find work in his field of expertise… I fully expect the “Amero” will arrive a LOT sooner than many of us care to believe–or want to admit.

I have to agree that the past decade has been just peachy… Matter of fact, therein lies the paradox. We’ve had it too good, and I’m afraid the party is winding down now. Canadians are carrying record debt. Never in our history have we owed so much… There’s no more equity in our homes, our credit cards are maxed-out, and we’re now trading in those SUV’s for bicycles and hybrids. We’re beginning to see the fruits of our own stupidity, incompetence, greed, and how the last few years have all been a false-front. We shouldn’t expect the “good times” to last forever. But the party was fun while it last, eh? It’s going to be one HELL of mess when the train wreck comes…

#67 David on 06.06.08 at 8:01 pm

Pbrasseur actually thinks the North American economy is sound. Let me think here, record high levels of consumer, corporate and government debt might give a person cause for reflection. The value of the US currency going through a de facto devaluation of over 30% in the past 4 years, so much of a devaluation in fact that the US is in danger of losing it status as the world’s reserve currency. Home price declines at a rate not seen since the Great Depression. In inflation adjusted terms the average Canadian middle class family is about $100 dollars better off than they were in 1982. Marketing surveys indicate all times lows for consumer confidence levels.
Since when did the Canadian welfare state become unsustainable? It was sustainable in the 1960’s when Canada had a much smaller economy and now it is not. That seems like a very tenuous conclusion based on little more than fear. I dont think there will be any popular massed movements in Canada to dismantle Medicare or Canada Pension in the forseeable future.
It is not hype either when people say that the FIRE sectors (Finance, Insurance and Real Estate) have been the growth areas in the Canadian economy while manufacturing has experienced a secular decline.Bubblenomics anyone??
Calling the North American economy sound is laughable.

#68 wealthy renter on 06.06.08 at 8:28 pm

Mike, I am not an expert on anything real estate related as evidenced by the fact I live in Toronto and commute 60 km to the burbs to work. :)

We got our place (minutes to my wife’s work) by calling the managment office of the condos we wanted to live in. I don’t know if this is legal, but the management company in our condo actually screens potential renters. Most of the directors in the building own rental units, and we received several e-mails about potential units.

My advice to anybody renting a condo is to rent from professional that has been in the business for at least twenty years. My landlord snapped up a dozen of properties in the last crash in Toronto. Our rent is very cheap, and he makes a lot of money as well. There is no nickel and diming.

For anybody wishing to live in West toronto, stay away from Rexdale in the north. The airport noise is brutal any place north of Eglinton.

We will still buy a house long term. :)

#69 Jas on 06.06.08 at 9:33 pm

I quit….

#70 patriotz on 06.07.08 at 2:24 am

In other words, trust the person telling you that you’re getting a good deal, but it’s your own fault for trusting us. Has an agent ever said it’s not a good time to buy, or has it simply always been a good time to buy?

If agents are using a position of trust to guide people into overpaying, then they have some responsibility.

Wrong. RE agents are commissioned salespeople, and like all commissioned salespeople, their job is to get the higher possible price for the seller. Period. They are not financial advisors for the buyer.

It is entirely the responsibility of the buyer to decide what is the appropriate price to pay for the property. The only responsibility of the agent, like all salespeople, is to correctly represent the property for sale. Take it or leave it.

#71 Future Expatriate on 06.07.08 at 6:30 am

Moxie, they’re not our realtor. Ours is a real rare honest gem; HE sends US articles about the market crashing!

Thanks!

#72 Future Expatriate on 06.07.08 at 6:32 am

Sum1, I believe a word to the wise is sufficent sometimes, and if it is not, I assure you, I WILL take action.

I believe everyone deserves fair warning first.

#73 Brent on 06.07.08 at 10:23 am

Bruce,

I respectively disagree. The reason were in record personal debt is because were using our new found equity in our homes (Alberta anyways) like a debit machine to buy those new $50,000 toys to drive around in and furnish our homes with the latest HDTV’s and flat screen PC’s as well as new deck furniture, go on tropical vacations, etc, etc, etc…

#74 sum1 on 06.07.08 at 8:20 pm

Future expat-
If you knew some one was robbing banks, would you give them fair warning to stop, trusting they would, just because you told them to? What these people are doing is criminal. It is called FRAUD.
Your only legitimate course of action to recover your damaged reputation on this blog, and I assume in your life, is to report them NOW.

#75 sum1 on 06.07.08 at 8:26 pm

BTW- there is no difference between these people and bank robbers. Rob a bank steal, maybe $30,000. Put in fake offers to jak a bidding war up $30,000- someone is still out $30,000 and wrongfully so. You know what, you really piss me off. You ADMIT you have PROOF of Fraud, yet casually mention you are running around with realtors who do this “as a matter of course” WTF is wrong with you? Report these theives to the RCMP the moment you read this. Please become an expatriate NOW not in the future.

#76 Peter on 06.08.08 at 9:25 pm

Urgh…I am not bashing REALTORS or I am not BS ing from some guys are bashing me on…but what I am saying is true to some of my friends who bought houses in the GTA for the past year (2007 – 2008). I know some realtors are honest but how do you define honest despite the market still have alot of PUMPERS instead of naysayers…someone posts on the top have been so deep in a word called “COMMISSIONS” and “PRICE INCREASES” and you cannot take the word “SLOW MARKET” & “PRICE DECREASES”…I know you sell over 200+ homes within 1 year or great reputation for honesty but does ALL of your team has honesty to sell homes to your prospects ? Will you or your teamplayer say to your prospect that “prices will decrease a bit or correction if necessary if home prices already gone up in 10 years ” if they were to ask you these questions when they would like to buy a home now ? Just a word to say “DUE DILIGENCE” is the key between what you need to research and buy !!

#77 Peter on 06.08.08 at 9:31 pm

Yes, You can complaint, you can called the cops or whatever for fraud related crime..but will they get caught ? I have seen many irresponsible insurance ppl (top agents) selling life insurance to people while these people are taking a LOSS on their life insurance policy and when they file a complaint to the head office, their complaint are never take into matter instead these complaints will be dropped indefinitely, these crooks can still rip off more money from others, these guys still in business and driving m-benz, BMW or gas guzzling SUV’s..and the loss is derived from who ??? (Our People who HARD EARNED their Money and try to make a protection for the families downturn)…

#78 David on 06.08.08 at 11:23 pm

A lot of people choose to forget that the demographics of the Canadian housing market is almost the mirror of the now crashing US market. The national average of home ownership in Canada is 68.4% virtually identical to the peak bubble years south of the border. The number of Canadians with free and clear title to properties is 27.5% while in the USA it is 33%. There are some regional variances naturally enough in Canadian home ownership among the provinces to allay the fears of those who always assert that all housing is local. Negative savings rates and family indebtedness are similar to the USA pattern as is the pattern of issuance of zero down with extended amortisation mortgages. The same bubble insanity is alive and well north of the 49th parallel.

#79 Al on 06.09.08 at 9:03 am

From Patriotz

“It is entirely the responsibility of the buyer to decide what is the appropriate price to pay for the property. The only responsibility of the agent, like all salespeople, is to correctly represent the property for sale. Take it or leave it.”

CREA disagrees with you.

“You can trust a REALTOR® to protect your interests and to look after details. ”
“A REALTOR®’s commitment to high standards of professional conduct works to the advantage of buyers and sellers alike.”

#80 wealthy renter on 06.09.08 at 6:07 pm

Vultur wrote:

“Your racist remarks should be highlighted and condemned. Consider practicing a fair degree of introspective analysis before emitting such harmful negativity on a public forum. Those lives are just as valuable to the universe are yours and mine.

Treat them and such and exercise more compassion. We are all one.”

Start debating in good faith because this is a crock of Shit. You have written in this site that you are a real estate “Vulture,” and that you go into distressed markets in search of investment opportunities.

Shall I quote you?

“I am a VULTURE- looking to pick up properties on the cheap after the wreckage. I never suggested there wouldn’t be weakness in the housing market.”

http://www.greaterfool.ca/2008/05/07/the-news/

Yours is not a highly noble profession, and it is predicated on people having faced foreclosure and financial ruin. I guess you think, “We are all one” until people are broken and you are able to make a few bucks from their suffering.

Your handle speaks volumes about your character and, you have NO RIGHT to judge others given your lowly profession.

#81 Vic on 10.20.09 at 1:39 pm

#60 Al
“Has an agent ever said it’s not a good time to buy,”

I came across this on a real estate blog recently: “So it’s refreshing to hear a realtor advise his clients that now might not be the best time to buy”

The realtor he was referring to actually said, “We’re at the peak price for this year, there’s a very poor and limited selection, and there’s not much downside to waiting it out.”

http://www.astonlau.com/

Now, the ironic thing about all this is that the realtor was wrong! Prices have gone up since that was posted.