The obfuscation

Let’s say you’re a realtor afraid the feds will squash you like a bug in the next budget. Whaddya do? Right. Fudge the numbers. And starting at noon Monday, that’s exactly what will happen. Real estate boards in Toronto, Vancouver, Calgary and Montreal are banding together with the mothership, CREA, to launch the Home Price Index. The goal: to make real estate look stable. Predictable. Safe.

Bubble? What bubble? You’re delusional, F. Go back to screwing seniors out of their pensions. We’re good here. Scoot.

As you may know, the finance minister’s expected to drop his 2012 budget next month. Besides starting to goose the age at which wrinkly people can access public pensions (as I detailed in the last post), the elfin deity is expected to address a housing market responsible for turning Canadians into voracious debt piggies. Odds are the 30-year mortgage will be toast, and he might even find the courage to ban the practice of banks giving people down payments in the guise of ‘cash back’ home loans.

Of course he has to decide whether or not CMHC will be granted more debt ceiling, now that it’s burned through its $600 billion allotment. And while at it, he might follow lenders’ reluctant lead and outlaw ‘stated income’ mortgages which allow self-employed Vancouver hairdressers to get $500,000 mortgages.

The impetus for all this is a massive run-up in real estate values of the kind announced on Friday by the realtor cartel in godless GTA, followed by The Mold House incident. As you may have heard, the average Toronto-area house (including a billion condos) now sells for $463,534, up 9% in a year. During that same year, family incomes fell 1% relative to inflation and household debt reached an all-time crescendo.

Worse, if you strip condos out, the average detached home in 416 is selling for $743,993, which is a gain of 15% in twelve months. That’s roughly equivalent to anything that happened during the American housing bubble which, sadly, ended in tears.

And it’s getting worse, at least in some areas, among people who get aroused by fungus.

The City of Toronto put three properties up for sale – run-down dumps which had formerly been used for community housing (unneeded now that poor people have been banned). They attracted 72 bids and orgiastic frenzy among a few dozen realtors. By quitting time a boarded-up semi-detached house full of mold and in need of a total gut, listed for $495,000, sold for $770,000. Here it is…

“It basically shows that there is a lack of supply on the market and, until that changes, prices are going to continue to rise,” realtor Brian Prashad told the media. (His client bid on three-storey home listed for $995,000 that went for $1.111 million, and is a total junker.) There are 11,009 houses for sale in Toronto right now, compared with just over 12,000 a year ago.

Of course, there would have been no sales and price surge without BMO’s 2.99 Special, no-money-down bank mortgages, 30-year amortizations or CMHC to wipe away lender risk. And while realtors may rejoice at the steamy market in 416 (one of the only places still delusional), it’s helped make the average house unattainable to the average family. That’s bad politics.

Enter the MLS Home Price Index. It’s clearly designed to obfuscate. Say the realtors, “HPI provides a less volatile measure of home prices and home price change compared to traditional average and median measures, which can swing dramatically in response to changes in the share of very expensive or inexpensive home sales from one time period to the next.”

In other words, it’s likely the beginning of the end of real estate boards publishing monthly average or median prices, instead referring media and the house horny to an index, designed to move in a far narrower range. The Vancouver board has used a similar fudger for some time, calling it a ‘benchmark.’ Monthly releases there no longer even give the average selling price of SFHs, for fear of scaring the crap out of everyone.

This is as regressive as it is cynical. By removing raw data further from public scrutiny, the real estate monopoly’s found a way to easily misrepresent market conditions, smooth out trend lines and stabilize a volatile and emotional commodity – just when the whole thing’s in danger of imploding.

But will the property virgins, impressionable cash-drenched foreign buyers and house-porn-loving urban masses fall for such a transparently manipulative trick?

Of course they will. This is Canada. It’s different here.

So over to F, to save us.

OMG.

Monday 3 pm update: Well, it’s as suspected. The realtors have launched an index which is described thusly: “The MLS(R) HPI is calculated using a sophisticated statistical model that is a hybrid of both the repeat sales and hedonic price approaches.” You can read all about it here. Hedonics. Damn, that’s what we’ve being missing.

238 comments ↓

#1 Fifty Percent Correction Predictor on 02.05.12 at 6:09 pm

First?

#2 Chris scott on 02.05.12 at 6:10 pm

If I wanted to say it, I could.

#3 George on 02.05.12 at 6:14 pm

twenty second?

#4 Florin T on 02.05.12 at 6:18 pm

Second?

#5 BPOE on 02.05.12 at 6:22 pm

Folks, the numbers don’t lie. Housing is HOT regardless of what the American tells you. Cool areas can afford 15% price rises. This isn’t America folks, we have real jobs that pay well. Everything is just fine

#6 DUI on Money Road on 02.05.12 at 6:24 pm

What was the Twain saying again?

“There are lies. Damn lies. And statistics.”

#7 Alberta Ed on 02.05.12 at 6:30 pm

“But will the property virgins, impressionable cash-drenched foreign buyers and house-porn-loving urban masses fall for such a transparently manipulative trick?” Yes, along with the MSM.

#8 EB on 02.05.12 at 6:33 pm

They’re clearly expecting dramatic drops in some markets then, since under this plan Van can drop 20% and they can still say “statistics indicate that national house prices continue to be stable within a very normal range of variation, and there aren’t any real concerns at all”.

Is there genuinely no alternate method of accessing the real data so that meaningful local statistics can be generated?

#9 Van guy on 02.05.12 at 6:45 pm

So they are using psychology to trick people into thinking the market is stable? When actually shit is hitting the fan?

#10 Miko on 02.05.12 at 6:50 pm

with real estate prices declining in China, how long do you think it will take Vancouver to overtake Hong Kong and move into the #1 spot of being the least affordable housing in the world?…..i say 8 days

#11 Van guy on 02.05.12 at 6:54 pm

#5 BPOE on 02.05.12 at 6:22 pm

Folks, the numbers don’t lie. Housing is HOT regardless of what the American tells you. Cool areas can afford 15% price rises. This isn’t America folks, we have real jobs that pay well. Everything is just fine
——————————————————–

Whatever you say here is totally irrelevant. Why are you here anyways? Anything said here will have no effect on RE. The markets will take care of itself. We all know how this is going to end. Except you and your RE pumping clan out in the Flipper Capital of Canada, Richmond.

#12 jess on 02.05.12 at 6:55 pm

Nye Lavalle” report SEE O.C.J. Case no 5595

http://livinglies.wordpress.com/2012/02/05/nye-lavalles-early-warning-in-2003-profiled-in-new-york-times/

Robert D. Drain, a federal bankruptcy judge in the Southern District of New York, said in court last month that the failure of the mortgage industry to deal with pervasive problems involving inaccurate documentation and improper court filings amounted to “the greatest failure of lawyering in the last 50 years.”

http://www.heraldtribune.com/article/20120205/BREAKING/120209728
By GRETCHEN MORGENSON

#13 tigerbaby on 02.05.12 at 6:56 pm

isn’t “cash back” schemes that allow zero down home purchases fraud? I think CMHC will be rejecting these claims.

#14 Basil on 02.05.12 at 6:56 pm

“This is as regressive as it is cynical. By removing raw data further from public scrutiny, the real estate monopoly’s found a way to easily misrepresent market conditions, smooth out trend lines and stabilize a volatile and emotional commodity..”
Beautiful, you could be describing the current calculations of GDP, Inflation and Employment Statistics.
The realtors are in good company!

#15 SafetyBear on 02.05.12 at 7:04 pm

Still, let us not pity these fools, cast upon the altar of greed, speculation and consumption. People should be able to work out for themselves that not only wanting to pay a too-high asking price but then going beyond it to a new high level of debt is the epitome of stupid. Blame the housing people for fudging their data by all means but the sheeple out there are still guilty of mortgaging away their financial futures. It’s not like they can’t rent or something.

#16 Harlee on 02.05.12 at 7:05 pm

BPOE
Your tune is getting really old now. Time to change it.Van in particular is due to pop – like a big bad pimple.Too bad,but it was inevitable.

#17 Chris L. on 02.05.12 at 7:05 pm

Incidentally, I’ve been put off by many real estate agent blogs who have been trimming their stats back. It seems like with each passing month, information is shared less and less. So there are some top-down instructions behind this? How can I figure out what the trendline is if they wont give me the vital stats? I’ve personally asked a few agents, and even they don’t seem to have a clue where to look. You’d think they would know this basic info and be willing to share it.

#18 AlbertaGuy on 02.05.12 at 7:07 pm

brb…superbowl starting

#19 Kip on 02.05.12 at 7:20 pm

“Enter the MLS Home Price Index. It’s clearly designed to obfuscate.”

I had to look it up.

Obfuscate:

To make so confused or opaque as to be difficult to perceive or understand.

At least I learned something today.

#20 Stinky the Fish on 02.05.12 at 7:23 pm

Merry Football everyone

#21 NoName on 02.05.12 at 7:33 pm

The Tulip and Bulb Craze

The amount the market declined from peak to bottom: This number is difficult to calculate, but, we can tell you that at the peak of the market, a person could trade a single tulip for an entire estate, and, at the bottom, one tulip was the price of a common onion.

Synopsis: In 1593 tulips were brought from Turkey and introduced to the Dutch. The novelty of the new flower made it widely sought after and therefore fairly pricey. After a time, the tulips contracted a non-fatal virus known as mosaic, which didn’t kill the tulip population but altered them causing “flames” of color to appear upon the petals. The color patterns came in a wide variety, increasing the rarity of an already unique flower. Thus, tulips, which were already selling at a premium, began to rise in price according to how their virus alterations were valued, or desired. Everyone began to deal in bulbs, essentially speculating on the tulip market, which was believed to have no limits.

The true bulb buyers (the garden centers of the past) began to fill up inventories for the growing season, depleting the supply further and increasing scarcity and demand. Soon, prices were rising so fast and high that people were trading their land, life savings, and anything else they could liquidate to get more tulip bulbs. Many Dutch persisted in believing they would sell their hoard to hapless and unenlightened foreigners, thereby reaping enormous profits. Somehow, the originally overpriced tulips enjoyed a twenty-fold increase in value – in one month!

Needless to say, the prices were not an accurate reflection of the value of a tulip bulb. As it happens in many speculative bubbles, some prudent people decided to sell and crystallize their profits. A domino effect of progressively lower and lower prices took place as everyone tried to sell while not many were buying. The price began to dive, causing people to panic and sell regardless of losses.

Dealers refused to honor contracts and people began to realize they traded their homes for a piece of greenery; panic and pandemonium were prevalent throughout the land. The government attempted to step in and halt the crash by offering to honor contracts at 10% of the face value, but then the market plunged even lower, making such restitution impossible. No one emerged unscathed from the crash. Even the people who had locked in their profit by getting out early suffered under the following depression.

The effects of the tulip craze left the Dutch very hesitant about speculative investments for quite some time. Investors now can know that it is better to stop and smell the flowers than to stake your future upon one.

(from investopedia, all kinds of bubbles explained there, all you need is just to read)

and moral of the story is?
when government try to fix the market it’s almost certain that it will make it worse…

#22 Robert on 02.05.12 at 7:35 pm

Garth, you’ve neglected to mention that we, through the kind offices of Minister Flibberty, are already backstopping the Housing Mortgage Insurance industry to close to a TRILLION dollars already. http://business.financialpost.com/2012/02/02/flaherty-flags-concern-over-canadian-lenders-mortgage-practices/
By guaranteeing the mortgage lending of these two private competitors as well as CMHC, the Conservatives have sold Canada down the river just to hang on to power. If Canadians don’t wake up to the Ponzi scheme this administration has concocted… Well, it may be too late already, but not too late for a tar and feather party at the next election. Let’s hope the cupboard hasn’t been completely gutted by this corrupt and disloyal Harper government.

#23 Waterloo Resident on 02.05.12 at 7:36 pm

Okay, I’m going to say something here that is going to make me seem like even MORE of a Whack-Job than many think I am:

Garth said: ( ” the average detached home in 416 is selling for $743,993, which is a gain of 15% in twelve months. “)

So lets say this keeps going like this for another 10 years? At 15% gain every year. Wow, that $500,000 3-bedroom house will then be worth slightly over $2 Million dollars !!

You know, it might be crazy, but thats where I predict Canadian home prices will be going; in 10 years every home you see now will be selling for 4-times what it is selling for right now.
—————-

Here in Waterloo, there is a place selling new houses called ‘The Ravines’. One of the houses that was sold by the developer last year for $380,000 just sold 2 weeks ago for $540,000 ! We have bidding wars for houses going on here in Waterloo, its just crazy insane !

I wish Garth’s hope for a 15% housing correction will come true soon because maybe that will slow down the housing price appreciation to more NORMAL levels instead of the crazies that we have now.

#24 F and you. on 02.05.12 at 7:37 pm

F won’t do #$%@.

#25 OneMoreThing on 02.05.12 at 7:37 pm

tools designed to justify, tools designed to buy, tools designed to keep fear away!

The Aussie’s beat us to the downturn! That’s how screwed we are! The last bubble to burst!

How’s that gonna end up kiddies!

#26 Fifty Percent Correction Predictor on 02.05.12 at 7:43 pm

Reporting:

On the weekend, visited two sites.

One in the Scarborough condo centre. Talked to the on site sales person in one of the buildings. This one was finished about two months ago. Basically, all the two bedrooms are still available. The builder is giving away $10,000 upgrades and $13,000 closing costs. The price is about $360,000 to $380,000 for a two bedroom.
In the meantime, someone is selling a nearby half year new two bedroom for $330,000.

On the Toronto north, a HAM area. A pre-construction Townhouse site. All the $499,999 and below are sold but the $510,000 – $550,000 are ALL available.

Tentative conclusion (combined with other observations):

1. Condos in GTA are entering crushing time.
2. Everyone is in game now. The new buyers are all marginal and can not even cough up extra $30,000 for a bigger, better (end unit).

#27 Canadian Watchdog on 02.05.12 at 7:48 pm

—The MLS® HPI “provides a less volatile measure” of home prices and home price change compared to traditional average and median measures, which can swing dramatically in response to changes in the share of very expensive or inexpensive home sales from one time period to the next.

They even blatantly state their intention of tweaking and smoothing seasonal moving averages to keep “volatility” filtered. You can expect MSM using this index for every headline from here on. It’s a cat and mouse game now.

#28 Bill on 02.05.12 at 7:57 pm

“So over to F, to save us.”

Good Lord….

F is the nasty little Cretin responsible for generating fabricated data to justify his truly evil Income Trust Betrayal.

Remember his 18 pages of totally blacked out “proof” that income trusts needed to be taxed differently?

All of the numbers redacted…. in the interest of National Security no less!

This will not end well.

#29 TurnerNation on 02.05.12 at 7:59 pm

“pastor Garth” I’m afraid we’ve lost another one.

Going into the week, the souls saved count is at -1.

Yes, despite me showing him the good word about your B.R.A. blog entry, a co-worker is signing one. He asked around and was told ‘that’s just the way it works’.

I tried everything: holy water (does beer count?), speaking in tongues (or maybe I was just slurring my speech).

#30 Silver on 02.05.12 at 8:12 pm

Wow… what a great way to raise the property tax assessments…. nationwide… more free… pretend tax money for the municipalities coffers to collect.

…. now my assessed property value can be compared to someplace like toronto for tax assessments purposes… or some other market that hasn’t fallen…

Silver

#31 Randy on 02.05.12 at 8:16 pm

Where’s the shadow stats ? We all know that the unemployment stats are totally faked…

#32 Kilby on 02.05.12 at 8:17 pm

Obfuscate these.

Penticton, 632 active listings.
Last 7 days, 10 sales
Average sale price. $311,400
Average number of days on market, 86.

Cooking in the Okanagan!

#33 Retired Boomer - WI on 02.05.12 at 8:17 pm

It would be best for the vast majority of Canadians to have their elected leaders do the prudent things.

Those would be to curtail the purchases of RE on extended terms (30 years), eliminate low documents (liar loans), eliminate cash back tricks, AND adjustable rate mortgages. For balance, they might also introduce the 12 yr or 15 yr fixed rate mortgage. These adjustments would make sense, and lead to a more stable market, after the initial shock of restoring sanity in your RE market.

Will it happen? Doubtful. Most politicians seem to lack a fundamental skeletal structure (backbone), to stand up to special, or parochial interests, and promote policies that benefit the majority of taxpayers’ futures.

Oh, there is that thing called re-election that is always on one’s mind.
Political party means political POWER. i.e. screw the public, WE are in charge now.

I give you no better case study than the 2001 election of our boob in charge then, G W Bush, and just Look at the squirrelly dudes vying for the chair now!!

Let’s hope your guys can develop the fortitude to do the correct thing, for the taxpayer who’ll be on the hook should you suffer “house porn American style.”

#34 Mr Buyer on 02.05.12 at 8:18 pm

As a former salesman it is very important to make any sort of statement while projecting the proper state of being. For example if a client brings up some sticky point one must show a fleeting expression of concern while smoothly transitioning into a relieved expression and transitioning a little faster into a bright expression bordering on excitement but do not overdo that part or you will not achieve the desired effect. Remember always somewhat subdued in all expressions so as not to raise alarm bells in the prospective prey, or client rather.

#35 Van guy on 02.05.12 at 8:34 pm

Sales for Feb 12′

Richmond
913 listings
Sold “69”!!!

Van east
488 total listings
81 sold

Van west
883 total listings
87 sold

Tri cities
613 total listings
95 sold

West Vancouver
415 total listings
37 sold

North Van
265 total listings
56 sold

Burnaby
368 total listings
64 sold

#36 Canadian Watchdog on 02.05.12 at 8:35 pm

#31 Randy

That would be the R8 Unemployment Rate that StatsCan only publishes once a year. Probably 10.5% now.

#37 Kip on 02.05.12 at 8:38 pm

“And while realtors may rejoice at the steamy market in 416 (one of the only places still delusional), it’s helped make the average house unattainable to the average family. That’s bad politics.”

There are far more than just realtors that have an interest in keeping this thing going. I can’t understand how the city of Toronto is constantly short of cash with all those thousands of condos now paying taxes where there used to be just vacant land in many cases. Add to that land transfer taxes in the millions and CMHC fees, lawyers and on and on.

Realtors are not the only people guilty of obfuscation on this issue.

#38 TurnerNation on 02.05.12 at 8:39 pm

More madness from Toronna. Most desirable houses are closer to a million bucks (2nd BPOE):

This site tracks the ‘gems’:

http://www.themash.ca/

#39 Pr on 02.05.12 at 8:41 pm

…he might even find the courage to ban the practice of banks giving people down payments… As the rule of law of the good father apply in this circumstance, but they(gouvernement) will do the opposite.

#40 Preciousss on 02.05.12 at 8:41 pm

For Garth.

http://www.jsmineset.com/wp-content/uploads/2012/02/image.png

What is a trillion. A trillion is a million million. If you had a trillion you could spend a million everyday for a million days. That is 2740 years.

We are headed for a monetary system reset. This madness can not prevail.

#41 Smoking Man on 02.05.12 at 8:47 pm

Get ready for a HAM invation in West TO. Lake Shore area.

#42 Van guy on 02.05.12 at 8:49 pm

Poco,

FYI one listings you posted a little while ago regarding V922738 1154 Homesteader ct Poco.
U posted price at $609,900.
It sold last month for $681,000
You said this one was in trouble. That is not true.
Your sources are not 100% reliable.

#43 Smoking Man on 02.05.12 at 8:50 pm

#40 Preciousss on 02.05.12 at 8:41 pm

What is a trillion. A trillion is a million million. If you had a trillion you could spend a million everyday for a million days. That is 2740 years.
………………………………………………………..
A trillion is worthless if all the people withdrew they’re labour.

#44 X on 02.05.12 at 8:52 pm

What percentage of new mortgages are of the cash back variety? Anybody have a link to that.

I don’t really think that changing 30 year mortgages to 25 year will make much of a difference.

But increasing the minimum down payment would…

#45 brainsail on 02.05.12 at 8:55 pm

“Enter the MLS Home Price Index.”

OMG, Canada invents a new math so that the innocents can no longer compare their housing crisis with the rest of the world.

#46 Daisy Mae on 02.05.12 at 8:56 pm

“Odds are the 30-year mortgage will be toast, and he might even find the courage to ban the practice of banks giving people down payments in the guise of ‘cash back’ home loans.”

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

Will he eat crow?

#47 Pr on 02.05.12 at 9:00 pm

How can intelligent people cant see what is going on! This will end mutch worst that i thought. Flaherty and Carney are well aware of all this, but for what ever reason, they let it go longer. Their is lies everywhere.

#48 Daisy Mae on 02.05.12 at 9:01 pm

“And while at it, he might follow lenders’ reluctant lead and outlaw ‘stated income’ mortgages which allow self-employed Vancouver hairdressers to get $500,000 mortgages.”

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

This government is so pathetic. And yet, I have two friends who continue to think the ‘Cons’ are just so damn wonderful. No accounting for stupidity….

#49 Pr on 02.05.12 at 9:04 pm

The middle class is going to be wiped out! 2-3 genrations of money will vanish. Just like the usa.

#50 Van guy on 02.05.12 at 9:06 pm

Correction on my previous post for sfh sales. That’s for “January 2012”

Condo/townhouse sales for Jan 2012

Richmond
Total listings 1238
Sold 90!!
BPOE!! Please answer this!!

Van east
563 total listings
63 sold

Van west
1991 total listings
207 sold

Burnaby
976 total listings
104 sold

Tri cities
1023 total listings
118 sales

Is it a good time to buy a condo?

#51 Daisy Mae on 02.05.12 at 9:17 pm

#19 Kip: “Obfuscate: To make so confused or opaque as to be difficult to perceive or understand. At least I learned something today.

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

Garth does this on purpose to drive us crazy…. LOL

#52 X on 02.05.12 at 9:18 pm

What is the date of the federal budget announcement in March?

#53 Mr Buyer on 02.05.12 at 9:19 pm

It is interesting. If a person yells FIRE in a crowded theater it is a crime as it causes a panic and people get hurt. If some one states MONEY IS CHEAP AT THE BANK BECAUSE THE GOVERNMENT MADE IT SO AND WILL CONTINUE TO DO SO, EVERYONE IS BUYING HOUSES BUY ONE BEFORE YOU ARE PRICED OUT…it is not considered to be a crime. There are more than a few differences between the two situations. There is the physical harm aspect, in a fire you can die, you generally can not die in a housing bubble. There is also the immediacy aspect, a fire is a clear and present danger which requires a knee jerk reaction along with suspension of disbelief and little or no analysis of the veracity of claims while traditionally one has more than a few seconds to buy a house. There is the blatant falsehood aspect of yelling fire when there is not one, while rising house prices are classically a part of a real estate bubble. So after careful consideration there are good reasons why a housing bubble and all entities inflating said bubble are not committing the same sort of crime a person yelling FIRE in a movie theater is. It is a good thing I thought things through otherwise I may well have been at best guilty of hyperbole. Upon reflection the creation and maintenance of a bubble would be hard to even classify as a crime. There would have to be some sort of misrepresentation of facts going on to even be considered fraud and then for all entities that inflated the bubble would have to conspire and collude to do so to become part of the fraud. Yes it seems the creation and maintenance of a bubble is not a crime until it is. sorry for wasting the last few moments of your life.

#54 zman on 02.05.12 at 9:33 pm

i dont think F will do anything.

With nothing really working in the economy in creating GDP, he at this time needs the housing market to continue like he never did before.

Any correction will cause more problems to the overall economy and he cant have this at this time.

#55 johnson on 02.05.12 at 9:39 pm

how are the cigars, garth? we used to smoke, but gave it up…cohibas are the fav…bricks,mortar,stone,cubans and granite. garnet too…this is our thong song…

#56 Golden Stu on 02.05.12 at 9:39 pm

#23 Waterloo Resident…

Now we get it, such a statement is so moronic that we know know you are pulling every ones leg as you seriously could not be that dumb.

However I think you could be onto something. If we all keep buying houses and it keeps going 15% per year, Canada could pay off the whole worlds debt in a few years. We would look like heros.

I think we should call Robert Mugabe, I think he has some experience.

#57 Devil's Advocate on 02.05.12 at 9:41 pm

What a bunch of paranoid buffoons. Do you honestly believe this crap? CREA and its member boards couldn’t care less if prices go up or down. We don’t make the market; we report the market you make by your increased or falling demand. Demand increased prices follow. As demand decreases so too do prices – to the point that those prices become so low you are compelled to start buying again. Why on earth would we want you to not know the real state of the market good, bad or indifferent?

You gullible fools. Garth is playing you. I know he is not so stupid as to be drunk on his own wild concoctions. What his motives are I do not know. What I can tell you is his mastery of SPIN certainly rivals that of those he condemns for their apparent use of it. Once a politician always a politician I guess.

Seriously Garth – for what purpose do you employ this cheap ploy. I’m disappointed. I honestly thought you above such sensationalist crap.

Oh I know there will be quite a kafuffle as the pups and poodles rush to your defense. But maybe not so much as it will be interesting to see if this post passes moderation or not. No matter; my disappointment you need not share so long as you know what I’m talking about and I think you well do.

Is there not enough merit in your message Garth that it can not be heeded without some kind of sensationalist paranoid grandstanding? I think there is but you are loosing those with level heads who are the most worthy audience when you cheapen your message by perpetuating such illogical paranoid myths.

Now, how is this ‘sensationalist paranoid grandstanding’?: “By removing raw data further from public scrutiny, the real estate monopoly’s found a way to easily misrepresent market conditions, smooth out trend lines and stabilize a volatile and emotional commodity…” Where, exactly, is the aggrandizement in those words? An index is an amalgam of data, usually run through a filter or two. The public is better served with statistics than interpretative representations. — Garth

#58 John Prine on 02.05.12 at 9:42 pm

It’s funny, the Harper government got elected by giving the perception to voters that they were the only ones with a handle on the economy and they are blowing all like they won the lottery, (planes, prisons, big military). Kicking the can down the road will only make the inevitable worse, most understand that, what is the politicians “block” that seems to preclude rational financial thinking. They say we should worry about the Liberals and Bob Rae. It may be just like how the Davis government with Flaherty and Baird left Ontario so many years ago…..

#59 Uh Oh Canada on 02.05.12 at 9:42 pm

Just spoke with a friend who is an accountant at the head office of a famous sports brand. They’re cutting about 200 jobs. Another friend lost her job last month. Went in the EI office and said it was completely packed. All this,coupled with some other massive head office closures in our area means that this whole housing bubble thing will not end well. Before, I didn’t think it would be this bad, but now I think differently. I now believe we’ll either be at par with America or even worse.

#60 Devil's Advocate on 02.05.12 at 9:46 pm

“losing” not “loosing” for the spelling and grammar police

#61 E on 02.05.12 at 9:50 pm

vancouver sucks.

#62 Mr Buyer on 02.05.12 at 10:01 pm

Imagine if you will a bordering country that is not only rich but actually the largest economy on a given planet. This massive economy undergoes a housing bubble that leads to a horrific crash. Now fast forward a few years and the bordering country first mentioned, while massive itself is not an economic Juggernaut as its neighbor is but follows lock step in the footsteps of the largest economy into a massive housing bubble and extends it further rationalizing that exceptional circumstances allow for this. From adolescence onward I decided while ruminating over the state of affairs I must always entertain many perspectives and one such perspective I must assume even momentarily is that things are not broken but rather they are working exactly as intended it is just that I have yet to understand the intention. Now this can lead into some very conspiracy theory forms of thought and also allows for the “one can not know the mind of god” conclusions but it can also be somewhat helpful to at least consider the perspective momentarily. So lets for a moment consider that the massive bubble presented by the largest economy on said planet served not as a warning but rather a road map as how to best profit from bubble making. Now that would be the ultimate burn. Having said all this I should point out that such an endeavor would likely require a heightened level of daring and competence on the part of entities fostering the latter bubble in the economically smaller neighboring country. Sadly my own life has shown that it is much better to be lucky than good and very often hapless bumbling is responsible for most incidents of god or bad fortune. This awareness leads me to often dismiss out of had malevolent string pulling and tentatively accept gross incompetence as being responsible for many events. Still it is somewhat comforting to imagine there is a greater unseen force working in the background guiding our moves even if it is often guiding us into situations not to our benefit but rather that of the guide itself. Then it is not my responsibility to wake up, stand up and participate but rather the responsibility still lies with the guide to be of good character and take good care of the flock.

#63 City Slicker on 02.05.12 at 10:05 pm

#47 Pr on 02.05.12 at 9:00 pm

How can intelligent people cant see what is going on! This will end mutch worst that i thought. Flaherty and Carney are well aware of all this, but for what ever reason, they let it go longer. Their is lies everywhere.
———————————————————–
Its the NWO, or Illuminati, they’re pulling the strings of the politicians and bringing down economies, I mean what better way to do it?!?!?
The ploy is obvious, in-debt/enslave, crash the world economy then bring on the anti-christ and New World Order.
Garth knows this he’s just keeping this site ‘real’.
But it’s all happening right before our eyes!

#64 JC on 02.05.12 at 10:05 pm

I wouldn’t trust our lying Leprechaun and his Lilliputian grasp of responsible financial policy to do the right thing for Joe Public in the next budget.

#65 Foggy on 02.05.12 at 10:07 pm

“Worse, if you strip condos out, the average detached home in 416 is selling for $743,993, which is a gain of 15% in twelve months.”

This is incredible. I think we’ve just hit a new threshold in muddy York. It’s as if the Toronto realtors have looked at Vancouver prices and collectively said: ‘Maybe we can push this thing higher in this city. Hey Ralph – you know that semi you were going to list for $700K? Let’s try $800K and see what happens. These people will pay anything these days.’
And so they will…

#66 These pretzels are making me thirsty on 02.05.12 at 10:19 pm

# 60 E

Word.

#67 Bobby Brown on 02.05.12 at 10:34 pm

“Here in Waterloo, there is a place selling new houses called ‘The Ravines’. One of the houses that was sold by the developer last year for $380,000 just sold 2 weeks ago for $540,000 ! We have bidding wars for houses going on here in Waterloo, its just crazy insane !”

I smell BS, and possibly a pumper in blog dogs clothing- what was the MLS # on that house? Monthly sales numbers are down in KW and have been for most of 2011. Lowest numbers since 2003 for the last 4 months running. I just don’t see the insane market you speak of at all.

Nor does anyone else. This is the power of anonymous comment on a busy blog. — Garth

#68 Keeping the Faith on 02.05.12 at 10:35 pm

This is great!!!
I love it!!! … MLS home price index or spaceman index, I don’t care what they call it, this bubble is going down like the ‘costa concordia’
Unless this new index re-inflates the networth or reduces debt of Canadians, its a red herring and will only catch the young and the dumb.
Let them pick whatever shade of lipstick they want, they are still putting it on a pig!!!
Renting is King!!!

Great post Garth and you are right, F is all but forced to act now, if for no other reason than to make the Cons to appear to have tried to stop the impending disaster.
Rearview mirror optics will be everything in 2016 during the re-election campaign.
LOL!!!

#69 Maxamillion on 02.05.12 at 10:35 pm

It’s all a big MIRAGE out there. I wouldn’t drink that water if I were you.

#70 Dr. Simmons on 02.05.12 at 10:38 pm

Hello, this is Dr. Simmons from the Psychiatric Ward at Vancouver General. We recently had a delusional patient escape, and while I cannot identify him, he easily identifiable.

He attempts to convince strangers on the street, cafes and on internet forums regarding Vancouver real estate. He has illusions of grandeur regarding infinite wealth stemming from Vancouver RE prices rising, and shows marked signs of schizoaffective disorder and experiences intermittent states of psychosis where he catatonically sings a song regarding Vancouver being the best place on earth. If anyone has seen an individual matching this description, pleas contact Vancouver General Hospital or the Vancouver Police; we are afraid of what may happen as he has a limited supply of medication and his delusions grow exponentially as he stops taking his medication.

Dr S.

#71 T.O. Bubble Boy on 02.05.12 at 10:45 pm

Since when did F make decisions based on logic and statistics?

Killing the housing bubble will only happen if there is some ulterior motive… he’s not going to sit back and watch the fake RE-inflated GDP die without some way for the Harper Cons and their friends to profit from it.

#72 truth hammer on 02.05.12 at 10:46 pm

It’s a clear example of ‘monkey see monkey do’. The real estate boards see that the federal government ponies up phony numbers all the time without sanction or restraint so they figure to do the same knowing that no one in the media will interfere with the obfuscation. Its like blaming a kid who starts smoking after riding to school in a parents smoke clouded mini van for a few years…learned behaviour. F and the boyz are setting the example……so the minions say ‘why not’?

Perhaps the feds gave the go ahead on the new 2.99 teaser rates because they want to get ahead of this

http://www.bloomberg.com/apps/quote?ticker=BDIY:IND

We could be in for a technical correction precisely because the underlying economics do not match the headline advertising. After the jobs numbers were launched, I’m sure they’re holding their collective breath. This hocus pocus with stats is something the average reporter isn’t capable of ‘grokking’.

http://www.bls.gov/web/empsit/cesbd.htm

This tightrope act is still playing out. We all know it’s a thinly disguised ponzi scheme…..but that doesn’t seem to matter. You would think that F would want to try and manage the debt stats so the explosion of grief thats coming could be minimized. I think they were in opposition so long that they have forgotten that they are no longer in election mode. This is Greece, Ireland, Spain all over again.

What was that Marcus Aurelias said about learning from mistakes of the past? Hello 1970’s redux …..I feel like I’m in a time machine. The last time we saw this much debt pile up we had a massive increase in poverty, skyrocketing taxes and trebling of civil service positions to mask the real issue of unemployment and then a vicious cycle of increasing debt to pay for the mistaken policy.

Will the feds simply dump another massive load onto the minors? Can tax increases be the elephant in the room and not rates. Lets expand our minds a bit here and ask where the money is going to come from when ‘joe average’ has an outlay of more than 100% of gross income for any period of time.

Think we aren’t close?…Wake up and drive by a foodbank!

#73 george on 02.05.12 at 10:49 pm

For savers in Canada, a sinking feeling

#74 Loan money to anyone on 02.05.12 at 10:53 pm

I sure hope F doesn’t increase the CMHC debt ceiling.

The Feds have warned us (Canadians) to reduce our debt and maintaining the current ceiling would help make that happen. We need to reduce debt now before interest rates start to rise again.

#75 Thomas on 02.05.12 at 11:15 pm

In St. John’s, NL the prices have tripled since 2002. However, average household income is 70k. For 350k, you get a new bungalow. 5 times income? Historical average is 2 – 2.5. But it’s different here, we have oil. I don’t think so!

#76 Willa on 02.05.12 at 11:19 pm

When F finally torches the 30-year mortgage and the liar loans, will he also finally announce that he was a moron for mucking it up in the first place?

Will the media say it? Or are they too cozy with CREA to state the obvious irony?

So then Harper’s spinmasters will succeed in using this as a new demonstration of just how wonderfully the Conservatives are managing the economy.

And the public is going to swallow it.

Man, that’s a pill.

#77 Canadian Watchdog on 02.05.12 at 11:20 pm

#57 Devil’s Advocate

You make good points DA but your economic sense is misguided from the real world. I have yet to hear supportive arguments with facts regarding i) what really drove the market out of the 2008 crises ii) what will keep the market going for the next decade and why it won’t majorly correct. If you’re going to explain to us why it has or why it will last, please add substance by providing stats, math, inputs and outputs rather then being a screaming queen.

The latest from your people at CAAMP. http://i44.tinypic.com/x5eeeh.png

#78 sam.i.am on 02.05.12 at 11:23 pm

Boots or hearts… just a matter of time.

#79 BPOE on 02.05.12 at 11:27 pm

http://vreaa.wordpress.com/2012/02/04/seller-freedom-care-of-buyer-my-friend-bought-a-kits-bung-in-2002-for-578000-listed-it-this-week-one-showing-on-tuesday-for-1-5-hours-closed-the-deal-today-for-1975000/

Put that in your pipe American and smoke it. Returns that America will never see

#80 Gypsy Kid on 02.05.12 at 11:27 pm

Well, emotions drive the stock market, as well as the real estate market. I think the people who can “see” and “analyze” this current bubble are not being heard willfully. There is no other end but the obvious – POP!!

Garth, you and others have and will expound to your last breaths but there is no saving the people. Too late. The words were “pearls to pigs”.
Of course there are those who have made tons of money in the last five years or so, but I fear for our economy as a whole and for those silly, pathetic people who bought at the top of the bubble. sigh…I’m not looking forward to what will happen soon. It will not be good for most of us. We will, most of us, be affected one way or another. If not ourselves directly, those we love and care about.

Damn Cons…

#81 Devil's Advocate on 02.05.12 at 11:29 pm

“Now, how is this ‘sensationalist paranoid grandstanding’?: “By removing raw data further from public scrutiny, the real estate monopoly’s found a way to easily misrepresent market conditions, smooth out trend lines and stabilize a volatile and emotional commodity…” Where, exactly, is the aggrandizement in those words? An index is an amalgam of data, usually run through a filter or two. The public is better served with statistics than interpretative representations.” — Garth

Really at the end of the day, neither you nor your loyal band of Blog Dawgs ever took those statistics CREA or its member boards gave you at face value anyway. So really what difference is it to you what form of “unbelievable” information we provide your just going to endeavor to refute it anyway.

#82 T.O. Bubble Boy on 02.05.12 at 11:31 pm

Maybe I’ll make up my own house price index, called the “sanity index”.

Right now, this index is right around 0%. This means you need to be 100% insane to believe house prices are reasonable.

#83 coastal on 02.05.12 at 11:32 pm

” I honestly thought you above such sensationalist crap.”

Talk about calling the kettle black. D.A. was the one 8 months ago sensationalizing how hot the Kelowna market was while it tanked, then he disappeared from this board for many months due to having his ass handed to him on a platter. A lying realtor scumbag is the last person to be calling Garth “sensationalist”.

#84 Devil's Advocate on 02.05.12 at 11:34 pm

Hey but thank you for affording me the air time on your blog and especially the the time you took to respond. It speaks highly of you.

#85 sam.i.am on 02.05.12 at 11:34 pm

@75 Thomas… Been watching and agree. NL is a beautiful province and I travel there every year. Usually a road trip but of late we fly. I felt kinda sad parking the borrowed honda 650, overlooking a ‘random’ bay on a late summer afternoon. Not a single working boat in view. Plenty of monster trucks towing gigantic trailers with ab plates though.

#86 Devil's Advocate on 02.05.12 at 11:38 pm

BTW Spelling and grammar police alert to my post at #76

#87 Devil's Advocate on 02.05.12 at 11:47 pm

Speaking of “indices” how often have I read on these blogs where the Case-Shiller Housing “Index” was used in support of your or your merry band of Blog Dawgs arguement? Oh but that is different… right? Wrong!

#88 a prairie dawg on 02.06.12 at 12:04 am

“Enter the MLS Home Price Index”

– — –

I picture a spinning pinwheel chart with three sections…

-It’s a good time to buy

-It’s a very good time to buy

-It’s a fantastic time to buy

#89 dd on 02.06.12 at 12:07 am

,,,,This is as regressive as it is cynical. By removing raw data further from public scrutiny, the xxxx monopoly’s found a way to easily misrepresent market conditions, smooth out trend lines and stabilize a volatile and emotional commodity – just when the whole thing’s in danger of imploding.
………………………………………………………………………………..

Wow, u just described how the government compiles the GDP and inflation numbers. And you think inflation is running at 2.9%. Think again.

#90 Canadian Watchdog on 02.06.12 at 12:08 am

#87 Devil’s Advocate

Waiting for you DA… #77

#91 Min in Mission on 02.06.12 at 12:11 am

Is that some kind of magic mirror? A Garth “before and after” kind of thing??

I have no problem believing that we are in for some kind of major re-alignment in our entire country. There is absolutely no way that we can continue to have “super size” increases in housing prices when we have stagnant, or decreasing, income levels.

Sure, there are some people making great salaries, but, the great majority of people are, realistically, managing to get by.

#92 Freedom 55 on 02.06.12 at 12:11 am

Feathers a little ruffled DA? Shouldn’t you be setting up some showings for all those customers instead of wasting away on some pathetic blog?

#93 Devil's Advocate on 02.06.12 at 12:12 am

#77 Canadian Watchdog on 02.05.12 at 11:20 pm

Simple supply and demand my friend, simple supply and demand.. Cheap easy money and lots of it. House horny Canadians and lots of them. What don’t you understand? To put numbers on them only serves to belabor the point.

Will it correct? The market is always seeking a state of equilibrium… always. It’s just a matter of at what point that equilibrium might be and whether prices must rise or fall to achieve it. Will prices go up or down? Yes – prices will eventually go up or down. Which direction depends on an incalculable number of variables.

#94 45north on 02.06.12 at 12:13 am

Real estate boards in Toronto, Vancouver, Calgary and Montreal are banding together with the mothership, CREA, to launch the Home Price Index. The goal: to make real estate look stable. Predictable. Safe.

on one hand:

Flaherty doesn’t have a hand in this – if real estate boards decide to present their data in a different format then so be it.

on the other:

real estate statistics heavily influence the market. Based on a stable, rising market people buy, based on an unstable declining market people don’t.

In my last post, I quoted specific sales figures for January 2012 and said that between January and March in the GTA, sales always double. It looks like the real estate boards are scared. It looks like they are not just scared, it looks like they are desperate.

OK, the government could impose reporting rules on the real estate boards. The opposition parties could propose such rules – I’m talking the Liberals, the NDP, le Bloc Québécois, the Green Party.

Now is the time for the government to act. Now is time for the opposition parties to act.

#95 NFN_NLN on 02.06.12 at 12:14 am

Bubble? What bubble?

http://www.moneyville.ca/article/1125455–toronto-s-tiny-cube-house-sells-again-for-475-000

A 27-year-old graphic designer has paid $475,000 for the ultimate artistic statement — with help from mom and dad. Samantha Turnbull was one of six bidders who’d offered over the $349,000 asking price for the unusual 800-square-foot Coxwell Ave. house on stilts

#96 Rich Renter on 02.06.12 at 12:17 am

So over to F, to screw us
Edited for accuracy

#97 Smoking Man's Spell Checker on 02.06.12 at 12:17 am

Yeah…. too big of a job…. I quit.

#98 Canadian Watchdog on 02.06.12 at 12:27 am

#93 Devil’s Advocate

Exactly my point. Avoid the questions and say the same thing every RE perma-bull says, nothing. That’s why I won’t bother making you look silly on this blog. Carry on with your rant.

#99 Devil's Advocate on 02.06.12 at 12:36 am

Canadian Watchdog

What might seem the most logical of predictions can and will be upset by the least logical of government interventions just as might be a man’s plan to a woman’s prerogative.

#100 Devil's Advocate on 02.06.12 at 12:40 am

#83 coastal on 02.05.12 at 11:32 pm

FAIL.

The Kelowna market did not “tank” 8 months ago and I was too busy working.

#101 Van guy on 02.06.12 at 12:48 am

#79 BPOE on 02.05.12 at 11:27 pm
http://vreaa.wordpress.com/2012/02/04/seller-freedom-care-of-buyer-my-friend-bought-a-kits-bung-in-2002-for-578000-listed-it-this-week-one-showing-on-tuesday-for-1-5-hours-closed-the-deal-today-for-1975000/

Put that in your pipe American and smoke it. Returns that America will never see
——————————————————————-

Seller fears loss of equity. Great move by the seller here creating a greater fool. Didn’t you see the numbers out pulled for th rebgv? Condos in every market are effed. Richmond has 2000 listings while selling 160. Mmm you must be a realtor?

#102 Nostradamus Le Mad Vlad on 02.06.12 at 12:56 am


“This is as regressive as it is cynical. Go back to screwing seniors out of their pensions, just when the whole thing’s in danger of imploding among people who get aroused by fungus. So over to F, to save us. The obfuscation. OMG.”

Some here will have cottoned on to what is happening. The intent of the CPC was never to serve Canada or Cdns., only their friends here and here.

Face it, we’re screwed one way of the other. MLS, CREA and the Pansy Pot Boys can do what they want, blow lots of smoke up sheeples’ asses, but it won’t change one whit.

Evolution and karma (life) dictates what happens when, and to whom it happens to, not us. The only saving grace is the cycles are changing — the west is sinking, the east is rising but the vast majority of westeners will not remove their blinders.
*
#240 OneMoreThing on 02.05.12 at 2:27 am — “Sweet, I’m In!” — Way to go! See you on the other side, and don’t be late!

#261 GregW, Oakville on 02.05.12 at 11:57 am — Hi Greg. Probably. Iran isn’t dumb. The US and Israel created Stuxnet (and newer versions of it), so better believe that Iran, Russia, China etc. are all working together to form a mirror, so the west eventually blow themselves up. Stuxnet worked well in Fukushima (shut down its emergency systems when the ‘quake hit).

#303 jim on 02.05.12 at 5:20 pm and #294 turnernation — “The elite have their foot on the working class throat and all they care to do is waste their money and time on sports.”

The following from wrh.com echoes what you have said — Thought For The Day: “Short, successful military adventures are as effective as the Super Bowl in diverting people’s attention from unpleasant truths.” — John Stockwell, former CIA official
*
Facebook Better to look at junior exploration cos.; BoA Cashless society; Income Tax Is Evil About as evil as it gets; Sovereign Debt and Triple A ratings; Iran’s Oil With Europe having a cool winter, it will be interesting to see which countries are cut off from receiving oil, and here are a few who have asked Iran not to stop the flow.
*
Iran ‘Quake Where’s HAARP these days? Mitt “Goldman Sachs” Romney Follow the money; CC Too cold for trains in northern Sweden; 13:44 clip Never mind Fukushima. This is America; DHS and TSA These two can go in the crapper with the CPC; Syria and Libya Foreign-backed subversives in both places; NDAA Tennessee pushes back; Homeschooling Fair to say it’s a good bet; Monsanto Interesting TPTB won’t eat their own food.

#103 Bobby on 02.06.12 at 12:57 am

For #87 Devils Advocate,
I’m quite familiar with the Case -Schiller index. It was created by an economist and a mathematician to try and quantify what home prices should be. It started using data going back to 1890 and clearly shows an emerging bubble that eventually burst.
In fact, they suspect that prices will over correct but will eventually return to the norm. That is, if I recall correctly, a price increase on an annual basis of .4% greater than the rate of inflation.
Quite simply, it wasn’t created by Dave Lereah of the NAR to keep pumping a bubble market. My guess is that the new index by CREA will probably state Victoria is one of the most affordable markets. LOL

#104 guy from toronto on 02.06.12 at 1:00 am

Devil’s Advocate; give it a rest.

You are tiresome. You think your sorry band of realtors aka mls.ca compares to Case Shiller? What a joke. You are delusional.

It is painful to read your wordy and awkward posts and to watch you grovel and spar with Garth and others.

You keep saying you’re going away.

Do us a favour, and exit stage right.

#105 poco on 02.06.12 at 1:17 am

#42Van guy on 02.05.12 at 8:49 pm
Poco,
FYI one listings you posted a little while ago regarding V922738 1154 Homesteader ct Poco.
U posted price at $609,900.
It sold last month for $681,000
You said this one was in trouble. That is not true.
Your sources are not 100% reliable.
____________________________________________

you seem to be overly concerned with my postings on listings within the tri cities area—- anything you find i’m not correct with so far?—please let me know –do you write all these down and keep track–come on you must have something better to do than that

i get what info i want from my sources and do my own evalution and analysis of properties

the property you referred to was in trouble and if you take some time to look at all the facts regarding the listing you’ld see what i was getting at. Do a little of your own analysis before jumping to conclusions

first listed way back in June 08–asking 779k–on and off the market til the final price drop to 609k in Dec 2011–no takers until that price drop–probably brought several potential buyers in at that price–i don’t know if that is what happened

remember this is a SFH– the last type to see any real price drops when a market turns– usually condos first and then attached (TH) and within the tri cities this is how it has been going for the last few years
so a sale of 681k from the original asking of 779k is a substantial decrease in tax free money–98k–or if you look at it in terms of a percentage–12.6%
when the majority of SFH within the tri cities have not started their price decline in any sustantive way(30k to 50k price drop is nothing yet) a 12.6% is a hell of a decline at this present time–i have no doubt these price reductions will be with us for some time–will we see an across the board price drop of 12.6% in SFH by this fall ??? who knows

12.6%– larger decline than many condos in the tri cities
and please:
“let your brain catch up to your mouth before you post”

#106 raj on 02.06.12 at 1:28 am

Its crazy…everyone thought the market was going to the bust 2 years ago. If you are looking for a place and going to live in it and be a part of the community, why are you treating it as an investment? People buy cars knowing they will depreciate 15-20% as soon as they drive off the lot. They don’t think of it as an investment. They love the car, the way it feels, the take care of the car never thinking “O i just lost $10000 by driving it for a month. Yet all of you are thinking of your home as an investment which should make you thousands of dollars every year and use it as an ATM. I am looking for a home. I don’t want to rent a condo or a house and pay someone else’s mortgage. I will put down 20% as a down payment and i will also invest the rest in other investments. I promise you I will enjoy my home, be proud of my stainless steel appliances, and enjoy the neighborhood. When you are settled down and want to enjoy your life and have a home, even if the values come down eventually they will go back up. My home is not a bank, or a stock but my home. It is where I will have family dinners, bbqs, parties, What is wrong with everyone. I’m sure there are so many of you out there renting right now that could have bought 2-3 years ago that are kicking themselves. A friend of mine that rents had to move twice, once because he had a slum landlord and the other time his great place for a great deal, ended up being on the market sold. I would never want someone to dictate when I’m going to move, what color my walls should be and what pets I should have. If you can afford a home with a reasonable down payment, you should buy a house. If you are borrowing from Paul to pay Peter and are wreck less financially, what the hell are you thinking. RENT and save and see what happens. Tell me most of you wish you would have bought in 2008 when the world was coming to an end. Where would you be now. Make your own decision. I remember years ago locking my rate in because I was scared of it going up. Listened to Garth actually and locked it in. My gut told me keep it open but my head and all the “experts” said you should sleep at night. Paid a massive penalty to get out of the mortgage(can’t blame anyone only myself) I think this blog is very informative but be an adult and make your own decision.

#107 Crash Callaway on 02.06.12 at 1:31 am

When the graffiti (truth) gets decipherable in areas that will turn the piggies away from the trough,
Govt, banks and realtors throw a fresh coat of whitewash over it.

Totally disgusting.

#108 Mr Inconsistent on 02.06.12 at 1:44 am

Garth,

Welcome back to the tinfoil fold, man. I was afraid you had gone all mainstream on us. Completely agree that the industry is trying to fudge the numbers.

Reminds me a little bit of the carmakers in the mid 2000’s when they decided to move away from the Kelly blue book for calculating the value of second hand cars. It was driven by an accounting trick: if they wanted to report bogus higher earnings, they had to artificially inflate the value of cars they were getting back after leases expired. About half an hour after they made the accounting change the stocks started a long painful decline towards zero.

#109 Jay Currie on 02.06.12 at 1:56 am

Another house went up on my leafy street in Oak Bay. That’s a total of seven in twenty and there are three more which will list this spring for the full 50%.

Total asking price about 11 million.

Saw some HAM out on the street shaking his head with the agent. Too many signs.

Beware the perfect storm.

#110 Harlee on 02.06.12 at 1:58 am

#23 Waterloo Resident
Here’s the thing….Are WAGES for everyone in the GTA going to rise 15% a year? With all the bad news out of Ontario these days,I doubt it. I don’t expect that from any part of the country.The speckers need new suckers or else they’ve got bupkis.Sort of like the snake that starts eating its own tail and then eventually eats itself up.
#70 Please Dr. Simmons,you’ll have to be more specific. There are so many delusional RE “patients” running around Vancouver ,you’ll have to cough up a real name so we know who you’re talking about …(snicker)
I’m amazed that there are people on this site who had to look up the meaning for “obfuscation”. What about “aggrandizement” ? Was that a toughie too ?
What is happening now in RE isn’t all that new. Between 1905 to 1912 RE was Hot Hot Hot in Western Canada. Three and 4 story buildings – government,hotels,dept. stores ,office buildings were going to be built. Almost overnight! Land ,way out on the outskirts of small communities,was being sold to the greater fools of the day. Those were the heady,booming times.There WAS a lot of building going on,so why wouldn’t it continue? Forever! So what happened ? In early 1913 alot of the credit coming out of Europe slowed to a trickle. Half-finished hotels or office buildings were left empty,some to rot . One developer in Vancouver,planning to build a 3 story building ,had to pair it down to two.He didn’t have the money for three. People who built houses on the outskirts found themselves stranded,without any sewer or electrical services. Then you know what happened in Europe….WW 1 . The Great War,to end all wars…..
I don’t predict the future,but I sometimes wonder if we’re not doomed to repeat it. As they say,time will tell….

#111 Corban on 02.06.12 at 2:39 am

Biggest Prick On Earth? Is that what BPOE means?

#112 new-era on 02.06.12 at 3:15 am

We are so screwed

Population of 35 billion people. 600 billion if the house of cards crumble. Approxiately 17 billion per canadian

Population of 35 billion. Close to 1 Trillion dollars in total issurance from CMHC . Approx. 28 billion per canadian

Population of 35 billion.CMHC increase issurance from 450 to 600. Which is 150 Billion. In 4 years mortgage inssurance goes up by 4.28 billion per person.

Approxiately 150 billion / 15 billion (assuming 2 person per family) = 10 Billion per family.

If most of the housing was bought by HAM, with truckloads of cash. Why has the debt ceiling been hit in only several years.

It sure appears that only ones buying are Canadians leveraging and re-leveraging their house and bidding against each other.

#113 maya on 02.06.12 at 3:26 am

The first week of year of dragon, China Beijing’s real estate price has dropped 25% compares to last Feb. It’s good sign to see that Canadian market will follow….

#114 Bailing in BC on 02.06.12 at 3:36 am

#29 TurnerNation

It helps if you believe in predestination. That guy was totally going to hell anyway. There was nothing you could do. God willed it. Amen.

#115 Bailing in BC on 02.06.12 at 3:39 am

57 Devil’s Advocate on 02.05.12 at 9:41 pm
“CREA and its member boards couldn’t care less if prices go up or down.”

Then why are all the realtors I know crapping their pants? Could it be that listing houses that the sellers won’t drop the price on and buyers refuse to buy doesn’t make them any money?

#116 Archer on 02.06.12 at 4:14 am

dd#89

Wow, ever have that eye opener. You just hit it. That is exactly what they are doing.

#117 Mr Buyer on 02.06.12 at 4:43 am

Well its seems it is a great time to buy or rather it is the best time to buy in the 28 years of experience this lawyer writing for monyville writes in this article…
http://ca.finance.yahoo.com/news/why-it%E2%80%99s-a-good-time-to-buy-a-home.html
He addresses every point raised on this blog in a cursory and semi-intelligible manner and left me feeling reassured. He should have been a real estate salesman. (I was kind of hypnotized much like Conan was by Thulsa Doom just before Conan snapped out of it and hacked off Thulsa Doom’s head with what remained of Conan’s broken sword and then Conan tossed Thulsa doom’s head onto the steps below. Thulsa Doom was explaining to Conan that Thulsa Doom was responsible for the health and power of Conan because Thulsa filled Conan with passion for vengeance for the murder of Conan’s parents by Thulsa Doom and Conan’s enslavement) A true classic movie if ever one was made..) Seems like we were all sadly mistaken, Apparently 150% debt to income ratio is not so bad seeings how 2/3 of that is a mortgage and even if rates increased to 5% the payments would be manageable. This post runs on and on so I put the remainder of it up at
bubblepedia.org
As I am becoming excessively long winded and light on substance lately. Long story short, there is a massive bubble and great difficulty ahead in my mind but how am I supposed to know?

#118 P & T S on 02.06.12 at 4:49 am

Nearly HALF a MILLION DOLLARS for this, but at least it does have an undercover single car parking space, of sorts..

http://www.moneyville.ca/article/1125455–toronto-s-tiny-cube-house-sells-again-for-475-000

Sorry, but that’s a VERY large pricetag for trendiness, especially in these times.

Bearing in mind that this silliness has been happening in many Countries, and of those, many are now feeling the adverse effects of price correction, this surely does not bode well for Canada (and I note, for Australia also).

Maybe after the superficial repaint and the interior “mobile trolley” construction, the good lady will be able or willing to offload to an even more financially unwise trendy?

This isn’t going to end at all well.

#119 gmc on 02.06.12 at 6:07 am

HEE HAA I am out !!!!!!thank god for BMO coming out with the 2.99, I could not sell for one year then all of a sudden we get two bids and one that stuck.
I am so happy, i get ride of the wife, she is trying to kill us financially , everybody else has granite??
now I am debt free and have money in the bank, rrsp, tfsa, and some precious metals and good Canadian junior gold producers mining companies, san gold, lakeshore gold, Osiko, and Detour lake gold.
I just visited the bank they are willing to lend me $75 000 for an investment account,at 3,5 %, here is my thinking, 1/3 gold and silver, 1/3 junior mining for my TFSA, and the rest in Central fund of Canada.
cheers gmc life is good again, and oh as far as the divorce at least I get to have half of my money now, before I worked everyday many hours OT just to make end meet,
I AM SO HAPPY, I feel free now, so I am heading to Thailand at the end of the month to meet my new bride and buy a new house for us ($34 000) CDN and then buy some farm land and rubber tree plantation.
cheers you ALL!!!!!

#120 truth hammer on 02.06.12 at 6:59 am

#95……thats what passes for architectural excellence in the 416? It looks like a slap tin job from an Armenian rubbish tip. Its east european inspired anyway…no closets…..because they have to wear all they own 24/7 to stay alive….ergo no idea about the need for closets……..no windows….glass makes it hard to stay warm……..makes sense…..Oh I get it…..it was designed by an unlicensed architect……like the ones who get mad when we won’t let them practice in Canada for having recieved their training from the Balkan Highlands of Architecture – Gun Running and Medicine.

goofy broad….goofier parents…..no idea what 475K even is……..I smell granny bashing. They obviously didn’t make their own dough.

#121 Mr Buyer on 02.06.12 at 7:00 am

We are now set on ludicrous speed. I guess we have been asking the wrong questions here. The determination of the existence of a bubble is not massive increases in prices for no apparent reason other than people asking what ever they want for a house and buyers simply telling the banks what they need to make the purchase so long as a bearable monthly payment can be derived so there is no real estate bubble. The doubling of house prices across the country over the past decade does not indicate a bubble what so ever instead it is the relative size of the monthly payment that defines a bubble. I will share my perspective once again be it some what narrow minded. House prices increased from 143k to 163k from 1990 to 2000 a delta of plus 20k while house prices have increased from 163k to 339k from 2000 to 2010 a delta of plus 176k (now the mythic average Canadian home price stands at around 353k a delta of 184k and from 2000 to 2012 a delta of plus 203k and from 2002 to 2012 a delta of plus 165k from ). The increase in average house prices in the entire decade from 1990 to 2000 was 20k which is roughly equal to the increase in house prices from 2009 to 2010 and way less then the increase in house price from 2007 to 2008. In fact every year from 2001 onward saw increases of over 15k and closer to 20k with the exception of 2008 which saw a decrease in price of 3k. No, in my mind posting annual price increases roughly equivalent to the price increase posted for the entire previous decade means we are in a bubble. Nice try Thulsa Doom. The price data came from an excel workbook posted on the net listing average mls sale prices from 1990 to 2010 (the name of the file is Table1_EN_Canada_w.xls you can google it).

#122 Mr Buyer on 02.06.12 at 7:12 am

Here is an idea. How about the banks getting a flat fee of say 5 to 10k for administering a government backed housing loan, otherwise the government should provide and administer it themselves. I mean 150k to 250k being gouged out of the economy over the course of a mortgage. That has to be a huge drag on the economy.

#123 Canuck Abroad on 02.06.12 at 7:21 am

Some perspective, for the doomers…

http://www.thereformedbroker.com/2012/02/05/get-your-shit-together/

#124 Steven Rowlandson on 02.06.12 at 7:47 am

Folks, the numbers don’t lie. Housing is HOT regardless of what the American tells you. Cool areas can afford 15% price rises. This isn’t America folks, we have real jobs that pay well. Everything is just fine

Oh really? Are you talking government and banker jobs? Union jobs, science and engineer jobs, doctor and lawyer jobs?
Or are you talking about those jobs that involve expert use of physical skills or if you like a skilled trade?
Skilled tradesmen don’t get paid jack and are asked to compete with minimum wage people and people just off the boat plus put up with light work weeks and convenient bankruptcies. Can you say how much can you get by on this week? Some of my former employers could and did.
To say that canada is a land flowing with milk and honey and the price of real estate can not and should not have a reality check and come down is BS!
To say that canadian working men get good pay and have it good or better is BS.
It is not different in canada and a mans pay won’t mean a damned thing untill real estate prices crashes by 90%. Working and living in Canada thanks to the real estate market starts at between 80 and a 120 grand a year. In the real world it is work for 10 or 15 an hour skills or no skills or its no job for you and of course no raises. Do you people really think you could work men for pay that is 40 years out of date and then sell them houses they could never afford and expect them to live at the same time? You know that routine where a man gets a job, gets a woman, starts a family and tries to live the good life or at least a decent one. May be chummy ,bummy rummies in the back ally don’t have a right or reasonable expectation of such a lifestyle based on making the effort but working men do.
Did escalating real estate prices, no pay raises, combining incomes and changing the rules of the game cause harm? You bet it did!

#125 Devil's Advocate on 02.06.12 at 8:35 am

#98Canadian Watchdog on 02.06.12 at 12:27 am
#93 Devil’s Advocate

Exactly my point. Avoid the questions and say the same thing every RE perma-bull says, nothing. That’s why I won’t bother making you look silly on this blog. Carry on with your rant.

Oh please do. Take your time and think it through… but please… do as will I.

#103Bobby on 02.06.12 at 12:57 am
For #87 Devils Advocate,
I’m quite familiar with the Case -Schiller index. It was created by an economist and a mathematician to try and quantify what home prices should be. It started using data going back to 1890 and clearly shows an emerging bubble that eventually burst.
In fact, they suspect that prices will over correct but will eventually return to the norm. That is, if I recall correctly, a price increase on an annual basis of .4% greater than the rate of inflation.
Quite simply, it wasn’t created by Dave Lereah of the NAR to keep pumping a bubble market. My guess is that the new index by CREA will probably state Victoria is one of the most affordable markets. LOL

#104guy from toronto on 02.06.12 at 1:00 am
Devil’s Advocate; give it a rest.

You are tiresome. You think your sorry band of realtors aka mls.ca compares to Case Shiller? What a joke. You are delusional.

It is painful to read your wordy and awkward posts and to watch you grovel and spar with Garth and others.

You keep saying you’re going away.

Do us a favour, and exit stage right.

But of course the Case-Shiller Index would be far more reliable and less susceptible to being, as Garth says, “an amalgam of data, usually run through a filter or two”. Their raw statistics are so much more reliable to begin with. And from where is it they gather most of that raw data by the way?

#115Bailing in BC on 02.06.12 at 3:39 am
57 Devil’s Advocate on 02.05.12 at 9:41 pm
“CREA and its member boards couldn’t care less if prices go up or down.”

Then why are all the realtors I know crapping their pants? Could it be that listing houses that the sellers won’t drop the price on and buyers refuse to buy doesn’t make them any money?

Because you don’t know what you are talking about. It’s a very competitive business and there is ALWAYS a portion of the realtor population which is crapping their pants. The attrition rate in this industry, at even the very best of times, is HUGE. More than fifty percent don’t last two years and ninetyfive percent don’t last five.

#126 TurnerNation on 02.06.12 at 8:44 am

Poor DA; he likely spent another Kelowna open house weekend alone in an 900k Boomer McMansion, frantically doing his daily zig ziglar medidations and posting on this pathetic weblog!!

#127 TurnerNation on 02.06.12 at 9:11 am

For newlyweds, the car sign of “Just Married” is replaced with “Pre-Approved”!!

Ready to buy a 100 yr old toronto semi for 600k no home inspection.

I predict that “Pre-Approved” will go the dodo’s way once mortgage rules are tightened. It will become: pony up hard cash or else. 20% down, 25 yrs.

#128 OttawaRenter on 02.06.12 at 9:13 am

1.4 billion Euro house:

http://www.youtube.com/watch?v=WBHxIq3PvY4

#129 Roial1 on 02.06.12 at 9:31 am

http://www.shoecomics.com/

about retirement????

#130 C on 02.06.12 at 9:39 am

From MLS.ca for Burlington, Ontario
Detached/House
2 or more bedrooms
2 or more bathrooms

Total listings:

January 5, 2012 384
6 387
7 392
10 402
11 407
13 420
16 421
17 425
19 434
20 437
21 443
24 451
25 459
26 462
28 464
31 454
Feb 2 460
5 467
6 471

The train keeps on rolling…

#131 Devil's Advocate on 02.06.12 at 9:48 am

#126TurnerNation on 02.06.12 at 8:44 am
Poor DA; he likely spent another Kelowna open house weekend alone in an 900k Boomer McMansion, frantically doing his daily zig ziglar medidations and posting on this pathetic weblog!!

Actually I took the weekend of and spent some time with my Amazonian svelte wife. Yup, I pretty much got it all as far as I’m concerned. And how was your weekend?

Oh and yes I do like and listen to Zig as a matter of fact. Open houses? Not so much. Posting on this “pathetic” blog? Too much. Specifically readying your “pathetic” posts? Priceless.

#132 Cookster on 02.06.12 at 9:49 am

A couple of observations about the slowing Toronto market. First co-worker sold his Beaches bungalow within a week of listing it at Thanksgiving. Second coworker listed St.Clair / Bathurst house around the same time and it sat for 3 months before selling 90K below original listing. probably over-priced to strat with but he had about 80 showings before getting a single offer – no low balls – nothing!

#133 Roial1 on 02.06.12 at 9:53 am

#68 Keeping the Faith on 02.05.12 at 10:35 pm

Rearview mirror optics will be everything in 2016 during the re-election campaign.
LOL!!!

The real scarry part of that is that they have till 2016 to keep on screwing us!

#134 Opportunity on 02.06.12 at 10:14 am

F couldn’t save himself let alone the rest of us. He screwed up Ontario as finance minister so why should anything change?

#135 TheSide on 02.06.12 at 10:28 am

Garth,

What do you think of the relationships between the markets (equity) and the housing situation. Obviously, the bank may make less due to less loans available to be lent out and there may be some minor fallout of consumer discretionary. However, companies here can always squeeze their employees (like the US did) after the crash for additional productivity gains. Also, companies in resource dominated sectors are likely to be, for the most part, untouched.

Thoughts?

#136 T.O. Bubble Boy on 02.06.12 at 10:32 am

#5 BPOE should go hang out with some of the ex-Caterpillar workers in London, ON and see how his statement holds up…

Folks, the numbers don’t lie. Housing is HOT regardless of what the American tells you. Cool areas can afford 15% price rises. This isn’t America folks, we have real jobs that pay well. Everything is just fine.

I’m pretty sure Indiana has those Caterpillar jobs now — unless collecting EI is BPOE’s definition of having “real jobs that pay well” here?

#137 Victor on 02.06.12 at 10:50 am

Line of credit interest rates rising for some
By Ellen Roseman | Sun Feb 05 2012

I’m starting to hear complaints again. To be specific, TD Canada Trust is raising rates on personal lines of credit not secured by collateral.

Meanwhile, CIBC is adding a $260 discharge fee for those who close out lines of credit or loans secured by real estate.

Ed Chapman, a TD customer, said his line of credit rate was going up to 7.25 per cent (from 4.25 per cent). He was mystified because he’d made all his payments on time.

TD spokeswoman Barbara Timmins said the adjustments were intended to “ensure a risk-based approach that evaluates factors including a customer’s credit situation and their relationship with us.”

Does that mean you get a better rate if you have more high-value products? That’s my understanding of the comment about a customer’s relationship with the bank.

Of the TD clients with unsecured LOCs who are getting notices, 60 per cent will see their rate go up and 40 per cent will see their rate go down, she said.

The increases — which range from 0.5 to 3.75 per cent above current rates — and the decreases — which range from 0.5 to 3 per cent below current rates — go into effect April 2.

http://www.moneyville.ca/article/1125691–why-your-line-of-credit-may-cost-you-more

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

Additional insight on the TD unsecured LOC issue that has been discussed on the blog in the last week.

#138 PrairieMongoose on 02.06.12 at 11:05 am

We are so F’d

#139 Victor on 02.06.12 at 11:07 am

No sale, but agent still gets $9,446
Friday, Feb 03, 2012

The judge found that the agent had worked hard to bring in a full-price offer and Fody had just decided to change his mind. Willaert won its commission of $8,995.50 plus GST of $449.78 and $1,050 for his legal fees.

This case is important for sellers to understand. In my opinion, it was wrongly decided because commission should not be paid unless the seller accepts an offer. This decision is currently being appealed.

Here’s why you should be careful though. Some sellers try to create bidding wars by deliberately listing their properties below fair market value. If you do this, make sure that your listing agreement is clear that you only will pay commission if you actually accept an offer.

http://www.thestar.com/article/1124668–weisleder-agent-was-paid-9-446-commission-after-he-brought-in-an-offer-but-seller-changed-his-mind

#140 Devil's Advocate on 02.06.12 at 11:17 am

#138PrairieMongoose on 02.06.12 at 11:05 am
We are so F’d

That generally is the sequence of events that passes through a bees brain just before its asshole does upon hitting the windshield of a car. Our situation? I don’t think it is nearly so dire. But you run with that as the rest of us go about fixing things. And fixing things we are, albeit slowly, fixing them none-the-less. For it has been three and four years since the economic crisis of 2008 and we seem not to have fallen into that economic Armageddon so many feared we were headed.

As I keep telling you three and four years is a long time in any economic cycle. Most certainly this economic doldrums will last longer than those before but pull out of it we will. Any anyway, as I have also said many times before; this is not a departure from norm it is a return to it.

#141 disciple on 02.06.12 at 11:19 am

Happy Monday! I’ve always loved Mondays. I pretend to like Fridays the best like everybody else, but everyday is Christmas for me anyway, so Monday is when everybody is forced to actually do some structured work. And so the world turns, and I can set about discovering new things… Like this, for example… Yummy!

In a statement posted on its website, McDonald’s senior director of quality systems Todd Bacon wrote:

“At the beginning of 2011, we made a decision to discontinue the use of ammonia-treated beef in our hamburgers. This product has been out of our supply chain since August of last year. This decision was a result of our efforts to align our global standards for how we source beef around the world.”

The U.S. Agriculture Department classifies the chemical as “generally recognized as safe.” McDonald’s says they stopped using the chemical months ago and deny the move came after a public campaign against ammonium hydroxide by celebrity chef Jamie Oliver.

http://preview.tinyurl.com/7g2oy7j

#142 disciple on 02.06.12 at 11:27 am

Why do these old abandoned offices and industrial buildings continue to exist, overgrown with weeds and broken windows, not planned for demolition around cities and towns near you? Two words: Money laundering. Another two words: Banking. Okay that was one word. So, let’s add this: Drugs. Got the picture? No? Well, read this:

http://www.wnd.com/2012/02/banking-giant-accused-of-laundering-billions/

#143 Daisy Mae on 02.06.12 at 11:33 am

#94 45 NORTH: “Now is time for the opposition parties to act.”

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

I believe the opposition is simply biding their time…waiting to see how Flaherty is going to wiggle out of the mess he and his band of cohorts have caused, all by themselves. They don’t want to touch it with a 10′ pole. Their time will come…

#144 AG Sage on 02.06.12 at 11:41 am

#5 Protective Order of the Elk

I often can’t tell if you are you or someone pretending to be you and saying something absurd.

BTW, Toronto detached in November was $510,050 and in January was $489,350, which is a decline of 4%. Good thing those buyers got their 5% downpayment back from the bank already, otherwise they’d have lost it. Right?

#145 The Thing in the Basement on 02.06.12 at 11:41 am

112 New era

“We are so screwed”

With math like that we sure are!

#146 disciple on 02.06.12 at 11:44 am

If you don’t already know, here it is: Karl Marx was an agent of the British Crown. The purpose of communism is repression, or how I like to say it: Mind Control. Here’s an example of what I’m talking about. KGB Operative/Soviet defector, Yuri Alexander Bezmenov, describes long standing Soviet Manipulation of the United States public opinion.

http://www.realityzone.com/bezmenov.html

“Several thousand so of Vietnamese were executed in one night when the city was captured by Vietcong for only two days. And American CIA could never figure out, how could possibly Communists know each individual, where he lives, where to get him, and would be arrested in one night, basically in some four hours before dawn, put on a van, taken out of the city limits and shot. The answer is very simple, long before communists occupied the city there was extensive network of informers, local Vietnamese citizens who knew absolutely everything about people who are instrumental in public opinion including barbers and taxi drivers. Everybody who was sympathetic to the United States was executed. Same thing was done under the guidance of the Soviet Embassy in Hanoi, and same thing I was doing in New Delhi. To my horror I discovered that in the files where people were doomed to execution there were names of pro-soviet journalists with whom I was personally friendly……They were idealistically minded leftists who made several visits to USSR and yet the KGB decided that contra-revolution or drastic changes in the political structure of India, they would have to go…… they know too much. Simply because, you see, the useful idiots, the leftists who are idealistically believing in the beauty of Soviet socialist or Communist or whatever system, when they get disillusioned they become the worst enemies. That’s why my KGB instructors specifically made a point, never bother with leftists……The moment they serve their purpose all the useful idiots are executed…”

Now, just think, in a more non-explicitly repressive Western society, how difficult a job it would be to execute the same level of mind control without being detected? You would have to be pure genius to get away with it. Look up the Protocols of the Elders of Zion for more information… Do our real rulers ever sleep? Are they even human? No, to both questions I think… Let’s just say, they must be IN-ORGANIC.

#147 Kip on 02.06.12 at 11:46 am

# 124 Steven Rowlandson

“Skilled tradesmen don’t get paid jack and are asked to compete with minimum wage people and people just off the boat plus put up with light work weeks and convenient bankruptcies.”

I’m a skilled tradesman and I made 110K last year plus expenses. The industry is screaming for people in GTA.

#148 Thomas on 02.06.12 at 11:48 am

Check out this rent vs buy calculator on this website. If you put in $350,000 house, $17,500 down payment, $2,000 property tax, it says you should BUY if your rent is $750. Now, change the rent to $1 per month and it still says that you should BUY, haha. How can that be?

http://www.ecmb.ca/first-time-buyer/mortgage-calculator/

#149 Aussie on 02.06.12 at 11:50 am

We live on the “greastest place on earth too, Australia”, and who could have predicted it would be happening here too? 4 years ago, real estate was booming,I mean out of control, anyone with there home on the maket added a couple of hundred thousand on just because you could get away with it. Few regulations on lending, and banks throwing money into an already over capitalized real estate market. Aah, but those days have sadly gone, and reality is starting bite, now homes are coming down on a “soft” landing, what a load of B.S.
Real estate here has literally fallen to the ground like a lead balloon. Homes are NOT selling anymore, money has all but dried upin this country, if you don’t think it cant or won’t happen there, don’t kid yourself any longer. Take your money and run, save it for the next few years, you’ll be able to buy a home, any home and actually pay a decent not over inflated price. Trust me,I learnt the hard way……..whatever governments tell you, take it with a very small grain of salt…. Like our mining boom, I could die laughing at the moment because it’s so full of crap…..they speak and expect you to believe there lies, please, Give me a break…….read between the lines fellow Canadian comrades…….

#150 fancy_pants on 02.06.12 at 11:53 am

#117 Mr Buyer on 02.06.12 at 4:43 am

I saw that article too… I am getting so tired of the media pumping real estate. Maybe it’s time for MC & F to take the bottle away from society and show some tough love for the greater good.

#151 Van guy on 02.06.12 at 11:54 am

#105 poco on 02.06.12 at 1:17 am

When you have a home priced at $779k, which is way too much to begin with, it ain’t gonna sell. Ya it sold for $679k. That’s a more reasonable price. The seller didn’t lose 100k. They were trying to cash in big. Original price they paid? I’m not a my computer now but, I believe it was $379,000.

I spent some time looking at the Tri cities for a friend. I showed him some of these properties you posted. These are mostly crappy properties and in any city, you will find properties like these ones. So stop picking cherries, and your famous line “do your homework”.

#152 Form Man on 02.06.12 at 11:56 am

#140 DA

Actually 3 or 4 years is about half the length of a typical economic cycle. Problem is this time the cycle was interrupted by Conservative government intervention in 2008. We don’t really know how long this cycle will last, but evidence indicates we are just getting started with the housing correction.

#153 45north on 02.06.12 at 12:02 pm

Daisy Mae: the opposition is simply biding their time

now is when the real estate industry has the most to gain from deception.

it is really an elitist mind-set, Conservatives, Liberals and NDP say they want to build a better Canada but sit quietly while the average Canadian family is sold down the river.

The agenda is already on display south of the border. Six months from now, the political parties will pound their desks and demand programs to “keep people in their houses”. The political parties don’t want to actually help.

#154 Tim on 02.06.12 at 12:03 pm

Canada Govt’s Exposure to Mortgage Lending Raising Alarm- Wall St Journal
http://online.wsj.com/article/BT-CO-20120202-711958.html

#155 Junius on 02.06.12 at 12:12 pm

#143 Daisy Mae,

You said, “I believe the opposition is simply biding their time…waiting to see how Flaherty is going to wiggle out of the mess he and his band of cohorts have caused, all by themselves.”

I think this is partially correct. It is too hot an issue and no one wants to be blamed for changing the markets emotions. Even if it is a spurious claim.

I think another reason is that they have no solution or even a proper diagnosis of the problem. Canadians are so behind the curve on these global issues because of our smug attitude that it “is different here.”

A year from now we will be talking about Iceland, Ireland, Greece and the US and looking for examples of what worked and what did not. However we still have this “Halo Effect” attitude and while it lasts there is no room for debate on how to fix a problem many people don’t believe exists.

#156 jess on 02.06.12 at 12:13 pm

The real trigger , Remy Welling who gots fired but does get her job of 22 years back
That the IRS was made aware of backdating and did nothing remains scandalous.
http://www.nytimes.com/2004/08/10/business/tech-company-settled-tax-case-without-an-audit.html

August 10, 2004
Tech Company Settled Tax Case Without an Audit
By DAVID CAY JOHNSTON
Monday, June 20, 2011
Audit Decisions Were Political Decisions That Were Made at the Top
Here is one of David Cay Johnston’s “Close Encounters of the Tax Myth Kind”:

read about
Professors Lie and Heron’s computer program on stock options

Awarded to The Wall Street Journal for its creative and comprehensive probe into backdated stock options for business executives that triggered investigations, the ouster of top officials and widespread change in corporate America.

#157 Abitibi Doug on 02.06.12 at 12:14 pm

@BPOE, post#5 said:This isn’t America folks, we have real jobs that pay well. Everything is just fine.

Yes, like those 450 jobs that left London and are going to Muncie, Indiana when the Caterpillar diesel locomotive plant officially closed its doors on Friday. Those good, high paying jobs are never coming back. Oh, by the way, why is the government’s Unemployment Insurance (they call it Employment Insurance, which is a joke) so busy and swamped with applicants?

The reality is, the real estate boom in both Canada and the United States was driven partly by low interest rates, and partly by demographics, namely the Boomer’s kids getting into the housing market. It continued in Canada after collapsing in the U.S for 2 reasons. The first reason is the economic crisis, sparked by those toxic subprime mortgages, didn’t hit Canada as hard. Yes, during the crisis house prices dropped, but they were buoyed up again by emergency low interest rates and economic stimulus. The same goes for Australia, where the housing boom picked up again. The second reason is the baby boom generation lasted about 5 years longer in Canada, so consequently the baby boom echo lasted longer. It’s also worth noting this boomer echo generation is far less debt averse (yes, I know there are some wise exceptions) than previous generations so that also added to the boom. I can’t tell you when the bubble will end in those last holdouts like Toronto and Vancouver (my crystal ball is made of the same black ebony that bowling balls are made of) but history shows us that when the price of some asset gets out of out of line from long term average, eventually it will return to that long term average. Say, does anyone remember what happened in the early 1990’s?

#158 Dan on 02.06.12 at 12:20 pm

Is it me or do we have alot of realtors on this blog crying like babies? Been here for about a year and never seen so many realtors. The market is doing so poorly that realtors are on newspaper message boards and blog like this to spread their lies. With Canadian housing costing two times more then US houses you have a bubble. Even bankers know its a bubble but call it a balloon? This market is going to crash hard this year and nothing you realtors can say or do about it. Look to the US for your future.

#159 John saccy on 02.06.12 at 12:26 pm

Finally a liar ..mean lawyer speaks the truth.. or NOT

http://ca.finance.yahoo.com/news/why-it%E2%80%99s-a-good-time-to-buy-a-home.html

#160 John Prine on 02.06.12 at 12:31 pm

Okanagan sales are interesting, Central Okanagan has had 202 residential sales in January, 8 more than January 2011 but there are 3,909 active listings.

Osoyoos currently has 299 listings and in the last two weeks there have been 2 sales, one on market for 115 days, the other for 334 days. 18% and 15% below asking.

#161 SRE on 02.06.12 at 12:42 pm

Canadian Housing Market Collapse

http://seekingalpha.com/article/342031-canadian-housing-market-collapse-part-ii

#162 DUI on Money Road on 02.06.12 at 12:49 pm

#137 Victor on 02.06.12 at 10:50 am
————————————–
Thanks for posting. I’m in the process of consolidating my LOC at TD with another bank. Never again will I hold a product with TD.

#163 Thomas on 02.06.12 at 12:57 pm

Calling it a balloon vs a bubble is hilarious. If a balloon gets pumped up too much, it will burst just like a bubble. Why do they think we can let a little air out of it slowly and surely? That is not how it works. When prices drop, they drop 3 times faster than when they rose. Fear grips people and they act irrationally, thus triggering more selling. Like the stock market, this too cannot go up forever. A house is a place to live, not an investment!

#164 Canadian Watchdog on 02.06.12 at 1:23 pm

#140 Devil’s Advocate

“For it has been three and four years since the economic crisis of 2008 and we seem not to have fallen into that economic Armageddon so many feared we were headed.”

You seem to have forgotten that the only factor that kept home prices from collapsing (mass job losses) was a $1 trillion dollar stimulus package coordinated by G20 leaders, of which Canada (being a 70% trading partner with the US) benefited a least a few hundred billion dollars from the $800 billion U.S. stimulus package that has now faded away, which means, to keep GDP from plunging into negative growth would not only require another $800 billion injection, but in fact double that amount due to inflated prices!

I can already see your optimism is really your failure to understand the underlying economic conditions of the economy.

#165 FormerVanCityOwner on 02.06.12 at 1:32 pm

Garth says, “The Vancouver board has used a similar fudger for some time, calling it a ‘benchmark.’ Monthly releases there no longer even give the average selling price of SFHs, for fear of scaring the crap out of everyone.”

I’m not a realtor apologist, but today’s post is a little over the top. Vancouver monthly stats packages have the ‘benchmark’ and median by segment and property type and they also show the average prices by property type. Hardly a cover-up.

#166 Bailing in BC on 02.06.12 at 1:36 pm

125 Devil’s Advocate

Actually I do know what I’m talking about. I’m not talking about newbies here I’m talking about realtors who have been in the game 25 years who have never seen it so bad. I’m talking about realtors with built up client bases who are getting day jobs. I’m talking about realtors quietly selling their own homes because they see the shit storm coming.

But from what I understand it’s different in Kelowna, Sunshine and lollipops and all that.

#167 Ogopogo on 02.06.12 at 1:42 pm

#157 I’ve noticed the infestation of realtors especially on the Globe and Mail comments sections. They mostly behave like rabid dogs whenever a news piece exposing the bubble is published. Many are no doubt out of work and desperate to stem the tide of public awareness.

If the G & M, Toronto Star, etc. comments are anything to by, public opinion (at least among the literate public) is changing fast. Whereas before the crap spewed by realtors would go relatively unchallenged, now commenters are quick to pounce on the BS-swilling realtors posting comments, much like here. This blog is also frequently referenced.

#148 Thomas

This is a realtor’s wet dream of a calculator! LOL! I put for fun a monthly mortgage payment of $4,000.00 vs. $100.00 (yes, you read it correctly, one hundred dollars) and still “BUY” is the answer. Funny how the calc. doesn’t let you enter the cost of the home.

http://www.ecmb.ca/first-time-buyer/mortgage-calculator/

And realtors still wonder why they’re treated with contempt. If anything we’re too kind to these knuckle draggers.

#168 Preciousss on 02.06.12 at 1:50 pm

It is by design. It is part of the plan. The money masters want it to be the way it is.

Black swans, random events, and chance occurrences will further serve to upset the applecart or right the ship along the way.

Our paths have been planned by higher powers “doing God’s (Lloyd’s) work”. Wise ones will try to step off of that path.

Be certain to rid yourself of non-productive debt and do your best to eliminate consumer and house related debt.

Protect your investments. Do not allow yourself to be a victim of fraud and theft.

#169 AM on 02.06.12 at 2:05 pm

There has been a lot of discussion on this blog regarding how the lending industry is pushing mortgages based on what a buyer’s monthly budget allows. This has always been the case, I suppose, but it seems that less consideration is given to the massive principle amounts of today’s new mortgages.

Food for thought…below is a comparison of typical mortgages at rates from today and from about 12 years ago using a 5 year fixed scenario (excl. taxes & insurance):

2012
$400,000 @ 3.39% – payment $1,973.93

2000
$255,000 @ 8.0% – payment $1,946.19

So it appears that you can afford about $150,000 more o house today based on the same monthly payment.

Lets flip this around now assuming our rates go back up to around 8% (ya, I know…it’ll never happen)

$400,000 @ 8% – payment $3,052.85

Good thing rates will never go back up to 8%…right?

NOTE: Average peak 5 yr fixed since 1970 is over 10%.

#170 The American on 02.06.12 at 2:11 pm

At #136: T.O. Bubble Boy is correct. Those Catepillar jobs are back in Indiana, not India. The Catepillar job loss in Canada is only at the tip of the iceberg, relative to the mass exodus of jobs provided by American corporations to Canada over the next four years. Seriously, this was small job loss at Catepillar is nothing in the grand scheme of things to come.

Also, contrary to what I keep reading in this blog, Americans don’t work for 50% of Canadian pay. I get a real laugh when I read extreme stuff like that. After taxes, Americans actually earn slightly more net pay than Canadians. This is in consideration BEFORE cost of living adjustments, which are in the U.S.’s favor as cost of living in general is lower in he U.S.

The jobs aren’t leaving Canada back to the U.S. because of cheaper wages. Get this out of your head. The jobs are leaving because of legislation being passed in U.S. Congress to incentivize American corporations to keep jobs at home. The U.S. has the highest corporate tax rate in the world which has propelled foreign set up of domestic shop, much of which is changing. As terms continue to improve for American corporate tax basis and become more favorable by lowering these corporate taxes, creating a business case to keep jobs in the U.S., more and more jobs will come back home, particularly in the lines of manufacturing, service, and development.

Two things happen here. 1) U.S. unemployment numbers will continue to improve, while Canadian jobless rates weaken. 2) Consumer spending improves in the U.S., pulling us further out of a deep- rooted recession. Primarily, the focus being purchases of excess housing inventory in the U.S., which in turn improves values and further encourages spending.

The loonie has a lot of tough decisions to be made. Keep a strong loonie, continue to lose more and more jobs. Or, the loonie’s value lowers, still making it somewhat attractive to keep some strategic positions open in Canada. A lower loonie also means less foreign investment as rate of return compresses as the loonie devalues. Either way, it is not a good scenario to be in.

At the end of the day, what is the real value of the loonie? Putting exchange rates aside between the CAD and the USD, an American dollar stretches significantly farther in the U.S. than a Canadian dollar does in Canada. Almost everything costs less in the U.S., even with a 1:1 exchane rate. This means Americans observe increased buying power over that of Canadians in their respective countries. This alone paints a picture and provides strong evidence that the loonie is significantly overvalued.

#171 John Prine on 02.06.12 at 2:19 pm

People weren’t born into “sales”, a lot of real estate salespeople that have come into the industry in the last 10 years attracted by the easy money must have had a useful trade or profession that they can fall back on?

The 3 realtors that I have known for over 30 years have had a drop in listings and sales, but because of being prudent with their earnings over the years are able to weather this “adjustment period” They know that sales will continue, albeit differently, and are able to stay at their jobs.

#172 Thomas on 02.06.12 at 2:32 pm

@ Ogopogo – The real question is, how is it ethical to provide such one-sided advice? No matter what you put in that calculator, it says BUY. Mortgage brokers, agents, banks, they are not our friends. Their advice is only to increase their commission each month and not our financial well being. We have to push back and vote with our dollars. In the US, everyone wants to rent. We should follow suit.

#173 Timing is Everything on 02.06.12 at 2:37 pm

Opinion: ‘Each year, investors, many of them senior citizens, lose huge amounts of money in the exempt securities market’

[Richard] Innes was introduced to this investment [Dexior Financial Inc.] by self-described Ladysmith financial adviser Roberta Mayer, who….

http://tinyurl.com/8xthgrb

#174 Devil's Advocate on 02.06.12 at 2:38 pm

#152Form Man on 02.06.12 at 11:56 am
#140 DA

Actually 3 or 4 years is about half the length of a typical economic cycle. Problem is this time the cycle was interrupted by Conservative government intervention in 2008. We don’t really know how long this cycle will last, but evidence indicates we are just getting started with the housing correction.

Form Man read the book “SHIFT; How Top Real Estate Agents Tackle Tough Times” by Gary Keller. Seriously, you will enjoy it and it will help you immensely in your business not to mention you and I might subsequently then be able to have a meaningful dialogue. Really you will thank me for putting you on to it. Actually any one of the pups and poodles would do well to read that book as it will give you a deeper understanding of the real estate market.

#158Dan on 02.06.12 at 12:20 pm,
#164Canadian Watchdog on 02.06.12 at 1:23 pm
and
#166Bailing in BC on 02.06.12 at 1:36 pm

You know, life is what you make of it. How are you each doing with that? Read the book I mentioned above. It’ll do you a world of good.

#175 scib on 02.06.12 at 3:06 pm

F needs to bring down real estate a bit so he will have puff room just before the next election. Look for relaxed lending standards 6 months before the next election.
Once it starts the downward trend, though, he likely won’t be able to stop it.
The CREA has full time people whose only purpose is to lie with statistics. Too bad for the poor peons who can’t see it. It’s a dog eat dog world.

#176 S. Fraser on 02.06.12 at 3:22 pm

Great posting Garth! People should tell all their friends who are remotely thinking of buying that they should copy and paste each listing in the area that they are looking into a word document. Yes this may take a half hour or so the first day. I copied the picture as well. Then check each day for changes between your list and the new ones listed. Last year I noticed that houses over $400,000 were selling VERY slowly, and August seemed to be the time of year people were panicking. I saw some listings drop $40,000 in asking price at that time. You can see how long something is listed with the board. Of course you don’t know the selling price, but you have a real feel for the market. This spring, asking prices have gone up, as the average seller has no clue that prices have actually gone down in the last 6 months here. see the plunge-o-meter . http://www.chpc.biz/plunge-o-meter.html

#177 Form Man on 02.06.12 at 3:25 pm

#174 DA

Does Mr. Keller’s book respond to my statement ? because you, curiously, didn’t………

#178 poco on 02.06.12 at 3:26 pm

#151Van guy on 02.06.12 at 11:54 am
#105 poco on 02.06.12 at 1:17 am
When you have a home priced at $779k, which is way too much to begin with, it ain’t gonna sell. Ya it sold for $679k. That’s a more reasonable price. The seller didn’t lose 100k. They were trying to cash in big. Original price they paid? I’m not a my computer now but, I believe it was $379,000.
I spent some time looking at the Tri cities for a friend. I showed him some of these properties you posted. These are mostly crappy properties and in any city, you will find properties like these ones. So stop picking cherries, and your famous line “do your homework”_
____________________________________________i didn’t expect anymore from you than what you put in your post—“fail to comprehend once again Van guy”–and you an obvious realtor attempting to purchase property in delusional Vancouver’

man, after losing on a sale a couple of years ago on a property in Van (as you have stated) one would think you’ld stay far away from real estate
love this dumb statement—“When you have a home priced at $779k, which is way too much to begin with, it ain’t gonna sell”
what ? are you nuts !!!
here is another listing from Homesteader in Citadel Heights
http://www.realtor.ca/propertyDetails.aspx?propertyId=11523618&PidKey=-1868962644

here are the other two “crappy” properties you mentioned you had looked at from a previous post of mine—the first one is now close to being a losing purchase and it was bought in 07

http://www.realtor.ca/propertyDetails.aspx?propertyId=11417405&PidKey=-1559430844

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=11317860&PidKey=2095955202

please compare these with the wonderful 2m properties you can pick up in Vancouver

i’ll give you a clue to your lack of comprehension–think 2008—think comparables—you haven’t a clue about what’s going on in the housing market now do you???—especially the tri cities
you don’t know where we’ve been or where we’re going–so do a little more –no a whole lot more– homework numb nuts on something you obvious have little knowledge on

#179 Van guy on 02.06.12 at 3:32 pm

Official stats package is now out. I was pretty much bang on with my numbers I posted last night.

http://www2.topproducerwebsite.com/users/34449/downloads/Jan1012Statst_rebgv_stats_package,_january_2012_pdf.pdf

#180 Ogopogo on 02.06.12 at 3:41 pm

#172 Thomas
We have to push back and vote with our dollars. In the US, everyone wants to rent. We should follow suit.

Exactly. It literally pays to be a contrarian. Now that I’ve paid off all my outstanding debts I can’t believe how much more I’m able to save because I rent. It would take a massive crash in the Okanagan for me to even begin to contemplate buying.

As Snowboid said here recently, “patient we are”.

#181 Benny Hill on 02.06.12 at 3:43 pm

STILL to many bears here for a top

#182 ChuckD on 02.06.12 at 3:57 pm

My friend is a happy man today. He listed his house on Friday (modest house in a well located neighbourhood in Toronto) and had the agents open house that same day. He had scheduled offers for the following week. He had listed for 699 with the hope that he may get offers over asking. Anyway listed and sold the same day with two “bully” offers. One came in at 750 and the other at 772. The higher offer came with no conditions. The buyers were two PhDs. One who teaches at UofT. My friend is laughing all the way to the bank. Plans on renting for the next few years at least. He was mortgage free on the house which he bought about 12 years ago for about 280. The market seems to be starved for good properties so when something comes along it goes fast. I’m not sure why people aren’t selling when it seems like such a great time to cash out.

Most people sell low and buy high. Especially PhDs. — Garth

#183 Debtfree on 02.06.12 at 3:59 pm

this is what an F attack on seniors looks like in B.C.
http://www.opinion250.com/blog/view/23120/1/changes+to+old+age+security+could+cost+bc+seniors+nearly+%241b?

#184 Van guy the REALTOR® on 02.06.12 at 4:14 pm

Poco,

A few of yor comparables cannot be confirmed. A property u said was in trouble, sold for $70k over asking. If you think I’m a realtor, I must be a bigtime shitty realtor. Ive never made a bullish comment here. Garth knows how to spot realtors and he has never pointed that out towards me. My point is to you, your post are incorrect. Yes RE in the Tri cities are hooped. But use some true facts so to don’t get exposed. Again, if I’m a Realtard, I’d be pumping it baby! 1577 sales accross the rebgv for Jan 2012. That’s a disaster! DA,BPOE, Morry, and the rest of the west coast pumpers! Eat those stats!!

#185 Canadian Watchdog on 02.06.12 at 4:34 pm

#174 Devil’s Advocate

Again you’re avoiding my question and showing signs of incompetence. In fact, I think you don’t even know how the RE market is funded through the bond market. If you’re a big man you should be talking big numbers.

#186 in_calgary on 02.06.12 at 4:43 pm

Calgary RE prices up 2.7% from last year! Next year? I am putting my money on “stable, with slight — location location location — increases”.

#187 jess on 02.06.12 at 4:53 pm

why the hit and run guy adopted his girl friend as his daughter

That first crop of documents was scrutinised by the Guardian newspaper in 2009, which found “details of numerous trusts in which wealthy people have placed capital. This allows them lawfully to avoid paying tax on profits, because legally it belongs to the trust … The trust itself pays no tax, as a Cayman resident”, although “the trustees can distribute money to the trust’s beneficiaries”.

Sunday, February 05, 2012
Tax haven defender says senior citizens at the root of the crisis

http://taxjustice.blogspot.com/2012/02/veronique-de-rugy-calls-for-wealth.html

“Reason.tv”

http://my.firedoglake.com/rfshunt/2012/02/02/koch-bros-mouthpiece-tells-occupy-forget-the-1-go-after-granny/

http://my.firedoglake.com/rfshunt/2012/02/02/koch-bros-mouthpiece-tells-occupy-forget-the-1-go-after-granny/

#188 Lee on 02.06.12 at 4:55 pm

Ahh, I figured out that mortgage calculator. http://www.ecmb.ca/first-time-buyer/mortgage-calculator/

It’s comparing the amount of equity ‘built up’ *cough* by paying your mortgage versus the *gain* on the money you saved and invested.

So if you could buy 200 apples or 100 oranges you should buy the oranges because then you’d have more oranges. If it changes and you can get 400 apples you still shouldn’t buy apples because you won’t have any oranges.

#189 Timing is Everything on 02.06.12 at 4:57 pm

#170 The American

That’s why we’ve been vacationing in the US rather than Mexico for the last few trips.

The US is gonna have a tough slog going head to head with Asia (or S. America for that matter) wrt manufacturing.

http://tinyurl.com/7v79958

#190 Lee on 02.06.12 at 4:57 pm

Ahh, I figured out that rent/buy analyzer. http://www.ecmb.ca/first-time-buyer/mortgage-calculator/

It’s comparing the amount of equity ‘built up’ *cough* by paying your mortgage versus the *gain* on the money you saved and invested.

So if you could buy 200 apples or 100 oranges you should buy the oranges because then you’d have more oranges. If it changes and you can get 400 apples you still shouldn’t buy apples because you won’t have any oranges.

#191 safetypup on 02.06.12 at 5:05 pm

I was talking with a real estate agent at an open house in Rosedale about a week ago. She said anything under $1,000,000 in the prime areas of the 416 will sell crazy fast within a week, often with multiple offers. She mentioned one place that sold at Yonge & Lawrence with eighteen offers and another with thirty. She also mentioned that things are selling much more slowly in the $1,500,000+ range, as these buyers are more nervous about the debt crisis in Europe and financial conditions in general.

An interesting read about how crazy things have gotten in downtown Toronto was the Globe and Mail from this past Friday. It had one profile of a young, single, graphic artist who paid $150,000 over asking for a small house in Riverdale (with the help of her parents). Another article profiled a small building that had been renovated on Dundas St., around Lansdowne where the owner was asking for $1,500,000. This building was on a crappy part of Dundas too. It’s almost like $1million doesn’t have any meaning any more to the buyers.

#192 Houses are better than diamonds on 02.06.12 at 5:06 pm

http://www.blogher.com/forever-dies-hard?page=full

#193 Abitibi Doug on 02.06.12 at 5:12 pm

Most people sell low and buy high. Especially PhDs. — Garth

That’s amazing, isn’t it? If a dumb electrical tech like me can understand cyclical assets or probability and statistics (namely that if something is unusually high, it probably won’t stay that way), why can’t PhD’s? maybe PhD stands for post hole digger!

#194 HPI on 02.06.12 at 5:19 pm

All data requires interpretation to give it meaning.

There’s lies, damned lies, and statistics.

#195 Waterloo Resident on 02.06.12 at 5:22 pm

Its called ‘KICKING THE CAN DOWN THE ROAD’.

If there was an explosive tied to your belly and the only way you could keep it from exploding was to keep kicking a can down the road, then you would keep kicking it for as long as you could.

That is EXACTLY the problem the government has here right now, they need to keep the housing boom going because its the only thing keeping the economy afloat.

If the American economy finally gains traction and our exports to them DOUBLE from what they are now, then MAYBE the government might start placing some restrictions on housing / mortgages, etc, but until then mortgage rates will only go lower, financing made easier, Debt limits for CMHC increased, things like that to keep kicking the can down the road for as long as possible.

#196 Devore on 02.06.12 at 5:23 pm

#42 Van guy

U posted price at $609,900.
It sold last month for $681,000

I bet you wet your pants over the Toronto teardown that sold for $150,000 over asking. What about that one house that was listed for $1? Did you break out the bubbly when it sold for 600,000% over asking?

Underpricing a property to generate interest and hopefully a bidding war is a common tactic in slow and hot markets alike. It is difficult to pull off successfully. Most listings that “hold offers” come off market with their tail between their legs, and back on a month later at a higher price.

#197 HPI and Grad School on 02.06.12 at 5:29 pm

#193 Abitibi Doug

Those with graduate school training have been in educational institutions for quite some time–some, their whole lives.

As such, they are the most in keeping with the system, for they have been “indoctrinated” the longest; they obtain “advanced” degrees by understanding and internalizing academic rules–effectively learning how to be professional, or “obfuscate”.

Consequently, you can’t really expect much thinking outside the box from such people. Perhaps at one time this was different.

Sad, but such is not generally the case today. Most with advanced institutional training are not real thinkers (like Garth) but rather conformists–often snooty and self-aggrandized ;)

#198 Herb on 02.06.12 at 5:32 pm

Lest we forget …

The first Harper Government was sworn in six years ago to-day. Let is not forget to give thanks for the six years of economic helmsmanship that have brought our stately “Costa Concordia” to a position that will allow us to salute Giglio in style.

#199 Make Your Bed on 02.06.12 at 5:47 pm

170… The American is absolutely right. The point is about our own ability to afford goods in our own countries. From this perspective the American dollar does circles around the Canadian Dollar.

189… Timing is Everything I dont follow your point other than we can afford to vacation in the states and buy more there than in our own country. This doesn’t look good for the Canadian dollar. I the US has a tough road ahead, then ours is even bumpier.

#200 Canadian Watchdog on 02.06.12 at 5:50 pm

Garth did you tune in the the 12pm TREB meeting? If so any info would be appreciated.

#201 Patiently Waiting on 02.06.12 at 6:10 pm

#137Victor on 02.06.12 at 10:50 am

Line of credit interest rates rising for some
. . . . TD Canada Trust is raising rates on personal lines of credit not secured by collateral. . . . Of the TD clients with unsecured LOCs who are getting notices, 60 per cent will see their rate go up and 40 per cent will see their rate go down, she said. . . . The increases — which range from 0.5 to 3.75 per cent above current rates — and the decreases — which range from 0.5 to 3 per cent below current rates — go into effect April 2.

http://www.moneyville.ca/article/1125691–why-your-line-of-credit-may-cost-you-more
====================================

If most lines of credit in Canada are Home Equity Lines of Credit (HELOC’s), I would assume that most Canadiens will see the cost of the HELOC going down.

Comments anyone . . .

#202 Vigilante on 02.06.12 at 6:18 pm

PhD’s research at work, and don’t research outside work.

A ‘Friends’ analogy… A maternity doctor asks Rachel..

“aren’t there times when you come home at the end of the day, and you’re just like, ‘if I see one more cup of coffee'”

Its like that :)

#203 Devore on 02.06.12 at 6:53 pm

#139 Victor

Well, good thing the seller signed the BRA so he could be protected! /sarcasm

It seems some realtors, commissioned sales people, want it both ways. 5% commissions, and a guaranteed payout, as long as they do some work. Unfortunately, as commissioned salespeople around the world know, you never know when your next paycheck will come from. Sometimes, you spend a lot of time on a deal, and it never materializes because the parties just walk away. That’s life.

#204 Van guy the REALTOR® on 02.06.12 at 6:55 pm

#196 Devore on 02.06.12 at 5:23 pm

You’re obviously not reading my entire post. Poco said that property was under heat. This property listed for a retarded $779k. Way too much. Reduced to $609k. Sold for $679k. Owner paid $379k. Where is the trouble? That was my point. Poco has sources that lied to him and then he made a post that embarrassed himself. And then you follow his path making you look just as bad.

Btw I’m not a realtor. Only accused of being one.

#205 Form Man on 02.06.12 at 6:59 pm

#198 Herb

indeed

#206 Bailing in BC on 02.06.12 at 7:05 pm

174 Devil’s Advocate

On the life front I’m doing swimmingly. Thanks for asking.

Why would I read a book for realtors about getting through tough times? Are you saying it is tough times for realtors? I though prices going up or down made no difference to realtors.

Sunshine and lollipops to you sir.

#207 P & T S on 02.06.12 at 7:11 pm

It’s not just a Canadian problem – there is a systemic feeling of uncertainty in all the “First World” economies. Greece may seem distant, and is in fact a tiny economy (in Global terms), but their forthcoming default (as predicted, ages ago by such reputable sources as the Economist and the FT) will have a domino effect in Europe and beyond.

Evidence of this? Look at the heavy discounting on “top end” Big Boy’s Toys principally in the secondhand market – Boats, Aircraft, Holiday Homes etc. There is a LOT of Distressed selling going on, especially in the land of the well heeled, which suggests those “in the know” are in a process of liquidating assets in what is possibly a falling market for high-end “Consumer Durables” – not quite the Onassis style Mega Yachts, but the mid-to-upper pricetag vessels usually associated with Corporate Jollification on the water

Wonder just where all this capital is heading for??

#208 Timing is Everything on 02.06.12 at 7:12 pm

#199 Make Your Bed – Ours is even bumpier.

Vacation -> All I’m saying is, if you have the means…the US is a great ‘deal’ right now. Flights are cheap, beer is cheap, food is cheap, RE is cheap…and the loonie at par to boot. Take advantage while you can (if you can).
———————————————————-
WRT manufacturing -> what’s good for the US is good for Canada, mostly. The Canadian manufacturing sector (S.W. Ontario mostly) is/has goingbeen to take(ing) a bit of a beating. The more the US recovers (and it will), the better for Canada. But I see bad times ahead for S. Ontario, especially manufacturing. Western Canada, not so much. It’s all about where the jobs are. Mostly out West. Ontario unemployment rate is 8.1% while Alberta’s is 4.9%… Windsor’s is over 11%…Yikes!

http://tinyurl.com/5wwwe4

#209 DUI on Money Road on 02.06.12 at 7:16 pm

Question for the dogs:

Does it make sense to take out insurance on an unsecured line of credit? (especially if the size of the LOC is only a fraction of what a payout on death from a life insurance policy would be?)

#210 VICTORIA TEA PARTY on 02.06.12 at 7:20 pm

FIGURES LIE AND LIARS FIGURE: MLS HOME PRICE INDEX

This new CREA “initiative” to “index” home prices in Canada has another name: PREVARICATING DESPERATION.

These scheming, lying sons of bitches!

The only hope for those planning on “buying” real estate, and not being totally screwed because they’ve lost their “navigational beacons” of median and average prices, is to hope that Mr. F. sticks a fork in this latest variation on a Ponzi Scheme.

I note that RBC has abruptly ended EARLY its 2.99 per cent mortgage plan by raising the rates by 40 basis points.

Has some Ottawa mandarin been breathing down Mr. Nixon’s neck in the last few days?

Is the next shoe to drop to be found in the upcoming federal budget in which Mr. F. puts the kibosh on additional funding, beyond the current $600-million insurance limit, for crown corporation CMHC?

On the one hand it’s nice to see a “healthy” real estate industry because of its vast economic spinoffs and resultant jobs.

BUT, there is a limit to how much debt individual Canadian should allow themselves, or to be allowed by government-fiat, to take on during a lifetime.

This dichotimy must be keeping Mr. F. up and worried late into the night.

Mr. F. do the right thing and “tear down this wall of CREA BS.”

#211 P & T S on 02.06.12 at 7:26 pm

If “The West” is trending towards a mindset where NOT “Keeping up with the Joneses” is the “new Normal, this is going to impact hard on the Far Eastern and Developing Economies, and in turn on those Countries whose main revenue stems from resource export, such a Brazil, Australia and Canada.

Maybe this is why the Politicos are keen to support the facade of “Doing Great”, despite the ballooning (or should that be Bubbling) mountain of evidence to the contrary.

Once the slide starts it’s going to be quite a ride to the bottom.

#212 Renee on 02.06.12 at 7:51 pm

Is it better to buy or rent? Let this handy calculator decide:

http://www.nytimes.com/interactive/business/buy-rent-calculator.html

In Vancouver, the answer is a resounding “Never.”

#213 Devil's Advocate on 02.06.12 at 7:55 pm

#177Form Man on 02.06.12 at 3:25 pm
#174 DA

Does Mr. Keller’s book respond to my statement ? because you, curiously, didn’t………

If you read Mr. Keller’s book you will see that I did in fact respond to your statement as was so implied by my post.

#185Canadian Watchdog on 02.06.12 at 4:34 pm
#174 Devil’s Advocate

Again you’re avoiding my question and showing signs of incompetence. In fact, I think you don’t even know how the RE market is funded through the bond market. If you’re a big man you should be talking big numbers.

WTF!?

Are you referring to the bond market as the means by which our governments create (print) money that might lead to inflation and rising housing prices and that it is the bond market which ultimately most influences interest rates as monetary policy is no match for the forces exerted upon interest rates by the bond market? The stock market pales in comparison to the bond market in size. Do you know how much money the Rothchilds made in the bond market between the time they reported to the British people that Napoleon won that war and the truth landed upon their shores? Check it out. Economics truly is the backstory of all history and the bond markets funded the bulk of it. So Ya, ya, ya, I get it and yet it all, I mean ALL comes down to simple supply and demand no matter what micro-economic variable you may be talking about and yes they are all linked together more today than ever.

So YOU have it all figured out then do you? Please do tell us, why don’t you, exactly what the future has in store?

#214 Bill Gable on 02.06.12 at 7:59 pm

In the USA – Fuel consumption dropped 4 million US Gallons, in the last 30 days. The Baltic Dry Index has laid an egg. CHMC is in trouble, but people here in Greed City, Dumbcouver, are mixing the Kool Aid with their Red Bull.
Mr. Turner must just shake his head. I am bewildered as to why so many people are cruising down the longest River in Egypt, ” De – Nile”.

#215 poco on 02.06.12 at 8:01 pm

#184 Van guy the REALTOR® on 02.06.12 at 4:14 pm
Poco,
A few of yor comparables cannot be confirmed. A property u said was in trouble, sold for $70k over asking. If you think I’m a realtor, I must be a bigtime shitty realtor. Ive never made a bullish comment here. Garth knows how to spot realtors and he has never pointed that out towards me. My point is to you, your post are incorrect. Yes RE in the Tri cities are hooped. But use some true facts so to don’t get exposed. Again, if I’m a Realtard, I’d be pumping it baby! 1577 sales accross the rebgv for Jan 2012. That’s a disaster! DA,BPOE, Morry, and the rest of the west coast pumpers! Eat those stats!!
____________________________________________
finally using a proper handle………..

this is getting very “stupid”–please read #196 Devore–you may gain a little insight into his post–it contains a part of what i was trying to convey to you –i wasn’t going to give it all to you, now, was i—you’re the “whiz” you know everything. do your own research

what comparables are you referring to?– that cannot be confirmed –if you followed the Citadel area back in 2008 you would have sales for that area–sorry i do!!
Feb to Apr 08 was the peak for this market along with many others in the lower mainland—were you following??—if our home owner had listed in Feb 08 ( hot hot market) –he may have sold for near asking (779k) and reaped a hefty payday —but he listed in June 08–market had already turned and there he sat –on and off the market til selling last month (as you say)–you figure out the rest of the market in Citadel from there –the ups and down

so you say a property that sits on the market –off and on for 3 1/2yrs and sells for 98k less than original asking is not in trouble–give us a break–if a 12.6% decrease on a SFH is not a telling sign i think i’ve found someone to take the number one position on my list of greatest fool—you
remember 10% to 15% decrease is about the proper decline in many BC markets(so far)
sorry but all my posts regarding the tri cities properties are all correct and easily varifiable and could you please explain “But use some true facts so to don’t get exposed”
it sounds like you are at a loss for responses…yes???

#216 Devil's Advocate on 02.06.12 at 8:10 pm

#185Canadian Watchdog on 02.06.12 at 4:34 pm

Not only that the Rothchilds, largely through the bond markets, funded both the English and the French Napoleonic war efforts. Imagine that those crafty devils!

#217 Sebee on 02.06.12 at 8:14 pm

They will still report the old numbers apparently. So how is more detail a bad thing?

#218 Trailer Park Boys on 02.06.12 at 8:18 pm

I thought this was a porn site…..

I guess we lost our bet with Smoking Man….we have to pony up his bail money….again !

#219 Devil's Advocate on 02.06.12 at 8:23 pm

But truth be known I paid little attention to the lessons on the bond markets during my university education as I then thought the subject rather boring and was way too anxious to get down to The Pit for a beer, or two or three or four.

The bond market is a little more difficult to comprehend as it moves in inverse to what intuition suggests it ought. No doubt why you threw it at me in your cross examination.

But really Canadian Watchdog one need not understand those intricacies quite so well to be able to understand the housing market. Hell a lot of realtors apparently do it with nothing more than a 2 week correspondence course!

Read the book… SHIFT: How Top Real Estate Agents Tackle Tough Times. Simple read (no bond market BS).

#220 smartalox on 02.06.12 at 8:44 pm

Hedonics: in psychology, the ethical study of pleasure.

Wow, I’ve got to hand it to the REALTORS(TM), they’ve found a way to (sort of) measure units of house-lust. How much of a price bump for Stainless Steel appliances? Oh look, honey, the HPI says that we’ll get $25k over asking if we install granite!

Ugh. How much for a crock of $#!t?

#221 jim on 02.06.12 at 8:45 pm

realtors on this blog posting fake bidding wars and sales . Been Driving in the north york area and prices range 600k to a million plus and I have seen zero sales. In fact five homes sat on the market so long they got taken off the market. I bet realtors are counting those being pulled off the market as sales. We all now know realtors in the US lied about sales. You know the market is bad when realtors reporting to the media about every sale they make. LoL….more and more people are talking about Toronto is in a bubble and going to crash.

#222 Nostradamus Le Mad Vlad on 02.06.12 at 8:52 pm


An astoundingly eclectic corroboration of posts. To add to them . . .
*
Losing My Religion

Sister Mary was having a class on vocations. She asked the students what they wanted to be when they grow up.

Sister Mary: “Tommy, what would you like to be?”

Tommy: “I’d like to be a fireman!”

Sister Mary: “Fine, Tommy. Susie, how about you?”

Susie: “I want to be a nurse!”

Sister Mary: “Susie, that’s wonderful. Joey, how about you?”

Joey: “I want to be a priest.”

Sister Mary: “God bless you, Joey. Margaret, what about you?”

Margaret: “I want to be a prostitute!”

Sister Mary: “What did you say?”

Margaret: “I want to be a prostitute!”

Sister Mary: “I’m not sure I heard you correctly. Say that again, please.”

Margaret: “I WANT TO BE A PROSTITUTE!”

Sister Mary: “What a relief! For a minute, I thought you wanted to be a PROTESTANT!”
*
Money Honey “Total increase in debt to the US population? $100 trillion. Take your lousy $77 billion and go jump in the lake, Ben.” wrh.com; US Taxpayers continually shafted, as well as us; Greece Layoffs continuing, and Cartoon — “So the people of Greece will basically send all their money directly to the private central bank and learn to get along without police, firefighters, teachers, etc. No sacrifice is too great to keep the bankers happy!” wrh.com; 2008 was just a warm-up show; The Euro Is Dead Long live The Bristol Pound.
*
Kissinger He recently assured the Chinese govt. that Jeb Bush will be the next prez. The US govt. is flawed Accurate, and also applies to other western govts.; dubya “Bush also knew bin Laden died on December 13, 2001. How did he know? He read it on Fox News.”; ACTA Good for the Czech govt.; Executive Order Is this a declaration of war? Siberian Express and CC Scientists.

#223 jess on 02.06.12 at 8:54 pm

Why All the Robo-signing?
Why State Attorneys General Shouldn’t Settle on Robo-Signing
Monday 6 February 2012
http://www.truth-out.org/ellen-brown-why-state-attorneys-general-shouldnt-settle-robosigning/1328539774
http://www.webofdebt.com/articles/robo.php
http://webofdebt.wordpress.com/2012/02/04/why-the-ags-must-not-settle-robo-signing-is-just-the-tip-of-the-iceberg/
===============
…Yale economist Gary Gorton explains that repos are the “deposit insurance” for the shadow banking system, which is now larger than the conventional banking system and is necessary for the conventional system to operate. The problem is that repos require “sales,” which means the mortgage notes have to remain free to be bought and sold. The mortgages are left unendorsed so they can be used in this repo market…read more

#224 Form Man on 02.06.12 at 8:54 pm

#213 DA

that is very interesting. Given the title, I had no idea Mr. Keller’s book dealt with the Harper government’s intervention in the Canadian mortgage market in the autumn of 2008.

#225 Junius on 02.06.12 at 8:56 pm

#201 Patiently Waiting,

You said, “I would assume that most Canadiens will see the cost of the HELOC going down.”

Why? We are in a credit contraction phase that is just beginning to take shape. They will go up for most people.

#226 S. Fraser on 02.06.12 at 8:56 pm

Just discovered another house price index Canada by Statistics Canada (now that everything is free, much more shows up on Google, I think)
http://www40.statcan.ca/l01/cst01/manuf12-eng.htm

#227 Devore on 02.06.12 at 9:05 pm

#204 Van guy the REALTOR®

I just take issue with your glee over the asking-vs-sold price. It’s meaningless without comparables.

#228 Devore on 02.06.12 at 9:18 pm

How ridiculous of DA to say the CREA is a “just the facts ma’am” organization, and they don’t care if prices are falling or going up. They are a marketing organization for realtors(tm), which is all about perception and sentiment. Lower prices means fewer sales (as people, virtually none of whom need to buy, wait for even lower prices), and fewer sales at lower prices means fewer realtors making less money. This makes CREA very unhappy. Total value of sales (all sales added up) directly impacts CREA’s bottom line.

HPI is a farce. The market needs MORE information, not less. This is all about making up numbers to suit agenda. The only scientific thing about it is that at some point, someone plots this thing on a graph.

#229 truth hammer on 02.06.12 at 9:28 pm

I’m a good judge of character, meeting the mayor of Vandumpo was not a high point in my life.

http://www.vancouversun.com/business/Vancouver+appoints+housing+affordability+task+force/6109527/story.html

Instead of giving a couple of dozen flunkies a per diem to figure out why affordability rates have gone into the stratosphere…….why not read Garths blog?

Sadly…yes……the people of Vancouver are that gullible.

#230 The Thing in the Basement on 02.06.12 at 9:38 pm

From Garths link:

“However, traditional average and median calculations
will continue to be published in the Market Watch.”

This blog reminds me of the townspeople in the Frankenstein movies……

#231 neo on 02.06.12 at 9:46 pm

http://stockcharts.com/h-sc/ui?s=$NYSE&p=D&yr=6&mn=0&dy=0&id=p44669793908&a=255733938

Tempus Fugit…

#232 TurnerNation on 02.06.12 at 9:47 pm

#131Devil’s Advocate on 02.06.12 at 9:48 am

Took the weekend off? The weekends, when working people look for a house? The weekend where lookie-lous drive around, call for questions?

The weekend off? My it must be dead out there!!!!!!

#233 Canadian Watchdog on 02.06.12 at 10:01 pm

#220 smartalox

Actually Hedonics works the other way around, as an example, if a new condo built had upgrades to a similar condo last year, with a similar price, they will minus the difference off the new condo price because they consider the upgrades as a feature. This is same system used in the CPI index with other basket formulas such as substitution, geometric weighting, ect. Misguided indices is precisely what distorts market knowledge that investors need to value assets.

I really hope they continue to report monthly stats with raw data, otherwise it’ll be a Realtocrisy telling everyone what their home is worth, with Harper in the center of it all.

#234 Bill Gable on 02.06.12 at 10:25 pm

Hedonics is what started this whole mess in the first place. O.k. – it was one major factor, along with a lot of other fiddling, that has put us in this gravy bowl.
I had lunch with my now ex, 25 year RE Agent, today. Stop. This is old school. Sold millions in residential and still had clients for three or foursales. Class. Honest. He couldn’t do it anymore.
“it’s going to be worse than I’d ever dreamed”. He left because he knows what the next phase brings.
In 25 years, all he did was smile and make people feel good and get them fair prices. He did biggish deals forour family.
Today, he toyed with his coffee, and stared out onto Davie.
” This isn’t a City – it is a Casino.”

#235 DUI on Money Road on 02.06.12 at 10:36 pm

http://en.wikipedia.org/wiki/Hedonic_regression#Advantages

“The model is relatively complex to interpret and requires a high level of statistical knowledge and expertise.”

#236 Dr. Fred on 02.07.12 at 12:05 am

#106 raj

Raj has it right. Great post!

#237 a prairie dawg on 02.07.12 at 12:07 am

#217 Sebee

They will still report the old numbers apparently. So how is more detail a bad thing?

– — –

It’s like if the oil companies came out with their own affordability index… It’s self serving. (pun intended)

CREA must be desperate to come up with ideas like this.

#238 Peterfromcalgary on 02.07.12 at 4:09 am

I’ve been a fan of your blog and book for a while. Today I googled “is the future going to be worse then the past”. Garth your site is number 2 on that google search.