The real thing

Days ago I called a Toronto realtor unethical for not only condoning bidding wars, but giving detailed instructions on how to ignite one. You know the drill. Advertise a price lower than similar homes have sold for. Accept bids only at a specific time. Create a testo-drenched auction environment. Send them all back if they’re not high enough. And (if you’re the agent) hopefully create a frenzy which is sweaty enough to establish a new floor for the hood higher than the last ceiling.

I called this misleading and fraud. By the way that word, fraud, means a wrongful deception intended to result in financial or personal gain. I’d say listing a house at, say $619,000 with absolutely no intention of accepting an offer at that price qualifies. Bait and switch. And in a tight market like Toronto’s, this is an excellent way of jacking prices so high the trip back down will be far more brutal.

  An example: 1728 Bayview, in North Toronto, being a two-story brick house on a 30-foot lot sitting on a major, car-clogged thoroughfare, which sold for $435,000 four years ago. After being listed recently for $619,000 (about fifty grand less than expected), it attracted 120 showings, 13 offers and a winning bid of $730,000. All in the seven days it was on the market. In fact, it even achieved video status, which you can suckle here.

Does this mean the Toronto real estate market is hotter and more genuine than Jenna Talackova?

Nah, forget that. She smokes. (See? There is a deep financial reason for today’s pic.) As for housing in the GTA, it’s interesting we’re seeing declines in key area sales at the same time there are high-profile eruptions of buyer horniness – as with Bayview, or the infamous $1.1 million Willowdale Chinese-gal-buyer-bung, or the Vaughan Valley desperate housewives, dropping seven figures in five minutes. Does any of this make you think we’re in an unstable market?

The agent I dissed about bidding war advice (he did his best to shred me here) doesn’t, although he agrees “that there are a lot of very shady practices in the real estate industry when dealing with multiple offers.” In a Wild West industry, he suggests, well-worn tactics may be suspect, but they ain’t fraud.

Fair enough. We disagree. But let’s not lose sight of the broader issue. Is residential real estate a troubled asset? Or are those people shooting each other up to get it, being astute investors? Has Toronto caught the Vancouver disease, the media-imbued certainty that it’s different here? Or is housing really a no-lose deal, no matter how much a bidding war costs you?

That’s what they used to think in greater Calgary, where homes cost a lot more than in the GTA four years ago. So pity this poor guy who days ago plaintively asked for advice on (of all things) a hockey web site: “We are in a condo townhouse we no longer wish to live in, but the problem is that places around us are foreclosing like crazy driving prices down to the point where drastic action may need to be taken. As of right now we owe roughly $285,000 and the places around us are listing at $129,900 – $150,000. What options do we have?”

Yeah, that’s right. Foreclosures. In Canada. Driving down prices. By 50%.

And here’s Jenna, an Okanagan babe.

“Garth: As a couple who (stupidly) got caught in the real estate market fiasco Kelowna.  We had a house built for resale thinking we could make some money. The house cost us$1.2 million and we now have it listed for $999,000 and can’t sell it.  We have a mortgage of $400,000 on it.

“What recommendation would you make?  We wanted to retire but now looks like Freedom 90….”

Yes, Kelowna, where everybody believed – until about eight months ago – it was different because all Boomers alive lusted to move there. Now the wrinkly ones can’t get out.

And in Vancouver, home of the most expensive real estate of any world class, bush league, myopic, self-obsessed regional city on the planet, Mark sings a little happy song to himself every morning. He rents.

“I’m renting a $1.5m house which was renovated to the tune of $180k just before we moved in (I had to peel the protective lining off the steel appliances and fittings in the 4 bathrooms.

“I have a 3 year lease for $2,900 per month.  I don’t know how much the taxes are (surely more = better in the self gratifying eye of the locals) but the strata fee is $446, with a special levy of $43,000 (yes thousands) this year to refurb the outdoor and indoor pools and common facilities.  It is in Shaugnessy where the cream is turned for its cream.

“So, here’s the punch line…  At these killer low rates, AFTER a down payment of $600k (no 95% financing here) the carrying costs would be $1,374 per month MORE than renting and that’s not even adding in the $500ish strata, taxes and special levy! Why would I buy? Why?”

I could tell you about Muskoka right now. Or Victoria – where on Thursday 87 houses were listed but just 21 sold. But maybe you get my point. Even amid the earliest of Springs on record, with the lowest interest rates ever, accommodating bankers, cash-back mortgages and 2.99 specials, in all but a few hormonal pockets of the country, realtors fret and vendors sweat.

As you know, when this pathetic blog started, real estate was the It asset. Thanks to cheapo rates. HGTV, F and media house pumpers, the bubble days were extended, prices soared and household debt reached skyward. Now millions of Canadians are so invested in their houses that any drop in values will wound.

The message here has been simple and consistent. Don’t fall for it. No asset rises without end. Debt can’t be wiped away. Crave diversity and balance. Never put all into a house. In rough times, be liquid. Let low rates trash debt, not embrace it. Don’t buy high, wanting higher. Know it’s never different.

In every market events will unfold at their own pace. But for anyone who’s cared to listen, one thing stuck. You’ve had four years to prepare.


#1 Randy on 04.08.12 at 8:55 pm

What ??? Nobody warned me …

#2 pathcontrolmonk on 04.08.12 at 8:57 pm

But Kelowna has Ogopogo.

#3 TurnerNation on 04.08.12 at 8:57 pm


#4 Big Al New on 04.08.12 at 9:00 pm

Garth what are the rules governing the sale of foreclosed properties in Canada. In the States they’re up front about the property being either in foreclosure or in the process of. Here it seems you ask and they are reluctant to tell you,but hell theres a lot of MLS listings with photos of empty homes with not a word of why.

#5 Dontcallmeshirley on 04.08.12 at 9:09 pm

Just for the sake of perspective, Garth’s “greater Calgary” anecdote is in High River. Population 10,000 and about 60 km outside Calgary.

Just to be accurate, High River is to Calgary what Milton is to Toronto. Commutershed. — Garth

#6 george on 04.08.12 at 9:10 pm

“Let’s get this straight. We had a financial crisis brought about by malinvestment during a credit-induced boom. It was enabled by central banks. As Peter Schiff analogizes: the elementary school teacher handed out pixie sticks and soda pop, left the classroom, and returned to find that the kindergarteners had wrecked the place.

How did the Bank of Canada respond? Liquidate the malinvestment? Nope. Allow the market to determine interest rates to encourage saving and capital accumulation? Guess again. Marco? Polo.

The Bank of Canada responded by further lowering interest rates to stimulate debt-financed consumption. In other words, they continued to do the exact same thing that caused the crisis in the first place. And now they are patting themselves on the back over it. They celebrate this “robust recovery” in the useless Keynesian macroeconomic metric of “domestic demand.” It is assumed that this time will be different.”

#7 Butch on 04.08.12 at 9:11 pm

Still renting, but after all this waiting even I’m becoming cynical.

We’ll see…

So buy. — Garth

#8 TurnerNation on 04.08.12 at 9:14 pm

Damn that twerpy realty blog!! The young uns shall be schooled by this weblog’s pen.

#9 gmc on 04.08.12 at 9:22 pm

I sold in the fall of 2008, bad timing for me, but I still believe it’s coming, I rent, I hate it but I have no choice, and I lost the granite wife…. and everything else, should have gone for the ride…. it’s been brutal…. but then again I OWE nutting…hahaha

#10 Dontcallmeshirley on 04.08.12 at 9:22 pm

Just to be accurate, High River is to Calgary what Milton is to Toronto. Commutershed. — Garth

Exactly right…boonies getting crunched = 24-36 months or RE runway remaining for the city proper.

Time your pre-construction condo buy accordingly.

#11 GeneticistX on 04.08.12 at 9:22 pm

my frog boxes get delivered this week for me to pack up and venture down the to road to go rent after selling.

im early 40s, will not have a stitch of debt, and looking forward to it.

What I truly don’t understand is why the banks are giving out 30 year mortgages to my peers, half of them will be long dead before they can pay off their mortgages? Banks are lending money without ever intending of receiving full payment, what is this socialism at its best?

#12 Scalgary on 04.08.12 at 9:34 pm

Great post Garth…!

Today’s picture is good enough to explaing the status of Canadian Real Estate.

Keep up the great job..!

#13 Market Bull on 04.08.12 at 9:46 pm

Seems I’ve heard this story before. A fetching photograph combined with a few amusing anecdotes professing real estate doom and despair, sprinkled (unfortunately) with very little verifiable data to back them up. Highly entertaining, but hardly convincing.

By all the latest accepted national indices, including major banks, Statistics Canada, Bank of Canada, CREA, Teranet, Royal Lepage and RE/Max, average Canadian real estate prices continue to rise and sales are generally robust. And, as has been frequently touted here, it must always be remembered that real estate is profoundly local in nature.

Surely it must be conceded that there is as yet, no clearly identifiable trend that Canadian real estate (in general) is in serious trouble.

Could that change? You bet, but it’s taking far longer than anticipated. A dearth of hard data indicating real weakness in the market suggests that the jury is still out.

‘Fetching.’ ‘Amusing.’ ‘Highly entertaining.’ And you expect facts, too? Pervert. — Garth

#14 Nick on 04.08.12 at 9:46 pm

When I started reading this blog in Jan 2010 I had 90% of my net worth in RE and 30k Line of credit. 2+ years later it’s now 0% in RE and 0$ in LOC. Everything is in a dividend producing balanced portfolio. I like it but what I like even more is that exactly zero of my friends + family are doing this right now ( I grew tired of trying to warn them and they grew tired of listening to me). As Warren Buffett wrote one day :”You pay a very high price for a cheery consensus. “

#15 Pr on 04.08.12 at 9:48 pm

New problem for VANCOUVER real estate and its a BIG ONE!

#16 Timbo on 04.08.12 at 9:48 pm

Fantastic post tonight Garth. Keep up the great work so more sheep can see the light of day.

#17 Mark W on 04.08.12 at 9:51 pm

I live in a suburb of Vancouver and rent a really nice one bedroom apartment (fully rebuilt) with my wife for $780.00 a month.
Our friends look down on us for renting.
Right across the street the exact same apartments sell for $249,900.00.
So I did some math and asked the following question.
Am I better off to rent or buy?
Assuming a 25 year mortgage with 5% down, plus maintenance fees & taxes what is the break even point of renting vs. buying.
This is also assuming that (1) interest rates stay the same for 25 years on that mortgage, and (2) no money ever has to be spent of repairs to the building in the next 25 years.
Based on my limited math skills the break even point of renting vs buying was 69.4 years.
I am 50 now, so that puts me at an age of 119.4 years.
The chances of that happening are the same as assumption #1 and #2 above.
This also does not measure the money I can make on the investments I have now, which would be put into a big ball and chain.
Then the picture looks even worse.
When I explained in detail this logic one day the reaction was well, rather hostile.
Also, as a renter I can just give notice and move.
Owning blue chip stocks or real estate … think I will go for the blue.
Then again maybe I am just stupid … everyone tells me this for not buying real estate.

#18 Debtfree on 04.08.12 at 9:52 pm

@ eagle bay . I’m out of crayons . so view the picks .
mountain lined inlets make the tsunami much more damaging because the water has nowhere to go but up .geez.
I remember it well the earth quake knock me out of bed and threw me against the wall twice in New Wesminster.

#19 Debtfree on 04.08.12 at 10:01 pm

re pic … say his name fast ten times . and prepare to laugh and laugh.

#20 Makavelli on 04.08.12 at 10:05 pm

Creating bidding wars is not fraud. It’s called successful marketing. And it’s the buyers fault for paying the price. Anyone selling their home would want as much as they could get for it. The last decade has been a great opportunity to make large on RE. But this party is over and I’ve unloaded mine.

#21 bayview on 04.08.12 at 10:08 pm

The house you list sold for 295k over what was paid 4 years ago. IF, on the low end the seller put 150k into renovations. I would belive a more accurate representation would show the house sold for 145k more in 4 yrs. Hardly stunning when you consider the seller purchased the property during the downturn of ’08. One could argue if there was no minor correction during ’08 the selling price at that time could have been in the mid to high 400’s.

#22 Furst on 04.08.12 at 10:19 pm

FURST! As always, I charm this blog.

#23 eaglebay - Parksville on 04.08.12 at 10:19 pm

Angela Merkel arrives at Passport Control at Athens airport.

“Nationality?” asks the immigration officer.

“German,” she replies.

“No, just here for a few days.”

#24 Re-diculous on 04.08.12 at 10:19 pm

So a place in my in my building in downtown Vancouver listed at $705K for 921sq ft, 2 bdrm….wow! My quick back of the envelope calculation:

Monthly mortgage on [email protected]% = $2056
Total Monthly (including strata fees & taxes)=$2600+maintenance*

With interest rates @5%, total monthly = $3480+ maintenance*

(* all owners got slapped with a $15K levy in January for the complete re-vamp of water infrastructure, now underway)

So yeah, I think I’ll contnue to rent for $1700 and monitor how quickly some financial genius comes and grabs this one.

#25 MC on 04.08.12 at 10:21 pm

Garth, Easter & Christmas, your’re hardcore…keep it up!!

#26 TheBigLebowski on 04.08.12 at 10:27 pm

We have been taught that being houseless is like going to work without any pants. You will be stared at ridiculed and even made fun of. So most people who are selling today are like frogs jumping from one lilly pad to another. They sell their present dwelling and immediately launch themselves into another mortgage . The thought of renting evokes the same emotions as buying a summer home on the far side of the moon. Myself, I sold 2 years ago and never looked back. Why would I buy back into the same irrational market I vowed to extricate myself from? I like not having to mow a lawn or move sprinklers all weekend, or worry about how long the furnace will last with all the strange noises it creates when firing up. I am not tied to a numerical address and am free to travel or relocate at the drop of a hat. Some longtime posters will remember where I invested my assets, no need to rehash that with the noobs. To buy now would reveal ones indoctrination into the mainstream media propaganda. So I sit here, listening to the news and turning 180 degrees and doing the exact opposite. Mainstream is not placed in front of us to inform or protect our well being. They exist for the sole purpose of treating us like mushrooms, keeping us in the dark and shovelling manure on top of us.

#27 Skatch on 04.08.12 at 10:27 pm

Garth, you can’t fool me, that woman in the picture is a tranny.

#28 Bottom Feeder on 04.08.12 at 10:28 pm

Although I appreciate the calculations of renting vs buying we have to remember the majority of those buying are just speculating (with absolultely no care at all for anything long term). Picture this; large numbers of folks who have have very few breaks in the past, come to Canada and are absolutely stunned to find they can borrow huge sums of money from the banks for virtually no money down, all guaranteed by the the Canadian taxpayers (CMHC). Why not take advantage of it? Party on.

#29 Canadian Watchdog on 04.08.12 at 10:36 pm

Early warm weather for Toronto, confirmed.

#30 Narrowgate on 04.08.12 at 10:36 pm

Great pic today Garth…the “real thing” indeed. In case some don’t know, the bikini lady in today’s pic is a MAN, that’s right, a dude.

#31 Mr Buyer on 04.08.12 at 10:42 pm

LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE, LOVE. This zen moment has been brought to you by the Bubble Has Topped Society at remember…BUYER BEWARE. THE BUBBLE HAS TOPPED. NOW IS NOT THE TIME TO BUY A HOUSE. SALES ARE FALLING ACROSS CANADA. BUYER BEWARE…love, love, love, love, love, love, love, love, love, love, love, love, love, love, love, love, love, love, love, love, love, love, love, love, love, love, love, love….

#32 Mr Buyer on 04.08.12 at 10:48 pm

Ah, listen, that just did a number on my head. The whole transgender beauty Queen thing was like a kick in face. I owe you big time : O

#33 John G. Young on 04.08.12 at 10:49 pm

#30 Narrowgate on 04.08.12 at 10:36 pm

“In case some don’t know, the bikini lady in today’s pic is a MAN, that’s right, a dude.”

So how do you explain that she is competing in Miss Universe Canada? Their rules exclude men.

PS Garth, thank you for trying to pry open some closed minds — but judging from the haters on this blog, you may have opened Pandora’s Box (no pun intended).

#34 geneticistx on 04.08.12 at 10:49 pm

just one more note, the world must be upside down now, a bungalow around the corner from me in midtown toronto has NOT sold, and it’s been on the market for 10 days. Yes, 10 days. Panic is probably setting in on the sellers.

#35 The Patient on 04.08.12 at 10:55 pm

#7 Butch
Still renting, but after all this waiting even I’m becoming cynical.

We’ll see…
So buy. — Garth”

I hear you, Butch.

Garth, how big an average price drop (-20, -30, -40%?) must there be for the bubble to have been proven a bubble?

#26 TheBigLebowski

Where is the smart money going? Is it into rent and a growing portfolio, as you’ve done? Or are today’s sellers tomorrow’s buyers. Are today’s buyer’s yesterday’s sellers? At 70% homeownership, are there anymore serious buyers left?

#36 VanIsle Retiree on 04.08.12 at 11:08 pm

And here in Canada’s retirement destination, Parksville/Qualicum Beach on Vancouver Island, the latest figures are in for housing prices. Just published in the Oceanside Star on Thursday – Feb 2012 average price = $410,747; Mar 2012 average price = $351,881. And compared to Mar 2011 = $391,888. And sales from last March to this March dropped from 57 to 36. I guess nowhere is safe, not even Geezerville.

#37 Weekend fun on 04.08.12 at 11:14 pm

So…. The comments today are super funny! I’ve been thinking more and more about selling.. And renting or crashing with my folks :) I think the bubble is going to pop very soon! How do I get listings of foreclosures or bank owned properties?… Anyone? I have noticed way to many empty houses and I think it’s time to start low balling soon…. I’m just in debate about how much of a correction is going to happen. I’ve been assessing property tax values and going by that…. Thoughts?

#38 Weekend fun on 04.08.12 at 11:16 pm

Btw I’m looking at high end properties, between 1.5 mill to 2 mill and hoping they drop to 1-1.2 mill :) or they can drop more and this is factoring I sell mine now…

#39 Chris on 04.08.12 at 11:17 pm

The Calgary Sun said today that sales volumes are back at 2007 levels in Calgary.

You know what that means. The B word can’t be far. Boom sha la la boom!

#40 disciple on 04.08.12 at 11:18 pm

#19 Makavelli… “But this party is over and I’ve unloaded mine.”

How nice for you. You just will never get it, will you, Iceman?

#41 Canadian Watchdog on 04.08.12 at 11:25 pm

Well folks, as I’ve mentioned many times before, banks are putting brokers on the chopping block…fast, who will now be left accountable (plotted by the banks) for lending toxic mortgages to all those helpless low-income immigrants and self-employed workers. Where have we seen this before?

First, some comments from brokers at

Jimt T…

“The broker world is changing fast. We are losing lenders and many of the ones that are remaining are becoming less broker friendly by making their products less broker-client friendly (collateral charges, 100% registration, etc.). This trend does not bode week for our channel. Buckle up for the ride.”

Rob Campbell, Verico The Mortgage Wellness Group

“I agree with you, Jim. The proof that the market has changed for us was reflected in the re-licencing results as of the end of March. 30% drop off is huge. Gone are the days of easy peasy deals to be funded by agents.”

Gone they are, and for those brokers who are still having a hard time realizing what’s going on behind the scenes, here is what happened in the U.S. just before subprimes imploded.

There is only one line I can think of to sum this up: “We who are about to die salute you.”

#42 syd on 04.08.12 at 11:35 pm

All i know is there are no sellers in GTA and tons of buyers.

#43 The Thing in the Basement on 04.08.12 at 11:40 pm

6 George – yes I always go to my pharmacist to learn monetary theory.

16 Mark W – maybe your friends would feel better if you moved in beside 23 re-diculous.

36 VIretiree – full stats n/i Victoria

Looks like we are mastering the “slow melt” despite the low rates.

#44 ex bc boy on 04.08.12 at 11:43 pm

spent easter dinner with builders- Im a renter- amazed at how they view the only way to make money /build equity is thru RE. This is in AB. I had to bite my tongue. There was no point in arguing a different view. Besides they are wealthy and Im not quite. Maybe I,ll be like the bank-“I,m richer than I think”

#45 I am not Mr Buyer on 04.08.12 at 11:49 pm

So a friend of mine was telling me that he was closing a deal on a 425 million dollar one bedroom condo in TO yesterday (0.023% for 400 years) and they brought him into like a gymnasium and there were like hundreds of people on the sidelines screaming their brothers got jobs so they went ahead and got mortgage approvals (they could because they already had jobs) and wanted to buy the same property my buddy was inking the deal on. Well as soon as my buddy got up from the table one of the guys on the sidelines ran up from behind and body checked him into the corner grabbed the deed and threw down his mortgage agreement for the 425 million plus 50k on top of the costs of the transaction. So after a quick check by the team medic my buddy was okay to get out of there 50k richer with a bit of a head ache. Upon hearing this I told my friend about this blog and how a guy that was 98% correct in his forecasts warned about these people with jobs clamoring to buy once their brothers got jobs washing dishes at restaurants around town so I wore a helmet and brought my hockey stick to my deal (a 900 million dollar one bedroom semi detached at 0.0023 5 500 year mortgage with $45 down payment). Sure enough one of the people clamoring on the sidelines tried to check me into the corner so I jammed the blade of my stick into the floor and up against the wall and carefully aimed the butt end at the guys gut as I glanced over my shoulder (a tried and true tactic that leveled the toughest of defensemen time and time again without drawing a penalty because they ran into it but I broke a lot of sticks that way). Anyways my buddy was amazed and started reading the blog and paid extra close attention to the 98% right guy. Needless to say my buddy and I are on easy street now with all sorts of babes and jealous people looking on in envy.

#46 Mr Buyer on 04.08.12 at 11:53 pm

#46 I am not Mr Buyer on 04.08.12 at 11:49 pm…Needless to say my buddy and I are on easy street now with all sorts of babes and jealous people looking on in envy.
You are clearly a man that is poor in spirit. Poverty of the soul. Much more difficult to get rid of.

#47 Wait, that's 42%++ on 04.09.12 at 12:09 am

“…sold for $435,000 four years ago. After being listed recently for $619,000 …”

42% over four years (10%/year). Even if the market fell by a whopping 35% (way too much), this “flipper” is still ahead, or very close to even with all the extra fees.

I admit flipping this close to the edge is dangerous, suicidal even, but if this keeps up for even another 12 months, the crash is either going to kill us all (50%++) or be a non-issue, bringing us back to 2010 levels (ho hum).

No, i’m not going to join the immanent disaster but as a long time reader can you make some sense of this?


#48 Mr Buyer on 04.09.12 at 12:10 am

Nice edit. I am not serious about the poverty of spirit thing. I would not know a spirit if it hoofed me in the butt.

#49 earlymidlifecrisis on 04.09.12 at 12:14 am

SHE is a woman. Anyone who goes through that much work and effort to change sex has earned the right to be that sex. Anyone who doubts that should go look in the mirror for 5 minutes and contemplate exactly what they would have to do to pull it off while also keeping in mind what it takes to just lose 5 lbs. Nuff said. Does she rent or own?

#50 Mr Buyer on 04.09.12 at 12:19 am

Did you guys hear about the kid that gave up a kidney to get an ipad or iphone or whatever. Well the organ buying biz is a booming global concern and Canada wants to jump in both feet so everyone that is up for renewal and can’t get a mortgage because their house is no longer worth what is owed upon it will be able to sell their organs to make up the difference and secure the new mortgage. Looks like the new lending guidelines are nothing to worry about after all. As it turns out the whole ballooning of house prices by the government was just to make Canadians more “willing” to sell their organs. I was too stupid and short sighted to see the big picture and ultimate boon to the economy the housing bubble really is.

#51 Aussie Roy on 04.09.12 at 12:23 am

Aussie Update

GUN-shy homeowners remain reluctant to sell by auction, with volumes significantly falling in the nation’s capital cities.

No bubble here, just a slow market – LOL

Great idea – cut R&D tax breaks for companies but keep negative gearing for house speckers.

Fed govt job cuts to bite into Canberras house prices.

#52 Makavelli on 04.09.12 at 12:26 am

#41 disciple on 04.08.12 at 11:18 pm

#19 Makavelli… “But this party is over and I’ve unloaded mine.”

How nice for you. You just will never get it, will you, Iceman?

I totally get it. I got the timing right and made the dough. I’m bearish now and I’m in a good position. I love this bubble, I wish it could go on longer.

#53 Mr Buyer on 04.09.12 at 12:32 am

I actually have to get some work done

#54 John G. Young on 04.09.12 at 12:46 am

#23 eaglebay – Parksville on 04.08.12 at 10:19 pm

It really pains me to say this, but that was a funny joke.

Thank you.

#55 Sherry Cooper on 04.09.12 at 1:39 am

See what a month at the spa and an angle grinder can do?

Yeah ….same to you, ya jealous @$#[email protected]

#56 raider on 04.09.12 at 1:48 am

#36 The Patient: Where is the smart money going? Is it into rent and a growing portfolio, as you’ve done?

Exactly :) (or more honestly. the “alleged” smart money). Have a look at this one:
The really mean people play this game with Derivatives and call it protection. Due to the non-linear pricing models fortunes can be made (and obviously lost). Some of these guys pray for financial mayhem because increased volatility increases option premiums.

So no worries, bricks and mortar or other types of illiquid investments are off their radar. REITs maybe, but as Ireland has shown, the Mayhem in their appartment market pushed the rents down because a lot of the “not-so-smart” Speckers are now looking for renters to maintain their mortgages. Assuming rising interest in Canada and rent reductions, the existing capital structures at REITs MAYBE harder to maintain.

#57 Monster Cookie on 04.09.12 at 2:04 am

Sitting here watching the 100th anniversary of the Titanic special on CBC and comparing the disaster to our current economic system globally, i think we’re about to sink.





#58 Adi on 04.09.12 at 2:27 am

What Garth is saying matters to me as much as F or any real estate agent.

The ‘market’ I’m monitoring is the standard of living while my trading strategy is the affordability.

When I decide to buy, it is not Garth or F or any mama… who is signing the papers… It is my skin that is in the game.

A simple question:

What is it easier to predict, the economy (whatever that might mean to you) or what you can afford?

My answer:

For what I can afford I have all the numbers and it doesn’t take a rocket scientist to get something accurate.
Even the risks can be easily quantified. Now … can you do the same for the economy? ( I’ve heard that monkeys can do
the same or better than hedge fund managers. Of course, Mr. Market is built for human psychology…(monkeys not allowed :)))

We rent for now because renting increases our standard of living ( not because of the economy… or F or C or G… ).

I have to thank Garth for the hints on how to assess affordability. The rest of the emotional stuff related with who timmed
the market better, Garth or X or Y or Z … it is meaningless to me ( probably in the end, the one who is right is the monkey )…

#59 betamax on 04.09.12 at 3:14 am

“Know it’s never different”

Unfortunately, this is a lesson humanity seems incapable of learning.

Dude looks like a lady? A little too skinny for my tastes, but at least s/he looks looks good doing it.

#60 Nicklaos Vlittas on 04.09.12 at 3:38 am

You’re telling me you wouldn’t go for that woman in the picture because she’s really a dude? I’d be all over that! We all know that true love happens in the dark.

#61 Devore on 04.09.12 at 3:39 am

#13⁠ Market Bull

Keep waiting for the verdict then. Why do you people even bother coming here to sound off your tired cliches?

#62 Beach Girl on 04.09.12 at 4:23 am

WOW, even shocked myself. Going for eye Lasik Surgery today. Not frightened, still buzzed from Saturday. I am not gay but that picture of the beautiful woman had even me entranced. If that was a man, I am hopeful about my future. Next year, cosmetic surgery. This is truly inspiring.

I will keep you all posted on this op, as I know you all care. With the exception of Westerman and Mikey the Retard.

If that person was actually a man, maybe they can assist Westernman. I know people donate livers, lungs, crap like that, but do they donate balls.

Also, because everyone is so serious here, do NOT buy anything. I agree with MR. BUYER. This is the time to sit back.

I told the flame, when I recover from this op. you might not look so good to me. After his goggling my guests. Might have to kick him to the curb.

#63 housedoc on 04.09.12 at 5:25 am

I’m pretty sure, at the very least, she’s been nasally enhanced.

#64 new-era on 04.09.12 at 5:39 am

New budget , new round of layoffs in the public sector.
Also affecting the private sector

#65 Deb on 04.09.12 at 6:00 am

This is not a nose blog. – Garth


I can’t stop laughing. I’ve tried, but I can’t.

#66 Market Bull on 04.09.12 at 7:24 am

@ Devore wrote:
“Keep waiting for the verdict then. Why do you people even bother coming here to sound off your tired cliches?”
Why do you come here?

Is it to reinforce your bias in the warm and loving embrace of a familiar echo chamber of like-minded souls?

How cliche is that?

#67 The real Kip on 04.09.12 at 7:29 am

That woman in the pic does look like the Canadian Miss Universe contestant.

Who did you think it was? — Garth

#68 Timbo on 04.09.12 at 7:31 am

“With bulging stocks and a slowing economy, a key question for the global metals markets now is how strong China’s second-quarter demand for copper will be. ”

Inventory is rising due to the slowdown?

Don’t worry about high oil and commodity prices. They won’t be affected by economies that are building inventories due to slowdowns. Things will just get cheaper by the day and your raise is a given in a world competing for your job at a lower labor cost.
Good times….

#69 sue on 04.09.12 at 7:56 am

I am happy to report that my bf sold his house after almost a year on the market. He found that needle in the haystack buyer who didn’t mind the tiny kitchen and bathroom (right next to it), dated layout etc. Got close to the overpriced asking price. I am shocked and thrilled for him that he got out in the eleventh hour. Holding my breath until June 22nd (close). He has no idea how lucky he is, but he will get it this time next year.

#70 Randy on 04.09.12 at 8:10 am

Oh, Oh….Out of the mouths of babes and children…comes the truth ?

#71 steev on 04.09.12 at 8:17 am

#48 Wait, that’s 42%++

You’re not factoring in the cost of the renovations on the place. The flipper would still be underwater if they didn’t get out before the correction.

#72 Steven Rowlandson on 04.09.12 at 8:34 am

Diversity and balance might seem like a good idea until all your diversified assets go to zero at the same time more or less. Paper burns.

The earth will melt in the sun prior to this happening. Should mitigate the effect. — Garth

#73 Anne "Pom Pom" Rohmer on 04.09.12 at 8:56 am

#13 Market Bull on 04.08.12 at 9:46 pm

Seems I’ve heard this story before. A fetching photograph combined with a few amusing anecdotes professing real estate doom and despair, sprinkled (unfortunately) with very little verifiable data to back them up. Highly entertaining, but hardly convincing.

Sure, “this time its different” marketbull….

Housing boom will not end in a crash, says Harvard
This article was published on: 6/12/2006

“Although housing prices are stretched, it is hard to see the catalyst for a crisis in the market,” says Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard. “The overvaluation looks pretty well balanced by longer term supports for house prices, so we may just see a few years with little action. Houses will revert to being something to live in rather than money makers.”

#74 Timbo on 04.09.12 at 9:08 am

“That would cause the price of natural gas, which has been halved over the past year, to nosedive. Citigroup commodities analyst Anthony Yuen says the price of natural gas — now $2.08 per 1,000 cubic feet — could briefly fall below $1.”

Don’t you just love inventory when it builds till it bursts.

#75 maxx on 04.09.12 at 9:11 am

#6 george on 04.08.12 at 9:10 pm

Good point. “Debt-financed consumption” ought to be bandied about in common parlance as an acronym.

Let’s look at the real value of a DFC dollar:

1-Earned/investment income which has been reduced by taxes will be used to pay for stuff;
2-The stuff we buy has been marked up into the stratosphere by ridiculous profit margins (profit is only ever possible when a measure of value has been left on the table);
3- Taxes at the retail level further reduce the value of the DFC dollar;
4-So we then gross-up the first three hits to our money by borrowing? Insanity!

The government takes our money, retail takes our money and then the banks do. This piteous fiscal behaviour means that a DFC dollar has not only had a chunk of the value stripped from it before it’s spent, MORE value is stripped from it by borrowing.

You want a $100.00 item. Your marginal tax rate is, let’s say 30%. Let’s also say that the profit margin on that item is a modest 10%. You must also cover about 15% retail tax. At this point, before financing, it will cost you at least 1.5 times the price tag. Imagine the same scenario with 45% marginal tax, a 30% or more profit margin and rising rates. OUCH!

#76 Herb on 04.09.12 at 9:20 am

#63 Beach Girl,

good luck with the eyes. Daughter had the other version (forgot what the procedure was called) over 10 years ago and never looked back.

Wait a minute, Flame never showed any inclination for hanky-panky with you but goggled your guests? Hmmmm …

#77 Herb on 04.09.12 at 9:24 am

#28 Skatch,

in view of the evident other assets, I would tend to ignore that slight imperfection.

#78 Daisy Mae on 04.09.12 at 9:25 am

“Days ago I called a Toronto realtor unethical….”


Heard on the radio this morning in Kelowna/West Kelowna: “What’s YOUR excuse? No DP, no land transfer tax, no HST!” Come to ELKRIDGE and…..”

So that’s what we have across Canada — thousands and thousands of unethical realtors.

#79 Calgary's OK on 04.09.12 at 9:51 am

Everybody, quick come to Calgary before we run out of $129,900 town homes….

#80 Do Do Bird on 04.09.12 at 10:15 am

I can remember back in 1999 my spouse and I were trying to sell our new 2000 sq ft three storey lake view house in Nanaimo for $250,000. Well that was when all the Asians decided the world would not end now that Hong Kong was repatriated with China…so all those wealthy Chinese hanging out in Van and the island saw there was no reason to hang out longer in Canada and started selling their B.C. Real Estate.

Oh boy what a slaughter….in Nanaimo there tends to be some speculation so when all the neighbors felt the chill in our subdivision the prices dropped $10,000 per week.. The prices dropped down to $130,000 for some bungalows. I guess it’s like we boomers used to kid each other in high school, “S**T happens.

#81 Bigrider on 04.09.12 at 10:17 am

I loved your missive today Garth. Right to the point.

I would love to have you sit down with some of my Italian friends who think nothing can go wrong with “God’s” asset class.

These big boys will flash there millions all day long at you and tell you you’re wrong until the sun goes down.

#82 Bond junkie on 04.09.12 at 10:51 am

Mr.Buyer… bored and reading comments from y’days blog. I sympathize with your semi-colon agonizing although my days of compiling expired long ago along with my university pass! Dad suggested a career in IT but my gut told me to follow the path into finance. Taught me an important rule, always trust your first instincts, no exceptions. Nonetheless, as a fellow bank employed sociopath, SM definitely speaks the truth about who he says he is. I work on a trading floor as well and his tales have played out here in almost exactly the same fashion just under a different brand name. It’s true that the rest of the country is topping out but Toronto is the last bastion of strength…. 1 ding for 3-4 more years to come then I starts the long inevitable melt. Too many still on the sidelines here…

#83 Muskoka Renting on 04.09.12 at 11:16 am

What do you think will happen to cottage prices? Are they as overvalued as GTA condos/SFH?

You gotta figure…if I buy a cottage today, even at $250,000 (cash) I would have to stay there every july/august for over 30 years just to break even!

It’s actually cheaper for me to rent a cottage for $4000/month.

What moron would EVER buy a cottage if this is the case?

#84 };-) aka DA on 04.09.12 at 11:23 am

Sellers don’t want ethical REALTORS – they want a Piranha who will get them the very highest price possible. Would you sell your home to some stranger who bid $50,000 less than the next guy? Of course you would not.

When you list your home for sale, at whatever price, it is called an “invitation to treat”. If you listed your home for $500,000 and someone came along and offered you $500,000 you are not obligated to sell it to them – not even if they offered you $550,000 would you be obligated to sell it to them. You might owe your agent something for having done a fine job of getting the results job you contracted of them, but no obligation exists between you and the proposed buyer until an agreement is reached with them.

There is nothing unethical about the practice of listing a home at a price that will garner the attention of as prospective buyers as possible – even if that price was $1.00. There may very well however be something unethical about neglecting to do all you can do to get the very best results for your principle – in this case as listing agent of the seller.

I know you to be a far more educated man Garth than one who does not grasp these simple fundamental aspects of agency. Which brings me full circle to that loathed Buyer Representation Agreement or “B.R.A.”, or as we refer to it out West Exclusive Buyer Agency Agreement (E.B.A.), you so often lambast. If you have a seasoned real estate practitioner under contract to represent you in your search and purchase of that perfect property, you needn’t worry about paying too much or falling for such entirely legal and dare I say “morally obligated to the seller principle by the listing agent” marketing tactics as that you criticize in this most recent of your blog editorials. Your Buyers Agent has every bit as much fiduciary duty to ensure you get the best possible deal as that Listing Agent has to ensure his seller gets his best deal.

Either way, if you choose not to hire an agent to look out for your best interests – you may well indeed be precariously poised to become the next “Greater Fool”.

#85 Dr. Wayne on 04.09.12 at 11:26 am

Garth … given all the negativity out there on the real estate market … indebtedness for one … can you speculate ‘why’ F did dick in the budget to avert calamity for the masses.

#86 disciple on 04.09.12 at 11:33 am

Power Corporation of Canada is a major Canadian company with assets in North America and Europe in a number of industries. These industries include media, pulp and paper, financial services and the insurance industry. This company’s influence is HUGE in Canada.

Former Prime Minister of Canada, Paul Martin, was hired by Maurice Strong in the 1960s to work for Power Corps’ Paul Desmarais, Sr. Martin became President of Canada Steamship Lines, a subsidiary of Power Corp., and in 1981 Desmarais sold the company to Martin and a partner. Martin went on to make his personal fortune as an owner of CSL. Former Prime Minister of Canada, the late Pierre Trudeau, served in the mid-1990s on Power Corp.’s international advisory board. Former Prime Minister of Canada Brian Mulroney also has a relationship with Power Corporation.

Former Premiers of Ontario William Davis and John Robarts of the Progressive Conservatives have both sat on Power Corp.’s national advisory board. John Rae, the brother of former NDP Premier Bob Rae, currently serves as Power Corp.’s Executive Vice President.

Former Premier of Quebec Premier Daniel Johnson, Jr. worked for Power Corp. Former member of the Liberal Party of Canada Maurice Strong (now hiding in China to avoid prosecution for a 100 million dollar food-for-oil scam of the Iraqi people and also hiding the fact that he is Adolf Eichmann) became President of Power Corp. by his mid-thirties. Jean Chrétien’s daughter, France, is married to Desmarais’s son, André.

#87 Oceanside on 04.09.12 at 11:56 am

#13 Market Bull on 04.08.12 at 9:46

” By all the latest accepted national indices, including major banks, Statistics Canada, Bank of Canada, CREA, Teranet, Royal Lepage and RE/Max, average Canadian real estate prices continue to rise and sales are generally robust. And, as has been frequently touted here, it must always be remembered that real estate is profoundly local in nature”
Was in Victoria this weekend and an old friend who has been a successful realtor for one of the above mentioned companies for over 20 said sales are off 30% and for the first time said he is “really worried” about his future in this business.

This person has been a steady high income earner with many repeat customers. he was also one of the people who has been saying for years….honestly…..”Victoria is different, everybody wants to live here”

#88 daystar on 04.09.12 at 12:26 pm

#6 george on 04.08.12 at 9:10 pm

Central bank rates are reflective of where the economy is going 6 to 8 quarters away relative to current market conditions in the bond markets. It is forward looking policy. I don’t think you understand what the implications are with low rates outside of how it effects housing. Its increasingly clear to me that you don’t see the present and future risks the way the BoC does or from people like myself that make a living through risk assessment and that link you keep spamming is a dud.

If you wish to strengthen your argument against monetary policy, park the personal attacks and try balancing it with fiscal policy. If you at all tried, you would begin to see what I and others see. Otherwise, you will most definitely face criticisms from people like myself who will go through some lengths to explain why you are wrong.

#23 eaglebay – Parksville on 04.08.12 at 10:19 pm

Bigots are generallly simple minded and easily led. Sadly, its another example of you disappointingly fulfilling my expectations.

Garth, things are about to get busy here in the prairies. You won’t be hearing much from me for the next while so I should probably give you a heads up on what I think I know. Europe being unsettled and China facing hiccups with the U.S. keeping their monetary issues at bay for the time being all point to commodities (obviously this includes gold) trending lower (Mark alluded to the future of commodities yesterday ever so slightly and if people missed it, rates will be going up sooner than later). The risks to Canadians are not just a slowdown in supply and demand or household debt. We could have some very real issues here geopolitically and the nation to watch is North Korea.

I would consider North Korea to be a rogue state and I’m not alone. If North Korea heads into conflict with, well, anyone but in particular south Korea, China is highly likely to get involved and if that happens the U.S. could try to exploit China’s distraction and invade Iran which would be a terrible mistake. The bear comes from the north, its biblical what happens next.

I doubt that I would be alone in thinking this. The geopolitical risk out there combined with a buildup in commodity supply and a strengthening U.S. dollar (hard to say what it does if there is a middle east conflict, lets hope it stays localized) spells misery for the markets especially in commodities. Oil and gold will trend lower if there is peace but trends higher if there is war but unless there is war, commodities are not the place to be and the markets are selling off as we speak because of these reasons until we know.

The markets aren’t stable. Things aren’t normal out there and the markets are reflecting it now and selloffs will continue until either we hit a bottom of sorts or there is a full indication one way or another in terms of where the world is headed to with either peace or war. If there is peace, Canada will enter a recession before the year is out. If there is war and the world lucks out with it staying localized, oil will be a good play obviously but there is a commodity sector that will out perform oil and I’ll tip you off as to what the best picks are in the sector of which at present, I anonymously speak.

Otherwise, i wish you all the best (even to those who can’t or won’t do the same, someone has to set an example) and will from time to time keep in touch. Good day all.

#89 OkanaganInvestor on 04.09.12 at 12:36 pm

#15 Pr on 04.08.12 at 9:48 pm
“New problem for VANCOUVER real estate and its a BIG ONE!”

Good reminder Pr, but just like over-priced RE people won’t believe it until it happens to them.

Rather than lose sleep at night, I bought a radiation detector (SOEKS-01M from Russia for $300 from eBay). Fortunately, the Okanagan is in a rain shadow.

If I had to live on the Lower Mainland, I would take my own readings. Then only need to worry about negative equity.

Here normal background radiation is about 0.15 microSeivert/hr and has been 3-4 times higher after rain-outs when the jet stream is overhead.

#90 Ross K on 04.09.12 at 12:42 pm

Just a comment on Multiple Offers, Fraud and Misleading.

Any Home Buyer is a fool if they do not hire a Buyers Agent to handle a home purchase in Canada today. Personally I have not completed a “double ender” since 1995 and I remain ignorant to why Canadian Media has not picked up on this one real estate changing factor.

FRAUD, I believe this is a legitimate comment when under pricing a home for several reasons if you are a REALTOR.
-it is unethical to list a home at a price too low
-there is no provision in a standard mandatory listing contract that allows for home to be listed too low
-if a single offer comes in at full price for the home, the seller becomes liable for full commissions legally, so how could you council a client to act in a manner that puts them at risk
-the MLS system is a way for local agents to market properties between one another in a co-operative manner that benefits members. It is not a platform to be used to negatively impact one member at anothers expense.
-the MLS is being compromised by unethical marketers who no longer subscribe to the principles it was originally created under

#91 J.I.M. on 04.09.12 at 1:06 pm

I asked a realtor if a seller was obliged to accept an offer if it met the list price, with no conditions. She said that ; no the seller did not have to sell” BUT , she , the realtor would expect to get her fee, and she would sue to get it! Then she gave me a tight little smile to indicate she was serious.
I have to assume , in these bidding wars set up the the seller and the realtor, that there is some sort of agreement as to under what circumstances the realtor can get his fee. Otherwise the seller could be in for a nasty surprise.

#92 scib on 04.09.12 at 1:07 pm

Perhaps we should have a law similar to retail store law whereby the moment you hold an item in your hand it is considered sold. The price on the product must be honored even if it was incorrectly priced.
The very fact that they advertise a price forms a contract in most peoples minds. It should be honored, first come first serve.
This will test the abilities of Realtors to correctly price real estate.
As it is now they just ball park prices in their head and in doing so the Realtors are toying with the futures of their customers.
Real estate should be much more carefully priced using appraisers and then listed.

#93 Bloodcross on 04.09.12 at 1:09 pm

Hi Garth. I remember you saying that people should “make out like cheerleaders” in their TFSA. However, stocks & dividend investment are already less imposed and so benefit less. Bonds & term deposit are interest, and thus fully taxable, but your take is that their low return makes them not worth owning. I don’t know much about reits but they’re probably capital gain, so somewhat tax sheltered too…

So in the end, what would you put in a TFSA?


#94 John G. Young on 04.09.12 at 1:09 pm

#63 Beach Girl on 04.09.12 at 4:23 am

Good luck with your surgery.

I also wanted to say that I always enjoy reading your comments — you always have a unique and entertaining turn of phrase. For example, I just now learned that ‘goggling’ is the same as ‘ogling’.

#95 s.p. on 04.09.12 at 1:14 pm

a music video, describing what went down in the usa.

catchy track…

#96 Bond junkie on 04.09.12 at 1:16 pm

whoops- there goes another 100k over ask 93 Pearson Ave Sold: $986,000
Toronto, Ontario M6R1G4 Toronto W01 Roncesvalles List: $899,000
Orig Price: $899,000 Taxes: $3,873.43/2011 110 % List
Sold: 4/4/2012

#97 Aussie Roy on 04.09.12 at 1:29 pm

Aussie Update

6 Months ago; House prices will never fall in the mining towns, there is NO BUBBLE?…..


TODAY, House prices in Moranbah have fallen by as much as $100,000 in the past month and rents by as much as $800 per week, according to Real Wealth Australia’s Ed Kogtevs.

The sudden downward slide is “unprecedented” and the result of a standoff between landlords and investors.

So severe is the bubble burst, that Real Wealth Australia is now warning investors not to buy there, after months of telling investors that Moranbah was one of the best ‘hotspots’ in the country.

#98 Jane on 04.09.12 at 1:41 pm

I live in Vancouver and wish I could find a nice house to rent in Shaughnessy for $2900. We spent months looking for a house to rent and 99% of the houses we viewed that were all asking over $3000 were teardowns owned by Chinese who bought within the last year and were being offered by Chinese real estate agents. We finally managed to get a large older house that hasn’t been updated for $3000 on a main street near King Ed station. Only moving to be in catchment for child’s school

#99 Debtfree on 04.09.12 at 1:44 pm

@ daystar thanks for the following . I wanted to say something similar but was afraid that I would over react .

#23 eaglebay – Parksville on 04.08.12 at 10:19 pm

Bigots are generallly simple minded and easily led. Sadly, its another example of you disappointingly fulfilling my expectations.

the sad part of this so called joke is that she was born in east germany in 1954 . The only thing of occupation that she ever knew was under the jackboot of the soviet union . Where the price of freedom was in many cases death by land mine , a bullet in the back or a long prison sentence and poverty for your family .

#100 alkali on 04.09.12 at 1:46 pm

So Garth…do you rent or do you own your residence? Just curious…

I don’t care how much real estate anyone owns, so long as it is 30% of less of their net worth. Trust me. I am well under. How about you? — Garth

#101 Spiltbongwater on 04.09.12 at 1:46 pm

If the seller and his/her agent agree to advertise a lower price to induce a bidding war, and a buyer offers the list price with no conditions, and the offer is declined, can the buyers agent sue for the commission as well?

#102 tkid on 04.09.12 at 2:11 pm

Exclusive Buyer Agency Agreement — LOL! Baa for short a/k/a you would have to be a sheep to sign one!

#103 getreal-tor on 04.09.12 at 2:23 pm

#92 – It still does not prevent scams where the realtor gets phantom bids to drive up the bidding war.

As for Realtors suing, I am sure they would if it was an iron clad case but if I didn’t feel the price was right, why can’t I say, hey I don’t want to sell for this price… especially with agents now trying the price it low to attract a swarm of house hungry bidders.

As an aside, the news are now reporting that all house horny people moved to Toronto… Vancouver has lost it’s sizzle and people of Toronto are the only ones who forgot to take their meds when it comes to bidding wars.

#104 Linda Pearson on 04.09.12 at 2:38 pm

#95John G. Young on 04.09.12 at 1:09 pm

I agree with you, Mr. Young, about Beach Girl’s contributions. This time she made me too laugh with her word “goggling”. I imagine it could be defined as ‘oggling under the guise of research’.

#105 Linda Pearson on 04.09.12 at 2:39 pm

#95John G. Young on 04.09.12 at 1:09 pm

I agree with you, Mr. Young, about Beach Girl’s contributions. This time she made me laugh too with her word “goggling”. I imagine it could be defined as ‘oggling under the guise of research’.

#106 EdmontonJim on 04.09.12 at 3:03 pm

So what should I tell my Brother right now? He has a house in Okotoks, with very little equity in it. He got laid off and got a new job in Edmonton. He is staying with my sister for now, but can’t move his family up until he sells his place down south. So far its been on the market for 3 months – at the same price the paid for it in 2008. So far about 20 showings – no offers.

Should they lower their asking – which would require them to borrow to pay the commission fees, or should they just fire their realtor and get a less ethical one?

Drop the price, of course. And learn. — Garth

#107 Ross K on 04.09.12 at 3:07 pm

If such an agreement exists it must be disclosed in the M.L.S. listing and available to be seen by all MLS members.
In 25 years I have never seen this.
The fulfillment of the listing contract can take place in 2 ways:
1) A valid offer is presented under the full and complete terms as requested in an active and enforceable MLS listing.
2) The successful completion of a sale under terms that were deemed acceptable by the seller and buyer.

and scib,
The abilities of REALTORS have been tested and tested, over and over again by the courts. The Consumer is fully protected (including on list price) if they only demand such protection and 99% don’t.

A Suggested Listing Price, professionally determined, is established after between 3 to 5 hours of research and is not the same as an appraised value. An appraised value is like the “Black Book” price of a car and a Suggested List Price is like the actual “Sticker” price that appears on the car window.

#108 Frank the skank on 04.09.12 at 3:31 pm

I live in Toronto and am by no means an economist or financial expert. When I read the story of Ireland or the USA prior to their real estate crash, it sounds all too familiar.

1) Bankers, real estate agents, media and government all in denial about exessive housing prices which caused the public to be mislead and providing a false sense of security.
2) very lose lending practices by banks (since they know the government will bail them out)
3) Excessive new home developments (if you’re in Toronto, take a drive in North Ajax/Pickering/Vaughan or anywhere where there isn’t a mass quantity of houses to see how much new development there is)
4) high percentage of Canadian GDP is related to construction/real estate.
5) Government implementation of low interest rates to stimulate the economy.
6) lack of government regulation.
7) record household dept.
8) average household income exceeding 5X the average price of a SFH.
9) Bidding wars that drive up housing prices for no apparent reason.
10) Real estate agents and media saying that there is a shortage of houses.
11) Real estate agents claiming that buying a house is a good investement.

I’m probably missing some key points and I’m sure some of the mentioned points are constants but I can’t help but notice the similarities. Our denial and incapacity to see this impending housing crisis after seeing it happen to multiple countries shows how effective the government and corporations are at brainwashing us.

#109 DM Kid on 04.09.12 at 3:34 pm

Sorry Garth, I thought that David Fleming’s blog entry was very fair and very respectful towards you. You, of course, simply took out what you wanted out of it to make your point (out context, bien sur!)

Why should I quote more from it, when I linked to it? You can read. — Garth

#110 45north on 04.09.12 at 3:37 pm

s.p. music video reminds me of “Mickey” by Toni Basil

weekend fun: I have noticed way to many empty houses and I think it’s time to start low balling soon

where are you? We’ve pretty well hit the top of the housing market. There will be surprises and not all markets and neighbourhoods will decline at the same rate by the same percentage. The outer suburbs will fall faster because of rising gasoline prices. Muskoka will fall even faster.

Daystar: commenting on EagleBay: its another example of you disappointingly fulfilling my expectations. I thought it was pretty funny. things are about to get busy here in the prairies. yeah I guess with spring planting.

#111 Ross K on 04.09.12 at 3:46 pm

No Buyer Agency is based on performance which means getting a seller to accept the terms your buyer is offering. If the seller won’t sign you are looking for another home.

Acronyms for Buyer Agency are too early as Canadians still don’t know what Buyer Agency truly is.
The foolish Buyer is the one who does not DEMAND a Buyers Contract as soon as they have found a Buyers Agent they want to utilize.

The liability a REALTOR assumes when even talking to a Buyer like they are a client (and not a lowly customer) makes it absolutely insane to do so without the potential for remunneration.

The best REALTORS who act as Buyer Agents would never let a client enter into these crazy bidding wars. There is NO need for it in any area of the country. I can find 3 to 6 unlisted homes that will gladly accept my Buyers price if the MLS does not have one. And….without signing a Buyer Agency contract with me I would never undertake such effort or diligence.

#112 Mira on 04.09.12 at 3:47 pm

Garth, I follow you blog continuously. What is your thought on foreign investors? We have sold our house last year and are now renting in hopes to see the market move down a little. We lived and still are looking to live in Oakville. Our real estate agent – who we believe to be credible and trustworthy – is saying she is seeing major influx of” Chinese millionaires”, buying properties down here. Her believe is that Oakville (south east in particular) will become another Vancouver, and it will happen fast. What is your take on this? Do you believe foreign investors with cash can drive particular market pockets even higher – at a time that canadian lending is just about to get tightened and an average canadian is maxed out? Can they price us all out of the market?

No. — Garth

#113 John G. Young on 04.09.12 at 3:53 pm

#89 daystar on 04.09.12 at 12:26 pm
#99 Debtfree on 04.09.12 at 1:44 pm

Thank you for your comments.
I found the joke funny, and after reading your comments thought about why. For me, the basis of the humour was timing (the punch line comes unexpectedly quickly) and surprise regarding the double meaning of the word ‘occupation’. My heritage is in part German, but it never occurred to me that this joke may have been meant to disparage Angela Merckel or Germans; however, I can certainly understand how others could take it that way.
As you may know, as a gay man I have certainly been subject to bigotry on this blog, including by Mr. eaglebay-Parksville; perhaps I misinterpreted his reason for posting the joke, but I chose to see it as an attempt at levity and welcomed the change of direction from the usual personal slights. It is in that spirit that I would like to share a joke that was told to me by a friend of mine (whose gay brother, incidentally, died of AIDS). I hope people find it funny (and I hope Garth doesn’t delete it, although I think it’s only mildly risqué).

George is at a party when he sees a hot man across the room. He learns from the host that the man is a proctologist, gets his name and later calls his office for an appointment.
At the appointment, the proctologist asks George what symptoms he is having, and George says that he has rectal pain. The proctologist proceeds to examine him with a proctoscope.
“Well no wonder you have rectal pain,” the proctologist exclaims, “there’s a dozen long-stem roses in there!”
George replies, “Read the card! Read the card!”

#114 PW on 04.09.12 at 4:15 pm

Can you imagine what will happen to a landlord who forgets to report years of rental income? Even from a basement suite? Yikes.

Unless you know you have your ducks in a row, better be really nice to your tenants.

#115 rosie on 04.09.12 at 4:26 pm

In this case a rose, buy any other name, might not smell as sweet.

#116 Victoria on 04.09.12 at 4:57 pm

Driving around Brentwood in Victoria the other day. Lots of young couples pushing strollers. I am sure many of them bought. The houses are on their last legs. I don’t think many of them will make it the next 20 years. They were poorly built in the 70s, and are very dated- at least many Toronto homes (uptown and downtown) still look pretty good today. You can see water damage and rot on the sides of most of the homes. People probably paid about $400,000.

Very sad.

#117 Market Bull on 04.09.12 at 5:06 pm

#74 Anne “Pom Pom” Rohmer:

Constantly referencing the U.S. sub-prime debacle as a “sure-fire” example of what will befall Canada, is not only getting real old, it amounts to nothing more than intellectual laziness. A complete capitulation to the misguided notion that analogy amounts to analysis.

#118 This is Wonderland on 04.09.12 at 5:19 pm

#105 Mira

Who is your agent? I ask because I’ve been following the market in South East Oakville and fined that the same 2 million plus homes for sale last year are still on the market. Question your agent’s motive.
Of course if you’re looking for a home on the lakeshore I hear Jason Laramee has his house up for sale.–families-face-financial-ruin-after-placing-trust-in-oakville-broker#photo

Makes me wonder how many of these guys are out there.

#119 Ogopogo on 04.09.12 at 5:21 pm

#2 pathcontrolmonk on 04.08.12 at 8:57 pm
But Kelowna has Ogopogo.

Indeed it does, though I also moonlight as a bear (of the housing variety).

Haven’t missed a single blog update, though I’ve been too busy to comment lately.

On a quick update, my fave Kelowna flipper has thrown in the towel and de-listed his dolled up crack shack off Park & Pandosy. I had a big laugh the other day when I walked past the uprooted sign. Spring is promising to have sellers and realtors screaming bloody murder on the streets.

I noticed that DA made a brief appearance recently. He’s still haunting Castanet, spreading lies to all who’ll believe him. I hope he’s still banned here at least.

#120 eaglebay - Parksville on 04.09.12 at 5:22 pm

#106 John G. Young on 04.09.12 at 3:53 pm

Not to suck up to you but the joke is great.
Daystar gets all worked up and you’ll hear about it.
I appreciate a person, different or not, that is comfortable in their own skin.
As for Daystar, he’s dead wrong about China, North Korea, Iran and the USA.
By the way my wife is second generation German.

#121 Poorgoisie on 04.09.12 at 5:43 pm

John G, nice try but when you set up a joke maybe leave the “died from AIDS” stuff out. I like your posts though… Keep on a rockin!

#122 mad vancouver on 04.09.12 at 6:08 pm

No worries there…

#123 Arb Watson on 04.09.12 at 6:36 pm

Make no mistake Toronto real estate is a house of cards. CMHC along with banks can keep the party going for so long.

#124 Arb Watson on 04.09.12 at 6:45 pm

Just read this book

and sing “Everything is all right…everything is all right. Houses go up in value. Santa Clause exits. Fairies chill with Santa. Elfs buy real estate…etc….

#125 Bobby on 04.09.12 at 6:58 pm

Just out shopping here in Victoria so drove around to have a quick look at houses. Lots and lots for sale with For Sale signs everywhere it seems. Many have been there for a long time.
Saw a few fixer uppers for sale. Now is the time to lowball.

#126 John G. Young on 04.09.12 at 7:04 pm

#120 eaglebay – Parksville on 04.09.12 at 5:22 pm

Glad you liked the joke — and glad we’re on better terms. I will do my best to keep it that way.

#121 Poorgoisie on 04.09.12 at 5:43 pm

Yeah, I thought about leaving that out, but wanted to point out that the person who first told me the joke wasn’t homophobic — in retrospect I suppose I could have just said that :(

Glad that you like my posts. I don’t have a lot to say on financial topics — I’m here to read and learn — but it seems that I have strong opinions on other subjects (it’s my American side).

#127 Canadian Watchdog on 04.09.12 at 7:21 pm

#74 Anne “Pom Pom” Rohmer:

Don’t bother with Jurassic Market Bull. He’s just an old man in denial and becomes very aggravated when presented with factual information that he can’t debunk. This is what happens when indoctrinated academics become too reliant on their institutions. They like the status quo and don’t want the public to expose information that they pay for.

It’s a shame. They really believe they are protected and provided with the best information money can buy, yet most of them will fail by miscalculating the unpredictability of policy changes and human nature.

#128 peter on 04.09.12 at 7:50 pm


#129 Daisy Mae on 04.09.12 at 7:52 pm

#77 HERB: “good luck with the eyes. Daughter had the other version….”


This is not an eye blog…

(Sorry, couldn’t resist)

#130 Can it be? on 04.09.12 at 8:01 pm

#118… I saw that house listed and wondered about it… Caught my attention. Is the owner agent going to get charged?

#131 dd on 04.09.12 at 8:26 pm

More money printing from EURO zone.,1518,824808,00.html

#132 Mira on 04.09.12 at 8:32 pm

#118 This is Wonderland

Thanks for the link – sad read! Agree – some homes over M2 do not move – some do….half and half. The ones that sell are priced right (despite the steep price tag). Couple of agents tend to stretch prices beyond believe.
What I am noticing recently, is that the same homes that were listed last year and came off the market are now being re-listed for 10%- 15% less. Struggling to believe the market is going to go up ….. as much as respect my real estate agent.

#133 Mr Buyer on 04.09.12 at 8:38 pm

#125Bobby on 04.09.12 at 6:58 pm
Now is the time to lowball.
2 years from now the panic will be nationwide. There will have been enough time for the reality to sink in, but how should I know really

#134 Mr Buyer on 04.09.12 at 8:41 pm

#117Market Bull on 04.09.12 at 5:06 pm…A complete capitulation to the misguided notion that analogy amounts to analysis.
How about this for analysis. Sales are falling nationwide. The bubble has topped. BUYER BEWARE. NOW IS NOT THE TIME TO BUY A HOUSE.

#135 Mr Buyer on 04.09.12 at 8:49 pm

#83Bond junkie on 04.09.12 at 10:51 am …
Message recieved and understood. I am presently too tired to respond in any reasonable fashion so I will simply say thanks for the information and opinion. THE BUBBLE HAS TOPPED. BUYER BEWARE. NOW IS NOT THE TIME TO BUY A HOUSE.

#136 CrowdedElevatorfartz on 04.09.12 at 8:54 pm

God Bless “newsworthy” items such as Jenna Tackalova.

Civilians in Syria are being shelled, the South Pole is the next Club Med, BPOE is missing, and Garth is posting Harper videos……….

And the only thing on CTV is…………. poor, downtrodden, misunderstood, boycotted “Trans-Jenna-dered” Beauty pagents.

Oh the Humanity !

But I have to admit, the turmoil looks good on “The Donald”

#137 The Thing in the Basement on 04.09.12 at 8:59 pm

276 Disciple from last blog. That is a good question. Of course reserves are supposed to be of a highly liquid nature, so that would include cash, probably 30 day T-
bills, deposits at BOC and a multitude of “others” I guess,
which could mean gold, the irony being that the gold
would be liquidated for cash if needed.

#138 This is Wonderland on 04.09.12 at 9:33 pm

#130 Can it be?

I dont know if he’s being charged but apparently he has done some time for fraud in the states under another name.

Garth, is it true that you don’t have to be a licensed real estate agent or broker to own a real estate brokerage in Ontario.–real-estate-community-in-shock-over-brekland

#139 John on 04.09.12 at 9:43 pm

In 1997 Canada signed a significant free trade agreement with Chile. It was the first one for this country. Now there are many. Mining is the main event.

Although Chile and Canada are such significant partners, I’ve yet to find a single person here that even knows about the Vancouver and Toronto housing bubbles. I found out about it through this blog. Otherwise, the media simply blacks out those kind of dynamics.

On an international level, a housing bubble of an extreme nature in Canada is big news. Especially for significant free trade partners. It seems it only becomes news when the bubble pops. Prior to that, the media seems to be able to successfully cover it up by pretending it isn’t there. And nobody asks….or even thinks about it at all.

#140 };-) aka DA on 04.09.12 at 9:50 pm

“I noticed that DA made a brief appearance recently. He’s still haunting Castanet, spreading lies to all who’ll believe him. I hope he’s still banned here at least.” – #119Ogopogo on 04.09.12 at 5:21 pm

I have not visited, let alone posted on, the Castanet forums in more than two years.

I do not lie . I may make a comment which is misinterpreted by a prejudice audience as a lie – but I do not lie. It’s not what you say which counts so much as what they hear.

#141 This is Wonderland on 04.09.12 at 9:51 pm

#132 Mira

Agreed, however I’m seeing less and less homes priced what they are worth and more of this insanity below.

#142 Canadian Watchdog on 04.09.12 at 9:51 pm

#137 The Thing in the Basement

There are no reserve requirements (RRR) for Canadian banks. They use customer deposits.

#143 The Thing in the Basement on 04.09.12 at 10:03 pm

142 Watchdog – you are correct in that there is no set requirement for bank reserves – phased out in the 90s – see my earlier posts. But they do have reserves (google “finacial statements BMO” etc) But do not
confuse reserves with deposits – fatal error.

If you deposit 10K cash in the bank, it becomes part of their reserves, and you get a credit for a $10K deposit. If I deposit a $10K cheque, I get a $10K deposit, and my bank gets a claim (credit) on the bank that issues the cheque.

#144 Walter Safety on 04.09.12 at 10:08 pm

Life is so confusing. I always felt like an owner since I was about 8 even though most of my friends were renters.
I’m glad I can come to a place like this and be accepted.

#145 Herb on 04.09.12 at 10:12 pm

#129 Daisy Mae,

‘s alright.

#146 getreal-tor on 04.09.12 at 11:38 pm

#118 This is Wonderland

Sadly, I think there are many more stories that will come out once the economy gets hit hard and people try to pull their money from the schemers.

When will people learn that there is no fast way to make money and if someone promises you guaranteed returns, run like the wind… If the government, who prints money, can’t guarantee anything why would you believe john or jane doe?

#147 OkanaganInvestor on 04.10.12 at 12:08 am

#122 mad vancouver on 04.09.12 at 6:08 pm

“No worries there…”

That is a good website, which I have used also.

100 CPM = 1.00 microSeiverts/hr = 2.4 dental X-rays

Anything below 100 CPM is safe and the highest reading so far that I have measured in the Okanagan is 1.71 microSeiverts/hr or 171 CPM on November 12, 2012, which is not safe to be out in. That sample was 0.20 microSeiverts/hr or 20 CPM 24 hours later, thus had a short half-life.

#148 darcy on 04.10.12 at 2:37 pm

Except for those coming from off shore, most of us in Vancouver cannot afford to live let alone buy realestate. No market can be sustained if only .1 percent of the population can afford to purchase realestate. Any wonder why Vancouver is tanking.

#149 Julia on 04.10.12 at 4:51 pm

This email was just sent to me by a friend who is currently house hunting in Toronto: “We made an offer on Thursday – there were 9 other offers! Ours was the best but they declined it because they wanted 100,000 more than what we offered. They have now re-listed their house for 730,000 – originally they listed it at 450,000. Crazy!! We wasted money on a home inspection and everyone else that bid wasted their time, their realtors and possibly money on their own home inspections. Totally wrong, greedy and rude!”

#150 Phumb Ducker on 04.12.12 at 3:46 am

“(I had to peel the protective lining off the steel appliances and fittings in the 4 bathrooms.”

There’s a phumb ducker born every minute.

Oooh!! Stainless, and it still has the original plastic on it. Bull Carp!! (Ya, I said carp. Carp are really just big suckers).

These people are such morons. I feed real estate agents with $3g’s worth of stainless appliances on regular basis as a part of “staging” homes that are for sale. I sell ’em for 2g’s, buyer figures they are getting a great deal and agent ends up pulling an extra 10g’s out of the deal. Agent pulls a grand out of the deal just for knowing me.

Get used to it you ding dong’s, it’s all a great big marketing scam. Everybody wins but you.