‘When nobody wants it’

“My partner and I have 17 listings in all parts of the city.” Jim the realtor says. “Good locations and bad, well priced and not so well priced – and there is no action at all.  Nothing.  I had six opens this weekend and in total say about 12 sets of people.  None asking buying questions, all wasting their weekend looking, but all concerned about the market.

“What is something worth when no one wants it?  From what I can see we are below what most people paid a couple years back, the equity is gone and the price they paid is probably the best they could do and this is in the best of our listings.  The city is starting to feel different. Things here are not going to go well over the next few years.”

As you may have guessed, Jim sells houses in Vancouver. He sent me that note last night, laced with frustration and fatigue. It’s no fun being a salesguy when the buyers leave. No buzz, no adrenalin, no endorphins or sales better than sex. Just a question, which is actually more of a lament, “What is something worth when no one wants it?”

Trinity’s been looking for digs to rent in Toronto, and I fingered a guy to help her. “We just found a place!” she says. “It’s an apartment on St.Clair that is safe, clean and has a pool. It’s in a high-rise, which was not our first choice but both of us were amazed at the lack of quality apartments that are reasonably priced.”

She’s been searching for a couple of months, and adds this: “I have lived on my own in Toronto since my youth and have never had a problem finding a great place. This time around, for the first time I saw older people looking at rentals and families — not the usual 20 somethings.

“I can only think that this is a reflection of our economy and state of the housing market.  When speaking with my peers, no one has received a raise in 4 years — and yet the cost of living continues to go up. I have walked away from this experience quite scared, and wondering what is going to happen in Toronto?”

By the way, Trinity and her husband – she’s a TV producer and he’s a musician, both in their 40s – figure they’ll never afford a house in 416. “This is the screwed generation,” she grimaces.

Yesterday I referenced a report by the US Fed showing average net worth in the States plunged by 39%, mostly attributable to real estate. It was a middle class thing. Rich people actually did better and poor people stayed poor. It was the homeowning, working families who got squished over the last few years.

Officially this is not happening here. Most real estate boards report bustling sales and year-over-year price hikes. The TD Bank made headlines with a report forecasting a modest 15% decline in Vancouver and Toronto over the next two or three years, while taking pains to say there will be no US-style crash. The myth of Canadian safeness is perpetrated at every official turn. Looking in from, say, Erie PA or Spokane WA, you’d wonder how a country just like yours could function when house prices were double, yet people earned the same.

A thesis of this blog is that the myth won’t last, as what’s unfolding in BC and swaths of Ontario becomes ubiquitous. BC prices have fallen enough already, for example, to put people who bought a year or two ago with scant equity, under water. The same will happen in Saskatoon and the subject of tomorrow’s post, Winnipeg.

In Toronto, the cascade lower will be uneven as condos wilt disproportionately, wiping out surprised property virgins, while SFHs in leafy North Toronto – already averaging over a million each – resist longer. One lesson Americans learned over the past half-decade is the stealth nature of risk. Everybody said “it’s different here’ in Miami and suburban San Francisco, until it wasn’t. They said that a year ago in downtown Vancouver and two summers back in Kelowna, where sellers now die of loneliness.

Similar days are coming to Waterloo and Regina, when they’ll know how people in Windsor and Penticton feel. Every market us unique, but the same. The outcome will be fifty shades of grey.

And speaking of smut.

For decades there’s been a pub in suburban Victoria and a week from tonight, the strippers arrive. Ma Miller’s Pub will join a number of others in the province which is trying to stave off financial disaster with sex (a lesson this pathetic blog learned long ago). “It’s not just old perverts that go to these places,” says the operator, Dan Stephenson. “The landlord is not impressed that I’m going this route either, but it’s down to survival mode now.”

When people stop drinking in a place where houses cost $600,000, can the end be far off?

Meanwhile in Kamloops, Curtis Allen has resorted to alcohol to try to sell a condo nobody wants. “I was sitting around thinking, this house is a real pain, it’s not getting nearly as many views as I would like. How am I going to attract people to this house?  Well I was drinking a beer at the time and I thought why not just give away beer for a year?”

So, he is. Beer’s on him at the open house next Saturday, and if you want to buy the place and drink yourself into a stupor trying to forget you scored a butt-ugly three-bedroom condo in Kamloops, then go here.

Still think we’re special?

235 comments ↓

#1 miked on 06.12.12 at 8:15 pm

1st bam

#2 maven19 on 06.12.12 at 8:26 pm

free beer, how enticing

#3 TurnerNation on 06.12.12 at 8:30 pm

Here’s a $540,000 junky bung!! Who wants to be a 1/2 millionaire.

http://www.theglobeandmail.com/life/home-and-garden/real-estate/91100-bonus-wins-west-toronto-home/article4239243/?cmpid=rss1

#4 Vancouverite on 06.12.12 at 8:32 pm

Banks go on appraisal alert in a volatile housing market

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

#5 dr.dr. on 06.12.12 at 8:33 pm

This is only the beginning. It will be a long downhill slide for many.

#6 Derek R on 06.12.12 at 8:34 pm

Okay, Mr Turner, grit your teeth because it’s time for the GarthFAQ again. Updated with a few suggestions from the blog dogs (Thanks all!) but otherwise much the same…

The GarthFAQ is for anyone who’s puzzled by one of the following terms or feels the need to ask a few common questions.

Glossary
—————-
416 — The City of Toronto.
Amazons — Beautiful warrior women, kept by Garth at the Bunker to type articles, keep things shipshape, throw out trouble makers, and generally make Garth happy.
Bandit — Garth’s faithful hound.
BPOE — The Best Place On Earth, as it’s known to some of its residents. The rest of us just call it Vancouver.
Blog Dogs — Garth’s faithful followers.
Boomers — Anyone over the age of 50.
Bunker — Garth’s home and refuge for the time when civilisation collapses.
C — Mark Carney, Governor of the Bank of Canada.
CMHC — Canada Mortgage and Housing Corporation which insures mortgages for the banks.
Depends — Adult diapers.
Doomers — Anyone who thinks that civilisation is about to collapse, hyperinflation is just around the corner, house prices are going to crash, the Leafs are about to lose a game, etc.
Dorothy — Garth’s wife and Queen of the Amazons.
ETF — Exchange Traded Funds.
F — James Flaherty, Minister of Finance.
G — Garth Turner
GFC — Global Financial Crisis.
G-man — Garth Turner
Gold — Magical material which, it is rumoured, will protect you from poverty when civilisation collapses, hyperinflation arrives, house prices crash, the Leafs lose a game, etc.
GTA — Greater Toronto Area.
H — Stephen Harper, Prime Minister.
HAM — Hot Asian Money, allegedly ill-gotten gains used by Asian immigrants to buy property.
Harley — Garth’s favourite brand of motorcycle.
HELOC — Home Equity Line Of Credit, bank loan backed by house as collateral.
Horny – Desperate to buy a house.
HouseAgeddon– The time when house prices fall.
Hummer — Garth’s main mode of transport.
Lawn Ornaments — People hired to look like eager buyers at an Open House or other buying event.
MIL — Mother-in-law.
MSM — Mainstream Media. Television, radio, newspapers, books and websites controlled by The Powers That Be.
Orange Guy’s shorts – ING Bank’s high interest savings account.
Porn — Films or articles or pictures intended to make people want to buy houses.
POS — Power of Sale or Piece of Sh*t.
Preferreds — Preferred shares in banks.
REIT – Real Estate Investment Trust, an organisation which rents out buildings and pays the rent to its shareholders.
Rule of 90 — The principle that you shouldn’t have more than (90 – YourAge)% of your net worth in housing.
QE — Quantitative Easing. Roughly speaking this is when the government borrows, using low-interest short-term debt, to give it enough cash to pay off its high-interest long-term debt. Similar to a homeowner borrowing from a low-interest HELOC to pay off high-interest credit card debts or car payments.
SFH — Single Family Home.
Squirrel recipe — It is important to be prepared. Some people are better prepared than others. Those who are well prepared have a month’s supply of canned beans. Those who are really well prepared own a Bunker. Those who are really, Really, REALLY well prepared have already googled for and printed off their squirrel recipes, Just In Case. See Doomers.
TPTB — The Powers That Be. Those who shape society and attempt to control it. Includes the Government, the Bankers, the Corporations, the Communists, the Illuminati, the Lizardmen and Mothers-in-Law.
Tin Foil — Magical material which, it is rumoured, will protect us from mind control rays when made into a hat. Recommended by those who believe that The Powers That Be are out to get us.
TH — Town House
[email protected] — The Nice Lady At The Bank.
VanCity – Vancouver.
Virgins — People who do not yet own a house.
Vultch — Wait while house prices drop to the bottom like a vulture waiting for a wounded animal to die. Or buy at that point like a vulture feeding.
================

Frequently Asked Questions
—————————————————-
Why does Garth hate Gold? — Garth does not hate Gold. Garth loves balanced diversified portfolios. He advises that Gold should be between 5% and 10% of a person’s net worth. Anything more is too risky. See Doomers.

Why does Garth hate Real Estate? — Garth does not hate Real Estate. Garth loves balanced diversified portfolios. So he advises that Real Estate should be no more than 60% of a 30 year-old’s net worth and no more than 30% of a 60-year-old’s assets. Anything more is too risky. See Rule of 90.

Does Garth write the emails, he says that he receives from the general public? — No. He doesn’t need to.

Why does Garth love balanced diversified portfolios? — Garth knows that prediction is very difficult, particularly if it involves the future. Since predictions will not necessarily come true, he advises that people do not put all their eggs in one basket, or all their investments in one asset. When investments are made in more than one asset, a drop in the price of one asset may be balanced by an increase in the price of another asset. In particular the price of bonds tends to drop at the same time as the price of shares tends to rise. And vice-versa. So a portfolio of assets needs to include a balance of bonds and shares in order to reduce the risk of the owner predicting the future wrongly.

Does Garth believe that Renting A House is always better than Buying A House? — The simple answer is “No”. The complicated answer is “Garth believes that it depends on how much the house costs when you compare the total cost of renting (which includes rent, contents insurance and possibly utilities) to the total cost of buying (which includes mortgage interest payments, property taxes, reno/repair costs, building insurance, contents insurance, utilities, opportunity costs on the house equity, changes in local house prices, and the cost of buying and selling the house)”. At the moment in Canada’s major cities, owning a house costs much more than renting it, particularly in Vancouver, Toronto and Calgary. However there are a few cities and some rural areas in Canada where Buying is still better than Renting. It is unlikely that you live in one of those places. In fact at the moment the chances are extremely good that you live in a part of Canada where Renting is better than Buying.

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

#7 VICTORIA TEA PARTY on 06.12.12 at 8:37 pm

THE BIG “FUDGE” WILL SAVE US ALL! IN OUR DREAMS

Debt.

It’s everywhere, like fleas and other pests.

Can’t get rid of it!

Pay off a bill and next month back it comes! Why? Because you’ve spent more that you have, and you’re angry at yourself. The debt treadmill keeps on keepin’ on.

We know things are bad in these parts when a pub has to join the “skin” game. That’s sad.

SO WHAT’S THE SOLUTION TO ALL THIS DEBT?

Why NO DEBT AT ALL! So, how does that work?

Gather round all you conspiracy theorists.

In light of the Langford pub, Greece, Spain, Italy, the US, insolvent banks and wrecked housing, there must be a better way of solving this problem than by imposing austerity and actually paying down the debts.

What’s needed is a full-on default. Could that be what our betters at the IMF, the Fed, the ECB, and so on, are up to?

Sure! They’re probably packing around personal debts that they can’t shake, too!

It does not defy credibility to suppose that deep within the world’s central banks and other financial lairs that some formula is being shoveled together; a Frankenstinian monster of debt relief forever for one and all.

BUT THE MAIN OBSTACLE

is how to satisfy the lenders.

If the borrowers, just about everyone, can “just say no” to repaying debts, then the lenders have got to be persuaded to “just say yes!”

So who’ll be the patsy in this connivance?

That’s the issue. Will it be taxpayers? Because that’s about it.

Or will lenders get some “real assets” as compensation, perhaps whole countries and everything and everyone residing within. Those would be slave-states! But the obligations would have been satisfied until the next debt is made about a millionth of a second after such deals have been struck.

THAT’S THE “FUDGE” FANTASY” OF OUR DREAMS

The reality is that this won’t happen. So it’s back to crooked bookkeeping, and other sleights of hand also known as “fudging the books.”

It’s a heck of a way to “run a railway.”

#8 Editor on 06.12.12 at 8:41 pm

According to realtor.ca, the N3 area in the south central York region north of Toronto had a surge of listings post-Victoria Day. Seems like they mostly vanished over the weekend. How can that be — a dozen houses in a given small area sold in 3-4 days? Really? The FOR SALE signs seem to be up everywhere, so what gives?

#9 $B$P$O$E$ on 06.12.12 at 8:43 pm

One could posit the Conservatives set the middle class up for their own purposes in an aptly named long con.

Using cheap credit cynical fundamentalists from Alberta could see the manufacture of almost instant wealth and millionaire status in the real estate market for even the most menial of the working class. How could they not, they and their fundamentalist brethern to the south watched the exact same scenario play out from 96-07 down south. Like with most trends, Canada with lo most of its population living 50 miles from the USA is still so slow it takes 5 or so years to catch up with whats going on in America

And nothing creates contempt faster for those less fortunate than oneself than instant wealth. Especially in as shallow a gene pool as Canada.

Having created a class of “wealthy” by their own bootstraps and hard work types that previously didnt exist. It was easy for the cons to whip up a class frenzy of contempt for any societal responsibility and especially for any intellectual snooty government teat sucking bastards.

Result. A majority government whose sole goal it appears is to dismantle every part of the societal system that created an incubator for the middle class to thrive. And who benefits. The very very wealthy. Not any of you reading this with your paper millions. But real money.

In five years the corpse of the Canadian middle class will be a bloated fetid mass of meat on the side of the road. The long con will have run its course. The structure and support for those most in need will be dismantled. But the prisons will be thriving.

And The Harper Government will be remembered as the worst, most hated and most destructive prime minister since Charles Tupper.

#10 J in Calgary on 06.12.12 at 8:45 pm

That townhouse looks like someone put lipstick on a pig. I wouldn’t give this guy $70K for that shack. Even if he gives me a 6 pack a week for a year. I would need twice that amount to forget how stupid I was for buying that place. And maybe some tequila too!

#11 thinker on 06.12.12 at 8:48 pm

Great stories, but reality is different Garth, no sellers are panicking and prices are not lower.

Wake me up when that ever happens

#12 Just Say No on 06.12.12 at 8:48 pm

free beer! that is too funny but maybe just the beginning?

#13 Jay Currie on 06.12.12 at 8:50 pm

He’ll probably have the Liquor Control Board as the first visitor – free beers…in Canada…surely illegal.

#14 MrHulot on 06.12.12 at 8:52 pm

I can confirm the RE situation in West Van as “DEAD” according to a forthright MacDonald Realty agent over a beer in a local bar. He says no one is calling. Half the realtors in the office are not even bothering to show up for work. And this, during traditionally the busiest selling time of the year. The bubble has burst.

#15 House Horny Housewife on 06.12.12 at 8:56 pm

Tell Jim that everything has a price, EVERYTHING.

He needs to stop looking at what people paid for the place (as this is completely irrelevant for successful price setting) and start looking at what recent sales went for .. not sales two years ago but the most recent sales. And I’m talking truly comparable properties.

Once he begins looking at this instead of some sort of fantasy world where you are guaranteed to get back what you put into it (houses don’t work that way), then he will be on the right track.

Open houses are completely USELESS and only attract nosey people who want to find something to do on a Sunday afternoon. An agent open house is a bit better since a buyer’s agent has something to gain by matching their client with the right house. You need to know what kind of buyer will like your house and try to target them.

Serving free beer at open houses and all of that stuff is the stupidest thing I have ever heard and is destined not to work. Do you think that a serious buyer really gives a crap about getting a free beer at an open house ? Buyers know what a property is worth and most of them know what kind of house they want.

You either price it right and present it to the right crowd or you waste your money and time serving free beer to the entire neighbourhood. Not to mention possibly getting arrested as I am not sure this is quite legal.

HHHW

#16 Onemorething on 06.12.12 at 8:58 pm

“What is something worth when no one wants it?”

Dont worry everyone, the value can at the very worst can go to zero! It works for stocks and Vegas! Well actually someone usually picks up the company so the stock might only loose 98%.

I repeat, the value of your home today is a variable, the debt is constant!

#17 Jon on 06.12.12 at 9:02 pm

I don’t think there is any correlation between bars failing and the economy. It has to do with the changes in the DUI laws.

But yeah the lower mainland is screwed. Epicenters Vancouver and Maple Ridge.

#18 TaxHaven on 06.12.12 at 9:04 pm

“What is something worth when no one wants it?”

At the right price, demand is infinite…sooner or later sellers will get desperate enough to understand that.

#19 Pr on 06.12.12 at 9:10 pm

…but all concerned about the market…

JUST SEARCH ON GOOGLE: canada housing bubble
Recherche
Environ 20 100 000 résultats (0,19 secondes)

#20 Smoking Man on 06.12.12 at 9:13 pm

A Fishermen’s tail.

A fishermen invests in boat, a rod, and has an arsenal of lures in hopes of catching the big one.
Like the entrepreneur he sails his boat to wherever he feels the fish are biting, sets his lure and waits, gets a nibble and with skill sets the hook, then has a ton of fun reeling the suckers in.

He then gets the beggar slaves to kiss his ass by offering up small bits of fish. The slaves will do almost anything to be worthy in the eyes of the fishermen in hopes that he gives him a bigger piece of fish sometime in the future, while at the same time the fishermen is actively looking for a replacement slaves that will work harder for smaller portions of fish bits.

The beggar slave, be it the dock hand, the waiter, the teacher are generally unhappy with what they do, they try and convince themselves that it’s ok, everyone else is in the same small boat, but they know something is wrong but can’t put their finger on it. That would require critical thinking. Sucked dry in high school.

Beggar slaves long to take a shot at sailing in the sea, but have been talked out of it by other fearful beggars, what if you hit a storm, what if you catch no fish, what if, what if. The other beggars secretly hate fishermen, while longing to be one.

Now if everyone was a fishermen, who would shine shoes, wash the boat, or cook the fish.

Way back in time there was too many fishermen, and not enough beggars, so a few smart fishermen got together and invented school. The ultimate beggar making machine. The big plus is the beggar slave never gets this lesson and less competitors for the established Fishermen.

The dock hands now shine a boat with the latest technology better than ever, and the teachers will insure a constant large fresh stock of beggars slaves for the fishermen’s enjoyment.

To add insult to injury, the beggar pays for this obedience training with small bits of fish he’s slaved over, that he borrowed and now needs to pay interest in more fish bits.

The beggars always complain about the fishermen, the banks, the Re-Agents, and hookers, but never even consider buying or building a boat.

Now in life we have teachers, anglers, and hookers.
Which one disserves our contempt. The entrepreneurs?

And a true beggar slave will despise anyone who tells this fishy tale.

#21 Can it be? on 06.12.12 at 9:14 pm

I can confirm things have drastically slowed down in the GTA unless people are open to significant price drops. People acknowledge the top is over and it’s time to sell quick before prices go down. Many price drops already an many more to come soon in the next month. If you are patient … You will reap the rewards.

#22 Dan in Victoria on 06.12.12 at 9:18 pm

Ah yes Ma Millers pub. I’ve been known to hoist a few in there over the last 30 or so years.
That place has been there forever and I’m surprised that its in trouble.
Too bad, actually used to sit down in the corner by the fire place years ago.
I think it had the oldest or longest operating liquor license in BC (Correct me if I’m wrong)
My other old favorite only a few miles away “The Colwood” (great old building) was recently cut into pieces and moved a couple of blocks away.
My grandfather and his brothers would roll over in their graves seeing that go.
Times are a changing.
Survival mode is rapidly approaching in BC.

#23 Mr Buyer on 06.12.12 at 9:19 pm

#11 thinker on 06.12.12 at 8:48 pm
Great stories, but reality is different Garth, no sellers are panicking and prices are not lower.

Wake me up when that ever happens
………………………………………………………………
Buyers are panicking. Cannot flip it and cannot afford it. Wake up, it is over.

#24 Soylent Green is People on 06.12.12 at 9:22 pm

Only Harper fingers guys.

Google Ray Novak, he used to live in Harper,s backyard.

.
.
.
.
.
.

#25 AprilNewwest on 06.12.12 at 9:29 pm

#4 Who are these people writing these reports. “…market
deemed at risk of overheating”??. Are we not now in the cooling stage in most of Canada……….

#26 Jan on 06.12.12 at 9:35 pm

In Richmond bc listings are swelling by the day and prices are dropping daily but you won’t hear that form r.e pumping global tv.

Today’s New Listings:

Name
Address
City
Price
Lot Size
Flr Size
Bd Rm
Office
Listing Date

Lan Hoang/ Breton Lee
102-1205 5th Av
NW
$ 295,000.00
APTU
850
2
Kingsway
11-Jun-12

Sidney Fong
2103 6088 Willingdon Ave
BU
$ 366,000.00
APTU
769
1
Kingsway
12-Jun-12

Eugene J Pyo
3102 928 Homer Street
VA
$ 424,800.00
APTU
534
1
Oakridge
14-Jun-12

Angela Cheng
701-9171 Ferndale Rd.
RI
$ 446,000.00
APTU
1023
2
Oakridge
11-Jun-12

Josh Zheng
809-8068 Westminster Hy
RI
$ 449,000.00
APTU
812
2
Oakridge
11-Jun-12

Angelo Wang
1112 161 West Georgia St.
VA
$ 449,900.00
APTU
601
1
Oakridge
12-Jun-12

Allan Lee
1203-6282 Kathleen Ave.
BU
$ 459,900.00
APTU
1168
2
Oakridge
7-Jun-12

Kuljit Sandhu
14921 93A Av
SU
$ 478,000.00
60×120
2033
4
Kingsway
12-Jun-12

Allan Ge
502-4808 Hazel St
BU
$ 552,000.00
APTU
10332
2
Riverside
11-Jun-12

Francis Leung
11208 Bonson Rd
PM
$ 579,800.00
4843
2542
3
Kingsway
12-Jun-12

Caroline Fong
1201-125 Milrose Ave.
VA
$ 599,000.00
APTU
1102
2
Oakridge
11-Jun-12

David Kim
603-5657 Hampton Pl.
VA
$ 748,800.00
APTU
1207
2
Oakridge
11-Jun-12

Tim Wong
2159 2nd Ave. E
VA
$ 968,000.00
33×122
2400
5
Oakridge
9-Jun-12

Roy Gaspar
4064 Pandora St
BU
$ 1,148,000.00
50×122
2600
5
Kingsway
10-Jun-12

Eric Ho
3108 Whitehorn Court
CO
$ 1,188,000.00
HOUSE
4424
6
Oakridge
13-Jun-12

Yuko Shih / Angel Shih
870 61st Ave.
VA
$ 1,396,000.00
30×122
2117
4
Oakridge
11-Jun-12

Gregory Lee
4522 12th Ave.
VA
$ 1,580,000.00
33×122
2360
5
Oakridge
12-Jun-12

Kevin Mak
3260 Tolmie Ave.
RI
$ 1,750,000.00
50×100
2719
4
Oakridge
10-Jun-12

Winnie Chung
4438 Haggart St.
VA
$ 2,580,000.00
57×120
2700
5
Oakridge
11-Jun-12

Sonya Chang
2032 W.29th Ave.
VA
$ 2,650,000.00
55×107
4100
8
Oakridge
12-Jun-12

Jeffrey Li
1075 Crestline Rd
WV
$ 2,680,000.00
20123
2602
3
Kingsway
15-Jun-12

Jeffrey Li
1110 Millstream Rd
WV
$ 2,950,000.00
21998
3070
4
Kingsway
15-Jun-12

Today’s Price change:

Name
Address
City
Price Change
Price Goes

Joe Tang
106-8291 Park Rd.
RI
$ 225,000.00
Down

Tenny Chui
120-8500 Lansdowne Rd.
RI
$ 240,000.00
Down

Bobby Seah
1101-9888 Cameron St.
BU
$ 314,900.00
Down

Lulu Zheng
1001-39 6th Street
NW
$ 402,000.00
Down

Joe Chiang
1208-7360 Elmbridge Way
RI
$ 489,000.00
Down

Robin Fu
7439 Hawthorne Te.
BU
$ 608,000.00
Down

Winnie Chung
Th6 2088 Madison Ave.
BU
$ 658,000.00
Down

Sanee Pun
314 525 Wheelhouse Sq.
VA
$ 773,000.00
Down

Sophia Cai
6740 Cairns Ct.

$ 898,000.00
Down

Bobby Seah
1431 Noons Creek Dr.
CO
$ 899,900.00
Down

Carol Wu / Vicky Kao
603-728 W.8th Ave.
VA
$ 998,000.00
Down

Victor Leung
17 W.41st. Ave.
VA
$ 1,270,000.00
Down

Lawrence Lau
6600 Chelmsford St
RI
$ 1,390,000.00
Down

Lawrence Lau
3101 Plateau By
CQ

This message has been truncatedShow Full Message Photosimage001.png Download AllDelete ReplyReply ForwardSpamMovePrint Actions NextPrevious

#27 Raj on 06.12.12 at 9:37 pm

#8Editor ,

I am seeing the same thing in North York as well.
Looks lke their database has crashed :)

#28 TakingResponsibility on 06.12.12 at 9:53 pm

#9 $B$P$O$E$ on 06.12.12 at 8:43 pm …

That was one chillingly succinct analysis. Hear. Hear.

#29 Editor on 06.12.12 at 9:54 pm

#27 Raj – others – think they’re overloaded – or were they never really up to date? The online data doesn’t match the street signs.

#30 neta on 06.12.12 at 9:58 pm

Canadian middle class is priced-out
Gov-t needs to lift restriction on Business immigration to keep HAM flowing

#31 Observor on 06.12.12 at 10:04 pm

STRIP PUB CLIENTS

“It’s not just old perverts that go to these places,”

..yeah, lots of young ones too…

Actually there is NOTHING perverted about looking at the opposite sex naked. It’s hard wired into us.

#32 John in Montreal on 06.12.12 at 10:10 pm

I wonder… how reluctant are the banks going to be when it comes to lending for mortgages once the demographic boom is in full swing and, if that scenario plays out, meaning that the market is flooded with older bungs and condos plus all the newly built ones?

Prices will fall, for sure; but would a bank lend if it then becomes so hard to sell a property in the future?

#33 Erika on 06.12.12 at 10:12 pm

#8

I am also seeing this in Mississauga.
Been looking in the range of $700000
to $900000. Yesterday there was
175 listings today there is 103.
This just makes no sense.

#34 45north on 06.12.12 at 10:12 pm

BPOE: One could posit the Conservatives set the middle class up

you could also say that the NDP and Liberals failed to warn the Canadian people

and you could say that the BPOE contributed to the massive mal-investment in real estate by belittling and mocking those that did warn Canadians

#35 Chaddywack on 06.12.12 at 10:12 pm

I’ve also noticed another thing in Vancouver. When a house sells the realtors keep the sign up with the SOLD sticker on it for a lot longer than they used to!

#36 Davey Boy on 06.12.12 at 10:13 pm

I think Ma Miller’s Pub might experience a brief increase in business, going the stripper route, but only short lived. In the 80s in Vancouver there were strip bars everywhere downtown, almost always busy. Now only a few remain, like the #5 Orange. It’s seldom busy, I guess it’s a combination of high prices (cover charges expensive drinks) and the advent of the internet where anything can be viewed for free.

#37 Canadian Watchdog on 06.12.12 at 10:16 pm

Chart: REBGV Daily Stats http://postimage.org/image/fuhpbu4j5/

When banks see price change activity increasing and sellers getting desperate, they will refrain from lending more since they don’t want depreciating assets on their books. This is a negative feedback loop that makes the situation worse.

You’re next Toronto.

#38 Foggy on 06.12.12 at 10:16 pm

With the “purchace” of my townhouse? Maybe use some of the money to take a course in elementary spelling.
That house has all the charm of a rental storage unit. That fellow has a good eye for value. All I can say is: Dude – take my advise and don’t be such a looser….

#39 Fabrega on 06.12.12 at 10:17 pm

#22 Dan in Victoria

BC is a train reck waiting to happen. Meanwhile the “New Era” clown is sipping whisky in London wasting our tax dollars.

#40 Honus Wagner on 06.12.12 at 10:18 pm

@J in Calgary: Hey now, I think you’re negotiating? :)

#41 Fabrega on 06.12.12 at 10:19 pm

Garth,

Have you been to the grocery store lately? I find your talk of deflation quite funny.

Asset deflation and price inflation can co-exist. It’s not funny. — Garth

#42 MarcFromOttawa on 06.12.12 at 10:22 pm

Very misleading advertising with the “Free beer for a year”.

Or

Free beer promotion details:
The current owner and seller of Unit 346, 1780 Springview Place in Kamloops BC will purchase the buyer of his townhome a 6-Pack of beer every week for one (1) year. The total amount to be spent on beer every week will be determined by the seller based on the average price of a 6-Pack of beer in the Sahali Liquor Depot Store. Once a sale on the house has been completed and money changed hands, the seller will purchase gift cards for the buyer for the liquor store of his or her choice. These gift cards will be given out all at once, after purchase on possession day. Cash can be given to the buyer for the same amount as would be spent on beer should the buyer request this option.

10$ x 52 weeks = 520$ only.

#43 Led on 06.12.12 at 10:24 pm

“Trinity’s been looking for digs to rent in Toronto, and I fingered a guy to help her”

I am chuckling at this one like I am in grade 6 all over again.

Are you thinking back fondly on last year? — Garth

#44 Guy in the orange shorts on 06.12.12 at 10:26 pm

I coulda been FIRS zzzzzzzzzt, but I let the reaL LOSERS GET AHEAD….

#45 obert on 06.12.12 at 10:28 pm

In Detroit houses went to USD 1.
As long as you promised to maintain the thing and pay property taxes etc.

#46 Observor on 06.12.12 at 10:30 pm

AVERAGE AMERICAN FAMILY NET WORTH IS DOWN 40%? REALLY?

So, let’s review. Americans first got vastly richer by merely selling their houses to each other at ever higher prices until 2007…

Even if you never sold your house your net worth was rising back then. Heck your house made more than you did some years!

Then they got poor when the price of houses went down.

The FED printing money has NOTHING on this house bubble process. The house bubble created vast wealth from thin air and then the crash made that wealth vanish back into thin air.

Meanwhile, the typical actual physical house is not much different than it was in 2007. All existing houses got five years older. But a lot got renovated and a lot got built.

The truth is for America as a whole the physical housing stock has not changed much. Yet five years ago it was considered that a typical house was worth say four times a policeman’s salary and today the same house is worth only maybe two times that policeman’s salary. America’s true physical wealth has really not changed much as a result of the housing crash and yet somehow it is considered to have gone down 40%.

It’s all a bit of a brain teaser to think about. A few stiff drinks may help.

House values fall but the debt incurred buying those homes remains. It destroys net worth. You forgot that part. — Garth

#47 Marco on 06.12.12 at 10:30 pm

A few months ago I went to the bank to see how much of a loan I would qualify for (no intention of buying, just out of curiosity). After all the paper work was done I was eligible for about 650K. I have never owned a home and am in my late 20’s. I was appalled they would ever lend a guy like me that kind of cabbage and a told the banker exactly that. No wonder the housing market is screwed, mindlessly giving out massive loans.

#48 John on 06.12.12 at 10:32 pm

I think as we see the bubble unfold, the comment made by Nostradamos Le Mad Vlad applies:

“If the cash crunch is getting to be that bad (which it is — the withdrawal of money by deflation and other means), then taking care of myself and paying my own bills and staying out of debt would be at the forefront of my life.”
————–

I’m like you in believing this is the bottom line. Being responsible for yourself in an unknown and uncertain world.

My concern is the notion of “solution” being cashing out and investing as a full stop. The challenge with this is that it reinforces the same system we’ve had that has led to this. It might be safe to say that the system is wonky enough that there really isn’t a way to “balance” resources in a “net worth” context…and there needs to be more consideration of this.

There isn’t anyone ( realizing the truth about Canadian real estate dynamics) who would not try to get out of debt and into a “balanced portfolio”. Everyone would at least try. Agreed.

But the current situation is literally begging for answers…understanding…community. The idea of security without mention of this isn’t realistic. It adds to the uncertainty by not opening the scope up to include what’s really going on.

Not dealing with the paradigm shift that seems to be upon us opens up strong financial vulnerability.

Great links…really valuable. Wouldn’t you think the sum-up is “paradigm shift”? What might (or could) that look like?

Nobody can perfectly manage risk…but suggesting the unmanageable can be managed, without also including some emerging and glaring facts, closes the door to something better than what got us here.

#49 its starting .. on 06.12.12 at 10:36 pm

#8 Editor

I found the same result when I did my saved searches on MLS.ca for Yonge and Sheppard / and North Toronto

On Monday I had 60 /47 propertires SFD , today 20/ 12.
I asked my realtor friend WTF and he told me that they were told to remove listings that were over 30 days old. They don’t want to flood the market.

#50 MJG on 06.12.12 at 10:38 pm

@#9, Bravo.

#51 Dan in Victoria on 06.12.12 at 10:40 pm

Fabrega @ 39
Train Wreck is polite.
Nothing more than a glorified pyjama party.
Want to have your blood boil ?
Read this.
http://alexgtsakumis.com/

#52 sluggo on 06.12.12 at 10:43 pm

The canary. CDS problems beginning to surface.

“California-based First American Financial Corp. had been selling Canadian banks a “guaranteed valuation” product that guaranteed the valuation of a property was accurate on the day a mortgage was issued. If it turned out later that it wasn’t, the bank could make a claim.”

But First American posted a first-quarter loss in 2011 as it took a $45-million reserve strengthening charge relating to this obscure Canadian product.”

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

Someone better let Ed Clark know.

#53 HD on 06.12.12 at 10:44 pm

#6 Derek R

That was awesome! Thank you very much :)

#54 Tron on 06.12.12 at 10:46 pm

It is interesting how a couple of economists from TD can say the market will drop 15% this year and get tons of press. WTF? If these two can make such predictions they have either travelled in time or are just making it up. With such refined prediction skills why would they not be able to tell us what stocks to buy? Probably because there are regulations protecting the public from hucksters.

Not one person knows for sure where the market is going to be in two years relative to where it is today. Markets are either going up or down and right now the RE market in Vancouver and other parts of Canada are going down. Why? Because the market works on supply and demand and the supply is shooting up without much demand. The third element to this equation is price and the laws of economics kick in here with the price going down.

It is mental masterbation making the % up/down predictions and these two from TD probably just love to see their names in print.

Thanks. It’s Tron, right? — Garth

#55 PropertyGuy on 06.12.12 at 10:47 pm

@ #8 and #33:

No – There was no sell off of 20% of the inventory over the weekend!

Yes – TREB has a bit of a crisis today – Many TREB listings now not showing on Realtor.ca – I have heard that they are working on it.

#56 meslippery on 06.12.12 at 10:48 pm

Maybe its just me but going to a bar to pay 250% or
more for a beer(based on the beer store price) and not be able to have a smoke with it,
well I already have a girl so no thanks.

#57 Tanya on 06.12.12 at 10:49 pm

#41, re: simultaneous inflation/deflation.

Just look at the US: Housing/wage deflation + stock market/PM/food/energy inflation.

Absolutely the two can co-exist.

#58 $B$P$O$E$ on 06.12.12 at 10:52 pm

@45North
“you could say that the BPOE contributed to the massive mal-investment in real estate by belittling and mocking those that did warn Canadians”

When the editors of newspapers are Fraser Institute stooges and major “objective” media commentators are going from the studio to the Senate in about as much time as it takes to fart…

Never mind the vested interest of the news hosts, producers, radio jocks and fish hacks who were watching their own assessments arrive each year to reassure them of how much better and smarter they were than the minions eating cake.

and the HELOCS, OMFG the HELOCS…. who here hasnt suffered the smug stories at dinner parties of cars, trips, remodels and baubles bought and flaunted.

But who has time to care about facts and critical thinking and how history has an ABSOLUTE CERTAINTY of repeating itself when you’re showing off the new kitchen and the wifes new rack.

Blowback…. its not just for intelligence agencies anymore.

#59 furst on 06.12.12 at 10:52 pm

Gettin’ back to those from the previous post.

Lahey: You rock as usual, a superstar among superstars

HD, John_G_Young, Retired_Boomer, Le Mad Vlad, Blase: You keep reading, I keep writing :)

Jamaican_gal: You have the heart of a poet, I can tell. Let go and be free ;)

Michelle: Thanks! I have a day job, very corporate. I make up the poems on the spot, more spontaneous and natural that way.

Karie: Yeah, hear that Garth? Karie’s not buying your book unless you include me in it. Royalties please?

Carpe_Diem: I’m no realtor but this I can say
Your poetry is as appealing as Guantanamo Bay
Flows like rush hour, on the Gardiner
Don’t worry, I’ll help and call the Pardoner
Apologize for the crime of your couplets not rhyming
You’ll be forgiven for the lack of poetic timing
Insult me again through rhyme, but do it with wit
I won’t take it personally, not even a bit ;)

#60 PoorgEoisie on 06.12.12 at 10:56 pm

I knew it! Illuminati fisherman
E Pluribus unum B’i

#61 White Rock Renter on 06.12.12 at 10:58 pm

Beer eh? Late last year while doing some Christmas shopping near Burlington, WA, I saw an open house sign advertising “free donuts!”. Ha!

#62 coastal on 06.12.12 at 10:59 pm

By golly it looks like he has a stripper pole in the basement. Maybe he should hire one for the open house. According to the Ma Miller guy, more women than men show up these days for the peelers so maybe he’ll get lucky one way or the other. :)

#63 XKR on 06.12.12 at 11:01 pm

@ #9. “In five years the corpse of the Canadian middle class will be a bloated fetid mass of meat on the side of the road.”

Shocking imagery. I would agree with you but it’ll take more than five years to get to the corpse stage. Try twenty, a good generation. That should do it.

#64 GTA REALTORS IN A PANIC. on 06.12.12 at 11:03 pm

REALTORS in a panic pulling listings off the market in hopes greater fools in the GTA don’t realize the housing crash is in full effect. Realtors keeping old sold signs up longer and removed for sale signs as they were unable to sell.

#65 Not Even the MSM Believes the RE Index on 06.12.12 at 11:06 pm

#28 TakingResponsibility on 06.12.12 at 9:53 pm #9 $B$P$O$E$ on 06.12.12 at 8:43 pm …

That was one chillingly succinct analysis. Hear. Hear.
++++++++++++++++++++++++++++++++++++

Falling for Mulclairs idiocy it appears. Mulclair is the most cynical, self-serving transparent moron I’ve seen since… since… since… (insert Liberal leader name here).

I have no respect for someone who fans the flames of regional discontent for political gain. It’s just too American….

#66 Harlee on 06.12.12 at 11:07 pm

That townhouse in Kamloops with the free beer looks a lot like the Bambi Motel.
(actually the Bambi is prettier).

#67 mark on 06.12.12 at 11:13 pm

I always appreciate it when they lace the downturn in real estate stories with “but there will be no US-style crash.”

#68 Tim on 06.12.12 at 11:20 pm

“And The Harper Government will be remembered as the worst, most hated and most destructive prime minister since Charles Tupper.”

——————
Could have told you that before all the dimwits in this country voted for him. It is a reflection on how ill informed, gullible, and ignorant these people are. Mulroney was a crook, but Harper is plain evil. He stifles debate, restricts access to information, lies about the F-35 fighter jets, commits election fraud, dismantles the environmental review process, cuts funding for the arts…There is a movement to unit the left, though in its infancy, we will hopefully see that enough informed Canadians who actually care about the direction this country is going in will join forces and elect a Prime Minister who actually reflects the values of Canadians, and is not just a puppet for big oil.

Stop bill C-38
http://heroes.leadnow.ca/search/

#69 ‘When nobody wants it’ | The Retiring Boomer™ on 06.12.12 at 11:21 pm

[…] As published in The Greater Fool […]

#70 Canadian Watchdog on 06.12.12 at 11:27 pm

#8 Editor #27 Raj #33 Erika #50 its starting

Something doesn’t jive with TREB’s listings because the spread between their listings and Red Pins is widening, even though Red Pin informed me on Twitter that their listing feed comes straight from TREB.

http://postimage.org/image/92gch6ut5/

http://postimage.org/image/f0wdb40oh/

#71 Sherri on 06.12.12 at 11:31 pm

I live in Kamloops and that condo is in the more “desireable” part of town, believe it or not. My hubby and I just sold our house here and as we’ve only been here two years we lost about $22,000 in equity due to the slow market and nothing in our price range ($400-$425) selling. Once we lowered it to $399,900 there was a definite increase in buyers. It is a relief on one hand, but we are moving to WEST VAN, where we are leasing a house for $4,000 per month. It was impossible to find anything decent for less than that, with a dog and two kids. Anyway, my hubby is already telling me that we are NOT going to be renting for long as it is a huge waste of money (48,000 per year up in smoke), whereas at least some of it would go towards our equity if we owned……..I have convinced him for the time being that it is better to rent as prices are going to drop (plus we can’t afford a house in W.Van yet!), but after a year or so I’m going to have to have some very solid proof of the benefit of renting……anyone know of a good website for comparisons? We are lucky in that all our closing costs, commissions, are paid by my husband’s employer. I know, I know, why West Van…..we both grew up there, it is very close to his work, and it has excellent French Immersion schools for the kids…….North Van wasn’t much cheaper and there is value in not having a long commute to work, say from Langley or Maple Ridge.
Thanks for letting me rant :o)

#72 Dan in Victoria on 06.12.12 at 11:38 pm

@9 Good
@59 Better

#73 furst on 06.12.12 at 11:45 pm

The salesman – a poem by Furst

Come now, I have many things to sell
What is your budget, please do tell
Half a million, is that all you can spare?
A house that price is rarer than rare

What did the bank, approve you to borrow?
Let’s go with that amount and start shopping tomorrow
You want a semi, that’s not the way to go
Why share a wall when you have a baby in tow?
It’s all about space and how much you can buy
Here’s a great detached, I know it’s priced high

But don’t worry, it’ll be worth more next year
Imagine that stainless steel fridge, filled with beer
The paint color in the kitchen, matches the cabinet
Polished hardwood floors, forget the cheap laminate
Pot lights are great and make a room shine
Worry not about knob & tube wiring, I see it all the time
That’s not a foundation crack in the wall
In fact, it goes well with the weathered look of the hall

Yes, I see that there, it’s mildew not mold
Just cover it up with pink paint or any color that’s bold
The basement isn’t dark, it’s actually a lot of fun
Put an Xbox right here. Trust me, kids prefer this to the sun
The ceilings aren’t low, they’re just from a time before
If it was another foot taller, you’d pay a lot more

So as you can see, this house is a great deal
In fact, I’d be as brazen to say it’s a steal
Multiple bidders will drive this price high
Better add on another 100 Thou in order to buy
Now we wait to see what’s next
Hopefully our offer is good, oh wait here comes a text
Yes, you won and conquered the competition
Now gotta call my office to get my commission

It was great working with you and enjoy the summer
You now can’t afford gas for the car, what a bummer
But you live next to a bus stop so that’s always great
Just show up 5 minutes earlier so you’re never late
Sorry it’s been a long day, gotta go, I need rest
Welcome to home ownership at it’s very best!

#74 Dan in Victoria on 06.12.12 at 11:49 pm

Sherri @ 72
http://patrick.net/housing/prices.html
Spend some time there, there is a HUGE amount of info on his site.

#75 T.O. Bubble Boy on 06.12.12 at 11:59 pm

You need a case of beer to mortgage-up on million-dollar dumps like these:

http://www.realtor.ca/propertyDetails.aspx?propertyId=11961030&PidKey=205348506

http://www.realtor.ca/propertyDetails.aspx?propertyId=11712727&PidKey=1777139685

#76 Tim on 06.13.12 at 12:00 am

“And The Harper Government will be remembered as the worst, most hated and most destructive prime minister since Charles Tupper.”

——————
Could have told you that before all the dimwits in this country voted for him. It is a reflection on how ill informed, gullible, and ignorant these people are. Mulroney was a crook, but Harper is plain evil. He stifles debate, restricts access to information, lies about the F-35 fighter jets, commits election fraud, dismantles the environmental review process, cuts funding for the arts…There is a movement to unit the left, though in its infancy, we will hopefully see that enough informed Canadians who actually care about the direction this country is going in will join forces and elect a Prime Minister who actually reflects the values of Canadians, and is not just a puppet for big oil.

#77 Expat on 06.13.12 at 12:10 am

#22 Dan in Victoria

Ever slip over the the Stonehouse to have a quick beer or some good food before catching the ferry at Swartz Bay? Went there Friday night and the place was closed up, sure hope its temporary.

Kind of wonder how that condo development in Colwood will pan out, may wind up as the Colwood Pub memorial fenced-off pit.

#78 nocte_volens on 06.13.12 at 12:12 am

#9 $B$P$O$E$

nobody remembers Tupper

#79 Snowboid on 06.13.12 at 12:15 am

In talking to a RE agent last week at a neighbourhood get-together, we happened on the subject of pricing.

I asked about local condos with ridiculous asking prices, even today.

The reply was: “…the biggest challenge today isn’t convincing sellers ,who bought in the last few years, that they aren’t going to make a profit, or break even.

The challenge is making them realize the new ‘mantra’ is setting a selling price to minimize losses…”

One unit near us is listed at what the owner paid four years ago, at the same time better units in the same building are 15% less.

BTW, the free beer townhouse owner is none other than a CTV videographer – no wonder the press loved the story!

#80 Al on 06.13.12 at 12:18 am

Just read in the Star about City of Toronto’s sale of TCHC homes. Checked the sales to-date and was disgusted to find that they were all listed by a single real esttae salesperson ! What happened to Rob Ford’s promise to ensure that all city contracts are done through a tender process and why not use several of the 30,000 odd real estate salespeople in Toronto ?

#81 Soylent Green is People on 06.13.12 at 12:20 am

T.m.t.o.y.h – too much time on your hands lol

http://dyslexicsmokingman.blogspot.ca/2012/06/fishermens-tail.html

.
.
.
.
.

#82 T.O. Bubble Boy on 06.13.12 at 12:21 am

mls.ca listings do look rather fishy this week.

For example, on guava.ca, only a handful of listings showed up on Monday (7 total for all of the central “C” areas), and even Tuesday — typically one of the busiest listing days — had 19 “C” listings. For comparison, last Tuesday had over 50 “C” area listings.

#83 Debtfree on 06.13.12 at 12:22 am

I laughed and laughed . Appealing to students to buy that “thing” with a six pack per week . $520 for a year . What a cheap skate . Only your website will get a buzz . Curtis I hope you read this blog . Your pathetic prize is probably half a months rent ,right?

#84 Bailing in BC on 06.13.12 at 12:32 am

#6 Derek R Thanks for that, just one thing I think you should add. What about “SASTPGFBDCParty”? Surely that’s got to be confusing the heck out of somebody.

When I discovered this blog in 2008 I spent the next couple of days reading all the back posts (there were less than a dozen) and all the comments (a handful a day). Then I went out and sold my investment property in Kamloops. Glad I did. I can barely afford my own beer tab let alone anyone else’s!

#15 HHHW. I’m sure Jim and Curtis will heed your advise as to how to get things sold. So hows the sale going on your property that you were looking to unload after buying it’s replacement? How many months has it been?

#85 NAM not HAM on 06.13.12 at 12:32 am

#72 Sherri on 06.12.12 at 11:31 pm

How about east van or Burnaby? $4000 a month is a big chunk to spend on rent. Maybe you should get the hubby on this blog.

#86 wtf on 06.13.12 at 12:39 am

What is with people? If you buy/sell in the same market where is the problem? Sure you might be down 20% on what you paid, but so is the sucker who you are buying from. Suck it up sunshine. The only people really being screwed are those getting in to the market.

Go ahead Garth, flame me.

-Lenar

#87 your wake up call on 06.13.12 at 12:46 am

#72 Sherri

West Van???? Really??? The absolutely most elite neighborhood in the Lower Mainland? Gee.. your sense of entitlement astounds me. Just because both you and your husband grew up there doesn’t make it a right for you to eventually be able to afford to buy there. Even if there is a major drop in prices it will not affect this area, where most people come from well established “old money”, Mainland China “new money”, and middle eastern “oil money”. I have to agree with your husband, stop throwing away money on rent and waiting for a crash in West Van. Pull out the wallet and pay $3m for a shitbox while you can, it’ll only get more expensive… next year you’ll have to pay $4m for the same shitbox.

#88 fiendish Thingy on 06.13.12 at 12:52 am

You think free beer is a desperate measure?

In Santa Cruz, CA, where I live (but not for much longer- moving to BC in August), realtors got so desperate a few years back, they were giving away Hawaiian vacations, Mexico cruises, and for the $million+ Oceanfront homes, new cars!

#89 West coast on 06.13.12 at 12:53 am

Why do people blame governments when something goes wrong?

Half the people in this country cant turn off HGTV for 10 minutes to get their asses to the poles to put an ‘x’ in a circle and participate in our democracy.

If we did participate, we could tell the government to stay out of the free market and to stop pimping votes with short term initiatives at the expense of rock solid long term prosperity.

Time to step up my fellow Canadians. Time to read up on economics. Time to read up on history. Our forefathers had to fight in trenches to preserve democracy; is it too much to ask us to do our part to maintain it?

Why do we all (including the dogs on this blog) want to own a home but wont take ownership of our country? And if we dont, how long till we need another war to get back what we neglected?

This is not the fault of conservatives, ndp, or libs. We own it.

#90 ryan on 06.13.12 at 12:54 am

Things are different in Toronto. Seriously…

Ryan

#91 Humpty Dumpty on 06.13.12 at 12:55 am

What are you guys all wankin about……
GOD has showed up!

He’s going to support the Gang with “advice and counsel on a range of economic, government, regulatory and strategic matters.”

http://business.financialpost.com/2012/06/11/td-bank-puts-its-faith-in-lord-gus-a-k-a-god/

“In this type of environment any insight that an institution can glean is certainly valuable”.

More wolves in sheeps clothing…..

“advice and counsel on a range of economic, government, regulatory and strategic matters.”

#92 patiently waiting on 06.13.12 at 12:56 am

Just spoke with a friend of mine. He is the president of one of the major residential development companies in Vancouver. He said that this past May has been the worst for sales in Vancouver in 8 years . . . enough said . . .

#93 tudrapete on 06.13.12 at 12:59 am

#7 vic tea party.
You’re talking derivitives maybe??

#94 tudrapete on 06.13.12 at 1:05 am

#6derek r.
Your post may have cleared the air again.
Smoking man…….are you here??

#95 Devore on 06.13.12 at 1:09 am

#11 thinker

Great stories, but reality is different Garth, no sellers are panicking and prices are not lower.

Wake me up when that ever happens

That’s pretty disingenuous. Sign up for a hot sheet service with a realtor, you’ll see plenty of price reductions every day.

Hey, you think this guy is panicking?

http://vancouver.en.craigslist.ca/van/reo/3055404572.html

#96 Ronaldo on 06.13.12 at 1:12 am

”Asset deflation and price inflation can co-exist. It’s not funny. — Garth”

Absolutely, I remember 1974 and later seventies well. Houses selling like hotcakes up to the fall of the year and sales coming to an abrupt end. Realtors dropping like flies. 20% drop in prices that fall. West Vancouver took the biggest hit. Runaway inflation with prices of goods going up weekly. Wage and price controls followed a year later. Rural properties and vacation properties dirt cheap. High unemployment, lots of labour strife. You all better hope we don’t go through that again.

#97 Devore on 06.13.12 at 1:14 am

What is something worth when no one wants it?

That’s the wrong question. The question is at what price will someone want it?

There is a buyer for everything that is for sale… at some price.

#98 FTP - First Time Poster on 06.13.12 at 1:18 am

Another quality post from Turner Broadcasting!

Here in Edmonton, within a 5 min drive from my house, there are no fewer than 6 apartment or multi family buildings going up and 3 separate sub divisions.

Wifey & I wanna move, but what we see is garbage. Our current mortgage has 2 yrs left, so we’re kicking tires for now. Anytime I see something I like on MLS I pull out the old mortgage calculator & do the math while feeling my nuts shrivel up. Nothing like having a mortgage that is 1.0X gross income & not wanting to become an indentured servant to the banksters

#99 syd on 06.13.12 at 1:34 am

http://news.nationalpost.com/2012/06/12/is-torontos-housing-market-cooling-bubbling-bursting-or-booming/

#100 Nostradamus Le Mad Vlad on 06.13.12 at 1:35 am


#48 John — “Wouldn’t you think the sum-up is “paradigm shift”?” — Yes indeed, it’s a paradigm shift of enormous proportions, but we’re only going to see bits and pieces of it until, one day, the whole system shuts down, such as here to start.

Keep in mind that economics plays a part in this, and RE a smaller role. No credit / debit cards, cash will be king for a short time only. Groceries, gas — all the everyday necessities of life — will be done by cash alone. Bartering (as per Greece) will come in mighty handy, but it will be a major shock for people who don’t have much in the way of cash skills.

As to solutions, I have none. All I can do is take care of myself, a few others and not be a burden on taxpayers. They are shouldering way too much already. Good post!
*
Greek Bank Run Add Spain, Italy, France, etc in the next couple of weeks — this world will be a complete mess; China tells US about Iran’s oil: Shove it where the sun don’t shine; Banks may be an endangered species, but it’s the banxters that should be hung, drawn and quartered; Japan’s QE about to start; I and I India – Italy;
Argentina Learning from past mistakes; Cleaning the Toilet Wyndham Hotels; BdB Chart; Greece or Canada Which is about to collapse? Retirement in Tuscany? Eleven Homeless People who became rich and famous; Chart of the Day; China Another bubble; Buffett and Blankfein Tough times looming; Emerging Markets could be taken down before they’re even up; Don’t Buy, Don’t Comply, Ask Why; Bitcoin? Link in; There will be blood.
*
Burma State of emergency; Depop Elderly first; Spewing Forth from the WH and 24 Sussex Drive; 80% UK quitting EU? Suspicious Behavior Software / app for that, too; Ignore NATO’s diatribes; Bugatti Veyron or Dodge Rambler? Feng Shui Story is kinda neat; Trip Down Under in more ways than one.

#101 WaterlooResident on 06.13.12 at 1:40 am

Waterloo prices will never crash, we have RIM here, and RIM will save us.

So that’s why the average house price in Waterloo will soon be 10-times what house prices in Toronto are selling for. (smile )

oops, too much Koolaid ?

#102 aggie on 06.13.12 at 1:41 am

I tell so many people about this blog. Must zip it for a while, until I’ve found my own GF. It takes not knowing that you are one to be one, at least one who’ll buy!

I had only one serious query from the short time I’d posted my condo for sale on craigslist, was disappointed when she didn’t follow up, and then tonight, she wrote, “Sorry I did not get back to you earlier. We are going to see if we can get a loan first and if you still have this place we can contact you again.”

My immediate instinct was to silently scream, don’t do it!! Read greaterfool.ca!! But I curbed that urge, will share her note with my realtor tomorrow. And hells bells, I might send her the GF URL anyway.

Geesh, I’ve screwed myself but good already, really hate to do it to another innocent. Truly, when you look at the options, one can’t help but wish we could sock it back at the system that made this idiocy possible, rather than have to look for greater fools.

I’m even sad for my next door neighbour, who, in his youthful… well, yes, greed (but that’s what he’d been taught, that’s what he thought he was supposed to do), bought the place for a song, with the goal to flip it. The place had been dumped on the market when a long probate finally was settled — it had only had one owner, so I imagine she’d paid in ’92 maybe half what it sold for. Young fella applied his energy and skills to do a fantastic upgrade, and now realizes he may not be able to even recover his investment.

He had no intention of living here for very long. He feels trapped. Like I did, until I decided it’s worth it to pay to get out.

A few places that were listed in and around this building have pulled their listings. Good news is that one place sold on the weekend. It started at 270 in Feb, closed at 248. The young dad says he at least recouped his costs for the upgrades that he’d done himself.

They’ve bought a shiny new house further east, with more room for the growing family, and it has a basement suite. Having heard my plans, they asked, would I be interested in renting it? I actually would!

Oh, for those that want more community-specific info, I should mention that we are in the Maple Ridge/Pitt Meadows area, commuter-distance east of Vancouver.

Something that kinda sorta fits here, a great message from an aging renter, in the tower of song: http://www.youtube.com/watch?v=3JWiPFT0v2c&ob=av2e

#103 Zidartha on 06.13.12 at 1:42 am

I can have six beers a week for $520!?!

#104 patiently waiting on 06.13.12 at 1:47 am

Here is a quick look at Vancouver West side price reductions that your local realtor probably will not tell you about . . . these are current active listings of single family homes. This list of 158 homes is only a partial list, as I did not look at homes over 3 mil, and it does not include homes that were taken off the market (or allowed to expire) and then put back on the market at a lowered price – this would probably double the number in my list but it just takes a lot more time to compile the info. Enjoy as your day of waiting is near at hand . . .

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=926498222&s=BRC&t=BRC

#105 MrHulot on 06.13.12 at 2:10 am

Today we went to see the Matisse Exhibition at the Vancouver Art Gallery. I always go to the exhibitions but never bothered to go through the entire museum. Until tonight.

It has to be the most pathetic museum I have ever seen in my life. And I have been to museum’s all over the world even in obscure places like Armenia and Georgia. On the second floor, they had an entire wall devoted to…get this…artful pictures of Vancouver houses! I was expecting a RE agent to sidle up beside me as I stared at them.

This city has become a joke. There is nothing world-class about it. There is no culture here. We could not even sustain the Vancouver Playhouse, a 50-year old theatre group which had to close its doors last May.

We desperately need a RE crash here if only to get our heads out of our asses.

#106 aggie on 06.13.12 at 2:10 am

p.s. Thank you for the glossary, Derek R! And your ongoing insights…

#107 patiently waiting on 06.13.12 at 2:17 am

Here are some of the condo price reductions of active listings in Vancouver as well:

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=1935641753&s=BRC&t=BRC

#108 Michelle on 06.13.12 at 2:42 am

@#60- Furst

“Michelle: Thanks! I have a day job, very corporate. I make up the poems on the spot, more spontaneous and natural that way.”

You wouldn’t happen to be a drug sales rep would you?

Michelle :P

#109 Canuck Abroad on 06.13.12 at 2:43 am

72 Sherri – This calculator is pretty good. It will show you how many years you have to hold a house before you break even compared to renting. It’s also a good summary of all the purchase and ownership costs that many buyers overlook. You may need to tweak it to fit BC costs, etc.

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

#110 Canuck Abroad on 06.13.12 at 2:54 am

72 Sherri continued – Also note that this is a US calculator:

“…Property taxes, the interest part of the mortgage payment, and in some cases, a portion of the common charges, are tax deductible. The resulting tax savings is accounted for in each item’s totals…”

You can probably adjust this for non-deductability of Canadian mortgage interest by playing with the advanced settings, but the calculator should give you a good idea of how crazy Vancouver prices are anyway.

#111 TNT on 06.13.12 at 3:00 am

#72. Check out houses in Lions Bay close to W Van cheaper rent lots of nannies.

#112 Scott in Gibsons on 06.13.12 at 3:18 am

Something for RE bears to watch now is how demand evaporates once it is widely known that prices are falling. The ONLY reason to overpay for a house is if it’s value is rising. Once everyone knows that prices are falling, buyers will slam their wallets shut and not buy until prices have fallen enough to make them greedy again.

#113 gtrz4peace on 06.13.12 at 4:47 am

#9 BPOE

Now we haven’t posted for awhile! But BPOE finally posted something we agree with!

Methinks the end of the world may be coming soon, or monkeys to fly out of my butt.

#114 Aussie Roy on 06.13.12 at 4:48 am

Aussie Headlines

Here is the incentive

THE state government’s property changes, which skewed support towards new homes, were predictably applauded by developers and mostly criticised by real estate agents.

The Budget changes mean NSW will have the most generous first home buyer scheme in the country – provided you buy a new house or apartment.

From October 1, the First Home Owner Grant will more than double to $15,000 for purchasers of new property under $650,000.

”I don’t like it. It’s bad policy,” Ray White chairman Brian White said who mainly sells established houses.

http://smh.domain.com.au/real-estate-news/out-with-the-old-in-with-the-new-for-a-firsthome-handout-20120612-208bk.html

Here is the target

Six new suburbs will be developed on Melbourne’s fringes as part of a government move to increase the city’s urban growth boundary.

This morning Planning Minister Matthew Guy announced he would increase Melbourne’s growth boundary by 5858 hectares, including extending the boundary to encompass the town of Wallan, land at Point Cook, Melton, Werribee and near Pakenham.

New suburbs will include Diggers Rest, near Sunbury, Lockerbie, near Greenvale, Lockerbie North, Manor Lakes, in Wyndham, Merrifield West, in the city of Hume and Rockbank North, near Melton.

http://smh.domain.com.au/real-estate-news/six-new-suburbs-for-melbourne-20120613-209w9.html

The deposit dilemma

The variability within the Australian economy seems to be a mystery to some and simple to others but I doubt many have considered the “deposit dilemma”. In the following paragraphs I am going to outline an hypothesis about how Mega Bank (the big four) has a sleeper hold on the Australian economy due to the inappropriate creation of deposits.

http://www.macrobusiness.com.au/2012/06/the-deposit-dilemma/

#115 Patient buyer on 06.13.12 at 5:13 am

Meanwhile, the state I live in – New South Wales – is desperately trying to keep the party going by throwing tax dollars at developers in the guise of grants and tax concessions worth potentially as much as $35,000 for a first home buyer to buy a newly built property. Garth, you should do some stories on the crazy Australian housing market to show just how far some governments will go to protect landowners/developers/speculators at the expense of the average citizen. If you’re ever running short of ideas for a column (not that that’s likely), there’s a veritable treasure trove of idiotic policies here you could discuss/expose/lampoon.

#116 Tkid on 06.13.12 at 6:08 am

Currently on vacation in Calgary and took a drive along the Transcanada. Got as far as Kamloops and turned around. I did not like the look of the place – desert country. One good rainstorm and the hills there look like they’d do a mudslide on you and renovate your back yard.

#117 Canuck Abroad on 06.13.12 at 6:52 am

87 wtf/lenar – If there was no such thing as leverage your point would be valid. However, if you bought a 500k house with 10% down, you have a 450k mortgage (ignoring closing costs etc). Now when prices fall 20%, you have a house that will only sell for 400k, but you still have a 450k mortgage. You are not going anywhere, unless you have plenty of cash on hand to (1) get out of you old mortgage by writing a 50k cheque to the bank and (2) finance a deposit on the new place.

This problem will cause many people to stay in their house when they would like to move – either to “move up” or to take a new job or for some other reason. This lack of mobility has adverse consequences on the job market as well.

#118 tiny bottoms on 06.13.12 at 7:00 am

Canadian banks on appraisal alert

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

#119 Regan on 06.13.12 at 7:39 am

#96 Devore – Hey, you think this guy is panicking?
_______
Yeah, but the owner still wants 2+mil for the place! I’m sure this urgency is the seller wanting their capital back and loan paid off so they can sleep at night. Desperation is when they just want the loan paid. Real panic is when they are figuring out how much more cash they can add to the sale to pay the loan.
If it sounds like I’m gloating, I’m not. There’s going to be a lot of heartache out there.

#120 Truncated on 06.13.12 at 7:53 am

#26 Jan

“This message has been truncated”

Are you sure?

#121 T.O. Bubble Boy on 06.13.12 at 8:00 am

China’s GDP growth sounds like RE in Vancouver – getting lower every month:
http://www.cnbc.com/id/47793241

China Growth May Dip Below 7%: Government Adviser

#122 Steven Rowlandson on 06.13.12 at 8:07 am

Prices in Ontario have not fallen enough already! We don’t have mid to late 1960s prices that fit the $10.25 an hour wage rate for factory work and other skilled and unskilled work. Real estate prices have to lose a zero and then possibly get cut in half after that before they become affordable. There you have it real estate is not affordable unless it sells for 5 or 10 cents on the dollar.

#123 Mr. Lahey, Sunnyvale Trailer Park Supervisor on 06.13.12 at 8:13 am

#74 Furst

“The ceilings aren’t low, they’re just from a time before
If it was another foot taller, you’d pay a lot more”

This is vintage realturd talk Furst!! They will sugar coat anything for a buck. Well done! You have captured the whole mentality of realturds. Another home run out of the park for Fuuuuuurrrrrsssstttt!!!! BTW, the whole friggin park was listening last eve as Bubbles read your poem. There was literally a roar of approval from the assembled crowd when Bubbles finished reading your poem. Randy will be doing the reading this evening. You are the friggin rage in Sunnyvale. We may have to beef up our security when you make your way here for the SASTPGFBDCParty!

#124 TurnerNation on 06.13.12 at 8:19 am

Bigga rider you wann-a 10%?

If you can stomach some market and liquidity risk, how about these exchange traded debentures on TSX & Venture. All are yielding 8-10%, some even trading under par.
As established by Michael Milken (former junk bond king), a portfolio of ‘diversified’ junk debt actually smooths itself out….

RUM.DB (Alberta liqour stores. RUM, natch)
DA.DB.A (diversified northern aviation co, with some govt contracts)
TBL.NT (building supplies)
MM.DB.U (new media)
PNP.DB (capital co, owns other small cap companys’ chares).

Disclosure: no position in any of these companies, they are only on my watch list.

#125 G. Soros (Gary) on 06.13.12 at 8:37 am

#123 Turner Nation

“As established by Michael Milken (former junk bond king), a portfolio of ‘diversified’ junk debt actually smooths itself out.”

It is not that the junk debt smoothes itself out via some wonderful averaging process. The winners made enough to offset the losers for Milken. This is classic trading. You will have losers but the winners have to be of such a magnitude that when the losers are subtracted from the winnings you are still up. As Stanley Druckenmiller said in Market Wizards, “superior returns are achieved by preserving capital (cutting your losses quick) and hitting home runs (to offset your losses)”.

#126 fancy_pants on 06.13.12 at 9:01 am

geez, doesn’t the realtors 101 course advise you not to sell your reputation for a sale? Don’t look so easy and sleazy. Bad advertising or what?

To boot, what a stupid idea, who would buy a house for free beer? Looks like all the ingredients are there to entice appropriate owners to this crack shack except the asking price.

#127 timbo on 06.13.12 at 9:06 am

http://www.theglobeandmail.com/report-on-business/economy/us-retail-sales-fall-for-second-straight-month/article4255078/

“Retail sales slipped 0.2 per cent, the Commerce Department said, after easing by the same margin in April. Sales in April had previously been reported to have edged up 0.1 per cent.”

A little easing always brings out inflation………

http://www.bloomberg.com/news/2012-06-12/italy-tax-increases-backfire-as-monti-tightens-belts.html

“Value-added tax receipts have declined since Monti’s predecessor, Silvio Berlusconi, raised the rate by 1 percentage point in September as the economy was slipping into recession, government data released June 5 showed. The amount collected fell in the 12 months ended April 30 to the lowest since 2006. ”

Tightening only leads to consumers pulling back and hiding the money…………

#128 Observor on 06.13.12 at 9:30 am

NET WORTH AND HOUSE PRICES

At #46 above I tried to address the strange phenomenon whereby until 2007 American homeowners were growing richer by leaps and bounds by virtue of a small percentage of homeowners selling their houses at ever higher prices. EVERY homeowner got richer. But clearly there was somthing fake about that wealth.

It was not like when Apple shares made lots more money and all owners got richer. In this case the underlying physical houses were unchanged and even the rental values were fairly flat.

Now the process has reversed and all homeoners have lost net worth.

For long-time owners it was easy-come, easy-go. For new buyers in 2007 it has been financial suicide. For a lucky few that sold and rented it was a true gain that they kept.

I just would not panic much about the 40% loss in net worth by the long-time home owner. In 2007 he thought he won the lottery. But his ticket has expired.

My point is a country as a whole cannot get rich by trading its houses among it citizens at ever higher prices. And conversely it can’t really get poor as a whole country when the prices drop.

But this is just a mental puzzle to think about.

But as far as practical advice, I offer Sell the house in Canada, buy in the U.S. Or Sell the high-priced Canadian house and invest in value stocks.

#129 Dan in Victoria on 06.13.12 at 9:38 am

[email protected]
Yep been to the Stonehouse many moons ago. Ferry is too expensive very rarely leave the Island now.
Should be interesting how that new development works out at the old Colwood location.
Maybe we’ll have another hole too match the one across from Timmies.
On a side note had lunch with a sales rep this week.
“Geez Dan its really getting bad, we’re just keeping the doors open”
We both agreed that there is stuff going on but no money in it, just rolling product over for little or no profit.
Hardly see any little guys anymore, maybe once or twice a week, definately has slowed.
Then with a look of concern he asked “Do you think its 1981 all over again?”
Its diffrent this time was all I said.

#130 Country Girl on 06.13.12 at 10:00 am

#50 Its Starting..
“they were told to remove listings that were over 30 days old.”

Are the real estate agents taking a smaller commission if one of these unadvertised, 30-day-old listed properties happens to sell? The on-line posting seems to be the most important form of advertising an agent can provide.

#131 Arb Watson on 06.13.12 at 10:13 am

There is one simple explanation why real estate prices are at this level.

Loose Monetary Policy +
Hysterical Lending Standards+
Low Interest Rates= Pay whatever you feel like for a house that is a non-productive asset.

Fundamentally real estate prices are still overpriced across the globe, but with the level of monetary easing across the globe none of that really matters.

#132 Toronto_CA on 06.13.12 at 10:19 am

“And conversely it can’t really get poor as a whole country when the prices drop.”

They can get poor en masse tho if millions took out equity in their homes that were appreciating via HELOCs and spent it on renovations and consumer debt (vacations, depreciating assets like cars/boats/clothes, meals and entertainment). Then when prices drop the debt in the HELOC is still there but the assets aren’t worth what they paid (or worth anything at all) and so you have a decline in net worth as the house that was keeping up net worth is way down but HELOC debt is way up?

And yes, that is VERY common as unlike the mortgage, HELOCs are perpetual and don’t need to be repaid (principle that is).

Couple that with people “trading up” in houses so that the 15-35% decline coming is a bigger hit to their net worth than if they stayed in a smaller house…yeah I think the whole country could get poorer as a result of everyone putting the breaks on spending when they realize they are much more poor than a year ago.

#133 From Winnipeg... on 06.13.12 at 10:22 am

Really looking forward to the post re: Winnipeg. Hope you talk about average household income vs. average selling price. It really is ridiculous.

#134 The American on 06.13.12 at 10:23 am

At #87: WTF, I had once asked myself the identical question having gone through this for the past five years here in the U.S. Here is why it certainly matters… When a person sells his home at prices that are lower than from peak (let’s say 20% lower from peak for conversational purposes), more than likely he/she will have the opportunity to buy another home within the same market at roughly the newly-adjusted market price of 20% lower than peak. This sounds like it isn’t a big deal if someone stays in the same market.

However, the person who just sold his home at a price 20% lower from peak probably now does not have a down payment of any kind to go and purchase the other home because the market adjustment cannibalized all equity in the property (asset deflation). This is precisely what happened in the U.S. Most people who had to sell at prices that were 20% lower than peak had zero equity to place into the next home. Hell, many were/are having to write checks at closing just to sell the home because they didn’t have enough equity to cover the loss. And as a market begins to melt, banks get spooked (really spooked), and lending standards tighten quickly, which makes it only more difficult to purchase the next home. So, now we have a situation where the seller has zero dollars to place on the next pad, while at the same time lending standards are requiring significantly more money to put down to purchase the new pad. Now we have a Catch22. It is not a good situation, and ultimately it freezes an entire market. Think paralysis.

#135 Coming to neighbourhood close to you on 06.13.12 at 10:26 am

NEW LAVEL OF CONDO PRICING:

http://www.realtor.ca/propertyDetails.aspx?propertyId=12053537&PidKey=-1012560485

#136 eaglebay - Parksville on 06.13.12 at 10:26 am

#31 Observor on 06.12.12 at 10:04 pm
STRIP PUB CLIENTS
“It’s not just old perverts that go to these places,”
__________________
When I was a young man they called me a dirty old man.
Now that I’m older they call me a pervert.
What gives.

#137 45north on 06.13.12 at 10:36 am

The outcome will be fifty shades of grey.

nice

Canadian Watchdog: Something doesn’t jive with TREB’s listings

thanks for your work Watchdog

Sherri: we are moving to WEST VAN, where we are leasing a house for $4,000 per month.

good for you Sherri, you gona pay one way or the other

We are lucky in that all our closing costs, commissions, are paid by my husband’s employer.

well yes you are, that put’s you in the top 1%

West Coast: Why do people blame governments when something goes wrong?

as Homer Simpson says “son I know it’s easy to criticize – so I do”

talking about the housing crisis:

We own it.

yes we do

aggie: Must zip it for a while, until I’ve found my own GF. It takes not knowing that you are one to be one, at least one who’ll buy!

first I thought GF was “girl friend”, It sort of makes sense then I realized it was “greater fool”. aggie you are so conflicted! You cannot compete with real estate agents with your attitude. Just list it.

Canuck Abroad: You are not going anywhere, unless you have plenty of cash on hand to (1) get out of your old mortgage by writing a 50k cheque to the bank and (2) finance a deposit on the new place.

Mark Hanson uses the term “effectively underwater”. In California 50% of the “home owners” are effectively underwater.

Truncated: “This message has been truncated”

Are you sure?

pretty funny

#138 The American on 06.13.12 at 10:40 am

I’m curious… Is anyone going to address the $131 Billion Canada received last week from the U.S. Federal Reserve as a measure to “Improve access to financing and strengthen Canada’s financial system?” Hmmmmmm. Sounds like yet another hidden Canadian bank bailout, errrrrrrr “backstop” as Harper would call it, that has been completely buried to the general public.

Canada already received a $114 Billion bank bailout back in ’08, some of the funds coming from the U.S. Fed, but nary a word was ever spoken about that. That is itself was a larger bailout than what came to fruition in the U.S. on a percentage basis. If you couple this with the $131 Billion from last week, the bailout is unprecedented. Nope, not a f*cking word about this, though, right?

#139 Beach Bum on 06.13.12 at 10:46 am

Regarding the Rule of 90, what is the most accepted way to value residential real estate? Purchase price, assessed value from property tax, independent assessment, guess based on similar properties, etc… If a property is generating cash flow, does this change the Rule of 90?

Market price, residential only. Cash flow-generating real estate is valued with a different price metric. — Garth

#140 Bottoms_Up on 06.13.12 at 10:48 am

#6 Derek R on 06.12.12 at 8:34 pm
————————————
You are getting closer to perfection my friend.

#141 daystar on 06.13.12 at 10:53 am

#103 aggie on 06.13.12 at 1:41 am

Good to hear from you Aggie, keep us posted. Don’t feel too bad about selling to a greater fool, some of us are on a crash course for the lessons we learn. If your buyer doesn’t buy from you, it will be someone else. What you can do is pray (I know, it sounds hokey, some of us like to cheapen good will but it far out values a whole lot of other things going on, believe it). Best of luck!

#142 Aussie Roy on 06.13.12 at 11:05 am

Aussie Headlines

Is the RBA’s Governor seeing the light?.

In his speech, I was intrigued to see Stevens warning Australians against relying on trend house price growth and defensively arguing that the RBA was not cutting interest rates to bolster asset prices. For mine, this is a subtle tell apropos the RBA’s policymaking mistakes. Suddenly it is worried about unintended consequences:

“You don’t have to be a believer in bubbles to think that a return to sizeable price increases and higher household gearing from still reasonably high current levels would be a risky approach. It would surely be a false basis for confidence. The intended effect of recent policy actions is certainly not to pump up speculative demand for assets.”

http://www.propertyobserver.com.au/rba-rate-decision/the-rba-knows-a-material-housing-price-decline-would-imperil-the-entire-financial-system-christopher-joye

While the Govt pushes on the demand string, will buyers wait for the Govt bribe?. Leaving the market to stagnate further.

Despite the NSW government’s best intentions, sales of new houses and apartments to first time buyers might actually ease off until October 1.

Savvy first-home buyers might delay their new home acquisitions to secure an $8,000 bonus based on a $550,000 new dwelling.

The entitlement of first-home buyers who sign a purchase contract for a new home between yesterday’s state budget and September 30 is $20,240 + $7,000 totalling $27,240.

But wait until October 1 and it’s $20,240 + $15,000, or a maximum total of $35,240.

http://www.propertyobserver.com.au/residential/budget-s-first-home-buyer-$8000-bonus-might-actually-pause-nsw-new-home-purchasing-until-october/2012061355094

There goes another supplier of cheap credit.

Australian Govt wants out of the taxpayer backed RMBS market it created in 2008. The $20B is nearly all gone.

Via Twitter comes news that the Australian Treasury recommended that the Government formulate a policy that frees the Residential Mortgage-Backed Securities (RMBS) market from Government support.

According to the below Treasury Executive Minute, obtained via Freedom of Information, three-quarters of the $20 billion of Government support earmarked for the RMBS market remains, which is likely to be fully spent within the next year.

http://www.macrobusiness.com.au/2012/06/treasury-wants-rmbs-market-free-of-government-support/

Have I mentioned it used to be different here, until it wasn’t.

#143 Jim on 06.13.12 at 11:10 am

#117 Tkid

Kamloops is a great town, if you appreciate semi-arid settings. The hills are quite stable, as I can attest to from having hiked through them regularly as a kid.

The main problem I have with the city is that it has become a) overpriced, and b) badly planned. The death knell for Kamloops was the development of the aberdeen heights. That brought in endless cookie cutter houses and big box stores. It used to have some character, as you can see by visiting the older residential areas. (e.g., sahali).

Income levels aren’t nearly high enough to sustain price levels. They are desperately trying to expand the ‘university’ to accommodate more foreign students (and hence more teachers). It won’t work.

#144 Grimbot on 06.13.12 at 11:32 am

Scotia Bank….house prices falling….

http://news.sympatico.ctv.ca/home/canadas_house_market_still_outshines_world_scotiabank/1c7682bf

#145 Aussie Roy on 06.13.12 at 11:48 am

Europe, where is the money coming from?.

Nigel Farage “Another bites the dust”

Nigel Farage appears to have reached the limit of his frustration with his ‘peers’ in the European Parliament after the Spanish bailout. Rajoy’s proclamation that this bailout shows what a success the euro-zone has been, sends Farage over the edge as he sees the Spaniard as just about the most incompetent leader in the whole of Europe (up there with favorites like Van Rompuy and Barroso). The erudite Englishman notes that by any objective criteria “The Euro Has Failed” expanding on the insane farce of Italy funding Spain’s banking bailout at a loss (borrowing at 6% to fund a loan at 3%). “This ‘genius’ deal makes things worse not better” as it merely drives other nations towards needing bailouts themselves and while his socialist colleagues in the room are mumbling and checking their blackberries, he reminds them that Spanish national debt will surge and that 100 billion does not solve the problem, and that if Greece leaves, the ECB is failed, is gone, and to rectify this there will be a cash call from the very same PIIS (Ex-G) that are tumbling towards the abyss. Blood pressure surges as he screams “you couldn’t make this up” concluding that “the Euro Titanic has now hit the Iceberg and sadly there simply aren’t enough lifeboats.”

http://www.youtube.com/watch?v=TN_1mF-3JTI&feature=player_embedded

#146 Tom from Mississauga on 06.13.12 at 11:50 am

So my company is moving our jobs to Portland Oregon in September where they are currently training our replacements. Some of the work has already been transferred. At $14 an hour in Portland there is no way a person living in Mississauga can compete. I couldn’t rent a mouldy basement on that. So I’ve just listed my condo, the MLS# I give but don’t want traced to this site. The people that I work with, all who will be out of work soon think I’m crazy for selling. All of them plan to hold on. I mention having liquid money and mobility to move to where the next job will be and I’m gazed upon like I have 3 heads. In fact one just bought a house.

#147 Doug in London on 06.13.12 at 11:50 am

You mean to tell me, Garth, all that hot Asian money isn’t enough to sustain the grossly overpriced Vancouver market?

#148 Tonino, Nonno Nicola's Grandson on 06.13.12 at 12:08 pm

Hi Big Rider. Just got a phone call from Nonno (I conveyed the note you made about considering him and the bearded oracle who writes this blog as your friends) and he told me to tell you to snap up the latest Jack Schwager book on trading. It is hot off the press.

http://ca.wiley.com/WileyCDA/WileyTitle/productCd-1118273044.html

Unfortunately for me, I have to read him this damn book when he gets back from his cruise. I think I am going to hook you two guys up some day so you can read him these books and chat up the markets and real estate.

#149 Derek R on 06.13.12 at 12:09 pm

#85 Bailing in BC on 06.13.12 at 12:32 am wrote:
I think you should add. What about “SASTPGFBDCParty”? Surely that’s got to be confusing the heck out of somebody.

Good point. I’ll put it in the September release.

#103 aggie on 06.13.12 at 1:41 am wrote:
Geesh, I’ve screwed myself but good already, really hate to do it to another innocent.

I don’t think it’s helpful to think like that Aggie. Firstly, I would always assume that the buyer knows what they’re doing unless it’s really obvious that they don’t.

Secondly, everyone’s situation is different and it may well be that the buyer is better able to support a drop in prices than the seller can. Without access to the buyer’s financials you can’t know.

And thirdly, this is the Titanic. there aren’t enough lifeboats. Somebody’s going to drown (in debt). It’s not your fault and you can’t save everybody. So you need to do what’s best for you without suffering “survivor guilt”. I know that’s hard but it’s not as hard as drowning. With any luck the person that buys from you will be a strong swimmer.

#150 zeeman1 on 06.13.12 at 12:13 pm

#20 Smoking Man.

Nice post.

You’ve read “Operating Manual For Spaceship Earth” by By R. Buckminster Fuller.

If not you should read it, you’d love it.

#151 Snowboid on 06.13.12 at 12:14 pm

CMHC lists Kelowna as one of the top five places to rent in Canada, but warns it will change as the economy improves this year!

http://www.kelownacapnews.com/news/158647245.html

Economy improving? Apparently they haven’t seen the MLS listings lately!

#152 Toon Town Boomer on 06.13.12 at 12:17 pm

“What is something worth when no one wants it?”

Hey All
Forward this post to your local realtor maybe they can answer this one. LOL

#153 jess on 06.13.12 at 12:30 pm

triple whammy

http://ww3.tvo.org/video/178607/sherry-cooper-economic-crisis-continues

#154 Steve on 06.13.12 at 12:33 pm

“Conditions in Canada’s housing market have cooled in recent months, but the country continues to outperform other developed nations, according to a new Scotiabank real estate report.”

“The cumulative decline in house prices from the peak in early 2007 has reached a staggering 50 per cent in Ireland. ”

“The battered U.S. housing market is finally showing increasing signs of stabilizing, the report says. Home price declines slowed to just 3 per cent year over year in Q1 following an 8 per cent drop in the second half of 2011. ”

Thank You to the bank for letting us know that it is different here in Canada! I would hate to see us turn out like Ireland (-50% after 5 years) or the USA (dropping ONLY 3% yoy after 4 years).

Is there any truth to the statement that realtors are removing listings that are over 30 days from MLS to improve the optics?

What was Garth’s phrasing again? Oh – This will not end well!

#155 Garth, you bring bad luck to RE on 06.13.12 at 12:33 pm

That’s right!!! If it wasn’t for you the real estate would run on empty hopes, greed and fear of being left out forever. Look what you did!!!

#156 Nervous on 06.13.12 at 12:35 pm

Please, please focus on ottawa and other parts of the country, enough about Vancouver, Calgary and Toronto, we get it.

#157 daystar on 06.13.12 at 12:38 pm

http://money.ca.msn.com/savings-debt/yourmoney/canadian-home-prices-down-2percent-in-q1scotia-1

Canadian RE is down 2% in Q1. Isn’t it interesting how this is sugar coated through highlighting RE values of nations like PIGGS in a post bubble bust and routed in recession! I have to laugh at how media feeds this stuff to the masses at times, I really do.

We wouldn’t want to upset this balanced market y’know, it doesn’t matter that RE is trading way past income norms, thats normal, maybe a tiny winy soft landing is required. 2% correction? That’ll do and lets blame it on PIGGS. Lets get a brand new round of buyers in at these prices, its great for the economy, huge mortgages are fine for our RE industry, why… just ask our industry! They barely have a stake in it and would never steer us wrong. No conflict of interest here, we have to tell ourselves that banks and realtors are just there to serve and looking out for us all at all times! After all, the customer always comes first. Right? Right…

#158 LB on 06.13.12 at 12:40 pm

#87

It is also the many people who have taken out HELOCS based on their now rapidly diminishing equity that will be screwed, not to mention every taxpayer in Canada via the CMHC 80 billion dollare bailout and upcoming foreclosures as the Canadian housing market collapses.

#159 Gmaz on 06.13.12 at 12:45 pm

#8 AND #50
I have been tracking sales in Mississauga for a couple of weeks and notices MOST homes sold below asking- a sure sign of no bidding wars.

BUT… the last 2 days they have all sold OVER asking. Strange but I think they are indeed holding back supply.
I also noticed that the homes selling were in the lower price range.

I called one agent and she told me ALL her homes get bidding wars.

Garth, care to comment. What is going on in Mississauga.

#160 daystar on 06.13.12 at 12:45 pm

#150 Derek R on 06.13.12 at 12:09 pm

Has anyone ever told you that you’re easy to compliment? You do make it easy.

#161 Bottoms_Up on 06.13.12 at 12:50 pm

#41 Fabrega on 06.12.12 at 10:19 pm
—————————————–
Actually if you check the latest CPI numbers from Statistics Canada, food prices have come down….

#162 T.O. Bubble Boy on 06.13.12 at 12:50 pm

LISTINGS EXPLOSION in the GTA:
http://guava.ca/?p=3025#more-3025

#163 $$$$BPOE#1 on 06.13.12 at 12:53 pm

15% so TD says. It is an opinion it is not a FACT, it is not a REALITY, it has NOT happened. To humour all lets say a condo drops 15% in 3 years. In 25 years that condo is paid off you have equity and pride of ownership. The decision should be crystal clear. Remember TD is giving an OPINION and NOT A FACT

#164 arctodus on 06.13.12 at 12:53 pm

#139
I’m curious… Is anyone going to address the $131 Billion Canada received last week from the U.S. Federal Reserve as a measure to “Improve access to financing and strengthen Canada’s financial system?” Hmmmmmm. Sounds like yet another hidden Canadian bank bailout, errrrrrrr “backstop” as Harper would call it, that has been completely buried to the general public

It is really very very simple…..

“The collapse will not be televised”…..repeat to yourselves daily.

The civilizational collapse which is taking place will not ever make mainstream media…or not in a way at least that the mainstream population can understand.

Canada entered the global economic collapse in late 2010 I believe based upon a number of metrics (employment stats, true real estate stats, export numbers etc etc). We are now at the same place the USA was in 2007/2008…we just do not know it overall.

As oil prices fall and our exports stagnate we will truly begin to feel it.
I suggest that anyone doubting this go down to your local pawn store and have a chat with the owners…they will give you the real deal in your area.

Governments are predatory on populations..they are not your friend or operating in your best interest…ever. They will become ever more aggressive and dominant as this farce plays out over the next few decades.

In the end they will be gone…but so to will most of what we westerners seem to think is our birthright…or even what we consider “normal” in terms of lifestyle and expectations.

I would submit we should take a good hard look at Syria right now to see what will happen across the globe as the oil production decline really picks up speed.

#165 young & foolish on 06.13.12 at 12:59 pm

Should there not be many apartments to choose from in the 416? Are there not many empty condos in that area?

Trinity will probably be able to pick up a house in the 416 after prices correct, no?

After all, it’s not different in the 416!

#166 Bottoms_Up on 06.13.12 at 1:04 pm

#104 Zidartha on 06.13.12 at 1:42 am
——————————————-
I can have 6 beers a week for a year for $338 or less (Costco in Gatineau sells 24’s of various brands for $26….and even packs of 55 for $50).

13 two-fours x $26 = $338.

6 fifty-five packs x $50 = $300.

#167 Steve on 06.13.12 at 1:13 pm

#165 arctodus on 06.13.12 at 12:53 pm

Really? Syria as an example of where Canada is headed? Maybe to show that populations are becoming dis-content, but beyond that, there is less and less validity to make any real comparison. Our histories, our governments, our ethicity, none of them are comparable. Please, use some other country that is far more representative if you want to provide an example to look to for where Canada may be headed.

#168 Ian - Ottawa on 06.13.12 at 1:28 pm

http://www.moneyville.ca/article/1178779–marriage-ended-with-a-mortgage-debt-hangover

I think this article addresses a lot of what Mr. Turner has been saying for sometime. Underwater, stress on marriage, interest rate differential costs (12,000) on this one. Just another link, but worth reading if you have the time.

#169 Toronto_CA on 06.13.12 at 1:28 pm

New report blasting our RE bubble from the OECD:

http://www.theglobeandmail.com/report-on-business/economy/growth/canada-needs-to-jump-start-productivity-oecd/article4253814/

“Revisiting a key theme of previous reports, the OECD also highlighted the vulnerability of Canadians to a collapse in real estate prices. But the agency said signs of a bubble so far seem to be confined to the Toronto and Vancouver condo markets and household debt levels appear manageable.”

How come it is so obvious to everyone else except people living in the bubble?

#170 bill on 06.13.12 at 1:37 pm

#144 Jim on 06.13.12 at 11:10 am
hey Jim
You sound like my father in law. that aberdeen area is about to back onto a large copper mine.
the FIL has railed against this for years. I reckon there will be some upset homeowners on that ridge.
As I understand it originally ,when my fil was on a committee back in the 70’s , they recommended going north instead of south. however in the late 90’s [?] the developers [dawson construction etc] convinced the council at the time to expand southwards.
should be interesting when all this hits the fan.
that new mine is a done deal I reckon as it will provide a pile of jobs.
they shoulda listened to the fil and his fellow committee members…..

#171 bill on 06.13.12 at 1:52 pm

#72 Sherri on 06.12.12 at 11:31 pm
4000 grand a month to live in west van???

do you have this feeling that people are taking advantage of you? ever?
if not,I have a bridge for sale. for you I will let it go cheap.

#172 Silver on 06.13.12 at 1:53 pm

178 properties in my classification…
8 sales
no comparable…. period.
170 did not sell
increase in Assessment base $39,000.00 this year
each sale counted for an increase of$4,875.00 in property tax dollar “income” to my Assessment base value.

using the city’s own median scale i should be paying $3,500.00 or less not the $7,000.00 i have been assessed.
$3,500.00 increase divided by 8 sales….

this means that each sale putting cash in someone else’s pocket,
has physically cost and robbed me of $437.50 in new property tax’s….

Pissed

Silver

#173 Toronto_CA on 06.13.12 at 2:00 pm

Garth you have competition, this guy’s blog calling Canada a disaster waiting to happen was linked to the G&M:

http://www.theglobeandmail.com/globe-investor/personal-finance/rob-carricks-reader-housing-bubbles-were-number-one/article4255082/

How come you’re not on there?

#174 bill on 06.13.12 at 2:01 pm

#164 $$$$BPOE#1 on 06.13.12 at 12:53
everyone is entitled to an opinion.
even you. no matter how inane or cut of from reality that opinion is.
how are sales going for you ? any at all?

#175 John on 06.13.12 at 2:04 pm

Gmaz # 160

My sister has been trying to sell her Mississauga home for the last two months and just last week I went to visit and from driving in the area there are many for sale signs and the odd sold sign here or there. My sister is getting worried the house won’t be able to sell for the price she wants. Her realtor is hinting at lowering the price to beat out the other sellers. This market now seems to have turned down.

#176 The American on 06.13.12 at 2:04 pm

164: BPOE, much like yourself, TD is giving an opinion, not a fact. You’ve provided no facts yourself. Also, TD’s opinion is wrong. They’re being ultra conservative as not to make the natives restless. They know the Canadian real estate melt is going to be far worse than even they’ve “predicted.”

#177 John on 06.13.12 at 2:22 pm

Arctodus wrote:

“Canada entered the global economic collapse in late 2010 I believe based upon a number of metrics (employment stats, true real estate stats, export numbers etc etc). We are now at the same place the USA was in 2007/2008…we just do not know it overall.”
————-

This is a really good start to offer community-based thinking. The pump and dump housing scam ( either on a supposed “greater fool” or the owner who sit’s tight) is a window….maybe even a door. To what? Careful and lucid analysis. Transformation. Especially action. Elephants are better off left in the zoo. They don’t do well in the family room. Not for them…or the family.

One important step is to try to acknowledge the elephant before he goes charging about the house.

#178 Happy Landlord on 06.13.12 at 2:25 pm

No one seems to be paying attention to the other side of the equation, even after being mentioned in today’s post – the increasing demand for quality rental accommodation. The more I read this blog, the more I am convinced on holding onto my rental properties. And yes, there has been a shift, for the first time I had a retired couple looking to rent when one of my properties become available recently. Gone in a day with multiple offers, by the way. Thank you, Garth ;)

#179 disciple on 06.13.12 at 2:50 pm

#165 arctodus… I somewhat concur, but I don’t agree with the collapse scenario. Your real rulers would love to engineer a collapse as it would solidify their own position even further. And the evidence shows that they are working feverishly to cause you to accept this false scenario through the internet blogs and fake characters I help to expose on my blog.

Instead, what we will need and will have is a technological revolution of such far-reaching implications that most of us will wonder what the heck we were thinking wasting time with 19th-century ideas of economics and transportation. Some of them, like wage slavery, is outright medieval! And it’s not that far away. This is what they are resisting with all their power. And it is a formidable power. But the true scientific magicians will eventually win. True heroes always do. Fear not.

#180 timbo on 06.13.12 at 3:10 pm

http://www.businessinsider.com/events-in-this-chinese-city-show-just-how-bad-chinas-slowdown-could-get-2012-6

“In previous years, it was difficult,” Chen Xijun, a director at the city’s Chamber of Commerce, said in a June 6 interview in the city. “This year it’s completely dark. We have no sense of direction where the economy is heading.”

The slowdown continues……

http://www.reuters.com/article/2012/06/13/us-usa-states-salestax-idUSBRE85C0UP20120613

“The Liscio Report said 48 percent of states it surveyed met or exceeded their forecasted sales tax collections, down from 89 percent in April.

Meanwhile, two-thirds of states reported an increase in sales tax collections from a year ago, also less than the 75 percent that registered increases in April.”

More belt tightening, again?………………

#181 Can it be? on 06.13.12 at 3:27 pm

#160. What neighborhood in Mississauga? I don’t believe that for a second. My neighbors are only getting below asking bids…

#182 Bobo on 06.13.12 at 3:29 pm

You speak of borderline deflation, yet you worry about higher rates skewering housing affordability? Set that inconsistency aside for a minute and assume that latter is true. Why then do your safe investments in REITs and preferreds (the most rate senstive segments of the equity market) go unharmed?? Sorry, doesn’t add up…

BoC rate increases will be gradual, but bond market price drops will be more abrupt, leading to increase in 5-year mortgage money and more difficulty for an overpriced market. Gradually increasing short-term rates will have little effect on REITs, where long-term financing is generally locked in. Preferreds are bought for income, which will not change. Capital impact will also be marginal, since investor demand remains so strong. In short, housing – where leverage is extreme – will be impacted far more than financial assets. — Garth

#183 Fabrega on 06.13.12 at 3:31 pm

#Ronaldo

“Absolutely, I remember 1974 and later seventies well. Houses selling like hotcakes up to the fall of the year and sales coming to an abrupt end. Realtors dropping like flies. 20% drop in prices that fall. West Vancouver took the biggest hit. Runaway inflation with prices of goods going up weekly. Wage and price controls followed a year later. Rural properties and vacation properties dirt cheap. High unemployment, lots of labour strife. You all better hope we don’t go through that again.”

They (politicians & banksters) are playing with fire. That is all I can say.

#184 Mr. Anderson on 06.13.12 at 3:49 pm

# 139 The American

Curious as to where you got this information.

#185 Mark W on 06.13.12 at 3:59 pm

http://www.youtube.com/watch?v=5VAF3ypMS84

Where is the Winnipeg story?

#186 Bobo on 06.13.12 at 4:01 pm

I don’t believe the yield curve would steepen as much as you suggest to cause that disparity. The bond market would sniff out the borderline deflation theme and price it into longer-term yields as well (thus, only a modest backup in 5-year mortgage rates). Your scenario is a realistic one (borderline deflation/low inflation and good performance for REITs and preferreds), but it doesn’t come with the epic collapse in home values–stagnant or growing slightly below the rate of income growth would be more realistic.

Where did I say ‘epic’? As for the yield curve, just wait until (post-Greece) money flows back into equities from the safe haven of the bond market. — Garth

#187 Canadian Watchdog on 06.13.12 at 4:06 pm

Condo clients losing ‘lender of last resort’ http://www.mortgagebrokernews.ca/news/breaking-news/condo-clients-losing-lender-of-last-resort/123841/

“The lender of last resort may be no longer, at least not for condo clients, as B lenders pull back from financing owner-occupieds, amid fears of a correction”

Cause when the lending stops, everything stops.

#188 TNT on 06.13.12 at 4:07 pm

Some RE agents are pulling listings after toooo long on the market and then re listing, having the product appear as new in a search. Screws with the numberas a tad.

#189 Devore on 06.13.12 at 4:13 pm

#180 Happy Landlord

Canada’s rental housing is these days dominated by amateurs, whether it’s the condo for rent, a basement suite, or a house/TH some speculator is holding on to. The REITs are in a difficult proposition, as they often have to compete with amateur landlords who do not know what a balance sheet looks like, what a cap rate is, or who worry about cash flow or even being profitable. It’s just an income supplement. No wonder Canada’s rental stock is terrible. Very hard to make money on it. Even harder to make money back from improvements.

Just another way the housing bubble hurts everyone, even those not participating. There should not be such rampant speculation and gross leverage allowed in a basic necessity such as housing.

When real estate becomes a real investment again, there will be opportunities for real investors, and real landlords who treat this as a real business, because it puts food on the table.

#190 Gmaz on 06.13.12 at 4:16 pm

It looks like all areas North of Square One. Especially newer areas of Derry and Hurontario and Eglinton. I also spoke to a car dealer whose wife is an RE Agent and he said she is still crazy busy. Multiple offers on everything- SFH, townhomes and condos.

How about doing a special post on what is happening in Mississauga. Is it the area of 905 that 416 people are fleeing to.

#191 Tony on 06.13.12 at 4:49 pm

Re: #11 thinker on 06.12.12 at 8:48 pm

Wakeup call, time to wakeup.

#192 John G. Young on 06.13.12 at 4:49 pm

#140 Beach Bum on 06.13.12 at 10:46 am

“Regarding the Rule of 90, what is the most accepted way to value residential real estate?

Market price, residential only. Cash flow-generating real estate is valued with a different price metric. — Garth”

At the risk of perpetuating the stereotype that doctors are financial nincompoops…

I’ve always been confused about this. Is the rule of 90 more relevant for people who are looking to purchase residential real estate rather than for those who already own? I ask this because market prices can change quickly, especially when a bubble deflates, yet real estate isn’t liquid, so one cannot easily rebalance a portfolio in which it is considered an asset. On the other hand, the mortgage is of course a liability (usually the largest one) when determining net worth, so you really can’t choose to leave your home out of net worth calculation, unless it’s paid off. I suppose one could make the home more ‘liquid’ by taking out a HELOC and investing – I’ve done that in the past but as someone who feels he’s already pretty stable financially, I found that the anxiety associated with investing someone else’s money was more than I could handle.

I’ll stop babbling now.

Cheers,

John

#193 arctodus on 06.13.12 at 4:55 pm

#165 arctodus on 06.13.12 at 12:53 pm

Really? Syria as an example of where Canada is headed? Maybe to show that populations are becoming dis-content, but beyond that, there is less and less validity to make any real comparison. Our histories, our governments, our ethicity, none of them are comparable. Please, use some other country that is far more representative if you want to provide an example to look to for where Canada may be headed.

You actually prove my point. No offense intended.
Western mindsets simply cannot believe what can/will happen when populations begin to starve…make no mistake, the trigger for the middle eastern unrest generally was fear driven by rapidly rising inflationary pressures inside many countries as well as Syria.

I agree that culturally Syria and Canada are different. I also think that Syrians put food in one end and it comes out the other…just like Canadians and every other monkey on this planet.

As the hammer of oil availability declines hit all of us, we will see various collapse scenarios play out all over the world.

No “rulers” are in control of this, no magical technologies will save us. It is happening now and will not stop….not until economies are intensely local and human populations are a shadow of current levels.

This will not/is not/and will never be managed or controlled or planned for…it is a broad based civilizational collapse….it is the Roman Collapse of 2000 years past, on steriods and warp drive.

But your average human will not ever recognize it…and it would not matter if he did.

#194 Frank le skank on 06.13.12 at 4:58 pm

Holy sh1tballs n rice, I’m starting to see lots of re-posted houses on MLS GTA area!!

#195 Sherri on 06.13.12 at 4:59 pm

#110 Canuck Abroad
#112 TNT

Thank you for your helpful information

#88 Bite me……I’m entitled to it!

#196 GTA Girl on 06.13.12 at 5:07 pm

A big Vaughan developer has a new release subdivision (towns semis, singles) on the edges of the city. Big development in a former golf club, farmers fields.

He is getting frustrated. Seems sales are slow and he is angry that media is scaring his customers.

So in the ever wondrous intelligence of aVaughan developer, he has decided to ‘up’ the price on average for his lots $100k. And will be further increasing the price as time goes.

Because, in his angry words: “If the market tanks, I’m going to wring every cent from the buyer that walks in my door!”

Ahhh from the mouth of babes.

#197 Tony on 06.13.12 at 5:12 pm

Re: #72 Sherri on 06.12.12 at 11:31 pm

You don’t need any website. Just wait for the prices to drop two thirds from the peak before you buy. Prices will likely flat line for a decade after the fall.

#198 frank on 06.13.12 at 5:17 pm

I have been offered $930,000 for a 3 bedroom, 2 bath bungalow in South Richvale, mls N03. Bought home in 1999 for $288,000. Is this the top of the gta market or is there room to the upside? Any comments would be welcome.

#199 Can it be? on 06.13.12 at 5:29 pm

Gmaz, I don’t buy it… I drive around the new areas of Derry hwy 10, Mavis, Missisauga road and the signs , signs shows reduced prices and people are changing listings the houses have been on the market
For so long. My neighbors have already bought homes and are motivated to sell. Realtor lied to you.

#200 Riding the Pine on 06.13.12 at 5:40 pm

#36 Davey Boy
Strip clubs in Vancouver are being phased out by the City by not renewing their licences. As for the #5…operated by organized crime, last I heard. They don’t need clientele to stay open.

#105 patiently waiting
Good info. Don’t see a lot of major price reductions though. What struck me were the property taxes….easily $700/month!!! Those Van owners must really enjoy the spirit of giving…to the rest of the Lower Mainland. Thank you!

#102 WaterlooResident
RIM??? Ha! I hope you’re joking. Chasing real estate for a tech company would bring new meaning to a tech bubble/crash.

#110 Canuck Abroad
Great link!
Rent vs. Buy calculator: “It also takes into account something known as lost opportunity costs — for example, the return you could have earned by investing your money instead of spending it on a down payment.” Something not often considered by newby buyers.

#201 Country Girl on 06.13.12 at 5:49 pm

Garth,
Would appreciate your comment on the excerpt below from http://www.veteranstoday.com/2012/06/08/friday-may-8-2012-checking-in/

“Last week Canada’s banking system collapsed. The US sent them $131 billion to keep them going. Bernanke and Geithner are inventing money by the trillions, using the “slop” of a totally unregulated Federal Reserve system to underwrite half the world in pure “band aid” fashion.

We are now paying for Canada’s social welfare system, utter lack of productivity and all their self righteous bullshit about what a wonderful place they have. They are running a welfare state on thin air, we are running a kleptocracy on imaginary money and the EU has virtually disappeared.”

Hoax. — Garth

#202 Can it be? on 06.13.12 at 5:54 pm

Just stepped outside, north Mississauga. I see three for sale signs from my front door… All with reduced prices and one with a listing about to expire. My advice since listings seem to have disappeared overnight from mls… Walk or drive the neighborhood you want to live in… Something strange is happening in the real estate world. It seems like price fixing and false advertising to me. Just my opinion.

#203 Mister Obvious on 06.13.12 at 5:56 pm

#191 Devore

“Canada’s rental housing is these days dominated by amateurs…
———————-

You got that right. It’s especially true in Vancouver where the rental stock is generally in pathetic condition and run by inexperienced, reluctant landlords.

After a very long search involving months of traipsing around to highly questionable places listed on Craigslist my wife and I found a great apartment in a purpose-built rental very near downtown.

The management is courteous, extremely professional and goes by the book every step of the way. Professional residential and commercial building management is what they do for a living. They do what they agree to do and expect the same from tenants.

It really is the only way to go.

#204 I'm stupid on 06.13.12 at 6:05 pm

You can’t have nice things!

I had my home and garage broken into Friday. Fortunately my mother came by to pick up a suitcase and interrupted the burglars. My cars where not in the garage luckily. He stole 2 glasses 2 watches a necklace and bracelet. Total value 5k the funny thing is that he never found the 15k watch and 2k cash I had. My mother saw the asshole luckily she wasn’t hurt. The police got a finger print and the same guy is responsible for 4 robberies in my neighborhood in the last month. WTF is wrong with people?

#205 NorthOf49 on 06.13.12 at 6:15 pm

Hey Garth, how about giving your analysis of Hamilton. Sure, everybody thinks its cheaper here but if you lived here, you wouldn’t think so. Its not different here. Anecdotally, sales in my neck of the woods are at a standstill. Four $500K+ houses for sale on my block are dead quiet even after price reductions. Doesn’t help that we have this sort of marketing tripe headlining the The Spec:

http://www.thespec.com/news/business/article/741978–hamilton-homes-with-seniors-in-mind

The house in question was a 60 year old post-war bungalow (there are tons of them in the Hammer), pre-reno value I estimate around $225K. So after $80K in updates, a post-reno price of $325K would still bring the flipper a 25% return on his $80K upgrade investment, not bad. But at $419K, what the hell, that’s just greedy. And sadly, they’re making it look like they’re providing a service to downsizing boomers. My neighbourhood and the one in the article are only a couple of miles apart, so everything else being equal, what boomer in their right mind would downsize from their $500K McMansion into a $419K renovated bungalow? No one I know, but the agent in the article sees “a rich new vein of business” for this service in Hamilton.

If not Hamilton, how about analysis of Burlington, Milton, Carlisle, Flamborough?

#206 Blue Monster Lover of Meats and Vegetables on 06.13.12 at 6:17 pm

#97 Ronaldo on 06.13.12 at 1:12 am

”Asset deflation and price inflation can co-exist. It’s not funny. — Garth”

Absolutely, I remember 1974 and later seventies well. Houses selling like hotcakes up to the fall of the year and sales coming to an abrupt end. Realtors dropping like flies. 20% drop in prices that fall. West Vancouver took the biggest hit. Runaway inflation with prices of goods going up weekly. Wage and price controls followed a year later. Rural properties and vacation properties dirt cheap. High unemployment, lots of labour strife. You all better hope we don’t go through that again.
—–
It’s going to be way worse this time. Back then we had just broke from the gold standard and we had a real economy and lots of manufacturing jobs, savings and real capital investments ‘on shore’. Not no more! Way different this time. Once this whole fake economy crashes people will be turning into fine young cannibals.

#207 Derek R on 06.13.12 at 6:26 pm

Thank goodness! Proof that grownups outnumber sheeple in North Dakota: Voters reject proposal to abolish the property tax. While superficially appealing (hands up every one who hates paying property tax!) the abolition of property tax would have produced short-term pleasure and long-term pain. North Dakota has dodged a bullet by voting to keep it.

#208 Nostradamus Le Mad Vlad on 06.13.12 at 6:27 pm


Pauline failed a Health and Safety course at the Senior Center today.

One of the questions was: “In the event of a fire, what steps would you take?”

“F&$king’ big ones” was apparently the wrong answer.
*
#97 Ronaldo — “You all better hope we don’t go through that again.
— and —
#195 arctodus — “. . . we will see various collapse scenarios play out all over the world.”

Of note, it is interesting that in this decade, from 2011 – 2020, the Mayans, Aztecs and Incan ages all end. Going back to what the American General said in the late 1990s (when Clinton was running the show), there were seven countries in the MEast, most of whom had resources (oil, water) that the west wanted.

So far, four down with Syria, SArabia and Iran to go. At some point, Russia and China will step in and say no more. So yes, there are many possible scenarios that lend themselves here — if the US, UK and western countries default en masse, they have nothing to lose by starting WW3.

There are other options, but the one thing they cannot change is the Cycle Change.

#209 The guy in the Orange Shorts on 06.13.12 at 6:28 pm

I ,and my minions, are sitting here….in our bunker….at the ready..to pounce ……on being ….. FIIRRRSSSTTTT for the next post.

#210 Stupesing in Cabbagetown on 06.13.12 at 6:48 pm

#72 Sherri – this is a joke, right? You already lost $20 thousand in a falling market and want to repeat the same performance in another falling market? Then you come to Greaterfool and ask where you can find websites that compare the costs of renting to owning? You already found the best, most well-written and argued source on the internet Toots. And if this blog isn’t enough you can google “cost of rent vs own” and come up with another plethora of sources. For example, the Globe and Mail featured just such an article last year. And here is a link to a Canadian rent vs. own calculator. But I strongly suggest that you read a few of the back posts on this blog to give yourself the information you seek.

#211 Blue Monster Lover of Meats and Vegetables on 06.13.12 at 6:59 pm

#139 The American on 06.13.12 at 10:40 am

I’m curious… Is anyone going to address the $131 Billion Canada received last week from the U.S. Federal Reserve as a measure to “Improve access to financing and strengthen Canada’s financial system?” Hmmmmmm. Sounds like yet another hidden Canadian bank bailout, errrrrrrr “backstop” as Harper would call it, that has been completely buried to the general public.

Canada already received a $114 Billion bank bailout back in ’08, some of the funds coming from the U.S. Fed, but nary a word was ever spoken about that. That is itself was a larger bailout than what came to fruition in the U.S. on a percentage basis. If you couple this with the $131 Billion from last week, the bailout is unprecedented. Nope, not a f*cking word about this, though, right?
—-
Interesting. I did not know about that. I’ll bet that the deal is the bank of Canaduh must use the loaned money to buy US treasuries that will never be sold. It’s just a guise to make it look like a healthy market is my guess. Canada and the US$ will both be bag holders.

#212 MarcFromOttawa on 06.13.12 at 7:26 pm

#104 Zidartha on 06.13.12 at 1:42 am

I can have six beers a week for $520!?!

A 24 of Alexander Keiths in Gatineau,QC is 24,99$.
The same 24 is over 40$ at the Beer Store in Ottawa.

How much are you paying?

#213 MarcFromOttawa on 06.13.12 at 7:26 pm

23,99 or 24,99 I forget.

#214 CrowdedElevatorfartz on 06.13.12 at 7:35 pm

@#189 Mr Anderson
Hey! Leave mes amis alone.
The American loathes BPOE and thats good enough pour moi.

#215 Nostradamus Le Mad Vlad on 06.13.12 at 7:42 pm


Drowning in Debt Take the banxters, lobbyists and politicos with us! Remember the Bank Holidays credit cards dead? Flame was created for a reason; Italy Two weeks tops? Inheritance? Fuggedaboudid; Gold Hedging against Bank Holidays, FFs etc.; 11:49 clip Crash course — Inflation; The Weather Network Sunny and cloudy with cloudy and sunny periods; Next Wave of 4Closures Shadow inventory? Russia No banxters, just mafia; Unemployment as a lifestyle; 70%+ of teens jobless in summer; Fiscal Straitjacket in the EZone; US Fed’s friends did nicely with the bailouts; Iran sanctions Easy to see why China told the US to commit a sexual act on itself; Euthanasia Squads “Because we spent your retirement money on the wars!” wrh.com; North Dakota votes to keep property taxes.
*
The Sunburn and Pic. Interesting if this happens; US Navy moving 60% of its fleet to the Pacific; The Vatican and The Mafia Birds of a feather . . .; NAU – SPP; US – Russia – Syria Pot – Kettle – Black; Fukushima and TEPCO The arsonist investigating the fire, and Flame steals data even when everything is off; Diabetes “The Western lifestyle and average American diet pave a smooth road for developing various illnesses and diseases.”; SUN TV has their knuckles rapped.

#216 The American on 06.13.12 at 7:56 pm

At #186: Mr. Anderson, you haven’t heard? Figures… I’m searching Canadian websites for any kind of information surrounding the matter right now, and there is VERY LITTLE given. In fact, an excerpt of verbiage I was able to locate within Canada’s blog hemisphere and business sites states, “Financing support of $131 billion has been provided, all of it on a commercial basis to protect the taxpayer.” Funny they don’t mention WHO provided it or WHERE the money came from… The money indeed came from the U.S. Federal Reserve. Perhaps I shouldn’t let the cat out of the bag TOO soon. It will come out eventually, much like the first round of bailouts of $114Billion FINALLY came into public knowledge (albeit lightly) just this past April 30th, five years after the fact. Transparency of information to the masses is certainly not a Canadian virtue.

http://actionplan.gc.ca/eng/feature.asp?pageId=150

http://thestephenbeldingreport.blogspot.com/2012/06/duff-canadian-banking-system-bailed.html (caution, this could be deemed offensive, and I do not agree with this man’s take on Canada as a country)

http://www.huffingtonpost.ca/2012/04/30/canada-bank-bailout-cost-ccpa_n_1464398.html (this one is definitely worth watching)

Like I said, they’re totally burying this information up there in Canada. Ridiculous.

#217 Raj on 06.13.12 at 8:02 pm

Don’t trust everything you see on the TV.

http://shine.yahoo.com/at-home/8216-house-hunters-8217-fake-172000660.html

#218 Jim Lahey, Sunnyvale Trailer Park Supervisor on 06.13.12 at 8:11 pm

#150 Derek

“I think you should add. What about “SASTPGFBDCParty”? Surely that’s got to be confusing the heck out of somebody.”

Sorry for the confusion Derek. The SASTPGFBCParty stands for the Second Annual Sunnyvale Trailer Park Greater Fool Blog Dog Christmas Party which will be held right here in Sunnyvale. It is not to be confused with the FASTPGFBDCParty (First Annual Sunnyvale Trailer Park Greater Fool Blog Dog Christmas Party) which was held at Christmas 2011. We had a real blast at the FASTPGFBDCParty and all who attended will tell you it was a party for the ages (the bearded mystic sage who runs this blog was present and did not disappoint). Preparations are already under way for the SASTPGFBDCParty. Fuuursst has graciously decided to introduce the guest speakers and read some of his real estate poetry. Hope to see you here Derek! You will get a real kick out of Ricky, Bubbles, Julian and the rest of the Sunnyvale gang.

#219 Jim Lahey, Sunnyvale Trailer Park Supervisor on 06.13.12 at 8:17 pm

Sorry Derek, my previous comment was meant for #85 Bailing in BC.

#220 Don on 06.13.12 at 8:28 pm

@Dan in Victoria
Then with a look of concern he asked “Do you think its 1981 all over again?”
Its different this time was all I said.

__

Not much more you could say. He must be a decent friend.

Activity is also slower in Coombs – which went from traditional hippy etc crowd to 5-20 acre estates in the 2000’s. Now on one street alone I saw 10 for sale signs.

#221 Banker 101 on 06.13.12 at 8:55 pm

I know for a fact we received $131 Billion USD early last week. I work as a senior exec in a large bank and we were notified a portion of these proceeds would be loaned to our institution in order to make lending more easy. This means only one thing and we are in major trouble as far as banking liquidity and systemic challenges are concerned. The money was issued from the US Fed. I haven’t a clue how the government is going to keep this under wraps but they have managed so far. I did talk to my neighbour about it as he had asked how we were doing. He informed me he and his wife just took out a HELOC so they could manage paying the bills. This will not end well.

#222 KingBubbles on 06.13.12 at 9:11 pm

Great post Garth.

Looking forward to your analysis of Winnipeg.

#223 45north on 06.13.12 at 9:16 pm

T.O. Bubble Boy: linked to guava.ca to show that listings are exploding in the GTA. Canadian Watchdog says that listings are up and that banks are pulling condo financing. I believe him but guava.ca doesn’t show it.

Not yet.

#224 Banker 101 on 06.13.12 at 9:19 pm

And yes the $131 Billion USD was a bailout even if we want to call it liquidity support. We need to get honest with the situation and realize we have spent beyond our means. We are now being bailed out by Americans! What does this tell us?

It tells us you’ll believe anything. — Garth

#225 John on 06.13.12 at 9:22 pm

That whole Federal Reserve thing is a hoax. I can feel it.

Any chance of getting serious here? What exactly needs to be the tipping point?

At least ye olde 2009-10 with Harper, F & C can’t be dragged into the illusion any more. Why? It’s clear that they are barely involved.

Total hoax. — Garth

#226 Gmaz on 06.13.12 at 9:30 pm

Can it be?
How can you explain the homes selling ABOVE asking for the past months?

#227 Westernman on 06.13.12 at 9:39 pm

Derek R @ # 209,
Congratulations on being a typical Canadian… you clowns just can’t get enough of government robbing you via taxes…
Hope you are taxed into poverty, you would probably defend the taxman…
Unbelievable, absolutely unbelievable…

#228 Banker 101 on 06.13.12 at 10:05 pm

Tell us Garth why then it makes reference to this financial support on Actionplan’s website, a government website. It tells me you are not in the know.

***********************************************
And yes the $131 Billion USD was a bailout even if we want to call it liquidity support. We need to get honest with the situation and realize we have spent beyond our means. We are now being bailed out by Americans! What does this tell us?

It tells us you’ll believe anything. — Garth

#229 Gunboat Denier on 06.13.12 at 10:07 pm

200 frank – pigs get slaughtered
219 American – you can do better
223 Don – got goats?
224 Banker 101 – yeah sure

#230 Derek R on 06.13.12 at 11:23 pm

#222 Jim Lahey, Sunnyvale Trailer Park Supervisor on 06.13.12 at 8:17 pm wrote:
Sorry for the confusion Derek. The SASTPGFBCParty stands for the Second Annual Sunnyvale Trailer Park Greater Fool Blog Dog Christmas Party which will be held right here in Sunnyvale

Not to worry, Jim. I’ve added FASTPGFBCParty and SASTPGFBCParty to the GarthFAQ glossary. I don’t want to post again too soon because it would be boring for everybody to put the FAQ up too often. But I intend to post it every 3 or 4 months so you should see it in September.

And thanks for the invite to the party. I was sorry to miss the last one. I’m way out west most of the year but I visit Nova Scotia from time to time, so I’ll check my calendar.

#231 Derek R on 06.13.12 at 11:56 pm

#230 Westernman on 06.13.12 at 9:39 pm wrote:
Derek R @ # 209,
Congratulations on being a typical Canadian…

So you think that typical Canadians want to abolish every tax except property tax and natural resource royalties, and introduce a citizens dividend for everybody to replace welfare and the personal tax allowance like I do?

You sure must live in an unusual part of Canada! I want to move there.

Hope you are taxed into poverty, you would probably defend the taxman…

Taxmen come in a lot of different forms — and they’re not all from the government. Be careful you don’t get blindsided yourself.

#232 Ronaldo on 06.14.12 at 12:09 am

#200 – Frank

The TSX is up about 15% from the time you bought your home. Your house has over tripled in value in the same time frame. I would say, take your money and run.

#233 Realtor in Peace River, AB on 06.14.12 at 2:21 pm

Hi Garth, any idea how declines in Toronto and Vancouver are going to affect Alberta? Got into Real Estate last August in northern Alberta and we seem insulated from the chaos in the big urban centers. April and May I couldn’t keep up, so much activity. Now in June, things have tapered off, phones not ringing as much, but my listings are showing steady, a few new listings coming onto the market and working with a few buyers. If Toronto and Vancouver dive, imagine Calgary and Edmonton will see a downward trend which can pull the north of the province down some. At least Cabbage isn’t $28 and chicken $65 per pound like those poor folks in Nunavut
http://grist.org/list/28-cabbage-65-chicken-and-other-insane-food-prices-in-northern-canada-2/

#234 TNT on 06.14.12 at 3:14 pm

I just spoke to an established Re agent in WV, he said that some realtors are starting to freakout, no action. He quoted me sales stats from W Van last year at this time vs now, sales down 90%. All over the city the market is grinding to a halt.
I asked him what sort of correction he thought the market was due and he said based on his experience, research, history and the fact that the banks have spoken of being prepared for stress tests up to 40%, that a 50% reduction was his reply. I told this realtor i was considering purchasing a rental property and he said that his advice was not to, and to wait…. thats one for the realtors.

#235 TNT on 06.14.12 at 9:11 pm

June 14 -Vancouver Sun- business page head line.
Bank of Canada paints bleak picture of Global meltdown. Death Grip.