He signs his letter, ‘Bruce, the Greater Fool.’ Almost like a perverted badge of honour. Champion of Lost Causes. Spitting into the hurricane of momentum. A solitary figure on a lonely ledge, bucking convention like a crazed majestic mariner, mocking the very wind determined to wrestle him away in the dark forever below.
But, if not, he’s still got his Vespa and his one bedroom loft.
“I love your column and it has helped me navigate the condo purchasing process with my partner,” he says. “We are first time home buyers and on august 15th we are closing the deal on a $380,000, 650sq loft on Queen Street west. As much as I believe the market is going to plummet, we had to take the plunge because it was the right time for us. We have been saving for 5 years and are both currently employed. To mitigate the damage that is to come, we made sure to put down 20%, bought a loft in much desired Trinity Bellwoods (location, location, location). The building is 8 years old, only 6 floors with a brick exterior, and we are not investors looking to sell in 3 years, this is our long term residence.
“Even though I know you are going to call us the greater fools, for buying at the height of this frenzy, we still feel comfortable knowing that we now have a place to call home and that based on all the knowledge we gathered from you and from what we saw out there, we got the most bang for our buck before the bust.”
See what I mean about real estate? Absolutely emotional. Bruce and his other could live in the same unit, same building, probably the same floor and unit, for less money and far less risk. They could wait a year or two, offer fifty grand less, and end up owning far more equity for the same dollars. Nothing about their lives would change, except that endorphin nesting thing that having a mortgage and shelling out for monthly fees and property taxes does to the human brain.
And what’s this about a “long term residence”? Get a grip, Bruce. This is 650 square feet of concrete pad with no outside. It would be inhumane to ask two golden retrievers to live there for three years. Odds are the fuzzy warm glow of home ownership will fade in a year or two, and you’ll be back to obsessing over all those little red dots on realtor.ca.
Face it, you’re addicted. You came to this site because you are a horny, lustful, covetous, real estate junkie who wanted to get off on intimate discussions of other people’s amortizations. I feel so dirty. You peeked.
So, yes Bruce, you’re a Greater Fool. The storm is coming. You will perish. We will not look for remains. Deal with it.
Okay, let’s shove west. A year ago when the skies were full of yellow helicopters and the streets clogged with airport limos stuffed with HAM, this pathetic blog called fail. The Mainland Chinese invasion was largely a myth, I said. Vancouver prices would fall after having reaching an apex of unaffordability. Sales would plunge, listings rise, and Global TV anchors look like the world-class dorks they truly are. And, lo, it hath come to pass.
The latest numbers confirm this is not a summer lull, but a market in full retreat. Like this was a surprise.
- The price of a detached house, which sat at $1.235 million in February, has plunged $194,000 in just five months and is back at late-2010 levels. Lots more to come.
- The number of active listings has swollen by 24%. Meanwhile sales have tumbled 28%.
- There are 7,973 detached houses for sale, and last month just 787 changed hands. That’s a 10-month supply, meaning this is turning into a mama of a buyer’s market. (But don’t buy yet!)
- Average condo prices have retreated to 2009 levels. More to come there, too.
- Residential sales are at a 10-year low, down 18.4% from last year with a plunge of 11.2% from just June to July.
- In fact July sales were the lowest in 12 years, and ran 31% below the 10-year average.
- The ratio of sales to listings is barely above 11%, which means each month 89% of houses go unsold.
Given this negative momentum, the Vancouver market could lose 40% of its value before stabilizing at a bottom sometime in the near future. How near? Impossible to tell, but no sane buyer should try to catch this falling knife. It could be two or three years before underwear comes into view. Perhaps much longer.
Meanwhile, amid all this carnage and flailing limbs, what did the Vancouver real estate board’s MLSLink® Housing Price Index (HPI) composite benchmark price (the Frankenumber) do? It increased, by 0.6%.
And you wonder why poor sods like Bruce back in Trinity Bellwoods are confused.
Heroic, but pathetic. And I fully understand that.
223 comments ↓
First?
What do you call Whereverstan Hot Asian Money?
That’s right! Wake me up before you go go!
I never was good at comedy.
Sometimes I wonder about Garth’s stats…
Those came from the Greater Vancouver Real Estate Board. Worry about them. — Garth
“we got the most bang for our buck before the bust.”
There are some new ‘neighbours’ in that area who can give you a pretty good bang for your buck (some with busts). Probably wouldn’t interest “Bruce” though.
Wow. 0 comments. I can see the appeal of the “firsters”.
But then…. it just means Garth hasn’t approved any yet. I couldn’t possibly be first….
And yet… still…. ah heck, I can’t stand the indecision, the extreme torment…
I think I’ll go buy some real estate instead!!!
AUGHHHHHHHHHHHHHHHH!!!!
RATS! I knew it!
It’s Different Here !
Garth was channeling Shakespeare in that first paragraph.
Up by 0.6 %… 0.006 and I bet it is rounded up in a realtor kind of way as well. At least they have a sense of humor. BWahaha
Garho. Man. Hero to the ones that could….
Lost my battary and Train of thought
WhEn we going to get shit faced toggether. Submit button
Lmdao. D equals drunkin
Now why cant we get honest numbers like Zillow:
http://www.businessinsider.com/zillow-breakeven-horizon-2012-8
Besides this blog, there isn’t as much hate going towards realtors as there should be… They are crooks and their jobs are obsolete. The internet has done for house searching, just like Netflix has done for renting movies. There is no need to bring in a third party to help someone search for a house… and as for buying and selling… it isn’t rocket science and isn’t as hard as a realtor would make it seem. They aren’t needed when it comes to the legal stuff anyway. Any realtors reading this should wake up and find a real job. More and more private sale signs through Comfree are popping up everyday as more and more people realize what a drain a realtor is. Things are changing and I’m happy to see it.
Hey guys, thanks for the answers from my question yesterday! I appreciate it.
380k for 650 sq. ft is insaaane! And yet it seems reasonable compared to other places in TO. Uugh, craziness.
oh boy…
do i know a lot of fools to be…
buying right know.
4 new young nieces and nephews are in the plunge.
2 others i know
no real savings all levered to the hilt… the kids just fresh to the job market.
and a couple of speck builders just buying in mission.
with 7 condos between them. they work in film in vancouver… not a lot of work there right now.
Oh and a sister with 6 condos in the right area of town, tied up with the heart patient in-law developing a residential development unit outside of calgary.
on a teachers pension? really.. if you ask her. ( no idea what the bookwork looks like but heavy leverage comes to mind)…actually hubbie works for an oil co. as a ceo accountant……
not one seams to really understand compound interest… and leverage….
silver
Silver
Hindsight is 20/20: Two-thirds of Alberta home buyers wish they had waited longer to buy their first home.
http://www.smrmediaroom.ca/FTHB%20News%20Release%20-%20Alberta.pdf
I don’t know what it is about RE that makes people lose all sense of reality. 650 sq. ft? Ya gotta be kidding me. Who is going to take that off of your hands down the road?
If you could touch and roll around in your stock (or ETF) investments, maybe more people would be interested.
DELETED
Two people living in a 650 square foot space and paying over $300K? Is this becoming a third world country? That much money for “location” why, let me guess, it is next to a Starbucks or many cafes where people with nothing better to do can sit in there and watch others go by lol!
So, yes Bruce, you’re a Greater Fool
Should read
So, yes Bruce, you ARE a Greater Fool
You should undergo vasectomy as well, if you’re in for long term. Each rugrat requires at least 400 sq ft by itself, plus you have to store diapers somewhere.
Today there are more Greater Fools than prudent savers and successful investors which is a problem when the majority rules.
Greater Fools will be rescued at the expense of the rest.
Those who profit from the stupidity of the mob will be blamed for their demise and will be punished with astronomical taxes on their gains.
R.E. Darwinism :
If they say “Partner”…Life Partner……or any anything that is Not “Spouse” ” Husband” Or “Wife”, they are Post Boomers who deserve whatever happens…life of sh*tty public education and feelings of self entitlement.
All the tell tale signs around Vancouver–except large price drops…
Yes, $193,000 in a few months is a piffle. — Garth
The cooling of Canada’s two hottest housing markets has begun.
Sales of new Toronto condominiums fell by half in the second quarter from the year before, new data released Thursday show, while in Vancouver, the number of residential sales last month was the lowest for any July in 10 years.
Finance Minister Jim Flaherty has repeatedly singled out Toronto’s condo market as overheated. “I also talk to developers, and I hear from some of them who are in the business of building condos that they don’t really have a plan, they’re just going to keep building them until people stop buying them. …It will lead to a crash,” he told the Globe and Mail’s editorial board recently. In late June, he tightened the rules for federal insurance for mortgages in a bid to prevent Canadians from taking on too much debt.
http://www.theglobeandmail.com/report-on-business/economy/housing/summer-chill-cools-toronto-vancouver/article4459318/
Here you go Garth, even home builders (Mattamy in this case) can lie to prospective buyers (about buying a treed lot) to help reel in greater fools:
http://www.ottawacitizen.com/technology/Homeowners+decry+loss+trees+after+paying+premiums+lots/7026853/story.html
I certainly hope there are repercussions for the builder here, there should be no lying (or withholding of information) in real estate.
So Bruce, The Greater Fool of all, bought half of a 1300 sqft, $760,000 apartment. Sick.
Your best literary work yet! Love it! You filthy man you!
” I feel so dirty. You peeked. ”
I laughed for…oh….15min!
Thanks Garth, you kill me!
Smoking Man is proof that alcohol affects everyone differently….
Garth, why nobody (except lunatics I guess) seems outraged about this MLSLink Housing Price Index ? Why the government isn’t playing it’s role to protect the consumer ? Shouldn’t be someone who would raise it’s hand and says it is odious !!! My good lord, realism has left us long ago!
In Soviet USA, house short sell you!
RONA (RON) back from the dead with a takeover offer.
This is why you do not short individual stocks.
ETFs, maybe. But not stocks.
I signed up for TO SOLDS site’s daily emails again. With my focus on the C01 area condos. Grab a chair, watch the show.
Congrats Garth! I’ve been waiting and waiting for you to put a number and a timeframe… 40% off its peak, bottom reached in 2-3 years.
650 sqft box is not living its DEATH!!!! / Dying
650 sqft basement suit rents for around 500 to 700 bucks a month, which include all utilities, electric, cable and internet.
Total cost about 7200 a year. Just think property taxes, Cmhc, opportunity cost , mortgage, and maintenance cost will put you under.
I sympathize with the emotional pull of RE – suffer from it myself (the pull to own an avocado tree is particularly strong personally). But buying a 650sq ft condo as a first house purchase (maybe if you were 65)?, in this market? Each to their own I guess!
Daystar # 211,
“don’t hold back on us”-“If you want to beat up blog dogs”-“throw the rest of us a bone”-“why hold back on us”-“run bloggers down”-“leave us all hanging?”-“we’re all ears”
Wholly bad PSYOP dude! Do you think you could be more obvious? Being Canoodian, I bet your even, First-String : ) I guess everyone’s gotta make a buck. Your CSDD cover, is sooo…blown.
Blacksheep
That doufus, Michael Levy was at it again on Vancouver’s Global TV News at 5 yesterday…
With an intense stare into the camera, he intoned, “We are not in a bubble and it is not popping”.
These people should be …well, never mind.
I modeled a price decline of Van’s detached average price to see what’s to come in 2013. Since the downturn starting in March, the average m/m decline is running at a -3.2% rate. I plotted a conservative model of -0.5% m/m decline into 2013; here are the results. http://postimage.org/image/m1ruotn1j/
Any worse then a 0.5% m/m decline holding-up into 2013 and the MSM headlines will be killing buyers confidence right before the spring market.
What’s the situation in the Okanagan? Nostradamus, can you drop me line please, will be in your neck of the woods next month?
Revised: I modeled a price decline of Van’s detached average price to see what’s to come in 2013. Since the downturn starting in March, the average m/m decline is running at a -3.2% rate. I plotted a conservative model of -0.5% m/m decline into 2013; here are the results. http://postimage.org/image/x6w5z231j/
Any worse then a 0.5% m/m decline holding-up into 2013 and the MSM headlines will be killing buyers confidence right before the spring market.
bruce … as dumb as they come
corrextion … daystor, as dumb as they cum
bruce…. a disntce secand
Was talking to a builder warranty person in Milton, Ont. today about the more expensive brand new homes on the west end of town, which were sold at 100-200K premiums for simply being near the escarpment. He told me he’s in those homes frequently. Homes 500K to 700K. He says most are very sparsely furnished. Almost all of their money goes to the mortgage, and they’re almost all maxed out on helocs and credit cards. He thinks even a small spike in interest rates will cause many many mortgage and/or credit card defaults across neighbourhoods like this. He told me that at the last house he was at, the wife was lamenting that they could never even splurge on a take-out pizza because their mortgage sucks up all of their money.
And….he says that many of them have two luxury vehicles (bmw, mercedes, lexus…) but almost all tell him they’re leased. The cost of keeping up appearances.
Maybe Garth’s prior comparisons of Milton, Ont to Stockton, CA aren’t that far off.
What a joke.
http://www.rebgv.org/sites/default/files/HPI%20Methodology2012.pdf
Hoofy…R.E. Darwinism :
If they say “Partner”…Life Partner……or any anything that is Not “Spouse” ” Husband” Or “Wife”, they are Post Boomers who deserve whatever happens…life of sh*tty public education and feelings of self entitlement.
_____________________________________________
How about ‘soul mate’? That would make them full fledged retards, right? ‘significant other’…narcissistic little pukes who deserve a life of poverty maybe??
you people are all losers! He wants to live in a place where he can live life. Not like you people who probably live in suburbia!
650 sq is plenty of space and shame on you Gartho for saying it isn’t. He wants to be proud of where he lives unlike you animals from Brampton, Milton, Mississauga, or some other crap hole city.
Love the location, good job Bruce
650 sq feet is huge. Check out this $250 k (plus extra for parking and a storage locker) for 278 feet of luxury living. 88 Scott in St Lawrence Market area http://www.google.com/url?sa=X&q=http://www.blogto.com/city/2012/08/new_in_toronto_real_estate_88_scott/&ct=ga&cad=CAcQARgAIAAoATABOAFA97zqgAVIAVAAWABiBWVuLVVT&cd=Qif1yILp_7Q&usg=AFQjCNFErTBk7iu7lioOVQBvTCfCtF3Yjg
Nova Scotia Viewpoint:
stats for Today Aug 2 2012:
67 – forsale (or relisted)
30 – sold
59 – new price
stats for Aug 1 2012:
73 – forsale (or relisted)
30 – sold
63 – new price
$380K for 650 sq ft.
That’s $584 / sq foot!!!!!!!
…..
Whatever you drank “Bruce”, you better keep drinking, because when that high wears off, oh man……
The bald realtor out in Calgary is addicted to your blog Garth. He stalks you, saves your posts, copies and pastes them to his blog, a real groupie. Bet you wanted a diffferent type of groupie, but at least you got one!
Nice to see even the realtors can’t stay away from your blog.
*lusty moan*
Bruce, I feel you! My husband and I have been waiting for years to make the plunge. We are sick and tired of living in someone else’s basement. The good news is that we’ve squirrelled away a decent amount for a down payment, but now we’re just waiting for the right time to make our move.
We live in the Okanagan and while I haven’t been following official stats, I can say that prices have definitely come down a lot. We were on the verge of buying a place four years ago with a price tag of 250,000 and now the same units we were looking at back then are priced as low as 169,000.
The scale is tipping right now for Okanagan renters as far as what is cheaper. If you rent a basement suite, you’ll definitely save money, but if you look at the rent being asked for duplex/townhouse/single family homes, you may actually be better off buying.
Meanwhile back at the ranch some lucky couple flew in Elton John to perform at their wedding last weekend!
http://www.calgarysun.com/2012/08/01/rocket-man-lands-in-calgary
Man, there are some people with huge coin living in this city! Materialism doesn’t really impress me that much anymore but this definately stunned me a bit. Unfortunately there are many more barely scraping by. This is a crazy world.
Several months back a handsome, new, custom home on my street went on the block at about $990 K. Sold in about two weeks for asking. Today, there are two more equally impressive two-storeys for sale on the same street, about the same size, about the same price, and just a couple of stones’ throws away from each other. One is about 20 years old but very well maintained and slightly updated. The other is so fresh that the sod has barely rooted yet. Neither of these two properties have yet found love after months on the market.
Welcome to the old normal.
I’m amazed at the amount of comments metioning the insanity of the small sqft and then there is comment about entitlement. seriously, anybody who thinks this is small and is not worth buying has a greater illusion of entitlement than Bruce. Get real and see the world thru a larger window. It is more insane to expect a large home and piece of land than to prudently and practically learn to live in less space and minimize your footprint. As far as RE is concerned…. if you can’t afford to buy then work harder and save more and stop your bitching. prices may fall slightly and sales may slow but in the end they will rise again. You can;t make more land.
Garth, if market in Vancouver fall by 40%, the damage done to the economy will make sure prices will fall at least 60-70%.
Even at 60-70% correction, it will bring prices to where they should have been in the first place.
I am sorry Bruce, but you have learned nothing from this blog. You truly are a Greater fool! The only problem is, you knew the rules, but your emotion took over. I don’t think 3 years will be long term. Make it at least 10 years.
“I love your column and it has helped me navigate the condo purchasing process with my partner,” he says.
————-
No identity means poor decision making. In Canada you have chairpersons, air hostesses, partners, salespersons and whatever else dehumanizes men and women.
And then? To solve the non-existence ( which of course doesn’t matter anyway), this is now Bruce and his “other” ( referred to as such).
Know what? Canada is so far gone, that such a complaint is seen as evidence of “intolerance”. Looking under rocks for discrimination.
Of course there is no “discrimination”….the ponzi just needs “two incomes”…you sort out the rest.
What people don’t get is that breaking up the human community into neutered mainstream media trained hyper consumers is about control.
The “greater fool” brain death “choices” are about lost identity, and thus lost will. Why would people be amazed by reactive dog training behaviour. What else could be possible?
Quite maddening to watch. Canada muzzles common sense.
ROTFLMAO………!!!!
The criminal liars, cheats, thieves and conmen at the REAL ESTATE BOARD OF GREATER VANCOUVER used 26 PDF pages to explain their scam called the HPI index………yet, anyone with grade 6 math education can explain how the average price of an asset pool is calculated in about 2.
I laughed so hard when I saw that I almost lost total bladder control. A brilliant investment banker client of mine once told me………..whenever he went to the “data room” of a prospective takeover target, the more “paper puffery” and gourmet food that was present always equated to a less than sterling investment opportunity.
The real deals explained themselves with 1/5 the paperwork and a bottle of fizzy water.
ING Canada may be sold this year as per this website; http://www.canadianmortgagetrends.com/
Hi Garth: Was talking to a close Real Estate agent [Georgetown/Brampton area] friend of mine today asking him how things were going. He told me things were slow only because people were watching the Olympics…. I didn’t realize synchronized cliff diving was an Olympic event…
BigAl (Original) on 08.02.12 at 10:45 pm
Was talking to a builder warranty person in Milton, Ont. today about the more expensive brand new homes on the west end of town, which were sold at 100-200K premiums for simply being near the escarpment. He told me he’s in those homes frequently. Homes 500K to 700K. He says most are very sparsely furnished. Almost all of their money goes to the mortgage, and they’re almost all maxed out on helocs and credit cards. He thinks even a small spike in interest rates will cause many many mortgage and/or credit card defaults across neighbourhoods like this. He told me that at the last house he was at, the wife was lamenting that they could never even splurge on a take-out pizza because their mortgage sucks up all of their money.
And….he says that many of them have two luxury vehicles (bmw, mercedes, lexus…) but almost all tell him they’re leased. The cost of keeping up appearances.
Mr Gadget—A couple of years ago I was talking to the owner of an automobile dealership in the Midwestern USA (where I live). He sits on the Board of Directors of one of the maojor local banks and while the car deal was being done (Wife got herself a new Camaro—cash, no financing needed. Arguably not necessary but she’s a good low maintenance type and I reward that kind of behavior) we talked about the local real estate situation.
It was the same scenario. Big luxury houses, fancy cars but no furniture and people house poor living paycheck to paycheck. The inevitable happened. Houses now sit empty somewhere in the foreclosure process. One SFH is across the street from me. The neighbors and I mow the yard or it would look like a jungle. Realtors are starving down here. One told me he’d had two sales in 2012 and this is in an area that largely escaped the deeper troughs of the recession.
You can buy—if you have the money or pristine credit— for about $250,000 a house that at the market height went for $400,000. That is the rule not the exception. When we see the HGTV virgins getting screwed in Vancouver and Toronto, the people I know just shake there heads.
It happened here and it’s going to happen there. It may not happen rapidly—but there is an inevitability to this that burying your head in the sand will not stop.
@#22 denier Tim:
re Van condo market — a friend of mine bought a 1,000 sq ft 2BR in a building one block from Robson, at Thurlow, in 2005 for about $450K. An identical unit of similar condition was listed in Feb 2012 for $699K, and has gone through a series of price reductions down to current listing price of $499K. This anecdote indicates we are pretty much back to 2005 pricing for downtown Van condos….with more declines to come as nothing is moving anymore! Also, lots of for rent signs in Van’s west end — I think a lot of people are moving away as it is too expensive here and the job market is very very weak.
Why did the turkey cross the road?
It was the chickens day off.
#22 Tim
http://vancouverpricedrop.wordpress.com/
How about those? Maybe you can do some legwork and point out all those price increases for us, that aren’t fallout from lame attempts at starting a bidding war.
Any chance of a repeat critique/analysis of this new real estate board Housing Price Index?
#27 Bottoms_Up
You’re right, either turns on the dumbass or the asshole gene, and sometimes even both.
… no sane buyer should try to catch this falling knife…
http://en.wikipedia.org/wiki/Johann_Reichhart
Das Fallbeil. They’d put a curtain in front so the customer wouldn’t see it coming. They’d be slowly backed-up to the curtain. Just in case Mr R kept a mallet handy. Not just for a sticking fallbeil but the customer head should there be any survival instinct.
#22 Tim
http://vancouverpricedrop.wordpress.com/
Educate yourself. Yes, the have been large price drop. Recent home on Hudson in Shaunessy listed at $3.5m and eventually sold for $2.5m (listed in March and sold in July)
Garth, yes, $193k s piffle compared to $1m
–
“And, lo, it hath come to pass. We are not alone.” — Is this a full-blown, steamingly hot and sultry orgy? Also — to go along with tonight’s headline — This and Black Holes. Gettin’ kinda creepy, doncha think?
“A solitary figure on a lonely ledge, bucking convention like a crazed majestic mariner, he’s still got his Vespa and his one bedroom loft. Heroic but pathetic” — What’s bigger — the Vespa, loft or ledge? And which would sell for more?
#37 Apocalypse 2010 — “What’s the situation in the Okanagan? Nostradamus, can you drop me line please, will be in your neck of the woods next month?” — A rotting corpse has more life in it. Garth, please give Apocalypse 2010 my e-mail address. Thanks.
*
Harley Davidson Garth, you’ll like this; US Federal Deficit highest since 1940s. Lotsa links in, and The Senate yesterday passed a bill increasing taxes, which will spell the end of thousands of jobs; Save our Bacon! Sausages too. Bloody inflation; EZone Banxters fiddling while the EU burns; Markets diving like the ‘lympix; Global Canary in the Coalmine; FB insiders who dumped stock; Central Banks on alert; Jobs creating more jobs; Kraft Foods European kids not buying candy? Check the economy; Argentina EZone’s mirror? Ten Cheapest Cities in the world; Who Is Rich and who are the real bankers?
Cutting debt to GDP ratio How is that done in a shrinking economy? Synchronized Slowdown not swimming; GM Profits Tank Like Ford’s; Blackouts Like India, they could be commonplace here with decaying infrastructure; Spain and Italy are toast unless The Fourth Reich allows the ECB to print, but German warfare; Cinnabon Junk food in Libya; Budgeting is tough; 12:14 clip US insecurity? Over what? Macro Funds Better than bacon? Nasty Capital One; Private Prisons Read up, Harper et al; Gold at ECB Accident or strategy? Six a.m. in London.
*
Tit for Tat Russia reportedly moves nukes to Cuba; One Liners A few are very good; Greenland Constant change, cooling and warming; Dangerous Drug Evidently, this drug can block free will and clear one’s memory; Super Yachts Not that we could afford them, and Sunken Yacht in Antarctica; 16 Pix One Night in Bangkok; Arkansas Police How can a person shoot himself in the head when his arms are behind his back and double-handcuffed? Emergency Supplies Stocking the best.
Is DA still banned? I thought his suspension was up?
about time,we live in a universe that goes to infinity. oh but their not making any more land.done,beam me up SCOTTIE.
Realtors are going to be our best friends in the coming years. They don’t care what the prices are, only in so far as news of prices drives new transactions. This is how they make their money. No sale, no commission. As sales dry up, the average realtor(tm)(r) is going longer and longer between paychecks. With each passing month, they are more and more motivated to grind their clients down for a price reduction. Those BMW leases don’t pay themselves.
#38 Any idea where I can get the time-series data for the GTA region ? Apparently the TREB doesn’t provide the data to anyone (bastards)
http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03379.html
650 sq ft.?
Listen, if you don’t have enough radius to swing from a chandelier in the bedroom, no wonder the birth rate is down and immigration up.
#17 };-) aka DA on 08.02.12 at 9:46 pm
DELETED
Sweet!
k never mind, found something sort of useful to anyone who is interested.
http://cuer.sauder.ubc.ca/cma/data/ResidentialRealEstate/HousingPrices/
“The price of a detached house, which sat at $1.235 million in February, has plunged $194,000 in just five months and is back at late-2010 levels.” – Garth
Come on Garth..
That’s the average price of a basket of homes sold. It does not mean a low end detached home fell by $194,000. It just means the market at the upper end is stalled and may precipitate a genuine downslide. I’m sure the silent majority on this blog agree.
For those of you who flunked math; ie people buying houses right now, here is graphical representation of the HPI vs Average Price. Notice what it does to falling prices.
My money is on them dropping the HPI when markets bottom.
http://media3.marketwire.com/docs/TREB-FEB6.pdf
The folks in LA used to tell us back in 2008 – “think it can’t happen in Vancouver ? think again – if it can happen in LA – it can happen in Vancouver”.
Complicated math equations (24 pages of the HPI) are often made to confuse the simple things. This isn’t differential equations or Laplace transformations. No one knows what those are either
2 houses sell in your hood. Add the selling price up and divide by two. There’s your mean
3 houses sell in your hood. Whatever the middle house sold for is your median.
Guy who’s lowballing you. He’s also mean. Get angry at him.
When you buy high. Try not to drive your car into a median.
Make sense?
You know it’s bad when the realtors are writing craigslist ads offering to help folks get into the rental market:
http://vancouver.en.craigslist.ca/van/hou/3162884296.html
Sorry Garth but I don’t think Bruce actually does exist my gut feeling is telling me a condo developer is trying to convince the horny house lusty greater fools who read your pathetic blog in jumping in cause see honey Bruce did it! Bruce is B.S. whether he exists or not and your blog on the current Canadian housing crash is spot on.
Go Jets Go!
Toronto condo market loses steam as investors bolt
You single out one instance in Vancouver of a 15% drop on a house over a million dollars. The townhomes on the west side sure don’t have 15% price drops–yet….anyhow, glad you finally came on record as predicting a 40% drop in Vancouver…40% DROP IN VANCOUVER in 2-3 years. We were waiting to see how long it would take for you to make a prediction on the magnitude of price drop in Van
Wow! Like Garth always says, the house horny are driven by emotion. I see so much emotion in the comments about RE on this blog, in the media, like mentioned here, and in my personal/work life. I am a live and let live kind of guy, and in face to face conversations about money, real estate, any asset, I try to be as quiet as a church mouse. I don’t care to argue with insanity in my own head, why would I want to argue with the insanity coming out of someone else’s head? I simply now accept, we are all held responsible for our own decisions, whether we like it or not. I am really, really grateful for that. Bruce, Bruce, Bruce………you are going to be kicking your own ass over this forever.
#35 Boombust
Was it possible he was talking about a gold “bubble” as Michael Levy is a gold guy, not a real estate guy……that would be Ozzie Jurock most likely? Just wondering…
Bruce: “To mitigate the damage that is to come, we made sure to put down 20%”
How does that mitigate the damage? Prices of condos can and will fall more than 20% — and overpaying is overpaying, regardless whether you’re underwater when prices hit bottom. Delusion ain’t just a river in Egypt.
(Yah, I know.)
#21 Hoof Hearted –
”If they say “Partner”…Life Partner……or any anything that is Not “Spouse” ” Husband” Or “Wife”, they are Post Boomers who deserve whatever happens…life of sh*tty public education and feelings of self entitlement.”
And don’t forget this one. “We’re pregnant”. That has got to be the funniest one yet. My son who is a post boomer told me that when his wife was pregnant, a female friend says to him, “I hear you guys are pregnant”. He says to me, ”I had to reminder her that men don’t get pregnant, women do”. Too funny.
Fraser Valley Real Estate Board
Sales: July 2012 BEAT July 2011.
When there is a decline in the price of an acutal detached house, I will tell you. BTW, Fraser Valley includes the Vancouver suburbs of Surrey, Langley, etc.
If everyone has already bought a house / condo, then who will there be left to buy it from them when they want to sell?
Kind of reminds me of the joke:
“If all of the world is a stage, where is the audience?”
( Maybe its those guys in the UFO ? )
“More and more private sale signs through Comfree are popping up everyday as more and more people realize what a drain a realtor is. Things are changing and I’m happy to see it”
I have news for you. COMFREE is NOT a private for sale Real Estate company anymore. To survive COMFREE became a MLS Brokerage. Thats right the same MLS that is owned and operated by all Realtors in Canada.
He’s not truly planning to raise a family long term in a 650 sq. ft. condo? Is he? The only family he’ll be raising in that space is a pack of geckos.
#44 Book of Eli –
”you people are all losers! He wants to live in a place where he can live life. Not like you people who probably live in suburbia!”
You missed the point. The loser is the one who pays $600 s.f. for something worth maybe a half or less. Drop back in a year from now and tell us what you think at that time.
When you push a go-kart down a hill it starts very slowly. three quarters of the way down it is terrifying.
We’re at the top of the hill.
@ #44 Book of Eli
Bruce, creating a post disguised as a different user is so weak.
lol
#35 Boombust. Michael Levy is in bed with Auzzie Jurock.
#44 Book of Eli on 08.02.12 at 10:51 pm
“you people are all losers! He wants to live in a place where he can live life.”
Again an entirely unsupported argument that says you need to have a mortgage to be ‘living life’.
#22 “All the tell tale signs around Vancouver–except large price drops…”
Wow Tim, you don’t live here obviously. That, or you’re a big fan of the HPI.
Actually, the most intriguing story in Vancouver at the moment isn’t so much the reality of fewer buyers; it’s the fact some boomers, with retirement imminent, are happily going public with their decision to ‘wait’ (to re-list) until “things improve.” How long will they wait?
Number 44:
I agree! Spent 13 y of my life in a 500 sq ft, in Old Montreal. Breakfast out practically every morning, great walks, shopping downtown a walk away, Drinks at Brandys way too often, subway 2 min walk. Best years of my life! Historic, low rise bldg, that will still be there even when I’m long gone. There are work age couples who have been in their same sized units for more than 20 years. During the week, they’re right in the City close to work, restaurants, etc. During the weekends they’re off to their family cottages. I must say however, that if the price tag were 300k, I would find it quite steep, but in a great location, and with the intention of staying put for the long haul, assuming the double income is there, I can sure see the appeal.
Interesting inventory stats for Seattle according to the latest at Seattlebubble.com. 5 years after the crash inventory has gone down and prices slowing inching up…but the market is near frozen. Sellers are holding on to inventory because they are still underwater, banks are not foreclosing for the same reason, and buyers have little job security to afford to buy. Rents are going up as well. The irony is that everyone is screwed except for those who bought near the peak and have skipped payments for the last few years. The more underwater you are the less likely the bank will take action.
Cognitive dissonence is interesting to watch in action
P.s. hi hair harper
O
O
O
Yet another casualty. I keep asking myself if I had blogged more, if I had quit getting distracted with the damned narcissists, if I had stayed on topic… remained more cogent and lucid… I can’t help but ask, what more could I have done to help Bruce through his time of vulnerability.
http://www.youtube.com/watch?v=4WRoWPhLU2Q
May God catch Bruce when he falls.
#39 Keeping the Faith on 08.02.12 at 10:40 pm
I’m not quite sure whether you suffer from NPD:
http://en.wikipedia.org/wiki/Narcissistic_personality_disorder
or APD:
http://en.wikipedia.org/wiki/Antisocial_personality_disorder
… or its something more physically explained such as TBI:
http://en.wikipedia.org/wiki/Traumatic_brain_injury
Perhaps KTF is only “behaving” like these behavioral profiles for kicks but the general need to be superior and/or in control of others suggests this is more serious. Maybe he/she likes getting off on the controlling aspects of these behaviors without realizing the conditioning effect it has on his/herself by imitating those who have such pathologies. I guess time will tell as we hear more from “Keep the Faith”.
#34 Blacksheep on 08.02.12 at 10:32 pm
John has gone too far on several occasions within the last couple weeks. Here’s one from 3 days ago.
#184 John on 07.30.12 at 11:03 am Jody wrote:
“Here’s a thought, save some friggin money. I also came out of university with a huge debt, but I slept on a thermarest for 5 years until I paid that debt off”
——–
Well you just won “fail of the year” with your post. You clearly don’t understand the system, nor a normal everyday person’s part in it.
You bought a thermarest made in China, positioned yourself in a society that leverages and creates an economy with debt…all in a system that discourages savers and promotes speculation.
Then you point a finger at a muppet? The muppets paid your way…what does that make you.
Anyway, your post was a faceplant. Which is as forgiveable as muppetry. Don’t you think? – John
So whats driving this kind of behavior Blacksheep? Is it this?
http://en.wikipedia.org/wiki/Egotism
Whats the cure, humility? And how does one deliver it without shattering his self esteem. How can I convey to this person that he’s still important to this world, his life has value and his opinions count but he’s not a knowitall and he can’t talk to people this way. Through comfort and agreement? For you perhaps. For me, its humility. In the end… it’ll take more than what you and I have to give.
Here, I’ll bring you up to speed on what I really think is happening these days not just with this blog but with most of them, CBC, CTV on down and keep in mind, we don’t see what’s censored. If we did, you would understand why I’ve taken the time to put up these links. There is a culture developing here through anonymity and the internet that is reflecting the behaviors of mental disorders. To me, at least, its obvious and since this blog in particular deals with possessions and systems and human emotions and yes, psychology and intellectual discussions at times, a certain genre of disorders frequent here. Are these disorders at the root, or are they emulated or learned behaviors that later desensitize the general public towards such behaviors becoming more… normal and accepted? Is mass media at the center of it? I think so.
Its impossible to know the percentages of what comes from actual disorders aside from behaviors that are acted out but one could look at the comments here as an example and get an idea of whats happening and its not just here. Its on most blogs everywhere. I never used to be big on censorship but now that I’m more aware, I know its definitely needed and once again, if we only knew the content of what was being censored, we’d get some idea of just how dark and widespread it can be. Here’s a stat to chew on. More than 1 in 3 will have some kind of mental disorder within their lifetimes:
http://en.wikipedia.org/wiki/Mental_disorder
and we have plenty of them, some of which are demonstrated on this site:
http://en.wikipedia.org/wiki/List_of_mental_disorders
As such behaviors from various disorders either full blown or merely acted out, do they really add or contribute to the conversation in any meaningful way other than to put the world on notice that humanity has its fair share of problems? My own thoughts similar to what psychologists observe is that 1 in 25 have a clear personality disorder that is cut and dried while a further 1 in 25 are borderline or disordered to a lesser degree and thats just one gendre of disorders. It doesn’t make them nuts persay, one has to be psychotic to be a true nut, y’know, unreachable, but the problem is 3… maybe 4 in 25 total are acting these same behaviors out and as such, this 1 in 25 that have true antisocial personality disorders from early childhood development (perhaps early childhood cruelty is a better phrase) are complimented with numbers that are growing in today’s culture through conditioning and thats definitely not good.
Enter into the equation group or pack mentality (blog dogs know what I’m talkin’ bout) and mentally disordered leaders can leave their mark on the systems of today not just with their governance and laws they pass, but with leading nations to war, perhaps even world war as has been in humanities past.
Social engineering:
http://en.wikipedia.org/wiki/Social_engineering_(political_science)
… ironically, is the one thing that stands in the way of history repeating itself. Social engineering is in itself a duel edged sword… from government laws to public schools, I cannot emphasize enought the need for it, the need for the rule of law and education but the pressures on politicians and anyone else involved in the design of the system or systems within the system to get it right are immense and cannot be understated. Its a balancing act between freedom and functionality. Who wants to pay taxes or be governed right? Until we think about what kind of world it would be without our systems and/or what makes them strong and what I’ve seen over and over especially in the world of business is this lack of responsibility or accountability for one’s actions from the environment to the way we look out for one another socially and its ripping this world in two and behind it Blacksheep, is this general theme that repeats itself over and over, that we are all “products of our own environment.” What is the organizational culture of “FOR PROFIT” organizations?
http://en.wikipedia.org/wiki/Organizational_culture
I’m seeing too much of this:
http://en.wikipedia.org/wiki/Antisocial_personality_disorder
… fueled by pride and greed. What do we need? More of this:
http://en.wikipedia.org/wiki/Peace
and this:
http://en.wikipedia.org/wiki/Kindness
but we also need a whole lot of this:
http://en.wikipedia.org/wiki/Humility
Unfortunately its a painful process because the only way we’ll ever achieve this last one is with the truth and sometimes it simply can’t be served any other way than cold.
Hi Garth!
Don’t suppose you know when the painting (in today’s blog entry) was produced?
Going by approx. dimensions – one cow length = about 8 ft, this makes the craft about 45ft in diameter, which sems to be on a par with many “official” reported UFO descriptions.
Interesting . . . .
My cows are longer. — Garth
The Housing Price Index is a prime example of the old adage “You can prove ‘anything’ by selecting the right statistics”.
If renovations are accounted for in the asking price, then why is a house which has had few or no renovations not properly discounted at the outset? This is particularly relevant in the case of properties where renos have been slim to nil for decades, and the asking price is the same or very close to similar homes which have been well-maintained and renovated in a reasonable fashion over the years.
For example, last weekend a friend of mine joined me to look at an open house on our block. The owners are an older couple who mostly keep to themselves. The house is an average 38-year-old bungalow in a nice Saskatoon neighbourhood and they are asking $330K.
On the outside, the house was appeared to be neat and well-kept with fairly new paint. But when we walked through the front door, it was like we were in a time machine: It Is No Longer 2012, Welcome to 1975, Babies! What hit me first was the thick green and magenta shag carpet that was in nearly every room (I thought carpet should be replaced after 20 years max.), and the faded linoleum floors. But what I saw next was truly chilling: the appliances were all original and all Harvest Gold; the downstairs was done completely in dark mahogony panelling; and on the walls were black velvet posters/paintings of Elvis, Bozo the Clown, and Tommy Hunter. To top it off, all of the phones I saw were rotary.
All that was missing was Led Zeppelin playing in the background, and mabe a lava lamp and a bong and the picture of 1975, as it really was, would be complete. It was so damned surreal that I was expecting a real estate agent to suddenly appear from around the corner: a guy with a perm and tinted granny glasses, wearing bell bottom jeans, a suede vest and a peace sign chain around his neck, saying, “Hey baby, don’t get uptight, but, like, do you dig making an offer on this groovy bung?”
As I said, they were asking $330K for a house that is nearly 40-years-old, with no evidence of renos whatsoever. I kept on thinking, my God, I wonder what shape the plumbing and electrical is in? My estimate is that this house required $50K of work, minimum. Walking down the driveway, I just shook my head. A house listed at $330K that should have been listed at $280K or less. It was far out, man.
If prices are coming down, interest rates at their lowest level ever and people like the ones that read this blog scared into selling, wouldn’t NOW be the best time to buy? Most people, like the ones who come here stating that they should live within their means, wouldn’t know what to do with their profits. Think about it, when you hear some doorknob that comes here, whines about a 40% loss, there’s someone on the other side of the deal who bought a place at a 40% discount!
Don’t be cowed into selling or discouraged from buying. Now is the best time to buy!
Great idea! Make sure you let us know how it turns out! — Garth
#41BigAl (Original)
Who needs furniture when you can list your home using “virtual” furniture.
This guy has the balls to flip a house for $849,000 in Milton.
http://www.realtor.ca/propertyDetails.aspx?propertyId=11951382&PidKey=-1521437189
There are a lot of unfurnished homes in general in that 500-700K price bracket because people are flipping them. The bigger question is will buyers now and in the future be willing to pay an extra $100,000+ to live in the Heathwood “estates” in Milton. That whole escarpment cookie cutter area is in trouble.
Also, it was just a matter of time but in Milton there is actually a cookie cutter home listed for close to a million bucks.
http://www.realtor.ca/propertyDetails.aspx?propertyId=12268236&PidKey=761517475
Yes, this will not end well…
#20Michael F
You have hit the nail on the head. The prudent few will be taxed into extinction to pay for the stupidity of the mob.
#73 TRT
You weren’t on here complaining when the opposite was happening and the higher end homes raised the value of everything below it at the height of this bubble. Quit being a hypocrite.
What does this phrase mean?
“before underwear comes into view”
While I’m at it, although you haven’t used the phrase for a while, what do you mean by “the orange guy’s shorts”?
to: Book of Eli and Bfore
No one’s shocked at the size of the condo, but the PRICE of the condo….and whether Trinity Bellwoods is a desirable area…well, it depends what you’re looking for.
Thousands prefer Brampton, Miss and Milton. That’s a choice they make. I know people who would laugh at Trinity Bellwoods (wanna be hip) and would scoff at suburbia. But these people would also never pay that much for a 650sq condo.
Bruce and partner, hope you’ll be happy with the neighborhood and the size of your place for a long long time.
Did anyone else think that Bruce and his partner are not planning on having a family and that the two of them should be happy together forever living downtown in a place that size? Not that many same-sex couples end up having children.
Bruce, you could have paid full price for the place, and you will still loose the same amount of net worth when the market drops, so you did not mitigate anything financially – the way to “mitigate the damage” would have been to wait a little longer. What 20% down did for you is avoid paying CMHC, so even if you have confused reasoning, good on you for going at least 20%.
$194k is about half of Bruce’s new place, so hardly a piffle, even in the $1m range.
Received an interesting RE flyer yesterday showing, as usual, stats for an ever increasing market. The small print declared the numbers were based on a 6 month moving average. Denial of the popping bubble has a mathematical expression! It will take at least a quarter for the 6 month moving average to reveal that the ship has turned, while the severity is constantly smoothed over.
#51 Bfore
I’m amazed at the amount of comments metioning the insanity of the small sqft and then there is comment about entitlement. seriously, anybody who thinks this is small and is not worth buying has a greater illusion of entitlement than Bruce.
_____________________________________________
I think you should wake up !
with roughly 2/3rd of population being immigrants/descendents in GTA/South Ontario what do you really have to offer them?
Do you really think that Quality Skilled People will come to
8 months of winter,
to eat Diesel Food ( picked green brought by truck boat train) ,
pay most expensive housing in the world, and
get arrested in cars, and
raped by Telecom firms like nowhere else in world
in-slaved by teachers Union, to
breathe polluted air in
Sharp-Continental Climate with poor vegetation period?
..and all this in country size of Europe with population like Romania and Hungary ?
There is reason why this country does not have population like lets say India.
Therefore Housing should necessity and should never be BOSSINESS.
Whoever made housing in harsh climate business is criminal!
Give people affordable housing and they will come…
Trick question: Which came first, the chicken or the egg?
Answer: Neither, it was the rooster
I’m confused by the HPI index resilience as well but the methodology seemed logical to me – what are its flaws?
#99 Daystar
You should read Sloterdijk’s ‘Critique of Cynical reason’ if you haven’t done so already. It may help you in understanding the history of our present cultural situation. Then after, just for shits and giggles, page through Foucault’s ‘History of Madness’. It may give a you a fresh perspective on disorders throughout history.
Riddle me this Garthman.
If a homeowner knew for certain that real estate prices were to drop by 50% and linger there. Would it not be wise for them to take a reverse mortgage before the fall, thus providing them with cash plus leaving them a place to live the rest of their life? Rent free.
Bruce, don’t worry. 20% down, good location, unique building, better than putting 5% down on a tower in City Place. You’re good. Just pay down that mortgage, and start saving… Don’t listen to these fools and their comments, most still live in their parents basement, and have been waiting for a market crash since the 1980s, but in reality can’t afford houses whether there is a crash or not
Hey Garth, what will happen to real estate in Canada if the government dramatically increases the number of immigrants allowed in to Canada each year. Think about it.
Good for Bruce and his kindred spirit cohort. As far as looking at the world thru a big window; for sure he will be able to see his next door neighbor. Since he has reduced his “footprint.” Living downtown, beside being able to afford to be in first name basis with panhandlers; the other footprint he will have to worry is trying no to step in dog poop. Yeah, some very conscious dog lover, leave them behind to remind us that the world is a shitty place. Enjoy it in good health.
Daystar wrote:
“I’ve seen over and over especially in the world of business is this lack of responsibility or accountability for one’s actions from the environment to the way we look out for one another socially and its ripping this world in two and behind it Blacksheep, is this general theme that repeats itself over and over, that we are all “products of our environment”.
——–
Yes, and the “narcissism” you speak of is the fruit of such an environment.
Why the muppet culture? Why do people talk about “net worth” connected to a casino? Why would a lottery winner who accidentally “made money” in the “market” judge “mob behaviour”( like the condo-buying behaviour)?
You’re right. It’s narcissism.
As far as “talking to people like that” ( hard challenging)…it does move the discussion.
You take a “Ned Flanders” approach. It’s heady. Not emotional. Thus it’s dehumanized. Desexualized. Neutered.
Would you even think about posting the “role of the Bank of Canada” now…referring to Mark Carnival Carney as “Mark”?
Never. It would be ridiculous.
We all do faceplants when kicking around hard issues. You. Me. Everyone. I was a muppet…most people have been. I won’t be again.
Think of 1. State 2. Capital 3. Family. How did those go in Canada since 1945? State and capital got together..the family is in ruins. It’s a crime to be a man for example.
Backdrop for the neutered condo-purchasing “people”. Whoever they are. They don’t sound clear on this. This is the problem. Speak to it. You’re not. Narcissism IS the issue.
“Nice guy” Driving Miss Daisy and Ned Flanders is a lile of crap. It’s not human. Real people are behind all of your “analysis”.
Get real.
Realtor TNT just like the other realtors are in a world of hurt and in a panic as the RE market is crashing at a faster rate then even the blog dogs thought possible. From Vancouver to Toronto sales are down over 50% in some parts. Prices down 16% in Vancouver and Toronto is down 15%. Realtors hate Garth since he is educating the people of the facts and truth. CREA would never allow people to see the real stats which they hide. The government needs to force these lying criminal to open the books and allow freedom and democracy to see the truth.
The realtors have made every single neighborhood in Toronto ‘secure’ and ‘desirable’. TB is crap at night, the durggies and bums lounging in the park. No direct public transit except the horrendouslu slow streetcar. Crowded streets jammed with parked cars. It sucks.
These guys are totally screwed.
Same unit, same building in 5 years $239k.
Katz @19 – Bruce won’t need the vasectomy.
Bruce – I presume its not too late to back out. I have done more or less exactly what you have done and regretted it very much. To avoid wasting my time later – ‘I told you so!’.
I would be very interested on Monday in any first hand experience of open houses or builders show homes as in are they still packed out with potential buyers?
canus: Interesting inventory stats for Seattle
The more underwater you are the less likely the bank will take action.
corollary: the less underwater the more likely the bank will take action. Canadian banks may take the track that sooner is better.
Garth,
If Bruce is willing to lose his 20% in exchange for getting what he wants in the immediate future, then what’s your problem ?
And who knows, perhaps his lifestyle is such that the small place really suits him. If he is never there and perhaps travels a lot for his job or something then a place like that would be perfect. A “pied à terre” as we would say over here in Quebec. A place to hang your hat when you are in the city.
I think that as long as Bruce knows what he is jumping into then he won’t be surprised when the market comes down and he can say, “I knew this would happen but went ahead with it anyway”.
Sometimes life decisions don’t make financial sense but life is short and some don’t want to waste years waiting for something better to come along. I can respect that, as long as they know what they are doing.
As I have said in previous comments here, I honestly don’t understand why anyone would buy a condo: no terrain of your own since others are piled under and on top of you; property taxes just the same; condo fees which sometimes equal rent; cheap building; neighbours above and below you etc. etc. … just don’t get it .. BUT, for some this seems to be what they want. As long as they know what’s coming and choose to do it anyway, AND they have the money to lose .. then let them have their fun.
Enjoy that condo Bruce but just be sure to use a condom (ie. condo + an “m” so easy to remember) ’cause the instant you decide to enlarge your family, that 650 square feet of space will become extremely cramped and unsuitable and you with have to sell and take your lumps.
Cheers,
HHHW
53 John – chairperson? Ait hostess? Salesperson?
If you’re complaining at least get it right!
Chair (Yes, just “Chair”)
Flight Attendent
Sales Representative (“sales rep”)
Now back to our regularly scheduled blog….
#19 Katz: “…plus you have to store diapers somewhere.”
*****************
OR…you could go back to using cloth. And save the landfills? As well as a ton on money? LOL
Can anyone provide good websites to monitor monthly stats for vacation property: vancouver island, sunshine coast, okanogan valley, etc. Time to start the vulture watch.
honest numbers like zillow ?what about agents that are salaried
=============
http://www.theregister.co.uk/2012/08/01/how_can_banks_stop_it_crashes_happening_again/
‘A retail bank is nothing but an IT company with a banking licence’,” Chan told The Reg. “While this may seem extreme, when one looks at the economics of any retail bank, it is clear that this is the case.”
A routine procedure shouldn’t kill a bank’s core operation for three weeks, and the actions of one employee or team of employees shouldn’t affect 17 million customers, he said”
Royal Bank of Scotland
RBS computer failure to cost bank £100mRoyal Bank of Scotland expected to announce compensation fund and may increase PPI mis-selling provision
Share 23
Email Jill Treanor, City editor
guardian.co.uk, Thursday 2 August 2012 14.19 BST
WOW! This is called reporting? I didn’t think I was that right about The Toronto Star pumping condos ever since they sold their parking lot for a three building project which they are hoping to see built – but this is shorter than an obituary! I can see it now – “Hey Steve, edit out these details. No need to mention inventory is at all time high. Be sure to mention everything is up, up, up. Print it!”
http://www.thestar.com/business/article/1236504–toronto-home-sales-slide-in-july
Maybe it was a report submitted by their obituary writer?
For the sake of funny, I was listening to radio and comic talking about how he was driving down south and saw a sign by the side of the road that read “MOBILE HOME ESTATES”. I near wizzed on my seats! So off to google for evidence and guess what?
http://shreveportamclass.com/wp-content/uploads/2012/07/DEER_CREEK-432×700.jpg
Here are a few Mobile Home Estates right here in Ontario. Perfect investment to diversify away from those risky Toronto condos.
http://www.rainbowestatespark.com/images/bulletin.jpg
http://www.kenronestates.com/gallery/
What makes them mobile? Tornadoes!
I can make a convincing case that Bruce is not a “greater fool” as we define the term here, but some other maladjusted form.
To recap, a “greater fool” purchases an asset at an inflated price believing an even greater fool will be present in the future willing to purchase the asset for an even higher price.
While it’s irrational to think such a scenario can last indefinitely, we can all understand that it is essentially a form of gambling that involves ever higher risk and reward.
But Bruce? Not so. He admits up front that no greater fool will be available: “As much as I believe the market is going to plummet, we had to take the plunge…”, and he chooses to buy regardless.
Ergo, Bruce is not correctly described as a greater fool. I leave it to the dawgs to coin a term for this interesting new beast.
TREB Monthly Resale Housing Figures http://www.torontorealestateboard.com/market_news/release_market_updates/news2012/nr_market_watch_0712.htm
As expected Garth…
“The MLS® Home Price Index (MLS® HPI)* composite index, which allows for an apples-to-apples comparison of benchmark home prices from one year to the next, was up by 7.1 per cent year-over-year.”
#87 – “I have news for you. COMFREE is NOT a private for sale Real Estate company anymore. To survive COMFREE became a MLS Brokerage. Thats right the same MLS that is owned and operated by all Realtors in Canada.”
Comfree did not become an MLS brokerage, they went head to head with MLS citing that it was a monopoly and the competition bureau agreed with them. In order for them to post on MLS, Comfree and others (Property Guys, 2% Realty, etc) have to have a broker listed.
Congratulations Bruce on your condo.
There were 7500 other sales in GTA in July, GTA is cooking baby!
DELETED
Toronto home sales in July down 1.5 per cent from year ago, board says
The Canadian Press Aug 03, 2012 09:50:28 AM
The Toronto Real Estate Board says July home sales in the city slipped 1.5 per cent compared with a year ago.
The board says there were 7,570 homes sold last month compared with 7,683 a year ago, as condominium sales slowed.
Board president Ann Hannah says new mortgage lending guidelines and the additional cost of the Toronto land transfer tax prompted some to put their buying decision on hold.
The average selling price in July was $476,947, up four per cent from a year ago.
Vancouver home prices decline are all in the high end homes. This is in all property types. Except in Richmond. Where all properties prices are slipping. In the Fraser valley board, sfh is sticky while attached are slipping. It’s a mixed bag of goodies right now.
Bob @ #31 Does not seem to read too well…
“Given this negative momentum, the Vancouver market COULD lose 40% of its value before stabilizing at a bottom sometime in the near future. How near? Impossible to tell, but no sane buyer should try to catch this falling knife. It COULD be two or three years before underwear comes into view. PERHAPS MUCH LONGER.
I live in Melbourne Australia and things are not looking to good for our RE market either
“He signs his letter, ‘Bruce, the Greater Fool.’ Almost like a perverted badge of honour. Champion of Lost Causes. Spitting into the hurricane of momentum. A solitary figure on a lonely ledge, bucking convention like a crazed majestic mariner, mocking the very wind determined to wrestle him away in the dark forever below.”
Garth, have you ever considered quitting your day job and writing the next Giller? Your subtle pairing of the picture with the opening paragraph might be a subliminal warning to the loyal blog dawgs that you are contemplating a switch. Being a fiction writer has to be much less stressful than having angry realtors taking aim at the bullseye on your back while accusing you of writing fiction anyway.
Ok so 650sqf is small, but when the window pops out it’ll seem much bigger.
BRUCE –
what if she gets pregnant? That’s what me and my now husband did – got a condo, got pregnant, those balloon things only work 90% of the time and the pill… around 87%.
We did a fast wedding to save face, and now can’t sell our condo but don’t have room for our baby.
– I can’t wait for the baby, but sure hope to find an extra bedroom somehow…
Ah, the smell of deceived youth who believe their dwindling space, lowered level standards, and austerity is for the greater good. The guy paying 350K for 650 sq. ft. is a hero; after all he’s reducing his carbon footprint!
Have you ever stopped to wonder why this environmental responsibility and thus burden often seems to shift disproportionately towards one generation (e.g. the young)? What are the baby boomers sacrificing for the sake of the environment? Oh that’s right, nothing; they have two to three houses just for themselves while at the same time instructing their kids in schools/colleges to cut back due to greenhouse gases. My young generation it’s time you get a grip, you’ve been conned. Often that professor who preaches urbanization is a 50 year old without children living in a single detached family home of 3000 sq. ft.!
Hopefully, the young will one day come to the realization that global warming is a scam just like real estate. In fact, the scam artists who fabricated global warming are often IN LEAGUE with real estate tycoons.
After all, if you can convince future generations to overpay for a small box and overpopulate in a given area (generating profit for you), while keeping your McMansion mostly unhinged by density (rises real estate values for you), isn’t that great for you? That’s the generation contract the boomers have offered their children. The boomers get to keep all the big good houses, while the young have the privilege to overpay for the small boxes the boomers are selling. Hey, don’t worry kids it’s actually good for you, it reduces your carbon footprint! Give me a break!
I call bullocks; I’ll reduce my carbon footprint the day that YOU, Mr. Baby Boomer, reduce your carbon footprint! In fact, I’ll strive to own the biggest house possible (without going into debt) just because I know it will eat the baby boomers up inside to see someone younger, fitter, hotter, etc. with a bigger house than them. Make no mistake, making this generation of smug stuffy nosed people jealous and bitter of me would make me very, very, very happy!
Once the boomers die, I’ll take the house and turn it into an orphanage or something, as it was never truly about the money. . . I can’t help but to dream of the day I hand the middle finger to all of my baby boomer detractors.
While the price of Bruce’s condo may/will drop in the coming months/year, 650 sq feet of space can work. Its easy to furnish and the lack of extra room trains one to buy only what you need and not what you want – which in these coming days – I believe more people will have wished they had learned that lesson.
Twelve years ago my realtor tried to convince me to not buy our 2 bedroom 650 condo from where I can walk to work and is central, and wanted me to instead buy a waterfront condo in yaletown (instead of a 4 block walk). He said we could easily afford it and was speechless that I said that despite a 2-income household, I wanted a place that only one salary could carry in case one of us lost our job, etc. Because we were not over mortaged we dbled our mtge payments, and 5 years later were mortgage free. We dont’ feel we are shortchanged. We also don’t have to mow lawns, and any repair bills are shared with the other 47 units in our bldg. Yes, if we had bought in yaletown we could have sold it for more – but when my husband was out of work we just reduced the amount of money that we saved during that time – nothing else was altered. Every one needs to make their own decisions on how they want to live, so what we did may not be for everyone, but there are advantages to a small space. The main question Bruce – or any new buyer wants to ask themselves – is, “can we afford this purchase – and all of its related costs – if our salaries were reduced/mortage payments rise/one of us are injured?” If the answer is yes, then great and go for it. Timing of market is another question… no matter what you are buying.
If Bruce said he had a fiance, gf, wife etc, people could warn him not to get her pregnant. When a man says he has a partner, it is code for dancing on floats in a parade this weekend. I don’t think Bruce has any worries about having a bambino or bimbo any time soon. but that is just my opinion fwiw.
Prices are still going up in Edmonton. New upgrader and refinery projects will make real estate here skyrocket. 1 million average SFHin 3 years or less will be the norm here soon.
#117 Tony – “Don’t listen to these fools and their comments, most still live in their parents basement, and have been waiting for a market crash since the 1980s…”
Tony, sweetie, there WAS a crash in the 1980s. Two in fact. That’s why some of us, who were already grown ups then, are so worried by what we are witnessing now.
GTA July Stats http://www.torontorealestateboard.com/market_news/release_market_updates/news2012/nr_market_watch_0712.htm
Sales of all type in 416 were down. In 905, sales were flat (within +/-2%) except townhouse up 24% (because of the pre-sell?)
#133 Mister Obvious – “Ergo, Bruce is not correctly described as a greater fool. I leave it to the dawgs to coin a term for this interesting new beast.”
How about GREATEST FOOL?
#103:
Maxing your debt at “historic low interest rates” is stupid. The average person getting a mortgage over the last 5 years has been borrowing as much as the bank will allow them to borrow, which is why prices increased so much.
This leaves them with virtually no extra money to put down on their principle, which also means they pay off virtually no principle in the first 5 years of ownership. The average person with a 25 or 30 year mortgage is going to pretty much pay double the cost of their home in interest to the bank when they are done and since they are going to be maxed out for that entire time, they will contribute virtually nothing to savings, at a time when everybody is saying that we need to save MORE because of structural changes to the economy in the future.
The truth is, Joe-Average-Canuk buy because they see their friends and family buy, so they judge it to be “safe”. Its just the usual human flocking mentality. We see this in other areas of our lives. For example, people don’t save because they see their friends spending every last dime, so they think its ok to do the same thing. Deep down inside, everybody knows this is all stupid, but we do it anyways.
#142 Jill on 08.03.12 at 11:43 am
>BRUCE –
>what if she gets pregnant?
What makes you think it’s a she? It says partner. Maybe that’s how you live in a 650sqft condo – with a same gender partner who shares your wordrobe – thus saving closet and storage space.
http://www.businessinsider.com/these-maps-and-charts-show-why-the-average-american-is-totally-screwed-2012-8?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheMoneyGame+%28The+Money+Game%29
“A sweeping analysis of inequality in the U.S.
Wage disparity in America surpasses that of even Russia and is more comparable to China or Mexico, according to the charts. ”
Ouch, charts hurt the eyes………
http://www.cnbc.com/id/48475469
“Brent crude oil futures gained further ground on Friday as investors were heartened by higher-than-expected jobs growth in the United States in July, which improved the outlook for oil demand in the world’s biggest oil consumer.
Both Brent and U.S. crude were on pace to post modest weekly gains as the better-than expected jump in jobs additions, even with a small rise in the unemployment rate, to 8.3 percent, sparked a rally in equities markets and pushed the euro up versus the dollar. ”
Got to love the logic. Higher oil prices because unemployment rose around the world. Enjoy the party because food prices are going to cause wip-lash……….
Interestings stats released today from TREB.
It seems that the mortgage rules did nothing to bring down prices. Note that in the first two weeks of July prices were flat, however SFD went up a nice 8% in the last two weeks. Also active inventory is at 20k, considered low. No crash if you don’t have desperate sellers. There was an increase in the amount of million dollar homes sold y/y.
Is DA still banned? I thought his suspension was up?
Garth adds three months to his sentence every time he tries to post — so it should be up to a year now…..
Garth’s prediction is not coming true about 416 versus 905. 416 is caving first!
Talk about small living quarters:
http://www.realtor.ca/propertyDetails.aspx?propertyId=12110284&PidKey=-99999406
Love how the agents are trying to sell the house at the same time as for either ‘land value’, ‘young urban professionals’, for ‘down-sizing boomers’ and for parents looking for university living quarters for their kids!!
Gotta cover all your bases!
“This home will appeal young urban professionals, baby boomers looking for a small home in the city, developers wanting to build a large executive home or parents looking to house their University students for a few years.”
We can discuss for hours why prices go up or down, houses price rises or drops
but people think about it – why in the hell we got into this madness of talking about it
all the time? There is no more beautiful things on Earth to discuss? I live in Vancouver
and every conversation with my co-workers does not start the way how our secretary
got a nice new miniskirt or how this new receptionist look like nice babe, but noooo –
always about the stupid houses, prices, how much you earn on it how much you
lost on it. House is a place to go home a sleep. And that’s all. Weekend you should spent
in beautiful nature not walking from room to room and dancing in joy you have a freaking
house.
Garth,
Love the blog. Might I suggest?
– Revamped look to the site
– Ratings for comments and sorting along newest, oldest, most popular?
I see this is on wordpress, this is a pretty straightforward thing to do.
Cheers from a fan.
Trinity Bellwoods is a dump, you can’t see it – but will in 4-5 years.
I am still in a state of shock, and cannot wrap my mind around this insanity. They save 20% for 5 years to buy a $380,000 shoebox loft with no view; not to mention the closing costs and condo fee expenses to take a walk in the park? Imao, as they are throwing away 5 years of savings to end up with a property that will have no market; will be underwater for a decade; and when the term is up with higher interest rates become debt slaves, or will they end up in the park living in a tent? This is by definition pure insanity!
@ Jill
Wow! I didnt know people still married to save face… Say hi to the 50’s for me!
The Open Houses were everywhere, in Vancouver. People, instead, were at the Beach, yesterday.
I have a friend who has a home he has listed and then de listed three times.
He just fired his fourth agent.
He bought another home = sure, he was going to sell his piece of crap shoebox in Yaletown. That was six months ago.
He is hoping to break even. He won’t.
I told him to get aggressive and dump it and get out.
I have one friend, who bought 5 condos. He bought and furnished them with HELOCS from the other ones.
I wonder how he is sleeping tonight.
#128 Daisy Mae.
Cloth or disposable, they still need to be stored somewhere, both clean and dirty… and though you might save the landfills you are still dumping chemicals into the environment from detergents and burning elctricity running the washer and dryer… I did cloth for two kids, the costs and ecological footprint are only smaller because they tend to potty train out of cloth earlier than disposables.
Those Toronto stats smell a bit fishy to me, especially the detached 416 numbers.
Mid-month, there were 417 sales of Detached Homes in “416”, with an average price of $728,834.
Full-month, there were 852 detached sales and an average price of $752,431.
So, doing the math, the average price for the 435 detached homes sold in the second half of July was $775,052…. $50k higher than the first half of the month.
another civil servce pig in the trough exposed
http://news.nationalpost.com/2012/08/02/alberta-officials-resign-after-health-officers-exorbitant-expenses-revealed/
how many hundreds of thousands of these a- holes are still gorging in the public purse? the losses to the public multiply when we add up the legacy contracts to the fat union elites that take 100% of entire ministry tax reciepts. Think of it…whats the point of even thinking about why patients are dying in the hallways when you know that every time there is another tax increase ‘for hospital care’ it all gets raked off in wage and perk increases for the elites?
Wake up you dingwits.
Re: #44 Book of Eli on 08.02.12 at 10:51 pm
No sane person or people would live in a 650 square foot condo. Even people from the third world have enough brains to rent a huge house with many people in it. The bank will come a knocking when the value drops 20 percent later this year.
114 Anotherlowlyrenter:
I’m confused by the HPI index resilience as well but the methodology seemed logical to me – what are its flaws?
……………………………………………………………………
I’m wondering the same thing. The way they explain it is that it results in a more apple-to-apples comparison, which sounds reasonable. For example, it supposedly prevents skewing of numbers due to a few very low or high prioced properties?
Wish someone could elaborate.
Gunboat denier wrote:
“53 John – chairperson? Ait hostess? Salesperson?
If you’re complaining at least get it right!
Chair (Yes, just “Chair”)
Flight Attendent
Sales Representative (“sales rep”)
Now back to our regularly scheduled blog….”
———
Cool…just free associating. I’m sure you could take 10 minutes, think it through, and come up with 10 examples of social labels that neuter the population. This is a reality. Describe Canadian men for me. I’d like to hear your definition. In reality, it’s spoken in our social narrative every day and in every way as people participate in the ponzi….real estate currently being the most obvious event.
Maybe you think that the issue isn’t a big deal…so why bother posting? Ironic isn’t it? You’re courting the illusion of being a creative contrarian and on the ball…but deny a powerful and legitimate point…out of hand.
What I’m referring to is an oppressive, nasty, multi-decade social change in Canada that is a HUGE part of why we so easily caved into the cheap money.
If you don’t stand for something ( your own identity), you fall for anything. Which is what happened in Canada.
You’re a man, aren’t you? And you think what I’m saying is a sidepoint…going back to a regularily scheduled alternate reality?
You busted yourself. You might think being part of a “denier” culture will provide cover, but that too is an illusion. You can not be more alone than when taking in the cold comfort of denial.
Too heavy? Maybe a few hours of cable could lighten it up. That is the Canadian male in large part…isn’t it?
I don’t think Bruce and his partner are getting anyone pregnant, save for maybe with a turkey baster and some handstands.
OMG! It’s done. Sold!
Here’s the numbers.
Bought 2004 124,000
Renos 15,000
Buy/sell trans cost 15,000
Sold 165,000
8 year profit 11,000
4% annual return on investment
Not much to be excited about here
So many friends have drank the koolaid. I’ve lost count of the offers of a basement to rent already.
Daystar # 99,
“a certain genre of disorders frequent here.”
“I never used to be big on censorship but now that I’m more aware, I know its definitely needed”
“if we only knew the content of what was being censored, we’d get some idea of just how dark and widespread it can be.”
“As such behaviors from various disorders either full blown or merely acted out, do they really add or contribute to the conversation in any meaningful way”
“Social engineering is in itself a duel edged sword… from government laws to public schools, I cannot emphasize enought the need for it”
————————————————–
Can you say, Thought Police. We “NEED” Social engineering? Dog forbid, someone think critically, then shares ideas on a public forum, they’re labeled as broken or defective and needs to be sent for behavioral modification?
If that doesn’t stick, We’ll just censor the message.
Ah….but thanks to the W.W.W. everyone’s gotta soapbox.
So I end up here. With you, having this fruitless discussion as you attempt to deploy, more discrediting tactics. Why? Because some cattle, can clearly see the fences?
Could you be more transparent.
Blacksheep
#141 lawboy
pretty funny.
You have to be nuts to put down 380k for 650 square feet.
My garden is bigger than that… on my landlords property. Yes we rent a 2br place above the garage and have a garden! Both are much larger than 650sq feet.
#48 Jek on 08.02.12 at 11:07 pm…
“…but if you look at the rent being asked for duplex/townhouse/single family homes, you may actually be better off buying.”
In the Okanagan, we are nowhere near pricing that matches rents.
I believe when you see annual rents come in at more than 1/15 of the purchase price then buying makes more sense.
For example:
SFH at June 2012 average – $475K; rent would have be more than $2600 a month
Townhouse at June 2012 average – $ 316K; rent would have to be more $ 1760 a month
As in SFHs, high-end condos’ pricing has a long spiral down before buying makes any sense.
If you don’t like your current suite, there are hundreds of other rentals – but this is the wrong time to buy.
Period.
Buying that 650 sq ft condo at 380K sometimes does not always work out in the long term and may need to sold earlier. This could create a stressful time especially in a falling market. Some of the reasons:
– breakup in the relationship i.e. divorce.
– loss/change/relocation of a job.
– outside issues in the area i.e. boredom, prefer to be in another location.
In a increasing market this is a non issue as residence can easily be sold higher than buying price. However, in a deflating market obviously the one were in will have to take a loss if need sell residence. Renting residence out is an option but can be a headache if you don’t want to be a landlord.
#35Boombust on 08.02.12 at 10:34 pm
According to Freudian psychoanalytic theory, this guy just uses defence mechanism, to deny reality. The stupid look on his face just confirms that.
The real message sounds like this:
“We are in a bubble and it is popping”.
#109 steve: No, you are not the only person to guess that. And yes, lots of two-person families live quite comfortably in that amount of space (but typically purchased at a much lower price premium).
#171 Tom.
Your numbers are way off.
124K plus renos of 15K and closing costs of 15K put you at a 154K investement.
11K profit on 154K invested is 7.1% over 8 years.
7.1/8 is roughly 0.9% per year, assuming non compounding.
A place to live, and that’s it. You’re lucky you didn’t get roasted.
I’ll post it again why average prices are holding up.
TREB Average and Median Prices By Area/District. Q1 vs Q2
https://docs.google.com/file/d/0ByrPFSoPLahJMlBjaVhndUcxRDg/edit?pli=1
The areas with the highest q/q price increases happen to be:
Markham, district of Unionville median home prices up 51% q/q: Pre-construction area
Mississuaga, district of Creditview median home homes price up 18% q/q: Pre-construction area
Newmarket, district of Stonehaven median home prices up 29.8% q/q: Pre-construction area
Richmond Hill, district of Langstaff median home prices up 44% q/q: Pre-construction area
Brampton South median home prices up 28% q/q: Pre-construction area
Have a look at Buzzbuzzhomes’ new home sales calender. Developer’s sales offices are completely dead, therefore they are selling units off MLS, adding dollar volume to GTA’s average price.
Don’t expect big price drops until Q1 2013. That’s when the fireworks begin.
Our premier will surely investigate these extravagant expenses as soon as she comes back from her ‘business trip’ to the London Olympics where she is promoting our lovely province on the international stage. LOL
i do declare
Moya pension scheme made by or on behalf of Tudor Capital Management Ltd between 1st June 2007 and 30th April 2010.
Four people connected with Tudor Capital Management, a pension scheme administration service provider, have been arrested on suspicion of fraud, cheating the public revenue and money laundering.
=
Former tax boss pleads not guilty to £5m fraud using ‘fictitious’ scheme
Professional Pensions | 02 Aug 2012 | 13:05
=
Read more: http://www.accountancyage.com/aa/analysis/2193800/treasury-opens-the-pandora-s-box-of-tax-avoidance#ixzz22Ut9jLss
A list of characteristics of avoidance schemes is provided in the help sheet. They include:
• It sounds too good to be true
• It involves artificial or contrived arrangements
• It seems very complex for what you want to do
• There are guaranteed returns with apparently no risk
• There are secrecy or confidentiality agreements
• Upfront fees are payable or the arrangement is on a no-win-no-fee basis
• The scheme is said to be vetted by a top lawyer or accountant but no details of their opinion are provided
• The scheme is said to be approved by HMRC (it doesn’t follow that this is true)
• Taxation of income is delayed or tax deductions accelerated
• Tax benefits are disproportionate to the commercial activity
• Offshore companies or trusts are involved for no sound commercial reason
• The involvement of professional trustees is claimed to guarantee success
• A tax haven or banking secrecy country is involved for no sound commercial reason
• Tax-exempt entities such as pension funds are involved inappropriately
• It contains exit arrangements designed to side-step tax consequences
• It involves money going in a circle back to where it started
• It involves low-risk loans to be paid off by future earnings
• The scheme promoter lends the funding needed
• There’s a requirement to take out insurance against the failure of the tax planning to deliver the tax benefits
http://www.accountancyage.com/aa/news/2194971/icaew-guidelines-spell-out-unethical-tax-avoidance-boundary
Read more:
==============
Billions in Identity Theft–Related Tax Fraud Undetected by IRS
Washington, D.C. (August 2, 2012)
http://www.treasury.gov/tigta/auditreports/2012reports/201242080fr.html
http://www.treasury.gov/tigta/auditreports/2012reports/201242080fr.html#direct
By Michael Cohn
@ #171 Tom from Mississauga on 08.03.12 at 1:41 pm
OMG! It’s done. Sold!
———-
You’re omitting the value of 8 yrs of saved rent. The seller is better off (ie has more cash after closing) than someone who rented for 8 years.
That is not always the case and will far more infrequent going forward. — Garth
#85 TRT on 08.03.12 at 1:38 am
Fraser Valley Real Estate Board
Sales: July 2012 BEAT July 2011.
When there is a decline in the price of an acutal detached house, I will tell you.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
TRT – I’ll try to simplify this for you…FVREB Stats,
Average Price – All property types down 7.7% (YOY)
Average Price – Detached down 2.3%
I’ll take a wild guess and say that an actual detached house price declined last month.
#104 neo
Who needs furniture when you can list your home using “virtual” furniture
——————————————————————
My favorite is the last pic of the 3 empty walls.
Oh look honey walls come with this house…
#156 Ahsan
“Garth’s prediction is not coming true about 416 versus 905. 416 is caving first!”
Same with Vancouver area. Surrey sales up, Vancouver down.
#157 Bottoms_Up
I didn’t know Bilbo Baggins lives in Ottawa.
Ahh Garth, you may want to delete # 137 from “Sherry Cooper.”
It links to a blog that spews anti Semite nonsense.
Just sayin’
Done. That was from a regular poster who is now a former poster. — Garth
#143 Jill.
I, uhhh, don’t think Bruce’s partner is a woman.
Just a guess.
#44 Book of Eli on 08.02.12 at 10:51 pm
Spoken like a true realtor
#51 Bfore on 08.02.12 at 11:21 pm
Spoken like a true realtor.
#103 Buy? Curious? on 08.03.12 at 5:51 am
Are you buying something right now or are you one of those “do as i say not as i do” kind of people?
I’m certain that Bruce’s partner is of the same gender as he is which makes it a lot easier to plan a famil. He may find that he will have to delay his plans (if that’s what he wants) or raise his child in a box.
Prediction of US recovery? Think again:
Egon von Greyerz: “The real unemployment is 23%. The Nonfarm Payroll going up by 163,000, if you look at the seasonal adjustments and the birth/death model, those two adjustments were 429,000. So they added 429,000 out of nowhere, on paper.
If you take those 429,000 off of the 163,000, instead of an increase, you get a 266,00 decline in payroll. So the figures are nonsense….
Do any of these Condo Owners ever stop to think what the conditions of their buildings and the area they live in will likely be even in ten years when they are financing their purchase over twenty five years?
If/ When the real estate correction really starts to bite, there is likely to be a severe enough disturbance in the force that a whole lot of these buildings/ suites could end up being rented out to others and those others could be a lot less desirable as neighbours than the remaining owner occupiers would wish or are currently envisioning.
Such extreme high density living areas and buildings are not conducive to passive peaceful living over the longer term, especially with a country and society that has been undergoing such rapid social and economic change over the last several years and probably for the forseeable future.
genie controllers
…
Post-Crisis Iceland Is Test Site for Too-Big-to-Fail … – Bloombergwashpost.bloomberg.com/Story?docId=1376-M7Z9HK1A1I4H01…You +1’d this publicly. Undo
10 hours ago – The Icelandic lawmaker who presented the motion, Alfheidur Ingadottir, … is to pass laws akin to the 1933 Glass-Steagall Act, which separated
========
The Ramsay Principle is the shorthand name given to the decision of the House of Lords in two important cases in the field of UK tax, reported in 1982:
Ramsay v. IRC, the full name of which is W. T. Ramsay Ltd. v. Inland Revenue Commissioners, Eilbeck (Inspector of Taxes) v. Rawling, and its citation is [1982] A.C. 300.
IRC v. Burmah Oil Co. Ltd., the full name of which is Inland Revenue Commissioners v. Burmah Oil Co. Ltd., and its citation is [1982] S.T.C. 30, H.L.(Sc.)
In summary, companies that had made substantial capital gains had entered into complex and self-cancelling series of transactions that had generated artificial capital losses, for the purpose of avoiding capital gains tax. The House of Lords decided that where a transaction has pre-arranged artificial steps that serve no commercial purpose other than to save tax, the proper approach is to tax the effect of the transaction as a whole.[1]
The decision is not limited to capital gains tax, but applies to all forms of direct taxation, and is an important restraint on the ability of taxpayers to engage in creative tax planning.
1981 to 2001,” he says. “That was a House of Lords decision which did in effect create a general anti-avoidance principle. What we need is to actually go ahead and get that legislated but what we’re being offered is no such thing
http://en.wikipedia.org/wiki/The_Ramsay_Principle
#115 Kaganovich on 08.03.12 at 8:39 am
I’ll definitely give it a good look. (haven’t used the library card in a while, its time :) Thanks for the suggestion.
Until I read about a 6 (at least) month-over-month price decrease in most major markets across Canada, I will not believe that the real estate momentum seen over the past 10 years has abated. The latest headlines that sales have decreased or that the average price is down X% from the previous year have not convinced me that anything has changed.
So? — Garth
CREA: Can you publish our MLS Home Price Index instead of average prices?
Bloomberg: Sorry we don’t know what that is.
CREA: It’s our new formula that takes out volatility by only selecting properties with stainless steel appliances and granite top kitchens, that way, those older outdated homes with price reductions don’t get included in the price.
Bloomberg: Sounds like core CPI that excludes oil prices and substitutes products.
CREA: Exactly.
Bloomberg: Umm, we run a professional service here, so if you don’t mind average prices will do.
CREA: OK. Just make sure you don’t use the word plunge.
Bloomberg: You bet.
http://www.bloomberg.com/news/2012-08-03/canada-realtors-post-lower-sales-in-july-as-vancouver-plunges.html
I love intelligent humor. Garth, you are a very talented writer, and even if my opinions differ, you are still a delicious treat to read.
My grandfather was a successful realtor, and when they started building 650 sf condos, he laughed. He used to call them a “mouse house”.
I just about peed reading this article. You’re right, Bruce is peeking over the fence watching you suntan. Voyeur.
What’s the monthly cost of this rodent den, on a per sf basis ?
seattle homelessness
Food Bank Renovation/Expansion — Jewish Family Services Food Bank: $500,000
These funds will allow the agency to complete their food bank renovation, which will increase their service capacity by nearly 25%. The agency has seen a 16% increase in clients this year compared to last year, and a 40% increase from two years ago.
Location: 1601 16th Avenue, Seattle, 98122
http://www.seattle.gov/humanservices/community_development/CDBGRecoveryFundingPlan.pdf
The poverty rate in Washington State is 11.5%.
My cows are longer. — Garth
We were going by “our” cow – a Pinzgauer (which is about 7 1/2 ft nose to bum) Mind you they are classed as a “compact breed” so maybe a bit shorter than the average. I’m “reliably” told by former Agri colleagues that the Friesian-Holstein crosses can grow up to 10 ft nose to bum, which is pretty gigantic.
As you can see we’re “Hoping for the best but planning for the worst” – a survival strategy that seems to have worked well for others in the past!
Prices won’t move down to quickly as I believe there is a large pool of people who even with these low rates and miniscule down payments still can’t qualify to buy at these levels. As prices move down they will buy, once that pool is used up another drop, another group of “qualified buyers” steps up, rinse repeat. Slow asset and currency depreciation along with inflation in the things you have to have, food, fuel etc. This is assuming the CB’s can artificially keep rates low and the real economy doesn’t tank even with all the .gov spending,all bets on asset depreciation are off if either of those happen.
#192
The same can be said about houses as well though. Communities change as well. I suppose it might not be as stark as it would be in an actual building but it can happen.
So? — Garth
So…the stats cited in today’s blog (and previous entries) are not indicative (yet) of any trend, in either direction. This is not a swipe at you; I think home prices are outrageously out of whack, but I won’t believe that the real estate frenzy witnessed in Canada has lessened based on year over year stats or comparisons to sale levels from 10 years ago. Those are tactics that CREA uses to support their agenda and I don’t believe them either.
“People can come up with statistics to prove anything. 14% of people know that.” -Homer Simpson
Come back in ten years and I’ll have a long-term report. Bye. — Garth
#120 John on 08.03.12 at 9:09 am Daystar wrote:
Why the muppet culture? Why do people talk about “net worth” connected to a casino? Why would a lottery winner who accidentally “made money” in the “market” judge “mob behaviour”( like the condo-buying behaviour)?
You’re right. It’s narcissism. – John
Describing people as muppets could be depending on the context. The rest is economic materialism from what I can tell and this link is worth a read because its a big part of the psychology behind why people spend too much for too little on RE that they believe gives them stability until it comes time to do the math:
http://en.wikipedia.org/wiki/Economic_materialism
As far as “talking to people like that” ( hard challenging)…it does move the discussion. – John
So does being cordial and polite. It can’t work in all circumstances but it does with most.
You take a “Ned Flanders” approach. It’s heady. Not emotional. Thus it’s dehumanized. Desexualized. Neutered. – John
Thats one way of looking at it. My own view is that there are comments out there that are cruel, its not necessary or called for and if I have time in my life I’m going to call the sources of such cruelty on it, describe the mindset that engages in it and where it leads to or comes from. I believe its necessary now for some of us to move on from it.
Would you even think about posting the “role of the Bank of Canada” now…referring to Mark Carnival Carney as “Mark”? Never. It would be ridiculous. – John
Its a RE/financial blog. Mark became actively involved in media with a concerted attempt to illustrate risk and talk down housing. As Garth has indicated, the numbers fell before CMHC regs tightened. Evidence suggests this wasn’t a wasted exercise. Of course, the role the BoC plays in housing is relevant and will be so again but things are quiet now.
“We all do faceplants when kicking around hard issues. You. Me. Everyone. I was a muppet…most people have been. I won’t be again.” – John
We all have growing pains, true. Describing ourselves or others as muppets, I can’t help but find as condescending and takes the place of a better choice of words don’t you think? Bruce was used as an example by Garth for good reasons. Bruce conditioned himself with reasoning that was unfounded or false in order to make a decision to buy a 650 sq ft condo for $380 K.
What lines did Bruce swallow in order to make this kind of decision? It wasn’t “RE will always go up” or “it makes good financial sense”, it was more likely (I’m guessing here) “I can live with 650 sq ft for the rest of my life and take losses on valuations and still be happy”. “I can do this to make my wife happy”. “We don’t need more than this to be happy”.
No doubt, Bruce can be happy with a 380K 650sq ft condo. What Bruce doesn’t see coming is that if (and I say “if”) he ever loses his job or mortgage payments double from what they are today 5 years from now because rates hit 8% from our banks, Bruce’s plan could go bust. Even if this doesn’t happen, Bruce’s assumed generous nature to give others shelter or participate in philanthropy is off the table for the most part because he now has neither the space or the budget. Bruce quite simply didn’t assess risk properly because of a belief that today’s variables would not change… and yet, change they do.
Bruce needs to learn how to take what the universe has to give him. In some ways, he likely has but not fully (we need patience for that) but at the same time, he needs to avoid what self interests in this universe want to take from him and there are beliefs within ourselves that can blind us from such dangers. Bruce will survive this but the decision to buy a condo like that for that price… its a costly mistake.
Garth couldn’t have described the outcome of what’s happening here with Bruce any better than the way Garth has, at least to me. Its worth reading again and note, he didn’t have to call anyone a muppet. All Garth had to do was tell it like it is and it comes from experience. From what I can see, Bruce made an emotional decision fed by inexperience and a belief that he can handle financial loss and Bruce likely can handle financial loss, its not the end of the world but why make things so hard on yourself? And why do we need to be ostracized as “muppets” by others in the process? Is that necessary or needed? There’s too much of that already in this world.
Think of 1. State 2. Capital 3. Family. How did those go in Canada since 1945? State and capital got together..the family is in ruins. It’s a crime to be a man for example. – John
I doubt that its a crime to be a man in this world but as for the rest, you know the answers. Technological advances such as birth control and communications leading to mass media, pressure on families towards dual incomes, indebting the middle class through housing, we know why:
http://en.wikipedia.org/wiki/Social_engineering_(political_science)
http://en.wikipedia.org/wiki/Economic_planning
… and you’ve touched on it. We are all going to make mistakes including the design of the systems that help society function which is why its so critical to remove “self interests” from the equation especially in the arena of politics and thats why I continue to harp over and over, this message that we need a new cast of players.
Backdrop for the neutered condo-purchasing “people”. Whoever they are. They don’t sound clear on this. This is the problem. Speak to it. You’re not. Narcissism IS the issue. – John
Its one of the issues. Behind all psychological disorders are common themes but the most common denominator I keep finding over and over is that people with mental disorders of all kinds including depression (and there will be a good deal of this coming in the future as assets devalue) have an inability to properly self examine themselves. I’ve already touched on why. Mistakes within the designs of our systems, economic materialism exploiting the masses for self interests, parental abuse and neglect, abuse and neglect children face on their way to becoming adults and the way adults treat each other. The best chance we have at turning this around is through social engineering (public schools, laws, belief systems) and mass media with human/environmental health the primary focus. In some area’s we are doing ok but in others, we are collectively failing.
“Nice guy” Driving Miss Daisy and Ned Flanders is a lile of crap. It’s not human. Real people are behind all of your “analysis”. Get real. – John
How does one respond to that, John.
#168 Investx
HPI is like CPI, except just for houses. It consists of a “basket” of features, like # of bedrooms, garage size, deck, attic, finished basement, square footage, but also things like how close it is to a pool, park, school, grocery store, etc. These are all weighted and assigned values. Very highly subjective. From these metrics, the “typical” property is derived and priced.
The problem with the HPI is the same as with the CPI. The “typical” person described by the CPI simply does not exist. Neither does the “typical’ benchmark house. These metrics (hedonics) are determined, weighted and valued basically arbitrarily. Or they might as well be, because we cannot see them, so the HPI is a black box, no one can replicate the numbers or verify them. We have to trust the model is correct (it has been changed twice this year already) and shows the correct and true trend.
In truth, real estate is a highly segmented and localized market, so a single value cannot describe it sufficiently. There will never be a perfect HPI, so using more objective numbers, like average and median, is probably more suitable. You can smooth out most volatility with things like moving average and seasonal adjustments, which anyone can calculate for themselves.
#166 Hey come on, Merali was just trying to catch up to the Aga Khan. Check out his CV sometime. Cheap at twice the price I’m sure.
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#53 John — “The “greater fool” brain death “choices” are about lost identity, and thus lost will.”
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#172 Blacksheep — “Can you say, Thought Police. We “NEED” Social engineering? Dog forbid, someone think critically, then shares ideas on a public forum, they’re labeled as broken or defective and needs to be sent for behavioral modification?”
Interesting that two posters at opposite ends of the time frame are saying roughly the same thing — As a society, we are being dumbed down to be ordinary sheeple, who don’t have the slightest idea of what it is like to ask uncomfortable questions which make higher-ups squirm in their seats, point out the simple realities of life (life is very simple — it’s people with a love of power and greed who mess it up for others).
But fear not! We are rebel sheep here, sheeple without a clue, sheeple who stand on their back legs and bleat for freedom! Give me liberty or give me death! I will never become a subservient sheeple! Also, this link. “Yes, the public is wearing a t-shirt that has a line drawn near the bottom with a slogan that says, ‘No thinking above this line’.”
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Real Sanctions against Iran The central banxters don’t like the gold for oil policy; July’s Jobs Report “If the NY Times is saying not to pay too much attention to the jobs report tomorrow, then it must really be bad.” wrh.com; Truckers are smarter than banxters “So should we be worried about what the truckers are telling us? I think so.” and Less than 25% Shows a better reality on good jobs, and Numerical difference in full time and part time jobs; Dark or pitch black? Motor City has become Dump City; RBS Nationalization or bankruptcy? Annuities Poor payouts; Iceland Check out the placard the person is carrying; Greek protests Bank employees walked out; RBS Paying for misdeeds; Citizens tuning out TV ain’t called the boob tube for nothing. CNN has also had an 80% decline ( here ) in viewers, because no one likes a liar.
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Russia Three warships on way to Syria; The Toilet America needs to use it; Osteoporosis Dangerous, and Aspartame Side effects; 52 min. documentary Money Talks — Profits before Patients; Why Kofi Annan Quit “China and Russia lost billions of dollars worth of assets and investments in Libya’s oil industry following the duplicitous NATO intervention in that country last year, where Beijing and Moscow were duped at the UN. It looks like these powers are preparing this time to not forfeit so easily their respective interests in Syria.”; Russia – China veto “In my world, there is no such thing as coincidence: everything is a question of timing.” wrh.com.
This is so funny as just found out that Garth and I were at UofT together during the same time frame, but was 2 years ahead of him. I remember him well, as he was that good looking guy with all the girls upstairs at the Brunswick House listening to the best jazz bands, but nothing for me. :)
Devore on 08.03.12 at 12:19 am
#27 Bottoms_Up
Smoking Man is proof that alcohol affects everyone differently….
“You’re right, either turns on the dumbass or the asshole gene, and sometimes even both.|
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Is there a difference?
66McLovin on 08.03.12 at 12:43 am
Is DA still banned? I thought his suspension was up?
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He tries…but he’s in such a state that Garth keeps deleting him.
#175 Snowboid
That’s because in this crazy market, purchase price vs square footage is more of an exponential function, while rent vs square footage looks more logarithmic. One of the appeals of the tiny condos for investors is that, aside from the lower cost to entry, it is easier to make the numbers work. With a house, you’d have to put at least 50% down to get positive cashflow, and your return on investment is still terrible. Absent the speculative price increases, you’d be better off putting your downpayment in the orange guy’s shorts.
#73 TRT: “It does not mean a low end detached home fell by $194,000….”
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Garth didn’t say it did. He was talking about one particular listing.
#172 Blacksheep on 08.03.12 at 1:52 pm Daystar # 99,
Can you say, Thought Police. We “NEED” Social engineering? – Blacksheep
Did you bother to open this link?:
http://en.wikipedia.org/wiki/Social_engineering_(political_science)
Are you aware that our state schools that we call public aside from jurisprudence is a direct product of social engineering? Perhaps you are libertarian and believe all schools should be private and pay as you go. I’m not one of them. What I do however, believe is that our cirriculums could dive deeper into the world of self examination. State schools are just one example of social engineering and didn’t I describe it as a dual edged sword? Obviously it can work for or against.
http://en.wikipedia.org/wiki/State_school
As for the rest, I continually feel like I’m conversing with someone who really hasn’t got much of anything nice to say and thinks of people as cattle. How would you approach that?
#183 Dontcallmeshirley
Not necessarily the case. Notice the original accounting is omitting several important ownership costs:
– property taxes
– financing costs (mortgage interest and insurance if applicable)
– maintenance and repairs (only the $15,000 renovation is listed) also think things like lawnmower, pressure washer, gardening tools, deck paint, etc
– structure insurance (renters only insure contents)
– title insurance
– opportunity cost of downpayment and principle repayment (which will be significant over 8 years)
There are other costs as well, such as owners usually buy the largest house they can afford (and thus need to heat/cool it, furnish it with nice things, etc) where as renters usually rent the smallest/cheapest place they find suitable and fill it with cheap, but adequate furniture.
It’s not that simple of a scenario, and even if prices go up it is no guarantee you’re better off buying.
I bring up my example frequently, where I sold basically at break even vs renting over same period of time, but then I had the intangible COSTS of ownership, like the stress of selling and moving twice vs staying put at my rental.
137Sherry Cooper on 08.03.12 at 11:05 am
DELETED
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You’re kidding! LOL
EVERYONE reads your blog! You’re getting under all the realtors skin…and I say kudos.
Just about damn time! They’re done!
Daystar
From what I can remember, those titles don’t sit in the stacks much; rather, they sit on professors’ shelves for six months at a time. You may get lucky though.
#141 Cramer: “Being a fiction writer has to be much less stressful than having angry realtors taking aim at the bullseye on your back while accusing you of writing fiction anyway.”
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I don’t think angry realtors would faze Garth. This sort of stuff is right up his alley. It’s what he’s been waiting for. And they’re taking the bait….
Daystar, thanks for taking the time to examine all those points. I can see where you’re going with it.
I disagree with social engineering…and also think your understanding of the impact of our training-experience in family-society is more than you’re saying. We are collectively narcissistic, but only individual grieving works( a totally individual experience…made real through it being witnessed by at least one other person).
Society-family has no mechanism for the real individual, and that is what leads to such poor judgment. You need reality for good judgment. Social engineering does not and cannot provide this. It makes things worse.
As far as driving miss Daisy, muppets and nice guys…in the real world those icons are not respected. Let’s just shorten it to “nice guy” then.
Lot’s and lots of nice guys take out 500,000 dollar loans due to being nice.
It’s insane. No man would do it ( in a lot of the scenarios painted here).
A guy has to look in the mirror…if you see a muppet it means that there’s still work to be done.
Time for realtors to start blaming somebody else for declining sales, because speculation and reckless borrowing isn’t a good enough reason.
http://toronto.en.craigslist.ca/tor/reo/3182428326.html
Like I said Garth, FSBO is bigger then ever and partially the reason why TREB listings aren’t rising even faster. The market is much worse then what’s being reported.
#211 Devore on 08.03.12 at 7:37 pm…
Crazy market indeed.
If we ended up renting our winter home down south, attainable annual rent is about $1250 a month.
So to purchase the same home (20% down, 25 yr amort at 3.8%) the payment including taxes/HOA would be about $ 760 a month.
This is for an above-average 1500+ sq ft SFH with .25 acre lot in a nice area.
The same calculation to purchase the Okanagan condo we occupy would require a payment including taxes/strata of $ 2500 a month – or almost double our rent!!!
170 John – too funny!
#216 Kaganovich on 08.03.12 at 8:27 pm
Looks like they moved some copies. I’ll give them a look:
http://en.wikipedia.org/wiki/Critique_of_Cynical_Reason
http://en.wikipedia.org/wiki/Madness_and_Civilization
Thanks again.
218 John on 08.03.12 at 8:42 pm
Things are far from perfect and thats why theres room to debate. Catch you on the flip.