The cataclysm

flood

Looking for a house in soggy Toronto, in a ‘demand area’, move-in condition, all reno’d up on a deep lot, with granite, for less than $350,000?

Well this is your lucky day. Here she be. Listen to realtor Henry (Ich) Mau’s lyrical description:

Totally Brand New Renovated House In Demand East York Area, Appr. $50,000 Upgrades, Re-Strengthen House Construction For More Stable, Front Deck Veranda Railing And Stone Floor, All New Windows Around House, Privacy End Unit, Fenced Long Backyard Back To Dieppe Park, Bus Stop In Corner. Steps To Parks Community Centre And Schools, Minute To Dvp. Property Was 2 Bedrooms House Original, Living Can Be Divided 2nd Br, Move In Imme, Must See. **** EXTRAS **** Electric Light Fixtures, Gas Furnace And Equipment, Hot Water Tank, Range Hood, Washer And Dryer Build In System And Garden Shed. New Kitchen, New Bath, New Hardwood & Ceramic Floor Through Out.

The only trouble? The entire lot is just 12 feet wide. The house is 9’10” across, and has 370 square feet. Yeah, $349,000.

LISTING

If you think Henry’s words don’t exactly match reality, then you perfectly understand the Canadian real estate market. Never has there been such a dramatic divide between what we’re being told, and what actually exists. Swallowing the wrong message could prove toxic to your financial health. It’s why Phil Soper should come with a big yellow warning sticker glued to his thorax.

The Royal LePage boss was at it again in the media this week, forecasting free ponies and sno-cones from coast to coast – no correction, no slump and higher prices in 2013, before it gets  even better next year. “Those hoping their predictions of a bursting bubble and cataclysmic drops in home values will come true are out of luck again,” he said. Of course, nobody credible has come close to suggesting a cataclysm is about to befall real estate, but it sure makes for a snappier quote.

For the record (write this down, tape to fridge) LePage claims housing sales will increase in the second half of 2013, and then take off in 2014 as the market “emerges from what’s nothing more than a normal cyclical correction.” How Toxic Phil can consider it ‘normal’ when five-year mortgage rates were 2.89%, prices hit all-time highs and home ownership levels topped 75% in major cities is concerning. For most senior executives, these would be warning signs, except if you sold houses.

David Madani ain’t buying it. The chief economist at Capital Economics is sticking with his no-soft-landing prediction as he charts falling sales and an exodus of first-time buyers. “Overall, the willingness of buyers to pay these historically high house prices now looks to be proving fragile against the increasingly disappointing macroeconomic backdrop,” he says. “The housing bubble in Vancouver already appears to be deflating, with only Toronto defying the inevitable. Accordingly, we expect substantial declines in house prices over the next year or two.”

How substantial? About 25%.

Meanwhile, here’s bad boy realtor Ross Kay who says that on the ground where he operates (the wilds of 905 in the Republic of GTA), things are scary. “The last eight days of my involvement in the real estate industry have been even more demoralizing than at any time during the last three years, which had been the worst of 27,” he tells me. “Last week, MLS associations released data that almost universally has been misinterpreted, misreported or carefully cherry picked that is creating the illusion everything is okay in the market, when in fact across Canada (except in a few isolated local markets)  the market has been in a full correction phase.”

Proof, Ross?

Just look at recent total resale numbers in the GTA, he says, comparing this June to the same month last year:

Newmarket  -26%
Orangeville -18.4%
Pickering -17.4%
Toronto West -13.2%
Aurora -13%
Whitby -9.7%
Caledon -8/1%
Brampton  -7.8%
Toronto East -7.6%
Vaughan -4.6%
Oshawa  -15.7%

For the year to date, he adds, sales are down 12% in Toronto, 10% in Peel and 11% in York. These are not numbers organized real estate wants you to know, or to focus on. Hence the continued emphasis on price (which is a lagging indicator) rather than sales (a leading indicator). With fewer deals taking place at the lower end of the spectrum – to be expected with more first-timers knocked out – average prices rise, even as volumes decrease. Never a good sign.

So there you go. Either you’re with the real estate terrorists, or you can behave and pay $349,000 for a glorified garden shed with hardwood flooring and a new hood fan. But does it have a sump pump?

176 comments ↓

#1 bob on 07.09.13 at 7:27 pm

“Does it have a sump pump”
It was kinda funny, because your next posting underneath it was titled “Yup”

#2 Randy on 07.09.13 at 7:28 pm

….another thing to be wary of….nice cars being sold cheap….probably got caught and drowned in yesterday’s storm….

#3 Smoking Man on 07.09.13 at 7:35 pm

At leased no condo fees…..

#4 TnT on 07.09.13 at 7:35 pm

Definitely seeing a change here in The Beaches, Toronto. Dead open houses, falling prices and a general denial from the local agents.

#5 Derek R on 07.09.13 at 7:40 pm

The ingenuity of the RE boards in spinning bad figures never fails to impress me.

#6 Sklosch on 07.09.13 at 7:40 pm

“Has the moment finally arrived for this sad blog to go off the air, dragging its defeated ass onto a throbbing Harley while dozens of crushed fans (all of them pathetic) ”

I love being pathetic. :)

#7 Nemesis on 07.09.13 at 7:41 pm

“Never has there been such a dramatic divide between what we’re being told, and what actually exists.” – HonGT

True that… Still, and regrettably – there be real ‘cataclysms’ lurking in the wings; e.g.:

http://preview.reuters.com/2013/7/2/wounded-in-battle-stiffed-by-the-pentagon

#8 The cataclysm — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate | The Affluent Boomer on 07.09.13 at 7:43 pm

[…] via The cataclysm — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. […]

#9 shanks on 07.09.13 at 7:43 pm

first!

#10 waiting on 07.09.13 at 7:44 pm

But Garth,
It has “ELECTRIC LIGHT FIXTURES” !!!!

#11 Brian on 07.09.13 at 7:45 pm

Yes it’s real. In case anyone is interested the mls# is E2674412

http://www.realtor.ca/propertyDetails.aspx?propertyId=13357483

#12 The Peg on 07.09.13 at 7:48 pm

LOL. Let the bidding war begin!

#13 Alberta Ed on 07.09.13 at 7:49 pm

Only 25%? Just eyeballing the RE listings in moist Victoria and southern Vancouver Island, I’d say most are at least 40% overpriced. I counted 10 condo FS signs in two blocks today.

#14 Chickenlittle on 07.09.13 at 7:51 pm

I saw this Royal Lecrap report on CP24. Every time I see things like this I think of you, Garth.

#15 AK on 07.09.13 at 7:51 pm

“The only trouble? The entire lot is just 12 feet wide. The house is 9’10” across, and has 250 square feet. Yeah, $349,000.”
——————————————————————–
Geez. I learn something new every day.

I never, ever thought that a 250 square foot house actually existed. I always thought that my first house with 1,400 square feet was small.

#16 Kingarthur on 07.09.13 at 7:54 pm

Hell must have frozen over: it’s raining everywhere in Canada except Vancouver.

#17 Exilled on 07.09.13 at 7:54 pm

Mr Turner: Epic

#18 Smoking Man's Old Man on 07.09.13 at 7:56 pm

Hope prices drop soon on the Sunshine Coast, afraid if I spend much more time in Vancouver I will become as pretentious as the locals…

#19 AK on 07.09.13 at 7:58 pm

Soper on BNN . I have no idea as to WTF this guy just said. All I can say is that he makes Peter Schiff look like a Genius.

#20 Fisc on 07.09.13 at 8:00 pm

Another bad month for Montreal:

http://communications.centris.ca/Tableaux/2013/Tableaux_Communiques_CIGM_2013M06_ENG.pdf

3205 sales is the worst June sales level since more than a decade. And listings are still very high!

Montreal implodes…

#21 Sebee on 07.09.13 at 8:01 pm

Way to GO Officer!

#22 t-man on 07.09.13 at 8:02 pm

i wont say it….

#23 shanks on 07.09.13 at 8:08 pm

ouch 9 thats terrible

#24 Maurizo on 07.09.13 at 8:09 pm

Here in Vaughan, woodbreeeedge… you have ordinary average homes listed at well over three quarters of a million. Most of these homes end up being re-listed at lower prices because they are not selling. Reality paints a different picture of where woodbreeeeedge ought to be and where woodbreeeedge is right now. I have family in Vancouver, and the same thing there. The make believe values are much higher than what the market can possibly bear. It’s simple economics. When you have saturation beyond demand, prices will come down. You cannot expect the market to stay afloat at the same price curves of the last many years based on some hogwash data represented by sales people? How brutally unethical is that? It’s like asking a guy who just walked out of a bank with a 2 million while wearing a mask if he feels lucky?

#25 Daisy Mae on 07.09.13 at 8:10 pm

“**** EXTRAS **** Electric Light Fixtures, Gas Furnace And Equipment, Hot Water Tank, Range Hood, Washer And Dryer Build In System And Garden Shed…”

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

Heat and light….well, that’s important.

#26 AK on 07.09.13 at 8:11 pm

#9 shanks on 07.09.13 at 7:43 pm
“first!”
——————————————————————–
Duhhh.. AT least you spelled it correctly…

#27 Bill Gable on 07.09.13 at 8:11 pm

Even after pointing many friends to this amazing blog (*never pathetic, Garth) = I have had two Family members go house hunting, because this was a great time to INVEST.
I was nearly apoplectic, but shut my mouth.

I have begged, cajoled, pointed towards, hinted at what Mr. Turner writes so eloquently about to these folks – and they STILL drink the same Kool Aid.
People are odd. I pointed to what happened here in 1980-81 – when home prices went into the toilet. They thought I was lying.

I tried to explain that we have had extraordinarily low Interest rates, and that they are going UP, as your illiquid piece of air in the sky, falls in value. Then there are the fun unexpected costs – as many flooded Toronto (*Very upsetting – and hope it did not impact you) Condo and Homeowners are about to find out.

Black Swan. Check it out.

Look it up.

#28 Sebee on 07.09.13 at 8:13 pm

Seriously, eBay would force seller to refund on this home purchase through it’s Buyer Protection Policy because clearly description does not match item.

#29 Spiltbongwater on 07.09.13 at 8:18 pm

They spent $50K in renos on a 250 sq ft house?

#30 Smoking Man on 07.09.13 at 8:23 pm

The Curtain Experiment.

DELETED

#31 Math check on 07.09.13 at 8:25 pm

Hmm, it isn’t actually 250 square feet, more like 750 from the room dimensions. I think Garth must have converted from metres to feet , not from square metres to square feet. So it’s small but not doll-house small.

It appears to be 37’9″ deep by 9’10” wide. That’s 370 square feet. I have amended the post, having forgotten the spacious kitchen and master bedroom (120 square feet). — Garth

#32 Joe Average on 07.09.13 at 8:28 pm

I’m visiting folks in Whistler BC….very few actually works and resides here ( most bolted before 2010 Record Debt Olympics ). I come here 2-3 times a year and what hit me today is….open houses on Tuesday …mid day !!! I’ve never seen that before. Intrawest still trying to sell time-shares to anybody that walks and looks 18+ ….fells like Mexico with agents trying to hoard the dummies for a meeting and a free gift !!!

#33 Harry Wilson on 07.09.13 at 8:30 pm

To be fair, unless I’m missing something, it’s just over 450 square feet (26+11+11×9.75). This means that while it’s only 80% of the length of a bowling lane (foul line to head pin is 60′), it’s almost wide enough for two lanes, including gutters.

By the rule of 15, this place should rent for just under $2000 per month; taken daily that would be about $65, which actually compares favorably to what a bowling alley would charge.

Sounds like a deal.

#34 Ken R on 07.09.13 at 8:32 pm

Protect and serve- love the pic.

On a serious note, got wind today of house inspectors collaborating with real estate agents to close deals and screw buyers. Big one just blew up, contractor friend of mine called in to assess, 50k in foundation repairs required. Inspector contract so vague, buyer is screwed.

#35 In the cold from Toronto on 07.09.13 at 8:34 pm

I like consistency, it shows belief in one’s ideas. More than two years ago (Feb 2011) Capital Economics predicted a 25% drop in RE prices within a few years:

http://www.theglobeandmail.com/report-on-business/economy/housing/home-prices-could-dive-if-rates-rise-analyst-says/article565355/

In the two years (almost two and a half) since Feb 2011, RE prices across Canada went up by… let’s say 10% (I’m too lazy to look the actual number on the net).

So, the current prediction should be that over the next few years RE prices will drop by 35%…

Just say’n.

#36 Kay Ross is right -below you have the evidences on 07.09.13 at 8:35 pm

These are average discounts and they are “decalred discounts”
The reality is that sales listings never report the history of a listing and what you see is just the difference between the last asking price and the “sold for” price

http://recharts.blogspot.ca/2013/07/gta-sfh-is-going-down-june-09-3-average.html

http://recharts.blogspot.ca/2013/07/gta-sfh-going-down-june-08-3-average.html

I have changed the subject line of my blog posts because it has become ridiculous to talk about bidding wars when out of 369 listings you have just 27 sold over asking

#37 Ralph Cramdown on 07.09.13 at 8:35 pm

Somebody really ought to submit an offer for $34,900.

#38 Mr. Reality on 07.09.13 at 8:40 pm

http://www.vancouversun.com/business/affordability/Photos+Vancouver+home+prices+slip+downward/8637469/story.html

At least the Sun is being truthful………

DtR

#39 Ralph Cramdown on 07.09.13 at 8:41 pm

#30 Math check — “[…] more like 750 from the room dimensions.”

Maybe this is uniquely a Toronto thing, but generally when you see identical dimensions for the living and dining rooms on a listing here, there’s only one area of that size in the dwelling.

#40 Serge on 07.09.13 at 8:44 pm

July 1-July 9 2013
GTA sales : 990 . Source http://tosolds.ca/
July 2012 sales : 7,570
http://www.torontorealestateboard.com/market_news/market_watch/2012/mw1207.pdf
6760 to make it same…

#41 John on 07.09.13 at 8:45 pm

No fudging numbers in Edmonton , market is still going strong. YOY sales are almost the same as last year. Migration levels are same as 2007 and rental vacancy rates less than 2%.

#42 Donald Trump on 07.09.13 at 8:54 pm

Re: Blog photo

That’s really nice of Matt Damon and Sigourney Weaver to lend assistance

#43 Freedom First on 07.09.13 at 8:57 pm

Thanks Garth, for identifying more RE pumpers who are trying to make a living doing whatever it takes. Now, thanks to Garth and a few others, the list of the RE liars/fabricators trying to deflower the house lusting virgins by deception is growing. It is just like in the U.S. when their politicians, RE industry, banks, and mainstream media did everything possible to cover up their crumbling RE market. After which they said that nobody saw it coming. It will be interesting to read your blog Garth, when our Canadian RE market finds it’s bottom, whether it be 25 or 40% down. It would be funny if so many Canadians weren’t getting screwed over.

#44 AK on 07.09.13 at 8:58 pm

All you KIA drivers, need not worry.

#45 Craig on 07.09.13 at 9:01 pm

Comparing last years numbers to this years does not paint a fair picture. Last year was insane!

People lining up around the block to buy condos, 5 to 6 families bidding on the same house – $100K over the list…..etc.

Of course as things settle down, this years numbers will look bad.

I’m just sayin’

Last June was not the peak. And people who say, “I’m just sayin'” usually aren’t. — Garth

#46 Canadian Watchdog on 07.09.13 at 9:03 pm

Read post #119 again, then spot the new bidding war benchmark price below.

Date__MLS #__Address__List __Price
2013/05__E2637161 __326 LINSMORE CRES__$599,900
2012/10__E2486285__316 LINSMORE CRES__$549,900
2013/05__E2634796 __309 LINSMORE CRES__$669,000
2012/04__E2336098__299 LINSMORE CRES__$499,900
2012/06__E2391672__297 LINSMORE CRES__$749,000
2012/07__E2422491__267 LINSMORE CRES__$499,900
2012/08__E2447502__267 LINSMORE CRES__$479,000
2012/04__E2345292__265 LINSMORE CRES__$489,900
2011/01__E2014779 __258 LINSMORE CRES__$489,900
2012/06__E2401756__255 LINSMORE CRES__$549,000
2011/04__E2085948 __251 LINSMORE CRES__$589,000
2013/03__E2572994 __247 LINSMORE CRES__$499,500
2013/04__E2572994 __247 LINSMORE CRES__$469,500
2013/04__E2572994 __247 LINSMORE CRES__$429,900
2013/04__E2572994 __247 LINSMORE CRES__$429,900

#47 Peter on 07.09.13 at 9:04 pm

Garth, your pictures are hilarious. The home that is listed for 350 grand is hilarious as well. Is there really someone willing to put an offer in on that shack? It has to be a joke! Why buy a shack when you can rent a new condo downtown TO. This market is so crazy and is so doomed for failure.

#48 Smoking Man on 07.09.13 at 9:08 pm

#42 Freedom First on 07.09.13 at 8:57 pm
Thanks Garth, for identifying more RE pumpers who are trying to make a living doing whatever it takes. Now, thanks to Garth and a few others, the list of the RE liars/fabricators trying to deflower the house lusting virgins by deception is growing.
……………………………………

Its not the pumpers.

Woman competing with other woman is why we have crazy real estate prices here. Cultural chic thing in this country.

When they can’t compete on looks, they compete on things.

Men are just like dogs, will do anything to get the pat on head. Even if it means going crazy in debt.

#49 TurnerNation on 07.09.13 at 9:17 pm

R/E terrorists? We are BEARorists.

#50 Cow Man on 07.09.13 at 9:18 pm

Amigos:
If I kept more than two cows in that house the SPCA would have me charged with cruelty to animals.

#51 Piccaso on 07.09.13 at 9:26 pm

My dog’s house is detached for $350 bucks!

#52 Math Check on 07.09.13 at 9:39 pm

#38 Ralph Cramdown

That would make sense since Google Maps suggests the roof area is less than the sum of the room dimensions. I didn’t realize using a room for two things gave you twice as much space…

And apologies for suggesting the wrong error to Garth.

You researched the roof shape? That’s scary. — Garth

#53 Deb L on 07.09.13 at 9:40 pm

I’ve been watching the Orillia market for 2 years. One house in particular started out 18 months ago at 480,000, is still sitting on the market at the reduced price of 320,00. Lots of houses go off market and come back on with multiple upgrades. Leaving Pickering to retire in Orillia. Not sure when. Mortgage free. It’s real.

#54 FATHER on 07.09.13 at 9:48 pm

only a crash makes sense to me? whuchya think blog dawgs

#55 Donald Trump on 07.09.13 at 9:55 pm

Hey hey hey…

This will revive both Industry and RE in Calgary and Turdonto

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

#56 dosouth on 07.09.13 at 10:15 pm

Watch the rebound doesn’t get you where it counts…..Okanagan style!

Numbers, numbers who writes the numbers…??

#57 Edmontonian on 07.09.13 at 10:23 pm

In Edmonton, we are seeing a whole slew of new listings, under the $199,000 mark for single family detached houses. Many that have really good bones & great upgrades like new roofs, new insulation and all new wiring.

I think a few people are realizing it’s best not to be too greedy, my Grandfather always said, the greedy PIG goes to slaughter 1st…

Check out this great little home near a gorgeous historical Park in Edmonton…http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=13381797&PidKey=-1399325122

#58 Tony on 07.09.13 at 10:24 pm

Could buy a tent with the same square footage for less than 500 dollars.

#59 Tripp on 07.09.13 at 10:31 pm

Wow, if that garbage bin sells for that price, as a nation, we must question our values, judgement and common sense.

#60 Joseph R. on 07.09.13 at 10:32 pm

Apparently, if there is a housing bubble, Scotiabank will be in better position than the other Big 5 due to its exposure to Latin America:

http://www.fool.ca/2013/07/09/if-a-housing-correction-comes-scotiabank-is-the-best-positioned-of-the-big-five/

Why is it only Scotiabank that diversified its assets and invested in the emerging markets?

#61 Tony on 07.09.13 at 10:32 pm

Re: #41 John on 07.09.13 at 8:45 pm

The Edmonton market hasn’t recovered from the sell-off way back in 1980.

#62 DaleFromCalgary on 07.09.13 at 10:40 pm

My living room is bigger than that and I own a 1956 bungalow in middle-class Cowtown. (Paid off in 1997)

People with families are still buying in Calgary because they have to. Very few decent rentals available for those with kids. It’s easy to lecture about how renting is better but it’s a different story if you’re towing a couple of kids around and don’t want them to grow up in Templeridge or Dover.

The flood was a godsend to Calgary realtors. Anything a metre or more above the high water mark is being boosted as “high and dry”. Anything that had to have the basement gutted will be very difficult to sell. No one in their right mind should buy a house in High Rover.

#63 Patiently Waiting on 07.09.13 at 10:47 pm

Combined sales of single family home for the Real Estate Board of Greater Vancouver & the Fraser Valley Real Estate Board for the last 60 days are below the same period during the 2008 financial crisis. Here are the sales for this same 60 day period for the last 6 years:

Year Sales last 60 days
—————————————–
2013 2928
2012 3571 (2013 is 28% below 2012)
2011 4572 (2013 is 36% below 2011)
2010 3684 (2013 is 20% below 2010)
2009 5408 (2013 is 46% below 2009)
2008 3246 (2013 is 10% below 2008)

Cheers
pw

#64 12ax7 on 07.09.13 at 10:47 pm

Here in rapidly gentrifying Parkdale (TO) I’ve noticed about 6 houses listed and sold within the last month, I jotted down their addresses so i’m going to check what they sold for but they all seemed to sell fairly quickly – within a couple of weeks. Also the last quarterly report sent out by local RE agents shows some houses selling above list, indicating bidding wars still going on. I’m
wondering if Parkdale/Highpark is one of those “micro markets” that will be largely immune to the general national trend. – Any thoughts? Thanks.

#65 Ozy - BUYERS - toronto has EXPANDED to STEEELS and MORNINGSIDE on 07.09.13 at 10:53 pm

Dear DESPERATE BUYERS – if you are not aware, Toronto has EXPANDED to STEEELS and MORNINGSIDE, Scarborough and Etobocike, are proudly under same mayor and city.

So stop whinning to live in Annex and move in Kennedy Road, Morningide or south of Rexdale. It’s all yours to conquer!!!!

And don’t forget Agincourt, the nice destination (forced I think) for immigrants decades ago

STOP WHINNIG about real-estate in this huge city with LOTS of CHEAP HOUSING options!

Hundreds of Condo and towns under 300000 in TORONTO.
Just look above and see the whole city.

#66 45north on 07.09.13 at 10:55 pm

LePage claims housing sales will increase in the second half of 2013

well maybe October sales could be more than September Look at guava.ca, January to June sales are more than July to December sales. Always. Every Royal LePage real estate agent knows this. Or said another way, the best that can be expected is the decline in sales will continue.

#67 KommyKim on 07.09.13 at 11:10 pm

RE: The only trouble? The entire lot is just 12 feet wide. The house is 9’10” across, and has 370 square feet. Yeah, $349,000.

That’s gotta be the smallest duplex I’ve ever seen! And the adjoining unit’s owner didn’t want to replace his roof at the same time. LOL! Google streetview was interesting.

#68 WiseGuy on 07.09.13 at 11:11 pm

Garth, you speak of the boomers selling their houses in the next 5 years as they have no savings. This as you mention will flood the market, but what about all those 20 something year olds with University degrees and no job. The natural demand for condos, starter homes..etc will be gone too, therefore, we might see even further declines when these seniors realize that no one wants to buy their homes!

#69 AK on 07.09.13 at 11:32 pm

The US economy is smoking and here’s the proof

#70 Roy on 07.09.13 at 11:41 pm

Aw come on, place is huge compared to our Vancouver microsuites. People will learn to appreciate having the toilet in the living room. LOL

Soper, typical paid pumper looking after his heavily biased job. Royal LePage, an oxymoron to public trust.

#71 retired Boomer - WI on 07.09.13 at 11:43 pm

$349,000 for a not very glorified garden shed? Tell me this is a joke….PLEASE!!

Does anybody really believe some human would pay money for that doll house dump? I mean just because it has electric lights, gas, and a place to park a car does that mean it qualifies as a place to live in?

Well, if they think even a hundred grand for a 12 ft lot with almost a dwelling on it, perhaps it is past time for Canadians to endure a good hosing like we did circa 2008.

You can still have an economy, so called, even if real estate sales drop by say 50% at least until prices, or foreclosure catch up with reality.

There will be no happy ending to this self-created delusion.
Wonder who ever heard the term regression to the mean.

#72 Kurt on 07.09.13 at 11:54 pm

“It’s why Phil Soper should come with a big yellow warning sticker glued to his thorax.”

I love it! Cockroach, parasitic wasp, take your pick!

#73 jon on 07.09.13 at 11:56 pm

Trebnet was down for a day and half..May be worth investigating…

#74 Someone on 07.09.13 at 11:57 pm

The Mayor of Vancouver is selling his West Side 6-bedroom home. It’s listed for $1.95 million.

http://whispersfromtheedgeoftherainforest.blogspot.ca/2013/07/guess-whos-trying-to-cash-out-of-real.html

#75 grow bob on 07.10.13 at 12:25 am

Fairly certain that even weed growers wouldn’t buy a 370sqft home for 350 000$… Even with the electric light fixtures!

#76 Small is bountiful!!! on 07.10.13 at 12:26 am

@ #11

It comes with huge parking lot in the backyard!!
And a park!!! That’s what $300,000 of the total price is for.

#77 Devore on 07.10.13 at 12:28 am

#10 waiting

But Garth,
It has “ELECTRIC LIGHT FIXTURES” !!!!

Who cares! Real real estate professionals know the true metric is number of potlights.

#78 Observer on 07.10.13 at 12:39 am

To make more bedrooms in that house, they can simply knock out the washroom and put in an outhouse

#79 MagnumMtl on 07.10.13 at 12:52 am

who would have thought my pool shed was worth $350k! I am seriously underestimating my real estate empire. The garden shed has to be worth at least $125,000.

then again those dimensions would cost you over$400,000 in Van condo terms.

I am living in an alternate universe.

#80 Sideline Sitter on 07.10.13 at 1:03 am

#64 – I worry about the same… I sold my Roncy home about a year ago (sold April 2012, closed July 2012) and am awaiting the inevitable.

I attribute the current selling to a couple of factors:
1) Hot neighborhood, in the city.
2) People think “a crash will never happen” (I hear that A LOT).
3) With rates rising, people are jumping in before “it’s too late”.
4) No one is showing you houses that DIDN’T sell, or sold for much less than original list.

I’m rooting for a crash… burn baby burn!

#81 Freedom First on 07.10.13 at 1:37 am

#48 Smoking Man

Garth is exposing the unethical liars. The women you are describing are honest whores. And a real man doesn’t have to put his gonads in a vise for any woman. Not that you would know that.

#82 Dean Mason on 07.10.13 at 1:56 am

What happened to the big spikes in bond yields almost day by day in the U.S. bond market.What are the bond vigilantes doing?What are they sleeping ?Raise those suckers so we can get back to 6.74% 30 year U.S. treasuries and 6.94% U.S. 30 year zero coupon bonds or strips.

This way we can double our money every 10 years and 4 months.Don’t hold your breath everybody.

#83 Buy? Curious? on 07.10.13 at 2:40 am

Way to go, officers! Toronto cops at their finest. If they’re not handing out tickets to hipsters sharing a bottle of wine during a picnic at a park or hiding behind bushes with radar guns nabbing drivers going 2km over the speed limit, they’re out there carrying chicks over puddles. They don’t really concern themselves with real crime. Do you know how much those dudes and dudettes get paid? They get a brick of gold for overtime and retire after 10 years. The downside to being a cop in Toronto is that they become paranoid, drunks and racist.

http://www.youtube.com/watch?v=ZmK26LlSzJw

#84 DaveCalgary on 07.10.13 at 3:01 am

Any word on the real estate situation in Calgary? Does it mirror TO and VAN or is it a distinct situation? Not much mention on here (other than the floods) about the RE market there.

#85 Joe on 07.10.13 at 3:34 am

Went for a walk with the wife and pooch this morning along the beautiful sun drenched walk at the bottom of Lonsdale Ave, N Van.
It took us to a marina about 2blks west that had 10 or so brand new house boats for sale.
Being the curious type I called the sales rep and he informed me they were built to the finest standards, with granite of course, the upside he said was no yard, turn key.
I asked about the price and he said from 500k and up.
And the moorage another 800 a month and up…oh and its on reserve land so it’s only a one year lease.
It’s all quite ridiculous but people are buying them.
At least when the market is flooded with over priced and under bought inventory they can pull up anchor.

#86 Peter on 07.10.13 at 4:36 am

to #64 12ax7

I have been watching Parkdale and I agree , very stable up and lots of construction improvements, lots of demand and so little supply in the JUNCTION TRIANGLE, HIGH PARK, the JUNCTION , and ST.CLAIR west, I don’t think they are immune , but they are still selling fast close to asking. I see more of a plateau in these areas if anything, the condos in those areas may take longer to sell but the houses are pretty stable .

#87 MEANWHILE IN EUROPA on 07.10.13 at 7:21 am

I CANNOT RESIST.

All renos included we are in this place for less than that house in East York. (is that NY,NY?)

http://theceliachusband.blogspot.fr/2012/03/la-maison.html

#88 Beach Girl on 07.10.13 at 7:27 am

Looks like a new roof, with nice landscaping. I think my doggie would leave me. What year was this shack built? Dinner parties would be tricky. Unbelievable. That is mad money. Good luck.

#89 fancy_pants on 07.10.13 at 7:47 am

business as usual in the godless city. I’ll never get my head around it. Does it come with a heater and flying pigs? the end is near

#90 jess on 07.10.13 at 7:53 am

meglomaniacs

“What makes corruption on a global scale possible isn’t just greed or the misuse of power or that nebulous phrase ‘weak governance.’ Yes, it’s all of those. But corruption is made possible by the actions of global facilitators.”

And that means banks, accountants, offshore lawyers, and the jurisdictions themselves.

“It isn’t about corruption ‘somewhere over there,’ is it? Corruption is a truly globalised business.”

Charmian gooch TEDTalks interesting lecture
..this one from the past signed a decree to rename the months of the year after himself and his mother. He erected a forty ft. gold plated statute of himself that rotated to follow the sun!

http://www.youtube.com/watch?v=Nhx1_yXMwCg&feature=player_embedded

#91 Craig on 07.10.13 at 8:15 am

#68 WiseGuy

” Garth, you speak of the boomers selling their houses in the next 5 years as they have no savings. This as you mention will flood the market,…”

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

Great post not so wiseguy.

So where are the boomers going to move to Einstein?

Let me guess, a rental unit like you. So who owns that home – a homeowner- hmmm vicious circle huh. Maybe boomers should be buying second and third homes to rent out to those dopey Boomers like them.

A great way to supplement their retirement income.

Now that would create the bubble of all bubbles, bubblehead.

In replying, you gratuitously insulted the other visitor three times. It would have been possible to make your point without the invective. This pattern of yours will no longer be tolerated. — Garth

#92 Craig on 07.10.13 at 8:34 am

This pattern of yours will no longer be tolerated. — Garth

My apologies.

I’ll cool it.

#93 Steven on 07.10.13 at 8:42 am

I am with the gold and silver loving real estate terrorists! Better an end in horror for your world Garth rather than the horror of putting up with your world with out end!

#94 Smoking Man on 07.10.13 at 8:54 am

What a bunch of hypocrites on this pathetic blog.

The posters, blaming banks, govt, media, accusations of treachery, lies, bad behaviour. Of course they do, only very stupid people don’t try and gain an advantage in the pursuit of wealth. It’s a grey line, live with it, learn from it.

Yet, why are you here, you hope enough people read your gloomy forecasted on Real Estate, your spin in hopes of causing a chain reaction of downward spiral. So you how have not figured out how to play, can finally become a proud owner.

You have become what you complain about..

I derive so much humor here…….

It’s mutual. — Garth

#95 robert james on 07.10.13 at 8:56 am

Someone asked Garth for a 10 bagger stock tip a few months back.. I knew Garth would not answer so I did with this one,, V.OPL.. The promotion is just starting and soon will be starting in the US as very little is known about the company.. If you have some crazy money it might be worth it.. http://www.theglobeandmail.com/report-on-business/small-business/sb-growth/the-challenge/how-to-sell-silicon-valley-on-the-death-of-silicon/article13093729/

#96 Smoking Man on 07.10.13 at 8:57 am

#92 Craig on 07.10.13 at 8:34 am
This pattern of yours will no longer be tolerated. — Garth

My apologies.I’ll cool it.
………….

I like your passion, attack stupid ideas not stupid people.

You Pick up shit to throw at someone, whether you hit your target or not, you still smell like shit

#97 sciencemonkey on 07.10.13 at 9:01 am

I’ve found a promising candidate for the position of chief statistician with the CREA!

http://www.nytimes.com/2013/04/28/magazine/diederik-stapels-audacious-academic-fraud.html?pagewanted=all&_r=1&

Mr. Turner, even if a 25% decline occurs, it doesn’t really matter. So what if that shack sells for $260,000? GTA real estate needs to drop by 66% to be reasonable, but I’m sure that will not occur.

#98 hobo joe on 07.10.13 at 9:06 am

houses like that are in high demand for midgets…. err… i mean little people

#99 troublesbrewing on 07.10.13 at 9:30 am

The global financial downturn that the world has undergone over the last few years had its roots in poor investment decisions and speculation of a scale so large it is hard even for trained economists to imagine, let alone the average person. And despite the carefully managed news stories, the global economic system has only begun to face the ongoing collapse.

We are even now weathering the impacts of the second and much more severe wave of mortgage loan interest rate resets, as a tsunami of Adjustable Rate Mortgages (ARMs) have hit their reset points.

Huge numbers of mortgage holders, who have been struggling to make payments in the face of layoffs or salary reductions, are facing increases in their monthly mortgage payments. The total number of resets was vastly greater than the initial wave of Alt-A mortgages of which the defaults set off the first wave of economic crisis.

A compelling case can be made that Bernanke HAD to keep interest rates low over the past few years to prevent the entire system from collapsing upon itself.

That he was able to do so, while keeping attention away from the effects of the ARM resets, is a testimony to how hard the smart money is working to keep the system afloat. But the crisis is far from over.

The global network of banks that bought into the ocean of securitized debt, now held on their books at utterly unrealistic values, continues to face pressures far beyond those that collapsed Lehman Brothers and the others in the late 2000s.

The continuing crisis in the Eurozone, Japan’s experiment with inflationary Abenomics, China’s recent attempts at reining in a banking system built on questionable foundations, the continuing social unrest in numerous nations caused by economic mal-alignment and a concentration of wealth in a minimum of hands, with ongoing pressures on the global middle class that are pushing it ever lower in the face of declining income and rising taxes, all these factors continue to strain the global financial system.

There’s a massive ‘bait and switch’ being perpetrated by big left media. The fact is that the improvements showing up on the front pages are all outlets that are trying to bolster the Obama agenda,which btw is sinking fast. The sales figures supporting ‘improvement in the housing market’ are a chimera with most of the transactions being corporations and hedge funds playing silly buggers with the numbers, much the same as in Canada where the real estate boards are printing false hope.

I don’t believe that moral suasion by the political left will turn the market in either country.

#100 Ralph Cramdown on 07.10.13 at 9:36 am

OK, here’s your cognitive disconnect of the day… A mortgage broker using game theory to argue that there won’t be a soft landing:
http://dipettamortgage.com/wp/commentary/real-estate-articles/the-soft-landing-myth-the-prisoners-dilemma-explained/

Right or wrong, it’s always good to see people grappling with a bit of analysis rather than just repeating hopium-inspired platitudes (see e.g. the RE agent’s comment below the article)

#101 Mel Eager on 07.10.13 at 9:50 am

What is the Oakville value of decline?

Mel

#102 TnT on 07.10.13 at 10:06 am

Buying a house now is just bailing out a Baby Boomer! I can’t believe how easy these Baby Boomers have it. Born from the greatest generation, handed to them cheap schooling, great jobs, great pay, lots of disposable income. They drain the pond for the rest of us and on top of that they pollute it too! Now were stuck with the cleanup bill AND we have to fund their retirement with these unsustainable pensions. Like I said, buying their house now is just bailing them out….

Are you racist or homophobic as well as ageist? — Garth

#103 jess on 07.10.13 at 10:07 am

“uncollectable”

More than two thirds of the amount Greece is owed in back taxes by its citizens will probably never be recovered. According to Haris Theoharis ,senior tax collector, up to €42bn in taxes and other monies owed to the state would have to be written off

the “troika” – want Greece to sack 4,000 state workers by the end of the year and stem a runaway deficit at the country’s main health fund before they release the next tranche of its €240bn (£206bn) bail-out.

The troika has raised concerns over a runaway deficit at National Organisation for Healthcare Provision, Greece’s main health fund, which has reportedly exceeded its allocated budget by €1.2bn in the first five months of the year.

=======
http://www.telegraph.co.uk/finance/financialcrisis/10155893/Portuguese-government-at-risk-of-collapse-as-foreign-minister-resigns.html

#104 Bond junkie on 07.10.13 at 10:11 am

#64-12ax7

Problem in Tdot right now is not in sub7. Garth isn’t talking about it for two reasons:

A) he is directly impacted by the problem
B) he’s also trying to stay relatively obedient to his followers who have openly criticized him for being too Focused on the Toronto mkt

Anyhow, I digress. Like I said the problem in Toronto right now is everything 1.4 and above. Nothing is moving since f and the gang capped cmhc at 7 figures. It was actually a blessing in disguise for homeowners in gentrifying neighborhoods like parkdale. Anything 7-800k is still bid like crazy bc people can get financed for it. This will not change until the rules do. I know of many personal friends/collegues who cannot sells their homes in Rosedale, leaside, and north Toronto because of this very fact. Very few ppl actually have enough liquidity (500k+) to buy one of these homes outright. The ppl that do are probably too smart to buy right now anyways. So who’s left to support the >2-3mm demo? Existing sellers of course, the plankton of the luxury mkt who own 1.4s and 1.5s that r simply not moving at present. Garth I haven’t been around in a while so forgive if you’ve already reported on the problems at the top, but if not it would be an interesting topic to dig into a bit further

#105 T.O. bidding wars debunked ...extreme edition :-) on 07.10.13 at 10:14 am

I have aggregated two days in one. I am not sure what happened yesterday but the sales were really low, just 47 listings in total mostly under the asking price

http://recharts.blogspot.ca/2013/07/to-sfh-going-down-july-07-july-08.html

The houses in Toronto are now selling mostly under the asking price. Note the two totally out of scale and fabricated “bidding wars”, one located near StClair with Dufferin and the other one close to Perth and Dupont. Both sold for the price of the area buy hey ..they sold 25% over the asking price. If you remove those two from the equation I am sure that the average percentage under the asking price will be lower

#106 Dupcheck on 07.10.13 at 10:15 am

http://www.realtor.ca/propertyDetails.aspx?propertyId=13357483&PidKey=1855650939

That home is a “barrack” makes a wooden cottage look like a queens palace. I bet even in a poor African country you would find much better living conditions. Realtor’s should be ashamed to put that up on a website. Shame on all of you. I am ashamed to say I live in a country where such homes exist imagine them to be sold for 350,000$, yak…ptuuu

#107 Ahead of the Curve on 07.10.13 at 10:17 am

Welcome to Toronto guys. It will be interesting to see, if/when that property sells, and how much it sells for. That will probably be a good indicator on the craziness of the markets…

I’m not overly concerned about a real estate correction, because even as interest rates rise, they are still historically low. You will also see in the coming years a big work exodus by boomers, jobs which will hopefully be picked up by their 29 year old kids still living in the basement.

As real estate prices come down, which they will, maybe it will become affordable for the younger generation to finally live the their parents dream and buy that house and a dog!

#108 GTA Condos pricess are going down -average under the asking price -3% on 07.10.13 at 10:22 am

http://recharts.blogspot.ca/2013/07/gta-condo-sales-july-07-july-08-average.html

#109 calgary rip off on 07.10.13 at 10:24 am

#94 Smoking Man:

Given that you are a smoker, that makes you an idiot(next time look at the pictures on the packs of smokes you buy and read the warnings). Your comments make you an even bigger idiot.

This blog outlines the reality of the dilemma that is known as real estate ripoff. What this blog does is question the status quo. How is this bad?

In Calgary there is the pre 2004 crowd and the post 2004 crowd. I am part of the post 2004 crowd. The people that bought before 2004 dont have a clue about housing costs and feel they are miraculously entitled to their housing doubling in unreal value having done nothing to earn this other than being gifted in buying before 2004. That being said a person in Calgary can read on the internet and strongly consider their options for Calgary housing. Given that most rentals are as much as a mortgage, job security factors, and age to retirement factor in choosing a place to live as well as consideration of rate increases for requalifying given present income status. That is what matters not all that crap about housing being an investment, yada yada. Yes, it is, possibly, but first and foremost a person needs a place to live. It is quite challenging finding a decent place to rent/buy in Calgary due to the logistics of the city and the costs. Many of the new communities dont even have schools, so who wants their child on a bus for two hours every day? I dont, and no sane parent would, although Calgary is quite insane. To get a real idea of this, try driving in Calgary when school is in session. This is precisely why I dont vacation in the summer because traffic is so much better, the sheer volume of school shuttling during the school year is unbelievable and everyday I fear for my life driving in Calgary.

So this blog performs a necessary service. Hopefully other smokers like you quit before they end up in the hospital or dead, because I see plenty smokers every day which have bundles of cash to waste on smokes, not an ideal investment situation.

#110 White Rock Mom on 07.10.13 at 10:36 am

My favourite line in many property descriptions is “Priced to Sell!” Sometimes I look at the price and I think “Priced to Keep!”

#111 willworkforpickles on 07.10.13 at 10:38 am

Maybe they could throw in a 1977 honda civic or plymouth horizon to sweeten the deal.

#112 Ret on 07.10.13 at 10:46 am

So which bank will have the honor of lending a 90% LTV, 30 year mortgage on this little gem, all CMHC insured of course.

I’ll never understand mortgages in Canada. A crap house in a not so great neighbourhood, being sold to a sketchy low income buyer, has basically the same mortgage rate as the brand new million dollar home whose owner only needs $300,000.

CMHC has totally distorted the risk/ reward tradeoff in Canadian RE mortgages. A less than 50% LTV renewal on a solid property for a whistle clean borrower should be well under 3%. A property like this one today, is probably uninsurable and not worthy of a mortgage at any rate.

#113 Donald Trump on 07.10.13 at 10:49 am

#96 Smoking Man on 07.10.13 at 8:57 am

No need to use your bare hands.
Put it in a thin zip lock bag before firing.

PS Is this why your Tim’s franchise closed ?

#114 Numbers Guy on 07.10.13 at 10:52 am

Hey Garth…price is driven by supply/demand. Do you know what the avg number of days to sell is, and the average price relative to real estate market? ie) if prices are dropping and time to sell is increasing then we have a problem vs prices are increasing and avg time to sell is flat or decreasing then market is solid???

#115 Old Man on 07.10.13 at 11:07 am

You have all missed the obvious about that little gem, as have not seen what is nextdoor, and the lovely strip plazas around the corner; small but on both sides of the street with stores to die for. The buyer better have cash, as no mortgage for that dog.

#116 Holy Crap Where's The Tylenol on 07.10.13 at 11:21 am

Just flew back into Lake Toronto from San Diego last night. Holy Crap WTF happened here? We never even heard a peep about all of this incredible prolific and horrendous flooding whilst in the hot, dry sunny climes of Socal. After talking with relatives back in Socal they all said big deal, it happens every year here. We discussed the craziness of Toronto home prices whilst sitting on Pacific Beach enjoying a cold beer. Oh yes you can drink on a beach in the USA. We all agreed that the inevitable is coming to the Toronto Zombie Minions that proliferate along the shores of Lake Toronto. I said as soon as you cross the boarder going along the QEW from here in Oakville to the South west end of the city people take on a different appearance. They go from normal, to Zombie property dwellers and nothing, bar nothing will get in their path from procuring that which most Zombies desire; a Zombie domicile where they can procreate more little Zombies. In Socal they have their own Zombie property dwellers but the last few years have killed most of them off. Apparently though of late it appears that Socal is seeing them creep back in the areas of Pacific Beach, La Jolla, Mission Beach and Sunset Cliffs. So therefore I conclude Zombie property dwellers are not inherently only indigenous to Toronto but are out there everywhere. The last thing I heard one of my relatives say was what kind of an idiot would pay more money for a home than its contemporary in another neighborhood? I replied cousin; “It’s been a long time since you have been back to Toronto. It really is like the Walking Dead here.”

#117 TnT on 07.10.13 at 11:33 am

#102 TnT
Are you racist or homophobic as well as ageist? — Garth

****

Nope just ageist and its hard not to be when my family is paying %50 tax on every penny I make PLUS tax on everything I buy PLUS watching these Baby Boomers burn and pillage their way through life when they were handed the greatest opportunity ever presented to mankind….

To lump nine million people into one group says more about you than them. Grow up. — Garth

#118 WiseGuy on 07.10.13 at 11:48 am

Great post not so wiseguy.

So where are the boomers going to move to Einstein?

Let me guess, a rental unit like you…….

Perhaps you missed my point Craig. My point is that the market will further be flooded by boomers, whom essentially will need to sell their homes in order to generate revenue upon which to live on.

This is a very likely scenario as I know that my wife’s parents plan to sell their home and buy much lower in order to retire. I say sell now, but they insist upon living in their home.

There are thousands upon thousands of young 20 something year olds that have no work, but huge financial liabilities. These young kids in 5-10 years would be the natural ones to purchase these homes, but without the cash and necessary downpayment needed, there will not be the demand that there once was, which will in effect bring the cost of buying a home down.

With increased supply and less demand, home prices will further decline, in addition to higher interest rates, the outlook for housing 5-10 years down the road does not look good.

So, you can call me what you want, but the reality is that prices will fall!

#119 dosouth on 07.10.13 at 11:52 am

#83 Buy? Curious? on 07.10.13 at 2:40 am

Way to go, officers! Toronto cops……”
__________________________________________

Whoa, someone woke up on the wrong side of the cell doors me thinks….! – or failed the entrance exam

#120 Smoking Man on 07.10.13 at 11:56 am

#109 calgary rip off on 07.10.13 at 10:24 am
#94 Smoking Man:
Given that you are a smoker, that makes you an idiot(next time look at the pictures on the packs of smokes you buy and read the warnings). Your comments make you an even bigger idiot.This blog outlines the reality of the dilemma that is known as real estate ripoff. What this blog does is question the status quo. How is this bad?
……..

Of course I’m an idiot for smoking, but it’s my choice as a free man. As far as my comments being idiotic that’s where your argument falls apart..

This blog is about diversification, it’s theam is don’t put all eggs in one basket. Can’t you read.

The venomous attacks against banks, mortgage brokers, MSM, Realtors, Developers is really an admission of defeat on all the dogs that post here. You haven’t figured out how to get to that next income level so you lash out.
It can’t be your fault you work for poverty wages, some else fault right.

Real Estate is a market, based on supply and demand, it’s that simple. Too high they stop buying, too low bidding wars.

I can’t believe I come here every day with no agenda and try to help you dogs out of the matrix, it’s like you are all getting dumber..

#121 Suede on 07.10.13 at 11:58 am

Double Top in BoC bond yields (5-10 and long term) seem to be forming on the short term time period.

#122 kc on 07.10.13 at 12:06 pm

When I look back over the past 25 years am I any better off? Then if you were making 18 bucks an hour you were doing good, today, if you can get 18 bucks an hour are you doing good or barely scraping by?

Did anyone catch this 90 minute special on PBS Frontline last night? if not you can watch this and see if we (canadians) have been fed a line of BS to live by.

This will put your life into perspective, and get you prepared for what is coming to a family near you. unless you have cashed out on the housing lottery.

cheers

http://www.pbs.org/wgbh/pages/frontline/two-american-families/

#123 Donald Trump on 07.10.13 at 12:15 pm

East side is now the place to buy

Vancouver: Homeowners looking for something more affordable driving up prices

http://www.theprovince.com/business/East+side+place/8639065/story.html

QUOTE:

A new Royal LePage survey says that “standard, two-storey” detached homes on the city’s east side increased in value in the last year by 2.4 per cent – from $825,000 to $845,000 – while pricier units on Vancouver’s west side decreased by 3.1 per cent – from $1.6 million to $1.55 million.

Realtors Jacob Krause and Jacky Levi have personal experience with this trend – recently a renovated East Vancouver home on East 23rd Avenue listed at $899,000 was flooded with seven offers – and eventually sold for $1.058 million, fully $159,000 over the asking price.

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

Remember…an anomaly = a trend.
Make your worst life decision now or lose out on eternal regret forever !

*E*
VAN
*S*
*T*

= what Surrey people consider to be the Promised Land.

#124 TnT on 07.10.13 at 12:33 pm

#117

To lump nine million people into one group says more about you than them. Grow up. — Garth

***

I’m talking about a Generation and you turned it into individuals so I guess I’m a Generationalist….

No, probably just an under-achiever looking to export blame. — Garth

#125 joe calgary on 07.10.13 at 12:44 pm

So what does this mean for Calgary where sales are up and inventories are down? If lower sales and higher inventories are a lagging indicator of prices coming down than what effect do higher sales and lower inventories have on price?

#126 Ralph Cramdown on 07.10.13 at 12:57 pm

Are you racist or homophobic as well as ageist? — Garth

Oh c’mon, Garth. The standard un-rejoinder-able ad hominem attack is “have you stopped beating your wife yet?”

Baby Boomers may not have voted en bloc, but the fact remains that a plurality of them voted themselves pay-as-you-go retirement benefits which a cursory glance at demographics indicates is grossly unfair, and supported governments which allowed healthcare and post-secondary schooling costs to grow beyond inflation and population growth. Healthcare costs got paid out of general revenue, but the schooling costs got transferred to the recipients — funny how that is.

I’m too young to be a Boomer and too old (and liquid) to have been completely screwed by this recession, but if I was a member of the cohort that got told they could pay off their student loans until they were 47 and not collect their cheques until they were 67, meanwhile being encouraged to buy a home at monster prices because RBC says affordability isn’t too bad given some wobbly assumptions, I’d be pretty steamed.

“The fact remains that a plurality of them voted themselves pay-as-you-go retirement benefits.” Wrong. The CPP was established in 1965 by the Pearson government, when most Baby Boomers were in Grade 7. Try to have fact-based prejudice. It’s so much less embarrassing. — Garth

#127 Mike T on 07.10.13 at 12:59 pm

Fairly certain that even weed growers wouldn’t buy a 370sqft home for 350 000$… Even with the electric light fixtures!
——-
LOL
of course they wouldn’t – renting would be so much cheaper!

#128 saltpony on 07.10.13 at 12:59 pm

#81 Freedom First

Could you please rein in the misogyny?
It is offensive.

#129 Spiltbongwater on 07.10.13 at 1:17 pm

Does anyone know if the tiny house has good Feng Shui?

#130 Old Man on 07.10.13 at 1:24 pm

This is the best laugh in months to see this dollhouse getting a listing. There appears no place to park a car unless one hops the curb to hangout on the front lawn. The main bedroom is dressed with a closet prefab special; the bathroom is a cheap one at best; the kitchen has no appliances; and where is the basement?

Ok see that trapdoor in the kitchen heading for something called a basement. This is a great feature to get rid of the mother in law who visits all too often, so she disappears for awhile to shut her up. Where is the beef, as no way can see ~$50,000 in upgrades, but bet the receipts have disappeared.

THIS IS A CLASSIC!!!!!!!!!!!!!!

#131 TheCatFoodLady on 07.10.13 at 1:34 pm

To the current owners of that ‘house’ – idiots! You missed some GREAT opportunities to up the price. You could have jacked it up at least $30K if you obtained permits for an addition before listing the place.

And that garden shed out back? Should have slapped some granite in there as well & flogged it as a granny flat. More money in your pocket.

Amateur!

#132 sciencemonkey on 07.10.13 at 1:40 pm

@124 Garth’s comment, and @120 Smoking Man

I am 29 years old, and my brother is 32-33. I was complaining to him that even after a decade of post-secondary obedience certificates in the physical sciences, I am not middle-class because I cannot afford a house. The fact that I landed a decent job right out of school shows that I’m lucky as well as good at what I do.

My brother made a great point, saying I am middle-class, but middle-class for my particular generation. The point us pathetic, whining Gen Y are trying to make is that for a relative level of success within one’s cohort, there was a lot more material wealth for the baby boomer generation than there is for Gen Y.

Smoking Man’s solution is to find a way to improve one’s success within one’s cohort. For example, if I go from top 20% earner to top 5% earner, then I will be able to afford the lifestyle of a top 40% baby boomer earner. I often wish I had done an MD instead (or had the natural personality for business), and while it means even more lost wages if I were to pursue or retrain for something else, it’s still an option. However, this is not a solution that can help many people, because there are only so many chiefs vs indians.

I think this comes back to a more basic question, namely why does Gen Y expect to have the same things their parents did?

#133 espressobob on 07.10.13 at 1:47 pm

I’d swear thats a Jed Clampett style outhouse. I thought those were banned in Ontario?

#134 Calgary's OK on 07.10.13 at 1:49 pm

I am what you call a “pre 2004” crowd, which is wrong, because RE prices run up in Calgary started in late 2005, not 2004. Another thing you are wrong about is to describe us as a group of people that “don’t have a clue about housing costs and feel they are miraculously entitled to their housing doubling in unreal value having done nothing to earn this other than being gifted in buying before 2004” Well let me tell you something about pre 2004 times you may not know about; this was a time when Deerfoot Trail was not overwhelmed with traffic, jobs in Calgary were few and far between, average salary was lower in comparison with other major Canadian cities, climate was still harsh and there was not much to do around here other then go to a few events including Stampede. Houses were affordable, this is true, but interest rates were almost tree times the current rate, and I used to know a lot of people who came to Calgary looking for jobs and left because they couldn’t find any. When we have bought our first house, in now mythical “pre 2004” times, we took a lot of risk and barely managed to qualify for the mortgage, because requirements were much stricter (full time job, 20% down, 25 years mortgage, 7.5% interest rates, yada, yada, yada). Taking into account all mentioned above, can you explain to me, how exactly I and others from the “pre 2004 crowd” all of a sudden “don’t have a clue about housing costs”? Because we didn’t listen to the doomers and invested our hard earned money into RE estate at the time when nobody was excited about Calgary, we apparently “having done nothing to earn this other than being gifted in buying before 2004.” Why did you hung up on 2004? Don’t stop there, start complaining about “pre 1990 crowd” and “pre 1980 crowd”, I’ve heard RE was really cheap back those days, you could buy a house in Calgary for 50K.

#135 Ralph Cramdown on 07.10.13 at 1:50 pm

“The CPP was established in 1965 by the Pearson government, when most Baby Boomers were in Grade 7. — Garth”

As to CPP, are you arguing against my fundamental assertion that ‘Gen Y’ and to a lesser extent ‘Gen X’ are getting screwed over by older generations, or are you just nitpicking about who exactly voted for what and who let prior generations’ foreseeably inequitable decisions ride? The education downloading is all recent, but I won’t bore you with the numbers I and my immediate family experienced.

I merely pointed out you are more prejudiced than wise. — Garth

#136 Calgary's OK on 07.10.13 at 1:57 pm

#109 calgary rip off on 07.10.13 at 10:24 am

My post above was in reply to your post, calgary rip off, just in case if you missed it.

#137 Old Man on 07.10.13 at 2:15 pm

I sent this listing to an old friend of mine who was a building contractor many years ago, as he said stop messing with your adobe photoshop pranks on me, and said this was the real deal. So said what is your take, and on this all, and said this must be a joke. Ok, said you remember the prefab operation in Toronto that has been in business for many years, and said yep.

He would have smashed it down, as for $15,000 today can buy a kit that can be customized upon a foundation that would come in at about $20,000 for a complete shell with more square footage with an upper floor to be put up in two days. The work inside with top stuff would cost an additional $20,000 including labour, so for $40,000 one could have a superior dollhouse.

#138 Timing is Everything on 07.10.13 at 2:27 pm

Did someone say free sno-cones!?

#139 craig on 07.10.13 at 2:31 pm

“I like your passion, attack stupid ideas not stupid people. ”

Thanks SM.

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

118 WiseGuy

“So, you can call me what you want, but the reality is that prices will fall!”

First off you said boomers will have to sell because they have no money and that will flood the market.

HUGE assumptions.

Then you change your story to read that they will downsize. So how is downsizing flooding the market? It creates churn and if anything it will drive prices higher, not lower.

I agree 100% that prices will fall AND lo and behold, they will rise again.

That’s just the way it works

#140 Devore on 07.10.13 at 2:37 pm

The Google streetview for this “dollhouse” is hilarious. I doubt this “house” is even insurable. If you are considering buying, save yourself $300,000, buy a doublewide, and move into a trailer park.

#141 craig on 07.10.13 at 2:38 pm

So sad.

Engineer of runaway train that devastated Quebec town apparently had not set enough handbrakes, CEO of railway says.

#142 Bargains everywhere on 07.10.13 at 2:42 pm

I am a boomer and I agree that younger people today have it much tougher than we did. I graduated university in the midst of a recession and it was very difficult to land my first job but when I did, it was full time, permanent and with benefits. Today, recent graduates often have to move from contract to contract before landing a permanent position and benefits, if any, aren’t what they used to be.

Also, I used to be able to earn enough at a summer job (retail, nothing special) to pay my tuition for the year. I really don’t think that is possible any more. Kids graduate with more debt and less lucrative job prospects. Add to that the astronomical prices for housing these days and they really are screwed.

I’m not saying it’s been a free ride for boomers as a lot of people seem to think. My mortgage climbed from 9 1/4% to 13% while my older sister-in-law endured mortgage rates in the 20% range in the early 80s.

We were the first generation to experience ‘downsizing’ and nobody was prepared for it. When you had a job, it was yours for life so when you were ‘downsized’ there was a real social stigma around it. People were not prepared for this financially either because it had never happened before. Nowadays, it’s commonplace and I think people are better prepared but it was a huge adjustment for my generation.

Every generation has its trials and tribulations but some generations do have it tougher than others. Young people who hit their 20s during the Great Depression in the 1930s and then headed into WW2 got the short end of the stick. Life can’t have been easy for them.

I feel for the young people today. I wish there were better opportunities for them. I wish housing was more affordable. Condos are not the answer. Families need houses to grow in.

I have no idea how to solve any of this but something somewhere needs to give.

#143 Piccaso on 07.10.13 at 2:50 pm

I sent that garden shed duplex pic to American friends.

Comments… that’s totally ridiculous, reality has left your country, crack shacks here go for $500, is that thing even livable.

#144 nancy on 07.10.13 at 2:57 pm

The village whisperer blew through our streets today yelling “The mayor is selling, the mayor is selling!!” The neighbors closed the blinds and told the children to stay indoors. The sky darkened, ominous music played, and the stench of fear filled the air. The end is near. Even the fearless laneway housing lovin leader is abandoning the city. Tales would be told in the future of how mayor moonbeam cashed out quietly at the peak, and invested in the States after reading a blog from a wiseman.

#145 snake on 07.10.13 at 3:00 pm

15% of downtown Vancouver condos sit empty, turning areas into ghost towns looks like people in Vancouver have lot of money to park into these condos

http://www.theprovince.com/business/downtown+Vancouver+condos+empty+turning+areas+into+ghost/8135204/story.html

#146 Isostar on 07.10.13 at 3:05 pm

Nice comment from RE agent:

“The list price is irrelevant,” she explained. “It’s about testing the market… You have to find that high end buyer”.

BUT:

Though the $10 million closing price is the highest seen in the municipality in five years, Chiasson noted that the Stonebridge property was on the market for “a couple of years” before it sold, and that the original listing price was $15.7 million.

http://www.huffingtonpost.ca/2013/07/09/whistler-real-estate-most-expensive_n_3569772.html

#147 TnT on 07.10.13 at 3:14 pm

#124 TnT

No, probably just an under-achiever looking to export blame. — Garth

****

Nope… wrong again… I’m just a Gen X’er making do with less paying the Baby Boomer’s tab and belly aching about it.

What I said. — Garth

#148 rosie "moving forward" on 07.10.13 at 3:21 pm

#133 sciencemonkey

Try to show more than Chai Quan Caine did. Mind you, he wasn’t a boomer. http://2.bp.blogspot.com/-IiTlFrX0DH4/T4G1LNZmepI/AAAAAAAAA7A/moqZZhgtQNk/s320/patience_grasshopper.jpg

#149 Old Man on 07.10.13 at 3:23 pm

I see that some of you are trashing the baby boomers, as it is all their fault. I have news for you, as those were tough times because it you hit the street with unemployment was hard to find a job because the competition with degrees was beyond the pale, and potential employers had a field day to pick and choose who they hired. The trick for getting a job was all about the old boy system; not with a resume, but with connections through friends and family.

#150 Doug in London on 07.10.13 at 3:28 pm

“The CPP was established in 1965 by the Pearson government, when most Baby Boomers were in Grade 7. — Garth”
———————————————————-
Really? In 1965 I wasn’t even in school yet, it would be another 9 years before I was in Grade 7 so we Boomers are far from being a homogeneous bunch.

#151 espressobob on 07.10.13 at 3:34 pm

#143 Bargains everywhere

Great comment! Being a fellow boomer all we can do is try are hardest to help the youngsters to think outside the box. Tough task! This job aint easy but we can only try. If only our education system was on the ball!

But it really sucks watching people learning things the hard way. Maybe they should read this blog!

#152 Paolo Di Petta, Mortgage Agent on 07.10.13 at 3:45 pm

#100 – Thanks for the linkback Ralph.

Yeah, if you poke around the rest of my blog, you’ll see how bearish I am on Real Estate (especially Condos) right now. The fact is, it’s neither affordable nor sustainable for most new buyers.

And the fix isn’t giving them easier access to borrowed funds (which has been one of the major drivers of price increases), but instead, it’s bringing down values to more realistic levels.

“Hence the continued emphasis on price (which is a lagging indicator) rather than sales (a leading indicator). With fewer deals taking place at the lower end of the spectrum – to be expected with more first-timers knocked out – average prices rise, even as volumes decrease. Never a good sign.”

I’ve been saying this for months. In fact, I eventually got tired of explaining it over and over again and covered it (and a few other smokescreens that realtors use regarding the Toronto market) right here: http://mrt.gs/5smokescreens

Enjoy!

#153 TallOne on 07.10.13 at 3:48 pm

Garth,

I’m a 27 year old male living in his parents basement with a great career with the feds. I can retire at 55 with 70% salary. I’m about to move out of the family house, marry the girl, and start a life.

Until I stumbled on your blog we were about to drink the RE kool-aid and buy a poopy 400k house in the GTA. We have about 120k saved up.

Take home message to property virgins: rent until this correction happens?

#154 Donald Trump on 07.10.13 at 3:49 pm

Irish people issue warning to banks by shutting down repossession auction.

Allsop Space is an English Company who had no involvement with Ireland until after the Banking Crisis and resulting attack on struggling homeowners and small business people.

They are here for one purpose and one purpose only, to cash in on the misery and misfortune of Irish people who have been let down by Banks and betrayed by politicians.

http://www.youtube.com/watch?feature=player_embedded&v=CBE0tqqOOIQ

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

This is a real beauty to watch , especially the end !

#155 Rational Optimist on 07.10.13 at 3:50 pm

When CPP was first established, the contribution rate was 1.8% of earnings. This crept upward for the next few decades, but most of the “reforms” to CPP were focused on increasing benefits, not contributions.

In the 1980s, it became increasingly clear that CPP was not financially sustainable. Few changes were made because of a general lack of political will. In the late 90s, finally, major changes were made (including creation of the CPP Investment Board), which among other things aimed to increase contribution rates from the then-6% to 9.9% in 2003. That increase did happen. No further contribution increases have been proposed since then, but CPP is now thanks to those changes sustainable for the next 75 years.

I read this as workers after 2003 subsidizing workers from before 2003. Boomers didn’t vote to implement OAS or CPP, but as voters they and the preceding cohorts did kick the can down the road by ignoring the fact that contribution rates and taxes would need to be increased to sustain these schemes.

Likewise with EI, which Trudeau’s government expanded to become the 10/42 system that only began to be rolled back in the 90s (by both Tories and Liberals).

There’s nothing wrong with pointing out the occasions in which voters of one generation collectively decided to pass the buck to the next. In fact, it can be a good lesson.

#156 Grantmi on 07.10.13 at 3:51 pm

#130 Spiltbongwater on 07.10.13 at 1:17 pm
Does anyone know if the tiny house has good Feng Shui?

No! But it smells of Dung Pooie!

#157 Donald Trump on 07.10.13 at 4:02 pm

“The CPP was established in 1965 by the Pearson government, when most Baby Boomers were in Grade 7. — Garth”
====================================

Do people that believe in reincarnation get any retroactive pension ?

#158 Old Man on 07.10.13 at 4:17 pm

#141 Devore – well can see he took a look, and there is even a coin laundry operation around the corner, so what does this tell me about this great area for a buy? It tells me something, and says stay away, as no way is there investment quality there, but there is indeed a great stores and restaurants nearby, so for the greater fools in life hoop this bargain before it is too late.

#159 Panhead on 07.10.13 at 4:19 pm

#142 craig on 07.10.13 at 2:38 pm
So sad.

Engineer of runaway train that devastated Quebec town apparently had not set enough handbrakes, CEO of railway says.

————————————————————-

My educated guess: For reasons unknown to me the loco shut down (or more likely was shut down) which shuts down the air compressor, then over period of time (depending on how many air leaks it has) the air bled off the braking system, no hand brakes (or not enough) set to hold the train and she rolled away. Seen it happen many times. Someone at the bottom of the food chain is gonna take the fall for this. What was the company policy on this? If the public only knew the “reality on the rails” they wouldn’t sleep quite as well at night …

#160 Dupcheck on 07.10.13 at 4:29 pm

A baby boomer with high school diploma had more (better job, house, caddie not kia etc) than what a bachelor degree gen y has now and that is a fact.

You’re joking. — Garth

#161 Old Man on 07.10.13 at 4:32 pm

I have yet to give my interpretation on this pic that was put up, but look to the right with the gal who is being carried by the cop, and they both are smiling as she enjoyed the ride, and bet she gave him her phone number to hookup later on, and such is life, as never try to take ever trash a meeting that might turn into a romance of sorts.

#162 45north on 07.10.13 at 4:32 pm

troublesbrewing: We are even now weathering the impacts of the second and much more severe wave of mortgage loan interest rate resets, as a tsunami of Adjustable Rate Mortgages (ARMs) have hit their reset points.

you know I had forgotten all the charts and warnings about the resets. well guess what seemed distant is now upon us

[email protected]

#163 12ax7 on 07.10.13 at 4:36 pm

Thanks sideline sitter,Peter and bondjunkie. Your comments are appreciated. I,m starting to think that the factors most influencing housing prices in Parkdale are more structural (gentrification shift in population from largely low income to middle and higher income, finite supply of sfh) rather than cyclical. I think I,m going to hang on to my place for awhile and wait and see, anyway after 20 yrs I,m almost finished my Reno,s and my buddy who lives in the bsmt is actually starting to pay me rent again!

#164 Canadian Watchdog on 07.10.13 at 5:09 pm

#161 Dupcheck

A baby boomer with high school diploma had more (better job, house, caddie not kia etc) than what a bachelor degree gen y has now and that is a fact.

Let's check… The Windsor Star – Mar 20, 1971

Ontario median income was $8,994; average GTA home price was $31,822; equating to a 3.5 price-to-income ratio. What should Ontario's average salary be today assuming a consant 3.5 ratio?

Year / GTA Average Home Price / Median Income / Ratio (Constant)

1971__$31,822__$8,994__3.5
1975__$58,180__$16,621__3.5
1980__$80,023__$22,864__3.5
1985__$115,652__$33,044__3.5
1990__$255,020__$72,863__3.5
1995__$203,028__$58,008__3.5
2000__$243,255__$69,502__3.5
2005__$335,907__$95,974__3.5
2010__$431,276__$123,222__3.5
2013__$518,832__$148,238__3.5

Now factor one versus two household workers and the results should be obvious.

#165 Old Man on 07.10.13 at 5:11 pm

#164 – 12ax7 – whatever is happening in the Parkdale area has more to do with an ethnic factor, as that is what the bottom line is in this area of Toronto, as there are certain groups that want to stay together, and all is well in my book.

#166 craig on 07.10.13 at 5:12 pm

You think that house is small…try 40 Sq. Ft at a cost of $480 per month

http://www2.macleans.ca/2013/06/05/packed-to-the-rafters/

#167 nancy on 07.10.13 at 5:41 pm

The mayor of Vancouver, Gregor buys his house using a corporation, which only asset is his house. His wife is the director, and he is the shareholder. Why? Should we all do this? Is he planning for a doomsday scenario? Tax avoidance?

#168 Bargains everywhere on 07.10.13 at 5:57 pm

#165 Canadian Watchdog on 07.10.13 at 5:09 pm

You have a valid point but I would suggest that the mortgage rate should also be factored into the equation. In 1971 a mortgage was about 7.5% which is more than double today’s rate. House prices today would be comparably higher as prices tend to increase as rates decrease, regardless of income. Not sure how you’d quantify it but maybe there is a genius out there who has devised a formula.

In any case, I agree with you, I believe it was much easier to buy a house at that time. However, I should point out that rates were on the way to 20% (!) in the 1980s which the young’uns today could probably not even fathom. Just think about a variable mortgage under those circumstances.

#169 Mister Obvious on 07.10.13 at 6:05 pm

#161 Dupcheck

Thanks for giving this old timer an excuse to talk about how much better we had it.

I graduated from high school in 1968 a very average student without further academic prospects. (That all came much later when it was more difficult to do).

I got my first real a job in a paint factory making $2.50 per hour. (Unionized: Oil Chemical and Atomic Workers)With 26 paychecks per year, that was $5,200. To be fair, that also included 4% vacation pay, grudgingly given, and of course, no sick pay.

The Bank of Canada’s inflation calculator shows that would be the equivalent of about $34,287 per year in 2013. Hey your right! I was rolling in cash.

#170 Tomato Head on 07.10.13 at 6:12 pm

Our tax dollars at work – knee high in water and he carries the lighter load lady – geez – I would give him credit if that was a 350pound lady …

Just watched a documentary on Virus – don’t worry people – the day will come when a killer virus is gonna wipe out 1/4 of the population – there will be homes available for pennies on the dollar – the post here may go as why we aren’t owing 2 or 3 homes …

When people view homes once again as shelter – then we are back to normalcy.

#171 Dad on 07.10.13 at 6:37 pm

#143 Bargains everywhere on 07.10.13 at 2:42 pm

The “something” has already gave. Canadian have simply stopped reproducing.

#172 drydock on 07.10.13 at 6:38 pm

#98 Hobo Joe

Vertically challenged.

#173 TurnerNation on 07.10.13 at 6:41 pm

I guess the NDP govt is ruinous to NS?! Oooh those lefties!

DBRS upgrades Nova Scotia’s credit rating

By IE Staff | July 08, 2013 11:25

Nova Scotia has earned its highest yet long-term credit rating from Dominion Bond Rating Service (DBRS) in recognition of the province’s return to a balanced budget through strong fiscal discipline and steady improvement over four years.

DBRS upgraded Nova Scotia to “A (high)” with a stable outlook, and short-term credit rating to “R-1 (middle)”, saying Nova Scotia’s fiscal recovery is well ahead of many other provinces.

“We kept our commitment to balance the budget while protecting and improving the public services Nova Scotians value most, and avoiding the $1.3-billion deficit we were headed for only four short years ago,” said Finance Minister Maureen MacDonald. “Thanks to the help of all Nova Scotians we now have a stronger foundation to build a better future on.”

#174 Julie on 07.10.13 at 7:16 pm

Nope… wrong again… I’m just a Gen X’er making do with less paying the Baby Boomer’s tab and belly aching about it.
———————–

Excuse me but I think I resemble that comment!!

#175 Julie on 07.10.13 at 7:20 pm

I got my first real a job in a paint factory making $2.50 per hour. (Unionized: Oil Chemical and Atomic Workers)With 26 paychecks per year, that was $5,200. To be fair, that also included 4% vacation pay, grudgingly given, and of course, no sick pay.

The Bank of Canada’s inflation calculator shows that would be the equivalent of about $34,287 per year in 2013. Hey your right! I was rolling in cash.
——————————–

Your forgetting inflation numbers are bunk and taxes were half of today. So it was actually like you were making 80 grand today. Gas is up 3000% for example…..wages are not

#176 jess on 07.10.13 at 8:30 pm

.#109 calgary rip off
i enjoyed reading your opinion especially the part where one has to live somewhere

lending to smaller landlords

Blackstone Launches Buy-to-Rent Lending Arm

World Property Channel ‎- 2 days ago
A major player is set to expand the financing available for landlords in the U.S. buy-to-rent market.