$803,649

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Steph lives just four blocks away. “I walked by the place shortly before the open house, and on a freezing cold, 20-below day, there were no less than 4 cars waiting outside the house, engines running, presumably occupied by people ready to sign the deal,” she tells me.

And that’s exactly what happened. When the appointed hour came and went, 145 Galley Ave., in the emerging but dodgy west-end Toronto hood had sold for $803,000, a far cry from the $649,000 being asked by the old woman who was allowed to live there with no furnace, missing windows, leaky roof, knob-and-tube wiring and walls caked in soot from years of burning kerosene heaters.

“I can’t believe this house sold for over $150K over asking!!,” says Stephanie. “It is the dumpiest dump I think I have ever seen.”

It will require at least $400,000 to gut and repair the place, but that didn’t stop a bidding war. These days anything below seven – even a place which is essentially uninhabitable, not to mention sad – is likely to bring out at least a handful of yuppies so desperate to buy that they have gone insane. Realtors chortle and say it’s another example of a real estate market which has lots of juice. But exactly the opposite is true. Let me tell you why.

This is panic buying. It’s what happened when investors plowed $300 million into the stock of a profitless company with a good marketing plan called Pets.com in 1999. They lost everything. It’s the story of Nortel or Bre-X, or the ‘buy now or buy never’ mantra which swept Vancouver during the manufactured Yellow Peril episode of 2012. History is rife with the detritus of human emotion – people buying and selling at precisely the wrong moments, because they are massively influenced by society, not logic.

After all, paying $803,000 for 145 Galley Ave, which requires $400,000 more is illogical when $1.2 million gets you a better house down the block. Even more to the point, why would anyone buy at all, given the certainty of what’s coming?

This year, 2014, has started with the weakest economic data for Canada since the 2008 collapse, and the worst year since 1972 for the dollar. The latest Bloomberg Nanos polls shows consumer confidence has slipped, while analysts are even more skeptical about where things are headed. Says Sebastien Galy, a senior foreign-exchange strategist in New York at Societe Generale SA: “The next leg to watch is housing data in Canada as the party now seems to be over. The bubble had long supported consumer spending and that leg seems to be cut.”

Now a major bank agrees. TD economists are unequivocal in a new report that they expect a drop in real estate values or 10% to 25% Actually it’s worse than that. TD agrees with international observers like Deutsche Bank, The Economist and the IMF that compared to rents houses here cost 60% too much, and are overvalued by 30% relative to incomes. If interest rates were not still at emergency levels five years after the emergency, nobody would be paying $803,000 for a banger in the west end.

The bank is projecting interest rates will rise by less than 1% by the end of 2015, but that’s enough to cause serious disruption after so many people have been dorks. Even a small correction in prices could send the market tumbling if it’s accompanied by weakness in the economy. “In this case, housing activity can undershoot fundamentals. For example, if prices are 10 per cent overvalued, they could still potentially fall by 25 per cent if triggered by a spike in interest rates or a negative economic shock,” the report says.

Imagine that. A 25% decline would take us back to 2009 prices in most markets, and make fools of all those people who bought with 5% down when it was so much less expensive to rent. Without persistent, sustained capital appreciation, housing is a terrible investment, especially factoring in its giant entry and exit costs.

And this is where emotions trick us. The Bloomberg poll found only 19% of Canadians think the economy will be any better in a year. But 38% believe house prices in their neighbourhood will be higher. A scant 12% believe they could fall.

The trash can house of horrors, its multiple offers and massive premium, simply underscore that so many souls have lost their way. History, economics and common sense no longer apply in the lives of people with stagnant wages, record debt, big houses and no money. They inhabit a game show reality, where nobody actually loses.

And realtors always win.

BEDROOM modified

 

KITCHEN 1 modified

217 comments ↓

#1 Not 1st on 02.03.14 at 8:48 pm

Garth no comment on the broader market today? Has anything fundamentally changed to cause this drop or is it a buying opportunity?

#2 Derek R on 02.03.14 at 8:48 pm

Those pictures are scary. They prove beyond any doubt that the buyers were paying for the land — not the house.

#3 dosouth on 02.03.14 at 8:49 pm

New regulations for ScotiaMortgage today. Slide baby slide!

#4 TurnerNation on 02.03.14 at 8:50 pm

Gentlemen (and remaining Ladies): dust off those bond funds!

#5 Mike on 02.03.14 at 8:50 pm

Only 800K???
If it’s anywhere in Vancouver I’ll pay 1M right now, cash!
:)

#6 Tri-Guy on 02.03.14 at 8:51 pm

$803,000…that’s more embarassing then the bronco’s spread.

#7 MarcFromOttawa on 02.03.14 at 8:51 pm

1st!!!!!!!!!!!!!

#8 Dual Citizen in Canada on 02.03.14 at 8:51 pm

$803K is nothing when that crack house can return $1M a month, easy. Criminals are house horny too.

#9 KG on 02.03.14 at 8:55 pm

When hypothermia sets in, people start taking off clothes.

#10 1drs on 02.03.14 at 8:56 pm

First let me say I wouldn’t let my dog live there. There is little doubt that the successful bidders won’t live there for a while yet either. This will just be added to the unrecoverable costs associated with buying this dump. If the markets drop even 10% the new owners will probably panic and try to sell. That kind of thinking will destroy the market quickly and completely. Lots of Canadians are going to get hurt here and that is a very sad result of the CPC’s bad economic policies

#11 Ian on 02.03.14 at 8:57 pm

I like what she did with that table in the second photograph. Ties the whole room together.

#12 tax payer on 02.03.14 at 8:57 pm

What is TD and the other banks doing to hedge their bets. Or are they waiting for the tax payers to pick up the tab like in the US. Canadian housing mortgage insurance has limited funds…

#13 Steve French on 02.03.14 at 8:57 pm

Being FURST is the hardest unpaid job in the world….

FIRST!!!

#14 Smartalox on 02.03.14 at 8:58 pm

If there is any one piece of evidence that house prices are completely divorced from fundamentals, this has got to be it.

#15 bguy1 on 02.03.14 at 9:02 pm

You forgot the tulip bulb craze: http://en.wikipedia.org/wiki/Tulip_mania

#16 Linda Pearson on 02.03.14 at 9:06 pm

What about the poor old soul who once lived in that hovel? At what point did the upkeep and repair get away from her? When did she realize that living in those conditions was too awful to contemplate and also know there was no way out for her?

I don’t know this to be true but I suspect that all the money from the sale will not help her one bit unless there is actually a caring neighbour or legal adviser who will take it in hand to see that she is suitably housed in a retirement residence somewhere or a caring nursing home. Please God, don’t let there be family members who are suddenly “concerned and interested” in her well-being.

#17 Paolo on 02.03.14 at 9:07 pm

Truly sad.

Sad comment on the Canadian Middle Class in 2014.

#18 gameover on 02.03.14 at 9:08 pm

Looks like a Hollywood director may have purchased it as the set for the upcoming SAW VII…..they may have to clean this place up a bit first, as the SAW set is not quite as gory……

#19 Van on 02.03.14 at 9:10 pm

I was in the doctors office and the nurse was saying she was really worried that her assesment on her Burnaby condo has gone down. The nurse also mentioned that it is slightly above what her mortgage is. Her friends are telling her it’s all ok because the assessment means nothing and she can get alot more for the place. Ouch. I didnt say anything. This will get very ugly for so many people.

#20 mark on 02.03.14 at 9:14 pm

“A 25% decline would take us back to 2009 prices”

And they’d still be madly inflated.

#21 Renter's Revenge! on 02.03.14 at 9:14 pm

Life is a competition. This I am learning. Both Smoking Man and Shawn are right. We compete for resources. Housing, income, whatever. Who is the fool in this scenario? Only time will tell.

#22 Ontario's Left Coast on 02.03.14 at 9:15 pm

OMG! I can’t for the life of me understand how some idiot could willingly pay the better part of a million dollars for that sorry, steaming pile of crap! All I can say is “Wow!”

#23 waiting on 02.03.14 at 9:17 pm

#11 – love the comment, made me laugh

#24 Vangrrl on 02.03.14 at 9:19 pm

That house is so Vancouver teardown.
CBC article today about the end of the homeowning dream. Chilton was quoted, but not you Garth! The comments were an eye opener, or I shouldn’t have been surpised, actually. Like the flip version of this blog. Every 30 or so comments there’d be a glimmer of sense (a greaterfol dog no doubt). So much ignorance out there.

#25 Jordy on 02.03.14 at 9:19 pm

Nasty, kind of reminds me of a movie called “Grey House”. Nothing like female home maintenance.

#26 waiting on 02.03.14 at 9:21 pm

The proliferation of HGTV shows make people think that they can easily create a beautiful home out of a run-down slum for $50 or $60k because they see it done. What they don’t see is the free labor and perks tossed in by the film company, and the huge crews that turn a property around in a matter of weeks.

#27 Entrepreneur on 02.03.14 at 9:21 pm

Realtors know what and how to manipulate the buyer; buyer should be careful, step back and analyze finances. Easy to get caught up with group emotions; never buy in a rush or the slighlest pressure, especially when realtors say it is better than renting. Realtors know all the angles.

I say save your money and offer cash; forget the banks for a loan as it is not in a real world…short term only.

Blowing caution in the wind, my friend.

#28 Linda Mulligan on 02.03.14 at 9:22 pm

Well, I Googled this house of horrors to try to find out why anyone would purchase – have to think location. There are schools nearby, also looks like a major medical facility not that far away. Not sure which description was correct – one said 4 bedrooms & two baths, another claimed 5 bedrooms. Hopefully the sale of the property will allow the elderly lady to live the rest of her days in comfort somewhere. She must be tough to have survived those surroundings.

#29 say it ain't so on 02.03.14 at 9:23 pm

If interest rates were not still at emergency levels five years after the emergency, nobody would be paying $803,000 for a banger in the west end.
_____________________________________________

nobody would be paying what they are for stocks either… can’t have it both ways.

either that house is worth $803,000 and the DOW is worth 15,000, or that it isn’t and neither is the DOW….

emergency rates prop up house, AND STOCKS…. neither are worth anywhere near these levels. let’s talk again after a 30% correction, in both.

Companies make money and pay dividends. — Garth

#30 Blobby on 02.03.14 at 9:25 pm

The comments on this article cbc article perfectly highlights to me why we’re doomed.

Majority seem to believe that renting is throwing money away, that mortgages are a guaranteed investment, that investing in anything else than property is gambling, that the stock market is a ponzi scheme, etc etc..

I felt IQ points dropping reading it..

I knew people were largely dumb on these things.. but this blew my mind, and made me realise just how screwed we were – far more than any of Garths posts!

http://www.cbc.ca/news/business/rethinking-the-home-ownership-dream-1.2519201

#31 Optimist on 02.03.14 at 9:28 pm

It’s not about the price of the house – it’s about the land the house is on.

20 feet. — Garth

#32 Ralph Cramdown on 02.03.14 at 9:28 pm

It’s not delusion. It’s all based on carefully calculated assumptions. I was perusing investment property listings from a somewhat less crack-addled agent (had spreadsheets including vacancy allowance and other expenses). Three different inflation rates: Property appreciation is 3%/year, rents go up by 2%/year and maintenance costs go up by 1%/year. In the first two years, your cash flow goes negative if a light bulb burns out, but by year 30, you’re rich, baby!

About today’s featured disaster: It is not land value. 20′ lot, cheek by jowl with the neighbours, I don’t think it’s worth it to demolish. The buyer is apparently a renovator who’s going to live in it himself after he fixes it up (i.e. stay long enough to get the principal residence capital gains exemption).

THIS is land value:
http://www.imdb.com/title/tt0073076/
… but this evening, instead of contemplating contractors putting their own cash on the line, or watching old ladies slowly lose it as maintenance and bill paying get beyond them, I’m going to finish watching a banker embezzle from CIBC and put it on the line in Atlantic City. Much more uplifting. RIP PSH.

#33 recharts on 02.03.14 at 9:30 pm

I can’t understand your surprise.
The house sold for the price of the land in that area
The average house in that area is 900K-1M
I am seeing houses renovated and sold for between 100 and 200K more than the price that was paid for them. I assume that in 200K you have room for profit and a total reno (100K) so here you go ..800K+100K in reno that would be the price
400K is what you spend to build two houses there

#34 recharts on 02.03.14 at 9:31 pm

http://i.imgur.com/KcFD1ix.jpg the map for those who missed this

#35 economictsunami on 02.03.14 at 9:31 pm

Buyers over paying. Some will be thrown under the bus.

Moral hazard after all.

Banks taking part in risky over lending.

Moral hazard?…

CHART OF THE DAY: Bank Balance Sheets Have Swelled Thanks To Government-Insured Mortgage Loans…

https://businessincanada.com/2014/02/03/chart-of-the-day-bank-balance-sheets-have-swelled-thanks-to-government-insured-mortgage-loans/

#36 VanKid on 02.03.14 at 9:32 pm

CTV Vancouver is doing a “rent vs buy” story on the local 6PM news today.

I heard CBC National is also doing a similar story this week.

Canaries in the coal-mine?

#37 dave on 02.03.14 at 9:32 pm

Maybe the buyers can party with 150$ beer…Samuel Adams Limited Edition Utopias. I think they were a bit tipsy when they bought that booze can.

#38 Soundmoney on 02.03.14 at 9:33 pm

Dow drops 326 pts on jobs report, USA USA !
Its starting to unravel folks , so many are asleep / distracted.
How bout the Superb owl , at least the half time was decent though.
18, 000 unsold tickets whats up with that ?

#39 Andrew Woburn on 02.03.14 at 9:33 pm

The Middle Class Is Steadily Eroding. Just Ask the Business World.

http://www.nytimes.com/2014/02/03/business/the-middle-class-is-steadily-eroding-just-ask-the-business-world.html

#40 Obvious Truth on 02.03.14 at 9:33 pm

#69 Julia. Feb 2

Close friend went through this less than a year ago and it turned out fabulous.

There is a great local support network in most communities. Had a fundraiser for ours in the fall.

I wish you all the luck. Stay positive and determined.

#41 Smoking Man on 02.03.14 at 9:33 pm

Garth you could have had so many groupies had you gone house pumping. But now the dude in the suit with cowboy boots goes on the side of the free interns….

Probably a good choice. When you called me a sick basterd a while a go, never held it against you. I got a dorathy too.

Guy code we won’t tell the batches..

Interesting development at the tax farm…. Seams I have been outed..

The schooled need to make a call. Do we allow the smoking man to do what he does, or risk being in his book.

Ah…….. The choices….

Sa LA LA LA live for today..

#42 Daisy Mae on 02.03.14 at 9:36 pm

“And realtors always win.”

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

Oh, I dunno. The final price they’ll pay will be huge…

#43 Dupcheck on 02.03.14 at 9:37 pm

Condemed should be a descriptive word for that house. Anyhow how come not much talk on the markets Garth? Any advice how much they might come down and when to buy? or are they already corrected and this was it. An educated guess would work too, i know you do not have a crystal.

#44 Obvious Truth on 02.03.14 at 9:55 pm

#34. Realtors waiting for foreign investment buying cheap C$’s to save the day should look at Canadian bank stock charts in $US.

Wonder if the Garth’s merry men of fleet st noticed….

The realtors and media will never give Garth any credit when this is done. He is media though. And knows it. That’s what I love about this blog. We don’t care.

I do care about total liquidation of the Nikkei. Pass the Sake. Yen holding for now.

#45 Babblemaster on 02.03.14 at 9:57 pm

Garth, this dump selling for way more than asking just illustrates how wrong you’ve been about housing these last few years. You keep predicting a correction and you’re bound to be right someday, but who really knows when. Fundamentals just don’t seem to matter. In Toronto, there’s a planeload of immigrants landing every 10 minutes. Immigrants don’t want to rent. It’s abhorrent to them. Regardless of their financial wherewithal, they want to buy. Toronto is full of these immigrants and the government has done everything it can to help them buy. Toronto is not going to correct by 25%.

Yes, rent-hating immigrants bought it. Are you going with that? — Garth

#46 bdy sktrn on 02.03.14 at 9:58 pm

#23 waiting on 02.03.14 at 9:17 pm
#11 – love the comment, made me laugh
————————-

yes, ian wins for best comment!

#47 ShaoQuan on 02.03.14 at 9:58 pm

“I can’t believe this house sold for over $150K over asking!!,” says Stephanie.

“I can’t believe this house sold for over $150K” – fixed it for you Garth

#48 Victor V on 02.03.14 at 9:59 pm

More pics from the Roncy house. Have fun folks:

http://themashcanada.blogspot.ca/2014/01/sold-145-galley-avenue-roncensvalles.html

#49 Smoking Man on 02.03.14 at 10:02 pm

You know what I love…….

At Seneca I always take a non smoking room.. 250 dollar fine if any evidence of smoke being smoked.

Hell I’ve put holes in the matris, I’ve left them on the floor with carpet burns.

Not once have I been charged.

The life styles of the rich and soon to be famous….

#50 dutch4505 on 02.03.14 at 10:03 pm

the Canadian taxpayer will be the loser. Minimum down payment on the shack, with CMHC (stands for Canadian Mortgage and Housing Cosigner) protecting the mortgage from one of the big five banks. like we suffered in the USA since 2006, all Canadians will pay the price, not just the buyer.

#51 GTA Observer on 02.03.14 at 10:05 pm

From Feb 1 (sorry! busy!) #73 Jon: Garth i think maybe you went too far when you suggest that children wont take care of there parents, having a 93 year old mom i know at least in my family we pulled together to keep her supported and happy and i cant imagine there is a younger generation that will throw them under the bridge. Family is family and you take care of your elders. If this is lost from society we are in trouble.


It is wonderful when family members can pull together to aid parents in need, but some things have changed. First, people have fewer kids now — the burden cannot be as easily distributed. We’re moving into a top-heavy population, inverted pyramid style – many elders, fewer youngsters. It used to be the other way around – more kids to take care of fewer elders. Second, families are more spread out, often for reasons of employment, sometimes across 2 or more countries. That’s hard. Third, older people are living longer, often with multiple chronic conditions. They are harder to support physically, financially, emotionally. Even in the best of circumstances, that can drain family finances, energy and goodwill. There are also new ethical questions for which families are unprepared. Fourth, in the preceding generation, housing and higher ed were cheaper – leaving more money and time for elder care. It’s just a different world and people are coping the best they can, but we aren’t in a position to judge if it doesn’t seem like it did in the old days.

#52 Renter's Revenge! on 02.03.14 at 10:06 pm

Ignore MSM. Canadian average home sale price won’t take a hit. Mostly concentrated in high demand areas. Central Toronto, Vancouver, Montreal. Laws that favour asset owners, universal health care, better than average weather, lack of war. What’s not to like? Anywhere else, renters will come out ahead, especially Winnipeg.

#53 Notta Sheeple on 02.03.14 at 10:09 pm

“….The Bloomberg poll found only 19% of Canadians think the economy will be any better in a year…….” – Garth
=========================

Some snippets from #39 Andrew Woburn above:

“Those consumers who have capital like real estate and stocks and are in the top 20 percent are feeling pretty good,” said John G. Maxwell, head of the global retail and consumer practice at PricewaterhouseCoopers…..

…..Even more striking, the current recovery has been driven almost entirely by the upper crust….

“….More broadly, about 90 percent of the overall increase in inflation-adjusted consumption between 2009 and 2012 was generated by the top 20 percent of households in terms of income, according to the study…..”

#54 the jaguar on 02.03.14 at 10:14 pm

During the early 1980′s boom/bust, Calgary average house prices peaked at $110,184 (Total MLS) in January 1982. Prices bottomed out in November 1984 at $68,322 – at 37.99% drop.

Oh my.
Imagine buying a house for only 110,184. Even though the numbers seem small, the 37.99% drop still must have hurt. But people just dropped off the keys to the house at the Banks, didn’t they? Cause it really is ‘different here’. From a legal perspective, anyway.

#55 Realtor # 1 GTA on 02.03.14 at 10:15 pm

A less than one percent rise in interest rates will nothing
Bond yeilds for both canada and USA are falling even after the tapering. Low interest for some time, some lenders have brought back a 3% high ratio mortgage.

No correction this spring. To many buyers and no desperate sellers. It’s simply supply and demand

#56 active on 02.03.14 at 10:16 pm

44 condos up for sale out of a total of 230 suites in the building – this is a just completed development in DT Vancouver…..crazy

http://www.6717000.com/1372seymour/listings/

#57 Smoking Man on 02.03.14 at 10:16 pm

You guys are so dumb.

The tsx takes a hit, the bond market goes into a I will blow anyone mode.

Naturally the banks fearing and having a ucc communication from F please talk down the spring market…..

Sadly the herd, oblivious to the obvious.. Will not capitulate.

Oblivious to the obvious that’s a great title for a book.

#58 Uh Oh Canada on 02.03.14 at 10:19 pm

We are so screwed! Garth, have you supersized to a housing crash over a correction?

#59 DR on 02.03.14 at 10:19 pm

Garth, Dodgy neighbourhood is a good description…..

20 years ago!

You’d like to live next door to this? — Garth

#60 MrHulot on 02.03.14 at 10:24 pm

Garth, this is what we in Vancouver call a KNOCKDOWN. It sold for land value. It is not meant for renovation. You build a NEW house on the lot. Sometimes I wonder about you people in Toronto.

#61 DR on 02.03.14 at 10:27 pm

oh and you forgot 77 Dearbourne Ave. –
Broadview Danforth.
-No parking.
-Semi.
-2 storey
-Gutted house nothing in there but a furnace, not a toilet to be seen, not a kitchen not a wall remained. Just a furnace.

-Listed 689 and sold for just under this one on Galley (which is detached and at least has a third floor). Sold for 760K. I think that is a better(or worse) example of the desperation for a house.

#62 OttawaMike on 02.03.14 at 10:28 pm

That area of Parkdale used to be renowned for its good heroin back in the 80’s. Just another thing spoiled by gentrification.

My aunt sold a place almost identical to the listing in the Junction described here 10 days ago that sold for $820k-$200k over asking.
The difference being my aunt got $320k in 2007 and her place actually had parking. We all said then”how much higher can those places go?”

Anybody shopping for SF dwellings in the Junction or Roncesvalles neighbourhoods who didn’t buy back when this blog was conceived in 08, lost out big time. A once in a lifetime opportunity that will never happen again.

#63 Fed-up on 02.03.14 at 10:29 pm

I bought in a gorgeous home in a beautiful neighborhood in Scottsdale in 2011. There were plenty of homes in the same condition as this hell hole available in Arizona and Nevada at the time. Selling prices? $500 – $15,000, yes you read that right. Except they were bigger, newer, had driveways and tons of potential. Oh and located in an almost perfect climate, not Toronto which is Ojibwe for “meat locker”. But, the forecasts can get pretty mundane down there, sun, sun, sun, sun, sun, sun…you get the idea. But oh ya, we have health care! Mmmhmm, whatever, won’t even get into that, Garth had it covered in yesterday’s post.

We’re so smart in Canada. Very happy that I sold my house in the 416 three months ago.

#64 Waterloo Resident on 02.03.14 at 10:38 pm

Let me tell you something very few people know about, at least not yet. This is going to make 2008 look like just a ‘warm-up’. Okay, as you know, a few key select people knew what was happening a few months before the Great Financial Crisis started in 2008, they knew that the US mortgage market was crashing. A few weeks later stocks started sliding down. Then the big buys started going under. Well this time it’s 100 times bigger, maybe even more. IT’S CHINA; their ponzi scheme is buckling and will soon collapse. Have you watched those YouTube videos about the hundreds of Chinese Ghost Malls and Ghost Cities? We are talking about hundreds of trillions of dollars here, and when that financial bubble is finished bursting there WON’T BE a financial system left, that is why the stock market is beginning to tank. This is now the start of the BIG ONE, we’re talking a slide on the DOW well into summer that will exceed 25%, maybe even as much as 40%.

Now what will this do to the housing market: Not much at first. For the first few years rates will not move much, but what will happen will be job losses in the millions, and it is that (after about 4 years) that will make our housing market crash by about 75% over the next 12 years. It won’t happen smoothly, it will go in fits and starts, but it has definitely begun. In about 6 months time from now you will read stories about China’s financial implosion, something that has begun right now.

#65 HogtownIndebted on 02.03.14 at 10:41 pm

Interesting that the price of this pathetic palace ends in “649” – is this the fantastical-thinking anglo-speaking equivalent of all those prices people notice ending in 8’s?

Speaking of lotteries and slim chances, I think I mentioned last year a colleague who has done consulting work with charity lotteries (hospitals etc…)across the country. He tells me this year is looking even slower, with fewer and fewer ticket sellouts, slimmed down prizes that are more often just crap, and a larger number of such events that have quietly been shelved for this year or cancelled altogether. Condo developers have been calling the draw teams more frequently, happy to contribute their tiny overpriced skyboxes to such draws, he advises, for the right price.

All considered, it’s an interesting window on the declining disposable income of homeowners, who form the largest demo of ticket purchasers and are buying much less, it appears.

#66 Freedom First on 02.03.14 at 10:42 pm

To all Canadians. Garth’s post today with pics included is a “Flashing Red Alert”. Bubbles always grow way beyond the size anyone expects them too, as do the bottoms always go much lower than anyone expects. This is true throughout history, and there is no exception. So, ask yourself, are you going to believe the RE industry, or your own eyes?

#67 Mrs Riverview on 02.03.14 at 10:43 pm

Like Linda and Paula above, I feel for the senior who lived there. Senior squalor syndrome? Diogenes Syndrome? There are mental illnesses that lead well off people to live in homes like that. I hope she lives in safe, clean, comfortable accommodations and her money from the sale is well invested.

#68 X on 02.03.14 at 10:45 pm

That looks like an awesome house…to film a horror movie.

#69 Tripp on 02.03.14 at 10:48 pm

I am very curious who in their own mind would pay almost a million for that ruin. I would like to have a beer with them and carefully listen to the reasoning behind their purchase.

#70 Aggregator on 02.03.14 at 10:52 pm

#55 Realtor # 1 GTA

Falling bond yields will have a negative affect on RE sales as today's housing market has gone completely backwards from normal conditions due to central planning distortions. The affect is deflationary expectations on debt servicing (mortgage payments), whereas buyers who expect mortgage rates to decline will sit on the sidelines until it rises again.

—-

Average list price on Galley Ave in 2011 was $848,243 and $933,489 in 2012.

#71 Old Man on 02.03.14 at 10:55 pm

I noted this transaction that took place, and it made no logical sense from an investment point of view; complete insanity. The market is down a bit, and stated before went into a 30% cash position as a safety measure, but no need to panic. Looked at the TSE for the ups and downs, and will be interesting to see margin calls, and short coverings in the coming days.

#72 Cici on 02.03.14 at 11:04 pm

#19 Van,

Sad it is: I too know of a bunch (in Victoria) who brag about how high their assessments are, and how they’ve been going up by so xx % every year.

Smart people counter the assessments and get them revised downwards, because they know it only means having to pay higher property taxes.

#73 suede on 02.03.14 at 11:07 pm

Waterloo resident

you are nutso

#74 DR on 02.03.14 at 11:08 pm

You’d like to live next door to this? — Garth

no, but someone paid a mil for that privilege

actually i would…if she offered to sell it to me for 500K

#75 Waterloo Resident on 02.03.14 at 11:09 pm

UPDATE 2-China provincial govt may bail out shadow bank to avert default
http://www.reuters.com/article/2014/01/23/china-trust-idUSL3N0KX12Z20140123

Rating agencies criticise China’s bailout of failed $500m trust
http://www.ft.com/intl/cms/s/0/be50630c-8977-11e3-abc4-00144feab7de.html#axzz2sJoKIvl2

QUOTE: “this week’s bailout of a soured $500m trust loan was a wasted chance to address rising moral hazard in the country’s shadow banking sector.”

What the media is telling you is that this is the first of many private banks that are in the process of default, and the ripple effect will be just AWSOME when the $hit hits the fan.

#76 Andrew Woburn on 02.03.14 at 11:17 pm

Waterloo Resident on 02.03.14 at 10:38 pm
IT’S CHINA; their ponzi scheme is buckling and will soon collapse….. In about 6 months time from now you will read stories about China’s financial implosion, something that has begun right now.
=========================
I buy that China faces economic and social difficulties but I don’t get how any “implosion” would directly affect Canadian house prices. First of all China is a relatively closed financial system and has only recently started taking on significant debt in foreign currencies. Secondly the government owns everything worthwhile and most bank loans are made to government owned corporations or municipal agencies so they owe it to themselves. On top of that, they have huge foreign currency reserves and at lest a third of the world’s manufacturing capacity. They may slow down and stop buying as much resources from us, but why will they implode?

#77 Aggregator on 02.03.14 at 11:23 pm

Federal Court of Appeal says Toronto Real Estate Board subject to Competition Act

The Federal Court has reversed a ruling of the Competition Tribunal holding that the Toronto Real Estate Board is not subject to Canada’s competition law because it does not compete with its members.

The decision is an important victory for the Competition Bureau, which launched the case under former Commissioner of Competition Melanie Aitken. It means that TREB will have to defend the legality of its rule prohibiting members from posting historical property data on a virtual office website. The complaint that launched the case alleged that the rule lessened competition among realtors in the Greater Toronto Area who are members of the Board.

“The effect of that rule is that a member who operates through a virtual office website cannot enable clients to access the historical data online,” the Federal Court noted.

The GG Commander-in-cheif (privy to Her Majesty) is not going to like this one. Time for a little pep talk with Commissioner Pecman.

#78 experienced.optimist on 02.03.14 at 11:23 pm

Is the above property and price really true? It just makes no sense to me. Saw more pictures of this place on #48 Victor V. I just cannot get my head around this. Places like this in some small prairie towns would sell for lees than $50K with a 100′ x 200′ lot . With peace and quiet. But I guess to each their own.

Last week America lost one of it’s great musical treasures. He sang about many things in his 70+ years. But this one always resonated with me about suburbia housing and the sameness of it all. Whether it was the post war housing boom or the present housing boom.

PETE SEEGER
“Little Boxes”

Little boxes on the hillside,
Little boxes made of ticky tacky
Little boxes on the hillside,
Little boxes all the same,
There’s a green one and a pink one
And a blue one and a yellow one
And they’re all made out of ticky tacky
And they all look just the same.
And the people in the houses
All went to the university
Where they were put in boxes
And they came out all the same
And there’s doctors and lawyers
And business executives
And they’re all made out of ticky tacky
And they all look just the same.
And they all play on the golf course
And drink their martinis dry
And they all have pretty children
And the children go to school,
And the children go to summer camp
And then to the university
Where they are put in boxes
And they come out all the same.
And the boys go into business
And marry and raise a family
In boxes made of ticky tacky
And they all look just the same,
There’s a green one and a pink one
And a blue one and a yellow one
And they’re all made out of ticky tacky
And they all look just the same.

#79 just say no on 02.03.14 at 11:29 pm

almost to the point where people start killing for homes..I can see a great movie being made (the war of the houses) were nothing can stop em..Sold! Kill the buyer and sell again! Netflix special

#80 Shawn on 02.03.14 at 11:36 pm

CHARACTER HOME!

At least the character has moved out.

Hopefully the buyer will be allowed to completely tear it down and build new.

Who knows maybe they get put an over-under duplex there and it might work out.

Does not matter someone won here, probably the seller. GDP was increased by the amount of the real estate and lawyer fees. Land transfer tax got paid. It’s all good as money circulates in the economy.

Soon real value will be added to the place through the gutting / renovation or (preferably) new build. The neighborhood will be improved. What is not to like here?

#81 Shawn on 02.03.14 at 11:39 pm

The Tapering of QE…

QE was meant to push down and hold down interest rates. Now that it is being tapered, long term government bonds are actually down significantly!

Who’d a think it?

#82 Cici on 02.03.14 at 11:43 pm

Wow, this is absolute foolery.

What’s scary is knowing that the old lady was probably able to originally buy the house for 1.5 times her or her husband’s salary, and enjoyed many years in a high-interest savings environment, yet still had to squander through retirement.

But the absolute worst is imagining how those who are buying at these crazy prices are going to manage in retirement. Low-rate savings environment, money (if any) stuck in money-losing GICs, housing at least eight times annual income in certain big cities.

Imagine what these shacks are going to look like in 30 years…roof and walls caving in on miele appliances, residents chewing on the wood siding to supplement the catfood diet…

#83 Fzzzz on 02.03.14 at 11:48 pm

Nice house. I’ll bet their plan is to become zillionaires by renting it out to university students … as is of course!

#84 Marco Polo on 02.03.14 at 11:48 pm

Yep, an $803K wasteland. Japan never had crap like this during their 1980s bubble. That bank will never see the 1.2M it will take to dump in the property. Imagine the sale pitch after the reno. “Owned by a nice old lady”.. There’s a mortgage term for underwater…. for this dive it won’t just apply to the pond in the basement.

That said, anyone can see how mortgage rates are closely tied to the bond market. With bonds, when yields are low, prices are high. When yields rise, prices fall. I’d hope this correlates to housing and interest rates, but the clearer parallel is rents. Might rents rise as prices fall? As desparate owners are forced to cover losses?

#85 will on 02.03.14 at 11:54 pm

I’d rather live in this house than that stupid shit hole in Mississauga that went for 6mil the other day. I’ll take linoleum and par kay flooring any day over marble. I think it went for over-asking because someone thought it had potential. Whereas the tasteless Mississauga dump only got best offer because there is no potential.

#86 Retired Boomer - WI on 02.03.14 at 11:59 pm

I’ve seen better homes, bigger lots, less reno needed for 1% of this selling price in Detroit, MI.

#87 Ontario's Left Coast on 02.03.14 at 11:59 pm

#11 Ian

Bahaaahaa – well put!

#88 saskatoon on 02.04.14 at 12:11 am

garth,

if they gave you antibiotics in the hospital (which i am sure they did)…make sure you eat lots of probiotic foods (raw sauerkraut, for e.g.) and have a few drops of oil of oregano 3 times a day to prevent further infection and other nasty conditions.

a person has perhaps 40000 different kinds of bacteria in the gut…that helps us digest food and controls our immune response.

after just a few antibiotic pills…that number becomes ZERO, and your gut becomes essentially sterile, and ripe for bad bacteria.

take care.

#89 peter on 02.04.14 at 12:14 am

#69 Tripp on 02.03.14 at 10:48 pm
I am very curious who in their own mind would pay almost a million for that ruin. I would like to have a beer with them and carefully listen to the reasoning behind their purchase.

I will pay for the beer to be another listener!

#90 45north on 02.04.14 at 12:17 am

It will require at least $400,000 to gut and repair the place

if you gut and repair it you’re still stuck with the existing basement, foundation, walls and roof which means that they had better be in very good shape. I’ll bet they’re not.

tax payer What are TD and the other banks doing to hedge their bets.

well for one thing in this case they hold the mortgage, which spells out the buyer has to pay it and the remedies the bank can take in case he doesn’t such as garnishee his wages, suing him for any deficiency and selling the house. If CMHC guarantees the mortgage the bank can submit a claim.

the bank figures it can get $400,000 for the property and the rest out of the buyer. Plus costs.

#91 angela on 02.04.14 at 12:22 am

wow I cant believe that house for that much money LMAO great article anyways whats going on in the dow 1000 point drop in January I’m really confused did it drop that much because of tapering or bad economic data in a recovering economy in usa or was it bad weather CNN and FOX says bad weather, why are the currencies blowing up? maybe QE hasn’t hurt the states yet but this quantitative easing thingy sure seems to be a dam thorn in a few countries currencies. its almost as if history is repeating itself 1945-46 think it was the british pound as a reserve currency that was going through what the us dollar is going through today just sayin

#92 Basil Fawlty on 02.04.14 at 12:23 am

Per CNBC: In January, new order growth in the US fell the most in 33 years.

Janet better pull the big lever on the QE money generator and get er up over $65B per month, before the wheels fall off the biggest misallocation of capital in world history.

#93 recharts on 02.04.14 at 12:31 am

I am surprised that nobody talks about this yet
http://www.theglobeandmail.com/report-on-business/federal-court-of-appeal-reserves-decision-in-competition-case/article16454048/

The Federal Court of Appeal reserved its decision Wednesday after listening to arguments from both sides in the high-profile battle between the Competition Bureau and Canada’s largest real estate board.

The Bureau has spent years trying to prove that the Toronto Real Estate Board, which represents more than 35,000 realtors and brokers, is engaged in anti-competitive practices. It had another shot to makes its point Wednesday, when it presented its case to the appeal court, after losing a lengthy hearing last year at the Competition Tribunal.

I hope they will finally nail them. I am deeply disgusted by what TREB’s members do knowing that they have monopoly on data and their statements can not be verified or challenged!

#94 angela on 02.04.14 at 12:39 am

18000 unsold superbowl seats ??definitely the weather was the reason they were unsold says CNN ,but im pretty sure there have been cold superbowl games before and were always sold out with tickets around $700- $1000 .some tickets could be had for $200 if you purchased last minute for this superbowl I quess people just spent their money on housing recovery in the us so they dont have extra spending money to consume themselves to prosperity who knows but the recovery is full speed ahead

#95 Ronaldo on 02.04.14 at 12:43 am

I like the tile work in the bathroom and the skylight above the kitchen table. Very rustic.

#96 T.O. Bubble Boy on 02.04.14 at 12:44 am

Whoever bought that place has watched one too many “Property Brothers” episodes.

Thanks Government of Canada for all of the tax credits that allow such realistic and informative shows to be produced for HGTV. That channel is more of an “Economic Action Plan” than anything Harper and Flaherty have done.

#97 Not 1st on 02.04.14 at 12:49 am

#64 Waterloo Resident on 02.03.14 at 10:38 pm

—-

I agree about China probably hitting the wall soon however I don’t see that closely correlated with the DOW. I mean the US doesn’t sell anything to China and China holds US treasuries. Countries that sell raw product to them will hurt the most namely Austrailia and Brazil. Canada should be able to pivot it’s exports to the US in such an event.

#98 Saskatchewan Skeptic on 02.04.14 at 1:06 am

Hey Garth, I was wondering about how changing the rules for mortgages (25 yrs, etc) could have an effect on the average home prices actually going up, if the majority buyers in the market these days have equity in their homes already (from astronomically high gains in the past 7 years of course). Combine that with the thought that many first time buyers could have been pushed out of the market due to these new rules. In Regina, you can’t get into anything decent for under $250,000. I know, its peanuts compared to some places, but keep in mind its REGINA… Is it possible that many of the buyers today are out buying upgraded homes and ditching the modest 900 sq foot bungalows? If so, what happens to all of these turn-of-the-century starter homes I have had my eye on since starting to watch HGTV?
-I feel its important to state that it would be nice to own a house for an affordable price someday. I just want a shed and maybe a place to store a sled of two. Like many waiting to see where the train goes, but im tired of dingy storage lockers, in the crumbling basements of overpriced rental units.
-Go Riders.

#99 Harry Wilson on 02.04.14 at 1:07 am

re comment #11, from Ian:

The table’s not just there for its sparkling good looks; in that house it serves a dual purpose: eating off, and diving under.

#100 Soylent Green is People on 02.04.14 at 1:11 am

This can’t bode well for the future of the USA, come on Garth! p.s. I looked up blood fractures on Google images, egad.

……………………………….

Anonymous_B.I.G. ‏@AnonBig 16m

In the U.S. 49.7 Million Are Now Poor, and 80% of the Total Population Is Near Poverty.

http://politicalblindspot.com/us-poor/

#Anonymous #WikiLeaks

.

#101 Calgary Conditional Owner on 02.04.14 at 1:54 am

Renting is by no means cheaper than paying a mortgage in Calgary. Yes, you do have to come up with a downpayment and some closing costs (not a lot of money in AB), but with rates so low for the next 5 years, why not put 5% down and invest the rest of the money? You still comply with the rule of 90 (hopefuly), and are more diversified than just holding financial assets.

As far as prices coming down soon, with Obama running out of excuses to delay Keystone XL, I honestly don’t see Alberta slowing down for a while.

Cheers!

#102 YVR2ZRH on 02.04.14 at 2:01 am

For the record Garth – – – – and we have met before – – – I have the T-Shirt from Pets.com . . . . !!! Definitely an icon . . .

#103 Flamed out in Kitchener on 02.04.14 at 2:03 am

#29 Say it ain’t so …

Here’s the difference. Houses are needy, infinite money eating commodities … where you ‘hope’ to come out ahead after years of feeding the bank its mortgage interest (small as it is these days). In other words, it’s a speculation, and a place to live … not an investment.

Companies, the good ones, create free cash flow, some of which you get to enjoy in the form of dividends, and the government gives you a nice credit for your trouble. To top it off, if you borrow to invest, you get to claim the interest as a tax deduction. Sure stocks will go down from time to time, … that’s called being on sale. So then you buy more and enjoy more divies …

No similarity between the two … unless you listen to MSM and their alarmist analysts who are all so absolute and precise in their scripted views. That’s called conditioning the masses. And we all like to be calmed and cosy, … and well conditioned.

Hope you are healing well Garth and feeling better.

#104 Andrew Woburn on 02.04.14 at 2:05 am

Further to my comments on Waterloo Resident’s post re Chinese debt, here is an update from the Daily Telegraph-

“The $15 trillion shadow over Chinese banks”

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10611931/The-15-trillion-shadow-over-Chinese-banks.html
———————————————–
Excerpt:

Warnings have already been raised about the increased use of offshore dollar funding by mainland Chinese borrowers. The Hong Kong Monetary Authority has pointed to the growth of foreign currency funding of China, which is believed to have more than quadrupled in the past three years to in excess of $1 trillion.

Chu says that this remains a side issue, arguing that the longer the credit boom is allowed to continue the bigger the international leg of the crisis will become.

“One of the reasons why the situation in China has been so stable up to this point is that unlike many emerging markets there is very, very little reliance on foreign funding,” she said.

“As that changes it obviously increases the vulnerability to swings in foreign investor appetite. I do think, in the end, you look at the exposure numbers from the BIS [Bank for International Settlements] and the Hong Kong banks and you’re going to encounter a few institutions that are going to have a sizeable exposure to China.”
—————————————–

What I gather from this is that Waterloo Resident’s concerns are well founded but the risk may not be immediate. However I would be cautious about investing in a financial house that was buying much Chinese debt.

Perhaps even more scary is the recent report from the Bank of International Settlements, the bank for central banks, that the world banking system has now issued around $700 trillion in derivatives of which about $500 trillion represents interest rate derivatives. While no one is currently expecting much volatility in interest rates, you have to wonder how these bets would all be covered in case of the unexpected.

#105 Joe on 02.04.14 at 2:37 am

I know I’m preaching to the choir but many have much to lose if the hoseing market dumps.
Newspapers, TV, taxes, trades, owners, brokers..
Also everyone who benefits from leverageing the house, cars, trips, trades…
The common denominator- the banking cartel.
They just want everyone into max debt and then it’s pull the carpet out from under them.
It’s started.

#106 Infused with Opiates on 02.04.14 at 2:44 am

56 Active – 20% of the suites for sale in a recently completed building doesnt sound that unusual to me.

#107 4 AM Sunrise on 02.04.14 at 2:44 am

#65 HogtownIndebted

I always think it’s hilarious that the charity lotteries want to throw in a condo in Kelowna (yay!) on top of a house in the deepest of ‘burbs, or a hotel unit in Victoria, as a grand prize.

Oh, and there’s this early bird prize where you either choose a $320,000 skybox in the deepest of the ‘burbs or $250,000 cash. So basically, we’ve got an 20% correction coming, folks.

#108 Munch on 02.04.14 at 3:07 am

Okay, so now it’s official – Canadians are dumber than South Africans, and believe me that says a LOT!

ROTFLMAO!

Nobody in their right mind would buy that steaming pile of crap, only someone in a Canadian mind!

#109 Brian Ripley on 02.04.14 at 3:16 am

I just updated my Earnings chart for Canadian metros:
http://www.chpc.biz/earnings-employment.html

The good news is that Ontario earnings hit a new high; while Alberta earnings are heading off the chart.

The bad news is that Quebec earnings are diverging down and unemployment in Ontario has ticked up.

Don’t we get a new budget announcement soon? I bet there will be budget promises for Ontario.

Follow the money.

#110 Debtfree on 02.04.14 at 3:30 am

@ babblemaster . Have you ever been an imagrant ?

#111 raisemyrent on 02.04.14 at 3:51 am

@#56 active
and they’re on craigslist too those “investors” trying to rent them for $1,700 a month. Watch padmapper; they linger. Seems like someone picked that price (top dollar for a 1BR here) and they’re all sticking to it, but it sure don’t look to me like they’re moving fast. All it takes is a greater fool, or one desperate ‘investor’ to lower the price and off she goes.
2-3 years ago, when I moved to the best place on earth (hey my heat’s been off for days), you couldn’t get something similar because the realtors (who didn’t speak english properly, and I can say that because I was born abroad) would only show it say 10-12 on Wed, and 40 people would show up at 9:45. I still saw some of that last year (who says you can’t RENT granite, for the right price?), but it sure doesn’t happen very often anymore.
the sad part (or not) is that the lone “investors” trying to rent these luxury, never lived-in 1BR condos are likely delusional to think that whatever they rent it for, nay, nothing matters right now, because it will go up for ever and they’ve been rich from the moment they lined up and their deposit was accepted.
wouldn’t it be nice if some developer in VAN (sorry, burbs) or the GTA named their next building “The Tulip”?

p.s. dr smoking man this doctor man here says no alcohol for me. when’s that clinic of yours opening then??

#112 bdy sktrn on 02.04.14 at 4:12 am

I do care about total liquidation of the Nikkei. Pass the Sake. Yen holding for now.
———————————–
14,008.47 Down 610.66(4.18%)
21,423.31 Down 612.11(2.78%)

jesus h .

houses and gold looking better than ever these days.

all sp500 2013 gains get erased this week and next

fact is houses can`t fall as fast as equity etfs, so ppl feel much safer in re.

#113 PJ on 02.04.14 at 4:53 am

Excellent post today Garth. It’s a sad spectacle to watch, and I feel for the people who will be engulfed in this financial calamity. I get the desire to buy a home and build memories in the town you love, but the heart can sometimes be stronger than the mind, to the detriment of the human being. Keep up the good posts.

Cheers,
PJ

#114 Grantmi on 02.04.14 at 5:15 am

#67 Mrs Riverview on 02.03.14 at 10:43 pm

Like Linda and Paula above, I feel for the senior who lived there. Senior squalor syndrome? Diogenes Syndrome? There are mental illnesses that lead well off people to live in homes like that. I hope she lives in safe, clean, comfortable accommodations and her money from the sale is well invested.

She’s given it to Smoking Man to invest for her!

#115 john on 02.04.14 at 5:21 am

In my last submission to this blog I compared stock investing to serial womanizing. Today I want to refine this view and compare the maintenance of a stock portfolio to that of a seraglio or harem.
First of all I want to note that I am 100% invested (in stocks) 100% of the time, with the exception of gold, platinum or cash.
I can absolutely see the wisdom of Garth’s view of diversification. After all a harem would be a boring place with only Circassians wouldn’t it. You need diversification and this can be accomplished through the addition of Franks, Greeks or Ruthenians. Just as in a portfolio there are different types of diversification, geographical and sector. Similarly in the harem you want to have a good mix of blondes, brunettes, raven haired beauties, even redheads.
Of course every woman in the harem has to earn her place, just like stocks in a portfolio. Some stocks have a high dividend yield e.g. COS 7.049%, CPG 7.329%, AW.UN 6.481%, while others have a lower initial dividend yield but a higher annual growth rate of dividends e.g. CN yield 1.465% dividend growth (10 year average): 18.32%, UL yield 3.85% average annual dividend growth rate since 1979: 8%.
By the same token some women even though they might only score 8.9 out of ten in looks can make up for the deficiency by being good at music or dance. A really good lady can go all the way to the top. The life of Roxellana is a real inspiration to up and coming odalisques.
It is very important for an odalisque not to shirk her duty to her master. Selling your place in line to a subordinate is just not acceptable. The pitiful example of Gülfem Kadim who did this and was executed by Suleiman the Magnificent is tragic but completely avoidable.
Similarly every stock has a role to play. If your not up to the task then you get the chop a.k.a. tax loss selling. The analogy is a girl in the harem and being palmed off onto a minor official in the outer reaches of Anatolia.
A couple of Good reads:
Alev Lytle Croutier, Harem: The World Behind the Veil, Abbeville Press, 1989.
Leslie P. Peirce, The imperial harem: women and sovereignty in the Ottoman Empire, Oxford University Press US, 1993,
I hope that my sage advice finds willing ears.

#116 Buy? Curious? on 02.04.14 at 5:47 am

Garth, 145 Galley Ave is a stone’s throw away from High Park, *ahem* a hospital, a 10 min walk from the beach and a cheap cab ride home from Smoking Man’s Fortress of Solitude! When all those condo owners who aren’t celebrating the Year of the Horse or the success of the Sochi Winter Olymipics need to find a place, where do you think they’ll go, Barrie? Oshawa? Windsor? You can’t say that place is a bad investment. There’s a condo shee-at storm coming to Toronto over the next few years. People who bought those Human Terraiums are going to be the new poor.

By the way, how is that place you featured a few months near the now closed, sex club Wicked doing? Would you ever do a “Where Are They Now?” post on properties you described subtly as fools’ investments?

Being Rich is the new Gay.

http://www.youtube.com/watch?v=gfx0ULiTM0g

Rob Ford rules! Let’s all make sure he gets elected this year!

#117 Buy? Curious? on 02.04.14 at 6:07 am

#31 Optimist on 02.03.14 at 9:28 pm
It’s not about the price of the house – it’s about the land the house is on.

20 feet. — Garth

How much land do you need? Do you graze cattle? -Buy? Curious?

#118 nubbers on 02.04.14 at 6:31 am

I like the term ’emerging’ when describing a neighborhood, presumably to describe a place that is dodgy, but the only place that people can afford anymore.

I’ll wager competition has pushed prices up in these places out of proportion to the rest of the market and that when the market turns they will revert to being the dung heap that they were before.

Buyers in such places have my sympathy, not that that will do them any good.

#119 Martha on 02.04.14 at 7:50 am

#45 Babblemaster – you wrote:

“Immigrants don’t want to rent. It’s abhorrent to them. Regardless of their financial wherewithal, they want to buy. “

Ummmm, I’m an immigrant. And I rent. And have done so for all of my adult life. I’m pushing 60 now…and it is just wonderful not to have to worry about anything but rent and my communications provider. Everything else is included in my rent. I don’t even have to shovel snow unless I want the exercise…

So please, don’t paint us all with such a broad brush. Not all of us immigrants are 20-somethings with more money than sense…all dependant upon a job that may or may not exist next week…

#120 Bob Rice on 02.04.14 at 7:55 am

I think this party is going to keep going… banks making too much money for this to default. No end in site to price increases.

http://business.financialpost.com/2014/02/03/sub-3-mortgage-rates-are-in-sight-again-just-dont-tell-jim-flaherty/

#121 Nemesis on 02.04.14 at 8:04 am

@John/#116

John, the only problem with that strategy is that one day… inevitably, you are bound to meet your ‘Scheherezade’…

And have you priced a good eunuch lately?

#122 Darlene on 02.04.14 at 8:56 am

This is a perfect example of when you live way longer then your money. This is what 28 years of living off Canada Pension does to your house. At least this homeowner is lucky that she sold in an overheated market. It shows both sides of house lust and what happens when you put all your eggs in one basket.

#123 jess on 02.04.14 at 9:12 am

rinse lather repeat …sovereign raiders here there and everywhere
===

why is the gov. the debt collector for a private company? What happens when these involve foreign investors?
Feb 02, 2014
Man faces $43,000 bill for driving on toll Hwy. 407
Andrew Wallace, News services
By Mark McNeil

see penn state bridges privatized long contracts 40 -99 years
Feb 02, 2014
http://www.truth-out.org/news/item/21513-the-stealth-privatization-of-pennsylvanias-bridges

Adverse-action rights give the contractor the right to be paid compensation whenever an action lowers the amount of money the private contractor expects to receive.
largest one going 1.4b?
The IER was formed on August 12, 2013 by the Ontario Ministry of Transportation to review certain concrete girders on the Rt. Hon. Herb Gray Parkway.
http://www.independentexpertreview.ca/node/3

===
the vision
http://www.pppcouncil.ca/about-ccppp.html

http://www.ppp-disasters.com/
http://www.governing.com/topics/transportation-infrastructure/gov-public-private-popular.html
http://www.theglobeandmail.com/report-on-business/economy/the-hidden-price-of-public-private-partnerships/article4611798/
=============
Who knew?
http://www.cbc.ca/news/canada/pipeline-rupture-report-raises-questions-about-transcanada-inspections-1.2521959

#124 jess on 02.04.14 at 9:20 am

Andrew what does this person mean when she says: “…very, very little reliance on foreign funding,”

What is foreign?

#125 Shawn on 02.04.14 at 10:08 am

EARNINGS GROWTH CHART

Brian Ripley at 110 posted:

I just updated my Earnings chart for Canadian metros:
http://www.chpc.biz/earnings-employment.html

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

Thank you for the excellent chart that shows surprising growth.

Like most charts it does not start the axis at zero. I wonder if it should? Otherwise the highest growing line on a chart can always be shown as a 45 degree line.

Could inflation be added?

Does anyone have a similar chart for living costs in different provinces. You would think Stats Canada would have such a chart as they track inflation by Province but I have never see it.

Apologies, but my last slave died of over-work.

#126 Jimbo on 02.04.14 at 10:15 am

Wow! What are people thinking? Stupid is alive and well in Hogtown.

1. Buddy of mine just took the plunge for a beater house at $680,000 in East York and is dumping another $250,000 in renovations.

Mortgage will be over half-a-million!!!

2. Cousin using her house as an ATM and spending like a drunken sailor.

3. Colleague just got a divorce and lives in the basement while his ex-wife’s new boy toy lives upstairs with her. They both love the area for their kids and are both paying the mortgage. Yonge & Sheppard.

Garth….Let’s dedicate a posting for our stories in the comments section about Hogtown house horniness.

I need a good laugh…

#127 John m on 02.04.14 at 10:22 am

How in the world could anyone get an appraisal for a mortgage on this piece of crap…unbelievable!

#128 Toronto_CA on 02.04.14 at 10:27 am

I really don’t understand what people are thinking. Toronto is not that nice of a city that people should pay huge gigantic premiums on housing to the point of paying nearly a million dollars for a crackshack.

At least Vancouver is stunning to look at and actually breathtaking with mountains/ocean; Toronto aesthetically is a poor man’s Chicago without the waterfront. Not that Vancouver’s prices are justified at all especially with the lower incomes.

My large, 2 bathroom condo’s rent hasn’t changed since I moved here in 2008 and I have zero commute and a fantastic view from the 41st floor. The rent is about 11% of my income. Or I could take all my money outside of registered investments and dump it into an $800k hellhole like this one you’ve spotlighted today and have a long commute and a home improvement project for the next 5-10 years. Or worse, I could buy a condo at the peak…

I think the condo I rent has gone up about $20-30k in value since 2008 (from $340k to $365k); if you compare rent to this gain less closing fees and mortgage interest and condo fees, it’s probably break even. Until I sold. Then that gain is erased by commissions. And I fear that the gain will dissappear when the next recession hits or sooner. Aren’t we do for a recession?

#129 Ralph Cramdown on 02.04.14 at 10:42 am

#104 Andrew Woburn — “Perhaps even more scary is the recent report from the Bank of International Settlements, the bank for central banks, that the world banking system has now issued around $700 trillion in derivatives of which about $500 trillion represents interest rate derivatives. While no one is currently expecting much volatility in interest rates, you have to wonder how these bets would all be covered in case of the unexpected.”

Well, we had a highly unexpected outcome in North America’s biggest annual betting event on Sunday. Did the bookmakers lose? No, because they set the line so they’d get about equal action on either side, and they profited from the vig. So it is with a universal bank, which may sell a $100mm notional swap to one customer, the opposite $100mm swap to another, and pocket the difference as profit. Customers often have to maintain collateral which varies as the swap’s moneyness changes. If one customer goes broke, the bank isn’t out $100mm, only the current cost of buying that swap minus what the customer originally paid and minus whatever collateral it holds at the time of default.

Just as in Vegas, it’s the customers who lose money, e.g. the government of Greece and Jefferson County, Alabama. Even the world’s biggest universal bank risk management failure (JP Morgan’s London Whale, where the department charged with figuring out the bank’s overall net risk and hedging against it started betting instead of hedging), the bank remained profitable overall despite an eleven figure trading loss+fine.

#130 Steven on 02.04.14 at 10:44 am

It is amazing how supposedly educated people can justify paying so much for so little. Some people have to learn the hard way I guess.

#131 DR on 02.04.14 at 11:12 am

#127 Jimbo on 02.04.14 at 10:15 am
Wow! What are people thinking? Stupid is alive and well in Hogtown.

1. Buddy of mine just took the plunge for a beater house at $680,000 in East York and is dumping another $250,000 in renovations.

Mortgage will be over half-a-million!!!
———————–

He is building a second storey on top isn’t he? Ask him what hes going to list it for.

#132 Ralph Cramdown on 02.04.14 at 11:16 am

#128 John m — “How in the world could anyone get an appraisal for a mortgage on this piece of crap…unbelievable!”

I’m sure that there’s someone out there willing to lend the buyer $400,000 at 7% for one year plus a 1% origination fee, for a mortgage in first position. And maybe he’ll use a HELOC he has on another property to finance the renos.

That’s a guess. Anyone reading who knows what terms (LTV, rate, points) a project like this could be financed on these days?

#133 rosie "moving forward" in the knowledge that, "this won't end well" on 02.04.14 at 11:28 am

What a good guy. Tough to trade in a leased BMW though.

http://www.vancouverdesi.com/news/own-a-new-condo-in-vancouver-with-your-crappy-car-as-down-payment/705161/

#134 Daisy Mae on 02.04.14 at 11:59 am

#85 Will: “Whereas the tasteless Mississauga dump only got best offer because there is no potential.”

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

What galls me is that one poster pointed out the auctioneer started at $7 million. No bidders. First bid, $5.5 million — and becomes the opening bid. Winning bid, $6.2 million — selling for ‘over asking’? This is pure deception.

#135 Daisy Mae on 02.04.14 at 12:07 pm

#96 TO Bubble Boy: “That channel is more of an “Economic Action Plan” than anything Harper and Flaherty have done.”

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

…and speaking of Harper and Flaherty, where are they?

#136 Rational Optimist on 02.04.14 at 12:08 pm

Just so people are aware of this, average household income of a sampling of Census Metropolitan Areas:

Toronto- $68,110
Thunder Bay- $75,640
Hamilton- $76,730
Kitchener- $77,040
Ottawa- $94,700

The price of an asset is based on rents it commands, and the rents it commands are dictated by the people who will be doing the renting. I know that Toronto is a big (and inequal) place; that Roncesvalles is different than North York; and that there are plenty more 150,000 jobs in downtown TO than in Thunder Bay or St. Catharines. Ultimately, though, the price of real estate there is dictated by rents, which is dictated by the ability of people and businesses to pay them.

What can you build on a 2000 square foot lot that will rent for the $11,000 a month that would justify your $1.4 million investment in buying a tear-down in Roncesvalles, demolishing it, and putting something else up? I am not making conservative assumptions: I have no idea how much more expensive it gets to construct something when it’s going to be within a foot of its neighbour. If you don’t believe that’s the rent you need, you’re proof that we’re in a bubble.

The markets in the cities on the lower part of the above list will probably be more-or-less okay. The one at the top is going to have a rough go of it soon.

#137 gladiator on 02.04.14 at 12:17 pm

I wonder how many more such beauties exist in Toronto. An acquaintance of mine told me about a house he had to visit to deliver some documents and inside it looked like a haunted house with stairs with missing steps, black mold, buckets with water from leaky roofs, destroyed furniture, garbage and rotting stuff everywhere, and of course with a hellish stench inside.

#138 Doug in London on 02.04.14 at 12:30 pm

What, 803 grand for that piece of junk? The only way I would pay that much for a wreck like that place is if it came with many square miles of prime agricultural land, or the title said the buyer would have all mineral rights to the ground below and it was sitting above millions of dollars worth of easy accessible oil.

If you absolutely MUST blow 803 grand on real estate, buy a house in a cheap place like Windsor, Ontario and put the rest in a good collection of REITs as they are still on sale.

Whoever sold that place is probably still getting over how much she got for it (essentially she won the lottery) and probably went to get her vision checked and buy a good set of reading glasses. Or maybe she’s waiting for the alarm clock to ring and wake her up, convinced beyond any shadow of a doubt she is experiencing it all in a dream. Maybe I’m reading this post in a dream. Nope, I put my fingers across 120 volts AC and felt the tingling sensation, so I must be awake. Whoever said that truth is stranger that fiction knew exactly what they were talking about.

#139 waiting,wanting on 02.04.14 at 12:54 pm

That’s it. I’m officially packing up and going abroad for a few years. I gotta get my head to focus on something more positive!

#140 Panhead on 02.04.14 at 1:10 pm

#99 Harry Wilson on 02.04.14 at 1:07 am
re comment #11, from Ian:

The table’s not just there for its sparkling good looks; in that house it serves a dual purpose: eating off, and diving under.

Don’t you guys know a staged home when you see one?

#141 Realtor # 1 GTA on 02.04.14 at 1:37 pm

# 70 Aggregate

Right, it show sellers are dictating the price. Sellers are willing to wait. Buyers who sit on the sidelines waiting for interest rates will be for a very long time to change the price have been doing so for years.

You only need one person who is willing to buy her home.
Sellers are willing to wait – if it doesn’t sell in the spring the agent will advise the fall.

Too many buyers . Either – Lenders shrink the pool or not confident in employment.

You need something to shift the dynamic of this market and a 1% increase in interest rates will do nothing.

#142 pinstripe on 02.04.14 at 1:39 pm

Why are the critics so harsh on the house hornies and real estate industry?

Take some time and look at how the pillars of our society get things done. Start with the Red Chamber for example, there is an unlimited amount of waste and wrong that takes place. Everyone on the hill is well aware of the activity and NO ONE is willing to take any corrective action. Even most taxpayers accept this as a way of life. ALL levels of government are a mirror image of the Red Chamber. Waste and Wrong is OK. The performers are punished because it must be FAIR to the non performers.

Why should the house hornies and real estate industry be forced to change?

If the Red Chamber and all levels of government cared about the people, they would be the first to have two way communication, for example, a blog available for any and all two way feedback from the people be it good or bad.

#143 Mr. Frugal on 02.04.14 at 1:47 pm

It seems that commuting is still the wise choice.

#144 Eaglebay on 02.04.14 at 1:55 pm

A lot of pessimism on this blog is self defeating and man made. Remember the man selling hot dogs?
Watch, there are more jobs to come.

FORT ERIE, ONT.—Airbus Helicopters Canada is adding 40 jobs to its factory here without aid from the federal or provincial governments.

Wal-Mart Stores Inc said on Tuesday it would invest about C$500 million ($452 million) this year to strengthen its presence in Canada, creating more than 7,500 jobs including construction.

#145 jess on 02.04.14 at 1:57 pm

safe harbour swaps
http://www.bloomberg.com/news/2014-01-16/detroit-loses-bid-to-pay-banks-165-million-to-end-swaps.html
The banks argued in court papers that their swaps claims are protected by what’s known as the safe-harbor provision of the U.S. Bankruptcy Code. That rule makes it easier for some kinds of collateral to be seized by creditors, even when a debtor is in bankruptcy.
http://www.bloomberg.com/news/2014-01-16/detroit-loses-bid-to-pay-banks-165-million-to-end-swaps.html
=
controlling minds
The SFO is also the principal enforcer of the Bribery Act 2010, which has been designed to encourage good corporate governance and enhance the reputation of the City of London and the UK as a safe place to do business.

The SFO’s director is David Green CB QC.
http://www.telegraph.co.uk/finance/financial-crime/10613645/Firms-face-EU-blacklist-in-bribery-law-change.html

“Under Section 7 of the Bribery Act, it is an offence for a company to fail to prevent acts of bribery by its staff. But, in the cases of bribing another person or bribing a foreign public official, prosecutors must show that the “controlling mind” of the company – its board – knew about the activity.”

#146 Tripp on 02.04.14 at 1:57 pm

#123 Darlene on 02.04.14 at 8:56 am

“This is what 28 years of living off Canada Pension does to your house.”

Great point, Darlene! We can only imagine what it did to her daily life. Poor living conditions, crumbling walls, mould, cold, eating from that kitchen…As you mentioned, at least she sold at the top, but was it worth waiting?

#147 TorontoBull on 02.04.14 at 1:59 pm

“Yes, rent-hating immigrants bought it. Are you going with that? — Garth”
Garth, there are very few purpose built rental units in Toronto region over the past 10 years. People do have to live somewhere once they come to Canada. With lack of adequate rental stock, people have no choice but to buy…

#148 Alberta conservative on 02.04.14 at 2:21 pm

Being a bred conservative Alberta man, I am disgusted at how I feel the Conservative Government has caused this mess. Why would they put in a 40 year mortgage with nothing down during a boom, like they did in 2006? Because they were a minority government and wanted a majority? They brought in new “tightening” of mortgages they said -they’re fixing this mess… Jim F tries to deny he made this mess!
Both the conservative government of Canada & Alberta promised to balance budgets the last few years & cut government jobs. They’ve added hundreds & hundreds of government jobs, many seem frivolous to me, many with salaries over $200,000 per year, and plunged canada into debt by hundreds of millions! I know for the 1st time in 30 years we probably will not re-elect our Conservative Party of Alberta. Finally people are waking up, is it too late?!

#149 Oh no! on 02.04.14 at 2:40 pm

It’s politicians whi are the enablers of these idiots. All the greater fools will be blaming them when it all comes tumbling down, while at the same time expecting that all prudent taxpayers will contribute to bailing them out, and expecting the same politicians they will blame to enable this bailout in their favor. It is all fucked up, as a prudent taxpayer it makes you want to tell all thise irresponsible indebted homebuyers to prepare for civil war if things fall down without them being made to pay themselves for the societywide pain they are causing

#150 Sheane Wallace on 02.04.14 at 2:43 pm

300 k max in its current non liveable condition,
This is 200 k euro and is equivalent to an apartment at a good location in Vienna, Berlin, Rome, Barcelona.

I would pick Europe any time before this dump.

1.1 mln. min. just to live there? This is the price of a castle in France, there were some links on this blog few months ago..

#151 Big Brother on 02.04.14 at 2:45 pm

MKULTRA says which of you outed Smoking Mans home locations in these photos? We will find you!

#152 jess on 02.04.14 at 2:45 pm

Don’t drones supplant tanks?

population lima
2000 40,081 −12.0%
2010 38,771 −3.3%
Est. 2012 38,339 −1.1%
Sources:[10][11][4][12]

http://security.blogs.cnn.com/2012/10/09/army-to-congress-thanks-but-no-tanks
173 House members – Democrats and Republicans – sent a letter April 20 to Defense Secretary Leon Panetta, urging him to continue supporting their decision to produce more tanks.
The money for the tank plant will come against the wishes of the Obama administration, which for the past two years has asked Congress not to spend any money to refurbish the M1A1 Abrams battle tank.

Ohio senators Sherrod Brown and Rob Portman supported keeping the plant operating.
http://www.dispatch.com/content/stories/local/2013/12/10/Money-added-to-defense-budget-to-keep-lima-tank-plant-open.html

1434 W Market St, Lima, OH 45805
For Sale: $145,000 Last Sold:Aug 2006 for $279,000

or
1454 W Market St, Lima, OH 45805 – Zillow

#153 Sheane Wallace on 02.04.14 at 2:48 pm

http://www.prestigeproperty.co.uk/property/138280/French-Chateau-Indre-et-Loire-37-France/

#154 Ray Skunk on 02.04.14 at 2:50 pm

Looking for real rustic charm, and a hell of a better view?

This place is a mere $500k cheaper :

http://www.dailymail.co.uk/news/article-2551620/Pray-quick-sale-Homeowners-offer-1-000-reward-helps-sell-199-000-chapel-Twitter-Facebook.html

Oh, and I think there’s parking too.

#155 Sheane Wallace on 02.04.14 at 2:50 pm

Located in the Indre et Loire department, it is just a 20 minute drive from a TGV station (50 minutes to Paris). The nearest autoroute is about 20 minutes away and the property is not blighted by any road noise.

#156 :):(Ying Yang on 02.04.14 at 2:54 pm

#120 Martha on 02.04.14 at 7:50 am
#45 Babblemaster – you wrote:
“Immigrants don’t want to rent. It’s abhorrent to them. Regardless of their financial wherewithal, they want to buy. “
Ummmm, I’m an immigrant. And I rent. And have done so for all of my adult life. I’m pushing 60 now…and it is just wonderful not to have to worry about anything but rent and my communications provider. Everything else is included in my rent. I don’t even have to shovel snow unless I want the exercise…
So please, don’t paint us all with such a broad brush. Not all of us immigrants are 20-somethings with more money than sense…all dependant upon a job that may or may not exist next week…

……………………………………………………………………

I am of Asian decent and I can tell you for sure that unless you are destitute, insane, or just plain stupid we will purchase. We will buy anything on the ground! It is in our nature to own something attached to the land. I can’t explain but if I listen to my parents and their friends its always buy, buy, buy. We only rent is we can not afford to buy!

#157 World According To Garth on 02.04.14 at 3:01 pm

http://abcnews.go.com/Business/wireStory/us-factory-orders-15-percent-december-22358247

http://www.zdnet.com/dell-layoffs-this-week-15000-to-be-hit-report-7000025879/

And the USA recovery continues…….

#158 espressobob on 02.04.14 at 3:02 pm

‘HERD MENTALITY’ hard to believe, and makes the rest of us wonder how dumb the human race is to progress?
Glad i’m a contratian! Show me your pain!

#159 The joys of being a renter :-) on 02.04.14 at 3:09 pm

We rent a $700,000+ house in BC for $1800/month or $21,600/year. It’s big and beautiful and if we owned it, our mortgage would be closer to $3600/month or $43,200/year. It’s a 30 year old house that’s in decent shape. It got a new roof about 3 years ago and it’s now starting to need a little more TLC.

This past weekend, we got our annual visit from our landlord. She arrived Sunday morning with two construction guys. I had sent our landlord an email a few weeks early informing her that the deck was starting to rot, the upstairs bathtub was leaking into the basement, the gutters needed cleaning and the dishwasher was making weird noises.

After a 15 minute walk around the property inside and out, showing the landlord what needed attention, she says:
“Okay. Looks like we need a new deck, new dishwasher, the gutters need cleaning, the chimney needs a sweep and we need to get that bathtub leak fixed asap.” “Done” she says. “oh and I’m not going to raise the rent, you guys are great headache free tenants.

That was it. About $15-20K of work to be started in the next few days, she will manage the contractors and all we have to do is keep paying rent on time.

Alternatively, if we owned this place, our cost to own would have been about $60,000 rather than the $21,600 it costs us now.

And why should we be buying again?

#160 Jeremy on 02.04.14 at 3:10 pm

The value is in the land; there’s no value in the house. When there’s a new house built in its place, the price won’t seem as crazy. But it’ll still be crazy.

#161 World According To Garth on 02.04.14 at 3:13 pm

So how do you explain the trillions in bailouts to banks including Cdn banks in 2008 if they are neutral on both sides of the trade?

———————————————————-

#130 Ralph Cramdown on 02.04.14 at 10:42 am

Well, we had a highly unexpected outcome in North America’s biggest annual betting event on Sunday. Did the bookmakers lose? No, because they set the line so they’d get about equal action on either side, and they profited from the vig. So it is with a universal bank, which may sell a $100mm notional swap to one customer, the opposite $100mm swap to another, and pocket the difference as profit. Customers often have to maintain collateral which varies as the swap’s moneyness changes. If one customer goes broke, the bank isn’t out $100mm, only the current cost of buying that swap minus what the customer originally paid and minus whatever collateral it holds at the time of default.

Just as in Vegas, it’s the customers who lose money, e.g. the government of Greece and Jefferson County, Alabama. Even the world’s biggest universal bank risk management failure (JP Morgan’s London Whale, where the department charged with figuring out the bank’s overall net risk and hedging against it started betting instead of hedging), the bank remained profitable overall despite an eleven figure trading loss+fine.

#162 jess on 02.04.14 at 3:16 pm

MEDIUM total income ontario 2011
73,290

Average weekly earnings (SA, $) November 2013 gross – 939.83 = + 45k
Unemployment rate (SA, %) December 2013 7.9

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil121d-eng.htm

#163 Sheane Wallace on 02.04.14 at 3:18 pm

I am of Asian decent and I can tell you for sure that unless you are destitute, insane, or just plain stupid we will purchase. We will buy anything on the ground!
……………………..
and of course you pay in cash.
Cause I kinda don’t like insuring you at no cost. And I don’t like loaning to you at no cost either.

This is why I have NO MONEY invested in Canada and no accounts in CA banks.

#164 NorthOf49 on 02.04.14 at 3:27 pm

#145 Eaglebay on 02.04.14 at 1:55 pm

A lot of pessimism on this blog is self defeating and man made. Remember the man selling hot dogs? Watch, there are more jobs to come.

FORT ERIE, ONT.—Airbus Helicopters Canada is adding 40 jobs to its factory here without aid from the federal or provincial governments.

Wal-Mart Stores Inc said on Tuesday it would invest about C$500 million ($452 million) this year to strengthen its presence in Canada, creating more than 7,500 jobs including construction.
—————————————————————-

Good to know. I wonder how many newly out-of-work US Steel managers in Hamilton are contemplating a move to Ft. Erie. Doubt any of them would want to work at Walmart though.

http://www.thespec.com/news-story/4348939-u-s-steel-plans-to-lay-off-175-non-unionized-workers/

#165 heineken on 02.04.14 at 3:32 pm

i went to see this expensive dump.
the pictures don’t really show how bad it really is.
there were more than 20 people in the place when i was there for 15 minutes.
great location.
shit everywhere. smell of urine everywhere.
Congratulations to the person who purchased this beater. im sure in a couple of years it will be worth more than $2 Million.
Heres another example of free enterprise.

One more thing: the USA is recovering. economy is on its way up. Just ask Garth.
Canada is going down slowly but it will follow the mighty USA.

#166 jess on 02.04.14 at 3:36 pm

Apartment hunters targeted by new online scam
Scams involve high-end property with very low rents by overseas ‘owner,’ CBC investigation finds
http://www.cbc.ca/news/canada/british-columbia/apartment-hunters-targeted-by-new-online-scam-1.2522113

=

British Gas has admitted it will have to replace many of the 400,000 smart meters it has installed in UK homes – after new Government guidelines deemed they were not smart enough.
Energy giants call for review of smart meter roll-out to save consumers £1.8bn

http://www.telegraph.co.uk/finance/newsbysector/energy/10613535/Energy-giants-call-for-review-of-smart-meter-roll-out-to-save-consumers-1.8bn.html

================
Hydro One billing, customer service to be investigated
Ontario ombudsman’s office launches investigation after growing number of complaints

#167 Time has come today on 02.04.14 at 3:40 pm

When we start putting bankers in jail, this crap will stop.

#168 Tripp on 02.04.14 at 3:45 pm

#151 Sheane Wallace on 02.04.14 at 2:43 pm

Vienna-Too close to the Alps, it could get cold in the winter.

Berlin-50 theatres, 3 operas, 7 philharmonic orchestras, 153 museums, 12 Michelin guide restaurants. Who needs that?

Rome-All those +2,000 years of history will get you dizzy.

Barcelona-Endless summer and continuous night-life, when do they sleep?

#169 Ralph Cramdown on 02.04.14 at 3:50 pm

#142 Realtor # 1 GTA — “You need something to shift the dynamic of this market and a 1% increase in interest rates will do nothing.”

Yep. But with nutty bidding wars on product like this and the return of the 2.99% mortgage, I suspect Flaherty may be polishing up his cluehammer for another deployment. Or maybe given employment softness, he’ll just let it go. Luckily my cash and my livelihood aren’t on the line.

P.S. You should look at today’s article in the Star about Toronto property taxes. If I crunched the numbers right, they’d have to go up by 10% to replace the income from the Land Transfer Tax. TREB ought campaign for that.. “Your local realtor wants your taxes to go up by 10%. It’s only fair!”

#170 Ralph Cramdown on 02.04.14 at 3:56 pm

#162 World According To Garth — “So how do you explain the trillions in bailouts to banks including Cdn banks in 2008 if they are neutral on both sides of the trade?”

I was referring specifically to banks’ swaps books. If you want to learn about bank bailouts, there’s plenty of info out there. Canadian banks weren’t bailed out in any meaningful sense of the phrase.

#171 Entrepreneur on 02.04.14 at 4:14 pm

#143 pinstripe…If…on all levels of government cared about people they would be the first to have a two way communication…

I think Harper & the Conservatives have forgotten about the average Canadian person. Shipping our resources through thousands of miles of pipe to the U.S. & China (Christy Clark of the Liberals of B.C. are going to be shipping Liquid Natural Gas through pipelines then fargo to China.) Where are the refineries so Canadians can have jobs, have a home, start a family. Face it people, our politicians are selling our resources like they are doing right here in B.C. with our raw logs…many mills closed down and logs shipped to another country.

Our politicans should be protecting our resources for jobs for Canadians, our youth to carry on, our environment for future generations. I don’t see that.

#172 Did they run the numbers? on 02.04.14 at 4:20 pm

Okay. Lets try to make sense of this.
DP: 5%, apx $41,000
Mortgage: 95% $763,000 or $678 weekly (VRM, Prime -0.7%)
Land Trans Tax for a first time buyer: $5725
Inspection and lawyer (I’m sure they had it inspected!): $1500
Assume they have the $400,000 for renos in cash.

They spent $450,000 (cash) to buy with 5% down. What first time buyer doesn’t have that kind of cash…?
A quick craigslist view shows multiple rentals in the area. Prices going anywhere from $600/bedroom to $1500 depending on the fixings.
Lets say this place gets fixed up real nice ($400,000 should do something…) and commands $1200/bedroom. That gives a nice round $6000/month. Bear in mind this includes heat and elec.
I think we are pretty safe to call equity accumulation $1000/month at those rates.
I don’t know what property taxes are in TO but, my municipality runs around 1.5%, or $12,000/an in this case (I could be waaayyy off on this.) Utilities (water/sewer), $1000/an, insurance $2000/an., Heat and Elec. $6000/an. Again, I could be way off on these.
At this point we call holding costs (mortgage $2938/mnth, insurance $167/month, utilities $84/mnth, heat/elec $500/mnth, taxes $1000/mnth) $4689/month. That is a bare minimum and does not account for any repairs, rental marketing, vacancies, appliances etc. We will also say they add $12,000 to equity each year.
They rent for top dollar with a zero vacancy: $6000/mnth! Woohoo! That is cash flow of $1311/month! Plus another $1000 in equity! $27,732/year! (6% return on $450G, or 2.3% on $1.2M)
Opportunity cost (using Garths favourite 7% return): $450,000 x 0.07= $31,500/an ($84,000 on $1.2M)
So, a best case scenario we can see they are likely to lose $3768 a year in lost opportunity. Doesn’t look too bad…
Of course these are envelope back calculations. The chances of it renting for that are (IMHO) nil, I probably underestimated some of the costs and the equity accumulation, it requires the buyer to lock 100% (assuming they ‘only’ have $450,000 cash sitting around) of net-worth in one address, that there are no vacancies, no repairs, that tax rates stay steady and that it is purchased by a citizen and that they get a first time buyers rebate.
And, it does not account for market changes or rate changes and uses a 30yr amortization.
My rental house costs about the as much to care for (heat, maintain, insure, and water) as the mortgage principle, interest and tax! If we use that calculation ( (Prin + int + tax) x 2= carry cost ) then the figure is $7876/month.
That is serious loses of $22,500/an. Opportunity costs there are over $50,000 a year!
Personally, that is a tremendous amount of risk and uncertainty and not the way I would invest a half million dollars.
Any blog dogs have better numbers or calculations?

#173 ronh on 02.04.14 at 4:25 pm

CBC says Vancouver sales are up 30% over Jan 2013.
Whaaaaaaaat?

#174 Rational Optimist on 02.04.14 at 4:29 pm

161 Jeremy on 02.04.14 at 3:10 pm

“The value is in the land; there’s no value in the house.”

$803,649/2,000 square feet= $401.83 per square foot, or $875,446 an acre.

This does not include demolition costs, or remediation costs to make the “land” suitable for agriculture again.

#175 jess on 02.04.14 at 4:38 pm

huh?
Accordingly the Court of Appeal for Ontario ruled that section 223(5(b) of the Income Tax Act does not provide a priority to Canada Revenue Agency over and above their status as an ordinary judgment creditor.
http://www.beament.com/index.php/canada-revenue-agency-priority-claim/

The main issue in this appeal is whether an unregistered equitable interest can take priority over a lien registered by the Canada Revenue Agency against a taxpayer’s real property.
http://www.ontariocourts.ca/decisions/2012/2012ONCA0885.htm

#176 jess on 02.04.14 at 4:41 pm

166 heineken

ah those twins will feature it on the next show lol

#177 waiting,wanting on 02.04.14 at 4:42 pm

Oh, and on a last note before I exit the American dream.

“You know the way, it turns about, sucks you in and spits you out….”

#178 Sheane Wallace on 02.04.14 at 4:57 pm

#142 Realtor # 1 GTA — “You need something to shift the dynamic of this market and a 1% increase in interest rates will do nothing.”
—————————
I won’t loan you any money for less than 7 – 8 %. If somebody is stupid enough to do so at 1 % GIC and 2-3 % variable mortgage rate, good for you.

I can get easily 8-10 % return on investment yearly and have no intention on subsidising anyone with MY money.

#179 Johnny boy on 02.04.14 at 5:15 pm

Here you go Smoking Man, right in your backyard and parking for ten cars. Wow this would make a great crackhouse location!

http://propertyguys.com/property/index/id/77723

#180 Steven on 02.04.14 at 5:16 pm

RE#168 When we start putting bankers in jail, this crap will stop.

Unless we have a complete regime change in Canada nothing will change.

The Government, Banks, realtors and the MSM like things just the way they are and they are not going to stop or seriously call their members to account for their actions and policies. To even have a chance to effect change the oligarchs and politically correct special interests that are infavor of crime, perversion and the current status quo would have to go either on their feet or feet first. Then we could get back to basics and not before. As things stand now the system will prevent change and protect vice. For those reasons protesting and voting will have no beneficial effect.
It really is an all or nothing world.

#181 docteurfolamour on 02.04.14 at 5:29 pm

look like my own bathroom…i must be millionaire!!

#182 John on 02.04.14 at 5:32 pm

Ralph Cramdown on 02.04.14 at 3:50 pm
#142 Realtor # 1 GTA — “You need something to shift the dynamic of this market and a 1% increase in interest rates will do nothing.”

Yep. But with nutty bidding wars on product like this and the return of the 2.99% mortgage, I suspect Flaherty may be polishing up his cluehammer for another deployment. Or maybe given employment softness, he’ll just let it go. Luckily my cash and my livelihood aren’t on the line.

P.S. You should look at today’s article in the Star about Toronto property taxes. If I crunched the numbers right, they’d have to go up by 10% to replace the income from the Land Transfer Tax. TREB ought campaign for that.. “Your local realtor wants your taxes to go up by 10%. It’s only fair!”
—————————————————————–

Realtors are such uneducated shysters that don’t even have high school. It’s amazing how people believe what they say. I don’t think the public knows it takes a
4 week course to become a shyster oops I mean realtor. NO higher school required. LOL you can’t make this up.

#183 John on 02.04.14 at 5:34 pm

heineken on 02.04.14 at 3:32 pm
i went to see this expensive dump.
the pictures don’t really show how bad it really is.
there were more than 20 people in the place when i was there for 15 minutes.
great location.
shit everywhere. smell of urine everywhere.
Congratulations to the person who purchased this beater. im sure in a couple of years it will be worth more than $2 Million.
Heres another example of free enterprise.

One more thing: the USA is recovering. economy is on its way up. Just ask Garth.
Canada is going down slowly but it will follow the mighty USA.
—————————————————————–

That’s right Canada will follow the US to a 50% housing crash JUST LIKE THE US. You shyster realtors are real idiots without ANY economic education.

#184 Pete on 02.04.14 at 5:41 pm

TorontoBull on 02.04.14 at 1:59 pm
“Yes, rent-hating immigrants bought it. Are you going with that? — Garth”
Garth, there are very few purpose built rental units in Toronto region over the past 10 years. People do have to live somewhere once they come to Canada. With lack of adequate rental stock, people have no choice but to buy…
____________________________________________

Are you joking realtor? You sound like a stupid realtor that dropped out of high school.

#185 ElCid on 02.04.14 at 5:48 pm

#175 Rational Optimist
..
$803,649/2,000 square feet= $401.83 per square foot, or $875,446 an acre…

Sure?

1 acre = 43,560 sqft x 401.83 $/sqft = 17,480,628.00 per acre.
Just a bit more…

#186 liquidincalgary on 02.04.14 at 6:05 pm

@ 81 Shawn
the US buck strengthened, in spite of tapering, because emerging markets have started to fall apart. everyone heads to US markets for safety.

#187 Andrew Woburn on 02.04.14 at 6:22 pm

#125 jess on 02.04.14 at 9:20 am
Andrew what does this person mean when she says: “…very, very little reliance on foreign funding,”

What is foreign?
==============================

I think in this context they mean non-domestic i.e. not Chinese

#188 Hillbilly on 02.04.14 at 6:31 pm

Why would anyone be surprised by this transaction?

Prudence has long departed the Canadian realty marketplace, particularly in Vancouver and Toronto, chased out by your own government (via lax CMHC lending).

Canadians, by and large, are economic idiots who have WILLINGLY enslaved themselves to the banks as a result.

Simply can’t fix stupid.

#189 Andrew Woburn on 02.04.14 at 6:39 pm

#162 World According To Garth on 02.04.14 at 3:13 pm
So how do you explain the trillions in bailouts to banks including Cdn banks in 2008 if they are neutral on both sides of the trade?
==============================

The business model of banks is that they borrow short-term money and use it to make longer term loans. This means they are constantly having to refinance the short term borrowings. In a financial crisis, short term credit can dry up without warning leaving banks unable to renew their short term borrowings even if they have an excellent asset base. One of the primary purposes of a central bank is to step in and provide short term funding in a crisis until markets return to normal. That is what happened in the GFC and Canadian banks soon repaid the central banks on both sides of the border.

This is not a bail-out but simply how the system is supposed to work. A bail-out or bail-in means the failed bank no longer has enough capital to operate and the authorities or bank creditors have to permanently provide the missing capital. That is what the European banking crisis is about.

#190 World According To Garth on 02.04.14 at 7:07 pm

Your right. 114 thousand million from a tiny population like Canada where you have to wait a year to get surgery or and MRI (unless your a govt worker where you get to skip the line) is not allot of money.

FAIL

http://www.cbc.ca/news/business/banks-got-114b-from-governments-during-recession-1.1145997

171 Ralph Cramdown on 02.04.14 at 3:56 pm

#162 World According To Garth — “So how do you explain the trillions in bailouts to banks including Cdn banks in 2008 if they are neutral on both sides of the trade?”

I was referring specifically to banks’ swaps books. If you want to learn about bank bailouts, there’s plenty of info out there. Canadian banks weren’t bailed out in any meaningful sense of the phrase.

#191 TorontoBull on 02.04.14 at 7:25 pm

“Are you joking realtor? You sound like a stupid realtor that dropped out of high school.”
@185 – please check chmc housing now reports for toronto to see what I am talking about…and tell me who sound as a high school dropout then….
ps: dear SM I have nothing against high school dropouts; in fact I can totally see what you are raving about in light of the aforementioned comment :)

#192 bentoverpayingtaxes on 02.04.14 at 7:28 pm

I’m not a real estate guy…in fact I’m on record saying that real estate has zero value vis a vis my investment planning. The house I own is a place for me and my kids to sleep when we’re in town……not a part of my ‘net worth’ statement……That it’s worth 7 figures at current market rates means nothing to me.

However I am a retired but current investor trading my own account. I have to disagree with the detractors of the real estate juggernaut in Canada. Those who compare the CDN market to the US are simply ill educated in their analysis…in fact the two markets are apples and oranges….with zero correlation given the fact that Canada is not the US……a mere pimple on the butt of the US. Canada is not a free economy….we have almost zero mobility…..we are not connected to the global economy whatsoever. We have no head offices or major industries. We bring in a static number of immigrants every year and we underwrite their housing purchase and money laundering with a blind eye and liar loans. Housing can not be built except for the sluggish bureaucracy….which has been described as ‘trying to wrestle a slippery pig’, which ensures high taxation and construction costs with little new land being made available….which ensures a constant shortage.

http://news.nationalpost.com/2014/02/04/like-wrestling-with-a-slippery-pig-ontario-ombudsman-to-investigate-hydro-one-after-increasing-complaints/

The government is colluding to continue the ZIRP because they have borrowed billions to fund special interest and union pandering….the government simply can’t afford to raise rates. The leverage of zero rates is irresistible…..people will continue to use real estate as an vehicle with a built in ‘put’. Wondering when the crash is coming is akin to waiting for Godot.

#193 Andrew Woburn on 02.04.14 at 7:33 pm

#130 Ralph Cramdown on 02.04.14 at 10:42 am
#104 Andrew Woburn — “Perhaps even more scary is the recent report from the Bank of International Settlements
================================

I cannot argue with your analysis, Ralph, and this is how it is supposed to work. My concern though is as the aggregate bets keep rising, even a small percentage error, mismatch or counter party failure can be devastating and I lack confidence that the system can adequately monitor risk and/or the ultimate solvency of counter parties. Long Term Capital nearly brought down the system even though it was managed by some of the smartest quants in the financial universe. However there’s not much we can do about it anyway.

#194 Andrew Woburn on 02.04.14 at 7:37 pm

#81 Shawn on 02.03.14 at 11:39 pm
The Tapering of QE…

QE was meant to push down and hold down interest rates.Now that it is being tapered, long term government bonds are actually down significantly!
===============================

Most likely this the result of money flowing back out of emerging markets into the relative safety of US treasuries. Likely a relatively short term thing although there may be a lot more returning EM money to come yet.

#195 Babblemaster on 02.04.14 at 7:42 pm

#111 Debtfree

“Have you ever been an imagrant ?”

—————————————————-

Irrelevant question. Regardless, my parents are immigrants and many of my relatives are immigrants. None of them rent. Their children don’t rent. And their children’s children don’t rent (one exception only). Suggest to them that they should rent and they’ll look at you like you’ve got horns sticking out of your head. Renting is simply inconceivable to them.

#196 randman on 02.04.14 at 7:51 pm

Richard Russell again….

I’d be lying if I said that I wasn’t worried about the way things are going. Frankly, I’m truly scared for myself, my family and the nation. I have the sinking feeling that the stock market is on the edge of a crash. If that happens, investor sentiment will turn quickly bearish. And the bear market will start feeding on itself. Ironically, the recent action occurred in the face of almost insane bullishness on the part of the crowd and on the part of investors.

Obviously smart heads and institutional money managers know that the US is semi dead in the water. And all the talk about an improving economy is just wishes and hopes. Bernanke’s dream of a flourishing new economy, improving without the need of the Fed’s help, is an idle dream.

I’ve been writing about the stock market for over 60 years and I can’t remember a time when I was so filled with foreboding regarding what lies ahead. The primary trend of the market, like the tide of the ocean, is irresistible, and waits for no man. What scares me the most in this current situation is that I see no clear island of safety. ”

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/2/3_Richard_Russell_-_The_Stock_Market_Is_On_The_Edge_Of_A_Crash.html

#197 John on 02.04.14 at 8:05 pm

The Realtor’s fault? Because someone decided they wanted to pay x amount for a house in question?
Give your head a shake. No one is forcing people to buy these homes. They obviously feel for whatever reason it’s worth it to them.
Love how people always have to blame someone.

#198 Obvious Truth on 02.04.14 at 8:18 pm

I’ve always felt Housing is about who will lend to you. Until lenders see risks nothing will change.

Employment, deflation, dollar, weak consumer, high debt levels and potential cost push inflation (that kind probably won’t help your house). Possibly some capital flight for fun.

Besides high debt levels the rest are all fairly new. Let’s see if housing can defy.

I’d like to see it but have a hard time believing.

Another divergence today between US and Canadian financial efts.

Will be an interesting year one way or the other.

#199 Old Man on 02.04.14 at 8:22 pm

Get into larger cash reserves and park for awhile; not the traditional 10% but higher. March is going to become a bad month as the USA will once again run out of cash. This cannot go on forever.

#200 Daisy Mae on 02.04.14 at 8:23 pm

#132 DR: #127 Jimbo: “Wow! What are people thinking? Stupid is alive and well in Hogtown.”

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

They’re in denial. I find they just don’t want to hear about it. Living in the twilight zone, I guess….

And when Garth talks about lemmings — people just doing what others do without thinking — it includes all facets of life. Amazing and amusing.

#201 Daisy Mae on 02.04.14 at 8:32 pm

#147 Tripp: “We can only imagine what it did to her daily life. Poor living conditions, crumbling walls, mould, cold, eating from that kitchen…”

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

Do we know the owner lived there? Maybe she’s a shrewd owner. Perhaps it was a hapless renter.

#202 TurnerNation on 02.04.14 at 8:50 pm

Water cooler talk today:

“Hmm my kando mortgage, 50% of payment goes towards interest, the rest in principle.”

You don’t say. So not much for paying yourself.

#203 MrHulot on 02.04.14 at 9:15 pm

#197

Question: Who the hell is Richard Russell?

#204 Spaccone on 02.04.14 at 9:31 pm

@197

See table 1/4 of the way down:

http://www.cxoadvisory.com/3585/individual-gurus/richard-russell/

#205 sheane wallace on 02.04.14 at 9:32 pm

#193 bentoverpayingtaxes

The crash will come and you won’t like it.
All the IPRORTANT things will become expensive – education, health care, insurance, drugs, you would not be able to retire.

And then you can shove that house up your …. as nobody will care about it.

#206 Tripp on 02.04.14 at 9:38 pm

#202 Daisy Mae on 02.04.14 at 8:32 pm

“Do we know the owner lived there? Maybe she’s a shrewd owner. Perhaps it was a hapless renter.”

It doesn’t matter. Owner, tenant, nobody should live like that in a first world country in the 21st century.

#207 Neo on 02.04.14 at 9:52 pm

Bang on Garth. Real estate is not an investment, because land is not a true commodity. Polanyi writes about the 3 ficticious commodities; land, labour, and money. Once we commoditize these 3 things, we distort society by applying market logic to all things. When markets fluctuate, as they always do, then society is disrupted. A home is a place to live in, and at the end of the day, after prices rise and fall, that’s all it ever really is. If you are prudent, buy within your means, you will be okay. Over leverage yourself, and you expose yourself to risk…and assume responsibilites for whichever outcome.

Home prices are at all time highs, and we must always remember (if people would only read history) that it’s always highest right before the drop. Oh yeah…one more thing; history also shows us that when the economy collapses, the rich always win by buying up and consolidating their wealth for pennies on the dollar…at everyone else’s expense!!!

#208 ozy - ronscenvales -DEH! on 02.04.14 at 11:06 pm

ronscenvales -DEH!

there are ways to bring price down in a hood without fundamentals, like that

but first, wait for all smart youngsters to buy – lawyers will be salivating at the assets to be split when shit hit the fan

ok, the place does not have a fan. buy fantech / solid german stuff – the shit is being shipped and due for arrival – just 20% higher, when dumps will cross 1 million

success to all youngsters

#209 Randman on 02.04.14 at 11:07 pm

#197

Question: Who the hell is Richard Russell?

One of the long term market old timers……With James Dines and Jim Sinclair

http://en.wikipedia.org/wiki/Richard_Russell_(Dow_Theory)

#210 FutureExpatriate on 02.05.14 at 12:49 am

This goes beyond being stupid. This is insane. Regret for a lifetime and beyond.

#211 DocInWaitingRoom on 02.05.14 at 1:35 am

Lmao thanks Ian. I think she put the table there to prevent her granite floor from being scratched from the falling ceiling.
Seriously these seniors really point to the desperation and sad emotional attachment to homes. I think it will be years before people sell their homes at tremendous personal and emotional costs. Some will not be so lucky.
At least she had the last laugh. The table will. Cone in useful for an earthquake or natural disaster which is likely to happen when the place collapses whether naturally or by construction force

I like what she did with that table in the second photograph. Ties the whole room together. -Ian

#212 DocInWaitingRoom on 02.05.14 at 1:43 am

Looks like realtors did an amazing job staging the house with the table to focus eyes away from the ceiling. Where do they get taught these skills?

#213 Enzcav on 02.05.14 at 8:46 am

Profit from the coming multiyear downturn in real estate in Canada. You the tax payer are all on the hook for the pending losses coming from CMHC.
I’m comfortably in the red on my shorts on the TSX. Home Capital Group HCG and Genworth MIC. Garth can you provide other stocks in the housing delivery pyramid ; real estate brokers, high yield MBS in particular issues from past 4 years, non big six financial lenders for projects, materials suppliers, companies involved in foreclosure liquidation?? Etc. Etc. RE has been a one-sided trade effectively now for 14 years without any correction.. Odds are in our favour of significant initial decline followed by 10 years of steady deteriation. Investors on this blog need to be alerted to the correct trading opportunities on the TSX..
enZ

#214 Enzcav on 02.05.14 at 10:03 am

Short Canada Theme already happening.. Look at the sudden drop in CDN $. When rates normalize here in Canada housing virgins will be crushed. 50/50 odds that canada will have a housing triggered ressesion which you and the taxpayer will have to pay for… Only in canada eh !

#215 bentoverpayingtaxes on 02.05.14 at 12:38 pm

#206….gosh…someones a trifle envious. Success is something you should aspire to , not hate because you have none…..And hey…if all those things become unaffordable…it will not be me that suffers…..I’m sitting on a pile of smart money…it will be the people at the bottom who suffer. Me….I’ll spend my winters in the sunshine for evermore.

#216 Old Man on 02.05.14 at 1:48 pm

I have calculated a hypothetical using a base target date of 1973 in Toronto for a married couple graduating from university with one or two basic degrees. Took the gross income earned and matched it with real estate values at that time for a modest bungalow purchase. Came up with a factor of 2.5 x gross earned income to buy a home. Now at that period earnings rose rapidly and so did real estate values year after year.

Now if I applied this past model for 2014 the same married couple would buy the same home for $450,000 tops. Today how can any university graduate buy a home as the jobs are not there; the escalating earnings are dismal at best; and prices are too high? Its with cheap money buying debt, and they are trapped into a nightmare about to prevail sooner or later.

#217 Rexx Rock on 02.05.14 at 3:45 pm

Obviously the train has left the station ,for more huge profit in SFH. Its been an awsome investment for the last few years and its sad that Garth didn’t forsee this gravy train investments for his followers except saying the opposite.We all make mistakes in investing but like the old saying goes “no risk no reward”.