Coming clean

clean modified modified

Here’s what the real estate industry says: for five months running fewer people have bought houses, especially in Toronto and Vancouver. It happened again in January. Despite the fact listings are at near-historic lows. So, demand is falling. CREA blames crappy winter weather, but that doesn’t explain numbers going back to August.

Despite low inventory and decreased demand, prices are up. Bloated, distended and bulbous, in fact – an average year/year increase of 9.5%. With almost every market in the world, rising prices, with falling sales and lower supply, spells trouble. An asset bubble in fact. And tons of risk.

Concurrent with this, new home construction across the nation has fallen to the lowest level in 12 months. In Toronto, builders finished 2013 with 23% less activity than the 10-year average. Now the central bank’s new governor, Stephen Poloz, says real estate is weakening to the point it will not add to economic growth.

In January sales dropped about 4% in both the GTA and the Lower Mainland, despite a weakening in mortgage rates. Home sales month/month were down in more than 60% of all local markets. Sales activity was 9.1% below the peak of last August, when all those damp young virgins were trying to beat a mortgage increase by triggering their pre-approved loans.

Those are the facts, as reported by the industry. They’re ugly. Foreboding.

Economists are wary, even those working for the major mortgage-spewing banks. BMO says housing, especially in Toronto, is a national economic threat. TD says real estate is overvalued between 10% and 25%.

“While weather may have constrained sales activity in January, the slowdown is more emblematic of the broader theme of a soft landing in the existing home sales market,” said Mazen Issa, of TD Securities. “Old Man Winter likely put a serious chill into January home sales, but underlying activity looks to be simmering down in any event,” says BeeMo’s Doug Porter. “Despite the gaudy price increases in January, we suspect that pricing power will eventually follow the sales lead.”

Now, here’s a warning that things could be dramatically more fragile than they appear to be.

“This market has been pushed to the extremes. We are actually seeing the lowest demand since 2009, and yet prices have soared by over 9%. This is the classic definition of a bubble, but the consumer is not being told because he continues to be presented with numbers that are false.”

That’s Ross Kay, a former GTA-area realtor who has now turned into a consumer crusader, housing bête noir, and professional thorn in CREA’s paw. Kay says the industry’s claim that 23,647 houses across Canada sold last month is bogus, since it included just over 4,000 properties which were listed more than once and counted twice. That would mean as disturbing as the official numbers are, they might actually be 20% worse.

“Sales momentum has been down for 15 months in a row,” Kay says. “Not only is this because the number of houses that exist has risen dramatically, and no statistical allowance has been made for that, but also because of the multiple listings which CREA continues to count twice. You can’t even argue this point, and organized real estate has admitted to the practice.”

If you believe him (and last year this blog presented evidence of the multiple-listing practice), then Ross says CREA is “just setting everyone up for a major correction” by continuing to publish questionable stats – which are then picked up by every major real estate marketer as well as CMHC and federal agencies. He says his complaints have now sparked investigations by the federal Competition Bureau, as well as RECO, Ontario’s real estate regulator.

“Organized real estate is trying to give a false impression of the market, and right now they’re getting away with it.”

We know that. Every MSM story about rabid yuppies paying obscene sums in bidding wars for beater houses reinforces the meme of constantly rising real estate values. Clearly there are enough people who have bought into the ‘buy now or buy never’ mantra, reinforced by ‘official’ numbers, to pump the gasbag further.

Now, Ross Kay may be a headline-snorfling, self-promoting defrocked realtor gadfly. CREA obviously thinks so, and has roundly dissed him.  But certain facts remain. Rising prices on declining volume and low supply underscore buyer emotion, not logic. In other words, many people are nuts. Second, even the seasonally-adjusted, realtor Frankenumbers do not support the premise of a healthy or expanding market. Third, realtors have already admitted double-counting sales and quietly revising past numbers, making valid statistical analysis a chore. Fourth, with debt and home ownership at record highs, it won’t take much to crater the real estate status quo. Higher rates, fewer jobs, less Chinese, more vortex – whatever.

The risk to recent homebuyers, those virgins with little or no equity. plus wrinklies with most of their net worth stuffed into a house, is palpable. And it will come as a complete surprise.

166 comments ↓

#1 Rob on 02.16.14 at 4:42 pm

Great article as usual, everything you say makes sense. But every year that passes reality seems to escape us. It would be nice to see 2014 be the year of the long awaited correction.

#2 ronh on 02.16.14 at 4:42 pm

No surprise. Garth has been warning about this for years.
We should worry about what comes next.

#3 Mr. Reality on 02.16.14 at 4:43 pm

2014 will be an interesting year indeed. I live in oil country and the topic of conversation has turned abruptly from buying toys to paying down debt. You know things are going to take a dump when that happens…….

Mr. R.

#4 Retired Boomer - WI on 02.16.14 at 4:46 pm

Always the Greater Fool denies the reality of any situation.
Why should Real Estate be an exception?

#5 Derek R on 02.16.14 at 4:48 pm

Well it’s a nice spring day in Calgary. The future of Real Estate is looking bad but we can still get out and enjoy the sunshine for a few hours.

#6 Paul on 02.16.14 at 4:52 pm

No Doubt it is here, I feel sorry for the people that are going to get hurt there will be many and not just the greedy that a lot of posters here want to see crushed no joy in that.

#7 Brian Ripley on 02.16.14 at 4:53 pm

re: “CREA blames crappy winter weather” It looks more like sales are in a long term trend down, and a short term typical seasonal trough.

Canadian national MLS sales peaked in 2007-2008 and in 2013 they were down +/- 14% and have been flat for the last 3 years. Chart: http://www.chpc.biz/6-canadian-metros.html

Sales in the 6 biggest Canadian cites are currently at or still heading into their seasonal lows except for Calgary and Edmonton (drill baby drill) where they have ticked up in advance of the other cities. Chart: http://www.chpc.biz/sales-listings.html

#8 Rock on 02.16.14 at 4:54 pm

Garth, you are a machine. I don’t know how you can write such a concise and sober post after a morning of epic hockey.

Huge win today! Go Canada Go!

#9 Entrepreneur on 02.16.14 at 4:58 pm

Sure glad there are some good people in this world like you, Garth Turner and Ross Kay. “Organized” real estate even admitting their practice shows how arrogant they are; they can do wrong and get away with it.

People will get burned by “organized” greed (self-interest groups). This is the sad part as everyone is important for a sustainable community.
It is our youth that will run our country, our communities, our small businesses. Our “organized” system should show respect through honesty. The only way to operate a country and the people in it.

Hope more honest, good people come on board.

#10 Christopher Lackey on 02.16.14 at 5:00 pm

In your Globe and Mail this weekend, the inside story on Core Condos, the downtown 24 story development which sold out in one weekend. “There’s so many people moving to Toronto” it said “Young professionals are snapping these things up”.

How many are we in comparison to the boomers, again, us “millenials” (who I recently heard described as 21-36). And we want to pay 360k for 600 square foot boxes in the sky so we can work 14 hours a day downtown earning 100k on Bay Street. Who needs kids or a stove for that matter? If this doesn’t sound like you you must be some kind of degenerate loser. That was the message I received loud and clear from this article .

#11 sheane wallace on 02.16.14 at 5:00 pm

Reliable Statistics? in Canada?

This is an oxymoron by definition

#12 crowdedelevatorfartz on 02.16.14 at 5:01 pm

Hmmmmm, investigating CREA now is like buying a chain and padlock after the bicycle has been stolen.

#13 sheane wallace on 02.16.14 at 5:02 pm

like an honest used cars salesman (even though I know one relatively honest)

#14 father on 02.16.14 at 5:06 pm

who is 1st

#15 Forzudo on 02.16.14 at 5:10 pm

Go, Canada, Go!

Best wishes to all of our athletes.

#16 World According To Garth on 02.16.14 at 5:18 pm

Looking forward to going downtown slimecouver to buy some cheap bitcoin Monday. For all the naysayers remember two things.

1. Google, Apple, Intel and other “start ups” in the 90s in their teens. Google is 1200 bucks today.

2. There is a global revolution against slimy, evil, drug/terrorist money laundering, fee to death too big to jail, print “credit at interest” out of thin air BANKSTERS world wide.

Bitcoin is 1. And bitcoin is NOT 2. Think I’ll try a small portion of our diversifed capital and see where we go.

#17 happy renter on 02.16.14 at 5:26 pm

Spoke with a friend last month who lives in the GTA and was devastated when their real estate agent posted on social media that their house had sold “over asking.” People kept congratulating them but it was awkward for them because they had actually lowered the price a number of times in order for the house to sell, so the “over asking” was just based on the lowered price. The agent was a friend, so they didn’t want to make them look bad, but in reality, they were very disappointed about the amount they got for the house.

Definitely some spin going on in this area….we’re glad to be renting!

#18 An old babe in White Rock on 02.16.14 at 5:26 pm

I’ve followed Garth for quite a few years now…lurking…waiting for the ‘correction’ so I can have my last ‘home’…finally. This all makes me so sad. If Garth is right a lot of people are going be hurting, if he’s wrong it would appear it’s only going to get worse. It’s too late for me, as even with a significant correction, I’ve decided that I’d rather have the income and the freedom. That being said, it makes my heart hurt. Life is short…

#19 rainclouds on 02.16.14 at 5:33 pm

From a statistical perspective it is gobsmackingly easy to correct and the example is staring us in the face.

The US has Trulia, Zillow. Independent aggregators of public domain information.

Canada gets Realtor.Ca and spin from a sociopathic self interested industry with 0 oversight and free reign by an inept, compliant media and equally inept government regulation.

No doubt F and Tubby are on the case and we will join the 21st century in 2016 or thereabouts.

#20 omg on 02.16.14 at 5:36 pm

When the market finally craters, I know we are going to hear all kinds of tough luck stories about those that were suckered into paying 10s of thousands and even 100s of thousands over the intrinsic value of their house.

But seriously, when houses are 3, 5 and 8 times historic price to income multiples, then houses have become an investment decision. (Remember when a house was just a place to live and if it went up 2-3% a year you were happy).

For those that did not think it through as an investment decision and get stung big time, sorry you are on your own. Nobody is there to bail out the private investor when he makes a mistake on an equity and so it should be for RE bought over the past few bubbly years.

The unfortunately thing is, its going to take the entire Canadian economy down with it. We could be in for several years of slower growth because of it.

Plus of course our governments will be falling over themselves to rescue the poor suckers that are under water on their mortgages. So all us responsible suckers will end up paying higher taxes.

#21 Mike on 02.16.14 at 5:43 pm

Does anyone know why the number of listings has declined in recent months? Is this typical for a housing market about to correct?

#22 Babblemaster on 02.16.14 at 5:48 pm

There is no real danger of the government doing anything to seriously threaten the housing market, especially not raising rates. If anything, they’ll do everything they can to rescue the housing market if it ever really does start to tank. Look at the insane things they did in the US to revive the housing market.

#23 Diggstown on 02.16.14 at 5:49 pm

Living on the left coast I always figured a crash here in Vancouver would not be interfered with by Ottawa. However, now that Toronto is in on the mix and a “national economic threat” could be at hand is it going to be the case that the Government could intervene, if necessary? If so, it seems that the sloped fore-headed, debt ridden, over leveraged, house rich folks will be saved with no lesson learned.

#24 not 1st on 02.16.14 at 6:01 pm

Look Garth, its simply different in Vancouver because the MSM tells me so;

http://www.calgaryherald.com/opinion/op-ed/Yaffe+bank+housing+bubble+bursting/9510453/story.html

#25 Willdaman on 02.16.14 at 6:04 pm

“for five months running fewer people have bought houses, especially in Toronto and Vancouver. It happened again in January. Despite the fact listings are at near-historic lows….Despite low inventory and decreased demand, prices are up.”

Ok, so listings are at historic lows but prices were UP. How are they saying that there is decreased demand?
Seems more logical to me that since listings were low, a high demand for those listings caused the higher prices… Simple supply and demand.
Also, if I’m considering selling in a hot market, I would most def wait to list during the spring market, so no real surprise that listings are low.
Let’s see what the spring market brings…

#26 Smudgekin on 02.16.14 at 6:06 pm

Just as the U.S. is pulling out we appear to be flopping in..

Pity the east coast Oz folks losing thousands of automotive jobs the next few years.

#27 On a lighter note...to ease the depression on 02.16.14 at 6:14 pm

This is specifically to give ‘you’ a chuckle, Garth. Thanks for all you do!

https://www.youtube.com/watch?v=ub1Dc3NHZ3s&feature=youtube_gdata_player

#28 Realtor on 02.16.14 at 6:32 pm

It is pretty much almost about all over for Vancouver real estate. The local real estate is still heavily dependent on very low emergency level interest rates to function. With the cancelling of the Immigrant Investor Program, all my Chinese clients whom I’m Chinese myself bought real estate earlier on and have sent their kids to school here as international students, paying lots of money, are still waiting for approval by the Investor program.

Since the program is now scrapped, they see no need to have property here as they can no longer bring their family here and are now starting to cash out of the real estate and go somewhere else.

We had an emergency meeting about this as we don’t know what to do about this. Scary times indeed. Been in this industry for over 15 years.

http://cnews.canoe.ca/CNEWS/Canada/2014/02/16/21474326.html

#29 zee on 02.16.14 at 6:40 pm

Garth,

You understanding of the Housing stats is that higher prices have resulted based on incorrect information on the housing market.

Why cant higher prices be because lower inventory is pushing prices. Also, lower sales volume because fewer homes are for sale on the market.

Different conclusion from the same stats.

Nowhere did I say faulty data has caused price inflation. That’s just silly. — Garth

#30 X on 02.16.14 at 6:53 pm

Anyone know what repercussions the RE boards may actually face if the investigations by the federal Competition Bureau, as well as RECO, Ontario’s real estate regulator prove the RE boards misled the public with their press releases.

My guess is nothing will come of it, which is unfortunate for joe public who unknowingly purchased RE in the hopes that it will continue to rise in value forever…

#31 Mark on 02.16.14 at 7:04 pm

#29 zee buddy what are you smoking and where can I get some?

#32 Gooderfool on 02.16.14 at 7:07 pm

Garth, I never quite get why you argue that rising prices combined with low supply (and falling sales) is out of whack. Would rising prices combined with high supply not be all that much worse? Or are you simply suggesting that supply is artificially being held back?

#33 Old Man on 02.16.14 at 7:09 pm

#27 On a lighter note – now there is an idea for making a buck, as that show could be packaged and taken on the road. Great entertainment for a birthday party; a business convention; dinner theater; a fund raising event; a restaurant venue; a school skit for Christmas, and the list is long. Its an opening act as that dog is a rising star, and even the Smoking Man can see the potential of this dog act at the Seneca Casino bar lounge.

#34 Rexx Rock on 02.16.14 at 7:17 pm

Where I work ,we just lost 8 full time jobs and I guess 8 part time jobs because of bumping.Its the new norm.There is one lady with one child who went from part time to full time to cover a full time worker will now go back to casual because of senority.I pleaded with her not to buy a new car.Buy a good Japanese beater like I drive.Oh no way,well she bought a $30,0000 suv to add to her over $50,000 lost in equity of the house they bought in 2010.Sad stories,especially when your in your 40,s.

#35 Freedom First on 02.16.14 at 7:20 pm

Thank you Garth, and you too Ross Kay, for continuing to bring us the facts/truth on what is going on in Canada. I know this is difficult to do, as we live in a “shoot the messenger”world today. Many countries/corporations in the world fire a person from their job, imprison or even execute people for exposing corruption and revealing the truth. This causes many whistle blowers to flee their home country to avoid unjust punishment. Unfortunately, this is not just being melodramatic, or outright lying, but is a fact. Perhaps even more unfortunate, is that the corrupt/lying/evil people remain unpunished. However, everything done in the dark will eventually be revealed in the light. No exception. Thank God for Karma, and the good people who help reveal the truth. Oh, I almost forgot, I don’t think Goldman Sachs is really doing God’s work either.

#36 tiger on 02.16.14 at 7:35 pm

The sun will rise forever,every day! Every thing else is for you to deside,Knowlage is always helpful, ignorance I do know as well as assumtion= fail

#37 Ben on 02.16.14 at 7:52 pm

Beautiful day in Montreal today. Hell of a day to rent!

Regarding rising prices and falling volumes, this happened in the UK also. As volume falls the bottom end of the market falls more than the top end, pulling up the average.

I don’t dispute your sales figures. Why oh why don’t you have a centralised registry of all sales? Don’t your tax office need to know this? Are you telling me the Canadian tax office has no idea how many sales went through? Or they are expecting 23K but only saw tax from 19K and they just thought “ah well”! They must be able to produce a number.

#38 Aggregator on 02.16.14 at 7:54 pm

#28 Realtor

There are about 1.3 millionaires in China. That makes 46,000 applicants about 3.6% of total millionaires. You could toss all those applicants and still fill 46,000 positions in no time.

If want a good measure for HAM coming abroad, that would be the SHIBOR overnight rate. Every time that rate spikes (cash crunch), you can be sure developers and red nobles are fleeing into safe assets abroad.

Everyone has it backwards. The government didn't terminate IIP for stop foreign inflows, rather to prepare for more.

#39 pinstripe on 02.16.14 at 8:07 pm

Harpo et al will do whatever is needed to keep the housing industry afloat. The taxpayer is committed to CMHC and is most willing to accept the consequence.

Even though it is the right thing to do, it would be political suicide to raise interest rates. The big spender non performers must be protected.

Harpo is determined to win the next election, and at this point the wind is in his favour.

#40 Multi-segmented market on 02.16.14 at 8:09 pm

Canada is not one RE market, but many. Some markets may well experience even precipitous price drops, some maybe even startling price increases, others relatively little change.

Those who buy now should try to ensure their market is one which will not be significantly adversely affected during 2014 as this correction proceeds.

I would not rely solely on realtors to make this assessment.

Alwyn

#41 Steven on 02.16.14 at 8:10 pm

I have bad news for realtors sales are not down because of the weather. Sales are down because the product being sold is too expensive relative to a man’s earnings for 3 years or less. You people and your greed have gone too far.

#42 Obvious Truth on 02.16.14 at 8:11 pm

Anatomy of a correction can take many forms. This one is about lending. On an asset that typically has a longer cycle of highs and lows.

Corrections usually end with complete despair and no hope for any change in the future. That’s the sad part. We’re not talking about gold stocks here. Its peoples lives.

#43 tiger on 02.16.14 at 8:12 pm

Drive down any 4 lane road 70% of traffick is in the fast lane closest to the on coming traffick.passing within 1.5 meter , take the slow lane , less chance of a head on! Look ahead as far as you can c ,yeah use the fast lane for some gains then back into the slow lane, just like a tiger does, it could save ur life

#44 Ozy - A bot of partisan analysis on 02.16.14 at 8:13 pm

1. There are les sales just because listings are at near-historic lows – so if you were to pay 10% more than last year prices – you expect to have a selection to choose from

2. In Toronto, builders finished 2013 with 23% less activity than the 10-year average – this is great news for prices – as less product is being added to market

3. if u add 1+2, it’s clear we see the cause of that 10% growth, and next year might be just 5% – or 15%

#45 Ozy - A bit of partisan analysis on 02.16.14 at 8:14 pm

1. There are less sales ONLY because listings are at near-historic lows – so if you were to pay 10% more than last year prices – you expect to have a selection to choose from, no product –> higher prices as desperate non-owners compete to ‘death’

2. In Toronto, builders finished 2013 with 23% less activity than the 10-year average – this is great news for prices – as less product is being added to market

3. if u add 1+2, it’s clear we see the cause of that 10% growth, and next year might be just 5% – or 15%

#46 tiger on 02.16.14 at 8:20 pm

Re comment 37#
70% that’s my stats just by observing , seen lots of deaths from this!
Is that the way most carry on in every day life
Just a question, but I think true.

#47 I_AM_HAM on 02.16.14 at 8:27 pm

“Actually, according to the first detailed estimate of
international purchase activity in London by Knight
Frank, the percentage of all central London homes
that sold for more than 1 million pounds to
foreigners in the 12 months through June 2013, was
49% to be exact. And as we showed yesterday when
we put China’s loan creation in the context of US
and Japanese QE, keeping in mind the use of
proceeds of all this newly created inside money has to ultimately go
somewhere – that somewhere in this case being London and other global
luxury real estate, said percentage is only going to get higher. Especially
when one adds Russian, the middle east and other various regions whose
oligarchs are desperate to park their money in “safe” havens.”

HAM is alive and well.

#48 GoCanadaGO on 02.16.14 at 8:32 pm

I see some other people saw the InGastown blurb in the Straight this week.

Its the first time I recall seeing some actual numbers about this project, so would someone like to run them so we can see what the real-world financing is like for this project?

#49 Smoking Man on 02.16.14 at 8:38 pm

I’m an absolute addict to my new drug. PINK FLOYD, your now number 2.

Goggle Handsome Family…….. They have been in my ear buds all weekend. I’ve downloaded everything they have done….

It’s like I died and went to heaven…

Brain Food…..

#50 Smoking Man on 02.16.14 at 8:53 pm

Now the way I read the Toronto market, bi passing the speculative assumptions of fun-d-mentals.

OK ham is a myth right garth. Yet Left coast prices booming.

I glance at MLS, absolutely nothing for sale in Toronto at
market, asking prices, way over.

So if one subscribes to the law of supply and demand. Her do no mics. 101…

Basment dweller vultures are shit out of luck..

The owners stupidly is there strength. The renters deductive reasoning and logic, weakness.

#51 Daisy Mae on 02.16.14 at 9:01 pm

“Economists are wary, even those working for the major mortgage-spewing banks. BMO says housing, especially in Toronto, is a national economic threat. TD says real estate is overvalued between 10% and 25%.”

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

Duh! And what have YOU been saying for years? What a disgusting mess we’ve made of it all…

#52 tiger on 02.16.14 at 9:02 pm

It was Ontario first and BC second ,last time. 80s, time will tell ,that’s what I rember.

Why would I keep paying my mortgage
Price drop ?
Hey I don’t have ,won the lottery!
Still have my 70acres
Sold the other ,I think angels helped me out
Wow I shure have a lot more friends now , feeling g!
Tell them all nope money’s all invested agressive freinds ,sucking on mommas milk, I got of that at the age of10 , since then there ain’t a rock unturned within 300 k ,happy me,and my family, I’m out west, and I’m not don d west, f I would just s my self if I were he he!

#53 tiger on 02.16.14 at 9:04 pm

It was Ontario first and BC second ,last time. 80s, time will tell ,that’s what I rember.

Why would I keep paying my mortgage
Price drop ?
Hey I don’t have ,won the lottery!
Still have my 70acres
Sold the other ,I think angels helped me out
Wow I shure have a lot more friends now , feeling g!
Tell them all nope money’s all invested agressive freinds ,sucking on mommas milk, I got of that at the age of10 , since then there ain’t a rock unturned within 300 k m,happy me,and my family, I’m out west, and I’m not don d west, f I would just s my self if I were he he!

#54 Paul on 02.16.14 at 9:08 pm

#41 Steven on 02.16.14 at 8:10 pm

I have bad news for realtors sales are not down because of the weather. Sales are down because the product being sold is too expensive relative to a man’s earnings for 3 years or less. You people and your greed have gone too far
———————————————————-
When are YOU people going to get it it’s not agents it’s those people that own the houses and them people at the bank that give most people money that they should not be able to borrow and give it at 2.99%

#55 Smoking Man on 02.16.14 at 9:12 pm

The Twilight zone of a smoken life, last week I sort of got busted, an un deleted negotiation between me and a short term rental, a poor excuse, all is fine.

Wtf. So last night wify poo, lends her ear and heart to her new buddy, she lost her husband few years ago, tells my wife she can never have another relationship with another man, but she misses the oh ah…. Would like to pick someone up for 20 Min…

My wife having a heart of gold, offers me up to her new pal.

I was floored, she was pretty hot….

I said, no, I’m a woman man….

The Art of Lying………

Make a good book title..

#56 45north on 02.16.14 at 9:13 pm

In January sales dropped about 4% in both the GTA and the Lower Mainland,

the key word being January. The expectation is that sales start going up now. May sales should be double January sales.

omg Plus of course our governments will be falling over themselves to rescue the poor suckers that are under water on their mortgages.

babblemaster There is no real danger of the government doing anything to seriously threaten the housing market, especially not raising rates. If anything, they’ll do everything they can to rescue the housing market if it ever really does start to tank. Look at the insane things they did in the US to revive the housing market.

there was nothing in the federal budget about new housing initiatives. Talk about expectation, there is huge expectation that the federal government will act decisively to prop up housing. Maybe not.

#57 MrHulot on 02.16.14 at 9:18 pm

As I sit here on a gloomy, rainy Vancouver day, it somehow feels like the calm before the RE storm.

#58 Artful on 02.16.14 at 9:24 pm

My experience with condo’s is that special assessments
will surprise new ‘owners’. Can you afford a $60,000 bill for the replacement of this or that system after a few years time?
Would never buy a condo or any of the garbage being built these days.
Regards. Been there.

#59 Smoking Man on 02.16.14 at 9:31 pm

On the trip to Yuma, I’m dropping wifey poo in Vegas with her sister.

I kind of hope she meets the old spice man, look at him look at me. Why not, she’s fifty, the green leaf about to turn brown.

She’s a damn good woman. One man her whole life, all our look is because of her, I mean I’m the one with the crazy hair brain and ideas, put she’s the one the believes in me, while I shit my paints every time I go all in.. She’s the one that says, go for it….

It is impossible for her the catch up, but hell, life’s to short, she’s been good to me, what happens in Vegas stays in Vegas.

On hour with the old spice man, how could I blame her.

#60 Son of Ponzi on 02.16.14 at 9:32 pm

# 21 Mike

Does anyone know why the number of listings has declined in recent months? Is this typical for a housing market about to correct?
——————–
Yes it is, Realtor Mike

#61 Vangrrl on 02.16.14 at 9:33 pm

Riiight, blame it on the weather. We’ve had the sunniest, driest autumn and winter in the 13 yrs I’ve lived here. Maybe Vancouverites are freaked and stay home when it’s not raining?

#62 DW on 02.16.14 at 9:39 pm

It is starting to feel like we are reaching the tipping point in RE.

All the pumpers are working overtime to keep the momentum going, but you can only flog a dead horse for so long.

This will be an interesting year!

#63 Andrew on 02.16.14 at 9:41 pm

One of the more absurd statistics: in the Montreal area slightly fewer people live in single family houses than in the Vancouver area, and the GTA is quite a bit higher than both. (Look at Statistics Canada). Of course Vancouver and Toronto both have greenbelts and Montreal does not which pushes up prices, but Vancouver and Toronto have much higher prices than Montreal. There is somewhat of a shortage of houses in Vancouver but there is no way that you can justify paying $500,000 for a house in Surrey. My guess is a huge percentage of people in the Vancouver area could never afford the houses they live in at current outrageous prices.

#64 PJ on 02.16.14 at 9:44 pm

Excellent post tonight Garth. But please, an assessment of the real estate in the City of Ottawa and the surroundings would come in handy.

Cheers,
PJ

#65 Realtor # 1 GTA on 02.16.14 at 9:46 pm

Sales are down but so are listing ( you people wishing of a crash just can’t win can you)

It’s all relative Garth. Low inventory, low rates, are holding prices up.

Maybe next year

#66 Hillbilly on 02.16.14 at 9:46 pm

The driving force behind all RE market price bubbles everywhere is access to credit, not low interest rates.

If this were not the case, how would RE bubbles in the past have occurred, for instance, in the late 70’s and late 80’s in Toronto when interest rates were much higher?

The US, Spain, Ireland, Denmark, Netherlands etc. created their RE bubbles at much higher interest rates than prevail now and in fact those bubbles burst DESPITE interest rates being LOWERED substantially as those bubbles burst and deflated.

Genworth has about $ 30 billion left before hitting their lending cap ($ 350 billion ) and CMHC, from what I can gather has about $ 25 billion before they hit their cap ( $ 600 billion).

Both are dynamic caps which means as mortgages outstanding retire their principal through making payments, the amount that they reduce their outstanding principal amount by allows an equal amount to be lent out anew.

Lots of “headroom” ( about $ 55 billion total) before lending caps start to restrict credit to the housing market.
Also, who says they can’t raise the lending caps again?

Nah, not in the politicians’ ( 70 % of voters own homes) nor the economy’s ( RE matrix is 25 % of the economy) interest to let this RE market fall apart.

The government and banks in Canada will try everything they can to forestall any meaningful correction in the general price level of housing.

Doesn’t mean they will succeed, just expect extraordinary measures should they be required to intervene.
I guess we’ll see if they can overcome the market forces.

#67 out of work realtors on 02.16.14 at 9:49 pm

Many realtors who had the good life of no work for money are going back to the workforce as sales are slim and the many realtors are starving. Why else would out of work realtors be on garth’s blog ? CREA is to funny comparing the revised numbers of last Year to the inflated numbers this year and sales are still down….. lol. Yeah the market is strong and correcting as we speak. See you 25% cheaper in two to three years

#68 Realtor # 1 GTA on 02.16.14 at 9:51 pm

What if I read this blog in 2010 and believed it was correct and thus tell my clients “don’t buy it’s overvalued”
Four years later – what would I tell them???
Sorry I told you to wait and now your priced out.

Do you advise them today to buy, or be cautious? — Garth

#69 Carpicker on 02.16.14 at 9:51 pm

http://www.zerohedge.com/news/2014-02-16/money-launderer-until-proven-innocent-italy-imposes-20-tax-withholding-all-inbound-m

“Money Launderer Until Proven Innocent” – who is next!!!!

#70 Nemesis on 02.16.14 at 9:52 pm

@Bill/#120″HowToUnivest”

As regards your, “PorterHouse Blue” query… sadly, no – I haven’t read that just yet. I’ll definitely get around to it at some point, though [after sufficiently bracing myself to wrestle the ontological illusions of youth. It’s fun walking on their grass, you know – especially when one is inappropriately dressed].

[NoteToSmokingMan: So… TrueDetectives soundtracks, eh? Better try this one, too: http://youtu.be/aIBXwnV1mb8 ]

#71 Cowpoke on 02.16.14 at 9:56 pm

Take the last 10 year highs in real estate, delete the highest and lowest number and divide by 8 = ?

And the average is…

Somebody want to supply the number…?

Provincially and nationally?

#72 Van Isle Renter on 02.16.14 at 10:06 pm

#21 Mike on 02.16.14 at 5:43 pm
Does anyone know why the number of listings has declined in recent months? Is this typical for a housing market about to correct?
+++++++++++++++++++++++++++++++++++

Excellent question. I just spent a few hours reading up on the behavior of market bubbles. In some cases, when there is a large disconnect (asymmetry to the nerds out there) in market information a bubble peaks and explodes.

In the RE market the sellers refuse to list (or re-list) the house as their price expectations touted by the the “information” delivered by the realtors/media are not borne out by real offers. This causes fewer people to re-list as they demand or “need” more (greed/fear) and perceive that they can wait it out. Disastrously for them though, they are basing their actions on flawed information.

Oddly enough, many people in this situation actually know that the bubble has likely burst, but they still think that they know more than anyone else, so they hang on. Once the information becomes “common knowledge” ie. the seller finally wakes up and realizes that EVERYBODY knows the bubble has burst, the stampede for the exits starts.

I believe that CREA policies are actually going to be the ultimate cause of the bubble to explode as the mismatch of information is growing too great to ignore.

Interestingly, in the US, the subprime mortgages are often blamed for blowing up their housing market, yet they comprised less than 4% of the overall market. What really blew it all up was when the information finally sank in that prices were not going to keep going up forever.

Information balanced restored, bubble explodes.

#73 Furio on 02.16.14 at 10:11 pm

Come on, Garth…. Sales are down in Toronto because listings are down. And that is why there are some many multiple offer bidding wars. And that is why prices keep going up.

If listings go up, sales will go up. The demand is out there. As a buyer, I know first hand.

Lots of inventory at the top and bottom of the market, and no bidding wars. You guys in the middle are in trouble. — Garth

#74 Aggregator on 02.16.14 at 10:19 pm

Bloomberg Video: Japan `Hottest' Property Market in Asia: Ludeman

(Cue to 4:30 about Canada)

Chris Ludeman, president of capital markets at CBRE Group Inc.

The Canadian market has been so active in the last three years and while we expected a bit of a slow down, and we did see that in parts of 2013, with the uptick in their ten year treasury, that activity level seemed to have returned in Canada, and we would see that market remaining good. There are still large outflows of Canadian capital into other parts of the world, and as that currency shrinks against the US dollar, we would expect, actually, more inbound currency into Canada from other places where Canadian capital has been so competitive at keeping others out for a long long time.

There you have it. Canadian homes are now on sale and trading at a 10% discount against RMB banknotes. This is a big change from previous times as CAD assets being viewed at a discount implies that Canadian home prices may never decline in nominal terms as foreigners snap up properties on sale, but more importantly, it also implies that the new objective for wealthly Canadians is to get their assets out of Canada, hence the outflows of Canadian capital (the smart money), as more dumb money moves in.

#75 tiger on 02.16.14 at 10:30 pm

68 real tard!
Do the math I won’t ask if y are stupid ,I’ll just tell ya
Hortons won’t even hire you,you know 180 they give you a toonie how much change do ya give em!
I guess those were your best freinds, you helped out
Where do you live , I can help u out ,

#76 tiger on 02.16.14 at 10:44 pm

DELETED

#77 Mr. Monday Night on 02.16.14 at 10:45 pm

#36 tiger on 02.16.14 at 7:35 pm

“ignorance I do know as well as assumtion= fail”

———————————-

I know of another ignorant fail(ure).

Your numerous, rambling, nonsensical posts from tonight.

#78 Smoking Man on 02.16.14 at 10:53 pm

#70 Nemesis on 02.16.14 at 9:52 pm

Not even close, but then again I got no skin in the game on that one.

Oh the question?

Yuma baby. Pics on my blog, the big adventure….

#79 tiger on 02.16.14 at 11:02 pm

DELETED

#80 Seth on 02.16.14 at 11:02 pm

“Rising prices on declining volume and low supply underscore buyer emotion, not logic.”

Great article Garth – thank you. Your conclusion with this sentence however seems backward to me. Wouldn’t decreasing supply naturally lead to declining sales volume, which would typically lead to rising prices as buyers compete for lesser amounts of inventory?

I said declining volume and low supply. — Garth

#81 bill on 02.16.14 at 11:16 pm

#70 Nemesis on 02.16.14 at 9:52 pm
by all means check out tom sharpe.
while you can dive in anywhere I would suggest ‘riotous assembly’ and ‘ indecent exposure’ are worthy reads as well. especially if you like six barreled elephant guns.
its a romance…

#82 Relocated Aussie on 02.16.14 at 11:23 pm

Hoping price reality finally hits the idiots putting their houses on the market. After looking at a house listed at 425K in terrible condition and my agent saying that if he were to list it the price would be 299K, I am wondering how long it will take before the idiot owner finally brings the price down to a level where people will actually put in an offer. I would buy it if there was a major price drop as I would do the renovations myself and save a lot of money, as well as finally having a place that exactly fits my criteria with a large detached heated shop.

#83 bill ridell on 02.16.14 at 11:29 pm

Hi Garth I don,t know where you get your info from but here in Toronto the market is still hot and prices are still going up . The only way this will stop is if rates go up but instead they just went down and if unemployment increases but instead it just lowered . Open your eye!

#84 Son of Ponzi on 02.16.14 at 11:29 pm

Obama kicks the can down to March 15, 2015.
Mark this date down as the day of reckoning.

#85 Slow and Steady on 02.16.14 at 11:33 pm

Garth – great article. Thank you. Would be curious to hear your thoughts on multi-tenant investment opportunities in GTA, and how you think this impending correction is going to play out there? Thanks in advance!

#86 DR on 02.16.14 at 11:37 pm

73 Furio on 02.16.14 at 10:11 pm
Come on, Garth…. Sales are down in Toronto because listings are down. And that is why there are some many multiple offer bidding wars. And that is why prices keep going up.

If listings go up, sales will go up. The demand is out there. As a buyer, I know first hand.

I know exactly what you are saying. Really interesting to see what people write here
And if people are waiting for a crash…will they buy? Are they going to time the bottom…or

#87 Smoking Man on 02.16.14 at 11:39 pm

The machine has made great in roads, he’s cut your man’s tax farm loot into two, you got work batch just to be even with a 50s man. But then you are happy your Co working men proudly share shopping stories of shopping purses.

Not realizing, your man makes moves based on the advice given to him buy his little brain. We all have a pet name for it.

Mines called Ralphie. It has teeth, raybands, and smokes. It has no moral compass.

It points and goes thank you boss

#88 Mark on 02.16.14 at 11:57 pm

“There are about 1.3 millionaires in China. That makes 46,000 applicants about 3.6% of total millionaires. You could toss all those applicants and still fill 46,000 positions in no time.

If want a good measure for HAM coming abroad, that would be the SHIBOR overnight rate. Every time that rate spikes (cash crunch), you can be sure developers and red nobles are fleeing into safe assets abroad.

Everyone has it backwards. The government didn’t terminate IIP for stop foreign inflows, rather to prepare for more.

Very little evidence that there is “HAM” of any level of significance in Canada. And every time interest rates in China rise, those “millionaires” positions are further devalued. Especially since many of them are only “millionaires” due to the heavy reliance on short-term credit. The developers, those people are heavily underwater on their domestic (Chinese) ownership of RE and most certainly are in no position to purchase more.

Its rather, ummm, insulting, to suggest that Chinese wealthy would flee to Vancouver or Toronto RE in significant numbers. They didn’t get to be wealthy by throwing their money away, that’s for sure.

#89 Mark on 02.17.14 at 12:01 am

“There you have it. Canadian homes are now on sale and trading at a 10% discount against RMB banknotes. This is a big change from previous times as CAD assets being viewed at a discount implies that Canadian home prices may never decline in nominal terms as foreigners snap up properties on sale, but more importantly, it also implies that the new objective for wealthly Canadians is to get their assets out of Canada, hence the outflows of Canadian capital (the smart money), as more dumb money moves in.”

Did you even read the quote? Your interpretation is completely off the mark. It is Canadians who are acquiring foreign assets on a net basis overseas. Not “HAM” coming to Canada and acquiring our assets. Its Canadian money that’s keeping Canadian RE high. And if you follow the Canadian dollar, the weakness is likely to be quite temporary, especially now that oil and gold have ramped back up.

Wealthy Canadians are still buying more Canadian assets, but they’re increasingly going overseas to pick up many bargains that are in distress. A trend which is likely to continue.

#90 God on 02.17.14 at 12:48 am

#68 Realtor #1 GTA
I’m sick of this argument from cement heads like you. Garth was right in 2010 and he is right now. Nobody knows where the top is any more than they know where the bottom is. What I took away from what Garth said back in 2010 was don’t put all your For Sale signs in one volatile asset and to be careful because the real estate market has become a time bomb based on the economic variables at play, as is the case today. Nobody, including God, could have foreseen how out of control this bubble would get.
I know everyone has to make a living but Realtor #1, you’re walking your clients down the path to a casino and sitting them down at a roulette table. Yes, they may get lucky with a few more spins but for the vast majority of the gamblers they are going to stay too long and we all know how that ends. But hey keep selling the dream. I bet you still believe in the Tooth Fairy too.

#91 Panhead on 02.17.14 at 12:58 am

Any day now out here on the west coast “for sale” signs are going to start sprouting like the early crocuses … another spring season. See what happens this year… maybe … just maybe …

#92 Happy Renting on 02.17.14 at 1:10 am

#17 happy renter on 02.16.14 at 5:26 pm

Happy Renter: I picked my nickname on a whim and I know you’ve been posting here longer. Would you like me to switch to something else? I hear Blog Dog Poloz is reserved, but maybe Gee I Seer is still free… ;) (Whoever periodically posts that list, hilarious!)

#93 Hungry realtor on 02.17.14 at 1:29 am

You idiot blog dogs better get used to being in a recession. If the house of cards RE bubble pops the GTA/Canada will be in a world of hurt. Yes , stupid dogs everyone knows housing in the GTA is overvalued by 25% or more but if the bubble pops unemployment would be even worse then it is now. Some of you will argue that the housing bubble is killing the economy and while that maybe true the housing bubble is employing more people then manufacturing.

#94 Happy Renting on 02.17.14 at 1:31 am

#10 Christopher Lackey on 02.16.14 at 5:00 pm

Depending on the date range quoted, I’m either among the youngest Gen X or the oldest Millennials. I’d rather be counted as Gen X, I feel I have little in common with the younger Millennials, whose traits and dire straits are used to define the whole cohort. The younger ones are either too starving poor or too inexperienced to realize there’s more to life than consumption, and the clock is going to run down faster than one would think. You only have so much time (and for many, a job is just trading your time for money), so spend it on what matters most (probably not a teeny, overpriced skybox.)

#95 Hungry realtor on 02.17.14 at 1:32 am

Realtor # 1 GTA

I understand you are financially hurting and will continue to suffer hardship. You know it and I know it but these blog dogs don’t understand what it will do to the economy if the RE house of cards crumbles.

#96 jeff on 02.17.14 at 1:45 am

omg on 02.16.14 at 5:36 pm
When the market finally craters, I know we are going to hear all kinds of tough luck stories about those that were suckered into paying 10s of thousands and even 100s of thousands over the intrinsic value of their house.

But seriously, when houses are 3, 5 and 8 times historic price to income multiples, then houses have become an investment decision. (Remember when a house was just a place to live and if it went up 2-3% a year you were happy).

For those that did not think it through as an investment decision and get stung big time, sorry you are on your own. Nobody is there to bail out the private investor when he makes a mistake on an equity and so it should be for RE bought over the past few bubbly years.

The unfortunately thing is, its going to take the entire Canadian economy down with it. We could be in for several years of slower growth because of it.

Plus of course our governments will be falling over themselves to rescue the poor suckers that are under water on their mortgages. So all us responsible suckers will end up paying higher taxes.
____________________________________________

realtors/mortgage brokers/government are some of the most dishonest and worthlsss people the world has ever seen. A realtor is worth no more then $500 for a sale. Yes $500 for a useless realtor is to much money. $10 an hour X 50 hours of work (what work?) = $500 . A mortgage broker should make $10 an hour as well . Most of these people do not even have high school. It is true

#97 Kilt on 02.17.14 at 2:05 am

Probably be another stellar spring market. Still no supply on the west coast. Wish we had a an excess supply of condos here.

Kilt

#98 Oceanside on 02.17.14 at 2:52 am

#41 Steven on 02.16.14 at 8:10 pm
I have bad news for realtors sales are not down because of the weather. Sales are down because the product being sold is too expensive relative to a man’s earnings for 3 years or less. You people and your greed have gone too far.
_____________________________________________

Its not the realtors that are setting the prices,MSM like Global TV and the banks that are willing to lend borrowers with questionable abilities to pay that are the root cause. Most of the realtors in my area would be only too glad to get the gasbag popped and have lots of non drama sales at boring prices……Maybe people can get back to talking about sports, cars and the environment….Far more interesting than “great rooms” and “stainless granite”…………

#99 John Prine on 02.17.14 at 2:55 am

#68 Realtor # 1 GTA on 02.16.14 at 9:51 pm
What if I read this blog in 2010 and believed it was correct and thus tell my clients “don’t buy it’s overvalued”
Four years later – what would I tell them???
Sorry I told you to wait and now your priced out.
*********************************************

How many realtors do we know that have sold and are now renting?

#100 Mike in Germany on 02.17.14 at 3:29 am

#8 Rock

“Garth, you are a machine. I don’t know how you can write such a concise and sober post after a morning of epic hockey. ”

If Garth wrote a book on time management, I’d buy it.

Broken leg didn’t even slow him down, biggest concern seemed to be getting on his Harley in time for riding season.

Maybe I should get back on my bike.

#101 Tony on 02.17.14 at 5:23 am

Re: #18 An old babe in White Rock on 02.16.14 at 5:26 pm

Your mindset is all wrong, just think about all the people in White Rock that will lose their shirt when the prices collapse.

#102 Devore on 02.17.14 at 6:52 am

#16 World According To Garth

Bitcoin is 1. And bitcoin is NOT 2. Think I’ll try a small portion of our diversifed capital and see where we go.

While you’re there, also pick up some Litecoins, a couple of MaxCoins, and a bunch of DogeCoins for good measure.

Because, you know, you want to diversify your capital.

“Doge” is an internet joke, by the way. Really.

#103 World Traveller on 02.17.14 at 6:56 am

#10 Christopher Lackey on 02.16.14 at 5:00 pm
In your Globe and Mail this weekend, the inside story on Core Condos, the downtown 24 story development which sold out in one weekend. “There’s so many people moving to Toronto” it said “Young professionals are snapping these things up”.

http://www.theglobeandmail.com/report-on-business/economy/housing/aggressive-development-the-building-and-selling-of-a-toronto-condo-tower/article16910442/

This article really makes me angry, talk about misleading!

#104 Steve French on 02.17.14 at 7:39 am

Smoking Man Yuma was a rebel,
he roamed through the West.

He got fightin’ mad
This Smokin’ lad
He packed no star
As he wandered far
Where the only law
Was a hook and a draw
The rebel, Smoking Man

He searched the land
This Smokin’ lad
He was panther quick
And leather tough
If he figured that
He’d been pushed enough
The rebel, Smoking Man

http://www.youtube.com/watch?v=ZGUOSz-rTn4

#105 Obvious Truth on 02.17.14 at 8:17 am

#72 pretty much hits the nail on the head as far as I can see.

Corrections are usually fun for me to predict or watch. Not this one though. I never care if I’m on the other side of all the major banks or analysts. This one is on the other side of a majority of Canadians.

On an aside. Does anyone know of a TBT like product in canada.

#106 Bottoms_Up on 02.17.14 at 9:11 am

#68 Realtor # 1 GTA on 02.16.14 at 9:51 pm
———————————————–
Have you ever stopped to consider the implications of the words “priced out”??

What that implies is that people that use to be able to afford a certain house size/location/life style can no longer do so.

It is a self-limiting postulation that is a pure sign of a housing market that has got out of control.

Housing needs to be affordable to people or they won’t (or can’t) buy it. And there’s a limit to the sacrifices people will make in order to buy a place (i.e. a married couple, top surgeon and lawyer, buying a shoddy town in a shady part of town cause that’s all they can afford).

So next time you use the words “priced out forever” stop to think of what you are implying and what that truly means for the housing market.

#107 Realtor # 1 GTA on 02.17.14 at 9:13 am

Freehold home prices have risen in upwards of 25% since 2010. You can’t save fast enough to keep up with the increase.
Why wait five years to buy the same home at the same price?
You are right you don’t know where the top is or where
The bottom. Couples don’t want to wait over five years.
Don’t try to time the market, how has that worked out for you?

#108 Spaccone on 02.17.14 at 10:11 am

#10 Christopher Lackey on 02.16.14 at 5:00 pm

This was me up until a couple of years ago. Sold my place and travel a little now but still more than the average (Garth can probably see my IP in another part of the hemisphere). Even having been born and raised in Toronto, travelling to PIIGS areas or even countries with shaky regimes, I look at the local’s lives and I feel that after doing the rat race I’ve missed out on a lot, am missing out on a lot, and would miss out on a lot continuing to live in a comatose GTA suburb.

#109 Penny Henny on 02.17.14 at 10:22 am

Fewer people buying while listings are near historic lows.
Hmmmmm. Maybe there is f-all to buy. Only crap.
Garth why do you try to show this as a demand problem when quite obviously it is a supply problem. Can you say draaaama.

Lets see what happens if the snow ever melts.

#110 the jaguar on 02.17.14 at 10:25 am

Some who post on this blog are very disrespectful.
Realtors are just selling a product to willing buyers. No different than anything else. They rely on the stats they are provided by their local real estate boards. In the final analysis it’s the fools who step up, take the financing they can’t/won’t be able to afford when interest rates go up and do so because they feel they are ‘entitled’ to granite countertops. That sense of entitlement is pervasive in our society these days. When the reckoning comes their shock and silence will be deafening.

#111 Hold on Dope on 02.17.14 at 10:27 am

#72 nails it. The consumer has incorrect market information AND is getting played by a corrupt industry enabled by the banks, who just want your half-million-per-condo locked in for life.

As an American in Toronto since 2009, the US crash is still fresh. We had the Bush “Ownership Society.” Who do you think pumped up your markets? Flaherty, and Carney. Canada has subprime – US never had 0% down on a 40 year or even your 2.5% mortgage rates.

Real estate conversations are (or were) exactly the same as California in 2007. Or Ireland or Spain. I’ve been renting and will continue to rent, as the illusion of “buying” any property of lasting financial value in Canada is absurd. The whole bidding war thing is crazy – I have not experienced that in the US (maybe in San Fran in 1999 & perhaps its worse in the big cities by now, there is a new inexperienced generation of house hornies). Usually we just wait for a better deal. Except perhaps the stock (and people) are more mobile in the US, so there always is another house, somewhere.

Whenever I get tempted to “own” in my adopted hometown of TO, I remember I can “actually buy” 3000 sf contemporary home with 5 acres in a low tax state for about $300K right now.

#112 Dual Citizen in Canada on 02.17.14 at 10:34 am

I see a lot of posts about people losing their shirts when RE collapses but the reality is noone will be affected until they are unable to make their monthly payments. So they will be a prisoner to their jobs or location. If you sell, you lose. When interest rates go up, make sure you can make your payments. Thanks to the banks economic enslavement is here.

#113 Van Isle Renter on 02.17.14 at 10:42 am

One other item as to how a disconnect in information causes a bubble to explode: It also works on the buy side. Buyers with incomplete or wrong information make crappy decisions and keep buying while others have started to leave the building. They only stop buying when they realize what everyone else knows.

This disconnect leads to a last flurry of panic buying as the last few buyers try to not “miss the bus” and pay anything they can get their hands on, because they have bad information from CREA and their realtor.

At the same time sellers refuse to re-list, seeing that the prices that the CREA claims are being paid don’t match the offers that came in on their houses. Supply dries up.

This explains why you rising prices on very thin volume just before the crash.

#114 Penny Henny on 02.17.14 at 10:44 am

Okay. Fewer houses are available for sale.
That must mean fewer people are selling or moving, agreed. One reason many people move is because their needs have changed (need more room, etc), also many people move because they wish to upgrade their home. But what you haven’t factored for was less people are moving because the costs are so prohibitive.

For example. Let’s say you wanted to upgrade from your $600,000 Toronto starter home or Etobicoke bungalow to a $750,000 step up.
Costs include-
-5% real estate fee, $30,000
-hst on real estate fees $3,900
-dual land transfer tax of $30,000 on the $750,000 upgrade
-lawyer fee, title insurance, movers etc another $6,000

That’s $70,000 lost, gone, finitio.
Many people are deciding to spend that $70,000 on upgrades to their home rather than spending it on MOVING FEES. Who can blame them.

#115 TurnerNation on 02.17.14 at 11:00 am

Water cooler talk: someone bought an tiny ‘investment’ condo in the glutted area at foot of Bathurst St. Was rented for one year, now, no longer.
Of course they own a 905 McMansion, cars, a new baby.
Cash flow h-ll.

As mentioned my rent this year goes up $20/month. Yawn. Building owned by a REIT. They are presently renovating the hallways (only 8-10 yr old building!) with new wallpaper and paint and already completed the main floor/lobby & party room. Brand new BBQs too. Nice.

#116 Realtor # ZERO on 02.17.14 at 11:12 am

Typical realtor response… prices up 25% since 2010 , this is the new normal , price gains of about 8% every year, why wait to buy? LOL

And he said…”You can’t save fast enough to keep up with the increase.”

And you think that is normal? This is why the market will have a nasty correction of at least 20% or more. When Canadian couples with good jobs making $150k combined CANT AFFORD A DETACHED PROPERTY IN TORONTO, the market is overpriced… do you understand that Realtor # ZERO?

#117 };-) aka Devil's Advocate on 02.17.14 at 11:29 am

Well I don’t know about the rest of the country but here in Kelowna numbers are up, WAY UP. Actually my sources in Van say it’s up there too. Edmonton and Calgary as well but they never did fall quite like other parts.

No more low-ball offers. Buyers are jumping off the fence serious about buying and making reasonable offers. As they do prices hold and then modestly uptick causing more buyers to get in before rising prices. And then prices really start to crank and buyers panic. When that happens… and it feels like that is about to happen. We are busy… way busier than we’ve been in a long time… almost too busy.

Inventory is down to six months (that illusive “balanced market” which is merely a transition from one to another – in this case from Buyer’s Market to…

SHIFT happens, always has, always will… well for as long as we adhere to this economic model.

But what do I know, I’m just stoppin’ by to flog my wares };-)

#118 airhead princess on 02.17.14 at 11:35 am

I wonder if the cat food has become so expensive that granny will fry up little pus instead. Real inflation is rampant…yet government insists there is none..

http://www.cbsnews.com/news/food-prices-soar-as-incomes-stand-still/

No media to publish facts in Canada….but with the dollars collapse ( made in Canada by the BOC and his Ontario union ‘export’ buddies) I have to extrapolate groceries, clothing, consumer goods, necessities are shooting up as well as we pay for everything wholesale ( from gas to lettuce) in USD. Any Canookle heads noticing the pain? I bet a lot of condo mortgage holders are eating worse than ever….eh? Oh mommy daddy me so hungry…….whahhhhhh .

#119 Aggregator on 02.17.14 at 11:44 am

#72 Van Isle Renter #21 Mike

Does anyone know why the number of listings has declined in recent months?

Does anyone know that up to 30% of residential listings and transactions may not be counted on MLS, as noted in a report titled Developing a Residential Property Price Index (RPPI) for Canada: Approach, Risks and Challenges

The geographical coverage of the MLS data, although extensive, is skewed towards mostly major metropolitan areas. CREA has already stated its intention to negotiate with additional real estate boards to join the MLS-HPI project. Another limitation of this approach is , the absence of data on private transactions, that is, properties marketed outside the MLS system. Venues [FSBOs] available for private transactions have increased in importance in recent years, currently accounting for anywhere between 10% and 30% of the total residential properties sold in Canada.

Does asymmetric information affect home prices? It could as some studies suggest (I believe to a certain degree), however, there is nothing more determinant and common amongst every housing bubble then government policies (immigration, restrictive land policies, etc.), development subsidies and taxpayer-backed insurance.

In a nutshell, the main reason why home prices have risen to bubble price levels is because the government guarantees your money (the homeowner or renter) will back lenders' household loans, of which now stands at a staggering $1.3 trillion dollars. Lenders would have never given so many mortgages with shareholders' money if it wasn't guaranteed. Period.

Not only does the government guarantee mortgage loans, but also property ownership. Many aren't even aware that CMHC is a custodian on behalf of investors, meaning, CMHC has a fiduciary duty to act in their interest and secure/transfer all property titles into an investor holding vehicle. This was to add another layer of safety for MBS products and bonds so that lenders and the federal government could borrow at cheaper rates. That title insurance (not an affidavit) you purchased is a bunch of bullshit, because if this market heads south and your home happens to be bundled in a XYZ mortgage bond or security, your home is already owned by somebody else.

Most people can't comprehend the scale, size and role of government in housing because they tend focus on the active market (micro data) as opposed to aggregated or outstanding market (macro data). Chart

It's all in the governments hands. They created it, and now have to decide how to deal with it.

#120 Nemesis on 02.17.14 at 11:44 am

Oh yes, as regards “ComingClean”?… something TooToo, “soiled[?]”, not to share here with SaltyDogz, now.

But first, some slogans:

Whisk™: “Ring around the Collar!”

Tide™: “My kind of Clean!”

Gain™: “To smell it is to love it!”

and a riddle:

What looks like a Gentlemen’s PrivateClub but functions like a MayTag™?…

[Tyee] – BC Gov’t’s New Multicultural Advisor Was Harper Tories’ Ethnic Vote Getter: Khangsar helped launch troubled, Conservative-backed Canada Korea Foundation.

…”A 14-day trial is scheduled to begin April 22.”

http://www.thetyee.ca/News/2014/02/17/Harper-BC-Multicultural-Advisor/

#121 the_previous_post on 02.17.14 at 11:45 am

Interesting NYT article especially in the context of the previous post…

http://www.nytimes.com/2014/02/16/your-money/an-about-face-for-the-stock-markets-5-year-return.html

#122 Aggregator on 02.17.14 at 11:59 am

Chart correction for post #119: CMHC and Genworth Total IIF and GIF

I'll have my morning coffee now.

#123 DocInWaitingRoom on 02.17.14 at 12:03 pm

Homes are not stocks. Low exchange rates, low volumes comparatively. Waiting for home values to drop is like watching a slug run a marathon.
We can come here daily for the next 5 years and we may still be talking about the same slug.

However it will happen like it or not. Demographics like Japan only with a massive credit bubble and the lowest interest rates added on top. Add burdened under employed youth demographic, and you have a long term ie 30 year down slide in demand/prices. Add in higher interest rates onto mortgages and lines of credit, with lower job potential due to technological advances and it will be nice to take out some cash from investments and buy these renovated buildings for some chump change in a decade or two here, in Australia and all the bubble markets.

#124 DR on 02.17.14 at 12:20 pm

Interestingly, in the US, the subprime mortgages are often blamed for blowing up their housing market, yet they comprised less than 4% of the overall market

pretty sure that’s the number in Canada.
The number of uninsured in the States was more like 34%. Do you have a source?

#125 };-) aka Devil's Advocate on 02.17.14 at 12:21 pm

”It’s all in the governments hands. They created it, and now have to decide how to deal with it.” – Nemesis @ #120

You got it Nemesis. As long as we adhere to this particular socio-economic paradigm government, or they who control the government, will apply Band-Aid after Band-Aid to keep the status quo and the economy chugging along. Not going to change in your or my life time, or anyone reading this blog, or their son’s and daughter’s.

This economy needs growth to survive – that means rising prices on all fronts.

Ya, we know it’s unsustainable and it is not a matter of “if” but “when” it will fail. It (this economic model) will fail and there isn’t a thing we can do about it but prepare for that inevitability which we will bestow upon our heirs. When it does break we won’t replace it with something worse but something better; something better that we are already working toward. It’ll be a good thing ;-)

For now though the reality is SHIFT is happening as it always has and always will as long as we adhere to THIS economic model. So take advantage of the foresight. What foresight? Well, think where we were. Now think where we must be headed…

#126 Chris on 02.17.14 at 12:25 pm

#114 gets it. At least that is the reality in downtown Toronto. Why would anyone sell their home when there is nowhere to go? Why do people think that people will try to bail out of the market if it shrinks? Why would they do that? And go where? I think some people actually believe that people in Toronto buy a home as an investment. I have never met one person, not one, who buys a home as an investment. Not one. Not one. Not one. They buy them to live in and raise a family.

#127 Aggregator on 02.17.14 at 12:30 pm

#117 };-) aka Devil's Advocate

SHIFT happens, always has, always will…

Yes it does, and no where is that more evident then what happened to Spain's ten year yield when the bond market realized they were lending to Spainards and not Germans, the same way the bond market faithfully lends to Canadians as if they were Americans. Chart

Until they realize Canadians are not Americans. Then SHIFT happens.

#128 Linda Mulligan on 02.17.14 at 12:32 pm

#34 Rexx Rock – your post illustrates what the main problem really is – people want their goodies ‘now’ & won’t wait for when they can actually afford it. This is not meant to be judgmental by any means, but bottom line is that 75-80 percent of people will take on debt they can not afford because they want their goodie ‘now’. If the economy & thus their income stream goes ‘poof’ for whatever reason, they get to lose their new goodies & all their old goodies too. Lots of pain but despite it as soon as the cycle reverses they go out & repeat the exact same behavior, no lesson learned. I recall the economy crash in Alberta in the 80’s, spawned a bumper sticker ‘Please God, let there be another boom – I promise not to piss it away next time’. Easy promise to make, not at all easy to keep it seems…..
As for government bailing out market should the bubble burst, that would be the most reluctant bailout ever IF it occurred at all, because the current government wants balanced books for the next election, come hell or high water. So if the bubble bursts I predict they’d only bail out if they truly thought Canadian economy was toast otherwise & they’d have to have some pretty convincing evidence of that. Which might mean too little, too late so the crisis would take years to recover from. So while I feel for those who might lose it all, have to say the responsibility rests squarely on their shoulders, especially if they know basic math & know that one bad patch of luck (like losing their job) could cause the whole house of cards to fall down, pun not intended but appropriate.

#129 Rainclouds on 02.17.14 at 12:35 pm

#117 Devils Advocate
“Actually my sources in Van say it’s up there too”

Maybe get better sources………yours suck.
Facts Please.

Here’s mine
http://vancouverpricedrop.wordpress.com/

Your comments are helpful in perpetuating the strongly held belief that SOME Sales people are moronic gadflys.

#130 Form Man on 02.17.14 at 12:39 pm

#117 DA

MOI is at 15 months according to OMREB. You are spewing nonsense.

Tax assesments show Kelowna’s home prices have been falling steadily since they peaked in 2008. Until MOI drops below 6, there is no chance of prices rising………

#131 DR on 02.17.14 at 12:54 pm

Lack of inventory means fewer sales.

Ok so fewer people paying “crazy” amounts of money for a house.

What is the concern again??
How many Galley type sales have there been. 1000’s??? nope just one. So if anyone should be worried its the Galley buyer.

Not every single house on that street.

#132 Tiger on 02.17.14 at 12:56 pm

78 Monday nite!
Can you spell gelious!

#133 foolsandtheirmoney on 02.17.14 at 1:01 pm

“As they do prices hold and then modestly uptick causing more buyers to get in before rising prices. And then prices really start to crank and buyers panic.”

Is this really a thing?
Sometimes I feel disconnected from the rest of society.
Why would I rush to overpay for something that a friend had just overpaid for?

“Did you hear house prices were rising?”
“Wow, I must rush and buy one!”
/facepalm

#134 Bottoms_Up on 02.17.14 at 1:21 pm

#123 DocInWaitingRoom on 02.17.14 at 12:03 pm
—————————————————-
Flat real estate prices over 5 years in a 2% compounded inflationary environment is an effective 10% price correction.

This could very likely be the scenario that plays out in many markets over the next 5 years. Not very much to watch indeed.

#135 Bottoms_Up on 02.17.14 at 1:26 pm

#119 Aggregator on 02.17.14 at 11:44 am
——————————————–
$1.3 trillion mortgaged on 10 million properties/units is a “staggering” $130,000 per property.

#136 };-) aka Devil's Advocate on 02.17.14 at 1:35 pm

#129 Rainclouds and #130 Form Man

Ya sees whatcha wanna see. Truth be told I don’t particularly like what I’m seein’. I like stability. I like a consistent steady volume. Too much one way or another isn’t a good thing in the long run and I am here for the long run.

I’ve seen it all numerous times before. SHIFT happens, always has, always will. And, this economy is predicated on growth and consequently rising prices. We are due for another shift. It’s happening. I know, it’s hard to believe prices could go higher. I told myself that in the early 1980s, then the early 1990s and then again in the early 2000s, but they just kept going up. Sure they abate for a time but the overall trend is up. They aren’t gonna let it happen any other way. They can’t. Growth is fundamental to our current socio-economic model.

Anyway, just stopped by to drop a few nuggets. Do with them what you’d like. I’m not about to debate it with you further than that.

Timing has a lot to do with the good outcome of a rain dance.

#137 Derek R on 02.17.14 at 1:35 pm

#102 Devore on 02.17.14 at 6:52 am wrote:
“Doge” is an internet joke, by the way. Really.

It was. And still is. But now it’s a real e-currency too.

http://dogecoin.com/

Dogecoin investment offers

#138 };-) aka Devil's Advocate on 02.17.14 at 1:39 pm

#133 foolsandtheirmoney

“Your average person is really quite stupid. And half of them are dumber than that” – George Carlin

“Irrational exuberance” – Alan Greenspan };-)

#139 Nemesis on 02.17.14 at 1:43 pm

Ooh!… I feel so ‘dirty’. Would an immediate shower help?

#125erratum: ”It’s all in the governments hands. They created it, and now have to decide how to deal with it.” – @Aggregator/#119

#140 Smartalox on 02.17.14 at 1:46 pm

Interesting observations about the how the low supply of listings – especially good quality listings – that is to say, listings for properties that are desireable, as opposed to those tear-down gut jobs that attract multiple offers.

I was talking recently with a retired friend of mine, a very intelligent man, who commented that prices were high because ‘supply’ was low. Counter this with the point about bubble sellers withdrawing listings when prices fall, certain that they can ‘ride it out’ until prices rise in the spring market, or the summer market, or whenever prices tick upward again. Has anyone studied bubble psychology to determine the critical point at which the decline in market value triggers the stampede to the exits?

The other comment that caught my attention was the one about foreign outflows of capital: in light of the end of the cash for visa program, investors who bought homes here in anticipation of becoming residents, may choose to sell at the same time that 1) the market for wealthy foreign nationals evaporates, 2) as the Canadian dollar begins to decline.

I’d figure that foreign exchange rates play a pretty significant role in the cost-benefit analysis of foreign buyers. I’d hate to be a foreign buyer facing a 20% loss in property values, compounded by a FURTHER 10% decline the value of my investment due to the decline in the Canadian dollar compared to reference currencies.

My point is that the trigger point for mass sell offs in a bubble – say 25% loss – may be closer to reality for some segments of the market (foreign buyers) due to foreign exchange effects – than it might be for others (local boomers, whose house is their tie to the community, in additon to their retirement plan). It’s not that the boomers can absorb a greater loss, they just may not be aware of the pressures faced by their competitors – the foreign investors with properties to sell in the same block or the same building. This means local boomers will probably be late to the sell off, and end up missing the market completely, waiting longer, and incurring bigger losses.

It’s going to be a perfect storm!

#141 Aj on 02.17.14 at 1:47 pm

@ PJ #64 – I too would be very interested in that sort of assessment. I am seeing all sorts of for sale signs popping up in Kanata and Stittsville, yet a surprising number of them seem to be selling.

#142 Form Man on 02.17.14 at 1:52 pm

Was skiing at Big White on the weekend. Real Estate prices there are down 50% from the 2008 peak. No new construction to be seen anywhere. Desperate developers have hung ‘for sale’banners off the condo buildings ( some have been hanging there for over three years now ). The boom in ski hill construction in the Okanagan is truly over……

Too windy and foggy for good skiing this trip, but the snow was nice……..

#143 rosie "moving forward" in the knowledge that, "this won't end well" on 02.17.14 at 1:57 pm

Renting is losing the societal stigma in the U.S. Canada, as usual, will follow the trend when the lightbulbs start coming on.

http://business.financialpost.com/2014/02/13/why-many-u-s-renters-are-just-saying-no-to-buying-homes/

#144 Hillbilly on 02.17.14 at 2:15 pm

Who or what is this poor demented soul posting under the name aka Devil’s Advocate?

The blog’s resident delusional realtor?

Sure doesn’t let facts get in the way of his opinion , that’s for sure !

#145 jeff on 02.17.14 at 2:22 pm

Realtor # ZERO on 02.17.14 at 11:12 am
Typical realtor response… prices up 25% since 2010 , this is the new normal , price gains of about 8% every year, why wait to buy? LOL

And he said…”You can’t save fast enough to keep up with the increase.”

And you think that is normal? This is why the market will have a nasty correction of at least 20% or more. When Canadian couples with good jobs making $150k combined CANT AFFORD A DETACHED PROPERTY IN TORONTO, the market is overpriced… do you understand that Realtor # ZERO?
—————————————————————-

Many realtors don’t even have high school and even some of the top GTA realtors DO NOT have high school. It’s sad but true and you can see it on this blog .

#146 Realtor # 1 GTA on 02.17.14 at 2:27 pm

If people can’t afford the homes the live in then wouldn’t
Listings be UP?

The truth is no one knows when or by how much
This correction will be
I bet most people reading this blog wish for 2010 prices
And if they could go back in time they would

Interest rates and now inventory are now your enemy

#147 rosie "moving forward" in the knowledge that, "this won't end well" on 02.17.14 at 2:56 pm

Smartalox

The explanation is mathematical and provable. Traffic jams all over the country.

http://iopscience.iop.org/1742-6596/221/1/012006/pdf/1742-6596_221_1_012006.pdf

#148 Notsy, a.k.a. God #3 1/4 on 02.17.14 at 3:06 pm

#140 Smartalox on 02.17.14 at 1:46 pm — “It’s going to be a perfect storm!”
— plus —
#125 };-) aka Devil’s Advocate on 02.17.14 at 12:21 pm — “Ya, we know it’s unsustainable and it is not a matter of “if” but “when” it will fail.”
— which leads to —
#84 Son of Ponzi on 02.16.14 at 11:29 pm — “Obama kicks the can down to March 15, 2015. Mark this date down as the day of reckoning.”

Nice timing. Same day as The Ides of March. Time for a Cascades / SAF shake and bake joint submission and session?

#149 World According To Garth on 02.17.14 at 3:12 pm

Its about confidence. Chase (the drug money launderer) just banned parents from depositing cash into their kids accounts while they are at college. HSBC (the terrorist launderer) makes you “tell them why” you are withdrawing your own cash.

Who accepts Bitcoin? Small companies like Target, Virgin, Overstock and the list is growing by the day. People are disgusted by banks and piece of shit govts (like ours) who will not prosecute their criminal activities.

That is why bitcoin continues to grow. And I don’t want to be involved with a govt sanctioned criminal mafia. How’s that?

——————————

#16 World According To Garth

Bitcoin is 1. And bitcoin is NOT 2. Think I’ll try a small portion of our diversifed capital and see where we go.

While you’re there, also pick up some Litecoins, a couple of MaxCoins, and a bunch of DogeCoins for good measure.

Because, you know, you want to diversify your capital.

“Doge” is an internet joke, by the way. Really.

#150 Obvious Truth on 02.17.14 at 3:40 pm

If the sales numbers and hype of the RE industry were correct we would have a rip roaring market. Sales and inventory would not be down.

I maintain that nothing can help RE at this point. Even good news is bad news.

In investing when we get a set of circumstances that should benefit our investment but prices don’t react we sell. Ask questions later. Example is less bond purchases equals less liquidity and lower stock prices. Opposite happened so sell your shorts and get long. Ask questions later.

Lower rates should have accelerated housing and we see sales falling. If that can’t help ask what will. Lower dollar. Not likely. Foreigners will be worried about a 70 cent dollar. It’s about lending. And the anatomy of a correction.

Waiting for bank earnings to get insight on lending growth.

Realtor number one is getting under people’s skin. He’s good. Uses popular phrases. Knows not about corrections.

Some of us are to patient for him and will make money till it’s time. First stop 09 when the Feds created the artificial boost.

And the Feds won’t save anyone. All the boomers will be divided and voiceless. Hoping for good times again or more hours at work. Nothing like debt to silence people. The narrative will turn against them. May even be blamed. If you are not careful life will kick you when you are down.

When it’s all obvious its usually very late.

Still some sun left. Time for one more walk.

What about the anatomy of inflation?

#151 Mike T. on 02.17.14 at 3:56 pm

#144 Hillbilly

do not worry – that poster has been banned in the past and will un-doubtedly get himself banned again

then he will send Mr. Turner juvenile emails

history tends to repeat itself

#152 Bottoms_Up on 02.17.14 at 4:06 pm

#141 Aj on 02.17.14 at 1:47 pm
—————————————
Garth’s take on Ottawa is the same as anywhere: “It’s not different”.

And real estate price volatility is highly localized (as he’s also pointed out). A cardboard Kanata McMansion today worth $500,000 could easily shed 20% (whether through a drastic price cut or 10 years of flat prices is a different debate), but entire neighbourhoods (Westboro, Rockcliffe etc.) may not see any price reductions and may likely see price gains.

Location, location, location.

If you believe [these] stats, you can see that Ottawa pretty much weathered past downturns, BUT that is not to say that some individuals didn’t lose lots of money (or couldn’t sell their homes at certain times).

http://www.agentinottawa.com/1956_-_Present_Prices/page_491704.html

Also, CMHC releases all sorts of stats on Canadian cities:

https://www03.cmhc-schl.gc.ca/catalog/productList.cfm?cat=70&lang=en&fr=1392667215842

Here’s Ottawa:

http://www.cmhc-schl.gc.ca/odpub/esub/64187/64187_2014_M01.pdf?fr=1392667343710

page 31 shows employment and income is steady (although employment is running about 2% less than last year).

#153 recharts on 02.17.14 at 4:23 pm

#114 Penny Henny on 02.17.14 at 10:44 am

Okay. Fewer houses are available for sale.
That must mean fewer people are selling or moving, agreed. One reason many people move is because their needs have changed (need more room, etc), also many people move because they wish to upgrade their home. But what you haven’t factored for was less people are moving because the costs are so prohibitive.

For example. Let’s say you wanted to upgrade from your $600,000 Toronto starter home or Etobicoke bungalow to a $750,000 step up.
Costs include-
-5% real estate fee, $30,000
-hst on real estate fees $3,900
-dual land transfer tax of $30,000 on the $750,000 upgrade
-lawyer fee, title insurance, movers etc another $6,000

That’s $70,000 lost, gone, finitio.
Many people are deciding to spend that $70,000 on upgrades to their home rather than spending it on MOVING FEES. Who can blame them.

At least for SFH the cost is dumped on the buyer since it is a seller markt. The sellers will sell at the price they want for the house + most of the above fees.

There must be another explanation for the low inventory and that is that the people can’t just move because the RE agents need their commission. At this point many homeowners can’t move because moving would mean to take a loss on the existing property.

The low inventory is the very proof that THE SELLERS DON’T and CAN”T buy the 14% garbaverage appreciation. The Average price went up because high end properties sell in higher numbers, fact confirmed by the TREB stats ! The median price edged up very little and it won;t allow a potential seller to sell without incurring a loss.

According with Guava.ca from 2005-20013 around 900000 SFH changed hands
Toronto population is 2.5mil
Total number of families (2011):1,665,200
So what does this tell us?
More than 50% of the families changed their homes in 5 years either by upgrading, downgrading or moving out of TO. Some probably moved in To but all in all this percentage looks BIG to me
To put the things in perspective look at this

http://www.randi-emmott.com/charts/chart3.gif

I am really curious to find out if with the commission’s you have calculated it is feasible to change the house every 4-5 years.

#154 Another Happy Renter on 02.17.14 at 4:27 pm

#92 Happy Renting

I posted #17, but I guess I don’t really pay attention to names so I didn’t realize there was another Happy Renter (shouldn’t be surprised though!!)…anyway, I’m not a usual poster. So I guess I was the one who stole someone’s name!! My apologies to the real Happy Renter. I will henceforth be Another Happy Renter. Hopefully that isn’t taken too! :)

#155 recharts on 02.17.14 at 4:35 pm

Ups, above is 2006-2013 and that is 7 years. And there is one more mistake there: 2 families involved in a transaction! That equates to roughly the population of Toronto ☺☺☺

If you include the people who rent, the people who can afford and some GTA people who move in it still doesn’t work …
People can’t just move so than the RE agents can make their commission.

#156 Old Man on 02.17.14 at 4:44 pm

I went into Macs variety store today to look round, and now know what inflation looks like. They have this grocery section with mini containers and packages that have never seen before in the marketplace. Child size grocery items selling for normal size prices as needed a container of regular cheap mustard to mix with the hot from Poland. The container would last me a day or two, so walked out for a better day; what a ripoff, and forget the other products being sold there.

#157 TORONTO LANDLORD on 02.17.14 at 5:04 pm

Another parasitic loser who wants to rent one of my units but considers my cost of laundry too high.
Told him theres a laundry mat around the corner for $2/wash and $2/dry.
was shocked that patrons use the place.
No mommy and daddy here- just big city expenses and space cadets.
cant believe that im going to charge him $100/mth to park his car?
20-25 yrs old and dumb as they come.

#158 Paul on 02.17.14 at 5:16 pm

#145 jeff on 02.17.14 at 2:22

Many realtors don’t even have high school and even some of the top GTA realtors DO NOT have high school. It’s sad but true and you can see it on this blog
————————————————————
Hey Jeff
I guess all those realtors without grade 12 must dive a smart guy like you crazy. Many may not come up to your highly educated self but they are street smart, people smart and can out work you on your best day! Now go to your place of business and stay there for the week and someone will hand you your pay on Friday.lol

#159 Kilby on 02.17.14 at 6:15 pm

Don’t know what is so hot in Kelowna, Kelowna North and South there have been 13 sales of SFH in February up to today. Only one expensive lakefront home that went for $400,000 under asking and I don’t know how many price reductions there was on it in the last several years. still looks like a lot of inventory out there.

#160 Old Man on 02.17.14 at 6:16 pm

#145 – Jeff – the Realtors level of education should never become an issue, as its a matter of honesty, integrity, ethics, and protecting their client’s best interests in any Real Estate transaction. Now have dealt with hundreds of them over time in Toronto, and the above moral values are hard to find, but there are exceptions.

Most of them are greedy, unethical, heartless, street wise, liars, thieves, cheats, sharks, as money is their god. Beware of what they tell you, as making a commission is their means to an end regardless of your interests. They will con you to see black as white and just make the deal, as a means to an end, without any regard whether it is right or wrong for you to do such based upon your personal situation.

So now what? It is imperative for you alone to do some homework, and educate yourself as best you can before any sale or home purchase which is a big investment in life. Make a big mistake and you become the greater fool; the Realtor has your bucks on closing and off he goes for his next client to make some green.

#161 Ralph Cramdown on 02.17.14 at 6:43 pm

#157 TORONTO LANDLORD — “Another parasitic loser who wants to rent one of my units but considers my cost of laundry too high.”

Badmouth your prospective customers all you want, but they’ve got the green and you’ve got a unit available in this, the third week of February. There’s something a little sad about a small landlord complaining about tenant quality. Homeownership rates are at their highest ever, and REITs are providing comfortable, mid- to high end units in many areas of the city with professional management, while rented condo units with ensuite laundry soaks up many others. So who did you think was left over to haggle over parking space rental rates in your drafty triplex?

#162 maxx on 02.17.14 at 7:06 pm

#7 Brian Ripley on 02.16.14 at 4:53 pm

re: “CREA blames crappy winter weather”

Yes indeed…..it’s going to be a very long winter.

#163 smartalox on 02.17.14 at 7:50 pm

@ Rosie:
It’s an interesting paper. I had a little trouble with the Japanengilish grammar, but the charts were clear as day: spiking prices on declining transaction volumes precipitates the bubble bursting.

If I read it right: drivers tend to drive faster when there is more space ahead of them; when the number of cars increases, the space between cars is reduced. Eventually, the spaces get so small drivers conclude it’s unsafe to continue at high speeds (not enough room between cars to avoid a collision – so everyone slows down.

Applied to the housing market, I see housing prices as the speed of traffic, and the space between the cars as the ‘gains’ to be made in a transaction, moving from one car -sized space on the road, to the next car-sized space.

As the speeds of the cars increases, and the space between the cars (the difference between cost of buying and profit from selling) decreases, and the perception of danger increases. Everyone starts second-guessing the effectiveness of their brakes if the guy in front of them suddenly cuts their speed / price.

Normally when this happens, it’s not the first guy who cut his speed that gets creamed; the first person to slow, and often the driver behind him can usually see the hazards ahead with enough time to avoid them.

No, it’s the guy two or three cars back, hurtling along at the speed of traffic, and who has put no money into maintaining his brakes or his tires, or who is too distracted calling work on his cell phone, or kids, or CD player or job or pets in the car to realize that traffic is slowing down, and who then stops in a panic, triggering a multi-car pile up, that may or may not spill over into adjoining lanes (neighbourhoods)

So in traffic, the magic number is 20%: When vehicles occupy 20% of the road, the flow quickly becomes unstable, and speeds drop. What this paper is saying then is that when the value of completed transactions approaches 20% of the money available in the market, prices will begin to drop.

That’s good to know, but this doesn’t answer my original question, which in this analogy would be: what is the value of the damage (as % of the cost of the car) that drivers think that they can tolerate for prolonged periods of high-risk, close-formation driving, before they decide to tap the brakes and slow down? That value is different for every driver, but as I said before, it’s usually not first ones or the cautious ones that suffer when speeds drop.

#164 Snowboid on 02.17.14 at 9:54 pm

#130 Form Man on 02.17.14 at 12:39 pm…

Go easy on the seller of sand, he has apparently run short on meds again.

Our review of properties over the last few months also shows steady, but slow declines in prices – not just in condos, but showing up in SFHs as well.

#144 Hillbilly on 02.17.14 at 2:15 pm…

Sadly, the increasing number of posts always seems to coincide with the reduction in medication…

#165 moneymike on 02.18.14 at 1:32 pm

Hey everyone.. I’m hesitantly trying to get into the balanced portfolio game, and I’m looking for some ‘on sale’ investments to get started. What do you think of REITs like XRE or ZRE?
I’d love any opinion or other suggestions!

#166 Suede on 02.18.14 at 5:57 pm

HAM and Immigrant Invesetor Program statistics:

http://socialsciences.uottawa.ca/grei-rgei/fra/documents/Ware_Fortin_Paradis_Canada_IIP_Report_English.pdf