The heartbroken

chimney modified

Ruben admits he was surprised to read about heartbroken hipsters littering the housing landscape, when I referenced them a few days ago. Then he and his wife went to some open houses on the weekend.

“Of the 3 houses we went to, all of the other potential buyers were hipsters! Each had that neatly shaven ‘beard’, short sides, and hair combed neatly to the side, or with a baby in one of those baby carriers,” he says.

“I was wondering, how did you know that hipsters were driving a good part of the market, and many were heart-broken? I completely believe it after this weekend.”

Well, RBC knows it too. And BeeMo. Plus all the other lenders that are slavishly targeting the Millennials, that innumerate, over-educated, under-experienced clot of people whose life goal is to become helplessly mortgaged.

These are the ones turning trash listings into almost-million-dollar homes. The net effect of Ottawa cutting off seven-figure houses from CHMC insurance, in a market short of listings, has been to morph $750,000 properties into $900,000 ones. And why not? When you’re only plopping down 5% of the purchase price, and extra $150,000 amounts to a lousy seventy-five hundred bucks. Mom’s good for that. As for a bigger mortgage, who cares? Millennials never expect to pay it off. Houses always go up, so you just roll it over until you die, then it’s the bank’s problemo.

And you wondered how the average SFH price in Toronto just passed $900,000. Silly you. Hipsters.

Well, this crotchety old blog has only two things to say, as it sits rocking on the front porch in a cardigan, cradling a Remington. First, more evidence we have reached a peak in real estate values. The Teranet-National Bank price index has stalled. For the first time in 15 years it failed to register an increase between February and March. If I were buying with 95% financing, that would toss my cookies.

Second, do these kids actually know what they are purchasing? Especially when it comes to decades-old semis in ‘emerging’ neighbourhoods when former owners were too busy surviving to maintain their dumps?

Roger thinks not. He’s a home inspector who would like his Ontario company kept out of this blog because, “I can’t afford to slap the hand that feeds.” I think you might want to hold down a hipster, and read her this:

I get a ring side seat to the house horny in all of their glory.

First question I ask my clients is this: “Do you have any concerns regarding this home that you wish to address today?”  With younger clients, the answer is, “Yes – we want to be sure that there is nothing here that will cost us money to fix.  We won’t have a lot of cash kicking around after we purchase this home.”  At this point my radar goes up.  Why?  Because these nice people, try as they may, have scrimped and saved but they just don’t have a lot of money – but what they can afford with their modest down payment is what I’d call a sock burner. They’re often older, dirty and unkempt houses, so after I’ve been in them I don’t bother washing my socks – you’re better off just to burn them.  Sure, they have some fresh paint over the cracked plaster and maybe someone slapped in a Home Depot special kitchen, but at their heart they are disasters. Rotten structure, failing masonry work, asbestos, knob and tube wiring, galvanized plumbing, mould and water leakage, old HVAC components and roof coverings as well as a host of other items that are expensive to correct and insure and may make the home difficult to resell in the future.

Once I’m done with my assessment, this is where the realtor’s really need to turn it up to 11.  We’ve now determined that this “cozy, move in ready” home will likely require between $40-50,000 in work.  This is due to the fact that prior owners have not looked after or updated the home.  The realtor takes the clients aside and tells them that my estimates are for worst case scenario, I’m embellishing a bit, I’m ultra conservative and the realtor really thinks that they can do this – they know their clients! Plus, they know “a guy” who can help them with the renos – for cash!  They (the agent) have the paperwork right here (waiver) and they need to get this baby firmed up so the clients can become proud, new home owners. Remember too, the vendor’s going to continue showing the home and the next person might swoop in with a clean offer  And if all that was not reason enough to just rush in and sign, if they don’t take this home, it’ll mean another 3 weeknights traveling around and looking at houses.  That’s a crazy waste of time!!!  Just sign here…

Everyone is horny now – agent, buyers, sellers.  Everyone.

Then I get a phone call a couple months down the road.  Same couple. They now have some concerns.  They were firming up the terms of the insurance and their insurer has insisted that within 90 days of close, the galvanized plumbing and all knob and tube wiring need be replaced, or the policy will be deemed void.  They are facing the potential of having no insurance, which means no mortgage.  They’d like to know how I missed this.  I subsequently direct them to pages 46 and 63 of their lengthy report (which I take enormous efforts to write and no one ever reads), where it indicates that such materials are present and they are advised to seek the services of a qualified plumbing/electrical contractor to further investigate to determine the extent of such materials and systems installed, evaluate their condition and correct and/or replace as required, based on the contractor’s further evaluation.  I suggested they budget for significant cost associated with the replacement of such systems as required and also indicate that their presence may inhibit their ability to insure the home.  Other end of the phone – silence.  Once the nice couple can begin to form words again, they tell me that their agent said I was being “very conservative in my assessment” of the home and they figured they’d be able to spread the costs out over the next 10 years.  They never expected this.  Now they are facing $10,000 in repairs in the first 3 months.  The couple is no longer horny.

If they did their due diligence and really thought it out they probably would have concluded this wasn’t the place for them and kept looking or sat on the sidelines for a bit and continued to rent.  Instead, they are going to need to get second jobs to pay for electrical and plumbing systems that really won’t add any value to their home.  No saving for retirement.  The idea of starting a family, the reason they wanted bigger digs, is pushed out indefinitely for the time being.

Agent’s happy though.  They have their cash in hand and like Teflon, nothing will stick to them. Rinse, wash and repeat.  See the same thing over and over.  Agents rushing clients into quick sales and wiping their hands clean after the fact.  Lives destroyed or at least significantly interrupted.

I’d be the first one to tell you that very, very, very few realtors actually have their client’s best interest at heart.  So many are in it for the quick money, the “prestige”, their face on the back of buses. Especially the younger ones.  They show up in their $75,000 car, dressed in fine clothes and looking every bit the successful realtor.  A rock star really.  Fact is they’ve never sold a home before and couldn’t tell the difference between their ass and a hole in the ground.  The industry as a whole needs to be cleaned up and some oversight with teeth put in place.  Until that happens, I’ll continue to watch nice people struggle through significant hardship because they were deceived by the one person they thought they could trust.

170 comments ↓

#1 Bill Gable on 04.14.14 at 6:27 pm

Amazingly frank and VERY telling post.

I am so glad we rent and we sold all our holdings.

We had a place in TO, in Kingsway area, back in the Seventies, and even THEN, I was getting killed for repairs. Knob wiring, galvanized this, leaky that.

We sold just before the boom, of course, but I got out alive.

With today’s post I hope you saved some folks from the “road to debt slavery”.

Incredible.

#2 Chris on 04.14.14 at 6:36 pm

Another important point — never, EVER go with an inspector your realtor recommends.

#3 Frustrated Kiwi on 04.14.14 at 6:37 pm

Very sad. And this is just those buyers who actually get an inspection. Around here many don’t do so because of the pressure for a clean offer or to bid at the auction, where the sale is final. It completely blows my mind that people can make a million dollar purchase with no home inspection. But I guess real estate is a sure thing, right?

#4 Martha on 04.14.14 at 6:39 pm

It would seem to me that a relator should be charged with fraud if they gloss over an inspection report. I won’t hold my breath, but that would be the right thing to do.

#5 Shawn on 04.14.14 at 6:39 pm

The (possibly negative) Value of Crap

One (very mis-guided) view is that the value of anything is the price that can be obtained in the open market.

In reality people should not buy over-priced crap just because others are willing to and have pushed prices up.

Buying crap is like buying a used car for $500. Chances are you would be better off setting fire to your $500 (along with your socks) because a $500 car is likly to cost you a couple of thousand in short order but will still be a $500 car.

I imagine anything with knob and tube wiring, and or galvanized pipes, unless it has great architecural value is best viewed as a teardown. Buy only for the value of the land less removal costs.

Put $150k into renovating a tear-down and it is probaly still a tear-down structually.

Never ever spend that kind of money without sleeping on it and making your offer subject to inspection. If that can’t happen just look elsewhere or rent.

#6 Kilby on 04.14.14 at 6:39 pm

Maybe the new OSFI regulations (suggestions?) for banks will slow down these disappointing buys?

#7 B21 on 04.14.14 at 6:41 pm

Garth. Osfi issued b21 today. Major press already got it wrong: it does not apply to cmhc as they are not a regulated fi. Cmhc issued a press release. Views? Not a big deal imho. Other rules already in place are much more relevant. Business as usual…

#8 Michael on 04.14.14 at 6:41 pm

good one

#9 frank le skank on 04.14.14 at 6:42 pm

I think that anyone who signs a mortgage for a substantial amount of money should perform their due diligence regardless of how much oversight there is. To blindly sign piece of paper and not read your home inspection is extremely stupid. Good luck trusting the people who are making a boat load of money off you.

#10 2CntsCdn on 04.14.14 at 6:44 pm

Excellent article … everything I suspected and more. Great observations (confession) by Roger the home inspector. Everyone knows what is (and has been) going on in RE sales … and when you get a guy who stands right between the buyer and RE agent (during home purchase copulation) feeling sick to his stomach about what he see’s and hears … it says a lot.

Maybe we can get all the major newspapers to run this article and open the public’s eyes? LOL …. NOT! No RE Debby Downers allowed. I think half the newspapers would go out of business if their RE advertising shrunk.

#11 Jason on 04.14.14 at 6:45 pm

First!

#12 Big Sexy on 04.14.14 at 6:45 pm

Geez, heartbreaking story…

#13 Happy Renting on 04.14.14 at 6:45 pm

I hope if someone e-mails you directly, Garth, that Roger has consented to you passing on his professional contact details so people can hire him. If you’re going to slug it out in today’s RE environment, more than ever you need someone who will give you the truthful, bad news.

#14 realtors are clueless on 04.14.14 at 6:45 pm

To echo Garths post tonite, I work in the mortgage biz. I deal with realtors on a regular basis. And boy oh boy are they the epitome of snake oil sales men.

This reminds of a client who was looking to put an offer on a home. I told the client, look, whatever you do, go in with a financing clause. You’re approved for the mortgage, but dont waive that condition until we’ve appraised it.

The next day I get a call from the realtor- a three way convo with the client, me and the realtor. The realtor tells me that I am rediculous for telling the mutual client to do this, in all of his years he has never heard of a finance clause. The realtor tells me that he has done dozens of buy/sells and that I am out to lunch. I tell the client with the realtor on the phone, Client, I’ve done about 200 mortgages in the last 3 years. As my client, I CANNOT tell you to waive the condition until I have the appraisal in my hand. HOWEVER, the real estate agent whom your working with, if you want to take his advice, by all means…. So mr Realtor what do you say??? “I wont tell her to do that”……. so then I turn to the client and, well there you have it client. Your realtor doesn’t want to take the liability but he has no problem giving me grief…. Anyway, it’s in your best interest that we do the appraisal first…. but at the end of the day it’s your choice.

Anyway, she stuck with the finance clause. Not that there were any problems with the appraisal, BUT you never know.

#15 sideline sitter on 04.14.14 at 6:46 pm

First, I call myself “sideline sitter” for a reason…

Second, the big issue with Realtors started when the OREA allowed just about ANYONE to become a Realtor. They let anyone do it, so they could get annual fees, and it brought down the quality of the trade.

Same thing is/has happening/happened with CAs.

#16 Nemesis on 04.14.14 at 6:47 pm

…”…, as it sits rocking on the front porch in a cardigan, cradling a Remington.” – HonGT

Personally, I’ve always preferred the Underwood portable… or an IBM Selectric II when Courier just won’t do…

http://youtu.be/2ozd6W1wyzo

Oh… snap! Pump or Over&Under?

#17 retired and renting on 04.14.14 at 6:47 pm

OMG, everyone’s crazily bowing to the Canadian religion of real estate. Can’t believe it’s going on for so long. We sold a country property in the Golden Horseshoe in 2012 and are renting a house now.

Our accountant tells us we are the only people he knows who have downsized and actually kept their money. Our investment income could pay the rent three times over. Most retired boomers buy condos and end up spending the entire house proceeds for the next place, when the idea had been to liberate some of that house money.

Shows you that boomers are as crazy as the hipsters. After all, your real estate holding is the true reflection of who you are!

#18 Assquatch on 04.14.14 at 6:50 pm

First.

Need new pictures, Garth. Seen that one before on this blog.

No you haven’t. Your house? — Garth

#19 ILoveCharts on 04.14.14 at 6:51 pm

I’m going to rent and work in the city until I am done with that and then go get a plot of land somewhere by a river in this huge country we have and build my own home.

#20 Holy Crap Where Is The Tylenol on 04.14.14 at 6:52 pm

Trust, hmmm sononomous with don’t worry just sing here! It will all be OK.

#21 rog on 04.14.14 at 6:54 pm

Suckers are born every day . Caveat Emptor

#22 JCAL on 04.14.14 at 6:59 pm

I think I’ll print this out and hand out copies to the youngsters I know who spend their evenings nowadays going to Open Houses.

Is that picture from one of Roger’s Inspection Reports? :)

#23 Sockeyemoon on 04.14.14 at 7:01 pm

We are a fast food society. Who has time for due diligence. If hipsters want a house they damn well wanna be able to and get one… Now!

Too bad so few no about delayed gratification. If you wait a few more minutes you can drive past the McD’s and go somewhere where you can sit down, be served and have a beer.

A wise man once said: ” The early bird may get the worm but the second mouse gets the cheese…”

#24 Van Isle Renter on 04.14.14 at 7:06 pm

“Hipsters”

Reminds me of the South Park episode where they bring an exterminator into the house . He knocks on the walls a few times and a long haired bead wearing people tumble out and the exterminators says ” Yep. I was right.. you got Hippies”

Except in this case it’s “Yep, you got Hipsters…. but they’re living in your basement, in your garage and under your deck. Welcome to Vancouver.”

#25 Freedom First on 04.14.14 at 7:07 pm

Roger. Over and out.

Another reminder for me that ignorance is never bliss. Ignorance is ultra-expensive. No exception.

Reminds me of an old saying meant for the ignorant: “Change, or change will be forced upon you”.

I like cash, cash flow, income streams, minimum of 8 assets-preferably more, diversification, balance and re-balancing, liquidity, and always being debt free. I have always put freedom first.

I believe if a financial illiterate were to read every post on this blog that Garth has written for the last several years that would be time well spent and pay off with a lifetime of mega financial dividends as well as financial peace of mind. Financial peace of mind: “Priceless”.

#26 T.O. Bubble Boy on 04.14.14 at 7:11 pm

Tonight’s blog highlights why detached dumps (that can be torn down) go for so much… people are willing to buy the lot and tear down whatever old house was on it, because it solves these types of problems.

#27 Maxamillion on 04.14.14 at 7:14 pm

These are probably the same people you see at the end of the checkout aisle looking over their bill making sure they weren’t over charged for some item.

#28 Nemesis on 04.14.14 at 7:15 pm

#BonusZen #EdWitzke #DomesticCrimeScenes

“What got me over and over again is where I saw so much horror out there, so much cover-up,” Witzke said. “It was like a crime scene. It was like going from one crime scene to another. People have been cheated and lied to.” – Ed Witzke

http://www.straight.com/news/349656/home-inspector-ed-witzke-retires-protest-shoddy-buildings

#29 Jay on 04.14.14 at 7:23 pm

As a younger guy, I see this even in the house I’m renting.

The land lord asked us once if we wanted to buy it, and there’s simply no way — The house is sinking back into the prairie, and it would cost another $40,000 just to keep it from being reclaimed by the earth before the mortgage runs out.

But I bet you there’s someone out there willing to pay an astronomical sum and put themselves on the edge of poverty to have that home, and they’ll act surprised when their shelter falls apart around them.

#30 Robert on 04.14.14 at 7:33 pm

A friend of mine asked me to look at a home she was purchasing,the young so called realtor had her so convinced to buy on the spot all I said is let’s just wait a day and get an inspection done. I met them again the next day she got out of the deal. Slow down people!!!

#31 T.O. Bubble Boy on 04.14.14 at 7:40 pm

And you wondered how the average SFH price in Toronto just passed $900,000. Silly you. Hipsters.

I guess my “$900k House of the Day” is a timely topic.

#32 Smoking Man on 04.14.14 at 7:43 pm

Well, RBC knows it too. And BeeMo. Plus all the other lenders that are slavishly targeting the Millennials, that innumerate, over-educated, under-experienced clot of people whose life goal is to become helplessly
mortgaged.-Garth
………..

Why would the banks not salivate over the schooled. Easy pickings.

First off they think man can alter the climate, dominance over the sun.. How arrogant.. They are.

Ask a millenia what the decimal is for 3/8 with out a calculator.

These fools would rather ride a tram than command a big ass pick up truck..

Pedal bikes for crying out loud..

There all liberals…. Kathleen Wynne worshipers..Ford bathers.
Let’s trap a few more before the carpet is ripped under there feet.

At least fellow climate change denyers are to smart to get sucked into this trap…

#33 Ruben on 04.14.14 at 7:44 pm

I am just surprised there is another Ruben on Greater Fool.

#34 Rob on 04.14.14 at 7:44 pm

Kudo’s to the inspector, most of them are in bed with the agents.

#35 Nemesis on 04.14.14 at 7:45 pm

#TripleBonusRetroZen #U.N.C.L.E. #PagingMr.Waverly

http://youtu.be/3_NytrnoI_Q

#36 TimV on 04.14.14 at 7:47 pm

My buddy at work has knob and tube. Every so often the insurance company forces him to have an electrician come in and inspect it. The electrician says he’s happy, and all is well.

When talking with our mortgage broker, it would have been helpful if he had explained how the mortgage would work if the appraisal came in below the purchase price. He gave some vague comments about twisting appraisers arms, and such, but what I needed to hear was: “Usually the appraisal is not a problem; when it is, sometimes we can get the appraiser to re-consider; in worst-case, you just need cash to make-up the difference between the appraisal and purchase price. The largest difference I’ve ever seen is X”.

Garth – I’m pretty sure you did have this house on your blog before. Here’s the original article:

http://www.thestar.com/news/crime/2012/06/27/house_under_construction_collapses_in_torontos_junction.html

And here’s the link on the greater fool blog:

http://www.greaterfool.ca/2012/06/

Same house, no?

Yep, looks like it. The VP of the Greater Fool photo team is so fired. — Garth

#37 sciencemonkey on 04.14.14 at 7:47 pm

@5 Shawn
Is there a formal economic or psychological term for the overbidding of assets by short-sighted people which makes those assets unaffordable to long-sighted people of the same income?

#38 Mishuko on 04.14.14 at 7:54 pm

The day they put in an auditor, ombudsman, and or some sort of regulator is the day this moulding basement dweller will venture out of the cave. Or you know, a 30-40% correction and the fire sale happens.

Or possibly be ‘priced’ out forever. Oh the sorrows of being a slave to financial freedom.

#39 Mean Gene on 04.14.14 at 7:56 pm

Sounds like “knob and tube” should be changed to “tube with knob” when I envision the Real Estate.

#40 Brutus on 04.14.14 at 7:56 pm

Sad but true. People like this will buy anything assuming that nothing will change to affect their ‘investment’

Meanwhile, the US today stated that it is without doubt that Russia is behind the local anti-Ukraine insurgents.

CNN reports that a Russian military plane has buzzed an American warship in an attempt to intimidate.

All it will take now is some local idiots to overreact and the tinderbox goes up.

This won’t end well and markets will be affected. The news that housing here has now reached the tipping point makes it among the most vulnerable of all markets to black swan events and their aftermath. I don’t think we’ll make it past the long weekend without serious escalation in Ukraine.

#41 hohoho on 04.14.14 at 7:58 pm

> … because they were deceived by the one person they thought they could trust …

everyone knows realtors are commissioned sales people. what they “trust” is their own belief that RE is a sure way to make money.

#42 Bargains everywhere on 04.14.14 at 7:59 pm

Not all real estate agents are awful. Ours was fantastic. We sold our house in 2012 because we were ready to downsize.

We then looked at a number of houses with our agent but didn’t find exactly what we were looking for. One day we went to an open house on our own and thought we’d found the perfect place so we called him and told him we wanted to put in an offer on it. He suggested we all go back and have another good look at it together and he pointed out a number of issues that we’d missed. He then suggested he didn’t think it was the right house for us and that we should keep looking. Many agents would have gone for the quick sale but he did not. In retrospect, he was totally correct and we are thankful now that we didn’t buy that house.

Two years later and we are still looking and he is keeping us up to date on things without being pushy.

There are good agents out there, you just have to be selective. Our agent has been in the real estate business for decades and has a good reputation. Check them out carefully before you choose one and you’ll be fine. They can actually save you a lot of heartache.

#43 Fred on 04.14.14 at 8:03 pm

Lipstick on a Bloor West pig.
I have seen this first hand as well…With a twist. My folks’ long time neighbor moved out and sold the old home “as is”. Young couple bought it, along with the collapsing basement wall, mold, wasteland of a back yard, poor stairs etc…it was a rock. BUT…she was a RE agent and he was a lie (said he was a fire fighter – and they’re moving in for good)

Turned out he was renovating it for a flip and she sells it. They put an Ikea kitchen in, slapped some drywall down and fresh paint and a second hand furnace then listed it. All they did was put lipstick on a pig.

It went fast with a bidding war, the buyer posting an additional $80,000 over the last one to seal it. The single parent buyer got it, along with the problems. She had to fix flooding, the collapsing basement wall, air ducts and the furnace. She tried to sue but got nowhere – caveat emptor. She has now sunk over an additional $40,000…good thing her parents look loaded, we’re sure she’s getting bailed out….along with the water.
Kicker here is though, she said she got an inspection…maybe on the referral of the selling agent.

#44 mark on 04.14.14 at 8:05 pm

It’s buyer beware, but it’s also disgusting behaviour on the other end.

A website naming leeches and snakes wouldn’t go astray.

#45 Fred on 04.14.14 at 8:09 pm

BTW. ..no city permits when the scoundrel couple renovated. We should have asked them for it.

#46 Blase on 04.14.14 at 8:10 pm

Reelturs have the wrong incentives. They should be paid $1,000 flat fee to act as your rep. No commission. Why should they be paid 6x more than lawyers doing the sale?

A lot of realtors could really use a grand for a few days work right about now.

#47 DocInWaitingRoom on 04.14.14 at 8:16 pm

Stage that one. Make sure you bring a few stunted trees to plant on an angle and some extra soil so the path is angled to the house.

I bet 999, 999.99 cmhc backed bid on that stunner of a home and not a penny more

#48 RainierLeftCoast on 04.14.14 at 8:16 pm

Leaky Condos Crisis -Part Deux?

It seems the requirement in BC to have Depreciation Reports done every three years (beginning in 2011) is turning up some nasty surprises for some buildings on the Wet Coast. Even some buildings that were ‘repaired’ during the previous condo crisis are failing their recent depreciation reports.

Part 1:
http://globalnews.ca/video/1267709/port-coquitlam-leaky-condos

Part2:
http://globalnews.ca/video/1268796/leaky-condo-nightmare

The official PDF from the Housing BC website:
http://www.housing.gov.bc.ca/pub/stratapdf/Guide12.pdf

#49 Entrepreneur on 04.14.14 at 8:17 pm

I have a limit when buying; I put a stop at a certain price. When everyone applies to the same rule then the price will come down. This is what is happening in the real estate right now; people not only stopped rushing but are not even showing up. Places are for sell with dollar signs in sellers eyes but reality will set in. Reality has set in in some buyers already.

A bank is a business just like any other business. When there are no customers they lower the interest rates and other dangling carrots. Be careful!!! When you feel that it is not right, well, go with that gut feeling.

It takes a wise person to stand back and not go with the flow. We need a few leaders like that which will come about when Mother Earth has had enough.

Thanks Garth Turner for not going with the flow and being a leader.

#50 Kreditanstalt on 04.14.14 at 8:17 pm

Asset-poor buyers mean high risk for lenders. Answer: insurance.

Insurers want to avoid risk too: they dictate all kinds of changes to the buyers. They no doubt dictate the need for “homeowner’s insurance”, fire insurance, earthquake insurance and a whole lot more too. To get that, the potential buyers have to jump through hoops and spend more bucks.

Why? Ultimately, because of the threat of un-reined-in courts and their increasingly obscene damage awards.

Everyone, absolutely everyone, is as usual really busy trying to avoid responsibility.

How Canadian…insurance mania.

#51 Aggregator on 04.14.14 at 8:18 pm

#7 B21

What OSFI really means is: watch out for these big financial players who are "gaming" mortgages. Chart

Canadian subprime and preprime approval lending is hotter then ever.

#52 Don Derc on 04.14.14 at 8:20 pm

It’s capitalism based on consumerism. We have been appropriately (spelling?) trained by the media, and cornered by the gov’t. Just like the song, money (and leveraged debt) does make the world go ’round. we could teach classes on being a contrarian, but it would have to be no charge – expect no one to show up anyways. “world according to garth” spouts some pretty good anti-gov’t rants but he’s right.

Is there a conspiracy by a higher power (world banks) to cripple cdn consumers in 2016? The yanks are at the bottom (mission accomplished) and any gains are false because of the fiat currency courtesy of the fed reserve.

My neighbor is a landscaper – tending to 30 houses in foreclosure (abby/Chilliwack) so they don’t look rundown and stay pretty for resale. Did the banks not get burned in 1981? Or are they going to get bailed out again (see 2008/2009)?

There is an economic lag of at least 12 months, in all major industrial segments like forestry, mining, and oil/gas. There is a storm coming. The gov’t has worked hard for a soft landing – F sold us out – but it may be out of everyone’s hands. You need a job job job to stay alive unless you have some of that Robert Kyosaki cash flow like some of us have. Did I correctly read 80,000 layoffs for European banks in today’s paper??!!??

Folks – where will we all be in 24 months – mark your calendar – laughing, crying, couch surfing? The cruel joke will be the RRSP’s/ Mutual funds reduced by 30% or so – don’t think so? Only one guy called 2008/2009….and his name is Garth…and your name ain’t Garth – prepare for the worst expect the best.

#53 hypo on 04.14.14 at 8:22 pm

but stockbrokers and bankers never think of
money first and then clients…wake up bro anf
stop sitting on the box of soap.

#54 Linda Mulligan on 04.14.14 at 8:26 pm

I can’t feel a whole lot of sympathy here, because the buyers are educated adults who have not done due diligence, have ignored/did not read the inspection report they presumably paid for (why buy a dog & bark yourself?) & really, in this media savvy world we have what? Total wide eyed innocents being fleeced? Realtors misrepresent reality ALL THE TIME. True story – went to a show home parade near where I live, to see what the latest offerings were. Heard the realtors selling the place tell people the facility nearby was a nursing home. Not technically a lie, except – the home was actually for troubled youth would required intervention due to doing stuff like eating ground glass, attempted suicide etc. The term ‘nursing home’ does not normally bring to mind a bunch of troubled youth who make bets as to how many B&E they can do before being corralled into care again when they run away from the facility.
Bottom line is, put your big boy/girl panties on & stop blaming others for making bad decisions. Anyone who doesn’t think through the implications of taking on close to a million in debt & who ignores the expert who they hired to inspect the place for the siren call of the realtor who is out to sell is going to pay, big time. As for the realtor, yes, they did wrong but – good luck proving they are culpable. Take them to court? Unless you can prove you are mentally incompetent & were unduly influenced the judge isn’t likely to do anything but tell you there is no recourse for making of your own free will the decision to purchase.

#55 LifeXpert on 04.14.14 at 8:30 pm

As an insurance broker I can tell you this happens over and over again, especially in the south Etobicoke/Mississauga, which seem to have an endless supply of homes lacking all sorts of updates.

#56 RayofLight on 04.14.14 at 8:30 pm

“Strong & Free”,
June 29,2012

#57 Trojan House on 04.14.14 at 8:37 pm

Real estate agents have a fiduciary duty to act in their clients’ best interests. But how can this be accomplished when their clients’ best interests clash with the real estate agent’s own interests – which is to get paid for a firm deal. No firm deal, no eventual paycheque.

This is the main flaw with how the real estate business works, but may be impossible to change. It is even worse when an agent is double-ending a property, meaning they are representing both the seller and the buyer. It’s double the money on the line for the agent in most cases. If a lawyer cannot represent both sides in a case, how are real estate agents able to do so?

It is such a racket.

#58 LifeXpert on 04.14.14 at 8:40 pm

#49 Kreditanstalt on 04.14.14 at 8:17 pm
Asset-poor buyers mean high risk for lenders. Answer: insurance.

Insurers want to avoid risk too: they dictate all kinds of changes to the buyers. They no doubt dictate the need for “homeowner’s insurance”, fire insurance, earthquake insurance and a whole lot more too. To get that, the potential buyers have to jump through hoops and spend more bucks.

Why? Ultimately, because of the threat of un-reined-in courts and their increasingly obscene damage awards.

Everyone, absolutely everyone, is as usual really busy trying to avoid responsibility.

How Canadian…insurance mania.
———————————————————-
The moment they stop jumping through hoops home insurance rates will triple. Its the only way to keep the bad apples away.

You are way off the mark here.

I have seen far too many claims for leaking old piping and overloaded aluminium knob and tube wiring (keep in mind electrical systems designed mid century cannot possibly hold the load of today’s gadgets)

I don’t get it, would you insure a home with a hole in the roof??

#59 Macrath on 04.14.14 at 8:44 pm

Toronto money pits , these hipsters should watch old movies before tying one of these 900k relics around their necks ?

http://www.watch32.com/movies-online/the-money-pit-1280

#60 Smoking Man on 04.14.14 at 8:48 pm

Smokey interviews MSM headline writers.

SM
Why do you call billionaires in Russia Oligarchs, but ours philanthropists.?

MSM
Ah, hum.. Next question need to talk to my editor first.

SM
Why do you call Russian speaking Ukrainians Millatents but call Neo-Nazi coup govt legitament?

MSM
Not sure..

SM
Do not realize how silly you sound trying to demonize the Russians, when there is so much info on line, even MSM in Germany says it much different than you.. You know the truth..

MSM
You see that black SUV outside your house and following you around..

SM
Yes

MSM
Ask them your silly questions, this interview is over.. I need to get to the University of Rochester, a professor is calling for the Jailing of climate change skeptics.

#61 Old Man on 04.14.14 at 8:59 pm

None of you know what a Real Estate problem is all about as have been hitting my computer keys all day to assist a damsel in distress. She is moving from a small town and needs a new casita in a new city of 1 million in population to rent with a backyard and a hot spring nearby. There is one thing she never told me as she is taking her horse who will reside in the backyard with her. She will be heading to Jesus Maria on the edge of Aguascalientes where the riders live and contacted a group of ex-patriots who will take care of the logistics. This was a tuff one, but someone had to help her out.

#62 Sebee on 04.14.14 at 9:00 pm

Hope you weren’t expecting us to feel sorry for these hipsters with this story.

#63 Smoking Man on 04.14.14 at 9:02 pm

#54 Linda Mulligan on 04.14.14 at 8:26 pmI can’t feel a whole lot of sympathy here, because the buyers are educated adults who have not done due diligence, have ignored/did not read the inspection report they presumably paid for (why buy a dog & bark yourself?) & really, in this media savvy world we have what? Total wide eyed innocents being fleeced? 
……..

It’s by design, dumbing down, school is not the same school
boomers went to.

The Individual spirit is slayed.. It’s all behaviour driven by concensus. Kumbya with the class, cookies and milk.

Look in the mirror and slip a smile and a wink to your good looks.. Down to the office dog.

You want to fit in, you need granite, hardwood and I a deed.

Quite simple if you ask me.

#64 B Reynolds on 04.14.14 at 9:12 pm

Garth,
Sitting in rocking chair cradling a Remington??? How uncivilized! I can almost hear the banjo music!

#65 Hipsters are idiots. Period. on 04.14.14 at 9:14 pm

I loved this post today Garth. LOVED IT. Just solidifies what I have been telling friends and realtors for years now. That all these dumps people are flipping in Queen west, Leslieville and all the hipster Sh$#hole areas of Toronto are just plain garbage. And the hipsters will get smoked when the market corrects. If they haven’t already defaulted on their mortgage after having no money left to make any repairs on the house they just bought which is falling apart under all that nice paint and flooring.

For years, flippers have been putting cosmetic changes on houses and putting the bare minimums in to take advantage of these idiot buyers. Can’t blame the flippers, they are making money off stupid people and CMHC 5% down mortgages.

Hipsters know only one thing, it’s hip to tell their pals how they just won a bidding war and now own the “hippest” house in the hood. LOL!

#66 Pope Squashed Squid Snugglebums the 666am (aka Nosty) on 04.14.14 at 9:19 pm

#60 Smoking Man on 04.14.14 at 8:48 pm — “Smokey interviews MSM headline writers.”

Nice post! The truth hurts, doesn’t it?

#67 Realtorman on 04.14.14 at 9:19 pm

I love being a realtor and I love making sales. People are stupid and easy to manipulate. Some call us uneducated realtors and they are 100% right but that means so called “stupid ” have been outsmarted by realtors . I laugh at all my clients behind their backs . If people had any brains they would stop buying and the housing market would crash. You think I would care if the market crashes? No I still make money on sales. The buyers are so stupid it’s not even funny and realtors laugh behide all their buyers backs. It’s ture and many have no idea. Realtors win win no matter what.

#68 April on 04.14.14 at 9:19 pm

#22 JCAL- Right on!! I give The Greater Fool link to as many as I can.

#69 Shawn on 04.14.14 at 9:20 pm

Fiduciary Duty?

Tojan House says:

Real estate agents have a fiduciary duty to act in their clients’ best interests. But how can this be accomplished when their clients’ best interests clash with the real estate agent’s own interests – which is to get paid for a firm deal. No firm deal, no eventual paycheque.

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

I have always been highly skeptical that ANYONE will ever put my interests ahead of their own I don’t believe it. To me, it would be a false and hollow promise for someone to suggest they had a fiduciary duty to me.

Also Adam Smith taught that we are all better off when we look out for ourselves. We do that and the market tends to take care of itself. Smith said it’s when someone purports to trade for the interests of others that you really have to watch out.

I would never rely on the notion that someone has a fiduciary duty to me, and certainly not any commissioned sales person.

I see nothing wrong with commissioned sales. But wise buyers know the salesman wants to sell, above all else.

#70 Retired WI Boomer on 04.14.14 at 9:23 pm

“Caveat Emptor”

Let the buyer BEWARE. Old words, apparently a NEW idea in Real Estate?

I’ve owned a $10 car, $35 car, $60 car and ad nauseum up to the mid 20 grand. Actually the $900 one was the best value for miles driven, lowest repair costs.

What does that have to do with Real Estate? Not a dam thing, and let that be a lesson.

All the cars were paid for in full.

#71 Ralph Cramdown on 04.14.14 at 9:26 pm

Hey, at least your local building inspector has your back.

“So what does a homeowner do when discovering, long after closing, that a prior renovation was done without a permit but there is no city order to comply?
The city of Toronto has an unwritten policy that it will not inspect or issue compliance orders to satisfy the requirements of a title insurance claim. This seems to me to be a breach of the city’s obligation to enforce both the provincial building code and the municipal building standard bylaws.”

Hmm, maybe not. I guess they’re not interested in inspecting unless there’s a big permit fee to go along with it.

http://www.thestar.com/life/homes/2014/04/03/renovations_may_hide_problems_from_home_buyers.html

#72 TRON on 04.14.14 at 9:42 pm

For three years I’ve been getting emailed listings for both homes and townhomes in North Vancouver from an agent.

They are listing within a price gap from $500-900k. From time to time I’d see the listing updated with the price reduced. In the last three months over 40% are being updated with reduced prices and the trend increases each month (April seems to have every listing reduced).

The crash is here; anyone rushing to buy in this market is not going to be happy.

#73 Nemesis on 04.14.14 at 9:54 pm

#YouReadItHereFirstSaltyDogz. #WinningTheBattleOfTheBulge: DateLineBastogne #IfIt’sTuesdayThisMustBeBelgium

http://youtu.be/SK1V-fYKrc4

#74 Joe on 04.14.14 at 9:55 pm

http://toronto.ctvnews.ca/house-prices-unchanged-in-march-first-time-in-15-years-1.1774906

Maybe the real estate is hitting the wall….just now…

#75 HDJ on 04.14.14 at 9:56 pm

In BC, condo corporations are now required by legislation to obtain depreciation reports. Produced by engineering firms, these reports assess buildings and produce data that helps strata corporations plan for immediate and future repairs, maintenance and replacement of common property and physical assets. Anyone making an offer on a BC condo without reading the building’s depreciation report is a fool. Imagine if single family homes also required this sort of depreciation report before being put on the market. Purchasers would have assess to full disclosure of both the condition and immediate and anticipated repair bills for the house. I’d vote for that.

#76 Kreditanstalt on 04.14.14 at 9:56 pm

#58 LifeXpert

My hope is that, ultimately, something will be done to put the responsibility on the buyer to do due diligence, with punishment reserved for sellers engaged in fraud.

Insurance is merely intended to help people avoid those responsibilities. Taxpayers should not be propping up the insurance industry.

Perhaps one day the courts can be put under control and risk and responsibility placed more squarely on the parties to the transaction.

And I see no reason why any insurance of any kind should be mandatory.

#77 Smoking Man on 04.14.14 at 10:05 pm

#68 Joe on 04.14.14 at 9:55 pmhttp://toronto.ctvnews.ca/house-prices-unchanged-in-march-first-time-in-15-years-1.1774906

Maybe the real estate is hitting the wall….just now…
…………

Let me see, dandelions are about to bloom, no inventory, a deep pool of dumb down virgins.

MSM following machines instructions to tone down the spring.

You not get my MSM cryptic message..

#78 Slim Pickens on 04.14.14 at 10:08 pm

Came across a young blonde (dyed) real estate agent’s ad and part of it reads: For sale or Leesa (her name). I guess that kind of says it all of the industry right there.

#79 World According To Garth on 04.14.14 at 10:11 pm

#23 Sockeyemoon on 04.14.14 at 7:01 pm
We are a fast food society. Who has time for due diligence. If hipsters want a house they damn well wanna be able to and get one… Now!
—————————————————-

Which is why people should not bitch about TFW. Eat quality food. Find a quality house.

#80 mathman on 04.14.14 at 10:18 pm

Can’t go a weekend without getting into a real estate debate with someone who is three sheets to the wind on the RE Kool Aid. Most of the time, folks have no clue what they are talking about, or the concept of a 700k MTG and what will happen to their payments once rates normalize

My experience is very similar to the honest home inspector, I can count on more than two hands the number of house horny folks I know that went in way over asking for freshly painted POS houses in the Junction/BW/RONCY/Mimico/Longbranch only to have floods/animal infestations/pipes burst/structural problems, that put them deeper into debt.

if you can’t hang a picture frame, don’t buy a house that needs work, but nobody listens to me. If a house is over 50 years old it is going to constantly suck money out of you. Think about all the other expenses, but no the RE Agent thinks this is a great place.

I’ve said it before when interest rates move up, we are f’d in this country. We have created a mess, we have legions of people who can’t spell math, providing advice to people who truly need an objective option, but never get one.

I am happy to sit on the sidelines, rent, travel the world and enjoy life while friends who “own” their homes don’t have the money to go to the movies and or play rec sports anymore. The buck will stop and when it does it is going to get really ugly. We forget Japan/Ireland/USA/Spain etc etc etc.

#81 Why are houses in bad shape? on 04.14.14 at 10:19 pm

The inspector’s report is not surprising. We’re from somewhere other than Canada and are really struck by the condition of the houses. Why have so many not been brought up to date? Why is old junk so often left to rot, then sold to tear down and build again? It’s not so much like this in our home country. Is this a Canadian thing?

#82 World According To Garth on 04.14.14 at 10:19 pm

Is there a conspiracy by a higher power (world banks) to cripple cdn consumers in 2016? The yanks are at the bottom (mission accomplished) and any gains are false because of the fiat currency courtesy of the fed reserve.

——————————–

2015.75 actually but who’s counting….

http://armstrongeconomics.com/2014/04/14/american-civil-unrest-is-starting-on-schedule/

#83 Joe on 04.14.14 at 10:24 pm

Yes , I have notice more and more “price reduced”…
in Toronto and Edmonton…..

#84 2CntsCdn on 04.14.14 at 10:28 pm

What qualities separate the successful RE salespeople from the so-so ones? They need honesty, integrity, thoughtfulness, attention to detail and understanding their clients needs and concerns …….. and the ones who can fake those you’ll do very well.

#85 2CntsCdn on 04.14.14 at 10:33 pm

Correction.

“…….. and the ones who can fake those do very well.”

Keeeriiiiiste!! I hate when I screw up the punch line.

#86 ozy - Agent brought a good inspector on 04.14.14 at 10:33 pm

Agent brought a good inspector
Agent did no interfere between them

The buyers were maybe too PROUD to actually ask the inspector to explain in more detail….if you do not know what to ask???? is this Ontario SCHOOLING SYSTEM problem???

or lack of life-education? mistakes, is where we all learn…young generation is so SHIELD-ed … that they might even believe that “all that flies, it could be eaten”…

who’s fault, who’s fault! GOD?

#87 ozy - Agent brought a good inspector on 04.14.14 at 10:37 pm

Agent brought a good inspector
Agent did no interfere between them

Know&Tube is insurable with an electrician report and not that expensive to remove ($10000 is PEANUTS vs the $880,000 for the bare house and $30,000 in LTT and Lawyer costs), some insurance companies even do not ask about it…

The buyers were maybe too PROUD to actually ask the inspector to explain in more detail….but what if you do not know what to ask???? is this Ontario SCHOOLING SYSTEM problem???

or lack of life-education? mistakes, is where we all learn…young generation is so SHIELD-ed … that they might even believe that “all that flies, it could be eaten”…

who’s fault, who’s fault! GOD?

Garth – why no post on showing the real culprit – the inflation caused by debt based fractional- reserve system

#88 45north on 04.14.14 at 10:44 pm

as long as the market goes up there’s no problem

you can sell to the next fool

so the following quote is très important

The Teranet-National Bank price index has stalled. For the first time in 15 years it failed to register an increase between February and March.

if the market stalls then it’s hard to pass on a shoddy house but if the market declines (as it did in the US) it’s really hard. Like impossible.

T.O. Bubble Boy : Tonight’s blog highlights why detached dumps (that can be torn down) go for so much…

conversely attached dumps cannot be torn down

Nemesis : Ed Witzke: good link

TimV : house on Maria Street collapses : digging the basement out to make the ceiling higher is a stupid

Linda Mulligan : Heard the realtors selling the place tell people the facility nearby was a nursing home. Not technically a lie, except – the home was actually for troubled youth

pretty funny

#89 TheCatFoodLady on 04.14.14 at 10:45 pm

The Washington Post just had an article discussing how peoples’ brains are adapting to read even longer text the way they’d scroll through net items where they look for highlights. They used a cute term – ‘eye bite’ which is essentially, the visual equivalent of a sound bite:

http://www.washingtonpost.com/local/serious-reading-takes-a-hit-from-online-scanning-and-skimming-researchers-say/2014/04/06/088028d2-b5d2-11e3-b899-20667de76985_print.html

Many of these kids have never read a complete, ‘real’ book in their lives – they’d prefer to read a precis. Bad enough they miss the richness of carefully crafted language; they miss context & crucial information that, in longer written text, is not necessarily a larger or different font or a different colour.

Let’s be honest – how many people read every single line of a lease agreement, mortgage documents, credit terms on any form of credit? The information you need to protect yourself fiscally is almost always available…

… so we need to avail ourselves of it lest not doing so bite us in the ass.

I’m seeing that this can be at least partially explained by a lack of reading, wilful lack of reading comprehension & “I Want!” bias. I feel for these kids – they’re desperately seeking a measure of security & mistakenly thinking they can get that in an overpriced, under maintained pile of bricks & crumbling mortar, rotting timbers & knob & tube.

I imagine them as well as I standing on a side walk & scrutinizing the same house. I’m ‘hearing’ the house bitching about ‘wet feet’ in the basement, stuffy air needing addressing by a good HVAC company, etc. The young ones? All they see are the blandishments of their OWN house promising:

“Me love you long time.”

#90 Trojan House on 04.14.14 at 10:45 pm

#69 Shawn

Exactly what I was trying to say!

#91 Harboursnug on 04.14.14 at 10:52 pm

Why does every house in TO look like it’s built on a bicycle path?

I have never seen zero lot lines like I see in TO. I mean can you even walk between these things?

#92 Not First on 04.14.14 at 10:59 pm

Investment money knows no border.

http://business.financialpost.com/2014/04/09/grosvenor-ranks-toronto-vancouver-and-calgary-most-resilient/

#93 Smoking Man on 04.14.14 at 11:10 pm

The heartbleed hack…

Change your password, hell it comes out of nowhere with a logo, and a branding job worthy of coach man purses..

Vladimir, there is a story behind the story…

Go true detective…

#94 lol @ the over use of the word hipster on 04.14.14 at 11:14 pm

Last I checked hipsters were tatooed, skate boarding, plad shirt wearing, welfare collecting tool boxes. hipsters aren’t buying the houses in Toronto. The hipsters are drinking in trinity bellwoods lol. Get real.

#95 VICTORIA TEA PARTY on 04.14.14 at 11:45 pm

IN CANADA: COOL HIPSTERS AND FLASHY KRAUT CANS RULE THE REAL ESTATE WORLD…

…that is if we’re to believe St. Garth of How Dumb Can People Get around these parts.

The inane and laughable rush for clumps of soil besoiled by rickety bric-a-brac sitting atop a mountain of unrepayable debt MUST have some comeuppance somehow somewhere, right?

Apparently not.

Not now.

Not ever.

Because the Millennials, in their plastic-like beards and over-priced four-wheeled chariots from the Black Forest, are perfect in every way thanks to perpetual low interest rates and a “whatever” attitude toward lenders big and small. They run the consumption show these days and the customer is always right. Right? Well, no, actually. They’re wrong.

While they may enjoy the so-called fruits of their low-productivity labours, it is not that giant debt that will destroy them, but their ATTITUDES toward said debt.

Aye, there’s the rub!

What goes round comes round, no matter what.

Eventually the plugged drains of these peoples’ financial lives will knot up and explode into a bleary-eyed onrush of blood-curdling screaming and yelling for “Government to do something” to save their worthless hides because they’ve been swamped by everyone from reno “doctors” to thieving local governments. They will have a problem because they’re Too Small To MATTER, not Too Big To FAIL…

MEANWHILE, A SOJOURN TO VIEW THE OTHER MAIN MARKET OF OUR CONSUMTIVE INTEREST…

…the stock market.

In case you were thinking of accusing this pot of calling the kettle black, you may have a good point! Damn it.

While many who’ve already paid off their mortgages (and are now plagued by ongoing galloping local tax, insurance and other impost hikes seemingly daily) are ALSO obsessed with our own potentially oblivious follies: the investment of our’s and other’s money into the stock, bond and commodities markets, their various derivatives and other slicing and dicing that goes on in the name of good fiscal prudence these days.

While some of us laugh at the pathetic Millennials, and they really do reside in a low class of their very own, we should not be riding too high in our stock market saddles.

Just yet.

Or ever.

While St. Garth of It’ll Be Alright, Really, says the market will prevail, nevermind a few bear markets in the night, that is my fondest hope.

So, if I were a betting man I would place more credence on the stock market failing last and real estate failing first.

The former has too many one per center special interests in charge while the dirt-buyers are still subject to too many negative market forces and various wannabes.

It may not seem fair, to those who struggle needlessly with mortgages and all of the other Tom Foolery, but history shows that by aping the “big market guys” you stand somewhat of a better chance at seeing something financially worthwhile coming out of all this debt-soaked civilization we all love so much.

Except of course when the Big Guys are wrong. Have they ever been wrong?

Yep. But we grind on regardless.

Keep the Faith, Baby!

#96 Chris on 04.14.14 at 11:46 pm

Buyers are sheepish and stupid, well, a lot of them are. They are pushed into a corner or bullied into a corner by the aggressive listing agent and their own agent. The house is the biggest purchase one will make in their whole life, for most people. I don’t understand why buyers feel the need to compromise like this. There is always another house, which could be a lot better than the current one.

#97 DonDWest on 04.15.14 at 12:07 am

What’s happening in Ukraine:

https://www.youtube.com/watch?v=-7OOKecS-WU

#98 meslippery on 04.15.14 at 12:07 am

These are the people you said we should pay tens of
thousands of dollars for a few days work.
IE. dont sell FSBO

#99 Robbie on 04.15.14 at 12:26 am

#75 HDJ

In BC depreciation reports are not required because a condo association can, by a 3/4 vote, decide not to do one. They have to do this vote every year but I am aware of several condo associations nearby that have voted against depreciation reports.

#100 Chaddywack on 04.15.14 at 12:49 am

Oh wow, I had a realtor do this to me and he used the exact same phrase (“most conservative estimate…..just ignore it and sign here”)

Except I didn’t sign anything other than a cheque for the home inspector. I then proceeded to fire the realtor for putting pressure on me……..too bad I couldn’t also fire my dad who was joining in with the realtor trying to “force” me to buy the house.

To this day I rent……and am very proud to say so!

#101 bdy sktrn on 04.15.14 at 1:22 am

(keep in mind electrical systems designed mid century cannot possibly hold the load of today’s gadgets
————————————
gadgets dont use large, or even moderate amounts of juice.

modern bulbs have dropped the lighting loads. replacing 2 60w bulbs with cfl saves enough to charge about 15 phones at once.

running your electric oven ( with burners on) can use the same power as charging 600 phones at the same time.

heaters, hairdryers, microwaves and vacuums are what put the load on standard circuits.

undisturbed k and tube serving low/moderate load circuits seems to be just fine, otherwise half the houses around here would be burned down.

the other fun thing with knobandtube is the lack of a ground, which is really not that unsafe, just snap off the ground plug and your ‘new’ stuff will fit in the ;old; hole!

#102 Turtle on 04.15.14 at 1:35 am

Great post, Garth!

I wonder why don’t buyers participate in a process of home inspection? I mean: climbing in an attic, crawling in a basement, sticking their noses everywhere, etc. You can learn so much (a lot … actually!) in a couple of hours about a house you “fell in love”. If it is your girlfriend… would you like to know all her dirty secrets, would you like her to come clean before you are about to propose?

#103 bdy sktrn on 04.15.14 at 1:41 am

overloaded aluminium knob and tube wiring”
————————————–
no such thing – it;s either alum or kandt – they were 30yrs apart

#104 Bo Xilai on 04.15.14 at 1:44 am

We had a realtor who “wanted to be helpful” and suggested a list of home inspectors who could “help us out” when we purchased (a reasonably priced home) last year. Our realtor got upset when I suggested the name of one home inspector who came highly recommended… The realtor nearly blew a gasket…. He said “Do you know how many deals that guy ruined for me.” I should have fired the realtor right there and then. Unfortunately the home inspector had recently retired. The realtor said he didn’t like the fact the retired home inspector “took pictures” and made comments on the things he saw… He said his home inspectors were a lot simpler to understand because they all used checklists…. I could tell our realtor wasn’t very happy when we decided to use an independent home inspector…

#105 P.Bocanegra on 04.15.14 at 1:56 am

“Also Adam Smith taught that we are all better off when we look out for ourselves. We do that and the market tends to take care of itself. Smith said it’s when someone purports to trade for the interests of others that you really have to watch out.”

Adam Smith never said any of this and its a shame that this stupid twaddle is repeated over and over by simpletons who are just repeating propaganda they have heard. It does explain why our societies are so screwed up and why the decline is not likely to be halted.

#106 juno on 04.15.14 at 2:05 am

This shows you one thing.

Kids / Hipsters are dumb and dumber!!!

They just paid the big buck for a “PROFESSIONAL” house examiners. The guy wrote a document.

The lazy F*cks were too lazy to spend a couple of hours to read the damn thing. Or even ask the examiner what he thought.

Instead they ask the real estate agent which has no regulation to stop them from lying {unlike normal financial occupations). And has only one purpose….SELL SELL SELL at any cost.

And the Beauty is…government keeps on fueling this industry, but doesn’t regulate it

#107 Steve French on 04.15.14 at 6:33 am

Goodness darn you Smoking Man!

Everything’s a travesty with you, man!

And what was all that about Seneca Casino?

What the F, has anything got to do with the Seneca Casino?

What in Dog’s name are you blathering about?

You want a toe? I can get you a toe, believe me. There are ways, Smokey.

You don’t wanna know about it, believe me.

This is what happens when you find a stranger in the Alps!

#108 Millenial on 04.15.14 at 6:43 am

#14 realtors are clueless on 04.14.14 at 6:45 pm

To echo Garths post tonite, I work in the mortgage biz. I deal with realtors on a regular basis. And boy oh boy are they the epitome of snake oil sales men. …
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Indeed, the mortgage broker is the voice of responsibility in the inflated Canadian real estate market, haha.

I’m not defending real estate agents, but have you ever pointed your critical eye at your own industry?

I mean, at the end of the day, you’re SELLING mortgages, aren’t you? How much you guys get into the fine print? You know, like what the banks can do if the assessed value of your home drops more than 20%?

Best lesson I ever learned was buying my first car at the age of 22. I wanted to pay cash, but the Toyota salesperson kept pumping the financing. I was so confused at first, thinking who wouldn’t want cash? I kept telling him I pay cash, but he kept going back to the financing. Financing more than the details of the vehicle.

#109 Bob Rice on 04.15.14 at 6:49 am

@Brutus – post #40:

The LAST thing we will all have to worry about if the Ukraine situation escalates is housing prices…

#110 Stupesing in Cabbagetown on 04.15.14 at 7:05 am

#42 Bargains everywhere on 04.14.14 at 7:59 pm – sorry, but your agent was working in his best interest, not yours. When you went to that open house you lost him his commission. That would now go to the agent of the vendor, not your agent. Of course he discouraged you from buying.

#111 Smoking Man on 04.15.14 at 7:34 am

#107 Steve French on 04.15.14 at 6:33 am

What the hell was that rant about? Steve as a policy try not to do drugs mid week. That’s what weekends are for.

Mid week, philosophy is what I’m saying…

#112 maxx on 04.15.14 at 7:51 am

Booze. Cigarettes. Casinos. Housing.

#113 Sean on 04.15.14 at 7:58 am

Great article… great perspective from the inner workings of the slimy machine!

One observation… As ridiculous as hipster nation has become, let’s not forget the root cause of it all. Hipsters have witnessed nothing but this same behavior from their equally ridiculous boomer parents.

When you consider that we have now witnessed ever more distortionary asset bubbles since about 1995, when Greenspan really stepped on the gas, we have created an entire generation who knows nothing but asset bubbles.

Maybe it is in fact rational to expect bubbles to continue ad infinitum in the new normal!? When was the last time saving and living within your means was actually rewarded in our society!? Honestly?

#114 Stickler on 04.15.14 at 8:15 am

They didn’t read the inspection report

-> it went over their 140-character limit.

Ha!

#115 Just some guy on 04.15.14 at 8:24 am

Maintenance is really important. I am always puzzled when people skimp on it in favour of renovations that may add a lot of eye appeal and sparkle but are functionally not really that much of an improvement. A counter top is just a flat surface to work on in the kitchen. Stainless steel is an alloy that is designed to resist corrosion in a corrosive environment. Do people expect to have airborne acid mists in their kitchens?

One aspect of maintenance that often gets overlooked is brickwork. Mortar should be inspected periodically, repaired as needed, and damaged bricks need to be replaced. On my walks around my neighbourhood, I see lots of chimneys that are in rough shape. I thought there was only one leaning tower but apparently, I am wrong.

I go to some open houses in my neighbourhood and one of the things I check out is the basement. Most houses built before the 1960s used concrete blocks for the foundation and these can be quite porous. These types of foundations will require extensive waterproofing that will cost between fifteen and twenty thousand dollars for a modest-sized house. I almost never see a basement that is dry. There is always evidence of water leakage. This is dangerous in a finished basement because the water builds up, materials rot, and fungus proliferates.

One other area that is often not handled is the roofing. People boast about getting a cheap job done. I like saving money as much as the next person but if a job has to be redone after a few years, and if that shoddy roof job leads to significant water damage because of leaking, it is really a waste of time and money to scrimp on the cost of a roof.

It is also interesting to see how the surface drainage is handled. Ideally, the ground slopes down and away from the foundation so that no water pools alongside the house. One of our friends in the neighbourhood has a nasty neighbour who is very difficult to deal with. After their mutual driveway was repaved, I noticed that the driveway had been shaped so that rather than the water running down the centre and out towards the street, in fact, all the water was pooling along side Mister Nasty’s house. I can only speculate that he had gotten on the bad side of the contractor and now, he has water seeping into his foundation.

It is a house built in the twenties and it is an all brick foundation which are the worst in my experience for water permeability (only slightly better than a sieve and worse if the mortar has failed). It appears that the basement is finished. I would bet money that the amount of fungus in that basement is very, very high.

All of this is to say that the dispatch from the front lines in the ongoing real estate wars is a very telling commentary on the foibles of human nature, the basic dishonesty of the “rock stars,” and the absolute stupidity of people who insist upon following what they believe to be a valid urge but that is, in hindsight, likely to be their undoing.

#116 pbrasseur on 04.15.14 at 8:34 am

When it comes to RE it’s truly amazing how frivolously people will make financing decisions that will affect the rest of their lives.

The worse part of of is how common it has become, we all have a story or two in our entourage.

Most recent one for me, a co-worker who just made his dream come true by buying a mini farm property about 50K outside of Montreal. Made the deal and signed while his current property wasn’t yet sold but he had an offer, the only “formality” remaining was the inspection. Well guess what, the inspection report turned out to be nasty, probably more so than needed to allow the buyer to lower his bid (this is a possible strategy in Montreal coz the market is already turned bad), which he did and the lower bid was accepted. Only problem the price decrease triggered an alarm at CMHC which no longer wants to insure the deal. As a result my co-worker friend ends up with two fat mortgages and a very tough to sell house (he says he barely gets a visit a month). To make things worse he has quit his very good job to get a less paid one closer to his dream.

I mean I feel for him and I really like the guy, but he made some really stupid decisions and dug himself a hole from which he’ll be lucky to recover from ever.

#117 shawn on 04.15.14 at 8:59 am

Them’s Fightin’ Words!

P.Bocanegra at 105 on my Adam Smith paraphrase:

“Also Adam Smith taught that we are all better off when we look out for ourselves. We do that and the market tends to take care of itself. Smith said it’s when someone purports to trade for the interests of others that you really have to watch out.”

Adam Smith never said any of this and its a shame that this stupid twaddle is repeated over and over by simpletons who are just repeating propaganda they have heard.

******************************************
Although not indicated, this was in response to my post at 69.

I “heard” this when I read Smith’s 1776 book – An Inquiry into the Nature and Causes of the Wealth of Nations. That was perhaps 20 years ago.

I hope to locate my copy of the book a little later and find the actual quotes.

Be prepared to eat crow.

#118 Big Brother on 04.15.14 at 9:00 am

#107 Steve French on 04.15.14 at 6:33 am
Goodness darn you Smoking Man!
Everything’s a travesty with you, man!
And what was all that about Seneca Casino?
What the F, has anything got to do with the Seneca Casino?
What in Dog’s name are you blathering about?
You want a toe? I can get you a toe, believe me. There are ways, Smokey.
You don’t wanna know about it, believe me.
This is what happens when you find a stranger in the Alps!

……………………………………………………………………..

Sorry Sir, we programmed Smokey and we have created a bit of a monster. We keep him at Seneca in a smoke filled room. Did you ever watch Lost? Smokey is the original Smoke Monster! As for his obnoxious repartee and insane delusional musings we take full responsibility. He can’t help himself anymore.

#119 shawn on 04.15.14 at 9:04 am

We Scan rather read?

TheCatFood lady at 89…

I scanned your post.

Does anyone here thank that very many people actually read more than a word or three of most posts?

I scan down and read only if something quickly catches my eye.

More that a few paragraphs?, it better be really catchy… (Lack of paragraphs just a block of text? who would bother reading?

Links, especially where the subject of the link is not described or barely described? Almost never would I click. CatFoodlady of course introduced here link properly, which is rare and I might even click it later.

Garth apparently reads all and clicks many links. I am amazed he can do it. I bow down that dedication.

#120 Ralph Cramdown on 04.15.14 at 9:12 am

#113 Sean — “Maybe it is in fact rational to expect bubbles to continue ad infinitum in the new normal!? When was the last time saving and living within your means was actually rewarded in our society!? Honestly?”

Asset bubbles aren’t the “new normal.” They’re the OLD normal. Going back in time: Real estate, China, Internet stocks, Japan, real estate again, the “Nifty Fifty,” conglomerates, electronics and defence stocks, vertical integration, horizontal integration (“trusts”), railroads, canals, emerging markets…

Saving and living within your means has ALWAYS been rewarded, with the caveat that the savings must be invested to counteract inflation (most important in the 1970s, but always an issue). Levering up and getting rich in asset bubbles has also always been rewarded, for those skilled or lucky enough to get out before the bust.

Nothing much has changed, really. I guarantee that there’s lots of readers here who saw your post and thought it ironic that you’d ask it on the 15th of the month (an auspicious day for many “savers”), and others who think that momentum and leverage are the way to go, as they usually are. That’s what makes markets.

The third major group, of course, are the born losers; they who believe that it’s different this time, who think penny stocks are a way to get rich without hard work, who are drawn to the writings of numerologists or apocalyptic Cassandras, or who can’t do a simple game theoretic analysis on Ukraine or whatever the next crisis du jour is, who think that the last year’s (or decade’s, or generation’s) hot asset class will keep going up, etcetera.

#121 T.O. Bubble Boy on 04.15.14 at 9:19 am

$900k House of the Day for Tuesday, April 15th:

3 Finalists
1) A 2-bdrm/1-bath $918k house in Smoking Man’s favourite hood… priced like it was already torn down and re-built (not some “cozy” 2-bdrm)
2) $950k tear-down, also in Smoking Man’s favourite “up and coming” RE area (Long Branch)
3) $999k “Priced To Sell” tear-down at Weston/Sheppard

WINNER
#2: While I agree that detached SFH in areas like Long Branch were a good investment at one point… I can’t believe that the old pre-tear-down houses are now priced like they are new/re-built houses.

#122 Derek on 04.15.14 at 9:31 am

Fear mongering much? The indexed dropped in 2009. Stalled a bit in 2012. Peaked last month…yaddi yaddi yadda.

A blip over 25years period. The uptrend will resume shortly.

#123 Smoking Man on 04.15.14 at 9:47 am

#121 T.O. Bubble Boy on 04.15.14 at 9:19 am

It really sucks, nevo rich are in full fledged assault on the hood, lost is my toothless buddy, wine bottles not getting picked up.

Even those low life trailer trash kids that spray painted my fence have vanished..

I left the country club, the mansion in pursuit of an environment rich in economic diversity to fertilize the mind of the most prolific future writer the world has ever known.

Damn

#124 learningfromyou on 04.15.14 at 9:53 am

Thank Garth for this post
But there are other people that are drinking from the same cooler with realtors, these are the inspectors.
It’s a good day because yesterday I did not come to work and I have pain in my hands today for doing a big fix at home.
I was an inexperience buyer in 2009, my family was living in a cold basement to save money for a down payment and she fall in love for a property where “honest” people lived, old people, “nice ones”.
The freaking owner allowed cutting one of the main beams of the house to allow the air conditioner pipes to pass through and the inspector did not include anything like this in the report.
It was noticed when I had to the floor of that section of the house and yesterday I put a new beam together as it should be.
I’m sorry for my tone, it was a hell of job and my advice to everyone, BE CAREFUL with the baby boomers because they will try to pass their burden to anybody else while selling.

The inspector’s waiver, I only check for visible things.
After my analysis today I conclude that there were enough data to detect the problem and included in the freaking report

#125 And there they are.... on 04.15.14 at 9:59 am

http://toronto.ctvnews.ca/housing-prices-in-toronto-vancouver-expected-to-rise-again-re-max-1.1776538

#126 Aggregator on 04.15.14 at 10:19 am

As expected, it turns out CREA did change its monthly PR report that now excludes national, provincial and city statistics, and only includes a few sales and HPI charts.  

Everything will be dictated with charts and index points from here on.

#127 Shawn on 04.15.14 at 10:22 am

P. Bocanegra, your crow is served!

P.Bocanegra at 105 on my Adam Smith paraphrase:

“Also Adam Smith taught that we are all better off when we look out for ourselves. We do that and the market tends to take care of itself. Smith said it’s when someone purports to trade for the interests of others that you really have to watch out.”

Adam Smith never said any of this and its a shame that this stupid twaddle is repeated over and over by simpletons who are just repeating propaganda they have heard.

*****************************************
I noted at 117 that I would look up the actual quote from The Wealth of Nations.

Easier than I thought, of three flags I had placed on the book, one covers this area. It’s there in Book iV, Chapter II, the fourth page in.

The sentences I refer to are immediately after the famous invisible hand remark.

Adam Smith said:

“By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.”

From that I would judge my paraphrase to be spot on.

This particular simpleton happens to know his Smith. If that is twaddle it’s Smith’s own twaddle.

Game, set and match?

#128 Meck on 04.15.14 at 10:28 am

Great post. Seven years ago I put in a bid on a fixer-upper. The real estate agent made the mistake of leaving me alone with the inspector as he wrote up his report. I asked him if I should buy. He flatly said no. He cost $450, but I consider it money well spent.

#129 miketheengineer on 04.15.14 at 10:28 am

Garth et al:

When Magna downsized me in 2009, I took all the home inspector courses…not because I wanted to become an inspector, but I need some additional knowledge, so that when I buy and sell a place, I can see with my own eyes what I consider to be issues.

This is what I learned from the “experience”. (1) You can’t see behind the walls. (2) Having “thermal imaging” camera would be a huge benefit to see what issues are in the walls (3) a “sniffer” would be good to check the heart of the furnace (gas leaks are a bitch, since they may required a replacement of the furnace and big bucks), (4) Finished basements, are usually finished without permits, and require extra time to check stuff, (5) Customers want a quick and cheap inspection, and don’t want to pay more than 200 bucks for one. (6) To properly inspect a home can take 8 hours depending on what you find.

As an inspector, the customer wants you to assume all the “risk”, and does not want pay a professional fee for the service. The industry pumps out hundreds of “inspectors” every year, and some do a great job and others, well, want to walk through your home in 1/2 hour and give you a 50 page “generated” report and grab a quick 200 bucks. (without the sniffer and without using the thermal imaging camera)

In my opinion, if you spend 1 million on a home, you can afford to put a clause in the contract, and have an electrician, plumber and roofer come in to check it out. Otherwise, like the judge says, “you signed the contract”, shame on you if you get burned.

Buyer beware….! There are con artists, that will take your cash everywhere.

#130 Suzie Q on 04.15.14 at 10:38 am

This story brings to mind a house I looked at last summer. Outdated, dingy, and a significant crack in the basement wall running the length of the house (likely requiring bracing). It was listed at 290k.

Fast forward 7 months, the same house is back up for sale. Photos show new paint and flooring on main, and new framing and insulation in the basement – no mention of bracing or repair to that cracked wall. Listed at 330k.

I wonder, if I approach the new buyers after it sells (because it will), will they be aware of the problem lurking behind that new insulation?

Sad. The whole industry is playing a game of hot potato – better hope you’re not the one holding it when the game is over…

#131 45north on 04.15.14 at 10:53 am

Victoria Tea Party : Eventually the plugged drains of these peoples’ financial lives will knot up and explode into a bleary-eyed onrush of blood-curdling screaming and yelling for “Government to do something” to save their worthless hides

well they’re not yelling now. It’s funny they’re sitting on a $800,000 mortgage driving a leased beemer, life is good. No when the gig’s up they’ll know. The gig’s up.

#132 Joe on 04.15.14 at 11:08 am

Hipsters are about as original as a tattoo.
They are just doing what they are told.
Millions of dollars goes into programming these sucker punched cats…

Bang Bang Maxwell’s silver hammer…

#133 Aggregator on 04.15.14 at 11:19 am

LOL

Ottawa Real Estate Board

Ottawa, April 11, 2014 – Due to an input error when collecting our March statistical reports, the stats we previously released were found to be incorrect. This error caused us to under-report the number of units sold, consequently affecting the average sales prices. We have now rerun the reports and have provided you with the correct, updated statistics for the month of March 2014. We have put procedures in place to ensure that this will not happen again. We sincerely apologize for any inconvenience this may have caused.

What happened Klump? Did your goal seek target for sales and average price miss?

#134 april on 04.15.14 at 11:20 am

#99 – I have heard that it will be more difficult to sell condos that don’t do depreciation reports???

#135 T.O. Bubble Boy on 04.15.14 at 12:01 pm

HOME PRICES SPIKE
(headline on BNN today)

#136 Beltline Renter on 04.15.14 at 12:05 pm

I fail to see the issue as most of these hipsters are bank rolled by mom and dad.

when I think of all the people I know who have bought houses in the last decade only 2 couples out of 15 did it completely on their own. the rest had help from parents.

so when it goes bad they will sell and move back home.

no risk.

#137 jess on 04.15.14 at 12:21 pm

http://wallstreetonparade.com/2014/04/insiders-tell-all-both-the-stock-market-and-the-sec-are-rigged/

http://blog.themistrading.com/cutting-the-line-and-order-types/

…”2,000 pages of documents newly released by the SEC in response to an American Lawyer Freedom of Information Request sheds fresh light on the Abacus case

Read more: http://www.americanlawyer.com/id=1202650075059/The-SEC%27s-Internal-Battles-over-Goldman-Sachs-Probe#ixzz2yyLiCkPx

#138 Snowboid on 04.15.14 at 12:32 pm

#99 Robbie on 04.15.14 at 12:26 am…

Red flags pop up with any strata voting against a depreciation report – unless we are talking about small stratas that vote against the reports because of cost.

Either way, if you think a strata has fees that look too good to be true, it likely means they aren’t budgeting properly for long-term replacement costs.

I’ve seen these stratas with low fees, the plan is to use special assessments to fund major repairs.

All of this doesn’t matter yet in the Okanagan, where rents are still substantially lower than the costs of owning a condo.

Patient as ever…

#139 Holy Crap Wheres The Tylenol on 04.15.14 at 12:34 pm

I have talked to so many friends that wanted to move back to the hood where they grew up in Toronto that have purchased older homes. They have gone in blind because their realtors have said and I quote” You have to go in full price or higher, don’t ask for a home inspection and go in firm, no conditionals” That’s the only way you will get this property. This is insane, they are plopping down in some cases $850K to $1M for a 50 or 60 year old homes (not super upgraded) without an inspection. These real estate agents have got a good gig going with this crap. The whole system is criminal, I really wish the market would crash and we could back to reality. I hope it doesn’t last forever as quite a lot of people are going to suffer the consequences. How does that saying go? “you can put lipstick on a pig but it’s still a pig”

#140 Chickenlittle on 04.15.14 at 12:49 pm

Wow…hipsters getting married, having kids, and settling down in a “new” home…how mainstream. Its too bad for them…they’ll never get credit for it because their parents did it first, waaay before they even heard of it.

#141 Chickenlittle on 04.15.14 at 12:51 pm

If a tree falls in a forest, and no one is around to hear it, will a hipster buy the soundtrack?

#142 Smoking Man on 04.15.14 at 1:06 pm

Popcorn and beers, War is On.

Still haven’t decided who to cheer for, Russians or the IMF

#143 Chickenlittle on 04.15.14 at 1:14 pm

Maybe if the inspector had put his report on vinyl these hipsters would know what he found. (That was the last one, I promise!)

#144 airhead princess on 04.15.14 at 1:18 pm

DELETED

#145 Victor V on 04.15.14 at 2:03 pm

Kudos to those who listened to Garth’s advice and loaded up on REIT ETFs when they were on sale a few months ago.

https://ca.finance.yahoo.com/q/bc?s=XRE.TO&t=6m

#146 Nemesis on 04.15.14 at 2:09 pm

#FunnyOldWorld #HeartBrokenMaoTaiCadres #BadHairDays

“…county-level officials, who typically spend the most time at banquets among all ranks of government, on average attended 12.2 banquets per week last year, down from about 18 in 2012.” – Zhang Zhongliang, Director, Statistical Education Centre, China National Bureau of Statistics

[SCMP] – Chinese official dies after drinking too much first day on the job

…”Authorities investigating the incident concluded on Monday that Zhong Xiefei, who had just been named deputy chief of Qianjiang township in the city of Laibin, died from excessive drinking. Seven other officials who drank with him have been fired.”…

http://www.scmp.com/article/1482811/official-dies-after-drinking-too-much-first-day-job

[UK Telegraph] – London hairdresser visited by North Korean agents

…”A London hairdresser, who used a photo of North Korean dictator Kim Jong-un to attract customers having a “bad hair day”, was visited by embassy officials who demanded its removal because it was “disrespectful” to their supreme leader.

Mo Nabbach, the manager of M&M Hair Academy in South Ealing, had to call in police after the two North Korean agents took photographs of his shop window and…”…

http://www.telegraph.co.uk/news/worldnews/asia/northkorea/10767926/London-hairdresser-visited-by-North-Korean-agents.html

#BonusInCountryRetroZen #”LoveYouLongTime” #MPAA: PG13

http://youtu.be/12tce-THLUE

[NoteToSaltyCinephiles: Not a lot of people know that that was shot on a giant set erected in London’s Docklands… better known today as CanaryWharf. NefariousAfterthought: Small wonder their national currency is called the “Dong”, eh?]

#147 HD on 04.15.14 at 2:25 pm

@ Ralph Cramdown

I am looking to learn more about ‘Game Theory’. Can you recommend a good book about the topic?

Thanks.

Best,

HD

#148 Smoking Man on 04.15.14 at 2:28 pm

Priceless, McWynne on Twitter,

We finally got rid of coal powered electricity.

Then the chirps, I even got my 2 cents in….

Priceless…

#149 eddy on 04.15.14 at 2:41 pm

It’s hard to sympathize with hipsters who know nothing about construction. I’ve seen countless houses in 416 that i thought were ‘too far gone’ to reno, ie they should be bulldozed. Yet there’s always some reno artist ready to drywall over the convex bow in the 100 yr old brick foundation; you know, the type of masonry that has sand where mortar used to be. In no time it’s back on the market with a renovated basement, and here comes the inspector with a form for the buyer to sign that says ‘I can’t see through drywall’. Dry-walling over garbage foundations, and the subsequent problems (leaks, mold etc )have also been featured on those HGTV reno shows.

#150 Banjopete on 04.15.14 at 2:55 pm

@Steve French

Apparently a loosely quoted gift of american cinema was wasted on the readers of this pathetic blog.

Also I’m amazed at the flippant way people make $500k decisions when you hear the scrutiny with which they contemplate whether or not to “upgrade” to the iphone 7S.

#151 Pope Sexballoon Snugglebums the 666pm (aka Nosty) on 04.15.14 at 3:01 pm

None of this has anything to do with, or is remotely connected with RE, as RE is a bit player now.

#93 Smoking Man on 04.14.14 at 11:10 pm — “The heartbleed hack…Vladimir, there is a story behind the story…”
— and —
#143 WhiteKat on 04.15.14 at 1:46 pm — “FATCA is about control of all world financial institutions, and about confiscation of the assets of other countries.”

Ahh yes. FATCA, gold-backed ruble / yuan and Heartbleed. Curious. Do these have any connection(s) with the spread of the Ebola virus / what is happening in Nevada or Texas with the two ranches (land grabs) / been used to disrupt and reorganize ObamaCare / control MH 370 / designed to frame Russia for eliminating the private-for-profit central banks a while back / in alignment with the first of the four blood moons / a diversionary tactic / or similar to the USA – Israeli created Stuxnet virus which shut down the safety panels at Fukushima just before the ‘quake on 3-11-11?

Out of chaos, order, Communist takeover, Securitization of Assets (In Europe, but happening all over the west), #1, #2, #3 or #4.

Oligarchy or Democracy?

In conjunction with the four blood moons, Mars – The Bringer of War has appeared on the horizon, plusFlesh eating disease increasing.

SMan, no one has mentioned China yet.

#152 Aggregator on 04.15.14 at 3:05 pm

List of Toronto (416) SFHs sold in mid April with listing price history – Table

And this is the SP/LP distribution curve of those listings, based on sold vs last list price. Chart

About 30% of 416 SFHs homes are selling over asking price, but that's based on last list price, not orginal list price, so you could estimate between 22-26% of SFHs are selling over asking price. 

Now you know why organized real estate is a control freak with data.

#153 tkid on 04.15.14 at 3:17 pm

#136, so when it goes bad they will sell, is one heck of an assumption.

If it goes bad and they were 5% down, they won’t be selling. Not at a price where they can break even. So they either come up with the difference between what they got from the sale and what the mortgage is, or they declare bankruptcy.

If they declare bankruptcy they will be flagged every time they apply for a new mortgage. It’ll make it more difficult for them to buy a home in the future. In the US, it’s been a trend where anyone who had any sort of red flag on their credit report – failed to pay a bill one time was one example in the news report – meant they could not get a mortgage.

What’s the trend there? Fewer hipsters 10 or 20 years from now will be homeowners. That means less demand for houses in the future. And that means lower prices for those who have squirreled money away and want to buy a home.

#154 Habs76-79 on 04.15.14 at 3:20 pm

Just some thoughts.

First, I’m far from preaching that I have never made mistakes in my life including financial ones. I grew up in a normal blue collar household and my parents did well to give me and my siblings a rather normal life. They too made mistakes, to this day my father can talk on about some he made that set him back financially especially after my mother passed away. So with this a few words.

Smart people will learn from their mistakes, but the smartest people will learn from other people’s mistakes.

Some of the best lessons in a child’s life are to experience real disappointment. As a child such an experience will help you learn to better appreciate the good things you may receive in life.

One of the best words to hear as a child and to hear it more often than not is the word “NO”.

Parents who shield their kids from disappointment at young ages are not doing them a service for later in life. Parents who refuse to say “No” to said young kids are going to reap what they sew in having kids who will EXPECT ALL, believe they are entitled that they are special. This lack of saying “no” will only harm them later in life.

As to “special”, we are all special to someone or others, mostly family and maybe friends but other than that none of us are really that special to the greater society. The world will not skip a beat when any if us are gone. The most significant persons in the world have and will pass on and life goes on with nary a hi-cup. So we need whether we are rich, poor, well connected or not to see that in the end the the world outside our family and friends couldn’t give a flying BLEEP after each of us are gone. If my words here shock some of you, well too bad, truth hurts at times. If you grew up and are living a shielded life, well it has served you poorly

Parents do not owe you THINGS in life. They do not have to give you entitlements. They only need to responsibly give you a home, fill life’s needs, hopefully give you love and lots of guidance. Any other stuff is froo froo and icing, not entitlements.

#155 Gainsaywhodare on 04.15.14 at 3:22 pm

This is an excellent post. A gospel for everyone wanting to buy a home, whether new or used. Most of the time, all activities pertaining to real estate transaction are, just that, transaction. Agents, lawyers, painters, roofers, renovators, the furnace guy, etc., they are all after the transactions. People typically overlook all the needed repairs when buying a house. Not many buyers prepare themselvese for the worst case scenario. While it is true that everything is fixable, it depends largely on how deep your wallet is. And if you think you can hire someone to fix the problem, don’t be surprised to find out after you have paid thousands of dollars that it isn’t done properly. As I said, everybody is just after the transaction. They don’t live there, so they get in, take your money, and get out. You are the one left with the house, the [email protected] repairs, and a lot less money.

Every house has problems. The older the house, the more problems, and the more costly it is to fix. With older houses, it is guaranteed the more drywall you rip out, the more problem you will find. And then the home owner if faced with the big dilemma, “how much more money do I want to soak into this house when the next person who buys it is going to tear it down anyway?” These are things that inexperience buyers don’t often consider until it is too late.

#156 Brutus on 04.15.14 at 3:35 pm

News breaking now: Ukraine forces on the move

http://www.cnn.com/2014/04/15/world/europe/ukraine-crisis/index.html?hpt=hp_t1

Obama had a “very tense” phone talk with Putin according to US sources.

Sh!t, meet fan.

#157 Calgary claustrophobia on 04.15.14 at 3:49 pm

Wanting something to happen does not make it a reality. Calgary housing prices are high. Rentals are also high. There are no rent controls and not many rentals(check rentfaster.ca). If a person is able to rent and invest and retire soon they will be ok in Calgary. Otherwise a person will lose tons of money on rent. I know. Ive been through this for 5 years to the tune of $75,000 out the window in rent in Calgary. Compound that with tight city demographics, tight traffic, and a new york attitude. I had 4 people tailgate me in the last 24 hours and I drive very fast. Unless you have a rock solid job and a decent place to move I would dissuade anyone to moving here, dont do it unless you have to for work. This is only 2014. The city infrastructure and roadways wont be able to handle more and more people. As shown by the five murders last night people oftentimes get crazy violent for many various reasons. For those wanting to use the information on this blog it is best to live in a small community because most of what is written here doesnt apply to large cities in Canada. There is a forecast of a large dump of real estate sales which will drop prices. That doesnt seem to be happening in Calgary. If anything, it is the opposite. Save yourself a big hassle and look at real data and trends before you decide against getting your own place rather than taking a gamble that things will implode, and if that isnt feasible consider relocating away from the rat race.

#158 Shawn on 04.15.14 at 3:50 pm

Stirring the Pot of Gold

A new book called the unauthorized biography of money appears to claim that all money is credit (And is not outraged by the idea).

It even claims that currency is not money. It just represents money.

It makes an interesting point, if Gold were the only real money, with what would one purchase Gold? Gold?

Absurd it says…

Yeah so all money is an IOU. If someone has money someone(s) owes them something.

I have claimed (based on things Buffett has said) that a dollar bill is an IOU from no one inparticular but is a claim check on the goods and service of the economy.

Anyhow, this is all too complex, what we all need to know is how to accumulate more wealth and more money.

#159 Vamanos Pest on 04.15.14 at 4:03 pm

Hey Garth, you mentioned the effect on the market of the CMHC no longer covering sales over a million. Might be interesting to do a comparison of houses in the 900k range to the 1.1 M range. I bet that extra 200k gets you an awful lot, given the number of people with 250k cash (20% plus some closing costs and taxes) to put down is zero.

#160 Old Man on 04.15.14 at 4:09 pm

#151 Pope – you failed to mention the Ebola virus case in Canada that Caesar covered-up in Saskatoon recently.

#161 TnT on 04.15.14 at 4:10 pm

Hipsters set the trends and the “new” trend will be to live in a dilapidated house….

Problem solved……

#162 Ralph Cramdown on 04.15.14 at 4:24 pm

#147 HD — “I am looking to learn more about ‘Game Theory’. Can you recommend a good book about the topic?”

Sorry, I’ve never read one. Try Amazon to see what reviewers have liked.

As applied to the Ukraine situation, it’s pretty straightforward, I think. If the Americans were to engage the Russians militarily, what advantages would each side have? Superior arms but national indifference, war-weariness and VERY long supply lines versus short supply lines, home field advantage and a patriotic, possessive national mood toward the territory.

What would be the advantages of a win for either side? For the US, slight strengthening of international position, blocking Russia from her sole Western/Mediterranean year-round port, weakening of Russia as a regional power. For Russia, a dramatic weakening of US power.

What would be the consequences of a loss for either side? Dramatic weakening of US power, devolution from sole-superpower to multipolar world. Or for Russia, the devastating loss of that port and a weakening of regional power status.

Conclusion: In a war, the Russians would have much to lose and everything to gain, and the theatre location favours them. The Americans have little to gain, but everything to lose.

If the Americans don’t fight, control of Ukraine returns to the status quo for most of the last hundred years, and maybe the Russians get tied down in a protracted guerilla war for the next few years, with more occasional bombings in Moscow.

The above is all stuff that strategists in the Pentagon, the Kremlin and the capitals of Europe know. Only the loons think a shooting war between Russia and the USA could possibly break out.

#163 Bargains everywhere on 04.15.14 at 4:30 pm

#110 Stupesing in Cabbagetown on 04.15.14 at 7:05 am

You are incorrect. When we went to the open house we told the guy that we were working with an agent. Our agent would have presented the offer on our behalf so he would get his portion of the commission.

#164 takla on 04.15.14 at 4:43 pm

being a bricky for the last 40 yrs tells me a lot about that home under the chimney.The chimney was originally build at a time before the evolution to type s masonry cement which would put it at least 75 yrs old.As theres no masonry left between the bricks it was constructed with lyme mud.Thats a combo of lyme and sand which inheritantly had little long time resistance to weather as well as reduced strength over modern masonry products.The home may be constructed better than the particle board ,spliced two by four framed homes of today but all the mechanics ie plumbing,heating and electrical will be long out of code.Funny what you can tell from just a chimney….

#165 Assqutch on 04.15.14 at 4:50 pm

Nice new picture, Garth.

#166 Doug in London on 04.15.14 at 7:10 pm

While going around town yesterday, I heard Back in Black by AC/DC, then in the evening watched a show about when Mount St. Helen blew up. They both happened in 1980, so I went on another nostalgia trip to that year. It was also the year there was a mad panic to buy gold at $800 an ounce, or about $2000 in today’s dollars (more than the recent peak of $1900). What’s happening with these hipsters buying overpriced houses now is just like the lineups of gold buyers in 1980. I’ve seen this movie plot before, so I’ll just get a bag of popcorn and a drink and watch it all unfold.

#167 joe campbell on 04.15.14 at 11:36 pm

insulation is just as bad as asbestos, both are dangerous for your lungs. as in any foreign matter including things like cotton.

the focus on asbestos is really centered on us protectionism and defending their mineral fiber mining while forcing us to close ours.

should not be so ignorant.

#168 shawn on 04.16.14 at 1:25 pm

How to get Rich…

Man who spends all income each year and does not invest, can never accumulate wealth

Man who borrows to buy house and eventually pays it off ends up with wealth equal to value of house.

Man who invests in ways other than house may become far richer than house owner if his investments return more than house investment would. (Bank share investor, for example). These people are very rare. Investors tend to be home owners. There may be times, possibly today, when this strategy is the most logical.

Man who buys and pays off house and who invests beyond that, over a working lifetime, is likely to accumulate significant wealth.

I picked door number four. To each his own.

#169 nomad on 04.16.14 at 1:26 pm

I wonder if people in NewYork city went through what we’re going through: for years, being frustrated at increasing house/condo prices, only to see them keep going up, year after year. Just like Toronto, not everyone in NewYork is a financial rockstar, yet that didn’t stop their prices to go up.

Similar with Paris. My wife worked there and you get half the space for double the price as Toronto. That’s why so many french people move to Montreal.

Maybe we’ll all just end up spending a larger amount of our paychecks to our rent, or condo mortgage. Some will work harder. Some will spend less. Some will fail when rates increase. But prices will keep creeping up, and Canadians will start complaining like the French ;]

#170 nonplused on 04.16.14 at 8:41 pm

Something similar happened with my house. Some insurance companies won’t insure certain types of plastic plumbing for water damage and they are quite jerky about it. My house is a ’96 and it has the questionable piping, despite being otherwise fairly sound. It can be replaced of course, but it’s going to be at least $10,000 if I decide to go that route. And that’s cheap because I have a lucky design where most of the main runs are accessible through ceiling tile in the basement and they should be able to pull new plastic in to the other areas by attaching it to the old pipe and, well, pulling. But it’s still a pain in the wallet. And what do you get? Water where you already had water.