# Good for a laugh



## jamesbe (May 8, 2010)

This guy makes fun of Toronto MLS listings.
http://fmlistings.tumblr.com/


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## Jungle (Feb 17, 2010)

We could start a new show called "million dollar bungalow." We can get a contract form HGTV-I'm sure it will be a hit. 

Just think of the potential.


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## financialnoob (Feb 26, 2011)

Great link, thanks for sharing.


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## dogcom (May 23, 2009)

Toronto seems more expensive then Vancouver looking at that link.


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## NotMe (Jan 10, 2011)

financialnoob said:


> Great link, thanks for sharing.


Not so sure it's a great link - the guy comes off like a bit of whiner. ("ooh people who like starbucks are vapid idiots") blah blah blah. Don't like it, don't buy it. I don't understand people who will spend $500,000 on a maseratti but hey, knock yourself out if you have the bucks people...


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## financialnoob (Feb 26, 2011)

NotMe said:


> Not so sure it's a great link - the guy comes off like a bit of whiner. ("ooh people who like starbucks are vapid idiots") blah blah blah. Don't like it, don't buy it. I don't understand people who will spend $500,000 on a maseratti but hey, knock yourself out if you have the bucks people...


I don't recall a post that claims people who like Starbucks are vapid idiots. There was one post mocking people who would spend $1M to buy just the top of a house in a nice neighbourhood who would argue over which Starbucks to go to (because the listing mentions there are 10 nearby), but that's a totally separate thing and has nothing to do with people who like Starbucks. It doesn't imply people who go to Starbucks are stupid. Nor does it claim all stupid people go to Starbucks. 

Though I'm guessing I know where you go for a cup of coffee every morning...  j/k

I'd also argue that many of these people don't actually have the bucks.

And people really can't make fun of anything without someone else finding it whiny or offensive or whatever. If you don't like the humour, that's understandable. But at least read the posts as they are written, not as you want to interpret them.


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## uptoolate (Oct 9, 2011)

Yes I like the site. Really just shows how out of control things are in Toronto. I mean it's not like some of these places are right downtown or anything. I feel badly for people that feel they have to buy into the market.


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## ddkay (Nov 20, 2010)

Thanks I bust my gut reading through these lol


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## ddkay (Nov 20, 2010)

I just submit this one

http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=11466551&PidKey=-452936246

"A good opportunity for investors!" - This thing looks like it's actually losing value. No pictures, little details.. The marketing to investors vs. home buyers is so annoying and plays a big part in this madness.


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## ddkay (Nov 20, 2010)

I might take a picture of this at my neighbourhood bookstore and submit it too

Investing in Condominiums: Strategies, Tips and Expert Advice for the Canadian Real Estate Investor


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## NotMe (Jan 10, 2011)

financialnoob said:


> I don't recall a post that claims people who like Starbucks are vapid idiots. There was one post mocking people who would spend $1M to buy just the top of a house in a nice neighbourhood who would argue over which Starbucks to go to (because the listing mentions there are 10 nearby), but that's a totally separate thing and has nothing to do with people who like Starbucks. It doesn't imply people who go to Starbucks are stupid. Nor does it claim all stupid people go to Starbucks.
> 
> Though I'm guessing I know where you go for a cup of coffee every morning...  j/k
> 
> ...


First, most people say I have a good sense of humour. But here's the posting from the site that lead me to believe he was making fun of people who go to starbucks. And for the record: I don't drink coffee. I just think there's a reason why a tiny 1-room condo at bay/bloor sells for a lot of money that just looking at would make you wonder. And I don't think most people buying in rosedale are reaching.

And no this doesn't make me a bull, or a bear, or a tiger or a llama. Just a guy who thinks there's a certain meanness or perhaps just "unnecessaryness" to this site. 
-------------


http://80crescentrd.com/details/

So, here’s the top of a house for sale at almost a million dollars with maintenance fees at $650.00 a month. That’s awesome. Being sold as “A Slice of Paris”. So… because I have nothing better to do on a Saturday night (unless someone can hook me up with Leafs tickets…please…) I spent time and researched to see if that meant that people in Paris typically buy million dollar units being sold as condos that are really just the top floor of a house - but my results came up with nothing. I’m sure this Realtor is right though.

Other important things? It’s fully outfitted with pot lights, but more importantly AND THIS IS IMPORTANT SO PAY ATTENTION… the listing says the property is “Within walking distance of 10 Starbucks”. SOLD!

You really want to live in Rosedale that bad eh? This will be your life:

”Hey honey, which Starbucks do you wanna go to tonight? Our mortgage is paid for this month and interest rates didn’t rise yet so we have enough for two Americanos and maybe maybe even a flavour shot.” 

“Good question dear, maybe we’ll go to Starbucks #3”

“Aw really? I was hoping we’d go to Starbucks #6, they have the nice washrooms.” 

“Oh sweetie, you’re so cute… how about let’s settle and go to Starbucks #5?” 

“I love you shmoopy, I’m so glad we bought this attic so we can choose from so many Starbucks’”

“Aww I love you boopy, life is so great isn’t it? We live in such a great society where we can choose from so many Starbucks’” 

“I know, I’m so in love with our lives. I mean, I’m sorry that we’re house poor and have to live in the roof of a house, but let’s go get some lattes and come home and sit under the pot lights” 

“D’aww it’s not your fault that we’re house poor and we live in an attic. Come on let’s go to Starbucks #7, it’s a little bit closer than Starbucks #3 and Starbucks #5”

Conversely, here’s a 2 bedroom condo in New York City, the Chelsea area to be exact (which is an awesomely awesome area) it’s also not the top of someone’s house, and it’s $150,000.00 less than the Rosedale roof. 
http://www.trulia.com/property/3039578695-Coop-New-York-NY-10001


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## ddkay (Nov 20, 2010)

Well they have to nitpick on something. In its proper neighbourhood context, and other than being extremely cramped yet 1786 sq ft, that Rosedale attic isn't too bad for the price (to be honest about it, it should still be priced lower). However, the maintenance fee is nothing to brag about. It looks bloated -- electricity not included, none of the typical amenities you find in every other cookie cutter luxury condo (24 hour manned security? pool? tennis court? room service? private shuttle bus? party hall?). Taxes are separate so you can't blame the city. Why is it so high? That's what makes me wonder...

Looks like they put up the neighbourhood walk score too, 80/100: http://80crescentrd.com/neighbourhood/


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## donald (Apr 18, 2011)

I'm glad i don't live in toronto(i fully understand it's a world class city)but....not only are the houses expensive to be honest there sh*tholes(not trying to be offensive just m.o)....you can get a house ten times nicer in say whiterock bc to draw a comparison for a mill and your close to the ocean and have beautiful trees ect(not to mention 4k sq ft)If any city is going to catch the brunt of a downturn toronto will be hit the hardest in the bubble.


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## ddkay (Nov 20, 2010)

World class city is just the image they try to sell you. More than 100,000 people move to the GTA every year. 70% of all of them drive. Provincial politicians don't care about regional issues, public transportation has always been terribly funded and so internally corrupted that service never kept up and expanded with the sprawling city. Commute times are going to keep getting worse. North Korea has cleaner and more architecturally intricate subway stations than we do. We have fare collectors that are just killing time when you walk by their booth and flash something. Anything. Most of the time they don't even look up at you to see if you are carrying legitimate fare. You could flash a candy wrapper, walk through the turnstile and no one would notice. Electronic fares? Not coming until 2015.


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## donald (Apr 18, 2011)

I have visited toronto(2 yrs ago)caught a raptors game(friend of mine is a coast gaurd,living in toronto)and "hit" the night scence.It kinda reminds me of chicago(for some reason,lived in chi town for a yr).Got LOTs happening for sure....def a "rush" about it,really is a fast moving city "jungle" Vancouver is much much mellower and has a ''relaxed" vibe....t.o vibe is FASt i noticed.


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## financialnoob (Feb 26, 2011)

NotMe: That is the post I was referencing as well. And I didn't mean to question your sense of humour. But I still have absolutely zero clue where you concluded the writer was suggesting Starbucks drinkers were vapid idiots.

The key paragraph is below, where the writer is mocking the surprising significance of mentioning there are 10 Starbucks within walking distance in the ad. In fact, it is listed right after subway access, as if it's one of the most significant features of the property. In fact, it might be.



> Other important things? It’s fully outfitted with pot lights, but more importantly AND THIS IS IMPORTANT SO PAY ATTENTION… the listing says the property is “Within walking distance of 10 Starbucks”. SOLD!


It's not saying Starbucks drinkers are vapid idiots. It's mocking anyone who would consider that to be a major selling point to be a vapid idiot. Big big difference.

It also mocks their ability to afford the place, as well as mocking the recent obsession with pot lights. The writer also loves to make fun of poor ads which feature zero pictures, spelling mistakes, lack of description, or silly things (such as mentioning 10 Starbucks within walking distance with no mention of schools). But there is absolutely nothing in there suggesting Starbucks drinkers are vapid idiots. I'm not defending the style or sense of humour of the writer, just what they wrote. That's all I'm saying.

ddkay: Scarily enough, you're right, it really isn't that far off the mark for that neighbourhood. Though I guess that's part of what makes it hilarious and depressing at the same time.

And you're totally right on the mark about the city ignoring the lack of public transit infrastructure. It's pretty ridiculous.

donald: You wouldn't be thinking it's a fast city if you were stuck on the DVP in rush hour 

For Torontonians, NYC and London are FAST and probably make us think of Toronto as Vancouver by comparison. It's all relative I suppose.


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## crazyjackcsa (Aug 8, 2010)

I noticed the pot like thing. What's the big selling point for pot lights? I have a few, because I don't have the headroom in my basement for a standard light fixture.

I guess I could list my house and mention the 15 pot lights I have. 

It's no wonder people have been calling for a crash. Toronto is insane.


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## The_Mechanic (Jan 6, 2012)

My god that site is freaking scary. In my city you can buy a freaking mansion, a domain even for 1.5 million. Prices in Toronto are off the freaking scale!!

Heres a house just a few streets up from me, selling for just short of 1.3 million. I think its got the 4 bedroom 2 bathroom Toronto home beat hehe: 

http://passerelle.centris.ca/Redirect2.aspx?CodeDest=ROYAL&NoMls=ES8547984&Source=MLS.CENTRIS.CA&Langue=F










Heres another: Selling for 1.2 million.

http://passerelle.centris.ca/Redirect2.aspx?CodeDest=ITEK&NoMls=ES8643234&Source=MLS.CENTRIS.CA&Langue=F


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## Causalien (Apr 4, 2009)

financialnoob said:


> NotMe: That is the post I was referencing as well. And I didn't mean to question your sense of humour. But I still have absolutely zero clue where you concluded the writer was suggesting Starbucks drinkers were vapid idiots.
> 
> The key paragraph is below, where the writer is mocking the surprising significance of mentioning there are 10 Starbucks within walking distance in the ad. In fact, it is listed right after subway access, as if it's one of the most significant features of the property. In fact, it might be.
> 
> ...


I'd like a 120 square feet cramped condo with access to 10 Starbucks and I am a guilty idiot who does most of my computer work at STarbucks... But not at that price. Maybe 50k.


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## ddkay (Nov 20, 2010)

Looks like in Sherbrooke you can actually get some value for your money..


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## v_tofu (Apr 16, 2009)

Wow. Had no idea those were the prices in TO. 

Not familiar with GTA, but are the areas of those homes listed considered prime areas to want to live in? It's just the houses seem so... crummy. Is it essentially a buy, destroy, and build new home scenario? I'm now more than positive that there will be a correction in TO and B.C


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## Causalien (Apr 4, 2009)

The funny thing is.

My neighbor just put up their house for sale... at only 80% of what the municipal valuation says and at only 66% of what my bank's independent land surveyor says its worth. 

Something is wrong here, but it's too late at night for me to realize.


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## the-royal-mail (Dec 11, 2009)

What are comparable houses selling for? They're probably desperate or anxious to sell and time is of the essense. The best way to attract attention when selling is a low price.

But maybe all the other comparable houses are selling for a similar discounted amount. Depends on the supply and demand in that market at this time.


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## NotMe (Jan 10, 2011)

the-royal-mail said:


> What are comparable houses selling for? They're probably desperate or anxious to sell and time is of the essense. The best way to attract attention when selling is a low price.
> 
> But maybe all the other comparable houses are selling for a similar discounted amount. Depends on the supply and demand in that market at this time.


There's also the possiblity they're listing low for multiple offers. Mail is right - it's what other houses sell for that matters, not the listing price. 

As for the prices in Toronto.. yeah they're high. And I do believe a correction will occur. But can we please agree to start putting in both the event (correction) and the timing (the month) of our predictions? Because without both, a prediction is never wrong. I'll start: mild correction of -10% at the end of 2013 and then plateau. 

For example, I know the sun will stop burning one day. It's a certainty - there's only so much gas in the sun that's burning. But the when is really important - 15 years from now or 1,000,000 years from now is a big difference for me. Similarly, a price correction in Toronto of 25% after gaining 5% a year for 75 years doesn't really alarm me. Again, not a bull, a bear, a tiger, a llama or whatever, just saying that we need to upp the game a bit.


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## Causalien (Apr 4, 2009)

I don't know what the sold price was, but a similar house around the neighborhood (With smaller square footage) listed for about 5% less last year. This new neighbor listing has about 20% more backyard, but the lot width is the same (Hence can't rezone into two townhouse, so less land markup). The house sold last year was a tear down (I know because they are tearing it down now) and I am guessing this one will eventually be a tear down as well. 

There's some sort of blight happening as houses are bought and left empty as eventual tear downs (really who wouldn't want to tear down, 40 year old houses). You can actually observe the advance of McMansions through the neighborhood. 1 block over my street is now the defining line between McMansions and the original houses, this year it might move to my street.


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## Dmoney (Apr 28, 2011)

I can't believe some of those prices... Just insane... It's weird, I've been looking much closer to the downtown core, and prices are way lower on average. Still 600K-1MM, but well below the 1MM+ he's got in his listings.

Are the areas that desirable? I'm not yet familiar with all the GTA areas.


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## Berubeland (Sep 6, 2009)

Causalien said:


> The funny thing is.
> 
> My neighbor just put up their house for sale... at only 80% of what the municipal valuation says and at only 66% of what my bank's independent land surveyor says its worth.
> 
> Something is wrong here, but it's too late at night for me to realize.


Going for bidding war


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## Causalien (Apr 4, 2009)

Ha we'll see when it sold. 
U asked [email protected] whether they offer cash back mortgages and they said no. The only one seems to be CIBC then. So either the lady is lying or Garth. Cananyone else confirm?


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## ddkay (Nov 20, 2010)

> Today I went to an amazing open house at Don Mills and Lawrence, it was a post war back split, totally beautiful and very retro (if you’re into that). Listed at $629,000.00 and I asked the agent “You must be expecting a bidding war…” and of course he says “Yeah absolutely, we think it’s going to go for somewhere in the high 700s. We’ve already had a bunch of bully offers*”. I mean, what’s the point?! Stop wasting everyone’s time… it’s not some game, it’s 25 years of debt.
> 
> *Bully offer: An aggressive offer by a Realtor presented to the seller before potential buyers are even allowed to submit offers. i.e. on a listing sheet it’ll say “offers accepted as of X date”. But a realtor will put a very high offer in prior to that date, as to avoid getting into a bidding war with other potential buyers.


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## londoncalling (Sep 17, 2011)

*I'm not sure if I should laugh or cry*

Trying to avoid starting a new thread but what is up with this?

http://www.montrealgazette.com/story_print.html?id=6268484&sponsor=

Is this good bad or otherwise? I guess it depends on if you can afford the home and have the money for the proper down payment. I have 20 months left on my 5 year fixed. I have to crunch some numbers and see if it is worth breaking my mortgage. It just might be worth it. Of course they brought back the 5 year rate of 2.99% as well. Tough to say which is the better choice.


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## ddkay (Nov 20, 2010)

BMO just re-introduced 4-year 2.99% rates, then TD followed yesterday, and RBC and CIBC joined today. This is all after Bill Downe (BMO) voiced his concern for the Canadian housing market, said we would be looking at a "soft landing", and they would be triming back their exposure. #facepalm

Gord Nixon (RBC) and Colleen Johnston (TD CFO) said they didn't see ANY cause for concern in Canadian housing.

Darko Mihelic, an analyst for Cormark securities recently said if CIBC exit their mortgage brokerage channel, that could lead to earnings risk and valuation risk. #facepalm


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## the-royal-mail (Dec 11, 2009)

I'm always leery of salesmen. Their goal is to sell. Nothing else matters to them. But it should matter to the buyer.

All of this housing nonsense is dramatically affection people's ability to save for retirement. Everyone assumes their house prices will keep going up or stay the same. Just look to the US to see how that worked out for them.


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## NotMe (Jan 10, 2011)

At Royal Mail - hey I hear what you're saying but as a former salesperson (8 years) I really tried to do the right thing for both my customers and the business. Salespeople are the foundation of capitalism.


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## Berubeland (Sep 6, 2009)

NotMe said:


> At Royal Mail - hey I hear what you're saying but as a former salesperson (8 years) I really tried to do the right thing for both my customers and the business. Salespeople are the foundation of capitalism.


Yep and that's why we have accountants and bankers and policies and procedures  to provide a balance. It's when they drink the Kool Aid that the poop hits the fan. It's what we're seeing here...


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## Jungle (Feb 17, 2010)

Front page of the Globe and Mail today:

"Three Bedroom Bungalow in Willowdale (Toronto), asking $759,000 sold for $1.18M."


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## Homerhomer (Oct 18, 2010)

Jungle said:


> Front page of the Globe and Mail today:
> 
> "Three Bedroom Bungalow in Willowdale (Toronto), asking $759,000 sold for $1.18M."


The winning bidder was a young student from China who's parents promised financing won't be an issue.


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## londoncalling (Sep 17, 2011)

I recently went to an orphange and put myself up for adoption. I hope to find similar parents. Sadly, all my parents taught me were fiscal responsibility and the importance of living below my means.


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## Jungle (Feb 17, 2010)

The title of this thread is a good laugh, but honestly this article of a Chinese lady bidding 421K over asking is not funny anymore. 

More like concerning trend with this market. 

For anyone that did not read, here is the online link:

http://www.theglobeandmail.com/life...421800-over-asking-yes-really/article2362078/

And that deserves a thread on its own..


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## Causalien (Apr 4, 2009)

2 round bidding, One chance submission. You do not know what others are bidding. Highest 4 prices of first round gets to the second round. All bidders speaks Mandarin. Some phoning in from China.

This is the same strategy they used here to sell a house half the acreage at 50% premium to comparables. 

Do any of the things I mentioned here breaking any laws?


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## dogcom (May 23, 2009)

Toronto real estate is nuts just like Vancouver last year and Vancouver also hasn't got any cheaper since last year either. Any of you Toronto forum buddies or your friends sell in the last few years or so like people I have talked to in Vancouver only to realize that it could have made the biggest mistake of their lives. It seems once you sell in these cities your never going back and that is how it has been in Vancouver for decades. One must also consider what would happen if central banks are successful and print enough money that deflation is gone but high to almost hyper inflation is around the corner then even a million dollar bungalow may seem like a great deal. This is why when I sold I bought in a great area and went mortgage free last year even though I thought I paid to much for my new house. If you have a family you owe it to them not to play games with your principal residence.


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## kcowan (Jul 1, 2010)

The first year that Vancouver was in a bubble was 2002. Anyone selling to rent then would have been screwed. Market timing is a *****! 10 years and still counting...


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## Homerhomer (Oct 18, 2010)

dogcom said:


> . If you have a family you owe it to them not to play games with your principal residence.


Very true, I agree completely.


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## uptoolate (Oct 9, 2011)

This is a follow-up on that house in Willowdale that sold for 400+k over asking price. 

http://www.cbc.ca/news/canada/story/2012/03/14/real-estate-overseas-investors.html


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## Lucy (Mar 10, 2012)

Interesting Article.  I have been selling Real Estate in the GTA for 26 years. I would buy into that all the hype if only Canadians were not one of the most in debt people vs income on the planet. Plus one of the most taxed, meaning less disposable income.

The foreign buyers are a very small percentage. Our real estate market looks good only because the bubble has not burst yet. Also, are banks look solid for now because they haven't suffered a market correction. How good would they look if they started taking losses.

Also, the talk in my profession is that the banks are extremely worried and thus have begun to insure home lines of credit at their own expense. Vancouver and Toronto are running a pozi scheme which will eventually end in deleveraging like the rest of the world is experiencing. The longer this goes on the worse the final outcome will become.

Congratulation Mr Finance Minister for trading a small recession for one huge mess in the future by creating tons of liquidity in the mortgage markets. Ala Alan Greenspan and friends.


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## Lucy (Mar 10, 2012)

Also, there was a lot of foreign mOney spurring on the U.S. Bubble. They were the first to bail and dump when the market did the switch to a buyers market.


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## Causalien (Apr 4, 2009)

Lucy said:


> Also, there was a lot of foreign mOney spurring on the U.S. Bubble. They were the first to bail and dump when the market did the switch to a buyers market.


Go on, I like more on the ground reporting. Relevant to my interest.


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## jcgd (Oct 30, 2011)

Yes, please do go on!


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## meddlesomemarmots (Feb 16, 2011)

Lucy said:


> The foreign buyers are a very small percentage. Our real estate market looks good only because the bubble has not burst yet. Also, are banks look solid for now because they haven't suffered a market correction. How good would they look if they started taking losses.


I don't see huge risk for the banks really. The sub-prime loans offered to people who can't even manage to get 20% together for a principle residence down payment have the taxpayers back through the CMHC. I'm sure the small amount of foreclosures that would come with an economic/housing market downturn would be predominantly these type of insured mortgages - so it would just be the interest the banks are losing (which could easily be offset by a rising interest rate market). It irks me when people say that Canada avoided crisis like America, because of conservative lending standards, when in reality, risky government intervention in the housing market is more to blame.

It seems pretty clear to me that the banks are working behind the scenes, to cover their bases (as banks _should_ do).


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## Lucy (Mar 10, 2012)

We avoided the U.S. Meltdown partly because of the introduction of the 40-35 year amm introduction along with the 100% financing products created by our finance ministry. I have friends that are mortgage brokers. They tell me 70% of their business is refi! This is largely the people coming back to them repeatedly to pay off credit cards etc and consolidating debts. You know, the commercials you hear on the radio! This is possible when housing continues to appreciate at 5-10 per year compounded! People think us Realtors make a lot. You should check out a good mtg broker. These folks are buying 1-3 million dollar houses. Some of them have 2nd mtg portfolios of their own cash as large as $500-$1.5 M at 11-13% rates with juicy arranging fees of 
$3-5k ( which is 10% up front) 

When the music stops, and the listings pile on, a 20% drop in prices is what everyone will be praying for as a maximum The reality is this will be a minimum. Expect the over saturated condo market th drop by at least 50%. Ive seen it before and am sure we will see it again. Once it starts the whole country will be affected like the US. The deleveraging be be painfull for all. The layoffs and fear will panick even the most secure. This time will be worse as the debts are soo much larger than 1990 plus governments are broke also.


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## Causalien (Apr 4, 2009)

Lucy said:


> We avoided the U.S. Meltdown partly because of the introduction of the 40-35 year amm introduction along with the 100% financing products created by our finance ministry. I have friends that are mortgage brokers. They tell me 70% of their business is refi! This is largely the people coming back to them repeatedly to pay off credit cards etc and consolidating debts. You know, the commercials you hear on the radio! This is possible when housing continues to appreciate at 5-10 per year compounded! People think us Realtors make a lot. You should check out a good mtg broker. These folks are buying 1-3 million dollar houses. Some of them have 2nd mtg portfolios of their own cash as large as $500-$1.5 M at 11-13% rates with juicy arranging fees of
> $3-5k ( which is 10% up front)
> 
> When the music stops, and the listings pile on, a 20% drop in prices is what everyone will be praying for as a maximum The reality is this will be a minimum. Expect the over saturated condo market th drop by at least 50%. Ive seen it before and am sure we will see it again. Once it starts the whole country will be affected like the US. The deleveraging be be painfull for all. The layoffs and fear will panick even the most secure. This time will be worse as the debts are soo much larger than 1990 plus governments are broke also.


You are the first RE agent I've heard with this type of thinking. The mortgage people at big banks have a different take on this... but they mainly do prime. Where do we go to get data on these 2nd mortgages. Are indie mortgage brokers you are talking about the ones who handle what the us used to call "Sub prime?"


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## meddlesomemarmots (Feb 16, 2011)

Lucy said:


> I have friends that are mortgage brokers. They tell me 70% of their business is refi! This is largely the people coming back to them repeatedly to pay off credit cards etc and consolidating debts. You know, the commercials you hear on the radio!


I'm with you there. The private home equity loan companies remind me of the adverts I heard everywhere back in England before the global financial crisis - I believe most of those companies disappeared rather quickly from the mainstream.

I completely agree with you about the personal debt level. How anyone can think that it can go on at this rate is kidding themselves. The potential is there for Canadians to see a far worse scenario than back when the crisis originally began years ago.


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## ddkay (Nov 20, 2010)

Watching this movie tonight, real estate for ransom... http://vimeo.com/38500767


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## Lucy (Mar 10, 2012)

HELOC and 2Nd mortgages are obvious evidence that Canadians are using their Real Estate as ATM machines like the US did. There is a reason that Flaherty and Carney keep repeating keep warning Canadians about their debt. They naively believe that simple weak warnings will make a difference in slowing down this freight train to disaster.

The sad part is, in an effort to keep our economy going and avoiding a small cyclical recession which a nececarry part of the economic cycle, they are creating an enormous bubble to swell. This bubble is already enormous. Imagine if 2-3 more years of 9-10% price appreciation.

People are shocked at the willowdale bungalow story. I have a friend who just purchased a semi detached on an 18 foot lot requiring $100+ in renos for close to $1M. It's a damn 100 year old semi!!
Fast forward this home 3 years from now at 10% compounded price increases and what do you get? $1250 plus $100k renos! That $1350 for a semi near Bathust and Bloor!

Now everything would be fine if this were happening with cash but everyone l
Who looks into it realizes it on inflated piece of real estate leading to more leverage on another inflated piece of real estate. 
The sad part is when this bursts, the destruction will affect the whole country for at least a decade. 2-3 Canadian cities allowed to hyper inflate like this will wreak havoc on the whole country economically.


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## Lucy (Mar 10, 2012)

@ Cause,

I have no stats. I dont rely or look for stats too much. I speak to lenders they repleatedly gloat how the majority of their business I'd refi. This included banks! This says a lot right there. Plus I'm sure you have heard how Canadians now owe $1.63 per dollar earned and how this has past the US ratios before their tsunami. Plus you have heard how RRSPs are at 11 year lows. That's because the money is going into $1.4 Million McMansions in the suburbs and other forms of real estate plus many Canadians are RE rich and broke for cash.


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## ddkay (Nov 20, 2010)

Heh.. interest rates haven't even increased yet & this is listed as "being sold under power of sale" http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=11687023&PidKey=1816967883

It's the only foreclosure I've ever accidentally stumbled upon, and it's also listed at market value. No crash scenario yet..


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## sags (May 15, 2010)

Garth Turner had a story on his blog about a new pre-built development sale for a new condo building.

They sold 400 condos to 125 people.............so who is buying the condos?...........speculators........all bought with small downpayments and hoping to "flip" them for a profit before they are built.

OFSI, the bank regulator, is coming out with some new regulations that are going to change a lot of the rules.

No more cash back mortgages. Appraisals mandatory at renewal dates. Stringent income analysis.

The CMHC is in hock for 600 Billion in insured loans. They insure 90% of all new mortgages.

Fannie and Freddie in the US had 1 dollar in equity for every 50 dollars in liability. CMHC has 1 dollar for every 100 dollars in liability.

I hope this deflates slowly over time...........because a big burst is going to cause a lot of heartache.


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## sags (May 15, 2010)

I don't know what some people call "subprime" but the CMHC is insuring 90% of all mortgage loans and have been for awhile......hence the dramatic increase to the 600 Billion dollar CMHC ceiling limit.

These are mortages of less than 20% downpayment.........and are often cashback mortgages which offer 100% financing and the Scotiabank was overing 7% cash back which meant the mortgage was 102% of the purchase price.

Those sure look like subprime mortgages.

Lucy is right...........HELOCs and refinancing are out of control.

TransUnion credit reporting agency studied their clent base and found that people were maxing out credit cards, paying them off with their HELOC, and then refinancing to pay off the HELOC...............and then starting the cycle all over again.

Under the new OFSI rules, HELOCs will be considered as mortgage products and have to have an amortization period for repayments. The days of "interest only" are coming to a close.

Cut off the refinancing and HELOCs...............and people are going to have to pay off their maxed out credit card the out fashioned way.........by not spending money and paying off their debt.

That will be a concept completely foreign to a whole generation of home buyers............who have been living in a big home for a small monthly payment that they can borrow from the lender............crazy

People have basically been living free, spending future paper profits............so what is not to like for them?

Forget a 20% correction. At these insane prices a 10% reduction puts them under water for a pile of cash.

And the banks are complaining about "thin" margins on the mortgages. They say they are doing 5 years of maintaining the mortgage paperwork and losing money on the mortgage if it goes through a broker. 

Flaherty appears to be losing patience with the banks whining..........given his recent comments about them looking after their own business........so I would expect some changes that banks may not like.


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## Causalien (Apr 4, 2009)

sags said:


> I don't know what some people call "subprime" but the CMHC is insuring 90% of all mortgage loans and have been for awhile......hence the dramatic increase to the 600 Billion dollar CMHC ceiling limit.
> 
> These are mortages of less than 20% downpayment.........and are often cashback mortgages which offer 100% financing and the Scotiabank was overing 7% cash back which meant the mortgage was 102% of the purchase price.
> 
> ...



Those are his words, in my own research, I only found CIBC to have cash back mortgages. But I am not in the industry and you might need certain conditions before getting a cash back mortgage. So, I'd like to hear from industry experts. Which banks offer cash back mortgages?


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## HaroldCrump (Jun 10, 2009)

sags said:


> Flaherty appears to be losing patience with the banks whining..........given his recent comments about them looking after their own business........so I would expect some changes that banks may not like.


There aren't going to be any changes anytime soon.
http://ca.reuters.com/article/topNews/idCABRE82L0RF20120322?pageNumber=1&virtualBrandChannel=0

Minister Flaherty is equally interested, if not more, in keeping the RE bubble fully inflated.

His comments that you are referring to are commonly known as "lip service"


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## ddkay (Nov 20, 2010)

One possibility is that RE deflates with an unemployment spike. Interest rates could stay low forever in a no growth/low growth scenario.


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## HaroldCrump (Jun 10, 2009)

ddkay said:


> One possibility is that RE deflates with an unemployment spike.


Unemployment has been gradually inching up for the last several quarters.
What is it now...7.3% perhaps.
Yet, the housing bidding wars show no signs of a pullback.
What level of unemployment will it take and what will be the socio-economic consequences of a double digit unemployment rate?

Any housing correction will have to be trigerred from something other than interest rates.
They aint going up anytime soon, regardless of inflation or unemployment.


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## sags (May 15, 2010)

The greatest threat to prices may be consumer sentiment

Few people want to buy a home if they don't believe it will rise in value.


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## Lucy (Mar 10, 2012)

Last time the bubble burst in 1989 was from a snowball effect of several corporations laying off thousands. My guesss is, just like there are many families skating on thin ice there must be many companies also. Once these companies begin layoffs as as result of deleveraging, the fear of job loss turns the market around. Actual statistics do little. It's the sentiment of fear that reverses the bubble but it's not a pretty site as many innocents get taken down with the deleveraging.


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