Tuesday, March 16, 2010

Yep, it's different here alright

Hat Tip to Rob Reynolds for links in comments of last post.

I'll just post the pictures. You should definitely read the full post here by Jonathan Tonge at AmericaCanada.blogspot.com






I'm still scratching my head at anyone who thinks this is A) sustainable and B) not a credit bubble. Buy houses people. Buy houses.

70 comments:

Robert Reynolds - GBA said...

The Credit Card and Personal Lines of Credit are the scariest.

Credit Card debt means people are strapped day to day.

Personal Lines of Credit are probably nearly ALL based on Home Equity Line Of Credit (HELOC)

Once the HELOC is maxed, and/or property values fall the credit cards don't get paid, and bankruptcy ensues.

Does anyone out there know if any of the big 5 bank HELOC products are callable at a certain percentage of equity? I know investment loans I have access too in my profession are typically callable at 75% of equity. (IE: house value $1,000,000 Max loan: $750,000 if the loan hits $750,001 it's called.)

msr said...

Rob,

Are those numbers for outstanding balances or just available limit? For example, I have a LoC that I've never used. Does the fact that I have this account affect this line despite me never having used it?

I don't think HELOCs are callable since houses just aren't liquid enough to be easy to cash out. More likely the bank will use it as leverage to jack up your rate if you fall underwater.

Just Jack said...

When I first heard Walter Brennan say this part in this movie, I thought he said HELOC's


http://www.youtube.com/watch_popup?v=6WPkOp1XOgU

Just Janice said...
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Just Janice said...
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HouseHuntVictoria said...

You know we're in a country-wide bubble when the top 10 list of affordable cities includes those that have 25%+ gains YOY.

Robert Reynolds - GBA said...

Please come to Canada!
Please come to Canada!
Please come to Canada!

Google Maps does MLS

Reid said...

These charts are very interesting. This aligns closely with my theory that over the past 20 years there has been a very high correlation between B.C. house prices and the level of credit made available to individuals/families. By loosening credit over the past decade our government has allowed this housing bubble to develop. Government could have simply capped maximum borrowing at say 4x family income (regardless of interest rates and amortization periods) and we would not be in this mess.

It is also interesting when I talk with my contacts in the US how different securing credit is there compared to Canada. IMO, this is the number one thing that separates our housing markets. If bears think we will see the same housing meltdown in Canada that has been experienced in the US, we will have to see dramatic changes to credit availability.

Up until April 19th that has not happened; credit actually got looser with the emergency interest rates. The April 19th changes will have an impact on contracting credit levels for first time buyers and investors. Although these changes will be minimal compared to what we have seen in the US, it is finally a step in the right direction and it will cool the real estate market. Prices will start to come down in 2010, but I suspect at a pace slower than most bears would hope for.

These changes are good because first off they show me that government has finally realized we have a housing bubble (even though they will not admit it), but also because we have to slow down this insane level of debt expansion in this country.

Animal Spirit said...

Since Reid mentioned graphs, I've uploaded the March 17 SFH listing distribution for all to see. It compares SFH listings in Victoria area for this March, April 2009 and January 2009.

The distribution has shifted around 75K to the right - meaning that the average listed house is now 75,000 more expensive than a year ago. In part I see this as most of the junk on the market is selling as FTBs were desperate to buy anything, and in part to prices increasing.

Interestingly, total SFH listings have increased 17% since March 1 of this year.

I'm curious to see what happens with the distribution after April 19.

Dave said...

I am surprised that the relative level of mortgage debt grew so little (i.e. 399B to 501B) over the last ten years. The number almost doesn't make sense. If you also consider population growth and real economic growth, the relative level of mortgage debt (e.g. per person) would be lower now than ten years ago.

Reid said...

Dave, I think you are reading the chart wrong. The "actual" level of mortgage debt rose from $399B to $965B; an increase of 242% over the decade.

Although population growth has occurred in the decade, we also have an aging population and those that are over 40 should be aggressively eliminating debt. So this should offset the population growth to some extent.

The problem here is that we are simply offering easy and cheap credit to a nation of financially illiterate people.

My sense is that those in Ottawa realize we have a problem and they are going to try and create a "soft landing" (may be too late now). As a result I think they will hold back on rising short term interest rates quickly as this not only hurts housing, but it will impact our manufacturing sector as higher rates tend to push up the dollar.

patriotz said...

I am surprised that the relative level of mortgage debt grew so little (i.e. 399B to 501B) over the last ten years.

You are reading the chart wrong. That's the 1999 level of debt adjusted for inflation, not the current debt.

The point of that line is to compare the current debt - which is the top line - to the 1999 debt in real terms. Which is 965B versus 501B, i.e. almost doubling in real terms.

Dave said...

Patriotz, I appreciate the difference between nominal dollars and inflation adjusted dollars. Inflation was only 25% during that period, so they aren't telling us what else they are correcting for. It's inflation plus something else. Did they remove population growth? Real economic growth?

Mr.4AM said...
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Mr.4AM said...
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HouseHuntVictoria said...

Dave they didn't remove anything. The top number doesn't need adjusting ($9B+) because that is the total amount of outstanding mortgage debt in Canada. The inflation adjusted 1999 debt level line is a linear adjustment of what true inflation should do to mortgage debt in Canada. It's a reference line only.

JustWaiting said...

The inflation adjusted 1999 debt is 501B and the actual debt today is 965B. One might wonder why the level of mortgage debt is now so high. I suggest several reasons.

- There has been a building boom and more people have purchased homes. I did not say own their home because only 65 -70% are mortgage free; the others are mortgage tenants.

- Real estate prices have increased considerably so the size of individual mortgages has increased.

- In recent years buyers got away with less than 10% down so they required bigger loans.

- Some fools have refinanced their house to buy cars and take vacations.

- Ownership of second properties like ski chalets, cottages and rental properties has increased.

Another point to consider is that many boomers will be selling their homes in the future in order to finance their retirement. Most of these homes are mortgage free. This should force the level of mortgage debt in Canada even higher because buyers of these properties will require financing.

This level of debt is sustainable as long as interest rates do not rise significantly and real estate prices do not experience a big drop. If either happens many will be forced to sell their homes resulting in a downward price spiral.

I suspect that the government will introduce 10% down and 30 year amortization once the economy gains solid footing. This will not be done to cool the market but to protect the banks and CMHC from future losses. When prices start dropping due to higher interest rates they will not want more mortgages issued that will be underwater a short time later.

Double-Agent said...

This was being passed around the office today. You should have seen the looks on peoples faces.

Victoria real estate agent gives away tattoo certificates

Her clients will remember her for years to come...
.

HouseHuntVictoria said...

Double Agent,

Best realtor gift I heard of was a friend's firt time real estate purchase. $320K and his agent gave him a bar fridge full of beer and an extra 24 for when they ran out.

Worst gift I heard about, someone sold a house for $700K, agent double ended the deal and gave the sellers two plastic champagne glasses with his logo on them and a 12 dollar bottle of sparkling wine.

At least the tattoo agent ain't being cheap.

Ryan said...

Ron Neal gave my brother a calendar, and right in the middle of each month one of the days says "Time to send Ron Neal a referral." It's the most crass thing I've ever heard of.

The sad thing is, I played hockey with Ron Neal before this bubble started, and he was a good guy. But I think the money has gotten to his head.

think said...

Vancouver Daily Numbers...

Vancouver East & West*
New Listings - 112
Back On Market Listings - 0
Price Changes - 32
Sold Listings - 20

Vancouver All Areas*
New Listings - 288
Back On Market Listings - 5
Price Changes - 95
Sold Listings - 81

Yowzzza!! Sell/list ratios 18% and 28%. Who knew math could be this much fun :)

Double-Agent said...

Think,

If you like tracking Vancouver real estate you should visit this site for detailed stats.

You will notice that the Sales/New Listings Ratio peaked a month ago at 68% and has been dropping every week since then. Last week it dropped to 34%.

Look out below...

think said...

Great site Double-Agent, thanks! Do you know of a site like that for Victoria?

Dave said...

HHV, thanks. That makes sense. I should have thought of that. Duh...

Double-Agent said...

Think,

There is no site like Agent Will's here in Victoria. The Vancouver agents are way ahead of Victoria when it comes to knowledge of social media and use of the Internet. Most are content to just parrot the monthly VREB press releases on their Website (if they even have one).

I try to release the weekly stats every Monday - S/L ratio, sales, new and active listings. A pale shadow of Agent Will...

Rhino said...

Think,

I will have to give you credit for spotting this early. The move up in inventory looks more than just seasonal. My PCS of SFH in Victoria (no suburbs) under 800K has gone from 50 in January to 182 today. At the peak of last years mini-correction it was at 240.

think said...

Thanks Double-Agent - I do love to look at the stats :) And thanks for the ego boost Rhino - its getting fun now that the little snowball seems to be getting bigger and picking up speed. Listings on my PCS are piling on too! Interesting times. Here is some good reading...

http://www.scribd.com/doc/28454918/Canadian-Housing-Bubble

Mark said...

Oh my...you have to read this!
A reply from a Realtor to my inquiry about a rental in a condo development that has been sitting dormant forever.

Hi XXX, I am very curious why you would not want to enter the housing market. Victoria Real Estate is one of the best investments available. Even if prices did not go up, over a 4 year period you could be receiving a 7% a year return on your money. I would like to explore this with you, with over 28 years experience I have guided a lot of folks to very secure situations. But I do not wish to pry. At this time none of the units owned by the Developer are being considered for rental, our new sales campaign has just started and with the current response we expect a lot of units to be sold in the next few months, if a buyer is interested in renting their new investment I will be in touch.
Regards XXXX

My response in my next post....this is good shit! Hold you laughter and comments until you read it all.

Mark said...
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Mark said...

My reply.....

Unlike yourself I don’t believe RE, especially in Victoria is a good investment, let alone “one of the best investments available” I firmly believe that prices will not go up or sideways but rather down and down substantially over the next 5 – 10 years.

With the recent changes at CMHC regarding qualifying for mortgages, soon to be rising interest rates, the HST, the economy not getting better anytime soon (spelled job losses and wage freezes etc) and last but not lease affordability completely eroded I would not touch RE with a ten foot pole. What we have witnessed over the last 6-7 years is an anomaly and I’m surprised given the amount of the time you have been in the business that you are suggesting that RE is a great investment.

Lax lending practices, historically low interest rates and , increased amortizations up to 40 years (recently corrected to 35)and last but not lease hype by your industry, the banks and the main stream media (all of whom have a vested stake in this continuing)have kept this insanity alive for far too long. It will end badly for a lot of people. Please keep this email and let’s chat again in 2 years time.

I’ve been around long enough to watch RE go up, go down and go sideways for a looooooog time. Suggesting someone buy now as a great investment is irresponsible. Sure one can qualify at 3.5% secure a 1.9% variable mortgage amortized over 35 years and pay the same as rent BUT what happens when rates hit a modest 5%? Guess what they will and higher…….inflation is on the way.

I presently pay 1550/month for a 1600 sq ft townhome that overlooks the water with 2 car garage, 3Br and 3 Ba…..that same townhouse just sold for almost for 500K! Now I’m sure I don’t have to the math for you. Who is better off, the renter paying 1550/month or the owner who just bought at the height of the craziest market in the history of this Country paying a hell of a lot more per month + an additional $400/month in strata fees and Property taxes. Now let’s take it one step further…….how happy will the buyer be IF he is a first time buyer or your average over – extended home buyer when rates adjust 2-3% conservatively higher over the next 2 – 3 years?

I get pretty passionate about this kind of stuff so forgive me but you have absolutely no case here I am not interested in buying, but thank you for offering to show me the way to guide me to a very secure situation. (your words verbatim).

Ok one more from him next post, wait for it.....wait for it!

Mark said...

I finally his well thought out, baseless reply......

I am not sure how to break this to you but you are so wrong. Housing in Victoria was at an all time high in 1981 with interest rates at 21% and the market crashed, or at least people thought it had. That same home that was over priced at 189900 in 1981 is now worth over 850K, if it was a special property it is worth over a million. I have no interest in selling you a property as I do not pressure people, nor do I need to earn a commission to feed myself, I live off tenants who buy my properties for me and give me a very nice return, I do find it sad that some people remain tenants longer than they should. I wish you the best and no I won’t keep the email to look at 2 years from now. You seem very bitter about your situation and I cannot help you with that. I wish you the best and like I said if a buyer purchases a property that they are looking to rent I will pass on your information. Regards

Bitter? No, maybe just a realist.....this dude is delusional! No wonder FTB's are mortgaging their lives away with irresponsible advice like this.

I did not reply as I just couldn't....this guy obviously believes his own BS! trying to convince him otherwise is just an exercise in futility.

mln said...

"It is difficult to get a man to understand something when his salary depends upon his not understanding it." - Upton Sinclair

Just Jack said...

Purchased December 1980 for $143,000
Monthly payment at 21% is $2,415

Sold February 19, 2010 for $610,000
Monthly payment at 3.65% is $3,094

So the typical middle income household is once again paying top monthly payments for housing, just as they were just prior to the crash of 81.

So, how much more blood can you get out of this stone?

Olives said...

I'm surprised that someone who would describe themselves as a "professional" and is trying to obtain your business (whether as a buyer or renter) would be so rude to you, calling you "bitter". What an ass. I wish you would say who this is. His letter to you is defensive and sarcastic and completely unprofessional.

He maybe had an opportunity to secure a future client, but I would think has just destroyed that chance. Am I right?

Mark said...

Olives he had no chance....zero of securing me as a client as I have no intention of buying anytime soon.

IF we see a minimum 30% correction I might jump back into the water.

What surprised me is that as a professional (which I don't believe any Realtor can call himself after a 10 week course)he would even suggest that RE is such a great investment at these levels.

Very irresponsible IMO....the fact that he had no facts or real argument to address my reasons for not buying was disconcerting as well. I was real surprised he didn't lay the old "it's different here and everyone wants to move here" spiel on me.

What a donkey! Par for the course with most realtors in my experience.

HouseHuntVictoria said...

Mark,

Facts and reason don't sell. Emotions do.

I've got $20 that it was Fred Carver. But I have my doubts. Reason is the dude is so out to lunch that I can't imagine any developer hiring him to sell a bunch of condos.

Vic said...

The idiot realtor doesn't grasp no average joe could afford the $189,000 home in `81 and would have been the equivalent of paying $850,000 now...and if they did manage to swing it they lost almost half in a year.


Can you imagine the whining and boo hooing when it happens again ? Inflation numbers out today say rates are going up in the next few weeks. Look out below.

Garth said...

You know I have been lurking here for a couple of years and generaly agree with the regular contributors on the direction the market is likely to go, but after reading Mark's last few posts - and the people who support his views - I think I have to say that
you guys are really getting over the top with your fierce anger at anyone who doesn't buy in to the 30% Minimum decline in a year theory. I wish I had bought a house in 1981!! I wouldn't be crying today. Probably wouldn't be reading this blog either. Get a life or move to Manitoba and actually BUY something

patriotz said...

What surprised me is that as a professional.. he would even suggest that RE is such a great investment at these levels.

RE agents are not investment advisors for either the seller or buyer. It is not their responsibility to evaluate the merits of holding versus selling for the prospective seller or buying versus not buying for the prospective buyer. Any more than it's the job of a car salesman to determine whether a given car suits your needs and budget.

He is a commissioned salesman, and the one and only job he is being paid to do is to get the highest possible price for the seller.

Period.

Mark said...

Garth in your post you said....

"you guys are really getting over the top with your fierce anger at anyone who doesn't buy in to the 30% Minimum decline in a year theory".

I don't recall saying I expected prices to drop 30% in 1 yr. What I said was that I would not even consider buying back into the RE market in Vic until I saw a 30% correction.

The average house price in Vic is a staggering 620k

http://www.vreb.org/mls_statistics/current_statistics.html

The average income per household is about 60k....that means that a house in Vic is about 10 X the average combined family income! Now if we saw a 30% correction the avg house price would still be 400k (still 7 X the avg income)

Now factor in higher int rates and tighter lending practices that 400k house is still waaaaaaaay ove the top unaffordable for you average family.

I think we need at least 40% for Vic to even come close to being affordable again. How long it takes or if it ever happens is of no real concern to me. Personally it think we see it over the next 5 yrs but I don't have a crystal ball.

Victoria is quickly losing its appeal. I know plenty of people who have left recently. Some out of necessity (lost their jobs) some out of choice (lack of affordability etc).

Please don't misquote me again Garth.

Mark said...

HouseHunt....you owe me $20 LOL.
It wasn't Freddy

I really wish I could post the name of that realtor (so people would avoid him like the plague)but I didn't think it was appropriate. And really is he preaching any different a sermon than the rest of the scumbag realtors????

I'll take the payment in beer. We can hoist a couple when the madness ends. Tell ya what you and your gal can join me and my gal on the lovely deck of my formerly 1.5 million dollar home looking out over the ocean that I just bought from the bank for 750k ;o)

HouseHuntVictoria said...

Mark,

We should avoid characterizing realtors as scumbags. I know of more than a few who are not. They are genuine, know their craft, treat their clients with great respect and work their asses off to do the best they can. Without the scumbaggery. More than one of them reads this blog.

Vic said...

"I wish I had bought a house in 1981!! I wouldn't be crying today."


But you would have been crying back then, and for the following 10 years too. Most people today don't have the gumption to endure such a painful loss in my opinion, but they may not have a choice.

Mark said...

We should avoid characterizing realtors as scumbags. I know of more than a few who are not. They are genuine, know their craft, treat their clients with great respect and work their asses off to do the best they can. Without the scumbaggery. More than one of them reads this blog.

Ok, ok so the ones you know are the exception but hardly the rule. Overall they are nothing more than used car salesmen only know a lot less about the product they are selling. Please reread my post from realtor XXX.....I have a hundred other similar realtor stories.

I know a handful of decent albeit overpaid realtors but I wouldn't call any of them "professionals" FWIW.

msr said...

Mark, (There are too many Mark's on this board :P )

I think that pre-bubble most realtors could be described as caring human beings who want what's best for their client even if what's best might be tilted in favour of a fast sale.

Ten years of high-sales and ever increasing prices and the generally scummier people have arrived. They're here to move as much product as possible. Which you can see in statements like 'Buy now or be priced out forever'. It's not even appealing to greed(eg. for a nice car), they can just go for the fear button.

To characterize all realtors as scumbags is unfair but that's not to say there aren't now tons of scummy realtors. A strong downward correction would be good for the real-estate trade.

Vic said...

Front page headline in today's Globe and Mail :

"Days of rock-bottom interest rates are numbered".


If anyone who missed last years blip which terrified even the most bullish, and can't see the effects of higher interest rates on an overpriced market needs to read up on market psychology and how fast the shift can happen. It's terrifying,been there,done that,wasn't fun in the slightest.

Marko said...

"work their asses off to do the best they can."

Ohh yea, I agree 100%. You know you have to list a house on MLS, you have to write up an offer, sometimes you even have to be at an open house for 2 hours. I really don't know how they manage with their workload.

Robert Reynolds - GBA said...

I posted something similar to this a few months back.

I don't know why people are so apt to generalize a profession and call them all scumbags. Hell, I sell life insurance, a "scumbag" profession, but I think I am a nice guy and I honestly do my best for my clients. I have worked with several people from this blog, I believe they are all happy with my service. I know several people in my industry that fit the stereotype, but most are good people.

If you had a bad experience with a Realtor give us the story, and their name and be done with it. If you had a good experience same goes, tell us about it so we can take advantage of their good qualities.

I know several Realtors, and there are two who I can recommend. My personal Realtor is Geoff Field of DFH. Great guy, shows me as many properties as I like (dozens by now), never talks about investment potential. His focus is all about do I like the location, the building, the layout etc. every time he has shown me a place I walk in the door first, she stays outside and lets me look for 10 minutes and form my own opinions, then when "I" go and get "him", he gives me the tour and tell me the info I need. Great Realtor, highly recommended.

Secondly, Diana Devlin of Remax. she is a true real estate believer, but don't hold that against her. She is a successful Realtor in town, was once president of VREB, and has decades of experience. She also genuinely wants to find the right place for her clients. *full disclosure* I am in Diana's BNI chapter, but everything I said above stands*

The internet is about freedom of information.

Marko said...

Does anyone know how much monthly desk fees are at a brokerage such as Remax or DFH? I don't really need a desk since I have a nice home office with a seperate entrance. I am writing my exam June 17th! I finished the course in less than 60 hours.

I will be offering at least 70% comission cash back for buyers, and maximum $2000 for listing a home (selling agent's comission). I am planning on offering more depending on how low I can get "desk fees" for.

Mark said...

Marko Rock on dude!
Gonna be a lot of pissed of realtors my friend :o)

Let us all know when you are done and I'll pas on your info.....as long as you aren't a closet scumbag LOL!

Seriously congratulations on working so hard to complete that course....60 hours huh? Now you get to call yourself a "professional" Total awesomeness!

Double-Agent said...

Marko,

Give Scott Simmons on Salt Spring a call and tell him you want to use his low overhead agent concept to setup shop in Victoria. You can offer each other referrals as well. Here is some info on his $200 a month realtor overhead plan...

Scott Simmons - 1% Realty

Just Jack said...

Your taking the "desk fee" too literally. This is the price you pay to be affiliated with the company. It doesn't mean you get a desk at all or even a coffe cup with your name on it.

Marko said...

"Your taking the "desk fee" too literally. This is the price you pay to be affiliated with the company. It doesn't mean you get a desk at all or even a coffe cup with your name on it."

Yea I realize that. That is why I put desk fee in quotations. I have a home office so I don't need any kind of office space, but I realize I will still have to pay "desk fees" aka fees for affiliation.

Mark said...

Scott Simmons...hmmmm nice system!
The future of RE?
That and open up the MLS and we might get back to normal.....

Marco why do you have to be affiliated with anyone?

msr said...

Don't the one percent people have a lot of trouble getting business? Not because they're bad people but because most realtors won't go near a property on 1%. Are they allowed on MLS?

HouseHuntVictoria said...

MSR,

1% do have access to MLS, but many buyers agents will not take their clients to 1% listings because of the commission issue. 1% is also very misleading, it's rarely 1% of the sales price that gets paid. 1% agents are not full-service and some do very little more than simply list the home on MLS and then accept offers on behalf of their sellers. Sellers will often have to stage their own open houses etc.

Marko, good luck with what you are proposing to do. I doubt if you will find any broker who will take you on given your kick back commission scheme. Desk fees are the minimum amount you pay to your brokerage every month. Every time you make a sale, you kick back 50% of your commission to the brokerage. That's the way it goes for the first three years in the real estate business where in order to be licensed you have to work under a broker. Those are the CREA rules. Once your 3 years are done, you can take the broker licensing then work under any structure you want.

Naturally, the above is a bit of a generalization, but it's pretty much standard with all the agents in Victoria as I've been told. Perhaps Tim or Double Agent will be better able to clarify the rules.

Marko said...

"agents are not full-service and some do very little more than simply list the home on MLS and then accept offers on behalf of their sellers."

What does a full-service agent do? 95% of homes are sold by the buyer's agent, that alone goes to show that the selling agent simply puts the home on MLS and waits, simply put.

This "full-service" agent BS is the biggest scam going.

Ohhh, sorry, I forgot, full-service agents get "professional photos" of your place taken so you can only see small 2''x2'' pictures on MLS and their shitty realtor website.

I can take better photos with my SLR for free.

Robert Reynolds - GBA said...

Marco,

Different industry, but you might want to check into the legality of your rebate plans. I can't rebate more than 25% of my commissions on an insurance sale. Most provinces aren't allowed to rebate at all.

Might be something to look into.

Marko said...

"Marco,

Different industry, but you might want to check into the legality of your rebate plans. I can't rebate more than 25% of my commissions on an insurance sale. Most provinces aren't allowed to rebate at all.

Might be something to look into."

It is legal. I've already talked to my real estate lawyer.

In a few provinces there is a limit, but you can get around it by paying the buyer's legal fees, etc..

Mark said...

From Garth Turner....These politicians just don't get it do they???

He found a loophole. And this one is big enough to fit a housing bubble through.

http://www.greaterfool.ca/2010/03/21/canadas-action-plan/

Robert Reynolds - GBA said...

@Marco

cool, more power to ya.

I have often thought about going "fee for service" but it's damn scary and I don't think people would be willing to pay the equivalent of what I earn in commissions for life insurance. I think I am often overpaid for some policies, but also often far underpaid for others. It works out in the mix but still bugs me sometimes.

FYI
term 10 life pays 40% of first year premium
term 20 life pays 50-60%
whole life or universal life pays 70%
disability and critical illness pay 55-60%

we also get a bonus based on how much business we do with each company I currently get about 130% from most companies

ie: a term 10 policy with $100/month premium pays me $480 base commission plus 130% bonus $624 bonus
total 1104

I split 40% back to my company so I take home 662.40

some simple policies this is too much
but check my latest blog for reasons why sometimes I get ripped off big time. www.canadianlifeandhealthinsurance.blogspot.com

back on topic

do 1% agents still get paid if they don't sell the house?

Vic said...

Anecdotal but interesting. A friend of mine in Vancouver was talking with his bank manager of a large branch and he was told that after the Olympics ended the amount of people applying for mortgages just dropped off a cliff. If we are looking for direction from Vancouver making a critical down move then maybe this is the month.

PainInThe said...

Yes, Garth found a loophole. Which means, that with publication, Ottawa will be jumping through hoops to close it, or else.

I wouldn't expect it to last long. Go Garth!

Reid said...

I never saw the new mortgage rules as a loophole, but rather it was designed that way. If someone needs CMHC insurance, then the government is pushing them into the five year term where they are better protected against rising rates. I have seen too many FTB's end up in variable rate mortgages as well as one and two year terms which IMO is high risk given the current environment.

maniac78 said...

Garth Turner is like what two weeks late on his big scoop? What a maroon. I can't believe people still visit his pathetic website really. He's been telling people to sell their homes and buy nortel shares for years and years and years. I'd hate to think how many lives he's ruined.

Double-Agent said...

Marco,

You are getting your license at the right time. This article is for you. Check out the comments. Some real estate agents ain't happy...

CREA members vote for overhaul of rules

Members of the Canadian Real Estate Association unanimously voted Monday for an overhaul of the association's rules that will lead to increased access to the Multiple Listing Service system, which is responsible for about 90% of residential property sales in Canada.

The measures, which ultimately give consumers some ability to decide how much they use a realtor on a deal and allow consumers to conduct parts of a transaction without using a realtor, are not expected to be enough to satisfy the Competition Bureau which has filed a complaint with the Competition Tribunal over what it says is anti-competitive behaviour.

CD said...

Does anybody have the weekly numbers for victoria?

PainInThe said...

"I'd hate to think how many lives he's ruined."

I don't... since it's mainly realtors and greedy sellers.

But Garth doesn't take all the credit for simple truth.

Double-Agent said...

CD,

Here are the Greater Victoria stats for the period March 1-21

Unconditional Sales: 484
New Listings: 1,128
Active Listings: 3,535

Here are the graphs:

Sales and new listings

Active listings keep climbing

At this rate we should hit around 700 sales for the month which is more than 2009 but the same as 2008. However 700 sales would be much lower than March 2005, 2006 and 2007.

HouseHuntVictoria said...

Double Agent,

Let's say sales hit 700 and listings hit 3800 in March.

That's still only 5.4 months of inventory.

Balanced in the world of markets.

I suspect we won't see much movement up or down on the price side of things.

Perhaps we'll need sales to drop significantly from current levels (say 20% or so) or listings to jump significantly from their current levels (again, 20% or so) to see a prolonged drop in prices for the rest of the year matching 2008, of about 1.5%-2% per month.

April 2008 was the peak of that year. Will April 2010 be the peak for this market cycle?