Greater fools come out come out wherever you are………..

This has got to be one of the most preposterous positive spin articles I have read to date. You don’t understand economics. You are scaring people with this misunderstanding. Yes, we will continue to experience ASSET deflation as in real estate and stocks, for the duration of this recession. That is simply the correction in prices taking place following an insane boom, brought about by the digital printing press.

http://www.theglobeandmail.com/servlet/story/RTGAM.20081114.reRealEstateMarket1114/BNStory/RealEstate/home?cid=al_gam_mostemail

According to the globe and mail and their paying advertisers (realtors) Obama is causing the dismal Toronto housing market to heat up and if all the potential home buyers all hold off till spring there may be bidding wars.


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MLS home sales plunge to weakest level since 2002

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20081114/mls_sales_081114/20081114?hub=TopStories

TORONTO -- The number of homes sold through the Canadian multiple listing service plunged 14 per cent last month to the weakest level since July 2002.

It was the steepest month-to-month decline since June 1994, the Canadian Real Estate Association said Friday.

The association added that the impact was heaviest in big cities -- notably Toronto, which accounted for one-third of the national decline. Total major-market sales were down 15.1 per cent from September, and overall national sales were down 27 per cent from October of last year.

"The breadth and depth of the drop in MLS activity suggests a major downshift in consumer psychology," commented CREA economist Gregory Klump.

Housing slowdown speeds up

Market deterioration surprises analysts, implies `bust has begun'


It doesn't bode well for consumer confidence this Christmas when the value of an existing Canadian home is worth $30,000 less than a year ago, as the accelerated pace of the housing slowdown continues to surprise analysts.

"Canadian home sales look to be one of the biggest casualties from the intense market turmoil," BMO Nesbitt Burns economist Doug Porter wrote in a note.

"We declared early this year that the housing boom was over, and these figures on the surface would suggest the bust has begun."

The average price of a home in October was $281,133, compared with $312,024 in October of 2007, according to figures released yesterday by the Canadian Real Estate Association.

In Ontario, the average price was down 10 per cent to $281,661 in October, compared with $312,937 in October of 2007.

Sales were also down by 14 per cent in October over September, the largest month-over-month decline in seasonally adjusted sales in more than 14 years.

http://www.yourhome.ca/homes/article/537438

As a sign that perhaps mortgage rates are headed downward, BMO has adjusted its 5 year rate down to 5.25%

http://www.thestar.com/Business/article/537242

read the comments as well

House price 400K, Granite counter top 3k, Realtor’s commission 15k, but Common sense not to buy in this market is priceless


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http://www.greaterfool.ca/

First, let’s do the math. I figure you can get a nice one bedroom-plus-den unit in downtown Van in an almost-new building for $1,800 a month. At least that’s what I hear, and a quick search turned up a few. With the way the market’s going, I’m sure there will be more each week for you to choose from.

Now, let’s say you bought the same unit and got a good deal (at least for now) at $400,000. With 10% down, or $40,000, you’d have a $360,000 mortgage. That home loan at the current five-year rate, with an am of 25 years, would cost you $2,566 a month. The lost earnings on the $40,000 at a 5% return would be $167 a month. Strata fees, another $200, and ditto for property tax, which is running about 0.06% of current condo market values in Vancouver. That comes out to $3,133 a month, or damn close to twice the rental rate. Oh yeah, and you’d need about $10,000 more in cash to close the deal, for BC’s transfer tax, legals etc. Of course, I have not added in any overhead for insurance or utilities.

So, to summarize: The cost of renting - $1,800 a month, $0 down and no equity. The cost of buying - $3,133 a month, $50,000 down and $10,000 equity.

But we’re not finished.

With renting you don’t have any debts. With buying, you have a mortgage of $360,000 which you have to pay back, cannot escape, and the interest rate on which can be reset higher upon renewal. With renting, you can move out when the lease is up. With owning, you can’t go anywhere until you list it, go through a few months of showings, finally accept an offer and then close the deal a month or two later. With renting, your living costs are subsidized by a landlord. With owning, you are your own landlord. With renting you can get your shower, toilet, fridge or dishwasher fixed for free. With owning, you pay everything. With renting you have liquidity, $50,000 in the bank, mobility and choice. With owning you are wedded to your condo, which took all your money to purchase and you can’t move back to Seattle without selling it – or renting it out for $1,800 and subsidizing someone else.

But that’s not all.

As a renter, you cannot participate in the endless year-over-year appreciation of the Van market, where the average house price is going straight from $700,000 to $1.5 million. This is because of immigrants, world-class people on Robson, mountains invading the core, the sure-thing 2010 bonanza Olympics thingy, and armies of rich Boomers in RVs making the trek from Mississauga over the Rockies. None of those fabulous capital gains will be yours. But as a renter you’ll also avoid what might be coming, which is a 40% decline in the value of Vancouver real estate making it possible, once again, for average people to avoid average homes. Especially condos. As an owner, you won’t. So much for that equity.

http://network.nationalpost.com/np/blogs/toronto/archive/2008/11/19/seller-throws-in-a-free-car-and-still-the-house-doesn-t-sell.aspx

Seller throws in a free car — and still the house doesn’t sell

The homebuyer who purchases the spacious, two-storey detached brick house on Westlake Avenue will get a new fridge, a gas stove, a finished basement — and a new car.

The owner, who has been trying to sell it for two months and repeatedly lowered the price, decided to list the three-bedroom home in East York for $379,000, with a purchase bonus of a vehicle worth up to $15,000.

“It’s at really good-market value. Here we are giving a $15,000 car away and we still haven’t got the property sold,” said Michael Clarke, the real estate agent who introduced the incentive more than a week ago.


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VP OF RESIDENTIAL RE AT ROYAL LEPAGE TELLS TROOPS TO PREPARE FOR 30-50% PRICE DECLINES IN THE CITY OF TORONTO

Overheard at a gathering of professionals yesterday. The driver cited is Garth’s item #1 - unemployment rate increases. The unvarnished expectation is that all areas have taken a 10% hit already, but by end of 2009 the ‘better’ areas (Lawrence Park, York Mills/Bayview, etc.) will take another 20% hit +/- and the overhyped areas or traditionally fringe areas that have been home to ‘nouveau’ money floated by the boom (Yonge/Sheppard, Beach, Leaside) will take a 40% hit. This isn’t the propaganda that hacks have been flogging to compromised newspapers or to reporters - this is the advice of business people running large brokerages, preparing for reality in 2009.

The days of minimum 25% down (skin in the game) and carry costs that don’t exceed the old 33% of cash flow/income rule of thumb are coming back with a vengeance, once prices readjust rapidly across the board. And don’t think that condos are automatically going to take a bigger hit than some target area detached housing. The $1-2M detached market in the City is heading for a big fall due to the demographics. Immigration is not sufficient to stem the tide against steeper price declines for large,expensive detached units vs. smaller subway-located central condos (where the market is expected to be broader-based re downsizers, young professionals looking for downtown easy access,etc.). The last thing you want to own now is a Leaside-like infill that you bought within the last 2-4 years. Those types of homes are going to readjust drastically because there are fewer people who need them and more owners who are losing/will lose their jobs next year who took on seriously stupid debt to buy them.

Quote:

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Originally posted by rsbagwell

I do not understand the logic behind increasing the property taxes if the house price go up. I mean, If I am not planning the sell the house and have permanently settled in the same house, why increase in property tax even if house price as gone up? Increase in house price does not do any good to me!
I bought the house say five years ago and budgeted my expenses according to my family income at that time.
Now the property tax have gone up by 12 % just because house price has gone up. I have not seen 12 % increase in my salary to compensate this or to compensate increase in gas, hydro, consumer gas, car insurance prices.

I believe property taxes should be based on square footage of lot/house.
You said it right. It's a scam. It's a rip off.

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Amit Kalia, Broker, REALTOR®
RE/MAX Real Estate Centre., Brokerage
independently owned & operated
100 City Centre Dr, Unit 1-702
Mississauga, ON L5B 2C9
Phone No.: 905-339-5111
Website: https://www.realestate-ontario.com/
Condo Blog: https://condopundit.com/blog/

Canada's housing boom over

Canada's longest housing boom in 60 years is over, according to a new report released by Scotiabank Economics on Thursday.

But, this country will not see plunging home values to the same degree as other, more at-risk nations, like the United States, said Adrienne Warren, Scotiabank senior economist and author of the study.


"This is not a 'U.S.-style' bust caused by overbuilding, speculative buying and imprudent lending," she wrote.


Instead, while Canada's longest housing upswing since the end of the Second World War is history, owners only face a garden-variety price adjustment, Warren said.


Essentially, the slowing global economy will crimp buyers' interest in home purchases across Canada, she said.


"We expect that the correction in national average prices from their late-2007 peak will probably be in the range of 10-15 per cent, well below the ongoing U.S. retrenchment," Warren said.


In October 2007, the average price for a Canadian home was $312,024, according to the Canadian Real Estate Association.


If Scotiabank's prediction comes true, the average house price should reach a bottom somewhere close to $260,000, a drop of a further 7.5 per cent from the standard of $281,133 for a house in October 2008.


Her rationale for calling the end of Canada's housing boom is based upon housing starts, building permits and home prices, all of which are lower compared to their cyclical highs.


Urban areas in the especially red-hot region of Western Canada, like Calgary, Edmonton and Vancouver, are likely to see the biggest dropoffs in terms of activity and prices, Warren said.


Canadians, however, never used exotic financing nor piled up as much household debt as did their American cousins in purchasing new and existing homes.


Thus, while the Canuck housing market will drop in terms of prices and activity, Warren said, the U.S. sector faces a deeper plunge, Warren said.


Interestingly, Canadian home prices never reached the stratosphere achieved by other markets.


Home prices in Ireland, for example, jumped 167 per cent between 1997 and 2007, compared to 61 per cent in Canada.


As well, housing prices in some countries now represent more than a household's annual income, a measure of affordability.


In Spain, for instance, the average home in 2007 was worth 156 per cent of the household's income. In Canada, that ratio stood at 134 per cent for the same year.


Based upon valuation measures used by the International Monetary Fund, Australia, the United Kingdom, Spain and Ireland are likely to experience a more depressed housing market in the coming year than will Canada, Warren said.

http://ca.news.yahoo.com/s/cbc/081120/business/business_scotiabank_housing_1

Keep well,

Cheers!