Thanks for the info. Everyone would like to see more info/data about GTA and Vancouver market (why not AB?).


This is sad US reality (not a story). Men or women are working hard to save everything but they know they can not?
Question is…….How much bad is called bad and whom to trust?

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http://www.charlotte.com/foreclosure/story/55062.html?ref=patrick.net

The Tingleys were struggling to pay their mortgage. The monthly bill had climbed to $1,091, including catch-up payments. They didn't have the savings to sell the home at a loss.

"We can't afford it, we can't sell it and we're hurting ourselves just trying to keep it," Lea said.

Her credit has become so bad she said she can't open a bank account.She and Mark worry they will lose the home the next time they fall behind on the mortgage payments.They worry the home is falling apart: There is mold in the carpet where it meets the walls. Vinyl siding is cracking and popping. Wooden trim is rotting.

They could walk away and accept foreclosure.

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Yesterday US govt. brings life saving plan for home owner. Lot of banks/experts/mortgage companies welcomes those ideas. As there are few economic experts (professors) believe that will not going to work, it’s just delaying the housing recession for few more months. People don't need extension (easy pay for sometime) on jumbo loans that they can not afford anyways but they need affordable housing. Means we have to face the reality today or tomorrow but those house prices will go 35% or more down.

Same thing is happening in Calgary (AB) as all economic conditions are good, oil price is super high and employment is highest but house price is going down. It seems affordability is playing part here, not the jumbo loans.


US news but it can happen anywhere.
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http://dadtalk.typepad.com/dadtalk/2008/02/understanding-t.html?ref=patrick.net

So here we have the housing market collapsing in slow motion just like a financial pyramid scheme. First came subprime, the bottom part of the pyramid. Next comes the middle portion of the pyramid, which mean option-ARMS and Alt-A. Then comes prime mortgages. The wealthy are better situated to weather the collapse because they have more resources to begin with.

http://www.canada.com/edmontonjournal/news/business/story.html?id=a5c90f55-ae86-4ac9-9825-c551879f9290&k=14136

Nearly half of Albertans believe this is a bad time to buy a house, says a monthly consumer and business confidence survey released today by PricewaterhouseCoopers and Leger Marketing.

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There is a softening of demand for apartment rental units in Calgary, says the Calgary Apartment Association.

As of the end of January, vacancy rates industry-wide reached the three to four per cent level for the 50,000 rental units within the city.

"We have always said the market is the market, and the market always has a way of correcting itself in time," he said. "One of the very large reasons for improved vacancy rates is the number of condos now part of the rental market. We are advised that up to 40 per cent of new condo construction is available for rental."
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Tenants are paying only 50%-60% of monthly expense (mortgage, condo fee, tax) and remaining is paying by owner who is loosing every month. How long he can hold when price is going down.............?

Calgary Stats:

Price:
sfh aug 06 $426,588
sfh mar 07 $479,914
sfh feb 08 $458,459

Inventory:
sfh mar 07 2,272
sfh feb 08 4,755

Price:
Condo aug 06 $283,547
Condo mar 07 $312,280
Condo feb 08 $311,388

Inventory:
Condo mar 07 1,026
Condo feb 08 2,170

"This data does not include sell by owner or builders."

We would expect the mainstream media to ask some of these questions to the experts mainly they don’t want to talk. Instead, media is busy in printing the press releases of realtors who tout the ‘wonderful investment’ that Alberta real estate has been. Too bad that masses don’t seem to understand the difference between ‘has been’ and ‘will be’ when it comes to RE investing.

EREB(any real Estate Agency).... lot of people take them as expert advice. It's painfully clear that it is much more embarrassing to be part of an organization that you pay dues to that consistently lies. I think that's where alot of the passion comes from.... these experts ( or they don't have choice) belong to a corrupt institution and it clouds their integrity. Since every press release is a lie, the next release needs to be a lie to cover up the previous lie, and the cycle continues.


This is what they said yesterday in their press release:

"We predicted that sales would be on par with the last ‘normal’ year that we had in 2005. So far the market is behaving as we anticipated. The number of available residential properties listed on the MLS® at the end of February was up 12.7% from the previous month at 8,284 properties. In February 2007 the inventory had just 2,120 properties."

Now here is their forecast released less than 60 days ago.

"The current inventory of residential properties is now 7,094 homes. The inventory will decrease through the year but the wide choice of properties will have a dampening effect on prices offsetting increased demand from in-migration and economic growth. Condominiums are expected to become a stronger option (especially for first time buyers) because of the lower price point. The total number of residential sales in 2008 will probably drop slightly from 2007 levels. Perras expects that 19,100 residential properties will sell through the MLS® in 2008. There were 20,544 sales in 2007."

http://network.nationalpost.com/np/blogs/wealthyboomer/archive/2008/03/08/canada-not-immune-from-subprime-crisis-garth-turner.aspx?ref=patrick.net

“When bungalows in Vancouver cost $900,000 and resale homes with no parking in midtown Toronto are $1 million, it’s only forty-year mortgages and an embracing of debt that sustain the unsustainable,”




“The inevitable conclusion is that the current Canadian real estate market is floating on a sea of unrepayable, and perhaps unserviceable, debt.”

Among the myths Turner identifies:

1.) Unlike stocks, real estate is a riskless investment.
2.) Houses [always] appreciate
3.) Canadian lenders are more conservative [than U.S. subprime lenders]
4.) Industry experts are worth heeding
5.) You need some place to live anyway
6.) A house is a great investment
7.) Better to be an owner than renter
8.) Rising markets are normal
9.) Real estate profits are tax-free
10.) Canada is different

Good to know about other side of the wall.

http://www.macleans.ca/business/companies/article.jsp?content=20080305_95609_95609&page=1

http://ctv2.theglobeandmail.com/servlet/story/RTGAM.20080313.wrsubprime13/business/Business/businessBN/ctv-business


U.S. mortgage mess creeps north


U.S. mortgage mess creeps northBy TARA PERKINS AND LORI McLEOD, From Thursday's Globe and Mail




The effects of the U.S. subprime crisis are showing up on the fringe of the Canadian mortgage business, even though mainstream lending and the housing market are on solid ground.

Lenders catering to riskier borrowers, most of whom took advantage of new financing techniques and a wave of liquidity to enter the market in the past few years, are struggling to fund their operations.

The result is a slow retrenchment in a sector that held about 5 per cent of the Canadian mortgage market before the credit crunch spread from the United States in August.

Some offices have been closed, employees have been let go, and fewer so-called alternative products are being offered to borrowers who do not qualify for regular loans.

Toronto-based Xceed Mortgage Corp. yesterday suspended its line of uninsured mortgage products, effective immediately.

Mississauga-based lender MoneyConnect Inc., meanwhile, told brokers last week that it's liquidating a portfolio of mortgages.

Lenders in this sector that rely on securitization can't access financing to take on new mortgages, noted Jim Murphy, president of the Canadian Association of Accredited Mortgage Professionals.

That's creating new opportunities for the big banks and others who are moving in to fill the void.

Last week, MoneyConnect posted a notice on its website informing mortgage brokers of a "warehouse clearance sale."

The company, launched early last year, was created to originate and buy "non-conforming" home mortgage products on behalf of institutional investors and securitization providers - companies that package loans to sell them as bonds.

But "our warehouse is full and due to ongoing turmoil in the capital markets, traditional investors simply aren't buying mortgages," it said on its website. As a result, it decided to "slash penalties and liquidate our warehouse portfolio."

The company urged mortgage brokers to take its customers' mortgages and shop them around to new lenders. It offered to waive the prepayment penalty charge for some customers who were then able to pay off their mortgages.

MoneyConnect warned in December that it would not approve more loans until further notice while it pursued new sources of funds. "Although the quality of mortgage credit in Canada continues to remain extremely strong and has not been a contributing factor to this global dilemma, a crisis of confidence exists with investors, which is preventing Canadian originators from accessing capital-markets-based funding," it said.

Its chief executive officer, Maurice Forget, could not be reached yesterday. The privately held company is partly owned by its executives, a global investment bank, and Quanto Financial Corp., whose principal shareholders are Deutsche Bank (Canada), National Bank of Canada and Montreal-based private equity firm Redfern Equity Capital Partners.

Shortly before the subprime crisis hit, MoneyConnect had been hoping to ride the "non-conforming" mortgage market, catering to customers who found it difficult to get bank financing. The company expected an annual industry growth rate of 50 per cent.

Instead, the market has teetered of late. HSBC Financial Corp. Ltd. shut down its mortgage services operation here, closing dozens of locations and cutting about 300 jobs as it exited the subprime mortgage business in North America. GMAC Residential Funding of Canada cut about 70 employees. And Accredited Home Lenders, which could not be reached for comment, appears to have chopped its Canadian work force and stopped accepting new loan applications at its Toronto and Vancouver offices because it could not securitize the loans in Canada.

Alex Haditaghi, chief executive officer of MortgageBrokers.com, said the departure of these lenders is a reflection of the collapse of mortgage securities, and not a sign of trouble in a robust Canadian mortgage market.

One industry source said that "the big players, such as the major banks, are loving it because they're getting all the business back again."

The decrease of uninsured mortgages has caused an increase in business for alternative lender Home Capital Group Inc., whose mortgages are insured by Canada Deposit Insurance Corp. and cover no more than 80 per cent of a home's value, CEO Gerald Soloway said.

The entry of higher-risk mortgage providers into the conservative Canadian market was an anomaly, and he's happy to see things returning to the way they were.

"I personally think ... this is a good thing for the economy long term, because we've seen the devastating effect it's had on the United States with mass foreclosures, mass evictions, great disruption. They thought they were doing a great gift for people letting them into a house with no money down. But I think in reality the disruption to society as a whole far outweighs that benefit."