Baby, we got a bubble!?

[interested]

Echoing that thought without actual data.
Toronto in 1986-1989 more than doubled and almost tripled as I recall. Then it fell down from 1989 to 1992/3 and moved minimally from 1993-1996 when it started its ascent.
This time as Daveto points out, the rise has been much more gradual. I am not so sure we will see the same rise/fall as the US however. The double/tripling leads to an over swing of the pendulum. The more gradual increase means the gradual decrease may not have the over swing on the downside. Or that may be wishful thinking.

 

[recharts]

GTA outside of Toronto is melting down !

http://recharts.blogspot.ca/2013/04/outside-of-to-gta-is-melting-down.html

You can get a full size picture of the disaster from here

http://s1332.photobucket.com/user/recharts/media/TheGTAdisaster_zps2b629363.jpg.html

I was shocked when I realized that most of the GTA is actually loosing steam seriously.
I did not create a heat map because I have access to only 11 days of sales data.
I will probably end up creating regional heat maps since a GTA wide heat map will be difficult to process and very CPU consuming when created

 

[CN Tower]

GTA outside of Toronto is melting down !

http://recharts.blogspot.ca/2013/04/outside-of-to-gta-is-melting-down.html

You can get a full size picture of the disaster from here

http://s1332.photobucket.com/user/recharts/media/TheGTAdisaster_zps2b629363.jpg.html

I was shocked when I realized that most of the GTA is actually loosing steam seriously.
I did not create a heat map because I have access to only 11 days of sales data.
I will probably end up creating regional heat maps since a GTA wide heat map will be difficult to process and very CPU consuming when created

You asked for feedback. Your chart is difficult to follow & your comments border on extremist.

Melting down? C'mon. Year over year housing prices are flat to slightly up. Be realistic or no one will take your seriously.

Of great concern it seems is the evaporating new condo sales market particularly in the downtown core. That truly is experiencing a correction right before our eyes.

 

[recharts]

You asked for feedback. Your chart is difficult to follow & your comments border on extremist.

Melting down? C'mon. Year over year housing prices are flat to slightly up. Be realistic or no one will take your seriously.

Of great concern it seems is the evaporating new condo sales market particularly in the downtown core. That truly is experiencing a correction right before our eyes.

My map is difficult to follow? You did not say what exactly is difficult and for that reason your feedback in not very useful

Year over year with average prices is exactly what I am trying to show that it is a fake indicator.
What I am saying above is proving exactly that, if you look at Toronto only, you might believe that the market is still floating
As soon as you look outside of Toronto you see a sea of sales under the asking price and if that is an extreme situation it deserves extreme comments
Nobody said that, on the contrary I have read many comments like "In Brampton the market is hot". The truth is that it is melting. That is the right word. I have collected just 10 days of data and it looks awful !

Anyway, this is a subjective matter and I guess we will have to wait.
Let's better discuss why my maps are hard to follow. Please be more detailed on this.

 

[rbt]

My map is difficult to follow? You did not say what exactly is difficult and for that reason your feedback in not very useful

Well, it's very cluttered. When zoomed out so you can actually see the entire GTA everything overlaps and becomes unreadable.

You've got 3 different things going to define the data. Lean of the marker, colour, and a number inside the marker. We're expected to perform aggregation in our heads. If the housing type and price range distinctions are important then make different maps for them so we can see the effects individually. If they're not important (is the data statistically different than the other groupings?) then fold them together style wise.

The number in the marker is compared to listing price with no indication of whether the listing agent missed on the price or whether it's an actual change from last year. Selling for 10% below list within a couple of weeks of listing isn't a big deal (motivated seller, or the seller missed on the price). If it's 10% under 3 months after then that might be an indication of a weak market.

To top it off, there is no reference to what is normal for the for sold versus listing price. People like to negotiate and get a deal, as a result selling price is almost always below listing price by a couple of percent. Bidding wars and regularly selling above the listing price is not normal; that's the exception and an indication something is wonky with the market.

Finally, is the listing price up from last year or has it been stable? Are agents mistakenly pricing in a 5% appreciation over last year and only getting 2% or are they trying to sell for last years prices and actually getting lower than that?


Aggregations/averages for each ward and a chart rather than a map would be significantly more readable.

That said, my interpretation of your map is that the market is stable. Most selling prices are within 3% of list which tells me agents are not getting surprised by a rapid price declines; sellers are generally taking a price they want and not panic selling.

 

[recharts]

Well, it's very cluttered. When zoomed out so you can actually see the entire GTA everything overlaps and becomes unreadable.

Well you show me a map that has 3000 points, high density and fits so you can see it on a desktop and I will do it like that
So far MLS and any other map that I have seen shows no big picture ....so you could say that it is at least no worse than any other map. I doubt that you have a better example, let's see it.

You've got 3 different things going to define the data. Lean of the marker, color, and a number inside the marker.

People do not buy aggregates.
People are misled with aggregates... a la TREB or CREA.

We're expected to perform aggregation in our heads.

I usually provide heat maps for that but they are local aggregates, lots better than what I have seen anywhere else
Inthis instance the point is the generalized slow melting (not crashing) but surely melting of the market.

If the housing type and price range distinctions are important then make different maps for them so we can see the effects individually. If they're not important (is the data statistically different than the other groupings?) then fold them together style wise.

Can you point me to an example?
The only purpose of this instance is to show the GTA wide downward price direction.

The number in the marker is compared to listing price with no indication of whether the listing agent missed on the price or whether it's an actual change from last year. Selling for 10% below list within a couple of weeks of listing isn't a big deal (motivated seller, or the seller missed on the price). If it's 10% under 3 months after then that might be an indication of a weak market.

You seemed so focused to discredit the map that you forgot the purpose which is to show the fact that GTA wide almost everywhere outside Toronto the prices are decreasing
2200 listings sold under asking is too much to micro think as you did above.
Are you telling me that 2200 agents or sellers all conform with your rather less probable situations indicated above? I am beginning to believe that you don;t want to hear the message...

To top it off, there is no reference to what is normal for the for sold versus listing price. People like to negotiate and get a deal, as a result selling price is almost always below listing price by a couple of percent. Bidding wars and regularly selling above the listing price is not normal; that's the exception and an indication something is wonky with the market.

It donesn't matter. 2200 under is 2200 under ...what is the probability to have that on such a wide scale ?

Finally, is the listing price up from last year or has it been stable? Are agents mistakenly pricing in a 5% appreciation over last year and only getting 2% or are they trying to sell for last years prices and actually getting lower than that?

I don't care ..the prices are all in sync UNDER the asking price. What is the probability that 2200 out of 2900 sellers to ask for a price and all of them to get less that that ??

Aggregations/averages for each ward and a chart rather than a map would be significantly more readable.

That will be provided in the next weeks and I will create dedicated maps for each area
It is time and CPU consuming to calculate the all in one map
I doubt that it will change the situation and it will make your arguments better

That said, my interpretation of your map is that the market is stable. Most selling prices are within 3% of list which tells me agents are not getting surprised by a rapid price declines; sellers are generally taking a price they want and not panic selling.

It is your interpretation
A person who wants to believe that it is normal to have 2200 listings out of 2900 listings sold UNDER the asking price must have reasons to believe that.

Have a look at my Toronto maps and try to explain why the same is not happening for those maps ...

 

[Riverdale Rink Rat]

A person who wants to believe that it is normal to have 2200 listings out of 2900 listings sold UNDER the asking price must have reasons to believe that....

Recharts - sorry, but for many, many years sales under asking was the norm. The market has changed, as you have made clear. But you are then making projections about price drops not supported by your data. Asking price is an indicator only, yoy sales price changes are much more indicative of market trend.

 

[interested]

recharts.

First let me commend you on what is obviously a major undertaking.

That said, I agree that 2200 of 2900 listings under asking price shows softening of the market compared to the recent market that was overheated. As RRR pointed out, this selling in bidding wars and over price is not the usual pattern of real estate in Toronto and the burbs but rather something that started up in the mid 2000's. As RRR says, and especially in the burbs, bidding wars were never as common (in fact I would suggest rather rare) so that 905 was not going for above asking is not new information.

I think there have been a lot of constructive ideas on how to improve the charts. I believe I am speaking for everyone or most at least that we appreciate the effort you are making to generate data and heat maps would be a welcome addition.

I too have to acknowledge that I find it somewhat difficult to interpret the combined maps.

Ideally, if you could do the same maps with Teranet data showing house variation in price from 2011 to 2012 and then perhaps 2012 to 2013, that would really provide the best image of what is truly happening.

Personally, I concur that the market is slowing. I think prices are dropping but slowly. Also, when one peaks out which occurred mid last year, there has been a greedy tendency on the part of many sellers with prices tending to be set as rbt may have been eluding to with a further 5% above market value in the hopes of getting more than the previous and this may be the biggest factor reflected in the present data. I am of course with this not counting the smaller proportion of listings that are priced ridiculously low to generate bidding wars.

 

[recharts]

recharts.

First let me commend you on what is obviously a major undertaking.

That said, I agree that 2200 of 2900 listings under asking price shows softening of the market compared to the recent market that was overheated. As RRR pointed out, this selling in bidding wars and over price is not the usual pattern of real estate in Toronto and the burbs but rather something that started up in the mid 2000's. As RRR says, and especially in the burbs, bidding wars were never as common (in fact I would suggest rather rare) so that 905 was not going for above asking is not new information.

I think there have been a lot of constructive ideas on how to improve the charts. I believe I am speaking for everyone or most at least that we appreciate the effort you are making to generate data and heat maps would be a welcome addition.

I too have to acknowledge that I find it somewhat difficult to interpret the combined maps.

Ideally, if you could do the same maps with Teranet data showing house variation in price from 2011 to 2012 and then perhaps 2012 to 2013, that would really provide the best image of what is truly happening.

Personally, I concur that the market is slowing. I think prices are dropping but slowly. Also, when one peaks out which occurred mid last year, there has been a greedy tendency on the part of many sellers with prices tending to be set as rbt may have been eluding to with a further 5% above market value in the hopes of getting more than the previous and this may be the biggest factor reflected in the present data. I am of course with this not counting the smaller proportion of listings that are priced ridiculously low to generate bidding wars.

hi interested

Do you have problems with interpreting maps with less data too (like this one: http://recharts.blogspot.ca/2013/04/to-bidding-wars-debunked-april-26-update.html )
You are not making it clear ..what are the difficulties that you are facing ?
You have to admit that the more info you put on a map the more difficult is to interpret that map and by what rbt said one has to look at lots of factors to truly have and idea where the market is going.
I am not aware of a better representation than this one and I would love to see a better one.

When you say Teranet data do you have a specific public source in mind ?
As far as I know the Teranet data is not local so how could I put on the same map the Teranet data local sales for specific burbs ..

Price stickiness is supposed to last for like an year, so by this summer we should see the price drops reflected even by the MLS stats (they will not be able to hide it anymore behind the average numbers)
Right now, by my opinion, Toronto is taking a hit in the less central areas. There are hoods like NorthYork and Downtonw (well reflected in my heat maps) where the madness continues BUT there is increasing accumulating inventory in these areas (NorthYork -this one is really bad- Etobicoke and Downtown). They still resist because whoever owned/invested/speculated and now is selling has money (these are mostly properties well above 1 million) and they will be able to hold the price a little longer.

The initial lower asking price is revealed by my heat maps, for these sales you see that the seller got the price of the area (the color of the marker is the same as the surrounding areas') but the percentage over the asking price is higher (5-10%) that clearly is an attempt to set a bidding war that failed. That is one of the ideas behind these maps.

 

[interested]

Recharts.

This map with less data is much easier to interpret.

The other map had a lot of overlapping data I found and so could not fully follow it.

I do not know if Teranet has specific public sources. The reason I suggested Teranet was because it compares the same property selling again. So if there was say a property that sold in 2010 and again in 2012, and assuming it had not been markedly altered (improved/renovated) then one could get a fair idea of what is really happening in the market on the same property. Ideally something that sold in 2011 and again in 2012 would indicate the year on year change.

You are absolutely right about price stickiness.

My understanding in Oakville which I know a bit about is that $500-700K is moving well with even some multiple bids.
Get to $1.5 million and the properties are sitting.

I appreciate what you are trying to do and it would really be useful. I think things are softer perhaps in particular with the condo market in downtown. Since I think a lot of us are very interested in that market (I hope I am not misrepresenting the forum on this), I wonder if you could do a detailed study of C01 downtown condos. If any market should bear out the theory that the market is slowing (how fast is subject to interpretation) that should show one of the most apparent examples.

 

[interested]

^^^
One further thought about the data...a theory if you like.

I think doing the data with new listings of 30 days and under will provide the most accurate data. When listings get beyond 90 days, it is usually because 1) the price is too high, 2) the property is not desirable,3) the vendor is unrealistic or not motivated.

I wonder if people despite what you read of general numbers of indebtedness are in fact divided in 2 camps (with some overlap obviously). Camp 1 is people who have property and if bought before 2011 have more equity due to price appreciation and are not tight and camp 2 is people who stretched in 2011/2012 to buy and are tight. If the majority are in Camp 1 which is what I suspect unless there is job loss, situation change etc., they may want but not need to sell. Hence until something drastic happens, we will not see a "severe melting". The situation would occur with major altering event (world event, major rise in interest rate etc.) but is not in the immediate cards. If more and more people are in Camp 2, then the even may occur with a more minor "major event".

 

[recharts]

Recharts.

This map with less data is much easier to interpret.

The other map had a lot of overlapping data I found and so could not fully follow it.

Have you tried to zoom in ?
I also posted a link to a jpeg file that has to be seen with a picture viewer with zoom in capabilities
http://s1332.photobucket.com/user/recharts/media/TheGTAdisaster_zps2b629363.jpg.html
to download this picture use the Options button at the right top side

I do not know if Teranet has specific public sources. The reason I suggested Teranet was because it compares the same property selling again. So if there was say a property that sold in 2010 and again in 2012, and assuming it had not been markedly altered (improved/renovated) then one could get a fair idea of what is really happening in the market on the same property. Ideally something that sold in 2011 and again in 2012 would indicate the year on year change.

give me the data and I will give you the map. Till then that is the best that I could do and it is much better than anything that I know.
It gives you the big picture view without missing the local specifics for an area.

You are absolutely right about price stickiness.

My understanding in Oakville which I know a bit about is that $500-700K is moving well with even some multiple bids.
Get to $1.5 million and the properties are sitting.

Not really..here are the 32 sales that I have for Oakville (during the last 11 days)
Some of them are on the map use the zoom and pan functions

SoldPrice	Taxes	PercentofCurentAsking	DaysOnMarket	Style
435,000	3146/2012	99	16	Detached
439,900	3171.51/2012	100	5	Att/Row/Twnhouse
449,000	3209/2012	100	8	Att/Row/Twnhouse
448,000	3012/2012	99	13	Att/Row/Twnhouse
455,000	3012/2012	97	37	Att/Row/Twnhouse
460,000	3294/2012	97	21	Att/Row/Twnhouse
505,000	3265/2012	97	32	Detached
525,000	3338/2012	99	16	Detached
550,000	3631/2012	97	9	Att/Row/Twnhouse
560,000	3897/2012	97	15	Detached
560,000	3518.69/2012	95	29	Detached
632,175	0/2012	98	52	Detached
655,000	4344/2012	98	5	Detached
670,000	4917/2012	96	19	Detached
715,000	5600/2012	98	8	Detached
775,000	4833/2012	100	9	Detached
775,000	4876/2012	99	8	Att/Row/Twnhouse
775,000	4504/2012	97	91	Detached
848,500	5630/2012	96	29	Detached
886,500	5102/2012	96	18	Detached
920,000	1/2012	94	127	Detached
1,160,000	6625/2012	97	26	Detached
2,100,000	13380/2013	96	16	Detached
2,400,000	21272/2012	93	58	Detached
522,000	3152/2012	95	9	Detached
545,000	4340/2012	99	14	Att/Row/Twnhouse
703,000	5096/2012	98	56	Detached
776,000	5902/2012	97	87	Detached
1,016,750	7168/2012	95	36	Detached
1,167,500	6324.26/2012	97	42	Detached
435,200	2811/2013	102	8	Semi-Detached
420,000	3274.23/2012	98	2	Detached

I appreciate what you are trying to do and it would really be useful. I think things are softer perhaps in particular with the condo market in downtown. Since I think a lot of us are very interested in that market (I hope I am not misrepresenting the forum on this), I wonder if you could do a detailed study of C01 downtown condos. If any market should bear out the theory that the market is slowing (how fast is subject to interpretation) that should show one of the most apparent examples.

I did not bother to map the condo market. By my opinion the fate of that market is sealed.
You do not need very refined stats for that to see the obvious: too many of them. And one more thing that I anticipated long time ago: the downtown infrastructure -hospitals, schools, shopping, is not prepared to take that number of people living in that area. They built condos but there is no room for these facilities. Whoever will build them will get rich if those condos will ever all be occupied. Right now they are not entirely occupied.

The heat maps for condos are particularly difficult to build since there are many at the same address (read geo location) and it will be senseless to even try it.
The best that can be done is to create a density map which shows how many are for sale at a specific address but I did not bother to collect data for that.
On top of that in order to map the many condos available for sale I need to make a call to Google Maps API for each new one and that will eat up my quote of 2500 free calls/day that I have available for SFH for the entire GTA which right now it is at limit ... so I don't think that I will be able to do that

I have not extensively reach this forum ..if it is focused on Condo discussions then I should go away

 

[recharts]

^^^
One further thought about the data...a theory if you like.

I think doing the data with new listings of 30 days and under will provide the most accurate data. When listings get beyond 90 days, it is usually because 1) the price is too high, 2) the property is not desirable,3) the vendor is unrealistic or not motivated.

I wonder if people despite what you read of general numbers of indebtedness are in fact divided in 2 camps (with some overlap obviously). Camp 1 is people who have property and if bought before 2011 have more equity due to price appreciation and are not tight and camp 2 is people who stretched in 2011/2012 to buy and are tight. If the majority are in Camp 1 which is what I suspect unless there is job loss, situation change etc., they may want but not need to sell. Hence until something drastic happens, we will not see a "severe melting". The situation would occur with major altering event (world event, major rise in interest rate etc.) but is not in the immediate cards. If more and more people are in Camp 2, then the even may occur with a more minor "major event".

think about how often the people change the houses for different reasons:
-divorce
-job change
-job loss
-schools
-marriage
-upgrade
-downgrade
-retire
and probably there is many other reasons.
The problem is not what it is now but rather what will happen in the years to come.
Since the prospects are not very good for the next 5 years some will better exit the market now at the peak than later when it goes down.
I say that the "catastrophic" events that mane believe that we need are built into the nature of this bubble:
-cheap credit (low interest rates)
-high percentage of the GDP depends on the FIRE indistries
-high level of debt

By my opinion we have reached the point where whoever wanted and could afford a house got it.
Many speculated and ...they are trapped right now.

There is not many buyers left out there (70% ownership remember?) so just selling each other houses at a higher and higher prices will not get us anywhere...

All the above make me think that this is going to pop soon

PS: I Ddid not mention anything about the general weakness of the economy and the dependence on the resources demand on the global market which is going down

 

[interested]

^^^
Your arguments are sound.
I don't see much room for increase. I am still not sure there will be large decreases however again until something changes.
Interest rates will not go up significantly unless the economies are improving or unless we end up with the repeat of stagflation of the 70's (God forbid). So if they are rising, it is because the economies are improving. If they don't rise much, then it is because things remain bad but if they do not signficantly deteriorate, prices will not fall off the face of the Earth.

Anyhow, many on this forum have been waiting for at least 5 years for a significant correction and apart for the 9 months in 2008-2009 which recovered quickly, has not happened.

Markets contrary to popular belief are not rationale entities. They are driven by people's emotions and events not forseen in many cases which is why logic make it difficult to predict events.

 

[CN Tower]

^^^
Your arguments are sound.
I don't see much room for increase. I am still not sure there will be large decreases however again until something changes.
Interest rates will not go up significantly unless the economies are improving or unless we end up with the repeat of stagflation of the 70's (God forbid). So if they are rising, it is because the economies are improving. If they don't rise much, then it is because things remain bad but if they do not signficantly deteriorate, prices will not fall off the face of the Earth.

Anyhow, many on this forum have been waiting for at least 5 years for a significant correction and apart for the 9 months in 2008-2009 which recovered quickly, has not happened.

Markets contrary to popular belief are not rationale entities. They are driven by people's emotions and events not forseen in many cases which is why logic make it difficult to predict events.

Guava blows this guy's crap out of the water. Simplicity. Clarity. Transparency.

What's wrong with looking at GTA or City of Toronto median prices & sales data year over year? On a macro level how can you get a cleaner picture?

http://guava.ca/indicators.html