Baby, we got a bubble!?

[ISYM]

The bottom line: Wait 5 years to buy your home because you're afraid of a bubble, and pay $70,000 more than you would today. This has been proven time and time again. You cant time the market so dont try. Warren Buffet will tell you to invest and hold when you can afford to do so.

True, one cannot time the market but that statement should be qualified - one cannot time the high or the low. One can though understand it sufficiently enough especially on the macro neighbourhood level by folowing its ebbs and noticing the trending which would enable them to make a choice wiser than just jumping in at any time.

 

[detroitbootybass]

Warren Buffet will tell you to invest and hold when you can afford to do so.

'Snowball', aka Warren Buffett, is a value investor (he learned from the master himself, Ben Graham). And he NEVER buys an overpriced asset. In fact, he has warned against it constantly. He does not overpay for anything and he also tries to steer people away from real estate investments as he believes they are too volatile and don't offer good value.

But you are right about Mr. Buffett encouraging people to hold their investments long-term (a central tenet of value investing); ten-fifteen-twenty years is what they consider 'long-term'.

 

[recharts]

OK I am now collecting condos stats as some of you asked me for some charts for this sector of the market


Here are some preliminary results

http://recharts.blogspot.ca/2013/05/the-iceberg-called-iceboat-some.html

and interesting facts about the buildings at 151 Iceboat terrace

here is what was sold in the last two months. I obliterated the exact condo #
As you can see lots of days on the market, lots of inventory and very few sales, all of them at loss

Address	SoldPrice	CurentAskingPrice	InitialAskingPrice	PercentofCurentAsking	DaysOnMarket	SoldDate	
151 Dan Leckie Way 81x	304900	299900	319000	102	43	22/04/2013	-14100
15 Iceboat Terr 31xx	380000	399000	419000	95	96	25/04/2013	-39000
15 Iceboat Terr 29xx	277000	289900	299900	96	41	29/04/2013	-22900
151 Dan Leckie Way 52x	293800	299900	299900	98	26	30/04/2013	-6100
21 Iceboat Terr 82x	295000	304900	304900	97	42	07/05/2013	-9900
15 Iceboat Terr 93x	337000	344900	344900	98	23	14/05/2013	-7900
15 Iceboat Terr 53x	442500	454000	454000	97	43	15/05/2013	-11500

 

[chwong]

This is a sign of normal/healthy real estate market, sold within the range of 95% to 100% and average 30-40 days on the market. The market is still moving at a sustainable rate. No sweat for home buyers.

 

[recharts]

This is a sign of normal/healthy real estate market, sold within the range of 95% to 100% and average 30-40 days on the market. The market is still moving at a sustainable rate. No sweat for home buyers.

I doubt that you bothered to read the information that I posted
I also doubt that, in case you read, you understood anything.
Your post is rather shallow and dismissive than intelligent and based on facts

 

[cdr108]

OK I am now collecting condos stats as some of you asked me for some charts for this sector of the market


Here are some preliminary results

http://recharts.blogspot.ca/2013/05/the-iceberg-called-iceboat-some.html

and interesting facts about the buildings at 151 Iceboat terrace

here is what was sold in the last two months. I obliterated the exact condo #
As you can see lots of days on the market, lots of inventory and very few sales, all of them at loss

Address	SoldPrice	CurentAskingPrice	InitialAskingPrice	PercentofCurentAsking	DaysOnMarket	SoldDate	
151 Dan Leckie Way 81x	304900	299900	319000	102	43	22/04/2013	-14100
15 Iceboat Terr 31xx	380000	399000	419000	95	96	25/04/2013	-39000
15 Iceboat Terr 29xx	277000	289900	299900	96	41	29/04/2013	-22900
151 Dan Leckie Way 52x	293800	299900	299900	98	26	30/04/2013	-6100
21 Iceboat Terr 82x	295000	304900	304900	97	42	07/05/2013	-9900
15 Iceboat Terr 93x	337000	344900	344900	98	23	14/05/2013	-7900
15 Iceboat Terr 53x	442500	454000	454000	97	43	15/05/2013	-11500

if you're going to show current asking and initial asking prices, you should also show the cumulative days on the market from initial asking price and not just from the current asking as it's common practice for realtors to delist and then relist properties with the price change as that will give a more accurate reflection of 'days on the market'.

 

[azureray]

Mr ReCharts I find you a good talent for DB Analysis. You probably are a DBA.

But please theres no need to attack another who has a different opinion.

Your data shows avrg 95% of asking price. These units in CityPlace are the most most typical investor flip condos, the ones built and bought by the HongKong Chinese. Of course you see a lot of speculations and investors have unrealistic market expectations, hence the initial high asking. There are also a lot more condo units built and being built in Cityplace. It's worthwhile to include the approx psft. Below or above asking does not mean a thing, coz people can ask as much as they want, the end game is psft.

I like you per building analysis. Maybe do a X condo, or Casa I, or College Park I, II, III as comparison?

Thanks.

I doubt that you bothered to read the information that I posted
I also doubt that, in case you read, you understood anything.
Your post is rather shallow and dismissive than intelligent and based on facts

 

[recharts]

if you're going to show current asking and initial asking prices, you should also show the cumulative days on the market from initial asking price and not just from the current asking as it's common practice for realtors to delist and then relist properties with the price change as that will give a more accurate reflection of 'days on the market'.

I just started watching this building as this will be fun to watch how it unfolds, so I have no historical data other than what I have collected so far (2 months at most)
As you can see the properties #2 and #3 on my list had been on the market for quite a while.
That is an immense waste of time for the real estate agents. Small commission compared with a house that sat on the market for same time.
It is becoming not profitable to sell condos if they sell like this. Of course some of the agents will be happy with at least a sale like this since the sales are depressed already...
I totally understand the position of the RE agent quoted (linked actually) on my site, in one of his articles he says: " Sellers cut your price!"

 

[recharts]

Mr ReCharts I find you a good talent for DB Analysis. You probably are a DBA.

But please theres no need to attack another who has a different opinion.

Your data shows avrg 95% of asking price. These units in CityPlace are the most most typical investor flip condos, the ones built and bought by the HongKong Chinese. Of course you see a lot of speculations and investors have unrealistic market expectations, hence the initial high asking. There are also a lot more condo units built and being built in Cityplace. It's worthwhile to include the approx psft. Below or above asking does not mean a thing, coz people can ask as much as they want, the end game is psft.

I like you per building analysis. Maybe do a X condo, or Casa I, or College Park I, II, III as comparison?

Thanks.

I can probably do it but I am not sure that I have the resources to do it
I will see how easy it is to do that. I will not go building by building but I will do it in an all in one.
You will probably have price per sqft, and unoccupied units (for sale or for lease) at each address.

There will be one important factor missing and that would be per building % of available units.
For that I need the available number of units in each building
I will probably delegate that work to whoever is interested. I will probably post on my site a request for my readers to send me the number of apartments in each building they are interested in. If the data is provided I will include that in my charts and calculate the percentage.

 

[azureray]

That sounds great.

I think the most objective method is to continuously track the avg. ppsf in each area, with the context of % of available units. One suggestion is to pull data from buzzbuzz home or RedPin, they should have a lot of building related data you will need, for example, total number of units. Another way to find out ppsf is by tracking the maintenance fee, if you can find one unit floorplan and its exact sqft in one building, you can then know the total sqft of any unit in the building through its maintenance fee (minus parking and locker).

Would love to see a per building ppsft trending, as well as a neighborhood aggregation.

Good work so far!

I can probably do it but I am not sure that I have the resources to do it
I will see how easy it is to do that. I will not go building by building but I will do it in an all in one.
You will probably have price per sqft, and unoccupied units (for sale or for lease) at each address.

There will be one important factor missing and that would be per building % of available units.
For that I need the available number of units in each building
I will probably delegate that work to whoever is interested. I will probably post on my site a request for my readers to send me the number of apartments in each building they are interested in. If the data is provided I will include that in my charts and calculate the percentage.

 

[recharts]

That sounds great.

I think the most objective method is to continuously track the avg. ppsf in each area, with the context of % of available units. One suggestion is to pull data from buzzbuzz home or RedPin, they should have a lot of building related data you will need, for example, total number of units. Another way to find out ppsf is by tracking the maintenance fee, if you can find one unit floorplan and its exact sqft in one building, you can then know the total sqft of any unit in the building through its maintenance fee (minus parking and locker).

Would love to see a per building ppsft trending, as well as a neighborhood aggregation.

Good work so far!

I think you missed the point. I have plenty of ideas, what I don't have is time
I have done the above just to prove that I am interested in discussions and in clarifying the truth based on numbers, detailed numbers not on high level TREB like numbers. Those are good for economists
Once I prove my point I will need very good reasons to put more time in this, which right now I don't see it happening for a very long time
I will probably bring the stats to a decent level and stop there without putting more time in this since I am not interested in the condo market beyond hte point where I know how bad it is falling and how much it will influence the SFD market and in general the RE market in Toronto.

 

[js97]

http://tinyurl.com/mesusfn

The Economist has updated its int'l home price comparisons. As it's the countries I have first-hand knowledge about, I narrowed to Britain, France, US, Canada. The last tab (percentage gains) is interesting -- while Canada is as out of whack as UK/France, the gains have been almost all in the last ten years (slide the bottom slider to Q3 2002 to see what I mean.)

The other real eye-opener is the own vs. rent in Canada -- renting is way, way cheaper on a nationwide scale. I'd say that's two good indicators that house prices are well overvalued in Canada. We'll look to rent for at least a year when we get home.

Very interesting numbers.

If you compare prices in real terms, we've only increased 100%, or doubled the cost of living since 1975. Considering most of our population is concentrated in cities (and we've mostly gained in density) I would say our housing 'buble' is actually 'healthier' than the I would have initially thought.

Also interesting to see that Australia, with somewhat similiar economies, immigration policies and land/use have a much more problematic bubble, but obviously still sustained by the Chinese Boom


I know I've said it, I think it's very difficult to account for the increased demand of the Y generation. Originally living under their parents roofs, they're all of a sudden requiring their own accomodations. It would be interesting to see a household count comparison, 75 to now. Where by the original household 1.0 of 4 or 5 members is now split into 1+1.5 (discounting by 0.5 to account for marriage to other household members so not to 'double count'). That would be a more insightful measurement to demand than just population growth. Also should not forget immigration growth.

 

[recharts]

I know I've said it, I think it's very difficult to account for the increased demand of the Y generation. Originally living under their parents roofs, they're all of a sudden requiring their own accomodations. It would be interesting to see a household count comparison, 75 to now. Where by the original household 1.0 of 4 or 5 members is now split into 1+1.5 (discounting by 0.5 to account for marriage to other household members so not to 'double count'). That would be a more insightful measurement to demand than just population growth. Also should not forget immigration growth.

by the way you sound you are clearly the victim of some brain washing going on in the media with generations xyzw and so on.
that is all marketing my friend.
Your so called y generation, as a matter of fact any of them, needs jobs and economic growth before it can afford the prices we have today.
with prices disconnected from rents and salaries nobody mentally healthy would venture to buy unless he or she has a hefty down payment and some savings. Otherwise paying more in rent while the house prices are going down (they will, you can deny it as much as you want) is better on the long term. That is the very problem these days, people are afraid to buy because they don't want to buy a depreciating asset.
By now most of us have looked at their salaries and at the house prices we have today and told themselves: "this is not doable anymore" hence the decreased sales without any economic problem.
If the money was there you should have seen still intense activity on the market..well as most of us know this is not happening. If the stats would not be manipulated that much and the average number trusted that much it would be clear that the market is turning for worse.

PS: I have said these before, the immigrants are not stupid, if they were that rich in their countries to afford the prices we have here believe me that they will not come here. The prices are a lot lower intheir countries and I doubt that they will qualify under the present rules for any mortgage. When you land here you first have to absorb the shock, the perception of the prices we have here might be different for many categories of goods, startig from food and ending with houses.
So ..whoever counts on immigrants to keep the RE market going is out of his mind and has no idea what makes someone to immigrate here.
Of course there is some money laundering from China to Canada but do not expect that to keep going on since Canada and China signed some agreements on this.

Al in all I sense some bias in what you wrote above. Strong bias. However expect my stats, they will prove where we are going with this.

 

[js97]

by the way you sound you are clearly the victim of some brain washing going on in the media with generations xyzw and so on.
that is all marketing my friend.
Your so called y generation, as a matter of fact any of them, needs jobs and economic growth before it can afford the prices we have today.
with prices disconnected from rents and salaries nobody mentally healthy would venture to buy unless he or she has a hefty down payment and some savings. Otherwise paying more in rent while the house prices are going down (they will, you can deny it as much as you want) is better on the long term. That is the very problem these days, people are afraid to buy because they don't want to buy a depreciating asset.
By now most of us have looked at their salaries and at the house prices we have today and told themselves: "this is not doable anymore" hence the decreased sales without any economic problem.
If the money was there you should have seen still intense activity on the market..well as most of us know this is not happening. If the stats would not be manipulated that much and the average number trusted that much it would be clear that the market is turning for worse.

PS: I have said these before, the immigrants are not stupid, if they were that rich in their countries to afford the prices we have here believe me that they will not come here. The prices are a lot lower intheir countries and I doubt that they will qualify under the present rules for any mortgage. When you land here you first have to absorb the shock, the perception of the prices we have here might be different for many categories of goods, startig from food and ending with houses.
So ..whoever counts on immigrants to keep the RE market going is out of his mind and has no idea what makes someone to immigrate here.
Of course there is some money laundering from China to Canada but do not expect that to keep going on since Canada and China signed some agreements on this.

Al in all I sense some bias in what you wrote above. Strong bias. However expect my stats, they will prove where we are going with this.

Well, my 'bias' is based on first hand experience, between the 20 friends I have. (yes a millidrop in the bucket) but most of them have grown-up in TO, have parent's that live in homes, but now, they have or are in the process of purchasing their own home (from a condo etc).

I myself am in that bucket.

If you want to base your bias on stats, what about the extremely high ownership rate? isn't that an indication that homes are still affordable?


And if you really want a more accurate measure of stats, you would post comparable sales prices from last year, not actual listing prices. Listing prices does not mean much.

Not biased, I just have my finger on the pulse. I would prefer the market tanked a bit, in my position, upgrading my home would be more affordable.

And yes, being in my early/mid thirties, the top end of the Y generation (which I'm) do have good incomes and a hefty, six figure down payment (from riding the market).

I also have friends that have had 6 figure wedding gifts (one with 500k inheritence from an uncle).

International money? Oil kings and Chinese businessman/bureaucrats need a place to 'park' their cash. This is the safest, most tangible asset (from their perception).

I think people that have grown-up in western democracies really take the importance of political and social stability for granted. The idea that the government can't take away except under very extenuating circumstances is so appealing that they are more than happy to do so, even at a premium. Although this segment of the market does not generally impact the average consumer, it's still one more contributing driver to this market.

 

[recharts]

Well, my 'bias' is based on first hand experience, between the 20 friends I have. (yes a millidrop in the bucket) but most of them have grown-up in TO, have parent's that live in homes, but now, they have or are in the process of purchasing their own home (from a condo etc).
I myself am in that bucket.

you mean you are in trouble

If you want to base your bias on stats, what about the extremely high ownership rate? isn't that an indication that homes are still affordable?

No,hat is cheap credit
The owner is the bank.
You are very immature in your opinions about the market.

And if you really want a more accurate measure of stats, you would post comparable sales prices from last year, not actual listing prices. Listing prices does not mean much.

How could I? I started compiling stats this year
However I can compare with the trend which is known.
Let's see what the end of this month brings us
If you want to ignore the fact that low prices follow low sales numbers then go ahead

Not biased, I just have my finger on the pulse. I would prefer the market tanked a bit, in my position, upgrading my home would be more affordable.

That is because, like most of you, you are trapped. You can not sell at a price that will allow you to upgrade easily
The two segments are now disconnected. The condos are not appreciating and not selling (to say at least) with next step price dropping while SFH are just tanking as we speak (in TO, out of 416 we may see price drops this year) with next step not selling and no price increasing

And yes, being in my early/mid thirties, the top end of the Y generation (which I'm) do have good incomes and a hefty, six figure down payment (from riding the market).

Form what ??? If you intend to live in a house you will never get your hands on that money unless you retire.
If your matchbox appreciates so it does the house you want to buy next so your income is null.
I guess you are going to experience a decrease in income soon. Actually, considering your plans if you still own a condo you are already being hit by the increasing difference between still appreciating SFH and your starting to depreciate condo.
However I like your wishful thinking

I also have friends that have had 6 figure wedding gifts (one with 500k inheritence from an uncle).

You are in good company. I hope they all invested in condos

International money? Oil kings and Chinese businessman/bureaucrats need a place to 'park' their cash. This is the safest, most tangible asset (from their perception).

Sure. Let me take a guess here. You are chinese and you share their views

I think people that have grown-up in western democracies really take the importance of political and social stability for granted. The idea that the government can't take away your home without some very extenuating circumstances is so appealing that they are more than happy to do so, even at a premium. Although this segment of the market does not generally impact the average consumer, it's still one more contributing driver in this market.

If they are stupid enough to put their money in Canadian condos sure let them do that.
So far we have seen the media trumpeting the foreign investment since March.
There were hopes that the Toronto and the Vancouver market will resume their ascension to higher prices and increased sales.
It did not happen. Can you explain why? You take your investors for stupids since yu can assume tthat they are not reading the market updates and they do not see signs of trouble in Canada
You have big economist around the world or canadian economists speaking about problems, you have hedge found betting against Canda yet you consider the foreign investors idiots who would buy here when the US RE market is going up like crazy these days.
I can understand why you don;t want to admit it but ...I can not help you