News   Mar 28, 2024
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Baby, we got a bubble!?

- $400K will buy you a home un the burbs, but I'm not so sure about a "very nice area".
- You can still buy houses in Parkdale, Junction, Danforth East, Riverside/Leslieville, and Corktown for less than $400K.
Are Riverside and Riverdale contiguous?

I was a little surprised by this article:

Areas like the Beach and Riverdale to the east are seeing record prices. The most expensive sale in the Beach this year was for $3.15 million. In Riverdale, the priciest listing is a historic home on a 33 feet by 360 feet lot for $3.89 million.
11880 is a huge lot, but $3.9 million in Riverdale? Really?

I wonder where it is. I'd like to see what it looks like.
 
^ ^ ^
maybe the lot is severable so it was sold for mostly land value ?

is riverdale area considered south of danforth?
bc i know there are several million dollar properties just north of danforth in playter estates.
 
Riverdale is South of Danforth, North of Gerrard, East of DVP and West of Pape.
Riverside is South of Gerrard to Eastern, East of DVP and depending on who you talk to, West of Logan/Pape/Carlaw but it kind morphs into Leslieville.
 
Most people just take what the media is spoon fed by the real estate and development industry at face value.

I agree 100% on this point.

I personally disregard any “opinion†the media publish. Journalists are generally paid to “reportâ€, not analyse fact and make accurate predictions. Furthermore, realtors are paid to “facilitateâ€, not investigate.

I’m a contrarian at heart and initially doubt most mainstream advice (particularly from bias sources!). I firmly believe independent thought and research to be the best tools used for growing ones wealth and protecting it. Maybe it’s just me, but I don’t trust anyone managing my money who profit from it.
 
I agree 100% on this point.

I personally disregard any “opinion†the media publish. Journalists are generally paid to “reportâ€, not analyse fact and make accurate predictions. Furthermore, realtors are paid to “facilitateâ€, not investigate.

I’m a contrarian at heart and initially doubt most mainstream advice (particularly from bias sources!). I firmly believe independent thought and research to be the best tools used for growing ones wealth and protecting it. Maybe it’s just me, but I don’t trust anyone managing my money who profit from it.

Ditto.
 
Well there's definitely a bubble in that valuations are far above long-term norms with respect to income. However, that doesn't mean the bubble will burst anytime soon, since valuations of different asset classes can, in fact, remain above historical norms. Also, look at house prices in Vancouver, who's to say we won't catch up with them? I don't think it is likely, but if interest rates stay low and the economy actually starts to recover (real recovery, not this stimulus-fueled non-sense), we could see housing prices rise for the foreseeable future.

"The market can remain irrational longer than you can remain solvent."
 
i'm with you guys ... i was originally of the mindframe that prices would stagnate and possibly decline by summer 2010 since BOC may slowly increase rates by then, since local incomes and rents don't support the prices.

but i think today's win for the Panam 2015 games just kept the air in the bubble ... not sure about further inflation but at least maintains a floor until 2015.
 
I think the Pan Am games, because they're so spread out will only help three areas: West Don Lands (River City) the Distillery District (proximity to the Athletes village and a guarantee that the streetcar line will be completed early), and Liberty Village (proximity to Exhibition Place and events at the Stadium in LV). It might help those along Fort York/Fleet/Lakeshore, but I doubt it. The Pan Am are substantially smaller than the Olympics and the tourist draw is minimal, as is the local. I'm from Winnipeg, and it did very little there except build quality sports buildings and a minor blip in tourism. That being said, it might help immigration to Toronto from the Southern Americas that is already steadily rising. All in all I think this bubble will still begin to pop within the next year.
 
Sorry, I have to disagree. The Pan Am games will have absolutely no effect on house prices. Even the summer olympics, the biggest sporting event around, has little-to-no effect on house prices. After all, we're talking about an event that lasts two weeks max. It comes, goes, then is quickly forgotten.
 
Sorry, I have to disagree. The Pan Am games will have absolutely no effect on house prices. Even the summer olympics, the biggest sporting event around, has little-to-no effect on house prices. After all, we're talking about an event that lasts two weeks max. It comes, goes, then is quickly forgotten.

While you are right the actual olympics or pan am games have no actual affect on house prices....these games have a huge effect on peoples perception of our city by the way our city presents itself to the world. Therefore a by-product of these types of events can and will have an affect on whether or not someone may or may not decide to invest in real estate in the host city.
 
Actually, I thought CDR was being sarcastic. I guess we read things as we want them to read.
 
Actually, I thought CDR was being sarcastic. I guess we read things as we want them to read.
Having a second read I think you're right. I guess I had my sarcasm radar off. :eek:

I think I've met too many people who, in all seriousness, think the winter Olympics will cause Vancouver house prices to rise and peak when the games are on.
 
Below is what one of posters at Garth Turner's blog said

WHY THE HOUSING BUBBLE IS ABOUT TO BURST… AGAIN

#1 Rising interest rates. The current low rates are the product of monetary policy which will eventually cave, as it always does, to the free market forces. Long term rates are a product of that free market… the bond market. As bond rates increase they will put pressure on governments to raise the BOC rate. NOTHING impacts real estate values like interest rates.

#2 A rising Canadian Dollar. This is a function of a falling US dollar. Unfortunately, as proud as we might be of our dollars newfound strength, our manufacturers loose as their products become unaffordable in their number one market… the US of A.

#3 Continued unemployment stresses. Rising interest rates are not going to stimulate employment. Rising interest rates are an economic damper not stimulant.

#4 Inflation in everything we NEED and deflation in everything we WANT. Food is going up in cost, fuel is going up in cost. The cost of that which we NEED is rising at such an alarming rate it is denying many of the opportunity to buy what they want. Consequently the cost of that which we WANT is falling due to the lack of demand. Most houses built in the past 10 years are not of what we NEED but what we WANT. McMansions are dropping in value and modest post war homes will hold, relatively, in value.

#5 Rising Taxes. If you are lucky enough to be gainfully employed your happiness will be dampened by the mountain of debt governments seek to repay and you’re forced participation through increased taxes in the retirement of that debt. The HST is but one small current example of this. Yes it will impact the cost of housing on all fronts, from the taxing of strata fees to the taxing of the labour in building that home which was not before taxable. Net effect, the core cost of housing MUST fall to compensate and bring back to market equilibrium the price increased due to tax. Net effect higher taxes and less margin in new construction. Not good.

#6 Mortgage defaults. Employment has been reported to have increased this past such that unemployment is reported to be 8.4%… reported. Even if this were true there are many who are on the verge of foreclosure for whom it is too late. There is gluttony of homes working their way into the foreclosure marketplace.

#7 Historical price trends. When housing prices break from the historical price trend to such a degree as they have it is a pretty clear indication something is going to give. Even if the economy warrants it there is a consumer aversion to such rampant price increases in such essentials as housing. If we earn more we want to feel like we are getting ahead not just treading water. The discord in current market values against the historical price trend is greater than 25%. A discord of 5 to 10% is manageable, but anything over 20% puts undue financial and emotional pressure on median families such that they begin to rebel through withdraw from the market reducing demand. This is beginning to happen and prices will fall as demand falls.

#8. Political Change. Jack Layton, believe it or not, might stand a very good chance of forming the next federal government – NDP. As Boomers begin to retire they are not so interested in business as they are their personal well being. Mr, Layton has proposed such things as “insured retirement plansâ€. The NDP is the workers party, the party of the common man and the unemployed. People vote where their pocketbook is and if the NDP is looking after the pocketbook of the unemployed, which retirees are, they will vote for NDP. At the very least those parties to the right of the NDP will have to take note of this demographic change and adjust to it by definition becoming more…. Socialist if not Fascist. This can not be good for condo flippers.

#9 Demographics. As stated in #8 Boomers are going to have significant impact on the direction the economy takes over the next few years just as they have for the last 40. These people are not spending like they used to. They are no longer priming the pumps of the economy. In fact they are beginning to siphon the economic flow backward. Take those dollars out of the economy and their multiplying effect and you have a failing economy. Failing economies do not sustain real estate bubbles.

#10 The myth of inherited wealth. The children of Boomers do not stand to inherit as much wealth as you are led to believe. And of that wealth that stands to be inherited the vast majority (the 80/20 rule) is held in the pockets of a significant few. Those who believe this easy money inherited wealth will flow freely into the economy with the passing of the Boomers are in for a sad surprise. It just ain’t gonna happen like you are told if will unfold.

I invite anyone to give good logical argument against these just 10 of the many reasons the housing bubble is about to burst.

Don’t be alarmed it won’t be a real bad POP… well hopefully… and provided it doesn’t continue to inflate much more before it does pop. We should anticipate a 15% correction in housing values across the nation with quite easily double that (30% or more) in those higher inflated select areas and pockets of bedlam in the market… Condos in Kelowna… Dilapidated shacks in Hankouver and TO. Still… it won’t be pretty for anyone.
 
Below is what one of posters at Garth Turner's blog said

WHY THE HOUSING BUBBLE IS ABOUT TO BURST… AGAIN

I don't see a single consideration for timeline. Is this going to happen in 6 months or 6 years? Timing makes a huge difference.
 

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