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Baby, we got a bubble!?

js97

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Bidding wars is just another high pressure tactic to make people pay more then they would normally want to, especially right now when demand still someone outstrips supply on a reasonably priced home.
 

Mindset

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I ask the same question mindset that I asked before then.

Family is going through a divorce...should that be on the listing. It affects urgency/interest of the buyer and seller for sure.
Some may know this so if I extrapolate, it should be put on the listing to level the playing field for all buyers. But is this fair to the sellers. It is fair to the neighbour who now as opposed to market is competing with a distressed sale?

I re iterate that a property that can be seen and viewed has a market value. Of course, knowing it is a foreclosure will lower that value. I can accept that. I just don't know that it is reasonable to put a headline to suggest it is distressed. Again, I reiiterate that I believe that the buyer must be made aware of this however, but I think it is unfair to limit the sellers options by advertising the foreclosure on the listing. Why should the seller's rights be ignored?

In fact, I would suggest that by forcing this to be placed on the listing, you are in fact limiting the market and inadvertently manipulating it to a lower price than may in fact be fair. By way of example, what if there is a foreclosure but an immaculate house on a great street. Why should it have any "prejudging" of the property?

Under a POS or foreclosure it is imperative to be disclosed as there is a good chance that the owners failed to maintain the property.

Under a divorce scenario this failure to maintain the property is signficantly less likely and therefore it is not needed to be disclosed.
 

interested

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Under a POS or foreclosure it is imperative to be disclosed as there is a good chance that the owners failed to maintain the property.

Under a divorce scenario this failure to maintain the property is signficantly less likely and therefore it is not needed to be disclosed.


I understand your logic mindset. But we would still agree that if I knew it was a divorce and you did not, I would have additional information allowing me perhaps to swoop in and make a low ball early bid which might be accepted which you would not have the information to be privy to to do the same. My point is the playing field should be level.

While I agree that before purchase the buyer must know that it is a POS and can then decide, I still feel the sellers right to get it out there to be viewed on its merits by the widest audience is also reasonable. It is a balance of buyers and sellers rights. That said, I am distinctly not saying that the buyer must not be made aware, he/she absolutely must. But I think it is unfair to stigmatize the property for the seller.

Anyhow, I think we are relatively close here, and can agree to disagree on the mechanics. On the main principle, however, we do agree that the buyer must be made aware and then can decide if he/she makes the offer or not, or at a reduced price.
 

James

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I have to disagree with disclosure of a divorce. Foreclosures are a different story because it is directly and legally related to a financial/ownership aspect of the property. A divorce, on the other hand, is no different than knowing that the seller just got a demotion at his/her company...or that the seller's Mom from another province is sick and he /she needs to move back home to take care of her...or that the seller just had a baby and needs to move into a bigger house...or that the seller just got relocated by his/her employer...etcetera etcetera...

As in all negotiations, the more information you have the better but I don't think it should be mandated that every piece of information be disclosed unless the same level of information is similarly disclosed from the buyer's side...None of which I am a fan of either.
 

interested

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^^^^
James, I put out the disclosure of divorce not because I think it should be disclosed. Please understand that I suggested it because if one truly has a level playing field, then everyone looking should have total disclosure and the same information. Clearly this is not the case but I was trying to make a point to have as level a playing field as possible.

I still feel that those who wish the listing to say foreclosure on the listing seek to buy at a distressed price. Recall, this not only affects the value of your property but also the neighbour's value. I think the information needs to be disclosed, but not on the listing. If you see a property, it may be in foreclosure but could be still pristine, not necessarily in disrepair. Please explain to me why that vendor should have to post on the listing it is a distress sale. I agree the buyers must be told before making an offer but why should the vendor have the stigma associated with the property when in fact it may be pristine and at least at that point the widest range of buyers have seen it. The buyer can certainly say before seeing the property to their agent that "I do not wish to see any foreclosures" and that should I feel reasonably balance the vendor's/buyer's interests.
 

klb86

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GTA REALTORS® Release Mid-Month Resale Housing Figures

March 18, 2013 -- Greater Toronto Area REALTORS® reported 3,594 transactions through the TorontoMLS systemduring the first 14 days of March 2013 – down 11.5 per cent compared to the same period last year. The number of new listings was up by less than two per cent.

“With sales down and listings up slightly, the GTA market was better supplied in the first half of March compared to last year. This fact notwithstanding, there has been enough competition between buyers to promote moderate to strong upward pressure on average selling prices for most home types on an annual basis,” said Toronto Real Estate Board President Ann Hannah.

“The average price for condominium apartments in the City of Toronto was up over last year. If this price growth continues, it may indicate that conditions are tightening slightly in this segment,” added Ms. Hannah.

The average selling price for the first two weeks of March was up by almost six per cent year-over-year to $532,102. Average prices were up for all major home type categories.

“Due to tight supply, the average annual rate of price growth for singles, semis and towns continues to far outpace the rate of inflation. The condo apartment segment has been a mitigating factor, which is why our forecast for price growth in 2013 remains at approximately 3.5 per cent or $515,000 for all home types combined,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.


City of Toronto prices up 5.7% y/y $586,655. Sales down 15% y/y

Condo prices in the City of Toronto up 1.9% y/y $368,715. Sales down 10.7%
 

NotKevinBacon

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I think we shouldn't be surprised by the continual decrease, with the explosive expansion of the market that started more than ten years ago, it's only logical that the market would "course-correct" itself by rapidly halting the boom.
Btw: my eyes are getting really tired (read: I am getting drowsy) if I'm reading too much statistics. :D So I am glad that some re agents think of me and provide this kind of straightforward infographics: http://ellidavis.com/toronto-real-estate-news/2013/03/gta-housing-market-february
 

interested

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^^^
The graphs are indeed easy to follow. The bottom line: Inventory up, sales down. At some point, the next logical step is price drops or at least stopping or rises. Sure 2011 was a record year but how long can we keep cheer leading and sugar coating the persistant drop in sales and putting spin on how it is "not a bad thing"?
One hopes for a stabilization and no jolt to the system.
 

Kenny

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^^^^
James, I put out the disclosure of divorce not because I think it should be disclosed. Please understand that I suggested it because if one truly has a level playing field, then everyone looking should have total disclosure and the same information. Clearly this is not the case but I was trying to make a point to have as level a playing field as possible.

I still feel that those who wish the listing to say foreclosure on the listing seek to buy at a distressed price. Recall, this not only affects the value of your property but also the neighbour's value. I think the information needs to be disclosed, but not on the listing. If you see a property, it may be in foreclosure but could be still pristine, not necessarily in disrepair. Please explain to me why that vendor should have to post on the listing it is a distress sale. I agree the buyers must be told before making an offer but why should the vendor have the stigma associated with the property when in fact it may be pristine and at least at that point the widest range of buyers have seen it. The buyer can certainly say before seeing the property to their agent that "I do not wish to see any foreclosures" and that should I feel reasonably balance the vendor's/buyer's interests.


Isn't this debate kinda moot? It's pretty easy to find out if the CMHC is the seller, isn't it?

http://calgaryrealestatereview.com/2013/02/27/is-cmhc-seeking-to-hide-foreclosures/
 

interested

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Kenny, yes to a degree.
However lots of buyers don't research. Also, if you are the seller and have a property not in disrepair, do you want it not shown to those who might dismiss it if not viewed but perhaps view it and realize that it is worth market even if "a foreclosure".
Anyhow, I kind of think James and I have exhausted the topic in any event.
 

marsh

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House Prices: Canada Saw 6th Straight Month Of Declines, Teranet Says
The Huffington Post Canada | Posted: 03/20/2013 12:42 pm EDT | Updated: 03/20/2013 2:09 pm EDT


The rule of thumb among economists is that a recession is defined as two consecutive quarters of negative economic growth.
If that standard applied to housing (and why shouldn’t it?), Canada’s housing market would now be in a recession.
According to the latest data from the Teranet-National Bank house price index, Canada experienced its sixth consecutive month of house price declines in February, with prices falling 0.2 per cent from January.
They’re still higher, though, than they were at the same time last year — by 2.7 per cent, on average.
But with prices declining since last summer, those year-on-year “increases” will probably disappear from the stats soon. Will Dunning, the chief economist for the Canadian Association of Accredited Mortgage Professionals, predicts house prices will start showing annual declines around June of this year.
Like many in the real estate and mortgage brokerage businesses, Dunning lays the blame for the slowdown on Finance Minister Jim Flaherty’s tightening of mortgage rules last summer.
But many critics dismiss this notion, pointing out that Flaherty tightened mortgage rules three times prior to last year’s rule changes, and those policies resulted in only slight blips in the housing numbers.
Some analysts point out certain markets began to slow even before the new rules came into place. They say record high prices and record household debt loads have as much to do with the slowdown as mortgage rule changes.
Flaherty and Bank of Canada Governor Mark Carney have both repeatedly warned that excessive debt taken on by Canadians to pay for record house prices pose a serious risk to the economy.
Here’s Teranet’s summary of the February housing numbers:
The February composite index was down 0.2% from January, a sixth straight monthly decline. Prices were down from the month before in seven of the 11 markets. For Hamilton (−0.3%) it was the second consecutive monthly decline, for Calgary (−1.2%) it was the third, for Edmonton (−0.4%) the fourth, for Toronto (−0.3%) the fifth and for Montreal (−0.4%) the sixth. The other two markets in which prices were down from the month before were Victoria (−1.4%) and Ottawa-Gatineau (−0.8%). Prices were up 0.7% on the month in Vancouver, only the second monthly gain in eight months, and 0.8% in Winnipeg, a first in five months. Prices rose 0.9% in Quebec City, to reach a new all-time high for the second month in a row, and 0.1% in Halifax, to match last September’s all-time high.
 

ponyboy

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interesting. The household savings rate is consistently highest among countries with the lowest rates of homeownership. The total monthly payments to cover all homeowner expenses, especially for recent purchasers, is bringing average households right up to their limit. Perhaps taking consumers right up to their limit is one of the equilibriums of debt-financed capitalism. Sure people have choices, but do most realize the alternatives. Wouldn't it be prudent in the long-term for government to create incentives for people to invest their money in productivity-enhancing resources (education, businesses, etc) and disincentives for the rise in house prices beyond the rate of inflation.
 

bleu

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this post started in 2009 by someone who can't afford buying a house and expects "big correction" so that they can buy something cheap.
3.5 years passed, did the bubble burst, and did a 4 bedroom house in Riverdale go for $350k now? It is probably 30% more.

I hope this thread will stick around for at least another five years, and it will be interesting to see how people's hope for discounted housing price burst badly, instead of the "massive housing bubble".

Toronto's housing price increase is softening, which actually prevented it from dropping. By this time 2014, the only that can happen is even high housing prices and a $650k house will be sold for $680k. Sure, keep waiting and keep looking for stats that indicates the downturn is approaching. I am sure one can always find what he wishes to find.

Let me say this: Toronto is becoming a different city in the past few years. The good times where a family of 4 with medium income can afford a spacious single family house not far from the core is GONE forever. It will NOT return. You won't be able to afford such a nice house in a good neighhourhood unless you are one of the top 2%, or you are lucky enough to inherit one. Otherwise, better accept the fact that the best you can do is a two bedroom condo or your dream house 20km away from where you want it to be.
 

daveto

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this post started in 2009 by someone who can't afford buying a house and expects "big correction" so that they can buy something cheap.

Actually, not. See post #1 from the OP below (from a downtown homeowner).

I've been gung ho on the housing and especially the condo market in Toronto for about the last 6 years, but in the past few months I've seen some alarming trends that seriously suggest a massive bubble is being created that'll explode as soon as interest rates increase and/or the supply of condos goes through the roof in the next 17 months. The article below deals with some of the problem, but the 8% increase in home debt during a recession is also worrisome. What's your take?

But best to never let facts or intelligent discourse get in the way of your opinion. Carry on
 

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