April 19, 2017

It’s Almost Like Buyers Are Playing With Monopoly Money

An update on Canada and Australia: CBC News. “If real estate is a lottery draw, Toronto-area homeowner Marni Blouin won the jackpot. Blouin and her husband purchased their modest detached home in Scarborough, Ont., 12 years ago for $238,000. In early April, they listed it for sale at $629,000, after hearing about the scorching-hot market that has boosted Toronto home prices by nearly 30 per cent annually. ‘When it was actually getting ready to be listed at the beginning of April, I couldn’t even watch the news because the hype was crazy,’ said Blouin.”

“They received an offer for $850,000 the very same day the listing was posted on MLS, and soon sold the home for $875,000. Blouin said she and her husband were shocked, but also thrilled. ‘It felt really good,’ she said. ‘We knew we would get good money, but we didn’t think it would yield that much at this point. As much as I like the money, I’m kind of sad for the people that are looking for a house, really.’”

From Quinte News. “A Belleville real estate official says the housing market in Belleville and Trenton has ‘gone into a frenzy.’ Manager of Royal LePage ProAlliance Realty, Jeff Nelles, was commenting on the latest housing sales statistics for the first quarter of 2017, released by Royal LePage. He says inventory and new build construction cannot keep up with the demand from home buyers leaving Toronto. Nelles says ‘it’s almost like buyers from the GTA are playing with monopoly money.’”

The Business News Network. “Amid growing fears of a housing bubble in Canada’s largest city, Ontario Finance Minister Charles Sousa is reportedly close to unveiling new measures to improve housing affordability. But one Bay Street money manager is skeptical about how much Queen’s Park will be able to cool the market in Toronto. ‘Mark my words - government will not fix this issue,’ said Kash Pashootan, senior vice president and portfolio manager at First Avenue Advisory, Raymond James, in an interview with BNN. ‘Unless you’re going to build land that doesn’t exist, you’re not going to fix the supply issue,’ he said.”

The Financial Post. “‘Almost the entire province of Ontario’s housing market is now on fire, while most of the rest of the country wonders what all the fuss is about,’ said Doug Porter, Bank of Montreal’s chief economist. The economist said ‘many talk about the lack of supply and land constraints driving prices,’ but noted March prices rose 21.5 per cent year over year in London and 21 per cent in Windsor. ‘There are lots of open spaces around London, for example,’ said Porter.”

The Courier Mail in Australia. “A house around the corner from me sold at auction a couple of weeks ago. It’s a modern place: brick, two-storey, built just a few years ago on a 450sq m plot, not much to look at from the outside. Faces a tiny park, so it’s in a nice spot. The price? Over $4 million. But don’t worry, there’s no housing bubble. On average, a house bought just eight years ago for $500,000 in suburban Melbourne is now worth $950,000. Again, no bubble.”

“Take this on the authority of the Federal Government. Deputy Prime Minister Barnaby Joyce insists the only thing stopping prospective homebuyers from purchasing a house to live in is their squeamishness or snobbery about moving to the country.”

The Sydney Morning Herald. “Intense media focus on housing affordability has primarily focused on the story of the individual; the young person who can’t afford a house. But in all of our focus on the individual, we are failing to recognise the greater problem – that when house prices do fall, and they will, they risk taking our banking system and the wider economy with them. We need to induce a ’soft decline’ before it is too late.”

“Our national addiction to cheap mortgage credit has placed our economy in a precarious position. We need to stem the flow of credit now, to prevent the violent bursting of a housing bubble which is otherwise inevitable.”

From The New Daily. “Day after day we are seeing more signs that the housing-credit bubble is coming to an end, but also that low-income Australians are set to be hit hardest when it does. The latest report, from global accounting giant KPMG, shows that the poorest 20 per cent of Australian households have started leaping into negatively geared property investments ‘despite their inability to manage the financial risks.’ The report backs the long-held views of some economists and commentators, including this one, that Australia’s mania for property speculation will end in tears.”

“It notes: ‘…there is a fixation in Australia about growing wealth through investing in property. This attitude is reinforced in television shows we watch and the newspaper and magazine articles we read. It should not be surprising that the poorest in our society, who are exposed to these messages and who see others growing their wealth through investing in negatively geared property, also want to participate in this investment activity.’”

“Major media owners, whose very existence relies on advertising from the banking and real estate sectors, have promoted the property wealth machine so effectively, and it has grown so big, that it’s now on the verge of collapse.”

From Domain News. “Brisbane house prices have fallen this year, recording the largest quarterly drop since September 2011. SPACE Property West End principal Angus Commins said the past few weeks have been tough for sellers in the inner city suburb. Mr Commins said anecdotally, the market had been weaker than usual. ‘We got to a point to where we were pushing a million for that product and now that’s come down to about $850,000, $900,000,’ he said.”

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Comment by Ben Jones
2017-04-19 15:18:26

‘I’m kind of sad for the people that are looking for a house, really’

But you took them for all you could didn’t you Marni? BTW, check out her shack. The porch looks like she built it herself and who ever put that rain gutter on should be deported.

Like I said the other day, this big OS moment they are having in these two countries is something I have never seen exactly.

Comment by 2banana
2017-04-19 17:27:49

I thought the rain gutter was some kind of modern art sculpture…

Comment by oxide
2017-04-19 17:47:15

should be deported

Speaking of which… this was linked from the article:

Ontario to query citizenship, residency for real estate purchases starting Monday


And yeah, why is that rain spout directing water INTO the foundation? you’re better off without gutters at all.

Comment by Senior Housing Analyst
2017-04-19 15:20:03

Estero, FL Housing Prices Crater 6% YoY


Comment by Ben Jones
2017-04-19 15:33:19

‘Unless you’re going to build land that doesn’t exist, you’re not going to fix the supply issue’

Go ahead, build. It’s gonna crash and where will you be? From the former hottest market in Canada:

‘It could be a long haul for developers in Calgary who are trying to get their stalled office developments back on track, with six sites on the city’s official list and more expected to be added soon.’

‘The city is expected to officially add another project to its suspended projects list soon: Arlington Street Investment’s Britannia Block LP/The Windsor, at the corner of Elbow Drive and 50th Avenue S.W. A banner hanging the site reveals few details about the project other than the phrase “#NotAnEmptyPit.”

‘Others say the real concern right now isn’t the number of stalled or abandoned projects — but the soaring vacancy rate among existing buildings in the city’s commercial core. Commercial real estate firm Cresa, which only represents commercial tenants, pegs the current office vacancy rate at 24.5 per cent — and climbing.’

‘Adam Hayes, a broker with Cresa, says he’s not surprised to see the number of stalled construction projects, given high vacancy rates and falling rent and lease costs. He says it could be a while before those projects or new ones get off the ground. “It could be years and years and years before we see tenants able to justify costs associated with new development.”

Comment by 2banana
2017-04-19 17:16:58

Speaking of Canada - what is the latest on Vancouver?

Last reports were that inventory was exploding and sales had come to a standstill…

Comment by Ben Jones
2017-04-19 18:27:24

‘Just when prospective homebuyers thought they might find some relief in Metro Vancouver’s real estate market, a new report suggests that while the foreign home buyer tax may have cooled the housing market temporarily, people are now starting to rush back in.’

‘Royal LePage CEO Phil Soper says sales plunged and price increases slowed in a housing correction that began seven months ago — around the time B.C. introduced a 15 per cent tax on foreign buyers.’

“Vancouver house prices are up compared to the first quarter of 2016, yet this doesn’t tell the complete story,” Soper said. “For weeks now, we have witnessed a steady fall in real estate values in the Lower Mainland, with sales activity down some 40 per cent compared to recent norms.”

‘But he said in the past month, sales in the Vancouver area have jumped by close to 50 per cent on a month-over-month basis — better than the seasonal average. “Someone [cried] ‘wolf’ and there really [aren’t] that many Chinese buyers here after all,” Soper said. “It’s about five per cent of the overall market so now they are going to rush back in.”

‘Local Royal LePage realtor Adil Dinani said he is seeing signs of a market rebound. “In the city of Vancouver, four to five out of 10 properties that I have been involved with on the listing side have gone into a multiple-offer situation, so we are seeing that become commonplace again.”

Comment by 2banana
2017-04-19 19:07:36

Bubble on Garth…

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Comment by oxide
2017-04-20 06:30:31

But those Chinese 5% were enough to drive the comps up to the sky.

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Comment by Rental Watch
2017-04-19 17:45:50

Building condos effectively creates land all the time.

Comment by junior_kai
2017-04-19 15:43:58

Poor, poor renter here. Just traded some surinam cherries I picked a day ago while mountain biking with a friend for some barbados cherries he got off a tree in his backyard. His house is right across the street from the beach, no houses on the beach side, 2bedroom and he pays 1800/mo. I rent a two bedroom house, nice quiet area, no ocean view but a 5 minute bike ride away and lots of surinam cherries and other fruit to sustain me along the way for 1K/mo.

I thought as I was munching on cherries this is what winning tastes like. Buy up ‘murica, buy into this bubble til it hurts!

Comment by Ben Jones
2017-04-19 16:25:11

‘Incredibly loud sex interrupts Florida tennis match’

“Well, that is the most bizarre situation,” announcer Mike Cation said on the broadcast. “I don’t know how to put this, folks, but somebody’s phone is going off in the stands … and it was an adult video.”

‘Cation later confirmed porn wasn’t the culprit. “Nope, that’s not a phone. That is … that’s an apartment across the lake,” he said.’

There’s a video at the link.

Comment by 2banana
2017-04-19 17:19:09

I am always amazing how well sound travels across the water.

I was walking on one side of a wide canal just a few days ago. The couple walking on the other side having a quiet conversation that was so loud I thought they were just behind me…

Comment by Senior Housing Analyst
Comment by 2banana
2017-04-19 17:15:19

‘it’s almost like buyers from the GTA are playing with monopoly money.’”


Q: What is the difference between monopoly money (which is finite amount with the game purchase) and an infinite amount of fiat currency that can be printed out of thin air and has nothing backing it up?

A: Goons with guns.

Comment by Blue Skye
2017-04-20 05:47:50

If you lose at Monopoly, you don’t have to pack your boxes.

Comment by IPFreely
2017-04-20 08:52:51

Actually the instructions for monopoly clearly state that if the bank runs out of money you should look around for some scrap paper to make more so the game can continue. The only difference is that people still think the current game we’re playing is real. Perhaps some day we will evolve.

Comment by Ol'Bubba
2017-04-19 17:18:08

Windsor is right across the river from Detroit and supposedly it’s a gritty industrial city.

Hard to believe a place like that is bubblicious.

Comment by 2banana
2017-04-19 17:21:40

And what is so magically about that international border?

Insane public union goons and long term democrat control stops at the border.

Comment by MightyMike
2017-04-19 17:34:02

The left parties are more lefty in Canada. The unions are probably at least bit stronger. Those are both good for ordinary Canadians, not as great for the business agenda.

Comment by 2banana
2017-04-19 17:46:22

Canada is not as lefty as you think.

Very tough immigration policies (despite the constant false MSM meme).
You need a government ID to vote. Period. And no one calls them racists.
You are not getting a job in Canada if there is a Canadian who can do the work.

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Comment by scdave
2017-04-19 17:34:49

insane public union goons and long term democrat control stops at the border ??

What about insane republican military goons and long term republican control ?

Comment by 2banana
2017-04-19 17:39:30

What about insane republican military goons and long term republican control ?


Well, I guess you would have a point except when you look at the cities of Chicago, Detroit, Baltimore, Philadelphia, Camden, Newark, Buffalo, Cleveland, Harrisburg, Scranton, etc…

They all have two things in common for their misery and financial ruin.

Insane public unions and long term democrat control.

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Comment by phony scandals
2017-04-19 20:44:26

cept 4


Comment by phony scandals
2017-04-19 20:40:59

“Insane public union goons and long term democrat control stops at the border.”



Comment by Taxpayers
2017-04-20 05:29:45

Candah is way left
The pm is hilarious.

Comment by snake charmer
2017-04-19 19:07:01

Windsor was the hometown of NHL enforcer Bob Probert, one of the toughest hockey players ever. Don’t know whether this still is the case, but at one time it also was known for its adult establishments.

Comment by Blue Skye
2017-04-20 08:37:30

Windsor, where Canada is south of the border. Half the population of Canada is jammed into the narrow strip of land along the border between Windsor and Montreal. There is a housing bubble in all of it.

Even Barrie Ontario is in a bubble. Really, it’s just a small town on the way to fishing camp.

Comment by 2banana
2017-04-19 17:25:50

It’s all rigged.

Best not to play the game.


What, Bid-Rigging at Foreclosure-Crisis Auctions?
Wolf Richter • Apr 19, 2017

This one is still happening in the Bay Area of California where home prices have shot through the roof since the Foreclosure Crisis. The folks who could buy homes cheaply at auction during the Foreclosure Crisis have made a killing. And buying them cheaply was apparently very important for some folks…

Yesterday, after a week-long trial, a federal jury in Oakland, California, convicted real estate investor Glenn Guillory for “his role in a conspiracy to rig bids at public foreclosure auctions held in Contra Costa County,” according to the California Department of Justice.

The jury convicted Guillory, who worked out of an office in Walnut Creek, of “conspiring to rig bids” at auctions were banks sold foreclosed homes. The conspiracy began as early as June 2008 and lasted until about January 2011. Guillory was charged in an indictment returned by a federal grand jury in December, 2014.

The evidence at trial showed that Guillory and his co-conspirators agreed not to compete for real estate sold at foreclosure auctions in Contra Costa County. The conspirators negotiated payoffs for agreeing not to compete and held second, private auctions known as “rounds” to determine the amounts of the payoffs for the individuals who had participated in the bid suppression.

And there have been some successes: by now, 65 people in the Bay Area have either pleaded guilty to bid-rigging at public foreclosure auctions or have been convicted after trial.

And it’s not over: according to the California Department of Justice, “Indictments are pending against several other real estate investors who participated in the conspiracy.”

Foreclosure auctions became a huge business. Wall Street’s biggest private equity firms, along with smaller specialized firms and other investors purchased their housing stock at these auctions in the booming buy-to-rent scheme. For example, Invitation Homes, founded for that purpose by private-equity firm Blackstone, acquired over 48,000 single-family homes in just 12 urban areas, funded with nearly unlimited financial resources, including government guarantees on some of its debt and its IPO this January. Because, when it comes to money, no crisis can be let go to waste.

Comment by rms
2017-04-20 07:34:18

“The evidence at trial showed that Guillory and his co-conspirators agreed not to compete for real estate sold at foreclosure auctions in Contra Costa County. The conspirators negotiated payoffs for agreeing not to compete and held second, private auctions known as “rounds” to determine the amounts of the payoffs for the individuals who had participated in the bid suppression.”

This reminds me of philosophy, e.g., the tragedy of the commons. Eventually someone surfaces who wants more than their agreed share.

Comment by 2banana
2017-04-20 07:42:05

It’s a small club and you ain’t in it.

Comment by Aqius
2017-04-20 09:17:39

best club is the one attached to my steering wheel

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Comment by oxide
2017-04-20 10:50:04

Philosophy? Sounds like a straight-up turf war to me. Did they hang their Farragamos from the power lines too?

Comment by Rental Watch
2017-04-20 08:56:45

I recall hearing second hand at the time of a group of guys in auctions in CA where there was an unspoken pecking order. If Mr. Big (the guy with the most money and experience) was bidding, you didn’t. If you did…in other words a newbie not in on the action, the consortium would effectively bid the profit away from you and drive you to pay toward the top of your range.

If you played nice, you would get your turn.

This was before the large entities entered. Not sure if the same game works when you have 25-year-old’s with suitcases full of Wall Street’s cash involved. I think they become Mr. Big.

Comment by Senior Housing Analyst
2017-04-19 18:44:35

Lanai City, Hawaii Housing Prices Crater 16% YoY


Comment by phony scandals
2017-04-19 21:05:24

Now this really happened and nobody had to read a card.


Comment by Jingle Male
2017-04-19 23:05:24

“Major media owners, whose very existence relies on advertising….”

I tried to get the Sacramento Bee newspaper to report on all the mortgage fraud in 2006 & 2007. They turned a deaf ear and a blind eye. It dawned on me why after looking at the huge home builder advertising inserts in the Sunday paper!

Comment by oxide
2017-04-20 04:50:00

Meanwhile, PBS just finished their month-long begathon in March, with the usual threat of “we need YOUR SUPPORT to keep us on the air.” BS. They could support themselves if they allowed a few high-quality commercial breaks. Between their begathons and packing propaganda in between shows, they already have as much commercial time as the networks. And British shows like “Call the Midwife” are much cheaper to produce than, say, the NFL.

Comment by taxpayer
2017-04-20 07:34:40

replace the begging w just one more add. They have special holier than thou ads now.

Carls jr and Victorias secret

Comment by Aqius
2017-04-20 07:41:39

are you kidding me !? PBS has PLENTY of commercials.
“we get support from” is a commercial.

here in Sacramento it’s practically after every news story. the same if not worse than regular radio.

I had to stop listening during the run-up & after the election as they lost their collective minds over Donald Trimp as literally every news item, story, reference, etc was bashing him.

the 2-minute hate just never ends on PBS.

Comment by 2banana
2017-04-20 08:20:51

PBS is taxpayer supported ultra left propaganda.

The sooner Trump cuts their budget to zero, the better.

But……Big Bird!

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Comment by Rental Watch
2017-04-20 08:58:19

HBO bought Big Bird.

But…Charlie Rose!

Comment by Aqius
2017-04-20 08:59:40

the PBS radio voices cover a narrrow topic/range.

just to continue a bit off the housing topic:

carl castle: wait wait don’t tell me.

click n clack bros

Ira: science friday (sounds like raymond)

let’s do the numbers

but when i hear donna abadone’s voice i cringe as i know the tin cup is coming out after a quick meaningless lead-in w/her deep serious sorrowful voice.

like mike teselle on ch3 broadcast news.
nicknamed him “mournful mike” years ago due to his overly sonorous delivery on every effing news piece, complete with dramatic pausing approaching the end.

from blue cany on.

(ok, now back to the usual bicker battles.
here, let me prime the pump:)


Comment by oxide
2017-04-20 10:58:52

Hi Aquis,

At least where I am, they only play their commercials before and after their actual programming. They introduce the program, play commercials for 2 minutes, show the program, play commercials for 10 minutes, introduce the next show, etc. So they can still brag — barely — that they don’t have commercial “interrruption.” :roll: I’d rather have real commercial breaks. Then they could support themselves and not have to beg during those unendurable “My Music” concerts and repeats of a two-year-old Suze Orman program, for a month straight. I never understood how such shows drove people to give. They always drove me away.

Taxpayer is right. We need more undie ads to bring in the eyeballs.

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Comment by Race Bannon
2017-04-20 12:55:46

Hey Donk.

Comment by Aqius
2017-04-20 12:57:27


I agree with everything you just said about PBS.

Comment by palmetto
2017-04-20 05:35:19

Rockridge dump receives 19 offers, sells for quarter-million over asking. The one-bedroom, two-bath bungalow built in 1905 went on the market in March for $495,000 and sold last week at $755,000.


There’s pictures at the link. Rockridge is in Oakland, BTW.

You can purchase something similar (or better) for WAY less in Roanoke, VA. Most of these need a little rehab, but not much more than the Rockridge property.


Comment by Mr. Banker
2017-04-20 05:36:37

Bahahahahahahahaha …

Sixty-five percent of Americans are losing sleep over money problems. Perhaps these sleepy (and extremely stupid) people should stop willingly sending to smart people such as myself large chunks of their money (worry over credit card debt supplies 22% of these tired and stupid people’s worries).

Dumb ‘em down and prosper. They work, I reap. Life is good.

A nation of dummys. It doesn’t have to be this way for these stupid people but, hey, they are the ones who make stupid choices.


Comment by 2banana
2017-04-20 07:05:12

Mr Micawber’s famous, and oft-quoted, recipe for happiness:

“Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

Charles Dickens, David Copperfield

Comment by taxpayer
2017-04-20 07:31:00

why would this zoom in 2016

wasn’t the party over in 2015?

it’s Canadian for fcks sake

it’s Canadian” will be the replacement for tulips/south sea/ etc

Comment by Professor Bear
2017-04-20 07:43:35

Is the bond market signaling an incipient recession?

Comment by Financial Moralizer
2017-04-20 10:38:05

Recessions are good for house and stock prices because investors look towards the future, for a time when there is not a recession. So that means you have to buy now. No healthcare deal, no tax deal? That sounds like govt gridlock, which also means you buy houses and stocks. Good news is good news, and bad news is good news. It’s always the greatest time to buy.

Comment by Senior Housing Analyst
2017-04-20 07:48:23

Kirkland, WA Rental Rates Crater 8% YoY


Comment by taxpayer
2017-04-20 08:20:33

the sub 4% 30 yr mort has reemerged just in time for the crescendo

Comment by Aqius
2017-04-20 09:16:21

btw, whatever happened to the short-lived but prolific poster NYChk!?

did NYCdj & her get a Tribecca Co-op where she does “serious” pieces for Slate / The New Yorker / Atlantic by day & they throw rave parties at night !? or maybe last seen at Jimmy Hoffa’s diner!?

hey dj, since you’re spinning old skool, have I mentioned how bad this white boy’s got it for Lisa Lisa …. willing to paypal big coin for some digits. bonus if she wears that pink head tie!

Comment by Race Bannon
2017-04-20 10:23:37

All donkey trails lead to a RageCage.

Comment by Financial Moralizer
2017-04-20 11:02:04


We need to help the poor guy stuck in his rage cage. He needs another quicken loan.

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Comment by Rental Watch
Comment by Race Bannon
2017-04-20 09:52:44

Doesn’t mean much with foreclosure mortoriums and inventory management efforts in full force.

Danville, CA Housing Prices Crater 5%YoY


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