Well folks, the year is winding down, and as I find myself with no properties to show, few emails to answer, and no burning real estate news to report, I thought it would be a good time to go back over the top ten stories of the 2014 real estate calendar.

I just went through the 156 blog posts from 2014, and it was tough to narrow it down to just ten topics!

But I’ve chosen ten stories, events, themes, or blog posts that I think were the most notable, or in some cases, infamous, and revisited them below.  For your further reading and viewing pleasure, I’ve also provided links to the original blogs, newspaper articles, or follow-up stories.

Enjoy!

10) The Printing Factory Lofts Debacle

I must be the most naive person on the planet.

I went to bed the night before I clicked “submit” on that post, and for the life of me, I never saw the proverbial you-know-what storm coming.

I didn’t think it was all that interesting, to be honest, and maybe that was my problem.

Here you had a building that was black-listed by all three mortgage insurance companies: CMHC, Genworth, and Canada Guaranty, and that meant that no buyer with a down payment of less than 20% could purchase in the building.  I had a buyer that bought a condo in the building, conditionally, and when all three insurers turned down the deal, and we looked at the building’s finances, we simply walked away from the deal, and I thought I’d write a story about it on my blog.

Simple to me, but not to those who live in the building.

I was the first person to bring the problem to light, and therein lied the problem for residents of the Printing Factory Lofts: it was their little secret.

I didn’t understand why they felt, a) they should keep it a secret, b) it would actually remain a secret.

And as my blog post on the subject hit the Internet, and the complaints came in from residents, I also couldn’t understand why they felt that it was in any way “wrong” for me to discuss the subject.

It’s why I wrote in my Monday blog about the meth lab explosion in Liberty Village, that my post was “something called ‘news’,” and that I was simply relaying information that’s readily available.

As the day of the PFL blog post wore on, the residents started to call into question the accuracy of my post, and the idea that the three mortgage insurers had black-listed the building, and that’s when I realized that they were either uninformed, or knew what was going on, and just plain lied.

The president of one of the three mortgage insurers (can’t say which one) personally called my mortgage broker to tell him that, yes, the rumour was true.  But I couldn’t write that on my blog, nor did I write this in my follow-up two days later.

My information was 100% accurate, and confirmed by multiple sources, but you can’t stop somebody from believing something if they really, truly want it to be so.

In the end, I took a you-know-what kicking on the blog, but my readers came to my defence in spades, and some of their comments were hilarious!

Not only that, The Globe & Mail’s Carolyn Ireland wrote a full page article about the story, which I felt really validated my efforts.  You can read her column HERE.

I’ll never get a listing in the Printing Factory Lofts, but that’s not the point.  In fact, most Realtors come up to me and ask why I wrote something negative about a building in Toronto, but they too are missing the point.

The entire purpose of Toronto Realty Blog is to inform, and empower, Toronto’s real estate buyers and sellers, and what happened at Printing Factory Lofts was a cautionary tale, and a learning experience.

You can read the original article HERE.

My follow-up blog post is HERE.

9) CMHC Raises Insurance Premiums

This is clearly not as sexy a topic as the Printing Factory Lofts “scandal,” but it was new policy, and new policy is always newsworthy.

The CMHC hadn’t previously raised their insurance premiums since 1999, and yet when they did so in February of 2014, the real estate industry, mortgage industry, and all its participants, seemed caught off guard.

The increase in insurance premiums really hasn’t, and wasn’t intended, to have a major effect on the real estate market, nor on the pocket-book of Canadians.

In fact, CMHC noted in their press release on February 28th, 2014:

“For the average Canadian homebuyer requiring CMHC insured financing, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment.”

Here’s an example of how the change in policy would affect a borrower:

Consider a buyer who is purchasing a $500,000 property with a 10% down payment.

Under the current mortgage insurance system in place, this buyer would pay $9,900 in mortgage insurance, which amortized over 25 years, would amount to $30 per month.

Assuming a current 5-year, fixed-rate mortgage of 3.39%, the mortgage payment would be $2,220.67, plus the $30/month CMHC premium, for a total monthly payment of $2,250.67.

After May 1st, the rates change.

The mortgage premium charged on LTV of 90% (ie. a buyer who has 10% down), goes from 2% to 2.4%.

This means that the buyer would pay $10,800 instead of $9,900, or $36/month instead of $30/month.

The buyer’s monthly mortgage payment increase from $2,250.67 to $2,256.67.

You can read my original blog post from March 3rd, 2014, HERE.

The CMHC breaks it all down, complete with examples, and FAQ, HERE.

8) Toronto Community Housing Corporation (TCHC) Sales, Realtor Search, & Mistakes!

I found this to be one of the most interesting stories of 2014, for several reasons, as you might guess from the title above.

First of all, TCHC liquidated a massive stock of dilapidated houses, which angered some Torontotonians, and made others (myself included), quite pleased.  Personally, I think it makes more sense to sell a run-down 4-bedroom house for $800,000 and use that money to construct purpose-built housing for possibly five or six times as many people, than to spend money to renovate and repair that one dilapidated house.

I was in one TCHC listing on Logan Street that was clearly being used as a drug lab.  I posted some photos on my blog at one point this year, never releasing the address, or saying it was a TCHC house.  But alas, I’m feeling saucy right now, so I’ve let the cat out of the bag.

These properties were among some of the worst I’ve ever seen, and the worst part is that many were bought by “flippers” who renovated the houses, and resold them.  Personally, I wouldn’t live in one of these homes unless I was the one who oversaw the renovation, and knew exactly what was being done.

Secondly, I loved how TCHC searched for a Realtor, by basically asking for the worst Realtors in the city to offer the lowest commission possible, and in my opinion, get less money for the properties, and for taxpayers.

You can read about the process in a blog post I wrote HERE.

But perhaps my favourite story was how the TCHC butchered the sale of a property in The Beaches, by listing it with misrepresentations about the potential use of the land, which evidently, is situated on parkland.

You can read about that story HERE.

Overall, I’d say that everything that happened with TCHC is about what Torontonians would come to expect.

I mean, who could forget Gene Jones leaving TCHC, with $200,000 in severance, plus benefits, and other costs…

7) That Stupid House That Got 72 Offers

I hate even giving this story the light of day, once again, but it was one of the biggest stories of the year, and we have to discuss it.

The first time around, I decided to tread the middle-ground, and stick up for the listing agent.

But let’s be honest here, folks: this whole process was stupid.

If you haven’t heard the story, or don’t remember, basically a Realtor listed a house that was worth about $1.2 – $1.3 Million, for a paltry $699,000.  And in the end 72 offers materialized.

It was embarrassing.

The house ended up selling for $1,365,888, or 195% of the original list price.

In my original blog post, which you can read HERE (and I definitely recommend you do so!), I argued that there were four parties to blame for this:

1) The Seller
2) The Listing Agents
3) The Buyers
4) The Buyer Agents
5) Anybody & Everybody Else

People were so quick to blame the listing agent for under-listing this property, and those people are right to do so.  This under-listing demonstrates how little shame some agents have, and how some just don’t understand how to market and sell real estate, so they resort to tricks like this instead.

But in my blog post, I ranted and raved about the buyers who were stupid enough to submit offers that weren’t worth the paper they were printed on, and the buyer agents who allowed this to happen.

The house sold for $1,365,888, and there were 72 offers.  So you just KNOW that somewhere in those 72 offers, there’s one for $699,000.  And there’s one for $710,000, and one for $725,000, and so on, and so on.

When a $5,000 Rolex is auctioned on Ebay with a starting bid of $1.00, nobody really expects that they’ll be able to purchase that watch for $1.00………..do they?

So of the 72 offers on this house, how many had no business being presented?  Half?  More?

This story made headlines because of the number of offers, and the list-to-sale ratio, but while the public marvels at the 195% of list price, and the $666,888 over asking, I was more concerned with 50-something morons who submitted stupid offers, and their even more more moronic real estate agents who have no clue what they’re doing.

6) Epic Failure Of Trump Towers & Shangri-La

It’s not uncommon for buyers and/or investors to sue a developer.

But how about a developer that sues the BUYERS?  I’ll provide that link at the bottom…

Trump Towers has been the biggest real estate failure I’ve seen in my ten-plus years in the business, and while Shangri-La has its own problems, I think Trump’s brand name makes the story all the more sensational.

Shortly after I got into real estate, I met a guy on my roller-hockey team (of all places!) whose childhood friend turned out to be a major real estate mogul in New York City.  I only met this guy once, but when he heard I was just staring out in real estate, he said one thing to me: “Toronto won’t be a world-class city until they have 5-star hotels.  They currently have one, and that’s that piece of crap King Edward.  Just you wait.  The next decade is going to show a BOOM in 5-star hotel-condominiums.”

I never saw that guy again.

But he was right.  Not necessarily about there only being one 5-star hotel, but we can argue about who/what/when/where a 5-star designation is given out.  He was right about the boom of more “brand name” 5-star hotels hitting Toronto.

Over the last few years, we’ve seen the Ritz-Carlton on Wellington Street West, the Four Seasons on Yorkville Avenue, the Shangri-La on University Avenue, and the Trump Towers at Bay/Adelaide, all come into the spotlight in Toronto.  All four come with worldwide fame, brand names, and proven track records.

The Four Seasons has been a success, especially in terms of their condominiums, many of which were purchased by downsizers from Forest Hill or Rosedale.

The Ritz-Carlton has done alright, as investors were actually able to sell their units (unlike Trump…), but many or most lost money.

Shangri-La and Trump, on the other hand, have been disasters.

I have two colleagues who are in the business of providing private mortgages, and both have told me that they’ve been asked to provide a mere 20% loan-to-value to finance condos at Trump and Shangri-La, and both have declined.  Both said that 20% was “too risky.”  Both felt that the purchase price of these condos could reflect 200% of actual fair market value.

I’ve heard, anecdotally, that entire floors of Trump Towers are sitting empty.

And the press has been awful, from the very beginning.  Here’s a look at five articles dating back to when the mess first started.

1) December 16th, 2011: “Investors Fight To Back Out of Trump”

2) December 30th, 2011: “Angry Trump Condo Buyer Wants Out”

3) November 19th, 2012: “Trump Tower Developer Suing 7 Disgruntled Investors”

4) November 26th, 2012: “Trump Hotel Condo Buyers Seeking OSC Probe”

5) August 10th, 2013: “Toronto Trump Tower Investor Revolt Bigger Than Thought”

Well folks, when the word-count hits 2,000, it’s a good sign that this is turning into a 2-part blog post.

But at least it’ll give you something to read on Monday as you fantasize about the Christmas Break!

And if you’re on pins and needles, and just must know what stories #1 – through – #5 are going to be on Monday, they involve awful condo developments, corruption, and high prices, among other things…

Have a great weekend, everybody!