Phew!
We dodged a bullet there, right folks?
Or, am I wrong? Do some of you out there want all properties listed for sale in the province of Ontario to have a forced energy audit before they can be listed?
This might be a new topic for some of you, so let me explain the program, trace back the roots, and then show you the final(?) nail in the coffin…
Is now a bad time to share a great column by the legendary Rex Muphy?
In Tuesday’s National Post was this beauty:
“Rex Murphy: Trudeau still gives green fanatics cover as they strangle Trans Mountain”
For those who are too busy to click on the link, here’s Rex’s intro:
–
The question is: Who has authority to decide Canadian energy policy?
Governments or Green-machine protesters?
That is the question: Which bunch will it be, Canada’s parliaments, or those who self-appoint as the green guardians of whatever place on Earth — usually in Canada — they choose to exercise their very particular kind of media-and-protest-pressure politics? Will it be government? Or Green end-of-days monomaniacs? We had an answer on Sunday when Kinder Morgan announced that the relentless harassment of its proposed pipeline has moved to the company to the very edge of outright cancellation.
And it wasn’t government.
The Kinder Morgan pipeline project is very likely going the way of Energy East, Northern Gateway and Petronas. Jobs by the tens of thousands, energy security and support to the whole Canadian economy have been turned to dust due to the righteousness and fervour of one-issue fanatics. Up till Sunday, the Trudeau government’s preferred role was to sit mute and complacent as an indifferent spectator to the concerted attacks on the Canadian energy industry, while vaingloriously proclaiming its “global leadership” on the global-warming file.
–
I love Rex Murphy, unapologetically.
In a very strange time in society, where everything that everybody says is offensive, Rex continues to say whatever he wants, and I respect that about him.
I don’t know enough about the Trans Mountain pipeline, so I won’t comment.
But I do know that when a dozen vegans decide that it isn’t okay for the other 7 Billion people on the planet to eat meat, and they decide to protest outside an entrepreneur’s restaurant that employs thirty people, they, what? – expect that the dozen of them and their opinions should be adopted by the rest of the world?
It’s such an awkward time in society, and I have no idea where this is all going.
In any event, the “proper” way to slaughter a deer wasn’t the point of today’s blog, nor was the potential cancellation of the Trans Mountain pipeline.
It was, rather, the “Home Energy Rating & Disclosure Program,” that was going to be tied to property listings, but not, it would seem, is not.
I never thought it should be tied to property listings, for what it’s worth.
But then again, I have a deep mistrust of the Provincial government after what’s gone on during the last fifteen years, so when they propose essentially any new program, my spidey-sense starts tingling.
I wrote about this back in 2016, and to my surprise, I think a small majority of readers supported the HER&D Program, essentially coming to the conclusion that “More information is a good thing, not a bad thing.”
I felt like, after that 2016 blog post, that I stood corrected.
Here’s the 2016 post, in case you’re curious: Home Energy Rating Disclosure Program: Yay Or Nay?
I looked back at the comments, and this one still makes me laugh, two years later:
So what happened with the HER&D Program?
Why will it no longer be tied to property listings, as was the plan?
Well, if you ask the Ontario Real Estate Association, it’s because of them.
Here’s an email I received, along with the other 70,000 Realtors in Ontario:
–
Dear David,
We did It!
We have successfully fought back against the Home Energy Rating and Disclosure (HER&D) program.
Since 2016, OREA has been fighting to stop HER&D.
If implemented, HER&D would require a home seller to conduct an energy audit before listing their home. The program put home owners of older homes, like seniors, at a huge disadvantage. Receiving a low energy score on an older home could cost an owner thousands of dollars in hard-earned equity.
The program also unfairly forced REALTORS® to post the energy score on the MLS® listing. There are other methods for selling a home, and yet only the MLS® was targeted.
After a lot of hard work from your government relations team led by Chair John Oddi, we have successfully fought back against this proposal!
This week, we got a letter from the government which stated, “The province has decided not to proceed with the implementation of a HER&D program at this time.” This means that the province has listened to OREA and put the brakes on HER&D.
While this is another big win for REALTORS®, this issue has been a wakeup call. Governments at all levels are struggling to address issues relating to climate change and the housing sector is being asked to play a part in that work.
We must be thoughtful and propose alternatives to programs like HER&D, or we will be steam rolled by them.
We will continue to provide you with updates if this issue progresses.
To get involved with more issues like this, that matter to your business and Ontario home owners, visit www.ontariorealtorparty.com and sign up to the Ontario REALTOR Party. When you want a government to make the right choice for your business, there’s nothing like strength in numbers.
Sincerely,
David Reid
2018 OREA President
A wee bit much, no?
A little too much gloating, back-patting, and self-congratulations?
Yeah, it’s not my cup of tea either.
It’s way too political, and there’s too much rhetoric. The original “letter” from OREA to the Ontario Ministry of Energy from back in 2015 was a bit too grandiose for my liking as well. You can read that HERE if you’re interested.
That letter was 28-pages long, and not to sound a bit too Jerry Maguire here, but they had me at “hello.”
“Don’t force home energy audits – encourage them.”
That’s what was written on the first page of the letter, and I whole-heartedly agree.
Another reader on my 2016 blog post commented:
“In a hot, sellers’ market like Toronto currently, there will be certain energy audit firms who will become known in the market for doing slap-dash audits for cheap prices. And what is the buyer going to do — complain? However, I disagree that the solution to this is more regulation of home energy audits. So long as it remains a sellers’ market, cheap useless energy audits will now be the price of listing a home. When the market is more balanced — or if and when buyers really feel an energy audit would be useful — then quality energy audits will be used.”
And once again, I agree.
I’m not a fan of government (over?)regulation, and a “forced” energy audit, tied to the sale of a listing, doesn’t sit well with me. It never did.
But the idea of “more information” is something we can’t ignore would help consumers, and just as I continuously voice my objection to TREB and CREA’s archaic structure and set of self-serving rules, I think any information on a home’s energy rating can be a tremendous asset in this market.
When I list a home for sale, I always pay for a pre-inspection, and I use Carson Dunlop, who is a high-end, brand-name firm. There is one inspector that I know and trust, and who has a respected name in the industry. I make copies of that inspection and leave them on the dining room table of the house for sale, and I upload a copy of the inspection to the MLS listing online.
The more information that’s available, the better.
The more comfortable a buyer feels, the better job I’m doing for my seller.
So when it comes to the HER&D Program, I see the value, no question about it.
I just still don’t think they should be forced, and the idea that a property cannot be listed for sale in the Province of Ontario without the audit doesn’t sit well with me.
The idea of a “mandatory” energy audit has been around for some time.
The Green Energy Act, 2009, made the audit a potential reality.
“Ontario A Step Closer To Mandatory Energy Audits,” wrote noted real estate lawyer and columnist, Bob Aaron in October of 2009.
The details back then were a bit more loosey-goosey than they were when the idea gained some momentum in 2015.
From the column:
–
Section 3 of the new legislation is the only part of the law that has not yet received royal assent, but when it does it will give anyone who is making an offer to purchase a residential property the right to receive an energy audit from the seller. Regulations, which have yet to be released, will describe the type of information and reports the purchaser is entitled to receive.
The new law allows the government to establish rules setting out how energy audits will disclose the energy consumption and efficiency ratings for the house.
The Green Energy Act also states that, before accepting the offer, the seller must provide the prescribed information, reports or ratings to the buyer.
–
As we all know, the Provincial government eventually tidied all that up, and gave us the HER&D Program in 2015.
Objections spewed in through 2016 and into 2017, and I remember reading this article in the Financial Post last summer:
“Coming Soon, Another Costly Burden On Harried Homeowners — Mandatory Energy Audits”
Here’s an excerpt from that article that seems oh-so similar to Rex Murphy’s tone in the first article:
–
Earlier this month a coalition of environmental advocacy groups headlined by the Pembina Institute released a set of 10 demands directed towards the federal and provincial governments regarding the construction industry. The group says these changes are necessary if Canada is to reach its overly-ambitious (some might say impossible) 2030 targets under the Paris climate change agreement.
While this energy policy manifesto covers many aspects of residential and commercial buildings, the item most likely to affect current homeowners is its call for “universal benchmarking and home energy labelling across the country.” In other words, mandatory energy audits. While new homes across Canada may feature “Energy Star” federal government certification or similar programs, this new proposal goes much, much further by making an energy audit a requirement for every house to be sold, including older dwellings.
Mandatory pre-sale energy audits are being promoted as a harmless bit of information for home buyers and sellers. “It’s just another way for a home to be valued,” Karen Tam Wu of the Pembina Institute told the Canadian Press. That’s one way to look at it. Here’s another: This will become yet another time-consuming and costly requirement laid at the feet of harried home owners. Alongside all the other myriad legal, financial and practical issues that must be sorted out prior to listing a house, you may soon have to add the need to arrange a bothersome home energy audit to the list.
If governments follow up on this demand, the impact will be felt by everyone who owns a house. And with audits typically priced at $400 to $600, this is not an insignificant obligation (although rebates sometimes cover part of the cost). This burden will inevitably fall hardest on modest-income homeowners. Mandatory energy audits will also punish owners of older, less energy-efficient homes. If you own a heritage home today, be warned that your house will become harder to sell in the future, as disclosure of energy costs becomes yet another item to be obsessed over by prospective home buyers along with local schools, commuting routes and potential neighbours.
–
Okay, so clearly this is an opinion-piece, made obvious with the words “demands” and “manifesto.”
And I believe that if I looked hard enough, I could find another dozen articles that fall into the “nay” column, and a dozen that shout “yay.”
So let me open up the floor here, folks.
When I wrote about this in 2016, it seemed a lot of people were in favour of the mandatory home energy audits. Do you still feel the same way?
Or would you say that you love the idea, but you don’t feel it should be mandatory?
Or do you make a special trip to Nova Scotia each and every year just to dump all your plastic water bottles in the sea?
Have your say…
Ralph Cramdown
at 7:20 am
What’s it like selling a place with electric baseboard heat? Did the buyers have any inkling as to what their electricity bills would be like? Did it contribute to the seller’s decision to sell, after only owning the place for a year? Did the inspection report highlight that electric heat costs a metric fortune compared to the alternatives, or was that left for buyers to realize, or discover? Inquiring minds want to know!
Mikey
at 7:35 am
I’m an HVAC contractor and we just did a central air job in an Oakville town house in which the owner was spending between $400-500 a month on hydro with the stat set at 20C. I always tell people buying into older homes, if it has electric heating I’d set aside around 15K to get central air installed (equipment/labor/finishing) Electric heating is the worse, most expensive and dries the hell out of your home. Maybe in the future it will change but at this point I try to tell people when buying look at whats heating/cooling your space? Fancoils in condos much easier to fix than heatpumps for us : )
hoob
at 11:43 am
OK I’ll bite… How does electric heat dry out a home?
Mikey
at 1:03 pm
Electric heat in general is baseboards in older homes with many that rarely heat in furnaces, in furnaces though they can at least have a humidifier in it to help bring back moisture in the house, baseboards cannot. All heating sources will dry out the air when heating but electric heat will do it at a fast rate. So people with electric heat not only pay crazy bills when used to heat their place but will more likely have nose bleeds, dry throats/dry skin while living with it in the winter months.
Electric heat is 100% efficient when on but at the current rates gas is cheaper and higher end gas furnaces are 98% efficient now a days anyways. Hope this makes more sense.
Frances
at 11:20 pm
About that “dry heat”, you are dead wrong. We have an electric furnace and have never been troubled by dry air in the heating season. It is the outside air that is dry because it is cold and cold air holds less moisture. When you bring that air into the house for use in combustion, it is holding less moisture so the humidity in the house is low. There is no combustion involved with electric heat thus no outside air is required. But electric heat is expensive.
Frances
at 11:29 pm
And what does central air conditioning have to do with heating a house? AC is for cooling a house in the summer which also reduces the humidity. It is exactly the opposite to winter heating. Or are you talking about installing the ducts that are required for AC?
Kyle
at 7:39 am
At the risk of over generalizing, any house that has electric baseboard heating is being sold and bought as a renovation project.
It is also common for sellers to provide their utility bills, which is a far better measure of the true costs to run a house than an energy audit is.
Kyle
at 7:45 am
Energy audits have severe limitations. They measure air loss not heat loss. If you want to know how efficient a house is to run ask for the bills.
Mikey
at 2:33 pm
https://myheat.ca/ for people in those cities, cool tool I sometimes show customers about the importance of attic insulation
Condodweller
at 9:50 am
Briliant. Perhaps I am the exception but I heat the air in my home…
Kyle
at 11:36 am
You are aware heat can transfer through things, right? It doesn’t only escape when air escapes.
Condodweller
at 2:10 pm
I am aware. Typically a large portion of heat loss is due to a leaky house. Add to the fact that it’s mostly invisible and can’t feel it unless it’s really windy and it makes sense that audits test for air loss. Most other sources of heat loss can be figured out without an energy audit i.e. single pane sliding glass windows in aluminum tracks, no attic insulation, age of the house etc. (most people will highlight the fact that they made improvements, therefore, you can go by building code for the period.)
Kyle
at 3:13 pm
“Typically a large portion of heat loss is due to a leaky house”
Um no, most of the heat loss is through the roof, walls and windows, not the leaks and gaps.
Condodweller
at 11:03 am
Since you never accept anyone else’s point of view when it doesn’t match yours this is going to be my last comment on the subject. If you have two identical houses both installed with the most current and advanced insulation but one loses 20% energy due to air leaks, the current energy audit would identify that. Everything else can be inferred by the age of the house assuming it was built to the then current code. If it has been improved upon by the owner since, he/she will be trumpeting that during the sale to make the house more attractive to buyers.
Kyle
at 1:42 pm
“If you have two identical houses both installed with the most current and advanced insulation but one loses 20% energy due to air leaks, the current energy audit would identify that.”
While this is true… It has absolutely nothing to do with the original point, because in the real world, houses don’t have identical amounts of insulation.
“Everything else can be inferred by the age of the house assuming it was built to the then current code.”
The very fact that one has to infer how much insulation there is, 100% validates my original point, that the Energy Audit rating’ has severe limitations. Thank you for proving my point and disproving your own.
Joel
at 10:13 am
Every time the government tries to provide more information to the public the real estate board is offended and does everything they can to fight it. Sure, it’s not a perfect system but it goes a long way in educating the public. This would be especially useful on flips as it would be s strong indication on the quality.
Kyle
at 11:28 am
To play devil’s advocate i think mandating an energy audit, actually help’s shoddy flippers to game the system. As an example, they could skimp on insulation and instead double up on much cheaper house wrap. It will perform much better in a blower door test, but it sure won’t make the house more efficient or higher quality.
Joel
at 7:49 pm
Fair point
Daniel
at 11:46 am
David, you can’t really post an excerpt from Rex’s article, say “i love it and agree”, and then say that you don’t know enough about trans mountain to have an opinion. Seems to me like at least half of Rex’s word count is devoted to disparaging adjectives for environmentalists. The rest of it is arguably baseless assertions about how the governments are handling trans mountain. Your big complaint about modern life is how easily people take offense and a lack of accountability. I’d suggest that people like Rex, who spend a lot more time painting their opponents as people unworthy of respect or consideration rather than actually discussing the facts, are a much bigger problem for our society.
For whatever it’s worth, i think trans mountain needs to get approved. I just think name calling and disparaging those who don’t agree with you is unnecessary and un-canadian.
BJA
at 4:33 pm
Agreed on all points.
Appraiser
at 12:14 pm
“Canada is a country of the rule of law, and the federal government will act in the national interest. Access to world markets for Canadian resources is a core national interest. The Trans Mountain expansion will be built.”
~Justin Trudeau, April 08, 2018.
“The Government of Canada believes that the Trans Mountain Expansion pipeline is in our national interest, which is why we approved the project and why we continue to stand by our decision. This crucial resource project will expand export markets for Canadian resources and create thousands of good, middle class jobs and no one should be standing in the way of those jobs and the families that stand to benefit.”
~The Honourable James Gordon Carr | Minister of Natural Resources, April 08, 2018.
Appraiser
at 12:30 pm
Unapologetic regarding Rex Murphy? You should be.
“Rex Murphy Doesn’t Understand Transit Planning, or Economics, or Why We All Must Die One Day” https://torontoist.com/2017/01/rex-murphy-doesnt-understand-transit-planning-or-economics-or-why-we-all-must-one-day-die/
“How Rex Murphy Went from Critic to Crackpot” https://www.huffingtonpost.ca/graham-templeton/the-fall-of-rex-murphy_b_3663120.html
“Is CBC commentator Rex Murphy a shill for the oilsands industry …Murphy has made several speeches to oil-friendly audiences who lap up his cheerleading about the industry and his wisecracks about Neil Young, environmentalists and do-nothing Easterners, including his CBC colleagues,” https://ca.news.yahoo.com/blogs/dailybrew/cbc-commentator-rex-murphy-shill-oilsands-industry-205608575.html
LazyParker
at 4:32 pm
Rex Murphy. The Don Cherry of “journalism.” Cue the bull**** Canadiana.
Geoff
at 12:34 pm
“Rex continues to say whatever he wants, and I respect that about him.”
I personally would have a hard time respecting someone who says whatever they want, without thought, knowledge, empathy, understanding or care. Better to be thought an idiot than open one’s mouth and confirm it, as they say.
Not Harold
at 4:33 pm
What does empathy have to do with good policy?
Empathy for speculators like the people who bought houses they can’t afford? Leads to stupid and ruinous policy, just like empathy for people who won’t move from their dead home towns or try to get a different job, people who shove their faces full of food and demand that I pay for their mobility scooter as they continue to eat 10000 calories of McDonalds every day, or to empathize with journalists and actors clinging to a dead business model and demanding luxurious salaries when they are no longer monopoly providers in a small region but have to compete against everything made in the English language at 0 marginal cost.
Empathy leads you to do monstrously evil things – lots of people today claim that it’s their empathy that leads them to support Bolivarian Socialism and it’s just those evil Americans and businessmen starving the people.
Pete
at 1:11 pm
Frankly I’m tired of people celebrating those who say whatever they want to say. That’s how the US ended up with Trump. I’d rather celebrate people who speak with logic, evidence, and compassion.
Appraiser
at 2:00 pm
Sad, but true. It’s also how Rob Ford got elected and quite possibly the path for his ill-informed, loud-mouthed thug of a brother to take over the reins of power at Queens Park.
jeff316
at 2:12 pm
Agreed!
Housing Bear
at 12:58 pm
Center right, but i have voted liberal in the past. Personally, I think Wynn and Trudeau have to go and I don’t think the government should be adding any more measures at this point at it will just make the pending crash worse. Boomer’s are about to lose their retirement next egg, we don’t need to make it any more challenging for them to unload and protect some of their wealth.Make it mandatory on the next run so it is simply part of the cost equation for property flippers.
Stress test implemented by OFSI – good measure. Allows locals to have a sense of what to expect with future interest rates and keeps the riskier borrows to the sidelines.
Interest rate rises – BOC is independent, and thank god for that. If their decision making was tied to getting votes or appeasement of one issue groups it would lead to disaster. It is time to raise rates.
Fair housing plan last april – I like that it took the exuberance out of the market last year preventing the bubble for growing further. Eventual fallout would be worse had average price made it to 1.1 or 1.2 before collapsing under its own weight. The less debt that can never be repaid the better. However I think B-20 should have been rolled out first. While the big inflow of foreign money was more in 2015-2016. This may have allowed some of the over indebted households to unload their assets to richer foreigners. Selfish, but would reduce the fallout and cleanup for Canadians as a whole
Carl
at 1:13 pm
An interesting email. Thank you for sharing it. If anyone thinks that Ontario politics cannot not get any more surreal, think again. Now we are invited to join the Ontario Realtor® Party. Or was that email dated April 1?
Ralph Cramdown
at 2:19 pm
“The program put home owners of older homes, like seniors, at a huge disadvantage. Receiving a low energy score on an older home could cost an owner thousands of dollars in hard-earned equity.”
Ponder that. Disclosure of latent defects is a zero sum game. Organized real estate is congratulating itself at a successful lobbying effort to help rich old people fob off expensive, energy-inefficient housing on ignorant young buyers. Any time you see an ad — paid for by the same organization — telling you how realtors help buyers, think of that.
Kyle
at 4:57 pm
@ Ralph
I’m getting this vibe from your comments that you feel all buyers are incredibly stupid or at the very least much much dumber than you. Do you honestly believe that buyers don’t know electric baseboard heat is much more expensive to run than natural gas fueled heating? And do you really think buyers looking at a century home being sold by a down-sizing senior expect it to be as efficient as a new modern home?
Housing Bear
at 5:36 pm
Well after the Mattamy Home/Oakville stories what else is one to think about recent buyers?
Appraiser
at 6:20 pm
What is abundantly clear is that most buyers have been far more clever than the real estate perma-bears who have been calling for a “pending crash” for the past decade.
Housing bear
at 8:49 pm
Gains only count if you get those chips off the table. I did say recent buyers. People who bought ten years ago will be fine as long as they have not taken out large HELOCs. People who have used HELOCs to speculate on other property could get wiped out. That being said renting isnt so bad, I recently went back to it and just found out that may Landlord imvestors might actually be subsidizing my stay. Building took possum start of 2016. Big risk for me is if they have to sell, then i might have to make another move or two. Big reward is that I got to try the condo lifestyle before making a rash decision. Think if I ever buy again it will definitely be a house.
Anyway back to perma bulls who have been calling for a crash the last ten years. I do not think that we will go back anywhere near those prices however the bear argument has always relied on raising interest rates. Even by 2013 our then BOC Governor (one who got poached to lead Bank of England) was noting how prices were detached in Canada and other economies not hit as hard by Great Recession. Notes how low rates have been leading to increasing leverage and speculation that could lead to pain once rates rise. It’s 2018 now, rates are rising
Housing bear
at 8:51 pm
* possession
* perma bears
Ralph Cramdown
at 6:03 pm
That was a quote from OREA. So they believe SOME buyers to be “stupid” enough to overpay by thousands absent a report. And David hires stagers — which would be a deadweight loss unless some buyers were “stupid” (i.e. willing to pay more for a property containing rented furniture and San Pellegrino).
Many of David’s blog posts are about the “stupidity” of, e.g. people who show up at properties underlisted by $200k and offer list, against 8 other bidders.
I’m definitely in agreement with George Carlin — “Think of how stupid the average person is, and realize half of them are stupider than that.”
Kyle
at 8:59 pm
Sure if that’s how you want to justify it, but with the way you also paint every sellers as greedy shysters and all Realtors as a deceitful band of thieves, one might be instead inclined to think you have a bitter axe to grind with anyone having anything to do with real estate.
Libertarian
at 10:47 am
Good observation.
I remember there was a debate on here a while ago about misalignment of interests – that is, how the agent representing the buyer has no incentive to get a lower price. I think it was Chris leading the crusade on this, but he was getting crucified by the other commenters.
So it doesn’t surprise me that organized real estate looks at everything from the seller’s perspective considering that’s how the industry makes its money.
Not Harold
at 5:12 pm
Going off your mention of providing the Carson and Dunlop report, wondering if you saw the article on the increased value of closing gifts from Realtor to clients in the National Post?
I found one line hilarious – where Amanda Miller from Slavens Toronto described how generous she was by paying for staging for a condo. Really? By effectively marketing the property you substantially increased the sale price (apparently a record for the building) and thus your pay. With $1000/sqft prices it doesn’t take too large of a condo to make this a profitable investment and not a gift.
Most good realtors, just like most professionals, would call that doing your job. Getting the best photos, a reputable home inspection and/or the condo documents, a survey, and staging (if necessary) should be factored in to being a realtor. Its appalling that someone would feel so entitled to nickel and dime their clients on top of getting 2% of a very large transaction that putting a bit of effort into a sale would seem worthy of bragging about to a national newspaper!
Even among the professional agents there are far, far too many who are lax and taking advantage of clients rather than treating it like a serious business.
Rob
at 10:13 pm
You’re assuming agents are taking 2% every time. Sellers want to pay as little commission as they can, 1% or less plus have the realtor pay for staging and home inspection. I’ll go on the limb and say that most agents who take 2+% commission on a sale will pay for staging.
Not Harold
at 3:34 pm
From my understanding the only people doing less than 2% are the discount providers and they don’t have much market share. The specific broker referenced is absolutely NOT a discount broker.
But maybe the full service brokers are not holding the line on commissions despite the 2 decade white hot real estate market. Not what you’d expect but you may have better data than I do.
Bugeyedbrit
at 7:20 pm
Why is it down to a seller to provide this data? If a buyer wants this information they are free and able to go and employ someone to perform the work (much like a surveyors report for the other parts of the house..)
For once, the govt have my support.
Appraiser
at 7:41 pm
Too right. Caveat emptor. Unless the seller actively concealed latent defects or otherwise made material misrepresentations amounting to fraud.
Chris
at 7:42 am
It’s almost as if John Pasalis heard you, Ralph; new report on the fallout from last Spring.
http://www.bnn.ca/reckless-toronto-market-saw-sold-homes-lose-135m-in-value-in-2017-report-1.1053979
https://www.movesmartly.com/articles/what-you-can-learn-from-torontos-2017-real-estate-bubble
Appraiser
at 9:31 am
Old news @ Chris:
Here’s a Direct quote from John Pasalis article: “Prices in the GTA did not continue to decline as they did in the U.S. housing crises, instead levelling out by July 2017 with experts predicting a price plateau in the months to come.”
John Pasalis’s history lesson is just that – history.
P.S. Last year there were 92,286 sales on MLS. “According to real estate brokerage Realosophy Realty, at least 988 households were directly affected by a sudden drop in Greater Toronto Area home prices last year.” WOW! That represent slightly more than 1% of all transactions. What an absolute tragedy!
Last spring (March, April & May), there were 33,903 MLS sales. Where are the stories about the sellers who sold at the peak and made major bank, many of whom will be retiring in comfort? Oh yeah, almost forgot – good news doesn’t sell.
Chris
at 9:44 am
Oh, are we going to play the game of cherry picking quotes to fit our narrative? Great, let me have a go:
“the market saw a rapid decline of prices from a median price of $765,00 in March to $626,000 in July, a decline of 18% in four months, faster than the declines seen in the U.S. housing crisis which began in 2006.”
“housing affordability, already a challenge in the GTA, has been worsened with average prices in the GTA at 28 times annual rents by the end of 2017, less affordable than San Francisco, Los Angeles and New York.”
“One of the factors that has likely contributed to the overconfidence home buyers and investors have had in the GTA housing market was that after ten years of hearing from various analysts and industry actors that any fears were unfounded and that prices would always keep rising, people began to tune out any talk of bubbles.”
Anyways, Ralph was asking about fallout from last Spring. Here’s a thorough report on it.
If you choose to discard it as “old news” or insignificant, that’s your prerogative. But don’t try to carefully select a single quote and pretend that this report fully backs your perma-bullish position.
Appraiser
at 9:56 am
Fallout acknowledged.
Fallout was insignificant.
Fallout is old news.
Stop beating dead horse.
Chris
at 10:10 am
Glad to see you acknowledge it.
I agree, it is insignificant in the grand scheme of the GTA Real Estate Market. But that’s not what Ralph was asking about; he was asking about those caught in it. For these people (the 988 households in the report), plus the backed-out buyers who may now face litigation, it is probably quite significant.
These examples of fallout are becoming old news, but it remains to be determined if there will be yet more to come. You obviously suspect the downturn is over. I suspect it is not. Neither of us has a crystal ball, unfortunately.
Housing bear
at 8:32 pm
I’d argue that it’s much more recent news than the buyers who sold at the peak and made a fortune. Ask any of those buyers if the fallout was insignificant. “But but but immigration, supply, millenials, condo appreciation!” The dead horse is the days of money for nothing
Kyle
at 9:46 am
To step back and summarize – what we’ve seen is two decades of run up where people who bought are WAY above water and a very small window of a few months, where about 1% of buyers that year would be currently underwater. And now the bears are coming out in full force demanding mea culpas from everyone. To that i ask what do you bears say to anyone who may have listened to their advice and fear mongering over the last several years? Do you acknowledge the fall out from that? The people in 2016, 2015, 2014 and beyond who may have been influenced not to buy or to defer and are worse off for it, what’s your response to them?
Chris
at 10:20 am
Where am I demanding “mea culpas” from anyone? I shared a report detailing the fallout on approx. a thousand households, in response to Ralph asking about the topic.
If I were asked for advice today, it would be the same as it has ever been; if you want to buy a home, plan on being there for a reasonably long amount of time, can afford it (including if/when interest rates rise, and all of the ancillary costs such as maintenance and taxes), etc., go ahead and buy.
I would never advise someone to sell their current home, uproot their life and their family, and start renting, in an effort to “short” the housing market.
Much of my pessimism is directed at those who are speculating, flipping, or banking on their home as a guaranteed investment and/or their retirement savings. I’ve said many times that I am optimistic about Toronto over the long run, and strongly believe that someone buying a home as a primary residence, to live in for the long haul, will likely wind up just fine.
Would someone have seen higher returns had they leveraged themselves to the eyeballs and bought as much GTA real estate as they could possibly afford, rather than diversifying their investments/net worth? Probably.
But they probably would have seen even higher returns had they leveraged themselves to the eyeballs in 2014 to buy bitcoin. Yet, I doubt you, or anyone sane, would have recommended this as a sound strategy.
Kyle
at 10:23 am
The advice is sold. I wasn’t directing my comment at you.
Kyle
at 10:24 am
The advice is solid, not sold.
Chris
at 10:28 am
Ah, sorry, I thought you were directing it at me. My mistake.
For what it’s worth, I agree that some of the stuff you posted from sources like Garth Turner is absurd. Like selling your home in anticipation of a correction? Ridiculous. The wife would murder me if I tried to pull that, and rightly so.
Kyle
at 11:54 am
Agreed. My point in bringing up Garth Tuner was this. It’s easy to laugh at and mock the gullibility and absurdity of the Wealth Expo attendees, but make no mistake Garth Turner is pulling a variation of the same schtick. And anyone who puts any stock at all in what Garth Turner says, should take a step back and see the parallels between themselves and the Wealth Expo fans.
Chris
at 12:17 pm
I don’t read Garth Turner’s stuff very often, because, quite frankly, I find him overly dramatic and aggressive. The link you posted about his recommendation that homeowners sell and rent, because there was a coming correction (in 2010 or whenever it was), is a prime example of this ridiculousness.
That being said, I have heard he occasionally tempers his absurdity with more balanced points, in line with the ones I made above (buy what you can afford, etc.). This probably doesn’t happen all that often; after all, big, dramatic, doomsday predictions get more clicks (and more clients for his wealth management firm). But at least it gets a cursory mention, I suppose.
Does it redeem all he says, and make him worth following? Not by a long shot. But he is, in my view, at least a tiny smidgen better than the Wealth Expo guys selling their $99 stock picking red/green arrow program. Others are free to disagree, and lump them all together in the same boat, if they see fit.
As I said in another post, I would prefer if we improved financial literacy, rather than mock. Give people the tools and know-how to determine when they’re being misled, whether by Garth, the Wealth Expo, or anyone else.
Chris
at 10:32 am
Also should mention with regards to sample size, this report only measures properties that successfully sold after initially failing to close.
As Pasalis says “there are probably many more properties that failed to close in 2017 that are still for sale today.”
These would not be included in his analysis.
Frances
at 11:35 pm
Boy, did this post generate a lot of comments that had very little to do with your question!
An energy audit for our old house would be a waste of money because it will be a tear down. If you are going to demolish it anyway, what difference does it make if it is not energy efficient. So I am against making one mandatory.
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at 9:02 am
Muitas mulheres nunca tinham tocado rosto. https://www.youtube.com/channel/UC68MS3it-w3irQiTRxklX8w?sub_confirmation=1
cha da vida reclame aqui
at 1:36 am
Conclusão: Engordei 10kg após e nunca tive esse peso. https://dwsilva.com/super-cha-da-vida-beneficios/
guia da reconquista perfeita download gratis
at 1:38 pm
Curso de Pompoar online gratis apresentação do método. https://poderdeconquistar.com/
diabetes tipo 1 tem cura
at 2:13 am
MORETO, R. PEDIATRIA: Saúde Individual e Coletiva. https://blogsaudebemestar.wordpress.com/
Nuicesel.Mihanblog.Com
at 3:15 pm
Santa Rita de cássia. Isso seria uma mentira absoluta. http://nuicesel.mihanblog.com/post/14
loteriaexpert1.blogspot.com.br
at 9:23 pm
Se escreve no canal Obter na Loteria ai embaixo. https://loteriaexpert1.blogspot.com.br/2017/10/como-ganhar-na-lotofacil-aprenda-aqui.html