“I’m a dude that’s trapped in Eastern Europe,” writes Marvin, “due to divorce/child custody.” Hmmm. Sounds serious. But I didn’t ask. “I’ve enjoyed your blog for many years, and to be super honest, as I sit in this hell-hole, reading it each night along with your witty remarks makes me feel a little closer to home.”
But Marvin’s perplexed. How, he wonders, in the middle of a pandemic, could Canadians be so weird?
How is that housing in Ontario is still undergoing bidding wars? A friend of mine is a RE agent in Ottawa, and last night I heard from her that she’d been ‘losing’ deals for the past two weeks, getting outbid even when coming in 80K over asking on residential homes in Ottawa? This seems crazy. Ottawa is a sleepy town inhabited by civil servants. They may have relatively stable jobs, but they’re also not seeing massive increases in earnings year over year. So what gives? How the heck are people engaging in bidding wars at a time when the economy is taking a massive dump, unemployment is gargantuan, and everybody is already up to their ears in debt? None of it seems to make any sense. I’m somewhat concerned, as I’d like to come home in the next few years, and it seems like I’ll be walking into a situation where buying a home will cost an absurd amount of money (either in the GTA or Ottawa; my two preferred destinations).
It gets worse, M. The latest housing stats out of Toronto this week give the impression people are partying like its’s 2016 all over again. You remember that, of course. Multiple bids. Blind auctions. Drive-by viewings. Unconditional offers. Rockstar realtors. Bully buyers. Greedy vendors. Endless FOMO.
According to the continent’s largest real estate board, the only epidemic is among buyers infected with house lust. The better part of 9,000 properties changed hands in Toronto, an increase last month from May of 84%. Yes, eighty-four. Semis jumped in price by 22% year/year – meaning the average cost of half a house is now $1.3 million. The average property gained almost 12%, while prices of detached passed the $1.5 million market, an increase of 14%.
The realtors point especially to, “a resurgence in the higher-end market segments,” and forecast that by the time this strange year ends there will have been an increase in average prices, just like Covid never came.
Okay, so what gives? Marvin’s quite right in pointing out the obvious, even while he rots in the Old World. Canadian unemployment is in double-digits and will stay there all year. Eight million on pogey. A million mortgage deferrals. GDP hollowed out 12% in one month. Public finances shredded (more on that tomorrow). Empty downtown streets. Travel and border restrictions. Mandatory masks in Toronto. Social distancing. Emergency powers. Why were nine thousand people in one city confident enough to buy houses averaging a million bucks each? Are they not paying attention?
Nah. Of course not.
Regular addicts will have noted this is exactly what the pathetic blog told you would happen. During 100 days of viral terror, lockdowns, quarantines, bumwad-hoarding and non-stop panic from the Coronavirus Broadcasting Corporation real estate sales plunged and prices dipped. Showings stopped. Sellers retreated. The market croaked.
But that was followed by the unleashing of pent-up demand since, after all, Covid came right at the start of rutting season, when hormonal young couples paw the earth, flare their nostrils, bellow, rear back and thunder towards open houses. What normally happens in April this year juiced June. Meanwhile two more factors assured a big jump in prices as sales resumed. First, available listings have crashed – down year/year in Toronto by a third (and similarly in Ottawa, Vancouver and Montreal). More demand and less supply means a surge in values. Second, Covid caused central banks everywhere to crush interest rates and add stimulus to a collapsing economy. So now we have five-year fixed-rate mortgages at just a hair above 2%. Cheap financing means more borrowing, which escalates property costs.
This explains the current situation. What lies ahead?
Here’s what we know so far:
- Mortgage deferrals will end. No way do the banks want to forego interest on $180 billion in home loans any longer than they much. This means hundreds of thousands of people who have made no payments must start again this autumn. But jobs are slow to return, suggesting many people may bail. More listings coming.
- CERB can’t last forever. The feds cannot afford this level of support. It, too, will taper away as 2020 draws to a close. Less income support means more tough choices for households without employment. Expect an increase in listings.
- The pandemic will ease as time passes. Slowly, albeit, but the outcome is known – a slowed rate of infection in Canada, better therapies, maybe a vaccine. Potential sellers will lose their fear of opening their homes to buyers. Yes, more listings.
CMHC and others think like Marvin. The negatives for housing are stronger than the positive (which is cheap money). After the deluge now, real estate will pause and dip until employment is restored. Maybe in 2022. That would mean this is an excellent time to (a) list your property and sell for big bucks to a greater fool then (b) use those funds to seriously trash debt.
Unless Covid taught you nothing.
Please Help Support BeforeitsNews by trying our Natural Health Products below!
Order by Phone at 888-809-8385 or online at https://mitocopper.com
Order by Phone at 888-809-8385 or online at https://www.herbanomic.com
Get our Free Ebook, "Suppressed Health Secrets" with Natural Cures THEY don't want you to know!
Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!
Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.
pathogens and gives you more
energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser! Cleans out toxic buildup with oxygen!
Organic Hemp Extract (CBD) - Full Spectrum high CBD (3300mg) hemp extract eases stiff joints, relieves stress and more!
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover - Reduces Smart Meter radiation by 96%! (See Video)
Immusist Beverage Concentrate - Proprietary blend, formulated to reduce inflammation while hydrating and oxygenating the cells.