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The big lie
Mike says he doesn’t get it.
“I follow on a somewhat daily basis the blogs, newsletters, Twitter Feeds and other similar media of a sample of 32 realtors in the Okanagan Valley,” he says. “Not one of them has shared or discussed ANY of this news with their “valued clients” while still toting themselves as real estate experts and professionals!”
And what news is that?
“There are over 12 stories in the MSM now over the past few weeks of large institutions (CMHC for example) now calling the housing market at least 30% over valued and today from Germany calls of 63% over-valuations.”
And the 32 local real estate brokerages?
“All of them are quick to share and report positive and favourable news from the media, CREA and their local RE Boards. This is the only industry in the world where “licensed regulated professionals” can constantly get away with this BS without any fear of retribution or consequence!”
Mike’s right. The unregulated, undisciplined, unethical, unprofessional DNA of the real estate business is in fine display right now, as much of the nation clearly heads into a potential housing spiral. At a time when the moist virgins should be beaten off with a stick for their own good and sellers encouraged to price their houses hard and realistically lest they be trapped, we’re being force-fed the usual Re/Max marketing swill about luxury houses in hot demand and 2015 looking like another robust romp.
Personally, I know how serious this is all getting when CBC Calgary asks me to be on the morning show to whack the locals. (Speaking of which, sales are down 20% and listings up 45%. Not good.) Although local realtors dare not speculate on the effect looming oil patch layoffs will have on over-leveraged, testo-drenched, McMansion cowboys, I’m happy to.
Anyway, I sure hope the message is getting through. Just look at this stuff from the past 24 hours, as the media starts to sound a lot like this pathetic blog.
Here’s a Bloomberg headline out of New York: “Canadian housing bulls are joining real estate doubters as warnings and oil collapse sink in”
Here’s that report from Germany’s Deusche Banks’s chief international economist, Torsten Sløk: “Canada is in Serious Trouble.” Homes here, he says, are 63% overvalued in general and 35% too rich compared to incomes. Worse, a real estate plop would hit out condo economy hard. Look at how many more people here work in construction, than in the US:
Here’s Global News (of all people), saying this: “Cutbacks in the oil patch have been the first shoe to drop from a collapse in oil prices. Alberta’s real estate market now appears to be the second, with new sales data pointing toward a chilly spring in Calgary and elsewhere in the province.”
Here’s another Bloomberg headline, by the way. This story ran last night: “Oil Export Plunge Signals Canada Economy Running on Empty.”
And the economists? Pfft. They might as well be given collars and made honourary Blog Dogs. Says BeeMo senior economist Sal Guatieri: “Fissures are starting to show in Calgary’s housing market.” Adds Calital Economics chief North America economist Paul Ashworth: “You have a collapse in oil prices which is going to hit that industry. You have a housing market that could fall over at any point.”
Even the South China Morning Post is moaning about how the slide in our petro-currency has wiped out the profits from an investment in Vancouver: “Consider the common scenario of a wealthy Chinese purchaser of real estate in Vancouver. A detached house bought in late 2007 should have represented a spectacularly successful investment, with average prices rising from about C$850,000 to a whopping C$1.34 million today. Yet for some buyers, that 50% gain will have been virtually wiped out in Chinese yuan terms.”
So, there you go. Our biggest commodity is worth less than half what it was. We’ve achieved epic levels of personal debt selling each other inflated houses. A quarter of the economy rides atop a gossamer real estate bubble. Interest rates (in the US first) will start rising this year, ending a six-year borrowing orgy. Our trade’s now in deficit after six months running of falling energy exports. In fact, exports are tumbling in nine of 11 categories. And as I told you days ago, confidence is ebbing. Almost 70% of people Nick Nanos surveyed think housing will flatline or fall.
And Re/Max?
“With the New Year having only just begun, the housing outlook for 2015 across the country is generally bright. The average residential sale price in Canada in 2014 was $406,145; that’s expected to increase this year to $416,300, according to the Re/Max 2015 Housing Market Outlook Report.”
OMG.
Source: http://www.greaterfool.ca/2015/01/08/the-big-lie/
