http://www.greaterfool.ca/2017/08/03/the-landing-6/
(Where'd this image go? Present in the preview, absent in the post...)
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What does it mean?
Clearly that the market’s cascading towards a bottom not yet in sight. As the real estate boss said when releasing the sour stats, it ain’t the result of a foreign buyer’s tax, but rather because the locals – who thought houses could never falter – are freaking out.
“A recent release from the Ontario government confirmed TREB’s own research which found that foreign buyers represented a small proportion of overall home buying activity in the GTA. Clearly, the year-over-year decline we experienced in July had more to do with psychology, with would-be home buyers on the sidelines waiting to see how market conditions evolve.”
Psychology made the market go up – FOMO, the fear of missing out. Now psychology’s created a collapse – the fear of not getting out. It’s human nature on display. We buy high. We sell low. Most people lose because they act like lemmings. Cute but moronic.
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Equally threatening are skinny appraisals. With rapidly changing market conditions, lenders are being excessively cautious as they evaluate the amount of financing they’re willing to put on a house that lost 17% of its value in the last three months, and may lose 20% more by Thanksgiving. Many buyers are coming up short by tens (or hundreds) of thousands – unable to close deals they entered into with no financing condition.This disorderly collapse of transactions the realtors already counted and included in their stats will shock many people in the months ahead. It is the ugly underbelly of the greed, speculation and house lust that created 30% monthly price gains. If you are a defaulting buyer or a jilted seller, understand there’s no good outcome.
This week’s market report sends a clear signal to purchasers yet to close. You’re reaching for a falling knife.
I do miss reading " the Mayor of Milton" comments to Garth's blog, always would put a smile on my face