The condo wars in downtown Toronto yesterday may or may not have meant something. The chanting, the cops, the jabbing elbows, the TV cameras, the melee – it might all have been orchestrated, or at least enhanced, by the developers of the unbuilt 40-storey slab called X2. I have my thoughts.

This much is known: By confusion or design, three separate lines of panting buyers (some may have been plants) formed in proximity to the condo sales office. Some people camped out for a week. Some arrived at 11 pm Tuesday and stayed the night. They fought. Most of them were billed as real estate agents and brokers, but that’s a stretch.

And it was all demeaning. The developer showed a face at 8 am and started handing out numbers, giving the cold, wet, disoriented, pavement huggers the right to come back Wednesday night and buy a unit, or ten, while they last. Meanwhile both prices and floor plans were yet to be released. So nobody actually knows what they’re buying.

“I was here for 10 days,” one condo refugee told the media. “My friends helped pick up my kids from school. I know some agents have a baby, three months, seven months, they carry their baby in the line.”

Pathos on Bloor Street.

It had all been wonderfully pumped in a viral marketing campaign that had “early bird” and “VIP” registration forms on scads of web sites and Tweeted to the masses. Without a doubt, the developers timed everything – the lineups, the tipped-off media, the units release, the pre-registration blitz – to maximize chaos, attention, exclusivity and sales.

However it all would have failed without the necessary ingredient of human greed. People scuffling on the sidewalk to obtain something they perceived had value. Agents lured by the X2 promise of big commissions. Flippers and speculators and frenzied first-timers.

This may mean nothing. But I quite doubt it.

So, weary of the human condition, I will hand over the rest of this post to two visitors, from the planets GTA and Vantown.

B.N. in Thornhill writes:

Past month.  Our neighbourhood, 3 houses sold for approx. 10% over asking price.  We’re talking about 25 year old modestly upgraded homes that are going for 650-800K.

We looked at a house yesterday that was listed last week.  Entertaining offers tomorrow.  listed at 740K, will bet my right nut it’s gonna go over 800K.  Sorry, no home inspection allowed.  What would an inspector find anyways?   Wife wants the house, I want a drink.  Current residence is paid off and at todays ‘take what you want’ rates were good for a 1.5M house.  Wow, I’m rich.  Wife doesn’t understand why I’m hesitant over a possible 50K mortgage.  “Honey, I’ve spent more time inspecting  a $5000 used car than this three quarters of a million dollar house.  What part of this process seems normal to you?”

Plan a- Want to sell and go rent for a while.   Darling wife/3 kiddies aint gonna let that happen.

Plan b- there’s a raging inferno out there, where’s the fire department.  Isn’t somebody responsible for putting this out of control mess out?  What?  the fire dept. is pouring more gas on the fire?  clean up in aisle 8, calling mark carney.  that was so sweet of him to ‘remind’ everybody that they’re responsible for their debts.  how did that work out for greenspan/bernanke?  what?  you can’t just walk away from a house in Canada?  hello debt slave lifer.

Plan c-wait until our house hits 1M, sometime next year I guess.  Sell, buy an entire neighbourhood in florida, california, (hate having neighbours that I can see/hear) and invest the rest in goldman sachs.  I hear they’re taking over the U.S treasury dept and the federal reserve.  Oh wait, they already own both.  my bad.

Plan d- sit back, relax, and suffer a bit more in your 2100sq/ft house and move up another 1000 sq/ft when things calm down (when it crashes and burns?).  oh the horror, how will we make do in our 25 year old, paid off, 2100 sq/ft house before we can really live it up in our new, 25 yr old, 3000+sq/ft house?

Frightening how ridiculous it all seems when you actually read it back to yourself.

Mark in Vancouver writes:

I have a hypothesis about the CMHC.  I’ve been saying for years that Vancouver left market fundamentals behind around 1986-87 but I had no indication really of WHY that happened.  Then, about a month ago I learned that the CMHC only started offering MBS (mortgage backed securities=mortgage insurance) in 1986.  So now I’d like to compare market volatility/rise in the pre and post 1986 time periods.  I can’t find any Canadian graphs that give useful information before the ’70s so there’s not a lot of material to look at but you CAN see a distinct pattern in many Canadian cities AFTER 1986, there is a sharp rise which doesn’t appear to reflect other factors and more importantly the prices have yet to return to the pre 1986 baseline.

The upshot, if I am correct is that the CMHC has had the opposite effect of their mandate, they’ve made housing less affordable for Canadians AND it means that many Canadian markets have a lot farther to fall than most people believe is possible.

Right click and 'View Image' to enlarge Mark's chart
of house prices in Vancouver. Don't toss your cookies.