- the source for market opinions


August 14, 2016 | The Misleaders

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.


Paul’s a brutal little guy. “Got in to a Twitter debate with Dan Morrison the other night,” he says. Morrison is head poohbah of Vancouver’s real estate cartel, where he knows the eyes of a believing world are upon him.

“He finally acknowledged after me harassing him and beating him over the head that Zolo’s data is the same MLS data from which REBGV also derives their stats,” Paul says, referencing this site. “Point being, that real estate boards are in the business of creating sales activity. If any press got hold of these numbers they wouldn’t be reporting that prices are ‘still rising’. Quite the contrary, prices have been falling for about three months in the single family home segment of the marketplace…”

What Zolo does is analyze data (like Zillow in the States), and come up with an indy appraisal of trends in a marketplace. So while the real estate board relentlessly tells you how much prices have increased over a point in time 12 months previously, Zolo (and Zillow) identify the market momentum. After all, if you’re about to spend $2.8 million on a piece of crap like this…


…it sure helps to know whether or not the market is rolling over before you write the deposit cheque. As detailed here, and nowhere else that also features compromised canines and sexual innuendos, detached home sales from Van city to Richmond, Burnaby and North Van were already in a steep sales decline before the Chinese Crash Tax of July 25th. The Sales/listings ratio has basically been halved in the past three weeks.

Anyway, here’s what Zolo makes of this market, as of Sunday. First, the raw numbers on price, which is almost the polar opposite of what Dan Morrison and his realtor buddies are telling people:



And, yikes, look at this graph below. Zolo calculates that the average detached house price actually peaked back during the March madness at about $1.5 million, and has lost an effective $400,000 since then, settling into the $1.1 million range. So, pity your poor BIL who walked into a deal last winter and has been telling you for for the last five months what a financial genius he is. Yeah, right. Fail.



And below is a classic little picture of why prices decline (other than elected idiots). The number of listings starts to inch higher, just as sales trend lower. At a certain inevitable point the public meme shifts from “But if we sell, what will we buy?” to, “Holy crap, we’d better cash out of this insane market before the greater fools catch on.”

As you can see, she’s started…



On July 11th this pathetic blog issued its final warning about a market clearly entering the next phase. “Get out” was the title, aimed at those who have seen a windfall profit bestowed upon them by the irrationality, emotionalism, nesting fetish, peer pressure, FOMO and house horniness of others. People who’d made an unfounded capital gain, those about to retire with the bulk of their net worth in one house, or new buyers who could easily be plunged under water by a 15-30% market decline, possibly lasting years – the message was for them.

Dan Morrison was telling them something entirely different. It’ll be interesting to see the score.

$ $ $

Anyway, be happy you don’t own houses in both Vancouver and London. As predicted, the Brexit fallout is making some people wonder why they ever voted the country out of the biggest, most beneficial free trade zone and economic union on the planet.

In July demand, sales and prices started into a slide of unknown depth or length. Sales are now in the fastest decline since the credit crisis of 2008. The pattern is like YVR. Trades were down about 20%, while average prices wobbled higher on thinning trade – until the last couple of weeks, during which London prices started to decline at the rate of a thousand pounds a day.

Consequences of Trumpism. Who knew?



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August 14th, 2016

Posted In: The Greater Fool

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