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Veteran fears issues plaguing market may be long-term

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Justin da Rosa | 14 Mar 2016, 08:15 AM Agree 0
A veteran agent in one of Canada’s struggling markets: “I’m not as optimistic that this is going to be short-term”
  • Byron McDonald | 14 Mar 2016, 11:49 AM Agree 0
    Well, there certainly is one thing that is not the same as before; interest rates are at historic lows. The unwinding / deleveraging will take longer as a result.
  • Scott Simmons | 14 Mar 2016, 12:16 PM Agree 0
    Our market went into a long slump after the 2008 economic crash and I know being a Realtor in a downward trending market is very challenging. The sellers will go through 5 steps while selling in a soft market; Denial, Anger, Bargaining, Depression and the final step of Acceptance. One does not really want to be the first one to get the listing. It's probably best to be the 3 or 4th Realtor to list it. One can always tell the anger part and you really do not want to have the listing then.

    The best thing organized real estate can do is to give accurate market stats. In a soft market listings stagnate and the sellers want to re list to freshen up a listing. The AB boards should adopt aggregate days on the market. The DOM should be a running total of all the days on the market and take away the ability to re list. Re listing is the curse of a downward market. It will mask the true story of how bad it is. Unless the public and Realtors are willing to face the real numbers the market will languish longer than need be.

    The market will change, it just takes time, even on our sleepy little island that had been so slow for long is now seeing multi offers. The good news is so many agent will quit that when the market does come back those that make it will be in a good position. Good Luck to all in AB it's going to get ugly but hang in there.

    Cheers Scott Simmons
    Salt Spring Island BC
  • Dealmaker Toronto Canada | 14 Mar 2016, 04:56 PM Agree 0
    I think the 5 Steps you posted Simon are the steps you go through when you have incurable cancer.

    No one feels any sympathy for people in Alberta.

    They made alot of money over the past 15 years and if they didnt save any of it, that is their fault.

    Even people working at Tim Hortons were making money above the average in Canada.

    Suck it up Albertan's. This is the real world.
  • Realtor For The People | 23 Mar 2016, 04:31 PM Agree 0
    We are all in a slippery situation across Canada. Alberta is going through a tough time & we should feel sorry for anyone in a difficult situation. I feel sorry for those people because much as the previous naysayer says "no one" feels sorry for people in Alberta he is not speaking for me, I beg your pardon but regardless of whether they were earning well or not, the cost of living was inflated too and no one deserves to suffer after working so hard for a better life!

    We saw it in Toronto in the 80's, a different situation, same results!

    Interest rates went so high people did not qualify to renew a mortgage on their own home! Many lost them to the big banks under power of sale and just had to walk away with nothing, others struggled to hold on thinking it would be a quick recovery when in fact it took almost 20 years in some areas for home prices to recover to what they had been under the old Trudeau Government and big industry walked away and took thousands of jobs with them.

    People in British Columbia have been experiencing a rough time for a long while, now Alberta's situation is one we all need to find empathy for as suffering is suffering, regardless of how it happens. They now face severe decline yet housing prices In Toronto are crazy.

    We will see this run a mock here in Toronto & the surrounding areas very soon if the new Trudeau Government doesn't start to tighten the rules on banks & trust companies & their employees, we will all pay higher prices because the bidding wars are already out of control & buyers are plunging in to firm deals despite "some of the more professional agents" advising them not to. Because "SOME" Mortgage Brokers/Bank Employees are telling them "oh no your fine or Greedy Builders who are inflating the prices to what they project a home might be worth by the time its built and in panic people are lining up to sign their name on the dotted line with no really dependable forecast on what the future may bring.

    But ever wonder what happens when a unsuspecting trusting purchaser buys over market & it does not appraise or he cannot close because in an instant he lost his job?
    A buyer with 15 - 20% down payment (which is substantial) is now expected to come up with the difference if the property appraiser lower and in Toronto especially he is also expected to shell out for a "Ghost Tax" which is absurd, (they double tax everyone who buys there, why because they can) Something else that should be STOPPED immediately!!!
    If poor trusting unsuspecting Buyer can't suddenly make another $40-$100K magically appear he is waiving goodbye to a $50,000 or more down payment most likely be it to a builder or a Seller.
    Why because the Builder or Seller will quickly resell at a cheaper price because the Buyer failed to close & in the case of a resale that Seller relied on his firm sale to go on and purchase his new abode. The Builder/Sellers solicitor knows the deal is dead, he can now instruct the Builder or the Sellers Agent to procure another offer. The Builder/Sellers then accept the first new offer they get, generally much lower & they keep the original Buyers deposit to make up the difference because The Buyer went FIRM & took a chance based on bad advise or pressure.

    No one accepts responsibility when the house price gets so inflated & it does not appraise. The only people that suffer are the poor unsuspecting Buyer who in the case of a resale, despite the agents advise, chose instead to listen to the Mortgage Broker/Banker because he/she was the one getting him/her the money and of course the supposedly overpaid real estate agent who does not get paid one penny after maybe showing 30 or 40 homes, possibly sitting through a 4 - 5 hour home inspection & drafting the contract and presenting & negotiating on his/her buyers behalf and driving back & forth for hours, sometimes over several days. (We have a legal obligation to inform but we cannot refuse to present an offer & of course everyone thinks it is the agents that are pushing these buyers to go firm but it generally is not, partially it is fear that "if I don't get this one, I'll never get in to the market" because it is getting so out of control but the bigger culprits are unscrupulous mortgage brokers/banks & builders who push people to go out on a limb!

    Mortgage Brokers/Bankers assure these buyers "the money is in the bank" so in the heat of the moment they overpay & then lose everything. Builders put unrealistic pressure on people because the new home won't be ready for a year or more so they'll have loads of time to sell their existing home but at what price?

    Should we feel empathy for anyone who is in a bad situation, you bet we should, because everyone needs shelter, a place to call home & if they need to be in that particular local right now they will generally over pay!

    The new Trudeau Government has to step in and quickly to tell banks, mortgage brokers & builders they must insist on "conditional deals" where there is less than 50% down payment coming from buyers own personal cash. This would certainly calm the flames that are firing this market place & bring these bidding wars to a quick halt, it would make the playing field a lot safer for the average Buyer & hopefully guarantee that agents working all hours to get a home for their clients/customers may actually get paid. Will anyone loose, of course someone will always loose as the economy is a risk & the scales can tip at anytime for anyone, someone may actually just get sick & no longer be able to work therefore they will not have the income or as has happened in Alberta, the jobs just disappeared.

    Regardless of what causes crashes, the effects can be devastating for families, relocation is usually the only option but then finding work again becomes another nightmare or traveling great distances on over populated highways for hours to get back & forth between work & family or worse still having your family located somewhere that you can only visit on weekends.

    This type of thing will continue to happen & most of the time it is not without some big Government creating a large problem in the name of profitability. As a child I saw my father one weekend out of every six for over 4 years of my young life as the British government moved a lot of the industry out of Scotland in to England & the dent jobs went with it. So in order to get work he had to go there as sitting at home collecting welfare was not part of the man he was. Rather than disrupt our little lives and take us out of school & my mum having to give up her job, he lived away from home in a rooming house & sacrificed for us but it was a high price to pay for something that was not his fault.
    We all need to lower our expectations, look around at what is happening world wide as countries compete for world trade. Fewer real good paying jobs are available because of such corrupt policies wherein we have to sometimes pay double the cost of something that used to be made around the corner because it is now made halfway around the world or the taxes on the item are higher than the items cost or we are gainfully employed one minute with good wages and benefits the next we are encouraged by government to become Independent contractors without benefits so the fat cats in Industry get off the hook as far as taking care of their employees and the rich get richer and the middle class gets poorer. Pretty soon, if things don't change, there will only be two classes again, as it was before Unions and the rights of workers were affirmed.

    It all sucks and some are suffering more than others but I hope we never loose our compassion for anyone who has lost what they worked so hard to get regardless of where they live. These Governments have to realize it is time to start taking care of their own!

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