Sunday, December 30, 2012

Vancouver Real Estate to collapse in 2013

Now when I say collapse what I really mean is a gradual decline of prices over 2013 and 2014 of roughly 25%.

Home and condo prices / sale records in Vancouver have taken a dive in 2012. Prices for single-family homes, condos and townhouses are down 4.5% and sales are down approx. 25%.

Normally the Vancouver housing market sells 88,000 homes per year. That is the average sold from the 2002 to 2011. The average typically doesn't fluctuate more than 5 to 10% above or below.

In 2012 sales dropped to 64,000 as of December 28th 2012. With only a couple days to go before the end of 2012 we really don't expect Vancouver's home sales to get above 68,000.

Especially when buyers aren't that interested in buying right now, due to combination of new mortgage changes, interests rates and the fact that almost everyone in the Vancouver real estate industry is predicting a collapse in 2013.

So here is the thing... Lets do some math. Lets say they did manage to sell 66,000 before the end of 2012. That means Vancouver's home sales are down by 25%. That is a huge drop!

To be fair the Vancouver real estate market, especially the condo market, has been in a slump since 2009. They've been kind of waiting around, half expecting a crash, but nothing really happening that would become the tipping point.

Something like a recession, to push the real estate market over the cliff. Instead its just been stagnated and in 2012 its even been in a slow decline as buyers have stopped buying.

To have a huge rapid decline, like a drop of 25 to 50% in the space of a year or two, you would need something bad to happen that would hurt the local economy. A fiscal cliff.

But it just isn't happening, which is why I am currently predicting Vancouver will continue to see a gradual decline well into 2014. I don't think we will see a huge decline in the Spring of 2013. I think we might see a sharper decline in the Autumn of 2013...

But I think Vancouver's home prices will overall drop about 20 to 25% by the beginning of 2015, and I think it will then suddenly drop an extra 15% in 2015 as Canada is hit by a recession.

Now you might say this is a pretty radical and detailed prediction for the future of real estate in Vancouver. And you are certainly free to think and say it.

But my predictions are based on pattern observation. I see a pattern developing in Vancouver, and I think that pattern shows a gradual decline until a recession in 2015.

To confirm, here is my precise predictions:

Spring 2013 - Sales slump. Normally Spring is the best time of year for real estate sales, but in 2013 it will be down on sheer volume and prices will drop about 3 to 6% compared to an all time high.

Autumn 2013 - Sales worsen. Inventory of unsold homes becomes worse. Prices drop an additional 4 to 7% by the end of the year, making the total for the year down 7 to 13%.

Spring 2014 - Pre Recession Slump. People keep expecting prices to level out and reach bottom, but prices continue to drop another 4 to 8%.

Autumn 2014 - Sales slow to a crawl. Starts to bottom out when prices hit approx. 24 to 29% below the May 2012 average price.

2015 - The recession hits Canada full throttle and prices plummet an extra 10 to 15% in 2015.

Now you might think this seems a bit extreme. But I should tell you that Vancouver's index price for single-family homes, condos and townhouses stood at $596,900 in November of 2012 – a drop of 4.5 per cent since hitting $625,100 in May of 2012 (the highest point).

All it needs to is for the average price for that index to drop another 4% to $575,000 by May of 2013. Or worse, to an average of $556,000.

And by the following year, May 2014 to drop to somewhere between $531,000 and $469,000.

I predict Vancouver's condo market will be the most effected and see the deepest slide in prices during the next 3 years. New condo builds will crawl to a stop by 2014.

How accurate my estimates are a matter of debate, but it will be interesting to wait and see if I am right.

Additional note, I am expecting one of two things in 2016.

Either prices will stay slumped, with only marginal 1% gains in 2017... Or a swift rebound of 4 to 8% in prices. But that will depend on how deep the recession is during 2015 - 2016.

I am expecting a similar slide in Toronto, but I don't expect it to dramatically effect prices in Toronto until 2014, and I am predicting the price changes in Toronto to be much more delayed and sudden. Gradual decline in Vancouver, sudden impact in Toronto.

Various other markets across Canada will also see varying degrees of gradual decline and sudden impact. I am predicting more gradual declines in Western Canada and these changes will spread eastward. When it reaches Toronto and Montreal the effect will be like an iceberg hitting the Titanic.

2015 is also when a huge surplus of condos will go on the market in Toronto due to new buildings that will be finished by that year. The surplus will be dumped on the market in 2015 and people expecting a crash in 2014 will have decided to wait a year, causing prices in 2014 to slump. When the Toronto condo market bursts in 2015 it will be sudden and dramatic, but not unexpected.

I predict condo prices in Toronto to drop 40% during the 2015 and 2016 time period and house prices to drop 20%. There will be a marginal (1 to 2%) rebound of prices by 2017.

Friday, November 16, 2012

Why I LOVE polished concrete

Whether you are building your dream home or looking to flip a house for a handsome profit, polished concrete is the way to go.

I first saw polished concrete and realized its potential when going to York University here in Toronto, Canada. One of the buildings had polished concrete walls and floors and it was smooth and shiny like marble, but without the expensiveness of marble.

I immediately envisioned whole buildings and even sidewalks with polished concrete. Everything shiny and smooth.

I think it really comes down to the fact that people like smooth and shiny things. Consider the following:

Stainless Steel

They all just scream luxury.

Lets say for example you want to purchase a table. Do you want a rough-hewn table that has never been polished or even sanded? Or a polished wood table which looks so clean you could eat off of it.

Check out the website for example. It has polished concrete floors, concrete countertops and they do a variety of residential and commercial work. So as a company they obviously know what they are doing.

If you browse their website and similar websites (or if you do a Google image search) you can see lots of images of the amazing things companies can now do with polished concrete.

For example, you can use pieces of other rock to polish into the surface and make the concrete look even shinier than a normal polish. By using quartz dust for example you can make the surface sparkle, by using marble dust you can make it literally look marble (or as I like to call it, "faux marble").

Another thing they can do, instead of dust, is use tiny chips of colourful rocks. Thus whether you use dust or rocks you can make different colours, shades or even a rainbow of different colours by overlapping various colours and grinding/polishing them into the surface of the concrete.

You can make designs, shapes, patterns and even mosaic-like artwork. It will be more costly for sure, but there is a lot of amazing things that can be done with building materials these days.

You could even, from a distance, make the floors look like polished wood and only up close would you realize its just the same colour.

And that is just the architectural playfulness. You can also make tabletops, coffee tables, kitchen counters, chairs, decks, balconies, columns...

Knowing me, I would probably make artwork and sculptures if I had an ample supply of concrete and a grinder to polish it with. Or even better, artwork that doubled as exercise equipment for parks so adults could do chin ups on it. :)

Oh I forgot pools! Yes, you could also make a pool. You just wouldn't want to dive in and bang your head on it. That is painful whether its concrete or not.

The example I've been using of Forrest Concrete is in South Carolina, but there are certainly lots of companies locally you might wish to check out.

In Toronto for example there is:

and a dozen or more other vendors. So yeah, no shortage of concrete polishing companies in Toronto.

So whether your home is a house or a condo you can certainly shop around and get something special for your home.

Or office! Doh, I forgot offices. Polishes countertops in reception or a desk with a polished concrete surface. Or a boardroom table. OOOOOOOOoooo!

Anyway, I think my point has been made. So many possibilities to create shiny surfaces that amaze friends, guests and clients.

Thursday, November 01, 2012

Mortgage Life Insurance

I think the title of this post is pretty self explanatory.

Basically what Mortgage Life Insurance is life insurance so that if you die, and thus cannot pay your mortgage payments, your family members can collect the insurance and the lump sum will be enough to pay off the remaining mortgage on your home.

Although in theory, you could just get a standard life insurance policy, with a big payout, enough to cover the mortgage and a little left over.

Except that the actual value of the mortgage goes down over time. Which means that in theory the cost of the insurance should also go down over time. Except that isn't how it actually works. Instead the premiums keep going up as the person gets older, even if they are in perfect health.

Thus Mortgage Life Insurance ends up being very profitable for insurance companies because the premiums keep going up and the payouts decrease over time. It is so profitable that many banks now sell Mortgage Life Insurance too whenever someone asks for a mortgage and the bank employee gets a commission every time they sell someone a policy. Some of it even verges on "Tied Selling", meaning they give you the mortgage and pressure you into the insurance to the point that you don't have any other choice.

1st Note: Tied Selling is illegal in many countries, including Canada.

2nd Note: Buying Mortgage Life Insurance is not mandatory when buying a mortgage. There is no laws requiring it. (In some countries bicycle stores are required by law to make sure you have a bell and helmet if a child wants to buy a bicycle. Because if the kid gets killed on the bicycle and they weren't wearing a helmet, the bicycle store can be liable for not asking if they owned a helmet. In theory they are supposed to sell you a bell and helmet if you don't have one.)

3rd Note: This should not be confused with Private Mortgage Insurance, which is meant to protect the lender against the risk of default on the part of the borrower.

When the Mortgage Life Insurance commences, the value of the insurance coverage starts off being equal to the capital outstanding on the repayment mortgage and the policy’s termination date will be the same as the date scheduled for the final payment on the repayment mortgage. Thus when the mortgage is paid off the insurance is likewise terminated. The insurance company providing the Mortgage Life Insurance calculates the annual rate at which the insurance coverage should decrease in order to mirror the value of the capital outstanding on the repayment mortgage. Even if the client is behind on mortgage repayments, the insurance will adhere to its original schedule and will not keep up with the outstanding debt if the person falls behind on payments.

Some mortgage life insurance policies will also pay out if the policyholder is diagnosed with a terminal illness from which the policyholder is expected to die within 12 months of diagnosis, but many will refuse to pay and declare the policy void. Insurance companies sometimes add other features to a Mortgage Life Insurance policy to reflect economic conditions, problems in the domestic insurance market and various domestic tax regulations.

The thing is that when it comes to actually buying Mortgage Life Insurance there are a lot of companies out there, and you don't know which ones actually will payout if there is ever a problem such as the policy holder being diagnosed with cancer and then their family being left out to dry with the insurance company refuses to pay.

Thus lets pretend for a moment you are considering getting Mortgage Life Insurance... Which company should you hire? How much should the premiums be? What are the guarantees they will actually pay out?

Well, the wisest answer is to shop around and ask. Compare prices. Don't be pressured with a big sales pitch or shiny one-time discounts (those are tricks to get you to sign up today).

Why? Because I honestly can't tell you which companies are the best. Although in theory you could research various companies online and try to determine which ones have a good reputation. Proceed cautiously and don't assume that just because its a bank trying to sell you the mortgage that they are any more reputable. Banks are in the insurance business to make MONEY. And that person trying to be all friendly and selling you the policy just wants their commission for kissing your behind.

Now you might think, oh what the heck, just get the first policy you come across. No. Proceed cautiously and wisely. Especially if you already have health problems and the insurance company may try to refuse to pay out to your relatives after you are gone.

Note: Car dealerships do the same thing, selling you insurance car loans. Buyer beware.

Tuesday, August 21, 2012

Amazing Dream Kitchens to Die For

Okay, maybe not worth dying for. After all if you're dead, you can't enjoy the beauty of these interesting and inspired kitchen designs. As kitchens go they're pretty amazing.

Of course, what is the point of having your dream kitchen if you don't know how to cook or bake?

Yes, you could host really amazing dinner parties... again, assuming you know how. Or hire a caterer. But what you really need is private cooking lessons in a topic of your choice. Let's pretend for a moment you really like Italian food, so you could get yourself Italian cooking lessons in Toronto. Makes perfect sense, right? Or if Italian isn't your thing you could get cooking lessons in Toronto on the topic of your choice.

Wednesday, August 01, 2012

What the heck is a FHA loan and why are Americans defaulting on them?

As a Canadian I have to stand in ABSOLUTE AWE of the American mortgage system.

There are a "ridiculous" number of mortgage options out there. There are many options here in Canada too, but its much more regulated by the Canadian government to prevent booms and busts of the housing industry.

In the USA however it seems to me like its a bit of 'Wild West Free-for-All'. Mortgage lenders are like hired guns, bankers and thieves all at once. They're offering many different options and they're all looking to make a fast buck, often by targeting a percentage of people which are higher risk but can be charged higher interest rates.

In recent year the American mortgage market appears to finally be stabilizing, but just so long as you ignore loans backed by the Federal Housing Administration. FHA loans are federally insured loans which, you guessed it, are covered by Washington in the event of foreclosure or serious delinquency.

While other mortgage loans are either bank held loans by financial institutions or insured by Fannie Mae/Freddie Mac, the FHA loans are operated separately and have very different rules governing who can get a FHA loan.

Lets start with some numbers:

Bank held mortgage delinquency is down 39% in the last year (from the 1st quarter of 2011 to the 1st quarter of 2012).

Fannie Mae and Freddie Mac delinquency is also down 14.7%.

Sounds great, right? Wait til you see the FHA numbers: 26.6% MORE delinquencies.

Furthermore FHA loans are growing in popularity. The reason is because they are much easier to get. All you need is apply for a loan of "less than $729,750" and qualify to have a debt-to-income ratio below 43%*. There are a couple other minor things you have to jump through hoops for, but otherwise its one of the easiest mortgage loans to qualify for in the USA even if you have had past debt problems.

* Actual number varies.

In one way FHA-insured loans are a good thing. They are keeping the American housing market stable for the moment by allowing people to buy or refinance their homes with less fuss.

But on the other hand FHA-insured loans are increasingly falling into foreclosure or serious delinquency, moving in the opposite direction of loans guaranteed by Fannie Mae and Freddie Mac or those held by banks, which are all showing signs of improvement.

The scary bit is that American taxpayers could ultimately be on the hook for FHA's growing number of troubled mortgages. The agency's finances are already on shaky ground, and additional losses from loans going sour could prompt the need for a federal bailout.

"We can't escape this one," said Joseph Gyourko, a real estate professor at the University of Pennsylvania's Wharton School. "This is an arm of the U.S. government." If a large enough share of the government-guaranteed loans, are delinquent for 90 days or more then we will see a jump in foreclosures which could prompt a federal bailout.

Note: The FHA itself doesn't provide the money for loans. It just insures them in the event that people fall into delinquency. Its a bit like having a co-signer on your mortgage. If you stop paying your mortgage, the co-signer is the one who ends up paying for it and eventually the home is foreclosed if the homeowners don't catch up on their payments.

Part of this problem isn't just the people applying for the mortgages. Its a few unscrupulous companies which are selling FHA-insured loans and are taking advantage of the less strict rules for approving mortgages.

Which begs the question, will be having another real estate bust in America in a few years from now when and if the FHA-insured loans cause a federal bailout? Or will such a bailout just be a band-aid measure which keeps everything afloat?

As to why Americans are defaulting more often on FHA loans my guess is its because they were given to people who probably weren't ready to be purchasing a house.

Wednesday, July 25, 2012

How is it possible that Miami condos are cheaper than Toronto's?


How is it possible that Miami condos are cheaper than Toronto's?

When browsing condo websites (a hobby of mine) its always fun to check out what is available. Some of the condos in Miami are dirt cheap compared to the prices in Toronto.

The median sales price of a condo in Miami is $160,000 (stats from

That is pretty dirt cheap if you know anything about the ridiculous prices in Toronto which have been inflated by foreign investors.

The average sales price of a new condo in Toronto was $432,256 in June 2012. Existing condo sales averaged $364,597 in June 2012. So... basically you could buy 2 condos in Miami for the cost of 1 in Toronto and still have money left over.

But it is also fun to explore the websites that specialize in LUXURY condos. eg. Condo Sunny Isles is a good example.

Now with respect to luxury condos the prices can be pretty ridiculous. Think between $500,000 and $40 million. Yes, that is correct, $40 million for a luxury condo in Miami. For that kind of prices you have to imagine a place that comes with its own private indoor pool, tennis courts, etc...

The example I am looking at is:

Miami Beach, FL 33139
11,031 square feet + 6,31 in extra lot size (parking, etc).

The place apparently comes fully furnished, marble floors, private pool on the balcony, access to the condo's various facilities (tennis courts, etc, but they're not private)...

But the funny thing is I don't think its worth "$39 million". For that kind of money a person could buy 13 smaller condos worth $3 million each, basically the whole floor of a condo building... but why would ANYONE need that many extra beds and kitchens?

Or alternatively you could buy 13 different condos in 13 different cities (Paris, London, New York, Tokyo, etc) and rent out half of the condos and then move from one condo to the next every 2 months. Just because you can. Sheer silliness.

I think you would have to REALLY love marble floors to want to spend that much extra on a single property, because lets be honest, its all the marble that has made that property so dang expensive.

And its completely unnecessary. I can see spending extra on a house that has beautiful ivy on the exterior of the building, but spending a obscene amount extra just so every room can have marble floors? Pfff!

I can only just imagine the kind of ridiculously rich person who would buy such a place. Probably the kind of person who bilked the American government out of millions during the bank bailouts and then got an annual bonus in the 10s of millions.

RBC claims Toronto housing prices will cool, not crash

Pundits and soap box real estate experts (myself included) are concerned (excited) that the Toronto real estate market might crash.

The research department at Royal Bank of Canada meanwhile has released a new report claiming that Toronto housing prices will go down, but that it will only be a cooling effect and not a crash.

This is to be expected. No big bank would EVER go on the record and predict a crash. Such a prophetic statement could be either self-fulfilling (cause real estate investors to pull out in a hurry, thus sparking a crash) or damning to the bank's reputation when said crash doesn't happen.

My point here is that RBC could know that a crash is coming and is safe-guarding itself but saying it will be a cooling effect and doesn't want to predict a crash in case they turn out to be in error.

I also see other interesting headlines like "Toronto housing prices up 23 per cent since 2008" in the Toronto Star and "BMO sees strength in commercial real estate through 2013" from CTV.

I always find it funny that the banks and mass media often provide mixed messages which investors then need to interpret. All of it is essentially "spin". Its glossing over the hard numbers and putting a friendly audience message out so that people don't panic and instead weigh their options carefully.

Which isn't such a bad thing. People SHOULD weigh their options carefully. Its the wise thing to do.

But I also believe Torontonians should be made aware of the vast numbers of overseas investors who have purchased up large swaths of Toronto's housing market, especially in the area of condos currently being built.

And I also think people should be aware that when the majority of those new condos hit the market in 2014-2015 prices are going to dip and dip BIG due to way too much supply and not enough demand. (For more details on those numbers click on "Toronto Real Estate" above to browse my other posts regarding the Toronto real estate market.)

In semi related news I am renewing my efforts in My Quest for a Condo. I took a break there after all the media fuss from the National Post and CBC attention (it kind brought out the crazies with really weird offers) and I've been super busy working and enjoying my Summer. Nevertheless I think enough time has passed and its time to start trading up again.

Tuesday, June 19, 2012

The Most Expensive Places to Rent an Apartment

Did you know Toronto is one of the most expensive places to rent an apartment? In Toronto the average price of a two-bedroom apartment is $1,259 (as of May 2012).

Seriously, its up there.

True, its no Tokyo or Hong Kong, but its still pretty pricey. Lets run down the list for a second...

Note: The following list is a composite list which also takes into account other factors like "cost of living" and the price per square foot. Figures are from the ECA consulting group. (All prices are in USD.)

$4,352 per month for a two bedroom apartment, average.
The capital city of Japan has a notoriously high cost of living. Its one of the reasons I went to South Korea instead when I was teaching English overseas. Tokyo has been on the list of most expensive cities for a variety of topics (not just apartment rentals) for many years. Its the result of super high demand in central Tokyo. Its cheaper in satellite cities further from the center.

$3,500 per month for a two bedroom apartment, average.
You might not think Russia's largest city should be in the second spot on the list of most expensive cities to rent. Its because this Soviet city is also known for being home to a large number of billionaires and it jacks up the average dramatically, but don't expect to find anything much cheaper. The prices are high for other reasons too, but mostly its the billionaires (and possibly their mistresses).

Hong Kong
$2,830 per month for a two bedroom apartment, average.
China's economic growth has been red hot in recent decades and Hong Kong has become a world mecca for trade and commerce. That means lots of rich visitors looking for places to sleep and they don't want to stay in a hotel (which is even more expensive if you're there for multiple months on a contract).

$2,824 per month for a two bedroom apartment, average.
Old London town means you'd better have more than two pence to rub together. Like Hong Kong jolly old London is still a top location for business and commerce in Europe, and its a mecca for many rich expatriates who visit the United Kingdom regularly. Space in London is at a premium and the prices keep going up.

$2,810 per month for a two bedroom apartment, average.
Singapore is a popular tourist and business destination and housing prices definitely reflect the influx of tourists, business people, workers and strong economic growth.

Abu Dhabi
$2,500 per month for a two bedroom apartment, average.
The United Arab Emirates is synonymous with wealth nowadays. Not so much for vacations although that is growing. Its the business of oil that has caused this place to have soaring rental prices in the past decade. Abu Dhabi beats Dubai when it comes to the cost of apartment rentals. Both cities have seen a small decline in rental prices over recent years, but this garden city of the gulf is expected to continue to see growth (and periods of decline) depending on the fluctuation of oil prices.

$2,390 per month for a two bedroom apartment, average.
Paris used to be one of the most expensive cities for rentals, mostly due to artists, romantics, tourists and so forth... but apparently romance is on the decline. The average price is 1,650 Euros, which fluctuates a bit.

San Francisco
$2,100 per month for a two bedroom apartment, average.
Lets ignore that San Francisco is the future fictional home of Star Fleet Academy and Earth's government... that is after all, just fiction. However when you consider San Francisco's proximity to the Silicon Valley and it being home to many of the top technology companies in the world I guess you really can't be surprised by its high cost of living and rentals.

New York City
$1,359 per month for a two bedroom apartment, average.
Frank Sinatra's favourite city to sing about is a financial mecca, but its also crime ridden and has its share of poverty. A New York City apartment isn't even in the top 10. Its #17 down the list. Suffolk-Nassau on Long Island is more expensive at $1,592 per month. While the rentals in NYC are more expensive than the rest of the USA (ignoring San Francisco) its comparatively cheap when contrasted with Tokyo. Within NYC Tribeca and Soho are two of the most expensive, and Harlem is one of the cheapest. Many apartments in Manhattan are rent-controlled as a method of keeping them more affordable so maybe this explains why NYC is so low on the list.

(Ignoring Cost of Living)

Europe: Netherlands, Amsterdam; Finland, Helsinki; Ukraine, Kiev; Italy, Rome; Switzerland, Geneva; Monaco.

Caribbean: Cayman Islands, Grand Cayman; Barbados, St James; British Virgin Islands, Tortola; Bahamas; Bermuda.

Tuesday, June 12, 2012

Detroit bankrupt, houses and condos are supercheap

Once the backbone of American manufacturing, the city of Detroit is poised this Friday to commit financial seppuku (Japanese ritual suicide).

And it is really a damned if they do and damned if they don't situation.

You see Detroit needs $80 million in emergency funding just to keep the city running and in April Detroit Mayor Dave Bing handed financial control of the city over to the state of Michigan (which ironically owes Detroit $220 million, but is also suffering financially).

It seems like an extreme measure for Detroit Mayor Dave Bing who just weeks ago shocked America by announcing plans to save Detroit money by cutting off all street lighting to large swaths of the city. (And watch the crime rate go even higher.)

This is after all, Detroit, America's first "Ghost City". It was once America's 19th largest city, but since 2007 its population has shrunk to 713,777 (according to Google). Truth be told Detroit was dwindling in size since the 1960s.

Detroit has been on life support since April, when the mayor and city council approved an agreement that handed over control of Detroit’s finances to the state of Michigan. But that apparently wasn't legal says Detroit's city lawyer, Krystal Crittendon, who was never consulted on the deal. Since then she has filed a lawsuit arguing the agreement was illegal because it contravenes the city’s charter, which states the city cannot enter into agreements with parties that owe it money. Since the state of Michigan owes Detroit about $220 million, then the agreement has to be struck down. A ruling is expected tomorrow (Wednesday the 13th).

Meanwhile the state of Michigan says it is going to cut off crucial funding to Detroit starting this Friday. Funding that governs everything from street lights to garbage collection. The city will basically be cut off completely.

And frankly who will want to live in a city that doesn't even have garbage collection or street lights?

Right now the bulk of the jobs in Detroit are the result of teachers and city services. The Detroit public school system is the city’s largest employer, with more than 13,000 jobs. #2 is the city of Detroit staff with 12,400. #3 is the Detroit Medical Center with 10,500 staff.

Manufacturing in Detroit is down to two thirds of what it was in 2006. 271,600 jobs in 2006 to just 187,800 jobs in 2010. Probably less than 170,000 by mid 2012.

In 2011 unemployment in Detroit was 20.2% (compared to 8.9% in the USA) and suicide, abortion and crime rates are all up due to extreme poverty.

City libraries have been closed, the quality of education has slumped because teachers are leaving for sunnier pastures and the spike in crime is filling the city jails and creating a huge backlog. The city can barely afford to pay for defense attorneys.

However... on the plus side land is super cheap.

You can buy a 750 square foot condo for $10,000.

Or a 3-bedroom 1500 square foot condo for $19,000.

Or how about a 6 bedroom + 3 bathroom, 3,600 square foot HOUSE for... $16,000. A mere $4.44 per square foot.

And this is just one Detroit real estate website I consulted (, but you can certainly find other cheap listings on various Detroit real estate websites.

Including prices as low as $1 because the previous owner didn't pay the back taxes and the property has been seized by the state. All you have to do is pay the back taxes and its yours.

However if Detroit really does cut "the gravy train" (as Toronto Mayor Rob Ford likes to call essential services) then we can expect property prices in Detroit to collapse even further. In which case a wait and see approach is best, since you could in theory snap up a lot more for your dollar if you wait a bit longer. (But why would you want to live in such a horrible city???)

Frankly if you're in the market to buy cheap property why not buy it somewhere NICE?

For example you can buy a 2 bedroom condo in Hawaii for $25,000. However the current renters are unwilling to leave so you will need to find a way to kick them out if you want to live there. Still if you manage to do so its in HAWAII! The place is a paradise and a no brainer in comparison to Detroit where you can get mugged going to the bathroom.

Wednesday, June 06, 2012

The World's Tallest Treehouses

Okay, so its not exactly a house in the normal sense of the word... but some of these certainly count as real estate.

Whether I would live in it really depends on whether it has electricity, plumbing and air conditioning...

#1. The world's tallest treehouse is located in Crossville, Tennessee.

Owner and builder Horace Burgess spend 11 years building it. It is 10 stories tall, has 10,000 square feet of space and Burgess began working on it in 1993 after receiving what he says is a vision from god. It only cost him $12,000 to build it since he used mostly recycled materials. The building includes spiral staircases, a basketball course, lots of bedrooms, balconies and a chapel. The structure is supported by not 1, but 6 trees.

#2. The tallest treehouse in British Columbia, Canada.

Its the tallest because of the actual structure is taller.

#3. The 2nd tallest treehouse in British Columbia, Canada.

I decided to give this one 2nd place because it is physically higher up in the tree, 95 feet up in a douglas fir tree, but it is comparatively small and you couldn't really live in it. It is located in Belcarra and was built by George Dyson.

Unfortunately I was unable to find a good quality photo of Dyson's treehouse. The photos that are available it just looks like a tree and you can't see the treehouse that clearly.

#4. 4treehouse near Lake Muskoka, Ontario, Canada.

Built by Lukasz Kos the "4treehouse" is built on four existing trees on the site. The three-story house is suspended from the four primary trees with very little additional support.

#5. The Naha Harbor Diner in Okinawa, Japan

Its big, its a treehouse... but that isn't a real tree. Its concrete in the shape of a tree. The structure even has an elevator and a spiral staircase.

NOTE: This is by no way a factual list of "the world's tallest treehouses". The tallest ones may not even be mentioned on the internet. When you consider that the tree dwellers of the Brazza River Basin in the Indonesian province of Papua all live in treehouses, they probably have quite a few really tall ones.

There is also the "Free Spirit Spheres", which aren't really treehouses. They're constructed on the ground and then suspended in trees using cables. Regardless, they're all interesting on an architectural level.

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