In the first few days of last July, as FOMO gripped Vancouver and the Lower Mainland amid a wildly inflating and seriously unbalanced housing market, I had two words of advice: get out. Harvest your profits. A time to sow, a time to reap. So reap.

One month later, just after the province brought in its Chines Dudes tax, the decline started. Sales plunged and prices followed, especially at the top end of the market.

Well, here we are again. This heretic but heroic blog recent hosted ‘Maybe Week’, saying maybe the GTA market’s more pooched than most people think, and the wise ones are the sellers, not the buyers. In one devastatingly boring post after another, the message was clear: hope you sold. Change is coming.

And here we are. The flip just switched.

Two weeks ago we told you about Derek, whose rambling house in the burbs sold for an eye-popping $2.25 million, only for the buyer to get cold feet 24 hours later. This is not an isolated tale, by any means. Deals are falling apart with regularity now, whereas two months ago buyers were joyous to get in at any price.

“What a shit show!,” he reports. “Buyers actually showed up at our house basically begging us to release them. Husband almost broke down. We basically said nothing other than we felt as far as we are concerned they have bought our house and they should be happy with their purchase.

“Husband came back again early evening begging us to relist for 2 weeks after Easter and hope to sell for same or more. We told him to talk to our lawyer. Our lawyer has since sent him an email to stop communicating with us directly and all communication to go through him. Our lawyer has reviewed the purchase agreement again and says it totally solid, no conditions, no wiggle room for them.”

Remember who the greater fool is? Yup, the fool who follows. The last one in. The person who ignores the warning signs, the excess, the facts and even this pathetic blog, and jumps on emotionally at the top of the pile. He may be waiting years, or decades, or forever, to get his money back.

Real estate is a hormone-driven asset which trades in a market more influenced by house-porn TV shows, Facebook, peer pressure and mass media than by economic data, household income or logic. When it’s going up, everybody wants in because it’s “buy now or never.” But when fear replaces panic buying, the trip down can be just as quick. It doesn’t take much – the threat of a rate hike or two, some scary headlines or a market-dousing policy by government. So, just imagine when it all starts happening at the same time.

You get this…

…and as three levels of government pow-wow on Tuesday to come up with ways of stopping a runaway GTA real estate market in its tracks – with a foreign buyer’s tax, a new speculation tax, universal rent controls or maybe an empty house tax – the negative meme is probably just starting to pick up speed…

Unlike in Vancouver and the Lower Mainland, where sales volumes started to corrode sharply in the four months before government slapped on its foreigners tax, Toronto realtors have been seeing a robust – but not explosive – number of monthly deals. The real wild card is listings. They started to swell last month, with the number of new properties coming to market up 15% – offering embattled buyers thousands of new choices. That’s expected to mushroom noticeably in April and as supply flows, price increases should ebb. More deals will flounder as recent buyers realize they were greater fools. Smart sellers like Derek will play hard ball and force closings, understanding this is a lottery they just won.

Unlike most lotteries, however, this one has losers. Ouch.