Remember Derek? He and his squeeze sold their north GTA home in the final week of the FOMO frenzy and scored big bucks – $2.25 million. The craft beer didn’t flow for long, however, because within days the buyers were begging to walk. They’ve tried to buy their way out, but Derek’s a tough dog. A deal is a deal.

The only alternative was to put the place back on the market, take the best offer, sue the dipstick purchasers for the difference and hope for the best. But, as you know, a lot has changed in the last few weeks. The market cooled. Sales dipped. Listings exploded. The province turned its big fire hose on the raging fires of house lust. And now we have proof, statistically, of what’s coming.

Derek was in touch today, hours after the local real estate board reported.

“Here’s where we are now,” he says. “We have listed since Monday – and only one showing. Last time we had about ten in the first two days. Also, meanwhile, the house next door just got listed today – less than ours.”

Guess where this story’s headed? You bet. Some vulture will eventually come along, offer $400,000 less than the original sale price, which Derek will reluctantly accept – then unleash his lawyer. A year later, there may be a settlement. And lotsa legal fees.

Now this tale stands in stark context to the video posted here yesterday and the accompanying words detailing the feeding frenzy going on in the low-rise, suburban, new-housing sector. As mentioned, there are two markets at play. On the resale side listings have started to pile up and FOMO is powering down. On the pre-construction front, a shortage of supply and the fact you can buy with minimum down – making it a futures play – mean competition is scary. You saw for yourself all those elbows and knees, that pushing and jostling. Desperation, greed, aggression – it’s there.

To put things into context, the resale market is far larger than the other, has a more profound impact on overall pricing and will likely determine the fate of every real estate investor. And while speculation sure exists (especially in the new condo trade), prospecting and flipping on an epic scale is far more prevalent in the sales trailer featured in yesterday’s vid. May God help them. Lawyers will be busy.

So, here’s the score. Despite being the most vibrant period of the year for residential real estate, things have started going in reverse. On Wednesday the Toronto Real Estate Board (the largest in North America) revealed this:

The number of new listings has jumped the most in seven years. Obviously the word is out – collect your windfall gain now or see it melt away.

Buyers suddenly have 34% more choices as the number of available properties bloats to 21,630.

The Ontario government’s tough-love, bubble-busting policies have only been around a few days, but sales were off 3.2% for the month, and basically collapsed in the past week and a half.

This is the first year/year sales decline in three years.

The insane price appreciation of 33% y/y has dipped to a merely delusional increase of 25%. Expect that to fall rapidly, given the dive in deals in the last ten days.

No crash, but cracks. And no wonder. There’s now a huge foreign-buyer tax, universal rent controls, a coming empty houses tax and deteriorating confidence in the mortgage finance business as Home Capital writhes bloodied in the road. Everybody knows prices are stupid so it’s no surprise buyers would go on strike, unwilling to make the sacrifice when there’s a whiff this could all start heading downhill.

And maybe, just maybe, we’ve all been lied to for far too long. It wasn’t offshore Russian, Persian, Indian or Chinese dudes who ignited this inferno. It was us. Locals. The world doesn’t actually want to move here at all. Turns out we’re not New York, Tokyo or London!

The board just finished a major data mining, (based on land registry information and property assessments) and these are the conclusions in its own words:

The number of buyers with a mailing address outside of Canada is well-below 1%. Most of these buyers have a mailing address in the US.

Between 2008 and April 2017, the average share of foreign buyers in the GGH (Golden Horsehoe) was 2.3%. The share was 2.2% in 2016 and 2.6% for the January through April period in 2017. The majority of foreign buyers – 87 to 90+ % – purchased their home as a place to live.

The trend from 2008 to April 2017 suggests the share of foreign home buyers has remained low. The results also follow the results from earlier released data from an Ipsos survey of TREB Members conducted in the fall of 2016. The Ipsos survey results estimated that 4.9% of transactions undertaken between the fall of 2015 and the fall of 2016 were accounted for by foreign buyers.

So it’s a Wile E. Coyote moment. Hope you sold.