Ouch, 80,000 times

Remember this? Now the sign of things to come, as CREA confirms we’re in the middle of a listings blizzard. Look out below.
________________________________________________________
Since becoming the bane of realtors’ collective existence, I ve been peppered with media questions about why prices in Canada have not declined lockstep with with those in the US. The fact we haven’t had a 20%-40% collapse in the values of homes in the GTA or Saskatoon or Victoria is held as evidence things are “different” here.

They wish.

The reality is, the Canadian market will crumble for precisely the same reasons the American one did, with similar results. We bubbled. We indebted. We overfinanced. We rolled and gambled. Canada is lagging the US by almost exactly two years, which puts us now where our southern middle-class brethern were in the fall of 2006, just 11 months into the bubble’s bursting. The fact that the American market is still collapsing should give an indication of what lies ahead.

Let me make it clear once again: First sales stagger, then listings explode, then sellers panic, then prices tumble. We’re in stage two. More evidence confirming this was released Friday:

Resale home listings reach record high

(Globe & Mail) Resale home listings cracked the 80,000 mark last month, the highest level ever reached, according to data released Friday by the Canadian Real Estate Board (CREA).

New listings on the Multiple Listing Service (MLS) soared to 80,147 nationally in July, up 14.4 per cent year-over-year. The number of resale homes that hit the market rose by 1.4 per cent from the month before and 0.5 per cent from the previous record set in May 2008.

While listings surged, sales slumped by 12.2 per cent year-over-year to 48,748 units in July. The average home price declined by 2.4 per cent to $302,298.

The significant increase in supply has been the result of declining affordability in a housing market which experienced double-digit yearly price gains from 2002 to 2007, said Craig Alexander, deputy chief economist at Toronto-Dominion Bank.

Unlike in the U.S., a large part of the surge in listings in Canada is coming from people looking to cash in before prices either cool further or decline, a sharp contrast to the forced selling that is taking place in the U.S. as homes go into foreclosure, he added.

Last month Ontario and Quebec reached new listings records, and the number of existing homes for sale in Manitoba reached their second-highest level this decade.

Those gains offset a decline in Alberta, where listings continue to decline from a peak hit in March.

Listing surged the most percentage-wise in Saskatchewan (up 42.5 per cent), Manitoba (up 31 per cent), and British Columbia (up 21.1 per cent).

Friday’s data includes all of Canada, and expands on a report of the country’s major markets released by CREA earlier this month.

While listings surged, sales slumped by 12.2 per cent year-over-year to 48,748 units in July.

Sales plunged the most in British Columbia, where they were down 37.3 per cent, followed by the Yukon and Saskatchewan, which were down 26.7 per cent and 24. 9 per cent respectively. Sales rose the most in Manitoba, which had a 12.4 per cent increase, and in the Northwest Territories (up 11.8 per cent), and Newfoundland (up 11.5 per cent).

The average home price declined by 2.4 per cent year-over-year in July to $302,298. Prices fell the most in the Northwest Territories, albeit on a relatively small base, down by 26.7 per cent to $272,779. Prices also declined in the Yukon (down 9.6 per cent), Alberta (down 5.2 per cent), the Prairie provinces (down 0.9 per cent), and British Columbia (down 0.4 per cent)

Prices rose the most in Saskatchewan (up 29.9 per cent), Newfoundland (up 18.7 per cent), and Manitoba (up 13.5 per cent).

These provinces are the most likely to follow Alberta into a slowdown in the coming months, Mr. Alexander said.

While prices will likely drop further in some regions, this should only be troubling for people who bought recently with plans to flip their home quickly, rather than those who have a medium-term time horizon, he added.

170 comments ↓

#1 jesse on 08.29.08 at 3:52 pm

What the heck is a “medium-term time horizon”?

#2 squidly77 on 08.29.08 at 4:10 pm

lets not forget all people selling without a realtor
1,600 more here
and more here
30% of homes for sale in Edmonton are listed with ComFree.
now keep in mind that theres a ton of new homes that the builders are trying to sell..and they are still building at a record pace all across Canada
building themselves right into a crash

#3 Brittanny on 08.29.08 at 4:40 pm

Garth, are we the last big bubble bursting or is it Dubai?

#4 U.B.A.B. on 08.29.08 at 4:55 pm

MLS.ca is coming out with a new website – check it out on

http://www.realtor.ca/index.aspx?cul=1

It contains the number of listing in the geographic location you are looking for !

#5 Vanstats on 08.29.08 at 4:57 pm

Greater Vancouver sales are down 55+% this month.
Last years unit sales for August was 3493, this month
is only 1537. On some subareas, SFH sales are down 70%.
Active listings have grown 73% compared to last year,
from 11549 to 20119.

#6 Jim_s on 08.29.08 at 5:00 pm

There is also a ton of realtot owned homes that are for sale that they intentionally leave off the MLS and out of the “official stats”.

Also, the G&M article about “Alberta having a decline in listings” is technically true, however, the many specs I know have simply delisted their properties (after 8 months of being on the market with ZERO interest) and put them into the rental pool to try to at least cover carrying costs. That, by no means, indicates that the home has been “sold” and should not be classified as “absorbed”. It hasn’t been. It’s just a waivering effort to minimize short term costs. Realtots will classify such an occurrence as “inventory is declining” and then pump the incorrect “sales to new listings ratio” as rising. “Yay! The home hasn’t sold, just removed from the market, but look…… stats are better!”

Absorption is where the problem is. TONS of speculation. TONS of suckers ate the Flip this House bit, of which many are directly involved and have a vested interest in good sales numbers. Pure deceit.

Thank goodness for open forums like this and the Alberta Bubble Blog.

->

#7 No Fool.... on 08.29.08 at 5:07 pm

Brit,
Note that you cannot own a home in Dubai/UAE unless you’re a citizen (that’s why they’re building those fancy islands). You cannot become a citizen of UAE unless your parents were born there. They have a tiny population and mass amounts of wealth. I’d hazard a guess that mortgages are pretty rare, if not non-existant.

#8 newguy vancouver on 08.29.08 at 6:52 pm

To U.B.A.B.:

http://www.zoocasa.com is way more user friendly, and has a much better geographic feature.

#9 dave on 08.29.08 at 7:08 pm

Toronto M5V (the downtown new condo area) listings under $700k have increased from 256 on July 4 to 325 toda.

A 26% increase in 8 weeks.

I don’t know if listings typically increase during the slow sales months? But 26% seems pretty substantial.

#10 piccaso on 08.29.08 at 7:13 pm

I’m seeing more For Sale By Owner signs and not your Comfree signs in Edmonton. So there is a whack of inventory out there that the MLS doesn’t even touch.

#11 Another Albertan on 08.29.08 at 7:15 pm

My Dubai colleagues and contacts in both engineering and finance are certainly not recruiting as actively as in past years. Some are even saying “stay away”.

And they do have mortgages. Shockingly huge mortgages in some cases. And on speculative property at that too. These people are at the executive level, so no one is immune to being drawn into the frenzy.

#12 3rdman on 08.29.08 at 7:26 pm

In the GTA city hall cancelled the Front st extension few weeks back. I keep looking at all the former railway lands cleared for condos present and future, somebody knows whats coming…

#13 Calgary rip off on 08.29.08 at 7:42 pm

Squidly:

There isnt much on welist.com for affordable houses in Calgary. Bunch of overpriced crap on there. That site isnt even worth including. The only house(s) I have seen that are barely reasonable is that $265,000 house in Airdrie and the one in the southwest in Calgary for $280,000. The rest is a bunch of overpriced shacks. If these are crash conditions, I’ll be renting forever. Who in their right mind wants to put out $350,000 for a house that is worth $180,000? Its totally insane in Calgary. These comments are a wake up call for anyone considering moving to or buying in Calgary. Dont!!! Wait a while and see what happens. These arent even close to crashing conditions. Crashing is if the house I am renting(stupid market value around $450,000) is worth $180,000. THAT is unlikely to happen soon.

#14 islander on 08.29.08 at 7:53 pm

Garth, you’ve’ summarized it perfectly. Keep up the good work.

Squiggly, that link is to 1,600 people who have LISTED their home on a website without a realtor. Learn to tell the difference between a For Sale sign and a Sold sign.

Jim, you claim “there is also a ton of realtor owned homes that are for sale that they intentionally leave off the MLS and out of the official stats.” Please reveal your source for this unsubstantiated paranoid fantasy.

#15 LuckyLondoner on 08.29.08 at 8:34 pm

Hi all:

First post – thank you for the site and insight!

Me and She were looking into buying with her having a stronger nest impulse. I have suspected that things were out of whack and this site and further research confirm and she is acknowledging the state of things wrt RE.

We have no kids and I am debt free and she will be soon. I am suggesting to her we save for 3 -5 years (combined income ~135K) and she sees the sense in that. I figure we could get to 150K or even more in that time if we are good/keep jobs/get a decent return.

My research shows (CMHC and local RE board Ave Sales Price numbers) that Calgary has risen since 2000 by roughly 127%, Toronto by 63% and LONDON by 75%. Assuming a fair 3 – 4 % “should be” average annual increase I figure that London is due to come back at least 25 to 35%, and maybe 40+ with overshoot and aggressive unemotional bidding.

I bet this guy disagrees – would probably say “London is only catching up / London is Different / whatever blah blah blah”:

http://londonontariorealestatediagnosis.blogspot.com/2007/02/london-is-outpacing-ontario-and.html

London’s history also shows it lags by a few years so if we can wait (and I am really comfortable in our nice high rise rental for 775/mo) – my dream would actually be to pay 250K CASH for something that is currently 400K, though I think a 75% percent down payment and a 5 year amortization on the remainder will still set us up nicely for free-and-clearness if we time it right!

#16 mike on 08.29.08 at 9:02 pm

Just to confirm we as yet are not sure what mid town condo in Toronto got shelved . Garth refered to it in the previous blog

#17 JO on 08.29.08 at 10:12 pm

A record number of listings and sales volumes sharply lower..yet the spinmasters at CREA still need to state they expect price gains to be very moderate in the next few years..yes “gains” to be very moderate. Way too many owners are still stuck in a spectacular delusion about the RE future. Of course, they are too naive to understand their current feelings about the future of their properties is based on the last 5-6 years of abnormal market conditions. Wow. Investor psychology at work. Seems like oil/gas could have a real shot at one last parabolic blow off top if Gustav and the Russian situation flare up in the next 2-3 weeks. By the way, there is a MASSIVE amount of corporate debt, both financial company and non-financial company debt, rolling over in the next month..best case scenario is that companies luck enough to get money will pay up the nose for it..but the way credit markets are acting, it seems likely we could see a major market event (several high profile bankruptcies??) happen in a short period of time…Imagine what will happen to the number of listings and sales volumes if September sees anything like this ?Of course, even if nothing happens, listings and sales seem likely to continue deteriorating. Can wait to see the RE market environment in 2011-2012. Fare well to all.

#18 robchipman on 08.29.08 at 10:29 pm

http://robchipman.net/blog/

6 Rob Chipman { 08.29.08 at 4:05 pm } WoW:

He’s not the bane of my existence. First, I’m a little older than you, and I’ve seen his show before, and second, I’ve yet to see him quoted by one of my clients.

It also seems illogical to think of yourself as the bane of a Realtor’s existence becuase the media pepper you with certain questions. It would seem to make more sense to think of yourself as someone in the media’s favourite 5 or something.

I also wonder who’s better at picking up on the obvious? Mr. Turner or “propa-panda”? Do we really have 3/8s of national inventory? Seems fair to Mr. Turner.

So, that’s my opinion. He’s banging the same drum a lot of people bang, and he’s not doing it much better, but he’s got better clothes (he hasn’t said anything new, nor anything that posters here don’t say before he does, but he does have a slick looking blog – he’s nothing if not a good promoter, but I’m not impressed with his analysis).

That was an insightful rebuttal. Your clients must be unique people. — Garth

#19 squidly77 on 08.29.08 at 11:06 pm

fast forward 18-24 months in Canada
Home buyers turn screws on desperate sellers

#20 APCM on 08.29.08 at 11:23 pm

#16 – I believe 100% that a mid-town condo project was cancelled in Toronto. I wouldn’t be surprised if many more projects are to follow including downtown (just by how slowly progress appears to be moving)
Often times the press know things to be true but need a source on record to confirm the news.

#21 arit on 08.29.08 at 11:53 pm

Hey!!!

Wait a minute. That was not Rob Chipman.
Someone (maybe one who goes under nick “Real Estate Bull” and was recently banned by Rob Chipman from his blog because of continuing “below the belt” personal attacks on Rob), posted under the nick Rob Chipman.

Rob (for those of you unfamiliar with the Vancouver blogosphere) is a realtor with a blog with a lot of traffic.
His blog is one of the 2-3 most popular bear residences in Vancouver. Us bears meet daily and chat real estate. Most of us are big Garth fans, and we express it. Rob itself has his own opinions, but he is also predicting a big crash. I would define him as a bear, though he might disagree with me.

Anyway, it is unacceptable to rip a post out of context and post it under the spotlight without context it is cheap and definitely non-classy. I hope, maybe this post is deleted before Rob sees it himself. I would be pretty offended if someone did something like this to me.

Garth, you are the best!
I am seriously considering voting for your party just because of you ;)

Best regards,

arit

#22 E-TOWN on 08.30.08 at 12:47 am

Had to have a chuckle—there is a house listed here in EDMONTON with a realtor on his site for $299,000 and low and behold its a new listing on comfree at $295,000.

Also have to laugh at the homes on the market how many are empty in the pictures on the web sites(no furnutre), would love to see intrest rates go up and really see the flipers try to dump.

#23 squidly77 on 08.30.08 at 1:04 am

hey remember when the realtors were recommending lending your kids money so they could buy a calgary home or they would be priced out forever..guess what ?
they lied..actual proof with my sisters kids..and absolute knife has been driven into the relationship since she lent two of them $60,000 each to buy condos on the advice of the creb
they dont even speak anymore
i had lunch with one of them today
she is so bitter towards her mom
blaming her for all there problems
you know what..shes right
heres a 23 yr old and her boyfriend in over $300,000 of insurmountable debt
they have zero chance of paying these debts off..i advised that they see my lawyer..quit paying there bills and seek bankruptcy as they are young and they will recover
but how about people my age in there forties..theres not enough time left..they will never recover

real estate boards..realtors who support the boards and the msm have combined in wiping out an entire generation
the lies and manipulation went too far..we will all pay a price
in the coming years our economy will be wiped out
shares in companies such as cnq nxy su are going to plummet
(all shares will plummet)
this is a new financial age where cash will be king

#24 David on 08.30.08 at 2:27 am

The TRUE INVENTORY levels are probably much higher if the statistics were properly aggregated correctly by disinterested parties interested in presenting a realistic picture of the impending calamity in the housing industry. These stats miss all those who would love to make a fast cash out exit NOW that the party is over or those who opted to collect rental income instead of selling at a loss and cover their negative equity position.
So it appears that Mr. Chipman Esq. is a purveyor of real estate in Vancouver and specifically panders to the illiterate and innumerate and not so easily impressed by a coherent argument crowd. Fast buck cowboys have a tendency to ignore all ideas that are not their own or at the very least are not in conformity with their simple intuitive way of thinking. There has NEVER been a real estate bubble like the current one, so saying you have seen it all before sounds at best trite and at worst intellectually dishonest.
Here are some questions you might want to answer for the edification of all us. By the metric of price to affordability and median incomes, how many deviations from the norm are prices like $705K for a 50 year old bungalow and what’s the odds of that being the historical norm? At prices like 705K and median family incomes of $62K the ratio is 11.37%. The historical norm for the past century has been 3x median family income. Realisable rental income from properties at these prices? Forget the reality check right?

#25 Matt on 08.30.08 at 3:31 am

Islander, In defense of Squidly, you should learn to read a comment. I think semantically squidy got it right this time. Perhaps you are just so used to attacking him that you assume too much.

#26 Vanstats on 08.30.08 at 3:46 am

Greater Vancouver Stats

August 2008 (REBGV) SFH+APT+TH
Gross sales 889,046,715 (-56%)
Units sold 1,599 (-54%)
Avg Price/Unit 556,001 (-5%)
Active Listings 20,152 (+74%)

August 2007
Gross sales 2,052,078,282
Units Listed 4,630
Units sold 3,493
Avg Price/Unit 587,483
Active Listings 11,549

#27 G on 08.30.08 at 11:39 am

Here are some more stats from Inventory to show you what it looks like month to month in Greater Vancouver.

JULY 2008 RBGV SFH+APT+TH
Gross sales 1,274,192,325
Units Listed 6,369
Units sold 2,215
Avg Price/Unit 575,256
Active Listings 20,280

August 1-29, 2008 (REBGV) SFH+APT+TH
Gross sales 889,046,715
Units sold 1,599
Avg Price/Unit 556,001
Active Listings 20,152

#28 bill on 08.30.08 at 12:04 pm

i had a chat with our realtor last week. when he had sold our condo in the spring he was still somewhat bullish about the toronto condo market.

last week, however, he was not singing the same tune…he confided that things were “changing” and that we had sold at at good time.

it was interesting to see him making an honest reassessment of his own views.

no doubt, other agents in the city are starting to question their own beliefs?

#29 Jim_s on 08.30.08 at 12:28 pm

Islander;

Appreciate the compliment. Are you saying that realtots DO NOT own more than one property? Are you saying that, of all the realtots you hang with, NONE of them got suckered in and invested to find another sucker, only to be left looking the fool?

C’mon…. we all know who provides unsubstantiated dribble. Is “buy now or be priced out forever” a substantiated claim? You realtots can shoot your mouth off whenever you want, yet claim “not my problem you bought”.

Remember what the President of CREB, Ron Stanners said in the July of 2007:

“the median price has declined
by 1 per cent, going from $439,000 in
June to $435,000 in July, showing the
stability in the market place.”

Today the median is at $397K. Is the above a substantiated claim that the market is stable?

Ed Jensen of CREB said in Feb 2008:

“I don’t
anticipate we’ll see the blistering
market that we experienced in the
early parts of 2006 and 2007, but I
do anticipate stability in this now
corrected market,” remarked CREB®
President, Ed Jensen.

Hear ye, hear ye…. the market is NOW corrected. Lie.

Hear is more substantiated tot garbage:

“Now is not
the time to wait until the sale is over
and then decide to buy; after you read
a headline, the best time to buy has
passed,” cautioned, CREB® President,
Ed Jensen.

You can view all of the misleading info yourself here.

And for those of you who may wonder if it is just me over reacting, take a look at what the sneaky buggers did after the spring rush didn’t occur.

Here you will see evidence that CREB actually went ahead and changed the criteria of what constitutes a “balanced market” by quietly changing absorption to fit the explosion in inventory. After they got caught with their hand in the cookie jar, they quietly changed it back. Guilty?

For you Edmonton folk that want to see how your association is providing “substantiated claims”, here is a good read for you.

You wanna talk “substantiated claims”?

Man oh man….. you guys are liars.

->

#30 paulb on 08.30.08 at 1:17 pm

If you want to see the listings inventory and sales for Greater Vancouver charted please visit my blog here:

http://paul-northvancouverhomes.blogspot.com/

It looks to me like Vancouver is leading the pack in sales declines. The market has made a very rapid turn here in Van. Even most of the bears I know are surprised.

#31 Glen on 08.30.08 at 4:11 pm

Truly some of the worst times are ahead. A friend of mine who is an economist and financial planner looked at the numbers and historical data….

look out is all I can say…..

#32 Rasputin on 08.30.08 at 5:17 pm

HA ha ha ha ha. Ozzy Jurock says the average house in Vancouver has reached the top af affordability. 800K? Affordable? Who writes this guy’s material?

#33 Richmond Renter on 08.30.08 at 5:19 pm

http://www.canada.com/vancouversun/features/usaid/story.html?id=560c333a-a888-4d19-aa14-d4b5108c208f

Real estate collapse? Bring it on!
Max Fawcett, For the Vancouver Sun
Published: Thursday, August 28, 2008

British Columbians with loved ones invested in the real estate market may want to steer them away from precipices and sharp objects for the next while.

Real estate, the increasingly dominant part of a given person’s wealth, appears to be headed in a direction that it hasn’t seen in more than a decade – down.

….here’s the part that really caught my eye in the article,

“……That’s why, although it may be in poor taste, many young people are rooting for a full-blown meltdown of the real estate market. Unfortunately, many of the casualties inherent in such a scenario would be young people who leveraged themselves into knots to get into a market that they believed would only, could only, go up.”

#34 My_view on 08.30.08 at 5:54 pm

Come on -25%!

#35 Mark on 08.30.08 at 6:01 pm

squidly77, why would shares of ECA, SU, NXY, COS.UN, etc. plummet?

Unlike real estate, those shares are cheap. Dirt cheap. PCA and HSE trade at P/E’s of 6. The P/E on a house in Vancouver, on an after-tax, and after amortization basis, is greater than 50.

#36 Looking for Value on 08.30.08 at 9:08 pm

I was just on http://www.Zoocasa.com – I agree with newguy vancouver, Zoocasa is a very good site that makes things easier

#37 wolfey on 08.30.08 at 9:36 pm

gUYS

There are still people who believe realestate will go up and this is the best place in the world. I was on the way to Surrey via Skytrain. 3 nice slight ly old people . Probably in their late 50′s. One guy say…”everybody wants to come here…the european…the asians. Where can you gur the beaches and the mountains.. I ‘m glad my house is going up. ”
I wanted to say that will only help you if you are selling…otherwise you are just paying more taxes. But no need to interrupt their conversation.

But some of the younger professionals whom converse over a coffee or congregate on Campus notice prices are dropping and the stock market sucks they are either worrisome of the econ next year..or it won’t effect me because my job is stable..

we will see? :) :(

#38 Charles on 08.30.08 at 9:58 pm

Richmond Renter (Post # 33). Thank you for posting the link to the article “Real Estate Collapse? Bring it on.” It is a fantastic article.

Garth the following sentence comes from this article.

“What they’re doing is taking on previously suicide-inducing levels of personal debt, a strategy in which the Bank of Canada, lending institutions across the country, and the government are all full partners.”

I think this sentence hits the nail right square on the head when it comes to giving the reason why a big time drop in house prices is going to occur in this country. This is the first time I have ever seen this mentioned in the main stream media.

The federal Liberals had majority governments in this country from 1993 to 2006. The overwhelming majority of our huge run up in real estate prices happened during this time period.

Garth. I would really appreciate it if you would post an answer to the following question.

Do you think Mr. Chretien and Mr. Martin should have done something (when they were in office) to rein in the rate at which the Bank of Canada was printing money?

Could you please post a chart on your blog on the level of M3 Money Supply in Canada from 1970 up until now? This chart would stun most people. I cannot find this chart anywhere on the internet.

#39 Rob Chipman on 08.30.08 at 10:49 pm

Garth:

Actually, I wasn’t rebutting you. Someone on my blog asked what I thought of your article. I shared my thoughts. Sorry if you didn’t like them. While you may be an absolutely brilliant person, that post didn’t impress me all that much.

Its not that I disagree with you. You’ve got your opinion, and you’re entitled to it.

The thing is, there’s a poster on my blog who thinks that you’re the second coming. I don’t agree, but that’s just because you say a lot of the same things that people on my blog say, and have been saying for several years. I think it detracts somewhat from the quasi-prophet status that this particular poster gives you.

To be completely frank, I get somewhat irritated that he can read the same message from other people, and yet still get really excited when you say it. I’ve got some pretty smart readers on my blog, and they have some pretty good opinions and observations, and I think he should recognize that.

The irritation spilled over and hit you, and that’s not really fair.

Still, I wasn’t blown away by your article, and I had to be honest when asked (its really just a little intro to a G&M article, right? There isn’t much there to blow anyone away, is there?) If you write something impressive, I’ll be sure to give you all due credit. (You do have a great looking blog, btw)

Happy blogging.

Well, Mr. Chipman, there are a hundred articles here for you to read, so you might want to be a little more thorough before you opine. I’ve visted your blog, too. But I’m not feeling inadequate enough to compare. — Garth

#40 squidly77 on 08.30.08 at 10:53 pm

that article is a little misleading..they are talking about new listings only..
New listings on the Multiple Listing Service (MLS) soared to 80,147 nationally in July, up 14.4 per cent year-over-year. The number of resale homes that hit the market rose by 1.4 per cent from the month before and 0.5 per cent from the previous record set in May 2008.
new listings typically represent about 20% of all ready existing inventory..so using that as a base i would calculate that the total mls in Canada would be 400,000 housing units not including builder inventory and private houses for sale..for an easy number i will round it off to 500,000 housing units

the US is mired in there largest housing bust since..well the great depression
the US has a current supply of all unsold houses of 5,000,000 or 10 x our supply and they have approx
10 x our population
so if we take Canadas total supply of 500,000 x it by 10
we have an identical 5,000,000 unsold housing inventory

Calgary an Edmonton have a combined housing unit inventory of about 40,000 unsold homes in a market that holds a little more than 2,000,000 people (40,000 unsold is my best estimate of mls has 28,000 private at least 6,000 and unsold new construction)
i have provided all the rellavent links before except for the
US its here

#41 Crikey on 08.30.08 at 10:56 pm

Well, we’ve officially been tapped:

http://globaleconomicanalysis.blogspot.com/

“Vancouver take note. The odds that Canada can avoid a housing crash similar to what is going on the US, UK, and Spain, are zero.”

#42 Rob Chipman on 08.30.08 at 11:20 pm

Garth:

I’m glad you visited my blog. The guy asked my opinion on one of your posts, not all of them. I gave the opinion one the one I was asked to.

Did I miss something? Did you say something impressive or remarkable in that intro? Anything remotely controversial or eye opening? I’m sure you’ve done exactly that on occasion. I just didn’t see it here.

There are 107 arricles here and 4,500 comments. Reading them might make you a better realtor. — Garth

#43 nonplused on 08.31.08 at 12:22 am

Personally i think all of this is a good thing. The tech bubble hurt mostly speculators as most retirement funds are somewhat diversified and only took a hit on a percentage of their holdings. But a bubble in house prices hurts everyone. Grossly overpaying and going into crushing debt is no way to choose to live your precious years on this earth. The banksters are finally going to get what’s coming to them! That is if the government doesn’t bail them out first. And the power of home ownership will return to the masses! That is if the government and the banks don’t conspire to artificially sustain high market prices.

#44 Yet Another Albertan on 08.31.08 at 12:33 am

Jim_S Your post yesterday #148 was like a shiny red flag with sirens blaring and I had to ask myself why would you get so worked up about a realtor who had already closed his blog and left town?

I checked it out and it seems to be business as usual. In fact this comment was posted today: “I’ve yet to find a better spot to see discussions about the Calgary real estate market.”

#45 DD on 08.31.08 at 12:47 am

# 23 … squidly77

You write like real estate will be worth nothing in the future. Yes prices are too high, however, there will come a time when real estate will be more in line with value (rental income). Real estate might hold promise in the future. In fact, you say “all shares will plummet” …. “this is a new financial age where cash will be king.” This is not a new financial age … value is the name of the game and always has been.

#46 Blacksheep on 08.31.08 at 12:56 am

It’s a done deal.

The bubble has burst.

You know it & i know it.

Only thing left to determine is:

How far down?

How fast will it correct?

Going to say, 30-40% in vancouver.

Within 24 months.

Im a big fan of craigs list, RVs, boats & harleys been going cheap in the US for the past 12 months.

Check out Vancouvers craigs list, many more RVs, boats & toys for sale here to now too.

Lots of tools for sale, with contactors offering their services.

I have current part time employee who became a full time realtor 2 years ago.

Called me yesterday to let me know he is looking for
more work, and is willing to work for less money.

The cracks are now, really starting to show.

BS

#47 AM on 08.31.08 at 1:12 am

Charles #38

“The federal Liberals had majority governments in this country from 1993 to 2006. The overwhelming majority of our huge run up in real estate prices happened during this time period.”

Which party held power during the crash in Toronto in 89-90? I guess they were responsible for that too, right?

Statistics show the real run-up started around 2002. Interest rates were adjusted downward globally to counter the negative economic impacts of 911. After that, the global economy really got going. Since then, no government wanted to stunt the economic growth by raising interest rates and cooling the demand for credit. This prosparity up until now, has been benefiting almost everyone.

The recent housing boom can not be attributed to Liberal policy; Canada was just along for the ride.

What bothers me, however, is the fact that todays government should have seen were we are heading and implemented measures to control the out of control housing costs. Instead we get 0/40. Looking forward, if we end up bailing out the failed CMHC insured mortgages, can we hang this on the Conservatives?

#48 y3maxx on 08.31.08 at 6:09 am

Hmmmmmm.

10 places in the U.S. where home prices are likely to rise….

http://www.forbes.com/2008/08/25/housing-prices-rising-forbeslife-cx_mw_0825realestate_slide_2.html?partner=yahoo

#49 y3maxx on 08.31.08 at 6:10 am

Don’t always believe what you read.

…Uncle Garth is a sensasionalist….

#50 canuck99 on 08.31.08 at 8:13 am

In Defense of Garth,

Hey Rob, chill. Please remember Mr. Turner’s real job: serving the citizens of Halton, Ontario (for the last 20 years, I believe, so he must be doing something right). His blog (which I confess to enjoy regularly) is also IMHO a far greater service to Canadians. It is true he is not the only one saying it here in Vancouver, but what do I know of Toronto? From what I see they have fewer listings now than REBGV and probably twice the population, so he may very well be ahead of the curve there.

By the way, Garth, I have not seen any mention from you on this working paper from the Bank of Canada. If you’ve covered it before then my apologies, but I think it is very relevant.

Cheers and keep up on blogging!

http://dailydose4u.wordpress.com/2008/08/31/according-to-a-bank-of-canada-working-paper-canadas-next-housing-crash-should-be-farther-and-faster-than-the-us/

#51 AM on 08.31.08 at 9:43 am

Y3 – #48-49

“Don’t always believe what you read.”

Did you even read the material in your link? These are all post crash rebounds, and the article is using language like “may” (as in maybe) and “long term increase”. Everyone down south is looking for any shred of evidence that the market is again on the rise.

#52 Jim_s on 08.31.08 at 11:09 am

#44

I’m not worked up…. just surprised that a realtard would call a potential clients (dead) mother a prostitute. He calls himself a “marketing genious”. See the level of insanity here?

Says alot about the guy….. and you for defending (plugging) a loser (yourself) like that.

->

#53 Housing Bear on 08.31.08 at 11:16 am

Mr. Chipman:

I am not sure that Garth is trying to make brilliant posts to impress his readers. Unlike you (a realtor), he does not have a vested interest in being the toast of the town re: real estate. He does not need to make clever controversial comments. The major reason his posts attract attention are that, for a change, someone on the internet is commenting on the Canadian RE market without a direct vested monetary interest in its continued sustainability (as good as Garth’s book is, and I own a copy, I sincerely doubt that he is going to retire off of its proceeds).

I think (hope), as a Member of Parliament, he is concerned about the dangers his constituents are being exposed to by unethical builders, real estate agents, the banks, and the industry as a whole. I think he is just trying to call the shots as he sees them, so more people aren’t pulled into what appears more and more to be an asset bubble.

I like your blog, actually. You make some insightful points, and have obviously been doing this for a while. But you also have a vested interest in continuing to pitch this RE market, regardless of whether it is actually prudent to venture into it, b/c you derive your living from it. I am sure that your blog is consistently “brilliant” or “clever”, but you are usually pitching your properties in every other post, and many of us are tired of reading prognostications from another RE agent/bank/real estate economist. The refrain always seems to be the same, and we (or at least I) don’t really think that your interests are aligned with mine.

I (and likely some others) am not here to be wowed by Garth’s brilliant insights and to buy the kool-aid he is selling (I don’t know of any he is trying to sell). But I think it is just a bit refreshing to find a published commentary on the Canadian RE market by someone who does not have a direct interest in it for a change.

HB

p.s. I am a conservative voter and would actually vote against Garth if I were in his constituency (until he returns to the CP, that is), so please don’t take this reply as a response from a partisan.

#54 Mountain Girl on 08.31.08 at 11:47 am

#47 AM -
I feel that there was (is!)a lot of evidence that we were headed in the same direction as the States. As Garth has said, we’ve been watching it unfold for two years now – a technicolour vision of our future right there in front of us – and nothing was done to protect ourselves from the same fate, even with warning signs as obvious as we have had. To have introduced the 0/40 instead was so incredibly irresponsible, it boggles the mind.
I do hold the Conservatives responsible for that move.
I am also not at all keen on the prospect of bail-outs for defaulting home-”owners”. My idea of the social democracy we live in is that my tax dollars go towards the common good: roads, health care, safe food and water, education, etc. These are things that everyone gets to benefit from. The idea that my tax dollars might be used to bail out the people who bought houses they couldn’t afford out of ignorance and greed, which consequently contributed to a housing situation that is now squeezing out lower income families, is pretty appalling. Sort of how I felt when I found out that my tax dollars had pretty much been swindled in the sponsorship scandal. That’s not what that money is supposed to be used for.
I think most of us would like some accountability for this situation from all stakeholders: ignorant buyers, greedy, unethical banks, and the pathetic and short-sighted government policies that have set us up for a potentially far worse situation than might otherwise have happened.
I echo the voice of an American who wasn’t too impressed when he heard that the US government was going to be bailing out Freddie and Fannie:
“Those home-owners weren’t planning to share their equity with me when it was rising, so why should I suddenly be called upon to hand them some money now that it’s sinking?”

#55 cmh on 08.31.08 at 1:15 pm

Housing Bear #53, you have made some excellent comments. I agree “almost” completely with you. However, I am a Westerner who supports the Liberal party and have done so all my life.
I have read Garth’s books After the Boom (many years ago) and this past year read Greater Fool. I then diligently did my own research before making any decisions. Friends in different parts of the world were also observing what has been going on – scary!!!!
I sold my house which was like owning a sailboat – constantly pouring money into it – whie its” value was slowly circling the drain.
Again, I will comment on the fact that although I am young, we had very elderly parents who both grew up during the depression. They were both raised by single parents: one grandfather died during the influrenza outbreak of 1918, the other while climbing a scaffold in Vancouver and fell to his death. When our parents died, our inheritance was almost nothing (we 5 siblings grew up in a tiny old house in a very tiny B.C. town). However, we offspring inherited much more than money – a healthy respect for not buying things until you can afford to pay cash for them, to avoid large debt, and to pay yourself first every month. These values were taught by unsophisticated investors who had very little ability to shower us with material items and trips, though they gave us the greatest gift a parent can give to their children – their time! It would be horrible for any of us to have to live through times like this again!!! Some economists are predicting risks of a depression, rather than a recession. These are not unrealistic predictions given the cracked base our fragile global economic system is perched upon. Such an event would have an unspeakable, unkown, fallout – and I presume would be more than traumatic for people in their twenties and thirties who feel they deserve whatever they want when they want it.
As for realtors, they are like everyone else – some excellent and aspire to have their client’s best interests at heart. However, I sense these realtors are the minority. And indeed, some are really struggling right now. In fact, in New Zealand, some realtors have had to leave the profession.
I could write a book about some of the less than professional acumen I have received from realtors. In fact, some of their behaviours severely lack the ethical requirements that set one apart as being designated a professsional Yes, there’s a thing called buyer beware, but clients are not realtors. Any other “professional” such as a lawyer, or a dentist has a due diligence to explain either how the law impacts your case, or the benefits/risks of a certain dental procedure. As a client, it is not expected that you will know everything about law or dentistry when you go in for advice/treatment.
Clearly, althought a realtor’s blog could be somewhat informative, I would be reluctant to read it on a regular basis. Skewed statistics and suble sales pitches are not scholarly.
It has been my experience that many realtors have a questionable take on what true professsionalism is all about. Therefore, one needs to read their blogs with a critical eye.

#56 DD on 08.31.08 at 1:23 pm

Mountain Girl,

Do you think it would be any different under the liberals?

The majority of the bail out money will not go to home owners. More that likely they will have to pay for what they signed for. The bail out money will go banks … big business.

Futhermore, think about the situation if the government doesn’t come to the aid of Freddie or Fannie. We could easily be in a depression today. I don’t like the hand outs, however, is a slow deflation in credit better that a quick deflation?

#57 AM on 08.31.08 at 2:19 pm

Mountain Girl,

We’re on the same page.

I found it a little ironic that Charles #38 was pinning the impending mess on the Liberals going back as far as 1993. The Conservatives have had two years to fix this mess, however it appears that they are failing miserably.

Charles, you want Garth to post the M3 statistics? Why don’t you ask puppet Flaherty. Better yet Google will probably find you a little bit of info.

http://www.gold-eagle.com/editorials_05/chapmand112205.html

Now we have control freak Harper looking for a fresh mandate to keep screwing the country over. Charles, don’t expect Harper to publish your M3 numbers; he likes to keep everyone in the dark…makes him feel that much more powerful.

#58 WetCoaster on 08.31.08 at 3:05 pm

The banksters are finally going to get what’s coming to them! That is if the government doesn’t bail them out first.

Wait until the beleaguered tax-payers figure out that was the plan from the very beginning.

#59 Re-diculous on 08.31.08 at 3:33 pm

#54 Mountain Girl

Very well put ! I couldn’t agree more.

#60 Brent on 08.31.08 at 3:40 pm

Canada is only second to the U.S for plummeting household saving rates for countries.
Here’s the url…

http://tinyurl.com/5tzaxx

Very good read

#61 Carm on 08.31.08 at 5:14 pm

They simple matter of fact is that more people are losing their jobs in Ontario, listings are going up, prices are going down and if you speak to any mortgage broker, there are far less people looking to take on a mortgage. That is a recipe for disaster.

I myself was looking in purchasing a 1000 sq loft here in the Toronto area for $319,000, I backed out of the deal at the last minute when I saw the recent market trends. Today that same loft is still being listed, however, at $300,000. Other condominiums that I was looking at have dropped on average of $15,000.

The lesson here is don’t believe a word real estate agents tells you. The market is slowing down and will hopefully plumet.

#62 brazer on 08.31.08 at 6:23 pm

#54

“The idea that my tax dollars might be used to bail out the people who bought houses they couldn’t afford out of ignorance and greed, which consequently contributed to a housing situation that is now squeezing out lower income families, is pretty appalling. Sort of how I felt when I found out that my tax dollars had pretty much been swindled in the sponsorship scandal. That’s not what that money is supposed to be used for.”

fraud and greed/ignorance are not the same thing. this analogy is unfair.

#63 mike on 08.31.08 at 9:34 pm

Housing Bear and cmh make some superb points.
Garths posts may not be earth shattering but show no tie to any monetary gain by his position. As for realtors ala Chipman…. My experience is they perceive themselves as absolute authorities with little to no credentials to boot. They tend to view themselves as rock stars or celebrities but are mere commissioned sales people. I love that some of them put their picture on their cards or the house listing sign as if Brad Pitt or Warren Buffet were selling the property. I have had many a spirited discussion with several realtors whose only line of argument comes from their brokers and the questionable statistics of their own associations.

As for cmh talking about a looming depression …. This is not a far fetched possibility. Conservative estimates of sub prime and credit card debt to be written down hovers between 1.5 trillion and 4 trillion . If that is not a scary global picture I am not sure what is.

#64 charles on 08.31.08 at 10:05 pm

AM (#57)

The United States quit publishing its M3 money supply statistics a couple of years ago. Statistics Canada releases our M3 Money supply statistics on a regular basis. In the last year our M3 money supply has increased by 13.2%

http://www40.statcan.ca/l01/cst01/indi02a.htm

Over the last 5 years our M3 money supply has expanded by approximately 61%

http://www40.statcan.ca/l01/cst01/econ07.htm

With this amount of new debt being injected into our economy every year, I don’t think anyone should be too surprised that the price of houses in Canada got to where they are now. What surprises me though is why this “bubble” did not correct itself long before now. Garth, I think your “greater fool” theory is applicable to all asset prices, not just house prices.

The chart of the M3 money supply in the U.S. (that is in AM’s link) shows that the M3 money supply in the U.S. expanded by 5 times from 1980 until 2006. I am sure a M3 money supply chart of Canada over the same time period would show a similar result.

The following is from an article on the Financial Times web site titled “Citigroup chief stays bullish on buy-outs”. This article is dated July 9, 2007

“Chuck Prince on Monday dismissed fears that the music was about to stop for the cheap credit-fuelled buy-out boom, saying Citigroup was “still dancing”.

The Citigroup chief executive told the Financial Times that the party would end at some point but there was so much liquidity it would not be disrupted by the turmoil in the US subprime mortgage market.”

“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing,” he said in an interview with the FT in Japan.

His comments come amid growing fears that problems in the US subprime mortgage market, rising interest rates and concerns about loose lending standards could lead to a downturn in the leveraged finance market.”

“The depth of the pools of liquidity is so much larger than it used to be that a disruptive event now needs to be much more disruptive than it used to be,” he said.

“At some point, the disruptive event will be so significant that instead of liquidity filling in, the liquidity will go the other way. I don’t think we’re at that point.”

“Citigroup is a leading lender to private equity buy-outs and has been involved in several financings that have run into problems. Bond and loan deals arranged by banks have been pulled after investors demanded higher premiums and more protection.

This has raised fears that the banks, which aim to pass on the debt to other investors, could get caught if the market dries up. ”

The following is the link to this article:

http://www.ft.com/cms/s/0/80e2987a-2e50-11dc-821c-0000779fd2ac.html

#65 Noz on 08.31.08 at 10:45 pm

I think what Turner is saying is highly controversial to a large portion of the population.

Even up to today, there are still people who are in full-scale denial about the housing market. I frequent Chipman’s blog all the time and you will find people there who are like that over there too.

So it really depends who you speak to in regards to who thinks what Turner said.

With that said, being surprised is one thing, being appreciative of the magnitude of what is said is totally another.

Believe me. Don’t believe me. I could care less. This is my view of the market, and events will prove me prescient or an idiot. Regardless, I am following my own advice. — Garth

#66 squidly77 on 08.31.08 at 11:15 pm

what Garth says is very unpalatable to many indeed
nobody wants the party to end..the whole world went on a drunken spending orgy and soon it will be time to pay
once people realize that the housing ATM has been permanently closed the hang over will begin..youll have one of two choices to make..the smart people will unload their houses as soon as possible realizing that their future losses will be far greater..the not so smart will close there eyes and plug their ears and have another drink
its classic manias, panics and crashes
remember the old saying you used to say at school ?
first one outs a rotten egg but the last one has to eat it
its to true..Canada will not be granted a special pass on the housing crash

#67 DD on 08.31.08 at 11:56 pm

#38 Charles #57 AM ….

So it is the Liberals and or the Conservatives to blame for this mess? Or even the banks … So typically Canadian. Canadians have to look in the mirror. If you are up to your ears in debt who is to blame? The government made you borrow the money? The bank made you borrow the money? YA OK.

So this time I will vote x (Liberal, Conversative, NDP, Rhino) because they will tell me what is right and what is wrong and how and where I should spend my money.

…. I have a bridge to sell you two …

#68 DD on 09.01.08 at 12:09 am

#65 Noz,

I do agree that Turner is highly controversial to the population that cares to listen to other opinions. When borrowing $300k or so for an asset there should be a little education involved. People should seek many opinions with this amount of cash involved.

Thankfully we all don’t have to sleepwalk into the most important financial decision in our lives.

#69 Yet Another Albertan on 09.01.08 at 12:10 am

#52 “Says alot about the guy….. and you for defending (plugging) a loser (yourself) like that.”

Jim_S, yeah, you’re worked up alright. I didn’t do any defending, just pointed out your mistake. Chill.

#70 Just Waiting on 09.01.08 at 12:24 am

I’ve been reading this blog for a couple of weeks now and have found it very informative. Really want to thank Garth for sharing his research with us all. I wish I had found this website sooner as my fiancee and I nearly bought an over priced brand new inventory home in GTA for $400,000 last month. Good thing we decided to follow our guts and wait.

I decided to follow some resale listings in certain areas of the GTA and after a week found that some of the listings just seemed to vanish (assumed were sold). After reading on this blog a bit and hearing about how some Real Estate agents remove listings and re-list again as common practice I decided to google the old MLS numbers.

The following Thornhill home was listed for originally $599,000 but under it’s new listing on MLS is listed for $659,000 that’s a whopping $60,000 more from the original posting. Seems like the Real Estate agents are playing us consumers for suckers! Feel free to see for yourself below.

A snap shot from Aug 9th from Google:
http://72.14.205.104/search?q=cache:5a2hgCUA6xsJ:www.sutton.com/listings/view/N1440689+N1440689&hl=en&ct=clnk&cd=1&gl=ca&client=firefox-a

Current MLS posting:
http://www.mls.ca/PropertyDetails.aspx?vd=&SearchURL=%3fMode%3d0%26Page%3d1%26vs%3dResidential%26ret%3d300%26sts%3d0-0%26beds%3d0-0%26baths%3d0-0%26pro%3d2%26zip%3dL4J%2b8R6%26mp%3d0-0-0%26mrt%3d0-0-4%26trt%3d2%26of%3d1%26ps%3d10%26o%3dA&Mode=0&PropertyID=7466458

I was able to find one house listed under a new mls number

#71 Gord In Vancouver on 09.01.08 at 1:36 am

Post #54

<>

I’m a Conservative supporter but agree that the 40 year, nothing down mortgage was an incredibly stupid idea. Maybe they wanted to give baby boomers who were creamed by the tech boom a chance to get some of their money back (right before retirement).

If a Canadian housing crash occurs, it will hit Vancouver harder than Katrina hammered New Orleans. The BC government has already set a precedence by giving minimal assistance to leaky condo crisis victims; hence, a full-scale bailout to real estate speculators is highly unlikely.

#72 Noz on 09.01.08 at 2:41 am

Uhhh…Garth…calm down…I view the market the same way you do.

It would be nice if you could at least distinguish when someone is agreeing with you against someone who isn’t.

#73 Mike.Slob on 09.01.08 at 3:36 am

However,RE prices in GTA-WEST (Burlington,Oakville,Mississauga,Georgetown,Caledon)
are higer between 70-120k from January 2006.
Now the builders new townhouses are even 400k in Mississauga(Kenedy Rd/Eglinton Ave W)
Can we see the same RE prices again from 2006 ?
GTA West has the biggest growth in Ontario!WHY?

#74 mike on 09.01.08 at 4:10 am

Noz controversial or not… When any product’s price goes beyond the products potential purchaser to afford you inevitably end up with some sort of correction. Either the price comes down or the buyer goes somewhere else. People may choose to rent, move to a cheaper part of town, move to another city or province.
Bottom line … Prices can’t go beyond the means of the purchaser to pay, unless you create a sub prime or no money down scenario and juice the market. This the essence of what Garth has been saying for some time now. Not really controversial.

#75 mike on 09.01.08 at 9:01 am

Just waiting …. Most of what I have seen in Toronto has been house price reductions…. Nothing like what you listed… A 10% INCREASE in less than a month. Most agents relist to hide the fact that it did not sell for some time and that the price is reduced. This price increase tactic is truly a new one. Perhaps call the agent and see what he/she says as to why the increase. Should be an interesting conversation..
A good buyers agent should point out to any potential buyer that the price went up recently. Strange how it can take months or years for prices to go down but days or hours for it to go up. Now we all know why people don’t trust agents.

#76 lgre on 09.01.08 at 9:38 am

just waiting – it’s a good thing that you are wating for a while, there is no secret that RE agents are crooks..I think that majority of people know that. unfortunately the whole RE market (MLS) is a monopoly and it’s hard to sell or buy without an agent (easier to buy of course). i have also seen houses on MLS for 2 different prices by 2 different agents. I have seen the tricks that these vultures try to use.

I remember before the boom, my parents were looking for a house with their agent, they found a house they liked, we asked the agent to pull up some comparables, she insisted that their was none and that the house was priced right..well to my better judgement i didnt believe her so I made a phone call to someone I knew who was an agent, I had him pull up the area and we found 4 houses to compare to that were sold in the last 60 days, making that phone call was a good thing since I found out that the house my parents were looking at was over priced by $40k and so that was the reason she was hiding it. I’m not talking about $1mil house here, thery were all in the $200′s. Well let’s just say that was the last house my parent’s visited with that agent.

#77 Mountain Girl on 09.01.08 at 10:50 am

#56 DD –
In all honesty, I don’t know if the liberals would do a better job. I’m not too thrilled with any of my choices at the polls, quite frankly.
While I think he had many flaws, I do feel that Paul Martin was a very competent finance minister. However, there were plenty of things about the Chretien liberals that I did not support.
The current government does not have my confidence at any level. I think their policies on just about everything are very worrisome, and I am very concerned about what could happen if they gain a majority.
But like I said, I’m not too keen on my alternate choices, either. It’s frustrating that we’re facing an election at all.
I also agree with you that at some point, the US government had to do something to avoid a complete economic meltdown. I think there were a lot of consumers who were victims in the mortgage fraud that was happening in the States. They have my sympathy and I do support trying to find a way to help them, instead of bailing out banks.
Contradictory to my “no hand-outs” sentiments of earlier posts? Absolutely. But in these cases, I think the acts of unscrupulous mortgage brokers were criminal and that there were many people who were victims of crime, not their own foolishness.
Economics shares some fundamentals with ecology: everything is connected. All of us savers who have been diligently investing and saving and living within our means are still going to be affected by economic downturn. That’s why you won’t find me gleefully celebrating a housing crash. I know that will hit me in the wallet one way or another eventually, even if it does also provide economic opportunity housing-wise.
#62 Brazer –
By bringing up the sponsorship scandal, I was trying to make the point that the misuse of tax dollars is a betrayal no matter what the incentive to do so. And that I wasn’t touting the liberals as the solution to all our woes – obviously, they have some serious flaws. But I still cannot believe that the conservative government, with the amount of information and economic advisors at their disposal, made a choice that had such potential to exacerbate the effects of a suspiciously robust housing market.
I consider that gross negligence.
And in my books, that is as bad as fraud. You may not agree, but that’s how I feel.

#78 rant in Calgary on 09.01.08 at 11:45 am

Garth,

This is getting better all the time. The momentum and diversity is growing.
You are not some “crack-pot” who is predicting doom and gloom that no-body is taking seriously. Obviously you are the “Bain to realtors”. The point that Rob Chipman has come here to call you out has proven that. All the other bickering can be tiresome but entertaining and probably part of the process to the next stage.

#79 AM on 09.01.08 at 12:21 pm

DD #67

Keep your bridge. You obviously misunderstood my comments. My comments weren’t to specifically lay blame on one party or the other, but to point out that either one of the two recent governments have their hands tied in certain situations. That said, the Conservatives are not helping the situations that has been brewing over the last two years; that’s why we are, in part, on the same path of distruction as the US.

As far as hand-outs go, no. There should be none. The sad part is it will likely happen in one form or another. It’s usualy done is some creative way to baffle the general public.

My positoin is very well described in post #77. Mountain Girl, you seem to sum it all up quite well.

#80 Blacksheep on 09.01.08 at 12:28 pm

#65 NOZ,

Part of your comments,

“Many people Even up to today, there are still people who are in full-scale denial about the housing market. I frequent Chipman’s blog all the time and you will find people there who are like that over there too.”

So it really depends who you speak to in regards to who thinks what Turner said”

I agree with your comments.

I believe the people in full scale denial are going to be the worst affected by the economic slowdown / housing correction.

They are taking zero action to protect finances,
and continue to spend based on how they feel,
that every thing is fine.

#81 brazer on 09.01.08 at 1:03 pm

#78

The point that Rob Chipman has come here to call you out has proven that.

chipman knows the party is over. however, as a real estate agent, he also knows how his bread gets buttered, so he can’t concede.

not yet anyways…tick tock.

#82 shane on 09.01.08 at 1:36 pm

Garth, what about the housing market in old town markham? would this area drop the same as brampton,mississauga?

Shane

#83 Bailing in B.C. on 09.01.08 at 2:49 pm

Noz and Blacksheep.

You’re right. The info shared on this sight is contraversial because most people still think everything is honky dory. I’ve tried to warn people I know about what’s happening and they look at me like I’ve got two heads.

Friday night I spoke with a friend of mine who is a high end interior designer. She deals with multi million dollar sfh and upper 100k renos. When I suggested that house prices are going down, she was incredulous. “They can’t” she said “the economy’s doing too well”.

Some otherwise intelligent people don’t even read the newspaper let alone put any real research into their finances.

Just round the corner from me someone is doing an “extreme makeover” on a house. Don’t they look on the mls? If they did they would see that the last “extreme makeover” house in the neighbourhood is STILL on the market after six months and a price drop of 60k.

#84 The Tallyman on 09.01.08 at 4:21 pm

Lookin Out For #1

Is it possible the real estate stats are being fudged to allow zealtors enough time to get top $ for their own investment properties?

Is it possible that once their asses are safely in the lifeboat they begin the fire sale of joe publics property?

#85 Jonathan T on 09.01.08 at 4:40 pm

80,000 doesn’t include the explosion in non-MLS listings in the past year, such as those that can be found on propertyguys.com. There are about 5,000 listings on that site alone. Last year there were barely any.

I think this can be explained by stalling prices. As real estate prices stall, more people try to sell their house themselves so they don’t lose money on the transaction.

#86 MOLD on 09.01.08 at 4:54 pm

#70 and #75

FYI,
THE OWNER OF THE HOME DECIDES WHAT PRICE TO LIST IT AT, NOT THE AGENT.

The agent will bring recent comparable sales, suggest a range, since the list price simply means the seller will look at offers UP TO the list price. This home looks seems like a situation many are in or will be soon, the paid to much, are looking to minimize losses and looking for..yes… a greater fool.

#87 squidly77 on 09.01.08 at 7:52 pm

question..when you find the proper realtor to sell your home which ones would he/she show first ?
yours..or his and his fellow realtors
you gotta know that they are wheeling and dealing with one another

#88 Rick on 09.01.08 at 7:52 pm

#84 The Tallyman on 09.01.08 at 4:21 pm Lookin Out For #1

Is it possible the real estate stats are being fudged to allow zealtors enough time to get top $ for their own investment properties?

Is it possible that once their asses are safely in the lifeboat they begin the fire sale of joe publics property?
————————
Only one chapter of the must needed investigation of the Realturd industry.

#89 Shifty on 09.01.08 at 8:42 pm

EMILY FLYNN VENCAT

The Associated Press

September 1, 2008 at 8:48 AM EDT

LONDON — The pound fell to an all-time low against the euro on Monday after Britain’s Treasury chief Alistair Darling said the country was facing the worst economic crisis in 60 years.

Mr. Darling’s comments over the weekend were underscored by a raft of new economic data — covering everything from house prices and mortgage lending to manufacturing — indicating that Britain is on the brink of a recession.

In morning trading, the euro hit a record high against the pound of 81.40 pence. Around the same time, the pound fell to its lowest level in over two years against the dollar, to just over $1.80.

In data out Monday, a Hometrack Ltd. survey revealed that house prices dropped 5.3 per cent in August to £167,000, a year-on-year fall that was the biggest since the research firm launched the index seven years ago.

“A recovery in the housing slump, even back to zero monthly growth, is still some way off,” said Richard Donnell, director of research at Hometrack. Economists at Global Insight are predicting further house price falls of 12 per cent in 2009.

#90 marcus aurelius on 09.01.08 at 8:49 pm

Just Waiting, Mike, et al:

The scam of ‘re-listing’ has been pushed to the limit in Toronto. One agent with two first names seems to have bought his way into the National Post on a weekly basis, and continues to tell that ‘journal’ that houses he’s had on list for months and months have a DOM (“days on market”) of a few days. Within the last few weeks he listed a ‘sold’ property as DOM 8 days,when anyone using MLS knew he had the listing himself for over a year (and who knows how long another agent may have had that dog). One wonders whether the National Post Real Estate Section can afford a fact checker. Most likely (given agent/broker ad revenue) they simply agree to pass on the lies from the agent. My forbears coined the phrase ‘caveat emptor’ centuries before you were born, but Toronto agents take the downside of believing anything you read to a new extreme. The agent in the above example is a Hong Kong emigre.

A Russian agent (let’s call him “Boris”, to be generic) had a listing for about a year that bopped from 1.175M to 1.168M to 1.150M. It sat on a bad street north of Steeles, near Bathurst – depression alley, unless you’re a foreign rube. One day Boris probably said “Hey vendor, I’m pretty smart – top 100% – let’s relist tomorrow as a new listing for $1.250M!” Luckily, no sucker surfaced after that little stunt. The listing went to a new agent last week and comes out at $1.128M today, for all you interested large-mouth bass. I’ll bet a Roman Legion’s standard that this shitpile will sell far closer to, if not well under, $1M. Moral of the story, Just Waiting, is that in Toronto “list prices” are fast becoming meaningless because they have been gamed to their very limit and the stooges at CREA (starting with Head Cover-Up Stooge What’sHerName) have no desire to address the churning and list price gaming (much less the rumoured agent-to-agent ‘inside transactions’ to artificially inflate ‘comparables’ in an area – which should be covered in some Criminal Code subsection, even in an ethically-challenged Province like Dalton’s Ontario).

Consumers need to see SALES PRICES available as public information through public registry databases. This should be a consumer protection law issues in every province.

#91 Bobby in Victoria on 09.01.08 at 9:05 pm

How can you spot the realtor……They are the ones still saying that prices are going to go up so you had better get in now.

In a few months they will be the ones looking for a new job.

#92 Jeannie on 09.01.08 at 9:09 pm

Just read in The Edmonton Journal that all of the new townhouses at Predator Ridge in B.C. were sold almost immediatley.
This is a surprise, apparantly these condo’s start in the high $300′s.
Not large spaces, but luxurious. Hmmm.

#93 Caffeind on 09.01.08 at 9:09 pm

Garth,

I would suggest showing showing a little more tact in your responses. I’ve been reading RC’s blog for a couple of years now, and as much grief that he gets for not allowing others to put words in his mouth, he comes across to me as an honest and hard working guy. I wouldn’t hesitate to use him as an agent when the meltdown is over, and I’m ready to buy.

Rob was simply doing you the courtesy of acknowledging that a comment he made on his blog was pushed into your comment section by one of the many idiots that frequent his site. A person whose own inadequacies and shortcomings leave them without the spine to show their face when leaving that comment. What a pathetic existence that must be to endure. Personally, I feel for them.

nonetheless, Chipman is one of the most knowledgeable people involved in RE in the GVA that I have come across. He tells it like it is. Maybe next time instead of hurling rather lack luster insults, you’ll acknowledge the specifics of his comments and reply appropriately.

As he said, he was asked about a specific article you wrote, and found it to be mediocre at best. Why don’t you explain to all of us why he was wrong about that specific article, and what exactly makes you think that the opinions you expressed should impress people. As he mentioned, a lot of what you say has been expressed by many people that frequent his site for some time now. Who knows; maybe that’s where you get your ideas from.

Get some class.

Ok, tell me how I dissed Mr. Chipman. I suggested he read more than one article (of 100) before he becomes an expert on me. He may be a good realtor. He’s no debater. Besides, I don’t write this blog to suck votes, win popularity or try to convince anyone of my wisdom. This is about where we’re headed. Live with it. — Garth

#94 T.O. Girl on 09.01.08 at 9:14 pm

Looking at hot areas in central and north toronto area in the market for a house. Does anyone think these areas are immune to price declines being that they are so high priced and many people having high incomes??

#95 sarcasm on 09.01.08 at 10:25 pm

Mold,

FYI,
THE OWNER OF THE HOME DECIDES WHAT PRICE TO LIST IT AT, NOT THE AGENT.
———————————————————-
I’m sure the average homeowner:
Orchestrated the “low list price game” to get multiple offers.
Got there buddies involved to get phantom offers.
Fed the newspapers “spin” to get panic buying.
And other questionable practices sly enough to be legal.

The Real Estate industry may not have pulled the trigger but it did supply the gun, loaded it and put it in the inexperienced hands. Now, when people are figuring it out, you innocently point the finger at your clients and say it wasn’t me. Who was the professional here?

#96 lgre on 09.01.08 at 10:28 pm

I must be missing something here, everyeday someone comes on this blog to ask what areas are going to tumble and what percent, is there a psychic in this forum?? I need to know since I wouldn’t mind winning the lottery and not bother how much I spend on RE.

There will be a correction in all areas, some higher some lower.

High income has nothing to do with it since it has become the norm to live well above your means in canada and the U.S..that is the reason why we are in this mess to begin with.

#97 squidly77 on 09.01.08 at 11:23 pm

how low will it go
click on the graphs and keep in mind that Canada is about 2 years behind the US housing price crash

#98 squidly77 on 09.01.08 at 11:28 pm

i meant to put this in my last post
Calgary..looks similar dosnt it

#99 neutral on 09.02.08 at 3:15 am

Many of you so jealous about RE agents’ wealth and so happy they will loose their source of money (probably). “They will loose the job” – HAHAHA. They are not so stupid and knew what’s coming. Over past 5 years they made so much money from air, so they can spend next 5 years on Hawaii doing nothing – kind of a vacation until next bubble. But you, guys, continue working in order to make your little bucks and sit here on this site expressing to each other your hopes for cheap RE. They are all laughing at you. But don’t beat me – I’m not RE agent.

#100 Noz on 09.02.08 at 3:30 am

Lookin Out For #1

Is it possible the real estate stats are being fudged to allow zealtors enough time to get top $ for their own investment properties?

Is it possible that once their asses are safely in the lifeboat they begin the fire sale of joe publics property?

I don’t see why not. US government officials use this tactic all the time to cover their asses. People would be incredibly gullible if they actually thought most of the news/info they receive about any monetary related event isn’t filter and biased to give them a sense of security.

#101 Noz on 09.02.08 at 3:32 am

Just round the corner from me someone is doing an “extreme makeover” on a house. Don’t they look on the mls? If they did they would see that the last “extreme makeover” house in the neighbourhood is STILL on the market after six months and a price drop of 60k.

Well…it only takes ONE dumbass to rebuy the property.

#102 Housing Bear on 09.02.08 at 6:43 am

#93-

Rob Chipman, is that you? Just asking…

#103 Expat in NC on 09.02.08 at 8:33 am

BC Economic News

ca.news.finance.yahoo.com/s/01092008/2/biz-finance-experts-downgrade-growth-forecasts-b-c-economy-hot.html

#104 Mike B formerly just Mike on 09.02.08 at 9:18 am

Not to beat a dead horse BUT we have yet to hear what condo project was cancelled in mid town Toronto as pointed out by a previous blog topic

#105 lgre on 09.02.08 at 9:27 am

neutral – yes some agents did manage to scam alot of people over the years and did make good money, but there is alot more who made not so much money, as I know a couple of them. The ones that made money will end up using it up anyway and not in Hawaii as you are suggesting. When they have to pay their $4000 mortgage on that mansion they bought because ‘RE can only keep going up mentality” I’m sure the labour agency’s will welcome them with open arms to fulfill those $8/h jobs. LOL

#106 smwhite on 09.02.08 at 9:59 am

#99 Neutral,

You don’t sound very neutral, or very intelligent for that matter. You comment has a very pro-realtor slant doesn’t it?

Jealousy?

Their smart and pulled the wool over your eyes, everyone else here bitching and moaning is a sucker.

You sound like an asshole, BANG BANG

#96 Igre,

I concur, there are some thick skulls here asking Garth and others about their personal area, is it “different”? You know the one where fundamentals and logic will not apply.

Nobody is going to be able to forecast right down to the 100000th decimal place, so stop asking, your wasting band width…

#107 smwhite on 09.02.08 at 10:16 am

I had the privilege on Friday of looking at the MLXchange for my area with a realtor pal and will say that there are a lot of arrows pointing down.

Looks like a lot of homes with 10% drops in original asking prices, especially in the 400K and above range.

I’m sure there has to be some sort of spin the industry can put on it, how about, NEVER been a better time to buy!

It was my favorite hit of 2007 from the USA realtors…

It was my favorite remix of 2008 from the USA realtors…

Stay tuned for its re-release in Canada for 2009.

#108 city boy on 09.02.08 at 10:34 am

A wildcard is the impact of the U.S. housing collapse on the U.S. economy. If the latter is pushed toward recession by the withdrawal of the huge wealth effect from appreciating property values, then Canadian exports will be hit harder and the Canadian housing market may not be in for such a soft landing after all.

#109 Greg on 09.02.08 at 11:57 am

Canada’s economy will slow to a crawl: OECD
September 2, 2008
CBC News

The OECD has chopped its outlook for Canada for 2008 and now predicts the national economy will expand at the second slowest pace in the industrialized world.

The Organisation for Economic Co-operation and Development said Tuesday Canada’s economy will expand by only 0.8 per cent for the year, down from its previous prediction for annual growth of 1.2 per cent.

Only Italy, which the international organization forecasts to grow by a feeble 0.5 per cent, would perform worse than Canada among the G7 economies if the prediction holds.

The OECD, which released the new numbers in its interim economic update, said the global economy is plagued by the credit overhang from the housing slowdown in the United States and the other Western economies.

“The downturn in housing markets is still unfolding, with reduced credit supply likely adding to pressures,” the organization’s chief economist, Jorgen Elmeskov, said in an analysis accompanying the forecast…

http://www.cbc.ca/money/story/2008/09/02/oecd.html

#110 lizzy on 09.02.08 at 12:13 pm

-to sarcasm
So, what your saying is, you love real estate agents? Ok thats good. I can sense your favorite show was flip that house hey?

Its funny how, there are 100,000+/- RE Agents in canada and everyone here seems to thinks they are all scum, and they all lie and cheat, and that they are not human and dont have families and children they love, and that no one loves them, and they all own a “mcmansion” and they will all be out of work etc etc. Its just laughable. I was an agent in Calgary in the early 80′s. I still did good amount of business, since sales do not stop because prices go down or crash. They will go lower for sure, and they seasoned and good agents will be fine. Some will make great money as they have seen this before and are preparred. Only the ones who are really new, and who morally and ethically should never have been in this business in the first place will disappear, and I think that is good. Look for 20,000+ agents to hand in their license over the next few years canada wide.

#111 $fromaSia on 09.02.08 at 12:20 pm

Garth, perhaps you can dig up what the banks are now lending since I hear that they are tightening thier belts with Octobers 40 year ammort change to 35 comming up.

#112 brazer on 09.02.08 at 1:07 pm

#103

“Not to beat a dead horse BUT we have yet to hear what condo project was cancelled in mid town Toronto as pointed out by a previous blog topic”

i bet garth will be sharing this info shortly. likely in his next couple of posts.

#113 brazer on 09.02.08 at 1:09 pm

http://ca.news.finance.yahoo.com/s/02092008/2/biz-finance-tumbling-commodity-stocks-sent-tsx-retreating-283-points.html

“The Canadian dollar lost 0.59 cent to 93.57 cents US a day before the Bank of Canada makes its next announcement on interest rates.”

where are all the posters who said that the loonie would continue its flight north of a buck?

is it starting to sink in that we’re in a recession, or not yet?

#114 NCoffee on 09.02.08 at 1:28 pm

Hi all,

I’m basically new to real estate, although my wife and I have owned a house in SW Calgary (Canyon Meadows, well established neighbourhood by Fish Creek & train) for the last three years. I found this blog via Garth’s book, and suddenly am panicking. I respect the opinions of the people who post here and have a very basic question: considering we’re already in this market and we still have 22 years of payments to make, is it a good idea to get our house in order and try to sell in the spring and get out of this market asap (and maybe rent somewhere until prices go down Canada-wide)?

I realize buying now in Calgary would be a bad choice, but what does someone do when they’re already in? Any advice would be appreciated; just hoping for someone with experience to point us in the right direction to learn more (and hopefully not completely screw ourselves through inaction).

Thanks!

#115 DJ on 09.02.08 at 1:34 pm

To #99 neutral
What was your point Mr neutral?
I do not see any value in sharing the speculation of the scale of income this trade can manage during the hype. It would be really interesting to know how this type of people can manage income or luck of it in the challenging environment.
I was told that not having your own position on the subject is kind of silly and usually indicates the luck of knowledge. Would you be so kind to decipher your message for the ordinary readers? Perhaps you have some good information beside the amount of money RE had generated from the past market conditions.
Thank you in advance

#116 Andrew toronto on 09.02.08 at 2:03 pm

Looks like a Federal election is on it’s way per the papers .. possibily has early has oct 14/08.. I wonder why the rush Mr harper know something we don’t like a recession coming soon if not already her..
Just my opinion..

#117 G on 09.02.08 at 2:22 pm

Victoria’s prices took a real hit!

Sales skidded to 517 in August, down from 846 in August a year ago. July saw 616 sales. The average price of a single family home slid to $549,914 in August, down from $578,000 in July.

The average price of townhouses edged down to $413,994 in August, from close to $455,000 in July.

http://www.canada.com/victoriatimescolonist/news/story.html?id=bf8f961a-145e-4ec4-a4d2-774638badb4a

#118 smwhite on 09.02.08 at 2:29 pm

#114 NCoffee

I’ll assume that you have three years in which should put you at 2005 if I’m not mistaken. Take out the calculator and figure out what you will owe on your home in two years time when you renew your mortgage for the next twenty years at 1% to 3%.

Those in it for the long haul have nothing to worry about. Its those that were speculating and extracting “future” gains out of their home’s equity, that if the hammer falls, might need some anxiety pills.

The way I see it, even if an event happens and you have to walk away, well you’ve been paying expensive rent.

We’ll go through this act all over again in 10 – 15 years…
Good luck

#119 Rasputin on 09.02.08 at 2:33 pm

NCoffee – If you have lived there for 3 years chances are your house price nearly doubled. If you were planning to live in Calgary and are otherwise happy with your house, I would stay put. Others may disagree but once you own the place, at least 50% of it anyways, it’s price just becomes a number. Jumping out (like I did, but my situation is different) may work out, but it may not. Then all you have to show for it is a couple of moves and all that entails. Also consider the effect on moving for spouse and children, schools etc, if that applies. It’s a pretty personal thing. I am out because of a divorce. I have a substantial nest egg and no desire to buy until prices drop, a lot. If they don’t, that’s my problem. Like I said it depends…

#120 Rob in Onterrible on 09.02.08 at 3:39 pm

#114 NCoffe: Don’t panic. If you have a good, stable job and can pay the mortgage then just keep living there. If you need to sell in the next few years then the value will be lower but if you paid a big down payment even then you’re fine. Dumping property by getting scared is what causes the price to go down. It is the exact opposite of fear of not getting a home because you’ll be priced out of the market. A home is shelter first and an investment second. Not even a good investment at that.

Full disclosure: I’ m not a realtor, don’t own a home myself and currently rent. I believe that home prices will drop but don’t really look forward to that because of the negative effect that will have on the economy and indirectly on my job.

I haven’t posted in a while because Garth’s forum is descending into a shouting contest and getting out of touch with the main focus of his blog.

#121 patriotz on 09.02.08 at 3:47 pm

A couple of points ncoffee:

- Calgary is already down more than 10% off peak, although it doubtless has farther to go I would wonder, given transaction costs, whether selling now to buy back in later is really that attractive.

- It would appear you bought in 2005 or earlier (22 years to pay), if so the price was well within the historical norms (the big runup was afterward) so I don’t think a bust would put you underwater anyway.

Just my opinion of course. People aways ask these questions when it is nearly too late, selling a year ago would have been a real no-brainer.

Take a look at this chart and keep in mind it only goes to the end of 1Q2008 and the market has declined since:

http://cuer.sauder.ubc.ca/cma/data/ResidentialRealEstate/HousingPrices/housing-pri-calgary.pdf

#122 EverythingZen on 09.02.08 at 4:06 pm

^#93 Ok, tell me how I dissed Mr. Chipman. I suggested he read more than one article (of 100) before he becomes an expert on me. He may be a good realtor. He’s no debater. Besides, I don’t write this blog to suck votes, win popularity or try to convince anyone of my wisdom. This is about where we’re headed. Live with it. — Garth

I respectfully disagree with you Mr. Turner. I sincerely believe that you are being very disingenuous about your intentions with this forum. You do have an agenda- to further your political ambitions primarily and to generate buzz around your book secondarily- and that agenda is very apparent and obvious.

There is nothing wrong with having an agenda so long as it is disclosed.

Peace & Kindness

Shove your P&K. How’s that for campaigning? — Garth

#123 David on 09.02.08 at 4:07 pm

Ncoffee not having any exact numbers makes it a bit tough to make a call or ask anonymous strangers on a discussion board what is right for you.
You will first off have to look at your equity position in your current home versus the probablity of future price declines in Calgary. Even selling at today’s somewhat discounted prices might give you a chance to lock in a profit that might not be there several years from now.
Fish Creek is certainly a mature desirable neighbourhood in Calgary and that is a plus.The hard part is speculating in future interest rates and price declines. If your hard earned equity faces the prospect of being rubbed out in the next 7 years, probably sell. If you bought at a reasonable price and can afford the mortgage for the next 22 years stay put.

#124 My_View on 09.02.08 at 4:42 pm

All bubbles are a popping! Take a look at the TSX. Fire sale…….

#125 neutral on 09.02.08 at 4:48 pm

DJ:
My point was: greedy agents, having got the big amount of easy money, not necessary to stay in now survival RE. If you won a million, will you stay on your $8/hr job? Probably, not. So, why agents with their big bucks will survive in the dead industry, if there are a lot of options for investing their money and make their good life aside of RE? So, don’t worry about agents – they are fine.
For all others: I’m neutral, because I bought 5 years ago (as I mentioned here), so I’m not in this game of hoping for something either bad or good.

#126 Dave on 09.02.08 at 4:56 pm

EverythingZen,

In Yoga there is a term “non-violence” (or “Ahimsa”). http://en.wikipedia.org/wiki/Ahimsa

Your misrepresentation of Zen on this blog is disrespectful to that very noble state of mind.

If you genuinely maintain a Zen approach to life, I request that you give careful consideration to the passive-aggessive violence that your posts inflicts on many on this blog.

On the other hand, if you are just winding people up then you are desecrating the public perception of a noble way of life which many great and humble practioners have devoted their entire life to studying.

my 2 cents.

regards
Dave

#127 Dawn in Calgary on 09.02.08 at 4:56 pm

We finally have the August Calgary stats from CREB

Calgary Metro Area Single Family Statistics
New Listings Last 24 hrs: 46
Active Listings: 5,551
Sold, Last 30 Days: 1,088
Avg Sale Price, Last 30 Days: $ 440,469
Median Sale Price, Last 30 Days: $ 398,000

#128 Rick on 09.02.08 at 5:12 pm

http://www.reportonbusiness.com/servlet/story/RTGAM.20080902.wrmortgagebonds01/BNStory/Business/home

#129 The Tallyman on 09.02.08 at 5:13 pm

#114 NCoffe

Personally,
If I purchased 3 years ago, I would sell if:
- I had positive equity in the property. This means getting as much $ for my property now… As prices continue to fall Spring might be too late!
Have to stay ahead of the clock and the herd.
While the crowd is still snoozing I’d be tip toeing toward the exit.

- I would sell even if just to break even. I’d think long & hard about the real world value of my $600,000 house. Before the feeding frenzy it was worth $250,000 and it will probably be in that ballpark again. Don’t want to be watching Buddy moving into the exact same house across the street for $250,000 while I, and the next few generations of 1st born children chisel away at our $600,000 mortgage. If ya bought at 600K and it’s worth drops to 250K you are still on the hook for the 600K!

And now for the Not so good stuff.
- I would not sell if I bought in really late and would lose major – major equity. In this case I hope I bought the house I always wanted and I would be happy to tune out all the real estate hoopla and start living. As long as I could afford to keep paying on the house that caught my eye that’s what’s important… A good home.
Who knows what windfalls the future will bring.

- Value is in the eye of the beholder, I would never buy jewelry… I could buy far more ice cream with that money! (lol)

#130 Sudcouver on 09.02.08 at 5:41 pm

Garth,
Im a Conservative, but given your response to #122, I would vote for you anyday.. Awesome!

#131 $fromaSia on 09.02.08 at 5:57 pm

As per #122, Garth time to kick A$$!!!

I hope the media fully understands what CP/Flaherty has done and how it has screwed many Canadians before this upcomming election!

#132 $fromaSia on 09.02.08 at 5:58 pm

Cp wants a re-election before mainstream media gets word of Flaherty!

#133 womp on 09.02.08 at 6:21 pm

G,

Check out my blog (click my name) for a breakdown of the price drops in the different areas of Victoria over the last four months. (Ignore highlands, there were only 2 sales there, so it’s hard to pick a trend out of that).

Now annualize some of those numbers. If this keeps up Victoria is looking to be -20% or more off the market peak by next April.

#134 brazer on 09.02.08 at 9:13 pm

i wonder how many aliases chipman is using to post on garth’s blog?

hmmm.

#135 brazer on 09.02.08 at 9:54 pm

Deere to close Welland factory with 800 workers
http://www.thestar.com/Business/article/489163

“WELLAND, ONT. – Deere & Co., the world’s largest maker of farm machinery, is closing its factory in Welland, Ont., and moving the work outside Canada by the end of 2009, costing the Ontario economy another 800 manufacturing jobs.”

another sad nail in the coffin of the ON economy…

#136 Calgary rip off on 09.02.08 at 9:58 pm

What’s up with the Everything Zen turd? Why did they come on here to harass Garth? What is that crap? Everything Zen’s agenda is to passively accuse everyone else of having wants and needs and saying they are above all that. I hope Zenturd forgets to turn on the heat in the winter, they might understand more about basic needs. Everything Zen you are the most pathetic idiot I have read on here, and I grew up in Seattle where its laid back. You need to go out and have some Alberta Vodka before your zen wannabee tendencies self destruct, or better yet, see my advice about enhancing your third ray to become more like a sentient being with a giant holy chakra in your head by renting your properties to joyful tenants by taking a loss on your overpriced shacks in Calgary(see below): Meditate on that superenhanced spirituality while yogaing in the snow during December on your dead lawn.

That person is very passive aggressive, warped and twisted(the ZEN-wtf-turd). Everyone but them is aggressive, apparently. There isnt anything zen like regarding that person. They are just FU.

Maybe they should rent their properties out at a third of the cost if they would put their money where their mouth is. Do it Zen, it might help your bowels be filled with more mercy and make you more regular than uptight. I suggested this several weeks ago to no response. No response=they too need to make money on their rental properties=everything zen=FOS=STFU everything Zen.

#137 squidly77 on 09.02.08 at 10:32 pm

wow..Victorias prices just got womped..thanks for the link womp
prices always revert back to the long term trend..always
this guy a good common seance writer

#138 David_#3 on 09.02.08 at 11:50 pm

Election: oct 14th
End of 40/0: oct 15th

Coincidence?

#139 Brent on 09.02.08 at 11:51 pm

How can we stop these jobs from being outsourced outside the country? What will it be like for our kids? Will they have to go to India, China, or Mexico to work for 10 dollars an hour? Corporations can now do all their engineering and lots of production in cheaper places like India and Mexico… What happens to our tax base as this gets worse? People need to wake up and be pissed off. Really pissed off.

#140 Mike.Slob on 09.03.08 at 12:03 am

Garth!
For example how long will take to see price correction in GTA,because alredy we have 8 month decline of sales. I think until Fed. Bank still decrease the interest rate we can’t see serious price correction in GTA.
I can’t belive the new prices from builders are insane.
From feb/1996 the prices going up,only. Even the inventory level is the highest in Canadian History,but still no correction in GTA.To when?

#141 browntown on 09.03.08 at 12:23 am

hey garth! keep bear spin coming for vancouver bears, vancouver bears almost panic maybe correction not coming here! pent up demand bursting at seams! too many immigrant coming, developer stop future plans!

#142 dd on 09.03.08 at 12:32 am

#114 NCoffee

Take a deep breath and relax. If you have been in the market for three years you probably have a nice “paper” gain. Take the time to read and research. Don’t jump because others are telling you to jump. If you are not comfortable with the housing market but still at the crossroads ready the house for sale but keep researching. At least you could get the place cleaned up if your research points to keeping the house!

From the day I read Garth’s latest book to time of selling it was about four months. However I did a lot of research to back my reasoning to sell. I sold so I could: 1) walk to work 2) realize the gain 3) a very understanding girlfriend 4) I don’t have kids so I didn’t have to uproot them.

You might live in a great area or your kids have all their friends around. Futhermore if you live next to the C-Train (Calgary’s downtown train line) you will not have to worry as much about transportation costs. Your research will be quality and quantity.

I first read Garth’s books back in 2005 and he was predicting the downturn in housing sector. He was a little ahead of the curve in Canada (and bang on in the US) because Calgary had the big run up in 2005 to mid 2007. Calgary has backed off about 10% from the 2007 highs, but is that any reason to sell? It might back off another 10% to 40%, however, no one will know until after the events happen.

Just make sure you know why you are staying or selling.

#143 squidly77 on 09.03.08 at 12:40 am

seems unrelated to housing only its not..Ontario losing jobs to Mexico is no different than Albertas use of foreign labour in the tar pits..its a new age and things are changing..get used to it..and adapt or you will be in peril
as far as house prices going up and up you can just forget about it..its simply not happening not tommorrow not next year
get your finances in order and hang on
its gonna get rough out there

#144 dd on 09.03.08 at 12:42 am

#113 Blazer

The CDN buck will go up in the long term compared to the US. I read that large investors (money market people) are pulling their money out of the EURO because the recession is looking worse in Europe.

The worst is yet to come for the US market. The major banks have been bleading in the streets. How about the secondary banks? They are next.

Oh … and add in peak oil. Look out.

Here is a read to start:

http://www.sprott.com/peakoil.php

#145 lincoln on 09.03.08 at 12:48 am

Garth,
Im thinking of buying in the upscale neighborhood in Calgary called Forest Lawn. Prices there have doubled in a few years and, and some of my lawyers friends live there and say though most of Calgary is dropping like a kidney stone in a barn style urinal, the values there are still fundamently sound. Can you tell me how much you thinks the prices will drops on 36st sw in Calgary on October 28th at 7pm?
Thanques,

Signed,
A person who asks for financial/investment advice from unknown nameless people on a blog.

#146 dd on 09.03.08 at 12:51 am

#124 My_View,

True the TSX is dropping, however, it depends on what is dropping. Financials? Housing?

Shares in oil companies are dropping too. I think this is a buy.

#147 Finanzkrise on 09.03.08 at 1:02 am

Pretty much double digit YoY price drop in Cowtown in August… and #1 story status in the Herald online…

http://www.canada.com/calgaryherald/news/story.html?id=0d812be4-832e-4282-8e3e-fb518a82ec21

#148 Sam on 09.03.08 at 2:33 am

Mike.Slob, interesting comments you made about T.O. It is a mystery for me too, so far.. I am still waiting for the big day too. :)

#149 David on 09.03.08 at 2:54 am

It is reassuring to know that people like Chipman and Zen live in a world of splendid isolation, buoyant bubble markets and easy nothing down long term mortgages. Reality is about to rear its ugly head for people of this ilk in the real estate industry. There is certainly no compulsion to accept any of the arguments put for forward here by people who can see what is coming to a community near you in the very near future. Bearish sentiments are unlikely to inspire the eternal bull market optimists who seem to gravitate towards the real estate industry during bubbles. If you are looking for feel good inspiration maybe join a church or service club, but do not try to pretend that the post bubble price correction period is already past tense and magically the market is now more balanced than ever before. Irving Fischer made comments about the 1929 stock market being at a permanently high equilibrium level prior to a decade of economic misery experienced by our parents and grandparents. Enjoy that $10 latte while you can still pay for it from your commission cheques.

http://www.guardian.co.uk/money/2008/sep/02/houseprices.property

#150 jrochest on 09.03.08 at 3:35 am

The Zen thing is a troll. It’s an amusing troll, but it’s still a troll.

I will say this about RE blogs, they get the best kind of troll. People but real thought into the personas.

My take on Ncoffee is that you shouldn’t sell, since you bought in 05 or earlier. I’d only sell IF –

1) your property has appreciated insanely
2) you need to get out or anticipate getting out in 5 years or so (you’ll be leaving town, having a kid, etc)
3) you’re prepared to ask 30% below what you think you should be able to get and still make money.

Otherwise? Stay put. It will cost you more to leave than you’d make on the deal.

Had you bought last year, I’d say sell now for whatever you can get.

#151 mike on 09.03.08 at 5:35 am

#90 Agent gamed do persist in Toronto unrestrained from their self regulated industry…. Even in the rental market these guys are sheisters. We’ve been looking for a rental house and found a poorly maintained one in an area we liked. Put in one low ball offer for ‘as is’ … Agent told my agent we would get a signback on the monday… what ya know.. Monday afternoon and my agent says no signback … must come back with a higher offer. We passed… Weeks later owner finally cuts grass removes debris from property so we put in another offer … still low but higher than first…. On monday 2 hours b4 irrevocable my agent calls sheepishly and says they got another offer “close to asking”. Keep in mind this place had been vacant almost 60 days. Phantom offers even in rental world … Have these guys no ethics… Answer…
NO … This is why we look privately. Another agent took us to see a renovated bungalow, bathurst/sheppard, decent… told us it won’t last long…we should grab it… pay full price…we passed. Over a month later I drove by… Still for rent… Trust your instincts people and as Igre writes ” buyer beware”

#152 patriotz on 09.03.08 at 8:03 am

I believe that home prices will drop but don’t really look forward to that because of the negative effect that will have on the economy and indirectly on my job.

Inflated house prices are the cause of the negative effects, not the return to normal prices. Don’t confuse the cure with the cause of the disease.

If you’re ill and have a fever, the fever is part of the process that the body goes through to get rid of whatever made you ill. Likewise the symptoms of drug withdrawl are due to the addiction, not to the lack of drugs.

And bankruptcies and job losses are unfortunately part of the process of the economy going back to producing things that people need rather than overpriced houses that they don’t.

#153 jelly on 09.03.08 at 8:36 am

Lincoln,

I think Forest Lawn is too high a socioeconomic
neighbourhood for you…
you should move to Winnipeg….

#154 NCoffee on 09.03.08 at 11:39 am

Thanks for your input, guys. Really appreciate the fact that so many of you took the time to throw me some good food for thought.

Regarding #144: hey, I’ve seen some really interesting insight into real estate on this blog and asking a question was free.

#155 The Tallyman on 09.03.08 at 11:50 am

Lincoln,

Are you sure you’re not an Edsel

Ogden says they forgive you and you’re welcome back to
the neighborhood as soon as your community service is over.

#156 The Tallyman on 09.03.08 at 11:56 am

Realtor speak:

Realtor: “This house has floating floors!”
(ya , every Spring when the Bow River over flows it’s banks)

House Hunter: “Oh my god look at size of that hole in the rotting roof”

Realtor: “skylight added in 2007″

#157 The Tallyman on 09.03.08 at 12:02 pm

OK… OK… sorry to single out Ogden

Here’s a kick at a Hoydee Toydee neighborhood

” The sky is always blue and clear, our fridges are always full of beer… over here in Chestermere”

#158 womp on 09.03.08 at 12:16 pm

From the Calgary Herald article:

The real estate board’s president Ed Jensen, in a news release, said the median price for single-family homes is under $400,000 for the first time since January 2007 “which may indicate that properties are being reduced in price and that some sellers have waited too long.”

Wait wait wait…. so, what you’re saying is….. that if the prices are going down…. that may indicate that properties are being reduced in price? Wow! I’m shocked, SHOCKED.

The more I read these REB news releases, the less education I believe you need to run one of these things.

#159 EverythingZen on 09.03.08 at 2:52 pm

#135 Calgary rip off on 09.02.08 at 9:58 pm
^

Let your conscience be your guide friend. I am not your enemy. Right livelihood can be achieved through the pursuit of wealth derived from real estate. Willing buyer/willing seller, tenant/landlord. So goes the market. No coercion is involved nor will there ever be.

You may be correct. My investments may fall in value and my cash flow may dry up. If that occurs then so it will be. I make decisions based on my judgment and my beliefs as you must do. As we all must do. I am comfortable in my decisions and often find great contrary opinions here to seed my mind and thoughts. My experience over many decades in the real estate business has been positive and rewarding but all things are impermanent and subject to constant change. I am aware of that and carry no attachment to future wealth and success. Happiness comes from within and from being a good person and respectful to others and to yourself.

Peace & Kindness

#160 David on 09.03.08 at 7:26 pm

Lincoln, when did Forest Lawn become upscale?
It is reassuring to know that people like Chipman and Zen live in a world of splendid isolation, buoyant bubble markets and easy nothing down long term mortgages. Reality is about to rear its ugly head for people of this ilk in the real estate industry. There is certainly no compulsion to accept any of the arguments put for forward here by people who can see what is coming to a community near you in the very near future. Bearish sentiments are unlikely to inspire the eternal bull market optimists who seem to gravitate towards the real estate industry during bubbles. If you are looking for feel good inspiration maybe join a church or service club, but do not try to pretend that the post bubble price correction period is already past tense and magically the market is now more balanced than ever before. Irving Fischer made comments about the 1929 stock market being at a permanently high equilibrium level prior to a decade of economic misery experienced by our parents and grandparents. Enjoy that $10 latte while you can still pay for it from your commission cheques.

#161 jelly on 09.04.08 at 7:26 am

David,
Surely Lincoln realises that Forest Lawn is the worst neighbourhood in all of Calgary. He has got to be sarcastic saying that. I have a friend that is a member of the SWAT team that says he would be out of a job if it wasn’t for Forest Lawn. It is the cheapest and least desireable neighbourhood, everyone knows that…

#162 TorontoBull on 09.04.08 at 9:39 am

immigration to Toronto is down significantly, suggesting less demand for properties…
http://www.theglobeandmail.com/servlet/story/RTGAM.20080904.wimmigrants04/BNStory/National/home

#163 TorontoBull on 09.04.08 at 10:16 am

the spin masters…
http://www.thestar.com/Business/article/490233

#164 Andrew toronto on 09.04.08 at 12:21 pm

As per #122, Garth sometimes you can lead a horse to water , But you can’t make them drink it , In this case a DONKEY..

Some Donkeys like EverythingZen Just can’t handle the Truth..

I appreciate you hard work and truthfulness you’ve been a realestate Guru for a long time and have proven yourself time and time again about canadian Realestate ..

#165 Rob Chipman on 09.09.08 at 4:24 pm

David:

Re: comment#149 and #160, wherein you said “It is reassuring to know that people like Chipman…live in a world of splendid isolation, buoyant bubble markets and easy nothing down long term mortgages. Reality is about to rear its ugly head for people of this ilk in the real estate industry”, I’d just like to point out that I’m on record, many times, calling for a 20% -40% correction in the Vancouver area and advocating the purchase of investment real estate only with a disciplined, metrics based approach.

You may argue that I’m not bearish enough for your tastes, but you’ve got a tough time arguing that that I’m living in splendid isolation.

#166 pjwlk on 09.09.08 at 4:40 pm

Hamilton Spectator article: Local Real Estate sales plunge by 20% since last month! “but it does not signal a slip toward a housing crisis like the one in the United States, says the area realtors…” Yeah…

#167 Marcus Aurelius on 09.13.08 at 12:04 am

A TALE OF TWO LISTINGS…..

216 Homewood Ave (Yonge/Finch – C7) – has been on ‘true list’ for almost 2 years, but it’s gone through 4 agents. Pricing started around 1.165K (sat forever), then Johnston& Daniel (Kholodov) got it for about a year, at 1.175M, then 1.168M, then 1.150M, then 1.250M (The vendor and Mr. Kholodov were likely offended that no one would pay 100K more than his ‘offer price’ the night before – in a down market). Kholodov’s silliness over, the vendor then re-listed with Forest Hill Realty : “come out” price this Summer? 1,120M.
TODAY’S LIST PRICE: $1,099M

8 Madeleine Ave – (Yonge/Finch – C7) – foreign builder and Georgian agent bring two identical infills out in March, 2007. The original list is “975K, unfinished” (whatever that means – a new attempt by a couple of foreigners to reinvent Canadian residential real estate? ) The ‘finished house’ price quickly settled in at around 1.075M. With one property unsold, this vendor also went fishing for a sucker, goosing the price to a laughable list of 1.200M for a few weeks. Recently, the new agent, Amalia Bekerman,marched the listing down from 1.175M through 1.120M.
TODAY’S LIST PRICE : $1.099M

MORAL OF THIS STORY:

1. Those who are looking in areas that suffered most from the con game – places that were never ‘prime’ areas, but where builders bought lots cheap(er) to ‘gentrify’/’renew’ the area – have the most to lose over the next 12 months.

2. If agents dick around with prices this badly, can you trust ANY list price they throw on a property? Is “1,099M” any bargain if you think that prices are marching down? That list price is a signal that the a-hole vendor and its agent have finally caved to the idea that $1M their last psychological “firewall”. They have a shock coming, then.

Today’s news says that ‘another 10% price decline would be healthy’ – and when the pimps and hookers that write this nonsense for the lenders and the real estate boards say that, you KNOW it’s going to be worse. If these pimps are pulling list prices out of their collective rear-ends (see above), why would you try to catch a falling knife for anything but a very deep discount?

The two builders above will survive – these are the Tail-End Charlie properties of a pretty good run at a lot of less-than-sharp buyers. Times are changing…..

#168 Marcus Aurelius on 09.13.08 at 12:09 am

A TALE OF TWO LISTINGS…..

216 Homewood Ave (Yonge/Finch – C7) – has been on ‘true list’ for almost 2 years, but it’s gone through 4 agents. Pricing started around 1.165K (sat forever), then Johnston& Daniel (Kholodov) got it for about a year, at 1.175M, then 1.168M, then 1.150M, then 1.250M (The vendor and Mr. Kholodov were likely offended that no one would pay 100K more than his ‘offer price’ the night before – in a down market). Kholodov’s silliness over, the vendor then re-listed with Forest Hill Realty : “come out” price this Summer? 1,120M.
TODAY’S LIST PRICE: $1,099M

8 Madeleine Ave – (Yonge/Finch – C7) – foreign builder and Georgian agent bring two identical infills out in March, 2007. The original list is “975K, unfinished” (whatever that means – a new attempt by a couple of foreigners to reinvent Canadian residential real estate? ) The ‘finished house’ price quickly settled in at around 1.075M. With one property unsold, this vendor also went fishing for a sucker, goosing the price to a laughable list of 1.200M for a few weeks. Recently, the new agent (Iranian) marched the listing down from 1.175M through 1.120M.
TODAY’S LIST PRICE : $1.099M

MORAL OF THIS STORY:

1. Those who are looking in areas that suffered most from the con game – places that were never ‘prime’ areas, but where builders bought lots cheap(er) to ‘gentrify’/’renew’ the area – have the most to lose over the next 12 months.

2. If agents dick around with prices this badly, can you trust ANY list price they throw on a property? Is “1,099M” any bargain if you think that prices are marching down? That list price is a signal that the a-hole vendor and its agent have finally caved to the idea that $1M their last psychological “firewall”. They have a shock coming, then.

Today’s news says that ‘another 10% price decline would be healthy’ – and when the pimps and hookers that write this nonsense for the lenders and the real estate boards say that, you KNOW it’s going to be worse. If these pimps are pulling list prices out of their collective rear-ends (see above), why would you try to catch a falling knife for anything but a very deep discount?

The two builders above will survive – these are the Tail-End Charlie properties of a pretty good run at a lot of less-than-sharp buyers. Times are changing…..

#169 Adil Burney on 09.13.08 at 1:21 am

Garth, great site…

I agree with everything you say, with one small exception:

The lag used to be 1.5 years but is now only 1 year and 2 months (not the 2 years you quote)

http://canadahousingcrash.blogspot.com/2008/08/1-year-lag.html

Best of luck in the election

Adil

#170 Berry on 09.15.08 at 10:42 am

Re: Zoocasa – I agree the website is well done, however, the content is extremely poor and there are still quite a few bugs that need to be sorted out. Until zoocasa can get all the listing data they can never compete with mls.ca.