It’s back to the bunker and Bandit for a few days after a week of bouncing through the prairies and the mountains. Just in time. I have a slew more books to sign for people who ordered them here while I was cavorting with cowboys. In the five days since Money Road came off the press Monday afternoon in Toronto, the entire first edition is almost gone.
A couple of the final boxes of unsold copies were snapped up Friday night at my event in Surrey, where I got to meet another litter of blog dogs. Sitting in a Boston Pizza on the Fraser Highway a couple of hours later (I take her to all the best places), my wife looked up and accused me of being a cult leader. “But,” she added, “they’re not too weird. Seems like you’re taking ordinary people who have a contrarian bent, and making them feel that’s okay.”
But weird is relative.
In Vancouver and the Lower Mainland right now, not being a real estate crackhead is weird. Thinking people who pay $900,000 for an unrenovated schleppy Fifties bung in a dodgy area are delusional is weird. Not succumbing to the pressure of helicopter parents and nesting spouses to throw yourself into a pit of mortgage debt for your entire adult life is weird.
As I told folks, the world is now a volatile and unpredictable place. Just as the Vandroids will discover when the Olympic idiocy ends, so Canadians in total will soon see what the legacy is of the past 10 months. The March 4th federal budget will mark the beginning of a new austerity program. Interest rates start heading north four months later. The HST nails 16 million people on Canada Day. Every single provincial government is mired in deficit with only two ways to get out – spend less and tax more.
The BC real estate orgy is the greatest example of a denial which stalks the land and makes people do things that are, well, weird. In a time of recession and falling incomes, they borrow and buy. While the memory of a near-meltdown of the financial system is still fresh, they jump into bidding wars and fist fights over condos. After a crisis caused by too much debt, they plunge into record amounts of it.
And, above all, when assets like houses hit their highest value point ever, they line up to buy – just months after dumping other assets, like stocks, when they hit low tide. Apparently normal in this country is doing what your friends are doing. It’s wanting what others want, when they want it, because they want it, and paying too much because of it. Normal is selling stuff when it gets cheap, and buying stuff when it’s dear. It’s believing that what’s happening today will happen each day forever. Normal is fearing risk, yet walking into its embrace.
And Friday night in Surrey, we were anything but.
131 comments ↓
Thanks for another great lesson Garth. I enjoyed the session and I am looking forward to reading your book I bought tonight(I got Dorothy to sign t for me too…she is such a nice lady!) I hope you get a laugh out of those crazy ads from Craigslist I gave you for condos for rent for the Olympics. I cannot believe the greed of people, let alone the stupidity of others to pay it! For all the blog dogs on here, go check them out in the “sublet” section on Craigslist, it’s absolute brain dammage! I have seen prices as high as $20k for the month of February for a condo in downtown Vancouver. This City is going to have quite the hangover once the “party” is over. My wife and I are renting and will continue to do so for the next 2-3 years and then plan to pay cash for our place. Not getting sucked into this market and risk everything, just so I can call myself an “owner”!
Anyhow, thanks again Garth and I look forward to next year’s seminar with you!
Get ready everyone. Goldman Sacks has just spit on the US Government!!!……….and now Obama has just declared WAR on Wall Street!!! Anything can happen now! It does look like the last 2 remaining US based Investment banks Goldman and JPM will soon be exterminated just like their predecessors Leaman, Bear and Merrill were…………..could the Federal Reserve be next?????…….maybe this time instead of just looking over the cliff into the abyss we actually plunge head first unto it!!!!!
T.
Where have I heard this before? An article about a soon to be retired, downsizing to stabilize their finances:
http://www.theglobeandmail.com/globe-investor/personal-finance/financial-facelift/hard-choices-changes-are-called-for/article1439477/
you gotta be kidding me..
Two Vancouver property firms are expected to formally announce Monday the million-dollar creation of 30 so-called “micro-lofts” in the Downtown Eastside.
At approximately 270 sq. ft. — about the size of two municipal parking spaces — the market rental units will be the smallest in the city.
Reliance Properties Ltd. and ITC Construction Group (builders of the Woodward’s project) are behind the project, part of the redevelopment of the historic six-storey Burns Block at 18 West Hastings. Big City, Small Condos: ‘Micro-lofts’ to come to Vancouver
the article says further..
“By cutting away the non-essentials, that is the only way to get to that price-point in Vancouver,” he said.
Stovell was reluctant to give away too many details ahead of the launch, but he said the units were “very beautifully designed” with bathrooms, kitchens and built-in bed.
The ceilings will also be higher than normal “so that it doesn’t feel cramped.”
Stovell said designers looked to Asia and Europe for inspiration.
Its now gone beyond stupid..
Thugs..
“The company rep” told her she didn’t have to worry about the paperwork that was whizzed through two banks. She didn’t understand how she qualified for a $125,000.00 loan without any questions asked until she later discovered that somebody had falsified documents. She received her first shock when she learned that what she assumed was the $125,000.00 down payment on a property had been channelled to parties she knew nothing about. The loan was in default, and the bank placed a lien on her house
Vancouver gang of fraudsters targeting immigrant women
good lord whats going on in that city..is it even safe to visit ?
and those parking spots with fold out beds will probably go for a quarter mil or higher. lol
Last nite, I saw the movie “The Yes Men fix the world”; it’s a gas!
Guys, “sometimes it takes a lie to expose the truth”.
You gotta go; playing in Ottawa today thru Tuesday.
http://www.theyesmenfixtheworld.com
Finally, don’t fear participating in the economy. From my experience, there is never a perfect time to get married, buy a home, invest in stocks and start a family business. Tune out the doom and gloom and get on with living.
So now we have a plan. We stay married and retain the family business if it’s profitable. We own a home, we don’t sit on cash, we don’t set distracting goals and we don’t expect the financial-services industry to make us rich.
One more thing: The Canadian asset-management industry is one of the few that does not have to guarantee customer satisfaction. It does, however, guarantee to charge fees based on the assets managed.
This week we chart the monthly closes of TSX-listed IGM Financial Inc. spanning about 18 years. The price appreciation from the lows of 1991 to date represents an annualized return of more than 15 per cent. That excludes the dividend, which works out to a 4.6 per cent yield. All in all, not bad returns for a family-owned business.
Bill Carrigan, CIM, is an independent stock-market analyst. He can be reached at: info@gettingtechnical.com.
“Stovell said designers looked to Asia and Europe for inspiration.”
eep. Be careful where you get your inspiration from!
http://seattletimes.nwsource.com/html/nationworld/2010678268_shelters03.html
P.S. Cute puppy pic………..A dog for the Blog-Dawgs………throw me a bone!
T.
FINALLY, THE BOOK arrived on Friday. I started reading and enjoying it greatly. It was interesting to note that the book was published without any taxpayer subsidy. Now how UNCANADIAN is that!!! l0l
Contrarian indeed
cheers
Well, in economic news…….the Calgary Herald (surprise, surprise) is trumpeting $8 billion of “oilsand projects” that were sidelined a year ago and are now “potentially” coming back onstream, as another sign of an economic turnaround. Not all of them are actively being restarted yet…..some may never be, and official announcements in a few cases are actually months away, but that hasn’t stopped “this” newspaper from printing their usual spin.
You have to ask yourself though……..”what has changed and how does it relate to RE ??”
The exploration and production costs have come down to reality again, and tens of thousands of ex-oilpatch people here in Alberta who need to pay their bills are currently looking for work.
These people got greedy at $100 BBL and at $140 BBL they abslutely lost their minds. Now at $65-75 BBL and being out of work, they’ll take any job they can get at lower wages, so the projects may now make sense again.
Which is why all this “economic activity” being pumped up by the Herald as “good” news, won’t have any significant affect on the overall Alberta economy, simply because the amount of money being distributed in paycheques, is going to be a lot less for everyone. And the debt that these people hold hasn’t been reduced in value like their paycheques have.
Anyone think I am wrong about that ? It sure isn’t going to support property values going forward.
They wouldn’t let me in to last night’s seminar at the Northview Golf Club in Surrey, all thanks to the promoter who set it up, as they just so happened to lose my name and blamed it on the message machine. And this after driving almost 2 hours. Real big league these people who work there. I wonder how many attended but never got to see this seminar Garth? Couldn’t they have posted a message in this blog about this predicament and given us a second chance to attend, or don’t they read your blog (or are lacking in the grey matter)? I’m so thoroughly pissed right now. You can count on me to diss that Northview Golf Club every chance I get now. I know it doesn’t matter to you, but I’ll be tellingf 2 friends, who’ll tell 2 friends and next thing you Garth Turner’s a schmuck and through no fault of your own. I’d have a talk with those fools. Like squidly77 on 01.23.10 at 9:02 am says “Its now gone beyond stupid..”
Please accept my sincere apologies. I had no idea you were turned away, and would have dragged a chair into the room myself had you informed me. There is always room for another blog dog. Rest assured I will be bringing this to the attention of the organizers. Totally unacceptable. — Garth
Great post Garth,
Vancouver is the epicenter of Re insanity in Canada. There is no market like it. I speak to friends who have moved from here to Toronto, Calgary, Ottawa or Montreal – or abroad – and they all say it is like leaving an insane asylum. It is much, much more than the outrageous and inflated prices.
The culture in Vancouver is so deeply tied to the notion that RE prices cannot do anything but go up forever you can easily find yourself outcast just for expressing a contrary opinion. It is like expressing an opinion questioning the existence of a God to a group of Christian fundamentalists.
I worry most about how deeply a crash would impact the Gen Ys who have both pursued a career in RE and leveraged themselves to the ceiling in debt. I cannot tell you how many bright young people I have met who have left traditional careers – teaching, engineering, law, etc. to pursue the easy riches of a career in RE. Some are agents, some are in marketing, some are in mortgage lending and finance. However in each case they left because a career in RE paid better and appeared to be more solid in the long run.
I am sad for this group because many of them have really just started in the last decade when things could not have been better. They will find it nearly impossible to replace the income they enjoyed over the past few years and in many cases will have to in order to keep their investments. A crash will hit them hard in so many ways.
As squidly77 on 01.23.10 at 9:02 am says “Its now gone beyond stupid..” (Northview Golf Club)
My favourite place to watch the insanity of Vancouver prices is on the Prompton Board at the Roundhouse on Davie Street. It has a bevy of current listings for premium apartments in Yaletown. If you are in the areas pass by and take a look – more than a little amusing.
What you will see are mostly condos in the 900K to 3 million range. The majority lately are in the 1.1-1.8 range which is what a 2 bedroom in the 1100 sq ft. range lists for. Over the past few month almost all of the movement has been in the under 800K range.
I noticed that yesterday only one unit out of about 40 listings had sold. It was a 1 bedroom that was listed at 650,000 that sold for 580,000 – more than 10% off list. Just one listing but it could be a sign of things to come.
My parents were in Surrey last night…they really enjoyed your presentation!
I’m suposed to thank you for the autographed copy of Money Road too. Can’t wait to read it.
Thanx
Still More Proof That Garth Was Right….
B.C. company slashes 127 jobs at Powell River mill:
http://www.cbc.ca/canada/british-columbia/story/2009/02/18/bc-catalyst-paper-cuts.html
44 Vancouver city workers get layoff notices:
http://www.vancouversun.com/business/Vancouver+city+workers+layoff+notices/2474403/story.html
800 Vancouver teachers given layoff warnings:
http://www.theprovince.com/business/Vancouver+teachers+given+layoff+warnings/2462296/story.html
Is This the Shape of Things to Come?
The BC Ministry of Finance has increased the PST on rental parking from 7 to 21%.
http://www.rev.gov.bc.ca/documents_library/notices/Notice_to_Parking_Sellers.pdf
Hey guys:
Go read this before it disappears. Look for this guy’s testimony to the US Finance Committee. These are the reforms needed and it is not rocket science.
Go read now, it just might apply here.
http://www.huffingtonpost.com/2010/01/22/joseph-stiglitz-testimony_n_433119.html
After seeing that picture, I realized I had better quit drinking.
Garth…….so love that dog picture!
Last nite (friday) wished we’d decided in time, to crash your party at Northview. Looks like you would have been the perfect host and put out another chair or two.
Sorry #13 Disgusted, when in any difficulty always go to the Top!
My seating is confirmed for Langley Feb 27, hope you won’t have writing fatique by then …. have to buy the book from Chapters….will you still sign it?
elle
Tell me when to vulch and pass the purple Kool Aid.
“…sold for 580,000 – more than 10% off list. Just one listing but it could be a sign of things to come.”
Listings are trending higher in the GVRD and places are sitting longer and longer.
It’s the beginning of the end.
Interesting article in NY Times today… Will 2010 Be The Year of The Renter?
http://www.nytimes.com/2010/01/24/realestate/24cov.html
will be interesting to see if the same thing happens in Toronto – what with all the new condos under contruction and likely to come on-line during what may be a downturn.
Greetings: Re# 13 [Disgusted in BC]
Mr. Turner: If you will be kind enough to send the copy of Money Road that I failed to pick up in Red Deer, to this fellow, I will pick up the tab for it. I assume you do have my E mail address and can contact me.
#4 Squidly:
There’s nothing new under the sun. These places used to be called “Boarding Houses” back when Vancouver was nothing more than a logging town on the edge of the Pacific Ocean. Single men (and women) stayed in these places with just one small room to call their own, paying on a month-to-month basis. Often the landlord or lady provided meals, and there was a common room for socializing.
These tiny places are nothing different, housing the same type of people as they did back then, people lacking the social supports that many of us take for granted. The catch is that now, the government and quasi-government do-gooder organizations have got it into their heads that they can provide what previous living arrangements did naturally: a social support component. Now, instead of common rooms and a sense of community outside the small rooms in the boarding houses of days past, we have government funded “social” spots and counseling way outside (hopefully not more than a block away!) these tiny rooms, with isolated individuals inside the concrete and security protected interiors. It’s a tragedy of modern architecture that these places are not built at a human scale, nor provide a social element within their walls. They might as well be jails, and we shouldn’t be surprised when the people living there don’t get better.
Got my copy of ‘Money Road’ on Friday… there goes my weekend!
re: the “Micro-Lofts” in Vancouver — this happened about 3-5 years ago in Toronto (not at obscene, but similar concept). The “Graphic Arts” building has several 300-400 sqft studio condos (about $200k I believe): http://www.downtownrealty.ca/BLDG/73-richmond.htm
Apparently Vancouver IS the centre of the modern world! That’s the only explanation for 250 sqft living space (similar to London/New York/Paris/etc.).
I wonder if Notradamus Jr. will be lining up to be first to buy?
#2 Terry
Are you serious ?
Have you gone to a circus where there is no clowns ?
All of this is just part of the whole SHOW. The results are always the same. Ups and downs. Why ?
The real goal is to bring in more and more victims into the big game, aka Ponzi. You can apply this idea at whatever market you want, all of them are the same.
#44
Squidly
Going ’small’ is a big trend right now … rooted in the green movement, being kind to the earth, smaller footprints and all that jazz. People converting shipping crates into homes etc. is all the rage. I live in a small space myself so I don’t really buy into ’small’ … I want to vastly expand the size of my tent. The site apartment therapy is wired into the joy of small spaces … it’s a fun site.
OK fellow bloggers. I need some advice. I have 90K in cash and am a single lady in my 50’s. I am reading Garth’s book and consulting professionals. The range of advice is just staggering and I would like to throw it out to you.
Lots of professionals want to put it in mutual funds. Seems a bit simplistic. What do you think?
So here your example is a $900,000 50’s schleppy bungalow in Vancouver. Yesterday you referred to my relative as a greater fool for owning a $400,000 family size condo in a great central Vancouver neighborhood (a condo brought to that level by alot of sweat equity and increases year by year over time, by the way).
So just out of curiosity, where do you think people should live in Vancouver? Obviously you think everyone should just sell and move to Windsor.
Monthly payments. Old mentality: I don’t care about the price, as long as I can borrow to pay for it and I have enough income to cover the monthly payment. New mentality: I’ve already got too much debt, and the banks won’t lend me the money anyway. Result: More cash purchases and a lot less financing of cars, furniture and other costly items. “The era of unbridled, debt-financed consumer spending is over, and the monthly payer is out of action,” Eric Janszen, president of iTulip, a finance-advisory firm, wrote in Harvard Business Review last year.
The first part of the paragraph currently applies to the Canadian Real Estate market in my opinion.
the “how-much-a-month” crowd
will soon be “too-much-a-month” desperadoes
and sales activity will drop off ala circa ‘08…..
@4 – Squidly. I’ve started to skip some bloggers posts, but I still give most of yours a read, and whether I agree
or not, they are appreciated. In this case, I’ll disagree,
with some qualifications. First, lets discount the current
frothy market in Van, and second, I think it said “eastside” – ie scary.
But why don’t we just examine the product? Are these units not bona-fide housing? Would they not meet the
requirements of a certain segment of the population? I
think they would do fine for students, temporary contract
workers, out-of-town commuters, maybe new
immigrants. They seem similar to many hotel rooms. Consider for example somebody like myself, living on the
island, but say working on contract for six months, or a
school year in Van? Weekend commutes home. Seems
like a good fit.
I’ve read so many posts here ragging on 3000 sq ft “Mc
mansions in the ‘burbs” on this blog, I would expect
some understanding for this type of accomodation.
“When the going gets weird, the weird turn pro.” Hunter S. Thompson
.Please stop talking about Vancouver real estate and it’s bubbles. You are creating more and more interest from out of town buyers and we may not have enough real estate for everyone.
Haha.
Seriously, I appreciate Garth’s warnings of real estate armagendon. Eventually you’ll be right and you can say I told you so. Nothing goes up forever without corrections, but please consider that in the 80’s similar warnings were broadcast to all us sheeple and dire consequences of “white elephants” and no buyers would leave us all in financial turmoil.
The 80’s went by with corrections and eventually a recovery followed by a correction in the 90’s and another lift in prices followed….get my drift. Yes, it’s going to correct. So what?
Lastly, and most importantly, as Canadians we have one of the most fantastic incentive to own and keep real estate. Assuming that the price of real estate will go up over time, -(see a chart of real estate in Canada for the last 100 years) you’re capital gains are TAX FREE.
Please consider:
1) you need a roof over your head
2) buying real estate at low interest rate and holding long term is an investment
3) Real estate should be considered intergenerational, IE it goes to your children and their children
4) gains are tax free and you can borrow against your equity in your home and write the interest off.
5) Vancouver is now a world-wide city. Please take a trip around the world to see other world-wide cities and compare their prices. This is why Vancouver real estate is still attractive. People from all over are coming and prices are being held up by foreign investors
-
#4 squidly77 on 01.23.10 at 9:02 am quoted
The following is certainly an inpiration:
A the height of the real-estate bubble in Japan, people would build on any inner-city land they could get their hands on, even if it meant creating some very unusual and impractical buildings.
Weird.
-
-
#4 squidly77 on 01.23.10 at 9:02 am quoted
The following is certainly an inpiration:
A the height of the real-estate bubble in Japan, people would build on any inner-city land they could get their hands on, even if it meant creating some very unusual and impractical buildings.
This wedge of a building is in Kyoto”
Weird.
-
Here’s a couple of classics today in the Vancouver SUN[shine up your butt] NEWSPAPER.
1. Cruise Ship Hotel Cuts prices AGAIN!!!
First started out at $1,300 for the Olympics.. now they are down to $275 a night. (Someone in THAT MARKETING DEPT. should be fired!!)
http://bit.ly/4WEZKH
2. Home-building Poised for Revival. Onni cartel are back at again! (Google De Cotes clan) pumping up the volume. All that is missing in the piece is Ozzie and Rennie!!
But this is the one ¶ I love the best! Onni is launching 3 new projects in three towns in the lower mainland.. and they plan to price them 15% – 20% CHEAPER then their OTHER projects.
http://bit.ly/8clL8Q
Lets see folks! Your home you bought in 2008 and 2009 is now 15% – 20% less then what you just paid for it a year ago. Hmmmm. (Won’t happen here!)
3. Last but not least! Feds Ran Up $4.4 BILLION (with a “B”) deficit in November. Ouch! That’s going to leave a mark!
http://bit.ly/7d5sPT
“ Move Along!! Nothing to see HERE!!!
A follow-up…
Twenty five years ago, most people in London,England rented as opposed to own real estate. It was common and most people accepted this because their parents also rented and their grand parents rented. Prices of real estate in London always went up and also corrected along the way and renters kept on renting. Fast forward to today, despite economic issues crippling the British economies, people still can’t afford to pay the sky high prices of real estate in the city. Renting a two bedroom flat in London center is approximately $5000.00 Cdn per month. I know this as I rented their two years ago. In Rome, despite Italy’s economic woes, which are considerably worse than Canada or the US, the real estate in Rome averages 6-8000 euros per square foot. Outside the city it averages 2000 euros per sq. foot and it is a basic apartment. Real estate is supposed to crater in these places but does not. WHY?
I know why and please consider Vancouver as a growing London, Rome, Tokyo, Singapore, simply due to the China effect in the next century.
Either way, corrections happen. Don’t buy real estate unless you can afford to ride out the ups and downs.
Metro Vancouver Hot but not Overheating-Canada Conference Board
http://www.vancouversun.com/business/Metro+Vancouver+real+estate+overheating+Conference+Board/2474614/story.html
Hi Garth, got the signed book. Flipped through it and started actually reading it yesterday. Looks good. The only question I have, and possibly an area you might want to think about addressing in a future edition of this book – if applicable, is the counterparty risk of using the strategies. I know it is highly likely the Canadian government will try to bail out any large FI and insurance company if (for some, when-not if) it gets into trouble. That said, at the end of the day, at some point, the taxpayers and/or bond market will eventually force the government to decide between bailing out moron companies (only depositors and policy holders should get bailed out – not bond holders as has been the case in the US/Europe) or letting them fail to save money and improve the terms of new borrowing which appears inevitable. The ongoing, irresponsible deficit spending and any new stupid bailout requests/plans will eventually result in the gov’t’s real credit rating to be downgraded to that of a subprime borrower – assuming economic growth is weak and spending cuts are not deep enough. Quite frankly, the risk of a large bank/insurance company in Canada going under at some point in a few years time is a real risk.
I sense the Conservatives will try some first austerity steps come March – chatter has it they will rightly target the bloated and insulated public sector for some long overdue cutbacks..that is a great first start. I do not belong to any party, just sayin. Now if they can also increase capital requirements gradually over the next few years (and prevent off balance sheet/non bank FIs from creating credit away from the banking system) and tighten up the ponzi enabler CMHC, we are talking long term hope.
For anyone holding seg funds/ins policies, ETFs, etc, a lot of your proposed strategies expose people to significant counterparty risk.
That said, i know there is no perfect solution, but i think the book was definitely worth the money. I still have my After the Boom 2015 book bought the year it came out…plan to hang onto to this one.
Keep up the great work
JO
LOL… Read the Yank comments on our house prices
http://thehousingbubbleblog.com/?p=5841#comments
Hi Garth – thank you for all of the useful advice and commentary on this blog. I’m looking forward to reading your new book.
As a life-long Vancouverite, I agree that RE prices here are not realistic. When would you all think that we started to exceed realistic prices? In the early 2000’s? Anyways, I’m hoping that we get back to realistic RE pricing at some point over the next few years. Maybe with what’s going on in the markets this past week we will see the start of a return to RE sanity soon.
On the other hand, I am a bit puzzled by the consistently pejorative terms and connotations I often read here when it comes to describing Vancouver and the implication that RE ownership here is crazy (current unrealistic prices notwithstanding). It was 15C and sunny here yesterday. The cherry blossoms are starting to come out, as they usually do on the West Coast at this time of the year. You can start your day-off driving 20 minutes out of town to go snowboarding all morning and then grab lunch on the way to the beach and windsurf / kitesurf all afternoon.
I have a neighbor who works in Korea full time so that his wife and kids can live here. He visits twice a year for a week at a time. He says that it is a dream for him to have his family live here because his kids’ prospects are so much better. This is not uncommon.
I grew up here and lived through the 1980’s influx of families from SE Asia, many of whom were able to purchase expensive RE. Having travelled to many places in Asia and experiencing first-hand the quality of life in that part of the world, it is no surprise to me that people are still flocking to our shores. As their economies improve, the upwardly mobile should increase in number and many will likely look to follow their emigrated friends and family.
I’ve lived on the East Coast through brutal winters and snow / ice storms through until May-June. A lot of people I knew out there were either dreaming about or planning to move out West at some point.
I’ve had friends visit from Europe who can’t believe the relatively low cost of living here when it comes to basic things like groceries, gas, utilities, etc…
Some posters here have compared Vancouver / Victoria lifestyle / RE / economic issues with those in the SF Bay area – fair enough – but we’ve got free health care and less random crime (OK – crime in Vancouver is a problem, but have you been to Oakland?).
Aside from stupid RE prices right now, I guess one other downside is the earthquake risk here, but if anyone is really worried about that, you could always bury a school bus and use it as an underground bünkerhaus. Not much of a view, but you might get some geothermal heat for free
Maybe I’m just trying to reassure myself that it’s OK to own a very small piece of paradise here, as I do. I agree that there is a huge need for folks to ponder the emotion that colours these considerations. Thanks to your advice Garth, I’ll try to ensure that my RE risk is not at foolish levels. Maybe I’m just a local guy who loves living here and thinks that the place gets a bit of a raw deal on this blog, all b/c RE is currently over-priced. But hey, don’t you know that it rains all the time in Vancouver? Who would want to live there anyway?
Peace.
Garth,
Thank you very much for your illuminating presentation yesterday in Surrey. It has provided plenty of food for thought and complements your weblogs well. I picked up a copy of your book to fill in the details and to better understand some of the topics you broached.
Cheers
Good NYT article on the moralizing US banks are making on people considering defaulting on their mortgage.
http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html?em
Garth,
When will you have a gig in the big smoke? Yes even I would love to attend. You rock star you!
Good news on your book Garth, we can only hope many will read and put their own finances in order that is how we win. As far as Harper/Flaherty/Carney who knows well kinda of, we know they never had a plan after the 2% GST cut other than counting oil money and signing defence contracts, building prisons and selling long guns. That has all gone south.
Many here may not remember Garth’s Halifax drop in … well it appears our once proud Navy could only muster 2 crews on the East coast and none on the West coast to help out in Haiti. Oh well our Naval Officers fancy 100 year anniversary balls are still a go-go!
Cult leader? You drink one type of kool-aid or the other.
“And, above all, when assets like houses hit their highest value point ever, they line up to buy – just months after dumping other assets, like stocks, when they hit low tide”
When it comes to houses and stocks, the herd always buys hi and sells lo. When they grocery shop, they do the opposite, look for bargains and buy lo and avoid hi prices.
Gold has pulled back and the herd panics and sells and is afraid to buy. When it takes out $1200 they will be piling back in. Be bold when everybody is afraid and fearful when everybody is euporic.
More bad news for Windsor
Windsor’s public health lab to close
http://www.windsorstar.com/health/Windsor+public+health+close/2473589/story.html
Hi Garth,
I was pleasantly surprised to see my comments on your ‘The rule’ post, even though I was to some extent the ’sacrificial lamb’.
I read today’s post about your wife saying that you may actually be a cult leader. I’m not so sure about that, but let me say this: there’s gotta be countless people out there like me who have been following you since your days as the Finance Editor of the Toronto Sun.
I am not a regular poster; more a regular reader. I enjoy reading the posts of the intelligent, funny people on this site.
As many other bloggers before me have said: keep up the good work!
JP
Re: #14 Junius
So very true! I have spoken to so many people over the past 12-18 months about the problems facing people buying in the market now. I might as well be telling them the moon really is made of cheese! They look at me like I have gone barking mad when I tell them there is a RE bubble and it is going to pop in the next couple years. The funny thing is, you can tell by their reactions that it is out of fear and greed why they deny any such looming events. They know they will have bought at the top and will be in for a big hurt when the prices come rocketing back down to earth. Personally, I hope it does happen because so many people out there think like this and the economy and society in general needs an enema! My wife and I rent and I am tired of Landlords trying to have their mortgage paid for off the backs of their tenants. When we do buy a home after the crash, we don’t plan on treating our home as an investment tool. It is a place for my wife and I to live, entertain family and friends and escape at the end of a long day at work.
My wife and I were in Surrey last night also; it was a great presentation, very informative yet always entertaining, with pictures that really emphasized the message, sometimes amusingly so. My wife is very smart and not easily impressed, but she was very impressed with Garth and very glad she came.
We got there early, so I bought a copy of the book, did some speed-reading while waiting, then went up and bought another copy for an absent friend. It’s a well written, well argued book. I’m not sure if I agree 100% with all of the strategies therein, but that’s OK: I’m looking for new ideas to consider rather than merely confirming what I already think.
After the presentation, my wife and I asked Garth some questions and he was very gracious with his time and answers. (Garth, in case you want to put a face to a name, I was wearing jeans with a black pin-striped dress shirt, and my wife is Chinese-Canadian, wearing jeans with black jacket. )
We left, then talked in the car all the way home about investment ideas. We already realized that we need to be much more aggressive with investing our TFSA’s, and we’ll think more about what to do with everything else.
We both agreed that it was a great night out, exceeding our expectations, and it gave us a lot to think about. We’re both looking forward to reading the book at length.
Your statement ” Apparently normal in this country is doing what your friends are doing. It’s wanting what others want, when they want it, because they want it, and paying too much because of it” nailed it. That’s exactly what is happening.
Alan, you are deadly wrong.
The prices you are quoting are per square meter, not per square foot, i.e they are 11 times lower than you quote my friend.
lies,lies, lies. all over. who the.f… you think wil beleive you?
Debt threats
Credit-loving Canadians are finding themselves increasingly in hock. It’s not a crisis yet, but warning signs are plentiful…
http://canadabubble.com/bubble-watch/379-debt-threats.html
to Cowgirl kiss #31:
Something to consider when looking at mutual funds is the MER of the fund. Typically a actively managed fund charges between 2% to 3% regardless of returns to you. So just by having your money not in a mutual fund you are already up 2 to 3%.
I would strongly suggest you read the prospectus before investing.
All of the above makes me excited about the Feb. 13 in Nanaimo.
Be sure to bring LOTS of books. My banker wants a copy, as do several others here in the beautiful Comox Valley, who can not make the seminar.
By-the-by, all you Vancouver “Hot homers”, for what you pay for a measly condo, We can buy a fine home on large lots. (with lower taxes and less crowded streets.) (I am NOT a RE agent. I just like the valley, where you can ski in the AM, golf in the PM, and fish after supper (Trout or salmon). All on the same day.)LOL Ya gotta love it.
#42 jim
read the post–boy the conference board sure has a wide range –44% to 75%–of listings to sales to have a balanced market
tri cities is 29% for the first 3weeks in jan-i guess they only do “big” cities
several friends (condo owners) have mentioned that their insurance rates -the strata insurance- will be increasing up to 40% for 2010 (all of BC) —too many claims????
another has been informed their insurance for the building 23units has gone up 9% for 2010 they didn’t know what the yearly bill was for the building
–and then comes the HST on top of those increases
A nice apartment in Rome/Vienna …. costs around 2000-2500 euro per square meter. In very good areas.
5000-6000 is the absolute center for Roma (for Vienna it is 3000 and above) something like the equivalent of London’s Mayfair, with historical buildings (yeah, and not 8 feet ceilings as in the concrete boxes we have here). 9 feeter here is a luxury.. Yeah, we are different, and we live in basements. somebody noticed recently the stacked townhouses close to the subways in Toronto where your living room is bellow the ground?
I noticed similar ‘townhouses’ recently in … New Market and was totally shocked.
And all these new homes north of 16th that look like dormitories?
The above prices (2000-2500 euro per square meter) will buy you in Rome/Vienna…. nice low rise buildings with very low maintenance, nothing to compare with the concrete boxes the greedy builders are building here these days. And the maintenance for these boxes? Another ‘Canadian thing’ that strikes me.
One would pay for a concrete box with bedrooms 2×2.5 (this is not Tokyo, we have land here….) all his/her live and after he/she pays it out, he/she continues paying rent (excuse me ‘maintenance fee’).
Sheer stupidity and absolute greed, Canada is in trouble times worse than US.
The people here are more naive, sincere and don’t realize what is coming. When it hits the fan…
ontario is bribing businesses away from alberta, the latest prize is
Precismeca, an oil sands service company
for its $900,000 bribe Precismeca will employ up to 60 people
they said this..
The move will create 64 new jobs in Wallaceburg initially, and Precismeca will spend $3 million in the next five years on new equipment to increase production at a plant formerly occupied by Waltec Forgings, which went into receivership in 2006.
The company plans to pay its skilled workers $14 an hour, compared with the $25 to $30 an hour it pays at Nisku
http://www.edmontonjournal.com/business/Ontario+loan+lure+Nisku+firm/2477038/story.html
relocating businesses to cheaper locations is just one more way that high house prices in any city eventually end up hurting the residents that live there
the bribing of industry away from expensive locations is akin to a dog chasing its tail
cities and locals from all over will see this and attempt the strategy
sadly groups like REIN will read this article and immediately begin to buy up bargain properties on speculation with the hope of driving house prices higher for profit eventually creating the same scenario that led the company to leave nisku in the first place
The answer is simple with Vancouver and surrounding RE, sell, bank profits, rent with shortest possible term, invest your lottery win for the term of your rental, watch, wait, watch, buy something downsized for cash (no more that a 40% investment), put the other 60% to work.
If you cannot do so above, look at moving further outside the city until this formula fits. If it doesnt at anytime ‘fit’ rent longer, bank difference OR buy into a market that will not increase by any means for 5-7 years (with high interest rates) OR move to another city!
For those worried in any way about job safety, you have to sell or you will loose the house anyway. Rent, save, invest and have your profits now mostly liquid in check for the worst.
Warning: There will be very small window to sell before the market is flooded with listings. Only 5% max will be out in time.
#13 Disgusted in BC
Garth will be at the HoweStreet.com Money Expo in Langley – February 27, with an updated presentation.
To attend free, pre-register at http://www.HoweStreet.com.
We will not turn you away!
Got a Watch @ #21,
au contraire, mon ami, you just haven’t drunk enough. Keep at it, and she’ll look mighty fine.
Excellently stated again Garth…and as you refer to the weirdness of the market and how crazy people are, I think to myself…who’s to blame? Can you blame the borrowers when they’ve been taken down the easy-money-now/pay-later road by Jim Flaherty and Mark Carney? Ultimately the buck stops with them because they are in authority. Is anyone at the wheel?
Detroit’s ‘villages’ are a unique collection of waterfront communities with some very nice houses. Quite a bit of the homes in Indian Village were built by industrial barons (like edsel ford, henry leland) over a hundred years ago. Anyways they have had there share of foreclosures over the last couple of years which kinda brought prices down a bit so you now can buy the following…
9,300 sqft! for $700K
http://www.trulia.com/property/1000176109-1500-Seminole-St-Detroit-MI-48214
9,607 sqft, 8 fireplaces for $600K
http://www.trulia.com/property/1063524265-1750-Iroquois-St-Detroit-MI-48214
Only 6000 sqft for $500K
http://www.trulia.com/property/1045565228-1470-Iroquois-St-Detroit-MI-48214
this really turns my crank and its only $370K
http://www.trulia.com/property/1068591851-2910-Iroquois-St-Detroit-MI-48214
if you go to any of the links its worth going to the agents page for more/better photos.
Its a little bit crazier than vancouver.
RE: the micro-lofts.
I lived in a sub-300sq.ft. bachelor suite for a number of years. Being in a space that small does stuff to your head.
I think half of my dreams at night were about discovering extra space behind a door.
Maybe it’s living in a small space in Vancouver that makes us lose our minds and pay way too much for slightly larger condos!
Is Garth right? I bet he is.
http://www.theglobeandmail.com/globe-investor/personal-finance/financial-facelift/hard-choices-changes-are-called-for/article1439477/
Sell the house to retire example. 24 years mortgage left at 61 years old?
#64 Onemorething,
Too late. Vancouver is already past the tipping point. Lots of new listings and few sales. Looks like November into early December was the top of the market. Unless, of course, lots of Olympians sell their gold for condos!
#69 – rubberduckie – I once lived in a 327 s.f. house for a time and I gotta agree with you that a person definately can get “spaced out”, a condition that will become very familiar in Vancouver in the years to come. Welcome to Japan in the 90’s.
#70 – Dawson – Ruth is hardly on poverty street. From what I can see, she is in better shape than about 95% of people her age. She’s sitting with over 1 million in equity in her home. She is a perfect example of what Garth is talking about. So she has a 240,000 mortgage, big deal. All she needs to do is sell and buy a million dollar condo and that gets rid of the mortgage but she still would be house poor. 1.1 million equity invested properly in dividend paying stocks plus her RSP’s and pensions, she can live cheaper by renting and not have the hassles and expenses of a house. Many many people would be happy to be in her predicament. I know I would.
My 27 year old son and his fiance put in an offer on a house here in Edmonton last weekend…two offers were submitted just before they submitted their own offer…four offers were submitted after theirs.. all on the same day..I was recently told four additional offers were submitted during the week. 10 offers in a week?
My sons offer was accepted …deal has gone through.
X-cess!
@ #32 Downsized and Delighted:
If you already own, and expect to be in Vancouver for a while (say, 10-20 years), stay put!
However, if you expect to move elsewhere within 5-10 years or are close to retiring, cash out now and get your finances in order.
No one is saying “don’t live in Vancouver” — they are saying “don’t buy a house in Vancouver that has a high probability of stealing your life savings”.
Same thing goes for Toronto, Calgary, and a few other spots across the country: if you like where you live, and are comfortable with the financial situation you’re in with that home, then there are far less reasons to sell. Unfortunately, there are fewer and fewer that are “comfortable” with the highly-leveraged house that they rent from the bank (despite the comfy green chairs on the bank ads).
“But weird is relative”
So, I drove from the ferry terminal to the Vancouver Motorcycle show today…
Ramshackle abandonded old houses next to Delta Palaces followed by brand new subdivisions that I couldn’t help but think…”these things have gotta be mortgaged to the hilt”…
So, we get to the show just before it opens, get our tickets and proceed to the end of the queue and I can’t help but notice that I, at 46, am the youngest boomer there. Like, man, I’m one of the youngest guys in the line.
I now have a much, much better idea of how this whole “just starting to turn 65″ demographic may play out. Not only was it the crowd , but it was the VENDORS. Kinda like Kelowna… you know, selling to each other…. hmmm, maybe I should re-think the home based motorcycle accessories businesss…. naa… cool $H#t is still cool… would you like a 10% senior’s discount?
“But this is the one ¶ I love the best! Onni is launching 3 new projects in three towns in the lower mainland.. and they plan to price them 15% – 20% CHEAPER then their OTHER projects.
http://bit.ly/8clL8Q”
Thanks for the good laugh! Appreciate it.
Quote of the day, from Hot Property on CP24 in Toronto…
Question from an email that was sent in: “Will rising interest rates create downward pressure on house prices?”
Both ‘experts’ gave the same one-word answer — NO!
Amazing – now math doesn’t even apply! These are the same people that claim things are affordable because rates are low and carrying costs are cheap, yet they are also saying that rates don’t matter.
in-frickin-credible
Nice dog. What brand is it, and where is it made?
——
#3 rp et #33 Grantmi — In all good conscience, you two cannot be spoken of as being dimwittted, brain dead, empty headed bimbos and morons.
Bimbos, morons, whores, gigolos, tramps, hookers, etc. are all eons ahead of you in terms of arrested development so instead, shall we all indulge ourselves in a little fun? Jolly good!
Turn the sound up as there is a narrative on this five min. clip about hell in the sky! Look closely, and the narrator will point out your planets! BTW, do you need extra heating for these places?!
But for all your bluster and hot air, they eventually lead to this and this. Both your travel visas for Chernobyl have been approved, and I trust you will enjoy your stay there!
Guess you two don’t recall a repeat of an article from last year by a Russian prof., who had indicated a few years earlier that the US was going to break into six different parts in 2010.
When this happens shortly, Yellowstone will be the catalyst which brings on the ‘quake shakes in the New Madrid line down through Illinois heading south, and the Ring of Fire on the west coast.
Positive and negative karma. Payback is a bitch, but all debts must be paid and everything cleaned up!
#74 Junius…yes it appears your are correct, very small window for VAN, small for TO!
6 weeks for VAN
12 weeks for TO
18 weeks for the rest!
Times Up! Boomers battle to dump property alongside double dip (real dip) in markets!
#27 Steve
Your point is very valid and completely lost on the Mcmansion crowd…. and the lastest version of the condo newbie-ginner
#35 Taxpayer like everyone else
fifteen – love
#45 MikeOnTheMic
“
…Sooooo many people here forgetting Hongcouver is not about jobs.
…Soooo many people here forgetting Hongcouver is not about BC Hinterland…is only about Hongcouver City.
…Soooo many people here forgetting Toronto is not Hongcouver.
…Soooo many people here forgetting Hongcouver has rain, is soooo good for skin.
…Soooo many people here forgetting “””Hongcouver is different.”””
I think you points may have been addressed by previous posters ….
jus`sayin
Claudius the Emperor of course you are correct regarding the sq footage instead of sq. meters -a small oversight regarding my post, but it does not change the point that I was making , Vancouver is still a great place to live, hang out, make a living. Look at all the people from Russia, Eastern Europe, Asia, and other parts of the world that want to imigrate to our country The real estate prices are not being held up by just Vancouverites, its because people from all over the world are coming to Vancouver and BC in general to live. Why can’t you understand that Canada and Vancouver are a magnet for foreigners who want to live in a democratic society, with land ownership, laws that protect human rights, labor and consumer protection. We take all of this foregranted. Please buy yourselves a ticket to the rest of the world and come back to what is in all liklihood one of the best nations in the world.
cheers
A.
Spring is here…in January.
Nostradamus jr.
#83 Alan,
Your 11 fold screw up was not a “small oversight”. It was an epic fail that totally weakened your argument. I do agree that there are a lot of good reasons to live in Van, but they are not worth the prices. The beauties of nature and the world class features of the city are hard to enjoy when you are a debt slave. Vancouver is in for a rough ride. A wise individual would get into the repo business now and beat the rush.
#83 Alan,
I agree that people from all over the world will continue to come to Canada. I also agree that factors into housing demand and is a factor in prices maintaining their value.
However most of these people are not coming to Canada with millions of dollars to through into the RE market. That is a small group compared to the overall market.
Affordability has become the #1 issue in the market. With jobs being lost, wages flat and taxes and other costs rising there is no ability to pay increased prices. Furthermore interest rates have to go up sometime.
Even in Vancouver we have just completed an enormous building binge over the past few years. There are still about a half dozen major towers going up in the downtown core that will be completed in the next year.
I think we can presume that all these workers and contractors will want to get back to work at some time. Wages and other costs will drop and prices of new homes will adjust downward. It is already happening.
#75 T.O Bubble Boy
Totally agree
#83 Alan
Totally agree
#82 LuckyC
“Hongcover this and that”
“I think you points may have been addressed by previous posters ….”
Sorry for bothering you with my inane repetitiousness
People I’ve met over the years who used the term “Hongcouver” were at best small-minded grumps, at worst racist bigots
just sayin’
#83 Alan,
Forget the place ticket, pack the car and visit the rest of the country. Believe me nobody likes Vancouver like I do. My life revolve around ultra running. For me, FOR ME, it is the best place on earth. Yet we sold our place last fall, now renting and eventually will move somewhere else. I do 100 mile races, I know insanity, but Vancouver is beyond anything else.
#83 Alan,
I know this article was mentioned above but it is worth re-iterating for you. Developers are already pricing new units at 15-20% below the current market in Vancouver. Banks are wanting more presales and more equity (ie risk) from the developers. This will put downward pressure on prices. Add in a high number of available workers and wages should continue to go down in the sector. Assuming that buyer conditions like the 5/35 are changed to 10/30 and interest rates go up the prices will go down further – at least 5 and perhaps 10% or more. I have predicted 30% in the City of Vancouver by January 2011. I hold to that.
http://www.vancouversun.com/business/Homebuilding+poised+revival/2474975/story.html
Interesting Jan.22 National Post Article – Don’t bite off more mortgage than you can chew
http://www.financialpost.com/story.html?id=2473518
“Taking a more conservative approach to buying is not the worst thing that can happen, says Julie Jaggernath, director of education at the Vancouver-based Credit Counselling Society. More than one person has walked into her agency with credit problems caused by taking on too much house.
“They might buy a home with a smallish down payment but then they furnish it on their credit card,” said Ms. Jaggernath. “It is not unusual to see people spending 60% of their net income on housing costs.”
She suggests looking at your current housing and then doing the math on what your housing costs would be for what you want to buy. “Set the difference aside for six months and see if you can make that budget,” says Ms. Jaggernath.
Her group is anticipating a larger client base when interest rates rise because many consumers are now biting off more mortgage than they can chew.
“Some people want to travel to Mexico three times a year but they can’t. Some people should never buy a home,” says Ms. Jaggernath.”
Alan – Vancouver may be a great place to live, as a lifestyle location. Having to work like a dog to pay an enormous mortgage probably does not leave most citizens much time to enjoy living there, they probably spend most waking hours at work or worrying about paying the bills, which defeats the point of living there. I suppose if you are idly rich and don’t have to work it can be a superb place to live, but that could apply almost anywhere.
Anecdote: I have a buddy who moved to Vancouver years ago, and has yet to find a stable well-paying job. All he gets is part-time, temp, seasonal etc, mostly construction jobs, that don’t last. In all the years he has lived there, he has never been out on a boat to cruise the harbor and coast, never been to Whistler, never skied, never been to most restaurants or attractions etc – because he can’t afford it, all his money goes to rent and food. This guy has 2 college degrees in green/enviro related areas (which should be hot now) and is very hard working, he is out at 6 AM every day looking for work, and rides the whole city on his mountain bike (very fit), so it is not laziness – it’s the economy in Vancouver is small and there is simply not much opportunity. When he lived in Ontario, he was never unemployed.
But what does that have to do with buying real estate at the top of a market, then watching it fall in value until you owe much more than the house is worth?
Being ‘world class’ or being located in one of the “best nations”has not prevented real estate from plunging in price in London, New York, L.A. and many other cities around the globe who would be ranked well above Vancouver on the ‘world class’ scale. They all thought they were different too, only to discover to their shock that they were not. The only thing different about Vancouver is the depth of the delusion of the inhabitants as far as I can see.
Real estate is just a market, after all, and all markets rise and fall over time. There are times to buy real estate, and times to sell and stay away for 5-10 years. Buying real estate now at a peak is like buying into the stock market in June ‘07 – guess what happens next. In 10-15 years the prices may recover to match today, if you and your mortgagor can stand the pain till then. You don’t want to get a call from the bank saying “Your home is worth $500K, your mortgage is $700K, we need $200K by 5 PM”.
I personally know people in the Toronto GTA who bought real estate at a peak in ‘90, the value of their home then crashed and did not get back to what they paid for it until over 12 years later. The wife had a very high paying job, that was the only reason they were able to ride out the underwater years. Eventually their marriage broke up, in part due to the stress from 12 years of real estate hell. They would have been far better off to rent the whole period instead.
Read some American ‘Housing Bubble’ Blogs from 4 years ago, you will see the exact same attitude: “It can’t happen Here! We’re Different Here”even as the market was starting to crash.
There is nothing new in today’s real estate Bubble, the same sad story has been repeated over and over through history. Bubbles blow up and burst, it’s part of human psychology, as we rush from one side of the boat to the other and then back.
31 cowgirl kiss on 01.23.10 at 12:33 pm
OK fellow bloggers. I need some advice. I have 90K in cash and am a single lady in my 50’s
Lots of professionals want to put it in mutual funds. Seems a bit simplistic. What do you think?
******************************************
First–are you cute and are you available? (jk)
Most MF advisers–are not professionals–
They are salesman–
These guys are paid to get and “keep” your money invested,regardless of market conditions–
I think MF’s are the riskiest play in the market–
They get you believing that you are invested in the company’s–they–hold in their portfolios–
This is not true–
“They” are the shareholders of those company’s–
You–are a shareholder of the MF only–
They also hold very little cash and here’s the risk–
When/if markets crash–they have no liquidity to cover everyone heading for the exits at once–
They would be forced to sell into a crashing market,that could be going–no bid–
You can lose everything–
No rush to get into the markets here–
Cash is a great position–
Cash is king–in deflation–
I don’t like the CAD or EUR here–at least short term–
So–you could diversify some into USD-
Think of each dollar as a stock certificate–
As prices fall–and they eventually will–you gain buying power with each $ held–
It’s “never” about how many dollars you have–
It’s “always” about what your dollar can buy–jmo
#91 Got A Watch,
Great post. Thanks for all the work. I am pretty much convinced that we are at the top of the market now. We may see a see saw for a while but I believe that most of the first time buyers heating up the market in the Fall have pretty much dried up. Most of the people who were going to get in with the low interest rates are in.
Affordability and stability will be the main factors from now on in 2010.
re: tv show cp24 hot property.
that show is just a pumpathon- ‘buy now before it’s too late’. monster mortgage is great company with straight talking agents and aggressive rates. last week the host asks ‘what if rates go up’ and i think the answer was something like ‘they cant go up significantly, because the government has debt to finance’
i must ask- how do they know?
this video is off topic but may be of interest to anyone who drinks milk
http://opposingdigits.com/vlog/?p=2433
So much complaining about being priced out of the market on the west coast – Barf.
Wah Wah – I guess we can’t all be trust fund kids with a 10 car garage, a beachhome in Maui, a yacht docked in Monaco and a castle in Liechtenstein.
Just b/c Canada is a nanny state doesn’t mean that it owes you a living in the city / neighborhood of your choice.
Decide where you want to live then figure out how to make enough money to live there.
#92
((So–you could diversify some into USD-
Think of each dollar as a stock certificate–))
what do you think of using CAD to buy short term U.S. treasuries, (not for the interest, but for the currency play)?
#92
p.s.
re buying short term U.S. treasuries: that is what Bob Hoye suggested, the last time I listened to him on Howe Street.
expectential volatility
Jan. 23 (Bloomberg) — Concern that short-sellers accelerate stock declines may prompt the Securities and Exchange Commission to adopt a rule next month aimed at curbing bearish bets when equities are plunging.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aMWQn8mCXZxM&pos=5
#84 nostradamus jr.
“Spring is here…in January”
It is called a chinook. False spring.
Last night I had the pleasure of some young folks company in my little northern town . The talk turned to the politics of the vancouver olympics . One said ,campbell says it will make money . Another said he must be high on drugs . Another said why do you think the torch looks like a badly rolled joint ? I don’t think I have laughed so hard in a long time. An old saying sprang to mind ” out of the mouths of babes comes the truth ” I then asked if they were going to watch any of the events most said no .I asked why? most said they won’t let the girls jump so they can watch it themselves .
Le Mad Vlad…
Once again, you yank us out of our comfy slumber and pose some questions to be pondered.
FYI, scientists have documented a cease-fire in sunspots and solar wind activity involving our sun.
Could this be the calm before the storm?
Everything in this bloody country is triple the price of our cousins to the south. WTF !!!
From food to homes, enough is enough already !!!!!
#75 Toronto Bubble Boy: “Nobody is saying don’t live in Vancouver” –
Actually, Garth said my family member was a greater fool for living in Vancouver. His child is 9 – he has a small business doing well, he plans to be there till his child goes to University, and he bought quite a few years ago and paid off the mortgage. He paid $150,000 and I thought the condo was worth about $400,000, but I think I may have underestimated it ….. probably is more like $500,000 – $525,000.
Garth is saying he should mortgage the condo and invest the loan in the stock market. I disagree. But
Garth wouldn’t have much to talk about at his lectures if he agreed with me – and noboby would be hiring him to talk.
You are pathological. I said he was a great fool for having (as you stated) 99% of his net worth in his house. If you attempt to attribute statements to me again which I did not make, you will not be posting here. — Garth
People keep mentioning that the listings are building in Mississauga (or I think they said west of Mississauga).
I live in Mississauga and I notice a distinct shortage of listings. I mentioned one 10 days ago at $750,000 with lots of cars circling. It sold for $50,000 over list price and is essentially a tear down. So I’m afraid the market hasn’t cooled off just yet. It always makes you feel alot better when prices forge ahead enough to cover future market corrections. But of course there is risk when you first buy that this won’t happen.
#99 DD I guess the dd doesn’t stand for due diligence . On our coast a chinook is a tasty fish . You should look up chinook in alberta and how it is generated . Thermal dynamics anyone. Please leave nostradamus jr alone if not for him I would probably be the dumbest old fool here.
“Vancouver Just Shy of New Record SFD Price
The Rest of Canada’s SFD House Prices Turn from Gold to Bronze M/M”
http://www.chpc.biz/
According to the analysis here…Toronto house prices are already heading south and in 13 months, a $423000 home in the Tdot will be worth $324000! Sounds good to me! Anyone elses thoughts on the credibility of this site?
Great blog Garth….keep on keepin’ it real!
99 dd
no–
a chinook is a wet warm coastal wind
we are having a mild el nino on the west coast– a climate pattern that occurs every 5yrs
rough definitions only
From # 18. Gord in Vancouver’s, link
In Vancouver (!): “…Hundreds of teachers with less than five years of seniority were sent notices this week advising them — as per union regulations — that staff cuts were likely and advising them to update their qualifications to enable the board to make layoff decisions.”… Over 300 of them, secondary shool teachers…
And, #52’s Weeping in Windsor
“Windsor’s public health lab to close”
—————————————–
More examples of the ‘fat cats’ saving themselves, and their inefficiencies being preserved, on the backs of the front line workers, and citizens receiving their services
77 and 83 post re onni developments
the quote from J Russell “i’d argue that half the buildings that have launched (in recent months) are not what they would have been a year ago.”
my take on that is they’ ll be building worse crap than they did before–a lot cheaper “everything”
i wonder if the reporter D Penner –all his articles seem to be pro RE –analyzed her comment the way i did
i had mentioned on another blog about a townhouse complex in port coquitlam that had reduced their prices 30 to 50k -well i went to the open house yesterday and it must be one of the developments referred to in the above quote— even the person i was with, who knows nothing of construction and finishing, was cringing
another complex i cross off my list for purchase —after prices fall
Garth, who would your recomend for an adviser if i wanted to invest $300 per month to build my financial future?
Shane
Yourself. — Garth
I’m about 1/3 of the through your book Garth and I like the way it is written; very easy to follow and understand, although I know I’ll have to go through certain sections of it again for reference in the future.
Great charts and graphs, and I checked out a few stocks on Globe and Mail to check out the heads and shoulders over the last year and it’s quite amazing. Some though, didn’t have the big drops lately, so it’s probably coming for some of them soon.
Anyway, thanks for putting together a book that makes it easy for us who aren’t as knowledgeable about investing to understand the ‘ins and outs’ of investing and the road ahead.
You also captured the history nicely that led to this recession. I find it interesting to be reading a book in January 2010, that covers events up to December 2009. Great work!
Excellent to hear. I am pleased you have interpreted this book exactly as I intended – as a collection of tools that actually help build wealth and freedom. — Garth
#96 Evangeline on 01.24.10 at 12:49 pm
#92
((So–you could diversify some into USD-
Think of each dollar as a stock certificate–))
what do you think of using CAD to buy short term U.S. treasuries, (not for the interest, but for the currency play)?
*********************************************
Treasury’s are coming into a normally weak part part of the season–
But–what? is normal these days–
http://4.bp.blogspot.com/_nSTO-vZpSgc/SyFPKErgm7I/AAAAAAAAHac/gcJZlgYj7XY/s1600-h/yield-curve-2009-12-10.png
“If” this bear rally is over-and we have the 2nd leg down –which looks very possible here–
The flight to safety could really drive US short term treasury’s–
Also–if the US (Obama) can’t come up with another bailout–which is looking less likely-since the Rep. surprise-that likely caused–dead Teds–liver to pulse–
I think the USD index could hit 90–
jmo-
Post #31 Cow Girl Kiss, Watch out for those so called “Profesionals” mother in law took a couple of hundred grand hit from one of those charaltons. My dad got zinged by one too. If it sounds too good to be true it is. Cash is good, right now. Look to the future….
I’m patiently waiting for Garths book, damn I hate being at the end of the supply chain.
I read this fellow on a regular basis he has given me much to think about. Give it a read. http://www.oftwominds.com/blog.html
Garth, since interest rates will rise this year bonds won’t be that good of an investment are the growth stocks the place to be.
Shane
Bonds held to maturity (therefore, short bonds) are absolutely fine, and should be a part of a balanced portfolio. But equities are also desirable given the youth of this bull. — Garth
106
i’ve followed brian ripleys home price index for awhile now–it comes out in the middle of each month after the CRE board publishes their numbers–i think you have to to watch it for a few months and make up your own mind–the stats look really good when the market is falling as they were in 2008
he’s mentioned garths blog several times over the last little while on his site
#60 Roial1 on 01.23.10 at 7:12 pm …By-the-by, all you Vancouver “Hot homers”, for what you pay for a measly condo, We can buy a fine home on large lots. (with lower taxes and less crowded streets.) (I am NOT a RE agent. I just like the valley, where you can ski in the AM, golf in the PM, and fish after supper (Trout or salmon). All on the same day.)LOL Ya gotta love it.
=============
But some of us gotta work too. Factor that into the equation.
jr and evangeline
Why not just go to your local bank branch and buy some US Dollars? A move to 90 for the green back will kick the crap out of just about any conservative Canadian investment instrument right now (I’m thinking GIC’s and Canadian Government bonds). Put them in a safety deposit box or an old paint can (I prefer the latter myself). If you have some risk tolerance look at the US 30 year. Personally I will be adding to my position big time if it gets anywhere near 5%. I would avoid Mutual Funds like the plague.
Garth, so are we in a bull market how long do you think this will last?
shane
#101 Chaostrology — “Could this be the calm before the storm?”
Indeed. One of the links I posted a few weeks ago stated that scientists now know that the last ice age occurred 12,800 years ago, but the actual formation of thick ice which covered the planet took less than six months to form, and because cold kills a lot more quickly than heat, death was almost instantaneous for most who were here (probably us in previous lifecycles).
What makes this one interesting is that when Yellowstone and allies erupt here in the northern hemisphere, it will trigger Toba and allies in the southern hemisphere, covering most of the planet in thick ash and blotting out the sun.
Hence, another ice age. Pensions, RRSPs, crooked bankers / businesspeople etc. — all of us will be in the same Titanic!
31 cowgirl kiss on 01.23.10 at 12:33 pm
OK fellow bloggers. I need some advice. I have 90K in cash and am a single lady in my 50’s
Lots of professionals want to put it in mutual funds. Seems a bit simplistic. What do you think?
******************************************
Concur with jr. Cash is a fair place to start. MFs are exactly as they’re abbreviated
— no way am I leaving my money in the hands of bonehead sales clerks who haven’t enough analytical skills to calculate a simple NPV — let alone build a balanced portfolio. I’d suggest doing as Garth says and seeking out fee-only advisors who can help you invest surplus cash keeping in mind the nature of your other assets. Beware of anyone offering to get your cash invested in a single go. My personal preference right now is to average into individual value-dividend plays and wait for fixed-income prices to crash as interest rates rise. In short, this is a “pick ‘em” environment for investing (right now, it’s most cash with a smattering of short positions on the frothiest garbage) — too much BS out there to risk broad-market ETF exposure.
A simple typo mistake. Of course it would not be 6000 euros per sq ft. -that equates to approx 58,000 euros per sq. meter. You missed the point. It’s still six times greater than Vancouver condo prices at their peak ($1000. cdn per sq foot)
People buying at those prices have money and lots of it.
I appreciate that most of us can’t afford those prices and will never be able to own that real estate. But there’s plenty just out of town, if you don’t mind the drive.
Yes, real estate will correct as surely as the tide comes in and goes out on the Pacific
#52 Weeping in Windsor
Windsor’s public health lab to close
The Windsor Star
Division of Canwest Publishing
news of job losses reported by a bankrupt newspaper – kind of like the Matrix
news of the severity of the US downturn
http://thehousingbubbleblog.com/?p=5846#comments
find Hwy50
Unfortunately for Sam and Chris, the housing market began to collapse in 2007. Though they still owe about $560,000 on their home, it is now only worth $187,000.
#80 OneMoreThing
small windows:
6 weeks for VAN
12 weeks for TO
18 weeks for the rest!
in which case my sisters have 12 weeks to sell the house in TO, which would bring us to April 11
I’m thinking that they won’t
And so it begins in Australia:
http://www.dailytelegraph.com.au/news/sunday-telegraph/tighter-credit-rules-to-halve-home-loans/story-e6frewt0-1225822838856
Not the central bank restricting loan size though, one of the big 4, Westpac (most heavily exposed in the most populous state NSW) has reduced it’s maximum LVR to 87%. So now if you pony up 50K you can only borrow another 384K plus change. Experts warn it could cause property prices to implode. No shit, Sherlock.
one ofthe
Financial combustion ?? 108 ranch goes up in smoke again one week after sale fails . No problems with re .LOL
Hi Garth,
I went to hear you in Victoria a couple of years ago in Victoria. Do you ever do a speaking engagement in Ottawa? Is one upcoming?
#121 Alan:
Google says:
(6000 Euros) per (sq meter) = 833.154249 Canadian dollars per (sq ft)
That means a 500 sq ft condo = $416,575. That’s pretty close, dude.
Garth
In reference to your response to Shane you used the words “youth of this bull.” You can’t be serious? Or maybe you have swallowed the tripe in the latest RBC update and I quote: “The typical bull-market lifespan since 1942 has lasted 49 months–so far, (and this is where it gets truly hysterical), we are only in month nine! They go on to claim the market is still at relatively depressed levels ( I suppose it is from 14,000+ but it ain’t getting back there in any of our lifetimes) and that equities are attractively valued. I guess a few folks failed to see all that attractiveness this past week. I hope it pops tomorrow though or better still for several days so I can short it again and again. And please point out to me when a housing and debt collapse ever occurred simultaneously with a bull market in anything but canned goods and shotguns.
#21 Got a Watch
If we all quit drinking, how are the ugly girls and boys going to get their love? Ugly people need love too. If it wasn’t for the “shooter”, I’d still be single. I certainly didn’t “charm” my lovely wife into accepting my advances!
#31 cowgirl kiss
Marry rich? Ha, ha, just kidding.
Many “professional investment agents” receive a long lasting commission on sales. Especially those dudes who come to your house.
I haven’t read Money Road yet, probably will though, but my guess is the advice will be a pretty good “lay of the land” for the current times we live in. Except, based on his blog, I expect Garth underestimates the severity of the financial crisis we are still in, and will be for some time (perhaps 5 years?) I think there is still one more wave coming where “After The Crash” is the Garth book to read, and he might need to put out another edition of that one starting maybe late this year or early next year. I think he “jumped the gun” with Money Road. The advice is probably still good, and it will come in handy soon, but I’m staying in the bunker until my canned food runs out.
#40 Grantmi
Vacation providers are slashing rates all over the western hemisphere. But that isn’t stopping (perhaps encouraging) parents of the girls I coach from pulling their daughters out of school (and skipping games!) for a week or more. My parents never pulled me out of school for a vacation. But they probably didn’t have the money. We did drive to Alaska with an old written off Travelaire in tow one year but the teachers were on strike. It was the station wagon’s last major trip, except the one to the junk yard. I miss wood paneling and the smell of burning oil coming through the floor boards.
And by God almighty, I didn’t skip games for any reason. Money didn’t grow on trees! If dad paid for it, I was going. Different mindset than today, where the kids are so booked up they cannot be expected to actually attend more than 80-90% of the activities their parents have paid for.
# 128 – It was a joke. As in, not serious.
Attended your session in Surrey this past Friday and quite enjoyed it. Bought your new book (complete with autograph) as well.
Question: we currently own our home ±$600,000, no mortgage or other debts, defined benefit gov pension, RRSPs, some savings,mid-fifties. Interested in selling our 2 storey and buyng a rancher – planning for the future. We understand your message respecting the potential real estate meltdown but given we are already in the market and would prefer not to be a renter, would appreciate your thoughts and comments.
I pray at the alter of the good Reverend Sun Myung Moon Turner .
I am a Toonie .