Hear Garth in Nanaimo, Feb 13 noon, Conf Ctr
For other people, it may be women and horsepower. For me, it’s plank pine and turned mouldings that send rivulets of hormones to all extremities. Old buildings wire me. It’s a cruel mistress.
So a day or two ago I went to see a 127-year-old pile of bricks I have long admired which sits in a hinterland village not far from the bunker. Built as a hotel, a defining feature is a stone archway which led to the rear stables and cuts through the heart of the three-storey Second Empire structure.
Sold as a POS five years ago, the seven apartments it contains were eventually condemned and now the owner has thrown in the towel, listing it for $469,000. But, as I learned, not before destroying it.
Where the ballroom with its intricate wood ceiling once hosted dances and county council meetings is a hulking pile of debris. The Italianate entryway is naked of hand-worked plaster mouldings, and everything else, right up to the 15-foot ceiling. Snow blows through the roof while every interior wall has been demo’d, every ornate gas lighting fixture gone and the twelve-by-twelve hand-hewn basement support beams teeter dangerously.
Such is the legacy of do-it-yourself demolition, combined with a real estate market that, in the winter of 2010, suddenly shows signs of frostbite. At least in my hood near the GTA. Just as the old hotel owner realizes a reno-spec guy will likely lose his shorts, it’s becoming apparent listings are sitting longer and longer – especially for properties north of five large.
And why not? Common-sense people can see clearly where the economy’s at. Last week I bought a new pair of cowboy boots, since the duct tape was wearing off the bottom of my old ones. The store I frequent is in a chi-chi strip of North Toronto retailers. When I arrived a sign taped to the door said ‘BACK IN 15. LUNCH.’ Hmm. One employee.
Across the street was a high-end sushi restaurant. In the window a waiter stood and stared out at the traffic on Avenue Road. He had the time. No customers.
When I bought my boots I asked about business. “To tell you the truth, real slow.” How slow? I was the day’s only sale. And the boots cost $300 less than the last ones, which were identical.
This week the US president sent Congress a federal budget worth $3.83 trillion, of which close to $1.6 trillion is deficit. That means almost 50% of the annual spending of the largest economy of the world will be borrowed money. One big reason is that tax revenues, especially from businesses, have collapsed.
Same here. In Ontario the take from companies is down 50%, because few are making money. In Ottawa, ditto, as our federal deficit rises to the highest point in history. And it’s against this tableau of an economy which is repaired but unhealed, functioning but bleeding, that the real estate bulls are so delusional.
Jim from Calgary wrote this last night: “We paid $600K cash for an ersatz castle in Oakridge Estates, and had enough money left over to adorn said castle with new roof, electrical panel and Pella triple-glazed windows top and bottom — front and back doors, too. We now have a nice house we’re not paying a mortgage on in a leafy SW Calgary neighbourhood near the reservoir, but we’re into it for around $700K including upgrades.
This currently represents at least 80 per cent of our net worth. Given the fact that just 5-7 years ago these places were going in the $400K-range, will that be what I should expect 5-10 years from now? Just wondering what you think. I’d like to dump it now, thus throwing my wife and two kids out onto the street with me, but that wouldn’t go over very well. Just how much do you think we can expect to lose on this in the next 5-10 years?”
Of course, Jim could reasonably expect his castle to be worth $400,000 again in a few years given the combination of a few factors. Rising taxes (inevitable), higher interest rates (certain), less migration from East to West (a given), nagging unemployment (probable) and a stampede of castle-owning Boomers trying to turn real estate into income (assured).
Not only could Jim lose a huge chunk of his equity (and his net worth), but he might end up living in a house which is unsalable. The days are coming when even Calgary will learn that big is no longer beautiful, unless it’s the span of the horns and the size of the danglies on your F150. (By the way, I’ll be in Calgary next month for a talk. Details soon.)
As I poked through the fallen members and splayed lathe and plaster of the Exchange Hotel, I thought about the hot times and blind optimism which encouraged some guy to build so grandly overlooking the fields of wheat. Everything has its season. This one’s for caution.
158 comments ↓
Cowtown?!?
About time!
Cheers,
CM
Sweet old building, always one of my favorites to admire on my way through the town. A pity it’s fallen on such hard times.
Delusional:
http://www.realtor.ca/PropertyDetails.aspx?PropertyID=8959375
Tiny house on 13×100 ft. lot, for over 400k in T.O.
It does have granite counters though… lol
Good gosh how could anyone be so short sighted as to kill the soul of an old building. Inexcusable.
I just did some work last year on on of the first houses built in the uplands in Victoria. The owner obviously cared about the house.
Its showing its age but still has that”charm”
Did some work on another one half a mile down the road,top floor gut out, cheezy laminate floors, medite trim and wainscotting, plastic windows, fiberglass tubs, hideous.
Dumpster full of first growth fir floors, antique light fixtures, cast iron tub, sad really.
Battleship lino in the bottom of the boot Garth, works great. Don’t step in any puddles though. (Speaking from experience)
It will be interesting in 10-15 years when styles have completely changed, and people have decided that they’re not all that concerned with granite countertops, stainless steel appliances and dark brown “espresso” or orangy ikea “beech” fake wood cabinets.
Remember those 80’s white cabinets with the wood trim? Those are now the ultimate sign that your kitchen was a cheap piece of crap from sometime between 1980-1990… the 2000’s will look as silly as that in due time.
High praise indeed for the Canadian banking system -
http://www.nytimes.com/2010/02/01/opinion/01krugman.html
Now, did Krugman really study our banking system, the role of CMHC and government interventions, or did he merely have a chat with Flaherty?
Still checking my mailbox everyday for the book I ordered Jan 15th. I guess it will show up one of these weeks. No wonder Canada Post is losing market share and had to raise their rates.
Email me your order number and I will trace. All current orders have been shipped and largely received. — Garth
Calgary show?!? Finally. Can’t wait. Dragging the fella with me, and picking up a copy of Money Road — bring some of the 2nd print run.
Dan, in the future, try to aquire said trash, as many people would love to have it.
To put a trillion dollars into perspective, $1000.00 BILLS face to face it would be close to 68 miles long.
thankfully got the house listed today and plan on selling it soon and renting for the future.
Enjoy all your books Garth, even though I would not touch RRSP’s with a ten foot pole.
Can’t you get new soles for a cherished set of boots? Or is that as much as new ones?
Speaking of wrecking the interior, I was in an older home just recently that the owner was “fixing up” to sell. There was one of those big “wood walls” probably oak to match the rest of the house, fancy touch at the time. They painted it white! Who in the heck paints over oak? Then they kept painting right over the brick fireplace! The oak hand rail they painted black though. Don’t paint oak. Some people like it. Let the new owner decide if he wants to wreck the woodwork.
Cheap money (low rates) in effect too long inevitably increases the probability of inflation and bubbles. Check out Allan Greenspans term for verification.
It ain’t over until the the fat lady sings…
and she’s booked into B.C. on the 23rd of July, 2010 and appearing day anf night until hell freezes over.
Hi Garth
Read your “Money Road” book already, great book – Lots of specific iformation of what exactly to do i.e. stocks in oil, gold etc. I am thinking about buying a foreclosure home in Florida, perferably near Tampa. Just a townhome maybe when for I retire. Would appecaite any information about foreclosures (i.e. books websites, information workshops) of learning how to buy a US foreclosure – I personally think the real estate down there has a ways more to drop before it bottoms out. Whats your impression? Is it at the bottom or does it has a ways to go? Any information would be greatly appreciated. And again, great book – I enjoy the way you get to the point, you don’t “spin” it so that the politicians don’t take accountability, you hold them accountable!
Also, any information from anybody else about US Foreclosures would be appeciated!
Thank-you, Ed Surrey BC
Garth, look south to see brand new homes to be not that far behind this circa one as cheap cookie cutter stick homes degrade very quickly when uninhabited.
Look for some homes with new inhabitants to be ex-tent city dwellers. Look for all the new jobs to be government specifically Federal ones by way of “Join the National Guard, We’re The Only Ones Hiring These Dayz”.
Join up in 2010 and we’ll put you and your family up in one of our Fannie or Freddy distinguished previously owned (foreclosed) residential dwelling units.
You paid $300 LESS for a pair of boots?
Sheeeez, Garth, if I paid $300 for boots in total I would have myself committed!
Boots is boots Garth! No boots are worth $300 LESS!
Thimk man, thimk!
“Common-sense people can see clearly where the economy’s at.” — Common sense people in this part of the continent don’t even amount to a quarter of the population, then there is the following generation coming on strong.
It’s clear that folks know, and have seen what is happening south of us so what do they do? Load up with more and more unrepayable debt, which is their freedom of choice to do as they please, I guess.
“. . . fields of wheat . . .” — Is that regular wheaties, Monsanto’s GM wheatbangers or (better yet) Kevin Costner’s Field Of Dreams? Good movie, esp. with a bowl of Cream of Wheat!
——
#78 Oakville Owner on 02.01.10 at 8:26 pm — “. . . seen approximately 18% on our investments.”
Our CFP (works for IPC as an independent agent) put our RRSPs and non-registered plan into Cdn. equity mutuals plus one IT., which grew by 17% in ‘09 and 12% (thereabouts) each year over the past few years.
That will correct a little, but even if it goes down substantially, with monthly DRIPs we are still ahead of the game.
——
When the giant solar flare hits on or before 2012 and sends humanity into a tailspin, shuts down nuke plants / electrical / power / gasoline / oil grids, etc. it will render the following a pointless exercise in futility.
This is the US at present. A line from this (follows) says it better, and it gives a clue as to why Harper may have prorogued Parliament — he may follow with similar legislation as the US, so watch for the CPC and possible election call to wrangle a majority.
Big Brother — “Mandatory IRAs just proposed by Obama Administration on 1/25/10 is the first step in stealth nationalization and forced investment of our retirement benefits to support the treasury debt market . . .”
Depopulation? Invite someone to come into the country and do it for you! I understand (not completely sure) there are Chinese troops in the US as well.
Speaking of Obama / Obama 2
——
Economic stuff 1 / stuff 2
Further strange fiscal happenings; last few paras. are good. / Fiat money may be shutting up shop / Today, it’s China and Oz that are headed toward financial barfspewupchuck. / Higher interest rates? Could be.
——
Climategate was exposed for what it was, a complete fraud. Climate and change are two of many constants, but here is the kickback as the UN and others were not able to get their one-world govt. through.
Random thoughts
• My girl and I are abnormal Canadians, have old fashion values, work long hours, have pure cash with maxed TFSA and RSP accounts, sold the house and shorted the market in 2008.
• A guy from Shrilanka told me his money makes him 8% in the bank. Is this true?
• Used to be people work 2 or 3 jobs and paid the mortgage as quickly as possible. Now it’s ok to do it in 40 years and vacation every year.
• The world rewards people in debt and punishes savers.
• Bails out or gives unemployment benefits to losers and taxes prosperity.
• Stocks and houses are flying. So are taxes, food and utilities.
• After inflation follows deflation and sometimes nothingness.
• If one more person says these low rates is an opportunity I may lose my senses.
• I bought Money Road last week. I figure an extra bit of guidance won’t hurt while a cash Prince waits to be a cash King.
• In 2007 someone asked Warren Buffet why a large part of his personal portfolio is sitting in cash making next to nothing. Buffet responded “A profit is a profit”
I gave up on thinking that my penis would get larger and my status with the neighbors was extentuated through real estate buying a long time ago. Bottom line was I’m happy with what god gave me and I really don’t give a hoot about the neighbors penis envy.
I have long held the position that real estate should not be any larger a position in my portfolio than any other asset class. I believe that there are 5 distinct classes of investment and that real estate should no more than 20% of anyones portfolio.
I spent years working towards this goal and now have a roof over my head and enough money in the back to say ‘F’ you to any situation I find tries to aggravate me. In fact my credo is now
“if it ain’t fun , ‘f@#k it”. This may not be for everyone, but it sure works for me. The money I save on having no mortgage (death grip) took my wife and I to Europe three time in the past, to Hawaii twice and once to Asia. Happy banking boys and girls.
Since I’ve gotten smart(er), I have had the time to write two novels, a Superchannel screenplay and take up painting. Lifes cruel when you’re clear headed. Gee I wish I was commuting 4 hours a day in my new leased (60 mo) crap mobile. Nooooooooooooooooooottttt!
Good for a larf…
3804 W 10TH AV, Point Grey, Vancouver West
MLS V802328
33×122 lot, old timer
$1,300,000.00
“Good investment character home in Point Grey. Peaceful neighborhood for family.”
[missed the part about the shops and the bus route]
http://wp.me/pcq1o-rT
The Season of Caution. Good phrase Garth.
I know what you mean about old homes, I love to look at the old ones myself, the bones and see the craftsmanship of the past and what previous owners did to it. I remember a 1910 house in sunnyside (Calgary) that had a cool hand poured basement with an original basement window (partly broken and only visible from inside the house now) still incased in the foundation but now set at a 30o angle.
$800k in Oakridge Estates. Ouch. I’ve heard Oakridge Estates is leased indian land too, not freehold. Most Calgarians won’t touch it as they know the rocky past of the Tsuu T’ina nations vs city. Oakridge (and Estates) is a very pretty area but was always cheap for RE due to it’s very poor transit location, leased land issues and that it sides onto the indian reserve. For $800k there are “overall better” areas to buy into IMO.
Advice, sell now if you can or don’t look at the MLS for a long time.
Mike
When making reference to the enormous drop in Business Income Tax revenue that the Federal Government has experienced, please remember that over $1 billion of that tax leakage is a direct result of Income Trust companies being sold off to foreigners and others that do not pay tax in Canada.
Just as predicted when the Harper regime ignited his Income Trust tax fiasco.
Trillion dollar deficits, highest unemployment since the depression, falling real estate values (soon), and a misleading media… I read somewhere once that when it comes to the economy and governments, their mandate is that “the status quo will be maintained at all costs.” It’s frightening how true that statement really is… and how few of the people responsible for it are going to pay in the end.
Thanks Garth for being a guiding light for those of us who have chosen to wake up. Your efforts are greatly appreciated.
“One big reason is that tax revenues, especially from businesses, have collapsed.”
In 2008 the GAO reported that as much as 2/3 of business in the U.S. payed NO taxes…
http://usgovinfo.about.com/b/2008/08/13/big-business-pays-no-taxes-gao-finds.htm
And here is what happens when new taxes are repeatedly voted down by communities…Welcome to the 3rd world.
http://www.cbsnews.com/blogs/2010/02/01/politics/politicalhotsheet/entry6163464.shtml
I’m seeing the opposite. Real estate is still hot in Toronto. Just last week… saw a bully offer go in 145 over the 400 asking.
A week earlier another, 440 asking, sold for 600.
Classic end-of-bubble behaviour in urban areas, — Garth
I’d say to Jim.
You paid cash, so probably made the $700 grand in RE anyway. So stay in your castle. Real estate gains are often an illusion unless you have more than one property and ditch in time.
With two children, you are bound to have enough time to save for retirement. So start saving, and don’t count on a private employment pension. The trend is against that.
With hardly any debt, and undoubtedly a good income, what’s the matter, really?
Paper profits are only that. To keep real estate gains from a bubble, one needs more than one property. The reason being, as you know, that we are not in Germany. Here, we have no good, dependable “rental stock”.
I have lived the rental bit. It is not good enough. You will have no control over heating costs, electricity. The fridge will be too old, the rug on the cord, the wood floor, only worn melanite; the so called “new, completel renovation”, little more than a coat of paint and not even on the ceiling and guess what “already four years ago!”
Residential property does not wear like rental property and meant to be that way; the “investor” is really a speculator. If he is in it for the long run, it is too often by accident. Not good for you.
My niece and her husband (and 2 children) bailed out of RE in ‘07; by the fall of ‘09, they could wait no longer to purchase in again. It was an expensive affair.
Exactly, in Canada we would never be against a tripling of our property taxes just so that we can keep our city employees fat and happy. Yey! Go Canada!
Canada’s a 3rd world country where a bunch of mafiosi at 15 different levels of government just reach into your pockets whenever they feel like it.
Business tax revenue is DOWN ya say?
Thank the Harper Regime and their Income Trust Betrayal.
Over 1 Billion in tax leakage (so far) has been CAUSED by the Harper Regime and their infamous Income Trust Betrayal.
Canadian TAX PAYING Income Trust companies are being sold off to Foreign Buyers and non tax payers, exactly as was predicted when Harper screwed over seniors and retirees.
As the Income Trust deadline looms, watch for even MORE Tax Leakage cause by Harpers Income Trust Betrayal.
Blame it on Debbie Travis. I almost threw one of my own bricks at the TV when I saw her do that once. Now it’s the trendy thing to do.
Reminds me of the morons that put cheap carpet over hardwood. At least the carpet you can fix.
National Post Blog on the bubble economist Garth was talking about a few days ago (from Scotia Capital.) No sugar coating on this one.
http://network.nationalpost.com/np/blogs/tradingdesk/archive/2010/01/27/further-confirmation-of-canada-s-housing-bubble.aspx
Garth is so right about real estate … it’s just too expensive and must revert to the mean (to prices most families can comfortably afford)
The credit bubble seems to be over … but where to invest? Bonds will suffer if interest rates rise, and stocks already seem expensive if you consider price to earnings ratios. Like Garth says …. “few are making money”.
Danforth
Nothing is moving in Toronto. You are a RE agent spreading propaganda. Anyone buying RE now is either stupid or clueless to the current depression which is being told as a recovery. Buisnesses are suffering or closing down as sales have crashed. The media spins EVERY corporate earnings. They may have beat wallstreets forcast but the numbers to beat were so low. Why else do you think the market fell after the government claims the US grow 5.7% in the 4Q?
Was chatting (listening really) with a 50+ lady who has been looking of work of several months and soon EI will run out, she has a book full of experience and said he age has been the problem, knowing they hired younger people for jobs she applied for. She mentioned her house and car will be her last source of revenue. We mentioned it here before many times ” A lost generation” and to think what’s his name is still on Christmas vacation pumping out Greater Fools which will cause more lost people.
Herb,
The “high praise” by Mr. Krugman was lifted from an article in the Financial times of London, Sunday edition (January 31st, 2010).
It was quoting Paul Martin, Ms Dickinson, Mark Carney……..
They had great opinions, but silent on bailouts or NIJA.
But then, prorogation, …..demonstrations……
http://thetyee.ca/Opinion/2010/01/11/DobinProrogue/
16 Munch on 02.02.10 at 1:04 am
It’s plain to see you never owned and wore a great pair of cowboy boots. I paid 450 for pair of “Justins” in Boston in 1976 and when I took them for repairs the ode shoemaker eyes lit up I just parted with them sending them to Haiti in a local shoe drive, they were still in good shape with a couple of patches in them.
Buy quality but by it on sale.
So the footwear bubble has finally burst. About time.
Sara Beth:
More on the subject of cities poised to do without. The city is New York City.
http://www.nydailynews.com/opinions/2010/01/31/2010-01-31_its_the_pensions_people.html
#25 CalgaryRocks on 02.02.10 at 9:10 am
So, you would rather do without streets lights, clean parks, and police and fire services ~ among other things…?
#35 curious to know on 02.02.10 at 9:46 am
Hadn’t seen that about NYC…but I am not surprised…Thanks for the link…
False choice IMO. More than likely they would have more than enough for these very basic services if it didn’t get blown on other non necessary spending.
#3 JET
Thanks for that property. That’s a re-listing at a higher price. The reason I remember it is because we get daily listings from our agent for that area and we got that one. And our max budget is nowhere near 400K. So that one was listed under 350K once and then re-listed at it’s current asking price. Do they really think that potential buyers who have been watching the market are that stupid that they won’t recognize a re-listed property? That’s some gall.
#5 Toronto Bubble Boy
LOL! That’s our kitchen to a tee. Even though I must admit that kitchen suits our entire decor really nicely, I understand what you mean. And even though I hate (hate!!) my granite countertops they are by the most functional countertops I have ever used. Now if they could just make it not look like granite. And the stainless steel fridges suck. Why? Because you’ll discover as a parent you can’t hang your kids artwork on it. Tacky “decor” to most people, but very heartwarming to a mom.
#30 Dan
I’m with you. And if people need proof about listings holding for longer in Toronto, here’s the map of 30 day + listings in the Danforth/Leslieville/Beach area. Hope the link works if not you can do it yourself.
http://guava.ca/map-checkbox.html?lo14=on&hi14=on&lo15=on&hi15=on&lo16=on&hi16=on
I’ve found that the listings that move the fastest are the ones under 300K. More towards 270K and under. Shocking right? Perhaps it’s the 3.5x annual income thing. Who knew that people actual want more afforable houses.
In a testimony to how great our healthcare system is, man of the people, Danny Williams is gone to the US to get HIS hearth surgery done.
Over there they actually HAVE great healthcare, they don’t just THINK they do.
#17 PrinceGuy , #18 grumpy… Cheers Dudes!!!
Seems people are starting to get it… slowly but more and more are comin’ ’round.
The economy isn’t doin’ as well as the SPIN machine is telling you. It’s a rouse to get more and more to buy bigger and more expensive. Used BMWs are actually going up in price… go figure?!?! It’s a supply/demand thing. Won’t last… X5s are becoming more plentiful than half tons in Kelowna. Yes, dealers are paying more than book wholesale because “greater fool” retail buyers see that BMW rondel on the bonet as a “must have in the garage”. Or is it REALTORs?… what ever…
Was them yer new boots you were a wearin’ in Kelowna the other day Garth? They did look spanky new and not quite broke in yet. Don’t wear ‘em my self any more but remember how a good pair a Caboy boots was an essential… nothin beats the comfort of a good fittin’ pair of well built boots. And if yer not comfertible on yer feet what good are ya ta anyone includin’ yerself. If anything is worth the money a good fittin’ pair of caboy boots is.
Mid year will bring more sanity… can’t wait.
Poor Jim won’t be able to brag around the barbeque this summer that his shack on native land is now worth $1 million, I find it pathetic that these people whine should their shack depreciate 12 months after they bought. A home should be for life unless you lose your job or move. Looking forward to your forthcoming visit in Calgary Garth. BTW YOY sales for January in calgary are up DD.
#22 SaraBeth you said …
“And here is what happens when new taxes are repeatedly voted down by communities…Welcome to the 3rd world.”
Umm SB …please read the following link and see if
your misleading and unsupported statement makes sense …as if raising taxes is the only solution….sheesh.
http://globaleconomicanalysis.blogspot.com/2010/01/massive-layoffs-coming-in-nyc-nevada.html
“Everything has it’s season – this one’s for caution.” Sounds like programming. Ever heard of bucking the trend? If this season’s for caution maybe the contrarian play here might be to throw that caution into your wind. Maybe if you can pull enough critical mass people to that particular cautionary side of the trade you can assume the position on the counterparty. And then again you might be absolutely right about that one. Caution Rocks. Caution makes you feel alive. Live the dream now.
By the way great post. That’s sincere.
#29 young & foolish on 02.02.10 at 9:19 am
Garth is so right about real estate … it’s just too expensive and must revert to the mean (to prices most families can comfortably afford)
The credit bubble seems to be over … but where to invest? Bonds will suffer if interest rates rise, and stocks already seem expensive if you consider price to earnings ratios. Like Garth says …. “few are making money”.
*******************************************
In this environment–Deflation–imo–
Making money is secondary–
Not losing money is number one–
Cash and no debt–is a winner–
Spoke with a colleague out here in Victoria, who is in business in a few of the local malls. He said the Christmas season was bad and business now is even worse. The malls are empty.
He wants to know where all the good news is coming from. He is certainly not seeing it.
#20 Mike (Authentic)
re: Oakridge Estates – close to the reserve – but not owned
You are thinking of Redwood Meadows. 99 year leases on Native land. I think there is 40 years left??
I agree with Garth on the property tax rates going way up here in Calgary. We’ll have to pay for the urban sprawl somehow.
Garth,
Would you mind providing a bit of colour re: top of page 235 …”by 2015 we will have 9,000,000 newly-minted public pensioners also reaching the age when they become major health care users.”
Broadly I’m taking this as reference to the first increment of the Boomer wave that will cross the age 65 threshhold over the next 5 years (CPP/OAS) recipeints … plus? plus?
It would be helpful to understand what/who you are including in the 9,000,000 number.
Thanks for the consideration.
Two experiences with painted woodwork -
Stripped off decades of paint, stained and varnished the original woodwork in a place we owned in the ’80s. Stripping was possible because the paint sat on first coats of varnish. When we sold the house, the new owner immediately painted the trim white …
When we bought our current old place, we attacked the paint on the mouldings in the living room and discovered that the wood had been painted from the beginning. Heartbreak – there is no way you can get milk or lead paint out of the pores of oak, so we wound up stripping the trim anyway to get one good layer of paint. (A neighbour explained that at the time our houses were built, labour was cheap but good paint was expensive, so many proud homeowners painted the trim.)
The mansion I intend to occupy in heaven will have beautifully varnished mahogany trim!
You mean theres not one Canadian that would take a 0/40 mortgage to buy that old building to flip.
If it was in Vancouver, it would of sold by now.
About time you are coming to cowtown !! Look forward to hearing you live big guy !!
As for the guy in Oakridge, well, I used to live in Braeside (a neighbouring district)…..and there was never anything really worth $400K in Oakridge, even though people might have paid that much……let alone $700K today. LOL !!! He’s a greater fool indeed for even asking the question.
For him it is a lose, lose situation. Sellout and wifey gets cranky because she is “homeless” and women are, for the most part as there always expections to every rule, irrational and braindead hormonal bags of flesh when it comes to RE……sit it out and lose $300K and wifey gets cranky. You cannot win…..therefore you let her make the call and absolve yourself of the blame when it blows up in her face.
#3 JET – Is it bad that from the outside I cant tell which half of the semi is completely renovated?!?
The recent Macleans issue has a good article on the housing bubble which you may be interested in. It’s a pretty balanced piece I thought. Although, I see Garth is inexplicably absent from it.
They do have comments from Karl Denninger
an important addition to the GIC vs stock markets investment debate:
http://www.theglobeandmail.com/globe-investor/investment-ideas/buy-gics-only-gics/article1292666/
Sea of Debt
http://www2.macleans.ca/2010/02/02/awash-in-a-sea-of-debt/
Question:
I have a LOC against my house, and Royal Bank gave a big amount back in 2007!
If house prices fall, is there a chance that the Bank may demand the full repayment in, like, a ridiculously short period of time?
Can they come after my house?
So maybe I’m nuts here…but I checked the number of Calgary listings last week, (excluding rural and surrounding area) and came up with just under 3000 residential listings. I just ran the same search (Calgary all zones, inner city, and airdrie) and it comes up with just under 5000 listings…2000 new listings?? That can’t be right, can it?
Has anybody else checked this recently?
#30 Dan
Quit telling anyone and everyone with a view that contradicts yours that he/she is a real estate agent. Comments like that just decimate the position of the Bears. You have got a lot to learn, son.
Nice, Garth is a Metallica fan.
Can your blog title tomorrow be “Sanitarium”? because that’s where people in these bidding wars belong.
Hey CalgaryRocks,
If you hate government so much, why don’t you move to Somalia where there isn’t one! Man, it must be nice there.
Great post Garth,
You’re pretty handy with the prose.
“As I poked through the fallen members and splayed lathe and plaster of the Exchange Hotel, I thought about the hot times and blind optimism which encouraged some guy to build so grandly overlooking the fields of wheat.”
A friend of mine has a bussiness , he picks up printer cartriges refills them and delivers them back to bussinesses. He has close to 1000 clients. He told me the following: those commercial plazas where he couldn’t park his car just 2 years ago, are literelly half empty (most of them) , whole floors that were rented to his (not anymore) clients are empty and with signs for lease ( for months now). Those clients that still change cartriges do it twice or 3 times more seldom. This guy sees this first
hand and says its scary. Most funny part he wanted to buy a house (bigger one, his is already paid off) and arrived to conclusion that its better to wait it out.
He doesn’t read Garth’s blog neither other RE ones.
When he sees what is going on with RE prices he just shakes his head, and believe me he is not a permanent RE bear.
Sorry, forgot to mention he is in Richmond Hill area, but covers pretty much all northern Toronto.
Speaking of a real-estate house-of-cards, reliable reports indicate that IntraWest wants the CDN Fed Government to cough up $US 90 million in cash before the start of the Olympics. Otherwise Whistler could be closed.
http://www.cbc.ca/money/story/2010/02/01/nypost-report-fortress-intrwest.html
Another sign that perhaps things are not quite back to normal perhaps?
Just the facts mam — (from http://www.theglobeandmail.com/globe-investor/investment-ideas/buy-gics-only-gics/article1292666/)
Average Annual Rates of Return:
S&P/TSX Composite Index
•10 years to August 31, 2009 – 4.54%
•20 years to August 31, 2009 – 5.11%
•30 years to August 31, 2009 – 6.39%
•40 years to August 31, 2009 – 6.15%
•50 years to August 31, 2009 – 6.08%
S&P/TSX Composite Total Return Index
•10 years to August 31, 2009 – 9.41%
•20 years to August 31, 2009 – 8.86%
•30 years to August 31, 2009 – 10.76%
•40 years to August 31, 2009 – 9.77%
•50 years to August 31, 2009 – 9.80%
GICs
•10 years to August 31, 2009 – 3.35%
•20 years to August 31, 2009 – 5.11%
•30 years to August 31, 2009 – 7.28%
•40 years to August 31, 2009 – 7.71%
•50 years to August 31, 2009 – 7.35%
Just read that in the Washington Post. It is about FHA (US version of CHMC) and foreclosures.
“Adding to the trouble was a now-defunct FHA program that enabled sellers to cover the down payments of buyers. This meant many borrowers had no skin in the game and were more likely to walk away at early signs of trouble. The program resulted in excessive defaults before it was ended in late 2008, and it is projected to cost FHA an additional $10.5 billion in losses, Stevens said. ”
http://www.washingtonpost.com/wp-dyn/content/article/2010/02/01/AR2010020103527.html?sid=ST2010020201459
Borrowing and spending are simply symptoms of the western culture of consumerism.
Since the dawn of time, people can be tempted. Think of Adam & Eve and the ill-fated apple.
Marketing geniuses know this and exploit it.
Where there is no market for a product, they create one.
Why do I need 10 different cutting/dicing/chopping tools in the kitchen when one good knife will do?
Same goes for real estate. Everywhere you see on TV and print: stainless steel, new appliances, hard wood floors, marble & granite, vaulted ceilings.
Flip this House, Flip that Bird.
Everyone wants the latest and greatest. It’s all about keeping up with the Jones.
And they want it now. Borrow and spend. It’s a vicious cycle. Pay your Visa with your Mastercard.
But remember, as Fight Club taught us… the things you own end up owning you!
You know, we should be congratulating Vancouver. They really know how to throw a bubble-mania party like nobody except Australia! High fives all around.
From the infamous Demographia Survey, some details:
“Canada: Housing is moderately unaffordable, as in previous Surveys. Canada‟s Median Multiple is 3.7. Housing had been affordable in Canada in the late 1990s, with a Median Multiple of 3.0. Canada had 5 affordable markets, 13 moderately unaffordable markets, 5 seriously unaffordable markets and 5 severely unaffordable markets.
Vancouver remained the least affordable market of any size in the surveyed nations, at 9.3, worsening from 8.4 last year. Toronto joined Vancouver as severely unaffordable, with a Median Multiple of 5.2. However, Barrie, within the Toronto region was moderately unaffordable, at 3.4. Victoria, Abbotsford and Kelowna (all in British Columbia) were also severely unaffordable.”
I know, I know, it’s only a comparison of 6 nations, Australia, Canada, Ireland, New Zealand, the United Kingdom, and the United States. But they are our direct peers, the advanced English speaking democracies. Note the charts of the US, UK and Ireland. They’ve peaked and fallen back, we missed the falling back part so far. But 3.7 is not overly bubblish, as a nation, it seems 10 of our largest urban areas have been more afflicted with bubble fever.
Thanks to Mish, who has been saying Canada is a bubble for years. He has a rather good track record on real estate predictions btw. There is really no way to put a positive spin on this data. Victoria at # 8 with 8.3 is the only other Canadian city in the top 20. Toronto, amazingly, is rather tame compared. Who knew? LOL, party on dudes!
Also the ratio of “9.3″ is a median value. The actual comparison, according to my old-time real estate textbook (it still works), would be the price of an “average” 3 bdrm home in a nothing special location, average everything in Metro Vancouver DIVIDED BY the annual average family income of same. I am not sure what these numbers are for Vancouver, anyone? You can just use the average selling price from last month, in Vancouver the “average home” is probably a condo, but you get the idea.
Traditional real estate affordability measure is when prices are at ratios of 2.5 -3, it is a Normal” market, above 4 it is getting too expensive, above 5, it’s getting crazy expensive better sell now, etc etc…9.3 is Mount Everest, don a parachute. I don’t think they had values that high in my old real estate books.
Detroit shows you what happens when the pendulum swings the other way, ratio is 1.5, and sinking. Houses are free in many areas.
Highly doubtful Vancouver and Toronto will crash to 1.5, but if they revert to the mean, look out. In Toronto this would probably be back to the 2.5-3 range, or roughly $180-$220K at a guess, which would be, what, a 40-50% haircut from present levels? In Vancouver the mean is probably higher than 3 (it’s always been pricey comparably), but if average family income declines to say $60- 70K at a guess during a recession, and it reverts to say 4 multiple, average price would be in the range of $250 -$300K, don your crash helmet. If the correction is mild (I am not sure how, but suppose) and the average price drops only to say $400-$500K, what does that do to Vancouver real estate?
Or in other words, as Vancouver has always been the most expensive city in Canada, AFAIK, it will continue to be so. But like anywhere else, if prices correct vs incomes to more realistic levels, there will be a % loss magnified by present bloated prices. If reversion to 2002 or prior real estate values occurs, as it has in many “world class” cities, what does that represent for Vancouver? Or Toronto?
An underwater mortgage for many, I’m guessing.
Vancouverites, plug in your numbers. Toronto too. Your friendly real estate board has the stats.
If I lived in Van or Tor and my house could be sold for $1M and I had a small mortgage, I’d sell now and move to a cheaper location or rent. You just won the lottery, who needs to work. Destress your life.
# 65 Genghis Kahn writes…
IntraWest wants the CDN Fed Government to cough up $US 90 million in cash before the start of the Olympics. Otherwise Whistler could be closed.
————
….”"They must be a little naive down there in NYC.
The only question is how many seconds it would take for an injunction to be ordered against Fortress in a BC court.
I’d guess about .05 seconds.
That’s if the Canadian or BC governments don’t just decide to expropriate the property and kick Fortress in the ass.”"
http://www.businessinsider.com/fortress-investment-demands-canadian-government-pay-up-else-cancel-the-olympics-2010-2
Fresh news from Flaherty: and the RE bubble in Canada :
“He [Flaherty] also played down any concern about a Canadian housing bubble”
The Globe and Mail Tuesday, Feb. 02, 2010
http://www.theglobeandmail.com/report-on-business/economy/economists-see-stronger-rebound/article1453472/
Welcome to Calgary Garth! But trust me, it is different here:
http://communities.canada.com/calgaryherald/blogs/soundoff/archive/2010/02/02/586828.aspx
Re: 40 Calgary Rocks
Danny Williams has a heart???????
are you kidding me?
http://www.realtylink.org/prop_search/Detail.cfm?areatitle=Vancouver%20West&ARPK=37,44,36,26,10105,41,21,32,30,28,23,33,22,39,24,43,29,40,34,853,31,35,42,27&ComID=&agentid=&MLS=V806812&rowc=43&rowp=41&BCD=GV&imdp=&RSPP=20&AIDL=26&SRTB=P_Price&ERTA=false&MNAGE=0&MXAGE=200&MNBT=1&MNBD=0&PTYTID=1&MNPRC=200000&MXPRC=900000&SCTP=RA
you should do a post where your readers can copy and paste listings that show what a completely ridiculous market we’re in. In my opinion thats the most obvious sign that this thing is going to blow up.
#10 Iceman,
Not meaning to be nitpicky, but you need to add three zeroes to your figure on how high a pile of a trillion one dollar bills is!
Flaherty announced this AM that there will be no tightening only an open spigot. That means the inflation train will keep on rolling. In spite of everyones best predictions the free money enviornment can only mean higher prices going forward. Higher prices with depreciating dollars of course. Don’t be fooled, one million ain’t no million anymore !!!
#3 JET,
What a ridiculous house. It looks like it was thrown together with odds and ends salvaged from a scrap heap. Now that I think of it, that street would have made a suitable backdrop for District 9 or Slumdog Millionaire. Anyway, I couldn’t help but notice how many exclamation marks the Realtor used in her write up on the place….LOL.
#56 I was just about to post a link to that MacLeans article but thought I’d check to see if any one had already done so. However, I’ll quote a few sentences.
“That led to an imbalance—too many buyers chasing too few houses. “It’s Economics 101,” says Craig Alexander, deputy chief economist at TD Bank. As housing inventories get built back up and new homes are constructed, both of which is happening, Alexander expects prices to slow, though not contract.
But for others, Canada’s housing market is an outright bubble waiting to pop. Holt at Scotiabank says the market must come down at least 10 per cent. David Rosenberg, the chief economist of Gluskin Sheff + Associates in Toronto, is even more bearish. Based on the price of homes in relation to incomes and rental rates, he predicted last month that prices are in for a 15 per cent to 35 per cent correction. The roaring market has even drawn attention from American economic commentators. From their point of view—which happens to be at the bottom of the crater that was America’s over-leveraged economy—the way we’re behaving now has put us into dangerous territory. “Let me be clear, strictly on the numbers: Canada is in for a housing bust worse than ours,” financial writer Karl Denninger wrote on his blog, the Market Ticker, last month. “Beware, Canadians. You can argue over the timing of the outcome here, but if you think the ‘bad event’ won’t happen and act on that belief, don’t cry when a year or three down the road I start piping up with ‘I told you so!’ ”
“We now have a nice house we’re not paying a mortgage on in a leafy SW Calgary neighbourhood near the reservoir, but we’re into it for around $700K including upgrades.”
Oakridge is a 1970s/80s suburb of splits and bungalow upgrades. Unless these people back onto Glenmore Reservoir, which is the only view area in the neighbourhood, their house is way over-market compared to the neighbourhood. Also, Oakridge is hell on earth to commute from because there is poor access to direct bus routes, and 14 Street SW leading out of it is a chokepoint that makes the Strait of Hormuz look like the mid-Pacific.
I have only ever worn cowboy boots all my life (I’m off a cattle ranch in the Eckville-Red Deer area). A good pair of cowboy boots that will last decades with only occasional new heels shouldn’t cost more than $150. They saw you coming, Garth.
Mike (Authentic) wrote: “I’ve heard Oakridge Estates is leased indian land too, not freehold. Most Calgarians won’t touch it as they know the rocky past of the Tsuu T’ina nations vs city. Oakridge (and Estates) is a very pretty area but was always cheap for RE due to it’s very poor transit location, leased land issues and that it sides onto the indian reserve.”
No, it’s freehold land. For non-Calgarians, the western border of Oakridge is the Tsuu T’ina Reserve. Redwood Meadows, at the far west end of the Reserve out by Bragg Creek, is, however, leasehold land.
#49 BDG YYC on 02.02.10 at 11:16 am
——————————————–
I think 9 million is the entire boomer generation (those born between 1945 and 1965). Therefore those 9 million will be reaching retirement over the next 20 years. And I guess it’s safe to say that in 20 years about 1/4 to 1/3 of all Canadians will be retired and withdrawing from CPP/OAS. Man…we’re gonna be a bunch of old farts!!!!
Flaherty wouldn’t know a bubble if he blew one in a bathtub.
I wear CAT boots – cost equivalent of $150 US and they last and last and last!
I will NEVER pay “$300 less” for a pair of boots
Thanks for listening
#115 Onemorething’s comments also resonated with me. It does appear that the armed forces both here and to the south are pushing hard to recruit right now. Every movie I go to has an army ad slipped in with the trailers and just this week one of the most popular sites on the web started featuring a large ad on their home page. Check it out:
http://www.youtube.com/
I guess it’s probably a good strategy to push for recruits during recessionary times.
When Mark Carnavorie and dim flariteaserate get finished feeding on our children/grandchildren maybe they should read this.
http://www.istockanalyst.com/article/viewiStockNews/articleid/3829901
It’s so wonderful to have found out that they are reading this blog . Thank again Great Washed .
Slightly off-topic but blog related. Just about any of the readers of this blog know that at some point a reset will be occurring in a great deal of RE markets in Canada. The fundamentals on pricing don’t support these prices indefinitely. What will be interesting at least for me will be those people in the RE Business (Agents, Mortgage Brokers, Homebuilders etc) that somehow explain with great knowledge how this was ’seen’, how they tried to convince the countless buyers, sellers etc of the underlying problems with some RE markets in Canada. At this time with the WWW and instant access to almost anything a person has said or put to print, a great deal of these “Sales Guru’s” will hopefully have to answer some tough questions from the media, and in the end have Zero Credibility. RE Agents at this time making profits on placing people into houses they can only lose money on, should be taking those commissions and training as a short order cook, at some point any thing they have to say will be met with scorn and skepticism.
Mish at his finest:
http://howestreet.com/articles/index.php?article_id=12333
US news but it will come to Canada soon. All of our provinces are running in the red too.
I love his recurring line: “No services or jobs have to be cut if the unions would accept pay cuts.”
But, as everybody knows, when times are tough only the private sector sacrifices.
lol. There may be a couple of options between these 2 extremes.
http://www.realtor.ca/propertyDetails.aspx?propertyId=9059262
Really…… this beauty has no bedrooms, 1 bathroom, a tarp roof, falling off stucco and a construction site for a front yard. No wonder the Realturd didn’t post a picture of the front of the place… it is a dump, and I can say that this is a dump with the upmost confidence as I drove past it yesterday for a look. The Realtor tells us “This is a magnificent opportunity to own a level sundrenched property in Edgemont Village”….. I personally think this is the worst thing you could EVER do with $835,000
Real Estate in Vancouver is absolutely F***ed, Toronto is a shining beacon of affordability compared to Vancouver, and the scary thing is that there is no real industry in Van., it is almost all service based business.. either retail, wholesale or service / supply. What happens when every average person in a service based economy is spending three times what they should be on housing?, that’s right, they have no money to keep buying the services in their economy…… and then?… a downward spiral of service business revenues and employees… you can see where this is headed.
But the arguments are very compelling…
“We are running out of land” – Please, I mean please shut up and go outside, compared to most cities Vancouver is nowhere near out of useable land. Go look at real “world cities” like London or New York, no 9.3 to 1 affordability ratios there and these are the worlds premier business centres, heaving metropolis of history and world trade.. Empire State building, Statue of Liberty, Buckingham palace, Canary Wharf…. Oh but wait we have a steam powered clock…. PLEASE!
“Asian Immigration” – I know Chinese people have a slight predisposition for gambling but they are very frugal too and won’t bet when the odds are stacked against them, Vancouver R.E. is too risky for most smart people now, besides as Garth has repeatedly pointed out most of Canada’s immigration is East bound not West bound.
“Real Estate always goes up” – This may be technically true if you go back to the Industrial revolution and compare house prices to now, in the shorter term though, it cycles up and down just like any other tradable commodity (only worth what somebody will pay) and right now it is very very up with few places to go.
“Buy now or never” – Erm… hmmm let me think, commit to a lifetime of debt as a slave to the bank and government just so I can own a lump of wood and brick with some shiny parts in the kitchen or I could rent, have no roofs to fix, no hot water heaters to replace, drains to clear, property tax to pay etc. I will take never buying given the current metrics – Thanks anyway!
“Vancouver RE prices are fuelled illegal drug money and grow ops” – I can’t believe that people are beginning to use this argument, I know lots and lots of people in Vancouver and contrary to this myth most of them are decent people with average jobs and pleasant families, sure there are a few growing pot but with the risks and liabilities involved it is not as profitable as people suggest, if pot growers were really smart they would make fistfuls of cash and buy in San Diego or Miami like the smart immigrants are at the moment.
I have no issues with home ownership if the metrics are good. Don’t hate the vultures just because you made a really really really dumbass decision and ignored your sense of reason and logic to follow the other lemmings over the cliff.
Come on crazy fools there are only 4 more months to get in before the HST and interest rate hikes…. Don’t hesitate, Asians and drug growers are snapping up what’s left in an absolute buying frenzy…. the Olympics are almost here GET IN NOW FOOLS OR YOU WILL FEEL INCOMPLETE!! Global warming is making the Lower Mainland shrink… Nooooooooo that means even less land than before, buy now…. offer more than asking… no conditions JUST BUY BUY BUY NOW. Hmm smells like sarcasm!
Down with overvalued Vancouver R.E. – VULTURES RULE
#26 Larry Laffer — “Thank the Harper Regime and their Income Trust Betrayal.”
Well said. Kannaduhh is folding up tent as it should.
——
“Common-sense people can see clearly where the economy’s at.” — Common sense people in this part of the continent don’t even amount to a quarter of the population, then there is the following generation coming on strong.
It’s clear that folks know, and have seen what is happening south of us so what do they do? Load up with more and more unrepayable debt, which is their freedom of choice to do as they please, I guess.
“. . . fields of wheat . . .” — Is that regular wheaties, Monsanto’s GM wheatbangers or (better yet) Kevin Costner’s Field Of Dreams? Good movie, esp. with a bowl of Cream of Wheat!
——
#78 Oakville Owner on 02.01.10 at 8:26 pm — “. . . seen approximately 18% on our investments.”
Our CFP (works for IPC as an independent agent) put our RRSPs and non-registered plan into Cdn. equity mutuals plus one IT., which grew by 17% in ‘09 and 12% (thereabouts) each year over the past few years.
That will correct a little, but even if it goes down substantially, with monthly DRIPs we are still ahead of the game.
——
This is the US at present. A line from this (follows) says it better, and it gives a clue as to why Harper may have prorogued Parliament — he may follow with similar legislation as the US, so watch for the CPC and possible election call to wrangle a majority.
Big Brother — “Mandatory IRAs just proposed by Obama Administration on 1/25/10 is the first step in stealth nationalization and forced investment of our retirement benefits to support the treasury debt market . . .”
Depopulation? Invite someone to come into the country and do it for you! I understand (not completely sure) there are Chinese troops in the US as well.
Speaking of Obama / Obama 2
——
Economic stuff 1 / stuff 2
Further strange fiscal happenings; last few paras. are good. / Fiat money may be shutting up shop / Today, it’s China and Oz that are headed toward financial barfspewupchuck. / Higher interest rates? Could be.
——
Climategate was exposed for what it was, a complete fraud. Climate and change are two of many constants, but here is the kickback as the UN and others were not able to get their one-world govt. through.
Saw a big ad in the Toronto Star today for a free seminar with (Donald) “Trump’s Experts” on real estate investing.
I don’t know what it’s all about, so it could be about the upcoming crash and how to profit from it, but somehow I doubt it.
Of course, it was supplemented with testimonials from two women. Because, since about 6 months ago, everyone seems to be going after women as unexplored investment territory — especially the big five banks.
The amazing thing to me is… why is Donald Trump seen as a successful real estate investor? Hasn’t he been in trouble quite a few times by getting in over his head and not foreseeing recessions?
Development for that urban decay
” bank that financed renovations of inner-city houses. ”
Hundreds of homes that should have been improved instead sit vacant and crumbling. Though most depositors weren’t hurt, the bank’s demise has cost the Federal Deposit Insurance Corp.’s insurance fund an estimated $289 million and wiped out shareholders who owned about half the company, once valued at about $100 million.
Meanwhile, the number of Omni-related arrests has reached four, including the bank’s co-founder, Jeffrey L. Levine, who pleaded guilty to bank fraud two weeks ago.
Federal prosecutors said in court filings that bank records, for instance, were routinely doctored to hide losses, and a loan officer took kickbacks in return for doling out loans. The bank allowed people to “flip” houses three, four and even five times, artificially inflating their value, prosecutors said………
Starting in 2000, Omni expanded rapidly. It acquired a collection of banks, which allowed it to tap a new, cheap source of funds: bank customers’ deposits, which were FDIC-insured — “backed by the full faith and credit of the United States government,” as the FDIC’s motto goes.
Omni’s growth continued. Fueled by deposits that reached $797 million by the time it failed, Omni’s assets grew more than ninefold between 2001 and 2009, to $956 million.
Meanwhile, it spread out from its southeastern base, adding bank branches or loan offices in Chicago, Birmingham, Philadelphia and Dallas. Omni’s reported profits soared, rising from $685,000 in 2002 to $9.3 million in 2006.
But much of those profits turned out to be a mirage. Like many of Georgia’s hundreds of small banks, Omni was swept up in the real estate boom in metro Atlanta and other cities, making a growing pile of loans that were based on seemingly ever-rising property values.
By 2007, rehab and other commercial real estate loans totaled $488 million — 75 percent of Omni’s loans.
http://www.ajc.com/business/bank-leaves-trail-of-287645.html
Re #52
This shit has got to stop. Do you guys forget that women read this blog too? Do you forget that women buy Garth’s books and have mortgages and investments to deal with? And argue with male spouses that don’t want to sell (or want to buy now, now, now)? Good grief, all you have to do is read some of the posts here and you can tell that men are also perfectly capable of acting emotionally and irrationally.
I’m sure you can make your point without coming across like a misogynistic douchebag who never gets laid.
“So maybe I’m nuts here…but I checked the number of Calgary listings last week, (excluding rural and surrounding area) and came up with just under 3000 residential listings. I just ran the same search (Calgary all zones, inner city, and airdrie) and it comes up with just under 5000 listings…2000 new listings?? That can’t be right, can it?
Has anybody else checked this recently?”
——————————————————-
no idea about Calgary, but I do know that my “search” for apartments in Kitsilano between $200,000-$900,000
shows an increase in listings from 44 to 84 in just over 4 weeks.
#38 CalgaryRocks on 02.02.10 at 10:11 am
First, just what do you consider non-essential city services that money is just “blown” on?
And secondly……. I am an American Citizen married to a Canadian and living in Canada. I have 16+ years of experiance working within the U.S. Healthcare system… Three years ago my husband has a MASSIVE stroke and nearly died.
If it had happened in the U.S. I KNOW he would have died, and I would be living on the street having lost everything we have (which isn’t much) to pay for his medical bills…
If you love the U.S. system so much…by all means, move there. As for me I am eternaly grateful to the Canadian People and the Healthcare System here… it works…And I am sick and tired of people like you bashing it at every chance you get when you haven’t a clue as to what the hell you’re talking about. You don’t know how good you really have it… And would be among the first to squeal like a stuck pig should you ever lose it and have some form of the American system adopted here.
:-/
#76 grumpy on 02.02.10 at 2:10 pm
Flaherty announced this AM that there will be no tightening only an open spigot. That means the inflation train will keep on rolling. In spite of everyones best predictions the free money enviornment can only mean higher prices going forward. Higher prices with depreciating dollars of course. Don’t be fooled, one million ain’t no million anymore !!!
******************************
Bernanke dissed deflation too and thought all he had to do was lower rates and stimulate,to keep inflation surging to extend the housing bubble–if it popped–
And it popped–he lowered rates to zero and threw more debt money at it/relative to GDP–then at any point in history-
How’s that working out for him?
Here’s why it wont work–very simply put–
Sentiment has shifted–
It will here as well and when it does,we’ll know–
The pool of greater fools dried up–
Sentiment–both positive and negative–
The most powerful of all market forces–
“The herd in motion”
It must and will–run its course–
Hundreds of trillions in debt,with the collateral constantly falling out from under it,is happening all over the world–
That debt must be unwound,prices of everything have to come down to affordability–before we reflate again–
Flaherity–just like Bernanke–will be hamstrung by deflation-
If either of them had a clue what they were doing,they would let the free market work–it’s very fast and efficient at price discovery–
It also reveals “all” who have been swimming naked–
Does anybody know the real correlation between Annual demographia housing affordability survey over the past 6 years and its affects on housing boom and bust effect, does it give any kind of future indication?
Somebody sent me a chain letter email today regarding a protest of the HST.
In the write up they claim that on a 1 million dollar new home in Toronto, the total tax burden to the buyer would rise to just under 200k$ after Ont. land transfer, city land transfer and HST.
How can new home sales not be affected?
The website is:
http://www.unfairtaxgrab.com
but I know this tax is signed and sealed for delivery already.
The saying that you get the government you deserve has never been truer in Ontario.
“But, as everybody knows, when times are tough only the private sector sacrifices.”
You mean Lloyd Blankfein? Poor guy.
#91 annoyed
You just validate the point with your rant.
I fight all the time with my wife about house buying vs. renting here in cowtown. Spreadsheets and financial arguments don’t work – all is I get is … I want my “own” house.
He’s 100% correct – dammed both ways.
#87 CalgaryRocks
Two choices:
1. Off you go then…., or
2. Name them…
The Macleans article is just excellent. Lately you have seen a lot of mainstream media articles suggesting that we are in a bubble. The tipping point is near.
By the way, the foreclosure lawyer mentioned in the article Andrew Bury is a really great guy. He has a tough job but is absolutely impeccible as a lawyer and a first class guy. Very fair and decent.
We need to move away from a system that’s really set up for hucksters to basically produce securities that are fraudulent and then market them around the world,” he said.
The Boston University academic is the author of a radical new book called Jimmy Stewart Is Dead: Ending the World’s Ongoing Financial Plague With Limited Purpose Banking.
The book proposes that banks should be turned into mutual funds that would take no risks and lend out only what they had taken in deposits from savers.
Professor Kotlikoff’s views have already been praised by Mervyn King, the governor of the Bank of England.
Financial regulators, governments and academics around the world are looking at various measures to prevent a repeat of the banking crisis of 2008.
If Professor Kotlikoff’s ideas were undertaken in Britain, the changes would be more far-reaching than the so-called ‘Big Bang’ reforms of the financial industry in the 1980s.
.
#39 Grey
LOL! That’s our kitchen to a tee. Even though I must admit that kitchen suits our entire decor really nicely, I understand what you mean. And even though I hate (hate!!) my granite countertops they are by the most functional countertops I have ever used. Now if they could just make it not look like granite. And the stainless steel fridges suck. Why? Because you’ll discover as a parent you can’t hang your kids artwork on it. Tacky “decor” to most people, but very heartwarming to a mom.
- I happen to like Granite countertops and stainless steel. When we redid (actually my husband) we could have bought just the granite (black) for about $2,500. – Don’t know how much more it would have cost the finishing and installation. It was cheap looking back. But at the time we didn’t want to put out that much. I actually regret it now. I liked the look of the stainless appliances. but again beyond our budget. Plus, at that time every finger mark showed. The new ones don’t.
#91 annoyed on 02.02.10 at 3:28 pm ……………LMAO………..”hell hath no fury like a woman scorned”
It’s pretty bleak out there no matter where you look. Commercial real estate collapsing in the U.S. and here, other real estate already collapsed in U.S. There are pockets of bubble insanity in Canada but they simply can’t last.
Some estimate that approximately 24% of people aged mid-to late twenties and younger are unemployed and things are not looking good in new jobs department. A whole decade or two may be screwed up by this.
Nice to know there are some jobs where you can not work and still get paid, like the PM and his coterie, as well as newly appointed Con senators. I feel so proud.
#91 Ali,
Listings are rising in Vancouver as well. Is it the start of something? Who knows?
Remember the immortal words of Mao Tse-Tung – “It is always darkest before the black.”
#59 the truth
I live in TO and I agree with “Danforth” (real Estate agent or not)…as well, I agree with Garth, as we have all seen this behavior before from our mirrored cousins S of the border as well as ourselves 1989.
Time will tell, but to me, the fundamentals certainly are not there for a real estate charge.
Remember, it all requires a good HEALTHY economy good incomes such as we had mid 1980s –> bouble, 1997–>2007(bouble?). I’m not saying RE will not be a good LONG TERM investment, but like the song says…You got a know when to hold em…know when to fold emm…
This week the US president sent Congress a federal budget worth $3.83 trillion, of which close to $1.6 trillion is deficit. That means almost 50% of the annual spending of the largest economy of the world will be borrowed money.
________________________________________
um.. i think you mean… almost 50% of annual spending will be NEWLY PRINTED MONEY… who in their right minds will lend the Americans $1.6T?
they are going to print as much as they need, just like they have done last year.
print print print.
#91 Annoyed, you wrote
“I’m sure you can make your point without coming across like a misogynistic douchebag who never gets laid.”
Uh….irony much?
Physician, heal thyself.
That’s enough, boys. Zip. — Garth
#40 CalgaryRocks on 02.02.10 at 10:17 am
In a testimony to how great our healthcare system is, man of the people, Danny Williams is gone to the US to get HIS hearth surgery done.
Over there they actually HAVE great healthcare, they don’t just THINK they do.
………………..
Tell that to the 40 million who don’t have health insurance and to those that have a pre-condition who are cut off or some who are afraid to let their insurance company know that 1 or 2 of their children have a genetic disease. And, their healthcare is no better than ours. I happen to belong to an ACOR cancer website and hear about all of the problems patients in the US encounter with their medical system and many of the specialists they have to deal with.
#91 annoyed
Thanks for stating that.
greetings,
does anyone know the highest recorded prime rate in canadian history? i know in the US it was 21.5 in 1980…i can’t seem to uncover the canadian figure.
peace and goodwill.
#76 Grumpy…
Flaherty announced this AM that there will be no tightening only an open spigot. That means the inflation train will keep on rolling. In spite of everyones best predictions the free money enviornment can only mean higher prices going forward. Higher prices with depreciating dollars of course. Don’t be fooled, one million ain’t no million anymore !!!
But average salaries have not changed, this is where every R.E. price justification fails, the price may have increased but the ability to pay for it has not, hence – HOUSING BUBBLE IN VANCOUVER if salaries and rents had gone up in relation to R.E. then the bubble would not seem so inflated, but they didn’t so keep your eyes open for house flippers becoming burger flippers sometime in the near future.
#91…….
It is a commonly taught sales tactic for the realtor to separate the man from from woman and work the woman purely with emotion during the selling phase of transaction. They know that what I stated is a fact.
Century 21, one of the largest real estate firms in North America, exploits this tactic perfectly in regards to what I am talking about in this TV commercial from a few years ago……to wit…..the infamous “Suzanne” spot……..
http://www.youtube.com/watch?v=Ubsd-tWYmZw
I am not sexist or anything else, I am a realist, and quite succintly stated that not all females are like that in my original post, a fact which you choose to conveniently ignore.
http://www.bankofcanada.ca/en/rates/sel_hist.html
#111 canadianpatriot
#40 Calgary Rocks – I presume you go to the U.S. when you are in need of medical treatment as well since their health care system is so much better than ours.
Garth,
got to the part of rrsp mortage in your book ( book is a great read)
One question:
We have no debt and wife has about 75k in RRSP, I have a pension at work. Both 30 y/o and rent. If we bought a house down the road for 200k, could we get a mortgage from the bank for 125k and for the remainder use her rrsp as a rrsp mortgage? Thanks
Yes, but it would be a second mortgage, which would impact the terms of the first one. In addition, the interest rate would be significantly higher which might pose a cash flow problem. — Garth
#46 Jr, I totally agree. There will be plenty of opportunity in the next few months so cash right now IMO is king. Energies are going to do very well as will the commodities in the months to come. Banks are still near their highs of 07 so I would be cautious with those ones. Silver in particular I strongly believe is going to shine in the next few months and will very likely see $21.00 once again in the not too distant future. When you consider that there is a 30 year supply of above ground gold to a 6 month supply of above ground silver, which do you think has the most potential. I know which one I’ve been buying but stay within the 10-15% of net worth as Garth as mentioned many times. Just my opinion for what its worth.
I wish! If only I were rich enough!
I did experience US healthcare when living there and believe me, Canada is so far behind it’s criminal.
LOL. Yes in Canada everyone has access to sub-standard healthcare that you wouldn’t even wish on your dog. In fact, dogs can get MRIs and surgeries faster than humans in Canada.
C
In Vancouver we are seeing the signs of recession everywhere. Every day I see more empty shops and retail spaces in the Downtown area. Considering that the Winter Olympics has not even started yet, this is a very bad sign. Once the Olympics is over I think the other shoe will drop, and Vancouver’s economy along with its real estate will fall off the cliff.
There are two good articles that show how one project related to the Olympics has gone bust before it even started.
Floating Hotel Plan sails into rough seas:
http://www.vancouversun.com/travel/Floating+hotel+plan+sails+into+rough+seas/2512069/story.html
Norwegian Star Charter cancelled:
http://www.maritimematters.com/shipnews.html
Everyone please call around and ask how long it will take you to see any kind of specialist for a sobering wake-up call.
Tell yourself we have a great healthcare system. With this kind of healthcare, I seriously doubt that the boomers will be outliving their savings.
Looks like everything is coming back to life according to our Finance Minister. Top Economists in Canada are saying we are in for a strong recovery and the housing bubble will not happen in Canada (not sure what took place behind the closed doors). Here’s the link from the Globe and Mail.
http://www.theglobeandmail.com/report-on-business/economy/economists-see-stronger-rebound/article1453472/
Would these be the same Economists he consulted when he said that Canada was sheltered from the recession?
ronaldo 117
Gold would have to be 7500 $(give or take) to make what I have in a little Quebec lithium mine in one year.
It has been mothballed since the chinese flooded the market and they just slammed the door shut on ree’s . I’ll see your gold and raise you my lithium . It payed for last summers vacation and all my original cash out . Above ground ,below ground . Above ground I’ll give you that one . Below ground (core samples ) I ‘m reminded of mark twain saying .” a gold miner is a liar standing beside a hole in the ground “
Scotland and Germany have both recorded bitter winters, and China bid adios to a freight-load of sea ice. Climategate was exposed for what it was — a complete hoax and fraud.
Climate and change are two of many constants, but here is the kickback as the UN and others were not able to get their one-world govt. through.
——
#26 Larry Laffer — “Thank the Harper Regime and their Income Trust Betrayal.” — Well said. Kannaduh is folding up tent as we post.
——
“Common-sense people can see clearly where the economy’s at.” — Common sense people in this part of the continent don’t even amount to a quarter of the population, then there is the following generation coming on strong.
It’s clear that folks know, and have seen what is happening south of us so what do they do? Load up with more and more unrepayable debt, which is their freedom of choice to do as they please, I guess.
——
This is the US at present. A line from this (follows) says it better, and it gives a clue as to why Harper may have prorogued Parliament — he may follow with similar legislation as the US, so watch for the CPC and possible election call to wrangle a majority.
Big Brother — “Mandatory IRAs just proposed by Obama Administration on 1/25/10 is the first step in stealth nationalization and forced investment of our retirement benefits to support the treasury debt market . . .”
Depopulation? Invite someone to come into the country and do it for you! I understand (not completely sure) there are Chinese troops in the US as well.
Speaking of Obama / Obama 2
——
Economic stuff 1 / stuff 2
Further strange fiscal happenings; last few paras. are good. / Fiat money may be shutting up shop / Today, it’s China and Oz that are headed toward financial barfspewupchuck. / Higher interest rates? Could be.
Received an e-mail from another wed site from a gentlemen who is making a move from Vancouver to the Annapolis Valley for farm land and hopefully a better life. ah adventure go East young man. I think he will do just fine.
You know you’ve got it bad. when you leave this blog on one of your screens during trading hours , she who must be obeyed says . I haven’t got the money road yet . Not at coles yet .
#69 Got A Watch – to give you an example at what has happened over the last 40 years with RE in the lower mainland. My first home purchase was a brand new 2 level 1878 s.f. ,3 b.r., unfinished basement, townhouse in Lynmor Village on Lillooet Rd in North Vancouver. The requirement was for $3000 dn with a mortgage of 17,800 over 25 years, 5 yr amort. This price represented 2.6 times my annual salary. I qualified with my own salary which was a bit above average at the time. My wife was not working so I qualified on my own. We had 500 bucks in the bank after paying off our debts after 2.5 years of marriage and both of us working. I borrowed the down payment from my mother to make the deal and paid her back within a month after obtaining a loan from the same bank for what I told them was for furniture. No problem they said. So now my condo now represented 100% of my net worth. Anyway, today that same condo is selling for $469,000 which if you used the same ratio, I would need to be making $180,000/yr. Not likely. The same job I held back then would likely pay no more than $60,000/yr today. It appears that our dollar has lost 2/3 of its value along the way. Yes, there will be a correction and it will be a dandy. I say all the increase in the past year will melt away plus 20% as a start.
#91 annoyed
“I’m sure you can make your point without coming across like a misogynistic douchebag who never gets laid.”
——————————-
Thanks for that!!!
http://globaleconomicanalysis.blogspot.com/2010/02/pool-of-greater-housing-fools-in.html
for anyone interested in Australia – similar scenario to Canada
#93 SaraBeth, he is from the U.S.
Ronaldo I noticed your interest in gold and silver prices.
If we have a 60 trillion dollar world economy we probably have at least that much money in the world and there is likely more than that. Six month supply of above ground silver. Lets call that 450 million ounces.
Money divided by ounces is at least $133,333 bucks an ounce for silver and that makes $21 an ounce for silver too cheap as a buy out price.
If you have any doubts here is the equation.
$60,000,000,000,000.00/450,000,000 ounces of silver =
$133,333.33 more or less. Isn’t math great?
For a pound of silver you ought to be able to pay cash for a roof over your head and survive with style.
Steven
#83 Jake, there will be a time for martial law in the US likely in hot spots during this year. Its a win win for the Feds, jobs and security.
#122 Just Wondering,
Flaherty is so cagey. Everything is so carefully constructed these days to sound like all is good but keep the fine print there so it doesn’t come back it him later.
He is playing the confidence game. All is well, don’t panic.
I agree we should not panic but we will all be shovelling debt for a decade no matter what he says.
CalgaryRocks,
Of course, Somalia is extreme. However it nicely illustrates the value of strong governing institutions (and examination of any number of countries, regions and entire continents would illustrate the same thing). Canada is one of the best countries in the world that millions of people would do anything to get into, high taxes and all. Why do you think that is? Big trucks with testicles? The Stampede?
As for wasteful spending… yeah, those subsidies for oilsands development right piss a guy off. Living in Calgary, you must hate those eh?
Don’t get me wrong – there’s always room for improvement and big bureaucracies have some degree of inherent wastefulness. But so does any big organization. Criticize certain programs, fine; but attacking government writ large exposes your ignorance.
Plus, I seem to recall that governments just bailed out the biggest “brightest” captains of industry, not the other way around. Should’ve let ‘em implode, I say.
You live in the free world… enjoy!!
thanks for the info. jess re: the highest can. interest rate in history…however, i don’t have the time to search through all the .pdf files to find the highest.
do you (or does anyone else) offhandedly know what year had the highest…or how much the % was at this time?
i ask because many people i work with find it hard to imagine high rates, such as the 21.5 experienced in the states in 1980.
i find their attitude particularly frustrating, and wanted some ammunition for my side of the argument.
thanks again…esp. you jess.
p.s. garth, you are def. an inspiration for all the blue-pill takers out there; keep up the great work, and keep unlocking minds…esp. those in vancouver and toronto
I take vitamins too! — Garth
Well, at least we agree on something.
#123 – Debtfree, you misread my post. I don’t buy Gold, I buy silver but only as an insurance and I too own shares in Lithium mine so I will call your Lithium and raise you my Quebec Zinc shares. I love Quebec as it is a very mining friendly province. Thanks for the feedback.
#112 Cheese Grater fool on 02.02.10 at 5:28 pm
But average salaries have not changed, this is where every R.E. price justification fails, the price may have increased but the ability to pay for it has not, hence – HOUSING BUBBLE IN VANCOUVER if salaries and rents had gone up in relation to R.E. then the bubble would not seem so inflated, but they didn’t so keep your eyes open for house flippers becoming burger flippers sometime in the near future.
*****************************************
That’s a good point you bring up and one that few notice–
In fact–wages have stagnated since about 2000–
This was masked by 4 things–
Easy credit–house prices increasing,an “always” rising stock market and importing cheap goods from China/Asia-
As home prices increased,peoples net worth increased (on paper) they could use their equity to make purchases that otherwise would not have been possible-
Interest rates at historic lows made money cheap to borrow–
Outsourcing to Asia allowed cheap imports in,which also hid the stagnate wage growth,but people “felt” richer–
Without those 4 events,this wage stagnation,would have brought about a consumer spending curb and a fast recession would have occurred and cooled the credit/real-estate market,before a bubble formed–
But–it didn’t happen–
They goosed the market with easy credit money and it all combined,overheated all the markets and economy’s–imo
@#30 Dan on 02.02.10 at 9:26 am
I’ll have you know that I’m not an agent.
I’m simply sharing that I’m acquanted with someone who is looking to buy (despite my diplomatic cautions about the market…)…and we’ve seen a few places sell five days after list with exorbitant offers above list. Yes, sellers are pricing aggressively to get a bidding war (that strategy is still working in 2010), and yes, some good houses are going for 130% of list.
This heat will cool off…I agree with most of you on that point. However, if you can walk to a subway stop on the yonge/bloor lines, you’re likely in a much stronger position to retain property value as compared to cookie cutter suburbia. They’re just not building any more sfd houses in the city, and living in the city will remain in demand. Only towers and crummy town-house infills. Both examples were walkable to the TTC grubway, bloor line.
#106 C.T.O.
I appreciate your comments. However, I’m not a bear on RE…not because of vested interests, MSM manipulating my thoughts, or me being in any RE occupation. I’m university educated near the top of my class and have analyzed the variables. I just don’t see why population growth via immigration concentrated in the big cities won’t hold up demand.
#117 Ronaldo on 02.02.10 at 6:20 pm
#46 Jr, I totally agree. There will be plenty of opportunity in the next few months so cash right now IMO is king. Energies are going to do very well as will the commodities in the months to come. Banks are still near their highs of 07 so I would be cautious with those ones. Silver in particular I strongly believe is going to shine in the next few months and will very likely see $21.00 once again in the not too distant future. When you consider that there is a 30 year supply of above ground gold to a 6 month supply of above ground silver, which do you think has the most potential. I know which one I’ve been buying but stay within the 10-15% of net worth as Garth as mentioned many times. Just my opinion for what its worth.
*******************************************
I’m not bullish on commodities at all,i think they will fall in price from lack of demand–
Of course–food and oil are always anomalies,in either inflation or deflation,because of weather and political influences–
Things like base metals,lumber–most raw materials–imo–are in for a severe correction and it could initially take gold and silver down with them–
Especially silver–
I like silver on a long term basis–but for silver we need to see higher gold prices and a true fear driven flight to quality–
USD and Gold/Silver competing as a currency,as they did in 05 and early 09–
I think in terms of % gains-silver has the best shot,in the long run,but we need the above scenario to happen–
I think it will–somewhere ahead–
Gold and silver like uncertainty and i don’t think that will be in short supply–
Garth says higher rates ahead,he might be right,but i think lower rates are coming first–jmo
#134 canadianpatriot – this should answer your question for the Bank of Canada Rates:
http://www.bankofcanada.ca/pdf/annual_page1_page2_page3.pdf 21.24% August 6, 1981
For U.S. Rates check:
http://www.PrimeRateHistory.info
http://www.CurrentPrimeRate.info
I remember this period of time very well as I started building my house in March 1979 and locked in my mortgage at 11% and by October of that same year bank rate hit 14% and was up and down like a yo yo til it peaked at 21.24 by August 1981. Three years later when mortgage came up for renewal it was still near 15% but by then my wages had risen and I put down a large chunk so was not badly affected. Many other people walked away but before the peak people were running to the bank to lock in at 21% fearing that the rates would go higher. That’s how crazy things got. A year and a half earlier, people were lining up in freezing temperatures at the BNS in Vancouver temperatures to buy a gold coin at $850 thinking it was going to the moon. That’s how the herd mentality works.
88 Cheese
Not that I disagree with your post, I would like to touch on your first two issues
“Running out of land”. What we have to understand is we are not talking just physical land – we are talking
developable land which in addition to physical limitations
(obvious in vancouver) also includes political constraints for various reasons (ALR being a typical component).
If you think developing land is quick, straightforward and
logical, I invite you to try it!
Referring to the demographia study, London and New York still sit at ratios of 7 or more – basically unchanged for two years at least. Since this ratio is “affordability”, income comparison between the cities are irrelevant. It
merely becomes a measure of the desire to live there.
Now the “Asian immigration” looks to be harder to quantify. But I did find a link that listed Toronto and Vancouver as “alpha” cities in immigration, meaning they have high levels of foreign-born residents – 4th and 6th in the world respectively. If this trend continues, we can conclude there will be continued demand from this source for housing.
I know Garth dismisses this, but these statistics lend credibility to the theory.
#139 TheTruth
I’m university educated near the top of my class and have analyzed the variables.
Good job Professor Smartypants.
But it all makes sense now what happened to Bear Sterns and the likes, they used only high school educated investment managers.
Wall Street and a lot of other highly educated people, almost as smart as you think you are, missed a pretty big one. They made a lot of assumptions and declined to factor in some of those “negative” variables.
But whatever helps you sleep at night.
#122 Just Wondering
Thanks for that link, if you look at the report in the middle of the article from the Finance Department, you’ll notice the projected bond rates, 3yr and 10yr.
Allright you’re coming to Cowtown, watch out for all the statists we seem to be growing here, the morons who think healthcare is free (how much tax do we pay people, hello, duh, healthcare is not “free.”), and that things like government schools and government roads are a right, hahahahaha!!!!
The person in Oakridge, your house is only worth what someone will pay for it, period. I’m sure taxes will skyrocket in Calgary, after all we have two 25 million dollar bridges to build over the bow so yuppie/hippy retards can stop global warming.
People are stupid enough to think their property taxes pay for things like schools, healthcare, roads, police, fire, not even close, property taxes are not high enough to pay for those things, corporate taxes pay for those things. Anything the government does the private sector can do cheaper and better and usually faster, anyone in Alberta remember when Telus was AGT or the province had booze stores, you know the ALCB? Both were a joke, poor service, poor selection, open till noon on a weekday. Imagine if healthcare and education were privatized, and no, US healthcare is not private, its controlled by the insurance and pharmacutical industries. True privatization means no government involvement and when you have that you have the best situation. Think what it would be like if the government ran the supermarkets or the clothing stores or the housing industry, want some bread, go stand in line for a day. Its funny how the things we need to survive, food, clothing and shelter; we trust in the private sector to provide. Things we don’t need to survive; education, medicine, roads, police etc. we think we need the government to provide lest fire and brimstone rain down from the sky to smite us. Ever see naked people just walking around your town, no? Me neither, but we need the government to provide us with clothing or we will have naked people dying in the streets, hmmm? Not happening people. Think, government is not part of the problem, it is the problem, insanity: walking into a voting booth and thinking anything will change. Politics is just a hamster wheel, your team wins then you reward your friends and punish your enemies, next time you get punished, and so on, and so on. 50 years ago people were bitching and moaning about government bailouts etc, same shit, different era, we get stuffed while the rich get richer, nothing has changed, happy now you’ve wasted your life worrying about politics?
#139 The Truth – here is an analysis which may be of interest to you as someone who has analyzed the variables.
http://divestor.com/2009/12/06/what-makes-vancouver-real-estate-so-expensive/
First of all, if y’all keep talking about Vancouver RE tanking it will never happen. Why don’t we all start saying it’s cheap and it will go up forever….then it will tank.
Seriously, what’s really happening and that no one is talking about is a mass transformation. Vancouver was once a local market. It’s now become a global market with interest from around the world. If you have not been to Vancouver to see this then you have no comment worth considering. Essentially the rich will always be rich even in poor or bad markets. They still buy Mercedes when the market is in a recession, they still buy property -maybe at better prices but they still live the lifestyle. What we are seeing in slow motion is the movement of regular folks with regular salaries being pushed out of Vancouver. There will be a people who live here and then there will be people who have to move away to different cities and provinces. There will be a much larger descrepancy between those that can afford to live downtown and those who will comute a la Los Angeles where people drive one or two hours into the city everyday.
This is what’s happening. You all think that the market will collapse because YOU can’t afford it, but there are many that can and will. Vancouver has a beautifully planned neighborhood with green spaces, biking, walking skiing and everything at your doorstep. This is value and quality of life. People will pay. Those that can’t afford the life, will complain and move out. This is what’s happening and will continue. Yes, there will be RE corrections. But, good real estate in Vancouver is priceless. Ask me how I know, I was born here and have seen every market the last 60 years. Wake up to the new reality, Vancouve is not all of a sudden going to be 50% less.
Post#3 Jet. Good link. Okay first time buyers lets pick a picture. The kitchen.
Look at the uppers over the sink. Little cramped for space on the left between the cabinet and sink. A big guy like me would have that cabinet door right in the kisser.
Look at how the upper cabinet deadends into the other upper, look at the top right of the pass through. Now look at where the cabinet joins.
Sink base and upper, look on the left top to bottom. Is it a straight line?
The kitchen base is over butting into the other base, no filler strip. Hows that corner base work.
How about when you open the sink base door on the right, goes into the dishwasher. Handle into the face of the dishwasher.
What about when you open the dishwasher door, blocks the sink doesn’t it?
Microwave over the stove is it on a shelf?
If it is how does the vent work, and the light? Hint it sucks from the bottom.
And did you look at the elevation picture of the house?
See it?
Look at the front door, oval window or square.
Look at the hand rail.
Alright, look at the color.
#143 smw
Samrtypants?? I believe everyone is smart in his/her own way.
Wall Street you say didnt see it coming?? Come on…of course they knew what they were doing. They made profits in 2009 while losses were socialized. The goal of these financial corporations is to make money whether it is good for others or not. Even when someone goes bankrupt, someone makes money. That is our system.
Why don’t you buy a ski resort, get huge mortgages and loans against it, funnel that money to you friends, then declare bankruptcy. Then those friends will offer to buy it if the government pitches in some. Does anybody really lose in the scenario??
ronaldo 117
Gold would have to be 7500 $(give or take) to make what I have in a little Quebec lithium mine in one year.
It has been mothballed since the chinese flooded the market and they just slammed the door shut on ree’s . I’ll see your gold and raise you my lithium . It payed for last summers vacation and all my original cash out . Above ground ,below ground . Above ground I’ll give you that one . Below ground (core samples ) I ‘m reminded of mark twain saying .” a gold miner is a liar standing beside a hole in the ground “
————————————————–
someone who played things exactly as I did! I’m just trying to figure out which you bought. Ticker ends with a “c” I’m guessing. I bought that one and 5-6 others.
but i do think that the gold juniors will be the biggest winner in the next few years, closely followed by what you mentioned and a few other sectors.
good luck
#139 TheTruth
The variable you have forgotten to account for is “affordabilty” or lack thereof. A “bubble” is not so much of supply and demand in THAT particular bubble market as it is the feeder markets which eventually can no longer sustain.
Immigrants won’t be buying homes on the paultry after tax disposable income they, as all middle class Canadians, face being left with in years to come as our government struggles with the unmanageable debt left long after the stimulus party is over and the bills must then be paid.
Supply and demand… if the disposable money supply dries up so too will demand and prices will fall. Increasing immigration might only moderately cushion the snap back to equalibrium.
A shame to be fretting over whether to shut the barn door once the horse has bolted. A better question might be, what possibilities still exist for the property in question?
thanks ronaldo for the info. on peak canadian interest rates, and your insightful personal historical tale.
it is absolutely amazing to me that people were rushing to the bank in order to lock in at 20+% in 1981!
oh, how quickly so many souls forget!
hopefully read more from you concerning future garth posts.
cheers and thanks.
Well said, #91. If the statement you quoted had been made about any other category of person, it would have been recognized and widely-rejected immediately for the discriminatory hatred it was.
Perhaps a renewed take on the helpful hostful reminders about abusive, obscene and disrespectful comment(er)s might remind that women are people too.