He was getting pissed at me. A very pregnant wife stood inches away straining to hear above the din, looking agitated. To his right, across the table from me, a line of people snaked off waiting for me to sign their books.
Fifteen minutes after I’d finished speaking to a packed hall of investors in the pricey gem of the Okanagan Valley, warning them of the fate that awaits their real estate, he was not a happy man. And in the time it took for him to raise his voice in protest, I heard all the tired, old arguments.
“The real estate guy said everybody’s moving here,” he protested. “Prices can’t go down when so many people are coming here from Ontario and Calgary. This is where everybody wants to be. And, man, how about the weather? It’s all snow back east.”
I thought for a minute I’d tell him it was 15 degrees and sunny when I got on the plane in Toronto and 4 degrees and raining as I piled into my rental car at Kelowna airport. But he had enough problems already.
So, tell me what you did, I asked.
And I got the story: the young couple had just bought the place they’ve been renting, and the landlord kindly applied the last year’s rent of $16,000 to the purchase price – plus they had another $34,000 in cash. Then they inked the sale. Price: $800,000.
Being my diplomatic self, I told them they were screwed, and would actually be better off walking away from their down payment than closing the deal. Buying at the absolute top of the market just 90 days or so from when mortgage rates are likely to rise and a monumental new sales tax hits; in a province now on the cusp of major government cutbacks with a moribund forestry industry; and in a town where the biggest industry is selling stuff to each other, was financial suicide.
He glared at me and stepped side. Wife looked apoplectic. The line shuffled ahead and erased his presence.
A few hours earlier another speaker at the conference I keynoted told the crowd what many people wanted to hear. “There is no real estate bubble,” he said. “Even in Vancouver.”
That would be irresponsible enough in front of 500 people, but the guy is also a business news commentator for Corus Radio, and fills BC airwaves daily with the same delusional message. In a city where the average SFH is within $50K of one million dollars, where the average family income trails both Calgary and Toronto, where 70% of household income goes just to pay for shelter and where real estate has been rated the most unaffordable, to say a bubble does not exist is to lie or be incompetent. Or perhaps both.
Actually at dinner the night before with a group he was part of, I may have learned the source of his conviction: He has a house for sale locally. Maybe after he sells the bubble will be gone?
Sadly, my weekend on the coast and in the valley shows that the madness of crowds infects the locals still. In fact, in the afterglow of the Olympics, it’s more like a collective disease. BCers are convinced the event showcased their region so compellingly that at this very moment tens of thousands of frozen, grimy refugees from Mississauga are making their way west, willing to pay anything for a few yards of the Vancouver magic.
How do you break it to them that in order to pay $950,000 for a humdrum house in need of a reno in a city without a subway, you need to sell for an equal amount? Or that rising rates, higher taxes and a tepid economy are going to nail house values everywhere? Or that Toronto actually didn’t have snow this year? Or the economy of a city with 6 million people probably has more opportunity than one a fraction of the size? Or than anyone, anywhere, who pays a million for a house worth $450,000 is an idiot?
But, there’s no point. Some things some people must learn over and again.
BC’s become a dangerous place. Surprised I got out alive.
As I packed up my gear and prepared to leave the hall, he came back. The guy who made his landlord a happy man.
“I’ll take a book,” he muttered.
Be careful, said I. Your family needs you to be wise.
164 comments ↓
Canadian banks declare war Desperate for debtors while public backed mortgages are still available
The Trials Of Trying To Trade Your Vancouver Home For Profit
http://wp.me/pcq1o-AU
The recent anecdote from ‘badkitty’ at greaterfool.ca, with discussion.
The Olympics have brought a new delusion to Vancouver. The: “The Foreigners will keep buying, they’ll love it here.”
This, apparently, is based on remarks made by people that during the Olympics a lot of foreigners looked at condos (and one presumes houses) and this is taken as a sure sign that they all have nothing better to do but to move here.
I find this fascinating out of two reasons:
1. I occasionally look at condos too, with no interest in buying, I just see an “open house” and I am curious what one gets for $600K, though I am good, I don’t laugh too loud while still on the premises.
2. Even if these people left that day saying: “Gee, we really like it here, we should move here.” I wager that:
2.1. People who really want to move here first and foremost will look at the city again on another trip and then may realize that it’s not all the party all the time.
2.2. They will also look again at the cost of “owning” in this town and come to their sense.
2.3. People who would buy it as an investment will do the math and realize, just like myself, that you cannot buy and rent a condo out in this town and make a profit.
So I doubt very much that all this interest will really lead to any sales activity.
In that context it was interesting that the Real Estate Mafia here in Vancouver released their numbers about the sales throughout the month of February and to say the numbers were disappointing would not be an understatement, much more so in the 1Mil+ category where you would expect all those “rich foreigners” which, if you believe everybody, have nothing better to do than want to move here posthaste would buy.
Ah, fun times ahead in BC.
Meanwhile: I found out last week that I will not get a rent increase this year, I have no idea why, my management company is usually known to only give you rent increases as a guarantee, nothing else.
$800k! In KELOWNA! Where wages are traditionally lower than everywhere else due to the “sunshine tax” as they call it. Where you’re lucky to find a stable, well-paying job.
Dear Gawd…help us now.
http://agentwill.com/weekly-stats/
Garth, you rockstar you.
Check out the trajectory of the listings in couver.
Shocking.
BC’s become a dangerous place. Surprised I got out alive.
good for you Garth (good you told it like it is and good you got out alive)
Greetings: When the wife and I walked from the condo deal in Calgary, we had been pre-approved to pull over 200 thousand of equity from a paid for home. Every time Garth relates a story such as this one, I walk outside, look around, go to the workshop, and chant: “still ours, still ours, still ours”. I guess there really might be guardian angels eh!!!
It’s always raining in Vancouver. Why would anyone want to live there?
They bought an $800000 home with effectively $50000 down?
Screwed is putting it lightly.
He’s going to need a heavy dose of Ambien to sleep after reading your book.
I’ve never once heard someone say “I’m retiring, taking all my money, and moving to Kelowna!”
…in a province…Garth, you could add more problems to your list regarding BC: high taxes, high fuel prices, pst, and green initiatives ready to stop good old capitalistic green back investments…and the weather is too freaking hot in the summer and plain cloudy and miserable in the summer…BC is not Canadian Hawaii. The young couple should walk away from the house and drive out of the province.
sorry…cloudy and miserable in the winter.
BC stands for Bring Cash!
“The real estate guy said everybody’s moving here,” he protested. “Prices can’t go down when so many people are coming here from Ontario and Calgary. This is where everybody wants to be. ”
For the life of me I can’t understand why people think this is the land of paradise. Why is everyone moving there?. What kind of employment is there, wine yards, tourism, OK. for 2 months of the year. I’ve been there in the summer, hot as hell and just as dry, thus fires.
Have friends who own condos on the lake, open them up in May, then close them down in Sept. Knew a family that owned a campsite there. Very busy in the summer and nothing after 2 months. They also were semi retired. Sold out and came back to AB., they had enough with the tourists. Also knew of a retired family that use to live there and they would leave their house in July and August just to get away from the tourists. Now if your in the medical department, like 2 of my cousins, then you will be just fine. They are doing quite well off the old codgers. So ya! if your retired and rich, have at it, if your making a living off the old boys and girls, good for you, but if your just a joe 6 pack, then good luck and buy a lottery ticket.
BTW! Garth finished your book. Very good information for noobs and some for seasoned investors. I stuck it on the shelf beside The Great Crash John K. Galbraith and The Intelligent Investor, Benjamin Graham. Yes this is a honor. lol.
Last year in Langley, said Corus Radio financial go to guy, was yaking about economic rays of sunshine. Corus Radio has never met a bubble they did not like. They are the official voice of Boobus Canadianus
The 10 year fixed rate is 5.2% which I think is note worthy.
Also, Metro Morning show on CBC Radio 1 is going to pump real estate north of the 401 starting tomorrow.
“Matt Galloway spoke with the CBC’s Mary Wiens about her new series, Safe Haven: Iranians and Toronto’s Real Estate Market, which begins Monday on Metro Morning.”
jess: #159, 161 (12-03-10)
Good references – I’d seen the Simmons one before. I expect that the same will happen to Asp Enterprises (aka Canwest LP) if an equity firm wins the bag.
I once said ‘screw Alberta, I’m heading to BC…’
I moved to the town of Smither’s where I paid DOUBLE for public auto insurance, and the cheapest house listed (140 000) was literally leaning over, paint peeling, and built on a railroad tie foundation.
I was told (time and again) that the people from, get this, THE NETHERLANDS, were buying up all the property, that people were going to be AIR-COMMUTING from Vancouver, and that I’d ‘better buy now, because prices were going way up!!!’
Like, c’mon. The Netherlands(???!!!)
People really are crazy. And, on that note:
http://money.cnn.com/2010/03/13/news/economy/fed_bubbles/index.htm
Howdy
We live in BC, and we are so grateful to be renting, after reading you Garth for more than this last year. We have not spent a moment jonesing to be buying since …. though we certainly used to….. Nelson is no doubt a bit of a bubble too, we have turned people on to your Blog, it is rather funny to see who is listening and who is not….
Thanks so much
Free in BC
Things to keep in mind when purchasing real estate:
ratio of median income to median home prices
the cost of ownership versus renting
value of the national housing stock as a percentage of gross domestic product.
Garth, due to BC being the only province with legislation recall, the new HST is not a foregone conclusion… For those registered BC voters who are sick of having Gordo stick it to them, here’s a site they should visit…
http://fighthst.com/
VI Funcanuck here.
Have said it before and can’t resist, prices go up, they come down. Wife & I popped into an open house today that just had a price reduction. It was “ok”–no view, busy street, kinda dated in some ways though well maintained. Too much money asked for though.
In the next few years the price for this “ok” house will buy an absolutely GORGEOUS (and newer) house, w/ a greater view, nicer area, better yard…..
Naysayers may call us “vultures”-though if no one bought, prices would fall even lower. Am in it for the long run and don’t mind waiting until it’s a “buyer’s market.”
The house is paid for this July–all mine, no interest, nicely updated too thank you.
I also don’t mind interest rates going higher. Too many people got money and put us in too many bidding wars when we bought 7.5 years ago.
Aaahhhh….life is good. Next plan is to hire a good, objective (at least as objective as can be) financial planner and get a long-term plan for freedom 60 or 65.
Man how many times does that bait trick work? I’ll throw this in if you buy, dummy, you already paid for it. Nothing is free ever. So you paid 800 grand to save 16 grand. Now you’re going to get whizzed for 34 grand in cash, plus.
You had better pray Garth and others are wrong.
5 year fixed at 4% 35 year is going to cost you $3306 a month. (assuming 750 grand mortgage)
You were paying $80,000 in rent for that period.
You are now paying $198,360 to the bank, plus property taxes, plus maintenance.
What are interest rates going to be in 5 years?
Walk, 34 is a cheap lesson.
But hey you can always throw more money after bad.
Hey Garth, that Corus guy you are talking about lives in White Rock where a new condo complex just went up called Morgan Crossing. Its two large condo buildings separated by a parking lot with a power line running thru it and the freeway to the border on the other side. I think we must be delusional in BC.
Well if the guy has any brains he’ll heed your advice and walk away, any you’ll have saved another young couples financial future, probably thier marrage, definately the kids college fund.
Well done Garth, you rock. Keep up the good work.
Garth Turner – “Saving Souls from themselves, one town at a time” lol
“The real estate guy said everybody’s moving here,” he protested. “Prices can’t go down when so many people are coming here from Ontario and Calgary. This is where everybody wants to be. And, man, how about the weather? It’s all snow back east.”
———————————————————
A friend of mine moved to Florida 10 years ago after snagging a nice job. Around 4 years ago during a phone conversation he talked the whole time about Real Estate. About how his house had skyrocketed in value. He talked about how years down the road he would retire and by than his house would be worth a small fortune and how that would be his retirement ticket. He gave me the exact same argument as above. He said how Florida was the fastest growing State, how people from the North were flocking there to retire and how people from around the world were snapping up vacation condos.
…………than, the bubble burst as they ALWAYS do. Even in mighty Florida, truly the State where people are moving in droves. This still did not stop the inevitable from happening. Now in hindsight he realizes how delusional the whole thing was.
One day when people look back at this Canadian Bubble, they will realize just how delusional it also was.
Blink and you’ll miss it:
The key piece of information here is “. . . last year’s rent of 16000″. Those fools were paying 2 percent (!) of the purchase price to rent the home.
Even if they manage to carry an average of a 4.3 percent mortgage rate over the lifetime of their 750000$ mortgage (which ain’t gonna happen) they will pay more to “rent the debt” (i.e., interest) than they paid to rent the place.
And I suppose, all in the vain hope of realizing capital gain . . . despite the historical average in BC being an inflation-adjusted approximate 2 percent “return” per year on the “investment” of home ownership. And that’s before paying property tax, upkeep etc.
Ah, ‘almost forgot . . . but it’s “a new era” and “it’s different this time . . . ” LOL
Garth,
Don’t bother with B.C. We are too far gone at this point to try and convince anyone here. The collective insanity is simply too great right now. Just sit back and watch the fireworks – and weep for the poor souls who didn’t see it coming.
I believe far more than rock bottom interest rates, the CMHC has been the largest factor in the Canadian housing bubble. I have posted before the article link below that spells out how the Conservatives have used the CMHC as their weapon of choice to try to goose the economy. Does anyone for a minute believe that banks would be handing out the size of mortgages that they are currently handing out if the risk was all theirs and not 100% the Tax payers of Canada thanks to the CMHC? No bloody way!!! How many Canadians could even realistically come up with the required down payments?
Why is Flaherty changing the CMHC qualification rules and making them more strict? Is it because he wants to slow down the housing sector or bring some sanity back to the market? I doubt it. I don’t think he cares. I think it is all about the fact that he has no choice. If you check the CMHC website, they state how the Canadian government has currently insured 480 Billion dollars worth of mortgages. They do not give any details or any dates as to when this occurred so the number could be significantly higher.
I believe that Flaherty has no choice but to start turning the CMHC taps off before he has to shut them off completely. The Canadian government is already on dangerous ground by insuring probably by now over HALF A TRILLION dollars worth of mortgages. That’s almost half of our entire GDP. The majority being in the last few years. How much more risk can the CMHC take on? My guess is they are getting close to the point where they cannot. What would happen if the government came out and said we can no longer insure any more mortgages? The bottom would fall out. I can assure you that if banks all of a sudden had to be responsible for 100% of their mortgage loans, you can kiss the high Real Estate prices goodbye, regardless of near 0% interest rates.
http://www.rabble.ca/news/2009/10/canadas-sub-prime-mortgage-time-bomb
Well Garth, you are in a rough business. You are giving away advice, (except for book sales but at least you keep the price reasonable and go straight to paperback), and people view things to be worth what they paid for them.
Unless somebody is willing to pay you for your advice they don’t really want it. And if they don’t like the advice they react as if you’d just cut the cheese.
Heck, I am even leaving the minor coaching business. Mostly because I am finally going back to work full time, but partly because the fact is the kids are getting to the age where they really don’t want to be told anything, and neither do their parents. (Actually their parents never did.) They don’t care that their decisions may have an impact on the success of the whole team. But they will continue to learn, that’s the great thing about sports is that most sports teach themselves. The final score judges the collaborative effort of the players every game, and again through the season.
Life is like that too. Which may be why we love sports so much. I mean, who really cares if Team Canada won the gold? Whose life did it change? But everyone was glued to the TV for that game. I was as enthralled as anyone! My only complaint being why didn’t Iggy’s assist draw more attention from the coverage? (He and Crosby both worked that play text book and both deserved credit. He earned the “A” on his jersey if you ask me. Crosby couldn’t even remember how the goal happened after the game, whereas I bet if the asked Iggy he would have been able to describe step by step how they were cycling in the corner, Crosby put it for Iggy and went for the net, and the defense attacked Iggy leaving Crosby open so Iggy fed him the puck.)
Some day soon I imagine that the government will not be able to continue to “make everyone win” and also see the need to re-establish the power of the referee to call a fair game. When that time comes, people who traded $16,000/year in rent for an $800,000 debt will come to their own understanding of the game, without the need of an advisor.
People learn from their mistakes, and pretty much from no other method. One in a hundred can actually learn from the mistakes of others, and back to the sport example, all the text books in the world cannot make a good hockey player. They have to play, and hours played is directly proportional to skill, until you get to a very high level and then fortune (luck of the draw genetics, parent’s ability to sustain that level of commitment, etc.) starts to play a role.
Is that an Emu or an Ostrich….??
From “How to Invest” (March 12th): “Here, we see real estate as (a) a social statement about our inherent worth, (b) a retirement plan, (c) something to lord over your relatives, (d) a ready pool of accessible capital, (e) a perpetual money machine and (f) a place to put the kids at night.”
Perhaps I’m overly romantic, but I still think of it as a home. I know it’s an illusion, but I like the idea of something stable that, amidst the perpetual flux of life, provides a relatively fixed reference point for multiple generations of a family.
Write it out 50 times…
A house is an expense, not an investment.
A house is an expense, not an investment.
Then write this out 50 times.
Only a fool believes his house will pay him to live in it.
Only a fool believes his house will pay him to live in it.
Then this 50 times
When houses make more than their owners do, that is a bubble.
When houses make more than their owners do, that is a bubble.
“…but the guy is also a business news commentator for Corus Radio, and fills BC airwaves daily with the same delusional message.”
Interesting. But then again, not really.
Ozzie Jurock? Bill Good? Michael Campbell? Michael Levy?
So did the “landlord” take the mortgage back?
“How do you break it to them that in order to pay $950,000 for a humdrum house in need of a reno in a city without a subway…”
There IS a subway. It’s the Cambie St. corridor for the new Canada Line which goes out to YVR from Downtown.
Everywhere else, it is an above-ground eyesore.
Did I mention it runs through a rich neighbourhood? Underground? Not above ground like everywhere else?
You can’t really see it and have your property values be affected? Like everyone else?
Silly!
#10 T.O. Bubble Boy – That used to happen quite regularly (a couple of decades ago). Same with Victoria, Arizona, Florida, and even California ‘way back when. There was a reason for it.
Unfortunately, those reasons have mostly disappeared or gone negative. That’s primarily because of overpopulation and collective financial chicanery.
#145 Kagnovich (previous thread),
Thanks. You are correct – typo. Busy day and didn’t spell check properly.
Many thanks.
I’m an agent, just signed a deal to sell a revenue property at 16 times net! The seller now wants to pull out of the deal because he thinks he can get more money if he holds onto it for a couple more months. He figures it will go up about 10% by June, so he can make an extra 125k….
He seriously called a lawyer to break the deal. Yes, it’s retarded here in Montreal too!
#154 TheTruth (previous post),
Good push back. Really insightful commentary.
Still got nothing, eh?
I stopped by an open house on my street in Burnaby BC today. $570K for a dumpy house built in 1945 on a corner lot to a busy street. The R/E agent thinks it will likely sell for more. There were so many people there I could barely get in the door and there were cars lined up on either side of the street for a block; a traffic jam of real estate buyers. What insanity.
#151 Taxpayer Like Everyone Else,
Thanks for posting the stats. Clearly I am not arguing that Toronto and Vancouver do not have high immigration populations. No doubt they do.
I am simply trying to point out how ridiculous this Bull argument is that the character of the immigrants in Vancouver or Toronto differ from other cities with similar demographics AND they are not a factor in why our house prices will continue to increase.
It is not different here.
How much would you pay for this apartment?
http://www.realtor.ca/PropertyDetails.aspx?vd=&SearchURL=%3fMode%3d0%26Page%3d1%26vs%3dResidential%26ret%3d300%26Page%3dpropertySearch.aspx%26sts%3d0-0%26beds%3d0-0%26baths%3d0-0%26ci%3dburnaby%26pro%3d3%26st%3d6128%2bpatterson%26mp%3d0-0-0%26mrt%3d0-0-4%26trt%3d2%26of%3d1%26ps%3d50%26o%3dA&Mode=0&PropertyID=9206215
“. . . There is no real estate bubble . . . everybody’s moving here . . . Price: $800,000 . . . they were screwed . . .”
#1 squidly77 — Good link. If the banks are doing their own “pumping and dumping” with free cash, could be C-F-H have ordered them to start luring as many fish to the debt line, as they know that the shit is tumbling and gaining momentum.
They want to turn as many sheeple into debtors / serfs ASAP. This is becoming a remarkably silly world, infested by incredibly brain dead sheeples.
A common theme between crooks, politicos and liars — they are simply trying to make a fast buck as quickly as possible and, as someone once said “There’s a sucker born every minute.”
The Okanagan certainly has more than its’ fair share. After a few months of realizing there’s nothing but lovely scenery, dumbass drivers and McJobs with a new CIBC banking centre being built, they’re leaving in droves and heading off to new, greener pastures.
Unemployment is up (quirky), hydro and water is going up and running out. “. . . how about the weather . . .” — Generally it is called The Sunshine Tax and when combined with the HST, it will be a double-whammy for suckers with large mortgages and dim job prospects. But that is their freedom of choice, I guess.
——
Not just us — the honey has been spread all over!
Reason why fuel prices will soon soar; has to start somewhere else first.
What can govts. tax next? Other than sex, Oklahoma gives a good idea.
Canada is a corporation, a myth which doesn’t exist!
Last sentence is quite revealing.
Interesting. See following text, and please excuse the language:
“. . . buy every pre-paid cellphone in the store. Clerk/airman gets to thinking about it. Goes to Cotter and reports incident. Cotter asks store for surveillance video. It’s scary enough that he contacts Fresno FBI.
“FBI investigates, determines these women have been doing this all over the Valley. Cell phones shipped through Canada to Iraq/Afghanistan where they become triggers for roadside bombs.”
Love the blog and the comments. I live in Vancouver and also go to open houses. I want to at least meet the people who’s mortgages I’m co-signing through the CMHC.
Going by the greater fool principle, Vancouver may have the dumbest people on earth. Ironically America bashing is a traditional pastime here. Subprime this, reckless lending that. Americans only went up to 3.5 price to income and they didnt have a devastating bubble collapse just next door to ponder as they got into bidding wars.
Unless you’re drunk, Vancouver is an ugly city 330 days of the year when its so grey you could be in Grozny. The employment situation is deteriorating as well.
People have completely lost their minds here. I am trying to move out before the herd turns ravenous and starts feeding on human flesh.
Remember, those of us in the blogosphere don’t read daily newspapers. Or have cable TV. Or watch TV at all, often. Or listen to radio, least of all AM radio.
We’re somewhat computer literate. Any news we get comes of the Internet. The PC has the ability to synthesize all the noise into a readable few blobs of pertinent, useful information.
Perhaps we get the big picture online. I’d like to think that knowing what goes on in Dubai, in the bond market, with gold prices, with Taiwan’s real estate and with China’s resource imports means we have a more comprehensive picture.
Kelowna? Corus radio? CBC and CTV? Financial professionals? Real estate agents? Selling stuff to one another?
They might as well just close their eyes.
#3 Michael
Yep the Asians are coming, the Asians are coming.
I have asked a number of realtors in Victoria how many homes they have actually sold to people from Asia over the last year. The answer is always 0 to 1.
It is just a myth.
Even if the Asians are coming I am sure they are smart enough to check out LA, SF and San Diego
Garth,
it won’t be the grimy refugees from Missasagua or the snotty people from Toronto, it will be the Chinese. Out of 1 billion people, even if 1 percent are wealthy and a fraction of those people buy houses in Vancouver, what will that do to real estate? They won’t be moving to the Praries or to a dying province, like Ontario, who needs the govt to bail out and prop up a unsustainable, dying Auto industry and who’s fate is becoming further sealed with each rise in the Canadian dollar. (Because the govt subsidizes industries and businesses that are doing such a mediocre job, they need a false economy like a lower dollar to compete.
If I got my numbers correct.
The couple above will be taking a 750000 mortgage. In this day and age I am guessing 35 years. Maybe they are an high octane couple and have lots of money somewhere and will pay it off sooner, I don’t know
I ran it through a credit union mortgage calculator
They will be paying 630,883.56 in interest over 35 years on that mortgage.
16,000 of rent * 35 years (o.k., I didn’t count inflation) is 560,000. They are not loosing much more than renting. It will all go towards interest anyways because of the big amount of the house they are purchasing.
Another caviet. The calculator required I enter a property tax. I put it at 1 dollar per year as this does not factor into what I am trying to calculate
Not only does Vancouver not have a subway, but it has the worst transit infrastructure of any major city in Canada. In their infinite wisdom, the planners wanted to make downtown safe at night and more liveable so they started building condos. Now it has become more profitable to build condos that to build commercial real estate. Many companies move to the burbs because of the cost, so everyone wants to live downtown, but many now have to drive out to a suburb to work! Ass backwards. The transit system is not set up that way and it is only getting worse. It takes half hour just to drive through the city, at any time of the day because the highway doesn’t go through town and these dipsticks don’t synchronize traffic lights
#2 VREAA – BADKITTY is FAKEKITTY
Badkitty say she lost $300K equity by selling in Nov 08 – prices in Vancouver in Nov 08 were only down 10% versus now.
So is she saying her house was worth $3 million? (10% of $3 million is $300K)
She also goes to great length to say the bears made her do it (sell her house that is).
Seriously anyone with a $3 million house should be too smart to take life changing advice from a free blog.
Hey BADKITTY – if you’re out there show us the numbers.
#10 TO Bubble Boy – “I’ve never once heard someone say “I’m retiring, taking all my money, and moving to Kelowna!””
I have……..
Family friends in Regina retired, sold everything, and moved to Kelowna.
One year later they moved back to Regina because they missed family and friends.
Go figure – they found friends a family were more important than milder winters.
“The real estate guy said everybody’s moving here”
I live north of Kelowna and often hear the same claim. The term “everybody” actually means wealthy retired people from Alberta. And even they have stopped coming.
One final comment I forgot
If I got it right, 750,000 over 35 years 4% (reasonable numbers I think)
By year 10 they will pay around 272,326.37 interest according to the mortgage calclator
If my math is correct that means there asset will need to increase 36 percent at 10 years to recover the interest you have paid (not including relator fees etc etc) Now you are laughing at me and saying it increase 20 just in the last year but 3.6 percent per year over 10 years seems like a possibility
You bet the big marbles you win the big marbles or you loose the big marbles
The Okanagan is one of the most over rated places in Canada. Nice place to visit in the summer, but that is about it.
I can see the temptation to purchase RE at low prices but at the peak!
Garth, it must be getting boring dealing with these people even with your book in play.
It’s not just Corus.
In Saskatoon, the boosters on the local talk radio station have not met a product or service they couldn’t sell.
Whether it’s the latest has been music group on a filthy lucre tour or the local real estate or mortgage broker.
You can tell this radio station needs the money because they routinely have extended musical interludes where commercials would normally go and they are always advertising for sales help.
It would be sickening to listen to if my bullshitometer didn’t work.
—————
On a separate note, I watched a 60 Minutes report tonight on the sub-prime crisis in the States that completely white washed the whole thing.
It was classic Warren Commission.
The subject of the interview said ‘Wall Street bad’.
But then said they didn’t know anything about how it could have happened.
Back then, any blog dog could have found out what was going on.
And so I have a question:
How do we short sell this bubble to make our money?
I don’t need millions like the guy who said he made $728 million in 2007.
Just a little bit to make life easier.
He mentioned that he got on the credit default swaps bandwagon before anybody else did.
For Jody, in regard to yesterday’s comment:
I have two retired “sounding boards” here in Calgary. One is retired lawyer and oil & gas executive and the other is a retired serial entrepreneur and financier. Both are very well-connected and lived the past up and downs of the 70s and 80s. Both are very thoughtful, have carried enormous financial and emotional burdens, and do not make brash, unsubstantiated comments. Everything from them is from first-hand experience and it is heart-felt.
The resounding comment from both is that the behaviour is identical. The difference is in the amplification of the absolute dollar values and in the inflation numbers. There is a distinct difference to the degree in which “things” are marketed, compared to three decades ago.
So, from their perspective, the past few years – including run-up to macro-bust – is a carbon-copy from a behaviour standpoint.
“I remember when people bought a new home in the early 80s. It was crazy. We were in the middle of a total meltdown and people were justifying their purchase through an effort of sheer denial. ‘My job is safe. It’ll never happen to me.’ Just as their company was downsizing. Pure denial. Of course, within a few months, they – and their house – were toast.”
“People are under great stress. I can see it in their eyes. I had a number of friends who committed suicide in the 80s. Trust me, you don’t ever want to see people hit that point.”
Back to 2010. One friend is a young family lawyer. She laughs the uneasy laugh of a long waiting list for her services. “The rate at which people are separating and getting divorced is crazy. I have MONTHS of backlog. And you know what issues are cited for just about EVERY SINGLE breakup? Money. And Real Estate. It’s brutal. These aren’t life partners separating. They’re business partners. And poor ones at that… because more and more, we’re not talking about splitting assets, but splitting debt.”
I relay the recent anecdotes back to the old guard and they just shrug their shoulders. “Yep. But nobody wants to listen to us. They think their actions are unique, but in fact, they are just a carbon-copy of the past.”
So, yeah, I’d argue that human nature hasn’t changed in 30 years. Why would it? It’s a naive thought. People now just respond proportionally to the times. Some will barely make it. Some will prosper significantly. Others will totally blow up. Is it different this time? Well, that depends on the specific case.
Others’ mileage may vary.
Just about anyone would kill to have an honest, decent and fair job earning $57,000 per year, wouldn’t they?
Now how about having that salary and now add to it the option of living anywhere you wanted, and earning that kind of money without being respondsible for anything, or without even having to show up for work at all? How about having this job guaranteed for decades?
Easy to accomplish – just don’t buy that house.
That’s how I see the cost of paying back this $800,000 house value at 5% . Earning $28/hr or 20$/hr after the 30% BC marginal tax rate. Working the normal 2000 hours per year is a nice tidy annual sum of $ 40,000 or 5% of the 800k capital.
Over-simplification, maybe.
Overly-conservative assumptions, probably not.
Overshelmingly a bad deal for big money house buyers, no question.
I would bet dollars to donuts that people who can most afford to buy that $800k house would be least likely to buy it.
I feel badly for the guy and I hope that he’s able to get out of it by walking away from the $34K, but I wonder if either way it might end up costing him the marriage (hopefully not right away, baby coming soon and-all).
Sounds like he’s probably going through what I and many buddies here in BC have encountered with our sig other: feeling pressure to do whatever it takes to secure the ideal nest, soon after having shelled out for the perfect wedding (including the unique > 1.0 ct Canadian non-blood diamond ring).
This pressure, while ostensibly coming from said sig other, is of course derived from the expectations imposed upon all of us by advertising, marketing, consumerism, and the idea that we need to do things just like our parents did, so we can raise our kids the way we were raised, so we can be just like the happy young couple on the CIBC ad hugging in the foyer of their new dream home, getting ready to “christen” every room. RE agents, mortgage brokers, bankers and politicians are all part of the propaganda machine perpetuating this spin.
GT says to look around, see what others are doing & do the opposite. So why do you think all those others are doing the opposite of what a sensible, rational objective person like you would do – it’s b/c of the truly awesome power and influence of the advertisement, marketing & MSM machine that pervades our daily life. I’m not saying kill your TV and go live on a commune, just try to think critically. Be a healthy skeptic, neither a gullible spineless twit, nor an anxious paranoid sourpuss.
Boys, as the great Barney Gumble would say, “Fight the Power!” Don’t cave in. Do a rent vs own cash flow spreadsheet and factor in nice lifestyle perks on the rent side (Coach purses, Chanel sunglasses, etc…) Offer to go on nice trips a couple of times / year. Just b/c you committed to marriage doesn’t mean that you have to commit to 30+ years of hard labour for the bank. Your life outside of work & family may become non-existent and you will regret that. If she can’t handle prudent watchful waiting on the house gig, at this of all times in history, then maybe the whole “us” thing just wasn’t meant to be anyway.
Surprising how quickly BC, AB, SK sales/list ratios are shifting (..i don’t follow Eastern).
Looks like we’re fairly synchronized with US, UK`s double-dip this time..
http://www.telegraph.co.uk/finance/economics/houseprices/7442568/House-prices-on-verge-of-double-dip.html
This couple really should not be mad Garth. The couple were gulled by a low level charlatan and had they informed themselves from the myriad of posts on this blog, this unfortunate situation could have been avoided.
The numbers are quite easy to run and simple to apprehend. Ownership will cost this couple about four times their monthly rental to live exactly in the same place. With a young family down the road and living in a shaky job market, they should be running in the opposite direction.
35 years of financial indentured servitude to some corporate suits on the 40th floor of some office tower sounds very unappealing.
#3 Michael “So I doubt very much that all this interest will really lead to any sales activity.”
Come now, didn’t you hear? Sky’s the limit for Vancouver now. We’re going to bid on summer Olympics and the FIFA World Cup. Every major sporting event is going to be showcased in Vancouver from now on. We are the epicentre of the universe!
Seriously, though, being a person that actually lives here, the weather is great, the scenery is great, the people are rude for the most part, car insurance is a scam, fuel is 20 cents more expensive than the rest of the country, and the 40-minute SkyTrain ride to work every day, staring at the mountains but never actually getting to explore them because you have to work 6, 7 days a week to make ends meet is a cruel joke. And it’s not just that the houses are overpriced, it’s that they’re pretty much made of cardboard and really poorly constructed. Try moving from Ontario brick and siding to BC wood and stucco — “You want me to pay how much for that POS?” Ever tried to sleep in a wooden multi-story condo building? Hope you like earplugs!
im single, male, professional, living in the middle of Toronto. My house has increased in value $300k (according to agents) in the past 5 years. My home consulting business has not seen the success in the past 18 months that it did from 2000-2008. So, I’ve approached bigger consulting firms in the USA who would be interested in my expertise. Relocation would require me to move to one of boston, nyc, or san diego.
I have communicated to the US firms that it is a perfect storm for me to leave Ontario, with a new tax in July, the dollar at parity, and i can sell my house for a bundle. I can drop my canadian based business and immerse myself into a US economy that seems to be continuing to grow and need someone like myself.
I want out of this market and watch the carnage coming in Q3 onward. My only concern about moving south is, could Palin really win a presidency?
The business news commentator for Corus Radio that you are talking about is Mike Levy, who is also an unabashed shill for the big banks. I cornered him on the Bill Good Show (CKNW in Vancouver) when the ABCP collapse happened and he blatantly lied on the radio about the banks not knowing anything about it (and Bill cut me off before I could have a rebuttal). They’re both snakes in the grass (along with the BC Premier’s brother Michael Campbell) who would sell their grandmother (or any other family member) to make a buck. One thing I have to say though, is they can sure make their lies sound good on radio.
Wow, if I was there I would have giving you a standing ovation Garth!
Strange complement but… You are not a sheep, but a true sheep herder!
Mike
10 T.O. Bubble Boy “I’m retiring, taking all my money, and moving to Kelowna!”
Myself, I do love Kelowna and yes, I have said the above statement myself when we left Kelowna for Calgary in 2000. But on a side note I absolutely hate Vancouver weather and how dirty and “American feeling” the city is (rich/poor), thus I would never live there.
BUT, Kelowna is a much different place in 2010 than it was in the 90′s and thus so is Calgary. Both places have suffered “money lust” and lost community because of it.
Kelowna is great in the spring, summer and fall. Sucks in the winter, unless you love grey days with no sun and it still gets down to -15oC. Jobs are bloody hard to find and if you do get one they pay peanuts to what they should be paying (Sunshine Tax).
Greed may make people “feel rich” but it sure has huge negative side effects in community, personality and morals.
I still love the Okanagan, but it’s not the same community friendly place anymore as much as Calgary isn’t the “Big city with the small town feel”.
Real shame all that.
Mike
Is it just me or do I see loads na loads of for sale signs across the BC lower mainland??
A good read for my fellow shutins.
The Great Economic Debate Canada Needs and Is Failing to Conduct
http://www.jameslaxer.com/blog.html
Head definately in the sand. $800K for shackles? Hope baby likes turnip.
Or how about this diddy…
Pants on the ground, pants on the ground, looking like a fool with your pants on the ground.
Royal Bank of India is looking at a rate hike to curb consumer price inflation.
9.9%?
That will get rid of a few useless eaters won’t it?
Another thing about BC that is utterly, financially bizarre, to turn a phrase I guess, is that the largest sector of the BC economy is underground, all cash, and illegal.
Talk about an ongoing “look the other way,” festival…
Free the weed? BC would collapse!
Could it be that this landlord was using one of Garth’s techniques in Money Road? Sell with a high downpayment and long closing. He may have just made a cool $34k tax free for no work at all.
“”"grimy refugees from Mississauga are making their way west, willing to pay anything for a few yards of the Vancouver magic.”"
…They should be so lucky.
“” in a city without a subway,”"”
…lol
“”Or that Toronto… a city with 6 million people probably has more opportunity than one a fraction of the size?”"”
…more opportunity for strife, ghettos, racism, public strikes…
Garth, So why did you ever move away from Toronto?
Nostradamus jr.
I don’t know Kelowna well but it seems that 800k there goes a long way. I had a look on MLS and found some beautiful houses in that price range. I also saw some very nice houses for 500-600k. I think that the first time buyers with the small down payment should have looked in that price range. A 750k + and a pregnant wife (which leads to 1k a month in daycare if she returns to work) would scare the hell out of me.
Renting a place that is 800k for 16k a year was a pretty good deal. They should have stuck with that.
#29 Jason,
You are absolutely correct. The abuse of the CMHC by the Tories will be the Canadian version of Sub Prime scandal. I was mentioning this yesterday. It was one thing to drop the interest rates and follow the US. However the expansion of the CMHC rules really created the bubble and will create a huge tax loss for Canadians in 2011, 2012 and beyond.
Meanwhile he and H will be trying to gain a majority on the platform they have properly managed the economy. Makes me ill.
A mind boggling array of real time information on the state of the US economy…
http://www.usdebtclock.org/
#31…emu…they have the feather covered heads…and they might even be dumber than ostriches…which says a lot…
Good try Garth … when it comes to a “Heinz Pickle you can not tell them nothing”
The word here in Halifax/Dartmouth is things are slowing down in anticipation to all the above mentioned new improved Harper/Flaherty fees ….. Just who do y’all think is going to pay for Harper’s $150 Billion plus spending spree? The lights are on and many people are starting to ponder the thought. Housing here will move in tradional ways much the same.
#66 Disgusted in BC,
Levy is like all the talent on the Corus radio shows – he does what he is told. They just follow the money. The money comes from the Banksters and the Re mafia so that is how he slants his coverage. Did I say slants? Slant would imply he covers two sides of an argument but favour one. I should say that is all he covers.
It is not news or issue coverage. It is just pablum for the masses. The only good news is the masses are shrinking as fewer and fewer people listen to his brand of talk radio.
The Crazies are out in full force today.
…Renters and 2008 Sellers can smell the Ostrich steaks cooking on the spit.
1/
Hongcouver Proper (900K population) is the only spot of interest to Asians…I’ve mentioned this countless times…They have no desire for Vancouver Island, the BC Interior…nor do they have any desire for Dufferin County.
2/
Feb R E lag in Vancouver….uhmmmm, I believe the Olympics may have been taking place.
3/
Yup, lets see interest rates rise Garth, as you predict…lets see what it does to TO, the most interest rate sensitive locale in all of Canada….with 6 million citizens?….a Loonie effective now at US Par and everyone there reliant on an export driven manufacturing economy.
…The crazies are out in full force today…lol
Nostradamus jr.
#69 Peter,
Listings are surging in the Vancouver era. They have risen from 8,000 to over 13,000 over the past few months.
It is typical for listings to rise over this period into the Spring. We can also presume that some of the rise this year is related to the April 19 rule change.
The key number (I am told) is 20,000 listings. If we cross this number we will see the price shift happen that could end the bubble. More likely they will surge and then there will be delistings for those that don’t sell. Then a long, hot summer of flat followed by price declines accelerating through the fall.
Too early to tell.
#43 VanCity Boy
Depends on whether you’re a BC Tel employee working in the Boot or not. (kitchen staff need not apply). Considering present-day living costs, metro craziness, and low compensation in Rain City, $125 K would be tops.
I wonder who “the real estate guy” was and what will happen if this guy ever sees him again, say two years from now, walking back to his beemer in a quiet parking lot after a few late night pints.
ran a news google on “Canadian Housing” for the period of Mar 2008, it seems that the media had a clearer picture than now.
http://news.google.ca/archivesearch?q=canadian+housing+market&scoring=a&hl=en&ned=ca&sa=N&sugg=d&as_ldate=2008/03&as_hdate=2008/03&lnav=hist2
Just missed posting to the previous blog posting abut tuscon az. Just thought I’d share a few comments about my recent trip to Pheonix.
Firstly, I’ve been seeing all these incredible homes priced super cheap and wondering if in fact you can actually get these homes for these prices or is it some sort of bait and switch. Well yeah there are some very cheaply listed but just like here they do like to play those games of listing very low and hoping for multiple offers but generally they are listed at what there estimated values are.
There does seem to be quite a few multiple offers right now though. Lost out on two offers so far due to multiple offers. Actually the 2nd I think the bank was not even interested in highest offer and took the first offer and I came in a little late.
But I can tell you there are Canadians done there now shopping. Bumped into a family looking at foreclosures and someone just coming down to live 6 months after just purchasing. Both from Alberta and Manitoba.
About the dessert heat and lack of water. I tell you there was no lack of water while I was there. Of course this is there rainy season which I’ve never been down there during this season but they have large farmlands growing crops and lots of palm trees and orange trees everywhere.
These new communities, many are all being built around golf courses everywhere which make for very nice retirement areas.
Right now you can get a newly built 2000 sq foot detached home for $80K while rent for these are about $900 per month and the cdn $$$ keeps going up and up. I can buy 4 of those homes for the price of a newly built townhouse or semi here. Makes no sense to me. Can’t really see the negatives here to justify that amount of discount.
And these are not totaled stripped out homes either. Only really came across one that was really bad there and it happened to be in a better area of town.
The great thing about re-runs is that they never got old. Vancouver is going to go boom and there will be carnage on the streets.
The two myths they live by are just insane:
1. Rich Asians are going to buy up every green patch in Vancouver: This is simply not true, sure you have some coming over but they do not and will never posses the power to move markets to the degree that people in VAN think.
2. People from Ontario are moving to VAN. Not true and it will never happen in a meaningful way. People in Ontario would be better off buying in the muskokas, or even in Florida and become snowbirds, their money will go much farther that way.
People, just wait until the next credit crisis hits and banks start to tighten loan restrictions. That will be the “fat lady singing” moment. cheap and easy credit is what is pushing the VAN market. Make no mistake, mortgage brokers are fudging the numbers on a daily basis to get people into these 950K bungalows.
The rate at which the VAN market is growing cannot be supported by local wage force fundamentals, yet the market keeps growing.
I have to admit that it seems like parts of BC are going off the rails on a crazy train. It feels wrong. I have a hard time believing things are going to blow up, but I sure wouldn’t want to be a first time buyer out there.
Of course the kid should walk away from his $34,000. Seriously, how much of that $34,000 would be lost in closing costs and CMHC insurance? Anyone? I am sure once all things are considered he would end up with a mortgage principal that is a lot more than $750,000. He will essentially be kissing the $34,000 goodbye even if he goes through with it. Turn and run man.
No surprise but an interesting update anyway:
“University of Leeds Professor Joyce Dargay and New York University Professor Dermot Gately have a new research paper suggesting that projections from the DOE, IEA, and OPEC are underestimating the challenges ahead for meeting world oil demand”
http://www.econbrowser.com/archives/2010/03/the_challenges.html
This clip is a must watch. It highlights just one example of how corrupt the US financial system has become. As the clip implies, a full investigation could even lead to a shake up in the Obama administration.
http://www.youtube.com/watch?v=cUQiA4LtkmQ
Did I read that right? $16k yearly rent but purchase price $800k? That’s a 50x multiple price to rent ratio!
I lived in Vancouver from 2001 – 2007 ad during that time it was thought that you were nuts if you didn’t own a house. Everyone it seemed had a story of someone making huge sums of money buying and selling RE. Buying a house was being granted a license to print money. No one thought for one second that house prices could drop. T’is the very foundation upon which bubbles are built.
Now I am in Ottawa and the same mentality exists here. Eighteen foot wide townhouses in the burbs have broken through the $300K barrier and price gains of $50 and $60K a year are the norm. Lots are getting smaller, streets are more narrow and condos downtown are fetching unheard of prices. This in the city famous for rolling up its downtown streets at 6 pm.
Good old St. John’s has one of the hottest real estate markets in the country. 1300 sq. ft bungalows are selling in excess of $300K in a city with the worst weather in the country and a province with the highest tax rates and unemployment rates still hovering around 17%.
Madness, it appears, is coast to coast.
Nostradamus aka Tom
>>>#49 Tom on 03.15.10 at 12:09 am
>Garth,
>it won’t be the grimy refugees from Missasagua or the snotty people from Toronto, it will be the Chinese. Out of 1 billion people, even if 1 percent are wealthy and a fraction of those people buy houses in Vancouver, what will that do to real estate? They won’t be moving to the Praries or to a dying province, like Ontario, [stuffs deleted]
#58 G. — If you want an interesting view of the U.S. subprime mess look for “House of Cards” on CNBC. It’s good. Not sure how accurate it is and how much is spin, but it plays out like a good detective story, although they manage to make the subprime borrowers look like the victims, which is extremely annoying and makes you want to reach through the TV and smack them. “We were rolling in equity, so we put in new carpet, paint, window, doors, RE-gutted the kitchen.”
#58 G. on 03.15.10 at 1:08 am
And so I have a question:
How do we short sell this bubble to make our money?
*******************************************
I would like to share some different strategies-with you–but-i get the feeling we’re not supposed to talk about trades on this board–because–oil will be in short supply somewhere ahead of us–so–
Buy gold–dig a hole and worry-
Maybe you can get a few pointers here-on how to can moose meat or gardening-or-something–
Here’s a contrarian call for you–
Oil–next target–$50-$60–barring a war–
And this…
http://network.nationalpost.com/NP/blogs/tradingdesk/archive/2010/03/15/pricey-real-estate-point-to-faster-rise-in-canadian-rates.aspx
Which is, you know… interesting. Tucked in a little corner of the FP website.
#36 Boombust
There is unfortunately NO subway system in this city. What people proudly call subway is not even close to what it is supposed to be.
Just open a subway map of cities like London, NY, Moscow, Paris, Frankfurt, Tokyo and you will clearly see the difference.
Van’s subway system is a big joke. Sad.
Young couple: ask yourselves why wouldn’t the landlord hold on to the property? Why did he sell it to you at this time?
1) He’s a really nice guy and wants to see you guys own a home
2) He a really nice guy and wants you to reap the coming equity gains in the property
3) He has realized the market is reaching the peak, wants to realize a capital gain on the property and minimize his exposure to the real estate market.
That’s a tough one to figure out…..
Jesus wept .
Watch your back G . The delusion is spreading and getting deeper and wider .
Any a–hole can go a million in debt .Doesn’t mean you’re a millionaire .Just means you are stupid .
Most people can not handles the truth .
Bet that young guy wanted to tell you the rules didn’t apply to him as he is so much smarter than the average Canadian.
Garth, I hope you’re wearing a flak vest under the sport coat. Dangerous in the Bull pen. Nobody likes a guy who tells them they’re going to lose money on real estate.
PPP “I want to at least meet the people who’s mortgages I’m co-signing through the CMHC.”
LOL thanks for the laugh
“Unless you’re drunk…” true anecdote, I have had 2 different people from Ontario who moved to BC tell me “they drink a lot here!” – probably why real estate seems like a good deal, hic,…ummm…what?
Jason # 29 -superb summary of CMHC – everyone print that out and hand it out at open houses
#59 Another Albertan – very well said -sad isn’t it.
I think humans are very clever but not smart.
A Bubble really is a social movement, resembling a financially dangerous cult. It takes the ‘Greater Fools’ and Government and Banksters working together to get the mania rolling. All join hands as they charge over the cliff of debt. Then taxpayers get to eat the losses.
I am sure around 2017 or 2018 there will be some really great deals on real estate. Reversion to the mean and the usual overshoot is a concept unknown to almost all of today’s participants, they’ve never seen a real estate bust. It’s something that is found only in dusty textbooks no one reads, way back there somewhere in the distant past. At least they’ll finally get an education in probability theory and the time value of money.
Many excellent comments today, too many to respond to. Well done Blog Dogs. And not because I agree (I admit I am rather Bearish, though I try to be positive) but because so many have put real thought into those comments. Unlike most of the counter-arguments.
Spring is here, time to get out and enjoy. Real estate will still be a bad investment tomorrow.
One has to remember Kelowna is a lifestyle choice.
About 25 years ago I went to Vancouver to visit my sister. 2 weeks later I was back in Toronto, and depressed about it. I thought Vancouver was great, I had a wonderful time, thought about moving there. I’m glad I didn’t now! My sister and her partner are still renting, have never owned a house, just hoping to move up from a 1 bedroom to a 2 bedroom. Sister’s income from yoga has dried up because of too many yoga teachers. They have been on nicer holiday trips than us though, who have been mortgage debt slaves for 20 years.
Garth,
I guess you have selected that nice picture of ostrich for a reference to its supposed habit of burying its head in the sand. This is the one side. Another side that is often omitted is that while burying the head, the bum is always left naked and wide open
Cheers.
Thanks for having the strength to voice your opinion, Garth, but it’s a waste of time out here in BC. “Delusional” doesn’t begin to describe the RE phenomenon in BC – “psychotic” (as in a complete break with reality) might be a better term.
49 “Tom” – like I said: “psychotic”.
http://www.yourhome.ca/homes/realestate/article/780067–canadian-home-sales-down-prices-up
Housing market . BC sales off 13.3 percent.
#82 Nostradamus jr. o
…3/Yup, lets see interest rates rise Garth, as you predict…
Again you have no clue what affects interest rates. The government will not be able to stop the rise of interest rates. Period. Investors effect rates not governments.
Came across the following discourse between two blog dogs at a peak oil/resource depletion website and thought it related to todays’ post regarding the large ostrich population in B.C. (According to Yahoo Ostrich don’t actually bury their heads in the sand but I agree with Garth that many BC residents do)
Blogger #1: “I’m more and more convinced that most people are profoundly ignorant about the real world and it is an exercise in futility to even try to educate them.”
Blogger #2: “Could this be because they don’t have the ‘surplus energy’ to devote to the subject and its implications?”
Blogger #1: “That’s actually an interesting question. It leads to another question which is, what exactly are they devoting their surplus energy to, and what are the implications for their long term survival of diverting their currently available surplus energy from developing their awareness of their environment, and modifying their behavior in an adaptive manner that will allow them to survive long term as a species.
Sort of like a distracted young gazelle sunning itself while a hungry lioness approaches stealthily up wind. My guess is that like the genes in that gazelle, their own may be destined not to be passed on long term.
I believe that as it has countless times through the ages, Darwinian evolution will together with natural selection weed out those populations of species that continue to waste the diminishing amounts of surplus energy in ways that are energetically counterproductive or have become evolutionary dead ends.
Nature doesn’t forgive wasting energy for long…”
Looks like David Pett is well aware:
http://network.nationalpost.com/NP/blogs/tradingdesk/archive/2010/03/15/pricey-real-estate-point-to-faster-rise-in-canadian-rates.aspx
In keeping with today’s theme, recent homebuyers or about to be recent home buyers who’ve bought into these high valuaitons especially in BC are truly nutty. The social pressures placed on some of them to do so are the major crime. Some are almost forced into it by their status/prestige seeking nutbar spouses. Others are most definitely certifiably nuts with status as their primary logical reason to buy.
How many times have we heard, “Rich affluent immigrants are moving into the tri cities and boosting real estate so there is no end in sight!” ?? Every sales pitch under the sun we will hear, every justification, every excuse, we will hear it but will we hear the truth? Will we hear “woulda, coulda shoulda stayed out of the market had I known interest rates would rise” truth?
For readers who really do believe the tri cities are the best RE place on earth due to immigration, the truth is that these cities are not old money cities. Vancouver is not Monaco or Rome or London. Vancouver, Toronto… these are new cities BUILT ON CREDIT. About to be homebuyers in these cities, be mindful of this. It doesn’t matter the color of the buyers in these cities, 19 out of 20 (yeah, I’m guessing, but I’m likely conservative in my guess, its likely 19.5 out of 20) are financing. The vast majority of immigrants aren’t paying a half a mil to a million cash for their homes. They are financing for it and that should tell you all something. If you question this, try looking at what the gradual decline of interest rates since 1990 has done to RE values everywhere, never mind Vancouver and you’ll see the pattern.
It should tell you all that immigrants, just like most of the rest of us, are sensitive to interest rate hikes. Honcouver is no safe haven. Toronto and Montreal are likewise cities built on credit. What do you all think will happen when the cost of borrowing rises? When monthlies go up 5% with each 1% interest rate hike in the face of rising taxes and no real earnings to offset these costs… what do you all think will happen to RE values as a consequence? One cannot squeeze blood out of a stone.
Do I need to spell it out what happens next?
“When monthlies go up 5% with each 1% interest rate hike”
My bad. Its much higher, more like 12 – 13% with each 1% rate hike.
Vancouver? Let me share my opinion and view of that city and its desirability. We went there for couple of weeks in early September of 2004. That was great vacation, let me tell you. It was like every single day is a new vacation to new place and to new activities. Ocean, then to Victoria, then to Linn Canyon, then to aquarium, then to mountains again, gastown, china town, Stanley park, Steveston, etc. However, how locals can see it as appealing place to live is beyond me. From my own experience you start early in the day and it’s cold outside, then it’s worming up for all tourist activities and then it’s bone freezing in the evening as cold is coming from the mountains. So as tourist you might be ok for 2 weeks, but locals see nothing, but cold weather on the way to home/office and then spend nice time of the day inside (?). How is that a good thing? We were much relieved coming back to Toronto into +24C. On top of that, some locals asked us if we were lost just steps away from the downtown because we were in “bad area”. And even though we could defend ourselves, being from “difficult country”, still spirit of trouble was flying around there somewhere. Prices in supermarkets ware troubling too. It seemed like there were no “summer” prices for vegetables/fruits in Vancouver, they were high end middle-winter prices on those in Toronto. So how could you afford to pay so much for the home and interest to the banks if you have extremely expensive cost of everyday living? Therefore the summary that I give to anyone interested about Vancouver is: “very expensive to live every day, very expensive houses, limited ability to enjoy assumed benefits of the weather, troubling criminal situation in city core”. I hope this helps those hopes that Torontonians will go to Vancouver for their retirement, indeed. Ughumm…
It’s too bad the unfortunate couple, who are now trapped into several decades of debt, didn’t consult a financial advisor.
One has to remember Kelowna is a lifestyle choice.
So is being a transvestite .
99 Patsan
Toronto’s subway is nothng to talk about either. Not even a train to the airport.
Will condos like these be worth $170K again? That’s what they should be worth… what they WERE worth 3 years ago:
(From the Globe and Mail, March 12th)
3 Navy Wharf Crt., No. 609, Toronto (Spadina and Lakeshore)
Asking price: $299,900
Selling price: $317,000
Previous selling price: $223,500 (2007); $149,533 (2006)
Taxes: $1,836 (2009)
Days on the market: 16
Listing agent: Boris Kholodov, Royal LePage Real Estate Services Ltd., Johnston and Daniel Division
Small properties, such as this roughly 660-square-foot suite have the power to attract a big crowd, says agent Boris Kholodov.
#51,
I have never been in a North American city where they did this. It baffles me really, I would have expected that at least this they’d figured out, but alas I am wrong.
I never stopped to marvel when I lived in Toronto just how disfuncational the traffic there is as well, not in the least because if you drive the speed limit you go from red to red.
#106 Internal Exile,
I agree. We are too far gone in B.C.
Too many Sheople all headed over a cliff. For every Re Bear there are 10 Re Bulls.
Garth, Here it comes read below
Canada home resales cool for 2nd straight month
Module body
Mon Mar 15, 12:15 PM
By Ka Yan Ng
ADVERTISEMENT
TORONTO (Reuters) – Sales of existing homes in Canada dipped for a second straight month in February, but remained high on a year-over-year basis, as the market may be moving into more balanced conditions, data showed on Monday.
The Canadian Real Estate Association (CREA) said a total of 42,799 homes changed hands last month, down 1.5 percent from January, as a large gain in sales in Toronto were offset by declines in Vancouver and other British Columbia housing markets.
#65 gettin outta Tdot on 03.15.10 at 1:54 am
My only concern about moving south is, could Palin really win a presidency?
——
Haha! I think you have hit the nail on the head! I am as big a real estate bear as there is (regarding Canada right now)… and even I think real estate in the US is becoming a screaming deal. But you are so right… our sorry little cousins to the south seem intent on flushing themselves down the toilet by voting in that half wit! I say do it… San Diego may not be Vancouver, but it ain’t half bad, and least it’s affordable;>
#64
Yeah, I somewhat knew that Toronto had shifted west, waiting for the headoffices to follow now
People here aren’t really rude, they just don’t like other people. Don’t forget, Vancouver is mostly a vertical suburb, hence the enormous amount of NIMBYISM in this town.
I lived very briefly in one back in Edmonton, and yes, the sound travels quite a bit.
In contrast at least in downtown Van most of the buildings are build of concrete, albeit rather shitty.
I am in a 35 year old building, which sits right at English Bay, overlooking it and part of the Northshore Mountains (heck, I can even see part of Lionsgate Bridge I realized yesterday after four years). Meanwhile, the building next door they finished last year I would not put a penny in. I saw them build it and even though I am not in the construction industry several of these things struck me as odd and asking people who ARE in the field confirmed my suspicion.
Yes, interesting times ahead, let’s see how it goes.
#95 Jeff Smith
Nostradamus aka Tom
…Tom is a happy camper knowing he has become a new member of the Dark Side.
Nostradamus jr.
I’ve seen a few bloggers trumpeting gold here as a guard against inflation and deflation. Has anyone had experience using Questrade to buy gold and holding it at the Mint? In your opinions would this gold be safe from government hands if left in RRSP?
Some people have mentioned how to short real estate. Would shorting one of the REITS (like Boardwalk) work?
Post# 55 JSHUM “By year 10 they will have paid the bank $272,326.37 in interest”
Alright, not going to Question your reasoning…..
Why not keep that money in YOUR pocket $272,326.37 x 6%= $16,339.58 thats what they are paying for rent.
They now live for free.
Canada second biggest city is : Montreal.
Garth, why Montreal is never discussed on this blog?
Where’s the love?
We could use a hug too…
cheers,
Nicolas, MTL.
#58 you can’t currently short the RE mortgage market – but you will be able to soon. CMHC will be changing their system a bit , they will be packing the mortgages into bonds and selling them. Exactly like the Americans did with the subprime mortgages. And once on the bond market, you should be able to short them….
==========
Chinese goods worth US$2 billion were seized from the Cherkizovsky Market on September 11 last year. The government on June 18 said it would destroy all those goods as they were “illegally smuggled into Russia”.
500 tonnes of counterfeit goods from China was recently confiscated in Italy.
==============================
Several North Carolina agencies are shipping seized counterfeit shoes to poor countries. The Division of Alcohol Law Enforcement said in a news release Sunday that $850,000 in counterfeit shoes that were seized in the Charlotte area have been boxed up and sent to World Vision. The relief agency provides disaster assistance around the world. The Alcohol Law Enforcement Division has been working with the Secretary of State’s office in a crackdown on counterfeit goods. The state got the permission from Nike and Timberland to donate the 8,000 pairs of shoes and 500 boots. Typically, counterfeit goods are destroyed after they are no longer needed for evidence in a criminal case
Interesting comment on Globe and Mail Home Ownership costs rising article today…. 3/15/2010 1:09:24 PM
My RE agent friend gets about 50% of her business from first-time buyers, specifically in the condo market in the GTA. She has story after story about buyers who are desperate to get in at any cost. She says she spends a large portion of her time educating her clients on the basics of mortgages, interest rates, debt management – she’s amazed at the incredible lack of understanding or respect for the risks. Despite her advising that they temper their expectations, most of them want to spend to the limit of their credit with the lowest downpayment, longest amortization period and of course floating rates. The risks don’t matter, just the frenzied need to get in because everything is shooting up and they want to cash in. The other half of her business are people that bought in the last 1-2 years and who are already looking to sell because their properties have gone up 20% and they want to get something bigger/better. I never thought I’d hear an agent say this but she actually wanted the government to clamp down harder on CMHC because she hears the same stories from other agents and is terrified that a crash is a real possibility. You know when an agent confides that they are highly concerned, that the market is in bubble territory and rising.
26 0 Report Abuse
#126 Nick,
Montreal is mentioned but only out of respect. We spend our time talking mostly about the Sheople in Vancouver or Toronto where the housing bubble is the biggest.
Love Montreal and the affordable price of your houses – but what fun is that?
Just saying…
Banks are competing in reducing mortgage interest rate, because they know that in the very short future, many borrowers will default; and they will get more and more money from Government. The more mortgage they sell today, the more money they will get back from Gov’. After all, right after they lend the money to the house buyer, they sell the mortgage to investors and recover the money. Win-Win.
Aren’t they already shorting the RE in Canada? GS and others did very similar with the CDS. Déjà-vu?
I am a new mom and I am obsessed with owning a house on the westside of Vancouver, where I grew up. My husband is a realtor (an ethical, good one, for the record, not a slimy semi-retarded liar like most of them out there). We did a search for anything under a million dollars from Dunbar (very west) to Fraser street (east side). There were SIX LISTINGS. 5 were total dumps and the 6th was a super cute cottage 2 blocks west of the east border (that would have been considered by my circles as ‘ghetto town’ about 4 years ago). I would say 100 people viewed it yesterday (and it had been open the day before as well so I’m sure it was just as many people then). It will definitely go for over asking, probably a multiple offer situation. I’m pretty good at predicting these things, it’s on for $848K…I’ll bet it goes for $915K…I’ll post later to say if I was right.
Despite my stress and anxiety about getting ‘into’ the market, there was one listing that actually made me laugh. If you are from Vancouver you may know the term “Vancouver Special”. Vancouver Specials are homes that were built in the 70′s and 80′s and are cheaply built eye sores that are littered around Vancouver, mostly in the lower income neighbourhoods. Well, a “renovated” Vancouver Special went on the market last week for 1.5million dollars. They slapped some paint on it, put in a new kitchen, bathrooms and big deck on the back, but the house next door is the identical twin of the original house before reno’s and if you look at them side by side they have the exact same roofline, window placement, EVERYTHING but the paint. Sorry, you couldn’t pay me to live in a Vancouver Special, 2 blocks west of MAIN STREET, and for for 1.5 million??!!! That’s plain laughable. If it sells I’ll shake my head and move to Tucson.
It’s really rediculous. I can’t understand where people are getting the money for these down payments and monthly payments. They can’t all be that stupid, can they? I had a client tell me the other day that the fixed rate is related to the bond market but floating rates aren’t so he predicted that the floating rate could stay this low for a very long time.
I am stressing out about it so much. My brain tells me this is crazy, but my emotions are nagging at me that if we don’t ‘get in now’ we won’t get in at all. My husband isn’t stressed at all, he is very happy that we are renting and keeps telling me to be patient. Reading this blog helps me calm down…I really hope you are right, bring the bubble on!!!
#129 OnlytheBankersLaugh,
The politicians laugh as well.
Flaherty and Harper will have blood on the hands before this is over. It is so sad. Many of us have been saying this for months. The younger generation are going to get a very hard education in market fundamentals that will last a lifetime.
Very sad. So predictable.
Garth or blog dogs…
what’s your take on foriegn investors. I keep hearing that iranians are buying up all the real estate so prices can’t go down. Is there any truth to this? And if so, where’s the evidence of such transactions?
Anyone?
#131 Just Saying,
This is not the same as shorting. There is no market for shorting the CMHC. If I am wrong please let me know because I am buying – big time. Sell your house and invest in that if you want to make a bundle!
Give Michael Lewis’s new book, “The Big Short” gives an account of how the shorting market was created with Credit Default Swaps. It is pretty fascinating as the guy who pushed for them to be created was a one man hedge fund in Cupertino, CA. An excerpt was printed in Vanity Fair. Very interesting. If I find it I will print a link.
#82 Nostradamus jr. on 03.15.10 at 9:19 am
“2/
Feb R E lag in Vancouver….uhmmmm, I believe the Olympics may have been taking place.”
During owelympix (according to one of your pipe deams) all foreign visitors should have brought all the cash in the world to buy all the remaining RE in order to get a piece of Hongcouver paradise. That would result in skyrocket prices of several millions for an outhouse…..
Did not happen, because rich foreigners aren’t dumb. They are rich for a reason. All who was buying during the 5 circle party were 5/35 with no money.
“3/
Yup, lets see interest rates rise Garth, as you predict…lets see what it does to TO, the most interest rate sensitive locale in all of Canada….with 6 million citizens?….a Loonie effective now at US Par and everyone there reliant on an export driven manufacturing economy.”
At least they have a manufacturing economy….what do we have? Minimum wage McJobs and Mall-Wart jobs….and a million dollar outhouses rotten to the core .
#127 jwkimba
“#58 you can’t currently short the RE mortgage market – but you will be able to soon. CMHC will be changing their system a bit , they will be packing the mortgages into bonds and selling them. Exactly like the Americans did with the subprime mortgages. And once on the bond market, you should be able to short them….”
That’s terrible advice. You’d might as well short a government bond since they are backed via CMHC. They will have no more correlation to the housing market than a government bond of similar duration.
You’d be far better off shorting a construction company or home improvement company.
Gorgeous golfing day here in the Okanagan, sunny and mid-teens temp. Shorts – T-shirt weather!
Prediction: ‘Quake (maybe biggie and soon) around Seoul, S. Korea. Link is pics of cloud formations before and during Katrina, and the last one of the tidal wave.
Slightly more realistic than December 2012.
Where in the controlled m$m did this appear? It didn’t!
But there will be a short report on this. Rumors
Deflation = Default.
Any wonder this world is in such a mess? One law for the rich, another for the others.
Hoax! Another one, like global warming, bites the dust. Good!
Silver or gold? 7:48 clip. I prefer silver coins. Gold
US Fed — Fraudsters Unlimited. After all, they are a private institution which controls the economy. Doesn’t sound right, does it?
Bunker buster bombs — destination Iran? Blow up Dimona and have equals and opposites.
Smart move — China and Russia make deals and sticks with them. The US bombs the crap outta everyone!
#40 Junious
Take a look around you. Reality. The trend is your friend. Try to make some money rather than hating all the time. 2 weeks until April and no collapse yet. Get it through your mind that there will be no collapse. Even Garth acknowledged that a golden buying opportunity will be if house prices corrected to 2008 levels…which are about 15% off todays levels.
If market were to turn, sell fast. The Trend is your friend. You live your life, let others live theirs. Simple, isn’t it?
if you liked liar’s poker you might enjoy 60 minutes interview with the same author michael lewis
http://www.cbsnews.com/video/watch/?id=6298082n&tag=related;photovideo
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According to our finance minister:
“So I’m comfortable that we’re managing this situation ok,” he said. “There is some upward pressure in the housing market…but we don’t have a housing bubble.”
Restrict banking leverage: Canada’s Flaherty
Well, 三猿 come to mind… for many reasons.
-
…Lets be logical friends…
Ontario is the only Province that would argue…No…because its R E Home values would tank!
Quebec wants to separate…let’em
Western Canada wants to separate…an inevitable.
Canada is too diversified… too large…too many levels of govt.
It’s time for Canada to split up…it is inevitable friends.
Nostradamus jr.
#134 RS,
Ask NDMS Jr.
This is one of his crazy theories. Come to think of it, they are all pretty crazy.
Anyway, ask him.
#100 Bottoms Up
Young couple: ask yourselves why wouldn’t the landlord hold on to the property? Why did he sell it to you at this time?
4) He knows that your property and others like it will be a lot cheaper in not a lot of time. He recalled that famous line from Tom Vu’s infomercials, “Buy (distressed) Real estate Free and Clear for Pennies on the Dollar,” which is exactly what is now happening in many US cities.
Unfortunately, I don’t think that the wife will let me get the boat with all the Rent-A-Babes like Tom Vu had.
#132 Borninvan,
You are wrong. There are that many stupid sheople (new word of the day). As long as the credit is cheap they will be buying. There is very little sanity left in Vancouver.
The is classic stage 6 of a bubble. Stage 7 is the pop and it is coming soon enough for you. Just relax for a few months.
Jayman on 03.15.10 at 8:34 am
Could it be that this landlord was using one of Garth’s techniques in Money Road? Sell with a high downpayment and long closing. He may have just made a cool $34k tax free for no work at all.
—–
Either way its going to be an expensive lesson. Glad I paid $20 for the book or that could have been me.
One must always ask the real estate agent for their investing advice if you are looking for the straight goods.
Of the hundreds I have met, maybe one seems coherent.. maybe. The rest are dolts who know how to print out listing searches… hell they even know which room is the bathroom and which the kitchen… nuclear scientists all of them.. so Kelowna boy took the word of one of the greatest hustlers of our century.. the real estate terd word…
The only question is… if he was so confident at his decision why in the world did he go to Garth’s speaking engagement.
All smart Asian investors in RE in BC sold over the last 6-8 months. They waited for the final run up from the games and took profits. Who said Asians didnt win Gold!
All smart International investors wont touch VAN or BC as they know the outcome already!
In BC, there is likely 1 Bear for every 100 Bulls!
developing countries are the most vulnerable to transfer mispricing by multinational corporations
“Mispricing and the Arm’s length principle.
If two unrelated companies trade with each other, a market price for the transaction will generally result. This is known as “arms-length” trading, because it is the product of genuine negotiation in a market. This arm’s length price is usually considered to be acceptable for tax purposes.
But when two related companies trade with each other, they may wish to artificially distort the price at which the trade is recorded, to minimise the overall tax bill. This might, for example, help it record as much of its profit as possible in a tax haven with low or zero taxes.
For example, take a company called World Inc., which produces a type of food in Africa, then processes it and sells the finished product in the United States. World Inc. does this via three subsidiaries: Africa Inc. (in Africa), Haven Inc. (in a tax haven, with zero taxes) and America Inc. (in the United States).
Now Africa Inc. sells the produce to Haven Inc. at an artificially low price, resulting in Africa Inc. having artificially low profits – and consequently an artificially low tax bill in Africa. Then Haven Inc. sells the product to America Inc. at a very high price – almost as high as the final retail price at which America Inc. sells the processed product. As a result, America Inc. also has artificially low profitability, and an artificially low tax bill in America. By contrast, however, Haven Inc. has bought at a very low price, and sold at a very high price, artificially creating very high profits. However, it is located in a tax haven – so it pays no taxes on those profits.
What has happened here? This has not resulted in more efficient or cost-effective production, transport, distribution or retail processes in the real world. The end result is, instead, that World Inc. has shifted its profits artificially out of both Africa and the United States, and into a tax haven. As a result, tax dollars have been shifted artificially away from both African and U.S. tax authorities, and have been converted into higher profits for the multinational. ”
What has happened here? This has not resulted in more efficient or cost-effective production, transport, distribution or retail processes in the real world. The end result is, instead, that World Inc. has shifted its profits artificially out of both Africa and the United States, and into a tax haven. As a result, tax dollars have been shifted artificially away from both African and U.S. tax authorities, and have been converted into higher profits for the multinational. ”
.
#141 I had no idea there were FOUR monkeys! Always something new to learn in this world.
#142 Nostradamus jr. — “Western Canada wants to separate…an inevitable. Canada is too diversified… too large…too many levels of govt.”
Correct, and talks between various states and provinces are well underway.
A pity there isn’t a way to time travel back and fro, to know what the future holds and act accordingly.
#142
Actually the main problem is that the Federal Government has unloaded a lot of things onto the Provinces in the last 20 years which results in regional splits that wouldn’t need to be.
The problem is that even though the worst of Thatcherism and Reaganism have passed Canada by, for the last 15 or so years several different Administrations have tried to move Canada in that direction.
Could Canada break up? Sure, but it’s highly unlikely. BC wouldn’t know what to do with itself, AB is landlocked and would have a hard time selling anything to the US (if the new regulations with regards to “clean fuel” go into effect). QC can’t really afford not to get Federal money and they rather enjoy their “special status”. Eastern Canada would be screwed as well and Ontario…. Well, they probably COULD go it alone, at least they have 1/3 of the country’s population, major company HQs and are in essence the heart and brain of Canada.
“Being my diplomatic self, I told them they were screwed, and would actually be better off walking away from their down payment than closing the deal”.
Garth, you really should consider doing some stand-up!
#132 Borninvan – What you really need to ask yourself is regardless of whether or not the prices go down in Van, do you really want to be part of that … If your answer is yes, than I feel sorry for you!
p.s. Just rented Michael Moore’s latest ‘Capitalism: A Love Storey’. This movie is priceless. Please, everyone go out and rent this movie and make sure you check out the scenes on Flint Michigan and how the City is trying to get paybackon the speculators that helped destroy
this decrepied City. Speculation is a product of Capitolism …. a cancer that infects and destroys communities! Thats ‘Communities’! Look it up! Speculation can be ‘active’ or ‘passive’ …. when someone go outs and pays some insane price for a house, this is ‘passive’ speculation, which is more prevelant now than ‘active’ speculation, but just as destructive. ‘Borninvan’, are you listening?
from G&M
“After a historic runup in prices, the Canadian resale housing market is set to cool down as a wave of new listings hits the market, providing badly needed inventory for hungry buyers. “
#139 TheBull,
I am looking around and all I see are Sheople crazy enough to buy homes in Vancouver. Today’s trend is tomorrows old news. Get used to it. Buckle up.
I am making money. Who said I wasn’t making money?
Michael Levy is the biggest flip flopper who ever walked. One time he called for a house crash at any moment in early 2007 and it never happened. Right before the crash in 2008 he calls for house prices to keep on rocking then they went down. He does the same with gold, stocks etc, he don’t know sh*t.
Great post Garth, BC is on drugs and the Grand Illusion is about to nail them in the cajones.
#23 Dan in Victoria on 03.14.10 at 9:55 pm
So you paid 800 grand to save 16 grand. Now you’re going to get whizzed for 34 grand in cash, plus.
….
5 year fixed at 4% 35 year is going to cost you $3306 a month. (assuming 750 grand mortgage)
You were paying $80,000 in rent for that period.
You are now paying $198,360 to the bank, plus property taxes, plus maintenance.
…
But hey you can always throw more money after bad.
b-b-but renting is ‘throwing money away’!
How do people that dumb earn enough of an income that a bank would be okay with lending them $750K? I’m really curious.
Seriously, what do people like this do for a living as it evidently doesn’t involve even basic arithmetic.
Vancouver is a second rate backwater – with a collective ego the size of Matt Cooke’s elbow.
I live here. We sold our condo and people told me I was insane.
Yeah, I guess it sucks having zero debt, 400 K in various money making piles, and I no longer have to deal with the psychopath on the Condo council – that has driven the ‘contigency fund’ into the red. I don’t have to listen to dumpster divers raving all night, and no more ‘we need a new _____.
We rent a place that has had the rent reduced 12% – because we can pay on time, don’t grow plants in the bathroom, and are quiet and sober. What a concept!
We live in a $2.68 million dollar rented penthouse, and the owner in San Francisco has said she’ll lower the rent again – if we sign a one year lease. She knows that this place (*can you imagine the taxes – and her monthly maintenance fee is $678.00) – is killing her future, but she can’t get out from under her place in Mill Valley area. She bought it in 2005, and it has lost 47% of its value. She will lose about that and more when she tries to sell. Meanwhile we are looking at craigslist and seeing the desperate ‘investors’ trying to rent 2 bedroom apartments in Coal Harbour for $3250 a month. (*Insert Garth Trurneresque punchline here).
We are planning a move in the next 4 months, and it’s NOT going to be British Columbia.
Nice three bedroom Caper on 4 acres, on the water – in Nova Scotia.
Way over priced at $235,000. LOL.
I cannot wait to get out of this place before the Bills start rolling in from the Visa-GM-Coca Cola- McDonald’s – Acer X-Games Festival.
$11 Billion dollars – so Stephen Harper could show us that he isn’t quite sure what size Team Canada jacket he should be wearing. *That would be an XL, sir…not a Medium.
VANCOUVER’S CREDIT RATING HAS BEEN DOWNGRADED TWICE AND WILL BE AGAIN WITHIN SIX MONTHS OR LESS. Bet on it.
The delusional, debt ridden yokels that think that this ‘is the greatest place on earth’ better lay off the bud – and start laying in for the siege.
Just like Garth has been doing at the Family Bunker.
#115 men with hats..You would fit in well in the west end of Vancouver there are a lot of transgenders like yourself there.
Love this message!
Influx of listings set to cool resale housing market
http://bit.ly/co4wsR
#126 Nick
BIG hug for Montreal, group hug everyone c’mon. I lived there for awhile, it’s a great city and the only place this devoted westcoaster will visit again for a Canadian holiday.
#158 TJ
thanks for the belly laugh, having lived through 5 glorious years on council that turned into hell on earth when some nutbars moved in I know exactly what you went through. Lucky for us they all moved on, discredited and disgruntled thanks to a sane majority.
I too may soon be renting in Vancouver, I like the sounds of your deal, enjoy!
#115 men with hats..You would fit in well in the west end of Vancouver there are a lot of transgenders like yourself there.
Go phuque yourself drag bag .
#158 TJ
Looks like -47% drop in Mill Valley, CA R E prices brings the price level down to the current West Vancouver price range.
http://tinyurl.com/yk4y3qs
…Best wishes on your move to Cape Breton, by tunder & lightnin, seal and flipper pie.
Nostradamus jr.
#142 Nostradamus jr. on 03.15.10 at 6:45 pm
Keep dreaming, the memebrs of “bilderberg group” already have the future planned for AmeroUnion, with common currency Amero.