Cowtown moment

Folks in Toronto, Vancouver, Milton or Lunenburg would be smart to think about Calgary once a day. It’s probably the most American city in Canada. Only fitting then that it would be the leading edge in what’s looking scarily like the early days of a US-style housing meltdown.

Fact is, if you own a house in Cowtown today, and you need to sell it, you’d better be prepared to deal with flinty vultures, or see it veg for a long time. Like years. As one realtor told a local reporter this week, if the property isn’t outstanding, “it might sit on the market perpetually.”

So far this month 825 houses have changed hands in this city of 1,080,000 people. That’s down about 25% from last November, and off 7% from last month, which was down by a third from last autumn. It’s the six consecutive month of substantial year-over-year sales declines, which means this is far more than a blip since it spans some of the best real estate months on the calendar.

As for prices, Calgary’s average topped out in the summer of 2007 at $506,000, and a SFH now sells for about $455,000. That number has been reasonably stable this year, the result of a slide in sales which allows relatively few higher-end homes to keep the average elevated.

More important is what’s being experienced by sellers. One of them told me this week, after having a custom-built home on the market for 20 months, that ‘the only option left is to rent it and wait for the market to come back, which looks like it might take five years.’ Meanwhile, as you might imagine and expect, local realtors are sprinkling the fairy dust of false hope.

“I firmly believe that we’re going to see more growth and activity probably not too early in 2011,” says local cartel president Diane Scott, “but I think about February or March we’re going to see a lot of people coming off the fence.” She bases that on, well, nothing.

The fact is things are almost certain to be worse in the spring. The simple reason is so many people have snorted the realtor dust and removed homes from being isted that when they pile back on in March, buyer demand will be overwhelmed. Currently there are about 10,000 houses for sale in the city (which means sellers will wait, on average, almost a year for a buyer), but could easily swell to the early-2008 level of 15,000.

And that would turn a six-month-long sales rout into the beginning of a price decline would could last much longer. More vultures. More desperate vendors. More price reductions. Most lost equity for everyone. It’s a pattern familiar to almost every American homeowner.

Why Calgary?

Because, like Vancouver and Toronto, house prices raced too far, too fast. Calgary was about a year ahead of those cities in price appreciation, thanks to oil which spiked to $147 a barrel, creating a false wealth effect. That made realtors greedy and homeseekers horny. Bidding wars ensued, and suddenly it cost 25% more to live in the middle of Alberta than in the middle of Toronto’s six million residents. That was unsustainable, of course. Just as, say, the average Van house at $800,000 is today.

Exacerbating things was a recession which knocked oil prices down, increased unemployment everywhere (it’s now a chilling 10% in the GTA) and actually led to a decrease in Calgary’s population last year. Now the city is in crappy financial shape (like Toronto and Vancouver), and the new metrosexual mayor is talking about a big tax increase.

Being full of practical people with cowboy genes (unlike Vancouver’s polluted hippie DNA), Calgarians have decided to stop buying houses. It’s a good decision, of course, give what’s about to happen.

We have a handy indicator of that. It’s called the US.

Yesterday the latest Case-Shiller home price index was released, showing new price declines in 18 of 20 major metro areas. Prices were down .08% in September, and this is after four years of almost continuous meltdown. Said an analyst who expects another 20% decline in real estate values:  “Housing is in big trouble. As prices go down, more people get underwater, leading people to walk away. That will be Act II in the whole drama of the housing collapse.”

By the way, my bud Benny Tal, senior CIBC economist, gave a speech a few days ago to a mortgage group, which was not widely reported. He talked about the 24% of American households who now owe more on the mortgages than their houses are worth.  It will take until 2017, he said, for house prices to rise to the point where the average person in the U.S. is able to get out of negative equity. That will be 12 years after the market started to crumble.

Now, it might be extreme to say Calgary’s headed in the same direction. It might even be imprudent to suggest what happens to the largest city west of Toronto is a harbinger for the rest. Perhaps we’ll somehow escape the housing meltdown that nailed the middle class in America, Britain and most of Europe.

Or not.

That’s your Calgary moment for today. What did you learn?

228 comments ↓

#1 tiger_baby on 11.30.10 at 11:35 pm

Repost one of my previous comments for new readers:

Once upon a time there was an isolated town with ten families, nine of them owned a house, one family rented, and there was $ 1000 in town for the residents to exchange for each other’s goods and services.

One day a house exchanged hands for $ 100 down and 90% mortgage, and everyone thought “hey I have $ 1000 worth of equity in my house! let’s tap that by obtaining credit against that collateral so we can buy some cars and big TVs.”

Soon business took off as the town built up an economy of $ 10000.

This went on until one day, someone decided that he would like to be paid in cash for a $ 1001 invoice. Soon all hell broke loose as the town realized that this was going to be “the end of the economy as we know it”.

In rode Ben on his grey donkey and said “calm down boys and girls!” “instead of you all go bankrupt simultaneously, how about I give you $ 2000 so everyone stays liquid, you all work hard to pay off $ 3000 and write off $ 4000 from you books?”

at this point someone pipes up and shouted “oh no he can print infinite money!! there will be hyperinflation!! I’m going all gold!!”

note that

– the so-called “money printing” only covers part of the purchasing power short fall from credit contraction, ie. not additional money but trying to make up what was already in the system

– hyperinflation does not solve the debt problem as future liabilities are indexed to inflation, plus they don’t disappear after a sovereign default

– hyperinflation means the rich and powerful lose control, you can bet that they will do everything to prevent it from happening, including higher rates, taxes and cutting entitlements

– should that fails we can probably look forward to worldwide economy contraction to such a degree that you can’t exchange PM for much, since there won’t be much of anything anymore. in fact you may have to exchange all the gold you have for a seat on some fishing boat, because …

– there will be a resurgence of communism everywhere … because life will be much tougher, and people are even less likely to tolerate all the “money” in the hands of a very select few

plus

– fiat currencies have only been in place for a relative short period of human history, so I don’t think it’s entirely appropriate to make the argument that “no fiat currency has ever …” or to use Weimar hyper-inflation as proof that fiat currency does not work. Afterall, I don’t think anyone is arguing that demoncratic elections are doomed to fail because of the Weimar experience

– PM has been surging due more to emotions than cool headed analysis, much like RE market. When you think that something can only go in one direction, think harder.

– don’t complain about productive activities moving to China and India when everyone wants to “invest” in assets such as RE and PM, put it bluntly this is “speculation”, not “investment”, and it is the main cause of our current problems, and you can only sell an asset once

food for thought:
what is the purpose of the economic and monetary system? is it to allow a society to maximize it’s productive potential, or to “preserve the value” of the unit of measure (ie. “dollar”)??

#2 Dave Moss on 11.30.10 at 11:36 pm

It will Hurt them where they live

#3 Devil's Advocate on 11.30.10 at 11:39 pm

“So far this month 825 houses have changed hands in this city of 1,080,000 people. That’s down about 25% from last November, and off 7% from last month, which was down by a third from last autumn. It’s the six consecutive month of substantial year-over-year sales declines, which means this is far more than a blip since it spans some of the best real estate months on the calendar.” – Garth

Big flippin’ deal! Come on now Garth what the hell did you expect coming off a party like the previous five years? You and I both know these numbers are more “normal” than anything else. This is nothing more than a cleansing thus far – a light dusting – hardly even that!

And what’s with comparing this month over last month? Are you seriously going to tell me that November volumes being down 7% over October means anything at all? Or is that “seasonally adjusted”? Talk about grasping at straws.

This really is growing old. Trying to make a mountain out of a molehill because the predictions aren’t panning out quite so quick as we expected.

Hey I’ve got an idea… why don’t we think about accepting that maybe, just maybe, things are just not going to get as bad as we thought. “No, no, no not so quick there cowboy I think I see some signs of impending doom just up there on yonder horizon.”

Geesh…

Your arguments were more cogent before you became abusive. — Garth

#4 Jsan on 11.30.10 at 11:39 pm

Nowhere has the wealth effect been more obvious than in Alberta over the last few years. We talked about it all of the time. How we saw friends, family, coworkers showing up to work in brand new SUV’s, cars, (not American made, BMW’s, Lexus’, etc.) motorbikes etc. bragging about how their houses had skyrocketed in value. A relative of mine didn’t have a 2 pennies to rub together. Had borrowed money from every family member with little chance of ever paying it back, than one day showed up with a check to payback the loan, a month later a total home reno started from top to bottom. 6 months later a brand new car in the driveway. What had changed? This relative discovered the home could also masquerade as an ATM machine.

Two co-workers in different cities in Alberta bought houses to Flip for quick easy cash or so they believed. The one co-worker sadly realized that the market had turned but wisely dumped his flipper for an 80K loss. It hurt , especially someone who was not well off but he realized the hard way that flipping only works on the way up and can destroy your finances when you buy at or near the top. The other coworker has lost allot in his flip but has unwisely decided to rent it out and wait for the rebound (which will not be coming).

It would be one thing if all of these people had no clue to the reality of housing bubbles and subsequent busts but for them to see first hand the carnage that has taken place and continues to take place in the housing market just across the border leaves no excuse for their stupidity and their belief that Canada’s housing bubble “IS DIFFERENT!!!”. We haven’t even seen anything close to high interest rates yet. This is truly the calm before the storm.

#5 SRV ES339 on 11.30.10 at 11:41 pm

“I firmly believe that we’re going to see more growth and activity probably not too early in 2011,” says local cartel president Diane Scott, “but I think about February or March we’re going to see a lot of people coming off the fence.” She bases that on, well, nothing.

=====================================

In a follow up to my recent comments on a spectacular R/E meltdown in beautiful Port Credit… I was talking to a local agent on the weekend and the luxury building in question came up… seems almost all of the suites up for lease (because they can’t be flipped as planned) are owned by agents!

1.) Looks good on them (vultures all)!
2.) When will our government put a legislative end to flipping by agents?

#6 Throwstone on 11.30.10 at 11:42 pm

I think all those with a vested interest in real estate should get a shot of Vitamin “G” !

Keep it up Garth!

#7 Another Albertan on 11.30.10 at 11:51 pm

Here’s another Calgary moment.

I had a drink with a colleague who was in town a week ago. He’s an Albertan whose only significant job opportunity right now, by virtue of his skills, is in Russia. If he wants to work consistently for the next while, it’s in Moscow and in Siberia – the potential for arbitrary contract termination not withstanding.

He and his wife have an acreage well outside of Calgary. Know how hard it is to find someone to house-sit, even with free accommodations? Practically impossible. Renters? Even less of a chance. It’s at least $100 per week in gasoline to get back and forth from the acreage to downtown on top of it.

The acreage and the house would have been well over a million at the peak. Now, he’s of the belief that it’ll be at least 3 years before he’ll be able to try to break even. I’m a bit more dour. He’s also living in an “out of sight, out of mind” fog. They’ll be burning through thousands every month keeping that acreage “alive”, on top of the cost of living in Moscow.

This isn’t death by a thousand cuts. It’s death by a hundred cuts.

Everyone else’s mileage may vary.

#8 $froma$ia on 11.30.10 at 11:51 pm

All I know about Calgary is that Nikki is hot!

Love her knees!

Would love to see her in knee highs!

#9 Timing is Everything on 11.30.10 at 11:59 pm

Garth said – “By the way, my bud Benny Tal…”

Here ya go Garth…the rest of the story…

‘Housing crash is not likely to happen in Canada.’

“Benjamin [Tal] is one of the best economists around and is usually correct….”

http://blog.markherman.ca/2010/11/30/housing-crash-is-not-likely-to-happen-in-canada/

This is old ground. We don’t need a ‘crash’ to have serious consequences for people who bought houses with minimal downpayments, nor for the ripples to affect everyone. Don’t fall for that semantic sleight-of-hand. — Garth

#10 Kevin on 12.01.10 at 12:01 am

Thanks Garth, I know that housing markets are definitely correlated to one another. Across the world and across the world. Calgary is Saskatoon’s indicator as Saskatoon experienced bidding wars jsut less than one year after Cowtown.

Global housing bubbles move in a synchronized manner
http://saskatoonhousingbubble.blogspot.com/2010/11/global-housing-bubbles-move-in.html

“House prices in many industrial countries have increased unusually rapidly in recent years and in some cases these increases do not seem to be fully explained by economic fundamentals. More importantly, the analysis in the first essay shows that, even though housing is not traded, house prices are highly synchronized across industrial countries.

The global housing boom was an illusion of wealth built on a mountain of debt. Now, countries like the United States and most of Europe are experiencing the unravelling of the wealth. But the debt remains. This is the synchronization of global housing markets working in reverse of the boom. Canada is not different and we will join the others very soon.

#11 Aussie Roy on 12.01.10 at 12:02 am

What have we learnt.

That every single overpriced market, house investing is seen as a sure thing. All these areas housing prices are NOT supported by their rental return. The population in these areas always claim its different here, rental return is unimportant, price will only ever go up.
The bigger the bubble the more rental return is ignored and speculative price gains must be relied on to break even or make some money. The common theme yearly losses (rents not able to pay all holding costs) dont matter because well prices only ever go up. This also seems to foster the idea that no matter what, home ownership at any cost is always better the renting. Which of course as long as you own a calculator and know how to use it you can prove to yourself that this is clearly not true.

So how do we spot an inexperienced, math illiterate property speculator. Wait for them to say the fundamentals are strong, holding losses will be recovered from ever increasing prices, you know they only ever go up. Prices here double every (insert period). Rich people from Uranus will support prices. You will never hear them say “its a global credit bubble nothing more nothing less”.

What else have I learnt that Van has it bad, could be the delusional capital of Canada. Or is it that many there are smokin too much of the “wacky toobaky”.

Aussie update

love the first headline.

http://www.news.com.au/money/investing/how-to-spot-a-spruiker/story-e6frfmdr-1225963731743

Its OK Aussie banks are prepared for a house price crash. Thats funny their economists keep telling us its different here, there is no bubble, strong fundamentals, there is a shortage, rich Asians are on their way or some such rubbish.
http://www.theage.com.au/business/banks-ok-for-houseprice-dive-20101130-18ff4.html

Interest rates those nasty holding costs compared to income generated (or wages) makes the news again.
http://www.news.com.au/money/property/interest-rates-pressure-forces-house-sales/story-e6frfmd0-1225963682684

#12 Leanne on 12.01.10 at 12:05 am

“That’s your Calgary moment for today. What did you learn?”

He’s not really naked behind that guitar.

Is this the male version of MissyBunny?

I’m an equal opportunity exhibitionist. — Garth

#13 Jake the snake on 12.01.10 at 12:06 am

We’re in for one hell of a ride. The only currency worth its salt is guns and bullets. The weak will perish, the strong will thrive. And by weak, I mean physically weak, and by strong, I mean physically strong.

It’s funny how, try as we might as a civilization, things always come full circle.

#14 Devil's Advocate on 12.01.10 at 12:08 am

Be it CREA or anyone else, if you have to distort the facts or lie by ommission in order to be heard what ever it is you are saying is not worth hearing.

Truth prevails always and can not be manipulated to say anything other than what it is.

I am always open to the correcting of any error in fact I have made. — Garth

#15 nonplused on 12.01.10 at 12:13 am

If you mean Calgary is like Denver then I supposed it’s the most American city in Canada. Only without the roads. Funny, I always considered Toronto to be the most American city. Oh well, it’s the pot calling the kettle black in either case I suppose. (That’s “black” as in “stained by smoke from the cooking fire, unwashed, etc.”.)

Looking down the road to next summer, things in Cowtown could get a lot worse. Budgets aren’t exactly being slashed, because oil is going strong, but nobody can drill gas at a profit at this prices. Look for continued weakness in the labor market. Conoco just laid off a bunch of gas folks, and has a further eye on the accounting department. These are high value jobs that will have knock on affects in the community. I expect more to follow, and I don’t see how the price of gas (natural gas that runs your furnace, not the stuff that goes in your car) can come back up here until the US has need of our exports again. They are awash in this new shale gas, and also facing their own pricing problems.

Then if the world wide funding and bank solvency crises cause another economic air pocket, we, oil could get creamed again too.

#16 Devil's Advocate is an asshat on 12.01.10 at 12:21 am

’nuff said

peace out

#17 Dan in Victoria on 12.01.10 at 12:22 am

I was driving to work this morning, watching a few drones cut in and out of traffic all to get ahead one car length.
Got thinking on how everyone is so caught up in getting ahead.
You know that fancy car, the fancy house in the suburbs, arborite conter tops, chrome kitchen table…opps, granite counters, stainless appliances.
Anyhow some kid was standing at the traffic island, cold and probably hungry looking for a couple of bucks to get something.
What the hell I thought, flipped him my coffee money.
Then it occured to me.. he’s wealthier than all those people that were cutting me off on their rush to the cubicle.
His net worth is close to zero or on the plus side, hes got a couple of bucks.
The rest of them owe how many hundreds of thousands.
Hey Kid I shouted don’t drink the Kool-Aid, laughed and drove off.

#18 Devil's Advocate on 12.01.10 at 12:23 am

I am always open to the correcting of any error in fact I have made. — Garth

I never thought less. Although I noticed you used that “7.0% average down payment” comment again without qualification that it pertained only to first time buyers who financed their purchase.

But Garth, come on now, even in that post of mine you just censured you must have sensed the love bro? You know I respect you. And what would this blog be without a Devil’s Advocate. Come on now were good… right? ;-)

#19 GenXer on 12.01.10 at 12:23 am

Just when inflation looked like it might be back, our economy stumbled again – now below an annualized 1% growth rate. Unfortunately, looks like low rates will persist for a while longer, keeping house prices inflated through the new year.

http://www.theglobeandmail.com/report-on-business/economy/exports-to-us-crucial-to-canadian-recovery/

But David Rosenburg hasn’t ruled out a housing correction:

http://www.theglobeandmail.com/report-on-business/top-business-stories/david-rosenbergs-fears-housing-woe-currency-wars/article1817503/

#20 TaxHaven on 12.01.10 at 12:26 am

They’re ‘agents’, festering middlemen, largely non-productive leeches interfering in what should ideally be straight and unhampered contracts between willing and educated buyers and sellers.

You do them them too much credit calling them “realtors”…

#21 Sgt Bilko on 12.01.10 at 12:26 am

I’ve lived in Calgary a couple of times – owned both times. Calgary is indeed the most “American” city in Canada. Seems to me that conversations always come around to the value of one’s house…as if there were little else to talk about.
Having said that…It seems that this City is excruciatingly homogeneous and daily life is very routine. Everyone jumps on the freeways to get downtown at the same time, have lunch at the same time, jog the same trails at the same time – look the same, act the same, be the same then run back home to the OSB shacks at the same time.
It’s very Stepford. I’m convinced that when the SHTF on housing it’s all going to come down FAST because of the lack of diversity in that town.

#22 Bill Grable on 12.01.10 at 12:29 am

And you have to live in Calgary.

WOW.

Jello Shots all around for those cultured house flippers, and oil millionaires.

Laugh it up folks. The Band stopped two years ago, except you were too deaf to hear it.

Mr. Turner blows his air miles card to smithereens and it doesn’t matter – there are just some people that think having a lot of debt, and putting on a great show is the way to show you’ve made it.

Let them wait and see how many of us will put up with a bailout for their profligate lifestyle.

They want it both ways – well not this time, bunky.

Look to Ireland – Portugal, US, Greece, and a few other countries – the same stinky mess is about to wash up on YOUR front porch, and soon.

Ever heard of LIBOR?

What have you learned from Mr. Turner?

#23 Leanne on 12.01.10 at 12:31 am

By the sound of it, they’re going to need MisterBunny to get sales up in Calgary.

That might impact the guitar. — Garth

#24 Tim on 12.01.10 at 12:32 am

Hey come on, Calgary as a city has so much going for it other than jobs….uh….

#25 Amarillo on 12.01.10 at 12:32 am

(… deep sigh) I tried to Garthify a Calgary friend about 18 months ago, she was overinvested in RE. She gave me a patronizing bemused look that has since turned into a …(you fill in the rest).

#26 bridgepigeon on 12.01.10 at 12:34 am

he’s got a g string…

#27 DM in Calgary on 12.01.10 at 12:39 am

Looking at the listings in Calgary today I found a place in a neighborhood I like that is within 3x income range.

Couldn’t have found that 3 years ago. Not really interested in buying (rent vs buy costs not on equal footing, nosiree) – but on a lark called my bank mistress to see what we’d pre-approve for. 5x income. My goodness.

The place I have my eye on has been for sale for almost a year now. Vacant and quick closing available. I must say, I printed off Garth’s vulture advice and am thinking about it. Really lowballing them (listed at $399k, from $469k a year ago).

Or maybe I’ll wait til spring and pick from the carcasses then. No rush.

#28 Dodged-A-Bullit-in Alberta on 12.01.10 at 12:41 am

Greetings: “That’s your Calgary moment for today. What did you learn?” The dude is standing in the middle of the LRT { Light Rapid Transit} tracks in downtown Calgary. The city in its wisdom put these on the surface in the downtown core and up 36 street NE,, and south on Macleod trail, where they cause max traffic disruption, and did not plan the stations for expansion using longer trains. As a result, massive amounts of bucks to upgrade loading platforms to accept more rail cars. No heated terminals, and no washroom facilities nor any station concession stands. No LRT to the airport or the new hospital under construction in SE . City blew up a hospital before a replacement was constructed. Don”t forget the “artsy” bridge being built, but a shortage of low cost housing. List is endless!! Definition of Calgary= shithole!!!!

#29 xyz on 12.01.10 at 12:43 am

Just a curious and perhaps naive question but does anyone know the history of the birth of the Realturd?

More specifically, did it have an immediate impact on house prices or was it like a snowball that wound up on a very steep hill?

Cheers and happy renting!

#30 Steve on 12.01.10 at 12:43 am

What if the price of oil goes up? The oil sands is supposed to experience a resurgence soon.

#31 Wildroseblogger on 12.01.10 at 12:46 am

Calgary and Edmonton saw the first and quickest housing booms nationwide in 2004-2007 with the prices being pushed skywards by the commodities boom and the fact anyone with a pulse and the organizational skills to dress themselves and show up to work on time could make damn near twice what they could in any other province. Now that natural gas is trading in the $3-4 range, and the black gold rush has subsided, house prices have naturally been falling for two to three years. However, these markets will also be the first to find a support level, and the first to emerge from decline. We may be years from that point, but you can bet on Alberta’s ability to once again be the envy of the other provinces in terms of job creation and wages.

House prices, not accounting for the local livability multiplier (which is >1 in places like Vancouver and Toronto, and <1 in say Moose Jaw) are directly proportional to median household income and and inversely proportional to interest rates and credit standards. Since interest rates and credit standards are the same nationwide, the only local variant is income. Since the balance of economic power has started a permanent shift West, and since Alberta is and will continue to be the dominant focus of that power, this will be the first place to see prices catch bottom and begin to rise again. It would be even better if we could get rid of our inept, corrupt, and autocratic PC government before then so that we have a province worth salvaging by that point. But I digress… My point is I would rather own a median priced bungalow in decent area of Calgary or Edmonton than the same in any other city in the country. It's still going to have it's equity laid to waste in the next couple years, but it may not be as ruinous as other places.

An interesting story about my above claim that interest rates, credit ease and income (with a close eye on employment) are the only important factors to watch:
I know a truckdriver, we'll call him J, who back in 2000 started a decent paying job in Edmonton. J had a ten year plan to get rich, which everybody scoffed at in the coffee room at work, but which I paid careful attention to. You see, J was one of those rare people who could tell truth from bullshit, reality from delusion, and had a Spartan like attitude with more aggression than your average pitbul. The guy was basically an educated barbarian, and proud of announcing it. Anyway, J's plan was to make it big in Edmonton real estate (which he saw as undervalued at that time) by whatever means necessary, conventional rules be damned. He started with virtually zero equity and a $23/hour job. He bought his first house, waited for the price to appreciate, took the equity out, bought another, paid off some appraisers to over-value his house, took out more equity, etc etc. He was getting every family member whose arm he could twist to co-sign loans, he was working hand in hand with some shady realtors and shadier appraisers and mortgage brokers, who kept letting him suck more equity out of his places than he actually had and borrow more than he should ever have qualified for so he could invest in more RE. By 2005, he owned something like 10 houses and three four-plexes, all of which he was renting out for positive cash flow. By then the run-up in RE prices was in full swing, and his assets were ballooning. I ran into J in spring 2006 and asked him how many more places he was going to buy, and his answer changed the way I (then a naive 23 year old who had just bought my first house about six months before that) looked at the world. He said none, that he was divesting himself of everything except two of his four-plexes, because he knew the housing gig was up and couldn't go any further. He said, in a way that only a blue collar high school dropout with more street smarts than anyone I've ever met could, that your average guy makes 60K, average girl makes 40k, giving your average two income couple 100K per year. At current 2006 interest rates and 32% CMHC mortgage servicing ratios, and the current max amortization of 25years this meant, in J's mind, house prices could not go higher, and he was dumping everything. He was completely liquidated by fall of 2006, and walked away from it all with just under $2 million net worth, of which something like $1.2 million was cash. What he didn't count on was the extended amortization to 35 years that came in in summer 2006 (remember, credit standards) or he might have held on to 2007 and made a few more bucks. But, the bottom line is he called the end of the Edmonton housing boom long before any "economists" or realtors did, based on fundamentals, common sense, and an understanding of sustainability.

Just an interesting anecdote!

#32 Tim on 12.01.10 at 12:47 am

Steep Discounts Likely Part of Olympic Village
http://www.theglobeandmail.com/news/national/british-columbia/steep-discounts-likely-part-of-olympic-village-strategy-marketer-says/article1819796/

Surprise, surprise…This finally made the Globe and Mail. Steep discounts is an understatement. Though I believe in helping the homeless, I don’t think they should be able to live where I can’t afford to, even though I make over $75K. People won’t want to buy these units. Many of the windows face the opposite buildings east and west, so there will be very little light in most of the suites- can you say MOLD?

Renne, the condo weasel says they’ve removed the financial cloud. What do you mean Bob? The fact that the weasly developers are 70 million in hawk over another project in North Van? What rational individual would buy into such a money trap?

#33 Timing is Everything on 12.01.10 at 12:49 am

Garth said – “We don’t need a ‘crash’ to have serious consequences for people who bought houses with minimal downpayments…”

Agreed. There will be many bloody noses for these folks. Even worse for some of the more defenseless.

Garth…”nor for the ripples to affect everyone.”

Hunkered. Locked and loaded. (within reason)

Garth – “Don’t fall for that semantic sleight-of-hand.”

Roger that…folks may as well read the whole story though….You know, get your buddy Ben’s…full perspective.
————————————————————-

Place your bets….

http://business.financialpost.com/2010/11/30/us-manufacturing-sector-in-midst-of-renaissance/

#34 Brampton RE market crashing on 12.01.10 at 12:59 am

Looks like Brampton is crashing harder then the realtors want people to know September and October numbers are still not out. Word is sales have crashed over 60% but who knows since brampton real estate still have not put out the sales numbers. why? Spread the word Brampton is the first house of cards that is falling apart.

http://www.bramptonandarearealestate.com/2010_Residential.html

#35 Elmer on 12.01.10 at 1:02 am

Can you Aussies quit posting about Australia every day? This is a Canadian blog, we don’t care.

#36 yyc bubble on 12.01.10 at 1:03 am

Here is a story from the Calgary herald from 2008, it basically says that according to the REIN, housing in Alberta is great because the ‘Irish banks’ are buying here. So don’t worry, prices are going up here thanks to our Irish bankster friends.

Calgary resale market seen as ‘self cleaning’
Kathy McCormick. Calgary Herald. Calgary, Alta.:Mar 1, 2008. p. I.19
Abstract (Summary)
The huge inventory of condos under construction in the city right now — pegged at over 9,000 units by CMHC — could mean “stagnant demand” in the multi-family market, he says. “Prices might have to come down.”

Even so, people want the condo lifestyle, and that demand is increasing in Calgary as people move in from other centres where it’s one of the first choices, particularly from an affordable point of view, he says. “In Calgary, anywhere from 36- to 40 per cent of the average income before taxes goes to monthly payments for a mortgage for those buying real estate (a single-family home), whereas in Vancouver, it’s 72 per cent. Affordability is an issue.”

[Don Campbell]’s top spots to invest in real estate in Alberta, in order, are: Edmonton, Grande Prairie, Calgary, Red Deer, Sturgeon County and Strathcona County (tied), Lacombe and Sylvan Lake (tied), Okotoks and High River (tied), Devon and Fort McMurray (tied), St. Albert, Cochrane, and Lethbridge.

Full Text (595 words)
Copyright Southam Publications Inc. Mar 1, 2008

The residential real estate market in the city right now is “self-cleaning,” says one of the leaders in real estate investing in Canada.

“It shakes out the pretenders and allows long-term, as in five-to-seven year investors, to buy and succeed,” says Don Campbell, president of Canada’s Real Estate Investment Network (REIN), which has a membership of real estate investors across the country.

He provides advice and information on his website, http://www.realestate investingincanada.com, and has written three books on the real estate market.

His latest book, 51 Success Stories from Canadian Real Estate Investors (John Wiley and Sons Canada, Ltd., 2008), has just been released.

Based in Calgary, Campbell says the market was unsustainable and is simply “coming back to reality.”

Still buoyed by the Alberta economy, he sees the opportunities as price pressures have eased. “It’s a wonderful time to buy, especially in Edmonton,” says Campbell.

“Then just sit and wait. By 2010, it will be very good.”

In fact, Campbell’s list of the top places in Canada to invest in real estate long term have Edmonton at the top, followed by Grande Prairie, then Calgary.

“The top real estate drivers are people, who create demand, infrastructure to support that growth, and economics, which includes jobs and government supporting job creation.”

Alberta has it all, even if it’s not as strong as it has been, he says.

“International investors are definitely buying. Calgary and Edmonton real estate is hot in Europe and the U.S., more than I’ve ever seen before in all my years involved in real estate. The top banks in Ireland, for instance, are buying here. They see it as safe, secure and good for the long-term, compared to other options.”

While he says the number of sales won’t be anywhere near the record levels of the immediate past, “most cities in the world would cry for what is still forecast for here.”

Canada Mortgage and Housing Corp., in its housing outlook for 2008, is calling for 11,000 new home starts this year, including condo units.

That’s down from 13,505 total starts last year.

On the resale side, the forecast is for 30,500 homes in both single-family and multi-family categories to change hands over the year, compared to 33,304 last year.

The huge inventory of condos under construction in the city right now — pegged at over 9,000 units by CMHC — could mean “stagnant demand” in the multi-family market, he says. “Prices might have to come down.”

Even so, people want the condo lifestyle, and that demand is increasing in Calgary as people move in from other centres where it’s one of the first choices, particularly from an affordable point of view, he says. “In Calgary, anywhere from 36- to 40 per cent of the average income before taxes goes to monthly payments for a mortgage for those buying real estate (a single-family home), whereas in Vancouver, it’s 72 per cent. Affordability is an issue.”

Campbell’s top spots to invest in real estate in Alberta, in order, are: Edmonton, Grande Prairie, Calgary, Red Deer, Sturgeon County and Strathcona County (tied), Lacombe and Sylvan Lake (tied), Okotoks and High River (tied), Devon and Fort McMurray (tied), St. Albert, Cochrane, and Lethbridge.

In Canada, the first three remain the same — Edmonton, Grande Prairie and Calgary — then the Ontario triangle of Kitchener, Waterloo and Cambridge, followed by Red Deer, Brantford and Hamilton, Ontario, Strathcona and Sturgeon Counties in Alberta, Lacombe, and Sylvan Lake.

#37 Got A Watch on 12.01.10 at 1:07 am

The contagion has reached the core nations of Europe now, even German Bunds are seeing CDS rising. Italy, 7th largest economy on the planet, is now directly in the firing line. Portugal and Spain are burning as the fire blazes out of control.

Four days ago, it was all about Ireland, other potential bailouts were deemed to be looming, but not yet critical.
Now the contagion has reached Italian and even German Bunds. At this rate, the Euro project might not last till Christmas.

“Barge-pole, European debt – no thank you”:

“Why, oh why, are European bond yields zooming higher on Tuesday? [and Wed, and Thurs….]

Well, Deutsche Bank’s global markets research team has been asking around, and it seems the answer is that no one in the market is currently willing to take them on at any cost.

Simply, there is no liquidity. Which brings about certain shades of the subprime-related liquidity crisis of err, 2008, no less.

Furthermore, as Deutsche’s team also points out, the contagion is now spreading into the corporate arena…”

“Infected – German Bunds”:

“Is nothing immune from the sovereign debt woes of the European periphery?

Apparently not….”

“The SMP to the rescue?”:

“Thursday’s ECB meeting is taking on increased importance as tensions in the eurozone show no signs of easing….Indeed, it’s becoming clear that many investors have lost faith in the EMU project and that market confidence can only be restored if there is a strong and forceful response from EU policymakers…one possible problem with this strategy, [ECB buys everyone’s Bonds] say analysts, is that it is very difficult to persuade banks to sell out of bonds held on their banking books because if forces them to crystallize a loss.”

“It’s a much bigger US $ squeeze this time”:

“There’s been a lot of talk about dollar squeezes this week.

But it’s BNP Paribas who really explain the issue well on Tuesday. As they point out (in their daily FX strategy note) the prospect of quantitative easing in the third quarter led to a significant rally in ‘pro-cyclical and commodity currencies’ as investors prepared for potential dollar debasement.

What all these trades had in common was that they were all mostly dollar funded.

The unexpected dollar rally, therefore, is most likely causing a whole lot of pain in the market…. In summer 2008 it had been European banks running an unfunded USD short position (bank asset position in the US funded in CHF, EUR, GBP), which the BIS estimated at that time at USD600bln. The potential USD short position the market potentially faces these days is much bigger.

And here, for clarity, is the current mismatch between the current net foreign liability position of US banks and the EURUSD — or what BNP Paribas describes as US banks’ funding of the global carry trade…”

“The Euro job”:

“As we conveyed earlier, the single fact which has critically changed the nature of the current European debt crisis is the spread of contagion into the Italian government bond market…

“S&P downgrades Portugal” Wed night.

Tyler at Zero Hedge [on tracking exactly who owes who what in Europe, they all owe each other]:

“It really doesn’t matter who owns what. If even one bond is impaired, the cross default will take down the entire edifice. Which is why we don’t bother with these silly tables. The entire liability side of the European bank balance sheet is also the asset side of the European bank balance sheet. That is all one needs to know.”

If 1 haircut is taken, they all get headshaved. And the European financial system instantly implodes, there aren’t enough digital zeroes that can be created to failout that. Events are rapidly coming to an inflection point here. And it will be highly deflationary in it’s implications, due to the interconnected nature of global Bank “debts”, like the failure of Lehman X 10,000.

#38 hobbitt on 12.01.10 at 1:08 am

#167 Lonely Limey on 11.30.10 at 6:18 pm
@ #137

“Lonely Limey and hobbit, from yesterday; you sounded like my relatives”

—————————————-

That’s so weird, his mrs said the same to me last night
——————————–
-===============================
Actually, I’m gay, and I wondered why he didn’t come home that night!

#39 Pat on 12.01.10 at 1:12 am

“I am always open to the correcting of any error in fact I have made.” — Garth

Now I suspect you’re religious

#40 bruce on 12.01.10 at 1:18 am

The real Truth…Dont be fooled its here in Canada now

http://www.youtube.com/watch?v=ccHTfTpLWhE&feature=related

#41 Taxpayer like everyone else on 12.01.10 at 1:25 am

21 Sgt B/24 Tim

I lived in Calgary for a few years in the 80s. I felt similar
vibes and had similar experiences. Interesting that it just
wasnt me.

Where is “Calgary Rocks” these days?

#42 Ghost of Tom Joad on 12.01.10 at 1:28 am

Americans Trample One Another To Get Their Hands On Cheap Foreign-Made Plastic Crap:

http://www.infowars.com/americans-trample-one-another-to-get-their-hands-on-cheap-foreign-made-plastic-crap/

#43 dark sad person on 12.01.10 at 1:32 am

#13 Jake the snake on 12.01.10 at 12:06 am

We’re in for one hell of a ride. The only currency worth its salt is guns and bullets. The weak will perish, the strong will thrive. And by weak, I mean physically weak, and by strong, I mean physically strong.

*****************

Nope-it will be those who can adapt to change the fastest-

It’s always been that way-since we crawled out of the sea-in one form or the other-

Ask the Dinosaurs who were the strongest (physically)

#44 Jacob on 12.01.10 at 1:33 am

History repeats itself. We could not set sell a house in Calgary in the recession of 1982, and even had a problem renting it out while we moved to Yukon in November 1983 for work with the Government of Yukon. Calgary was emptying at that time. We only sold the house in 1991 – and perhaps broke even.

#45 Nebbio on 12.01.10 at 1:34 am

Fantino is a member of Parliament. Isn’t that worse than any housing collapse?

#46 HouseBuster on 12.01.10 at 1:35 am

Had a conversation with a guy at work today. He is nearing retirement and we discussed housing. He’s currently living in a condo in Toronto and said he was afraid to move to a house because he wasn’t sure what would happen to the value of it. Putting money into a depreciating asset would be a big mistake.

He said he already went through the housing bust of the late 80’s early 90’s and did not want to be part of another one especially being so close to retirement.

I couldn’t believe it… someone with common sense!

#47 Ted 23 on 12.01.10 at 1:37 am

They’re ‘agents’, festering middlemen, largely non-productive leeches interfering in what should ideally be straight and unhampered contracts between willing and educated buyers and sellers.

You do them them too much credit calling them “realtors”…

Assuming Realtor can put two words together in a sentence that makes sense. How about you TaxHaven

#48 AxeHead on 12.01.10 at 1:38 am

I live in Calgary. It is indeed very American, conservative, entrepreneurial, contemporary, trucks for everyone, steak and potatoes place. I grew up in Ontario – very liberal and left wing – not as leftist/marxist as BC though.

Prices are waaay to high, leftover from soaring prices 3 years ago, dipped a bit last year, but probably twice as high as they were 6 years ago.

Oil is going to go up but it won’t affect this city as much as natural gas pricing will. I think it’s a long, slow, burn down for housing…painfully slow for sellers and buyers.

#49 45north on 12.01.10 at 1:40 am

JSan: We haven’t even seen anything close to high interest rates yet. This is truly the calm before the storm.

that’s my feeling

Another Albertan: talking about someone from Calgary: They’ll be burning through thousands every month keeping that acreage “alive”, on top of the cost of living in Moscow.

This isn’t death by a thousand cuts. It’s death by a hundred cuts.

too bad he’s got the ranch in Alberta, otherwise he could just have a good time in Russia

Sgt Bilko: Sergeant Bilko! I remember Sergeant Bilko:
http://en.wikipedia.org/wiki/Sergeant_Bilko

As I said in previous posts it’s no fun trying to sell a house you have to sell.

#50 AxeHead on 12.01.10 at 1:40 am

By the way, it was -35 C last week. I hope that guy wasn’t standing on 7th ave then, if the cold didn’t get him then the C train should have.

#51 Alberta Ed on 12.01.10 at 1:46 am

Funny how the MSM in Calgary hasn’t reported the latest significant layoffs at big gas companies.

#52 mab on 12.01.10 at 1:48 am

Home prices falling faster in most metro areas

Record number of foreclosures and weak demand pulls home prices down in major US cities

Millions of foreclosures and weak demand from buyers are forcing home prices down in most major U.S. cities.

Prices are falling even in places like San Francisco and San Diego, which had posted strong increases just a few months ago.

http://finance.yahoo.com/news/Home-prices-falling-faster-in-apf-3347844156.html?x=0&sec=topStories&pos=6&asset=&ccode=

#53 Patz on 12.01.10 at 2:02 am

To borrow from James Howard Kunstler, Ireland’s been told to bend over and pick up the bar of soap. They’re not so sure they wanna and might just pull their shiv instead. There will be blood. So look across the pond; give a thought for your Irish brothers and sisters and pray it’s not your fate. But take out a mortgage in Vancouver and it will be. Sure an’ begorah!

#54 Dan in Victoria on 12.01.10 at 2:04 am

12 Days of Christmas now costs 100K
Oh well I’ll be ready to shop at noon on the 24th.

http://www.npr.org/templates/story/story.php?storyId=131656781

#55 Junius on 12.01.10 at 2:06 am

Garth,

I doubt that Miss Bunny will be satisfied with an acoustic 6 string. I suspect she prefers electric. Or 24 carats.

#56 Mature Student on 12.01.10 at 2:11 am

Love the pic, Garth. There’s been plenty of mud-covered ladies on the site, so happy to see the scales are tipped in favour of all us “mamma bears.”

Yeehaw cowboy!

#57 dd on 12.01.10 at 2:16 am

…Case-Shiller home price index was released, showing new price declines in 18 of 20 major metro areas. Prices were down .08% in September….

And that is why any talk about “don’t bet against the US or US dollar” is just talk. Just like the comment by Diane Scott above. It is based on nothing.

#58 Burnt Norton on 12.01.10 at 2:29 am

#126 Devore on 11.30.10 at 2:49 pm

Where is it written that anyone should be able to buy a house anywhere they like?

If someone can’t afford to buy a place in a certain city or area then they can choose to rent unless they want to move somewhere they can afford to buy or find a way to make enough money to buy a place in the location of their choice. Europeans and New Yorkers have been used to this for a long time now.

It’s like someone whining about the injustice of not being able to afford a Ferrari even though his great grandparents were born in Italy.

#59 vreaa on 12.01.10 at 2:29 am

Olympian Marketing Task – “I’ve set a target of selling 100 units by June. Everything is now on the table. It has become a do-right or die effort.”

http://wp.me/pcq1o-1AU

Also:
Read about the Olympian project that took years of construction, gained cult focus, had short lived glory, suffered shoddy construction, and ended up a ‘major tourist attraction’.

#60 SophieZombie on 12.01.10 at 2:29 am

Devil’s Advocate is getting more aggressive and ruder than ever. Bitter as a self-employed who should be on EI now, but who can’t claim because he did not contributed during the good time. Maybe DA will start to have a REAL job soon! Or maybe I just saw him at the Drive Through an hour ago and he asked me if I needed plastic utensils? Don’t worry, be happy man! Happiness is easy, the market will always go up … You told us that for so long ! Why are you so angry suddenly ? I wonder …
My theory : you are secretly S&M: why a Realtard would write on this blog for so long?

Spank from a Zombie if it makes you feel better.

#61 Nostradamus Le Mad Vlad on 12.01.10 at 2:32 am

-
“. . . sprinkling the fairy dust of false hope. She bases that on, well, nothing.” — Fairy dust? Isn’t nothing A Whiter Shade Of BrownPoop?

“Why Calgary?” — Why not? It’s just another city, and they are all cookie cutters, a dime a dozen!

So the prices of SFH and condos, like Bre-X and Nortel, went up too far and much too quickly without bothering to check whether a parachute was required for landing.

The higher one flies, the harder one falls.
*
ZZ Top and Tone Loc The worldwide RE markets need a huge injection of Funky Cold Medina!

Too big to fail becomes too big to bail.

Links in. Bill S-510 and Monsanto. BTW, what are the CPC doing (in synch) with their bills to end natural health food stores and the like?

8:55 clip Carbon science stuff — The Secret of Secrets.

Portugal insolvent and Universal dumping of Spain.

Rosenberg’s View “Gold has emerged as a reserve currency . . .”

Death by Debt “Christmas is a time when kids tell Santa what they want and adults pay for it. Deficits are when adults tell the government what they want — and their kids pay for it.”

US housing Sales dry up — nobody is spending, hardly anyone is building.

#62 Chris in Langley on 12.01.10 at 2:37 am

How to be just like the Devil’s Advocate,

1. Begin by writing to Garth about how the world is insane, there is no point to Garth educating people, blabber a lot and basically act like an ass. (1 week ago)

2. Follow it up over the next several days with some rather well structured and well thought out posts, that come as a result of it being pointed out he is once again behaving foolishly.

3. Increase the velocity of these posts.

4. Begin to try and take over the direction of the blog by challenging Garth over his strongly held beliefs.

5. When Garth doesn’t take the bait, get angry.

6. Call people names like…asshole. (Yesterday)

7. Then have Garth respond with “Your arguments were more cogent before you became abusive. — Garth”

8. State that “Truth prevails always and can not be manipulated to say anything other than what it is.”

9. Once kindly reprimanded by Garth, revert to the fetal position with “But Garth, come on now, even in that post of mine you just censured you must have sensed the love bro? You know I respect you. And what would this blog be without a Devil’s Advocate. Come on now were good… right?”

10. Completely try to ignore the fact that your poor behaviour is a regular problem that you claim to be willing to clean up, but never do.

11. Talk about integrity.

12. Ignore the fact that you made a public statement of accountability several months ago that you asked people to hold you to.

13. Break your promises.

14. Look like an hypocrite.

15 Repeat the process over many months.

Follow these 15 steps if you want to become as unstable as the Devil’s Advocate.

P.S. – Remember what DA said – “Truth prevails always and can not be manipulated to say anything other than what it is.”

You will be a man of integrity just like him…and very self aware too!

#63 Mister Obvious on 12.01.10 at 2:43 am

Soon “The Calgary Stampede” will take on a whole new meaning.

#64 Edmontonian on 12.01.10 at 2:47 am

I can say from personal experience Edmonton is close to Calgary, but prices are historically and currently always a little less price as the average income in Edmonton is lower.
I have a friend and 2 co-workers who bought near the top of the housing prices in spring 2007here in Edmonton. One is renting the house out and can afford to take a little loss every month. The other two are heading for Bankcruptcy. The rental prices have plunged here in Edmonton since they’ve overbuilt so much in the city and they just can’t can’t a renter anymore even after several reductions in the rent.
It pretty sad to see a friend pay $2400.00 a month in condo fees, taxes and mortgage on a $400,000 “luxury condo” that he bought that can only be rented for $1300 a month, and is only worth about $320,000 now!
I agree with this article the RE market is set to go off a cliff! Sure, maybe it won’t plunge 70% like it did in ome areas of the USA, but down another $100,000 for a SFH and $80,000 for a condo? I don’t doubt it!

#65 poco on 12.01.10 at 2:54 am

#18 DA–But Garth,come on now blah blah blah— you know i respect you. And what would this blog be without a Devil’s Advocate. Come on now were good… right?

you are such a “friggin wimp”—-you know that if you every got yourself banned from posting on this blog because of the crap you spew, the shotgun you referred to earlier would be stuck in your mouth!!!

This blog consumes you–24hrs a day–get a life man–do something useful–get a job–i mean a real job

#66 TheBestPlaceonEarth on 12.01.10 at 3:16 am

Park your car on the East Side of Calgary and get out your binoculars. On a clear day you can see straight to Winnipeg. Land for as far as the eye can see. Calgary, Down She Goes. Fair price for a house there would be around 80k not a penny more.

#67 Stampede Sam on 12.01.10 at 3:28 am

Things must be bad for RE in Calgary. The msm is even reporting on it.

javascript:changeVideo(”,’CFCN1130_hampton2′,’00:00:00.00′,’00:02:25.00′,’382765′,’6′)

javascript:changeVideo(”,’CFCN1130_home’,’00:00:00.00′,’00:02:09.00′,’382591′,’16’)

#68 Sasquatch on 12.01.10 at 3:29 am

Just finished apartment hunting in Calgary. Lots of places available, as in very many. from looking at fifteen places in three days there is desperation in the air. Got offered a number of “signing deals” like first month free/parking discounts.

It really became apparent when the property managers call back a week later asking if you still want the place. Remember that 5 years ago people were getting jobs, but could not find a place to stay. The homeless shelters in Calgary were jammed with working stiffs.

It’s starting to look bad for the professional rental property people, just think what that means for Joe six-pack renting to mole-men in the basement. Here’s a reference point to those outside Cowtown:

2005-2006 one bedroom apt. $700.00-1000.00, room for rent $500.00

2010 two bedroom apt. $900.00 with 1000sqf. and hard wood floors. Average is 800sqf. with carpet/vinyl.

Garth has mentioned before that those who cannot sell will rent. between apt blocks, condos, and private options all starving at once it will become significantly cheaper to rent.

Who knows though, if every one is in tough times then finding renters may not be too hard. Then again I found the aroma of despair is musky with a hint of mildew.

Friendly neighborhood Sasquatch

#69 Lynn on 12.01.10 at 3:45 am

Back in 2006 I was told to buy property. Take out an equity loan to purchase additional property. I exclaimed, “how can you take out an equity loan on a recent purchase?” You see I was of the mind one “built” up equity after a decade or so. I thought the dude was nuts. But what do I know, I’m a renter that has two nickels to rub together.
LOL

#70 The Original Dave on 12.01.10 at 3:49 am

Here’s a warning for you people. Do not bother trying to argue against Dark Sad Person in regards to inflation/deflation. He knows his stuff better than anyone on here in regards to that topic. Your best bet is to ask questions. He is so bang on about deflation and has all the historical references to back up his points. The guy has done his homework. I’ve done my homework in regards to that topic, but I would never challenge him…just ask questions folks

#71 Waiting in Vancouver on 12.01.10 at 3:52 am

Wow! How hot is he?! Who cares about real estate?

#72 John on 12.01.10 at 4:42 am

A couple years back, Alberta is where you go if you couldn’t get a job anywhere else. They would employ anybody. Where do you go today? Booming Newfoundland? So long Danny and thanks for all the fish! (tumbleweed….lol)

#73 Flip Flop Vancouver on 12.01.10 at 4:44 am

mmmm…..

In Vancouver, aka crash ground zero, we have had over 100 percent list sell days for the past month, and its only November. We are back to multiple offers and over ask sales. Spring is going to be on fire.

The market has come back with a resurgence, and we are on track for a sales month that will be similar to the rest of the Novembers during the bull years.

Wow, Vancouver bears have been wrong for so long it must really hurt.

As for the Asian factor, yes, everyone with two eyes and half a brain can see that the offshore investment factor is real.

When 78% of the over 2 million dollar homes are being sold to asians, it is pretty clear that they are supporting the market (and yes, that is a real number, albeit from remax).

Gee, its hardly a surprise as Vancouver prices have gone pretty much up since the mid 80s, which correlates nicely with the beginning, and continuation, of the asian influx into Vancouver.

As long as offshore asian money, and asian immigrants come to Vancouver, prices are not going down.

While the rest of the bears patiently rent, and squirrel away the meagre difference between renting and buying, asians in Vancouver are easily amassing their down payments.

Keep in mind that renting is HUGELY stigmatized within the asian community. Asian children stay at home, with no costs, until they are married. Asian children DO NOT rent, preferring not to waste their money on rent, all the while amassing their down payments. It is not rocket science – even when earning average pay, the stay at home potential first time asian buyer can get a much bigger down payment much faster then those renting.

Also, extended family immigrants all pool their resources to buy real estate with the asian community. Four individuals working average jobs can pay off a home much faster than a high income couple. They are more prone to buy investment properties with little down payments as well.

Sorry bears, but the norms, values and traditions of the soon to be dominant group in Vancouver trump those of the soon to be minority group in Vancouver. This demographic does not share in the traditional idea of going out on one’s own, renting a crappy apartment, deferring gratification, and struggling to amass a down payment. Instead, it is much smarter to live at home, not have any bills, and amass a massive DP that allows you to pay off your mortgage faster, and leverage your equity quicker for another property.

But hey, its not like I am pontificating the effect of asian buyers in a local market 3000 miles away from the action. Lol.

Vancouver bears better realize that there has been, and continues to be, a demographic and cultural shift. If you don’t want to buy into this new normative order, time to leave.

#74 RoninBC on 12.01.10 at 5:08 am

No sign of residential construction slowing down in the greater Vancouver area. Cranes everywhere. I’m seeing more and more “sold” signs.

As I see it, the only way this area will be affordable is when prices drop 20-50% but this ain’t going to happen. It will ALWAYS be expensive here.

Unless you’re in this market now or inherit a lot of money, it’ll be next to impossible to buy into it.

People around the world love Vancouver. Don’t make me laugh by comparing it to Cowtown or Toronto.

#75 Ottawahouse on 12.01.10 at 5:42 am

What did I learn?
I learned that in 1990 there was a sharp decrease in housing after a large run up in prices, then recovered, maybe it took a long time. but……..

So my dumb question is this time different?

Lets say you bought a house in the last 3 years. Again my example I paid $300,000 and one recently sold for $450,000 5 doors down in a few weeks. (Identical)

If my house drops 10 % that’s $45K, 20 % 90K, 30% 135K 40% 180K. my point is I am still in good shape.
I will not have negative equity. my mortgage last year was $200,000 So more than a 50% drop before negative equity.

Now I have no mortgage. and I live rent free for the rest of my life.

Yes I still agree with Garth who told me weeks ago sell and take the gain and invest and live rent free I know he’s right, but…….

Now my really dumb question? How many people will really have negative equity? if housing drops?
10% 20%? 30%

I would say 80% or 90% of Canadians are probably in the same boat as me. SO what?

Garth you cite over and over again that 10% are unemployed But 90% are still working!

I guess my long winded point is the majority of Canadians will survive this pull back. You need to examine your own finances and figure out whats best for you.

I still think the majority of Canadians pay less in mortgage payments and property taxes than renters. and over the long term 20 years or more RE is still better than renting. But its an emotional decision now.

And if I am right all the smart people who will buy after the pull back will be really better off in 20 years than renters!
Is Canada Different than USA? only time will tell.

Personal financial decisions should not be made by a blog, you should consult a professional and look at all your options before buying a house and investing in stocks.

then again 99% of Canadians will spend less time looking at a house then they do buying a Christmas gift for their spouse.

Unless your a man who shops Christmas eve 5 minutes before closing time.

you have been warned 24 shopping days till the jolly big guy comes singing ho ho ho.

Your Financial tip for today do not charge your Christmas gifts, unless you have the cash in the bank.

#76 Ottawahouse on 12.01.10 at 5:45 am

Not sure if this link was posted before,
Housing bubble has some really nice charts and all in one spot.

http://canadabubble.com/charts/1333-uk-australia-us-and-canada-50-year-home-price-chart.html

#77 Ottawahouse on 12.01.10 at 5:49 am

And now the girls cannot complain about the picture!

Mind you Garth to go with your writings he should be looking down and not up.

Just curious how many women asked …….I wonder whats under those strings?

#78 Aussie Roy on 12.01.10 at 6:09 am

Aussie Roys – song for the Speculators.

Addicted to gains (love – Robert Palmer)

Your lights are on, but you’re not home
Your mind is not your own
Your heart sweats, your body shakes
more gains is what it takes

You can’t sleep, you can’t eat
There’s no doubt, you’re in deep
Your throat is tight, you can’t breathe
more gains is all you need

Whoa, you like to think that you’re immune to the stuff, oh
yeah

It’s closer to the truth to say you can’t get enough, you
know you’re

Gonna have to face it, you’re addicted to gains

You see the signs, but you can’t read
You’re runnin’ at a different speed
You heart beats in double time
more gains and you’ll be mine, a one track mind

You can’t be saved
Oblivion is all you crave
If there’s some left for you
You don’t mind if you do

Whoa, you like to think that you’re immune to the stuff, oh
yeah

It’s closer to the truth to say you can’t get enough, you
know you’re

Gonna have to face it, you’re addicted to gains

Might as well face it, you’re addicted to gains
Might as well face it, you’re addicted to gains
Might as well face it, you’re addicted to gains
Might as well face it, you’re addicted to gains
Might as well face it, you’re addicted to gains

Scary didnt even have to change many words. LOL

http://www.youtube.com/watch?v=XcATvu5f9vE

#79 Aussie Roy on 12.01.10 at 6:52 am

To be perfectly clear gains is Speculative gains – house only ever go up, double every X years.

Im sure most got the connection.

#80 Incognito on 12.01.10 at 7:52 am

Calgary WAS such a great place to live in 12 years ago, that was before the boom, before the debt=wealth attitude, before it mattered where you lived or how much your house was worth, at time when anyone felt they could “make it” there.

Calgary has grown, but the attitudes have grown as well, it’s not as fun, young or hip of a place to be as it was. Calgary used to be the big town with the small town feel.

I’m still hoping Calgary goes back to the “old ways” but I guess nothing ever does.

Calgary now feels little different than Toronto or Vancouver.

CALGARY HOUSE PRICES and SALES

Garth has it perfectly right. With extremely low sales numbers the average and median prices have been skewed so much they are almost meaningless. Under 900 SFH sales in a city of over a million isn’t enough data. If home buyers are smart, they will NOT BUY till things find their way down.

Everything has a time and place to buy and sell. Right now, the smart money sold and is selling Real Estate, the dumb money is buying.

“You are smarter than you think (don’t buy a home right now)”

#81 Ben on 12.01.10 at 8:08 am

#23 Leanne on 12.01.10 at 12:31 am

We know you want Mr. Guitar, still looking at him at 12:30 am. lol

#82 Ben on 12.01.10 at 8:32 am

#184 Devil’s Advocate on 11.30.10 at 8:24 pm

I don’t think my assumptions are far off regarding NSF boy. Why?… I know he makes sh$t as a junior tech, maybe $25 an hour tops! The Chinese company we work for doesn’t pay sh$t and their not renewing my contract at year end because I cost to much at $40 an hour.
My assumption my be a tad off on NSF boys half mil box in the sky, he might be $400,000 in the hole for it. That black Beamer he drives was definitely purchased with the ATM box in the sky and he’s total 2% variable. God help him when interest rates go back to their historical norms… he’s totally f$%&ed!
It’s not hard to figure out that 1+1 doesn’t = 3 when NSF boy uses a debit card to buy a Junior Whopper and is refused for Non Sufficient Funds.
NSF boy is living a show on total credit!

#83 Cow Man on 12.01.10 at 8:39 am

Housing is not going to be saved by low interest rates. Is it not more likely that low interest returns will force seniors to sell sooner than the demographics would normally dictate? Regardless of Garth’s advise, most seniors are, and have been for a long time GIC investors. Reverse mortgage returns are not high enough to keep them in their homes. Extra supply means lower prices. The emergency interest rates have screwed the savers, and in due course will they not facilitate a house price decline after stimulating it on the way up ?

#84 David B on 12.01.10 at 8:54 am

Never happen in Calgary “NEVER” becuase King Steve will not allow it, the west is in and Ottawa will start the money printing presses and send cash west on demand.

That will dive housing prices up again … everyone will be happy happy and cowboys and cowgirls and their appointed Senators will sing “Long Live King Steve” hey he may even build em a new jail house to boot.

Really?

#85 Brian1 on 12.01.10 at 8:58 am

I think that if rich Chinese are buying in Vancover it is only for one reason, as a place to escape to if China fails. It is why many I know came to Toronto over the last thirty years, maybe more. That shows real faith in
China, don’t you think?

#86 Love this Blog on 12.01.10 at 8:59 am

#73 Ron in BC
People around the world LOVE Vancouver!! LMFAO!!
You people out there really are delusional. Fruitcakes! How are the Millennium Waters units selling thes days??

Vancouver (the place EVERYONE loves) is going to take a real shit-kicking on those, eh Ron?

#87 Leanne on 12.01.10 at 9:11 am

#80 Ben

That’s not the biggest guitar I’ve ever seen ;-)

#88 bigrider on 12.01.10 at 9:13 am

10 years + of rising real estate prices and public ownership levels of RE at all time highs= strong possibility of declines.

10 years + of difficult equity markets with two crashes in said 10 year period ,continued net outflow of retail buyer from equities and indexes below previous all-time highs achieved 10+years ago=strong possibility of continued gains.

Enough said.

#89 Aussie Roy on 12.01.10 at 9:13 am

Ottawahouse on 12.01.10 at 5:42 am

Valid points

Now my really dumb question? How many people will really have negative equity? if housing drops?
10% 20%? 30%

That depends how many people have used the equity in their homes like a ATM. Or how many have used it to leverage up into say an investment property.

Garth you cite over and over again that 10% are unemployed But 90% are still working!

Using that logic the Great depression was a walk in the park what 70 – 75% still working. You forget the fear of lossing your job even if you are not really at risk changes your spending habits (emotions). So even the 75% that are employed their emotions have an affect on demand.

As far as housing prices are concern try to compare prices as a multiple of annual income at that time (peak) 1990? and see how many times annual income prices fell to (low). You will find house prices recovered along the same rate as incomes rose during the recovery.
Or
What is the average household income in your area, how many times income is that 450k house. Or what would be the rental return if you rented the place. I will probably get shouted down saying this but my life time rule of thumb to when to purchase an investment property is Annual rent times by 12 (this equals a 8% return on captial a safe 100 year long term average). Why this figure because you can subject this price to just about any economic event and it proves to be quite robust. Of course a 10% return is even more of a robust, stable price.

Once you have the above info you could then see what the POTENTIAL losses could be. This is a risk assesment not a prediction.

Actually while writting this reply you have reminded me that all markets are a balance of math and emotion. So you must consider changes to both. Most of the bulls work on the positve emotions (little things like income to price ratio or rental return is not important as you can see by many comments here) that have been present for many years and totally ignore the math. To get a balance you must consider both sides of the coin not just one.

#90 Susan from London area on 12.01.10 at 9:29 am

This picture held my attention for quite sometime, memories of Calgary ran threw my mind. I pondered many questions, then I realized what had caught my eye.
Dam, nice Boots. Okay now on to the text…..

#91 eddy on 12.01.10 at 9:46 am

Kill the banks

http://www.youtube.com/watch?v=-Uop5R7E314&feature=player_embedded

#92 CTO on 12.01.10 at 9:50 am

#74 Ottawahouse

My friend, havn’t you seen? The rules have changed in the last 5 years of real estate. There is a huge difference between the people buying houses today from the people buying houses in 1985.

-Majority are 5% down
-35 year ams
-Interest rates at lhe lowest they can possibly go.
-House prices at 4-9 times income
-Systemic unemployment as a result of our neighbours Housing Crash
-Hoouses S of the border at 1/2 to 1/3 $ of ours.

In the 1980s the employment in this country supported a buyer of a house paying 18% interest! THE FUNDEMENTALS WERE CORRECT, yet in 1990 the market still corrected because house $ were run up too high. The only way that they could feed the housing market was by chnging the rules.

#93 Lonely Limey on 12.01.10 at 9:51 am

@ hobbitt #37

That’s so weird, his mrs said the same to me last night
——————————–
-===============================
Actually, I’m gay, and I wondered why he didn’t come home that night!

————————————-

Good job I’m a woman and straightened him out for you.

#94 seemac on 12.01.10 at 9:51 am

Cardel?

Jayman?

Who?

#95 Throwstone on 12.01.10 at 9:59 am

This is interesting….

http://www.financialpost.com/personal-finance/rules+borderline+borrowers/3907750/story.html

#96 rower on 12.01.10 at 10:13 am

Wooo-weee, that’s some nice eye candy!

I’ll fall for it and ignore the scene behind him of a city teetering on the edge.

The naked truth isn’t nearly as nice to look at.

Love his boots. Do you have boots like that, Garth?

Those are pansy boots. — Garth

#97 CalgaryGirl on 12.01.10 at 10:17 am

Garth, You forgot to talk about condos in Calgary. Our friends have never sold – it has been well over a year and one has dropped the price below what they paid. Nothing. They do not even get folks looking at them.

What a nightmare to be in.

#98 Jsan on 12.01.10 at 10:36 am

#30 Steve on 12.01.10 at 12:43 am

What if the price of oil goes up? The oil sands is supposed to experience a resurgence soon.

====================================

With the latest Oil royalties do you know how much Alberta makes on their Bitumen (Oil Sands) Oil? I had heard only 4%. That might explain why our deficit is going to be over 5 Billion this year even at these very high oil prices.

Alberta is running out of the light, highly profitable oil. That’s why we are trying to squeeze oil out of Tar. Alberta’s real bread and butter is Natural Gas. Unfortunately over just the last few years we have gone from being one of the few large suppliers of Nat gas in North America to being a very small player. The US has discovered how to get gas out of their shale deposits and now have a MASSIVE supply of their own. They went from having nothing a decade ago and plans to actually build import docks to ship it in to having at minimum a Century supply at today’s usage rates.

This is what will most likely keep prices at these very low levels and will impact Alberta’s prosperity negatively for many years in my opinion.

http://online.wsj.com/article/SB124104549891270585.html

.

#99 DiGiacomo on 12.01.10 at 10:45 am

#67 Sasquatch on 12.01.10 at 3:29 am

…Garth has mentioned before that those who cannot sell will rent. between apt blocks, condos, and private options all starving at once it will become significantly cheaper to rent….

——————-

as well the upcoming “legalization” of secondary suites will put even more rental inventory on the market

I’d say accurate observation in your post, I’m seeing the same thing (currently renting in the DT for about 20% more than what my condo fees / taxes / insurance / expenses were)

#100 Leanne on 12.01.10 at 10:49 am

Those are pansy boots. — Garth

I agree…I doubt city boy would survive very long dressed like that in Cowtown.

He’s probably looking for his next sugar mama…

Okay, back to real estate now.

#101 CTO on 12.01.10 at 10:55 am

#73 RoninBC

My nephew in T.O has two condo’s purches based on nothing. When asked what makes Toronto better than Van, he says Van doesn’t even hold a candle to T.O.
He says Van is just a back woods BC town with NO jobs or commerce!

I told him people in Phenix thought the same way about any large Canadian cities.

Don’t make the mistake of thinking that your beloved City is Utopia, and demands prices higher that the fundementals can afford! It’l be a hard lesson!

#102 Over-50-Health.com on 12.01.10 at 10:58 am

I live just outside Vancouver.

I have been waiting for prices here to correct for years.

For the life of me, I don’t understand how the average income earner can spend so much money on housing.

Surely, at some point real math must prevail and these prices will come back to a more reasonable level.

I thought it would have happened before. When it does – it will be ugly.

Boomers are going to feel it especially hard.

#103 Devil's Advocate on 12.01.10 at 10:59 am

#20 TaxHaven on 12.01.10 at 12:26 am

They’re ‘agents’, festering middlemen, largely non-productive leeches interfering in what should ideally be straight and unhampered contracts between willing and educated buyers and sellers.

You do them them too much credit calling them “realtors”…

Nothing saying you have to use one TaxHaven. You should try put that “straight and unhampered” contract together without one if that is the way you feel.

#29 xyz on 12.01.10 at 12:43 am
Just a curious and perhaps naive question but does anyone know the history of the birth of the Realturd?
More specifically, did it have an immediate impact on house prices or was it like a snowball that wound up on a very steep hill?

The vocation goes back quite a ways xyz. General Ulysses S Grant was a REALTOR® before he went into politics and became the 18th President of the United States.

Contrary to popular belief REALTORS® have no influence on property values the are the messenger xyz. They don’t sell homes they help YOU sell your home or buy one as the case may be. Fact is REALTORS® look forward to falling prices – it’s like a sale which will bring out more buyers. The word REALTOR® is a trademark of The Canadian Real Estate Association in Canada and the National Association of REALTORS® in the United States. Hence the capitalization of the word and registered trademark symbol. We don’t want the term diluted. Missy Bunny is not a REALTOR® by the way, she is an employee of the developer who is hired to part you the fool from your money. Don’t get the likes of her mixed up with REALTORS® please. Although I am sure there are a few REALTORS® who might like to get mixed up with her. ;-)

#35 yyc bubble

The residential real estate market in the city right now is “self-cleaning,” says one of the leaders in real estate investing in Canada.

“It shakes out the pretenders and allows long-term, as in five-to-seven year investors, to buy and succeed,” says Don Campbell, president of Canada’s Real Estate Investment Network (REIN), which has a membership of real estate investors across the country.

Don Campbell is no dumby.

#57 Burnt Norton on 12.01.10 at 2:29 am

#126 Devore on 11.30.10 at 2:49 pm
Where is it written that anyone should be able to buy a house anywhere they like?

If someone can’t afford to buy a place in a certain city or area then they can choose to rent unless they want to move somewhere they can afford to buy or find a way to make enough money to buy a place in the location of their choice. Europeans and New Yorkers have been used to this for a long time now.

It’s like someone whining about the injustice of not being able to afford a Ferrari even though his great grandparents were born in Italy.

RIGHT ON BROTHER! Tell it to them like it is. People ya makes yer money where ya has ta and ya spends it where ya wants ta. That’s why everyone is spending their hard earned cash in beautiful British Columbia the bes… (you know the rest) and the demand is pushing prices up so much or keeping them up as the case may be.

#59 SophieZombie on 12.01.10 at 2:29 am

Devil’s Advocate is getting more aggressive and ruder than ever. Bitter as a self-employed who should be on EI now,

Nope not at all Babe. This is my market commin’ up. It’s been easy pickin’s ‘till now. I admit, I’m lazy. When the market was red hot I coasted along enjoying life. My needs are simple and I have more than I need. But business wise I find that it’s markets like this in which I can really push hard on the downhill slide building the momentum gaining market share while others throw in the towel. That momentum I build will carry me up the other side.

“Ruder than ever” I respectfully disagree. These blogs need a Devil’s Advocate. Can you imagine the harmony here without one? Yuck. Pick a position and defend it… it will make you smarter. The harder you have to defend it the smarter you will become. No one has convinced me yet to abandon my thoughts, opinions or ideals yet. But, please, keep trying.

#61 Chris in Langley

Hey Chris…
http://www.youtube.com/watch?v=ChWs1d5kots
enjoy Dude

#64 poco

Ditto above Dude and… how’s that CREA commercial go again… oh ya “Real estate is my life”.

#74 Ottawahouse

And if I am right all the smart people who will buy after the pull back will be really better off in 20 years than renters!

Is Canada Different than USA? only time will tell.

Read this kids full post… he gets it!

#81 Ben on 12.01.10 at 8:32 am

#184 Devil’s Advocate on 11.30.10 at 8:24 pm
I don’t think my assumptions…

Exactly. You don’t “think” your assumptions?!? Don’t you see the lunacy in that statement. I couldn’t bring myself to read past that statement. FAIL! Give it another try Ben.

#104 Ret on 12.01.10 at 11:07 am

Garth-

Some of your daily multiple posters need a full time job or, in some cases, a couple of full time jobs.

It’s your blog but I would respectfully suggest a 2 post limit per day. One post to state a point/present info. and one more post, if needed, to clarify or defend their position or info that they have added.

#105 Junius on 12.01.10 at 11:10 am

What have I learnt?

1. That common sense is not common.

2. That for most people their view of the future is almost entirely controlled by recent event bias. In other words, the expectation that things will continue as they are outweighs all objective evidence to the contrary.

3. We fail to learn from others and often even our own mistakes. As Jeremy Grantham stated, “We will learn an enormous amount in the very short term, quite a bit in the medium term and absolutely nothing in the long term. That would be the historical precedent.”

4. In a global credit bubble, it is not different anywhere except in regards to timing.

In the long run, we are all Greece, Iceland or Ireland. It is only a matter of degree.

#106 Timing is Everything on 12.01.10 at 11:16 am

Livin’ just outside their money grabbin’ grasp…(Got water well? Got septic system?, got ‘free’ fuel’ – firewood?, got irrigation?, got garden?) OK, I guess ya all are ready for the next 5 to 10 years.
Coming to ‘every’ municipality near you, thank God you don’t live within city limits and are self-sufficient, give or take. (or are you a sitting tax-duck?)

Hmmm, the less water ya use, the more they charge ya for water rates…Do the math on that one.

http://www.timescolonist.com/news/Water+garbage+costs+rise+Victoria/3909466/story.html

#107 rower on 12.01.10 at 11:16 am

Leanne wrote: He’s probably looking for his next sugar mama….

Maybe he’s got it all figured out: let sugar mama overpay for real estate while he stays illiquid and free to leave whenever.

Maybe he reads this blog.

Nah, if he did, he’d wear manly boots.

#108 Confused in Victoria on 12.01.10 at 11:20 am

RE agents keep saying that the Victoria market is ‘FLAT” what the hell? It won’t go down – it will remain “FLAT”. I know people who have been trying to sell their house for 2 years.

#109 Ben on 12.01.10 at 11:23 am

Yup….. three more immigrants at work are buying, been in Canada less then 18 months and the banks have qualified them for half mil mortgages and they are buying new $540,000 cookie cutter homes in GTA with 35 year mortgages, 5 year terms at 3.5%. Am I old school? I just can’t get my head around this real estate ponzi, I can’t fathom still paying for a house when I’m 70 years old! Where are these people that barely speak English heads at? Do they think rates are going to be at 3.5% forever? It just blows me away.

#110 David B on 12.01.10 at 11:24 am

Day after day many here say …. “Not in Canada” things are different … Really? We have the largest deficit ever!, our largest National Debt ever! and we host one of largest baby boomer soon to be senior boomer generation ever! We have health care and social costs rising to unsubsatainable leves! We have more roads and railway lines to maintain than other nation on earth. All this is coupled to some of highest property prices for middle class people on the planet!

And poeple believe there will not only be no correction but housing will continue to rise making every home owner financial secure for life><!

Have I got it about right?

#111 Devil's Advocate on 12.01.10 at 11:27 am

Busy, busy day ahead. 300 expireds last night!

How do you spell “SMORGASBOARD”

#112 Junius on 12.01.10 at 11:30 am

#72 Flip Flop Vancouver,

You said, “Spring is going to be on fire.”

You are correct. Fire sales everywhere. Just like the OV.

Get ready for some smokin deals!

#113 rower on 12.01.10 at 11:32 am

Sorry, I meant to say the cowboy stays liquid and free to move whenever.

I’ve got to stop looking at that picture………..

#114 Burnt Norton on 12.01.10 at 11:34 am

BREAKING NEWS—AP

Mayor Robertson announces plan to convert Vancouver into commune.

Stunned homeowners and condo developers rallied outside Vancouver city hall yesterday upon learning of secretive city council plans to take the city’s eco-density policy one step further and turn the entire city into a commune.

The development of bike lanes and farmer’s markets represents the early steps towards communal assignment of housing, according to the report, released yesterday by Wikileaks. Leaked cables from city council members include growing concern based on the housing affordability outrage expressed by commenters on a popular national housing blog.

The plans are alleged to also include longer-term initiatives such as communal franchising of safe-injection sites for heroin users and conversion of highway HOV lanes into dedicated lanes for horse-drawn carriages. The open-roof conversion of BC Place is described as actually intended to facilitate conversion of the stadium into a huge downtown agricultural and hydroponics facility.

As news of the radical policy shift reverberated around the globe, beleaguered North Korean ruler Kim Jong-il dispatched a memo with his congratulations. Included in the memo were such statements as the “supreme glory” of the plan for Vancouver and reference to the foresight of the city leaders in aligning housing policy with a health care system that rivals his nation’s own in terms of benefits to special interest groups.

Outside Vancouver city hall, placard-holding landlords were chanting entrepreneurial slogans, red-faced with disbelief. One particular heir to an apartment complex in the heart of downtown Vancouver commented: “It’s not even the incoming Guatemalan and Tamil migrants, I’m more worried about all the good ol’ boys coming up from Washington state” Meanwhile, local traffic choppers spotted dozens of farm tractors towing flat-bed trailers full of hillbillies and hippies trundling north on Highway 99.

#115 Junius on 12.01.10 at 11:36 am

#73 RoninBC,

You said you saw, “No sign of residential construction slowing down in the greater Vancouver area. Cranes everywhere. I’m seeing more and more “sold” signs.”

Where were you looking? It used to be we could see construction cranes as far as the eye can see across Yaletown, Crosstown, Coal Harbour and East to Burnaby. Now there are only 3 or 4 visible with fewer and fewer new buildings starting. Quite the change in just a few years.

I am reminded of the words of Simon and Garfunkel when they sang, “A Man sees what he wants to see and disregards the rest.”

#116 bigrider on 12.01.10 at 11:39 am

Original Dave will get this one…

La terra e sempre la terra

#117 househunter on 12.01.10 at 11:39 am

72 Flip Flop Vancouver – I am a bear that lives in Vancouver. I see the signs that this market is hotter than hell right now. Garth’s predictions earlier in the year that a correction was coming at the end of the year is obviously way off. Rates may go up SLIGHTLY next year but that is not going to halt any of the current momentum. This train is running and I will be surprised if there is any significant correction to slow it down. Garth might have to re-evaluate the Vancouver situation given the current market.

#118 Aussie Roy on 12.01.10 at 11:42 am

Great but long article from Steve Keen.

For the time challenged take a look at the various graphs % income on mortgage payments, debt levels in the economy, the list goes on.

DA spend the time, have a read, see what you should really be focussing on. Sure its Australian but it applies everywhere. Just like the current house flu is global.

http://www.debtdeflation.com/blogs/2010/11/30/competition-is-not-a-panacea-in-banking/

#119 Timing is Everything on 12.01.10 at 11:44 am

#42 dark sad person

Agreed…Adapt or die…a little ‘insurance’ doesn’t hurt either (breech-loaded projectile-firing thingy)
Just in case things get really stupid.

#120 AlbertaBound on 12.01.10 at 11:48 am

A neighbor up the street listed their place a few months ago for 630k, and it was gone in a week. On another note, however, a big time land developer who lived across the street and had no less than 3 ferrari’s, one worth well over a mil, and a house with incredible views and a killer location, was wheeled out of his house 2 summers ago on a stretcher while I was sitting on my deck enjoying a beverage. Dead of a heart attack at around 53…apparently he was leveraged to the hilt and things were getting bad. Long story short, he is gone, and now his house, which could have easily been worth a couple of mil is now being liquidated for about 1.4mil.

They are still pumping out plenty of 600, 700, 800+k houses around my neighborhood though…and as I stare out my office window at the new BOW going up I can’t help but wonder what the state of Cowtown will be in 10-15 or more years, when my kids will be starting to look for something to do with their lives. Still lots of bitumen and there will be for many years, lots of new tech to use to go back into previous exploited reservoirs, and maybe if the world starts switching to nat gas for more of its needs we will be able to ride that wave for awhile longer as well….

Moral: This life is a pretty quick ride, maybe worry a little less about how much your house/condo/bunker is worth and spend a little more time with friends, family and doing things that are important to you. Save a little, spend a little, try to give your kids a good (but not too good) headstart and try to leave this place in a little better shape than you found it.

W

#121 Mr. Lee on 12.01.10 at 11:54 am

It seems incompressible that some individuals are still questioning Garth’s logic and motivations on this blog with regards to where house prices are going. The facts are incontrovertible.
Home prices escalated past the point of inflation and population growth.
Real income has not gone up since 1982, yet home prices exploded after 2001.
Real estate price corrections in USA, GB and the EU. Japan never got out of its real-estate deflation.

Now Mr. Carney is contemplating what to do with 1.8% core inflation result with an 8% unemployment rate.
And the some still question where home prices are going to go.

#122 David on 12.01.10 at 12:00 pm

Calgary really does look and feel like Denver Colorado.
It is a really fun open throttle drive going from Calgary to Denver. I absolutely loved the drive on the front range of the Rockies between Calgary and Denver. I think everyone should do that drive at least once in a life time. For anyone who is a history buff the Little Bighorn battlefield on the Greasy Grass River is full of tales.
It is easy to pick on Calgary, but I have to say it is great city if you are selling products to the US market and it has a great live music scene.
Boom and bust is the life blood of Calgary.

#123 Rich Renter on 12.01.10 at 12:15 pm

Why did house prices in Houston not increase like those in Calgary when the price of oil was at $147.
The answer is supply and demand, Calgary will have it’s 10-20% correction simply due to high inventory and speculation. A townhouse across from my place has dropped 60K in 8 months, still for sale.

#124 dark sad person on 12.01.10 at 12:15 pm

#205 Oasis on 12.01.10 at 9:23 am
#201 dark sad person on 12.01.10 at 12:18 am
_________________________________________

you make quite a few mis-statements.

1. japan has not suffered a secular deflation. prices for the last 15 years have essentailly been stable. they have not collapsed.

2. the US$ is nothing more than toilet paper. nobody is standing behind it. and as for american military might, sure , beat up on countries like iraq, but let’s see them invade China. the times are changing. the US is in serious decline. they are finished.

3. all your arguments about deflation are false. Weimar Germany is a perfect example. So is Brazil, Argentina, Zimbabwe. you simply can not have deflation in todays’ fiat money system. it’s not possible.

4. you sound like a Prechterite.

#206 Oasis on 12.01.10 at 9:29 am

#201 dark sad person on 12.01.10 at 12:18 am
___________________________________________

i should add, that your definition of “money” as money and “credit” is an Austrian idea. TMS has been skyrocketing. and there is no Austrian economist predicting deflation… only rapid inflation that will border on worse.

*******************************************

Oasis–First of all you have no idea what Inflation and Deflation is-you cannot even define it-
You keep referring to prices and prices are simply “prices”
You did not likely because you cannot-refute any of the data that was provided-“if” you knew what you were talking about and it’s obvious you do not-that is where you could have proven me wrong and what’s more-you never provided anything-other than blah blah comeback-

To say we can’t have Deflation in a Fiat system is a friggen joke-we had Inflation and so we will and are having Deflation-
Japan never had Deflation? lol
Even the BOJ admits to Deflation-

TMS is ramping up but the “Money” has no Velocity-it sits in Banks and isn’t being lent out = zero Velocity and i proved that and you did not disprove it-so you try and wiggle out with your cheap shots-

As far as no Austrian Economist calling for Deflation?
You need to do some research-
Read—Von Mises-Hayek-Rothbard

I might sound like a Prechtorite but here’s the bottom line–
All those links were from St Louis Fed data-disprove it if you can-because Bullshit doesn’t cut it in this game-

#125 Publius Enigma on 12.01.10 at 12:17 pm

“#14 Devil’s Advocate on 12.01.10 at 12:08 am

Be it CREA or anyone else, if you have to distort the facts or lie by ommission in order to be heard what ever it is you are saying is not worth hearing.

Truth prevails always and can not be manipulated to say anything other than what it is.”

…says the disturbed little fellow who has been repeatedly guilty of spewing fabricated statistics.

Your track record on this blog demonstrates that integrity has not been your strong point. The moral high ground on which you are attempting to stand is decidedly unstable.

I’ll await your next fifteen posts (this is approximately your average per column, correct?). I particularly enjoy the ones in which you quote yourself and proceed to respond to it.

#126 Crash Callaway on 12.01.10 at 12:41 pm

Ha Ha.
The above Pic shows what a typical Calgarian does in -35 degree weather when there’s no more Kool Aid.
They start drinking antifreeze and strum new tunes.

As for the positive pep talk for March real estate picking up by Diane Scott, the Spring sunshine will only cause more igloos to melt and more and more Cowtowners will be out on the street singing the blues with naked cowboy dude.

#127 GregW, Oakville on 12.01.10 at 12:45 pm

Hi #173 Devil’s Advocate,
Weather by design or stupidity humans do many dum things to each other and there own kids too.
One way or another the numbers will be delt with if this keeps up.
If it’s being planed, I am not insane to thinks I have the wisdom to decide who. (Dr strange love movie come to mind.)

I heard this speaker last week, he wrote this book.
“Slow Death By Rubber Ducks” (It’s about some of the man made chemicals that are now inside us all!)
(I found it on google books. The author didn’t say you could read it for free, but here it is. You can by copies also.)
http://books.google.com/books?id=NIek7NxSdEgC&printsec=frontcover&dq=slow+death+by+rubber+ducks&hl=en&src=bmrr&ei=vGn2TM7pI43Tngec7K2jCQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCgQ6AEwAA#v=onepage&q&f=false

Population size?
‘Zeitgeist: The Movie’ some here might find thought provoking. It’s on the web.
I believe there is a “Zeitgeist Movement”.
Something to do with making enough for all.
It’s an interesting idea.

Why were silver tooth filling ever used?
I had mine removed. (Must be remove with care!!!)
Flu shot has mercury in it too! More that you might think. Put the shot in a fish and then be told the fish is unsafe to eat. Why is it ok to inject this toxic into kids and your blood stream still???
See the ‘smoking teeth = poison gas’ video 8-1/2min!
http://www.iaomt.org/

Why is fluoride still added to the west’s our water supply? Brita water filters do not remove it.
I have read and seen the science evidence that it is Toxic to the brain and soft tissues of your body. I don’t drink fluoridated water as a start! Why am I forced to bath in it!
the 2006 NRC report is at this site and the new book,
‘the case against fluoride’ is free on google books too.
(will wise people intrusted with public health read the science use there brains and stop forced water fluoridation? Maybe not enough profit for some in all our good health? Remaning uninformed is not in your best interest!)
For good information http://www.fluoridealert.org

#128 Incubus on 12.01.10 at 12:45 pm

Take a look of these serfs.

http://www.youtube.com/watch?v=fOshw4kIGR4&feature=player_embedded

#129 allister on 12.01.10 at 12:46 pm

#96 Jsan

The guys drilling conventional gas wells are idling drilling rigs because NG is too low, arent they?

My question is – how can shale gas drilling be cheaper to drill? Doesn’t it require longer drilling holes, more equipment, lots of fluids and huge high pressure pumps to frac the rock. What about cleaning up the gas that comes out with all those fluid poisons? I hear shale well life spans are very short – like 18 months. Will the greenies shut this drilling down?

I think NG has hit bottom because the whole shale gas thingy is more “were gonna be driving on corn alcohol” hype.

Maybe its just another whopper of a story to seperate investors from their capital.

Are there any experts out there on costs and returns on investments of shale gas drilling?

#130 allister on 12.01.10 at 1:11 pm

#96 jsan

Maybe there is still hope for Calgary when the commodity traders come to their senses. Maybe NG is a buy at these prices. I clipped this from the link at the bottom.

Art Berman, a Houston geologist and columnist at World Oil Magazine, does not believe most shale gas wells are economic unless operator costs go down, gas prices rise sharply, and high average prices are sustained. Talking about the Haynesville in A Long Recovery for Natural Gas Prices, Berman says—

Drilling and completion costs [in the Haynesville] vary from $7.5 to $10.5 million per well. The marginal cost for operators to find and develop natural gas reserves is $7 to 8/Mcf, and current netback prices in the play are less than $3/Mcf. The threshold netback gas price for a better-than-average 5.5 Bcf well to break even is $7/Mcf at NPV10 (Bodell and Pittinger, in press). For companies that have favorable hedge positions, realized gas prices for 2009 will be as high as $6.50/Mcf and $6.00/Mcf for 2010. This means that the play is marginally commercial today for operators with favorable hedge positions, but not commercial based on cost and price fundamentals.

http://www.energybulletin.net/node/49342

#131 Chris in Langley on 12.01.10 at 1:13 pm

For Devil’s Advocate,

McLovin on 11.28.10 at 1:27 pmDevil’s Advocate,

I liked your writing style more before you tried to be Garth jr. Why do you think that you are the only person who enjoy’s their life? (You may be the only Realtor who does) Lastly, why do you refer to the readers of this blog as “pups and poodles”? (Clearly being belittling and rude)

I remind you of your promise to leave this blog and not come back until Christmas. Tell me its not possible that a Realtor has not lived up to his promise? My sense of well being with the world is shattered!

#132 Chris in Langley on 12.01.10 at 1:15 pm

For the self aware Devil’s Advocate…who listen’s well to feedback. He’s even stated that listening to other’s feedback is what makes a person great.

Denisa on 11.28.10 at 2:09 pm#72 Aussie Roy ; Don’t even respond to DA, maybe he’ll shove off if he’s ignored by everybody.

That so and so is using this blog to gather info to hone his sociopathic manipulation skills. (Buyers beware in Kelowna, BC)

#133 Mr. D - Ottawa on 12.01.10 at 1:16 pm

This post is just to correct the incorrect assumption that some posters (Ottawahouse in particular) are making.

A 10% unemployment rate does NOT mean that 90% are employed. It seems logical, but the actual % of people employed is much lower.

At this time the official unemployment rate is 7.9%. In Canada only 61.8% of the population (aged 15 and over) is employed as of October 2010. That includes part time employment. In case there is any doubt, please refer to this source from Statistics Canada.

http://www.statcan.gc.ca/daily-quotidien/101105/t101105a1-eng.htm

#134 CTO on 12.01.10 at 1:17 pm

#107 Ben

“Where are these people that barely speak English heads at? Do they think rates are going to be at 3.5% forever? ”

Ben, that’s just it…they barely speak english and havn’t been in Canada long enough to remember what
happens when prices get over inflated here.

In their country, real estate is only available to the rich, so this “seems” like a pleasant new experience, but, THE FUNDEMENTS ARE NOT HERE in Canada.

The greatest ponzi brokers are their fellow countrymen in the RE business spewing the news in their local lauguage to back home that this is the only investment that they should make, so they believe it right to the end, and likely on the way down as well.

I apologize to any new hard working immigrants that take offence to what I have just said, but if you have been here any length of time, you know i am correct.

#135 Devil's Advocate on 12.01.10 at 1:34 pm

#123 Publius Enigma on 12.01.10 at 12:17 pm
“#14 Devil’s Advocate on 12.01.10 at 12:08 am

Be it CREA or anyone else, if you have to distort the facts or lie by ommission in order to be heard what ever it is you are saying is not worth hearing.

Truth prevails always and can not be manipulated to say anything other than what it is.”

…says the disturbed little fellow who has been repeatedly guilty of spewing fabricated statistics.

Your track record on this blog demonstrates that integrity has not been your strong point. The moral high ground on which you are attempting to stand is decidedly unstable.

I have never maliciously “spewed fabricated statistics” to serve my biased purpose. If you won’t let go of that FSBO statistic I gave you have a most compulsive personality disorder against which mine pales. That stat is readily available in a variety of publications, many you would undoubtedly consider biased. It is also the result of my own analysis here in the city in which I practice real estate. I track the for sale by owners extensively and year after year the number which are successful selling FSBO range between 8 and 12% and about half of them have a REALTOR involved in the transaction in one form or another.

Not only that Publius Enigma according to several NAR surveys FSBOs sell for about 22% less than listed properties. That is unless they sell to a relative or a friend, which the bulk of successful FSBO sales are, in which case they sell for about 16% less. Of course you would consider such a NAR survey to be biased. Well then take the Newsweek article which basically found the same.

You still have a bone to pick with me because I didn’t provide you the proof sources don’t you? Prove me wrong cowboy. Might be worth your effort. I am far from infallible. We both might learn something.

Tell you what, when you are next in Kelowna email me at [email protected] and I will invite you into my office where you can peruse my files and the statistics on our own FSBO market.

We Love FSBOS… it’s like the marinating and tenderizing of a tough cut of chuck into a fine meal. ;-)

That you think that I appear to lack integrity I am ok with. I stand by everything I post and I am open to compelling argument to the contrary but as yet have encountered none so convincing as to have changed my mind.

What the pups and poodles fail to realize is I sold revenue property at “the peak of the market”. In retrospect I was right and it was indeed the “peak” but I don’t think it (the market) is going to falter nearly so much as even I thought it might let alone what the pups and poodles appear wetting their pants in anticipation of. After the capital gains tax which I willingly paid to unload the property then in retrospect I should have held on to it and not sold rather than as Garth would say “take the profits”. We never bought them as speculative ventures they were long term revenue generating holding properties. But I did sell them thinking I could replace them cheaper in the near future. I truly don’t think it is going to play out that way. So my opinion on the market, thus far anyway, is based on real life experience – personal experience, not the biased professional interests you might accuse me of.

I just don’t think it is going to unfold the way we thought it might. Most of what we worry about never happens. While the market is indeed “shifting” I don’t think it is “failing”. As matter of fact I think it is getting stronger by ridding itself of the inefficiencies, corruption and greed.

I’m just here to offer an alternate opinion Publius Enigma. It’s the way I do business; I may not tell you what you WANT to hear but I will always tell you what you NEED to hear. If that shows a lack of integrity – so be it.

#136 Devil's Advocate on 12.01.10 at 1:35 pm

OMG 2 hours passed by between my last two posts. Damned work keeps getting in the way. ;-)

#137 TS on 12.01.10 at 1:37 pm

Canadian non-mortgage debt continues to grow….

http://finance.sympatico.ca/home/canadians_have_higher_debt_load_but_theyre_racking_it_up_more_slowly_study/7eed372a

Perhaps a time bomb here when interest rates rise in the future….

#138 Messengerboy on 12.01.10 at 1:38 pm

Just a quote from Mike Fotiou regarding this post of yours Garth:

If a Calgary realtor wishes to comment on this blog, he’s free to do so. — Garth

#139 refinow on 12.01.10 at 1:39 pm

72 Flip Flop Vancouver – I am a bear that lives in Vancouver. I see the signs that this market is hotter than hell right now. Garth’s predictions earlier in the year that a correction was coming at the end of the year is obviously way off. Rates may go up SLIGHTLY next year but that is not going to halt any of the current momentum. This train is running and I will be surprised if there is any significant correction to slow it down. Garth might have to re-evaluate the Vancouver situation given the current market

#117, did you actually write this with a straight face?

I guess if I was a realtor, I would be making the same wishes.

If you were actually serious when you wrote this, drive immedialy to the hospital, because I think you have sustained a major brain injury.

#140 Mark on 12.01.10 at 1:41 pm

Do as you’re told by your overlords:

Buy a house and shop ’till you drop. Now stop complaining everyone.

It’s sad to see how we’ll kill each other (figuratively for now) over a 1/2 price toaster.

http://www.planbeconomics.com/2010/12/01/bougeousie-vs-proletariat-like-pigs-at-the-trough/

#141 what to do on 12.01.10 at 1:45 pm

Got lucky and sold my townhouse 2 weeks ago. Bought it in Nov 2008 and made a nice profit of $22,000 after all fees. Right now we’re trying to hammer down the bank on a foreclosure for under $120,000 less than the listing price from the summer. The homeowners bit off more than they can chew and I’m hoping to scoop a good deal.

#142 Calgary Rip Off on 12.01.10 at 1:49 pm

Like I have been saying over and over for 3 years, Calgary is still $200K overpriced. What’s the hurry to buy now?

Some argue that deals are to be had in winter. There is less inventory to choose from. Houses will become more plentiful in spring. And it isnt like housing has become a bargain so a person should buy now. Where are all these bargains in Calgary? Forest Lawn? Yawn…

Most of the houses in Kincora and Sage Hill are all priced inappropriately. This is why they arent moving. The lot prices for the land are just way too high. Its not the building materials or the house itself that is the ripoff.

My coworker who is trying to sell her place in Redwood Meadows(on reserve land) cant and is removing her property from the mls, its been on there since July. What fool would buy a place for $400K on leased land when in 2049(when the lease is up) the native canadians take the property and the land, as per the lease agreement? It seems unlikely the natives want to extend the lease and Im sure they are laughing at the tension its creating in the residents there. Its unbelievable the mess that Redwood Meadows is. Sure its nice. Picturesque. And you too can end up homeless in your old age if you buy there.

Its unfortunate that many got sucked in ignorant of the true value of homes in 2007 in Calgary. Unless these people bought way above their means or have to move, they will be fine.

It’s unlikely that houses will go down in price like they have in Phoenix AZ, in Calgary. Unlike Phoenix, there are many natural resources here. I wouldnt want a housing crash like Detroit or Phoenix. Sure it means less housing costs, but it also breeds crime and lower wages. Phoenix is affordable for a reason.

#120 David: Great live music scene in Calgary? Where? At the Snatch rock and roll lounge or the casino? The only acts playing of recent note were Twisted Sister at the Snatch and Ratt at the casino. Then the Scorpions at the Jubilee Auditorium in August. Id rather be dead than listen to most of the so called musicians as I can play faster and more accurate guitar than most of those so called “professionals”. Why am I not playing professionally? Cause the music industry is cutthroat and my income shouldnt depend on whether Joe Blow thinks my music is cool. I think it is, and that is what matters-so Im not dependent on schmucks for my income. :) Im not handing “professionals” money when I can play left and right handed guitars, and keyboards like there is no tomorrow. Calgary is NOT the sunset strip in Calgary circa 1983-1988 for music buddy, if it were with acts like Steeler, Alcatrazz, LA Guns, then maybe your comment would be accurate. There is no clean metal in Calgary dude. Its all been distorted by have been bands or bands with lead singers that grunt and downtuned guitars with musicians that can barely play three chords. Laughable.

#143 vinnythechin on 12.01.10 at 2:04 pm

@bigrider #114. La terra is good for pommedori & fazooli

#144 Junius on 12.01.10 at 2:12 pm

#115 househunter and #136 refinow,

Nice try poser. The only thing you are seeing right now is the need for a career change.

#145 dark sad person on 12.01.10 at 2:22 pm

Listen to this Canadian neo-con piece of shit Politician-

University Of Calgary Professor And Senior Advisor To Canadian PM Calls For Julian Assange Assassination On National TV

http://www.zerohedge.com/article/university-calgary-professor-and-senior-advisor-canadian-pm-calls-julian-assange-assassinati

#146 Genghis on 12.01.10 at 2:24 pm

This story was mentioned previously in the blog. Re double-dip in US house prices.

The Economist has published a graph today that says it all:

http://www.economist.com/blogs/dailychart/2010/12/house_prices

Prices are back to what they were in 2003.

I recall back then that some well respected economists were saying that the US and major cities in Canada were in a bubble. If this is true then it would support the argument that prices have further to fall. Also, add to this, the fact that prices always tend to undershoot in a correction (the same way they overshoot in a bubble).

#147 Devil's Advocate on 12.01.10 at 2:29 pm

I will gladly leave these blogs given one of two events.

If enough people email me at [email protected] telling me to take a hike and not half as many do so requesting that I stay.

Or Garth bans me

Trust me I don’t want to be where I am not wanted like a fart in an elevator. Nor do I want to beat my head against a wall providing “food for thought” to pups and poodles who are too busy smelling each others rear ends.

#148 GregW, Oakville on 12.01.10 at 2:32 pm

Hi Garth, fyi Are you on any lists? Will your Government allowed you to fly if you even wanted to?

“Under the Secure Flight program, the TSA demands that passengers submit personal information 72 hours before being cleared to fly. While on the surface, this is justified by invoking the threat of terror, as we have seen from the MIAC report and others,

the federal government now considers politically active Americans as potential terrorists, meaning that innocent travelers could find themselves on a watch list and barred from flying….”

article (are you paying attention?)
TSA Caves On Pat Downs But Mandates Government Permission For All Fliers
http://www.infowars.com/tsa-caves-on-pat-downs-but-mandates-government-permission-for-all-fliers/

#149 kabloona on 12.01.10 at 2:39 pm

Aussie posters: please ignore elmer elephant and keep posting here…..I for one appreciate the perspective. Besides, as Jeff Simpson has pointed out, Canada and Australia are close analogues of one another – politically as well as economically.

Except one country gets a lot colder in Winter….

#150 Debtfree on 12.01.10 at 2:42 pm

As there are no other kelowna re agents here to rebut what DA has to say about everything in the Okanagan . We can only surmise that he speaks for all of them . Also he unlike nikki does not self identify .So next time one goes into a re office in the OK one has to assume you are talking to DA. Now if that isn’t pause for thought what is?
I was this last summer in several re offices in the OK looking not buying and the thought of having met him just creeps me out .

#151 dark sad person on 12.01.10 at 2:45 pm

#127 allister on 12.01.10 at 12:46 pm

Are there any experts out there on costs and returns on investments of shale gas drilling?

***************
I’m not an expert on the subject-but i know this much-
When the elephant hunters are after it on a Global scale-then yes-it will be worth their investments-
Shale gas prospects have huge potential-despite people like Kunstler who see nothing but darkness ahead-although i do agree with his peak oil theory-just not the outcome being so final-as he says-

Remember-the markets are always forward looking-

**********

Encana opens its first natural gas vehicle fueling station in Red River Parish, Louisiana

The Red River station will fuel the company’s growing fleet of compressed natural gas (CNG) vehicles, which is part of Encana’s commitment to expand the use of cleaner-burning natural gas as a transportation fuel in North America.

“Due to sweeping technological breakthroughs in the development of natural gas in North America, cleaner-burning natural gas provides an abundant, affordable alternative to conventional gasoline, and at a cost that is 20 to 40 percent lower in many regions. Carbon dioxide emissions from CNG vehicles are about 20 to 30 percent lower than from vehicles running on gasoline and natural gas doesn’t contribute significantly to creating smog because it emits very low levels of nitrogen oxides and particulates. Natural gas vehicles have become one of the fastest growing sectors in the alternative vehicle market worldwide. We believe this trend will continue.

http://finchannel.com/news_flash/Oil_%26_Auto/76576_Encana_opens_its_first_natural_gas_vehicle_fueling_station_in_Red_River_Parish,_Louisiana/

Encana pushes for billion dollar natural gas highway

Highway 401

EnCana Corp. has been in discussions with government officials about a plan to build a network of hundreds of compressed and liquid natural gas (“LNG”) fueling stations for Highway 401 – one of Canada’s busiest highways between Windsor and Quebec City. At the same time, EnCana has also been negotiating with the B.C. and Alberta governments about building filling stations between Edmonton and Vancouver.

http://hornrivernews.com/2009/12/21/encana-pushes-for-billion-dollar-natural-gas-highway/

#152 RoninBC on 12.01.10 at 2:48 pm

# 99 CTO…

“My nephew in T.O has two condo’s purches based on nothing. When asked what makes Toronto better than Van, he says Van doesn’t even hold a candle to T.O.
He says Van is just a back woods BC town with NO jobs or commerce!”

I guess he, Garth, and many others forget that Vancouver is consistently rated as one of the top most liveable cities in the world.

check it out….

http://en.wikipedia.org/wiki/List_of_cities_by_quality_of_living

Not bad for a “backwoods BC town”.

Hmmm, don’t seem to see TO ahead of Vancouver in these ratings. Even Ottawa for God’s sake fairs better.

#153 youknowwho on 12.01.10 at 2:49 pm

Friends purchased property in Sept 2008 in a town just south of Calgary for $334,000. Now listed for $280,000 and no bites after 5 MONTHS ON THE MARKET. They actually put 20% down and will likely have to put up money to get out….

#154 JB on 12.01.10 at 2:52 pm

Garth and/or others,

Please comment on Edmonton’s R/E. How different is it from Calgary.

We’ve heard enough about Calgary now.

Thanks

#155 Jason in Calgary on 12.01.10 at 2:54 pm

Alls I can say is PHEW!!!

Glad I found this Blog a couple months ago when I was looking at purchasing some real estate in Calgary!!

The rental market just keeps gettin sweeter, and my liquid financial assets are bringing me returns!

This is one formerly born and raised Ontarian turned cowboy screaming.. YEEEHAW!

#156 Jwb on 12.01.10 at 2:59 pm

#34 Elmer

If you don’t like Roy’s updates don’t read them but there are plenty of Aussie readers here who enjoy them… Plus you might learn something from a bubble much bigger than your own.

#157 jess on 12.01.10 at 3:08 pm

142 dark sad person
http://www.pbs.org/pov/mostdangerousman/

Ellsberg (pentagon papers) had to photocopy the 43 volume report.Technology at that time to reproduce those documents was very time consuming. Training his children on the photocopier and arming them with a pair of scissors to cut off the words top secret. The assembly line of paper truth began in October 1961. Of course it wasn’t a best seller since no one in Washington security counsel wanted to read such an unpatriotic thing.

Two years later, on February 1971 Ellsberg discussed the study with New York Times reporter Neil Sheehan, and gave to him in March

To ensure the possibility of public debate about the content of the papers, on June 29, US Senator Mike Gravel (then Democrat, Alaska) entered 4,100 pages of the Papers to the record of his Subcommittee on Public Buildings and Grounds. These portions of the Papers were subsequently published by Beacon Press, the publishing arm of the Unitarian Universalist Association of Congregations.[5]

Article I, Section 6 of the United States Constitution provides that “for any Speech or Debate in either House, [a Senator or Representative] shall not be questioned in any other Place”, thus the Senator could not be prosecuted for anything said on the Senate floor, and, by extension, for anything entered to the Congressional Record, allowing the Papers to be publicly read without threat of a treason trial and conviction. This was confirmed by the Supreme Court in the decision Gravel v. United States.

Later, Ellsberg said the documents “demonstrated unconstitutional behavior by a succession of presidents, the violation of their oath and the violation of the oath of every one of their subordinates”.[6] He added that he leaked the papers to end what he perceived to be “a wrongful war”.[6]
=====================
When he leaked the Pentagon Papers, a Department of Defense history of U.S. political involvement in Vietnam, to the New York Times in 1971, it triggered a landmark Supreme Court decision and an atmosphere of paranoia in the White House that led to the break in of Democratic National Committee headquarters the following year.

Surprisingly, “The Most Dangerous Man in America: Daniel Ellsberg and the Pentagon Papers” is the first documentary of Ellsberg, who at one time was seen as courageous in some quarters and treasonous in others.

http://www.pbs.org/wgbh/pages/frontline/newswar/tags/pentagonpapers.htm

#158 jess on 12.01.10 at 3:14 pm

142 dark sad person
http://www.pbs.org/pov/mostdangerousman/

Ellsberg (pentagon papers) had to photocopy the 43 volume report.Technology at that time to reproduce those documents was very time consuming. Training his children on the photocopier and arming them with a pair of scissors ,the assembly line of paper truth began October 1961.

Of course it wasn’t a best seller since no one in Washington security counsel wanted to read unpatriotic words. Of course today’s datascoop is around 5G. …

Two years later, on February 1971 Ellsberg discussed the study with New York Times reporter Neil Sheehan, and gave to him in March

To ensure the possibility of public debate about the content of the papers, on June 29, US Senator Mike Gravel (then Democrat, Alaska) entered 4,100 pages of the Papers to the record of his Subcommittee on Public Buildings and Grounds. These portions of the Papers were subsequently published by Beacon Press, the publishing arm of the Unitarian Universalist Association of Congregations.[5]

Article I, Section 6 of the United States Constitution provides that “for any Speech or Debate in either House, [a Senator or Representative] shall not be questioned in any other Place”, thus the Senator could not be prosecuted for anything said on the Senate floor, and, by extension, for anything entered to the Congressional Record, allowing the Papers to be publicly read without threat of a treason trial and conviction. This was confirmed by the Supreme Court in the decision Gravel v. United States.

Later, Ellsberg said the documents “demonstrated unconstitutional behavior by a succession of presidents, the violation of their oath and the violation of the oath of every one of their subordinates”.[6] He added that he leaked the papers to end what he perceived to be “a wrongful war”.[6]
=====================
When he leaked the Pentagon Papers, a Department of Defense history of U.S. political involvement in Vietnam, to the New York Times in 1971, it triggered a landmark Supreme Court decision and an atmosphere of paranoia in the White House that led to the break in of Democratic National Committee headquarters the following year.

Surprisingly, “The Most Dangerous Man in America: Daniel Ellsberg and the Pentagon Papers” is the first documentary of Ellsberg, who at one time was seen as courageous in some quarters and treasonous in others.

http://www.pbs.org/wgbh/pages/frontline/newswar/tags/pentagonpapers.htm

#159 Paolo on 12.01.10 at 3:19 pm

#107 – Ben

“Yup….. three more immigrants at work are buying, been in Canada less then 18 months and the banks have qualified them for half mil mortgages and they are buying new $540,000 cookie cutter homes in GTA with 35 year mortgages, 5 year terms at 3.5%. Am I old school?”

No Ben, you are not old school, you using your head.

Welcome to Canada, the new Ireland!

Lots of expensive junk for people trying to start a new life. Unfortunate. Terrible to watch.

A former colleague of mine, and new Canadian whose been in the country for about 15 years, just sent me a link to his Real Estate Investment Blog. He is actively part of a greater real estate investment ring in the GTA where the secret of financial success is buying and renting out town homes in the Hamilton area.

He knows my views on real estate. He says to me “You have been talking like this for 10 years…” – – so I guess he’s saying I’m wrong. Time will tell and no one likes to hear ‘I told you so’. Despite my views on the subject, he invites me to join this blog. I may just join to see how far humans are willing to go beyond all logic, financial or otherwise.

I guess misery loves company…

Is it true what I hear – – that home sales in Brampton are down 60% as of late?

In the USA, the panic set in and the tailspin happened very quickly. No one sees it coming. Refuse to see it coming. Get angry at you when you point out some hard facts or inconsistencies.

Don’t get on the train if you know it’s going to turn into a wreck.

#160 Nibs on 12.01.10 at 3:20 pm

Does Canada have a housing bubble video…

http://financialinsights.wordpress.com/2010/12/01/video-primer-does-canada-have-a-housing-bubble/

#161 Debtfree on 12.01.10 at 3:22 pm

Here’s more on the mentality of alberta right from the top of the blue school’s prof.and harpo’s inner circle. God help us all.

http://www.cbc.ca/politics/story/2010/12/01/flanagan-wikileaks-assange.html

#162 dd on 12.01.10 at 3:26 pm

Bernanke … Did I just hear the Bernanke’s policy is to devalue the US buck? He is using a lot of twisted language to basically say the dollar is headed lower. Stay tune Garth.

X – Fed is not money printing
X ? – US Fed official Policy is not to devalue the dollar
X ?

#163 Devil's Advocate on 12.01.10 at 3:28 pm

#148 Debtfree on 12.01.10 at 2:42 pm

As there are no other kelowna re agents here to rebut what DA has to say about everything in the Okanagan . We can only surmise that he speaks for all of them . Also he unlike nikki does not self identify .So next time one goes into a re office in the OK one has to assume you are talking to DA. Now if that isn’t pause for thought what is?

I was this last summer in several re offices in the OK looking not buying and the thought of having met him just creeps me out .

Debtfree:

F.Y.I. The only reasons I do not disclose my true identity here are;

#1. I am quite certain I piss more of my colleagues off than pups and poodles with the truths I tell. So surely you can appreciate my wanting to remain anonymous in that regard.

#2. If I were to go by my true name it might be construed as a solicitation for business. I am not here to solicit business – obviously. Although I have met some clients through these blogs who have become good friends. “Hey guys… Merry Christmas this 1st day of December”

Garth knows who I am. Believe it or not I do respect the man and when I post I do so with some level of friendly regard for the guy.

#164 Soylent Green is People on 12.01.10 at 3:29 pm

#31 Wildroseblogger on 12.01.10 at 12:46 am

re your average guy makes 60K, average girl makes 40k, giving your average two income couple 100K per year.

Let’s see, based on personal experience for me it was moi making double of my first husband. It took him damn near 15 years before he started to make real money.

g/f No. 1 – she makes 120,000, he makes officially 20k but is 5 years younger and very good looking

g/f no. 2 – she makes 60,000, he makes nothing, beer bum AND does nothing around the house

g/f no. 3 – she makes 45,000, he makes 24,000

g/f no. 3 – she makes 42,000, he makes 25,000ish

I could go on.
Location: GTA

#165 dd on 12.01.10 at 3:35 pm

Don’t bet against the US? What proof is there of a turnaround in short order?

http://www.latimes.com/news/nationworld/nation/la-pn-deficit-panel-20101202,0,6600843.story

#166 UrbanCowboy on 12.01.10 at 3:37 pm

#83 David B – Canada will print money to save the housing market

Good comment man, but didn’t the other countries all try that with no success. How many billions in the US.

#167 Devil's Advocate on 12.01.10 at 3:51 pm

Debtfree:

RE: “#1. I am quite certain I piss more of my colleagues off than pups and poodles with the truths I tell. So surely you can appreciate my wanting to remain anonymous in that regard.” – D.A.

For example – I am a HUGE advocate of increasing the minimum qualifications in order to become a REALTOR to include a required relevant university undergraduate degree.

#168 kitchener1 on 12.01.10 at 3:52 pm

Same story is playing out in the GTA burbs.

I know a former co-worker that purchased a townhome in Ajax back in late 06-early 07, paid 230K. Since then finished basement, added a deck, upgraded appliances etc.. He wants to sell due to finding a new job, figures he is easily at 250K with upgrades. Told me he would be very lucky if he could sell it for 230k but more realistically 220Kish.

so thats a 30K hit on price, plus land tranfer tax/legal/realtor fees and mortgage cancel fees.

Same is true in Barrie-Durham-Brampton etc..

For these people, its a total wipe out, cant sell so they are stuck or as in Brampton– bank takes the home and you see a surge in power of sales.

Problem is that these people have friends and family and co-workers and when they start to hear and see these stories first hand, sentiment changes and people start to wait out the lows.

barrie still has a slew of homes for sale for under 200K, for months now, no buyers, Brampton has a slew under 300K, no buyers. The urgency to buy is gone and when spring hits, its all over

#169 sk76driver on 12.01.10 at 3:58 pm

I love a balanced portfolio:

31.72%
1.39%
33.59%
-1.26%
28.57%
11.14%
50.00%

overall: 31.72% return

* Indicates a delay of up to 20 minutes – Disclaimer

#170 kitchener1 on 12.01.10 at 4:01 pm

#145 Devils Advocate

I dont mind your presence on the blog, but I do think that because of your cliental, your view are skewed a bit.

What you saw may very well be true in Clowna but not so much for the rest of the country.

You have been in the biz for a while, please do tell what the difference is now and between the 80’s and 90’s RE crash. I do agree that Vancouver may not crash to 3.5 times income, but even a revert to whatever the average is out there 5.5? times income will wipe people out.

When you are talking about mortgages north of 500K, a 1% increase in rates = approx $500 a month more for the payment, a 2% = $1000 more a month and thats on 500k, never mind 700-800K mortgages. Yes, in the past people did hold on to there houses but never before have we seen leverage like today.

A 2 % increase in rates for the average mortgage in vancouver means that people need to pony up another $1000-2000 a month, thats just not going to happen, even with a second job and a diet of alpo.

Other issue is that each rise takes out potential buyers.

But never mind interest rates, its all about sentiment.

#171 Oasis on 12.01.10 at 4:11 pm

#122 dark sad person on 12.01.10 at 12:15 pm
____________________________________________

i’ll take your silly points one by one:

“TMS is ramping up but the “Money” has no Velocity-it sits in Banks and isn’t being lent out = zero Velocity and i proved that and you did not disprove it-so you try and wiggle out with your cheap shots-”

<your point is quite irrelevant. the sharp increase in the velocity of money comes at the point where the general population loses confidence in the fiat currency. what is required first is the increase in the money supply, which is happening right now… at incredible rates. they money in no way shape or form HAS TO GET TO OUR HANDS. that is plain stupid. what HAS to happen is OUR LOSS OF CONFIDENCE in the money.

"Japan never had Deflation? lol
Even the BOJ admits to Deflation-"

<the bank of Japan is a political animal. as are all central banks. they will say whatever they like. the fact remains Japan's price level has been stable since 1990. it did not drop. that is a fact. Japanese CPI has ranged between +1% to -1% this whole time. that is not deflation in the accepted fasion, as the US experienced in the 30's, where US prices collapsed by 30% yoy.
PRICE STABILITY is not deflation.

"As far as no Austrian Economist calling for Deflation?
You need to do some research-
Read—Von Mises-Hayek-Rothbard"

i have read all of them. according to Mises, this is the crack up boom phase. it's only just begun. maybe you missed that chapter.

#172 hobbitt on 12.01.10 at 4:15 pm

#92 Lonely Limey on 12.01.10 at 9:51 am

One reason the English language is the World language, is it’s ability to be adapted to each locale. Different spellings or pronunciation of the same word, words added from other languages, even combinations of words from two languages. (Spanglish) The more countries that adopt the Limey language,often as a second language, the stronger it gets. I am very thankful that I speak English as my native tongue even if I can’t spell the Limey way. :-))

#173 CTO on 12.01.10 at 4:25 pm

#150 RoninBC

Van/BC
Absolutly, I was out there some time ago and loved the place, so many activities, beautiful country, ocean.

T.O not as nice, but in a different way, something like compareing, New York – Miami.
Miami nicer – no work for the masses
New York – shittyer some work

You see? It really doesn’t matter, fundementals matter. Times can be decieving and play around with your head but the fundementals always prevail. They have already in the States and they will here too in time. Give it time friend, give it time.

#174 dark sad person on 12.01.10 at 4:53 pm

172 Oasis on 12.01.10 at 4:11 pm

*****************

Once more you comeback spewing “all” you know-which is zip-

Simple answer–

Prove your case-or disprove mine with more then just BS-

hint “prices” are irrelevant or did you miss that part in all those Austrian books you claim to have read?

#175 Dazed and Confused on 12.01.10 at 4:58 pm

Just met up with buddies in Banker’s Hall this morning. They were going on about friends being RE agents that are saying activity is really picking up. They also went on about how CREB is providing facts that the fundamentals were looking good and we can expect a recovery early in the new year.

I thought about sharing my thoughts (similar to Garth’s even before I ever came to this blog). Bit my tongue and said how wonderful it is to know that we’re recovering from the recession.

Are people really that naive or am I just lost in a world that makes little to no sense. Every time I think things can’t get worse (Insolvent banks, GOM oil spill, Greece, Ireland, N.Korea,10% unemployment, etc.), they do. However, no matter what, the stock market goes up, up and away (up 256 points as of right now).

Insanity has become the new norm.

#176 sk76driver on 12.01.10 at 5:00 pm

Telling it like it is. Why was this not on the news? Ireland down, Greece down, then saying Portugal and Spain next and then we are FINISHED??? HOLY CRAP!!!

http://www.youtube.com/watch?v=Fyq7WRr_GPg&feature=player_embedded#!

#177 jess on 12.01.10 at 5:09 pm

The Ladder metaphor
The Canadian Centre for Policy Alternatives will release a study Wednesday that indicates the richest one per cent of Canadians took home 13.8 per cent of all incomes as of 2007. Using data from income-tax forms, the CCPA reports that the top one per cent of earners doubled their share of total Canadian incomes from the 1970s to the 2007 tax year.
Yalnizyan’s study has concluded that today’s ultra-rich Canadians make their money from massive salaries — as opposed to past years who tended to be entrepreneurs who made their fortunes from private businesses.

===================================

In many OECD countries, average full-time earnings rose considerably between 2000 and 2006, the most recent year for which comparative figures are available, with nine countries – the Czech Republic, Greece, Hungary, Iceland, Korea, Mexico, Portugal, the Slovak Republic and Turkey – showing nominal increases of more than 40%. In countries where tax rates go up by steps as taxable income rises, pay rises to reflect inflation can lead to higher taxes – a phenomenon known as fiscal drag — unless tax bands are adjusted to compensate….

OECD countries, Australia, Canada, Germany, Iceland, Korea, Luxembourg, Norway and the United States – tax reforms have mainly benefited higher-income groups. In addition, low wage-earners can find themselves paying higher taxes if targeted tax concessions such as employment-conditional benefits or tax credits are not adjusted to take account of inflation. Where such tax reliefs exist, fiscal drag can erode their value, with particularly strong effects on low-wage earners. During the period under review, while many countries cut headline tax rates or introduced more generous tax concessions, such moves often failed to reduce individual earners’ tax bills in any significant way. The fiscal drag effect was especially strong in countries whose tax rates rose sharply as earnings increased or where earnings growth was above-average.
http://www.oecd.org/document/7/0,3343,en_2649_34487_40255097_1_1_1_1,00.html

#178 Tre on 12.01.10 at 5:25 pm

I learned that the Wild Rose has been replaced as Alberta’s Provincial icon by the Naked Cowboy.

#179 Mr. Plow on 12.01.10 at 5:36 pm

Just wondering if someone can direct me to where I would find the posts and comments from Summer of 2010?

I remember a lot of posts from various guests that we should expect a 10-20% drop in prices by years end.

Well we are almost there and I would like to call them to task to see where they are at with their thoughts now? I am curious to know how long they will be waiting with baited breath for a market collapse.

I’m not saying I know if there will be one or won’t be one, I am just curious to know how long their attitude will go on for. I mean for some people they have been coming here for years calling for a collapse.

“Prices are going to collapse because rates will rise at least 3%”
“Prices are going to collapse because of poor lending practices”
“Prices are going to collapse because…”

This isn’t a question of who is right and who is wrong, just wanted to know if they all still feel the same.

Or perhaps maybe we are in year 3 of our market “collapse”. I think I remember taking a 25% haircut in 2008, prices haven’t really changed since then. They have gone up and down month to month but really a price today is the same as 2008. I’m not saying that makes real estate a good investment, but I am wondering if any of these people consider 2008 as the “crash” and we are currently in a “melt” or holding pattern for the next while which may include some yearly price drops of 3-5%. But nothing in the realm of a 10-20% reduction in 6 months.

Food for thought.

#180 Mr. Plow on 12.01.10 at 5:40 pm

Why does everyone obsess about DA?

The man has said about a thousand times that he is here to present a different opinion. One I would argue is likely more informed than most people here since he works in real estate everyday.

If you don’t care what he has to say, then don’t read his comments. I mean it seems pretty simple.

I know I could care less about what is going on in Australia, but it doesn’t make their contribution worthless, just means I skip it. But someone else might find it helpful.

Maybe that approach is too mature for some and they prefer the online daily squabble.

#181 Canned Goods and Buckshot on 12.01.10 at 5:48 pm

#112 Burnt Norton

HOV lanes for horse drawn carriages and franchised injections sites. You sir, have the Post of the Day for humour!

#182 Brian1 on 12.01.10 at 5:54 pm

90,000 jobs in U.S. and Dow jumps 200 points. These are Christmas jobs and not many. I think it is another Bear Market rally.

#183 Devil's Advocate on 12.01.10 at 5:58 pm

#171 kitchener1

I have two children who are just now embarking upon their own adult lives amid everything that is going on. They may have to leave Kelowna to find the employment they seek and still will be faced with many a challenge. That is life – no one said it was going to be easy.

I have a good view of what the realities are Kitchener1 and I have still a very good recollection of the challenges my wife and I overcame when we started out which, trust me, were just as plentiful as they are today.

This too shall pass

#184 Agio on 12.01.10 at 6:21 pm

Devil’s Advocate
If you were a Wiki entry you’d be deleted.

#185 Lonely Limey on 12.01.10 at 6:35 pm

@ Hobbitt #173

Couldn’t agree more with you on that one……. Must rush, have to get new tires, pop to the bank to deposit a check and pick a color for our xmas lights.

#186 realpaul on 12.01.10 at 6:58 pm

Great that you should point out that the reckoning is for the housing slowdown to last approx 12 years before breaking. Thats exactly how long it took for the last real estate cycle ( late 80’…early nineties) to fully deflate. The trough after exhaustion was another 2 years before people started looking at anything past $500K….because that was when the lowest intrest rates in history came gushing out to save the tech bubble…..oh, that didn’t work…but we did get ultra low rates for another decade to spark the housing bubble again with the money that was supposed to save the tech industry from collapsing and instead created the real estate bubble instead….whew…I’m getting dizzy.

They can’t lower rates lower than zero…..they can reintroduce the fifty year mortgage….would that help?

Pretty much everyone who bought in the past year or so is now losing money…both in price depreciation and the intrest charges that have them beggared and on their knees. I can’t see this as getting any better. 12 years is a long time to carry a losing…soul sucking, family destroying and child denying, vacation killing alligator mortgage.

Anyone buying into this swoon is really going to get their ass kicked…..apropos for the guys and gals in cowboy town. It’ll be a bit more of a muffin here in Birkenstock Land but because the average debt is double here its really going to be nasty all the same.

But wouldn’t you know it…just when a majority of people have zero equity to borrow to invest, the stocl market has torn off the hinges and is leaving the housing suckers behind to wallow in misery as they look on with angst and desperation at a bleaker than average future. ‘House rich’ is something of an oxymoron at this point.

#187 jess on 12.01.10 at 7:10 pm

Dec. 1 (Bloomberg) — The Federal Reserve, under orders from Congress, plans today to identify recipients of $3.3 trillion in emergency aid the central bank provided as it fought the worst financial crisis since the Great Depression.

The Fed intends to post the data on its website at midday in Washington to comply with a provision in July’s Dodd-Frank law overhauling financial regulation. The information spans six loan programs as well as currency swaps with other central banks, purchases of mortgage-backed securities and the rescues of Bear Stearns Cos. and AIG

#188 Brampton housing bubble crashing on 12.01.10 at 7:30 pm

kitchener1 #171

Brampton sales are so bad that now you will see houses go up in flames as people are faced with going bankrupt. News report today about a brampton home going up in flames with “no body home”. Sale in brampton are so bad that the Brampton RE board has yet to put out sales numbers for September. Brampton is the first house of cards which is now falling down hard. Word is spreading sales fell over 60% in September and October. Is it any wonder why Brampton has many power of sales?

#189 David B on 12.01.10 at 7:34 pm

#169 UrbanCowboy on 12.01.10 at 3:37 pm

Breaking News on CNN has stated they loaned Trillions ( think it was 6!) to their banks almost interest free a couple of years ago. Trllions! Some have paid back the money others failed. And “Futures are up” sending the stock maket up due to big time spending by broke people and starving people. go figure?

So the banks will win in Calgary and the middle class will loose even if homes fall in value by 20-30%

#190 choda on 12.01.10 at 7:43 pm

my family physician whom i just saw for a flu shot just came back from vegas (i’m headed there myself next week for 4 days, staying at the Encore Wynn, flights and taxes and fees included for $720 for three people. not $720 each!)

he told me he’s buying a condo for $40k. wouldn’t let me talk him out of it. no point trying. he’s a doctor and i’m merely a patient. ah well. i’ll be sure to ask him about it next year when i go back for flu shot.

#191 Ben on 12.01.10 at 7:44 pm

Dead Advocate is on here 15+ times a day because the realturd industry is dead and he has nothing else to do.

#192 choda on 12.01.10 at 7:46 pm

i’m a mortgage broker by trade by the way….and a real estate investor. guess that doesn’t make me a little bit more qualified than a family doctor in matters related to real estate. what am i doing with my portfolio. unloading what i can and praying to god i’m not too late lol.

#193 Devil's Advocate on 12.01.10 at 7:48 pm

#185 Brian1 on 12.01.10 at 5:54 pm
90,000 jobs in U.S. and Dow jumps 200 points. These are Christmas jobs and not many. I think it is another Bear Market rally.

Do you always look a gift horse in the mouth.

#194 Chris in Langley on 12.01.10 at 7:57 pm

Devil’s Advocate on 12.01.10 at 2:29 pm
I will gladly leave these blogs given one of two events.

If enough people email me at [email protected] telling me to take a hike and not half as many do so requesting that I stay.

Or Garth bans me

Trust me I don’t want to be where I am not wanted like a fart in an elevator. Nor do I want to beat my head against a wall providing “food for thought” to pups and poodles who are too busy smelling each others rear ends.

Is this just another hollow promise or the real deal?
Besides, what number is enough?

Why haven’t you figured out that you aren’t the main show, Garth is?

Start your own blog if you’re so confident that people want to read what you have to say.

**Where did you get the twisted idea that people who read this blog want you to be the one educating them?

#195 S.B. on 12.01.10 at 7:57 pm

Was this posted?

http://www.cp24.com/servlet/an/local/CTVNews/20101201/101201_rich/20101201/?hub=CP24Home

Rich getting richer while middle class stagnates, report says

OTTAWA — Canada has entered a 1920s-like Gilded Age, where the super-rich consolidate their wealth while the middle class stagnates.

That’s the conclusion of a new study based on income-tax forms filed up until 2007, showing that the richest one per cent of Canadians took home 13.8 per cent of all incomes claimed that year.

The share of total income going to the richest of the rich has risen steadily since the early 1980s, reversing a long-term trend toward a more equal distribution of the country’s income during the postwar ’50s, ’60s and ’70s, the study says.

#196 RE Bear on 12.01.10 at 8:02 pm

#66 TheBestPlaceonEarth on 12.01.10 at 3:16 am

Just in time for another one of your delusional schizophrenic comments. Most likely comorbid with some other extreme type of mental illness where you need attention from others to validate yourself.

#197 Chris in Langley on 12.01.10 at 8:14 pm

DA, we all know that you religiously read the posts. Nobody responds to more posts than you. You’re the champ.

So…instead of a thinly veiled attempt at credibility…again, simply count the number of posts that people are fed up with you and count the random few where people are saying how much they appreciate your forced feeding.

You claim intellingence, then certainly you can do the math that is blatantly obvious to most people on this post.

Remember such warm references to your posts such as “brain splatter.”

Or how about Garth stating you are “displaying an incredible and unethical side of your character.”

Garth is the author of the blog…remember. He’s the reason we come here, not you. So, if the author states that in one of your recent posts you are “displaying an incredible and unethical side of your character,” it’s clear your not much of a fit for the readers of this blog.

Again, you are providing unsolicited advice that many of us have made really clear we have little to no interest in.

#198 Devil's Advocate on 12.01.10 at 8:15 pm

Here’s an exercise for the pups and poodles:
My information says that the average U.S. home value peaked at $313,600 in 2007. It has since dropped to $270,900 for the last complete year 2009. That is a simple 13.61% fall.

http://www.census.gov/const/uspriceann.pdf

Now I am sure we would all agree that Canada lags behind the US and as has been said on these blogs a million times what is happening there is bound to happen here because “We are no different” and “we are not immune” So what has happened there is bound to happen here but that we have had a bit of an advance warning it may not be so severe here as it is there – right?

Well what is so friggin’ terrifying about a 13.61% fall in the average national property value anyway?

Many would say the US has pretty much achieved near bottom. We can’t be far behind and I know our property values have decreased most of that 13.61% the US has already experienced so what is the big deal.

Ok, I get it you doubt my figures… well then do your own research and tell me what you come up with for the US national average price drop peak to trough thus far. Don’t take my word for it do your own research.

Of course you could take all the “EXTREME” examples like Detroit or Phoenix for that matter but I’m talking national averages here.

No, things are not nearly so bad as an uninformed visitor to this site might be led to believe… not at all.

Currently 24% of all US families with mortgages are under water. Over four million people have stopped paying their mortgages because there is no point. Property values in virtually all sun belt states have declined 30-70%, depending on the market. House prices fallen for four years continuously. The median home price is $174,500, which fell 14.9% in the last year alone, and is now half of the Canadian average. The source you gave was for new homes only, not all homes and does not reflect resale conditions or the burden faced by existing homeowners. This post is appalling. — Garth

#199 Chris in Langley on 12.01.10 at 8:24 pm

The reason DA won’t use his real name is because he’d have to be accountable for his landish blabber.
Can you imagine what a potential client would think of him if they read some of his posts?
He is a man of integrity!

#200 45north on 12.01.10 at 8:40 pm

“Brampton housing bubble crashing”: Word is spreading sales fell over 60% in September and October.

word spreads.

I used to play soccer with Tony at Birchmount Stadium in Scarborough. Tony posted here that Brampton would never go down. Well it is going down.

Kitchener1: in Brampton the bank takes the home and you see a surge in power-of-sales.

word spreads

#201 Nostradamus Le Mad Vlad on 12.01.10 at 8:47 pm

-
#120 AlbertaBound — Excellent post!

#136 Devil’s Advocate — Too funny! That’s why I’m retired — plenty of free time to enjoy the finer things of life — no more punching in / out for me!

#141 what to do — Nicely done! Hammer those banks ’til it hurts!

A couple of diversions — Self-employment and for men Don’t ogle!

#202 Herb on 12.01.10 at 8:50 pm

In other news …

http://www.winnipegfreepress.com/canada/breakingnews/ultra-rich-getting-richer-while-middle-class-stagnates-report-says-111096344.html

So what else is new?

#203 Yank on 12.01.10 at 8:51 pm

“If you mean Calgary is like Denver then I supposed it’s the most American city in Canada. Only without the roads.”

But in one respect it’s most not an American city. Yankees from the mid-west, mountain west, and northeast are not OK with snow all over the roads all winter long. In contrast, Albertans seem cool with it and just drive over the snow & ice covered roads.

After the blizzard of ’76 Chicagians voted out the mayor when the streets weren’t cleared fast enough. It’s that Yankee efficiency and love of roads. In Minneapolis, Chicago, Denver, the snow is off the streets quickly.

Lots of shadow inventory in Alberta.

#204 jess on 12.01.10 at 9:10 pm

Liar loans/ fake business were really funding
PERSONAL PLEASURE LOANS

Industry Canada’s federal small business loan program offered through chartered banks.The government guarantees 85 per cent of the loan. When loans go into default, taxpayer money refunds the bank !

The 35 loans range in value from $50,000 to $1.05 million.
http://www.thestar.com/news/investigations/government/article/897071–how-fraud-artists-ripped-off-16-million-in-federal-loans

#205 S.B. on 12.01.10 at 9:18 pm

Manwhile, down South in War-nation:

Holidays about survival as jobless benefits end
By TOM BREEN – Associated Press Shawn Slonsky’s children know by now not to give him Christmas lists filled with the latest gizmos. The 44-year-old union electrician is one of nearly 2 million Americans whose extended unemployment benefits will run out this month, making the holiday season less about celebration than survival.

“We’ll put up decorations, but we just don’t have the money for a Christmas tree,” Slonsky said.

Benefits that had been extended up to 99 weeks started running out Wednesday. Unless Congress approves a longer extension, the Labor Department estimates about 2 million people will be cut off by Christmas.

Read more: http://www.kentucky.com/2010/12/01/1547391/2-million-lose-jobless-benefits.html#ixzz16ub2Mbv5

#206 S.B. on 12.01.10 at 9:21 pm

#147 Devil’s Advocate post – do not send email to this cad! His appeal is just a shameless ploy for generating leads (suckers). :x

#207 AG Sage on 12.01.10 at 9:30 pm

But Calgary is different, right?

/snark

These comments are such a deja vu trip.

I have to confess to some amusement in observing the cusp of this bubble, the gut wrenching moment on the roller coaster when the racket cuts out and for a handful of heartbeats the string of cars hangs in kind of zero g. Especially given the attitude Americans got from Canadians when our bubble burst earlier. ;-)

#208 Timing is Everything on 12.01.10 at 9:36 pm

#147 Devil’s Advocate

It’s a free country (give or take) DA.
Do as you wish. I, personally don’t care, one way or the other.

#209 Publius Enigma on 12.01.10 at 9:58 pm

#201 Devil’s Advocate on 12.01.10 at 8:15 pm

“No, things are not nearly so bad as an uninformed visitor to this site might be led to believe… not at all.”

This is, unequivocally, the most moronic thing you’ve ever posted on this blog.

Your complete lack of understanding of what has happened, and indeed what continues to happen in your own industry in the United States is truly stunning.

Galactic stupidity. Truly epic stuff.

#210 Nostradamus Le Mad Vlad on 12.01.10 at 10:06 pm

-
Evidently TSHTF big time, and posters are in-fighting? Maybe it’s contagious.

EU Bigger Stability Fund The US backs the bigger fund, and with war games (destabilization) happening off NKorea as well as Israel opening fire on Lebanon earlier today, they might as well put some extra cash in the bank. If the bank is still solvent. Another war in Lebanon will most likely bring in Syria and Iran, and the conflict could spread across the region like a wildfire, out of control.

2:45 clip Medvedev ramps up missile talk, etc. He may have to. See above. “Q. Why ask for a major block that trades outside of the dollar? A. You can see the answer straight away…. OUTSIDE of the reserve currency! Currency wars are underway…” wrh.com.

Blueprint “Secret ‘Trigger’ and blueprint for emergency domestic military crackdown plan revealed”.

US – EU bailout “The EU is in trouble because like the US they are enslaved in the grip of a private central bank issuing the public currency at interest.

“The EU banks are in trouble because like Wall Street they have gone on a gambling binge with derivatives. And the US Government is looting the American people to prop up the bankers of Europe.” wrh.com.

9:45 clip Nigel Farrage, on debts in Ireland, collapse of various countries and the scale of the problem.

4:58 clip Aaron Russo speaks one world govt., the elite, etc.

When people are as mad as hell and take collective action, it can work for the greater good.

Euro banks angry. Why? “The IMF does not have any money. Like the Federal Reserve what it hands out is more debt! The US is effectively acting as a co-signer to the loan to the EU, which means if the EU collapses, or simply refuses to repay as Iceland and now Ireland look to be doing.” wrh.com.

1:02 clip TARP masquerading as MasterCard. Spoof.

Too much snow, not enough money in Sweden to clear all the snow.

Govt. interference Asking about solar panels, home-grown food, etc.

Bank Accounts are disappearing.

DHS Whistleblower Watch out for this here in Canada soon.

7:28 clip FBI creating a police state in the US. RCMP here?

#211 S.B. on 12.01.10 at 11:02 pm

Good news for DA! Granite and Stainless!

“Narcissistic personality disorder, characterized by an inflated sense of self-importance and the need for constant attention, has been eliminated from the upcoming manual of mental disorders, which psychiatrists use to diagnose mental illness.

As Charles Zanor reports in today’s Science Times, the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders — due out in 2013 and known as D.S.M.-5 — has eliminated five of the 10 personality disorders that are listed in the current edition. The best known of these is narcissistic personality disorder.

#212 Leanne on 12.01.10 at 11:06 pm

#90 Susan from London area: This picture held my attention for quite some time, memories of Calgary ran thru my mind. I pondered many questions, then I realized what had caught my eye.
Damn, nice Boots. Okay now on to the text…..

Like all the other women here, I read this blog for the articles.

#213 Only The Bankers Laugh on 12.01.10 at 11:12 pm

DA – This is the showstopper

…… “For example – I am a HUGE advocate of increasing the minimum qualifications in order to become a REALTOR to include a required relevant university undergraduate degree.”

Community college, one semester would be a stretch to keep even the village idiot engaged.

Just because you became a realtor after taking a university education does not change the education level required to mislead young hormone nesting families with significantly more market info and many motherhood homeowning statements.

Thanks for the belly laugh.

Hope you stick around. You are getting really funny.

#214 Got A Watch on 12.01.10 at 11:12 pm

“Currently 24% of all US families with mortgages are under water. Over four million people have stopped paying their mortgages because there is no point. Property values in virtually all sun belt states have declined 30-70%, depending on the market. House prices fallen for four years continuously. The median home price is $174,500, which fell 14.9% in the last year alone, and is now half of the Canadian average. The source you gave was for new homes only, not all homes and does not reflect resale conditions or the burden faced by existing homeowners. This post is appalling”

LOL

Garth, please stop beating with the ugly logic stick. You know you can never argue facts, they are not relevant.

Most people probably wouldn’t mind DA, if he only posted a couple comments a day. He’s just a realtor, after all, you don’t expect him to be actually accquainted with reality, do you. Expectations are low anyway. I just get annoyed with him because of his attitude.

True story, as God is my witness: when I was a young naive realtor, around 1989 maybe, I was showing a house to a young couple as a buyers agent, it was not my listing. Anyway, we’re walking out, and another couple were just arriving with their agent. This guy was a local “top-producer” I recognized, for the well known national chain with the red, white and blue balloon. As we are walking past, and I remember this clear as day, he turns to his younger clients, and says “I’ve shown you 3 houses now, don’t waste my time anymore, and let’s make an offer on this one” with a deadpan delivery, as he’s checking his watch. Before they had even seen the inside of the house. I just shook my head.

And people wonder why I have no respect for the industry.

#215 Onemorething on 12.01.10 at 11:14 pm

All Garth needs to do is limit the # of DA’s postings to 1 per blog entry and he will leave via a stroke!

On the other hand I always enjoys NOS LMV’s contribution along with Aussie Roy’s and dont mind how many times these lads post!

I’m done talking about the inevitable and having that “RE Discussion” with my families in Vancouver and Brisbane or my views on Asia.

My bunker, boat and Land Rover Defender are ready for action! Did I tell you bunker is lined with silver, my hull the same and my Rover frame!

#216 Oasis on 12.01.10 at 11:19 pm

#177 dark sad person on 12.01.10 at 4:53 pm
Prove your case-or disprove mine with more then just BS-
_________________________________________

1. your “case” is easily disproved. you claim that the velocity of money needs to increase to get hyperinflation. that’s false. the fed tomorrow can print as many trillions an monetize every debt the US gov’t and banks owe, and instantly the dollar collapses and you get hyperinflation. there ends your discussion on velocity of money, and why it’s not relevant to have hyperinflation.

2. money supply has never collapsed. if you exclude goverment “credit”, M3 is down a wopping 2% from it’s peak. shock. that’s not deflation. factor in government “credit” and M3 is now up 10%.

3. Japan never experienced a deflation. they experienced stable price levels. anyone looking at the data can clearly see that.

yet again. deflation is not possible with fiat currencies. only after they completely hyperinflate themselves away, and are destroyed, and new currencies are created… otherwise, you’ll just have perpetual inflation. only with a gold standard can you have deflation.

#217 An Cat Dubh on 12.01.10 at 11:35 pm

My BIL and sister bought a house outside Phoenix at the peak of real estate prices. He fortuanately makes a good income, so it will not hurt them as much. They bought the house for a home not an investment. He never bought new cars to impress people he doesn’t know or who could care less about him or spent money foolishly.
Choda: You should do more research about flu shots before taking them. ie Dr Russell Blaylock, Dr. Tenpenny, etc.

#218 Devil's Advocate on 12.01.10 at 11:37 pm

Currently 24% of all US families with mortgages are under water. – Garth

That in itself does not mean property values have dropped so. Many homeowners refinanced topping up their mortgage to unrealistically inflated bank property appraisals. The figure is correct but you have not fully explained how and why. This is not a real estate market failing it is a credit failing that is and rightfully should be negated.

Over four million people have stopped paying their mortgages because there is no point.- Garth

I don’t doubt it. Shit happens. If I lend a bum on the street $10.00 and ask that he pay it back by mailing it to me when he has it I kinda think it’s not likely to happen. The banks were irresponsible and are now seeing the consequences – unfortunately not apparently paying for their foolhardiness. It’s easy to put more customers on credit and have sales look good – but your receivables are eventually going to take a hit because of it. Can’t have your cake and eat it too. .

Again this is not a real estate phenomena this is a credit failing. The fundamental want and need of real estate has not dissipated so much as the tightening of credit, and rightfully so, has unveiled those who should never have been able to buy in the first place or those who could not deny themselves the banks willingness to help them keep up with the Jones.

Your demographic arguments pertaining to the future of real estate are sound but these “credit matters” are almost superficial to the mechanics of the real market. That they are being weeded from the system means little in that they should not have been there in the first place. We are, south and north of the boarder, getting back to basics and a “normal” market.

Hell Garth you didn’t even see that real estate party of the last five or so years coming when you wrote your prior books… it was a credit phenomena… a nonleniar event which has lived it’s course. Your capitalizing on it cheapens your arguement. Yes it happened and now it is, rightfully, being dealt with. Get back to basics instead of picking the most sensational aspects you can find that in the long run really mean little.

Property values in virtually all sun belt states have declined 30-70%, depending on the market – Garth.

Again my understanding is that prices have dropped on average less than 14.0% nationally from thier peak (see below for further explanation of how I came up with that figure). Even in Phoenix there are some areas which have not dropped much at all. Of those places which have more significantly there is a reason. Remember location, location, location. Pheonix is a big city which covers a large geographical area Garth – a very big city. And if something has dropped 30 – 70% there must be something somewhere else that has risen in order to achieve the national average.

House prices fallen for four years continuously. The median home price is $174,500, which fell 14.9% in the last year alone, and is now half of the Canadian average. – Garth

Home prices in the U.S. have always looked like bargains compared to Canada. For as long as I can remember traveling in the US I have been envious of the prices there. 14.9% in the last year alone? I find that hard to believe. Care to give a proof source of the US national average or median which ever you prefer? Again my information is otherwise but I can understand that NAR and the individual REALTORS I know south may have a bias in your eyes so I will seek other sources if you don’t provide me yours.

The source you gave was for new homes only, not all homes and does not reflect resale conditions or the burden faced by existing homeowners. – Garth

Granted the original figure I was told by a REALTOR friend in the US was 12.8% but I wanted to confirm it in writing knowing your readers would doubt anything less. All I could find was the “new home” grid. In my experience new parallels resale though Garth. Why would they not? It’s not an apples to oranges thing, it’s the “supply” of homes a home is a home A greater inventory of newly created new affects the overall supply and pushes the price of both new and resale down. The curtailing of new supply diminishes all and pulls prices up. Some actually prefer the resale market for the location factor. I don’t buy the “new” is different than “resale” argument other than the new might have a higher median or average but the price drop would be step for step in tandem.

This post is appalling. — Garth

You are right. You have raised some interesting questions which I will most certainly investigate if only to satisfy my own curiosity. Might I have caused you some similar pause for thought on the gaps in your own?

Anyway my friend I have received exactly twice as many emails emphatically insisting, with most colourful language and a scary degree of hate, that I leave these blogs as those who kindly ask that I stay. While technically according to my promise I could stay I will gracefully bow to democracy and leave you to yourselves.

Nothing new here anyway and I suspect won’t be any time soon ;-)

#219 Devil's Advocate on 12.01.10 at 11:54 pm

Actually the “stay” votes are starting to roll in fast and furious. I suspect that my supporters are those who actually live above ground, own homes and have jobs.. people who know life is what you make of it.

But don’t worry pups and poodles we will make sure the world keeps chuggin along. Some day you might wanna try venture out and have a look at what we have accomplished. Nah on second thought don’t bother – it’ll only sadden you to see what you missed.

Come on now pups and poodles you can do it… get that vote up to well above 2 to 1.

send your vote “yeh” or “nay” to [email protected]

#220 Devil's Advocate on 12.01.10 at 11:55 pm

Polls close at midnight

#221 CalgaryBoy on 12.02.10 at 1:15 am

Thanks for the post, Garth! And thanks to the informative blogs. It’s good to hear that prices of houses in Calgary are coming down! I’m doing the waiting game and will wait until it’s the right time.

#222 Denisa on 12.02.10 at 1:34 am

“When others are fighting on the sidewalk, the smart ones will be on the road” Quote from MONEY ROAD By Garth Turner

#223 tran, Calgary on 12.02.10 at 1:46 am

Foreclosure numbers high in Alberta

http://calgary.ctv.ca/servlet/an/local/CTVNews/20101130/CGY_alberta_foreclosures_101130/20101130/?hub=CalgaryHome

Early Christmas Sale….

#224 Taxpayer like everyone else on 12.02.10 at 3:25 am

Oasis/ Dark Sad. I’ll settle this for you. You’re both right. Oh well, I guess that doesnt settle it. But I do ask that you consider each others points carefully on the
de/in/hyperinflation matter.

I agree with O Dave @70 that DSP presents the best data and research with regards to what is happening with the moolah. Currently it sits, doing nothing. Deflation? Maybe, maybe not. But Pretty hard to get inflation that
way.

Garth has often lectured us on hyperinflation, which he is
careful to note that it is a political event, not a
monetary one. Oasis has described the political action
required to make it happen. There is no need for data on
this, as it is an arguement based on logic. What can be argued is whether the required action will take place.

I dont know if that helped at all, but at least I tried…..

#225 GregW, Oakville on 12.02.10 at 11:01 am

Hi #213 Nostradamus, Thanks for the links. The last one is great!

The guy in the last link you gave is saying at he see it.
We need people like him to run for office to help protect all human beings rights and freedoms.
Fallow the money.

Does anyone know any young person (maybe not to bright) that might be entrapped or used, who should be made aware that it take just one or a few unscrupulous person to lead them down a path that will wreck there lives or others lives.

I trust most public officers are quit fourth right and do a great job keeping the peace, and don’t supply people with bomb, or try and start riots at peaceful yet loud protest. But it has happened before, so we all need to stay vigilant.

#226 dark sad person on 12.02.10 at 11:44 am

#219 Oasis on 12.01.10 at 11:19 pm

#177 dark sad person on 12.01.10 at 4:53 pm
Prove your case-or disprove mine with more then just BS-
_________________________________________

1. your “case” is easily disproved. you claim that the velocity of money needs to increase to get hyperinflation. that’s false. the fed tomorrow can print as many trillions an monetize every debt the US gov’t and banks owe, and instantly the dollar collapses and you get hyperinflation. there ends your discussion on velocity of money, and why it’s not relevant to have hyperinflation.

2. money supply has never collapsed. if you exclude goverment “credit”, M3 is down a wopping 2% from it’s peak. shock. that’s not deflation. factor in government “credit” and M3 is now up 10%.

3. Japan never experienced a deflation. they experienced stable price levels. anyone looking at the data can clearly see that.

yet again. deflation is not possible with fiat currencies. only after they completely hyperinflate themselves away, and are destroyed, and new currencies are created… otherwise, you’ll just have perpetual inflation. only with a gold standard can you have deflation.

****************************

You speak of events and monetary data that you know nothing about–

1–Tokyo: Average Nationwide Land Price Falls 4.6% . The average nationwide land price as of Jan. 1 was down 4.6% on the year, for the second straight annual drop

The average residential land price fell 4.2% on the year, while the average commercial property value dropped 6.1%. The residential land price fell to the 1983 level, while the commercial property price plummeted to roughly 30% of the peak value recorded in 1991, the lowest since the survey began

http://www.finchannel.com/news_flash/R-Estate/60590_Tokyo:_Average_Nationwide_Land_Price_Falls_4.6%25/

2– Why would you use M3 to Gage Money Supply?

It is a useless measurement for tracking money supply-

There are many components to M3–such as MZM which is nothing more then MMMF’s-in other words-how do you know whether M3 is expanding or contracting as huge Mutual Funds move Money transfers in or out of MZM?

So tell me how-taking “existing” money out of Bank account’s and putting it into MMMF’s-or doing the reverse effects the “Money supply”?

All that does is transfers “existing” Money from one place to another-

Here are “some” of your M3 Components-

Institutional Money Funds

Large Time Deposits at Commercial Banks

Total Time and Savings Deposits at Commercial Banks

Also M3 includes Traveler checks and a myriad of other useless data–have a look-

http://research.stlouisfed.org/fred2/categories/28

3–Refer to 1 again-

Here’s the facts for you–You can have Inflation in Fiat/Credit based currencies and you can have Deflation-Japan is proof–The US is proof and soon you’ll see it here-

Well–maybe you wont–
You do not understand that Credit “is” Money and it expands and contracts-ie: Inflation and Deflation-

Deny it all you want-the facts stare you in the face-

#227 Brad on 12.02.10 at 12:36 pm

Devil’s Advocate,

Re: 7% down. You were looking for a source and I provided it. It doesn’t really matter if there was a discrepancy between ‘average’ and first time home buyer. 50% of mortgages in 2008 were from people who put down 5%. If first time home buyers are averaging around 7% down – and NOT the average Canadian – it’s still a huge issue. This is exactly what happened in the States. As soon as house prices declined 5-10%, then these people lost all of their equity and were in negative equity (it only took 5% of homeowners in the States to go into negative equity to pop the bubble). Once one house in a neighbourhood is reduced 10% and priced to sell, the whole neighbourhood drops 10% and poof there goes your perceived wealth and this extinguishes credit expansion. Canadians sign up for 5 year terms, so when they have to renew at higher interest rates, there will be significant issues.

#228 Mr. Plow on 12.02.10 at 2:16 pm

#226 tran, Calgary

Yawn…. 0.78%!

Wake me when the stat is actually high enough to be worth looking at.