It’s often useful to read the comments of people who loathe you. Happily, I have no trouble finding them.
Just this weekend a little Garthy hate-on took place here, which seems to be the hang-out of real estate lenders, theocons and a couple of people who were booted from this blog for being serial jerks. Here are some of my favs:
Garth Turner is fading into anonymity, running a bizarre blog resorting to extreme statements, posting animal porn pictures, basically doing whatever it takes to capture some attention.
(Do the animals know when it’s porn?)
He and most of the blog dogs HOPE for a financial disaster to hit all and every homeowner, which in turn they believe will allow them to become homeowners themselves or become RE magnates by scooping cheap houses and flipping them 2 years down the road for %500 gains.
(And I thought we hoped for houses people could afford.)
Garth is trying to make a buck by selling fear. If a real estate publisher offered him a job to pump real estate instead, he will gladly switch to doing just that. He has absolutely no credibility.
(But I have enough money to do what I want. And you’re reading it.)
Garth thought that was going to be an easy call and the time for him to shine (for once), just to be caught with his pants down once again, showing his lack of understanding of how macroeconomics works. As always he’s blaming others for own failure, in this case Mr. Carney, Mr. Flaherty, Mr. Harper …
(Yes, for everything you need to know about macroeconomics, ask F.)
Turner will keep predicting a crash and eventually he might be right but that doesn’t make him any smarter than my dog at timing home prices.
(Your dog is always welcome here.)
Well, you get the drift. Such character trashing certainly underscores the fact I irritate some people, namely those who have a stake in convincing Sally and Joe the economy’s mending, housing is a boffo investment, debt is good, and the government has everything figured out. The technique of choice is not to criticize the arguments advanced for our economic and financial future, but rather to shred the guy making them. Trust me, I’ve lived this before. Water. Duck’s back.
The interesting part is 2011 has considerable potential to really suck. I figure the real estate and political establishments know this. If they’ve been listening to smart people like Stephen Jarislowsky, Robert Shiller, David Rosenberg or even Mark Carney, there’s no doubt. All are warning that Canadians have wandered into the same debt orgy that skunked Americans, while our lending standards have slipped and house prices inflated. This year seems certain to bring higher interest rates, more taxes, less manufacturing, less exporting (dollar at parity) along with high unemployment and seven provinces that can’t balance their budgets. How is this a ‘recovery’?
My message is not that Toronto will become Detroit or Vancouver turn into Phoenix. But there will be a correction, followed by an unknown number of years of slow melt. That means three groups of people are at serious risk:
- Young couples who have purchased in the last two years with 5/35 Canadian subprimes. It will take only a market sneeze to submerge them.
- Anyone with the bulk of their net worth – over 60% – in residential real estate. Diversify. Now.
- Boomers or near-retirees who are house-rich and investment-poor. Soon you could be just poor.
As argued here, any surge in listings – and it looks like a mother of one is coming – will only exacerbate the supply-demand imbalance behind six consecutive months of year-over-year sales declines, and a price plop already shaping markets like Calgary and Edmonton. That this would happen when long-term mortgages are still in the 3% range – bizarrely cheap – should make it clear there’s no real estate rebound on the distant horizon.
So, am I the poster boy for a Canadian real estate crash? Hardly. I’m just hot.
And I’m wondering why the neocons and the realtors in this country need to continuously hump housing and cheer rising prices. I mean, wouldn’t it be cool if we had a politician like Grant Shapps?
The British housing minister calls the runup in real estate values there over the last decade “horrendous” and actually applauds falling prices. “We believe that property should be primarily thought of as a place to be your home. The main thing everyone requires for their subsistence is a roof over their head and when that basic human need becomes too expensive for average citizens to afford, something is out of kilter.”
Hey, I wonder if he gets accused of fearmongering? Extremism? Animal porn?
Let’s hope attempts to quell a contrarian voice are no harbinger of what awaits us.