Getting ugly

A full-time Victoria realtor, with many years of experience, posts this on her Facebook page:

Seeking part time work. Hit me up if you know anyone hiring. The Real Estate market seems to have come to a stand still and one can only deliver so many flyers. I suppose many don’t want to list over the holidays!!

In Toronto, amid growing panic in the forest of condo towers, a noted broker sends out this email blast desperately marketing a project in trouble:

SAVE UP TO $35,000+!! HERE IS A RECAP OF WHY THIS IS SUCH A KILLER DEAL:
§  $18,000 + OFF STUDIOS AND 1 BED SUITES
§  $20,000 + OFF 1 BED + DEN SUITES
§  $30,000 + OFF 2 BED AND 2 BED + DEN SUITES
§  Permission to lease on Occupancy at $0.00 fee
§  Assignment Clause is reduced from $5000 to $0.00
DEPOSIT – only 5% down
UNITS ARE AS LOW AS $430/SF!!!  Neighbourhood averages are $500+ /SF.  THESE
ARE HANDS DOWN THE BEST PRICES IN DOWNTOWN TORONTO AND THIS WILL BE THE HIGHEST-END BUILDING IN QUEEN WEST.

In Vancouver, realtor Sam Wyatt tells his clients that prices are down as much as 23% on the once-unflappable Westside. He adds this:

Unfortunately, I do not subscribe to the wishful thinking that the Spring market will bring with it a change in the present market dynamics.  On the contrary, I suspect that we will see a new glut of listings hit the market from February through May and that in spite of increased sales volumes of the freshly lower priced properties, the MOI (months of inventory) will likely remain high.

Writing a piece for the parsimonious Globe and Mail, mortgage journalist Robert McLister details the fact record numbers of Boomers are now unable to pay off their mortgages before retirement. He adds:

The chilling truth is that there are just over 9.3 million Canadians age 55 and over and 43 per cent of them say they haven’t saved enough for retirement. But by 55, time is running out. A Statistics Canada study in 2009 found that people in their 70s spend only five per cent less than they did in their 40s. It takes years of saving to replace that kind of income and dispose of a mortgage.

Hmmm. Was it only 13 months ago the same guy started his column in Canadian Mortgage Trends with this statement?

Predictions of a Canadian housing crash have been unsubstantiated and have emanated largely from one man: Garth Turner.

Obviously when realtors, mortgage dudes, mainstream journalists and condo floggers are all singing variations of the same song, what comes next should be no great mystery. For the past two years it’s been apparent to me what pattern the Canadian housing correction would take, and we’re right on track. First a price reduction of about 15% nationally which takes roughly a year to roll out, followed by a languishing period of rolling decline – a melt. How long that lasts cannot yet be known, as it depends on economic growth, jobs, rates and the pace of US recovery.

Not all markets will behave the same, but all will be impacted. Parts of Vancouver and the Lower Mainland will lose 40% of their value (some are already edging 30%) while sleepy cities like Moncton will be barely affected. Montreal will suffer the extra burden of being in a province run by idiot idealists, while 416 will fare far better than 905. The GTA will end up being a housing microcosm, with some of its in-demand mini-markets barely affected other than longer DOM, while Brampton and Milton wither. Cottage markets everywhere will be smoked.

Shocking numbers of people who now work as realtors and mortgage lenders won’t be doing that by next summer. In fact the mortgage brokerage business will be on shaky ground, and likely rocked by a wave of consolidation. F will be under big pressure to buckle and reinstate 30-year ams and cash-backs. But Mark Carney will likely threaten to resign if he does.

There won’t be a crash, as the media defines it. But if you own a property you can’t sell, which has lost a fifth of its value, and is mortgaged for more than it’s now worth, what’s the difference? To you, that’s a crash. If you’re one of the three million Boomers who must sell to afford retirement, and the only buyers are vultures, then it’s a crash. If your desperate neighbour accepts an offer for 20% less than you thought your identical suburban house was worth, and you have only 15% equity, it’s a crash.

In many markets there is still time to prepare. To get liquid. Deal with debt. Downsize.

Or, you can have a nice Christmas.

191 comments ↓

#1 lilyjoe on 11.12.12 at 9:33 pm

Hope everyone survives Christmas! Wishful thinking

#2 Patiently waiting on 11.12.12 at 9:34 pm

Fiiiirst!!! But seriously, I have been scowering the Vancouver market mainly focusing on Richmond and I have not seen anything close to a 30% loss (even in single family homes). Or is Garth referring to those few properties that are popping up selling for 30% less than original asking price.

Or am I missing something?

#3 Angel on 11.12.12 at 9:35 pm

We’ve been dealing with our debt. Finally paid off the last student loans. Damned if I can remember what I really did with the money, or why it was I thought I needed a degree to begin with. So tempting to carry the loans longer, but interest rates can’t stay low forever. Preparing for the new world order.

#4 TRT on 11.12.12 at 9:37 pm

Almost a 30% correction already in Vancouver. About 10% to go!…to reach 40%!!

Blog Dogs must be very happy that 40% is within striking distance. Get your wallets ready in the Spring!!

#5 JayBe on 11.12.12 at 9:39 pm

Imma have a sweet Xmas G! Thanks!

#6 steve on 11.12.12 at 9:40 pm

nice

#7 t coates on 11.12.12 at 9:42 pm

i’m in my 60′s but i spend a lot less than i did when i was 40…i don’t buy kids clothes…books …i don’t put money in resp’s any more…no more rrsp’s…no union dues …no mortgage or car payments…half a tank of gas instead of 3 tanks every 2 weeks…no uic or canada pension…super low tax rates…i still take great vacations and still dress and eat as well as ever…hard to believe that the 70;s group is doing that badly

#8 Painted Toenails on 11.12.12 at 9:42 pm

Grabbed a quick coffee with a friend today. Her sister and husband are going to reno their house. They intend to make it a duplex. They won’t be living in either side tho’. They can’t afford that anymore.

Their heavenly destination after completing this fine plan?

Her parents.

I can’t decide who to feel most sorry for. The 45 year old “kids’ or the parents.

You might be wondering what brought these formerly high-living folks to the basement doorstop again.

No, not a job loss. Not sickness. No unbelievably freaky event.

Rather, an ordinary, commonplace event. Well, nowadays it is.

A consolidation refusal from the bank.

#9 Julia on 11.12.12 at 9:45 pm

Every Day I feel better and better about selling my house this past spring… Especially since it was about to need a ton of work done. Thanks for the good feelings Garth! I’ve been warning people for years about this but until a few weeks ago they all just said I was nuts.

BTW are there any implications of Capriet’s big sell off?
http://dcnonl.com/nw/32556/re

#10 CalgaryBoy on 11.12.12 at 9:48 pm

Sounds like people who work in real estate are in a huge panic right now. How will they feel come next year at this time? Yikes!

I have a feeling that 2015 will be the year where vultures will take action! And I’m one of them! Hahaha!

#11 Trevor on 11.12.12 at 9:55 pm

Garth can’t be that far off the mark. Just accepted an offer sheet today on a Van Westside, 3 bdrm townhouse for 20% below original asking price & easily 30% below comparable asking prices in same complex or surrounding area. Comparables in the area have been on the market for months. In our case, (non-resident) sellers were in a bind… our good fortune.

#12 pathcontrolmonk on 11.12.12 at 9:57 pm

scroll down the listings of this Victoria realtor

http://www.ianheath.net/

about 2/3 of their listings are “New Price” with one “Amazing New Price”, and all of them have been there since at least the summer.

#13 Victor V on 11.12.12 at 10:08 pm

Ya mean properties can languish for over a year and prices can actually drop in Forest Hill?

http://themashcanada.blogspot.ca/2012/11/relistedprice-increase-190-forest-hill.html

$6,495,000 October 2011
$5,998,000 April 2012
$5,680,000 May 2012
$5,950,000 Nov 2012 — still not sold

#14 FTP - First Time Poster on 11.12.12 at 10:10 pm

Garth,

Excellent post today! I’d like to start off with a slow clap, Hollywood style if you dont mind.

#15 Smoking Man on 11.12.12 at 10:12 pm

Garth I so want you to be right, you have the most democratic blog in the world, we can be idiots and geniuses here. So long as we are not talking private parts anything goes.

Would so love for you to double your audience so I can have more idiots to chirp me about spelling. and I can school em back.

But, dude, SFH in GTA are not getting hit. It’s insane actually. Condo’s going the way of Jesus, nailed big time.

My take on SFH not enough of em.

#16 Chickenlittle on 11.12.12 at 10:16 pm

HAHA!! Only this blog would put the title “Getting Ugly” and have a picture of a baby in a costume for effect..priceless!! My profs would flip out! HAHA! You just cheered me right up thanks to you and your spiritually uplifting blog!

What costume? — Garth

#17 dam on 11.12.12 at 10:16 pm

” Montreal will suffer the extra burden of being in a province run by idiot idealists [...]”

Living in MTL, I can not agree more.

#18 2centsCdn on 11.12.12 at 10:16 pm

Patiently waiting on 11.12.12 at 9:34 pm

But seriously, I have been scowering the Vancouver market mainly focusing on Richmond and I have not seen anything close to a 30% loss (even in single family homes). Or is Garth referring to those few properties that are popping up selling for 30% less than original asking price.

Or am I missing something?

You have to go by what the places actually sell for … not what they are asking. Agents and the industry will try to keep a positive face on all of this. There won’t be a sign that says “Now 30% reduced!” (not for a while at least : ) You may actually see advertised prices only 10 to 15% lower than you’re used to … then its up the buyer to grind the next 10 to 15% out of the poor seller. As Garth has mentioned on previous blogs … hot area’s will still be hot and reductions will be less …. but average area’s or not so good area’s are ripe for low balling.

It may seem nasty …. but sellers (and their agents) hammered buyers when things were hot …. time to hammer back. That’s the business life …. and this IS business, don’t mistake that. This massive industry likes to play the dream home emotion card … but it’s ALL about the dollars (unfortunately).

#19 An Importation in Quebec on 11.12.12 at 10:16 pm

“Montreal will suffer the extra burden of being in a province run by idiot idealists”

Nope. Previous referendums and xenophoby have emptied the province of Anglos. That exodus pressed RE prices down for years.

Then here everything is controlled and corrupted to the bone. So, no, it might freeze but it wont fall by much.

#20 Victor V on 11.12.12 at 10:16 pm

Unloved in Lawrence Manor…So sad.

http://themashcanada.blogspot.ca/2012/11/price-drop-3-89-brucewood-crescent.html

$1,195,000 April 2012
$1,135,000 May 2012
$995,000 October 2012
$939,000 Nov 2012 — still not sold

#21 Yep.....uh huh..... on 11.12.12 at 10:18 pm

#4 TRT

People in West Van are by far the most delusional in Canada. A few houses listed at double or triple their assessed value, then reduced by a third does not equate to a 30% correction. We are nowhere near 30% yet. 

#22 Rainman on 11.12.12 at 10:19 pm

So hard to tell what to do? I’m house horny and living in Squamish… nothing is moving, but prices not changing too much?
There is a foreclosure that I may be able to get for about 20% off compared to comparables, but then the risk of how it will be left and of course someone could come in higher at court.
Mr. Garth… should I just wait until spring, or is 20% off worth jumping into?
My brain tells me wait… but I do enjoy owning and being able to do what I want around the house. Don’t know why I’m even asking, I know the answer… #$#&^

#23 Jounce on 11.12.12 at 10:23 pm

May not be a crash, but it will be a crush.

The weight of realty failure and its consequential indentured immobility will still feel just as suffocating as a crash, but last much, much longer.

It will feel lime a root canal that just does’t stop.

#24 Blacksheep on 11.12.12 at 10:24 pm

TRT # 4,

“Blog Dogs must be very happy that 40% is within striking distance. Get your wallets ready in the Spring!!”
————————————————–
This is wishful, realtor thinking.

I’ll let CalgaryBoy # 10 respond,
————————————————–
“I have a feeling that 2015 will be the year where vultures will take action! And I’m one of them! Hahaha!”
————————————————–
Bingo!

take care
Blacksheep

#25 Grim Reaper/Crypt Speculator on 11.12.12 at 10:25 pm

Hey…I hear there are job openings for Quebec mayors…

Bonuses are all the crow and poutine you can eat !

#26 anotherwhistleblower on 11.12.12 at 10:25 pm

I just saw one TH in Richmond sell for 13% lower than last most recent sale in the first half of the year. It may not seem like much in percentage terms…but the last sale was for $610,000….the TH sold went for $530,000 after being on the market for 4 months….in a very desirable downtown Richmond location close to the most sought after amenities and transit………of course you’ve already calculated that the guy that bought earlier in the year just lost $80,000….ouch. Its just the beginning of the pain for anyone who bought at the peak.

#27 Realtor # 1 on 11.12.12 at 10:25 pm

do you read that everyone ,

GTA – with some of its in-demand mini-markets barely affected

Prices will not reach 08/09 level.

#28 Brendan on 11.12.12 at 10:27 pm

Hi Garth,

My parents are in their mid 50′s now, probably going to retire at 65 give or take. They don’t own much of their home in Ottawa, maybe 15% equity and that is being generous. They plan to sell at retirement, downsize into a condo or rent.

Do you think the housing market could be in a good or at least not bad place in 10 years?

Thanks,

Brendan

#29 western observer on 11.12.12 at 10:30 pm

The spring market in Vancouver is going to be very robust.

As Garth has touted – real estate is very emotional.

As soon as properties dip in value here there will be a huge spike in sales.

Vancouver is very comparable to Seattle & San Francisco. These locations never dropped more than 20% and rebounded quite nicely from 2007.

Check zillow if you don’t believe.

I’m talking about SFH’s .

No 40% drop in Vancouver SFH’s median price.
People want to live here. Most attractive city in Canada
with the mildest weather.

#30 anotherwhistleblower on 11.12.12 at 10:33 pm

BANNED

#31 Paul on 11.12.12 at 10:34 pm

2 local papers here on the island didn’t have their real estate sections in the recent editions. I’ve been browsing them all summer. Was it a mistake or a waste of time and money for the agents to advertise? Have to wait and see what happens in this weeks edition.

#32 Jsan on 11.12.12 at 10:37 pm

And in Oil country, you know the center of the Oil universe or at least as some Albertans see it.

The Coming Oil Glut
The real forces shaping the market point to a significant downturn of oil prices.

http://online.wsj.com/article/SB10001424052970204712904578094980730090350.html

U.S. set to overtake Saudi in oil output: IEA

http://www.marketwatch.com/story/us-set-to-overtake-saudi-in-oil-output-iea-2012-11-12

Iraq Eyes $150 Billion Investment to Boost Oil Output

http://www.foxbusiness.com/news/2012/11/12/iraq-eyes-150-billion-investment-to-boost-oil-output/

#33 Polecat on 11.12.12 at 10:40 pm

It does seem to be rolling out as MR Turner said. Scary though, look around at people you know in that position.Look at the whole industry and associated jobs. Might be nice to wish ill upon greedy sellers and agents but this could really hit the country hard when trades start loosing work and such. Lots of tax revenue lost and more EI going out. This will affect us all. We got our bad debt paid up and cut the credit card, cash is king. Feels good, let the Jones’s do as they may. Us gen x and y’s may be looking after our parents for a long time. If the States get inn the poop we are not far behind. Gonna see a lot more working poor and that is not good for economy either. Anyway, thank’s Garth for your work, and everyone else, good luck.

#34 Rainman on 11.12.12 at 10:42 pm

#28 Brendan

Hi Garth,

My parents are in their mid 50′s now, probably going to retire at 65 give or take. They don’t own much of their home in Ottawa, maybe 15% equity and that is being generous. They plan to sell at retirement, downsize into a condo or rent.

Do you think the housing market could be in a good or at least not bad place in 10 years?

Thanks,

Brendan

Truth be told Brendan… if we knew what was happening in 10 years, we’d all be rich… Garth is a smart guy and smart enough not to answer this…

#35 Freebird on 11.12.12 at 10:44 pm

“Cottage markets everywhere will be smoked.” Garth

I agree 100%. Ironically not sure if you heard of or watched CTV’s CIBC sponsored segment (not advertised as such of course) with Scott McGilray who as I posted last week had just done a become a millionaire with real estate, was back today touting the virtues of vacation property and saying it was a great time to buy. His somewhat sexist approach was to call it a SALE in the U.S. – as apparently this is how his wife and other female viewers would understand and buy into the concept. What he failed to mention was the legal,tax and other obviously minor issues with buying out of country property. Not to mention the challenges with being a long distance landlord. Which interestingly he DID note in a previous (pre-CIBC connection) appearance. I don’t pretend to be an expert on real estate or argue there are some good sales to be had across the border but we do have freinds who own second properties out of country including Scottland and have heard the headaches that can be involved at the best of times.

Garth can you comment on the potential fall out with the upcoming change in the US as of 2013 making those forced to short sell their house have to pay the income tax on the diff between what they owed and the sale price of the property? Correct me if I have this wrong. As well what will the possible effect of the millions in foreclosures still not dealt with?

PS: I was going to email the Marilyn Denis show to ask when they might have you on as a guest expert but thought you probably don’t fit their current GET RICH WITH REAL ESTATE theme…but they will help you to not overspend on holiday shopping. LOL

#36 Xindai Shan on 11.12.12 at 10:44 pm

A Statistics Canada study in 2009 found that people in their 70s spend only five per cent less than they did in their 40s

Poppycock

My parents are in their early 70s, and with my dad’s tiny pension and their CPP and OAS, their income is ~$42K. This is a smidge under half of their pre-retirement income (circa 2000) of about $85K. They eat very well, have an active social life, have significantly updated their Halton Hills home, maintain two cars and take an international vacation once a year. In retirement, I think they have cruised about 40 countries.

My dad is the most honest man I have met and says they have not touched their savings. They paid off their house at age 50 and saved to retirement. To this day, my dad will still spend Monday mornings shopping at 6 grocery stores for the best bargains. Since everything goes on sale these days, they want for nothing. They just wait for the sales at 40% off.

They give my sisters and I nothing – which is as it should be. Not finishing high school, they gave us the opportunity for a first-rate education and wherewithal to take care of ourselves.

95% of age 40 income my ass.

‘Shopping at 6 grocery stores for the best bargains…’ That’s the retirement goal? – Garth

#37 Freebird on 11.12.12 at 10:45 pm

Typo apology…s/b Scott McGilvray.

#38 Bobby on 11.12.12 at 10:47 pm

I hate to see anyone suffer in this economic climate, but I find it difficult to be sympathetic to many realtors and the like. They have been the authors of their own demise. Sadly many naive first time buyers looked to realtors for advice, being misled into buying overpriced properties with little down. I couldn’t imagine bidding up the price of a house and not doing any due diligence prior to purchase. I don’t know how many of these clowns have said real estate in Victoria never goes down. Yet, I bought my house in a declining market many years ago. And no, realtors do not earn their money, far from it.
Perhaps the demise of the market will be the impetus to finally shake up the real estate industry. Many poor realtors and there are many, will be gone and those who offer constructive advice will continue to do well.
I look forward to the change.

#39 LazyJason on 11.12.12 at 10:49 pm

We sold our Toronto house in July and moved to Vancouver with the plan to buy. Starting to realize that we should hold off for a bit. Thanks Garth!

#40 McLovin on 11.12.12 at 10:56 pm

Vancouver is very comparable to Seattle & San Francisco. These locations never dropped more than 20% and rebounded quite nicely from 2007.

How is Vancouver anything like these places? We ran up way more. Price to rents are way more, incomes are much lower.

Vancouver will go down 40% no doubt about it.

#41 Soylent Green is People on 11.12.12 at 10:57 pm

Poof Harper

That eulogy got me thinking about a little-reported episode in the Prime Minister’s family history. One day in 1950, Mr. Harper’s grandfather, Harris Harper, a high-school principal in Moncton, disappeared, never to be found. The circumstances have remained obscure. It received a brief mention in William Johnson’s biography of the Prime Minister, but little follow-up.

According to Helen Tippett, who taught at the same school as Harris Harper, depression was behind his disappearance. She is 97 now, but still articulate and engaging when I talked to her this week. Because of her acquaintance with his grandfather, Mr. Harper has quietly been in touch with her both before and after becoming prime minister. He asked her, among other things, to take him to the school, Prince Edward, where his grandpa had taught.

Since a body was never found, no one can be certain what happened to Harris Harper. But the consensus, said Mrs. Tippett, is that it was suicide from depression. A few months before he disappeared, she said, he had suffered a nervous breakdown. He then tried to return to his job at the school, but they gave him some tests to mark “and it was all marked wrong and he couldn’t conduct school.”

That may have been the clincher. She recalled that “he was last seen by a nurse and they think that he walked down Main Street, turned left and went past Eaton’s to the bridge and jumped in the river. The tide took him out.” A large search party, which included Mrs. Tippett’s husband, came up empty-handed.

Harris Harper, she recalled, was a nice-looking man, polite but firm. A military buff, he insisted that teachers put classes through “physical drills,” a daily exercise regime. He had a small speech impediment, and pronounced proof as “poof”; the teachers used to mock him for it and refer to him as “Poof Harper.” The memory still rankles Mrs. Tippett.

http://www.theglobeandmail.com/commentary/a-family-tragedy-that-stephen-harper-has-not-forgotten/article787903/

.

#42 InLimbo on 11.12.12 at 11:07 pm

I think one part of the sticky prices in the GTA is one key characteristic of the cultural background of those who inhabit it. Ignoring the gradual intra-city migration away from Toronto, they come from backgrounds where the concept of “moving” barely exists, where they live and die in the same general neighbourhood let alone moving every 7 or so years like here, and where many married couples move within a 10-15 minute drive of their parents and many other relatives (my own recently married sibling had a tough time of sorts finding a SFH a year or so ago in a certain part of the GTA).

But take someone from a multi-generational Canadian background where there isn’t that same bond to live in the same general area–you have people of direct blood relation (adult sons/daughters and their parents) living in different states and provinces.

#43 tonysilverdick on 11.12.12 at 11:15 pm

at #2 Patiently waiting on 11.12.12 at 9:34 pm

this will be a site for you

http://vancouverpricedrop.wordpress.com/

#44 Smoking Man on 11.12.12 at 11:17 pm

#38 Soylent Green is People on 11.12.12 at 10:57 pm

As much as I dislike the fat bastard, your website takes it a bit to far.

Free speech needs protection. Carry On

#45 Boomer21 on 11.12.12 at 11:17 pm

T Coates# 7
I agree, I am also in my 60′s. No debt, live on Pensions, dividend income. I spend less than I did in my 50′s but still enjoy travel, hobbies, eating out and still love to dress well. I have a full rich life with family and good friends. Am I lucky or did I plan well? Both I think.

I still dress

#46 Smoking Man on 11.12.12 at 11:28 pm

Buy? Courious?

Waiting for the rap tune you promised

No finish I’m thinking

#47 Grim Reaper/Crypt Speculator on 11.12.12 at 11:30 pm

Sorry……but those are the kids REAL ears..the dog is earless

#48 Smoking Man on 11.12.12 at 11:31 pm

#28 Brendan on 11.12.12 at 10:27 pm

No inheritance dude. Learn to Sell, Lie, and scam.

Self employment and slave ownership your only hope to prosperity.

#49 GTA Girl on 11.12.12 at 11:40 pm

Yes Realtor, Leslieville will always have idiots lined up in the Infiniti SUV’s to buy an overpriced Reno, with bad electrical non- sloping sewer pipes and black mold under the master bathroom.

But in many markets, far many many markets, a $900k builder home in a farmers field of 2000 other similar homes, are screwed. Homes in Vaughan, Newmarket, Markham and recent reno’d monstrosities in Mississauga, Thornhill and in areas along Bayview and Avenue road.

There’s no justification why any home along Bayview/Ave rd/Yonge has risen to over $4mill in 3years. There is no reason.

I disagree with Garth. If the economy falters in wake of a RE correction, job losses, stop to construction boom…this will feed off each other. ALL markets in GTA will suffer. White elephants in Leslieville will become neon. Every price will be analyzed and compared. Bidding wars will die.

#50 broadway skytrain on 11.12.12 at 11:40 pm

#29 western observer on 11.12.12 at 10:30 pm
Seattle & San Francisco. These locations never dropped more than 20% and rebounded quite nicely from 2007.

Check zillow if you don’t believe
——————————–
i did.

SF -16.5%
Seattle -18% (all property types)
from the peak to today. within city limits

west side and rmd got much more frothy than our west coast neighbours – they will get hit harder.
N van, E van, W van and DT will be fine , much like the western US cities.

#51 mark on 11.12.12 at 11:47 pm

‘Shopping at 6 grocery stores for the best bargains…’ That’s the retirement goal? – Garth

C’mon, that’s a decent hobby for a 70 year old.

#52 timmy on 11.12.12 at 11:48 pm

You can’t compare Vancouver to San Francisco, there are no jobs in Vancouver, except some in mininig, other resources, and low wage tourism. Even Calgary has a higher average salary than Vancouver. It is a bubble waiting to burst.

#53 Honus Wagner on 11.13.12 at 12:00 am

I think this is going to take a long time to grind down, and that we’ll be visiting pre-2005 prices again on the way down. Settle in with your popcorn. I’m really hoping the economy doesn’t grind to a halt as a result of the carnage that is about to ensue, but I’m not overly optimistic given the experiences elsewhere in the world.

#54 Smoking Man on 11.13.12 at 12:04 am

Bubble Heads remember my long Samsung, short apple call.

http://www.zerohedge.com/news/2012-11-12/samsung-hikes-apple-component-price-20

I have mastered trading in Asia. Brothels form Gotanda in Japan to Pat Pong street in Bangkok. I have been there done that.

You wanna be a Ive league white boy with a foot ball and a wife with nice teeth, or scum sucking lush who appreciates and thanks the hosts for a cute ho.

Trash drunk always wins in Asia.

#55 Roy on 11.13.12 at 12:06 am

We haven’t even begun to see the desperation yet.

See what happens in spring 2013 when inventory piles up and nothing moves.

#56 Dan on 11.13.12 at 12:07 am

Just saw this post by Nolan Machan in an article about Toronto real estate market. What do you guys think?

“I’m a residential realtor in the GTA, and when this perspective suggested again – it was incumbent that someone reply who has industry knowledge.

Are residential real estate prices in Canada really in decline – NO. What is happening – well, it is pretty straight forward when all the numbers are considered, instead of the one’s that only support the perspective of this article. This information could hurt a tremendous number of Canadians employed by the residential real estate market. There is a story about the market slowing down in Toronto – but it isn’t the one that is outlined.

The real story is clear: the number of properties sold to-date are down substantially from same time last year, especially in the GTA. However, closer examination shows that the number of available properties for sale is also dramatically down. So what we have is a market where inventory is low and demand is strong.

Why is this happening – Canadian banks don’t lend money to residential builders without the builders having a substantial number of units pre-sold in a new residential community. Plus, builders don’t want to have extra inventory. Also securing a mortgage from a retail bank is far harder with the new rules they have to follow. Take a look at the line up of buyers for every new development put up in the GTA. It hasn’t stopped – and a very small percentage of those buyers are investors. When the US housing market collapsed, investors made up more then 20% of all buyers – in Canada we are under 5%.

Now who are these investors and why are they investing in Canadian real estate. There are a couple of reasons. The Canadian political and economic climate was one of the few stable countries after the crash. People with a great deal of money want to protect and better still grow what they have. Toronto has and is now a world class city, and from that perspective our prices are low. Just compare Toronto housing prices with Paris, New York, Hong Kong, London, Berlin, & Tokyo. It becomes apparent that Toronto is still very affordable. Real estate is also one of the few things that investors can buy that is tangible. The stock market has been on a roller coaster ride for years – most investors don’t like roller coaster rides. So from stability and political perspectives Canadian real estate is an excellent investment.

So who are the people hurting. For the most part they are young realtors who thought that real estate was a quick way to get rich. With less inventory – there are less sales and with less sales there is less commission. Older realtors are not retiring from the business – because their portfolios took a noise dive after the stock market and housing crash. They no longer have the same resources for their retirement they had planned for. With their experience – they have the ability to land new business at an easier rate. Finally, one would think that the construction trades would be hurting – but if you have ever called a plumber, electrician, or contractor to come over – you soon find out that they are so busy they don’t know what to do with all the business. Finally, there are the first time buyers – who are finding it harder and harder to find accessible financing or inventory.

The GTA’s residential real estate market is healthy – thanks in large part to our banks and smart builders. This is what history has taught us; however, what the future holds is anyone’s guess. I don’t have a crystal ball – but neither does anyone else. So many things influence residential real estate prices. So if you are planning to purchase a residential property – buy what you know you can afford, and deal with a realtor you trust.”

#57 Boomer21 on 11.13.12 at 12:10 am

#45 Boomer, whoops should have deleted last line, yes I do dress!

#58 GTA Girl on 11.13.12 at 12:27 am

Dear Dan.

Toronto is NOT London, Paris, New York, Hong Kong, Tokyo or Berlin.

Our populations are not the same, our economy is much smaller.

This comparison and ultimate ‘sunshine and ponies’ speech of yours is undermined ny that comparison.

And your ‘smart builders’ comment…..absolutely hilarious. Sprawl, bad planning, glass falling from condos, sinking parking garages, homes built w/o insulation, concrete erosion due to fraud, ponzi financial pyramids within pre-sales….etc etc..

Stop, while you’re ahead Dan.

#59 broadway skytrain on 11.13.12 at 12:39 am

#45 Boomer, whoops should have deleted last line, yes I do dress!
—————————-
good! i sick of all the naked 60somethings walking around buck naked all the time! :)

#60 prairieperson on 11.13.12 at 12:43 am

Did my walkabout. Nothing has changed in the neighbourhood. Still 2 houses, 1 lot, 1 condo for sale.
Three of these have been for sale for months. It’s like
everything has stopped. No new listings, no new sales, nothing taken off the market. It wasn’t long ago, for sale sign went up and in a few days, there was a sold sticker on it. The big sleep. Will for sale signs proliferate in spring like mushrooms? Will the prairies quit sending their retirees to us? Those retirees depend on selling their farm, business, sfh and buying here. Depends on how well that goes. We don’t have high house prices because we’re so wonderful. It’s because the people who move here got wonderful prices for their farm outside Moosejaw or their store in Calgary.

#61 Interesting Times on 11.13.12 at 12:44 am

HGTV Virgins get out there and start low balling these realtards by 50 percent. Don’t waste your time going to open houses when you could just sit on MLS and low ball these used car salespeople by email. Get out there and get your revenge. Show them that you are not as stupid as the show protrays you!

- jobs being lost everywhere still and the Canadian economy is slowing down.

- austerity starting already in Canada. Many in government jobs will be bye, bye.

- manufacturing jobs have moved to Asia and back to the US.

- 70 percent of CDN living pay cheque to pay cheque and have no savings and over 50% have no pensions

- 60% of boomers 60 years and older entering retirement in debt

- empty condos being built everywhere and will be going for 50 percent off soon.

- empty homes all over the MLS, can you say power of sales have started

- for lease signs everywhere in business districts and commercial areas, I guess business has moved away from Canada

- Canadians are 163 percent in debt! More than the US, Ireland, and UK when they had there crash.

- Over 6 months of dropping RE sales. Next thing to drop will be prices by 50%.

- And remember a home is only worth what a buyer will pay.

- the realtards, brokers, banks and builders are in full out panic

The 50 percent crash is here my virgins. Get out there and start low balling as the time is now for your revenge. Don’t sign up for bank slavery like the other 70 percent of the virgins in Canada. They are screwed for life now as they were sold the Koolaid by the RE industry!

#62 Esmerelda Fitzonster on 11.13.12 at 12:48 am

HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HAHA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA …..ah breath…… HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HAHA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA!!!!!!!!!

reality is a bitch

#63 El Padroni on 11.13.12 at 1:08 am

REIN said housing affordability will begin to be an issue in Calgary, with rents increasing and a high average sale price. But when you look at that price versus average income it shows that other cities in Canada have a much larger problem on their hands.

“Calgary has the long-term economics to support long-term market strength while other cities do not,” said REIN.

Read more: http://www.calgaryherald.com/business/Calgary+real+estate+investment+market+Canada/7534574/story.html#ixzz2C4n3Cshb

Hey everybody guess what?!?! It’s different in Calgary!!! For real, the newspaper says so!!

(sigh…)

#64 Mithan on 11.13.12 at 1:12 am

Glad I sold. Maybe one day I will be able to buy something else without mortgaging my life away in the process.

#65 SilverMeridian on 11.13.12 at 1:15 am

Seems like Ottawa’s RE is going strong this fall and has no intention to slow down, at least according to latest newsrelease posted on the OREB website, http://tinyurl.com/OREBNewsRelease Not too sure how accurate this information is, since they refuse to release any kind of raw sales stats. Watch out Calgary and Edmonton, Ottawa’s on fire!

#66 Jim on 11.13.12 at 1:27 am

#36 Xindai Shan,

I am not sure how citing a single example is supposed to invalidate a statistics canada study involving (one would assume) numerous samples.

#67 ozy - Foreigners in aboundance on 11.13.12 at 1:42 am

Foreigners in aboundance at Leslie/York Mills Open House, I was very surprised given the Toronto market tanked in october \ november, from what planet are they landing? And where do they hide the UFO? Cauze all street was fully parked with visitors, no spots left, it was that bad, cramped inside the house too.
Some asking “hew beg a neu hose kud buil oa lot”. Really funny. That’s the receipe for skyrocketing prices (with no support) and assured destruction of RE markets/neighborhoods when prices CRASH.
Bing me da ber (make it two)

#68 Seriously? on 11.13.12 at 1:43 am

scour: a careful search

scower: an idiot looking for real estate

seriously

#69 Nostradamus Le Mad Vlad on 11.13.12 at 1:51 am

-
“How long that lasts cannot yet be known, as it depends on economic growth, jobs, rates and the pace of US recovery. Downsize.” — Selling and downsizing by renting works for me. Pace of the US recovery? Snail’s pace is an apt moniker.

I wonder if Robert McLister’s paragraph, “. . . details the fact record numbers of Boomers are now unable to pay off their mortgages before retirement.” will lead to this, esp. as pressures grow on indebted couples?
*
#179 Smoking Man on 11.12.12 at 8:53 pm — Good blog and great tribute! I liked this sentence: “Freedom, freedom of expression is slowly being taken away from us.”

Snipping away our freedoms, slowly but surely under the guise of being politically correct. What trash! The more I ignore these meatballheads, the better off I am. Cheers!

#15 Smoking Man — “So long as we are not talking private parts anything goes.” — Do you mean these private parts!?
*
Two Years By then, Greece will have their civil war well underway but lookee here — Greece’s Creditors; Carlyle’s Rubenstein Struggling economy; Higher Inflation? Hell, NAmerica can barely handle stagflation; US Military Could lead to a war between the WH and the Pentagon; Natural Gas 2030 is only 17 years away; Erdogan recommends switching from US$ to gold; 3:30 clip EPA grants China, closes coal plants. America is improving? NOT; Japan’s trade deficit and Fukushima, and Japan’s deep recession underway.

TPTB Why are so many members of the elite quitting at the same time? Could it be linked to the One Hour Meltdown? China No soft landing; Part time work The traveling is taking its own toll; 4,0000% interest Loan sharks, or payday loans; BBC Commit a crime, get a decent payoff.
*
Fried Computers Would you like an EMP blast with that? Smart Meters No more privacy; Alexander the Great Artifacts found; Daft Despite the headline, this is not a Monty Python blog, but 0:49 clip Birds of a feather . . .; Fake Skin heals itself in 30 minutes; Elmo What happened to DSK has become an epidemic, ‘tho DSK was freed; 30:51 clip Hitler and Zionists — The Transfer Agreement; Extreme weather preceded collapse of Mayans.

#70 Van guy on 11.13.12 at 2:05 am

#2 Patiently waiting on 11.12.12 at 9:34 pm

The overall market is not down 30%. But if you’re clogging to buy now, make that your goal. Many west side and Richmond homes are selling at below assessment. Not too long ago, they were selling over assessment. So at the peak homes were going for 10-15% above assessment, to now 10-15% below. Just be patient and you’ll get this discount or even more. Go to real estate talks bc where daily detailed sales are posted.

#71 Freedom First on 11.13.12 at 2:07 am

Thanks Garth! After what has happened south of the border and in Europe, I find it soothing to read today’s post. Should go a long way to calm Canadians down a bit being able to read a “best case scenario”. Once this RE downturn takes hold, and morphs into a frenzy, our media, who has just recently recognized there is a “mild downturn tick” will really turn on the “gloom and doom” RE news articles. Of course they will save face, adding that “no one saw it coming”…….as the media did about the RE markets and GFC. Which is of course a lie, except to the people who got screwed.

#72 Kilt on 11.13.12 at 2:25 am

I think Garths version of retirement and the average persons version differ. When you live from paycheck to paycheck you learn to adjust to the size of it.

Kilt.

#73 Oakvillian on 11.13.12 at 2:59 am

Now Garth is saying it will be a soft landing.

I am saying what I have said for two years. — Garth

#74 John Prine on 11.13.12 at 3:24 am

House lists for 3 months at $500K, listing expires so is listed for $400K…Sells in 15 days for $380K. Realtor reports that house sold in 2 weeks for “95% of asking…Hard to see what is going on when some houses are on the market for over a year and have reductions with each new listing.

#75 Buy? Curious? on 11.13.12 at 3:32 am

Quick! 25% off! Buy One, Get One FREEE! Real Estate only goes up! Why pay someone else’s mortgage? You can’t live in stocks. Buy now or buy never! Of course I love you. She’s just a friend.

Do people think that if they buy now, they’ll be getting a bargain?

http://www.youtube.com/watch?v=_dIBL4tYQPI&feature=related

#76 futureexpatriate on 11.13.12 at 3:45 am

That baby has SIX ears!!!!!!!

#77 Kits on 11.13.12 at 3:45 am

#21 yup …

I could not agree with you more. I have been following West Van very closely. Yes, lots of price drops but from ridiculous initial listing prices. I had an agent this week send me a listing for a reduced price property that is still $850k above what the owners paid for it a year ago. Makes no sense. I hope all the spekers get spanked … Badly.

#78 new canadian on 11.13.12 at 3:59 am

I got good news! It won’t be a crash, it will be called “50% off MSRP”.

There won’t be QE3 either, FED just announced that new round of money printing and buying bonds will be called “CUPCAKES”!

So sit back and relax, no crash, no QE3.

#79 Buy? Curious? on 11.13.12 at 4:15 am

Smoking Man, the track is coming. Do you know how many classic lines to I can choose from? Check this baby out,

“And if you’re in cash and not cutting your own grass in the 416 you’re screwed.”

I could use some instrumental beats from someone else but with your lines and my beats, I hope to monetize it on YouTube. I’m even thinking of making a video using some of the homeless people I find. They will repeat your lines for achieving success. The juxtaposition will be hilarious or sad.

http://www.youtube.com/watch?v=dpLBas2lOlQ

#80 MC on 11.13.12 at 4:48 am

Garth, too early to mention Christmas. More importantly, A belated thanks to our vets and soldiers.

#81 Devore on 11.13.12 at 7:02 am

#29 western observer

San Francisco has something Vancouver doesn’t: jobs. People want to live where the jobs are. Is Fort Mac a desirable place to live? Well, if you want to make money it is, it sure as heck isn’t the mild weather. It is also the most expensive city in Canada to rent in (http://www.huffingtonpost.ca/2012/08/08/house-prices-down-decade-scotia_n_1756792.html#slide=1193096) Wow! People must really want to live there! Anyways, mild weather does not imply good weather. Unless you believe wealthy Alberta retirees are swarming in?

#82 Steven Rowlandson on 11.13.12 at 8:08 am

RE:#61
Low balling offers to buy real estate may be far too generous if the drop amounts to 70%. Try a 95% discount on the asking price and try to get the other property virgins to do the same thing. The counter attack on those who would financially enslave you or financially kill you can never be too severe.

#83 Frank on 11.13.12 at 8:25 am

The Canada Statistics study saying people in their 70′s only spend 5% less does not sound right. I am 55 and I spend a lot less than when I was 30 or 40. I have cut back on many things that I realized I did not need.

#84 Devore on 11.13.12 at 8:26 am

#54 Smoking Man

Bubble Heads remember my long Samsung, short apple call.

The price hike is worth at most a couple hundred million over the remaining life of the contract, and will be offset in any case by future patent settlements between the two companies.

Correlation =/= causation. Careful in those brothels, you might catch some critters, and I’m not talking batmans.

#85 House Horny Housewife on 11.13.12 at 8:36 am

Garth,

Whatever happened to your criticism of people who dump assets when they are going down in value and only purchase them when they are going up ?

This is no different. If properties are going down in value, doesn’t it make more sense to hang on to them until prices begin to go back up ? Provided you have the staying power necessary, of course. But if you are able to rent or recoup your costs until the market goes back up, doesn’t it make more sense to wait it out rather than take a big hit now ?

Also, you keep assuming that consumers behave logically and most of them don’t. Many are quite impulsive, gullible and easily influenced. The only thing that will keep people from buying is their ability to pay and as soon as prices begin to wane just a bit, buyers will pounce yet again.

If people, like your example of yesterday, are willing to purchase a property for more than 4 times their gross income (and yeah, lo and behold, government is greedy and property taxes move only in one direction … didn’t they know this before ? Sheesh !), to me this is proof that people behave illogically and they will continue to do so. Look at all of the examples you have brought to this blog for heaven’s sake. Do you need more proof than that ?

People will only be kept from spending over their limit by their purchasing power and NOT by their will power.

Sellers will take a hit and buyers will not learn from their mistakes and will continue the vicious cycle of getting what they think they “need” and must have in order to finally be happy … until that next thing … and so on. This is how the machine of our society functions. Without consumerism, there is no economic growth and we cannot support the earth shattering number of people that our world population has grown into.

From a more personal perspective, I think that the key to living successfully in today’s society is being able to bend and be flexible. If you need to downsize to live, they you have to be able to do it, even if it costs you. Spending is OK but only controlled spending. From what I can see, many are not able to make changes in order to adjust and are doing everything possible to keep that large house and expensive car while continuing to take the luxury vacation because they dread the alternative and “you only live once”. Once one gets used to a certain standard, it is difficult to go back isn’t it ?

HHHW

Sales are declining. Prices have yet to move in a substantial way. There is time to exit, so for some people – the over-leveraged and nearly retired – it’s a worthy strategy. — Garth

#86 martha on 11.13.12 at 8:58 am

Garth ~ When do you see rent prices start to tumble?

When supply exceeds demand, which is a local condition. Where are you? — Garth

#87 Intuitive Missus on 11.13.12 at 9:05 am

#74 John Prine.

I too have been watching this for the past year. What a distortion of the truth. The measure of sell to list should not be a moving target but clearly the real estate industry has done nothing to stop it. A de-listed property should have to remain off the market for 3 months before it can be re-listed. It could help to motivate both the agent and the seller to price a property appropriately from the start.

The real estate industry needs to clean up their sullied image by cleaning house.

#88 eddy on 11.13.12 at 9:12 am

re: yesterday’s post

Market Value is defined as the ‘best’ offer you see after a ‘reasonable’ time on the market with full exposure (mls). If anyone has just sold and took less than what mpac says is the value at that time, you may want to consider suing city hall and mpac in small claims court. they cannot prove the value of your home , their values are done with software, averages- site visits are rare, but the price you took is a fact

#89 Gypsy Kid on 11.13.12 at 9:20 am

Ozy, are you a first nations person? If not, YOU also are a foreigner…and a stupid one at that.

#90 Stickler on 11.13.12 at 9:45 am

@ #29 western observer on 11.12.12 at 10:30 pm

>>um, San Fran median price went down almost 30%. And it is much bigger then Vancouver, with much more income, jobs & much more international appeal…oh, and much better weather. Dream on.

#91 gladiator on 11.13.12 at 9:51 am

how ’bout 8,773 US$ per square foot?

http://www.zerohedge.com/news/2012-11-13/hot-money-boiling-point-hong-kong-apartment-sells-record-8773-square-foot-new-asian-

#92 Smoking Man on 11.13.12 at 9:59 am

Condo in Hong Kong sells. For 68000 per sqft or. 8800 usd per sqft

And we worry here.

#93 detalumis on 11.13.12 at 10:01 am

Have you heard of lies, damn lies, and statistics well this time you have. If you study Malcolm Hamilton’s reports on this very same consumption pattern you will see that stuff like taxes and savings and gifts get included. What the numbers really show is how little spending 40 somethings do on themselves after they fork out big wads of cash to support everybody else. 70+ couples with a paid off house do just fine.

#36 is correct, you make fun of his parents for shopping for sales but I live in a wealthy area full of retired people and guess what, I see retired bank vice presidents doing the exact same thing when the stores open. It’s what people with lots of spare time do and has nothing to do with your income. The stores are much quieter on a Saturday afternoon.

Sad. — Garth

#94 Shane on 11.13.12 at 10:06 am

Garth, you never answered my question.. will Canada be in a recession next year?

Ask me in July. — Garth

#95 Xindai Shan on 11.13.12 at 10:17 am

‘Shopping at 6 grocery stores for the best bargains…’ That’s the retirement goal?

He did all of his life, so we always ate well. Believe it or not, the quality of the food we ate was paramount to an immigrant family man who started working in mines when he was turning 14. I used to go shopping with him.

I was just challenging your quoted study that everybody needs 95% of their working income at age 70. It is utter nonsense – something made up by the financial industry. By their standards, they have had a great retirement with less than half of what they earned when they work working.

PS – my parents and family voted for you and would again.

#96 tkid on 11.13.12 at 10:18 am

But if you are able to rent or recoup your costs until the market goes back up, doesn’t it make more sense to wait it out rather than take a big hit now?

It is impossible to determine in advance if one is able to wait it out. The time period needed to see the asset go back to it’s highest valuation could be too long (I have a girlfriend in Buffalo who bought a townhouse in Florida for $50,000 that previously sold for $240,000. How many decades do you think it will take for that townhouse to be worth $240,000 again?), or one’s financial situation could drastically change (retirement, illness, divorce) requiring one to liquidate one’s assets.

Better to sell now and get top dollar for the asset, especially if you can see the asset taking a price hit in the immediate future but you believe the asset will be worth something in the long future. Sell high, buy low, pocket the extra money.

Me, I sold and doubled my savings overnight.

#97 Shane on 11.13.12 at 10:35 am

Garth, thanks for answering!! So it’s possible we could be in a recession next summer?

#98 Daisy Mae on 11.13.12 at 10:50 am

#91 Crash Test: “So let’s review. Mortgage arrears near all-time lows. Consumer delinquencies at all-time lows. What’s with all the noise about over-indebted Canadian consumers? Pure bunk!”

GARTH: “Or you can have a nice Christmas…”

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

We already owe $1.63 for each $1 earned so we’re on the edge of the cliff…and Christmas spending should send us over. Too many still just don’t get it, probably in the process of applying for yet another credit card….

#99 JustTryingToProtectEquity on 11.13.12 at 10:50 am

On several occasions, Garth has said that house prices will not go down very much in “desirable” areas in the GTA. In 1996, we bought a house in Bloor West Village for $325K. 18 months before we bought it, it was listed at $580K. A considerable correction. We know many, many people in our neighbourhood who fared far better than we did… Buying that very same year. We recently sold the same house for $975K and are renting in the
same neighbourhood. We see young couples taking out enormous mortgages, $800K+, and second mortgages to renovate. Staggering amounts of debt. If the prices corrected substantially in 1996, I think they will certainly correct again. For us to have made 3 times what we paid for our home (in 16 years) is outlandish.

#100 Pr on 11.13.12 at 10:58 am

….F will be under big pressure to buckle…

F will stand is groud! Like Carney with the low rates.

#101 Herb on 11.13.12 at 11:10 am

#88 Eddy,

if you have not challenged MPAC’s assessment by “Request for Reconsideration” within the allotted time, you have agreed with and accepted it. Good luck with the suit.

It will be fascinating in a year or so, as higher values and taxes are phased in annually while selling prices and market values fall. Provincial and municipal politicians are going to lose sleep over that one. I suspect that the four-year assessment cycle will go back to annual.

#102 gladiator on 11.13.12 at 11:14 am

I’m 35 and I shop at 5 stores almost every week. Getting the best quality products at best prices in my area. I just can’t buy 6 pounds of juicy crisp apples at 1.99 when they’re 1.39 at another store. Saving at least 25 bucks per week on grocery shopping (after the cost of gas). Why not do it?

#103 Inglorious Investor on 11.13.12 at 11:27 am

One thing that concerns me about the Canadian housing market, and indeed the Canadian economy in general, is the overall economic imbalance that has developed between the US and Canada.

In the bigger picture, I have felt for many years that globalization would cause a rebalancing of values as prosperity spreads and consumption balloons, while real wealth does not grow fast enough to keep up.

As living standards in the ‘developing’ world increase, living standards in the developed world must continue to decline, at least in the short term. By now, we’ve all heard the famous stat that says the United States, with less than 5% of the global population, uses about a quarter of the world’s fossil fuel resources. Or: if everyone used the same amount of per capita resources as the US, we would need five planet Earths to satisfy demand.

Any way you look at it, the ‘pie’ is not growing fast enough. In the developed world this problem is compounded by the fact that we’ve spent a great deal of our future wealth on past and present consumption. We are being forced to de-lever (is that a word?) while at the same time there is greater competition for resources––economic cycles and temporary declines in demand not withstanding.

The US/Canada dynamic is perhaps a localized example of the imbalance. Consider that the US now has cheaper real estate, cheaper labour, and cheaper energy. Consider that US corporations are sitting on mounds of cash. In Canada, not so much. Consider that Canada is still largely an economic extension of the United States, what we used to call a ‘branch plant’ economy. Consider that the US, our largest energy customer, may not need Canadian tar nearly as much in the years ahead. Consider that a large part of the labour issue in the US is misallocation of labour skills, not lack of demand for it.

The US appears to be developing the economic conditions to gain numerous competitive advantages to Canada. If they can avoid large scale social problems, conditions are getting ripe for a nice long-term recovery. Certainly, if the developed world needs to continue to rebalance values, then the US is quite a bit ahead of Canada in this regard. Under these conditions, can Canadian real estate and labour values remain at their present levels if our biggest economic partner and customer also becomes our largest competitor, or simply doesn’t need us as much anymore?

#104 Penny Henny on 11.13.12 at 11:28 am

From -#36Xindai Shan
‘Shopping at 6 grocery stores for the best bargains…’ That’s the retirement goal? – Garth

Garth did you miss the part about–They eat very well, have an active social life, have significantly updated their Halton Hills home, maintain two cars and take an international vacation once a year. In retirement, I think they have cruised about 40 countries.

And they have savings to go to if they CHOOSE!

Doom and gloom Garth.
This is YOU!

Penny Henny

Retirement = more time for comparative shopping? Sad. — Garth

#105 Northern Alberta on 11.13.12 at 11:30 am

Question for you Garth.

In my town of Cold Lake Alberta. We have a $700,00 home, half paid off. Another $200,000 invested in stocks/bonds. Me and my wife are early 30′s, 3 kids under 5 yrs old, she’s a nurse, I work in the oilfield. Combined we make $200,000 + /year. I just looked, to rent a 3 bedroom home in Cold Lake it’s approx. $2500/month + utilities.

I can see our house dropping $100,000 in value over the next 5 yrs (or flatlining depending on the price of oil). But at the costs of renting I dont think it would be worth moving. The house we are in we will be happy with until our kids are ready for university.

Any advice?

#106 Alpha_Bear on 11.13.12 at 11:31 am

western observer on 11.12.12 at 10:30 pm

“Vancouver is very comparable to Seattle & San Francisco. These locations never dropped more than 20% and rebounded quite nicely from 2007.”

According to Case-Shiller, Seattle prices have dropped 26.9% from the peak, and San Francisco prices have dropped 36.9%. There has been no rebound.

http://www.crgraphs.com/2011/10/house-price-graphs.html

#107 Daisy Mae on 11.13.12 at 11:38 am

#51 mark
‘Shopping at 6 grocery stores for the best bargains…’ That’s the retirement goal? – Garth

C’mon, that’s a decent hobby for a 70 year old.”

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

Consumers do have the ‘power’. And it becomes a challenge to shave dollars off consumer goods by simply taking advantage of sales. It can actually be fun!

Prices keep rising. Until we stop buying…

#108 Daisy Mae on 11.13.12 at 11:44 am

#57Boomer21: “#45 Boomer, whoops should have deleted last line, yes I do dress!”

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

Gotcha! But, just where were you going with that? :)

#109 DodgedBullet on 11.13.12 at 11:49 am

Book?

#110 JSS on 11.13.12 at 11:55 am

Hey, I shop at 7 stores on the weekend:

- Superstore
- Safeway
- Save On foods
- Sobey’s
- Walmart
- Shoppers Drug Mart
- Toys ‘R Us
-

#111 Stoopid Idiot on 11.13.12 at 12:06 pm

‘Shopping at 6 grocery stores for the best bargains…’ That’s the retirement goal? – Garth

No.. that’s a hobby, frugality is a life style that most people would not know … hence forth this stupid Blog

#112 Eaglebay - Parksville on 11.13.12 at 12:16 pm

#89 Gypsy Kid on 11.13.12 at 9:20 am
“Ozy, are you a first nations person? If not, YOU also are a foreigner…and a stupid one at that.”
_______________
Some of us have been here for over 400 years.
Quebec City celebrated its 400th anniversary a few years back.
As you suggest, even the First Nations are foreigners and so are the Europeans. Homo Sapiens had to start somewhere. Don’t be stupid.

#113 Daisy Mae on 11.13.12 at 12:19 pm

“Retirement = more time for comparative shopping? Sad. — Garth”

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

What’s sad is consumers losing trillions of net worth as a result of government/business corruption, greed and mismanagement…..

#114 Spiltbongwater on 11.13.12 at 12:21 pm

I read flyers for 6 different grocery stores. I stockpile what is the best price, and I have limits to what I spend on certain products. Gives me enough in savings to play golf once per week. I wish I was rich like Garth and didn’t have to care about saving a few bucks per week, but we have our own first world problems.

#115 happy renter on 11.13.12 at 12:55 pm

Victoria house prices have’nt came down yet.One realtor told me most homeowners won’t sell for a loss because we are a niche market.Everyone wants to live and work in Victoria.Lots of retirees moving here evey year.So Garth is right, certain areas won’t be affected at all.

#116 Bottoms_Up on 11.13.12 at 12:57 pm

#105 Northern Alberta on 11.13.12 at 11:30 am
———————————————
So your family income is $200,000 and you have a mortgage of $350,000 on a house that you like living and raising your family in. I don’t see any cause for concern, why would you move?

#117 Bottoms_Up on 11.13.12 at 1:00 pm

#102 gladiator on 11.13.12 at 11:14 am
—————————————-
Clearly $25/week to you is worth the extra time it takes to hunt down and take advantage of those deals. How much extra time does that take you? 1 or 2 hours? My time is worth more than $25/hr.

#118 Daisy Mae on 11.13.12 at 1:07 pm

# 100Pr: ” ….F will be under big pressure to buckle…

F will stand is groud! Like Carney with the low rates.”

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

The little twerp has already made numerous mistakes. He can’t afford another one — amortizations will stay at 25 years.

#119 Daisy Mae on 11.13.12 at 1:13 pm

“Retirement = more time for comparative shopping? Sad. — Garth”

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

With our enormous drops in net worth, we have no alternative but to rethink our spending habits. And, in alot of cases, curtail any trips abroad…not to mention, trips over Christmas just into the next province. After you factor in fares, taxes, other charges for this ‘n that…and don’t forget shuttles to ‘n fro. It just gets stupid. And so we stay home.

#120 Penny Henny on 11.13.12 at 1:13 pm

Retirement = more time for comparative shopping? Sad. — Garth

It is all about choices.
I too shop for the best deals, load up when the price is cheap and I eat like a king.
But at the end of the day the money I save will allow me to retire earlier. Great choice if you ask me.
Maybe it doesn’t fit the Garth lifestyle of buying without a consideration of the cost. Maybe you are richer than you think. Want a $5 coffee twice a day, you’ve earned it. Use premium gas even if your Hummer doesn’t require it well bully for you Garth. Sounds sort of like the house horny stainless and granite buying masses. I must have it NOW!!!!
Hearith Garth, pity the wrechted who decide to shop for bargains and choose not to buy on a whim. For it is those savers who will grind the economy to a halt.
To me a dollar saved is better than the dollar earned, it is after all after tax.
So see the point I’m trying to make. With some careful choices a couple who are making $42k/year with no debt are not bad off, far from it.

#121 Luckyrenter on 11.13.12 at 1:20 pm

http://www.debtclock.ca/

Canada’s Federal Debt Clock!! This is simply unbelievable and will not end well!!

#122 Luckyrenter on 11.13.12 at 1:26 pm

This country should know better than others the cost of unchecked debt. Because of government’s past excesses taxpayers are paying $86 million a day in interest payments on our debt.

http://www.debtclock.ca/index.php?option=com_wrapper&view=wrapper&Itemid=1

#123 Steve on 11.13.12 at 1:33 pm

#101 Herb on 11.13.12 at 11:10 am
____________________________________________
Anyone thinking that MPAC (Ontario’s assessment organization) is systemically to blame for tax rates is barking up the wrong tree, and the interval between assessments is irrelevant.

It is relevant that all assessments are done correctly and that they are all done to the same standard (you and your neighbours are assessed using the exact same system). Selling prices are not directly connected to MPAC assessments, although all sales feed into the database that MPAC uses.

Your assessment is used to establish your fair share of the taxes that your municipal government levies to run your community. If MPAC makes an error, thereby over estimating your share, you need to complain and have it corrected. In many cases, the MPAC ‘errors’ are in your favour, and therefore, based on prevailing human nature, you would not complain (undeclared renovations, for instance). Corrections to your MPAC information in your favour will typically be a onetime event to correct mistakes.

If you really want to influence your tax payable at the source, then you need to encourage your municipal government to spend less, and then everyone will pay less; however, that will likely mean less in services.

#124 disturbanceintheforce on 11.13.12 at 1:39 pm

The markets continue to grind lower after the Obama win. Is this the beginning of a renewed recession? Several stats suggest that the US has already tipped back.

#125 Smoking Man on 11.13.12 at 1:56 pm

Fun with words.

Paula Broadwell book of David Petraeus.

Title of the book.

ALL IN

LOL

#126 tkid on 11.13.12 at 2:03 pm

Northern Alberta,

add in to your calculations what rate of return you would get from investing the $350,000 you currently have in house equity. Ie 350,000x.05=17500. 17500/12 = 1458 a month towards renting a house.

If $12,000 a year for rent sounds do-able, sell the house. If it is still too high a sum, keep house.

#127 futureexpatriate on 11.13.12 at 2:12 pm

#124 Nah, just petulant 2%’ers pulling their money out of the market. It’s temporary, as the machines start buying and the market climbs they’ll be back. Greed always outweighs their lust for revenge.

#128 bp on 11.13.12 at 2:15 pm

parsimonious, had to look that up.

It’s the affliction that makes you charge people for using your web site. — Garth

#129 Paul on 11.13.12 at 2:29 pm

#115 happy renter on 11.13.12 at 12:55 pm

And what planet do you live on?

Victoria house prices have’nt came down yet.One realtor told me most homeowners won’t sell for a loss because we are a niche market.Everyone wants to live and work in Victoria.Lots of retirees moving here evey year.So Garth is right, certain areas won’t be affected at all.

The average price for single family homes was $576,720, down 2% from last October’s average of $590,539. The median price for the same period is down $24,000 (4.5%). Month-over-month, both sales volume and the six-month average for single family homes are flat. Active listings are 4,876.

“Overall sales for Greater Victoria are down 19%,” says Carol Crabb, President of the Victoria Real Estate Board. “Federal measures to slow real estate sales nationally are having a local affect. Our REALTORS® tell me that with the reduced amortization rates, many buyers are having trouble getting financing for the type of home that fits their needs, particularly first-time buyers.”

#130 TOGuy on 11.13.12 at 2:34 pm

RE #56 Dan on 11.13.12 at 12:07 am

I like (NOT) the comparison of Toronto to a World Class city… well if you count being 16th… . on the list.
Same goes for comparing Vancouver to San Francisco …… San Francisco is #17 and Vancouver is not even on the list out of 66 Cities… so, when you compare things, please make sure you compare things which can be compared…

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

Toronto is not in the first group, nor second, but 3rd category of cities in the world and you will never hear people talk about Toronto as a world class city… far from it.. 15 places to go. You will know exactly what I mean if you have been to New York or London what a world class city looks like… and you would never make this comparison.

If you look at the competitiveness index, we are 25th on that list… I think that TO has long and far way to becoming a world class city… and it will not happen any time soon.

Also in relation to realtors, not all of them are bad and not all realtors are good, like everything else, there is a mixtures of them in there, the key is pick a one that is competent, knowledgable, and trustworthy and not a snake and a fool. If you choose a bad realtor, you deserver to get what you get… same goes for choosing a lawyer, plumber, babysitter, or any other service you choose . I can never understand why people speak so badly of them…. those are people who have (hopefully) a knowledge and experience which they provide to you at cost (commission) to help and guide you through the process of purchasing real estate, the same way lawyer, consultant, and many more professions do. If you want to know the future of our economy, ask economist, not realtor. It’s like asking plumber for legal advise…. same goes here… people who do not care to understand things, who are not willing to learn to understand even basics… but are all willing to blame anyone and every one who they can think of… but themselves and their lack of ability. You hire those people to HELP you not do things for you… they are not your mother… their are there to help you through the process. If you don’t know what you doing, they will not make you understand but they can guide you… if you make a bad choice… don’t blame anyone else but yourself.

I sold and purchased with a realtor and without.. and I have to say that if you have a good one, it makes a huge difference money and liability wise, they make you aware of things you would never though of, give you advise and recommendations but at the end of the day, it is up to me to make that decision, not them… but you have to be smart enough (like anything else, hiring lawyer, plumber, etc) to choose a good one. Don’t blame anyone else for your bad decisions. If you don’t know when to buy or when to sell you have no one else to blame but yourself. Don’t be a baby… grow up and take responsibility for your own actions. You will have good, bad, and some ugly but it is up to you to choose a good one when you deal in real estate, if you cannot, don’t deal with it… but for gods sake, stop blaming others for your lack of ability. Stay home, be safe, and grow a pair.

Have a nice day.

#131 Inglorious Investor on 11.13.12 at 2:41 pm

#120 Penny Henny on 11.13.12 at 1:13 pm

Nothing wrong with saving money. Look for deals. Haggle. Complain. Compare. Price check. It’s all good. Keeps ‘em honest. Do your part for deflation!

But…

It’s all a question of value. More specifically, what is your time worth? Everyone needs to answer that for themselves and act accordingly.

Or maybe some just enjoy shopping around. Me? I’m with Garth on this one, but to each his/her own.

#132 Vamanos Pest on 11.13.12 at 2:42 pm

#36-xindai shan

You say your parents are in their 70s
You say they spend much less than “circa 2000″, when they were likely in their 60s, at most late fifties.
So how does this refute any statements made in the blog about our spending in our seventies compare to our FORTIES, which is what Garth said. If you want to make this argument, you need to find out what your parents spent in, say, 1986ish. I’ll bet you’d be surprised by the comparison (inflation is a bitch)

#133 Vamanos Pest on 11.13.12 at 2:49 pm

To finish the thought (#131, me) inflation since the mid eighties has almost halved the purchasing power of the dollar. So it seems reasonable that people in their 70s half their lifestyle needs versus their forties, however, with 30 years of inflation, their nominal expenditures are within 5%…as the blog said.

Oh yeah, then there’s all those statistics that show it not to be an opinion, but a fact.

#134 gladiator on 11.13.12 at 2:50 pm

@117 Bottoms_Up:
I don’t get paid for my personal time, so saving 25$ (for an additional hour of shopping) makes sense to me – it’s 1,300$ in yearly savings. Plus, a dollar saved is actually more than a dollar earned, when you consider taxes.
Our family income is around 110k per year, so we feel compelled to watch our spending very closely. At least, we rent, have no debt, and save at least 2k per month.

I was very house-horny in 2009, but was lucky to find Garth’s blog and cool down – thank you, Garth for saving another 2 souls from financial ruin!

#135 Dorf on 11.13.12 at 2:53 pm

OK, so according to RE floggers, you are wrong, have always been wrong, and it is an artificial slump due to your fearmongering.

However, now that the market conditions demonstrate more accurately the points you have been trying to make, it is entirely convenient for these RE people to regurgitate and reiterate your many previous comments, in order to make a RE flogger look like he has his finger on the pulse of the market, without in any way associating the information with you.

So, if I am right about this, then you are still wrong….right ?

#136 Bobby on 11.13.12 at 2:56 pm

#115 Happy renter

Either you are a new realtor or have bought with 5% down and you are now underwater. I’m here in Victoria looking at real estate and there are a lot of sellers that ave to sell. As well, there are a lot of realtors who need a sale.

You should get out more!

#137 rembrandt on 11.13.12 at 3:06 pm

Google the following article which backs up Garth Turner’s prognosis;

WILL A PROPHET ASSUME COMMAND? – James Quinn -

#138 Marc on 11.13.12 at 3:14 pm

Is ANYONE usprised by this? The Boomers have been living high on the hog for years thanks to the castles they purchased for PEANUTS that are now ‘worth’ five to 10 times what a fairly high-earning couple can make in a year.

The pools, the spas, the second homes. They wanted them all, and got them cheap. Now they have to sell them. Fellow thirtysomethings, I implore you. Wait until prices hit rock bottom, then pounce. Lord knows the boomers have had all the advantages for long enough…

#139 John Prine on 11.13.12 at 3:14 pm

#115 happy renter on 11.13.12 at 12:55 pm
Victoria house prices have’nt came down yet.One realtor told me most homeowners won’t sell for a loss because we are a niche market.Everyone wants to live and work in Victoria.Lots of retirees moving here evey year.So Garth is right, certain areas won’t be affected at all.
——————————————————————–

Victoria has been on sale for over a year now and sales are way down. I would be suspect of your ‘Realtor” All the “blowouts” and price reductions are in the Victoria papers all the time. There are condos in Langford that are finished and have had NO sales. I spoke to a realtor who said that their sales were down 30% for 2012 compared to past years. Noticed the attention that the BC Ferries are getting? Many on the Mainland and in Alberta sure are.

#140 Old Man on 11.13.12 at 3:16 pm

Comparision Shopping? It costs too much at the gas pump to be driving around looking for bargains, so get ripped off at your closest food store. Get your revenge by buying all those 1/2 price bargains called lost leaders to get you to come; stock up; and walk out. Do this often and create a mega supply of products that will last for months. Revenge is so sweet over time!

#141 Phil on 11.13.12 at 3:26 pm

On the other hand, a friend of mine just listed her condo in downtown TO for 350k last week and today got an offer for 340k. So maybe things are not that dire, at least not yet.

Compelling statistical evidence. — Garth

#142 Canadian Watchdog on 11.13.12 at 3:28 pm

Wondering what a packed sales office filled with ‘potential’ buyers looks like these days? 20min ago Link

#143 PERPLEXED on 11.13.12 at 3:33 pm

STILL – EDMONTON? WHAT DO YOU THINK?

I’M SERIOUSLY THINKING ABOUT BUYING.

I AM A 30 YEAR OLD ENGINEER – NO DEBT.

I NEED SOME SERIOUS ADVICE SINCE THIS PLACE SEEMS TO RUN ON A DIFFERENT AGENDA THAN THE REST OF THE COUNTRY.

EVERYDAY I READ THIS THING AND IT BARELY TOUCHES ON EDMONTON. I GET THE TO. AND VAN CITY ISSUES – TOO MUCH ALMOST. AND YOU’RE PROBABLY RIGHT.

IS EDMONTON REALLY THE CENTER OF THE UNIVERSE LIKE EVERYONE THINKS IT IS?

WILL REAL ESTATE TUMBLE HERE TOO? (THINK NW UPGRADES = 6B INVESTMENT)

Why would you? And stop yelling. — Garth

#144 happy renter on 11.13.12 at 3:34 pm

We all know its hard for retirees and pensioners to live in Canada on a fixed income.But theres hope,I’m currently here in Puerto Vallarta Mexico for a month and met many Canadians and Americans living here 6 months a year and love it like myself.One can easily live here quite comfortable for under $1000 a month.Couples even better for sure.I hate to see the future for seniors in Canada look so bleek .Even my own mother thinks our own goverment will be doing the seniors in because of the huge expense.Hopefully they raise taxes much higher for the health care system.

#145 Daisy Mae on 11.13.12 at 3:47 pm

#120 Henny Penny: “It is all about choices.”

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

With regard to the ‘gift cards’ on display everywhere….I understand that not only are you charged HST when you purchase the damn thing, you pay HST again when you use it to make a purchase. Isn’t that right up there with double-billing? But hey! No more expiry dates. I can’t believe consumers tolerated this for a single day.

And since we’re just handing out money in some form, back and forth, why don’t we just forget the whole thing? Whata joke…. LOL

#146 Reasonfirst on 11.13.12 at 4:15 pm

#129 Paul

Paul – you should have stopped reading at “one realtor told me…” :-)

#147 Joe on 11.13.12 at 4:45 pm

Garth, can you define what you see as the in-demand mini markets of Toronto?

I’ve sold my condo and am sitting on cash while friends brag about buying 550k+ dumps in the “Upper Beaches” saying that SFH in that area will never be undesirable. Am I missing something?

Better friends. — Garth

#148 Penny Henny on 11.13.12 at 4:50 pm

To-131Vamanos Pest on 11.13.12 at 2:42 pm
and your comment-So how does this refute any statements made in the blog about our spending in our seventies compare to our FORTIES, which is what Garth said. If you want to make this argument, you need to find out what your parents spent in, say, 1986ish. I’ll bet you’d be surprised by the comparison (inflation is a bitch)

So what your saying is that Garth is intentionally trying to mislead the readers by comparing (in your example) 1986 dollars to 2012 dollars?? Not factoring in the rate of inflation.
You really think he would try to pull the wool over our eyes?? Wow.
I don’t know who to believe now.

Penny Henny

Garth never said anything on the subject. Learn to read. — Garth

#149 Old Man on 11.13.12 at 4:51 pm

I am very concerned with some of you that need to save money with food, as know you could use the savings elsewhere, and know the inside. This is a $billion business, so will tell all, and will focus on one chain in Ontario called Metro Inc. to start off. All the stores are based with retail prices, and forget the flyer.

Each store is based on area demographics for those that have no choice as they will pay higher, as compared to another area store were the prices are lower; this has nothing to do with the weekly flyer, but to rip off customers that have no choice in areas that have been targeted.

Now, Metro owns Food Basics; same ownership, but just compare the two weekly flyers, and ask yourself why does Food Basics sell the same products at a huge discount price? The food business is all a racket, so hoop them all by playing the game, and take savings; not as a greater fool; but divert all to your gas tank for a free car ride all year long.

#150 $$$BPOE#1 on 11.13.12 at 4:54 pm

Long term trend intact folks. This is the pause that refreshes. I have stated many times nothing goes straight up forever there are buying dips along the way. One must think LONG TERM. That’s right LONG TERM not just on the fact that interest rates are going down
********************************************
29 western observer on 11.12.12 at 10:30 pm
The spring market in Vancouver is going to be very robust.
As Garth has touted – real estate is very emotional.
As soon as properties dip in value here there will be a huge spike in sales.
Vancouver is very comparable to Seattle & San Francisco. These locations never dropped more than 20% and rebounded quite nicely from 2007.
Check zillow if you don’t believe.
I’m talking about SFH’s .
No 40% drop in Vancouver SFH’s median price.
People want to live here. Most attractive city in Canada
with the mildest weather.
.

#151 Gift Cards on 11.13.12 at 4:57 pm

It is illegal to charge HST on gift cards.

http://www.cra-arc.gc.ca/E/pub/gl/p-202/p-202-e.pdf

#152 Devore on 11.13.12 at 5:06 pm

#145 Daisy Mae

With regard to the ‘gift cards’ on display everywhere….I understand that not only are you charged HST when you purchase the damn thing, you pay HST again when you use it to make a purchase. Isn’t that right up there with double-billing?

You understand incorrectly.

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/gnrl/txbl/cpns/gft-eng.html
http://www.sse.gov.on.ca/mcs/en/Pages/Consumer_Alert_Gift_Card_Taxes.aspx

#153 Tony on 11.13.12 at 5:08 pm

Re: #2 Patiently waiting on 11.12.12 at 9:34 pm

That’s because all the smart money at the high end of the market has already sold after slashing their selling price 30 percent. The stupid money will wait for a 50 percentage point haircut then accept offers around 60 percent below peak levels. To sum up the smart money took a 30 percent hit instead of a 60 percentage point hit. The simpletons at the lower end of the market are waiting for the 50 percentage point drop around the middle of next year to list.

#154 Old Man on 11.13.12 at 5:14 pm

#143 PERPLEXED – nice to be in no debt like myself, and buy nothing in Edmonton, and rent a modest apartment. I say go on the cheap, as you might get lucky with a hot babe as a landlord that has a space in her triplex just for you, and if you are both single she might teach you some piano lessons on the side.

#155 Andrew on 11.13.12 at 5:22 pm

Check out this Edmonton listing:

Note Realtor’s description “Fully renovated”

http://www.realtor.ca/propertyDetails.aspx?propertyId=12409718&PidKey=-1570457305

#156 Patiently Waiting on 11.13.12 at 5:26 pm

Just saw a new list on MLS this morning in White Rock. . . guy is offering a $100,000 selling bonus if sold before Dec. 31st . . . apparently he is very motivated . . . LOL . . . there are 3 mortgages on his title . . . if that isn’t telling I don’t know what is . . .

pw

#157 gladiator on 11.13.12 at 5:40 pm

@149 Old Man:
what’s wrong with saving money with food? I see no shame in it. It’s like free money. To me, this is a way of life and I like it, as long as I buy same quality food, or things, at a lower price. For example, when our first kid was born, we bought the stroller from the States for 99 USD, instead of paying 199 CAD plus tax here for the same model, and had a friend bring it to us for free (he works in the US and travels back and forth).
As long as you’re not spending on gas more than you save and don’t mind the extra time spent – it’s a winning game, or so I think.

#158 Tony on 11.13.12 at 5:44 pm

Re: #39 LazyJason on 11.12.12 at 10:49 pm

Wait another 3 years at the very minimum. What you’ll probably see is a 50 percent decline followed by a decade of sideways prices.

#159 Paul on 11.13.12 at 5:47 pm

#146 Reasonfirst on 11.13.12 at 4:15 pm
#129 Paul

Paul – you should have stopped reading at “one realtor told me…” :-)

I know…lol. But i’m bored today.

#160 Junius on 11.13.12 at 5:48 pm

#150 BPOE,

We missed you.

You said, “Long term trend intact folks.” Indeed it is. Down for the next 3-5 years for sure.

Vancouver comparable to Seattle and San Francisco?

Seattle has Microsoft, Amazon and Starbucks.

San Francisco has Apple, Google, Intel, Cisco….etc.

Vancouver has…….Lululemon?

How about comparing Halifax to Boston and New York?

#161 Blacksheep on 11.13.12 at 6:12 pm

All this tax talk, pulled from Garth’s comments a few days ago.

“The federal government’s deficit has ballooned to a record $582 billion”

http://www.greaterfool.ca/2012/11/08/the-tax-trap/

Ever wonder were all that debt, came from?
That less than 20 % is actually principle?
With the interest, going to private Bank corporations?

http://www.youtube.com/watch?v=jghiU55O5eY

http://www.debtclock.ca/index.php?option=com_content&view=article&id=45&Itemid=42

This is nothing new to you Garth, but I figure it’s news to someone.

take care
Blacksheep

Actually a ton of interest goes to bondholders, not banks. — Garth

#162 2centsCdn on 11.13.12 at 6:49 pm

#142 Canadian Watchdog

“Wondering what a packed sales office filled with ‘potential’ buyers looks like these days? 20min ago Link”

Packing ain’t what it used to be. Saves on security guards I guess.

#163 Canadian Watchdog on 11.13.12 at 6:55 pm

Actually a ton of interest goes to bondholders, not banks. — Garth

Domestic banks hold about 50% ($320B) of all Canadian government bonds. Surely you can see why rates aren’t going up.

Life insurance companies and pension funds – 24%
Mutual funds, investment dealers, etc – 22%
Non-residents – 14%
Chartered banks and “near-banks” – 12%
– Garth

#164 Intuitive Missus on 11.13.12 at 6:56 pm

#155 – Andrew

Reminds me of Danny DeVito’s line in Other Peoples Money.

“What a shit pit”.

#165 Old Man on 11.13.12 at 7:01 pm

#157 gladiator – when I was a young boy needed stuff from USA with my rocket launches with my teacher as we were sending them a mile high like ballistic missles from a gravel pit. My aunt had this association with US customs, and all was passed. Now the chit hit the fan with the RCMP who came to the public school, and said stop this all; it was probably with the last one that was crafted on a lathe format; a big one that blasted about 3 miles high with total perfection.

#166 TRT on 11.13.12 at 7:11 pm

Junius,

Maybe Vancouver is like San Francisco? It can’t be that different here…can it?

I’ll report from the Coit Tower on Telegraph Hill and Twin peaks to get a 360 view in the next week or so…i’ll see FIRST HAND how the US RE crash affected the Bay area (minimal).

Vancouver surrounded by Mountains (North), West (Sea), South (Border), and only Fraser Valley land left to the East. Bay Area similar.

Comments? (from those that have actually set foot there) – google street view/wiki does not count.

#167 TRT on 11.13.12 at 7:14 pm

#160 Junius,

San Francisco has Apple? …lol Have you seen their complex in Cupertino…you can drive right by their 8 or so buildings if you’re not careful..and you think that complex supports San Fran RE?

Maybe if Foxconn was there…

#168 LEO on 11.13.12 at 7:21 pm

#2 CHECK OUT THIS WEB BLOG.

#169 LEO on 11.13.12 at 7:22 pm

#2 OOPS THE WEBLOG:

https://vancouverpricedrop.wordpress.com/

#170 Canadian Watchdog on 11.13.12 at 7:28 pm

#163 Canadian Watchdog

“all Canadian government bonds”

The difference is lent out under reverse repurchase agreements that must be purchased back at a set future date.

#171 TRT on 11.13.12 at 7:37 pm

#130 TO Guy,

Nice list…Global city rankings on Wikipedia!

NOW, show me a city on there ranked higher than Vancouver that is younger in age?

ALSO, show me a city ranked higher on that list that is smaller in Population than Vancouver.

Vancouver has only one way to go on that list and that is UP! The Math says so regardless of your emotions.

#172 PERPLEXED on 11.13.12 at 7:42 pm

BECAUSE MY GIRLFRIENDS FAMILY WILL THINK I’M A REAL PERSON – NOT KIDDING.

PLEASE HELP GARTH.

#173 Gypsy Kid on 11.13.12 at 7:45 pm

Eagle Bay, your argument is indeed “stupid”…homo sapiens have to start somewhere????
Give us a break. You’re comparing 400 years to 10 000years? I was also being facetious in my first post…good lord.

#174 gokou3 on 11.13.12 at 7:51 pm

Re: #156 Patiently Waiting on 11.13.12 at 5:26 pm

“Just saw a new list on MLS this morning in White Rock. . . guy is offering a $100,000 selling bonus if sold before Dec. 31st . . . ”

What is the MLS#?

#175 Vamanos Pest on 11.13.12 at 7:59 pm

#148 Penny Henny
First of all, my first comment about a comment, so thank-you. To your question, (in know it was rhetorical, but I’m going to pretend it wasn’t):
Garth didn’t really say anything at all, he included a quote of a 2009 StatsCan study that said we only spend 5% less in our 70s than in our 40s. He neither provided support nor argument, so he’s off the hook here for any attempt to “mislead” us.
MY comment was not really about this either. I was commenting on a rather irritating comment in which xindai shan #36 used a comparison of his/her parents spending in their 60s to their spending in their 70s to call a study that compared spending in our 40s to spending in our 70s “poppycock”. The evidence in her argument simply did not support her conclusion of poppycock.
The inflation comments, I admit, were my own musings in trying to explain how it is possible that we spend basically as much money in our 70s as in our 40s (when we’re paying for mortgages, tuition for the kids, etc. BIG expenses that should disappear well before age 70). But, I must admit, I did not review the study for myself, and for all I know it was inflation adjusted. So kudos for calling me on that.
As a side note, I really hope that study was NOT inflation adjusted, as if I need to plan for a retirement spending basically as much as I do now (see above listed expenses) I’ll almost literally will never be able to retire!

#176 Junius on 11.13.12 at 8:36 pm

#166 TRT,

You said, “Vancouver surrounded by Mountains (North), West (Sea), South (Border), and only Fraser Valley land left to the East. Bay Area similar.”

Not relevant. You could say that about lots of cities in the world.

Re: Apple

Apple spins lots of jobs across the San Francisco area. If this need to be explained to you then you are hopeless as well as clueless. These are the high priced jobs and not the minimum wage jobs of Foxconn.

The economy of San Francisco is much larger than Seattle which is in turn much larger than Vancouver. In particular, these are world class companies in S.F. and Seattle – something Vancouver is in short supply of.

Enjoy your sight seeing trip. I enjoy S.F. when I am there on business.

#177 Bottoms_Up on 11.13.12 at 8:39 pm

#138 Marc on 11.13.12 at 3:14 pm
————————————–
Even if ‘rock bottom’ comes to fruition….what would be on the horizon to suggest that even then it would be a good time to buy? It probably will not be a good time to buy — for many, many years, perhaps a few (or more) decades. Real estate will stagnate. It will hit rock bottom and stay there. Demographics will ensure this.

#178 Denise on 11.13.12 at 8:40 pm

#115 Happy Renter “Victoria house prices have’nt came down yet.One realtor told me most homeowners won’t sell for a loss because we are a niche market.Everyone wants to live and work in Victoria.Lots of retirees moving here evey year.So Garth is right, certain areas won’t be affected at all.”

You are so full of it, I suspect you’re just a troll. I live in Victoria. Victoria prices have indeed come down, quite a bit since the start of the year. I wasn’t paying attention before then.
Not everybody wants to live here, for many reasons, but a “big one” is because we’re in a major earthquake zone. The earth’s been quaking quite a lot around these parts lately…Has lots of people stocking up on their emergency supplies.

#179 Daisy Mae on 11.13.12 at 8:40 pm

#149 Old Man: “The food business is all a racket, so hoop them all by playing the game, and take savings; not as a greater fool; but divert all to your gas tank for a free car ride all year long.”

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

I don’t waste gas running all over ‘hells half acre’. Sooner or later, what I need WILL be on sale….then, I stock up. I have the room for storage. It’s not a problem. Certainly, not excessive. I don’t spend alot of time fretting about anything. I live close to all the of amenities, so it’s great. You know…it IS all about ‘location, location, location’?

“Life is great it we don’t weaken.”

#180 Daisy Mae on 11.13.12 at 8:50 pm

#160Junius on 11.13.12 at 5:48 pm
#150 BPOE,

We missed you.

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

No, we didn’t.

#181 Linda Mulligan on 11.13.12 at 9:05 pm

Re: Brendan 2012/11/13 @ 10:27 p.m. – demographics say no to your question. If many baby boomers are depending on their RE to pay for their retirement & the youngest Cdn baby boomers include the 1966 births, then 2031 is the year that the last of the Cdn baby boom generation turns 65. Add in the dismal 43% of about to be seniors who expect to carry mortgage debt into retirement & however many more who hope to fund their retirement by selling their home – homes will be super cheap but it won’t be a good deal for the seller or the buyer because – all too many of these homes are McMansions with far too much upkeep & mice. Plus the buying crowd is getting older too & in 19 years when the last baby boomers turn 65 the 20 somethings now will be 39 or older & maybe looking to unload the house IF they actually keep the first one they bought. As for the chortling set who want the boomers to suffer, keep in mind that if that huge buying group can’t spend $, that means – no business which equals fewer jobs which equals more misery for all. How does it enrich anyone if someone moves from being a consumer to a broke non buyer? Sadly, shelters in the city I live in have all too many seniors who live in the shelter because they can’t even afford rent, let alone buy a home of their own. Do you really need your welfare costs & your taxes to help support those who simply can’t afford to live in the world today? Yet people cheer at the idea of taking or reducing pension plans for public servants to nil because they are ‘too rich’ – if those people turn into GIS recipients, how the heck does that benefit anyone? I guess I’d better stake out my personal dumpster now before the competition gets too fierce!

#182 Old Man on 11.13.12 at 9:26 pm

My sheltie pup called gertrude once again will hop up to play computer with my keyboard and will place her paw to send. I think she needs a spanking. So should I do it, as she is becoming a bad bitch in my life? And will run to my bed nightly, as will

#183 Mr Buyer on 11.13.12 at 9:33 pm

Tokyo subway system map…
http://subway.umka.org/map-tokyo.html

Toronto subway system map (scroll down a bit)…
http://en.wikipedia.org/wiki/Toronto_subway_and_RT

Get the picture. Mega-opolis

#184 disturbanceintheforce on 11.13.12 at 9:39 pm

Happy Renter #144.

I guess you didn’t read about the happy Canadian retiree from Nanaimo who moved to Mexico’s sunny Puerto Vallarta and got murdered last week. They found him tied to a tree……with his belt….the police said the ‘details of his death were grisly’. This happened only a few weeks after his neighbour…another Canadian was found beaten to death in his home…a block away. I guess there’s a reason for Mexico to be considered ‘cheap’. I don’t want to live in a place where going out for smokes is considered ‘risky behaviour’.

BTW…I think you have it wrong. Your mother is starving because of the high taxation…not because higher taxes will fix anything. Figure it out…when did additional funding into health care ever go into bricks and mortar? Every penny collected in revenue goes directly into the pockets and pensions of the unions who control the health care system like it’s a personal cash cow. If you want better health care and services for your saintly mother…then join a lobby to boot unions out of all public entities.

#185 Mr Buyer on 11.13.12 at 9:41 pm

Now for Tokyo’s very very little sister…
Osaka’s subway system map…
http://www.kotsu.city.osaka.jp/foreign/english/subway/image/map.pdf

And Tokyo’s very distant 3rd cousin…
Nagoya’s subway system map (it is starting to look a little bit like Toronto’s)…
https://commons.wikimedia.org/wiki/File:Nagoya_subway_map_jp.svg

#186 Mr Buyer on 11.13.12 at 9:43 pm

#182 Old Man on 11.13.12 at 9:26 pm
………………………………………….
There is something strangely disquieting about all that. I think I am going to be kind and file that under ‘too much information.’

#187 happy renter on 11.13.12 at 10:28 pm

The area that those murders happened are a couple hours south of Puerto Vallarta.The ones that go there are risking their lives just to save money than stay in P.V.Theres a huge police presence here and I feel safer than Victoria with its crime ridden streets full of homelessness.
Any way what I’m trying to say is we have to raise taxes for our tsunami of Canada’s ageing population.Why not, Canadians will pay it if is for a good reason.

#188 patiently Waiting on 11.14.12 at 1:26 am

#174 gokou3

here is the listing that is offering the $100,000 selling bonus in White Rock. As mentioned it has 3 mortgages on title, and while I have not checked the amount of the 3 mortgages, it is pretty clear that this seller is in very big trouble . . . sad thing is there are a lot of properties that are in a similar position right now, and it appears to be picking up momentum . . .

pw

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=1963018698&s=BRC&t=BRC

#189 cynically on 11.14.12 at 2:57 am

#171 TRT – Vancouver obviously is your hometown and anyone would expect you to speak well of of it but the truth is that Vancouver, certainly one of the world’s most beautiful cities, cosmopolitan but definitely not sophisticated, is still very small-minded, particularly when its citizens call it “world class” and lacks the commerce to compare it to Seattle and SF. Incidentally the latter acts like a headquarters for all the Silicon Valley companies near by- a place where imporant tech company announcements are made.

#190 Rob Nelson on 11.14.12 at 6:16 pm

Nobody I know in Vancouver goes around talking about being “world class” — that’s a pathetic exercise in self-delusion, which we happily leave to Torontonians, since they are experts. (How to make a New Yorker laugh: tell ‘em T.O. is in the same league as NYC.)

That said, the cocktail conversation has turned in Vancouver. Among homeowners, there is now a sort of defensive posture that betrays a creeping anxiety. “It’ll probably go down maybe 10% or 15%, then go back up,” is the gist of what I’ve been hearing. Maybe.

I sold in 2011, and ALWAYS say that, sure, you never can tell in Vancouver, and that I’d never bet against this city. But that is becoming harder and harder to say with a straight face. Something is definitely afoot. And now, pretty much everyone — those with and without skin in the game — knows it. The city is horrifically overpriced. There will be consequences.

#191 ghostrider99 on 11.14.12 at 11:36 pm

Isn’t that strange…..I was told there would be a new world order when I was a teenager.
I am now sixty-six…..and no World Order!