Patience

cookie

Like every other young couple I’ve ever met, Shawn and Amy sit across the table and ask me the same question: So when do you think it’ll be a good time to buy? In a culture where people more easily mingle their fluids than their money, and mistake a house for a home, real estate’s a god. Even though it costs obscenely, negates freedom and mobility and is a declining asset class, the horniness goes on.

So today I have the answer. But first the news.

What we all need to understand (even the dewy-eyed virgins) is the magnitude of the wealth destruction possible in Canada over the next few years, as real estate sales and prices revert to the mean. Over the last few days I’ve kept you updated on recent sales collapses in almost all of the major Canadian markets when it comes to occupied homes. From a 4% drop in The Peg to a 32% crush in Halifax and a 38% rout in Van, it’s clear to see the market’s tumbled from year-ago levels.

But how about new homes?

The dominant construction market in Canada is the GTA. Here are the latest stats:

  • Condo sales for 2012 (January to November) down 34.5% from 2011.
  • Low-rise (SFH) sales for this year, down 18.3% from last year (which sucked).
  • Total new home sales are the second-worst ever. Only 2008 was more brutal.
  • Year-to-date sales are 16% below the long-term average.
  • The number of unsold condos is a bloated 21,400, with almost three times that amount in the pipeline.

Unsold condos1
“Sales of low-rise homes in November were the worst on record next to the gloom of November 2008, when we weren’t sure if the world’s financial system was going to hold together or not,” says analyst George Carras. This is remarkable, given the fact mortgage rates are still 3%, credit’s easy to get, the economy is growing and no asteroid has impacted. So why would this collapse happen with both resales and new-builds?

Simple. Houses cost too much. Until prices fall back into line with incomes, the wealth destruction will continue. This brings me to Thomas Holloway, a fixed-income analyst at a Vancouver-based investment firm but, more critically, a follower of this pathetic blog. He has just penned a worthy piece on what happens to housing bubbles, and published this chart.

House-Price-to-Income-Ratio

What the heck does that mean? Lots. Holloway (who has way more time than I do) plotted 48 housing cycles over the past 40 years in a plethora of countries, charting not only prices but price-to-income ratios. In other words, it reflects affordability. The thick black line is the average. The red line is our current real estate gasbag. The US case-Shiller index is in blue dashes and the US federal housing agency’s index is blue dots.

The conclusion: Housing bubbles start on average with prices about 20% below the peak and then (always) fall back an equal amount. Canada’s current bloat began about 30% below the peak and, if the pattern holds, will end up 30% below bubblicious 2012 levels.

“Using a combination of price-to-rent and price-to-income, the straightforward conclusion is that Canadian housing needs to unwind about 30% from the current valuation ratios,” says Holloway. “That’s not the same thing as prices crashing by 30%! Importantly, if rents and incomes continue to go up, prices may not need to drop that much.  In fact, annual growth in income and rents of 3% would deflate half of the valuation bubble over seven years.  It is also conceivable that we don’t revert all the way back down.  A modest price decline coupled with gains in rents and incomes is called a soft landing, exactly what the central bank and federal government is aiming for. However, watch out for weaker inflation or income gains, particularly as the economy adjusts to weaker housing activity.”

In my view a soft landing, at least in markets like Vancouver, is impossible. Household debt levels are off the chart, savings rates are negative and wage gains across Canada have been running at less than inflation. So without a spurt in the amount of money families have to spend, a soft landing turns into a smoky hole in the ground – exactly what happened in the States.

What does this mean for Shawn and Amy? Well, if they want to buy at the bottom instead of on the way down, 2019 looks like a bitching year to do it. Patience.

And now, for our comedy segment:

180 comments ↓

#1 Brian on 12.20.12 at 6:22 pm

I am so first :)

#2 Andrewski on 12.20.12 at 6:29 pm

Great post Garth! Merry Christmas.

#3 OOO on 12.20.12 at 6:34 pm

A good time to buy is when you have the money , first you get the money , then you get the woman, then you get the power!

#4 Nukester99 on 12.20.12 at 6:37 pm

OMG….house horny for 9 more years? What are HGTV virgins going to do in their spare time?

#5 Hammertown on 12.20.12 at 6:38 pm

Apropos of nothing…saw Flaherty in the flesh here in Hamilton… very strange looking little man

#6 Humpty Dumpty on 12.20.12 at 6:45 pm

Patience is no longer a virtue. But

Prudence will determine your future.. Because

The destruction of money is all but inevitable.

http://www.financialsense.com/contributors/detlev-schlichter/watching-your-money-disappear

#7 Old Man on 12.20.12 at 6:45 pm

Just some advice for the young married couples that are renting, as know you are horny to buy a home, so just wait a few years; save your money for the big day; and do not shoot high, but buy something modest, and call it a starter home. A home is where you hang your hat, and enjoy the love of renovations year by year to improve the investment. Do not ever be put down by your peer group that you could have spent more for a much better home; just buy modest, and enjoy the labour of adding unto your investment one step at a time.

#8 Scott (GVRD) on 12.20.12 at 6:56 pm

Crazy early post. I didn’t expect that.

5-7 years is a hell of a time to wait for a bottom. But that’s what happens when people overconsume.

What worries me is that, in Vancouver, the price of rent is obscenely high for anything that doesn’t contain mold or the unmistakeable signs of “dank”. Downtown Vancouver condo rents are ~$1000 per bedroom. Anyone with kids is forced out of the city lest they want to spend $36k annually on rent, which is unjustifiable.

#9 Canadian Watchdog on 12.20.12 at 7:06 pm

Nice chart. Now it needs to be adjusted for austerity.

#10 Nancy on 12.20.12 at 7:06 pm

Whatever happened to legends to go with graphs? Or do the cool kids automatically know what the colours and squiggles and dashes mean?

I explained it. Read, then type. — Garth

#11 jimsum on 12.20.12 at 7:07 pm

Why put a year on the estimate? The easy advice is wait until owning costs less than renting.

To be safe, it would be best to wait until owning with a 25 year mortgage at 7% interest is cheaper than renting. If you are a speculator, buy when you can afford the payments if interest rates are 7%.

That’s when I bought, in 1996, after prices had dropped by 25% over 7 years in my town. I didn’t buy because I thought prices had hit their lowest, I bought because it was cheaper than renting, and the mortgage was less than 2 times my salary.

Personally, I think it is a mistake to invest in anything while interest rates are at ridiculously low levels. The prices of all investments have been bid up due to cheap and easy credit. Prices of all assets will decline when interest rates rise to normal levels, maybe quickly.

#12 JimH on 12.20.12 at 7:14 pm

Those numbers are scary, especially when you consider that they are AVERAGES!
Prices in Greater Supernatural, BC will have to really bellyflop to counter the more gentle price dips coming for places like Comatose Cove, NS!

#13 Smoking Man on 12.20.12 at 7:15 pm

A 6pm post,

Gartho’s going to party tonight………..

#14 brainsail on 12.20.12 at 7:18 pm

RIMM is an evil stock. Over $15 after hours at first and now under $13.

#15 wes coast on 12.20.12 at 7:31 pm

That chart looks like my moustache on Nov 31. Looks like 2017 might be safe bet as the curve starts to level off around then. Start saving for a down payment kids.

#16 T.O. Bubble Boy on 12.20.12 at 8:04 pm

Here’s a fun experiment: how high can the price-to-income ratio reach in Vancouver as prices drop and activity slows, since every job in Vancouver is tied to real estate? Can we actually hit infinity?

#17 OOO on 12.20.12 at 8:06 pm

Buying is always better that renting. But buy within your means. Instead of flushing 1500 a month down the drains you could be paying that into a mortgage. Not a high end dream home but rather property you can afford and build some equity. Any investment in your pun property is better than renting!

Prove it. — Garth

#18 Chickenlittle on 12.20.12 at 8:19 pm

We are looking for a new place to rent. Nothing is at the price that we have now ($1050 all inclusive, including cable). I’ve led a charmed life so far when it comes to paying high rental prices! Nothing (nothing decent) is under $1500 now, but it is still cheaper than owning a condo. Anyone know of a decent area for two people who like to sleep? A place where it is safe to have a shower and no one will break into your place (that really happened to me!)? Something that is bigger than a shoe box?
If it wasn’t for the cheap rent I would never have been able to save up $10,000 for school! Yay! I’m never buying a house if that means I can’t have freedom to go out for dinner, or see a movie, or buy the odd pair of shoes…
Garth, you make me happy! And I needed this article before I go for dinner at my family’s house while my aunt rubs it in my face that her daughter bought an overpriced condo in Liberty village and that makes her better than me because I still rent and then my Nono will ask me why I haven’t bought anything (sigh) and I’ll say that it’s because when he bought a house in 1958 he paid $3000 and his income was $1500 a year and I’ll say that to buy the average house now it is more than 6 times the average income and then he’ll get mad and accuse me of saying that he had an easy life and he’ll say that he worked really hard for everything and I don’t know what it’s like to work hard and I want everything handed to me…sigh! I love the holidays….

#19 Asse on 12.20.12 at 8:20 pm

Found the part about price to rent and price to income interesting. Real estate everywhere in the GTA has been going gangbusters but income varies widely. This will be interesting. And no, I don’t believe Sfh’s in Toronto will take a huge hit, but watch out for the falling condos.
Someone’s taking a look at the messages so another motive behind early post?

#20 Chickenlittle on 12.20.12 at 8:22 pm

OOO….
Show me a place that I can own for $1050 and that includes all of the bills and cable….IN the GTA>>>not in Keswick or somewhere like that..

#21 AK on 12.20.12 at 8:28 pm

#3 OOO on 12.20.12 at 6:34 pm
“A good time to buy is when you have the money , first you get the money , then you get the woman, then you get the power!”

LOL. Indeed. Some have 3 or 4 Ex’s. The problem now is that they have no money and no power.

#22 Bob Copeland on 12.20.12 at 8:33 pm

Off subject but I have to comment. I’m American. Couldn’t care less about Canadian real estate except to say I lost my money here. Your turn. But I listened to Garth about gold. I fought it. But I sold. Not at the top but better then today! I just want to say, thank you Garth. Also, if you want to argue with this guy I can only say good luck. Where’s the gold bugs now? Tell him again to stick to real estate and that he doesn’t know anything about gold! I know, it’s still up $60-70 bucks for the year but your stupid if you don’t listen. Again, thank you Mr. Turner. Thank you.

#23 Nostradamus Le Mad Vlad on 12.20.12 at 8:35 pm

-
“. . . is the magnitude of the wealth destruction possible in Canada over the next few years, as real estate sales and prices revert to the mean.” — Partially goes with #148 Doug in London on 12.20.12 at 6:33 pm — “That’s why GM is transferring jobs from Oshawa to somewhere in Michigan, and Caterpillar Diesel left London for Muncie, Indiana.”

The west, incl. Qanada is being hit by the withdrawal of money, sending labor to cheaper paying places. Along with the cycle change, the west will be a giant scrambled egg by the time this is over.

Pensions and jobs are going, not to us but the whole shift is underway. We’ve had our day in the sun, and it’s time for the far east to fool around with us a little.
*
Confusing Message If the Obomba admin. is opposed to guns, why did they just buy 1.6 bln. rounds of bullets / bombs? Silver, Gold and a Chinese explosion, but Top Ten Reasons why fiat money is superior to PMs; 1:59 clip An outsider turns Ford around. Pity GM didn’t hire him as well, then Oshawa might still have those Camaro jobs instead of the right-to-work Michigan state for barely above min. wage, and It’s Official The Cdn. and US taxpayers are royally screwed while GM walks free. Life sucks, plus 5:04 clip McDonald’s — no overtime at xmas.
*
2:31 clip Is this the FF to strike Iran? 2:24 clip Further to disinfo.; Flipping Out More to the point, SSRIs etc; 8:22 clip Road rage at its harshest. Time to ban cars? Madeline Albright Killing children is the all American way; Europe scared of Iran? Strange, because Germany, the UK and France have nukes, but Iran is building a power station; The TSA’s main job; Facebook A new dislike; Executive Order on gun control? Poker Game NATO, US and UK invade Syria, Russia docks warship in Iran; Syria The Toilet grows; State of Emergency “That wailing in the distance isn’t a siren; it’s Al Gore screaming in frustration.”; wrh.com; Negotiation Russia with the ex-Soviet states.

#24 OOO on 12.20.12 at 8:38 pm

$1500×12=$18000 rent per year,do this for 20 years =$360000 done!, gone, never to return!
Do the same in an investment property and after 20 years if you haven’t paid it off your an idiot! Even if you sell it at 50 cents on the dollar you will net a return of $180000, lets say even less $125000 you have a return, rest my case Garth.

#25 Mr Buyer on 12.20.12 at 9:08 pm

#9 Canadian Watchdog on 12.20.12 at 7:06 pm
Nice chart. Now it needs to be adjusted for austerity.
………………………………………………………
While I was sorting out the chart I imagined you were going to say something to that effect.

#26 Dr. WAYNE on 12.20.12 at 9:10 pm

#1 Brian on 12.20.12 at 6:22 pm

I am so first :)

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

You are so an (*) …

#27 Rob on 12.20.12 at 9:15 pm

Wages keeping up with inflation, yeah right. Of the last ten years I have had 4 years with a 0% increase in wages fearful that we did not lose previous gains ( avg. 1.5 a year for other 6 years ) in wages and benefits. Oh by the way, that’s a union job. Whats affordable for me? When my mortgage payment is 1/3 or less of my after taxes monthly income.

#28 Doom on 12.20.12 at 9:29 pm

Happy end of the world everyone!

#29 LazyJason on 12.20.12 at 9:30 pm

#24 OOO on 12.20.12 at 8:38 pm

$1500×12=$18000 rent per year,do this for 20 years =$360000 done!, gone, never to return!

Where on earth are you renting a place for 20 years where the rent never goes up? Prove that.

#30 Babblemaster on 12.20.12 at 9:35 pm

#24 OOO

————————–

Talk about extreme oversimplification! You just can’t be serious with that example.

#31 wykidajlo on 12.20.12 at 9:35 pm

#24 OOO on 12.20.12 at 8:38 pm
Great math. We can c u r well educated.

#32 house burden on 12.20.12 at 9:38 pm

It is different in Canada, Especially BC. Who needs an meteor impact on Dec 21 2012. When you can drive over the Bridge and weaver through 3 foot falling ice blocks.

We have a government who has a consistant record, Fast ferries, bike lanes all over the freakin place. So what makes you think they can guide the real estate into a soft landing.

We are different indeed.

#33 Snowbush on 12.20.12 at 9:41 pm

I suppose i have a pathetic story that pertains to this site

I have been renting for 15 yrs, yeah i know a somewhat long time. FRiends, dates etc would come over and say why are you living like this, why throw your money out the window, why not buy vs rent. I would just say well I’m doing things a little different(stocks). By renting i can work my money vs tieing it up. They would just listen but know doubt did not agree, however that was my plan.

I now sit on over a mill liquid and a mill pension, so things have worked in my favour. Deciding on my next move.

We all pick our path, its a matter of choice.

But a message to all posters, keep things in perspective, “Health is your Wealth”

#34 Amazed on 12.20.12 at 9:41 pm

Ok so the market is slowly melting. Safe to say there are 20 % reductions at the minimum with houses that have been on the market for too long. People are indeed riding the market down. Your first offer is likely your best offer. Song that goes through my mind… “Regrets.. I’ve had a few”… Seems to be the general consensus with people wishing they had taken that first offer. Greed greed greed. Realtors desperately trying to get more bids. My question… Will this downturn weed out all the realtors who cannot spell? Will it weed out all the realtors who have a poor grasp of the English language??? I’m starting to bid low… Maybe I can get my reduction now and still sell my house to some greater fool. My appraiser told me yesterday my paid for home is beautiful… Made me sort of reconsider things… Apparently there are some pretty nasty homes out there. Happy house hunting.

#35 From Mississauga with Love on 12.20.12 at 9:42 pm

7 years? You are joking right? Some that listened to you have already been waiting for 2 years, and in the meantime houses have appreciated by 20%+. If we just bought then and did not listen to you we at least would have some equity for a cushion on the way down. Now, we have to wait 2 years just to be back to where we were 3 years ago in terms of price.
I follow your blog, but be objective: those that followed your advice are now worse off than those that did not.

Mississauga, eh? No wonder. — Garth

#36 Amazed on 12.20.12 at 9:43 pm

One more tidbit… Always look at the electrical panel… Apparently you can tell if it was a grow op.

#37 Asse on 12.20.12 at 9:46 pm

AK – all it takes is ONE ex, one really vindictive ex and you end up a curious, bankrupt balding fat man who lives in mommies home and spends way toooo much time on the computer. Photoshopped anyone?

Merry Christmas Doomers!

#38 TurnerNation on 12.20.12 at 9:49 pm

Where I first worked, at a small retail brokerage, a few doctors and dentists were well known as large, aggressive traders. Large deposits were frequent.

One day, the risk manager walked over to the trader, and said: The good doctor has a margin call.
The trader replied: Which doctor?
Without missing a beat, I blurted out, Hey he’s not a witch doctor!

Fun times.

#39 Bottoms_Up on 12.20.12 at 9:56 pm

#24 OOO on 12.20.12 at 8:38 p
————————————-
Money never to return:

How much is 20 years of property tax? Let’s ball park $80,000.

How much is 20 years of maintenance? Let’s ball park $100,000.

So that’s $180,000 you didn’t account for in your argument.

Oooops!

#40 Derek R on 12.20.12 at 10:02 pm

#31 wykidajlo on 12.20.12 at 9:35 pm wrote:
#24 OOO on 12.20.12 at 8:38 pm
Great math. We can c u r well educated.

Educated? Ha! More like edjumicated.

If he wants to prove that he’s not as dumb as a rock he’d better rework that “example” to include the costs of buying that he ignored — like maintenance, insurance, taxes, opportunity cost of equity, renovation, etc.

#41 DMZ on 12.20.12 at 10:08 pm

#24 OOO
Really?
Over 20 years:

Taxes 4k/yr = $80,000
Interest (5% down, 20 yrs @ 5%) = $200,000
Maintenance, repairs, landscaping??
All of this is also gone, never to return.

Try your numbers again.

#42 Inglorious Investor on 12.20.12 at 10:08 pm

#22 Bob Copeland on 12.20.12 at 8:33 pm

Gold is volatile. Get used to it.

While I would not have purchased gold at $1900, this is not over. In a comment on a much earlier post I casually suggested gold could drop to $1200. Well, just the other day I found that Ole Hansen of Saxo Bank actually predicts gold to hit this price in 2013. After rising from less than $300 in 1999 to $1900 this year, another large correction is not surprising.

While gold is expensive according to its long-term average, we are not in average times. Central hackers are conducting a huge monetary experiment, the scale of which we’ve never seen.

And it is mathematically impossible for governments like the US and Japan (two of the world’s largest and most important economies) to pay their debts, or to even service them under normal market conditions. They will either have to default on their obligations or continue to devalue their currencies massively. Or both. In the meantime, a bond market collapse, particularly in Japan is looming larger every day. The shell games they are playing to stave off reality are sheer folly and they would be hugely laughable if they didn’t negatively impact so many people. It’s a tragicomedy.

While some have gotten lucky speculating in gold over the last 12 years or so, I see gold neither as an investment or as an inflation hedge. It’s insurance against central bank and government recklessness. Apparently they themselves agree.

#43 DM in C on 12.20.12 at 10:11 pm

OOOO is new to the blog, obvs.

OOOO what happens if you can’t rent it out? And what about the opportunity cost on the ‘investment’ if you spend it on a flat lining property?

OOOOO — I put more than $1500 away in SAVINGS every month BECAUSE I rent.

Simpleton.

#44 OOO on 12.20.12 at 10:14 pm

Yeah, yeah, yeah I know I did not take into account inflation for the rental I also did not take into account all the costs for home ownership. It is oversimplified people but the point is it is still better to own then to rent. At least with owning the ROI is something! In my books 100% of something is always better than 100% of zero, which is your ROI on renting.

#45 Inglorious Investor on 12.20.12 at 10:29 pm

#14 brainsail on 12.20.12 at 7:18 pm
“RIMM is an evil stock. Over $15 after hours at first and now under $13.”

Yeah, did you see that? You’d think that HAL 9000 and his algo minions would at least wait until tomorrow and fleece the day trader momos before deciding to take profits. Or did Thorsten Heins go on BNN and just declare RIM a giant accounting fraud (which would not surprise me, by the way)?

#46 OOO on 12.20.12 at 10:34 pm

DM in C

P.S I own properties, perhaps your are one of my renters?

#47 JimH on 12.20.12 at 10:36 pm

#24 OOO

well, let’s see…..
by your logic, 100% of rent payments are down the drain… never to return. suppose a $1,500 rental is in a today’s $400K house…
this is simplified math, granted, but by the same token…
assuming even a modest $400K home w/ a $350K mortgage @ 4.5% over 20 years (dream on… 240 payments of $2,683.02)=$643,925.48
assuming reasonable insurance @ 2K /year=$40,000
assuming property taxes/services/ 6.5K/year=$130,000
assuming property maintenance 2K/year= $40,000

So, very very conservative total paid out without a substantial increase in any rates (and only minor maintenance & repairs) is $3,558.06/month or a total of $853,935.48

this is $2,000/month more than your renting example.

tuck $2000/month savings into your mattress for 20 years and you end up with $480,000 in cold cash, and you didn’t finance your banker’s yearly Xmas in Hawaii and send all his kids to McGill.

even buy Canada Savings bonds? well better, I guess

I’ll let the experts see what you could get elsewhere for $2000/month

#48 Bottoms_Up on 12.20.12 at 10:42 pm

Cameron, Cam, that stutter around the 0-2% price movement shows just how tough it is to lie in the face of all the hard data pointing to a crash.

#49 Mister Obvious on 12.20.12 at 10:44 pm

#45 triple zero

“In my books 100% of something is always better than 100% of zero”
——————-

What if that something you have is $100K in negative equity?

#50 Bottoms_Up on 12.20.12 at 10:44 pm

#45 OOO on 12.20.12 at 10:14 pm
————————————–
You are out of touch. Try your theories on the millions of Americans that lost everything because house prices plummeted.

#51 Bottoms_Up on 12.20.12 at 10:53 pm

#36 From Mississauga with Love on 12.20.12 at 9:42 pm
——————————————————–
You are also out of touch. I went against Garth’s warnings in ’09 and bought. Even with a 10-15% gain in my local market, I’m break even (relative to renting an equivalent place) after selling after factoring in associated fees and maintenance. Therefore, even an up market is no guarantee that you’d be ahead by owning. Plus, owners take on extra risk associated with maintenance of the property.

#52 AK on 12.20.12 at 10:54 pm

#45 OOO on 12.20.12 at 10:14 pm
“Yeah, yeah, yeah I know I did not take into account inflation for the rental I also did not take into account all the costs for home ownership. It is oversimplified people but the point is it is still better to own then to rent. At least with owning the ROI is something! In my books 100% of something is always better than 100% of zero, which is your ROI on renting.”

Nothing wrong with home owenership, Dude. You just need to buy in at the right time. Not at the top of a market cycle.

#53 Canadian Watchdog on 12.20.12 at 10:55 pm

#25 Mr Buyer

I’m all about the next chart. One is never enough. :P

#54 Bottoms_Up on 12.20.12 at 10:55 pm

#47 OOO on 12.20.12 at 10:34 pm
—————————————–
So you’re going to pull out the ‘I was in the right place at the right time under the right government policies’ to prove you are right about all this?

#55 Inglorious Investor on 12.20.12 at 10:58 pm

Not long ago I remarked how the nascent energy boom in the US could be a huge game changer. The potential ramifications are not just economic or fiscal, but also geopolitical. At a time when US hegemony is waning, it makes sense for America to look inward at exploiting its own energy reserves in order to rebuilt the American economy without being beholden to the Saudis, Chinese or others.

But I also worried at how this could negatively impact Canada. Canada’s tar is about the best thing going right now for the economy of the Great White North. If our biggest customer no longer needed our very expensive bitumen, well say goodbye to all those oily profits.

Well, at is turns out, I may be behind the curve. Because while WTI is licking $90/barrel, Western Canadian Select is hovering around a relatively paltry $50 US dollars. While the reason for the fire sale prices for Can crude could be pipeline issues, like they claim, I wonder if that’s the whole story.

And by the way, the last I heard, most oil sands producers need a minimum price of between $60 and $80 to be profitable (some as low as $30). So are many Canadian producers currently operating at a loss? If so, this itself has other even larger ramifications.

#56 tony montana on 12.20.12 at 11:09 pm

#3 OOO on 12.20.12 at 6:34 pm
A good time to buy is when you have the money , first you get the money , then you get the woman, then you get the power!
_______________________________________________
Sorry to pile on when you are already taking some heat. I HATE internet nitpickers but can’t allow this post to stand without clarification. Everybody knows that the women can’t come right after the money…otherwise men would never care about the power! Al Pacino would be rolling over in his grave if he read your quote! C’mon MAN!!

http://www.youtube.com/watch?v=XJ7HZATMKBY

#57 Tim on 12.20.12 at 11:09 pm

Re #36 you are right and Garth doesn’t handle this well. He often won’t post any message explaining that he has been wrong for some time now and that anyone who bought 3-4 years ago would be further ahead. He also keeps pushing out his forecast of when things will tank.

Actually someone who bought three years ago is likely no better off than a person renting and investing a like sum. As for forecasts the one in this post is not mine, but I fully understand the logic. — Garth

#58 The Man From Nantucket on 12.20.12 at 11:14 pm

#24 OOO on 12.20.12 at 8:38 pm
“$1500×12=$18000 rent per year,do this for 20 years =$360000 done!, gone, never to return!…..blahblahblah”……

Screw the round-numbered hypotheticals.

Run this with some real numbers like our gracious host has several times.

I bought over five years ago (416, sane price:income, 20% down, 25 years).
I could barely justify the decision to myself based on cost to owe-n versus rent.

Fast forward to today. Prices have gone up 70% or better, while rents for the same house on the same street have been stickier…..maybe pacing inflation.

I think I’m a little bit stupid for buying.

Anyone who buys in with 5% down at today’s terms is a special kind of stupid!

#59 DM in C on 12.20.12 at 11:15 pm

OOOOO

You are not my landlord. I rent a 4brd/3bath house in Calgary for less than $1800/month. Couldn’t buy it for less than $500k right now.

What is interest if not throwing money away? In a flat or declining market, it is not better to buy.

Don’t be a smug a$$ because you had the luck to buy at the start of a bull market. Many here see the writing on the wall and have cashed out and are waiting. We’ve owned two houses, and right now, it’s more financially prudent to rent.

http://www.nytimes.com/interactive/business/buy-rent-calculator.html

#60 Nemesis on 12.20.12 at 11:16 pm

“Unsexy”

For once, the GVREB’s spokesconomist has succinctly encapsulated the ‘dynamic’…

[PS - OldPol, Sterling leader illustration... what is with Dogs anyhow... you know, that whole anthropomorphic thing... I'm not complaining - just contemplating]

#61 CrowdedElevatorfartz on 12.20.12 at 11:23 pm

@#10 Nancy
Wow!
Your reading and comprehension skills I.Q. match the same number as your post…….. 10.

#62 From Mississauga with Love on 12.20.12 at 11:24 pm

#52 Bottoms Up
I understand what you’re saying, but your point is irrelevant. If I bought 3 years ago, I would not necessarily be selling now. If I were to buy now, I would have to pay, as per your area appreciation, 10-15% more. Your comment is valid if I was going to trade with my house, but invalid if my purpose is to live in it.

#63 OOO on 12.20.12 at 11:28 pm

The rent vs buy example was relating to first time purchasers moving into the market, buy low and at the right time obviously, small investment not trophy homes. For gods sake people timing is everything duh! You must first have the money!!!! (A good rationed out down payment ) If you want to rent and invest great, maybe home ownership isn’t for you large investors.

#64 squidly77 on 12.20.12 at 11:36 pm

8:30 PM MST NASDAQ futures down 45 points. If this holds my short option in AAPL @ $497 should be breached. But far too many times the markets have tricked me and ripped the moustache clean off of my smug face.

Dow futures are down 211 points, Oil down, Gold down. No one wants to be holding anything over the Christmas break. Don’t blame em.

#65 wykidajlo on 12.20.12 at 11:53 pm

#41 Derek R on 12.20.12 at 10:02 pm
Exactly

#66 espressobob on 12.20.12 at 11:57 pm

#34 Skeptical

Gold is a commodity, like oil, natgas or soybean. Buying into gold site theories is a load of rubbish! If gold nosedives through $400 an ounce I’m a buyer! If you don’t think that can happen think again.

#67 Ron on 12.21.12 at 12:04 am

I have followed Garth’s advice (loosely) since he started this blog and I’m pretty happy with where I’m at now financially. I enjoy renting, especially now that we’ve found a really nice place (patience). I would certainly not consider buying a house in Canada any time soon. 2019/20 works for me.

#68 Oakvillian on 12.21.12 at 12:16 am

Who said al pacino died ? !!?

#69 The Biotech Guy on 12.21.12 at 12:32 am

Thanks. Followed your blog for about a year

If you remember I had to solve my little real estate problem to get the kid to best best around. Yeah, very unsmokingmanlike goal.

In any case, out of the old habit I am still watching the market. There is no denying we are in a downhill ride. The knife is in the air so to speak. Catch it if you can…

One thing that always bothered me on this blog is often repeated assumption that affordability ratios (price to income) had to return to historical levels i.e. get to 3 times household income and not remain at, say, 7 times income. I think this is a flawed reasoning. Just like saying oil has to go back to $20 a barrel. No it doesn’t.

If prices hold indefinitely at say 7 times income so what ? People will live with their parents, or get to cheap condos or rent basements. Or buy a room in an apartment, Moscow style. To own a SFH can be rare.

There are a lot of places in the world where you either inherit a place or you must be exceptionally wealthy to afford market prices.

Over the next year we may just shake off 20% of fools who should not own the property in the first place but after that the prices may stabilize and follow inflation more or less. Care to comment ?

#70 neo on 12.21.12 at 12:34 am

Hey Garth,

All the GTA needs is for Mattamy to release more phases. Halton has been a ghost town, but not for Mattamy in Oakville. Actually boosted the low rise to growth YOY all by themselves. The only company better than Mattamy at creating long lines for something you want and don’t need and will pay a premium is Apple.

#71 Stu on 12.21.12 at 12:34 am

Stu gotz is back. Big sell off in everything stock market related coming, even my precious gold. The baby is gonna be thrown out with the bath water. 08/09 wash out will return. Thats when u get in. Fu%$k dollar cost averaging, Fu56K discipline, and Fu#$k the DIaz brothers!!!! I bury those cockaroaches!

I know Scarface- nobaody else!

#72 Stu on 12.21.12 at 12:35 am

pleae Garth post that it so damn funny kind of

#73 JustTryingToProtectEquity on 12.21.12 at 12:36 am

#58 Tim, I once posted a similar post to yours in another online forum. My post suggested that Mr. Turner had been wrong about the coming correction and that my wife and I had watched our house triple in value because we hadn’t listened to him. Until this past Spring. After delving deeper, and coming fully to terms with why Mr. Flaherty had so foolishly adjusted mortgage rates, we came to realize that our Canadian housing market would indeed have followed the same trajectory as the American one. While we would not have suffered such a severe collapse, we were indeed going to experience a significant correction. We’ve experienced corrections before. My wife and I have both lost out and then gained tremenously through corrections. Mr. Turner was right to warn us, Mr. Flaherty was wrong to effectively create a subprime environment in our country, when interest rates were at historic lows. House prices took off, household debt is at all time highs. He did it to ensure the Conservatives would win the vote. This is his legacy. We got lucky. We sold. We now rent. And we intend to build our dream home with half of the proceeds. Mr. Turner influenced us tremendously in our decision making. He was always right. It was Mr. Flaherty who really affected the timing, the prolonging if this very apparent bubble. Good luck to everyone! All the best for the holidays!

#74 Stooopid on 12.21.12 at 12:38 am

My buddy recently drank the koolaid and bought a 2 bedroom condo unit for $325K in the revitalized Regent Park as an investment. The worst part is he has no deed title to the unit since he is a silent investor with another friend of his. They are doing a 30/70 split if they make any profit. His friend doesn’t have any money for a down payment and doesn’t want to take out a HELOC so he convinced my buddy to take out a $100K from his RRSP to use as a down payment. Despite the fact that he has to pay 30% taxes when he takes out his RRSP. I told him numerous time that in order for him to break even, the price of the condo has to worth $500K since he is only entitled to 30% of the profit. And he has to pay taxes on his profit which will leave him nothing. He keeps insisting that he will save money on commissions as his buddy’s wife is a real estate agent. It really beats me why would anyone get into such a risky investment in the first place.

#75 The Man From Nantucket on 12.21.12 at 12:40 am

Re: bob @ 67 / $400 Gold.

This guy who has nothing more than an index ETF worth of exposure to gold sorta wants to see this happen.

Mostly, curious to listen to the spin that the huckster PM brokerages will put on this.

As for gold – I’m old enough to remember a few roller coaster rides. Lots of sell orders, few bids. When it’s going down, she’s a pretty steep slope.

#76 Uwinsome on 12.21.12 at 12:41 am

So, flat is unsexy.

I won’t tell my wife that.

#77 neo on 12.21.12 at 12:42 am

#65squidly77

The Bernank’s primary dealers QE cash usually strolls into the future trading around 4:00am. Wake up in the morning and watch how close equity is to green. Seen this movie before.

#78 robert on 12.21.12 at 12:44 am

I am so tired of hearing people question Garths timing. When has any analyst ever caught the exact top or bottom of a market. If you open your eyes it is not difficult to see that a transfer of wealth is underway in concert with a deleveraging event. Garth has been very right just as Davidson and the Great Reckoning has been right. Perfect timing no but both have painted a clear picture of the new horizon.

#79 martin9999 on 12.21.12 at 1:10 am

#67espressobob on 12.20.12 at 11:57 pm
—–
i will buy a house in toronto when is 100k lol

#80 Gord In Vancouver on 12.21.12 at 1:11 am

“And now, for our comedy segment:”
________________________________________

Garth – you rock! Great post.

#81 oslec on 12.21.12 at 1:25 am

#17 OOO on 12.20.12 at 8:06 pm
“Buying is always better that renting. But buy within your means.”
____________________________________________
When you start your first statement with an absolute, you are going to be in for a night. Especially if your statement if fallacious at best.
You are definitely entitled to your opinions and beliefs. However, for you to present your opinions in a totally arrogant manner and start lecturing others who know the difference then you deserve what ever is coming to you. For you to even show a really bad example, shows your ignorance is beyond belief. You even have the audacity to try to “one up’ the host of this blog. If you do not know anything about what you are saying, then at least have the decency to read prior blogs to see if your brilliant idea and opinions have been addressed.

To quote Dr. Wayne, you are an A$$h_l_.

#82 Joey on 12.21.12 at 1:35 am

Nice Work Cameron Muir..I can’t wait to see when this video (at the bottom of todays post) gets replayed next year. You are the perfect spokesmen for the Real Estate Agent Cartel and represent what Real Estate agents are made of perfectly.

#83 live within your means on 12.21.12 at 1:35 am

Haven’t read all the comments. Maybe we were different – bought our 2nd home, lived very frugally & paid it off in 7 years. We used an old DOS program to calculate saviNGS.

On another note, rec’d a call from an old g’friend (40+ yrs ago) who lives in BC – 5 hour time diff. Said she wanted to talk to me, my elder sis, or anyone who knew me. Her voice was different. Tried calling her back multiple times. Was worried as she has a 27+ son who has Schizophrenia. Set my alarm for 11+ pm to call her as I go to bed really early. I didn’t react right away as I’m not used to alarms any more. Hubby (social butterfly) spoke to her. Turns out she had 2 beers & couldn’t recall calling me – she found a Xmas card I had sent her the other year..

So now I’ll prolly be awake for most of the ‘nite. Well, at least we reconnected. I also did w/g’friends of 40 yrs. ago in Mtl. last summer.

#84 renters rule on 12.21.12 at 1:40 am

@ double-0-realtard.

you are a freakin RE pumping idiot. I am guessing that you passed the 3 week RE course… but did you even graduate from high school?

You may be the biggest idiot to ever post on this lame blog.

Ugh, I vote for banishment!

#85 ex bc boy on 12.21.12 at 1:43 am

Oh Fukeh!!!! 2019!!!???

#86 earlybird on 12.21.12 at 1:44 am

Fantastic post! Reversion to the mean is inevitable, cheap credit/lax lending have just delayed it, and that is almost exhausted.

I dont think gold is a commodity because its not consumed, it only changes form and isn’t destroyed. How much of it is for sale at any given time determines price…which makes it very predictable….

#87 Bailing in BC on 12.21.12 at 1:50 am

I love it when the newbies like OOO turn up and tell us something mind shattering like “renting is throwing our money away” or “paying someone else’s mortgage”

If only Triple F***all had turned up earlier we could have saved ourselves five years of discussion.

Issue decided – this pathetic blog is now redundant.

#88 Nostradamus Le Mad Vlad on 12.21.12 at 2:00 am

-
Please be advised that at 12:30 PST, humanity will be assimilated into Bernie Madoffwithallthelootintheworld. We meet in Hades for refreshments! First, 5:01 clip Monty Python’s version of the end of the world.
*
#61 Nemesis — “… what is with Dogs anyhow…” — Nemesis, dogs, indeed most animals don’t bother with trinkets like PMs, GICs (‘tho they may bite The Orange Guy’s hooters once or twice), and don’t make outrageous predictions.

Like us, they’re here for the beer and cheer!
*
New Retirement Model incl. no savings; Belarus – China At least they didn’t have to go cap in hand to the IMF; Young People are being at the hardest by US poverty explosion; Af’stan and Banxters Why they want us there for twelve more years; Charge too much, lose more customers. A fine way of doing business; Caring Bank? Not if it’s employees cast a different light on it; Thank oDg for taxpayers Poor Michelle. She couldn’t wait; 28:31 clip Chris Hedges’ Third World America; Boehner Very complicated chart; France Screwed nutty; Facebook Hiding behind the mask of an IPO.
*
1:09 clip HAARP went apeshit at midnight Wed. / Thurs., so does it have anything to do with this — 2008 article It’s good to look back and rre-read that the US Fed’s 99-year lease expires today, but Hold on there, pardner! Links in; and the Transit of Venus through Saturn also happens today, Aztecs vs. Mayans Links in, Mayan Apocalypse Yawn, but Another Perspective; The m$m ignored this, but most know the m$m is controlled and paid for by someone else; Biometrics and Immigration How our govts. swap info.; Pay the Piper War costs plenty, so charge the population; China and its new ICBM missiles; Social Disorder Was the school right to expel him? Methinx yes; Agenda 21 Re-branding A21 for global environmental control; Boiling Water That’s mild for Siberia; Brussel Sprouts overdose These are dangerous veggies; Soccer Weird encounters of the ghostly kind, and Falcao scores a cheeky goal in 5 a side comp.; Walmart sells out assault rifles in five states; Pizza Hut’s monstrosity; McLaren Needs a V-48; 2:14 clip Ford Shelby at 200 mph.

#89 rp1 on 12.21.12 at 2:05 am

“Just some advice for the young married couples that are renting, as know you are horny to buy a home, so just wait a few years; save your money for the big day; and do not shoot high, but buy something modest, and call it a starter home.”

Please shut up with your worthless and condescending advice. We tried that and prices shot up. Then after a brief blip down they shot up higher. Are we buying and losing x00k? No. Are we waiting until 2019? Fuck no. Do you have anything to say? No? Well then Fuck You.

#90 JuliaS on 12.21.12 at 2:09 am

Renting vs owning argument that OOO has started is meaningless. There are times when buying is cheaper than renting, there are circumstances when renting is cheaper than buying.

Ownership carries many more responsibilities, physical and financial. The benefits are – ability to resell for profit if the market allows (no guarantees). Ability to vary lifestyle and environment which rental equivalent may not permit. The ability to rent the place out and make some investment income (while paying down mortgage at the same time).

Renting offers freedom of transportation – the ability to change location any time at will, to depend less on employment conditions. Renter’s rule #1, as the comedian Michael Winslow says: “It ain’t mine”. Sure you can do less in a house that ain’t yours, but you can also get away with more. Lots of maintenance related headaches are landlord’s problem. If a costly repair comes up, in an owned house it would mean an instant hit to the wallet and inability to sell. In a rental if a pipe breaks and the walls start dripping – move out the next day.

Things happen in life. If you rent, you can tolerate many unexpected surprises. If you own, your life better be laid out for the next 20 years.

Maybe OOO has such job security. Maybe he’s a public sector pencil pusher. I’m not, so I prefer to rent.

#91 Actus Reus on 12.21.12 at 2:15 am

OOO wrote:

“The rent vs buy example was relating to first time purchasers moving into the market, buy low and at the right time obviously”

—–

Talk about moving the goalposts. That’s the whole point genius – currently it makes no sense to buy a home into a lowering tide. With interest, maintenance, taxes and insurance you are also throwing your money away, never to return.

Those of us that have been smart enough to buy in the early 2000’s and liquidated in the past year or so have been dumping assets and enjoying massive exemptions on capital gains.

Now, we wait on the sidelines for the downshift cycle to begin anew as suckers that swallow the “it’s different here, you’re throwing your money away renting, prices always go up” drivel line up to be bound by the shackles of wage slavery and perpetually pay for their cubes.

#92 A$$hole on 12.21.12 at 2:23 am

You are all a bunch of Dr. Wayne’s…

#93 Mel on 12.21.12 at 3:56 am

If prices stay ‘flat’ like the monkey in the video said, well, brace yourselves for a free fall.

History will show you the bigger the bubble, bigger the bust people will have to endure. I guess it is another way of getting punished for stupidity.

For everyday folks like us, the last thing we need to pay attention is to people whose income come from the industry they are talking about. Unless of course, you want to loose it.

#94 Buy? Curious? on 12.21.12 at 4:15 am

What does it take to be a economic commentator for Global? Here, let me take a swing at it.

“2013 looks like home prices are going to mildly appreciate in the beginning but as Spring arrives, a healthy balance of supply and demand with see home prices increase by 12% seasonally adjusted, according to HPI historical records.”

How was that? Someone call Global. I’ll say it wearing a Man-kini.

Oh, I almost forgot, NHL fans are the greatest fools in all of professional sports in the entire planet. Since the majority of those fans are Canadians, who will take crap from anyone with a smile, the housing correction will be kept behind close doors.

#95 House on 12.21.12 at 5:02 am

Is there a market in Canada that has only gone up 20% in the last 8 years? And that would not be an average!

#96 nubbers on 12.21.12 at 6:44 am

OOO,
Wow. I get exactly the same arguments from my house horny other half. She has a degree in accountancy, but when it comes to property, logic and maths are totally out to lunch.

I have put a huge amount of effort into analysing buying vs. renting but it is a wasted effort on her. By my figures, when house prices are constant relative to inflation, there is not much difference. It more comes down to how often you move and where you think you are in the house price cycle.

However, the point is that she will not debate, not examine or argue with my figures, she just falls back on emotion and ‘renting is wasted money’, or ‘the property pays for itself’. Fortunately, I have not had to endure ‘house prices always go up’ for some years now, not since the crash here in the UK.

The only other sources I get ‘renting is wasted’ money from is estate agents or other vested interests. They won’t get sued for saying that.

OOO, you are either a vested interest or a fool.

#97 Ralph Cramdown on 12.21.12 at 7:48 am

This Boner guy is my new favourite politician. I was going to buy some stocks, and he whispered in my ear “I can get them for you wholesale. Watch this.”

#98 I'm stupid on 12.21.12 at 8:06 am

Wow the world didn’t end. That means most Canadians are screwed.

#99 Bigrider on 12.21.12 at 8:42 am

#18 Chickenlittle.

Great post and all too familiar a conversation in an Italian household.

#100 Tony Right on 12.21.12 at 8:43 am

I’m part of generation X or Y or whatever (1979), and I’m stunned at how many people in my generation(s) are zombies for houses that are priced above the moon (more importantly, their income!), considering a large chunk of them have post-secondary degrees and are supposed to be intelligent. I really feel it’s because my generation(s) have grown up on television and movies. We have watched perfect families in huge homes a la Cosby Show, Fresh Prince of Bel Air, Home Alone, and Christmas Vacation (and now HGTV). They all want that life with that home and to show it off to friends, especially at Christmas time, regardless of the financial impact it might have on their lives. And if you were to ask them what an equity is they’d look at you like a deer in headlights. What used to take my grandparents their whole lives to save for is now taking a few years after university/college. As Garth says, this cannot end well!

#101 Bigrider on 12.21.12 at 8:44 am

#24 – OOO.

The sum total of your IQ.

#102 Amazed on 12.21.12 at 8:50 am

#71. Spot on about mattamy I know people that waited in line for two days in oakville to buy a high priced home and others who bought when people returned their purchases 5 days later. Everyone tells me they are going to make soooo much money.

#103 salonist on 12.21.12 at 8:57 am

church for sale

http://www.loopnet.com/Churches-For-Sale/

#104 unbalanced on 12.21.12 at 9:00 am

To # 84 oslec. I think you deserve Dr.wayne comments.

#105 Ret on 12.21.12 at 9:21 am

All things being equal, it looks like… but add in a few black swan events and then, who knows?

SIL bought in Florida for $211,000 in June 2007 after a 20% drop in local prices. Her place has dropped another 35%. It was once Zillowed at $272,000 and is now $120-125,000. The house next door has been listed for over 7 months at $115,000. No buyer.

Patience will reward those who wait each and every month until we get to the bottom. Price drops are really like tax free income, which trumps paying an after tax mortgage on a declining property any day in my opinion.

#106 live within your means on 12.21.12 at 9:26 am

May your home be filled with the joy of family and friends this holiday season & wishing all of you good health & prosperity in 2013.

And, for a good seasonal laugh, check out:

http://www.youtube.com/watch?v=wn6HI5JQBhQ

We listened to the CD yesterday. It’s become a Christmas tradition.

#107 sheik yahboudi on 12.21.12 at 9:48 am

Those dogs are unhappy because their Vancouver owner just rented out their doghouse as a ‘coach house’ to a single mom, three kids, a cat and a monkey in a jacket. $1200 a month

Just sayin’

#108 Picasso on 12.21.12 at 9:57 am

!!!!!!!!!!! I’M STILL ALIVE !!!!!!!!!!!!!!

http://www.youtube.com/watch?v=VbhsYC4gKy4

#109 Clockbike on 12.21.12 at 10:31 am

@82 TRT
“The maximum outstanding insured exposure for private insured mortgages will be increased from $250 billion to $300 billion. The current risk premium is being replaced by a risk fee payable by the Company to the federal government equal to 2.25 percent of gross premiums written.”

That’s a cap on both of them in aggregate, not individually. So: a 50 Billion hike in the cap, not 100.

#110 The real Kip on 12.21.12 at 10:43 am

Don’t know about 2019, I’ll leave that to you Gsrth but 2013 is going to be another very good year for the construction industry in GTA. Lots on the go and more coming and not just condos either.

Enjoy it!

#111 Mr Buyer on 12.21.12 at 10:46 am

This guy here talks a bit about soft landings or not near the end of his talk but it is not about real estate…
http://oyc.yale.edu/molecular-cellular-and-developmental-biology/mcdb-150/lecture-24

#112 █ ♣ █ ANONYMOUS on 12.21.12 at 10:46 am

so it looks as if America is going to be going over the Fiscal Cliff after all ???

Never was going to happen, and still won’t. Solution in January. — Garth

#113 Patiently Waiting on 12.21.12 at 10:46 am

104 Tony Right on 12.21.12 at 8:43 am

I’m part of generation X or Y or whatever (1979), and I’m stunned at how many people in my generation(s) are zombies for houses that are priced above the moon (more importantly, their income!), considering a large chunk of them have post-secondary degrees and are supposed to be intelligent. I really feel it’s because my generation(s) have grown up on television and movies. We have watched perfect families in huge homes a la Cosby Show, Fresh Prince of Bel Air, Home Alone, and Christmas Vacation (and now HGTV). They all want that life with that home and to show it off to friends, especially at Christmas time, regardless of the financial impact it might have on their lives. And if you were to ask them what an equity is they’d look at you like a deer in headlights. What used to take my grandparents their whole lives to save for is now taking a few years after university/college. As Garth says, this cannot end well!
———————————————————-
I know many people that have mortgages on 1 million or much more … seems there is no fear of debt for some reason … This is what happens when you miss price the cost of capital for too long … this is the result of low interest rate policy, zero down and cash back mortgages with 40 year amortizations, and CMHC provides 600 billion dollars in no risk guarantees (courtesy of the tax payers) to the banks etc… where people with no money are given a free ride …

Thanks Garth for providing this forum, and thanks to all for participating in this blog … Merry Christmas to all!
pw

#114 M G on 12.21.12 at 11:00 am

No Inflation = no rate tightening in the immediate future. You never know boys and gals, one last hurray for real estate. I am convincing my mom to sell her house and put money into gold. Sell calls on gold stocks and collect a premium!!! I beleive there is a etf that does this. Excellent way to get income from gold sector. Garth if you know this etf please let us know. I believe it is a horizons product.

It’s available under the Suicide Financial brand. — Garth

#115 robert james on 12.21.12 at 11:06 am

I think the money lenders should take one for the team and just jump off the f—ing “Fiscal Cliff” and be done with it.. Who cares !!!

#116 ReAltor on 12.21.12 at 11:18 am

Omg, lol — 2019
It seems that the bottom is always
Five years away. 2009 was the year to
Buy. Stop trying to time the market
How old are you guys going to be when you
Buy your first home

#117 Steven Rowlandson on 12.21.12 at 11:35 am

Yes patience is required when one expects a real estate price collapse. It is a little bit like how a komodo dragon hunts. The dragon waits for a prey animal to wander by and then the dragon takes a bite and then follows the prey for a week or so until it keels over from blood poisoning and then lunch is served.

With real estate the fix went in when prices persistently exceeded the saving and earning capacity of possible home buyers no matter how low the mortgage rates were. In the real world the capacity to pay is way below the prices expected. This is just like the water buffalo getting blood poisoning from the dragon bite by the way. Sales are dropping off as the last of the rich buyers are getting what they want and soon there will be no support for real estate prices as they are now.
When the maximum capacity to pay amounts to 5 or 10 cents on the dollar real estate prices must free fall or there will be no sales. Good for financial dragons and vultures but disappointing to say the least for real estate cultists, investors and their high priests the realtors.

#118 Gotthardbahn on 12.21.12 at 11:39 am

Fine Garth, whatever.

All these unsold condos in Toronto and more in the pipeline and builders STILL wanna build more of them. These guys can’t ALL be stupid, or ill-informed, or both, can they? Explain all the developments in my area – Young & Eligible in the Big Smoke – both announced and under construction, and give me a plausible reason as to why these builders want to lose money.

#119 Ignore OOO on 12.21.12 at 11:52 am

All of you have wasted so much time reacting to OOO. Do like Mr Turner, ignore him, he is not worth the effort.

PS He is not a property owner, he is a RE agent.

#120 FN Aiks on 12.21.12 at 11:53 am

Dogs are great. Grab a rum and egg nog and laugh your bum off for two minutes:
http://www.buzzfeed.com/mattbellassai/the-40-greatest-dog-gifs-of-2012-6z51

#121 futurologist on 12.21.12 at 11:56 am

#116 █ ♣ █ ANONYMOUS on 12.21.12 at 10:46 am

so it looks as if America is going to be going over the Fiscal Cliff after all ???

Never was going to happen, and still won’t. Solution in January. — Garth
———————
Fiscal Cliff is political theater.
Solution or no solution does not matter.

Soviet Obamostan (former USA) is gone.

It is walking dead body.

2013 for Soviet Obamostan – collapse, chaos, anarchy, riots and criminal tsunami.

Next: Dictatorship of King Khusain Obama the First.

#122 45north on 12.21.12 at 12:05 pm

robert james: the money lenders should take one for the team

pretty funny

#123 jess on 12.21.12 at 12:13 pm

the “container cliff”
14,500 workers at the 15 ports—including the 4,000 dockworkers in New York and New Jersey—could walk off the job on Dec. 30.

#124 Charlie on 12.21.12 at 12:16 pm

#36 From Mississauga with Love

The math is more complex than that. If your place is reduced by 20%, that is a 40% fall from where is started. For example, if you have $10, and you have a 100% increase, you have $20. It then only needs to fall 50% to fall right back down to $10; all the gains would be gone…!!! This math does not seem to be appreciated by many in RE, and yet the wealth consequence is huge.

#125 jo on 12.21.12 at 12:35 pm

#18 Chicken little

Take comfort, you are not the only one. My hubby and I have had to listen to similar speeches for 20+ years. Now we are old enough to realize some relatives just don’t get it, they are stuck in their glory days. We just live our life to suit us, that is all that matters. Take pity on them, they will never understand. Have another glass of wine and ignore them.

#126 Dupcheck on 12.21.12 at 12:39 pm

Rimm is at 11 now, bad stock to play with…

#127 Form Man on 12.21.12 at 12:42 pm

#114 Kip

See my post from a few days ago regarding the reasons developers keep building in the face of a downturn. You seem to think continuing with the overbuilding is a good thing……….

It just makes the correction that much more painful……

#128 jess on 12.21.12 at 12:47 pm

..state of badness

EPA has uncovered more than 140 million invalid renewable fuel credits, known as RINs, generated by three biodiesel companies, representing between 5 and 12 percent of the biodiesel market.
==============
balls with curves

http://www.stltoday.com/news/opinion/editorial/state-of-badness/article_147d91cc-5db2-54d4-80ff-e2727cd1dd33.html

http://en.wikipedia.org/wiki/Curveball_(informant)
http://www.alternet.org/story/152855/top_secret_america%3A_the_rise_of_the_new_american_security_state?page=0%2C2

#129 sciencemonkey on 12.21.12 at 12:50 pm

@ #70 The Biotech Guy

I have also been curious and doubtful about returning to the historic price/income ratios of ~3. I agree that cheap credit has moved prices away from the fundamental price/income ratio. Equally important, however, is that the magnitude of this ratio depends on population pressure and land availability.

If most people want something (property) and demand (population) outpaces supply, only the wealthy can afford it. Apparently forty years ago a single lower-middle class salary could afford a SFH, but now there are so many more people in the cities, so that it takes dual upper-middle class salaries to barely buy the same house.

I would support laws to prevent any non-citizens from buying property and to tax capital gains on primary residences. These laws would lower the fundamental price/income ratio. Of course those who hope to buy would endorse this, while those who hope to sell, and governments who enjoy taxes and the appearance of a healthy economy, would oppose this. If we tie this into how high home prices raise operating costs for companies and thus drive them out of Canada, I would argue that such a law would benefit us all through a fundamentally healthier economy.

#130 OOO on 12.21.12 at 12:51 pm

#105 Bigrider on 12.21.12 at 8:44 am
The sum if your 000IQ,

It is OOO not 000. Add up three o’s and get back to me!

#131 robert on 12.21.12 at 1:04 pm

The idea that Vancouver and TO will be the focal point of the Canadian Real Estate bubble is probably fairly accurate but as we have noted Kelowna hit the skids first. This week in sleepy Salmon Arm there were 6 new listings and much to my shock 4 were court ordered sales. These small interior BC communities seem to be taking it on the chin right now. Limited employment and most often low paying, combined with very few qualified buyers is a perfect example of what Garth has been talking about for years. Now that the banks are asking for appraisals, deals are going sideways as many of these appraisals are coming in below assessed value. This entire cycle appears to feed upon itself and that is why the correction often spikes far below the mean. Fear and greed should enter the equation sometime this spring.

#132 Canadian Watchdog on 12.21.12 at 1:05 pm

Good news for the blog. I have price drops data for Toronto now.

1040 Willowdale Ave – Off the Market

May-12 C2364804 1040 WILLOWDALE AVE $950,000
Jun-12 C2380882 1040 WILLOWDALE AVE $888,000 -6.5%
Jun-12 C2380882 1040 WILLOWDALE AVE $838,800 -11.7%
Aug-12 C2439961 1040 WILLOWDALE AVE $798,000 -16%

11 Gwendolen Cres, Toronto, Ontario, M2N2L9

Jun-12 C2379894 11 GWENDOLEN CRES $2,439,800
Jun-12 C2379894 11 GWENDOLEN CRES $2,369,800 -2.9%
Jul-12 C2420983 11 GWENDOLEN CRES $2,269,800 -7.0%
Sep-12 C2465023 11 GWENDOLEN CRES $2,151,000 -11.8%
Oct-12 C2487779 11 GWENDOLEN CRES $2,098,800 -14.0%
Nov-12 C2509247 11 GWENDOLEN CRES $1,998,800 -18.1%

Inside a ravine-side home in Toronto’s Beaches

Feb-12 E2292305 16 BALSAM RD $2,487,000
Apr-12 E2292305 16 BALSAM RD $2,349,000 -5.5%
May-12 E2362159 16 BALSAM RD $2,349,000 -5.5%
Jun-12 E2362159 16 BALSAM RD $2,299,000 -7.6%
Jul-12 E2415722 16 BALSAM RD $2,299,000 -7.6%
Aug-12 E2415722 16 BALSAM RD $2,238,000 -10.0%
Sep-12 E2415722 16 BALSAM RD $2,138,000 -14.0%
Nov-12 E2511352 16 BALSAM RD $1,999,000 -19.6%

#133 Form Man on 12.21.12 at 1:13 pm

#122 Gotthardbahn

Same answer as I gave Kip. You guys just don’t seem to want to listen to facts……..

#134 Mayan Calendar on 12.21.12 at 2:03 pm

Sorry…small typo….

The Calendar translation meant that Smoking Man and Dr Wayne would cure Hemorrhoidsand Insomnia….

Sorry for any undue terror, panic , overpriced “The End Is Near” signs….or unloading of Real Estate assets

#135 TnT on 12.21.12 at 2:04 pm

CDN Watchdog – Good news for the blog. I have price drops data for Toronto now.

OMG!!! that’s great!!!! Let me just reach in my pocket here and slap down $1.99 million.. can’t beleive I just save big bucks!!!!

#136 smartalox on 12.21.12 at 2:17 pm

@ Canadian Watchdog:

Wow! The price of that house on Gwendolyn is falling at a rate of almost $3000 a day! And still no sale!

Shouldn’t someone alert the media?

#137 -=jwk=- on 12.21.12 at 2:17 pm

Stop mocking triple O becasue he can’t do basic arithemtic, and doesn’t think ‘interest’ is money thrown away.

but this:
If prices hold indefinitely at say 7 times income so what ? People will live with their parents, or get to cheap condos or rent basements.

No, this never happens. It can’t because sellers NEED to sell. The idea that all sellers will stop getting married divorced, graduating, new jobs, have kids etc is silly. IF sellers need to sell, and many do, they have to come down to what people can pay.

Even the spec’rs can’t hold money losing ‘newly renovated’ mc mansoins for very long. They will cut and run. See the Watchdog post above…

#138 Toronto_CA on 12.21.12 at 2:30 pm

#122 Gotthardbahn on 12.21.12 at 11:39 am

Ask all the condo builders in Florida about losing money and clairvoyance that you seem to attribute to them.

Oh right, it’s different Canada.

#139 Mike in Surrey on 12.21.12 at 2:35 pm

What is a good property to buy? When price equals 240 months of rent. So $1700 rent per months equals $408,000. Currently, Burnaby town-house sold below $450,000. So, just take 15% off every asking price.
At today’s low interest rates, use x3 income as your starter home, so if 3 adults making $50,000 each. Buy that $450,000 town-house (1400 SF) in Burnaby Today. Don’t waste your money on rent, as appreciation on principle residence is Tax Free. Unless you can rent that same Town-House for $1,300. Remember that one bedroom Down-Town costs $1000 per month to rent.

#140 bill on 12.21.12 at 3:05 pm

”Not a high end dream home but rather property you can afford and build some equity.”

and where would that be ? Yale? Boston Bar? Spuzzum? its a long ,commute from the hinterland. and no cell phone service….

#141 bill on 12.21.12 at 3:07 pm

#133 skeptical on 12.21.12 at 12:49 pm
I second that.

#142 Daisy Mae on 12.21.12 at 3:24 pm

CBC: “And while the cost of flying always goes up around Christmas, this year it’s higher than ever according to airline analyst Robert Kokonis.

Canada’s robust economy means airlines can charge more, and they are — between eight and 10 per cent more over this time last year, he says.

“Certainly prices are up this year. This is not something consumers are imagining. The ability of consumers to fill those seats at these prices is helping to keep prices up,” says Kokonis.”

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

Did you hear that? Canada has a ‘robust’ economy! Yea…….

#143 Mad Scientist on 12.21.12 at 3:31 pm

What up with everyone jumping down everyone’s else’s throat this close to Christmas – chill – ask 10 people the same question and you get 10 different answers – Its a matter of opinion!!

I rented – totally hated the years I did – and those who say you just can pack up and move – really, cause I signed lease agreements and was legally on the hook if I bolted. And the headache of moving keeps mosts where they are.

I now own, and in under 14 years this puppy will be totally paid for – there is always a time and place to buy –

We survived the Mayan Calender – maybe we won’t survive mankind …. (just saying)

Love the blog G -

#144 Count Flipalot on 12.21.12 at 3:46 pm

In reply to #17-OOO

There’s nothing wrong with your logic if you have a substantial down deposit and prices for homes/condos are reasonable to income. The problem with so many in Canada is that they are putting the minimum down payment and are buying when prices are outrageously high.

#145 Bill Gable on 12.21.12 at 4:01 pm

Well – I learned just how much angst is rife here in Vancouver, about Real Estate, first hand.

Christmas get together last night – and one of the group is a top lawyer in Vancouver, and we had a sprinkling of media types and folks from all walks of life.

The Lawyer knows that I spent nearly a decade doing economic commentary – and is also aware of this Blog, and my affection and respect for Mr. Turner, and many of the smart folks that hang here.

He cornered me, in a semi polite way and told me that I was nothing but a ‘gloom and doomer’ – because I believe RE is in for a rough ride, and not just here in delusional Vancouver. He “owns” (*read mortgaged to the hilt plus he used HELOCS from one unit to use for down payments on the other units, like a freaking Ponzi scheme. I didn’t get a chance to say they were demand loans), and thinks he is Donald Trump.

“Everyone wants to live here and there is no way that this market will go down, much less crash”. He waited for my response.

“Whatever you say man, it’s your money, not mine”, was my brilliant riposte.

He then started belittling me for renting. It was starting to get tense, when my Wife, who can charm the racoons out of the Stanley Park Lagoon, stepped in and said “Merry Christmas” and dragged me out of the corner.

This is going to be a very bumpy ride and there are a lot of people that just don’t get it.

Keep hammering away, Mr. Turner – at least some of us get the message.

Sadly – many don’t.

Merry Christmas to all and hope 2013 is great to you and your loved ones!

#146 Devore on 12.21.12 at 4:24 pm

#100 nubbers

However, the point is that she will not debate, not examine or argue with my figures, she just falls back on emotion and ‘renting is wasted money’, or ‘the property pays for itself’. Fortunately, I have not had to endure ‘house prices always go up’ for some years now, not since the crash here in the UK.

Only possible way it “pays for itself” is if it costs less than renting.

It’s funny how things never change, only, as you noted, the inconvenient bits go away for a while. Don’t worry, “always goes up” will make a comeback as soon as prices start edging up.

From my observations I have always maintained, contrary to our host and most of the blog, that couples in the US are no less house horny than they were during the bubble. Only difference now is they have no money! Oh, sure, the other side is more vocal now, having recent history on its side, and is getting more media exposure. But people haven’t changed. They never do it seems. What was that Alberta bumper sticker popular after the last major bust there? ‘Please God, give us another bubble, we promise we won’t waste it this time.’

The more things change…

#147 Devore on 12.21.12 at 4:27 pm

#70 The Biotech Guy

Oh, so not just a soft landing but a “permanently high plateau”, hmm? I put that in quotes so you can conveniently Google it.

#148 panhead on 12.21.12 at 4:35 pm

145 bill
”Not a high end dream home but rather property you can afford and build some equity.”

and where would that be ? Yale? Boston Bar? Spuzzum? its a long ,commute from the hinterland. and no cell phone service….

Been to Spuzzum lately? It dissapeared with the only restaurant. Still remember the 2 french waitresses though … nice outfits …

#149 Sebee on 12.21.12 at 4:51 pm

#42 DMZ

Don’t forget time cutting said grass, doing all the renos wife wants you to do, etc. etc. etc.

I’d like to thank OOO for tipping the argument that renting is indeed the way. After all, where the hell will you ever find a home for $360K in the GTA?

#150 Sebee on 12.21.12 at 4:57 pm

#137 Canadian Watchdog

Watchdog, I’m seeing the same thing. But it’s doing nothing for me.

These insane starting prices mean that really we need to start seeing things like 50% drops. To go back to that $1.1M home next to Food Terminal and Sewage Processing plant which perhaps you saw…that thing honestly should start at $600K listed and that would be high. And then probably sell for $499. That would make some sense overall. If my math is right that would still be somewhere in the area of about $3500 a month to carry that home – which is really about as much as a lovely lovely rental home in a fresh smelling area.

It’s that old trick of marking up the price to put a 20% discount on it, as if we don’t know that they did it. Let’s talk 20% off the 20% off price – now we’re making sense. And surprisingly that would also be back to those reasonable long time averages Garth speaketh of aboveth.

#151 Sebee on 12.21.12 at 5:03 pm

One more thing OOO? As stated here over and over and over again ad nauseum, could you remind us how much it will cost to walk away from the house? And remind me how much that piece of 8.5×11 paper costs on which you print your departure notice to the landlord?

Landlord – such funny name. My toilet is plugeth mee lord. Could you put down your cape and unplugeth it for me?

#152 Tony on 12.21.12 at 5:04 pm

Re: #144 Mike in Surrey on 12.21.12 at 2:35 pm

I think you missed the whole point of this blog. Also remember capital losses on a principal resident can’t be written off.

#153 gladiator on 12.21.12 at 5:06 pm

@ 142 -=jwk=-:
exactly! some people NEED to sell and RE being a marginal market, they drag house “values” down for whole neighborhoods, because the last sale of a comparable house in a neighborhood serves as benchmark for the next sale. The bubble is popping in slo-mo. Pass the popcorn!

#154 sciencemonkey on 12.21.12 at 5:24 pm

CDN Watchdog, my reaction mirrors TnT #140. Those price drops are significant, but do not even begin to move the prices out of the ludicrous range.

#155 Ret on 12.21.12 at 5:25 pm

#127 “14,500 workers at the 15 ports—including the 4,000 dockworkers in New York and New Jersey—could walk off the job on Dec. 30.”

Say it is not so. Where will the CAW/UAW workers get all the Chinese parts needed to build those F-150’s and Silverados? And what will I get the wife on Valentine’s Day if the shelves at Dollarama are bare?

The container cliff? I’ve seen one! There is a magnificent 10-12 high container mountain behind the Ford plant in Oakville?

#156 Inglorious Investor on 12.21.12 at 5:32 pm

After so much hope, er, hype, Thorsten Heins drops a bomb on Wall Street and RIM/RIMM shareholders by announcing RIM will move to a tiered services pricing model. That’s code for we can’t charge what we used to.

This is what happens when you lose so much market share––you lose pricing power. And since services is RIM’s cash cow, well, the stock reacted accordingly today, collapsing about 30% from yesterday’s AH highs.

Not a RIM shareholder currently, but as a Canadian I am pissed off at this company. It will now not be enough for BB10/Z10 to be great. RIM will now also have to have a fantastic marketing and promotions plan in order to make this a success. And that has never been their strong suit. Let’s hope.

#157 brainsail on 12.21.12 at 5:38 pm

#46 Inglorious Investor on 12.20.12 at 10:29 pm

“Or did Thorsten Heins go on BNN and just declare RIM a giant accounting fraud (which would not surprise me, by the way)?”

You knew there was more to yesterday’s news about RIMM. Under the new structure some service charges will account for less revenue or even none at all. Dropped further today and closed at $10.92 and still dropping a bit after hours.

#158 brainsail on 12.21.12 at 5:40 pm

#161 Inglorious Investor on 12.20.12 at 10:29 pm

Whoops, you beat me!

#159 bill on 12.21.12 at 6:17 pm

panhead-
did it burn down? havent been by for a year at least but I saw a couple of huts behind whatever burnt…
presumably it is cheap enough to buy….not that I am in the market.
panhead : were you by chance on a panhead when you viewed it last? excellent road for a cruise. and a lack of cops as well [except boston bar. .often a radar trap on that big hill on the upstream side.]

#160 nubbers on 12.21.12 at 6:32 pm

Biotech Guy @70
I don’t think oil is a good comparison for house prices. Tulips would be better. Look at Case Shiller data since 1890.

#161 thx Canadian Watchdog on 12.21.12 at 6:54 pm

re #137 Canadian Watchdog on 12.21.12 at 1:05 pm
“Good news for the blog. I have price drops data for Toronto now…..”

I just looked up that house on Balsam Rd, it’s back on the market now at $2,129,000. I know, it doesn’t make any sense…..if you can’t sell it at $1,999,000, what are the chances of raising the price and selling it?

Weird market for sure.

#162 Charlie on 12.21.12 at 7:09 pm

I don’t understand this talk around a solution for the fiscal cliff – there is no solution. All it represents is how long the US will remain in mid-air before falling. The fiscal cliff is an issue because of unpaid debts, and massive deficits. How is expanding upon the problem a solution? How is the US economy any different from houses in Canada and the Canadian consumer? It is a story of excessive debt – the US borrows 43 cents of every dollar it spends, only sustainable with super low interest rates afforded by central banking and reserve currency status. Like Greece, at some point the market will realize there is no hope, and demand a higher interest rate.

#163 GuyInBurnaby on 12.21.12 at 7:40 pm

Don’t think I was a very patient person a few years ago, but I can be much more comfortable waiting for anything which I planned, anticipated and worked my ass off for it. So, when dealing with pressure for real estate from family (wife, parents, not as firm as before though), ‘I can wait’ will be my usually answer. On top of that, a lot of things currently on my list (learned from this pathetic blog of course) such as diversified investments, prepare for retirement, kid’s education, business/career ideas… I don’t think local RE will become affordable for me in x years for sure, but it’s OK, I have a plan and I stick to it. On top of that, there are far many more things which can make me obsessed, RE won’t be any of them.

Any way, Happy holidays everyone on this blog and Happy new year. Thank you Garth again for another year of free but GOOD service.

GIB

#164 Amazed on 12.21.12 at 7:52 pm

Power of sale quotes “there are four registered offers, several are close”… Several of four? The bank would like offers to be within 5% of asking… Ok extend another day.. Extend another day. I say keep bidding low. A house is only worth what someone is willing to pay for it. I respect what the agents and the bank want… But reality is another matter.

#165 DonDWest on 12.21.12 at 8:10 pm

#155 Sebee

When someone is willing to “compromise” by paying $3500 a month to own a house next to a sewage plant – something tells me we have a long way to go. People’s perspectives on what is a fair price for a home are so warped because the prices have been skyrocketing high for so long. . .

In the USA you would be lucky to sell a home next to a sewage plant for over 100K. I’ve seen such homes sell in the 50k to 80K range.

#166 robert james on 12.21.12 at 8:10 pm

Bill Gable #150 Living in BC ,,I am sure that you know that there is a very special kind of stupid regarding real estate when it comes to BC.. You mentioned Helocs..I live in the Okanagan ( apparently,, it is a niche market here that cannot crash so I have been told by a retired realtor and if you look in Re-Max woman`s eyes, you can see the back of her head) Anyway, a few years ago I started putting a lot of cash (not dope money but Bakken oil money) into my local credit union and I asked the CU manager how safe the CU was as I was concerned with under water mortgages.. He said everything was cool but he was worried about Helocs as a lot of Donald “comb-over” Trump wannabes took out Helocs to buy investment properties.. So ,, it looks like to me BC will be in for a major league shake and bake in the near future..

#167 Bottoms_Up on 12.21.12 at 8:29 pm

#63 From Mississauga with Love on 12.20.12 at 11:24 pm
—————————————————-
No, my anecdote is relevant because it shows that even in an ‘up’ market renting can be a better option (depending on your time frame). No one is debating what is the better long term option. Garth has warned people that housing is overvalued, and he is being proven right. Don’t worry, you will get your 2009 prices back.

#168 Dr. WAYNE on 12.21.12 at 8:36 pm

Last post an error … no kidding …

That’s okay. I trashed it. — Garth

#169 Daisy Mae on 12.21.12 at 8:41 pm

#117 Patiently Waiting: “I know many people that have mortgages on 1 million or much more … seems there is no fear of debt for some reason … This is what happens when you miss price the cost of capital for too long … this is the result of low interest rate policy, zero down and cash back mortgages with 40 year amortizations, and CMHC provides 600 billion dollars in no risk guarantees (courtesy of the tax payers) to the banks etc… where people with no money are given a free ride …”

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

No fear of debt? There will be fear — lots of it — when their mortgage rates reset, or they lose family income for whatever reason. We’ve been coasting along for a very long time. Now we’re approaching a realty check.

#170 robert james on 12.21.12 at 8:49 pm

Oh,I love the picture by the way.. I copied it and put it on the firdge.. I got a bad azz, poorly behaved chocolate lab.. He is a rowdy bugger to be sure!! LOL

#171 simkev on 12.21.12 at 8:52 pm

#24 / 000

You said rent will cost you 360,000 over 20 years.

Purchase a home at $360000+
Interest for 20 yrs = $469459.20 (3.99% @20yrs)
You said that even at a 50% loss ($180000) you come out ahead.
The Interest is $109459.20 on this home.
Taxes are $50000 for 20 yrs (approx)
Inflation is 2% yr @20 yrs = $8216.40
So If the home is worth 180000-109459.20-50000-8216.40= 12324.40 + cost of any repairs and new appliances and renovations and a multitude of other things and no extra money to invest that offer a return= Living in a cardboard box for retirement in a low cost country !

#172 CoreyMC in Calgary on 12.21.12 at 9:24 pm

#150 Bill Gable

Don’t worry man, I will give you nothing but respect for being a level headed intelligent guy. The rest of them can go screw themselfs;)

#173 Canadian Watchdog on 12.21.12 at 9:30 pm

Now we get to see…

Abandoned renovation projects gone wrong

1145 Broadview Ave Detached For Sale Toronto Ontario

May-12   E2353447     1145 BROADVIEW AVE      $679,000     
May-12   E2371987     1145 BROADVIEW AVE      $599,000     -11.8%
Jun-12    E2382402     1145 BROADVIEW AVE      $685,000      0.9%
Jul-12     E2408994     1145 BROADVIEW AVE      $665,000     -2.1%
Jul-12     E2408994     1145 BROADVIEW AVE      $655,900     -3.4%
Oct-12    E2489655     1145 BROADVIEW AVE      $549,000     -19.1% Sold

Video listings with Rambo soundtrack themes
 

121 Kalmar Avenue Toronto, ON ON M1N3G8

Jun-12    E2380116     121 KALMAR AVE      $649,000     
Jul-12     E2408436     121 KALMAR AVE      $635,000     -2.2%
Jul-12     E2408436     121 KALMAR AVE      $630,000     -2.9%
Jul-12     E2408436     121 KALMAR AVE      $610,000     -6.0%
Aug-12   E2408436     121 KALMAR AVE      $586,000     -9.7%
Aug-12   E2436926     121 KALMAR AVE      $589,000     -9.2%
Aug-12   E2436926     121 KALMAR AVE      $586,000     -9.7%
Aug-12   E2447706     121 KALMAR AVE      $585,999     -9.7%
Oct-12    E2447706     121 KALMAR AVE      $575,000     -11.4%
Nov-12   E2503785     121 KALMAR AVE      $499,000     -23.1%

 

Or just plain ol' big fat price drops

158A Old Yonge St, Toronto

Jun-12    C2400759     158A OLD YONGE ST      $3,670,000     
Aug-12    C2441090     158A OLD YONGE ST      $3,199,000     -12.8%
Sep-12    C2453364     158A OLD YONGE ST      $2,899,000     -21.0%
Sep-12    C2453364     158A OLD YONGE ST      $2,699,000     -26.5%
Oct-12     C2486587     158A OLD YONGE ST      $2,449,900     -33.2%
Nov-12    C2515986     158A OLD YONGE ST      $2,449,900     -33.2%

 

#174 Mayan Calendar on 12.21.12 at 9:35 pm

Hey…

Dr. Wayne played the role of “Robbie the Robot” to pay his way through Kindergarten

#175 HD on 12.21.12 at 9:58 pm

#150Bill Gable on 12.21.12 at 4:01 pm

#168GuyInBurnaby on 12.21.12 at 7:40 pm

+1

Best,

HD

#176 cow on 12.21.12 at 10:32 pm

#156 Sebee on 12.21.12 at 5:03 pm

“Landlord – such funny name. My toilet is plugeth mee lord. Could you put down your cape and unplugeth it for me?”

Just had to commend you Sebee, whoever and wherever you are: let me kiss your ring. Darned near pee’d my jammies reading your post! Too funny.

#177 Canadian Watchdog on 12.21.12 at 11:43 pm

#155 Sebee on 12.21.12 at 4:57 pm

“It’s that old trick of marking up the price to put a 20% discount on it, as if we don’t know that they did it. ”

Here’s a perfect example. Link

#178 Stanley on 12.23.12 at 12:32 am

Do you know any Canadian Preferred Share ETF that pays 7% dividends? Thanks!

#179 It’s a Merry Christmas…eh? « Jay Currie on 12.23.12 at 4:09 pm

[...] Canadian housing prices are falling off a cliff of their own. [...]

#180 ElNik2013 on 12.23.12 at 7:59 pm

I’m glad I found this site even though I don’t agree with all of Mr Turner’s points, namely gold and silver.

I just wanted to say that some people forget that there some basics that we all need: Food, shelter and clothing.

Does anyone say to you, “why are you throwing your money away on groceries at the grocery store, go buy a farm instead of making the store owners rich”? That’s right, no one says that to us, but they do with shelter/housing. Yes, I’d like to rent a house from a bank, but only when the conditions make more sense than to rent. I live in Montreal, have a modest income that I manage well and have some savings. I rent a 2-br apt for 850 including hydro, I don’t think I can buy an equal unit for under 1100 and when you factor in taxes and fees, it might be more like 1200. That’s 350 that I could save/invest.

My gut tells me that housing is over priced in MTL, I see so many condo projects being built it’s unreal. I just ask myself, “who is buying all these units”? Anyway, I wonder if anyone here has any thoughts on the MTL RE market.