Sit. Stay.

posing[1]

The first week of the new year – in fact, just the second day – brought some interesting juxtapositions. Stock markets erupted, showering capital gains on investors as the fiscal cliff turned out to be the political theatre I told you it would be. Now, get set for the next act in February – the debt ceiling faux crisis, part deux – and another opportunity to make money.

Meanwhile over in the bond market, prices came down, yields rose and billions went coursing out of fixed income into equities. Say, didn’t I also forecast that? You bet, and this is just the start – which means long-term mortgage rates will be rising this year. So, I hope you locked up when I told you last autumn, or have started negotiations for a blend-and-extend.

Of course, this also means the value of your bond funds will be taking a tumble – which was completely obvious. Makes you wonder how so many people could believe ‘bonds are safe’ and shove record amounts of cash into assets destined to lose value, simply because they bought at the peak.

Which bring us to Vancouver, of course, and another asset class where folks listened to their hormones and bought into a market more topped-out than Lindsay Lohan. Was there any doubt a droop would follow? Hardly.

The Westside is to Van what Rosedale/Bridle Path is to 416. Both are currently in trouble, but the BC richies are really finding out what illiquidity means. There are currently 700 listings for sale (all over $1 million) in the area, and last month a paltry 49 sales – which means there are enough houses now on the market to last 14 months. And just wait for the spring.

This, bad boy realtor Sam Wyatt reminds us, “is the highest it has been since the credit crisis! The detached homes months-of-inventory figure can only be seen as a worrying confirmation of the state of Vancouver’s real estate market.”

As you know, sales in the Mouldy City collapsed by 29% late in 2012 and we should find out this week how the disaster ended, as the local real estate cartel releases December stats. With declining year-over-year volumes since way back last April, momentum has most decidedly turned negative. And in the last few weeks the number of active listings has plunged showing (a) sellers are giving up and (b) there’ll be a torrent of new listings within the next month, overwhelming demand and leading to falling values.

The result seems obvious, suggests Wyatt. “Months of inventory will continue its upward trend and prices will continue to fall.” My prediction: the average SFH in Van will drop back to 2010 prices by March or April. And lots more to come after that.

BTW, just noticed someone posted this listing in the comment section. A North Van house originally listed at $1.3 million, now ‘on sale’ for just $899,000 – a 47% reduction. The fact it’s hideously ugly inside, 56 years old, with ‘peek-a-boo view potential’ and the listing agent is too embarrassed to post a full frontal shot tells you all you need to know about that market. Down, down.

But how are things across the water on the Island, you ask? Let’s ask Dan:

For several years now we have been getting the listings for houses in Oak Bay asking between $500,000 and $800,000. Since we sold our house in oak Bay we have seen prices drop around $100,000 for these homes. As an example a house just sold that a few years ago at its peak could have fetched about $740,000.  It just sold for $596,000.

No wonder there are starving realtors knowing there are MANY realtors serving this area.  Obviously most of these houses will still be for sale a month from now. Anyone who does not see the writing on the wall is in big trouble if they want to sell in 2013.

We’ll see how many of these drop their prices over time to get in the market of what buyers are prepared to pay.  I for one think that there is another $15 -20%, or $100,000 yet to fall before it even begins to stabilize.  In all of these senses your blog continues to hit the nail on the head.  Good work, keep it up.

And how interesting that the recent CMHC meeting here in Victoria said that prices have bottomed and should begin to recover in 2013.  Who in the hell believes this pap?

Not us doggy contrarians, Dan. We just sit back here, watch the human delusion all around, and yap on.

Say, did you see the latest bank survey out this week? Paying off debt – especially historically cheap mortgage debt – is now the main financial goal of people. Investing and retirement planning (although 72% of people have no pension) isn’t even among the top three priorities for Canadians.

So. Screwed.

229 comments ↓

#1 Conrad on 01.02.13 at 9:51 pm

Garth you are a one, maybe two trick pony. All you ever talk about on your blog is the PRC-Vancouver and Toronto. Doom and gloom. Why maybe it is different in the oil rich provinces of Saskatchewan and Alberta. The fact that you offer no insight in these provinces indicates that it is different here. If it wasnt you would have provided proof otherwise.

I was actually planning a piece on Saskatoon is on crack. By the way, ever heard of fracking? — Garth

#2 trevor on 01.02.13 at 9:51 pm

Could you link to the bank survey mentioned at the end of the article?

Here. — Garth

#3 NRI13 on 01.02.13 at 9:53 pm

First!?!

#4 Hoof-Hearted on 01.02.13 at 9:54 pm

Fiiirrsstttt !

#5 East Van on 01.02.13 at 9:55 pm

Please read this article claiming the Canadian Housing Bubble has been engineered by the Harper cons:

http://www.counterpunch.org/2013/01/02/the-big-heist-in-the-great-white-north/

That web site causes blindness. — Garth

#6 totalinvestor.com on 01.02.13 at 9:56 pm

What will happen to the prices of SFH in the US after certain states secede?

#7 T.O. Bubble Boy on 01.02.13 at 9:58 pm

The attitudes of the sheeple towards debt are truly mind-boggling.

People take on giant mortgages because they are “getting in the market” and “don’t want to be priced out forever” and “houses are safe”, but then they are so afraid of the giant mortgages that they put every single penny into paying them off, even when they have no other money set aside for retirement savings?

#8 Jon B on 01.02.13 at 10:01 pm

I like Victoria. Used to live there. Hardly anyone that can afford to buy Victoria RE earns their fortune on the island. It’s all about importing your wealth from somewhere else. If the old folks stop relocating there we can expect Victoria to become synonymous with bargain priced houses.

#9 Sacola FNC on 01.02.13 at 10:02 pm

Fuuuursttttt….agrreed we are screwed

#10 Djb on 01.02.13 at 10:02 pm

2.2% percent gain in my portfolio since December 31st.

Looks like 2013 is off to a great start.

#11 Randy on 01.02.13 at 10:03 pm

F and BOC telling Canadians to reduce their debt levels is a riot….The irony of this is a laugh riot….

#12 Old Man on 01.02.13 at 10:05 pm

Imao as that so-called cheap mortgage debt has new rules and regulations upon it all, so how many will qualify for a renewal with their friendly bank when you are underwater? Omg they will say need more cash or else. They in effect want you to pay up for another term, and it will become round two for the final knockout or you can throw everything at the principal to reduce the monthly payment – do not be a fool!

#13 Rob on 01.02.13 at 10:06 pm

First

#14 Ferrari321 on 01.02.13 at 10:06 pm

another great post – BC is cooked and TO will follow shortly

#15 Honus Wagner on 01.02.13 at 10:11 pm

The fall in price of a bond fund is not really relevant if one invested in it for the right reasons and understands duration. If you held an interest bearing bond outside a fund the same market action would be happening to your bond, you just wouldn’t realize it because you’d be happily collecting your coupons and not trying to sell the bond. Point being, a bond fund or ETF is perfectly valid to satisfy the bond portion of a portfolio. (You do give up some return in the form of expense ratio, however you should benefit from competitive bond pricing — the latter can elude retail investors buying individual bonds). All portfolios should have a bond portion, despite historically low interest rates. However, I get your point that folks may be surprised that the NAV of a bond fund can (like bond prices) decline. All that said, long bonds and bond funds with long duration are probably not a great idea, these days especially. (Better in general to keep bonds short, take the risk in your portfolio using equities.)

#16 Paul on 01.02.13 at 10:12 pm

BC assessments in the mail this week.

http://www.timescolonist.com/news/local/region-s-property-values-dip-1.38031

#17 mark on 01.02.13 at 10:13 pm

Listening to CBC On The Coast and heard the head of Re/Max Whistler, Ann Chiasson, say buyers are getting confidence back and prices will start increasing in Whistler in about 6 months time. This in response to people getting assessments that have shown a decline for the first time in a long time.

Of course the clown hosting the show waved it through like the truth.

#18 Dave on 01.02.13 at 10:15 pm

Anybody see the article (RE advertising) in the Calgary Herald today?
http://www.calgaryherald.com/business/Calgary+home+sales+prices+spike+higher+2012/7767570/story.html

#19 Smoking Man on 01.02.13 at 10:22 pm

Sit stay, ha reminds me of my son who’s getting married this year, he’s getting broken in.

Yes bonds sold off equities surged on like zeronvolume.
If it sustains it self into late next week, I would say Gartho shave the beard,host the cup, and learn to dance Gangnum Style……..if is the question…..

But you never give enough wait to the stupid….

Example, if I went around at the tax farm and told fellow slaves that I saw a UFO last May, I might be set free.
Or questioned why WTC 7 Fell at free fall speed and was not hit by a plane, I would be sized up for a custom tin foil hat…….

Now on the other side, if I told everyone how amazing it was when Mosses parted the sea, or how cool it was that a 3 day old corps, came back to life and floated up to heaven, he’ll I might get hugged and invited to fellowship tea parties.

I have too lived on this planet and these people.

See why it makes me a bit nuts. Logic has no place in the modern world, stupidity rules…….

#20 claudius emperor on 01.02.13 at 10:27 pm

East Van #5, the web site actually looks quite conservative.

WTH has the government to do with the business of ‘insuring mortgages’, taking away the risks from the banks?

In the insurance business there the a notion that if the information presented at the time one buys a policy is deemed incorrect, the coverage can be declined if claims arise.

So the questions is: If CHMC ‘insurance’ is found illegal by a subsequent government or a court would the banks be on the hook for the loans?
And as the banks I really mean the bondholders and owners, not the poor savers.

#21 Rob on 01.02.13 at 10:27 pm

# 5
Cant blame Harper for everything. He did not invent greed and people should be accountable for occuring debt. I have been waiting for years for this correction while putting up with the fact of being a home owner is a social culture of its own. I dont have have debt because of the tough decisions that I made so the only people to blame will be those who didn’t do their research before signing the dotted line.

#22 Chaddywack on 01.02.13 at 10:29 pm

Apparently Vancouver realtor’s phones are ringing off the hook right now because of the 10% drop in downtown prices……at least that’s what was on the CBC ;)

#23 JimH on 01.02.13 at 10:40 pm

For all my relatives and friends living in Canada… who kept saying over and over; “This is Canada, NOT the USA!… It’s different here!”
I’ll only say, “I told you so!” once… just once…
On second thought, no… I won’t… no… I won’t… no…

#24 LJ on 01.02.13 at 10:41 pm

#18 Dave: re: Herald article

Yep, pumping the last fools to get in. The quote I loved the most: “Calgary’s housing market has finally started to recover”. That only took 6 years and it is just in time to enjoy the new mortgage rules and rising interest rates (plus skyrocketing municipal taxes).

Plus, there should be lots of foreclosure sales coming up soon. Especially when the layoffs really start get going due to the heavy oil discounting and continuing depressed Nat Gas prices.

People will probably figure out that they should have stayed in their home province.

Boom, Bust, Rinse, Repeat.

#25 Kokuzi on 01.02.13 at 10:43 pm

“A North Van house originally listed at $1.3 million, now ‘on sale’ for just $899,000 – a 47% reduction.”

The 47% reduction calculation seems a bit odd…
Isn’t a drop from $1.3 million to $899,000 closer to
being a bit more than a 30% drop?

#26 Form Man on 01.02.13 at 10:45 pm

#21 Rob

Agreed. what Harper and Flaherty should be held accountable for is ( after the financial crisis ) continuing with the very same policies as got the U.S. into trouble. Either they were complete idiots, or they deliberately torched the economy to win elections. Which is worse ?

#27 Intuitive Missus on 01.02.13 at 10:46 pm

December Housing Market Digest from Will Dunning.

Toronto market finally showing significant signs of turning down.

http://www.wdunning.com/docs/2012-12.pdf

#28 landlessinvan on 01.02.13 at 10:48 pm

The pictures of that listing in North Van are comical! They couldn’t be bothered to move all the debris sitting on the kitchen counters and to actually close the cabinet doors. In the llving room, the boxes of papers don’t exactly inspire one to purchase this house.

#29 TurnerNation on 01.02.13 at 10:48 pm

I blame the Oakies!

For a while there the mood on this weblog was darker than Smoking man’s liver.

#30 Maria on 01.02.13 at 10:48 pm

My friend just bought a condo/townhome in Oakville for about $389,000….it’s the bottom unit. I am blown away that she spent all her money on what is essentially a basement apartment.

#31 Ralph Cramdown on 01.02.13 at 10:50 pm

Hey, MY bond funds are up. Maybe you’re in the wrong bond funds?

#32 Rainclouds on 01.02.13 at 10:50 pm

#5 East Van

The conspiracy theory is a bit far fetched

expect F+H will be dealing with a rather nasty electorate who may be asking pointed questions in a couple of years………..

#33 not 1st on 01.02.13 at 10:51 pm

Crude oil, gold and commodities up too I might add.

Just another over-reaction by the stock market to another non-solution from congress.

#34 MC on 01.02.13 at 10:51 pm

Today’s rally just flushed out the short SL’s and took out any profitable shorts. With heavily defined resitance so close, and more drama to unfold is it the time to sell the rally?

http://www.cnbc.com/id/100349053

#35 JimH on 01.02.13 at 10:51 pm

#6 totalinvestor.com
What will happen to the prices of SFH in the US after certain states secede?
……………………………………………………………………….

You’re either on drugs, or your head is stuck someplace impervious to reality…
Have you taken a reality check and paused to peek at the antics of the markets the last 2 days? Does it really look to you like secession is in the wind? Really?

“Total Investor”? My granny’s fat a$$!

#36 Jim Lahey on 01.02.13 at 10:53 pm

#54 Dr. WAYNE on 01.02.13 at 12:47 am
=========

“Really sorry and disappointed you didn’t get the FURST position … you may be the lucky one next time … keep trying, don’t give up, as I’m sure there are hordes wishing you all the best in your quest to stand out herein.”

That’s right Wayno. FURST is da man and a hell of a poet. He has stood out on this blog whilst all you have done is shown that you are a first class a$$hole. Why don’t you take your self appointed patrol of all first posters somewhere else cowboy.

#37 Mark on 01.02.13 at 10:54 pm

“So the questions is: If CHMC ‘insurance’ is found illegal by a subsequent government or a court would the banks be on the hook for the loans?
And as the banks I really mean the bondholders and owners, not the poor savers.”

If that happened, all lending in Canada would cease, and houses would crash to all-cash valuations. Which probably would be 5-10% of current prices (since, as Garth tells us routinely, the average new buyer only has an approximately 5-10% downpayment to buy the house). Do you really think the government would take that road?

The CMHC is basically a scheme to transfer a boatload of wealth to owners of Canadian bank shares. I say, load your portfolio up with TD, RY, CM, BMO, and BNS and sleep well at night!

#38 Furst on 01.02.13 at 10:54 pm

An interpretive impression – a piece by Furst

Sorry Gartho, real estate pricees all across Canada and particulerly condominums in 416 will rise. Tax farm slaves will never get it but I do. Now, write something meaningfull and edukate your basement dwelling reeders, because I’m gonna get my drink on and get hit on by yoards of hot beeutifool younger women.

Sheep never learn, they just get slaghtered.

#39 Ralph Cramdown on 01.02.13 at 10:55 pm

#20 claudius emperor — WTH has the government to do with the business of ‘insuring mortgages’, taking away the risks from the banks?

Maybe do some research on how well the financial system worked in the era before mortgage and deposit insurance?

#40 Furst on 01.02.13 at 11:07 pm

#36 Jim Lahey on 01.02.13 at 10:53 pm

That’s right Wayno. FURST is da man and a hell of a poet. He has stood out on this blog whilst all you have done is shown that you are a first class a$$hole. Why don’t you take your self appointed patrol of all first posters somewhere else cowboy.
____________________________________
Mr Jim Lahey, Happy New Year my friend. I wish you and all those at the park a prosperous 2013. May the bingo gods, tire fires and all night booze fests be epic. I didn’t even notice Dr. Wayne’s post but I do appreciate you holding the fort and defending the rights of the FURST posters. We shall post freely and rise against the tyranny that attempts to oppress us.

#41 Dr. WAYNE on 01.02.13 at 11:10 pm

#3 NRI13 on 01.02.13 at 9:53 pm

First!?!
#4 Hoof-Hearted on 01.02.13 at 9:54 pm

Fiiirrsstttt !

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

WOW !!! Two ‘tandem’ mindless a$$holes … probably a major genetic mutation in one of them …

#42 JimH on 01.02.13 at 11:11 pm

Forgot to add that the really hot sectors today were in IT (Comm Equip, Semi’s, Elec. equip, IT services); Materials (Chems, Constr. mats, Mets & mining); Financials (Cap mrkts, Thrifts & mort. finance); and the Tranny’s really kicked a$$, a sure(?) sign that this rally is for real!
Don’t bet against the USA just yet! (patience, jackass!)

About a year ago, Garth’s sage advice was to head into a diversified portfolio of growth/value balanced, sound, diversified, dividend-paying ETF’s and REITS.

Been there and done that, and am a believer…

What’s in your wallet?

#43 Chickenlittle on 01.02.13 at 11:12 pm

I do not believe it is the fault of Harper. My husband and I were offered a no downpayment mortgage at least 2-3 years before he came into power. This was back in 2002 or 2003. The bank approved us for $250k, which for me was an astronomical number, and I said no thanks. We were 22, just married, and my husband was new to the country. The banks and other credit agencies approved us for way too much and way to often in my opinion.

#44 Tony on 01.02.13 at 11:17 pm

Re: #18 Dave on 01.02.13 at 10:15 pm

The problem is it could take a century yes a century before the 2007 price peak is surpassed. Oil will only fall in price and may never see one hundred dollars a barrel in our lifetimes again. The real story is on mls where foreclosures are increasing and every listing ends up with reduced and reduced again.

#45 Kaganovich on 01.02.13 at 11:17 pm

#37 Mark
“So the questions is: If CHMC ‘insurance’ is found illegal by a subsequent government or a court would the banks be on the hook for the loans?
And as the banks I really mean the bondholders and owners, not the poor savers.”

If that happened, all lending in Canada would cease, and houses would crash to all-cash valuations. Which probably would be 5-10% of current prices (since, as Garth tells us routinely, the average new buyer only has an approximately 5-10% downpayment to buy the house). Do you really think the government would take that road?

The CMHC is basically a scheme to transfer a boatload of wealth to owners of Canadian bank shares. I say, load your portfolio up with TD, RY, CM, BMO, and BNS and sleep well at night!

——————————————————————-

If it went that far, I am sure that the same government that ushered in the reversal of the CMHC lender insurance would also implement a way for the homeowners to borrow directly from the state. Or maybe they would just nationalize the insolvent banks, and restructure home loans so people weren’t stuck in a perpetual debt-deflationary mode. So yeah, lending as we know it would stop, but lending in a different manner might begin shortly after. IMO, this issue will become more relevant in the upcoming years.

#46 JSS on 01.02.13 at 11:24 pm

Hi Garth, hearing about Vancouver and Toronto’s real estate is getting boring. You write about these cities ALL THE TIME.

Why don’t you write something about Alberta’s real estate market – specifically Calgary and Edmonton?

#47 Saskatoon-Living on 01.02.13 at 11:25 pm

S’toon is on Crack blog post is gonna be awesome Garth!!!

#48 claudius emperor on 01.02.13 at 11:25 pm

#39:

#20 claudius emperor — WTH has the government to do with the business of ‘insuring mortgages’, taking away the risks from the banks?

Maybe do some research on how well the financial system worked in the era before mortgage and deposit insurance?
————————-
You do you homework.

It did work very well for very long time.
There has been banking for a very long time with no deposit insurance. Deposit insurance is relatively new invention. It is accepted in most countries lately though.

Note that it gurantees the deposits but does not protect the bank. If the bank is poorly managed it will fail.
(can’t stress the importance!)

—————————————–

However mortage insurance by the governments in it’s North American form does not exists anywhere in the world! And never existed.

Why would one take the risk from a bank on himself? If this is some weird form of reinsurance let the private sector take of the ris and price it accordingly.

Free lunch with no risk but guranteed profits does not exist in the market driven economy!

#49 Book and Weblog – Authored by Garth Turner — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate « The Affluent Boomer™ on 01.02.13 at 11:29 pm

[...] via Book and Weblog – Authored by Garth Turner — Greater Fool – Authored by Garth Turner – The T… [...]

#50 claudius emperor on 01.02.13 at 11:30 pm

What is wrong with the all cash valuations for the houses? They are places to live after all, not ‘investment vehicles’
As historically has been the norm?

The banks won’t make easy guaranteed money…. This is the key to the tent….

#51 Hurly on 01.02.13 at 11:32 pm

#36 Jim Lahey on 01.02.13 at 10:53 pm
#54 Dr. WAYNE on 01.02.13 at 12:47 am
=========

“Really sorry and disappointed you didn’t get the FURST position … you may be the lucky one next time … keep trying, don’t give up, as I’m sure there are hordes wishing you all the best in your quest to stand out herein.”

That’s right Wayno. FURST is da man and a hell of a poet. He has stood out on this blog whilst all you have done is shown that you are a first class a$$hole. Why don’t you take your self appointed patrol of all first posters somewhere else cowboy.

Bravo subby!
Who else is tired of Dr. Wangs jealousy?

#52 Mississauga on 01.02.13 at 11:34 pm

All hail Garth the foreseer!

Just drove by the north van house – a dump but good lot size.

I’m ashamed since I’m still itching to buy an investment house in TO. Oh when will the market hit bottom?

Only the foreseer knows.

#53 Ken R on 01.02.13 at 11:39 pm

George Carlin once quipped, ” I have no stake in the outcome, this is all just entertainment to me.”

Damn, 2013 looks entertaining.

#54 From Mississauga with Love on 01.02.13 at 11:42 pm

I don’t get it. Prices were going down in the past few months in the neighbourhoods I was watching in Mississauga but after the last sale there, which mind-boggled me, it looks like prices are coming back.
I don’t get it.
I am starting to think this Spring is going to be no different than the previous ones.

#55 };-) aka Devil's Advocate on 01.02.13 at 11:44 pm

Of course many of that 14 months worth of homes for sale will be on the market for quite some time. “Apparent” inventory levels have never been higher. I say “apparent” because many of those homes are not offered for sale by sellers with any serious motivation to sell. They won’t sell unless they get their price and the price they want is WAY over market. They may be ‘on’ the market but they are not ‘in’ the market. So the discussion of MOI, in the current market dynamics, is of little consequence.

Want to see some interesting stats? Check out sales this year at Big White Ski Resort in Kelowna! Big increases – BIG. As many of you know recreational property sales shifts are a VERY interesting commentary on where the markets in general are headed. Check it out Blog Dawgs and draw your own conclusions.

#56 eviee1973 on 01.02.13 at 11:44 pm

Happy New Year from Calgary blog dogs
On a drive to a New Year’s party out of town a discussion was bought up on housing, we had both had houses at one time and now living in high rise rentals downtown. Basically how women get into a house they cannot afford, and try to rope in a single guy to help pay the expenses/mortgage because they are so over extended. Had met several woman since moving here who are in that situation. We both have older paid for econo box cars, and both bought new motorcycles last year.

#57 Retired Boomer - WI on 01.02.13 at 11:44 pm

Ok. The year-end-results are in.

The retired Boomer did well. The Index funds up. The 2 managed funds up. The REITS were up. The Bond fund was up but less so in 2012. Mix 78 equity & REIT 22% Bonds no gov all corp.

Took out my 4% for retirement, and switched what I could from my taxable accts to tax free paying the current tax (25%) before hitting the next tax bracket. (whew!)

So, start 2013 with more money than I had when I started 2012. That was before today. As the Smoking Man says, we’ll see if it sticks into next week. I have no doubt that investing before retirement IS the icing on the cake of retirement. Starting the earlier, the better. One never knows how long this little life might run, but it sure is more fun when you don’t have to worry about the price of a dam thing. All it took was 24 years of thinking ahead. Didn’t start til I was 37…stupid American…but happy now!

#58 John on 01.02.13 at 11:46 pm

Housing is one of the major sectors of the Canadian economy now. If this whole negative chain reaction starts why do you think stocks will not suffer? After all wouldn’t stocks go down as well as consumers stop spending?

#59 young & foolish on 01.02.13 at 11:47 pm

Ummmm, let’s see …..

1) You still have to pay to live somewhere (pay rent or pay the bank, or pay taxes and repair bills)

2) Economic growth forecasts are starting to look down
(people have used up as much credit as they can ….. and austerity measures have yet to kick in)
The stock market will begin to reflect that “low growth” future we are heading into.

3) People love RE, like they like Harleys …. and will
always want to “own” (unless we are about to witness a transformation of values in our society).

4) Most people are poor investors and will always follow the crowd (so, be a contrarian, IF you can)

5) The best RE is that which pays for itself.

Sigh! It’s not easy making economic decisions.

You do your name proud. — Garth

#60 Smoking Man on 01.02.13 at 11:48 pm

My point, hard to type since drinking from noon, for the above post. Bubble Heads are doomed. On this little blue marble hell of alot more people believe in flying corpses and sea parters than ufo,s. Hence bubbleheads see the ufo. The rest see God, gods people love real estate. Gartho don’t factor that in……

#61 };-) aka Devil's Advocate on 01.02.13 at 11:50 pm

#27 Intuitive Missus on 01.02.13 at 10:46 pm
December Housing Market Digest from Will Dunning.

Toronto market finally showing significant signs of turning down.

Your comment is so telling of you.

#62 Mark on 01.02.13 at 11:51 pm

After all wouldn’t stocks go down as well as consumers stop spending?

Take a look at the TSX60 index. Firms that are engaged in retail business only make up a very small handful of the listed companies, less than 10% of the index. Most retail in Canada is either done by small business, by US-based business, or by privately held operators in Canada. So no need to really worry much about the stock market.

If anything, the stock market is likely, as Garth implies, to be the beneficiary of an asset rotation away from investment in residential real estate, and towards productive businesses. The TSX60 constituents are obvious targets being Canada’s largest, most liquid, and safest blue chip companies typically.

#63 Canadian Watchdog on 01.02.13 at 11:53 pm

Meanwhile over in the bond market, prices came down, yields rose and billions went coursing out of fixed income into equities.

Equities will stay within a volatile trading range; as volume increases — commodities will outperform. Traders (including robots) will take advantage of the highs and lows from fiscal cliff rumors and weak earning headlines over the next two months. Use it wisely 

#64 not 1st on 01.02.13 at 11:53 pm

Garth, why no mention of the real news today that while the stock markets gyrated upwards a whole host of analysts from major financial institutions revised U.S. growth forecasts downward for the year slicing 0.5% off the GDP as a result of the fiscal deal.

Now Obama will have to give up some spending cuts when he goes to raise the debt ceiling in 2 months time. That will shave another quarter point off GDP. Your recovery theory will be DOA after that.

#65 Tyrell Pronghorn on 01.02.13 at 11:55 pm

#16 – further to the Times Colonist article, from the BC Assessment site, a video on You-Tube.

Assessment decline average %3-%5, cautions July 1st 2012 is point date for assessment, which does not reflect current valuations, which are likely lower and moving more so in the negative.

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

Places here have been consistently selling %10-%20 below assessment already. 50 shades of more things to come.

#66 Corban on 01.02.13 at 11:58 pm

Made a bunch of money today garth and blog dogs. Think I should reward myself with a beater 4×4 for Maclean this summer. Should I go for a domestic or a JDM import? Won’t be as ‘nice’ as your hummer but I won’t have to drive the same truck as a soccer mom. PS I ride a suzuki vstrom

#67 coastal on 01.02.13 at 11:59 pm

I like this line from an agent in the Victoria assessment price drop TC article :

“But one must be careful not to equate B.C. Assessment values with the actual value of your home … there can be a huge difference in many cases,”

That’s right, many sales have been going well under assessment in Victoria so the butt kicking is starting in grand fashion. Many an agent is trying his or her best to spin this in to a non-story but these assessment numbers were done as of last July and the sales numbers the past few months have been brutal in V-town. Wake up time for the laws of economics.

#68 Inglorious Investor on 01.03.13 at 12:00 am

#5 East Van on 01.02.13 at 9:55 pm
“Please read this article claiming the Canadian Housing Bubble has been engineered by the Harper cons:”

Read the piece (quickly). Draws some, shall we say, extreme conclusions, but not entirely without merit.

#69 basement dweller on 01.03.13 at 12:01 am

if bonds are going to take a tumble and the next buying opportunity is in february
should I move it to cash till the next buying opp?

#70 claudius emperor on 01.03.13 at 12:02 am

# 37, this is why I have some bonds from the big CA banks…

Does somebody know what cancer is?

This when the bloodthirsty parasite non productive cells occupy all the blood supply for an organ/or multiple organs so the normal cells can’t feed and dye. So the organ/organs fail.

There are several types of cancer, one that is slower (cancer cells are probably ‘smarter’ so they reproduce in some ‘controlled’ fashion giving the organism some more time to live and fight.

The other type of cancer is extremely aggressive, ‘stupid’ cancer cells reproduce in uncontrolled fashion so very quickly the organism dies along with the cancer cells ….

So the question is: are we (or the banks) at this point smart ‘cancer’ cells or primitive uncontrolled hungry cancer cells that would soon dye along with the patient…

What king of chemotherapy can save the patient?

#71 happy renter on 01.03.13 at 12:03 am

If you want to know about Calgary real estate ,check out google finance.Its booming with 56000 people coming to look for work.Edmonton also,lots of people moving there to find jobs.Its seems a lot of B.C. people are leaving for Alberta.I know 5 people in the last month.So buy Alberta rental properties,you can’t lose.

#72 Inglorious Investor on 01.03.13 at 12:04 am

#57 John on 01.02.13 at 11:46 pm
“[…] wouldn’t stocks go down as well as consumers stop spending?”

Silly John. Don’t you know stocks no longer need actual people to buy them?

#73 claudius emperor on 01.03.13 at 12:06 am

of course I meant Die not Dye (stupid spellchecker…)

#74 blase on 01.03.13 at 12:10 am

The linked article to the Calgary Herald has the ATB economist calling the Calgary housing market pretty affordable.

A 3-bedroom house costs 100% more in Calgary than in London, Ontario. London’s unemployment rate is the same as Toronto’s.

Economists need to find more practical forms of math. The one’s they use have no forward-looking outlooks. But, I presume that’s on purpose.

#75 claudius emperor on 01.03.13 at 12:11 am

The answer I think is that we (and the banks) are smart cancer cells so F will not be allowed to screew up more.

We might bring another surgeon if needed.

Sorry RE Agents and Brokers.

It seems no system falure after all.

#76 Paul on 01.03.13 at 12:14 am

#54 };-) aka Devil’s Advocate on 01.02.13 at 11:44 pm

Want to see some interesting stats? Check out sales this year at Big White Ski Resort in Kelowna! Big increases – BIG. As many of you know recreational property sales shifts are a VERY interesting commentary on where the markets in general are headed. Check it out Blog Dawgs and draw your own conclusions.

That’s an interesting way of looking at things DA. The first one I see…”Below sellers purchase price”

http://www.harrypettit.com/Big_White/British_Columbia/Condos/Big_White/Big_White/Agent/Listing_36054426.html

#77 };-) aka Devil's Advocate on 01.03.13 at 12:17 am

17 sales recorded in the Central Okanagan region today, January 02, 2013. There were only 29 in the whole first week of January last year.

#78 Paul on 01.03.13 at 12:20 am

DA, Are you getting it confused with season pass sales?

http://www.castanet.net/news/Business/82362/Snow-falls-sales-rise-at-Big-White

#79 Boomer21 on 01.03.13 at 12:21 am

I have no debt and am retired and use my credit card frequently each month. I always pay it off in full every month. I don’t get why my bank keeps offering to increase my credit limit. It is already $20K, why would I need $30K when I pay it off every month. Usually it is around $1k. Oh wait, maybe they are waiting for me to get a terminal illness diagnosis or dementia! Crafty aren’t they?

#80 Inglorious Investor on 01.03.13 at 12:36 am

The CAAMP report provided by Garth yesterday (thanks!) and authored by Good Will Dunning was quite a read.

It was loaded with very interesting data points and information. But these data points were largely disconnected from the author’s Cassandra-like conclusions. In the end, Dunning used facts to lend false legitimacy to what is ultimately a spin piece designed to scare the wits out of Canadians.

Basically, Dunning claims that if the gov does not reverse its latest mortgage rule changes, Canadian housing will collapse and the economy will implode. And you and your family will starve because you will not have a job, and the people will revolt and then Harper will have to initiate The Hunger Games Canada (hosted, no doubt, by Ben Mulroney).

Because it’s only just and proper that housing prices should double every ten years due to cheap credit and mortgage rules that would qualify a macaque monkey to buy a house, right? This he calls a “balanced market.”

So economics is a policy tool and economists like Dunning are just plain tools.

#81 Canadian Watchdog on 01.03.13 at 12:41 am

#68 basement dweller

Bonds will not tumble. The Bank of Canada will just up its bond buying program to keep a lid on yields.

#82 new canadian on 01.03.13 at 12:45 am

#40 Dr. WAYNE
There is a new, ground-breaking MRI machine developed. This one actually tells number of living cells in a particular body organ. They will pay big bucks for volunteers while development is still in progress.
Would you be in this? They are interested in checking out your brain since after reading your few posts, they are kinda sure what number should machine read.

#83 Just sayin' on 01.03.13 at 1:00 am

With respect to dawgs like Hangfire & The American, (when it comes to the extravagant pay of government workers), these guys have a serious point. However, their choice of language isn’t always the best and distracts from their message.

It is understandably infuriating to private-sector workers to have to subsidize the overly generous pay & benefits paid to government workers.

But what to do?

No one wants to lose government services, well, maybe we could do without our unelected senators.

The answer is to mandate a 20% salary & benefit reduction to all government workers with an exclusion for those earning the very least.

The message would be simple: if you don’t want to keep your government job at 80%, you are free to go look for a better one elsewhere.

If Canada continues on its present course of allowing ourselves to be hijacked by unionized nurses, teachers, civil service, cops, etc, with their insatiable and never-ending demands, we are on our way to becoming another Greece.

How many unionized nurses, teachers, civil service, cops, etc, would quit under these -20% conditions?

Not too many is my bet — albeit there would be much weeping and wailing and nashing of teeth.

But fair is fair. We cannot continue to indebt our children for the sake of a privileged few.

#84 Otto on 01.03.13 at 1:08 am

Wayne, do tell us a little about yourself. Were you abused as a child? It’s ok, you can tell us. Did your father take his belt to you a lot? You poor guy. It must have hurt terribly. Come on, get it out, you’ll feel better. It wasn’t your fault, no one should treat a child the way you were treated. You can move beyond your past and still live a normal life but there are a few things you must do.

#85 Tim on 01.03.13 at 1:12 am

Good thing for those fully invested, today the market spiked. Glad I wasn’t waiting on the sidelines for a drop…
Harper may not have engineered the housing bubble, but he has racked up the biggest deficit of any Prime Minister in the history of Canada. The only reason the economy isn’t worse off is because Paul Martin left it in good shape. Harper has also made drastic cuts to environmental protection, arts funding, CBC funding, and is trying to weasel through a trade deal with China that would give the Chinese investors the right to sue our government if any of our legislation impacts their ability to make a profit. Glad the puppet of big oil has our best interests at heart–not!

#86 Grim Reaper/Crypt Speculator on 01.03.13 at 1:23 am

That Dog on the floor appears to have a “Dr. Wayne”, which may go far towards a trifecta of ID-ing gender, brains and political party membership/tattoo.

#87 old phart on 01.03.13 at 1:25 am

I suspect the north Van house is being sold to settle an estate. The furniture etc is dated and the rest of the contents is probably the left overs that no one wants.

If this is indeed the case that would account for the price drop.

Nothing sadder then viewing an estate sale

#88 Grim Reaper/Crypt Speculator on 01.03.13 at 1:34 am

#5 East Van on 01.02.13 at 9:55 pm

Please read this article claiming the Canadian Housing Bubble has been engineered by the Harper cons:

http://www.counterpunch.org/2013/01/02/the-big-heist-in-the-great-white-north/

That web site causes blindness. — Garth

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

Yeah…. that and reading Dr Wankers posts will cause hairy palms too !

#89 Conrad on 01.03.13 at 1:40 am

OK a bit on Saskatoon, yeah, who cares all of 220,000 ppl all of them Pilsner drinkers who cares about toon town! What about Edmonton? All this oil sands “boom” and ppl moving here…

Yes I have heard of fracking and I am aware the Canadian Select Oil sells for a steep discount compare to West Texas and Brent and the Ab Gov’t is in the hole because of low Oil prices…

I also see house sitting for long time and others selling quick for nearly $300 a sq ft….

Mixed signals.

#90 Mithan on 01.03.13 at 1:44 am

To #1:

I live in sask too. Tell me what will happen this year here when oil drops to $60-70/barrel, china and India refuse the high potash prices and the reality that construction makes up almost all the new employment here and it starts to slow down?

Home sales are down about 25-30% from the same time last year, despite record low interest rates and “people moving here”. Rental vacancies are up a bit too, 1% from the .6% it was in Regina the last few years.

Wake up. The boom is at the peak. Reality will creep in here too, especially in 2014. Homes prices are going to take a kick in the ass, or do you harbour landing is really worth $350k for a town house or $600k+ for a sfh? If you do, go buy more then.

#91 Nostradamus Le Mad Vlad on 01.03.13 at 1:49 am

-
“. . . brought some interesting juxtapositions. Stock markets erupted, . . .” — Curious. If stocks surged across the board, what role does austerity play in the big game?

It’s quite obvious what is happening in Europe, but the question is WHY? WHO stands to benefit if austerity is imposed on the masses? WHO will order it, and under WHAT pretext? WHAT gains will be made, and by WHOM? No doubt someone will benefit from this (significantly).

The withdrawal of money (from the masses into the hands of a few) is looking a lot more realistic. Life may be sunshine and roses for now, but not for the masses, such as this as compared to this.

#52 Ken R — “Damn, 2013 looks entertaining.” — In more ways than one, apparently!
*
Swan Dive of 2013 economies, ‘tho the US economy is the only one mentioned; David Rockefeller and the looting of Iran; EUSSA, USSA and USSR; Nightmare on Fiscal Cliff II; Commodity Returns in 2012; Gold Positive outlook for 2013; Sputtering economy; Benefits Larger increases than wages; Moaning No matter how wealthy one is, some are never satisfied.
*
Hairy (from Garth’s old political blog) “Fossil Older Than Oxygen on Earth Found in Australia”; Move over Rover New Year’s hangovers for dogs; Don’t Look Down! Rooftopping; Wag The Human People with tails? Victorian Photoshop Don’t ask; Waltzing In The Snow Polar bears can dance? Vinegar or Tapeworms Diet fads? Russia Black Sea and Medit. naval drills; Texas – Spain New super hwy.? 6:13 clip Goes with earlier link re: Alaska getting colder; Spirituality = Mental Health Problems Big pharma is really pushing their agenda; 0:44 clip Asteroid near-miss in Feb.? Hillary “They drove away with a security detail and a man wearing a white coat and a stethoscope. She returned to the hospital about 15 minutes later, the Daily News reported. She had not been seen in public since December 7. “ Didn’t Obomba bring in John Kerry to replace her? Three Best non-GMO foods; Four Hour Eruption on the sun, and Tsunami Bomb; Asian Cities are much nicer; Speed King New Bentley convertible; 2:22:49 doc. Adolf Hitler — The greatest story never told.

#92 Dr. WAYNE on 01.03.13 at 1:51 am

#36 Jim Lahey on 01.02.13 at 10:53 pm

#54 Dr. WAYNE on 01.02.13 at 12:47 am

#50 Hurly on 01.02.13 at 11:32 pm

… all you [Dr. Wayne] have done is shown that you are a first class a$$hole.

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

Nice to be loved … x0x0

#93 Ronaldo on 01.03.13 at 2:30 am

#25 Kokuzi -

”The 47% reduction calculation seems a bit odd…
Isn’t a drop from $1.3 million to $899,000 closer to
being a bit more than a 30% drop?”

$899,000 x 147% =$1,321,540

If a $100,000 house drops 50% it must gain 100% to get back to its price before the 50% drop.

Ain’t math fun?

#94 vatodeth on 01.03.13 at 2:40 am

Does the Cabinet TV come with the house you listed?
http://www.realestatenorthshore.com/property-3320.php

The house is listed at just shy of a $1 million and they don’t even have a decent television… lol! I guess we know, where all the money’s going?

#95 Bryan Berndt on 01.03.13 at 3:13 am

31% drop on the over valued North Van home, not 47%. Still a big drop. How are average prices doing on Vancouver detached WestSide homes doing on average price? Last I checked looked like a 25%+ drop for November from peak of the spring 2012.

#96 cowpie on 01.03.13 at 3:24 am

GWAuak! Did I really just read this:

“No wonder there are starving realtors knowing there are MANY realtors serving this area.”

STARVING REALTORS??? Did I miss something or have Canadian realtors peed away all the cash they made off us during the last 10 years??? Did they buy too many McMansions? Bonds? PMs? WHERE DID IT ALL GO?

#97 shanks on 01.03.13 at 3:51 am

Vlad
The context of the Indian social security move is testing biometric banking on half a billion people at once. They have been moving on it for some time now, although not nearly as long as men have been raping. Best to get ride of them both it you ask me.

#98 Theskyisfalling on 01.03.13 at 4:16 am

The sky is falling the sky is falling, I guess you have figured by now even a broken clock is right twice a day, you babydoomers are so gross, try some viagra loser!

That comment says more about you, son, than it does about me. — Garth

#99 Buy? Curious? on 01.03.13 at 4:55 am

Hey Garth, I’ve got a soon-to-be, not-so-common story that I just found oot aboot last night. This guy that I used to be friends with, had bought a small 2 bedroom place in the beeches (Vic Park and Kingston Rd), 10 yrs ago. It was a modest place but he was married with two young kids. The Mrs was driving him batshit crazy (Beaches Stepford Wife wannabe) wanting a bigger house closer to the action (Woodbine and Queen St E.). He caved bought a bigger place a few years later, but only a few more streets westward. Now, unfortunately, they’re getting divorced and will be putting the house up for sale this coming Monday. He had been shovelling everything he had into that house along with the equity he had built up in his first house. By doing some quick calculations on the back of a napkin, he’ll have to get a few thousand over what he paid for it just to cover the outstanding mortgage and closing costs. He has no savings because he was trying to keep up with the mortgage payments and just recently, had to pay a retainer to a family lawyer. Like you said, “So. Screwed” He’s 40, fat, bald and works as delivery driver with a bad back. His only chance is if his parents kick the bucket in the next 6 months. The funny/sad thing about this (depending on how you look at it) is that if he had started reading this blog back in 2008, he could have sold his house for a nice profit, invested it in things that you suggested, rented a place where his wife wanted, and live a happy life. Now? YIKES! I wonder if he’ll start drinking.

So take heed, my fellow Canadians. Don’t be too dismissive of my main man, Garth Turner.

http://www.youtube.com/watch?v=PDubUQStXb0

#100 Mic D'angelo on 01.03.13 at 6:53 am

It is funny how everyone talks about bonds when interest rates are at very low level. The so called analysts and experts did not talk about buying bonds when yields/ interest rates were 9.68% in 1994 or 8.20% in 1996, 6.00% in 1997 ,6.70% in 2000, 5.60% in 2004, 5.00% in 2007, 5.35% in 2009, 4.70% in 2010 etc. Theses periods were the time to buy individual bonds not bond funds, bond ETF’s. Bonds are safe when held to maturity. This is why they have different terms with typically 1-30 year maturity dates . If you use bonds as trading vehicles like equities you will get burned, crushed, devastated over the medium to long term. Buy individual bonds with the maturity dates you know you will need the money and not bond funds etc. depending on a manager or company to buy bonds for you based on their investment objective and not yours.

#101 monopoly money on 01.03.13 at 6:55 am

I think it was rather predicatable what was going to happen after the so called fiscal cliff was averted. Everything went up with the exception of bonds and the US dollar, unless you price it yen, the yen is falling against all currencies, because the japanese just voted in a man who promises countless money printing inflationary policy.

I dont know what makes Garth think that the stock market in the US is going to be strong this year? Especially when the government is broke, and the Fed is committing to more than a $1 trillion annual expansion in its balance sheet. Most forecasters believe that the Fed will have $4 trillion worth of assets on its books by the end of 2013, and perhaps more than $5 trillion by the end of 2014.

Without the Fed’s buying, it would be impossible for the Treasury to finances its debts at rates it can afford. That is precisely why the Fed has chosen to monetize the debt.

If the Fed actually raised rates , the result could be a much greater financial crisis than the one we lived through in 2008. The bond bubble would burst, interest rates and unemployment would soar, housing prices would collapse, banks would fail, borrowers would default, budget deficits would swell, and there would be no way to finance another round of bailouts for anyone, including the Federal Government itself.

#102 Intuitive Missus on 01.03.13 at 6:57 am

Garth, I hear your echo at the G&M :)

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/canadas-housing-hangover-real-estate-boom-meet-dot-com-crash/article6867321/

#103 Ralph Cramdown on 01.03.13 at 7:20 am

#83 Just sayin’ — [...] mandate a 20% salary & benefit reduction to all government workers with an exclusion for those earning the very least. The message would be simple: if you don’t want to keep your government job at 80%, you are free to go look for a better one elsewhere.

Breathtaking! So in a matter of months you’d succeed in getting rid of all the civil servants who aren’t overpaid, the most productive, skilled and experienced. And you’d leave behind the deadwood, the lifers and the overpaid in an environment optimized for the Peter Principle. Fabulous! Got a name for this idea of yours? I’d suggest the Dr. Laurence J. Peter Civil Service Neutron Bomb.

#104 Ralph Cramdown on 01.03.13 at 7:43 am

#97 cowpie — Did I miss something or have Canadian realtors peed away all the cash they made off us during the last 10 years??? Did they buy too many McMansions? Bonds? PMs? WHERE DID IT ALL GO?

Expecting a pro whose customer is almost always Joe Howmuchamonth to be focused on asset accumulation rather than cash flow might be expecting a bit too much. From what I’ve seen, the typical real estate agent has a visceral fear of the stock market, but knows they aren’t making any more land, gets first crack at new listings, saves 50% on commission and thinks himself an expert judge of market values. So he tends to be all in. Oh, and he’s paying for the dividends on my BRE.

#105 Kokuzi on 01.03.13 at 7:56 am

#94 Ronaldo

Thanks for the math lesson!
I was thinking ’47% reduction’ had something to do with $1.3 million minus 47%… Now I remember why I hated math in high school.

#106 Kam on 01.03.13 at 8:25 am

#83Just sayin’
Hangfire , The American………….Tom,Dick and Harry
Thank Public servants for cleaning snows in the streets
Thank public servants to protect you
Thank public servants to teach your kids
Thank public servants to provide you EI cheques on time when you get fired by your Private Employer
Thank public servants for public transportation
List is endless…and to organize all the work you need admin staff in offices too.

Instead of demanding fair wages from Private Sector employers you guys are getting jealous about public servants salaries.Do not become crabs in a bucket.

#107 Dr. WAYNE on 01.03.13 at 9:00 am

#82 new canadian on 01.03.13 at 12:45 am

#40 Dr. WAYNE There is a new, ground-breaking MRI machine developed…

#84 Otto on 01.03.13 at 1:08 am

Wayne, do tell us…

#86 Grim Reaper/Crypt Speculator on 01.03.13 at 1:23 am

That Dog on the floor appears…

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

I must say I am truly disappointed in the quality of insults leveled at me … they are genuinely inferior, hopelessly elementary, and lacking in unbridled passion. Please devote extra brain cells to this task … your vehemence should do you proud, rather that label you, pardon the expression, a piss poor writer short on intellect.

#108 TurnerNation on 01.03.13 at 9:18 am

#15 Honus Wagner

Investor’s Busines Daily newspaper (US based) interviewed for a few top picks from fund managers for 2013. One said go with the S&P and it dividends, another suggested a preferred share ETF. But he pointed out its higher modified duration of 4.18 (yield % sensitivity to a one-point interest rate change). If not heard of, seek a professional’s opinion. I think you know of one such bond guy (T&T).

#109 Ralph Cramdown on 01.03.13 at 9:18 am

#108 Dr. WAYNE — I am truly disappointed in the quality of insults leveled at me … they are genuinely inferior, hopelessly elementary [...]

You’re only going to get as good as you give. In the last month or two, you’ve done the most to lower the tone of conversation on this board, against some fairly stiff competition. ( * )

#110 TurnerNation on 01.03.13 at 9:26 am

For Saskatoon be sure and mention this mid-town manse. 300-400k for a one bedroom apartment?

Somehwere a mine shaft is missing its canary.

http://www.thevestel.ca/
http://www.thevestel.ca/pricing.pdf

#111 EIT on 01.03.13 at 9:43 am

The Canadian Government shouldn’t be in the insurance business. These types of strategies makes failures systemic instead of localized. Besides, insuring deposits and mortgages benefits the banks and not the people… o and bank runs are good! The Free Market is not a concept that one can put in place, it simply exists (example: murder, erotic asphyxiation). Government only gets in the way. In fact, government’s only power is to remove freedoms. I really don’t understand how people don’t understand the ultimate democratic nature of a free market. It used to be that if you needed something done, then you went around to find some fellow HU-MANS, and if a problem arose, recourse would be provided by gov. Now everybody skips straight to gov. for all their needs and desires.

DO NOT LOOK TO THE LAW FOR PHILANTHROPY.

If you think that people are so selfish and evil, that only government (filled with these selfish and evil people) can provide the charity required by the needy, then go Flaherty yourself.

#112 DA forgot to mention all the foreclosures in Big White on 01.03.13 at 10:09 am

@#54 } -) aka Devil’s Advocate on 01.02.13 at 11:44 pm

Now don’t forget to mention all the foreclosures at Big White too. Remember to be ethical and honest, I know its difficult for you, but you should make it your New Years resolution.

Here’s one in foreclosure dropped from 1.4 million to $899,000 and still no buyers.

http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=12614441&PidKey=1916482820&Mode=5

There are many, many more in Big White, very bad investment at this time.

#113 NRI13 on 01.03.13 at 10:12 am

Garth and: Really appreciate and value your insight. I have a question for you (and, fellow blogdogs) who care to respond.

In light of bond funds prices under pressure, would you still recommend 40% allocation to fixed income considering bond prices to an investor (i.e me) rebalancing his portfolio on annual basis? Thank you to you and anyone else who may respond to this question.

A balanced portfolio with 40% fixed does not mean 40% bonds. At most that would be 20% bonds and the rest a preferred mixture. Of the bonds there are government, corporate, real return and high-yield securities, with various features and durations. Some are priced to buy now, some still too expensive. — Garth

#114 Franke le Skank on 01.03.13 at 10:14 am

#55 };-) aka Devil’s Advocate on 01.02.13 at 11:44 pm
Did you just admit that most sellers prices are way over the market?

#115 Jim Lahey on 01.03.13 at 10:16 am

#40 Furst

Happy New Year to you as well Furst! 2013 promises to be epic in the park and remember you are an honorary member so please do join us for one of our “bashes for the ages”.

#116 Dr. WAYNE on 01.03.13 at 10:28 am

110 Ralph Cramdown on 01.03.13 at 9:18 am

… you’ve done the most to lower the tone …

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

You’ve got to be kidding … :-) …

#117 The American on 01.03.13 at 10:30 am

I’m not quite sure why a few of you out there are associating me with any kind of commentary toward public servants. I’ve never posted anything concerning public/government employees. You may want to re-read whatever post you are referring to and check the handle.

#118 Dr. WAYNE on 01.03.13 at 10:30 am

On Global last evening … some poor Vancouver resident had his tax assessment go up from $36 million to $39 million. Life’s a bitch isn’t it?

#119 BIGLEAFSFAN on 01.03.13 at 10:43 am

4507 Cedarcrest Avenue, Canyon Heights, North Vancouver $899,000
only overvalued by about $800,000 . WOW. Are we in big trouble. If you buy this property for 50% of list it should only take you 75 years to not be underwater. That is how you build wealth alright.

#120 Luc on 01.03.13 at 10:54 am

Where is all my money going ?

“Another $100 will disappear from paycheques as employment insurance and Canada Pension Plan deductions rise. EI premiums are rising $51.50 to $891.12 for employees making $47,400. CPP premiums jump $49.50 to $2,356.20 for workers earning at least $51,100. Employers will also pay more into the system for both.”

Read more: http://www.ctvnews.ca/business/canadians-to-be-dinged-by-more-taxes-fees-in-2013-1.1098490#ixzz2GvN3KqNf

#121 NRI13 on 01.03.13 at 10:59 am

Garth: Appreciate your response. I was looking at allocating my 40% as per the following: Preferred Shares ETF – 20%, Real Rate Return Bonds ETF – 10% and Government issued bonds ETF – 10%. Unsure about investing in Real Rate Bonds & Government issued bonds ETF in this current environment. Thank you.

#122 DA why don't you mention all the foreclosures in Kelowna too! on 01.03.13 at 11:01 am

@#54 } -) aka Devil’s Advocate on 01.02.13 at 11:44 pm

Here’s a just a few DA just to keep you honest:

This one I think has dropped from $4 million to $1.79 million – huge price drop for a healthy real estate sector

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=11826053&PidKey=323174401

Here’s another foreclosure over a million, that just gets de-listed, then re-listed.

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=12545722&PidKey=1360712143

Here’s another foreclosure over a million:

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=12346167&PidKey=78808009

Yet another one over a million:

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=12354047&PidKey=1367387625

Here’s another foreclosure over a million:

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=11838882&PidKey=-1656490020

… and yet another foreclosure for over a million WOW!

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=12314718&PidKey=-2117689806

And here’s a foreclosure for that was priced over a million that has dropped to just under a million, its been sitting in inventory for quite some time.

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=10887954&PidKey=331037329

I could go on and on, but DA should be telling us this info, not me I’m just looking at the listings. He / She has all the data.

Here’s a challenge for you DA since you’re telling us how healthy the Kelowna real estate market is, why don’t you also tell us the total number of million dollar houses that have fallen into foreclosure from the time they were first listed. Say within the last year to keep the number manageable …. remember to be honest and ethical its part of your New Years resolutions.

#123 DA why don't you mention all the foreclosures in Kelowna too! on 01.03.13 at 11:07 am

DA should mention that the one below dropped from 1.8 million to a million and has been in inventory forever!

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=12314718&PidKey=-2117689806

Is this a sign of a healthy real estate market in Kelowna …. I say NOT!:

#124 Rich Renter on 01.03.13 at 11:17 am

Well Calgary is taking off once more avg house prices +7%, vacancy rate almost 1% and record migration.
Too bad the boat left the harbour months ago.

#125 Gypsy Kid on 01.03.13 at 11:18 am

#85 Tim.
Like I posted before, we are wwaaayyy too complacent as a nation to what the Harper Cons are/were doing to this country. They kept us “drugged” with cheap credit because they were taking what was best of Canada apart, and selling it to foreigners.
Garth, do something!!!

#126 };-) aka Devil's Advocate on 01.03.13 at 11:28 am

#115 Franke le Skank on 01.03.13 at 10:14 am

#55 };-) aka Devil’s Advocate on 01.02.13 at 11:44 pm

Did you just admit that most sellers prices are way over the market?</

I did, but it was more an informative caution than admission.

#127 };-) aka Devil's Advocate on 01.03.13 at 11:40 am

#76 Paul on 01.03.13 at 12:14 am

and

#113 DA forgot to mention all the foreclosures in Big White on 01.03.13 at 10:09 am

Why don’t you boys get your heads out of your assess and start looking at what’s happening instead of what happened.

#128 syfon on 01.03.13 at 11:44 am

Good Dr. Wayne
Can you stick to relevent information for rest of us not involved in Wolf Pack to enjoy it.

#129 Form Man on 01.03.13 at 11:48 am

#129 DA

gosh DA, you seem to be getting cranky again.
BC assessments out for 2013. Kelowna down again…….

#130 Realtors in an all out PANIC! on 01.03.13 at 11:49 am

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/canadas-housing-hangover-real-estate-boom-meet-dot-com-crash/article6867321/

Canada is in a house bubble PONZI scheme NEVER before in Canadian and NORTH AMERICAN history as Canada’s housing bubble makes the US housing bubble look small. Canadians are in MORE DEBT then the Americans were when the US housing bubble EXPLODED like the ponzi scheme it was. Realtors , mortgage brokers , bankers all know Canada’s housing bubble is beyond a MONSTER bubble that no one with a brain would touch. The masses are slowto learn but even they are starting to figure it out. It’s going to be a NASTY crash realtors , a NASTY crash!

#131 };-) aka Devil's Advocate on 01.03.13 at 11:51 am

#125 DA why don’t you mention all the foreclosures in Kelowna too! on 01.03.13 at 11:07 am

Asking prices mean squat. Foreclosures are today’s dealing with ineptitudes of the past.

The carnage that ensues due to the consequence of the actions of Greater Fools should be nothing more than a lesson learned at their expense others should take great heed of.

Make no mistake things are not much different, at the core, than it has been since the dawn of time. It’s survival of the fittest out there. If you insist on being an idiot you will fail epically a better specimen will eat you up and leave what’s left of your financial carcass for the vultures to feed upon.

#132 skeptical on 01.03.13 at 11:53 am

#102 monopoly money on 01.03.13 at 6:55 am

I dont know what makes Garth think that the stock market in the US is going to be strong this year?
____________________________________________

he’s getting people into stocks the moment they should be exiting. the US Stock markets are topping, just like in 2000 and 2007. there’s nothing the FED and Bernanke can do. you’ll see markets enter another Bear phase, that will last 2-4 years, and loose 25-40% of their value. it will all be clear by spring.

Actually I do not advocate buying stocks. As for your fears, are they based on facts or vibrating little hairs somewhere on your body? — Garth

#133 Holy Crap Where's the Tylenol on 01.03.13 at 11:57 am

Just came back from the Gulf Coast of Florida where I must say I seriously am considering purchasing a home in New Port Richey for $255,000 USD that backs onto the inter-coastal with a dock. 2750 square feet built in 1990 complete with three car garage, ……. too many options to mention. After reading the blog and perusing that piece O crap in North Vancouver I had to go an get a Tylenol. What we put up with here for home prices is astounding. I know it is location, location, location but come on I compared the two properties and would much rather invest in this bargain in Florida than spend cash back home. Sometimes I believe we need a housing crash just to put us back in check with reality. Wow is Canada over inflated. I have personally viewed properties in Toronto and what you get for your money is crap. It is always a fixer upper that requires the property brothers to come in just to make it livable. On top of that getting around the city is not getting any easier. Population has increased without any new roads, infrastructure or public transit systems. Just the same old crap more taxes less service. Why do we pay so much for this crap? I would surmise we are all just sheeple.

#134 Intuitive Missus on 01.03.13 at 11:57 am

#61 – DA. It was bound to happen. Just a matter of time.

Have lived in the GTA for 34 years. Have bought and sold 3 houses. Always worked with top notch agents who brought quality buyers through. Never had a house on the market longer than 3 weeks. The last two were sold to the first people that walked through. And virtually at full (original) list. When I’m ready to sell – I’m ready to sell. No games here.

Have never seen the prices skyrocket like they have in the past 10 years. Sold our last house in June 2011 – for double our purchase price nine years earlier – knowing that prices are not sustainable at that level and will come down. One of my neighbours put his house on the market Spring 2012. Listed high, reduced twice. Just took it off before Christmas. It was priced nearly 20% over my sell only ten months prior. And he’s a RE agent. Guaranteed it will be back on the market in the next sixty days. At probably 15% less than his original ask Spring 2011. And that will be too high in this years’ market.

Tsk. Tsk. Tsk. Really makes you wonder.

Only thing holding up the market is the cheap credit and the gullible people. All the youngsters – and even some of the oldsters apparently – are in debt up to their eyeballs. You know it.

Currently renting in a terrific location and loving the freedom it brings. And the liquidity. Don’t need the money to fund my retirement. Have looked after that too. Just thought we’d take our money off the table before the legs fall off.

The only money I have in RE these days is in the Caribbean. It was a very good buy in a great location and I’ve got it rented to a lovely retired couple from the UK until we go in March. This year, we’ll be making three trips there to unwind and enjoy. When I’m not there it will be rented and earning its’ keep.

See, I do like sensible RE after all.

#135 IM in C on 01.03.13 at 11:59 am

@79 boomer 21
You wrote:
I have no debt and am retired and use my credit card frequently each month. I always pay it off in full every month. I don’t get why my bank keeps offering to increase my credit limit.

The reason why they keep moffering to raise your credit limit? because statistics show that eventually ‘you’ will start carrying a balance. It’s like the manager at a Vegas cassino. He constantly ‘comps’ regular nickle and dime gamblers with free room and food because he knows that eventually, many of them will turn into high rollers. All he has to do is keep them at the table. The banks know that all they have to do is keep you using your credit card,and eventually you will be carrying a balance, and that’s how they make their money.

#136 robert on 01.03.13 at 12:03 pm

The entire subject of appraisal values is being overlooked. Banks are calling for appraisals on 90% of mortgage applications and it is proving to be a stumbling block as these appraisals are coming in much lower than expected. The appraisers are looking at assessed values along with recent transactions and from what i am told they are being ultra conservative. I have friends that recently bought a home or tried to buy a home is more like it. Purchase price was $348,000 and they planned on 20% down to avoid CMHC fees. They were approved for a mortgage with a 10 year term at 3.99%. All was going well until the appraised value came in at $298,000. The assessed value was $328,000. The bank asked for another appraisal and it came in at $301,000. Friends walked were very upset but told them that this appraiser saved them from making a big mistake. He is now an avid reader of this site and has joined the ranks of am able to buy but have chosen to wait crowd.

#137 The Prophet Elijah on 01.03.13 at 12:19 pm

#126 Rich Renter on 01.03.13 at 11:17 am Well Calgary is taking off once more avg house prices +7%, vacancy rate almost 1% and record migration.
Too bad the boat left the harbour months ago.
———————————————————-
Source? I think your name gave it all away.
3 billion deficit in Alberta with oil at $90, how do you think this is going to end.

#138 Dupcheck on 01.03.13 at 12:25 pm

@#107 Kam

You sound like an Union Rep that has passed its expiry date. Public sector is out of touch from reality. Public sector employees are not entitled to raises every year when private sector makes less and less every year. We pay the public sector employees with our tax money. If our quality of life drops why should the public sector keep the same quality of life as they are used too? Public sector needs a reality check and a good reform to shake down some of you boomer desk warmers that still type with two fingers and are waiting for big retirements. Keep complaining about your 6 figure salaries while much better trained and up to date youth are wasting their 20-s and 30-s underpaid in dead end jobs. Times have changed. Think again before you write!

#139 DA why don't you mention all the foreclosures in Kelowna too! on 01.03.13 at 12:25 pm

@#133 };-) aka Devil’s Advocate on 01.03.13 at 11:51 am

So DA are you going to take me up on my challenge…or just be silly and cranky.

Here’s the challenge in case you forgot:

“Here’s a challenge for you DA since you’re telling us how healthy the Kelowna real estate market is, why don’t you also tell us the total number of million dollar houses that have fallen into foreclosure from the time they were first listed. Say within the last year to keep the number manageable …. remember to be honest and ethical its part of your New Years resolutions.”

You know DA we’re starting to hold you to higher standards … so far your not living up to your New Years resolution…but there is time for you to recover. I’m sure you can do it.

#140 Form Man on 01.03.13 at 12:28 pm

#133 DA

one moment you are telling us Kelowna’s housing market is all sunshine and ponies…….the next moment you are telling us it is ‘carnage’………seems you are as confused as ever……..

#141 IM in C on 01.03.13 at 12:29 pm

http://money.cnn.com/2012/12/26/real_estate/bank-foreclosure/index.html?source=Patrick.net

Why banks are not foreclosing, and why there is a shadow inventory in the US , and to a lesser extent, here in Canada.

#142 Franke le Skank on 01.03.13 at 12:48 pm

#133 };-) aka Devil’s Advocate on 01.03.13 at 11:51 am
Seriously, what are you talking about? Of course foreclosures are today’s dealings with ineptitudes of the past, thanks for the insight CAPTAIN OBVIOUS. What do you think people have been saying on this blog? The coming RE meltdown, crash, soft landing, downturn or whatever you want to call it will occur due to a snowball effect of events that happened in the past. All of these events have been clearly stated numerous times on this blog.

#143 Just sayin' on 01.03.13 at 12:50 pm

#104 Ralph Cramdown on 01.03.13 at 7:20 am//
#83 Just sayin’ — [...] mandate a 20% salary & benefit reduction to all government workers with an exclusion for those earning the very least. //

Silly Ralph.

No govt worker will ever quit, even with a 20% cut. And if a few do, big deal. Give someone else a chance, the govt needs some fresh thinking.

We can’t continue this deficit spending.

65% of govt spending is on sals/bennies.

Run the math on all provincial budgets and the federal budget, ie, reduce sals/bennies by even 15%, perhaps 20% is high.

What do you get? Suddenly the budgets are all balanced and we will have eliminated deficit spending?

What’s the downside? Not much, as far as I can see.

#144 Paul on 01.03.13 at 12:53 pm

#129 };-) aka Devil’s Advocate on 01.03.13 at 11:40 am
#76 Paul on 01.03.13 at 12:14 am

and

#113 DA forgot to mention all the foreclosures in Big White on 01.03.13 at 10:09 am

Why don’t you boys get your heads out of your assess and start looking at what’s happening instead of what happened.

My post shows what IS happening DA. People are listing lower then what they paid. Correct?

#145 hangfire on 01.03.13 at 12:56 pm

Kam #107….I can easily replace every civil servant within a week at half the current wage with eager contract workers from overseas…no citizenship…no pensions.

You say that I should thank the civic servant for the services? Are you suggesting that the unions are paying for snow removal out of the 4.5 billion unaccounted for dollars they throw at political advertising to maintain the staus quo?

I think you protest out of a sense of entitlement.

“It brought home the power of what psychologist Jonathan Haidt calls “the righteous mind” — the righteous certainty that those who see things differently are wrong, while being completely blind to our own biases.

My colourful language related to the civic servant crisis in this country is nothing compared to the cursing indignation of the unionized elite when it is suggested that we drag a few pigs out of the trough for the sake of better services, schools , hospitals and tax reduction.

#146 Realitybytes on 01.03.13 at 1:11 pm

I don’t think the mortgage repayment strategy is a simple to write off as you make it out to be. Not when you are talking about a 20+ year mortgage and interest rates set to start rising (as you predict).

Attacking principal now could pay much bigger returns in the coming years when rates return to historical norms.

And if its a long term residence, then I don’t think there is enough respect given to the benefits of being mortgage free sooner.

But for part time landlords and specers, you’re no doubt right.

#147 Fiscal Cliff on 01.03.13 at 1:19 pm

#106 Kokuzi on 01.03.13 at 7:56 am

#94 Ronaldo

Thanks for the math lesson!
I was thinking ’47% reduction’ had something to do with $1.3 million minus 47%… Now I remember why I hated math in high school.

————————

‘A North Van house originally listed at $1.3 million, now ‘on sale’ for just $899,000 – a 47% reduction’

Kokuzi, your were right. The key word is ‘reduction’.

$1,300,000 x 69.154% = $899,002 (30.846% price decrease from $1,3000,000)

$899,000 x 147% = $1,321,540 (47% price increase from $899,000)

#148 Canadian Watchdog on 01.03.13 at 1:47 pm

A reminder what Moody’s said yesterday.

For US To Maintain AAA, Need to Further Reduce Deficit Levels

#149 claudius emperor on 01.03.13 at 1:56 pm

How much is a meaningful correction for GTA? Take CHMC out of the equation and see how much the banks are willing to lend at their own risk.
In 2009 with CHMC still ‘insuring’ there was 20 percentage drop in just few months before F ‘changed the rules’.

My guess is fair are market prices of about 30-40 % of the current valuations.

This might look ridiculous but we will get there one way or another.

If the government wants to provide affordable housing they could allocate land, build satellite cities and rapid rail transit (high speed trains) as in London, Tokyo, etc.
A modern house could be worth 250-300 k in GTA.

Instead we have crumbling infrastructure, horrible traffic, crappy ultra-small new condos with high maintenance fees… Cheaper by the dozen… And the mother of all housing bubbles.

You can’t make paint with fart.

#150 David B on 01.03.13 at 2:06 pm

Say, did you see the latest bank survey out this week? Paying off debt – especially historically cheap mortgage debt – is now the main financial goal of people. Investing and retirement planning (although 72% of people have no pension) isn’t even among the top three priorities for Canadians.

So. Screwed.

Not Really Garth, I heard report on my beloved CBC, then I thought …. yup most are now resolved to work from cradle to grave … strangely I know many who could retire but are scared to death they will die if they retire …. Whata call that an axey …. ?

Happy New Year one and all an plse remember the more things change the more they remain the same.

#151 Telecon on 01.03.13 at 2:07 pm

All these people dreaming of a crash in oil prices which will simultaneously lead to a crash in RE prices in Alberta & Sask are dreaming. Oil prices will continue to rise, people will flock to the prairies but RE prices will still fall. There is no direct correlation between oil and RE prices. Just take a look at Texas.

#152 CrowdedElevatorfartz on 01.03.13 at 2:10 pm

@ #107 Kam
Hmmm where do I start?
1.Thank public servants for plowing the snow…. ahahahahahahahahahaa. Actually in most jurisdictions its subcontracted to the private sector. Cheaper.
2.Thank public servants to protect you…
Im sure Mrs Dyjekanski thanks the $6,000,000 out of Court settlement she recieved from the RCMP that tasered her son to death and then lied about it under oath. Oh, and crime is dropping….everywhere.
3. Thank public servants to teach your kids…another job that is being taken over by the private sector . More and more parents are pulling their kids out of the public school system “machine” to get a more individualized education. And since more and canadians are choosing a single,childless lifestyle. the “children” arguement is becoming moot.
4.Thank public servants for your EI cheque… WTF? Ive been working at various jobs for 33 years and used the U.I. system once. A demeaning, frustrating exercise in futility run by arrogant, lazy “I have a job for life” slugs that couldnt give a rats arse about John Q Public. Oh, FYI, the private sector has developed an amazing new system called “direct deposit”……. no more cheques needlessly passed from one useless govt drone to another…..
5. Thank public servants for public transportation…. Apparently you dont read the newspaper. Public private partnerships(P3′s) are all the rage these days… so once again the private sector can do THAT job too. Cheaper.

The golden days of public servants working for slightly less than the private sector with a garanteed pension are done. The days of public servants that recieve higher than the private sector wages AND generous pensions constantly whining and screaming for “more more more” are now upon us.
I, for one, dont like paying even more taxes for a service(s) that can be provided by the private sector cheaper, faster and with and actual smile on the vendors face.
The taxpayer cupboard ( 70% of Canadians that dont work for govt) is bare.
Your rekoning is coming…. we can see it.
Why cant you?

#153 Edward on 01.03.13 at 2:16 pm

#83 – Just Sayin’: Why is it in good economic times people make fun of civil servants’ salaries? ..Yet in downturns the same people complain about their high wages and cushy pensions. (You are aware that people pay into their pensions over the entire course of their careers, right? Maybe you should be saving the same amount to give yourself some retirement prospect?)

#154 Holy Crap Where's the Tylenol on 01.03.13 at 2:35 pm

I believe all of Canadian real estate industry needs the Ludovico technique. Calling Dr. Brodsky….It involves forcing a patient to watch, through the use of specula to hold the eyes open, showing images of listings of homes that can not sell for the amount they have listed them for long periods of time, while under the effect of a nausea-inducing drug. The aim of the therapy is to make the patient experience severe nausea when experiencing or even thinking about telling us the market is going well, thus attempting to solve societal crime!

#155 Westernman on 01.03.13 at 2:36 pm

Just sayin’ @ # 83,
Watch that seething vitriol, don’t you know Canada Neo-Royalty ( Civil “Servants” ) are sacred?…

#156 Holy Crap Where's the Tylenol on 01.03.13 at 2:51 pm

In case no one knows the Ludovico technique, here it is.

https://www.youtube.com/watch?v=fuohJDyYnlE

#157 Reasonfirst on 01.03.13 at 2:56 pm

#55 };-) aka Devil’s Advocate “I say “apparent” because many of those homes are not offered for sale by sellers with any serious motivation to sell.”

That can be true in any type of market dynamics. In a hot market there are those sellers with no real intention to sell but hoping they might hit a jackpot. Your statement is therefore meaningless.

#158 Stoopid Idiot on 01.03.13 at 2:57 pm

Just topped up this years contributions to my TFSA…. Spent the whole amount on Franco Nevada A WT’s. Maturing June 16th 2017 …. Lets see how that works out.

Stoopid’s Wife Say’s

The paragraph from the blog:

“Meanwhile over in the bond market, prices came down, yields rose and billions went coursing out of fixed income into equities. Say, didn’t I also forecast that? You bet, and this is just the start – which means long-term mortgage rates will be rising this year. So, I hope you locked up when I told you last autumn, or have started negotiations for a blend-and-extend ”

What I know:

1)Dec 17 -2012 1 and 2 yr rates decreased by 10 bps 1 yr at 3.% 2 y at 3.04%
Along with this discounts increased for 4 yr and 10 yr term for a rate of 3.99%
5 yr closed term still can get 3.19%.
2) I believe it was Flathery, who made a statement recently, that we may see higher rates in the near future. ( politician speak).
3) there is still a lot of transition happening in the Banking industry, refer to link .http://www.bankofcanada.ca/2012/11/speeches/some-current-issues-financial-reform/
Summary:
I think we will see a increase in rates around the 2nd half of the year. Reasons: ( move many out of floating rate mortgages/ encourage savings / debt reduction (mainly floating).

Why:
Tightening lending policies keeps higher risk from entering market. Tighter lending policies, affects market, and higher inventory coupled with longer listings tend to lower values, new homes on market coming on at lower values. Buyers are nervous, minimum down still 5%, however maximum amortization at 25 years, which makes payments higher.

Example: 400M @ 3.19% 25 yr amort = 1932.20 monthly.
1723.10 at 30 yr and 1577.38 at 35 years. ( we had 35 yrs until early spring 2012. and still have 30 yr for conventional financing( 20% down)
Along with this clients have to add municipal taxes/heat/condo fee. This calculation can not exceed 30-32% of gross earnings.

#93 Dr. Wayne

Nice to be loved … x0x0

You don’t know the half of it, last night the Crazy Women screams out …. No, in my Dr. Wayne

http://www.urbandictionary.com/define.php?term=assclown

#3.

Fracking? You need to read Stoopid… pardon me, Stupid To The Last Drop

http://www.amazon.com/Stupid-Last-Drop-Environmental-Armageddon/dp/0676979149

The American:

You are so right …. Screw them all

#159 Old Man on 01.03.13 at 3:00 pm

#135 Intuitive Missus – There was a time in TO when prices doubled within 9 months during the early 1970′s, as knew a lawyer who bought 50; a painting contractor bought 10 in Don Mills, and I bought a modest 4 in Mississauga. All construction start-ups mainly townhouses, as things were booming.

The price under contract in Mississauga was $16,900 with $500 down, and flipped the paper for about $33,000 before completion. The lawyer held out too long and was in a mess, and the painting contractor tranferred titles to family members and they walked away on him with the cash. There was an Italian bank located on Yorkville Avenue that went belly up too, as have seen it all.

#160 harden on 01.03.13 at 3:00 pm

live from the echo chamber:

http://www.rebgv.org/news-statistics/prices-hold-firm-home-buyers-and-sellers-conclude-2012-sidelines

#161 Old Man on 01.03.13 at 3:14 pm

I had to do some research as my memory is a bit foggy, and the trigger date was April 9, 1974 when the Ontario Government stepped in to stop the party with Land Speculation Tax, and believe it was 20%. They killed the market bigtime leaving untold thousands holding the bag with blood on the streets, but it was interesting to note that property values held up.

#162 Franke le Skank on 01.03.13 at 3:14 pm

#147 Telecon on 01.03.13 at 2:07 pm
From what I’ve read, Texas didn’t have a huge run up in housing prices prior to the US crash and because of that the correction wasn’t severe. Calgary prices have outapaced incomes and rent so it will be affected. The lucrative Oil industry may temporarily sheild it but eventually Calgary will fall.

#163 Franke le Skank on 01.03.13 at 3:15 pm

Corrcection…. #154 Telecon

#164 WhiteKat on 01.03.13 at 3:16 pm

@ Retired boomer re:
‘Didn’t start til I was 37…stupid American…but happy now!’

I hope you don’t live outside the US, or if you do that you have been keeping up with your US tax returns and FBARs (foreign bank account reports). Otherwise, the IRS is coming for you soon.

#165 Stoopid Idiot on 01.03.13 at 3:37 pm

Robert Prechter:

He called the Bull market of
the 1980s – in the late 70s.

He called the Bear market
of the 2000s in a book that
came out in 2002.

What’s he saying now?

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

Mind Of Money

http://www.youtube.com/watch?v=h4jt2vGcXmg&feature=player_embedded

#166 DON on 01.03.13 at 3:39 pm

@ #155 CrowdedElevatorfartz on 01.03.13 at 2:10 pm @

“Than public servants for public transportation…. Apparently you dont read the newspaper. Public private partnerships(P3′s) are all the rage these days… so once again the private sector can do THAT job too. Cheaper……

I, for one, dont like paying even more taxes for a service(s) that can be provided by the private sector cheaper, faster and with and actual smile on the vendors face.”

REALLY – Cherry picking the facts, Check out the one article below. Also think twice about contractors from abroad you get what you pay for – cheap labour and LACKING Quality – which means a whole lot of rework.

http://castlegarsource.com/news/oped-bc-heading-its-own-fiscal-cliff-22597#.UOUq_2t5mK0

Maybe you all you anti public jobs people should take a look at what is happening around the world. Bolivia just recently nationalized two spanish run electricity companies. When the pendulum swings too far in any direction balance is lost.

Maybe you all should start to vote properly and not just for the old brand/colours.

Crowded – go buy a house, or be priced out forever. You know there is only so much land in Canada.

#167 GoldnSilver on 01.03.13 at 3:43 pm

Oh Oh!!! Check out the December sales stats for greater Vancouver.
http://www.stockhouse.com/news/FinancialNewsDetailFeeds.aspx?n=14850071&src=cp

#168 Fiscal Cliff on 01.03.13 at 3:44 pm

#102 monopoly money on 01.03.13 at 6:55 am

‘Without the Fed’s buying, it would be impossible for the Treasury to finances its debts at rates it can afford. That is precisely why the Fed has chosen to monetize the debt.

If the Fed actually raised rates , the result could be a much greater financial crisis than the one we lived through in 2008. The bond bubble would burst, interest rates and unemployment would soar, housing prices would collapse, banks would fail, borrowers would default, budget deficits would swell, and there would be no way to finance another round of bailouts for anyone, including the Federal Government itself.’

——————————————-

Greed is an inordinate desire that influences our choices and actions. The public and private debts have grown to insurmountable amounts that governments are unable to enact fiscally responsible policies and governance without crashing their economies. Garth’s predictions simply adhere to this inordinate desire of the government and their citizens, greed.

#169 expat_engineer on 01.03.13 at 3:49 pm

Here is one that has dropped 99.99 %
Its been on sale since at least summer 2012.

http://www.realtor.ca/propertyDetails.aspx?propertyId=12692038&PidKey=-1084699894

Another house a few minutes away on the same street was on sale all summer for 800,000 and got pulled. I went to that open house. The owners son was telling me what a great business it would be to convert the house into a rooming shack for 4-5 families.
I could pull in 50K in rent per year.

#170 Old Man on 01.03.13 at 3:57 pm

#166 WhiteKat – you need not tell me about the IRS, as was hooped $15,000 with a holdback in Vegas at the Luxor with the check they had to cut me. Now as for my partner from KY who lives in Vegas that was directing the complex moves on the crap table I owe her 50% of the take, but my bank has a 30 day hold on it to clear. Who was she that I hooked up with? Well she once was a pit boss – retired – for a major casino at one time – retired – in charge of the crap table section, so we cleaned up. Oh happy days for me, and the IRS has MY MONEY, so perhaps I can claim a foreign tax credit or something.

#171 GoldnSilver on 01.03.13 at 3:58 pm

December Real Estate stats for Greater Vancouver!!

http://www.stockhouse.com/news/FinancialNewsDetailFeeds.aspx?n=14850071&src=cp

#172 Smoking Man on 01.03.13 at 4:00 pm

Doing my monthly crystal ball thing,

Conclusion, usa housing rebound hype and bs.
Gta Sfh.. PRICES Higher on less volume…

Pressure on fixed rate mortgage hikes mounting while floating rate pressure building to drop it….

Intersting times we live in…..

#173 Fiscal Cliff on 01.03.13 at 4:18 pm

Economic Super Cycle

History has shown their have been many cycles of democracies evolving into indebted social democracies. The crash of 2008 is part of such a cycle, of which is by far the biggest ever, started when Governments tried to rebalanced their trade deficits by leveraging (credit creation).

Since 1975, the US has recorded trade deficits every year. To understand the net effects of long term sustained trade deficits, imagine ‘If you always spent more than you made for even 5 years’. You would of, or eventually will, run out of money.

In-order to mitigate outflows of capital and the loss of manufacturing jobs, the US economy evolved to become more serviced based and credit dependent.

Year after year, the US economy was infused with more and more credit. They required more and more credit year after year just to sustain economic levels.

Now, Quantitative Easing and Credit Easing are required to offset insufficient credit creation and keep the economy afloat. Other than printing more money, what’s next?

I focused on the US above but the same hypothesis applies to a greater or lesser degree to other major world economies.

#174 Just sayin' on 01.03.13 at 4:22 pm

I don’t mean to be disrespectful of govt workers and I do value their services. But the reality is that they are overpaid relative to what they do and relative to what we can afford.

Add up the payroll taxes paid by the Cdn Tire & Tim Horton cashiers (with tired feet and no pensions) in one city. How many of these hard-working men and women does it take to pay for the salary & bens of one govt worker? Lots!

Look, we’ve already indebted our children for years to come … in an ever-tightening global economy.

Something has to give … and it will be house prices and govt salaries.

If Alberta’s Conservatives don’t get their act together quickly and do a Ralph Klein wage/ben rollback of public workers soon, they will get their Dr Waynes handed to them in the next election, assuming that Wild Rose can keep its right wing under control.

This is a justice issue folks. True religion is looking after widows and orphans and to seek justice. I’m not calling for govt workers to be abused, just paid say 20% less, that’s all. You still won’t be seeing govt workers at the food banks, they’ll be just fine. While we’re at it, lets cut politician salaries/bens by the same amount.

#175 Gregor Samsa on 01.03.13 at 4:25 pm

>#139 The Prophet Elijah on 01.03.13 at 12:19 pm
>Source? I think your name gave it all away.
>3 billion deficit in Alberta with oil at $90, how do you think this is going to end.

Search the news – I heard it on CBC radio today and they were interviewing people that had moved here from other countries. Anecdotally, it holds up. Rental market is tight, and lots of people are flocking to Calgary from all over the world to find work. All the temporary accommodation in the city is full of them.

In a way, just the perception that jobs are here can act as economic stimulus. People come to find a job, can’t find one, but they still end up working at Wal-mart or something, take a crappy basement apartment, buy things at ikea to fill their apartment, etc. Then the next immigrant that comes gets a job at ikea.

Don’t underestimate the power of perception.

I’m not going to deny that the Albertan economy is kind of like a ponzi-scheme. It requires a constant flow of new immigrants and new investment capital to keep going. But the thing is that you can never tell when it’s going to stop, and until it does, nothing will change.

#176 Humpty Dumpty on 01.03.13 at 4:39 pm

34 Charts To See Before Making A Move In 2013

Read more: http://www.businessinsider.com/david-rosenberg-2013-investment-outlook-2012-12?op=1#ixzz2Gwm2TAUn

#177 Boomer21 on 01.03.13 at 4:54 pm

172 Old Man
You can get the money that they withheld. You just need to do an IRS tax return. I did it back about 10 years ago and got the $13K withhold with interest. At that time it took about a year to get the refund but it was sweet when it came. Had my accountant do the paper work and it cost about $500 for him to do the work. Still it was worth it.

#178 Ma Ha Karin on 01.03.13 at 4:55 pm

@#107 Kam

Let this link remind you what public sector employees make.

EI: 2 year college technicians making more than 6 figures, wow…..they would not even pay that to most engineers in the private sector.

http://www.fin.gov.on.ca/en/publications/salarydisclosure/2012/

This is the end of this thread. — Garth

#179 Berniebee on 01.03.13 at 4:56 pm

#55 };-) aka Devil’s Advocate

“Apparent” inventory? But I would say that non “serious” sellers only convince other casual sellers and buyers that the market is flooded, and then after a few months of not selling, confirm to everyone that their asking price is too high for this market. It’s convenient to dismiss MOI “in the current market dynamics” , as you put it, but those house ARE for sale and it takes only one desperate (or forward thinking) seller to set the house price trend further downwards. Besides, house prices, whether they are up or down, are the basis of 9 out 10 water cooler conversations in this town. I doubt that the typical Westside Vancouver homeowner would be ignorant of the current market trends. I’m not sure that a significant percentage are testing the markets.

And if you presume to know the intentions for those who put their house for sale, then perhaps you know what percentage of the houses NOT presently for sale are “owned ” by people in desperate financial situations, who with huge mortgage payments are holding on despite lost of jobs, divorce, death, etc.

The whole point in a nutshell? Just as in a hot market, where it takes only the last few sales to up the baseline for prices, it only takes a few sellers to price aggressively to sell, and set the trend downwards.

Spring will tell, but my prediction is that we will look back at 2012 and 2013 and think:
-How obvious it was that this crash /meltdown was going to happen.
-How could we think that 30 million people in a country the size of Canada would be talking about a land shortage when justifying house prices?
-Who was supposed to buy all these too big, too expensive boomer houses?
-Why would anyone think of a housing as an investment, when really for most us it’s just an expense for shelter.
“Invest” in a house? Why, that’s like investing in tulips…

#180 joe on 01.03.13 at 4:58 pm

#154 Telecon, absolutely you are right. No matter what oil does prices will come down in the praries. Oil and RE have no correlation, credit/mortgage guidelines and RE do on the other hand.

#181 Old Man on 01.03.13 at 5:04 pm

This economy has me stumped, as here it is January 3rd, and am trying to buy highend food product from Europe, and cannot get a parking space at a few stores, so what is going on? Never seen anything like this in my life, as the money is going for food products from Europe, as the Polish stuff is high quality and dirt cheap, and I thought was the only one who knew?

#182 Keith in Calgary on 01.03.13 at 5:16 pm

My bonds mature in JAN 2014.

I bought the bulk of them between 2003-2007 at about 3-5% below par. Basically been rolling over the coupons and stepped maturities the last few years. They all pay a 10% coupon. My average blended yield at maturity on the portfolio will be 11.76 %………

There’s really nothing wrong with bonds…..if the yeild is right and you don’t plan to trade them, and are willing to hold them to maturity.

Sell and take the capital gain – taxed at half the rate of interest. — Garth

#183 hangfire on 01.03.13 at 5:21 pm

#118 The American……what you complain about is being caught in the fog of war propaganda perpetrated by the politically correct, the CBC, and extreme left that wants to misdirect everything that is wrong with Canada onto any boogy man somewhere else…in your case The United States.

Have you wondered why Canada’s leftists still insist that the worlds problems lay squarely the shoulders of George Bush…as if the name became a verb and a rallying cry for every nutbar and flake with an axe to grind…… against any reasonable argument that isn’t on the union message board?

Hang in their TA…..we are making progress in this backwater of a nation…slow as it may seem.

Earlier I quoted the definition of ‘the righteous mind’……this entitlement to leftist lunacy was actually promoted by a national government ( the liberal party) for 30 years. Until the braindead generation of leftists has passed we will still have people railing ‘Death to AMERIKA’ simply because they heard it repeated on the CBC’s heavy anti everything agenda taxpayer subsidized rotation….. and not because they understand the social dynamics of your country.

I soend a lot of time in Texas….love it…far more democratic and multicultural than any area in Canada. There are no immigrant ghetto’s in Dallas/Ft Worth where the sense of separation is enforced by government leftists…..it is much more a pleasent and egalitarian place to live…..people mix…and not because they are forced to by race quota. BTW…Texas has the fastest growing Asian population in North America….stick that all you Amerika hating racists. Its much harder to get into the US than Canada…think about it….they are choosing Texas over Toronto….say it ain’t so all you gushing bleeders.

Where I live in Irving…I am surrounded by thousands of industrial parks and Head Office Towers of international companies……Vancouver…not a single industry except civic employees and retail services. Taxes are half in Texas……BC…with its rich history of elite unions…..direct and indirect taxation…over 80%.

Housing?……a 4000 sq ft home with a pool is under $400K…..and people make better money….as much as 50% more on average because of the executive job pool….go figure.

#184 };-) aka Devil's Advocate on 01.03.13 at 5:21 pm

#160 Reasonfirst on 01.03.13 at 2:56 pm
#55E };-) aka Devil’s Advocate “I say “apparent” because many of those homes are not offered for sale by sellers with any serious motivation to sell.”

That can be true in any type of market dynamics. In a hot market there are those sellers with no real intention to sell but hoping they might hit a jackpot. Your statement is therefore meaningless.

If you truly understood the real dynamics of the market you would know how wrong you are.

#185 };-) aka Devil's Advocate on 01.03.13 at 5:26 pm

Fewer sellers sell in a hot market because they are “waiting for it to go higher”. While on the other hand, fewer buyers buy in a buyers market – because they’re waiting for it to go lower.

Get it?

#186 Canadian Watchdog on 01.03.13 at 5:40 pm

Toronto price drops and price listing shenanigans Link

#187 Hoof - Hearted on 01.03.13 at 5:44 pm

#92 Nostradamus Le Mad Vlad on 01.03.13 at 1:49 am

-
“. . . brought some interesting juxtapositions. Stock markets erupted, . . .” — Curious. If stocks surged across the board, what role does austerity play in the big game?

It’s quite obvious what is happening in Europe, but the question is WHY? WHO stands to benefit if austerity is imposed on the masses? WHO will order it, and under WHAT pretext? WHAT gains will be made, and by WHOM? No doubt someone will benefit from this (significantly).

======

Whats not to understand ?

Recall Kruschev’s words…..to the effect Communism will be the New World Order, but it will arrive from within. Once the middle class is wiped out, we are basically all equal “comrades” at the lowest common denominator.

Only other question/s are whose side is Garth on?…. does his bunker have cable? (and we can’t let Dr Wayne in).

#188 Telecon on 01.03.13 at 5:48 pm

#165 frank le skank

Yes, I agree. I guess that validates my point that oil prices were not responsible for the increase in RE prices in Alberta. Since most cities in Texas did not experience any significant price increases during the oil boom/US housing bubble, one cannot jump to the conclusion that oil prices have had a major impact on RE in Alberta. Like I said in my earlier post, house prices will fall here for all the reasons this blog has hammered home even in the face of rising oil prices and positive net migration. I know Garth likes to mention tracking and a new US oil boom rendering the oil sands obsolete, but I don’t think that will be the case at all.

#189 T.O. Bubble Boy on 01.03.13 at 5:57 pm

HAM in the headlines:
http://www.huffingtonpost.ca/2013/01/02/chinese-cash-seizures-canadian-border_n_2396604.html

Chinese nationals are bringing illicit cash into the country by the briefcase, and at least some of it is ending up in Canada’s real estate market, according to a news report.

The total number of cash confiscations, however, appears to be declining. The CBSA stated in a 2011 audit that the number of cash seizures at the border had declined by a third between 2009 and 2011.

The questions I’d be asking:
- are cash seizures declining because there are fewer people smuggling cash, or because fewer get caught?
- is there a direct correlation between declines in Vancouver/Toronto RE sales volumes and the decline in cash seizures?

#190 Marko Juras on 01.03.13 at 6:00 pm

“For several years now we have been getting the listings for houses in Oak Bay asking between $500,000 and $800,000. Since we sold our house in oak Bay we have seen prices drop around $100,000 for these homes.”

Wishful thinking……prices haven’t dropped 13% to 20% in Oak Bay.

#191 Bast on 01.03.13 at 6:01 pm

I don’t doubt that people are coming to Alberta, BUT…people are also leaving Alberta too. 31,963 in in Q3 2012; 18,048 out. Net in: 13,915. Still pretty good; but people tend to come her to make money and then leave again. Check out the AB gov’t figures for yourselves: http://www.finance.alberta.ca/aboutalberta/population_reports/2012-3rdquarter.pdf

#192 Realtors in a panic on 01.03.13 at 6:07 pm

Wow…..look at all the out of work and haven’t made a sale in almost a year realtors Posting in an all out panic. It’s going To be a nasty crash realtors , a nasty crash.

#193 Form Man on 01.03.13 at 6:10 pm

#182 Berniebee

Good post.

What DA fails to acknowledge is that the stats are compiled the same way over a period of time, so we can use them for comparison with some confidence. The notion that the Kelowna market is ‘different’ is nonsense. As for sellers not being motivated, that is bunk. Anyone who lists is motivated, some are just more desperate than others. How many homeowners would list for fun, knowing they will have to put up with endless queries from friends etc, keep the house neat and tidy all the time so strangers can tramp through it, have to vacate periodically for viewings ?
The idea is laughable.

#194 Old Man on 01.03.13 at 6:13 pm

This guy called Smoking Man is in training, as the Old Man gets the babes, so should I throw him a few to boost his ego a bit? Now know he is a married man, and his life needs some action, so what can I do?

#195 Mixed Bag on 01.03.13 at 6:33 pm

#181 Ma Ha Karin on 01.03.13 at 4:55 pm

http://www.fin.gov.on.ca/en/publications/salarydisclosure/2012/

This is the end of this thread. — Garth

————-

But that last link was an eye-opener.

It is unrepresentative of what most make. — Garth

#196 espressobob on 01.03.13 at 6:38 pm

#168 Stoopid Idiot

Bob Prechter? Seriously? Hope you don’t base your investment dececisions on that premise.

#197 mark on 01.03.13 at 6:48 pm

Global was going nuts reporting on property assessment falls. Although they did drag old rent-a-quote, Tsur Somerville with:

“Vancouver was never in a bubble.”

Hold on to that one.

#198 cramar on 01.03.13 at 6:49 pm

#79 Boomer21 on 01.03.13 at 12:21 am

I have no debt and am retired and use my credit card frequently each month. I always pay it off in full every month. I don’t get why my bank keeps offering to increase my credit limit. It is already $20K, why would I need $30K when I pay it off every month. Usually it is around $1k. Oh wait, maybe they are waiting for me to get a terminal illness diagnosis or dementia! Crafty aren’t they?

——————–

Happens to me all the time. My question is why do you have a high limit of $20k? I think cards usually start off with something like $3k and when they offer to bump to $5k, I ask that they reduce to $2k. If I’m anticipating a trip or something where I could spend more I get them to temporarily bump it up and next month reduce it again.

@ 137
I guess I’m not the typical Vegas gambler since I’ve been doing this for many decades and haven’t carried a balance yet.

#199 hoser on 01.03.13 at 6:56 pm

Last night my better half and I were watching a TV drama, in which the setting was Miami. The story was about a down and out single mom whose crackhead husband left her with 2 kids. She lived in a detached bungalow with a nice yard and a fenced in back yard on a neat and tidy street. My spouse and I looked at each other and winced – here in Vancouver to get a home of that caliber it would cost at least $1.2 million. Our standard for shelter here in Canada is below our neighbors to the south. We probably live in something similar to a crack-shack or doghouse in the States, or even Mexico. Laugh at their fallen property market? No I envy them.

#200 cramar on 01.03.13 at 6:56 pm

I don’t get it! If Canadians say for the 3rd year in a row that their first financial priority is to pay down debt, then why is the indebtedness of Canadians still rising year after year? What is it around 163% of yearly income (back in the 2nd quarter)? Something does not add up here!

#201 Devore on 01.03.13 at 7:03 pm

#183 espressobob

Bob Prechter? Seriously? Hope you don’t base your investment dececisions on that premise.

Come on, dude’s a genius. He predicted every recession in the last couple of decades. Of course…. he also predicted the 25 others that never happened, but hey, who’s counting!

#202 Devore on 01.03.13 at 7:07 pm

#55 };-) aka Devil’s Advocate

The “apparent” inventory is such that the “apparent” sellers well outnumber the “apparent” buyers, thus prices are falling. Back in the real world, where we use “actual” words that mean “actual” things, that’s a bear market. MOI is one of the measures we use to ascertain the “actual” state of the market. Only the ignorant take the MOI number literally, or dismiss it completely. It’s a tool.

#203 Westernman on 01.03.13 at 7:07 pm

Ma Ha Karin @ # 181,

DELETED

#204 Spiltbongwater on 01.03.13 at 7:15 pm

Phil Soper is out to lunch. “Buy now in the winter before the bidding wars start in the spring”. He is either blind to what the market is showing him, or delusional and in need of a rebalence of his meds.

“We have very low interest rates, drawing people into the market who wouldn’t be there otherwise… versus a natural correction because home prices have risen faster than wages and salaries and they need a chance to catch up.”

#205 Devore on 01.03.13 at 7:23 pm

#202 cramar

If I’m anticipating a trip or something where I could spend more I get them to temporarily bump it up and next month reduce it again.

Even better is to put money into it, to “charge it up”. I keep all my limits very low, when I know I will be making large purchases, I transfer money (ie, cash) into the card, voila, instant credit limit increase.

To be honest, I run everything through my Visa, because I get 1-2% cash back on all purchases, and got my annual fee reduced. At the end of the year I end up with a couple hundred in my pocket. Sure, I know I still pay more because Visa charges vendors who pass the cost on to us, but with so very few vendors offering cash discounts, it doesn’t really matter how you pay.

#206 T.O. Bubble Boy on 01.03.13 at 7:25 pm

Vancouver sales plummet 31% compared to last December, and 32% from November:
http://business.financialpost.com/2013/01/03/vancouver-home-sales-plummet-31-compared-to-last-december/?__lsa=cd49-606f

#207 Old Man on 01.03.13 at 7:32 pm

Peter MacKay who sold out for $500,000 to step back for Caesar to allow a political coup has just denied 146 military families compensation for Real Estate moves, whereby, they have lost everything with a loss in Real Estate values. He could care less, as that is Reform.

#208 NorthOf49 on 01.03.13 at 7:42 pm

Just talked to the neighbours, they’re listing their Hamilton West Moutain home next week. Bought nearly 5 years ago around $500K with a 0/40 mortgage (just squeaked under the cutoff date so they tell me). Mortgage is up for renewal this fall. Over the 5 years, I estimate $27K of the principle has been paid. They are counting on a 20% rise in equity over the period to cover the remaining mortgage balance upon sale, realtor fees and moving expenses. Hoping they can find a greater fool before the expected flood of spring listings begins. The downside is they perhaps should have listed last spring because right now, West Mountain / Ancaster 905 sales are moving like molasses in January.

#209 Canadian Watchdog on 01.03.13 at 7:49 pm

#205 TRT

The FED has admitted that it is scared by printing all that money to buy treasuries.

Today's announcement was to test market reactions to a Fed withdrawal. Nothing more. If they're ever going to attempt to wind down their asset purchase program, they have to train the market first.

Central banking is about confidence, not money.

#210 Smoking Man on 01.03.13 at 7:51 pm

Garth I see protecting Teacher on here all the time. But you want to know why kids with University certificates buy 500k 600 sq/ft cells in the sky……………….

My son posted a question on Facebook……..

6/2(1+2) less than 50% got it right, several of his Diploma proud buddy’s got it wrong….Teachers, fire them all………………..

Ha

Ok so no one embarrassed themselves look at it this way. Post it on face book and see who the idiots are.

6
-
2(1+2)

Answer =?

#211 espressobob on 01.03.13 at 7:51 pm

#205 TRT

Bad mindset dude, or dudess. You need an advisor in the worst way!

#212 TurnerNation on 01.03.13 at 7:52 pm

On the wire today:

*DJ Kia Motors Amer Announces All-Time Best Full-Yr Sales And U.S. Market Shr For 2012

*DJ Kia Motors America December Sales 39,178 Vehicles

….
DJ Bill Gross’s Bond Fund Lured $18 Billion in 2012 After Outflow in 2011

By Min Zeng
The world’s biggest bond fund run by Bill Gross took in $889 million in December, capping a year of rebound after a humiliating outflow in 2011.
For the whole year of 2012, the $285.4 billion Total Return Fund (PTTRX) at Pacific Investment Management Co. enticed $18 billion in net new cash, according to data from fund tracker Morningstar Inc. Thursday.
That was more than sufficient to cover the $4.97 billion net outflow in 2011. It was the first calendar-year redemption since the fund’s launch in 1987 as Mr. Gross’s ill-timed negative bets on Treasury bonds turned the fund into one of the worst performers among its peers in 2011.

Still, last year’s inflow was smaller compared to $22.6 billion in 2010 and $50.1 billion in 2009.
Investors warmed up to the fund again in 2012, drawn by its strong performance. The fund handed investors a return of 10.4% for 2012, beating the 4.2% of the Barclays US Aggregate Bond Index, according to data from Morningstar. The fund beat 88% of its rivals last year.

#213 Patiently Waiting on 01.03.13 at 7:58 pm

Looks like the sheeple are finally starting to catch on … unfortunately they are usually the last to get the memo … here is a typical example of what I see lately as those that bought in the last few years are starting to head for the exits …

MLS F1300071
Purchased in May 2012 for $1,510,000
Listed at $1,575,000
1st Mortgage $1,811,000
Interest at prime Plus 5%

MLS F1225487
Purchased in June 2011 for $1,110,000
Listed at $1,568,000
1st Mortgage $832,500 at Prime + 3.79% (note prime is at 3%)
2nd Mortgage $160,000 at 10.5%
Days on Market shows only 83 days but it has been on the MLS over ten months (originally listed April 2012)

Good luck to anyone who thinks this will be a soft landing … I wouldn’t bet on it …

pw

#214 Nostradamus Le Mad Vlad on 01.03.13 at 8:00 pm

-
A Blonde’s Year in Review

January — Took new scarf back to store because it was too tight.

February — Fired from pharmacy job for failing to print labels . . . Helllloooo!!! Bottles won’t fit in printer!

March — Got really excited . . . finished jigsaw puzzle in 6 months; box said ’2-4 years!’

April — Trapped on escalator for hours . . . power went out!

May — Tried to make Kool-Aid. Wrong instructions — 8 cups of water won’t fit into those little packets!

June — Tried to go water skiing . . . couldn’t find a lake with a slope.

July — Lost breast stroke swimming competition . . . learned later, the other swimmers cheated, they used their arms!

August — Got locked out of my car in rain storm . . . car swamped because soft-top was open.

September — The capital of California is ‘C’, isn’t it?

October — Hate M & M’s, they are so hard to peel.

November — Baked turkey for 4 1/2 days. Instructions said 1 hour per pound and I weigh 108!

December — Couldn’t call 911. Duh . . . there’s no ‘eleven’ button on the stupid phone!
*
#190 Hoof – Hearted — “Recall Kruschev’s words…..to the effect Communism will be the New World Order, but it will arrive from within.” — Goes with the cycle change from Caucasian to Yellow – Red races. Makes sense, esp. since the Chinese govt. has been calling for the US to ban guns entirely, and Soros / Obama (both lefties) are following their instructions, but sheeple (as usual) will have no idea what has hit them until someone else calls the shots. China wipes Russia’s debts off, Obomba’s Civil War and One more example of the way the west is headed. Thanks for the feedback!
*
Oregon Glad I don’t drive; Best Places to be born and retire; Obomba’sCare New taxes in effect.
*
Drug-resistant Malaria in Thailand; Mild temps., no? and AGW bombshell; Printing Ink Don’t check cartridges with eyes; 4:43 clip Demand a plan. Interesting clip; Child Poverty “At least we beat Romania!” wrh.com; Russia Upgrading their navy; New Mexico and Monsanto New Prop. 37?

#215 Marko Juras on 01.03.13 at 8:09 pm

“Wow…..look at all the out of work and haven’t made a sale in almost a year realtors Posting in an all out panic. It’s going To be a nasty crash realtors , a nasty crash.”

I went from 28 MLS® sales in 2011 to 47 MLS® sales in 2012, add none MLS® sales (pre-sales, deals on non-listed properties) I ended up a few short of 60 total deals. No panic here.

Sales in Victoria down less than 5% year over year.

#216 };-) aka Devil's Advocate on 01.03.13 at 8:20 pm

All your arguments are moot. I don’t try predict the market I deal with the realities of it right now at this time in which my only motivated buyer or seller are wanting to buy or sell.

Reread my last post. It is fact at any given time or it is not at all. Buyers don’t buy when they should and sellers typically, en masse, don’t sell when they should. But always a seriously motivated buyer or seller will buy or sell as they have a pressing motivation to do so. I try not to deal with anyone who isn’t seriously motivated not even my close friends. It would be an a offense to those seriously motivated clients I’m working with to waste my time with someone who is not. It is especially disrespectful of my for me to do so. This is a job. I’m in the business first and foremost to earn a living and then because I enjoy it.

So I haven’t the latitude not to know EXACTLY what’s going on in the market as the success of my business depends on it.

#217 };-) aka Devil's Advocate on 01.03.13 at 8:27 pm

#196 Form Man on 01.03.13 at 6:10 pm
#182 Berniebee

Good post.

What DA fails to acknowledge is that the stats are compiled the same way over a period of time, so we can use them for comparison with some confidence. The notion that the Kelowna market is ‘different’ is nonsense. As for sellers not being motivated, that is bunk. Anyone who lists is motivated, some are just more desperate than others. How many homeowners would list for fun, knowing they will have to put up with endless queries from friends etc, keep the house neat and tidy all the time so strangers can tramp through it, have to vacate periodically for viewings ?
The idea is laughable.

So too has it always bewildered me why someone would want to go through such motions with little likelihood of achieving a sale at the lofty expectations of price they had. Has their agent not educated them on the dynamics of the market or have they refused to believe?!? THERE IT IS!!!

#218 TurnerNation on 01.03.13 at 8:36 pm

Police Gravy: Final reading material. 1 in 4 of your tax dollars.

http://www.tpac.ca

http://www.thebulletin.ca/cbulletin/content.jsp?sid=21009283801567394806327685290&ctid=1000006&cnid=1002717

“It could rethink the three daily shift arrangements of 10 hours, 10 hours, and eight hours. It means police are paid to work 28 hours during every 24 hour period, hardly an efficient way to spend money. Changing to three shifts of eight hours each day would mean each officer would be available for work a few more days each month, resulting in savings close to $90 million a year.”

http://www.thebulletin.ca/cbulletin/content.jsp?sid=21009283801567394806327685290&ctid=1000009&cnid=1002827

“Individual police officers get a benefit from these tickets: every time they go to court, they get paid four hours at time and a half, even if they spend just 15 minutes in court. That’s more than $150 each time they show up at court, and of course that is public money.”

#219 };-) aka Devil's Advocate on 01.03.13 at 8:46 pm

#182 Berniebee on 01.03.13 at 4:56 pm

Sorry you feel that way. Let us know how it works out for you.

#220 };-) aka Devil's Advocate on 01.03.13 at 8:53 pm

#150 TRT on 01.03.13 at 1:45 pm
DA:

Why do you even bother? Keep inffo that will make you money to yourself.

I come to this blog for entertainment purposes only. Sad, but true.

I hear ya. But it’s so difficult not to when you see such absurdity.

#221 Form Man on 01.03.13 at 8:56 pm

#222 DA

perhaps these sellers with ‘lofty’ expectations are trapped underwater on their mortgages and cannot lower their price ………….

#222 };-) aka Devil's Advocate on 01.03.13 at 8:57 pm

#150 TRT on 01.03.13 at 1:45 pm

Besides TRT those who don’t understand it are too belligerent and ignorant to ever learn, so there’s little chance of them using it o your or my disadvantage.

But it is interesting, the misconceptions, isn’t it?

#223 Devore on 01.03.13 at 9:05 pm

http://www.rebgv.org/news-statistics/prices-hold-firm-home-buyers-and-sellers-conclude-2012-sidelines

“Prices hold firm as home buyers and sellers conclude 2012 from the sidelines”

Prices hold firm as benchmark drops 6% from peak (12% for condos) and 1% MoM? This is just outright, blatant deception.

#224 Just sayin' on 01.03.13 at 9:37 pm

#223 Turner Nation re police compensation. Agreed. I respect cops but sorry we have to be smarter about how we pay them. Real estate and public-worker compensation, both long overdue for a major tune-up. We owe it to our kids.

#225 dance...dancetotheradio on 01.03.13 at 11:26 pm

Saskatoon is on crack.
I lived there for four years.
Public money everywhere building things.
People paying $350000 for houses that sold for $150000 three years earlier.
People buying houses and renting them out, eventually for less than they needed to break even.
People borrowing a half mill to build a house thinking they could sell it for a mill.

What’s really going on in Saskatoon is the separation of old Saskatoon into two constituent parts.
The people who can move away from the drugs and the crime and the people who have to stay behind.
The banks are exploiting that.

When you have people with machetes on the downtown riverbanks carving people up and carjackings on the west end and home invasions on the east end it’s not surprising that anyone who can get a home loan is moving outside of Circle Drive.

#226 g-unit on 01.04.13 at 1:54 am

Dust off your quadruple bear etfs Garth, we are in for a slide!!

#227 A and A on 01.04.13 at 4:10 am

Dear Mr. Turner,

We read your advice for 2013 yesterday. You are such a Canadian treasure! We immediately sought some rates today from 3 banks to blend and extend our mortgage which expires in Sept. 2014. We are not in a position to sell our home as we are going to be leasing the home from July 2013-July 2014 during a 12 month absence.

We were the 3 offers:
-3.1% for 5 years or
-5% towards our principle with 3.3% for 5 years or
-4.5% for 7 years
-$2100 penalty fee without lawyer fees

Principle left: $185,000 with no other debts
Home: 4 years old, 21,000 sq ft, 8 hectares of forest Income: $75,000 each with a pension and benefits
Original cost: $400,000

We wondered if these rates sound good to you? The second option had the best results in 5 years but do you think it is better to go for or explore a 7 year rate? Or should we take the better 5 year rate and consider selling. We have a great home and location (NW Newmarket) with a child in school for exactly 5 more years.

We also have 3 RRSPs and wondered if it would be worth it to take the $5,000 from each that is allowable at the 10% rate and either put that towards our mortgage or if we should do something else with it. Oh gosh, we are asking a lot now. We are eager to learn and want to do something better. We wish we knew about you back then when our elders were saying STOP RENTING and BUY RRSPs.

Thanks very much for your blog and I hope you will have the time and inclination to respond. We really enjoyed staying up to read the December posts and will continue to catch up on more of them as well as learn how to follow your advice. We wish for you and your wife a wonderful year ahead!

Sincerely, the S family.

#228 A and A on 01.04.13 at 4:17 am

I am really sorry for all the errors in our post and cannot change them. Please feel free to do so for other readers or even shorten our post. Thank you very much. A S

#229 walltiger on 01.04.13 at 12:44 pm

#155, #223.

you have my support!