Fear no evil

back1

When I punted a Victoria realtor last weekend for using the blog to drum up sales leads, then trash this site elsewhere, I almost felt remorse. Almost. After all, I like entrepreneurs and go-getters. It takes a contrarian streak to come here and try to sell houses, especially in a city with the economy of a glorified car wash, a population of advanced wrinklies and real estate selling for about double what it’s worth.

I indulge a lot here. Idiots who refresh their screens for three hours so they can type ‘First!’ Metalheads and conspiracists. Doomers and house pumpers. Hot, young women who won’t stop following me. And, yeah, realtors who’d like to contribute to my memorial fund.

But those who truck in fear and misinformation are unwelcome. Especially now, when we have a personal financial crisis brewing.

For example, this week the Commerce released a survey of retired people which seemed all ponies and sunshine on the surface, with 69% saying they’re living the retirement they’d expected. This is news, since this year for the first time in Canadian history a half million people will turn sixty. It’s just the start. Another 500,000 Boomers will hit that mark every year for the next seven, most of them owning real estate.

So here’s the problem. A third of Boomers are now retiring with a mortgage. Worse, of the people the bank surveyed, a majority said they’re not in healthy enough financial shape to handle unexpected expenses. In fact 54% confessed that a new monthly payment of $500 would be “unmanageable.”

This is what happens in a nation of money illiterates (and it’s worse in the US, where 60% of the population has savings or investments of less than $25,000). In Canada seventy per cent of people own houses, but an equal number have no pensions. Over 80% of the money in TFSAs today is in savings accounts or GICs paying less than 2%. The savings rate is pitiful and household debt’s at a new record. Investment companies like Canaccord are slashing offices because most households spend all they earn and have nothing left to sock away.

A decade of romping real estate values led a majority of people to think that buying a house was a financial plan, and it was perfectly okay to shovel every cent of net worth into property. Now that we’ve had just three years of 3% mortgages, people think they’ll last forever. A media poll this week found over 70% believe rates will stay put for years and years and years. Meanwhile financial ignorance is on daily display on this pathetic blog, as the disbelievers trash equity markets, economic growth, leading indicators or the very fact you can earn more than 3% without being a hooker or a thief.

We have a retirement crisis brewing today simply because most people made the wrong choices with their money. They equated houses with security, when they’re not. They grossly underestimated the amount of liquid wealth they’d need. They crazily believed public pensions would support them in old age. And they completely misunderstood risk. They feared loss, when they should have feared poverty.

This is just the start of the problem. And, sad to say, the Boomers’ kids are following right behind, trundling down the same path to the same unhappy destination. Once again we have a generation of 30 and 40-year-olds who eschew investing in liquid assets because they lust for real estate. But this time, with houses so expensive and rates about to move in one direction only, the outcome will be worse.

So this blog has tried to show that paying off a 2.5% mortgage when you can earn 7% on liquid assets instead makes no sense. That nobody needs to buy volatile stocks or high-rate mutual funds in order to double their money every seven years. That you must collect twice as much rent as dividends or capital gains to keep the same money. That tax-free savings accounts aren’t for saving. That houses can turn illiquid while financial assets are cashable in seconds. That diversified and balanced investing carries less risk than a house in Vancouver. And, above all, what most people do is wrong. But don’t believe me. Look around.

The punted realtor, like so many with something to sell you, perpetrates the usual myths. Stock markets are toxic. Houses are safe. A return of seven or eight per cent is impossible without big risk. Garth will lead you into the valley of the shadow of death.

It’s a sad refrain, heard endlessly. And look what it’s yielded. Sixty-somethings who drank the Kool-Aid and are now hooped by an extra five hundred a month.

Too late for them. How about for you?

238 comments ↓

#1 Rishu on 01.14.13 at 10:05 pm

God has heard my prayers and delivered the Generation Y’s plight to the masses via Maclean’s!

I bought the issue, it’s pretty damn good! Touches on the housing market in Canada and how Gen Y is completely priced out among other things.

http://rishu.ca/post/40553074955/finally-someone-noticed-the-generation-y-plight

Maybe ‘priced out’ is the best outcome. — Garth

#2 Editor on 01.14.13 at 10:08 pm

In the 905, the MLS sales figures make it look like sales are 3-4% off list, but if you can get the data that shows original list prices before the increasingly common markdowns, sales are more like 8-9% off list. And they’re not going too fast after the markdowns, either. Wonder if this information will ever be more easily available to the public — or if the media will ever trouble themselves to find out.

#3 Edmonton to Halifax on 01.14.13 at 10:08 pm

Alberta’s plight will be felt across the country.

http://www.edmontonjournal.com/news/edmonton/Alberta+faces+tough+choices+premier+says/7818435/story.html

Unless, of course, it’s different there.

#4 Old Man on 01.14.13 at 10:09 pm

I went to my bank today for some cash with $40.00 in my pocket, but the people were lined up like a bank run, so to hell with that, so went shopping with my credit card. I will not stand in line for anyone.

#5 Uh Oh Canada on 01.14.13 at 10:10 pm

Garth- I listened and am now ready to vultch.
Thank- you.

#6 Editor on 01.14.13 at 10:11 pm

“A media poll this week found over 70% believe rates will stay put for years and years and years.”

Is this the recency effect or what. “Given a list of items to remember, we will tend to remember the last few things more than those things in the middle. We also tend to assume that items at the end of the list are of greater importance or significance.” (changingminds.org)

Oh – 70% – coincidentally, the home ownership rate.

#7 Heddok on 01.14.13 at 10:13 pm

The balanced portfolio Garth preaches works. 57 years old retired 2 1/2 years ago with 2.0M spent 600k on boat and living expenses now have 1.85M left. No pension. Life is good

#8 Canadian Watchdog on 01.14.13 at 10:16 pm

Bundesbank To Commence Repatriating Gold From New York Fed

It’s not money dammit. It’s just a stupid yellow rock.

#9 furst on 01.14.13 at 10:21 pm

FFUUURRRRSST! And I was only refreshing for 2 hours. So take that Garth!

#10 AK on 01.14.13 at 10:23 pm

“Idiots who refresh their screens for three hours so they can type ‘First!’”

Priceless. :-)

#11 Ogopogo on 01.14.13 at 10:24 pm

Marko Juras has been exposed as yet another realtor who talks out of both sides of his mouth. Kind of like our own resident Janus-faced realtor. This is a gem in tonight’s post:

The punted realtor, like so many with something to sell you, perpetrates the usual myths. Stock markets are toxic. Houses are safe. A return of seven or eight per cent is impossible without big risk. Garth will lead you into the valley of the shadow of death.

The masses have drunk the Kool-Aid to the extent that the meme is spread by means of peer pressure and even ridicule for those who dare to buck the trend. That said, friends and acquaintances who would look in horror when I said I rent by choice have now changed the tune to such a degree that I suspect a certain degree of envy even. Especially folks in my building trying to sell their unloved units. I almost pity then, almost. If only they hadn’t ostracized me immediately upon learning I was not an “owner” (i.e. renting money from the bank [aka mortgage]).

Schadenfreude, it’s ugly as a pissed-on schnitzel, but boy it feels good sometimes.

#12 Ford Prefect on 01.14.13 at 10:29 pm

Balanced, liquid, diversified. Retired 15 years ago age 51, home (farm), no pension (self-employed virtually all my life), 1.8M invested. It can be done and with relative ease but you do need some financial literacy and financial discipline, qualities severely lacking in most of my age cohort, at least based on my observations.

#13 Amazed on 01.14.13 at 10:29 pm

Nicorette man… So true. And Garth… I feel sorry for the agents too…. All the young ones that got in and have to figure it out. I know I shouldn’t feel bad for them… But it is interesting reading their posts.

#14 Julian on 01.14.13 at 10:32 pm

Do you still like REITs, Garth? They feel a bit frothy right now too..

#15 The Bear on 01.14.13 at 10:32 pm

Hey Garth, I am new to investing, what is the capital gains? or taxes on dividend yields in Canada?

I have no idea how it works.

#16 Mark W on 01.14.13 at 10:33 pm

How many of these 500,000 boomers per year for the next seven years live in Winnipeg?

Winnipeg … no real population growth & no shortage of land in Manitoba.

(So why has real estate gone up 250%)?

I wonder how hot real estate will be in Winnipeg circ: 2020 – 2030.

All those leading edge baby boomers who bought large homes in the suburbs that cost a fortune to heat in the winter, and the property taxes in Winnipeg are off the charts.

You can live there in a very modest house and easily pay $5200 a year for taxes … or a $100.00 every week.

#17 AK on 01.14.13 at 10:36 pm

#9 furst on 01.14.13 at 10:21 pm

“FFUUURRRRSST! And I was only refreshing for 2 hours.”

And you came in ninth. What the hell happened?
You also said that you were leaving this blog.

#18 tony b on 01.14.13 at 10:47 pm

Garth

A lot of people were in the stock market and got burned a few years back—houses are something that are easier to understand and provide a shelter.
I agree that the inflated prices will recede and they will over the next couple of years–but if youthink the populace are going to turn back to any sort of slow growth (5-8%) investing I think you are dreaming

Interest rates if they go up at all may go 1/4 to 1/2 over the next couple of years because Canada does not want the $ any stronger–so we will follow the USA–and the Fed has already stated that they will not raise rates until unemployment gets below 6%

The places that had hyper house inflation and overbuilding—condos– over the last few years will suffer a meltdown but for most it will be as the realtors say–a soft landing

#19 not 1st on 01.14.13 at 10:48 pm

Garth, its hard to muster any sympathy for Canaccord.

Anyway, most of your post and especially the middle paragraph prove without a doubt that there is no return rush of sideline money going to come into the equity market. Even if boomers liquidate real estate to free up cash, they will dive right back into bonds, GICs and mutuals like they always have. People whom have never been in the market in their life don’t just deiced to get in when they hit 60.

Where did I suggest buying stocks? — Garth

#20 mortgagebrokeront on 01.14.13 at 10:51 pm

Hi Garth, I wholeheartedly agree with you, it makes more sense to invest getting 7 percent returns vs 2.5% returns, I am not only a mortgage broker but insurance licensed and mutual fund licensed as well, since 1998

I shake my head at the size of the mortgages that people have taken on……. before 1998 I worked in the house building industry, mostly framing them, there was no money in it back then due to a housing market correction, too many contractors undercutting each other for work.

When this market really cools down to what it was like back then, there will be a hurting going on for these contractors, I think its going to be really bad, they have huge mortgages themselves, brand new pickups with large payments.

I rent, am debt free, have a nice portfolio. I remember reading boom bust echo way back in the day, and they said that the long term real estate trend in Canada would be boomer influenced.

I was wondering Garth do you see that demographic becoming a huge anchor on future real estate pricing?

#21 not 1st on 01.14.13 at 10:52 pm

#12 Ford Prefect

With all due respect, 1.8M will only throw off about $100k a year in dividend income. Thats not a lot of money in this day and age especially if you are raising a family.

OMG. — Garth

#22 peter on 01.14.13 at 10:53 pm

The S&P 500 remains below its 2000 level highs. Stocks can go done a lot and stay down for a long time. At least you can live in a house. Having said that, anyone speculating in real estate in Canada is a fool.

You are so typical. — Garth

#23 Smoking Man on 01.14.13 at 10:56 pm

Bottom line kids are fkd, the machine has you in the cross hairs . Self employment your only salvation and that’s getting harder, grow and sell weed .

A huge crop just once, then call Garth to invest your loot.

:)

#24 Network Admin on 01.14.13 at 10:57 pm

“So this blog has tried to show that paying off a 2.5% mortgage when you can earn 7% on liquid assets instead makes sense.” Does it?

#25 Humpty Dumpty on 01.14.13 at 10:58 pm

Paslm 23

1The LORD is my shepherd; I shall not want.

2He maketh me to lie down in green pastures: he leadeth me beside the still waters.

3He restoreth my soul: he leadeth me in the paths of righteousness for his name’s sake.

4Yea, though I walk through the valley of the shadow of death, I will fear no evil: for thou art with me; thy rod and thy staff they comfort me.

5Thou preparest a table before me in the presence of mine enemies: thou anointest my head with oil; my cup runneth over.

6Surely goodness and mercy shall follow me all the days of my life: and I will dwell in the house of the LORD for ever.

Give credit where its due G….
Wouldn’t want them to call you a heritic also…

Enjoy “metal heads”!

http://tocqueville.com/sites/default/files/Tocqueville_Gold_Investor_Letter_4Q12.pdf

#26 OwlEyes on 01.14.13 at 10:59 pm

So, Garth, will you ask Brad and Sherry why they advised to buy & hold but did not take their own advice? I think there is no harm in getting them to disclose publicly.

#27 Inglorious Investor on 01.14.13 at 11:01 pm

#3 Edmonton to Halifax on 01.14.13 at 10:08 pm

Thanks for the link.

Let’s take stock: The United States has cheaper labor [sic], cheaper real estate, and cheaper energy. Is it possible that this disparity between neighbours can last long? I don’t thinks so.

‘Rich’ Western nations are adjusting to a new global economic reality of relatively less abundant resources, distributed amongst a larger population of consumers, and produced by fewer humans and more machines. On the road to the new reality, Canada is sucking America’s exhaust.

I’m not saying the new reality is a good thing (at least in the short term). And America has massive issues. In fact, for most of us the new reality means a lower standard of living. But far too many Canadians are in denial. We have overpriced properties, overpaid civil servants, and oversexed financial bloggers.

Oh say, can’t you see?…

#28 Dr Wayne's pager on 01.14.13 at 11:05 pm

Dr Wayne…..calling Dr Wayne…code blue…..realtors and mortgage brokers in sphincter arrest.

PS…actually…… ignore…. forget it…a$$hole

#29 EIT on 01.14.13 at 11:05 pm

Sometimes people are so legendarily awesome, they don’t need to worry about financial decisions.

I love the Kool-Aid… bLiciousness…

#30 Ralph Cramdown on 01.14.13 at 11:06 pm

Yield Examples

Strip Coupons
Coupon Ontario
13 Jul 2023 Price: 102.60 Yield: 8.253%

Government of Canada Bonds 8%
June 1, 2023 Price: 102.60 Yield 7.63%

GICs
1 Year Annual 4.45%

Treasury Bills
1 Year 4.217%

All yields are calculated semi-annually. Prices and yields are quoted as of August 22, 1996.

Boomers will dive into the bond market? There’s going to be a lot more quadriplegics given the depth of the yield pool these days. “I get howmuchamonth on my $600k?” they’ll ask.

#31 Rishu on 01.14.13 at 11:08 pm

RE: #17 AK
“FFUUURRRRSST! And I was only refreshing for 2 hours.”

And you came in ninth. What the hell happened?
You also said that you were leaving this blog.

====

My pimped 6 core computer with the best, home internet solution money can buy, refreshes faster .

RE: #23 Smoking Man
Bottom line kids are fkd, the machine has you in the cross hairs . Self employment your only salvation and that’s getting harder, grow and sell weed .

A huge crop just once, then call Garth to invest your loot.

:)

=====

Or join the Canadian Forces, that’s how I got my degree paid for. Making a decent wage and working towards a solid pension to boot.

That’s if I don’t die in the next 19 years… Oh god Iran, don’t start WW3 on me… (26 years old, 6 years in so far. Can retire at 25 years of service.)

BTW Smoking man, I was holding a sign with your name on it when Garth came to Toronto. Guess you didn’t see me. Wanted to chat with you and benefit from some of your life experience.

#32 Ford Prefect on 01.14.13 at 11:08 pm

#21 – Not First.

Your comment has some validity. However you missed “home (farm).” Farm generates income, taxes are absurdly low and cost of living is virtually nil – food, shelter, heat etc. at very low cost. In addition farm would probably sell very rapidly at around 900k – located on boundary of fast growing urban area (at least it was fast growing until recent real estate collapse).

#33 Ydnew on 01.14.13 at 11:09 pm

Couldn’t figure out why the green bank was sending me a credit card statement as it is rarely used. Turns out it was to advise me of “important changes” to their credit cards effective April 1:
Interest on purchases will remain at 19.99% pa, however the interest on cash advances will increase to 22.99%. Should you miss a payment the annual interest rates will increase by 5% to 24.99% and 27.99% respectively.
In addition, should you be daft enough to use one of those promotional cheques they send you to transfer balances from another card, they will charge you 1% for the privilege!
Holy cow!

…………….and if you put your money in a savings account you get what? 1%?

Scary!

#34 not 1st on 01.14.13 at 11:10 pm

Garth, for your eddifice;

ETFs are made up of a basket of stocks or other ETFs. They are synonymous so when you recommend ETFs thats a tacit acknowledgement that stocks are OK, just bundled up for diversification.

And to prove my other point;

Buy FIE (canadian banking ETF) share price $6.67, monthly dividend 4cents (7% yield).

$1.8M / $6.67 = 270,000 shares x 0.04 cents = $10,800/month or $130,000 per year.

I don’t consider that a golden lifestyle. Most families I know are striving to earn a couple hundred thousand a year to stay ahead of the game.

Nobody would put a large portfolio in one ETF. And what the hell is “eddifice”? — Garth

#35 noise on 01.14.13 at 11:10 pm

December was dismal for realtors on Vancouver Island north of Victoria. Sales were cut in half from November and down over 25% from last December. Average prices are still flat though – only down $5000 from the peak.

#36 Ralph Cramdown on 01.14.13 at 11:11 pm

#21 not 1st — 1.8M will only throw off about $100k a year in dividend income. Thats not a lot of money in this day and age especially if you are raising a family.

It’s a lot of money, especially considering the favourable tax treatment. How much money do YOU think YOU need in order to live off the income with enough left over to reinvest to keep up with inflation?

#37 Hoof - Hearted on 01.14.13 at 11:16 pm

Listening to internet radio from the U.S.

One host made a very succinct and poignant point.

He was talking about generations..and in general ..until recently…successive generations have done better than the previous ones.

In essence, the Post Boomer generation/s will NEVER have the the same progression as their parents, the continuity is now toast.

IMHO, he is spot on.

#38 };-) aka Devil's Advocate on 01.14.13 at 11:20 pm

#221 AACI Okanagan on 01.14.13 at 9:54 pm

We don’t get asked that, only CHMC/Genworth and lawyers acting on behalf of banks ask for a 30 day marketing period. USPAP (Uniform Standards of Professional Appraisal Practice ) requires an opinion of exposure time, not marketing time, when the purpose of the appraisal is to estimate market value. There is a difference between exposure time and marketing time.

Interesting.

I understand your reluctance to answer but, now that we have established that you are aware of the practice of asking for such prices, what, in your opinion, would be the difference between a 30 day sale price and that which the seller was willing to wait 90 days to achieve?

And I am confused and curious what exactly, in your opinion and/or that of your profession, is the deference between ‘exposure time’ and ‘marketing time’?

#39 Frank on 01.14.13 at 11:22 pm

Re. Canaccord… They did not close all of thoses offices because of Canadians debt levels… They closed the offices because of all their “Gold Pennies Stocks” have gone up in smokes! :)

#40 Comrade-conrad on 01.14.13 at 11:23 pm

Hi GarTh

Thanks for keeping the light of truth on for all,of us.

My question is where to invest? I will have $500-$1000 to invest monthly come March.

Should I open a TFSA for me and my wife? Or just me? Our marriage has been up and down over the last few years. Or jsust for myself? I have an agreement what is mine is mine and what is hers is hers.

Fill that with perferred stocks? REITs? Where can I get some more info on where to put the money. I am 39 in 9 days just out of bankruptcy last year and need to make hay while I can. I have nothing, no investments, nothing on the balance sheet.

Thanks

Conrad.

#41 MrHulot on 01.14.13 at 11:26 pm

I don’t know Garth. I am having my doubts about selling my house in West Van last year:

This house, basically a knockdown, listed today at 1.25 M and sold for 1.4 M, without even getting a chance to publish a picture.

1376 Jefferson Avenue, West Vancouver, BC V7T 2B2

#42 Inglorious Investor on 01.14.13 at 11:26 pm

#24 Network Admin on 01.14.13 at 10:57 pm

It generally does not make much sense to pay off debt with excess cash when real interest rates are near zero. Better to put that money to work where it can generate a nice yield.

However, when you compare investing in RE vs securities, you have to look at the whole picture. The way to make real money with any investment is with leverage. But buying securities on margin is highly risky and can ruin you quickly if you don’t know what you are doing. But very high leverage is routinely used to purchase properties. Also, inflation works for you when you have a mortgage because it destroys the value of the principle over time. Also, investing in an income property allows you to deduct mortgage interest. So, in short, investing in RE, specifically income properties, allows taxes and inflation to work for you rather than against you. Plus, of course, you get the income. However, it’s better to invest in RE when inflation is high and property values are rising. I’m not saying RE is always better. Just that you need to look at the whole picture. And at the quality of the specific investment you are considering, etc, etc…

#43 Ogopogo on 01.14.13 at 11:30 pm

#20 not 1st on 01.14.13 at 10:52 pm
#12 Ford Prefect

With all due respect, 1.8M will only throw off about $100k a year in dividend income. Thats not a lot of money in this day and age especially if you are raising a family.

OMG. — Garth

Dude, you think Ford is raising a family at 66? I know Anthony Quinn had a kid at 81, but c’mon!

#44 furst on 01.14.13 at 11:33 pm

#17 AK on 01.14.13 at 10:36 pm

And you came in ninth. What the hell happened?
You also said that you were leaving this blog.

Listen big slick, I’m sticking around because of the outpouring of love and support I received when saying I was going to leave. Look back at the post following my initial decision and you’ll understand. When you have a huge following like I do, you can’t just leave them. It’s what us celebrities must do. Also, it didn’t hurt when Garth invited me to his house for dinner and drinks to convince me to stay. That sorta helped too.

#45 Herb on 01.14.13 at 11:46 pm

Yea, though Garth lead us through the Valley of the Shadow of Death,
we shall fear no evil,
because Garth is the meanest sonovabitch financial advisor in the valley.
(Wth a nod to the Vietnam vets who first aborted this psalm.)

#46 The Man From Nantucket on 01.14.13 at 11:46 pm

#24 Network Admin on 01.14.13 at 10:57 pm
Does it (investing vs. paying down a mortgage) (make sense)?

It does to me.

Not sure why it doesn’t to more folks, but whatever……enough to worry about on my own, thks!

#47 martin9999 on 01.14.13 at 11:50 pm

Garth dude u forgeting thebigest fear of the world.debt ceiling issue

#48 Smoking Man on 01.14.13 at 11:50 pm

#31 Rishu on 01.14.13 at 11:08 pm

Sorry man , I was in the bar most of the night. came up to say hi to Garth at the end, didn’t see your sign…

my life’s experiences are not important.
we are told there is a pot of gold on top of the mountain.

we put our boots on and attack the mountain….that is the fun…the gold means nothing, in the end we all decompose weather we have a billion or nothing..

the sad thing about today….very few want to climb, content to serve the drinks at base camp

#49 OK Professor on 01.14.13 at 11:51 pm

I have been following your pathetic blog for a while and have been renting here in the Okanagan Valley since moving 18 months ago. I’ve been waiting patiently for real estate prices to fall while stashing money away for an eventual down payment. Thanks to your advice and insight, I hope to be able to purchase land in the next 3-5 years at a considerably reduced price and build a small home for my retirement years.

My only complaint: take it easy on hookers; it’s an honourable, yet misunderstood, profession…

#50 The Man From Nantucket on 01.14.13 at 11:52 pm

#30 Ralph Cramdown on 01.14.13 at 11:06 pm
Yield Examples (from 1996)

Love it.

Reminds me of the first one of Garth’s books I read. Back then, ploughing a couple hundred per month into savings bonds held in an RRSP had you on track to be a millionaire in like 35 years!

Instead, most of us bought bigger houses.

OOps!

#51 Inglorious Investor on 01.14.13 at 11:54 pm

I am being extreme on purpose here, but I have to ask: Is the stock market dying?

Have you noticed the number of public companies planning to go private lately? This is pure conjecture, and there may be other good reasons for it, but could it be that the revulsion of retail investors, plus the very low volumes in the markets these days are prompting some companies to question the value of a public listing? Looks like some are figuring that there are better ways to raise capital. Just wondering.

#52 Marko Juras on 01.14.13 at 11:54 pm

DELETED

#53 ozy - In response to #1 on 01.14.13 at 11:56 pm

In response to #1

Emmigration (out of Canada man) is the answer for de-opportunized generation Y.

Time will tell.

#54 Inglorious Investor on 01.14.13 at 11:58 pm

#8 Canadian Watchdog on 01.14.13 at 10:16 pm

Who in their right mind would want gold bullion when the very institutions who control the world’s money hoard it by the ton? Oh, wait…

…after they hoard US dollars. — Garth

#55 Holy crap where's the Tylenol on 01.15.13 at 12:01 am

I have a feeling boomers will either follow smoking mans ideas of illicit pharmaceuticals or what I plan to do Iftar investments go south, slowly sell my body parts! Only the ones I don’t use or need! Starting with my brain!!!!!!!!

#56 Inglorious Investor on 01.15.13 at 12:01 am

“…after they hoard US dollars. — Garth”

So have some of both.

They have more dollars. It’s money, after all. — Garth

#57 The Man From Nantucket on 01.15.13 at 12:03 am

…………..however the interest on cash advances will increase to 22.99%. Should you miss a payment the annual interest rates will increase by 5% to 24.99% and 27.99% respectively……..

Saw some similar terms on the last couple of debt instrument offers I looked at.

We’ll give you this great rate, but Gawd help you if you miss two payments because if you do, she’s goin’ up by like 40% !!!!

#58 cowtown cowboy on 01.15.13 at 12:06 am

RISHU..

You should probably keep your whinging to yourself. I am from the original have-not generation…Gen-X. We have been constantly getting screwed, but here’s a newsflash: Nobody owes you a goddamn thing.

I graduated in 1991 (in the middle of recession) w/ a degree in Economics, my choices of jobs were selling photocopiers or possibly working for a broker for 18k/year. I worked in the plants around the industrial heartland for awhile making around 40-50k, and realized I couldn’t do that for very long without developing a few serious addiction issues….moved to Tokyo and taught English for a couple of years and came back to Canada in 1998 and jumped on the Microsoft Engineering train. First job in Edmonton was for 36/yr, quit right away and took a job in Germany consulting for some Nato and US bases in IT. I’ve been trying to get out of IT ever since but the money as finally gotten better, although now you are pretty much forced to incorporate and run your own biz, at the peril of CRA slapping a hefty tax bill on you if they deem that you’re a personal service business and not a legitimate corp..but I digress.

Moved to Cowtown in 99 and have been here since, mostly in and out of O&G’s and decided if I wanted the career that I did, I would need to upgrade, so I went back to grad school in my 40’s while working fulltime with 2 little kids and just finished my MBA. So with the wife and I both consulting we can gross about 300k if we keep busy.

We weren’t sure if we would get a house as we were paying a lot in rent and couldn’t save much as we weren’t making much 10 years ago. After getting in a serious car crash in Kelowna our settlements gave us a downpayment along with the home buyers plan, we bought a semi, paid about 190k, in 2002, saw it go to about 300 by 2005 so we sold and bought a bigger detached for 390k which has just been appraised at about 575k, and likely won’t move much either way…at least I hope.

My point is, the wife and spent our 20’s hanging out, seeing the world, drinking beers and not paying much attention to the future. By 30 we started getting a bit more serious and have since managed to save about 350k plus the house, I’ve lost big in the market(selling Nortel at 120 and then buying it back comes to mind…and won big a few times) but overall have come close to the indices. Garth’s advice is golden, follow it. There are few shortcuts, just time and effort.

So stop bitching and complaining that life is so unfair, get off your ass and do something about it.

#59 ComicSans on 01.15.13 at 12:08 am

Hot, young women who won’t stop following me…you’re kidding us, right Garth? Right? Right, Garth?? Garth???

#60 Inglorious Investor on 01.15.13 at 12:11 am

“They have more dollars. It’s money, after all. — Garth”

Yeah, yeah… we’ve been there, done that. I’ll leave this one for others today––if they so choose to take it on.

#61 martin9999 on 01.15.13 at 12:12 am

#21not 1st on 01.14.13 at 10:52 pm
#12 Ford Prefect

With all due respect, 1.8M will only throw off about $100k a year in dividend income. Thats not a lot of money in this day and age especially if you are raising a family.
—–

holly shit men, are you for real dude?

#62 FYI on 01.15.13 at 12:18 am

Only in Edmonton

Builder dropped 25K. Listed 499K couple of months ago

http://www.lincolnberg.com/quick_possession/detail/Walker-Lakes-Station/The-Emerson/523-034

#63 DR. WAYNE on 01.15.13 at 12:23 am

#9 furst on 01.14.13 at 10:21 pm

FFUUURRRRSST! And I was only refreshing for 2 hours. So take that Garth!

GARTH QUOTE : “I indulge a lot here. Idiots who refresh their screens for three hours so they can type ‘First!’ Metalheads and conspiracists.”

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

It would appears Mr. Turner and I agree, regarding the identity of those whose life’s goal forces them to achieve the ‘FIRST’ designation. I prefer to call them “a$$holes” … Mr. Turner, the more polite individual, chooses the also appropriate descriptive term “idiots’.

#64 MC on 01.15.13 at 12:28 am

on bond funds…

http://finance.fortune.cnn.com/2013/01/14/bond-fund-time-bomb/

for BTTF fans…

http://www.youtube.com/watch?v=ttSClPcM2Jk

#65 Grim Reaper/Crypt Speculator on 01.15.13 at 12:34 am

WTF is a Marko Juras?

Is this a test re syllabic combinations and permutations?

#66 will on 01.15.13 at 12:35 am

Thanx so much Garth for your steady hand on the personal finance intellectual helm. Helmsman Garth! The dividends keep pouring in. More today, more tomorrow. They just keep pouring in.

#67 Victor V on 01.15.13 at 12:39 am

http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/portrait-of-a-woman-who-owes-too-much/article7236147/

After eight years and three degrees, Polly finds herself with a debt load way out of proportion to her $63,000 annual salary. Month after month, she sinks deeper in the hole by spending far more than she earns.

Polly, who is 34 and lives in Toronto, found a good job last year as a social worker. If she stays with the same employer for the next 31 years, she will retire with a defined benefit pension plan that will pay her $49,000 a year. But that’s a long way off.

“I am drowning in student debt,” Polly writes in an e-mail. Exacerbating the problem is the steep monthly payment Polly is making on a credit union loan for more than $50,000 for which her parents co-signed, putting up their home as collateral. She has another $50,000-plus in student loans on which she is paying interest only, plus about $4,000 in credit card debt.

#68 a prairie dawg on 01.15.13 at 12:48 am

#9 furst

FFUUURRRRSST! And I was only refreshing for 2 hours.

– — –

But if that 2 hours was used up months ago, it’s not very refreshing anymore.

#69 Fed-up on 01.15.13 at 12:49 am

#63 DR. WAYNE

It would appears Mr. Turner and I agree, regarding the identity of those whose life’s goal forces them to achieve the ‘FIRST’ designation. I prefer to call them “a$$holes” … Mr. Turner, the more polite individual, chooses the also appropriate descriptive term “idiots’.
_____________________________________________________

Ouch! He’s gotcha there Furrrrrster :p

And Garth must have double doors at his house for you to fit that melon of yours through!
Kidding bro, dig the amusing poems.

#70 Retired Boomer - WI on 01.15.13 at 12:59 am

Hoof-Hearted or, who phrated?

There is NO reason this generation (boomers) did not exceed the silent generation, or that the Gen Xer’s exceed Boomers, or the Y’s exceed the Gen Xer’s, or the millennials should not do even better than ALL that came before them.

In my case my father born 1910, my mother 1915. A second marriage for both, both childless prior, she at 36 he at 41c became parents in 1951. Both being children of the depression era hated credit, debt, never bought anything they could not pay for up front. Started, ran, and sold two businesses. Worked their asses off because they loved it.
Retired at 55 both of them, then later got menial jobs because they wanted something to do, not for sustenance.

Mom died at 59. Dad sold everything, said here’s your inheritance $10,000 US. He passed at 75. I took and invested, spent, the 10 grand. Today, at 61, I’m retired home and cars paid for, net worth close to 1 mil now.

Do my own investing stuff -would not want to blame a Garth type for not making it grow as well as I think I can.

Similar to Smoking Man in that I distrust education, but sans the bad spelling (usually). Besides, I don’t like booze as well. DO enjoy the music though, and spent $560 today on vintage 45’s of Doo Wop. WHY? Because I CAN, and $500 is nothing but a real nice night out!!

It really is not bullshit folks, you know what needs to be done. Get of your lazy fat ass and MAKE it happen!!

#71 Fear no evil — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate « The Affluent Boomer™ on 01.15.13 at 1:01 am

[...] via Fear no evil — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. [...]

#72 Richard and Zeus on 01.15.13 at 1:03 am

Hope your all happy paying insane salaries and forever pensions to useless pencil pushing govt workers. Forget MPs. Couple hundred? How about the 500 000 pencil pushers in muni, provincial and federal govts. What a joke we are…….I’m ashamed to be Cdn sometimes.

#73 Jounce on 01.15.13 at 1:05 am

Liquid assets are a full case of unopened beer.

#74 bob on 01.15.13 at 1:08 am

Garth – it’s not that 7% is impossible, but I just don’t think it realistic for the masses.

Take a look at the average “Balanced” Mutual Fund. The 10 year average on those are NOT 7%… so if so many managers can’t do it, what makes you think the average person who follows your blog can?

Therefore, paying off mortgage debt, in my opinion, is still one of the best bets. Thoughts?

#75 Cowpie on 01.15.13 at 1:12 am

#34 not 1st on 01.14.13 at 11:10 pm
“Garth, for your eddifice;”
______________________________________________

Hmm. I believe I may be able to translate the use of the verb in this particular context:

“eddifice: to edj-u-micate, as in receive an edjumication. To gain understanding and enlightenment of a pastoral nature.”

However, if you would like to have an actual “eddifice” built in your honour, we could all pass the hat. By 2019, invested wisely, there should be enough funds to get a nice little monument somewhere…I’m sure someone has some spare PM sitting around that we could use to gilt it…

#76 Cowpie on 01.15.13 at 1:22 am

Daystar – where ARE you?

Come back…we miss you.

#77 Smoking Man's Old Man on 01.15.13 at 1:23 am

Did some reading on the “tulip bubble” of the 1600s. It is amazing the it reached a point where bulbs were exchanging hand for 10X a skilled craftsman annual wages.
It’s fascinating how the human mind is so evolved and yet so apparently helpless when the next bubble presents itself.

#78 deltav123 on 01.15.13 at 1:28 am

It’s incredible to me that people don’t understand that money can be made in both up and down markets. Somehow if markets go down there’s no money to be made and the average Joe/Jill runs pulls all their funds out. Lift your heads up, read some books on trading and pull it together. There are opportunities to exponentially increase savings and wealth with a little hard work. Yes there are risks, but money management practices and careful evaluation of stock portfolio correlation can go a long way in mitigating them. Take SMGO for example , it rose 17.48% today. When’s the last time your house did that? Oh right, it didn’t. Not even at the apex of egregiously advancing housing prices.

#79 TEMPLE on 01.15.13 at 1:46 am

#21 not 1st on 01.14.13 at 10:52 pm

With all due respect, 1.8M will only throw off about $100k a year in dividend income.

Yeah, and huge portion of that dividend income will be tax free if it is a couple’s only income. You are also forgetting about the poopload of capital gains that money should make on top of the dividend payouts.

TEMPLE

#80 Nostradamus Le Mad Vlad on 01.15.13 at 1:50 am

-
“. . . especially in a city with the economy of a glorified car wash, . . .” — Ah yes, a service-based economy is where we are headed, so it makes sense to trash debt.

On CHBC news tonight, the boat show was loaded with people who were thinking or looking at buying. If one plans to live on a boat and doesn’t need a house, fine but why have both? That’s greed, pure and simple.

“We have a retirement crisis brewing today simply because most people made the wrong choices with their money. Meanwhile financial ignorance is on daily display on this pathetic blog, as the disbelievers trash equity markets, economic growth, leading indicators or the very fact you can earn more than 3% without being a hooker or a thief.”

Along with those folks who are waiting for their numbers to come up on the various lottos, but if they would put $100 / week into growth ETFs for the next couple of decades, they would be handsomely rewarded at retirement time, so Freedom 55 still exists if done properly, but it takes discipline. For example, see #7 Heddok and #12 Ford Prefect’s posts — very nice and well done!

#51 Inglorious Investor — “Have you noticed the number of public companies planning to go private lately?”

Yes, and here’s another one — Dell in talks.
*
HMV – Going under? While Housing set to rise; UK Adios, Triple A; Cold Snap to cost more in heating bills. It is clear why gas and electric bills started rising toward the end of 2012; Pension Potty Possibly the govt. doesn’t have the money to pay, as they’re involved in too many wars (not incl. the Falklands); United laying off, and The Slow Death of the US worker, but Bring well-paid jobs back and we might see something like this; The Petrodollar Scam; Greedaholics Yes, they exist; Seismic Change in consumer behavior; Sales down of toilet paper and other things; Interactive Chart of job gains and losses; Miscommunication No one knows what anyone else is doing anymore.
*
Hacker Attack covering all makes and models. Oracle has put out a new script for Java; Who killed Aaron Swartz? and this; Impeachment if Obomba uses EO to bring in gun control? And This is what govts. don’t want Headline (and story) give a good idea of the way life is headed, and Gun Confiscation – Last refuge of the tyrant; Tinnitus Unorthodox and (as yet) unproven new treatment; Skilled Artist Only paints while sleeping; Typical Built by Opel, Vauxhall or Ford? Poser This panda is a pro; Sunlight Five different variations; Space This boomer is still chugging along; Dark Grapes Quite nice.

#81 Munch on 01.15.13 at 2:05 am

Post # Sixty Eight??? [crossing fingers]

#82 TEMPLE on 01.15.13 at 2:07 am

That nobody needs to buy volatile stocks or high-rate mutual funds in order to double their money every seven years.

That isn’t true. Doubling your money in 7 years needs about a 10% annual return, and that doesn’t even take into account the taxes and fees. The only place to get that kind of return over the long term is through the stock market.

I don’t know where you get the idea that a portfolio of stocks must be more volatile than an ETF. That just isn’t true. I know you are a proponent of massive diversification, but it doesn’t take as many stocks as you think it does to match the volatility of a given index. Once freed from the drag of ETF fees, and with the benefit of being able to pick certain types of stocks, beating the index is a relatively straightforward matter.

I agree with you that most people are probably not of a temperament to pick their own stocks, but why don’t more financial advisors do it for them? Properly done, buying stocks would either reduce client fees or increase your profit margins. Seems like a win-win to me.

TEMPLE

#83 Alberta Ed on 01.15.13 at 2:09 am

They’re still throwing up ridiculously priced condos in picturesque Sidney-By-The-Sea (Home of the Newly Wed and Nearly Dead), 20 minutes north of Victoria. Prices range from $589k for a 2 BR unit (no view and below the tsunami line), right across from a soon-to-be multiple low income subsidized condo development (which pisses off the neighbours), to astronomical $889,000 in dank Brentwood, right next to the ferry Mill Bay ferry terminal. Judging by the dark windows and mouldering FOR SALE signs, they haven’t attracted any Greater Fools yet.

#84 Djb on 01.15.13 at 2:22 am

#41 MrHulot

Sounds to me that the lot you addressed is bulldozer bait.

The buyer is a spec builder and the realtor listed it to move.

Builders are a special breed as they need to keep the ball rolling and their trusted crew working.

Once they stop they lose their crew to other jobs.

As a mortgage broker I have financed a lot of these guys and know how the game is played.

#85 Djb on 01.15.13 at 2:23 am

BTW Garth I need to shout out an Amen for tonights posting.

#86 Jane24 on 01.15.13 at 2:24 am

It doesn’t have to be buy a home or invest. Do a bit of both. Pay-off a comfortable modest home so you sleep well at night and then invest.

The problem with my fellow boomers is that they don’t keep the modest paid for house but are continuing up the housing ladder even after the kids have left home. They are trophy hunting into disaster.

#87 lucyj on 01.15.13 at 2:28 am

Our situation is very similar to ford perfect. Live on acerage with large house, paid for, comfortable retirement income, life is good. I feel sorry for the people that have followed the crowd, some with good intentions some just plain gullible. If you buy what you truly like it does not matter if the price drops, you like it anyways. (kin of like Harleys and Hummers)

#88 JuliaS on 01.15.13 at 2:41 am

#37 Hoof

Each generation has been doing worse than the previous one. The value of money has been eroding while debt took place of real income. One breadwinner became 2. Tuition paid out of pocket became student loan. Money saved up for purchases gave way to credit cards and installment plans. This generation has it worse than the one before it. The boomers had it worse than those before WW2. Those after the Great Depression had it worse than those before the Great Depression.

Technological innovation made the world better? Sure it did, but no thanks to inflation. It happened in spite of deficit spending and not because of it. In fact, it helped banks rob the rest of us 1000x faster than it would otherwise be possible. Technology is so great, they don’t even have to get up from their seats anymore in order to steal. Swinging a whip was too much effort, so they’ve invented a self-whipping slave, a self-herding kind of sheep, a modern consumer.

#89 Tom from Mississauga on 01.15.13 at 2:45 am

My prepetual preferreds have been drifting up in price lately. The market seems to think rates will stay low, whatever that means. Or is this dumb money getting in?

#90 Freedom First on 01.15.13 at 2:55 am

Really enjoyed your post today Garth!

Fear and misinformation…..very good! Reminds me that personally, when I see people who are going through difficult financial times, which is often a consequence of their past decisions, I take no satisfaction from seeing anyone suffer. Life can be hard enough for anybody, for me to indulge in such a mean attitude. I try to help people to not make poor decisions whenever possible, and to not judge the “throwing away my money on rent” mentality, of people with no money or assets. Garth, your blog, and never ending helping of people, even though many don’t take your advice, quite a few do, is an inspiration to me, as I can go out in the world, help who I can, and simply shrug my shoulders, with an attitude of, “well, I tried”. However, as with you, the people who have come to thank me later, has been very rewarding. Knowing this, I believe you must be happy and elated with the number of people you have helped save from financial ruin. That being said, even though I was doing well before starting to read your blog, you have helped me in more ways than I can tell you, with my favorite way being your wit and humor. Thank you Garth. Sincerely, Freedom First.

#91 Victoria Tea Party on 01.15.13 at 3:00 am

SWIRLING DOWN THE TOILET BOWL…

Now, for an update into what’s shakin’ and signs of things to come…

A reminder of Garth’s thematic comment: “But those who truck in fear and misinformation are unwelcome. Especially now, when we have a personal financial crisis brewing.”

“PERSONAL FINANCIAL CRISIS:”

Yepper, Sir Garth of Interesting Times Already.
It is a crisis and our housing bubble is making the rounds so to speak, dirty family laundry and so on.

Many elements must be factored into what constitutes a “personal financial crisis”, mainly among them, external influences over which Canadians have ZERO CONTROL.

In that regard, perhaps some of you missed Dr. Housing Bubble’s’ latest take on Canada’s real estate market:

“…In 2000, the average sales price of a Toronto home was roughly $240,000. Today it is up to $465,000. Canadian cities like Vancouver and Toronto have seen absolutely no correction and are benefitting from hot money from abroad (Asia primarily).

“…Those thinking that there are no more housing bubbles simply need to look at a few other countries but also at more specific cities where flippers are back in force. Those thinking that global independent investors are buying up these securities are poorly mistaken. It is obvious that central banks are eating this stuff up but the question is, how long can this go on for?”

ALSO…REGULAR US BANKS ARE HEADING TO BUSTLAND TOO…

On Monday JPMorgan bank announced the layoffs of nearly 600 cipher clerks in their New York HQ. Those poor bastards used to arrange for the orderly foreclosures of homes/properties that their bank (some time ago in the heady US RE bubble days) held mortgages against.

WHAT THIS MEANS

Is that JP Morgan is giving up the fight and will simply allow the market to vulch its way through their ruined inventories and see what pennies come back. It also means another whingeing, bleating bank bailout operetta coming soon to the big theatre in DC.

AND ANOTHER FACTOR IN THIS DEBACLE

Over the last year large corporations have been bidding up US real estate prices by buying up tracts upon tracts of suburbs only to rent them out to the former owners.
Such actions distort pricing power for ordinary folks leaving them unable to feel good about buying now.

SO

While the great US real estate unwind continues, and Canadians are just beginning their Disneyland North version of same (bring the gravol!)

WE REVISIT THE MAIN US PROBLEM (AND THIS AFFECTS US ALL)…DEBT!

America’s spending habits are getting worse and worse by the day.

An acquaintance of mine, a frequent traveller to the US, reported last week that Americans are spending like crazy, using credit cards and other debt instruments. They’ve lost their equity and their jobs but STILL they can’t keep it in their pants (wallets).

Which dove-tails beautifully into what President Obama was saying this date, that essentially he wants open-ended debt accumulation, to help cure the US’s economic ills!

He chided the Republicans for wanting to cut taxes and spending. But we all know the Reps will cave and the debt train will move into serious high gear. Oh, it’s already there!

Even the US’s central banker is on side!

“ANN ARBOR, Michigan (Reuters) – Federal Reserve Chairman Ben Bernanke on Monday urged U.S. lawmakers to lift the country’s borrowing limit to avoid a potentially disastrous debt default…Likening Congress to a family arguing that it can improve its credit rating by deciding not to pay its credit card bill, Bernanke said that raising the legal borrowing limit was not the same as authorizing new government spending.”

THIS BOTHERS SOME YANKS INCLUDING

Market Ticker’s Karl Denninger; his take on the state of the USA’s horrendous financial crisis:

…”The United States Congress and President are (a) dysfunctional, paranoid schizophrenic family…
When you live in a dysfunctional environment in which everyone lies on a daily basis and is addicted to various things they buy with borrowed money…the only way to return to sanity is for the credit card to get cut up…so the bank stamps a great big DEADBEAT across the statement and declines further charges!…Yeah, it will suck. But it will suck less to do this than it will have our nation implode, and that’s exactly where we’re headed if we don’t cut this crap out…”

UNICORNLAND

Meanwhile back in Canada, our deluded real estate industry hangs on to unravelling threads of fast-vanishing hope that by March everything will be good.

By March everything will be crappy, folks. You have no idea. And by June? Hold on to what you’ve still got.

That is if you’ve still got it.

At least in Victoria you can get your car washed!

#92 M on 01.15.13 at 3:06 am

Just heard an interview on CBC with a New York Times journalist who wrote an article about “Zombie Titles”. These aren’t post apocolyptic graphic novels; these are property land titles that have come back to haunt US homeowners who walked away from their properties when the banks notificed them of foreclosures and pending sales. It turns out that after notifying some owners of the foreclosure and pending sales of their properties, the banks didn’t bother going through with the sale procedure. Instead, because house values had dropped so low, thus making the whole process unprofitable, some banks didn’t bother with the sales, thus leaving the owners still on title. The unsuspecting owners moved on with their lives, but are now being “haunted” by municipalities for arrears in taxes, building code violations and arrears in utilitiy charges. These poor folks think they’ve moved on and closed a very sad chapter in their lives, only to find out years later that the bank didn’t even bother to sell their house and it would have been better to stick it out while remaining in default under their mortgage. This is just so sad and the banks just keep screwing and rescrewing these poor folks.

#93 happy renter on 01.15.13 at 3:11 am

If you want to invest in the stock market choose 5 stocks from the dow 30.Watch them like a hawk and use the slow stochastics.Buy when there above 30% and sell over 80%.You can ride the stock over 80% but have a stop loss under resistance.You can short the stock using the same method the other way.Use charting and buy and sell at support and resistance.Watch the 50 day cross over the 200 for stock direction.Philsgang.com is a great start that worked for me fot trading.

#94 Mic D'angelo on 01.15.13 at 3:21 am

The reason there is a retirement crisis brewing today is people lived beyond their means not by say 5%,10% but by 65% of their annual income according to the latest surveys.The debt needed to buy houses, cars people did not need and other excessive spending could of earned at least an average 5.50% in government bonds over the last 20 years. An example, if a husband and wife both saved $650 per month which is $1,300 per month for both from 1993 until today it would be worth in $543,945.76 in their RRSP’s. If this money was invested earning 3.60% in government bonds laddered from 12 to 24 years over say this period it would make $19,582.05 in interest per year. A typical boomer couple making $70,000 income just before retirement getting C.P.P. and old age security $2,500 per month together plus $1,631.83 in interest =$4,131.83 per month total income. They would not be in debt with a big house they did not need and have little income and if anysavings to show for. Remember the $1,300 per month includes the refund they would get from CRA which is $375 per month so really they would have to save net $925 per month from both of them. This means $15 per day for each or $30 per couple a day in savings. People have to make retirement and saving key priorities in their lives and living within their means.

#95 Buy? Curious? on 01.15.13 at 3:39 am

Smoking Man, post 23, the greatest advice ever!

Grow marijuana, legalise it!

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

#96 hoser on 01.15.13 at 3:47 am

You seem to constantly repeat that you predict a “correction” NOT a “crash”. A correction of 10%-15% in some places and 40% in others, then followed by a slow melt. What is the difference? In my mind 40% then a slow melt constitutes a crash. It is very important that you explain this because every any comment that even mentions the word “crash” offends you to the very core. Why is this?

In Richmond BC we have already seen prices down 25%. It is likely that with the over-supply and few buyers in sight that prices may decline more. The prices are crashing even if you don’t like the word – if it walks like a duck….

#97 Having doubts? on 01.15.13 at 4:17 am

#41 MrHulot on 01.14.13 at 11:26 pm

I don’t know Garth. I am having my doubts about selling my house in West Van last year:

This house, basically a knockdown, listed today at 1.25 M and sold for 1.4 M, without even getting a chance to publish a picture.

1376 Jefferson Avenue, West Vancouver, BC V7T 2B2

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

Assessed value of 1376 Jefferson: $1,466,400

Did you sell your house last year for $66,000 below assessed value?

#98 Guy1 on 01.15.13 at 4:36 am

Excellent blog entry… There is so much talent in Canada, but as a nation we are all so highly focused on our own specialities at the expense of having the sort of financial brilliance that you possess. Your blog has been such an important educational tool for those Canadians who’ve been blessed to find it. I don’t mean to be morbid, but have you considered instructing someone, in the case of your passing, to take over the blog? Moreover, when a new federal government inevitably comes to power (after those power elites who’ve ofiscated the truth are held to account for their actions by a disgruntled electorate), have you considered helping any new and hopefully more earnest/Canadian government (in the traditional sense of what it means to be Canadian) bring forth a national curriculum to educate, both young and old, about how to properly invest. It strikes me that your honesty needs to be more significantly infused into our national dialogue, albeit I would maintain that, as a matter of compassion, that we should do everything we can to continue a national pension program specifically for those who’ve, not out of their own doing (which is key) have been unable to financially succeed i.e., mental or physical disability, systemic displacements, or more commonly, a pathological deception cultivated by certain economic ‘leaders’ and ‘professionals’ resulting in a misguided populace.

#99 Buy? Curious? on 01.15.13 at 5:30 am

Marko Jurass, you have to say something pretty stupid to get deleted on this blog. Trust me, I know. You’ve now made a fool of yourself and you’ll be losing clients over the next few months. Though it would be interesting what your next career move will be. Please keep in touch.

Garth, ever hear the Aesop fable about the ant and the grasshopper? The Reader’s Digest (short version) is this, the ant spends all summer, slaving away, stock piling food for the winter while the grasshopper spends the summer having fun, not worried at all. Heck, the grasshopper even makes fun of him for working so hard! Then when winter hits and the ant is chilling at home, smoking some marijuana, the grasshopper knocks on his door, and apologises. Then the hard working ant lets him in.

Moral of the story? Relax. Chill out. Things will sort itself out in the end.

http://www.youtube.com/watch?v=pJAYsKjJtM4

#100 The real Kip on 01.15.13 at 6:54 am

“Once again we have a generation of 30 and 40-year-olds who eschew investing in liquid assets because they lust for real estate.”

One court case like, oh, say the one yesterday that aquitted the three ringleaders of the Nortel fiasco will do more to push young people to real estate than you think. I know you think it’s stupid but people don’t trust stocks, bonds, ETF’s, and whatever.

That’s why this blog is not for most people. They have you. — Garth

#101 Canuck Abroad on 01.15.13 at 7:23 am

Why was my post deleted?

To repeat, the “rule of 70″ means at 7% return you double you money in 10 years not 7.

No delete. — Garth

#102 Oak Bay Retired on 01.15.13 at 8:05 am

I have no idea who this Victoria realtor is, but I do know this – I figure my big house in what the realtors call this ‘executive, sought-after’ area lost 10% of its value last year. That’s about $200,000. During the same time my balanced portfolio (thank goodness I have one) earned 10%. For that I can thank my financial guy, who drives a Hummer and has a blog.

#103 House on 01.15.13 at 8:09 am

People just won’t take sound financial advice. The Prime Minister told them he was advising his mother to buy stocks in October 2008. They just didn’t listen.

#104 AK on 01.15.13 at 8:55 am

#44 furst on 01.14.13 at 11:33 pm

“When you have a huge following like I do, you can’t just leave them. It’s what us celebrities must do.”

I agree. You and DR. WAYNE are my favorite posters.

#105 Tim on 01.15.13 at 8:59 am

Ugh, this won’t end well for the boomers, but the next generation still has a hope if they get their act together. I’m 34 living in a modest mortgage free house with $180,000 in investments. It wasn’t that hard to do folks…just stop spending so much. Save first, then invest, and play with the leftover money.

#106 Mr. Lahey on 01.15.13 at 9:15 am

#44 Furst

“Listen big slick, I’m sticking around because of the outpouring of love and support I received when saying I was going to leave. Also, it didn’t hurt when Garth invited me to his house for dinner and drinks to convince me to stay. That sorta helped too.”

That’s the way to tell them Furst! You are hilarious in your ripostes. Don’t let the king of the a$$holes, Dr. Wayno or his sidekick AK keep you away. Keep ‘em coming Furst.

#107 TurnerNation on 01.15.13 at 9:34 am

Canaccord – widows and orphans.

http://www.stockwatch.com/News/Item.aspx?bid=Z-C:CF-2031583&symbol=CF&news_region=C

Canaccord seeks to adjourn retiree case

2013-01-14 14:47 ET – Street Wire

by Mike Caswell

Canaccord Genuity Corp. has asked the Supreme Court of British Columbia to adjourn a case in which the firm is being sued for putting retirees into overly risky options. Canaccord says it has recently discovered that the remaining plaintiff, Marlin Investments Inc., is controlled by a man very knowledgeable about misselling securities, Kenneth Marlin. He was a part owner of the Principal Group, an Edmonton trust company that collapsed in 1987, owing investors millions.

Given that one of the claims in the lawsuit is that Marlin “relied heavily” on advice provided by Canaccord, the firm says it needs more time to obtain documents about Mr. Marlin’s past. From what Canaccord has learned so far, Mr. Marlin headed Principal Group’s sales force and he was responsible for convincing investors to buy mutual funds and other products. “No-one was more informed about the issues of mis-selling securities than Mr. Marlin,” Canaccord says.

#108 AK on 01.15.13 at 9:36 am

#64 MC on 01.15.13 at 12:28 am

“on bond funds…”

Stick to Bond Funds that invest strictly in laddered bonds. No more than 5 years.

#109 jerry on 01.15.13 at 9:50 am

You still have to haggle!

From a National Post story on house bubbles, people wanting to buy a house are not necessarily going to see 25% off coupons arriving in the mail or bonus bucks!

You still have to research, line up a few you like, offer or move on.

#110 detalumis on 01.15.13 at 9:51 am

That’s a good one, poor seniors facing poverty, I like it. Until our country changes the entitlement system to use assets like they do in the U.K. and U.S.A. to pay for stuff like LTC we are sitting pretty. The retirement crisis doesn’t affect the boomer with property, it affects the taxpayers.

My retirement goal was to sell my little bungalow and move to a little T.O. condo. I now realize how stooopid that was. When I am 60 I will sign up for my town’s geared to income seniors apartment building, it’s the same size as those condos, so what if the waiting list is 5 years, at 65 I will be at the top of the list. Most seniors wait until say 80 to apply and die before they get there. I love the location it’s walking distance to downtown where the millionaires all live and shop, the chi-chi stores and the express train to Toronto.

Then I sell my bungalow to the property developers and have a cool bundle of cash. Assets are not counted for anything in geared-to-income housing when you are old so who cares what the money earns, stuff it under the bed. Hang out in Flo-ri-da all winter and let the young-uns support me.

That’s the scary part. What if a whole pile of people start to think just like me. Do we revamp all these entitlements and make you use your million dollars in assets before you can live off the taxpayers or no?

The elephant in the room is that we have some gold plated entitlement programs out there and a whole lot of people are going to sit back and take advantage of them and nobody has the political will to do anything.

I could easily cost the taxpayers at least 20K to 30K a year until the day I die with most of my assets intact. Sure we have a retirement crisis but guess who has the crisis, it won’t be the poor, pitiful me re-ti-ur-ee – what-a-country.

#111 Inglorious Investor on 01.15.13 at 9:53 am

Did someone mention Nortel?

So, the three amigos were found not guilty of fraud, eh?

I guess if it looks like a duck, quacks like a duck, swims like a duck, and waddles like a duck, unless it slaps you in the face with its bill and yells, “I’m a duck!”, it could be a pigeon.

#112 Westcdn on 01.15.13 at 9:56 am

I watched a bit of Obama’s speech on the debt ceiling yesterday. I tire easily of political grandstanding though it is an important part of getting elected and installing policies. I did catch part of where the US government may have to cut payments to various operations such as the military. I think it is always a bad idea to have the US military mad at you. I moved on quickly but fortunately there were others who didn’t. One pundit wrote that one item was conspicuous by its absence – interest payments on the national debt. Good news for the bankers, bad for the public. The markets basically shrugged as it will be business as usual.
I have been trying to get a handle on future interest rates. I thought reading some of Carney’s speeches might give me insight. I concentrated on the speeches given to parliament as I figured they had the best chance of being dumbed down. The Bank of Canada has been following a policy of managed 2% inflation since the 90’s. Currently, our economy has used up most of the slack caused by the 2008 recession. The B of C is greatly concerned about corporations not investing their cash as that will create economic growth. The B of C is also worried about misallocation of capital. An extract from a Carney speech – “Our economy cannot, however, depend indefinitely on debt-fuelled household expenditures, particularly in an environment of modest income growth. Notably, housing investment rose further in the first quarter, accounting for an unusually elevated share of the overall Canadian economy- june 21, 2012”
ZIRP (zero interest rate policy) is causing capital allocation and inflation problems. ZIRP therefore has limited shelf life. Interest rates in Canada are going up soon. How high will depend on inflation. The government knows how difficult it is to get the genie back in the bottle.
Seems to me that if big business is unwilling to invest, maybe we should make cheap money available to entrepreneurs. Yes, there would be hair brained schemes that go nowhere but that is one of the costs of innovations. I like the dismal science for an unknown reason. I am not Keynesian as I tend to resist top/down decision making. I am definitely more of the Austrian school of economic thought.
I found this fun video on the difference between Keynesian and Austrian school of thought. It is a bit long at 9 minutes and a musical to boot (it is the only way to make economics bearable). I think it is worth a watch.
http://youtu.be/GTQnarzmTOc

#113 robert james on 01.15.13 at 9:58 am

Here is some Okanagan slease at it`s finest.. http://www.castanet.net/edition/news-story-85852-1044-.htm#85852

#114 yadayada on 01.15.13 at 10:22 am

Most people do not have the value of their mortgage in cash to invest. The average down payment is less than 7% so with that kind of cash, what kind of investing can you do? With less than 100k, financial advisors are also out of the picture so without sound financial advice, I doubt the majority of people would have the resources or knowledge to do it alone.

#115 Dupcheck on 01.15.13 at 10:24 am

@ #34 not 1st

To people like you that call life a game should be connected to a PS3 remote and made to hit the up and down buttons until the ceiling falls off.

You should wake up and touch the ground with your feet again. Life is not a game, and 200K is a lot of money. Average families are living normally on 80K combined. Live within your means and live life instead of playing it.

#116 };-) aka Devil's Advocate on 01.15.13 at 10:37 am

For what it’s worth, and I know most of you will take exception and call it nothing more than me acting a shill, but, in our Kelowna market at least, things are moving. The year appears to be getting off to an early start. I’m not talking about an influx of listings. I’m talking about solid sales. Not a huge number, but more than last year and more of the high end product again. Yes that ‘high end product’ is tending to skew somewhat the average price of that greater number of homes sold but so too is it testament to the increased confidence of they who tend to be “more in the know”.

Yes Snowboid you were correct when you retorted yesterday that there were a couple high end sales which skewed the average sales price of that greater number of sales this year over last. But there is a backstory to that and it’s not a bad one at that. That more of the high end, which really did take a bit of a beating here last year, is selling tells me that there is a regaining of confidence in that end of the market. Not a bad thing. Put jealousy aside and realize that those with such resources tend to be a big influencers in the economy one way or another. I don’t know about you but that compels me to welcome them back.

Also 33 of the 47 single family non-strata residential sales in Kelowna so far this year were for less than $500,000, 21 of which were less than $400,000, 17 less than $350,00, 11 less than $300,000 and 4 less than $250,000. I don’t know about you but I consider that a pretty balanced sampling of buyers top to bottom. Also the four homes which sold for under $250,000 were pretty decent product for that kind of dough. There are good affordable homes to be had in Kelowna, believe it or not. McMansions they are not but decent “affordable” homes they are.(Check them out MLS 10049830, 10054699, 10052790 and MLS 10054995). My point is you can’t just look at one component of the market and hang your hat on it to support your argument. There is more to it than just that.

If you look at the distribution of sales so far this year compared to last you will note some encouraging evidence across the market rather than just blaming what looks good on the influence of the most obvious. It’s the backstory which counts most. It’s the backstory which is the foundation of the market. And, I think, the foundation of the Kelowna market is growing stronger not weaker by the looks of what I am seeing.

Yes there have been 4 single family residential sales for over $1,000,000 this year where last year there were none but so too have there been 7 single family residential sales between the price $250,000 and $300,000 where last year there was just one. I think both those stats are good welcome additions to our Kelowna market.

Big White Ski Resort Sales are up more than double and it’s the high end there too that is selling. These are recreational properties which tend to be a bit of barometer of things to come. They were the first to fall after the economic crisis and they did so with a ‘crash’. Now they appear to be indicating something quite different and encouraging.

Again, I don’t expect you to believe me and I’m quite sure I will take a lot of flak for spreading a little optimism on this otherwise negative pathetic blog. Check it out for yourselves. I’d be happy to provide the hard unfettered stats but experience has proven to me that even they, as raw and simple as I try to provide them, are not trusted from this source on this blog.

All I am doing is giving you a heads up. Heed it or debate it, the choice is yours. But I know you just can’t help yourselves so I do look forward to reading your refutations.

};-)

#117 Toronto_CA on 01.15.13 at 10:41 am

Gotta love the MSM posting headlines like this:

TOP BUSINESS STORIES
Home sales plunge, market ‘clearly in correction mode’

http://www.theglobeandmail.com/report-on-business/top-business-stories/home-sales-plunge-market-clearly-in-correction-mode/article7353938/

I was hoping it would be mid January stats, but I guess that’s too early. Still the perception of RE going up, up, up forever has to be fading among the public if that is what is going in the headlines.

#118 squidly77 on 01.15.13 at 10:55 am

My AAPL short position I took at $496 expires at market closing today, it just hit $489. Lucky me this time. Next up, short to $439 by March 15.

AAPL is dead money much like FB @ $31 which lost 600,000 US accounts last month. there’s money to be made there.

http://2.bp.blogspot.com/_svqbG2-JtPc/TOdVhghK23I/AAAAAAAAAKw/xWJqM43nq7Q/s1600/facebook-graveyard-image-1-689921216.jpg

Bye, bye FB.

#119 maxx on 01.15.13 at 11:01 am

“Garth will lead you into the valley of the shadow of death.”

Never. You’re a good man Garth. To the bone marrow.
However, the elephant in the room is all of the white collar crime and lack of transparency that surrounds us….and has done for decades. My parent’s investment firm went belly up, and luckily, they were CDIC protected. I had a brush with a large corp. and lost what was then a lot of money- lucky for me, I was 19 at the time. That was the best money I ever spent because it was a wake-up call that made me realize that even huge corps. can shrivel up and die. We have many friends that got burnt to a crisp over the past decade and are now in the painful process of rebuilding their wealth- most in their late 50’s and 60’s.
Add to that the less than stellar performance of monetary policy leaders, and risk is now seen as toxic rather than something you can manage through careful analysis.
The kind of fear that springs from these experiences is very difficult to overcome. It’s easy to see why those with actual money want no part in risk.
It’s not you Garth, it’s zirp, a RE market that has been commandeered by realtards and government policy that has destroyed the economy with the finesse of a bull in a china shop.

#120 DR. WAYNE on 01.15.13 at 11:07 am

#106 Mr. Lahey on 01.15.13 at 9:15 am

#44 Furst

That’s the way to tell them Furst! You are hilarious in your ripostes. Don’t let the king of the a$$holes, Dr. Wayno or his sidekick AK keep you away. Keep ‘em coming Furst.

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

OK … let’s review this post by “MR.” Lahey. Through a thought process of association, he has crowned me ‘KING’, ostensibly the result of the specific nomenclature I have chosen to describe the ‘First’ posters (in attempts to reduce or eliminate their numbers).

Now let’s review Mr. Turner’s categorization of these individuals … he refers to them as ‘idiots’. Using my scientific gift of deductive reasoning, Mr. Lehay has just referred to the noble Mr. Turner as an ‘idiot’, given we both have labelled the perpetrators as (1) the posterior orifice, and (2) having a mental age of less than three years old and an intelligence quotient under 25 [see: IDIOT http://dictionary.reference.com/browse/idiot?s=t. As one follows from the other, I consider Mr. Lahey’s descriptor of the esteemed Mr. Turner as a blatant insult to his person. I demand an apology … not to me, but to Mr. Turner.

ADDENDUM: As Mr. Turner has stated, we can all now revel in the fact that those who post FIRST are of the mental age of 3 and a rather low IQ.

#121 a sign of the times on 01.15.13 at 11:10 am

Just saw yet another power of sale pop up today in Lornepark. 2 power of sales on the same street. How many more are in the works. Will all those empty houses for the last couple of years go on the market? Are banks calling in their loans, or are more and more people defaulting…. ?????

#122 The American on 01.15.13 at 11:13 am

Responding to #91: Victoria Tea Party, you stated, “An acquaintance of mine, a frequent traveller to the US, reported last week that Americans are spending like crazy, using credit cards and other debt instruments. They’ve lost their equity and their jobs but STILL they can’t keep it in their pants (wallets).”

Hmmmm, that’s an interesting phenomenon. Remember, point the finger one direction, and you have three pointing right back at you. For the record, Canadians have a much higher rate of credit card debt than Americans. Canadians are saving at a negative rate, unlike Americans now at a positive 8%, and Canadians have a much higher consumer debt ratio in the neighborhood of 164% – much higher than Americans had at peak at 154%. Just sayin…. You may want to think about who is really spending like crazy and can’t “keep it in their pants.” For the record, credit card usage in the U.S. has dropped significantly.

What your friend may be witnessing are Americans using debit cards, which look and feel much like a credit card. What a concept. When Americans travel to Canada, the debit/credit card transaction point-of-sale systems and network (Interac) in your country are so antiquated and proprietary that the clerks typically stare back at Americans in utter confusion and Americans can’t understand their cards will work in nearly all third-world nations, but not Canada of all places. And yes, it does piss Americans off if you want the truth. We are used to one POS being able to accept both debit and credit transactions while still processing a debit as a credit should the consumer choose, using only his/her own signature to secure the sale. In Canada, the card MUST be a debit card to swipe it as such through the Canadian-only Interac network for debit transactions.

#123 fancy_pants on 01.15.13 at 11:20 am

“…rates about to move…”
Seriously, you have been saying that for 2+ years now.

…those who truck in fear and misinformation are unwelcome…
tsk. tsk. by your own indications you are unwelcome on your own blog or at the very least have vindicated everyone else here.

Perhaps rates are not going anywhere in a hurry. Have you seen the latest trade deficit figures lately? The GDP can’t afford higher rates.

Believe what you wish. — Garth

#124 Keith in Calgary on 01.15.13 at 11:42 am

ZIRP is here to stay……….for at least a couple of decades IMHO.

RE as an asset class is demolished and is decades away from a resumption growth. We need to wait for the next generation of greater fools to mature, or in this case, poerhgaps even be born.

The financial markets (paper trading @ the DOW, et al) are a scam kept on life support by the FED printing billions per month in order to do so.

I don’t own metal, but it’s been around for 3,000 years.

Diversify, stay liquid, get of the radar screen and avoid as much tax as you can……while accepting that deflation is here to stay.

#125 Doug in London on 01.15.13 at 11:55 am

I can see how the younger people, who haven’t seen boom and bust cycles like I have (age 52) could make some bad decisions like buying a house at peak prices (where are the Boomer parents, more seasoned, to advise them not to buy?). What I CAN’T understand is how people my age or older make such decisions. Are there ANY boomers out there who remember the housing busts of the early 1980’s and 1990’s? Do any of you remember those people losing their houses to foreclosure because they lost their job (that tends to happen is a slow economy) and couldn’t make payments? Does anyone remember the boom and bust of gold in 1980 or tech stocks in 2000? It shouldn’t be that hard to understand, if an idiot like me who failed a college economics course can understand it.

#126 squidly77 on 01.15.13 at 11:56 am

aka Devil’s Advocate on 01.15.13 at 10:37 am

Again, I don’t expect you to believe me and I’m quite sure I will take a lot of flak for spreading a little optimism

Your right, I dont. Verbal diareah at best. Remember this guy.

http://www.google.ca/imgres?hl=en&sa=X&tbo=d&qscrl=1&rlz=1T4GGLL_enCA375CA376&biw=1024&bih=515&tbm=isch&tbnid=ED8aKQo2rmWvRM:&imgrefurl=http://www.irvinehousingblog.com/blog/comments/david-lereah-change-of-heart&docid=u-pHnaxISVMYbM&imgurl=http://www.irvinehousingblog.com/wp-content/uploads/2007/04/nardavid_lereah.jpg&w=277&h=400&ei=YXv1UISuF4mQiQLEqoGgBg&zoom=1&iact=hc&vpx=797&vpy=102&dur=114&hovh=270&hovw=187&tx=142&ty=266&sig=103840259636052567689&page=1&tbnh=148&tbnw=98&start=0&ndsp=20&ved=1t:429,r:12,s:0,i:118

#127 MPAVictoria on 01.15.13 at 12:00 pm

Okay what do you people do who think that a hundred grand a year is not “enough money to raise a family?”

Seriously most families would love to make that much!

#128 Mr. Lahey on 01.15.13 at 12:06 pm

#120 “Dr.” Wayne

“I demand an apology … not to me, but to Mr. Turner.”

I have not read our esteemed host refer to first posters as a$$holes. You on the other hand revel in this and hence your crown, the king of the a$$sholes. I suspect our host has begun to delete the firsts, due to their absence and he had the power to do this all along (which he should have done long ago if it bothered him so much and we would also have been spared this dialogue). So it appears you have achieved your mission “Doc.”

#129 John Prine on 01.15.13 at 12:08 pm

in9999 on 01.15.13 at 12:12 am
#21not 1st on 01.14.13 at 10:52 pm
#12 Ford Prefect

With all due respect, 1.8M will only throw off about $100k a year in dividend income. Thats not a lot of money in this day and age especially if you are raising a family.
—–————————————————————-
Average Canadian income before taxes is $46,000, service industry is $26,915. $100,000 should afford one a pretty nice lifestyle, most will never earn that.

#130 Ann on 01.15.13 at 12:19 pm

#122 The American
—————————————
Maybe we don’t want to get stuck with an Obama buck welfare card!

#131 CalgaryRocks on 01.15.13 at 12:19 pm

In Canada, the card MUST be a debit card to swipe it as such through the Canadian-only Interac network for debit transactions.

The most likely reason why US Debit Card don’t work in Canada, despite them looking like Credit Cards is because they don’t go through the Visa/MC network.

The debit card transaction needs to hit your account to verify that there is money in there, so unless BOA or Citigroup etc provide that access to the Interact network then there is no way that they can be authorized.

But I understand the confused American look.

I had one ask me if he needed a special power adapter for Canada. I said yes, of course. LOL

#132 rapier wit on 01.15.13 at 12:21 pm

http://www.nytimes.com/2013/01/15/science/in-debt-and-digging-deeper-to-find-relief.html?pagewanted=1&nl=todaysheadlines&emc=edit_th_20130115

#133 TS on 01.15.13 at 12:26 pm

Don’t forget Fed has issued so many QEs, so the only way to maintain your asset is buying something. You have to buy! In front of you is a new world with bigger figure.

#134 coastal on 01.15.13 at 12:28 pm

#113 robert james ,

That was the ultimate sleaze, especially the final line trying to suck in the sheep after dissing the person at the coffee shop who was saying real estate is going to crash while he quotes CMHC of all sources. Might as well quote Muir and his baseless numbers.

“There truly is a fortune at our feet.” and “the next boom” says the agent trying to look cool in the pic.

Buddy, you need to wake up in Kelowna, there won’t be another boom, we just had the mother of all booms for our generation. Such a lost society.

#135 Andrew on 01.15.13 at 12:39 pm

DABob,

Well there you have it, DABob’s “Back Story” all is well, everyone back in.

Oh and let’s ignore the latest headlines covering the latest report from the mothership CREA:

http://business.financialpost.com/2013/01/15/canadian-home-sales-in-double-digit-drop-year-over-year/?__lsa=222c-053a

Also…

“I’d be happy to provide the hard unfettered stats but experience has proven to me that even they, as raw and simple as I try to provide them, are not trusted from this source on this blog.”

No, No DaBob I believe you, let’s have the simplest raw number of them all, you know what I’m looking for…

#136 Rainclouds on 01.15.13 at 12:40 pm

#122 The American

Agree the debt ratios are worse here according to many independent sources

Technical 1st world USA? Not so much.My debit/credit card has worked all over the world including the US.

However, Trying to pay for fuel anywhere in the US with a credit but no ZIP is impossible, Schlep to the cashier to get your pre approved amount validated at the pump,(Cashier doesnt ask for ZIP or ID)

Glass Houses, Stones?

#137 coastal on 01.15.13 at 12:41 pm

“I have no idea who this Victoria realtor is, but I do know this – I figure my big house in what the realtors call this ‘executive, sought-after’ area lost 10% of its value last year. That’s about $200,000. During the same time my balanced portfolio (thank goodness I have one) earned 10%. For that I can thank my financial guy, who drives a Hummer and has a blog.”

Oak Bay Retired,

Don’t let the Victoria bloggers find out, they are in denial over there about Oak Bay price devaluations and most other areas starting to crack. They think sales tanking in January is nothing to fret about and GDP numbers and equity stacked owners will save us. Duh.

#138 94 on 01.15.13 at 12:44 pm

#15 The Bear

Check out http://www.investopedia.com
Great resource for your financial language needs.

#139 Inglorious Investor on 01.15.13 at 12:51 pm

#122 The American on 01.15.13 at 11:13 am

What the hell are you talking about? When you come to Canada, where do you attempt to shop with your debit cards, the local lemonade stand manned by little Jimmy?

#140 Inglorious Investor on 01.15.13 at 1:01 pm

And BTW, Mr. American,

You want to talk about ridiculous POS? A Canadian can’t buy gas at US gas stations with a Canadian credit card because every time you pay with a credit card you have input a ZIP code first.

What’s next? Fingerprints? Or should I just look up into the sky and smile for the drone passing overhead?

#141 walltiger on 01.15.13 at 1:02 pm

“Meanwhile financial ignorance is on daily display on this pathetic blog, as the disbelievers trash equity markets, economic growth, leading indicators or the very fact you can earn more than 3% without being a hooker or a thief.”

Garth, just how do you come up with these sentences. If you ever run for PM, you have my vote.

#142 Bargains everywhere on 01.15.13 at 1:10 pm

Here’s a bargain. $11 million and you only need another $3 million to finish it. Sold ‘as is, where is’. I think I’ll put in an offer over asking tonight.

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=12735948&PidKey=-325266714

#143 DR. WAYNE on 01.15.13 at 1:25 pm

#129 Mr. Lahey on 01.15.13 at 12:06 pm

Unfortunately … you have obviously not been able to decipher the logic wherein leads the pathway to my conclusion. Oh well, I tried.

#144 Victoria Tea Party on 01.15.13 at 1:26 pm

#122 The American

My comments about your fellow Americans and their debts is not to try and parse out whether my friend saw them using credit or debit cards at their local junk food restaurants. Nor am I trying to be holier than thou!

In fact, and in light of your interesting comments, I never thought of such a fiscal conundrum at the basal consumer level!

The real point of my post is, once more and again, that your country is drowning in debt at frighteningly unsustainable levels.

And any attempt to cut the debt will likely result, I do believe, in an economic implosion of such force that it could destroy the world’s economic system during that great unwind.

Example: I was watching CNBC today and a US Congressman was discussing with a show host about Gene Sperling’s contention that there should be NO DEBT CEILING. Sperling is an Obama administration insider and a former Bill Clinton aide.

If you’re getting THAT KIND OF CAPITULATION from the inside, then what’s shaking on the OUTSIDE?

The point my acquaintance was making was that Americans just can’t stop spending. And he is right.

OH, YES

As for those debit cards whereof you write. Where did the money come to fill up those suckers? A line of credit? Because your pay cheques are smaller this month from changes to your payroll taxes, right? And how much are you now paying per month for Obamacare?

I’m not trying to be beastly here, but your empire is in huge trouble and so are the rest of us colonials!

You’re completely right about my indebted Canadian compatriots and their insane debt levels.

But they’re just copying you!

We’ve been doing that for decades! That’s what it’s like when you’re a colonist. We used to copy the French and the Brits at one time too. Now some of us are learning Mandarin, or is that Russian? Soon enough even YOU will revert to colonial status!

We have no one to blame but ourselves for the so-called future we now forge for whomever survives this rolling economic cataleptsy long enough to succeed whatever remains.

(One final: Look for the following TV documentary “The Party Is Over”. It deals with the debt issue in a 12-part series starting tonight on the Knowledge Network in BC. Google for details.)

#145 vreaa on 01.15.13 at 1:28 pm

Trading A Hockey Goalie Likened To Trading Vancouver RE [also, RE Market Commentary] – “You may think the Luongo market was something like the booming RE scene a few years ago. But everyone knows what happened in Vancouver RE. One day, the money turned off like a tap.”

VREAA 15 Jan 2013
http://wp.me/pcq1o-59S

#146 Smoking Man's Old Man on 01.15.13 at 1:30 pm

#40 Comrad-conrad

“What’s mine is mine and what’s her’s is her’s”

If you end up splitting up with your wife that would make an excellent opening statement during the long, costly, divorce procedings. I’m pretty certain the judge will totally agree with you…

#147 AK on 01.15.13 at 1:40 pm

#124 skeptical on 01.15.13 at 11:28 am
“AK,

did you hear that sound the markets made yesterday? it’s the sound a bull market make when it dies. yesterday was the day. let’s now watch for the next few months and see what happens.”

I am not saying you are wrong. I just respectfully disagree with you.

There will be 15 Million cars sold in the US during 2013 and the US economy will add 2 million jobs this year.

Therefore, I see the S&P 500 closing at around 1550 this year, which is a modest gain.

#148 AACI Okanagan on 01.15.13 at 1:51 pm

#38 };-) aka Devil’s Advocate on 01.14.13 at 11:20 pm

#221 AACI Okanagan on 01.14.13 at 9:54 pm

We don’t get asked that, only CHMC/Genworth and lawyers acting on behalf of banks ask for a 30 day marketing period. USPAP (Uniform Standards of Professional Appraisal Practice ) requires an opinion of exposure time, not marketing time, when the purpose of the appraisal is to estimate market value. There is a difference between exposure time and marketing time.

Interesting.

I understand your reluctance to answer but, now that we have established that you are aware of the practice of asking for such prices, what, in your opinion, would be the difference between a 30 day sale price and that which the seller was willing to wait 90 days to achieve?

And I am confused and curious what exactly, in your opinion and/or that of your profession, is the deference between ‘exposure time’ and ‘marketing time’?
——————————————————
Your question has way to many variables to take in consideration before I can give you a direct answer. As I mentioned before, USPAP requires an opinion of exposure time, not marketing time, when the purpose of the appraisal is to estimate market value.

The difference between Exposure Time and Marketing Time is:

Exposure Time – is prior to the effective date of the appraisal. If the three comparable sales used took 65 days, 75 days and 90 days to sell then the exposure time for the subject would be 60-90 days. Let me also add that if one of the comparable sales has been on the market for 400 days, and has been reduced lets say 4 times before selling, the “true” exposure time is from the last price reduction and not the 400 days.

Marketing time is after the effective date of the appraisal (prospective) and is based on expectations of future market performance.

When I am asked to do a 30 marketing period I always give an exposure time as per our standards, and then I give them two competitive listings along with the three comparable sales and tell the client that if they want a quicker sale than what the market is indicating (ie 90 days) then throw out all the extras (ie: granite counter tops) that you have over your competition and list below the two active listing.

I hope this helps.

#149 Oceanside on 01.15.13 at 1:57 pm

And BTW, Mr. American,

You want to talk about ridiculous POS? A Canadian can’t buy gas at US gas stations with a Canadian credit card because every time you pay with a credit card you have input a ZIP code first.

What’s next? Fingerprints? Or should I just look up into the sky and smile for the drone passing overhead?
——————————————————————
Don’t have to do it at Safeway Gas yet and at Costco Gas just put in 00000. Not a problem, it’s to protect against consumer fraud.

#150 Ogopogo on 01.15.13 at 2:07 pm

#113 robert james on 01.15.13 at 9:58 am
Here is some Okanagan slease at it`s finest.. http://www.castanet.net/edition/news-story-85852-1044-.htm#85852

Agreed. Right from the first sentence you can smell the putrid stench of realtor-speak: “OK so were in a flat market, this isn’t good or bad news; it just is what it is.” Oh, where to start with this clown? His advice is to get into even more debt by buying a distressed property. Seriously?

I don’t often generalize about any group, but realtors go out of their way to prove to us that most of them are beneath our contempt. What a useless breed of manipulators and self-important douchebags.

#151 robert on 01.15.13 at 2:11 pm

As of this morning between Sicamous, Salmon Arm and Blind Bay there are a total of 46 court ordered sales waiting for a buyer. By spring the sellers will begin to understand that to sell their homes they will have to start at a list price thousands below assessed value. There are very few buyers!!!

#152 Patiently Waiting on 01.15.13 at 2:12 pm

Victor V on 01.15.13 at 12:39 am
http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/portrait-of-a-woman-who-owes-too-much/article7236147/

After eight years and three degrees, Polly finds herself with a debt load way out of proportion to her $63,000 annual salary. Month after month, she sinks deeper in the hole by spending far more than she earns.
—————————————————————–
Looks like Polly is not alone … Just read this article on “Why Americans are broke & getting further into debt:

“Just as the president reminded us yesterday we are not a deadbeat nation, merely borrowing money today to pay the bills of yesterday, so, as the NY Times reports in this all-too-real article, many of the citizens of the US are also living not just paycheck-to-paycheck but short-term-loan-to-short-term-loan. As one debt-consolidation service noted “They’ve been borrowing just to meet payments on previous loans; it builds on itself.” Rings an awfully loud bell eh? (and yes, we know the government’s finances are not run like a households – though at some point the check book needs to balance). People in tough ‘economic’ situations fall into the ‘poverty trap’, borrowing money at ever higher interest rates in a shell game to keep previous borrowers at bay. The average debt for households earning $20,000 a year or less more than doubled to $26,000 between 2001 and 2010 – as people dig deeper, precisely because they long to escape. As the focus of the article notes, “the belt-tightening was the easy part… the larger problem was cash-flow.” Critically, experiments show that ‘economic’ scarcity by itself – independent of personality or any other factors – fuels a drive to borrow recklessly.”

http://www.zerohedge.com/news/2013-01-15/why-americans-are-broke-and-getting-further-debt

#153 Devore on 01.15.13 at 2:12 pm

For example, this week the Commerce released a survey of retired people which seemed all ponies and sunshine on the surface, with 69% saying they’re living the retirement they’d expected.

That sounds like a good number, but still leaves 31% waking up every morning wondering where they made the wrong turn.

#154 Foolish Fool on 01.15.13 at 2:13 pm

How about getting an equity line of credit while the value is still high and interest rates still low and invest the money?…or maybe keep it ready for when the times are good again for investing in RE.

#155 hangfire on 01.15.13 at 2:18 pm

Garth…I think you’re living in a dream world of affluence when you denegrate ‘the average Canadian for having less than $25,000 in retirement savings” . Lets keep in mind that we live in a country with rampant inflation in food, energy and housing costs….with obscenely corrupt marketing boards keeping basic food stuffs coming into the country at reasonabble prices…..where direct and indirect taxation takes over 80% of income and the average wage is half what it is comapared to every other industrial counrty. I realy think your pointing your finger at the victim…barking up the wrong tree….suffering from Stockholm Syndrome by siding with the thugs instead of protecting the innocent.

Keep in mind that the elite of this country are not working people…not small business people….there is only one affluent middle class and that is the civil service….and the civil service has no incentive to save a penny for retirement….they will ride the backs of the taxpayer to the grave with indexed DB pensions as well as incomes over 50% higher than any avergae citizen can earn during their lifetime. The fact is that even if a person could save the maximum in RRSP contributions and earn 9%…they would never equal the payroll of a single teacher or government civil servants pension payout.

I think you’re missing the argument altogether…..it is not that people won’t save ‘because they are illiterates ‘ as you say…..it is because egregious overtaxation and the outrageous compensation of civil servants results in the averga ecitizens inability to rise above living paycheque to paycheque.

I’m sure a lot of your readers are insulted and have to ask themselves the question……” Gee Garth…if the federal government is taking 50% and the province another 12%….and then theres the matter of all the local fees and taxes on my residence, auto, heat, electric, insurance, increasing medical…etc etc etc…..where does the money to save come from?

You see…only the civil service can rise to your level….and they don’t have to save.

The reference was to Americans, not Canadians. But I hope you had a nice rant. — Garth

#156 Frank le skank on 01.15.13 at 2:20 pm

#126 Doug in London on 01.15.13 at 11:55 am
I would have to say I’m just as confused as you are. I’m 33 and know at least 3 people at work who were screwed by the 80’s housing bubble. One person specifically just bought 2 years ago. I don’t get it? These same people who were screwed in prvious bubbles are also encouraging their kids to buy?

#157 jo on 01.15.13 at 2:26 pm

#126 DOUG IN LONDON
I remember all the boom and busts, I am the same vintage early 50’s. I don’t know many people like my partner and I, by that I mean savers. Funny I think people feel sorry for us because we don’t have the big house which for them means wealth. Also I think an annual income of $100,000. is a rarity, enjoyed by very few.

#158 Toronto_CA on 01.15.13 at 2:26 pm

“We expect the Canadian housing market to stabilize at current levels over the next few months. When looking at previous mortgage rule tightening episodes, the housing market impacts have been temporary in nature. There is no reason to think that this time will be any different.”
– Sonya Gulati, senior economist at TD Economics, wrote in a research note.

Good lord.

So, the facts that 1) house prices have never been so out of wack in terms of incomes and rents and 2) mortgage rates have never been lower in Canadian history for so long or 3) home ownership percentages been so high NOR 4) debt levels to income ratios been so high in Canadian history–none of these facts suggests to this “TD senior economist” that this time could play out differently?

Gadzooks. It’s like reading the expert opinions on the USA housing market circa 2006.

#159 Smoking Man on 01.15.13 at 2:40 pm

Bye apple, not buy apple, ya I see where spelling has merit.

#160 Inglorious Investor on 01.15.13 at 2:45 pm

#156 hangfire on 01.15.13 at 2:18 pm

While I don’t think Garth is living in a dreamworld, I do agree with your comments about the civil service.

I believe it is immoral to take more wealth from people––who do not have company or government pensions––in the form of higher or more taxes in order to fund the very generous benefits and DB plans of civil servants.

Toronto City Council rubber-stamped a 2% property tax hike today.

I know a guy who works at CRA. Guess what his solution is to every government program funding problem?

#161 not 1st on 01.15.13 at 2:45 pm

Look people, if you have ever owned or run your own business, I will tell you that $130k per year is not a lot of money. I guess if you are federal office drone working in some 3rd tier city it seems like a jackpot.

Just like Garth always says about retirement, its not about living within your means, its about expanding your means. Sure lots of boomers will get by sitting by the window eating cat food. But thats not for me, I don’t want my income limited by anything.

$250k per year is the desired goal, then you have enough money to live a nice lifestyle without too many sacrifices, set your kids off with a good education, have some nice holidays and enough left over to invest.

If the average person is happy with $40k per year, all the power to them. Thats why an increase in interest rates is such a burden and nobody has a dime to stick in a TFSA.

#162 Spiltbongwater on 01.15.13 at 2:51 pm

And BTW, Mr. American,

You want to talk about ridiculous POS? A Canadian can’t buy gas at US gas stations with a Canadian credit card because every time you pay with a credit card you have input a ZIP code first.

What’s next? Fingerprints? Or should I just look up into the sky and smile for the drone passing overhead.
#141 Inglorious Investor on 01.15.13 at 1:01 pm

You can buy gas. Enter 90210 as a zip code, it works for me 9/10 times. When that doesn’t work, then go and pre pay an amount you think will fill your vehicle. If you can’t pay with your credit card for gas in the U.S.A. you are doing it wrong.

#163 coastal on 01.15.13 at 2:54 pm

#83 Alberta Ed,

Yes, I cannot believe the prices of those Sidney units. Nice view for sure but you are half an hour away from Victoria in good traffic. You think Oak Bay is old and wrinkly, then Sidney is the Town of Rascals and driving goggles with multiple extremely slow stop lights every 100 yards. Takes 20 minutes to go 4 short blocks.

#164 Mr. Lahey on 01.15.13 at 2:56 pm

#144 Dr. Wayne

“Unfortunately … you have obviously not been able to decipher the logic wherein leads the pathway to my conclusion. Oh well, I tried.”

You tried and failed due to its flawed logic and non sequitur conclusion. Regardless, my point stands that our esteemed host could have deleted the firsts from the very beginning and this dialogue would never have happened. I think this dialogue has run its course…

#165 Ann on 01.15.13 at 2:59 pm

Re-
#151 OgopogoI don’t often generalize about any group, but realtors go out of their way to prove to us that most of them are beneath our contempt. What a useless breed of manipulators and self-important douchebags.
————————
For a guy that does not ‘generalize about any group’ often
You sure are good at it!!!
It’s very telling

#166 -=jwk=- on 01.15.13 at 3:01 pm

@DA ;-}

I just spent some time looking at the Kelowna market. The MLS #’s DA gave didn’t come up on realtor.ca But I did find a good mix of normally priced properties. A wack of trailers for >150k. Some entry level houses for 200-250, nicer places 350 and up. Median income per person is about 30k so a 60 k household could definetly get started with one of the smaller homes, unlike in GTA or VAN. It looks like pretty sane, rational market with some inflation but nothing serious.

I am guess I am with DA on this one….

#167 a prairie dawg on 01.15.13 at 3:02 pm

#74 bob

-it’s not that 7% is impossible, but I just don’t think it realistic for the masses.

Take a look at the average “Balanced” Mutual Fund. The 10 year average on those are NOT 7%… so if so many managers can’t do it, what makes you think the average person who follows your blog can?

Therefore, paying off mortgage debt, in my opinion, is still one of the best bets. Thoughts?

– — –

It’s entirely realistic. Want proof?

Open a self-directed trading account. Put $50 in it.
Watch how many offerings come down the pipe regularly. Fed gov bonds, Prov gov bonds, Corporate bonds, tons of different equities*. (*even though Garth say they’re the Debil)

Also you have a plethora of ETF’s available. (some better than Mutual funds, and some just disguised to look like ETF’s, Watch the fees…)

Then there are the dividend paying stocks from banks or other corporations. (can be bought individually or in an ETF that holds them)

Since the GFC of 2008 I made an average of +4.5% each year until Jan 2012. Then shifted back to equity exposure, after all the lemmings drove bond yields down but prices waaaay up. (more profit)

Since Jan 2012 I’m up about 7% on the change back to equity exposure.

But whatever you do, don’t say the average guy can’t do it. I have for 17 years. It’s a learning curve. Make it a hobby. Read as much as you can. Absorb it at your own pace. Don’t start throwing money around until you have a firm grasp of the market basics.

Lots of banks and or brokers now offer FREE practice accounts you can try trading in virtual dollars for a few years if you have to.

(your results may vary)

#168 Smoking Man on 01.15.13 at 3:03 pm

Dana nan ana Batman, on the bond market.. Just like I figured, who in their right mind goes against ssmoking man’s crystal ball.

#169 DonDWest on 01.15.13 at 3:03 pm

#128 MPAVictoria

I’m a 31 year old working class loser who only makes 40K a year; and I’ll be the first to admit that in order to raise a family of three children a person would most likely need an income of 100K plus in most major Canadian urban centers.

There are notable exceptions of course. If you’re a baby boomer who started a family late, and bought houses when they were affordable, you could easily pull it off with what I’m being paid now. If you’re a civil servant you could pull it off, but that’s only because I would be getting 60K worth of family benefits on top of what I would be paid now.

Sorry, based on the time period I was born and the wage I’m getting, I consider it preemptive abortion. Regardless, I don’t plan on ever having kids anyways.

#170 Ann on 01.15.13 at 3:04 pm

#Mr. American,

You want to talk about ridiculous POS? A Canadian can’t buy gas at US gas stations with a Canadian credit card because every time you pay with a credit card you have input a ZIP code first.

What’s next? Fingerprints? Or should I just look up into the sky and smile for the drone passing overhead?-
——————————————————————-
Here a Concept try cash and keep out of the debt/credit card game

#171 };-) aka Devil's Advocate on 01.15.13 at 3:23 pm

#149AACI Okanagan on 01.15.13 at 1:51 pm

Yes it does. And thank you for your reply. Although, I think it is quite different in my industry and VERY different than what the public thinks actually. Which is where I was headed – hoping you might be able to tell them as your credibility is greater here than mine.

Pricing is 80% of what we (REALTORS®) do. Price a home intelligently and it will sell within 50 days for closer to 98% of list price.

Overpricing a property will cause it to take over 150 days to sell and then for closer to 92% of its original list price. Overprice it too much and it will never sell.

The average listing in Kelowna is currently taking about 100 days to sell and then sells for closer to 95% of list price.

Combine a savvy price with an effective proactive marketing campaign and you will garner a ton of activity leading to multiple bids such that the property ultimately sells for more than the asking price. And yes I do partake in such practice as that. (que Barking Blog Dawgs here. ) It’s what I do when I am working for the seller not the buyer. It’s my job – to get the highest possible price for my client. Of course it’s a different story when I am working for a buyer.

I can’t recall seeing a property sell for below market price. It might happen where a For Sale by Owner unwittingly puts on too low a price and someone grabs it before anyone else sees it and does the same. Price a home too low, giving it adequate exposure, and eager buyers start bidding against one another that it ultimately sells for market value – if not more.

Conversely, no amount of marketing will sell an overpriced listing.

So in short, my answer to my question is, based on my experience and a bevy of stats to prove it, is the longer the days on the market the lower the selling price. So a 90 day sale price, based on the stats I regularly look at, is likely to be, all things being equal, about 3 to 5% less than those that take just 30 days to sell.

So, on a typical $500,000 Kelowna home, overpricing could ultimately cost the homeowner $25,000 or more.

And then there are other factors to consider like the variation in ultimate selling price between well merchandised and poorly merchandised home that could add or reduce that $500,000 home by a further $25,000 or more.

#172 Patiently Waiting on 01.15.13 at 3:35 pm

Fraser Valley Real Estate Board Stats – as of January 15, 2013 (9 of 22 Working Days). Note that year over year sales are down 34%. Month over Month sales are down 44% …

JANUARY 2013 Listings 1035 Sales 187
DECEMBER 2012 Listings 516 Sales 335
JANUARY 2012 Listings 1210 Sales 285

Cheers
pw

#173 Triplenet on 01.15.13 at 3:44 pm

#151ogopogo

I am a member of numerous real estate boards throughout BC and Alberta. My dealings with realtors over the past 30 years have been pleasant and professional.
I take exception to your comments and am surprised they are not deleted.
Go back under the dock you prehistoric lizard.

#174 hangfire on 01.15.13 at 3:46 pm

“But I hope you had a nice rant. — Garth”

oh boy…when the truth is a rant….we’re all hooped….and believe it….the truth is the same for the working people vs the elite civic workers on both sides of the border.

I sopke to a women here in Texas a few days ago about the socialist tragedy unfolding in Canada….. using the example of teachers and civil workers making 50% more than the average worker and then collecting a lifetime pension with survivor benefits with full medical and dental….her words….”that’s just wrong”.

maybe the elite should get out more….it doesn’t matter where I go……people are fed up with piggishness taxation and spending…..even Obama has had to change the word spending to ‘obligations’…..it’s so wrong. Rant?………..I don’t agree that saying the opposite of the liberal line is ranting.

#175 coastal on 01.15.13 at 3:50 pm

So much for the high tech bizz saving the day in Victoria, it’s showing some big cracks with out of the blue layoffs.

38 jobs here, a few hundred government workers there, toss in the fact there still isn’t a shipyard job as promised anywhere in site for another year or more and it could be tough times ahead in V town.

http://www.timescolonist.com/business/victoria-tech-firm-silian-sapphire-slashes-workforce-1.47497

#176 Ogopogo on 01.15.13 at 3:52 pm

#166 Ann on 01.15.13 at 2:59 pm
Re-
#151 OgopogoI don’t often generalize about any group, but realtors go out of their way to prove to us that most of them are beneath our contempt. What a useless breed of manipulators and self-important douchebags.
————————
For a guy that does not ‘generalize about any group’ often
You sure are good at it!!!
It’s very telling

Well Ann, what can I say? Show me an honest realtor and I will show you the exception that proves the rule.

#177 TnT on 01.15.13 at 4:00 pm

#162 not 1st on 01.15.13 at 2:45 pm

** $250k per year is the desired goal, then you have enough money to live a nice lifestyle without too many sacrifices **

Me thinks you are delusional… I have an awesome lifestyle with less than half $250k per year, raising 3 kids with stay-at-home wife and 4 pets in 416 Toronto…

No debt, pay cash for everything, making savings and still have left overs for charity.

Do you snort your money?

#178 Old Man on 01.15.13 at 4:00 pm

#175 Triplenet – I agree with #151, as the majority of Real Estate agents make a used car saleman look good, as have dealt with hundreds of them, and they are nothing but a bunch of losers, liars, and will con their own mother to make a fast buck.

#179 Inglorious Investor on 01.15.13 at 4:01 pm

#172 Ann on 01.15.13 at 3:04 pm

“Here a Concept try cash and keep out of the debt/credit card game”

Thanks, Ann. Actually, I use a credit card whenever possible. It’s a great way to track your expenses, gain points, and build a strong credit rating. I’ve never paid a penny in credit card interest.

I know my purchases are being tracked. Meh. That’s the least of my Big Brother concerns. Smile for the drones.

Cheers.

#180 DonDWest on 01.15.13 at 4:02 pm

#168 -=jwk=-

“I just spent some time looking at the Kelowna market. The MLS #’s DA gave didn’t come up on realtor.ca But I did find a good mix of normally priced properties. A wack of trailers for >150k. Some entry level houses for 200-250, nicer places 350 and up.”

This blog still has a lot of work to do if you believe mobile homes priced over 100K is any semblance of normal.

#181 Andrew on 01.15.13 at 4:08 pm

“So in short, my answer to my question is, based on my experience and a bevy of stats to prove it…”

-DABob Post #173

I have nothing to add to that…

#182 Old Man on 01.15.13 at 4:11 pm

I am going to disclose as a first what the Real Estate agents are doing. There will be a solid offer on the table for say $500K, and he will find a couple of frontmen to sign offers for $465K and $460K to present to a vendor. The vendor is going to accept the good offer for $500K out of panic to hoop his commission; this scam is done all too often.

#183 Bobby on 01.15.13 at 4:40 pm

For # 116 DA,
Quite frankly I don’t care how many homes are selling in Kelowna. Talk of a condescending twit.
You remind me of the guy always talking about his sex life. You know the one, the one not getting any.
So if you are as good as you like us to believe, how many of those sales in Kelowna did you make?
Let me guess, all of them!

#184 -=jwk=- on 01.15.13 at 4:41 pm

And BTW, Mr. American,

You want to talk about ridiculous POS? A Canadian can’t buy gas at US gas stations with a Canadian credit card because every time you pay with a credit card you have input a ZIP code first.

What’s next? Fingerprints? Or should I just look up into the sky and smile for the drone passing overhead?
—————————————-
You may not be able to use the pumps out side, you ,may have to *gasp* go into the store and present the card to the clerk! Oh my!! Buy a smartie while you are in there and calm down…100’s of CDN’s travel to USA, with cars, and buy gas, without issue….

#185 Alberta Ed on 01.15.13 at 4:43 pm

There’s an easy fix for entering postal code numbers. This works even in the primitive areas of the US where they often don’t even have credit card chip readers: Enter the first three numbers of your postal code and add two zeros to the end.

#186 Holy Crap Wheres the Tylenol on 01.15.13 at 5:01 pm

Well this could the Canadian Comeback Kid. I have a feeling RIM has something up their little BlackBerry A$$es.

http://www.forbes.com/sites/greatspeculations/2013/01/15/money-flying-out-of-apple-stock-flocking-to-facebook-rim-nokia/

#187 };-) aka Devil's Advocate on 01.15.13 at 5:19 pm

#178Ogopogo on 01.15.13 at 3:52 pm

#166 Ann on 01.15.13 at 2:59 pm
Re-

#151 OgopogoI don’t often generalize about any group, but realtors go out of their way to prove to us that most of them are beneath our contempt. What a useless breed of manipulators and self-important douchebags.

For a guy that does not ‘generalize about any group’ often
You sure are good at it!!!
It’s very telling

Well Ann, what can I say? Show me an honest realtor and I will show you the exception that proves the rule.

Well Ogopogo, there are approximately 100,000 REALTORS® in Canada. What random sample, of any consequence, do you personally know of that you can make such a judgement with any credibility.

Here’s a thought… might it be you who is the social pariah?

#188 Holy Crap Wheres the Tylenol on 01.15.13 at 5:22 pm

While I had a Samsung S III last year I shortly dumped it as it was cheaply manufactured. Case made from polycarbonate, button issues, poor video recording in light. No issues to return, bought another brand Smart phone. Samsung TV sets excellent! Just read Samsung stock report great results so far. Can they sustain this level for long? I just don’t see the smartphone market as their ticket to ride! Too many competitors out there, way too many!!!!!
http://www.bloomberg.com/quote/005930:KS

#189 old phart on 01.15.13 at 5:22 pm

Single girl early twenties buys 450k home in cold lake

see 1:26… http://www.globaltvedmonton.com/video/cold+lake+boom+pt+1/video.html?v=2325589296#stories

Story relates to oil boom in Cold Lake AB.

#190 Devore on 01.15.13 at 5:24 pm

#41 MrHulot

Some realtors still know how to sell houses, and some people still have an infinite capacity for falling for marketing gimmicks.

#191 EIT on 01.15.13 at 5:31 pm

#8 Canadian Watchdog on 01.14.13 at 10:16 pm

It’s not money dammit. It’s just a stupid yellow rock.

——————————-

A stupid yellow rock that is subject to a price according to supply and demand. And there isn’t that much of it, relatively speaking. You don’t hear about golden transmission lines do you? It’s unreactive, and beating-able, etc. Do you know what a logical conclusion is?

#192 Snowboid on 01.15.13 at 5:38 pm

#122 The American on 01.15.13 at 11:13 am…

Didn’t realize there were so many problems using US cards in Canada, but I must admit I get just as annoyed during our winter stays in the US…

Most Canadian credit cards are chip-enabled, but all US stores we have shopped at require the old swipe and sign system.

Most US gas stations will only accept a credit card using a 5 digit zip code at the pump – we have to go into the station and swipe and sign for a pre-paid amount (exception – using AMEX at Costco stations).

And the same for many online sites including Costco (they lost a pile of business from us last year), they will not accept a Canadian credit card (VISA, AMEX) – either want a zip or don’t have an option for a Canadian billing address to match our cards.

And yes, we often have US clerks look at us as if we came from another planet, saying “Why is there a chip imbedded in your credit card?”

Of course, saving 30-50% on everything we buy in the US totally makes up for that!

#193 dosouth on 01.15.13 at 5:49 pm

#175 Triplenet – touchy are we?

#194 mark on 01.15.13 at 5:50 pm

Gotta love it when reporters go fiddling stats on behalf of their real estate buddies, then get caught out

http://tasmanianrealestatetrouble.blogspot.com.au/2013/01/protection.html

#195 Snowboid on 01.15.13 at 5:50 pm

#175 Triplenet on 01.15.13 at 3:44 pm…

Most of our dealings with realtors (buying and selling) have also been pleasant and often professional.

That doesn’t mean we trust them, as I have said before they are salespeople first and always.

#196 Freedom55 on 01.15.13 at 6:00 pm

#156 hangfire

Keep going hangfire well done couldn’t agree more.

#197 dosouth on 01.15.13 at 6:00 pm

#151 Ogopogo – Actually in this case you are close to describing this realtor. He has been charged and censured by the BC Realtors

http://www.recbc.ca/2008/01/recbc-discipline-decision-adrian-hazzi/

and not sure where the criminal case ended up but this man should not be advising anyone – period!

#198 amazona girl on 01.15.13 at 6:08 pm

Garth I have been following you for years. . Since your
first article in the Globe and Mail. I did well in my
investment this year thanks to you.Maybe you and I
can go for a ride in your De Lorean

You’re on. Wear a tube top. — Garth

#199 TEMPLE on 01.15.13 at 6:09 pm

#162 not 1st on 01.15.13 at 2:45 pm

Whoa! So much wrong, so little time. I’ll try, though, maybe because I am a bit masochistic.

Look people, if you have ever owned or run your own business, I will tell you that $130k per year is not a lot of money.

What does having a business have to do with how much money is a lot of money? Money is money.

I guess if you are federal office drone working in some 3rd tier city it seems like a jackpot.

You sound angry. Was it because a lot of people pointed out the wrongness of your earlier remarks?

Sure lots of boomers will get by sitting by the window eating cat food. But thats not for me, I don’t want my income limited by anything.

Nobody is going to be eating cat food (except cats) with 2 million dollars in financial assets. You seem to have trouble understanding that dividend income isn’t the only income that investments can produce.

$250k per year is the desired goal, then you have enough money to live a nice lifestyle without too many sacrifices

You hurt my brain. Why are you assuming that everyone wants to live the same piggish lifestyle that you aspire to live? I will happily stop working when my investments can generate 100K a year. That is ample (more than ample, actually) for the kind of lifestyle that I enjoy.

Anyhow, I am still not clear on what your point is here. You started out by scoffing at the amount of dividend income that 2 million could generate, were corrected by people more financially knowledgeable than you, and now you are ranting derisively about the kind of money you think we should all want to have. Care to explain?

TEMPLE

#200 OkanaganInvestor on 01.15.13 at 6:12 pm

#88 JuliaS on 01.15.13 at 2:41 am

That was well said and puts a personal perspective on the changing environment each generation experienced.

#201 robert james on 01.15.13 at 6:23 pm

#175 Triplenet I am a member of numerous real estate boards throughout BC and Alberta. My dealings with realtors over the past 30 years have been pleasant and professional.
I take exception to your comments and am surprised they are not deleted.
Go back under the dock you prehistoric lizard. http://www.recbc.ca/2008/01/recbc-discipline-decision-adrian-hazzi/ Oh wow !! Tell us more !!

#202 Saskatoon Housing Bubble on 01.15.13 at 6:32 pm

For those interested I put together a couple of interesting graphs

Average House Prices In Canada and Median Family Income Growth 2000 -2010
http://4.bp.blogspot.com/-re6xkBrSDho/UPXHrMqTIOI/AAAAAAAAEsQ/wjpf1bH7khs/s1600/House+Price+and+Family+Income+Growth,+2000+-2010.jpg

What if house prices followed family incomes from 2000 to 2010?
http://1.bp.blogspot.com/-6Ft__Z0Tnwc/UPXUivUCHsI/AAAAAAAAEtU/tdLRiV7p_lc/s1600/If+house+prices+followed+family+incomes+2010.jpg

#203 espressobob on 01.15.13 at 6:38 pm

#162 not 1st

Funny thing, I do own & operate a business. I deal with other business people and I can assure you a growing number of them would be quite happy taking home 40k.

Some of these folks bust their chops 80 to 100 hours a week just to cover the bills. These are the lucky ones.

And the others who are teetering on the brink stand to loose everything!

But granted, a very small handfull hit it big and will be the first to tell you, they got lucky.

#204 AACI Okanagan on 01.15.13 at 6:52 pm

#149AACI Okanagan on 01.15.13 at 1:51 pm

So in short, my answer to my question is, based on my experience and a bevy of stats to prove it, is the longer the days on the market the lower the selling price. So a 90 day sale price, based on the stats I regularly look at, is likely to be, all things being equal, about 3 to 5% less than those that take just 30 days to sell.
————————————————
Stats to prove it? that I love to see !! Sounds more subjective than anything.

#205 Ken R on 01.15.13 at 6:56 pm

#126Doug in London on 01.15.13 at 11:55 am

I totally agree with your opinion. If you are young and foolish the world will teach you a lesson that you will probably recover from. When you get into your fifties and you make stupid decisions, the world is less forgiving. I have two acquaintances who just threw their retirement away with bad real estate decisions. It’s damaged the marriages too, really bad situations.

#206 Stew on 01.15.13 at 7:15 pm

Geithner: US Could Default by February with ‘Severe’ Consequences

by William Bigelow 15 Jan 2013, 1:13 PM PDT 3 post a comment

Barack Obama has trotted out Treasury Secretary Timothy Geithner to claim that if the GOP refuses to raise the debt ceiling, the results will be catastrophic and that he has been using “extraordinary measures” to keep the U.S. economy afloat:

Treasury currently expects to exhaust these extraordinary measures between mid-February and early March of this year… If Congress does not act to extend borrowing authority, all of these payments would be at risk. This would impose severe economic hardship on millions of individuals and businesses across the country. It should also be noted that default would increase our borrowing costs and damage economic growth and therefore add to future budget deficits, not decrease them.

Of course, the idea that the federal government doesn’t have enough to pay off its bill without raising the debt ceiling has been debunked, but that isn’t stopping Geithner and Obama from demagoguing the issue.

There will be no default. He is grandstanding. — Garth

#207 };-) aka Devil's Advocate on 01.15.13 at 7:25 pm

#204Saskatoon Housing Bubble on 01.15.13 at 6:32 pm

Not everyone can own a home. Housing is going to continue to rise faster than peoples ability to pay for it. Yes it sucks but that’s the way it is.

It’s a big marketplace that includes everything. You are a part of that marketplace as is that house you would like to buy.

The way to keep up, or get ahead, is to make yourself more valuable to the marketplace. If you don’t keep up you will fall behind.

The market is not going to wait for you to catch up, it’s not going to slow down or back up so you have opportunity to get in. You have to catch up to what it is and where it is.

You are not the market and I am not the market. EVERYBODY is the market and if it appears EVERYBODY is doing better than you it’s because you are not competing as well as you need to.

You don’t pursue success you attract it. You attract success by making yourself more attractive to it by making yourself more valuable to the marketplace.

#208 bill on 01.15.13 at 7:33 pm

da says :
Here’s a thought… might it be you who is the social pariah?
A question for yourself I think and yeah you are.

#209 baddog on 01.15.13 at 7:45 pm

Mark W. (#16) if you are going to post about Winnipeg at least get your facts straight. The population has been rising steadily for over a decade due to immigration. Houses have appreciated too much in the last 10 years but nowhere near 250%. Yes there is no shortage of land in Manitoba as there is no shortage of land in Ontario or BC. If you want to live in a city however land tends to be more in demand. I also have no idea where you got your property tax number. On a $250 000 3-4 bedroom 1200 sq ft house in a good area you pay about half of what you wrote. Maybe do some reading before you write this crap.

#210 Nostradamus Le Mad Vlad on 01.15.13 at 7:51 pm

-
Sound up! 5:44 clip 3D trip across America, shot from a biplane. F11 for full screen.
*
Thinking Treasury? That’s a clandestine oxymoron; Germany repatriating its gold, but CNBC says the actual gold doesn;t matter, it’s bookkeeping that counts; EZone “The Irish people have paid 42 percent of the total cost of the European banking crisis.”; 0:49 clip Constantly creating FFs working with Wall St.; 48:12 clip Banks protected from embarrassing themselves; 1:03 clip Gunmen fire on Greek PM’s office; Fried Stats Figures seem to be fudged; 1:49 clip “Complete history of the debt ceiling in 90 seconds.”
*
NRA Membership balloons in a month, Deleted Forbes article says its psychiatric drugs, not guns which are the problem, 8:57 clip Obomba will use children as props for his announcement re: gun control, yet doesn’t give two hoots about children in AfPak which drones regularly kill, and Texas Proposal This would jazz things up with gun control and Three Dirty Tricks govts. will use to steal guns; Regime Change Rifles aka assault weapons; 7:45 clip AmeriCorp, FEMA and others; China vs. Japan US and Japanese fighters teaming up.

#211 Nicorette Man on 01.15.13 at 8:15 pm

http://www.roadtoroota.com/public/1088.cfm?awt_l=MM3Z.&awt_m=3jvGjtRQ0dAZ85B

#212 Cici on 01.15.13 at 8:21 pm

#59 ComicSans

Man up dude, he’s 100% serious. Hot ladies love funny, yet solid and decent men.

Notice I said decent. So stop being jealous; he’s got Dorothy so if you work on perfecting your sense of humour and common decency, some of those ladies might flock to you.

#58 cowtown cowboy
Thanks for the illogical advice. So instead of working and saving hard while whining about the obvious injustices, I should just drink beer and travel in hopes that I might get into a car accident so I can finally afford a downpayment and a chance at getting rich off of real estate. Oh wait, I missed the cycle anyways. But thanks for the (mostly) smug and useless advice.

#213 jess on 01.15.13 at 8:31 pm

Surely the money illerates can tally the fines charges due to money laundering, sanctions on transactions, fund transfer coverups, rigged electricity market pricings manipulaion libor, ppi fraud , foreclosure frauds etc ….

http://www.hmtreasury.gov.uk/anti_laundering_counter_terrorism_policy.htm

Guns and butter

With news stories such as: overseas garment factory fire, labour law suits /alleged bribery charges ,selling modern sporting rifle= semiautomatic rifle, 55% sales is in food and drink and sourced locally, and the Government aid = taxpayers offset low wages by subsidizing with food stamp programs /medicaid. seems that they are buying american already. Who makes the rifles?

Is Vice President Joe proposing that independent gun dealers force buyers to go through Walmart’s certified background checks?
http://www.huffingtonpost.com/2013/01/09/walmart-gun-control_n_2435232.html
===================
tax efficiency?
Paying the Price, but Often Deducting It : How companies deduct fines for malpractices from their tax bills (15 Jan 2015)
By GRETCHEN MORGENSON
Published: January 12, 2013
http://www.nytimes.com/2013/01/13/business/paying-the-price-in-settlements-but-often-deducting-it.html?ref=business&_r=5&

Illinois transportation agency sues United Airlines; says it runs ‘sham’ business to avoid taxes (15 Jan 2013)
US Airlines dodging taxes, RTA says; transit benefit “tax shelter” grows (15 Jan 2013)

#214 jess on 01.15.13 at 8:38 pm

Subsidizing Bad Behavior
How Corporate Legal Settlements for Harming
the Public Become Lucrative Tax Write Offs,
with Recommendations for Reform

U.S. Public Interest Research Group
http://www.uspirgedfund.org/

#215 TurnerNation on 01.15.13 at 8:41 pm

More on the ‘War on Boats’/Muskoka.

Maybe they are herding us into cities.

http://www.thepost.ca/2013/01/15/fee-hikes-could-sink-cruise-boats

Parks Canada posted the new fee structure on its website Friday, asking for public input through the website until Feb. 18. Current fees, which have been frozen since 2008, remain in effect until March 31.

Parks Canada has proposed moving to a coupon-based fee system and eliminating the season pass.

Hinton, whose ship has a capacity of 200 passengers and carries 5,000 to 6,000 people per season, paid $3,146 in locking and mooring fees last year. If the new fee structure is implemented as proposed, he said, his costs would increase to $39,780.

“It’s going to put me out of business and it’s going to put 11 people out of jobs,” he said

#216 TurnerNation on 01.15.13 at 8:51 pm

#15 The Bear

You’ll love it here! Overall 50% of each dollar earned goes towards taxes.

You want to buy TV for $1000? First earn $1350. $350 is taken away in tax. Buy the TV, pay $150 in taxes. Therefore your $1000 TV costs 1000 + 350 + 150.

One in four property tax dollars goes straight into the police union’s wage and benefits packages, I’ve heard.

Do you buy gas, booze or smoke? 50% of those costs are tax.

I could go on. Welcome to Kanada.

If you pay into the EI system for years, they’ll look to deny you at every step:

http://www.cbc.ca/news/canada/prince-edward-island/story/2013/01/14/pei-ei-changes-complaints-mp-584.html

They are pushing people to travel, like single parents with no transportation to go perhaps 60 or 70 kilometres and it’s not even possible for them to do it. This will force people onto welfare.”

Malpeque MP Wayne Easter has also been hearing from constituents.

“We are getting a lot of complaints on not being able to get through on the Employment Insurance lines, and a lot of confusion in terms of the new system as well,’ said Easter.

#217 Herb on 01.15.13 at 8:54 pm

#176 hangfire, Freedom 55 please copy,

I didn’t know that you were the ultimate socialist! Teachers, civil [sic] servants and “average workers” making different wages truly is “just wrong”. There is no difference in their qualifications, skill sets and responsibilities, so their remuneration must be the same.

Welcome, Comrade! And forget the “From each according to his abilities, to each according to his needs” bit. We’ll just go with “to each the same” and save a lot of money.

The fact that you are hanging out in Texas warning of the dangers of Canadian socialism is terrifying. Do capitalism and your country a service and shut up.

#218 walltiger on 01.15.13 at 9:02 pm

#214 CICI

cici, you are funny. (about cowtown cowboy)

#219 a prairie dawg on 01.15.13 at 9:09 pm

#172 Ann

You want to talk about ridiculous POS? A Canadian can’t buy gas at US gas stations with a Canadian credit card because every time you pay with a credit card you have input a ZIP code first.

– —- –

Ann, next time just use 90210. ie: Beverly Hills

I doubt all credit card numbers would be tied to a zip code. They have a ‘gazillion’ banks down there. They can’t all have cards tied to individual zip codes.

If that doesn’t work just get very indignant, loud, and pushy. That should convince them you’re from Beverly Hills. lol

#220 Inglorious Investor on 01.15.13 at 9:13 pm

#186 -=jwk=- on 01.15.13 at 4:41 pm

“You may not be able to use the pumps out side, you ,may have to *gasp* go into the store and present the card to the clerk!”

Uhh… thanks for the “insightful” comment, but that wasn’t the point.

#221 Bobby on 01.15.13 at 9:17 pm

I’ll bet #175 is realtor!

How can you tell?

#222 Saskatoon Housing Bubble on 01.15.13 at 9:20 pm

209};-) aka Devil’s Advocate on 01.15.13 at 7:25 pm

“Not everyone can own a home. Housing is going to continue to rise faster than peoples ability to pay for it”

That graph compared average house prices with FAMILY INCOMES. These incomes do not even come close to the growth experienced in house prices. If more and more families are priced out of the market in regards to income, the foundation of the real estate market becomes very shaky as it built upon debt.

“The market is not going to wait for you to catch up, it’s not going to slow down or back up so you have opportunity to get in. You have to catch up to what it is and where it is. ”

I take it that you have not studied any of the previous real estate busts in Canada or any across the world.

#223 Inglorious Investor on 01.15.13 at 9:21 pm

#188 Holy Crap Wheres the Tylenol on 01.15.13 at 5:01 pm

“Well this could the Canadian Comeback Kid. I have a feeling RIM has something up their little BlackBerry A$$es.”

Most people are focussed on BB10, but I’m hearing even more interesting chatter re: QNX as it may be deployed as an embedded system in products beyond just smartphones. The potential of QNX may be getting overlooked; I plan to look into it some more. RIM has been very interesting lately.

#224 Linda Mulligan on 01.15.13 at 9:30 pm

Old Man says ‘I won’t stand in line for anyone’ as justification for using a credit card. Hope it gets paid in full when the bill comes in, otherwise that is one expensive way to avoid standing in line. Mic D’Angelo indicates a couple would get $2,500 per month in CPP/OAS – that is only if you work to age 65 & only if you combine both couples benefits so each person gets $1,250 per month for a combined total of $2,500. By the way, in order to get the maximum CPP you need to have paid the maximum for most of your working career, which by CPP standards is from age 18 to age 65 – not too many people work 47 years & pay in the maximum for all of those years. Lowest 8 years gets dropped so as long as you pay the max for 39 of those years you should get the max CPP benefit, otherwise it is adjusted to a lower amount. As for one commentator indicating retirees are not taxpayers, if only. Even if all you get is CPP/OAS/GIS (combined maybe as much as $18 K a year – gross, not net) you STILL pay tax on that. You get it back, of course, but have to wait until your income tax return is filed before you get back that money. Don’t believe me? Check your Gov’t of Canada website for details & FAQ’s!

#225 DA why don't you mention all the foreclosures in Kelowna too! on 01.15.13 at 9:32 pm

Yes there have been 4 single family residential sales for over $1,000,000 this year where last year there were none but so too have there been 7 single family residential sales between the price $250,000 and $300,000 where last year there was just one. I think both those stats are good welcome additions to our Kelowna market.

Big White Ski Resort Sales are up more than double and it’s the high end there too that is selling. These are recreational properties which tend to be a bit of barometer of things to come. They were the first to fall after the economic crisis and they did so with a ‘crash’. Now they appear to be indicating something quite different and encouraging.

What a load of horse manure. Time to wipe your mouth DA

#226 furst on 01.15.13 at 9:35 pm

#120 DR. WAYNE on 01.15.13 at 11:07 am
Blah Blah Blah Blah A$$HOLE Blah Blah Blah Blah

Unfortunately … you have obviously not been able to decipher the logic wherein leads the pathway to my conclusion. Oh well, I tried.
__________________________
Dr. Wayne, I read two lines of your blathering post and got incredibly bored so decided to do something far more interesting. I went to my living room and watched the paint dry. No wonder Mr Lahey couldn’t follow your post. It was as well articulated as a 3 year old attempting to explain Nietzsche. Work on clearly articulating an insult and then maybe it would sting. I knew Doctor’s had messy writing, not messy thinking. I’m soooo much smarter and hotter than you. Da ladies be sayin that all night long.

#227 The Man From Nantucket on 01.15.13 at 9:44 pm

#141 Inglorious Investor on 01.15.13 at 1:01 pm
And BTW, Mr. American,

You want to talk about ridiculous POS? A Canadian can’t buy gas at US gas stations with a Canadian credit card because every time you pay with a credit card you have input a ZIP code first.

First time I ran into this, I cursed, punched in ‘90210’, cursed again, punched in a Buffalo area ZIP that I remembered, cursed again, and then trudged to the counter to face the inevitable.

Truthfully, I’m more upset that there’s so little trust that they cannot even front me a tank of gas that I’ll pay for in the store…….half the time I’m coming in anyway for a pit stop or a drink.

http://www.i75online.com/CreditCardWorkaround.html

Anyway, google is your friend after the first one.

There are similar postings showing workarounds all over these here interwebs. Depends on what lengths you’re willing to go to and who’s done the programming for the gas pump’s point of sale.

#228 Devore on 01.15.13 at 9:44 pm

#92 M

In retrospect, we can clearly see the best option for underwater and defaulting home owners was to stop paying their mortgage and stay in their house*. Some did, living for YEARS rent and mortgage free. That’ll buy you a lot of iPads.

But that’s only the case when banks can mark assets at whatever value they wish. If they need to mark them to market and write off non-performing loans, they are motivated to sell them as soon as possible, or to work out a deal with the mortgager.

(*) Some conditions apply. See lawyer for details.

#229 };-) aka D.A. on 01.15.13 at 9:48 pm

#206AACI Okanagan on 01.15.13 at 6:52 pm
#149AACI Okanagan on 01.15.13 at 1:51 pm

So in short, my answer to my question is, based on my experience and a bevy of stats to prove it, is the longer the days on the market the lower the selling price. So a 90 day sale price, based on the stats I regularly look at, is likely to be, all things being equal, about 3 to 5% less than those that take just 30 days to sell.
————————————————
Stats to prove it? that I love to see !! Sounds more subjective than anything.

Being an appraiser, you have access to the System (MLS). Log in and pull up all the listings that sold in 50 days or less in a given period of time and then do the same for all those listings which sold in more than 50 days for that same period of time. Look at the original list prices, the last list prices and the sale price of each. You will, I am sure, see that those which sold in 50 days or less sold for closer to 98% of their last list price which was typically their original list price. Those which took longer than 50 days (average 100) sold for closer to 95% of their last list price and closer to 92% of their original list price.

You should, being a licensed appraiser member of OMRA as I have been led to believe you are, have access to the system so do it and then try call me a liar. You will need to find that DOM field to plug in ‘50-‘ and then ‘51+’ . Try it for a few different subareas and might I suggest doing it for ‘01/01/2012-12/31/2012’ input into the sale date field.

Not subjective at all. Not in the least very consistent and factual. Try it for various dates across various neighbourhoods.

Kewl eh

And now you know a secret very few actually are aware of. Sure many REALTORS knew the concept but here I’ve given the source to the proof.

Now it’s time for me to shut up on such golden nuggets as that.

#210bill on 01.15.13 at 7:33 pm
da says :
Here’s a thought… might it be you who is the social pariah?
A question for yourself I think and yeah you are.

Duh, like I didn’t see that one coming… and yes, yes I am.

#230 The Man From Nantucket on 01.15.13 at 9:49 pm

#194 Snowboid on 01.15.13 at 5:38 pm
……..
And yes, we often have US clerks look at us as if we came from another planet, saying “Why is there a chip imbedded in your credit card?”

If you’re in the deep South, tell them it’s the “Mark of the Beast” :)

#231 Oakvillian on 01.15.13 at 9:51 pm

http://www.thestar.com/business/article/1315328–housing-market-continues-to-cool#comments

#232 SueInHaliburton on 01.15.13 at 9:57 pm

My family has a history in northern Ontario long before it got called cottage country. Gramps was a land surveyor and a smart one who started buying up acreages and waterfront back in the early 1900s and our family was fortunate to build a lot of small but charming properties. (Gramps had 13 kids so had some diversified talents to say the least) We are now a group of eight elder siblings and spouses all soon retireing and have worked together in the Muskoka/Haliburton/Kawarthas areas building and selling cottages over the years, and maintaining our own. We feel very fortunate to have enjoyed this lifestyle. After slow price increases in the 1990s, the last decade has just been crazy in terms of valuations, and we decided together two years ago that we wanted to crystallize our gains and step back for a while, putting money to work for our kids and retirements. Some of us have since bought nice places in the southern USA to use as vacation spots.

Well as of November 2012, we as family have sold the last of our nearly two dozen cottageland properties (one brother operates a real estate firm which while unpopular with some bloggers here has helped a lot in the process). We are still holding on to some landlocked and more northern acreages since you never know what minerals might be underneath. Looking at real estate in general and cottages here we are both worried and hopeful. We are worried for friends who still have their recently bought cottages and owe money. We are hopeful that there might be new opportunities in a few years to do cottage vacation rentals with existing properties and other vacation businesses in the future when prices have calmed down. Together we have decided to carefully invest most of our capital and wait. We all read this blog as well as some other good sources of wise news when it comes to property. We have decided to start looking for new cottage properties again only when the air has properly come out of the market. Depending on the area, we are expecting this to mean a devaluation between about 40-80 percent from 2012 prices. We think Muskoka alone will drop by at least 50% based on what we have seen in the past. We are prepared to wait until about 2018 if we need to but will start looking at the market closely starting winter 2014 in case there are buying opportunities then. Our family has seen this area go through boom and bust before and all signs now point to a big bust coming. (Anyone here who might want to rent a Muskoka cottage can come talk to us in about 2020 and we’ll fix you up!)

#233 Devore on 01.15.13 at 10:05 pm

#96 hoser

Nationally, a drop of 25% is massive. Locally, at a neighbourhood level, it’s just normal. A “crash” is a sudden drop. In individual markets, there will be a sudden decline, followed by smaller melt over some time. But because of the temporal component smoothing things out (different parts of the country will follow different schedules), nationally there will be no crash. Just a 10-15% drop, and long slow period of declining prices.

“Crash” is a term allied to a situation where you have a sudden and definitive drop, expected to be followed by a rise immediately. Whereas a correction + melt is indicative of a trend that will last several years.

For example, the popular example of Japan, nationally land prices are still declining. 20 years later. But in some individual markets, like Tokyo, prices dropped much more quickly, and recovered. Of course, then within Tokyo itself you have more fine-grained variations.

#234 Devore on 01.15.13 at 10:20 pm

#94 Mic D’angelo

People have to make retirement and saving key priorities in their lives and living within their means.

There is a generational shift in circumstances, but not in attitudes. Used to be people were expected to live less than 5 years beyond retirement. The savings required to take you through those years were minimal (just emergency savings, really), and government assistance was easy to provide.

Now people get to live 20, 30 years into retirement. However, attitudes about saving and planning for this important life period have not changed. People still expect the pension and government to provide for 30 years of comfortable retirement, just like they used to. Their parents and grandparents had it, because they earned it of course, and by golly, so do they! But it is mathematically difficult to justify a 30 year drawdown period after a 30-35 year working life, less than 20 of it at peak earning power. It just doesn’t add up. The typical person entering the workforce today should expect to put enough money from 1 year of employment to pay for 1 year of retirement. With the magic of compound growth, that might be possible, but (real) growth is very hard to come by these days. We are in a long term deflationary period. Population growth is slowing. In some western countries, population is shrinking. It is shrinking in almost all of them when you subtract immigration. Debt growth is slowing. We are exhausting easily accessible raw materials. An energy crisis is, maybe, upon us as well. We are reaching many growth limits. So when I say 1 year of employment has to provide for 2 years of consumption, I don’t think I am too far off the mark (oh yeah, add supporting your increasingly expensive kids for 20 years as well here). People just have to get used to spending far less, and saving far more than they do today, because the only thing you can count on the government to provide in the future are inflation eroded benefits.

But right now people are doing the opposite. They are spending more than they earn. This is unsustainable; a complete 180 is required.

#235 Andrew on 01.15.13 at 10:38 pm

I think DABob is done for day, so I will submit his crdibility rating for the day.

Based on several long-winded say nothing Realtor SalesSpeak posts and his failure once again to post his numbers, I’ll have to downgrade him several points to another all-time low.

#236 bill on 01.16.13 at 12:05 am

da says :
Duh, like I didn’t see that one coming.
well once I pointed it out to you sure…
before that ? as if.

#237 Dragonslayer on 01.16.13 at 2:36 am

Garth I have been following you for years. . Since your
first article in the Globe and Mail. I did well in my
investment this year thanks to you.Maybe you and I
can go for a ride in your De Lorean

You’re on. Wear a tube top. — Garth
=========================
There must have been an episode once with Sandra in a tube top and I missed it!! Dang!!

#238 M on 01.17.13 at 7:46 pm

Garth,..it’s an honor to be part of the ” idiots who refresh their screens for three hours so they can type ‘First!’ Metalheads and conspiracists. Doomers and house pumpers”.
.. except that the babes are following ME !! :)
Wisdom my friend, has weird ways to choose its friends.
For better or worst.
It is a good thing to be part of this crowd.
Cheers..