The manipulators

goodboy

In the post-crash chill of 2009, Alan bought a crappy semi in a dodgy downtown Toronto hood for $355,000. “It was cheap,” he says. “I like cheap.” He started renting out rooms, and tried not to go there too often, for obvious reasons.

In April of 2012, with bidding wars raging and the city streets awash in hormones, some dude offered Alan $556,000. But he didn’t bite. This week in my office I looked at him with my trademark mix of wonder and disgust. Why not, I managed to ask? “My mother said it would be a bad idea. What if prices went up and I never got a house again?”

Alan is 33, lives at home, and his mom has never seen the place. He passed up two hundred grand in free money because of greed. Vicarious maternal greed, actually. Not even his. The place is currently worth about $480,000. “I can’t sell it now,” he said, “at a loss.”

This is why it’s far easier to like dogs.

As I wrote yesterday, housing is turning into the asset class I warned you about. Once bloated on emotion, misinformation, manipulation and speculation, real estate is correcting fast in most markets, despite realtor efforts to obscure the truth.

In Toronto sales are down 19% and in Van by 31% – the same decline as in Edmonton. In Victoria 87 properties have sold so far this year compared with 372 during last January. In the Fraser Valley there are 34% fewer deals this year than last. In Nova Scotia yesterday 70 houses were listed, 30 were reduced and just 20 sold. And across the country, says CREA, sales tumbled 17.4% in December compared to last year.

Clearly buyers have decided to wait on the sidelines, betting it’s only a matter of time before the sellers begin capitulating. But what’s this? The Canadian Real Estate Association says prices are rising:

“The actual (not seasonally adjusted) national average price for homes sold in December 2012 came in just under $352,800, representing an increase of 1.6 per cent from December 2011. The national average price continues to be influenced by fewer sales in Greater Vancouver and Greater Toronto compared to the same period a year earlier. Excluding these two markets from the national average price calculation yields a year-over-year increase of 3.3 per cent.”

Apart from the absurdity of doing a national calculation excluding two of the top three markets in the country, where almost 30% of the people live (duh), CREA has once again shot its credibility in the foot. The average national price of $352,800 last month was lower (not higher) than in any of the previous three months, and has crumbled 6.1% since the spring.

So, sales eroding at the fastest monthly rate since Ottawa scuttled 30-year mortgages, plus falling prices. What say you, association president Wayne Moen? “National sales activity continues to hold fairly steady.”

Argh. No wonder people like Alan are confused, epicene and mortgaged to the pits. Are things dangerous, or are they stable?

Let’s ask F.

“Well, yeah, I don’t mind prices coming down a bit,” he said yesterday. Fact is, the little guy likes being a bubble-pricker, even when he created it. There’s buzz on the Hill that once the elfin deity rings the juice out of the market, and interest rates head higher in the final months of 2013, he’ll “lift” his mortgage restrictions to “restore affordability” in time for the next election. Yes, Ground Hog Day.

But, if even true, it probably won’t matter. Some economists think we’ve just seen a significant permanent drop in housing demand, which makes some sense. Nine million Boomers are steaming towards retirement, after all, most of them with houses and many in hideous financial shape. Expect a multi-year flood of listings as this crowd desperately seeks to turn real estate into income. Simple supply and demand, based on demographics, tells us prices will be falling for a long time. It also says people who bought in the last three years will wish they hadn’t.

If you have any doubt, look at the chart Saskatoon Housing Bubble just hatched:

House Price and Family Income Growth, 2000 -2010

What this chart says: There’s no economic justification for current house values. They’re based on debt and duct tape. They must, and will, fall. And you can see where.

212 comments ↓

#1 Grim Reaper/Crypt Speculator on 01.15.13 at 10:07 pm

Fiirsszzzztttt

#2 CanadaNewsNetwork on 01.15.13 at 10:10 pm

Chief Spence: Attawapiskat Money Spent on Toronto Condo Investments

http://canadanewsnetwork.wordpress.com/2013/01/15/chief-spence-attawapiskat-money-spent-on-toronto-condo-investments/

#3 Edmontonian on 01.15.13 at 10:16 pm

Good puppy!

#4 [email protected] on 01.15.13 at 10:17 pm

According to the chart GTA will be the least affected.

Learn to read charts. — Garth

#5 a prairie dawg on 01.15.13 at 10:19 pm

Cue Dr. Wayne…

#6 kenken on 01.15.13 at 10:21 pm

Sellers are stubborn! and will not sell
Boomers will think like Alan in today’s blog… they will think that now that prices little lower than peak, they will sell at loss
they will not sell!
and prices will not go down…little bit down maybe…
max 5%-10% over the next few years!!
too bad for those waiting on the sidelines!!

#7 C on 01.15.13 at 10:23 pm

Second :)

#8 mr-b buddy on 01.15.13 at 10:27 pm

well trained puppy

#9 tow mater on 01.15.13 at 10:27 pm

I like how the guy wont consider selling at $480k as he considers it a loss. This type of mentality will cause many people trying to sell in the next few months to lose a lot more. Its funny how people consider their houses liquid cash but this will change when houses sit for months not selling.

#10 ChickenLittle on 01.15.13 at 10:27 pm

I really enjoyed the stat you quoted yesterday where 70% of people believe interest rates will never budge.. the same amount that own homes! Have all of these people been hypnotized, or are they on Ritalin or some other mind altering drug?

I’m sure I’m not the only one who noticed that…I didn’t have a chance to read the comments yesterday.

Schools are obviously doing a fantastic job of teaching students how to think critically.

#11 Paolo on 01.15.13 at 10:27 pm

Trainwreck!

Ponzi of 1999 – 2012 is coming apart.

#12 C on 01.15.13 at 10:28 pm

That graph makes the obvious as clear as day. Record low interest rates for a period longer than anyone imagined has pumped this bubble big time. Check it out smoking man, even if the track 6ers wanted to keep following the crowd, there comes a point where regardless of rates they can’t expand their debt anymore. We’re at that point. You’ve become a track 6er smoking man, stop drinking the kool aid.

#13 AK on 01.15.13 at 10:28 pm

#1 Grim Reaper/Crypt Speculator on 01.15.13 at 10:07 pm

“Fiirsszzzztttt”

I understand that you left work early, skipped dinner and kicked your kids of the computer in order to accomplish your task.
Congratulations, Dude.. :-)

#14 Frog on 01.15.13 at 10:30 pm

Why is Montreal not in there? It’s the second largest city in the country and yet it’s almost never mentioned, save a one liner every once in a while. Enough about To and Van, please broaden the conversation Garth. You said you’d do detailed analysis of other cities ages ago… I’m still waiting.

With a name like that? — Garth

#15 salonist on 01.15.13 at 10:32 pm

Fiirsszzzztttt, at what dude.dumb as a penny in your pocket.

#16 mark on 01.15.13 at 10:32 pm

“Apart from the absurdity of doing a national calculation excluding two of the top three markets in the country”

To realtors it makes perfect sense. I was reading some article last week and at the bottom a realtor from Edmonton (went and googled him) was arguing Vancouver and Toronto should be excluded from the national average because they skew it!

#17 Big Bear on 01.15.13 at 10:32 pm

Quebec is considering assisted suicide. So it begins…

#18 Devore on 01.15.13 at 10:32 pm

Wait, so he paid $355k, its worth $480k today (on a good day probably), but he can’t sell at a loss? Is there some bizarre real estate arithmetic operator I am missing here?

#19 Mr Buyer on 01.15.13 at 10:34 pm

There’s buzz on the Hill that once the elfin deity rings the juice out of the market, and interest rates head higher in the final months of 2013, he’ll “lift” his mortgage restrictions to “restore affordability” in time for the next election. Yes, Ground Hog Day.
…………………………………………………………..
This is an eventuality I did not wish to see happen. There will come a time when this will not matter but turning the taps of easy credit back on will still likely elicit a response or maybe not. The rates have been incredibly low throughout the last 20 years of Japans deflation of the bubble and 20 straight years of property price decline. Turning the taps of easy credit back on may well set one monster of a bear trap. In any event NOW IS NOT THE TIME TO BUY A HOUSE. THE BUBBLE IS COLLAPSING. BUYER BEWARE.

#20 a prairie dawg on 01.15.13 at 10:38 pm

Just heard on ’22 Minutes’:

They were talking about Laureen Harper selling all her investments in 2012.

When asked why, they jokingly replied that she said, “I just found out my husband was in charge of the Canadian economy.”

I just about spit. lol

#21 Mic D'angelo on 01.15.13 at 10:39 pm

It looks to me that housing price inflation jumped about 3.25 times more than median family income from 2000 to 2010 in Toronto. This means that housing inflation in Toronto from 2000 to 2010 should of gained about 25% not the 79% it did. There may of been a little more increase depending on location and real demand and supply not from this low interest rate manipulation getting every Dick and Harry to artificially afford buying houses and condos in the last 10 years. The more hot or attractive locations could at most risen a 40% increase in housing inflation over the last 10 years in Toronto. The last 17+ years is not a normal housing market in Canada as there is usually a correction of say 5%-10% every 5-6 years. This is a Canadian housing market that will correct due to an over supply of condos, houses and demographics of the older Canadian population trying to sell their houses, condos over the next 7-10 years. Capital Markets’ economist Madani said an average 25% correction in the Canadian housing market is coming over the next 3+ years. I agree and it could be a long drawn out slow 7 to 10 year drop with flat prices for the Canadian housing market. In 1995 5 year fixed mortgage rates were 10.25% and today they are about 3.00%. This is the biggest manipulation of interest rates and Real estate in Canadian history.Yes, it is different this time but worse than anything we have ever seen.

#22 AACI Okanagan on 01.15.13 at 10:43 pm

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

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.

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

I am a member of the board so yes, I have all the same data you have. Your logic is still subjective ! If a house sold in 90 days at $500,000 how can you tell us what it would of sold for in 30 days? or vice versa? you can’t because they are other variables to look at, living area of the homes, quality, upgrades, topography, extras and list goes on. Now if you had a home that sold in 30 days and then you relisted the same home the next day and it sold in 60 days for a different price then you have might have something, other than that you are just generalizing with your stats. Think paired data set analysis . I never called you a liar. Chill

#23 From Mississauga with Love on 01.15.13 at 10:44 pm

what exactly are the rumours about F relaxing some restrictions later on in the year as interest rates head higher?
what parameter will he adjust? GDS ratios? amortization periods back to 30 years? or ok to go back to liar-loans (oops, I meant stated income)??
what’s the rumour there?

#24 a prairie dawg on 01.15.13 at 10:46 pm

Follow the money.

http://www.businessinsider.com/how-millionaires-plan-on-investing-2013-spectrem-2013-1

#25 Nick on 01.15.13 at 10:46 pm

@Garth.

“he’ll “lift” his mortgage restrictions to “restore affordability” in time for the next election.”

You really think that???:

http://www.theglobeandmail.com/globe-investor/investment-ideas/why-lower-home-prices-are-a-national-priority/article7233016/

#26 Dr. WAYNE on 01.15.13 at 10:46 pm

1 Grim Reaper/Crypt Speculator on 01.15.13 at 10:07 pm

Fiirsszzzztttt

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

With the unselfish assistance of Mr. Turner and his brilliant insight into the mentality of those whose mindless presentation of letters supposedly spells some bizarre term likened to ‘FIRST’, I now add an adjective to my descriptor. This adjective from the Master himself is ‘idiot’ … so … now these misfits are ‘IDIOTIC a$$holes” … (a posterior orifice of, pertaining to, or characteristic of an idiot).

#27 CrazyCanuck on 01.15.13 at 10:46 pm

#2 CanadaNewsNetwork
from your link: Chief Spence: Attawapiskat Money Spent on Toronto Condo Investments

DELETED at request of poster.

#28 Jaguar on 01.15.13 at 10:48 pm

The 70% of people who believe interest rates will never rise are likely also not aware of how significant a small increase in rates could impact their monthly case flow. They are already ‘robbing Peter to pay Paul”, and many are tapped out on the lines of credit they took out on their homes to purchase their toys or fund lifestyles they cannot really afford…cars, trips, timeshares, renovations which won’t save them when they find themselves in a negative equity position once great reckoning occurs…..
There are continued references to home sellers taking a ‘time out’ as sellers do the same, but it could also be that they have realized that once the dust settles, there simply will not be enough money after realtor fees, legal fees, and possibly penalties to their financial institution to pay out the leveraged positions on their homes. Very sad, but as Clint Eastwood said in Unforgiven…”We’ve all got it comin’, kid”. A ‘rude awakening’ awaits many.

#29 [email protected] on 01.15.13 at 10:48 pm

According to the chart GTA will be the least affected.

Learn to read charts. — Garth

Okay it’s Ottawa – the author of the graph has sorted them.

#30 Rob on 01.15.13 at 10:49 pm

Sellers who are stubborn are only reducing the opportunity to eacape the deflation by selling to a greaterfool. But it probably to late for them now. ALSO the seller does NOT set the price, the buyer does. And now the buyers are choosing to set the price at lower levels by refusing to buy.

#31 Mr Buyer on 01.15.13 at 10:53 pm

#6 kenken on 01.15.13 at 10:21 pm
Sellers are stubborn! and will not sell
……………………………………………………………….
There are many countries in the recent past that clearly demonstrated quite the opposite. Sellers will sell and at almost any price going forward. I would suggest that sellers not wishing to get burned should think about keeping their houses and carrying the debt until it is repaid. There is not pot at the end of this rainbow. Tons of Japanese did just that. Paid the debt off after two decades. By the way, that still did not prevent prices falling. Buyers will likely be forced to be stubborn so to speak as they can no longer borrow as much as they once did. There was a saying that used to be quite popular in the 1970s. It was ‘house poor’. It had to do with a family over extending to get into a house and living lives of considerable deprivation all be it inside a nice house. This saying served as a warning to people to not over extend themselves. Shiny new house with a rusted out car in the driveway that may or may not start for the last time any given morning with no way of getting another car when the inevitable comes to pass. Minimum monthly payments made on credit cards one day to be taken out as cash advances a day or two later (no internet or ePayments then so it took a day or two or seven). Sellers are kidding themselves if they think there are great numbers of flush buyers ready to snap up their severely over priced poorly built and likely sadly maintained houses. By summer it will be well and clearly entrenched in the public psyche that houses go down in value like anything else that is severely overpriced and it will be all she wrote for a generation or two. BUYERS BEWARE.

#32 wazza on 01.15.13 at 10:54 pm

I guess if you forecast it long enough it’ll come to be. Real estate values go up then they go down. What’s your point Garth?

#33 Inglorious Investor on 01.15.13 at 10:56 pm

If you listened to the RE news reports in the MSM today, you’d hear the same basic text across the alphabet soup of media outlets, which went something like this:

“Housing sales are down, but don’t worry, prices are up.”

This is supposed to play to the so-called ‘wealth effect’: when house prices rise we feel richer. However, wealth is a relative thing. You are only wealthier if you have more wealth than those around you.

So when over 70% of households (i.e. almost everyone for all intents and purposes) either own homes or rent-to-own homes from the bank, how can anyone be ‘richer’ if the price of everyone’s home is going up together?

But while rising home prices really don’t have a true positive effect on the relative net worth of home owners, they do have a negative effect on those who wish to buy a home. And rising home values can make home ownership more expensive for home owners also, by giving municipalities an excuse to increase property taxes, for example.

As for arbitrage, unless you plan to move from a high-cost area to a low-cost area (as I recommended for retirees with overvalued homes and dreams of repose in Florida) then when you sell your overvalued home, you have to buy another overvalued home somewhere else.

Or you can rent. But unless you really want to rent as a lifestyle choice, I think treating your residence like a block of RIM shares and trying to time the market is utterly foolish.

So why do we collectively cheer when home prices go up after they’ve already gone up far more than is justified by incomes and economic growth? I think Canadians need to take a step back and think about that the next time the MSM trumpets a report by the RE cartel.

And if you like home-related shows, maybe watch less House Hunters and a bit more Bitchin’ Kitchen. Nadia G’s a hoot.

#34 Frustrated Kiwi on 01.15.13 at 10:57 pm

Alan’s strategy is exactly the same as one I commented on a few days ago that I am seeing here in Auckland. Young people buying the only house they can afford (which is one they wouldn’t want to live in) so that they are “in” the property market. I’m curious – are crappy houses in bad neighbourhoods likely to decrease more percentage wise when the market corrects? My gut says yes, but I’d be interested in data or other opinions.

#35 The Man From Nantucket on 01.15.13 at 11:02 pm

#4 [email protected] on 01.15.13 at 10:17 pm
According to the chart GTA will be the least affected.

Learn to read charts. — Garth

———————————————-

I once read one correctly. Maybe lightning can strike twice.

Toronto’s chart shows price growth : income growth of 4 (as does Van).

The ratio for Canada and most of the other bubblicious markets is 3 ish or less.

Bigger bubble, louder sound when it pops.

#36 Smoking Man on 01.15.13 at 11:03 pm

The rhetoric is intense, msm helping the dwarf daily so scare some inventory on the market. The star reports, Market defying gravity.

why can’t anyone see the obvious. where you going to go, an apartment, a crazy expensive house, lets face it jane finch rentals, and there are alot of them scew the average rent price stats down, who the hell wants to live there.

reality rent in a nice place, with out worrying about gang bangers is expensive….

Sales are down in toronto, cause nothings for sale…..

#37 Toronto_CA on 01.15.13 at 11:04 pm

#27 CrazyCanuck on 01.15.13 at 10:46 pm

You do realize that was a satire website? Like the Onion? Oh lord.

#38 goingdown on 01.15.13 at 11:04 pm

This realtor started a blog about prices dropping. What do you think his objective is?
jefffeaver.wordpress.com

#39 East Van on 01.15.13 at 11:06 pm

Here is my long term prediction for the housing market:

In 2020 global warming will make life in the US very difficult. Drought will destroy crops, the Mississippi will no longer be navigatable for much of the year. Super-storms like Sandy will be common place displacing millions. People will starve.

Canada will also be badly affected, but people from the US and other catastrophically affected countires will be streaming into the great brown north.

I would suggest that you buy property in tuktoyaktuk. Maybe start a mango farm…

#40 Just Checking on 01.15.13 at 11:07 pm

#27 CrazyCanuck on 01.15.13 at 10:46 pm

In case you didn’t notice, the article in post #2 is not a legitimate news site; fiction intended as humour.

#41 prairie person on 01.15.13 at 11:08 pm

Is this statement about Chief Spense real or fictional? The site has a tag that says satire.

If L Harper sold all her stocks and no reason was given, is it just that she knows what is coming and is getting off the train before it goes off that railway bridge into a gorge? Check and see if the MPs of Ottawa are all dumping their investments.

Non-story. — Garth

#42 Don on 01.15.13 at 11:08 pm

@ #6 kenken on 01.15.13 at 10:21 pm

Sellers are stubborn! and will not sell
Boomers will think like Alan in today’s blog… they will think that now that prices little lower than peak, they will sell at loss
they will not sell!
and prices will not go down…little bit down maybe…
max 5%-10% over the next few years!!
too bad for those waiting on the sidelines!!
******************

The herd mentality works on the way up and flips and works on the way down also. Some Boomers have used helocs to fund cars, and those house reno’s. Everyone I have spoken to has or is doing a reno – hard to compete with other sellers if you haven’t and plan/need to sell. It only takes a few to tip the scale. There will be a need for some to sell.

#43 Vangrrl on 01.15.13 at 11:09 pm

Oh wow, a 33 yr old “man” taking advice from his mother (and actiong on it) in regards to something so important is reaaaaally disturbing.

#44 Ms bboomer on 01.15.13 at 11:12 pm

Regarding #13 AK’s response to #1 Grim Reaper/Crypt Speculator’s “Fiirsszzzztttt”: “I understand that you left work early, skipped dinner and kicked your kids off the computer in order to accomplish your task.
Congratulations, Dude.. :-)”

LOL! So funny, and much more witty and pleasant than Dr Wayne’s negative comments; thanks AK! And btw, Grim, congrats from me too! Lighthearted responses feel so good, there are some funny people on this blog.

#45 Smoking Man on 01.15.13 at 11:12 pm

Vlad

King Lincoln is seriously under estimating the resolve of the nation……….

He has but one more day to think about it before he turns the ship toward the falls. To bad he’s just a TelePrompt actor and takes orders for the same moral people that blew up building 7……

And we are worried about real estate…………

#46 Sotiri on 01.15.13 at 11:21 pm

http://www.economist.com/news/finance-and-economics/21569396-our-latest-round-up-shows-many-housing-markets-are-still-dumps-home?fsrc=scn/tw_ec/home_truths

#47 coastal on 01.15.13 at 11:22 pm

“In Victoria 87 properties have sold so far this year compared with 372 in the same period last January. That’s a melt of 76%.”

Just to clarify Garth, if the rest of the month goes the way of the first two weeks then approx. 174 sales will mean a 60% drop would it not ? 372 is the total monthly number. That is still considered a major crash in sales to me.

Quite so. The correction is appreciated. — Garth

#48 Stupesing in Cabbagetown on 01.15.13 at 11:24 pm

#27 CrazyCanuck – I too was horrified when I first read that article. Then I realized that it was an “Onionesque” joke. “Canada News Network is a web site dedicated to satirical news coverage of contemporary events in Canada. Please note that news articles are satire, and are not real news, even though they are typically and loosely based on real events and personalities.”

#49 Freedom First on 01.15.13 at 11:26 pm

Reading about Alan reminds me of a saying I heard years ago, and immediately took to heart: “A smart man learns from his mistakes, while a wise man also learns from the mistakes of others”. Most unfortunately, but not surprisingly, Garth had to personally inform Alan he made a grave error in judgement by not selling. Please keep your blog going Garth, I enjoy reading the posts from the people who are grateful for your advice, and took it before committing financial suicide. Balance, liquidity, diversity, and debt free…….works for me.

#50 Canadian Watchdog on 01.15.13 at 11:27 pm

#35 The Man From Nantucket #4 [email protected]

According to the chart GTA will be the least affected.

Simplified for non-chart readers Chart

#51 CrazyCanuck on 01.15.13 at 11:28 pm

#40 Just Checking & #47 Stupesing
Yup, thus time I got suckered. Should have read the other info on the page rather than just the article. My bad.

#52 };-) aka D.A. on 01.15.13 at 11:30 pm

#22AACI Okanagan on 01.15.13 at 10:43 pm
#231 };-) aka D.A. on 01.15.13 at 9:48 pm

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.

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

I am a member of the board so yes, I have all the same data you have. Your logic is still subjective ! If a house sold in 90 days at $500,000 how can you tell us what it would of sold for in 30 days? or vice versa? you can’t because they are other variables to look at, living area of the homes, quality, upgrades, topography, extras and list goes on. Now if you had a home that sold in 30 days and then you relisted the same home the next day and it sold in 60 days for a different price then you have might have something, other than that you are just generalizing with your stats. Think paired data set analysis . I never called you a liar. Chill

Did you do the search? Do it.

Don’t over analyze it.

Based on large samples and the average for the different criteria I suggested you search and compare you will see, and have to agree, the pattern that supports what I pointed out to you.

Don’t over analyze it just do the search, do it with such a range of dates and area that the sample won’t skew one way or the other but prove to you, beyond a shadow of a doubt, the facts of the matter: The longer a home sits on the market the lower the ultimate selling price will be. You’ve heard of listings going ‘stale’ haven’t you? You know that viewing activity is strong in the first couple weeks and then reduces to a trickle if the home does not sell soon? You understand that you have just one chance to make a first impression right? When I am out with buyers we tend to search out homes that have been on the market more than 50 days as the sellers are suddenly being faced with a bout of reality. Unfortunately they also find they need to make a greater price concession to rekindle that lost market interest. This is where you find the better deals although nothing is so good a deal as the ‘right’ home at the ‘right’ price.

It’s marketing AAIC. Trust me this is the way it works. A home that it priced intelligently out of the gat such that it sells in 50 days or less almost invariably sells for more than were it, or any other priced even 2.5% too high and subsequently took a more typical 100 days to sell.

As far as the subjectivity goes, you appear a smart man. Figure out a way to remove it from the stats you have at hand. Trust me this is fact.

Actually, ya know what. Don’t do that. Don’t figure it out. Let the Blog Dawgs be kept in the dark

#53 Mel on 01.15.13 at 11:31 pm

Interest rates will rise in 2015, not in 2013-2014.

Stock markets will be lower by 45% by end of 2014 early 2015.

House prices will be lower by at least 45-50%. Some areas will be lower by 70-80% in the next 5-8 years.

You made all that up, right? — Garth

#54 Inglorious Investor on 01.15.13 at 11:33 pm

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

Thanks for the advice and the link re: pay at the pump in the US.

Some people criticized my comment as if I’d never actually purchased gasoline by the US gallon. Maybe I did not explain myself fully, but I’ve been to more of the Lower 48 than I can recall off-hand. Buying gas in many stations in the US makes one feel like a latent criminal. But then again, maybe their Big Brother tactics are justified. It’s happening more in Canada too.

#55 Smoking Man on 01.15.13 at 11:38 pm

Smoking Man in Sept and Oct, Short AAPL, Long SamSung…….62% Oh Ya……………………..

The Schooled, ba hahahahahahah

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11-Jul-12 Initiated UBS Buy $740
12-Jun-12 Reiterated Canaccord Genuity Buy $775 → $800
30-May-12 Reiterated ISI Group Buy $525 → $650
23-May-12 Reiterated Oppenheimer Outperform $700 → $680
26-Apr-12 Reiterated Hilliard Lyons Buy $660 → $740

#56 Smoking Man on 01.15.13 at 11:48 pm

I see it now a new university course, called herd dynamics.

Professor Smoking Man

#57 EIT on 01.15.13 at 11:53 pm

As if people are questioning the:

“he’ll “lift” his mortgage restrictions to “restore affordability” in time for the next election.”

That’s a no-brainer. Who knows, maybe high interest rates will save boomers.

#58 EIT on 01.15.13 at 11:59 pm

I think I just found Garth from when he was younger:

http://fineartamerica.com/featured/blow-in-her-face-she-will-follow-you-anywhere-rianna-stackhouse.html

#59 GLK on 01.16.13 at 12:13 am

“There’s buzz on the Hill that once the elfin deity rings the juice out of the market, and interest rates head higher in the final months of 2013, he’ll “lift” his mortgage restrictions to “restore affordability” in time for the next election. Yes, Ground Hog Day.”

Well, ultra low interest rates did not save the US market, wher you could lock for 30 years at such rates (3%). In Canada, not possible.

#60 Canadian Watchdog on 01.16.13 at 12:17 am

#52 };-) aka D.A. #22 AACI Okanagan

“Log in and pull up all the listings that sold in 50 days or less”
“Don’t over analyze it.”

Better yet, post it online. I’ll analyze it in two minutes.

#61 jules on 01.16.13 at 12:30 am

Easy “paper gains” are hard to give up as is evident in Allan’s case, it is called “GREED”!

#62 Neta on 01.16.13 at 12:38 am

First of all, if our Honorable Minister of Finance “don’t mind prices coming down a bit” that means they will go down a bit and we are to see what this “a bit” will going to be.
There is a good reason why F is getting increasingly concerned with disconnect between our bubble induced wealth and the economic fundamentals. Few days ago there was an article in G&M lamenting alarming loss of well paid manufacturing jobs in Canada, especially in Ontario that became a “not have” province not so long ago. What is missing there is any understanding why these jobs are leaving in ever accelerating rate
Caterpillar is moving its locomotive manufacturing to Indiana where they are going to pay American workers $14/hr, and no CAW hysterics and media outrage will alter the fact that CAT is doing exactly what economics dictates them to do. So, the question is why US folks have no problems working for $14/hr, while out workers refused to accept 50% pay cut and match what Indiana’s offer. Just consider that young and energetic Indiana folks in their prime, 25-35 years old, who just landed CAT jobs, are buying $60K houses with 4% 30 year tax deductable mortgages and paying a third of what we spend on our car insurance, 20% less on gas, internet, phone, etc… And what about their counterparts in young and energetic Canadian manufacturing heartland? Well, our young and energetic guys in their prime 25-35 are forced to plunge into $500K townhouses and $750K 3 bdrm 50 year old bungalows. Add to it 60% higher auto insurance, 30% higher phone, internet, 20% higher gas prices, and it becomes obvious that we here cannot survive on $14/hr. Just to cover basic cost of living we need at least $25-30/hr, and it becomes increasingly expensive for corporations to run business in Canada. There are few options to attract business – one is to increase the productivity to compensate for more expensive labor (yea, and lagging in productivity to US by 20% is not a good starting position). Another option is to devalue the Looney (again, try to do it when every investor knows that Canada is the best place to park their money due to the most prudent financial system and the fact that Canadians came out of 2008 crisis richer than ever, thanks to ever expanding real estate values). And what about our Government? Government is supposed to rise to the occasion and offer Corporations money to stay in Canada, right?
Right, this is what our Government occasionally doing, but without addressing the fundamental problems mentioned above, any attempts to bribe Big Business to stay in Canada will be as short lived as the life span of these injections. In the long run we cannot bribe our way into the economic prosperity.
And until our workers cannot offer CATs of this world a similar conditions as Indiana folks, Canadian economy will be slipping deeper and deeper, lagging American recovery and putting incredible misery on pour ever shrinking middle class.
Our Honorable Minister of Finance has very difficult choice to make, and I hope, I just hope…..

Regards,

#63 Suede on 01.16.13 at 12:39 am

#39 East Van

Global Warming’s head cheerleader Al Gore just sold his tv network Current TV to Al Jazeera, whose owners include the ruling family in Qatar. Main export = oil.

Means they make a ton of cash and are contributing to Global Warming. Conflict of moral interest for Gore? hahahaha. Not for $500M!!

I would love to see some Mad Vlad links on this story. Wonder how Gore’s Current TV employees feel about his about face!?

#56 Smoking Man – James Dines tried to tackle the subject with his book “Mass Psychology”. Digs into contrarian thinking.

I don’t think Dines was the cool kid in high school or college though, so he missed the point on how to influence….only details how to spot and follow or spot and GTFO.

#64 TimV on 01.16.13 at 12:41 am

Just some statistics from the East York portion of Toronto. Note that some days worth of sales are unfortunately missing, esp in December where the data format randomly changed for a couple days.

Anyhow, the most interesting one (for all East York):

April: 63 of 97 detached sold over ask
April: 36 of 50 semi sold over ask

December: 6 of 40 detached sold over ask
December: 1 of 10 semi sold over ask

No further comment on those numbers…

Some anecdotal comments, though – I’ve seen several tear-downs go for more than I would have guessed based on location + frontage. Given that tear-downs are the exception, not the norm, it may just be noise … but bears watching.

I originally began tracking these statistics to validate (or invalidate) Garth’s “Leaside” hypothesis. With that in mind:

Tony neighbourhoods:

Beaches: $869k avg in April dropped to $705k avg
South Riverdale: $627k increase to $630k avg

An-tony neighbourhoods:

O’Conner Parkview: $603k increase to $648k
Birchcliffe-Cliffside: $495k drop to $489k
Oakridge: $330k increase to $353k

Notably, Playter Estates went from $1056k to $769k in November, and <= 2 sales for December. North Riverdale (another expensive area) looks noisy but flat.

I'm tempted to say that this is the exact opposite of the Leaside hypothesis, but the more honest answer is that the data do not speak clearly. However, as time passes and more data come in, I become increasingly suspicious of the Leaside hypothesis, at least when stated in the form of "traditionally expensive areas will see a smaller price decrease".

#65 Ronaldo on 01.16.13 at 12:44 am

TO THE FIRST POSTERS

”The Village just called. They said they were missing their town idiot, I couldn’t really understand them, but I think they were saying the name was yours…
Author Unknown”

#66 a prairie dawg on 01.16.13 at 12:44 am

Damn. I should have said this instead:

Doctor Wayne, code blue in room #1.

Doctor Wayne, code blue in room #1.

Think it through…

lol

#67 AACI Okanagan on 01.16.13 at 12:48 am

#52 };-) aka D.A. on 01.15.13 at 11:30 pm
————————————————————

DA you are generalizing, unless you take out the variables as I explained you don’t know if that 3% or 5% or what ever difference in selling price contributes to just the marketing period. (ie: 30 over 90 days). I do lots of ligation reports and I can tell you that lawyers would have a feast with me if I presented your theory as fact.. regards

#68 Ogopogo on 01.16.13 at 12:49 am

Quick question. Does anyone know the veracity of the allegations I keep hearing on the Globe & Mail about the notorious shill who goes by the handle “whazzup” in the comments threads being our very own blog legend Smoking Man?

Please tell me this isn’t true.

#69 AACI Okanagan on 01.16.13 at 12:51 am

#60 Canadian Watchdog on 01.16.13 at 12:17 am

#52 };-) aka D.A. #22 AACI Okanagan

“Log in and pull up all the listings that sold in 50 days or less”
“Don’t over analyze it.”

Better yet, post it online. I’ll analyze it in two minutes.
————————————————————–
No need, the variables between the sales are very clear which reflect in the difference in their selling prices.

#70 The moneyger - I would feel bad for houses price to fall... on 01.16.13 at 12:57 am

I would feel bad for houses price to fall, I was planning on quickly relieving a lot of pressure from overly-stuffed pockets of affluent buyers from Toronto’s over-sized corporate\government management structure, you know, like a good citizen, doing a service to society.
Too bad they will now have to pay all of this later plus the carying costs on my investment until then. Just to be notified boys, I am not offering you a key turn solution for a low return on investment. So, happy renting. Enjoy the cute little rodent babies, zooomy cockroaches, terific exotic smells and all happy neighbors looking to donate some of the extra bedbug population!

On the other hand, if they (house prices, not the rats) crack 50% I can buy a few more good houses for peanuts, arrange, and temporary rent to above mentioned social category (this is called owner keeps the upper hand).

Win-win either way, that’s how investing should be positioned/planned. Learn my boys.

Maybe I even copyright “The moneyger” :)

#71 The moneyger - To #43 Vangrrl on 01.16.13 at 1:05 am

#43 Vangrrl on 01.15.13 at 11:09 pm
Oh wow, a 33 yr old “man” taking advice from his mother (and actiong on it) in regards to something so important is reaaaaally disturbing.
=====
Hmm, so you think it was SAFER for him to take advice from his girl-ish-friend? $10000 the ring and $million Mc Mansion?
Dare to answer truthfully :)

#72 Nostradamus Le Mad Vlad on 01.16.13 at 1:06 am

-
“They’re based on debt and duct tape.” — Isn’t that what the new bridge and the stadium roof in Vancouver are built from?!

“Fact is, the little guy likes being a bubble-pricker, even when he created it. Nine million Boomers are steaming towards retirement, after all, most of them with houses and many in hideous financial shape. This is why it’s far easier to like dogs.”

Admittedly and proven, the vast majority of men are pathetically stupid, and ladies are better having a stimulating conversation with a piece of toast.
*
#208 Stew on 01.15.13 at 7:15 pm — Hmmm. Well, whaddaya know? You may be on to something there. May not be HI, but something’s cooking.

#43 Vangrrl — Agreed.

#45 Smoking Man — “And we are worried about real estate…………” — I know. Daft, isn’t it? Depop., natural or otherwise, will cull our herd. 13:34 clip A US Vet says TSHTF soon, so I get your drift!
*
Garth – Bernanke reads financial blogs. Yours too? Iran Phasing out US$ and Euro (that will stir the teapot in the west); 57% of illegal immigrants on welfare; Down and Out, but nice recovery; DC’s Economic Boom Financed by taxpayers, and More taxes New pay-per-mile increases taxes by 250%; 1:40 clipObummer’s non spending cuts, just increased taxation; 7:47 clip Downtown Toledo;s collapse. Klinger (MASH) would not be happy; Big Deal “If Obama gets your guns, next he will come for your gold. Roosevelt did it in 1933, and for the same reasons, to save the Wall Street boys (even as they plotted a coup against him in secret).” wrh.com; Dump Best Buy!
*
Monsanto’s Frankenbee Coming soon, and GE Crops affecting soil; Oops! Too close for comfort; Train Wreck A newer version of the west’s economies; Pornography affects most life forms; New Guard Croc? Check the dentures; Willard A little over the top; Israelis leaving? 40% want out; 5:01 clip Chinese tunnels built in preparation of US nuke attack; EUSSR If Cameron wants out of the EU, now would be a good time to put the pedal to the metal; Chinese Plant Compounds seem to eradicate cancer quickly; The Shark Whisperer Pix are interesting; Check burgers XL Foods doesn’t have a great reputation; Walmart Backtracking on ammo? Two in Two Two gun makers killed in two days, but no questions; Smart Guns There are Smart Cars, Smart Meters, Smarties etc.; Red October Global spy network uncovered by Russia; 4:22 clip Real reason for the balkanization of Syria; 9:59 clip Bill Hicks, anti-establishment comedian cut from Letterman’s guest list; The headline is catchy, but the story is fascinating; The Sun and Flu Connection? Identical US govt. and Nazis. See headline; Aaron Swartz See headline; Soap and water are better for washing hands, not this anti-bacterial stuff.

#73 R. Olausen on 01.16.13 at 1:11 am

Canada is going to West Africa, all the while holding hands with France (Algeria). Some other Harper pal goes into a hot neighbourhood and gets their tail shot up. Who ya going to call, good “ol Uncle Sam”. No Bond bubble bust, no Gold bust, no Oil bust, and just maybe there is not enough condos in Toronto. All underwater types take faith, these are not preposterous imaginings. I still think I was $ 20,000 richer the day Saddam Hussein dropped the unlucky 13 feet.

#74 The moneyger - To #62 Neta on 01.16.13 at 12:38 am on 01.16.13 at 1:12 am

Dear, they will print money and keep all employed.

You forgot we still have a printable currency, we have not joined the EURO or USD.

Expect CAD to go back to 1.6CAD for 1USD once they recover and we sink (2-3 years from now). Your CPP/RRSP going 60% down for that fact.

I am doing a review on what long term wholesale goods to store in my huge clean-air pretty-high crawl space, to sell at a 10% + profit a year.

ANY ideas or LINKS blog dogs would be appreciated.

#75 Cici on 01.16.13 at 1:20 am

#9 towmater
#18 Devore

As puzzling as it may look in print, the guy has had the place for about four years and there are a lot a variables to take into consideration, such as:
1. Possible lost rent (if there was a dry spell without tenants)
2. Possible renovation costs (in addition to lost rent revenues if major renos were being carried out).

And then of course, even if #1 and #2 weren’t applicable:
3. Initial upfront closing costs (realtor fees, the infamous “land transfer tax” for Ontario residents, inspection costs, etc.)
4. Four years of carrying costs, including property taxes, operating and maintenance costs, mortgage payments lost to interest (apparently 50% of your mortgage payments go to the bank’s pocket in the first four to five years of home ownership, and the lower the initial downpayment, the greater the damage)
5. Selling costs (realtor fees, taxation applicable to non-principal residence).

My guess is that the carrying costs, mortgage payments lost to interest, land transfer tax, and realtor fees alone were enough to wipe to out any gains, especially if he had a low initial downpayment. Then go factor in operating expenses, annual property and school taxes, renos and maintenance.

In summary, I bet the balance on his HELOC is higher than the paper “gains.”

#76 Cowpie on 01.16.13 at 1:33 am

“Sellers are stubborn! and will not sell”
______________________________________________

kenken:

Buyers are more stubborn. Many potential “buyers” on this site will be deciding to invest their $$$/down payments, but not in real estate.

Meanwhile sellers are pouring their $$$ into taxes, repairs, upgrades, landscaping and “staging”. Poor, poor sellers.

Sounds like an old fashioned showdown. Let’s see who blinks first.

#77 Cici on 01.16.13 at 1:34 am

#33 Inglorious Investor

Great post!

#78 Hoof - Hearted on 01.16.13 at 1:37 am

Fer Dr . Wanker and Co….

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

Best friends graduated from medical school at the same time and decided that, in spite of two different specialties, they would open a practice together to share office space and personnel.

Dr. Smith was the psychiatrist and Dr. Wanker was the proctologist.

They put up a sign reading: “Dr. Smith and Dr. Wanker: Hysterias and Posteriors.” The town council was livid and insisted they change it.

So, the docs changed it to read: “Schizoids and Hemorrhoids.” This was also not acceptable, so they again changed the sign. “Catatonics and High Colonics.” – No go.

Next, they tried “Manic Depressives and Anal Retentives” – thumbs down again. Then came “Minds and Behinds” – still no good.

Another attempt resulted in “Lost Souls and Butt Holes” -unacceptable again!

So they tried “Analysis and Anal Cysts” – not a chance.

“Nuts and Butts” – no way.

“Freaks and Cheeks” – still no good.

“Loons and Moons” – forget it.

Almost at their wit’s end, the docs finally came up with:

“Dr. Smith and Dr. Wanker – Specializing in Odds and Ends.” Everyone loved it.

#79 Smoking Man's Old Man on 01.16.13 at 1:54 am

#6 kenken

Got news for you. Lots of circumstances can arise in life that force people into selling their home. Divorce, illness, or job loss for instance.

#80 Dr. WAYNE on 01.16.13 at 1:56 am

#44 Ms bboomer on 01.15.13 at 11:12 pm

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

Hey Ms. … in the event you haven’t figured it out yet, this isn’t a popularity contest … bring it on …

#81 popados on 01.16.13 at 2:14 am

last month a new house went on the market here in richmond.asking price2.6 mil.asses.1.5 what is going p.w?

#82 Soylent Green is People on 01.16.13 at 2:30 am

Repost from xxxx ~ Vesa Peltonen Want one of the few books that tells both sides of the story…then you can get my book through Xlibris as softcover or e-book. One is less expensive.

>’Culturally Submerged [Journey of a White 'Rez' Teacher']

http://www.vpeltonen.com/artworks/book-publishing/

http://bookstore.xlibris.com/Products/SKU-0079260003/Culturally-Submerged.aspx

…….

Aylwin Lo @aylwinlo

Streaming for free for a limited time from @thenfb, check out this 1-hr doc about Attawapiskat. #idlenomore http://www.nfb.ca/film/people_of_kattawapiskak_river/

#83 M on 01.16.13 at 2:32 am

That’s more like it, Garth :) Good job !!

Woff, woff,woff…wwwooooowwwoowwwff woff woff…

#84 Marko Juras on 01.16.13 at 2:35 am

DELETED

#85 Soylent Green is People on 01.16.13 at 2:38 am

.

RT @22_Minutes – Laureen liquidated her entire stock portfolio b/c suddenly became aware her husband was looking after the economy #cdnpoli

.

#86 tkid on 01.16.13 at 3:40 am

If Alan’s selling expenses add up to 10% of the sale price … he walks away with $80,000. How is that selling at a loss? Is there an expense I am missing?

#87 LV1 on 01.16.13 at 3:49 am

Garth I feel your pain. What is it that could possibly make somebody think that in a low sales volume market the seller has the leverage? There are always motivated sellers, they will keep dropping the price until the sale. Am I insane or will it not be the buyers that also set the price support level when the bottom is reached? My favorite so far….boomers are stubborn. Yeah, right up to the point their bank account and retirement is used up, or they fall down the stairs break their hip and end up in assisted living. Boomers paid pennies on the dollar compared to todays prices if they have to cash out they will in a heartbeat.

#88 Humpty Dumpty on 01.16.13 at 4:00 am

Duct tape wont fix this either…

Egon von Greyerz has stated there may be as much as $200 trillion worth of debt in the world. Superimposed on that is a derivatives pile that if correctly accounted for would be well over $1 quadrillion of notional value. When you think about that, it can’t possibly be repaid or even serviced as we go forward. So the only option is to print more money in order to give the impression the financial system is holding together.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/14_John_Embry_-_Silver_Will_Soar_Hundreds_Of_Dollars_Higher.html

I owe silver awayyyy….

#89 drydock on 01.16.13 at 4:03 am

#6

I love the smell of desperation in the morning.

#90 drydock on 01.16.13 at 4:08 am

#17

DELETED

#91 The great german metals repatriator on 01.16.13 at 4:14 am

Who needs a profesional fund manager, when a tin of tuna a day is all you need :-)
The whole stock market is one great casino….

http://www.smh.com.au/executive-style/culture/moggy-shames-experts-in-shares-game-20130115-2crbz.html#ixzz2I6lYywcd

#92 drydock on 01.16.13 at 4:20 am

http://www.smh.com.au/executive-style/culture/moggy-shames-experts-in-shares-game-20130115-2crbz.html#ixzz2I6lYywcd

The above link proves beyond a shadow of a doubt that cats rule.
Enough of this canine bs all the time, we all know it was the dumbass dog that trashed the Christmas tree.

#93 juno on 01.16.13 at 4:27 am

#6 kenken on 01.15.13 at 10:21 pm

Sellers are stubborn! and will not sell
Boomers will think like Alan in today’s blog… they will think that now that prices little lower than peak, they will sell at loss
they will not sell!
and prices will not go down…little bit down maybe…
max 5%-10% over the next few years!!
too bad for those waiting on the sidelines!!
================
Yes your right seller are stubborn, but unlike Bre-X or Nortel, the investor would of bought the stock with real money not debt (mortgage). If there is no upside pressure and lots of lots of downward pressure all it takes is a few houses in the district to place a chink in the armor and the whole house of cards will crumble.

What garth is saying is there is lots of downward pressure.

1) Baby boomers retiring and need cash to maintain their standard of living. You can’t go into retirement with a mortgage, Eventually your run out of cash or live on mac and cheese in the few remaining years of your life.

2) People who are top load on their mortgage will have to maintain their mortgage and housing cost with 60 to 80% of their income. (they are already dead, how does a guy with 100G income live on 10,000 dollars a year after 80% goes to their house and the rest goes to taxes.

3) US printing will eventually cause inflation meaning higher interest rates to balance against inflation. I hope OB eliminates the debt ceiling. Its completely not responsible, but when have government ever been responsible. If US rates or Euro stabilizes, then Canada will have to raise rate due to external pressures, otherwise your have a symetrical currency problem. You can borrow a Canadian dollar at 3% cost and buy a green back or Euro returning a higher rate. With more potential of an upside since the correction in those countries has already been accounted for.

#94 NoName on 01.16.13 at 6:12 am

We all know what is about to happen with real-estate in Canada, but funny thing now days is generational grudge.

Boomers vs Gen_X vs Gen_Y. Boomers are slowly coming to the realization that there is not enough
Gen_X’ers to but all their McMansions, and that Gen_Y will never move out
.

It is kind of interesting to see big difference between Boomers and Gen_X, but yet they are sharing same opinion about RE, unlimited upside with virtually now downside, because you have to live somewhere…

Gen_Y don’t care about RE or for mater of the fact, they don’t care about anything, they are to busy texting, and clicking “like” on FB.

While Boomers and Gen_Y share same opinion about Gen_X’ers, that we are all bunch of whiners and
complainers, they are so arrogant to realize that they are ___________ of their own demise.
Boomers with their antiquated theories that worked 50-60 years ago, and Gen_Y is to self centered to
realize that participation trophy is worthless.

It is kind of interesting to see big difference between generations, but yet they are sharing same opinion about RE, unlimited upside with virtually now downside, because you have to live somewhere…

just my daily rant…

#95 The real Kip on 01.16.13 at 6:58 am

Thanks for not deleting my post yesterday, I feel I am making progress with you. We’re bonding.

You are everything I could want in a crane operator. — Garth

#96 drydock on 01.16.13 at 7:57 am

http://m.guardiannews.com/money/2013/jan/13/investments-stock-picking

Above is an update on the cat.

#97 Smoking Man on 01.16.13 at 7:58 am

#68 Ogopogo on 01.16.13 at 12:49 am

Whazzup lives in Ottawa, Me long Branch, he and I wherethe only 2 bulls on G and mail , back in 2009, buy stocks, buy, housing.

I quit blogging on G and m cause on election topics, fat basterd had thousands of paid hasbra Blogger. Pissed me off. Plus they never made me a catalysts, I was 10 times more famous there than anyone.

#98 CJOttawa on 01.16.13 at 8:17 am

Garth wrote, “Nine million Boomers are steaming towards retirement, after all, most of them with houses and many in hideous financial shape. Expect a multi-year flood of listings as this crowd desperately seeks to turn real estate into income.”

While I agree with you on a lot of things Garth, I don’t see the above happening.

Human stubbornness and denial can’t be underestimated, as the metalheads and housing bugs have demonstrated.

Those boomers could just as easily barricade themselves in their homes and sign up for “reverse mortgages” (lulled by the friendly TV ads for “Chip home income plan”) delaying cashing out for decades.

Some, the fools, doubtlessly will. Only one in three in the Boomer cohort need downsize and real estate will be hooped. — Garth

#99 Bigrider on 01.16.13 at 8:34 am

An associate of mine just bought a three unit Triplex at Eglington and dufferin, T.O for 600k. Three units rented at $1300, $$1100, $1000 total $40800 a year.

Property taxes $3500 and his only other expense is some electrical and gas, about $1200 a year.

As bearish as I am on RE (see past multitude of posts past three years) I cannot find fault with thsi investment.

Any thoughts anyone?

He needs insurance, a property maintenance budget and is negating the imputed value of $600,000 in equity. His net will be closer to $30,000, and it will come as rent, fully taxed. Six hundred earning capital gains and dividends in a balanced portfolio should yield at least $42,000, be taxed at one-half the rate and stay fully liquid. How is there a comparison? — Garth

#100 Ann on 01.16.13 at 9:06 am

Re-96 The real Kip on 01.16.13 at 6:58 am
Thanks for not deleting my post yesterday, I feel I am making progress with you. We’re bonding.

You are everything I could want in a crane operator. — Garth
.——————————————————————-

All he needs now is a Tube Top and a Convertible. lol

#101 };-) aka Devil's Advocate on 01.16.13 at 9:10 am

#67AACI Okanagan on 01.16.13 at 12:48 am
#52 };-) aka D.A. on 01.15.13 at 11:30 pm
————————————————————

DA you are generalizing, unless you take out the variables as I explained you don’t know if that 3% or 5% or what ever difference in selling price contributes to just the marketing period. (ie: 30 over 90 days). I do lots of ligation reports and I can tell you that lawyers would have a feast with me if I presented your theory as fact.. regards

I understand your concerns but you understand what I am saying, right? And you must see how it would drive prices one way or another, correct?

The fact is, it is real and provable – although would be better addressed in a face to face discussion. But it is real enough that lawyers would, I assure you, have good application for it as welcomed evidence as valid supporting arguement in some cases.

Think a case of negligence against an agent who carelessly and incompetently priced a home too high that it ended up costing the seller tens of thousands in lost equity because, not only did they miss their market as explained in a previous post of mine, but the market might have fallen substantially since.

This is important stuff. This costs a lot of sellers big money. More listings expire (do not sell before the end of their listing contract term) because the agent agreed to list the property at a price they knew it would never sell for. REALTORS® are considered professionals in the eyes of the courts and have a feduciary duty to their client sellers to advise them of the perils of overpricing. If a REALTOR® agrees to take such a listing they know is so overpriced they ought to protect their ass and have some evidence of having given good alternative advise to their client in that client file.

#102 Rishu on 01.16.13 at 9:15 am

RE: 95 NoName

We all know what is about to happen with real-estate in Canada, but funny thing now days is generational grudge.

- Agreed.

Boomers vs Gen_X vs Gen_Y. Boomers are slowly coming to the realization that there is not enough
Gen_X’ers to but all their McMansions, and that Gen_Y will never move out.

- Gen X was never supposed to buy out the Baby Boomers, it was the “Echo Boom” -> Gen Y. And the reason Gen Y cant move out, is because working retail at minimum wage while servicing a student debt of $50k doesn’t afford us to buy a 500sqft condo priced at half a million.

It is kind of interesting to see big difference between Boomers and Gen_X, but yet they are sharing same opinion about RE, unlimited upside with virtually now downside, because you have to live somewhere…

Gen_Y don’t care about RE or for mater of the fact, they don’t care about anything, they are to busy texting, and clicking “like” on FB.

- Right, we don’t care about anything…

While Boomers and Gen_Y share same opinion about Gen_X’ers, that we are all bunch of whiners and
complainers, they are so arrogant to realize that they are ___________ of their own demise.
Boomers with their antiquated theories that worked 50-60 years ago, and Gen_Y is to self centered to
realize that participation trophy is worthless.

- Gen Y shares what opinion about the Gen X with the Boomers? And the participation trophy concept came from Feminism influenced, new Education curriculum. It has nothing to do with Gen Y. Where it is being thought that everyone is a winner! (Millennium babies will end up paying for this the most.) Since we all know real life doesn’t work that way. And once people leave the education system they learn this the hard way. But don’t tell the educator imbeciles that. They live in a nice bubble of great public servant wage and benefits. And fail to realize human evolve and thrive (especially boys) by competing against each other. And you wonder why boys are doing terrible in school nowadays.

It is kind of interesting to see big difference between generations, but yet they are sharing same opinion about RE, unlimited upside with virtually now downside, because you have to live somewhere…

just my daily rant…

- Nice rant, and thanks for letting me rant on your rant.

#103 LP on 01.16.13 at 9:38 am

#78Hoof – Hearted on 01.16.13 at 1:37 am
*****************************
Now, that is just plain hilarious! Good for you.

#104 TurnerNation on 01.16.13 at 9:45 am

Epicene? I am also thinking he’s porcine (greedy).

#105 Stickler on 01.16.13 at 10:01 am

@ #62 Neta on 01.16.13 at 12:38 am
>> Good comment

#106 Ret on 01.16.13 at 10:04 am

Todays graph.

1. Toronto incomes over the last ten years show the smallest increase of any of the cities listed. What’s with that?

T.O. incomes have gone up at two-thirds the rate for the whole country in the last ten years, during the greatest building boom ever. That can’t be good for Toronto RE.

2. Toronto’s RE prices in the last ten years have increased roughly 75% while incomes behind those price increases have increased 25%. What does this 50% number mean on my calculator?

#107 Lorne in Regina on 01.16.13 at 10:06 am

I nearly fell out of my chair laughing when I read the CREA press release. Why were sales lower in December? “Sales were handicapped by December 2012’s five full weekends, since far fewer transactions take place on weekends.” Right!!
And in your quote, Garth, about “actual (not seasonally adjusted) prices”, why would any organization “adjust” prices based on the season other than just to manipulate data. Sad.

#108 Holy Crap Where the Tylenol on 01.16.13 at 10:11 am

#99 CJOttawa on 01.16.13 at 8:17 am

Garth wrote, “Nine million Boomers are steaming towards retirement, after all, most of them with houses and many in hideous financial shape. Expect a multi-year flood of listings as this crowd desperately seeks to turn real estate into income.”

While I agree with you on a lot of things Garth, I don’t see the above happening.

Human stubbornness and denial can’t be underestimated, as the metalheads and housing bugs have demonstrated.

Those boomers could just as easily barricade themselves in their homes and sign up for “reverse mortgages” (lulled by the friendly TV ads for “Chip home income plan”) delaying cashing out for decades.

Some, the fools, doubtlessly will. Only one in three in the Boomer cohort need downsize and real estate will be hooped. — Garth

I get the general feeling that a lot of these boomers (myself included) do not intend to retire at 65 or even any given number. I have talked with quite a few friends, laymen, professionals, self employed entrepreneurs and most want to continue to work past the magic set value of “65″. 65 was a number from the golden ages. While I agree millions of us will retire, I also believe quite a few will not by choice and even more will not retire due to necessity. Perhaps this is contrarian thinking that will indirectly be applied to contrarian investing???? Hummm

#109 The American on 01.16.13 at 10:43 am

Responding to #62: Neta, you said, “So, the question is why US folks have no problems working for $14/hr, while out workers refused to accept 50% pay cut and match what Indiana’s offer. Just consider that young and energetic Indiana folks in their prime, 25-35 years old, who just landed CAT jobs, are buying $60K houses with 4% 30 year tax deductable mortgages and paying a third of what we spend on our car insurance, 20% less on gas, internet, phone, etc…”

Here’s the answer. American workers aren’t working for $14/hour and buying $60,000 houses. Your media is doing a snow job on you, and they want you to believe this muck because it is an easier pill to swallow than telling the truth. Total f*c6ing b.s. Average factory workers. They’re working for around $50,000-$65,000/year, plus full benefits. The jobs are moving back to Indiana for CAT because Indiana passed a Right to Work Law, and there is a fairly strong movement against unions there right now. Additionally, productivity within the U.S. is typically much higher than that found outside of the U.S.

Here’s a fun link
http://www.huffingtonpost.com/2012/03/08/average-cost-factory-worker_n_1327413.html

#110 Bigrider on 01.16.13 at 10:44 am

Garth to Bigrider at #100 regarding rental triplex analysis.

His cost of capital is deductible against the 30k net you mention but your analysis is very close to what I determined.

Are we not in agreement that when deductions from net rental income for cost of capital(mortgage) are factored in the net net result is almost the same for rental property verse balanced portfolio within a few percentage points?

My point here, I would add, is that although the balanced portfolio has the advantage of liquidity and ease of operation verse the illiquidity and work required in property maintenance and rent collection, the property enjoys the advantage of perceived ‘real ‘ asset status and the notion that you are ‘in control’ and can ‘see’ your investment.

This mentality among the less educated Garth, is pervasive among Torontonions more than your cultural and educational background would lend privy to you.

#111 Holy Crap Wheres the Tylenol on 01.16.13 at 10:45 am

I had a good friend tell me to stay away from RIM when I bought last spring, his quote “RIM is a sinking ship.” Sinking ship? You obviously have not seen the BB10 yet. It is by far the best phone out there (I have an iphone). The camera alone kills the competition. The software is such a refreshing change from the languorous iOS and extremely unstable Android – It’s user friendly, yet still powerful enough for people who need to do business. Example – Started to write an email in Outlook and walked away from your desk? The BB picks it up so you can continue it out the door. I am optimistic about the prospects of RIM but I think it’s recent run-up to $15 isn’t sustainable in the short term and for long term investors I would suggest to wait until a large correction happens, most likely just after launch. Patience is key, best not to get caught up in the hype of a new release and have to wait months until your investment starts yielding results. Mentioned on another post tonight that I would like to have three billion in the bank. Did not mention that I would like to own Rim’s real estate…”real estate in motion” no less. And, I was a mac fan when it was unpopular and “I” this and that did not exist. So in the end nothing is so constant as change, so buckle up ifans and droids. Game on. As I mentioned yesterday this could be the Canadian Comeback Kid!
http://www.therecord.com/news/business/article/869493–rim-stock-rises-to-highest-level-since-april-2012

#112 From Mississauga with Love on 01.16.13 at 10:48 am

TREB mid-month resale numbers are out.
Looks like the GTA sales numbers are recovering in 2013. Any comments? Sales are up vs. same period last year.

#113 Grantmi on 01.16.13 at 10:49 am

Even jugglers are getting laid off.

http://www.montrealgazette.com/touch/story.html?id=7823587

Wonder if these 600 folks have a mortgage ???

#114 From Mississauga with Love on 01.16.13 at 10:54 am

Hold on… there were 9 business days till mid-month in January 2012. This January it’s 10 business days. Plus the second weekend in this January (when people really see homes, make offers and close deals) was actually followed by a Monday/Tuesday during which the agents could enter the deals into the system and be counted. 2012 January, the second weekend, there was no such thing. I think once the two factors above are adjusted for, sales volume would be down by 15-20%
so perhaps it is too early to judge. we have to wait and see sales numbers for February.

#115 The real Kip on 01.16.13 at 10:58 am

#101 Ann on 01.16.13 at 9:06 am

“All he needs now is a Tube Top and a Convertible. lol”

Ann, I’m single if you are! I’ll supply the convertible and you bring the tube top!

I can imagine you in it. (Not the car.) — Garth

#116 AACI Okanagan on 01.16.13 at 11:01 am

#102 };-) aka Devil’s Advocate on 01.16.13 at 9:10 am

The fact is, it is real and provable – although would be better addressed in a face to face discussion. But it is real enough that lawyers would, I assure you, have good application for it as welcomed evidence as valid supporting arguement in some cases.
—————————————————————-

Unless the homes and the lot they are constructed upon are all identical and are influenced by the same location it is NOT provable. Nothing wrong with generalizing, just don’t try and pass it on as fact. Regards

#117 hangfire on 01.16.13 at 11:12 am

The boomer demographic in regards to real estate may surprise everyone by becoming a non issue….the eager condo seller may want to consider the banking industries best interest before his own……remember how the banks pushed into insurance when they saw the profit profile growing…who’s to say they won’t popularize the reverse mortgage for income strapped seniors? Of course it will happen you dummies…..the banks are ‘the smart money’…..watch and learn…….there will be no flood of boomer inventory……the capitalist bible tells me so. Observe the growing numbers of retiree’s with mortgages…..do you think they’ll sell into a loss or there’ll be some kind of REO structure like in the US? More likely than not the banks will vultch the last few pennies left in the individuals estates…..after taxes of course…resulting in a paradigm shift of expectations for those who’d hoped to enrich themselves on Grandma’s back……inheritance will become a thing of the past….and banks will have a new profit center……BTW..TD Bank is up $ from $57 to $81 YTD…..don’t bet against the bankers in favour of pronouncements from the real estate pimps….you’ll lose.

#118 Otto on 01.16.13 at 11:18 am

#13 and pain-in-the-wayne add up to a double-barreled a-hole. Why don’t these losers leave. Don’t they get it yet.

#119 Dr. WAYNE on 01.16.13 at 11:22 am

#78 Hoof – Hearted on 01.16.13 at 1:37 am

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

I gotta admit … not bad …

#120 Grim Reaper/Crypt Speculator on 01.16.13 at 11:26 am

#13 AK on 01.15.13 at 10:28 pm

#1 Grim Reaper/Crypt Speculator on 01.15.13 at 10:07 pm

“Fiirsszzzztttt”

I understand that you left work early, skipped dinner and kicked your kids of the computer in order to accomplish your task.
Congratulations, Dude.. :-)

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

Yes, I confess, I am a Civil Servant….”on call”

#121 Smoking Man on 01.16.13 at 11:27 am

Jan Mid month TREB.

Sales up 2.4, and prices up 4 p, and why, why go against the great Smoking Man.

Going to be a crazy spring, no inventory, yet demand still strong. Time to re decorate basement LaughingCon, your going to be there a while

#122 LaughingCon on 01.16.13 at 11:28 am

Re #115 From Mississauga with Love

TREB mid-month resale numbers are out.
Looks like the GTA sales numbers are recovering in 2013. Any comments? Sales are up vs. same period last year.
=====================================

Are they really:
2012 – From http://www.torontorealestateboard.com/market_news/release_market_updates/news2012/nr_mid_month_0112.htm

“TORONTO, January 17, 2012 – Greater Toronto REALTORS® reported 1,506 sales through the TorontoMLS® system during the first two weeks of January 2012. …”

2013 – From http://www.torontorealestateboard.com/market_news/release_market_updates/news2013/nr_mid_month_0113.htm

“January 16, 2013 — Greater Toronto REALTORS® reported 1,469 sales through the TorontoMLS system during the first two weeks of January 2013. This result represented an increase of 2.4 per cent over the 1,435 transactions reported during the same period in 2012. …”

In which universe 1469 resales are 2.4% higher than 1506 !!!

BTW – check out the prices of the condos – 2011 prices here I come!
One fine example for that period – MLS W2513081
Asking $948,000
Sold for $740,000

Smoking Man/Whazzup – It is going to be nasty crash realtors, a nasty crash

PS. to Bigrider -#100 and 111.
Associate’s Triplex at “Little Jamaica” – good luck with that.

#123 Grim Reaper/Crypt Speculator on 01.16.13 at 11:28 am

#17 Big Bear on 01.15.13 at 10:32 pm

Quebec is considering assisted suicide. So it begins…

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

Quebec is DOA, suicide is redundant..

#124 Investx on 01.16.13 at 11:32 am

112 Holy Crap Wheres the Tylenol:
“I had a good friend tell me to stay away from RIM when I bought last spring, his quote “RIM is a sinking ship.” Sinking ship? You obviously have not seen the BB10 yet. It is by far the best phone out there (I have an iphone). ”

The “by far the best phone out there” and it hasn’t even come yet? LOL. I would wait to make such a statement and actually, you know, use it.
(And I’m a RIM fan and hope they do well.)

#125 good colleague on 01.16.13 at 11:38 am

My colleague and I had a discussion about real estate just a few days ago. He told me that condo market must be doing really good in Toronto because he sees them popping up like mushrooms. I told him to read the economics 101 text book about demand and supply.

#126 Ogopogo on 01.16.13 at 11:52 am

#98 Smoking Man on 01.16.13 at 7:58 am
#68 Ogopogo on 01.16.13 at 12:49 am

Whazzup lives in Ottawa, Me long Branch, he and I wherethe only 2 bulls on G and mail , back in 2009, buy stocks, buy, housing.

I quit blogging on G and m cause on election topics, fat basterd had thousands of paid hasbra Blogger. Pissed me off. Plus they never made me a catalysts, I was 10 times more famous there than anyone.

Thanks for the clarification, Smoking Man. I knew it couldn’t be you because whazzup has no wit or humour, just mindless pumping. I’d only wondered because a few commenters were saying it but now I get it.

#127 };-) aka Devil's Advocate on 01.16.13 at 11:57 am

#117AACI Okanagan on 01.16.13 at 11:01 am

Unless the homes and the lot they are constructed upon are all identical and are influenced by the same location it is NOT provable. Nothing wrong with generalizing, just don’t try and pass it on as fact. Regards

On that we will have to agree to disagree. The fact is that you, a trained and experienced appraiser with access to the data, seem to be unable to grasp the concept tells me that I have a competitive advantage amongst my peers by my understanding of it which they may not – although I do believe a good portion of them do but aren’t necessarily so cognative of it’s huge implications at this particular time in the market as evidenced by the huge number of MLS listings that do not sell due to overpricing.

It is a truth AACI, all things being equal, that the longer a listing remains unsold on the market, the only reason it would is due to overpricing, the less the seller will realize when it finally does sell. When I say “all things being equal” I am not insinuating ‘paired sets’ but rather no significant fluctuations in the market. In a rising market, of course, sellers would be well advised to list high so as not to leave potential equity on the table. In a flat market as we currently have, or a falling market as the Blog Dawgs believe we are in, intelligent pricing is paramount.

If afforded the time I will post to http://www.tinypic.com some of the statistical graphs which better exhibit this phenomena than I am able to or have the time to explain.

Cheers.

#128 Nancy on 01.16.13 at 11:59 am

@Holy Crap Where the Tylenol #109:

“I get the general feeling that a lot of these boomers (myself included) do not intend to retire at 65 or even any given number.”

The point that Garth is making is that demand for housing is going to be reduced due to demographic changes. Of course, many baby boomers will keep working past 65. But eventually ALL baby boomers will die. You can take that to the bank. Going forward, baby boomers are not going to be consuming real estate in the same way they have in the past. Overall, real estate went up in value over the past 30 years because the baby boomers were net-buyers of real estate. Baby boomers are a massive generation and they shape everything. Going forward, as baby boomers start getting really old, many are going to start moving into facilities that provide care for the elderly (expect a boom in old age homes/care for the elderly). Eventually, all the boomers will die off. That means, in the future baby boomers will be net-sellers of real estate. That has to exert downward pressure on prices. The younger generations that are taking over from the baby boomers are smaller in number and more indebted and less wealthy and have weaker job prospects. The younger generations are not going to be able to support the same kind of real estate appreciation that the baby boomers did.

#129 Nancy on 01.16.13 at 12:07 pm

@118 Hangfire

“The boomer demographic in regards to real estate may surprise everyone by becoming a non issue….who’s to say they won’t popularize the reverse mortgage for income strapped seniors? Of course it will happen you dummies”

Again, what is going to happen to baby boomers’ houses after they die? Eventually, every single baby boomer will die. They can’t be on reverse mortgages forever. Baby boomers’ real estate inventory will eventually hit the market. And the younger generations don’t have the wealth to support high prices.

Die? Wait a minute. Where did that come from? — Garth

#130 Christopher Lackey on 01.16.13 at 12:10 pm

Can you start a reality show? The real fools of greater fool? I quote a commentator from yesterday:
“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.”
It’s funny because I know families <50k with piles of savings and 200k households who don't have 2 cents to rub together

#131 Investx on 01.16.13 at 12:30 pm

87 tkid:
If Alan’s selling expenses add up to 10% of the sale price … he walks away with $80,000. How is that selling at a loss? Is there an expense I am missing?
—————–

I think he means a loss in comparison to what he could have sold it for when “some dude offered Alan $556,000.”

#132 Penny Henny on 01.16.13 at 12:32 pm

80Dr. WAYNE on 01.16.13 at 1:56 am
#44 Ms bboomer on 01.15.13 at 11:12 pm

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

Hey Ms. … in the event you haven’t figured it out yet, this isn’t a popularity contest … bring it on …
+++++++++++++++++++

Hey Dr. Wayne …in the event you haven’t figured it out yet, it’s not all about you…loser

I think I understand why you keep coming back here though, posters here are the only ones that will talk to you. If you want to call it that.
So sad :(

#133 Penny Henny on 01.16.13 at 12:37 pm

How can the Boomer’s sell there homes to fund their retirement?? Where will the kids move to. You mean they’ll have to kick their kids out on the street??

#134 Doug in London on 01.16.13 at 12:39 pm

Garth said: He passed up two hundred grand in free money because of greed. Vicarious maternal greed, actually.
Did I miss something in the translation here? If I had bought that place and someone offered me 200 grand more than I paid (since I already had a buyer, that would also save a sales commission) I would drop EVERYTHING else I was doing, possible even running out of the shower butt ass naked, go to a lawyer and GET AN OFFER TO PURCHASE RIGHT AWAY! I would do it all so fast I would prove Einstein wrong by moving faster than the speed of light, and I am more greedy than Scrooge. Why would greed stop anyone from such easy money?

In the most recent edition of Maclean’s magazine, there’s an article about the falling housing market, further proof that what Garth has been trying to tell us for the last 3 years. According to the article one realtor, Keith Roy, saw this coming and actually warned clients, unlike others he actually told the truth. Garth, in your travels did you ever meet or hear from this guy?

#135 Fed-up on 01.16.13 at 12:41 pm

Burn baby burn:

http://www2.macleans.ca/2013/01/09/crash-and-burn/

#136 lawboy on 01.16.13 at 12:41 pm

#100

Dufferin and Eglinton! Wonderful neighbourhood (not.)

Add to your friend’s expenses the foregone income and legal fees from one defaulting tenant and resulting eviction process every three years or so.

#137 Andrew on 01.16.13 at 12:43 pm

“Real estate veteran Lawrence Dale, who founded Realtysellers, says one of the issues for agents is they get used to a certain sales level so any pullback seems catastrophic even if it just puts them back to where they were in 2010 — when, at the time, many would have been satisfied with their sales volume.”

“Slow times and everybody panics. It becomes more of a concern for agents to drum up leads as their business starts to otherwise shrink,” Mr. Dale said. “Coming off the run we’ve had, everybody’s expectations are higher than they used to be.”

-Lawrence Dale, RealtySellers, Financial Post, Jan., 16, 2013.

I find statements from inside the RE industry like this to be quite telling and this one seems to indicate that realtors are already feeling it in their bottom lines…

Like DABob, who seems to be struggling to put numbers on the board, and judging by his posts Panicitis is starting to set in…

#138 Southern Ontarian on 01.16.13 at 12:48 pm

100 Bigrider on 01.16.13 at 8:34 am

A few thoughts: his cap rate is barely 5% if you include only extremely modest vacancy and maintenance costs. I don’t know about that area, so I am in no position to guess at what the shape of the property might be for that price. All properties need maintenance, though.

That having been said, he can get better-than-4% locked in for ten years. If it’s 80% financed, though, he will flow literally no cash until rents go up, or unless the property is very close to maintenace-free (and even then…). If he is speculating (hint hint) that rents will go up in that area for whatever reason, it might make sense for him. If anything goes wrong, though (a particularly long vacancy, a tenant who chooses not to pay rent for a while, whatever), he will be subsidizing his tenants.

I doubt he’d pay cash for the thing, so probably doesn’t need to worry too much about paying tax on income (since there won’t be much). If he did pay cash, why? Isn’t leverage the point?

#139 Bottoms_Up on 01.16.13 at 12:49 pm

Why don’t the exclude Toronto and Vancouver when they report national prices up 6, 7, 8%? Something is beyond fishy here….

#140 Inglorious Investor on 01.16.13 at 12:51 pm

#131 Christopher Lackey on 01.16.13 at 12:10 pm

It’s not how much you earn. It’s how much you save––and invest!

Any average sized family (say, Mom, Dad, Thing 1 and Thing 2) that is just “getting by” on $200K/year has a serious issue with stupid.

#141 Bottoms_Up on 01.16.13 at 12:53 pm

#109 Holy Crap Where the Tylenol on 01.16.13 at 10:11 am
——————————————————-
That’s what I find funny about the ‘contrarian’ play. Right now the contrarian play would be to invest in residential real estate. But maybe because real estate prices lag sales, the idea of being a contrarian has to be taken with a grain of salt.

#142 AK on 01.16.13 at 12:54 pm

#74 The moneyger – To #62 Neta on 01.16.13 at 12:38 am on 01.16.13 at 1:12 am
“Expect CAD to go back to 1.6CAD for 1USD once they recover and we sink (2-3 years from now).”

I hope you will be correct. I’ve always thought that the busch league Canadian Dollar is overvalued.

#143 Bottoms_Up on 01.16.13 at 12:56 pm

#131 Christopher Lackey on 01.16.13 at 12:10 pm
—————————————————
So let’s hear about your examples of ‘lots’ of ‘families’ making <50k with 'piles of savings'.

I call BS unless of course they have won the lottery, live under a bridge (or boat or trailor) or in their parents' basements.

#144 TEMPLE on 01.16.13 at 12:58 pm

#128 };-) aka Devil’s Advocate on 01.16.13 at 11:57 am

It is a truth AACI, all things being equal, that the longer a listing remains unsold on the market, the only reason it would is due to overpricing, the less the seller will realize when it finally does sell.

DA, you are being a bit dense here. AACI is completely correct in saying that you can’t draw this conclusion from the data you have. The experiment is not controlled, so the conclusion you make is not valid.

Obviously a poorly priced home will probably sit on the market longer and sell for lower than its original list price. However, you cannot conclude that its final price is lower than the final price of houses that started out more fairly priced.

seem to be unable to grasp the concept tells me that I have a competitive advantage amongst my peers by my understanding of it which they may not

That’s delusional. You have the very human characteristics of seeing patterns where there are none, and of greatly overestimating your abilities.

TEMPLE

#145 Nonno Nicola on 01.16.13 at 1:10 pm

#111 Bigga Rider

“This mentality among the less educated Garth, is pervasive among Torontonions…”

Nowa you maka fun of me Bigga Rider? Yah, so whatta, I only gotta da grada 5. You thinka you such a smart fella, wid your universita educazione. Well Nonno he maka da milioni from da real estata and you keepa giving your moneta to da crooks on da Baya Strada. Da only portfolio bilanciato dat Nonno knowa is when he putta da 100 dollar bills on one sida and da 50 dollar bills on da odder. Nonno maka da moneta on da land, da commercial real estata and da industriale figlio mio. When you gonna learna from da old fellow Bigga Rider and stop wasting your tima with da stocka markato.

#146 Ret on 01.16.13 at 1:17 pm

#132 Investx on 01.16.13 at 12:30 pm
87 tkid:
If Alan’s selling expenses add up to 10% of the sale price … he walks away with $80,000. How is that selling at a loss? Is there an expense I am missing?

Yeah, probably a HELOC slapped on the mortgage for a pair of new Audi’s for Alan and his Mom. When the property valuation went up, the bank was there for Alan once again! If he took the bait, he’s screwed.

Me thinks that Mom’s got some paper out on Alan’s great RE adventure too? She seems to be calling the shots.

#147 };-) aka Devil's Advocate on 01.16.13 at 1:20 pm

What this chart says: There’s no economic justification for current house values. They’re based on debt and duct tape. They must, and will, fall. And you can see where. – Garth

Certainly by the looks of that chart ‘House Price and Family Income Growth 2000 – 2010’ it is easy to see how one might come to that conclusion but the reality is the market has, for at least the last four years since the Economic Crisis of 2008, and continues to support those real estate prices.

Yes, interest rates have bolstered the rapid increase in real estate values and done nothing for wages as the ensuing inflation negates. Yes when interest rates rise there will be downward pressure on real estate prices but only enough, that we can count on as, to keep the monthly payments in line.

What is the real issue here; rising real estate values or the lack of a corresponding increase in median family income? I think it’s more the latter.

Canadians are simply not competitive and the paltry increase in median family income is a consequence of that. If you want to improve your lot in life; make yourself more valuable to the marketplace. You do not seek success you attract it by making yourself more valuable to the marketplace that you can compete within it.

I know I am simplifying it to better highlight my suggestion; but, seriously, we have to look at it and wonder why real estate values have increased so, while median family income has lagged so far behind. I don’t believe it to be simply a consequence of ultralow interest rates. I am sure there is more to it than that. It wouldn’t surprise me to find, if and when interest rates do finally rise, that the real estate market keeps chugging along as it has. Maybe I am wrong – but maybe my ‘Devil’s Advocate’ suggestion has merit. Time will tell.

On the demographic issues at hand, I wonder if it will play out as badly as suggested. Certainly it is a valid concern but like so many other concerns, (peak oil, water, etc), – debatable.

HINT: Land is land, there is only so much of it. The improvements on the land are nothing but depreciating assets. Condos are apartments, better rented than owned, as the further you are from your land the nearer you are to your losses.

#148 Herb on 01.16.13 at 1:20 pm

#122 Smoking Man,

“no inventory”? Don’t know about the spring market, but what are the 403 red dots that appear right now on a search for “House” between Yonge and 427 and Eglinton West to the Lake on the Realtor.ca map? Measles?

Oh, there also seem to be 1,599 “Apartment” units on offer in the same area. What would you call “inventory”?

#149 AACI Okanagan on 01.16.13 at 1:22 pm

#128 };-) aka Devil’s Advocate on 01.16.13 at 11:57 am

#117AACI Okanagan on 01.16.13 at 11:01 am

Unless the homes and the lot they are constructed upon are all identical and are influenced by the same location it is NOT provable. Nothing wrong with generalizing, just don’t try and pass it on as fact. Regards

On that we will have to agree to disagree. The fact is that you, a trained and experienced appraiser with access to the data, seem to be unable to grasp the concept tells me that I have a competitive advantage amongst my peers by my understanding of it which they may not – although I do believe a good portion of them do but aren’t necessarily so cognative of it’s huge implications at this particular time in the market as evidenced by the huge number of MLS listings that do not sell due to overpricing.

It is a truth AACI, all things being equal, that the longer a listing remains unsold on the market, the only reason it would is due to overpricing, the less the seller will realize when it finally does sell. When I say “all things being equal” I am not insinuating ‘paired sets’ but rather no significant fluctuations in the market. In a rising market, of course, sellers would be well advised to list high so as not to leave potential equity on the table. In a flat market as we currently have, or a falling market as the Blog Dawgs believe we are in, intelligent pricing is paramount.
————————————————–

Grasp your concept? Please, it is you that doesn’t grasp it .

I love the way you now slip in, all things being equal, glad you finally get it.. Now show us all, two or more identical single family residences which have sold to support your theory on percentage loss due to marketing period.

#150 BorrowedCarbon on 01.16.13 at 1:27 pm

Big Mortgages are Awesome, says cbcnews

http://www.cbc.ca/news/business/taxseason/story/2012/12/18/f-rrsp-2013-don-pittis.html

#151 Mixed Bag on 01.16.13 at 1:28 pm

#135 Doug in London on 01.16.13 at 12:39 pm

That was effin’ hilarious.

Alan’s problem is that he doesn’t trust his own judgement. And/or his mother is overbearing.

#152 Babblemaster on 01.16.13 at 1:29 pm

We’ve now had over four years of these record low interest rates. Despite repeated predictions that they will rise, they have not budged to any significant degree. Despite Garth’s assertion that the bond market will demand a higher rate, they remain low. I would personally love to to see them rise, but I don’t see it happening. It would now be too damaging for too many people that are dependent on low rates. For that simple reason, politicians will not allow it to happen.

#153 NAGA on 01.16.13 at 1:32 pm

Sorry Garth but CREA quoted annual stats. Unfortunately most people do not pay attention to the details, and everyone does a great job of misusing stats for their own benefit or to justify their own agenda.

Another example that uses a similar approach to the CREA annual stats is the financial industry when they report ETF/Mutual Funds/Stock performance – but I do agree that they are more transparent in that they report monthly, quarterly, YDT etc…..but then so does CREA and local RE Boards do this as well. Investors need to pay attention to the detail on what is being reported – lower sales does mean lower prices.

My prediction is that while there will be a RE price adjustment – I think of less than 10% nationally and greater in those markets exposed to condo glut – we have entered an era of lower sales activity, longer listing periods but stagnant prices for some time to come.

#154 Inglorious Investor on 01.16.13 at 1:33 pm

#139 Southern Ontarian on 01.16.13 at 12:48 pm

You’re correct. Generally speaking, on small-sized MFR properties (say, 3 to 15 units), with a standard 75% LTV mortgages, and factoring in standard maintenance and vacancy rates, the cash flow is basically neutral in the early years. So any expensive repairs or upgrades can put you cash flow negative very quickly.

But on the positive side, inflation works for you by eroding the value of your mortgage principle. Rents also go up, but this can be offset by higher operating costs and dampened by rent controls. You also get the tax deductions (e.g. mortgage insurance). Then there is long run capital appreciation of say, 4% to 6% per year on average.

Over time as the mortgage is serviced, cash flow will become positive. Once the mortgage is discharged, the property basically becomes an annuity of sorts (though one that requires constant maintenance).

The real key to making money with a rental property is leverage. They key is getting a return on the actual money you invested out of your own pocket. It usually makes no sense to pay cash in full. Right now, money is virtually free. However, in places like Toronto, this free money is reflected in prices. So finding a sweet spot (like a value investor) is not easy. And realtors usually keep the best values for themselves (i.e. insider trading).

The thing is, there is an agreement between the banks and the government regarding rental properties, and business in general. In order to encourage borrowings for the banks (and investment in the economy), the government allows property owners to transfer the government’s tribute over to the banks via mortgage interest deductions. The rental property owner takes advantage of this arrangement.

But it’s not for everyone. And if you can make the same money with “paper” investment why the hell take on the hassle?

This is stuff that I’ve learned. Others may have differing opinions.

#155 AACI Okanagan on 01.16.13 at 1:34 pm

#128 };-) aka Devil’s Advocate on 01.16.13 at 11:57 am

I just reread your post and once again you have gone off track and are spinning this into something else… wow

#156 Devore on 01.16.13 at 1:34 pm

#132 Investx

I think he means a loss in comparison to what he could have sold it for when “some dude offered Alan $556,000.”

That is some definitely out of the box thinking happening there, but goes some way to explain that many home owners see their house equity as literally money in the bank. In that sense, declining prices will always be seen as a great evil to be avoided at all costs, the result of “powers that be” screwing the little guy. Of course, declining prices in iPads, insurance, cars, food are a good thing. Somehow, the disconnect doesn’t register. Houses are not like stocks or bank accounts, it’s just shelter, and lower prices are a good thing.

#157 Forgot my handle on 01.16.13 at 1:36 pm

{He needs insurance, a property maintenance budget and is negating the imputed value of $600,000 in equity. His net will be closer to $30,000, and it will come as rent, fully taxed. Six hundred earning capital gains and dividends in a balanced portfolio should yield at least $42,000, be taxed at one-half the rate and stay fully liquid. How is there a comparison? — Garth}

Assuming he has 600K in cash. Investment property is a good buy IMHO. He gets to write off mortgage interest & repairs.

#158 Form Man on 01.16.13 at 1:37 pm

http://www.bloomberg.com/news/2013-01-16/canadian-energy-companies-weighing-cuts-on-oil-discount.html

it will be interesting to see how much longer Calgary’s real estate boom can last.

The revolution in domestic production in the U.S. is obviously a train wreck for most Canadian producers, compounded by the gridlock in pipeline approval,” Chris Damas, an investment adviser at BCMI Research in Barrie, Ontario, said in an e-mail. “I don’t think this has sunk in for most retail, and many institutional investors.”

#159 Frank le skank on 01.16.13 at 1:38 pm

TREB January 2013 mid month sales are 3.8% higher than 2012. I guess the soft landing is over and prices will continue to increase to infinity! I better buy now before I’m priced out forever! This is a great investment opportunity!

#160 Harvard Grad on 01.16.13 at 1:38 pm

Did anyone catch the article in the Globe yesterday – it went on about the crushing debt load and how few are budgeting house payments + car payments and the reality of why most can’t save enough for retirement.

Geez, when the pendulum swings the other way – look out – the numbers they were mentioning have been going on for years – only now they write about the dangers …. What Gives!!

#161 coraline on 01.16.13 at 1:45 pm

Uncorrected Toronto sales for first half of January since 2006:

2006: 1,508
2007: 1,592
2008: 1,776
2009: 888
2010: 1,749
2011: 1,563
2012: 1,506
2013: 1,469

Sales are not up. TREB should not be allowed to get away with this blatant manipulation of its data every month. Several posters here know how TREB recalculates its numbers, but it certainly isn’t common knowledge.

#162 Bigrider on 01.16.13 at 2:04 pm

# 123 laughingcon ” little Jamaica”

Well, I don’t own any triplexes but I would imagine that trying to buy one in forest hill to rent to all the doctors won’t fly.

#163 furst on 01.16.13 at 2:13 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.

#164 Dean on 01.16.13 at 2:25 pm

the numbers are not bad…
http://www.torontorealestateboard.com/market_news/release_market_updates/news2013/nr_mid_month_0113.htm

#165 Holy Crap Wheres the Tylenol on 01.16.13 at 2:27 pm

#125 Investx on 01.16.13 at 11:32 am

112 Holy Crap Wheres the Tylenol:
“I had a good friend tell me to stay away from RIM when I bought last spring, his quote “RIM is a sinking ship.” Sinking ship? You obviously have not seen the BB10 yet. It is by far the best phone out there (I have an iphone). ”

The “by far the best phone out there” and it hasn’t even come yet? LOL. I would wait to make such a statement and actually, you know, use it.
(And I’m a RIM fan and hope they do well.)

I anticipate they do well also. I’m associated in the Electronics Engineering Industry. I have a few associates in the KW area. From my brief discussions with some field communication engineers this baby looks solid. This again coming from a die-hard Apple guy!

#166 Dupcheck on 01.16.13 at 2:38 pm

The outcome of the housing market in Canada is certain, but as of yet unrealized by the masses.

#167 Holy Crap Wheres the Tylenol on 01.16.13 at 2:55 pm

What ever happened to people living in 1100 to 1600 sq.-ft. homes?
I can recall entire 6-8 person families growing up in these homes that a single wage earner could afford. The crap they sell nowadays such as 650 sq.-ft. glass boxes in the sky, 700 sq.-ft. Mini-Me homes in crappy neighborhoods or 3600 sq.-ft plus, plus. Mc Mansions for insane amounts of $$$ is inconceivable. I can’t believe someone would ever need a 3600 sq.-ft Mc Mansion unless your name is Vito Corleone. As for the 650 sq.-ft glass boxes in the sky if you like the sardine can living in a pre-packaged lifestyle with juice bars, yoga rooms and pools on the roof then have fun Mr. & Ms. Trump. The 700 sq-ft Mini-Me Homes in Crappy Toronto neighborhoods just astounds me. Your half million dollars plus could be well invested somewhere else just to be in the “hood” and by hood I don’t mean the J-F area. We all appear to be trapped on either side of the insanity with real estate! Oh the humanity, when will it all end! Oh just wait, wait, wait, just a little longer……….boom, crash, bang poof! The end is here, will someone please off the Grim Reaper a drink!

#168 Ogopogo on 01.16.13 at 3:06 pm

“Who’s losing in the housing slump? Real estate agents”:

http://business.financialpost.com/2013/01/16/whos-losing-in-the-housing-slump-real-estate-agents/

Uh oh, is that why realtors are so mad at Garth? Everyone needs a scapegoat. The ancient Greeks called it “pharmakon”, the victim who must pay the price for the sins of the community and thus purify it.

Ironic, isn’t it, that it’s realtors who will pay the price in the short-term as delusional sellers cling tooth and claw to their depreciating homes.

#169 Gregor Samsa on 01.16.13 at 3:31 pm

I believe in both a housing correction AND low interest rates for the foreseeable future. I think the two go hand in hand, because as the housing correction starts to pinch the economy, interest rates will need to remain low, otherwise the economic damage and housing correction would be compounded by rising rates. Although going through that pain would be in the best long term interests, our conservative government is all about the short term and lacks the fortitude to do such a thing.

I believe we are a facing a Japan style situation.

#170 AL on 01.16.13 at 4:07 pm

Dump now or be priced-in forever!

#171 Foolish Fool on 01.16.13 at 4:09 pm

#111Bigrider on 01.16.13 at 10:44 am

I don’t think is related to education but rather to affordability and banks facilitating certain type of loans vs others. For starters that do not have 600 k liquid to start investing in a balanced portfolio it’s much easier to go to a bank with 20% down payment and get a 480k mortgage than to get a 480k loan to invest (just to keep it at the same 600k level). Each type of investment has its own advantages and disadvantages and it just happens that RE market is not in a very good shape right now. Like Garth is saying diversifying is the key but…who can afford to diversify and when?

#172 espressobob on 01.16.13 at 4:20 pm

#78 Hoof Hearted

That comment was a killer!

#173 Form Man on 01.16.13 at 4:32 pm

#78 Hoof Hearted

good one

#174 };-) aka Devil's Advocate on 01.16.13 at 4:50 pm

#156AACI Okanagan on 01.16.13 at 1:34 pm
#128 };-) aka Devil’s Advocate on 01.16.13 at 11:57 am

I just reread your post and once again you have gone off track and are spinning this into something else… wow

Garth, as I recall, touched lightly on the matter some time ago when giving other such sound advice on how to successfully sell one’s real estate.

I can see how you, and others, might not understand.

I don’t have time to compose a logical explanation that would convince you. So let’s just leave it, as I’d actually prefer, with you thinking what you think to my competitive advantage as much as you’d argue my apparent lunacy a disadvantage.

#175 Frank le skank on 01.16.13 at 5:03 pm

#175 };-) aka Devil’s Advocate on 01.16.13 at 4:50 pm
You are, without a doubt, a master manipulator.

#176 salonist on 01.16.13 at 5:10 pm

‘Planet Mom and Dad’

http://www.calgaryherald.com/news/national/Planet+Helicopter+parents+infiltrate+college+workplace/7828350/story.html

#177 robert on 01.16.13 at 5:30 pm

As a boomer turning sixty this year i can say that being liquid with absolutely no debt has put me in the drivers seat. Am currently renting a $500,000 home for $1400 a month and this same home in Vancouver would be $3,000,000 plus. Will i buy another home yes I will but not at these prices . I have all the time in the world and yes i am hoping for higher interest rates as i will win both ways. Higher rates will help my investments and will drive home prices lower. Now in the big picture I feel so sorry for the young homeowners who will end up trapped as i did in the early eighties. The flippers and the speculators deserve everything they get and i wish them all a good spot in the bankruptcy lineup. From what i understand that line is growing and in fact the Trump Towers is sure to add more to this line very quickly. I was happy to see the courts didnot bail these greedy individuals out as they are where they are because of greed not ignorance.

#178 Mike on 01.16.13 at 5:33 pm

Mr Turner,

I think Don Pitts over at the CBC needs to be forwarded a few of your blog entries.

Also, the 344+ people that agree in the comments section with his article also need re-educating.

I know you are just one (super)man but anything to help is appreciated.

The CBC is telling people to shovel their cash into the furnace as fast as possible….could it be banker sponsored propaganda? In Canada?

http://www.cbc.ca/news/business/taxseason/story/2012/12/18/f-rrsp-2013-don-pittis.html

The manipulators have almost everyone fooled…thanks again for being the lighthouse in the fog of dis-information.

Mike

#179 Old Man on 01.16.13 at 5:36 pm

#137 lawboy – you are correct, but at one time was a key area in Toronto, and my Professor at UofT in Urban Economics was Jim Lemon who became a drinking buddy of mine, and gave me high marks. It becomes all a matter of a demographic shift in time, whereby, an ethnic group establishes an area in the city, and another moves in.

This causes concern, so the old group with increasing prosperity will drift to another location; this is nothing new as ethnic groups tend to move upward into new locations at the time which is a fact in life to establish a new position. Kind of like a chess game of sorts, and in Toronto can give many examples, but will not as know better.

In any large city there is a process that evolves over many years that one day an area is good, and then turns bad because of many factors. The key to this all in Toronto for a future buy in years to come is to locate an area that has a proper balance, and that is where one needs to buy; a very complex mix of factors, but know where to hoop a future home.

#180 jess on 01.16.13 at 6:03 pm

perhaps smoking man you would like to use your brillance and enter this competition to find the most harmful and dangerous financial product traded on the markets

http://www.dangerous-finance.eu/
=========

Jon Stewart on H.S.B.C.: “Holy Shit, Bank’s Corrupt!”
http://treasureislands.org/jon-stewart-on-h-s-b-c-holy-shit-banks-corrupt/

#181 hangfire on 01.16.13 at 6:47 pm

#130….Nancy….death won’t overtake all the boomers at the same time will it? The reverse mortgage finances less than 40% of the equity on contract……the rest of the juice gets sucked up by reverse compund interest…until the banks own 100% of the property. So….the banks can sell at a deep discount…and profit…even if properties fall 50 to 60%..they’re still in the black…cash on cash.

In this world of taxation being the union dwellers most popular cash cow…don’t think that Obama style estate taxes will become a reality in Canada…sooner than later. When boomers die there will be a division of assets between the bank and the CRA…..I would also expect an evolution in tax collection if tax revenue can not keep up with the continuing escalation of demands from the civil service…..the CRA may begin grabbing taxes owed by estates from living family members….if there isn’t ‘enough equity’ left after a real estate meltdown……..the smart money should take classes in off shore investments…..in China where they have zero property and estate taxes.

#182 Buyer on 01.16.13 at 6:48 pm

Garth said: “He needs insurance, a property maintenance budget and is negating the imputed value of $600,000 in equity. His net will be closer to $30,000, and it will come as rent, fully taxed. Six hundred earning capital gains and dividends in a balanced portfolio should yield at least $42,000, be taxed at one-half the rate and stay fully liquid. How is there a comparison?”

Hum. I kind of disagree. Sounds good like that, but I bet no bank would lend me that amount of money to invest in anything else than real estate. Your calculations work well Garth if the guy had paid his triplex cash. Which he haven’t I’m sure.

So add in a big financing charge. Investment? I’ll pass. — Garth

#183 Nostradamus Le Mad Vlad on 01.16.13 at 7:12 pm

-
A Friend in Need Is A Friend Indeed . . .

I’m reaching out on behalf of a friend of mine who needs some help!

His wife told him to go out and get some of those pills that would help him get an erection.

When he came back he handed her some diet pills.

Anyway, he’s looking for a place to live. Can you help him?
*
#63 Suede — “I would love to see some Mad Vlad links on this story.” — Doest thou mean St. Saint Pope Al of the MoneyGoredBaggers? Fear not! Here, here, here, here, here and here. Glad to be of service!

#78 Hoof – Hearted — “‘Nuts and Butts’ – no way.” — Love it! Exc. work!

#152 Mixed Bag and #135 Doug in London — “That was effin’ hilarious.” — Sure was!

#179 Mike — “The manipulators have almost everyone fooled…thanks again for being the lighthouse in the fog of dis-information.” — Disinfo. works well on those who don’t use their critical thinking skills.

#184 AACI Okanagan on 01.16.13 at 7:18 pm

#175 };-) aka Devil’s Advocate on 01.16.13 at 4:50 pm

I can see how you, and others, might not understand.

I don’t have time to compose a logical explanation that would convince you. So let’s just leave it, as I’d actually prefer, with you thinking what you think to my competitive advantage as much as you’d argue my apparent lunacy a disadvantage.
————————————————-
A few posts ago you said there were many examples of what you claim as all I had to do was go on Interface and voila they were there.. now you don’t have the time.. talk about blowing stuff out of one’s back end..Only thing I agree with you is that you should back off this topic because you are looking foolish..

In typical DA fashion, I am sure you would want to get in the last word, knock yourself out.. I am done

Character is like a fence…it cannot be strengthened by whitewash

#185 KingBubbles on 01.16.13 at 7:21 pm

Winnipeg Realtors forecast unicorns and ponies for everyone in 2013

#186 Old Man on 01.16.13 at 7:26 pm

One last tip for those in this room that have kids going to University with marks that need to be boosted from a C+ to an A-, and know this is a bit off topic, but to make it in life one must push the machine which to be a success in life with a good job to ever be in positon to buy stocks and Real Estate in life, as need a good degree.

Now tell your kids to fear not any Professor and they love a sheep coming from the frock coming to their office in private for debate to call BS on them over an issue; they love it to be challenged, as the student has courage enough to debate the issue with passion; this is what an education is all about.

That student will get a high mark in the end, as came out like a bitbull to challenge the Professor in private about two visions that needed to be resolved with a heated debate. I did this all the time :)

#187 Buyer on 01.16.13 at 7:39 pm

“So add in a big financing charge. Investment? I’ll pass. — Garth”

I don’t say that his purchase was a good one, just that your explanation doesn’t make any sense.

#188 Old Man on 01.16.13 at 7:58 pm

I see that Garth took a pic with my dog in training to snap a babe on the beach for my eyes only, but will always share my sins in life.

#189 Smoking Man on 01.16.13 at 7:58 pm

181 jess on 01.16.13 at 6:03 pm

Not, Products, every thing can be hedged

people are dangerous, wish full bias is what’s going take the amateurs down.

An open calculator brain, void of opinions is a money printing press..

#190 Grim Reaper/Crypt Speculator on 01.16.13 at 8:03 pm

#180 Old Man on 01.16.13 at 5:36 pm

Canadian Prime Minister in 2020

” By Golly Gosh..we must slow down this immigration”

#191 Nostradamus Le Mad Vlad on 01.16.13 at 8:17 pm

-
#89 Humpty Dumpty — 15:31 clip “Global derivatives are 5 times global GDP.” and 6:28 clip The US Govt. borrows US$6 bln. per day which is four mln. a minute;
*
Mali’s Gold “And there is your motive for France (needs 5 years to return Germany’s gold) and the US (needs 8 years to return Germany’s gold) to have suddenly decided to invade.” wrh.com, such as here and here; Bankers’ Wars “The so-called “clash of civilizations” we read about on the corporate media is really a war between banking systems, with the private central bankers forcing themselves onto the rest of the world, no matter how many millions must die for it. Indeed the constant hatemongering against Muslims lies in a simple fact. Like the ancient Christians (prior to the Knights Templars private banking system) , Muslims forbid usury, or the lending of money at interest. And that is the reason our government and media insist they must be killed or converted. They refuse to submit to currencies issued at interest. They refuse to be debt slaves.” wrh.com; 5:30 clip Suzie Orman on America’s debt; Bernanke on BRICS; 6:01 clip plus lotsa other links. Pentagon moaning again;
*
Big Pharma “School shootings started in 1988, coincidentally, the year Prozac was introduced.” wrh.com. TPTB, since 1988 have also selected whom they want to be the figurehead running the US. G.H.W. Bush began talking about the NWO during his term; 19/01/13 Gun Appreciation Day, Larry Correia “The average number of people shot in a mass shooting event when the shooter is stopped by law enforcement: 14. The average number of people shot in a mass shooting event when the shooter is stopped by civilians: 2.5. The reason is simple. The armed civilians are there when it started.”; Hollywood The CIA and other depts. run it, and Guess Who gets to download it?

#192 DonDWest on 01.16.13 at 8:22 pm

168 Holy Crap Wheres the Tylenol on 01.16.13 at 2:55 pm

“What ever happened to people living in 1100 to 1600 sq.-ft. homes?”

Developers stopped building them. . .

It’s easy to call my generation entitled when there are no smaller houses available to buy. When is the last time you’ve seen a BRAND NEW 1,100 sq single detached house? Most houses around the size you describe are older houses. As such, the boomers and the generations before them are asking a premium for them. . . Many young people most likely calculate the math per sq foot and put into consideration maintenance costs. Often the brand new McMansion is a much superior deal if you can afford it.

Don’t confuse cheap with value, make no mistake, 1940′s Canadian bungalows are the most overpriced relative to value consumer item in the world right now.

I’ve always been a value shopper; not a price shopper. I’m definately not above the 1940′s bungalows, if they were selling for 70K to 90K I would be interested.

#193 Form Man on 01.16.13 at 8:31 pm

‘Character is like a fence…it cannot be strengthened by whitewash’

well DA, after your valiant linguistic effort, tying yourself in countless mental knots and arriving repeatedly at intellectual cul-de-sacs……….. ‘AACI Okanagan’ nails you to the floor……..

#194 TurnerNation on 01.16.13 at 8:32 pm

#74The moneyger – To #62 Neta on 01.16.13 at 12:38 am on 01.16.13 at 1:12 am

Just buy RSI.TO (Rogers Sugar Income Fund).

In USA is listed Ingredion – they make corn syrup, fructose, and so on. All the nasty stuff that’s everywhere. Stock’s on fire. I own neither.

#195 };-) aka Devil's Advocate on 01.16.13 at 8:39 pm

#185AACI Okanagan on 01.16.13 at 7:18 pm
A few posts ago you said there were many examples of what you claim as all I had to do was go on Interface and voila they were there.. now you don’t have the time.. talk about blowing stuff out of one’s back end..Only thing I agree with you is that you should back off this topic because you are looking foolish..

In typical DA fashion, I am sure you would want to get in the last word, knock yourself out.. I am done

Character is like a fence…it cannot be strengthened by whitewash

What is ‘Interface’? If I am reading you right? I wouldn’t mind taking a look at the examples you say you found there of what I was talking about.

But you are right on the matter of the subject at hand; and as I mentioned previously let’s just politely, oh too late for you to, agree to disagree.

That interface request would give you last word. Thanks.

#196 Finally on 01.16.13 at 8:41 pm

YVR, please crash this year, I want to buy a house!

#197 TurnerNation on 01.16.13 at 8:45 pm

#139 Southern Ontarian

Eglington and Dufferin…where police are often posted across the street from a meeting hall, in front of the gas station. Waiting. Watching. Yeah. Spin the wheel.

#198 Smoking Man on 01.16.13 at 9:09 pm

Old Man, you know I like you but post 187, ridiculous…..

Spit on the prof, walk out, since when does a real player need approval or grading from a trained dog… Who don’t know he’s a dog.

Old Man.. Since when does kissing ass ever help anyone. Compete and take is how it’s done….

#199 Dr. WAYNE on 01.16.13 at 9:09 pm

#164 furst on 01.16.13 at 2:13 pm

Thanks for the vote of confidence … your encouragement to continue is noted … onward ….

#200 prairie person on 01.16.13 at 9:11 pm

Went for my daily constitutional. No new for sale signs but saw a sign of a different kind. Recycling boxes are being put out for tomorrow. I’m used to seeing guys with groc carts raiding the blue boxes for cashable beverate containers but this evening a saw a nicely dressed woman, beret, coat, nicely done hair taking soft drink cans, etc. from blue boxes, then go to her fairly new SUV. When I got beside the SUV, it was filled with bags and boxes of returnable. Her clothes and vehicle say middle class suburbia. How tight is money after paying for that new house?

#201 Andrew on 01.16.13 at 9:15 pm

Well, another blog day is coming to a close, time for DABob’s credibility score.

Due to general avoidance of timely Real Estate topics such as today’s Financial Post Article and well, basically everything Garth wrote in the present blog, it’s another downgrade.

I will also have note that DA’s Realtor SalesSpeak is beginning to melt into the incomprehensible, which is evident in the following excerpt:

“I don’t have time to compose a logical explanation that would convince you. So let’s just leave it, as I’d actually prefer, with you thinking what you think to my competitive advantage as much as you’d argue my apparent lunacy a disadvantage”

If anyone can can make sense of this,

God bless you.

#202 NoName on 01.16.13 at 9:27 pm

@ 103 Rishu

You made some good points but, but excuse that gen.y cant move out of the basements because low paid jobs and student debt is flawed. If you compare two young adults one with trade and one with university degree,one with trade school will come ahead easy. Licensed tradesman no mater how young and inexperienced never works for low wage. There is one more advantage to trade
it can not be outsourced. And if you play cards right by age of 30 you can get an engineering degree and all that paid by employer. No student debt at all. wage for mickey mouse electrician 64k wage for good electrician 80-110k.
We all make desitions…

#203 Bobby on 01.16.13 at 9:27 pm

For Devils Advocate,
I certainly don’t profess to understand your logic, but I admire your conviction to what you preach.
However, you didn’t answer my earlier question; so how many of those normal sales in the Kelowna area can be attributed to you. Let me guess, you were to busy pontificating to notice. Or, perhaps it is a sore point?

#204 Old Man on 01.16.13 at 9:50 pm

#199 Smoking Man you are missing my point, as going to University is just not sitting back in class to listen to a Professor about this and that like a Sheep, and all parents must encourage the kids if they are disturbed by a lecture to take the high road and confront this professor at his or her office for a debate in private.

They are academics and love a student that would even think about challenging them, but they love it all, as it shows courage, and a desire to learn together with a sense of mutual respect for an exchange of ideas; few would go such, and many would not – so who gets the reward in the end?

#205 espressobob on 01.16.13 at 9:57 pm

#193 Don D West

70k to 90k for one of those ancient bungalows? That sounds a bit high considering it might cost much more to restore. Oh and the property taxes, utilities etc.

Still seems expensive. But you made a good point.

#206 mamma on 01.16.13 at 10:06 pm

let me get the facts
He’s 33 and bought a house in 09 for 355k.
He doesn’t sell it for 556k because it’s not enough money (200k in 3 years is a lot of money)

my questions are:
1. How much did he want to appreciate for if 200k in 3 years wasn’t enough?
2. Where exactly is he going to live anyways?
3. Those who will pay 480k for are fools as well as those willing to to get it for 556k.
4. Statistically, as more suckers get in, there should be less fools available so hopefully RE prices can get more in line with real affordability and expectations. A house is not everything in life.

#207 Andrew on 01.16.13 at 10:15 pm

#205 Pinstripe

Huge Article.

“But new technology like fracking and directional drilling delivered up huge amounts of gas, creating an oversupply.

“They gutted their industry. Are we heading in the same direction with oil?” he asked.”

-AB Energy Minister Ken Hughes

This is the new reality for Alberta, something the government admit’s they never saw coming even 10 months ago.

#208 bclandguy on 01.16.13 at 10:27 pm

#203 NoName,

I fully agree with you, the best thing I ever did in my 20′s was get a trade in surveying at BCIT, it was the best move I ever made in life, now I can work anywhere in the world that has titled land or some sort of it, and have expanded my career to mapping, GIS and GPS. My nephew who is now 20 is on his second year of his commercial plumbing trade, he has to go in the wet ditch a lot but he says “it’s not that bad, the pay is good and in 2 more years I’ll have my ticket” Good on him for that as he can for sure work anywhere with good pay as a plumber………I always, always tell young people to get a trade!

#209 Ms bboomer on 01.16.13 at 10:39 pm

#80 Dr Wayne to:
#44 Ms bboomer on 01.15.13 at 11:12 pm
“Hey Ms. … in the event you haven’t figured it out yet, this isn’t a popularity contest … bring it on …”
————————————————————–
I’m sorry, I don’t understand you. What do you mean, “bring it on”, and what is “it”?

#210 DonDWest on 01.16.13 at 11:03 pm

#207 espressobob

I said I “would be interested,” I never said I would actually buy. 70K to 90K would be the most I would pay; it would have to be a 1940s bungalow in a damn good lot and in a decent neighbourhood.

Right now, the boomers in Halifax are asking 200K for such bungalows. Often they have been listed for years. Not touching that with a nine and a half foot inch pole considering I’ve seen some brand new houses in Halifax close to 2000 sq. ft. now selling for around 280K.

For amusement sake I went to an open house for one of these ancient bungalows. The seller was typical. Baby boomer, this is his second property, trying to sell it himself. . . He was selling it for $199,999 (baby boomers love to play around with this number when selling junk). He explained to me that I’ve been the only perspective buyer the past six months. He then went on a rant how young people are entitled these days and don’t want to buy small houses. I then proceeded to laugh in his face. He truly is a tribute to salesmanship isn’t he?!

Last time I checked the bungalow’s listing expired and a week later he relisted it for $219,000. I call this tactic the “Haligonian blitz.” Study Viewpoint and you’ll come across it enough. . .

Regardless, it will be these new houses (like the one I mentioned close to 2000 sq. ft. selling for 280K) that developers can’t sell that will eventually force the boomers to capitulate on their overpriced garbage. I’m going to laugh at the inevitable day when a brand new house crosses price with a baby boomer junk house. It’s going to happen soon here in Halifax. . .

#211 DonDWest on 01.16.13 at 11:07 pm

#206 Old Man

Professors who like rebellious students? What sort of Mickey Mouse college did you attend?

#212 Brew on 01.17.13 at 2:06 am

@#110 American

I think you are wrong on your Indiana CAT wages. Can you back that up? Low wages was a factor in the move.

Brew