The harbinger

hot

A year and a half ago she approached me and said, “Don’t dare tell my husband.” I soon realized, sadly, this was going to be about her house. But I soldiered on. “I want to sell it because everyone on the street is obsessed,” Dawn said. “All they talk about is the Chinese and how prices are going to go up forever. I’m with you. Time to get out.”

And she did, after four sessions with me and her squeeze, Rick. They sold the ugly little blue bung on the treeless Van street to some Guangdong dude in a bidding war for $1.6 million, then leased it back for 24 months. Her mother told her she was insane. The neighbours watched the spectacle and laughed. Fool woman. But Dawn paid out the $480,000 mortgage on a house she’d bought for less than eight hundred four years earlier and invested the rest. $1.1 million.

Today there are no Mainland Chinese guys arriving in airport limos. Four ‘For Sale’ signs decorate on the street, two of which went up last autumn. The bung is worth about $400,000 less, but nobody’s buying anyway. Nor is anyone laughing. Dawn still lives in the same house, and could buy it back today with cash – no mortgage – having increased her family’s net worth by almost half a million in under two years. Rick thinks she’s a freaking genius and is mulling retirement at age 42. The Chinese dude has offered to sell them the place, “on most reasonable terms.” Dawn cracks up over that.

There has been no US-style housing crash in Vancouver. No wave of mortgage defaults. No mattresses or furniture hauled on lawns by bailiffs. No more abandoned houses. No Armageddon headlines. No tears.

But every day everybody’s equity goes down a little. Families get a little less wealthy and, so, a little more indebted. Those who bought in the last two or three years – when ‘buy now or buy never’ was the meme, local promoters used the HAM scare to bloat prices, and house lust ignited the region – are losing the most. Troubling that so many are kids. Young couples snared by realtors without ethics and banks without morals. How will they recover? And without them, who moves up the property ladder? Who bails out the wrinklies in their seven-figure houses with their failing incomes?

What’s happening now in BC is the slow-mo correction this blog’s warned about for a few years. It won’t follow the US shock-and-awe model of 70% craterings within a year or two. There will not be millions of foreclosures, or weekly auctions of unwanted homes on the courthouse steps. Rather, sales slide a bit, then slide a lot. Prices flatline before easing lower in a long and cascading arc with an unknown bottom. Local real estate boards will do all they can – as they are now – to mask the trend. No politician will address it. The media will fudge. The best hope is that the losses and disappointment stay silent, lest private hurt goes postal.

In case you didn’t realize it, here are a few things happening in the harbinger province:

In the capital, Victoria, for generations a mecca for wealthy retirees looking for a storybook city with flowers in February, house sales tumbled again last month, this time by 21%. The median price has already fallen about 8%, erasing $40,000 in equity, and yet sales languish. There are almost 4,000 houses on the market and fewer than 300 just sold. Worse, of the 304 listings above $1 million, last month three changed lands. That’s a 14-year supply.

“Sales are not what we would like to see,” admits head realtor Shelley Mann.

In the inspiring south Okanagan Valley, where real estate values bloated right along with those in SoCal, the news is even worse. Total sales have plunged by 38% from this time last year. Dollar volume for the entire local real estate board fell last month by half compared to last year.  This is a disaster on mute.

South and east of Greater Vancouver, through the bustling Fraser Valley, the local real estate board has been telling regional media things are just fine. But hardly so. Sales of single-detached homes are down 63%, falling from 714 last year to 264 so far in 2013. In that greatest of human ironies, as prices fall, buyers retreat.

And in Vancouver itself, the marquee housing market in North America a year ago, sales now erase monthly. Down 14.3% in January from a year ago, the second-worst showing in a dozen years. Detached house sales are off 18%, and overall activity is running 19% below the 10-year average. While the real estate board claims a 6% price decline, the street toll is substantially worse. This year the average SFH will dip below the $1 million mark, rolling prices back three years. And that won’t be the bottom.

In Toronto, as in Calgary, Edmonton, Saskatoon or Montreal and Halifax, denial. As local GTA realtors cooked their numbers this week to show only a slight sales decline, my email inbox was slammed with notes like this: “Garth your house of cards is crumbling…fast. Wrong since 2008 – 5 years and counting.” In a world which no longer has boundaries, fences, walls or moats, people still think they can live in a city where ‘it’s different.’

So did Dawn’s mom.

231 comments ↓

#1 trex on 02.06.13 at 10:04 pm

I live in Nanaimo.
Word is I am down about %12 YOY.
The burn, Oh God I feel the burn.
Somebody fix it please.

#2 Robbie on 02.06.13 at 10:05 pm

Well said, Garth. The tide is going out, as one might have expected to happen eventually. Only those wise enough to see what was inevitable will be prepared.

#3 The funky traveler on 02.06.13 at 10:05 pm

Its going to be an interesting year

#4 City that smells like it sounds on 02.06.13 at 10:07 pm

Firrrssssssssssst!

#5 johnny d on 02.06.13 at 10:08 pm

Garth. So good to hear from an economist who stresses the human aspect of all this stuff you speak of. I’m tired of hearing of the pure greed and consumption that most realtors, brokers, bankers, developers, crooked politicians harvest and sell to everyone. At the end of the day, it’s all about the human aspect and those just trying to make an honest living. Too many people forget that.

#6 Nemesis on 02.06.13 at 10:08 pm

“There has been no US-style housing crash in Vancouver.” – Hon. GT

The operative word is, “yet”. For some inexplicable, ad hoc, heuristic reason… I think it’s actually going to be worse, OldPol.

#7 Bo Xilai on 02.06.13 at 10:10 pm

0nly 67 sales in Vancouver today… Things are looking bad here…

The Year of the Rat starts next Sunday, but even that won’t help real estate agents and developers.

#8 Richard and Zeus on 02.06.13 at 10:10 pm

Me – “my plan…”
Wife – “MY PLAN !!
Me – ” the plan….”

Garth is so right….however…I simply won’t buy paper again. THE Plan….is to vulture in condos in 12 to 18 months and rent them out earning us the same 7% Garth talks about. People have to live somewhere and unlike stocks…..RE does not go to zero. We will be paying cash so there will be no interest payments. Only property tax. Rents will reflect strata fees.

Right Zeus? Bark !! Good dog…

#9 Mister Obvious on 02.06.13 at 10:12 pm

I can’t tell you how proud I am that my city and my province are setting the trend for the entire country.

Sorry, gotta go… tears welling up, lump in throat.

#10 Dr. Hoof-Hearted on 02.06.13 at 10:12 pm

Fiiirrsszzztttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttt !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

#11 White Rock Mom on 02.06.13 at 10:16 pm

Here is South Surrey a number of houses have sold for $100,000 less than asking. My favourite recent sale is 13577 Marine Dr. A beautiful house with on ocean view. It was originally listed for the equivalent of $1,900,000 but with a number of lucky 88888888s. Most recently it was listed for $1,688,888 and it sold for $1,475,000. Another house on Greencrest sold for $200,000 less than the BC assessment. Talk about volatility.

#12 too much debt on 02.06.13 at 10:18 pm

Nice work Dawn, way to set yourself up for life…you now have options. imagine how long it would take you to work and save $1 million. You can now take a lower paying job that you enjoy more if you like….good for..

#13 Inglorious Investor on 02.06.13 at 10:21 pm

Good for Dawna and Rick.

But retirees may yet have the best arbitrage opportunity of all. If they are able to retire to the US, they can sell their overpriced Van coop and move to Florida, Arizona, or some other sunny state, buy or rent some cheaper but comparable digs, and live out their golden years in liquid luxury.

Depending on the location, the opportunity may not be quite as lucrative today as it was when I first mentioned it last year, but probably still pretty darn good, especially with the dollars at par.

#14 WhiteKat on 02.06.13 at 10:21 pm

Add Ottawa to the ‘in denial’ list.

#15 LongLiveTrudeau on 02.06.13 at 10:23 pm

In NOTL, Ontario the owners of one of the most beautiful estates near the main street tried to sell their place for over $1 million, further tried to reduce the price and couldn’t sell it. The bank foreclosed on it, and now dropped the price $400 grand from original listing. It is not on mls at all. As people pour their money into bank stocks, The banks are keeping hush about their actual foreclosure numbers…..

#16 Don't read his post on 02.06.13 at 10:26 pm

What if your wrong……….. Have you ever stopped to picture it?
How do you sleep at night?

#17 Andrea Sargeant on 02.06.13 at 10:31 pm

Excellent story! Sorry you weren’t “lucky” but why would you need “luck” when you are sooo good!

There are new $400,000-$600,000 homes ranging from 1,700 – 3,000 sq. ft. going in nearby. The houses are selling with the lure of a forest nearby or behind the shallow backyards…with a premium of $80,000-$100,000. All of the renderings are at an angle that makes the houses look grand and spacious with shiny fixings that make them appear glamorous. The sales people mention the nearby (tiny) school but fail to include that new residents’ children are being bused across town. These homes are selling. It’s criminal. Sigh.

#18 Pat on 02.06.13 at 10:32 pm

Can you comment on Canadian covered bonds Please Garth introduced in 2007

#19 Rene on 02.06.13 at 10:35 pm

#7. “The Year of the Rat starts next Sunday, but even that won’t help real estate agents and developers.”

Actually, it’s the year of the snake.

#20 Mike Stewart on 02.06.13 at 10:44 pm

Be careful what you predict, its not happening this year for you. There has been increased activity in the downtown market in Vancouver in the last few weeks. I’ll keep you all posted :-)

#21 Canadian Watchdog on 02.06.13 at 10:44 pm

There has been no US-style housing crash in Vancouver. No wave of mortgage defaults.

Wondering why bankruptcies, defaults and consumer proposals are low in Canada? Because lawyers and bankruptcy trustees like to delay when billing at hundreds of dollars per hour. OSB explains.

The situation is a complete mess.

#22 Chickenlittle on 02.06.13 at 10:52 pm

They’re baaaaack!!

http://www.thestar.com/business/real_estate/2013/02/05/home_prices_jump_across_the_gta.html

What I really like about this article is that they talk about the sale of the house, and assume that the buyers were first time buyers. All the article said was that the asking price was $470 and they got $525, so that means they MUST have been first time buyers. Talk about begging the question.

Quote: “People seem to have let the dust settle (since the market started softening last summer) and they’re saying, ‘Maybe it’s time to buy now that we’ve had six months more to save up and see what is happening in the marketplace.”

I guess 8 months was enough to save up for the rest of their downpayment. I mean hey! If the house you want is $525 all you need is a measly $105k downpayment. Heck, I have that in my sock drawer.

#5johnny d:

Well said. I am so sick of people complaining about first world problems. I lived in Romania for two years working in a hospital, and believe me, if you are complaining about renting, or if people are making fun of you for renting, they need a serious attitude adjustment. We have it really good here. Who cares if you rent? We have clean water, electricity, and unless you live near Spadina, rat-free homes. People need to get out more and get a life.

#23 Canuck in Oz on 02.06.13 at 10:53 pm

Garth,

I only wish the sensibility that is finally overcoming my home city of Vancouver would start to overcome my current city of Melbourne. We have a similar bubble here but no real signs of impending correction – and people are still delusional. For example this nice but boring family home in the nice but boring suburb where I live – Asking AUD$1.6 to 1.7 million. http://www.domain.com.au/Property/For-Sale/House/VIC/Mount-Waverley/?adid=2010253332

The average annual family income for the area, about $55,000.

We have had the same ridiculous run up in debt levels, (Debt/Income ratios ~150%) contraction in rental yields and stagnation in income.

But the slow melt just doesn’t seem to be….melting.

I have been keenly aware of a housing bubble here since I moved here in 2008 and have been waiting and watching since then. The wife is keen for a bigger place, garden and pool. I know that on fundamentals this is irrational – but the market can stay irrational for a very long time.

Your sage advice would be appreciated.

#24 Ford Prefect on 02.06.13 at 10:53 pm

I looked at the South Okanagan story today at http://www.castanet.net/news/South-Okanagan/87012/Roof-comes-off-housing-market.

It shows MLS inventory of 2230 and sales of 51 for January 2013. That gives MOI of 43!

#25 Just thinking on 02.06.13 at 10:53 pm

best story so far… wish i could do this also.

#26 Just thinking on 02.06.13 at 10:55 pm

What does everyone on birchview street in lorne park know.. listings increasing daily there.

#27 Bo Xilai on 02.06.13 at 11:01 pm

#19, Rene… Yes, you are correct… I often confuse real estate agents, developers, snakes and rats.

My bad.

#28 Just thinking on 02.06.13 at 11:02 pm

Relisted again.W2485432 Oakville
Relisted againW2545370 Oakville… among Ms. Phinneys many relisted homes in Oakville and Burlington.

Many homes also listed for sale or for rent. Agents don’t even want to put in offers. According to one agent, they all talk and they know who the low ballers are. They obviously didn’t identify the person by name to me, but when I asked if a certain offer might be accepted, they said no. Their low baller had already tried that. Someday I think they might be begging the low baller to buy the properties… not sure how long the speculators can hold on for.
In Toronto, the speculators are continuing to bid up the homes. There are bidding wars indeed… but it’s just between speculators. Everyone thought buying by February would be a good idea. I think we have to wait until after the spring rush to finally see the changes in the market in the greater toronto area. I do think that this will finally be the time, since even the realtors say that it is very difficult for the speculators to flip homes at these “land value” prices.

#29 Brew on 02.06.13 at 11:03 pm

OMG I’ve used those floor polishers many years ago. They are tricky and take awhile to get the hang of. LOL

#30 Dr. WAYNE on 02.06.13 at 11:04 pm

#4 City that smells like it sounds on 02.06.13 at 10:07 pm

Firrrssssssssssst!

AND …

#10 Dr. Hoof-Hearted on 02.06.13 at 10:12 pm

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

Now you gotta admit … here’s a couple of royal a$$holes who enjoy pissing off the venerable Mr. Turner. They really don’t give a supreme sh++, and continually expose their unabashed ignorance, stupidity, and just plain moronic behavior. BUT … the world is a diverse place and we should feel sorry for small cranial capacity and inimitable stupidity.

#31 Money talks on 02.06.13 at 11:04 pm

CBC reports one third of sellers receiving under asking in YWG for Jan.

http://www.cbc.ca/news/canada/manitoba/story/2013/02/06/mb-hosung-sales-january-winnipeg.html

Yet WREB, the horses mouth, says two thirds received under asking.

http://www.winnipegrealtors.ca/Resources/ShowDocument/140

They also fail to report how many homes had reduced their original list price after sitting on the market for a while.

We watched one home list for 389, then slowly drop down to 299 after several months on the market. After dropping to 299, they had a bidding war and sold for 320. So does that count as selling over list in their stats or do they account for original list?

Last year, we were able to see the original list price, adjusted price and sold price in our matrix. The original price section vanished last fall and when we asked our agent why, he said there was some changes made to the system. What that tells me is they don’t want us average Joe’s keeping track of each price drop.

Would love to get my hands on the entire MLS database.

#32 XKR on 02.06.13 at 11:06 pm

I think there must be a conspiracy to keep it all hush hush. As I look over the MLS listings for my own little corner in the far reaches of the GTA all I can see is a blizzard of red dots representing some undeniably GROSSLY OVERPRICED real estate much of it looking like crap. So what gives here? Mexican stand-off?

#33 The end is nigh on 02.06.13 at 11:10 pm

# 19 Rene.
Rat, snake what’s the difference.
It’s all just HAN sorry HAM superstition.
The offshore German speculators are bailing out.
God help the White Devils property virgins who followed the Bob Rennie pied piper.

#34 TurnerNation on 02.06.13 at 11:13 pm

Big Con Govt. run amuk. Mission creep.

We are run by a Mission Creep.


Reining in the Risks: Rethinking the Role of Crown Financial Corporations in Canada

February 6, 2013 – Philippe Bergevin & Finn Poschmann

After years of “mission creep” at Canada’s Crown financial corporations, their activities have expanded far beyond their original mandates and need reassessment, according to a new report from the C.D. Howe Institute. In “Reining in the Risks: Rethinking the Role of Crown Financial Corporations in Canada,” authors Philippe Bergevin and Finn Poschmann assess the risks posed by three major Crown financials for taxpayers and the economy and make recommendations for limiting their activities.

For the report go to: http://www.cdhowe.org/pdf/Commentary_372.pdf

#35 Asse on 02.06.13 at 11:14 pm

Inglorious Investor, buy a place and retire in Florida or Phoenix, at 42 with only 1.1m. You live pretty cheap or you like ghettos. I have access to a Florida bungalow that cost $420k (not mine). Nice places/safe areas aren’t that cheap. I know a few that bought condos as well. Still over 200k 2 years ago. Cheap condos were fraught with problems. Still have to maintain residency here. Nice Fairy tale.

#36 Solex on 02.06.13 at 11:16 pm

#20 Mike Stewart

Downtown Van is irrelevent – the only people who can aford to live there can afford to lose money hence the apparent slower decline (as if 14% decline in sales is anything to be happy about).

#37 AK on 02.06.13 at 11:16 pm

#4 City that smells like it sounds on 02.06.13 at 10:07 pm
“Firrrssssssssssst!”

#10 Dr. Hoof-Hearted on 02.06.13 at 10:12 pm
“Fiiirrsszzzttttttttttttttttttttttttttttttttt”

Not even close. Losers!!!!!

#38 Don on 02.06.13 at 11:18 pm

“Garth your house of cards is crumbling…fast. Wrong since 2008 – 5 years and counting.” In a world which no longer has boundaries, fences, walls or moats, people still think they can live in a city where ‘it’s different.’

People like this are lost when it comes to reason and timelines. The logic, it hasn’t happened in 5 years so it will never happen…Unfreeken believable.

Hey buddy, do I have the house for you. A beautiful contemporary .5 bedroom home with a mountain view of a strip coal mine…great summer and winter breezes, 5 appliances. GRANITE, STAINLESS and a parking spot on the street at the top of a hill. Yours for only $6 million and I will gift you the down deposit. Your rent/mortgage should be only $1500 a month (have banker in tow, preapproved…Trust me) It’s all good, you should be able to sell next year for approx $8 million.

#39 45north on 02.06.13 at 11:19 pm

There has been no US-style housing crash in Vancouver. No wave of mortgage defaults. No mattresses or furniture hauled on lawns by bailiffs. No more abandoned houses. No Armageddon headlines. No tears.

not yet

in the summer of 2006 sales in California were down dramatically and in the rest of the country they were weak. Prices hadn’t really started to drop.

I have the same thought as Nemesis:

Nemesis: For some reason… I think it’s actually going to be worse

In the US, the banks have hung on to inventory. banks have not foreclosed for two reasons: Under the first reason are the following: they don’t want to write off the mortgages, they don’t want to pay property taxes and they don’t want to be responsible for the property. Under the second reason are the laws and regulations put in place to delay foreclosures. Mark Hanson says that the regulations are perverse – they have kept houses off the market when they were needed and they have made the mortgages to be less sound. That is if the original mortgage was not sound then the new modified mortgage was even less so. Because the banks, hung on to inventory, prices dropped more slowly.

In Canada, the banks will foreclose and they will drop the houses back on the market which will precipitate a collapse.

LongLiveTrudeau: In NOTL, Ontario the owners tried to sell their place for over $1 million. The bank foreclosed on it, and now dropped the price $400 grand from original listing.

where’s NOTL Ontario?

#40 robert on 02.06.13 at 11:20 pm

Speaking of the interior was told about a retired couple today that bought a house two years ago for cash. They paid $405,000 plus taxes and closing costs of $6500 and then proceeded to put $15,000 worth of upgrades into the home. Total investment $426,500. Unfortunately he passed away this year and his wife did not want to stay in the house because of upkeep. The house was listed this week for $389,000 and allowing for $10,000 wriggle room less commissions and closing costs the net dollars to the seller would be $363,500. That is a loss of $63,000 in two years, real dollars. If you add another $5600 for two years of property taxes the actual cost to this couple was $2858 for every month they lived in the property. Now here is the kicker the house has an assessed value of $348,000 and is 32 years old but well upgraded. Who says prices are not collapsing?

#41 Mr Buyer on 02.06.13 at 11:20 pm

#8 Richard and Zeus on 02.06.13 at 10:10 pm
THE Plan….is to vulture in condos in 12 to 18 months
…………………………………………………………….
Twenty one straight years of property price decline in Japan and counting. Likely a massive bear trap for the next 3 to 5 years but who knows.

#42 45north on 02.06.13 at 11:21 pm

NOTL Ontario = Niagara on the Lake

never saw the abbreviation before

#43 Dimitri on 02.06.13 at 11:23 pm

I wonder if the people commenting “first” actually read your articles or they come here for the pride of being the first poster.

#44 Canadian Watchdog on 02.06.13 at 11:25 pm

#22 Chickenlittle

First-time buyers are back after 2012 slump in sales

That’s complete BS, but not surprising coming from a real estate pumper in bed with BILD. The reality is quite the opposite as TREB’s data shows that homes priced in the 0-$500k range declined the most since July.

As for that strong start last month, you be the judge who’s buying.

GTA January Sales By Price Range / YoY % / Sales

$0 to $99,999 -22.7% 17
$100,000 to $199,999 -19.3% 230
$200,000 to $299,999 -16.1% 736
$300,000 to $399,999 -8.5% 1069
$400,000 to $499,999 -1.2% 883
$500,000 to $599,999 5.8% 525
$600,000 to $699,999 11.7% 314
$700,000 to $799,999 28.2% 209
$800,000 to $899,999 -7.4% 113
$900,000 to $999,999 22.4% 71
$1,000,000 to $1,249,999 25.3% 99
$1,250,000 to $1,499,999 -21.6% 40
$1,500,000 to $1,749,999 -26.7% 22
$1,750,000 to $1,999,999 50.0% 21
$2,000,000+ -3.7% 26

#45 CalgaryRocks on 02.06.13 at 11:29 pm

#22 Chickenlittle on 02.06.13 at 10:52 pm

Well said. I am so sick of people complaining about first world problems. I lived in Romania for two years working in a hospital, and believe me, if you are complaining about renting, or if people are making fun of you for renting, they need a serious attitude adjustment. We have it really good here. Who cares if you rent? We have clean water, electricity, and unless you live near Spadina, rat-free homes.

Were you in Romania during communist times? Just asking because Romania has one of the fastest Internet speeds in the world.

Also people with brains to use it. I spent lots of time there looking for talent.

As for electricity and clean water, well, maybe you’re referring to our native friends in Attawapiskat

But you be the judge

Some XMAS lights?
http://www.youtube.com/watch?v=x5b8CfTQZsY

Check out the Romanian version of nightlife. Not exactly the Jersey Shore.

http://www.youtube.com/watch?v=6E8uL09IvJc

http://www.youtube.com/watch?v=5wC5fz1VT4k

#46 Dr. Hoof-Hearted on 02.06.13 at 11:34 pm

Photo is clearly “photo-shopped”.

It’s ok to be a soft (or medium hard core) porn site..but really…..does Garth think his readers fell off the back of a pre- sale condo adage truck?

#47 Junius on 02.06.13 at 11:39 pm

” Troubling that so many are kids. Young couples snared by realtors without ethics and banks without morals. How will they recover?”

This is the one that bothers me. I have a few that work for me and a relative who are in their 30s and bought in the past few years. They would not listen to anyone who suggested the market was cooked. Now screwed.

#48 Roy on 02.06.13 at 11:39 pm

I Live in Kits, Vancouver

There are apartments for rent coming out the ying-yang here. And no one filling them.

In a city where renting is roughly half the cost of ownership, I estimate this is because people are now moving out of town in droves, or are simply not coming here anymore. The younger ones have given up here I suspect and are bolting for places where there actually are jobs, where the cost of living is more moderate, or hell just heading for Mom and Dads.

The listings on the street sit and sit. For months and even years. Price drops of 10, 15K attract nothing. Yet there is a massive disconnect here between seller expectation and reality, which is why nothing moves. Inventory is rebuilding big time now.

Those who are holding off to get a better price later- is pretty laughable. There are zero fundamentals that are going to turn this sinking ship around anytime soon.

Victoria- wow… a 14-year supply of millionaire homes. Good grief this could get ugly.

#49 Terry on 02.06.13 at 11:53 pm

What I find most interesting is most of the rest of the world started its buckling around the same the US housing crash happened.

The economy is creeping along but remains fragile enough that a serious hit could crumple it again … Should this happen soon, then I wonder if the CDN housing market might hit freefall.

#50 AK on 02.06.13 at 11:56 pm

#48 Roy on 02.06.13 at 11:39 pm
“The listings on the street sit and sit. For months and even years. Price drops of 10, 15K attract nothing. Yet there is a massive disconnect here between seller expectation and reality, which is why nothing moves. Inventory is rebuilding big time now.”

It doesn’t matter how long it will take, but the fact is that the market will always revert to the mean.

#51 Mnbv on 02.06.13 at 11:58 pm

@20 Mike Stewart

An increase in activity relative to when? So your claim is that a disproportionate amount of today’s 60 some odd sales in the GVRD where in the downtown core? Or, is it that sales are increasing over the entire GVRD?
Do you have actual data to support your statement?

How are prices holding up? What about the downtown rental market, how’s that doing? Could I cover my expenses renting out a condo if I purchased it ( with 25% down) at today prices?

If I phoned you tomorrow, and, told you that I was going to buy a downtown condo today with the average Canadian down payment of approximately 7%, what would your advice be? What about the interest rate risk?

Have you seen the recent sales data in Vancouver? You said ” it is not going to happen this year”, are you declaring that Vancouver real estate prices are not CURRENTLY going down?

Please do keep us posted Mike, but next time bring some data, if you cant, don’t waist our time with nebulous comments such as “increased activity”, save that nonsense for your clients.

#52 Sockeyemoon on 02.07.13 at 12:03 am

The last year of the Metal Snake was 1960. Back then the average house in Ottawa was $16,791. It dropped 4.3% that year to $16,070. Metal Snake’s are bad for real estate maybe…(http://www.agentinottawa.com/1956_-_2011_Prices/page_491704.html)

In 1960 a litre of gas cost about 8 cents. The house was then worth 210K litres of gas. Today’s average house in Ottawa (340K) is worth 270K litres of gas.

Not far off…

#53 Patiently Waiting on 02.07.13 at 12:04 am

White Rock mom
Here are a few more sales in White rock that sold way below original asking prices … seems some are catching on to the new trend …

MLS F1300692
Originally Listed at $$2,699,000
Sold at $2,135,000
$564,000 below original asking price

MLS 1226996
Originally Listed at $1,695,000
Sold at $1,365,000
$300,000 below original asking price

MLS 1226614
Originally Listed at $2,168,000
Sold at $1,880,000
$288,000 below original asking price

pw

#54 Devore on 02.07.13 at 12:06 am

#20 Mike Stewart

“Increased activity”… exactly the kind of thing you’d expect a realtor to say. I’m seeing increased activity too.

#55 TORONTO_GET_REAL on 02.07.13 at 12:06 am

If you think you are going to be able live in leaside, rosedale, and the communities of the like in central Toronto for 20+% discount, then get real. It ain’t happening. That was in 2008 and that ship has sailed.

The greater fool here are people clinging on hopes that there will be long gradual decline of RE prices.

I believe that is Garth’s hedge so that he can continue on for another few years of blogging.

#56 Rob on 02.07.13 at 12:12 am

Agree and dont agree. Yes RE in some regions will be a slow deflation, but I think that RE in the Greater Vancouver area and Fraser Valley will drop a lot more. I remember just a just over a decade ago you could buy a decent house for about $250 – 300K, that are about 600 to 750K now. But my wages have not kept up with inflation and I have a reasonable salary compared to most of my friends. Steep price incline will result in steep a steep price decline.

#57 Old Man on 02.07.13 at 12:13 am

Now this is all getting a bit kinky with a pic, so will stand back, as this is too much for me as a header, as want to see a Drag Queen to get my attention.

#58 Richard and Zeus on 02.07.13 at 12:26 am

#8 Richard and Zeus on 02.06.13 at 10:10 pm
THE Plan….is to vulture in condos in 12 to 18 months
…………………………………………………………….
Twenty one straight years of property price decline in Japan and counting. Likely a massive bear trap for the next 3 to 5 years but who knows.

Yes I agree….but the plan is not to “double our money” in 36 moneys like all these moronic horn dogs…..its to have a steady 7% return on our money. Plus we own a tangible asset…..not paper.

#59 Richard and Zeus on 02.07.13 at 12:28 am

Sorry…….”…in 36 months…” not moneys.

Also…..someone is betting BIG the market is about to drop allot:

http://www.businessinsider.com/art-cashin-on-big-vix-bet-2013-2

#60 not 1st on 02.07.13 at 12:29 am

#8 Richard and Zeus

You are forgetting that dividends don’t kick holes in the dry wall either.

#61 Mithan on 02.07.13 at 12:31 am

Regina sales down ~25% last month.

#62 Patiently Waiting on 02.07.13 at 12:37 am

Here are a few examples of White Rock active listings that have had large price reductions and still remain unsold …

MLS F1223103
Original List Price $3,488,000
Current List Price $2,950,000
Price Reduction to date: $538,000

MLS F1226197
Original List Price $3,288,000
Current List Price $2,499,000
Price Reduction to date: $789,000

MLS F1227373
Original List Price $3,598,000
Current List Price $2,900,000
Price Reduction to date: $698,000

MLS F1302805
Original List Price $2,828,000
Current List Price $2,228,000
Price Reduction to date: $600,000

MLS F1300389
Original List Price $3,188,000
Current List Price $2,388,000
Price Reduction to date: $800,000

MLS F1226740
Original List Price $3,288,000
Current List Price $2,748,888
Price Reduction to date: $539,000

There are too many to list but I think you get the idea …

pw

#63 Dr. Hoof Hearted on 02.07.13 at 1:00 am

Just caught a news byte…

Communist City of Vancouver is going the establish a “rat line” for tenants…to list landlords with so called bad premises…whatever that will achieve.

#64 coastal on 02.07.13 at 1:05 am

“Wrong since 2008 – 5 years and counting.”

But right for the last year, and that’s all that counts. Drip, drip, drip goes Victoria. Rascal sales will be down soon too with Hydro doubling the rates, where else are you going to get $5 Billion ?

#65 Richard and Zeus on 02.07.13 at 1:14 am

#8 Richard and Zeus

You are forgetting that dividends don’t kick holes in the dry wall either

No…..they don’t. But someone please guarantee me that 2008 wont happen, AIG wont happen, Nortel won’t happen, Blackberry (crashing) won’t happen.

Paper can always crash. The only thing that crashes a condo is an earthquake……

#66 cb on 02.07.13 at 1:34 am

how did garth get smokie’s (smoking man) photo?

#67 Sockeyemoon on 02.07.13 at 1:45 am

Sorry abiout the last post, I think I got derailed by Bo X. 1960 was a Metal Rat year and 2013 is heading into the year of the Water Snake. The last of which was way back in 1953 when a house cost 4 times the annual wage, and cost about 1/3 less in terms of litres of gasoline than today.

1953 was also when Stalin died, when Hillary scaled Everest, when Color TV and Playboy mags went on the market and the Stock Market went on a 600 day bull run.

Bodes well for 2013?

Oh, and house prices went up that year too!

#68 Humpty Dumpty on 02.07.13 at 1:47 am

Looks like your in for a treat G…

Nut bar is comin to meet the boys in blue next month…

http://www.huffingtonpost.ca/2013/02/06/ron-paul-conservatives-tories-talk-canada_n_2633775.html

“I don’t understand what wisdom Mr. Paul can bring to the Canadian setting. We’re a very different country with very different issues.”

There’s the “d” word again…

“He’s definitely our biggest attraction and source of controversy,” Ballou said. “He’s one of those guys that people either love him or hate him.

Sound familiar…….

#69 prairie person on 02.07.13 at 1:55 am

Could someone explain the fall in Victoria prices? They don’t appear to have gone up because of HAM. All my neighbours, except for two families, have moved here from the prairies. I’ve had the impression, over 37 years in Victoria that the demand for housing has been from retirees. That overcame the moving of army, the slowdown at Dockyards, a lot of civil servants being housed in Vancouver. Tourism has fallen off and those commercial establishments who depend on day trippers or tour groups have lost business. However, people working in the tourism business as employees usually make poor wages and are unlikely to be buying houses. They support the rental market. Why do people on this site think that the movement of retirees to Victoria is going to slow down, especially as has been pointed out many times on this blog, there are large waves of people retiring coming in the next few years. The reason for people to retire to Victoria hasn’t changed. Check the weather this winter on the prairies. House prices in Alta, Sask and Man have not fallen as much as is claimed here for Victoria. Therefore, Victoria should be more attractive. Sell in the East and buy in Victoria for a better price than last year. Retirees pay cash. They don’t usually need or want mortgages. If Victoria prices are falling drastically, as it appears they are, then it is because of speculators being caught short.

#70 Nostradamus Le Mad Vlad on 02.07.13 at 1:56 am

-
“. . . and invested the rest. $1.1 million.” — Dawn and Rick are smart cookies, as they won’t be dependent on fed. or prov. govt. retirement plans, plus they will leave a nice nest-egg to their children. Good on them.
*
Slowing down Pretty much what Garth has been saying; The Libor Party Sex and sushi for afters, and here but Vote and the next govt. will take more of your money away; Ribena and Lucozade Terrific Brit. drinks, both up for sale; One minute to make a pancake? Nearly half of US families face financial hardship, but big banks and corporations are doing well; Wall St. Bad court decision? Soup Kitchens opening across UK; This (longer version), this (Next 60 Days) Two months, give or take, and possibly this — Bullied Investors has something to do with it or EZone bubble; Watch out, Cyprus The Chinese are coming (having left BPOE); Hedge Funds buying; The Echo Boom; George Soros Network; Germany rebounding, France imploding; Cesspool Worse than Garth’s blog; Entitlements, ObombaCare make up 53% of fed. spending.
*
Babies having Babies This sure is one wacky world we live in, and Teen Angst; Desperate for Food in Greece; Lotteries Printing mistake; 1865 baseball card Yard sale; Duran Duran Simon Le Bon forgot to shave; Large Wave, but doesn’t come close to that 100-footer surfed off the coast of Portugal a few weeks ago, and Giant Wave except this is underwater; Modestly overweight, yes; Obomba and Noddin’ Yahoo One can visualize Yahoo exploding with rage, and pushing all the wrong buttons; Microchipped Puppies / dogs first, sheeple second? Splenda (PDF) Explodes internally. Not sure what Aspartame does; Mali Manuscripts saved by worker; Texas preparing for sovereignty if US defaults, and Virginia distancing itself from the US Fed; World Cup Qualifying Honduras beats US with neat goal; National Enquirer The Men In Black were right! 0:25 clip Comet ISON later this year; Wisconsin Giant skeletons and pyramids found; 9:11 clip Traffic in Naples, Italy. The 401 and Death Valley Parking Lot are smooth compared with this; 21:20 clip Oz MP Ann Bressington speaks on Agenda 21, Club of Rome and Sustainable Development; Real Reason To develop the NAU?

#71 AprilNewwest on 02.07.13 at 1:58 am

#53 These buyers probably think they got a real deal but my guess is the owners knew they were asking an outrageous price and were willing to drop a few hundred thousand to get a sale.

#72 renters rule on 02.07.13 at 2:00 am

@55 t.o. get real

um…..mirror…look in it….?

time to start planning your next career, cause you can stick a fork in this one, it’s done.

#73 Jackson B. on 02.07.13 at 2:03 am

This is for the people of Vancouver who believe the price will never go down.

http://www.ishouldhavesaid.net/2013/02/you-are-in-denial-how-to-answer-snappy-comebacks/

#74 AprilNewwest on 02.07.13 at 2:09 am

#48 Roy – A 10K/15k reduction is nothing on a home over a million, even on a home asking 300 thous. I think some sellers are asking outrageous amounts knowing that some people are dumb enough to fall for it.

#75 Rainclouds on 02.07.13 at 2:14 am

#20 mike

Uhhh yea sure dude, I check realtor.ca weekly and plug in dtown Van to check listings. Been a bit of a pop in the past couple. One bldg on richards st has 15 units for sale.

Dream on

#76 Tony on 02.07.13 at 2:44 am

Re: #55 TORONTO_GET_REAL on 02.07.13 at 12:06 am

The average price drop will probably be somewhere around double that or 40 percent.

#77 Widening Gyre on 02.07.13 at 2:48 am

#30 Dr. WAYNE

Your vacuous comments are the most tedious on this blog, which in itself is quite the achievement. If you must insist on constantly expounding your point of view with regards to “firsts” could you at a minimum vary the insults and cut out the arse kissing

#78 Zamphir on 02.07.13 at 2:49 am

A fan of your blog in the Fraser Valley, but wondering where you got your numbers from. Latest FVREB stats for Jan 2013 says detached sales were 312 compared to 385 last year (-19%). Still bad, but where are you seeing (-63%)?

#79 Tony on 02.07.13 at 2:49 am

Re: #58 Richard and Zeus on 02.07.13 at 12:26 am

Unless you put down around 35 percent or more the odds are you’ll get foreclosed on as it won’t make sense to try to carry a depreciating asset. Also as the price of housing continues to fall so will rents.

#80 Widening Gyre on 02.07.13 at 3:08 am

My apologies Wayne, I spoke too soon. The award for the most utterly pointless poster must surely go to #37 AK. When he grows up he wants to be just like you which is kind of sad.

#81 The harbinger — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate « The Affluent Boomer™ on 02.07.13 at 3:13 am

[…] via The harbinger — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. […]

#82 Widening Gyre on 02.07.13 at 3:19 am

#43 Dimitri

It is not compulsory that you say everything you wonder out loud.

#83 John Dominsas on 02.07.13 at 3:47 am

The 17 year artificial housing price bonanza is over. This looks like the start of at least what has happened in the last real estate decline in 1990’s. I have a friend who lives in Scarborough, Ontario and has a 1300 square foot semi-detached bungalow.

He and his wife bought it for $67,000 in 1976 and it reached $285,000 in 1988 when Hong Kong buyers went crazy trying to buy up all the houses in Toronto and then the prices kept falling. In 1995 it reached $163,000 down 43% in 7 years.This is a 6.14% or $17,507 per year property equity decline. He told me a local real estate agent gave him a free market value evaluation in November-2012, he said it was worth $337,000. He got his assessment from MPAC and it was $327,000 for January-1-2012 . He said he was mortgage free since 1981 so he did not care what housing prices were doing. He and his wife bought the house to live in and raise his family so he never looked at it as an investment to live off or become well off. We both know that his house could drop 43% like in 1990’s so it could be worth $192,000 or less in the future but he does not care. He has planned for his family’s future by investing in RRSP’s , Government bonds,GIC’s, TFSA’s,RESP’s, Zero coupon bonds or Strip bonds and some investment grade Corporate bonds, Bank stocks and pipeline stocks for their dividends.

He said he just retired at 60 years old collecting his early C.P.P. getting $7,000 per year, withdrawing only the interest $10,000 a year from his RRSP and is collecting about $12,000 in annual dividends. He told me that he collects about $8,000 per year in interest from GIC’s, government bonds. He said he has 35% in dividend paying stocks, 50% in all types of bonds that are in his RRSP and 15% in GIC’s,corporate bonds. I know a little about investing and personal finance so I helped him construct his family’s portfolio. The RESP’s about $18,000 are all in laddered GIC’s 1 to 3 years so there is no capital losses. Garth, what do you think of my friend’s portfolio. We made a pact that I give him suggestions but it’s his family’s final decisions that they will make not mine.

#84 John Dominsas on 02.07.13 at 3:55 am

Garth, I forgot to mention two last important points about my friend’s portfolio and finances. He said he has not debt of any kind, house is paid off, a new car 3 years old that is paid off, no credit card debts, no student loans in the family or any other types of debts. His wife has a spousal RRSP that has strip bonds and corporate bonds that she is not withdrawing annually which earns about $3,200 a year and her spousal RRSP is worth about $65,000. Please read this second post to give a more complete answer. Thank you.

#85 D-dawg on 02.07.13 at 4:27 am

Not sure what the relevance of the reduction in an asking price is. Ask whatever you want for your home and change that ask at your discretion. That doesn’t (necessarily) reflect its value or the change in its value.

In the greasy little world of real estate the seller is not obliged to sell their home at the asking price – ‘invitation to treat’ is the construct in contract law which allows sellers to refuse buyers who offer to pay the asking price.

If sellers were obliged to accept the offer of a buyer that met the asking price then reductions to the asking price would have more significance.

I’d say comparing recent sale prices to the sale price(s) of comparables is more meaningful to assess the change in home prices over a specified period of time.

#86 Asse on 02.07.13 at 4:54 am

This article is for those of you that bought an 800k house with 300k down 4 years ago, 2009 but probably more like 2008 during the minimelt. As for the rest, we’ll just carry on basement dwelling, bonging, tin foiling and slagging our own. Get a sign, or Garth will provide one.

#87 Buy? Curious? on 02.07.13 at 5:22 am

I hate pictures of homeless people holding up witty signs to beg for change. It shows that there’s still a bit intelligence in that drunk’s melon but would rather face the humiliation than put in an effort into getting a job. Or he’s smart enough to know that he’ll make more money begging than he would at Starbucks, paying less in tax and to have a few drinks along the way without The Man coming down him. Either way, giving him money is just wrong and not helpful.

What he should do, is start his own company, make up his salary, get a mortgage, then rent out a place to other welfare losers (c’mon, they are losers, bottom of the pecking order) with a guaranteed rental commitment that the gov’t provides, then when you have enough equity, draw it out and buy another house and repeat.

Here’s Sherry Cooper on how she became an Economist.

http://www.youtube.com/watch?v=Y40VEdACktI

#88 betamax on 02.07.13 at 5:49 am

When prices initially fell in the US, the published average monthly/annual prices actually masked the real price drops, because people were getting more house for the same money as before.

The people (i.e. knife catchers) buying on the way down were still spending all they could borrow, but they were able to buy bigger, nicer houses for the same money than in the months immediately previous.

I have no doubt that something similar is happening in Canada. Average prices here may not yet have fallen much, but if people are getting more house for the buck, then the published prices are trailing (not leading) indicators of real price drops.

And, just like there, Realtors will deny a correction is happening all the way down. Of course.

#89 dahhh on 02.07.13 at 6:02 am

sold my place in 2008 like garth advertised, should have waited, but hen again maybe it would not sell now

#90 Mike on 02.07.13 at 7:05 am

#89 You can’t time the peak and trough. You probably did fine.

#91 Westcdn on 02.07.13 at 7:12 am

John Mauldin wrote a missive about Greece that I think is worth the read. He can pack a lot of information with fewer words than most. http://news.goldseek.com/MillenniumWaveAdvisors/1360169642.php
The key message I got was that there has to be a balance between private and public interests. When one dominates the other, problems arise. In my opinion, it is a moving target and we cannot change fast enough to prevent imbalances. It appears to me that Greece’s current plight was due to the public interests which dominated for far too long. Now they have a big hole to climb out, a challenge shared somewhat less by Spain, Italy, Portugal, Ireland, Cyprus and now, the latest basket case, France. Incredibly, I think the EMU (Europe Monetary Union) will hold despite the mistakes made. I just wish I knew if it really mattered.
In regard to Chris Kyle, any nation should be proud to have men like him and mourn the tragedy of his death. IMHO, there have been unrecognized thousands like him and maybe this tragedy is symbolic of sacrifices made by the nameless. (events can over rev my passions)
Ps. Sometimes I feel like the guy in today’s post – there are times when you must stand out or go hungry.

#92 AK on 02.07.13 at 7:58 am

#76 Tony on 02.07.13 at 2:44 am

“The average price drop will probably be somewhere around double that or 40 percent.”

How did you arrive at this figure?

#93 My thoughts on 02.07.13 at 7:59 am

#88 probably the truest truth. People are definitely getting more house for the money. I’ve seen listed prices drop significantly and still no takers. Completely different mind sets in high end home buyers. Waiting to see how much exactly we can get for our money and then working to get those property taxes reassessed.

#94 AK on 02.07.13 at 8:03 am

#59 Richard and Zeus on 02.07.13 at 12:28 am

“Also…..someone is betting BIG the market is about to drop allot:”

Yes, there are quite a few dart throwers out there.

#95 futureexpatriate on 02.07.13 at 8:03 am

To be honest though, the Chinese owner Dude could always kick them out on the street. They’d still be ahead, but the hassle.

Not unless he moves in. Unlikely, and a poor comment. — Garth

#96 AK on 02.07.13 at 8:05 am

#80 Widening Gyre on 02.07.13 at 3:08 am

“My apologies Wayne, I spoke too soon. The award for the most utterly pointless poster must surely go to #37 AK. When he grows up he wants to be just like you which is kind of sad.”

Face the facts, Dude. You are just jealous.

#97 Myopic on 02.07.13 at 8:14 am

Humpty Dumpty,
Ron Paul, and many of the other fringe Tea Partiers have been told/paid to stay away from the Republican Party. For some reason the Republicans think the Tea Party hurt their ballet box numbers. BahahaHahahaahahaaaaa

#98 Myopic on 02.07.13 at 8:32 am

88 betamax
Your comment was confirmed by a real estate friend. Buyers with a budget will spend to the wall, but they will buy in a better neighborhood/nicer house. The areas that get hid hardest are those like Rexdale and Brampton. Top ups get hammered. In 2008 we could have purchased a recently built top up in a nice area for 850k. That house in todays market would be 1.2. The builder was absolutely paranoid about the market at that time and just ran.

#99 Bigrider on 02.07.13 at 8:48 am

#8 and #58 Richard and Zeus ” we are buying tangible assets” referring to condos.

What you are buying is tangible liabilities. You will be getting ‘real’ headaches managing them as well.

As for stock s going to zero and condos not, buy an ETF. It won’t go to zero either.

Dumb RE humping comments like yours, going unchecked on this blog, not a chance.

#100 fancy_pants on 02.07.13 at 8:57 am

#65 Richard and Zeus on 02.07.13 at 1:14 am
Paper can always crash. The only thing that crashes a condo is an earthquake……

For all the folks on the Wet Coast, I hope you were touching wood. And if you’re on the west coast, trust Zeus if he starts acting weird, take to the streets.

#101 Daisy Mae on 02.07.13 at 9:06 am

#9 Mister Obvious: “I can’t tell you how proud I am that my city and my province are setting the trend for the entire country.

Sorry, gotta go… tears welling up, lump in throat.”

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

Yes, aren’t we doing just great in BC?

The provinces’ credit rating has been downgraded by Moodys — our economy is a disaster. And yet “Canada starts here” and “BC is leading the way”…..

#102 Inglorious Investor on 02.07.13 at 9:12 am

#35 Asse on 02.06.13 at 11:14 pm

I can see how you were confused.

I was NOT suggesting Dawn and Rick retire to the US. I was pointing out the potential opportunity for actual retirees or near-retirees to arbitrage the price of their home in Vancouver for a home in the US.

Certainly it’s not as easy at it sounds (nothing is) given the rules and restrictions, but there are options. Also, the arbitrage opportunity is not as good now as it was last year. But IMO it’s still worth considering if one is in that situation.

#103 Anonymous on 02.07.13 at 9:29 am

#87 Buy Curious

“It shows that there’s still a bit intelligence in that drunk’s melon but would rather face the humiliation than put in an effort into getting a job. ”

Give me a break. That picture was taken in Vancouver because I can tell from the bus in the background. It would be next to impossible for an old ruby white guy like that to get a job in Vancouver. Increasingly, employers in Vancouver are requiring that all job applicants must speak Chinese because that is the language that so many of the customers want service in. I doubt that guy can speak Cantonese or Mandarin and he’s probably too old to learn.

#104 Myopic on 02.07.13 at 9:46 am

89 Mike, given accurate information, barring unforseen incidents, and allowing for irrational exuberance you can get a reasonable time frame. Unfortunately, lack of true volume, sales, and differing areas will skew data and results. There’s a library of information on this topic, but mathematical inclination required. Not for the faint of head. Should I Google it for you?

#105 The American on 02.07.13 at 9:48 am

At #6: Nemesis, you are correct. In fact, since the decline began, for example, Vancouver home prices have fallen at a rate faster Han what was actually experienced in Miami. Give it another year, and the rate will progressively pick up steam. Like a reverse hockey stick. Sales, comparatively speaking, have fallen at a rate nearly twice that than what was seen in Miami, and this is only the very beginning. Believe me when I say Vancouver will correct by 40%+ and Toronto by 30%+, EASILY. Give it 4-6 years.

#106 Tony on 02.07.13 at 9:52 am

Nothing touching Toronto baby!

#107 The American on 02.07.13 at 9:52 am

At #16: but he’s not wrong. So, I’m sure he’s sleeping just fine. Sure, he may sugar coat this lump of coal to make it easier to swallow. Question is how will you be sleeping in a few years being the realTURD you are? Under a highway overpass, or do you prefer he entrance of a rail station? Good luck.

#108 Steven Rowlandson on 02.07.13 at 10:08 am

It sounds like some are finding out what death by a thousand cuts is all about. An old form of execution invented by the chinese where they use razor sharp knives and slice off small parts of the body untill they get down to cutting away body parts that are critical for survival and ultimately there is no possibility of survival for the prisoner and from start to finish there is much pain and anxiety on one hand while on the other the prisoner is hoping for a respite and recovery that never comes. In the end the prisoner is dead after a long painfull dismemberment by slicing. That is death by a thousand cuts.
The markets routinely give investors death by a thousand cuts so I don’t see why the real estate market would be any different. It is just surprising it took so long for the grisly process to get started in Canada.

#109 hangfire on 02.07.13 at 10:19 am

Air China has just increased its flights into YVR…..and Canadians still can’t compete because of the union stone age mentality on sucking up higher wages and causing higher taxation to support them…all meaning that the Chinese who have none of those encumberance will always have more cash and outbid Canadians for there own homes.

I was looking at a new Mercedes here on a lot in Dallas at under $30,000…the same car is $60,000 in Canada….can’t you figure out why Canadians are so poor compared to everyone else? Have you seen the wages in the US…EU? Canadians are making far less than even Chinese on a net net basis….of course unless your a civil servant who pays no tax after recieving every dime back in pension and perks.

#110 Penny Henny on 02.07.13 at 10:26 am

But Dawn paid out the $480,000 mortgage on a house she’d bought for less than eight hundred four years earlier and invested the rest. $1.1 million.

But if Dawn had listened to Garth in the first place she would have never bought the place four years ago and thus never turned her original $400k down into $1.1 million.

TIMING IS EVERYTHING.

Penny Henny

Wrong. I have always said owning real estate is just fine, so long as it constitutes a reasonable portion of net worth. — Garth

#111 Dr Blayne on 02.07.13 at 10:27 am

Quoth Dr Blayne
I may not be first
But things could be worst
At least I’m not a loser named Wayne

#112 TORONTO_GET_REAL on 02.07.13 at 10:32 am

#76 Tony

You must be joking right?

Those are prime locations where people have nice paying jobs. Life is good.

Keep on dreaming.

#113 Bob Holmes on 02.07.13 at 10:45 am

Here in Lotusland Central things are trending as Garth predicted. A realtor friend’s monthly newsletter contained the following information:
“Single family home sales in the first month of 2013 in the North Okanagan dropped to 22 sales or 39% less than January 2012. The average sold price of a home in January 2012 was $359,854 while the average sold price of a home in January 2013 was only $317,160. The median sale price for January 2013 was actually below $300,000 at $295,000. There are now 518 single family homes on the market in the North Okanagan. With only 22 sales in the month a sales to listing ratio is only 4%.
Unfortunately, it has not been a good month for strata sales in the North Okanagan. In 2008 there were over 30 sales recorded in January. In 2013 there were only 10 sales or 44% less than 2012!
There are at least 358 strata owners in the North Okanagan who want and or need to sell their home and they can’t. With a sales to listing ratio of 3% I can understand why there are a lot of frustrated sellers out there.”

#114 hangfire on 02.07.13 at 10:50 am

BTW…unless you’re a genius stock picker….you can’t retire on $1,000,000 in Canada unless you’re over 85. C’mon…….after taxes , rent and bills you’re eating cat food …and shivering in the dark…figure it out. In the winter..you’ve got $700 p/m heating bills anywhere west of Victoria…..taxes go up..groceries are going up 20% p/a…..car insurance…..everything else……the only people who afford to retire at 42 are the DB pensioned civic irritants who have a continuum of perks like free medical to wallow in. $1 million……not enough to live on.

#115 Tony on 02.07.13 at 10:56 am

Garth, your risk tolerence is about as low as the self esteme of an adopted red-head on his first day of kindergarden.

Don’t buy, save, blah blah blah

Live a little bro! life is good baby!

I have no dea what that means. — Garth

#116 DM in C on 02.07.13 at 11:00 am

Wow John Dominsas — you have quite the intimate knowledge of your ‘friend’s’ finances.

How about instead of giving out all info on a public forum, get your ‘friend’ to hire Garth instead.

You sound like the type that corners doctors at parties for free advice.

#117 Van guy on 02.07.13 at 11:06 am

Garth,

When is the bad news coming to correct the markets? You predicted past month that Feb could see a buying opportunity.

I regret your inability to read. — Garth

#118 Patiently Waiting on 02.07.13 at 11:07 am

Zamphir on 02.07.13 at 2:49 am
A fan of your blog in the Fraser Valley, but wondering where you got your numbers from. Latest FVREB stats for Jan 2013 says detached sales were 312 compared to 385 last year (-19%). Still bad, but where are you seeing (-63%)?

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

I have access to the FVREB’s boards data base and can verify (Just checked 5 minutes ago) that sales of single family homes from Jan. 1st to Feb 7th 2012 were 745 as compared to 2013’s 284. This is a decline of 461 sales (62%).

pw

#119 The real Kip on 02.07.13 at 11:10 am

Apparently they like us in Chi-town, GTA’s sister city!

CANADA ROCKS!

#120 Buy? Curious? on 02.07.13 at 11:15 am

@103 Anoydumbs, are really serious? The mean ol’ Chinese walked and took your jobs? Sounds like you were all out bid. Typical Canadian approach to competition.

#121 Myopic on 02.07.13 at 11:19 am

Inglorious, aware of the opportunities in the US. Family members have invested in property. I also know of coworkers that jumped in while being ignorant of the effect on their financial interests. While the US house price collapse can be called a correction it would probably be more accurate it label it a realignment.
Those who purchased while ignorant should consider it a learning experience.

#122 alleyrancher on 02.07.13 at 11:26 am

Not really sure there will be a correction like predicted in Calgary. I think some slowing down could be expected – but I think that will be due to interest rates in the future. The income in Calgary is there to support a certain level of house price. Continued inter provincial migration will keep the population growing and jobs will mean income and somewhere needed to live.

My thoughts on prices coming down is there is enough jobs/income in Calgary to support prices once they reach a certain level. Let’s say the average SFH right now is $450k knock it down $50-80k and you’ve got double income families that can afford that without question. As interest rates rise people will stop spending as much, the demographic issue will come into play – but migration should support an increasing population. My only caveat on all this is oil prices. If they’re strong there won’t be much of a drop like this website and all the commentators think. There might be stagnant growth while incomes grow and rates hold back or even cause values to drop.

#123 The American on 02.07.13 at 11:26 am

@#113: tony, I think you should get real. Prime locations with good paying jobs equals jack sh*t as the Canadian real estate collapse ensues. Using your “logic,” highly affluent areas in the U.S. shouldn’t have fallen either. Let’s see… Beverley Hills, Malibu, Bel-Air, Silicon Valley, Jupiter Island, San Francisco, Medina, Bellevue, Highland Park, I could name hundreds of areas where property values got clobbered, all in excess of 30%. Keep dreaming your dream, man, and let us all know how that works out for you in 5 years.

#124 The American on 02.07.13 at 11:27 am

Correction… My last entry was not meant for Tony – it was meant for toronto_get_real at #113.

#125 Forest Hill Renter on 02.07.13 at 11:35 am

#55 TORONTO_GET_REAL — If you think you are going to be able live in leaside, rosedale, and the communities of the like in central Toronto for 20+% discount, then get real. It ain’t happening.

If I may quote ABBA, apropos of yesterday’s post:

But it’s true…
I do, I do, I do, I do, I do!

#126 skeptiacular on 02.07.13 at 11:35 am

This is fear and greed week. Human emotions, of course, move markets. That’s the basis of technical analysis, which is about all you need to know when it comes to investing. -Garth

_____________________________________

you need to go back and read a book on technical analysis, because you really don’t have an idea what’s going on ..

nasdaq head and shoulders top
dow industrials double top
sp500 triple top…

4th quarter US Gdp negative
SP earnings decelerating

markets now have only one way to go.. down

I welcome a buying opportunity. Technical analysis, by the way, goes far beyond charting. — Garth

#127 Snowboid on 02.07.13 at 11:38 am

Now I know why C was so happy to take the position in England…

http://tinyurl.com/CarneysRich

Salary and living allowances – $ 1,300,000 CAD annually
Canadian Government Pension – $ 311,000 CAD annually

That’s sweet, good on you MC!

#128 The real Kip on 02.07.13 at 11:41 am

Sorry, I forgot to paste the link. They love Canada in Chicago!

http://my.chicagotribune.com/#section/-1/article/p2p-74269725/

#129 Van guy on 02.07.13 at 11:42 am

I regret your inability to read. — Garth

It was from your comments. Somebody said the markets sure gained really fast, you replied “correction coming”.

I can read those words fine.

#130 Purple on 02.07.13 at 11:44 am

Global News sucks! They had a very brief story this morning about Housing Prices Up…so misleading. Obviously the writers behind this kind of news are homeowners. A fact is a house in my neighbourhood has re-listed $100,000 less then the fall.

#131 TORONTO_GET_REAL on 02.07.13 at 11:46 am

#124 The American

I think you need to get your facts straight….The drop in prices creates buying opportunities and with the bidding wars it got back to pre-GFC levels quite quickly.

You can keep on dreaming like Tony.

#132 Canadian Watchdog on 02.07.13 at 11:49 am

#33 Mr Buyer on 02.05.13 at 11:18 pm

Where is the Crown Attorney in all this?

Edgar Schmidt courageously blows the whistle

Why Edgar Schmidt is Suing the Department of Justice

It's all looting and curruption from here on. Nothing will change until there's a social revolt.

#133 Dr. Hoof Hearted on 02.07.13 at 11:52 am

How to write like Dr Wayne:

Use an algorithm to space out $5 words and the word a$$hole.

EX: ____________ _____________ ($5 word)________
($5 word) ______ a$$hole___________($5 word)

#134 AK on 02.07.13 at 11:56 am

#124 The American on 02.07.13 at 11:26 am
“Prime locations with good paying jobs equals jack sh*t as the Canadian real estate collapse ensues. Using your “logic,” highly affluent areas in the U.S. shouldn’t have fallen either. Let’s see… Beverley Hills, Malibu, Bel-Air, Silicon Valley, Jupiter Island, San Francisco, Medina, Bellevue, Highland Park, I could name hundreds of areas where property values got clobbered, all in excess of 30%. Keep dreaming your dream, man, and let us all know how that works out for you in 5 years.”

And don’t forget Las Vegas, Bud. I still believe it’s a great place to invest. I have been playing the Las Vegas RE Market by investing in ‘MGM’ and ‘BYD’.

#135 squidly77 on 02.07.13 at 12:00 pm

alleyrancher on 02.07.13 at 11:26 am

Not really sure there will be a correction like predicted in Calgary

You do realize that Alberta is the only Province that has not seen any home price appreciation since May 2007, right.

Is the fact that prices are lower now in Alberta than 6 years ago your reasoning that you feel Alberta prices won’t plunge further.

#136 Edmonton to Halifax on 02.07.13 at 12:01 pm

#123 alleyrancher,
Oil prices will not be high, projects will be shelved and budgets/jobs will be cut. Factor in Alberta’s consumer debt problems and that province can expect just as much pain as any other. It’s amazing how many Albertans are not hearing the warnings that their politicians have been emphasizing quite clearly. Oh well, learn the hard way……again…..

#137 Herb on 02.07.13 at 12:06 pm

#115 hangfire,

your ignorance is showing again. Assuming a DB based on 2% per year of service, how would a public servant be able to retire at the age of 42? And where does a public servant get free healthcare?

But never mind facts; invective is important.

#138 JayDee on 02.07.13 at 12:11 pm

Bubbles are the purest form of Darwinism

#139 Eaglebay - Parksville on 02.07.13 at 12:11 pm

“Yes, aren’t we doing just great in BC?

The provinces’ credit rating has been downgraded by Moodys — our economy is a disaster. And yet “Canada starts here” and “BC is leading the way”…..”
____________________

That’s what happens when a loud minority of tree huggers control the votes.
99% of us never voted for Dick or Clark.
This is called “democracy” in BC which should be the richest province in Canada.

#140 Not 1st on 02.07.13 at 12:15 pm

Richard and zeus,

Once you have had to deal with a bad renter who doesn’t pay on time and wrecks your place then you will think differently about a nice hassle free payment coming right into your bank account every month on time.

I had this problem with a unit I used to have in kelowna. By the time I was able to file documents, have a hearing and finally get approval to have a bailiff drag the guy out force ably, that took 4 months. In the US people can squat in rentals for more than 6 month while you are spending money on paper work.

In addition, the strata board had a bunch of crazies on it that thought this place was the next thing to heaven and kept voting for unneeded improvements that the rest of us had to pay for like a smokers patio and dog park and the costs of renters ang guests wrecking the lobby and elevators The strata fees kept going up even in a new building. Just wait until that sucker needs some real work.

I sold that unit 18 months ago and vowed to never be a landlord again. I would also never own real estate that I don’t fully control and doesn’t have other interests in it. If it doesn’t come with a piece of land don’t buy it.

#141 Dwilly on 02.07.13 at 12:16 pm

Wrong. I have always said owning real estate is just fine, so long as it constitutes a reasonable portion of net worth. — Garth

Garth, what in your opinion constitutes a “reasonable portion”? I own a detatched in the GTA. Bought for 300k 4yrs ago. Right now have ~200k in equity/100k mortgage. Also have ~200k in investment portfolio… so call it 50% of net worth in home equity.

Not that simple. Depeds on age, family situation, income. — Garth

#142 Eaglebay - Parksville on 02.07.13 at 12:22 pm

#115 hangfire on 02.07.13 at 10:50 am
“BTW…unless you’re a genius stock picker….you can’t retire on $1,000,000 in Canada unless you’re over 85. C’mon…….after taxes , rent and bills you’re eating cat food …and shivering in the dark…figure it out. In the winter..you’ve got $700 p/m heating bills anywhere west of Victoria…..taxes go up..groceries are going up 20% p/a…..car insurance…..everything else……the only people who afford to retire at 42 are the DB pensioned civic irritants who have a continuum of perks like free medical to wallow in. $1 million……not enough to live on.”
_________________[

Hope you’re not an accountant.

#143 Doug in London on 02.07.13 at 12:26 pm

@hangfire, post #115 who said: BTW…unless you’re a genius stock picker….you can’t retire on $1,000,000 in Canada unless you’re over 85.

Obviously noboby told Derek Foster, who retired at age 34 (with a wife and kids, too!) with a portfolio of $1 million. Who’s he? Look at http://www.stopworking.ca for details. Do the math, it’s not hard to find investments that pay 5% X $1 million = $50,000 per year before taxes. I could retire comfortably on that amount of money. Is the cost of housing too expensive where you are? If you’re retired you’re not tied to a location for a job and can go where you want, preferably somewhere cheaper to live.

#144 DM in C on 02.07.13 at 12:41 pm

hangfire

“In the winter..you’ve got $700 p/m heating bills anywhere west of Victoria…..”

And this assertion is based on……. oh right. Nothing. You are full of hot air and made up stats.

#145 Richard andvZeus on 02.07.13 at 12:42 pm

Re: #58 Richard and Zeus on 02.07.13 at 12:26 am

Unless you put down around 35 percent or more the odds are you’ll get foreclosed on as it won’t make sense to try to carry a depreciating asset. Also as the price of housing continues to fall so will rents.

1. We are not looking to be slum lords until 2014…..should be lots of depreciation by then.
2. We are paying cash. No mortgage.
3. We are not going to buy them all at one time.
4. Sorry…..just dont trust govts and evil corps with their aper…..

#146 DM in C on 02.07.13 at 12:44 pm

Edmonton to Halifax

Factor in Alberta’s consumer debt problems —

Right, which are the highest in Canada http://www.cbc.ca/news/canada/calgary/story/2013/02/06/calgary-alberta-debt-load-money.html

I want to know what the 18 year old on the rigs is doing to get $15,000/month.

#147 Astronaut down on 02.07.13 at 12:50 pm

137 posts and only 4 comments from G-Turn. Must be busy preping the Hummer for the big storm.

Johnny, what can you make out of this?
This? Why, I can make a hat or a brooch or a pterodactyl…

Over & Out

#148 Dr. Hoof Hearted on 02.07.13 at 12:55 pm

I don’t buy the case of NO collapse.

Prices are supported by what the buyer can afford.

If those buyers are the younger generations, they are so far in debt by the time they graduate they don’t have a pot to pee in. The Offshore wave of HAM is over..

I don’t see any way prices will not begin to wither.

#149 Richard andvZeus on 02.07.13 at 12:57 pm

Richard and zeus,

Once you have had to deal with a bad renter who doesn’t pay on time and wrecks your place then you will think differently about a nice hassle free payment coming right into your bank account every month on time.

My wife is a health professional…..we plan on specializing in “assisted living” which is a niche we will fill… We are not too worried about old people wrecking the place when they will need our help just to feed themselves….

#150 Calgaryboomer on 02.07.13 at 1:11 pm

Garth, this reminds me of all your warnings about GTA and Van for years. Yeah, it came true, prices came down, but not without climbing for a long time and if people follow your advice right away, they miss out on some pretty big gains. Calgary prices are definitely up from last year and I see sold signs everywhere. Maybe that will change eventually, but it’s looking up right now. All the newcomers have to live somewhere.

#151 Ronaldo on 02.07.13 at 1:13 pm

#147 DMC –

”I want to know what the 18 year old on the rigs is doing to get $15,000/month.”

I would guess that it is something that most of us would not be capable of or have the desire to do.

#152 happy renter on 02.07.13 at 1:16 pm

I and many friends regret of not buying real estate in Vancouver in early 2000s.I bought in Victoria and made some money but nothing near Vancouver.Everyone was flipping houses and condos but those days are over.Canada should grant instant citizenship to anyone if they buy property so we can keep real estate train rolling on.Why not let in a 1,000,000 immigrants a year or more to keep Canada growing.

#153 Canadian Watchdog on 02.07.13 at 1:19 pm

Canadian Big Mac price up 14.4% y/y and is overvalued by 23.5%. The Economist Big Mac Index updated.

No inflation here!

#154 Renter's Revenge! on 02.07.13 at 1:25 pm

#144 Doug in London:

I did the math.

In order to accumulate $1,000,000 by the age of 34, getting a return of 5% per year, that guy would have to have saved and invested $40,000 per year starting at the age of 17.

Do you really believe that guy’s story? Or do think he’s writing books and selling hope to fund his “early retirement”?

#155 juno on 02.07.13 at 1:27 pm

Housing Starts in BC fall

Listened to CKNW this morning, housing starts falls by 11.?? % . The CMHC predictions was for an 2.47 Growth. So the So call experts are about 14% off. And its getting worst.

If you’ve been watching the East Van houses sold in the past several months, most were old tear me down for around 750,000. In east Van. Onces sold, they were torn down and new one erected within several month.

Now all these house are sitting, with for sale signs. Many have been on the market for a long time and eventually take off the market to become rental properties or empty waiting for real estate prices to climb.

Eventually the new houses which sold for around 1.45 million for the deluxe one, 1.28 for nice one and 1.078 million for the plain Jane ones. Now the prices for the Plain Jane houses are trying to sell at 980,000 bucks, but still now takers. But the old Van special’s (around 30 to 40 yrs old) are still trying to sell at 950,000 dollars.

The difference between the new ones is they already have two bottom suite ready for rental, Where as the new one just has one crumby suite, bigger but was never made for rental purposes, with two separate entrance.

As the prices of the top end begin to fall, due to desperate builders, just trying to get their money back. This will begin to crush the prices of the older houses. And now that builders realize the game is up for the tear me down, build and make a quick profit. The old houses will no longer sell either.

Like Garth said, its all happening in slow motion, but building up momentum!

#156 Yvonne on 02.07.13 at 1:31 pm

I saved the strategy for “Vultching a property” by Garth but did not save one for the vendor selling in the current market. I remember that it said to get the big deposit but I’m not clear about the closing date. I seem to recall that it was a “far away closing date” which does not make sense to me as it gives the buyer more time to back out of the deal. They will lose the deposit but it may still be worth it for them if the market crashes in the meantime. Also, for the vendor to get the deposit don’t they have to go to court and prove their loss (selling at the lower price), in BC at least? Thanks in advance for your help.

#157 White Rock Mom on 02.07.13 at 1:51 pm

Patiently Waiting
Wow! Maybe there is hope for homeownership after all. It always seems that the homes I like are a few hundred thousand out of reach but maybe not anymore.
My landlady is asking me questions about my future plans. It turns out she doesn’t want to move here anymore and she is thinking of moving to the US. Well if she puts this place up for sale I am going to go postal. The last house we rented was sold. It costs $2000 to move his household and our rent went up 50% for an equivalent home.
I think we need to make some stink bids. Should I say a bid that makes sense to us.

#158 Bottoms_Up on 02.07.13 at 1:57 pm

#14 WhiteKat on 02.06.13 at 10:21 pm
——————————————
Ottawa is interesting. I’m not trying to say ‘it’s different here’, but there are a lot of good paying jobs, and rents are VERY high.

Looking at the price-to-rent ratios in Ottawa shows that actually both are probably way too expensive.

There’s probably an average rent of $1600/mo, and average price of 360,000, for a PR ratio of 18.75.

#159 Richard and Zeus on 02.07.13 at 2:13 pm

#14 WhiteKat on 02.06.13 at 10:21 pm
——————————————
Ottawa is interesting. I’m not trying to say ‘it’s different here’, but there are a lot of good paying jobs, and rents are VERY high.

Of course they are good paying YOUR TAX DOLLARS are paying for them. Your comment should read….allot of good “over paid” jobs in Ottawa…….

Us private sector people actually have to “work” for our money and contribute “ourselves” for our pensions.

#160 not 1st on 02.07.13 at 2:17 pm

#146 Richard andvZeus on 02.07.13 at 12:42 pm

No offense, but I think Garth or any other advisor would tell you to stay in cash then, because you do not have a solid understanding of risk. You are assuming condos are some sort of extreme safety play. From what I have seen about condos, many are poorly built low rise wooden frames or high rises with future glass problems. In fact, even in 12-18 months these things will not have hit bottom and will probably keep going down. On the flip side there are dozens of ETFs that are just getting going and are cheap to buy.

Factor in a falling asset not likely to recover in our lifetime (extreme overbuild) with management issues (i.e renters & strata boards) and ongoing maintenance issues you are buying a liability with diminishing cash flow.

#161 AK on 02.07.13 at 2:24 pm

#155 Renter’s Revenge! on 02.07.13 at 1:25 pm
“#144 Doug in London:

I did the math.

In order to accumulate $1,000,000 by the age of 34, getting a return of 5% per year, that guy would have to have saved and invested $40,000 per year starting at the age of 17.

Do you really believe that guy’s story? Or do think he’s writing books and selling hope to fund his “early retirement”?”

I believe that the guy that retired at age 34, collects rental income from a property somewhere north of Barrie? There is more than just dividend income involved.

#162 Inglorious Investor on 02.07.13 at 2:24 pm

#148 Astronaut down on 02.07.13 at 12:50 pm

Don’t call me Johnny.

#163 not 1st on 02.07.13 at 2:26 pm

Richard & zeus,

If assisted living is your goal, then buy a piece of land for your facility. It will hold its value much better than strata and you have control of what you do with it. After I have owned a condo, the little bit of convenience you gain is nothing compared to the lack of control you sacrifice.

#164 Dr. Hoof Hearted on 02.07.13 at 2:28 pm

The Pension Fund That Ate California

CalPERS’s corruption, insider dealing, and politicized investments have overwhelmed taxpayers with debt.

http://www.city-journal.org/2013/23_1_calpers.html

QUOTE:

The critics were right to worry about CalPERS’s bias. In 1999, the fund’s board concocted an astonishing proposal that would take all the post-1991 state employees and retroactively put them in the older, more expensive pension system. The initiative went still further, lowering the retirement age for all state workers and sweetening the pension formula for police and firefighters even more. Public-safety workers could potentially retire at 50 with 90 percent of their salaries, and other government workers at 55 with 60 percent of their salaries.

QUOTE:
What the board members didn’t mention was that California law protected government pensions, so that taxpayers would be on the hook for any shortfall in pension funding. In essence, the CalPERS position was that government workers should carry zero risk, sharing the bounty when the fund’s investments did well but losing nothing when the investments went south.

Quote:

Even the state senator who sponsored the law, Deborah Ortiz, says that lawmakers received little of substance from the fund’s representatives. “We probed and probed and asked questions 100 times,” she told the San Jose Mercury News in 2003. “The CalPERS staff assured us that even in the worst-case scenario the state’s general fund would take a $300 million hit,” a manageable sum in a $99 billion state budget. (The actual cost to the state budget, it turned out, was more than ten times that estimate—and it’s still climbing.)

etc etc.
================================

Interesting article which shows the twists and turns of the California Public Pensions.

The bottom line is that no matter how corrupt and incompetent it is…the Taxpayers will be the Bank of last resort..in theory.

In reality?, I can sense a backlash as the numbers of Non – Entitled grow and are on the outside looking in.
Can’t get blood out of a stone..unless you throw it.

#165 not 1st on 02.07.13 at 2:30 pm

Garth, hasn’t really talked about DRIP much but the compounding ability is really astonishing. You can find DRIP calculators online or make you own.

Even if you assume very conservative inputs like you stock never goes up and distributions stay the same, put a few hundred K into something and let her rip for 25 years and you would easily have over a million bucks. I don’t think you could see that sort of appreciation in any similar real estate play.

#166 Richard and Zeus on 02.07.13 at 2:32 pm

#146 Richard andvZeus on 02.07.13 at 12:42 pm

“No offense, but I think Garth or any other advisor would tell you to stay in cash then, because you do not have a solid understanding of risk. You are assuming condos are some sort of extreme safety play. From what I have seen about condos, many are poorly built low rise wooden frames or high rises with future glass problems. In fact, even in 12-18 months these things will not have hit bottom and will probably keep going down. On the flip side there are dozens of ETFs that are just getting going and are cheap to buy.

Factor in a falling asset not likely to recover in our lifetime (extreme overbuild) with management issues (i.e renters & strata boards) and ongoing maintenance issues you are buying a liability with diminishing cash flow.”

As I said earlier….we are now going to spend all our money at once (2014) and will gauge the market accordingly. Garth has helped us and many of you become very smart in RE. Also we will not be spending all our money on RE either. And lastly…..we are starting an “old person” business. Plus we plan to “more the risk around”. Its not like “all buildings” are mouldy and falling down…..our condo is awesome in Chilliwack.

#167 TORONTO_GET_REAL on 02.07.13 at 2:41 pm

#149 Dr. Hoof Hearted

It won’t collapse. Deal with it.

#151 Calgaryboomer

I couldn’t agree more. People missed the boat time. So what if prices come down for the next few years. It will be minor compare to the price gains since 2008.

#168 Richard andvZeus on 02.07.13 at 3:00 pm

Richard & zeus,

“If assisted living is your goal, then buy a piece of land for your facility. It will hold its value much better than strata and you have control of what you do with it. After I have owned a condo, the little bit of convenience you gain is nothing compared to the lack of control you sacrifice.”

We thought about that. But we feel that using technology with employees and spreading the risk around (condos in different locales) is a better way to manage risk. Technology let’s you manage most everything…..from your smartphone these days.

#169 Adam on 02.07.13 at 3:01 pm

#169 Toronto_Get_Real

What if you didn’t have the cash to buy in 2008 but you did in 2010? Do you think it was a good time to buy then? Do you think it’s a good time to buy now?

Not everybody has been waiting since 2008.

#170 not 1st on 02.07.13 at 3:09 pm

I go to say that I have got hooked on those ETF funds. When the market is going bonkers with some stupid news and the DOW crumbles 200 pts, these things move a dime maybe. Very stable and solid companies in the make up and a much broader class of assets can be accessed with these than just stocks such as bonds, corporate bonds, T bills, commodities even speculative bets on oil, the dollar, etc. And best yet reasonably liquid, not as much as common shares but gaining.

And my experience with older people is they may not be as destructive as younger people, but they have a lot of time on their hands to complain.

#171 Rob aka Captian and Mrs slow on 02.07.13 at 3:16 pm

169 comments holy crap who has time to read all of that

Wow

Anyways CPP FYI

http://www.thestar.com/business/personal_finance/2013/02/07/cpp_5_things_you_need_to_know.html

#172 Canadian Watchdog on 02.07.13 at 3:27 pm

CanEquity Monthly Volume Statistics for Mortgage Originations Link

#173 rosie "moving forward" on 02.07.13 at 4:16 pm

This lady needs to move forward in her sales approach. Maybe into the late 20th century, post Germaine Greer. However, if she is a realtwhore, then it’s appropriate. http://www.huffingtonpost.ca/2013/02/07/diana-arvatescu-suggestive-real-estate-billboard_n_2637835.html then it seems appropriate.

#174 Leo on 02.07.13 at 4:19 pm

anyone else has issues with the latest TREB report ?
Their percentage are wrong…. i.e. take the number of sales in area code 416 (detached house = 502), compare it with last year number (559) and then wonder how they came with a 7.6% decline when your calculation shows a 9.5% decline….
It looks it is the same for all other categories. The aggregate decline for 416 is actually 8.1% instead of the presented 6.3%.
Did someone just do an ‘honest mistake’ or is it more questionnable than that ?

#175 Old Man on 02.07.13 at 4:21 pm

I get a feel for the economy from observation and there is a big snow storm coming, so am out spending money for supplies. I went to three places to stock up, as have been caught before, whereby, can’t get the car out. There were no customers anywhere, as nobody is spending money, or are they all tapped out? The same thing happened yesterday at Jiffy Lube, as was always busy, and was the only customer with a staff of five doing nothing.

#176 Renter's Revenge! on 02.07.13 at 4:21 pm

#163 AK:

Thank you. I think I understand now.

That said, does anyone know which asset class the next price bubble is going to be in? I want to get rich quick too!

#177 Leo on 02.07.13 at 4:22 pm

Sorry, please read 10.2% instead of 9.5%.
The gap is even bigger that I initially wrote !

#178 DonDWest on 02.07.13 at 4:43 pm

“What he should do, is start his own company, make up his salary, get a mortgage, then rent out a place to other welfare losers (c’mon, they are losers, bottom of the pecking order) with a guaranteed rental commitment that the gov’t provides, then when you have enough equity, draw it out and buy another house and repeat.”

LMAO.

That will be my business model soon enough the way Halifax is turning out. Buy out a pile of crap duplexes for cheap and then rent them out to baby boomers on welfare (former house flippers and real estate agents).

Being a slumlord for the expanding welfare class is the only way to go in a world of economic decline and no manufacturing so to speak.

#179 Dr. Hoof Hearted on 02.07.13 at 4:50 pm

#169 TORONTO_GET_REAL on 02.07.13 at 2:41 pm

#149 Dr. Hoof Hearted

It won’t collapse. Deal with it.

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

If one studies history, one sees patterns.

In those patterns….there are variations of carpetbagging . I submit China is doing that now .

For prices to be maintained….aka not collapse….the bubbles has to be kept inflated with a large supply of duct tape.

Given that the original dollar has lost 97% of its purchasing power…we are under the delusion we are “wealthy”via big numbers……..this will end up like the Weimar republic

#180 espressobob on 02.07.13 at 4:50 pm

#167 not 1st

Spent some time this morning with the online broker calculator working out scenerios with a TFSA.

Start with $25,500 & assume an annual return of 9% (aggressive ETF’s). Make contribution each January in full, allow for a 2% yearly increase in contribution room.

At the end of 25 years the figure that came up was,$817,888. Keep in mind there are a number of assumptons! But that total is mind blowing!

That will buy a s**tload of alpo in those golden years!

#181 hangfire on 02.07.13 at 5:09 pm

#144..D in L….how does anyone retire on $50,000 p/a before taxes….federal…city…municipal…provincial…crown corp…..levies…fee’s…price increases on services and local taxes on property and retail,,,parking…bus passes, inflation on food etc etc etc ?

Certainly not enough if you’re renting……$2000 a month is not enough for a couple or a couple owning a home…or with kids…….you can’t drive a car on $2000 p/m….you can’t vacation….go to a movie….pay for high speed broadband and cable…You can’t even live well on $2000 a month in Thailand anymore…….$2000 is catfood living in Vancouver.

#182 Chickenlittle on 02.07.13 at 5:20 pm

#22 Chickenlittle

First-time buyers are back after 2012 slump in sales

That’s complete BS

You bet it is! My BS 3000 blew a fuse when I read that.

#45CalgaryRocks

I lived there 13 years ago. the internet at the time went at a snails pace. It would take 20 minutes to load a page. It felt like i was using my friends Commodor 64 again! Ahh those were the days…
They are smart! That’s why so many hackers come from Romania.
At leats here we don’t have to bribe doctors to take a look at us when we are sick…there it’s common to bribe everyone, police included. It hasn’t changed!

Interesting place though. Don’t go without someone familiar with the language because they’ll rob you blind. North Americans are too trusting. I myself was mobbed by about 10 street kids when my husband had taken 20 steps away from me. He ran back, and boy did they get it!

BTW: Where’s Beach Girl? Don’t you think its false advertising when she calls herself “girl”? It’s the old bait and switch, the Plenty of Fish switcheroo where they post a picture ten years old and 30 pounds lighter…
Not that I would know…

#183 Chickenlittle on 02.07.13 at 5:23 pm

Dr. Hoof Hearted on 02.07.13 at 11:52 am
How to write like Dr Wayne:

Use an algorithm to space out $5 words and the word a$$hole.

EX: ____________ _____________ ($5 word)________
($5 word) ______ a$$hole___________($5 word)

HAHAHAA!! You are hilarious!!

#184 Calgaryboomer on 02.07.13 at 5:31 pm

errr, nevermind , Yer a good man!

#185 Advice_bot on 02.07.13 at 5:38 pm

#8 Richard and Zeus on 02.06.13 at 10:10 pm

We will be paying cash so there will be no interest payments. Only property tax. Rents will reflect strata fees.

Dumb. Mortgage the property to 80% and use the interest to offset the rental revenue. Use the cash for whatever the hell you want… buy more condos!

#186 sciencemonkey on 02.07.13 at 5:47 pm

I am a horny, musty basement dweller (not actually). I just had a quick look comparing MLS listings in Markham and London (ON). London starter homes are 2-3x cheaper and thus affordable. Can anyone familiar with London real estate comment?

Related to this, why does anyone choose to stay in a major city? Is it the culture (going to see the ballet every weekend)? Is it because you were born there and are scared of a big change? Or don’t want to move away from family?

My industry (polymers) seems to pay equally no matter where the job is; I would gladly move but jobs take time to appear. We all need to follow the jobs; businesses will be founded in an area convenient to the founder, but perhaps not so convenient to the employees. Outside of that, it boggles my mind that people with professions needed everywhere (nurse, electrician, accountant, etc) stay in big cities where they would need (but don’t receive) double their salary to enjoy the same standard of living found in a medium sized city. Does pay in some industries accurately reflect local costs?

#187 The American on 02.07.13 at 5:50 pm

@ 132: toronto, get real. Uh huh. Keep pumping away. You know it is completely over. A slight price decline creating “buying opportunities,” you say? Riiiiiiiiiiiiiiiiight. Just like it did in all those other areas I already mentioned. You have zero logic and zero concept of a market downturn. Happens everywhere on the planet, including Canada. Only, Canada will be hit far worse than the U.S. You’re a moron, realTURD. Watch and wait. LMFAO.

#188 Grim Reaper/Crypt Speculator on 02.07.13 at 6:02 pm

That was sure nice that John Cleese posed for that picture.

#189 Old Man on 02.07.13 at 6:04 pm

I have come to the conclusion that most people are living one pay cheque at a time which I assume is issued on a Friday. The government cheques come out at the end of the month which spikes economic activity, and I use direct deposit, and stay away from the herds, but have never seen this before. I shopped for goods and services at no less than 8 places yesterday and today which is February 7th to prepare for the big snow storm. In all cases there were no customers – why? I say they are all tapped out waiting for the next pay cheque, so this could be a sign that too many people are under extreme financial distress.

#190 not 1st on 02.07.13 at 6:07 pm

This cash sitting in corporate coffers often gets me to thinking. A lot of this cash didn’t come from increased sales or economic activity. Lots was gained through efficiency, layoffs, restructuring and even some bailout funds have gotten through. For instance GE, CAT and Harley Davidson all got bailout money.

To date they have all been sitting on it but I think there will be a time when the govt will tell them in not so many words, either spend it into the general economy by expansion or by dividend payouts or we are going to tax it.

#191 polecat on 02.07.13 at 6:14 pm

Halifax isn’t much better than VAN or TOR or any of them. Worse is the taxes on overpriced homes. We don’t have that many good jobs here. Ships deal isn’t going to cure all. Lots of speculating here too. Even decent priced homes are sitting and quite a few empty huge houses. Who can afford to heat and put the lights on, let alone taxes on these monsters. Sure, you can afford the mortgage but seems people don’t include all the other costs. Have seen quite a few of these new homes for sale after a year filled with walmart furniture and come to find out from sources that people can’t afford the taxes. Yet, they keep building, not a good idea for a growing retirement village. Starting to remind me of Victoria, only difference is I can afford a hovel here but get to pay 4 times the utilities and more in taxes. Pretty scared for the country as a whole. Would be nice to see a real leader for the next election and stop voting for the best of the worst. I know, not a ploitical blog but we need someone with b@!!s.

#192 Andrew on 02.07.13 at 6:18 pm

I’ll just leave this here:
http://news.nationalpost.com/2013/02/07/let-me-take-you-home-its-gorgeous-inside-calgary-real-estate-agents-sexy-advertisement-stirs-controversy/

#193 Old Man on 02.07.13 at 6:22 pm

Perhaps the answer lies with a mind that was ahead of his day. ” The answer, my friend, is blowin in the wind, the answer is blowin in the wind.

– Bob Dylan

#194 jess on 02.07.13 at 6:31 pm

Dexia lawsuit

JP, B StearnsWa Mu :matryoshka dolls
object-within-similar-object

lookback

Zippy, Chase’s in-house automated loan underwriting system.

The memo’s title: “Zippy Cheats & Tricks.”
By Barry Ritholtz – March 28th, 2008, 6:44A

How to Get an “Iffy” loan approved at JPM Chase
http://www.ritholtz.com/blog/2008/03/how-to-get-an-iffy-loan-approved-at-jpm-chase/

#195 David on 02.07.13 at 6:33 pm

#192 not 1st

That time was last August:

http://business.financialpost.com/2012/08/22/dont-blame-the-loonie-for-weak-exports-carney-tells-caw/

#196 Devore on 02.07.13 at 6:37 pm

#143 Eaglebay – Parksville

Hope you’re not an accountant.

Hope he’s not a geography teacher either.

#197 TORONTO_GET_REAL on 02.07.13 at 6:37 pm

#189 The American

I guess you didn’t get the memo eh? RE on the way up in the US.

#198 Harvard Grad on 02.07.13 at 6:37 pm

Just wondering if other’s are noticing the same thing as me- went to a major shopping mall which is about 45 minutes north of toronto. We were there just as they opened at 9:30am Saturday morning – dropped by a Eddie Bauer store, the staff seemed overly eager in having me buy something (commission thing) – but as we left at 11am – I was shocked to see very little action in the mall – I would guess nearly 40% of stores had big banners claiming up to 70% off –

What gives, after Christmas hangover, or is the economy really in the tank but no one is talking about it – are others seeing the same thing ??

#199 TORONTO_GET_REAL on 02.07.13 at 6:46 pm

#181 Dr. Hoof Hearted

Sure, like any cycle its cyclical. If you are a dreamer like most people on this blog to expect a major correction in the hot spots of Toronto, then keep on dreaming.

Have you heard of something called flatline? Not everything goes south. Maybe in burbs….

#200 Ken R on 02.07.13 at 6:52 pm

#177 Old Man on 02.07.13 at 4:21 pm

You are correct in your observations; people are tapped out. Declined credit card after declined credit card at the mall lineups. Or how about the convenience store; waiting in line for 10 minutes while all the lotto players take up the clerks time when all you need is a bag of milk. The explosion of poverty is upon us.

#201 Dr. Hoof Hearted on 02.07.13 at 7:25 pm

#201 TORONTO_GET_REAL on 02.07.13 at 6:46 pm

#181 Dr. Hoof Hearted

Sure, like any cycle its cyclical. If you are a dreamer like most people on this blog to expect a major correction in the hot spots of Toronto, then keep on dreaming.

Have you heard of something called flatline? Not everything goes south. Maybe in burbs….

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

That’s fine….carry on…

http://www.youtube.com/watch?v=4z88U915uq8

There are those in precarious positions that “cocoon/turtle” by putting on a seat belt …..and slamming on the brakes…without seeing outside their comfort zone that they are SOL…

#202 popados on 02.07.13 at 7:29 pm

thats what the wife calls me when sshes angry/DASASTER ON MUTE,pstt she is a snake.

#203 JustTryingToProtectEquity on 02.07.13 at 8:05 pm

#201 Toronto Get Real

While you are probably right, many of what you’re calling the “hot spots” in Toronto may not correct like areas in the suburbs. I do know this, the last time Toronto had a major correction (which lasted from 1989 to 2002), my wife and I bought a home (in 1996) in the High Park area for $325K. It had been listed for $580K eighteen months before we bought it. And we know many, many neighbours who fared even better than us in the Bloor West Village area. My math’s not great, is a reduction from $580K to 325K in eighteen months considered a major correction?

#204 Nostradamus Le Mad Vlad on 02.07.13 at 8:07 pm

-
#181 Dr. Hoof Hearted — “If one studies history, one sees patterns. ….there are variations of carpetbagging. I submit China is doing that now. For prices to be maintained….aka not collapse….the bubbles has to be kept inflated with a large supply of duct tape.”

Duct tape, of course is a condiment which not only accompanies Red Green’s Pickle and Anchovy Salsa, but has many other uses. Keeping economies alive, via false bubbles (aka toothless falsies) is not one of them.

One of these days, some bright spark, somewhere in the world will realize that, then pop a succession of bubbles with loud bangs. That’s when the real fun begins!

#177 Old Man, #200 Harvard Grad and #202 Ken R — “The explosion of poverty is upon us.” — Indeed. See following links (fighting in Greece over food was last night).
*
Nutz Everything’s going loopy; US Navy “This is sheer grandstanding to scare America into supporting current levels of military spending. The costs of operating that carrier are the same whether it is in the Persian Gulf or at home. The crew are still paid, the ship is still maintained, flight crews are still flying to keep up their proficiency.” wrh.com; US Navy “This is sheer grandstanding to scare America into supporting current levels of military spending. The costs of operating that carrier are the same whether it is in the Persian Gulf or at home. The crew are still paid, the ship is still maintained, flight crews are still flying to keep up their proficiency.” wrh.com; Iran rejects US offer; EZone Toast or crumbs? Three clips Engineered collapse, martial law etc.; IMF Nerds Af’stan needs a VAT (like we need a dozen extra-large hemmorhoids stuffed up our nostrils);
*
2:51 clip A link yesterday said all puppies and dogs were going to be chipped, and now that has been extended to US drivers’ licences; Japan – Russia Something to do with China? Warped Priorities “But while Dreamliners smolder on the tarmac, the US Government has billions to spend on invading Mali’s gold mines!” wrh.com; Lardbutts of the world unite Butter good, margarine bad; War Other than civil war [see here, war is very profitable on other countries, and 1:33 clip Gun Control and pretext for China’s takeover, and Alaska Lotsa guns, no trouble; 3:31 clip Dan Rather was a little late in reporting this; CC and Obama’s plan, and An Inconvenient Truth Al Gore is, in fact, a piece of salted frozen blubber; 27:52 clip NKorea not a threat. Glad that’s sorted out; Star Wars Laser unveiled by Germany; Geithner Gone back to the CFR; 45:06 doc. Another consp, theory (Pearl Harbor) uncovered, just as 9-11 was found out; Gun Mfgrs. moving south?

#205 DonDWest on 02.07.13 at 8:24 pm

#193 polecat

“Would be nice to see a real leader for the next election and stop voting for the best of the worst. I know, not a ploitical blog but we need someone with b@!!s.”

As accurately predicted in early May 2011 – that’s a little hard considering they rig the national elections.

Idiot comment of the day. Congratulations. — Garth

#206 ballingsford on 02.07.13 at 8:27 pm

Dr. Wayne,

I used to get annoyed at you for slamming the Blog Dogs that post ‘first’, but now I can’t wait until I get to your entry and see what you wrote this time.

You’re actually quite funny! Not sure if you are intending to be funny, but it gives me a chuckle!

I must be losing my mind!

#207 Warren Buffet on 02.07.13 at 8:29 pm

Garth you are a gem, and have been right to short Vancouver real estate all this time. Can’t understand why anyone would want to spend 90% or more of their median pre-tax household income on shelter / shoe box / dog-kennels in the sky, or post world war I dumps with knob and tube wiring. Fixer uppers as most starving real estate agents call them. Vancouver is poised for a major collapse in housing prices. It’s really just that simple. The hubris is dead. Long gone are the horny chinese trillionaires lining up on helicopter tours of waterfront acreage properties, etc. Vancouver Real Estate is where you send your money to die. It’s really that simple. Cannot believe what prices are still to this day in for ordinary, and I mean ordinary / average bull doze jobs. Complete gut jobs going for 1 million dollars. That is simply not sustainable. Vancouver is not Tokyo, or New York. The incomes simply are not there for people to readily live like that, and that is why Vancouver is poised for a major collapse in housing prices over the next few years. More to come for sure. This is not over.

#208 Richard and Zeus on 02.07.13 at 8:32 pm

#8 Richard and Zeus on 02.06.13 at 10:10 pm

“We will be paying cash so there will be no interest payments. Only property tax. Rents will reflect strata fees.

Dumb. Mortgage the property to 80% and use the interest to offset the rental revenue. Use the cash for whatever the hell you want… buy more condos!”

Perhaps its dumb…..but for us some of it is principal. We hate govt and pencil pushing tax sucking civil servants…….as much or more…..as banks….who print money out of thin air and charge INTEREST on it. If you and I did it we would go to jail. Banks do it legally. We do not wish to be part of that scam so we will be paying cash for our assisted living with condos business thank you very much…..and we will sleep good at night too.

Banks do not create money. Are you home-schooled? — Garth

#209 Richard and Zeus on 02.07.13 at 8:38 pm

“As accurately predicted in early May 2011 – that’s a little hard considering they rig the national elections.

Idiot comment of the day. Congratulations. — Garth”

I would not say that’s entirely inaccurate Garth. The three stooges in the last election to vote for are Harper, Layton and the “come back to Canada dude” for the Liberals….I can’t even remember his name. So you could say…..that having “no one good” to vote for is kind of rigging an election. You can’t tell me the guys in charge did not know this. Of course they did. They are not stupid. Just like how we have democracy in this country. HAHAHAHAHAHAHAAHAHAHAHAHAHA. the PM does WHAT HE WANTS just like the Honey Badger. We are nothing more than a fascist dictatorship……..what a shame.

#210 Richard and Zeus on 02.07.13 at 8:48 pm

“Banks do not create money. Are you home-schooled? — Garth”

Unlike the zombies coming out of high school today….if I had been home schooled I would be a helluvalot smarter thank you……

I guess Wiki is full of it…..along with millions of other search results:

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

I give up. — Garth

#211 Steven Rowlandson on 02.07.13 at 8:57 pm

With all due respect to the real estate collapse deniers you are in error. Sorry guys and gals but your trip to easy street depends on minimum wage being at least fifty to sixty bucks an hour and may be more. It ain’t going to happen. Workers and tradesmen especially young ones who want to buy their first home might get ten to twenty an hour and over a year and after taxes and living expenses there is not alot to save for a down payment and they certainly could not afford a mortgage regardless of the interest rate.
The labor market is not going to allow them to cater to your greed and that is all there is to it.
The real estate cultists and the birth rate is being hung out to twist in the wind or if you like suffer death by a thousand cuts. The game is for all intents and purposes over.

#212 polecat on 02.07.13 at 8:58 pm

#207, don’t think, but we must still vote even if 60% of us spoiled our ballots. Practice democracy or lose it.

#213 The American on 02.07.13 at 9:05 pm

@199: toronto, get real: Damn skippy! The U.S. is definitely on the upswing… It should be! After all, RE in the U.S. is grossly undervalued. However, Canadian RE is now the most overpriced RE. Do you even read publications such as The Economist, reports from the IMF, Case Hiller, etc.? Canada isn’t the U.S. Canada is Canada, with 1/10th the population, less than 1/13th the GDP, a currency ow declining (not that the USD isn’t, however, that is by design). Canada’s economy is commodity-driven. The U.S. is consumption-driven. See the difference? The globe over is going nowhere fast, which will fare horribly for Canada as no real resources will be needed for quite a very long while. The U.S. is increasingly more energy independent, and our oil sands can go to hell (and they are). It isn’t going to be pretty. But go on, keep on being “different.” Like I said, let us all know how that works out for you in 5 years.

#214 Herb on 02.07.13 at 9:07 pm

Zeus (of Richard and Zeus),

you seem to be the smart one of this odd couple, so have a word with Master Richard. Whisper to him that “assisted living” is people-intensive and cannot be done relying on technology. He needs people (himself plus … plus) to assist other people in living, especially since the people he expects to be paid for to assist will live in different units, dispersing his efforts.

Also suggest to him that he will be at the mercy of precisely the public servants he detests for licenses, inspections, funding etc. And considering his demonstrated knowledge of banking and finance, a word to the wise from one dog to another: attach yourself to another master.

#215 Country Girl on 02.07.13 at 9:11 pm

#65 Richard and Zeus on 02.07.13 at 1:14 am
“…the only thing that crashes a condo is an earthquake…”

An earthquake might physically crash a condo but a drop in value can financially crash a condo. This happened in Toronto and other parts of Ontario in 1989 when the condo market crashed and took years to recover. Condos may face the same shortly.

#216 TurnerNation on 02.07.13 at 9:16 pm

More new Kandos at Young/Egg in T-dot:

http://www.blogto.com/city/2013/02/new_in_toronto_real_estate_minto_30_roe_condos/

#217 Innumeracy chick...No more(AKA AMAZON) on 02.07.13 at 9:24 pm

Buy Curious:

I posed a link for you on the last blog ;) Your comments make me LMAO!

#218 TORONTO_GET_REAL on 02.07.13 at 9:25 pm

#205 JustTryingToProtectEquity

It doesn’t matter if you are staying there for 5-10yrs or more.

A flip? That’s a different story.

#219 Don on 02.07.13 at 9:39 pm

#140 Eaglebay – Parksville on 02.07.13 at 12:11 pm

“Yes, aren’t we doing just great in BC?

The provinces’ credit rating has been downgraded by Moodys — our economy is a disaster. And yet “Canada starts here” and “BC is leading the way”…..”
____________________

That’s what happens when a loud minority of tree huggers control the votes.
99% of us never voted for Dick or Clark.
This is called “democracy” in BC which should be the richest province in Canada.
******************************

You couldn’t be more wrong! We have delusional corrupt, and a vastly incompetent governing party in BC at the moment. The tree huggers are the only thing standing in front of them and allowing private companies to rape the forests.

Oh and according to reliable sources Parksville is also in trouble, traditionally house went for approx 189K at the higher end. That subdivision near the mall is floundering, the crews have been let go.

Nothing like basing a growth on a generation who are passing on. Check out Qualicum River estates, and all those boomers who built their dream homes on cougar hill 20 minutes from the Town of QB, no amenities and stuck for days when it snows or the power goes out. Lots of houses for sale there, and no youth who can afford to pay the asking prices.

This ruling generation has brought about greed and corruption on the same scale as the ruling party in China, but Canada is suppose to be a democracy. I just wish the good ethical boomers would stand up and say enough is enough.

#220 Don on 02.07.13 at 9:41 pm

My previous post was not to bash all boomers, just the bad element. This blog is an example of one of the good ones.

#221 Richard and Zeus on 02.07.13 at 9:52 pm

“216 Herb on 02.07.13 at 9:07 pm
Zeus (of Richard and Zeus),

you seem to be the smart one of this odd couple, so have a word with Master Richard.”

Hey Pot…I mean Herb……which govt agency are you being overpaid to work for? My wife works with elderly now smart a$$……I have been in the Db/apps/internet business for 15 years…we know what we are doing and talking about.

#222 Country Girl on 02.07.13 at 10:07 pm

Richard and Zeus on 02.07.13

Does providing “Assisted Living” for the elderly include changing their Depends? What kind of technology will you be using to care for the elderly, webcams?

Hope you and your wife get your enjoyment from helping others because this endeavor will be a lot of red-tape, unpleasant work for low/no profit. And, make sure your Condo building/board permits this.

#223 JustTryingToProtectEquity on 02.07.13 at 10:09 pm

#220 Toronto Get Real

A reduction in price from $580k to $325K matters. A lot. It allowed my wife and I to comfortably bring up three children in your so called “hot spot”, it allowed us to top up our RRSPs, TFSAs, RESPs. Hovering around 50 years of age, we never have to work again. Your notion that everything is okay in Toronto is totally off base. Never before in Canadian history have interest rates been so low, never before in Canadian history have personal debt levels been so high. The vast majority of people who have bought in the last 2-3 years have no retirement savings, huge debt loads, no quality of life. Their purchases are made on credit. 1989 was a standard correction, a slow melt. But, if you bought at the peak, it took you 13 years for your house to regain its peak value. Mortgage payment after mortgage payment. Think of all the young couples who put 0 down and have 40 year amortizations or 5 down and 35 year amortizations. With all their income going toward paying off these homes. What happens when the roof needs to be repaired? When the drain beneath the basement floor is cracked by a tree root? When their car breaks down? When the husband or wife comes down with an illness? Or gets a decrease in pay or loses their job? 5-10 years? Not this time, I’m afraid.

#224 HAWK on 02.07.13 at 10:20 pm

#215 The American on 02.07.13 at 9:05 pm

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

The US is definitely on the upswing. There’s never been a greater number of Americans on food stamps, nor ever a greater national debt.

It’s all “upwards” from here on, in the era of the great orator.

#225 Richard andvZeus on 02.08.13 at 12:17 am

“Richard and Zeus on 02.07.13

Does providing “Assisted Living” for the elderly include changing their Depends? What kind of technology will you be using to care for the elderly, webcams?

Hope you and your wife get your enjoyment from helping others because this endeavor will be a lot of red-tape, unpleasant work for low/no profit. And, make sure your Condo building/board permits this.”

Are you people on crack? What part of ASISSTED living don’t you understand? Read a book morons…..

#226 TORONTO_GET_REAL on 02.08.13 at 12:18 am

#215 The American

You totally missed my point didn’t you? All I’ve ever said is hot spots will weather the storm. For example, since you ain’t that bright, if national house prices falls by 20% for instance, it doesn’t mean a detach home in Leaside will fall the same amount.

And yes I follow all those “stuff” that you described. Here is a Robert Shiller trivia for you. Do you know how many homes he owns? 2

#227 Beach Girl on 02.08.13 at 2:10 am

#184 Chickenlittle

You think my moniker is false advertising. I am sure yours isn’t. What is in a name? Plenty.

You can address me as Queen of the Beach.

My 1st and only legal husband, when we still liked each other called me the Queen. Now it is the Queen of Mean. I like that better.

When I was 25, he bought me a new Cadillac Fleetwood, it was white with grey leather interior.

Well, to top it off he attempted to buy personal license plates named QUEEN. He was refused. And told me he had tried.

I said mildly, sometimes you don’t look at the whole picture. You occasionally drive the car. OMG, I still cannot understand how he made a lot of money.

You will probably be pleased to know I will be gone for awhile, and will come back, better than ever. My Valentines present to myself.

#228 Gunboat denier on 02.08.13 at 2:25 am

221 Don – what does ethics have to do with building your house in the boonies? Am I supposed to build a house
where you want it, or where I want it? VI has tons of
rural acreages like that. Most residents are prepared for
the outages and what little snow we get.

#229 AK47 on 02.08.13 at 2:27 am

#5 Johny D
Garth is not an economist.

How do you know? — Garth

#230 Doug in London on 02.08.13 at 12:40 pm

@Renters Revenge #155, and AK #163:
I agree, it’s hard to believe he accumulated $1 million by age 34. In fact I don’t know if he had that much money at that age. I am 52 years old and still don’t have that much saved. However, I blame that on some bad investments made in the past, including investing in mutual funds with outrageously high management fees. I borrowed some of his books from the library, and starting in 2011 have followed his advice buying into companies (during dips in the markets) that pay good dividends like utilities and REITs. I also have some of my money in a managed portfolio, an idea I got from this sad blog. Yes, as said above I could retire comfortably on $1 million.

Back to Derek Foster. He claims that, among other things, while many people were chasing overpriced tech stocks in 1999 and 2000 he had the sense to buy ignored and underpriced companies which provide goods everyone uses like Johnson & Johnson, Sysco Foods, banks, oil companies, and utilities. If you still don’t believe he’s for real, why don’t you borrow one or more of his books from the library and read them?

#231 antiflak on 02.08.13 at 10:37 pm

#52—- actual last year of metal snake occurred 2001, and by the way 1960 was year of the metal rat, not snake. Metal rat month occurred recently Dec 13, 2012 to Jan 11, 2013, also arguing that Chinese New Year is really the Spring Festival commencing Feb. 10th this year.