The gospel of buy

wacko

Gregg says he’s been arguing with a real estate agent friend in Vancouver, “who is absolutely convinced that residential real estate is the only sane investment decision that can be made.” This week that ‘friend’ send this poor Gregg, just to mess with his head:

“To buy is to build equity in your future. To rent is a virtual license to pour hard earned money down the drain. To buy is to see gains surpass those in a good stock market portfolio during rockier times on Wall Street. To rent is to enable landlords to own and often prosper.”

Wow. Just imagine if this was a pitch to sell stocks or a corporate bond issue. The promise of guaranteed returns, the absence of risk and the assertion that not investing means losses. A statement like that would have a financial advisor up before a regulatory board, and on his way to delivering pizzas. Not only is it unethical, it’s also false. Gregg needs a new friend.

As you may know, the April numbers are in for Vancouver and Toronto. This is arguably the most important month of the entire year for real estate, especially now. It’s prime time for house sellers and hunters, and coming after months of year/year sales declines – amid a new round of cut-rate mortgages – all eyes have been on the stats to see if this is turning into a soft landing, or a crater.

Sam Wyatt is a no-nonsense realtor working the rich streets of Van’s Westside. What he’s telling clients is far different from Gregg’s deceitful little compadre:

“Months of Inventory (MOI) turned upwards in April, likely signaling the crest for sales volumes this spring.  If the MOI follows the pattern of 2012, then we will see it rise again to a new high point late in the year.  Last year the MOI figures bounced up to high points not seen since the credit crisis – to over 14 months for detached homes.  Attached homes enjoyed the lowest MOI in April at 4.89 months while detached and apartments were both back over 6 months.

“A rising MOI will likely mean that May will be the last really good month this year to sell a home so list the house now.”

Hmm. Seems like we have competing versions of reality here.

For the record, there were 2,627 home sales in Vancouver last month, which is a 6% decline from last year. The total sales for April were the lowest since way back in 2001, and are running 21% below the 10-year average. The real estate board, with a straight face, calls this ‘balanced.’ The realtors are also massively relieved, because they expected worse – something more along the lines of the 18% year/year drubbing that took place in March.

As for prices, they fell about 6% in the last few months of 2012, with the Frankenumber down 4% from a year, and up 1% from January. But, as you know, there are pockets of Richmond where asking prices have been reduced by 50%. Careful what you believe. The bottom line, however, is that the average SFH in Van still costs more than $1 million, and is out of the reach of the vast majority of the population. This puppy is far from being spanked.

Now, Toronto. There is so much spinning going on, it’s a wonder anyone can still stand.

“Despite the headwinds we have experienced in the housing market this year, April sales came in quite strong in comparison to last year,” says head realtor Ann Hannah. “As we move through the spring and into the second half of 2013, the demand for home ownership should continue to firm-up relative to last year.”

Tweeted Canadian Real Magazine, “We hate to contradict CREW readers, but those new TREB numbers suggest condos still have some life in them.”

Sales of 9,811, to Hannah’s relief, were down just 2% from last April (well, actually down more, but TREB fudged the numbers again). The average price is now 2% higher than a year ago and as for condos, the real estate board says prices have edged higher while sales fell slightly. Its conclusion: “this suggests that interest in condo ownership may be improving.” (And how is this for spin?)

However, here are some facts everyone should be aware of. The daily volume of sales last month, compared to a year ago, is off 13%. Sales of detached homes under half a million fell by 10%, and over a million were fewer by 7%. Hardly sounds like a strengthening market.

And hot off the press is this report from Toronto’s Urbanation: New condo sales were down 29% in the first three months of this year from the end of 2012, and year/year have crashed 55%. There are now 18,845 unsold units sitting vacant, a record. Resale condo deals are 18% below year-ago levels, while listings have ballooned 25%.

Is this the trajectory of a soft landing? Many economists believe so. Thousands of realtors pray so. Yet nobody has a clue. Which means buying a home now is a major financial gamble.

This is what makes Gregg’s realtor pal so irresponsible. Renting’s far cheaper than owning – especially in Van or 416, and even with sub-3% mortgages. If real estate doesn’t have sustained and substantial capital appreciation there’s no equity built. You’re simply retiring debt on a  depreciating or non-performing asset, trading dollars which could be far more effective elsewhere.

Most people know this. But they don’t care. Houses are emotional. It’s why realtors so often lie, yet so seldom are rebuked.

Unlike, say, bloggers.

178 comments ↓

#1 Dorf on 05.03.13 at 7:14 pm

Right.

#2 Carlos on 05.03.13 at 7:19 pm

50% reductions in pockets of Richmond…. umm, where exactly? and how do I find them? (my ‘hood!)

Was detailed here, and on Whispers. — Garth

#3 CalgaryGuy on 05.03.13 at 7:23 pm

Hi Garth: any predictions for when Calgary starts declining?

#4 Burnt Norton on 05.03.13 at 7:24 pm

Is the triple top formation in Vancouver detached prices at all meaningful?

#5 Dr. Hoof - Hearted on 05.03.13 at 7:24 pm

Oh yeah…….baby

#6 Smartalox on 05.03.13 at 7:26 pm

April / May are the prime times to buy a home, to allow the deal to close before the kids are back in school in September. If MOI is up at Victoria Day, real estate is well and truly cooked.

#7 TurnerNation on 05.03.13 at 7:27 pm

Not all is as it seems to be:

“Junction semi sells 2 months ago but is back on the market at a $40k increase. WHaHHT?
http://themashcanada.blogspot.ca/2013/05/relisted-80-laws-street-junction.html

#8 Nukester99 on 05.03.13 at 7:31 pm

The Star deleted my comment from yesterday regarding their dishonest reporting. It seems the Star has no interest in conflicting opinions. Alas we have Garth for the truth.

#9 george on 05.03.13 at 7:34 pm

Garth. I just emailed the following information to the CBC National News:

Outstanding job on your recent series The Monarchs of Money. I am sure many average Canadians learned quite a bit from this series about a topic which generally speaking is completely foreign to them, that being the very basics about how our financial system works.

I hope you continue to do updates on this series, and if you do could you please do a camera interview with Prime Minister Stephen Harper and the Governor of the Bank of Canada, Mark Carney about the following:

The following information is from a credit market summary data table on Statistics Canada’s website:

The bottom line of this data table (total debt outstanding) contains the following statistics:

The total debt outstanding in Canada at the end of December 2012 was $5.25 Trillion. From the end of December 2011 to the end of December 2012 the total debt outstanding in Canada increased by $269 Billion. For that 366 day period the total debt outstanding in Canada increased at a rate of $735 Million per day.

With a total credit market debt of $5.25 Trillion and an annual gdp (at current prices) of $1.83 Trillion Canada’s total credit market debt is 2.86 times the size of our annual gdp.

The question I would like to see you ask Messrs. Harper and Carney is “What were Canadian households and businesses, their elected politicians, and their Governors of the Bank of Canada thinking in allowing the total government (federal, provincial and municipal), business and household debt in Canada to rise to these absolutely insane levels.

#10 jan on 05.03.13 at 7:45 pm

Why doesn’t our government tax real estate profits from all those flippers…..am I missing something here?
Oh wait I know, because I a renter and a tax payer will cover it if it need be.

#11 matt on 05.03.13 at 7:46 pm

In Edmonton prices are starting to slip, down 1.8% in April compared to March. That’s an annualized loss of over 21%. We’ll see whether this is a blip, or a start of a very bad patch in the Edmonton market. Makes sense though, the provincial government is cutting back, and it’s the major employer in Edmonton.

http://www.edmontonjournal.com/business/real-estate/Mixed+residential+sales+results+Edmonton/8333874/story.html

#12 I Love Lucy on 05.03.13 at 7:46 pm

Let’s not forget to mention that this April had an extra business day. So those numbers look better than it really is. I’m currently waiting for Hamilton Burlington Real Estate Board sales numbers for April. I know in March sales in Stoney Creek crashed almost 50% and around 25% in Burlington. I’m hoping the same for April. One thing I notice on their website is once they post the sales number for the month, they would go back and delete the sales numbers for the same month last year. Very fishy. Luckily i noticed this so i saved all of last years sales number just in case they pull the same sneaky movement..

#13 Big English on 05.03.13 at 7:51 pm

House the wife is watching in East Van just dropped $50k, only $899k now for a complete gut job!

#14 Freedom First on 05.03.13 at 7:53 pm

To Gregg’s friend, and to all of the people involved with the RE industry who lie to make their $$ : why not clear your conscience and come on Garth’s blog to make a public apology? Don’t worry about any cost of posting your apology, as Garth spreads the truth on all financial matters, including RE, through his generosity of spirit, so his blog is free.

#15 jan on 05.03.13 at 7:56 pm

Btw – Why doesn’t our government tax real estate profits from all those flippers…..am I missing something here?
Oh wait I know, because I a renter and a tax payer will cover it if it need be.

I GEUSS NO P.. WORD ALLOWED EH GARTH….LOL
I forgive you that.

#16 al on 05.03.13 at 7:59 pm

in the stock markets, higher price on the lower volume is a bearish indicator (fewer buyers remain at current price), why would the higher prices on declining sales be a good thing for RE?

#17 Canadian Watchdog on 05.03.13 at 8:00 pm

Ever wonder how global investors are making out on Van’s condos? Below are overseas returns based in currencies:

REBGV Condo Average Price – April YoY %

Canada -6.3%
USA -3.9%
Europe -5.1%
China -9.5%
Hong Kong -8.6%
Philippines -11.8%
India -5.1%
Russia -2.9%
Iran -9.7%

#18 The gospel of buy — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate – The Affluent Boomer on 05.03.13 at 8:01 pm

[...] via The gospel of buy — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Esta…. [...]

#19 Raven on 05.03.13 at 8:08 pm

The natives are getting restless. This is proof that ideologists can never admit being wrong….

There seems to be an urgency now when discussing RE.
This summer will set the stage going into the fall, for the get in before Christmas crowd. A congruence of inventory, only has to be small in overall market size, to effect individual builders in scale. Then the small builders will get squeezed first and force precipitous price declines. Watch the September market for the real price declines to begin.

If you have to forecast, forecast often!

#20 TurnerNation on 05.03.13 at 8:12 pm

I thought “we” no longer are talking about ‘Urbanation’. Context, context. :-)

#21 Mukhtiar on 05.03.13 at 8:23 pm

At number #4 Burnt Norton – please look at the following video when it comes to Scamcouver.

http://www.youtube.com/watch?v=aL5uNCraRl8

Vancouver is the laughing stock of real estate. There is no industry to support 2.9 million dollars homes. The Vancouver real estate market is headed straight to the toilet. There will be a major collapse in housing prices in that city guaranteed. Vancouver is screwed!!

#22 X on 05.03.13 at 8:26 pm

The realtors don’t get, that if Canadian debt loads don’t come down, the govt’ could impose further restrictions to getting mortgages and lending standards

#23 T.O. bidding wars debunked - May 3 on 05.03.13 at 8:31 pm

http://recharts.blogspot.ca/2013/05/to-bidding-wars-debunked-may-3.html

http://recharts.blogspot.ca/2013/05/to-bidding-wars-debunked-may-3.html

And here is the finale report for April. My numbers are slightly different than TREB’s . I am collecting data made public by various sources.

http://recharts.blogspot.ca/2013/05/toronto-housing-market-almost-flat-yoy.html

Canadian Watchdog thanks a lot for the info you posted recently. Please continue to do so.

#24 Burnt Norton on 05.03.13 at 8:33 pm

#21 Mukhtiar on 05.03.13 at 8:23 pm

Um, thanks for the effort but I don’t need convincing.

My question had more to do with whether or not traditional stock market technical analysis applies to RE vis a vis triple tops and the implied impending steep decline.

#25 IvanDrago on 05.03.13 at 8:34 pm

“To buy is to build equity in your future. To rent is a virtual license to pour hard earned money down the drain. To buy is to see gains surpass those in a good stock market portfolio during rockier times on Wall Street”

So what do realtors call it when you buy a house for $800k and it drops to $600k value in 5 years? Would love to hear their answer on that scenario.

#26 highway61 on 05.03.13 at 8:39 pm

#3CalgaryGuy on 05.03.13 at 7:23 pm

Never (not that I think that that is a good thing); or at least not until intrest rates are 6.5 again (that soun somehow sounds as “never”, doesn’t it). Worst case scenario is minimal price increases during next 18 months (2.5%-3.5%).

#27 AisA on 05.03.13 at 8:41 pm

I can’t wait to hear about/read the stories about rising interest rates not deterring determined buyers who refuse to throw their money away on rent.

What a farce. Forget all about a dip, dips need a balance between buyers and sellers being sought out. This is going to be a crater of which the man on the moon will be jealous.

Soft landing my bleep.

#28 wheredideverybodygo on 05.03.13 at 8:51 pm

Just checked out realtor.ca. It looks like their changing their search function to split housing from condos. Before it was an option, now it is one or the other. Can anyone confirm? Is this a case of divide and conquer? Or hide and concur?

#29 Dr. Hoof - Hearted on 05.03.13 at 9:11 pm

#10 jan on 05.03.13 at 7:45 pm

Why doesn’t our government tax real estate profits from all those flippers…..am I missing something here?
Oh wait I know, because I a renter and a tax payer will cover it if it need be.

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

Because…..

The Gov’t won’t stop or interrupt a boom and be a party pooper……however it will get its pound of flesh after the SHTF.

#30 Dr. Hoof - Hearted on 05.03.13 at 9:12 pm

Garth:

Why do change blog photos…what was wrong with the first one ?

#31 Mukhtiar on 05.03.13 at 9:16 pm

at No 24. Norton – Forget about the stock market. The moment you talk about real estate values is the moment Vancouver is fodder. Vancouver real estate is the biggest scam on Earth right now. It’s so huge you should not even be mentioning it in the same breathe. Vancouver real estate will be worth less than sewers in Detroit very soon. That is the next collapsed market. Guaranteed!

#32 Mukhtiar on 05.03.13 at 9:20 pm

anyone with real estate in vancouver should sell immediately. Sell it for whatever you can get. It’s a complete scam market. When you have ten thousand year wrinklies invested in scam markets like British Properties with homes that cannot otherwise sell. Its a complete scam. Vancouver is the biggest scam real estate market on god’s green earth. SELL NOW!!

#33 Smoking Man on 05.03.13 at 9:22 pm

Most people know this. But they don’t care. Houses are emotional. It’s why realtors so often lie, yet so seldom are rebuked.

Garth is everyone so bummed out when people lie..

It’s as natural as a real man who’s been drinking writes his name in the snow, yellow, steam rising….

Your lovely bride who use too great you at the door in that tiny red thong after a few kids and a few years now wearing biege granny panties asks you.. Honey am I fat…… Lol off course your going to lie, if you know what’s good for you….

Simulatly, you ask your wife. Honey your on vacation with your girl friends they have all gone to bed, and the old spice man (look at him lookat me) showshows up, you hit it off and he wants to bed you… Ladies obviously your going to lie, No sweets it’s only you..

But that’s okay isn’t it, to lie to not hurt the ones you love..

But to lie to make a buck and every one here crys foul……

Fudge……. What is wrong with you people

Smoking Man a proud master lier……

#34 Mister Obvious on 05.03.13 at 9:28 pm

“You’re simply retiring debt on a depreciating or non-performing asset, trading dollars which could be far more effective elsewhere.

Most people know this. But they don’t care.”
—————————–

I think most people don’t know this, but even if they did, they wouldn’t care.

#35 Paully on 05.03.13 at 9:37 pm

I understand that a classic RE line is “you are going to be paying a mortgage — either yours or your landlord’s.”

Instead of that, I tell people that “you are going to be renting — you can rent the mortgage money from the bank, or you can simply rent the house.”

In today’s crazy market, I choose to rent the house!

#36 Boombust on 05.03.13 at 9:38 pm

#33…

Such a writer!

Your similes are…..well, never mind.

Such a dunce. (You, not me.)

#37 Shawn on 05.03.13 at 9:38 pm

HOUSE PRICE MATH

Here is a bit of brain teaser…

Imagine you own a house worth $400k that is fully paid for. You have a large income and plan to buy your dream house that is twice as valuable, twice as nice, so $800k.

You plan to buy in three years time.

If house prices remain unchanged, it will cost you $400k additional investment to get the dream house that is twice as “nice”.

If house prices double you can sell your existing house for $800 but it will cost you an additional $800k for the new twice as nice dream house now priced at $1.6 million. Your net worth will be $400k higher (tax free) due to the doubling of your existing house’s price.

If prices fall by half you will take a $200k loss on your existing house but now it will only take $200k new cash or mortgage to buy the twice as nice dream house. Your net worth will fall by $200k but you will get your dream house for only $200k new cash

To summarize, in all cases you get your dream house twice as nice as existing.

If prices double your net worth is up $400k but you have to spend additional $800k on the dream house.

If house prices are stable your net worth is unchanged by but it costs you only $400k additional to buy the dream house.

If house prices fall by half, your net worth drops by $200k but then it only costs you $200k to get the dream house.

Now, we see net worth always increases as house prices rise, but really in which scenario are you truly better off? Especially assuming you will never sell the dream house but just live in it until your death. And what if the additional cost of the new house is paid with a mortgage, do you prefer the $800k mortgage with $400k increase in net worth or the $200k mortgage but $200k loss in net worth.

It comes down to the fact that net worth is not everything. A $500k net worth with no debt is far superior to a $500k net worth based on $1.5 million in assets and $1 million in debt, no?

So I prefer the scenario where house prices fall. And afterall if they fall they may rise in future restoring the net worth.

What do you think?

#38 Canadian Watchdog on 05.03.13 at 9:47 pm

Robert P. Kelly Appointed as Chairperson of CMHC Board

OTTAWA, May 3, 2013 — The Honourable Diane Finley, Minister of Human Resources and Skills Development and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC), today announced the appointment of Robert P. Kelly as Chairperson of the CMHC Board of Directors for a five-year term effective immediately.

Mr. Kelly was Chairman and CEO of the Bank of New York Mellon from 2007 to 2011….

Which means this event happened under his administration: U.S. and New York Sue Bank of New York Mellon Over Foreign Exchange Fees

Finally we're getting superstar fraudsters. Canada is moving up in the world!

#39 george on 05.03.13 at 9:47 pm

Leon Black, chief executive officer of buyout firm Apollo Global Management LLC (APO), said prices for traditional buyouts have risen so much that it’s a good time to sell.

“We think it’s a fabulous environment to be selling,”Black said today during a panel discussion at the Milken Institute conference in Los Angeles, adding that Apollo has sold about $13 billion in assets in the last 15 months. “We’re selling everything that’s not nailed down, and if we’re not selling, we’re refinancing.”

http://www.bloomberg.com/news/2013-04-30/black-s-apollo-selling-everything-as-prices-have-risen.html

#40 EastVan on 05.03.13 at 9:56 pm

About a year ago they kicked most of the small busineses out of the 2500 block (north side) of East Hastings. They tore down the buildings and put up a sales office and website: http://www.liveatalba.com.

Today there is still a big hole in the street, but the website is down and the sales office dosn’t open any more.

I feel sorry for the businees owners that were kicked out, and the people who put down deposits on new condo’s

http://www.604presale.com/alba-hastings-vip-early-buy-incentives

#41 Smoking Man on 05.03.13 at 9:58 pm

#36 Boombust on 05.03.13 at 9:38 pm#33…

Such a writer!Your similes are…..well, never mind.Such a dunce. (You, not me.)

What, huh?

I’m looped at senica , wife is deep into her obsession feeding the machines, I said honey going to the bar to try and bed a young hotty. She bursts out into uncontrolled laugh,

THE ARY OF LIEING….

#42 Devore on 05.03.13 at 9:59 pm

http://www.vreb.org/mls_statistics/current_statistics.html

VREB stats out for April.

So we’ve wondered how the REBs would hide price declines once all the usual tricks stop working… how we have the answer. Enter the “Six-Month Average Price”.

You can’t make stuff like this up.

Still no mention of the extra business day in April 2013 over 2012. We’d surely hear all about it if there was one less.

#43 Devore on 05.03.13 at 10:04 pm

#37 Shawn

This is simple. Lower prices are flat out better in every case, even if interest rates increase making the monthly payment the same.

The “property ladder” in a bubble market is a myth. Well, it’s a myth anyways, but particularly dumb at this time. You’re simple trading in your increased equity for even bigger debt.

#44 45north on 05.03.13 at 10:07 pm

For the record, there were 2,627 home sales in Vancouver last month, which is a 6% decline from last year.

so Ben Rabidoux was right , the 20% decline in March was followed by as 6% decline in April

talking about The Centre of the Universe Sales of 9,811, were down just 2% from last April

you don’t even see a 2% decline on a graph, I mean it would look like April 2013 sales have caught up with April 2012 sales.

I got to hand it to Flaherty. keep the pain below a certain threshold, discipline is imposed without the revolución

#45 Coho on 05.03.13 at 10:15 pm

In the Vancouver/Fraser Valley, those that didn’t purchase a house by mid 2006 have missed the boat. That ship has sailed. Won’t be coming back to port for many years.

In my opinion, the years where average people purchasing real estate could profit are long gone. Now is the time (already too late in some pockets as mentioned above) to make a once in a millennia capital gain. That is if they are inclined to do so. After all, for many people, their house is a home and not considered an investment or money in the bank.

The rise of the middle class in western countries was a by-product in the development phase of technology given us by those behind world affairs to usher in a new world order…a global overlord body that will eventually silence so-called sovereign nations. Our national teeth have already been yanked out. No bite left, just bark and soon even our bark will be silenced.

Remember the game is to ultimately extract wealth from the people and make more and more of them dependent on hand-outs and a hand to mouth existence. This disempowers us. No time to invest in awareness. No time to educate ourselves about the world we live in. No time for deep thoughts or reflection — only sound-bite so-called news to watch while we sit for a bit and catch our breath before the next task.

Every obstacle is being thrown in peoples’ way to prevent them from prospering. As long as those relative few very powerful people and entities in this world can continue to profit from human misery, real opportunities for an average person to better his/her lot will be few. And rest assured, war, sickness and hunger will continue as long as the ruling class and its minions can profit from it. Everything is geared towards profits in this world, from Joe six-pack’s quest for decent ROI to finance a decent retirement to those who profit from atrocities around the globe.

In general, if ‘everybody is doing this’, then you’re probably better off breaking away from ‘the herd’. Why not pull a George Costanza and do the opposite? Did his life not become much better when he went against every ‘normal’, ‘logical’, ‘common sense’, ‘acceptable’ approach to life? 

#46 salonist on 05.03.13 at 10:21 pm

rumors are, the fool on the hill has been sighted dumpster diving.
you’re worse than harper.

#47 Devore on 05.03.13 at 10:23 pm

Susan Pigg of Toronto Star at it again:

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

Blame the weather!

#48 Smoking man on 05.03.13 at 10:26 pm

DELETED

#49 T.O. Bubble Boy on 05.03.13 at 10:29 pm

The REAL numbers from TREB:

April 2012 = 10,350
http://www.torontorealestateboard.com/market_news/release_market_updates/news2012/nr_market_watch_0412.htm

April 2013 = 9,811 (-5.2%, not the reported -2.1%)
http://www.torontorealestateboard.com/market_news/market_watch/2013/mw1304.pdf

And, the discrepancy seems mostly from SFH in the 905 region:

April 2012 = 3,743 sales of detached in 905

April 2013 = 3,675 sales of detached in 905, which TREB reports as a 2.5% increase vs. a -1.8% decrease. A 2.5% increase would imply that 2012 sales were 3585, which means that 158 sales (4.2%) of SFH sales in April 2012 magically dissapeared.

#50 Lookoutbelow on 05.03.13 at 10:34 pm

3 month (Feb, Mar, Apr) Single Family Detached sales moving averages, as reported by the Board on May 2:

Richmond 2013 / 2012 DOWN -14.3%
Vancouver Westside 2013 / 2013 DOWN – 13.1%
West Vancouver 2013 / 2012 DOWN – 34.5%
East Vancouver 2013 / 2012 DOWN – 27.0%
North Vancouver. 2013 / 2012 DOWN – 9.9%

Press Release headline:

“Spring delivers greater balance to Greater Vancouver housing market”

Yup, the market looks balanced to me as well. What’s the problem?

#51 Kegpeg on 05.03.13 at 10:39 pm

REBGV:
April 2012: Home Price Index benchmark price for all residential properties in Greater Vancouver currently sits at $683,800
April 2013: Home Price Index composite benchmark price for all residential properties in Greater Vancouver is currently $597,300.

Don’t like the numbers? then modify the index to report 10% lower against last year’s numbers that you never reported publically.

#52 Burnt Norton on 05.03.13 at 10:40 pm

#31 #32 Mukhtiar on 05.03.13 at 9:16 pm

Man, feedback from this comments section, you sure do get what you pay for.

Something tells me I’m not the only RE bear reading this who’s a little embarrassed by your tirade.

#53 Smoking man on 05.03.13 at 10:48 pm

Garth why when I’m on the jd zone.. You delete me..

What did I say……… Shit man please share with me one day.. My deletes

I love life is that a crime..

Blond, brunet on either side of me….. What to do?

Wtf was my previous post…

#54 mac on 05.04.13 at 12:16 am

It’s not just the realtors that lie. In a bubble virtually everyone lies to themselves.

#55 Mister Obvious on 05.04.13 at 12:36 am

An old industrial building on the southwest corner of 4th Ave and Fir Street in Vancouver is now gutted and ready for demolition. It was formerly a Kodak color processing center (and we know how things went for Kodak).

The site had been seeking a commercial tenant for about 2 years. No takers.

Then some bright spark came up with a capital idea. “Let’s ticky-tack up some more condos!”

Good lord, such paucity of imagination. Say, why not write another rock and roll song while you’re at it?

#56 Stoopid Idiot on 05.04.13 at 12:49 am

Study Reveals Secret Bailouts to Canadian Banks

http://www.youtube.com/watch?feature=player_embedded&v=9K_N0uOXkQA

#57 Tony on 05.04.13 at 12:50 am

Re: #11 matt on 05.03.13 at 7:46 pm

Prices have been slipping since they peaked way back in the summer of 2007. Resale condos are still fifty percent less almost 6 years in the future. Calgary saw even worst price declines month over month. Factor in 60 dollar oil and the end of natural gas until this October and it looks worst than gloom and doom for all of Alberta. Ps. anyone that watched BNN last Wednesday had a unique opportunity to short natural gas when the Thursday morning draws came out the next day. Old T. Boone Pickens himself was on promoting natural gas talking about 6 bucks and why? He knew the draw figures for the next day meaning making money doesn’t get much easier than this or that since it’s in the past.

#58 Dr. Hoof - Hearted on 05.04.13 at 1:52 am

#40 EastVan on 05.03.13 at 9:56 pm

About a year ago they kicked most of the small busineses out of the 2500 block (north side) of East Hastings. They tore down the buildings and put up a sales office and website: http://www.liveatalba.com.

Today there is still a big hole in the street, but the website is down and the sales office dosn’t open any more.

Brought to you by Hastings Sunrise Development Limited, a wholly owned subsidiary of London Drugs Limited (headquartered in Vancouver), ALBA Vancouver apartments for sale will feature an amazing and convenient location coupled with affordable pricing for today’s first time condo buyers.

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

There’s an old saying about building…..When Housewives, Firemen and Telephone Co employees are becoming builders…time to get out.

In the case of “ALBA”, WTF is a retail chain like London Drugs getting involved ?

I still recall in the early 1980’s a 3 storey concrete shell sitting unfinished for years just West of the PNE….it was very close to beng condemned till they finally completed it.

Bad Omens

#59 Buy? Curious? on 05.04.13 at 2:10 am

Garth, excellent post yesterday! You’ve probably gained more groupies than One Direction.

Anyhoo, when all the prices of homes start dropping like panties at a Tom Jones concert circa 1981 (my mom told me) won’t the losers who have been “waiting on the sidelines” come flooding like the herd before them? I mean, Toronto is as close to a world class city as Canada gets (Edmonton? Vancouver? Ya right! Plaid and cowboy hats are so lame that I’ve lost a few style points by just mentioning those towns!) and as crappy as some of condos are, the alternative of living in Brooklyn Ontario is like living in some Kafka-esque hell where you commute to work 3hours, one way! “Are you enjoying your pretty little house that looks like the the other 3000 in a subdivision with a backyard that your kids can play in? BarBQing with your neighbours much?”

I, personally, love you Garth and think you should be honoured with an award, like the Order of Canada, and have Stevie H pin it on your pinstripe lapel. However, (OMG! I think I’m going to quote Smoking Man, who by the way, is smarter than most people give him credit for) you can’t stop herd mentality.

One other thing, did you see that the suicide rate in ‘Merica is up. There were more suicides than there were motor vehicle deaths. And it’s mostly baby boomers. Here’s the article.

http://www.nytimes.com/2013/05/03/health/suicide-rate-rises-sharply-in-us.html?hp&_r=0

And this is for Smokie M. Keep on rocking it!

http://www.youtube.com/watch?v=SYnVYJDxu2Q

#60 You guys are good on 05.04.13 at 2:52 am

As was reported by posters on this blog, an article on WNED (NPR station in Buffalo) today verified that many of the detached houses currently being bought in the US are being bought by large companies that then rent them out. This is resulting in bidding wars in some areas.

The article concluded with a statistic that surprised me : One third of Americans currently living single family detached homes are renting! If it wasn’t NPR, I would not even believe it. Can anyone confirm or disprove this ?

#61 Dean Mason on 05.04.13 at 3:01 am

The april-2013 U.S. jobs report is not such good news as the Media is spinning it.You need between 125,000 to 150,000 new jobs every month just to keep up with U.S. population growth.A real U.S. recovery would of created 325,000 to 375,000 jobs a month on average over the last 36 months.You need Full-time not part-time jobs.

It will take at least 6 to 7 years to absorb all the unemployed,underemployed and new workers participating in the U.S. workforce at this rate.We all know that there is a recession at least every 6-7 years.

#62 Billy on 05.04.13 at 3:34 am

I am in van just leased a 600k unit for 1500 the numbers don’t make sense. But the the guys who moved my. Crap said I should buy they did and it is only going higher. When guys who move for a living are buying it is scary I am an engineer who. Makes top dollar and I am glad I was able to sell my two bedroom for 430000 I will know in a year or two if I screwed up!

#63 james on 05.04.13 at 4:13 am

Toronto real estate: Downtown condos lead broad rise in prices ?!?

http://www.thestar.com/business/real_estate/2013/05/03/toronto_real_estate_downtown_condos_lead_broad_rise_in_prices.html

#64 YOU NEED a SmAcking, Man on 05.04.13 at 4:58 am

Hey Smoking Man,

“Loved” your comments about lying scum in business.

When you wife’s cancer doctor turns out to be a divorced gambler who misdiagnoses her so that a bigger chunk can be removed later and he can get a kickback from the plastic surgeon that he recommends, don’t take it personally- It’s just business.

When your trading account gets emptied by Russian teenager, well you better get smarter, faster.

When your recent car purchase ends up being two wrecks welded together with a coat of paint slapped on, geez, a guy’s gotta make a living!

Lie because you are weak and friggin lazy. Can’t face the truth, don’t know how to say it.

Problem is, soon you lie to everyone and everyone is a liar to you, right? Then you can’t trust your mechanic, your accountant, even your doctor.

But hey buddy, I’m just like you. I don’t work for any one else, you can trust me…I’ve got a hot tip for you.
Right up your ever mispellin’ @ss.

#65 observer on 05.04.13 at 5:17 am

When you own the house and have it paid off, then you can say renting is throwing you money away. But lets not forget, the opportunity cost.

But when you have 0 or 5% down. Your new land lord is the Bank of Canada. They own your ass and can kick it which ever way they want, unlike your landlord, whereas you can boss them around.

So how do you guys figure owning is better, get over it, unless you can do a proper balance sheet to balance the figures then you should keep your mouth shut!

#66 backwardsevolution on 05.04.13 at 5:51 am

#38 Canadian Watchdog – thanks for the article re Mr. Kelly. Unbelievable!

Thanks also for the great articles you post. Really appreciate them!

#67 Ballingsford on 05.04.13 at 7:07 am

Interesting picture today. Trying to figure out if you are making fun of the realtor’s name, or business is slow and the realtor can’t afford traditional advertising and a new sign, or maybe this realtor is one who’s got your back.

#68 Jimmy on 05.04.13 at 7:14 am

When the houseless masses finally realize that the emperor has no clothes, they’re going to drop him like a hot potato. After all they’re only here for one reason — the dream of one cheap mansion for every loyal basement dweller. Unfortunately the emperor’s got nary a bone to throw to them. Vancouver down a few % points, but still averaging over a mill? That won’t keep the faith for long. Time to go to the well for a few more “I told you so” and “just as I predicted” comments to keep these sycophants satisfied a while longer.

#69 LP on 05.04.13 at 7:43 am

#64YOU NEED a SmAcking, Man on 05.04.13 at 4:58 am

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

Crudely, bud eloquently, put!

#70 betamax on 05.04.13 at 7:48 am

Aside from the stats, the Canadian housing slo-mo crash is increasingly evident in the recent fraudulent shenanigans in which employees and relatives pretend to be customers.

They didn’t resort to such blatant media chicanery previously — not because it was unethical but because it wasn’t necessary. Now it is.

Sinking ship. Rats.

#71 Julia on 05.04.13 at 7:48 am

Here is a property to watch, owned by one of the most notorious realtors in Riverdale for underpricing to create a bidding war. Listed his own home in November for $1,499,900
http://themashcanada.blogspot.ca/2012/11/603-carlaw-avenue-riverdale.html
Didn’t sell. Now he’s got it back on the market this week for $1,124,900
http://www.century21.ca/leadingedgerealty/Property/ON/M4K3K4/Toronto/Carlaw_Ave/603

#72 Chickenlittle on 05.04.13 at 8:44 am

#13Big English on 05.03.13 at 7:51 pm
“House the wife is watching in East Van just dropped $50k, only $899k now for a complete gut job!”

WOW!!!!!! Better get in NOW before you are priced out FOREVER, and EVER, and EVER!!!!

But don’t get sick, laid off, die, have ANY children, go on vacation, buy a car (that one you have right now will have to last you for the next 25 years), or have dinner out anymore. But hey, at least would you own a piece of the pie!

SIGH….I live in the GTA and I understand you completely.

#73 TimothyDarling on 05.04.13 at 8:47 am

Toronto home sales came stronger because of one extra business day.

Also apparently the April’s sales are overestimated by as much as three percent.

#74 Canuck Abroad on 05.04.13 at 9:11 am

Whistler anecdote:

2501 Whistler Road (built in 2006) sold in August 2008 for approx $1.6 million. Take a look at the picture; it had two garages under the main living area:
http://www.whistlerforsale.com/Blog.php/54
http://www.whistlerforsale.com/PropertiesOriginal.php/Details/35

Next, the 2008 buyers converted one of the garages to living space and renovated throughout, then listed it for sale but by then the Whistler market had already turned so the price they listed it at was $1.55 m. Ooops.

http://www.seatoskypremierproperties.com/residentials.php?action=details&id=5892

Not sure if it ever sold…

Then, it was listed again on 15 Jan 2012 for $1.489 m. Finally, sixteen months later the house has sold at last. I can confirm that it just sold on 30 Apr 2013 (sorry, no link but the listing number is W022573 if anyone cares and has access to the realtor database). Selling price $1,002,250.

So there you have it. Somebody chased this market down all the way to 2/3 of original list by overpricing their home in a falling market and watching it sit unsold. Someone else, or possibly the same person, bought it less than five years ago for $1.6 million and then spent a lot of money gutting and renovating a three year old home.

Coming soon to a Vancouver neighbourhood near you…

#75 Craig on 05.04.13 at 9:36 am

I have a few comments for a Sat. morning;

Vancouver is not indicative of the entire RE market in Canada! In fact just the opposite. It was a huge bubble on top of other bubbles waiting to explode. It was a scam of scams. Dilapidated homes selling for $1 Million + is proof….people paid to line up at sales offices, etc., etc.

That insanity is not happening in the GTA, not even close. So to say Canada will experience what Van has is simply not true or at least there is no evidence to support it.

It’s kind of like saying what happened to Nortel will happen to all Canadian stocks. (I know an extreme example but you get my point)

I do believe prices are too high and will correct which is simply the mechanism of a free market. Maybe a pull back of 15% but so what.

The arguments I read here, for selling your home is that the prices have topped and a crash/pullback is imminent. Therefore you should sell and put your money in the stock market.

Hmmm, OK

Isn’t the DOW hitting new, all time record highs right now?

So using the RE logic, is moving money from one segment (housing) which is at all time highs and will crash/pullback, into another segment (stock market) that is also at all time highs, a smart move?

Would that logic not dictate that the markets are also about to crash/pullback?

Enlighten me please?

Stocks move higher or lower based on the revenues generated by the active businesses of which the market is comprised, affected by economic prospects. Equity markets are therefore leading indicators. House prices move more on emotion, based on perceptions of personal affordability. They are lagging indicators. Many factors, including the certainty of higher interest rates in years ahead, existing debt levels and negative demographics, do not support current housing valuations. The same does not hold true for equity markets, since global eocnomic recovery is nascent but firmly entrenched. A wise person has balance and diversity, which certainly includes not having the bulk of net worth in real estate. — Garth

#76 Piccaso on 05.04.13 at 10:00 am

Don’t start burning down the city just yet Van, still two more losses to go.

#77 sideline sitter on 05.04.13 at 10:17 am

#71 – over a mil… on Carlaw… on a 70 foot deep lot? Yikes.
That is crazy.

Originally listed over 1.4 mil is certifiably INSANE!

#78 AK on 05.04.13 at 10:36 am

#206 Craig on 05.03.13 at 3:16 pm
#157 AK – The stock market is a leading indicator?165,000 jobs added? Is that suppose to be good?

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

“With a population of well over 300 Million that is nothing and considering if you drill down into the Dept’s numbers you’ll find most of those are in the service industry.

Yeah, like McDonalds…minimum wage crap with high turnover. So people quit and they hire more and count them again next month as newly created jobs and people cheer.

They sold out all the manufacturing jobs to China and India so they would get those great EPS numbers everyone clamours for in the Stock Market.

Find me one Apple product made in the good old U S of A.”
——————————————————————–
Hey, It’s better than losing 165,000 jobs, No?.

Just remember, the Stock Market is a leading indicator. Believe what you want though.

#79 Victor V on 05.04.13 at 10:54 am

Caterpillar closing its tunnelling plant by mid-April 2014, throwing 330 people out of work

http://www.thestar.com/business/2013/05/03/caterpillar_closing_its_tunnelling_plant_by_midapril_2014_throwing_330_people_out_of_work.html

A death blow has fallen on a world-beating Toronto company whose tunnel-boring machines have burrowed beneath cities around the world.

Caterpillar Inc. announced that its tunnel-boring machine facility near Toronto Airport, which it bought just five years ago, will close, and 330 people will lose their jobs.

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

First the London plant, and now Toronto.

#80 CrowdedElevatorfartz on 05.04.13 at 11:01 am

@#40 eastVan

hmmmm looks like “Alba” is a wholly owned subsiduary of London Drugs…… perhaps they were dipping into their own “supply”

#81 blase on 05.04.13 at 11:02 am

“If real estate doesn’t have sustained and substantial capital appreciation there’s no equity built. You’re simply retiring debt on a depreciating or non-performing asset, trading dollars which could be far more effective elsewhere.

Most people know this. But they don’t care.” -Garth

—————————-

I disagree that most people know this, Garth. I think most people simply do this calculation:

Mortgage payment= building equity

Renting= giving money to a landlord/throwing money away

The idea that there could be a threshold where renting is cheaper and that a mortgage is bad debt has probably not been considered by probably 90% of home buyers. It seems so obvious that paying your own mortgage would always be better than renting, so why would folks go beyond that to try to have a deeper understanding of the biggest financial decision of their lives?

Sad to say, most people only follow the crowd, especially house-horny women. There’s nothing worse for the ambitious 20 or 30-something female than seeing a friend one-upping them in the house department.

The government of Canada has abdicated its moral responsibility to do what is in the best interest of Canadians.

There will come a day, and I believe that day will be in 2-3 years time, when the Canadian government faces a debt crisis, and when that happens, CMHC will cease to exist, the government will have no choice but to refuse to back any more home loans, and millions of Canadians will awaken from years of reckless and thoughtless behavior to a nightmare of owning a house that has become a massive, illiquid liability.

If you have any doubt, look at the “depressed” cities of Southern Ontario, the Londons and Windsors. Jam packed with sub-$150,000 3 bedroom condos and 2-3 bedroom houses. Meanwhile, take a look at the thousands of newly built homes for sale for $400,000-$1,000,000.

There is a fundamental disconnect, and its based purely on low rates and government guaranteed loans.

This situation would not exist if not for the largess of the Machiavellian-Harper government. It’s easy to forget that there is someone on the hook for all of this housing-wonderland-wishful-thinking. But keep pulling the thread, and it’s the government of Canada at the end of it.

Aging boomers in too-big and too-expensive houses. 20-somethings given the keys to condos that they had no business buying. Couples buying the biggest houses they could, with 5-year teaser-soon to be double or triple interest rates.

How could it possibly go wrong?

#82 CrowdedElevatorfartz on 05.04.13 at 11:06 am

@#53 smoking man
Your “dilemma” reminds me of the song. “clowns to the left of me, Jokers to the right. Here I am, stuck in the middle with youuuuuuuuu”

#83 Chickenlittle on 05.04.13 at 11:09 am

#75 Craig:
“I do believe prices are too high and will correct which is simply the mechanism of a free market. Maybe a pull back of 15% but so what.”

I am not sure about that, Craig. That does not seem like enough to me! For housing to be truly affordable RE would have to drop more than that. Think about it: 15% of $700k is $105k. Those shacks in the Danforth, Bloor/Landsdowne area are definitely NOT worth that much, IF you can find one that cheap.

Toronto is way over priced. I love this city, but I don’t feel it is worth paying half a mil to live in what looks like a crack shack in an over-hyped city.

If it was warm here all year ’round, then sure!

Vancouver is also over-hyped, but that is a horse of a different colour all together!

I’s all people my age (34) that are the stupid ones driving up the prices!

#84 MoneyMyHoney on 05.04.13 at 11:12 am

There may be some truth to the realtors argument. In 2009, in Markham, I balked at the asking price of $450,000 for a single garage detached home. The previous year, 2008, the asking price for a double garage home was $470,000. Anyway, the house for $450,000 sold at $480,000. Why did I hesitate? Reading the doomsday blogs like this and input from Mr. Madani et. al. who predicted at least a 15% reduction in prices soon.
Now, I find myself a bit foolish and aimless paying rent. The same single garage house, the asking price is way north of $600,000. A double garage house sold in the same area for $929,000 (asking price was $929,000).
The amount lost renting for this 5 years and beyond (don’t know for how long) is substantial? Where are the gains, even if prices come down? So, if you can afford… the decision must be left to yourself. Don’t listen to these dooms day cult and the economist.

Courage is blaming a blog for your past decisions. Have I not said repeatedly that every market is local? Good luck with Markham. — Garth

#85 Craig on 05.04.13 at 11:13 am

“including the certainty of higher interest rates in years ahead,”

That’s the $Zillion question;

I agree with everything you said except that.

I’ve been hearing for years that rates are going up…hear it all the time and what happened last week in Europe…they went down.

I look at it in the simplest of terms;

The people that control the interest rates are the same people that represent those who have the HIGHEST DEBT. (the US, etc..,etc.)

Therefore it’s in their best interests to keep rates low other wise managing the debt will only require even more printing of Trillions of $US.

Which will weaken their economy and their $$ further and kill any possible recovery.

They’ve painted themselves into a corner with QE and have no way out.

I’ll bet you a coffee that rates remain the same or drop throughout 2013.

A rate hike this year is unlikely, given current economic indicators. But rates will rise. Only grasshoppers would not ready for it. — Garth

#86 CrowdedElevatorfartz on 05.04.13 at 11:13 am

@#58 Dr Hoof

There is a construction site in Downtown Vancouver next to Downtown Toyota on Burrard that I watched being developed when Brian Mulroney was Prime Minister…
Its still sitting as a few concrete walls barely above st level and rusting rebar pointing towards the sky………
Bizarre.

#87 CalgaryHappyRenter on 05.04.13 at 11:15 am

Strange…

The maximum amortization period has been reduced to 25 years, down from 30 in June 2012 for CMHC mortgages.

May 2013: Calgary Herald still displays ‘Income, home price and down payment guide’ in New Homes section based on 30-year amortization.

#88 Gunboat Denier on 05.04.13 at 11:15 am

42 Devore – nothing wrong with using a rollng average. It smooths out month-to-month volatility, especially in smaller markets. Visually effective when plotted as a line over monthly bars. Was done years ago by VREB, or by someone using VREB stats.

Some debate over number of months to use for the RA.
Lookoutbelow @50 has some 3 month data.

#89 Canadian Watchdog on 05.04.13 at 11:15 am

Stocks move higher or lower based on the reveneus generated by the active businesses of which the market is comprised, affected by economic prospects.

Revenues? Now that's funny.

Showing a margin graph is hilarious. Rising markets always bring rising margin. Smart folks use OPM when assets advance and funds are cheap. — Garth

#90 Bailing in BC on 05.04.13 at 11:45 am

I have just been checking out the rebgv stats package.

When I look at the “Listing and Sales Activity Summary” I see that they are comparing Feb-Apr 2013 to Feb to Apr 2012. I thought that this was an odd comparison and seem to recall that previously they were comparing year to date, so Jan-Apr 2013 to Jan-Apr 2012 (I could be wrong).

So I decided to look back at old stats packages to see if they have changed what they compare but when I go back it seems that any packages older than 2013 only contain the new release spin and not the actual stats.

Does this not seem strange that they cannot supply stats beyond 4 months? Has this always been the case? Does anyone have old stats packages so we can check if they have changed their comparisons on the “Listings and Sales Activity Summary”?

http://www.rebgv.org/monthly-reports

#91 Stew on 05.04.13 at 12:10 pm

Study Reveals Secret Bailouts to Canadian Banks
https://www.youtube.com/watch?v=9K_N0uOXkQA

#92 Dr. Hoof - Hearted on 05.04.13 at 12:14 pm

#74 Canuck Abroad on 05.04.13 at 9:11 am

Whistler anecdote:

2501 Whistler Road (built in 2006) sold in August 2008 for approx $1.6 million.
=================================

I remember the dot. com bubble and Whistler. Builders were outdoing themselves building these $10 Million mansions for the nouveau rich. These were mosty part time homes for the wealthy

Buddy and I drove up for a day trip to check them out. Unreal. One of the “must haves” was some sort of rock(ie slate) floors.

I wonder how these ones are doing…bet that market has collapsed.

#93 Tony on 05.04.13 at 12:16 pm

Stouffville will break down in price before Markham so look at Stouffville real estate to get a gauge on what will happen to Markham in the future.

#94 Dr. Hoof - Hearted on 05.04.13 at 12:28 pm

“First salvo” fired in condo price undercutting war in Richmond

http://whispersfromtheedgeoftherainforest.blogspot.ca/2013/04/first-salvo-fired-in-condo-price.html

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

Here’s a real canary in the mine:

This is one of Richmond’s bigger builders. This site is waterfront, but that’s its only advantage.

It was built on an ex -industrial site…in what is really an armpit area of Richmond. The view across the river is an auto -recycling plant etc, around the corner is a huge electrical Substation, the areas road system sucks.

When you loose the commercial -industrial land base…you are saying good bye to even more local jobs

I hope this is a sign of the death knell of this insane RE market…it needs a looonnngg cooling down period.

#95 Mister Obvious on 05.04.13 at 12:34 pm

#58 Dr. Hoof – Hearted
#40 EastVan

Up until a year ago, I rented an office just a few blocks from the stalled development you speak of in the 2500 block of Hastings street in Vancouver.

Granted, that block of commercial storefronts was in rather poor condition but it was fully tenanted and at least generating some activity.

I watched most of the block come down in a heartbeat well over a year ago. Now there’s just a huge empty lot sitting about four feet below sidewalk level with an ugly plywood barricade in front.

Every time I drive through that area I check to see how its going. On last check… it wasn’t going.

Recently, another nearby hole was created at the north east corner of Hastings and Templeton. It looks suspiciously like… more condos. Will these complete? Its not looking good.

Just north of that is an old 40-unit apartment building that was completely gutted two years ago. Since then it has had a metal fence placed around it with a ‘stop work’ order from the City of Vancouver.

Dr. Hoof – Hearted, I well remember that half finished concrete skeleton further up Hastings just west of the PNE grounds. That eyesore sat there for years and years. I’m expecting to start seeing a lot more such things.

#96 Tyler on 05.04.13 at 12:34 pm

I had a hunch that sales figures would do better in April and May, but there’s still some weakness showing in local neighbourhoods.

I am astonished at the lack of regulations surrounding home ownership. Government won’t bite the hand that feeds I guess.

#97 jess on 05.04.13 at 12:49 pm

#8 Nukester99
six principles the guiding framework:
http://www.torstar.com/html/social-responsibility/Atkinson_Principles/index.cfm

“The Atkinson Principles are confined to the operations of the Toronto Star and do not extend to Torstar’s other publications or businesses.”

#98 Victor V on 05.04.13 at 12:52 pm

http://themashcanada.blogspot.ca/2013/04/relisted-94-macpherson-avenue-summerhill.html

WHAT is going on here!?!

This house was listed at the end of January for $1,200,000.

I thought it was a good house if you were up for a project but that the price was probably a little high. I thought a price closer to $995,000….maybe $1,050,000 made more sense.

This house sold a few days later for $1,110,000.

But now……..2 months later………it’s on the market again!!!!

For $1,150,000!!!

Did the deal fall through? This is getting to be a trend.

#99 jess on 05.04.13 at 1:03 pm

79 Victor V
power goes to the ability to control water http://archaeology.about.com/od/mterms/qt/moche.htm
and how about through mountain
http://www.reuters.com/article/2013/04/04/us-peru-water-idUSBRE9330QT20130404
http://www.therobbinscompany.com/case-study/olmos/

#100 Onthesidelines on 05.04.13 at 1:04 pm

Showing a margin graph is hilarious. Rising markets always bring rising margin. Smart folks use OPM when assets advance and funds are cheap. — Garth

What’s even more hilarious is what ( according to Canadian Watchdog’s graph #89) seems to happen everytime after the margins get huge.

Care to comment on that, too?

Sure, markets correct and people pay off margin. Is there a point? — Garth

#101 Shawn on 05.04.13 at 1:04 pm

AK at 78 said:

Just remember, the Stock Market is a leading indicator.

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

Well, yes, I think it is irrefutably a leading indicator of where investors on average EXPECT earnings to head. Investors as a group don’t bid up stocks when they expect earnings will fall or interest rates will rise or stocks will fall

BUT

It is not the case that the stock market is necessarily an ACCURATE leading indicator. It tells you what average investors think. It does not tell you whether they are right or not.

Whether stocks are good value depends on a number of variables including mainly: Future earnings, future interest rates and the market price to acquire the market.

At any point in time the market price reflects the consensus estimate of its value.

The consensus is always wrong in one direction or the other.

Most investors will generally be best off to buy and hold the broad index. It has and will rise over decades but certainly will have its down years as well.

Those who think they are smarter than the market consensus (doesn’t everyone?) can try market timing and also individual stock and sector selection.

#102 Victor V on 05.04.13 at 1:04 pm

http://themashcanada.blogspot.ca/2013/05/and-it-went-for_2072.html

Almost a year after first being listed…

And after an almost half a million dollar price drop, this house at 107 Marlborough Avenue in Summerhill has finally sold.

It was first listed at $1,839,000.

Six price drops later, it has finally sold….

For $1,369,000.

#103 CID on 05.04.13 at 1:11 pm

#33 S.M.
Your problem is that you feel alone.
I know it first hand.
Sorry guy, no solution for you, nor me.
Cheers.

#104 Kent on 05.04.13 at 1:11 pm

All this is likely true of large markets. Here in Essex Country, you’ll see a house one day come up in the MLS, and by the next day, its gone. Sold signs everywhere. Reminds me of Victoria before I left (2008).

There are over 700 active listings in Essex County. Market activity YTD is down 4% and the average selling price, including Windsor, is $176,000. How, exactly, is this like Victoria? — Garth

#105 Victor V on 05.04.13 at 1:24 pm

PRICE DROP #12 – 15 Ridgewood Drive – FOREST HILL

http://themashcanada.blogspot.ca/2013/04/price-drop-12-15-ridgewood-drive-forest.html

Price Drop #12!!!!!

I love this listing!

Feb 23 $4,398,888
March 5 $4,397,888
March 12 $4,396,888
March 14 $4,394,888
March 15 $4,393,888
March 16 $4,392,888
March 17 $4,391,888
March 18 $4,388,888
March 28 $4,349,000
April 15 $4,348,000
April 22 $4,299,000

The new price as of today is $4,249,000.

So, after 12 price drops, this house has reduced its original price by a whopping……

$249,888!!!!

I am guessing we have another 36 price drops to go!!!!

#106 Taber Nac on 05.04.13 at 1:26 pm

What do you make of http://www.theglobeandmail.com/report-on-business/economy/housing/foreign-buyers-propel-montreals-luxury-home-market/article11360465/ ? Sounds like million-dollar SFHs in areas such as westmount and outremont are still a fine buy, or would you recommend holding out?

#107 Dr. Hoof - Hearted on 05.04.13 at 1:45 pm

Speaking of not sticking with what you do best.

Has anyone been by the TELUS GARDEN in Vancouver project lately?

Last time I walked by was 10 months ago..just a big hole in the ground. I recall a big stink that claimed it was sold out..it wasn’t..and that they were trying to offer deals to TELUS employees.

#108 Dr. Hoof - Hearted on 05.04.13 at 1:56 pm

#95 Mister Obvious on 05.04.13 at 12:34 pm

Granted, that block of commercial storefronts was in rather poor condition but it was fully tenanted and at least generating some activity.

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

I know a property manager for one of Vancouver’s bigger commercial landlords. The family owns a lot of those older one -storey commercial buildings that are rented out to Ma and Pa small businesses .

He is fair with his rent and has a very low vacancy rate.
He had a lot of issues with the Canada Line and gave his tenants breaks

Yeah, he could probably sell and build hi rises…but he is very well off, isn’t greedy so its a Win -Win for everyone.

Those areas have a lot of old school charm and funkiness…I can’t stand the Hi Rises with ” For Lease” signs that displace them.

#109 FATHER on 05.04.13 at 2:06 pm

WHY DO YOU THINK THE CONSERVATIVES HIRED MR KELLY FOR HOUSING?

#110 Rent or Die on 05.04.13 at 2:28 pm

“A man without land is nobody. Remember that Duddy.” Zeda Kravitz

#111 Ann on 05.04.13 at 2:54 pm

105 Victor V on 05.04.13 at 1:24 pm
PRICE DROP #12 – 15 Ridgewood Drive – FOREST HILL
$4,199,000 For Sale
——————————————————————–PAID ONE MILLION FIVE HUNDRED THOUSAND IN 1995
To bad for him lol

#112 Cowpoke on 05.04.13 at 3:03 pm

Garth! 5918 182st Surrey BC, 1600 sq ft home 3 level split, 60×120 lot, paid $68,000 in 1978, today lot is $400k, average house ‘cost’ to build at $200k. A condo, wood frame, concrete if lucky, at $350 per sq ft is $560k , no land other than what is directly under the condo. Can you ‘estimate’ reduction in life style and enjoyment? Standard of living going ‘down’?

#113 Tom Vu on 05.04.13 at 3:11 pm

Name that building !

http://www2.macleans.ca/2013/05/03/chinese-censors-crack-down-on-jokes-about-phallic-shaped-peoples-daily-building/

#114 Shawn on 05.04.13 at 3:20 pm

VALUE INVESTING IN STOCKS AND HOUSES

The greatest friends of the value investor are all those many fools who in various and sundry ways advise people to buy what others are buying and that the price others pay as of today is the true value of a thing.

A stock (or house) is only worth precisely what someone else will pay for it today they say (earnings and such are irrelevant, they say).

A stock or a house type/location that is rising today will keep doing so.

To all fools who believe such nonsense, thank you. For this distorts markets and allows me to buy things at less than their value.

#115 Tom Vu on 05.04.13 at 3:32 pm

When Canadian snowbirds attack

Canadian investors are buying up so many distressed properties in Phoenix that locals are angry and analysts are warning of a crash

http://www2.macleans.ca/2012/10/03/attack-of-the-snowbirds/

Phoenix was the epicentre of America’s subprime real estate bust, with property values plunging more than 50 per cent during the depths of the recession. Then came the Canadians, enticed by year-round sun and the prospect of brand new bungalows with backyard pools that could be had for less than the average Canadian household income—about $60,000 at the bottom of the market.

Armed with cash, they’ve being coming by the plane load, pushing up prices by 18 per cent in the past year and even squeezing out local buyers for prime real estate. “I love my Canadian buyers,” says Scottsdale real estate agent Diane Watson. “They come down here, they stay three or four days, they look at 10 properties, they buy something, they get on a plane and they go home.”

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

I really don’t like these foreigners doing this…must stop !

#116 lee on 05.04.13 at 3:39 pm

Re: #111 If he had put it in the stock market and gotten 6 per cent a year inclusive of dividend he would have about the same right now except the stock would be generating about $250,000 a year (and favorably taxed) for him before capital growth. Both routes would include living costs be it rent or realty taxes.

#117 Shawn on 05.04.13 at 4:51 pm

IN PRAISE OF BUSINESSES

Many people like to complain about businesses, especially banks.

We’d be nowhere without businesses. Instead of 8 billion on this planet we’d be a few million subsistence farmers and hunter gatherers.

And without banks there’d be no businesses.

All hail banks and businesses!

#118 Tom Vu on 05.04.13 at 5:46 pm

Company offers raises to employees who get tattooed with its logo

http://www.latimes.com/business/money/la-fi-mo-new-york-company-tattoo-20130502,0,2875660.story

A New York real estate company is rewarding employees who make a very personal — and permanent — display of their loyalty to the firm.

The company, Rapid Realty, is offering its employees a 15% pay raise if they get the company’s logo tattooed on their body.

The branding effort began when one employee, acting on his own, got a tattoo showing the firm’s double-R logo, Anthony Lolli, the company’s owner, told WCBS in New York.

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

Not sure good idea….maybe have “Golden Arches” ready as backup.

#119 Devore on 05.04.13 at 6:02 pm

#88 Gunboat Denier

nothing wrong with using a rollng average.

Sure there is nothing wrong with it. But when is the last time you saw a real estate board use a 6 month average for their monthly release?

#120 Loopback on 05.04.13 at 6:50 pm

# 117 “All hail banks”

How naive.
Read this or this

#121 Loopback on 05.04.13 at 7:05 pm

Rich – increased wealth.
Poor – chaotic future.
Economic polarization creates different cognitive maps.

#122 Canadian Watchdog on 05.04.13 at 7:59 pm

Condo pumping Buzz Buzz is working on a new website: http://www.PresaleMatch.com

Now you know why I said MLS data now includes more presales then ever before. Nobody is selling new units out of their sales office anymore, so what was an offline market is now being sold online and amalgamated into MLS resale data.

Canada's RE boards are well aware how this is distorting home stats, yet they do it anyway because they have no accountablity to anyone. They don't care about you, nor does Canada's tribunal system.

Like every country that tried to dictate market prices for power or out of self-interest: what you'll eventually start to see is a huge divergence between what's being reported by the boards compared to reality.
 At that point, everyone will be confused and lose confidence — then the market goes down hard.

Until then, fudged stats it is.

#123 RisingMargin on 05.04.13 at 8:18 pm

Stocks move higher or lower based on the reveneus generated by the active businesses of which the market is comprised, affected by economic prospects.

Revenues? Now that’s funny.

Showing a margin graph is hilarious. Rising markets always bring rising margin. Smart folks use OPM when assets advance and funds are cheap. — Garth

Te price of a stock at any given moment is simply a matter of what a buyer is willing to pay and what a seller is willing to receive at that moment in time. Nothing to do with revenue, forward earings or any other financial catch phrase.

Margins do not always rise on rising markets. In the gold market margins have been raised recently in a fallen market.

Now go figure that one out and report back to us without your short tongued bias Garth.

I referred (as the chart did) to volume of margin outstanding, not margin limits. Duh. — Garth

#124 AK on 05.04.13 at 8:20 pm

#101 Shawn on 05.04.13 at 1:04 pm

“Those who think they are smarter than the market consensus (doesn’t everyone?) can try market timing and also individual stock and sector selection.”
——————————————————————–
They will still try though. When the S&P 500 trades at 14X forward earnings, it doesn’t make any sense to sell.

Bear Markets never start @ PE of 14. And yet we still have these idiots that claim “Sell in May and go away” bullshit works every year.

#125 Victor V on 05.04.13 at 8:27 pm

#111 Ann

They dropped the price again. Now 13 price drops!

Feb 23 $4,398,888
March 5 $4,397,888
March 12 $4,396,888
March 14 $4,394,888
March 15 $4,393,888
March 16 $4,392,888
March 17 $4,391,888
March 18 $4,388,888
March 28 $4,349,000
April 15 $4,348,000
April 22 $4,299,000
April 29 $4,249,000

The new price is….$4,199,000.

http://themashcanada.blogspot.ca/2013/05/price-drop-13-15-ridgewood-drive-forest.html

#126 TurnerNation on 05.04.13 at 9:10 pm

http://news.investors.com/050313-654752-flying-insect-sized-robots.htm

Flying insect-sized robots
Posted 05/03/2013 06:38 PM ET

Flying insect-sized robots may soon be searching rubble from earthquakes or bombings and going on spy missions. Harvard researchers showed off a flying bot smaller than a penny that has tiny wings and hovers and flies like a bee or fly. Sensors and software keep it on track.


(Rustproofing, syringes are extra. Natch. ;-) )

#127 Shawn on 05.04.13 at 9:55 pm

Rising Margin at 123 said:

The price of a stock at any given moment is simply a matter of what a buyer is willing to pay and what a seller is willing to receive at that moment in time. Nothing to do with revenue, forward earnings or any other financial catch phrase.

***************************************
TRUE, the price is the price, but the smartest investors seek to by stocks that are selling below their true value. And Value is highly dependent on future earnings (including growth over time) dividends and and also on market interest rates.

Smart investors make extra money at the expense of dumb traders. But they count of profits from customers of the business for most of their returns.

But everyone can simply hold the index if they want and make money from the customers of the businesses owned.

#128 Tom Vu on 05.04.13 at 9:57 pm

Much congrats to Toronto Maple Syrups for win over Boss Dung Brewinz.

Note: Last Maple Syrup BeauCup win was pre -Trudeau Sr.

Pray for merci beaucoup !

#129 Karl Hungus on 05.04.13 at 10:04 pm

Sorry Garth, no crash in Edmonton. Since you declared the crash was here (March 16, 2011) the average price for houses has gone from $383,000 to $408,000. Nice steady gains. No crash.

“The REALTORS® Association of Edmonton reports that the all-residential price (including single family detached, condominiums, duplexes and row-houses) decreased 1.8% over March to $348,535. Estimated SFD sales of 1,037 units (960 actual) were down 4.4% from last year.” Yeah, sounds just peachy to me. — Garth

#130 Canadian Watchdog on 05.04.13 at 10:23 pm

#127 Shawn

Smart investors make extra money at the expense of dumb traders.

You bet. Which is why banks (smart money) are now loading up on ES shorts while the linear-thinking investor (dumb money)  follows the dividend propaganda into the slaughter house.

#131 Shawn on 05.04.13 at 10:45 pm

Canadian Watchdog at 129 responded to me telling me:

Which is why banks (smart money) are now loading up on ES shorts while the linear-thinking investor (dumb money) follows the dividend propaganda into the slaughter house.

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

I have no idea what an ES short is and have no desire to know.

I do know that the banks I own like Wells Fargo and certainly Canadian Western Bank and Bank of America do little or no proprietary trading.

Most of the time when “banks” or “dealers” are seen shorting they are just doing that on behalf of clients that are making that bet.

Warren Buffett just explained today that he has not shorted anything since the very early days of Berkshire and has no plans to and he has done pretty well and is probably the smartest investor of all time in my opinion.

Stocks rise in the long term. Going long stocks is a winning game, on average, where money flows to investors from customers of businesses. Going short is a losing game on average, where money can ONLY be made by outsmarting others. No customer money flows in.

And, anyhow, why would banks be considered smart money? Most of them proved themselves incredibly stupid in 2008. Some went running to Warren Buffett for a rescue and many needed a government rescue.

#132 AK on 05.04.13 at 11:15 pm

#129 Canadian Watchdog on 05.04.13 at 10:23 pm
#127 Shawn

Smart investors make extra money at the expense of dumb traders.

“You bet. Which is why banks (smart money) are now loading up on ES shorts while the linear-thinking investor (dumb money) follows the dividend propaganda into the slaughter house.”
——————————————————————–
Short positions for Canadian Banks are very small. What’s you point?

Canadian Banks Short Positions

BNS – 5,076,500
TD – 3,932,100
BMO – 4,935,200
CM – 8,998,200

#133 Waiting for the bulb to burst on 05.04.13 at 11:32 pm

I might be seeing things here in North Vancouver but it appears like Real Estate signs have increased the font size on the SOLD signs…

#134 Tom Vu on 05.04.13 at 11:57 pm

Low volume of posts 2 day.

(Like Stoquewell Day market)

Volume is approx. 50% down YOY or Day over Stockwell Day.

Is this a Biblical prophecy…..(or Maple Syrup Phanz buying beer for Garth ? ).

Who is designated Harley Driver?…know way to Bunker ? ..Amazons on alert?

#135 Tony on 05.05.13 at 12:32 am

This one seems to be trading far, far below market value for both the buyer and seller. Since the wave of the future will be auctions knowing in due time the worldwide recession/depression will grow deeper with time.

http://www.stockhouse.com/companies/overview/v.ha

#136 Devore on 05.05.13 at 5:20 am

#111 Ann

PAID ONE MILLION FIVE HUNDRED THOUSAND IN 1995
To bad for him lol

Seems like a huge gain, but over 20 years, not so much.

The place looks brand new. Wonder how much construction cost.

Gotta love the “loling” idiots. Don’t they teach you kids English in school anymore?

#137 MB on 05.05.13 at 6:38 am

Pizza delivery guys make a ton of cash!!! That Vancouver realtor only wishes s/he was a pizza guy :)

#138 Riveted on 05.05.13 at 6:45 am

An interesting take on the resurgence in US housing market:

http://www.counterpunch.org/2013/05/03/the-housing-shell-game-prices-up-ownership-down/

#139 Herb on 05.05.13 at 7:31 am

#133 Tom Vu,

low volume yesterday could be because SM is in a snit after he got smacked at #64.

Even his alter ego is struck dumb.

#140 Smoking man on 05.05.13 at 8:49 am

139 Herb on 05.05.13 at 7:31 am#
133 Tom Vu,low volume yesterday could be because SM is in a snit after he got smacked at #64.Even his alter ego is struck dumb.

Or perhaps everyone going to open houses now that the dandelions are out..

Late start to spring market….

Or in my case getting our boats ready

#141 AK on 05.05.13 at 9:04 am

#135 Tony on 05.05.13 at 12:32 am
“This one seems to be trading far, far below market value for both the buyer and seller. Since the wave of the future will be auctions knowing in due time the worldwide recession/depression will grow deeper with time.”
——————————————————————-
Hey Tony,

Have you been drinking that cheap home made wine again? :-)

#142 Al on 05.05.13 at 9:31 am

Listed Homes are not selling in Thornhill – this is depressing !

#143 Eaglebay - Parksville - Victoria on 05.05.13 at 9:40 am

#96 Tyler on 05.04.13 at 12:34 pm
“I am astonished at the lack of regulations surrounding home ownership. Government won’t bite the hand that feeds I guess.”

The government has no business in people’s lives or free enterprise.
Educate yourself and get off the socialist gravy train.
People make their own decisions.

#144 Tony on 05.05.13 at 10:09 am

Re: #141 AK on 05.05.13 at 9:04 am

Did you just crawl out of a cave? Don’t you watch television of read newspapers? The world is in the worst mess ever on record and it’s getting worst day by day. Bankruptcies, foreclosures and auctions are on the rise. Canada is one of the last countries to fall and getting a piece of an auction company is how to profit.

#145 AK on 05.05.13 at 10:52 am

A possible short squeeze?

Boyd Gaming Corporation(BYD) $ 12.91

Short Interest (Shares Short)…… 18,464,300
Short Percent of Float……………….. 37.84 %
Short Interest Prior………………….. 18,214,600
Short % Increase / Decrease……. 1.37

% From 52-Wk High ($ 12.98 ) -0.54%
% From 52-Wk Low ($ 4.75 ) 171.79%
% From 200-Day MA ($ 6.85 ) 88.56%
% From 50-Day MA ($ 8.26 ) 56.37%
Price % Change (52-Week) 77.82%

Shares Float…………………………. 48,790,000
% Owned by Insiders……………. 35.75%
% Owned by Institutions………. 60.00%

#146 Canadian Watchdog on 05.05.13 at 10:59 am

#131 Shawn

I do know that the banks I own like Wells Fargo and certainly Canadian Western Bank and Bank of America do little or no proprietary trading.

Do you know what counter-party risk is? Contingent liabilities?

Warren Buffett just explained today that he has not shorted anything since the very early days of Berkshire and has no plans to and he has done pretty well and is probably the smartest investor of all time in my opinion.

Berkshire Profit Climbs 51% on Insurance, Derivatives

Last quarter was 49% with most profits earned on derivatives. Do you trade derivatives?

Watch what they do, not what they say.

#132 AK

Short positions for Canadian Banks are very small. What’s you point?

Learn what a COT report is.

#147 AK on 05.05.13 at 11:04 am

Buffett: ‘Shot Heard Around the World’ Coming

Buffett: – the world won’t end

#148 Form Man on 05.05.13 at 11:19 am

#143 eagleboy

If the government is going to use our tax dollars to insure mortgages, we ( the taxpayers ) have a right to insist on some regulations . Can’t have it both ways.

There is ample evidence that enforcement of banking regulations in the U.S. would have likely averted the Great Financial crisis of 2008.

Burying your head in the sand like a typical Harperite again there, eagleboy……..

#149 Smartalox on 05.05.13 at 11:23 am

So I finally figured out why Garth has such contempt for Kia brand car owners :

http://www.autoblog.com/2013/05/04/top-ten-cars-bought-by-people-who-probably-cant-afford-a-car/

#150 Mr Buyer on 05.05.13 at 11:29 am

I cant take it anymore, im buying. Toronto prices were up 2% this year. A minority says that the prices will fall, and they have been saying that for years now.

Its just not happening. There is talk about central banks purchasing equities directly now with expanded balance sheet money (instead of raising the price indirectly though bond purchases and the resulting low interest rates). There is no end to what the central banks will do to preserve the status quo.

#151 Realtors are in an all out panic on 05.05.13 at 11:34 am

Victor V on 05.04.13 at 12:52 pm
http://themashcanada.blogspot.ca/2013/04/relisted-94-macpherson-avenue-summerhill.html

WHAT is going on here!?!

This house was listed at the end of January for $1,200,000.

I thought it was a good house if you were up for a project but that the price was probably a little high. I thought a price closer to $995,000….maybe $1,050,000 made more sense.

This house sold a few days later for $1,110,000.

But now……..2 months later………it’s on the market again!!!!

For $1,150,000!!!

Did the deal fall through? This is getting to be a trend.
—————————————————————–

I can not count the number of houses that sold???? and then a month or two later is back on the market for sale. I would say 30% of the houses are counted twice by realtors in their fudged sales numbers. There is a PANIC in the RE industry as they are seeing the housing crash first hand. All one has to do is ask the hungry for money out of work realtors who post on garth blog. Of course they will tell you it’s a hot market and yet they are here posting. LOL

#152 Form Man on 05.05.13 at 11:53 am

April stats for Kelowna ( courtesy of OMREB )

year month total sales total listings MOI

2013 april 406 4530 11.15
2012 ” 341 4945 14.50
2011 ” 298 4846 16.42
2010 ” 404 5327 13.18
2009 ” 318 5305 16.68
2008 ” 476 4311 9.05
2007 ” 659 2972 4.50
2006 ” 507 2366 4.66
2005 ” 596 2268 3.80
2004 ” 514 2298 4.47
2003 ” 481 2535 5.27
2002 ” 526 2795 5.31

while the market is improving here, we have a ways to go before we reach balance and prices stop falling…………

#153 TurnerNation on 05.05.13 at 11:55 am

#122 Canadian Watchdog – you may remember the vacuous ‘Toronto Life’ mag profiling a desperate group of couples, including Buzz’s owner buying a large old semi in a so-so area – West end. I’d expect bias now.

#154 TurnerNation on 05.05.13 at 11:59 am

Yes let’s shutter the banks and their Banksters! Put ‘em out of business.
First, pay off all your loans, HELOCs, Credit cards, car loans, mortgages, mmmkay?

I’ll get right on it…

#155 Craig on 05.05.13 at 12:29 pm

“Conceding the Fed’s buying program is a “huge experiment,” Buffett said, “This is like watching a good movie, and I do not know the end.”

Does anyone seriously think all the Fed’s around the world, buying $$Billions in Equity stocks, is going to end well?

YA think it might explain record highs in the market and record debt.

They have no business artificially supporting a “free” stock market. When you can just print as much money as you need to continue buying as many shares as you like.

Is this not insane??

I am not a gold bug at all but you know what, I am going to start picking away at a few gold and silver companies. This is not going to end well…

I could see a Gov’t moving in to support a market that is crashing…in total free fall, then gradually selling over the next year or two when things stabilize. But buying when markets are setting all time record highs, with fabricated funds….yikes!

#156 AK on 05.05.13 at 12:37 pm

#146 Canadian Watchdog on 05.05.13 at 10:59 am

#132 AK

“Learn what a COT report is.”
——————————————————————–
Anybody who has the balls to short a Canadian Bank, I wish them luck. :-)

#157 canadian on 05.05.13 at 1:26 pm

As soon as the U.S stop’s Q.E ,the stock market will crash ,because the there aren’t enough individual investor’s to keep the pyramid growing.Maybe everybody can just work for the Government.

A uniformed comment. — Garth

#158 Future Expatriate on 05.05.13 at 1:58 pm

Even when markets finally “turn around”, its ugly and only for the rich. For a long time.

Flipping In Vegas Still Lucrative

Be sure to read the comments.

#159 Shawn on 05.05.13 at 2:09 pm

BUFFETT Berkshire profits and derivatives

Canadian Watchdog at 146 said:

Berkshire Profit Climbs 51% on Insurance, Derivatives

Last quarter was 49% with most profits earned on derivatives. Do you trade derivatives?

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

No, I don’t trade derivatives. Neither does Buffett very much unless you call writing a put and holding it to its 15 year maturity “trading”. He also wrote some credit default products that he held to maturity and made money on.

Berkshire Q1 profit.

$4.9 billion, of which $0.9 was insurance profits, $0.8 interest and dividend income, $0.8 railroad (Burlington Northern) , $0.4 utilities and energy (Mid American). Manufacturing service and retail was $0.9, Finance and financial products $0.1
Equity derivative puts (derivatives) gained $0.8 other capital gains losses in income were $0.3

Buffett and most headlines key on the increase in operating earnings (sans derivatives and gains on sales) That increase was 42%.

Much of the increase from insurance? Not a surprise as that is the largest operation.

Buffett’s derivatives are bets that the stock markets would not fall over various periods of about 10 to 15 years. He was paid a premium of over $3 billion up front. There is no counterparty risk to Berkshire. The possible loss is capped and would occur if the stock indexes fell to zero. Berkshire could fund that loss (which will never happen) with cash on hand.

In 2008 Buffett was in a mark to market loss on these derivative contracts (equity puts). Today he is in the black. Ultimately there is a high probability that Buffett will never have to pay out anything and will keep the $3 billion or so premium received and all the money made on it by investing the premium for many years

Anyone who thinks Buffet made a mistake on these or took an untoward risk has simply not stopped to learn about Buffett and his track record and approach and his intelligence.

Berkshire shares are up over 1 million percent since he took over in 1965. From the $15 range to the $160,000 range. Book value per share was up 587,000% at year end 2012 compared to year end 1964. At what point is the man owed the benefit of the doubt?

To be a winner work with winners and learn from winners.

#160 Shawn on 05.05.13 at 2:16 pm

FED DOES NOT BUY STOCKS:

Craig at 155 said:
Does anyone seriously think all the Fed’s around the world, buying $$Billions in Equity stocks, is going to end well?

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

Craig you are dooming on misinformation. The Fed does not buy stocks.

The Fed buy bonds which pushes interest rates down which pushes up the value of all long-term financial assets including stocks.

The printed money doe not go “into” stocks put the low interest rates simply mean that a dollar of earnings to be received in “X” years has a higher present value today, hence stocks rise, all else equal.

End badly… well the low interest rates will end, pulling stocks down (all else equal) but hopefully higher earnings counteract that .

The world will not end.

Invest carefully but do invest. Do not read doomer sites. Life is full of opportunities, stop the dooming.

#161 Victor V on 05.05.13 at 2:23 pm

http://business.financialpost.com/2013/05/03/canadian-housing-bursting-bubble-or-gentle-landing/?__lsa=98d1-fd4b

Yale economist Robert Shiller, one of the few to predict the U.S. housing crash, sees the same thing happening in Canada — just in slow motion.

To Shiller, whose Case-Shiller Home Price Index is widely recognized as the best measure of U.S. house prices, the parallel between the U.S. bubble and Canada’s run-up in home prices measured by the Teranet index is obvious.

“I just plot. I plot the Vancouver Teranet index with my own San Francisco index. It looks the same. Vancouver is no tamer than San Francisco, and San Francisco is one of our bubbliest cities,” said Shiller, who looks at psychology as much as data to draw his pessimistic conclusions.

#162 AK on 05.05.13 at 2:34 pm

#144 Tony on 05.05.13 at 10:09 am
Re: #141 AK on 05.05.13 at 9:04 am
Did you just crawl out of a cave? Don’t you watch television of read newspapers?
——————————————————————–
Hey Tony,

I confess. I read The Star. :-)

#163 AK on 05.05.13 at 2:38 pm

#155 Craig on 05.05.13 at 12:29 pm

“Does anyone seriously think all the Fed’s around the world, buying $$Billions in Equity stocks, is going to end well?”

——————————————————————–
Okay. Where did you read this?

Doug Casey, Roubini, Faber, Schiff?

#164 Shawn on 05.05.13 at 2:55 pm

Rules for Investing and thinking about the Economy

Rule Number 1 : Always assume that Warren Buffett is correct.

Rule Number 2: Don’t forget rule number 1.

#165 Dr. Hoof - Hearted on 05.05.13 at 3:01 pm

Snowbird Vultures

http://www2.macleans.ca/2012/10/03/attack-of-the-snowbirds/

The activity has been most frenzied at the courthouse auctions for bank-owned foreclosures. Investors, including hedge funds but also plenty of individual Canadian buyers, have been bidding up foreclosed properties to prices even beyond what neighbouring properties sell for on the open market.

“It’s kind of alarming when investors are paying, in some cases, more than anything that’s been on the Multiple Listing Service and the stuff on the MLS is not distressed,” says Lynda Person, a Scottsdale real estate agent who buys properties at auction and flips them.

Even as more investors pile into the market for distressed homes, the number of foreclosures up for auction is dwindling as banks hang onto their inventory in hopes of pushing prices up still more, says Barry.

A study last month from DataQuick found that lenders were holding on to around 11,000 foreclosed properties in the Phoenix area. That number doesn’t include the roughly half of Phoenix homeowners who are still underwater on their mortgages, Barry says—well above the national average of 30 per cent. “A lot of those people probably will walk away at some point,” he says. That could send Phoenix property values plunging once more, Barry warns.

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

Dead Cat Bounce ?

These paragraphs alluded to what many of us have suspected/predicted.

A rise…a collapse..non resident vultures….create another bubble….lots of shadow inventory that could flood the market at any moment = bad sign

#166 FATHER on 05.05.13 at 3:18 pm

HAVE YOU NOTICED THE MEDIA DID NOT MAKE THE ALBERTA COUNCILLORS A BIG STORY

#167 TurnerNation on 05.05.13 at 3:22 pm

Food delivery drivers in T.O. are paid a servers wage: $6.50/hr plus tips. I imagine they pay their car expenses too. Hardly money.

Shining day here in the GTA (Garth Turner Area). Or is that ebulance due to the Maple Laff’s win.

#168 AK on 05.05.13 at 3:27 pm

#158 Future Expatriate on 05.05.13 at 1:58 pm
“Even when markets finally “turn around”, its ugly and only for the rich. For a long time.

Flipping In Vegas Still Lucrative

Be sure to read the comments.”
——————————————————————–
You can play the U.S. Real Estate Market through BPY.UN. You don’t need to be rich.

#169 willworkforpickles on 05.05.13 at 3:28 pm

China is in the process of creating a rival world reserve currency to the American dollar. Europe is going to do likewise. When the panic around the world to dump US dollars really kicks in – downgrading and kicking the current world reserve currency off it’s pedestal in it’s wake, interest rates over here will skyrocket to pay national debt loads…. and gold, counter to the current normal inverse relationship the two have with each other will skyrocket in price at the same time right along with interest rates.
If you are waiting for a big decline in real estate in NA ….then watch for this looming tsunami and it’s disastrous outcome.

Actually the US$ will gather considerably more strength over the next few years. For your entire life it will be the global reserve currency. Worry about your weight, instead. — Garth

#170 Montrealtoquebec on 05.05.13 at 3:30 pm

# 106, in NDG they are building a super hospital, so the prices in Westmount and NDG will only keep rising.

#171 Pulp Faction (Dorf) on 05.05.13 at 3:34 pm

Let’s take both sides of the real-estate debate from an academic standpoint:

Side 1 (Garth Turner and a select few others): The argument is intelligently and clearly set out and supported by numerous, easily-accessible, and reliable sources.

The message is clearly, “Not a time to buy”.

Side 2 (Realtors, Mortgage Brokers, MSM, other delusionals): The argument is much less academic, more emotional, and flavored with “catch phrases and pumping”. There are little to no reliable sources to support their claims, only melodramatic pontification built around dreamy images that do not exist in reality, more like a TV commercial, about buying a sports car and thereby laying supermodels.

The message is clearly, “Buy, Buy, Buy”

Now what does it say about our population, that in spite of good, solid, intelligent, well-supported arguments that are academically correct and reasonably sensible even if you do not happen to agree, most people find the second argument more compelling.

“Buy, Buy, Buy”….OK, that’s all I needed to hear.
I just needed someone else to tell me I’m not stupid.
NOW I can do it.

#172 FATHER on 05.05.13 at 3:46 pm

BUYING IN THE US MAKES PERFECT SENSE IN THE MATTER OF BUYING AND RENTING AND HAVING A GOOD INVESTMENT THAT WILL GROW IN VALUE

Why do you keep yelling? — Garth

#173 FATHER on 05.05.13 at 3:58 pm

WITH 3 KID’S 1Y 4Y 7Y IT KINDA GETTS TO BECOME HABBIT FORMING sorry

#174 FATHER on 05.05.13 at 4:00 pm

33 foot lots new constuction van. 1.3 give me a break

#175 Craig on 05.05.13 at 4:09 pm

Shawn and ak, maybe you should get YOUR facts straight before mouthing off.

I heard it from the pump and dump artist Warren Buffett. You know that dummy that knows nothing about markets, especially when compared to you two wizards.

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

‘SHOT HEARD AROUND THE WORLD’

In response to a question on the Federal Reserve’s massive quantitative easing program, Buffett said it will be “the shot heard around the world” when the central bank first indicates it will stop buying financial assets or start selling from their now enormous $3.4 trillion balance sheet. “we’re in uncharted territory … that’s a lot of securities.”

Because that liquidity has been supporting stock prices, people in the market will immediately reevaluate their positions.

Even so, he said, “the world won’t end” and the market will survive. He repeated his long-held “faith” in Fed chief Ben Bernanke and said “we have benefited significantly, and the country has benefited significantly” by the Fed’s actions.

Conceding the Fed’s buying program is a “huge experiment,” Buffett said, “This is like watching a good movie, and I do not know the end.”

http://finance.yahoo.com/news/buffett-shot-heard-around-world-145802594.html

#176 skooby doo on 05.05.13 at 4:14 pm

Actually the US$ will gather considerably more strength over the next few years. For your entire life it will be the global reserve currency. Worry about your weight, instead. — Garth
—————————————————–
Yeah, more strength compared to the Japanese yen.

The dollar is on unsustainable path and the dollar will not be sustained.

It is already starting to lose its reserve currency status.

Completely untrue. — Garth

#177 Flummoxed on 05.05.13 at 5:16 pm

“For your entire life it will be the global reserve currency”

Thats an interesting prediction.

Can you explain why the UK
France
Australia
Brazil
Argentina
Indonesia
India
Iran
UAE
Belarus
Hong Kong
South Korea
Russia
Japan
Malaysia
Venezuela
Syria
Cuba
Turkey
Dubai

trade in Yuan or bypass via bartering.

Ya know, petro dollars aren’t as popular as they us to be

The only possible solution I can see to verify your statement is, for the US do what it always has done in the past.

Try to eliminate your competion….

US Defense Secretary Chuck Hagel told a Pentagon press conference yesterday that Washington is “rethinking” policy on directly arming the Syrian rebels.

“Arming the rebels; that’s an option,” Hagel said. Asked directly whether Washington is considering taking this step, he replied: “Yes.” Hagel is the first Obama administration official to publicly acknowledge that the US is considering directly arming the Syrian rebels who are seeking to oust the Assad regime.

http://www.majalla.com/eng/2013/05/article55241124

#178 Shawn on 05.05.13 at 5:23 pm

Craig at 174 accuses me of getting facts wrong but does not mention what facts or where the contrary evidence is.

Yes Craig, the Fed has bought debt securities and this indirectly pushed up stock prices by lowering interest rates.

Yes that will reverse when the Fed stops buying bonds or sells them.

My facts were in complete agreement with Buffett’s statement.

To call Buffett pump and dump is absurd. He mostly buys for keeps. He is a paragon of virtue.

Anyhow I should not even bother responding. Most people’s opinions don’t depend on facts anyhow. It’s all about emotions.