Open for offers

DIVORCE

We’ll let blog dog Linda start today’s offering. “You want realtor porn?” she emailed me. “Well I have some for you.

“I was surfing the movies on my Telus OnDemand and I came across a XXX movie called “Hot Property Hos”.  Summary:  ‘Some girls are willing to do anything for a sale!  The hot agents at Pearl Realty soon learn that the more they open their legs the more sales they close.’

“Is art imitating life or is life soon to imitate art?  I laughed so hard that I wanted to share it on your blog, but I don’t want your underage fans to see this (and I know you have a few).”

Too late now, Linda. And don’t worry about the kids. Four hundred moldy renters just Googled ‘Pearl Realty.’

* * *

Speaking of delusional people, a recent BMO survey found a third of all first-time homebuyers expect mortgage rates to be exactly what they are now in 2018. That’s amusing, of course, after what happened in June – when merely the expectation of less US central bank stimulus spending blew up the bond market and goosed five-year mortgages three times. More of that’s coming, along with repeated increases in Bank of Canada rates over the coming years.

The big worry F & the Peckerettes have is that legions of people who bought with 5% down in the past three years will be completely unprepared for the return of normal rates. This worries the mortgage brokers, too. In fact the industry’s online journal, Canadian Mortgage Trends, has published a mortgage stress test calculator that clients can use to see how screwed they might be as 3% mortgage rates go the way of Mike Duffy or Pamela Wallin.

Meanwhile the brokers are offering a few tips for minimizing payment shock. Included is the obvious strategy of locking into a five or 10-year fixed-rate mortgage now, while they’re still relatively cheap. You can also increase monthly payments slightly, for a big positive impact down the road. For example, hiking them by just 2% a year pays off a mortgage eight years sooner. Weekly payments have a similar impact. By paying weekly instead of monthly you make the equivalent of one extra payment a year, and hack years off the pay-back time.

More dubious choices include locking into the longest amortization possible (you can still get 35-years on a non-insured mortgage), but making monthly payments based on a shorter am. So, if you have a variable mortgage and rates balloon, there’s wiggle room. Or, you can trigger one of those idiotic take-a-payment-holiday schemes some of the banks offer. That has the same effect as lengthening your am – but remember each missed payment is added to your principal amount and itself amortized, which means you get to pay it back at least twice.

The best strategy, of course, is to sell your real estate when prices are still high and rates low, then buy in again when rates increase and houses are cheaper. If you don’t think that will ever happen, you must live in Calgary. We will light a candle for you.

By the way, you can find the mortgage stress test calculator here.

*  * *

Remember two years ago when this pathetic blog yammered away about investing in US real estate? At the time the usual America haters, doomers and metalheads swarmed on to say southern properties would collapse further in value along with the country itself, and I’m full of crap. I may be. But I was also right.

The price of resale houses across the States is rising now 1% a month on average. Yes, valuations are still 20% below those of 2005, but that’s a big hike from the bottom (negative 32%). Some markets, especially in the Northeast, are being rocked by bidding wars and soaring offers as the economy clearly rebounds.

The latest news is about new houses. While sales of new-builds have collapsed 40% in Toronto, for example, they jumped 8.3% last month across the US to the highest level since 2008. Yes, they’re still running below levels of five years ago, but they’ve swelled 38% in the past year, while prices are up 7.4%.

The average price for a brand-new SFH in America is now $249,000. In the GTA it’s $644,427.

Three guesses why we have the lowest sales on record.

213 comments ↓

#1 Uwinsome on 07.26.13 at 5:18 pm

I hate to go first

#2 JRH on 07.26.13 at 5:28 pm

Good post Garth !

#3 From Mississauga with Love on 07.26.13 at 5:29 pm

How is paying weekly shaving a decade off your amortization schedule? RBC’s mortgage calculator says it brings it down from 25 to 22.2 years..

Get the right kind of weekly-pay. — Garth

#4 POD on 07.26.13 at 5:30 pm

I’ve been waiting to buy a house for 4 years, and I’ve now run out of patience. This crash will never happen. Wish I had never come across this blog, it cost me hundreds of thousands of dollars.

I’m meeting an agent next week to start looking aroung.

Yes, blame it on a blog. That’s manly. — Garth

#5 Mike on 07.26.13 at 5:33 pm

Well, I have to admit, so far your call of purchasing US RE that you made a couple of years ago was band on. I don’t think that the Fat Lady has sung yet … but so far so good, we’ll see what comes next :)

#6 Mr Happy on 07.26.13 at 5:36 pm

Realtor porn……wow……

#7 Smartalox on 07.26.13 at 5:42 pm

Another fun game that you can play with the mortgage calculator is to see how much the amount borrowed has to come down, in order to keep payments affordable once rates go up.

This helps buyers figure out future prices for properties: figure out what payments you can afford when interest rates are at 8%, then make an offer at that price.

#8 OneCanadian on 07.26.13 at 5:46 pm

Guess a) lop sided consumption oriented economy, b) income inequality and c) very low awareness on how to make the best of ones resources from finances to time to “education” to…… Wait, this list can go on for quite some time, let me rest my case for now. Great reads Mr. Turner, keep up the good work!

#9 Calagary Girl on 07.26.13 at 5:52 pm

I am in Calgary, and your are right Mr. Turner!
Nobody I talked to believe there is a corretion to come and the only response i get is: it is only going to go much higher from here! I also subscribed to the Home Price Index which kind of confirmed that they are right! The index is not too far below the peak in 2007. I so wish that you are right and all the wait is not in vain…

#10 Donald Trump on 07.26.13 at 5:57 pm

Hey hay hai

The numero uno

#11 Andrewski on 07.26.13 at 5:59 pm

A family member lives in northern California, his business is booming, and he was able to buy land with the finished building on it for less than half assessed value. One man’s loss, is another’s gain.
Happy birthday to Mick Jagger, how the hell did he make it to 70?!

#12 marc the parc on 07.26.13 at 6:02 pm

ok i will like to see how those americans will pay theirv
debts when rates rise as you say. no way based on the lack of
quality in the jobs being created. higher rates will also kill whatever exports we now sell. what u dont ger is that an
economy .based on debt must fall and next time it will fall harder
we are living in complete artificial times with debts that no one
can ever pay. the only safe place is somethong real like gold and silver

Wrong again. — Garth

#13 Iconoclast on 07.26.13 at 6:10 pm

I don’t know what anyone has against the ‘first’ers.
It’s kind of stupid, like jumping up and down behind a news reporter for attention, but it’s not harmful.

Oh, and Garth, you might want to check out more recent housing stats. With a tiny rate increase, the US homebuilders are bellyaching about the instant collapse in sales.

According to Z-hedge, anyway. All I know is that noone is to be trusted.

That, and “Never get out of the boat”
http://www.youtube.com/watch?v=4LXJedf0_hw

Those are the latest numbers. The zero guy has been wrong day after day. — Garth

#14 Mark on 07.26.13 at 6:28 pm

Hi Garth, with so many factors that could effect the whole market and be hard to tell. However, when do you feel we will see the first decline in prices for the GTA.
Thank you

#15 brunette on 07.26.13 at 6:35 pm

I can’t find that movie for the life of me, shaw doesn’t have it. I think she made it up. a disappointed brunette…

#16 T.O. Bubble Boy on 07.26.13 at 7:07 pm

Here’s a shocker – the ironically named Conservatives are still bleeding dollars on the budget every month:
http://www.theglobeandmail.com/news/politics/federal-deficit-balloons-in-april-and-may-complicating-tory-budget-balance-promise/article13452259/

(maybe “Conservative” refers to their style of dress?)

#17 Tony on 07.26.13 at 7:25 pm

Re: #9 Calagary Girl on 07.26.13 at 5:52 pm

Edmonton real estate hit a “brick wall” where no matter how low you price it or how much you reduce it you’ll never ever get any offers at all. I can’t see Edmonton and Calgary diverge so Calgary is due for a massive correction or no sales at all like Edmonton.

#18 Tony on 07.26.13 at 7:32 pm

Re: #14 Iconoclast on 07.26.13 at 6:10 pm

You’ll know it’s all over for American real estate when all the celebrities put their homes up for sale.

#19 TO and GTA Sales and Stats -July 26 on 07.26.13 at 7:56 pm

http://recharts.blogspot.ca/2013/07/416-and-905-condo-sales-and-stats-july_26.html
http://recharts.blogspot.ca/2013/07/416-and-905-sfh-sales-and-stats-july-26.html
http://recharts.blogspot.ca/2013/07/416-sfh-sales-and-stats-july-26.html

#20 punnoval on 07.26.13 at 7:58 pm

Dear Mr. T.

Maybe you should do some edit check on your blog before “publishing.” If you use the handy-dandy calculator on stress test, you will find that you need a 25% increase in payment (not 2%) to reduce your number of payments from 300 (25 years) to 204 (17 years.)

Check out CMT. The brokers speak. — Garth

#21 Daisy Mae on 07.26.13 at 8:02 pm

“…I’m full of crap. I may be. But I was also right.”

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

Garth, you can’t possibly be both. Either you’re full of crap…or you’re right.

I think you’re right. You’re welcome…. ;-)

#22 Calgary Mark on 07.26.13 at 8:09 pm

Hey Garth,

Great website, love your writing style!

I really dont think increasing payments by just 2% takes 8 years off a mortgage. If so, then does increasing payments by 10% take 40 years off a mortgae? I quickly ran some numbers in a mortgage calculator and it doesnt add up to more than a couple months.

I also agree with the poster above saying weekly payments only takes a few years off.

Cheers for doing a great job though and using your time to inform us uneducated punks.

Increase 2 per cent annually, of course. As for weekly-pay divide a monthly by four, then make 52 of them. Try again cowboy. — Garth

#23 Daisy Mae on 07.26.13 at 8:21 pm

14 Iconoclast: “I don’t know what anyone has against the ‘first’ers. It’s kind of stupid, like jumping up and down behind a news reporter for attention, but it’s not harmful.”

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

No, it’s not harmful. No one said it was. It’s just stupid, ignorant, childish…and wastes our time. Okay?

#24 AK on 07.26.13 at 8:36 pm

Some hope for the Gold Bugs.

Gold is flashing a secret buy sign

#25 timmy on 07.26.13 at 8:42 pm

You may have been right about US real estate, but so far, for the past four years, you have been wrong about Canadian real estate.

Read yesterday’s post. — Garth

#26 devore on 07.26.13 at 8:59 pm

#3⁠ From Mississauga with Love

Depends on how your interest is accrued. If it is monthly, making weekly payments is just free money for the bank. You need a mortgage that has interest calculated weekly. There is still benefit even if it isn’t, but not as much.

Exactly. Anyone who thinks that making the same payments annually in 52 pieces as they did in 12 pieces will have an effect is not paying attention. — Garth

#27 Buy? Curious? on 07.26.13 at 9:08 pm

Hey Garth, are you blogging about the apocalypse?

DELETED

#28 DaleFromCalgary on 07.26.13 at 9:08 pm

Today’s headlines in Calgary trumpet the recent census results that Cowtown’s population has increased this past year to 1.15 million people. The flood is icing on the cake by destroying some of the houses.

I have young family members who had to rent in Airdrie (before the flood) because there is no decent affordable housing in this city for families. Yes, if you’re single or DINKs you can find lots of places here, but if you are towing kids around it is a different story. No one wants to raise their kids in combat zones like Temple or Penbrooke Meadows (where even gang members only go in pairs). That is what is fueling the housing market here; people who have to buy particleboard shacks in Cranston or Copperfield because they have kids and can’t find a decent rental.

#29 James on 07.26.13 at 9:25 pm

The US market is now rolling over. I suggest you look at Mark Hanson’s blog,

I do. And disagree. More of the ‘informed’ opinion which has been consistently wrong. The US housing market is not rolling over, no matter how hard guys like Hanson wish it were otherwise, for commercial reasons. — Garth

#30 Smoking Man on 07.26.13 at 9:25 pm

DELETED

#31 George on 07.26.13 at 9:28 pm

By choosing to halt QE, on the other hand, Bernanke would reveal how weak the financial system is just as much. The slight rise in available credit that has allowed Americans to add yet more debt towards home and automobile purchases, giving the economy a fleetingly rosy glow in the process, would be over in a heartbeat.

http://theautomaticearth.com/Finance/what-ben-bernanke-is-really-saying.html

#32 CantRememberMyName on 07.26.13 at 9:35 pm

IMHO, I say BoC starts raising interest in 2016. This allows the suckers of 2010 and 2011 to renew once and then see how things are 5 years down the road. The markets will have their say otherwise but the BOC stays put.

It will, of course, be sooner. — Garth

#33 Smoking Man on 07.26.13 at 9:42 pm

Deleted, lol

What is wrong with you garth, OK story two…

DELETED

#34 gladiator on 07.26.13 at 9:51 pm

Garth, why compare average home price in America with average home price in GTA?
Maybe it should be average American home vs. average Canadian home? This would be a more apples-to-apples comparison.

#35 CantRememberMyName on 07.26.13 at 9:52 pm

It will, of course, be sooner. — Garth
————————
I don’t think any Govt will let them sink. Too costly in other areas. If the majority of people are screwed due to their own stupidity the Govt will have to “bail” them out. I wanna see them drown as well but I don’t see it happening. Humanity and all. F’in sucks.

#36 espressobob on 07.26.13 at 9:54 pm

#25 AK

Buy signal on gold. It’s halarious how the analysts work their theories on that one? Problem is retail investors get sucked into that trap. It never ceases to amaze!

#37 CantRememberMyName on 07.26.13 at 10:01 pm

#25… Gold will be worth $5000 100 years from now. If you have reproduced, do them the favour… The World isn’t now. It didn’t start with your birth. It will live long after your passing.

#38 CantRememberMyName on 07.26.13 at 10:05 pm

I’m feeling something today… I want everyone to be happy. Today, night, let no one be unhappy. \send out good vibes to yourself and everyone around you. \including all the people on this blog… \no contradictions today. \support one and all. must be the Rum.

#39 Fleabitten Monkeya on 07.26.13 at 10:10 pm

Hey Garth,
What is the latest on the big banks perhaps ending the 30 and 35 yr non-insured mortgages? Is this still a potential?

#40 will on 07.26.13 at 10:16 pm

To: #17 T.O. Bubble Boy

Yup. The Party is Conservative in name only.

#41 OK Kingpin on 07.26.13 at 10:18 pm

Things are getting closer and closer to the tipping point here… the key fundamentals are all missing now for anything that resembles a healthy market. You have written about bonds and mortgage rates in the past Garth, but not enough people understand the correlation still!

http://mayer320.wordpress.com/2013/06/27/bond-markets-mortgages-and-why-you-should-care/

#42 tkid on 07.26.13 at 10:33 pm

No no no no no! Put the original photograph back! It was funny!

#43 Notta Sheeple on 07.26.13 at 10:41 pm

“…..The price of resale houses across the States is rising now 1% a month on average….”
=======================

Let me get this straight.

The cost of housing, which is practically every American’s largest single family expense, is increasing at about five times the target rate of inflation, and this is something to celebrate?

Didn’t we see this movie before?

What is this, Ho’s on Homes, the sequel?

The inevitable rebound from the middle class-destroying housing crash. — Garth

#44 Donald Trump on 07.26.13 at 10:41 pm

yeah..

So mo -kink man.

Perma DELETED..

Koa=l-t -tee con troll

#45 Marginal on 07.26.13 at 10:48 pm

#33, #36 CantRememberMyName
You raise an interesting point. Why do you believe BOC interest rate will not increase until 2016 at the earliest? Why not 2015 or earlier? Do you have some insider (PMO) knowledge you would like to share?
After visiting the CRA website today and seeing nothing on the first page but the new minister’s photo and political press releases and public relations bumpf I’m starting to get seriously concerned about whether or not arms-length means anything anymore.

#46 Timing is Everything on 07.26.13 at 10:50 pm

#33 CantRememberMyName

The next Canadian federal election is scheduled on Monday October 19, 2015. I don’t expect the BoC rate to change much for a while yet.
——————————————-
‘The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit…’

Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.’

http://tinyurl.com/jwknrda
http://tinyurl.com/lfmwuuz
————————————————-
‘In reality, however, almost 50 million people in this country [US] live on food stamps and many others need multiple jobs to sustain themselves. How can the official employment statistics paint such a happy picture?’

http://tinyurl.com/les8ukf

http://www.bls.gov/news.release/empsit.t15.htm

#47 Alberta Ed on 07.26.13 at 10:55 pm

Hmm, RE porn and telecoms. Somehow that seems appropriate.

#48 CantRememberMyName on 07.26.13 at 10:57 pm

Gotcha Garth. You also saw the truth to my words. Dangerous huh? Now go listen to the tune.

#49 Min in Mission on 07.26.13 at 10:59 pm

not a mouldy renter, but, I still “googled” Pearl Realty!!

I have been reading this blog for a fairly short while.
Really, there is a great amount of good information and insight here.

The US is recovering, I think that Canada hasn’t seen the full downturn yet.

#50 rosie on 07.26.13 at 11:09 pm

just wondering, if the average house price drops 10-20 %, the majority of mortgages up for renewal are collateral types, td cibc ect, what dose the bank lose or can gain from the renegotiation of the renewal? what reason should a bank renew a underwater a mortgage?

#51 Smoking Man on 07.26.13 at 11:48 pm

DELETED

#52 The American on 07.26.13 at 11:51 pm

At #4: POD, that’s the most ridiculous attempt of trying to act as if you’ve been harmed by the real estate market. You are a f*!cking realturd. Anyone with a brain can see right through you. Pathetic attempt, and a real testament to the profession for which you serve!

#53 The American on 07.26.13 at 11:57 pm

At #17: T.O. Bubble Boy, so what you’re saying is that “conservatives” in Canada are precisely like “conservatives” in the U.S. They love to claim fiscal responsibility and “small government,” but history has proven every time (literally, every time), that budgets are far exceeded and government/military/laws expand under conservative “leadership.” It’s truly a pathetic attempt of snowing the masses.

#54 The American on 07.26.13 at 11:59 pm

At #19: Tony, is there a single post one where you don’t have a complete hard on for America? I mean every post you’ve ever written is America-hating or anti-American. Good luck with that. Careful, you’re massive inferiority complex is showing through BIG time. LMFAO.

#55 Julie on 07.27.13 at 12:00 am

Lets see how ‘Merikin housing does when Summers becomes the next Fed Prez and starts to raise rates like his buddy Volcker did.

#56 The American on 07.27.13 at 12:02 am

At #26: Timmy, WRONG, Garth is right. The CREA, media, and Canadian government are fudging numbers and lying to the masses. Use your brain, man, okay? It isn’t sustainable, otherwise you probably wouldn’t have cared enough to respond to the post in the first place. A LOT of people are getting nervous because everyone knows, but is afraid to admit outloud, the crumble is here.

#57 HAWK on 07.27.13 at 12:04 am

#42 OK Kingpin on 07.26.13 at 10:18 pm

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

I don’t get it.

If Bonds (behind the scenes) fund mortgages, then presumably bond creditors are receiving less interest from their debtors, than mortgagees are receiving from mortgagors.

So which bonds are these that have interest rates even lower than mortgage rates?

#58 Carpe Diem on 07.27.13 at 12:25 am

Got to love the SM deletes this evening.

I would … sssshhh

Did you just sssssshhh me? Double SSSSHHHHH.

SM, you are a colorful character .. keep it up! You are blog dog even if most times you are total f’ed up!

#59 John in Mtl on 07.27.13 at 12:25 am

Well, Mr Garth may be right after all, everyone be confident, the crash has been cancelled! This party will NOT end for a long time, the ponzi scheme will continue. Interesting comments gleaned from the G20:

(full article here: http://blogs.reuters.com/anatole-kaletsky/2013/07/25/the-global-return-to-pre-crisis-growth-strategies/)

“…It seems, then, that policymakers have finally accepted the long-standing U.S. view that it is impossible for all of the world’s major nations to rebalance their economies simultaneously by exporting and investing more while they consume and borrow less. ”

“…In short, politicians and business leaders around the world are giving up hope of export-led growth, powered by manufacturing. Instead they are gradually reverting to pre-crisis economic models, where growth and job creation are powered by consumer spending (housing bubbles, ample cheap credit if you breathe, HELOC’s, etc…). From this, several conclusions follow that will seem shocking after the austerity economics of the past five years.

Stronger consumption will need to be financed by credit creation, at least until the point is reached when employment and incomes grow rapidly enough to create self-sustaining economic recoveries around the world. This means that household or government debts will have to stop falling and preferably that leverage will start to rise again. Debt levels that were considered unsustainable until recently, both for governments and households, will have to be accepted as the new normal. And finally, to create this new credit and support consumption growth, some of the regulatory restrictions on banks will have to be loosened rather than tightened further in the years ahead.

None of these new policies will be publicly announced, since politicians and economists do not like to admit U-turns, but economic reality is moving well ahead of official rhetoric. All over the world, plans for deleveraging and economic rebalancing are being abandoned, while housing and consumption are making comebacks. In sum, the Age of Austerity is well and truly over.”

How P.A.T.H.E.T.I.C. but since this is the way the world runs, may as well join the party!

John

#60 The Numbers Don't Lie on 07.27.13 at 12:42 am

Garth, it is about time in the market, not timing the market. You have been wrong about the GTA since 2008. Look at the GTA average home prices since your blog started. It is an inverse relationship with your terrible advice. The numbers don’t lie.
2008 – $379,347
2009 – $395,460
2010 – $431,276
2011 – $465,014
2012 – $497,143
2013 (as of June) – $522,820

Exactly my point. Sales can fall, prices rise, and risk explode. Those who do not own real estate in context, or have too much leverage and lack diversification, are more exposed to danger with each price increase. Numbers don’t lie. Listen to them. — Garth

#61 The 20:80 rule on 07.27.13 at 12:45 am

#4 POD

I’ve been waiting to buy a house for 4 years, and I’ve now run out of patience. This crash will never happen. Wish I had never come across this blog, it cost me hundreds of thousands of dollars.

I’m meeting an agent next week to start looking aroung.

Yes, blame it on a blog. That’s manly. — Garth
——————————————————————————————————————————

That is exactly the problem in trying to educate the masses.
The wise (20%) do not need any educating, whereas the one’s with lesser faculties (80%) are learning disabled.
And then there are the unscrupulous salesmen, realtors and politicians who feed on the 80%.

#62 Open for offers — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate | The Affluent Boomer on 07.27.13 at 12:45 am

[...] via Open for offers — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. [...]

#63 Godth on 07.27.13 at 1:03 am

“Remember two years ago when this pathetic blog yammered away about investing in US real estate? At the time the usual America haters, doomers and metalheads swarmed on to say southern properties would collapse further in value along with the country itself, and I’m full of crap. I may be. But I was also right.”

it’s already old news but it syill get’s a lol, lol, lol. @ 2:25
http://www.youtube.com/watch?v=5bNujtooZos&feature=c4-overview-vl&list=PLdaYcumF-5RqlcvcVJkOtnYkgJhzzsed_

#64 Benchwarmers on 07.27.13 at 1:06 am

Canadians are getting richer and further in debt at the same time?
We are the only country where people walk around bragging about their debt worth.
http://business.financialpost.com/2013/07/25/canada-richer-debt/?__lsa=b0d0-b4fd

#65 Westcdn on 07.27.13 at 1:25 am

“This is taking longer than the second coming of chr*st” – 1924 Saskanite.
It is my favourite parental quote. It had better be a big candle for Calgary as the big pump for RE pricing is the number of people immigrating to the province. They only leave when jobs disappear or they experience their first winter – family in Vancouver and Ottawa still feel sorry for me.
Calgary currently has one of the highest population growth rates in North America. Apparently Houston has a similar rate and since both cities are known as oil cities, I thought what if I sold my house and bought one in Houston for the same price. Given the exchange rate, I came up with this Houston house. http://www.trulia.com/property/3121945523-14419-Brentshire-Ln-Houston-TX
I figure my humble abode, as is, would fetch north of $400 US per square foot. The Houston house will fetch about $100 US per square foot. Mind you, the property taxes would more than double and I bet the utility bills would be higher. In my mind, it is not if but when that Canadian RE corrects. If I was HAM money – I would go to Houston. Too bad we don’t have RE sites like this in Canada – I guess Cdn’s are very private about money. Get over it, NSA/CSIS know everything. http://www.memerial.net/6839-obama-hes-not-your-dad

#66 bob on 07.27.13 at 1:32 am

Why did you change the original photo?

To irritate you. — Garth

#67 Notta Sheeple on 07.27.13 at 2:40 am

#44 on 07.26.13 at 10:41 pm

“…….The inevitable rebound from the middle class-destroying housing crash. — Garth….”
=======================

Can’t argue with that. Nice to see some paper wealth returning to the American middle class. When pushed too far however (as here in Canada) you soon split the population into three groups:
– speculators surfing a wave of fake prosperity into an impending shore break,
– wrinkly parents sitting on Ponzi houses of paper wealth,
– disillusioned children and post-secondary grads who will likely never own a home to raise a family.

Not to mention the fact that expensive North American housing requires North American expensive wages, causing domestic jobs to be out-sourced to foreign countries whose citizens don’t require high wages to pay for half-million-dollar-bungalows.

#68 JUNO on 07.27.13 at 3:30 am

#36 CantRememberMyName on 07.26.13 at 9:52 pm
===================================

The only one who will get bailed out are the rich. EG the banks and all the goldman sac cronies. If you think the rich really gave a Sh*t about you, then your dumber than you think.

Yeah, they may throw the poor a bone from time to time. But no meat on it!

#69 romeo on 07.27.13 at 5:11 am

I have a question on RRSP first time home buyers plan. my friend got $25,000 out of his RRSP on planning to buy a home, after I educated on the real cost of real estate owning and making him reading this blog he decided to rent than buy a property but now he worry about what happens to RRSP money of $25,000 in the bank will he be taxed or can he pay it back without any penalty ?

#70 Agio on 07.27.13 at 6:51 am

#35 @ gladiator
Why don’t you compare average Canadian to US home prices? Try Vancouver to I dunno, hell even San Francisco. You want nice and not stupid check out Van to parts of Oregon.
Calgary, Edmonton, Winnipeg, Saskatoon? Try Dallas, Houston, Austin, San Antonio, anywhere in Florida if you like getting wiped off the map and can shoot people on site, Arizona if you want to listen to a bunch of ex-pat Canadians talk about how smart they were to dump their overpriced Canadian joints and for a real nice place, try New Mexico. Google is your friend.

#71 piazzi on 07.27.13 at 7:06 am

Garth,

it is not terribly useful to compare average house price of Toronto with US

either compare Toronto with a comparable city

or compare average across Canada with average across US

#72 gladiator on 07.27.13 at 7:45 am

@69 Agio:
so, you’re saying that it’s ok to compare GTA homes, where there’s good infrastructure, many jobs available, manufacturing, lots of small businesses, lots of finance jobs, an international airport, etc. with the average American home – an average which includes homes from little sleepy towns, and from Detroit and Gary, Indiana?
Maybe GTA should be compared to some kind of a “greater New York City area”, since Toronto to Canada is what NYC is to the US. That was all I was saying in my post. Wasn’t it clear enough?

The comparison is new homes US to new homes Canada. Developers don’t normally build new in sleepy little towns, or Detroit. You America haters are obsessed. — Garth

#73 Westcdn on 07.27.13 at 8:00 am

I made a big error on my quick comparison of relative home values. The Houston house would be about 2,200 sq foot on the main level. I should have calculated $200 US per square foot. That cheapens my point a lot.

#74 eddy on 07.27.13 at 8:21 am

re: fake conservatives

on of their tricks is ‘outsourcing’ because conservatives want less government, right? But what we get is corporatism ie MPAC in Ontario, which is worse. In Switzerland there is a fee that every household pays of about $500. per year (TV tax), it used to be for TV radio, then they added computers to the list, then they added cell phones, now you don’t even have to have a media device- just pay up. The Swiss system requires referendums for laws like this, so they just outsourced it to a private company. They knock on your door and harass you, if you don’t pay you get fined thousands.

#75 Bob Copeland on 07.27.13 at 8:27 am

Yes, everything is beautiful in The states. At least if your a bank and ‘ol Ben is feeding you free money!
The people get higher taxes, part time jobs and no benefits.

http://www.zerohedge.com/news/2013-07-26/visualizing-real-economy-vs-financial-economy

US banks do not get free money. And you really need to read better material. — Garth

#76 The American on 07.27.13 at 8:43 am

At #13: Marc the parc, you really don’t get it do you? How will America repay its debts? Are you kidding me? The GDP of America roughly equals its debt right now. So, from a debt service ratio, the U.S. is WELL within acceptable boundaries of paying its debt. It only *sounds* like a big number as a Canadian. Also, the U.S. is and will remain until all we bloggers are dead the world’s reserve currency. Can’t repay something? Print more money! I know you hate to hear it, but it’s true. Bottom line. When you are the single largest economy in the world, coupled with it being a consumption-based economy at that, you pretty much call the shots because the rest of the world’s economy either hinges on the U.S. or is heavily connected to it.

#77 Barrie on 07.27.13 at 8:45 am

I locked my mortgage at 3.19 for 5 years a couple of weeks ago, than read on this blog about the interest differential charge…sure enough checked the contract and if I needed to move or sell up in the next couple of years it would have cost me $25,000 on a $250,000 mortgage. I have 50% equity and a mortgage that is less than twice my income, so phoned the bank and cancelled the deal…rather take the risk the risk that rates will rise around 1% a year for 3 years from mid 2014 and pay it down ASAP than risk giving the bank more i need to bail.

#78 The American on 07.27.13 at 8:53 am

At #64: Westcdn, all this does is demonstrate how grossly overvalued the CAD still is (and it will continue to correct and drop in value over the next several months). When purchasing power parody is demonstrated so well, using cities with similar growth rates and supporting industries (and politics, mind you), and the average home in the U.S. is running 1/4 what it is in Canada, it tells you the CAD is grossly overvalued. Americans buying houses today are NOT struggling to make the monthly, whereas in Canada nearly 50% are barely living paycheck to paycheck or are worried of a market correction while trying to cover the monthly. Americans can afford significantly more home, car, food clothes, and entertainment options than Canadians using the good ol’ greenback in the U.S. Canadians using the CAD in Canada (even though exchange rates are near parody) can’t come close using the CAD in Canada. Very clearly, it says something is wrong.

#79 Stickler on 07.27.13 at 9:00 am

If the fed doesn’t buy the bonds who will buy the bonds to fund the US deficit?

No one at current rates…so rates will go up and the US will be forced to cut their spending again, which will be a further drag on the US economy.

More towards debt, less for the surfs. QE to infinity is not possible.

Every US bond issue sells out because Treasuries are the safest asset in the world. This will continue. — Garth

#80 TurnerNation on 07.27.13 at 9:34 am

What I was mentioning a few days ago, a mass of young people is leaping from condo balconies in our cities. From what I can gather suicide is roughly the #2 cause of death, for young people, after car accidents.

This week I heard of a young man, of a larger family, going to university and hanged himself. Left a note. A number of years ago I heard of a similar case. Family sent two kids off to uni., one returned. This is happening now.

I wonder how post-secondary education factors in. Pushing people into an expensive grinding system, at their prime, molding (moulding?) into young consumers and capitalists. The system demands their sacrifice. Else no call backs. No way we can have a free 20 year old, pursuing his/her dreams, ideas and ideals. We’re to be globalized into one ideal, right? Multi this and that.

From my high school days, I remember the huge push against drunk driving. SADD/MADD chapters in every school. Meetings, presentations, posters. It’s now cool to demand answers: how you getting home.
Why not for suicide?

#81 Math Stickler on 07.27.13 at 10:03 am

Increasing mortgage payments by 2% (of the value of a mortgage payment which is how you worded it) only shaves about 3/4 of a year off the time to pay back a mortgage. Increasing your payments so that a total of 2% of the principal is paid off every year will achieve the eight year reduction. These are two very different things!
Regarding using an accelerated weekly payment to effectively make one extra monthly payment equivalent, this will reduce payment time by about 3 years (depending on interest rate) not ten. Perhaps it was the combination of the two approaches that you were referring to?

Love your blog and insight. Thanks for the great work!

(a) The 2% payment increase is annual. Thus, each year you increase the payment by 2%. Simple logic suggests a one-time 2% boost would be next to meaningless. (b) Weekly-pay is effective. This explanation records a 4-year payment bonus. It varies according to amortization. — Garth

#82 nicetryGarth on 07.27.13 at 10:13 am

“The average price for a brand-new SFH in America is now $249,000. In the GTA it’s $644,427.”

Garth when are you gonna learn its different here…we have foreigners coming over with gazillions of dollars just dying to blow it on RE…only problem is when the condo market and everything else crashes 20% plus…they will be the first ones to dump their properties causing a massive crash in the GTA to 50% plus….

Yes,of course. No foreigners buy in the US. We’re so superior, people are happy yo pay three times the price here! — Garth

#83 reader on 07.27.13 at 10:14 am

If you think your home is an asset, think again. See how a Laval, Quebec homeowner got a $150,000 tax bill:

http://www.montrealgazette.com/business/Laval+Garden+Eden+dream+uprooted/8708663/story.html

#84 Spiltbongwater on 07.27.13 at 10:15 am

I tried to find “Hot Property Hos” on Telus on demand last night. I cannot find it on any Telus listing. Garth, can you verify if “Hot Property Hos” is in fact a real show, and what channel and time will it be on next.

#85 AK on 07.27.13 at 10:28 am

#13 marc the parc on 07.26.13 at 6:02 pm
“ok i will like to see how those americans will pay theirv
debts when rates rise as you say. no way based on the lack of
quality in the jobs being created. higher rates will also kill whatever exports we now sell. what u dont ger is that an
economy .based on debt must fall and next time it will fall harder
we are living in complete artificial times with debts that no one
can ever pay. the only safe place is somethong real like gold and silver”
====================================
I am not sure whether you need therapy, education or both.

#86 Nemesis on 07.27.13 at 10:29 am

@ElYanqui/#79

….”even though exchange rates are near parody”.

Parity.

But your way was vastly more entertaining. Thank you.

#87 Bearclaw on 07.27.13 at 10:32 am

Here’s an interesting article by Lance Roberts on the “real” story behind the US Housing Recovery:
http://www.streettalkadvisors.com/daily-x-change/1774-housing-is-it-really-recovering.html
He makes several good points:
“In an economy that is 70% driven by consumption it is grossly important that the working age population is working.
Speculators have flooded the market with a majority of the properties being paid for in cash and then turned into rentals. As this activity drives the prices of homes higher, reduces inventory and increases rental rates – it prices out “first time homebuyers” who would become longer term home owners. The problem is that when the herd of speculative buyers turn into mass sellers – there will not be a large enough pool of qualified buyers to absorb the inventory which will lead to a sharp reversion in prices.
It should not be forgotten that it has taken massive bailouts, stimulus and financial supports to induce such relatively small amounts of activity.
…optimism over the housing recovery has gotten well ahead of the underlying fundamentals. While the belief was that the Government, and Fed’s, interventions would ignite the housing market creating an self-perpetuating recovery in the economy – it did not turn out that way. Instead it led to a speculative rush into buying rental properties creating a temporary, and artificial, inventory suppression. The risks to the housing story remains high due to the impact of higher taxes, stagnant wage growth, re-defaults of the 6-million modifications and workouts and a slowdown of speculative investment due to reduced profit margins. While there are many hopes pinned on the housing recovery as a “driver” of economic growth in 2013 and beyond – the data suggests that it might be quite a bit of wishful thinking.”

#88 AK on 07.27.13 at 10:47 am

Another project coming online in my favorite city.

Construction set to begin in September on stalled Manhattan West project

.

#89 An Anonymous Coward on 07.27.13 at 11:02 am

So I think the American may have a point about American purchasing versus Canadian, but the use of ‘parody’ for ‘parity’ certainly was the funniest thing have read all morning. Inadvertently apt.

#90 AK on 07.27.13 at 11:02 am

#30 James on 07.26.13 at 9:25 pm
“The US market is now rolling over. I suggest you look at Mark Hanson’s blog,”
====================================
Instead of listening to this fool, you should pay attention to the Case-Shiller Index instead.

U.S. housing starts are going from current 900k per month to 1.7M per month. Get used to it.

#91 jess on 07.27.13 at 11:05 am

another kind of list

http://www.dailymail.co.uk/news/article-2378412/20-law-firms-paid-rogue-detectives-steal-personal-data-MPs-think-scandal-worse-phone-hacking-Press.html

=
how about this offer?
According to the daily mail:
…”Immigration is a ‘constant drain’ on public services in Britain, David Cameron conceded yesterday.
The Prime Minister said Britain had suffered a ‘frightening’ decade of ‘completely lax’ border policies, which had placed huge strain on communities.”

How about this campaign ad:

as an ‘alternative to being led away in handcuffs’.

‘In the UK illegally? Go home or face arrest. Text HOME to 78070 for free advice, and help with travel documents. We can help you return home voluntarily without fear of arrest or detention.’

Follow us: @MailOnline on Twitter | DailyMail on Facebook

backlash on uk housing
http://www.dailymail.co.uk/news/article-2379478/Revealed-How-500-000-immigrants-given-social-housing-decade-number-families-waiting-list-hits-record-high.html#comments

#92 jess on 07.27.13 at 11:13 am

fannie and freddie

$885 million in a settlement with a U.S. regulator over allegations the Swiss bank misrepresented mortgage-backed bonds during the housing bubble

http://uk.reuters.com/article/2013/07/26/usa-ubs-settlement-idUKL1N0FV2F820130726

#93 bitten by RBC on 07.27.13 at 11:21 am

Garth,
can you do a post showing how the interest spread on mortgages actually works.
Most the payments go to paying off the interest first, not the principal, this is why when you sell the house in less than about 10 year you have paid a bucket load of interest and the principal hardly reduces.

Im sure when you work this out the interest is NOT quite as good as you think.

Thanks

It’s called amortization. The bulk of monthly payments in the early years is interest. The bulk of payments in latter year is principal. The bank ensures it gets its money back first. — Garth

#94 craig on 07.27.13 at 11:33 am

I guess if you don’t drink the Kool-Aid around here all your posts get deleted.

What’s the point of a blog if all that’s allowed are cheerleaders.

Three strikes and you’re out. You’re out. — Garth

#95 hamster on 07.27.13 at 11:34 am

A corrupt female Chinese Communist Party official (who retired at age 39 in year 2000) was exposed yesterday to own 21 properties.

18 in China, 3 in Canada
According to the news article making waves in Chinese cyberspace in the last 48 hours, the 3 properties in Canada are:
– 1203-1420 W Georgia St, Vancouver, BC
– 11691 Williams Rd, Richmond, BC
– 8740 Kelmore Rd, Richmond, BC

http://translate.google.ca/translate?sl=auto&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&u=http%3A%2F%2Fchina.dwnews.com%2Fnews%2F2013-07-26%2F59288067.html&act=url

So what? — Garth

#96 bill on 07.27.13 at 11:59 am

#4 POD on 07.26.13 at 5:30 pm
plainly you didnt read a word though eh? just looked at the pictures?

#97 Nimoucha on 07.27.13 at 12:03 pm

Garth recommends to always be balanced, diversified and liquid. Sorry for the rookie question, but don’t the words “balanced” and “diversified” basically mean the same thing?

No. Balanced between fixed income and growth. Diversified within those asset classes. — Garth

#98 None on 07.27.13 at 12:04 pm

Paying weekly, bi weekly blah blah to increase how fast your mortgage is paid off is nonsense.

You mortgage payment frequency should ideally mirror you job payment frequency. Get paid monthly? Fastest way to pay off your mortgage is to pay monthly. Weekly? Same thing.

THe accelerated by-weekly is a shell game.

Let me guess. You studied sociology. — Garth

#99 CantRememberMyName on 07.27.13 at 12:04 pm

#69 JUNO on 07.27.13 at 3:30 am
—-
It’s not me that I am worried about. I’m more than fine + a first time renter after 42 years of existance :) You on the other hand… Now go have another beer.

#100 Stickler on 07.27.13 at 12:19 pm

#80 Stickler on 07.27.13 at 9:00 am

If the fed doesn’t buy the bonds who will buy the bonds to fund the US deficit?

No one at current rates…so rates will go up and the US will be forced to cut their spending again, which will be a further drag on the US economy.

More towards debt, less for the surfs. QE to infinity is not possible.

Every US bond issue sells out because Treasuries are the safest asset in the world. This will continue. — Garth

————

Yes, but not at current rates…that is my point.

Investors are, and will. You have no point. — Garth

#101 The American on 07.27.13 at 12:22 pm

At #89: An Anonymous Coward, OMG. SO SORRY. Working from iPad and auto corrects when I misspell. My apologies to everyone!

#102 Future Expatriate on 07.27.13 at 12:58 pm

#94 “What’s the point of a blog if all that’s allowed are cheerleaders.”

Uh….. truth.

#103 lawboy on 07.27.13 at 1:03 pm

#73

Yeah, gladiator, WONDERFUL infrastructure here in Toronto….perfect for a city of one million!

#104 TurnerNation on 07.27.13 at 1:29 pm

A round up of Toronto’s “patheticness”:

– Ma & Pa spent a 1/4 million on obedience cert (and now lawyers fees) for Junior.
He befriended Maryjane.

I suppose, could be alternately entitled:
‘From 416 to 420′.
(Cue fist-pumping from the Wet coast)

http://www.torontolife.com/informer/features/2013/07/24/hight-times-at-appleby-collage/

– Awkward proof: Zombified people driving Toronto’s RE market?

The ayes have it.

http://www.torontolife.com/style/toronto-homes/2013/07/19/style-mates-angus-bennett-and-justine-fowler/

#105 Old Man on 07.27.13 at 1:37 pm

Thank you Mr. Turner as found that movie, and for the rest of you blog dogs; will have no idea what you are missing as it truly is a hot one. Bravo!

#106 Linda on 07.27.13 at 1:41 pm

Splitbongwater, I swear it’s on my Telus Optik On Demand! Do you have the parental controls turned on?

1. Press Menu on your remote control.
2. Go to On Demand
3. Go to Search
4. By the time I’ve typed in “HOT PR”, I get not one but two movies including this winner for our Pride Parade friends:

“XXX Hot Property – HD – Gay: These men discover the lusty ups and downs, wheeling and dealing and sexual supply and demand in promoting the prime real estate in an ever growing…” (well, that’s where the summary cuts off)

Can somebody who has Telus Optik please confirm that I’m not making this up?

#107 snake on 07.27.13 at 1:53 pm

I have a question on RRSP first time home buyers plan. my friend got $25,000 out of his RRSP on planning to buy a home, after I educated on the real cost of real estate owning and making him reading this blog he decided to rent than buy a property but now he worry about what happens to RRSP money of $25,000 will he be taxed or can he pay it back without any penalty ?

#108 VSR on 07.27.13 at 1:58 pm

US R/E… rotflmao!

Garth, perhaps you haven’t heard it is the banks (with Fed funds from dumping the last round of toxic MBS on them… of course they own the fed and the whole thing is just another accounting scam) buying up the R/E at pennies on the dollar and pumping yet another bubble to be burst just as soon as they offload them on a bunch of “Greater Fools”!

This of course will end well… lol!

#109 T.O. Bubble Boy on 07.27.13 at 2:02 pm

Here is a promising business idea: low-cost ($19/month plus starter fee) financial planning services… works just like a gym membership.

http://www.nytimes.com/2013/07/27/your-money/financial-planners/aiming-to-bring-financial-planning-to-the-masses.html?ref=business

https://www.learnvest.com/

Garth – you interested in starting the Canadian version? It would basically be the paid version of greaterfool.ca.

#110 The 20:80 rule on 07.27.13 at 2:12 pm

#108 SNAKE
I have a question on RRSP first time home buyers plan. my friend got $25,000 out of his RRSP on planning to buy a home, after I educated on the real cost of real estate owning and making him reading this blog he decided to rent than buy a property but now he worry about what happens to RRSP money of $25,000 will he be taxed or can he pay it back without any penalty ?
—————————————————————-
So, your friend too dumb to research this information himself? or are you going to spoon feed him for he rest of his life?

#111 WhiteKat on 07.27.13 at 2:49 pm

@TheAmerican,

Just curious, do you live in the USA?

#112 Old Man on 07.27.13 at 2:53 pm

#108 snake – he will be taxed top dollar on his withdrawal on income, and if he had a self-administered plan with cash liquidity could place a mortgage on a potential buy at market rate paying himself back with payments, but do not make a mistake or the taxman will hoop you.

#113 WhiteKat on 07.27.13 at 3:20 pm

@The American,

Here is one reason many resent the USA. Jackie Bugnion a director of ACA (American Citizens Abroad) says:

In 1776, the United States declared independence because the mother country on the other side of the ocean was imposing taxes on the colonies for the benefit of England. Resentment started when Britain tried to enforce the Navigation Act after 1763. Resentment increased with the Stamp Act in 1765, a way for Britain to tax the colonies. The British Tea Act of 1773 led to the Tea Party and we all know the outcome – the American Revolution and independence crying out “no taxation without representation”.

Today, the estimated 7 million Americans resident abroad, of whom the majority are long-term overseas residents in high tax OECD countries, face a comparable situation. Their representation in Congress is non-existent in reality. Americans abroad amount to only 1 to 2% of the votes in any particular state; Congressmen and Senators have ignored their tax issues. The unjustified myth that Americans abroad are wealthy and disloyal restricts a rational approach to the problems because of political image issues.

Citizenship-based taxation (CBT) has existed ever since the federal income tax was adopted. Despite CBT being an anomaly involving double taxation, taxation of phantom gains and explicit tax code discrimination, it was grudgingly tolerated by Americans abroad because it was essentially voluntary, most often involved little tax or no U.S. tax liability and basically was not enforced. In particular, the FBAR filing requirement was so obscure that even the big four accounting firms were not aware of the filing obligation dating from 1970 and failed to inform Americans abroad of the need to file the FBAR.

Since 2001, a series of legislative events have radically changed the situation:

 In 2001, the Patriot Act made anything foreign suspect, including Americans residing overseas.

 In 2004, Congress, under the Jobs Act, drastically increased the FBAR civil and criminal penalties to confiscatory levels, creating a disguised form of taxation on assets held overseas.

 In 2006 administration of the FBAR reports was transferred to the IRS for enforcement.

 In 2009 the IRS launched its initiative against tax evasion linked to foreign assets through the Overseas Voluntary Disclosure Programs and a threatening public relations campaign. While it justifiably targeted U.S. resident tax evaders, it simultaneously trapped Americans abroad who necessarily have foreign assets. The IRS’s one size fits all policy and bait and switch tactics led to abuses of Americans abroad which inspired sharp criticism from the National Taxpayer Advocate.

 In 2010 FATCA was slipped into the HIRE bill with no debate in Congress and no cost/benefit analysis. FATCA aims to provide the door that closes the fiscal trap by requiring foreign financial institutions to report to the IRS on assets held overseas by U.S. persons. It effectively cuts off many Americans from foreign financial institutions which find it too onerous to maintain American clients. FATCA creates a barrier to free movement of capital and people.

This stream of legislation and proposals categorizes Americans abroad as suspected criminals seeking to escape U.S. taxes. Congress has outdone George III and has turned the United States into a fiscal prison, including legislation which is deemed anti-constitutional under the Fifth Amendment and is contrary to Articles of the Universal Declaration of Human Rights.

The foundation of the U.S. fiscal prison is citizenship-based taxation. Americans working and living abroad carry a ball and chain of dual taxation throughout their entire lives up to and including death.

Americans abroad already pay taxes in the country where they reside and receive governmental services.

The additional U.S. tax obligation creates inevitable incompatibilities and discrimination and even requires Americans abroad to break foreign exchange control laws to pay U.S. taxes.

A revolution among long-term overseas residents is now underway. Five years ago, Americans abroad never talked about renunciation of citizenship. Today, it is a common topic in the press and among the community abroad. For more and more individuals, renunciation is the only solution to an intolerable situation created by the U.S. imposing its laws beyond its borders. The United States is literally destroying the community of Americans abroad, which plays an essential role in representing U.S. interests and goodwill overseas. The United States is shooting itself in the foot.

Today’s situation leads to serious hidden prejudice for the United States. U.S. exports are far below where they should to be because citizenship-based discourages U.S. companies from deploying U.S. citizens overseas to sell U.S. products; the law makes them too expensive. U.S. tax law and FATCA create insurmountable barriers for small and medium-sized companies to establish beachheads abroad to develop exports. The loss represents millions of U.S. jobs, hundreds of billions of dollars of exports, billions of dollars of U.S. tax revenue, and an unsustainable trade and budget deficit.

Americans married to a foreign spouse, who represent about a third of the Americans resident abroad, now hesitate to register their children born abroad with the U.S. Embassy. The hot thing among young adults in their twenties is to renounce U.S. citizenship; they are aware of the impossible web of U.S. regulations that restrict job opportunities and personal freedom. Pushing away the young generation of Americans abroad is an immense loss to the United States.

#114 Suede on 07.27.13 at 3:34 pm

#25 AK

Thanks for that video, now that gold humping sites are bullish again after just 3 weeks it’s time to take profits and wait for the next and final leg down.

#115 Edmontonian on 07.27.13 at 3:37 pm

Did anyone see the latest Mls stats in Alberta? Condo price drop over $10,000 per unit on average in both Edmn. & Calgary from June to July. Houses prices to follow suit next month.

Has anyone ever mentioned on this blog that this wont end well?! Lol

#116 Old Man on 07.27.13 at 4:15 pm

#116 Edmontonian – this is happening everywhere on condo projects, as the buyers are not around. They keep dropping the sale price to sell out so they can pay off the interim financing to the banks or they will lose the profit margin. I know one big player with skin in the game, and although he is worth a small net fortune he cannot stand losing money on his last project.

#117 Waterloo Resident on 07.27.13 at 4:36 pm

The insanity of Canadian women, and the houses they demand:

Today’s women believe that owning houses are the secret to great wealth and happiness, and that the more of them you buy, the richer you will eventually become. Thank this to the past 10 or so years of massive price rises here in Canada.

Women feel as if the house is their castle, their fortress, the one place they are safe and can feel security in the future. Any man that denies them this safety and security is an evil creature and they don’t want ANYTHING to do with him. That is why Garth is hated by women so much at this site.

Women feel that as a house rises in value, they will obtain magical enormous wealth, they won’t have to work another day in their lives, and they can spend the rest of their life traveling and living rich. Well, if people only could just stay still for 10 to 15 years and not keep selling every 3 to 4 years then maybe some of that wealth might have stuck around, but instead they would flip the house and any increased wealth was blown away in realtor fees, transfer taxes, lawer’s fees, and many other stuff that used up what gains the property had. But they never thought about any of that, all they saw was that the prices of the house had gone up and they thought that they held onto all of that increase in price (which was not true).

The MAIN thing that brought along all this rise in property prices was simply the falling of mortgage rates, from about 15% in the early 90s’s to the 3% lows seen just recently.

Well, guess what: mortgage rates CANNOT fall any further, because the benchmark interest rates under them had hit 1% and could not go any further downwards. So that’s it, no more gravy-train ride of house prices going up and up forever. Now the best we can hope for is to have mortgage rates stay put and not go up. Unfortunately that’s not going to happen. See, the U.S. business economy is slowly getting better (even though the consumer economy is still dead), and as businesses need more and more money they will push up the rates on bonds as higher demand for money leads to increased cost for that money. Even if the U.S. government keeps their benchmark rate at zero, rates for bonds will rise as demand for borrowing rises from the growing businesses in America.

As American bond rates rise, so will their mortgage rates, and in a similar way so will OUR mortgage rates go up also. Bonds will go from the low of 3%, up to around 6% in about 2 years’ time, then to about 7% a year later. So what that will effectively do is to dramatically raise the carrying cost of a house. I don’t know of very many companies who are going to be giving out 100% raises to their employees anytime soon, but more and more home-owners are going to be demanding such raises as they will be under the money crunch BIG-TIME !

So where does that leave the Canadian woman? Well; she will then feel as if she is married to a dead-beat who cannot keep her satisfied, and she will divorce his sorry a$$ and try to find herself a better model, or just turn into a lesbian (which seems fashionable these days) and live with another woman instead.

When a woman understands that her husband cannot keep her in the comfort that she has become used to, she feels cheated and won’t tolerate him being around anymore. So as more and more men lose their homes, so will they lose their wife and kids to divorce. Not only will trustees in bankruptcy be hugely in demand, so will divorce lawyers too, and this will continue for the next 8 to 10 years.

Already there is a huge and growing movement of “MEN GOING THEIR OWN WAY”, men who see that there is nothing to gain by getting married to a woman, and as this divorce epidemic catches up steam the younger generation of men will see all of it and be so afraid of getting married that it will become near-impossible for a lady to get a guy under 30 to agree to get hitched.

#118 Spiltbongwater on 07.27.13 at 4:43 pm

#107 Linda on 07.27.13 at 1:41 pm

Ok, found it. I am more surprised that people actually pay for pron on the internets then seeing a Realtor themed XXX movie.

#119 FirstPlaceBob on 07.27.13 at 4:51 pm

Look, the census in the paper says almost anyone who moved anywhere in Canada moved to Calgary.
There is nothing to rent there so everyone is going to buy anything at any price, everyone knows that. Duh.

#120 highplains on 07.27.13 at 5:12 pm

when the heck is chapters getting your book again? its been on “re-order” for over 6 months.

Sold out. I am not reprinting. You’ll have to pay $489 on eBay. — Garth

#121 Smoking Man on 07.27.13 at 5:13 pm

Your a jelly bean,fat bastard missed one, you end up as road gew on Las Vegas blvd,(machine) your production number,40319

You did not get vaxinated ,don’t drink fluoride water.

You live by your wits, you are an anomaly , don’t fit,outsider.

That’s luck ……….

Love being me……you fitters in,feel for you.

Losers who are oblivious to your reality…

Tattoo next

#122 housedoc on 07.27.13 at 5:35 pm

American’
Parity not parody.

#123 WhiteKat on 07.27.13 at 5:49 pm

@ Waterloo Resident,

Misogynistic much?

I say this as I sit in the dining room of my rented home in Ottawa. It was my idea to sell the family ‘dream’ home in Brantford, so hubby could pursue job opportunities elsewhere after the manufacturing company he worked for closed shop and relocated their facilities to the USA.

#124 WhiteKat on 07.27.13 at 5:55 pm

@WaterlooResident,

And, the house we rent is nowhere near as nice as the one we owned, nor can we buy a house in Ottawa anywhere near as nice as the one we sold in Brantford without taking on a huge mortgage. My husband, would happily sign the mortgage papers to do so, but I say ‘No way’. Debt free is the way for me. I think he is starting to get it too!

#125 Form Man on 07.27.13 at 5:58 pm

#54 The American

Nicely put. Conservatives are best known for stubbornly repeating the same mistakes, ( in a vain hope the result will eventually be different), and for promoting ideology over evidence and facts. Sadly, ( and fortunately for Stephen Harper ), a significant portion of the voting public seem content with that approach………..

Old Man,
Enjoy your comments. Keep up the good work

#126 WhiteKat on 07.27.13 at 6:06 pm

@WaterlooResident,

My only fault (well not my only fault, but one of my worst) is that I don’t know how to invest, and the proceeds from house sale are sitting in the orange guy’s shorts. I am so embarrassed . It is on my ‘to do list’ to learn how. My husband is not interested, so someone has to figure it out…may as well be me.

Hire somebody. Solved. — Garth

#127 espressobob on 07.27.13 at 6:08 pm

#98 Nimoucho

You might want to pick up a copy of ‘investing for Canadians for dummies’. Great place to start. Best of luck!

#128 TheCatFoodLady on 07.27.13 at 6:18 pm

#105 – TurnerNation: those Victorians tend to be short on closet space – but leaving shoes on a 6 burner stove is a fire risk…LOL

#118 Waterloo Resident: Lose the attitude – it might cost you less in divorce lawyers. ‘Allowing’ your wife to browbeat you into a bad financial move, (upgraded house at the wrong time/place), then projecting what YOU feel on to ALL Canadian women is too blatant. Your misogyny is showing.

#129 Ralph Cramdown on 07.27.13 at 6:27 pm

#94 bitten by RBC — “Most the payments go to paying off the interest first, not the principal, this is why when you sell the house in less than about 10 year you have paid a bucket load of interest and the principal hardly reduces.”

Find yourself a web mortgage calculator that shows the amortization table and play with it until you understand. What you said is true for higher interest rates (say 8%) or longer amortizations (say 35-40 years). For a 25 year am at 3%, about half of the first payment goes to principal.

#130 Marginal on 07.27.13 at 6:35 pm

#118 Waterloo Resident
I assume you’re a male of the species Homo Sapiens Sapiens and I’m totally guessing that you are under 30. If so, don’t despair, many young women are settling down closer to 40 based on what I can see in my extended family. By that age they are much more realistic.
Not sure about the women you’ve met so far, but many younger women I worked with bought their own homes before they got married, if they did. Many in my profession (not the oldest, but probably second oldest—counting the money at the door) never got married but didn’t lack for male companionship either.
All I can say is hang in there; there are as many men who made foolish house buying decisions for status reasons as did women for status (or what you call security). Personally, many years ago, I went for the rugby player who rented an apartment and only had cracked plates and dented pots in the cupboard. We’ve been fortunate in life and love, so never give up!

#131 Bargains everywhere on 07.27.13 at 6:52 pm

#118 Waterloo Resident

For the sake of womankind, please, please, please do not get married.

#132 Nosty in VladMadLand on 07.27.13 at 6:54 pm

-
#60 John in Mtl — “…It seems, then, that policymakers have finally accepted the long-standing U.S. view that it is impossible for all of the world’s major nations to rebalance their economies simultaneously by exporting and investing more while they consume and borrow less. ”
– and –
#80 Stickler — “If the fed doesn’t buy the bonds who will buy the bonds to fund the US deficit? QE to infinity is not possible.”
– plus –
“Every US bond issue sells out because Treasuries are the safest asset in the world. This will continue. — Garth”

As a mathematically certified looneybin, I make no secret of the fact that I are a simpletun, and all I can do is to supply links which may or may not have been taken into consideration.

Somewhat long-winded but a fair summary nonetheless. Numbers are interesting, and the Gang of Four gives a good overview in this link.

Keep in mind — Out of chaos, order.

#133 Marginal on 07.27.13 at 6:59 pm

#125 WhiteKat
Like your attitude. The house I currently live in (debt free) is not nearly as nice or big as the first house that I owned with my first husband. Given our incomes (now with second husband) we could easily own a much bigger home but we decided a long time ago that being “house poor” was never a good trade off for long term financial security and the ability to enjoy life.

#134 Mark on 07.27.13 at 7:13 pm

As hard as I try I still can’t find that movie!

#135 Daisy Mae on 07.27.13 at 7:16 pm

“The big worry F & the Peckerettes have is that legions of people who bought with 5% down in the past three years will be completely unprepared for the return of normal rates.”

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

Oh, you mean the 5% so many borrowed with LOCs, credit cards and/or mom and dad –that 5%?

And is the elfin deity worried about us, or the Cons chance of re-election after all their many screw-ups?

Sorry….I’m like a dog with a bone. ;-)

#136 AK on 07.27.13 at 7:19 pm

#129 TheCatFoodLady on 07.27.13 at 6:18 pm
“#118 Waterloo Resident: Lose the attitude – it might cost you less in divorce lawyers. ‘Allowing’ your wife to browbeat you into a bad financial move, (upgraded house at the wrong time/place), then projecting what YOU feel on to ALL Canadian women is too blatant. Your misogyny is showing.”
====================================
LOL. BTW, Cat food is more expensive than human food.

#137 The American on 07.27.13 at 7:22 pm

At #123: Housedoc, please see #102. Thanks!

#138 WhitKat on 07.27.13 at 7:23 pm

#127, @Garth,

I have an issue with trust, but thanks for the advice.

#139 NoName on 07.27.13 at 7:25 pm

Interesting read

“Weather cost the world $85 billion so far this year. Only 1/4 of that was insured…”

http://goo.gl/Vnmu4r

#140 Mofo on 07.27.13 at 7:26 pm

..and u still are (full of crap vis-a-vis US). Their housing prices will collapse again. Take your bond predictions and just apply them , they are correct.
Morons will continue printing – I know u say they DON’T PRINT, and you are right, printing means paper, zeros on a screen is just that.

But nevertheless, you are a sweetheart. Had you been like the babe in read with ice cream I would marry u any time, but since you’re just as hairy as I am I’ll pass.

What I like about this blog is that you DO have the ability to change your mind when things turn slightly different than you predicted. This is a sign of a fresh mind -such a rare gift these days.

In any case, we love you Mano…just keep pumping those babes in larger gif format.

#141 WhitKat on 07.27.13 at 7:31 pm

#127, @Garth

Plus the ‘born in the USA’ stuff gets in the way …even though my parents and grand parents, and were born in Canada.

#142 WhiteKat on 07.27.13 at 7:39 pm

I’m not that witty, I’m WhiteKat. An edit function would be awesome Garth.

#143 The American on 07.27.13 at 7:39 pm

At #114: Whitekat, I know, right?!?! I mean it would almost be as ridiculous as tax laws in Canada! Your point?

http://travel.gc.ca/travelling/living-abroad/taxation

http://americansabroad.org/issues/taxation/us-taxes-while-living-abroad-faq/

#144 The American on 07.27.13 at 7:41 pm

At #114: Whitekat, and here is some more reading material for you….
http://www.cbc.ca/news/business/taxseason/story/2012/04/18/f-taxseason-filing-taxes-living-abroad.html

#145 Nemesis on 07.27.13 at 7:42 pm

“Open for offers” ???

OT SillySaturday NonSequitur for GhostRiders only:

Spot the difference…

http://youtu.be/dtDOoBhg3T4

vs.

http://youtu.be/OZt1wZWYizw

[NoteToGT: Here's a Rhetorical for ya... Which would you rather straddle... a GallopingHog or a SoaringEagle?]

#146 rosie "moving forward" on 07.27.13 at 7:46 pm

#118

Good observations on the underlying causes of the housing debacle. I have personally found this as sage and timely advice for prospective wives. Please feel free to send this on to your like minded chums. http://fredkunze.org/monte57/monteImages/1955WifeGuideSM.jpg

#147 WhiteKat on 07.27.13 at 7:51 pm

@Garth,

Do you have any investment advice for Canadian citizens who were born in the USA?

#148 WhiteKat on 07.27.13 at 8:03 pm

@Garth,

Either I am getting paranoid (totally possible) or my posts are getting DELETED without you even acknowledging that they are DELETED. Smoking Man: I am jealous. Garth: I’m not hiring you.

#149 Mofo on 07.27.13 at 8:12 pm

The truth is that morons remain morons no matter how much money one troughs at them:

http://www.localnews8.com/lifestyle/money/watchdog-borrowers-in-obama-housing-program-redefaulting/-/461672/21137896/-/y77kcz/-/index.html

The second scary fact is that – despite being an “elitist” comment and/or politically incorrect – people do have the leaders they deserve, in the long run at least.

…so go figure..

this goes to more debt more unemployment more crappy jobs (since the good ones have either been exported or disappeared all together) …

…so YES… bond yelds will keep goin’ up and up and up for the next 50 years or so :)

maybe’s a good thing to short’em in the long run :)

#150 Mofo on 07.27.13 at 8:22 pm

@ #16 brunette,

… gimmie a shout, we’ll find it together :)

#151 Mofo on 07.27.13 at 8:24 pm

@ #147 Rosie,

..those were the days…

I keep reading and re-reading. Almost teas in my eyes..
They had it sooooo good. How did it come to this ?

:)

#152 Chris L. on 07.27.13 at 8:26 pm

@ Waterloo and others. There’s nothing misogynistic about what he wrote. Prejudice, yes, but not misogynistic. If you think materialistic women don’t exist and aren’t the majority, give your head a shake. And that’s not misogyny, that’s a criticism of women. Criticizing women is not hate. Get used to hearing more and more about the bad things women do, as it’s a growing theme with the men’s rights movement. Men are growing tired of the lopsided laws surrounding divorce and women getting off easy.

@Waterloo – if you’re under 30 and can’t find a decent women, I feel for you. I’ve been following the movement for some time and know exactly where you are coming from. Bear down and scour as there are some decent women in the fray. Just make sure you choose wisely as the laws are not in your favour should something go wrong or should she decide to take you to the cleaners – but that’s not all on women, a lot is due to feminism running laws into the ground and whiteknight judges vilifying men. Hang in there.

I’m fortunate to be a bit older and missed out on the extreme mess you’re facing. But I see it all around me. Men are treated worse then minorities.

And the women of HAM are no different (be sure to hit “cc” for closed captioning:

http://www.youtube.com/watch?v=t-jZpsv-BMo

Why is it okay to hit men on tv?
http://www.youtube.com/watch?v=u0Q777x8ur8

#153 Mofo on 07.27.13 at 8:29 pm

@ #134 Marginal,

..any soothing thoughts for Neanderthalians mid 40’s , sailing, no debt and boozing vodka with buddies ?

:)

I suspect that continuing doing the same is best fit :)

#154 Stupesing in Cabbagetown on 07.27.13 at 8:45 pm

#118 Waterloo Resident – what a load of crap! Your comments are so full of misinformation and hatred I don’t even know where to begin commenting. Did you poll all the women who read this blog to arrive at the conclusion that we hate Garth? I don’t remember being asked. Your entry is worth two stupeses.

#155 espressobob on 07.27.13 at 9:09 pm

WhiteKat, do yourself a favour and get some help!!!!! Hire an advisor!!!! Oh, and chill out!

#156 Marginal on 07.27.13 at 9:18 pm

#147 Rosie the Riveter
Very good……long time since I’ve seen the attachment; it never grows stale.

#157 Marginal on 07.27.13 at 9:25 pm

#150 MoFo
Regarding the link and 306k program defaulters…..I sincerely hope you are not losing sleep. That’s an extremely small number relative to all the mortgage holders in the U.S. and to be expected given the nature of the program.

#158 Matt on 07.27.13 at 9:33 pm

Garth,

Can you use rrsp contributions (that have been deposited for 90 days) for the home buyer’s plan that HAVEN’T been used for deductions and income tax purposes?

So, let’s say I deposit 25,000 into my RRSP…then I wait 90 days…and buy a house.–using the whole 25,000 as a part of the larger downpayment.

THEN tax time rolls along, and I choose NOT to use the entire 25,000 for deduction purposes…but carry forward a chunk of it into the following year?

Is this do-able?

Or does one have to use the entire amount (25,000) for tax deduction purposes within the same year? i.e., without any “carrying forward”?

Seeking your wisdom, Garth!

You can contribute to an RRSP and deduct it from tax in any year you wish. — Garth

#159 Nemesis on 07.27.13 at 9:46 pm

#146 Addendum:

http://youtu.be/sW_JjCSZAxQ

“A World Of Friends”

http://tinyurl.com/ngbbtc2

#160 Piccaso on 07.27.13 at 10:07 pm

#148 WhiteKat on 07.27.13 at 7:51 pm
@Garth,

Do you have any investment advice for Canadian citizens who were born in the USA?
……………………………………………………………………

No, but I have a question? WTF made you come up here?

#161 Matt on 07.27.13 at 10:10 pm

Also, can unused rrsp contributions (like unused rrsp contribution room) be carried forward indefinitely?

So, I can contribute 25,000 this year…and use 5,000 for deduction purposes…effectively carrying forward 20,000…then the next year use 10,000 of the original 25,000 for deduction purposes…and effectively carry forward the remaining 10,000…for deduction purposes the next year?

or, can unused rrsp contrubutions only be carried forward one year…and they MUST be used for deduction purposes at such a time?

Help!

Accumulated RRSP room does not expire. — Garth

#162 Waterloo-Resident on 07.27.13 at 10:13 pm

You know, life’s not fair, and I guess Garth realizes that also.

Let me give you an example here:

I watch the news and read the mags, and what I often see is guys (men) who cheat on their wives, and guys who rape or beat up their women. I see that with my own eyes and I know that it is only maybe 2% or 5% of the guys, but I inform the women and tell them to keep an eye out, to be careful and not allow them to get hurt in the same way. Just take a little bit extra caution, that’s all. The result of saying that is thanks from the women and just a rolling of eyes from the men.

Then, at the same time, I see guys totally raped in divorce courts, I see guys being pressured into buying houses they cannot afford, all because it is the women who wants the house (guys like houses, but they are usually just as happy renting an apartment too, they’re like that.) Anyways, when I tell the guys to watch out and not be used this way, I get the guys telling me to ‘bugger off” (they are afraid I’ll ruin the game for them and then they won’t get any more sex), and the women slam me down and say i’m a woman hater (“Misogynistic much?”).

Please understand, I don’t hate anyone, I simply tell it like it is, that’s all.

Thanks, and have a nice day.

#163 johnanddagney on 07.27.13 at 10:15 pm

Hi Garth and Blog Dawgs, Still need your advice. Sold house, money in orange guys shorts, ready to jump into etf’s balanced, diversified, liquid, then July 19 blog “Humans”. Frozen in tracks! Now what? Wait for pull back? Take the plunge? Thoughts?

#164 Vangrrl on 07.27.13 at 10:17 pm

#124 White Kat:
I’ve been reading this blog for about a year and Waterloo Resident has posted pretty much the same thing before, but it’s actually been a while. He’s totally ridiculous.
Btw, I spent my teen years in Btfd :)

#165 Matt on 07.27.13 at 10:34 pm

Hi Garth!

Thanks so much for the answers! However…

I realize that rrsp contribution ROOM does not expire…but my question was rather:

Do unused/unclaimed rrsp CONTRIBUTIONS expire? or can they (too)be carried forward indefinitely?

I answered that. Essentially, yes. You can claim a contribution in the year of your choice, but only get to deduct it once (in that chosen tax year). — Garth

#166 Matt on 07.27.13 at 10:48 pm

Through filling out a yearly schedule 7 form?

#167 None on 07.27.13 at 11:30 pm

“Paying weekly, bi weekly blah blah to increase how fast your mortgage is paid off is nonsense.

You mortgage payment frequency should ideally mirror you job payment frequency. Get paid monthly? Fastest way to pay off your mortgage is to pay monthly. Weekly? Same thing.

THe accelerated by-weekly is a shell game.

Let me guess. You studied sociology. — Garth”

No, I study math. If you can math better and somehow show me where the magic money comes from I would love to hear it.

I did. — Garth

#168 Yitzhak Rabin on 07.27.13 at 11:36 pm

Home prices in US up 13% YOY
Interest rates way up since start of the year
Real disposable incomes up only 1.1% YOY

See any problem?

Best description I’ve heard:

“The problem with the housing industry was and remains the Fed. By keeping interest rates at zero and giving institutions access to various lending windows, the Fed gave large financial firms like Blackrock to opportunity to snatch up tens of thousands of homes.”

“This has put a false floor beneath housing prices. Historically, housing busts in the OECD countries last 6-7 years peak to trough. But by giving certain players in the market (institutions) the opportunity to buy up vast swaths of homes, the Fed didn’t allow this natural process to take place.”

“The end result is that housing is once again unaffordable for most folks. Prices are surging across the board at the precise time that mortgage applications are collapsing”

“It’s just like 2007 all over again. Only this time around, we know for a fact that the Fed hasn’t fixed things and has bankrupted itself and the financial system pretending that it can.”

Any response to this? Please attack the content and ideas not just throw a kindergarten insult like “doomer” and “metalhead”.

US home prices dropped 32 per cent, and have recovered a third of that. Sounds reasonable as unemployment declined 3 per cent. BTW, mortgage apps are not collapsing and the Fed is not bankrupt. Your ‘best description’ is crap. — Garth

#169 Ryan Perich on 07.28.13 at 2:00 am

Speaking of delusional people, a recent BMO survey found a third of all first-time homebuyers (are stupid) and expect mortgage rates to be exactly what they are now in 2018..because they’re stupid.

#170 A in Vancouver on 07.28.13 at 2:55 am

I’ve been waiting to buy a house for 4 years, and I’ve now run out of patience. This crash will never happen. Wish I had never come across this blog, it cost me hundreds of thousands of dollars.

I’m meeting an agent next week to start looking aroung.

I have the same problem. I have cash in bank and I haven’t bought a house because this blog.

Then you don’t read too well. A bank account is dead money. — Garth

#171 AK on 07.28.13 at 6:58 am

#169 Yitzhak Rabin on 07.27.13 at 11:36 pm

“See any problem?

Any response to this? Please attack the content and ideas not just throw a kindergarten insult like “doomer” and “metalhead”.”
====================================
Okay, fair enough. You don’t know what you are talking about.

#172 AK on 07.28.13 at 8:12 am

#163 Waterloo-Resident on 07.27.13 at 10:13 pm
“Anyways, when I tell the guys to watch out and not be used this way, I get the guys telling me to ‘bugger off” (they are afraid I’ll ruin the game for them and then they won’t get any more sex).”
====================================
Geez, You make it sound like you just discovered an earth shattering event. It’s normal for any guy who is married.

#173 Ralph Cramdown on 07.28.13 at 8:16 am

The claim: “By paying weekly instead of monthly you make the equivalent of one extra payment a year, and hack years off the pay-back time.”

The extra payment doesn’t come from paying earlier and more often, thus accruing less interest. It comes from paying half of the monthly every two weeks, effectively paying thirteen monthly payments a year. If you paid monthly and bumped the payment by 1/12, you’d get the same effect, to within a few bucks over five years.

This might be obvious to some people, and others may have been completely hoodwinked by the financial industry. When comparing a monthly and a bi-weekly, the obvious estimate is to double the bi-weekly to compare. Nobody pulls out an abacus and their annual pay schedule in the mortgage officer’s or car finance specialist’s offices and does the math.

The plain fact is that if some of a household’s major periodic cashflows (i.e. wages, car and house payments, credit card and utility bills) are monthly and others are biweekly, cash management becomes trickier and a bigger float is required. It doesn’t take too many mistakes or shortfalls for the overdraft fees or credit card interest to negate the savings…

#174 Ralph Cramdown on 07.28.13 at 8:28 am

“This has put a false floor beneath [US] housing prices.”

I don’t know who’s doing that analysis, and I won’t bother to google to find out. Most US housing is now below long-run price/income and price/rent ratios — it’s undervalued.

Given that and the amount of pain and unemployment that millions of foreclosures and of derelict houses sitting for years have caused, to the foreclosed upon, to the sources of that money and to the neighbours that managed to hold on, it’s a true sadist who suggests that house prices should have gone even lower.

And it isn’t just Blackrock and other hedge funds who’ve been buying. Small investors with cash and/or credit have been buying too, because the numbers work at 4% and in some places the numbers work with an all-cash deal. A serious analyst would know that.

#175 X on 07.28.13 at 8:47 am

GTA home prices from above:
2008 – $379,347
2009 – $395,460
2010 – $431,276
2011 – $465,014
2012 – $497,143
2013 (as of June) – $522,820

If sales weren’t starting to fall, looking at these numbers, you really would think that F would be quite concerned about this trend and would be looking to make more changes to slow the RE market. As unfortunately, most of our incomes have not risen at the same pace. Which is reflected in our ever growing personal debt.

It is so obvious that most people can’t see it.

Unfortunately the market will stay irrational longer than most of us can stay rational.

#176 Ralph Cramdown on 07.28.13 at 9:36 am

#169 Yitzhak Rabin — “The end result is that housing is once again unaffordable for most folks. Prices are surging across the board at the precise time that mortgage applications are collapsing”

http://www.calculatedriskblog.com/2013/07/mba-mortgage-applications-decrease.html

Maybe point to the ‘collapse’ on the chart? Remember, you want chart #2, purchase applications. Chart one shows refinance applications (decreasing, duh, because of rate increases) which has nothing to do with the point your analyst was trying to argue.

And here’s those ‘surging’ house prices:
http://www.calculatedriskblog.com/2013/06/real-house-prices-price-to-rent-ratio.html

It’s amazing the sway the Zero guy holds over the marginally-informed. — Garth

#177 Bob on 07.28.13 at 9:48 am

A realtor in Victoria hired a photographer to take some pictures of a high-end property he was trying to sell. The realtor did not pay the photographer’s bill of $647 so the photographer started a website to shame the realtor. Things are starting to get ugly here!

http://brianschiebel.ca/

#178 D.D. Corkum on 07.28.13 at 10:14 am

#38 CantRememberMyName on 07.26.13 at 10:01 pm

“Gold will be worth $5000 100 years from now.”

———-

Lets assume you are correct. If inflation is constantly 2% then we can calculate a fair price for gold today.

Today = Future / [ (1 + Inflation) ^ Years ]
Today = 5000 / [ (1 + .02) ^ 100 ]
Today = 690

Given that gold is $1300 today, it seems like it’ll be a really bad inflation hedge if your belief is true.

When you are going to make predictions about the future value of an asset, you should take the time to rationally understand the market. Throwing out emotional statements like “care for your unborn grand-children” is dangerous if you don’t pair it with actual thinking.

#179 Ret on 07.28.13 at 10:34 am

#172 When will it pop?

We feel likewise but will hold off until next spring to get a clearer picture of where RE might be heading. We don’t see what is keeping this RE market going.

Hundreds, if not thousands, of new homes are being built along Dundas (Highway #5) from Waterdown to Oakville. The servicing of huge new subdivisions is relentless. Another 3-400 new lots are being serviced around Sixth Line and #5.

The Cobblestone development in north Burlington has a few new 1600sf homes left on 43×80 ft. lots that start at $703,000.

Tiffany Hills in Ancaster, a burb of Hamilton, is much the same story only $150,000 less expensive to start. Also basically sold out with only a few homes left.

We are struck by how many people, who outwardly appear to be lower income Canadians and newcomers, are living in brand new $5-700,000 houses. How do they secure financing? I can’t see that the new mortgage lending rules have made much of a difference to prices or sales.

Prices in backwater places like Port Dover, Niagara Falls, Caledonia and Simcoe continue to gently keep rising. This is not sustainable. The longer this continues, the uglier and more rapid the inevitable price declines will be.

SIL’s 2007, $211,000 Sebring FL. home turned into a $105,000 home in 2 years. It has now gone up to $125-135,000 . Still no dancing in the streets in Sebring.

We fear getting caught trying to sell our existing house and being under contract on the next home. We could be owning two properties, each in a rapid price decline which would be far worse than owning one property in such a pull back.

Much of Ontario is turning into an economic black hole. (Hamilton will be the next Detroit IMHO. The blight and crime here is accelerating by the week.)

#172 and others may want to check out the following link before they pull the trigger,

http://www.thestar.com/opinion/commentary/2013/07/14/canadian_housing_bubble_looks_ripe_for_popping.html

#180 Old Man on 07.28.13 at 10:38 am

Oh the cost of living has now become a reality with Real Estate and divorces on the horizon, and the horror of it all is very depressing with more pain to come. Lets take a trip down memory lane. In 1969 and for years dined in luxury at one of the top hotels in Toronto several times a week on a luxurious buffet with all food coming from the main kitchen. More times than naught stayed for the best show starring the Queen, and guess where I took my dates for dinner and entertainment? All the food that one could eat cost 50 cents, so name the Hotel if you can! How things have changed, so get ready for it all.

#181 TurnerNation on 07.28.13 at 11:04 am

Got this in my email today.

Our forum host shooting the breeze on Howe Street:

http://talkdigitalnetwork.com/2013/07/this-week-in-money-94/?

◾Garth Turner – The future value of Real Estate.
◾Marin Katusa – Oil prices and the Middle East.
◾Jack Crooks – Japan’s economic experiment.

#182 Gunboat denier on 07.28.13 at 11:24 am

175 Ralph – thank you for your logical, rational contributions to this blog.

#183 None on 07.28.13 at 11:43 am


No, I study math. If you can math better and somehow show me where the magic money comes from I would love to hear it.

I did. — Garth

Actually you didn’t. You are effectively advocating that people hold money in their bank account making 0.1% interest while their mortgage is charging 3.5% to follow some arbitrary schedule. Ironically it seems like you have fallen for a common mortgage bank con like that masses. That is not correct.

Here is your math lesson:
If you have x amounts of money to apply to your mortgage per year your goal is to get it out of your bank account earning 0.1% and on to your mortgage as quickly as you can, hence you want to synchronize your income and mortgage payment schedules regardless of the weekly/biweekly etc nonsense.

Here are some more free mortgage payment tips:
1) always choose variable rate over fixed rate but pay the former at the fixed rate level. This offers ample insulation from any mortgage rate increases.
2) always take the maximum amortization period possible (while still avoiding CMHC) but pay your mortgage at your desired amortization frequency. This should be a meaningless method but it offers you flexibility if some financial issues come up and costs you nothing.

You are welcome.

Learn the difference between a weekly and an accelerated weekly. Plus some humility. — Garth

#184 Julia on 07.28.13 at 11:53 am

#175 Ralph Cramdown on 07.28.13 at 8:16 am

Thank you for making this point. It’s obviously not about how often you make payments, it’s about how much your payments are. When i lived in my house I made biweekly mortgage payments because i was paid biweekly so I could line up the incoming and outgoing cashflow. When I rented out my house and was collected rent on a monthy basis I made monthly mortgage payments because again they lined up nicely with my incoming cash. Regardless, I made the largest payments I could and threw in extra when I could because at the time I wanted to pay off the mortgage faster. There are no magic tricks.

No magic, of course. But if you have a weekly-pay mortgage with payments equal to .25% of a monthly, you will pay the mortgage off years sooner and save a bundle. — Garth

#185 JimH on 07.28.13 at 12:00 pm

#170 Shawn re: US Treasury Bills

You misunderstand the role of US Treasuries. They are a form of US currency reserve, and are bought up by foreign governments mainly for that purpose, as unlike holding bushels of dollars, they pay a return.

#186 Canadian Watchdog on 07.28.13 at 12:11 pm

For the record, Case-Shiller is not a dollar term price index, it's an aggregate index of percentage change.

Median Sales Price of Houses Sold for the United States

Average Sales Price for New Houses Sold in the United States

Why did prices rise so quickly? Because when the Fed announced they'd be buying 90% of all MBS available, targeting lower mortgage rates, investors started buying and bidding up list prices thinking the average Joe, Jane and FTB would jump in head first, yet they haven't. Chart (NAR data)

So now you have mortgage rates up 25% y/y and median home prices up 10% y/y, equating to a 35% monthly payment increase. Now somebody please point to the chart where median wages rose by that much.

#187 Daisy Mae on 07.28.13 at 12:13 pm

Kelowna, crime capital of Canada?

In all fairness, crime “…increased by approximately 6% primarily due to property offences. Persons offences such as assaults, are decreasing…” (Capital News)

A large portion of the problem stems from the influx of tourists — 1.5 to 2 million more over the summer and police resources are stretched.

Results of crime stats report revealed:

Property crime: 13.5%.
B&Es: 7.2%.
Theft of autos: 2.6%.
Thefts from autos: 37.6% (lock the doors, close the windows, place purchases out of sight. All it takes is common sense).
Fraud: 19%.
Bicycles: 73% (lock them up!)
Drugs: 3%.

The City of Kelowna added 12 new officers this year and will have added 22 by 2015 to deal with these misfits.

#188 JimH on 07.28.13 at 12:25 pm

#169 Yitzhak Rabin
“It’s just like 2007 all over again. Only this time around, we know for a fact that the Fed hasn’t fixed things and has bankrupted itself and the financial system pretending that it can.”
===================================
If you truly believe this rubbish, then you have no understanding of how modern monetary systems work, especially the monetary system that produces the word’s reserve currency.

I suspect that perhaps have no desire to learn, but if so, get away from Ron Paul, Peter Schiff, and ZeroHedge, and struggle with the inconvenient truth that the producer (yes, PRODUCER) of the world’s reserve currency can ever suffer from “bankruptcy” within the present global environment. (I think you meant to refer to “insolvency”, correct?)

There is lots to read at http://pragcap.com/ that you might find helpful.
also http://neweconomicperspectives.org/p/modern-monetary-theory-primer.html
and http://www.nakedcapitalism.com/2013/03/what-is-modern-monetary-theory-or-mmt.html

#189 JimH on 07.28.13 at 12:29 pm

… sorry; meant to say
“the producer (yes, PRODUCER) of the world’s reserve currency can NEVER suffer from “bankruptcy” within the present global environment. (I think you meant to refer to “insolvency”, correct?)

#190 Donald Trump on 07.28.13 at 12:39 pm

Yeah , I was in Kelowna recently, in a rough part of town(redundant).

Someone came up to me and whispered if I wanted to buy a house. So they opened the trunk of the vehicle(it was a KIA!) and inside was a stolen 6000 sq. ft. home.

I tell ya, its getting bad out there!

#191 Donald Trump on 07.28.13 at 12:55 pm

#118 Waterloo Resident on 07.27.13 at 4:36 pm

So where does that leave the Canadian woman? Well; she will then feel as if she is married to a dead-beat who cannot keep her satisfied, and she will divorce his sorry a$$ and try to find herself a better model, or just turn into a lesbian (which seems fashionable these days) and live with another woman instead.

When a woman understands that her husband cannot keep her in the comfort that she has become used to, she feels cheated and won’t tolerate him being around anymore. So as more and more men lose their homes, so will they lose their wife and kids to divorce. Not only will trustees in bankruptcy be hugely in demand, so will divorce lawyers too, and this will continue for the next 8 to 10 years.

Already there is a huge and growing movement of “MEN GOING THEIR OWN WAY”, men who see that there is nothing to gain by getting married to a woman, and as this divorce epidemic catches up steam the younger generation of men will see all of it and be so afraid of getting married that it will become near-impossible for a lady to get a guy under 30 to agree to get hitched.

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

If one studies the issue, it comes under the umbrella of Cultural marxism an the Communist manifesto.

The target is the family unit, which then attacks the cultural unit, hence setting people of for central governace model. The feminist movements intent was to make women feel like their status quo was inferior and men were to blame. The solution was to get a career and be liberated sexually as well.

This then leads to higher divorce rate if married at all. Or, delay having children which they are finding is lowering the odds of conception. Then you ship the kids to some marxist public school system that is set up to indoctrinate the aforementioned .

Later create “reality”(= fantasy)TV shows to give high expectations in all facets of life…so that he has to marry a “10” ..she has to marry an “11” and have a house neither of them can afford.

Then they find the birth rate is low and Gov’t says “oh no we must bring in more immigrants to fix this “.

All by design folks..look it up

#192 Old Man on 07.28.13 at 12:56 pm

#182 Old Man – I know some of you in this room seeing the star act being the Queen will think bad thoughts, so must come clean. The Hotel in question was the Skyline Hotel, and the British Pub had the best act in Toronto from England called the Queen and her Pearly Kings that ran for years. I am sure some of the women will think unkindly of me for being a cheap date, so what can I say? Never mind, as we went upstairs to the top floor afterwards to dance the night away.

#193 Rabbit One on 07.28.13 at 1:06 pm

I found one of the most effective mortgage payment be regular lump-sum payment to principal.

Most banks allow 10~20% lump-sum payment to principal every year even if you are in fixed term.

Or, just try put $1,000 or $2,000 upon your mortgage renewal time. Just a small lump-sum payment has more effect than you think.

More frequent mortgage payment like instead of monthly, but go weekly is good as long as you and your account is organized.

Someone above says matching mortgage payment to your in-flow, that is more realistic and easy to manage to most people.

Who can manage, go for bi-weekly “rapid” or weekly “rapid”. Means some extra payment, more $ goes to principal.

#194 Dad on 07.28.13 at 1:43 pm

DELETED

#195 Canadian Watchdog on 07.28.13 at 2:33 pm

#189 JimH

There is lots to read at http://pragcap.com/ that you might find helpful.

There's probably more to unlearn then learn in that link since nothing can be as idiotic and baseless then a Keynesian socialist trying to explain how more government spending and taxes is the way forward to full employment.

#196 Old Man on 07.28.13 at 2:53 pm

I find this somewhat ironic that some men in this room believe that women do not have money, and the men are targets; not so in the least. I in my young was dating a gal that was about 22 years old that wanted marriage, as we both lived in the same apartment building. She asked me out for breakfast at the new Granite Club as was a member, and signed for all; she was well known, and showed me around.

This young gal was humble about her family wealth, but insisted that could drive her new Benz, as was her man. Now if I was a SOB in life could have married her for the money, but did not. Her mom died and left her about $5 million on the side, and another $15 million in Trust, and this was during the 1980’s. So #192 Donald Trump has no clue.

#197 Donald Trump on 07.28.13 at 3:16 pm

#197 Old Man on 07.28.13 at 2:53 pm

Thanks for more of the same incoherent rambling about anecdotes of all the people that influenced you to be the person you are today.(OMG)

People that whine about this- and- that just haven’t figured it out yet, it is all by design, and not any sort of positive evolution.

I feel sorry for the “millenials” , that they have run this gauntlet of marxist engineering and had this big target on their backs since day one.

I hope they figure it out ASAP before SHTF

#198 someone on 07.28.13 at 3:19 pm

Donald Trump #192 said:

“The feminist movements intent was to make women feel like their status quo was inferior and men were to blame. The solution was to get a career and be liberated sexually as well.

This then leads to higher divorce rate if married at all. Or, delay having children which they are finding is lowering the odds of conception. Then you ship the kids to some marxist public school system that is set up to indoctrinate the aforementioned .

Later create “reality”(= fantasy)TV shows to give high expectations in all facets of life…so that he has to marry a “10″ ..she has to marry an “11″ and have a house neither of them can afford.

Then they find the birth rate is low and Gov’t says “oh no we must bring in more immigrants to fix this “. ”

I agree with this! I disagree that it has anything to do with marxism, though. Women’s lib, getting women into the work force effectively doubled the labour pool, which had the effect of bringing down wages. That plays right into the interests of capitalism. Bringing in more immigrants also increases the supply of pliable labour and brings down wages. Again, that plays right into the interests of capitalism.

People have to realize that most lefties in Canada and most NDP voters and feminists and advocates for immigrants–all of these groups are not marxists. Marxists care about social class above all else. The lefties today care about women’s rights, global warming, immigrants–essentially, identity politics. The left has been neutered by political correctness and identity politics. There is no real marxism today. There is no political outlet for social class issues in Canada. The working class are reeling in Vancouver with all the HAM investors pushing us out of our communities. The NDP says nothing. That’s because the NDP doesn’t really care about class, it is not a marxist party. The NDP cares more about identity politics and immigrants. Identity politics has co-opted the political left and brought in all these things that Donald Trump mentioned in his post, but that actually serves the interests of capitalism. Especially the reality TV stuff that Trump mentioned about fueling the desire for consumerism of granite and pot lights–that serves the interests of the real industry, capitalism–not the interests of working class people.

For me, the answer is a resurgence in class politics that is nationalist in nature. We need policies that put the interests of working class people born in Canada ahead of everything else.

We need livable wage so a man can go to work and support a family on one wage so that a woman can stay home and look after the kids if she wants to. The kids will turn out better than if you ship them off to daycare. Why do we have so much social dysfunction these days? Could it be that kids are raising themselves.

#199 robert james on 07.28.13 at 3:26 pm

And direct from Kelowna, the crime capital of Canada we have a Tattoo show… How fitting !!! lol I predict a huge tattoo removal industry in the not too distant future when all these goofs come to realize that looking like a “Hastings and Main crack whore ” isn`t all that cool after-all.. http://www.castanet.net/news/Kelowna/95716/Get-inked-at-the-Okanagan-Tattoo-Show

#200 Ahead of the Curve on 07.28.13 at 3:45 pm

I really wanted to add something positive to the comment section, but when you start a blog with porn it makes it more difficult.

House porn? Really?

—————————–

#4 POD on 07.26.13 at 5:30 pm
I’ve been waiting to buy a house for 4 years, and I’ve now run out of patience. This crash will never happen. Wish I had never come across this blog, it cost me hundreds of thousands of dollars.

I’m meeting an agent next week to start looking aroung.

Yes, blame it on a blog. That’s manly. — Garth

————————-

In seriousness, reading through comments like that, I think it’s important to recognize that real estate in the GTA has in my opinion several upward pressures that often go unmentioned.

1) Interest rates: Historically low, push people to get a higher loan than what they would have otherwise been able to obtain.

2) Immigration: Canada receives about 250,000 immigrants every year, and about 100,000 settle in the GTA. They have to live somewhere.

3) Unemployment: The city of Toronto published that it’s unemployment is sitting at 8.13% and has been declining for the past few years. A lower rate of unemployment signals confidence from the consumers, who then buy real estate.

4) Lack of land: With the greenbelt in place, we have a de-facto construction limit. While there is still great amount of land, try to find new Single Family Homes inside Toronto. This also places upward pressure on SFH inside the city of Toronto.

5) Great country to be in: let’s face it, Canada is a great place to live and have a family. This is dream shared by many non-Canadians who wish to immigrate here. While the investor categories for immigration have been paused, the government appears on the surface akin to attract highly skilled labour to meet local needs. This too will place upward pressures on real estate.

POD, the key is to understand that real estate is an investment like any other, that you should consider based your own financial and personal circumstances. I own my house and love it, and would never consider renting (I am OK with my house depreciating). But you should be very careful, particularly if you are fully invested into one asset only before going all in. Real estate is illiquid, currently severely overpriced, hard to sell, has additional expenses on closing (particularly if buying in city of Toronto), it’s due for a correction, etc.

You have no one to blame. You are responsible for your own life. Do your research, ask experts, analyze your options. Make a decision, and follow thru.

#201 Old Man on 07.28.13 at 3:48 pm

#198 Donald Trump – you are a loser in life and this is my message for you which is the finger in life _I_ need I say more?

#202 45north on 07.28.13 at 4:26 pm

Mofo and then Marginal:

Regarding the link and 306k program defaulters

The HAMP program was meant to help home owners stay in their homes.

http://www.greaterfool.ca/2013/07/24/whoopee/

I just listened to Dan Rather’s report on youtube. Very credible.

I fear that a similar program is coming to Canada.

#203 jess on 07.28.13 at 4:30 pm

debt relief Iceland as haircut to foreign creditors?

get elected or a downgrade?
payments on inflation-linked loans soared /36 per cent depreciation of the currency.

http://www.irishtimes.com/business/economy/iceland-proposal-to-write-off-debt-triggers-s-p-outlook-downgrade-1.1476411

#204 daystar on 07.28.13 at 4:32 pm

“People that whine about this- and- that just haven’t figured it out yet, it is all by design, and not any sort of positive evolution.” – Donald Trump

Hence, the explanation of DT’s own pious, negative nature.

http://dictionary.reference.com/browse/pious

“I feel sorry for the “millenials” , that they have run this gauntlet of marxist engineering and had this big target on their backs since day one.” – Donald Trump

More false sincerity. I detect a wealth or class distinction with money somehow equating to greater self worth or self esteem here for DT, the most likely root of the cause being low esteem or low self worth. I am rich while most others are poor equates to “I am worthy, I am superior”. There seems to be this impersonation of a famous person who is known to be financially successful (usually). Plenty of grandiose, past evidence of failure to accept responsibility for one’s own actions… as I psychologically profile I see:

– lack of empathy
– false sincerity
– idolizes material achievements
– problems distinguishing the self from others
– Using other people without considering the cost of doing so
– Pretending to be more important than they really are
– evidence of narcissistic abuse and supply on this site.
– grandiose sense of self worth

Its not all that hard to conclude that we have yet another blogger with NPD, most likely “aggressive”. Looks like we will all have plenty to learn from DT going forward:

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

(a word of caution, do not try this with real identities at home as narcissistic abuse is not a fun thing to be the target of so play nice at home :)

#205 Donald Trump on 07.28.13 at 4:42 pm

#202 Old Man on 07.28.13 at 3:48 pm

#198 Donald Trump – you are a loser in life and this is my message for you which is the finger in life _I_ need I say more?

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

Do you only have 3 fingers ?

How many toes ?

#206 Stoopid Idiot on 07.28.13 at 4:48 pm

espressobob on 07.26.13 at 9:54 pm

Buy signal on gold. It’s halarious how the analysts work their theories on that one? Problem is retail investors get sucked into that trap. It never ceases to amaze!

Bob… what is the average cost per ounce for production? Confine your statements for that in which you are qualified to speak on… amazed or not

#207 gta realtors hungry for money on 07.28.13 at 4:53 pm

Many realtors here are hungry for money as many haven’t made a sale in almost a year. Majority of realtors don’t even have a single client today and sales have dropped quite a bit. Many American hedge funds are short Canadian housing market. These are the same guys who profited off the US housing crash and now bet billions against the Canadian housing bubble

#208 JimH on 07.28.13 at 5:54 pm

#197 Canadian Watchdog

You haven’t read a thing in that link and therefore remain ignorant and myopic. You can’t even spot the trend in the link YOU provide!

Throwing cheap labels around just makes you look and silly.

Go and read! (and have a nice day!)

#209 Agio on 07.29.13 at 9:34 am

Houston and San Fran are sleepy little towns? There is more industry in Houston and more wealth in those two sleepy little cities than Brad Lamb could ever get his greasy mitts on in your vaunted GTO.
Another little tidbit. The vast majority of people living in Manhattan proper rent in rent-controlled apartments. Often at ridiculously low rents. I lived on W42nd for a year, you?
There are 5 boroughs in NYC, read up on ‘em and also the sleepy little highly sought after towns outside NYC proper. Better yet get a passport or have someone smuggle you across the border in the trunk of their car (preferably high noon in mid August) and check it out for yourself. That clear enough for ya?

#210 Rational Optimist on 07.29.13 at 11:37 am

181 Ret on 07.28.13 at 10:34 am

You’ve talked about Hamilton before, and I largely agree with your assessment of its likely prospects. Bringing up Detroit is hyperbolic, but it seems more probable that Hamilton will face a bleak future than a bright one, at least for the medium-term. Much of Ontario probably will, who knows to what degree.

The question is, why would you want to buy at all if you believe that? You may have compelling reasons for being in Hamilton now (a job I’m guessing- me, too), but if you think there is a probability that it will not exist in the future, stay flexible. Buying a half a million dollar home in Ancaster is a senseless idea if you think that job and income growth is going to slow (or go negative) in Hamilton/Burlington/Oakville, or even if you just believe that commuting costs to Burlington and Oakville will increase, making Ancaster and Waterdown less desirable.

You must have a compelling reason to want to buy another house, too (need more space is the usual one). You might do really well to sell now, rent something larger for a few years, and then look at buying down the road. There’s probably going to be a lengthy period for people in your situation in which it’s impossible to sell (because you have a certain price that you want or perhaps even need, and some expectation of getting it), and also impossible to buy (because most potential sellers will have the same idea). We could be there already.

I think there’s a good chance that it will be a longer wait than next Spring for price decreases.

#211 Mofo on 07.29.13 at 2:01 pm

US recovery runs strong:

http://www.cbsnews.com/8301-201_162-57595861/80-percent-of-u.s-adults-face-near-poverty-unemployment-survey-finds/

… indeed…

#212 WhiteKat on 07.29.13 at 2:26 pm

@The American,

An awesome article titled: “FATCA: ‘Simple premise’ gone terribly wrong” was published today on The Hill’s Congress blog, written in collaboration by one Canadian ‘US person’ and one French ‘US person.

http://thehill.com/blogs/congress-blog/foreign-policy/313775-fatca-simple-premise-gone-terribly-wrong

#213 espressobob on 07.29.13 at 6:55 pm

#208 Stoopid idiot

The cost of production for an ounce of gold? Why not ask Barrick or goldcorp for their hedging & costs? How the hell is a retail investor to wrap their heads around those numbers and make an investment decision? In case you have been sleeping at the wheel, take a look at what the professionals like Sprott, Embry, Rule and countless others have well “screwed up” ?!?!

That bodes well for a portfolio which is diversified & balanced and don’t forget to rebalance!