Just call me God

Was “The Garth Turner Factor” responsible for flushing Toronto’s healthy real estate market? This guy thinks so. Apparently he has discovered that I am both omnipotent and omniscient. Not to mention omnivorous. — Garth

Did Garth Turner ImpactToronto’s Market?

John Pasalis in Toronto Real Estate News

When economists see a significant and sustained deviation from recent trends in data, they try to find the factor(s) that may have contributed to this shift. For example, the Toronto real estate market experienced a very sudden and sustained increase in the number of homes sold last year. Most economists attributed this increase in demand to the introduction of 40 year mortgages which suddenly made home buying more affordable.

Toronto’s real estate market experienced another significant and sustained deviation from recent trends, this one beginning in April 2008. The chart below shows the number of new listings (homes) available for sale through the Toronto Real Estate Board for each month since 2006. New listings should not be confused with total inventory or active listings which I talked about last week. Total inventory refers to the total number of houses available for sale in any given time period. New listings refers to the number of new houses that came on the market in a particular time period.

Note that the number of new listings for each month in 2007 was quite similar and moved in relative unison with the volume in 2006.

New listing volumes for the first three months in 2008 (green line) started out lower than both previous years, in part due to Toronto’s heavy snowfall this year, but in April 2008 the number of new listings surged by 37% over the previous month and was 18% higher than the volume for April 2007. For each of the past four months the number of new listings on the market have been anywhere from 8% to 18% higher than the previous year.

How do we explain the sudden and sustained increase in the supply of new listings coming on the market?

The Garth Turner Factor

This year Canadian MP and author Garth Turner released his cautionary outlook for Canada’s real estate market titled Greater Fool. Garth Turner warns Canadians that Canada is poised for a housing crash similar to the one taking place in the US. Turner advises Canadians to sell their house now and rent if their home makes up more than a third of their total net worth.

The book was released in March 2008. The following month the number of new listings on the market jumped by 37%. Did thousands of people in Toronto heed Turner’s advice to sell their house?

Turner’s influential book and blog may have played some part in the rise in April’s new listing volume but the heavy snowfall from January to March also played a roll. Many sellers held off on listing their house during the winter months because the heavy snowfall made it difficult for buyers to look for houses.

While the harsh winter may help explain the rise in April’s new listings how do we explain the sustained increase in new listings from May to July? Is this short term trend an indication that more sellers are looking to “cash out” at what they perceive to be the peak of Toronto’s real estate market?

Perhaps, but part of the increase in new listings may be explained by the many price changes we are seeing in Toronto’s real estate market. When a realtor wants to change the price for their listing at 123 Main Street for example, they can either update the listing for that home with the new price or they can take 123 Main Street off of the market and then upload a new listing for 123 Main Street at the new price. The advantage of the later approach is it resets the Days on Market for the house back to 0 making the listing look newer than it really is. One of the problems with this is that both listings would be counted as new listings because they would have different MLS numbers.

Some agents actually use this price changing strategy as part of their marketing plan for selling homes in a slowing market. The agent will list the house at a high price and if the house does not receive an offer within 10-14 days the agent will take the house off of the market and will relist it at a lower price. Even if the agent and seller don’t want to reduce the price for the home, the agent will still take the house off of the market if it doesn’t sell after 10-14 days and will relist it at the exact same price in order to reset the Days on Market. The agent will continue to relist the property every couple of weeks until it sells. It’s not uncommon to see the same house listed up to 4 separate times by the same agent. In this case TREB’s data would show 4 new listings when there should have been just 1.

This strategy to relist the property in order to reset the Days on Market is not new but has probably been occurring more often now than in previous years given the slowdown in Toronto’s real estate market.

Due to the limited data available it’s tough for anyone to say conclusively what’s driving the increase in new listings but I suspect that it’s a combination of the factors outlined above which are all signs of a slowing market. I’ll be keeping an eye on this data to see if this trend continues into the fall or if new listings return to 2006/2007 levels.

John Pasalis is a sales associate at Prudential Properties Plus in Toronto and a founder of Realosophy.


#1 Keith in Calgary on 08.20.08 at 1:21 pm

So Garth……..

Dos this mean that we are going to have to build an enormous bronze statue of you, and perform ritualistic human sacrifices of realtors at your feet ?

Personally, I’d rather see a statue of you standing on a huge pile of money, with a flag (sorta like the Iwo Jima memorial) that says “stop the insanity”.

#2 Toronto Crash on 08.20.08 at 1:22 pm

Heheh….Garth must be responsible for the Worldwide Recession too…

These Real Estate Agents will find every excuse in the book to blame for the Real Estate Market crashing.

I have spoken to alot of Agents in Toronto that are “waiting until September” to list homes, hoping things will pick up. Wait for a huge inventory of homes to come on the market in September, which will only add to the already huge inventory of unsold homes in Toronto.

This is when the market in Toronto will go from a “correction” to a “crash”.

By the way, the same guy did a poll on his site and by a large margin most people that voted are saying that Toronto is in for a huge correction in prices.


#3 pete on 08.20.08 at 1:35 pm

The spin doctors are working overtime to find the greater fools. They even admit using manipulation ” resets the Days on Market for the house back to 0 making the listing look newer than it really is.” What other manipulations do they use that they don’t tell you? Bidding wars? Who is the watch dog for these obvious snake car sales people? The housing crash is here and they will lie and spin their way into a sale. Remeber they make a living from selling and even the RE agents in the US have been screaming buy all the way down.

#4 Trekie2 on 08.20.08 at 1:40 pm

I don’t often say this about others BUT John Pasalis is a fool….what a waste of my time reading such rubbish….

#5 BBC on 08.20.08 at 1:51 pm

‘Now I lay me down to sleep. I pray to Garth my soul…..’

Please people…spare me! But if you do have any pull with the big guy Garth…could you bring back my beloved doggy who passed away 4 years ago????

#6 pete on 08.20.08 at 1:52 pm

LOL….i forgot it’s also all of Garths fault. The propagandists/spin doctors are working overtime to find blame. Oh it’s the weather! no it’s millers tax oh no it’s Garth, no it’s just agents playing games. It’s just _____________!

#7 mike on 08.20.08 at 1:52 pm

Wow. An author-and-blogger’s opinion may have impacted public behaviour.

Where’s the news?

As for the subtle implication that Garth Turner caused overvalued Toronto real estate to start a correction, just by writing about it? That’s a lot of power, Garth — could you work on the price of gas and then maybe the weather when you have a chance?

#8 kabloona on 08.20.08 at 1:56 pm

Hmmmmm…..I listed my house in the GTA last year and sold (eventually) in May of this year (for a good price, whew!) and I had never heard of Garth’s book until after the fact.

I’d been worried about the over-heated Canadian housing market for a couple of years….and I really started sweating after the wheels came off down South and the usual suspects up here in land of the oblivious chimed in with their reassuring chorus of baloney about our Canadian economic “exceptionalism”: e.g. we’re immune from a credit crunch in the US (ha-ha!), our economy is immune from a US recession (double ha-ha!!)….nothin’ to see here, folks, just keep buying…..

Yeah sure, flaherty and harpo….. ;-)

#9 Nicholai V on 08.20.08 at 1:56 pm

“The Garth Turner Factor” may indeed have given some initial momentum to increased listings in the GTA. This blog alone has many followers who I’m sure have taken action that they otherwise wouldn’t have if it weren’t for your book and this forum. Having said that, its likely a piss in the bucket compared to the reality of the changing market.

#10 Calgary_rip_off on 08.20.08 at 2:01 pm

Nice article Garth. Keep it coming.

I hope you have an impact here in Calgary. Its needed badly.

The services sector is suffering here because workers cant afford rent.

Things have to change in Calgary.

#11 Truth or Talk on 08.20.08 at 2:06 pm

It amazes me how people are still trying to convince themselves that we’re immune to the problems that are unfolding globally. I am amazed that seemingly well-educated peopled can believe “our market can’t do down” because “blah, blah, blah.”

I would argue that even if we didn’t have a problem, we would have a problem, simply because of the contagion problem of global markets:

* China’s stock market is now down 65% from Nov 07. if their economy falls, then we are really in trouble b/c they’re the main reason global commodity markets are doing so well.
* US banks are much less likely to lend here, with capital problems back home.
* Foreigners are less likely to buy real estate here, with problems back home.

etc, etc…


#12 CC:Ottawa on 08.20.08 at 2:12 pm

Well, here we go. When I have ticking time bomb in my hand and I don’t know what it is, then the person who educate me about the danger of having ticking time bomb in hand is at fault. (As far as public education goes). That’s why the whole banking system works and public will continue to work as slave for many more years in life. (Just to catch the illussionary wealth)

#13 Calgary_rip_off on 08.20.08 at 2:13 pm

Here is what $340,000 will get you in Calgary.

Highly ethical, considering the house when it was built was probably $10,000.


#14 Jim_s on 08.20.08 at 2:15 pm

Three years ago anyone with half a brain could figure out that RE was on a runaway train in Alberta….. doesn’t take a finance degree to figure out that if the average family income cannot afford the average home price, something is seriously wrong.

Comments from anyone with a financial vested interest in RE (realtors, brokers, mortgage lenders) are worthless.

And if this guy thinks only Garth is responsible for the downturn, then he needs to educate himself on the sheer volume of blogs out there that identified the affordability problem long before any paid shill did.

Blogs like Alberta Bubble, Langley Financial, Housing Panic, to name a few.


#15 pbrasseur on 08.20.08 at 2:32 pm


No you’re not God, but I’m pretty sure you enjoy the attention ;)

A market takes information from many sources, that’s what markets are about, your voice is one source. Your message carries because it has (some) merits, not because of the messenger. If it had’nt been you it would have been someone or something else.

That being said it is evident that new information was provided to drive the current shift in the market. At first the “negative” information is tentative, almost a rumor, and the reaction is subtle but later the message gets stronger and becomes dominant as a full fledge bear market kicks in.

The question is though why do markets so often become irrationnal in one direction or another?

I don’t have the definite answer really but I’m pretty sure this refers to group psychology and my feeling is that the group is influenced by “experts” which screws up its jugement and is plagued by imitation.

That’s why your message is welcome, if anything it encourages people to think independently.

#16 Out of the market... on 08.20.08 at 2:47 pm

That’s funny!
We sold out in February before we even heard about Garth’s book/blog. We’re now renting while we wait – many people think we are nuts.
Anyways, somebody has to be blamed – guess that would be you Garth…

#17 Videl on 08.20.08 at 2:51 pm

OMG Garth, please have mercy on these poor RE guys. They are not as bad as you’d think when compared to the whole as an average. They do force the things a bit, sometimes but hey they also help people build dreams, make believe, put a roof above their heads and all the beautiful things themselves like to point to while waiting to count the commission on their way home to their families. In a world left without much beauty and respect for anything but self interest and $$$, is that their fault? You, on the other hand seem to love to destroy dreams, how is that nice?

A previously happy dream owner :(

#18 jim on 08.20.08 at 2:58 pm

Not sure if Toronto will see a significant correction, but my family is predicting an October ‘08 bottom for Calgary’s single family median price (from the June ’07 peak of $439,000). We have a February Vallarta bet going… and yes, my one brother has chosen as far out as December, but the other 3 of us chose Aug/Sep/Oct.

Some of our reasoning:
– sales to new listings ratios have been climbing for months now
– absorption rates (months of inventory) have started falling from their peak of 6
– a further drop in inventory is coming as less housing starts this spring will lessen the supply of homes this fall
– the supply of condo’s should also fall significantly as i know one large investment group is about to begin buying up units (in past plateaus/corrections, other investors have often followed this group’s lead)
– as many do, my family believes global peak oil production was in 05/06. We’re the only country capable of tripling production and there’s currently $273.2 billion in 1,177 major projects in Alberta (some of it oilsands related)


– as resale home prices have decreased and salaries risen, Alberta is once again among the most affordable provinces in Canada.
– net migration has shifted and will accelerate from four main areas; 1) Ontario factory workers – ie. ON lost 41000 manufacturing jobs in July, while AB gained 7000 manufacturing jobs 2) previous BC forestry workers and Olympic venue tradespeople 3) Saskatchewanites starting to return as affordability indices in that province are now much higher, and 4) increased international immigration to help fill the thousands of jobs unfilled in Alberta (Calgary attracts many of these migrants).
– CMHC’s recent price forecast also lends evidence to a Fall ’08 bottom:
‘the average MLS sale price in the Calgary area is expected to rise from $414,066 in 2007 to $418,000 this year and $430,000 in 2009.’

Anyway, since I share these numbers with my new colleagues and friends, thought I’d share them on here.

And yes squidly77, since I can almost read your mind ahead of time, i’ll quickly answer your question in advance …where will the laid off construction workers from the residential sector find jobs? For starters, there’s currently over 10 million square feet of downtown office space under construction in Calgary. Imagine how many office desks that’ll require as those towers complete…


#19 Dear God... on 08.20.08 at 3:17 pm

That guy postulates a theory based on nothing and then says the data isn’t available to prove him right.

B.S. Do a random sample of 250 homes on the market and see how many times it’s been “re-listed”. Then, get this, M-u-l-t-i-p-l-y!
If you’re published in a news letter, you have the time to do the study.

We all know what he postulates as the reason for higher listings figures is pure B.S. – heck all you have to do is drive down any friggin’ street – but the fact that he doesn’t give any due diligence to proving/disproving his ridiculous claim makes him look like an idiot. Sorry to say it, but it does.

Assuming his claim is even correct, he’s already stated that the reason agents are re-listing is cuz the market sucks. Well, you just said the market sucks. What more proof do you need?!?!? QED, doofus.

#20 Expat in NC on 08.20.08 at 3:35 pm

Originally from Toronto, I currently live in a suburb of Raleigh, NC. My neighbor is a realtor here and she informed me that this practice of removing listings and adding them back again to reset the days is not allowed here.

Not sure if that is a US wide realtor law or not, but it makes sense to me and the same law should be extended to Canada.

It’s just another deceptive trick (like they don’t have enough) of the trade.

#21 Mike B formerly just Mike on 08.20.08 at 3:58 pm

Hey Garth

While you are correcting the entire country’s real estate market could you set aside some time to make it shine a little more next week and perhaps on sunday give us a bit of wind so we can fly a kite at the park. If it is not too much to ask that is.

#22 McSteve on 08.20.08 at 4:24 pm

This still doesn’t explain the rise in listings since this is not a new tactic, discovered this spring. It does explain that:

1) Unscrupulous agents will lie in order to sell houses


2) People have unreasonable expectations and of their property values because their land is not moving in a “hot” market – untouched.


3) People aren’t willing to pay the owner what he wants because it is perceived to be too much money.

#23 Boone Pickens jr. on 08.20.08 at 4:25 pm

I for one look up to Garth for making this blog available, I have learned tons from this site. And it’s great if homes come down if they’re not affordable enough.

I learned something yesterday from a realtor that kinda blew my mind – he said prices have FALLEN alot more than what price stat’s show.

He said let’s say you’re in a booming market where all of the 100 houses in an area for sale, sell. 50 of them were nicely maintained that sell for $500K, and 50 of them were junkers that sell as fixer-uppers for $400K. Then the average price would be $450K.

Then a year later he said in a correcting market, those same houses go up for sale (job transfers, and reno’s completed on junkers) – this time only 25 of the nicely maintained sell for $500K, however the owners had to put an average $25K into cosmetic updating to get them to sell. And of the previous junkers, 25 also sell – but, the flippers put an average $100K into each and they sell for $450K. He said the junkers are usually in worse areas to begin with, and when markets turn, flippers with holding costs, etc. are very much in risk and need to sell quick. Anyway, even though sales dropped 50% in the year, the average price ‘seemingly’ went up about 5% to $475K.

HOWEVER, to the 25 ‘nicely maintained’ 1 yr home owners, they LOST 5%!

And the 25 ‘one yr flippers’ LOST 10%!!

#24 islander on 08.20.08 at 5:40 pm

Calgary Rip-off, supply and demand – not cost – drives prices. If you think that little shack should list for what it cost, you will never buy a house.

@ Dear God and Expat in NC, although some houses are re-listed, it’s a tiny minority. No. 1, it costs money to re-list with the board (Victoria, anyway) and No. 2 buyers aren’t fooled because if they’re working with a realtor he can look in MLS and see the listing history anyway. Where it DOES work is a re-list comes up on realtor’s NEW Listing alerts so if they missed it the first time they might see it the 2nd time around.

In general, it helps to have an attitude toward transactions that has governed the marketplace for a couple thousand years, anyway. Buyer Beware. That’s true when buying real estate. It’s true when dealing with your mutual fund salesman. Your car dealer. Even your doctor and lawyer.

Conduct the due diligence that is appropriate to the amount of money you’re shelling out. If you’re paying $500K for a house, look in the mirror and question your own efforts before pointing the finger at the listing realtor, the mortgage broker, the banks, the federal government, the home inspector, city hall.

Nobody is forced to buy a house after having whipped through it in five minutes. Nobody. If your realtor pressures you into making a decision like this, fire him.

I can honestly say I have never stuck a buyer in my vehicle to grind them. Ever. In fact, I’ve had buyers practically drag me to the nearest coffee shop so they can write up their offers, DESPITE that flaws I’ve pointed out in a property or my advice on price.

BUYERS drive up prices. Nobody else.

#25 Rick on 08.20.08 at 5:45 pm

#4 Calgary R O – That is too funny!! I guess the owner has to use the bushes to have a dump, too!!! LOL

#26 Vlad Poutine on 08.20.08 at 5:51 pm



Slump in U.S. housing market helps drag B.C. economy to new low

August 20, 2008

VANCOUVER — British Columbia’s economy is sputtering as the U.S. housing crisis continues to undermine exports, driving down growth this year to its lowest levels since the Liberals took power in 2001, according to estimates issued yesterday.

That anemic growth will continue into 2009, leaving the Liberals facing voters with a weakened economy and a faltering housing market in the provincial election set for May.

The forecast from Central 1 Credit Union points to a dramatic deceleration this year, with the B.C. economy growing by just 1.5 per cent, said chief economist Helmut Pastrick.

That is less than half the rate of expansion in 2007. Next year is predicted to be much the same story, with growth rising only slightly to 1.8 per cent.

Print Edition – Section Front
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Go to the National section
The 2010 Winter Games will lead to a spurt in economic activity – but the effect will fade quickly, with 2011 seeing significantly weaker growth.

For the moment, exports are the culprit in B.C.’s softening economy, with the forestry sector particularly hard hit.

Next year, trade will begin to rebound, but retail sales and other parts of the domestic economy will decline, according to Mr. Pastrick’s forecast.

The housing market will grow even weaker next year, Mr. Pastrick predicts.

The downturn in new construction will last through to the Olympics, and housing prices, down marginally from their peaks early this year, are likely to drop by 10 per cent before the market rebounds, he said. All told, British Columbia looks set to turn in weaker growth than the national average in 2009 after years of outperforming most of the rest of Canada. However, Mr. Pastrick said it is not likely that the province will slip into recession.

B.C. Finance Minister Colin Hansen conceded that the provincial economy is softening, and that he will need to revise its numbers for gross domestic product from the February budget, which predicted growth of 2.4 per cent this year and 2.8 per cent next year. He is to issue a fiscal update in the first half of September, a briefing that will be his first formal budget presentation.

Mr. Hansen said he believes B.C.’s economy is essentially sound, and that much of the worry is simply an echo from the woes of the United States and Eastern Canada. “The basic economic underpinnings in British Columbia are still very strong,” he said, noting that growth in the mining and energy sectors means that the province is far better prepared to weather a downturn in forestry than it was a decade ago.

Despite the downturn in the economy, the government’s fiscal position may actually be improving, thanks to surging natural gas prices that will more than offset likely decreases in sales and property-transfer taxes, said Jock Finlayson, executive vice-president of the Business Council of British Columbia. Mr. Finlayson said that, from an economist’s point of view, there is no need to use that extra cash to accelerate tax cuts or to boost spending. “I don’t think there’s a lot of things they can or should do. Politically, it’s a different issue.”

Premier Gordon Campbell and the Liberals will have to make it clear to voters that they are taking some sort of action, said Greg Lyle, managing director of polling firm Innovative Research Group. It need not be an expensive effort, he said, noting that the Ontario government’s ads touting career training are a relatively cheap way of garnering points from voters for paying attention to their economic pain. “It’s a challenge [the Campbell Liberals] are going to have to take on squarely,” he said.

Otherwise, the Liberals risk giving the NDP the ability to paint them as arrogant and uncaring.

#27 Calgary Rocks on 08.20.08 at 5:59 pm

Here is what $340,000 will get you in Calgary.

Highly ethical, considering the house when it was built was probably $10,000.

That’s an “R2” lot close to the river. The 350K is basically the land value.

#28 cmh on 08.20.08 at 6:19 pm

John Pasalis doesn’t sound like he’s all that bright. And I am sorry Jim, #8, but I don’t agree with you either. If the world tanks, Calgary isn’t going to be left floating on the top.
And if Garth is God I would like lots of good powder snow to carve my telemark skiis on this winter! But most of all, I’d like world peace!!!!

#29 Renter in Richmond on 08.20.08 at 6:23 pm

How about this one for over 1/2 million? Probably cost 5500.00 new. Has been on the market for about 2 months now.


#30 CalgaryRocks on 08.20.08 at 6:39 pm

You’ve been negative on housing since the 90’s. So you’re clearly not to blame for neither the boom nor the crash.

#31 rant in Calgary on 08.20.08 at 6:48 pm

Does’nt matter what Garth, Realtors or Economist say, opinions won’t dictate/hide the truth forever. The biggest problem is tens of thousands of dollars is at stake. What is market equalibrium? Who do you think is right or less right?

#32 Dave in Calgary on 08.20.08 at 6:58 pm


Can you write a book about girlfriends spending less money?

Thanks in advance,

#33 Rob in Onterrible on 08.20.08 at 7:25 pm

Garth, omnivorous? Gee, I thought you you were a vegetarian!” Just kidding, bad joke. I am curious though. John seems to think that you influenced Canadians with your book. Have you really sold 12.4 million books? That would be one book for every household in Canada and then John’s claim might have some weight. Otherwise just another denier.

Here’s another prediction of a price drop:


Keep up the good work Garth.

#34 timbo on 08.20.08 at 8:22 pm

jim 08
you say a correction is around the corner, I pray you are right,(Work) but by looking at condo’s downtown it seems the speculators are loosing right now.


question? Why is the market reducing prices when the market is going to stabilize?

I in no way am here to ridicule your belief only to understand how you think all these investors are going to come running in when the market is already at capacity or do price declines mean demand is up?

The Big Question —-

And you say……..
the supply of condo’s should also fall significantly as i know one large investment group is about to begin buying up units (in past plateaus/corrections, other investors have often followed this group’s lead)

Are you trying to say that market manipulation away from public eyes is the norm? So I want to buy an apple but there are no apples because you bought them all up and now push the price up and force demand with no intention of eating the apples. then when the apples are now diamond price you dump all the apples and laugh.

If I am stupid I apologize but to me this is a threat to our country’s economic stability and should make everyone think if the price is real. If you mis-typed the statement great because that scares the hell out of me and someone should look into this. I pay taxes and for a investment group to inflate a market price for pure profit on the backs of taxpayers trying to chase the cheese is a sorry ,bitter pill.

You said “one investment group” and yes “one” probably could not really do much to manipulate a market but if one group has the idea and it makes money there must be 100’s out there pushing a price to the max, retreating, and then coming back and pushing again.

I do believe in a free market where everyone is on a level playing field.

I again am sorry if I took the statement the wrong way If this is true and the market is not driven by real demand but large money, manipulating prices on the backs of real taxpayers who know no better and we allow this then “PUBLISH THIS TO THE MEDIA”. You will have a million light bulbs click on at once. There is no way I can compete against investments groups.

Sorry to rant, Your blog garth is addictive, forced to read it every day after getting home and yes I tell people about the book.

Again Sorry for the rant…… Sort of pissed off?!

#35 brazer on 08.20.08 at 8:27 pm


Attn: John Pasalis

i thought you’d like to know that i have read garth’s book and have been posting bearish information all over the internet since.

because of garth’s influence, i have decided to spend as much time as i can possibly dedicate in educating fellow canadians vis a vis garth’s opinions.

i have posted garth’s info all over facebook and other social networking sites in addition to other blogs online.

concurrent to that i have bought copies of his book and given them to all my friends in the real estate market (several decided to sell their condos upon reading the book). in fact, i just bought up another dozen copies and have mailed them out to various friends across the country!

now, if this is just garth’s influence on “me”…can you imagine what thousands of could accomplish working together in spreading garth’s message here in canada?

wow…it boggles the mind…i never thought i’d think it was possible, but it does appear that one person’s opinion (in this case, a lone wolf mp with a penchant towards writing real estate columns) has managed to start a movement to crash the canadian real estate market – how right you are in calling out the ‘garth turner factor’.

i hope that you are your co-workers at realosophy (very catchy name by the way – great imagination!) are not adversely affected by all this bear talk. you seem like a bunch of smart young folk and i’d hate to see any of you get squashed in the coming garth-induced real estate crater that is coming.


#36 Future Expatriate on 08.20.08 at 8:51 pm

Videl, you piously pontificated:

“OMG Garth, please have mercy on these poor RE guys. They are not as bad as you’d think when compared to the whole as an average. They do force the things a bit, sometimes but hey they also help people build dreams, make believe, put a roof above their heads…”

VIDEL!!!! NEWS FLASH!!! Paying a no-down mortgage on a house that has been pumped up and overvalued double what it’s really worth by realtor lies, tricks, and outright market manipulation, and ending upside down in a crashing market because of said realtor malfeasance (because everyone is doing it), is a hellish nightmare, not a dream!

Yeah… realtors… Lucifers, the “light” bringers… the only thing worse are the real estate industry’s mainstream media “lying head” whores.

#37 brazer on 08.20.08 at 8:58 pm

Fannie, Freddie shares plummet

“There’s a big negative feedback loop and there’s no way out of it,” Friedman Billings Ramsey & Co. analyst Paul Miller said in an interview. “As the stock falls more and more, it’s more likely the government steps in and more likely equity holders get wiped out.”

#38 Bill on 08.20.08 at 9:26 pm

Not hearing too much about Vancouver. Is Vancouver immune to this crash? Money is still cheap. I just refinanced at 4.25%. Low interest rates keep prices high. What is the take on the future of interest rates?

#39 Toronto Crash on 08.20.08 at 9:27 pm

This guy is a piece of work. I guess Garth is to blame for the Global Recession?

Most Agents I have talked to in Toronto are “waiting until Spetember” to list hoping things will be better. Watch for inventory to spike which will only add to the glut of unsold houses in Toronto.

Sept/October is when the market will be down year/year and the panic will set in.

By the way, this same guy did a survey and most people thought that a major correction is coming in Toronto.


#40 Don't Get it! on 08.20.08 at 9:51 pm

Boone Pickens Jr …. What was that? Sorry dude, I don’t follow what you are trying to say other than people are losing money.

Regardless, Garth … keep saying what needs to be said as I have less respect for some one who is changing listing dates on MLS listings than some one is just stating the facts.

I have noticed this as well … about a year ago, I was looking and then decided to wait. A property I had my eye on was “Newly Listed” 4 times.

Just the Facts ma’am, just the facts.

#41 Al on 08.20.08 at 10:12 pm

Pretty common tactic, and a valid argument. That is why existing listings is a way better measure of market activity.

#42 squidly77 on 08.20.08 at 11:09 pm

human nature drives every bubble

#43 squidly77 on 08.21.08 at 12:13 am

is this respectful behaviour for a realtor i think not
he chooses what he allows to be posted
his words of choice are prostitution and selling ones mom

#44 jrochest on 08.21.08 at 12:24 am

Jeeze, i don’t know why my posts are being accepted — Garth, if I’ve posted the same one three times, just delete all but the last one…

#45 jrochest on 08.21.08 at 12:25 am

“Bill” at # 36 said “Not hearing too much about Vancouver. Is Vancouver immune to this crash? Money is still cheap. I just refinanced at 4.25%. Low interest rates keep prices high. What is the take on the future of interest rates?”

Well, I guess Vancouver must be going to achieve a permanently high plateau!

Or maybe not. Why don’t you take a look at http://vancouvercondo.info

http://condohype.wordpress.com or any of the other dozens of Vancouver and GVRD real estate blogs.

I’m sure those might answer your questions.

As for interest rates, are you expecting them to stay below 5% for the 35 years that your mortgage runs?

#46 Blacksheep on 08.21.08 at 12:28 am

Post#8 Jim,

I”m going to take a guess that you have vested intrest in R.E. prices not correcting.

While your assesment of peak oil may be valid, it will bring its own set of challenges.

True Peak oil will cause more wars over oil, double digit inflation & massive hardship for many people and industries.

Much of your post seemed forward looking, phrases such as: “is coming”, “should also fall”, “about to begin” & “expected to rise”

But make no mistake, the bubble has burst, public opinion has turned, and a R.E. correction is happening in many western countries.

Canada is not special and some how immune.

As for a correction timeline, i feel any one purchasing R.E. in the next 18-24 is going to go backward substantially, equity wise.

From what i have read Calgary has had price gains similar to Vancouver.

In a bubble, the amount/time of increases are historically proportional to the amount/time of declines [even tends to over correct, did some research]

By the way, i sold my home in June/08, banked the equity and am renting [bareley got out]

I did not sell my home, hoping prices would fall,

i realized prices were falling, so i sold my home.

I feel Garth’s and others honest opinions will save many people years of anxiety & large sums of money.

My two bits

#47 Adrien on 08.21.08 at 12:44 am

Good Job Garth!!

Perhaps you can write a book now called – “Just Kidding – the whole Greater Fool book was a farce” and maybe inventories will drop and sales will increase as will the selling prices.. (heavy sarcasm here)

Your book is bang on the money – keep up the good work.

#48 squidly77 on 08.21.08 at 1:11 am

leave bob truman a comment on how you feel about his allowed comments
read the newest posts here… to see how calgarians feel about him

#49 Mike.Slob on 08.21.08 at 1:42 am

We have to see facts in 2008:

About Residential Resales in GTA during 2008 are decreased 13%, and inventory volume
is up 28%.Period.

“It’s encouraging to see strong double digits decline throughout all four corners of the GTA”,
Garth what did you do?

#50 jim on 08.21.08 at 1:43 am

timbo #32 ..i apologize if i didn’t word my blurb well.

I can assure you the group I was referring to, in no way tries to manipulate the market by buying up every single rental unit in town. A member friend simply mentioned to me that they think cap rates (capitalization rates) are starting to make investment sense again in Calgary. Sure, they may not make as much sense as a few years ago, but there’s just so much money out there trying to find reasonable ROI’s.
And no, I’m not convinced (even with the some of the bulk deals I imagine they get from developers) that they would come close to break-even cashflow for the first few years – that is until rents slowly come in line.

#51 exx on 08.21.08 at 2:30 am

#36 Bill on 08.20.08 at 9:26 pm
Not hearing too much about Vancouver. Is Vancouver immune to this crash?

Bill, no. Vancouver’s in terrible shape right now. Our inventory has nearly DOUBLED last years (~20,000 active listings compared to ~12,000 same time last year). Top that off with a lack of buyers (-44% sales in July, and a forecasted -50% for this month). We’re currently sitting at 12 MOI (months of inventory) individually for Greater Vancouver & the Fraser Valley. Prices are dropping, even one of our economists whom earlier this year predicted prices to increase by 10% in ’08 and 7% next year is now predicting prices to drop by -10% before ‘rebounding’.

For excellent graphs and analysis check out some of the local blogs. Here are a couple, Financial Planning and Personal Sanity & Paul Boenisch’s Blog

#52 dd on 08.21.08 at 3:34 am

Bill … #36

Look at Seattle and San Fran. This would be your best crystal ball.

#53 Mark on 08.21.08 at 5:39 am

The Calgary market doesn’t deserve to be priced more than a dime higher than the Houston, TX market. That is to say, the land itself has little to no value (there’s not exactly any scarcity of land), and construction costs of $50-$75/square foot for the underlying houses.

The *risk* of being in the Calgary market should also demand a much higher risk premium for owning housing.

And as far as investors buying up condos in Calgary, if they do, those condos will just end up being rentals, which will depress rents in the city, and thus, depress valuations further. Its a nice fantasy to have, believing ‘investors’ will burn up inventory, but the reality is that there’s far too much supply for the population that exists in Calgary, and prices must necessarily collapse to the fundamentals, which would be an average of somewhere between $150k and $250k.

#54 brazer on 08.21.08 at 8:12 am

Gasoline prices pushed inflation rate to 3.4 per cent in July

“The mortgage interest cost index rose 8.5 per cent between July 2007 and last month. That was lower than the 9.0 per cent increase recorded in June, but the easing was due mainly to lower house prices, not lower mortgage rates.

#55 TorontoBull on 08.21.08 at 9:29 am

Some of you have stated that GTA prices have declined since April, which is true. I did an analysis of price movement according to TREB starting from January,2006. The graph shows that prices generally peak in April-May and then decline until August-september. Then prices accelerate again until November. In order to have a clearer picture about Toronto prices we have to look at year-over-year data. I guess we will have a better idea about GTA prices come November…

#56 Calgary Rip Off on 08.21.08 at 9:57 am


As a realtor you havent told me anything I dont know. The problem for realtors in Calgary is this: Not that people arent willing to pay those ridiculous prices, its that they cant because they dont have the money. The cost of a house single family detached is so far out of whack in Calgary for even a family with a decent income. THAT is the problem. So unfortunately the buyers who bought recently will lose money on their equity and realtors will find it harder and harder to sell homes. WHERE are you going to find clients to pay $350,000 for a dump? Its not likely to happen. There are many people in this city waiting because they have no other choice.

Calgary rocks: So its the land value. Brilliant. Either way, those folks are going to have great difficulty selling that R2 lot. Calgary was once known for affordable living. It feels more like New York City here. How insane is that?

The oil incomes have caused a division between the working class and the nouveau-riche(however that is spelled) with their Ferraris. Therein lies the central problem. The houses on mls are NOT worth what the market value is.

Unfortunately the baseline values in homes will probably not be reached. Like food prices not dropping due to less cost of gasoline, so it is with housing.

Lots of fools though trying to find security which will never ever be found, especially in real estate.

Squidly: Keep up your posts about Bob Truman. That guy twists his statistics.

#57 Its Coming!! on 08.21.08 at 11:13 am

read this guys!!!!!!!!!! I think were all in over are head in this country, we think that are prices for homes here are acceptable, come on! Never mind all these stats either, isn’t it common sense not to want to owe someone money for 40 years??????????????? let alone 25 years????????? Can’t wait till I can by a house for 100K again in a good neighborhood.

#58 pjwlk on 08.21.08 at 11:25 am

#37 Toronto Crash: I’ve been reading a book entitled “Manias, Panics and Crashes, a history of financial crisis” where the author states that it’s the instability of the credit market that ultimately starts “distress”, “decline in prices” and finally “panic”. I bet that the cancellation of the 40 yr ams and the 0% down mortgages will be sufficient to start things off here in Ontario. So far what I’m seeing here in Canada pretty much follows to the letter what the book describes. Hang on for the ride!

#59 Sphinx on 08.21.08 at 11:32 am

could you please work on gas prices as well…and grocery too, college tuition for my kids, don’t forget auto prices…what else I could think of???……. I’m just sarcastic :)

back to housing, 5-6 years to hit the bottom, this one is going to be nasty.

#60 Rasputin on 08.21.08 at 11:53 am

Jim #17. About that large investment group that’s about to buy up Calgary condos… they are about to become a small or non existing investment group. This reeks of bs anyways. Banks are getting very wary about lending for speculative real estate. Even the dumbest loan officer has now heard the term ” catching the falling knife” come up in the weekly meetings by now. Hey Jim, why don’t you show us the way and buy up a few condos for yourself. Ohhh, I forgot. You are selling your white elephants. Good luck with that.

#61 TorontoBull on 08.21.08 at 12:25 pm

india is next

#62 Calgary Blog Bunny on 08.21.08 at 12:27 pm

Here’s the actual quote that Squidly is in a lather about:

“I am here(Calgary) for one reason and one reason only – money. For the life of me, I cannot fathom why else anyone would live here. For a big enough sum of money, I’d not only live in Hell itself, I’d take the Devil on as a roommate. Everyone has a price”

Would that guy sell his mother for $50?

#63 Toronto Crash on 08.21.08 at 1:00 pm

Check out the Propaganda that was being spewed from CREAs Gregory Klump only 8 months ago. They were trying to fish in the “last of the greater fools” as the market was just beginning to tank.

Time has proven Mr. Klump wrong, but CREA and TREB are still at it with the lies and spin:

Funny to read this in hindsite.


U.S. slowdown may boost Canada’s real estate market
Jan. 20 2008

Andy Johnson, CTV.ca News

The prospect of a U.S. recession has some homeowners and prospective buyers nervous about the impact on the real estate market in Canada, but one economist says a slowdown could actually boost activity in Canada’s housing sector.


#64 Toronto Crash on 08.21.08 at 1:10 pm

To understand Mr. Klump at CREA, you must look at quotes from National Association of Realtors, the USA equivalent of Canada’s CREA.



August 2005: “There is virtually no risk of a national housing price bubble based on the fundamental demand for housing and predictable economic factors”

August 2005: “All of the doom and gloom forecasts of a housing debacle are not only irresponsible, but also downright wrong.”

April 3, 2006: “We can expect a historically strong housing market moving forward, earmarked by generally balanced conditions across the country and fairly stable levels of home sales with some month-to-month fluctuations.”

June 27, 2006: “Right now we are on course for a soft-landing in housing.”

October 25, 2006: “The worst is behind us, as far as a market correction this is likely the trough for sales. When consumers recognize that home sales are stabilizing, well see the buyers who?ve been on the sidelines get back into the market.”

December 4, 2006: “Its important to focus on where the housing market is now it appears to be stabilizing, and comparisons with an unsustainable boom mask the fact that home sales remain historically high they?ll stay that way through 2007.”

February 15, 2007: “At least the bottom appears to have already occurred. It looks like figures will be improving.”

June 6, 2007: “Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year.”

August 8, 2007: “Existing-home sales should be relatively stable over the next few months, holding in a modest range, with some pent-up demand growing from buyers whove been on the sidelines.”

October 10, 2007: “The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels”

November 15, 2007: “It is possible for even higher home sales activity than were forecasting if buyers regain their confidence.”

December 10, 2007: “Although there could be some minor slippage in the first quarter, existing-home sales should hold in a narrow range before trending up”

#65 Calgary Rip Off on 08.21.08 at 1:24 pm

Blog Bunny:

Squidly makes a valid point. HE is the realtor with the website and makes inappropriate comments. HE is the professional. Yes, irregardless he is human, HOWEVER, it illustrates SOME realtors being slimy. THAT is the point. Realtors are just people, not sure what the big deal is about those comments by Bob Truman, however. Perhaps it is another tangent by the real problem: Bob’s statistics may not be accurate and timely, and irregardless they are distorted to mislead prospective buyers in Calgary that are uneducated that the housing market values currently are 1)worth it, 2)accurate, 3)still in bubble conditions and inflating falsely. That is a lie. The bubble is slowly deflating, how much remains to be seen. Unfortunately there are no statistics to support an ominous crash in Calgary. It appears probably 20% at most which is frankly disappointing.

#66 APCM on 08.21.08 at 1:40 pm

RE: Toronto Condo Market.

I heard from a real estate agent that more than a few buyers of 1 Bloor have walked away from their deposits.
Brokers and buyers hired university students to line up for 2 days straight last year to purchase preconstruction units going for $300,000 and up. The day they went up for sale the price was raised to $600,000 and up. Some people stepped out of line, others stayed.

#67 cmh on 08.21.08 at 1:57 pm

#58 Toronto Bull
Great article posted from “The Economist.” Still not sure why some feel Calgary will come out of all of this unscathed. I know of four couples who have purchased homes here with mortgages four times their combined salaries. They have voiced concerns re: their collosal mistakes in purchasing these expensive homes, particularly since inflation is creeping up and therefore interest rates will go up. (one couple told me they weren’t worried when they first decided to buy, because their financial planner said there were too many protective devices in place today to prevent drastic inflation and rises in interest rates). They all express concern that they will not be able to make payments if their mortgages double when they are up for renewal. Two of these people also lease Lexus SUVs. When this conversation occurred, other people in the room were getting anxious. How will immigrants be able to afford these monstrous places, and how will all the forestry workers who’ve been laid off in B.C. be able to afford them. Further, people arriving in Calgary after losing their jobs in Ontario or B.C. are currently unable to sell their homes where they’ve come from. So, I’m not sure this is going to help Calgary.
The people I’ve mentioned who are nervous about increasing mortgage rates all work in the petroleum industry. Certainly, there must be more people like these ones in Calgary. Given our precarious global financial situation, where will all of this leave Calgary?

#68 wealthy renter on 08.21.08 at 2:19 pm

“I think were all in over are head in this country, we think that are prices for homes here are acceptable, come on! Never mind all these stats either, isn’t it common sense not to want to owe someone money for 40 years.”

It’s Coming,

I completely agree with your latter statement about the 40 year mortgages. However, I don’t buy the notion that everybody is over their head. I truly suspect that most of the readers and contributors to this blog are reasonably wealthy, or looking for means to build a good life without wearing the cement galoshes of a 40-year mortgage.

My wife and I are in a situation where owning a house will be detrimental to our finances and retirement goals. We both have recession-proof jobs, and monthly & aggregate savings yielding much more money than any house could ever make for us. To that point, we are both dumb “out of the real world” science types, and both a little bit awed by how much wealth rigorous savings and a little interest can generate.

I am not bragging, and in fact I have no right to. I have no mcMansion with granite countertops, a three car garage, or a media room.

I think we are one of many people who refuse to get over our heads.

#69 Bobby in Victoria on 08.21.08 at 3:35 pm

Here on the wet coast there appears to be growing cracks in the condo market. Excellent article yesterday in the TC about the potential problems of condo pre-sales.

Also reported in the TC today, one major project downtown, still just a whole in the ground, is now looking for another owner. Many others still waiting to be sold out. I know of one development that has had numerous grand openings. My favourite is one development that says only 5 left, of only 8 units. Interestingly a colleague just told me of layoffs at one project. So much for the labour shortage.

Yep, I think it’s about to tank!!!!

#70 Mountain Girl on 08.21.08 at 3:51 pm

#65 wealthy renter –
I agree that most of the voices on this blog probably belong to people who have decided for themselves what constitutes a healthy financial life, but I think we might be a flock of rare birds, if recent statistics are correct. I have been reading numerous articles over the last few weeks about the record debt levels that Canadians have achieved. Very worrisome.
As a nation, we owe just shy of a dollar and half for every dollar we earn (according to a columnist on the radio this morning).
I’m just not comfortable with that level of vulnerability. If I had that kind of debt, I would have trouble sleeping at night.
But like I said, and I’m not trying to sound self-congratulatory, I think those of us who have been skeptical of this real estate mania and who have instead tried to make choices based on research and common sense are the exceptions.
You may find that a year from now NOT having the McMansion and accessories is indeed a bragging right.

#71 terry on 08.21.08 at 4:05 pm

calgary blog bunny. what’s your point. i read the whole thing. the realtor called some guys mom a prostitute. why do you defend a loser like that?

#72 No Fool on 08.21.08 at 4:14 pm

Wealthy renter: “I am not bragging, and in fact I have no right to. I have no mcMansion with granite countertops, a three car garage, or a media room.”
Actually you are bragging. You’re bragging that you’ve been smart enough to resist the “luxuries” that have been offered to you despite being able to afford them at this point in time. You’re good with your money. Stop bragging.

Actually, I’m on the same boat. Been here in CGY for 2 years with the Fiancee. We both have stable (non-oil-related) jobs and both do quite well. From the second that we arrived here to this point, we’ve seen 50 houses, but not even a single one has piqued our interest due to the cost. It’s just not worth it.
If you can walk into a place and ask, why is this worth anywhere near $500K when “back home” it would’ve been $200K, you’ve had the brains to realize the TRUE purchasing power (PP) of your money, not just the Calgary PP.

#73 jrochest on 08.21.08 at 4:15 pm

I suspect 1 Bloor might not get built at all, especially in the form currently envisioned. It’s just too big, too elaborate and too expensive to make sense.

Anyone got any more candidates for Most Doomed Development?

#74 peter on 08.21.08 at 6:41 pm

lake placid river landing in Saskatoon

#75 timbo on 08.21.08 at 8:12 pm

thanks for the input to my rant yesterday.

As now to the topic, I truly believe that one person can make a difference if the message is of sound mind. Garth your book and my digging did change my life, for the better, so thank you. The god term is a heck of a stretch though.

The attacks you will take time to time are a statement that what you are saying is a direct threat to ego’s. The benefit to you is free advertising so thank him for the press and offer a signed copy. LOL.

And now to throw something out.
The rise in prices has helped a lot of people get rich and it begs the question of preditory lending practice. I am not directing the remark to 20-40 year olds who buy the new car or vacation on a home equity loan but of fixed income people who are bombarded with home equity loan commercials. The advertising in calgary is un-real on some radio stations & tv. I listened monday for a 1/2 hour and 4 times a home equity commercial came up.

Never took one out so I would not know but does the broker have to disclose to the customer the real risk the borrower has to take. Do we have any information on how many of these loans are out there. Never mind one mortgage funding high prices but if there were 2 loan payments on a mortgage or 1 reverse mortgage on a fixed income sucking up equity, how is this healthy for real estate prices.

Here is something to see at the 6 1/2 min mark to sharpen the point I am trying to make.


Just a thought, and curious to know how much debt is really fueling the economy and are fixed incomers being taken advantage of by preditory lenders.


#76 jrochest on 08.21.08 at 8:42 pm

What, not Second Ave Lofts?

#77 Shifty on 08.21.08 at 8:43 pm

Victoria and Vancouver listings are increasing rapidly. Looks like people are starting to clue into the new RE. reality. Some major strata developments are on hold as existing inventory is not selling. High end strata and SFD’S are not moving and builders of the high end SFD’S have also put projects on hold. The young ones who asked, I gave them Garth’s book and web page, are still waiting it out to purchase a home. Needless to say I haven’t had to buy beer for a while – so far covers the cost of the books.

#78 dd on 08.21.08 at 8:45 pm

#56 Sphinx

Why 5 – 6 years for the housing market decline? Why not one? Why not 10? Put some numbers behind your numbers.

#79 dd on 08.21.08 at 8:48 pm

#58 TorontoBull … thanks for the article.

#80 Calgary rip off on 08.21.08 at 9:00 pm

No Fool:

I found a house in Cochrane, a real bargain. Maybe I should buy it because my realtor tells me its worth it!!! Im feeling delusional and misguided, give me a beer(or a couple bottles of Alberta Vodka) before I take the plunge!! Say hi to Ed Jensen and Mario T. at the Herald because this house is q-u-a-l-i-t-y. I will enjoy using the washroom to unload immediately upon “possession” of this treasure trove!!(around $400 K in Cochrane, Alberta for 740 sq ft.)


#81 POL-CAN on 08.21.08 at 9:13 pm

Here in Toronto in C01 the number of listings between 200 k and 600 k went from 45 pages to 66 pages in a span of a month. Condos alone are good for 60 of those 66 pages. No…. we do not have a speculation problem :)

#82 squidly77 on 08.21.08 at 9:41 pm

when your house hunting or trying to look at historical data for your city..the lack of pricing and sales data is appalling..this can help a lot..here it month by month for
for other cities go to the address bar..where it says creb
treb or ereb erase and add your local board
these links work 99% of the time

information is your power

#83 browntown on 08.21.08 at 9:53 pm

hey nutsters! hey garth, pls check with government to see how land making machine invention is coming! desperately needed in vancouver before next leg up!

#84 Matt in Calgary on 08.21.08 at 10:05 pm

CREB’s website is still showing a median price of 400,000 for at least the second straight day. Any other Calgary people notice that? Seems odd that it could stay exactly that… makes you question whether or not they are holding back…

#85 JO on 08.21.08 at 11:06 pm

Classic reply from the RE agent as the market rolls over..many RE agents have most of their own money in RE and really do believe it is the best place to be…Message to the RE guy, many factors influence the market…it can be summarized as the mood of the market participants..supply and demand is but one element influencing any market. To blame a change in market conditions on one person is pathetic. If market analysis was a school, you would be in kindergarten. You have the right and my respect to disagree with any forecast/opinion, but at least have some solid rationale for your decision. Psychology of market participants is the best way to think about any market at a higher level and in almost all cases, it is next to impossible to pinpoint exactly what “causes” a market to go up or down. In the case of RE globally, affordability or lack of it one. Another is the underlying credit growth, which in the last 5-6 years or so has been a historic blow off top. And so now, the most overleveraged global economy faces the inevtiable slowing and possible recession with resulting unemployment. WHo can afford to buy houses at the same prices as the last 3-4 yaers, let alone carry any existing homes people own. Anyway, good luck to you RE agent.

#86 sarcasm on 08.21.08 at 11:20 pm

Matt #80,

CREB just announced last week: The U.S. real estate market might fall due to inflated prices and something called “Sub-Prime” mortgages. It may create a “credit crunch”, but it won’t be serious.

#87 My_view on 08.21.08 at 11:23 pm

The 40 year 0 down has been around for over 2 years now. The 0 down 25 year 107% financing has been around for a lot longer than the 40 arm. Let’s not forget the combination of these lending products super inflated the bubble.

#88 APCM on 08.21.08 at 11:37 pm

I’m wondering about the Trump building in Toronto.
It’s my understand that he doesn’t own it, he’s just sold the builder the rights to use his name, but there’s already been a few stories lopped off the top of it in recent months because there were no buyers .. So far I think there’s an underground garage built.
Didn’t the project start in 2005? hmmmm….

#89 squidly77 on 08.21.08 at 11:48 pm

i wouldnt live anywhere west of calgary especially cochrane and canmore as the prevailing westerly winds are unrelenting
matt its 4 days and its statistically impossible

i posted this on the albertabubbleblog tonight
its just my opinion and some will strongly disagree

i dont and wont deal with realtors
there is no need to
they just make you think that you need them..do you hire a salesman to buy a truck..of course not

my first house i bought from my brother my second and third i bought private not even through comfree..just sellers putting up simple home made signs
i sold 2 homes the same way
both houses i bought private were in top condition the owners actually owned the house so all the required maintenance had been kept up
a quick check on the mls was done so figuring out the proper price was easy..took 7% off that and bought/sold at 97%..dead easy

my last purchase in rundle nov 1997 1100 sq/ft bungalow with a 2 car garage on a pie shaped corner lot in rundle..$126,000 25 yr mortgage at 6.1%

its a little different today
with so many non calgarian realtors looking for the quick and easy buck they have totally messed up the mls..prices are all over the place and nobody knows what anything is worth the realtors have made a total and complete mess of it
if you dont want to use a realtor theres an easy way to exclude them
look through the mls..found some houses you like call the realtors to arrange a showing and if you still like the houses say nothing go home and watch the mls..nothing is selling now anyways if its not at least discounted 20%
when its de-listed stop by the home and make an offer..your guaranteed to save at least the 7%realtor fees
if you have to buy now and found a house you like call the listing realtor..that way you cut the buying realtor out..if you buy demand at least 3.5% off there lowest price the buying agents share
realtors are totally unnecessary in todays world..the young families out there will prove it

and if your trying to sell your house and want to stand out consider this
there are 16,000 mls and we-list house for sale signs in calgary
how many simple little home made signs do you see ?
purchase a home buyers kit
price it right as now is not the time to be greedy..this is a falling market you had better price it lower then comparables
just to escape the risk
have it in top shape..and when you are ready to show your home display your little home made sign
when your not ready to show just take the sign down
that little sign will get noticed quicker than the 16,000 others
that are littering calgary right now..if the city cites you for breaking there stupid sign law
make lots of noise
write a letter to the editor call phone in shows and post on all the blogs
people like me will support you

a little tip..i have had friends who have used we-list/comfree
when you first list it 20 realtors will show up posing as buyers
drive your price higher..and then every single offer they make will fall through..you need your paper work in order..spend $500 on a lawyer and get the proper papers
dont accept an offer unless you see cash or a certified cheque
realtors know all the tricks
protect yourself
its wild out there

#90 Calgary rip off on 08.22.08 at 12:01 am

Squidly: So the mean price for Calgary in 1999 was $150,000 about, and here in 2008 it is $400,000.

That is INSANE!!!!!! Just as I suspected, what houses were really worth here.

Thanks for the link.

#91 Mike.Slob on 08.22.08 at 12:23 am

#50 Mark on 08.21.08 at 5:39 am
“The Calgary market doesn’t deserve to be priced more than a dime higher than the Houston, TX market”.
I agree with you and also Toronto market doesn’t deserve to be priced more than a dime higher than the Detroit.

#92 My_view on 08.22.08 at 12:26 am

#79 browntown

“pls check with government to see how land making machine invention is coming”

Your the nut bar believing they aint making any land remark. What is old will be torn down and made new. The government and big business has land to sell when they want to. Finally Canada is the second largest country and our population is very low.

The coming decade will be different, all markets will change.

#93 squidly77 on 08.22.08 at 1:00 am

some politicians work very hard to create a positive atmosphere to promote the economy..very very hard
when they succeed in attracting an industry to locate into there area..these people are all over it
REIN appears.. buying up as much cheap property as they can with the hope of profiting off of the new found prosperity of a new community
i know how i feel about this organization

#94 jeremy on 08.22.08 at 1:57 am

From the http://findcalgary.com website, yesterday (August 20) a house in Calgary sold for 35% under list price. The lowest and highest sale prices of the day were $247,000 and $1.175M. By my calculations, someone sold for $133,000 to $633K less than list. I wonder if we’ll be seeing more low offers accepted…

#95 pbrasseur on 08.22.08 at 8:00 am

This blog is becoming repetivive, here’s a new idea for a change:

Blame the politicians:

Everyone is accusing capitalism, easy credit, the banks or Greenspan for this crisis ans the RE bubble. But in fact low interest rates were simply made possible by low inflation which itself was caused be the arrival of hundreds of millions of cheap and new workers in the world economy.

You are forgetting something very important: Mortgages are in fact backed by the government (which wants to promote access to property), in the end Freddy and Fannie (in Canada the CMHC) are organisations mandated by the state to insure loans according to legislated rules. In the end it is the tax payer that is responsible. The banks can do anything as long as they can get the loan insured, they certainely have done that, as they went prices kept growing and growing.

If banks (or the private sector) were responsible to back their loans they probably would have been much more prudent and I’m not sure the real estate bubble would have taken such proportions.

Bubbles have always existed and will always exist, but this one was made possible because no-one was responsible. Politicians made sure of that.

#96 smwhite on 08.22.08 at 8:17 am

Fundamentals (Affordibility #1) along with emotions have caused the shift in real estate. Garth is just the first prominent Canadian business analyst that has stood up and said “Uncle”.

*Clap Clap*

Those that wanted to see the RE iceberg seen it coming, many have denied it because they are emotionally attached like any “investment” if you put your emotions before common sense, your going to get financially fleeced.

#97 Popping Bubbles on 08.22.08 at 9:22 am

Browntown… the Canadian land making machine is broken, just like it is in the U.S., UK, Spain, Australia, New Zealand and other countries where housing values are now plummeting. Too bad Vancouver real estate is even more overvalued than in most of those markets. Kiss what little equity you have goodbye (and, if I’m guessing correctly, your real estate commissions as well).

#98 pjwlk on 08.22.08 at 10:20 am

#65 wealthy renter: Hey looks like I’m pretty much in the same boat as you. I’ve made sacrifices all my life so that I too could become financially independent, and now the freedom of retirement at age 52 is looking good! I am now renting also BTW. I don’t mind patting myself on the back either because nobody else will and I think that those of us who were smart enough and disciplined enough to refrain from our “look at me” world really deserve it.

Oh yeah, recession proof jobs? I don’t think there is such a thing…

#99 Videl on 08.22.08 at 10:30 am

Excellent house price history:


Can similar data be found for Toronto?

#100 Sebastian on 08.22.08 at 10:52 am


I am looking into buying my first house and so I do want the house prices to come down. My only concern is that given the high (undeclared) inflation they wont and my downpayment will lose its value in time.

In my research I came across this paper from 2004 discussing RE. https://www.phn.com/Portals/0/PDFs/Articles/North%20American%20Real%20Estate%20062504.pdf

Any comments on this?

#101 Toronto 1 on 08.22.08 at 10:54 am

The simple fact or real estate is that attitudes drive the market, same as any other market. When the market sentiment turns south so does prices.
ie.. The SUV truck market has turned down in a big way becasue of high prices fuel ,SUV;s went from being statues symbols to being unsellable even at a 20% discount.
Homes will end up in the same boat all across Canada.
The problem is that the new generation of “greater fools” do not remeber the price crash of the early 80’s or the 89 R/E market crash. Market sentiment turned very fast in those days.

The downturn in Canada will be more swift and severe than the US, two years tops and the market will be at a bottom. When the US market started to detoriate, they had a much better economy then we now and had the oportunity to drop interest rates. We are now the opposite, worsening economy and no chance of lower rates, more then likely rates will rise by two years time due to inflation pressures.
increase rates + no more 40 year no $ down = R/E crash

#102 Mike.Slob on 08.22.08 at 10:59 am

Ontario workers are earning less money!


#103 Keith in Calgary on 08.22.08 at 11:05 am


You can add me to the list of people like you and wealthy renter.

#104 Rick on 08.22.08 at 11:24 am

A vocation desperately in need of intervention and reform;


#105 FP on 08.22.08 at 11:25 am

Headache after headache — financial crisis ripple effect

Saw on a business news network this morning that banks, after having a hard time with defaulting home equity line of credits (HELOCs) are now turning their attention to credit cards. When consumers had HELOCs frozen, they increasingly turned to credit cards for liquidity to pay for groceries, gas, etc. Now banks, fearing more defaults, have started LOWERING credit limits and INCREASING interest rates (often without informing) their customers, which in turn AFFECTS their credit score!
See: http://www.creditcards.com/credit-card-news/lending-crisis-credit-score-cut-limits-1270.php

More and more people getting caught in between rock and a hard place…Bernanke and Buffett in news this morning say they don’t see financial crisis over in 2009.

[For more info on banks freezing HELOCs and credit card limits, just go to Google and do a search….the results are mind-boggling.]

I don’t think this is will only be contained in the U.S. considering how highly leveraged most Canadian consumers are right now. I’ve seen many posters say “Cash is King”. AMEN to that!!!

#106 Mike.Slob on 08.22.08 at 11:47 am



#107 pbrasseur on 08.22.08 at 11:51 am

Actually to be precise market bubbles happen when people start making price decision based on what they believe other people think, not independent evaluation of what a reasonable price should be.

For example a buyer may actually know a price is outrageous, he knows there is a bubble and that the price makes no sense, but he buys anyways because he is convinced that others will keep on buying and that it will drive prices up even more. Others are willing to pay because they actually believe the price reflects the actual value of the good they’re buying. And importantly, as prices go up more and more people are attracted.

This is a common phenomenon, I was reading yesterday that in the 1950’s there was a bowling bubble in the US. The sport of bowling was becoming so popular that shares of companies linked to bowling went through the roof.

Bubbles are common and are usually confined to specific areas, such as the tech stock market bubble, or biotech bubble

Bubbles may even have positive sides, for example the tech bubble helped bring funding quickly to a bran new industry that still exists and employ millions today.

So what about this RE bubble, why makes it special?

1) Well for one thing it is based on credit

2) [b]Most loans are backed by the government so lenders (banks) are not too preoccupied with the risk as long as they can package the transaction to have it insured by the government (or organizations mandated by the government). When lenders are not preoccupied with the risk prices can go up freely, they even encourage it as they can output bigger and bigger loans and make more money.

Some people will say that inherent defects to capitalism created this bubble. False, while it is true that bubbles will happen the magnitude and severity of this one was only made possible through the ill advised intervention of the state in the economy.

Yet be sure that politicians will find it another excuse to intervene even more.[/b]

#108 Rasputin on 08.22.08 at 12:58 pm

Matt: I saw that. It’s only possible for that length of time if: a) zero houses sold (very possible, I didn’t check that), b) several houses did sell and the numbers just worked out. (statistically not likely), or c) they are lying. The CREB would never do that to us would they?

#109 Dawn in Calgary on 08.22.08 at 1:03 pm

I’m sure I won’t be the first one to post this, but we have our answer….


Builder halts Beltline condominium project
Mario Toneguzzi, Calgary Herald
Published: Friday, August 22, 2008

CALGARY – Construction of a high-profile multi-million dollar Beltline residential condominium project, which included two towers at 26 and 30 storeys, has ground to a halt due to elevated costs, the Herald has learned.

The news regarding the Gateway Midtown development at the corner of 10th Avenue and 4th Street S.W. comes at a time when the number of new condos under construction in Calgary is at a near record level while the number of condos for sale on the MLS market remains high as well.

A recording on an information line for the Gateway Midtown project says: “You have reached the Gateway Midtown purchaser information line. At this time, we regret to inform you that Resiance Corporation will not be proceeding with construction of Gateway Midtown as insurmountable construction costs have made this project financially unfeasible.”

#110 brazer on 08.22.08 at 1:07 pm

My greedy investments left me homeless. A dear friend saved me.

“It was the spring of 2005 and the housing market was in a frenzy. Against my better instincts, I let my realtor convince me to join the fray. Although that decision cost me much of my life savings, it taught me a lesson that years of graduate school never did – believe it or not, life’s not about the money.”

#111 Dear God... on 08.22.08 at 1:14 pm

Matt #80, that figure has been stuck at $400K for over a week. I pointed that out in another thread days ago.

Check this out: HUGE calgary Condo project halted!

Builder halts Beltline condominium project
Mario Toneguzzi, Calgary Herald
Published: Friday, August 22, 2008
CALGARY – Construction of a high-profile multi-million dollar Beltline residential condominium project, which included two towers at 26 and 30 storeys, has ground to a halt due to elevated costs, the Herald has learned.

[More like lack of bloody interest, Mario!..so say it right below!]

The news regarding the Gateway Midtown development at the corner of 10th Avenue and 4th Street S.W. comes at a time when the number of new condos under construction in Calgary is at a near record level while the number of condos for sale on the MLS market remains high as well.

A recording on an information line for the Gateway Midtown project says: “You have reached the Gateway Midtown purchaser information line. At this time, we regret to inform you that Resiance Corporation will not be proceeding with construction of Gateway Midtown as insurmountable construction costs have made this project financially unfeasible.”

“If you have purchased a suite at Gateway Midtown and you are calling about your deposit, rest assured that your deposit will continue to be held in lawyer’s trust or covered under the provisions of the Alberta New Home Warranty Program and therefore protected under the terms of these two provisions. We are unable at this time to answer further questions about your deposit as all contracts associated with the project, including your purchase agreement, have been assigned to the senior lender. You will be contacted by an administrator acting on behalf of this lender to advise you of the status of your contract to purchase. As any questions regarding your contract can only be answered by this administrator, we ask for your patience and understanding while this unavoidable process transpires.”
The company said this decision has also resulted in the downsizing of 41 Resiance salaried and hourly employees.
The number of condos currently under construction in Calgary is 10,643 – 102 units shy of the record established in May, and 44 per cent higher than a year ago, said Richard Corriveau, regional economist for the Prairies and Territories for Canada Mortgage and Housing Corporation.

“I have heard rumblings that this might occur,” said Corriveau, of the general condo market in the city and projects not proceeding. In the condominium resale market, the Calgary Real Estate Board at the end of July was reporting the month-end inventory of condos for sale in Calgary at 2,888. There were 1,183 new listings added in the month, up 5.91 per cent from July 2007, and sales for the month showed an 11. 28 per cent decrease (535 units) compared with a year ago while the average days on the market to sell a property rose to 52 from 33.

Those numbers had an impact on MLS sales prices. The average sale price in July for a condo in the city was $296,338 which was 6.98 per cent less than a year ago ($318,582) while the median sale price dropped by 8.19 per cent to $273,500 from $297,900 in July 2007.

“What’s occurred in 2008 is we’ve seen a sharp pullback in resale demand. We’re seeing a weakening in rental demand and the single-detached new home market has also pulled back in their production quite strongly,” said Corriveau. “Now the (new) condominium market stands out as anomaly. It’s bucking the trend of what’s occurring in every other housing market within the Calgary CMA.
[Sure it is! People suddenly stopped wanting roofs over their heads!]

“That poses some concern as you consider the indicators that have fuelled weaker activity elsewhere, it’s surprising that the multi-family market hasn’t responded.”

Those indicators include weaker net migration here, employment growth softening, income growth moderating, rapid price escalation in all markets leading to weaker demand.

But Corriveau said one of the factors acting in the new condo market’s favour is the time horizon to construct condo projects and eventhough we are currently faced with weaker demand, the vast majority of these projects aren’t scheduled for completion for another year to three years or more.


#112 TOguy on 08.22.08 at 2:00 pm

#87 mike.slob
Sweet! I look forward to buying my first house in Toronto for $1.

#113 MikeB on 08.22.08 at 2:03 pm

Some thoughts from this blog…
Real estate as an investment is kinda questionable…even Cramer from CNN just bought and says the mistake is to look at real estate as an investment. Great investment if you buy at the right time and sell at the right time.
Recession proof jobs… sure…. Bankruptcy lawyers and collection agencies….
Does anyone really understand the math behind how RE calculates sales increases or decreases. I read a bit earlier and am dumbfounded how that can make any sense..

The underlying belief by the think tanks is that there is still over 1.5 Trillion in bad loans that have yet to be written off so how could the economy and the real estate market not think things will tank out.

#114 CalgaryRocks on 08.22.08 at 2:47 pm

#87 mike.slob
Sweet! I look forward to buying my first house in Toronto for $1.

Squid would think that 1$ is too much. 0.75$ max. Anyways, why wouldn’t you buy the whole block for 100$?

Maybe I can get get the TD centre for 1K. Yey!

Above = Sarcasm.

#115 Jim_s on 08.22.08 at 3:10 pm

Well, those of you that asked “which builders are the ones in trouble” when, in one of my last posts, I mentioned that the rumor mill is smoking, can now see.

A huge project in Calgary…. belly up! Bank pulled the pin not only on the developer, but probably on those who put deposits on their dream home.


#116 Keith in Calgary on 08.22.08 at 3:12 pm

Welcome to the “no spin zone”…..with apologies to Bill O’Reilly….

Realtorspeak – Cancelling 650 suites means that prices for condos will go up in Calgary due to less supply and pent up demand caused by those buyers getting their deposits back.

Realityspeak – Boy am I glad I didn’t buy anywhere in the last 24 months. This story is going to send a chill thru Calgary’s condo market and there’s more to come. Prices will drop even more. We’re done.

#117 Dear God... on 08.22.08 at 3:50 pm

I guess an “artist’s rendition” is the only thing we’ll probably ever see of that project. Those people will not lose their deposits, that’s 100% for sure. a) there are laws against that and b) if that happened, any other sucker who’s got money on a condo/home being built would line up at their developers place and demand their money back….any developer who puts a black eye onto an already bloodied condo building industry will be beat down by the others.

#118 Sphinx on 08.22.08 at 3:56 pm

#74 dd,
because it took 5-6yrs for this bubble to form, did I need to explain that!

example, NASDAQ 1997-2003:


all bubbles have bell (or pyramid) shapes after they burst, in other words, most of the time the asset valuation goes back to same level when the bubble started.

#119 Dawn in Calgary on 08.22.08 at 4:04 pm

Mario’s on a roll today…

Layoffs strike Calgary’s once-booming homebuilders
Mario Toneguzzi , Calgary Herald
Published: Friday, August 22, 2008

CALGARY – Plunging housing starts in Calgary this year compared with a year ago has led some Calgary homebuilders to lay off staff.

On Monday, Jayman MasterBuilt laid off 50 employees in Calgary and Edmonton – 30 in Calgary, said Jay Westman, president of the company. The layoffs were in the office and in the field.

“We’ve spent a lot of time over the last few months in rightsizing our various operations to what we believe is the long-term sustainable housing market for Calgary and Edmonton,” he said.


#120 TrueGritCalgary on 08.22.08 at 4:37 pm

$392K, that was Calgary’s median price yesterday. T
his is down from the mid 430K last summer.

#121 David on 08.22.08 at 5:21 pm

From reading the article Garth has become a prophet without honour in his homeland. The Greater Fool book has become a Jeremiad contradicting the universal truths of the ever inflating housing bubble. Undoubtedly the message caused some discomfort to the eternal real estate optimists.
Expect to see more see more see through condo projects and unfinished housing tracts in the future. Those expecting a quick two year price correction are being naive. The get rich quick scheme will be replaced with the get housing poor slowly scheme as many homeowners will be loathe to realise actual losses or will hold out for the market turnaround that will never happen.
Those hoping for quick easy profits will have to be dragged kicking and screaming into selling their properties at a loss.

#122 Ed Sager on 08.22.08 at 5:30 pm

Just spent some time talking with a realtor in Cochrane, where several pricey new subdivisions are under construction. I asked who was buying these (over-priced) houses and condos. He replied, young professionals from Calgary. I still don’t understand how even two income families could afford these $500,000 particleboard palaces.

#123 rant in Calgary on 08.22.08 at 6:42 pm

Jim s, pricey project

If a developer can’t make money at that price, I mean these prices… Oh those prices… I get it. (the writings on the wall or lack of walls)
If you thought there were line ups to buy, love to see the line ups to get your deposit back.

#124 Doug in Calgary on 08.22.08 at 7:00 pm

re: #110 Just read that article as well. I wonder if their profit was at risk so they bailed? 150 out of 650 unsold might be the 30+ million they wanted to walk away with, so 500 buyers get dumped. Then again, I wonder how many of those buyers/speculvestors are breathing a sigh of relief! I somehow doubt 500 new sales will result…

#125 Marcus Aurelius on 08.22.08 at 7:22 pm

Let’s see – snow, a greedy left-wing Mayor, a gadfly (no disrespect intended, of course) MP – anything but what literate Torontonians knew for months, if not a few years – that all of the con games perpetrated by Toronto “real estate professionals” are over – and the irony is that even though some idiots may have bought the amateur act they were peddling, they are still going to make out OK when the properties they ‘gamed’ are forced back onto the market at much lower prices.

(Viz. my earlier post about the C14 listing that suddenly went from 1.150K to 1.250K after a year on List at the lower price, then got relisted this week for 1.128K: proof positive that agents and vendors are just pulling listing numbers out of their collective butts to catch a fool – and this invites the reasonable Purchaser to conclude that any Offer is equally ‘intelligent’ – even the ones that are now going to come in at 10-, 15- or 20% off List as this knife slices through the cooling Toronto air). Now is the time for all good Vultures to chuckle at the inanity of that poor dumb lady who speaks for CREA – what’s next? – declining IQ test scores among Torontonians, proving they are not as ‘astute’ as the folks who bought in 2005-2007?

#126 squidly77 on 08.22.08 at 8:48 pm

Edmonton resale housing market not “plunging” say REALTORS®
theres something very very wrong in edmonton
dont know if it will still be there when you click the link

#127 Mike.Slob on 08.23.08 at 1:07 am

Average Residential Prices in Canadian Cities
(July 2008)

Ft. McMurray— —–$680,400 —-203%
Greater Vancouver –$575,256— 172%
Victoria ————–$487,864— 146%
Calgary————– $402,788— 120%
Toronto————– $371,410— 111%
Edmonton———— $335,100– 100%
Ottawa————– $295,134—- 88%
Saskatoon ———–$292,428—- 87%

It’s insane about Ft. McMurray avg.price $680,400?
A can’t belived,about Ft. McMurray avg.price.
It’s the worst place in the world. With -45 C, and industry shit.

#128 CaptainCaptain on 08.24.08 at 6:57 pm

For the last two years people have been preaching to me,
especially home builders, that homes in Vancouver will
NEVER go down and they are undervalued. Buy it while
youF still can… $500,000, $600,000, $700,000…

To me it’s an investment, not a dream. Use the website
below to calculate if it’s better to buy or rent.


#129 Marco on 08.28.08 at 1:30 pm

Near the end of the high-tech bubble while the people were still in delirium, prof. Jeremy Siegel has warned about overvalued stocks. Tech stocks tumbled as a consequence.
That day, when Siegel appeared on CNN’s Moneyline show, even Lou Dobbs asked him, “What in the world — Jeremy, if I may ask, you write one article in the Wall Street Journal, and see what you did! Why did you do that?”
Nobody wanted to talk about fundamentals as it was more pleasant to dream on.

#130 Jinxy on 09.14.08 at 1:26 am

I see there hasn’t been any activity here for a few days, but thought I’d weigh in on the Gateway Midtown situation. In my opinion, their issues are not “all” due to the “softening” of the current condo market.

We purchased a pre-construction unit in Gateway Southcentre in the Spring of 2005. Possession was to be July of 2006. My husband works in the construction industry and noticed very little activity taking place at the site for approximately 6 months. The site seemed to be plagued with delays. Hubby started doing a bit of inquiring with fellow industry workers and found out most of the delays were due to their concrete work. Their previous concrete development (in Garrison Woods) seemed to go on without a hitch so we were “nervous” about what the issues may be. Hubby discovered Resiance made a significant change with the GS development. Rather than contract out their concrete work, they “developed” their own concrete division and took on the task themselves (not to mention the added “difficulty” of doing a Geo-Thermal Exchange system). I think it was the inexperience of their concrete division that largely contributed to their current woes. We were half expecting notification that we would have to pay more money or get our deposits back (which is exactly what occurred with the purchasers at Gateway Midtown). It didn’t make sense to us how they were getting this thing built on pre-construction pricing in a sky-rocketing market combined with an almost 12 month delay. We eventually took possession almost a year after our “stated” possession date.

Many have questioned the speed at which they sold so many of their units at Gateway Midtown (I believe this also contributed to their issues) – not holding back on selling too many units – sell some, re-evaluate the market, sell some more at a higher price, and so on and so on); but instead they let too many go to quickly at a price that was too low (resulting in having to go back and ask for more money). My guess is this – they needed the equity from those sales to keep Gateway Southcentre going. Friends of ours who had put deposits down on Gateway Midtown were surprised they weren’t asking for market value the second time around – the pricing still seemed too low (would they still be “afloat” had they asked for market value?).

Not only has this affected Gateway midtown “owners”, it’s also “starting” to affect Gateway Southcentre. 2 weeks ago we received a letter from Resiance stating Gateway Southcentre was a separate legal entity from Gateway Midtown and GS would be finished to completion. It’s starting to look like this isn’t the case. Although the trades associated with SC have been paid for services rendered “thus far”, it looks like a lot of them have taken their money “and ran”. With Resiance now in receivership, who’s going to take on the task of finishing this building? And with no-one to “honor” any warranty work (for common property and individual units), let’s just say the sleepless nights have been long ones. I’m no expert, but my assumption is that this can’t be good for our property value.

With the condo market softening, hopefully some of the Gateway Midtown owners will absorb other units on the market (if they haven’t been scared off of buying into another development).

Are there any market experts out there that have any experience with this? Are Gateway Midtown and Gateway Southcentre still “protected” even though the company is in receivership?