Listen to Garth’s interview on the financial turmoil, here.


Reno’d houses in Toronto’s Leaside have been fetching up to $1 million


“You’re done, you’re screwed. It’s one of the worst times to be in debt.” — Laurie Campbell, executive director of Credit Canada.

“History has proven time and time again that real estate is a solid, long-term investment that appreciates at a rate of about five per cent annually.” — Michael Polzler, spokesman for Re/Max in Canada.

“We are getting more alarmed by the day (over Canadian housing market).” — David Wolf, economist, Merrill Lynch Canada

Lo, six months ago I started this blog. At that time I lamented the immediate future of real estate, even when experts said the markets were strong. I laid out my reasons that Canada would not be immune to the American contagion. I attacked 0/40 mortgages and warned the Canadian federal government was making policy decisions which invited the mess to slither north.

Half a year later, here we are. And yet there are deniers who earn consistently more media than the alamists. Every day the evidence builds that we are almost exactly two years behind the US housing market curve. This is why some time ago I forecast a minimum valuation drop of 15% in Toronto and 40% in the West. Both have happened, or are in the process. As I also said at the time, I am probably too conservative. And I am.

Half a year later, Ottawa has dumped the 0/40 mortgages, and yet the move was – also as forecast here – too late. In the next six months we will see the following:

  • Eastern cities, including Toronto, will have markets fall another 10%, for a peak-to-Spring decline of 25%.
  • Albertan cities will decline another 10% as well, for a rout of 30%.
  • Vancouver will crash 20%, taking the average price down 25%, on its way to 40% prior to the 2010 games.
  • Montreal and Ottawa will decline about 12% by Spring from the peak, while Maritime cities will escape absolute reductions, and merely flat-line.
  • Condo prices will erode the most, especially in Vancouver and Toronto.
  • Flashy new landmark towers in those same cities will never be built, while in Calgary they already know the score.
  • Large builders like Mattamy, now desperately cutting prices by more than $30,000 a unit and giving away free cars, could see their business volumes fall by two-thirds.
  • Recent, equity-less owners will owe more than they own, and enough of them will walk to generate shocked headlines.
  • Interest rates will crash lower, but mortgage rates decline far less.
  • Renters will trump owners.
  • Sometime next summer, maybe the fall, perhaps sooner, there will be major buying opportunity on certain kinds of real estate which have a sustainable future. More to come on that.

Finally, a word on ML’s David Wolf (whom I have not met) and Michael Polzler (whom I have). Wolf gets it – real estate is an emotion-driven commodity whose future course can only partly be gleaned by a chartist. If enough people perceive it’s a dangerous time to buy, they won’t. Supply accumulates as demand dissipates and valuations plunge. This is what will happen for some time. The charts do tell us far too many units have been built, or are in the pipeline; the headlines tell us credit’s no longer available for speculative real estate; and the word on the street (and this blog) says we have fallen out of love with houses. They are now seen as a destructor of wealth equal to the stock market. No sale.

Mr. Polzler, on the other hand, is a salesguy. Give him all the trust and respect he deserves. After all, he told a Toronto real estate conference this week that Canadian housing is solid in part because, “We have less debt than our neighbours south of the border.”

This is my response:

Debt-to-income ratio, Canada and US (Statistics Canada)


#1 yyc doomer on 10.28.08 at 5:25 pm

In Canada, the baby boom is usually defined as the generation born from 1946 to 1966. Canadian soldiers were repatriated later than American servicemen, and Canada’s birthrate did not start to rise until 1947. Most Canadian demographers prefer to use the later date of 1966 as the boom’s end in that country.

#2 islander on 10.28.08 at 6:03 pm

I had a flyer cross my desk today.
Bear Mountain in Victoria. New home.
Priced reduced $225K from $1,275,000 to $1,050,000.
That is one gigantic kicks in the n*ts.

But read the comments to today’s G&M story on the Merrill Lynch guy. Half the people still believe Canada will escape the calamity. Unbelievable.

When I was in Edmonton recently, the people who even mentioned the economy (and there weren’t many) thought Alberta will escape the calamity even if the rest of Canada doesn’t.

What I’d pay for a pair of those rose-coloured glasses.

#3 john on 10.28.08 at 6:34 pm

The big bomb that should of dropped was the rejection of the bailout package which would have created huge immediate ripple effects felt in Canada as well. As a result of this passing, things will continue as normal. I have lost hope. Sudden unforeseen panic creates opportunity and rewards the frugal. Opportunity lost as they have weathered the storm and everyone is aware of the potential train coming. The only thing that can bring about that unforeseen panic again would be something along the lines of a terrorist attack or presidential assassanation.

Time to move forward folks.

#4 Shifty on 10.28.08 at 7:16 pm

Don’t understand why people on this blog are knocking the boomer’s. Most boomer’s are either retired or looking at retirement within 5 years, have their home paid for and have a decent retirement funded. Most boomer’s I know will not be a drag on future generations – so what’s this fixation?

#5 Buy_canned_foods on 10.28.08 at 7:27 pm

More spinning:

Hilarous. “Just stop reading the newspaper and watching the news,” Polzler said…(to parapharase: buy buy buy)

They don’t say stop watching the news when the market is robust. Soooo transparent!

#6 $fromA$ia on 10.28.08 at 7:32 pm

Garth’s verbal diarea makes more sence than you John.

Yes, Garth talks $hit. Unfortunatley he is right. We have to eat it.

#7 crashing yuppy on 10.28.08 at 7:32 pm

Read this…… There is no shame in the Real Estate Industry, why dont they tell us that smoking is good for us too.

http://www.thestar.com/YourHome/News&Features/article/525561It will make you agry

#8 crashing yuppy on 10.28.08 at 7:38 pm

Sorry, Link did not work. Here it is.

Seriously, how do these guys sleep at night

Top realtors criticize housing ‘fear attack’

Insist risks of a collapse in Canada are overstated, but fewer sales agents likely to emerge from slump
October 28, 2008

Comments on this story (13)

Tony Wong


Fears of a major real estate downturn are overblown and the Canadian market is still performing well, say top executives from the country’s largest real estate companies.

“We are being overwhelmed by the negativity, the market has not slowed down that much, it’s like you’re going from 150 kilometres per hour to 120 kilometres, it feels slower, but it’s still healthy,” Michael Polzler, executive vice-president of ReMax Ontario Atlantic Canada, told more than 1,000 realtors yesterday at the annual general meeting of the Toronto Real Estate Board.

“This is a fear attack that will blow over,” said Stephen Wong, chair of Living Realty Inc. “We do not have the same problems as the United States.”

Leaders gave a rousing pep talk to beleaguered agents, blaming the implosion of Wall Street and the surrounding media coverage for much of the loss of consumer confidence in Canada. The average price of a home in the city of Toronto was 15 per cent less in the first half of October compared with a year earlier and listings are up significantly, by 30 per cent.

“Just stop reading the newspaper and watching the news,” Polzler said to enthusiastic applause.

“The need is paramount now to accentuate the positive,” said Gary Hockey, president of Coldwell Banker Canada. “We have to create some positive spin so we don’t get dragged down to the doldrums.”

Hockey said the next 12 to 15 months should provide good buying opportunities.

“If you have the cash, liquidity and courage, now is the time.”

Howard Drukarsh, vice-president of Right At Home Realty Inc., said in an uncertain equities market, buyers will gravitate to property investments for financial shelter.

“During the last dot-com bust, where did they go? They didn’t go back to the stock market, they went to real estate,” Drukarsh said.

However, leaders generally agreed there would be a pull back in the number of agents due to the downturn.

“We think there will be a considerable contraction in this industry,” Polzler said.

Underperforming agents who “can’t make a living in this industry” will be the first casualties, while “brokerages running on thin margins will have to reassess the business model,” he added.

An estimated 20 per cent of the agents now active in the Toronto area have been registered only in the past two years.

But they are also earning more.

Phil Soper, president and chief executive of Royal LePage, said there were 77,000 agents selling $30 billion worth of real estate during the height of the previous boom, in 1987, compared with 95,000 agents selling $160 billion today.

“Those who stuck it out during the hard times got significant market share,” Soper said.

“Unlike the U.S., Canadian buyers have jobs, they have money, they have access to mortgages,” Soper said. “What they don’t have is confidence.”

Toronto Star

#9 macchiato on 10.28.08 at 7:48 pm

Islander, I too was very surprised to read the Globe and mail comments, lots of sheeple-tards, I thought we passed the denial stage, maybe next month. Agreed, unbelievable.

This is especially funny:

” Nathan Cool from Vancouver, Canada writes: I can’t see it melting down like it did in the US, but everyone is expecting prices to slide (it’s already started here in Vancouver by about 10-15%).”

So, basically, according to Nate: Prices are melting down like the US, but … he can’t see prices melting down like the US.

#10 kc on 10.28.08 at 7:58 pm

Not a fully housing question, however, I read on the CBCnewsworld (that reading line that scrolls on the bottom) that 4 Canadian premiers are travelling to China to muster up investment dollars for Canada. I didn’t know Canada was in a great shift of needing new capital. And the scroll right behind it states that we are opening our borders for more immigration of foreign workers from Asia, to fill a worker shortage here in Canada. What and where are these un filled jobs that are so in need of off shore workers? I will bet that if they wait a few months the unemploment numbers that are going to steadily increasing as more and more companies go broke will be screaming for these jobs…. now thou why is it that in these statements they never include what the jobs are that are screaming for new employees??

Is our country being sold out? and who is lying to whom?

Unless these new immagrants are going to be the next set of greater fools????? you know that the 1st time buyers have all dried up.

#11 My_view on 10.28.08 at 8:00 pm

This morning I got a call from a bank (1 of big 5) offering 4.25% for a 2 yr gic, (comparable Ing gic @ 4.50%/Mortage @ 5.50%) on a 2 yr gic. Not bad, considering the bank will then use it to create more credit and make roughly a few points on it. Maybe strange to me, however she called early am on my celle. Sorry to say, but I’m feeling good right about now. Cash is king and now the frugal will prosper for discipline financing. Bring it on haters. I’m licking my chops

#12 Roger in Victoria on 10.28.08 at 8:30 pm

Shifty #4,

I don’t think people are knocking boomers. But you need to check your facts before you start talking about boomers ability to fund their retirement.

BMO did a survey of boomers (born after 1946) which you can read by clicking my name. It does not paint a bright retirement for many of these folks.


“Yet, while taking care of others is a big part of their lives, boomers are becoming increasingly concerned about their own future. Only 28 per cent of respondents are very confident that they will be financially secure in old age compared to 41 per cent of those under 40 years of age and 47 per cent 60 years and older. A third of boomers (32%) believe their standard of living is likely to drop in retirement, compared to 16 per cent of younger generation Canadians.

According to the study, many baby boomers are having challenges balancing the books, with most still with debt (73%). Only 28 per cent of boomers say they have savings and investments of $100,000 or more. Almost one-in-five boomers who have not yet retired (19%), say they have no savings. ”

And this study was down before we had the recent stock market meltdown. The drop in house prices is going to make things worse.

#13 JO on 10.28.08 at 8:51 pm

Canadian RE is already in free fall and should be there for at least 3-4 years. The amount of credit being desttoyed worldwide is astonishing and within 12 months, it will begin here in Canada. The TSX trend suggests that our economy is in for one heck of a rough landing sometime in late 2009. There is nothing that can stop this nbecessary decline. It will stop once enough credit has been destroyed through pay down or default, and once asset prices come down to the long term average level of affordability. Home prices have been on an unsustainable climb for about 6-7 years now, much of it due to the artifical stimulation of credit growth that was spurred by a fradulent credit inflation speaheaded by the government and BoC/Fed. The market is now correcting the credit orgy, and it should take at least 3-4 years until it bottoms out, but possibly after 2015 until prices stop declining and turn around. A simple look at the debt/income chart and the nominal house price/inflation adjusted house prices charts indicates this is the path. Anyone who bought housing in the last 5 years will likely come to regret the day they took the plunge. In many cities, fiscal pressures will accelerate ill-advised property tax and other tax increases which will further destroy the RE price picture. Too many people own homes who shouldn’t.

#14 Downsized and Delighted on 10.28.08 at 9:00 pm

“Sometime next summer, maybe the fall, perhaps sooner, there will be major buying opportunity on certain kinds of real estate which have a sustainable future. More to come on that.”


#15 anonymous on 10.28.08 at 9:16 pm


You are too late. Frugal was so last week. If you are young, it’s time to start looking at riskier investments.

I spit on 4.5% per year. The DOW was up 11% in a single day. Taking 4.5% is for the weak, the lazy and the old.

#16 dboy on 10.28.08 at 9:38 pm

shifty # 4

The boomers are notourious for having most of their net worth in their homes. Given the a. stock market slide and b. the likely decline in re values, they are going to have considerably less wealth.

Given their over representation in the population, they will a. flood the market with larger family homes, thus devaluing re further, and b. not have as much retirement income to spend back into the economy. Not to mention the eventual strain on Canada pensions and health care.

#17 Adeptus on 10.28.08 at 9:43 pm

“Sometime next summer, maybe the fall, perhaps sooner, there will be major buying opportunity on certain kinds of real estate which have a sustainable future. More to come on that.”

I think you mean like Summer of 2011+ right? The downward spiral will take a few years. At least, historically that has been the case.

Many people are still in the denial phase… a ways to go before capitulation.

PS. Thanks for taking the time to run your blog

Astute buyers move in before the bottom is hit, not after, And, you’re welcome! — Garth

#18 dd on 10.28.08 at 10:27 pm

#11 My_view,

Why lock the money up for a year? Get a high rate on a daily or monthy account. This stock market will turn. Can’t tell you when. Some stocks are and will be the deal of the century for the next little while.

When chicken is on sale … buy a lot of chicken. When stocks are on sale … buy a lot of stocks!

#19 dd on 10.28.08 at 10:31 pm

15 anonymous is totally right.

My_view, you should have been in cash 3 to 6 months ago. Slowly move into stocks while keeping an emergency fund on hand.

Stop looking in the rear view mirror to invest.

#20 dd on 10.28.08 at 10:32 pm

#14 Downsized and Delighted,

Garth has a blurb on this in his latest book.

#21 AL on 10.28.08 at 11:23 pm

Your starting to be a little more reasonable. I don’t agree with real estate being emotionally driven. Sure, when times are bad, some people are going to hold back. But there are many others out there, like myself, who plan on pulling the trigger once the price of a home gets down to rent level. It is all in the numbers. For my sake, I hope the market does fall another 15 to 20%.

#22 Peter on 10.28.08 at 11:32 pm

YEAH, Its time for those Remax, Royal LePage, Homelife, Century 21, Living, Right and Home Guys and Gals to “GUARD UP THEIR BLOODY GREAT WALL OF CHINA to DEFEND THEIR LAST WORDS ON REAL ESTATE BUYING and the MARKETS !!!” Soon, it will be “RBC, CIBC and TD” will talk to “BUILD UP THEIR BLOODY MORTGAGE WALL OF CHINA TO DEFEND THEIR MORTGAGE MARKET” and say they are MUCH HEALTHIER than BEFORE !!! These suckers deserve a PAY-CUT !!!

#23 Peter on 10.28.08 at 11:34 pm


#24 Realtor on 10.28.08 at 11:35 pm

Garth, your comments in your last posting are right on the money about buyer perception. The buyers feel that it is a dangerous time to buy right now. I see this every day while Iam dealing with clients. It’s not that there aren’t people in a posistion to buy, because despite all the financial turmoil we’ve seen over the last while there are still people out there who have money and could easily entertain purchasing real estate. It’s just in general, the buyers are holding back in a “lets wait and see” attitude.

It’s no secret that supply has continued to accumlate as the year has progressed, demand has all but vanished, and valuations are continuing to fall. It’s a very difficult time to be a realtor right now as we as realtors continue to struggle to find “the right price” for houses and cottage properties. This is a time to be honest with buyers and sellers and not a time to give them false hope or outrageous expectations when it comes to the valuation of their properties.

When you combine the perception that’s it’s a dangerous time to be buying real estate and look at what’s been happening with the TSX and folks retirement savings, you’re absolutely correct when you say that it all adds up to the two words that every realtor hates to hear ……………..NO SALE! Two words that Iam just hearing way too often this year for my liking, but a stark reality that Iam coming to acept.

#25 buy_canned_goods on 10.29.08 at 12:53 am

From 3rd Quarter release of CMHC Housing Market Outlook Canada, regarding Alberta:

“Prices: After the unsustainable gains
of the last two years, the average
resale price will advance by only one
per cent this year. Market
conditions favour the buyer, owing
to a surplus of active listings and
dwindling sales. Look for a gradual
shift to more balanced conditions in
2009, resulting in modestly higher
price growth of three per cent.”

#26 Blacksheep on 10.29.08 at 1:52 am


You pretty much nailed it!

The masses dont see whats going on,

deleveraging on a global scale.

All assets are on sale, big time.

Things are just getting started with no bottom in sight.

Typically a recession can cause a housing correction,
but this time, we will see a housing correction cause a

A prudent time to reduce debt, if possible.


#27 buy_canned_goods on 10.29.08 at 2:04 am

8 jobs now available at GE money! “Collection positions” all across Canada!! (Sarcasm intended)


#28 David on 10.29.08 at 2:22 am

One can almost in a compassionate moment develop a sense of empathy for the realtors trying to defend the indefensible. That is a tough job. I have yet to hear a realtor say that current bubble house prices are in line with fundamentals or comparable rents. The new mantra is that the market for next few years will be balanced, whatever that means. Homes selling at 12-15 times local median incomes does not sound very balanced to me. To quote the estimable Alan Greenspan, “We’re just not smart enough as people. We just can not see events that far in advance.”
This seems to be the prevailing sentiment with respect to the housing bubble these days. The battalions of greater fools probably feel that way now as well. All those 0/40 financed McMansions with their Roman baths and bonus rooms are causing serious havoc in the real world economy now. It was the real estate Cassandras that had it all wrong for not being as smart as the really smart people who couldn’t foresee the damages in advance.
The realty crowd might as well admit that some harsh medicine is in order.

#29 brazer on 10.29.08 at 8:10 am

In Canada, you’re covered for up to $100,000 in losses if a member of the Canada Deposit Insurance Corp. goes under.

Here’s a guide to how your money is protected by CDIC and other non-profit agencies doing similar work.



good reading for those worried about their deposits.

#30 brazer on 10.29.08 at 8:16 am

Sterling Airways to file for bankruptcy, blames collapse of Icelandic economy

“During the last few weeks, the management, board of directors, and the shareholder of Sterling Airlines A/S have been fighting a battle to keep the company alive,” the airline said in a statement on its Web site on Wednesday. “Sadly, this has not had a positive outcome, and we have therefore decided to file for bankruptcy which will be done later today.”

Sterling said it won’t be able to refund passengers who have bought tickets from the company Web site.


another one bites the dusts.

#31 POL-CAN on 10.29.08 at 8:51 am


According to CAR prices are down 47 % in less then 18 months. In a normal bubble unwinding, the decline should take about as long as it did for the prices to go up. This is not a normal, nor is this a normal recession as too many things are imploding all at once.

I have a feeling that the Canadian correction will be even faster then that of Cali and hence agree with your statment:

“Sometime next summer, maybe the fall, perhaps sooner, there will be major buying opportunity on certain kinds of real estate which have a sustainable future. More to come on that.”

Look out below :)

#32 Downsized and Delighted on 10.29.08 at 9:08 am

Astute buyers move in before the bottom is hit, not after, And, you’re welcome! — Garth

Excellent point Garth! And they take the rare opportunity that has been bestowed upon them to buy in a neighborhood they couldn’t otherwise afford. (and I don’t mean some shiny condo in downtown Toronto).

#33 Downsized and Delighted on 10.29.08 at 9:26 am

My_view, you should have been in cash 3 to 6 months ago. Slowly move into stocks while keeping an emergency fund on hand

Stop looking in the rear view mirror to invest……….”

If this isn’t looking in the rear view mirror I don’t know what is.

For My_view, and others out there in cash right now, perhaps you should consider the fact that there are a ton of hedge funds liquidating right now, and they will continue to do so till AT LEAST year end. They’re very clever – they jump in after a little rally (watch out today), and then they wait for the next dead cat bounce. Those GIC’s look pretty good to me “My_view”.

#34 My_View on 10.29.08 at 9:39 am

For all to know, I`m 85% in cash making interest since June 08. I sold all my stock, and yes now I am buying back at half the price + double digit dividend yield. I do not believe in GIC`s. My point was that the banks sales teams are in overdrive to lock capital.

#35 lgre on 10.29.08 at 9:39 am

a house purchase should be done when rent and ownership have a close relationship. We all have to live somewhere so it makes no sense to really wait until the bottom hits. if by next year we see another 10-15% drop then I will most likely buy again, if it costs me a an extra 2-$300 dollars more a month to own then rent then I would rather own.

#36 Ginger on 10.29.08 at 9:41 am

RE: Astute buyers move in before the bottom is hit, not after, And, you’re welcome! — Garth

Garth: You’ve said elsewhere that this crisis will go on for years. If it’s following the US by two years, we have numerous more years of price drops to go. Why would astute buyers buy real estate so far before the bottom hits?

#37 Calgary_rip_off on 10.29.08 at 10:17 am

More good news Garth to start the day!!!! Thanks!!

I hope you are right Garth!!!

Things in Calgary are still so far out of whack with affordability.

I heard from the news that the market in Calgary will continue to crash into 2010. Bring it on!!!

All those houses listed on mls.ca in Calgary are double what they are worth. What a total rip off.

Who can afford a house that is worth $200,000 that is priced at $400,000? Only a complete idiot, fool.

So bring on those depressed values. They will be back in line with reality.

Bottom line: Those who bought at the peak who expected to live in the homes(not just an investment) dont have much to worry about because eventually the price will come back in line what they bought it for. But the unethical who wanted a quick buck and screwed up the market for the ethical people who just want a reasonable place to live in will have serious issues. Good.

More crashing news tomorrow, hopefully.

Please email Ed Jensen and tell him to stop taking crack.

#38 The Tallyman on 10.29.08 at 11:21 am

Panic Realtors will eventually have to face facts:

– honesty really is the best policy
– Hyundai’s really buff up to a nice shine!
– Macaroni & cheese is way better if you can afford a vegetable to go with it.

what goes around comes around spinheads!

#39 squidly77 on 10.29.08 at 11:23 am

how low will Canada go

#40 CTA on 10.29.08 at 11:29 am

Garth summed up correctly what will happen to Canada’s real estate future. Canada closely parallels the main features of the USA housing crash that being mortgages have surpassed affordability and median incomes. Real estate prices have artificially gone up due to baby boomers buying second homes in hopes they will earn easy money in the unrealsitic expectation their bricks and mortar always goes up in price. i.e.Calgary, Vancouver, Toronto and GTA.
Baby boomers now are now experiencing declining assets such as stocks, RRSP’s that are in mutual funds, and real estate. They are the most educated generation and their knowledge and expertise will be needed and many will decide or have too out of necessity continue to work into their late 60’s and 70’s and not retire. They are far healthier than the WW II generation.
This is happening in the USA. A large percentage of the first wave of boomers are opting to stay in the job market, especially if they are professionals or have something to give to the community in terms of knowledge and know how.

#41 Red-dog on 10.29.08 at 11:55 am


We need foreign capital for investment in Canada for at least 4 reasons.

1) Historically, our largely resource-driven economy requires huge amounts of new investment capital every year just to maintain existing levels of exports, plus additional investment to grow the economy.

2) Existing tax policies encourage consumption, not savings, so we are unable to save enough to meet our current capital investment needs.

3) Governments are loathe to borrow in order to finance large capital projects to build new infrastructure and to replace crumbing existing infrastructure. This includes new projects to minimise greenhouse gas emissions, and to promote energy efficiency and sustainable development.

4) We are inefficient users of capital, for various reasons, and therefore need more of it.

In other words, we are hooked on imported investment capital. To change this situation would require a very wide range of changes in public policy.


#42 dd on 10.29.08 at 11:59 am

26 Blacksheep JO-#13,

A time to reduce debt is when times are good. When the stuff is on sale … this is the time to leverage a bit.

#43 JET on 10.29.08 at 12:13 pm

“We don’t have a problem; it’s being self-inflicted.”


How do you spell denial again?

#44 brazer on 10.29.08 at 12:36 pm

Michigan consultng firm says GM-Chrysler deal may cost 25,000 jobs

DETROIT – A Michigan consulting firm says 25,000 to 35,000 people employed by automakers will lose their jobs if General Motors Corp. acquires Chrysler LLC.

#45 pbrasseur on 10.29.08 at 12:43 pm

I’m getting more and more fed up with… the medias and bloggers, who are predicting everything and its opposit a hundred times a day.

So now with unemployement in Canada and the US still well below 8% we are presumably entering great depression II. The US RE market has been declining for 2 years but for many the crisis has not even really started yet. WELL WHAT IS IT WAITING FOR?

This does not make any sense!

I think if things were as bas as some claim they should be much worse already.

What we have now is not even a recession yet, nevermind a depression.

So forget the medias and the bloggers (such as this one) and all those know-it-all commentators for a minute. You don’t always need someone to explain you the reality, instead look around you and juge for yourself. Are things that bad? Simply put: NO.

#46 brazer on 10.29.08 at 12:47 pm

Housing market ‘alarms’ Merrill

As of August, there were more condos under construction in both Toronto and Vancouver separately than there were in all Canadian cities combined a decade ago, Mr. Wolf and Ms. Kwan said.

“And as in the U.S. two years ago, we are now seeing completed units pile up unsold in Canada, a clear sign of overbuilding and an ominous sign given the voluminous supply still in the pipeline,” they said.

#47 gold is money on 10.29.08 at 12:53 pm

Then we got this from England:

Britain may need 0% interest rate to avoid a depression, leading economist warns


This commentary came from “Bill” and it is a dandy and correct:

Bill H:

To all; I wrote during the Fannie/Freddie debacle that everything financial would end up n the Treasury’s lap. It is now clear that all the past financial shenanigans are coming home to roost and the Treasury is creating plan after plan to save everything. What originally started out as a credit crunch has now morphed into a worldwide CURRENCY CRISIS. Many nations worldwide are currently in the throes of currency runs. A currency run is for all intents and purposes the same exact thing as a bank run, however these runs are on nations and currencies not just individual banks.

Currently Iceland has raised interest rates to 18%, Hungary has gone to 11.5 % and Romania has overnight rates of 900%!!! Pakistan is on the verge of bankruptcy, Turkey is looking for IMF loans, the Brazilian Real has cratered and Russia is sporting CDS rates above 1200 which is higher than Iceland’s was just before their collapse. Nations will fall like dominoes, interest rates globally will explode while currencies implode.

Recently, many people have been talking about the “Weimar” experience. I agree that hyperinflation and destruction of currencies are in the cards. However, I get the sense that while people are talking about it, they don’t see the whole picture. The “whole” picture is that every nation, every banking system, and every currency on planet earth is part of this domino chain. The point is, THIS IS A GLOBAL CURRENCY CRISIS WHERE !!!ALL!!! CURRENCIES COLLAPSE. This is plain and simply a global bankruptcy and a FIAT banking system implosion. The Fed has fought it along with Treasury, the ECB, Bank of London, Canada, Australia, Russia, Brazil, etc. etc. etc. and now even the IMF. They are all failing and coming under the weight of the deflationary steamroller.

This will result in a new “system” and Gold will be at the epicenter. Many are currently fretting about their Gold share holdings because they have been hit very hard in the stock market meltdown. I believe that when the smoke clears this will become an ounce counting exercise and currencies that have “ounces” held or access to ounces within their national boundaries will fare best. Companies that have “ounces” in the ground or in production will be revalued literally overnight.

If you had a crystal ball and it told you that virtually all countries and all currencies were entering the bankruptcy/failure stage, where would you want to store your wealth? Which currency? What is currently happening is that anyone who attended the previous party has been infected, this infection was supposedly contained but now even governments are wheezing, hacking, and vomiting. If you understand that the current crisis is systemic and surrounds not only banking systems but also the currencies themselves, please take the time to contemplate what happens, WHAT HAS ALWAYS HAPPENED, in the after math of a currency crisis.


And this is why the Dow rose by 900 points today. Tomorrow we will get our rate cut and then everyone will then realize how dire everything is becoming.

#48 dd on 10.29.08 at 12:59 pm

Suncor at $60 oil makes money.


#49 Renting and sleeping at night on 10.29.08 at 1:00 pm

“Flashy new landmark towers in those same cities will never be built, while in Calgary they already know the score.”

In the Vancouver area, the following high-profile developments have either folded up their tents of decided not to build:

Ritz-Carlton, Evelyn, V6A, Infinity Towers, and Sky Towers.

All five this month.

#50 Panic Profit on 10.29.08 at 1:32 pm


Nobody has been able to answer this…

Q: When real estate prices crash what happens to rental rates?

#51 Dawn in Calgary on 10.29.08 at 3:02 pm

Nevermind the banks with their hands out…. here comes the rest of them….

Can I get in line too?


Auto-parts makers need $1 billion to survive: group

A group representing Canada’s struggling manufacturing industry says auto-parts makers could disappear unless the government gives an emergency short-term loan of $1 billion.

Manufacturers, particularly those exporting auto parts to the United States, are struggling because of the worldwide credit freeze.

#52 BBC on 10.29.08 at 3:41 pm

I love you guys! The comments are always interesting and most times amusing (great with a coffee), and a hell of a lot better than the ‘so called’ News reported by the ‘so called’ experts!!! :)

#53 rjag2034 on 10.29.08 at 3:42 pm

So if the whole FIAT system is being challenged, which I believe it is, is their a higher chance we will be entering a period of strife that may lead to WW3?

Just thinking of some of the less stable areas like Pakistan where if it collapses there will be anarchy and the masses will turn to the radical Mullahs like never before. Multiply that by 1/2 dozen other countries and you have some pretty scary scenarios.

#54 blacksheep on 10.29.08 at 3:50 pm


First comment, i agree, thats why i sold my home this spring at peak values.

However, now is not the time for more leverage,

the next 12-18 months will offer better deals,
but only with CASH, paid in full.

#55 dd on 10.29.08 at 3:54 pm

#50 Panic Profit,

In general lower real estate prices equal lower rent. It will take time however rental rates will come down.

#56 islander on 10.29.08 at 4:06 pm

Tallywacker: Realtors did not cause the bubble. Buyers did. Crack an economics textbook.

CalgaryRipOff: Houses are worth what people are willing to pay for them, not what you want to pay, or wish they cost.

#57 Peter on 10.29.08 at 4:08 pm

“gold is money” what happens to our debt? If I am indebt to the bank for $500,000 do I not have to pay it back? If all money goes to zero those in debt simply are free and clear?

#58 From the Hip on 10.29.08 at 4:26 pm


I think rental rates generally are pretty static. Rental increases are pretty much regulated so there are not huge changes statistically. However, they also fall under the law of supply and demand, so if there is a lot of people selling homes and looking to rent it will increase the cost of renting.

#59 jose on 10.29.08 at 4:27 pm

I disagree with Garth about buying before the market hits bottom. I think that real estate not being quite liquid and people psychology or greed/fear makes it very easy once you see prices have stabilized as I don’t expect any more re bidding wars. On the other hand, i’ve been burnt before (or should I say cut :) trying to catch a falling knife.

#60 crs on 10.29.08 at 4:46 pm

Shifty #4

Your understanding of what a Canadian boomer is off by many years. My father is 60 this year and is considered at the front of the boomers. Every decision my parents have made has been a lucky one as a result. The boomers that came later will not be so lucky. Anyone retiring in the next five years is likely at the top of the pyramid and has a good amount of savings due to always being at the forefront of housing and vacation property buying/selling decisions. But the bulge comes later, what is it now? 10 years away from the majority retiring? Not sure exactly, just sure it’s not 5.

#61 dd on 10.29.08 at 5:29 pm

#34 My_View,

Oh and don’t forget the Gov’t of Canada Savings bonds.
Anyone that was pulling cash out of the market in the last month and is not thinking about starting to look at the market is going to be kicked twice. Once going down and once going up.

Of course not all assets are going to go up. Real estate was highly leveraged so this asset class will stay down for a while. However assets with stready hight free cash flow are going to go up.

#62 dd on 10.29.08 at 5:37 pm

#35 lgre,

Do you know for a fact the market will fall another 10-15%? Maybe 5%? Maybe 30%? I see no problem waiting for the housing market to hit rock bottom.

Wait until there is more blood in the streets to put in low ball offers. Wait until the US news starts talking about the massive layoffs in the months ahead. News of more banks, insurance companies, and hedge funds going bust. Wait until a couple more countries go into default.

The worst is not over.

#63 Jesse on 10.29.08 at 5:51 pm

I’m waiting for the housing to crash here in Saskatoon as it’s completely unaffordable for anyone besides yuppies or people given handouts by mom and dad.
A 600 sq foot 1960’s condoized apartment should NOT go for 150g’s…

Crash crash crash!

#64 EJ on 10.29.08 at 6:16 pm

#50: Panic Profit

A: Based on what’s happening in the US, they drop due to the glut of rental properties placed on the market by the speculators who can’t sell at the price they want.

#65 brazer on 10.29.08 at 6:23 pm


And this is why the Dow rose by 900 points today.

you posted that in the afternoon….the dow closed down for the day …. -74 pts.

easy come easy go.

#66 surferbob on 10.29.08 at 6:45 pm

“Nobody has been able to answer this…

Q: When real estate prices crash what happens to rental rates?”

IMO rental rates will be 200-300 dollars cheaper than buying

#67 anonymous on 10.29.08 at 6:57 pm


Sask housing will bottom at 4:25pm, April 14th, 2011.

Of course, you don’t have to buy at the EXACT bottom. Unless you are like me and own a really expensive crystal ball.

I have banned any buyers from buying until Spring 2010 in Saskatoon. Banned, on penalty of death!

#68 gold is money on 10.29.08 at 7:28 pm

that was yesterdays close of the dow up 900 points

#69 David on 10.29.08 at 7:34 pm

These are lousy times for people who stubbornly cling to fundamentals. All those unregulated hedge funds are deleveraging and doing massive sell offs to cover bad trading positions. Instead of calling them hedge funds why not call them over leveraged and speculative funds. I hope there are a few people out there who remember Calgary hedge fund manager Brian Hunter, an allegedly a brilliant mathematician who managed to lose no less than $6 billion US trading natural gas futures only two years ago.
Calgary Rip Off, I actually went and looked at Calgary house prices on the net. For $400K an ordinary family can barely purchase an 800 square foot crack house with no green space. $700K will get a family a poorly constructed environmentally unsustainable McMansion an hour drive from work. Decent family housing in Calgary starts at about $1.3 million. The only answer is massive house price deflation at this point.
All this idiotic greed and debt driven speculation is soon coming to an end.

#70 Chamberlain hat wave on 10.29.08 at 8:10 pm

#53 rjag2034

No WW III – nucleur weapons.

The boomers will have to downsize to cheap condos and keep working longer.

#71 Shifty on 10.29.08 at 8:10 pm

#60 crs
Most people don’t work till 65 who don’t have to. Paying off a house and keeping your nose clean with regard to debt has some major advantages when it comes to making choices about retirement. Change your retirement date from 65 to 55 and your math will start to make some sense. Life doesn’t end at 55 but is a hell of a lot more fun from December to February in Mexico.

#72 dotava on 10.29.08 at 8:15 pm

#40 CTA on 10.29.08 at 11:29 am

And if that happened where young people will find a job?!?

#73 T.O. Girl on 10.29.08 at 8:26 pm

Looks like Garth’s predications are truly happening!! Spoke to a family member who is a real estate agent today and he told me things are pretty bad in toronto, he specializes in the North Toronto area, prices are dropping offers are becoming scarce, people that are putting in offers are low bidding 30%, also homes are being taken off mls and relisted at lower prices (obviously not low enough) because they are not being sold. Sellers have to be more realistic with the times. People are scared to take too many chances now with their money and lose it, plus who wants to be someone’s fool. Can you imagine buying a house today and a few months from now it is worth 100-150 000 less than what you paid !!!!! wow! wouldn’t want to be that fool. People be very cautious times are tough they will get worse. The boom years are over THE BUBBLE HAS POPPED!!!!!hope you weren’t caught in it!! Thanks Garth for enlightening me through your book and blog!!

#74 Rick on 10.29.08 at 8:27 pm

#41 Red-dog on 10.29.08 at 11:55 am

Unmitigated bulls***. Give your sociology professor a kiss on the cheek for me, but please spare us.

#75 Rick on 10.29.08 at 8:44 pm

#45 pbrasseur on 10.29.08 at 12:43 pm

I’m just a knuckle dragging middle class tradesman and even *I* know individuals who have lost upwards of over 1/2 million in the markets. That isn’t so bad?

Let me know how you live a live of self absorption and denial, I’d like to join the club.

Now, back to real estate………….

#76 Rick on 10.29.08 at 8:49 pm

#56 islander on 10.29.08 at 4:06 pm Tallywacker: Realtors did not cause the bubble. Buyers did. Crack an economics textbook.
True, but lets not talk economics, lets talk ethics. That’s where the Realturd industry *really* fumbled the ball. Islander, crack a textbook on ethics.

#77 lgre on 10.29.08 at 9:17 pm

dd – I don’t know when the market will bottom out, neither does anyone else . Put it this way, any house I purchase must be able to carry on a $1000/m mortgage with the max of 20% down (as I have done with my last house), if it does not I will not purchase. I am a pretty conservative shoppper as I dont need or want anything big or fancy. My belief is spend as little on your home and bills as possible, and spend your money on things you love to do, life is short… I dont intend to become bank slave as alot of people choose to do in the last few years. If the market is still shaky and uncertain a year from now then I will hold off. I guess only time will tell.

#78 POL-CAN on 10.29.08 at 10:31 pm

# 77 Igre

Well said…

I belive in sticking to the hard and fast rule of no more then 30 % of NET income should go to housing. Period.

If you do not have the money for the house that is your wet dream then buy something smaller. Move up when you build up the equity that makes it possible.

The days of instant gratification that we have become so used to are over…. Live withing your means people. You will truly be happier….

#79 kc on 10.29.08 at 10:37 pm

#74 rick, you beat me to it… cheers.

#80 JO on 10.29.08 at 10:39 pm

As everyone knows, it is an educated guessing game when it comes to markets and it doesn’t matter if you have a PHd in Finance or not. That said, i am betting that RE will be down for 3-4 years. The trick in the next 3-4 years will be to hold on to your purchasing power. The comment above about the currency crisis makes some good points but on the whole, totally misses the underlying theme of credit destruction via paydown or default. Also no mention of dropping velocity and the mood of the public which is focussing on being frugal and avoiding debt. I do think we’ll eventually have a high inflation but there ‘ s more deflation in the cards before we get there. There has not been any hyper inflation with a declining land/RE market from what I have looked at. If gold breaks a new record and silver does better, i may convert some money into it but until then TBills and foreign gov bonds and a little bullion will do me fine.

#81 Droppin on 10.29.08 at 10:43 pm

Here are two homes in Toronto, just east of Vic Park and north of Lawrence. Prices are coming down.

First one was originally listed at $440G and has since dropped 9%, down to $400G.


The second was originally listed at $450G, and now is $430G.


Not as big of a drop, but then again, it is still on sale.

Just to restate the obvious…plenty of houses in the area where only a few months ago, the choices were slim.

#82 POL-CAN on 10.29.08 at 10:47 pm



Try to sum up the Great Housing Ponzi Scheme and Crash in twenty words or less

Here’s my shot at it:

Unregulated obscene leverage gambled and lost by fraudsters, sheeple and thieves while corrupt and incompetent politicians and reporters slept.

Or the simpler one-word version:


#83 Canadian Housing Market in for a Rough Ride | Loonie Journal on 10.29.08 at 11:32 pm

[…] Turner has an interesting post up on the blog for his book, Greater Fool: The Troubled Future of Real Estate. For those who are […]

#84 Observant on 10.29.08 at 11:33 pm

If the coming recession is deep and long, won’t the ‘bottom’ stay rather uniformly flat? IOW, real estate prices will follow a stretched out ‘U’ rather than a sharp ‘V’ … leaving time for investors to shop the market.

Considering all the other forces acting on real estate and the economy in general, I would think investors can sit on the sidelines for quite the while and pick and chose their investments through 2009-10.

Act in haste … repent at leisure … for investments and life.

#85 patriotz on 10.30.08 at 12:03 am

In other words, we are hooked on imported investment capital. To change this situation would require a very wide range of changes in public policy.

Wrong. Canada has a current account surplus, which means we are an exporter of capital, by definition. Take a look at the tables at The Economist

#86 CalgaryRocks on 10.30.08 at 12:04 am

Calgary Rip Off, I actually went and looked at Calgary house prices on the net. For $400K an ordinary family can barely purchase an 800 square foot crack house with no green space. $700K will get a family a poorly constructed environmentally unsustainable McMansion an hour drive from work


Is this a crack house?

It’s actually one of the most expensives in the area, because it has a great view from the back.

#87 Out_of_Vancouer on 10.30.08 at 3:56 am


My wife and I decide to leave Vancouver since that market was completely nuts. To upgrade to our next home, we would have had $450K mortgage and it was obvious the inventory was raising and the bubble would burst. I was reading Garth’s blog every day which helped with the decision to go East and in Ottawa for the economic storm coming our way. Ottawa is a stable town compared to YVR but I’m happy I sold my house in May and moved to Ottawa in August … Garth thank you.

Now, we had an option to rent a year and we came close to that but we found our dream home. 5 minutes from Kanata tech center. 20 to downtown Ottawa, backyards for every house on our street is parkland with lots of trees, schools for our kids are rated some of the best in Ontario, and lots of snow shoeing outside my door steps since I love winter! To boot, low turnover in the whole area for property sales….

I know home prices will go down, but this is our dream home with location, location, location in mind and considering the killing we did in Vancouver if the market goes down 20% it doesn’t compare to those in Vancouver still owners of crappy, overvalued homes … my kids will be here for a long time unless we have a total ecomomic collapse .. which I will just call it a day and head to my log home living off the land.

BTW .. I’m not a boomer and my kids deserve a stable home they call home hence why we moved into an awesome neighborhood and the best street in Kanata.

I know short term prices will go down but life needs a balance and if we can afford 10 year of double-up mortgage to have an awesome home and neighborhood where my kids can play hockey on the cul-de-sac, the soccer field steps away, hiking minutes away or paying hide and seek-and-seek in the backyard being trees and parkland.

#88 brazer on 10.30.08 at 8:19 am

Pension crisis looming

It shows that some 70 per cent of the 400 defined benefit plans under its jurisdiction – plans in which the company guarantees retirement benefits and assumes investment risks – were less than fully funded at that time, and on average the shortfall was less than 10 per cent.

But the numbers do not take into account the turmoil of the past few months.


this will get very ugly.

#89 brazer on 10.30.08 at 8:25 am

Cracks appearing in condo land

The problems have extended from suburbia to downtown Vancouver where Ms. Wood, an agent with Re/Max Masters Realty, had sold a unit in the Ritz-Carlton, a place where “cheap” begins in seven figures. But Holborn Group, the developer had not paid her commission. Concerned that something was terribly wrong, she did something that would have been unthinkable a year ago, in the days when real-estate was still quick money and worry-free.

She marched into the office of Holborn, sat in the board room and demanded her money.

“I said, ‘I’m not moving. I don’t care how long it takes until I get my cheque’,” she said. “I had nothing to lose. What’s the worst thing they’re going to give me, nothing? I’m not moving if I have to get arrested, do a hunger strike, or phone CTV news.”

Thirty minutes later, after a conversation with the Simon Lim, Holborn’s president and managing director, she left with her cheque. That night, local TV news carried a story that construction had been halted at the Ritz-Carlton. Mr. Lim’s reason: the need to redesign the parkade. He denied financial troubles were to blame.

In a brief interview, Mr. Lim said, “it’s my intent to resume [construction],” but declined further details. “It’s a private site, I own it. It’s a private enterprise. I don’t think I have an obligation to disclose what my private business plans are to you.”

Ms. Wood can’t quite believe such a high-profile project could have problems.

“I’m just very shocked,” she said. “I don’t know what to say. I’m at a loss for words. Vancouver should be a strong market.


that last sentence in bold “should” tell you all you’ll ever need to know about most real estate agents.

#90 lgre on 10.30.08 at 9:26 am

POL-CAN – Unfortunately too many people are spending 65%+ of income on housing, not just in Vancouver and Calgary but here in the GTA as well. Too many people have dream homes, people work the grind for 40 years just to pay off their dream home and forget to live, too common if you ask me.

It makes it harder for the people with some common sense to get ahead, not impossible though. I know someone who can’t afford a $170 seasons pass at Blue Mountain because of their housing expense to income ratio. Now how ludicrous is that? In my books that is financial slavery not life.

#91 Really Droppin on 10.30.08 at 9:34 am

Droppin… This is my favourite one. Originally listed in Spring 2007 at $940k (or was it $960k?). Is now sitting, collecting dust at $799K.


My bet is that it will sell for well south of $600K when all the dust dies down (still a ridiculous price but it is along the highly sought after Yonge subway line).

#92 POL-CAN on 10.30.08 at 10:02 am

# 90 Really Dropping

Nice place….. Too far north for me but very nice….

If you want it offer 500K, and not a penny more :)

My example is the following:


Listed at 725k, dropped to 699K, a month later down to 599K, 2 weeks later still sitting empty…

#93 905 GenXerGurl on 10.30.08 at 10:07 am

#83 Observant:

I would tend to agree with you that there may be no big hurry to buy. I heard a seminar by Nouriel Roubini on YouTube where he predicted an L-shaped recovery. The baby boomers will start selling their homes in large numbers in the coming years soon so there will be lots of competition which tends to drive prices down anyway. Having said that, when this deflation era ends, we could have inflation or hyperinflation so I’m not sure what that will do. Also the interest rates will start to rise in a few years from what I understand.

#94 Downsized and Delighted on 10.30.08 at 10:22 am

I forgot to mention that I am a renter also! I pay $5800 U.S. for one month in Naples Florida. That house would sell for around $400,000 tops.

So, is it cheaper for me to rent?

Rental markets are ALL different. If there was a big supply of comparable rentals in every neighborhood, NOBODY would ever buy. Rentals are limited – many of them by condo boards, many by the fact that investors
will not hold them for very long, especially when the market is tanking. In my neighborhood, for example, you can rent a nice knock down house for around $2000 a month, and you can stay there for about a year. Of course, at the end of the year, you may have trouble finding another “knock down” house, because the market for new houses is drying up. So the investor holding that property has to ask himself ” should I keep the property with this renter, or should I sell it, probably at a discount?”. That’s the short answer on what happens to rent prices when the market tanks. (He sure as heck won’t be lowering the rent, I can tell you that!)

#95 Downsized and Delighted on 10.30.08 at 10:29 am

One comment about current house prices, versus “listing” prices: The asking price on a listing is totally meaningless!!!!!!!!

In my neighborhood, which I know inside out, I can give an example of a house that started at $789,000, then went to $750,000, then to $729,000, and now to $689,000! The problem is, the house was NEVER worth more than $629,000, and now may be worth even less.
So, gaining your knowledge from “listing” prices is a poor method, not to mention dangerous if you really are in the market.

#96 buy_canned_goods on 10.30.08 at 10:55 am

a real crack house (in ottawa):


#97 lgre on 10.30.08 at 11:34 am

“I forgot to mention that I am a renter also! I pay $5800 U.S. for one month in Naples Florida. That house would sell for around $400,000 tops.

So, is it cheaper for me to rent? ”

well, if you are staying there one month out of the year then it makes sense to rent if you are there 5+ months then you are better off owning..pretty simple.

#98 brazer on 10.30.08 at 12:39 pm

American Express to cut 7,000 jobs

In a stark acknowledgment of the tough times ahead in the credit card industry, American Express Co. said Thursday that it plans to cut 7,000 jobs, or about 10 percent of its worldwide work force, in an effort to slash costs by $1.8 billion in 2009.

The New York-based credit card issuer said it is also suspending management level salary increases next year and instituting a hiring freeze.

#99 pbrasseur on 10.30.08 at 1:24 pm

Some signs that the US RE market is seeing some light at the end of the tunnel:


I believe that the US will come out of this first and as usual Canada will follow.

Europe on the other hand still has to face up to its own RE bubble but also to its financing (much more than the US) of the credit bubble in emerging countries (ex communist bloc and South América in particular).


#100 pbrasseur on 10.30.08 at 3:07 pm

More evidence the bottom has been seen in the US:


#101 theone on 10.30.08 at 3:23 pm


#102 Downsized and Delighted on 10.30.08 at 3:54 pm

#97 Igre: Simple for you, because you are obviously smart.

#103 Dawn in Calgary on 10.30.08 at 4:22 pm

Lovely articles posted today….I got whiplash from them. I think I should sue.


Alberta residential real estate sales jump; prices dip

MLS residential sales in Alberta increased by nearly 19 per cent in September compared to a year ago, the second highest hike in the country behind Newfoundland’s 26 per cent jump.



Calgary’s housing starts to plummet this year, next: CMHC

Total housing starts in the Calgary Census Metropolitan Area are forecast to decrease by 17.8 per cent this year and another 36.9 per cent in 2009, according to a housing market outlook report released Thursday by the Canada Mortgage and Housing Corporation.


#104 nonplused on 10.30.08 at 5:05 pm

#39 Squidly77, your table made me throw up.

#105 POL-CAN on 10.30.08 at 5:39 pm

# 102 nonplused

That top line in the chart said it all….

– 65 % in 13 months…

And that can’t happen in Vancouver because?

#106 Mike on 10.30.08 at 7:23 pm

POL Can and Really Droppin 90/91. You guys are all over this thing. Makes my heart race to find some fellow Torontonians finally coming to grips with reality.
Your examples, and I cant understand how you tracked those houses so far back, make my finds pale in comparison. I have seen great looking houses drop in prime areas around 8% but yours are in the double digits. Odd thing about the one on Westmoreland they refer to it as prime bloor court village, I guess hoping people think that means bloor west village. NOT .
Keep up the good finds and pass more on if you can. We sold in feb 2007 and closed in sept 2007 and found prices still crazy so we rented and now find the market very different but sellers are still shooting for the moon.
Perhaps we will have a late xmas present if we find something over the holidays .

#107 CTA on 10.30.08 at 7:31 pm

#97 Igre. Naples Florida has always been expensive historically. I don’t see why. The city does not have any economy except for restaurants, thrift shops, and healthcare that services an aging snow bird population who are increasingly remaining full-time in Florida. Naples is extremely hot and humid in the summer and unpleasant. It is totally over priced for what amenities the city offers. I think the RE bubble burst there also…hopefully..its very over priced.

#108 Housing Bear on 10.30.08 at 8:57 pm

This Toronto home was on sale for 799K a few months ago. After a drop to 739K, it was recently reduced to 699K (about three weeks ago). Still no takers.


This townhouse was originally priced at 720K, and has been reduced about five times since then (to a current price of 599K). No bites yet.


In the same townhouse development, the owner gave up trying to dictate the market and listed at $1…



#109 Downsized and Delighted on 10.30.08 at 9:04 pm

105 CTA “”Naples Florida has always been expensive historically. I don’t see why. The city does not have any economy except for restaurants, thrift shops, and healthcare that services an aging snow bird population who are increasingly remaining full-time in Florida.””

Let me start with the last statement first: Aging snowbirds can’t stay in Florida beyond six months or they are considered U.S. residents – nobody wants the tax implications of that.

I think there might be a little more industry there than “thrift shops” – like the tourism industry for example.

The only person I know who spends time there in the summer is a former partner from an accounting firm which shall remain nameless, who was too cheap to spend the extra money for the winter months (and claimed that summer was the nicest time to be there).

The real estate bubble definitely has burst in Naples.

#110 pjwlk on 10.30.08 at 9:17 pm

#29 brazer: I hope the CDIC insurance is better than the FDIC insurance in the States. I recently read an article that said in times of massive failures like now that the FDIC would “endevour to pay out 50% of the money in 11 years”! Full payment, the article said, could take up to 99 years! And I was thinking that CDIC would pay out in 6 months. Hmmm…

#111 POL-CAN on 10.30.08 at 10:35 pm

# 106 Housing Bear

Someone should tell that $1 seller that Toronto is not Detroit just yet :)

Probably some kind of sales ploy meant to generate a bidding war. Sad really.

Someone should go in with an over the top offer of $2

#112 POL-CAN on 10.30.08 at 10:44 pm

# 104 Mike

I have been watching C1/C2/W1 since March. Only in the last 3 month have prices come down a bit. Stats say almost 15 % from Sept 2007 to Sept 2008. My take is that they have dropped that much in the last 3 months. I see 25 % by spring easy.

On the positive side, Banks are still lending.

Just got pre-approved for a 1 yr closed at 4.25 %.
They even tried to sell me on a HELOC at 3.5%.

With all the good deals that are out there already plus all the new ones that will be available in the oh so near future, one must be ready to pounce.

#113 crs on 10.30.08 at 10:57 pm

Boomers revisited:

Something didn’t sit well with me about the supposed age that boomers are likely to retire so I looked up the stats. So, once again I assert that Shifty’s statement about most boomers already being in retirement (or about to be) is very different than the reality. The median age of retirement from 96-00 is 61. It *may* be 1 year lower now, but its doubtful that most boomers will retire early. Boomers in Canada are currently aged 42-61. In 5 years most boomers will not be retired.


#114 CalgaryRocks on 10.31.08 at 8:30 am

The only person I know who spends time there in the summer is a former partner from an accounting firm which shall remain nameless, who was too cheap to spend the extra money for the winter months (and claimed that summer was the nicest time to be there).

The real estate bubble definitely has burst in Naples.

I lived in Naples for 5 years and summer is absolutely the best season. The roads are relatively empty, the snowbirds have flown home. It’s great. Plus, in the winter we had to deal with all our family coming over to visit ‘us’ because they missed us so much. haha! I guess I got used to the heat as it didn’t bother me at all. Florida is nothing compared to places like Vegas in the summer. Everyone has A/C, pools, there’s the ocean.

As for the Naples bubble it’s been burst since 2005. There was a point where there was absolutely no buyers, at any price. Curiously, prices have only come down 25% which says something about the relative strength of that town compared to other areas of Florida.