Why they do it

One day I had a tour of the big house factory which sits in a former farm field an hour’s drive west of T.O.’s core. Every day this monster turns out one perfect home from specs ordered by its new owner. The wiring and plumbing are finished. Paint and tiles are on. Dining room chandelier is hung. It’s a done deal when spit out the end of this massive building and onto a vehicle that looks like a cross between a flatbed truck and a crazed bulldozer.

The thing is then transported to a waiting hole in the ground a kilometre or two away, and planted. The advantage of indoor building is that it’s never halted by weather, the workers don’t get cold, there are no construction delays, more materials can be recycled and the whole thing runs like a just-in-time auto assembly operation.

These days, as you might imagine, things are slowing down a tad. The builder used to attract young buyers because all they needed to afford one of these showhomes was 1.5% down. For that, they got all the bells and whistles, plus mortgages too large to actually think about. But in a rising market, who cared?

Now that down payments have rocketed to 5% and 40-year amortizations have been slashed to 35 years, the builder’s offering the same homes for up to $70,000 less than last year. And still business is slow, I hear. Who would ever have thought selling expensive new houses to people without money would work out badly? Oh well.

The larger point worth considering is the place where these things end up – the burbs. Do they still have a future? After all, suburbs have been called one of the greatest wastes of resources in human history. Months ago I posted an article here from the Atlantic making a compelling case for the burbs becoming the slums of the future, rife with crime, largely abandoned by the middle class and worth pennies on the dollar.

I’ve also been following an interesting series on the suburbs over at The Oil Drum, where the focus is on what kind of life we’ll all be leading in the peak oil era soon to be upon us. Will energy shortages and rampant gas increases be the final death knell? Or has society sunk far too much into these sprawling mega-communities to ever contemplate their depopulation?

In decades to come, will these factory-made houses stand the test of time? After all, subfloors are particle board now, while joists are composite and soffits made of plastic.  Will an energy crisis put an end to any desire to live where it takes a litre of gas to get a litre of milk? Will years of economic hardship simply overwhelm owners with no equity, convincing them they’re better to bail instead of to sink? And if the economy actually spirals into deflation or depression, will the suburbs be the worst of all worlds – no urban community or transportation grid and likely fewer government services, like policing?  Will these near-city dwellers have total dependence on wavering utilities and yet be without enough land or resources to become self-sufficient?

Or, more hopefully, will the suburbs become communities where people carpool, telecommute, patrol their hoods and turn patchy backyards into communal gardens? Will they eschew the garage door remote and understand that when whole blocks of people are in the same economic boat they have to row together?

Well, nice thought, but I doubt it. I’ve walked too many of these streets and banged on too many suburban doors not to understand the prime motivation for people moving into these kinds of houses. Stuff. They want stuff. Granite or stone or glass countertops. Hardwood floors. Marble sills, columns, media rooms, stainless appliances, hot tubs and paving stones. Lots of stuff, and lots of credit to finance it. That is the current suburban dream, which is why it has no future.

If this mess continues (and I am forecasting it will, with a second wave of real estate declines next year plus a worsening economy and rising unemployment), I’d say the last place you want to be is anywhere near that housing factory, or a similar development.

The best place, of course, is clear. The exurbs.

116 comments ↓

#1 Suzukimum on 11.24.08 at 11:34 pm

Garth,

Where do you live? What kind of house do you live in? Perhaps, you could show us some pictures of your house.

My bike, maybe, not my house dude. — Garth

#2 Larry on 11.24.08 at 11:38 pm

If ever there was an example of urban sprawl then Calgary surely beats any other city in Canada if not North America. Here the car or should i say SUV is king and 5 bedroomed houses with ensuite and 3 bathrooms the norm. The houses are so close that you can pass the salt over to the neighbour aswell. The city has no public transport worthy of a city with a population of 1 million and just recently our city council announed property taxes will increase by about 19% over the next 3 years most of this of course to cover the cost of urban sprawl and suburbia. Any hearings of proposed developement close to existing LRT stations are met with not in my area attitude. I agree we are going to witness drastic changes in the next 2 decades on how the western world lives and thank goodness for that, god knows we need it.

#3 Dave on 11.24.08 at 11:50 pm

Ten years ago both Edmonton and Calgary city councils were saying they needed more immigrants, an expanding population base, or otherwise they would have to increase municipal taxes.

Now they have both seen a huge increase in the population and they say they need to increase taxes because of all the people who have migratated there.
Can’t they make up their mind?

How dumb do they think people are?

#4 run4dahills on 11.25.08 at 12:03 am

Garth,

I’m a little confused. I have to agree with Suzukimum. Where do you live? Where do you park that bike (toys)?
Hell you’re riding is the burbs. Tax dollars payed for your commute. I dont care to see pictures of your home. Hell, I look forward to living in the burbs. I agree with the stuff part, just stop adding all the fluff!

#5 Rick on 11.25.08 at 12:35 am

#3 Dave on 11.24.08 at 11:50 pm Ten years ago both Edmonton and Calgary city councils were saying they needed more immigrants, an expanding population base, or otherwise they would have to increase municipal taxes.

Now they have both seen a huge increase in the population and they say they need to increase taxes because of all the people who have migratated there.
Can’t they make up their mind?

How dumb do they think people are?
===========
Not dumb enough for anyone of position, power and influence to speak against current immigration policy.

http://canadianimmigrationreform.blogspot.com/

#6 TheComingDepression on 11.25.08 at 12:39 am

I don’t think we’ll have to worry about real estate soon, but rather more serious things. Such as the collapse of the Federal Reserve( which is imminent) the collapse of the US dollar by 90%, coming deflation, then hyperinflation.

#7 kitchener1 on 11.25.08 at 1:00 am

Garth, I love the part about about downpayments skyrocketing from 1.5% to 5% LOL

The burbs are going to be doomed at somepoint in the future (talking more about Ontario) as manufacturing plants shut down and idle. All of these burbs like Ajax,Oshawa,Guelph,Kitchener only grew as a result of job creation from manufacturing. With those jobs gone and not coming back, the people will have to relocate as well

#8 Happy Renter in North Van on 11.25.08 at 1:02 am

Garth, I think you are dead right on the whole mindless consumerism of suburbanites… Their desire for “stuff” is a testimony to their shallow, vulgar and selfish aspirations. A house of cards propped up by cheap and available credit…

#9 Dean on 11.25.08 at 1:34 am

Hi Garth
I don’t know if you’ve heard of this guy but he has written plenty about what you speak of today. http://www.kunstler.com/ I have spent most of my life working on these giant houses, always wondering how anyone could afford them. I guess they can’t!! I do heating and a/c and have have noticed a drop in replacement furnace calls this fall so I guess it’s on now in edmonton. Sell sell selll!

#10 nonplused on 11.25.08 at 1:54 am

never been to Garth’s house, he won’t invite me, but I’m going to guess:

Rural to semi-rural setting, a big cold room in the basement full of canned and dried food and other supplies, a descrete power house out back with a generator and lots of fuel, a hidden but pretty serious safe bolted to the concrete with lots of cash in it, but otherwise pretty normal. Might be some solar panels on the roof and the fireplace is wood buring.

Sounds like a nice place!

#11 Waiting for a Deal on 11.25.08 at 1:55 am

I don’t think the Suburbs are doomed to die a slow death, weren’t the areas where you are currently living right now Garth once considered the suburbs … and some problem was going to wipe it out in years gone by?!

… in his book (several years old) Economic Paradigms, Paul Pilsner said that new inventions and new ways of doing things will provide opportunities of increasing our wealth and making our natural resources stretch further.

While he lacked leadership abilities worthy of instilling belief, Mr. Dion offered many great ideas (many pilfered from the Greens … but hey, who cares as long as they are used!) … which would stimulate the economy right across the country and yes … in the suburbs too.

With the recent oil spike, I think many people around the world realize that dependence on oil, or imported food and goods and services don’t make sense and are changing their purchasing habits.

I for one have.

I have paid off $40,000 of debt this year.

I have saved up another $25,000 and by the time the market is hurting enough, I will have enough deposit for two homes.

Also, I buy local produce, and won’t purchase anything from Big Red. I just don’t trust their manufacturers nor do they show much regard for their environment in which the food grows.

I for one would feel safer living in the suburbs than certain areas of Toronto and its neighborhoods.

The smog, the pollution, all of the people and the traffic … forget, you can have it!

#12 nonplused on 11.25.08 at 2:04 am

Larry, I generally agree with your assesment of Calgary real estate and transit, but 5 bedrooms the norm? Not so. I would like a 4 bedroom plus office (3 kids, work from home) but these are less than 10% of the offerings. The houses have 3 bedrooms or less, a bonus room, a media room, 2 family rooms, and a 2 story entrance cathedral, but no 4th bedroom. Useless.

I’ve looked at $1,000,000 houses (list) with 1 bedroom backing on to a soccer field and playground! What’s the sense in that??? Are these empty nesters playing on the swings? Whiling away thier retirement on the slide and monkey bars??? Three car garage though and the whole front yard is concrete. No backyard, not even big enough for a hot tub, let alone a generator house and food supplies. Garth’s house is nicer.

#13 dave in calagry on 11.25.08 at 2:09 am

#3. The people either don’t vote or keep voting them in, so they know exactly how dumb the people here are.

Garth, it’s too bad people don’t realize the best things in life aren’t things. And thanks for being the first to get me thinking the $50 oil was possible, I secured a job outside of Oil and Gas (where I work now) that starts in January. I currently work for an EPC (we design new oil and gas plants) and the word on the street is the those guys in the big glass buildings downtown are going to use 2009 to choke the industry until prices come a way down… and it’s a coordinated strategy.

Thanks again,

Dave

#14 anonymous on 11.25.08 at 2:15 am

I’m done expanding. I’ve got a lot of nice toys that were aquired during the expansion years. But I’m done now. And will be until the economy turns.

All debts paid off and living lean. I’m clipping coupons and shit, no more dining out, no more ipods, tvs, cars, etc. I’m spending more time with the family and my cats. Frugal is my new lifestyle.

You see there are three types.

1. Extenders who borrow money, buy stuff, make investments, expand, etc. These clowns can’t control themselves and continue to spend into a slowing economy. More debt becomes more debt. They typically have a bad tan.

2. Basement-dwellers who fear the government, horde gold, think that savings accounts are risky and are generally no-nothing professionals. They sit on the sidelines when there is big money to be made. They bitch about inflation… well, if you money is making 1% in a savings account, I guess!

3. People who do both. They know when to expand and when to rein it in. I fit in this category. I play economic cycles like a violin.

It’s all about the money… not the moral judgement. I don’t care what other people do with their lives.

#15 wealthy renter2 on 11.25.08 at 2:29 am

Urban sprawl, volumes have been written about it. We like to condemn it, and planners love to talk about densifying the inner city to counter sprawl. I’m in many ways a hypocrite. I live in the inner city in a little house in a small cute neighbourhood with small cute houses, and I do not want my neighbourhood ruined with 6 storey apartments and bigger schools, and wider roads. Let the herds live out in suburbia, its nice to be able to have people to criticize.

#16 charliegosurf on 11.25.08 at 4:16 am

makes me think about a house of cards, you build when youre bored, they can look great for an instant, than the door opens…

the wind of change are blowin, and were all alone to enjoy it,

those houses can make you sick, constant headaches,all that glue in the plywood, laminate carpet…. alll that platic gases, mold sets in fast when you build a building in winter…

thenmore gases in the fancy new suv, ever wonder why that new car smells so nice, than you follw the diesel dually, taht can barely fit between the lines and have to hold your breathe, hurryup hurryup, and why do you feel so aggressive,mmummmmm, chemical coumpound maybe!

yeah, no wonder why you doubt the community effect, that grass cannot be many shade of green…and the greed, oh man the greed of gettin the stuff..we forget to mention about their way out of this, one airplane to mexico, another to cuba, lol and a trip to starbuck or costco in beetween.

#17 Stu on 11.25.08 at 4:38 am

Dave – “How dumb do they think people are?”

Dumb enough to spend 70% of their income on a big house and the other “stuff” Garth alludes to in his post.

#18 islander on 11.25.08 at 5:07 am

Just to play devil’s advocate: I’d say most people move to the suburbs to avoid the “charms” of the inner city: homeless people, needle exchange clinics, decrepit schools with asbestos in the walls and ESL students between them, crumbling roads, moldering public facilities, pawn shops, neglected yards, aging homes, and decaying downtowns, to name a few off the top of my head.

The suburbs are far from dead. For better or for worse.

#19 Bernard on 11.25.08 at 5:30 am

Larry, I have spent some time in Calgary and I am about to move there with wife and kids (new prof at the U of C) and one thing I can tell you is that although Calgary has unfortunately adopted the “western urban development model” it is not even close to being the worst in North America….compared to Los Angeles (I lived there for six years during grad school), and Las Vegas (I do some research near there) Calgary is a model of “sustainable growth”. The LRT, though primitive compared to what we have here in Munich (Germany), is functional and stretches across the city so that folks in the far south can get to downtown and the University area etc. without needing to drive a car all the way (ok, they have to drive to the park and ride). In LA they have a light rail that is near useless…the city is so huge and the burbs are so sprawled that nobody even thinks of using the rail lines. LA is best described as a series of urban islands separated by seas of bad trafffic.
Vegas is even worse…they have no rail system at all and barely any real free ways to speak of the surface streets carry the load from outlying burbs and the traffic hell is indescribable….don’t make plans for anything at lunchtime in Vegas…you will be late!!.

So why am I saying all of this…well I agree that Calgary needs to get its act together in terms of reigning in urban sprawl and improving its mass transit system, but it has made the right first steps and hopefully the coming crisis will help to convince folks that additional steps towards sustainability is the way of the future.

just my two cents
B

#20 Samantha on 11.25.08 at 7:05 am

When I looked at the photo accompanying this posting, the image that flashed in my mind was of the house game piece in a Monopoly game.

Prefab isn’t a short form of “pretty fabulous”. This type of assembly line construction is far from it, albeit fitting for the McMansion developers “field of dreams” . They built it, and people did come. People transplanted into their instant communities, and as far removed from a true sense of community as the urban areas they left behind.

But will people stay, now that the market is eroding and all the window-dressing in the world can’t hide the shoddy construction quality eroding along with it? I think some suburban areas will survive and others will become the slums of the future. Much will depend on the location and age of the development and the percentage of unemployment and foreclosures. High volumes of foreclosures and the headache of maintenance cost and theft may induce mortgagors to allow mortgagees to remain in the foreclosed homes as tenants.

If there is a shift back to urban areas, and if the suburbs do become rife with crime, then that raises the specter of urban dwellers surrounded by a suburban no-mans land. In that case, they are going to have to give truckers very large pay incentives to haul goods into the cities.

Adversity can bring out the best or the worst in people. I’m just an old marshmallow – I still hope for the best and prepare for the worst.

#21 brazer on 11.25.08 at 8:31 am

Canada’s economy entering deep recession: OECD
http://ca.news.yahoo.com/s/reuters/081125/business/cbusiness_us_oecd_canada

OTTAWA (Reuters) – The Bank of Canada has more room to slash interest rates, the OECD said in a report on Tuesday, forecasting Canada’s economy will shrink for three straight quarters as the global crisis bites into domestic spending.

#22 brazer on 11.25.08 at 8:36 am

Consumer confidence falls to 25-year low
http://www.thestar.com/Business/article/542726

OTTAWA–One of the last pillars of Canada’s economic foundations may be crumbling as the latest survey shows consumer confidence eroding to a new quarter-century low.

The Conference Board’s monthly poll of consumers found spreading gloom with the index drooping 2.9 points this month to 71, a depth not seen since the intense recession of the early 1980s.

#23 Marlene on 11.25.08 at 9:00 am

Garth,

Could you please give some examples of exurbs in Ontario? What cities are exurbs?

Thanks,

Exurbs:

The expression “exurb” (for “extra-urban”) was coined in the 1950s, by Auguste Comte Spectorsky to describe the ring of prosperous communities beyond the suburbs that are commuter towns for an urban area.[1] Most exurbs serve as commuter towns, but most commuter towns are not exurban.

Exurbs are not unique to the United States. They are also found in other land-rich developed countries, notably Canada. Reasons for exurban growth vary. In the 1970s, rampant crime and urban decay in U.S. cities was the primary ‘push force’, whereas exurban growth has continued in the 2000s even as most U.S. cities experience plummeting crime and urban revitalization. However, house prices have skyrocketed, so middle-class people who want a large yard or farm are pushed beyond suburban counties.

Exurbs vary in wealth and education level. Exurban areas typically have much higher college education levels than closer-in suburbs, and have average incomes much higher than nearby rural counties. Depending on local circumstances, some exurbs have higher poverty levels than suburbs nearer the city. Others (like Loudoun County, Virginia outside Washington D.C. and Ozaukee County, Wisconsin near Milwaukee) have some of the highest median household incomes in their respective metropolitan areas.

#24 Marlene on 11.25.08 at 9:03 am

Some exurbs in Canada:

Canada

* Mission, British Columbia
* Airdrie, Alberta
* Leduc, Alberta
* Barrie, Ontario
* Milton, Ontario
* Carleton Place, Ontario
* Clarence-Rockland, Ontario
* Vaudreuil-Dorion, Quebec

http://www.nationmaster.com/encyclopedia/Exurban

That is an old list. Some of those (such as Milton, the model for my post above) are now quintessentially suburban. The new exurbs are more distant from the cities – beyond commuting distance. — Garth

#25 Andrew toronto on 11.25.08 at 11:06 am

Garth what about schools , doctors , hospitals, transportation, isn’t it all relative.. I’ve been living in the city of toronto for 20yrs because my job was downtown , where friends and relatives all moved to the suburbs ,although I took public transportation to work , while they drove, I found with the lower cost of housing outside the city , plus the addition vechiles they required every 5yrs or so.. it pretty much balanced out the same except time lost due to the longer commute.. So moving to the exurbs won’t we be in the same delimma and the further north you go It may not be good for (farm use)and growing crops.

I have sold my house in April 2008 thanks to reading your book and am renting in the same neighbourhood , with my kids still going to the same elementary school. what about highschools and universisties will those become passay for the average folks if things fall into a depression. Or perhaps we won’t even have a health care system that’s free anymore with the baby boomers retiring ?..

#26 Chris L on 11.25.08 at 11:09 am

It wouldn’t be hard to fix those subdivisions. All you have to do is plow most of them down to put up commercial buildings and bring in jobs closer to home. A few of them can be axed and turned into farm field once again and the rest of them turned into multi-unit buildings to increase density and affordability.

By the way, those subdivisions are nasty and devoid of creativity and diversity. Can we return to building our own homes with our own two hands?

#27 POL-CAN on 11.25.08 at 12:10 pm

When will the madness end?

U.S. Pledges Top $7.7 Trillion to Ease Frozen Credit (Update2)

http://www.bloomberg.com/apps/news?pid=20601110&sid=aDqw8_eMzrhU

Insanity…..

#28 anon on 11.25.08 at 1:01 pm

Economy’s tumble even worse than expected in 3Q

http://www.google.com/hostednews/ap/article/ALeqM5jsanM66tszKz1zFq0LOG4XvWS7zAD94M2AOO6

#29 kc on 11.25.08 at 1:03 pm

Last night on TV (shaw #5 Knowledge network) here in abbotsford, I was watching part 2 of a 4 part series about the last 100 years of economic waves and cycles. Tonight they are playing parts 3+4 starting @ 9pm channel 5 shaw. they left off at the start of clinton’s election. They did a nice segment explaining Reagonomics and Thatcher’s nasty strikes + chopping.

tonight (nov 25) they are heading forward into what we are going thru today and how Clinton and Bush tried to service the world.

links to the show and dates times.

http://tvschedule.knowledgenetwork.ca/knsch/KNSeriesPage.jsp?seriesID=15499061&seriesTitle=commandingheights:thebattlefortheworldeconomy

#30 TheComingDepression on 11.25.08 at 1:05 pm

Check the world news today as the economic brink of catastrophic events that are hit everywhere.
http://www.thecomingdepression.blogspot.com

#31 Patrice on 11.25.08 at 1:26 pm

you are the “The end is near! Renpent!!” guy from the busy interesction in downtown big city.

What you are saying in this post is in it’s simplified version:” The end is near, The end of the world as we know it. The entire economy will colloapse. To be followed by the collapse of our entire society. People will begin to live a hybrid life between cavemens and modern mens. And the subburbs will be the first one affected.”

This is too extreme.

The usa will go into a tough moment.

The usa will make the long delayed changes needed to get back on track.

better school system (no more army of retards), talking and debating content instead as instead of appearance, restoring something closer to a free market economy. Killing evil giant worker unions etc…

in 10 years, the usa will be well on their way to become succesfull again.

#32 THECOMINGDEPRESSION on 11.25.08 at 1:46 pm

Patrice I think you should do some reading..10 years? Success? You mean a massive transfer of wealth between 2 countries, USA to CHINA which will collapse the US. Have you checked the latest deficit in the US? Who will make that go away? Your trying to say that society can’t collapse..because…of what? WHO? OBAMA? The dollar? HELLO OUT HERE? Everything comes to an end. GET USED TO IT!

#33 tonguestump on 11.25.08 at 1:48 pm

#19,
Have you ever ridden the subway in LA? Is this some experiential knowledge that you happen to own. Contrary to cultural hypnosis the subway rocks and so does the rail system. I realize there was a horrific accident several months ago and LA commuters suffer from severe isolation cage addiction in their cars but LA’s transit system is surprisingly efficient just ask a neighborhood leaf blower on his commute to Malibu from East LA.

#34 Tony on 11.25.08 at 1:50 pm

#18 Islander, you forgot a few more charms of the city:

– getting shot (accidentally) when shopping,
– getting mugged, and then having no money to shopping (in order to be shot),
– breathing in nice fresh polluted air from endless traffic jams,
– paying all kinds of extra taxes and user fees (see Toronto),
– watching all the corruption and squandering of tax money within municipal government (such as the Domi computer contract of a few years back in Toronto),
– letting my kids play on ancient facilities in parks and community centres as opposed to generally new facilities in the burbs,
– dreaming of actually having a back yard, even though you paid $1.3M for your house (or as we suburbanites refer to your house in the city – a single car garage)…

It’s a recession folks – maybe even a severe one! It’s not the end of the world. Garth is selling books and he’s planting seeds of fear.

Garth, you should tone it down a little…you’re losing credibility with every ridiculous post on your blog. I’ve been following you since the mid 80’s when I received your newsletter mailings, but a few more squirrel-type posts – and I’m going to brand you an idiot who’s starting to lose his marbles (or a smart cookie selling a lot of books)…

So, what in the above post is extreme, unreasonable or improbable? I trust you live in the burbs? — Garth

#35 Calgary Rip off on 11.25.08 at 1:52 pm

Bernard, vielleicht in Zukunft werden viel Hausen in Calgary offnen sind. Fur ein Haus ist es sehr teuer, und sehr klein. Hoffentlich werde alles nicht so teuer werden. Wenn Sie in Calgary kommen, Sie sollten ein bisschen langer warten, ein Haus zu kaufen. Was ich denke.

An accurate description of Calgary would be that it is similar to Brooklyn. One of the fears of home ownership is the zoning. Houses are so close together. This poses a real danger in case of fire. Just for that reason alone(the zoning) the house prices should be reduced.

Best thing to do is to hammer the people that advertise for the realtors if you want lowered prices in Calgary: Contact Mario T. and Marty Hope at the Herald and demand that housing be reduced to pre 2004 boom levels. Insist that if this doesnt happen, people wont buy because they can rent forever at cheaper prices. Marty seems to think that Calgary draws immigrants and not Canadians from other provinces. That is true because most Canadians know how overpriced Calgary is in all ways and wont make the move. Immigrants generally dont know or by comparison dont feel insulted by the from mars prices encountered here.

I dont believe the sky is falling, and I dont believe everything will implode. Perhaps this latest post should have read: “Greedy USA: You WILL implode”.

#36 PBrasseur on 11.25.08 at 1:53 pm

@ Marlene (# 24)

“exurb” Vaudreuil-Dorion, Quebec is where I live. But I work in downtown Montreal were I drive every day, it takes me about 35 minutes. Not that bad really. I’ve tried public transport but the service is so lousy I gave up

I love my “exurb” and I would’nt move closer to Montreal for anything. I’m right next to the countryside, taxes are low and it’s secure and clean. All things Montreal is not.

For the suburbia model to fail big cities would have to become more attractive, this is just not happening. In fact it’s just the opposit, Montreal for example is losing its middle class while that population is being replaced by poor immigration. Street gangs are a plague. The city is dirty, its infrastructures in ruins and maintenance (and public transport) is in the hands of state monopoly and its goons unions.

#37 Jon B on 11.25.08 at 2:05 pm

I just don’t agree with you. Didn’t also last time you brought up the impending death of the suburbs. Are these suburban communities doomed because they are all filled with debt-ridden, living-beyond-my-means type people? I don’t think so. Those types will probably move on after this economic storm is over and perhaps more financially responsible people will move in. Suburbs offer land and generally more living space than downtown communities. They offer less costly (economic and time) access than the exurbs do to areas where many people work.

There is no way the suburbs are doomed.

#38 brazer on 11.25.08 at 2:10 pm

EI claims skyrocket in Oshawa, Windsor
http://www.theglobeandmail.com/servlet/story/RTGAM.20081125.weiclaims1125/BNStory/National

OSHAWA — The number of Oshawa, Ont., residents receiving regular Employment Insurance benefits rose a dramatic 96.4 per cent from last year, according to Statistics Canada numbers that show the national average was up 3.9 per cent.

The agency reports 480,370 Canadians received regular EI benefits in September, an increase of 13,100 from September 2007.

#39 Patrice on 11.25.08 at 2:19 pm

#32 THECOMINGDEPRESSION

Yes a collapse of a society is possible. anything is.

It is just very unlikely. Like winning the jack pot at the lotery.

The g8, and many other countries in the world have enormous interests in the USA.
They do not like change.
They support each other, not out of compassion or anything but out of common interest.
And the survival of the USA is one of these common interests.

The rise of China, and the shift of power in the world forced the USA to wake up and fall off of the beleif that their monopoly would last forever.
For 30 years the USA got lazy and sit on this very belief.
Let the school system colloapse.
Forgot about the free market.
Let the government expand exponentially
etc…
They could afford all of this because they did have a monopoly.

Now things have changed, and the USA will need to address all of theses ridiculous problems.
So they can become competitive in a new world economy.
Which they are certainly capable of doing, but it will be difficult and painful for a while.

Or attack Iran, start a gigantic war that will delay their need to address their problems, hoping to address them whitout having to suffer a gigantic depression of their economy (without avail for sure).

#40 anon on 11.25.08 at 2:19 pm

The $800 billion plan to get banks to make more loans may work but it won’t help struggling homeowners. And some worry that more debt is the wrong solution.

http://money.cnn.com/2008/11/25/markets/thebuzz/

#41 Bottoms_Up on 11.25.08 at 2:31 pm

1.5% to 5% is a HUGE increase, when you’re talking about actually saving cold, hard, cash (for instance, $7,500 vs. $25,000). For some people this additional money is a big deterrent to buying, and will take years to save.

RE:#34:
Regarding ‘condensed’ condo-type living, you forgot waiting for elevators, sharing and fighting over laundry machines and people moving your clothes, dingy underground parking with a mile walk to the elevators (fun when carting $200 worth of groceries), the fire alarm going off at 3AM on a cold January evening because someone fell asleep making pizza bagels in their toaster oven, heavy foot steps overhead at midnight, weird furniture moving sounds overhead at midnight, loud music next door, overhearing annoying conversations in the hallway, sharing an elevator with an ex-convict (this happened to me in Hamilton and he was even wearing an orange jumpsuit). There are also many other reasons why people escape to the burbs. I believe this will continue.

#42 supersocco on 11.25.08 at 2:32 pm

Seems like most of my friends are still in la-la-land and buying flat screens and granite breakfast islands. Ignorance is still bliss it seems.

#43 Just a Girl on 11.25.08 at 2:33 pm

Human beings organize themselves, according to a whole lot of complex and inter-related economic, social, and environmental conditions.

If we’re going to have an informed debate about the suburbs and urban sprawl, we first need to be energy literate.

#44 Sam on 11.25.08 at 2:35 pm

exactly what Garth says..

http://www.canada.com/topics/news/national/story.html?id=6f1463fa-07c8-420f-baec-e42f0c448a45

#45 Dave on 11.25.08 at 2:47 pm

Hello Rick, re comment #5,

When talking about the huge migration to Alberta I wasn’t refering to immigrants from other countries,but the Canadians who went to Alberta seeking employment.

Edmonton and Calgary’s city councils wish came true, a huge population explosion. Now they blame the population increase on their inability to balance a budget.

As per foreign immigrants few people still believe that they are net contributors to the economy immediatly. Historicaly it usually takes one generation before they contribute more than they recieve.

#46 TheVancouverDope on 11.25.08 at 2:49 pm

Garth

who is controlling the price of oil? I’ve read there is more oil in reserves globally now, 1.5 trillion barrels, than five years ago. And it’s difficult to believe the price is a reflection of demand. We watch a 65% drop in the price per barrel… will we see the price for a liter at 50 cents at our local gas stations? We are being manipulated.

It seams when governments (like Obama) talk about alternative energy, oil prices drop. If I lived in the suburbs I would attempt to reduce/remove dependency on oil. Get a very efficient diesel car or maybe the Chevy Volt or a car like in the web site below:

http://www.aptera.com/

#47 dotava on 11.25.08 at 2:49 pm

#2 Larry on 11.24.08 at 11:38 pm

You are right, but builders (greedy bustards) do not think what will happen if fire start-on just one house and if they are so close who will stop the spreading (not to mention wind in some areas of the country). I live in Ottawa close to place that fire burns few houses and who every have any common sense will realize that if wind blows other way lot of people will stay without the house.

#48 dotava on 11.25.08 at 2:52 pm

#3 Dave on 11.24.08 at 11:50 pm

Unfortunately looks toooo much. :-(

#49 bcgirl on 11.25.08 at 2:52 pm

I was listening to CBC radio this morning, a discussion about deflation, what it means, etc, with RBC’s chief economist for global asset managment.

She explained basically that deflation means people are waiting to buy because they can be assured of lower prices down the road…leading to further downturns in the economy…spiralling on.

Then the discussion that people need to spend, an acknowledgement of North American personal debt loads, but people need to keep spending…

What? Dont’ they get it, most people are simply MAXED OUT. The party’s over. If people are prudently cutting back on spending it’s because they’re trying to pay down debt.

Thank God many of us are already out of that burden, and yes, we are waiting for prices to go down. Will it spur on deflation? Of course. This is happening because we have an unsustainable economic model, and unrestrained capitalism is the real cause of the misery.

#50 vtj on 11.25.08 at 3:05 pm

#36 PBrasseur:

Sadly, I have to agree with your assessment of Montreal’s lamentable state. Regarding your 35min commute downtown, you’re obviously not driving during typical rush hours (7AM-9AM or 4PM -6PM). In my experience, it takes at least 1 hour during afternoon rush hour, and that’s if there aren’t any accidents along the way. The situation could be so much better if the public’s interests were placed ahead of the much too powerful unions. Cold day in hell before that happens though.

#39 Patrice:

Enjoyed your your post. It’s impossible to accurately predict what our collective fate will be in the future but I think there’s merit to what you laid out as some possible outcomes. We’ll certainly have to go through some painful readjustments for past excesses. Whether these readjustments occur in the near future or whether they fall in the lap of our children is a question which preoccupies me as I read the many doom & gloom reports that are unfortunately so easily accessible today.

#51 dotava on 11.25.08 at 3:05 pm

#14 anonymous on 11.25.08 at 2:15 am

With your proposal most likely when you get to the hospital you will get nurse having the same attitude “It’s all about the money… not the moral judgement. I don’t care what other people do with their lives”.
Good luck on that one.

#52 dd on 11.25.08 at 3:06 pm

Side note:

Interesting that TD, one of the better bank in Canada, is issuing common stock today. Six months ago at $75 bucks a share there was no issue. Now at $40 they issue stock.

Did TD get caught with their pants down too?

#53 Marlene on 11.25.08 at 3:09 pm

#36 PBrasseur

ditto for Toronto…just as you said it

“losing its middle class while that population is being replaced by poor immigration. Street gangs are a plague. The city is dirty, its infrastructures in ruins and maintenance (and public transport) is in the hands of state monopoly and its goons unions.”

Got out of Toronto as fast as I could!

Did you ever try riding the subway in Toronto? You feel like you’ll catch a disease, end up with an infection. Love the smell of urine on your seat. Can’t sit on the seats. Filthy system that takes forever. Over crowded and expensive without a return to the rider. The ttc is where the next plague will start!!!

#54 PBrasseur on 11.25.08 at 3:27 pm

@ vtj (# 49)

Yes you are right, I leave home at about 6:30 and it takes me 35 min to get to downtown Montreal (when things are normal, no accidents nor snow storm…)

Return takes a bit longer, but still much less time in either directions than when using public transit. And it still would be quicker at more “normal” hours, about 1 hour either way.

Honestly I don’t know anyone that want to leave our area to go back to the city, even when moving from separate house to condo or appartment there are local options. And as you say, in Montreal reforms are not coming anytime soon. By the time it happens that city will be a dump!

#55 charliegosurf on 11.25.08 at 3:34 pm

sometin crazy will happen in this world soon, too many frustrated souls around, tic tic tic, what will it be, tic tic tic,

i can believe how fast everything changed latelly, people are talkin for the end of the world as we know it,

guess what? aannd iii ffffeeell fffiiiinne,

#56 Ottawajen on 11.25.08 at 3:37 pm

I really enjoy this blog. I really do. And I buy into a lot of the fears and believe that people have been money-foolish for far too long. I can be guilty of that. I am sure most of us have purchased something that might be considered frivalous to some. While I enjoy the blog, and take a lot of the comments with a grain of salt, I find the animosity and disdain for people with any “stuff” by many commenters completely disrespectful. There’s a holier than thou attitude and a “I hope you get your yours!” vibe that’s no better than upper class snobbery.

I live in Ottawa. I have a good job and no illusions that it couldn’t end tomorrow. But I gotta live somewhere. I have lived in the ‘burbs. Not because I wanted a 5 bedroom house with granite countertops, but because I couldn’t deal with having to pay $500K – $750K to live in the city and have to park on the street. I chose to live in a suburb 10 minutes from work to save on sitting in traffic congestion in a $200K townhouse instead, so that I wouldn’t have to work only to pay a mortgage but be in walking distance to a coffee shop. Sure, there are some big beautiful homes in the suburbs of Ottawa, but the average 3 bedroom single is still far more affordable than living in the heart of the city. Property taxes are lower as well. And it is still easy to commute.
I currently rent a house further out in the country, because I didn’t want my toddler having to play in traffic if she wanted to run around outside. Plus, I wanted some room to plant a veggie garden and hunt squirrels.

#57 tonguestump on 11.25.08 at 3:40 pm

Garth,
They don’t quite get Garth Suburbistan. I think it’s time to consider emigration. I’m a fellow writer. Unfortunately not as prestigious as you right now. Had to cover the Uncircumsized Club of America’s annual fall picnic a couple weeks ago. I won’t tell you how many cotton balls won the cotton ball stuffing contest. If I don’t spend US dollars right now and buy an over inflated rural property in BC, am I going to witness my pruchasing power acquired from all these sh#t writing gigs vanish or a bank nationalization (Citi 306B) and potential imposed capital controls enslave me? Give me your best call on this one.

#58 Norval on 11.25.08 at 3:42 pm

# 14 Anonymous

#59 Norval on 11.25.08 at 3:46 pm

# 14 Anonymous Welcome to the club.Excellent post, as we are all accountable for our own actions. Cats…

#60 Mark on 11.25.08 at 4:03 pm

Calgarians,
What does everyone think the average and median house price “should” be for the average and median income in the area? I am unsure what the average and median household incomes are in Calgary. 70k/year average?

Here is a house going for 285k (down from 299k a few months ago):
http://www.realtor.ca/propertyDetails.aspx?propertyId=7519948

The house was assessed at 339k in 2007:
http://dmzwww2.gov.calgary.ab.ca/fairshare/script/asmt_PropertyDetails.asp

I see the assessed values as being at the peak of the bubble and often check their assessed values to get an idea of where the price could be in a year or two (minus 40%?).

I just do not see houses assessed at 300k in 2007 going for more like 180k over the next 2 years. I have some co-workers telling me that the demand for housing in Calgary will likely return with the influx of job seeking people from Ontario and other provinces during the course of the economic recession. They assume Calgary and area will fair far better then anywhere in the country. I keep watching the barrel of oil tank…

I am renting and saving. I have been approved for a mortgage of 300k in the past but declined in shear terror when i worked the numbers and decided i would be comfortable with 180k maximum over 20 years (50k down). Moreover, i felt like i was being cheap at the time and was ridiculed by friends and realtors. I guess i did the right thing!!!

Thanks for the great blog Garth.

Mark

#61 Darryl on 11.25.08 at 4:09 pm

dd
Whats it matter? As long as we give them a 75 billion dollar barrel to wear :)

#62 patriotz on 11.25.08 at 4:21 pm

Just to play devil’s advocate: I’d say most people move to the suburbs to avoid the “charms” of the inner city: homeless people (etc)

Than how come the same sized house on the same sized lot is way more expensive in the inner city than in the suburbs? If people are willing to pay more for the same house in the inner city that means they would rather live in the inner city. Right?

People move to the suburbs because the houses are cheaper.

BTW, if you think the problems you’ve noted are exclusive to the inner cities, visit Surrey, BC some time.

#63 rant in Calgary on 11.25.08 at 4:53 pm

Whew…. The Bank of Montreal made an obscene amount of money.

I feel manipulated!

#64 Calgary Rip off on 11.25.08 at 5:12 pm

Mark:

What should the median be for Calgary? Not what its at now.

How about $120K? That’s unlikely to happen and unlikely to be pre 2004 boom levels.

Truely amazing how the slant in Calgary is most people want housing costs to be out of reach for people who are or want to move here. Its a no brainer that anyone who has half a brain wont move here due to the housing and cost of everything that is outrageous.

Be informed that many realtors are saying to look for the foreclosures in 2009. Whether it will get really bad and therefore really good for new buyers in the coming years remains to be seen.

It would be a good thing if the whole thing in Calgary collapses. Get rid of a lot of crime and riff raff. Try oil at $18/barrel, gas at $0.50/liter and cheap food. But unlikely.

#65 TheComingDepression on 11.25.08 at 5:28 pm

Just to give you an example as to what has happened in New Jersey..Read todays headline carefully:
State of New Jersey Is Insolvent ( Bankrupt might be a better word). New Jersey is $60 billion in the hole.
Now should they be giving GM 25 billion, or save a state with a pop. of 9 million needing 60 billion ? Most states are insolvent by the way. Coming to a province near you..

#66 buy gold on 11.25.08 at 5:35 pm

Garth, I can tell you right now most people move to the burbs becasue its cheaper not to get away from homeless people… i know becasue i was one of them and i have friends who bought because the houses where cheaper.

#67 anon on 11.25.08 at 6:01 pm

Looks like Canadian interest in real estate is about half of what it was just six months ago.

http://www.alexa.com/data/details/traffic_details/mls.ca

#68 Kestral on 11.25.08 at 6:15 pm

To #59 Mark:

That 285K house at 725 square feet is almost $400/sq ft.

$400/sq ft is ridiculous in Toronto, which means its completely insane in crappy Calgary. Keep on waiting, that house needs to fall at least 50% before it’s even a consideration.

#69 Future Expatriate on 11.25.08 at 6:26 pm

Re: #61: I recently visited Surrey BC, Patriotz, where you can buy a very nice trailer for one-third the cost of an identical one on Vancouver Island… what did I miss? Saw a lot of older men in turbans walking around, so walking a lot MUST be safe. Place looked far nicer and far better kept than New Delhi or Bombay and many suburban foreclosed neighborhoods in Las Vegas, I must say.

What did I miss?

#70 Zoronqueen on 11.25.08 at 6:34 pm

Calagary rip off:

thanks for the money masters video link:
did you see this:
The Alex Jones Show 2008-10-17 PP-Tv

http://www.youtube.com/watch?v=Z6NpxvJ6JPQ

http://www.youtube.com/watch?v=ACn-aHd7ysY

http://www.youtube.com/watch?v=3TJs0HwlYSk

http://www.youtube.com/watch?v=nJPYA2UZavE

http://www.youtube.com/watch?v=L6mqkCQrXjQ

http://www.youtube.com/watch?v=c7Nw3uVq8GY

talks about how housing market will worsen….

#71 Mike B formerly just Mike on 11.25.08 at 6:38 pm

Re POL CAN 27…. Yes you are so correct.. madness. These guys are handing Obama an active hand grenade and know it will blow up in his face no matter what he does. I do believe Schiller and Peter Schiff as well as Toronto’s Ross Healey from Strategic Analysis,.. we are in way too much debt and this cannot be all washed away or we become a Zimbabwe economy and just operate as a debtor society forever. Some legacy we are leaving our children. This is entirely unrecoverable in my opinion.
Real Estate news… few new listings in T.O. as the holiday season is upon us. Those who want to sell but don’t need to are resorting to leasing their monster homes just to cover their costs. I see it everywhere I turn as the mega houses at over a million just aren’t selling unless they are in the super high end areas like Rosedale, Forest Hill and Post Road. Just go to MLS and see the sea of houses for sale over a million… just not enough millionaires out there.

#72 dd on 11.25.08 at 6:38 pm

#45 TheVancouverDope,

The current price of oil has nothing to do with the long term fundamentals.

Take real estate for example. Are current prices a reflection of what you think the house is really worth?

#73 dd on 11.25.08 at 6:40 pm

#60 Darryl,

What is the matter? The cracks keep appearing like a US style melt down.

#74 DalE on 11.25.08 at 6:45 pm

This might have been posted but here is a reposting just incase you missed it. The greater fool past present and future? http://www.youtube.com/watch?v=bNmcf4Y3lGM

It’s this blog’s official vid. — Garth

#75 dd on 11.25.08 at 6:47 pm

#63 Calgary Rip off,

Unlikely because you are not grounded in fact.

If houses are $120K then total household salaries will come down to $45 to 50K annually based on long-term trends.

Oil is too valuable at $18.00 a barrel. At this price it encourages consumption and zero conservation. Enjoy the cheap oil today.

#76 Just a Girl on 11.25.08 at 6:51 pm

#55 Ottawajen – thank you for a voice of reason. It’s hard to have a reasoned conversation when emotion/opinions dominate (on both ends of the spectrum).

But, that is also the beauty of a blog. Bringing together many perspectives.

Most people move to the ‘burbs because it’s cheaper, perceived as safer for raising families, and the quality of life (for after work hours) seems enhanced. And, Canadians tend to have a really big personal space bubble, no?

#77 GenXer on 11.25.08 at 7:01 pm

A note on assembly-line housing – the ability to manufacture homes indoors has been a huge boon to the construction industry. This process offers much more efficient use of materials and time.

Calling old pine floor joists better is not truthful. Modern construction methods offer straighter lumber, straighter walls and tighter floors. It is also much more environmentally.

#78 Just a Girl on 11.25.08 at 7:06 pm

#13 dave in calgary wrote: “I currently work for an EPC (we design new oil and gas plants) and the word on the street is the those guys in the big glass buildings downtown are going to use 2009 to choke the industry until prices come a way down… and it’s a coordinated strategy.”

Dave, I am genuinely curious, which guys in the big glass buildings? (real estate, oil and gas?) How will they “use 2009” to choke the industry? Please elaborate!

#79 Colin on 11.25.08 at 7:23 pm

To discuss our current troubles without realizing that the fantasy of the “free market” only applies to us little folk and not to the big boys is to miss the point entirely.

To see/hear George W. Bush telling the world that the current situation is not due to a failure in “free markets” is hopefully a good portent that the opposite is true.

That, and the massive, tax payer funded bailouts for these “market driven” corporations, which are doomed to fail at OUR expense. (My “Garth moment.”)

Real estate’s demise is merely one aspect of the collapsing web of ludicrous economic hocus-pocus based on infinite growth, endless exploitation and concentration of ownership in the hands of the few.

And, hey Georgie, where’s your fiddle, ’cause Rome is certainly burning!

#80 POL-CAN on 11.25.08 at 7:32 pm

# 70 Mike B

It is nice to want “change”. I want it too….

However, I do not see it from the Obama regime… It will simply be a continuation of what is happening right now…. They have to try and reflate the system…. Too much is at stake for TPTB….

Nothing is moving in Toronto….. We keep watching and waiting….. An open house here and there but that is about it…. The new listings are still too expensive in this falling market…. Few more months should do it….

#81 dd on 11.25.08 at 7:34 pm

#45 TheVancouverDope

“I’ve read there is more oil in reserves globally now, 1.5 trillion barrels, than five years ago.”

How many days of oil supply is this for the total world?

1,500,000,000,000 barrels more in reserve

div by

85,000,000 barrels consumption a day x 365 (days in year)

= 48 days.

#82 Bottoms_Up on 11.25.08 at 7:39 pm

#55 Ottawajen on 11.25.08 at 3:37 pm
—————————————–
Good post. I think we should also remind people that:

1) The media/advertising (and capitalism) is largely to blame for today’s consumption (i.e. ‘you just can’t go without granite countertops–buy them now’ or ‘you better buy that house with zero down and 40yr amortization before the Oct.15th deadline or else you’ll miss out’). Imagine if every 10 minutes for 30 seconds there was a commerical saying “be frugal. don’t spend. save for a rainy day. you don’t need those new shoes. pay cash for your items. volunteer. do something nice every day for someone. ” Our society would be a totally different place.

2) We are all in this together. If our neighbours are in the ‘house of pain’, guess what? Civilization as we know it could very well collapse. We should be rooting for each other and pulling together, not rooting for people’s downfall.

If people have ‘stuff’, then good for them. Every single one of us has more ‘stuff’ than people of 100 years ago. How about that bathroom you have inside your house? Guess you consumed just a little too much, shoulda stuck with that ole’ outhouse, hahahaha, you deserve what is coming to you!!!!!! *sarcasm intended*

Sometimes society makes progress and people accept that. It’s not a bad thing. If you believe it is then go live with the Menonites.

#83 dd on 11.25.08 at 7:53 pm

#45 TheVancouverDope

“I’ve read there is more oil in reserves globally now, 1.5 trillion barrels, than five years ago.”

How many days of oil supply is this for the total world?

1,500,000,000,000 barrels more in reserve

div by

85,000,000 barrels consumption a day x 365 (days in year)

= 48 years.

I wonder if this will be economic at $50 barrel?

#84 TheComingDepression on 11.25.08 at 8:10 pm

You may want to listen to Peter Schiff on where the price of OIL is going..as well as GOLD. (He just got kicked off CNN when he tried to speak the truth about the FEDERAL RESERVE)
Click the “name” to hear the 2 part video (5 min) VERY IMPORTANT INFO

#85 A big if... on 11.25.08 at 8:23 pm

What if green technology saves the burbs?

You know homes coming with wind turbines, solar panels that sort of thing. You come home in your volt car and plug it in your green techno combo thingy and carry on happy burbing as usual.

Should I dream on..?

#86 lgre on 11.25.08 at 8:37 pm

‘Calling old pine floor joists better is not truthful. Modern construction methods offer straighter lumber, straighter walls and tighter floors. It is also much more environmentally’

it’s pretty obvious from this statement that you never owned a new home constructed in the last 3 years. Owning one myself in the the town and the builder that Garth is talking about, I concur that Garth is right on the dot. The new homes are hidious, the material used is very poor. Go find a TH or semi and live there for a month and then tell me how you like hearing your neighbour flush his toilets. These problems didnt exists on homes that where built in the 80’s, and yes I have lived in them.

#87 Garth's FOLLOWER on 11.25.08 at 8:46 pm

To #45 TheVancouverDope

Thank you for the electric car website.

I’ve always wanted one.

Too bad they are only offering to residents of California.

Dear Garth,

My house have been on the market for almost two months, reduced to 410K from 440K in the beginning of October and so far no luck. As I said before, I wish I had known you earlier:( and I would have sold it last spring.

Anyway, a family came and look at my place last night and she didn’t want it because I didn’t have “stainless steel appliances, china cabinet and sky light in the kitchen” which the other house had!

#88 MichaelInVancouver on 11.25.08 at 8:54 pm

The overdubbing in the blog’s official video is incorrect. the accurate translation can be found here:

http://www.youtube.com/watch?v=F9nrANs5Tr4

Enjoy!

#89 Republic of Western Canada on 11.25.08 at 9:43 pm

Wow! Lookit all the *swimming pools* down there in the east. Lotsa really, really rich landowners there, it’s obvious. Sure is clear that all those cnb’s aren’t going to get their hands on any [more] transfer payments, no matter what their politicos start whining about…

We’re filling them with oil. Cheaper than water. He, he. — Garth

#90 islander on 11.25.08 at 9:53 pm

Calgary Rip-Off, you need to check yourself. Marty and Mario don’t control the price of houses in Calgary. But go ahead and call the Herald. When crazies like you would phone, we’d tell everybody about the wacky call we just took, then anxiously await the next time you’d call. We’d LOOK FORWARD to it. Because crazy people are amusing.

Then write a letter to the editor. I’d post the craziest ones on my cubicle wall so I could enjoy them over and over and over again.

As for Anonynouse #14 who doesn’t care how others live but manages to classify all of humanity into two groups: consumers and conspiracy theorists. Welcome to the Club of Smug. Population: You.

When Obama inevitably fails to save the world, the $7.7 TRILLION bailout doesn’t work, the digitized money in your account says you have “money” but it doesn’t purchase anything in the real world because fiat currencies have been hyper-inflated, good luck with all that bold risk-taking you’re going to do. By the way, that light you see at the end of the tunnel is the train.

#91 Garth's FOLLOWER on 11.25.08 at 10:14 pm

I mean “a family came and look at my place last night and THEY didn’t want it because……

#92 APCM on 11.25.08 at 10:29 pm

#40 Bottoms_Up

What kind of condo were you living in?
And last I checked from over here in downtown Toronto Hamilton was a suburb.
I live in a great little place in the downtown core. My parking spot is 50 feet from the elevator, I’ve never heard my neighbours above or below me, my washer/dryer is ensuite and we have common exercise room (always updated), concierge and outdoor pool. I can walk to five grocery stores with my little granny cart, walk to the Eaton Centre in 20 mins, ROM, public libraries (2 of them), etc. The whole time gas was expensive I walked to work and my husband TTC’d it.
But it’s what we personally like, it’s not for everyone.

#93 CalgaryRocks on 11.25.08 at 10:44 pm

Than how come the same sized house on the same sized lot is way more expensive in the inner city than in the suburbs? If people are willing to pay more for the same house in the inner city that means they would rather live in the inner city. Right?
=================================

It beats the hell out of me. When I was a kid, the inner city is where drug dealers and prostitutes lived. This is still what comes to mind when I hear the expression ‘inner city’.

I guess the new generation of home buyers don’t mind putting up with a couple of undesirables as long as they can walk to their Starbucks to surf the internet on their wireless MacBook while sipping on their grande, venti crapuccino.

Actually they’re building condos right next to the homeless shelter. I guess the developer knows something I don’t because I personally pickup speed when I jog in that area. Some people must love the smell of urine in the morning.

#94 Republic of Western Canada on 11.25.08 at 10:55 pm

#77 Just a Girl on 11.25.08 at 7:06 pm

#13 dave in calgary wrote: “I currently work for an EPC (we design new oil and gas plants) and the word on the street is the those guys in the big glass buildings downtown are going to use 2009 to choke the industry until prices come a way down… and it’s a coordinated strategy.”

Dave, I am genuinely curious, which guys in the big glass buildings? (real estate, oil and gas?) How will they “use 2009″ to choke the industry? Please elaborate!
————————————————————

What he’s alluding to dear in his bumbling, oafish, and pedestrian way (Hi Garth!) is that he believes owner/operators will insist upon lower engineering and/or construction rates for project work in the coming year.

However, it would hardly be ‘coordinated’; it doesn’t need to be. There’s this thing called market force that sometimes works kinda well so you don’t need a collective Politburo (like Ottawa government) to set prices.

But, what’s really hilarious is that he apparently jumped ship from a producing company (i.e. which probably has an active cash flow from established operations at any foreseeable hydrocarbon price) to an EPC project company. This, at a time when new mega-projects like ‘refineries’ need huge financing and high product pricing to make them viable at all.

Equally hilarious is all that oil which is reportedly being stored right now in Toronto swimming pools will be subject to permanent price deflation in the indefinite future (rather like the chipboard mansions which surround them). Which is why it’s being stored there now in order to bleed off value in storage for the next decade… um.. right, Garth?

Or maybe not? What’s that? Because you can always build more houses, but no new oil is being created and all the easy stuff is gone, you say?

Interesting concept, depletion.

#95 run4dahills on 11.25.08 at 11:53 pm

Aug. 14, 2004

Somewhere in Caledon, On (80 min. car commute from down town T.o.)

I made it to our gate, then rolled through the forest down the driveway towards the river, and heard the roar of the generator.

That must be a whopper of a house!

#96 run4dahills on 11.25.08 at 11:53 pm

sorry 2003

#97 run4dahills on 11.25.08 at 11:58 pm

80 km

#98 Rick on 11.26.08 at 12:05 am

#93 Republic of Western Canada
==========
Hey, do us all a favour and start breaking your pills in half.

#99 dave in calagry on 11.26.08 at 12:20 am

# 77

What I mean is that the big oil and gas companies, even with approved budgets for 2009, are pulling all the projects (or drastically reducing how much money they are going spend) effectively removing all the work from the pipeline for 2008. This will bring rates down from engineering to equipment suppliers to general and sub-contractors.

It is coordinated, as companies with dollars to spend in 2009 (not just the Jrs who are suddenly broke) will not as they can drive the price down.

#93… You’re calling me an oaf and you didn’t even read my post. Probably wanted to get back to the barn and clean your gun. Fair enough.

I CURRENTLY work for and EPC and found a job OUTSIDE of the oil and gas sector for the start of 2009.

Bumbling I will agree to, I had had a few cold ones before posting, but it’s not as strong as “defend the west” juice you’ve been drinking.

#100 dave in calagry on 11.26.08 at 12:23 am

Correction, removing all the money from the pipeline for 2009, not 2008.

#101 patriotz on 11.26.08 at 2:35 am

: I recently visited Surrey BC, Patriotz,

What did I miss?

Whalley.

#102 JoJo on 11.26.08 at 3:30 am

Defflation!
Look at the chart how looks like US defflation!
Just for the last 2 weeks,it’s 50% more money suply.
But the other currencies , Gold and Oil down?Unbelievable!
Why,because of treat from US if you want your money than you’ll get 90% less or even nothing I’ll declare bancrupcy. For example European Union had to put 2,5 trillions Euros in US T-bonds,plus Asian countries,Arabs and others just to hold $ US high or if they wants Euros,Yuans,and other currencies back than $ US will fall 90% and they will get 10 euro cents on 1 $.
All Europe cried when was 1.61 $ US= 1 Euro,because they produced BMW and many products and than every day get back less Euros. What happen with world economy now? Every country is in prison with their money and investments in US and they must lending at least $ 3 billions every day to keep up US economy plus for their defficit must buy T-bonds because if $ US fall than all those countries will lose all money.
SO WHAT USA GOVERMENT DOING FOR THANKS OF THIS SUPPORT AND ALL INVESTITORS IN THE WORLD?
Now the US goverment printing more money than ever. Till when?

http://www.321gold.com/editorials/nova/nova112508.html

#103 POL-CAN on 11.26.08 at 10:42 am

A must listen interview with Jim Rogers on Bloomberg

http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vJzshG4o708g.asf

It is 40 minutes long but very worth listening to…..

#104 Nicholas P on 11.26.08 at 10:56 am

C’mon Garth… Peak oil?

“3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana’s Bakken Formation—25 Times More Than 1995 Estimate”. U.S. Geological Survey

Read entire article here:

http://www.usgs.gov/newsroom/article.asp?ID=1911

#105 Calgary Rip off on 11.26.08 at 10:59 am

What is really crazy is all those people in Calgary that think houses and salaries are somehow tied together and that homes should be worth $400K. How insane are you? Just because oil is worth so much now the housing goes up?

Look at the facts: The TSX and NYSE and oil prices have no foundation in reality. Things are NOT priced according to what they are worth. So if houses were only $100K in Calgary no one would buy them because now they arent worth much? That’s insane.

What’s really insane and assinine are all the realtors and sellers who actually believe anyone in their right mind would pay for those shacks. Have you seen the amount of space in between homes in Calgary? It looks like Brooklyn, New York!!!!

What to do? Influence the media. Tell Mario T. and Marty Hope that their forecasting and trendsetting and articles are way off base from reality. Marty wrote that people(immigrants) find Calgary attractive. Marty needs enlightenment. Most Canadians will not move to Calgary because it is so EXPENSIVE. They arent stupid. So as far as attracting sellers, it wont be happening.

Vancouver Island is a different matter entirely. People who move there are generally tightwads and retired. So what you have there are potsmokers, artists, retirees, outlaw motorcycle gangs, students, and mill workers. Not exactly paradise. Nevertheless, there are many deluded realtors there as well as in Calgary that think a house in Victoria is worth $500K. That’s laughable. That’s like selling your soul to the Devil for temporary pleasure when you could get eternal life by waiting. But, its just my opinion.

#106 Dave on 11.26.08 at 11:09 am

One common thread I have observed regarding the “housing crisis” is that it was mainly due American greed and over consumption that the world’s economy is imploding.

I have lived and worked in Missouri, Wyoming and California and one thing I noticed was that Americans were not as obsessed with owning the newest electronic gadget or driving the latest or biggest SUV.

Most people were content with 5 year old vehicles and 1200 square foot houses. If you want to see rampant consumerism go to Calgary. I have never seen so many people embrace long term debt so willingly.

If people start to default on their mortgages, and I believe they will, what will the banks do? I suspect we will see some sort of moratorium on foreclosures like the Democrats in the US are considering. We have already dumped 75 billion of our tax dollars into our Ponzi…oops I meant Bank system and nothing has really happened yet.

If it really was a free market financial system we would have let the banks take the hit for their risk. Banks taking the profit and the taxpayer taking the risk seems pretty sick to me!

#107 exchecker on 11.26.08 at 12:47 pm

#14 anonymous on 11.25.08 at 2:15 am

“It’s all about the money… not the moral judgement. I don’t care what other people do with their lives.”

This is a very sociopathic statement. It speaks to what’s wrong with our society. There really are many out there who just don’t give a damn about anyone other than themselves and their family. This also hints at why we are where we are in this economic cycle: think Wall Street greed, etc.

#108 Cara on 11.26.08 at 1:48 pm

The 75 Billion that the gov’t has put into the banking system it was ALREADY on the hook for via the CMHC. Those loans were already guaranteed. The only way that the gov’t would be losing 75 billion is if half, or more, of those loans were defaulted on by the homeowners. Now, I’m sorry to bring some sunshine to this rainy parade, but that is just NOT going to happen.

There may be SOME who have overextended themselves, and according to this blog that would be the entire population of evil Calgarians, but not nearly enough to cost the government that money they invested.

They own 75 Billion worth of mortgages, which are considered assets if they were given to qualified borrowers. WHICH THE MAJORITY OF LOANS MADE BY CANADIAN BANKS ARE. This is NOT the USA, and we do NOT have to see the levels of depreciation that they have seen there. Totally different lending system.

Do yourself a favour everyone, read some OTHER informed opinions on this stuff and come and take what is written here with a bit of informed grains of salt.

Sheesh.

Hate to break it to you, bot those are high-ratio mortgages, including zero-down and 40-year amortizations – given to the very folks who could soon be nebbies (negative equity ‘owners’). The fact remains, $75 billion has gone in cash to the banks in exchange for paper, for which they are truly grateful and relieved. And this after we were told the banks were cool. Guess not. — Garth

#109 Future Expatriate on 11.26.08 at 3:58 pm

Thank Patriotz… I DID miss it, I was further south.

#110 POL-CAN on 11.26.08 at 6:28 pm

ouch….

From Mish:

http://globaleconomicanalysis.blogspot.com/2008/11/case-shiller-and-car-analysis-november.html

Median nominal prices in CA are now down 47% according to CAR and 42% according to DQNews – and those declines are in less than 18 months!

http://3.bp.blogspot.com/_nSTO-vZpSgc/SS2hw8Rk2WI/AAAAAAAAD2k/4t6v-DUmaeo/s1600-h/CAR-%25decline-2008-10.png

#111 Dave on 11.26.08 at 7:55 pm

# 106 Cara,

Tell me why we gave the banks 75 billion dollars if the loans were so good! CMHC charges a percentage to cover defaulting loans. Are you saying they don’t have enough money in there?

Don’t spout nonsense about a credit freeze or an illiquid banking system. I have had more credit card offers and LOC offers in the last 6 months than I have seen in thirty years.

#112 Patrice on 11.27.08 at 6:39 pm

#107 exchecker

>>>This is a very sociopathic statement. It speaks to what’s wrong with our society. There really are many out there who just don’t give a damn about anyone other than themselves and their family. This also hints at why we are where we are in this economic cycle:
think Wall Street greed, etc.

actually i believe the way YOU think and people who think the way you do is partly to blame for the situation we are in.

It would be in your best interest to stop idealising the human specie.
Human are the way they are. Human are selfish and greedy.
When you assume otherwise, and try to force people to be different than they really are, it is then that you take bad decisions.
Such as the government trying to regulate and control the markets, or redistribute money.

This is also why communism doesn’t work.

Communism is wounderful ideal of an equal society. It is truly a wonderful idea.
The only problem is that communism assume that humans are not greedy, that humans are only displaying greedy and selfish behavior because they live in a capitalist society.
But in all of the communism society, greed have created much corruption.

The human specie is greedy. Greed is the only reason we do not live in caves anymore.

Greed is one of the most fundamental characteristic of the human race.

Stop fighting it, accept it, and embrace it.

It’s like refusing to believe that dogs doesn’t walk on two feet. You can always try to force him to walk on two feets, but the dog will never be himself.
Only when you accept the dog to be the way he is, walking on four feets, that you can stop getting angry at him for not walking on two feet and you can truly appreciate him.

Free market is the closest system we got to deal with the way the human specy really is.

ps: i need some structure in this post but if you try hard enough, you’ll see that it make sence :)

#113 exchecker on 11.28.08 at 2:48 pm

#112 Patrice on 11.27.08 at 6:39 pm

Yeah, I do see what you are saying. However, there are different levels of greed. All dogs walk on 4 legs, there are no dogs who walk on 2 legs. But not all humans have the same amount of greed. 100% greed equates to the statement made by #14 Anonymous.

The rest of us don’t run on 100% greed.

The statement “It’s all about the money… not the moral judgement” is sociopathic: if all you care about is the money, then this is a problem for society.

#114 Bottoms_Up on 11.30.08 at 12:03 pm

“The human specie is greedy. Greed is the only reason we do not live in caves anymore.

Greed is one of the most fundamental characteristic of the human race.”
—————————————————-
I’m sorry you feel this way, but I will give you a couple of examples that show not everyone is greedy.

1) Native North Americans chose to live in harmony with their environment

2) The kingdom of Bhutan measures ‘Gross National Happiness’

3) The Gates foundation

4) Any charity/non profit organisation

many other examples.

#115 Patrice on 12.01.08 at 1:07 pm

obviously, i never said every single individuals on the planet earth is a selfish monster driven exclusively by greed.
And obviously everyone have different level of greed.

why would you even consider theses to be any kind of indication that i might be wrong is something very indicative of your capability to reason in a logical way.

We do not live in a world of sharing and compassion with a few exeptions of greed and selfishness.
We live in a world of greed and sefishness with a few exeptions of sharing and compassion.

This is not about feelings, or beliefs, this is not a religion. It’s about facts and reason.
Closing the blinds in your houses and pretending the sun isn’t up on a sunny day doesn’t make the sun disappear.

#116 exchecker on 12.02.08 at 1:40 pm

Patrice. You like your metaphors.

No, closing the blinds doesn’t make the sun disappear. But the sociopath is still out there bothering the neighbours. He needs to be tagged and released.