Not so much

superman

Ever wonder what political leaders know that you don’t?

Actually, a hell of a lot, which is why they speak in code, hoping you’ll get it. Was there a reason Stephen Harper gave a year-end interview and conceded that a depression was “possible”? Was there a reason Barak Obama delivered a speech on Thursday alluding to “irreversible” consequences if new billions are not thrown at the economy?

You bet. Each government has scads of economists, analysts and forecasters who have been sitting in cubicles for the past few weeks, staring into computer screens and muttering, “holy shit” quietly to themselves. The big picture is worrisome indeed, and while politicians know they must allude to the gravity of it all, they can’t come out and tell you to take cover. After all, when you and I stop consuming, the economy sputters and more people become jobless.

But, trust me, this is not looking too good. Today came a forecast that 200,000 stores in the US will be closing this year, and the ranks of the unemployed will grow by one million every eight weeks. Even Obama has now spoken of a double digit jobless rate. And in the US the official rate is usually half the real rate (those who have given up or are not registered are uncounted), so we are approaching Depression-era numbers.

Today I gave an interview with a BC radio station and was asked this question by an incredulous announcer: Won’t BC housing prices stay higher because of all the Boomers moving here? That’s why this area is immune, right?

Wrong Bucko. That’s why you’re in trouble.

Boomers from Calgary or Toronto can only move to Lotusland or anywhere else when they can sell their houses back in the snow – a situation  now becoming impossible. This is especially true because lots of Boomers have unsalable houses – big suburban suckers with energy-snorfling pools, double car garages, enough bedrooms for a circus and Scarlet O’Hara staircases. So, with their wealth locked into their cul-de-sac traps, they’re not going anywhere.

And just look at what’s happened to US retirement destinations like southern California, Phoenix or Miami, where nuclear winter has descended on the housing market after prices raced unsustainably higher. And this all bodes badly for the overpriced left coast of our confused land.

Some evidence this week supports that. Over 850 houses for sale in Nanaimo, and just 60 changed hands. Of 237 condos on the market in Comox Valley, only one sold – after 254 days on the market. In Parksville/Qualicum 240 single family homes for sale and just 4 buyers. And in Victoria, sales were down by a third for 2008, with a freefall in the final months taking the average price from over $625,000 to less than $550,000. Yeah, still overpriced.

This will continue, despite the best efforts of real estate pumpers, bank economists and reporters named Polyanna to make it otherwise. Soon you will be told that Superman Obama will fix it. Then Harper will fix it. That Canada is not America. That things’ll turn around in 100 days. That all we have to fear is fear itself.

And, yes it’ll get better. But not this year.

That means there’s a long list of things you should do. We’ll cover some of those in the next few days.

xurbia-banner1

My new book, “After the Crash”, arrived in the publisher’s warehouse outside Toronto Thursday, and I have a few boxes on the way to me Friday, which I am offering here to anyone who wants to buy an advance copy. My sincere hope is that “After the Crash” will help a lot of people understand where we’re at right now, and offer them a whack of strategies for not only coping with our new reality, but prospering through it. And, yes, I will personally sign each copy – guaranteeing legendary heirloom status.

atc-cover-small

To order, please go here, which is my new web site dedicated to assisting people in regaining control over their ives, xurbia. Just click on “Shop” on the navigation bar and complete the process. — Garth

71 comments ↓

#1 Jonathan on 01.08.09 at 8:58 pm

Where did you get the stat for Qualicum Beach?

Here. — Garth

#2 Investx on 01.08.09 at 9:11 pm

Garth, take it easy. The realtors reading your blog might have to go on suicide watch with that post.

Keep it up. :-)

#3 real estate expert on 01.08.09 at 9:24 pm

Scientifically proven reasons why Vancouver will retain it’s value better than any North American city.

1/
The Chinese and Iranian population will never reduce their property prices…it’s not in their culture to do so…instead they will simply fill their homes with more and more relatives.

2/
Vancouver “proper” is populated by only @ 800K people…much much smaller compared to other world class cities like Toronto, 3 million…New York, 12 million…Tokyo, 20 million etc etc.

3/
Vancouver’s Marine Bldg and New York’s Chrysler Bldg. are sister Bldgs and the only true examples of Art Deco Architecture in North America….and wrong, the Empire State Bldg is Art Moderne.

4/
Many Left Coast “Film Industry” Californians already have second homes in Vancouver and it may just be a short time from now when California goes bankrupt and these Americans will simply move here permanently…besides, the lighting for filmaking is the best in Vancouver than anywhere else in North America…honest injun

5/
and finally…what other city in the world can boast three separate ski mountains overlooking their city?

So, it is just a matter of time when Vancouver becomes the Financial, Trade and Lifestyle Capitol of North America.

You heard it here first

#4 lotusland? on 01.08.09 at 9:37 pm

Garth

I don’t pretend to understand economics well enough to have an intelligent debate on the subject, but based on what I have heard on the website and other sources, I would like to give you some assumptions, ask you to comment on whether I have interpreted what is possible if not probable, then comment on whether my resultng strategy makes sense :

1. Deflation
2. Stagflation
3. Hyperinflation
4. Double digit interest rates
5. Hopefully, recovery

Make sense?

I am on the sidelines, out of the markets, both housing and stocks.

Strategy :

1. Keep my money on thesidelines (rent and not buy stocks)
2. Save every penny I can
3. Wait for clear indicators of the recovery before moving into either market

Q: if, my assumptions are correct, am I better of in a savings account during the high interest rate period or buying property before that period and locking in lower rates? My concern of course is, the high interest rates cause a second drop in housing prices like in the early eighties.

Placing the order for the book tonight, thanks for your ongoing insight, we all appreciate it ( well at least most of us)

#5 poorguy on 01.08.09 at 10:12 pm

No December number for GTA yet? Must be very bad :)

#6 Jon B on 01.08.09 at 10:26 pm

I submitted a comment yesterday about that fact that I had not ordered your new book. My comment was half joking about the content of your blog offering so much content that is likely in the book, so why buy the book. Sorry to have upset you. You decided not to post the comment. For me, this raises a serious concern about your intentions. While I very much enjoy your blog and generally always agree with your points of view, I’m disappointed that a comment you regard as bad for sales of your book isn’t included. I hope the many months of well written entries isn’t strictly one long commercial for the sale of your book. It’s a credibility issue in my view.

I did not post your comment because this blog is about the economy, real estate and the future, not me. Buy my book, or don’t buy – your choice. Enjoy my work on this blog or wander off into the world – your choice. If you think I am going to spnd my days giving you free advice and then take a hit for writing a book and selling it, you are the greatest fool. — Garth

#7 kitchener1 on 01.08.09 at 10:33 pm

#3 Realturd expert

Your selling to the wrong crowd. Van city is finished. The boomers in brought into the whole RE paradim hook line and sinker. The put their remaining assets into the stock market, probley some blue chip mutal fund that is invested into the stock market. Double whammy for these folks. They are finished–wiped out

Rich immigrants will not save VAN. That city does not have enough “old money” to sustain the boom. As much as you and everyone else in Canada hates it, the GTA will always be the engine that drives the ecomomy. Along with Quebec a close second then Alberta

#8 Kanata on 01.08.09 at 10:41 pm

“big suburban suckers with energy-snorfling pools, double car garages, enough bedrooms for a circus and Scarlet O’Hara staircases. So, with their wealth locked into their cul-de-sac traps, they’re not going anywhere.”

Hey … that sounds like my house!!! I concur in 18 years there has been only 5 sales on the street – people don’t want to move. Especially in BC.

Good think I’m not thinking to sell for 20 years and no one will build in the parklands around our street … lots of squirels and cords of woods (and small farm land if anarachy take hold of our society and I just claim the forest).

Aside from this Ottawa is fairly stabable so far with little listings and 3 of 4 homes what went on sales in my area sold in 1-2 months.

I lived in Vancouver a long time, had a home … they can keep their stuco and wood homes and dirty and crime infested neighborhoods with growups … I wouldn’t see the attraction for boomers to leave this wonderful x-ski and snow shoe land for starbucks and 450 square feet homes with too much rain … all the time.

Ottawa is where to live with its graceful winters and hot/humid summers where you can go for dips in the pool.

With this in mind, I’ve ordered After The Crash and will prepare for the worst …. Garth, I love your solar panel solution and although my wife thinks I’m crazy (as she says you are) I got her to agree solar energy is good and might be able to fund this project this year.

I might hide a couple of those food packs away from her … just in case …

#9 real estate expert on 01.08.09 at 10:41 pm

#4 Lotusland

You are thinking to…

1. Keep my money on thesidelines (rent and not buy stocks)
2. Save every penny I can
3. Wait for clear indicators of the recovery before moving into either market.

…Your Best Strategy would be to send me your money,

c/o
Real Estate Expert Investment Funds LLC
Zurich, Switzerland

I will guarantee you a 15% yearly return, tax free.

…kidding of course…your strategy is excellent.

#10 Investx on 01.08.09 at 10:56 pm

Garth, are you against buying a house in this downturn for rental income?

Depends on the return on investment, doesn’t it? — Garth

#11 George on 01.08.09 at 10:59 pm

#3 Real Estate Expert,
You’re like the Holy Grail Just A Flesh Wound Dude here but I have to admit I’m building a closeted appreciation for the points that you make. I’m living in SoCal looking at farm property in Nelson but you’re selling. Kudos! Thanks Garth for keeping his plug in. “The bee goes to different flowers to gather the nectar” – Zen

#12 Books buyer on 01.08.09 at 11:23 pm

Dear Garth,
I have just placed an order for both books. Thank you for sharing your years of curiosity&research.
I can see the funny sheep faces staring at the cover, while reading them on subway on my way to work.
Hope to arive soon! Bye, Hail, snow, and fun to all!

#13 Remarkable timing on 01.08.09 at 11:47 pm

Canada’s PM now less gloomy on economic crisis

OTTAWA, Jan 8 (Reuters) – Canadian Prime Minister Stephen Harper was less gloomy about the economy in an interview released on Thursday, saying Canada was in a strong economic position compared with others and should be able to exit the recession relatively quickly.

Full story.

#14 Nanaimo Real Estate on 01.08.09 at 11:48 pm

Garth, just thought I’d correct the stats you’ve listed for Vancouver Island.

The Nanaimo stat of 60 out of 850 is for all properties including houses, townhouses and condos.

The 4 out of 240 stat for Qualicum is for condos/townhouses and the correct stat should be that 14 out of 320 houses sold.

In any case, there is a massive crash going on here. People on the Island are getting places at roughly 10% of the list prices and barely anything is selling.

It is in fact the combination of retirees who can’t sell for various reasons, the financial meltdown, and that the prices are just too damn high.

#15 Future Expatriate on 01.08.09 at 11:51 pm

I have as much a chance at fixing the crisis by doing absolutely nothing as Harper and Obama have by doing anything at all, put together.

Will they make it worse? Of COURSE. That’s what they get paid the big bucks for.

#16 Kilt on 01.08.09 at 11:58 pm

RE numbers for the west – Calgary, Edmonton, Van, are looking downright horrible to start the year. I suspect we will see benchmarks drop about 4% from last month on sales that are down 60%+ YOY.

And the real shocker. I scanned through Greater Van homes in the $1 to $1.1 million range, and half of them don’t look to be worth $800k ($600k?). I was hoping to pick up a house at 2004 or 2005 price ranges. Might do better than that, assuming I keep my job. ;)

Kilt.

#17 CinToronto on 01.09.09 at 12:00 am

Hey Poorguy: I was just going to post something about the delay in the TREB numbers. This is the latest they have ever posted their monthly stats. I’m hoping that, in the best case scenario, they are going to try to bury them in a Friday afternoon press release. But I’ve become so cynical about the real estate industry that I’m worried they are going to announce a new way of measuring housing sales, say by releasing statistics once every 10 years!

#18 midas on 01.09.09 at 12:14 am

THIS COULD NEVER HAPPEN IN NORTH AMERICA NOW, Could it? Garth in the very near future your XURBIA site will be far more relevant than this real estate one. I bet price of cord of wood is already hitting $300 in Europe and I’m sure in -27 C without heat no one gives a darn about the price of houses.

Full Story at http://www.timesonline.co.uk/tol/news/world/europe/article5469834.ece

“Governments across Europe declared states of emergency and ordered factories to close as Russia cut all gas supplies through Ukraine yesterday in their worsening dispute over unpaid bills.

José Manuel Barroso, the European Commission President, accused the two countries of taking the EU’s energy supply “hostage” amid a cold snap across the Continent, and urged them to reopen the pipelines immediately.

Schools and factories were closed and trees were felled to keep home fires burning after Russia turned off the gas taps to more than a dozen countries. It was a clear demonstration of the dependence of the Continent on Russian gas supplies.”

#19 Zoronqueen on 01.09.09 at 12:30 am

From: http://www.edmontonrealestateblog.com/

The increased competition has made it very difficult for many home owners to get their home sold. As you can see from the chart, normally around 70% of the listings will sell, whereas this year only 43% sold….

Garth,
Can’t wait to get your book. We are desperate need to sell our old home. As right now it is rather difficult to rent it out. In Spring with everyone relisted their properties……

#20 Peter on 01.09.09 at 12:32 am

No December number for GTA yet? Must be very bad -poorguy

Weekly Sales Report for Homes and Condos in Toronto and the GTA from TREB Market Watch

December 31 , 2008

Av. Price – $344,050

The average price in December 2007 was $394,931

#21 midas on 01.09.09 at 12:32 am

Just as Russia has flexed her muscles and shown Europe how dependent it is on her for the necessities of life such as natural gas; so too in the near future the world will be held hostage by oil producing nations and it will be 1973 all over again. History does repeat itself! So in my estimation we ought to add a zero to the estimates of $10 oil. Triple digit oil is inevitable and deflation will be a thing of the past by this time next year and it will be 1973 all over again. History does repeat itself, oops I said that already! Pardon me for repeating myself. Double digit inflation comes soon and it will be 1973 all over again. In all likelihood we will have a one term wonder boy that came out of nowhere to become President; anyone remember Jimmy Carter? And it will be 1973 all over again. Yup! the 70’s will repeat before we go even further back to the 30’s and squirrel recipes are once again in vogue. History does repeat itself!

#22 The Tallyman on 01.09.09 at 12:48 am

The man of steel is focused on:
Alternative energy, upgrading govt buildings, investing in education, road work and getting medical data into computers.

Not looking good in Smallville.
That plan of action has got to be making even his closest kool aid drinking buddies scrambling to get a copy of
Garth’s book!

#23 nonplused on 01.09.09 at 12:50 am

At least “real estate expert” will buy your house from you if you need to get out in the Vancouver area. He has scientific reasons like what the Chinese and Iranian population might do. Never mind that as they double bunk they must be reducing demand somewhere else. That’s for thinking people.

Oh and there are lots of cities with world class ski resorts on their door step. I was at one in knee deep powder today! Ever heard of lil’ ol’ Calgary? Louise hosts a world cup event every November. Sunshine used to and probably still could, but the races move to Europe now before their snow pack develops. We also still host the national bobsled, luge, and speedskating teams as well. Maybe Vancouver will muscle some of that business away but we’ve held it since 1988 folks! The ski jumping thing turned out to be a disaster. Why they figured to build a jump perpendicular to chinook alley is anyone’s guess.

If skiing can save real estate, California should do ok. Ever heard of lake Tahoe? Denver should be fine too, more skiing than you can see in a season. Idaho and Utah are meccas for the serious. I’ll add Whitefish and Fernie not because they are on the same scale but because I’ve been there and they are worth the trip if the weather cooperates.

Don’t get me wrong, Whistler-Blackhome is a great resort, like having 1/3 of Banff and Louise and Sunshine all in the same place, but a little rain can ruin it for weeks. In Banff they have solved the half hour commute with buses and it never rains until late May. What’s that? Whistler isn’t open in May? How strange! I remember skiing Sunshine in my shorts in June, but they close it down now before they run out of snow because everyone goes golfing.

As for the shorts thing, it seemed like a good idea at the time, but don’t fall down. And wear sunscreen.

#24 David on 01.09.09 at 1:00 am

In the short space of two months Canada has gone from having strong economic fundamentals to the possibility of an economic depression, at least that is the case, if one has been listening to Stephen Harper.
The D word is frightening and there is a definite hint of desperation when it comes to finding plausible policy solutions to this economic emergency. The last time Canada experienced a depression in the 1930’s the primary economic drivers were agriculture and basic manufacturing. The Canadian economy was not dependent on global capital inflows and our government debt financing was self contained. The value of the Canadian dollar during the 1930’s was not determined by open currency markets. So this time it is different and massive undirected deficit financing might not be the magic elixir. Whatever deficit that is incurred in fixing this economic mess will at some point have to be paid back from future revenues.
The housing sales figures cited are not terribly encouraging and will not be encouraging for a very long time. Families who bought homes at the height of the bubble might be lucky to possibly break even 10 years from now and that is a very big maybe. The Baby Boomers are already in their 50’s and 60’s and the only homes in their future are nursing homes and extended care facilities. It is difficult to envision a younger generation of Canadians wanting to saddle themselves with hundreds of thousands of dollars in mortgage debt for some energy gobbling McMansion with a bridal staircase and granite counter tops.

#25 Toronto Market Watcher on 01.09.09 at 1:19 am

#5 poorguy… an interesting observation indeed??
Based on past experience, our friends at TREB should have released GTA stats for December by now. Perhaps as you suggest the numbers are so bad that it is taking them longer than normal to come up with extraordinary creative spin in these trying times…. before they issue a press release. Just my opinion, but if they’re struggling on putting a positive spin on current central Toronto real estate market conditions, they would be well advised to engage the services of the best TO public relations firms in the next few months to help them out… things are not improving any time soon as they well know and the best creative spin money can buy is the last of the bullets they have left… time will tell.

#26 islander on 01.09.09 at 1:59 am

Month-to-Date Market Statistics
Posted by
Victoria numbers are updated by VREB every Monday morning:

Market Statistics as at Monday, January 5th 8:00am:

Net Unconditional Sales: 10
New Listings: 47
Total Active Listing Count: 3,314

Listings are down from a peak of nearly 5000.

Investicals wrote: “Garth, take it easy. The realtors reading your blog might have to go on suicide watch with that post.”

Why? Unlike the whiners who lie awake at night crying about paid shills who – gasp – peddle whatever nonsense will keep the money flowing (realtors, bankers, economists, car companies, politicians, authors), I can tell the difference between “talking the book” and reality. If you’re putting anybody on suicide watch, you need to check your bathroom mirror.

#27 MaxDeus on 01.09.09 at 4:30 am

Garth:

Thanks for providing this forum.

I must admit that I have been religiously following this blog – reading most, if not all of the comments, every day – for about a year now, but up until now I have never posted, I have never contributed. The reason is probably because, with the vast array of contributors, everything I wish to add, or every point I wish to make – someone would eventually make it. So I could just sit back and the inevitable would occur.

Thanks to all those whose have contributed.

These contributors (like Squidly77, Mike B, etc..) have provided me with such a wealth of information that – had I attempted to find myself – would probably take 5 years or so (not scientifically determined, by the way.) So keep up the good work, guys.

Earlier today, I ordered “After the Crash”.

My reasons for the purchase: I want to read what Garth has to say about protecting what precious money I have made/saved in the coming reversionary year(s). I figure that he has a lot more resources than I do, and a lot more time to spend researching these things. The more informed one is, the better the decisions one is apt to make.

Before I had even heard of “The Greater Fool”, I reached the conclusion that real-estate prices were “out-of-wack” with income growth. So, I decided to “short-sell” my investment property. At the day of closing, I could not believe that some person was giving me almost 50% more for this little house that I had purchased only 3 years prior. At the time, I thought to myself, someone – either he or I – was a greater fool; and only time will tell. Anyhow, I paid off all my debts, and I put the remainder in a GIC.

So, I look forward to reading Garth’s new book.

And to all here, I wish “Good health; and prosperity”. In that order!

#28 HalifaxFamily on 01.09.09 at 5:30 am

You should come to Halifax to speak. People here need to hear your message.

I speak there on February 16th. — Garth

#29 Da Hk Kid on 01.09.09 at 5:47 am

Post #3 REE, that is a very optimistic view. You must own Van property. The Asian’s are getting hammered right now IN ASIA especially the HKers who will be looking to dump those still valued properties to make margin calls.

Here’s the skinny in HK, Hang Seng Index down over 50%, 100,000 China Ftys closed last year and 50,000 Chinese loosing their jobs each day where 85% of fty owners are HKers in Southern China the worst hit.

Property values off 25% already from Feb highs, with another 20-30% to go in 2009.

Huuum, I might have to sell my Van property along with my Whistler property to keep my kids in school and my Dim Sum belly full, and the S Benz in the driveway.

#30 Kash is King on 01.09.09 at 7:26 am

Garth: =====> “big suburban suckers with energy-snorfling pools, double car garages, enough bedrooms for a circus and Scarlet O’Hara staircases.”

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

LOL. The single biggest thing I don’t miss is our (former) inground pool (came with the house).

Never again ! ! !

What a pain up the rear that was… electricity hog .. gas hog too with the heater.

Honestly, only a tard would install an outdoor pool in Canada.
My advise for anyone out there thinking about putting a bag of water in the ground…. DON”T DO IT !!!

Garth, I made a now rare trip to Canadian Tire last night, and realized that since we rented our nice condo apartment, we haven’t been zombie-walking around in CTC, Rona, or Home Depot for all the ” I want, I need, I have-to-haves” for all those house projects/ room-fillings.

It feels like having stepped off a treadmill. An emancipation.

We’re now beginning to wonder if we’ll ever want to own another house. Why leave easy street? Hmmm maybe we’ll buy this place when the price drops more… a lot more ?? Then again, between what the monthly fees are, and what property taxes are (and will be?) maybe we’ll keep renting . Although if we ever see a likelihood of appreciating RE prices again… it would offset those. We will probably be waiting a loooong time for that though.

I can see why politicians are scrambling to get more people to “buy” a house , take a mortgage, then have to go to all these stores and have to blow even more money. It makes it look like the economy is working….that’s why they’re so desperate to “get credit flowing again’. Remember if the economy looks like it’s working, the greater their chances of being re-elected. This strategy is employed by all parties.
Sadly the bulk of the money just goes to China, so doesn’t actually help our economy. It’s a challenge to find anything not made in China.

We need to grow productivity here, instead of the debt- as-growth model/ ponzi scheme.

#31 Jonathan on 01.09.09 at 8:30 am

Jon B, get real. Like Garth said, the offering of free advice on this site is more reason why he deserves our business. Accountants, lawyers, doctors, and financial advisors spend a great deal of time keeping up to date. They shouldn’t have to defend themselves for when they charge for it, and this reward does not mean they have a hidden agenda. It’s a simple work / reward structure. I agree with him not posting your comment.

#32 Jonathan on 01.09.09 at 8:34 am

Thanks for the link.

I notice that most real estate agents have resorted to using a 12-month rolling average to report the current average for the month. I don’t think I saw anyone using this technique six months ago.

#33 prairiegopher on 01.09.09 at 8:44 am

“Canada’s PM now less gloomy on economic crisis”

What a joke! Last night the head of the Fraser Institute, an economist with RBC and an economist with the auto workers union all had dire predictions. This backed by the chief economists of the major banks the day before.

Do Flaherty and Harper run around the PM’s office smacking into each other or lay on the floor and run in circles when they hear bad news? Obama is planning on spending the last dollar that even the unborn generations haven’t seen and we are saying “It’s okay.” The next few months(years) are going to be interesting if we have leadership like this. I get not putting the population into panic mode, but let people prepare and give them the tools to weather the storm. Kudos to you Garth. Keep up the good work. I’m not going to preorder your book, as I will be gone on holidays, so I will pick up a copy upon my return.

#34 real estate expert on 01.09.09 at 8:52 am

Mainland China is now sending “even more reduced in price finished goods” overseas.
They are doing this to try and stem the tide of a diminishing manufacturing economy.

…It all comes thru “Hongcouver” and raw materials back to them and the rest of Asia goes thru “Asiacouver”.

Rich Asians will all have 2nd homes in Vancouver, it simply makes sense.

…Why live among 7 million poor working people in Hong Kong? rhetorical question of course

Remember please…Whiterock/Morgan Creek, Vancouver Island, (incl Victoria) or Saltspring Island are not Vancouver.

The Iranian Nationalists who relocated to the North Shore of Vancouver after the Ayatollah, may never move back to Tehran…they have to fantastic life here, buying before any boom…while Eastern Canadians lived with “Toronto is the Centre of the Earth” psychology…sadly, you still have that psychology, and Tehran is likely to be nuked first which will take care of any second thoughts.

just my two cents

#35 Makeorbreak on 01.09.09 at 9:04 am

We have an above-ground pool and we love it. We don’t heat it. I don’t understand why people would heat something they use for getting away from the heat.

#36 dd on 01.09.09 at 9:10 am

#3 real estate expert,

Always pocking the bees nest.

Point one:
“The Chinese and Iranian population will never reduce their property prices…it’s not in their culture to do so…instead they will simply fill their homes with more and more relatives.”

WRONG. Read the paper and talk to people in China. Real Estate prices are crashing.

So you first point is incorrect. Do I need to go on?

#37 midas on 01.09.09 at 9:11 am

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4177766/Merrill-Lynch-says-rich-turning-to-gold-bars-for-safety.html

SELL EVERYTHING: BUY GOLD

If the wealthiest of the wealthy are only comfortable in storing their wealth in physical gold, then why should we average folk put it in paper?

Garth, I noticed you’ve changed your tune on bullion bunnies. In these times ‘bullion squirrels’ maybe a more appropriate moniker.

My tune is the same – a dangerous investment for those who do not understand it, and a comfort for those who do. But gold is 100% speculative, since there’s no investment return. Kinda like your house, except you can’t live there. — Garth

#38 dd on 01.09.09 at 9:18 am

#14 Nanaimo Real Estate,

Yes V Island. Beautiful, warm, no jobs, high house prices, massive layoffs in the forest industry.

POP.

#39 dd on 01.09.09 at 9:20 am

#13 Remarkable timing,

We are connected to the US hip. Period. Until house prices in the US stablize things are going to get worse. Prediction are still on for late 2009 early 2010 for prices to hit bottom. Approx 40-50% haircut from the highs.

#40 Bottoms_Up on 01.09.09 at 9:33 am

RE: gold. An ‘expert’ on BNN recommends buying XGD.TO to make a play on gold. You get potential appreciation in the stock price and a dividend. Be careful on your entry price though.
—————————————-
Anyone else getting notices of price increases?
My natural gas price through Enbridge went up 5%
and just got a notice today that Roger’s is increasing prices for cable and internet 5-15%!!

#41 smwhite on 01.09.09 at 9:56 am

#37 midas

I was thinking the same about the “bullion bunny” comment back a few months ago… I understand better now the risks a little better at this point and like everything, diversification in your portfolio is key, just like 80% RE is too much, so is 80% precious metals and the likes is as well.

I’m guessing gold and silver stocks and physical metals are going for a ride once Obama starts his “plan” of printing money. There are very few differences between right or left government when it comes to fiscal policy. The only have one tool in their tool belt, and it stopped working.

But timing is everything, a lot of the “herd”, the same sort that chased RE are going to get caught in the next bubble, gold.

Once again, my favorite chart:

http://www.zealllc.com/2005/gorex3.htm

I figure we’re somewhere between 1975 & 1978 right now, and once the printing press starts again, a double in price as in 1980?

Timing is everything for bullion, just like the housing market. Some will show up to the party too late, and get creamed, again!

Anyway, its pure speculation based on history and the result of inflating the money supply.

I have succumbed to the pressure and have bought “After the Crash” and am more then happy to pony up the extra $7 to keep this forum and the author pumping out his contrarian view.

Rubber baby buggy bumpers,

S

#42 smwhite on 01.09.09 at 10:06 am

#3 real estate expert

Your forth point, all you have to do is read the first para from this “informative” article for an example of why your being plain silly, as per.

http://blog.macleans.ca/2008/11/27/could-it-happen-here/

Every court needs a gesture, and you get my vote.

“Best way to become a real estate millionaire is to start off as a real estate billionaire”. – Peter Schiff

#43 Bruce @mortgagehelp on 01.09.09 at 10:14 am

This is hilarious — an excellent squirrel recipe from the NYT
http://www.nytimes.com/2009/01/07/dining/07squirrel.html

#44 Alex Curylo on 01.09.09 at 10:18 am

@Garth:

“But gold is 100% speculative, since there’s no investment return.”

Well, there’s always my gold play …

$1800 on a metal detector and assorted sundries, and $25 to dust off my Free Miner’s cert.

We’ll see how that one works out!

#45 Kash is King on 01.09.09 at 10:20 am

#35 Makeorbreak, the pool heater lengthens the swimming season. I used to like the pool at 80 degrees or more. Hard to rely on our northern sun for more than a few months.
If it had been an above ground, I’d have simply dismantled and sold it. A giant 20,000 gallon hole in your backyard is difficult and expensive to fill/ relandscape. Turns out it was easier just to sell the house to someone who enjoyed it more than us.

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

Here’s an interesting read from the Financial Post:

“No real estate crash here? Who are they kidding?”

Link: http://network.nationalpost.com/np/blogs/fpmagazinedaily/archive/2009/01/09/no-real-estate-crash-here-who-are-they-kidding.aspx

#46 Patrice on 01.09.09 at 10:27 am

to #3, real estate expert

You cant be serious; or you are mentally deficient.

—————
1/The Chinese and Iranian population will never reduce their property prices…it’s not in their culture to do so…instead they will simply fill their homes with more and more relatives.
—————
yes, if many people can weather the storm for many year and refrain for selling; this might have a small impact on the resale value.

————–
2/Vancouver “proper” is populated by only @ 800K people…much much smaller compared to other world class cities like Toronto, 3 million…New York, 12 million…Tokyo, 20 million etc etc.
————–
Being a small city isn’t going to help at all; if anything, i would think that the real estate market fall faster in small cities.

————–
3/Vancouver’s Marine Bldg and New York’s Chrysler Bldg. are sister Bldgs and the only true examples of Art Deco Architecture in North America….and wrong, the Empire State Bldg is Art Modern.
————–
Who cares? 2 nice looking buildings are not going to change anything. Have you totally lost your mind?
There are thousands of nice looking buildings in Europe, Asia, North America.

————–
4/Many Left Coast “Film Industry” Californians already have second homes in Vancouver and it may just be a short time from now when California goes bankrupt and these Americans will simply move here permanently…besides, the lighting for filmaking is the best in Vancouver than anywhere else in North America…honest injun
————–
This is one industry. Another sign that being a small city isn’t a good thing.
Bigger cities usually have many flourishing industries.
Vancouver, relying too heavily on one industry is very dangerous.
With Obama pointing toward protectionism, you might see many new policy encouraging the cinema industry to stay in the US. Like tax breaks if they do ect…
Rendering Vancouver incapable of competing with the states.
This is the risk you take when you put all of your eggs in the same basket.

————–
5/and finally…what other city in the world can boast some ski mountains overlooking their city?
————–
I don’t know; 200? 300?
Not that many people enjoy skiing, and of these people only a very small % would move to a different city to enjoy their hobby.
And if you love ski enough to move to a different city in order to enjoy your hobby; my guess is you would go somewhere like the Alps in Europe.

——————-
So, it is just a matter of time when Vancouver becomes the Financial, Trade and Lifestyle Capitol of North America.
——————-
Have you ever heard of Bay street? or Wall Street?
Vancouver have nothing to compare to these; and nothing pointing that they will ever have.

———–
You heard it here first
———–
Get you head out of your ass; open your eyes, see clearly what is going on and how everything is without judging or being biased by what your mind want.

#47 Bobby in Victoria on 01.09.09 at 10:31 am

You can always tell the “real estate experts”, they always get their facts wrong. There is still a group of so called experts out there saying prices and sales will sky rocket this year. Yet in some places there are few sales and tumbling prices.

It’s going to get ugly!!!

#48 Tony on 01.09.09 at 10:34 am

“…This is especially true because lots of Boomers have unsalable houses – big suburban suckers with energy-snorfling pools, double car garages, enough bedrooms for a circus and Scarlet O’Hara staircases. So, with their wealth locked into their cul-de-sac traps, they’re not going anywhere….”
_____________________________________________

Here we go again!

I guess all the people who live in this suburban-type home (sounds like a 4 bdrm, 2500+ sq.ft. home) is looking to get out? And go where exactly? Back to a condo in the city? Ha ha. That would go over well with the kids. How about an 800 sq. ft. townhouse to raise the kids out of?

I don’t intend to mock those that can only afford that for a roof over their heads, but let’s get real. Those of us that will still have their jobs through all of this (90%) will not be running to get out of the burbs.

Your fear mongering may sell books, but the only ones who embrace that crap are the squeegee kid clones that read this blog and hope that real estate crashes enough – so that they can finally get their asses in the market. Don’t deny it, clones. If it weren’t true, you wouldn’t be frequenting a real estate blog. Perhaps the time is not right for you because you haven’t become a self-sustaining adult yet (because many of you still live in your parents’ basement). Just wait until by the grace of God, someone actually wants to marry you, and smartens you up a bit. There is a reason why we have suburbs with parks and arenas – and those reasons will always be with us. It will just take someone with a bit more common sense than you to help you realize that maybe you should get off of Garth’s koolaid, and get a job, and start a family, and make your damn life count for something. Then one day, you wake up and find yourself in the burbs. For many of you, it’s your destiny. Don’t worry, it’s a happy place. Enough with the video games, and start growing up.

Garth, you state a lot of good points and I’ve been a fan of yours for a long time, but I don’t appreciate you travelling all around our great country prostituting your credibility by perpetuating and spreading over-the-top fear for the sake of selling your damn books. I think anybody who owns a house in this country and cares about it’s value should feel the same way as me. I can handle a recession and a price correction, but you’re out there actually making the problem worse than it needs to be. You should be ashamed of yourself, you bastard!

Yeah, Tony, you’re on to me: I admit to having engineered the US subprime mess, the collapse of the Wall Street investment banks, 40-year mortgages, hedge fund gambles and even Chinese deflation. Damn, you’re good. Enjoy the pool. — Garth

#49 smwhite on 01.09.09 at 11:54 am

#48 Tony

Good job Tony, stick your head farther up your sphincter, just keep pumping out your little debt slaves in your overpriced cardboard box.

I’ve heard the continued rants and ravings from persons in the know, like yourself, about the bitter renters, enough to know that it ain’t the “renters” that are bitter, its people like you that OD’ed on Ozzie Jurock centerfolds and the Globe and Mail’s rosy predictions that real estate was the road to vast riches and many harlots.

Welcome Tony, your the next contestant on the “Bitter Owner”.

So to go off like an ignoranous and shit on the readers of this blog(which all aren’t 19 years old BTW), then in the last para state you agree with the “many” points, just shows what a prat you are.

You’d think Garth was the only man on the earth that has been stating the obvious, shut your mouth and open your ears, you got stained MSM kool aid lips and MSM kool aid tongue.

*HUGS*

http://www.ottawacitizen.com/Orl%C3%A9ans+fire+guts+houses+damages+others/1141648/story.html

Particleboard, the main component of these lovely new suburbs, only benefits the builders wallet. My downtown semi built out of brick and actual hardwood, wouldn’t put on the same July 1st fireworks show these hunks of dung being mass produced in the burbs will.

#50 Kash is King on 01.09.09 at 11:56 am

#48 Tony:====> “but the only ones who embrace that crap are the squeegee kid clones that read this blog and hope that real estate crashes enough – so that they can finally get their asses in the market.”

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

We bought a SFH mid ’90’s, sold Aug 2008.

Will take a lot to reconsider ever purchasing (not investing in) a house ever again. It may yet be an option…way in the future.

I enjoy getting the unfiltered news thru sites like Garth’s… that’s why I show up. Also like to try and help others by posting my tidbits. I’d offer timbits if I could.

At first I showed up here… lurking… while our house was for sale… there was quite a disconnect from what I was reading on places like the CMHC website etc.. One tries to gather whatever info they can for an informed decision.

Anyways, RE has started to seem like a tiny sideshow in this larger “debt-as-growth /credit ponzi scheme” implosion, no?

#51 real estate expert on 01.09.09 at 11:59 am

#48 Tony

“”I guess all the people who live in this suburban-type home (sounds like a 4 bdrm, 2500+ sq.ft. home) is looking to get out? And go where exactly? Back to a condo in the city? Ha ha.””

…Tony, I took Garth’s point as those baby boomers living in 7 bedroom, 5 bath, 5000 sq ft homes…not the 2500 sq ft ones.

#46 Patrice

How can I argue with someone who lives in a Hamilton Harbourfront condo overlooking old heritage Stelco.
…Seriously Patrice, Vancouver is a small city compared to all the other international megalopolis cities, (except for the two in Switzerland)…so it is this man’s humble opinion that Van goes up while TO goes into the sh*tter, along with the welfare cities in Ottawa, Montreal and Quebec City…pardon my language.

#52 JamesT on 01.09.09 at 12:01 pm

@Tony


“…This is especially true because lots of Boomers have unsalable houses – big suburban suckers with energy-snorfling pools, double car garages, enough bedrooms for a circus and Scarlet O’Hara staircases. So, with their wealth locked into their cul-de-sac traps, they’re not going anywhere….”
_____________________________________________

Here we go again!

I guess all the people who live in this suburban-type home (sounds like a 4 bdrm, 2500+ sq.ft. home) is looking to get out? And go where exactly? Back to a condo in the city? Ha ha. That would go over well with the kids. How about an 800 sq. ft. townhouse to raise the kids out of?

Either you don’t understand what a “boomer” is or you just wanted to make a broad generalization trying to pull the wool over people’s eyes.

The leading edge of the baby boom generation is retired/retiring and the are looking for smaller houses/bungalows because the upkeep becomes more and more overwhelming as they age and because their kids have all moved out (their “kids” would typically be in their 30’s). So yes, many of them are going to move into condos… and their kids will be very supportive of that decision.

In addition to this, many of them have a good deal of their retirement savings “invested” in their homes and if they want to travel or maintain a standard of living then yes, they will be looking to sell.

When you’re 65 you don’t have the luxury of waiting 10 years for the market values to start going up again. Many boomers must face the decision of taking a 10% hit now (compared to the peak value, not what they paid) or losing 40% more if they wait 10 months to try and sell.

#53 Mike on 01.09.09 at 12:09 pm

Tony #48… Are you sniffing glue dude???
Maybe turn on your windows 2000 machine and watch bnn and see how Canwest is now a penny stock. Time warner takes a debt charge of 25billion when the company is only worth 36 billion. The New York Times is teetering on extinction, even the building they recently built cannot keep them afloat. If you’re not tech savvy with those fan dangled computer which a ma call its then read the star today where MDS labs fourth quarter loss of 575 Million US. Teck Cominco slashes 1400 jobs.
British interest rates hit 1.5%… Germany foreign sales down 11 percent. How about the jobless rate TONY now at 6.6 %.
Saw a house for sale in Toronto this morning. Owner asking 825K. Nothing on the street ever sold for anything over 600K. Needs everything. Has a pool though 25 years old. CANNOT SELL. No one has the cash in spite of the great location. Will sit there for months and months. Others just blocks away keep dropping their prices but still no nibbles. You are just out of it dude.

#54 bobtugnnut on 01.09.09 at 12:20 pm

http://www.calgaryherald.com/business/real-estate/Calgary+home+sales+slide+lowest+since/1150209/story.html

This couple from the Calgary herald article is crying boo hoo because their house isnt selling and the story is about how they “picked the wrong time to sell”.

Someone needs to slap them in the face!

They picked a GREAT time to sell! It is certain if they drop their price big time they will sell it.

If they wait until next year, or basically any time in the future, it is obvious their list and selling price will be MUCH lower than what they can get today.

#55 Kestral on 01.09.09 at 12:40 pm

To #6 Jon B

Please correct me if I’m wrong, but I have to say I’m appalled by the “something for nothing” attitude your post had. As said, if this was not your intent then please disregard this but for me, Garth adds so much value that to me, paying 20 bucks to buy his book is a bargain.

And just in case you may think I just buy anything Garth, I didn’t buy Greater Fool, I ended up borrowing it from the library, but I did buy After The Crash, and paid a few bucks more than on Amazon.ca by purchasing it from Garth’s site where the added bonus is I get an autographed version.

I have friends who have publish books and usually when they sell the book on their own, the margin is much thicker, so I hope by my purchasing directly from Garth that he got more of the money, because he deserves it.

You’ve probably heard the expression “There ain’t no such thing as a free lunch”, imo Garth’s blog comes pretty close, I figure the least I could do is leave a good tip.

#56 pbrasseur on 01.09.09 at 12:47 pm

Construction and RE is just beginning to crash in Canada yet this country is loosing 70,000 full time jobs a month…

I don’t think Canadians and our medias have yet realized how vulnerable this country really is. The word here in Quebec is still that we will get through it relatively unscathed, what a joke! How could that be for one of the least productive state/province in the continent?

I’m no oracle but I can clearly see that denial about Canada’s economic weakness is about to take a hard hit!

In fact I wouldn’t be surprised if in the end we get hit harder than the US.

#57 Nathan in Edmonton on 01.09.09 at 1:09 pm

#48 Tony
I’m a homeowner (well bank owns half) and I greatly value Garth’s insight. He has way more credibility than the liars who told the public only months ago that Canada was in great economic shape.

Garth is not spreading doom — he is spreading information to help people mentally and physically prepare for a possible outcome of current economic events.

I would rather be somewhat ready for what could happen than not at all, it’s too bad you don’t see the value in that.

Bye-the-way: I live in the suburbs and have an energy-snorfling pool that I love, and can’t wait to open in four months.

#58 Wealthy renter 2 on 01.09.09 at 1:18 pm

Tony, sounds like Garth struck a raw nerve in you. Maybe the suburbanite rant is getting too hard to take. Not sure why? But take it from real estate expert, post a contrarian comment, add humor, and people might read…..just for a chuckle. That’s why this blog is fun, because even when the news is so nucking futs out there, you can count on this blog for your daily dose of morning coffee

BTW love the line: “Best way to become a real estate millionaire is to start off as a real estate billionaire”. – Peter Schiff
that made me howl!!

#59 Kash is King on 01.09.09 at 1:42 pm

#57 Wealthy renter 2 : speaking of RE billionaires, check out the 5 yr stock chart for Trump Enterprises:

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=trmp&sid=0&o_symb=trmp&freq=2&time=12

#60 Jimster on 01.09.09 at 1:45 pm

#48 Tony

“but the only ones who embrace that crap are the squeegee kid clones that read this blog and hope that real estate crashes enough – so that they can finally get their asses in the market. ”

And I guess the only people who show up to view car crashes do so because they want their heads splattered against a windshield?

#61 POL-CAN on 01.09.09 at 1:46 pm

Ouch…

Mish has officially called the USA to be in a depression….

There is no official definition of depression. Here is mine: When the U-6 unemployment rate rises above 12.5 in conjunction with a stock market that is down close to 50%, the CPI is negative, and nominal wages are stagnant, it’s an economic depression. We are in one.

http://globaleconomicanalysis.blogspot.com/2009/01/jobs-contract-12th-straight-month.html

But remember…. It is different here :)

#62 Jelly on 01.09.09 at 2:17 pm

real estate expert;

THAT IS YOUR MOST MORONIC POST TO DATE

#63 Jelly on 01.09.09 at 2:31 pm

Tony,

What the hell have squeegee kids DONE to you?

I gotta say, you’re all over the place on crazy tangents…

Mentalist!

#64 Future Expatriate on 01.09.09 at 2:46 pm

Merrill Lynch, US Bank say rich flocking to PHYSICAL gold, abandoning paper. “Win-win” either way whether we face deflation OR inflation.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4177766/Merrill-Lynch-says-rich-turning-to-gold-bars-for-safety.html

#65 Wealthy renter 2 on 01.09.09 at 3:36 pm

#59, Guess it pay back time……..Trumps biz brains don’t look so great now when he’s not on “the apprentice” shoving swill advise down people’s throats.

Just heard his 3 casinos are going to be in foreclosure.

#66 blacksheep on 01.09.09 at 4:03 pm

Tony,#28,

Owned a home for the last 20 years in Van.

Sold at the peak because i was awake.

Already gained 15% on funds from house sale.

For most people a house is the biggest investment
they will make.

Your pissed because you cannot sell your house
and are facing a 40%+ loss of personal wealth.

HA! HA! [in a Nelson voice]

Turn of the game & try thinking for yourself next time.

#67 real estate expert on 01.09.09 at 6:09 pm

#62 Jelly,

To Jelly, my admiring piranah fish… namaste.
————————————–
…So my take from the last few postings is that even 2500 sq ft homes are now considered “monster size?”.

(btw, love the name “Jelly”…reminds me of those heavy weight doughnuts they sell at Tim Hortons…you must be what, like 750 lbs?…you one of’em who live in their bed 24/7…do you?)

#68 Investx on 01.09.09 at 6:48 pm

#26 islander:

Investicals wrote: “Garth, take it easy. The realtors reading your blog might have to go on suicide watch with that post.”

Why? Unlike the whiners who lie awake at night crying about paid shills who – gasp – peddle whatever nonsense will keep the money flowing (realtors, bankers, economists, car companies, politicians, authors), I can tell the difference between “talking the book” and reality. If you’re putting anybody on suicide watch, you need to check your bathroom mirror.
—————————————————

Get out of my bathroom.

Touched a nerve, eh, islander? You’re probably one of these shills who tried to “keep the money flowing” by pumping up real estate to these unsustainable levels.

#69 WAK on 01.09.09 at 11:37 pm

Hey Tony. You just sucker punched good old Garth here and sure got a reaction from some devout followers.
But dont you worry he’s a big man he can handle it. Sometimes its good to hear some comments from the other side so that we don’t all look like Garth brainwashed robots with “follow me and you’ll be save” like talk. This is what I love about this country.
We can agree to trade punches.

#70 Glenn on 01.11.09 at 4:43 pm

Hey Investx, to hell, literally and figuratively, with the poor little real estate drones. Couldnt happen to a nicer bunch of social parasites. Id be more concerned with the hard working family man thats taking a bath on his new home, and about to lose his job.
As for “Tony”, the stench of shaming language straight out of Valerie Solanas’ SCUM Manifesto is overpowering. Do your kind ever wonder why more and more thinking men are rushing overseas to find a quality wife (myself included), and pointing you and your ilk over to the nearest showing of The Vagina Monologues? Finally, WAK, I have to admit that you are the archtype Canadian stooge thats given your nation, with about the same land mass as America, a population thats 1/10 the size in about the same timeframe. You define yourself not by accomplishing great things, but by stopping others from accomplishing great things. Unlike the gladiator that basks in the glow of glory, you are the spindly geek tossing pebbles on the ice, thus bringing the game to a halt. With the crowning moment being when the cameras focus on you…just before security chucks you out on your ass. Your 15 seconds of “fame” are about up, and Garth will most likely be seen as something of a visionary.

#71 WAK on 01.12.09 at 12:23 am

Glenn. You’re a talented poet. I think you’re a
modern day Shuksspeare.

Don’t get me wrong bud. I like Garth and I wish him success in his business endeavors particulary in his books. But I like to see a balanced opinion in this blog not just a bunch of yes sir or yes mams.

I sure hope he’s wrong though with his predictions because not too many read his blogs or read his books to take the necessary preparations. Many of us would be in a financial ruin. If it’s not you, it could be someone you know or close to you. God forbids.