The new normal

nanaimo-91

Signing books in Nanaimo Sunday. Alas, no brazen hussies.

He’s been a realtor in an area of expensive resort homes and condo explosion north of Toronto for, he says, 20 years. He just sent me the latest stats report from the local real estate board – with a note of disgust.

“I find it discomforting that the president says prices are only down 3%. That is not true, prices rose in the first half of the year, so peak to trough decline  is 10%. Anyway I know a lot of good honest realtors, but some do deserve the treatment they receive on your site. I have been reading your blog for awhile and basically agree with what you are saying. “

Meanwhile, here is what the president of the Georgian Triangle Real Estate Board, Vicki Bell, has just told her flock – following a year in which average home sales crashed 23% and high-end home deals plunged by 50%.

“Suggesting that prices overall have declined significantly is false…Unlike in the U.S. we do not have foreclosure issues. Interest rates remain historically low and despite significant job losses, residents are not leaving the area in droves in search of work wherein they are in need of selling their homes quickly if at all. Many of our sellers are in a position where they can and will wait for the market to rebound. All these factors indicate that widespread and significant price reductions are unlikely.”

Hmmm. Seems I read just about the same thing in a magazine ad in my hotel room in Nanaimo, BC today. A local Re/Max realtor bought two full pages to tell people, “Canada has the soundest banking system in the world,” that “home sale prices in 2002 were $250,000 and $453,000 in 2008, a mere 81% increase,” and that, “prices rise on properties in places where people want to live – such as BC – and not northern Saskatchewan.”

Without a doubt, these are the voices of real estate desperation, as some people in this business try anything they can to battle back the dragons of reality. Day after day, real estate leaders and bleaters pollute the media with messages of bravado and false hope, trying to hoodwink people into believing the bad economic news is an illusion which will end shortly. And, in so doing, they make the situation worse by not allowing prices to fall from unsustainable levels in an orderly way until a new normal is found.

Of course prices are falling substantially and will continue to do so. We may not have a system of foreclosures in Canada equaling that in the US, but this has nothing to do with crashing values. Sellers given advice to hold off listing and wait for better months to come are being led to property slaughter. Meanwhile boasting about massive real estate price increases in recent years only underscores why they must now be unwound. How can values rise 81%, when incomes didn’t budge?

So, I have an admission to make. On Sunday afternoon I rode around ritzy subdivisions on Vancouver Island in the back of a realtor’s Lexus. I toured a bunch of houses of the legions now for sale. Houses with ocean views. Houses on rocks-and-pines iconic acreages. Houses owned by anxious vendors, and a few now owned by the bank.

Sales here in paradise are down by roughly a third. Prices have fallen, of course, and continue to do so. How could a financial author and real estate aficionado not dabble?

But, man, everyone’s getting a little uptight.

When my realtor friend (a refreshing, earthy realist) returned me to my vehicle in the PetroCan parking lot, there was a note stuck in the window.

“Mr. Turner. First I want to thank you for changing my life. You did a talk here some 10 years ago and gave me the tools to change my future. Today I no longer am the cow you so lovingly called all of us in the room! I have control of my life. I just saw you get into a colleague’s car. If you don’t find what you are looking for… I can do better.”

Did I mention these are strange times?

97 comments ↓

#1 apocalypse now on 02.01.09 at 10:51 pm

Garth, perhaps you should come out and tell your readers that we are in a depression which is going to get a heck of a lot worse, and real quick at that. Please do not shield your readers from the truth like realtors try to do with their clients. If Merrill Lynch can call it a depression then we should stop pretending that we are going to escape this mother of all economic collapses.
So you may lose a few of your fair weather blog groupies but those that will stay will appreciate your candor and perhaps thank you in ten years, or sooner. I estimate that by the end of this year RE will fall by at least 40% from end 2008 (not 2007) levels across most of the country. The carnage begins next month.

FROM: http://www.prisonplanet.com/merrill-lynchs-chief-economist-were-already-in-a-depression.html /Merrill Lynch’s chief economist for North America, David Rosenberg, writes in an economic commentary entitled “Some Inconvenient Truths” that we are probably already in a depression: We are likely enduring a depression today. As for depressions, there is no official definition, except to say that they have existed in the past. There were no fewer than four in the nineteenth century, one in the twentieth century, and we are very likely enduring another one today.
As I have previously written, just like it took many months for the officials and talking heads to admit that we were in a recession – and in fact had been for a long time – it will take a while before the government admits that we are already in a depression.

#2 Cendrine on 02.01.09 at 10:52 pm

Ah, Garth, you really wouldn’t consider moving to the “next financial and leisure capital of Canada”, would you? How about the third most affordable community in Canada, Windsor, where the summers are tropical and the winters only slightly snowy?

Checking MLS today, I see the listings are up 18,000 in preparation for spring just as you predicted. Prices are falling in the community where we hope to relocate.

I’m getting worried for our situation since the two January showings did not generate any offers and I cannot persuade the RE agent or my spouse that we should lower the listing price. My concern is that the current price may be scaring off potential buyers…

#3 nonplused on 02.01.09 at 10:58 pm

Holding properties off the market for higher prices won’t work. My dad was just talking to a friend of his in the home building business, and supposedly the friend said that he still has $100,000 to go on a $800,000 house before he gets back to the profit levels of the old days, and his costs are falling! He’s not making any plans to slow down construction at this point. As long as an old house costs significantly more than it costs to build a new house, supply will come to market. Plus, despite all the OSB, new houses really are much better built than old houses, in every aspect from insulation and furnace efficiency to moisture protection. (Except I don’t like vinyl siding. Doesn’t last very long even if it does good things insulation wise.)

I’ve done enough renovations on old houses to know what you’ve got. A piece of crap that should be torn down. 2×4 walls, poor vapor and draft control, R-7 insulation, zonalite in the attic (R-10 maybe, if critters haven’t pushed it all around), and a 30 year old furnace that is burning orange instead of blue, meaning it isn’t even up to it’s old 65% efficiency rating. Plus attractive décor. The cabinets might be better, usually custom plywood jobs instead of today’s standardized flat pack particle board. And the woodwork. I like the old mahogany and oak trim and doors better than the particle board stuff of today.

Fact is a modern day RV is better built than a 70’s house!

#4 Cendrine on 02.01.09 at 11:05 pm

BTW I’ve been meaning to ask you which blogs, columns or analysts do you trust and read regularly? Why do you trust them? Do you subscribe to the Global Economic Anticipation Bulletin?

I would be interested to know what others following this blog are reading also.

I have been following TAE, Calc Risk, Mish, Michael Panzner, Dan W (profane and entertaining), and Sharon Astyk (a calming influence – she teaches self reliance).

#5 EW on VI on 02.01.09 at 11:26 pm

Wow, thats a little weird. The remax guy in Nanaimo not only hit my 2002 apprasied value perfectly, but he also hit my 2008 assessment as well. Doesnt matter. T’aint for sale.

Legions of houses Garth? I dont see it in my neighbourhood. There are over 30 houses here and I see,
let me count……..one. Just one. Sure theres more than
that in some of the brand new developments that arent
built out, but I cant find the legions. Oops, sorry, theres
two. Dont worry about two. Its constantly for sale – on
its third owner in about four years.

Garth, I think its important that people realize there are “must-sellers” and “if you’re crazy enough to pay this price I will sell-sellers”. You get a lot of the latter in
a boom, I mean “healthy market”.

Did you bring the harley to VI? Saturday was nice and
sunny.

#6 EJ on 02.01.09 at 11:40 pm

If you keep up on what’s going on in the city you live in, you’ll be able to spot the RE industry’s statistical manipulations in their advertisements. In Winnipeg, they’re now quoting a cherry-picked price from the first half of 2008 and completely ignoring what happened after that (10% drop in prices). That stat is then used to claim a big increase from the previous year, and a justification as to why 2009 will also see “healthy” gains.

See? Just ignore any negative news and the future’s so bright, we gotta wear shades.

#7 dd on 02.01.09 at 11:47 pm

Yes, most tell lie to themselves. We all want to believe that the good time will last forever. I think that what most of the realitors are doing. The pump worked in the past so it must work in the future.

But who are they kidding. How many more years of double digit house prices increases were left in the cycle? What family in Victoria or Sooke could afford those prices. Seems not many.

#8 dd on 02.01.09 at 11:51 pm

#4 EW

“Legions of houses Garth? I dont see it in my neighbourhood. There are over 30 houses here and I see, let me count……..one.”

EW … we all can view MLS on VI. There are a tonne of houses for sale. And expected to be more come spring.

#9 JRK on 02.02.09 at 12:05 am

So what are your real estate predictions for Nanaimo? 30% down like Victoria or …?

#10 Jeff on 02.02.09 at 12:19 am

“Did you bring the harley to VI? Saturday was nice and
sunny.”

That was a joke right? 8c is freezing… the westcoast sucks in the winter… unless you’re in southern California… and it even gets below 20c some days.

And I don’t include SF… their weather is almost as bad as Vancouver and Victoria.

Snowbirds will not be moving to BC unless prices drop 80% and they have some big wish to abandon their families for weather that is marginally better but still horrible… when instead they can buy winter properties in Florida, California, and Arizona currently at 50% off and soon another 25% plus lower… and their kids and grandkids can visit in the winter to swim in the pool, play tennis, and golf :)

#11 EW on VI on 02.02.09 at 12:26 am

8 dd – re: “A tonne of houses”. I remember the old days when it was a ton…..lol

But I just dont see it on a relative scale. I mean Im sure there’s hundreds, but I can drive around and just not see that many for sale signs. For example, subdivision down the road which is I think over 100 houses. Maybe 2 or 3 for sale. Another subdivision of 60 houses. Two for sale. My old ‘hood. Same thing. Do I think we’re immune? No. Are we better prepared financially in a general sense?
Maybe.

As noted in previous postings, forestry on VI has taken a kicking over the last decade or more. The people dont seem to get up and leave. Even those that have gone to
Alberta seem to keep their homes here. You have to ask
yourself the question: If I lose my job, will I leave this
community?

#12 Anon on 02.02.09 at 12:31 am

“Suggesting that prices overall have declined significantly is false…Unlike in the U.S. we do not have foreclosure issues.”

Well she is totally right. By the time every third door has a foreclosure notice the prices will have crashed so much that whatever happened so far will seem totally insignificant. Give her some credit please, she is being honest about facts.

#13 SurreyJoe on 02.02.09 at 12:34 am

Here in BC we have one Real Estate Board (Chilliwack and Districk Real Estate Board) that claims that prices are still rising! http://housing-analysis.blogspot.com/2009/01/chilliwack-realtors-in-poorhouse.html provides this gem of a quote:

“It’s no surprise that sales slow down during the final quarter of the year,” said Board President Trude Kafka. “This trend is not unique to our region. However, we did see an increase in total MLS® sales – despite a monthly decline in total MLS® property listings. Property values continue to increase in our region. Hopefully these trends will continue well into 2009.”

Unit sales compared to the previous December were down by 55%.

#14 Kanata has lots of Squirrels on 02.02.09 at 12:37 am

Wow … a house went up for sale on my street (1 in 6 sales in the last 18 – darn, I just bought into this baby boom heaven) … I’m sure everyone is hold their breath … I’m sure I’ve started losing money … good thing I’m no longer in Richmond, BC or some other crazy priced house in Vancouver.

I truly belive I will lose every cent I did in BC on real estate in Kanata. But by the time I need to renew my mortgage in 5 years, I should be somewhat debt free + my kids (and I) will enjoy the little forest (park) in the backyard.

I will weep softly at night for the lost opportunities but be happy my boys had a great place to live and lots of cash/gold in the safe just in case.

My tax returns may be directed towards a solar energy poroject… I wonder if I can use that for this new home reno tax credit for a couple of Xurbia project? Garth?

#15 Happy Renter in North Van on 02.02.09 at 12:50 am

The Presidents of Real Estate Boards are the carnival barkers of the industry… just keep the suckers coming in to see the bearded lady until the circus folds up and heads out of town…

#16 Kicker on 02.02.09 at 12:58 am

Garth, thanks for your comments on the Nanaimo market. I am the decidedly non brazen hussie in your photo for today. I agree with all of your comments today and the majority of what you had to say in Greater Fool. Thank you for drawing together data from a variety of sources and making it understandable and cohesive.

In response to EW on VI there are piles of houses for sale right now. If you look at sales and inventory through November 08 there were approximately 20 months of inventory in the harbour city. Anything over 6 is a buyer’s market.

I have been watching the market here for the last two years, and have seen a number of houses that have not sold this fall (or the previous one). They will likely be re-listed in the spring by greedy boomers trying to realize a 100% gain in sales prices from their purchase of 5 or 6 years ago.

This re-listing will push up inventory even higher. However, there will be no rescue from the spring market. Prices are set at the the margin, death, divorce, transfer, job loss. Your house value will likely stay low for the next decade at least.

#17 Bobby in Victoria on 02.02.09 at 1:04 am

Just headed out to the Western Communities today. At one intersection there were 4 For sale signs and a Open House sign on one side and 3 For sale signs on the other.

The Homes section is getting rather thin these days. Not many Open House listings. Have the realtors given up?

#18 EW on VI on 02.02.09 at 1:20 am

10 Jeff. I looked up the average high temp for Phoenix in January. 18C, so if you need >20C, you can write it off too. Where are you living now?

8C? It was either warmer here, or I’m more warm blooded than you. I worked in the garden with a sweater on. You have to admit, that beats -8 and shovellin the white stuff (or -18, -28 etc). Neighbour went for run in
his shorts. Wife washed car. And ya coulda golfed or played tennis too, but skip the swim (sigh)

Remember we lost on the exchange in the last few months too, so US deals need careful consideration. I saw condos in Miami – still askin $300+K for a small one 20 floors up. Hardly worth the move. And stockton Cal? Like ya said, marginally better maybe? You can try Cinncinatti , cheap-cheap. But I will keep an eye on Arizona. Hey, why not snowbird there for a few months and live here for the rest of the year?

And if ya cant handle 8C, ya shouldnt be ridin’ a Harley.

#19 bumbum on 02.02.09 at 1:40 am

having talk to colleagues yesterday, i’m overwhelmed by their response perception. all of them having comments like “Those people that think the Vancouver real estate market is going to crash are out of their minds. Yes, the prices will come down a little bit maybe after 2010, but it will never come down to an affordable level.”

“vancouver is the bubbliest city in the world” by yale economist Robert Schiller in 2005. he also predicted the US tech and U.S. housing bubbles. so, the vancouver bubble kept bubbling until early 2008. the bigger the bubble, the louder the pop!

#20 Ron on 02.02.09 at 1:47 am

dd #7

Not picking on you I just thought it was a funny typo,

“I think that[‘s] what most of the realitors are doing”.

I think that Garth is one of the few realitors around.

#21 Mike (authentic) on 02.02.09 at 3:34 am

Denial is the new truth.

Watch the news, read the papers, listen to the Realtor associations, they spin, lie, use questionable data and spit out something that goes in the direction they want, but not necessarily true.

Governments say “We might enter a recession in 2009”, Realtor(s) say “Prices are up over 1987, Canada is different, sales are normal for 1953 levels, it’s a great time to buy”.

Garth is right, if we just tell people the truth it will do more good than harm. Sure, no one really wants to know how bad it is and how much owners/sellers will lose, but in the end, it will bring about good, positive change everyone could use.

Mike

#22 Future Expatriate on 02.02.09 at 3:44 am

So Garth, tell us… did Villa Madrona remind you of Forest Lawn Cemetary and Mausoleum?

#23 Mike (authentic) on 02.02.09 at 3:52 am

Pay very close attention to what is happening here:

Lift trade protection, Canada tells U.S
http://www.canada.com/Business/Lift+trade+protection+Canada+tells/1237943/story.html

Last year, the US recognised one of the economic events that hampered the recovery of the 30’s Great Depression was protectionalism, trade wars and “Buy American” policies. Now, with the $812 billion US stimulus bill we are looking at the US repeating the same Great Depression era mistake.

IF the USA passes the stimulus bill with trade protectionalism intact Canada would be hit economically quite hard. 76% of Canadian export trade is done with the USA, think about the jobs, RE prices, etc. In fact, as Ottawa suggests in the article:

“We don’t need to talk about threats, but they need to understand, and this will be a message I will pass to the president, that we’re a force to be reckoned with,” Ignatieff told Global Television’s Focus Ontario. “We’re the United States’ largest energy supplier, not just oil, but also hydro; and they’ve got to understand that, if they want energy security, they shouldn’t start putting up barriers to our goods and services, and that quid pro quo has to be clearly understood by the incoming administration.”

This clearly suggests Canada needs to look at other markets to diversify our export market.

Mike

#24 Chris in England on 02.02.09 at 5:33 am

Singing from the same hymn sheet (or baking from the same recipe)….

Just been reading this http://www.globalresearch.ca/index.php?context=va&aid=12121

#25 Midas on 02.02.09 at 7:37 am

My house that I bought in a GTA suburb in 2007 and sold in 2008 finally closed on Friday; got the check in my hand and breathed a sigh of relief. Lost a full 100K in just one year which is something I can’t do much about; I’m just thankful that I had some equity left over which would have vanished by the end of this year. At least now I will be able to afford a side of potatoes and veggies to go along with the squirrels.

I know several realtors and most, almost all of them are in denial claiming that they are having a very busy year ahead because so many people are calling them to come list their homes. They claim this is a good thing because they don’t have to knock doors going looking for business. They don’t see the writing on the wall that so much activity from sellers (not buyers) this early in the year bodes ill for the spring market. 905 is going to take a bigger hit than it did last year. Homes have been on sale in my neighborhood for months; one home has been on the market for a full year now and the price on it has dropped a full 130K, from 749K to 619K – still no takers. And this in what was one hot area right up to the spring of 2008.

Rents too have dropped considerably, I am paying a full $1000 PM less for the home I’m renting than what I was paying for mortgage and taxes for the house I owned, and my rental house is 800 SF bigger than the one I owned. Even 9 months ago this mansion of a house would have rented for at least 700 PM more than I got it for but after sitting on the market for 6 months, the desperate owners bit the bullet and accepted my low ball offer. They tried selling for 6 months, beginning at 750K and lowering it all the way to 639K, still no success. This anecdotal evidence suggests to me that this market is unraveling fast and only gathering steam. If you want to sell this spring price your house at least 5% lower than the lowest property in your area and make sure your house is immaculate and ultra clean. If your house is worth more than 500K, pay a staging company to furnish it and make sure to paint it. The couple grand you’ll spend may be the difference between escaping the coming tsunami that will destroy this market by fall on a scale that I believe even Garth has not predicted. And stop thinking of four walls and a roof as a HOME, it is just a house and you are not in Kansas anymore.

#26 Bill-Muskoka (N.A.M.) on 02.02.09 at 8:14 am

Garth,

I smile reading that reality is still alive, but not too sure how well it is.

I have been saying this about Canadian RE since I moved here. I attribute the insanity (yes, this is truly an insane RE market) to some hangover from the days of English Feudal Lords in our collective psyche.

In the U.S. the goal was for everyone to own a home (albeit they too blew it with the sub-prime scam), but here in Canada it is like the British Class system which requires some sort of qualification long ago dismissed as unfair by the U.S. Just a thought to consider as to the ‘Why’ because ultimately all these issues come back to cultural perceptions by the people.

I think we need to look very deep into how we think to resove this anathama?

What is the cure? I suggest we look at manufactured homes, much smaller than these ego based, wallet ripper mansions, that afford sound living habitats.

A little recent history holds a viable lesson. At the end of WWII the returning soldiers had to have a place to live. The first American mass produced sub-division was the answer provided by a Long Island, NY developer named Levitt. He built homes like cookie cutters and they were available for $5-6K in his devlopment called Levittown.

The modular homes of old are nothing compared to what we produce today. In fact, we own one and it is better built than any site home with real insulation even under the floor. At just under 1,000 square feet, it is more than sufficient for my wife and I. We, also, only had to pay $80K, not some ridiculous price like GTA condos with less square footage, no yar, no green space, etc. We lease the land which puts to onus for maintenance on the landlord meaning we will not be gashed by huge costs should water or septic fail, and the streets are well maintained. The monthly costs is far below renting and we have already built equity. The homeowner’s association works together for the community’s well being.

When we were raising children we needed more space (we thought we did because we were like sheep ourselves in our youth), but look at how the asian families, and others from foreign lands do it. They work, and live together all contributing to the stability of the family and household. Same goes for our aboriginals. We used to do the same thing before the nuclear family came to be.

Which leads me back to the premise that we have a psyche problem of needing to portray royalty with our very own castle. What we really need is to get back to community based living, instead of sprawling out all over the land. I laugh at how people will pay assinine amounts to rent a hotel or motel room which is so small. My favourite response to such ridiculous rates is ‘I want a place to sleep, I am not looking to invest ot buy the place.’

We also need to rid ourselves of landlords who care only about profit, and not people.

Maybe we will also learn that vehicles are utilitarian items as well, not a symbol of who we are? Then mass transit and the environment will benefit, which will lead to all of us benefitting as well. Couldn’t hurt, eh?

The idea of vehicles that are used and left for the next use will become a reality simply because people do not need to actually own a vehicle for urban commuting. They need flexible transportation. This truly creates JOBS.

In Cuba, the government owns the vehicles and when one travels from one province to another they must either have a permit, or switch vehicles. So, yes, it can work. Similar systems are in use in other countries as well.

In short, we need to grow up, stop trying to mimic the Queen, and be about living life for each other not for ‘things!’

#27 Bill-Muskoka (N.A.M.) on 02.02.09 at 8:20 am

Oh, and regarding mortgages. In the U.S. the term for the mortgage is the full term, not at these ridiculous five year intervals. Therefore, a 30 year mortgage means exactly that. You are rock solid for the entire term (if a fixed rate), and most are assumable. The monthly payment includes principle, interest, taxes, and insurance, and yes, they can change as we all know.

The Canadian system is solely for the benefit of the banks/lenders, who apparently do not believe much in their own management, nor the stability of people’s lives.

#28 Krazy Kacuk on 02.02.09 at 9:08 am

#4 Cendrine,

Good choices for reading.
Also see:
http://www.minyanville.com/
http://financialsense.com/
http://market-ticker.denninger.net/

For a canadian view point..
Danielle Park her blog is
http://www.jugglingdynamite.com/

Good luck.

#29 lgre on 02.02.09 at 9:33 am

“Fact is a modern day RV is better built than a 70’s house!”

I disagree, what you are talking about is dated not poor quality, poor quality is the houses being built in the last 5 years. Talk to the people in Milton, about 5 weeks ago there was a pretty windy day, how many of those fantastic houses lost their shingles…tonnes..how many of the older houses lost shingles..none. How about noise issues in todays houses compared with the old..huge difference..live in a newer semi or town and then tell me how great the build is, when you can hear your neighbour fart. I have owned new houses built in the last 5 years and they are extremely poor..maybe the construction of the new houses is par with the old..but the difference is the material used today, cheap and flimsy…buy old and renovate you get a better envelope.

#30 George Popovic on 02.02.09 at 9:50 am

I lost count of the number of times I heard someone say how our banking system is so so much better off than the US. The 75 billion dollar bailout of our banking system is close to the bailout of the US banking system considering population ratios. I guess after a while if you repeat something often enough it becomes the truth.
The next time one of your friends repeats this tired old phrase, ask them to explain.

#31 paulb on 02.02.09 at 10:48 am

I’m checking out Garth in Vancouver this Thursday, then a couple weeks later going to see Deepak Chopra.

First a good solid dose of economic reality, then a way to think happy thoughts. lol!

#32 Rhino on 02.02.09 at 10:50 am

Last summer I did some pre-sale repairs for a friend on an executive house in West Island Montreal. It sold in August to a contractor who is a good friend of the realtor for $400k. It was “dated”, and needed a little work for making it livable, but the realtor convinced the sellers it needed major reno’s, so the family sold their inheritance house way below the market.

They called me last week to ask if I wanted to go to the Open house. Seems the house is now back on the market after a coat of paint and reno’s. Their realtor is now handling the re-sale, so a chance for a SECOND commission. Now the price is $750K!!! Yeah… Right…

Try and tell me the realtor was looking out for the interests of my friends in the first sale. A quick flip, to a contractor friend, and now a chance to double their income?

Try and tell me that realtors should be trusted at face value. There must be some way to find a good one. Most that I know are akin to bad used car salespeople…

#33 Keith in Calgary on 02.02.09 at 10:51 am

Denial……a river in Calgary…..

Saturday’s Calgary Herald had a weepy editorial passing as “news” from one of their resident RE shills anmed Marty Hope, compaining that we consumers should give our heads a shake and get out of our funk and buy a house….LOL!!! What an idiot.

He kept blathering on about how solid our banks are (the safe containing my cash is much more solid) as well as how we will not have a RE collapse here, no sir’e Bob…..everything is OK here there is nothing to see…..and it’s all our fault as consumers for getting in a funk.

http://www2.canada.com/calgaryherald/news/newhomes/story.html?id=2dce066f-393d-4b0d-8fa2-e830deb82c20

#34 eddy on 02.02.09 at 11:57 am

“home sale prices in 2002 were $250,000 and $453,000 in 2008, a mere 81% increase,”

‘mere’? how cavalier

if mortgage rates go up to even half of their historic highs, as i am sure they will, that mere 81% change will be in the opposite direction

#35 Pathfinder on 02.02.09 at 11:58 am

Guys, please stop with this “no sales” yapping – Dec/Jan sales are low because 90% of realtors are on vacation (Cuba, Hawaii, Mexico) and conferencing there. Wait and see when they come back in Feb/March, with new slogans, ideas, explanations. Take it easy.

#36 Bill-Muskoka (N.A.M.) on 02.02.09 at 12:03 pm

To those considering moving or Snowbirding in Arizona…Now would be a good time to buy because the influx of Californians finally dropped off which is what drove prices sky high. It was the Second Exodus.

There are many nice communities like Mesa, Glendale, etc., but not Phoenix itself where many Canadians own a winter home.

Mesa has many ‘mobile’ (single or double wide modular) homes available for rent or purchase. beware the lack of building codes my put you next to a mini-farm of various livestock however.

Whatever you do, check out ALL the details before signing anything. Especially note that a Swamp Cooler is only good during non-monsoon season months, and A/C will cost you an arm and a leg from APS or SRP. Do not buy a home with plastic plumbing in the attic either because when summer comes the fittings melt and leak. Basements are rare, and Monsoon Season storms will destroy your roof and vehicle if it outside. Also be prepared for HEAT! You can cook eggs and bacon on the sidewalk, or your car hood, after 8 AM during the summer months.

Also beware the desert dust storms and flash flooding. Trust me, you are not in Kansas anymore Dorothy, nor Vancouver. Also, be prepared for a level of violent crime which Canadians simply are clueless about. Oh, did I mention the nasties like scorpions (the little white ones are deadly to people, Centipedes (a foot long and very venonmous), and the ever present 3-4 inch long cockroaches, Black Widow and Brown Recluse spiders, termites, and dust, dust, dust?

Also do not think you will hear the gentle rustle of leaves, because cacti and palm trees do not make those sounds. LOL

Neighbors all build concrete block separation fences, so no more walking across the backyard to visit.

Lastly, do not expect the level of police service we have in Canada because it does not exist there. Barking dog? Noisy neighbor? Threatening arsehole? Good luck getting the police to even respond. That is why people carry guns.

But Hey, if you like John McCain’s mentality, Arizona is the place for you. Sorry you missed out on the heady days of Barry (Nuke Them All) Goldwater. He’s gone.

#37 Pathfinder on 02.02.09 at 12:06 pm

My realtor just called me from Varadero. He is taking diving lessons and he said all his clients and prospects should start doing the same.

#38 Sail 1 on 02.02.09 at 12:10 pm

#25 Midas

I am not an agent but what I can tell you is, in the High park area a condemned mold infested home sold last week for $569.000 approximate square footage 2000.

One week prior in the down town core a typical semi detached home, approximate square footage 1200.
This home was in need of much work was listed for $369.000 sold for $549.000 in one day with multiple offers. I’m sure this decline will happen at some point. When looking at the listings there is not much evidence yet in down town Toronto. I have low balled 5 offers with in the last 3 months. 2 verbal 3 written offers all with in a 20 to 30% reduction. No one took a bite, they were all including the agents very much offended. I may have to increase my agents commission, he hasn’t seen this much hard work for a while.

#39 Mcfly on 02.02.09 at 12:58 pm

“As you ramble on through life brother, whatever be your goal…keep your eye upon the donut and not upon the hole!”
It worries me that the President of the Georgian Triangle Real Estate Board may be somewhat misguided in her effort to keep the troops from dispelling anything that may be contrary to her analysis. And the Remax guy from Nanaimo…well he should be carefull as well.
Now I am no expert, but I have been a Realtor (now EX)for over 25 years. Over the course of that time I learned a few things. In the early 90’s we had the same discussions about “market value”. At that time I researched every real estate board area across Canada and pulled every number available since they kept records (1983). Here is what I found out.
Unlike the stock market, where price trends can change by the minute, real estate prices on the other hand, change very slowly over longer periods of time.
Sir Isaac Newton’s Law of Relativity states… “an object in motion tends to stay in motion unless acted upon by an equal and opposite opposing force”. Now, I know real estate evaluation is not a science, or is it? The effects of opposing forces like say…government policy, interest rates, unemployment, jobs etc… can actually be measured when you relate it to the market in your own home town. The object in motion being either the supply line (homes for sale) or the demand line (actual sales) react like the Law of ‘Cause and Effect’. That is “for every action on one side there is an equal and opposite reaction on the other.”
If the action in motion remains in motion for any length of time and the spread between supply(listings) and demand (sales) increases significantly, or decreases as the case may be. This will cause the average price to change.
If that makes any sense to anyone, then please consider this: I did some checking on that Georgian Triangle area and their market demand relative to supply appears to have peaked in 2004 with over 50% of inventory selling in a 12 month period. Wow, last time it peaked over
50 % was 1986.
As demand in both time periods reach a peak high… the prices start to go up and continue to go up as the gap between sales relative to inventory, starts to widen.
So now in reality that gap widened from 41.8 % in 2007 to now 29.9 % at the end of 2008.
Now remember the object in motion… if that gap widens further that means the Georgian area ain’t reached bottom yet. In order to stop the downward motion they can wait for forces beyond their control (ie. government policy, jobs etc…) or… the market will start lowering prices (until the little guy can afford to buy a house again).
The last time they reached bottom was 1990 when the gap of demand widened to 17% of inventory while their prices where at an all time high.
By the time they narrowed the gap back to 29% of inventory, prices had dropped to an 8 year low. (it was’nt pretty). Get the picture? The market goes up as prices go down.
As the Pres. from Georgian suggests… if people there have the luxury to wait it out until the market rebounds…I fear it will be a long wait.
Suggesting to her flock that widespread and significant price reductions are unlikely in her area is, in my opinion naive and a dangerous assumption.

I can’t say much about Nanaimo but I can say that they appear to peak high at over 70% of inventory and historically low at just below 40%.
Every area has its own geographic qwirks. (go figure)

If you have read this far, you are now one of the few with the knowledge to decipher what is “real” estate from hype!

Sorry I still have’nt ordered your book yet Garth. I’m a litttle afraid I might not have to! Keep your eye on that donut brother! We need to look after each other.

#40 OntarioHouse on 02.02.09 at 1:20 pm

#36 Sail 1
Nice story there. Good details too. Makes me laugh.
“Listed at 369,000 AND sold at 549,000 with MULTIPLE offers in one day!” lol
Come on now.

#41 $froma$ia on 02.02.09 at 1:30 pm

If you dont like my comments let me know?

Don’t pull on me what Harper did to you. I mean no offence.

#42 YouDig? on 02.02.09 at 1:36 pm

I.m sitting here looking out the window, the sun is starting to poke through, maybe spring is arriving, on the other hand, all the groundhogs say no. I am looking out where I live thinking, Garth says go! Go now!! Sell the hoiuse while you still can. It’s not easy, but by listening to Mr. Turner and reading his blogs, I trust him. He even said on TV the other day, to borrow money from the bank to get rid of high interest debt! Would we have ever dreamed that before? I have an appointment at the bank in a few days. Back to the house, and here is my question to ALL of you. Sell your home, ok, I understand, my fancial picture is not rosy. But then what? I / we need a place to live! Sooooooo,
do we rent???? OR buy cheap? Look for a super duper deal????? Stay in the next house looooong term????
Help!! here’s my e-mail, if ANYONE wants to drop me a line. Much appreciated. By the way, if your looking for a great house at a great price….lol :) Thanks!!

#43 North Vancouver Citizen on 02.02.09 at 1:43 pm

Dear Garth,

…Neither Victoria or the rest of Vancouver Island is Vancouver.

They are separated from Vancouver by a 1 1/2 hour ferry ride.

…You will note that Portland and Seattle have corrected a mere 13% while California has corrected 3 – 5 times that.

The Pacific Northwest is an entity all to its own…but not so in your books.

…No doubt all the Vancouver renters who attend your seminar will deliver you a standing ovation.

Uhmmm, one point, if so many homeowners sell their homes and then rent other homes, what will become of your “Happy Renters”?

Unless of course everyone rents condo’s there is no problem, but without doubt, renting homes will come a rental premiums.

Hey, but you know it all…because you reside in the Centre of the Earth…the densly populated, dying manufacturing Province of Ontario.

You are the Pied Piper for BC renters.

All the power to you.

#44 jess on 02.02.09 at 1:49 pm

In 1939 Ferdinand Pecora published his memoirs that recounted details of the investigations. Titled “Wall Street Under Oath”, Pecora wrote: “Bitterly hostile was Wall Street to the enactment of the regulatory legislation.” As to disclosure rules, he stated that “Had there been full disclosure of what was being done in furtherance of these schemes, they could not long have survived the fierce light of publicity and criticism. Legal chicanery and pitch darkness were the banker’s stoutest allies.”

The Pecora Commission hearings ended on May 4, 1934, and the Commission itself completed its work in 1936.

#45 K on 02.02.09 at 1:52 pm

Anyone one out there with less than a bachelors degree in business administration should NOT be selling real estate ! I think it might be time for our governments to set some standards.

#46 Sail1 on 02.02.09 at 1:53 pm

38 OntarioHouse

Believe what you like its no skin off my nose. There is people out there still dishing out good money for garbage.

#47 questioning on 02.02.09 at 2:06 pm

One thing is true: Calgarian house owners have not seen the RE price drop yet, and they simply don’t believe a “crash” coming at all, so “after crash” is nonsense for them, maybe they are right…jobs are still everywhere…Who knows!

#48 David on 02.02.09 at 2:23 pm

It is always good news in the real estate industry, no matter what is happening in the real world in which the rest of us happen to reside.
Lose your job and your pension, no problem. Interest rates set to skyrocket in a few years, no problem. Unaffordable houses compared to median incomes, no problem. Banks not wanting to have more exposure to toxic real estate, no problem. Government stimulus to offset massive deflation, no problem. No savings for a down payment, might be a problem all right.
But all is swell for real estate and do not miss out on the next upward price swing.

#49 wjp on 02.02.09 at 2:26 pm

# 41, your questions may have some merit, your sarcasm towards the blog’s author is childish. No one is forcing you to buy any of his rhetoric…but being civil is something we can all do…even us who reside in the Province in the center of the universe. Historically, we, in Ontario, have been the economic engine of Canada, and until the recent emergence of the West both politically and economically, I don’t remember Ontarians showing disrespect to those from the West. If your sarcasm is an indication of the type we might encounter in B.C., I would prefer to suffer with the masses in Ontario. Strangely enough, the most engaging people in Canada appear to be those from and in the Maritimes. Maybe new economic prosperity makes for poor human beings…just a thought, I suspect we shall all find out soon enough.

#50 Keith in Calgary on 02.02.09 at 2:34 pm

You guys wil get a laugh out of this.

The automatic spellchecker on the e-mail program in my work computer flagged “realtor” as being incorrect, and suggested that “Realtor” was the correct spelling.

Heh.

I clicked “ignore” on that one.

#51 Got A Watch on 02.02.09 at 2:40 pm

Canadian real estate will return to the prices of about ’97/’98, or before any of the last boom started.

I have read the average down-phase of a real estate cycle is 4 1/2 years. This bust is epic, so 5 years, or more seems likely.

So you don’t want to buy any property, no matter how “good a deal” it seems now, till about 2012-2013. At the earliest. Unless you are unconcerned the value may fall after you purchase, even if it’s a ‘foreclosure’ sale, or whatever.

If you owe less on the property than it’s value in ’97, you will probably be OK, as long as you aren’t emotionally attached to your “equity” and like living there. Otherwise, sell and rent.

That’s my advice. Nobody says you have to believe me, do what you think is right.

#52 VictoriaB&B on 02.02.09 at 2:41 pm

Today’s New York Times…

Vancouver a year away from hosting Winter Olympics

(afterwards come visit Victoria)

http://www.iht.com/articles/ap/2009/02/02/sports/Travel-Vancouver-Olympics.php

#53 PTDBD on 02.02.09 at 2:52 pm

Wowzer, unbelievable!
Judicial Watch, the public interest group that investigates and prosecutes government corruption, today released its 2008 list of Washington’s “Ten Most Wanted Corrupt Politicians.”

Who is on the list? President Obama, Secratary of State Clinton and the Head of Senate Banking Commitee Dodd who will introduce legislation to reform the financial industry.

:-) It’s the new normal, going forward :-) – the more things change….

#54 wjp on 02.02.09 at 2:53 pm

#43…Well I think anytime you have someone working on a commission basis, their interest will take precedence over yours, after all, who are they working for? I would suggest that one have a very good and trustworthy lawyer and that part of the initial offer would include a provision for your attorney to approve the transaction before one goes to contract. That is what we did when we purchased our present home privately but it is also a good idea even when dealing through a broker. Then his or her educational qualifications will matter little. Also one should research all the recent property sales in that neighbourhood to make sure the price in reasonable, and last but not least, the services of a good property inspector.

#55 POL-CAN on 02.02.09 at 3:06 pm

$ 44 Sail 1

Some houses are selling. If the price is right and the location is right, and the right buyer comes along, it will move. From where I sit (C1, C2, W1, W2, E1, and E2) almost nothing is moving in terms of detached or sem-detached. I do not care about condos.

The house we attempted to law ball on 3 times in W2 is gone after 5 months on the market. It was a great place (built very well), but was not in the greatest location. We were not going to pay full price due to that.

If we all wait and see, the desperate sellers will eventually capitulate and start lowering their prices in droves. I figure by June we will see the terror :)

Another excample from Markham…. House on the market for a year just sold for 399 K from 520 K asking price. That is a 24 % haircut and a long time to wait.

Patience…..

#56 Pathfinder on 02.02.09 at 3:57 pm

Dec/Jan sales are low because most of our realtors are on vacation (Cuba, Hawaii…) and conferencing there.
When they come back we will hear new bright ideas how to make a fortune quickly.
My realtor just phoned from Varadero, in the middle of his diving lesson. He said he would recommend his clients take the same course – DIVING 101. It’s fun being under water, and I have no reason not to trust him.

#57 East of Eden on 02.02.09 at 4:15 pm

I’m not sure what Kanata Squirrel was saying but, since that’s where I live, I figured I’d weigh in. I realize that the housing bubble has burst and that prices have decreased. I also realize that the prices were previously way out of line – I could not believe what my own home was garnering as a selling price when some of my neighbours sold their homes.

What puzzles me, however, is the amount of new homes which are going up in Kanata, Stittsville, and Barr Haven – and they’re sold before they’re even framed in some cases. And I can tell you, they ain’t cheap. Does Mattamy know something the rest of us don’t? Because Stittsville and Barr Haven might as well change their names to Mattamy Ville. Every time I go to either area, I have to check my route because the landscape changes every couple of weeks what with the new homes and commercial buildings springing up.

I also think that somebody should inform MPAC that prices have decreased because the assessment I received late last year is also way out of line.

#58 Bermygoon on 02.02.09 at 4:15 pm

Really strange this happened. I usually search http://www.realtor.ca for a house in the range betweer 750 k and 1.5 million with more than 3 bedrooms. The amount of these houses have been going up and up, almost 1900 in toronto last week. I checked today and 1700?!

Could this have dropped significantly because realtors don’t want the listing in the month end numbers.

I just don’t understand how a number could be going up and up and then take a huge drop, weird?!

#59 Bill-Muskoka (N.A.M.) on 02.02.09 at 4:24 pm

#37 Mcfly on 02.02.09 at 12:58 pm

Excuse moi, but Newton wrote the Laws of Motion, Einstein wrote the Theory of Relativity.

Perhaps it is ‘relative’ but then when space folds in on itself one cannot tell. BTW, Newton and Einstein are not ‘relative’ to each other.

However perceived value is ‘relative’ to selling price, but bears no relativity to reality in most markets. This proves Darwin was right and those who ‘monkey around’ in RE need to broaden their scope of knowledge.

Just a note from someone in science.

BTW, how are your son and Dr. Brown doing? Perhaps you can Go Back To The Future where prices in RE are what they used to be? LOL

#60 john on 02.02.09 at 4:48 pm

#43 K on 02.02.09 at 1:52 pm Anyone one out there with less than a bachelors degree in business administration should NOT be selling real estate ! I think it might be time for our governments to set some standards
………a piece of paper never gave anyone common sense or ethics…..e.g. Harper and Flaherty :-)

#61 Carole AB on 02.02.09 at 5:05 pm

#24 A good site…the video is an eye opener.

Ireland in big trouble…my husband just spoke to his father in Co Sligo…His son-in-law’s brother built a 50,000 euro stable and is now having to send his beautiful horses to slaughter…”they are worth nothing can’t afford to feed them, can’t give them away”..he says 100’s of horse owners in the area are doing the same. Boy is my father-in-law mad at those” banker crooks”!

#62 Toronto Market Watcher on 02.02.09 at 5:44 pm

#36 Sail 1

Not doubting your post details Sail 1, but the 48% selling price over list is clearly an outlier in this dead central TO market, unless of course, the seller’s strategy was to severely list below market to attract interest. And, no question about it, there’s still is a smattering of greater fools out there.

I follow the central TO market quite closely (especially c4, c9, c10, c11) as we are currently waiting to jump back in with cash in hand. Sales, especially over the $650k mark, are thin indeed, so much so that as I’ve said before, any honest realtor will tell you, it’s difficult to know what any house is worth out there. Prices in the aforementioned areas are down at least 25% from the peak.
I know it’s cold out there, lots of snow and dismal economic news gets dished out daily, but is it just my perception, but I would have expected a higher volume of new listings then we’ve had. No doubt new listing volume will accelerate going into the spring. On the other hand, with the economic uncertainty and consumer confidence in the gutter, perhaps, many prospective vendors might just choose to stay put.

Any thoughts out there as to how this spring will unfold in Toronto??

#63 eddy on 02.02.09 at 6:03 pm

bermygoon wrote:
“I just don’t understand how a number could be going up and up and then take a huge drop, weird?!”

-when agents list, they usually run the listing till the last day the month. lots of expired listings on jan 31

#64 Andrew toronto on 02.02.09 at 6:04 pm

where heading for a long DEEP _ression

http://www.moneyweek.com/news-and-charts/economics/were-heading-for-a-long-deep-depression-14585.aspx

#65 Bonnie N BC on 02.02.09 at 6:07 pm

Garth
My crystal ball on urban and trendy BC ocean (lake) side communities suggests that at the end of the bubble is a 50% devaluation of real estate from today’s market.

When we bought our place here on the Sunshine Coast, 8 years ago, it was because the trade-off was a townhouse in New West for 70k more.

We are not clear of the storm clouds as we have a small mortgage but we have cleared most of the debris to a manageable amount much lower than rent in Vancouver and even here if the rent drops by half.

I know you have warned about becoming emotionally attached to the “place” but it works for us as our plan was never to buy and sell but to nest.

I hate to be a contrarian – but wisdom is to know the limits of a dream and optimism is to understand the possibility outside of the limits.

I guess we’ll pay for that view but I would rather be an optimist.

#66 kc on 02.02.09 at 6:15 pm

Well our BC Lie-brals are going to be running deficits for the next 2 years… move over Ontario you have company in the red zone too….

#67 Da HK Kid on 02.02.09 at 6:28 pm

Midas, you speak the truth. Glad to see someone has their head on straight and willing to tell a REAL story on RE and followup strategy.

East of Eden, my custom Stittsville home which was purchased at $260K in 2001 sold for $360K in 2003. The house now a peak was $480K mid 2008. Doing some research and speaking to a few RE contacts which I trust state that any homes west end $500K range are not selling. The overstock new homes not selling.

It’s just a matter of time for price drops. Remember, the Ottawa Region has never really been exposed to any negative RE news. DENIAL!!!

2009 will be a year most will want to forget as it all shakes out. The US experts keep lowering their forecasts. Will houses return to their levels of 2003, 2001 or in case 1997 or 1992 in Detroit.

Me thinks in Canada, somewhere between 2003!

SELL – RENT – WAIT!

#68 TheComingDepression on 02.02.09 at 6:39 pm

Nanaimo is a JOKE. I spent 3 yrs as a realtor there. You will see in the spring, every single house on the market. The realtors are hillbillys. They leave lights on, don’t return calls, leave doors unlocked, walk through your house without taking their shoes off, write offers like a 3 yr. old, wear boots and hats when they hold open houses, don’t show up for appointments, show up late picking up clients, don’t return realtors calls for DAYS. Forget to put lockboxes on doors..I can go on and on. No wonder house prices are dropping. Nanaimo will drop MORE than any town in CANADA is my prediction!

#69 JET on 02.02.09 at 7:08 pm

For those interested, just added a chart showing the trend in expired, suspended and terminated listings in Toronto (GTA):

http://thenumberstheydontpublish.blogspot.com

#70 squidly77 on 02.02.09 at 7:10 pm

TheComingDepression
a friend of mine had his house for sale on the calgary market last fall..he left a couch and a small table behind as it may have been useful if a potential buyer was found
well my friend went to do a walk through a few weeks later just to make sure everything was ok..what did he find ? a realtor had moved a small tv into his houses and was sleeping on his couch ! and get this it wasnt even his realtor

#71 VictoriaB&B on 02.02.09 at 7:22 pm

#47 WJP

“”I don’t remember Ontarians showing disrespect to those from the West.””

…You are the single Ontarian who doesn’t…come’on, be honest…(I was a 40 year Ontario citzen.)

and the prejudice still exists too…Big Business was centred first in Montreal then in Toronto.

…You are hearing this first right here WJP…Vancouver will become the next Financial/Trade and Leisure capital of North America.

#72 Chris in England on 02.02.09 at 7:35 pm

#58
“Ireland in big trouble…my husband just spoke to his father in Co Sligo…His son-in-law’s brother built a 50,000 euro stable and is now having to send his beautiful horses to slaughter…”they are worth nothing can’t afford to feed them, can’t give them away”..he says 100’s of horse owners in the area are doing the same. Boy is my father-in-law mad at those” banker crooks”!”

I go over to Ireland about 4 times a year, and considered moving there about 8 years ago – but that coincided with massive real estate price rises which killed that idea. About 20 years ago you could buy a house and land in Ireland for very little, but once the jaws of the EU closed over them, they got their roads fixed for free and prices started rising. I live in commuter territory just north of London, but if I had sold my house in the past 8 years and bought in Ireland, I wouldn’t have got much change. Prices have risen so rapidly there I have friends who (last year) were intending to sell at a massive profit and move to Scotland! No idea if they did, as I haven’t been back since August, but if they didn’t manage it I think they are stuck. Ireland has been ruined by its flirtation with Europe. Their roads have improved but they have lost so much I hardly think it was worth it.

#73 Chris in England on 02.02.09 at 7:39 pm

And I don’t mean that “Europe” is responsible for any credit crunch in Ireland – that is a separate issue. Ireland was already ruined before the credit crunched.

#74 dd on 02.02.09 at 7:41 pm

#11 EW on VI,

Maybe you are right. I would leave the island for work but I wouldn’t sell.

MLS shows a lot of houses for sale on the island.

Calgary … different story.

#75 Cendrine on 02.02.09 at 7:43 pm

Thank you Midas, Chris in England and Andrew Toronto for those links!

Midas, I agree with your opinions. If anything, all the reading I have done in the last two months has convinced me that we are heading into deep trouble. I am trying not to get panicked about this. We are not in a ‘must sell’ situation but it would be preferable to have a smaller, cheaper-to-run house and retire the mortgage, especially since my spouse has retired. When the “financial feces hits the rotating cooling device” it would be nice to have some money/food set by and a generator!

We have another showing tomorrow (3rd in 3 weeks) – wish us luck!

Cendrine, holding on for dear life on this RE roller coaster

#76 jess on 02.02.09 at 7:45 pm

and then they cry protectionism!!!!!!!!!!some nerve eh?

Delving into the truth of corporate taxes has taken our Guardian team months. What they have found is truly shocking

But this we know: a third of FTSE 100 companies paid no tax in 2005-2006, and another third paid a minute proportion of their operating profits. Thanks to avoidance, HMRC says 12 of the UK’s largest firms “extinguished all liabilities in 2005-2006”. Scores more claimed tax losses. The area between tax dodging and reasonable offsetting – of pension contributions, research and development, preventing double taxation, new investment and legitimate reliefs – is the thick fog where lawyers and accountants make their millions. Between the spirit of tax law and its practice, fortunes are made.

http://www.guardian.co.uk/business/taxavoidance

#77 OttawaMike on 02.02.09 at 8:22 pm

Re:Ottawa market
Speaking with an assistant deputy minister this weekend about the prospects of the feds cutting staff as in 94-95, he brought up an interesting fact. The public service is in turmoil already trying to find qualified bodies to replace the mass exodus of retirees. “Under these conditions there is no way to cut any existing staff.”
I believe this bodes well for the capital’s economy but the house price price run up still seems excessive as Da HK kid describes in his above post. -15% “re-adjustment” in pricing within 18 months does not seem unreasonable. Many local optimists still expect to see a price rise this year..
What do you think of this market, as a former resident ,Garth?

#78 EW on VI on 02.02.09 at 8:28 pm

65 Depression. Wow that was rough. Did your meds run out?

At first I wanted to drop ’em and go toe-to-toe with ya, but I read your post again and I wouldnt have a problem with you re-phrasing to “Nanaimo realtors are a joke” seeing as you claim 3 years experience.

I only know one realtor from Nanaimo. Pretty, smart, friendly, married to upstanding logger. She’s lived all over NA and Europe and finally said nuts to that and moved back. If you know the other 499 well, OK……

But dont ever insult the place somebody was born and raised, and his mother, and his grandmother. That was breaking Garths rule of “disrespectful”. You did read the rules right? I guess if I’m third generation, I could qualify as a hillbilly though.

And Harmac lives again! Dont know for how long, but hand it to the 300 guys who bought in, found some partners and are takin’ a run at it.

#79 Suzukimum on 02.02.09 at 9:04 pm

Canadianoil,

You don’t live in a HDB flat, do you? Do you ride the MRT or drive a car that costs as much as my townhouse?

Singapore is one of the safest and cleanest cities to live, but it comes with a price.

#80 Simon on 02.02.09 at 9:45 pm

I love watching the British real estate porn where the twenty-somethings are shopping around for a place in the country and a rental property. Nothing like watching them sign on for upwards of a million bucks in real estate. Wonder where they are now? No doubt we have the equivalent here.

#81 Investx on 02.02.09 at 10:44 pm

#68 VictoriaB&B

…You are hearing this first right here WJP…Vancouver will become the next Financial/Trade and Leisure capital of North America.
————————————–

Why do you keep posting under different aliases, “Real Estate Expert”? While you’re at it, learn proper grammar.

BTW: On the cover of a recent Toronto Life magazine issue:

“Why Toronto will be the Next Global Financial Capital”

http://www.torontolife.com/covers/2009/2/

#82 Eduardo on 02.02.09 at 10:50 pm

I’d like to point out that according to the monthend stats the number of houses on the market in Calgary is less than 100 more than last year and the amount of vacant houses is in fact down.

Comments? Garth’s spring housing explosion is coming?

I heard of layoffs at Penn West. That being said they are in trouble and issued equity.

Squidly, stop spreading nonsense…

Garth, why isn’t squidly banned yet? I don’t think I’ve seen him/her post a statistic that can be backed up by any number and he/she just loves bashing Calgary.

“I have a friend who said he saw a hobbit buying a house and he negotiated it with a realtor who had no house and had devil horns and he told me that the hobbit bought the house for 5 dollars and a big mac because that’s what all houses in Calgary are worth”

#83 nonplused on 02.02.09 at 11:46 pm

#14 Kanata has lots of Squirrels

Don’t bolt the green energy to the house until everyone has one. I have been spending my leisurely days of under employment trying to devise ways to come up with effective portable systems that can simulate grid tie systems but still be loaded in the moving van and relocated, as happen to the average Canadian once every five years! What the world needs is a system that is as hard to steal but as easy to move as your refrigerator. I’m sure it’s not far away.

#84 nonplused on 02.02.09 at 11:55 pm

#23 Mike (authentic)

No worries on the stimulus package acting like a trade barrier. First of all, if the stimulus package does manage to raise demand for steel or some other product, it will offset some other demand. Second of all, none of the stimulus will actually get to the ground without being stripped bare by the usual corruption and waste. You just have to read the proposal to know. $8 B for public transit? Make it zero and be honest. It’s less than 1%. Other worth while initiatives like green energy and rebuilding the railroads got even less. This is pure pork, front to back, and won’t do anything but make matters worse.

#85 Peter Lawley on 02.03.09 at 12:01 am

Forest Park Real Estate Ltd. Brokerage in Ottawa would like to offer help in reducing commission for selling your home in this demanding time. I am offering listing rates of 1% for clients. Why? Because when I had a young family in the early 1980’s my mortgage was 22% and we suffered but survived and I would like to give back hope. We refer to other provinces but can list all over Ontario. Thanks to all of our past clients for their support.
Peter Lawley, Broker of Record.
613.288.4515

This is a commercial. Get lost. — Garth

#86 nonplused on 02.03.09 at 12:07 am

#29 lgre

Fact is they nail the shingles on the same way today as they did in 1970. If the modern houses lost their shingles I would attribute it to weather.

And modern RV’s regularly get towed at 100 kph into a 100 kph wind for a combined wind speed of 200 kph, and they don’t loose their roof. So you’ve only proven that RV’s are built better than modern homes too.

But seriously, anyone who would prefer a 1970’s house to a modern house just hasn’t seen them both built. The building materials may not be as good but give me a properly sealed 2×6 structure with R20 in the walls and R40 in the roof over the teepees they used to build any day.

#87 nonplused on 02.03.09 at 12:19 am

#41 North Vancouver Citizen

I don’t think many renters are attending financial forums unless they happened to have sold anticipating what’s coming. Generally people don’t go to a financial forum unless they have money to worry about; they go to the gym or the bar.

What’s your agenda? You have to have one because you are impervious to reason and selling an almost religious message.

I’ve flown over the Pacific North West a couple of times recently and I can tell you the number of paved and then abandoned subdivisions around Seattle is striking from the air. Grass is growing on some of the abandoned lots!

BC is toast man. Get used to it and prepare!

#88 nonplused on 02.03.09 at 12:34 am

#54 East of Eden

Probably what is happening to Mattamy is the same thing as we are seeing here out west. The price of used homes is still so high that their profit margins are only reduced, not eliminated. They will continue to build until it is unprofitable, and that can only mean they bring the entire market down to their marginal cost of production. But since there are so many used homeowners waiting for better prices, when Mattamy finally throws in the towel there will be a huge unsold inventory in the hands of speculators that think they know better than the pros.

You can’t beat the builders folks. They have the numbers and the experience. They are using this “sellers strike” to get as much inventory as they can off the books.

#89 nonplused on 02.03.09 at 12:42 am

#68 VictoriaB&B

You are hearing this first right here: Vancouver and BC will be what they have always been: The pot production capital of North America. Don’t see any reason why that would change unless the industry becomes mainstream.

#90 Carole AB on 02.03.09 at 12:47 am

Chris in England

My husband corrected me, his brother in laws brother? has not yet sent his 30 horses to slaughter he says he would let them go in the hills first. I don’t know if that makes me feel any better? My husband says if things get really bad here in Alberta we could always live off the land there. My sister has also joked that we could live off of the farmland they have here in AB…the same farm where in the Depression her Mother- in -law’s father took 6 pigs to market and got a box of apples. This is sounding too much like Ireland today with the horses…Yikes. I think I want to go back to sticking my head in the sand for a while….

#91 kc on 02.03.09 at 2:35 am

87 carole…. not trying to be gross here but, horse meat is actually very tasty delicacy. post to them to look into talking to deli owners. Tough times = tough measures.

#92 Da HK Kid on 02.03.09 at 3:35 am

Ottawa should go 25% easy! Refuge in the Government is an option but the housing bubble nationwide is mandatory! Remember this crisis has already wiped out 40% of the worlds wealth!

Prediction – $500K West End Home listed today will sell for $450K today if bank will approve. Mid 2009, same house $405, end of 2009 $365K. $350K Q1 10 and 5% more to bottom feeders through 2010.

Recovery very slow for 3-5years. Flat year 1-2.

Just my opinion!

#93 Chris in England on 02.03.09 at 7:25 am

Carole AB, horses being turned out into the hills could always be re-collected in better times, though perhaps not always by their original owners! Those living in rural areas in Ireland could take Garth’s advice, and large proportion of those in cities could always return to the country where they have relatives. Ireland’s population is pretty small and there is plenty of unused space. Pity us poor idiots in England though – we are all full up with nowhere to turn.

My house is for sale at $70,000 less than it was valued at a few months ago, and because we have lived here for 15 years and will more than double what we paid for it, we can drop by another $30,000 in negotiations. I aim to be out of here by spring and moving to Ontario – something that has been in the pipeline for 5 years now.

Garth, having almost finished your book, and read the advice about hiding safes or even cementing them into the basement, what advice would you give for those of us renting property and waiting to buy? I can hardly cement a safe into someone else’s basement! Ditto a similar question about generators. How portable would a generator for a decent-sized country property be, and could it be taken up and moved when we eventually buy a place of our own?

#94 East of Eden on 02.03.09 at 11:17 am

HK Kid – wow, that’s an obscene increase in the price. I remember being shocked last summer when I visited a friend’s church in Westboro. There were some new townhomes going up (ruining the look of the area, BTW) and the price started at 400k for an 18-foot wide home. I was stunned. That ugly tower that went up a couple of years ago – overlooks the triansitway – started around a half-million for one of the lower floor condos. It is nothing but robbery if a home costs 50k to build but the builder can get away with 200k and gets it. I wish there were caps on the mark-up. I purchased my own townhome when it was a hole in the ground. The price of my model increased by over 100 per week – as the home neared completion, the market value increased. I have an end unit and I paid 148k for it in 1999. One of my neighbours bought an inside unit for almost 200k because he bought it at the end of May. It’s nothing short of highway robbery. MPAC now values my home at 259k which is a total crock. I love my home but it’s not worth that much in reality.

Nonplused – you’re most likely correct. I find it very odd that Minto seems to have left the building, so to speak. At one time, that’s all you saw – Minto homes going up all over the place (mine is a Minto). Kanata used to be Tamarack, Minto and one other name which escapes me. Now, it’s all Mattamy everywhere. And they have no shortage of buyers. My friends’ younger daughter and son in-law just moved into that new area in Barr Haven – Bridgestone – into a half-million “starter bungalow”. They’re both under 25 but he can afford the home easily. A starter bungalow at a half-million dollars!!!!!

My own mother is sitting on a half-million dollars in real estate – her 1,300 square foot bungalow in Burlington is worth that – and we’re in a recession????? This is total insanity and it appears to me that the market is being manipulated. Believe it or not, realtors come to her and her neighbours’ doors almost monthly asking them if they’d like to put their homes up for sale because they have waiting lists of buyers. The market has gone insane.

#95 Joe on 02.04.09 at 3:09 am

Dear Garth, are there no sensible real estate buys out there right now? A friend of mine is involved in a residential development project in Victoria right now, building 700 – 800 sq/ft ‘no frills’ one and two bedroom condos (ie no balcony, no elevator etc etc) with a targeted price at the bottom of the range (~$160K). In todays and yesterdays day and age of ridiculously priced shoe box condos, this doesn’t these don’t sound too bad. Could this be a good real estate investment in today’s bear market?

#96 Bill-Muskoka (N.A.M.) on 02.04.09 at 9:24 am

So, while Obama admits ‘I screwed up’ (A phrase that would result in death for Bush or Harper, Dim Jim, or most MP’s, if they even tried to get it out), we find that Steve has gotten coverage for a photo-op he will undoubtedly despise Iceland elects Gay PM…How many can the world take?

Well, according to the Colbert report we have Numero Duece. LMAO!

#97 linda on 02.05.09 at 11:27 am

Bill, I liked your ideas on different types of shelter and living arrangements. A man in my county-David Masters- is ‘living off the grid in a ‘yurt’. A timber-framed, canvas-covered dome. He teaches it also through The Luna Project, at lunaticadventures.ca. I just read an excellent article about him then read your comments. Top of the day to ya!