Crumble in Kelowna

The event some bloggers tried to crash. (And did.)

kelowna-16

There are three immediate crises at the moment. Two more are lurking, latent. It’s the perfect storm.

The financial crisis has levelled trillions in wealth and had its zenith last fall. The real estate crisis will destroy trillions more, in a process which is just starting in this country. The economic crisis is now deepening and worsening it all, with job losses we have not seen for decades. And layered behind is the climate change crisis which will forever change how we use energy and where we live, and the inescapable and costly effects of demographics – our aging population.

As I explained my hypothesis to two audiences in Kelowna on Wednesday, the evidence was all around.

In this town, housing values have been dropping by thousands of dollars a month for most of a year now. Sales volumes have fallen off a cliff and I can’t find anyone who believes anything but crashing prices lie ahead. Worse, there’s snow here. Lots of snow. Inches of it fell a few days ago, and this winter is going down as one of the worst on record.

This, I’d say, is no fluke. Just the latest evidence that climate change is coming even to the Okanagan, where everyone can expect exactly what they did not buy into – cold, snowy, wet winters and torrid, arid summers turning the pines, already stressed by the beetles, into erect kindling.

At the same time as I was standing to do my thing, Hudson’s Bay was announcing 1,000 job cuts – the first of many waves of layoffs likely to hit that company. Our iconic store is shedding five per cent of its workforce, joining a long line of retailers who may be on their knees later in 2009.

In fact, the news from TD’s economists could not be more grim than it was this day. The bank’s Derek Burleton, a guy I know well as a moderate, was saying we should expect at least 300,000 more jobs to be trashed this year. That number equates to about 3 million in the United States, surpassing the 2.6 catastrophic jump in the unemployed there in 2008. Jobless people don’t buy cars or houses, and they scare the hell out of the rest of us. There but for the grace of God….

The perfect storm.

Big crowds in this place. There was a cancellation list for the past two weeks I’m told. And I’m very proud to say a few people who hang around this blog tried to crash and bamboozle their way in. I would expect no less of my flock. Bless you.

Once again, it is real estate and its now-inevitable demise which is gripping folks. Places like Kelowna have felt insulated from the outside world, because of all the baby boomer wealth tripping in from the snowy east and the nouveau riche sliding over the rocks from Alberta. But, of course, that is ending. People don’t move into those pricey houses hanging over Lake Okanagan when they can’t sell their digs back home. Reality is also arriving in the form of lost trucking jobs and shuttered plants.

Thursday I am flying back to Vancouver, for the last event of this trip. The organizer there tells me the hall they booked filled, so they got another one. Now it’s full.

These are times to pay attention. I’m pleased so many are. My journey is lightened because of it.

bandit-small But I miss Bandit. The storm can wait.

115 comments ↓

#1 islander on 02.05.09 at 1:37 am

Actually, I can’t believe HBC has survived this long. Eatons is long gone. Does anybody remember Woodwards? The Bay does everything worse than those stores ever did but somehow survives. This has always amazed me.

#2 Glenn on 02.05.09 at 2:06 am

How long till Kelowna looks like this? Foreclosures Now One in Five Home Sales http://moneynews.com/streettalk/home_values_report/2009/02/03/177876.html

“Home values in the United States fell for the eighth consecutive quarter, declining 11.6 percent during 2008 to a Zillow Home Value Index of $192,119, according to the fourth quarter Zillow Real Estate Market Reports, which encompass 161 metropolitan areas.”

#3 Zoronqueen on 02.05.09 at 2:38 am

Garth,

Back in Deadmonton, and got to “crash” your talk in Surrey even though I wasn’t registered and met your lovely wife??

You presentation was very funny and worth the trip out there. You let it easy on these folks as most were glazed over.

Had a heated discussion on the way to Abbosfort airport with my dad who currently owns a house in Coquitlam and Pitt Meadows. He can’t see how 1.5 year of inventory would make house prices go down. He and my uncle the realtor insist that real estate prices always go up in Greater Vancouver and and that we bloggers misuse the annual rate of 3% in real estate as Olympics will save the cities….

Thanks to you and the bloggers for altering me to the real estate melt down. We listed our old home 35K below the assessed value and have 3 offers. One hopefully will go through….

Also what I got out of you presentation was diversification. A lot of people especially boomers are putting all their eggs in one basket ie. real estate. All those gold huggers too did not get your point…

Anyways to Real estate expert or North Vancouver….
1 of 3 shooting in Greater Vancouver…
http://www2.canada.com/topics/news/story.html?id=1249861

Also in response to the guy who was asking about selling on the Island. IMO–If he would either lower the price 5% below the lowest listing price of a comparable house, he might get a bite. Otherwise keep the property for another 5-10 years. In this Edmonton market I will not be buying any home unless it’s your dream home that you plan to live in until retirement….

Also be prepared for negative equity. Right now the house we live in already is 50K below where we bought it 6 months ago. We are planning to stay 10+ years in this home so hopefully the economy will eventually recover and we will be back to square one….

#4 Mike (authentic) on 02.05.09 at 3:19 am

Eatons: I loved that store, they and The Bay truely has/had the last essence of great customer service, no quibble guarantee and top-notch quality products. If you wanted to buy something without worry (and had the money to do so), you went to Eatons.

The Bay: I was very sad to see it was sold to an American company a few years ago, Canada’s oldest company leaves Canada. What a shame on the gov’t to allow it after 355 years. I still hope they don’t go though.

Anyone remember Simpson’s? Or Wollworths?

Mike

#5 Mike (authentic) on 02.05.09 at 3:22 am

Kelowna, BC.

No jobs and if you can find work it’s at 1/2 the going rate of Vancouver or Calgary (“sunshine tax”). A fogged in airport, brutal tourist traffic in the summer, 40°C temperatures in the summer, stupidly over priced RE, clouded in with no sun in the winter (SIDS warning!).

But the Okanagan feels like home to me. Lucky enough to live there for 2 years, but you can “live” there and “make a living”. Retirement, sure. Anyone other, you better be retired because it doesn’t offer much of a future for young career people.

Mike

#6 East of Eden on 02.05.09 at 4:51 am

I’m not surprised by the Bay’s decision. In 1978, I joined the company as a junior manager, planning to build my career with the company, as I had worked part-time since I turned 16. I loved my work and loved the company. Then, at the beginning of the 1980s, a decision was made at the very top of the hierarchy – a decision which cost the company millions at a time when the economy was tanking and interest rates and inflation rates went into double digits.

The company’s knee-jerk reaction was to lay off its most junior managers and I was one of them. Since that time, the company has struggled and made some very bad decisions, not the least of which was to become a high-end fashion store and to delete profitable departments like hardware, Baymart and HABA which didn’t fit with the new “image”. Well, as it turns our, the fashion business is mecurial at best and you can’t take “image” to the bank and deposit it. But, the company continued with its high-end ways and profits kept on sinking.

Look what happened to that other icon – Eaton’s. I remember when it went high-end: I needed a couple of pairs of ordinary black dress socks and scooted over to Eaton’s. The least expensive socks were $11 per pair – and this was in the mid-90s. There is no way I’d pay that much for a pair of socks. So, off to Wal-Mart.

The Bay, unfortunately, was not responsive to changing times and management changed the store from one which all Canadians could patronize to one which only the well to-do could afford. It saddened me to see this Canadian icon sold to an American firm and it saddens me even further to realize that it has once again passed the point of no return. I have the feeling that it will go the way of Eaton’s.

Islander – I do remember Woodwards from when I lived in Calgary in 1978. That was a great store and the grocery department was really great.

We criticize Wal-Mart but that company earned its success. It took Zellers years to smarten up and it will take years for it to recover from its blunders. We have a chain in Ontario called Giant Tiger – it is succeeding beyond all expectations. Why? Management realized that even “rich” people like bargains. The merchandise is not the best but let’s face it, why would I pay twice the price for a container of laundry detergent somewhere else?

The only chain which seems to be succeeding by going against the trend is Shoppers Drug Mart. Have you checked their prices lately? Holey moley – talk about high prices. And, yet, the store is succeeding and the store is planning to add an even more up-scale spin-off to its chain. I guess there are a lot of fools out there who want to be robbed of their money.

#7 Ed79 on 02.05.09 at 6:01 am

Perspective of a first time buyer:
About 2yrs ago we had saved up a sizeable deposit. I wanted to do more traveling, my untraveled wife wanted to buy a house. Ended up convincing her to take a year off, blow $65k of our savings and backpack around Asia, Europe, N. America. There was never a chance of us regretting the decision, but the real estate meltdown just reinforces my view that money is for spending and enjoying.

Is that financially irresponsible? Have never been in debt, apart from $18 interest on a LOC whilst waiting for a transfer. 2 years of working in credit collections for Citibank (evenings whilst at uni) has meant I only spend what I can afford.

Meanwhile we now sit on the sidelines. We planned to buy in Nov. 08, then discovered this blog, then proceeded to watch all three houses on our short list drop by $60 – $120k over 3 months. Each was re-listed as a new listing, and it’s only by saving the original listings that I convinced myself I wasn’t mistaken.

Plenty of evidence of ‘phantom offers’ or at least phantom viewings. One of the places is just down the road from where we rent. In the three months I’ve been following it, I’ve seen an agent and buyer only once (and I work nights, so home in the day). Called to arrange a viewing and was told that there are a couple of others booked in for the day I want but she might be able to squeeze me in. Arrive to find a Chinese (HK?) couple chatting to the Chinese RE agent in cantonese, say goodbye and drive off. Looked suspiciously like friends/relatives rather than prospective buyers. Then the agent started to tell me how she’s been so busy with six viewings in the past few days and they are expecting a few offers so I’d better get in quick. Now a month later the place is still on the market.

Before prices started falling we could just afford to buy the cheapest place in the area we wanted, as long as it had a mortgage helper. Now that list prices have come down about 15% here, and offers 15% lower than that would probably be accepted, we are in a pretty good position as buyers. However we don’t want to throw away our money – and with no rush to move we’ll be sitting on the sidelines until the dust settles. I do think there are quite a few buyers out there. People were buying like crazy when prices were at this level on the way up, so once confidence is restored I think places will start to move reasonably quickly. As long as everyone still has their job…

#8 vtj on 02.05.09 at 7:02 am

From Bloomberg: Housing prices to reset to 1997 levels?

http://www.bloomberg.com/apps/news?pid=20601213&sid=a8mdg7z0u7Dw&refer=home

#9 Tom on 02.05.09 at 7:16 am

Garth
I move industrial machinery for a living. I have a somewhat unique perspective of the shuttering of manufacturers. It is real and it is wide spread.
When I walk through plants looking at machinery to be removed, the looks I get are haunting.
What am I doing to survive?
Improving security for the potential or inevitable crime wave I assume will hit.

#10 Sail1 on 02.05.09 at 7:23 am

We will see if this is a new trend.

The Real Estate Council of Ontario has frozen bank accounts and is investigating accounting irregularities at three Re/Max Executive Realty Inc. offices and its head broker.

http://www.thestar.com/Business/article/582576

#11 a renter on 02.05.09 at 7:25 am

Garth et al,

Was checking out Halifax real estate and find it remarkable when compared with Toronto / Calgary / Vancouver. Here in Toronto people still expect 900k for a shack & 1.5M for something nice. But not in Halifax…Check out these random examples from MLS:

Oceanfront (shack, but nice property) less than 1/2 hour from city for under 400k…

http://www.realtor.ca/propertyDetails.aspx?propertyId=7039037

Gorgeous 3500 ft lakefront luxury home for under 600k…

http://www.realtor.ca/propertyDetails.aspx?propertyId=7436513

Lived out there for a couple of years in the ’80’s during the offshore boom and I would go back in a minute if I could. Just reaffirms for me that our real estate prices are out to lunch

Cheers!

#12 North Vancouver Citizen on 02.05.09 at 7:29 am

Friends & Countrymen

1/
…Compared to the other G7 countries, we are the luckiest to live where we do…we all have food, shelter and safety.

We are the envy of the world…really.

…So why do we take all of the above for granted on this chat board?

I predicted…”Manifest Destiny” would crop it’s ugly head again after a + 100 year slumber.

…Is it just a matter of time?

Here is a Yahoo article, guaranteed, the first of many…

“”Making Canada Our 51st State Could Make It Easier to Buy American””

http://seekingalpha.com/article/117807-making-canada-our-51st-state-could-make-it-easier-to-buy-american

and I continue to predict…Vancouver will become the new Financial/Trade/Leisure capital of North America.

2/

A Holy War is about to break out in the Middle East.

3/

What can China do with 100’s of millions of unemployed workers starving in City streets?…..War

4/

What can India/Pakistan do with 100’s of millions starving unemployed citizens starving in it’s city streets?…War

5/

What can North & South Korea do with 50 millions of starving citizens?…War

6/

What can Russia & Ukraine do with 50 millions of starving unemployed citizens?…War

Europe is falling apart, what can it do?…War

7/

Like I said, consider yourself very lucky we live where we do and that the world looks with envy at Canada and it’s citizens.

Count your blessings…really

#13 pbrasseur on 02.05.09 at 7:47 am

I think you are right on the money with your predictions concerning retail stores.

The other day I was driving down some highway in the Montréal suburbs seeing nothing but an incredible number of shopping malls and shops. I remember thinking how in hell can so many stores all manage to survive? Answer, this is utopia and they won’t.

#14 Drummer on 02.05.09 at 8:04 am

Toronto’s January numbers are out:

“The Toronto Real Estate Board reported 2,670 sales in January 2009, a 47% decrease over the 5,075 sales reported in Janauary 2008. The average home price in the Greater Toronto Area was $343,632, compared to $374,449 last January. The median price was $303,000 compared to $319,000 last year.”

Ouch.

#15 Dave In Kelowna on 02.05.09 at 8:27 am

We’ve gotten a lot of snow this year, but I doubt it’s the worst on record. There was a cold snap in December but before that it was fairly mild. The couple of inches we got last week is typical.

Not that I’m arguing against climate change, but I don’t think our winter this year is really strong evidence for it.

#16 Irene A Gates on 02.05.09 at 8:31 am

Garth, you overlooked another lurking crisis. Along with climate change and demographics, add in peak oil. The current global recession is postponing it, but it will be back again as soon as the economy recovers. I make it three crises now, and three to come.

Irene

#17 Gord In Vancouver on 02.05.09 at 8:34 am

Garth, there’s another crisis that you oversaw – mislead recent immigrants.

While our neighbor to the south was suffering, politicians up here assured everyone that our country was isolated from doom and gloom elsewhere. Factors such as high oil prices, the 2010 Olympics, and our supposedly “tougher” lending rules were expected to keep Canada from suffering America’s/Europe’s fate.

Retiring baby boomers were supposed to keep the labor market respectable.

Many people in other countries heard what our politicians said, bought into it, and decided to move here. Our country’s declining birth rate makes immigration necessary but, unfortunately, newcomers who can’t replace retiring medical industry employees will be in for a rough ride – more so if they’re visible minority.

If the current Canadian recession lasts more than a year, our country could end up with a mother of a credibility problem within the global immigrant community.

#18 dd on 02.05.09 at 9:13 am

#1 islander
“I can’t believe HBC has survived this long. Eatons is long gone. Does anybody remember Woodwards?”

Yes … one word … Walmart.

#19 double mike on 02.05.09 at 9:35 am

G&M headers snapshot:
================================
Bombardier cutting 1,360 jobs
Facing slowing demand for jet orders, aerospace unit lays off 1,010 temporary workers and subcontractors and 350 permanent employees 9:26 AM 7

Certicom says RIM bid is superior3

Bank of England cuts rates to record low

Buffett invests in Swiss Re as insurers hurt

He blew the whistle – and no one listened
(Madoff scandal & SEC – dm)

Economic crisis: The shakeup Canadians need?

Report on Ontario’s prosperity urges a transition to a new creative economy from the dying industrial age

Salt shortage gives people the slip

Where there’s fire, there’s smoke
(“Faced with record wintertime smog and dire warnings over health hazards, the city is moving to ban the installation of wood-burning stoves and fireplaces.” – dm)

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

Sure RE will grow like nobody’s business.

It’s not a squirrel stew time. It’s a lemming stew time.

#20 U.B.A.B. on 02.05.09 at 9:41 am

Went to watch “Taken” at the local Silvercity last night – there was a Re/Max Ad on the screen before the previews stating:

“The Stock Market has lost 50% over the last year,
Real Estate is the only good investment.”

I started yelling at the commercial so much that I almost got booted out of the theatre!

#21 malbadon on 02.05.09 at 9:58 am

my mom was going to take a few of her friends to your Kelowna talk, saddened to find out it had sold out so they couldn’t go.
Sounds like it was a roaring success!

#22 CalgaryRocks on 02.05.09 at 10:09 am

In Russia they spend their money as fast as they get it because otherwise inflation eats it away.

Yet on this site, a lot of people have all of their assets in little 0s and 1s at the bank.

I think a paid for house is still the best way to weather this storm. When/if hyper-inflation hits, all savings will be wiped out. This has happened before, surpisingly often, actually, so why not in Canada?

Buying gold is one way to hedge but gold is fickle, it can cut both ways, can be stollen, confiscated and is not very warm in the winter.

Something to consider. And even if there’s only a 5% chance of this happening, it is still worth insuring against.

#23 vtj on 02.05.09 at 10:16 am

From Bloomberg online: Home prices to fall to 1997 levels?

http://www.bloomberg.com/apps/news?pid=20601213&sid=a8mdg7z0u7Dw&refer=home

#24 East of Eden on 02.05.09 at 10:16 am

Ed79 – home ownership is not for everybody because it requires maintenance and recurring expenses and some people just don’t want that. This is fine – we are all different. The main thing is that you are comfortable with travel etc. I have known two people who live to travel. They each reside in one room of a house (not the same house – they don’t even know each other) which was divided into suites and they work for 8 months per year, save every dime, and then travel for four months. The both love their lifestyles and cannot ever envision themselves in a permanent home. I am the complete opposite. I don’t like being away from home for more than a week and I love puttering around my home and yard.

Where people get in trouble is trying to live two lifestyles – an expensive home and expensive leisure. The average person cannot afford both and thus, end up deeply in debt. I saw it in my own neighbourhood when I first moved here – during the high tech boom. Lots of young couples with McMansions, SUVs, boats, snowmobiles, the de rigeur Columbia sportswear, etc. and a year later, the For Sale signs were up. At the time, the housing boom was in full force so they sold their homes easily but they had to start over.

I envy you and your wife because I’ve always envisioned myself hiking through Northern Canada – Nahanni, the Yukon, the Arctic; and countries like Iceland and Greenland – I like colder climates but I know that until I change my mindset, I wouldn’t last more than a week away from home. Besides, I can’t afford it, anyway.

#25 Gary Trepanier on 02.05.09 at 10:23 am

Hi Garth,
We attended your presentation in Kelowna last night and enjoyed it thoroughly – Thanks.
Global warming is here in the Okanagan. I don’t know what this is “Dave in Kelowna” guy is talking about that we only go a couple of inches of snow in Kelowna last week. I got a foot at my house, it took three hours to clean the driveway.
Still a great place to live though. We were fortunate enough to move here 11 years ago at a low point in the real estate cycle. I agree that decent work is hard to find here.
Come back soon. Thanks again.
Gary T

#26 Amy in the 'Peg on 02.05.09 at 10:30 am

#6 East of Eden – Just moved to the “Peg last year and discovered Giant Tiger. Love it, Love it, Love it!!

and yes Mike, some people still remember Wolworths and Woolco, we used to have K-Mart here recently SAAN and The Red Apple have gone the way of the Dinosaur.

#27 Ste-Anne-de-Bellevue on 02.05.09 at 10:36 am

Foreclosures in the province of Quebec jumped by 39% in 2008 compared to 2007. In January 2008 alone 252 foreclosures (up by 30% compared to January 2007).

link is in French: http://www.radio-canada.ca/nouvelles/Economie-Affaires/2009/02/04/003-saisies-immobiliers.shtml

Houses have been sitting on the market for well over half a year here. Prices went down about 9% but not enough to get people to buy.

#28 Worried in Estevan on 02.05.09 at 10:46 am

Garth and everyone,

I’m sorry to use this blog but I need help and advice. I bought a 3 bedroom townhouse in Estevan, Saskatchewan last summer for $245,000, with $50,000 down payment. I moved here with my husband and year old daughter because my husband got a job. Now I’m almost 9 months pregnant with my second and terrified about what our house will be worth when we try to sell it in about 2 years, which is the plan.

There are no houses for rent in Estevan. Its an oil boom town and there is a shortage of homes. Many people here live in hotels. I desperately tried to find a place to rent before we bought the house last summer.

Now we are considering selling the house. I would move with the kids to Regina or Winnipeg (where my family is) and rent. And my husband would have to stay in Estevan and rent a room in one of his coworkers homes.

But is it worth it to separate my family when we will have 2 very young kids? What will happen to these former oil boom towns? We plan to move from Estevan in about 2 years anyway, so should we just live apart for now? Or take the risk and keep the house?

Any advice would be very much appreciated.

#29 linda on 02.05.09 at 10:53 am

I know how you feel about Bandit, Garth. Priorities. Glad you’re able to do what you do for the People though & Bless you! linda.

#30 eddy on 02.05.09 at 11:10 am

“The Stock Market has lost 50% over the last year,
Real Estate is the only good investment.”

if you buy a house, pay a mortgage, and wait for price appreciation, the amortization schedule usually eats any ‘profit’. this type of ‘investment’ activity would be like buying stocks and paying with a visa card and making minimum payments.
but historically, real estate is a good way to preserve capital.

#31 vtj on 02.05.09 at 11:16 am

#12 pbrasseur:

I agree with you as well that Garth is unfortunately right on the money when it comes to the demise of many of these big box stores.

I bet you were driving along the 440/640 in Laval or along the 40 out to Vaudreuil. I too am amazed every time I drive by. Have real salaries or population densities in the overall area grown to justify this growth? Absolutely not. I can only conclude that all this growth in big box stores was fueled by debt.

A friend of mine is a bank branch manager in one of the wealthiest communities in Montreal’s west-island. Without going into specifics, he mentioned that I would not believe the extent to which his clients in general are indebted. I’ve been saying to family and friends for many years now (as their eyes glazed over) that this crazy “don’t pay for 24 months” mentality was going to end in a bad way. It’s looking more and more like many of us on this blog who share this opinion are unfortunately being proven right.

#32 Marc on 02.05.09 at 11:29 am

How can Kelowna or B.C. for that matter have a climate change crisis. Is our carbon tax not effective for curbing green house gases? I thought carbon taxes were the solution to climate change, so since ours increased Jan 01, then we should be better now then we were a year ago, no?

#33 Larry on 02.05.09 at 11:31 am

More bad news from a once booming Celtic Tiger.
http://www.rte.ie/news/2009/0204/employment.html
Not much better in the north http://www.rte.ie/news/2009/0204/nieconomy.html
and still the denial river flows here in Alberta. Just finished reading your book Garth, excellent read and i pray some of the advice will not be required or God help us all.

#34 Jelly on 02.05.09 at 11:45 am

I used to shop at the Bay years ago and just this year started buying regularly there. A couple things they do right, they have amazing sales at times!
In January I bought Gordan Ramsey pots for 65% off of retail price! I was very impressed, they let you use coupons on top of sale items which does not happen often at department stores. I do not purchase much there at regular price, I always find the deals since they have a lot of sales often. Also, it is true that they have a no quibble return policy, it drives me crazy when cashiers give you a hard time over returns.
I had returned a bunch of items for a wedding at Michael’s and the manager actually said TWICE, “I have to do returns for this HUGE return” in a really disgusted voice and rolled her eyes at coworkers. I said, “Well excuse me, that’s why people buy a lot of things from your store, so they have the option of bringing it back if it does not work out for them!” No apology, nothing, and she was a MANAGER! Expect that place to go belly up, they are awful with returns.
Wal-mart used to be excellent with returns and now they are very picky and need a receipt which they never used to. I do not buy there as much anymore as I frequent the Bay and Shoppers Drug Mart.
Shoppers has this great point system that you would be SO suprised how much you save. If you go in on days for 20X the points, I have calculated that if you redeem your points on the special days that give you $50 for free in products, it works off to half off! Not bad for a drugstore that you often need items from…

#35 Rhino on 02.05.09 at 11:52 am

On West Island malls….

Many went up to support new subdivisions, with shiny new McMansions, and townhouses. If you enter the actual parking lots, there are lots of spaces close to the stores. Some are even putting stores in the back of the lots to try and generate more rent income.

Wander around inside, and there is no pushing nor shoving with all the space. The level of personal service has improved significantly – you almost have to beat the sales people away!

To top it off… last week while buying a printer cartridge, the vendor said “pay cash and pay no tax”.

Many folks work in 2 or 3 stores to get a full 40-hour week of pay. ALL of them are at risk with the EI program structure, since the individual jobs may not have adequate hours, and if one is lost, may not qualify for EI benefits because of the other. Add to that, the amounts deducted from EI from other work, means these folks are about to encounter serious problems.

The retail layoff situation has only begun, and in smaller shops, owners have to lay off staff to survive, and are now forced to work 80++ hour weeks, 7 to 7 or 7 to 9 Monday through Sunday. Burn out time…

Add to that, the number of service job – McJobs – flipping burgers or restaurant service, and the story repeats.

Our movement to a service based economy is dependent on folks making enough money to buy services. As we watch our good paying manufacturing jobs disappear, it was just a matter of time before there as a HUGE oversupply of retail and service/restaurant providers.

And, we had a government who worked 14 days from June to January… I hope you who voted them back into power in October are waking up…

We need to shift to a green economy. We need to invest in alternative energy. We need to finance innovation by taxing old consumptive technologies – not just hide the carbon with dubious capture plans. We need to be manufacturing these new machines and equipment. We need to think about the future and reduce dependence on the past. For example, in a CNN report, every new wind turbine creates (approx) 4.8 jobs – and 3.2 of those are passed overseas to foreign companies actually making the windmills.

Unfortunately, that takes leadership – something we do not have in the present government.

The FACT that the employment figures over the past 2-3 years have been dependent on retail/service jobs is significant. Unfortunately, when these jobs lost, many folks will not be considered in the cooked-up employment figures designed to understate the problems.

#36 Rhino on 02.05.09 at 12:03 pm

30 Marc on 02.05.09 at 11:29 am

Twist up another one Marc and sit down and think. Unfortunately, one province is not enough to have much effect. We need the same type of thing on a national and international scale.

Unfortunately, the sheeple scream about a couple of pennies on their gas bill, do not want to change their lifestyle to help the planet, do not want to put on a sweater in winter inside and insist in keeping the house at 25C+ for that summertime feeling.

You may be interested to note, that Oz, the land down under, have been experiencing UNUSUALLY significant temperature increases and drought. Temps in Melbourne area according to a pen pal has been in the 40-42C range for over a week, causing problems with rail lines, brownouts, etc. etc.

Back on my soapbox… we need to be part of the solution, not part of the problem. We need to invest MORE in new greener technology, and TAX THE HELL OUR OF CARBON!!!

Yah.. I know… another ex-hippie radical. I just happen to care about our planet, and recognise everyone should be part of the solution. Time to take care of our Mother – Earth.

BTW, climate is a system, with warm air displacing cold and vice versa. Take a look at the unusual cold weather happening in typically warm climate areas. Then… THINK!!!

#37 Dave on 02.05.09 at 12:16 pm

i enjoy reading this blog but I have one question which is slightly unrelated, how come all comments and questions are directed at Garth? I mean, he responds to 1% of them.

Anyhow, I’ll be a sheep and follow the trend…… – Garth I trimmed the toe nails this morning.

No need to respond.

thanks

You came here to say that? Get a life. — Garth

#38 CalgaryRocks on 02.05.09 at 12:29 pm

My 1st year in Canada was in 1980. I remember huge snow banks and cold weather.

This year, I was there for Xmas. Huge snowbanks and cold. Climate change has skipped Quebec! Good job guys!

#39 Dave on 02.05.09 at 12:33 pm

You came here to say that? Get a life. — Garth

oh, come on. I read through everything and thought I’d add some humour somehow.

I do get a good response rate from ya though!

#40 Sudcouver on 02.05.09 at 12:41 pm

Does anyone else find it amusing that what used to be referred to as “global warming” is now referred to as “climate change”? Could it be a result of the earth cooling for the last 12 years, and the propagandists getting worried about people cluing in?

We now know climate change makes some regions warmer, others colder, desertification in some, more moisture in others. It all comes down to changing weather patterns which are primarily affected by ocean currents causing wind and temp fluctuations. Rising water temperatures and diminished ice packs are what humanity needs to be concerned about, and these are very tied in to GHG effects. If you are a climate change denier, the door for dinos is on your left. — Garth

#41 ted on 02.05.09 at 12:47 pm

I love this site and the comments but please enough of the global warming stuff. Its a doomsday cult. Its funny everytime something happens to shake peoples belief everyone starts worrying about every possible problem. so people here are worried about global warming, peak oil. Don’t forget the unix year 2038 problem, luckily civilization survived y2k. And of course the 2012 end of the world predicted by the mayans.

#42 squidly77 on 02.05.09 at 12:49 pm

bubble..what bubble

No housing bubble in Canada: Flaherty
http://www.financialpost.com/story.html?id=659488

#43 Chris S. on 02.05.09 at 1:08 pm

Garth, I’m glad to hear your trip to Lotusland has been so successful. It seems like your message is reaching more people now than it did when you sat in the House. This is a good thing, and I hope you feel good about it too. It’s important to be able to set priorities.

As an aside, the following is a grammar lesson for those who don’t know the difference between “it’s” and “its”.

Contraction – IT IS == it’s
e.g. “It’s cold outside.”

Possessive – its (note: *no apostrophe*)
e.g. “Its market is depressed.”

This concludes the public service announcement.

You forgot possessive plural – it’s, e.g “housing markets’ demise.” — Garth

#44 North Vancouver Citizen on 02.05.09 at 1:32 pm

Future ex Pat

“”You have essentially described a BUBBLE in the USD. One that will pop just like every other bubble.””

I submit to you the game of “Hot Potato” and the inevitable outcome.

…and what do you make of any other currency?…Gold?…has no real value either.

Don’t forget….the U.S. dollar is backed by missiles and the largest armed forces…hmmmmmmm

#45 dd on 02.05.09 at 1:33 pm

#28 eddy

“Historically, real estate is a good way to preserve capital.”

Sure it is, however, there is a time and place to buy real estate. Real estate is great in a steady incline market.
Real estate is not great in a steady declining market.

#46 macs on 02.05.09 at 1:52 pm

No housing bubble in Canada: Flaherty
http://www.financialpost.com/story.html?id=659488

I can’t believe it!!! There is evidence all around! What the hell man!

on a happier note… Garth, you and Michael Moore should be making the next documentary.

mc

#47 dd on 02.05.09 at 1:52 pm

#21 CalgaryRocks

“When/if hyper-inflation hits, all savings will be wiped out. ”

Look out the window. I see things falling in Calgary. Hyper inflation? The “when” will not happen tomorrow.

#48 dd on 02.05.09 at 1:56 pm

#6 East of Eden ”

“beginning of the 1980s, a decision was made at the very top of the hierarchy … The company’s knee-jerk reaction was to lay off its most junior managers and I was one of them …”

Typical. All the overpaid CEOs and CFOs can think of is cutting employees in times of trouble. Well how creative! I could do that for 10% of their wage and make 1/2 the mistakes. What a bunch of clowns.

#49 Mark on 02.05.09 at 2:08 pm

Wanted to go to the vancouver one tonight. But when i rang last week i was told it was “sold out” (despite being free).

.. might try to gate crash…

Good luck garth.. (sulking that i wont be there)

Just show up. Throw a chair. I’ll know it’s you. — Garth

#50 JET on 02.05.09 at 2:21 pm

Toronto crumbling too:

http://www.torontorealestateboard.com/consumer_info/market_news/news2009/pdf/nr020509.pdf

http://www.torontorealestateboard.com/consumer_info/market_news/mw2009/pdf/mw0901.pdf

#51 Dave In Kelowna on 02.05.09 at 2:25 pm

Gary Trepanier: A foot of snow last week? Guess it depends on where in Kelowna you live. Only got a couple inches at my place (Lower Mission).

#52 Doug from Calgary on 02.05.09 at 2:32 pm

City of Calgary looking at adding “Real Estate Transfer Fee”, maybe 1%, to support affordable housing….

http://calsun.canoe.ca/News/Columnists/Bell_Rick/2009/02/05/8272101-sun.php

#53 CalgaryRocks on 02.05.09 at 2:35 pm

#45 dd

Indeed you are right however these things come fast, out of nowhere. I still remember buying a house in Calgary for 180k and selling it 5 months later for 280k in an all out bidding war. Pure luck, really.

When people realize that their virtual money is about to disapear it will be too late to react. Again, see Russia, Argentina, etc, etc.

#54 Sondra on 02.05.09 at 2:35 pm

#44 Macs
Thanks for the link to Flaherty’s remarks.

My daughter who has been voting for the last 4 years, she is 13 years old right now has figured out Flaherty.
She says, “he’s worried, and he’s not telling the truth, he thinks we can’t deal with the truth”.

Her friends parents are losing their jobs, and can’t afford the latest T& A Bag and Hollister sweat shirts or new snow boarding equipment . She watches real estate, and interest rates and she has a whopping big savings account. She has gotten rid of a financial adviser that she thinks is not looking after her money properly. She won’t lend or borrow money, and hates hanging out at the mall. Doesn’t even have a cell phone. Too much $$$ She will be the vulture in a few years and buy a house without the need for CMHC. Heck if she does it right she’ll buy two houses.

How does a 13 year old vote in the last 4 years of every city, provincial & federal election? Simple, she comes with me into the booth and chooses. I am allowed my child with me when I vote.

You may call this irresponsible, but I’d be willing to bet she is more informed than most adults. She says that she looks at people’s track record, not what they say.

She has already come to the conclusion that politicians do not give us the truth. Flaherty and all the rest of the politicians would be a little more worried if we all took more interest in who we have leading our country.

The only way to get our kids involved and vote is to engage them.

Canada’s future is what our children are engaged in.

#26 Worried in Estevan
Sorry I have no words of wisdom for you, I’m surprised that someone hasn’t said something. However, as a Mom and a Wife it is very important to support your Husband, and keep the family together. Do what ever you think you need to do, but the bottom line is be a family, where ever you are, divorce and separation is far more destructive and costly than the alternatives.

I will you well.

#55 Ted on 02.05.09 at 2:42 pm

This was great advice from the Calgary Realtors last June… Buyers need to pay attention – Homes are on sale today!

http://www.newswire.ca/en/releases/archive/June2008/02/c7489.html

Whose interest were they thinking of then?

#56 Keith in Calgary on 02.05.09 at 2:43 pm

Funny that the National Post disabled comments on the Flaherty “no bubble here” story…..ROTFLMAO !!!

This guy is a clueless moron……how can this be happening to us ? He actually got elected ? Even Stevie Wonder could see there is a housing bubble in Canada.

#57 CalgaryRocks on 02.05.09 at 2:45 pm

About climate change, all I see so far is a bunch of tax and spend governments salivating at the idea of a new revenue stream.

I guess alcohol, tobacco, gas has already been taxed tithe max. They need to come up with something new.

Indeed, how to reconcile the idea that billions can be spent bailling out gm and co, with no impact to the taxpayer, yet governments need to tax everyone into the stone age in order to get research money for green research and so called green jobs. I smell BS.

#58 BBC on 02.05.09 at 3:00 pm

Unfortunately won’t be able to see you on your last stop in Vanc. I recall you saying that it is possible to order a signed copy of your book from this website, is this true?

Must diversify….get signed copy of your book and it will be worth lots of money because of our history making times ;)

Cheers

#59 Future Expatriate on 02.05.09 at 3:04 pm

#42 said “Don’t forget….the U.S. dollar is backed by missiles and the largest armed forces…hmmmmmmm”

That’s right, that overextended rundown ragtag force of misled and misused cannon fodder on their fourth+ tour of duty and their decaying equipment and infrastructure, all backed by trillions in loans from China?

You mean that greatest military power on earth?

If that’s what the US dollar has backing it, it will make a wonderful fireplace starter this winter.

Gold ALWAYS has real value. While fiat “money” gave rise to the maxim “not worth the paper its printed on.”

Paper money (and investments) always end up worthless eventually. And “eventually” is closer than ever before in recent history.

But by all means… hold onto as much as you like.

#60 Mike B formerly just Mike on 02.05.09 at 3:06 pm

Hud Bay looses only a thousand jobs is but the first bad news you will hear about that company. Besides that is a fairly small number. What should be at the tops of peoples watch list is the real concern about these stimulus packages and how it is really encouraging people to get into more debt. I saw a small blurb on yahoofinance that speaks some straight talk about the problems in the US
http://finance.yahoo.com/tech-ticker/article/168779/Obama-Warns-of-'Catastrophe'-What-Happened-to-'Hope'-and-'Change‘;_ylt=ApY6rgxQ9_BolfZSRrZPP_q7YWsA?tickers=%5Edji,%5Egspc,%5EIXIC,SPY,DIA,QQQQ,TLT

topics like protectionism and world wars are part of that little video

Ran into a dual citizen at COSTCO today getting my oil changed. His take on the states where he used to live and work is an eye opener indeed. He is 70 so has no real worries indeed. He spoke of a friend who owned two car dealerships and both went bankrupt , now living off the pension of his wife’s employer. He told me that the ex car guy’s 2 million dollar house can’t even be sold except to a few low balling realtors. He used the word depression like you and I use the word “hello”. Very ugly down there.

#61 smwhite on 02.05.09 at 3:34 pm

#22 vtj

Excellent article, thanks… and to quote,

“What sets him apart from other doomsayers is his relentless emphasis on simple arithmetic.”

Whats happening isn’t something hidden with far out calculations, its simple math…

#62 Investx on 02.05.09 at 3:43 pm

#7 Ed79

“Then the agent started to tell me how she’s been so busy with six viewings in the past few days and they are expecting a few offers so I’d better get in quick. Now a month later the place is still on the market.”

Nice! Did you call the agent back and call her on it, referring to her as scum in the process?

#63 MarcFromOttawa on 02.05.09 at 3:44 pm

#40 squiddly

Please don’t post articles from july of last year.

#64 Jelly on 02.05.09 at 3:55 pm

I find it so frustrating when people think there is no such thing as global warming just because there is a cold spell. I wish they would just be honest and say, “Sorry, my head is up my ass, I have no idea about environmental damage and climate change, so-no comment, I really do not care…”
I once had a friend say to me,”There is no such thing as global warming”. I was so flabbergasted, I just kind of stammered, “What do you mean? How do you know that?” And this supposedly intelligent, almost 50 year old man stated, “I just KNOW, there is no such thing”
He gave no reasoning, no scientific basis, nada, he just KNOWS there is no such thing. It is one of the most idiotic comments I have ever heard.
I trust the scientists’ opinions thanks very much, I think it is probably worse than they will even be able to grasp. It is obvious all those in power are destroying our world, which may not even be there for our children.
I do not care what you say about it all being hype to tax us more, you can’t abuse our earth the way we have and get away with it. It is not a coincidence that we have such a drastic melting of ice caps and places all over the world that are turning into deserts so suddenly. It has to be a direct result of how much more we have polluted over the last decade and more.
It is a very scary state of affairs…

#65 questioning on 02.05.09 at 4:02 pm

http://www.calgaryherald.com/business/Energy+think+tank+sees+drop+oilsands+spending+2009/1257133/story.html

“The reality is that we’re really getting ready for the next boom.”

Oh, yeah! are you ready???!!!

#66 Jelly on 02.05.09 at 4:09 pm

a renter,

Lovely homes near Halifax, but they still seem quite pricey compared to places away from the city.
I know, I know, most people do not want to be on a remote hillside somewhere, but still, Halifax is pricey among Nova Scotia real estate.
Has anyone noticed properties coming down in the Maritimes? They are reasonably priced but still, you would think the economy and demand for housing would decrease prices in their neck of the woods too.
Any comments?
I am dreaming about retiring on an oceanfront house in Nova Scotia, the people see a lot more community oriented and friendly. I hear the winters are very harsh in the Maritimes however, so I may need to escape to a warmer climate come the winter months.

#67 go green on 02.05.09 at 4:42 pm

#29 vtj on 02.05.09 at 11:16

#12 pbrasseur:

I agree with you as well that Garth is unfortunately right on the money when it comes to the demise of many of these big box stores.

I bet you were driving along the 440/640 in Laval or along the 40 out to Vaudreuil. I too am amazed every time I drive by. Have real salaries or population densities in the overall area grown to justify this growth? Absolutely not. I can only conclude that all this growth in big box stores was fueled by debt.

…….

We spent Xmas in Laval and I have old friends in Terrace La Vaudreuil. I, too, cannot understand the growth in these areas over the years. I wonder how much longer they willl be sustainable.

……………
A friend of mine is a bank branch manager in one of the wealthiest communities in Montreal’s west-island. Without going into specifics, he mentioned that I would not believe the extent to which his clients in general are indebted. I’ve been saying to family and friends for many years now (as their eyes glazed over) that this crazy “don’t pay for 24 months” mentality was going to end in a bad way. It’s looking more and more like many of us on this blog who share this opinion are unfortunately being proven right.
……….

I have a BIL whos is in IT & earns a good salary at HQ in Mtl. His wife earned more than he for several years as a sales rep for major pharmas. (She has a chemistry degree). The last 2/3 yrs she was on disability (stress related), earned 60% of her salary while on leave. That ran out lat Nov. and she’s now having a hard time finding work. We predicted that, once potential cos. do reference checks. Yes, their house is paid off, but my DH & I have said they spend like there’s no tomorrow. In the fall, they put down new hardwood floors, redid their kitchen with all new stainless steel appliances, etc. They gave away their well functioning appliances . Its’ all about ‘Le Look’. Just about everything has been removed from counters. Their 6 YO’s child’s drawings can no longer be stuck on the fridge, etc. They’re now hung on a clipboard hung in a 6″ closet beside their massive, separate (but looks integrated) freezer/fridge. Don’t get me wrong, they’re very gracious & generous hosts but we both think they’ve got their priorities wrong. They’ve benefitted from my PIL’ monetary kindness, but spend it as fast as they receive it. I worry about their future if the economy tanks. BTW. my BIL lost big time in Nortel & real estate before that.

Off rant.

#68 Paul on 02.05.09 at 4:50 pm

We might have a (bit) more snow this year in Ktown and it’s hanging around a little longer then normal but it sure beats any Toronto winter by a long shot. I worked outside in TO for years and since i’ve been here I think i’ve had my winter coat on maybe 5 times in 12 years.

#69 Roger on 02.05.09 at 5:24 pm

The real estate market in Victoria continues its downward trend. Here are the latest stats.

January 2009 Statistics – Monthly Analysis

December 2008 shown in ()

SFH – Single Family Homes
MLS Sales – 247 (239)
MLS listings – 3678 (3824)

SFH Average – 526.1K (548K)
SFH 6 mo. Avg. – 546K (556.5K)
SFH Median – 475K (507.5K)
All SFH Sales – 141 (140)

Condo Average – 259.7K (280.5)
Condo Median – 255K (253.8)
All Condo Sales – 62 (53)

GV – Greater Victoria
January 2008 shown in ()

MLS Sales – 247 (464) – Down 47%
MLS listings – 3678 (3027) – Up 22%

GV SFH Average – 526.1K (606.4K) – Down 13%
GV SFH Median – 475K (530.2K) – Down 10%
GV SFH Sales – 138 (228) – Down 39%

GV Condo Average – 259.7K (349K) – Down 26%
GV Condo Median – 255K (304.5K) – Down 16%
GV Condo Sales – 62 (125) – Down 50%

If you want to see all the stats in graphs and charts just click on my name. There are several slideshows that autorun. Use the pause and single step buttons to advance the slides.

#70 O'Ryan on 02.05.09 at 5:29 pm

During your presentation here in Kelowna,I kept thinking of the people in my life who are in such deep doo-doo. They are heavily invested in real estate, residential and rentals. It’s probably a blessing that they weren’t in the room last night,for some,the facts would have kept them up last night. When we were leaving the building,my husband said that he too was thinking of the many people he knows that are not at all diversified and sunk up to the neck in their homes.
No amount of smug self satisfaction at the extremely good fortune we had to listen and sell at the top can make the sad feeling in the pit of my stomach go away.

#71 Carole AB on 02.05.09 at 5:44 pm

#31 Larry Celtic tiger no more

Is Ireland a canary in this coalmine or what??

Injected 400 billion Euros or more into banks for a population of 3 million….Let’s see 750 billion for 350 million Americans something wrong here…

My husband is from Sligo there has been no work there for about a year. His brother in laws brother newly married built a big stable purchased 30 expensive horses now contemplating letting them go in the hills rather than doing what 100’s of other owners are doing sending Irish blood stock to slaughter…no one wants them they are worthless and can’t afford to feed them.

Chris in England..I do feel better since I now know they won’t starve in the hills as they would here in the winter.

Hope you guys make it over here. Lived in London for a few years pre 9/11. Hard to make ends meet even in good times. As for the pessimism I think the collective conscious still remembers the blitz and at least you can laugh about it ie Fortune & Bird’s Silly Money! Where did all the Money go?

#72 Slice on 02.05.09 at 5:58 pm

huh, I guess it’s true, dogs and their owners really do look like. Garth, take a look at your pic and Bandit, at the top of this page…

Slice

#73 ted on 02.05.09 at 6:01 pm

“….If you are a climate change denier, the door for dinos is on your left. — Garth”

Garth I can’t believe you resorted to orwellian newspeak to silence someone who doens’t agree with your non professional opinion about global warming. This blog just jumped the shark. I am out of here.

#74 CalgaryRocks on 02.05.09 at 6:20 pm

“….If you are a climate change denier, the door for dinos is on your left. — Garth”

Speaking of dinos, Alberta was a tropical paradise when they ruled the earth. It’s a shame that the anti climate change crowd didn’t exist back then. Imagine the great climate we would have right now! ;)

http://www.dinodata.org/index.php?option=com_content&task=view&id=661&Itemid=103

#75 North Vancouver Citizen on 02.05.09 at 6:20 pm

Future Expatriate

…You sure sound agree…frustrated too.

So tell me, how do you eat your gold, al dente, raw, or in a samwich?

#76 WestCoast Girl on 02.05.09 at 6:28 pm

Developer sues buyers for backing out on condo pre-sales agreements…

Remember Omni, the Developer that Garth wrote about (and posted a pic of their 40% off sign! One day Only! Do you want Fries with that!” sign in Yaletown) earlier last month….for one day only, they’re dropping their pants…err, sorry…price…on the sale of condos left to be flogged….crap, sorry again…sold…to the public

Well, now they’re suing the pre-sales buyers that bought at full price and are walking away…ironic part is the phrase “The Perfect Storm” is used in the article, a la Garth.

http://www.vancouversun.com/news/Developer+sues+buyers+backing+condo+sales+agreements/1254213/story.html

BTW, happily ensconced in our rental home in Lower Mainland, BC (yes, I know, I know what everyone thinks about BC but I love it and it’s my home province) now that the cheque has cleared from the sale of our house in Edmonton (thank you God) last week….and property we WERE looking at buying back in November has dropped another 40K…yet again, thank you Mr Turner.

Cheers all –

#77 WestCoast Girl on 02.05.09 at 6:33 pm

and…OMG? Fort Mac and Alberta AREN’T immune to the global economic meltdown?? who wudda thunk…

http://www.vancouversun.com/Technology/Alberta+oilsands+veering+into+slumber+energy+institute+warns/1256998/story.html

#78 Dave on 02.05.09 at 6:35 pm

everybody’s a visionary and pats themself on the back. A few years ago it was the people that flipped homes, now its the people that are out of debt and saw the housing bubble coming.

Are there any people on this board that are seeing past the real estate bust and this whole economic downturn? Surely we won’t all be confined to eating squirrels for the rest of our lives.

I keep reading about what people SAW coming, well what is it that these people SEE coming in the future?

I’d love hear from a single individual that can call a bust and follow that bust by calling the next boom….very few visionaries are consistently good at riding the waves

I’m not an expert in the field and called the housing bust. I can also call what I think is the next boom. Is there anyone that sees potential in anything? And hiding underneath your bed hoping for a mouse to run by, doesn’t count

#79 Straw Bale Guy on 02.05.09 at 6:35 pm

#59 smwhite “Whats happening isn’t something hidden with far out calculations, its simple math…”
——

…and simple math can be down right scary. The following has been described as the most important video you’ll ever see. It’s somewhat real estate related as he talks about suburban growth

http://www.albartlett.org/presentations/arithmetic_population_energy.html

Quoted from his website –

“Professor Al Bartlett begins his one-hour talk with the statement, “The greatest shortcoming of the human race is our inability to understand the exponential function.”

He then gives a basic introduction to the arithmetic of steady growth, including an explanation of the concept of doubling time. He explains the impact of unending steady growth on the population of Boulder, of Colorado, and of the world. ”

“He proceeds to examine oddly reassuring statements from “experts”, the media and political leaders – statements that are dramatically inconsistent with the facts. He discusses the widespread worship of economic growth and population growth in western society.”

#80 jess on 02.05.09 at 6:39 pm

tick tock

Feb 5: AIG, once the world’s largest insurer, shares fall below $1, crossing the threshold at which shares may be delisted by the New York Stock Exchange if they fail to recover. NYSE may start delisting proceedings for companies whose 30-day average price falls below $1. The process may be halted if the stock slide reverses or a company does a reverse split to boost the share price.

#81 GB on 02.05.09 at 6:41 pm

I tend to agree with Garth an awful lot. But the whole climate change thing is in fact quite debatable.

At least the impact we as humans have over the ‘change’. As well as how rapid the change is.

#82 Bottoms_Up on 02.05.09 at 6:42 pm

Worried in Estevan: I think many people here would agree that to make money (or to prevent losses) you gotta lead the trend. If living space is at a premium right now in Estevan, it is time to sell. You will be selling when others are buying, thus leading the trend, and you will not get hurt. Waiting 2 years could be disasterous. Your kids are young, they will never know they didn’t see daddy for two years.

#83 Bottoms_Up on 02.05.09 at 6:44 pm

Keith in Calgary: you’re onto something there. If I had a nickel for every ‘controversial’ article printed that didn’t allow public comments, I’d be able to afford one of Garth’s top of the line generators. I wish there was a blog for discussion of these types of articles….

#84 $froma$ia on 02.05.09 at 6:45 pm

Fa-turdy is now going to add more stimulous!!?!

#85 whiterock on 02.05.09 at 7:06 pm

Just a few stats from my own calculations drawn from detached homes for sale in the the greater vancouver area.

Burnaby…425 homes for sale, median price 788k

Vancouver west…673 homes for sale, median price 1.68 million

Vancouver east…577 homes for sale, median price 700k

Surrey/White Rock…1452 homes for sale, median price 659k

Richmond…630 homes for sale, median price 699k

According to Demographia housing affordability survey any housing over 5.2 times median family income is in the “severely unaffordable” range. “Seriously unaffordable” 4.1 to 4.9. “Moderately unaffordable” 3.1 to 4.0 and “affordable” is less 3.0 or less.

Assuming that all these median houses listed above sold at 80% of listed price even the cheapest area(Surrey/White Rock) would be in the nose bleed section of “Severely unaffordable” with price to income ratio of 7.5(assuming a family income of $70k). Calculation(659k x 80%=527.2k/70k=7.5)

Put another way, using a 3.0 multiple(high end of the “Affordable”) that 527.2k house would require a family income of 175k.

So, going forward, at some time people will begin to believe that a detached house needs to be affordable or a least moderately affordable in order to justify ownig one. There are a lot of houses in greater Vancouver and simply way to few people with the incomes to afford them.

#86 shadow boxer on 02.05.09 at 7:27 pm

*** cold, snowy, wet winters and torrid, arid summers turning the pines, already stressed by the beetles, into erect kindling.***

Good, the ‘cold’ should help halt the beetle march.

#87 Medic on 02.05.09 at 7:29 pm

Garth, no offense, but Bandit looks a little bit like you. Anybody else see some resemblance in the face? Eerie.

Love this blog.

#88 kc on 02.05.09 at 7:37 pm

Just a couple thoughts and I wonders….

I watch a couple shows on the “w” network.

one is called “Maxed Out” where a financial gal helps people try and get back out of the red and into some sort of path towards recovery from being over extended.

and the second one is… (don’t shoot me for this) however, I am getting to my point… is on the same channel called “Love it or List it” where these two flakes from Ontario try to persuade owners to rebuild and not move, or list their home and move into new one.

What is never mentioned on the “love list” show is the incomes of the people and the ones that decide to move are usualy selling up and getting larger DEBTS. I would love to see the out comes of how they are doing now after things have cooled down in the markets and if they are regretting signing that 800K contract.

anyone else follow any of these shows? (I know they are pretty lame and for the cameras) however, on the Maxed out one I do have to say that I have picked up a few tips on home budgeting. would also like to see year follow ups on these people too. For the maxed out people are exactly the ones we talk about in here…. credit cards over 30K 2nd mortgages, LOC maxed. Any one else have any opions of these 2 shows?

#89 TS on 02.05.09 at 7:49 pm

There was an interesting news clip on television this evening about the housing market in Toronto. Sales are down 48% year over year (Dec 2007 vs. Dec 2008).

#90 albertan on 02.05.09 at 7:52 pm

#75 WestCoast Girl on 02.05.09 at 6:33 pm

Fort mac is busy if your in the right circles, sadly 90 percent aren’t. I know companies only hiring albertan’s right now.

But it is a good thing as edmonton has been getting to expensive and to many people. So i do see this as a postive……..maybe my view will change when i get layed off this spring?

#91 ThumbsUp on 02.05.09 at 8:01 pm

“Big Blue is offering its outgoing workers in the United States and Canada a chance to take an IBM job in India, Nigeria, Russia or other countries.”

http://money.cnn.com/2009/02/05/news/companies/ibm_jobs/index.htm?postversion=2009020515

One day our kids have to work in foreign countries? I don’t blame IBM, they have to have profit to survive.

Garth,
what job is future proof? Realtor for sure, anything else?

#92 George on 02.05.09 at 8:05 pm

There is a great article on carolynbaker.net. It features an absolutely brilliant writer named Sharon Astyk who is calling a fast crash. She calls her sell the The Apocolyptic
Dominatrix of Doom or something like that, however don’t be mislead by the humor as she is one of the best minds putting her awareness down in words. She sees a fast crash not some slow grind and she explains it better than I could do her service by paraphrasing. Essentially she’s saying it is no longer necessary to write about the future. The future is now. Where people could not afford heating oil because of the high prices several months ago, now that it is much less expensive they cannot afford it because they have to job. Take a peek and enjoy.

#93 Bottoms_Up on 02.05.09 at 8:22 pm

I love watching ‘Property Virgins’, and the realtor always gently coaxing the newbies to spend every penny that they qualify for. I would love to see a follow up show.

#94 Sask on 02.05.09 at 8:42 pm

When is this coming to Saskatoon? Things are still booming (price-wise that is). Here’s some of the spin.
Saskatoon Region Association of REALTORS® says
“Consumer confidence in the Saskatoon economy remains steady. REALTORS® are receiving numerous inquires of buyers from other provinces and the USA looking to move to our province. Markets are cyclical and the market in Saskatoon is at a low point and should begin to return to normal in the next few months. As a result, now is a good time to
purchase a home or investment.”
http://www.srar.ca/docs/February%202009%20Media%20Release.pdf

#95 Pat on 02.05.09 at 8:51 pm

#86 KC
I’ve watched Maxed Out – but like Till Debt Do Us Part on Slice better. The host Gail Vaz Oxlade has an excellent website that is all about living within your means, and having a healthy emergency fund. She has some excellent articles about buying homes and what portion of your budget should be spent on your home – my guess is that many people have no idea what is reasonable.

I’ve watched love it or list it too – and had the same question – I’ve also wondered – when did they film this show – was it pre-real estate collapse – and how many of those people are really regretting what they have done?

#96 Future Expatriate on 02.05.09 at 9:17 pm

#73… I understand drunk typing, so I’ll respond.

Me, angry? No, I’m just very busy and share a trait with Garth at being irritated with fools who’ll never get the obvious.

And that dog is adorable.

#97 Toronto Citizen on 02.05.09 at 9:19 pm

I saw the insiders view of the Hudson’s Bay cuts. Most of it was necessary, some was just settling scores and a more than a few involved casting Boomers out to fat severance packages and for some, defined benefit pensions. At least my job survived this round.
I tend to follow the darker narrative about the economy and future and read Garth’s blog as well as “The Automatic Earth” and Jim Kuntsler’s blog. Despite this I still get good news most days at work. I’m sure some people are hurting but the sales numbers are not saying that yet. People are looking for value, but they certainly haven’t stopped shopping. What I am hearing around the company is that Christmas wasn’t amazing but it certainly wasn’t a disaster and in some pockets it actually was surprisingly good. I’m still preparing for the worst (I pay cash for 90% of my purchases, live below my means, am building my savings and am getting rid of credit cards) but from what I can see now things are different, but still relatively ok.

#98 Chris in England on 02.05.09 at 9:36 pm

#11 – North Vancouver Citizen:

“Like I said, consider yourself very lucky we live where we do and that the world looks with envy at Canada and it’s citizens.”

With all that inevitable war being waged, you really should worry if all these countries are looking with envy at Canada and its citizens. Better not just guard against economic downturns and civil unrest – better guard against invasion by envious world citizens.

#99 kc on 02.05.09 at 10:28 pm

91 – Never heard of that show, however, same premise. As garth calls them “porn for the RE industry” The shows thou really make you wonder how those people that are/were on them could continue afterwards now with the bottom starting to fall out, and now getting glimpses of their greater fool reruns on the TV. I bet many will try launching class action lawsuits against the shows… “you said RE never goes down”…. can you imagine the “Springer style” kangaroo court that will be….LOL

#100 WestCoast Girl on 02.05.09 at 10:28 pm

#88 albertan on 02.05.09 at 7:52 pm

True dat about trend beginning of only hiring Albertans – only thing is, many of the Alberta companies couldn’t get workers, so in other provinces about the plethora of “opportunity”, they also did the necessary paperwork, LMOs, and brought boatloads of folks up from Mexico on 2 year contracts (pity is they are stuffing 6 of these men into a house with 1 bathroom, 1 kitchen, etc…but hey, that’s another rant)…check out your local Tim Horton’s, Wendy’s, McD’s, BridgeBrand Food Service, Sysco as well I believe…as they couldn’t find any workers “willing” to do something so menial as work for a living (apologies here, my mind is still raw from the (generalized, I admit) idea of the lack of work ethics and integrity, where people would just not come into work and not even bother to call and say they quit, leaving their employers hanging…I digress…). From what I saw of living in Edmonton/St Albert for 1 yr 11 days, the global economy discussion was met with blank stares and the “oh, we’re fine, we have O&G here”. Then the 20-yr old would go out and buy another 60k vehicle. Now, when the idea that jobs may start to get scarce, the rant of “hire Alberta” is on and the workers who went there on contracts are being frozen out, no fault of their own. I understand the concept of “saving your own first”, however…people are still people.

Fort Mac not immune, as you stated. I was fairly far along in the process of selling software to the parent company of one of the largest lodging camps up there, when all purchases halted due to economy and their general uncertainty. Then two on their EC were laid off =). Thank god this isn’t my niche client nor typical territory to sell into!

Welcome to the new economy hey?

#101 nonplused on 02.05.09 at 10:47 pm

#26 Worried in Estevan

About the only advice I have is that long distance relationships don’t work. Not for lovers and not for parents and kids. Bankruptcy is not such a hard thing to go through if you don’t blame each other and are realistic about starting over again and rebuilding together. I watched my parents work through it in the early 80’s. They handled the situation better than they ever handled being wealthy and you know what? They are wealthy enough now. You can rebuild if things go sour. Many people are trapped in the same situation as you are and so it’s important to realize neither you nor your husband is to blame. And don’t get emotional. Lots of people attach a stigma to hard financial times but you know what? But for the grace of God we would all be sleeping under the bridge beside that guy who politely asks for change every morning.

And I have personal experience to indicate that divorce is usually much worse than bankruptcy, especially for the kids. And that is if the divorce doesn’t cause a bankruptcy too.

#102 nonplused on 02.05.09 at 10:54 pm

#30 Marc

Ha, ha, that’s funny.

In case anyone thought Marc wasn’t joking, if carbon is causing green house effects (which is plausible and there seems to be a correlation), the problem is global not local. All the carbon coming from China affects everywhere. The US is still the biggest emitter and we the world gets their gas too. The resultant climate change would also be global in scale.

#103 nonplused on 02.05.09 at 11:07 pm

#39 ted

Why not read other posts then? Hey everybody, no talking about things that don’t interest ted! It’s his site now.

Fact is, both the global warming and peak oil theories are plausible and so far the facts do not falsify them. That means, although not proven, they can not be discarded either. People are concerned. Y2K was real to, even though not much happened. So people think “false alarm, all alarms are false”. But it was 5 years warning and billions spent that made Y2K a non-event. It was an “averted disaster”, not a non-event. It was a really big event if you talk to anyone who was in IT during the period. But it was faced in advance with a concerted effort. Could that be the case for Global Warming and Peak Oil? Don’t know. But it’s a big enough potential disaster that some people worry about it, and naturally want to talk about it.

Although I have to be frank, the prospect of the electronic transaction system that carries 97% of our current transaction system shutting down has recently become more pressing in my mind lately. And I think that’s what they are really panicking about in Washington. As Garth has said, nobody has any cash any more and no extra supplies in the pantry. A week bank holiday could be a real disaster.

#104 nonplused on 02.05.09 at 11:10 pm

#41 Chris S. & Garth

Oh great now we are doing grammar. I suggest not going through the posts, smarty pants.

#105 nonplused on 02.05.09 at 11:15 pm

#52 Sondra

You are having your 13 year old daughter cast your ballot for you???? I got news for you sister, that is your responsibility for the next 5 years. The laws are the way they are for a reason. Don’t show contempt just to seem progressive. I hope you haven’t been letting her drive to the polling station too.

#106 Anon on 02.05.09 at 11:21 pm

#89 ThumbsUp

“what job is future proof? Realtor for sure, anything else?”

Good question. What can’t/won’t you live without? Everyone needs their boilers, plumbing, windows and electric fixed from time to time. I heard hairdressers survive hard times comparatively well – for some people a haircut is the last ‘non-essential item’ they’d go without. Anybody think of others?

#107 nonplused on 02.05.09 at 11:33 pm

#72 CalgaryRocks

“Speaking of dinos, Alberta was a tropical paradise when they ruled the earth. It’s a shame that the anti climate change crowd didn’t exist back then.”

And before that it was underwater, which is where it looks like we are heading again.

When Alberta was a tropical paradise it was also much nearer the equator. Travel Alberta! The Tyrell museum is a great day trip with the family, a real world class facility and deserving of all the attention it gets. And if you can camp in Dinosaur Provincial Park (near Brooks), it’s actually pretty scenic and they have great tours right to some actual former digs. Book early for the tours. And get a power site if you have A/C. And yes the rattler warnings are real but my family managed to survive our encounter with nature by following the advice given.

#108 kc on 02.06.09 at 2:19 am

#93 Pat

HI, sorry i don’t know what slice is, If it is beyond basic cable channels I don’t get it for basic is all i need. going to look at that web site you mentioned thou, our house does live in its means I can promise you that. :) yepper’s you hit it on the head with “my guess is that many people have no idea what is reasonable”

comes down to “what will it cost a month” and I want it now.

cheers

#109 BigAL on 02.06.09 at 3:31 am

Nothing is “proven” in the global warming / climate change debate. There are plenty of scientists on both sides of this debate but the media is pushing only one side – the side of the believers in global warming. After reading both sides, I still have not made up my mind which side I’m on.
On the non-believing side, I look to the fact that the earth has gone through this thousands of times on its own before humans even appeared on the planet….freezing, cooling, freezing, cooling on and on. I have a strong suspicion that thinking ‘we’ have something to do with it and ‘we’ can fix it is nothing more than the arrogance in the Robinson Crusoe myth (We conquer all nature around us, we control all that we see, it is in our hands to solve…).
On the believers’ side, I see all of the factories and gases spewing out of hundreds of millions of cars, thousands of factories, all the burning fossil fuels, and just think: How could all this NOT be making changes?

The point is that everyone needs to read more on the issue. I don’t think its productive to resort to name-calling and all that.

#110 pbrasseur on 02.06.09 at 8:08 am

@vtj

“I bet you were driving along the 440/640 in Laval or along the 40 out to Vaudreuil. ”

You are exactly right!

#111 Jonathan on 02.06.09 at 8:56 am

See 6:17 in to this broadcast from last nights The National which discusses Vancouver condo buyers trying to get out of contracts:

http://www.cbc.ca/national/index.html#latestbroadcast

#112 Charles on 02.06.09 at 12:16 pm

#35 Dave on 02.05.09 at 12:16 pm i enjoy reading this blog but I have one question which is slightly unrelated, how come all comments and questions are directed at Garth? I mean, he responds to 1% of them.

—–

Hysterical. I always think that when I’m reading the comments, like a bunch of puppy dogs panting, “Garth, pant, Garth, pant, Garth, PANT PANT PANT!”

LOLOLOLOLOL

#113 Sondra on 02.06.09 at 8:35 pm

#105 nonplused

Do you know what percentage of people actually vote in the elections, city, provincial, federal? I’d say they’re the irresponsible people, the ones who don’t follow what our leaders are doing to us and our country, and neglect to vote.

It is my responsibility to raise a thoughtful, independent thinking person. We discuss politics, social issues, and track records of people in power at the dinner table, in the car, when we hear political ads on the radio.

She at the age of 13 is likely more informed than most adults. She at the age of 13 researches what the politicians have actually done, and how they voted.

I think that I am being very responsible, teaching her, and having her have some say about her future by voting. Just because someone is 19 doesn’t mean they care enough to find out anything about the people on the ballot or even attempt to vote, or become good drivers.

Yes she does drive, but on the farm, and she can take corners in the dirt buggy better than most boys.

#114 nonplused on 02.06.09 at 10:32 pm

#105 nonplused

“The closer to home, the stronger the reaction” – old Greek (modern) proverb.

Thrusting children into a level of responsibility for which they are not yet prepared and for which the law expressly forbids them to undertake, is negligent parenting.

And I don’t really care how apathetic the adult voting population is. The proper course of action is not to make our young vote at an obviously immature age, but to set a good example by voting ourselves. An example I might add you are not setting by letting her have your ballot.

You are the parent. You make the decisions. When she is 18, if you have done well, she may learn from them. But by making her the parent now you are both entering in to an extremely destructive relationship that you will later regret.

#115 Sondra on 02.10.09 at 3:07 pm

Dear Non plused

Your quote: “And I don’t really care how apathetic the adult voting population is”

Really? Wow, that is a shame, and part of our political problem.

I wonder what form the parents efforts in responsibility was of the current non-voting public. Note I said parents, as I don’t believe schools must do everything.

Stats Canada , “The voter turnout in 2008 dropped to the lowest percentage of registered voters ever recorded for a national election in Canada.”

They post the percentage as 59.1% for the 2008 election

http://www.sfu.ca/~aheard/elections/historical-turnout.html

Voter turn out for provincial and city/municipal is even lower.

I wonder how the parenting in the non-voting households was. I wonder if their parents took the time to research with their child, engage their child in what directly effects their everyday life, schooling, laws, economics. I wonder even if most parents really pay attention to their kids, or enjoy dinner with them.

I’ve read your opinions, discussed them with some peers, and I still disagree with you. In our house politics is researched and then voted on, that is responsible. You are right, I and my husband are the parents, we make the decisions. Our decision is to include her and educate her in all forms of life decisions.

You with a small glimmer from the blog information call my relationship with my daughter “extremely destructive”. That’s very contrary to the feedback given to me by other parents, her friends, her cousins, her school teachers and her tutors. I can’t help but think you get that from your own life experience.

Being the age of 18, 19, 40 or 50 doesn’t make anyone responsible,it doesn’t make them more informed, it doesn’t make them wiser, it doesn’t make them educated, it just makes them older.