House lust


As you might imagine, I am nicely buried in letters each day. This one I’ll share. File it under ‘remorse.’ Luke in Toronto asks me, “Am I ruined?”

I have never felt so down…i don’t know what to do…your blogs are making me depressed more and more. I didn’t buy your book, so you tell me how I can prepare.  My situation is this, early 30 year old male..married with baby…current house could have sold for $375k last april 08….have a mortgage of $180k…bought a new house to be built mid 2010 (probably later as delays usually happen)..will have to sell current house Spring 2010.

Only debt I have is Mortgage of $180k…and now $25k credit line that I had to use to put down for my new home deposit ($50k was the total deposit on a $580k home, had cash for the rest).  Was going to pay the credit line with the money i made from selling my current home next spring.

I make $70k and my wife makes $85k…we work in the ad business on the agency side (media buyers).  For now we feel load is there…but you never know…as you mention every day

So now you know everything about me….am I ruined?…cause I feel like i should jump out the window with all this bad news i hear.  It hasn’t hit me…but you and everyone else says it will.

I mean, I thought I was in good shape….but reading your blogs and every freakin pessemistic news story out there is making me think if I was dirt poor/broke/living on the sreets that it would still get worse for me!.  I know I’m young but I feel like all this pessimistic information is like we’ve entered a apocolypse!!!.  I find it very hard to get up and be excited.  My family and I have our health…but is that all we’re going to have?.  Every day I read your website and toronto star website…and I just eats me inside and depresses me.

Is there any optimisim out there for me to cling hope on to (other than my families health)

Well, Luke, let’s review. You have a house that was worth $375,000 almost a year ago, which means (charitably) you might get $350,000 for it now on a good day. (In April of 2010, who knows?) That gives you $170,000 in equity, or $140,000 after you repay the money you borrowed for a down payment on the new house, and the commission.

That little palace you bought for $580,000 will cost $594,500 with land transfer tax. Less the downpayment ($50,000) and the proceeds from your existing home ($140,000), you’ll have a mortgage of about $405,000, with monthly payments (at current low levels) of $2,250. To carry that, plus property taxes, you should have an income of $90,000.

So, Luke, you are not screwed. Not unless (a) you lose your job, or (b) you keep your job and she leaves you, or (c) the real estate market continues to decline for the next year, or (d) the ad business goes to hell and you both lose your employment, or (e) the builder folds and your deposit is pffft, or (f) you simply can’t find a buyer a year from now, or (g) you freak, rob a liquor store, fight with the cops and bleed out in a culvert.

But make no mistake, pal, you’ve rolled the dice.

There has to be a damn good reason to more than double your debt, as there must be a compelling explanation why you need to spend $594,000 on a house in a city with an average price of $370,000. And why would you purchase a home that doesn’t exist yet? Buying from a brochure is stupid in the best of times, but during an economy like this it’s worse.

How, at the tender age of 30, could you be so willing to give up the financial position you’ve achieved? Trading $170,000 in equity for $405,000 in debt? It’s still just a house, bucko, and there’s no guarantee it will appreciate by a dime over the next decade.

And don’t tell me she made ya do it.

If she did, send photos.


For current  blog, “Day from hell“, go here.



#1 Bill-Muskoka (NAM) on 02.22.09 at 10:04 pm


I am proud to know you and call you a friend because that was the BEST post you have made in a long time. It was real, helpful, and did that wonderful old fashioned One on One that is so rare nowadays.

We Old Farts have a lot to give, if only asked. You were asked and GAVE extraordinaire. You also gave a good mental head shake that definitely was needed. :-)

#2 nearmilton on 02.22.09 at 10:06 pm

The problem is our system is greed based. If you sit back, you lose. If you participate, it is to what extent you get ahead. With everyone buying homes and competing with each other isn’t helping the collective good. Less demand / humble demand (ie. small house vrs large house, civic vrs SUV) for consumer things (especially things imported from china) would help right now and for the long term.

#3 Schezee on 02.22.09 at 10:07 pm

Garth – I don’t even have the words to express my shock at the malice with which you treated him. Making a crack about him sending you pictures of his wife. How dare you? How would you like it if someone said such a thing about someone you cared about…your wife, your daughter or your mother for example?

You can treat people with respect, whether or not they made a sound financial decision.

You smelled blood and you kicked him in the gut while he was down.

Real heroic.


Yes, this is a shocking blog. Now run along. — Garth

#4 * on 02.22.09 at 10:23 pm

boo freakin hoo… oh no.. i have 170,000 in equity.. what will i ever do.. Get a life.

#5 Keith in Calgary on 02.22.09 at 10:29 pm

The guy who wrote to you Garth should consider that the first business expense to get chopped by 50% ++ in a recession is advertising.

He had better do a debt service ratio calculation based on a dual income of $15 an hour each…….because they’ll be lucky to make then when the axe falls. Can we name him “the greatest fool” ?

Did anyone in Calgary who posts here catch the DELIBERATE FRAUD being passed off as news, by the real estate shills on Canwest GLOBAL Channel 7 news tonight at 6:00 PM ?

Laurie Dahl, their resident talking head introduced the lead “news” story being presented by Bindu Suri, that was all about how first time buyers are now rushing back into the marketplace due to the price drop in Calgary, and the sudden magical affordability of homes brought about by same…..heh. They interviewed some peroxide blonde realtot bimbo (Nancy Johnson) and a young naive pair of fools who said that “it’s close to our rent so we’re looking at buying”…..

They also talked about a new home builders downpayment loan program for people with no money, and stated “emphatically” that it was not the same a zero down mortgage plan, even though the builder forgave the loan after 5 years.

There was absolutely no empirical evidence (zero, zip, zilch, nada) presented in this “news” clip to substantiate and show that the “statements of manufactured consent” from the “newsmakers”….errr….willing shills…were anything more than hyperbolic blather and outright lies designed to placate their advertisers.

REMAX is a Canwest Global news lead TV sponsor………

#6 squidly77 on 02.22.09 at 10:33 pm

this guy that wrote that piece to the blog author is nothing short of a cry baby
for cripes sake man he still may make $170,000 on his home that someone else will pay (title of this blog)
and now hes crying cause its not all working out the way *flip this house* had promised…how sad

when people gamble with hundreds of thousands of dollars they should know what the hell they are getting themselves into..the money world is the most unscrupulous place imaginable..if you play with snakes understand them..or as they say

sometimes you get the bear and sometimes the bear gets you

when dealing with big money never ask for advice as to do so would expose your vulnerabilities
educate yourself or understand that not all things are for could care less whos pocket its in

#7 Jason on 02.22.09 at 10:33 pm

I agree with post 4: boo hoo, only $170,000 in equity (from a soulless, indefensible job in advertising [professional lying, manipulation, and propoganda]) and spent it all on a huge McMansion (that probably wont have anyone wanting to buy a year from now).

He rolled the dice alright, and he better hope for craps just to break even.

#8 Jordan on 02.22.09 at 10:38 pm

Instead of allowing the information to depress you, use it to make better decisions.

Be glad that you have a baby, a wife and a home. Work hard to protect it, take the steps that you can to prepare for what will or could happen.

You have the rest of your life to look forward to, appreciate what you have. In reality you have more than most people could ever expect.

Worrying does not add a singe hour to your life, taking action can.

Life is beautiful and challenging.

Self pity is cowardly and weak.

The sense of entitlement compared to that of thankfulness will ruin anyone.

Best wishes.

#9 chuckd on 02.22.09 at 10:40 pm

It’s not the end of the world, don’t jump out of the window. Maybe buying the 600k house wasn’t the best idea but I know it’s tempting. I am in a very similar position but haven’t pulled the trigger. (though I have very similar equity and income I wouldn’t feel comfortable buying something for more than 450k) I figure that the bigger more expensive houses are going to drop more substantially than the ‘starter’ bungalow I am in so I think I’ll wait a year or so and see what happens. Plus it’s small but it’s ok for a couple and a baby. (people raised big family’s in these houses years ago)

So, ride it out and if worst comes to worst you lose a little money. Big deal.

#10 Mike B on 02.22.09 at 10:46 pm

Schezee… You really should take the bottle out of your yap. If you think Garths comments are disturbing then you have some mighty thin skin.

As for the couple… hard to believe that two 30 somethings a) even had a house supposedly partly paid off and b) they make such very high salaries in a very personnel bloated and ever deteriorating industry. Just doesn’t add up … And nope … don’t feel sorry for them.

#11 Steve on 02.22.09 at 10:48 pm

Who, in their right mind, would buy a house for $600,000 anyhow?

A high roller, perhaps?

A big shot?

Flush …

#12 M I K E on 02.22.09 at 10:53 pm

Here’s some hope for this gentleman.

Paul Volcker: The banking world needs more Canadas.

#13 kitchener1 on 02.22.09 at 10:56 pm

Great post, it underlines the real stories behind the everyday successfull people we know (ie. neighbours, co-workers etc..) Truth be told, buddy is going to be wiped out if he waits until 2010 to sell. Real estate markets move is cycles they go up and they go down or they flatline, right now we are going down.

There are going to be thousands of people like this in the coming months. Personally, I feel no remorse for them. This guy along with many others basically brought a call option (on leverage) that the real estate will continue to go up. He lost, yet if he would have won and prices would have gone up he would be bragging to his family,friends,coworkers about how savy his financial skills are.

Now, think about the thousands of folks like these that are going to get wiped out, add in all those “geriatric” boomers (sorry Garth just could’nt help myself-being Gen x and all) selling their homes and you have some serious negative sentiment re real estate for the next decade.

#14 Blanche M on 02.22.09 at 11:05 pm

I never cease to be amazed at the number of young, healthy, presumably well educated people, who
feel they need to spend their future finances and well being, to impress other people, who really don’t give a rats butt about them. For heavens sake people if you are fortunate enough to have a roof over your head, that you can manage to pay the inflated monthly mortgage payment on, stay put, pay your bills, and pray you do not lose your job,or some member of your family gets sick . When did a big house, big payments, three cars. new furniture , six bedrooms, and four bathrooms become the measure of a persons life. At the end of the day stuff is only stuff, and debt is the most cruel form of slavery.

#15 Real estate on 02.22.09 at 11:06 pm

All Pansies, shall fold.

#16 eddie on 02.22.09 at 11:07 pm

now why wouldn’t you have advised him to dump the new property and cut his losses? thats the problem with our western society: those last effort attempts to keep our beloved homes.
BTW…great blog; bought your books; and am a fan; i don’t agree with everything you say to the extremity you declare in your books; at least not yet. there’s always a dead cat bounce before the real #$#@ hits the fan… this one we are seeing will only take out the speculators and those who were careless with their finances. The real crash will take out the rest of us… and they think you’re pessimistic!

#17 Rene on 02.22.09 at 11:08 pm

To comment #4, a good chunk of his equity can evaporate quickly enough in the next 12 months for this guy. While his situation is not dire, I could turn ugly between now and mid 2010.

I’m in a similar position to Luke, though my figures are all 40% less (property value, outstanding mortgage and annual salary). The only move I would make is to sell and rent if I could ever convince my wife. (No, I will not send pictures of her).

#18 kc on 02.22.09 at 11:13 pm

looks like the party is also over in DUBAI…. (if someone posted this previous my appoligies for this was last week’s printing. Published: February 18 2009

“Dubai’s globalised economy has been hit hard by the credit crunch.”

“Job losses are mounting across the economy as the property bubble bursts, triggering concerns about the government’s $80bn debt pile.”

Bourse loan eases Dubai default fears

#19 Dan on 02.22.09 at 11:13 pm

I feel for the guy. I feel for anyone who makes a mistake and is forced to live with major consequences. It really and truly is a terrible.

Garth gave the fellow a pretty accurate picture of his situation. It was meant, too, as a warning for others not to be so foolish. Nobody with a brain in their head says with any sincerity to a pregnant teen, “Congratulations! What wonderful news. I’m sure you’ll be the one unwed teen mom who’ll do just fine and buck all the statistics.”

Garth could have sugar-coated it for this guy, but he didn’t and he shouldn’t have done. Our government, economists, realtors, and bankers have already done that for this guy and look where it got him.

#20 dodgedabullit in Alberta on 02.22.09 at 11:22 pm

Greetings: I believe that an effective blog has to stimulate debate and invite comment. In this way, all who post and read might take something of worth away. If this means that the current topic offends at times, so be it. Being politically correct to extremes is part of the reason Canadians are pansys when it comes to the truth. I would invite Luke to respond to Garth’s questions about the logic he used when signing onto this home purchase. Was it greed, ignorance, or was there a smoothing talking builder, realtor, banker involved also. Someone once told me that “you will find sympathy, between shit and syphlis” in the dictionary. I came very close to being Luke, and I would offer this suggestion to him: get some good legal help and put a plan of action into place , walking away from the deposit may be a solution, or the builder may have problems completing the home. Midway 2010 is a long way off, weeping in despair won’t cut it, Luke get busy!!!

#21 Shawn on 02.22.09 at 11:23 pm

I wonder if our house buying friend can just try to get some of the deposit back?

Builder may not have spent anything yet… Just try to get as much of the deposit back as possible. Take him to court and the media court if needed.

When my wife and I bought a house in 1995 we were making together about $110,000. Both with secure government jobs. We scrapped together 25% down and had a $108,000 mortage. There is no way I would have gone as high as a $150,000 mortage. And no, it’s not a shack, it was a 13 year old house. Today this house (near Edmonton) is appraised at $400,000 for property tax and I am not sure I could afford it today. (It’s long-since paid off luckily – well actually luck had nothing to do with that…)

I cannot understand anyone taking on a mortgage in the $250,000 or more range unless their incomes are over $200,000 and secure.

#22 Investx on 02.22.09 at 11:25 pm

“And don’t tell me she made ya do it.
If she did, send photos.”


#23 electrician boy on 02.22.09 at 11:35 pm

Hey Garth, you know when canadians will do better ?
When they will learn in school a lot of math……….as a result they expect others to do their math. I am serious;the system we have now in place is to keep us in such dark so we dont understand the basics in this discipline.It is unfortunate but is true.

#24 Kootenay Guy on 02.22.09 at 11:38 pm


You buy into the materialistic, overleveraged one up culture, you take your chances. I don’t feel sorry for someone that lives beyond their means.

If a person is destitute and needs help that is another story.

It seems like this fellow brought it upon himself.

“Luke” – sell (SOON – YESTERDAY) both, take whatever cash you can, put it in the bank and rent…life is not over…you are young…family comes first….the other s _ it is secondary….

If you sell (don’t WHINE and WAIT) now you will make it up at the bottom when the housing market crashes…..

I really do not see what you have to worry about….?

#25 Investx on 02.22.09 at 11:39 pm

“To carry that, plus property taxes, you should have an income of $90,000.”

Garth, how did you calculate this? Are you basing his affordability including his wife’s income? (Because isn’t the general rule of thumb with mortgage amount affordability at least 3.2 times of household income?)

#26 Taxpayer like you on 02.22.09 at 11:43 pm

“But make no mistake, pal, you’ve rolled the dice.”

Garth Vader speaks the truth. And reading this blog
wont help his morale either.

Its really just a numbers thing isnt it? Say goodbye to your down payment. Consider it a sunk cost either way.
Option A says walk away, keep current house, have $205K in debt, with house of say $325K?? Option B says
build new house, with new mortgage of $400K, or higher if old house sells for less. Do you feel lucky? well, do ya?

Assuming you can walk away from the yet-to-be-built house only losing the downpayment, then its just what you need to sleep at night. 2010 is still a year away. That’s a lot of sleep.

#27 Vankover on 02.22.09 at 11:46 pm

If things get worse for the persion who wrote, we in Vancouver appear to be generating waterfront social housing. Make no mistake, I’m all for social housing but we here are out of control.

#28 TheComingDepression on 02.23.09 at 12:01 am

Why didn’t you tell him the truth? I will. Buddy you screwed up. WHEN this “recession” hits the bottom and your still holding that house, after you “hit” your family for the extra dough needed, your NEW house could be worth 50,000 grand. It will go down 90% like the tech bubble, the oil bubble, the stock market bubble, NORTEL, the .com bubble. Housing is no difference. You’ll be going bankrupt in the very near future and renting. Sorry Mom and Dad, I’ll pay you back when you get out of the “nursing home”…

#29 RM in Oakville on 02.23.09 at 12:06 am

Garth, I think you offered very sound, blunt, honest advice. Allow me to be equally blunt.

Luke, you two are both in an industry that is taking it on the chin these days and there isn’t any immediate hope that situation will change this year at the very least.

Personally I don’t think now’s the time to be taking on 400k+ in debt (more than double what you’re into now), especially for a house that isn’t yet built and a future that looks murky at best. If I were you, I’d explore ways to back out of the deal. Even if your deposit is at risk (though not necessarily depending on what you signed), you may well come out better in the end. By the sounds of your post, you’re probably contemplating doing just that.

Dude, it’s gut-check time. You’re young and have a young family. You’re obviously distressed and probably with good reason: you and your wife are in a vulnerable industry and you have a mountain of debt in front of you. Sounds to me like you’d like to back out of the deal and are looking for validation. Here’s my advice: do so.

Good luck to you.

#30 Alberta Ed on 02.23.09 at 12:08 am

Talked to a young woman in Cochrane the other day. They bought a last December, nice new house, with all the upgrades, s/s appliances, granite countertops, etc., probably near the top of the market. They are now looking to rent or sell, since her husband has been transferred (fortunately, not laid off.. yet). Not only is there the mortgage, but the strata fees, insurance, and taxes. There likely will be more sad stories such as this in the weeks and months to come as the depths of the financial crisis gripping Alberta are realized.

#31 . . . fried egg with spam . . . on 02.23.09 at 12:18 am

Most already know this worldwide fiscal collapse has just begun and is gaining strength — like a hurricane — each day. So FWIW, these are separate points of view. —
A good comparison between South Vietnam and Af’stan. Should be noted that neither the USSR nor UK ‘won’ their wars in Af’stan; how does the US expect to do it? —

#32 robert on 02.23.09 at 12:32 am

Good reply Garth. Sad situation, but this young fellow needed to put it all in perspective. He’s not ruined but has learned that the easy times are gone, but hey, there’s no debtor’s prison, no pillory or stockade. Look at bloody Madoff, and he lost billions. The most important things are the usual, family, friends etc. Sounds like he might need to suite out the mc mansion.

#33 double mike on 02.23.09 at 12:34 am

You got to be kidding me. $2250 plus property taxes for a yearly income of $90K? As far as I’m concerned this is a financial suicide, cruel and unusual.

And how anybody in his right mind can justify buying a house for $600K in GTA anyway?

#34 Sail1 on 02.23.09 at 12:50 am

I have never felt so down…i don’t know what to do…your blogs are making me depressed more and more.

No doubt he made a dumb move, however I think this young man should stop reading this blog immediately. It may not help him financially but at least it may temporarily subdue his anxiety .

#35 rick in Surrey on 02.23.09 at 12:56 am

I think Garth’s reply was well stated. People are always looking for sugar coating and to be spoon fed info. This poor guy rolled the dice at the wrong time and unfortunately came up craps.

As the late John Wayne said “Life’s tough, it’s even tougher when you’re stupid”.

#36 JoJo on 02.23.09 at 1:13 am

Those videos are for Garth and Defflationary company!
The Worst Great Hyper-Inflatory depresion ever in USA and Canada.Watch the Celente,Shiff,Rothchild,Rogers.

Did you know that Canada was hit hard during the Great Depression between 1929 and 1939 and it was the worst economic collapsse in the world
(ranked top 1) .
The gross national product dropped 40% (compared to 37% in the US). Unemployment reached 27% (compared to 24% in the US),at the depth of the Depression in 1933.
It’s comming simmilar scenario but from opposite side
Hyper-Inflatory Depression which is worst than Defflatory Depression.

Any comments from above listed thrue predictions/facts?

#37 rootabegarootabega on 02.23.09 at 1:17 am

A guy I know did the same thing in Van. He makes good money, was about three years away from paying off a big house he bought for a mere $325,000 in 2004, but, NO, he had to go out and buy a 10-year-old condo in the West End last November for $335,000. He was sitting in the “cat bird seat”, and he went and did this. Why, oh, why? Apparently, taking seven years to pay off a home was just too long, and he thought he could re-fi and pay off his first home in full when he bought property no. 2. The plan isn’t coming off as he hoped.

#38 Sondra on 02.23.09 at 1:18 am

My advice to letter writer, get a good real estate lawyer, and get out of the deal, even if it costs you money. Thank your lucky stars if you only have to forfeit money to the builder. It will be a hard lesson, but it will be much worse if you have two houses that are declining in value that you can’t sell.

Add the stress of the financial situation to the family life, and poof, marriage troubles. Now top that off with one of you losing your job.

At this rate you are going to make yourself physically ill, and your job production will decrease.

Get a very good lawyer, take the hit, get rid of the new palace. Then make a budget. A real budget. Enjoy each other, not stuff.

Now is the time for you to be a man. That means doing what you have to for your family. They need you, not a new better bigger house.

You can do it, and you will be happier.

#39 Glenn on 02.23.09 at 1:20 am

So the choice is reality over perception? I would much rather be told the cold hard truth over touchy feely fluff. If the 30-something guy was smart he would sell his house right now, clear out all debt, and get into a rental.

As far as the wife issue, females in the West initiate 70+% of all divorce proceedings, 90% of custodial mothers openly admit they manipulate children against their fathers, and in Ireland 1 in 4 babies born is not from the putative father.

Like real estate buyers, men are well into a “Marriage Strike” resulting in marriage rates that are the lowest in recorded history. Myself not included, as I married a foreign girl much younger then me that works all day while I make posts on obscure Canadian webpages.

But at least our total debt is less then $20,000USD. God help the kid in the letter.

P.S. Ill send pic’s of my wife any time, shes a major hottie and Im more then glad to show her off!

#40 Joanne on 02.23.09 at 1:22 am

My husband and I also bought and sold during the ” Boom” but we had the common sense to buy in the same price range as we sold. Therefore if the market proceeds to tank..which it will. We have paid the mortgage off and know what our total investment was including interest and taxes. So if the market tanks 50% , we still break even. I think it is absolutely absurd to spend half a million on a house and pay interest to carry it. If your flush with cash fine but you will never break even on your investment paying another two hundred and fifty thousand in interest over 25 or 30 years. Money doesnot grow on trees and real estate can’t appreciate 50% in five years without a market correction.

#41 MRG on 02.23.09 at 1:24 am

Garth, that post made my day. Honest advice with a punchline that gave me a good laugh. Well done G, Well done.

I can’t believe how people expect a specific forum like this to conform to their ideals or political correctness. Real decisions about life and business is not all about politeness and being overly sensitive. This is more like a locker room where real things are said and no BS tolerated. If you don’t like it then just read a newspaper or something mainstream.

You want to see what a forum filled with some of the wisest and knowledgable people yet completely ruthless towards any BS/Crap? visit the ski forum They’ll cut you up good if you don’t know what the hell you’re talking about.

#42 Da HK Kid on 02.23.09 at 1:28 am

Tough call. Negatives all over! It’s does not matter what your income is combined as you both have your income eggs one basket first off.

I would not want to be in Ad bus right now as these are budgets that get pulled right off.

I’ve got to be honest, I would do everything I could to get out of the that new house deal, even if I lost a portion of my deposit as that house at $594K is now already worth less can say how much but lets figure worst case say in in Vancouver down 15% to $505K and another 15% this year to $430K.

Your then under water on this property.

Once you have gotten out and have a clear sign all is said and done, sell the existing house grab whatever equity left pay out that LOC and rent.

Put all that extra rental vs. ownership money in your pocket to increase your net worth ready to buy 2010-2011-2012.

Sorry but this is what I would do yesterday. Get a lawyer involved as well. Get aggressive with the developer. Call your local newspaper etc. so the developer gets the point.

#43 phil g on 02.23.09 at 1:30 am

Great responce Garth, right on the money.

#44 Dave on 02.23.09 at 1:51 am

the income of the 2 of them is $150,000. Hopefully they keep making that money.

It is unfortunate, but there was some sort of thought process that led them to make those decisions. Pretty drastic and deep commitments they made.

The guy might be afraid now, but may have been one of those greedy guys that were patting themselves on the back 2 years ago.

#45 rant in Calgary on 02.23.09 at 1:54 am

Hey Garth,

I’m so depressed, my Porche has a flat tire and they can’t fix it til next week, and now I have to drive my hummer that’s just coming off warranty. What if G.M. goes bankrupt? Who is going to fix my Hummer? This is so depressing.
He is the epitome of why were in this mess. He cares more about the Granite counter tops than the health of his family?

#46 Bruce on 02.23.09 at 1:59 am

This poor fellow obviously belongs to the Generation”X” crowd. The same group of individuals who were caught up in the last downturn, the dot com bust where young entrepreneurs and hotshot computer programmers saw their millions evaporate overnight, forcing them back into reality and back into mommy and daddy’s house. In summary, this was the generation that got the SHAFT.

Truthfully, I have been saying all along that Generation”Xers” were going to be the ones who get screwed the most. The boomers have have siphoned the trough dry, and I watched how so many of them with college and university degrees wound up working service industry jobs for minimum wage because that’s all that was left. They had no other options. Hell, my neighbour’s kid falls into this same crowd. This is a guy with 6 years of post-secondary education, who has roughly $50k in debt, and who, at 32 was working part-time at Home Depot. Welcome to the “Wal-Mart” economy…

It’s important to remember that this generation today is entering a job climate totally different from the ones their parents knew. Gone are the days when you could walk off the street, apply for a job, and get hired on the spot. I’m seeing a trend more and more where 30-some year olds are moving back home with their parents because they’ve exhausted their resources, are damned near bankrupt, or have just gone through a painful (and expensive) divorce.

As much as I hate to be a pessimist as well, I think this poor dude has every right to be VERY concerned. The end-game here is NOT going to be a pleasant one folks. On the same token, Generation”X” may have been the ones who grew up having everything handed to them, but now there’s nothing left to give. Irony can be a strange game sometimes. I think the lesson here is to never get your hopes up too much. You only set yourself up for disappointment and/or failure. Everything they every taught these buggers in school was a big flaming pile of you-know-what. I truly feel for these guys. They are the ones who face an uncertain future full of BS dead-end jobs, massive debt, and the possibility of having no retirement.

Karma is indeed a bitch.

#47 Jelly on 02.23.09 at 1:59 am


Quality statement about the wife, brilliant.

I am a wife and I do not find it the least bit offensive,

my God, it was a Joke! You have got to ask yourself,

why else would a man make such a bad decision?

I like your humour, and you can always find humour in

things, so you gotta go for it.

I thought Garth’s response was quite tame, and let’s

be honest, a lot of women love the big house to feel

secure and all that-not a shocking thing to


#48 Chris on 02.23.09 at 2:04 am

Why can’t “Luke” just back out of the deal? Is there something I’m missing?

#49 Bruce on 02.23.09 at 2:06 am

#2, you said it best. Everything is just a rat-race today. Everyone has to have more than the other. Watch out for #1! There’s a general consensus that if you’re not participating in this race, then you’re a failure. Hell, it’s no wonder we’re keeling over from heart attacks in our 40’s. The amount of stress, unhappiness, and anger I see in my daily routine has me truly astounded. Take a serious look around you next time you’re at work or out shopping. Ever notice the expression on these people’s faces? NOBODY seems happy anymore, and I think it’s precisely this reason why we’re in this mess in the first place. We need to start taking a good, hard look at ourselves, our way of life, and what really matters. We are literally killing each other with all this greed and stupidity…

#50 confused and a little crazed on 02.23.09 at 2:17 am

Schezee ,

cmon…do we have to be so politically corect that a slight comment like that will offend you. I asked for help baack in 2007 when I sold my house in 2006…thinking the market was already crazy and I had some family issues. garth told it to me pretty straight. Though housing still went up an additiional 100 K thru to the end of 2007. my investmentss after selling went up only 50 k.

I still remember he told me what I ‘m complaining about . I have equity from my sold home and I made some money from investments…I renting…I ‘m doing ok ( even though that 50 K has gone down to 15 K… i bought blue chips at 65% off its peak and It still dropped 35 -50 %…Ugh). No banks ..thank god

he told me correction would be about 15 % …I think the correction will surpass that aanyways. The bottom line is letter guy is doing ok. The worst case really is he paid too much for your home…It’s take maybe an additional 6-8 years to pay off. You still have a home not like the victims of Madoff scandals … some lost a lot.

Besides…I think Garth is teasing in his rebel kind of way.
It ‘s what guys do ie If a buddy gets a hot girls phone #. We call him a damn Bast*** or “YOu want to make my life easier…buy something for my wife” ;)

#51 Jennifer Smith on 02.23.09 at 2:22 am

Yeah, I have a hard time understanding this sort of mentality. We bought our first house – a 1930s, 1,200 sq.ft. clapboard – for $138,000 with $35,000 down. That was fifteen years ago, and we’re still here. The house is conservatively worth double what we bought it for, even in this market, and the principal is so low now that we can actually see the light at the end of the tunnel.

It’s a warm, golden light.

Sure, we’d love to have a bigger house. We’re both self-employed and recently lost our rented workshop, so our workspace now fills the unfinished basement and the livingroom, while the livingroom furniture now lives in a storage unit. And yes, I cringe every time I see our 6’2″ son having to duck whenever he walks down the tiny, narrow staircase from his room.

But we’re realists, and we understand that while it would be theoretically possible to fudge our credit and string ourselves out along another twenty years of six-figure debt in exchange for a way bigger house with granite counter-tops and a two-car garage, what would be the point? The stress of carrying that much debt alone would kill us – not to mention the horror of moving out of our marvellous ‘Olde Milton’ neighbourhood into one of those gawdawful Mattamy developments.

We have limited means – largely by choice – and we live well within them. But even if we made as much money as these folks, I can’t imagine wanting to move and take on that much added debt if we were still in our early thirties with a new baby.

What’s the hurry? Even my parents, who came from money and never had to pay a mortgage, lived in a relatively modest-sized house until my sister and I were well into grade school. And their second house wasn’t much bigger.

And what is it exactly that these people have to fill 3,500+ sq.ft. of McMansion? I’d be willing to bet it isn’t much. A crib. A treadmill. A big screen TV. Probably less than half of what we have in books and tools and twenty years of accumulated stuff.

Bigger isn’t necessarily better. Especially if your house is just a place to eat and sleep in between your two and a half jobs.

#52 Anon on 02.23.09 at 2:58 am

Schezee, you are missing the point. Garth nailed a very important factor that many families face- “she” makes crazy decisions based on total lack of logic and “he” just follows along. I know MANY families just like that.

#53 rural route on 02.23.09 at 3:00 am


Follow your instincts. If you are worried and feeling pessimistic, something probably IS wrong.

Too much risk is hard on your health. Even if you succeed in pulling this off, and everything goes in your favour, you will wear yourself out worrying. Be kind to yourself and make things easier.

I’ll bet you already know what to do.

#54 Holgs on 02.23.09 at 3:07 am


Wow, he was already depressed. He didn’t need you to rub it in…

Here’s my advice:

He should forget about the dp on the new house… That’s what they’re for. It’s 25k but undoubtedly will be far less than the depreciation on the current and new house together, and very likely less than the depreciation just on the current house.

Secondly, he can sell the current house NOW… He has so much equity that he’ll still come out with some cash left over, minus the lost down payment on the new house. He can then switch to renting for a couple years till the biggest portion of the depreciation to come is complete.

after all this, he’ll be in exactly the same position as us… Early 30’s, baby, renting a small apartment and waiting with our growing savings account until prices are back to reasonable levels.

We’ve never bought a house, but we’re not depressed and if he does the above, his financial position will nearly be where ours is today… Comfy saving account, but no palace.

#55 Mike (authentic) on 02.23.09 at 3:11 am

Here in the UK, we got a comforting bit of news from the UK premier:

“We want to go back to traditional lending standards and methods where it takes longer to purchase a home for the average person because they saved to do it”.

Wow, that’s what North America needs! Forget this “keep the free credit, 3.5% down payment ball rolling and introduce the 25% down traditional mortgage!”

A bit of Calgary history (maybe across Canada too?) in the 50’s a bank product called a residental mortgage was introduced, before then, you had to have 100% financing. The first homes that qualified for a 25% down mortgage was a 3bd, 800-1300sq.ft bung.


#56 BigAl on 02.23.09 at 3:12 am

A household that, all they do is sell or buy ads, makes $155K/yr ? And most people on this blog scream about an auto worker making $30/hour??

If you ask me, its these folks’ types of salaries that need to get back in line with reality. Its not any highly specialized profession. Especially if you’re only 30 (less than 10 yrs experience??). I understand that ads generate revenue, but surely one can find creative, passionate, people for half of what these folks make?

I don’t know the ad business. Am I wrong?

#57 Branden on 02.23.09 at 3:22 am

“And don’t tell me she made ya do it. If she did, send photos.”


#58 phil g on 02.23.09 at 3:32 am

Hi nearmilton

This was an abnormal cycle, however if you understand economics you will fathom what is next or maybe Garth should respond to your post more fully.

#59 surferbob on 02.23.09 at 4:17 am

its all the dam jones fault there alway getting better stuff than us… i give up

#60 $ on 02.23.09 at 4:24 am

Is there an option to keep the existing house, and walk away from the deposit on the new one?

Essentially telling the builder “I don’t want it anymore, you keep it, and my $50,000.”

As for the wife, yes pictures would indeed be helpful.

#61 ricky singh on 02.23.09 at 4:28 am

i am renting eager to get a house, should i look now or wait more?

#62 Murray on 02.23.09 at 5:58 am

Great response Garth. A little humour is great medicine. Luke’s example could be put in financial history books as and example why we a got into this mess. It wasn’t “her”, it was his ego. Just like the rest who are in a mess.

#63 Holgs on 02.23.09 at 6:33 am

I had the dp wrong, but even at 50k, he should walk away if he gets the chance. It’s painful in the short run to lose 50g’s, but it’s not a death sentence. They would still have enough equity to put some savings away if they sold their current abode now and walked away from their down payment.

#64 somecatchyphrase on 02.23.09 at 6:54 am

Readers of this column might enjoy this interview with the former Comptroller General of the US. The link to the interview appears at the end.

“When I see annual deficits of $2 trillion to $3 trillion that Congress has committed the country to in the coming years, I can’t help but associate our country’s situation with the last voyage of the Andrea Gail. Anyone who has seen the movie A Perfect Storm or read the book knows the story of the sword-fishing crew that got caught in the Halloween Nor’easter of 1991, known as the perfect storm. The story is a precise analogy to what will happen if our country doesn’t change course now.

The Andrea Gail (United States) is captained by Billy Tyne (Barack Obama) with his young first mate Bobby Shatford (Timothy Geithner). Their fishing boat was fighting the rough waves of the North Atlantic (Financial Crisis) as they sought their prize of swordfish (Economic Recovery). While they were concentrating on the task at hand, the remnants of Hurricane Grace (Unfunded Liabilities of $53 trillion) was moving up the Atlantic coast. A low pressure system ($787 billion stimulus bill) moved off the East Coast and a strong disturbance (Bank Bailout) along a cold front coming from Canada combined to create a strong Nor’easter. The intensifying storm was already dangerous (Causing Unemployment and Bankruptcies), but when the subtropical power of Hurricane Grace was sucked into the maelstrom, it became a Perfect Storm (Financial Crisis of Epic Proportions). With 75 mph winds (Deficits) and 60 foot waves (Unsustainable Spending on Social Programs & Military Spending), the storm had become enormously treacherous”

#65 Herb on 02.23.09 at 7:23 am

Without malice to Luke, there is irony in someone in the advertising business hoist on the petard of the lifestyle (or at least parts of it) that he has been instrumental in selling.

There is no point blaming the victims, because we all are victims of the hype-the-expectations-cover-up-the risks shellgame.

#66 Sail1 on 02.23.09 at 7:57 am

#52 rural route


Follow your instincts. If you are worried and feeling pessimistic, something probably IS wrong.

Too much risk is hard on your health. Even if you succeed in pulling this off, and everything goes in your favour, you will wear yourself out worrying. Be kind to yourself and make things easier.

I’ll bet you already know what to do.

Well done! Sound good advice, administered with no malice.

#67 J.B. on 02.23.09 at 8:04 am

Luke, all is not lost. You made a mistake but you have many good things going for you. And talking about committing suicide over money is crazy. You need to take your focus off money and count your blessings. And get God into your life.

#68 PTDBD on 02.23.09 at 8:19 am

Luke, just do as you see others doing….

Petition the Government for a 1 million bailout.

– Explain your dire circumstances, the feared consequences and hardships. (Don’t forget the multiplier effect)

– Reassure them that it is to be considered a loan to be promptly paid back when circumstances change

– Above all, tell them that it is only a one time bailout

hmmmm, considering that last point… wouldn’t hurt to ask for 10 Million.

#69 Toronto C9 Renter on 02.23.09 at 8:32 am

I don’t think Luke’s situation is so dire.

Sounds like Luke and his wife currently have good jobs and they’re young so every reason to hope that their combined income will gradually increase, provided they work hard and make/keep themselves indispensible to their employers.

If it were me, I would:

– Not panic
– Do everything possible to financially prepare for the mid 2010 deadline. Reduce unessary expenses, save save save!
– As one poster already mentioned — seriously explore the option to walk away from the contract on the new house. (its still just a diagram, I’ll assume no serious costs have been incurred by the builder yet, also the builder may be gone by mid next year)

#70 Some Guy. on 02.23.09 at 8:45 am

Garth – quit this blogging and just become Prime Minister already would ya?

I have never voted before because frankly, all politicians to me are faceless you-know-whats but I would actually get off my rear to put my vote in for you….so would everyone on this blog I imagine.

Pretty please?

I think I tried that. — Garth

#71 J.B. on 02.23.09 at 9:01 am

Garth, your response to Luke was appalling. You never speak that way to someone who mentions suicide. I’ll no longer recommend this web site to anyone, nor the xurbia site.

Now I’m devastated. It’s all your fault. How could you? — Garth

#72 PTDBD on 02.23.09 at 9:14 am

The Arrangement

An observant Canadian has to wonder what exactly what “Export Development Canada” and Canadian banks are doing with Canadian taxpayer’s money.

Today: 150 million dollar loan to Nova Chemicals.
Today: Nova Chemicals has takeover arrangement with Government of the Emirate of Abu Dhabi.

#73 Jonathan on 02.23.09 at 9:16 am

This family makes 155K gross per year and has 140K in equity. Wait till you have children and only 1 income earner.

#74 double mike on 02.23.09 at 9:17 am

I think I tried that. — Garth

So what?
Got burned a little bit once and chickened out? ;)

Come on, Garth. You still ride your bike after that fall years ago, don’t ya?

#75 Jordan on 02.23.09 at 9:44 am

Should we point out what the chances are for developing cancer these days?

#76 PTDBD on 02.23.09 at 9:48 am

Newest TV Show expected to hit the airwaves…

“Hey Canada – Pimp My Company!”

The celebrated, conservative, safe, prudent Bank of Canada will lift its skirts and adopt looser collateral rules.
Everyone else is getting stimulus up the ying-yang, why should Canada be a nation constricted by prudence and good governance?

It is being reported that the Bank of Canada will soon begin accepting corporate bonds as collateral.

#77 Jack the Lad on 02.23.09 at 9:51 am

Only whores and cocker spaniels live their lives to please other people.

Garth is doing the right thing by being blunt and direct, even if it’s not what the guy wants to hear.

#78 dodgedabullit in Alberta on 02.23.09 at 9:52 am

Greetings: I do not want to steer this topic off course, as there are some great lessons here, but this is too good to pass up, and a bit of humour may be appropriate. Poster # 19 {Dan} commented: “Nobody with a brain in their head says with any sincerity to a pregnant teen,”congratulations! what wonderful news. I’m sure you”ll be the one unwed teen who’ll do just fine and buck all the statistics.” Can we imagine Sarah Palin as VP of our neighbor to the south?

#79 TS on 02.23.09 at 10:01 am

Hi Garth…. your posting is a great example of what I love about you…. straight from the heart candor. Your reader has, as you stated “rolled the dice” big time on a future home purchase.

While some people may view your reply as blunt or perhaps even mean-spirited, I view it as a direct and no b***shit approach. I only wish that we had politicians who were as honest. Hmmm…oh yeah, Canada used to have one!

Hopefully if there is another election soon you will consider running again. Canada needs straightshooters like you in government.

#80 John on 02.23.09 at 10:08 am


Garth was giving a very sobering reality check… I respect Garth for posting that, do you not think there are millions of people worldwide who feel exactly the same right now? Non-stop doom and gloom news will condition the best of us, his post is just stating the facts and doing it objectively. Let’s face it, in this financial disaster it’s hard to feel you’re actually in a good position – you need to appreciate what you have. People should NEVER start dumping their property just to rent unless a.) they bought on speculation or b.) they are living far beyond their means.

In close, well said Garth. You are wise far beyond your years.

#81 Signal Loss on 02.23.09 at 10:12 am

I understand Luke’s fear. Luke, first off, you’re young and in good health. Time = your “iWin” button. If you’d have made this mistake in your fifties you’d have much less altitude left to pull the nose up. As it is, you could screw up your entire 30s decade and *still* have your 40s to fix it and pull out. So take heart. I’m no financial advisor or economist, but like most people if one of you lose your job then the team (your little family) will be unable to carry the debt that this new house will entail. And i think there is a huge exposure there since both of you are in the same industry, which is about to be hammered (my impression is that media spending in the US is in precipitous decline, and this trend will naturally be reflected up here in the coming months if it isn’t already). Also, even if you retain your jobs and you close the house deal, I speculate that your ability to carry the debt a year or two from now will be eroded by increasing borrowing costs. I say that because I wonder where banks will make up all of the lost credit card interest that they used to rake in as people (start?) to deleverage and pay off their credit cards. If you’re a bank, you’ve got to make that lost interest income back somehow so you raise fees, come up with new fees (e.g. inactive account fees), but most of all you raise interest rates. So the decreasing set of people with debt suffer increasing rates as the banks try to maintain revenue streams to meet obligations to their investors and to the Crown. As these rates increase, the debt associated with that trophy house will crush you. So the answer is to jettison this millstone: make a massive mid-course correction and get out from under the agreement of purchase and sale. Get your lawyer working on it now – with pressure the builder may let you out on the theory that it’s easier simply to get someone else to buy it than to endure the negative publicity of suing you to enforce performance. And by the way if your wife fills your PVR with Escape to the Country and Location and Sue Richardson and all of that other real estate pr0n 24 hours a day as mine has for the past 7 years, I understand your problem. Luckily I’ve managed to avoid an expensive new house purchase by deflecting her into travel: it’s way less expensive, it’s fun, it builds family memories and it isn’t a long-term committment (e.g. you can skip a year or do something less expensive). Btw I’m at the end of my thirties so I envy you the time you have left – I would’ve done things differently myself.

#82 Increasing that 1% on 02.23.09 at 10:12 am

# 39. Glenn

Wtf? (re: female talk)

The guy in the letter will be fine.

‘God help’ any women (or girls?) around you. Not surprised you’d be happy to share your ‘wife’-slave picture…don’t think that’s quite what Garth was meaning…plus think he was JOKING

#83 MikeB on 02.23.09 at 10:20 am

Very Very Bad news around… much worse than Garth has EVER posted. Not even half way down to fair price values. The prices were not supported by any “good concept of economics”^gspc,^dji,hd,kbh,tol,ctx,xhb

Professor Schiller has some bad news about the economy in general..^dji,^gspc,DIA,SPY

Canadian Execs see dark days

Worst retail sales in 15 years

#84 robotgirl on 02.23.09 at 10:20 am

I’ve been reading your blog for awhile now and yes it totally freaks me out. But a lot of these scenarios you describe could’ve been avoided with some oh I dunno, common sense, some math skills, and not being so goddamn greedy! This guy totally pisses me off. Quit whining already!

My folks immigrated to Canada with $30 in the late 80s, no one was hiring and their English was remedial. Mum went to school part time and held a full time job here and there AND took care of us. Dad worked long hours for low pay back when the IT industry began. We lived in rented houses for 10 years before buying our first house @ $225,000 with 50% down. And we didn’t move until everything was paid off. Dad’s job was now on the other side of town. They rented and waited to find the right house around his work area bc they knew spending hours driving was like wasting money. 6 months later and debt free, they put down 90% on a $300,000 home, now worth $450,000 or so. And their combined income is about $30,000 less than this dude (in recent years, it was $60,000 when they bought their first house). I was puzzled for awhile about why my folks never took a vacation until they were in their 50s, or why mum always shopped many different grocery chains on specific days (bargains), or why they never owned a new car (but always paid in full cash when they bought used), etc. But I always had piano lessons, high school math tutoring, and no undergrad (+ 5 yrs living expenses) or graduate debt. That’s sacrifice that I’m grateful for and will be sure to pass down to my children. I’m almost 30 and some people snicker at the fact that I still live at home. But I couldn’t give a rats arse. Mum always said, if you’re not the type who will make a lot of money, then be the type who knows how to save a lot of it!

#85 MikeB on 02.23.09 at 10:21 am

Schiller points out that historically houses have not been a great investment ” a myth just to keep things alive”

#86 john m on 02.23.09 at 10:22 am

35 rick in Surrey on 02.23.09 at 12:56 am

As the late John Wayne said “Life’s tough, it’s even tougher when you’re stupid”.
……….lol my thoughts exactly.

#87 Rural Rick on 02.23.09 at 10:26 am

Garth if we can get Don Cherry to run for Prime Minister would you be his finance minister?

#88 Toronto C9 Renter on 02.23.09 at 10:30 am

# 79 John said — “Garth you are wise far beyond your years”

Garth, in that case you must be very, very wise!!


Bend over, kid. — Garth

#89 George on 02.23.09 at 10:30 am

Get off the Titanic Dude anyway you can. Pop on that life jacket and jump into those freezing cold waters and swim boy swim for those lifeboats in the distance that still have some room left on them. You’ll make it as long as you don’t waste another minute. Any other advice is moot.

#90 Contractor on 02.23.09 at 10:40 am

“And talking about committing suicide over money is crazy. ” That’s right…don’t forget the lesson of George Bailey in It’s a Wonderful Life. It’s still true today. The most dire of economic circumstances is absolutely not worth your life.

The problem is that the guy bought into the glossy house porn hype of HGTV and TLC. It probably doesn’t help that he’s a direct participant in the packaging and marketing of unrealistic expectations.

I’m a gen Xer and I agree with the other gen Xers here, we’ve been, and will continue to be, royally screwed through our lives.

So what to do? Understand that no one will take care of you, period. Understand that life ain’t fair. Understand that the only things you actually own are the things you posses free and clear of any debt. Anything else is enslavement.

Adapt or die, Luke. Simple as that. That’s nature’s law. Man up, take your lumps, learn the lesson, and move on with your life.

#91 Krazy Kacuk on 02.23.09 at 10:51 am

I always believed a house was a shelter, if you can make money when you sell, good for you. When I was in my early 20’s some people said to buy the biggest house you could afford, thinking it will be a great investment. I bought my last house in 94, off a bank, it’s payed for, still have to pay a credit margin but it’s only 30% of our earnings. My wife wanted a bigger/nicer house a few yrs ago… I said no…. she was not very happy. Why be house poor for yrs & eat KD for yrs? Never made sence to me. I feel for the guy, but we all have to be responsible for our actions, I’ve payed the price for wrong actions & learnt my lessons. I’ll still make mistakes, life is hard, wealth preservation should always be the first thing, after family & health. We all have to be carefull of what we do. Buy what you need, not what you want.

#92 GB on 02.23.09 at 10:57 am


I would have been more harsh on this guy. Who needs a $600000 house!

Outrageous. Especially since they are not wealhy by any stretch of the imagination.

People need to get a grip on reality. Because reality is just around the corner.

#93 pbrasseur on 02.23.09 at 10:57 am

A bit of sand in Gloom&Doomer’s gears:–the-numbers-dont-stack-up.html

#94 The Other David on 02.23.09 at 11:01 am

Fire Sale

The shocking truth about the value of your home
New evidence shows that Canadian prices could go down, and stay down, for a decade

#95 Not a Greater Fool on 02.23.09 at 11:06 am

Check it out…interesting

#96 HalifaxFamily on 02.23.09 at 11:11 am

The thing about people nowadays is that we are accustomed to being entitled. Entitled to stuff, entitled to trips, entitled to have it all. My parents, as well as my wife’s parents, taught us that it isn’t that easy.

We are super frugal as a result.

We did buy our first house back in Dec 2006, when there was a slight lull in the Halifax market (I think interest rates were up), and – yes – we put down over cash 25% down. We bought the cheapest house on our street. We moved into the area the primary (and only) breadwinner in the house can walk to work in 15 minutes. We didn’t have to buy a second car as a result. We did do renovations to make the house liveable and paid off that loan within 3 months. No granite countertops and nothing fancy.

Anyhow, we’ve been aggressively paying down the house and have no other debt other than mortgage debt. Zero net worth (sad to say) is within striking distance in the next half year!

#97 prairie gal on 02.23.09 at 11:16 am

Luke seems like such a sensitive soul when it comes to his net worth. However, I can’t seem to summon up the crocodile tears when he mentions his field of work.

It makes me wonder how sensitive people like him can stomach a career in advertising, which is, as one poster pointed out, a career in lying. Luke, you sold your soul.

Personally, I think HGTV, which is nothing but real estate advertising thinly disguised as entertainment, is partially responsible for the global economic collapse. They’ve blurred the line between advertising and entertainment – and took it way too far.

I also have to wonder at the ability of Luke and others like him in my generation to distinguish between what they see on TV and what is “real”. Far from the cynical, media-savvy generation we are touted as, apparently we, too, are nothing but sheep. All too willing to believe (and invest) that the good times will keep on rollin’ like the TV says it will.

My advice to Luke is to quit drinking the kool-aid he and his wife participate in dispensing. Turn off the TV, cancel the cable, stop believing everything you read, and gain some perspective for once. Buy a copy of Adbusters for good measure, just to keep you grounded in the reality of your own little part you play in this tragicomedy.

Luke, life is far more than your net worth. Go out and get some perspective – educate yourself, learn from your mistakes (and, YES you made a mistake in contracting to pay > half million for a nonexistent home).

Above all: Quit chasing a lifestyle being sold to you and start educating yourself.

#98 dd on 02.23.09 at 11:20 am

“And don’t tell me she made ya do it. If she did, send photos.”

Heartless and cold Mr Turner …. but oh so true.

#99 Bailing in B.C. on 02.23.09 at 11:31 am

#39 Glenn on 02.23.09 at 1:20 am
Congratulations on making your wife sound like a sex slave. I wonder if she is enamored with you as you are with her? Please send photos of yourself.

#100 dd on 02.23.09 at 11:42 am

94 Not a Greater Fool,

Great Read. Thanks

#101 dd on 02.23.09 at 11:48 am

#70 J.B.

“You never speak that way to someone who mentions suicide.”

Buddy, sometimes a kick in the pants is needed. $170k in equity, early 30’s … ? He bet, he lost. Now be a man and get down to work and dig out of the hole that you are in. The sun will rise tomorrow with or without you.

#102 dave99 on 02.23.09 at 11:54 am

#92 pbrasseur,

The article compares actual 1930 GDP drop with forecast 2009 drop. It is not a valid comparison.

Similarly, our 2009 figures will be in the context of 2009 monetary & fiscal policy which is far, far more aggressive than in 1930. Whether or not this will work long term remains to be seen. However in the short term I think most (all?) economists would agree that this will juice the GDP.

In total, a shoddily written article.

#103 David Bakody on 02.23.09 at 11:56 am

Great Post Garth ……. these poor little rich kids with that kind of pay checks …. they could not even afford to buy “After the Crash” give me a break? I remember the days looking through my pockets/couch and finding a couple of bucks and WOW maybe five …. and we though we hit the jack pot …. in any rate not too sure this was not a media set up ….. nobody that’s dumb are they?

#104 squidly77 on 02.23.09 at 12:31 pm

dd #97
Heartless and cold Mr Turner …. but oh so true.
just like money

lukes situation could turn out far worse than hes anticipating

firstly he can not just walk away on his deposit as he has collateral in the form of equity in his current home and if he welchs thinking that he can just walk on his $50,000
the builder could force him to sell his home to make good on the contract

secondly both his and his wives job are advertising related so the potential of one of them or even both of them losing their jobs is extremely high

if you ask me..hes in deep doo doo
sometimes when you act like a fool you need to be told so

#105 squidly77 on 02.23.09 at 12:35 pm

can someone tell me when gold is going to start performing

what a lame shiny metal

#106 Jelly on 02.23.09 at 12:38 pm


That was creepy…

(proud of having a mail order bride?)

These poor woman will marry anyone to escape

horrible situations, I hope you at least treat her well.

#107 inflation period? on 02.23.09 at 12:47 pm

#11 Steve on 02.22.09 at 10:48 pm

Who, in their right mind, would buy a house for $600,000 anyhow?

A high roller, perhaps?

A big shot?

Flush …

i have a house over 600,000, im not a high roller, or a big shot, just proper planning

he just had poor planning, give him a break, remember were all human, some are just smarter then others

people on the forum sure make it sound bad to have money.

#108 Some Guy. on 02.23.09 at 12:48 pm

I know you did try….but would you mind trying again???? We have such a lack of leadership, clarity and most importantly, long term vision…..we need someone like you. (don’t get a swollen head, but you are doing a great job here)

Then again, I wouldn’t want to deal with the politics of…well, politics so if you didnt try, I can’t say I could blame you.

#109 Keith in Calgary on 02.23.09 at 12:51 pm


105 posts and no one has said “use the force Luke”……..

#110 Sail1 on 02.23.09 at 12:52 pm

#89 Contractor

Adapt or die, Luke. Simple as that. That’s nature’s law. Man up, take your lumps, learn the lesson, and move on with your life.

A state of apprehension, uncertainty, and fear resulting from the anticipation of a realistic or fantasized threatening event or situation, often impairing physical and psychological functioning.

Hopefully this young man is in the right state of mind to receive all the negativity on this blog. If he is not in the right state of mind ,the embarrassment from posting of the letter and reply will have done more harm then good. Any professional would of certainly reflected on the possible harm, prior to posting the letter. RE aside someone’s mental well being, if evidently in peril should always be of primary concern.

#111 Happy Renter in North Van on 02.23.09 at 12:52 pm

Suze Orman put it the most succinctly when she asked the rhetorical question…

“Why did so many people borrow so much money they don’t have to impress people they don’t know?”

#112 CalgaryRocks on 02.23.09 at 12:55 pm

Robotgirl, you’re lazy and pampered. Get the hell out of your parent’s house and let them enjoy life for a change.

Seriously, you say you’ll pass your parents’ sacrifices to your kids! I doubt that you are equiped to take care of kids if at 30 you aren’t even capable of taking care of yourself.

#113 pbrasseur on 02.23.09 at 12:57 pm


“can someone tell me when gold is going to start performing”

In the long run never! Then why should it? it’s just an inert non productive asset, just like a house…

Just like other commodities gold is speculation.

#114 PW on 02.23.09 at 1:01 pm

Your money AND your life? So much for the ‘nurture strength of spirit, for it will shield you in sudden misfortune’ quote, huh? Have we really come to the place where we are worth less than our bank balance / salary / Mcmansion?

#115 Jelly on 02.23.09 at 1:15 pm



Excellent links!
Keep them coming!

#116 Makeorbreak on 02.23.09 at 1:28 pm

Some reading for Luke:

#117 squidly77 on 02.23.09 at 1:31 pm

couldnt agree more..

#118 squidly77 on 02.23.09 at 1:39 pm

Hopefully this young man is in the right state of mind to receive all the negativity on this blog. If he is not in the right state of mind ,the embarrassment from posting of the letter and reply will have done more harm then good. Any professional would of certainly reflected on the possible harm, prior to posting the letter. RE aside someone’s mental well being, if evidently in peril should always be of primary concern.

so should luke not take your advice
can he not sell both places and maybe come out even and preserve his mental health

or is money his greatest concern

#119 MWJ on 02.23.09 at 1:40 pm

“Ever notice the expression on these people’s faces? NOBODY seems happy anymore, and I think it’s precisely this reason why we’re in this mess in the first place.”

That’s funny. I had noticed that too. I never understood why so many people looked so sour until I got married. Now that I’m unmarried again, I’m happy again.

#120 Nathan in Edmonton on 02.23.09 at 1:40 pm

Garth I’m sure you’ll be flooded with these types of letters soon as people stop denying the truth around them. This gentleman is hardly ruined but will have to pay a price for wanting the bigger and better home – one years take home salary if he is unable to recover his deposit.
My wife and I are also in the ad business and I expect one of us to lose our job, or at least have a decrease in salary, this year, and this gentleman should expect the same.

#121 Glenn on 02.23.09 at 1:41 pm

To Jelly, Bailing in B.C. and other kool-aid types, I will tell you the same thing I told my mother when she commented that American females are “smart” because they marry men that can cook and clean.

“If marriage to a foreign girl is paying for a slave, then marriage to a Western female is paying to be a slave.”

There is a “market correction” of sorts coming. In fact, its been brewing for decades. Like realtors, you and your kind are too deeply invested in your particular paradigm (the supposed superiority of the Western feminist). Further like realtors, you are incapable of seeing the coming storm. Hint: google Marriage Strike.

You see, men of all ages have the remarkable ability to dissappear into the misty mountains of The Happy Hunting Grounds, with squirrels a-plenty, if need be. Anything that could remotely be considered “dead weight” will most assuredly be left behind.

My wife is profoundly intelligent, resilient, tolerant, and understanding (and a mad hottie to boot!). We are well away from any metropolis, so she has no fear of being “left behind” as it were.

My point? Fear less for my wife, and fear more for your daughters…and yourselves.

#122 WestCoast Girl on 02.23.09 at 1:45 pm

#108 Keith in Calgary on 02.23.09 at 12:51 pm

OMG, you just made me spew coffee all over my laptop. LOL.

Must admit: really happy not to be in Luke’s shoes…

#123 Makeorbreak on 02.23.09 at 1:49 pm

Anybody watch HGTV’s Property Virgins? I can’t stand Sandra Rinomato. She is so self-serving and manipulative, yet, I can’t believe some people are so gullible. She will talk the buyer into financing the maximum possible (approved amount + downpayment).

Last week on a particular show, she said the monthly reimbursement of a $400,000 mortgage isn’t much more than a $300,000 mortgage. What a crook. It may not be a lot now, but what about 5 years from now when the balance of the mortgage has to be renegotiated at a probably higher interest rate, let alone if the market has fallen and the house is worth $200,000? There will hardly be any capital paid at that time, the homeowner will be underwater but the crook will have pocketed her commission.

The longer this show stays on air, the more Rinomato will need good lawyers because she is soon to get sued.

#124 Dee on 02.23.09 at 1:54 pm

I know the credit markets are tight but should BoC really be relying on the bond rating agencies? Everyone knows how reliable they are.

I shuddered after reading the article.

#125 squidly77 on 02.23.09 at 2:03 pm

when i was a kid i carried a few extra pounds of weight around
the other kids at my elementry school called me fatso and tubs on a regular basis
i hated it so much that i quickly lost the weight and have been at a normal weight all my life since

sometimes you have to be cruel to be kind

#126 lgre on 02.23.09 at 2:04 pm

“Fire Sale

The shocking truth about the value of your home
New evidence shows that Canadian prices could go down, and stay down, for a decade

it serves this guy right, what is he doing buying a $1.5m property on a CA, people forget that jets, yachts and million dollar homes are for the truly wealthy..not for the working stiff.

#127 squidly77 on 02.23.09 at 2:08 pm

stephen harper will be on CNBC tonight @ 5 PM MST
he will be explaining to kudlow how healthy the canadian banks are..seriously

#128 Carole AB on 02.23.09 at 2:35 pm

Deadmonton Mcmansion Bust:

I used to wonder how much money people must have been making to afford a McMansion. The lots sold for $150,000 when they first developed this farmer’s field in 2003, and we thought that was too much money at the time…..I am sorry to see people get so in over their heads. There sit many new unsold McMansions on a nearby Golf course development as well.

MLS: E3175104
Court of queens bench judicial sale $428,500

#129 smwhite on 02.23.09 at 2:44 pm

#104 squidly77

Gold will make a move when the “investors” or people like our good friend Luke here show up to the gold party, at that very late. Word spreads fast, gold is the only asset that hasn’t lost value(yet) and next thing you know, its water cooler talk.

The same types whom ignored many warnings that the equity markets(TSX hitting 15000 in 2007 and 2008) , real estate markets(300K average home price 65K average family salary, 5 to 1 ratio) and commodites (Oil at $140 barrel) were overvalued and ignored the coming of the recent deflationary period, watch another gold move and chase it.

If there isn’t enough fear in the air yet, by the time the DOW hits 6K and possibly even 5K, there will be.

Market timing is key.

1995 – 1997/2001 – 2003 was the time to buy stock

1995 – 2005 was the time to be buying and flipping homes

1995 – 2005 was the time to buy oil and gold

Looks like 2007 was the safe time to sell, everything.

Is it just me or does it seen that the more “help” we get from Government and central banks the more irrational exuberance there is?

#130 CM on 02.23.09 at 2:44 pm

Bill-Muskoka: don’t know why you couldn’t get into the NYT articles yesterday. I don’t have a sub.

No need for personal attacks, either on me or Jake (#36 and #131 – Three Harbingers.) I wasn’t targeting you.

I was examining the bubble of Obamamania. If Obama doesn’t have the authority to direct military operations, I think he may be operating in a military dictatorship.

Whatever else it is, it’s also a waste – of lives, MONEY, and material. And it won’t work.
Re personal debt:

I think the lessons of my mother’s and father’s generation must have been engraved deeply on me. My mother graduated from high school at the beginning of the 1930’s at 17. My grandfather didn’t lose his job, but lots of people did. My mother didn’t go to university as she wanted to but found work and helped out the family. She was the eldest of nine children. Her five brothers all joined the forces during WW2 – two army, two navy, one air force. One died when his Corvette was torpedoed.

My parents never threw their money around. If something needed fixing, they fixed it. They bought the necessities. When things got a little easier, they indulged in a few luxuries.

I’ve never been able to stand owing anything. I pay my bills when I get them. The mortgage on the house was paid off as quickly as we could manage it.

About ten years ago, when the fix-it-and-flip-it or the buy-and-completely-renovate-it craze was at its height, someone mentioned that people didn’t seem to be very much happier after the disorder, frenzy and expense. The Zen of Reno – the price of granite counter tops doesn’t include enlightenment. Give me a ton of books over a ton of granite counter top any day.

As for the young man and his family at the beginning of Garth’s post, I just don’t know. Don’t incur any more debt. Get out of that future house deal. Hunker down for a while and wait.
Tom Dispatch for today – the future of America’s towns. There’s lots we don’t know about yet.

Tough Times in troubled towns.

People need food, a place to live and meaningful work. Apart from that, nothing else really matters.

The Onion News has the cure for shopping withdrawal – plus a lot of salty language.

#131 Sail1 on 02.23.09 at 2:45 pm

#117 squidly77

Your missing the point. The advice is not the issue, its the manner in which it was abruptly inflicted.

#132 David on 02.23.09 at 2:48 pm

House Lust

To this gentleman:

You have already made your decision. It is too bad you never sought some expert advice prior to entering into your present situation.

You are going to be okay as you and you wife both have jobs and the propect of jobs for others will look better as we go forward. There are instruments out there who offer insurance for jobs. However, it is expensive. But the salary you are both making it is worth a look if you are concerned.

My additional advice to you is put your house on the market immediately even a little below the average house price in your range and sell it now. Depending on your situation you may have to rent or move in with parents or relative. swallow your pride and do it if it is possible. You do not want to end up in a situation where you have two houses that you must pay a morgage on.

This will give you some peace of mind even if it means a little discomfort until 2010. You are young and by 2012 this will look like a bargin.

But get rid of your existing house immediately and save as much as you can for the next two year to increase your down payment to reduce your monthly payments.

Open a TFSA account for you and your wife in order to gain the benefit of interest free money for two years.

#133 Bonnie N BC on 02.23.09 at 2:50 pm

The lack of sympathy for Luke and his family is a bit disingenuous from the posters.

Hello boomers out there – remember the early 80’s when we were thirty something and real estate was underwater due to inflation and 18% interest rates? I not only lost my home but my marriage.

My advice Luke quit worrying and act. Negotiate with the builder directly and see if you can come to a mutual agreement that is fair for both parties. It’s worth a try – if you act in good faith.

The lesson learned should always be based on one income not two. When we bought our current home in 2001 we based the whole transaction on one wage because of the 1980’s experience.

You will survive and it’s a tough lesson but you have to accept the situation and make the best of it and control your destiny. No shame, no regrets once you take control.

#134 TheComingDepression on 02.23.09 at 2:59 pm

AIG is reporting an 80 BILLION dollar loss for the quarter. How do you think the markets will like this one? Can you see the DOW at 4000 or under within a few weeks? This folks is called a “DEPRESSION”. Check out what Martin Weiss has to say!

#135 Diabolo on 02.23.09 at 3:02 pm

Jim Cramer from CNBC is now saying what Garth has been saying all along…. Social Choas Coming

#136 TheComingDepression on 02.23.09 at 3:03 pm

My apologies the US government owns 80% of AIG and they are reporting a 60 Billion (like it matters) quarter loss.

#137 vtj on 02.23.09 at 3:06 pm

Great post, Garth.

Luke, some harsh words on this blog but some good advice as well. Swallow your pride and do what’s best for you and your family. As many have mentioned already, the sun will indeed rise tomorrow.

#111 Calgaryrocks:
Why pee in Robotgirl’s cereal? She has every right to be proud of her family and it’s accomplishments. To suggest that she’s “lazy and pampered” when you know nothing about her is totally ludicrous.

#138 MikeB on 02.23.09 at 3:18 pm

Diablo 134 THAT IS UTTERLY SCARY… truly a great find. AND agreed those who indicate that Garth is some sort of hoaxer trying to sell books and is a gloomer doomer. Kramer is a wall streeter through and through and never known as a gloomer. THIS is beyond GLOOM
indeed. WOW Others must watch that
I guess he is pro nationalization.. Wonder if he is accurate in his take on the ifs then whats?

#139 Jeannie on 02.23.09 at 3:18 pm

Makeorbreak….re.’Property Virgins’ you are so right about this woman.
I wonder how many of the young and gullible buyers are already regretting Sandra’s ‘great picks’ for them.

Do you suppose they’re compensated for appearing on the show, or perhaps their compensation is the house that Sandra convinces them to buy.
I’m not into trash-talk, I just hope that this show quickly runs its course before people get hurt.

#140 eddy on 02.23.09 at 3:24 pm

“men buy the cars, women buy the houses”

I’m thinking Luke is guilty of 1)breaking the above law, 2)giving in to his speculative nature

my advice to Luke is don’t close, but maybe the builder wont even build. Luke is just like the guy in the Mcleans article-anyone who buys firm without having their finances in order is a complete idiot. regarding pre construction purchases, i’m thinking it should be illegal to buy or sell something that doesn’t exist.

this link is unrelated (alan keyes latest rant):

on an unrelated note

#141 Bailing in B.C. on 02.23.09 at 3:41 pm

120 Glenn on 02.23.09 at 1:41 pm

Not drinking the cool aid just calling it as I see it.

Your wife may well be profoundly intelligent, resilient, tolerant, and understanding and a mad hottie to boot but when you make comments like this:

“I married a foreign girl much younger then me that works all day while I make posts on obscure Canadian webpages.”

It reflects poorly on you not on her.

#142 Jeff Smith on 02.23.09 at 3:42 pm

Extremely well said!

#6 squidly77 on 02.22.09 at 10:33 pm

this guy that wrote that piece to the blog author is nothing short of a cry baby
for cripes sake man he still may make $170,000 on his home that someone else will pay (title of this blog)
and now hes crying cause its not all working out the way *flip this house* had promised…how sad

when people gamble with hundreds of thousands of dollars they should know what the hell they are getting themselves into..the money world is the most unscrupulous place imaginable..if you play with snakes understand them..or as they say

sometimes you get the bear and sometimes the bear gets you

when dealing with big money never ask for advice as to do so would expose your vulnerabilities
educate yourself or understand that not all things are for could care less whos pocket its in

#143 Jeff Smith on 02.23.09 at 3:43 pm

These are called Advertorials, the favorite tools of RealtyWhores (Tm)

#5 Keith in Calgary on 02.22.09 at 10:29 pm


Did anyone in Calgary who posts here catch the DELIBERATE FRAUD being passed off as news, by the real estate shills on Canwest GLOBAL Channel 7 news tonight at 6:00 PM ?

Their resident talking head introduced the lead “news” story being presented, that was all about how first time buyers are now rushing back into the marketplace due to the price drop in Calgary, and the sudden magical affordability of homes brought about by same…..heh. They interviewed some peroxide blonde realtot bimbo and a young naive pair of fools who said that “it’s close to our rent so we’re looking at buying”…..

They also talked about a new home builders downpayment loan program for people with no money, and stated “emphatically” that it was not the same a zero down mortgage plan, even though the builder forgave the loan after 5 years.

There was absolutely no empirical evidence (zero, zip, zilch, nada) presented in this “news” clip to substantiate and show that the “statements of manufactured consent” from the “newsmakers”….errr….willing shills…were anything more than hyperbolic blather and outright lies designed to placate their advertisers.

REMAX is a Canwest Global news lead TV sponsor………

#144 Makeorbreak on 02.23.09 at 3:56 pm

Jeannie, I don’t know how this stupid show works. After all, she shows them only 3 houses. We suppose she has shown them a lot more and only 3 made the cut. They then ‘have to choose’ between those 3.

Since Gail Vaz Oxlade gives $5,000 on her show, I would suppose Property Virgin gives them something like a few thousand dollars rebate on a car or other big ticket item. Still, the CRTC should abolish it altogether since it only serves the purposes of the RE industry and encourage people to spend way beyond their means.

#145 Keith in Calgary on 02.23.09 at 3:57 pm

West Coast Girl…..

I pleasure.

#122 Make or Break……

#146 Keith in Calgary on 02.23.09 at 4:00 pm

West Coast Girl…..

Sorry about that……heh.

#122 Make or Break…..

I hear you about Sandra…..she has the most grating voice on TV next to Rachel Ray……and her manipulative egotistical posturing on that program annoys me to no end. I’d imagine the foolish participants who go on her show have to sign a multi page waiver and get independant legal advice beforehand.

#147 HJD on 02.23.09 at 4:02 pm

Judging from the tone of this website, Garth Turner and almost everyone leaving comments appear to be getting a psychological kick from the bad times we are experiencing. However, I believe you’re headed for an emotional letdown. As soon as the banking and mortgage systems get straightened out, things will start to improve. Moreover, the suggestions that we purchase generators and other survival items will be remembered as equivalent to those equally dire warnings in the 1950s that we should invest in backyard, nuclear bomb shelters. Also, your beating up on Luke and Schezee (#3) seems a little overdone.

Oh course things will improve. But not this year. As for having a generator and being prepared, well, I’m just a boy scout. BTW, my mother had a bomb shelter. I found it extremely handy. — Garth

#148 rory on 02.23.09 at 4:15 pm

Sorry to lose focus on Luke but just saw this listing …reminds me of a laundry detergent commercial as in “can you see the difference, no can you see the difference” …these folks spent $300K in reno costs (yikes) and it looks well – fine… were did the money go … I sure don’t see the WOW …in the old days you did a reno & you got maybe 25 to 70% back depending …you watch these new HGTV shows …put in $20K get 100% or more back …crazy man crazy.

#149 dodgedabullit in Alberta on 02.23.09 at 4:19 pm

Greetings: There is a bomb ticking away that has disppeared from the radar screen for those who think we may recover in 2-4 years: Peak Oil, google it!!

#150 rory on 02.23.09 at 4:32 pm

My previous comment did not come out well …I meant that if you spent $100K before bubble madness you might get $20K to $70K back of the $100K when you sold your home depending on the type of reno…since HGTV and house bubble madness it seems that if you spend $100K you might would expect to get $200K back in house apprecation …kinda, sort of better explanation…but still craziness.

#151 MikeB on 02.23.09 at 4:33 pm

Stock markets tank almost 300 points. Maybe HJD things in your blue pill world are all nice but here in the real world its getting very dangerous .
Of course our leader states the obvious

OTTAWA (Reuters) – Canadian Prime Minister Stephen Harper, voicing deep concern about the financial system in the United States and other countries, said on Monday he could not see how the current recession can end until they are fixed.
“We’re obviously all hugely worried about the American financial system and about the financial system of some other countries,” the Conservative leader said in an interview in New York with Fox News.

This is a multi year problem where banks must de leverage and if you think that will happen overnight you are huffing glue dude.
The solution… Squirrel bait.

#152 RJAG2034 on 02.23.09 at 4:34 pm

When Consumers Cut Back: A Lesson From Japan

Very interesting article;
As recession-wary Americans adapt to a new frugality, Japan offers a peek at how thrift can take lasting hold of a consumer society, to disastrous effect.

#153 jsan2008 on 02.23.09 at 4:35 pm

Well worth reading this for a flashback to March 2008:

“Every few months, economists dispel rumours that the market’s nearly decade-long hot streak has finally peaked. Sandra Rinomato, a real estate agent and host of the HGTV Canada reality show Property Virgins, is resolutely optimistic. “The predictions of a softening market were wrong,” she says. “

#154 Glenn on 02.23.09 at 4:36 pm

For Bailing in B.C. on the topic of comments that reflect poorly?

“I feel that ‘man-hating’ is an honorable and viable political act. Sexism is NOT the fault of women — kill your fathers, not your mothers.” — Robin Morgan, Editor of MS magazine

“We are out to destroy the family. The best way to do that is to begin by attacking its weakest member, the unborn child.” – Simone Weil

“We can’t destroy the inequities between men and women until we destroy marriage.” – From Sisterhood Is Powerful, Robin Morgan (ed), 1970, p. 537

Now, what I would like everyone to note is, I am some nameless faceless guy from Montana. The above quotes are from “respected” feminist educators, editors, and philosophers.

I believe the term “selective indignation” is fitting.

#155 MikeB on 02.23.09 at 4:50 pm

Where are housing prices going? Garth is in good company based upon the expert from BNN

#156 squidly77 on 02.23.09 at 4:55 pm

As soon as the banking and mortgage systems get straightened out, things will start to improve.
click on the four bad bears chart on the right

these markets are going to places that i would rather not think about

#157 Jim TUba on 02.23.09 at 5:01 pm

Feb 23,2009 USA
Poll: Most Americans fearful about state of country
Seventy-three percent of those questioned in a CNN/Opinion Research Corporation survey released Monday say they’re very or somewhat scared about the way things are going in the United States

Feb 23,2009 CANADA
Consumer confidence on the rise: Harris-Decima poll
41 per cent believed now is a good time for a major purchase compared to 35 per cent in December

#158 Some Guy. on 02.23.09 at 5:06 pm

RobotGirl – good for you. I am doing the same as you (living at home) and have been taught the same lessons by my parents.

For those who hate you, let them. Living at home doesn’t make you less of an adult. If you can do it, then it makes you smarter and way ahead of the game.
I am in my late twenties and plan to buy my first home next year with about 40% down. With a diligent savings plan and an attitude of living within my means, my life will hopefully be simple and fulfilling for years to come.

#159 lgre on 02.23.09 at 5:07 pm

HJD – you are the only headed for an emotional let down, the U.S is on the verge of bankruptcy and Canada fill fair in your eyes? Just like this was going to pass by us, as we were told by all the EXPERTS…do a little reasearch and find out how many malls will close in the U.S in the next few months..the stores in those malls sell Canadian made product btw..but yes, we will be ok in March…everyone on the board better start buying RE like candy out of a gumball machine or we may all be priced out of the your head a shake.

BTW- Harper just made a statement today saying that Canada will be in rough shape until the U.S financials get in long do you think that will take?? 1 month? 2 months? or maybe years?

Do a search on Gerald Celente who predicted many events based off trend, he is predicting a 2nd Depression..I think he may be right.

#160 pud on 02.23.09 at 5:16 pm

108 Keith in Calgary – All your Luke are belong to us…

#161 Zoronqueen on 02.23.09 at 5:22 pm

This guy seems like the same story as ours except we are in a slightly better shape, and we both work in health care so our jobs are more “secure”.

This guy should take action a.s.a.p and get your house on the market. We had our house on the market since Sept and only got offers when we lowered our asking price by 35K. A year ago our house would have also sold for 375K and now we’ll be lucky if we get 280K so Garth is being conservitive with the numbers. It’s really hard to find a willing buyer who can qualify for a mortgage. These days lenders are stricter and we have 3 pending offers so far that did not go through….

No, you don’t have to jump out the window. IMO With money restructuring you still have hope to keep your house. Also liquidate anything you might have. Yes, the current house you live in might depreciate and eat up all you equity, but it’s a place (nice) to live and if you can keep up the extra expenses increased living cost. The house prices will eventually go up in about 15 years or so. at 30+ you will be ok.

The other option will be to sell both places and rent. Don’t worry you’re still in better shape than a lot…

#162 blackout on 02.23.09 at 5:31 pm

re: the suggestions that Luke walk away from the deal…come on guys, do you really think it’s that easy. market’s dropped – the builder is going to come after him for the difference.

#163 MikeB on 02.23.09 at 5:32 pm

Just in case people STILL doubt Garth’s prediction they should have a look at the newly created RE futures market and the discussion on BNN

In essence economists predict a 8-10% drop in prices in Canada this year with a recovery for next year.
The real data from TERANET indicate an 18% drop and no recovery for 5 years. Yes you heard it here first… a YEAR AGO that is….from Garth … Now we have some stats from other experts indicating a much worse set of numbers.
Any more doubting thomases after this and well.. not sure what you guys are expecting but it ain’t reality that’s for sure. Once this hits the street you will see a big freeze up in the market for sure. Of course once the US nationalizes their biggest bank you will see much worse stuff … a minimum 400 point drop later this week..

#164 feeling mean on 02.23.09 at 5:40 pm


I dont need gold. All I need is a gun. Then, I have your gold.

#165 Future Expatriate on 02.23.09 at 5:41 pm

#112 Gold may be merely a “non-performing” commodity now, but when all paper finally crashes (and that is absolutely inevitable), gold will be the only money left, and a “new” monetary standard.

Officially or unofficially won’t matter.

#166 Jeff Smith on 02.23.09 at 5:49 pm

Inflation Rates falls to zero. This is from the Canadian Press.

#167 TheComingDepression on 02.23.09 at 5:49 pm

Oh course things will improve. But not this year. As for having a generator and being prepared, well, I’m just a boy scout. BTW, my mother had a bomb shelter. I found it extremely handy. — Garth

I personally do not think things will improve to where we were last year, in our lifetime, or even CLOSE TO IT. You have a world war on the horizon, peak oil, world bank failures ( CANADA INCLUDED),food shortages, climate change, massive business failures, housing collapses’ up to 90%, the end of US dominance in the world. If India and China were to consume as much as N. Americans, it would equal 73 BILLION people on this earth. Many incredible facts and figures in the book —-“WHEN GIANTS FALL” an economic roadmap for the end of the american era.

#168 Carole AB on 02.23.09 at 5:50 pm

#146 HJD

I know this site has some scary stuff at times and I have spent a few sleepless nights here and there. So it is not just for kicks that I visit it. I had a wake up call in Dec. (besides the Crash) listening to billionaire philanthropist Stephen Jarislowski, who survived the Great Depression & WWII. I have taken his advice “not to pretend today’s economic situation, which is more dangerous than any war is going to go away”, and “to quit silly spending now or prepare to embrace poverty”. I fear it is true and thanks to Garth, and many others this site has had some great posts and links to remind me of the above.

Luke: As you can see many people care and have responded with good advice to your plight. I wish you well. You will probably feel better after taking positive action. You will still be in good shape and think of all the people in the U.S. and Europe who are much worse off. If you are still seriously down please see a Dr.

Listen segment 1

#169 Blair on 02.23.09 at 6:13 pm

I just hope Garth prints more emails like this…Exactly what do we need these large homes for?

I live in a neighbourhood with 40 – 50 year old bungalows that average 1000 – 1100 Square Feet. With young families now averaging less than two kids and divorce at around 50%, who NEEDS these 500K+ homes.

Is it greed? Yes. Is it ego? Yes.

Honestly, when will the insanity stop? And I wouldn’t be a bit surprised if there was a whole lot of emotional motivation behind the purchase of this home…

#170 BERTIE on 02.23.09 at 6:16 pm

“My family and I have our health…but is that all we’re going to have?

Is there any optimisim out there for me to cling hope on to (other than my families health)”

Honestly Luke, shape up and quit being such a whiner. Take responsibility for your actions instead of shooting off to depression row. I am in far worse shape than you will ever be, mostly from physical pain and debilitating illness, with not a hope of getting my head above water in my lifetime.

You have some gall complaining that ALL YOU HAVE IS YOUR HEALTH!?!!!!!!??? That makes me so mad I want to explode.

How dare you.

I’ve lived just above or in poverty most of my life. I’ve worked hard. I’m truthful and good for no other reason that to be truthful and good. I’ve never asked for anything from anyone and if I got myself in trouble, I lived with it. I have a simple home that some people would have me be ashamed of. Should I be ashamed of having to put up with a life at the poverty level that I have no control over? Should I respect those who look down at me?

Your problem Luke is that you and your wife allowed your mutual insecurity to rule you. If it ruins your ridiculous dream of house too big for you, suck it up, and check your insecurity before you buy any more self-esteem propping toys you can’t afford.

Get your head and spirit into a stronger position, by realizing that a big house is usually owned by a person who is trying to hide the fact that they have no true self esteem.

Luke, snap out of it. If you lose the house, so what, because as you moped, “at least you’ll have your health” ..which is more than people like I have, yet I seem to be better off than you in spirit, and happier, perhaps because I have so little and my true struggle is bigger than you will ever know. You have no idea that the only thing you truly need is your health, and I think you are poor in spirit because you haven’t bothered realizing that you already have it all. Quit being shallow and you’ll be fine.

#171 rural route on 02.23.09 at 6:18 pm


You read MS magazine? No! Have you really read all those feminist books? Or did someone else read them and then boiled them down to a few lines that you then passed on to us?

What do your select quotes of women advocating the attack of unborn babies, hating men and destroying families have to do with this blog?

What are you trying to say?

If a woman is strong, and is truly equal to a man, is that not a good thing? Wouldn’t the world be a better place if all women truly were equal to all men? Couldn’t it be seen as somewhat of a relief to men, if women shouldered half the load?

In all cultures, to wildly varying degrees, there is an element of oppression towards women. It is a simple truth that is holding the whole world back.

But how did the discussion come to this? What were you saying?

#172 Jeff Smith on 02.23.09 at 6:20 pm

Want proof that companies that rely on ad revenues can go under???

#173 whiterock on 02.23.09 at 6:23 pm

to #3 scheezee You have rightly taken a bit of a lickin in the posts so far.
You remind me of the kind of person everyone in the workplace avoided like the plague. Where any innocent, slightly ambiguous, or humorous comment had the potential to become a professional death sentence to the poor principal.
Not that “harrassment” in the workplace didn’t occur from time to time but people at the margin could misuse these rules simply because their knickers were bound up too tightly and cut off blood flow to the brain.

So, scheezee, you need to lighten up a bit.

Garth’s comment “And don’t tell me she made ya do it.

If she did, send photos.” was funny. I interpreted it as Garth implying that it must have taken a very beautiful girl to make Luke do such a stupid thing. What’s wrong with that.
If you took it differently then that’s your problem.

#174 Bailing in B.C. on 02.23.09 at 6:27 pm

#153 Glenn on 02.23.09 at 4:36 pm

Obviously those women are complete whack jobs. Certainly not “respected” by me.

To put an end to this pointless and off topic exchange:
You have my sincerest apologies. Trawling the Internet while your wife is at work offering to send photos of her to strangers is not the least bit creepy. Not even a little bit.

You will hear no more from me for a while, as I am off to compile a list of all the people on the planet worthy of my indignation. Your right again. I shouldn’t limit my criticism to people that I actually interact with. Inclusive indignation requires that there be equal indignation for all.

Now let me see…. Hitler, the guy who invented musik, that irritating woman on property virgins, Real Estate Expert…..

I could be gone sometime….

#175 squidly77 on 02.23.09 at 6:57 pm

There will be blood, in the sense that a crisis of this magnitude is bound to increase political as well as economic [conflict]. It is bound to destabilize some countries. It will cause civil wars to break out, that have been dormant. It will topple governments that were moderate and bring in governments that are extreme.
there will be blood in the streets

#176 Bruce on 02.23.09 at 6:59 pm

World Financial System Insolvent:

#177 squidly77 on 02.23.09 at 7:19 pm

from BNN

#178 Jim Tuba on 02.23.09 at 7:31 pm

I am really quite astonded by Mr. Turner’s predictions starting to come true. Denial is easy, truth is difficult.

Here is another

#179 Darryl on 02.23.09 at 7:45 pm

Off topic , I just watched Harper on Kudlow. I thought he looked good. It seemed Kudlow was impressed.
He even gave more time than was alloted to the interview. Can’t say I’ve been happy with Harper lately but this NY trip shows some pro active ideas. Watch the TSX tommorow and see if he left his mark .

#180 Jeff Smith on 02.23.09 at 8:06 pm

Congratulations Glenn, that you have a successful relationship. Be proud of what you can achieve, a successful relationship is really hard to come by now a day. You should show us her pic, you lucky dude!

#39 Glenn on 02.23.09 at 1:20 am

So the choice is reality over perception? I would much rather be told the cold hard truth over touchy feely fluff. If the 30-something guy was smart he would sell his house right now, clear out all debt, and get into a rental.

As far as the wife issue, females in the West initiate 70+% of all divorce proceedings, 90% of custodial mothers openly admit they manipulate children against their fathers, and in Ireland 1 in 4 babies born is not from the putative father.

Like real estate buyers, men are well into a “Marriage Strike” resulting in marriage rates that are the lowest in recorded history. Myself not included, as I married a foreign girl much younger then me that works all day while I make posts on obscure Canadian webpages.

But at least our total debt is less then $20,000USD. God help the kid in the letter.

P.S. Ill send pic’s of my wife any time, shes a major hottie and Im more then glad to show her off!

#181 Mark on 02.23.09 at 9:07 pm

$70k and $85k to buy ads? That’s a $30-$40k job, tops. Even 30-year-old engineers don’t make that much in Toronto, and they’re the lifeblood of the economy. No wonder this economy is so messed up.

#182 Increasing that 1% on 02.23.09 at 10:06 pm

#120. and #153. Glenn

You reinforced how outdated your views on females are.

That’s great that your wife is ok, she knows what she’s doing and getting what she wants, right.

“Fear more for our daughters and ourselves”? wth?

Though, as #173. ‘Bailing in BC’, says, this is off topic, you don’t seem to agree.

It seems, your economic situation is currently relieved by having your ‘wife’-for now-take care of you.

Is this what you’re trying to propose to the Luke’s out there?
ie: Don’t worry, Luke, you can be ok without your ‘Western’, ‘deadweight wife’, who’s contributing even MORE, by the way Glenn, to the family finances (and probably, as statistically is the case, more to the care of THEIR child, and THEIR housekeeping chores).

Didn’t see mention of problems with his wife, but rather thankfulness for his ‘family’s health’

Why are you quoting stuff from 39 years ago?!.

The workforce has changed in that time.
You don’t seem to know what you believe in, as you contradict yourself.
You seem to be referring to socialite trophy wives, somewhere in LA/ or hollywood?

Quote for you-by unknown:

‘You can have what you want, … if you pay for it’
(and yes, that works both ways, you know, for male and female)

#183 JanCzar on 02.23.09 at 10:09 pm

Garth, your 0bvious pleasure at this poor chap’s all to human predicament is embarrassing. Pure schadenfreude.
You could have done better. No class.

Helping people is not lying to them. — Garth

#184 Fox on 02.23.09 at 10:10 pm

My family and I have our health…but is that all we are going to have?
Is that all? That pretty well sums up why we are where we are. “I deserve” No need to be grateful for anything.

#185 Just Wondering on 02.23.09 at 10:25 pm

Can the guy not just sell his house and collect the $170k in equity, and then walk away from his deposit on the 600k house? That still leaves him with 120k in equity…..a nice nest egg from which he can safely raise his family for the next couple of years, even if they both lost their jobs.

Or will the builder try to sue him if he walks?

#186 wondering on 02.23.09 at 10:31 pm

Wow, Glenn from Montana, way to drag in some out-of-context quotes. Those women didn’t barge in here talking shit about you or other men – but you came in, acting the player, bragging about your enslaved wife who works her ass off while you hang out on the Internet all day.

As for that last quote:

“We can’t destroy the inequities between men and women until we destroy marriage.” – From Sisterhood Is Powerful, Robin Morgan (ed), 1970, p. 537

Dude, you exemplify all that is wrong with inequities between men and women. You keep talking about men going on marriage strikes? Sounds like these women had the same idea in 1970.

Guess you’re all on the same page then.

#187 canuck on 02.24.09 at 12:15 am

Did anyone listen to Paul Harvey, 760 AM Detroit station, today? Get this: guy earns $20,000/year. Goes out borrows $5,000 and puts it down on a 1 1/2 million dollar home, applied for a mortgage and got itl Monthly payments were $7000/month.

My Gawd! Well at least all this piker had invested was the $5,000–under US rules, he’ll just walk away, unlike Canadians who are forced to pay.

Kinda of shame, debtor’s prisons, are no longer in existence in the world. Seems what’s needed now are debtors and lenders jails.

#188 prairie gal on 02.24.09 at 2:40 am

Has it occurred to anyone that this social pressure to never say anything slightly contrarian is indicative of a subtle yet profound social decay? Since when is telling the truth unacceptable behaviour?

Its not the fact that lobby groups and governments try to spin the message that bothers me. Its the peer censorship – kinda like ‘tall poppy syndrome’ but applied solely to using political correctness as a weapon against threatening ideas or statements.

When the “feelings” come before “facts” you know we, as a society, are sliding into the abyss of mediocrity and decline. You can already see it in the education system.

#189 Ally Ally Oxycontin Free on 02.24.09 at 4:43 am

Garth Turner’s advice and response to the “bubble” is completely vindicated.

‘There will be blood’

Harvard financial guru Niall Ferguson predicts prolonged financial hardship, even civil war, before the ‘Great Recession’ ends

“It’s tempting to conclude from that … that Canada will be less hard hit in the crisis than the United States. But that is unfortunately wrong. Because this is a very unfair crisis. The epicentre is the United States, but the rest of the world, and particularly America’s trading partners, will get hit harder than the U.S.”

HEATHER SCOFFIELD—Globe & Mail—Monday, February 23, 2009

For all those who prefer; “Rubber meets the road” ….

02/19/09 Goodyear to Cut Jobs; Profit Falls

“Goodyear plans to cut another 5,000 jobs and impose a salary freeze after swinging to a fourth-quarter loss amid a sharp decline in sales.”

You have to “buy” the article, or SUBSCRIBE.

#190 Glenn on 02.24.09 at 7:25 am

It never ceases to amaze me how feminists can swoosh over glaring holes in their own logic, while simultaneously “attacking” bulletproof cold hard facts that dont fit their particular zeitgeist.

Lets boil it down, then move on. This is primarily a real estate blog. This blog does however touch on other investments for lack of a better word.

The failure of the auto makers, the collapse of the oil markets, pensions, funds, they are all interconnected. Pull one string and the whole tapestry is likely to unravel.

And in spite of the “Oh, Im not THAT type of feminist” types out there, you will forgive me if I skip the words and focus on the numbers.

Fact: Females initiate 70+% of all divorces. I invite all to rant and rave then flop around on the floor if you think that will help your case. At the very least, 70% of all females in the Western nations are “THAT kind of feminist”, denials or not.

Fact: Marriage rates are now the lowest in recorded history. Western men are engaged in a Marriage Strike. The situation will not change until the Western female wakes up and gets a grip on reality. Thus, the situation will never change.

So when you hear a realtor say “The market will rebound this Spring! Its the best time to buy! Real estate always goes up!” you can directly correlate that to the feminist mantras “You just cant handle a strong woman! We are the pinnacle of female evolution! In order for us to be free, YOU must be enslaved!”.

You know in advance your milage may vary, to say the least.

How is this topic valid to the discussion? Simple. Collapse! Collapse down to the interpersonal level. The wholesale devolution of society.

If the realtor is not in large part responsible for the collapse of the real estate market, and the politician is not in large part responsible for the collapse of the nations infrastructure, and the bankers are not in large part responsible for the collapse of the financial markets…then I guess feminists are not in large part responsible for the collapse of our families.

#191 Herb on 02.24.09 at 8:31 am

Makeorbreak (#122),

I catch “Property Virgins” now and then when my wife watches it to track the Toronto market. We both are amazed at the duff information and manipulation dished out on that show. It is worse than real estate porn: considering the victims, it is real estate pedophilia!

#192 Riveted on 02.24.09 at 9:01 am

We were about to make an offer on a home here in Halifax when, for some reason, Garth’s book jumped out at me from a bookstore shelf. I devoured it in one day, three espressos, and a couple pints. I also decided to NOT buy a house and established an aggressive debt pay-down that will have us free and clear by October. As a new convert, I’ve also done my best to spread the gospel, sound the alarm bells, run through the streets wearing only a fake Garth beard and a placard that reads “The End Is Near-ish”.

One question plagues me: how best to counter the non-believers who point out that a real estate market like Halifax’s will not be as affected as most, and that it is still on the upswing as of January ’09? Will I be debt-free and rubbing my fake beard wishing I had bought in ’09? I think I know the answer, but I need more firepower. Anyone?

Sales were down by more than a third in Halifax in December and prices eroded 12%. I have seen no official January numbers, since the NSREA is not doing its job. Can you provide? — Garth

#193 Riveted on 02.24.09 at 9:30 am

I was looking at CREA stats and saw their 11% increase over January ’08. I feel better (?!) knowing the monthlies confirm my decision to hold off buying right now. I wonder how deep the drop will be on the East coast. It feels like the structure of our economy – heavy in public sector, light in manufacturing and exporting – has created a slight delay in the shit-kicking, but I can’t imagine it’s not on its way.

#194 Increasing that 1% on 02.24.09 at 9:56 am

#189. Glenn

So, in light of this blog, you attribute outdated feminists to the detriment of Western society’s family structure which then is attributed to this economic breakdown.
Got it.
‘God Help’ all the poor men who have been misled and enslaved and had no responsibility in the breakdown of their families, unlike all their feminist non-foreign old wives.

#195 dave99 on 02.24.09 at 12:27 pm

#189 Glenn,

I agree with some of your observations, but not the source of the problem.

An example…

In the 1920’s, women smoked far less than men. Cigarette companies wanted more sales. So they engaged a famour marketer Edward Bernays (more of a propagandist really). Part of his campaign involved sponsoring women’s rights marchs, and then planting a number of attractive models in the march who would then smoke heavily throughout.

Can you imagine?

All of these women think they are marching for emancipation when really they are marching for a huge advertising campaign for their enslavement to cigarettes.

The campaign was a huge hit, and when it was finished women were smoking as much as men.

Now fast forward to the post-WWII world…

Women had become integrated into the work force during WWII with great results. Take a look at the economic prosperity of the post-WWII world, and consider that in the context of the parallel disintegration of the family unit and also the integration of women into the workforce.

Did this happen solely because of the efforts of a group of idealistic, principled feminists?

I don’t know the answer.

But I do know that women were tricked into smoking in the belief that it was a sign of their emancipation.

If they could be tricked into smoking by skillful propaganda, it seems reasonably that they could be tricked into the workforce as well.

I’m not offering this up as some misogynistic rant, and I realise it is perhaps off topic. However I do think it is unfair for society to advise women they have to be “as good” as men in all areas of the workplace, and also still retain their skills and abilities as mothers, homemakers and the centre of the family.

As for our propagandist friend Edward Bernays? Well, in a tragic epitaph he spent his final years caring for his wife (a smoker) who eventually died from lung cancer.

#196 AJ on 02.25.09 at 3:37 pm

#70 J.B.

“You never speak that way to someone who mentions suicide.”

JB, what planet are you on? This is probably the only useful advice this dude has got. Give yourself a shake.

#197 crash on 02.25.09 at 8:10 pm

off topic

US jobless graph from Jan 2007 to Jan 2009.
your eyes, it it’s pretty