The new normal


Always the contrarian, I closed on a property earlier this week and started renovating on Friday. Now a restaurant and ancient hotel, it will end up being a house. Good bones, this place, but bad pipes.

Alf the plumber came for an estimate two days ago, we shook (sixty-five an hour), and the next morning he started to bring up the pressure. Two hours later he was yelling into the cellphone, “They’re bursting everywhere. You gotta come.”

But this is not about my project. It’s about Alf. When I finally arrived (it’s 200 clicks distant), there were four people working. Alf (plumber, licensed gas guy), Alf’s wife (plumber), Alf’s employee and his employee’s son. They’d been there for hours, tracking down and replacing burst pipes, carving out ancient lines, replacing valves, mending sinks and toilets, tapping into the prehistoric boiler and torching their way to leaklessness.

Three plumbers and a helper. And it was still sixty-five an hour.

Even on the outskirts of the Big Smoke, in the orb of Toronto prices and overhead, things are changing fast. Three new listings a day, twenty or so a week, are appearing in an area where a hundred would be considered a glut. “This,” a local agent told me, “is just unreal. It’s a damn avalanche.” But prices are holding steady, as country property owners who were waiting for the Spring thaw suddenly realized the world is ending. Give it six weeks, though.

On Friday, as water squirted from toilets and ran down the inside of walls, came the news 651,000 more people had lost their jobs in the US. This means 2.6 million people have became unemployed there in four months. In all of 2008, the newly-jobless totalled 2.4 million. If the rate of the last 120 days holds, maybe 7.5 million jobs will vanish, which is 300% more than last year. “This,” said Barack Obama in a speech in Ohio, “is astounding.”

The real estate crisis in the US is now getting worse because of unemployment and the simple fact millions of people without jobs can’t pay their mortgages. There is no bailout plan for them. This will also be a lot harder to solve than propping up subprime borrowers who ate more than they could swallow.

In Canada, we should continue to look south for a glimpse of the future. All around us, people are losing work by the twos, tens or hundreds. EI is no refuge, while hungry Bay Street bruins have eaten most of the retirement lunch. Families here have, on average, 80% of their net worth in their homes – which makes us more vulnerable than the American middle class was to an equity meltdown.

A journalist from Boston called me today to ask about “those Canadian subprimes.” He meant the 40-year amortizations and zero-down payments that let young couples without money buy homes. The consequences of that bad-ass policy, I told him, are only starting to be seen. So I told him about Milton, down the road from my liquefying purchase, where whole subdivisions have been put on sale right now by panicked first-time sellers. The story here, I explained, will not be foreclosures (we don’t really have them), but negative equity.

Alf’s army was done. New copper glistened everywhere I looked. Shiny brass cutoffs. Pristine floats. It was beautiful. Then he pitched me on cleaning out all the junk (this property was a power of sale) and hauling it to the dump. He starts Monday.

We shook again. We can use each other. The new normal.


To enlarge, right click, then 'View Image'. Source.


#1 TS Harpoon on 03.06.09 at 9:23 pm

I handed a copy of ‘After The Crash’ to a realtor friend who works the Ottawa RE market a few weeks ago. I stopped by his office today and asked if he read it.

“No” he said flatly. “I have FAITH in things getting better. I am staying POSITIVE. I believe, we as a society will FIND A WAY out of this…It’s not that bad. The CRISIS is an American thing. Ottawa is a DIIFERENT kind if market, and in fact we are much better off here in Canada. You should think more positively.”

I sighed and suggested that maybe he was probably right.

At that moment, a 10 year veteran somewhat seasoned agent slipped in and joined us in that small 100 square foot office. “Hey! If it ain’t Dr. Doom!!! Have we hit PEAK OIL yet?! Are we headed for a depression soon?! hmmm?

He must have read a few pages I thought to myself.

Realizing I’d better change the topic to the highlights of the recent NHL trades, I smiled and asked myself ” Is this what Garth Turner feels like sometimes?”

I admitted to myself that offering the book to those two hardworking salesmen that was probably not a great idea. On the other hand, I felt compelled to widen their myopic viewfinders just a few degrees wider.

So in light of todays experience, I won’t be delivering further reading material to assist the mis-informed: nobody gets a copy from authors like James Howard Kunstler, Colin J. Campbell, Naomi Klien, Thomas Homer Dixon or Mathew Simmons unless they ask me.

I would like to see a video website called GARTH T.V. for those who have limited attention spans…

Whaddaya shay Garth? Your own show…Think of it.

#2 Taxpayer like you on 03.06.09 at 9:28 pm

Families here have, on average, 80% of their net worth in their homes – Garth.

Lets look at two examples

1) House valued at 500k. Mortgage of 300K. Savings of
50K. Net worth is 500-300+50 = 250K of which 200 is
house equity equaling 80% of total.

2) Housed valued at 400K. No mortgage. 100K in savings. Same 80% of net worth is house equity.

Obviously #2 is in much better shape than #1.

Also consider many business owners mortgage their house for financing their business. If owner 2 gets a
200K mortgage and puts it towards a business, he has
the same net worth, but now only has 40% of it in his
home. But now he has business risk.

Many older couples have seen their home values rise considerably, while cash held remains static or decreases, again skewing the percentage.

So Garth, this number is quite meaningless on its own.

Net worth is net worth, wealth after debts. Did you have a point? — Garth

#3 TS Harpoon on 03.06.09 at 9:32 pm

…kind o like this:


#4 Cendrine on 03.06.09 at 9:42 pm

At first I thought “Garth, what are you doing? He’s either flipping or flipping out!” Now I don’t feel so bad about buying in a declining RE market. If you need a place, you need a place.

Still looking for a new home but the listings are not increasing much in the desired price range in the town I want to settle in. They might increase shortly as gritty, muddy March passes. MLS #s increased nationally by at least a thousand since yesterday.

#5 squidly77 on 03.06.09 at 9:56 pm

400 calgary foreclosures in 4 weeks

#6 Taxpayer like you on 03.06.09 at 10:04 pm

Net worth is net worth, wealth after debts. Did you have a point? — Garth

Yes. Having 80% of your net worth in your home is not necessarily a bad thing.

Further example could be owner 2 in previous example borrowing the same 200K and investing in stock market (yikes!). He would only have 40% of his/her net worth in home, but is absolutely no better off. Sure he could sell the stocks for cash, but thats no different than borrowing the 200K and parking it in the bank, right?

Just so you know, less than half my net worth is in my

I’m so happy for you. — Garth

#7 Taxpayer like you on 03.06.09 at 10:32 pm

Garth, Garth, Garth…….I will be blunt……The 80% statement you spoke of is useless info, as was my reponse of <50%, and you fell for it HLS by being happy for me. I could owe 450K on a 500K house with 50K of saving and meet the 50% criteria.

Am I in the wrong place on this blog if I’m looking for
useful info??

Sounds to me like yoiu want to argue. Call your mom. — Garth

#8 JET on 03.06.09 at 10:42 pm

Have you just become a Greater Fool, Garth? Wouldn’t there be more such opportunities in a year or two? Just curious about your rationale.

#9 ThumbsUp on 03.06.09 at 10:42 pm

Reminds me of the Jeep Garth bought before Christmas.

there’ll be plenty of POS’s

#10 Ted on 03.06.09 at 10:57 pm

I am a little uncertain of what to do. Will prices decline in Winnipeg this year? We seem to be in the middle of the pack for house prices in Canada and it seems like things are still holding steady. I don’t want to miss out, but I’d hste to overpay. What signs should I be looking for as indicators of when I should buy?

#11 Average guy on 03.06.09 at 11:02 pm

#1 TS Harpoon. Sounds to me like the Ottawa Realtor has a point. Ottawa may be a bastion of strength. After all, how many politicians and Gov’t employees have been laid off. They look after their own first. If I could choose anywhere in Canada to be a realtor, Ottawa would be the spot. So rather than stick his head in a gopher hole he has decided to remain positive and grab what business he can. People are still buying and selling. I mean Garth just bought a place so even he must believe things aren’t going to get substantially worse.

#12 Aizlynne on 03.06.09 at 11:07 pm

Umm… squidly, your link is to a site that is shilling their books and seminars on foreclosures. How about sending us to a more reliable site.

#13 JM on 03.06.09 at 11:26 pm

I wonder if Garth is going to star in “flip this house”. There must be some good motive for our doom and gloom guru to be investing in real estate in this tanking market. Perhaps it’s just the price he has to pay to maintain his identity as the great contrarian existentialist. I guess it makes sense. Now that the media is calling for the slump in real estate to worsen, waiting for prices to bottom would be, like, so totally mainstream. And Garth is definitely above that.

Three words: power of sale. — Garth

#14 Lee MacFarlane on 03.06.09 at 11:35 pm

Update from Victoria, BC.

Just got the local Saanich News today…

‘Sunriver Estates’ are now giving 1.95% interest mortgage to buy their development homes…

Wasn’t this scenario the beginning of the end in Ontario…? I seem to remember in a book, Greater Fool…

Reflections,, condo project has a firesale liquidation auction with $100,000 of price. Prices starting @ $199,000 for a 200sqft condo(kidding, i don’t know the size).


Had a directors meeting with the local home builders association… Everyone is positive, but for the reasons that they have to be… because they do not have a choice.

I’m a realist… most others are optimists.
Like you said #1 TS, most people don’t want to talk about it, and that will be our down fall. People don’t want to open their eyes.

#15 Realtor on 03.06.09 at 11:56 pm

Iam a veteran realtor in a small ontario community in cottage country. I just reviewed our real estate boards updated stats for this year and they are scary. Sales down over 40%, total sales dollar volume down over 52%.

A puzzling trend that I have noticed developing over the last 2 to 3 months in my area is that the number of new listings coming on the market and active listings are actually declining. Listings as of the end of Feb. are actually down almost 20% and the number of expired listings are up almost 25%. In my market there is very little for buyers to look at. Not what you would expect to see in a decling real estate market.

This tells me two things, people are not listing their homes for sale, and homes that have not sold are being taken off the market. The general consensus is that people feel the spring market will be better, that their homes will be worth more at that time. If it were only true.

My guy feeling is that we are heading for a massive flood, no make that avalanche of listings that will come on the market in the next 1-2 months in my market. Cottages, vacant land, and houses.

With a glut of properties all across the country I just don’t see us escaping this mess for much longer up here.

#16 Future Expatriate on 03.07.09 at 12:02 am

Hope it wasn’t copper pipe from China, Garth. Chinese copper pipes burst microholes and leak like sieves because Chinese pipe, like most of China’s output, is pure crap. TONS of horror stories on the net, and not all can be planted stories from the makers of alternate pipe.

#17 kc on 03.07.09 at 1:10 am

want to watch something that will set your hair on fire? scroll to the bottom video… it is part 1 of a 5 hour documentary about US banking and power. (there are also some other good things to watch here)

Sales numbers in the states… ouch!!! Don’t expect this to turn around soon with the numbers to day from unemployment.

“New home sales plunged to an annual rate of 309,000 in January. That was down more than 10 percent from December and the lowest level in recorded U.S. history (which goes back to 1963).”

Obama’s Mortgage Plan Fails to Address Housing Market Crisis

#18 nonplused on 03.07.09 at 2:13 am

These are actually responses to response on the last Garth entry, but there were a number and that post is now dead. If you did not respond to my #29 post read no further.

#66 Larry

Thanks. I work with the younger generations at work and on the field, as many, many others do. Based on my experiences with them, they have my respect.

As an old friend of mine who never finished high school but yet always seems a fountain of wisdom once said to me (after I was complaining about the apparent lack of productivity in a boyfriend of my sister, many years ago): “We all have a tough go of it.”


Glad you enjoyed it. I actually felt uncomfortable putting it up, because I wasn’t sure this crowd was up for hearing that the kids were doing the best they could, and well at that.

I also don’t know if I consider it inspirational. But I am impressed with how younger folks have dealt with their own version of adversity, but it’s adversity they’ve had. They have been raised on Vidal Sassoon, and given jobs at McDonalds.

They put the generations into categories based on some loose time interval, roughly 20 years, and significant events that characterized their youth. For example, the “boomers” were a large population explosion after the war, which gave them the name (from baby boom). They later became defined by Woodstock and the 60’s in general, and now by corporate greed and a lack of morality in finance, government, and personally. (Incidentally, if you read about Woodstock, it’s interesting that almost nobody who attended actually paid, they all skipped the fence. The organizers paid the bands anyway to prevent a riot or some other disaster, but they didn’t break even until they got money for the movie rights, many years later. That’s pretty much the boomers ever since. Skip the fence, don’t pay.)

GenX got it’s name because they were so overshadowed by the boomers that nobody bothered to care what changes they were making or what defined them.

GenY for much the same reasons as GenX but they have a couple of derogatory names for them so far that are based on the fact that they watched a lot of TV while their parents were busy ignoring them, that I don’t believe will stick. GenX has defined itself now as the generation that was happy not to be a part of things, but I think GenY will define themselves shortly, probably with a bunch of GenXers “playing up” as they say in sports when you get call up to a higher team that will be short players for a game.

#76 refugee

A good portion of these kids born 20 years ago are plenty willing to commit crimes. But the bulk of them respect “game rules” and will not “cheat” unless the think you are too. But that is one difference in them. They do think if you break the rules and the ref doesn’t call it so can they.

They will create their own opportunities. Watch. It will be like the invention of the automobile or the internet all over again. They don’t need Garth’s opportunities. They will remake the world in their own image, same as every other generation has done. And it will be tech heavy, independence heavy, and green heavy.

#96 Bill-Muskoka (NAM)

Thanks. And I am still looking for a link to the Daily Show you mentioned above. Went to Comedy Central but they didn’t have today up yet. Care to post?

101 Vancouver_Renter

Having been born in 1964, most commentators would actually group you as a baby boomer, but late, tail end of the curve. Some put you in GenX, but very early.

#102 Barb the proofreader

So GenY will have as much impact per capital as you did? Thus they are evil?

But at least they actually want to find a way to change things.

#103 prairie gopher

As we coaches say, “The game itself is the best teacher.” Sometimes you have to let them fail. If they signed it, what are you going to do about it besides nag and say “I told you so!” Not productive.

#105 Barb the proofreader

They can run the “technology of the day” (yesteryear) too. But we can’t run their technology.

Hopefully, when we are in the old age home, they will just ignore us, like we did to them.

#19 David Bakody on 03.07.09 at 6:19 am

#4 Cendrine on 03.06.09 at 9:42 pm

Watch that word “New” all that glitters is not gold as there have been far to many true reports of very poor constructed new homes. Seeking an older home with mature trees and other expensive landscaping ( solid driveway) could be well worth some personal renovations. If you have owned a home for any length of time you just might be the best person to survey your purchase, first take your blinders off, make a list of things to look for, look for obvious things, ( help is available free …. it’s called your local library!) Spring is a good time as you get to see how the water table runs. No need to go on the roof ….. pay someone for that. In any rate do enjoy your search, it can be and in most cases is a wonderful experience.

#20 F on 03.07.09 at 6:57 am

Went driving through a town North of Toronto last weekend and saw two power of sale properties within a block of each other, something I wasn’t expecting. Any pointers on how the power of sale process works? Are you negotiating with the bank at this point? Any tips or links to a Canadian site would be appreciated.


#21 Riveted on 03.07.09 at 7:13 am

Hey Garth,

I’ve been glued to your blog since I read your book a few weeks ago. We were about to make an offer on a home here in Halifax when I realized (with your help) that I was about to take on $200K+ in debt to ‘buy’ an asset that could very likely lose significant value in the next year. And to do so would have meant pulling out what’s left of an RRSP. We considered it a starter home but it might very well have been a finisher. We’ve since resigned ourselves to staying in our $1,200-a-month rental downtown for the next two years and ridding ourselves of remaining debt.

As I mentioned in a previous post, I’ve been trying to sound the alarm to my friends who are considering the same, or are making major purchases on credit. Trouble is, they all look at me like I’m an arse, which is fine – they’re not completely wrong – but when I get messages like this from my intelligent and trustworthy mortgage-broker buddy:

“The stats show Nova Scotia home prices barrelling ahead!”

…and then seeing that you just bought property in what I thought was a declining market, I wonder if I’ll regret purchasing the Chicken Little suit – at least I paid cash for it.

I know that stats sometimes tell only half-truths – they’re CREA’s numbers – and feel like this ‘barrelling’ might be a Spring sell-off based on old assumptions that might never materialize, but can you let me in on the thought process behind your purchase? What made it worth the risk? Has the market in that neighborhood bottomed-out so if you have the ability to buy, you should?

Just got tickets to your upcoming talk here in Halifax – I’ll be the one in the chicken suit.

#22 Darlene on 03.07.09 at 7:14 am

Garth is there a good site to find power of sales in Ontario? Or how would I obtain more information about them? Knowing how to find those opportunities in the market would be nice. Would you consider doing a post on how to find the opportunities and show off your vulture skills?

#23 Johnny Five on 03.07.09 at 7:19 am

Just started reading your book. I was going to get the autographed copy but me being the procrastinator (I am doomed, aren’t I . . . ) mentioned it to my wife and she bought it for me last night.

Thanks for scaring the used food out of me.

I have been reading this forum for months so I have been picked up on the clues as for what to do. I am up to what I would estimate is a 60 day supply of tinned and dried food that is nutritionally balanced (100 boxes of KD won’t cut it people). The grow op – namely our Floralight stand – is shining brightly with this years vegetable garden crop being started from seed. My wife is very knowledgeable on when stuff can be put outside so with a little luck we may be able to do two crop rotations on a lot of things this year. She knows how to can and is teaching me. I have flipped ahead in your book a bit to see some lists. Time to do an inventory.

Interesting that you are contrarian on RE. So are we. We are looking for a country property as well with a few acres, but I want it to be at least 100km away from the GTA. This IS going to get ugly. I am in Durham region now and things are already bad. Oshawa is starting to look like something from Mad Max and Ajax/Pickering is already having a lot of “social troubles” which I blame on increasing unemployment/big houses/no future for the kids.

I honestly expect this area to burn.

Well, I guess I will twist on the tinfoil a little harder and keep looking at rural listings. The place we are in is paid for and we are prepared to take a loss. I do know how to sweat pipes and do wiring so maybe, just maybe, I may make it out alive . . .

#24 Riveted on 03.07.09 at 7:26 am

Little Housing Crisis on the Prairie

An in-depth analysis of the housing crisis for the 1980s-pop-culturally inclined:

#25 me.genX on 03.07.09 at 8:03 am

I’m a genX. our generation ended up over-educated (Masters dgrees, PhD etc.) since there were no jobs when we graduated. everybody went back to school. no money, no prospects pretty weel defined us as the “lost generation” and has helped shape us in the way we (my friends and me) handle our finaces….very carefully.

as a result.. i bought my hous in the last recession, paid down the mortgage diligently with every spare cash i had and have been mortgage free for the last 4 years.

in this recession, i see again an opportunity to pick up a house cheap (not necessarily a POS) and repeat :-)

#26 David Bakody on 03.07.09 at 8:40 am

#10 Ted on 03.06.09 at 10:57 pm

The more things change the more that remain the same, buy what you can afford, be selective, take the blinders off, buy a home that meets your needs, location, location, location, then buy less. If you can put 25% down and have very few bills and could afford to still save/invest and have a decent car and better still it’s on good bus route ….. go for it! If you are buying to make money …… give your head a shake, as Garth stated: it will take 10 years for that to happen after the crash , 4.8 million and counting jobs gonzo south of the border and many never will come back. Our biggest trading partner …… hello?

On top of this Senior Boomers demanding health care, CCP, OAS and affordable housing ….. and generation of grandchildren that have problems getting up in the morning and hate school!

On another note ….. I am just about ready to give up on Politics and Democracy …….the world is going to be so far in debt politics will be a dying profession. Opposition parties will have the big stick as they will be backed by millions of complaints as the government’s hands will be tied with no cash. Harper and Co can play all kinds of social cards but they will not create one job or put food on the table or stop crime from increasing.

#27 OttawaMike on 03.07.09 at 8:54 am

Re:#1 @ Ottawa market
It’s the start of prime relocation season now where military/RCMP transfers are poking around for places to buy in Ottawa and property sales are still down.
One of the factors fudging Ottawa’s stats is the upscale Rockliffe area. Multi million dollar homes rarely come up and tend to fetch top dollar. This skews the avg. figures for the whole city. Average prices are down slightly from the $297,000 to $287,000 and will probably settle at the slightly higher than 3 x income (72k$)ratio(220k$-240k$).
In the mean time here is some more recommended reading for your real estate broker buddies:

#28 Mike B on 03.07.09 at 9:01 am

Hopefully Alf isn’t a short little alien with orange hair and a pallate for cat.

#29 Kash is King on 03.07.09 at 9:13 am

Garth took the right approach to his purchase, good opportunity and he went for it.

The BIG key point being power of sale.

Dollars to donuts says it was for sale before the bank took it, and that it probably was listed for sale at some pie-in-the-sky price that the vendor NEEDED to bail himself out of his situation, not what it was necessarily worth.

Dealing with a bank, which is looking to recoup at least most of it’s money , is one of the best ways to get to “price discovery” of what a property is truly worth, without emotional expectations. An auction is another way.

When looking to purchase any large items over the next while, always consider what is motivating the vendor. Are they looking to get what they want, or are they truly motivated in getting rid of the item.

Trouble is, that if this drags on for years like Japan, assets continually drop as items change hands… ie the value erodes more in each new “price discovery”

That’s the risk in taking the plunge right now imho.

#30 dodgedabullit in Alberta on 03.07.09 at 9:18 am

Greetings: Post 2 [Taxpayer Like You], Garth asks: Did You have a point? I am surprised no one has grasped the point. If home owner 1 becomes unemployed, the mortage is like a stone around their necks,and they are straddling the well. While this blog is about real estate, I can see that soon the job crisis in Canada will overshadow all else. Net Worth means dick squat if one cannot pay living expenses. Not having to service mortage debt is a huge advantage. I would say also that not having ANY debt other than daily living expenses, ie: taxes, heating, food, should be priority. There is a lot of value in having a secure roof over your head,along with a paycheque. If the paycheque vanishes, hunker down and ride out the storm. My wife and I are watching our RRSP’s being eroded and there is nothing we can do to fix that. We recently moved one into a short term GIC, just to perserve the original investment, all accrued interest has vaporized into cyber space. I would love to get my hands on that money, but Revenue Canada will hose us if we do so. I will be deferring some major reno work on our house this year. I discovered that in order to qualify for the max tax credit with the recent budget we would have to spend 10 thousand dollars, what a joke, ain’t gonna happen. I am now waiting for the last of the “Holy Trinity” to re-appear. We have crashing real estate, rising unemployment; coming soon climbing gasoline/diesel/ heating oil prices. Food costs are rising steadily but many people do not realize it. We are so focused on cheap TVs’ furniture, cars, tools, we are missing what is taking place with the basic necessities. Manufacturers are reducing size and quantities in packaging, prices are not being lowered and selection is being reduced. Trucking is being decimated, air travel is next and our rail system is a joke. As the tax base is eroded due to unemployment, even government will be unable to maintain basic services. I think that soon discussion about real estate will not be worth spending the time at the keyboard. Canada cannot feed and shelter its own population year round, wake up people!!!

#31 Toronto C9 Renter on 03.07.09 at 9:34 am

Garth, smart move — establishing relationships with competent and trustworthy tradespeople is essential when picking up distressed properties and it sounds like Alf is a gem.

(P.S. Don’t forget to keep all your receipts for tax purposes!)


#32 electrician boy on 03.07.09 at 9:44 am

I will not consider the equity from the house as a big thing since you need a place to feel like a home.You have a mortgage do what ever is required and pay off this debt.If you have house you can be in control whit the expences but having a condo type others will tell you how much $$ you need……….
Again I think Cash 60% and Gold 40% will be the secret.
You have no place to work because you lost it ,you need to create one for you just don’t give up.
F…. the depression or recession there are so many ways to make money!

#33 Mike B on 03.07.09 at 10:08 am

With Garth buying a house or building he is doing what many of us do every day…looking for a bargain and if one pops up …we take it. What’s the point in looking if you don’t actually take advantage. Wish I had an agent who was scoping out deals for me. Most of them are looking for deals for themselves. Send me a link Garth.

#34 Go Green on 03.07.09 at 10:45 am

Bruce MacKinnon’s cartoon today.

#35 Yes We Can't on 03.07.09 at 11:04 am

I don’t know about not having foreclosures in Canada. There sure seems to be an increase in judicial sales lately. Quite often these are foreclosures.

However I am talking about Alberta so it probably hasn’t spread much yet.

#36 Got A Watch on 03.07.09 at 11:10 am

You’ll have to dig a little harder to find “power of sale” properties. The local Realt(ho)rs (TM) do not like to highlight these listings, as they will drag down the comparables for the neighborhood.

They are listed on the MLS, search by price, starting at the bottom priced properties.

But in general, it is too early to be buying any real estate thinking it’s a bargain. In past real estate busts, the average length of time prices fell was 4 1/2 years. Since this crisis is due to bursting of the biggest credit bubble in history, we could easily see prices decline for 5 years straight from the peak. When they do bottom out, there is no quick rebound, just a period of 3-5 years when prices are flat and the market is slow, just more of the “buyers market” they are talking about now.

So don’t rush to buy anything, unless it is priced at a level that is well down from the local peak already, which for me would have to be at least 50%, to minimize the risk of the property going underwater if prices continue to fall for a few more years.

As this crisis period drags on, local governments will be seizing properties for non-payment of municipal taxes. I am sure in about 3-4 years there will be many tax sales to choose from, at prices a fraction of current levels. In Ontario you can get the info on these from the Ont. Government Bookstore, they are published each month in the official Legislature update. It may be available online now too.

Hold the cash. This is a deflationary depression. Any property you want to buy now will be cheaper next year, or auto, or TV, or any other major purchase. Cash is king.

Reading about GD1, many people over-confidently called the bottom too early, and bought real estate or stocks, only to find prices continued to plunge and they lost their shirts too.

I know you can get itchy trigger finger, waiting seems boring. Patience. The real bottom will be reached, just not soon.

#37 Calgary37 on 03.07.09 at 12:01 pm

Global Solutions: Update

Earlier I posted a version of a Global Bank and Global electronic currency that I thought might be acceptable to most of us.

Here is a NWO version of a Global Banking System–.html


Power to the People. Let the Revolution Begin.

#38 passerby on 03.07.09 at 12:32 pm

#16 Future Expatriate on 03.07.09 at 12:02 am
Hope it wasn’t copper pipe from China, Garth. Chinese copper pipes burst microholes and leak like sieves because Chinese pipe, like most of China’s output, is pure crap. TONS of horror stories on the net, and not all can be planted stories from the makers of alternate pipe.

I’ve been in China for 7 years and have lived in different apartments, and now even own some RE. None of the “microholes” and “leaks” that you claim.

Not all the stuff that comes out of China is crap, what you’re saying though is.

If you’re gonna blame anyone for shady piping, blame the plumbers and developers who bought the sub-par pipes and installed them, okay?

#39 Geitners a nitwit on 03.07.09 at 12:37 pm

#40 Calgary37 on 03.07.09 at 12:37 pm

Job Creation: Special Economic Zones

Start with this link and then branch out from there.

I have submitted this suggestion to the Conservative Government a number of times. My first choice would have been in Quebec since they could have used their connections to France and the rest of the EU to attract a variety of firms to this SEZ. It would have given the EU a direct entry point into the North American marketplace.

My second choice might have been the Maritimes if those Provinces would join together to form one larger Province.

Now that so many production workers have lost their jobs in Ontario, I am wondering if trying to establish a SEZ somewhere in Ontario right now would be a worthwhile project for someone to pursue?

This is a homework assignment for the Ontario readers. Since you know Ontario better than I do, is there a viable situation in Ontario right now for some type of SEZ? What would your suggestions be?

There is also a Canadian version that I call “Aboriginal Economic Zones”. My original version of a Rural Community Project (communes) also can tie into this AEZ concept or function as an unofficial SEZ.


Power to the People. Let the Revolution Begin.

#41 Investx on 03.07.09 at 12:41 pm

Garth: “Always the contrarian, I closed on a property earlier this week.”

Contrary to the RE agents which are claiming that now is a great tinme to buy?

Are POS typically that cheap, cheap enough to warrant a purchase in a declining market, a market foreshadowed by the south which is providing us with “a glimpse of the future”?

#42 Fred on 03.07.09 at 12:49 pm

Caught you on TVO last night. I’d suggest that this medium allows you to release your thoughts in an unguarded manner. Your persona on TV last evening seemed guarded. In one sense i guess I was expecting a Jim Cramer meltdown moment or two. Hahahahahaha

Regardless it was a good interview.

Makes you think ;)

#43 Cendrine on 03.07.09 at 12:54 pm

#19 David Bakody

No more new construction for this gal!

Oh, I hear you….the house I currently live in is about 6 yrs old. I was disappointed with the construction because it seems less sound proofed, the doors are Masonite (easily damaged) and the trim work seems shoddy. Mind you, the house is warm enough and works well enough but the list of annoying problems is long. I feel better about older homes (they seem more solid) but, given our retirement situation we should probably look for a home that is older and has the renos already done. Our last house (purchased in 1989 adn sold in 2002) was a 70s era bungalow and we put in new cabinets, roof, windows, furnace, ductwork, A/C, foundation repairs, carpeting and flooring. If we had kept it we would have made back all we put into it if we had sold it last year instead of six years ago. But there you are….

I just had this discussion with DH today…I am hoping to convince him to look seriously at updated older homes but he is definitely leaning to the under 10 yr old McMansions – with 5 bedrooms! You know, in case the children come back.

Just a sec, let me dig out the frying pan……

#44 Sean on 03.07.09 at 12:56 pm

In 2006/2007, a number of people started buying up forclosed (power of sale) properties in places like Las Vegas. They got ‘great deals’ at huge discounts. Now those same people have lost half their investments.

Garth, I had to read this article again to confirm that I actually read about you investing in real estate at this time. What if Canada follows the trend in the states? It won’t matter if you just got a 50% discount. I have read in so many places about how Canada is 2 years behind the States. Do you not believe that anymore?

#45 mike as in mike on 03.07.09 at 1:02 pm

#23 Johnny Five wrote:
“I am in Durham region now and things are already bad. Oshawa is starting to look like something from Mad Max and Ajax/Pickering is already having a lot of “social troubles” which I blame on increasing unemployment/big houses/no future for the kids.”

Hey Johnny boy, get a grip! Oshawa = Mad Max? HAHAHA!! That’s a little harsh. Oshawa south has always been a rough looking area even during the good times. Most industrial based cities do (i.e Hamilton, Sudbury, Windsor). If you don’t like Durham, fine get out. But don’t exaggerate problems to help you justify in leaving.

#46 Wealthy Renter on 03.07.09 at 1:09 pm

I have really appreciated the candid and honest nature of the last few posts because the world is not coming to an end, but the short term future is bleak.

I don’t know if housing will stabilize or decline by 30%. I truly don’t know.

However, what I do see is a number of people I work with in their mid 20s to mid 30s who are absolutely drowning in debt. It is all very anecdotal, but ask a late 20-something how much debt his or her friends have that is not related to a house or car. I have been asking that question, and the answers are astounding.

And who is going to be left to buy entry level houses or condos in a few years time? I graduated with a fresh degree in Economics in 1994 to a job stocking shelves at Wal~Mart, and I thankfully kept my afternoon job moving houses – a lot people were losing them in those days. I went back to school for five mores years and I thankfully ended up with a great job.

What the hell kind of jobs will be available for young graduates at the end of this recession? How will they buy houses? These “kids” will hit the job market the same time that a certain percentage of pension-less and broke boomers will cash out their inflated homes.

Real estate could be toxic for a decade.

#47 Greg W., Oakville on 03.07.09 at 1:22 pm

Hi Garth, re: the job lose-recovery graph you gave.

Is it just me?

It seems the time, from job loses to recovery, have been increasing each time. (On the graph you gave a link to.)

I hope it’s only a coincidence! But….

#48 Eduardo on 03.07.09 at 1:42 pm


Great post and as a member of GenY (25 yr old engineer) I can testify to the fact that most of my friends are looking to work hard and be rewarded.

The stark realization is that we will be paying for the excesses of previous generations for the rest of our working lives. In reality I think we feel much less entitled and any sort of entitlement comes from the fact that this is what we were taught by our parents. Our generation is the one driving change and the need for green energy. Sadly, this is also goign to come out of our pockets.

I would say that Gen Y will drive many changes. I obviously see many unmotivated people in my generation as well because some less fortunate people have been stuck wil layoffs after just joining the workforce and a number of other hardships.

Anyways, again, good post nonplused. It’s good to hear other generations’ perspectives.

Squidly, regarding your stat in #5 you should check this stats page.

There are only ~150 total “foreclosure” listings on the market.

#49 Dan in Victoria on 03.07.09 at 1:47 pm

Wow, 65 an hour for four men.I’m doing a reno on my house need some siding done,couple of guys maybe fifty hours each,labour only, 6400 dollars.Sorry guys little too rich for me.”Well man that’s the price”Should be interesting when reality sets in,thinks I as they leave in thier 60,000 dollar diesel pickup,with thier starbuck coffees.

#50 Bruce on 03.07.09 at 2:04 pm

Things to get WORSE than Depression…

#51 Happy Renter in North Van on 03.07.09 at 2:09 pm

The only problem with the Ottawa Real Estate market is you have to live there…

#52 $fromA$ia on 03.07.09 at 2:38 pm

No need to post this.

Garth, I’d start to worry about your city water feed from city valve to your building. Copper pipes average 40 years. In other words, if your plumber did not completely get rid of and replace all the lines and it all gets drywalled back up you will be looking at more repairs in the near future. Also a loss on the labour of drywallers and painters etc.

Also make sure that the hangers for the copper pipes are not galvanized or some other dissimilar metal, we’re talking gavanic action here. Oh and keep your electrical lines at least 1 inch away from the plumbing is also a good protective measure (electric field).

#53 Jay Currie on 03.07.09 at 2:44 pm

It is going to be an interesting and important question over the next months or years: who can you work with? Who can you trust? A good plumber is going to be in huge demand.

One of the big problems in the housing market is that while people may believe they think of their houses as investments they don’t treat them that way.

If I have shares in XYZCo and I want to sell them, I take market price. I am not “insulted” by the offer nor do I get angry if someone “low balls” me. But people are far more emotionally wrapped up in their houses. I was living in a rental last year where the landlord wanted to sell but asked an April 08 in June and was insulted by the lowball offers. He chased the market down and, six months later, pulled the house off the market. His emotional attachment to the house, in the declining Victoria market, has likely cost him the better part of $150,000. And he is still stuck with the house.

#54 jess on 03.07.09 at 3:37 pm

Some banks that were paid by AIG after it was bailed out by the government
I can’t see the market bottoming until all the rogues are flushed out and there are certainly lots more since “animal spirits” are contagious.

#55 jess on 03.07.09 at 4:01 pm

The creator thinks it is time to kill frankenstein ?

March 6 (Bloomberg) — Myron Scholes, the Nobel prize- winning economist who helped invent a model for pricing options, said regulators need to “blow up or burn” over-the-counter derivative trading markets to help solve the financial crisis.

The markets have stopped functioning and are failing to provide pricing signals, Scholes, 67, said today at a panel discussion at New York University’s Stern School of Business. Participants need a way to exit transactions and get a “fresh start,” he said.

The “solution is really to blow up or burn the OTC market, the CDSs and swaps and structured products, and let us start over,” he said, referring to credit-default swaps and other complex securities that are traded off exchanges. “One way to do that, through the auspices of regulators or the banking commissioners, is to try to close all contracts at mid-market prices.”

Scholes also recommended moving the trading of credit- default swaps, asset-backed securities and mortgage-backed securities to exchanges to allow for “a correct repricing” of the assets. The securities are currently traded between banks and investors, without any price disclosure on exchanges.

#56 Barb the proofreader on 03.07.09 at 4:04 pm

#18 nonplused “So GenY will have as much impact per capital as you did? Thus they are evil? But at least they actually want to find a way to change things.”


You’re saying the Baby Boomers didn’t want to find a way to change things????????? Wow, how naive are you?

And it is incredibly INSINCERE and improper of you to put words in someone’s mouth that they did not say. Your patter has been detected before. Don’t bother putting words in my mouth. I said ‘I hold no false hopes that all will be well’ and I said, ‘GREED, that creates despair elsewhere, and for another day — simply marches on’.

And Nonplussed, your statement that about GenY that “They can run the technology of yesteryear too” — is simply not true. My family and generations before worked with our hands, in jobs and chores that these kids wouldn’t have the slightest clue how to perform, farm jobs, rotating crops, gardening for one’s own kitchen and the neighbours, fixing old appliances and cars, fixing the television, flashlights, stove, fridge, radio, old clocks, gramophones, telephones, making old clothing into new clothing, innovating and inventing, and making their own furniture and building their own homes. My family members could do all this just as a matter of daily living. If you liken that kids today accomplish those tasks or have the patience and understanding to do so, then I’d like to introduce you to Peter Pan and the Easter Bunny.

You also said:

“But we can’t run their technology. Hopefully, when we are in the old age home, they will just ignore us, like we did to them.”

Your comments come from your narrow view, not a larger view. Human nature remains the same no matter how you re-write it. The people I know in their mid-50’s CAN OPERATE today’s technology and your suggestion that they can’t is false. Your characterization of BABY BOOMERS is insincere and extremely misleading, and to what end? So you can write a ‘warm and fuzzy’ and ignore the truth about generations? These kids were not “ignored” as you say, their young parents were doing what every generation does. Their young parents acted according to the MESSAGE THEY HEAR AND LEARN about how to raise a family. The message comes from school, church, family, friends, home, media and other sources.

It’s very shallow of you, Non-Plussed, to take such a swing at Baby Boomers. Were they not the product of their parents as well? So why don’t you take a swing at The Greatest Generation? To you, when YOU state that “they will just ignore us, like we did to them” suggests that each generation has not loved their offspring. That is simply an ignorant and not-well-thought-over accusation.

Non-Plussed, you obviously do not understand the basic problem with a Society. But you are certainly contributing to the basic MIS-UNDERSTANDING of Society, and that’s the only reason I address you.

The problem in society comes from The Message (originally transmitted word-of-mouth, now additionally by media). What’s wrong with The Message? First, the media (and people) are far too influenced by GREED. Thank goodness for PUBLIC BROADCASTING AND MEDIA SUCH AS BBC, CBC AND NPR. I’ll say it twice, THANK GOODNESS, because THAT’S where truthful media lives, and in the abundance and variety of books in libraries. And we can only hope that schools become better places to learn basic truths as well.

One thing about the Baby Boomers that YOU need to learn:

Baby Boomers were full of hope.

Baby Boomers fought for Civil Rights, Women’s Rights, Gay Rights, Anti-Nuclear, Human Rights, Peace Not War, Save The Earth, Love and Human Understanding. And what happened? John, Martin and Bobby were assassinated. Our spirit was assaulted and threatened by wrong-thinking politicians and organized groups who decided to interfere, power mongers and liars who deliberately destroyed The Message Of Goodness, and replaced it with their message. Think of the deceit and crimes of Nixon, his false paranoia about the media being left wing, the Rethuglicans desire to stomp on human progress because to them it was the enemy, so they killed universal healthcare and robust public education. Canada has been heavily influenced too, by a lot of big-wig American thugs. The 70’s brought us the destruction of hope through the evil campaigns of the insincere business cults, some who called themselves the Moral Majority. The wealthy elite Corporatists started fake think tanks, influenced groups, and financed the universities to TEACH their insane economics that got us all where we are today.

Do some research on the big biz fellows, the greedy cronyism, the eyebrow raising Texas elite connections, the Military Industrial Complex (even Eisenhower warned the public when he left office) the media conglomerates and the false prophets of organized religion, to name just a few of the abusive MESSAGE RULERS, and take a look at the end results of what happens when you let MISEDUCATED Big banking and Big finance collude with complicated high end fixed GAMBLING they call Wall St or Bay. Human folly and the greed of uncontrolled Capitalism ARE NEVER GOING TO CHANGE ON THEIR OWN.

SOCIETY, old generations or new, are too disorganized to fix the real problems. Society as a whole are disorganized because they DON’T receive the truth or a good education about what to watch out for in leadership, nor do they receive real truth in the messages they receive in society. There are always people out there who try to distort the truth, or generalize too much and add NOTHING to the greater understanding — usually because they have some angle of their own. I suggest you take however many years of life you have under your belt, and add some real research and a broader perspective. Try not to be part of the naive problem. And don’t wear your rose-coloured glasses while you are reading.

The only thing that will fix our problems, is the gradual ‘trial and error’ of each generation learning and re-learning. We all must learn to ignore or stand up against MISLEADERS — but at the same time we MUST SUPPORT AND FIGHT FOR the good things in society that we believe in. The next generations may learn from the former generations’ trials and errors — and step by step further Society — or not.

Hope is good. False hope is bad. And misleading messages is what got us into this mess.

#57 Future Expatriate on 03.07.09 at 4:48 pm

Don’t plan that rally party just yet…

Forbes Magazine Weighs In

Apparently the entire US financial system is insolvent.

Pay particularly close attention to the “bear market suckers’ rally in 2009” part.

#58 Vancouver_Renter on 03.07.09 at 4:49 pm


I agree. I watched my older siblings and their friends in the baby boomer generation every step of the way. And, for them, the following rules applied to most life decisions:

1. Encounter an opportunity.
2. Don’t think about it too much. Just go for it, like the rest of my friends are.
3. As expected, I won again.
4. Repeat. Go to Step 1.

In my group of friends born at the tail end of the baby boom or right after, the rule book changed to:

1. Encounter an opportunity.
2. Analyze it carefully and reject it if doesn’t look good. Otherwise, go for it.
3. Oh boy, it didn’t work out as expected. I lost. Okay, I’m going to learn from this and next time I’m going to be more careful.
4. Repeat.

Each time, Step 2 would consist of more and more planning and analysis. Expectations would become more and more realistic.

What I’m hearing now, amongst my older baby boomer siblings and their friends, is surprise and dismay that things aren’t naturally working out anymore. It’s a new experience for them. “Our pensions are in trouble? Our real-estate in declining? Our investments are melting down? Our jobs are insecure? Timing is against us? What is this?!!!!”

Welcome to the real world.

#59 Apocalypse Now on 03.07.09 at 4:49 pm

For those dreamers that still hold the fantasy that everything will be peaches ‘n’ cream because the Central Bankers are on the job, here’s some proof of how good a job the bank boys are doing. Here’s a Globe article from summer 2007 showing that the Banker Boys were on the job and the problem would be contained. It would take a few measly billions to plug the hole in the dyke and keep the financial tsunami at bay. Well we all know how good a job they have done! No point holding your breath any longer, you may as well learn how to surf since the waves are a coming ashore faster and faster, and higher and higher.

Central bank moves to calm markets
Bank of Canada is ‘closely monitoring developments’ after French bank signals it has been burned by the meltdown of the U.S. sub-prime mortgage market, triggering stock market selloff
JOHN PARTRIDGE / Globe and Mail Update
August 10, 2007 at 1:53 PM EDT
The Bank of Canada intervened in the money market more heavily than usual Thursday amid continued turbulence in Canadian and U.S. stock markets.
The turmoil worsened after word that a French commercial bank has been burned by the meltdown of the U.S. subprime – or high-risk – mortgage market, along with a Wall Street Journal report that a second hedge fund operated by high-flying U.S. investment bank Goldman Sachs Group Inc. is now in subprime trouble.

Canada’s central bank took the rare step of publicly reassuring investors that it will help provide stability to financial markets and the domestic financial system.
“In light of current market conditions, the Bank of Canada would like to assure financial market participants and the public that it will provide liquidity to support the stability of the Canadian financial system and the continued functioning of financial markets,” the central bank said in a brief statement issued at about 10.45 a.m. (EDT) Thursday, although it emphasized that this is standard operating procedure.

#60 TheComingDepression on 03.07.09 at 4:56 pm

Check this out: 700 applied for 1 job for a JANITOR! and this is not a DEPRESSION?

#61 Go Green on 03.07.09 at 5:12 pm

Just wondering if anyone is using Google Chrome instead of Windows Ex. My husband installed it on my laptop last week, after he had checked it out, & we can’t get over how fast it is in comparison to Windows. Takes a couple of days to get used to it (bookmarks are on the right & mine got a bit screwed up during import but I didn’t lose any). There are a few things that don’t work. No problem, keep WE as well. Speed is phenominal., so far, incomparison to WE.

#62 George on 03.07.09 at 6:03 pm

Garth, how do we the unsavy – non-savy- sniff out these powers of sale. Where are they hiding. Haven’t found any on the mls anyway you know what i mean. Any Power of Sale Cribs or Pimp My Power of Sales shows. You get all the bragging rights. Pass on the info.

#63 Teena on 03.07.09 at 6:07 pm

#1 TS Harpoon – For your and others amusement.

#64 HJD on 03.07.09 at 6:34 pm

“Greater Fool: The troubled future of real estate.” Garth purchased some real estate!? Wow! Even though it was “power of sale”, I’m a little surprised. Guess it’s a noteworthy vote of confidence in the future.

#65 squidly77 on 03.07.09 at 6:34 pm

MP facing ‘virtual extortion’ over his former website

#66 confused and a little crazed on 03.07.09 at 7:05 pm

this low interest rate is crazy…this won’t help people. Once the bottom is out maybe 2 years from now. all that printed money will cause increasde in interest rates for instance 2.0 % to 5 in 2 years that more than double your mortgage payment …inflation will be the silent killer

#67 Marc on 03.07.09 at 7:09 pm

Well it is oficial. Less then 5 months after winning her seat in the Federal election, Ms. Dawn Black is resigning to run as a Provincial MLA. Guess looking out for taxpayers money is not a priority for some politicians. This is a disgrace and a waste of money and to think I actually voted for her as I thought she was the most qualified candidate. It is about time we get all politicians under contracts, that if they resign for any reason other then health, or to care for a sick loved one, they can foot the bill for by-elections themselves.

#68 Sail1 on 03.07.09 at 7:19 pm

Three words: power of sale. — Garth

Garth, I have had my agent present two offers this week in Toronto’s down town core. Both offers were 20 to 25 % below asking price. Both properties were under power of sale. Those banks are ruthless, you are better off dealing with the devil. Maybe the climate is very dire in the area you made your purchase. Somehow after reading your books all property seems overpriced.

#69 MenWithHats on 03.07.09 at 7:55 pm

Power of sale info:

#70 Barb the proofreader on 03.07.09 at 8:25 pm

#4 Cendrine,

Several years ago I was scouting our desired retirement area in Canada. I couldn’t get over the “ick” factor of looking at older home photos in MLS.

But NEW homes have an ugly demon. MANY friends in very recent years have bought new homes, only to be di$appointed by hidden problem$ ie: improper Geo-Thermal that can now never be fixed, improper window wells that flooded their basements (two friends here), improper fridge water line that flooded and destroyed all the hardwood flooring, dust that never stops settling, improper wiring that burned their house to the ground (two different family acquaintances in the U.S.), and cheap hidden wherever the builders could hide it.

If you have angst over older homes like I do, I’ll tell you what we decided, if and when we buy. Don’t judge by photos. Judge the house in person. If it needs a new kitchen, baths, flooring.. time it so that someone installs them before you move in. BTW friends who moved a block from here, had walked away from their first rejected low offer saying they needed a bathroom in the basement, and a finished basement with proper garage access and more. Guess what the builder/seller did? He immediately built all that.. to entice them to offer again. They were swooned by his diligence, and bought the place with a higher offer.

#71 JO on 03.07.09 at 8:29 pm

Garth, could you provide a site or extra info on how to look at power of sale properties. Any other tips ? Don’t have to spill your secrets but some general info would be great.

One thing may buyers need to look at very carefully is the city finances of where they want to uy. I will never buy in Toronto. It could very well be bankrupt within 2-3 years. I hear Mississauga is debt free for close to it. If anyone can shed more light on it, please do so..I will try to reserach that more…some cities are going to have to increase property taxes significantly to try and deal with the crisis..of course, they will only stop raising them once a taxpayer revolt gets going and then the politicians are forced to do the only thing that should be done: Cut gov’t spending. Check out the city finances before you buy.

#72 Barb the proofreader on 03.07.09 at 8:32 pm

Cedrine, I forgot to add another friend’s house with $30,000 in water damage as rain showers soaked one side of the house and continually seeped sideways into walls and floors on both storeys. Improper stucco and faulty eaves jobs. There was a short term previous owner and it was tough to get back their money from the new home warranty.

#73 David on 03.07.09 at 8:32 pm


I understand that you purchased under “power of sale”. This runs contrary to what you have mentioned before. I believe the tune was to sell your house before it is too late. But now you are a buyer.

I believe that you are human after all by willing to take advantage of someone elses poor fortunes.

There are several people doing this in the USA and Canada. Housing sales were reported up in some parts of Canada and the USA the past week. Your purchase probably was part of these statistics.

I believe you can say that you are aiding the economy by putting new money back into the system. This is good !!

Our home is owned and has no mortgage and we have no debt other than monthly expenses. If we took all the comments made the past year on your blog we should have sold. The problem is we still need a place to live unless we chose to become homeless.

I believe your action on purchasing a dwelling whether it was under power of sale or whatever still took money to purchase. Whether you paid cash or took a mortgage it will still help the economy through helping the banking institution who held the papers to reduce their debt.

This blog was positive and for people out there looking to purchase a place to live try looking for a place under power of sale. There is money to be saved. But make sure the pipes do not leak.

#74 rant in Calgary on 03.07.09 at 8:37 pm


#75 Gord In Vancouver on 03.07.09 at 8:44 pm

The Future Of Vancouver, BC’s Job Market

Just like it was in 2001.

#76 Future Expatriate on 03.07.09 at 9:00 pm

More good news…

Complete collapse of equities inevitable and imminent

Ammo and shack in the woods time…

#77 North Vancouver Citizens Analyst on 03.07.09 at 10:20 pm

Canada doesn’t have foreclosures?

What are court ordered sales then, exactly?

#78 Taxpayer like you on 03.07.09 at 10:32 pm

58 Renter

Several bloggers have now told you to drop this. I think its obvious to most (if not you) that you are your own basic problem. Dont assume all boomers – of which you actually are one (just barely) – are like these older siblings you dont seem to care for, or that we all had it “easy”.

Your post indicates that you and your friends
have tried many things. The logical conclusion is that you
either werent very good at it, or you gave up after one
setback. At the age of 25, I set my sights on a goal. I prepared accordingly, which included keeping options open along the way if things went really sideways. But I stayed the course, and after 16 years, I could actually say the goal was realized. That blows most younger people away. Some wont even commit to a 2 year post-
sec program. “Thats so long” they tell me.

48 Eduardo – Anybody who completes an engineering degree shows drive and demonstrates a great work ethic.
I’d like to say good luck, but I dont think you will need it, you are on your way.

#79 nonplused on 03.07.09 at 10:57 pm

#48 Eduardo

Have no fear my friend, the intergenerational heist is not likely to go as planned. It’s never worked before.

What usually happens when a country runs up unpayable debts is not that the debts get handed down, but that they get defaulted on. There are 2 ways this can happen, both off some time in the future after the deflation thing works it’s way through the system. Either the debt will literally be defaulted on (if the deflation doesn’t go away), or inflation kicks in to the extent the debts become payable. I’m betting on number 2. Paper money can be printed, and sooner or later the government will get the hang of it.

I don’t buy the Elliot wave type argument that everything crashes and the value of a dollar spirals higher indefinitely. Arguments that forecast a prolonged decline in prices all are based on the premise that they don’t change the rules. But as we’ve seen ever since going off the gold standard, they change the rules every time they need to.

What they mean by the new rue change, “monetary easing”, is printing money and using it to buy treasuries. With north of 10 trillion in treasuries outstanding and at least a trillion more coming this year, that’s a lot of dollar bills coming soon!

There is nothing behind money, you can’t bring it to the bank and exchange it for anything else besides more money. So its value is always strictly governed by how much they print compared to how much is needed.

#52 $fromA$ia

Are you sure? I thought copper did not rust. Is the lifetime limited by stress fractures or something? I assumed the house was leaking all over because at some point in the power of sale process the heat was turned off and everything froze, which copper pipes don’t like.

#56 Barb the proofreader

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

I am guilty of many generalizations. I do it for brevity, not to imply an “all or nothing” scenario. My mother knows how to put up HTML web pages and my 14 year old daughter just today was dehydrating food for a hiking trip. So yes similar skills can be found at every age level. There are lots of GenY’s currenty being raised on farms and I bet they know how to fix the tractor. It was a generalization.

And I guess I should say that I know many boomers I respect deeply and have learned a lot from. I’m not talking about specific individuals. They lived in their times, were subject to those forces, and many achieved greatness of spirit and many did not. You’ll find that amongst the X’s and Y’s too. We still have to explain Brittany Spears and Paris Hilton. Yesh. There is enough embarrassment there to go all the way around. Thank goodness they are Y’s.

But the “me generation” really did blow it, even if perhaps it was through no fault of their own when looked at on an individual by individual basis. The collective result was disastrous.

No doubt every generation loves their children but the boomers were the first North American generation to try and put their own children in unrepayable debt through government deficit spending, even if the stated goals were altruistic (outside of war times). You can’t get around that.

#61 Go Green

The way Google is going, soon there will be no need for Microsoft, at least for regular users that don’t build custom apps. But I imagine that will change soon enough too.

And let’s not forget the Linux and Open Office crowds. If you don’t need to run big legacy Excel spreadsheets, you can probably already get all your software for free.

#80 Taxpayer like you on 03.07.09 at 11:35 pm

79 Non-pulse (sorry couldnt resist)

“No doubt every generation loves their children but the boomers were the first North American generation to try and put their own children in unrepayable debt through government deficit spending, even if the stated goals were altruistic (outside of war times). You can’t get around that.”

I disagree. Deficit spending was started well before the boomers had political power. The vietnam war had a lot to do with deficits in the US, and the resulting inflation ran for about 25 years? In Canada, the Canadian pension plan was implemented in 1966(?) and it was immediately the target of economists who said it was “too rich” because it was desinged as a ponzi. Trudeau and Mulroney continued the spending. It was only in the nineties that Paul martin upped the contributions so CPP
would be self-funded (hope and pray). In the meantime,
the boomers had been the most heavily taxed generation
individually and therefore collectively as well.

I remember my retired father in law complaining when he
had to pay about $1K tax at the end of the year. I told
him I paid that much every month. He said that was OK
becuz I was working. I said I’d already paid more tax in
my lifetime than he had in his and I hadnt got any bypass
surgery! That made him think a bit.

You just have to look at my “handle” (is that what bloggers call it?) to know how I feel. Thanks.

#81 Vancouver_Renter on 03.08.09 at 12:05 am

#78… “Several bloggers have now told you to drop this. ”

Wow. I don’t understand why my discussion makes you so angry and why you incorrectly assume that I am personally a failure just because I report on the general experiences of Generation X. I also don’t why you think you have the authority to censor me under the guise of protecting others. I’m sure that others who aren’t interested in the discussions on demographics are self-reliant enough to just skip over them and don’t need your “help”. Bullying is for the elementary playground.

I find discussions on demographics fascinating because it really helps to explain markets. You should read “The Forth Turning”, “Boom Bust and Echo”, and “Generations”.

The nature of a demographic bubble is that the sheer numbers of people in the bubble generation make collective investments winners by default. When a the huge population of boomers bought houses, the prices HAD to go up because of the demand-side of the equation. When they all bought recreational property, prices HAD to go up. When they all bought stocks, they HAD to go up. So, as a boomer, all you had to do, every step of the way, was to do what everyone else was doing. And you got accustomed to winning.

But my point is that the post-boomer Generation X group learned, through repeated failure, that they would LOSE if they tried to make the same strategic moves as the baby boomers made. That’s because, if they tried to do the same things, they would always find themselves being the last man in – or the final greater fool. Successful Gen-Xers found they had to get ahead of the boomer wave in order to win.

For the baby boomers, the “do what everyone else is doing” strategy will no longer work, now that their generation is downsizing and raising funds for retirement. A smart boomer has to break free of the group-think mentality and get ahead of the boomer wave. I tried, in vain, to convince my older boomer siblings to sell their big Vancouver houses a couple years ago ahead of the rest of their generation.

My wife and I decided to sell our two places in Vancouver in 2006 (a little early), sell our interest to partners in one of my engineering companies (yes, I’m an engineer!), and to liquidate our entire stock portfolio. We moved everything to treasuries and gold bullion. Why? I study demographics. At the time, everyone thought we were crazy and ridiculed our planning. But, since then, gold bullion has doubled when priced in Canadian dollars and our naysayers are now very quiet. Demographics alone dictate that real estate will be an under-performing asset class for the next one or two decades. Ditto for stocks.

Assuming that I am a failure just because I site the challenges of my generation is no different than assuming Garth Turner must be a failure at real-estate investing because of his bubble warnings.

One last tidbit of information… The term “Gen-X” was originally coined by Canadian author Douglas Coupland and specifically referred to the group born in the tail end of the baby boom, from 1960-1965. Over the years, the media has corrupted the meaning of that term. No wonder you are confused!

#82 Johnny Five on 03.08.09 at 7:19 am

To Mike as in Mike,

Oh I know Oshawa South has always been rough, but have you had a look north? No, you haven’t, have you? Go for a little drive today. Go up to the nice “Tribute Homes” part of town. See all the nice new homes, except their not new, some are coming on 2 years old, and haven’t been sold, and have already dropped their prices 3 times for a 60% reduction from original selling price. These homes are now selling SUB 200K with NO TAKERS.

Now, when plant 2 closes, and it will this year, what do YOU think is going to happen? As for Pickering/Ajax? Went from a very quiet area to the 5th highest murder rate in Canada and the trend is up.

You can stay here. I’m not.

#83 Taxpayer like you on 03.08.09 at 10:43 am

81 Renter

Now this is funny. Not only are we both engineer types,
but by the “official” definition of “gen X”, I only miss the
boat by a few months. Given my graduation date, I bet
we’re neck and neck. But thats OK as I dont want to
imply a competition, or make you feel “bullied”.

Our seemingly opposing views are probably just reflections of our individual experiences. And your latest post was a far better read than previous “whining”. At least it sure sounded like whining.

One basic principle of demographics tells us that the herd can both win or lose. Boomers actually faced stiff
competition from other boomers for jobs. And while you
can blame boomers for rising house and stock prices, that
also worked against many of them for the same reasons.

And I know we both have paid a helluva lot of taxes………

Good move in buying some gold. Ive got mostly cash (well bank cash that is) and have paid down the house. I will keep the house as I still need it. This is the third
boom-bust I’ve been through (second as a home and business owner).

#84 Mel Eager on 03.08.09 at 11:42 am

Garth’s message has been to unload overpriced real estate if you want to capitalize on your gains (or at least to not go underwater in the worst case), lest property values go down further. Then pocket your gains and rent until the market hits bottom. Invest the difference between your old monthly Mortgage/Utilities/Upkeep/Insurance expense and the new lower rent.

I don’t think he is a hypocrite, so the price of his recent acquistion must have been at a price too good to pass up, or he negotiated to that low price. I doubt that he overpaid.

I wish he would reveal the price it was listed, the price he ended up paying, and the Vulture tactics utilized. :)

C’mon Garth, throw a bone!


#85 wondering on 03.08.09 at 11:56 am

@Lee McFarlane: I just checked the Reflections data sheet. As usual, the developers are offering one condo at a “low” ($199,000 for a 546 sqft condo), with all others at $269,000 or above. Much, much above.

Plus, it’s an auction; the prices in the data sheet are minimum bid. But it’s a silent auction – you put your bid in, and the developer chooses the one they like best.

Totally stacked in the developer’s favour. That’s not a bargain, they just want you to think that it is.

#86 Barb the proofreader on 03.08.09 at 3:16 pm

#79 nonplused “boomers were the first North American generation to try and put their own children in unrepayable debt ……. You can’t get around that

Oh yes I can. And by a long shot they were not the first.

And I’ll correct you.. The Boomers did not have the control of those mechanisms, the old crony system does. Is it hard for you to harness all the facts in brief? Don’t worry, you are not the only myopic.

My company vice president once said “Just wait Barb. We Baby Boomers have to wait, until the Old Boys Club dies.”

The fact is that the Baby Boomers, as with every generation, are, (and were), forced to live amongst the pillars set out by our older predecessors, and for sure, problematics like the fake Moral Majority of the ultra right wingnuts, horrible people like Falwell and Robertson who preceeded the Baby Boomers were part of the de facto influencers tipping politics, education, media, finance and business toward false agendas. THAT’s the shadowy structure that attempted to, and did interfere, and to a great degree tipped the level ignorance toward their own greedy interests.. Reagan & Bushes being amongst this particular Old Boys Club’s accomplishments over the past 30 years, not the boomers. Get that straight first.

But there’s hope. Successive generations step in to the Old Boys Club and sway the machinations one way or the other, but that takes time. I think it will very SOON be safe to say that the Old Boys Club will take on a meaker presence, but like the ocean, never turn your back on them.

Always, as before us, it’s everyone’s job to be ever vigilant, Greed simply does not go away, it must be strictly guarded and regulated. Starting with the colossal failure of what Baby Boomers were forced to live under by their elders, finally, finally, The Baby Boomers will be in the senior position, the position with the actual power to build a smarter society. It’s about to begin, but the Old Boys Club who preceded The Boomers had to fail first, and they now have.

My boss was right.

#87 Go Green on 03.08.09 at 5:00 pm

“#105 Barb the proofreader

They can run the “technology of the day” (yesteryear) too. But we can’t run their technology.

Hopefully, when we are in the old age home, they will just ignore us, like we did to them.”

Before I reply, I just want to say that I don’t like the format of Garth’s new weblog. I find it difficult to copy and paste previous comments. I don’t also like that people just refer to a name and a post #. There are so many posts that for me, at least, without a quote from a previous poster, it is necessary to review the previous posts to read what was said And sometimes, only the time of the post and poster’s ‘name’ is mentioned. Found Garth’s previous format much easier to follow.

From what I put in quotes above I doubt those were Barb’s words. All I can say is that I and my 5 siblings were there for my parents. My Dad died at the age of 69. My Mother lived to be 85+. We were there for them when they moved here in ’77. They lived in the country and did not have a car. We did most of their shopping, visited every weekend. My sis and I actually tookout a mortgage on their behalf as they could not qualify. When we took out a mtg. we could not take advantage of a govt. program. Our Mom lived with my DH & I for 4+ years and then went into a home at 84, IIRC. A few of us took turns bringing her home each weekend. We did not ignore her at all.

I’ve been reading comments that the baby boomers brought on this fiasco. I’m 61, and I’ve 3 siblings born before me and 2 after. I can assure you that I and most of my siblings basically succeeded in life because of hard work. There was no silver platter. I was the butt of a joke in high school cause I remade a brother’s suit into a stylish outfit for myself, but the material wasn’t ‘femine’ enough. I and my yourger sister worked Thurs, Fri eve’s and Sat. all day during high school. My elder sis at 17 was already working and became a supervisor in a credit dept. of prestigious Cdn. retailer. Yes, it was easier to get a job back then. But, you also worked hard and only got ahead if you worked hard. I don’t have a degree, but I took university courses at night and, with hard work and yes, being in the right place at the right time, I saw and took opportunities. I retired at 54. We worked out my costs to go to work, what I’d earn from my pension, indexing of my pension, taxation on my lower wages, my being able to cook lower cost foods and not going out for 1/2 meals per week, etc. & realized we weren’t losing. We had paid off our mtg., no debts and savings. We’ve bought our cars – used Japanese, but with little mileage, with cash. DH is 53, may retire at 60 but doubt it. If he does, he’ll open his own co and offer his IT services. He already barters for services for our cars. Plus, he can do just about everything mechanical, electrical, etc. in the house so we have never needed the services of these trades.

Re other generations, I know some Gen X & Y’s. Some are go getters and knowledgeable, but many have been spoilt and are not. I think it depends on how their parents lived and what they instilled in their children. We don’t have any children BTW.

Sorry, have gone on too long.

#88 Barb the proofreader on 03.08.09 at 6:33 pm

#87 “I doubt those were Barb’s words”
— Go Green on 03.08.09 at 5:00 pm

Hi Go Green,

You’re right, those are “Nonplussed” words in Comment #18. He/she did not quote me in their comment, although you’re right, it would appear so the way they did it. They were simply making a comment to me.

I am SO in agreement with you about our generation. I am 54 (am I that old, when did that happen?!) I do not know of a single Boomer who did what Nonplussed accuses them of.

However, I know of many older people ahead of the boomers, and many Gen X and some Gen Y who have been ridiculous consumers amongst the ones I know. For instance, my good neighbour has retired parents who were born before the war, who own three huge mansions (ea 6000 sq’ +), one for each season when they are not travelling.

The neighbour themselves, at age 35 has bought their own $1.5m house – far more house than they need and every one of us baby boomer friends have homes that are shabby and small in comparison. I find the Gen X discard their clothes and their appliances with shameful disregard, just so they can have the new toy or fashion to look good. They seem so insecure with their need for new, new, new all the time. That’s my personal experience with the Gen Xs who I know well.

In addition, I’ll point to the kids in their 20’s (some Gen Y’s?) — who I have personally witnessed grabbing for the biggest best house, way above what they can afford. Although that is tempered by some of the kids who bought more realistic homes.

The Baby Boomers I know have taken good care of their parents. They relocate to take care of each other — I’ve seen that so very many times over the years.

I still save and re-use everything I can. I learned that from my mom, who would have been 93 this year. I made my own clothes as a teen, I was a pretty good sewer. I still make all my own curtains and pillows and seat covers. I grow my own herbs and some lettuces and tomatoes. And I cook nearly every meal from scratch. And just for fun, we go on vacation every ten years whether we can afford it or not. This past year we cheated and booked two holidays, but both involved shared costs, flying on points, or free accommodation. You and I both know ways to have fun and we don’t have anything to prove to anyone. From the Baby Boomers I know, they have been very good parents, thrifty, cared for their own parents, and enjoyed life without making others uncomfortable.

The trouble society has now, and always, is not caused by any one particular generation, it is just the insidious creeping of human ignorance and greed — seeping — looking for cracks.

#89 Bill-Muskoka (NAM) on 03.08.09 at 6:36 pm

#87 Go Green on 03.08.09 at 5:00 pm

My Ultimate Solution is this ‘When the pain gets to be so great it is not longer logical to remain, then I am going Green! Soylent Green that is.’

I already have my ‘M*A*S*H DVD ready with the theme song ‘Suicide Is Painless’ on repeat cue! LOL

I plan to disguise my remains as those of a current Famous Person and place them on eBay to the highest bidder!


I will erase all hard drives, and leave the lawyers in a state of mystery.

Will I have the Last Laugh? Count on it! ;-)