The whiff


Have you seen pictures of those jobs fairs? California? Ohio? Thousands of worried people standing in line, clutching their resumes, somehow thinking they’re going to land one of a few precious positions  inside?

There was one in Toronto on Tuesday. Packed. Employers overwhelmed. And the big hire was by a community college which had “a few dozen” jobs. If it were not so sad, you’d think it were comedy.

About this time, Honda – one of the world’s leading carmakers – was telling employees that salaries are being rolled back, bonuses eliminated and 13 shutdown days scheduled for the next few months. This affects workers at several plants, two of them north of Toronto.

Yes, and Air Canada was making every move it could, including getting a new CEO, to stave off bankruptcy. Concurrently, the new Obama-approved CEO of GM was saying out loud bankruptcy of that company is now “more probable.”

Proclaiming the obvious was StatsCan, stating the economy is contracting in a major way, led by cars and houses. It now looks like GDP shrank by 6% in the first three months of the year which is, to use a technical term, frigging awful.

We are now five months after the federal election and two months past a budget, and not a dollar in stimulus money has been spent in Canada. Yeah, interest rates have come crashing down, but other than a gaggle of first-time greater fools, few are rushing into new debt. For every two jobs being lost in the States, we are shedding three. And when Chrysler or GM pull in their horns, entering survival mode, guess which operations will be sacrificed with nary a second thought?

Meanwhile, real estate continues to melt. The latest numbers show US prices down 19% in January from a year earlier, the steepest decline on record. House prices across the entire country have now dropped 30% from their peak. In some cities, it is a 70% dump.

So, tally it up.

Unemployment surges in Canada. Major employers teeter on the edge of bankruptcy. Commodities fall. Wages reverse. The economy shrinks dramatically. Ottawa fiddles.

This is why those who think our housing market (a) has hit bottom, (b) won’t decline nearly as much as the American one, (c) is actually bouncing back or (d) is just fine, because ‘it’s different here’ will make life-altering mistakes. Based on what’s happened here, the speed of it and the intensity of job loss and decline, it’s conceivable Canada is about to fall off a cliff.

Too bad most of our countrymen and women will miss this. It might be Canuck arrogance. Maybe that pervasive whiff of anti-Americanism we love. Maybe nothing but denial.

In Windsor you can now buy a house for less than a car. Think this couldn’t happen in Mississauga, Burnaby, Nepean? Think again.

Note: Regarding the photo on this posting…

Hi Garth: Took these pics yesterday, while walking around Merida, in the Yucatan. I read your daily blog. When I saw these black vultures sitting in a vacant colonial home near downtown Merida I thought of your blog. You always display such great photos. Maybe you could use one of these photos the next time you write about real estate vultures.

Your book “Greater Fool” and also previous books, is one of the reasons I have the luxury of spending the cold winters in Mexico for now. I was lucky enough to have sold a property a minute before midnight. As each day goes by, I am more and more grateful to have sold when I did. Just waiting it out…gotta know when to hold ’em, gotta know when to fold ’em. Enjoy all your postings. Thanks for your efforts. Benita.


#1 Peter on 03.31.09 at 10:14 pm

Wow. If I could buy a house for less than a car in Mississauga, that would be friggin’ sweet. :P

#2 Gord In Vancouver on 03.31.09 at 10:29 pm

Another excellent post, Garth.

I feel for people who are looking for work but have no sympathy whatsoever for those who overextended themselves.

Economic nervousness is just starting to rear its ugly head here on Canada’s west coast.

#3 Cendrine on 03.31.09 at 10:37 pm

We are looking for a house in the Windsor area. We have family there and as we retire, we would rather live close by. Finding a house has been very discouraging due to the fallout from a declining economy. There are numerous power of sale properties, some just gorgeous (snapped up immediately) and many properties showing neglect – the reasons could be financial or emotional. Some foreclosed properties have been so damaged by their former owners they will likely be unsellable. We have been unable to view properties or had showings cancelled because an intransigent spouse does not want to cooperate with a sale made necessary due to divorce prodeedings. A lot of vendors are simply asking too much – why should I pay 199k for a 4 bed/2bath with partly finished basement when I could have a completely finished home with same for 198K? How could someone ask for 188k for a home with half the flooring missing?

I know, I’m just a vulture in training….

#4 Eduardo on 03.31.09 at 10:46 pm

A house in exchange for a few months gross income? Somehow I doubt it.

#5 Anon on 03.31.09 at 10:48 pm

Here is the quote of the year from Toronto’s “Condo King” Brad J. Lamb:

“You know, the average person doesn’t understand anything they hear on television. All these economic facts you’re (referring to Garth?) spitting out, most people don’t even know how to calculate fractions. They don’t understand. You’re just confusing them and it’s completely not necessary.”

That is from the April 2009 edition of the ‘Bayview Post’ which was free at the Second Cup down by my way. The cover reads:

“2009 Real Estate Roundtable – Where’s Housing Headed?”

Inside, their ‘experts’ speak on “how low Bayview house prices can go”.

Experts include Garth as well as a few other familiar names such as Harry Stinson, Elise Kalles, Sherry Cooper and Mr. Lamb.

I was pleasantly surprised that the commentary was somewhat even, having figured that it was simply typical realtor propaganda.

Isn’t it awesome that a “professional” thinks so highly of his clientèle?

Browsing his site (at offers up these little gems for first time buyers:

-Be decisive and make your move. My observations have shown that indecision usually costs a buyer more than making an educated decision.

-Make an offer – just do it!

-Do not chicken out! I could tell you of hundreds of stories of first time buyers that lost their nerve. Every single one of them was worse off for it, and most of them ended up realizing this fast and deeply regretted their decision to bail.


I wonder how many of those that balked are now “deeply regretting” that decision. I really wish I had spent a sh!tload of borrowed money last year so that I could live in a place worth less today. And paying huge condo fees is the icing on the cake.

Mr. Lamb’s site also states that “Real Estate agents can offer you a certain crash course in your preferred real estate in a few hours.” I hope the curriculum includes fractions.

#6 Too Old Bob$ on 03.31.09 at 10:48 pm

-About Honda. Yes they sell vehicles, so they will take a hit, as well as the other foreign companies. If and when things get better, they (foreigners) will probably be one of the first to come back.
-Air Canada. This guy they hired was there before to help restructure. Didn’t the employees hate this guy for some reason?
-Housing market has dropped considerably, but still needs to be lower in other regions. Still some homes overpriced.
-Who ever thought a car would be worth more than a house. Use to be a car was a depreciating asset, thus a bad investment (unless rare). Now it looks like a house is a depreciating asset. Defies logic. Then again, I guess if it is overvalued or too expensive, who needs it or even wants it.
-About the Vulture. Just be glad he’s over there and not in North America. In time he would look good in a pot with a few potatoes. mmm!

#7 Da HK Kid on 03.31.09 at 10:51 pm

This is an RE vulture pictured at a suburban town near you folks. He’s reads the Case Shiller religiously, he knows spring sales are washed out, he knows bulk of any RE sales are low end and 50% of all sales are distressed properties.

He knows avg. prices in the US are now back to 2003.

He is good at bottom fishing and ripping the flesh away taking the victim to the bone!

Prices still have a long way to go people. When this guy and his friends are done housing will be affordable but what will that mean? Will a home be an investment?

HINT – begin to watch the foreclosed houses show up on your street, you will know when as this guy will be perched from the highest tree each day you leave for work and come home.

REALITY – he will suck your asking price down to levels unimaginable as you must sell in tune with what the street is selling – foreclosures! Wrap your mind around the reality of these dynamics and sell before he shows!

At the bottom (2010-2011), will RE likely just be a place to live, WILL IT EVEN MAKE SENSE TO BUY???


#8 Basil Fawlty on 03.31.09 at 10:56 pm

Holy smokes Garth. People eating Racoons in Detroit, GDP down 6% in one quarter, tent cities all over the US, $11.5T in spending and bailouts (so far). What else, broke banks, broke pension funds, broke cities, states and countries like Iceland and soon the UK, Ireland and most of Eastern Europe. Oh yes, broke airlines, broke auto manufacturers, broke house builders, broke retailers, and the soon to collapse commercial real estate market.
Am I just a nervous Nelly or is this starting to look like a depression?

#9 Ultraman on 03.31.09 at 11:00 pm

“…but other than a gaggle of first-time greater fools, few are rushing into new debt.”

As a lender for a large Credit Union here in the land of the delusional (Vancouver), I can attest that this is not the case. Day in, day out I can’t believe how much debt people are pilling on. This is not going to end well.

#10 Eduardo on 03.31.09 at 11:03 pm

Garth, I’d also like to point out that commodities have increased lately and are forecasted to continue to do so. Somehow all this farmland and oil isn’t looking so bad even if that’s our “one-trick pony”.

Seems more lucrative than manufacturing cars and federal government work.

To whoever said in the previous thread that it’s greedy oil workers who are overpaid:
1. These workers are paid according to risks inherent to their jobs
2. The industry is cyclical and they get paid more to accept more job risk
3. They don’t have autoworker pensions
4. EPCMS and juniors are paid more than majors because they also accept more cyclical risks
5. Majors tighten the belt but the workers are largely unaffected. Raises are lower, bonuses are lower and hiring freezes are common, but they are paid less in exchange for less job risk.

Someone linked this:

It shows the whopping pay of 23$ to 38$… that’s less than an autoworker and I’ll be damned… Their UNION is accepting PAYCUTS rather than bankrupting the company.

#11 dd on 03.31.09 at 11:10 pm

…(d) is just fine, because ‘it’s different here’ …

Seems like Garth is talking you North Vancouver Citizen Jr. “And we all admit the Pacific Northwest is different.”
Watch out you might start believing your own crap.

#12 Mike B on 03.31.09 at 11:15 pm

SO you are saying it cannot happen in Miss/Burnaby or you think it can happen?

#13 Increasing that 1% on 03.31.09 at 11:26 pm

Nice picture, Benita. Amazing birds.

Can’t believe the killing of the wildlife, ie: in Detroit with shooting of raccoons. They really need to focus on multiplying their wildlife, rather than eliminating it…

Overheard in grocery line today, as I was the monkeyinthemiddle, person’s ‘daughter got job at RIM,…surprised anyone’s hiring…
Also, new Starbuck’s just opened in area- thought they had closed so many

#14 Alex on 03.31.09 at 11:27 pm

Peter, if that time comes you won’t need a car, and won’t have enough money to pay the bills.
I don’t say it won’t come.

#15 Mike B on 03.31.09 at 11:28 pm

Great Post by Pol Can People gotta see this!!

Unbelievable stuff…too bad he is not very direct!!!

Bonuses put in their place and the insestuous nature of Goldman the grand conspirators..

#16 LS on 03.31.09 at 11:36 pm

Honda the world’s leading car maker? By what measure? Last I checked Toyota was still the biggest. Honda is nowhere near the top.

Also housing in canada seems to be stuck in some sort of twilight zone. Looks like sales and prices for march in Victoria are up over February. Same as February sales and prices were above January. I’m hoping its a dead cat…

#17 Shawn on 03.31.09 at 11:38 pm

Someone mentioned “Real Estate ” vultures. Why the insult?

Vulture, that would be someone with money who buys a property at a price accepted by the seller? Maybe not what the seller would like, but what the market will bear right now.

Why is anyone a vulture who buys at the lowest price available? Why was a home owner greedy if they got top dollar in 2007?

We are all price takers, as individuals we don’t make the market go up or down, though collectively we do.

As individuals we are free to act in our best interest within the law and morality. That’s not being a vulture or a specualtor or greedy, it’s just doing what we should in a market economy.

From Garth’s advice here I take that a lot of communities could sorely use some buyers now, vultures or not.

#18 David_#3 on 03.31.09 at 11:39 pm

You got to know when to hold em,
Know when to fold em,
Know when to walk away,
Know when to run….

#19 WillsDad on 04.01.09 at 12:00 am


NEW YORK ( — General Motors lost the title of world’s largest automaker to rival Toyota Motor in 2008, according to sales figures released Wednesday by the troubled U.S. automaker. It was the first time in nearly 80 years that GM did not sell the most cars in the world.

#20 Soylent Green is People on 04.01.09 at 12:03 am

Not to make light of our bad situation, but…

re pic, best scroll down laugh out loud, actually out loud…

#21 joseph on 04.01.09 at 12:07 am

Hi Garth,

You call those who are now buying “greater fools” but didn’t you yourself purchase property not too long ago?

POS. — Garth

#22 Dario on 04.01.09 at 12:23 am

Garth, it’s almost impossible for homes in the Mississauga area to devalue to the point your suggesting. There’s enough diversification in income sources (public, private, non-automotive manufacturing & technology) to protect the city from a complete fire sale.

I agree, where your scenario is playing out is in the small towns and cities of South Western Ontario.

Down here it’s the perfect storm. Almost all the high wage, unionized manufacturing plants are either closed or are closing. There is nothing available right now. If you’re lucky, you can find a $10 to $12 an hour job in food production facility making chocolates, donuts or waffles. But let’s be honest. This is not going to be enough to cover your monthly payment on let’s say a $150,000.00 mortgage.

The bankruptcy of GM or the closure of Chrysler’s facilities in Canada will result in utter economic devastation in South Western Ontario. Just ask anyone who lived through the closure of Massey Ferguson in Brantford. They know what a fire sale looks like. Boarded up houses. A downtown so run down it was used as the set for a horror film. It’s coming.

#23 Grumpydawgs on 04.01.09 at 12:26 am

The unemployment frieght train is now on the straight-away and really picking up steam. I calculate the GDP is dropping an annualized 13.6% due the quarterly performance but I could be too optimistic based on the recent months performance. The projection for double digit unemployment that is being bandied around could just be a PR trial balloon thats trying to get ahead of the bad news. When the MSM has assumed that ‘double digit’ means 10% ( as quoted too often in the recent press releases) I really believe it could be a ‘double digit 17 to 20% by 4Q ’09. The velocity of the downside momentum is breathtaking.

Big pieces are starting to fall away. The MSM never imagined that the government would propose bankruptcy even as an aside comment, but there it is in the news, a very real possiblity. Thats a lose lose for the unions and the legacy.

Air Canada is sure to fold, who’s going to buy this turkey?

On the left coast, devastating news today that an additional two ( for a total of four) cruise ship lines were bailing out of Vancouver permanently and relocating to Seattle and the Caribbean taking approx 500,000 tourist visits with them along with 200 ++ million dollars in City and federal taxes. Tens of thousands of people are directly dependant on the cruise ship trade in Vancouver. Cabbies, longshoremen, retail, transpo, delivery, tour ops, chandelary, administration, general advertising, wed design, hotel, restaurant, travel agents, planners etc etc , you name it. This is a bombshell as big as anything in Windsor. The untouchable tourist industry in “We’re differant” Vancouver has just been sacked !!!!!!

These jobs can’t be renegotiated back, there is no stimulus package or short term money for payroll, this loss is PERMANENT with a capital P.

The number of tourists from the US on daytrips will most likely fall even further when the new ‘border hardening strategy’ takes place in July ’09 due the neccesity for all Americans to hold passports, only 20% currently do. This might not bode well for the ” millions of Americans coming to the area” that the IOC and VANOC have been talking about. Oddly enough thier insiders have been quietly selling thier venue tickets through cheesy brokers on the internet as was exposed on TV last week. Olympic bust anyone. Speaking of Olympic busts , Vancouver, like all other post Olympic venues, will start the post Olympic bust early due to the enormous job losses. Today there was a rinky dink job fair in Vancouver, it was standing room only. The real jobs were at Starbucks and the Corrections Canada booth, the rest were sales and do-it-yourself scams.

#24 Needlesscasualties on 04.01.09 at 1:43 am

I miss those charts from this blog that showed Canadian home prices toppling downwards, overlayed with US home prices. I guess the charts might show a pretty massive stabilizing in Canada despite the US downturn. But no matter what the 90s show, the housing market in Canada is beating the odds for some reason. I can’t argue with Garth’s facts, but people I meet think Van and Alberta will slow but Ontario (*especially Toronto*), and East Coast will do great comparitively in the short-term. My buddy selling his house actually has a bidding war going on!?!

#25 Shaun on 04.01.09 at 2:36 am

I really don’t believe house prices on average across Canada have dropped 30% from their peak. I see 10-15% being more accurate from my perspective.

It’s coming, as I wrote. — Garth

#26 timbo on 04.01.09 at 2:46 am

this is not an ad but “google alert” is going to kill newsprint media.

I could ask for a topic, wait for the hits, filter the good from the bad and form my own conclusions. As long as google is not using manipulated search criteria this might be the end of print and television news.

or, maybe I am looking too far ahead…
running a search on g20 protest to see how much will come up.

#27 timbo on 04.01.09 at 3:03 am

AIG -lol

Quick – someone create a whole comic book on AIG, you would make a fortune.

If you missed the cookie monster…here he is again

#28 ally ally oxycontin free on 04.01.09 at 5:21 am

People’s agenda for G20 leaders

An ugly statistical triad haunts Prime Minister Stephen Harper*** and the other Group of 20 leaders as they meet in London today to co-ordinate policy on the global financial crisis. The world has given up $50 trillion in wealth, …

***Sorry fellers, I can’t offer any more … We already gave our all when Steve-0 and O’Flairity sca-rewed us on Income Trusts.

BTW … Seniors are strong … and unlike the rumours, most have excellent memories !

Da plane, boss, da plane …

#29 C.M. on 04.01.09 at 5:49 am

Seems like only yesterday that the BOC was forecasting an optimistic 3% or so growth for the “different here” economy.


#30 North Vancouver Citizen Jr. on 04.01.09 at 5:52 am

Nice follow thru blog article today Garth.

…I will be honoured to become your Federal Finance Minister, Prime Minister Turner.

As Pacific west coast link to your Govt, currently now in waiting, I can provide important factoid/data/pulse of the west’s citizenry.

You will be loved like no other previous Prime Minister has been before.

…Only hope Ottawa has Sushi and Thai restaurants.

respectively yours,

North Van Citizen Jr.

p.s……Is there a Burnaby in Ontario?

#31 David Bakody on 04.01.09 at 6:24 am

Hey Peter, as mentioned all that glitters is not gold pal. If if you got a McMansion for free, the cost of living there would be over $2000 per month ….. and if it were among many vacant homes ….security costs could double that and then Peter try finding insurance! Think Garth mentioned all this before.

Not good news for Air Canada, I booked a flight in July to Montreal en route to France for my daughters wedding …. not good news, but should I not make it I will save on accommodations cost and the tears will fade in time. Having said that, Air Canada employs more than 50,000 much more so if the banks can have over 100B in loan guarantees (to which they are sure to tap into) Air Canada must be getting much consideration. From this morning news the G-20 want old money bags, Mr. “Bragger” Harper about Canada’s great banks and now the G-20 want us to cough up more money.

Oh what a foolish man to go on America TV and tell the world Canada is just fine and our Banks are the Best in the World, hello? ……. stand by we are all going to pay for this, its like taking a big bag of candy to school.

OMG and to think 36% of the voters gave this man full control [email protected]!!

#32 DG on 04.01.09 at 6:24 am

This weekend, a friend was going on and on about what an amazing deal we’d be getting if we paid $750k for a house on his street in Toronto. $750k for a house that probably needs $200k worth of renovations. He is absolutely convinced that not only has property on his street not fallen in value, it is poised to increase. There is a slightly smaller, albeit fully renovated, house sitting unsold two blocks away for just over $600k. But it, like everything else that contradicts his faith, is “different”.

The most perplexing thing about his delusion is that he works in a company where several of his colleagues were laid off just days earlier. He can’t or won’t understand that there is any connection between unemployment and house prices.

I suppose people often adopt beliefs that are comforting rather than ones that are true, but it is still bewildering to me that, in the face of real estate spin, educated people have completely lost their sense of reality.

#33 just a poor guy on 04.01.09 at 6:26 am

“In Windsor you can now buy a house for less than a car. Think this could happen in Mississauga, Burnaby, Nepean?”

Yeah right, when you say “a car”, do you mean a Ferrari?

#34 Herb on 04.01.09 at 7:12 am

Michael Moore describes the soft, unmentionable underbelly of the economic crisis –

#35 Gord In Vancouver on 04.01.09 at 7:16 am

Good news for overextended BC residents

Looks like time is on your side….for now.

#36 The Other David on 04.01.09 at 7:37 am

#33 just a poor guy

holy crap I thought i was gonna get a handful of hits, but my word..hundreds for under 100k…and quite a few for under 60K, and more than a handfull for about 40K or less.

For Sale: $32,500 – detached

General Description

#37 Mike (authentic) on 04.01.09 at 8:02 am

US Job loss numbers just in:

748,000 jobs lost in March
708,000 jobs lost (rev) in Feb.

They expect SEVERAL more months of this to come.

That’s a lot of new people standing in the EI/UI line.


#38 timbo on 04.01.09 at 8:11 am

I am puzzled by how people keep blaming the company problems on the worker. I am not in a union but I understand how the big 3 got into this mess and it was not because of the worker

Governments by giving tax breaks to foreign car-makers who open the same service at lower labor and currency costs will destroy you everytime. You must compete at a level playing field at all times. The big 3 died because of all the non-union car plants in the Southern-US that are operating with no unions and with no head-office (US dollar) based costs.

We are up to our eyeballs in debt because we sold our manufacturing to offshore interests. Without the manufacturing jobs/dollars in the system most of the spending money moves off-shore and is not kept in the system.

please do not blame the worker as your job could be next. And the kicker is that they will blame you for trying to make a good wage for your family when the real cause is pushed under the rug.

Waiting for the flood of new workers to take my job at 1/2 pay and blaming me for making too much….unreal!

#39 timbo on 04.01.09 at 8:23 am

742,000 !!!!

up to the eyeballs in debt and this news.

nothing to see here, move along, buy,buy,buy.

#40 ally ally oxycontin free on 04.01.09 at 8:27 am

Despite personally being burned on LavaLife, this type of business is expanding sharply … Probably as an extension of the Wall Street and Banker’s Schemes. You might even get a rush call from your broker.

#41 Rose-marie on 04.01.09 at 8:36 am

Is it wise to buy a home within the next year if you can pay for it outright and have no debt or mortgage and if you plan to stay for at least 10 years?

Sure, if you look at it as a home to consume rather than an asset for appreciation. — Garth

#42 John on 04.01.09 at 8:46 am

Timbo, “Google Alert” does not compete with newsprint media. It’s simply an automated way to search and really isn’t designed to return current news items.

Plus, the results returned are not very useful. There is so much crap mixed in with the useful links that searching online news sites is much more efficient.

#43 Alberta Girl on 04.01.09 at 8:57 am

You don’t see that house prices dropped more that 30%? I had listed my 1000sq ft, fully renovated 2 story in Calgary for $330K in July of 2007 – We actually sold it on December 1st, 2007 for $299K and now when I check the listings for the exact same style of house on my very same block – they are listing at $204K…. and not many are selling. All I can say is whew! Although it wasn’t Garths advice but my own common sense that told me I bought cheap and really, how much higher can RE it go? Sure, there may be the odd bidding war, location always wins for some but I’d say the majority out there have lost their equity….or are losing it as we speak.

#44 lgre on 04.01.09 at 8:58 am

‘POS. — Garth”

Garth I have also been looking at POS propertys lately but I see no discount. I have not put an offer in so who knows what I can buy it for. What kind of discount did you get? dont tell me the price you paid just the % off you received from asking. Just so I have an idea.

A property under POS must, by pain of lawsuit, be offered at a market rate. So you will never know the true discounted value until you make an offer. Have you done that, or are you just kicking the tires? — Garth

#45 Happyplace on 04.01.09 at 8:59 am

#32 DG – Unfortunately, your friend’s attitude is still pervasive in Toronto. Prices for detached homes/townhouses in Etobicoke have dropped maybe 10% but since sellers are still getting close to full asking price, not much has changed yet.

#46 David Bakody on 04.01.09 at 9:04 am

Just think, with all the goings on Harper & Co are now picking on once PM Brian Mulroney ….. shame! Like him or not ( and a lot people did at one time, record numbers in fact) he remains an integral part of Canadian History and for that he deserves our respect. Now you (MSM) must be catching on that the Reformers mean to do dirty business “Big Time” Early this morning when I awoke I wonder just how Question Period would have re-acted with Garth’s point of views being raised in Question Period with the speaker finding his backbone demanding all questions and answers be heard ….. Questions like jobs for Canadians, the truth about housing /040 mortgages, EI/UI, food banks, cost of living increases, medical care, care for seniors & the needs of all who require special care, accountability of taxpayer dollars via open and transparent assistance to our AG, and of course weekly up dates as to what the government is doing to help all Canadians. It would appear our MSM is more concerned with the mud that is being flung at the walls in Canadian living rooms rather than the issues that matter most to Canadians …. Food Shelter & Clothing … the needs of live not the wants.

#47 Devil's Advocate on 04.01.09 at 9:17 am

I have had a long and rewarding career in real estate. For the past five years I have believed something was amiss. The recent past has not been like those years before. I remember only too many times driving to my office watching BMWs, Hummers and Caddies pass in a hurry to get where ever it was they were going. I remember to many multiple offers on overpriced homes. I remember too many big screen TVs flying off the shelves at Future Shop. All that was then. I longed then for a return to normalcy. Unfortunately the swing of the pendulum has gone far further than back to normal.

We haven’t returned to normal. We have swung far past it and taken with us our bad habits of late. Now when we should be saving few have the means by which to save. Many have debt obligations far exceeding their receivables. Many are living on yet more credit, amassing ever more debt, hoping that things will turn around and they will once again have a positive number at the bottom of their balance sheet. This behavior is rampant throughout our economy from Main Street to Wall Street on up to Government as we pile on ever more debt. The pendulum will be slow, if ever, to return to normal as we come to terms with the mountains of debt we have accumulated at all levels.

I see this in my own industry more than anything. In Kelowna there are over 700 REALTORs®. We are trending toward a very probable two, maybe three, property sales for every REALTOR® at the end of the year. After paying business expenses the average REALTOR will find their 2009 cash flow statement shows a negative cash flow many live on in a year. Still few leave the industry. How do they do it? Why do they do it? Credit. They gamble that things will turn around. They speculate, just as did those “last fools in” the condo flippers, that they will turn a profit in the future.

I own my home free and clear. I own my cars free and clear. I am no longer clothing, feeding or putting children through school. My personal expenses are minimal. We live a frugal lifestyle. Yet I am finding it difficult to stay above water in this market. How possibly can a younger REALTOR who has been in business less than five years knowing only an exuberant market stay afloat? Credit is the answer.

This is a “Credit Crisis”? It’s not a credit crisis. This is a detoxification of our conspicuous consumption society’s habitual dependence on the drug that fuels that high without rationale. That drug is credit. Until more kick the habit we will continue to drive our economy under the influence toward that brick wall. We are far from “on the road to recovery” from my perspective. We are still speeding down that other road, the one with a disastrous ending ignoring all the exits along the way.

#48 KenDa on 04.01.09 at 9:19 am

Great post as usual!

However I am sceptical regarding your comments on housing prices going down in Mississauga. I live there and have been looking at the housing market and prices. Houses are being sold at near listing prices (>96%) and with DOM <30days. True that there are some more houses still unsold but those owners are not lowering their prices due to the above stats. Seriously I do not believe we will see prices going down by 10% or more in Mississauga, not for the good houses, that is.

The US market meltdown started 4 years ago. Ours started 8 months ago. There is far more to come so prices at this moment are irrelevent. — Garth

#49 pbrasseur on 04.01.09 at 9:20 am

I have a friend who wants to buy a 200K condo as an investment in Montreal (next to one he already occupies and has mortgage) and plans to rent it. He wants to put about 30-40K down and borrow the rest on a 35 year mortgage. He claims it’s a good investment because the condo will then just pay for itself. There is no “vulturing” involved here as prices have not declined yet in his area.

What do you thing of his strategy, is it good or bad and why?

My own feeling is that it would be far less trouble and less risky to invest that money in some financial product, for such a long period the stock market could be a pretty good bet.

#50 hagbard on 04.01.09 at 9:23 am

I thought the term for Canadian belief that they can weather any storm coming from the US was “Canadian Exceptionalism”?

Anyway, I’m in the same boat as the other guy from the Windsor area. Trying to decide whether to continue renting or buy now. We have the cash to go without a mortgage on a basic bungalow.

I’m balancing our optimism that housing prices will continue down, and my pessimism that something awful could be awaiting our savings (ie: inflation, bank holidays, collapse of the fiat currency). If we go ahead and buy, we at least have a tangible asset rather than piles of virtual paper. A bird in the hand…?

#51 Harry on 04.01.09 at 9:29 am

I really do not understand why anyone would risk buying any property in Windsor at this time.

Windsor has the highest unemployment rate in the country at over 10% and this is before the 3rd shift at the Chrysler mini van plant is to be indefinitely laid off in June affecting 1,200 plus workers (and we have NO idea what will happen in 30 days – bankruptcy for Chrysler or will they pull out of Canada like they threatened?). Plus Windsor has the highest rental vacancy in all of Canada!

For those who are considering buying a property in Windsor or who do not believe that you can purchase a fully detached home inside the city limits of Windsor for less than a car, go to and do your own research. There are currently 25, yes 25, homes listed for less than $50,000!!! The cheapest is $30,900 … now these are list prices, who knows what you can actually buy them for!!! Granted these are small houses with 2 to 3 bedrooms, only one bath, typically a crawl space instead of a full basement and only street parking, but still very cheap.

Now if you want a real eye opener, do the same search in Windsor for fully detached homes priced between $50,000 and $75,000 … currently almost 400 properties available!

Windsor is not a large city, last census showed only 216,000 people. With all the problems that Windsor has, you would really need a large set of [email protected]@%& to buy a property here (whether it’s a foreclosure or not).

Why? Because in addition to all the current problems, if Chrysler Canada pulls out of Canada (which is what they are threatening to do) over 4,000 CAW high paying jobs will be lost in Windsor alone plus countless thousands of supplier jobs all in and around Windsor. With the possible loss of all these thousands of high paying jobs in a what is considered a small city, the number of home foreclosures will shoot up even higher and the downward pressure on home prices will even be greater!

You would almost be better off taking your down payment to the Windsor Caesar’s casino … probably better odds at turning a profit!

#52 Finanzkrise on 04.01.09 at 9:38 am

Nouriel Roubini’s latest predictions are for an L shaped recession, not a deflationary spiral but deflationary forces that impede growth for at least a few years. He does not see inflation as an issue, as he believes the central banks will (failing any major policy mistakes) mop up any excess liquidity.,%5Edji,%5Egspc?sec=topStories&pos=9&asset=TBD&ccode=TBD

Garth – what are your thoughts on the ability of the Fed to balance liquidity in a couple of years (after deflationary forces run their course), in order to moderate inflation?

Given the magnitude of the deflationary forces, I would be surprised if certain central banks don’t end up overcorrecting. Moreover, excess liquidity (when this does finally become a consideration) is likely to gravitate to scarce resources like oil in a big way before policymakers have a chance to react.

#53 EW on 04.01.09 at 9:49 am

#7 Da HK Kid

” …At the bottom (2010-2011), will RE likely just be a place to live, WILL IT EVEN MAKE SENSE TO BUY??? …”

Actually, residential prices in the UsofA should not bottom until mid-2012, the next major upswing should occur around 2020. Canada is about 12 – 24 months behind, so we’ll bottom perhaps 2013 or 2014 (unless the decline curves are steeper). Housing will be down and out (based on demographics) until after 2020. Once a bubble bursts it stays that way for quite some time – think Japan & think retiring “baby boomers” (demographics).

This is really only getting started, so patience is required.

Many economists I have been following have correctly “called this” bubble since 2002 (some even earlier). Some of these people had had quite accurate projections as to the price declines we’re into now (these were made in 2005 or earlier, well BEFORE the US bubble peak). The return to the trend is overall, a 10 – 15 year event (closer to the matter) and the US is at best into year # 3.

So this was, is and continues to be a quite predicable series of events, and ones, which was warned and written about for 7+ years now, so (thankfully) hardly a surprise to anyone..

There are still so many bubbles yet to burst (against based on forecasts from 2005) such as: credit cards, commercial RE (office buildings, malls, stores..), jobs (in-progress), bond markets (corporate, state and yes, US Treasuries too..), pension plans, mortgages (prime, near-prime, jumbo, option-ARMs..), and others.

Likewise there are MANY unresolved issues which will be resolved by the time this is over – from derivatives, a bubble economy based on fake credit [debt] expansion, an over-valued US$, and so many others. Not to mention, all the “hide the toxic crap” games on-going. Oh think nationalization is over? – it’s just getting started & airlines are up next.

Just wait you’ll see many American cities and even states declaring bankruptcy & even parts of US cities being abandoned. Don’t think Canada will do better than the US – we’re far more vulnerable and thus, declines and problems here will be as bad if not worse.

As for prices, they will be off 60 – 90% from the peak depending upon location. In some places, perhaps many, losses will be 100%. Some banks won’t even want the property back! I have to check with “Mr. Mortgage” but I seem to recall well over 80% of California “sales” as REOs right now.

California state is now down 58.57 % as of Feb 2009 (peak resale price was April 2007 @ $ 597, 640 and is now to $ 247 590 or a loss of $ 350, 050 over 22 months. Does anyone really think that the bubble economies of Ontario or British Columbia will do better than California, Florida or Nevada?

Some declines were steeper in California such as Monterey County (a 73.73 % decline of $ 589, 500 over just 18 months, while others like San Diego have been doing quite well (a 49.43 % decline [condos are closer to 60%] of $320, 980 over a longer 33 month period. Think Toronto or Vancouver won’t see the same or worse?

Again, the bottom is around mid-2012 {1 or 2 years later in Canad) although some areas will hit bottom sooner and others, later.

Patience is required, no point in catching falling knives. There are still have many years of declines to come with considerable sideways action following this.


#54 confused and a little crazed on 04.01.09 at 10:09 am

Hi people,

I apologize for my lack of abbreviated knowledge but what does (POS) mean?

Power of Sale. — Garth

#55 Steve outside Canada on 04.01.09 at 10:13 am

It’s true, I checked MLS and there are 426 detached houses in windsor for under 100k. Most between 30k and 50 k. For info!!!

#56 Got A Watch on 04.01.09 at 10:17 am

There are always a large proportion of the public who pay little attention to news, whether TV or internet sites. Who get their “news” from other people at work or school who share their delusions.

The plain fact is that real estate has been blowing a bubble in Canada for 10 years, and that bubble has now burst.

Some areas of Quebec and Eastern Canada did not get as bubblish as Ontario and the West. But in most areas, the price of the average home soared far above the normal market condition of 3 X average family income.

I have to keep beating this drum, because so few seem to get it. Even here, arguably the most economically savvy real estate Blog in Canada, we get lots of comments from the clueless, talking nonsense. Several of them in this thread even.

The train has left the station. We are in a Depression, and it will last for many years yet. The Kondratiev Wave theory suggest the next real up leg in the economy will not happen until 2018-2020 or so. The Japan case study points to it lasting longer than that, they have been in a deflationary recession for over 20 years now, and are slipping under the waves yet again.

Judging by the attitudes expressed by most citizens, we are no where near the classic ‘capitulation’ bottom yet, for the economy or real estate or stock markets.

We have many years of bad news to go, then a long period when the economy will be flat as roadkill on the highway. Consumers will have debt revulsion, real estate revulsion and investing revulsion – no one will want anything to do with those – when the real bottom is reached.

Any ‘vulture’ who leaps into action now will be just further roadkill, being far too early.

#57 Happy Renter in North Van on 04.01.09 at 10:23 am

#6 Too Old Bob$… “Hatred” from AC employees to Calin Rovinescu is too mild of a word… They used to call him “Roving Barbecue” because he fried some many employees’ jobs…

#58 pbrasseur on 04.01.09 at 10:30 am

I will attempt answering my own question (#48)

…about a friend who wants to buy a condo to rent it as an investment that will effortlessly “pay for itself”. I think it’s a very bad idea for the following reasons:

The construction will age, probably prematurely as the unit is rented, to maintain value renovations will be required and add to the cost.

Even if there is no market meltdown in Montreal it is unlikely the condo market will rise by much over the years as prices are already high and will be driven mostly by retirees and first timers whose income won’t rise that quickly. Prospect of economic growth around Montreal area are not that great either, if only for demographic reasons.

Compared to that, over a 35 year period (or even just 20) an investment in the stock market that can tap the whole world will likely double several times while remaining a liquid investment very easy to get out of.

Interest rates can only go up, the only question is when and how much, this is an important element of risk.

A worse case (and not so unlikely) scenario would be a RE meltdown that would drive down rent prices. If on top of that inflation happens and rates rise this “investment” could become a full blown financial fiasco where income diminishes while expenses rise, not only it would not make money but would suck wealth while the illiquid nature of the investment will make difficult to get out of.

#59 Peter @ Canadian Banks on 04.01.09 at 10:34 am


You mentioned that the property you bought was POS. Where do you get listings for POS properties? I’m interested in Toronto/GTA POS listings.



#60 60ish on 04.01.09 at 10:44 am

Good grief David, I can’t believe you said that. I can think of no other citizen more in need of being proven innocent or guilty, than a person accused of committing a felony while serving as the Prime Minister of Canada. Nor of a past PM so undeserving of our respect.

Yes he garnered large election victories — for many reasons. His opponent in both elections was John Turner, a man equally incompetent and disliked, as Joe Clark and Stephane Dion.

Mr. Mulroney is likely the most hated PM in modern Canadian history — who can ever forget him making a mockery of the Canadian senate. When the Liberal senate majority blocked passage of the GST bill, he simply loaded the senate with 8 dead-wood conservatives until he had his majority. One was under investigation by the RCMP at the time, and had to resign soon afterwards. Richard Hatfield was another, a past Premier who had lost ‘every’ seat in his last election in New Brunswick. But all conservative ‘yes men’ who voted as instructed and the GST passed.

What higher offence could there be in Canada, than the PM — the role model for every citizen — committing a felony while in power. His guilt or innocence must be resolved, and he must be punished if found guilty.

#61 Alberta Ed on 04.01.09 at 10:44 am

Well, things are just fine here in Calgary, I have it on good authority — the Calgary Herald reported today that the increasing industrial real estate vacancy rate is actually a sign of stability, ’cause no one is building any more. Whew!

#62 60ish on 04.01.09 at 10:45 am

My post above was regarding:
#45 David Bakody
…”Just think, with all the goings on Harper & Co are now picking on once PM Brian Mulroney “.. shame! Like him or not ( and a lot people did at one time, record numbers in fact) he remains an integral part of Canadian History and for that he deserves our respect.”

#63 Munch on 04.01.09 at 10:47 am

Why is there such a stigma attached to someone who offers a low bid on a home? Surely, it’s the buyer’s prerogative?

But all this talk of “vultures” suggests a stigma – explain please?

#64 lgre on 04.01.09 at 10:55 am

#48 – it all depends on what type of laws they have in quebec as far as the landlord/tenants act..if its anything like Ontario tell him to stay away..getting professional tentants out of a place in Ontario is a nightmare. Tell him to learn that rules/laws and regulations of landlording before he gets in.

How much positive cash flow is he making monthly of this deal?

#65 lgre on 04.01.09 at 10:59 am

“A property under POS must, by pain of lawsuit, be offered at a market rate. So you will never know the true discounted value until you make an offer. Have you done that, or are you just kicking the tires? — Garth”

I have not put an offer in yet, I’ve yet to find a place worth it..i looked at a couple but they were dated back to 1970. Even at a $50k discount I still wouldnt of bought them. Still looking and we’ll see if anything pops up worth while.

So your prior comment was uninformed. Experience is the great teacher. — Garth

#66 Snapper on 04.01.09 at 11:08 am

After reading many of the comments, I am struck by peoples sense of time. As Garth has mentioned, the US realty slide has been going on for 4 years and we are just 8 months into it. People, this RE slide has just begun … wait until unemployment starts to really hit and last. Really, we’re only half way through the first period of this downward move in RE. Eventually, the vultures will feast but right now in Canada the prey is still kicking. It’s not quite carrion yet.

#67 Flip on 04.01.09 at 11:21 am

News from Cow-greedy (Calgary) in today’s Edmonton Journal…

Laid off engineers accustomed to making $120k plus/year and getting regular “bidding wars” from employers for their services are now shocked that they are lining up like common folks and fighting for a job…

I guess playing “Warcraft” with your co-workers for hours on end during business hours was not such a swift move when the “who are we going to let go?” time finally came up… eh – genius?

#68 Keith in Calgary on 04.01.09 at 11:22 am

Wage deflation…….

For every $10K of lost income you can support $125K of mortgage debt…..for $20K of lost income you could support $250K of mortgage debt……

This is based on a $125,000 amortized over 25 years at 6%…..which equals $799 P+I per month times 12 months = $10K +/- annually………

Ergo, as wages go down, RE prices follow…….

#69 Da HK Kid on 04.01.09 at 11:39 am

I will second Garth’s comments to the Mistersauga optimist. Canada RE will dump by the same national avg. as the US over time.

Can we again remember our export dependent economy we with our Yanky friends by what 70% GDP!!!

In a deflationary cycle we are heading for trouble as demand for almost everything is drying up (no revenue) and what revenue that is available is deflated and for those selling must take a loss.

Deflation – Unemployment – Asset Depreciation

This CYCLE occurs for the next 2 years at least.

30% in 905 not a stretch.

#70 Mike B formerly just Mike on 04.01.09 at 11:57 am

Just had a very interesting conversation with a realtor defending his commission. He feels that the commission today at 6% is much too low. My argument is that 15 years ago the commish was much lower and house prices were lower as well so now that prices are extravagantly higher why would commish be higher as well.?? His answer is costs and time spent on a client. PLEASE… listings are sent automatically and they have the secretary schedule appointments and then they open the door and show you the rooms and prepare the boiler plate offer sheet. HILARIOUS. Even if they net only 2% of the sale of a 750K house they make 15,000 and the LAWYER who reviews and does all the closing work makes about 2000…. what’s with that. Imagine if all they sell is 10 house a year at that price…150K
Defend all they want ….they are way overpaid for skill level and time spent. Arrogant schmucks too.
There should be a flat rate above 500K … truly a racket…

I sure hope Garth is correct that because the US house meltdown started 4 years ago and ours only 8 months ago that there will be some serious price reductions in Toronto.. IS GUAVA.CA guy here… maybe he can illuminate current stats??

#71 Needlesscasualties on 04.01.09 at 12:00 pm

Garth said: “…prices at this moment are irrelevent. ”

That’s a good one. A terrible argument though. Prices are the most relevant fact first and foremost. Then all the leading data can be pored over. But prices are everything. Ask any trader…

Current prices are irrelevent to future ones. If you could not figure that one out, you need help. — Garth

#72 Devil's Advocate on 04.01.09 at 12:08 pm

Re: Nothing but the cold, hard numbers: Housing Crash
by Devil’s Advocate on Today, 9:16 am

Static wrote: ”
IMO the median is going to $200,000. What variables are using to come up with a median of $350,000? IS this just a temporary figure and you think prices will fall more?”

Based on median year over year price increases since 1987 and projecting this years price in line with those figures but more weighted toward those increases which did occur prior to 2003 when things started to ramp up uncharacteristically I come to the conclusion that a median single family house price for Kelowna could reasonably be argued to find, all things being equal, a price point of $350,000.

Understand that is “all things being equal”. Today nothing much is equal to the past. Not since 2002 have things on the Kelowna front been equal. We trended away from normalcy during the burning of 250 homes in the Okanagan Mountain Park Fire of 2003 which simply coincided with the commencement of the National Housing Boom. That housing boom was fueled by abnormally lax credit practices which led to people taking up lives supported in large part by credit and the belief that the boom would never end. No where is such an irrational exuberance as prevalent as it is in Kelowna.

Baby-Boomer our salvation? Not going to happen as projected for a number of reasons including but not limited to the following 1.) Many Boomers wealth has been decimated by the drop in equities, 2.) Baby-Boomers homes, where ever they live now, have dropped in value so much they can’t afford to sell them to buy Kelowna’s overpriced real estate and enter the high cost of living here, 3.) Baby-Boomers are reluctant to leave their sphere of family and friends behind, 4.) Kelowna has not built for the future. Kelowna has done a dismal job of building for the present and is now left with an unwanted infrastructure of McMansions no body wants. Kelowna’s Baby-Boomers out number Echo-Boomers (their children) 2 to 1. Nationally that figure is 3 to 2. Who is going to fill our shoes locally to perpetuate our economy? Certainly not more Baby-Boomers who draw on the economy and social services more than they contribute.

This credit crisis is far, far worse than most realize, far worse than you are being told. Unfortunately few are shifting gears to cope with it. Many, far too many, are taking on yet more credit as they try to survive until things improve. The more credit we take on the less likely things are to improve any time soon. We are spending money we don’t have. We are spending money we don’t have at all levels from Main Street to Wall Street to Parliament Hill. We are still spending money like drunken sailors. Our balance sheets are going deeper and deeper into the red.

This can not continue. What we are doing to slow it is only exasperating the situation. The end result, if not an entire economic meltdown, will surely be 1.) High taxes, hugely high taxes, 2.) Increased interest rates and a continual tightening of credit along with demand notes such as Home Equity Lines of Credit (HELOCs) being called, 3.) Continued increasing unemployment 4.) Deflation, of which government has no control as they don’t know how to deal with deflation other than to turn it around into inflation which they have a long history of dealing with but badly. So we will have a lengthy period of deflation in capital assets to their bottom subsequently followed by a surge in inflation in consumer goods such as food, energy etc. Ponder that for a bit and you will soon come to an ugly conclusion.

Short answer to your question; SFD prices in Kelowna increased from a median $396,000 in January this year to $410,000 in March this year. Thus we are that much further from attaining the $350,000 I suggest would be rational all be it unpalatable for many. It is going to be hard to achieve even $350,000 this year without a very rapid “THUD” in the market. Not likely to happen. This is the fear I have had for the past three years as the market irrationally and exuberantly increased year over year. It should have slowed three years ago. That it did not concerned me then. That it still defies logic in these trouble times concerns me more.

I am not going to lie to you. I am not going to tell you that we will achieve a median price of $350,000 and all will be good. This economic crisis is not about the housing market. In fact this is not an “economic crisis” at all. This is a, to be expected detoxification of an economy gone awry, an economy which has become dependant upon a drug called credit. Detoxification is going to be a tough go. We are being counseled to accept our dependence today. If we do not come to understand our habit and willingly enter rehab we will be either forced to, or we will die just as any Crack Cocaine Addict might should expect although deny. I think, by all the moves toward socialism south of the boarder, we are being put in a straight jacket and carted off to rehab despite our protests. Maybe Socialism might be better than the consequences. Certainly I do not believe better than the alternatives we ignor as we continue to feed our habit though.

Oh that short answer; yes prices will continue to fall but not so much as many believe, not in the nearer future anyway. Beyond that who knows as with the increasing movement toward governmental control of every aspect of our lives maybe a new economy will emerge where nothing of this one applies. Unfortunately we don’t seem to be steering this bus so who knows to which rehab clinic we are headed. Maybe it’s a debtors prison. All I can tell you is our destination is not Disneyland, been there done that and now, one way or another, gotta pay that credit card bill awaiting us back home.

#73 The Coming Depression on 04.01.09 at 12:17 pm

Garth I am sure your much smarter than these guys regarding Hyperinflation..your gonna eat your words in the coming years and it will hurt:

#74 K on 04.01.09 at 12:42 pm

In Victoria all is well. Few price reductions on condos / houses and they are still selling like mad.Must be the wealthy boomers buying them up. Why would anybody want overpriced R.E. in a rainy moldy sunless climate on a fault line? I have to ask myself what will happen after the Olympic games. With tourism in the tank retail down nat.gas prices down and forestery all but gone it leaves very little for the young people to survive here in this very expensive place. Not to mention the rest of B.C…..I also have to ask myself what happens if A.C. does go under. We need a major airline to fly all those Olympic ticket holders to Vancouver. And what about all those small towns who depend on their commuter service to get them from the small towns to the major airports for connecting flights.More cars on the highway and boom business for the park and fly. West Jet is great but they only offer domestic service and seasonal service to the sun spots. No more overseas service for us. IMO we will see A.C. shortlisted for yet another huge bailout of taxpayer money.

#75 Opportunity on 04.01.09 at 12:53 pm

Cheap homes to buy. If you wait another month or so then you’ll have more selection and at even better prices. Opportunity is waiting.

#76 Trekie2 on 04.01.09 at 12:56 pm

#52 EW on 04.01.09 at 9:49 am

“Actually, residential prices in the UsofA should not bottom until mid-2012, the next major upswing should occur around 2020. Canada is about 12 – 24 months behind, so we’ll bottom perhaps 2013 or 2014 (unless the decline curves are steeper). Housing will be down and out (based on demographics) until after 2020. Once a bubble bursts it stays that way for quite some time – think Japan & think retiring “baby boomers” (demographics).

This is really only getting started, so patience is required.”

I always hear people stating that we are 12-24 months behind the US, but history shows, if I interpret it correctly that we fall far faster than the US does….so our bottom may in fact be when they bottom.


#77 dave99 on 04.01.09 at 1:00 pm


I enjoy your insights and opinions, but also read others. A few threads ago, you expressed your preference for variable mortgages in the present market.

I found the following fellow

who suggests that mortgage rates might go from 3% now to 11% in five years.

It seems that if one feels that rates will grade up to even 8% in 5 years, then one is better off simply taking a 10 year 5.25% fixed mortgage today (such as is offered from Scotia).

I’m trying to decide whether I should listen to the Howe Street guy or you? (or both?)

Go VRM unless you like paying more. Also check out the fulsome discussion we had on that topic here. — Garth

#78 Bill-Muskoka (NAM) on 04.01.09 at 1:01 pm

Reality check!

1. Incomes have been inflated and are now going to be DEFLATED.

2. Housing prices have been inflated and are now going to be DEFLATED!

3. Egos have been inflated and are now going to be DEFLATED!

4. Governments have been inflated and are now going to be DEFLATED!

5. Boils become inflated and must be DEFLATED or the infection spreads and kills the patient!

That is the only reality that is coming. Deal with it. Your greed got you into this mess people, now you need surgery to save you.

It will take a few more months for some to catch on, like the insurance industry which still thinks they can maintain their status quo of 2 years down/3 years up in rates.

Same goes for the auto sector which is going to have to lower their prices, lean their companies, and make their products affordable to the average citizen.

People are now realizing they must look at their TOTAL debt picture and raises are NOT going to happen.

Scale back, work to reduce your debt by selling off unneeded items and assets, and live happily…or NOT!

#79 hagbard on 04.01.09 at 1:24 pm

Just for clarification, when in my post (#49) I said I was looking to buy in the “Windsor area” I didn’t mean Windsor itself. We’re looking at Kingsville and Leamington. Those areas are supported largely by agriculture. And while there might be a lot of house rentals in Windsor, there are few (that I can find anyway) in Kingsville or Leamington. At some point our current lease runs out and we’re on the street unless we can come up with alternatives.

#80 Makeorbreak on 04.01.09 at 1:28 pm

After foreclosed houses, abandoned boats…

M. Brasseur: Le déclin ne semble pas avoir encore atteint la région de Montréal. Et déclin il y aura. Si j’étais votre ami, j’attendrais avant d’investir dans un condo. En temps de crise, trouver un locataire fiable peut s’avérer un cauchemar et les lois au Québec avantagent plus le locataire que le propriétaire.

#81 PTDBD on 04.01.09 at 1:53 pm

Usually the Canadian Parliament shadows the actions of the U.S.A. like an insecure little brother. We saw that in their stimulus reaction for corporations including the latest auto bailout.

However, whenever America does something to help their people, our Government declines to act. We are paying the bill for corporate bailouts and backstops, so give us at least the courtesy of a reacharound!

Prime Minister Harper:
– where is the Canadian automobile warranty guarantee?
– where is the Canadian sales tax write-off for buying a new car?
– where is the Canadian clunker trade-in allowance?
– where is the Canadian payment insurance in case of unemployment?
– where are Canadian stimulus tax rebates?

Mr. Prime Minister, where are you? Canadian reporters are reporting that they can’t talk to you.

#82 Jimster on 04.01.09 at 2:03 pm

Canadaian POS websites;

GTA condos starting @ $56K

#83 Vancouver_Renter on 04.01.09 at 2:08 pm

Looking out my window today, it is actually SNOWING in Vancouver. We’ve had two wet, cool summers in a row sandwiching particularly wet, dark, depressing winters.

Vancouver is truly one of the most beautiful places to be when we get one of those long, dry, warm spells in summer. It’s paradise. That’s why we put up with the moldy darkness the rest of the year.

But I heard Evelyn Browning Garris from the Browning Newsletter, a long-term weather predictor, that Vancouver was heading into a 30-year wet, rainy period!

I told me wife that if we get one or two more “non-summers” I want out of here. And yet people think THIS is the “Best Place on Earth”? I truly believe that the media and real-estate industry work together to pump that lie.

My wife talked to neighbors the other day. She told them we were planning to continue renting – waiting for a clear buyers’ market. The neighbors, who are in the real estate industry here, responded with, “Oh no no… We heard that prices are going to be going up!”

What’s happening in the rest of Canada is coming to Vancouver. There is no doubt in my mind. So many people here have no clue what is happening in the rest of the world. The Kool-aid everyone here has been drinking here will abruptly wear off after the Olympics and then, watch out. We have so far to fall.

#84 Republic_of_Western_Canada on 04.01.09 at 2:08 pm

Calgary commercial RE – the collapse continues:

“The south tower of the Bow skyscraper project has been deferred.

In an annual information form filed this week, the owner of the project H&R REIT said: “The REIT and EnCana have agreed to defer the development of the above-grade part of the south block. EnCana has agreed to reimburse the REIT for certain development costs incurred to date in respect to the south block. The REIT is currently bearing the risk for construction overruns and project delays as the REIT does not have a fixed price contract on this project.”

The REIT is developing the 58-storey Bow tower head office complex for EnCana at a budgeted cost of about $1.5 billion.

The south block project was for a smaller office tower housing retail and arts and cultural space.”

#85 timbo on 04.01.09 at 2:12 pm

garth can I take this

coming depression #72

has happened before and will happen again if need be. Go count your gold and wait for the knock at the door. Probably be AIG now insuring confiscation.

should get $50 canadian tire money in return.

#86 Eduardo on 04.01.09 at 2:25 pm


What is rent going to be like in this world of yours where you houses are so cheap?

Way lower. — Garth

#87 Eduardo on 04.01.09 at 2:31 pm

Stats for March 2009 in Calgary:

“New listings at 2023 were down 42% compared to last year. March 2009 was the first time where new listings declined from Feb to March. Historically, there is a 20% increase. ”

#88 North Vancouver Citizen Jr. on 04.01.09 at 2:42 pm

Roubini’s L – Shaped Recession

…It has started and the lower line started in Europe travels across the Atlantic, enters thru New York, continues thru the Great Lakes…but it moves more slowly once entering Manitoba, then Saskatchewan, Alberta and then finally, at the end of the Recession’s life…into BC….where BC, after becoming the new Financial/Trade/Leisure capital of North America, leads its gratefull Brothers and Sisters from the east into the Promised Land.

…You heard it here first…

#89 gold bug on 04.01.09 at 2:50 pm

@Mike the outed socialist, formerly Mike the closeted socialist: Realtors make what people agree in the listing contract to pay them. It’s a mutual exchange. If you’re not happy with that, don’t hire a realtor.

Besides that, your assumptions on what realtors make are way off. Even if 2% is what the lister has agreed to pay on a house that sells for $750,000 ($750,000 being much higher than average in most of the country, but whatever) that $15,000 commission is split with a buyer’s agent in the vast majority of cases.

Also, you’d find that more than half of realtors would undertake <10 transactions per year, so your gross income figure is too high by that metric, too.

And, thanks to you and all your fellow whiners in the consuming public who clamor for more and more regulation of the RE industry, costs keep going up. The only way to recoup these costs is to keep commissions (admittedly) high. Read some Milton Friedman after you’re done with Das Kapital.

Cap commissions? You and Fidel Elliot Trudeau are bedfellows. Google “marketing boards” and “wage and price controls.”

The problem with democracy is that economic nitwits such as yourself cancel out my vote.
You reveal yourself as a die-hard Marxist

#90 jess on 04.01.09 at 2:59 pm

RE: soothing the savage “spirits” and the ottawa fiddles

.. somehow their musical notes do not evoke a feeling of shared emotion or belief.
Perhaps they are overcome by the “Ponzimonium” flu.

#91 JeffinPickering on 04.01.09 at 3:08 pm

Haven’t seen a whole lot about waterfront properties in the news (with a cottage, or just a lot). We started to notice an explosion last year in listings for places over $400K. These owners appear to remain demented into thinking they can get such prices when people are struggling to keep up payments on their homes (we’re not, fortunately), and prices don’t seem to have come down much.
In the next five-ten years we’re thinking of either buying a wee piece of land and developing at our leisure, or buying a place that’s way under the 400K range (it’s supposed to be a cottage, not a second house on a lake).

My question is: when will there be an appreciable decline in waterfront/cottage property prices?
I am actually surprised it hasn’t hit yet, since many of these sellers couldn’t afford them to begin with.

#92 David Bakody on 04.01.09 at 3:10 pm

59 60ish on 04.01.09 at 10:44 am

Goodgreef Sir/Madame ….. look whats going on now? could stop right there but brevity is not one of my strong points. Prior to the GST we had the hidden manufacturing sales tax … you know all about that. Look where we are to-day having saved one penny a day on a cup of coffee! nuff said. Afghanistan (one hour debate and fulls speed ahead) now with over 108 brave soldiers killed and countless wounded and close to 150 suicides and counting to please Bush. For What? due tell Sir/ madame. I did not say I approved of any of Brian Mulroney’s policies, some where good, most were in fact but the bad ones stood out. Running a country the size of Canada 5 1/2 times zones wide with two distinct cultures with fishermen on one end and cowboys on the other is and always will be a challenge. Perhaps history will be good to Harper but I doubt it.

Now for to-days History lesson:

Years ago a good man (Dalton Camp (PC) was tasked to come up the best names and faces to put on our paper money. He asked Canadian French and English which PM’s did they prefer …… Two things happened …. first he could not get enough names and second ( hope you are sitting down) Brian Mulroney was picked as the #1 Choice! The plan was scrapped post haste! CBC show Best Great Canadian was won in a final show by Tommy Douglass over Jean Chretien ….. and I suspect Jean Chretien would win to-day with his stance on Iraq and fighting our banks to go international all of which Harper & Co are trying to take credit for …. smooth Jean lets them rant on waiting for his ice time … and he can skate this we know.

Read National Dreams by Daniel Francis Sir/Madame there is plenty of blame to go around …. better still read; We were not the Savages by Daniel N. Paul and you will see what real insurgents are. Our Children are. Note: I am not to sure if Harper had a majority he would have all the latter books burned, as it appears Reformers had all info on F.I.R.E destroyed.

#93 Got A Watch on 04.01.09 at 3:15 pm

#72 – The economists quoted in that article are, to put it charitably, clueless, judging by their statements quoted there. They are probably among the crowd of economists who had no idea this crisis was brewing.

I’d say Garth is easily smarter than they are.

There are reasons to hold some gold, but looming hyper-inflation is not one of them. All the amounts of money pumped by all global Governments so far have not begun to equal the amount of wealth (debt) destruction that is still ongoing. It seems mathematically certain this will remain true – losses are bigger than GDP’s, thus monetizing them cannot succeed. No matter how many hopeful statements are made by idiots.

When deflation starts to end, the signs will be readily apparent. But I predict no hyper-inflation, that would require wages to rise almost as fast as prices, from my readings about hyper-inflations in the past. Wages have to rise too. Odds of that, about zero, from where I am sitting. There may well be a bubble in commodities again, but that will not be a general hyper-inflation.

In deflation ca$h is King. Just hold on to it, there will be a time to buy stocks again, and real estate again. Just not anytime soon.

If they do manage to print enough money to cause inflation, it will be because the value of currencies plummet as they are diluted. We could have inflation in prices of foreign goods, if demand is there for them at that point. We had a wage-price inflationary spiral in the ’70s, but inflation did not top 20% at peak IIRC, and that peak did not last very long.

OTOH, we don’t have a strong hand like Volcker around today to raise the rates high enough to choke off inflation.

Either way, that time seems far off yet. Much more to worry about in the near term than maybe having strong inflation in a few years, an age in this crisis. It won’t be this year or next for sure. Better to worry about surviving the deflation now. Positioning too early for inflation could be very costly, gold may not fall that much, but other things like oil and traditional “inflation hedges” could, until actual demand revives.

Get worked up about hyper-inflation now is like getting worried about being hit by a meteorite next year.

The list of economists I trust to know what they are talking about could be counted on my fingers, without using both hands probably. The rest are dumb as posts.

#94 Jimmy on 04.01.09 at 3:23 pm

To #69

Yes, realtor commissions are way too high and no you do not get the level of service that commensurates with the fee. That is why there are more 1% and ComFree listings.

I see a time when realtors will work by the hour to be paid by whoever uses their services, the buyer or seller. That will get rid of the poor realtors and will weed out the iffy buyers and sellers.

There will be a lot of changes coming to this industry with recession.

#95 miketheengineer on 04.01.09 at 3:55 pm

I just read this on CNN.

“And if either company goes out of business, it could create a shortage of new cars; which would mean it could cost a lot more to buy one.”

If you want a new Chyrsler or GM, or any other car. Get it now. You may never get a chance to own new one sooo cheap again, with the cheap interest rates.

#96 john on 04.01.09 at 3:56 pm

Okay …Carney says things will get alot worse than expected and the market moves strongly upwards???

I think the market is a joke. We forget how investors pushed oil from $35 a barrel to $140 only to return to $40. WTF is the market telling us.

#97 Future Expatriate on 04.01.09 at 4:08 pm

No stigma whatsoever to be a vulture. Remember, in the last great North American extinction 12,000 or so years ago, the wooly mammoth, the sabre-toothed tiger, the north american lion, the great sloth, all and many more lumbering great beasts disappeared from the planet forever leaving only their bones behind.

What survived? Vultures and bears.

And their food, deer and squirrel.

When choosing an animal model, choose wisely. This economic crash is going to be quite a great extinction event.

#98 Vancouver_Renter on 04.01.09 at 4:15 pm

#92 stated, “All the amounts of money pumped by all global Governments so far have not begun to equal the amount of wealth (debt) destruction that is still ongoing.”

All you hyper-inflationists need to read and re-read the above sentence. Every time the governments and central banks throw $1 trillion at the problem, the multidecade mother-of-all debt bubbles contracts by multiples of trillions of dollars, offsetting the governments’ efforts.

“In deflation ca$h is King. Just hold on to it, there will be a time to buy stocks again, and real estate again. ”

The basket of gold mining stocks I track has, as of today, DOUBLED in value from their lows in November. What other investment has done that in the last 4 months?? This is just the beginning of a multi-year gold stock bull market. The “sheeple” will clue into this and will get on board of the mania in a 2 or 3 years – once all the easy money has been made.

#99 Grumpydawgs on 04.01.09 at 4:27 pm

#46 Devils Advocate, I am a bit surprised that after ” a long and rewarding career in real estate” in BC that you don’t know that you are not legally entitled to use the term ‘Realtor’ in your advertising , on your business cards or in your communications unless your are qualified and licensed under Sec. 9.15 of the Real Estate Act.

You spent a lot of effort including the registered mark in your commentary but don’t know that? There aren’t 700 “Realtors” in Kelowna, there are 700 ‘sub-agents, to be referred to as sales representatives’ as described in the RE ACT of BC. Under SEC 9.15 a realtor is an agent- licensee, a differant category of license from the real estate sales licence.

#100 Eduardo on 04.01.09 at 4:39 pm

In response to “Way lower” I think I’m going to save up and become a way awesome slum lord.

#101 Increasing that 1% on 04.01.09 at 4:49 pm

#78. Makeorbreak…1:29pm

Love the transition from English to French.

For those of us who grew up ‘having’ to take French in school, we should all be able to do this. There is so much waste in the school systems (for sure here in Ont) that we have not come out at least being able to speak French after taking it from Grade 4 to Grade 9, ..being a good student, passing the courses…

Was this some planned thing, to not provide us with proper language instruction, so we are still illiterate in French?
I’m sure we could save a lot of money revamping this French program in schools…kids are still learning nothing after years of taking French in school. There’s been no improvement.

With few exceptions, only those who were in French Immersion schooling can actually converse in French. It’s embarrassing when going to Quebec, and maddening about the failure in our schools that this went on and is still going on. I’m apologetic to the Quebecois who so easily (and graciously) transition from French to English when I just say a word (whatever French I can speak is that bad)
Myself and my daughter still plan to actually learn French, but feel so ripped off. The system here is a joke.

#102 jim tuba on 04.01.09 at 4:49 pm

“Black Swan” by Nassim Nicholas Taleb

“…people are often ashamed of losses, so they engage in strategies that produce very little volatility but contain the risk of a large loss—like collecting nickels in front of steamrollers.”

#103 john m on 04.01.09 at 5:51 pm

I think we must be going thru a period called “fools rush in”,the stock market took a big rise today……why?…my opinion is because it’s probably better odds than our country’s casinos (and thats grim).Personally i see nothing positive for the following reasons..#1 our prime minister appears to be so out of touch he’s living in a dream world,give him a microphone in front of a partisan crowd and he makes a damn fool out of himself every time (to say nothing about any measure of truth in his statements)…oh well.#2 then there is the auto industry,thousands of people who have been living high off the hog…no skills…headed for bad times. #3 our “rock solid banks” (75 billion + of our tax dollars to bail them out) …wait till the forclosures start hitting their books as they have in the US…..whew! #4 Curiously our government is making no mention of their many billions in commitments over and above the bailouts when things really hit the toilet……….sit back and watch the ride its all we can do no one is immune and no job has security.Sadly things could have and should have been different…..Garth made a stand about 40 year mortgages,he stood alone…… many billions has it and will it cost the people of Canada for Harpers arrogance on that day and the lack of backbone on our elected mp’s………something to think about.

#104 Dave on 04.01.09 at 5:58 pm

The US market meltdown started 4 years ago. Ours started 8 months ago. There is far more to come so prices at this moment are irrelevent. — Garth


wow, this isn’t what I was thinking , and I’m as bearish as they come when it relates to real estate in Canada. It started in 2005 down south? I thought closer to 2006 and even the middle of 2006. Also, it started just 8 months ago here? i thought it was closer to January 2008 which was 15 months ago.

#105 dd on 04.01.09 at 6:32 pm

#103 Dave

You are splitting hairs. It is down and still going down.

#106 dd on 04.01.09 at 6:37 pm

#87 North Vancouver Citizen

blah blah blah …into BC… where is all ends in the toilet.

…You blah blah heard it blah blah here blah first…

#107 dd on 04.01.09 at 6:41 pm

#70 Needlesscasualties

Prices are the most relevant fact first and foremost. Then all the leading data can be pored over. But prices are everything. Ask any trader…”

No it is not. What you expect to pay in the future is more relevant. Why don’t I buy a house today? I don’t because I think that the house will be cheaper tomorrow.

#108 timbo on 04.01.09 at 6:43 pm

can this be actually true?

have stock in GM. no problemo. got AIG insurance to pay out 100% if GM defaults. What a fair system.

Garth, I’ll go buy a house with 10% down, you get the insurance and then I’ll force the property into bankruptcy. You collect on the insurance and we will split the 90% profit.

this cannot be true otherwise wow is the system broke.

#109 Dan in Victoria on 04.01.09 at 6:47 pm

So I just got the little local paper this afternoon,apparently Colwood councils idea of a 17.8%property tax hike this year and another similar one next year didn’t sit to well with with local residents.Westshore RCMP were called to the meeting by the mayor.Gee 35% over two years.There are some extenuating circumstances to be fair to council.Wait till the property values start to drop,we’re just at the start out here.Yep it’s diffrent here.

#110 Rich in Calgary on 04.01.09 at 6:49 pm

I also miss a lot of the links to charts that used to be here.
What ever happened to Squidly?

#111 Grumpydawgs on 04.01.09 at 7:01 pm

The ‘idiot taxpayer’ in Canada just doesn’t get that you can get loud and protest the actions of your government. In Ontario the rich bureaucrats have seen a 54% increase in the number of civil servants making more than $100,000 per year. The sleazeballs use the excuse that they should be paid the same as in the private sector. Except none of these bozo’s could get a job in the private sector.

There are States where the public sector is taking wage and perk rollbacks seriously. We need to see public sector fat cut deep and start seeing the benefit of efficiencies go back to the taxpayers. During the boom these dilletantes were all voting themselves raises because property tax assesments were bringing in a windfall in excess revenue. well now it’s time to take a similar stand that tax revenues are shinking. Public service rolls should be decreasing at the same rate as are revenues.

#112 . . . fried eggs and spam . . . on 04.01.09 at 7:11 pm

#113 Dave on 04.01.09 at 12:07 am — “Correct me if I’m wrong anyone.”

I don’t disagree with you, but whether the yuan remains, or is pegged to the dollar — — doesn’t really matter anymore. The article is from July, 2005 and things have probably changed since.

Part of Garth’s latest post mentions — “. . . the speed of it . . .” — and is the crux of the matter, the lightning pace at which almost everything is taking place nowadays.

As people lose their jobs / houses across the globe, obviously that means far less consumer spending, paying bills / debts off first thus leading to less free-spending than used to be the ‘norm’.

People buying ‘off-the-cuff’ items flippantly, discovering their new-found gadgets were useless after a few years so went and replaced it — those days are gone.

Toyota leased a cargo ship to hold (either) 2,500 or 25,000 brand new vehicles, as barely anything new is selling. The Guardian is finishing with the printing presses after 188 years, and will be available only on a messaging service (Twitter). The Seattle P-I printed its’ edition a few weeks ago, now it’s only on the ‘net. Printing jobs — used to be a great, well-paid trade, but no more. Where do those people go now?

Russia has said it wants to revert to the gold standard; China, along with a few other silent countries — talks of a ‘new’ currency to replace the greenback; recently, Japan advised China to sell / dump their US debt holdings, and both of these countries are doing that quietly / quickly now.

Using electronic methods to ‘create’ new funding sources also means said funding can be eliminated, and no one is the wiser for it. People are too busy looking after their own to be concerned with anything else.

During the recent ‘good’ times, where hardly anyone bothered to save for a rainy day or pay off debts, the roller-coaster was moving along smoothly, with nary a squeek.

Times are different now. The coaster has crested at the top of the hill, and it is going down, ever faster. At best, we are no more than a third of the way in, and it will hit everyone right across the planet.

#113 Foreign Investor on 04.01.09 at 7:14 pm

Trekie 2 # 75

As heard here….that 2 year time lag to the American housing market is being compressed….we are catching up….

#114 Chris L. on 04.01.09 at 7:23 pm

They love you over at ‘Canadian Mortgage News’ Garth.

After the economy recovers, “rates can only move in one direction—up,” says author and former MP, Garth Turner.

Like him or lump him, Turner thinks many homeowners will have a rude awakening in five years when they come up for renewal and rates are “way up” (his prediction).

Turner’s 2014 interest rate assumption of 11% seems intuitively off base, but he poses a credible question nonetheless. If someone has a 4% interest rate today, and is squeaking by, how would they do at, say, 7%?

#115 MenWithHats on 04.01.09 at 7:24 pm

Anarchy Now !

#116 MenWithHats on 04.01.09 at 7:35 pm

Obama : A toweing statue of style over substance .
“No we can’t”

#117 john on 04.01.09 at 8:33 pm

From October 31/08 – TSX 10,000
Today – TSX 9000

Hardly catastrophic.

Leading indicator??

#118 Da HK Kid on 04.01.09 at 8:40 pm

#77 Musky Bill….Well said!!!

#119 timbo on 04.01.09 at 8:44 pm

the other shoe has dropped.

from calculated risk

I might have to revise my thoughts on how fast this is imploding. Can the US print fast enough? I hear some papers have idle presses that need work.

I might just take a weekend trip back to the farm in Sask to prepare for the worst. Wonder if a hummer isn’t a bad investment after-all. helps with the trap lines and gopher huntin’

hope this does not get ugly…

#120 dd on 04.01.09 at 8:44 pm

#109 Rich in Calgary

“What ever happened to Squidly?”

Yes … always interesting feedback from him.

#121 hmm.. on 04.01.09 at 8:55 pm

About Windsor, if most of the retired people that took residence in Kelowna or osoyoos would dump their holdings and buy Windsor’s for 25% of the receipts and put the rest in the bank ,they could live off the interest forever. And, what is best, Windsor average temps. are just as moderate as osoyoos’s and you get 1 hour of daylight more in Windsor every day of the year . Plus lake Erie beats the cesspool called lake Okanagan any day.
Been to BC,like it, would i want to live there? hmm..
too expensive, and certainly not on the coast.

#122 . . . fried eggs and spam . . . on 04.01.09 at 9:09 pm

Two quotes from JFK are becoming ever more relevant. First:

“Those who make peaceful revolution impossible will make violent revolution inevitable.”

“Communism has never come to power in a country that was not disrupted by war or corruption, or both.”

Daily Mirror link from G20 meeting — — but again, the sheeple there are reacting to something they can do nothing about. Wait ’til just about all of them are one the dole or welfare.

Only then will the masses begin to rise, just as was the case leading to the French Revolution.

Comrade Okie has spoken of a revolution. It appears to be taking shape, and it is NOT peaceful. All govts., it appears, are corrupted and at war with each other. Just another day at the office, dear.

#123 Cendrine on 04.01.09 at 9:16 pm

@ Harry

For us, buying in Windsor (or near it) is the right move. We will be closer to family, my DH has a part time job lined up, my business will start and be successful (lots of demand) and we plan to have a good house to live in with a little property to garden. I anticipate taxes will likely rise (and we can budget for that) and some services may be scaled back. Many businesses will close down. It does have advantages for retirees – college, university, recreation of all types, 4 hospitals (including cancer centre). The winter is not nearly as hard as some other areas of the province. There is a wonderful agricultural bounty. Having lived through at least one other recession there, I have hope Windsor will find its way through as it has before. I am buying a house to live in, to be among my own people in tough times. Now, if only the right kind of house will present itself…..

#124 TrueGritCalgary on 04.01.09 at 9:39 pm

#86 Eduardo, have you finally seen the light? Your lack of denial or positive spin is refreshing. One less delusional person in Calgary is a good start.

#125 North Vancouver Citizen Jr. on 04.01.09 at 9:49 pm

Greetings to all my Vancouver renter friends.
…who hate to admit that the Vancouver/Hongcouver Real Estate Market…”it’s really different out here”.

#126 Argentum Aurum on 04.01.09 at 10:01 pm

Not sure about way lower rents as a function of supply/demand, but we could see rent control.

Minmimum wage increase in Ontario coming up – 6% or so. We need a more educated population, and there will be not much need for government-regulated wages.

#127 Mike B on 04.01.09 at 10:14 pm

gold bug 88 Moron disguised as an intellectual. I have sales man phobia not socialist bent. Most houses/condos in T.O. are at the ridiculous 6% commish so the realtor’s take is about 2%. An agent I know did 8 closings in March alone so 10 a year is not a big leap.
The fact that you believe in gold just explains your pseudo intellectual comments. Good luck with your gold already at its peak… nowhere to go but down.

Commissions should be capped… What more does an agent do for a million$ home vs a $250k condo zip nadda the lawyers do all the real work.
There are plenty of low commish and seller sells agencies… wave of the future

#128 Eduardo on 04.01.09 at 10:49 pm

Re 126, I thought it was bullish for RE because the sales are up and listings are down. Maybe they are down because people just don’t want to or can’t sell right now.

All I ever do is post facts, albeit the other side of the story. It’s not to say I’m bullish or bearish on RE, I think in Alberta we are approaching a balanced condition due to the decreased listing and improving sales.

#129 jwk (nee jwkimba) on 04.01.09 at 11:26 pm

#90, alas in southern ontario anyway the cottage dream has died. There really aren’t anymore cottages. if you want 4000sf, 5 fireplaces, 15′ ceilings mansion on the water, no problem. if you want a simple A frame with an acre or two that needs some work…sorry they are gone. This RE crash didn’t come fast enough to save the traditional cottage. They all got nuked. The only land left is on boat access only islands…

Shame, I have some great memories of being at my grandparents cottage in my youth. it’s now a timeshare/subdivision type thing.

#130 Linda Pearson on 04.01.09 at 11:47 pm

I got this in my E-mail yesterday. Obviously it’s American figures, but good anyway.

Not complex enough for our government!!! Too simple and might work.

How To Fix The Economy

This was an article from the St. Petersburg Times Newspaper on Sunday.
The Business Section asked readers for ideas on “How Would You Fix the Economy?”
I thought this was the BEST idea…..I think this guy nailed it!

Patriotic retirement:

There’s about 40 million people over 50 in the work force.
Pay them $1 million apiece severance with stipulations.

1) They leave their jobs. Forty million job openings – Unemployment fixed.
2) They buy NEW American cars. Forty million cars ordered – Auto Industry fixed.
3) They either buy a house or pay off their mortgage – Housing Crisis fixed.

#131 Blacksheep on 04.01.09 at 11:52 pm

PTDBD #80,


” Prime Minister Harper:
– where is the Canadian automobile warranty guarantee?
– where is the Canadian sales tax write-off for buying a new car?
– where is the Canadian clunker trade-in allowance?
– where is the Canadian payment insurance in case of unemployment?”
You have got to be bleeping kidding me!

I don’t wan’t a single cent of my hard earned tax dollars supporting some bloated wage/pension heavey industry that has built subpar vehicles for years.

Supporting businesses that have already failed will just prolong this correction, Let them die, and if viable, be reborn.

Our government needs to help its people through temporary financial support,not increase the deficit
on stimulus spending that the guy on the street will never see.

Employment insurance should be given to ANY Canadian citizen that applies, for years if needed.

Many sheep in Canada are STILL laying on the beach, watching with amazement, as the ocean pulls back from the shore.

This will get ugly.

take care

#132 Future Expatriate on 04.02.09 at 12:20 am

#97, here’s what you’re NOT getting:

All the paper “wealth” that was destroyed NEVER EXISTED IN THE FIRST PLACE. Not in the real world. Only on balance sheets. As ephemeral and as phony as Obama’s resume and birth certificate.

All lies. BS. Baloney. As real as a diploma-mill degree and only as valuable as the belief of the mark being suckered.

However, the money being printed by the Central Banks now to replace that BS artificial “wealth”?

Every dollar printed devalues real cash out in the real world. Even if the banks make velvet ass cushions out of it and never let it go.

While we may never see true hyper-inflation, I predict hyper-stagflation. Where necessities like food, power, and sundries hyper-inflate to price-gouging massive shortage levels, and things like housing, rents, electronics, cars, and the few remaining salaries, hyper-deflate because no one can afford them to want them. Filling your kids’ belly for another hour always comes before a roof and wheels and a plasma screen.

No better way than hyper-stagflation either to finish the job of enriching the uber-riche by eating the middle class alive, starting with their investments and ending with their toenails.

#133 Future Expatriate on 04.02.09 at 12:22 am

Sorry #97, that was directed at #92. I misread the quote attribution.

We’re on the same page. Congratulations on the gold paper, although I do recommend taking physical possession asap.

#134 pacific on 04.02.09 at 3:37 am

I would love to see a debate with Squidly77 Vs North Vancouver Citizen Jr.

Squidly77: ” were all going down…its gonna be ugly”
Vancouver Citizen Jr.: ”it’s really different out here”

idiot bear vs idiot bull

#135 Harry on 04.02.09 at 9:22 am


If you’re buying a home in Windsor because you want to be closer to friends and family and you enjoy the milder weather I can respect that. Unlike a few responses here, there are some very attractive reasons to live in and around Windsor and some really nice areas to live in Windsor and surrounding areas.

It also sounds like you wish to purchase a house as a home and not some vehicle that you hope to make quick money on which is good as well.

However, I would seriously wait until the fate of Chrysler becomes clear. If Chrysler pulls out of Canada, Windsor’s unemployment will shoot up from the 10.6% it is currently at to close to if not over 20% once all the trickle down effects are taken into account from the loss of so many thousands of high paying jobs.

I know you say that you want to buy a house for the purpose of it becoming your home but why buy now knowing that there is such a dire situation in Windsor where, if Chrysler pulls out, unemployment could reach depression levels and housing prices could plummet even more?

A home is still an investment and you are responsible to save guard your family’s investments.

Why invest in a home in Windsor, at this time, knowing that right now there is a high possibility that this investment could lose 10, 20, 30% of it’s value in the near future.

If you think I’m exaggerating the situation, then you need to do some research. Go to the following link, it is the Windsor-Essex County Real Estate Board (Essex County INCLUDES Leamington and Kingsville plus Amherstburg and other small towns in the area) web site.

In the February stats PDF you will see that February sales were DOWN 32.37% year over year and the average price was DOWN 15.71% year over year!

Plus available listings at the time of the February report were 3,539 (that is the supply of housing that was available at that time). The number of sales in all of February were 234, that’s it. So dividing 3,539 Feb listings by 234 Feb sales and you have over 15 months supply of homes on the market! From what I understand anything over a six months supply is considered a buyers market.

But, even as bad as things are in the Feb report, if Chrysler pulls out and 8 to 9 thousand high paying jobs are lost (over 4,000 CAW jobs at the mini van plant and it’s estimated over 4,000 supplier jobs, not even including all the trickle down jobs), things could go from bad to horrendous!!!

I have faith (or is that hope?) that in the end Chrysler won’t pull out of Canada, but I won’t put money on it and certainly wouldn’t take out a mortgage on anything in Windsor OR Essex county until this economy/automotive situation bottoms out and we’re not near that point yet.

#136 dave99 on 04.02.09 at 3:29 pm

#129 Linda,

Wow. Awesome idea! And it will only cost $40 trillion!!

#137 flyingangel on 04.04.09 at 5:05 pm

If we have not reached bottom yet, real estate, stock market, etc. is cash the answer?