BC

reality1

Outside, gardeners sat cross-legged on newish mounds of bark chips, carefully pruning babied young shrubs in the early May sun. Inside the bar at the Grand I listened to an old friend tell me how much her house is worth.

“Three point two,” she said. “Maybe in this market, I dunnno, two point nine?”

So, who’s going to buy, I asked, sucking back my fourth scotch and wishing I was in my chaps. “Hmmm, probably someone looking for a summer home, since it’s on the lake. Could be a hockey player, you know. Lots of those want to be here. And the dentists and the doctors in town are still making money,” she said. “I’m just waiting to list until the properties over two mill start moving again.”

Ah, welcome to Kelowna. North of Peachland, nestled between Denial and Delusion, on an enchanted lake inhabited by a friendly beast, Ogopogo, in the Okanagan Valley of BC – Bubble Canada.

I dropped into this valley for the weekend, on a trip from central Canadian reality, to do a couple of gigs. On the surface, the place is thriving. Lots of traffic, busy restaurants and bars, with tourist season just starting to rev. But there are strains. The nice people at Chapters, selling my books, whispered that the mall they anchor is on life support. The parking guy at the hotel where I went to speak said business is off by a third.

A local realtor slipped me the latest internal numbers, showing sales in April down 35% from last year while prices are receding by more than 1% a month, and it now takes 62% longer to sell a house than it did last year. Then a developer with a giant project on the books pulled me aside, wearing a worried, worn face.

But if anxiety is dawning on some citizens of Bubble City, where the greatest number of homes for sale (by far) are listed between 600K and a million, nobody has yet imparted it to the somnambulant masses. As in the Lower Mainland, as in Victoria and as in Vancouver – but way more so – this place is real estate obsessed. Worse, its rapidly aging population of retirees, supporting a one-dimensional service economy,  have dumped the bulk of their wealth in an asset class which, like most Boomers, has passed its ‘best before’ date.

Can’t tell you how many times I heard the same thing. ‘It’s different here.’ Like nobody else in Canada has scenery, a lake, wineries and RV dealerships as far as the eye can see. However, the delusion remains – as it does across great swaths of Vancouver Island – that people in Red Deer and Mississauga moisten when they think of the wet coast.

As I headed for the airport, with its unique collection of dead Convairs, a final email arrived: “Okay, I accept that real estate is usually only a good investment inside a “bubble” if timed correctly,” John wrote. “However, I also think we have seen recreational properties in the Okanagan valued somewhat contrary to the trend of the industry overall. In the Okanagan the prices of this market sector seem to holding their own. Is this only a local situation or are such properties still OK in Canada and generally supported by the demand of the baby boomers and general lack of good waterfront and ski areas. Would you agree that this type of investment could still have some merit?”

No. What John and his neighbours might want to do is study those US markets which are dripping with A-list recreational properties, which have been a Mecca for decades. Like the tony hoods near Miami, or almost all of southern California, Phoenix, Vegas, or outside SF. In many of those, real estate values have not just sunk, they have vaporized – with declines of between 50% and 70%.

That’s because (simply) markets which were too inflated become over-deflated. It also has to do with the nature of recreational properties, which nobody actually needs and which are usually financed by taking an equity loan from a principal residence. But not these days. And this is why those folks in the bubble capital of Canada are in for a really interesting two years.

Check it out. I’ll be in the bar at Joey’s.

111 comments ↓

#1 Charles T. on 05.03.09 at 10:06 pm

Easy Money And The Loss Of Character

#2 dbg on 05.03.09 at 10:07 pm

I agree. Kelowna will repeat the same slide as they did in the mid 80’s. From boom to where did all those cowboys go with their money.

Now this is a classic example of boom bust cycle. Unsustainable service economy built on MCMansions -big box homes.

#3 eddy on 05.03.09 at 10:15 pm

in Toronto there are a lot of over list sales, it looks like a mini boom, 2 months ago i was saying ‘ looks like 2006 prices’ now I’m saying ‘looks like 2010 prices’ i was also expecting a deluge of listings, it’s not there (yet). so I’m thinking some folks may be re financing and staying put.
the bubble has been re inflated.

#4 Val Mel on 05.03.09 at 10:28 pm

Houses are depreciating at a very similar pace in Cranbrook. 1% plus per month. Some are selling if they are priced aggressively.

Very few golf course lots selling….only at big discounts…

#5 Lance on 05.03.09 at 10:35 pm

I’ve been watching a specific area in the Lower Mainland for over a year now waiting for a good time to buy a home (complete with a tract of land to grow food and hunt squirrels on). Prices slipped around 10-15% and I was waiting for further drops before I started to seriously look… but in the last 3 months the trend has completely reversed itself and many homes have sold and the prices have seen an uptick. I suspect this is due to super low mortgage rates bringing a lot of buyers out of the woodwork… and this certainly cannot be a good thing given the overarching trend that real estate is doomed to take over the next decade or two. Greater Fools indeed… the crash in Canadian real estate may end up being postponed during this phase of super low interest rates. And, as you’ve enlightened your readers about many times, Garth, when interest rates take off to the upside (and I believe the upside will be swift to occur when it does) a lot of people are going to be hopelessly trapped in mortgages they cannot afford. And then we will have a real estate bubble pop of devestating proporations.
Meanwhile, I guess I sit and wait another couple of years for that little piece of squirrel pasture.

#6 R.Moer on 05.03.09 at 10:37 pm

The American “economic bullwhip” has a delayed pulse of about 18 months before strapping the nacked hindside of Canada.

The proverbial cash startvation snap we are feeling just now is the deflationary energy that was pulsed a couple of years ago from the Wall Sreet Bankster’s greed rave.

Pretty much look at where Phoenix, LA, San Francisco and Portland are now and you will get where we are going. So far its only been a 15% to 20% price downdraft in Canada. By mid summer the Canadian real estate party will be in a full freefall, a hair ripping air pocket collapse, as the buyers don’t show up.

Prices will drop again 30% this fall and another 30% to 40% again by next summer just as it has in other bubblicious markets. Its called a crash for a reason.

But … its only viscerally experienced as a crash when you finally hit the pavement a-la- Chrysler & Company yesterday.

Until then it will continue to be sold by the un-realty sellers as a soft landing. For us Shudenfraudists, the good news is that first class hits the ground just a little sooner than coach.

#7 Davinci on 05.03.09 at 10:43 pm

I like this web sight it’s the delusional about paper money talking about he delusional about property prices. lol

Most of us here stand amazed and how those people believe their houses are worth so much (replace the word “houses” with “paper money”) and feel it’s different here or this time it’s different.

It’s amazing how people feel if you create more houses on the market then the value of the houses will go up.

It’s amazing how people feel that governments can do something to help the value of houses when virtually no government program has ever been successful.

Got Gold?

#8 Davinci on 05.03.09 at 10:46 pm

Messed up the first sentence….
I like this web sight it’s the delusional about paper money talking about the delusional about property prices.

#9 DG on 05.03.09 at 10:47 pm

I really don’t buy the “it’s different here” argument, but boy do you find yourself thinking it when you’ve lived in Vancouver and are now stuck in Toronto…

Is there a more depressing, ugly, soulless and ill-tempered major city than Toronto and its suburbs? If there is, I haven’t found it, during much travel across the US and Europe. Leave Toronto and what do you get? Mile upon mile upon mile of flat, featureless land, polluted with nasty housing and grotesque highways. People actually build mansions right next to these highways and call it living.

We’re here for a purpose – to save every penny we can and then escape back to somewhere we can breathe. I don’t for a second think that these musings mean that bubble prices will return, but I do know that we’ll be prepared to pay a premium for parts of Canada that aren’t here…

#10 Toronto Open Houses yesterday on 05.03.09 at 11:26 pm

Went looking for a house to buy in midtown Toronto (c3, c4 areas).

Unlike 2 weeks ago, when there were other people looking at open houses, yesterday the open houses were almost empty: We went to 5, and we were the only ones at 4 of them.

The weather was the same as 2 weeks ago; so was the time of day, but there was almost No traffic going through.

Very interesting.

#11 Da HK Kid on 05.03.09 at 11:37 pm

My citizen of the world plan is still looking good but with a small twist, whereas owning all four properties in four parts of the world, I guess I will just own the one where my children plan to go to school and rent the other four from the painfully hammered owners.

The one purchase, likely Australia OR Canada will have to wait until 2011-2012 min I guess.

WOW, how re-inflated is the bubble getting right now!!!

Are people insane, NOT, just taking advantage of stupidity and short time frame to make 20-30% on a bear market rally and dump off equities.

Artificial boom market followed by crash followed by artificial re inflation via stimulus (to avoid heavy deflation) followed by second leg down.

Then they will do it again and again and it will be Japan all over again.

The reflation of buyers right now is going to only extend the pain and put especially first time home buyers in serious trouble 3-5 years down the road.

#12 Devil's Advocate on 05.03.09 at 11:52 pm

But Kelowna is unique?!?

I am seeing more and more foreclosures in Kelowna. Now remember, it takes well more than six months before a bank might start even sending demand notices to a debtor in default. Often that debtor will have lived in their home for twelve months before it is sold and they have to move out after not having made a single mortgage payment all that time. There were a ton of new zero down 40 year amortization mortgages granted to new home buyers in 2007 and early 2008. Unemployment has skyrocketed, especially in the construction sector, since then. As long as they make their payments they are ok, but many are not, many are unemployed and many are now upside down on their home equity. This is just starting now. You can’t see it. Those who are affected are quietly trying to sell their home before the bank takes it from them. But with sales volumes down 50% there are few takers and none that are willing to pay the rescue premium needed by these sellers to pay off their debt.

I see things getting a lot worse in Kelowna in the coming months. We are in nothing more than a “real estate bull market rally” right now. It will fissile out before mid summer just when those foreclosures really start to hit the market. It’s been a long, long time since I have seen a foreclosure sell for anything less than list price but I expect we will start seeing that this year.

On the more than million dollar homes in Kelowna, Garth your friend might get lucky but the fact of the matter is million plus dollar homes just ARE NOT SELLING. In the first four months of 2007 there were 39 such sales, in the first four months of 2008 there were 33 such sales, in the first four months of this year 2009 there have only been 10 such sales.

Yes, in fact Kelowna is unique, but those unique qualities are not all good. Still Kelowna median real estate prices have always been higher than even that of Greater Toronto. Kelowna prices are second only to Victoria and Vancouver. Does it make sense? Well, for those who can afford to live here maybe. For retiring Baby-Boomers en-masse? Not so much. After all why would they move to a region where their living costs INCREASE in retirement. Don’t we all try live on a little less in retirement? As for the wave of Baby-Boomers set to retire here, most Canadians haven’t saved a cent toward retirement they can’t afford to.

Another unique thing about Kelowna is that we have a hugely skewed demographic toward the aged. Echo-Boomers (the children of Baby-Boomers) who we will be relying on to fuel our economy in the coming years number half that they do Nationally. Who is going to serve up those burgers and fries to those Baby-Boomers who do retire here? Who is going to buy the McMansions those Kelowna Baby-Boomers want to rid themselves of so they can move into smaller more carefree digs?

But Kelowna IS unique. Like they said during the 1980’s bust “Will the last one to leave Kelowna please turn out the lights” or how ‘bout this one “Wanna turn your bank account into a million bucks? Come to Kelowna with two million.”

#13 Popping Bubbles on 05.04.09 at 12:24 am

Consumer insolvencies to skyrocket: TD

http://business.theglobeandmail.com/servlet/story/RTGAM.20090501.wconsumers0501/BNStory/Business/home?cid=al_gam_mostview

I wonder how much of the increase insolvencies will occur in the Bubble City?

#14 Grantmi on 05.04.09 at 12:32 am

As I mentioned a week ago… I was in Kelowna for a couple of days on business! And you’re spot on Garth!

Ask the MAN ON THE STREET who’s affected by all this downturn. (The door man, the gal at Starbucks…. well maybe not starbucks.. coffee will be the last to go! ha ha)

I also reported about Corus Radio advertising on their own station CKNW out here in Lotusland… darn! It almost seems that’s the only ads they are running.

NOW! They’ve started with Public service announcements on BUYING A NEW CAR!!!

COME ON DOWN TO JIMMY P’s and get a brand new spanking car!! and…. Tell them what else they’ve won Don Pardo!! A NEW AIR FRESHNER with that car!!

“Move along… nothing to see here!!”

#15 robert on 05.04.09 at 12:40 am

Here on Vancouver Island, delusion has been stoked by low interest rates and our dead cat bounce is in mid leap. Specu-vestors are dropping roughly .5 million per on tarted up post-war box homes in working class neighborhoods. Some come with “revenue” suites (will the rent cover the costs in 5 years when the rates go way up?). Meanwhile, the province slips further into debt to cover Olympic overruns and the boomer medicare bulge (Note to other provincial governments, when your retirees move here it would be most considerate if you’d contribute a reasonable share of their upkeep here. Not quite cricket having Granny and Gramps sponge off the neighbours, what.)

#16 $fromA$ia on 05.04.09 at 12:55 am

Garth, bought myself a nice Amerikan 07′ 4X4 TOYOTA SR5 from Texas :P. Those Amerikaners have the good life, I feel so dirty buying up their assets!

#17 René Kabis on 05.04.09 at 1:15 am

Kelowna is going to get absolutely hammered.

The peak of the market was April of 2008, with an average home price of around $553k. In the nine months following that, home prices slid about 26% before recovering a bit in our “spring bounce”.

No-where else in North America (and I would contend, the world) have home prices slid by 26% (or more) in the nine months following a region’s market peak. This means that the price of an “average” home in Kelowna has been falling by $16,000 PER MONTH, or an astounding $525 PER DAY

Prices have already stabilized from their brief spring uptick (as of the end of April 09, that is), and are poised to resume their brutal downward slide. Any bets on how much they’ll drop in 2009? My estimate – and this is a conservative one – is that 2009 will see prices reach a 50% drop, peak-to-trough, from our April 2008 highs.

And this will only be the first inning. There will be nine more innings to go. All indications are that the world is sliding into a Greater Depression. All the same mistakes are being made that had pushed us into one in the 1930s. We will probably see hyperinflation (in $USD, at least) before the decade is out, and home values – after inflation – should bottom out at around 30% their former values by 2012 to 2015.

Sound crazy? A year ago, people were suggesting that I was crazy for even *suggesting* that home prices *might* decline, much less *will* decline. That home prices were on “a permanently high plateau”, that a “tsunami wave of retirees would save our housing market” (from what? Permanently unaffordable prices??) and that “it’s different here / this time” were the arguments most often shoved into my face. Well, the plateau had a cliff on the other side, retirees by the boatload are delaying retirement indefinitely and things certainly *weren’t* any different here!!

The proof is in the pudding:
http://www.west-kelowna.ca/

#18 René Kabis on 05.04.09 at 1:34 am

And I just wanted to point out another bombshell:

The unemployment rate in the Thompson Okanagan (of which Kelowna is a part) is sitting at 9.1%. This is up from 5.9% JUST A YEAR EARLIER!!

How are unemployed people supposed to BUY a home?

How are unemployed people supposed to PAY for a mortgage?

The Okanagan has seen one of the most rapid shifts toward unemployment of almost any region in North America. Ergo, distressed homes owned by unemployed (and eventually, bankrupt) people will start flooding the market this year. Home prices will therefore adjust accordingly… dramatically downward.

Hey, it’s not me… it’s just the LAW of SUPPLY AND DEMAND. When you have almost no demand, and massive supply, prices can only move in one direction – down. THAT’S the 300lb anvil that’s crashing through the window of Kelowna home price fantasies right about now.

#19 Mike B on 05.04.09 at 2:38 am

Unfortunately this kind of boom bust has not shown up in sales stats here in Toronto…. Now it seems a mixed market with some mid-high stuff selling but much more activity on the bottom … Even some multiple offers but rarely over asking… The culprit is low interest rates and morons being fixated on the rate rather than principal … Still busy but some signs of slight slowing… TSX is poised for a huge pullback and that might cool things off.
Truth is the BOC is hoping for inflation … at least they can deal with that… raise rates…Gas is almost 90 cents/litre so summer should show easily a $1-$1.20..

#20 Jay Currie on 05.04.09 at 2:47 am

Yup.

The BC economy in general is in the tank. Vancouver, Victoria and Kelowna have spent decades on the upside and are now looking at down. The question is how far down?

Each story is different and each wants to hope there are hockey players/Albertans/rich Chinese/boomers ready to play the greater fool. Have we reached peak fool?

As the RE sprint unfolds here in Victoria we are seeing houses sell but for 20% lss than thheir asking prices a year ago. And that is in the prime RE window. By June that’s done and the real bite begins.

The wealthy Chinese factor, which drove the Vancouver market, is receding. China has been hit but it also has a lot of inefficiently employed capital. Once that capital is intelligently used it will roar back. And the wealthy Chinese, not being idiots, will want to go where there is a real economy.

Kelowna has been bubble land for a while with the bench lands, even after the fire, being built hard. Lakefront is likely to hold to a set of small declines, lakeview, gyprock palaces? Pretty much done. another fire and their owners might get their money back from insurance – other than that they are done.

#21 Glenn on 05.04.09 at 4:10 am

Whew, at least those suckers in Kelowna didn’t do something seriously silly like buy gold or something.

Just think of the losses they would have suffered had they picked up $100,000 in bullion 10 years ago!

A real bloodbath. A tragedy! THE HORROR!

Yup.

*dons tin foil hat and toddles off to take meds*

#22 Glenn on 05.04.09 at 4:14 am

Sorry, the link that should have gone with my previous post.

http://66.38.218.33/charts/popup/au3650nyb.html

P.S. Those that DO have gold, sell it now! Cash is king! Buy a house! *nods heads slowly* Yup!

#23 Munch on 05.04.09 at 4:37 am

Great stuff, Garth, thanks!

In a somewhat feeble attempt to add some value, something you might enjoy!

“Every morning in Africa a gazelle wakes up.
It knows it must outrun the fastest lion or it will be killed
Every morning in Africa a lion wakes up.
It knows it must run faster than the slowest gazelle, or it will starve.

It doesn`t matter whether you are a lion or a gazelle – when the sun comes up in Africa, you`d better be running!!”

Regards

Munch

#24 Parsley on 05.04.09 at 6:01 am

Garth & co., if the market is tanking so badly then why were there traffic jams at open houses this past weekend, with realtors running out of MLS listing sheets and not accepting offers until such-and-such a date? (West GTA) Sure, they’re all greater fools. But enough greater fools make a market …

I have addressed that. Stand back. — Garth

#25 David Bakody on 05.04.09 at 6:18 am

Good morning overview once again. The big picture of course is south of the border ….. The Boston Globe very close to closure, demanding multi million dollar cuts from employee’s. US bans Canadian pork, and has stepped up Canadian copyright attacks. There is of course a sand storm moving North and it’s not headed for Alaska, it is main street and rural Canada ….. and that effects housing!

#26 Mike M on 05.04.09 at 6:56 am

Affordable and attractive rental housing seems hard to come by in the neighbourhood of South Vancouver we want, and we (along with many others) looked at a $575,000, 1000 sq. ft. half duplex yesterday in that same ‘hood (Marpole).

RE market looks pretty robust to me. What are we missing here? Who’s buying this stuff at these prices?

I’m 46 with a wife and child. Am I going to live in a basement suite again just as I did in grad school?

#27 hagbard on 05.04.09 at 7:07 am

#9 DG

Nothing beats Victoria for “ill-tempered”. Spent twenty years there, moved back to Ontario where people actually great each other in the street rather than snarl.

#28 ally ally oxycontin free on 05.04.09 at 8:06 am

Ruling due today on Chrysler’s payments

Suppliers, dealers desperate for cash

http://www.freep.com/article/20090504/BUSINESS01/905040339/Ruling+due+today+on+Chrysler+s+payments

Detroit Free Press ANCHOR in Washington: Justin Hyde

Pretty much covers ‘anything you might wish to know—Chrysler’

http://www.freep.com/article/20090501/BUSINESS01/90501002/0/NEWS02

#29 ally ally oxycontin free on 05.04.09 at 8:11 am

END OF WALL STREET [ ?? ]

http://online.wsj.com/video/end-of-wall-street-what-happens-next/1242ED39-063B-4B9E-9DD7-292B4C66D1A0.html

#30 Tom Rovin on 05.04.09 at 8:41 am

Toronto Open Houses yesterday

Went looking at 5 open house outside ottawa yesterday too.
Definitly less people showing up according to what i saw and every realtor i asked at the open hosue yesterday.
Weather was same too as last few weekends

#31 ally ally oxycontin free on 05.04.09 at 8:42 am

Hard-nosed reality #5—not everyone is stupid!

“There is a fast-growing, informed minority — skeptical investors and independent citizens — now rising in rebellion against federal bailouts.

That’s why our petition drive against senseless bailouts has been such a resounding success!

That’s why, two months ago, Thomas M. Hoenig, President of the Kansas City Federal Reserve, defied his own chairman … declaring that the “too-big-to-fail” doctrine has failed … recommending regulatory tough love for any failed bank, no matter how big.”

http://www.moneyandmarkets.com/the-next-mammoth-failures-2-33545

#32 dd on 05.04.09 at 8:54 am

#7 Davinci

Got Gold?

Why? Gold hasn’t done much on a flation adjusted basis either.

#33 Alex on 05.04.09 at 9:09 am

Inflation will always rear its ugly head, and in the end, the inflation will become ‘hyper,’ or extreme. When something seems to work, it is only natural for people to grab onto it. Self preservation is one human instinct that cannot be denied, and will not be denied. When hyper-inflation does come along, and with a $9 trillion deficit which will grow larger as each year passes, to say that hyper-inflation will not occur, is to deny even the most basic of fundamental economic principles. To think that with $9 trillion paper, un-backed, dollars being added to the economy, it will not produce huge inflation, or to believe what officials say when they say they can ‘control it,’ is absurd. Ask yourself: When has government ever not exaggerated or downright lied? All governments sugar-coat the truth and lie to their constituents to make themselves look good.

When a family has a $100,000 CD, it seems to be a sure salvation in time of need. A life preserver. But is it? At 3% compounded interest, in ten years, $100,000 will only get you $134,391. Look back ten years and see for yourself if what could be bought for $100,000 ten years ago, could possibly be bought for $134,391 today. Examples are not difficult to discover. In 1999, (ten years ago), gasoline 95.5 cents a gallon, oil $16 per barrel, bacon $1.24 per pound, eggs, $1.05 per dozen, Ground beef, $1.09 per pound, and milk 99 cents a gallon. Guess what gold was ten years ago? Under $300 per ounce. Silver? A bit over $4 per ounce ten years ago. In ten years, gold and silver would have TRIPLED your dollars. Do I really need to say more?

Do I really need to continue with this? Neither my son, my daughter, nor I can fix stupid, and that’s what people are, who say, “I don’t understand gold,” or, “I can’t spend gold or silver,” or, other inane remarks. Now I know how a teacher must feel when her moronic kids can’t understand the simplest of things.

#34 Bill-Muskoka (NAM) on 05.04.09 at 9:50 am

Garth,

Thank the Yuppies for the insanity. The ‘Got To Have It Now Generation’ that is becoming the ‘Why Me?/Poor Me!’ generation.

Funny how smart parents and grandparents become with age, eh?

#35 Bill-Muskoka (NAM) on 05.04.09 at 9:54 am

Affordable and attractive rental housing seems hard to come by in the neighbourhood of South Vancouver we want, and we (along with many others) looked at a $575,000, 1000 sq. ft. half duplex yesterday in that same ‘hood (Marpole).

#26 Mike M

ROFLMAO! $575,000 for 1000 square feet? wow, such a deal that is! We have OVER 1,000 SF for well under $100,000 and low property taxes as well.

Tell me, now that you have a family and are again living in a basement apartment, do you feel your life has improved in the RE market?

#36 Bill-Muskoka (NAM) on 05.04.09 at 10:09 am

BTW, how many condos, townhouses, etc. have windows on all sides for all that money? We have natural and healthy SUNLIGHT in every room. Great natrual ventilation too. We don’t have to ‘share’ the viruses and bacteria of our neighbors in the air we breath because we have our very own seperate supply called Mother Nature.

#37 Fred Carver on 05.04.09 at 10:26 am

Oh..How I rember the real estate down turns here in Victoria..the last being 95-2002. Having said that I do not remember the Western folks saying the East will Follow. At the Moment the only thing about folks in the East is they want to live here along with many others. Sure our market slipped over the last year…the world financial problems have an effect on the whole world..Canadian Banks are being picky on what then lend on. Mostly Single Family Homes. We live on an island, I lived here all my life, and sold real estate here for 35 years. I have seen several real estate corrections..New homes Sold for $18,000 when I first started in the Business in 1971. It’s Land Values that effect real estate values here..for example I can price the same home in one part of the City differently in other parts of the city..due to market demand and land values 1.e. put the same home in Victoria, Vancouver, Edmonton Winnipeg and you get different values…why, mainly demand for housing and the land value. Vancouver Island is going through a change too, but not as bad as the Eastern areas of Ontario which have huge unemployment problems due to the car industry etc. Our Forestry is going through the same for many years and now only represents and portion of the workforce. We call need to tighten our Belts, and not over spend. Victoria will for the foreseeable future benefit and real estate prices will hold due to outside demand to live here. Currently we are seeing Buyers Buying homes in all price ranges with New Home Buyers leading the Pack with todays low interest rates. But now price increases here, but sales are at 2008 levels with 700 sales last month. For a Change the West is doing better that Ontario and that will be like that for at least the next year..We live in one of the best places in the World, and certainly the best Weather in Canada with our Mild Winters.. Sorry No Bubble Burst here…and oh, many areas of the USA are seeing positive real estate sales growth to this Spring too

#38 ally ally oxycontin free on 05.04.09 at 10:27 am

#34 Bill-Muskoka (NAM) on 05.04.09 at 9:50 am

Bill … You just haven’t LIVED until you slip on the ceramic tile floor in the kitchen, near the sandwich island, and banged your head on the corner of the polished granite counter top.

#39 Marina on 05.04.09 at 10:27 am

Hello everyone !

As a concerned taxpayer I feel it is important to have you all understand what the new HST or “blended tax” means to Ontarians. It amazes me that this announcement has slipped by without a ripple, and yet when I tell people about the impact to them they are all shocked.

The intended purpose is to blend the GST and the PST into one tax. This will cut down the paperwork burden for Ontario businesses and, in theory, lessen staff by merging both departments. This could be a noble attempt to cut costs. There is just one problem. Rather than just blending the products and services that now charge both taxes, the provincial government has decided that it will apply this new tax to almost all goods and services that you do not pay PST on now!

You are about to become the victim of the largest tax hike in our history. How will this affect you? Let’s start with just a few things that are to be charged the extra 8% and see if it will affect you or your family.

Gasoline

Home heating fuel

Water

Hydro

Used cars

Government and city services

Any service you now use for your home or business such as repairs, professional services of any kind, construction materials etc. (including my fee!)

These are just a few.

See this article about how the 1,000.00 BRIBE they are offering will not even cover ½ of the increased cost to the average family. This tax hits Ontarians hard, but ESPECIALLY the low income ones! They will have an 8% increase in everyday life, and yet you will not see their benefits or salaries rise.

Actually almost everything currently without PST in your life except children’s clothing, prescriptions, diapers, and feminine hygiene products will now cost you 8% more. Oh and here is a kicker. The fuel tax will slide with the increasing cost of that fuel.

Our premier is counting on taxpayers to do what they always do when a new tax is added. Nothing! It is very important that you start to research and discuss this with your friends and family. It is not too late to stop this if you are willing to do something as send an email to the premier asking him either to a) stop the tax grab all together or b) do what was originally intended and blend the tax on the products that now have both taxes and not to extend the new tax to everything else. If you just sit there remember you lose the right to complain about taxes ever again. Get UP and start telling everyone about this injustice and we can stop this today. Don’t think your email will not count. Most MP’s get 10 emails, they consider it a catastrophe!

Send your objection to:

http://www.premier.gov.on.ca/feedback/feedback.asp

#40 Diabolo on 05.04.09 at 10:28 am

Classic comment by Homer Simpson yesterday..
“Their town has commas in their house prices” :))

#41 Devil's Advocate on 05.04.09 at 10:29 am

Comparing the economic climate of Kelowna against the rest of Canada is much like comparing the economic climate of Canada against that of the U.S.

Kelowna tends to be one of the last cities to experience downward pressure and one of the first to feel the exuberance of better economic times. Canada tends to follow these same trends against the U.S. economy.

That there is positive news coming from South of the boarder regarding their real estate markets will, invariably, cause some confidence to be infused in our own real estate markets. After all how much further can the U.S. real estate markets fall?

Given the massive stimulus packages put forth by governments both south and north of the 49th something positive is bound to happen. But will it be enough and what will be the long term costs?

No question unemployment is and will continue to be one of the sore points in our economy. Without jobs those excess inventories of everything from toasters to houses will remain on the shelves of the retailers and as so the manufactures will not need to hire workers to manufacture more in the face of such depleted demand – vicious cycle.

We are in a bull market rally in all markets right now, financials and real estate, that has no sound fundamental logic other than a mass of vultures, speculators and otherwise conspicuous consumers who are adverse to anything but growth at any cost. I fear this will end badly at some point as we continue our bad habits of living off credit be it Home Equity Lines of Credit or Federal Stimulus Packages which must at some point be repaid as governments can not operate in deficit in perpetuity.

If only we could, as a whole, learn to live within our means rather than borrowing against our children’s futures in order to fulfill our own selfish desires. Such shortsighted living is most apparent in this city of Kelownial thinking that rides on the coat tails of good times and tries to leap off when the going gets tough.

Saw it in the 1980’s and am watching it now 20 years later but believe this one is going to be a whole lot longer… hopefully not a whole lot worse…

#42 Joanne on 05.04.09 at 10:32 am

People … is your entire life’s energy worth paying for brick and mortar? There has got to be more to living , than just paying the mortgage. Get a life, not a ball and chain.

#43 rory on 05.04.09 at 10:44 am

#35 Bill-Muskoka (NAM)

Bill, you seem to be on a roll telling all that will listen how good you have it. Glad the retirement gig worked out.

Now as to telling Mike in Vancouver he should move to your part of the world ‘cuz anything else is just, well, plain stupid.

Got any real jobs where you are …’cuz cash flow is king when we are not as lucky as you and the retired mobile home crowd…give it a rest.

I have a feeling that you rural types are subsidized by the big city types. Just a guess but I think a pretty good one. Talking roads, hospitals etc.

#44 JM on 05.04.09 at 10:51 am

Toronto real estate has already crashed. Significant price reductions in the relatively near future are inevitable for two reasons.

1) Effective Prices have already fallen

Couples approved for 350k last year are now getting 500k for the same “monthly payment”. If all else were equal, then house prices would inflate to erase these “gains from rates”. Prices have not risen at all, and we cannot assume it’s becaues Torontonians have suddenly become prudent. Those that buy now are maxing out like always, but there is so much downward pressure on prices that enormous rate cuts are really only keeping prices bouyant. The effective pricing of houses has, therefore, already fallen. When rates inevitably rise, there will be a direct negative correlation with price. When we go back to 6%, then a 500k house will fall to 350k.

2) the fundamental price of property has fallen drastically.

Realtors and builders use the term “lot” when they’re referring to a shitty house that is either a “knock down” or requires a “gut and reno”. Lot prices reflect fundamental real estate values. In truely hot real estate markets, lots sell at a price discont from renovated properties which is approximately equal to the cost of renos. That is definately not the case now. While the prices of “finished” homes is roughly constant from last year, lots in Leaside, beaches, Kingsway, and North TOronto, Rosedale have fallen through the floor. (-20% TO -4o%). I f anyone in the industry actually thought the prices of finished would stay high, flippers would be back, and lots would increase in price. Not happening.

Relative prices of unfinished homes or land are an excellent predictor of where the prices of finished homes will end up. They indisputably show where people in the real estate and building industries actually think prices are headed. In California and other Parts of the US, lot prices fell hard 1-2 years before the broader real estate market really tanked.

#45 Bill-Muskoka (NAM) on 05.04.09 at 11:10 am

#33 Alex

Yes, in ten to twenty years the only investment we will be concerned with is breathing.

Now, when gold was down to $275 per T.O. and the mines were shut down, how long did it take to reach the current $1,000 per T.O.?

How much of your gold can you actually TOUCH?

You and the others promoting gold sound like you are in the business and need others to join in to make your plan work? I think that was started by a guy named Ponzi!

I know people who have made money related to gold investing selling the ‘Official Bre-X Salting Team’ hats at about $10-20 each. They are still quite popular. My own brother went for the Krugerand scheme. LOL He’s dead now and they did NOT appreciate at all. I think his son sold them on e-Bay just to get rid of them.

#46 Bill-Muskoka (NAM) on 05.04.09 at 11:13 am

#28 ally ally oxycontin free

FIAT is now trying to also buy GM Europe while the stockholders are desperate to unload their worthless paper.

Fiat move for GM would create $100B giant

#47 Sularezi on 05.04.09 at 11:16 am

To #26 Mike M. Time to move out of BC if you want a home for your family. Back east you can buy a newer house for half the price here (I rent in Vancouver too).
My mid term goal is to get a job back in my country, where I can buy a nice small house for the down payment I have now for a 40 years old in V. area.
And, I will never be the slave of the banks. Time for real resolutions, people…

#48 smwhite on 05.04.09 at 11:18 am

Mark Carney says inflation is the answer!

http://www.cbc.ca/sunday/2009/05/050309_1.html

Solomon “If you had one message for Canadians what would that be”?

Carney “There is a plan to restore confidence and growth and its going to work. Its going to work and we’re going to grow”.

Replace grow with inflate. I believe the markets are realizing this and are responding prematurely, unfortunately some are getting ahead of themselves and jumping in, gambling on positive earnings numbers, which aren’t going to happen until some of these companies can lower their P/E…

To note something very important in that speech, the target is to hold rates at 0.25% until next June, so that gives those salivating at the mouth to borrow about 400 days to contemplate their next move.

#49 nonplused on 05.04.09 at 11:26 am

http://www.bloomberg.com/apps/news?pid=20601039&sid=aiiT.sNeq2YQ&refer=home

Lots of realtors posting about how the market is back to boom times today. Baloney. Here are the facts:

– Sales volumes always rise in the spring. Year over year they still suck.
– The bottom end of the market is the only thing moving. The closer to a million you get the closer to zero the sales rate. Over a million and nothing is moving and the number of months inventory is currently infinite.
– There is a sellers strike on. Many houseas are sitting for sale at delusional lists and sellers would rather hold them than move them at market clearing prices. Also noticed a bunch of delistings around here, and stories of disillusioned sellers pulling houses of the market and looking for renters.

By October the tide will have gone back out.

#50 Davinci on 05.04.09 at 11:44 am

#32 dd

There is a simple answer to your question, however, the simple answer will always be dismissed as impossible. So the reality is, there is no simple answer.

Today I read a good article that provides a detailed answers to your question.

I have quoted some of the text as it is quite long:

“The only difference today is that the cabal working against the best interests of the US and all American families is no longer secret, but well documented and well known.

Since the above statement is sure to stir up cries of conspiracy regardless of the fact that it is directly attributable to a member of the financial oligarchy, let us take a minute to consider the Enronization of our critical thinking skills. Why do those with a keen interest in suppressing the truth about the origins and nature of our current global financial crisis have great success in doing so merely by simply using the word “conspiracy” to marginalize the well-constructed arguments of others? Why do the people that attempt to discredit these truthful revelations never offer more than flimsy verbal accusations devoid of any evidence to validate their accusations?

And why do we rarely, if ever, challenge the fact that the vast preponderance of people that flippantly dismiss valid arguments about our current global financial crisis are those whose personal wealth depend upon deluding masses of people about the health of our stock markets and the soundness of our financial institutions and monetary system? Today, the Enronization of our institutional education system has dulled our aptitude of critical thinking to such a degree that we now look to others to do our thinking for us. Instead of challenging the propaganda that makes zero sense, we are all too willing to be duped into believing erroneous concepts just because they are written in a textbook or a newspaper.”

JS Kim – Financial Elites and the Enronization of America

http://seekingalpha.com/article/134863-financial-elites-and-the-enronization-of-america-part-i

I know if you read the above article you will not fully understand it, trust me, I was there I know how you feel. Once you fully understand that paper money is nothing you will feel a sense of panic, realizing you and the rest of the world have been duped.

Impossible right?

It boggles the mind how we are here when we seem so advanced.

It took me a 1 year to get to this point of 100% conviction, I don’t expect anyone to come close to that from reading what I am writing in this blog. You would have to read a lot of books cross reference the data and spend a lot of time asking questions to come close to where I am today.

What I want get just one person to make a small choice to get 10% of their net worth into PHYSICAL gold and silver. Why just one? It’s because when it’s time to use it I would have saved that persons wealth and possibly their life and it would matter to that one person.

#51 R on 05.04.09 at 11:48 am

#27 Hagbard….I agree! The reason the people in Victoria are so ill tempered is because the sun never shines . Give me minus 20 and sunshine over plus 1 rain and low cloud anyday. Don’t forget that from Oct. 1st to June 1st you have to run every light in the house so you can find your way to the bathroom. If you insist on retiring there don’t forget to budget for antidepressants you will need them .

#52 Niergen on 05.04.09 at 12:05 pm

I know Calgary is not different but the RE in Calgary is different. Garth or anyone can explain why in the past month the average price of SFH is going up roughly 6K and the listing is steadily going down in Calgary? You may say those buyers are Greater Fool but why owners withdraw from the market? One conclusion I can make is that Calgary or Calgarians are different.

#53 Dan in Victoria on 05.04.09 at 12:29 pm

Recreational property?Take Garths advice unload it.We owned a ski condo up at Mt.Washington years ago never thought it would go down in value.Well we took a 25% haircut on it.(they did recover in value we just couldn’t hang on)One of lifes little lessons that we payed for.This adjustment is looking particularly nasty compared to that one.I’m hoping to get a reciept that says”All lifes little lessons are now Paid in Full”

#54 MrC on 05.04.09 at 1:10 pm

ROFLMAO! $575,000 for 1000 square feet? wow, such a deal that is! We have OVER 1,000 SF for well under $100,000 and low property taxes as well.

Where do you live for 100,000? The middle of no where?

#55 Future Expatriate on 05.04.09 at 1:31 pm

People who buy real estate, now, are EXACTLY like the idiots who rush to the exposed seabed that precedes a Tsunami when the sea recedes.

“Wow, lookie, Agnes, where’d the ocean go?”

And the realtors and real estate boards are in the untouched bobbing yachts far offshore, egging the suckers on with bullhorns.

It should be criminal.

#56 David on 05.04.09 at 2:05 pm

I still remember checking out the MLS prices in Kelowna last summer. What came to mind was a retirement theme park where someone from somewhere else who was no longer earning an income would plunk down wads of cash and keep unrealistic prices suspended in mid air. All those gated communities with hefty price tags seemed like the housing industry equivalent of miniature Potemkin Villages designed to impress outsiders with glorious stage managed facades.
Could be a hockey player huh? Lets see, at best 600 full time NHL hockey players with an average 3 year career that is shorter than the minimum to collect the NHLPA pension plan. Those guys have to live off their accumulated NHL earnings from those truncated careers for the rest of their lives. If one looks at the data from the NFL, 78% of players wind up in serious financial difficulty after their pro days end. The data for NHL players is not publicly available and might be somewhat better, but as saviours of Kelowna home prices quite unlikely.
A dentist grossing $200K would barely meet the fundamental criteria on a $500K plus home of earnings to principal. In a community of 107,000 people there would not be that many top grossing physician specialists earning more than $600K and probably even fewer willing to speculate their hard earned dollars on housing bubble prices. Good to have dreams, one can suppose.

#57 Bill-Muskoka (NAM) on 05.04.09 at 2:07 pm

Ah, Frank Stronach is at it again, complete with his Russian friends. Does this sound a tad bit like Deja vu?

Magna to bid for Opel

Seems the Star’s ‘reporters’ don’t read their own newspaper? FIAT is also bidding to buy GM’s European operations.

Fiat move for GM would create $100B giant

Nothing like informed news, eh? LMAO!

#58 KenCan on 05.04.09 at 2:21 pm

Tom Rovin / Toronto Open Houses yesterday / JM

In Toronto and GTA, prices are robust. True that there are less people at Open Houses but since rates are very low, buyers are able to afford more and hence are bidding high for houses on markets. Realtor friend told me there were 6 bids on a house of approx $410-420’s (asking $430) + 7 more scheduled showing as at yesterday morning and the house has been on the market for only 4 days.
Realtors are fooling stupid buyers arguing they can afford the house at mortgage rate ~3% variable closed. But what happens when rates goes up – BoC wont lend at 25bp for years – in 2 years, it will go up by 2% easily and that will mean that buyers will need more money to pay their mortgages. Does mortgage companies or banks factor that in when they loan out? Does RE agents tell that to their clients?
those stupids buyers + greedy RE agents + greedy lenders are manipulating this market and keeping prices high…. but they don’t realise that all they are doing is ..delay the inevitable!

God helps those poor buyers in the coming year(s)

#59 rory on 05.04.09 at 2:26 pm

Article titled on msn.ca – Air Canada, union butt heads over underfunded pension plans

Lewenza said at a press conference Monday.
“It’s a safe bet that our pensions are going to be the first target of the company. The message is forget it …our pensions will not be held hostage by the financial meltdown and by corporate greed.”

Get that part …”not held hostage by the financial meltdown” …it just begs the question: Where the heck do you think the ability to fund a pension comes from?…wait for it …he doesn’t care so hello taxpayer bailout #82 or skyrocket the air fares …got to be the only solution he sees …jeez and this guy is running things over at the CAW …good grief…corporate greed part is legit but he did do the oversight on union greed.

Starting to notice the common denominator here for failed companies like Air Canada, GM, Chrysler, etc …the CAW.

Need jobs to keep RE afloat but to have jobs we need viable, functioning, profit making companies….unions are not making it easy or even probable…time will tell who gets spanked and it usually is NOT the squeaky wheel …we all know us sheeple hardly bah, ever …IMO.

#60 Barb the proof reader on 05.04.09 at 2:41 pm

re: “Here’s how bad things have got for Stephen Harper: people are taking Garth Turner seriously.”
http://www2.macleans.ca/2009/05/04/the-best-man-for-the-job—well-the-best-one-around/

I just remembered the name of the mis-info dissemination group Coyne engages in:
Coyne participates in a groupthink structure called Civitas. http://thetyee.ca/Mediacheck/2005/11/29/HarperBush/
……. a network which routinely assists Harper in foisting his agenda on Canada, a secretive organization, a network of Canadian extreme con and some U.S. academics, politicians, journalists and think tank propagandists.

Harper’s pally-pal Tom Flanagan launched it. Conservative MP Jason Kenney is a member, as are the head of the Atlantic Institute for Market Studies and Montreal Economic Institute, 2nd & 3rd most phoney think tanks after the Fraser Institute.

Civitas is top-heavy with journalists to promote the cause, a narrow cause which in no way serves we the people, and is proving over the long haul to be astonishingly detrimental to Canadians and Canada.

http://www.sourcewatch.org/index.php?title=Civitas_Society

#61 MenWithHats on 05.04.09 at 2:45 pm

WTF is going on in Alberta ?

Edmonton — Home sales in the Edmonton region picked up in April from both the same time last year and last month, according to MLS statistics released Monday. There were 1,843 residential sales in April. That is up 1.1 per cent from April 2008, and a whopping 33.6 per cent from March 2009.

The average (mean) price of single-family homes in the Edmonton area increased one per cent from March to $353,386. That was still 8.5 per cent below the previous April price of $386,033. Condo prices were up 2.4 per cent from March to $236,020 and down 8.1 per cent from April 2008. Duplex and rowhouse prices rose 5.2 per cent to $291,068 from last month; the average price was down $24,147, or about 7.6 per cent off the same month last year. Realtors’ Association of Edmonton

I don’t buy it . Not for one second .
Alberta is getting smacked hard with high unemployment numbers .
Where are these fools coming from ?
Do they not know how to read ?

#62 lgre on 05.04.09 at 2:52 pm

“Oh..How I rember the real estate down turns here in Victoria..the last being 95-2002”

That was picnic of what’s to come..believe it Fred.

#63 Bob Bagina on 05.04.09 at 3:07 pm

Kudos to Fred Carver for posting and sharing his opinions. I’m still at a loss though as to who these supposed first time buyers in Victoria are, when median family income is 56K. What demographic of first time buyers are you coming across?

I notice sales in Victoria are starting to go over asking, and markedly so in some cases. I am, perplexed. Low rates, yeah? Keep the people enslaved and they’ll keep working shitty jobs for their masters.

I grew up in Victoria, and it used to be far more friendly. Hellos galore and always stopping for pedestrians. Has changed, but it’s insane to compare it to all of Ontario. Unless comparing friendly means giving up your wallet to someone at Danforth and Coxwell.

#64 highway61 on 05.04.09 at 3:07 pm

#52 Niergen

this might be one of many possible explanations:

http://www.calgaryherald.com/business/real-estate/Condos+seen+attractive+investment+opportunity/1561881/story.html

#65 Grumpydawgs on 05.04.09 at 3:08 pm

The real estate whores and those deluded desperado’s who adore them are fighting back after a bit of an abscence from the media blitzkrieg we witnessed through February to mid April.

http://www.vancouversun.com/Business/Vancouver+residents+cite+affordability+reason+buying+condos/1562184/story.html

Now to say that the banking whore is somewhat self serving is to be light on sarcasm which I am not. But for the press to continue to place these ads for whomever wants to pay for them is a final disgrace for the MSM generally. If the MSM is wanting to reposition itself for the survival of thier entity then it’s possible that pissing off the entire readership may not be the best game plan.

Choking down ones editorial bile and pride to eschew that prices have merely ceased to plummet and are merely falling is akin to old story about the jumper who is heard to say ” So far so good” as he plummets past each stories windows towards the inevitable bashing. I like a good story as much as the next guy, but suggesting that real estate buyers are hopping on board the condo train because of ‘renewed affordability’ and the opportunity to make capital gains, in the future would have made an editor quit in protest not to many years ago.

#66 lgre on 05.04.09 at 3:17 pm

take a look

http://www.vifamily.ca/library/cft/famfin08.pdf

#67 rory on 05.04.09 at 3:31 pm

Hey all …a good, short read on US RE …hope most have not seen this one yet….it is titled: “The Great U.S. Housing Market Depression, America Stop Thinking about Homes as Investments”

http://www.marketoracle.co.uk/Article10304.html

#68 jess on 05.04.09 at 3:56 pm

I find it offensive and embarrassing when I hear our prime minister perpetuating myths about the american people and the reasons they are in debt.

“Although study after study has shown that personal bankruptcies are caused primarily by catastrophic events like divorce, job loss, and, above all, medical bills and that most of us are struggling with a gap between our income growth and the soaring cost of necessities like housing…”

http://www.nytimes.com/2000/09/03/business/five-questions-for-elizabeth-warren-bankruptcy-borne-of-misfortune-not-excess.html

Don’t people file for bankruptcy because they misused credit, lived beyond their means?

A. In the same way that dead bodies help pathologists understand illness in a living population, the people in bankruptcy help us learn about the economic risks facing families generally. Many people in bankruptcy were solid bill payers until something knocked their legs out from under them. For two-thirds of these people, it was loss of a job, for 40 percent it was a serious medical problem and for 20 percent it was the economic fallout of divorce.

#69 john on 05.04.09 at 4:02 pm

Apx 6 months after the meltdown stock market is back at 10000 level, real estate is still selling and so are Garth’s books???

#70 lemontory on 05.04.09 at 4:06 pm

I was in costco on the weekend here in the “greatest place on earth” and the chap behind me was a costco worker at another store. He asked the cashier how things were going in the Burnaby store and she said, aside from the dinner rush, it was basically dead all day, everyday. Layoffs were mentioned, as were less shifts.

I went out for dinner at what is regarded as a high demand restauarant (casual nice, good atmosphere), and was surprised there was no wait (we arrived at 7pm) nor was there a second seating. By the time we left, restaurant was half empty. On a Sat. night!

To those who can’t see signs of a recession, I say, look harder. It’s everywhere.

#71 miketheengineer on 05.04.09 at 4:27 pm

Hey Garth:

I am no longer optimisitic on this economy. Soup lines in every major city starting be Dec.

We are 6 months from the start of the “great disaster”.

Mike

#72 jess on 05.04.09 at 4:37 pm

what is full employment? since none of these jobs are ever coming back …
http://bloomberg.com/apps/news?pid=20601109&sid=aOhkusQ9LifQ&refer=home

#73 Bill-Muskoka (NAM) on 05.04.09 at 5:13 pm

#65 Grumpydawgs

I do not expect anything but that from the same MSM that gave us WMD’s (Words of Mass Deception). Just look at the two stories regarding GM’s European ops I posted today…Same newspaper, and totally ignorant of what their own are saying. Not news, just investment infomercials.

#74 john on 05.04.09 at 5:15 pm

#71 – Mike the engineer

We have been waiting for over a year and reality is things seem to be returning to normal. We must now ask ourselves is it possible Garth has it all wrong and world efforts have infact weathered the storm. I must admit I am wondering myself. Even my company has started to hire aggresively.

#75 David on 05.04.09 at 5:19 pm

At current interest rates that wonderful summer home on the lake would need to generate almost $20K per month in gross rentals 12 months a year to be a viable rental investment at the low ball price of $2.9 million. To be a “safe” investment at 7% interest rates, gross monthly rental income would need to be almost $30K a month to generate a sustainable P&L with adequate returns on capital and not risk debt default. Doubters can run the numbers if they choose and reach a similar conclusion.
Priceless lake views indeed.

#76 Bill-Muskoka (NAM) on 05.04.09 at 5:21 pm

#60 Barb the proof reader

Thanks for the links. I read the story as well, and laughed my arse off. The worst revenge Garth could elicit from Harper is for people to pay attention to Garth. Thanks Andrew for the Coyne Bump!

#77 Bill-Muskoka (NAM) on 05.04.09 at 5:28 pm

#54 MrC

No, in fact we have wonderful major lakes, provincial parks, and all the major brand name stores within under 7 kms from where we live in the ‘middle of nowhere.’

That is what wise research and thinking can bring you versus being a Sheeple following the crowd. Baaaaaaaaaaaa! Shocking I know!

#78 dd on 05.04.09 at 5:33 pm

#69 john

“Apx 6 months after the meltdown stock market is back at 10000 level”

So? Is it going to stay there when all the government money is gone?

#79 Two-thirds on 05.04.09 at 5:34 pm

#70 lemontory:

I had a similar experience this weekend in Edmonton. Went out for dinner at a popular restaurant ($20+/entree) and it was half full at best on a Saturday night. I had never seen so many empty tables there before, so I wonder if the warm weather was to blame, or the declining local economy…

On the other hand, the malls here are still quite busy. I cannot tell if the shoppers are all buyers, but they definitely keep congregating there. I have picked up a few formerly expensive items by as much as 60% off (with respect to the cheapest online prices) at local malls in the past few months, which is quite uncommon. I have zero debt, no mortgage, double income, and no worries. Cash is so much better than credit.

Life is good when you have savings in the bank and patience to wait for the deals to come.

#80 dd on 05.04.09 at 5:36 pm

#61 MenWithHats

“The average (mean) price of single-family homes in the Edmonton area increased one per cent from March”

Perfect opporunity to unload that investment property. Just because the stock market is going up doesn’t mean you should be buying either.

#81 Bill-Muskoka (NAM) on 05.04.09 at 5:37 pm

Bill … You just haven’t LIVED until you slip on the ceramic tile floor in the kitchen, near the sandwich island, and banged your head on the corner of the polished granite counter top.

#38 ally ally oxycontin free

Oh, trust me I know that feeling from doing work in some of the multi-million dollar ‘cottages’. LOL It redefines getting ‘stoned’, eh? LMAO!

#82 glw on 05.04.09 at 5:38 pm

#69 john
Apx 6 months after the meltdown stock market is back at 10000 level, real estate is still selling and so are Garth’s books???

I am just simply thoroughly confused by these goings-on. Beyond my comprehension. Can’t shake the feeling of a lamb being led to slaughter. Approx. 55% in “cash” depending on the time of day – have been for about 1 1/2 yrs. – took remaining profits in mid Sept/08 – and going to keep it that way. If anything I will sell more stocks soon to protect my miniscule holdings.

Baaaaaah – In Goldman Sachs We Trust.

#83 Bill-Muskoka (NAM) on 05.04.09 at 5:38 pm

#43 rory

I am not retired nor is my wife. In fact I love working, have my own business, and my wife has a good job as well. If you call being less than 3kms out of the city ‘rural’ then I guess you don’t get out much?

#84 dd on 05.04.09 at 5:38 pm

#52 Niergen

“One conclusion I can make is that Calgary or Calgarians are different”

At $50 oil and $3.50 Natural gas … don’t bet on it.

#85 M R Ducks on 05.04.09 at 5:42 pm

Sap rises in the spring.
I even feel the optimism myself.. bust out and unfurl. Rise up and invest! Things are looking up into the clear blue sky.
But then comes summer and the leveling off of enthusiasm and after that… well, I don’t even want to think about next October and November when all the juice withdraws back down into itself.
Buyers beware.

#86 dd on 05.04.09 at 5:43 pm

#50 Davinci

“Once you fully understand that paper money is nothing you will feel a sense of panic, realizing you and the rest of the world have been duped.”

If you want real things go into into commodities (not just gold). Food might be the greatest commodity of all.

#87 Marc on 05.04.09 at 5:46 pm

#70 lemontory on 05.04.09 at 4:06 pm

Half empty restaurant on Saturday night? Did the restaurant have any TVs? There is this thing called hockey that will pack most any pub, restaurant that is showing the game. If the restaurant you were at had no TVs, then it is of wonder why it was even half full. I was at Lougheed Village pub on Sat. and it was packed. Can usually shoot a cannon through that place and not hit anyone, but when Canucks are on, people come out of the woodwork. I would not go back there again though. As usually food is good, the waitress let it sit for < 10 mins before serving us. Kitchen ought to have known how long it sat and not allow it to be served imo. We got new food, stayed longer then expected because of it, and I missed my Saturday serman of Coaches Corner because of it.

#88 2011-2012 govt planning on 05.04.09 at 5:58 pm

In the US, with presidential elections every 4 yrs, the trend is to let the economy suffer the first 2 yrs, and improve before the next election, in hopes that the president (whomever it was/is) will be re-elected.

With rates so low, and major probs that will come if rates start to increase, I wonder what the current US govt has planned, in order to stimulate their economy, going into the next big election.

Any thoughts?

#89 . . . fried eggs and spam . . . on 05.04.09 at 6:45 pm

In this We’re Different And Unique Free-Flowing Land Of Milk and Honey, there are no cyclical bubbles to contend with, no beginning nor end of anything, no one ages beyond 30, no politicians exist, all are content with happy and healthy lifestyles, living in pure bliss and harmony with all beings in La-Di-Da-Da Land, the Vokanagan Alley.

Here in the BubbleGum Capital Of Financial Geniuses, bankers and business people are friends to all. They joyously lend us Qwajillions of Trollars (the official currency of the Okanagan Valley States Of Somewhere In The Central Pacific Corridor), at zero interest and with nary a thought of ever being repaid.

Yes! This is True Nirvana, as there are no such things as mortgages, home foreclosures, debts, insolvencies and the like. They were finished with lifetimes ago.

Everyone has five acres of pure arable land, grows three good meals a day and once a month, it’s Christmas Day All Over Again!

And now for a more accurate view of the difference between management and workers. Note the Pointy-Haired Boss’ facial expressions in the last two panels; they are quite curious. — http://www.dilbert.com/
——
I figured these kinda went together. In the KDC today, a CP story was headed “Sell in May and go away? Spring stock market rally getting stretched as analysts predict summertime selloff”, followed by . . .

#11 Da HK Kid on 05.03.09 at 11:37 pm — “Artificial boom market followed by crash followed by artificial re inflation via stimulus (to avoid heavy deflation) followed by second leg down.” — and —

#13 Popping Bubbles on 05.04.09 at 12:24 am — “Consumer insolvencies to skyrocket: TD” . . . #71 miketheengineer at 4:27 pm — “We are 6 months from the start of the “great disaster”.

Others of interest: #49 nonplused at 11:26 am — “By October the tide will have gone back out.” — and — #55 Future Expatriate at 1:31 pm — “. . . are EXACTLY like the idiots who rush to the exposed seabed that precedes a Tsunami when the sea recedes.”
* * * * *
A week or so prior to the Boxing Day Tsunami of 2004, all the animals — ALL — started heading for higher ground, as they knew something was happening, but didn’t know what. All they knew was to get to higher ground, and fast.

A TV documentary later noted the native villagers and fishermen had noticed the same thing — “the sea had gone out, gone to sleep, and we had to go to higher ground quickly.”

Draw roughly the same conclusions here; the daft ones never bothered to pay attention, look beyond the ends of their noses and continued to holiday in abundance. Then they were gone. Life is so fleeting, temporary.

Sheeple still learn from the lessons of ancient Rome. All the politicians do is fiddle, while countries burn.
* * * * *
Well, whaddaya know. The Cycle Of Nines continues upward and onward, not caring who it grinds into dust. Moreso than the financial BS happening thruout the globe, it is the level of violence which has soared.

Around July / Aug. and Sept., tensions will have risen to levels unseen before. After further money is thrown away over the Olympics, what are the bets about wars beginning between to or three countries, then expanding?

There are way more things going on to distract us, like this pointless pandemic. Most sheeple either don’t care anymore, having nothing left to lose so there is nothing that can be done for them, as they will not help themselves.

#90 Grumpydawgs on 05.04.09 at 6:59 pm

Jess , are you forgetting that the Federal Liberal Party definition of ‘full employment’ is derived from Pierrre Trudea and marc Lalondes “seven percent solution” wherein by deception, immigration, lack of educational facilities and the manipulation of the currency the government( Liberal) would guarantee that at minimum seven percent of the Canadian population would be unemployed at all times. This was supposed to provide cheap labour for the inefficient factories in the development of the loony tunes Quebec economy in preparation for separation. The Liberal party is again talking about increasing taxes as a way to manage the economy.

Nobody is going to raise taxes. — Garth

#91 john m on 05.04.09 at 7:24 pm

Congratulations on your tour’s Garth and it is well deserved you tell it like it is! Not an easy task in this molly coddle generation today.Im from the boomer generation we changed the whole country–we were the rebels,we knew right from wrong,we made our point! I remember when women could not vote,when women were not even allowed in a bar without an escort–we changed that–in fact we rebelled against everything that was not right!We protested against non sensical wars in foreign lands for the establishment.(stephen harper would have been toast in those days)Today this generation doesn’t even go out and vote (let alone make a stand).Christ when i was a kid you couldn’t even have long hair–then along came Elvis (who was banned from lots of places because he danced too suggestively :-) )And the Beatles ! Well its time for this generation to step up to the plate! If they do not the old boomers (like myself will).If you think im kidding just wait–this bullshit is going too far!! (in the old days we were kids we had no money,we smoked pot,we worked wherever we could to make a buck—but WE CARED—step up to the plate youngsters!

#92 Just a Carpenter on 05.04.09 at 7:52 pm

Garth, the trouble with hanging out at Joey’s is that it you very quickly realize that any of the kids that work there could be your grandkids! Perhaps the 4 scotch at the Grand had you thinking that maybe you still have it. Like the sign says…Reality Check Ahead!

Yeah it costs more to live here but not all is doom and gloom. Check out Kelowna Flightcraft and Club Penquin just a couple of small companies that started here and stayed even after making it big.

I’m hot. Get over it. — Garth

#93 Just a Girl on 05.04.09 at 8:02 pm

I have been researching rentals in Edmonton (because my lease was coming up for renewal). Some potential landlords with investment condos have approached me, asking what monthly rent I would like to pay, because their banks will organize their mortgage accordingly.

#94 VFC on 05.04.09 at 8:03 pm

I have to ask, “tony hoods”?

Friend of mine went to see an open house this weekend in middle Toronto. House was advertised well with a nice glossy pamphlet. Lots of people showed up. If those were not paid actors, he thinks the house is going to go over asking so he stayed away. Lucky him for now.

#95 Just a Girl on 05.04.09 at 8:15 pm

#26 Mike M. wrote about Vancouver: “I’m 46 with a wife and child. Am I going to live in a basement suite again just as I did in grad school?”

My Mom lived in a very small, damp basement suite (with a kitchen the size of a postage stamp) in Vancouver for 12 years. She scrimped and saved up a down payment and finally bought a condo.

I used to always urge her to explore other areas of Canada, where she could be professionally employed but have a higher standard of living, and more living space. She adamantly refused to consider anywhere else. Vancouver was home, she loved the city, the lifestyle, the weather, and her friends. At the end of the day, it was always worth it to her.

Everyone sits somewhere on the value spectrum, and will make different personal choices to support their position.

#96 Just a Girl on 05.04.09 at 8:35 pm

#37 Fred Carver, on Victoria real estate values holding their own.
======

At the risk of inviting the blog wolves to attack (please be kind, I have children) … your post is sensible, echos my own thoughts, and I have to agree with you. Land values, demand from outside interest, and desirable location = higher prices. Home prices may all slide in the same direction down, but they will not land in the same place on the Great Equalizing Spreadsheet of Life :)

#97 905er & Spouse on 05.04.09 at 8:52 pm

#66 lgre: Thanks for the report- here is a choice excerpt from the author- just like we’ve been saying about the younger generation X and Y:

The generational wealth transfer – My spouse and I paid $30,000 for a lovely 1,800 square foot semi-detached home in suburban Toronto in 1970. I was 26 years old at the time and the purchase price was about three times our combined annual household salary.

In mid-summer of 2008, this same house was priced at $400,000. As economists are prone to do, let me assume that another 26 year-old with a partner buys the house from me. They give me my $400,000 and I walk away with my rich prize. The new 26-year
olds now have a house that is probably equal to about six times their annual household in-come. They are now really cash poor, not just on paper, but in reality. This is an example of how young people are transferring wealth that they don’t have (they have to borrow it)
to a bunch of older boomers who have benefited from the housing inflation bandwagon.
Something is wrong here.

(from me- This is to say nothing of higher debt levels from student loans, fewer years of earnings due to years spent in education, stable jobs replaced with contract and part time work, loss of pensions, fewer job prospects etc)

#98 Nostradamus jr. on 05.04.09 at 9:41 pm

#70 lemontory
>>I was in costco on the weekend here in the “greatest place on earth” in the Burnaby store. <<

…It was jammed an hour earlier and if you visit any T&TSupermarkets (Oriental) you will find three times the # of staff and those stores are jammed all day long.

Easterners visiting from the Centre of the Earth are simply envious of Vancouver’s vibrancy.

#99 Nostradamus jr. on 05.04.09 at 9:46 pm

>>Euro-Zone Jobless To Hit Postwar Record

Deepening the economic gloom in Europe, the European Union admitted Monday that its previous forecasts were way off the mark. It now predicts “a deep and widespread recession” across the continent and says unemployment among nations using the euro currency will rise to a postwar record of 11.5 percent in 2010.<<

…and that will slide over to North Amerca soon enough, just as Garth predicted.

Southern Ontario better hope the $3 billion bail out closes otherwise Ontario becomes a Euro zone groupie.

#100 The Other David on 05.04.09 at 10:00 pm

Heard on the news this afternoon that 1/3 of all the houses in the GTA are worth 500K+, who is earning these huge salaries?

#101 Dan in Victoria on 05.04.09 at 10:00 pm

Post #37 and#96 Yes I would say that Freds post is a very accurate appraisial of the Victoria market in todays terms.But the business model that he and I have learned the past 40 years is now broken,The economic engine of Eastern Canada and the USA have gone off a cliff,were sitting in the caboose in Victoria sipping our Kool-Aid(oh yeah)and eating our tweedle dees(hor doeuvres) were going to go over the cliff too,its anybodys guess where we are going to land.This business is going to mutate,into what I’m not sure.The ones that are able to see it and adapt to it will survive.Comment on first time buyers.My nephew asked for some advise about buying a home,”I’ve heard this and that he said what do you think uncle Dan?”Well I said lets just break it down into the simplest terms for you.450,000 debt,pay 1500 a month on the principal,nothing on interest,that will take you 300 months to pay off or 25 years.Thats nothing for interest or anything else.He sat there for a couple of minutes,some dust came out of his ears and he said “I can’t afford that”Thats almost half of what I make.”Good I says you have a chance.”Apparently the other half didn’t like that explanation, and they are looking for someone else that will give them the answer they so desperatly want to hear.

#102 Gord In Vancouver on 05.05.09 at 1:06 am

#70 lemontory

……To those who can’t see signs of a recession, I say, look harder. It’s everywhere.
______________________________________

Yes, Vancouverites who still don’t get it should take a walk or transit (don’t drive) down these streets and notice all the “for lease” signs that are now the norm, not the exception:

1) West 2nd Ave.
2) Dunbar
3) Kerrisdale.
4) Broadway (near VGH & east of Cambie)
5) Yaletown – not as bad as 1) to 4) but more vacancies than at any point over the past decade.

Nowadays, areas of Vancouver that have 2 or fewer commercial vacancies within a block are doing well.

#103 Glenn on 05.05.09 at 8:09 am

#27 hagbard on 05.04.09 at 7:07 am

#9 DG

Nothing beats Victoria for “ill-tempered”. Spent twenty years there, moved back to Ontario where people actually great each other in the street rather than snarl.

—–

Try Montana where they poison people on a regular basis ( http://www.nbpc.net/index.php?option=com_content&task=view&id=139&Itemid=57 ), satan worshiping meth-heads ( http://www.annointed.net/blog/satanist-inmate-sues-county/ ) comprise at least 60% of the population, and the average chief of police in the small towns is himself a convicted felon.

Ive lived in 3rd world hell holes that had more charm and character then Montana so enjoy Ontario…and thanks for the warning about B.C.!

#104 Bill-Muskoka (NAM) on 05.05.09 at 8:43 am

#91 john m

Hear! Hear! Excepting the use of pot, for my own version, we certainly did. We told the Good Old Boys to stuff it. Unfortunately too many of us then became the neo-Good Old Boys.

One point for sure…We would have made Harper toast. But let us remember that we also helped give the world Reagan and both Bush’s (the American Boomers did. I did NOT!). We are still fighting for truth in the damn media. That is one thing that hasn’t changed much. The MSM is still the Power Perverts lackey! Jon Stewart is about the only one I know of that regularly takes the Talking Head morons to the public flogging post.

Geez, when you watch those parrots yak on and on about some insignificant thing you stop and realize that even the Pot Heads of our generation made more logical sense than this generaion of Fluff Artists posing as news people.

#105 gold bugger on 05.05.09 at 3:03 pm

Future Brain Surgeon writes: “And the realtors and real estate boards are in the untouched bobbing yachts far offshore, egging the suckers on with bullhorns. It should be criminal.”

It should be illegal for sales people to convince people to buy stuff?

Thank you, Karl Marx.

#106 Future Expatriate on 05.06.09 at 3:54 am

#105 No you moron. It should be illegal for people to ripoff people by conning them into buying when a market is tanking by LYING TO THEM.

Thank you Adolf Hitler.

#107 Bill-Muskoka (NAM) on 05.06.09 at 1:07 pm

#106 Future Expatriate

Do you find it as insanely amazing as I do that Conswervatives are always against any social programs but then will thump their chest to spend billions on law enforcement and prisons to deal with the consequences from no social programs?

You can always tell when they speak by the buzz words they thrive on ‘socialism’, ‘communism’, ‘free (meaning unregulated, aka ‘Trust Me! I’m honest! Honest!’) market’, ‘no government interference’ (unless of course they want the taxpayers to foot the bill fo their wants.), calling someone or referencing ‘Karl Marx’, etc.

It is too bad Jesus didn’t include them in his HYPOCRITE List! He pretty well covered everyone else even lawyers.

Maybe he did and then Constantine or King James had it edited out. We can’t have a Holy Ordinance against GREED and Bigotry! God forbid such a Divine restriction be imposed on them.

One thing that came out if all was ‘Follow The Money’ the blanket statement to test the integrity of the purpose behind their rants.

#108 Future Expatriate on 05.06.09 at 5:57 pm

#107… Oh Bill, but Jesus DID cover everyone in his hypocrite list. The magic word “Pharisee” covers every phony ‘religious’ antiChristian and antiJew from George Dubyah Bush to Miss California to Bibi Netanyahu to our very own lovable Stephen Harper & Crew.

Pharisees all.. pious public folk who pontificate and pray in public about how much more holy they are than everyone else, enumerating every single Judeo-Christian Law they uphold over the rest of us sinners, vowing to restore theocracy as long as they and they alone hold the reigns of power, while secretly plotting to kill as many innocents already born and Christ Himself in every way humanly and inhumanly possible, while profiting from their plots mightily.

Jesus Christ never overlooked anyone or anything.

#109 Ottawa on 05.06.09 at 9:00 pm

Things really are different in Ottawa – restaurants are full and houses are selling. Stable government employment and cheap rates have also convinced people that it cant happen here and now is the time to buy. We are happy in our little bubble existence – no negative news please.

#110 Bill-Muskoka (NAM) on 05.07.09 at 9:38 am

#108 Future Expatriate

You made a good point! ;-)

#111 Future Expatriate on 05.07.09 at 4:55 pm

#110 Thanks. I do my best as much as I can. You too.