Canadian vultures

Asking price: $50,000

az41

Phoenix, Arizona: 4 bedrooms, 2 baths, 1,288 square feet

Asking price: $40,000

az11

Phoenix: 3 bedrooms, 2 baths, 1,424 square feet, inground pool

It’s an enticing combo – crashed housing prices, the lowest mortgage rates in a lifetime and a Canadian dollar on its way to 100 cents US. For many people, this makes buying American real estate irresistible. After all, homes in Reno or Phoenix that were selling for $300,000 a few years ago can now be scooped for $130,000 to $150,000.

And that’s just a start. For example this weekend in Phoenix there are almost 1,000 houses for sale for less than $50,000 – like the two pictured above.

So, why wouldn’t you buy? States like Arizona and Nevada have growing populations with real estate markets that appear to be close to hitting the bottom. Guys like Jerry are mighty interested, as his email to me shows:

I’m a big fan, love your books and have been reading your blog on greaterfool.ca religiously for the past year and respect your opinions and advice.

I work in the Alberta Oilsands and noticed a lot of the guys have been scooping up real estate in Arizona for cheap and plan on living there in the winter, working here during the spring summer months. When I look at their MLS listings I wonder how low can they possibly go? Is now the time to buy?

I’m looking into buying revenue property in Phoenix, prefrably fourplexes with tenants close to downtown or the University in Scottsdale. I know the vacancy rates in Phoenix are very high, that the economy is no where near from recovering, but feel that if this is the bottom of their housing bust, and if I can rent out the fourplexes at a cost that could at the very least pay the bills that long term this could be a good move for myself.

I’m 33, a tradesman, sold my home in Calgary last year, have lots of cash on hand, no debt, a saver, too afraid to go into the stock market right now, and have no desire to buy a home here in Alberta. I love the idea of spending my winter months in the desert playing golf instead of toiling up north for the oil companies in -35 degree weather. So whats your opinion on Arizona? Whats the catch? The locals aren’t buying property there so there must be a catch right?

Jerry

Well, things are not exactly as they appear. For sure, there are strong arguments to buy property at the bottom of the curve – especially with more potent Canadian dollars. And, yeah, this could be the vulture opp of the century. But before you and the other oil-soaked, petro-dollar totin’ cowboys descend, there are a few cautions.

* It’s still no picnic getting a mortgage in the States, especially if you have maple leaves on your boxer shorts. The best bet is to use a US subsidiary of a Canadian bank (show them your pants).

* When you do borrow and close the deal, be prepared for extra costs. Mortgages down there come with “points” which are closing fees you cannot avoid. In addition, you’ll have to hire a title insurance company as well as a lawyer.

* If you rent a place out, you must pay US tax on the income. That means filling out a tax form showing the rent collected and all allowable expenses in order to determine the taxable profit.

* Time to sell and take your vulture profits? Can’t do that until you fill out more forms and cough up the 10% federal withholding tax on the proceeds – which is required to stay in the hands of the buyer. You can get a clearance certificate for sales under 300K, but that takes more paper, and a few months.

* States do it, too. More withholding taxes on the money your sale nets.

* If you happen to croak while owning a piece of US property, there are special non-resident estate taxes to pay on anything valued at more than $60,000, although if you have a tax lawyer or accountant familiar in cross-border investing, your grieving widow might wiggle out of that one.

* And speaking of your spouse, make sure any property you buy in the US is registered properly. In Canada you can change the name on a deed easily. In America, you might face a gift tax as high as 40% of the property’s value, simply to transfer into your sweetie’s name.

These are just a few of the cautions you face to land the deal of a lifetime.

But the thing which should give the greatest pause, Jerry, is your own question about why the locals aren’t buying. Get off the Internet and get on a plane, dude.

You may just be shocked.

turtle

Why US home prices may keep on falling: Click here

.

106 comments ↓

#1 Dodged-a Bullit-in Alberta on 06.05.09 at 11:09 pm

Greetings: There is one huge, huge, overwhelming reason for every investor to avoid Arizona, Nevada, Utah, etc. the lack of the most valuable commodity in the world: WATER

#2 Jon B on 06.05.09 at 11:30 pm

Excellent topic. Long overdue. A rare good news subject for the blog dogs. I’m interested in deflating California property. I’m not seeing many deals in coastal locations, just inland. Suggestions anyone?

#3 Davinci on 06.05.09 at 11:42 pm

The locals are not buying because they have no money. Everything before the real estate boom is gone and now that the bubble has popped its like a nuclear bomb went off that left all the building standing and no people.

Don’t believe me? Listen to the radio station down there talking about it.
http://patriotarchives.blogspot.com/
It’s scary.

This dude should just buy 50 ounces of gold and wait until 2012 then he can pick up that same house for 10 ounces of gold.

#4 US_citizen_in_Calgary on 06.05.09 at 11:52 pm

Garth:

That post is very reasonable. There are reasons why Arizona is not so great.

1)Water or lack of it. It is dangerously hot there.
2)Dangerous wildlife: Snakes and not so nice neighbours there.
3)Health insurance isnt free there.

Other than that, this paints a very accurate picture of how overpriced houses are in Canada.

What most Canadians dont realize is that the US is not friendly. Canada for the most part is a very friendly place, compared to the USA. I grew up there and I always find it funny that Canadians describe it as some paradise. The USA is a country owned by foreigners and it is not a free place anymore. It is state controlled. My wife a Canadian by birth doesnt feel as antagonistic to the US as I do and most Canadians dont because they dont see the US from an insiders point of view.

Anyone buying property, especially in Arizona should be aware of a dangerous biosphere there in addition to the wild west that still exists there. Guns? Yes. Gangs? Yes. Danger? Yes. Domesticated Canadians would do well to stay away. You dont know what you are dealing with.

#5 Bottoms_Up on 06.06.09 at 12:00 am

http://zetabid.com/Real-Estate-Foreclosure-Auctions/Inventory.aspx?aid=1018&eid=1031
————————————–
Before buying in Phoenix, visit the link above and view the 247 foreclosure homes that are easily purchased for only tens of thousands of dollars. Then ask yourself when will you ever see appreciation in these places, and how fun would it be living through a depression in the dustbowl: http://www.azcentral.com/business/articles/2009/06/06/20090606biz-economy0606.html

#6 kc on 06.06.09 at 12:09 am

One other thing you might want to look into about buying US property. The locals are sticky if you don’t have a green card and want to mow your grass or fix the roof. You are taking away US jobs from someone. and one other thing, you might get the TAX bill of your life being that you are out of US owner. I have heard that Canadians have bought US property and can’t get any tax credits and have to pay the WHOLE thing. Buyer beware and DO your HOMEWORK.

#7 timbo on 06.06.09 at 12:17 am

Good radio program and web-site to vegas housing problems.

http://americanradioworks.publicradio.org/features/foreclosure/

#8 alberta ed on 06.06.09 at 12:24 am

If you want to go south for the winters, just rent. It’s a whole lot cheaper and less complicated, and there’s plenty available.

#9 CAPOFALBERTA on 06.06.09 at 1:14 am

Garth I stumbled onto a mortgage blog(canadian site) and they are indiciating another wave of mortgage defaults in the US coming up.

What would the trickle down or the pouring down effect be up here in Canada and how soon can we see it.

Living in Edmonton, I think the prices here have flatlined, I know your based more down east, but any insight in Edmonton market would be helpful.

#10 . . . fried eggs and spam . . . on 06.06.09 at 1:14 am

Unless Jerry is planning on living there for six months or more of the year, why be bothered to go through all the hassles involved?

For all the BS — filling out forms, more forms, getting involved with accountants, lawyers and the like — just to spend a few months in a good climate — if I had Jerry’s job, I would rent a place (the owner may be overjoyed to have some guaranteed moolah coming in), get a really good Certified Financial Planner in Canada and park his nest egg in a handful or less of long-term growth and solid mutual funds.

Playing the stock market is no different than playing the lottery — win some, lose some but if he gets good info. on “contrarian stocks”, it may be worthwhile to put a small amount in.

Hang foot-loose and stay fancy-free. Don’t get tied to a piece of rock.
——
For those that remember (I don’t, as I’m way too young), Wile E. Coyote finally catches the Roadrunner. — http://crooksandliars.com/
——
Scientifically, these pix and descriptions are fascinating and is beyond anything I’ve ever seen. — http://tinyurl.com/pbyod2 /\ http://tinyurl.com/m3t8rr
——
Keeping N’Sync with Garth’s column on Cdn. (and American) vultures — http://tinyurl.com/o9m7ux

Something’s up! Para. follows. — http://tinyurl.com/p5uk9j

“The Germans have demanded that gold bullion held in US custodial accounts be returned to their owners, with physical gold shipped back to Germany.”
——
I don’t completely understand the concept of “monetizing the debt”, but I do understand the sentence following. — http://tinyurl.com/mm33ll

“Then, he added…’The Federal Reserve will not monetize the debt.’ That last sentence has a ring to it. It reminds us of Richard Nixon’s ‘I am not a crook’.”

Further, “Unlike Japan’s slump of the ’90s and ’00s, this depression is worldwide. Americans aren’t buying like they used to. So, foreigners aren’t selling. Everyone gets poorer as expected income and profits disappear…and turn into losses.

“Meanwhile, in America, today’s jobs report shows that unemployment is still on the rise. People without jobs can’t buy stuff – neither the kind of stuff you get at the grocery store…nor the kind of stuff you get from real estate agents. Since they don’t buy stuff, manufacturers don’t make stuff. And since they don’t make stuff, they don’t need the stuff that stuff is made of, nor the employees who turn the raw stuff into the finished stuff.

“Result: the stuffing gets knocked out of the economy.”

#11 Da HK Kid on 06.06.09 at 1:43 am

Great Advice Garth, it’s human nature to ask questions and look at the potential however when you peel it back a few layers is when the truth be told.

Absolutely you need to spend time in and around any RE venture. Local knowledge and perception is key.

After reading MISH just a few moments ago, he put a great pc together on RE investment and flipping when homes in the US are foreclosed and seem to be a bargain.

One property in question in a hard hit Case-Shiller local showed how 3 previous owners were screwed on the way down each of them with high expectations of making a quick buck! Worth a read but I liked MISH’s equation at the end.

“The math is rather simple: Bottom Seekers + Neglect = Repetitive Foreclosures”.

#12 Ghost of Tom Joad on 06.06.09 at 2:02 am

Anyone want to hear what it’s like in Scottsdale Arizona? Listen to Joe & Eric’s Patriot Radio News Hour(Monday to Friday podcast) that will tell you just how bad it is there and all over the US. They’ll also tell you to buy gold and dump Fed notes.

http://www.allamericangold.com/

#13 Lance on 06.06.09 at 2:21 am

We recently purchased a house in Florida, 1700 sqft, 4 bedroom, only $70k. But be very careful and make sure you check it out before you buy it. Many houses are a real mess: damage from angry tenants/owners, mold and mildew damage from being vacant and closed up all summer, etc. We were fortunate in that the house is right beside a home owned by a relative of ours, so they knew the history of the house and how long it had been vacant and were able to go inside and ensure that we weren’t buying a lemon. (incidentally, their identically sized house was purchased in 2005 for $305k…ouch)

#14 rob on 06.06.09 at 4:14 am

Garth, in your opinion, is there anywhere in Canada that provides a similar deal to Arizona at this time?

I live in victoria BC, as you know prices here are insane. I can’t justify buying in this town at this time.

I have a well diversified investment portfolio but I lack a real estate component. If I don’t want to get involved in the complexities of American real estate, where in the great white north would you find a good investment property to buy and hold or rent?

#15 hagbard on 06.06.09 at 6:30 am

Another thing to think about, you’ll be surrounded by Americans. Then there are the goons at the border. I’d pass on that.

#16 David Bakody on 06.06.09 at 6:35 am

Mr Garth Turner Hon. MP ret’d ….. you are priceless these words like others are worth millions of dollars and will add years to one’s life if people ” STOP & THINK” before they part with cash.

Hello Jerry?????? If renting is good here then renting is good anyway …… think if something happens hold a garage sale take your cash and move what does not sell give it a Salvation Army ….. no government and no lawyers …… but read your lease before you sign and remember all leases can be amended ….. so keep a copy. Then my dear lad ….. enjoy life and when someone tells you about their big RE deal …. you my dear boy can laugh inside knowing your money is yours.

“All the glitters is not Gold” & “Step into my office young man said the RE Agent to the Canadian”

#17 Dean on 06.06.09 at 7:31 am

I talked to someone who did one of those bus tours in Pheonix that you see on TV. They said it was shocking the disrepair and damage of those ghost towns. Many of the homes are damaged and have been broken into and gutted. Needless to say, they didn’t buy anything which surprised me. I also know people that went to Florida. I think, once you factor in all of the things that Garth said, it’s not such a great bargain (and hurricanes too) as these people didn’t buy either. In both went down with the intention of buying (and they had the money) and came back with nothing.

Another thing to think about is the tax base. In many places that has a destroyed market there really is none. So that means either taxes will have to be raised dramatically.

It’s definitely a bargain, but for me too big of a risk. Many of these communities may never recover. Remember, Americans still have money, their unemployment rate is almost the same as ours and their dollar is worth more — Why aren’t they snapping up those places?

#18 john m on 06.06.09 at 7:39 am

All things are relative–There are reasons the prices are so low…..and for the same reasons they have reached this point and are still for sale. The US is full of some very smart real estate investors –if these were bargains they would be gone before anyone knew about them.

#19 Bill-Muskoka (NAM) on 06.06.09 at 8:24 am

Garth,

Then we have the Canadian penalties!

Mortgage penalties bedevil Star readers

While what you state is true, but I think the U.S. mortgage system is far better for the long term. You get a fixed or variable rate (Garth’s preferred form of indebtedness) for a fixed term. No silly five year renewals to pad the bank’s coffers.

The Title Insurance is not much different than the farce we have here, except it actually provides real coverage to protect against mortgage fraud (Canada has yet to find the balls to enact such laws).

As to resale, the rule has been if you sell you must reinvest within two yeasr into a more expensive home or pay capital gains taxes. Yes, they have inheritance taxes as well, but look at the details. Many States allow exemption below a certain amount.

Phoneix area is nice but, too hot, too dusty, and mostly too much CRIME! Many of the homes there are owned by Snowbirds, and so this is nothing new.

What is NEW is that the huge influx of Californians from the past decade has now apparently peaked and the housing values have plummeted back to about 1960-70 levels. The homes are fairlywell built, but do not walk on the roof because many only have 3/8 inch thick plywood. Sunlight does not weigh anything. Count on $300-400 a month for A/C costs during the summer. You can use a Swamp Cooler until the Monsoon comes in late July to early August. Heating is almost nil except in January and February when the temp often goes to a frigid 28 F.

Do not buy a home with plastic plumbing unless you ahev it checked out by an inspector. Attic temps can easily reach 160F during the summer and the plastic can’t take the heat year after year. Stay with copper water lines.

Oh, and be prepared to meet new nasties like scorpions, Black Widow and Brown Recluse spiders, huge cockroaches, and centipedes (the large venonmous kind, not the little crawly things most people call centipedes.

You will love the concrete block walls that surround almost all properties as well. No fancy wood fences or chain link. The citrus trees are nice and you can pick your own oranges, grapefruit, olives, pecans, etc. if you have them. However, the developers just plow the subdivision sites bare and level, so years will be needed for newer properties.

Forget about police responding to your neighbor’s barking dog, loud party, or other obnoxious acts, they are too busy eating dougnnuts, catching drug dealers, and hunting for real criminals like murderers. They also tend to shoot first and ask questions later. Never try resisting arrest there because they do not take a liberal viewpoint of such behaviour.

Above all get used to guns because Arizona is the real Wild Wild West, and people carry them like a wallet. It is probably perfect for prarie folk because you can see the horizon in most areas of the desert. If you want beauty, snow (180 inches a season), pine trees and vistas choose northern Arizona new Prescott or Flagstaff. If you like aircraft, Tucson is a great place, but butt ugly as a city.

Otherwise get used to rock, sand, and mile after mile of cotton fields (Arizona is the largest cotton producing state in the U.S.)

Remember, the same people that gave the world Janet Napolitano are the ones who wrote the mentality and laws in Arizona. John McCain and Barry ‘Nuke ’em’ Goldwater, Charles Keating (Lincoln Savings & Loan) is the mentality there.

Oh, and learn to speak Spanish. Si habla espanol!

As for me, I’ll take Canada and what we know as civilization.

#20 David Bakody on 06.06.09 at 8:52 am

#13 Lance on 06.06.09 at 2:21 am

Sounds good but really how do you do that? ….. family being family it must be tough in many respects. Not a move I would make …. I thought about a family members home/cottage after a death ….. I told my wife sell it and divide the money up equally if we want one we will get our own. I know it was not the same but having to listen about the price and dripping over the “ouch” over and over would be too much for me.

#21 Mel Eager on 06.06.09 at 9:53 am

I like the advice to go see the place for yourself, and also Garth’s comments in his book “If the locals are not buying, what do they know that you don’t? What makes you so smart?”

#22 Nostradamus jr. on 06.06.09 at 10:19 am

Garth,

1/
…So why aren’t Vancouverites selling their homes and moving back East?

2/
…and why do Vancouverite Renters continue to bitch and complain about the high cost of buying homes, yet they don’t leave either?

#23 tjmikey on 06.06.09 at 10:23 am

Get on the plane dude.

Great advice.

I have a buddy that just packed up and left Phoenix with his tail between his legs…and he’s a scrapper.

Phoenix/Scottsdale are going out of business, becomeing very large ghost towns.

Vacant stores, parking lots, zero traffic, empty houses, empty pockets.

I guess it’s just brutal.

#24 barb the proof reader on 06.06.09 at 10:46 am

Interesting — all true. Security is a big concern in double-gated Ancala, Scottsdale, Phoenix, Mesa. So is summer heat. Home maintenance costs are high due to extreme summer heat damage inside and out. Never stay beyond April, it’s just too hot. You have to pay for a property manager to check the home so toilets and every other thing don’t dry out. It literally takes weeks to close up and re-open the house twice a year, and watch out for critters who moved in.

Bill Muskoka, no kidding the construction is poor, code violations, etc.

Many Calgary friends own there, most just middle class boomers stretching their dollars so they can tip their toes in the snowbird pool each winter*.

I’ll only add one more caution to Bill’s list of poisonous and dangerous encounters: coyotes — keep pets and kids close. And wear earplugs at night — the coyotes celebrate every kill with several minutes of yelping and howling — not up in them thar’ hills — they are in your yard.

*it’s snowing outside my window in Calgary, on June 6th… the just burst mauve clouds of lilac blossoms from last week’s 28 C temps, now are wearing white hats

#25 Jeff Smith on 06.06.09 at 11:07 am

There are even cheaper places. Try Detroit.

#26 Munch on 06.06.09 at 11:17 am

Brilliant post, brilliant comments!

This is the power of the Web (and blog)

Garth, good piece in the Financial Times about the trend towards politicians building support using the Web – your case is a classic though.

Regards

Munch from South Africa

#27 Got A Watch on 06.06.09 at 11:24 am

Why go far to “invest” in real estate. Canada’s own answer to the American late-night infomercials with the yachts and bikini clad women draped over the successful real estate investor: ‘T.J. Fox’ has a radio show called “The Canadian Real Estate Show” where he (doesn’t) tell you how to make a “fortune in GTA real estate” or the USA, he’s agnostic.

I am ROFL listening to this turkey on the radio: “Never a better time to buy!” (he actually says this) and every other lame real-estate cliche you have ever heard some clueless real-tard spout. All in 1 slim hour.

Special guest this week: “Donald Trump’s right hand man, George Ross”, dispensing Big-Gulp sized kool-aid. Of course, they did not mention ‘The Hair’s’ condo tower in Toronto that is not doing so well. Why focus on the negative.

Caller: “Why did you leave Canada 5 years ago to go to the USA to invest in real estate, instead of staying in Canada?”

Answer: “The real estate investing seminars I went to taught me methods for success that did not work in Canada”

LOL, they probably did not work in America either.

He never states what this “secret” methods actually are, of course, you have to attend a seminar and pay to get the “secret”.

I am going to reveal the “secret” right now – ‘Buy Low, Sell High!’. He mentions foreclosures and bank financing with no money of his own in the deal, so I assume it is a scheme where you buy a foreclosure with no money down and Banks rush to finance your “investment”.

The fact that real estate prices move in clearly defined cycles, just like the business cycle, is never mentioned, or he would have to tell you that real estate is a bad buy unless you are at the bottom of the price cycle, which only comes along about every 12-15 years.

“Take control of your financial destiny. Create your own economy!” First step – turn off the radio. Second step -don’t listen to idiots.

This guy is the crystal clear “market top has passed” indicator, if I have ever heard one. Too bad many sheeple will be listening on the radio and thinking “Wow, the road to riches!” and will get sucked in by this sham “expert”.

#28 Greg in Victoria on 06.06.09 at 11:27 am

A little off topic but here in Victoria there is a lot of talk about prices bottoming now… sales seem to be picking up despite a doubling of unemployment over the past year. Nuty pricing seems to be back as well – a nice but modest bungalow near me in Oak Bay just sold for 690K…. Its nuts.

Garth, when will some semblence of reality in housing prices return to the west coast??

#29 Bubble 'n Fizz(le on 06.06.09 at 11:34 am

The reason no one wants to buy the under-$100K places is location. In the desirable parts of the Phoenix area (North Scottsdale, North-East Phoenix) prices have fallen from over $400K to low $200K’s for decent condos. Property taxes are low and condo fees are typically $200/month. Barb the proof reader is talking through her hat. What she says might apply to some shithole in Mesa or South Phoenix, but not in the North-East. Also, the weather in May/June is variable, sometimes very hot but mostly mid-90’s and dry. Eat your heart out, Barb.

#30 MenWithHats on 06.06.09 at 12:03 pm

Ol’ Jerry mist be the only one working the ‘patch’ in spring and summer .
Drilling is dependent upon road conditions .
Almost all leases are drilled in winter after the freeze up as the majority of leases are in muskeg areas .
Drills don’t even move until the perma frost is present .
Story soinds apocrophyl to me .

#31 Dan in Victoria on 06.06.09 at 12:13 pm

The doctor is in, Disjecta membra,Cogita ante salis.

#32 Confused and fed up on 06.06.09 at 12:17 pm

How about having your trusted relative in AZ buy it for you under their name?
Would that create any tax burden for those who already own a house of their own?

#33 Tom on 06.06.09 at 12:42 pm

Hi Garth,

Advice welcome. I managed to put my girlfriend (now wife) off buying in Vancouver for two years (if i had a dollar for every argument about it I’d have an even better down payment for a place now). My reasoning was the sums didn’t add up and everywhere was simply overpriced.

Now, I feel somewhat vindicated as we would have bought very close to the peak and, as all we could have afforded then would have been a 1-bed place, which we would have wanted to move out of in two or three years, we definitely would have lost a pile of cash.

We moved back to my native UK for a while last year but are moving back to her native Vancouver early next year. Now she has started hinting about buying again but I still think $250,000 to $300,000 for a pretty average 1-bed in Vancouver is still too much plus fees and all that. We have a downpayment saved of $70,000 and I own a property mortgage free (my first ever place I bought over 10 years ago) in Brighton, England, currently worth maybe $280,000, which I rent out (or did until we moved back). So we could afford somewhere for 350,000 to 450,000 depending on how much mortgage we would want to take on and assuming I sold my UK flat (which I would kind of like to keep and rent out as it brings in $1000/m when I’m not using it).

Do you recommend buying next year or waiting? I think wait, rent and save until 2011 when the world is hopefully more stable. She says buy and points to interest rates and this seemingly inbuilt need women have to “nest”. I’m tired of arguing and am close to caving in. You are my last hope.

Cheers,

Tom

#34 poorguy on 06.06.09 at 1:04 pm

http://finance.yahoo.com/news/ALL-BUSINESS-Bondmarket-rout-apf-15457158.html?sec=topStories&pos=main&asset=&ccode=

Danger ahead!!!

#35 David on 06.06.09 at 1:25 pm

Remember the old saying good from afar but far from good. Ghost towns always have the benefit of offering relatively inexpensive housing, they also have no meaningful local economy and are stuck somewhere in the middle of God’s waiting room. How worthwhile a property is boils down to imputed rental value and operational overhead. Even if the property is used only a few months a year, there is the ongoing cost of taxes, utilities and maintenance which are incurred whether the property is utilised or not. Finding potential renters in an abandoned neighbourhood might be a tough slug, when people can go bust a window and squat for free next door.

#36 Finanzkrise on 06.06.09 at 2:31 pm

Garth – I saw that Greaterfool.ca was listed in the Vancouver Sun’s Saturday edition as an ‘essential resource’ for first time home buyers. The list, which had some other oddly unbiased real estate info, also included a link to the Case Shiller data

I’m sure Can West will hear from Rennie, Onmi MacBok and Co. about not printing honest and common sense information again beside their advertisements!

The Sun gave a strange description of this blog – some analogy about people sharing feelings of scorn (can’t remember the wording exactly…)

Unfortunately I couldn’t find the article online (maybe to be posted on Sunday?) and I don’t have a copy of the newspaper at home, but I’ll send the link if I find it.

#37 barb the proof reader on 06.06.09 at 2:41 pm

#29 Bubble ‘n Fizz said: “Barb the proof reader is talking through her hat. What she says might apply to some shithole in Mesa or South Phoenix, but not in the North-East .. the desirable part of the Phoenix area (North Scottsdale, North-East Phoenix)…. Eat your heart out, Barb.”

:) Uh, who’s talking thru their hat?? Bubble Fizz, you should try actually reading what someone posts rather than just shooting off your mouth and getting it wrong.

Ancala is THE North East, and well known for it. Try a map. So you don’t even KNOW where Ancala is…. it is exactly the most desirable part. You’ve made quite a fool of yourself. The community is gated, and it is located within another gated community.
Here ya go, learn something instead of needlessly jumping on posts without cause:
http://www.ancalarealestatesolution.com/26754-Scottsdale-Ancala-AZ-Gated-RESCmty.aspx

Our stay at a multi-million dollar home via Frank Lloyd Blvd was fabulous, despite tight security. Our hosts/friends, close it up after April because the 100+ weather is unpleasant, as do many, but for a couple of weeks in October we enjoyed being in the lap of luxury, and yet with the cheapest shopping I’ve ever experience. We’ve many Calgary pals who have been putting in multiple offers all over the Phoenix area, and they have been doing so for quite some time.. I mentioned that on Garth’s blog last year — they’re finding 3 bedroom, pool, etc. for under 150.

When we were in Scottsdale/Phoenix the news shows talked about the decline in real estate prices.. saying it’s been going on, falling prices, for 17 (seventeen) years there.

So no thanks Bub Fizz, no need for me to eat my heart out per your blurt above.

I very much enjoyed our host’s multi-multi-million dollar mansion, and the Frank Lloyd Wright museum a few blocks away. It was all fun. So Bub Fiz does that mean you’ll be contrite and eat yours. Maybe just confine it to eating your young, seems more your style.

#38 . . . fried eggs and spam . . . on 06.06.09 at 2:45 pm

In line with #1 Dodged-a Bullit-in Alberta on 06.05.09 at 11:09 pm re: the lack of water in most of the western US states, and in keeping with ever-rising food prices this doesn’t help matters at all. — http://tinyurl.com/r5ztkp

Seems only a matter of time before the sharks (lawyers) in DC use NAFTA as a means to take Canadian water. I certainly don’t object, but it would be nice if they leave us sufficient to look after ourselves.

I wonder how much it would cost to set up several desalination plants across our three coastlines. We may / may not see them in our current lifecycles, but they would be of immense benefit to future generations.
——
It is well-established that the one of the major reasons for the loonie’s, oil, precious metals / commodities, etc. rise is due to a fast-slumping US dollar. But what if the pound falls off the cliff, hand-in-hand with the buck?

Second link is a 2:20 clip of the buck. — http://tinyurl.com/onjczs /\ http://tinyurl.com/qqs6dp
——
In May ’08, unemployment was 4.5%, which, for all intents and purposes is full employment. In less than 14 months, it has jumped by seven per cent and with summer tourism not nearly as likely to be as good as before, that figure will continue climbing.
——
Brief interview with Celente, A couple of out-takes follow. — http://tinyurl.com/kob5r5

“It’s the end of the world as the Greater Depression hits after 2010’s failed ‘W-recovery’ . . . as what waits for us in 2011 hits with the force of a Katrina financial hurricane.”

“Mr. Celente’s forecast on our impending future is based on his study of history. He says we (not citizens; govts.) are bent on destroying our currency, bankrupting our government, and unleashing a violent citizen-against-citizen eruption as the economy collapses into chaos and marshal law fascism.”

#39 barb the proof reader on 06.06.09 at 2:51 pm

Funny how people miss Garth’s point. Buying in unknown territory with “just enough” to do it, is just the same as any of the other endeavors that have people going broke or in trouble. They don’t see or don’t know the dangers and hidden costs. They go ahead anyway, forgetting they could easily get into trouble. Ultimately the ‘unforeseen’s catch up with them! Garth is putting a lightbulb on before they naively stumble in the dark. Owning property elsewhere sounds great, but you better have money, and even more to burn.

#40 Shifty on 06.06.09 at 3:04 pm

The business, tax and regulations structure in the US is so completely different from Canada that an investor needs to be very cautious. A Canadian company I worked for back in the 80’s decided to do business in Washington State, they got slaughtered down there mainly because they didn’t understand the regulations and do their home work. Garth is right and has only touched the surface of a few pitfalls. My suggestion is talk to an American before investing down there and bring lots of Jack Daniels.

#41 Future Expatriate on 06.06.09 at 3:24 pm

Let’s see… most all of the wallboard ripped off the walls…. all hose pipe ripped out just for the heck of it… water damage from overflowing tubs and sinks and stopped up toilets before the bank cut off the water… no electric wiring (ripped out and sold as scrap copper)… all molding and flooring stripped, cabinets torn out, no appliances, air conditioning units ripped off roof, electric meters ripped out and long gone, smell of urine and feces everywhere (in the walls) plaster of paris poured down all the drainpipes, raw roadkill thrown into holes at tops of few walls with intact wallboard to rot, I could go on but you get the idea.

There are a lot of things angry foreclosed people do to houses when given half a chance and they know they’ll never be found south of the US border.

Better do a full walk-through with a real expert before snapping up one of those “deals”.

#42 Future Expatriate on 06.06.09 at 3:27 pm

#28 “When will some semblence of reality in housing prices return to the west coast??”

When the dead cat hits the ceiling and bounces straight back down to the ground twice as fast in the final messy splat.

Which should be in about a month; maybe two.

#43 Bobby on 06.06.09 at 3:43 pm

For #14 and the Victoria Real Estate market,

Have a look at today’s TC and the real estate section on canada.com.

Victoria prices are coming down as unemployment is going up. No, that 800 sq ft new home in Langford is not worth $200k.

Look at the messanger, not the message. I have yet to see a realtor say that prices are dropping but the statistics say otherwise.

If you have a look at the real estate graphs, we are follwing the US to the letter, except we are 18 months behind. Just wait until rates rise here as they must.

Yes, it is going to get ugly!!

#44 JO on 06.06.09 at 5:06 pm

Tom, I am engaged and face the same BS argument that we have to buy. I have convinced her to wait until end of 2011. But truth be told, if things pan out the way I see em in the next 3-5 yrs, I will convince her to wait until 2012…and even that is too early. These false low rates, which have made the Fed and other central banks look good even though it was the bond market (long end of the curve) that drove the rates that low as many traders are looking into selling their long bonds to the moron central banks at inflated prices due to QE, will end…i am expecting a major bond market bear starting around this fall and lasting into 2011…whether we have inflation or deflation (deflation more likely long term), the bond market has a noose on the economy…if/once the bonds start dropping in prices and interest rates start rising rapidly, the housing market should easily collapse.

Imagine, by the end of 2010, people renewing mortgages at 4.5-5.5 needing to pay at least 8-10 % and not being able to sell without being underwater or wiping out their “equity” (Imaginary amount)..also, add in the rising unemployment and lack of new sales due to the rising rates, and you have the recipe for a catastrophe…housing has already wiped out many people in western europe and the US, and it is set to do that here by 2012.

More than any chart or stat, the best way for you to know it is the wrong time to buy a house is the fact that almost all everyday people, economists, and financial people argue very aggressively that it is the right time to buy RE, and attack anyone who disagrees…this extreme optimism toward RE is the best sign RE has passed its peak and well on its way to a drastic fall.

So i recommend you wait. Buying anything in Canada, especially in Vancouver, is a disaster in waiting. The “rates are at record lows and we should buy now because if rates rise and prices drop, the cheaper rate is better” BULLSHIT argument will blow up in these sheeple’s faces. There are some great online calculators that help chose between different mortage and rate scenarios to compare…go to meridiancu.ca and click life events calculators to the bottom right..

Wait, wait, wait.
JO

#45 Sean in E-Town on 06.06.09 at 5:22 pm

*whimpers looking at those asking prices* When the hell are we gonna see those numbers up here on even a one bedroom apartment, Garth? I imagine mortgage rates will be immaterial by that time, as I’ll be able to buy a 50K place with cash in 2 and a half years time… as, uh, you know, totally over owning real estate as I am… yeah.

When?

#46 timbo on 06.06.09 at 5:48 pm

laugh your head off, last minute is classic…

http://www.youtube.com/watch?v=KWu-efNN8PM&eurl=http%3A%2F%2Fjs%2Dkit%2Ecom%2Fapi%2Fstatic%2Fpop%5Fcomments%3Fref%3Dhttp%253A%252F%252Fglobaleconomicanalysis%2Eblogspot%2Ecom%252F%252F%26path%3D%252F2009%252F06%252Fbankrup&feature=player_embedded

#47 Da HK Kid on 06.06.09 at 6:07 pm

Areas with eroded tax base will suffer eroded services.

Let’s start by imagining what happens when you call 911 and nobody shows.

I believe that these areas need to be ghost towns as it will be the only way to deal with the oversupply of housing that will plague the US for years to come.

#48 TheFirstRick on 06.06.09 at 6:19 pm

#28 Greg in Victoria on 06.06.09 at 11:27 am A little off topic but here in Victoria there is a lot of talk about prices bottoming now… sales seem to be picking up despite a doubling of unemployment over the past year. Nuty pricing seems to be back as well – a nice but modest bungalow near me in Oak Bay just sold for 690K…. Its nuts.
===========
Give it up Greg. Nothing short of an extended nuclear winter will make housing prices affordable in Victoria.
There are no working middle class people buying houses in Victoria unless there is a substantial infusion of cash from outside sources, legal or otherwise. Greg, you sound like me, born 20yrs too late. LOL

#49 Asa O'Really? on 06.06.09 at 6:20 pm

A person who tags themselves as “Bubble ‘n Fizz(le“ has been banned from at least one other blog by their own admission. I’ll copy one post –

To set it up, “Bubble ‘n Fizz(le)“ is suspected as a realtor on the website below and makes this blog comment-
“I’m not a realtor and I killed my blog when I realized my audience consisted of several basement-suite dwelling juveniles with nothing better to do than pick their noses and shout “Ha Ha!” at my examples of RE idiocy. I have found it more entertaining to provoke howls of outrage from you bears as a bull-provocateur. Of course, you can ban me (like Greg did from his blog), but you’ll get fewer “s[]itting pretty” posts to laugh at, so you choose. -Sitting pretty (for it is she)“

““

I’m just passing this along for Mr. Turner or your readers I guess, so they know you get that sort of problem.

here is where the above quote came from but there are more and in other places
http://househuntvictoria.blogspot.com/2009/05/implications-of-rising-interest-rates.html

Regards,

Asa

#50 TheFirstRick on 06.06.09 at 6:24 pm

#32 Confused and fed up on 06.06.09 at 12:17 pm How about having your trusted relative in AZ buy it for you under their name?
Would that create any tax burden for those who already own a house of their own?
============
Yeah, tax evasion in the USofA. THEY don’t take that too seriously down there. LOL!!!

#51 Guardia Civil Tricornio on 06.06.09 at 6:42 pm

Floating off topic

http://news.bbc.co.uk/2/hi/business/8085551.stm

#52 Dawn in Calgary on 06.06.09 at 6:58 pm

Looking at this graph again — since RE is ‘local’ where does everyone figure their respective markets are?

http://www.marketoracle.co.uk/Article9372.html

Calgary? Return to ‘normal’ — definitely. They can’t see the cliff coming and are driving full tilt.

#53 why_bother on 06.06.09 at 7:30 pm

http://www.calgaryherald.com/business/real-estate/Buyer+hesitates+ends+losing/1668742/story.html

#54 nonplused on 06.06.09 at 7:39 pm

#33 Tom

I hope you kept the place you have back in England nicely sequestered by a prenup. I know, I’m a hopeless romantic.

As far as the real estate argument goes, I’m on your side. From the negotiating in marriage point of view, well, the dudes over at MarriageBuilders.com argue that married people shouldn’t do anything that both partners don’t enthusiastically agree to. It doesn’t sound to me like you are very enthusiastic. Your vote counts too. If she shows you the door because of it, well, that’s one of the things you want to get out of the way sooner rather than later and especially before you pop out a couple of kids.

#55 Dawn in Calgary on 06.06.09 at 8:32 pm

Re: #52

Vic Cotton is a mortgage broker who worked for Petland for 26 years prior to becoming a mortgage expert and ‘bottom of the market’ caller,

http://www.linkedin.com/in/viccotton

#56 Live Within Your Means on 06.06.09 at 8:57 pm

#20 David Bakody on 06.06.09 at 8:52 am

One or 2 family members proposed that the rest of the family buy our Mom’s place – actually a cottage – (& rebuild as a family getaway) half hour drive from Hfx. on the south shore. Faces the bay across the road. My DH said NO way as he perceived future conflicts amongst family members. A bro ended up buying it, not so much for the house, but the land. He still lives in it tho. My sis & I took out a mtg. on it for $25k in ’77.

#57 Bottoms_Up on 06.06.09 at 9:30 pm

from post #53:

“So for those waiting for the bottom, it seems to have come and is sailing away.

Now, I’m not saying the deals are gone. That would be an incorrect statement.

There are great deals to be had at still historic prices–but there is no bottom to wait for. Get in now, as your property will only increase in value–and the interest rate you see now will be gone soon.”

#58 Live Within Your Means on 06.06.09 at 9:31 pm

#24 barb the proof reader on 06.06.09 at 10:46 am

Barb – you have a way with words :-) Heard about those temps in southern AB. Climate change – nada :-) Re lilacs – I’ve 5 huge bushes & been cutting them for us & giving them away. Last eve my DH’s friend’s daughter (7 yo) was doing summer saults (?) in the backyard and smelling flowers & then came upon the lilac shrubs. It was SO heartening to me to see someone so young so enthusiastic about gardens & nature. She was in the veggie garden sifting some clumps of soil with her hands. Her Mom said she just loves anything to do with plants & nature. I extended an invite to her daughter to come help me with my gardens. Maybe I can instill in her a passion & at the same time rejuvenate (?) my knowledge of all the plants that I grew over the years.

#59 Jonathan on 06.06.09 at 9:33 pm

#34 poorguy..

good article

#60 Soylent Green is People on 06.06.09 at 10:00 pm

Just ask Twist about Phoenix:

http://housingdoom.com/

twist says:

June 1st, 2009 at 6:32 am
MikeC-

Housing prices in the Phoenix area have fallen to levels below my original price goal to buy. For a long time Mr. Twist and I joked about buying the home we built in 2002 and sold in 2005 as a REO- for less than what we paid to build it.

Our buyer was a small commercial developer who promptly went out and got a HELOC on the place, so I suspect the opportunity will come up. Until the dust settles though, I’m comfortably seated here on the fence with my popcorn and soda. It will be awhile.

#61 john on 06.06.09 at 10:06 pm

Garth,

Many are looking at the above US scenarios you outlined expecting the same to happen here and that they will be able to pick up a home for $50K or so. This is so misleading and it is why many begin believing in you and eventually end up questioning and doubting you. Afterall didn’t you say there would be no spring market this year…oh yeah but the market is good due to cheap rates. Did you not forsee the rates falling like a rock given what was going to unfold?

I have predicted a 15% average national peak-to-trough decline, and that is still my expectation. I can’t help people being too careless to get it right. Including you. — Garth

#62 POL-CAN on 06.06.09 at 10:22 pm

An interesting economical history lesson via a ficticious conversation between Timmy the Tax Cheat and Mr. Cheng :)

Again via TAE

http://www.itulip.com/forums/showthread.php?p=102436#post102436

A must read

#63 Jonathan on 06.06.09 at 10:40 pm

Book review of Sheeple

“Look who’s bleating now” (Garth Turner)

http://www.theglobeandmail.com/books/look-whos-bleating-now/article1170701/

#64 me on 06.06.09 at 11:05 pm

Toronto appraiser Barry Lebow, of Lebow Hicks Ltd., said the Canadian real estate market has nowhere to go but down — no matter how much cheap money is

thrown at consumers. These days he’s taking the conservative route when assessing the price of homes because he doesn’t want to face the wrath of a bank that has to foreclose on a house that was valued high and ends up selling for less than the mortgage placed on it.

“There are going to be tremendous changes in real estate… There are just not enough first-time buyers and the ones buying today, those people are not really buyers, You know what they are? They are renters of cheap money, variable-rate mortgages of 2.99%,” says Mr. Lebow.

“If mortgage rates were 8% to 9%, these people wouldn’t be buying. It’s an artificial market. One hiccup in the rates and it’s all gone.”

http://www.financialpost.com/news-sectors/story.html?id=1667499

#65 Nostradamus jr. on 06.07.09 at 12:08 am

>>>I have predicted a 15% average national peak-to-trough decline, and that is still my expectation. I can’t help people being too careless to get it right. Including you. — Garth<<<

So we’ve hit bottom?

..Your very own Ontario had that 15% drop…but now prices are recovering.

In fact, your own POS (power of sale purchase)…may have been priced @ 50% below market…but you are renovating it from the foundation up…that tells me you are spending a very pretty penny.

Are you admitting we may have seen the bottom?

Are you still expecting a major crash in Vancouver?

tia

#66 AppleCrunch on 06.07.09 at 12:22 am

The last thing you want to do is buy a house in a ghost town.

#67 . . . fried eggs and spam . . . on 06.07.09 at 12:54 am

“. . . to defy both common sense and the traditional laws of economics, . . .”.

A good (part) of a sentence; why would some stock markets be going up, others down, countries (like the UK) on the brink of collapse where others seem to be faring better?

The next two links are from different parts of the globe, but they essentially say the same thing — if one does not learn from history, one is doomed to repeat it. There were the Roaring ’20’s, followed by the crash then GD1.

We enjoyed the Roaring 00’s, now the piper is calling his / her loans in. Para. from first link, and the second is a chart which shows Latvia’s debts. — http://tinyurl.com/lmy3b2 /\ http://tinyurl.com/ogpxha

“BELLINGHAM – Nobel Prize-winning economist Vernon Smith draws some disturbing parallels between the events that led up to the Great Depression of the 1930s and the severe economic slump of today.”

Bankruptcies are one result from continuing job losses. Although American, the same applies here, Europe and most of the world. — http://tinyurl.com/rxyj94
——
Almost certainly this is way more ‘booga-booga’ hype, but look at it from another angle: A nuke does not have to land on Seattle, but on the SAF thereby triggering a massive ‘quake.

Add in the underground nuke facility at http://www.hanfordwatch.org/ , one or two active (but presently sleeping) volcanoes and there is the lead-in to some kind of war.

Hypothetically speaking, of course! — http://tinyurl.com/lupl9z

After which this article is for Nostradamus Jr. (dates to be modified according to the karmic speed of time becoming ever quicker) — http://tinyurl.com/asgutr

If this scenario plays out, it would be one solution to a 1/2 – 2/3 population reduction which the Bilderberg Group, Rothschilds (+ zionists), Rockefellers and others have long worked on.

On the other hand, it could also mean a major trade war between China and the US, which would lead to other military conflicts as well.

Also included are this pathetic, ongoing pandemic (false flag op.?), the possibility of Cdn. troops staying in Af’stan ’til 2015 (when the boomers here start drawing their CPP / OAS / GIS), and societal breakdowns.

Read the headline, skip the article and read the comments at the end! — http://tinyurl.com/me7tum
——
There may be another culprit to climate change! — http://tinyurl.com/os82eg
——
A few weeks ago, I posted a link which said that Portugal had decriminalized drugs in 2001, and subsequently had become a fairly stable country.

Now, Holland may follow the lead. — http://tinyurl.com/o6z3ot

#68 TS on 06.07.09 at 1:45 am

“third wave” of home foreclosures beginning to hit US housing market….

http://finance.sympatico.msn.ca/investing/michaelbrush/article.aspx?cp-documentid=20201810

with fourth and fifth wave just around the corner….

The current uptick in housing activity in Canada is based on unrealistic optimism… we’ve had the ‘false bottom’ in the equity markets… the real bottom won’t be hit until late this year or early next as the full impact of rising unemployment in the US and Canada begins to be felt. Look for unemployment in the US to top 12% and over 11% in Canada….

Potential home buyers should hold steady and keep their money out of the housing market for at least another 9 to 15 months.

#69 TS on 06.07.09 at 1:54 am

Interesting little ditty on page CL10 of the Saturday issue of the Toronto Star. One of the homes featured just sold for $583,000…just under the asking price of $588,888. Good news you say? Not really…. the last time this home sold it went for $650,000 in July 2008… only 10 months ago. The sellers have taken a $67,000 LOSS…. PLUS their real estate and legal fees…

With unemployment continuing to rise – expect the small real estate bubble we are experiencing in Toronto to break very soon….

#70 TS on 06.07.09 at 2:05 am

#14 rob on 06.06.09 at 4:14 am

Hey Rob…. look at housing prices in Windsor Ontario… 14% unemployment has a way of making house prices crash.

#71 TS on 06.07.09 at 2:08 am

Some homes in Windsor Ontario are selling for less than the price of a new car…..

http://ca.news.yahoo.com/s/capress/090324/national/windsor_home_prices

#72 Jeff Smith on 06.07.09 at 2:21 am

Don’t forget Arizona is quite near America’s next great war; Mexico.

#73 van man on 06.07.09 at 2:30 am

Has anyone noticed that Coast Capital is handing out blue suckers in the shape of a house to new mortgage applicants.

The irony struck me as almost cruel.

#74 Barb the proof reader on 06.07.09 at 3:05 am

#58 Live Within Your Means

Live, I was just thinking tonight I hope I get a chance to sit out and take in the lilac aroma at least one more time before the blossoms pass… with a high of 7 we didn’t venture out at all… brrr. Tomorrow I’ll just quickly cut some for the house. And, I’ll get serious about picking up some bedding plants. I think we had this conversation a year ago :) I do mostly pots on the deck for the past many years — lotsa flowers, herbs & salad ingredients.

I think your friend’s young daughter will one day remember helping you out in the garden with fond memories..
…. but, brush up on those plant names! :)

#75 Vancouver_bear on 06.07.09 at 4:02 am

#22 Nostradamus jr. on 06.06.09 at 10:19 am

I am renting and if prices will not go lower, I will move somewhere else, as I don’t really care about “the best place on earth” there are gazillion other good places in Canada and don’t tell me that it snows in most parts of Canada. I lived with the snow before and will live now if needed. Actually I found it quite depressive here with having 180 rainy days average a year, so how is it “the best place on earth”? Correctly would be to say the most humid place on Earth. The reason why I don’t wanna buy in Vancouver (though I can afford it with the current interest rates) is simple: it’s just makes no sence to put my family in the situatuin that we will not be able to afford a new pair of underpants if we buy a house in Vancouver (and nights out will be only in dreams). I hate “shoe boxes in the sky” and will not settle for anything less than a house will that be in Vancouver or somewhere else. I wanna live a life and see the world instead of feeding greedy bankers and realtors….

#76 Sail1 on 06.07.09 at 5:47 am

http://www.financialpost.com/story.html?id=1667499

“There are going to be tremendous changes in real estate… There are just not enough first-time buyers and the ones buying today, those people are not really buyers, You know what they are? They are renters of cheap money, variable-rate mortgages of 2.99%,” says Mr. Lebow.

“If mortgage rates were 8% to 9%, these people wouldn’t be buying. It’s an artificial market. One hiccup in the rates and it’s all gone.”

#77 Rob in Onterrible on 06.07.09 at 6:07 am

Wow, seeing those low prices in Arizona makes me wonder: can you buy the house there and bring it to Canada by unbolting it from the foundation? Could make some $ selling these houses in Fort Mac or Van. Sure you’d have to pay $30,000 for bringing it here but it sure is cheap. Then you sell the land sans house later. Any thoughts?

#78 hagbard on 06.07.09 at 8:05 am

#77 – Rob in Onterrible

http://www.nickelbros.com/

Enjoy your new business.

#79 mikewasanengineer on 06.07.09 at 8:42 am

Garth et al:

Why things in Ontario are going to get much worse. Why the Ontario government needs to help more. Give some cash to the people who need it.

What is happening with some friends of mine. I have at least 3 times as many people who I know that are in a similar position:

Hi Mike,

It is unfortunate what is going on in automotive industries right now.
I was lucky to find a job after 4 month but my husband is unemployed for almost 8 months and can not find anything. With both being without job it was not funny.

And:

I’m also still looking, ever since Polymer Tech went out-of-business.
I’ve only had 1 interview so far, it is a TOUGH market.
Good luck;
Peter

And

Hello Mike,

I’m doing well. I’m unemployed as well. Sorry but I do not have a contacts that will help you. I have been working with recruiters with no luck.

And

Mike,

I now have my own company but there is only 8 people here. Unfortunatly nobody is hiring. If I hear of anything I will let you know.

And:

Hey Mike,

I hear you loud and clear my friend. I too need a job desperately I might add. I hav ehad no luck what so ever, it is crazy. Call me some time and we can get together for a coffee and discuss stragi

And

Hey Mike

I have just been laid off from Linamar. They are laying people off like crazy

For those people who work right now and you have a decent paying job, hang on to your cash….1930’s depression is here right now in Toronto. No one knows where it is going to go, no one. Not Garth, not the PM, not Obama.

The home prices above, could easily develop here, and may do so. Remember, something is only worth something, if people are willing to pay for it. If no one wants it, it is worthless. Supply and demand. Right now RE is in excess supply, driven by speculators, even today in GTA. Some people here are going to give up on home ownership, and once that starts to happen, prices will drop. Garth is correct on this one, make no mistake.

Oh, and give generously to the food bank, cause a lot of people are going to need it this winter….

#80 Toronto C9 Renter on 06.07.09 at 8:54 am

#77 Rob said: “..can you buy the house there and bring it to Canada by unbolting it from the foundation?..”

Rob, excellent thought, I had the same idea, but then it occured to me might encounter a couple of problems–

1. The speed limit in some states is only 55, so it would take a couple of days to tow it up on Intestate 15 — who has that kind of time?

2. Would likely get pulled over at the border — the border guards would make you open all the closets, kitchen cupboards etc, searching for contraband

3. Once in Fort Mac, what if the neighbors don’t approve of the color of siding, curb appeal etc? — then its all the way back to Phoenix, which is going to take another couple of days, not to mention the gas consumed — and remember its all in US dollars too!

;)

#81 Bill-Muskoka (NAM) on 06.07.09 at 9:12 am

#24 barb the proof reader

Yes, the Coyotes are a serious problem, and so can the Pumas (Cougars, Mountain Lions) be.

I laughed at the Scottsdale folks. They would buy a 1-4 million dollar place, park their Mercedes or BMW in the driveway. All very impressive from the OUTSIDE! Inside, there was seldom any furniture, no food in the fridge, and the kids vegetated on computer/video games as the entire family did their tokes. What a wonderful life, eh?

Mesa is interesting with its ‘mixed use’ zoning laws. Huhe McMansions right next to modular homes, or actual trailer parks. It is a mix or Mormons and morons. Personally I think Spock said it right ‘They did too much LDS!’

Glendale is one of the nicest areas in the Valley. Home to Luke AFB and the main training place for F-15 and F-16 pilots. You can stop on your way out to watch the jets at the real and original Roadkill Cafe! Yes, and the food is very good, although not always identifiable. ;-)

Tempe is a university town with ASU. Then there are the newer subdivisions built down towards the drive to Tucson.

The Southside of Phoenix is like the Southside of Chicago, except it is Chichano. Then one can mosey out to Apache Junction where the wildlife truly runs rampant.

One must travel to Tortilla Flats to see what rough life was all about in the pioneer days. Watch out for the creek you have to drive through on the road through ‘town.’ LOL

Now, I read that someone thinks a Phoenix built house could be moved to Canada. One clue ‘SNOW LOAD’, with 2 x 4 roof trusses spaced on 24 inch centres and 3/8 sheating you better be ready to have a winter wonderland in your living room and bedroom. The substandard 2 1/2″ walls will also surprise many.

As to finding a home for $50K in Canada, that reminds me of the deal the new owners of a Peter Pocklington apartment complex in Yellowknife tried to do. They offered to sell the apartment units as condos for that very price. The uproar from the local realtors could be heard in Edmonton. It would have opened the door to hundreds of people to own a home, but by God, that can’t be allowed. The then AFN Chief lived in a very modern $500k home. A trailer, not a modular home, went for $160K.

What is wrong with people? Have they drank to Kool Aide for so long they forget what a home is for? Apparently the ones in Vancouver have, either that or the sea air is a hallucinogen?

Anyway, spent yesterday doing some yard projects, and it is raining and cool today. The flowers are beautiful in our garden, and we have a pet Robin that comes up to within afoot of us while we work. Also have several new ones getting ready to hatch in the next outide our living room window. Sure beats condo prison, eh?

#82 Seilfworcehtsa on 06.07.09 at 10:50 am

A milion manufacturing jobs gone, high unemployment a grave concern, Ottawa burdened with humunguous debt, affordable rental properties hard to find and the average price of a single family home nearing $6,000. Welcome to 1946.

#83 Nostradamus jr. on 06.07.09 at 11:46 am

#75 Vancouver_bear

…I do the Grouse Grind/BCMC 3/4 times a week.

…Within a 10 minute drive, I can walk a different trail a day for a month with my dogs and not do the same one twice.

…I can ski 3 different mountains on the North Shore.

…I can golf three public courses on the North Shore.

…There is no shortage of drinking water or electricity.

…I don’t need to build myself a bunker.

Please name one equal location in the world to the North Shore.(North Vancouver/West Vancouver)

tia

#84 dd on 06.07.09 at 1:00 pm

Nostradamus jr.

… and yet like other markets Vancouver pricing in heading down down down.

DD

#85 dd on 06.07.09 at 1:03 pm

.#65 Nostradamus jr.

… So we’ve hit bottom? .. Are you still expecting a major crash in Vancouver? …

You tell us Nostradamus.

You heard it first here …. well?

#86 justjanice on 06.07.09 at 1:26 pm

We need mortgage reform. I’m okay with low down payments – I really don’t think that they are neccessarily the source of the problem. What I’m not okay with is giving insurance on tremendously risky mortgages, and when people are buying homes at 5 or more times their annual incomes, at historically low interest rates – that is a tremendously risky proposition. I’d think that the amount of a mortgage should never exceed 3 to 3.5 times the annual income of the mortgagee. Any more leverage is a simple recipe for economic disaster with an automatic ‘replay’ built in.

Now:
Low interest rates, insane multiples of income approved and insured….

Medium term:
Interest rates rise, homeowners begin to default as their incomes can’t handle the payments, bankruptcies and divorce rates rise, CMHC bails out the banks, economy faulters…

Medium to Longer term:
Government feels it must drop interest rates to stabilize the economy and the cycle repeats.

So the most effective tool in the arsenal against economic downturns becomes the most effective tool in perpetuating a boom-bust cycle. If mortgages were limited to a fixed multiple of income (in addition to the 40% rule), then when rates went down, people would see they’re payments drop, but couldn’t go out and leverage themselves to high heaven and would actually have to spend the money saved elsewheres (either by investing it our spending it on other goods and services), and when interest rates are risen people would have higher but manageable payments.

It’s really a very basic set of economic principles at work, it’s too bad our government (despite being led by someone trained in economics) doesn’t have a good grasp of the dynamics at work.

#87 Barb the proof reader on 06.07.09 at 1:30 pm

Bill M-NAM #81, saw much in AZ of what you mention. Hopefully we’ll go back some day to check out more. It’s incredibly pristine (read: rich) some places, yet so haggard elsewhere — but overall a very interesting place with unique beauty.
Phoenix, etc. is vast, but some newer road systems get you around efficiently. Sedona reminded me of Kauai, minus ocean, but then so do parts of Montana… small, quaint, tourist town America.

Ex-Pock complex in Yellowknife story….interesting — yes, heaven forbid those people should actually be able to own homes.

Was just reading UK news item about customers of Nationwide, biggest building society temporarily unable to access online accounts, altho’ should be fixed today.
Anyway, it got me reading about Building Societies..
Seems the “good” ideas, ie: mortgages, fire & farm insurance, concepts started with good intent to help real people help each other — get slowly stripped of their original intent (helping regular people) when, over time, greedy interlopers manipulate and loot them. It’s like a slow-motion, stagecoach-robbery… done carefully & legally.

The Robins in our yard so tough. How tough are they? They take on the huge Magpies in our yard who are 2-3 times their size. People should be so brave as a Robin.

#88 OttawaMike on 06.07.09 at 2:05 pm

Perhaps this is the most accurate economic indicator, the Hooker Price Index (HPI):
http://www.thestar.com/living/article/646871

#89 Finanzkrise on 06.07.09 at 2:20 pm

As a North Vancouver resident (renter), I agree with Nostradamus jr. that the North Shore mountains are spectacular, that’s why I moved there from Ontario.

However, this does not mean that house prices can’t correct or even crash. The current absolute house valuations are a monetary phenomena (an unprecedented credit expansion for the past 25 years which accelerated in 2003).

One could argue that North Vancouver house prices will remain relatively higher than other areas as it is very desireable, but the absolute prices could fall much lower than today, due to a reversal of the credit expansion.

Keep in mind that North Vancouver was still a great place 10 years ago when house prices were less than half of today’s bubble prices!

#90 im-poster on 06.07.09 at 2:25 pm

For those interested, and Garth your book is called “After the crash…” Well after reviewing Harry S Dent’s newest book, “The Great Depression Ahead” it seems we have not hit the big leg down yet. He predicted in his book oil would have one last spike up to even $180 a barrel before a final crash in the market, and in oil, or vice versa that would bring everything to new lows. He calls dow to a maximum low of 3800 Oil will go back to norms of 20-30-ish a barrel as deflation takes hold over the next decade. We just went through an inflationary period, n ow its deflations turn. things will turn around in about 2020. He forcasts that due to a 500 year cycle we are in the middle of, this depression will not be as severe as the one in the 30’s that lasted about 12 years. So will this one. We will come back even stronger, and thanks to the echo boomers ( baby boomers kids ) we will rebound stronger than ever and the technological advances in the next 100 years will blow away the last 100.

#91 Jonathan on 06.07.09 at 2:45 pm

#83 Nostradamus Jr

Why Eastern North America is the future of the world..

1. Most diversified economy on the planet.

2. Best transportation system / infrastructure in the world.

3. Access to over 300 million middle class individuals within 12 hour drive.

4. Largest freshwater reserves in the world.

5. Toronto, NY and Chicago are the largest financial centres in North America -by far.

6. Culture – it started forming before anyone even set foot in the west.

7. Largest nickel reserves in the planet – hybrids anyone? Not too mention, largest producers of vehicles per captita in the world.

8. Largest concentration of universities in the world.

9. Farther away from Asia and closer to Europe (safety points) – no bunkers required.

10. Specifically Toronto – 1 hour away from 2 of the world’s longest fresh water beaches – wasaga beach. 1 hour away from Blue Mountain Ski Resort.

Invest in the East. You heard it here first.

#92 Chris S. on 06.07.09 at 3:57 pm

Water security is a growing concern. The mountain ranges that supply all of the great rivers (Colorado, Rio Grande, etc.) have been declining for decades. To their credit, many cities built where man ought not to be living have undertaken massive conservation efforts. However, conservation only takes one so far. Eventually the baseline demand for water will exceed that available from local aquifers, reservoirs, and the rivers that feed them all. It doesn’t take much imagination to see how already-existing disputes will grow until violence or something equally as unpleasant breaks out.

Stay away from the desert.

#93 AndyB on 06.07.09 at 5:52 pm

#53 why_bother -thanks for the link.

It has become quite apparent that the real estate industry needs to attempt to get people off the fence to keep feeding the machine. If there were not a problem (with the machine), I don’t believe we’d be seeing articles like this. If times are supposedly so good as they say, they wouldn’t need bother with the fence sitters.

#94 john m on 06.07.09 at 6:43 pm

the sheeple are bleating,but they believe the sheep herder..why worry about the economy after all the west is in..the herder told them so…since he came to power there have been multi problems but its all someone elses fault..the sheep purr loudly and kick up the dirt and scream about past governments just as the sheep herder said…the economy is not his fault nor is the 13 billion surplus he threw into the wind trying to secure votes for his little sheeple so they could enjoy his majority…oh yes he is there for you and the billions he has spent on bailouts was all for you also..after all he had to do it the opposition made him??….now is that not leadership at its finest?….well the west is in…but id take a good look at phoenix…because you have all the elements required to follow suit…after all its all someone else’s fault :-)

#95 Glenn on 06.07.09 at 6:58 pm

I love it! The very same Canadians (that special breed of Albertan Ive come to know and loath over the last few years) that sneer at Americans in Canada, do all they can to make life as uncomfortable as possible for any American visitors, ALSO feel its perfectly acceptable to take advantage of the housing situation in SW America.

The only thing missing is some childish Calgary type bitching about American Imperialism at the very same moment he signs a mortgage for a REO repo in Vegas. The perfect blend of hypocrisy, arrogance, and ignorance…Classic Canadian!

#96 Nostradamus jr. on 06.07.09 at 7:12 pm

>>#91 Jonathan

Why Eastern North America is the future of the world.

1. Most diversified economy on the planet.

hmmmmm…Financial (For as long as N A citizens will allow the crooks to continue)…Snow Removal…new GM (“Government Motors”)

2. Best transportation system / infrastructure in the world.

hmmmm…no autobahn, no hi speed rail

3. Access to over 300 million middle class individuals within 12 hour drive.

hmmmm….who’s 401K’s and RRSP’s have been cut in half.

4. Largest freshwater reserves in the world.

hmmmm….Lake Erie/Ontario?

5. Toronto, NY and Chicago are the largest financial centres in North America -by far.

hmmmm….proven crooks, all of’em

6. Culture – it started forming before anyone even set foot in the west.

hmmmm….Like French culture, all stolen, begining w/ the Napoleanic Wars thru Colonialism and WW2?

7. Largest nickel reserves in the planet – hybrids anyone? Not too mention, largest producers of vehicles per captita in the world.

8. Largest concentration of universities in the world.

hmmmm….MBA’s have suddenly lost their lustre…haven’t they.

9. Farther away from Asia and closer to Europe (safety points) – no bunkers required.

hmmmm….Asia is where the future’s at, Europe is dead, thanks to non progressive, large family immigration.

10. Specifically Toronto – 1 hour away from 2 of the world’s longest fresh water beaches – wasaga beach. 1 hour away from Blue Mountain Ski Resort.

hmmmmm….Wasaga Beach…#1
hmmmmm…. Blue Mountain Ski Resort…that’s a Bunny Hill…lol

Invest in the East. You heard it here first.

Seriously, the North Shore, North/West vancouver have like 150K population in total.

…This is a Real Estate Blog…I stand w/ the premise there is no better spot for Canadians to live than the North Shore…premium $$$ will continue here and in fact rise when properly assessed.

jmo…Garth missed the boat with this spot when he threw all of BC into one pot.

#97 Increasing that 1% on 06.07.09 at 8:15 pm

# 83. Nostradamus, Jr.

Ontario is a great Province, you know it, and you miss it.

#98 . . . fried eggs and spam . . . on 06.07.09 at 9:07 pm

There IS something positive to be said for socialism! — http://tinyurl.com/le7ygy
——
This relates to schizophrenia, so as one schizophrenic said to the other: “I’m fine. How am I?” — http://tinyurl.com/q9k5gg

“Plunging bonds represent surging interest rates … Surging interest rates are pure poison for corporate profits … And any damage to profits must be reflected in plunging stocks.” . . .

. . . and here are the surging interest rates with equities; both are getting hunky-dory with one another. But there is a fly on the ointment. — http://tinyurl.com/nbt7j3

“. . . the average length of time from high to low in the equity markets following a collapse of credit is 2.5 years (typical recessions 1.5 years), this is no typical recession. . . . no REAL solution to the debt problem has been implemented, we are likely to encounter even more severe problems in the future.”

The world’s economies stand at the brink, happily singing to themselves “Should I Stay (and get better) or Should I Go? (jump)”.

Well, we’re in The Eye Of The (Tiger) Storm right now, so this is a brief timeout! — http://tinyurl.com/punqvl

One sentence from Mish’s site which clearly shows how silly this has become:

Flashback February 11, 2008 — White House: Unemployment to stay near 5%
——
What makes this interesting is that Israel has referred to the IAEA as “impotent”. Also (second link) India is trying to make nice with Pakistan again.

This may be due more to the massive oil / gas fields which Iran (Muslim) has and Israel (non-Muslim) doesn’t. Comments from wrh.com.– http://tinyurl.com/nzfpcv

“Bush made the same characterization about the UN right before we were about to invade Iraq. . . . Deal by deal, strategic military alliance by strategic military alliance, Iran is making it considerably more difficult for the US to think for one second that it can now have a real chance to conquer Iran’s oil.”
——
You can fool some of the people some of the time, but you cannot fool all of the people all of the time (except if sheeple have replaced people).

Swine flu and climate change are what sheeple BELIEVE, false flags. and normal cycles are what regular folk KNOW, so two links to peruse. — http://tinyurl.com/m7ynsb — and — http://tinyurl.com/63bzod

#99 TrendAnalyst on 06.07.09 at 10:01 pm

wow …. applications for mortgages in the GTA/Van have dropped off the ciff in the past few weeks. It looks like the first time buyers who have been holding off from Nov-Jan have finally been purged through the cycle and it looks like we’re back to the volume that we saw in the beginning of the economic crisis. Those who bought in the past few months will be kicking themselves by Dec 2009. Looks like Garth will be right in the 15% decline by the winter of this year. I’m calling a 20% decline in the GTA in May vs Dec median sales figures.

#100 CTM on 06.07.09 at 10:41 pm

Hey, if you move to Maricopa County, Arizona, be sure to pay those parking tickets!

http://www.youtube.com/watch?v=_1tfIKUZ0fY

Joe Arpaio awaits.

Mostly, of course, like all U.S. prisons, the inmates are mostly (80% to 90%) black folks. Justice?

#101 nonplused on 06.07.09 at 11:00 pm

#88 OttawaMike

I think I’ll stick with my very much more expensive trophy wife while I can afford her.

#91 Jonathan

To further argue your point, if we go back to basics, nations that have arable land and easy access to water based transportation always have an upper edge economically over nations that do not. What is the largest arable land mass in the world with the best river transportation system and port access? Lots of other raw materials to boot? It’s in the United States running from the eastern seaboard well inland and all the way from the Great Lakes to Louisiana.

Vancouver, on the other hand, has trees, impassible mountains, and very little arable land, but it does have a good port. A port only of any use via expensive rail and road transportation systems. These things cost a lot of money to build and operate, so the great inland river system of the US will rein triumphant eventually.

Canada is an anomaly. Forged by the CPR as a result of the government trying to circumvent the north-south trade that was evolving naturally in the free market, we still have 80% of our population living within a few hours drive of the southern border and do the bulk of our international trade south side. Anyone who thinks we are going to suddenly quadruple the rail capacity to Vancouver and trade exclusively with China has been smoking too much BC weed. The cost to build that transportation system through some of the most forbidding terrain in the world just doesn’t make sense.

Nostradamus, Jr. is living in a land locked isolated enclave which, while suitable for the socialists that live well there via taxing the death out of the rest of the province, can’t possibly be a destination for major companies with large regions of interest. 2 at capacity rail lines that probably never should have been built, an impossible Trans Canada highway, and an airport 3 hours away in traffic are still the only way to access the largest economy in the world. We have better access from Alberta.

And yes, for all the money spent, they now have the Coucahalla, which, of course, you have to pay to use. And which will get you to Kamloops or Kelowna. Nice spots to vacation. But even worse places than North Van to set up a business for all the same reasons but also having no port.

#102 Ricardo on 06.08.09 at 12:37 pm

Glenn at *95
Regarding your *comment*
Are you are attempting to create some confusion about what some powerful Americans are doing here, the wolves in sheeps clothing, vs regular Americans?
In fact Americans are treated very well in Canada.
But Americans who work for organizations intent on taking advantage of Canada, making Canada in their own image, and securing our resources, often doing it with stealth, insincerity or undue pressure, should be scrutinized over their activities that undermine this country. They’ve been doing it for 200 years. Most people know that.
Do you not know that or are you one?

#103 Vancouver_bear on 06.08.09 at 3:53 pm

#75 Vancouver_bear

…There is no shortage of drinking water…

Are you sure? Vancouver water reservoirs are heavily dependant on the rain, if it stops raining we are toast. I remember how Vancouver City hall was asking to conserve water, not to wach cars or water lawns….. then when it was raining very heavily in the fall about 2 years ago and crap was coming out of tap. I remember spending a few hours in the line to buy drinking bottled water in the DT Vancouver. Definitely not the best place on earth. I don’t care about hiking and other crap such as golfing and skiing, I am just not into that. I like summer vacations at the camp or at the lake shore. Do we have shortages of lakes and camping sites in Canada? BC has camping sites and lakes, but Canada does not end in BC. Crash is coming….you heard it here first, I predicted it in 2003.

#104 Tom Jeffries on 06.08.09 at 4:01 pm

Please give your head a LONG shake before buying ANYTHING in Arizona.

Sorry – in Arid-zona -the Narco wars of Mexico has led to a rash of gruesome murders and kidnappings for profit. If the Mexican economy dives even more, (** it will -with their dwindling Oil profits, cratering of tourism and a crushing public debt, and horribly skewed demographics – Pedro isn’t sending money home from that construction job in Miami anymore) added to the ever present corrupt and dangerous Society; desperate Mexicans are going to run to the Border, and it will number in the millions.

IF you buy property in the USA, you are limited as to what you personally, can do, to do upkeep etc. Strict rules for ‘aliens’
Heh, and would you want YOUR info enmeshed with those lovely folks at the IRS? I think not.

Suggestion to our 33 year old friend. Rent a place in the sun and enjoy it. If the roof falls in, you call the Landlord.

If you rent, you can try a different place, next year. No taxes. No upkeep, and no worries because even if you live on the Campus in Tempe… your property will lie fallow all summer, because the surge in rentals in Arizona Same thing has happened to naive Canadian folks in Nevada, Michigan and Florida. Tons of rentals have overwhelmed the dream of being ‘cash flow positive’. * And you won’t spend hours stressing about what is happening to your – ‘housingnvestments’

At 33 I would think one of those swell tax free savings accounts would be a must and fill it with great, under priced Gold and Silver stocks and other solid Equities based on Food, Healthcare and Energy. All the money you make within such an instrument is tax free.
Check with your licensed advisor – of course – but I would MAX your RRSP and put it in Canadian Gov’t short notes….gold and silver stocks – avoid ETFS.
Take some delivery of silver and gold and put it in your safe. You can actually buy stuff with silver, if the economy implodes. (*We came within hours of the end of our Financial system, last fall – it can and will happen again).

Don’t be tempted by the absolute “lie” of green shoots.
We just bailed out GM and zombie banks with peoples hard earned money, and so the next step is printing a gazzilion ‘dollars’, by the FED, then having that monetized, and the result will send interest rates to the MOON.

The ‘usual suspects’ are trying to con you out of what you have left.
They have spent our Grandkids and Great Grandchildren’s legacy.

Seems like Mr. Turner has NO AGENDA, other than to try and save as many people he can, from financial disaster.
Even in the deflationary depression of the Thirties -people actually had savings and they didn’t have a few credit cards maxed,a fancy leased car,and multiple homes. * My late Granny was a very frugal and clever woman, Bless her heart -years ago she told me of how the small garden plot saved the family from starving. As it was, in 1937, when Dad was 18 – he was 6’1″ and weighed 119 pounds.

The past 10 years has been an illusion, folks. Cheap money, is addictive – it’s like feeding a drunk rounds at the Punch Bowl.

IT’S OVER. Get smart, now.

#105 Vancouver_bear on 06.09.09 at 11:36 am

How to edit posts here?

#103 Vancouver_bear on 06.08.09 at 3:53 pm this post was a response to #83 Nostradamus jr. on 06.07.09 at 11:46 am

#106 Vultch USA — Greater Fool – The Troubled Future of Real Estate on 10.15.09 at 9:42 am

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