The deceivers


Here’s a puzzle for you.

How can a country’s housing prices go up – way up – when unemployment is at an 11-year high, manufacturing’s been decimated, its major car companies are bankrupt, its national airline bailed out, retail sales are plunging and its federal government’s finances have fallen off a cliff with the greatest deficit in history?

Answer: they can’t. Unless, of course, you’re the Canadian Real Estate Association.

CREA earned big headlines last week (as its chief economist Gregory Klump had planned – see what I mean here) with a new media release that was shocking. It said:
* House prices in May hit the highest point in history, eclipsing the previous record one year earlier – just 100 days before the global financial crisis hit.
* In a mere four months the national residential average price soared by 16.4% from its low point in January, for an annualized gain of more than 49%.

As the realtors had hoped, the MSM ran with this bomb, spreading the word that the recession is probably over and real estate’s back on its way up – perhaps forever. This was exactly the message brokers and agents across the country wanted to hear, so they could relay the news to clients – sellers who could now hold firm (or raise) their asking prices, and buyers who’d be urged to jump in and pay whatever was necessary, to avoid being priced out of a home for the rest of their lives.

Trouble is, the release was tainted. Misleading. Devious. Unethical.

The downfall of average prices, which economist Klump well knows, is that they can provide a completely false snapshot of reality, mistaking market momentum for market advance. In CREA’s case, the May average house price was incredibly skewed by a burst of activity in three of the country’s more expensive markets. But even there, sales increased, while prices were still substantially below those of a year ago.

* In Edmonton, 2,161 properties changed hands last month, a big jump of 18.7%. But the averge price of $326,332 was down 4.2% from May of 2008.
* In Vancouver there were 3,569 sales, a surge of 16.4% from a year earlier, for an average price of $583,674. That was 6.6% less than a year earlier.
* And in Victoria, where 836 houses found buyers, this 14% jump in sales came even though average prices were down 6.2% from May of 2008.

That romp in sales activity in three markets with some of the highest prices in the country pushed up CREA’s total national dollar volume. So, when it was divided by total unit sales, it yielded an average of $319,575 – the highest price ever, and about half a percentage point greater than in May, 2008, even though prices in those three key cities were lower than last year by about 5%.

That is why the conclusion of CREA’s president, Dale Ripplinger of Regina, is so suspect. “Strengthening consumer confidence, low interest rates and improved affordability are drawing buyers to the housing market across Canada,” he said.

Well, er, not exactly Dale. Sales volumes actually dropped in these markets last month from May ’08 levels:
* Durham
* Halifax
* London
* Gatineau
* Quebec City
* St. Catharaines
* Newfoundland
* Sudbury
* Windsor
* Winnipeg

In Toronto, sales were basically flat from a year ago and prices were down .6%. But in Ottawa, home of the biggest-spending federal government in Canadian history, house sales jumped 4% and prices raced ahead 5.5%.

In fact, there were some places houses were just flying off the shelf. For example the market has gone to boil once again in places like Brampton and Milton in suburban Toronto, where first-time buyers are scrambling to get their hands on new houses with 1.5% down and fat, low-interest mortgages. It’s an eerie replay of the scene we saw in the same places 18 months ago, when 40-year amortizations were all the rage. Now that the Bank of Canada has manipulated rates down to an all-time low, affordability has actually increased – even with 35-year ams.

In this context, I came across this interesting comment from Canadian Housing Price Charts:

The Bank of Canada continued to keep its bank rate at 0.5% through the month of May 2009 and suggested it will keep rates low through to the end of June 2010. Welcome to a Soviet style managed economy where a Canadian Conservative government is rigging the interest rates and increasing the public debt by handing over the tax paying public’s money to failed businesses all with a straight face. I get it now, the Conservatives have become the Liberals. There are no conservatives, there is no fiscal responsibility by our governors. A failed government is bailing out failed businesses. That’s an expensive vote buying proposition. Meanwhile the low short term interest rate is refueling the real estate bubble nationwide. We all know what happened 1-2 years ago when the bubble blew up. It popped and prices plunged 16% in Vancouver, 18% in Calgary, 19% in Edmonton, 19% in Toronto, 9% in Ottawa and 3% in Montreal.

As you may imagine, the gulf is widening between what most Canadians think is happening to the economy, and actual developments. Cheerleading economists, self-dealing realtors and whoring media outlets have allowed the perception to spread that conditions (as CREA’s release stated), “have returned to pre-recession levels.”

This is false. There are record numbers of jobless, miles of shuttered factories, rising mortgage rates, catapulting energy costs, record household and mortgage debt levels and the obvious promise of higher taxes and much higher mortgage costs to come. This will not end well.

It might be in CREA’s own interests to misled the country. It is not in ours. Shame.


#1 squidly77 on 06.21.09 at 8:32 pm

Canadian Army Guy
keep smoking the crack dude

#2 Steve on 06.21.09 at 8:43 pm

Common sense died with W

There is no more left and right

There only left of center, left and extreme left

We are doomed

#3 Seanmhair on 06.21.09 at 8:45 pm

Thank you this explanation, Garth. We have struggled to connect the dots.

The real estate rhetoric is definitely at odds with what we see happening around our central Windsor neighbourhood. Every dog walk, it seems there is yet another POS paper posted in a window. It is sad to think of the stories behind those simple pieces of paper….and not only on a personal level. The news of ‘shining’ real estate markets in other communities has the effect of isolating & further depressing those communities less fortunate.

OTOH, I see many homes being snapped up relatively fast. Testament to real estate cabal leading the sheeple to slaughter.

#4 OttawaMike on 06.21.09 at 8:46 pm

Detroit has a program offering 25k$ to home buyers as long as they pay 1% of the purchase price and live there:

Things on N. America are good compared to the Eurozone(great charts):

#5 Charles T. on 06.21.09 at 9:01 pm

Another great post about what is really going on in our economy Garth. I am kind of disappointed in the mainstream media in this country. It puzzles me why I don’t see you being interviewed a lot more by them about what is going on in our economy. I think your views on this topic are right on the money, and extremely accurate. (It doesn’t surprise me that more and more people are turning away from the mainstream media, and turning to the internet and blogs like yours and The Automatic Earth to find out what is really going on in our economy.)

Several weeks ago I sent a link of one of your “big picture posts about the economy”, along with a suggestion that you would be a great interview to discuss current economic matters to Rex Murphy’s “Cross Country Checkup”, BNN’s “SqueezePlay”, and the CBC’s “The National”.
Have you been contacted by any of them yet to do an interview?

#6 Bottoms_Up on 06.21.09 at 9:12 pm

Good explanation of how an ‘average’ can be misleading. From now on I will look for ‘median’ prices (if available?!) for a more accurate picture of the housing market.

The CREA should remember one thing: Greed kills.

#7 WillsDad on 06.21.09 at 9:25 pm

I don’t quite get how they are being misleading. Average price went up, didn’t it? They were talking about price, but you are talking about sales volume. Who cares about sales volume? And, why are you talking about individual city SV? It seems like you are cherry-picking the facts.

It seems like a whole lot of bluster on your part, without much filling.

#8 Jonathan on 06.21.09 at 9:26 pm

Great post Garth

#9 Nostradamus jr. on 06.21.09 at 9:29 pm

Chris no longer in England

>>As for his perceived (and sometimes real) slights on immigrants<<

…I have been banned for


#10 Jonathan on 06.21.09 at 9:34 pm

You know, this type of sales activity, really cements the fact that it is a psychological bubble that has fueled the entire boom.

CHMC president said in a recent statement this spring that we should expect sales activity and prices to decline this year. He said that it was good that the market was reflecting the negative fundamentals. He said prices and sales activity rising would actually be more cause for concern.

#11 Crash on 06.21.09 at 9:49 pm

I’m not overly surprised by this manipulation of figures. For at least the last ten years, the R/E industry has been whoring itself to the public. Before this, they were at least somewhat ethical (at least as ethical as salesmen can be) but this is really a new low for them. I suppose it’s dishonesty driven by desperation. It does make me wonder what else in the overall economy is being manipulated behind our backs. Look at the latest Stats Canada inflation numbers (0.10 %) give me a break; if they counted groceries and fuel it would be more realistic and alot higher. Everything is being spun for the masses.

#12 nonplused on 06.21.09 at 9:59 pm

Un-freaking-believable. Because sales have all but stopped in lower priced markets but increased at lower prices in some higher priced markets the CREB is reporting higher averages? I mean, mathematically that is what they get, of course, but it is simply disingenuous to proclaim higher averages when hardly a single city posted higher averages and the sales just shifted around. Pathetic.

I was wondering where these numbers were coming from because in Calgary there are 2 new listings for every sale, although sales did bump up in the spring as one would forecast from historical data.

To give a simple example then, what happened is this:

Peak sales:
Average: 341

Return to peak sales:
Average: 345


But, I’ve worked in a trading environment long enough to know you don’t let traders or brokers mark the book. Any company who tries it, no matter how pragmatic the reasons, eventually writes off 100’s of millions and pays out millions more in unjustified bonuses. We should not believe a single thing these jokers at the CREB say. The average is probably technically correct, but the composition of the average points to continued weakness, completely in contradiction to the accompanying commentary. Where in their commentary did it say “Well, not a single market was up significantly and sales were down across the board, but due to shifting trends in sales data the average came out higher”???? That would have been more honest.

They had a spectacular sale on BBQ’s at Stupid Store this weekend. They had 5 burner stainless 100,000 btu BBQ’s for $600 no GST. I was drooling. Unfortunately, my old BBQ has never let me down for whatever it was I was planning to cook and my deck isn’t that big so I decided against. Why does this matter? When they are fire selling home outfitting accessories, chances are the housing market itself is not strong.

#13 Jon B on 06.21.09 at 10:06 pm

CREA is always blowing their own horn. The cartel is in business to profit from an industry they control. Canadians seem to like it this way.

#14 double mike on 06.21.09 at 10:06 pm

I was sitting on the fence waiting for prices to fall. Guess what, I wasn’t alone. It came to my mind, albeit slowly that while the RE is an abscession nothing will ever change. People will sacrifice their disposable income, their lifestyle, their financial security and even future of their children to gain a false sense of owning some “property” which they don’t really own and hardly will ever own. This goes above any reason and any rational thinking. Even otherwise smart and shrewed folks just stop being smart and seems to be unable to perform a simple calculation whenever they venture into this distorted field.

Oh, well. Maybe they’re right. I can’t see how and I can’t justify any “real estate” purchase in GTA for myself, but maybe everyone and his dog around has a rich dad and a 200K income. Certainly not me. So I think I’ll stick with renting for several years more. And if I will be forever out priced from the market, so be it. The life is way much more than tolling for your banker.

#15 molson cdn on 06.21.09 at 10:07 pm

good for EVERYONE related to the real estate market. the interest rates are low, plenty of supply, banks are lending, ownership builds confidence and equity, etc….we need consumers and new taxpayers.

if you believe the housing market is a trap– its simple, don’t buy

#16 nonplused on 06.21.09 at 10:29 pm

Here is some unrelated ranting about the one form of deflation we are really seeing: manufactured goods.

Some years ago I bought a titanium watch for $300. I really liked it because it was light, but every year a new battery and if the month didn’t have 31 days fix the date, adjust for daylight savings time.

Then I came across a Citizen solar powered watch (the face is actually the collector) that still used all hands, but it was all microprocessor controlled. It has an alarm, stop watch good to 1/10 of a second, 2 time zones, 100 year calendar (fixes the date itself until long after I am gone including leap years), and never needs a new battery. It was pricey at $350 but stainless with some gold plating. I still think it’s cool watching the hand sweep to the alarm time setting.

My sport watch was a Timex but it needed batteries and the little wheel to set the face hands was broken, although the digital part still works fine.

So my wife buys me a new sport watch for father’s day. Solar powered, 24 time zones, face hands but digital read out too, illuminated, hourly chimes, alarm and all that jazz, 200 meters resistant, and gets the time and date every day from 4 different radio signals depending what part of the world you are in. $99.

Solar powered calculators are now so cheap, even scientific, that I threw all my battery powered calculators away. Whoever stores a program in them anymore anyway? That’s what computers are for.

But as my dad pointed out: “The time on my phone is always right, so I don’t wear a watch anymore.”

In the end of the day, houses are manufactured items. They are not subject to quite the same amount of innovation as a watch,, and not as easily mass produced and transported, but you should be getting more for less with each passing year, land cost excluded.

I was working construction when the air nailer first started showing up everywhere. Plywood was already pervasive having replaced jointed 1×4 and 1×6. So there are changes that have greatly eased the house building process. Even the plastic piping, longevity questions aside, has greatly eased plumbing a house, and it doesn’t break every time the house freezes (although other things in the water system still do, like the toilets). Plus no lead based solder.

#17 dgd on 06.21.09 at 10:30 pm


You should smoke some crack …..maybe you’d be a little less annoying with your “The sky is falling in Alberta BS”

#18 Keith in Calgary on 06.21.09 at 10:32 pm

I’ve said it many times before…….but it bares repeating……RE sales is the “only” occupation where you have to deliberately lie all the time in order to generate an income.

Govern yourself accordingly……..

#19 taxpayer like you on 06.21.09 at 10:43 pm

Come now Garth.

Statistics and politicians dont lie.

People only misinterpret them.

I miss Nosty too…..sniff….sniff……

#20 Anon on 06.21.09 at 10:45 pm

#15 molson cdn on 06.21.09 at 10:07 pm

“good for EVERYONE related to the real estate market. the interest rates are low, plenty of supply, banks are lending, ownership builds confidence and equity”

Please define “OWNERSHIP”. You must mean putting 5% down (if that) and having the bank own the rest for decades? (I say 5% simply because you are obviously referring to first time home owners since they would be the new taxpayers, right?) At any rate, I would hardly call that ownership.

#7 WillsDad

So if GT’s explanation is ‘cherry-picking’ then what do you call all the crap that is spewed out monthly from any organization that is wholly dependent upon real estate? With their never-ending “good-news-only” spin, aren’t CREA and TREB (etc.) guilty of ‘cherry-picking’ to the nth degree?

#21 dgd on 06.21.09 at 11:01 pm

The gold goofs will love this:

#22 Calgary_rip_off on 06.21.09 at 11:15 pm


The Calgary real estate board and Ed Jensen and all the other pimps are disgusting. Its always refreshing knowing if I really wanted to I could tell them all to pack it, because as a dual citizen and a renter I can go anywhere I want to. So there really isnt any rush for me to do anything. Why all the pressure to buy? Are the groceries about to go bad or something?

What happened with that fiasco of the realtors promotion crap yesterday in calgary? Any news? Did anyone buy any of the overpriced shacks?

By the way, its too bad Squiddly77, whoever he really is, isnt in charge of the CREB. If he was, maybe things would be normal here instead of the current Circus. Calgary is likely a really crappy heavy metal band playing currently, where none of the musicians are in sync with the others. Here’s a link to illustrate Calgary:

That band is the same crap that the realtors and sellers think is legit in Calgary. What a joke!!!

#23 Nostradamus Jr's Analyst on 06.21.09 at 11:15 pm

Averages are useless and meaningless.

You get 9 homes selling for $500,000 and the 10th sells for
$5,000,000 and what do you get?

Almost a million dollar average.


#24 nonplused on 06.21.09 at 11:23 pm

PS last (but will last a while) chance to get an SUV if you think you want one:

I say get a Jeep Cherokee. They made so many of those things that they will be building spare parts for the next 40 years like they did/do with the original Mustang, and junk yard parts are everywhere.

I’m one of those guys who things if trucks and trains aren’t going anywhere it’s because nobody is buying anything:

Any body else finding to be offline? Don’t know what would keep them down for 3 days. Maybe they switched providers and didn’t post a redirect.

Everybody with some “skin in the game” should go here at least once a week. Jim is crazy, but he somehow can filter out the news that matters from the news that doesn’t:

Addressed on the site today is the US “Cash for clunkers” program. It’s meant to get old cars off the road by offering $4500 towards a new car if you trade in a less efficient car for something that gets better than 18 MPG. So, no, your clunker Taurus doesn’t qualify. It already gets too good mileage even though it burns a quart of oil per tank. But I think what it does do is put a floor price on 4×4’s. Now, no matter how beat up, it’ll be worth at least $4000 in the black market. And no they won’t go to the wrecker. People want them. Now they have a floor. Why sell for less?

It’s like when the government fixed gold at $20. It’s only been higher since. Now they have fixed clunkers at $4500, and they will only go up from here.

Of course the poor will never be able to buy a Taurus for $1000 again. Pity the poor.

I remember when I was 16. The dream of automobile ownership was real, because you could buy a working car for $500. Old, rusty, and needing work, but it ran! Those are now worth $4500 minus commission for the trade in.

#25 Dan in Victoria on 06.21.09 at 11:36 pm

I think this one has O D’ed on starbucks or something

#26 Norm Fisher on 06.21.09 at 11:52 pm

The second sentence of CREA’s news release says, “The rebound in activity is being led by an increase in transactions in some of the most expensive markets in the country, which is skewing the national average price upward.”

#27 Nostradamus jr. on 06.21.09 at 11:52 pm

Nearly 500 years ago I predicted


#28 Lance on 06.21.09 at 11:56 pm

So here’s the million dollar question, Garth…

How does one short sell the real estate market and profit from a collapse? Racking my brain thinking of a way to accomplish that with the Canadian real estate market.

#29 $fromA$ia on 06.22.09 at 12:03 am

And the Condervative government is loving every moment of these MLS lies.

Coservative have done nothing wrong. 0/40 is all good.

The sad thing is that the Liberals won’t go after the Conservative on 0/40, if they did, the public wouldn’t like to find out that their homes will drop in value. Very unpoplular topic although its the Conservatives fault.

#30 $fromA$ia on 06.22.09 at 12:05 am

Ban Nostradamous JR.

He should be on Jerry Springer Labodomy show.

#31 justjanice on 06.22.09 at 12:33 am

It’s pure politics, and it’s no longer about what is in the best interest of the country. Newspapers allow themselves to print whatever drivel sells adds in their papers. Politicians allow themselves to spew whatever drivel gets the most votes. What’s right, no longer really matters or so it seems, except at the end of the day we will have to pay one way or another.

A real estate market that doesn’t distort the rest of the economy (keep in mind, what is spent in real estate is not spent elsewhere) is a good thing. Real estate as speculative investment needs to be curbed or at the very least reflect what the property yields in rents and be able to stand on its own merits. Flipping within 2 or 3 years should be heavily taxed. Banks need to be accountable for the risk of making bad loans (CMHC has generated a moral hazard in abnormal times). Buyers need to be limited to a reasonable multiple of income, to account for the real possibility of future increases in the interest rate (lets say no more than 4times income). More purpose built rentals need to be built to increase the amount of substitute product available to compete with ‘buying a home’.

Good policy could help avert future disaster, and return houses to their highest purpose as being homes for people. Prices that reflect the fundamental value of being somewhere to live.

#32 victoria reader on 06.22.09 at 12:41 am

Find it hard to decide whether or not to move out of house , rent, then buy back in a year or two or three. Want to, but hard with kids and I like my home. Its like doing it, is the first step to become a vulture.

#33 Nostradamus Le Vlad Impaler on 06.22.09 at 12:48 am

From the quote:

“. . . and suggested it will keep rates low through to the end of June 2010. Welcome to a Soviet style managed economy where a Canadian Conservative government is rigging the interest rates and increasing the public debt by handing over the tax paying public’s money to failed businesses . . .”

Carney / Geithner / Paulson / Bernanke et al are working wonderfully well together in this fiscal takedown.

“Leaders”, such as Gordon Brown, Sarkozy, Harper, Obama and their immediate henchmen have shown themselves to be nothing more than hood ornaments, carrying out orders and instructions from those behind-the-scenes, giving strictly controlled interviews to the media hookers who lap up every word they say, and tell us it’s the gospel truth.

As I have mentioned before, politics doesn’t play a part now. “Soviet style” = left wing, yet almost all here are right wing, so obviously there is no difference.

There are a few other things to join up with, not the least of which are ‘false-flags’ of a pig – bird – human flu pandemic to scare sheeple shitless, the ‘regime change’ in Iran called by Kissinger and Brezenski (1953 all over again), the ‘new’ NWO being sounded off by Sarkozy, Kissinger and Brazil’s head honcho, market manipulation by a few firms following Bernanke’s orders — these individuals have the hordes of brainless sheeple (unknowingly) running scared, so what do they do?

They go and make dumb offers for homes they can never pay off, making themselves slaves to their masters whom they will never know.

And history repeats, yet again. Same story, same result, different day. The more things change, the more they stay the same.
#5 Charles T. at 9:01 pm — “. . . I am kind of disappointed in the mainstream media in this country.”

Last figures I saw were that approximately 96% of all media is controlled by six per cent of individuals. May have changed a little, as newspapers are dropping like pins — they are a dying breed.
At last! First para. in first link has definitive numbers for stagflation, plus the link I posted last night which said (unofficially) the US unemployment is now running at 25%. Wonder how close this continent is to real stagflation? \/

The second link is Deja Vu all over again. Once more. “. . . Otto Freidrich described the period of German hyperinflation and its effects: ‘… People carried wages home in huge crates; by the time they could spend even their trillion-mark notes they were practically worthless . . ‘.”

Mish on China’s lending boom along with de-, in- and hyperinflation. —
#110 rory on 06.21.09 at 7:18 pm — Good post, and I agree with you. As said, it is Garth’s blog and choice but, like it or not all opinions are worth reading; whether one agrees or not doesn’t matter.

It is also noteworthy that there have been, and are a number of westerners who have grown increasingly disenchanted with Ottawa’s taking them for granted, that there will always be enough votes for politicians to rule the roost come election time.

Thus Ottawa hasn’t noticed that by mis-handling the west, taking for granted that showing up for photo-ops, a vote for them will always be there regardless, and simply brush us off as being dumb farmhand-hicks leads to more voter apathy and anger, that Ont. and Que. always seem to get the fairer shake.

Doesn’t work like that. Any politician worth his / her salt must EARN the right to represent people, otherwise they’re gone. We are their bosses, not the opposite.

#34 Increasing that 1% on 06.22.09 at 12:50 am

kinda question whether I should have asked for more for my place

#35 Happy Renter in North Van on 06.22.09 at 1:02 am

Wasn’t it Mark Twain who said “There are three kinds of lies: lies, damned lies, and statistics.” I’d like to add a fourth, most odious kind of lie, Real Estate Statistics…

#36 Munch on 06.22.09 at 1:38 am






#37 Bilbo Bloggins on 06.22.09 at 2:06 am

Well I live in Vancouver, the mother of all bubbles.
The Province newspaper reported the other day that house prices were 16% higher YOY.
However, prices were actually down 6.6% YOY.
They mistakenly on purpose printed the increased sales numbers instead.
Guess what, no retraction, no apologies.
Meanwhile the sheeple keep eating the BS that’s shoved down their throat by MSM.
Little wonder that Canwest shares are only useful for lining my bird’s cage.

#38 Mike (Authentic) on 06.22.09 at 3:23 am

The CREA’s main purpose is profit. And profit is what they are about for their house salesmen. Don’t use them when you sell, don’t use them when you buy. Use Welist, comfree or a host of other non-CREA and Realtor(R) based companies. Let your money do the talking and the CREA BS do the walking.

Would having an independant, unbaised, non-profit gov’t Canadian Real Estate board be an inprovement over the CREA? You bet. That’s something I’d put my tax dollars into rather than saving zombie banks and businesses.

Help the common person.


#39 Onemorething (aka DaHKkid) on 06.22.09 at 4:05 am

Nice One Garth, project name “Manipulation Bubble”

Let’s all sit down and build a nice fitting acronym for MLS as Garth describes them above.

Oh yeah, my new handle is going to be “Onemorething”

Cheers all.

#40 David Bakody on 06.22.09 at 6:30 am

Another statistic mentioned by the MSM was that Casino traffic is up in Calgary ….. so why not believe Real Estate Casino traffic is up … both by the way have government support … Strange?

“Come on down” ….. the price is right!

#41 Repatriated Expat on 06.22.09 at 6:53 am

Watched a local Toronto TV realty show this past weekend called hotproperty. Closing comments from the RE guy after spinning the positive numbers, “either buy now or you will find youself renting for the next twenty years.”

It seems like the RE industry itself has changed from a service provider into an institution onto itself that by definition must grow or die.

This is the only logic I can see why the industry would want to prepetuate the perception that real estate is still a good investment. More than a shame as they encouraging fools to be quickly separated from their money (permanently?), but they are canabalizing themselves as well.

#42 Devil's Advocate on 06.22.09 at 8:04 am

My brother just recently sold his West coast home. The deal hasn’t closed yet and he is now feeling a very apparent apprehension about not owning a home now despite rationally understanding what probably lies ahead for real estate. He feels homeless and insecure. His plan was to live on his boat for the summer and rent in the fall while the market unfolded for what it is. Doesn’t look like he will continue with that plan as he’s very unsettled about not owning dirt right now. I see this all the time; people have a want to own land that is almost instinctive.

I was watching a television program on New Orleans the other day interviewing people who wanted to “go home” back to “their land”. I read on these and other blogs of people who are clearly hoping the market tanks for no other reason than so that they can afford to own a home. It’s obvious most everyone wants to “own” their own home. A lot of sellers are wanting to sell high today so that they can re-buy at equivalent for less. A lot of renters are wanting the market to tank so they can afford to get in. Very few actually rent, long term, as a lifestyle choice.

The buying and selling ones real estate is a very complex matter that goes far beyond the marketing and financial aspect of the transaction. “Home” is a very emotional matter and the role emotions play in its purchase and sale are HUGE. Many of you who have owned your home and sold can surely attest to the emotional strife that goes along with giving it up even for the most money. Equally, many of you who have bought a home can attest to the great importance you placed on finding “that perfect home” and possibly the stress in doing so in any market not just a sellers market.

Despite giving my own brother the best advice I can he is still likely to make a financial mistake and purchase at a peak point in the market costing him tens of thousands of dollars. But at the end of the day is that such a bad decision if it makes him happy?

A lot of what is wrong with our economy is a preoccupation with money. Money isn’t everything. As Forest Gump’s mom said “A man only needs so much money, the rest is just for showing off”.

#43 ally ally oxycontin free on 06.22.09 at 8:06 am

“California is home to the largest manufacturing belt in the United States and to Silicon Valley, the nation’s largest high-tech center.

California is America’s most populous state with 38 million people. Its GDP of $1.8 trillion is the largest in the U.S. Its economy is bigger than those of Russia, Brazil, Canada, or India.

And it’s collapsing.”

#44 Nostradamus jr. on 06.22.09 at 8:14 am

>>This is not


#45 Kris on 06.22.09 at 8:25 am

Obviously the unions are buying the “back to good times” stories too – City of Toronto and LCBO employees either on or headed for strike. That too will not end well, Torontonians will not even be able to enjoy a nice gin and tonic sitting atop the steaming garbage pile in front of their houses!

#46 Danno on 06.22.09 at 8:28 am

I for one welcome our new CREA Overlords!

#47 john m. on 06.22.09 at 8:51 am

Great Post Garth….In my opinion we are witnessing the biggest fraud in our countries history. Orchestrated from the highest office in our country in conjunction with big business and supported by our tax dollars. Sadly there is not a damn thing we can do about it. Our standard of life,our democracy, ,health care,necessary services etc which took years to achieve are being sacrificed by vote buying corruption and greed. The facts as you stated about our economy are much too obvious for this to be anything but a deliberate act of fraud.

#48 Devil's Advocate on 06.22.09 at 8:58 am

Yes a government run MLS system and real estate industry, now there’s a great idea?!?

Can you imagine? We could then set pricing according to government policy. You could not sell your house for more than the government set price. You could not buy a house for less than the government set price. Affordability could be facilitated. Rampant speculation could be averted. Oh what a glorious idea! Such would be the answer to all our real estate woes. God knows the efficiency of government exceeds that of the free market. (sarcasm off)

#49 dd on 06.22.09 at 9:04 am

MLS will spin the story. Point out the demographic (boomers) shift and they would say it is going to be an great time to be a home buyer because of the affordability and great time to be a seller because of all the boomer related products (blah blah blah).

#50 wjp on 06.22.09 at 9:24 am

Maybe a little free advice, take it or leave it…
GET OUT OF EQUITIES unless you are a day trader or you are very knowledgeable when it comes to your investments. If you are an ordinary person who goes to work daily and occasionally look at your mutual funds statement at the end of the month, then the equities market is not the place for you. You would be better served by preserving your capital and investing in inflation protected bonds, after this next downturn. The U.S. savings bonds always protect your principal, so you could invest 30% of your portfolio in them today (with an exchange risk) but the Canadian bonds don’t, so you want to stay in cash until you see a real turnaround in the economy. The idea of making a killing in the market is speculative and in the new economy growth will be slow and investment over time rather than the big kill will be the order of the day. If you like speculating, ignore my message!

#51 Devil's Advocate on 06.22.09 at 9:25 am

Interesting article from the archives around the time of another economic recession 1981…

VANCOUVER SUN, Nov. 15, 1979
“Yes, you can still buy a single-family detached house in the Lower Mainland for less than $40,000.00. Not much of a home, maybe, but a place to call your own nonetheless.

VANCOUVER SUN, April 30, 1981
“Although the prices have changed, the quality of house you get for the minimum price hasn’t. The cheapest house this time is on Lorne Avenue in the south-west corner or Haney. With a living area of only 550 square feet, it lists for $62,000.00.”

“If you do manage to find your dream home (that’s anything that doesn’t give you nightmares) financing is going to set you back considerable more than it would have in 1979. In those days, a $40,000 mortgage at 11 per cent cost the homeowner $385 per month over 25 years.”

Today, a $45,000 mortgage at 16 percent, which means you’d have to have a $17,000 down payment to afford that (Lorne Ave) cheapest listed home, costs $595 per month over 25 years. And after five years of payments you will have paid $34,476 in interest and only $1,136 of the principal, leaving a balance of $43,864.”

“The overall picture is grim, despite realtor’s assurances that the real estate market is leveling off and that prices are being reduced to more realistic levels.”

#52 Just a Carpenter on 06.22.09 at 9:31 am

#42 Devil’s Advocate writes “A lot of what is wrong with our economy is a preoccupation with money.”

I would take it a step further and add that it is a preoccupation with obtaining money without any work risk or responsibility. I read a lot of ideas on this blog about personal gain but no mention of creating jobs or contributing to improving the community.

How about sharing with us how many people you have directly employed over the past year, and what if anything have you done to encourage training and growth in them. Also what if anything you have done to support or improve the communtiy you live in.

Prime example of what business should be like….

#53 CalgaryRocks on 06.22.09 at 9:34 am

#30 $fromA$ia on 06.22.09 at 12:05 am
Ban Nostradamous JR.

Unban Nostra.

On another topic, Toronto people, is mayor Miller going to pick up your garbage in person, now that the 60$/hour garbage men are on strike? Apparently they work really, really hard, unlike you sheeple and they need to bank 18 sick days/year.

Oh boy, love it when the unions protect the little guy.

#54 Just a Carpenter on 06.22.09 at 9:35 am

More accurate link:

#55 PTDBD on 06.22.09 at 10:12 am

“Trouble is, the release was tainted. Misleading. Devious. Unethical” says The Garth.

Hmmmm… in the past, if any of us posted in such inflammatory terms in response to collusion, plotting for profit, organizational deviousness, we would be instantly classified as “conspiracy theorists, nutbars and various “tin-foil hat” dismissive classifications. We would be accused of wishing for a collapse just to increase our personal worth. IOW, talking our book!

Personally, I am quite happy that the real estate market hasn’t collapsed into the california chaos. Long may we be suspended in mid-air.
:-) going forward :-)

Judge for yourself. You cannot wish a situation better and CREA surely has a duty to protect the ill-informed. — Garth

#56 Nostradamus jr. on 06.22.09 at 10:13 am

Islamic Burka


#57 mattbg on 06.22.09 at 10:21 am

To the people who say that averages are useless… they may be useless alone, but combined with the median and standard deviation, they can be useful.

#58 Mike B formerly just Mike on 06.22.09 at 10:26 am

Would certainly love to see the whole system revamped.
I know of not one friend who has bought a home to call the experience a pleasant one… All agents are constantly squeezing for that extra 15-20 grand just to add that few hundred bucks to their pocket and also to keep prices inflated so that the next sucker has to pay even more.. Just a complete racket. Plus… who are the ones buying the deals… not you or I… realtors. Little old ladies who have no relatives invariably have a “good friend” who just happens to be a realtor. I know of one old woman who is ill and whose power or attorney is the scummiest realtor you will ever meet. Hard to believe but true. He was friends with her for years and although she had other neighbours as her POA she switched to him because he got aggressive an forced the issue.
As for their stats … who pays attention to them… except the realturds of course.

#59 $fromA$ia on 06.22.09 at 10:40 am

No ban the 40 year old that still lives in his moma’s basement.

Nostra is a wierdo.

#60 Toronto C9 Renter on 06.22.09 at 10:45 am

#50 WJP said “…GET OUT OF EQUITIES unless you are a day trader or you are very knowledgeable when it comes to your investments…”

Agree — market sentiment is turning, and I too expect pessimism will win out for the next few months, especially as we get deep into summer / fall.

Agree it’s irrelevant for day trading, in fact higher VIX will be beneficial. But for longer term, dividend play etc, I’m gradually moving to the sidelines

Frustrating though, hard to make money anywhere. Thank goodness for Horizons Beta Pro

#61 wjp on 06.22.09 at 10:49 am

In this kind of economy, strikes are ill advised, there are some in the private sector taking pay cuts to maintain their employment. If I was Mayor Miller, I would invoke the Ronald Reagan stance, back to work tomorrow or you’re gone! May seem harsh but reality is, governments are also broke, and if you are willing, as a taxpayer, to pony up more to meet the demands of the union, be my guest! I am not!

#62 Dan in Victoria on 06.22.09 at 11:32 am

Well, I learned long ago if you shake hands with a realtor you had better count your fingers when you’re finished.

#63 Devil's Advocate on 06.22.09 at 11:35 am

Bankable sick days?!? What’s with that? You want to be rewarded for being healthy? Your reward for being healthy is that you get to work and earn a days pay instead of being sick in bed earning a days pay! WTF? You can do that? You get paid for being sick and now you want to be rewarded for not being sick?!? Am I missing something here? How does this make sense? Of course it doesn’t!

Union folk… get used to the rolling back of such benefits. You’ve been living in La La Land. Times have changed. Your employers are broke. Be thankfull you aren’t being asked to help pay their bills. Wait a minute… that’s happening (GM, Chrysler).

We are ALL guilty of contributing to the current economic situation and we must all swallow the bitter pill that will, eventually, cure what ails us. Some know this others must be told and so then must Mayor Miller tell his “children”.

#64 David Bakody on 06.22.09 at 11:47 am

#61 wjp on 06.22.09 at 10:49 am

Whoa there partner, our governments now have more money than ever, read Garth’s words. houses are selling like fresh fish cakes, banks and lawyers are making money, home furniture sales, lawn and garden businesses and summer deck building is skyrocketing. This all leads to the smiling duel of Harper/Flaherty for cutting the GST that only cost the children and grandchildren of all those Conservative voters a mear $10 Billion or so and the great recession is all but over ….. “Blue Skies are Smiling on Canada” as the country that really never went into recession ( housing sales saved us all of course) as our strong Canadian Shield held up and now we the first out. So what are y’all waiting for sell and buy a bigger home and two new cars to put in the drive way …… Buy-Buy before that dude in the dark suit with the funny axe comes and says bye-bye.

#65 Onemorething (aka DaHKkid) on 06.22.09 at 11:47 am

S&P 878.88…wait for it! Then run!

#66 molson cdn on 06.22.09 at 12:09 pm

I’m driving over to Miller’s (is that with an e or a) house in bloor west village and dropping my garbage off, in right in front of his house.

By the way, this NDP’er, is the root-cause of all the union/management chaos. for the last 6 months the unions wanted to bargain and management did nothing! For all you union-haters, he didn’t mind giving himself and his fellow councilors a nice little pay raise in March of 09. Give me a break-this guy is such a hypocrite and A##whole.

recommendation; anyone who is coming to the big smoke for a vacation-don’t waste your time. its over-rated and if miller doesn’t get you, his never-ending parking cops will.

#67 PTDBD on 06.22.09 at 12:10 pm

@ nonplused – change your link for Calculated Risk to:
They are having a Google Blogger service problem.

@Devil’s Advocate – your “We are ALL guilty of contributing to the current economic situation” is very unfair. It diffuses the guilt from those select few that were truly responsible and distributes it those now paying the price. Massive profits were siphoned from the public purse into private pockets. Record bonuses are now being awarded, but we wouldn’t direct people’s attention to those, would we?

#68 lgre on 06.22.09 at 12:11 pm

“S&P 878.88…wait for it! Then run!”

why is this the special number?

#69 Samantha on 06.22.09 at 12:17 pm

“Mainstream” citizens are prey for “mainstream” media. I have encountered people who vigorously uphold the statistics of the CREA (and/or their local equivalent) with the same fervor and conviction as a revival tent preacher.

These people fail to see the obvious – that such organizations have a vested interest in pumping up the market. They do not identify themselves as consumers, and therefore targets, of every business related to the housing industry.

A factor that complicates this issue is that we live in an era where information is relayed in a nanosecond. The consumer is adrift in a flood of information – overwhelmed and vulnerable to imprudent decisions.

Common sense has been displaced by the quest for information – any information, with little discern for it’s quality. Applicable statistics and information, of local, national and global significance, must be digested, distilled and applied to the individual.

How many mortgages would have been written in the last 5 or so years if the consumer had simply applied the 3x income benchmark for house affordability? How many people have purchased houses at ridiculous prices, not because the house is actually worth it, but because an inflated market, bidding wars and fear drove them to buy NOW before being “priced” out of the market?

How not to do this when house prices seemed to continue upward with no end in sight?

And we come full circle. Bubble builders bought, flipped and speculated. House prices increased and the consumer who merely wanted a home continued to buy despite an income dwarfed by home prices. The financial sector enabled it through a variety of creative mortgage products. MSM and organizations with a stake in real estate played pied piper and the mesmerized consumer followed.

Sitting Bull said: “Take that which is good and leave the rest.” This advice holds true for real estate and every marketing ploy associated with it.

#70 Andrew on 06.22.09 at 12:27 pm

#42 “Home” is a very emotional matter and the role emotions play in its purchase and sale are HUGE.”

This blog and most of the so-called bubble blogs are populated by control freaks who berate people for being emotional and making decisions based on

Welcome to humanity! Get over yourselves. Live and let live.

Characteristics of Control Freaks:

Always needs to be right.

Implies that you’re wrong or inadequate when you don’t agree.

Feels attacked when questioned.

Winning an argument is more important than finding the best solution.

A study by the University of Bradford Management Centre found that control freaks were more prone to insomnia, palpitations, high blood pressure and chronic fatigue. By their nature, control freaks are not optimists. Seldom are they the life and soul of the party.

#26 Norm Fisher
It is telling that everyone ignored your comment. It goes to show that a pre-ordained agenda will not be derailed by facts.

#71 Darryl on 06.22.09 at 12:34 pm

Has any body seen that south park episode where the boys have to gang up on an online gamer that always kills every ones avitar? At the end of the episode you get to see the altra geek that was behind the Villan.

That is how I picture Nosti…… :)

#72 wjp on 06.22.09 at 12:39 pm

Speaking of deceivers….
How much did your portfolio net you this year?

#73 CalgaryRocks on 06.22.09 at 12:40 pm

Union to Miller: boo, hoo, why can’t we have what other unions have? boo, hoo, we’re treated so unfairly! boo, hoo.

Wow, even NDP Miller is getting tired of these whinners. Maybe he’ll grow a pair and fire them all.

#74 Munch on 06.22.09 at 1:02 pm

Good article, Garth!

OT: Well done to USA who beat Egypt (African reigning football champions) 3-0 last night in the FIFA Confederations Cup in South Africa.

I didn’t think the Murrikans had any spine, but they have proven me wrong.

You can be proud of them, truly!


#75 Repatriated Expat on 06.22.09 at 1:06 pm

# 50 wjp and # 60 C9er

I have to agree as well, I’m not buying into equities until after this summer, and staying away from oil until Dec/Jan.

Whether you stay in or want all out is kinda the same deal as owning a house.

If this all keeps up I’ll either turn into chicken little or be broke or both at the end of the day. There is not much real estate left on my head for grey hair.

#76 jose on 06.22.09 at 1:22 pm

I am planning on holding the Conservatives and the Central bank responsible for the many people that will loose their house when the rates go up

#77 somecatchphrase on 06.22.09 at 1:42 pm

“Nearly half of American adults who participated in a recent survey said they no longer believe that homeownership is a realistic way to build wealth, the National Foundation for Credit Counseling reported on Monday.”

#78 Barb the proof reader on 06.22.09 at 1:44 pm

#14 Double Mike, your attitude is bang on. And you mentioned people’s false sense..
#42 Devil’s Advocate mentioned his brother’s feelings of insecurity..

You both clearly see that the problem’s pretty basic, and that the ultimate concern is doing the right thing to feel safe. Add to that, that, unfortunately, just perceiving ‘safeness’ will do in a pinch. Your message is that those who don’t keep arming themselves with the right knowledge, will needlessly feel unsafe and make errors in judgement. People are incredibly easy to manipulate and smart people realize that. They find ways to shut out all the external ignorance of sales pitches.

Devil’s Advocate, your brother is now second-guessing, simply giving in to his emotions and taking his eye off the ball. Your bro’s got to revive himself, with some more reality feedback. He’s done the right thing and he should embrace it. A secure, “healthy” and mature personality is reflected in ‘not being afraid to do the right thing’, stick to it, and not be fooled. “Insecurity” shouldn’t trump logic. False signals — about what’s safe and what’s not safe — are ignored by a healthy mind armed with the right information.

CREA’s release is a disingenuous attempt to re-set people’s safety button.

#79 Got A Watch on 06.22.09 at 1:51 pm

MLS – Many Liars System

Society as a whole would be much better off without Realt(ho)rs (TM). Selling a house should be such a routine transaction, they just try to make it seem complicated to promote how essential they are (not). Like the TV commercials where confused consumers are unable to handle reading the real estate paperwork.

But that aside, there are many reasons to own a home outside of investment or price.

If you have a hobby that requires a garage or workshop, few rentals have that or will allow you to do any work. Or you have pets or animals, and need barn space and fields. Or you own several vehicles in your family, and maybe a boat trailer and a snowmobile and trailer or an RV – where you going to park all of them without somebody complaining.

My nearest neighboring home up the road (500 yards) has been sold 3 times in the last 10 years.

The first couple had horses in the small barn they built. Second guy raised some odd goats, and fenced off the whole place into small fields for them. Now they were annoying, making weird noises very loudly whenever they weren’t happy, which seemed to be about all the time. Newest guy is a trucker who has lots of hobbies, he’s moved in all kinds of vehicles and equipment, turned it into a nice shop for fixing them.

To each his own, but all of them would have a hard time finding a rental place to accommodate their lifestyles. If you can find one, they probably want a high rent, and have conditions.

Lifestyle is important to some. Others save money by living in some dingy basement, and have no lifestyle. My opinion is, you are better to pay a little more on your home property and live the way you want.

There really is no place like home.

#80 David on 06.22.09 at 1:59 pm

There is no margin in honesty or even making a feeble attempt at presenting a complete picture when there are commission cheques to be earned and dollars to be churned from unwitting dupes who accept the lies and propaganda of the CREA at face value uncritically. Average prices are UP and homes have never been so AFFORDABLE. It would be a mistake to miss out on the buying opportunity of your LIFETIME by delaying a home purchase with NOTHING DOWN!
Listening to that kind of advice will prove financially fatal to anyone who acts upon it.

#81 MenWithHats on 06.22.09 at 1:59 pm

World bank report makes markets turtle :

A gloomy forecast from the World Bank prompted a broad sell-off today.

At 1:05 p.m. ET, the Dow Jones Industrial Average ($DJIA) was down 170 points, or 2%, to 8,369 after The World Bank said the global economy will contract by 2.9% this year, a deeper contraction than the 1.7% decline the bank had forecast in March.

The Nasdaq Composite Index ($COMPX) plunged 54 points, or 2.9%, to 1,773, and the Standard & Poor’s 500 Index ($INX) had shed 23 points, or 2.6%, to 898.

The bank also said that developing countries will only grow by 1.9% this year, a big drop from the 5.9% growth seen in 2008 and the 8.1% growth in 2007.

Crude oil fell $2.95 to $66.60 a barrel this afternoon on the bank’s outlook.

Gasoline prices were also lower today, ending a 54-day streak of increases. The average price of regular unleaded gasoline was $2.69 a gallon today, according to AAA’s Fuel Gauge report, down ever so slightly from Sunday’s average of $2.693 a gallon.

#82 CalgaryRocks on 06.22.09 at 2:13 pm

By the way, this NDP’er, is the root-cause of all the union/management chaos. for the last 6 months the unions wanted to bargain and management did nothing! For all you union-haters, he didn’t mind giving himself and his fellow councilors a nice little pay raise in March of 09. Give me a break-this guy is such a hypocrite and A##whole.

By all means, fire Miller and his gang asap. No arguments there. As for negotiating with unions, how about we start with a 25% pay cut and the same benefits as the private sector.

#83 tjmikey on 06.22.09 at 2:18 pm

#70 Andrew,

The problem with this real estate blog is that for the most part, I think Turner is right.

ANYONE with one lick of common sense and the ability to do simple math will agree with what Garth is saying, preaching….whatever.

Neither you or your buddy Bob T. took me up on my wager.

If you are so certain of the RE market it should be easy money for both of you.

I’ll take the two of you on, Turner’s gonna hold.

Calgary real estate will drop by another 25% sometime during the next 24 months.

Buck up or shut up I say.

#84 Nostradamus jr. on 06.22.09 at 2:20 pm

Future Prime


#85 MenWithHats on 06.22.09 at 2:28 pm

Wondering if all this doom and gloom presages the ‘New World Order ‘
Once currencies of all nations become worthless it will be much easier to build a new world government .
Slow but steady erosion of government programs seems inevitable .
The real power of world rule resides with the global financial markets that dominate the decisions of both corporations and governments, demanding ever greater financial returns to shareholders regardless of the cost to society. The costly reality is masked by increases in stock market and GDP indices that create the illusion of increasing prosperity even as global capitalism destroys the real capital on which our well-being depends.

#86 Fred on 06.22.09 at 2:32 pm

The CREA paints a pretty picture and yet “Household net worth plummets” as reported by The Canadian Press

states; “OTTAWA — Household net worth declined by $72 billion, or 1.3 per cent, in the first quarter as FALLING real-estate values and stock market woes continued to erode assets.”

#87 cash is king on 06.22.09 at 2:49 pm

City of Toronto’s CUPE employees are on strike!!! STOP THE WORLD!!!

Where have the rest of you Ontarian’s been? City of Windsor’s CUPE employees are now entering their 10th week of strike action. They are striking to prevent the City of Windsor from taking away from ALL NEW HIRE’S their health benefit package at retirement….30+ years away. Neither side is willing to move, hence the 10 week strike.

How are (no longer) pro union Windsorites handling the strike? The majority are handling it just fine thank you. Lining up to dump thier garbage are the appointed sites, encouraging the City to stick to the guns and telling Sid Ryan to go home.

First the City of Windsor, now City of Toronto, then Province of Ontario, Teachers, your contract expires under the new PC Provincial Government (gulp), and then the Federal Workers. Its going to get ugly over the next 4 years.

#88 CM on 06.22.09 at 2:53 pm

Looks like Canadians are pouring money that could be better used just about anywhere else into things that they know little about. The HarpoCons might as well be running the Kremlin.
Tories won’t tell future Afghan war costs

“In a significant policy shift, the Canadian government now believes that telling the country’s taxpayers the future cost of the war in Afghanistan would be a threat to national security, Canwest News Service has learned.”
Deceivers everywhere. This is supposed to be a matter of “national security”. Why? No answer. Just that we must all bow down in terror if they say so.

It’s more likely that it’s worry for their own security. The outraged people who are actually paying for this travesty while taking cuts in jobs, health care, schools and other stuff that actually make life worth living might show up on their doorsteps with the torches and pitchforks.

I’ve never heard of such a pile of bovine organic fertilizer.

#89 Nostradamus jr. on 06.22.09 at 3:15 pm

Banks Pay


#90 wjp on 06.22.09 at 3:26 pm

“In a significant policy shift, the Canadian government now believes that telling the country’s taxpayers the future cost of the war in Afghanistan would be a threat to national security, Canwest News Service has learned.”
#88 CM

It could be they have no funds, and have to fore go protecting our own borders to fund the venture abroad?
It could be they are unable to correctly gauge the actual cost, as has been shown in their inability to correctly project their deficits?
It could be they don’t want accountability to be any part of Canada’s new government?
Let’s be honest, almost all politicians cannot be trusted, in any party!
Time for independent MPs that represent constituents, not a party!

#91 jess on 06.22.09 at 3:47 pm

deceivious indeed

The role of tax incentives in propagating the bank crisis is also likely to come under the microscope following a recent IMF paper arguing that “tax distortions are likely to have encouraged excessive leveraging and other financial market problems evident in the crisis”. Private equity firms, in particular, have used tax incentives on debt to finance corporate raids that are now unwinding.

guardian uk.

#92 Barb the proof reader on 06.22.09 at 4:37 pm

#70 Andrew, re: Control Freaks and the study by Bradford

The source of the control freak’s problem is that they are born seeing the world in black and white, good and evil, etc. They are inflexible and uncomfortable dealing in grey areas. Brain studies have shown that too.

So just a hint for control freaks: When something is being discussed as being instinctive or emotional, that’s not derision, it’s objective diagnostics.

And BTW, starkly speaking, I should sell my house, it’s a rough diamond in a gold mine. But in another calculation, one that is too lengthy to discuss, the smart choice is staying put. Decisions are usually made for a multitude of reasons, and each circumstance is different.

#93 highway61 on 06.22.09 at 4:46 pm

#83 tjmikey
25%? you wish… calgary re will not drop more than 8% during the next two years (meanwhile the interest rates will creep up so it does not make any difference whether one buys today or in 2011).

#94 @Garth 2 on 06.22.09 at 4:50 pm

It’s frankly getting pretty sad around here. Perplexed vultures are but a shade away from directing their frustrations inwardly. And their equity hedge is seemingly about to evaporate too.

I’m beginning to think this will come full circle: panic sell your house, then panic sell your equities, panic some more, and finally just try to pay down your mortgage.

People: you are not smarter than the bankers. Nor am I.

#95 BBC on 06.22.09 at 5:05 pm

Garth, I wish you were an editor for a major newspaper (if you could stomach it). The general public (which includes me) could use the help deciphering these misleading articles. It is far and few between when you can read something in the News that is accurate and NOT misleading!! I don’t want (or need) bias economy reports, or ones that present a bias conclusion. I would like the facts presented in an clear way so that I can come to my own ‘educated’ conclusions!!

My educated conclusion recently is that the CREA is a bunch of [email protected]# H%#*S!!!!!

#96 dd on 06.22.09 at 5:39 pm

#93 highway61

>>>Calgary re will not drop more than 8% during the next two years (meanwhile the interest rates will creep up so it does not make any difference whether one buys today or in 2011)<<<<

Remember, Calgary really depends on Natural Gas prices. If NGas stays low so will real estate. There is not a lot of hope out there for high NGas prices for a couple of years.

Really. So you have the crystal ball. Sure is matters if real estate drops. Why pay more. Period! The money that is put into real estate today is dead money.

#97 dd on 06.22.09 at 5:42 pm

#89 Nostradamus jr

“Banks Pay … DELETED”

Nostradamus … you trying to say something boy? Come on spit it out.

#98 Average guy The Third on 06.22.09 at 6:00 pm

Sounds like a great time to become a realtor. Sales are booming due to Gov’t imposed bottom of the barrel interest rates, along with the CREA spin machine— and most buyers need a realtor to buy. Then, when rates rise significantly over the next couple of years as outlined by Mister Turner, these buyers will realize at mortgage renewal time that they can no longer afford to be homeowners and will become sellers— and most sellers need a realtor to sell. Realtors are going to make out like bandits for the next few years.

#99 tjmikey on 06.22.09 at 6:25 pm

#83 Highway61

The Calgary real estate market will drop another 25% sometime during the next 24 months and I’m willing to bet I’m right.

$400,000 will equal $300,000 in the next 24 months.

8% in your dreams, hell, it could drop 8% in the NEXT TWO QUARTERS.

#100 Bottoms_Up on 06.22.09 at 6:38 pm

#48 D’s A:
“You could not sell your house for more than the government set price.”
Believe it or not, the government regulates egg prices by setting a lower limit…

#80 David on 06.22.09 at 1:59 pm:
“Average prices are UP and homes have never been so AFFORDABLE. It would be a mistake to miss out on the buying opportunity of your LIFETIME by delaying a home purchase with NOTHING DOWN!”
Have a gander from the following taken out of the Eastern Ontario “New Homes and condos” Hometrader booklet:

(by Frank Giannone, President, Ontario Home Builders’ Association)

Title: OPPORTUNITY KNOCKS: Why Right Now Is The Right Time To Buy

(note, this identical title/article has been printed in previous editions of hometrader, so I guess every day is the right time to buy?)

…But smart and savvy buyers understand that now is a great time to buy a new home. (why?)

1) Lots of Choice… ‘outstanding selection’ (i.e. read inventories are building….and we don’t know what to do with all these damn houses!!)

2) Attractive Pricing …if you’re putting off purchasing a new home in the hope those prices will drop further, don’t bank on it. ‘builder’s are curbing construction which will drive up prices’ (i.e. read builders have slashed production about 40% because they know prices are plummeting)

3) Low Interest Rates…historically low interest rates means buying a home is now much more affordable (i.e. as opposed to the unaffordability when your mortgage resets at 9% in 5 years…why should I jump in now if I can’t afford the house at higher rates?)

4) Green and Clean…’efficiency of new homes means lower energy bills’

5) Building Personal Wealth…’buying a home is an important stepping stone in…assuring financial security’ (scare tactics anyone?…how about in assuring financial ruin?)

6) Home Sweet Home…’owning a home is a big part of the Canadian dream’ (let’s see, the Canadian dream…hmmmm….universal health care, multiculturalism, peace keeping, owning a home?! Something just doesn’t seem to fit here)
Well, I’m sold. Where do I sign?

#101 Nostradamus Le Mad Vlad on 06.22.09 at 6:45 pm

Spain’s economy collapsed almost a year ago — — and life still rolls on there as it always will, so wot about starting today’s incessant diatribes with a little Spanish flair?
#85 MenWithHats at 2:28 pm — “Wondering if all this doom and gloom presages the ‘New World Order ‘ . . . Slow but steady erosion of government programs seems inevitable .”

#87 cash is king at 2:49 pm — “Its going to get ugly over the next 4 years.” (Then all the boomers retire, along with CPP / OAS / GIS payments.)

#88 CM at 2:53 pm — ” . . . The HarpoCons might as well be running the Kremlin. . . . Tories won’t tell future Afghan war costs . . . Deceivers everywhere.”

Indeed. HarpoCons want to keep Cdn. forces there until 2015, which is a great way to spend all the social safety nets which many are banking on (see cash is king above), so joining MenWith Hats past about the NWO, and the deterioration of govt. services across the board, we can’t do a damn thing to stop what is happening now.

Life has become a tsunami now, and we’re surfing the wave. Shortly it will break and most of the world (including some of us) will be caught completely off-guard.

Goldman Sachs employees shared somewhere around a US$300 bln. bonus (they have plenty of taxpayers’ money for that), and it is well-known that Hank Paulson and Mark Carney worked side-by-side at GS.

They almost certainly were our respective countries’ architects of our downturn, and they get off scot-free with nice packages. —
The NWO must have ‘regime change’ where they want it! — — Our furnace called hell has been turned up a few degrees!

“William O. Beeman says in its quest for regime change in Iran, the United Sates might have “already picked the new rulers of that country”.

“The form of government would be a Constitutional Monarchy, with the Head of State being Reza Pahlavi, son of the former Shah, Mohammad Reza Pahlavi, who was deposed in the 1978-79 Islamic revolution, and Sohrab Sobhani as his Prime Minister”, Mr. Beeman wrote.”

#102 Two-thirds on 06.22.09 at 6:52 pm


What has increased by 378% in Alberta from April, 2008 to April, 2009?

a) Used vehicle sales
b) Bankruptcies
c) Birth rates
d) Men under 25 receiving EI

The answer can be found at:

The deterioration in the EI recipients picture is quite frankly, bone-chilling. No other province registered a doubling of people on EI YOY in April, 2009 but Alberta.

Granted, as a proportion of total EI recipients, AB only accounts for 7% on the national figures.

What is truly disturbing is the speed at which Albertans, especially men, are going on EI, presumably, because of job losses in the last year.

If first-time buyers are truly the engine of RE, and first-time buyers are typically young, what do the EI figures from the above link say about Alberta’s RE prospects after the summer?

Oh, yes, and the TSX lost almost 500 points today. Will we revisit 7,500 in the months ahead? Will the index plunge even lower than that?

Stats Canada figures show 816,000 people on EI nation-wide as of April, 2009. That is excluding “claimants receiving training, job creation and self-employment benefits as well as other employment and support measures benefits.”

That is roughly *3% of Canada’s population* on EI.

Not good. Neither for sheeple, nor for doomers.

#103 David on 06.22.09 at 7:02 pm

The selective use of statistics is a wonderful weapon in bolstering a weak argument and if it worked for the toothpaste industry it might work even better for those selling over priced houses.
Propaganda does not depend on scientific truth value, but rather the appearance of truth value. Anyone acting on MLS factoids to the media really is a greater fool.

#104 Onemorething (aka DaHKkid) on 06.22.09 at 7:13 pm

#79 Got A Watch…MLS – Many Liars System! Excellent!

#105 john m. on 06.22.09 at 8:01 pm

What a sad situation……what totally amazes are the people who i thought were reasonably intelligent falling for this scam…. and it’s not a minority…i no longer dwell on what i think is reality..people tell me what a fool i am and its time to jump in and capitalize on the real estate opportunities??? ……….anyone who suspected that Harper would like to be a dictator..just watch the pins fall IMO

#106 john m. on 06.22.09 at 8:08 pm

9,834.18 -453.77 (-4.41%),,,,,,,,,,,,,,the future get ready !

#107 Nostradamus Le Mad Vlad on 06.22.09 at 8:37 pm

A few days ago, I said that the white (Aryan) race was finishing its’ cycle (another reason why all the stuff is happening so quickly in the world now); apparently, someone else holds the same view! —

Meanwhile, this is Ron Paul’s 4:15 view on how the US is doing. —

Once more with feeling! Anyone fancy Somalia for a nice time-out? —
Same in Kelowna — Kellogg’s is asking citizens to donate money, while they keep refilling food banks. —
Japan’s possible idea to fight deflation — abolish cash. — — Yet, a very good description of inflation. —

“What is inflation? . . . Here is some of what I’ve learned thus far:

“Inflation is not a rise in prices

“Inflation is a rise in the money supply”

However, with soaring food, utility and fuel costs, combined with failing crops (see Alberta) something’s gotta give!

#108 smw on 06.22.09 at 8:51 pm

#94 @Garth 2

Good thing the majority of people around here stopped listening to bankers, and the likes of you a long time ago.

Your attempt at “shaming” people here is as weak as your pro real estate arguments.

This is your problem, you think everyone here is a bitter renter instead of respecting the message.

Skate to where the puck is going, not where its been, advice, not from a genius “banker”, but from a winner, #99!

Enjoy your real estate investing… All the best to those with their eyes opened to what’s happening…


Today was a reminder that 6 months isn’t enough time to purge the system of the excess. Profit taking, EVERYTHING is down, it’ll be a hell of a summer, especially as the next quarter’s numbers get closer and closer.

#109 smw on 06.22.09 at 9:04 pm

#66 molson cdn

Ottawa council learned its jut easier to either get the deal done long before hand or go to binding arbitration with the bus strike.

But you said it, council paid themselves first and now the residents of city will pay the price for the union wanting a juicy chunk of change as well.

Good thing that the potential >$400K HST tax threat was initiated, the higher Dalton can help push up real estate, the more tax revenue TO(and Ontario) will have.

Too bad prices are unsustainable.

#110 Fool me once... on 06.22.09 at 9:18 pm

Thank you for finally dealing with an embarrassing west coaster who by no means represented the general masses out here.

#111 Barb the proof reader on 06.22.09 at 9:21 pm

Wouldn’t it be a good idea if CREA came under the same “conflict of interest” scrutiny that the U.S. FTC is expected to approve this summer for blogger false claims payola:

” .. consumers often go online for independent consumer reviews to help them find a gem or shun a lemon. What some fail to realize is that reviews can be tainted: Many bloggers have accepted perks.. even thousands of dollars for a 200-word post. The practice has grown to the degree that the U.S. Federal Trade Commission is paying attention. New guidelines would clarify that the agency can go after bloggers — as well as the companies that compensate them — for any false claims or failure to disclose conflicts of interest. “

#112 Bottoms_Up on 06.22.09 at 9:35 pm

Hey Nostradamus jr.

Just use your local library to access Garth’s blog. You’ll have to change your name, and not use witty signatures, but at least you’ll get your unwashed opinions posted…and to fellow bloggers, we can try and guess which posts are by N.jr.

#113 David on 06.22.09 at 9:39 pm

For another take on the issue of home affordabilty.

#114 Repatriated Expat on 06.22.09 at 9:54 pm

#111 Barb the proof reader

A sad statement on how corruption every aspect of how our daily lives seem to be infiltrated by the profit takers.

Then you have to give Garth credit for keeping this site advert free, although I’m sure he has had been tempted by lucrative offers, even by RE agents.

#115 charliegosurf on 06.22.09 at 11:10 pm

Michel of Our Lady, or the 420 n-van trendy turd

this swell of nostra= d’anus fanclub, haters, and little hint deleted post, is as childish and egocentered as this world as come to be.

the sum of all fear is an equation of reason for the mass of wiseone, who lust in future gain of happine$$

keep on rollin, your almost there,

#116 nonplused on 06.22.09 at 11:43 pm

#28 Lance

REIT’s. But I think if you look at the charts, you’ll see that one would have to be brave to short them from here.

I played Nortel puts for a time when I was sure the bounce was a fake. Between the outrageous commissions and the fact that the stock always seemed to rally into expiry, the best I did was break even for all that work even though I was right the whole way down. Didn’t play it this time but maybe I should have, with longer dated options.

I did pay recoup all my costs on one move though, so it wasn’t a loss. But still, the game seems to be very difficult for a nonprofessional to lay in my experience.

#62 Dan in Victoria

Ha ha, that’s funny. But he’ll steal your wallet while you are counting your fingers.


Thanks, that seems to have fixed it.

#79 Got A Watch

I am having good luck right now renting a far more luxurious lifestyle than I could afford for the same money if I owned. Some things are a pain in the butt, I agree. For example I have to replace a rotted deck board on a deck that isn’t mine, but it shouldn’t take more than a half hour and I don’t want to trouble the landlord for something so simple. Plus we put up a few cheap window coverings and we will have to leave the hardware when we go. But really, you do that anyway when you own. And you go eventually either way.

Garth on #84 Nostradamus jr.

Can’t you just turn off his account?

#113 David

Good link. I’ve always thought that looking at monthly payments was a silly way to look at affordability. When you have to pay for 35 years instead of the previous 20, that’s a lot of extra income one needs to divert to mortgage payments in prime retirement savings years! Plus interest rates change, so one should look at a long term average when calculating the payments over the life of the loan, not the low rates you can lock in for 5 years now (only 1/7 of the term!)

It’s like people who buy new cars because they don’t want to pay for repairs. I don’t care what kind of clunker you buy, depreciation and extra insurance on a new car is always more than the cost of repairing a lightly worn used car. Always. You can totally refurbish a 67 Mustang from the rims to the roof for less than the cost of a new one. Plus then you have a classic that might actually appreciate, whereas the new one is down 30% when you drive it off the lot.

#117 Real Estate Bear on 06.23.09 at 12:20 am

I am a financial planner and have been a real estate bear since 2006 when I first saw what was happening to the US real estate market and concluded that there is a very strong correlation between our market and the US market, I concluded and that what happens down there will eventually happen here.

I tried to express my views to my family at family dinners but no one would pay attention to what I had to say. I finally convinced my wife last fall that we should sell and rent for a few years and sold last fall.

While having lunch yesterday with my daughter and son-in-law (he is a realtor), I mentioned that I was happy that I sold last fall and now I am patiently waiting for the market to drop much further before buying back in. My son-in-law basically said that it will not happen and that I already missed the boat. As I tried to defend my position but my wife cut me off to avoid an argument.

Later yesterday afternoon and today I sent my daughter and son-in-law some relevant information by email including a copy of this post. My son-in-law threatened to block my emails if I continue sending emails supporting why real estate is still overvalued. Either he truly believes that real estate can only go up from hear or does not want to hear the truth.

It is very frustrating being a real estate bear when my son-in law is a realtor, my brother is a realtor and my brother-in-law is a real estate investor.

#118 Mike (Authentic) on 06.23.09 at 6:16 am

#83 tjmikey -‘Calgary real estate will drop by another 25% sometime during the next 24 months.”

I’d agree with that. 25% is really just 12% YoY so it’s quite likely.

115 Real Estate Bear “It is very frustrating being a real estate bear when my son-in law is a realtor, my brother is a realtor and my brother-in-law is a real estate investor.”

I feel for you buddy. I try to tell my in-laws the same thing and they don’t listen either. “It’s different here (in their small rural BC town” they say and I can’t seem to convince them otherwise.

Their lumber mill just layed off 500 town people and I just saw it (please 3000 acres they own) up for sale on a realtor site. No worries, though, retail and tourism makes their economy go. What else do you need right?


#119 Mish on 06.23.09 at 11:12 am

Canadians falling behind on their credit payments, Equifax Canada says

Household wealth dropped $72 billion in first quarter: Statistics Canada

Oh, But, house prices are going up.


#120 Ted on 06.24.09 at 12:35 am

What load of cry babies there are on this blog site. Turner predicted the same crap 20 years ago and he was wrong, off by 15 years. Real Estate ebbs and flows. With the exception of the 3 to 5% commission earned, all profits in house sales in the billions earned over the years goes to the sellers, people like you and me. The math is simple. 80,000 registered Realtors in Canada doing 500,000 sales every year averages about 5.5 sales each. CREA is non profit. so are all Real Estate Boards. Please give the Citizens of this great Country some respect for the choices they make. Sometimes they are right and sometimes wrong. Timing is everything. Turner does not have a crystal ball. It’s just speculative doom and gloom. It does not take a rocket scientist to know rates will go up and when they do prices will adjust until demand picks up. What’s the big deal? Anyone could write a book on this stuff

#121 CS on 06.24.09 at 4:46 pm

‘For Sale’ sign went up on the lawn a few days ago. If we do sell, we will buy again. We don’t have a big, expensive house by any means, but we can go smaller and that’s what we want to do. Why not rent? For us, it’s security. Yes, much is an emotional decision, but it also makes sense to us. And it’s peace of mind. The landlord can’t come along in a few months and give us our notice cause his daughter now needs a place to stay. We don’t have to deal with the eye sore of an old yellow fridge (for example) as a replacement for the fridge that suddenly quit. We can put up a fence for our large dog if we want – we can HAVE our large dog, for that matter! (and no ‘Bottoms Up’ – I can’t just have my dog regardless of what the landlord says, it’s not legal in my province if my landlord says no.) If we buy cheap enough so that there is no mortgage when we retire, then we will have taxes to pay (low in our area) and upkeep. And that’s it. It’s not rocket science to put aside x number of dollars per month for the upkeep of a home to be used when required. I often see people factoring in many hundreds per month as the upkeep on their home, and then quoted as huge savings when doing the ‘own vs rent’ debate – we have never had to pay out any kind of money like that over many years of home ownership – mind you, we are able to do most things ourselves. One thing that always puzzles me is when charts and graphs are made showing that if you’d put the mortgage payment into other investments, you’d have so much more money – but curiously, the fact that the $1000 mortgage payment would have to be the $1000 rental cost, cause you still have to have somewhere to live, never seems to be mentioned. The right house purchase, for the right cost, with a sound plan in mind, can still be the right choice.