Dashcam frenzy

Not quite sure who this guy is, other than an enterprising real estate agent with a dashcam in bubblicious Van.

Ten offers on a West Van condo, in a city where average prices exceed the national average by 50%. Where 70% of net income is required to carry a SFD, where leaky condos destroyed the financial lives of thousands of people, and where pre-Olympic activity just about guarantees the last ones in will be the first ones munched.

Still, I like this guy.

If you’re going to lead ’em to slaughter, at least have panache.

And an ego. It’ll help later.

99 comments ↓

#1 Samtheman on 08.26.09 at 11:24 am

Hahaha!!!
You know what’s funny about this? The fact that most people would get taken in from this type of personality.
I had friends like this growing up and thought they would amount to nothing. I guess it goes to show you that anyone can be a success, once put in the right enviroment. lol

#2 Calgary_rip_off on 08.26.09 at 11:48 am

Keep it coming Garth.

More great news from Mario Toneguzzi.
The housing decline is over according to this article.

http://www.calgaryherald.com/business/Calgary+home+prices+down+June/1931670/story.html

#3 Boombust on 08.26.09 at 11:53 am

Certainly an irritating accent. Recent US immigrant?

#4 Keith in Calgary on 08.26.09 at 11:57 am

This guy is a dickwad. Hubris will soon be his middle name. He’s the poster boy for realtors.

#5 Dr Always Correct on 08.26.09 at 12:14 pm

The “West End” is the west end of downtown Vancouver, west of Burrard Street through to the Stanley Park boundary.

West Vancouver is what you’re speaking of, not the West End.

#6 Munch on 08.26.09 at 12:27 pm

First!

Again!

“munched” eh?

Hmmmmmmmm

#7 Joe on 08.26.09 at 12:31 pm

Hi garth,
i read in one of ur replies that u think the correction will be between 10&20 percent. Do u think condos will take a bigger hit or houses? What about location?i think downtown toronto might be less effected than lets say london on! And which cities do u think will take the biggest hit?
Thank you sir

#8 Calgary_rip_off on 08.26.09 at 12:34 pm

Garth:

Please double these rates. This should fix the current mess.

http://www.bankofcanada.ca/cgi-bin/famecgi_fdps

#9 WaitandSee on 08.26.09 at 12:56 pm

Hi Garth,
for your info, it is not in West Van (part of the North Shore) but it’s in West End which is a neighborhood in Vancouver.

Well, it is insane, several houses listed between 1.7 and 1.8 millions have been sold here, in North Vancouver, in less than a month…
I know someone who just bought a 1.9 Million$ house , and won’t sell their current house but rent it ….

cannot believe it….

This morning in the Vancouver Sun : “‘Worst’ of housing prices decline behind us: report” (clic on my name for the link)

Let’s wait and see

Regards,

#10 Kate on 08.26.09 at 1:14 pm

BTW, a good point was brought up yesterday. If the correction will be only 15-20% and the interest rates will be up, does waiting to buy will really make a lot of sense?

20% of the average home price in Canada is 60K. In Toronto, 80K. In Vancouver, 140K. Figure it out. — Garth

#11 Mike (Authentic) on 08.26.09 at 1:23 pm

Lots of action today in the news to write and talk about:

Natural gas prices in Canada could fall below $1, report warns – Financial PostAugust 25, 2009
“Natural gas in Canada, already scraping along at prices below $2, a low not seen since 2002, may fall below $1 in the coming weeks, according to a report from FirstEnergy Capital.

“The market is trying to rationalize all of the gas that is piling up and there are fewer and fewer places to put it. We expect that a $1 handle on prices will start becoming more common in the next few weeks,” said analyst Martin King.”

In Calgary, the number of people receiving EI benefits rose nearly fivefold in June to 19,020 from 3,960 in June, 2008.
“In June, 816,630 people collected EI, benefits, up 5.1 per cent from May and up 73.1 per cent year over year, Statistics Canada said yesterday. The biggest increases came in Alberta, British Columbia and Newfoundland and Labrador. The biggest increase in Ontario was in Windsor, where the number of EI recipients more than tripled in June to 14,240 from 4,480 a year ago. Claims more than doubled in Toronto, up to 95,820 from 45,080. ”

Central bank ready to intervene on rising loonie
Faced with strong dollar, Bank of Canada says it will act to protect economic recovery – THE CANADIAN PRESS
“Quantitative easing – which entails the bank purchasing government treasuries – would have the impact of lowering bond yields or interest rates, making the loonie less attractive to global investors.”

Whew, that’s loads.

I guess I should mention that Oil has fallen almost $5 a barrel today as well!

Mike

#12 Ian Watt on 08.26.09 at 1:26 pm

Hey Keith. I know him better than anyone and even I think he’s a prick (but please don’t tell him I said so)!

Have a great day!

Do you have video of that? — Garth

#13 bigpictureguy on 08.26.09 at 1:34 pm

#9 Kate

Garth you are a hoot!

Kate is confused and dazed with your reply and will require someone to do the math and give an example.

At least 50% the Canadian population can’t do basic math and critical thinking to conduct a cost benefit analysis. I would take a 20% discount with a reduced mortgage amount at a higher interest rate.

#14 bigpicture on 08.26.09 at 1:46 pm

#9 Kate

Here is a mortgage calculator for scenario analysis buy high with low rates vs buy low and higher rates.

http://www.mortgagecalculator.com/

Of course assumptions need to be made expected x % drop on price and rise in interest rate level.

#15 Samantha on 08.26.09 at 1:56 pm

Hmmm…not Billy Mays….not Vinnie, the slap chop guy. Wait, I’m channeling Spock – Here’s the answer…”It’s a new life form, Commander”.

Ok, so is the black shirt a company uniform?

By the way, one of the addresses he rattled off (a foreclosure) had hubs spewing coffee. Hubs’ name for it is “Upper Skid Row”. You’ll love the neighbors and just wait until you have your first block party. Yee Hah!

There’s plenty of shopping on nearby Broadway. Don’t forget to bring your new guard dog, Cuddles. Oh and wear sensible shoes so you can run, because you just might decide to take up running while you live in that area.

#16 Jonathan on 08.26.09 at 1:59 pm

Ian Watt’s was pumping real estate saying it would never fall in 2007-8. Then it fell. Then he was on news channels saying that he was now specializing in power of sales. He was saying how bad the market was and was taking the journalists from one empty condo to the next. Now he’s back pumping real estate lol.

#17 bigpicture on 08.26.09 at 2:02 pm

One can question his ethics/morality.

Ian Watt can’t be faulted for being a slick sales man and moving RE. He is doing what he is allowed to do. Hype! Hype! Sell! Sell! Sell!

With one’s biggest investment decision in their life time, it’s up to the individual to be accountable for his/her decision. People spend more time and deligence researching the purchase of a car, stereo or vacation to save money.

#18 Dan in Victoria on 08.26.09 at 2:23 pm

I’m beginning to think every one in Vancouver smokes Left Handed cigarrettes,and the second hand smoke is being inhaled by every one else.How else can you explain the delusion?(And its going to be BC’s number one industry soon )

#19 Kate on 08.26.09 at 2:32 pm

OK, I sued that mortgage calculator. Here is the data, assuming 400K house, 50K down, 25 years of amortization, 20% price drop and 10% interest rate:

Home Value $400,000
Loan Amt $350,000
Loan Rate 3%
Total Interest $147,921.88
Total Cost $497,921.88

Home Value $320,000
Loan Amt $270,000
Loan Rate 10%
Total Interest $466,047.60
Total Cost $736,047.60

I know that problem with these calculations is that 10% interest rate will equally hit both scenarios in X years…

Your numbers are meaningless since in the first scenario you have factored in a constant mortgage rate of 3% for 25 years, and in the second, 10% for 25 years. While the second scenario is entirely possible, the first is impossible. The best you will do is buy today with a VRM at 3%, only to see it climb inexorably over the coming years. Meanwhile you will have bought a home at the top of the cycle, and have a mortgage far larger than in the second scenario. Bad move. — Garth

#20 viewwest on 08.26.09 at 2:32 pm

Hi Garth,
My comment connects to Vancouver housing prices in that it provides just one of many examples of the diminishing prospects for high-paying , Creative Class jobs in Vancouver . I keep asking myself, where will we find expanding groups of high-income earners to keep fueling the market for all the $million+ homes here in Vancouver in the coming years?

Canadian Bar Association comments on the fact that 50% fewer legal articling students are being hired for FT positions at Vancouver law firms. (same happening in Toronto, and other major cities).
http://www.cba.org/CBA/national/janfeb04/feature2.aspx

Meanwhile, in the newer globalization trend for sending Creative Class jobs offshore…from today’s National Post
http://www.financialpost.com/working/story.html?id=1929745

Garth, this next wave of job globalization might be an interesting topic as a follow up to your August 19th post “Dirty Work”. The manual labour jobs are gone and what will be the impact now that the next tier up is set to be ‘offshored’.

#21 Peter Wiener on 08.26.09 at 2:35 pm

#16 bigpictureguy

In a so-called sophisticated 1st world economy like Canada’s, it is inconceivable to me that there is NO requirement beyond taking a pee-poor RE course before allowing someone to provide investment advice on usually the biggest fianacial commitment of a person’s life. In addition, this advice is, by definition, a conflict of interest and a often a breach of fiduciary trust. Insane amd inflationary of prices.

Not being strong in maths is a shortcoming that many s have – some are just incapable. What shocks me is the complete absence of COMMON SENSE in accepting the opinion of an individual at face value whose income is derived from getting you to transact thru them.

….. of course, Mr. Smith its a great time to buy (or sell and buy again!) ….

Just goes to show you the power of CREA politically – the power to make you pay more for a house than you should. Anybody with a brain has to have contempt for the majority of these pigs! I always prefer to deal with pricipals in a transaction directly, but some buyers / sellers want the ‘protection’ of involving their RE agent.

Can ya tell I’m not a buyer in this market?

#22 john on 08.26.09 at 2:38 pm

Hey #12 bigpictureguy – There is no need to bash Kate as she brings up a valid arguement.

Remember Garth expected a 15-20% correction last year and pricing of RE has gone up since then yet he still is holding onto his 15-20% correction but from the new current pricing. That would bring us approximately to last years pricing. I am surprised more people don’t ask for clarification on this as it is a reasonable question.

#23 Chaostrology on 08.26.09 at 3:07 pm

With apologies to Gordon Lightfoot.
Hum along to “The Wreck of The Edmund Fitzgerald”

“The Wreck of The Sir John A. MacDonald”

The legend lives on from the Chippewa on down
Of the Big Bank they call Gotchur money
The Bank it is said, only makes people dead
When the skies of November turn gloomy
Wiith a boat load of crap, that would make tempered steel snap
The big Bank’s vault sure looked empty
Those poor people and true were a bone to be chewed
When the shorts of November came early.

The bank was the pride of the Canadian side
Coming back from some recent loan losses
As big banks go it was bigger than most
With a staff and a CEO well seasoned
Concluding some terms with a couple of Wall St. firms
When they left fully optioned for T.O.
And later that day when the trader’s bell rang
Could it be the lee shore they’d been feeling?
The rumours on the wire made a tattle-tale sound
And a wave of panic broke over the bosses
Twas the Bitch of November come stealin
The word came late and the cocktails had to wait
When the puts of November came slashin
When morning came the picture looked the same
In the face of a global recession

When appetizers came, the old crook came online sayin
Fellas, we’re too broke to feed ya
At seven p.m. when the Big Con gave in, he said
Fellas, it’s been good to know ya
The manager wired he had Mounties comin in
And the poor bank and staff were in peril
And later that night when the bank turned off it’s lights
Came the wreck of the Sir John A. MacDonald

Does anyone know where the love of God goes
When the markets turn minutes to hours?
The sharks all say they could have made the Bastard pay
If they’d put 15 more months behind her
They might have split-up or they might have downsized
They might have broke clear and took a merger
And all that remains is the faces and the names
Of the creditors the tax payers and the depositors

Cowtown rolls in dough, Vancouver sings
In the rooms of her over priced mansions
Sleepy Ottawa steams, while an old bull dreams
Real Estate and Casinos are for sportsmen
And farther below southern Ontario
Takes in all the welfare we send her
And the banks come and go, as the old folks all know
With the Great Depression remembered

In a musty old hall in Windsor they prayed
For the big pay days of their yester years
The fire bell chimed and it rang 33 million times
For each man, woman and child in the country
The legend lives on from the Chippewa on down
Of the Big Bank they call Gotchur money
The Big Banks it’s said, don’t care whose left for dead
When the bankruptcies of November come early!

#24 CM on 08.26.09 at 3:11 pm

Would you buy a used car from this guy?

Lambs to slaughter.

#25 PTDBD on 08.26.09 at 3:25 pm

Moral Hazard Ease – If you default, they’ll break your knees

Now they want to “ease the rules” for private investor financing of troubled banks in the States. (there’s a lot of em going glub glub)

….VinnietheLoanShark and WimpyWillPayYouNextWeek want in! Why not? If they can’t make it go, the taxpayer will provide the bailout dough.

#26 Hagbard on 08.26.09 at 3:37 pm

Hey Watt, watch the friggin’ road!

#27 Joe Realtor on 08.26.09 at 3:44 pm

A Brad Lamb wannabe?
He seems to be one of these people that asks you a question, and then never stops talking long enough to let you answer it.

#28 Sam on 08.26.09 at 3:46 pm

Now how do you explain this… ?!?!?!?

http://www.thestar.com/business/article/686445

http://www.yourhome.ca/homes/realestate/article/686449

Already discussed. — Garth

#29 PTDBD on 08.26.09 at 3:49 pm

@Chaostrology – very good – is it yours? :-)

#30 Samantha on 08.26.09 at 4:00 pm

#22 Chaostrology –

Gord would be proud of you.

#31 $fromA$ia "Garths Nugget Boy" on 08.26.09 at 4:08 pm

Perhaps Ian can tell us where he gets his million dollar blind clients?

#32 Barb .. a reader in Calgary on 08.26.09 at 4:15 pm

#22 Chaostrology,

I liked that.

#33 Crash on 08.26.09 at 4:16 pm

How many times does this Ian dude say “west end”? 20? and realtors wonder why they have a bad rep.

#34 bigpictureguy on 08.26.09 at 4:23 pm

“john on 08.26.09 at 2:38 pm
Hey #12 bigpictureguy – There is no need to bash Kate as she brings up a valid arguement”

Kate took the bait. I waited to see her logic and assumptions. And lo and behold she revealed her lack of critical thinking.

The problem is she didn’t THINK through her argument and when cornered she tried to support it with simplistic and crude assumptions.

Garth stepped in and slapped some reality. The other thing I would have added is if interest did rise to 10%, you would see a much greater discount then just 20%.

#35 john m on 08.26.09 at 4:24 pm

Edmonton — The Canadian Press Last updated on Wednesday, Aug. 26, 2009 04:30PM EDT

Alberta’s energy boom gone bust has left the province with a record $7-billion deficit and if natural gas prices continue to fall, there could be even more red ink…………… hmmmmmm

#36 Jan Etter on 08.26.09 at 4:26 pm

#18 Kate

Use the same calculator, but you have to recalculate at the end of the term when you have to renew. For example, if you pick a 5 year term, punch in whatever interest rate you estimate you will pay over that 5 years (on average, if you pick a floating rate) and then see what the o/s principal is at the end of the 5 years with your assumptions. Note the interest paid to the end of that 5 year term and start again with the next 5 year (or whatever length you choose) term with a new interest rate, say, somewhere between 5-10% depending on where you think rates will be, and choose a new amortization period (hopefully, the original AM less 5 years so you don’t end up paying a mortgage forever). Rinse. Repeat.

#37 blobby on 08.26.09 at 4:27 pm

@32 : its called positive re-inforcement. Hypnotists use it all the time.

By constantly repeating where he wants you to buy, it’s becomes a sub-concious thing where all you can think about is that area.

And of course he wants you to buy there – it’s the most overpriced area of town.. But in saying that (unlike yaletown) at least the buildings were all built in the 60s and are well made without wafer thin walls.

(I live in the westend and have lived in yaletown)

#38 bigpictureguy on 08.26.09 at 4:58 pm

#20 Peter Wiener on 08.26.09 at 2:35 pm

Dude I agree with you. I despise RE agents in general. When I sold my home I interviewed 5. 4 of them failed to even pass the minimum sniff test -avg competence and character. One idiot tried the “high pressure” close tactic to choose her because “she was the best” and why even consider others. She didn’t even know the low and high price sold for a similar home during the year in my neighborhood.

The one I ended up choosing did me well BUT I still feel the commission rate is way too much for what they do particularly in a healthy bubble market. An agent’s level of effort, expenses, and risk doesn’t support the % commission payout.

The problem is innovative commission models of competition is difficult or hampered because the MLS system is a monopoly and difficult to break because of a critical mass of sellers/buyers or something called “network effect” .

Having said this. The financial industry is full of crooked certified investment advisors. In fact take it one step level higher at an industry perspective. All the financial intermediaries (mutual funds, investment industry) are all crooks. The investor gives their hard earned cash and savings to a professional financial intermediary and investor assumes all the risk for a POTENTIAL return. The financial intermediary assumes no risk but makes % of profit no matter if YOU win or lose FOR their so called professional investment advice. Less than 5% of fund managers consistently beat the market over 20 years. That’s a horrible track record.

Where the heck were all the so called CFA banking analyst when the banks and investment companies folded? Don’t they live and breath analyzing this industry?

This sounds like a legitimized scam doesn’t it? How does this differ from the RE scum bags? The Finance folks just dress better and are more articulate and educated.

#39 Peter Wiener on 08.26.09 at 5:28 pm

# 37 big picture guy

Couldn’t agree more on both “professions”.

Even worse is my commercial experience – how can you have a multimiilion dollar property, which they all are now, (warehouse, industrial units, apartment buildings, etc.) listed and not know the ceiling heights or the thickness of the concrete floors or the hydro service when a buyer / tenant needs to know this in order to ascertain suitability for lease or purchase – and i’m talking about their listing , not someone else’s. And its not like they have many of these listings – and they want the seller / buyer to pay a big commision – for what. I agree it is a monopoly in CDA, but don’t expect any relief from the ‘anti-combines laws’ governing such monopolies.

I was really hoping that the advent of the internet would break their stranglehold on RE transactions and listings. NSL (No Such Luck) on that one.

Don’t get me started on the brokers, but I hear ya!

#40 View from the South on 08.26.09 at 5:42 pm

We were feeling a little left out of the whole real estate is going up thing down here so…

http://www.windsorstar.com/business/Housing+sales+Windsor+unemployment+rate+should+drop+next+year+economist+says/1931972/story.html

I can’t go a block without seeing a for sale sign here in Windsor this is totally a buyers market and I can’t see any reason for it to change for years. And, of course our unemployment numbers will drop next year. When the benefits run out you are no longer unemployed and so it follows that Windsor’s official unemployment numbers will go down.

#41 dd on 08.26.09 at 5:45 pm

#9 Kate

…20% of the average home price in Canada… — Garth

Would that be from the highs of 2007 or from today?

#42 dd on 08.26.09 at 5:51 pm

#10 Mike (Authentic)

…Natural gas prices in Canada could fall below $1, report warns…

Time to buy the Claymore Nat Gas Commodity E.T.F. in the month? A true contranian play.

#43 Dorf on 08.26.09 at 6:00 pm

I think that as long as these people can get financing on the deal , they don’t think about how long or how much it will take to actually own it, if they ever do.

There is just too many of them not to have a whole lot of them tank when their situation changes.
I can’t wait for the big feed.

#44 Barb .. a reader in Calgary on 08.26.09 at 6:06 pm

#117 Jake on 08.25.09

Jake,

Thanks for that link.

Apparently Hudson has a forthcoming book, The Fictitious Economy, to explain to general readers “how a corrosive bubble economy is replacing industrial capitalism via debt-financed, asset price inflation with the main purpose of increasing balance-sheet net worth, benefiting a select few while spreading risk among the general population.”

#45 Tallyman on 08.26.09 at 6:14 pm

Scamwow!!! guy looks like he’s in a hurry to get home and post his supply of mac cheese on ebay.

#46 JET on 08.26.09 at 6:35 pm

Say, is anyone going to this?

http://www.torontocondos.com/TheOneHundred

“Transform your personality for success” (!!)

LOL

#47 squidly77 on 08.26.09 at 6:40 pm

alberta goes bust http://www.calgaryherald.com/business/Royalties+income+lead+deficit/1931870/story.html

a look back to 1982 1982 bust

alberta is trapped in a perpetually spiralling death world of boom to bust..over and over and over again

#48 bigpictureguy on 08.26.09 at 6:44 pm

After reading Garth’s blogg for over a year, I’ve witnessed readers or should I say RE Buyers waiting for that magical moment to plow their life savings into home nirvana.

Now they are questioning or ridiculing Garth’s guidance/opinion because the market hasn’t corrected 20% YET. It may or may not happen, then what? Blame Garth? Garth is providing his personal opinion. FREE. You can choose anyone for RE advice.

You must make up your own personal decision within your comfort level and be accountable because nothing is a sure thing in life. If Garth was always right on every call he would be stupidly rich and semi-retired.

For those who are itching to buy RE, it really boils down to this. What acceptable level of risk you can personally live with by analyzing the probability of outcome scenarios.

Outcome A: Price continues to go up

Outcome B: Decline x%

Outcome C: Future Interest Term Renewal at higher x%

Outcome D: Lose Job

Outcome E: B, C, D or some combination of

If you can’t handle the “worst case” scenario within your personal circumstance then you have your answer.

#49 seanmhair on 08.26.09 at 6:44 pm

Its all good here Garth!

Real estate ‘professionals’ present dog & pony show: “Housing sales up in Windsor; unemployment rate should drop next year, BMO Capital Markets economist says” http://bit.ly/16pUSK

In a city with 15.3% (official) unemployment numbers, I cannot, for the life of me, understand the boost in housing sales. Who are these buyers?

#50 Jake on 08.26.09 at 6:45 pm

No problem Barb,
Here’s the link again for anyone who missed it. It was a late post on a previous thread.

http://www.youtube.com/watch?v=3pwAFohWBL4&eurl=http%3A%2F%2Fvideo%2Egoogle%2Ecom%2Fvideosearch%3Fq%3Deconomist%2520interview%26sourceid%3Dnavclient%2Dff%26rlz%3D1B2RNFA%5FenGB270%26um%3D1%26ie%3DUTF%2D8%26sa%3DN%26hl%3Den%26t&feature=player_embedded#t=135

Hudson does present his ideas in a refreshingly clear manner.

#51 X on 08.26.09 at 6:58 pm

#9 Kate – to simplify, just try to buy your future home, at the lowest price, and pay it off as fast as possible.

In your example, just think about how long it would take you to work and save 80K, you would have to earn at least 160K, after taxes, you would have 80k. How long would it take you to earn that much? And thats assuming you have no expenses. Personally, I would rather wait it out, than slave away to pay out that much for the same house.

That is assuming the market does correct that much.

Until it corrects to a reasonable level, I would rather not have my $ in RE.

#52 CTM on 08.26.09 at 7:22 pm

Can I say this? Randomly? Nothing implied?

“Dou

No. — Garth

#53 Republic_of_Western_Canada on 08.26.09 at 7:25 pm

U R confused,

DELETED

#54 Gord In Vancouver on 08.26.09 at 7:45 pm

If you watch the rest of Ian’s video blogs, you’ll find that he’s not a bad guy – some of his videos are quite educational.

Hundreds of thousands of Vancouverites are praying that the video Garth posted today isn’t an exaggeration or based on a buyer who can only afford property at today’s interest rates.

Ian, as we speak, just lifted a cup of champagne as today’s Greater Fool post will give him business he couldn’t have acquired through conventional means.

#55 kw on 08.26.09 at 7:48 pm

In response to #48 I have kept track of the # of listings on mls.ca for Windsor and a number of other cities across the country. (also Penticton. I believe someone spoke about it yesterday?) This is just something I have been curious about so I document nos for a relative area almost on a daily basis.
Jan 2 Aug 26
Penticton 557 742
Fort Mac 498 556
Windsor 2411 3033

Granted, we have no way of knowing whether the homes (all styles) have sold, been delisted, or what have you. All I am saying is that I think the msm and the economists, realtors etc. may be bending the truth a wee bit.

#56 blobby on 08.26.09 at 8:15 pm

@49 : Jake.

The whole idea of just wiping out debt of a person who’s overborrowed while letting them keep their assets – makes my blood boil (as someone who’s in credit and has never borrowed more than he can pay back).

“what you cant afford that 700k mortgage after all? Thats okay.. you just have the house and dont worry about paying any of it back”

Sigh

#57 blobby on 08.26.09 at 8:24 pm

In other words..

Buy during a bubble – you’ll be RICH!!! But it doesnt matter if your property loses value, we’ll just wipe out your debt!

Win win situation!

Sure – wipe out someones debt, but take away the thing they borrowed against while doing so… Hang on, we already have that – it’s called foreclosure and bankrupcy.

#58 Elle on 08.26.09 at 8:31 pm

Well, well, well……

I’ve been a little confused, after reading these last two blogs. All this talk about how far RE prices could fall.
The disquiet around this subject is palpable. I’m
baffled by the seeming contradictions myself!

Garth says, he never said crash …. he said correction –
15% to 20%. Hmmmm, maybe so but….does this sound like 15-20%

AFTER THE CRASH Pg 144.
“Below are the approximate price reductions from the peak to the trough which will have taken place in both countries by the time the housing market is finally re-inflated by a torrent of pent up demand

———————————————————- United States 1st wave 17% 2nd wave 40-55%
Canada 15% 35-50%
———————————————————-
These final numbers will undoubtedly be controversial,
with the realestate community in Canada scoffing at the possibility that an Edmonton home which sold for
$400,000 in 07 could be changing hands in 2010 for
$160,000 or less. But chances are I may be too conservative in my estimates”…….

Also page 145—2ND statement “If you cannot afford to see the value of your property cut by a third or
a Half, sell.”

Now, maybe I’m not understanding this very well….please explain……….did I miss something?
what’s changed?? Maybe I read too much.

Maybe. But it’s not over yet. — Garth

#59 Turkey on 08.26.09 at 8:33 pm

Gord 53,

Ian Watt is not a bad guy? Maybe so, but this video sure makes him look like a twit. In any other profession (except politics, natch) this kind of unprofessional behaviour would get kicked to the curb in short order.

#60 Elle on 08.26.09 at 8:36 pm

Sorry that graph shot all over the place.
you can see canada is 15% in 1st wave and 35-50%
in 2nd wave (if you can’t figure it out ….buy the book!)

#61 View from the South on 08.26.09 at 8:36 pm

It gets better, they’ve updated the story!

There’s some great stuff in there that we’ve all heard before.

http://www.windsorstar.com/business/Signs+awakening+Windsor+comatose+housing+market/1932977/story.html

Overheard this conversation at a Windsor business today. “I hear congratulations are in order. You’re so lucky to be getting out of this town.”

#62 sunburned canuck on 08.26.09 at 8:45 pm

Hey Chaostrology #22.

Very good!!

#63 CTM on 08.26.09 at 9:14 pm

Sorry Garth!

It was below decks, obviously…

Must go write that offer.

#64 dd on 08.26.09 at 9:14 pm

#57 Elle,

Great point. It is back to fundamentals. Salaries x 3 = affordable house or 30% (or so) of gross income goes to rent/mortgage.

#65 dd on 08.26.09 at 9:18 pm

#48 seanmhair

….Housing sales up in Windsor; unemployment rate should drop next year….
You can spin the numbers anyway you want. Unemployment rate will drop because more people will give up looking for work.

#66 dd on 08.26.09 at 9:24 pm

#43 Barb .. a reader in Calgary

…benefiting a select few while spreading risk among the general population….

Sounds like higher taxes to me.

#67 Not Garth on 08.26.09 at 9:35 pm

Garth,

Enough with the this and the that, the bank and the bankers, the unemployed and the deficit.

We are all waiting and wanting to hear your views on how Vancouver’s massive hith psi bubble will pop.

Pray tell?

#68 Calgary_rip_off on 08.26.09 at 9:44 pm

Elle(which book are you quoting) and Squiddly, I would like to agree with your dismal forecast for Alberta-your statements dont seem to have any reflection of reality.

Go to the Bank of Canada mortgage interest rates for 1982 on the web. Those rates were at least double what they are now. Edmonton and Calgary are major cities now. To achieve a crash of serious proportions the whole city would have to implode on so many levels.

Natural gas is down temporarily. Its a temporary lack of demand. Oil is down a bit. These things will recover and adjust. What would encourage the Bank of Canada to sell bonds and jack the interest rates? I dont have the answer. Do you?

Just because a person wants housing to be justly priced doesnt make it so. Sure Alberta is a complete joke in terms of affordability. Sure the media and many sellers/realtors are living in a lie of self deception. Unless there is a major upset in interest rates the justification for current ridiculous disgusting prices will continue. The majority of buyers are in a difficult situation: Alberta has no rent controls and they would like to own a house-so lack of affordable rentals puts serious pressure to buy something. Most people dont have the patience or the intellectual skills to deal with the cognitive dissonance required to live in such a screwed up province(that’s what happens when you put uneducated farmers into office people-maybe elect correct officials if the place is going to be priced like New York City). Alberta would be a nice place to live if housing were decently priced. Most people that live here bought before 2004 and therefore that is the prevailing mentality-nobody really gives a damn-because those people are paying probably $1000/month on their big shack and wondering how to spend their next check on toys and how much to overcharge their desperate renter slaves.

So your reality at trying to persuade yourself that this implosion will happen is likely a serious delusion. Maybe focus on something else, heavy metal music(neoclassical shredding anyone?)(?) and hope that what you wants happens. As it stands now a correction will happen not a crushing implosion to Calgary/Edmonton.

#69 Pococurante on 08.26.09 at 9:58 pm

he’s no Jim the Realtor.

#70 Not Garth on 08.26.09 at 10:07 pm

Vancouver, Bubble Epi-centre – pray tell, how do we unfold going forward?

Muchos Gracious Amigo.

#71 Gregor Samsa on 08.26.09 at 10:08 pm

#19 viewwest: I hate to break it to you, but the “next tier” of offshoring is well underway. The engineering profession has been decimated by it (engineering and manufacturing go hand in hand).

I have to chuckle at all the people doubting Garth. It’s not exactly rocket science:

We have:
– Record, or near record high home prices in Canada.
– Average home prices in the major cities that are many times more then what the average Canadian can afford without going into massive debt.
– Record low interest rates.

Meanwhile, we also have:
– Record high provincial and federal deficits.
– One of the worst global economic downturns in history that is far from over.
– High and rising unemployment.
– Continuing layoffs.
– Bloated public sectors (no layoffs there!)
– Stagnating or decreasing wages for average Canadians.
– The virtual guarantee of higher taxes in the future.
– The virutal guarantee of higher interest rates in the future.

If housing prices keep going up and up, who is going to be buying all these million dollar suburban houses? Certainly not underemployed, overtaxed Canadians!

#72 Jake on 08.26.09 at 10:10 pm

Blobby,
I believe his point is that the banks are no more deserving of a bailout than those holding the mortgages. He also claims that bailing out the banks and forgetting the people will not fix the economy. Yes, I get your point, a lot of people have made stupid choices. But let’s be honest, those houses never should have been 700K in the first place and banks should not have deemed buyers eligible for the mortgages either. It is obvious that someone has to be bailed out. Does it really make sense that the people bail the banks out and then lose their houses anyway?

#73 IRK on 08.26.09 at 10:11 pm

Since real estate is definitely the mainstay on this blog then maybe you can go a little more into depth about Canadian specifics. Do you actually believe all markets will fall or are you willing to predict where some money can still be made. For instances will Halifax fair as badly as Vancouver or Toronto? How about North Bay or Ledthbridge? I believe that you can make some serious money still in parts of Canada, but I wonder if you do as well?

#74 InvestX on 08.26.09 at 10:18 pm

Garth, do you still think the stock market will be lower this Christmas then it was in May?

Just make that up? — Garth

#75 Elle on 08.26.09 at 10:33 pm

Hi…# 66

I was quoting from one of Garth’s latest books — “After The Crash”.

—it’s a great read!

#76 Blobby on 08.26.09 at 11:44 pm

@Jake – The problem is – it doesnt fix the problem of overpriced property.. only makes it worse.

For example – So the government has bailed you out of your 700k mortgage. You now have a home for “free”. You can now sell said home for 700k, and now you have 700k to put towards the next property, hell may as well make it 2million the governments likely to bail you out again!

see?

#77 JET on 08.27.09 at 12:40 am

Every word of this song applies to this discussion…

Master of the House!

http://www.youtube.com/watch?v=gdavdTKfCo4

#78 Gosh on 08.27.09 at 2:14 am

No Ian, WRONG! this is another example of cheap easy credit. Simple.

#79 dd on 08.27.09 at 8:06 am

#47 bigpictureguy

…Now they are questioning or ridiculing Garth’s guidance/opinion because the market hasn’t corrected 20% YET….

Hey, he wrote a book about it. If it happens he will say “I told you so.” If it doesn’t he will say “prove to me where I said that.” You can’t have it both ways.

#80 D from London, ON on 08.27.09 at 8:21 am

#22 – Chaostrology

I loved your re-write. Got anything to the tune of “Sundown” or more ambitiously “Canadian Railroad Trilogy”?

I’ll get you started on CRT:

“There was a time in this fair land when cheap credit did not run
When the 25% down/25 year amortization stood alone against the sun”

Hmmm…it needs a little work.

#81 VanKouver on 08.27.09 at 10:18 am

The most painfully obvious problem with the video posted is that Mr. Watt is driving and making the video at the same time. Some people would call this multi-tasking, I’d say it’s not Watt’s brightest idea based on volumes of sound research evidence. If anything, this video should be a clear indication TO ALL PEOPLE that Mr. Watt portrays himself as a high risk taker in at least two facets of his life – driving and RE. This video should, to some extent, scare ALL people including those that are buying the drama that the RE folks are selling. You could say he’s heading for the cliff in more ways than one, and even EGO can’t help you then. YIKES.

VanKouver

#82 bigpictureguy on 08.27.09 at 11:25 am

#77 dd on 08.27.09 at 8:06 am
#47 bigpictureguy

Did he predict timing on the 20% correction? (if he did then my appology)

Do you believe everything you read at face value? No. You research and assess all objective facts and make an educated decision.

For your information nobody can predict exact timing in stocks, RE or commodities prices particularly very big price movements – not even legendary guru Warren Buffett can. They can predict general directional trends or patterns but not timing.

#83 bigpictureguy on 08.27.09 at 11:49 am

#77 dd on 08.27.09 at 8:06 am
#47 bigpictureguy

Why did one latch on to Garth’s book and hang onto his every word like the bible up to this point? Wasn’t it your choice based on your independent research? Or were you bias latching onto an opinion which supported your RE purchase dream?

How much is Garth’s book? $22
How much does it cost to view his blogg? Free.

Perspective: A person’s RE purchasing dreams based solely on the premise of a $22 book and free blogg is not only misplaced but naively delusional.

Get a grip people $22.

Hey, you can get the latest Re/Max or LePage report for free, dude. Or go hear Brad for $189. I’m only a guy with an opinion, talking to an anonymosity. — Garth

#84 [email protected] on 08.27.09 at 11:59 am

#10 Mike (Authentic)

Nat Gas at $1 !!!! Great. Glad I bought so much Nat Gas etf a year ago thinking oil is going to $200 and taking Nat Gas up huge with it. Who would of guessed oil now @ $70 and Nat Gas at these levels. What a long and painful endless drop.

With no place to store it maybe we’ll be seeing Nat Gas for sale in the Dollar Stores along with cards and 2 for $1 pops.

Unfortunately unlike oil, Nat Gas is not easily and cheaply able to be transported to China, India, etc. So this is basically an indicator of how bad the North American economy really is.

Think you will ever see a cost saving on your heating bill? I doubt much if any and if you decided to lock in with one of those 5 year fixed rate plans at the peak, Ouch.

#85 bigpictureguy on 08.27.09 at 12:05 pm

“Hey, you can get the latest Re/Max or LePage report for free, dude. Or go hear Brad for $189. I’m only a guy with an opinion, talking to an anonymosity. — Garth”

Clarification.

Garth I actually read your book and view your blogg daily and agree with your arguments.

I’m tired of people bitching at your because the market hasn’t corrected yet and expect you to predict timing.

I just think their expectations are outrageous for $22. It’s actually great value for the money but to expect you to be fortune teller with timing accuracy?

Jesus what next? Get Garth to inspect their RE purchase and negotiate on behalf?

#86 bigpictureguy on 08.27.09 at 12:26 pm

“Hey, you can get the latest Re/Max or LePage report for free, dude. Or go hear Brad for $189. I’m only a guy with an opinion, talking to an anonymosity. — Garth”

I’m actually on your side Garth. Just tired of people expecting you to be RE God for $22.

#87 dd on 08.27.09 at 1:20 pm

#81 bigpictureguy

“Why did one latch on to Garth’s book and hang onto his every word like the bible up to this point?”

No. I agree with his take on RE, taxes, interest rates, and peak oil in the future. I actually sold my house in the burbs in Calgary and moved downtown and haven’t looked back. Sold at the height of the market and did really well.

But just like any economist or predictor they all hype the correct calls and sweap the bad calls under the rug.
It is a fact that all have to be aware of.

#88 Men With Hats on 08.27.09 at 1:34 pm

Propaganda from the ministry of lies :

OTTAWA — The Canadian Real Estate Association has dramatically increased its forecast for sales of existing homes this year, to about where they stood in 2008 before the recession took hold.

The real estate body says the revision was based on a much stronger-than-expected second quarter in the home resales market, which it says climbed throughout the spring and into July.

Home resales are now expected to total 432,600 units this year, the association says, only 0.4 per cent less than 2008.

Previously, the expectation was that sales would plunge 14.7 per cent this year.

As well, the average sale price of homes is expected to increase 1.5 per cent this year.

British Columbia is projected to post the biggest increase with 72,500 units sold, 5.2 per cent higher than last year.

The drop-off in sales in other western provinces have been revised downward.

Ontario is the other province expected to top last year, with a 0.5 per cent increase.

Association president Dale Ripplinger says the difference in the resale housing market now, compared to the beginning of the year, was like night and day, especially in the West.

The improved expectations this year may dampen sales in 2010, however.

The association expects resales to increase 5.3 per cent next year, a lower rebound than previously thought, largely because some home buyers will have moved up their purchasing plans.

#89 Men With Hats on 08.27.09 at 2:48 pm

Ian Watt come off as a wannabe wiseguy .

#90 Peter Wiener on 08.27.09 at 3:06 pm

# 66 Calgary Rip Off

Oh ye of little faith!
Sounds a little like capitulation to me.
Time will tell.

I guess you haven’t lived long enough in Calgary or you, like many others on this blog have short and inaccurrate memories. Look at the history of housing prices in your city for some perspective.

#91 bill on 08.27.09 at 3:08 pm

#22 chaostrology
Please ,could we [the cornstars] use your lyrics. That really was clever mate. I promise we will give full credit to you. Hey and I will email a mp3 [ when its done] to garth if he would be so kind to pass it on. Thanks in advance bill
ps Hopefully Gordon will go for it…..

#92 Peter Wiener on 08.27.09 at 3:09 pm

# 86

To be expected after a very long economic expansion (read complacency sets in) and dropping mortgage rates to all time or at least multi-generational lows.
Remain calm.

#93 Peter Wiener on 08.27.09 at 3:11 pm

# 69 Gregor Samsa

Wow – found another Canadian who can think critically!
Hey man, we’re on the endangered list! Maybe the WWF will start a fund in hounour of us few! LOL
Thanks for posting that so straight and so well!

#94 Vancouver_bear on 08.27.09 at 4:30 pm

http://www.ticketweb.ca/t3/sale/SaleEventDetail;jsessionid=Zwgq04R1cti33WKne+JvaA**.node1?dispatch=loadSelectionData&eventId=2172604&jsessionid=Zwgq04R1cti33WKne%2BJvaA**.node1

General Admission – $189.00

Pay this much to see this bold guy……gimme a break.
I will better go for David Copperfield’s show, it will cost less and will be more entertaining.

#95 Men With Hats on 08.27.09 at 4:42 pm

“Hey, you can get the latest Re/Max or LePage report for free, dude. Or go hear Brad for $189. I’m only a guy with an opinion, talking to an anonymosity. — Garth”

“Anonymosity” ROTFLMAO

#96 Live Within Your Means on 08.27.09 at 5:03 pm

I was doing a search on Garth’s site today and came across your post below which I had not read.

#65 Peter Wiener on 08.26.09 at 5:58 pm

# 64 Live Within Your Means

“Many people on this blog consider a house as an investment.”

“Sorry mate, have to disagree.

You might have paid a reasonable multiple of your income when you purchased your house (bet it wasn’t 7 times like it is today) and the world wasn’t going thru the economic collapse it is now, with structural unemployment and the debt loads that exist today.”

No it was more likely 3X one of our salaries when we purchased it more $116.00 in ’91 with 25% down. My sis & I had previously owned a condo townhouse. (BTW, my sis & I got hit with 19% mtg during that time.) I & my husband bought my sister’s share. Two years later my husband and I sold it. He moved here, took a 6 mo. English As a Second Language and his training in France and work experience in Quebec was not recognized. He worked as a labourer for 6 months then finally got hired on as a hydraulics tech, not earning a good wage and no security. When I moved here I only applied to the provincial govt. because wages were so low here and benefits non-existent. Do you fault me for choosing to work for the best employer I could find. I’m sure you would have done the same.

We saved, ate lots of KD and bought what we could afford, based on one of us losing a job. We sold my Honda and kept his Pony as mine was worth more.

“Ergo, one has to view and consider the financial commitment to a home with a far more gimlet eye so as not to potentially ruin one’s finances going forward.
You didn’t have those concerns when you bought and the nominal values were much lower and you didn’t have to commit financial suicide to put a roof over your heads. Some people today do, so forgive them for being a little money minded!”

Check my comment above. My husband remodeled our kitchen/dining areas, etc. in our last place. We dumpster dived at Ikea for useable materials. Please don’t presume you know anything about our lives. We looked at lots of homes in the area, much more expensive than our home, but did not want to be a slave to a mtg. Ours is assessed the lowest on the street. My DH has made many renovations in our home inside and out. We didn’t have to get permits because of its structure. Its not our fault that people choose to go into massive debt to buy a home.

“I feel sad for them.”

I do. So many choose to get in over their heads, wanting granite countertops, stainless steel appliances, etc. I know several young couples who purchased way beyond their means, 0-5% down, and no real secure job. Time will tell.

“Nice tone of condescension there!”

Its anything but Peter.

“I feel sad too because the powers that be have, through overregulation of deveolpment, huge development charges, restrictive zoning, etc. and through sanctioning ridiculous lending standards, lessened downpayments and higher lending ratios than in your puchase days have driven costs and prices through the roof.”

I happen to totally agree with you.

“Are you really sad that these actions have inflated the price of your house way beyond anything reasonable? Didn’t think so!”

As I said Peter, I live in NS. We bought in ’91 for $116K. Our assessment is $186k tho we know its worth much more. But, it hasn’t inflated at all in comparison to other homes in the area.

“Bottom line, you had more economic certainty, paid less for your home as a function of your income, used less leverage (bigger downstroke) and had less taxes to pay and fewer calls on your cash flow than most prospective buyers on this blog face today. And a far more certain economic outlook and possibly job security.”

I lived in the ‘Savage Day’s where our salaries were cut 3%, we had to take days off without pay, etc. I never recouped those cuts for my pension. And, when the prov. & the feds came to an agreement so that I could buy back 3 years of service with the Feds in Ottawa, I chose to do so even tho it cost us lots of $$. Should I have not taken advantage of that as well.

“How do they find the time in places like Vancouver to “contribute to their community” when two wage earners are busting their butts to cover an eggregious mortgage payment which now goes on almost twice as long as the mortgage you paid I’m guessing.”

Its their choice to live in Vcr. I went there on vacation in ’75, staying with 3 girlfriends and saw the costs of RE and life. For various reasons, including the cost of living, I chose not to move there.

“As the saying goes …walk a mile in someone else’s moccassins before you judge them…”

I have walked in other shoes and know what it’s like.

“Smart guys those Native Indians! They really knew about community and they sure as hell didn’t have a two car garage!”

rant off

#69 markintheprairies on 08.26.09 at 7:06 pm
To Live within your means:

“I am very glad for you; an indexed pension, a 2nd pension not indexed, a large inheritance assured. And virtue, what a wonderful life.

And, of course, nobody’s income is being transferred to you via the indexed pension; that would have spoiled its taste.

http://fairpensionsforall.blogspot.com/

I never said there would be a large inheritance – just the sale of my husband’s parents home in France – split 3 ways. Like Peter above, you presume too much. Sounds like both of you are envious and like to put down boomers, many of whom ‘lived within their means’. I did without growing up, worked my ass off since a young teenager, and tried to ensure that I would not have to do without in my senior years. Its not my fault that the younger generation is struggling. I feel for them but know many that have been spoiled by their parents who’ve provided all the ‘toys’ and now expect a free ride from society.

#97 Live Within Your Means on 08.27.09 at 6:11 pm

Oh another thing Peter Weiner – My DH took a 45 week course in Automated Manufacturing Technology (robotics and CNC mfg. at NSIT) after working as a labourer when he moved to NS. IMP needed people with those qualifications, but in the end they only wanted people younger than he that they could mold to their culture. He was too old, tho he was one of the top of his class.

Two years after we bought our current home he was laid off from his job. The co. went under. I convinced him to make a change in his career. I taught him DOS and about PCs when he took the AMT course and he really took to PC’s. He then took another 50 week course at the Information Technology Institute and graduated in ’95. We paid $10K for his course but he did receive EI during the time. He’s now an IT Supervisor. We were glad that we bought a home based on one salary. And, BTW, we took a mtg. whereby we could double up mo. payments (which we did while both working), and put 10% down annually on the original mtg. And, when our bank (TD) sent us a notice to say they’d start charging us for cheques/debits, my DH went to the Bank Manager and threatened we’d move our business. The BM relented & signed his business card that we’d never pay any fees. He also gave many of his cards to my DH to give to his friends, who were also threatening to move their business. I had been a client for at least 25 years with their predecessors. We learned before that that one can negotiate. I’ve never paid any bank fees, tho they’ve lots of money off us.

Been checking out sites re Real Return Bonds and will study RRB’s for Canadian Dummies this weekend. So far, it sounds like something we’d be interested in. Thanks Garth for the H/T.

#98 Live Within Your Means on 08.27.09 at 6:28 pm

Bank bonus culture to come under spotlight at G20 talks
Finance ministers from the Group of 20 leading economies are expected to rebuff French calls for strict rules to limit bonuses in the financial services industry at a meeting in London next week.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6094863/Bank-bonus-culture-to-come-under-spotlight-at-G20-talks.html

Watched this on TV5 last night. Sounds like a good move. Tonight they said that the British PM is willing to look at it.

Lots of sites on the net about it. Time will tell, but I think its about time. Most would have to agree to make it effective.

#99 Peter Wiener on 08.27.09 at 6:44 pm

# 95

“Sounds like both of you are envious and like to pu down boomers, many oif whom lived within their means”

Talk about making assumptions.

First off, I am a later boomer (in my 5th decade on this world).

Secondly, not envious of anybody, completely self made and retired and have been a fairly succesful property owner and developer as principal (my money on the line) for almost two decades.

Thirdly, don’t blame others for interpretations of what you write that may be ambiguous.

Fourthly, that is how I interpreted your post and you have clarified some points, thanks for the clarifiction.

Fifth, no disrespect to you or yours, it just read pretty ‘smugly’ in your post. You’ve communicted well now and I see where you are coming from, apologies if it caused offence.

Sixthly, a lot of families that are decent and hard working can not get ahead (read save) as life seems to be much more expensive as oulined in my last post directed at you and so instead of being able to save a downpayment or have no well to do family are seduced into these onerous finacial burdens and it ends up ending their family.