Vultch USA

Loonie
Toll of the loonie:
Manufacturing takes a big dive.

jacksonville1

There are 7,952 houses for sale in Jacksonville. That Florida city has a population of about 820,000 and an average temperature of 76 degrees.

By way of contrast, the GTA has 15,984 properties currently for sale and 5.5 million people living on the north shore of Lake Ontario. This week the average temperature is 7 Celsius. I mean, what’s to compare?

Other than this: There’s one house for sale in Jacksonville for every 100 people. In Toronto, there’s only one active listing for every 345 residents. And, given the laws of supply and demand, you’d expect real estate to cost more in Toronto, even if the climate sucks. And they both do.

In the GTA, the average sale price of a home last month was $406,877, up 10% in a year.

In contrast, the median house price in Jacksonville is $125,000, and that number has collapsed in the past 12 months by 18.1%.

So, what gives? Why is a modern city of almost a million people founded 220 years ago, in a great climate in an industrious state in the cradle of capitalism in the real estate crapper, while houses in frosty T.O. are selling for the highest ever, and 225% more?

Are they crazy, or are we?

J 11
Looking for a cheap Fla vacation home?
3 bedrm, 1 bath, 963 sq ft, detached, central air.
$17,000 US

Truth be told, I’d say there’s delusion in both cities, just as there is in Vancouver compared to SoCal or Calgary versus Phoenix. Americans have largely turned their backs on an asset class which has bitten them deeply and caused such a destruction of wealth. And how can ya blame ‘em? Right now more than 16 million US families are under water on their mortgages – owning more on their home loans than their homes are worth.

The value of US houses now in negative equity is $3.4 trillion. In Nevada, 66% of families with mortgages are under water; in Arizona, it’s 51%; in Florida, 49%; Michigan, 48%; and California, 42%. And generally these are people who didn’t have subprime mortgages or borrowed above their means. They were simply victims – trapped in their homes when real estate values crashed.

And that’s one reason housing stays cheap. So many people desperate to get out, that housing prices in Jacksonville have dived almost a fifth in one year.

Meanwhile in cold Canada, as witnessed by today’s CREA numbers, another kind of delusion – an urban myth that real estate values will rise continuously and, despite stagnant incomes, rising unemployment , economic uncertainty and the inevitability of higher taxes and interest rates – people who do not buy today will forever be locked out. Buy now, or never.

So, here’s my conclusion: People in Toronto and Vancouver are as nuts as those in  Jacksonville and Phoenix. But the outcome is radically different.

In the north, danger. In the south, opportunity. Both markets have only one direction in which to travel over the next five years. Not hard to figure that out.

And with the dollar at par, well, it’s feeding time.

Just remember what I told you.

mortgage
In the news:
Mortgage rate hike could cool housing rebound

111 comments ↓

#1 Jack the Lad on 10.14.09 at 10:05 pm

Dow hit 10,000 today…

#2 Kettle...Pot Calling on 10.14.09 at 10:08 pm

Median family income in Toronto is almost double that of Jacksonville ($75K in T.O., about $40K in Jacksonville). And there are significantly more higher paying jobs in Toronto than in Florida.

Weather is meaningless in this comparison. If weather mattered, wealth would be concentrated globally around the equator. It’s clearly not.

I love hearing from the defenceless. — Garth

#3 Live Within Your Means on 10.14.09 at 10:09 pm

We’ve got the cash to buy one of those houses, but people & life in Fla or Arizona is not our style. Can you find us a cheepie in southern France or Italy :-)

#4 Not Garth on 10.14.09 at 10:30 pm

Garth

Listings in Vancouver are rising, higher now than they have been in months in fact. Sales have plateaued, and appear to be gradually waning (but still quite robust).

When (WHEN) does the tide turn?

#5 lightning_kash3 on 10.14.09 at 10:52 pm

Will Calgary housing drop as much as Vancouver and Toronto?

#6 Marina on 10.14.09 at 11:20 pm

Freinds just sold their house in GTA Toronto -they got 4 offers and sold the house $ 30k higher asking price. they are happy.

#7 s33knges8 on 10.14.09 at 11:20 pm

It’s not looking good for us side-liners today; I think the curtain is starting to close and we may have to start looking for our next act or buy some insanely expensive re in Vancouver!

#8 nonplused on 10.14.09 at 11:34 pm

Yup. At a market top everyone wants in. At the bottom, nobody does.

It’s every market too. Anyone remember beanie babies? Tulips? Gold?

In 82, when gold hit $850, everyone wanted in, even though it had only been delinked from the dollar at $42 only 9 years before. There was money printing, sure, but not like that! But at $270 in 2000, nobody wanted it, even though inflation had caught up and run ahead.

Where we are now I don’t know. Lots of money printing for sure, but no inflation. Yet.

If you can get a job state side, housing is looking pretty good. And their unemployment rate isn’t that much worse. Sure, it’s understated, but so is ours.

I’ve posted here before that I thought new homes would lead the way lower. With a time lag, builders can adjust their product and still be profitable bringing new product on line. They are still $100,000 dollars away from shutting down on the “average” home. They will discard the big models first, and keep pumping the smaller ones out.

Also I have noticed around here a bunch of high end homes move, albeit after many, many months on the market, and alwaysa after pretty hefty reductions in asking price. But they were still the better part of a million dollars, so that could be skewing the stats.

#9 Vince on 10.15.09 at 12:09 am

Doesn’t Jacksonville have significant flood issues as well?

Toronto is great because:
-no earthquakes
-no tornadoes or hurricanes
-no flooding (except beaches)
-low crime
-stable government
-exceptional services
-culture
-financial capital

That being said, if you have $200,000 kicking around, and can find a property in Jacksonville near a beach or golf course, that isn’t in the middle of a flood-plain, it might be worth investigating. Then again, you might prefer having the $200,000 cash.

Yeah, those dumb Americans live in Third World squalor and a police state. — Garth

#10 Shawn Allen on 10.15.09 at 12:10 am

With our high dollar and the cheap Florida houses, this is the opportunity of a life-time for Canadians to buy property in Florida.

For retired people with a bit of money, why not buy in Florida now and live there in winter or even mover there? Why not start transferring money into U.S. dollars now? Sure our dollar may go higher yet so don’t transfer all the money at once. But our money is at a 30 year-high to the U.S. (save a brief period of insanity in 2007).

If the notion of buy low and sell high means anything, then with the American dollar at a generational low it might make sense to buy.

One problem, Florida tends to charge way higher property taxes to non-residents, count on a high prperty tax bill.

With Florida house prices this low, the next problem may be people selling to avoid property tax…

It is surely going to be very ugly in Flordis in terms of their State budget.

#11 ralph on 10.15.09 at 12:16 am

The only problem that I see is that you can only stay in the USA for six months at a time visiting from Canada. Still a great place to be in the winter. The best of both worlds.

#12 AA on 10.15.09 at 12:19 am

Jacksonville, there’s a reason why that piece of dirt is dirt cheap. It’s a town filled with dirt bags. If you buy a 17k house don’t ever plan on visiting.

http://www.clrsearch.com/RSS/Demographics/FL/Jacksonville/Crime_Statistics

(a) So buy a house outside of town. (b) Now compare that to East Hastings. — Garth

#13 Shawn Allen on 10.15.09 at 12:20 am

If house prices continue to sink we will have one very angry middle class in America.

Already the poorer people in the U.S. are very angry and probaly have the right to be.

It’s one thing when there were lots of rich people. But now we have Wall Street fairly flaunting obscene bonuses in the faces of everyone even after bail-outs and after proving they were world class at losing money in 2008. Everyone making under probably $200,000 per year (which is what 99% of Americans?) must find the Wall Street bonuses to be truly offensive.

I mean when poor people could not pay their mortgages adn the banks suffered sub-prime losses, they first bailed out the banks and not the poor people??? are they nuts?

So we have got probably tens of millions of exceedingly angry and desparate people in the U.S.

And guess what? They have guns!!

Is this the stuff of revolution or what?

What if Obama starts acting like a real socialist and regulates and taxes the crap out of everyone making decent money??? A lot of people would support that.

#14 Jan Etter on 10.15.09 at 12:36 am

“I love hearing from the defenceless. — Garth”

Garth, I know this is your blog and you therefore have the right to say what you want, but this struck me as an insubstantial response to a reasonable (though opposing) viewpoint, particularly given you had just yesterday chastised “If you can’t beat the argument, beat on the man”.

Just compare Vancouver and the area around San Francisco and his ‘argument’ evaporates. Of course there are regional differences, but this myth that Canada is a superior country is just that. There is no justification in financial or economic terms for the housing premium here. We charge each other too much and reap the consequences. That should be obvious. — Garth

#15 Blobby on 10.15.09 at 12:46 am

Quote from story garth linked to : “If you didn’t buy at the beginning of the year, then you really missed out,” said Mr. Pilon of Keller Williams Ottawa Realty. “There’s no inventory left, and prices are heading higher as everyone scrambles to make a purchase before rates spike.”

*sigh*

#16 Onemorething on 10.15.09 at 12:51 am

The DOW can hit 12,000 and GOLD 1200 its not going to matter when the crap hits the fan. If you wanted to play it was sooooo 6 months ago.

The is no USD collapse, just a blip back down to where is was in 2008 before the collapse, we are just going to revisit it all over again.

GOLD will dump, USD will jump, Oil over $100 and equities 50% off.

The global elite, the idiots (post bankers) now running the finances for Obama, Bernanke, the press and lets not forget the RE people, tried the play, it worked to put a bottom under the “V”.

The “V” now when re-initiated will hit the bottom and reemerge as a “L” and we will all just sit around spinning our wheels for 10 years (us healthy ones).

Start living your life thinking longer term kiddies, you might than see the cracks in your reasoning especially where Canada will end up after all this is done.

Hold on tight! But wait, better to let go of your insecurities and keep your powder dry as being a CONTRADICTORIAN may be the only safe route.

#17 Jim on 10.15.09 at 1:05 am

Thanks for the daily posts Garth. They are appreciated.

#18 Aussie Canadian on 10.15.09 at 1:32 am

Australian Reserve Bank governor Glenn Stevens has warned homeowners to brace for the prospect of a rapid rise in interest rates.

In a speech in Perth today (Oct 15), Mr Stevens has warned the RBA cannot continue to keep interest rates at record lows and suggested the rapid round of reductions announced last year may be followed with rapid increases.

“If we were prepared to cut rates rapidly, to a very low level, in response to a threat but then were too timid to lessen that stimulus in a timely way when the threat had passed, we would have a bias in our monetary policy framework. Experience here and elsewhere counsels against that approach,” Mr Stevens said.

Balance of article: ttp://www.theaustralian.news.com.au/business/story/0,28124,26213424-5018001,00.html

#19 Dave on 10.15.09 at 1:39 am

hmm, seems intersting for sure. I heard there are serious tax implications for someone from outside of the U.S to purchase there. I haven’t investigated further because of this.

#20 Peter on 10.15.09 at 1:55 am

“And there are significantly more higher paying jobs in Toronto than in Florida…”..You must be working at the 50th or 60th tower of one of those banks in Downtown….US Salaries are much higher than Canada but benefit wise, Canada has a better benefit packages at work though…We will soon get paid $ 500,000 a year for cleaning washrooms because US government is doing QE’s and it is really hurting the US and now, it will going to hit us in Canada economic wise NOW if our neighbor down south decided to print more money and devaluing their currency like toilet paper !!! Lots of JOBS will be loss if US -> CAD is hitting 1 or higher !!!

#21 Confused on 10.15.09 at 2:11 am

Today, you note that prices are up 10% in the GTA. I trust that the % increase came from the real estate board? Yesterday, though, you questioned the credibility of those statistics by pointing to the Stats Can stats, showing decline in prices (admittedly new home prices).

Why now give credibility to realtor stats?

Give me an alternative. — Garth

#22 HouseBuster on 10.15.09 at 3:11 am

Yeah Garth, as stated in #3, don’t really care for Fla or AZ… Anything cheap in Barcelona or anywhere else in Spain?

#23 Onemorething on 10.15.09 at 4:47 am

The DOW can hit 12,000 and GOLD 1200 its not going to matter when the crap hits the fan. If you wanted to play it was sooooo 6 months ago.

There is no USD collapse, just a blip back down to where is was in April through July 2008 before the collapse, we are just going to revisit it all over again.

GOLD will dump, USD will jump, Oil over $100 and equities 50% off.

The global elite, the idiots (post bankers) now running the finances for Obama, Bernanke, the press and lets not forget the RE people, tried the play, it worked to put stop the bottom “V”.

The “V” now when re-initiated will hit the bottom and reemerge as a “L” and we will all just sit around spinning our wheels for 10 years (we being the healthy ones).

Start living your life thinking longer term kiddies, you might than see the cracks in your reasoning especially where Canada will end up after all this is done.

Hold on tight! But wait, better to let go of your insecurities and keep your powder dry as being a CONTRADICTORIAN may be the only safe route.

#24 Daystar on 10.15.09 at 4:53 am

Its nice to see some common sense exercised in the banking industry for a change. Something seriously had to be done. The whole industry knows there is going to be damage from not doing it sooner, but they are excercising damage control better late, than never. And who else was going to do something? There was no common sense coming from the Conservatives through stiffening regs in CMHC in light of a low interest rate environment. There’s been no common sense coming from CMHC the whole time they’ve been in power. Nevertheless, its better late than never… and I’ll take it.

Got to admit, it makes me wonder quite seriously if this blog didn’t in some way make a serious impact on this weeks moves… it couldn’t have… could it? Its not a far reach to think that it did. Then again… the bond markets…. :-)

I got a chuckle from your last link, Garth. (lol) It was from this:

“If you didn’t buy at the beginning of the year, then you really missed out,” said Mr. Pilon of Keller Williams Ottawa Realty. “There’s no inventory left, and prices are heading higher as everyone scrambles to make a purchase before rates spike.”

Nothing could be further from the truth. As mortgage affordability drops, so go prices as everyone well knows. Its the sellers who will be scrambling to sell their homes before the rates spike. Inventories will build as buyers smell blood knowing what reduced mortgage affordability will do to the market. The boom in real estate has crested. Welcome finally, to cheaper homes and reduced mortage affordability! (finally)

#25 Tim on 10.15.09 at 5:30 am

Whenever you compare house prices and markets between Canada and the United States, there’s one big difference that often goes unmentioned. In the United States, they can use their mortgage interest as a tax deduction on their income tax return. As an American’s mortgage is paid down, the size of their mortgage interest deduction also goes down. This gives them the impetus to buy a new home, which gives them another sizeable income tax deduction. Thankfully, we don’t have such encouragement in Canada.

#26 David Bakody on 10.15.09 at 6:04 am

Live Within Your Means on 10.14.09 at 10:09 pm

South of France sounds good …… Try a place called EZE half way between Nice & Monaco …. great health care and very special rates for seniors …. fine wine and wonderful bread … and oh what tasty sweets. Share a place with exceptional friends or family and rent a small place here in the summer. The real world is just on the other side of the Atlantic ….. hello, you can even walk the streets after dark and restaurants stay open past midnight. America is the greatest country on earth …… yea right! they have the greatest crime rates followed by the biggest users of dope ……. and guess what our PM is in awe of Washington with 37% of Canadians sitting at his feet ….. so where to think our futrue is headed?

#27 Fred on 10.15.09 at 6:49 am

An interesting article and somewhat on topic overall

As long as you’re not concerned with CSIS or DHS lol

http://english.aljazeera.net/focus/chinabuystheworld/2009/08/200983011449824699.html

#28 Daystar on 10.15.09 at 7:21 am

And uh… oh yeah. Garth is so on the money with this post! The Canadian economy has been troubling me for some time for the most obvious of reasons. Our loonie racing towards par will decimate manufacturing and breed record trade deficits. We’ve also had rapid hard asset inflation governmental policy going unchecked for what has it been now… over 3 years, longer than Bush’s engineered housing bubble there… and we have record federal deficit spending that is sure to lower our currency at some point and spike interest rates in the long term regardless of the Greenbacks freefall. In case we haven’t caught on, we have become just as fiscally wreckless as the U.S. . As interest rates inevidably rise, hard assets will deflate as mortage affordability falls and in its wake, consumer equity and spending will shrink. Construction, retail, financials, service sectors, they will all feel the fallout. The consequences would be a long, drawn out recession that will be measured in years. The big question that remains is… when. When will interest rates rise…

When will interest rates rise as a result of substantial federal/trade deficits? Deficit spending will surely cause our loonie to fall over time internationally, just as the U.S. is experiencing with their own greenback. The big question is when!

When will the loonie stop rising and fall back below par…

What will the U.S. dollar do… how far will it fall over the next year and when will it begin to stablize…

And when will the loonie begin its own fall from Canadian federal/trade debt…

As time rolls on, Canada will be compared to the U.S. in terms of running up debt. We have a population and economy that is a tenth the size of the U.S. . Running 60 Billion dollar deficits in Canada is the equivalent of running 600 Billion dollar deficits in the U.S., a number that was unthinkable in the U.S., a few short years ago. In reality, our GDP is less than a tenth of the size of their own. And if the loonie stays above par, we could theoretically be running trade deficits as large in comparison as the U.S. .

And lets think for a moment as to just how clueless our Conservative government is fiscally. If you all thought they were competant and knew what they were doing, think about this for a second. We are running 2 billion dollar monthly trade deficits now. As the loonie continues to appreciate against the U.S. dollar, these deficits will grow and our manufacturing base will continue to shrink. We will continue to loose jobs that matter most. And as for commodities, we’ve lost 4 of our top 5 miners, our second/third largest tech stock to bankrupcy and our largest energy corp. Our large cap corps are disappearing, all under a Conservative watch.

And real estate? The bubble peak has just crested. Mortgage affordability is falling and will be the trend for years to come. And considering its makes up a whopping near 20% of our GDP…

So this magical growth Harper talks about…

http://www.theglobeandmail.com/report-on-business/why-the-us-dollars-decline-means-a-rise-in-global-fortunes/article1322552/

“Speaking to reporters in Vancouver Tuesday, the Prime Minister echoed Bank of Canada Governor Mark Carney’s warnings that a persistently strong currency will slow Canada’s rebound. Still, Mr. Harper said the Canadian dollar’s rise is at least in part due to forecasts by the International Monetary Fund and others that predict Canada’s gross domestic product will expand faster than that of most other major industrial countries.” – Globe & Mail

Where will this growth come from? Manufacturing? The high loonie is destroying whats left and when the loonie falls later from debt, it will take years, not months, to rebuild. Real estate? We are at the top of a bubble which has likely seen its highest valuation last week as a result of rate hikes. Real estate has nowhere to go but down and with it goes retail, construction, financials and the service sector (and lets not forget the stock market!). And considering that real estate is nearly 20% of our GDP, how much GDP will we lose from real estate 3 years from now, thats the question 20% of where it is today? Construction? Maybe infrastructure spending can offset the losses we are about to experience with the housing boom on the decline… for about what… 2 years? And then its on the decline. Service sector growth? Retail? Financials? If the housing bubble pops, these sectors will be dogs and for some time. Commodities… thats the only shining light right now and I just can’t see it being enough. We were running structural deficits before Canada began its recession and lets consider this was happening at $140 dollar barrel of oil commodity prices, with natural gas prices near double digits and base metals on a tear.

Again, where is this GDP growth going to come from? A few hundred billion more worth of mortgage backed securities? (God knows the Conservatives love those mortgage backed securities)

Ah… I can rant all day but it won’t make this government any more competant. And the smart money, wise investor money that see’s this coming says… the world is small, lets take the loonies when they are high and move on!

Lets ponder this question because its at the heart of where the smart investor goes from here, it really is. When will interest rates rise from record federal/trade deficits? When will Canada become a risk to lenders, what will happen in the world bond markets…. what will happen to our loonie, because from where I see things Canadian investors have an excellent opportunity to buy real estate in the U.S. while prices stay affordable. The only question that remains is where and when and where to me is obvious, its where real estate has been most battered. Even so, its hard not to think about owing U.S. dollars if the Canadian dollar rises well above parity on a pure currency play.

When… for me, its within the next year, likely moreso within the next 6 to 8 months. I’d say when it comes to currency exchanges, anything past 1.10 is a good time and for those looking for perfection, our dollar could briefly hit 1.15, a 1.20 caused by a major spike in the price of oil. If the price of oil climbs past the $100 dollar BOE level, a loonie at 1.10 U.S. is far more likely than not.

We are all pretty much in agreement that the loonie will continue to appreciate against the U.S. dollar in the short term for the most obvious of reasons. The U.S. empire is in serious decline from a mountain of deficit spending and debt. And we’ve all been wondering just how far the U.S. dollar has to drop to make the U.S. competitive in the world again. Another 20%? 30%? 40%? Farther? Who are its export customers and what can the U.S. do to expand its manufacturing base beyond a lower greenback? Even so, what is the Greenback sweet spot for making the U.S. competitive again?

Another question that begs for an answer… what is that Greenback sweetspot compared to the western worlds basket of currencies? Lets think it through. If a Canadian is to bet on Canada by taking his/her dollars out of the nation and invest in greener pastures with the goal in mind to eventually bring it on home (presumably to buy into a market that has been decimated, selling for pennies on the dollar, my oh my, vulching has its attractions) at some point when Canada needs us most, the plan is contingent upon success abroad. And if one invests in the U.S. dollar or U.S. housing, when will the U.S. economy recover? And I’m not talking about a jobless recovery here or one that relies on debt to function. When will the U.S. turn it around? Where does their currency need to be? Do they even still have a chance to turn it around?

#29 Chris on 10.15.09 at 7:34 am

Why use the average in Toronto and the median in Florida?? You already discussed the influence of abnormally high sales effect on the average…. Lets compare medians to medians it would have been more interesting.

The median and average prices converge as price point drops. Thus in a city like Jacksonville, either is valid. — Garth

#30 Daystar on 10.15.09 at 7:34 am

#20 David Bakody on 10.15.09 at 6:04 am\

Not to mention that the U.S. standard of living currently ranks 17th in the world. The U.S. isn’t the only choice. It could be the easiest for some who like familiarity (snickers), but the menu of choices has a long list in terms of where to live, invest and why.

#31 latinlife on 10.15.09 at 7:45 am

Garth is showing us opportunities to grab a great lifestyle in the sun on the cheap.

And, what do we hear in reponse? Canuck knuckle heads
talking about weather doesn’t matter.

We’ll on the happiness index it does.

Walk around the streets of Toronto and other cities and see the miserable mugs on everyone when they have to schlep their way to work fighting the tundra.

I had seven properties in downtown Toronto and dumped them all three years ago.

Packed up shop and moved to Panama and Costa Rica
where you can buy 3.5 properties for the price one property in Toronto.

Don’t defend an over taxed, over inflated place like Canacaca.

Garth gave you a gift horse.

Now:

1. Sell your overpriced casa in Toronto/Vancouver buy a place in Panama/Ecuador/Costa Rica for a 1/4 the price.

2. Pocket the difference and put it in a term deposit paying 6.5%.(Yes, that’s the rate we get here).

3. Rent out one or two of the places and retire.

4. See you at the beach.

#32 just a guy on 10.15.09 at 7:46 am

Garth, I’m not saying income explains everything, but there is a huge discrepancy in incomes between TO and Jacksonville. Does that mean TO prices won’t come down? Of course not. But it partially explains the current difference in prices. It was never meant to be an all-encompassing explanation.

…not unlike you trying to assert that climate should have some bearing on house prices. Now THAT was weak.

Let’s talk about Victoria. — Garth

#33 dd on 10.15.09 at 7:51 am

#28 Daystar

U say something Daystar?

#34 dd on 10.15.09 at 7:54 am

#23 Onemorething

….we are just going to revisit it all over again….

So the US buck will increase, gold down, and oil up? If oil is at 100 then gold should follow up.

#35 moneyman on 10.15.09 at 7:58 am

to Housebuster #22:

You wonder if the housing market has busted in Spain; I read that it apparently has not yet. Banks would have repossessed entire developments in payment for loans in defaults; but, not reduced prices yet. I guess bailouts set the market, not capitalism.

#36 David Bakody on 10.15.09 at 8:15 am

Just back from Tim’s and a quick stop at Kent for some cleaning supplies. En route I passed by a few more “For Sale” signs on newer well landscaped homes in an upscale neighbourhood. Many of these homes have been for sale for months …. just saw my first home with an “For Rent” sign also. I am not in tune with the RE market here but I know what I see … less “Sold” signs and much longer time on the market for homes which historically sold in less than a month.

What does this all mean …. who knows? could it be school is in and most have made their move, perhaps. But I would suspect and please correct me here, more & more people are now are aware rising interest rates he rise and there is no comfort in a variable interest rate. So being the East Coast, home of conservative minded cautious people …. many people with stop and think before they buy.

Perhaps good advice in all of ones financial affairs.

#37 pjwlk on 10.15.09 at 8:25 am

I’m just wondering how accurate a comparison of average price to median price is? Seems fuzzy to me…

#38 Devil's Advocate on 10.15.09 at 8:36 am

In Kelowna proper there is one house for sale for every 100 people as well.

What is most noteworthy is the significant discord between sellers and buyers; sellers listening to the good news MSM and buyers listening to the pundits of the swept under the rug realities. It has caused a breakdown in the market not unlike a department store 2 Day Sale. All the decent offerings were snapped up in day one and all that is left are offerings by unrealistic sellers with lofty expectations of being able to take advantage of a greater fool. Not going to happen… thye just aren’t THAT stupid.

#39 Boombust on 10.15.09 at 8:39 am

“Yeah, those dumb Americans live in Third World squalor and a police state. — Garth”

And your point is?

We need to get out more. — Garth

#40 Wondering on 10.15.09 at 8:46 am

So how does one SHORT CDN Real Estate?

#41 Danforth on 10.15.09 at 8:47 am

9:28am EDT

Dollar just broke the $1.03 threshold.

1.0291

Side-bets on when we reach parity? We seem to be on a run-rate of a penny a day!

#42 PeckedToDeathByDucks on 10.15.09 at 8:50 am

not so fast vultures….
check out the links cited by Calculated Risk in their article House Buying Frenzy

foeclosed inventory is uninhabitable, listings shortage, multiple offer buying

I did not suggest buying a foreclosure. Nor would I. The problems are obvious. Rather, there are thousands of listings from negative-equity owners who have maintained their properties well. — Garth

#43 F on 10.15.09 at 9:05 am

Garth,

As a supporter of yours, I have to disagree with this one.

I regularly do business in Jacksonville, and can assure you, there is nothing to compare.

Nothing.

I would let this slide Garth.

Again, I am on your side, but in this case, you could not be more wrong.

The post is not to compare equals, but disequals. — Garth

#44 Grantmi on 10.15.09 at 9:51 am

Just like Ozzie Jerkass… Cameron Muir-on was on the PHIL TILL show this morning…

BUY BUY BUY real estate in BC…. you’ll never be able to get in if you don’t !!!! BC is different! Vancouver is different.. what we lost we got back these last 2 years.

blahhh blahhh bbbbbaaaaaaa

#45 The Vulture on 10.15.09 at 9:51 am

F.E.E.D ME…I AM HUNGRY

The witching season is now upon us fellow vultures!

Homes have truly taken on a sinister, uninviting look in such depressing weather.

Homes are no longer happy, inviting places but rather gloomy, depressing, void, and haunting.

Rooms now have a dark, spooky, foreboding look to them.

Basements now dark, damp, eerie, dreary, reside in the annals of horror movies and slasher novels.

Children’s Halloween decorations add a macabre flair to the surrealism of a fantasy, false, phony real estate market.

The skies grim and are gun metal grey.

Wind is un-relentless, the cold air ruthlessly cuts you to your bone.

The trees are barren, streets void, peoples faces strained and barren. No cats or dogs to be seen; only the odd dead squirrel or rabid, maggot infested bird.

There is mud and garbage everywhere.

No children playing in backyards or the streets.

No couples out walking hand in hand.

Snow, sleet, hail and freezing rain. Pick your poison and I will show you some pain.

Harvest of sorrow is now upon the Real Estate universe. There is fear and desperation is Real Estate agents eyes. Haven’t had a sale in a while. Where has the party gone..it was a wild ride people! Made tons of cash…while it lasted. The market ran out of fools.

Sellers taking down for sale signs. They don’t want total strangers romping through their homes at Christmas time. They may even swipe a couple of gifts under the fake Christmas tree like the new HD camcorder form the seller’s mistress…

The grass is all brown, yucky and flat.

The pool is empty, filled with dead leaves, garbage, polluted water and the neighbours dead cat.

The hot tub broken..hope no one wants to see it work.

Cheap, plastic lawn furniture taken down before being blown away.

With the speculators homes now out of the market, only the truly desperate, fearful, screwed remain…you will get your deal fellow vultch.

Sellers have a guilty look for being so greedy. Now their look is deathly vacuous.

Sellers eyes will melt for each successive property tax payment, heat, light, utilities.

Open houses are as vacant as a teenage bar band on opening night Monday’s at midnight in the Yukon.

Real Estate agents become more and more desperate to recoup newspaper advertisement expenses ASAP or worse have their client fire them for non-performance. Merry Christmas pal!

The bond market is forcing the interest rates up. Keeps illiterate, naive couples out of banker’s offices.

All of the silly, desperate, first time buyers are gone having blown all their loot on crap digs at insane prices with the market just waiting to teach them a lesson in humility, discipline, patience and fortitude.

“honey, how are we going to afford some furniture for this dump we got duped into buying?”…”get out some plastic honey bunny…lets do the max out babe…Hey, what is that sound coming from the basement???

Listen closely..” FEED ME, I AM HUNGRY… FEED ME, I AM HUNGRY… FEED ME, I AM HUNGRY… FEED ME, I AM HUNGRY… FEED ME, I AM HUNGRY… FEED ME, I AM HUNGRY… FEED ME, I AM HUNGRY… FEED ME, I AM HUNGRY… FEED ME, I AM HUNGRY…

VULTCH time kiddies…

The witching season is now here, same as every year a time of fear…

#46 Kurt on 10.15.09 at 9:52 am

Look, blog dogs, did you read the puch line? The one that says “Just remember what I told you.” Did you jump to that? Did you read the punchline for the linked post?

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

You may just be shocked.”

‘nuf sed.

#47 Grantmi on 10.15.09 at 9:58 am

OuCH!!

*************

Canwest shares to be delisted

Any appeal must be started by next Wednesday
Last Updated: Thursday, October 15, 2009 | 9:56 AM ET

Canwest Global Communications Corp. said Thursday it has received notice its shares will be delisted from the Toronto Stock Exchange as of Nov. 13.

http://www.cbc.ca/money/story/2009/10/15/canwest-delisting.html

#48 BDG YYC on 10.15.09 at 10:00 am

# 24 … DAYSTAR

“Nothing could be further from the truth. As mortgage affordability drops, so go prices as everyone well knows. Its the sellers who will be scrambling to sell their homes before the rates spike. Inventories will build as buyers smell blood knowing what reduced mortgage affordability will do to the market. The boom in real estate has crested. Welcome finally, to cheaper homes and reduced mortage affordability! (finally) ”

:-) You are being overly kind here aren’t you.

1. Couldn’t be further from the truth ? Could be a hell of a lot more true before it becomes false. You don’t have a hope of being right on that one unless of course the panicy fist time buyers that are still out there (if there can be many left) are about to be struck by a sudden bolt of “en-lightening”. My bet is that the “buy now before rates go up and lock you and your $40K income out forever” works. A little bump up in mortgage rates is probably more likely to panic them in than out. First … the last of the D’oh-D.oh’s get rounded up … then … well … you’ll be right of course.

2. “As mortgage affordability drops, so go prices as everyone well knows.”

Sorry but again I have to disagree. “As everyone well knows”? Come on … you know all too well that “Everyone” does not know. I have personally met the guy and I can assure you he’s dumb as hell and knows diddly. He will find out though in due time … but of course … that comes after he signs up for that last chance so affordable variable rate mortgage on the starter dream home. Then of course … you’ll be right again :-)

3. ” Its the sellers who will be scrambling to sell their homes before the rates spike.”

Daystar, Dastar, Daystar … timing, timing, timing … “Will”? Um … pitches like “buy before rates go up” are a sure sign that “smart sellers” are already in the process of bailing. the “sellers who will be scrambling” will actually be D’oh-D’ohs who will be wishing they could sell – but are trapped with negative equity. At 70% home ownship … D’oh-D’oh’s simply become extinct – I know this to be fact as well … still eating what’s left of it from Thanksgiving. :-)

4. ” The boom in real estate has crested. Welcome finally, to cheaper homes and reduced mortage affordability! ”

Tsk … tsk … tsk … now Daystar – stop looking at the houses and turn around and look at the beach ! See how huge it is … see how far, far, out it is … all of a sudden ? See all the happy people running out to collect all those fish flopping around out there? But what the hell, I guess I’ll give you this one … handgrenade close … is good enough.

5. “(finally)”
You can say that again ! And you’re finally right.

:-) :-) :-)

#49 Devil's Advocate on 10.15.09 at 10:03 am

Oh we are a pure as the driven snow in which we live lot aren’t we?

“It’s different here” Oh yes I forgot the laws of supply and demand don’t apply in Canada. “Only in Canada you say?”

“Weather is meaningless in this comparison. If weather mattered, wealth would be concentrated globally around the equator. It’s clearly not.” What? Look at population distribution Dude… it IS all about the climate. Because you have money does not mean anything. It’s the actions of the most significant portion of the population that tell the most important story and that, on a global scale, is those actions of they who represent the more than 95% of the worlds population who’s combined wealth does not equate to that of the top 5%. That bottom 95%’s vote is just not worth as much as those of the top 5%. BUT without that bottom 95% the top 5% would not be. The rich like the warm climates… they just don’t like to mingle with the likes of the other 95% of the worlds population in the ghettos of Jacksonville OR East Hastings Vancouver.

#50 X on 10.15.09 at 10:03 am

#40 Garth wrote about shorting the RE market a few weeks ago.

#51 X on 10.15.09 at 10:05 am

U.S. : Home Foreclosures Rise 5% from Summer to Fall. Why? What else? Unemployment.

http://www.zerohedge.com/article/home-foreclosures-rise-5-summer-fall-why-what-else-unemployment

#52 kc on 10.15.09 at 10:18 am

http://www.theglobeandmail.com/report-on-business/retirement-lost-a-multimedia-series/article1323387/

Retirement Lost: A multimedia series

This series might be worth bookmarking for here is the future and what it might possibly hold.

#53 Daystar on 10.15.09 at 10:18 am

#32 dd on 10.15.09 at 7:51 am
;-)
#33 dd on 10.15.09 at 7:54 am

So the US buck will increase, gold down, and oil up? If oil is at 100 then gold should follow up. – dd

No and maybe. If (and its a big IF) the U.S. greenback rises against world currencies due to sound fundamentals (reduced/eliminated trade deficits, federal deficits), gold will fall and oil will fall as the U.S. dollar rises, unless demand for oil outpaces the rise of the U.S. dollar.

If oil rises to $100 +, it will either be led by a dramatic fall in U.S. currency or rise by demand… or both. Gold values rise as U.S. currency falls and gold is far more effected by U.S. currency worries than anything else I’m aware of. U.S. Currency impacts the price of oil heavily because its internationally still traded in U.S. dollars. A drop in the U.S. dollar causes a rise in oil. But does gold follow oil by itself? Not that I can see. Maybe if the world began chronic shortages of oil and oil was to get real expensive to the point of breaking import nations, it would impact gold values, but we aren’t there yet.

#30 latinlife on 10.15.09 at 7:45 am

Sage advice.

#54 Onemorething on 10.15.09 at 10:29 am

#34 DD, Yes Gold should follow up but not after it dumps to $700-$750 first with the $ gains and oil begins to creep.

I dont see a Gold History lesson here, I see a new trend!

Did I not mention say 4 months ago that Oil was the new Gold and unlike Gold can be used for something useful other than a percieved hedge!

#55 Mike (Authentic) on 10.15.09 at 10:29 am

#9 “Toronto is great because: -no earthquakes, -no tornadoes or hurricanes, -no flooding (except beaches)
-low crime, -stable government, -exceptional services, -culture, -financial capital”

You are kidding right? How long have you lived in TO? Me, 28 years. We have had tornadoes and even a hurricane! Flooding, heck yes and high crime too. Stable gov’t? Not always. Exceptional services? Strikes (Garbage, TTC most recently), culture, Sure, but it’s no London, UK!

Mike

#56 Larry on 10.15.09 at 10:32 am

#5 lightning
“Will Calgary housing drop as much as Vancouver and Toronto?”
No this is the best city in Canada and prices will continue to increase moderately over the next few years as more people move here from the poor places back east, not to mention all the pil and gas is here aswell. Better buy now or be priced out forever.

#57 George on 10.15.09 at 10:34 am

Sunshine and heat seducing fleeting thoughts of greener pastures. Sounds Haiku. Canada actually has a culture that is not solely consumer/corporatist Vultch all you want “woo hoo” I’d gladly take a stroll down East Hastings over almost all of any inner city USA. I think Iraq too has certain times of the year with very pleasing temperatures and little humidity. Do you have any current real estate stats to share with us in the middle kingdom Garth?

I think you need to travel a little, dude. — Garth

#58 Uncertain on 10.15.09 at 10:38 am

I’m with #3 & #22… though my choice is the South of Portugal…. its the quality of my life not the quntity of the things in it….. unfortunately I cannot afford a place in Canada (in my desired area for communting) or in my wishful retirement location…. **** very big sigh****

#59 miketheengineer on 10.15.09 at 10:58 am

Garth et al:

I am really really interested in getting a place state side. Unfortunately, I don’t have any cash right now, nor a full time job. I would prefer Vegas, or Arizona.

If you read some of the US alternative news-casters, Bob Chapman, Alex Jones, Mish, etc., it is all doom and gloom states side.

I think it is still too early to buy in the USA. Better to wait till Middle of 2010, and see what happens there. With luck, I will have the cash then, to buy the trailer or motor home, which I think, may be a better investment.

At least you can move it about, and if what I think is going to happen, happens, then I should be able to pick up a couple of acres, in Ontario, for not too much cash, in the near distant future, to park the trailer on. At least we will have a place to go in the summer time.

And yes, those with cash right now, can and will be able to find “deals of a life time”. Only, you need to be careful where you buy your place. Remember in RE it is all “location, location, location”, so choose wisely.

#60 brainsail on 10.15.09 at 11:12 am

#2 Kettle…Pot Calling

Where did you get the $40K median household income from? Wrong…actually $62,870. Is your TO number correct?

http://money.cnn.com/magazines/moneymag/bplive/2009/snapshots/PL1235000.html

#61 Grantmi on 10.15.09 at 11:29 am

well it’s official!! The Maestro says a weak USD is fine!!

********

Greenspan: Dollar Slide No Worry

Thursday, October 15, 2009 9:47 AM

Former Federal Reserve Chairman Alan Greenspan said on Thursday he was not too worried about the latest bout of selling in the U.S. dollar, which recently hit a 14-month low.

“I am not overly concerned,” Greenspan said at a Council on Foreign Relations meeting.

But he said that, longer term, government budget deficits would likely be even bigger than current record estimates. He added that the deficits would continue to put downward pressure on the currency and upward pressure on borrowing costs.

“It will begin to affect the yield on long-term interest rates,” he said.

Asked about the problem of firms that are considered too large to fail, Greenspan: “If they are too big to fail, they’re too big.”

#62 smw on 10.15.09 at 11:29 am

#56 Larry

Quite the assumption…

What about Sable Island, White Rose and Hibernia?

As east coast oil and gas continues to ramps up, that will drag some of the talent out of Alberta.

#63 moneyman on 10.15.09 at 12:04 pm

For those who want to buy in Spain, the time has not come yet. See what Moody says about real estate & banks over there.

Moody’s: “The fundamental credit outlook for the Spanish banking system remains negative, reflecting the impact of the ongoing economic recession and severe asset quality deterioration on domestic banks’ risk absorption capacity. Moody’s remains concerned that many entities appear to be avoiding recognition of the true scale of the asset quality deterioration in their books.” In its base-case scenario, Moody’s expects lifetime loan losses of up to €108 billion. (via FT Alphaville)

#64 David Bakody on 10.15.09 at 12:05 pm

Here on the East Coast we can fly cheaper to Europe than out west …. daily non stop flights to London. This summer I went to France and passed through security only seeing 4 people all at a slow pace. On return in Montreal I was 1 1/2 hrs and there were at least 24 security people. Trains had good reduced fares for seniors and ran every 15 minutes. One Euro fare on buses for seniors and plenty of food set out daily on the street cafes at a good price, little or no signs of police or those roaring sounds of sirens … of course standard practice of securing hand bags is recommended … I purchased a good leather man’s bag to hold my camera and normal wallet items …. it’s the norm over there, here well what can I say. Saw on TV there are more and more licences being issued for hidden personal use of hand guns, get on a bus or subway knowing just about 1-10 has a 45 magnum or whatever under their cloths ….. yup God love American!

I will never forget the time a person was shot from Montreal and Florida’s Governor’s response was: Hey Canada Florida welcomes y’all and we now made it possible for y’all to pick up a hand gun licence once you cross the border buy your gun then or here ….. just tell them y’all are coming to Florida! ….. can you imagine that.

#65 PeckedToDeathByDucks on 10.15.09 at 12:07 pm

Good news! But not for vultures.
$10,000 tax credit for new-home buyers

Most excellent give-aways continue for Americans, even from States that are broke…the paperprestidigitizer keeps on churning. Indeed, it is even taking on the characteristics of a perpetual forune machine.

Obama: No income tax for Seniors earning < $50,000 (Huffington Post)
Obama: $250 cheques for seniors to make up for loss of COLA this year
Obama: money for job creation
Obama: unemployment terms extended
Various interests: First time home buyers plan needs to be extended
Stellmach: No Provincial sales tax, no raised taxes…read his lips
Harper: No tax increases, no program cuts.

and, no mention of the debt ceilings yet

Questions of the day:

how long do you keep on priming the pump before admitting that the well is dry?
how many injections does it take to cure an addict?

#66 Bill-Muskoka (NAM) on 10.15.09 at 12:39 pm

So, here’s my conclusion: People in Toronto and Vancouver are as nuts as those in Jacksonville and Phoenix. But the outcome is radically different.

Well, yes, but for different reasons. Most ‘normal’ people view their hosue as their home and realize that others need a place to live as well, so they place a reasonable value on such a thing.

Not so in T.O. where the societal pressures manifest themselves as a form of insanity centred around money, power, and unrealistic asset accumulation. It is a form of mass inferiority complex, much the same as those who promote a low Loonie. A similar analogy would be a $1000 per hour Hooker versus a $20 per hour Hooker.

It is a disease of sorts fairly akin to that which gamblers suffer. It is about personal power. The Citiots have very little and need to feel, like any common gangbanger, that they are superior to their peers. They have swallowed hook, line, and sinker the religious belief that materialism equates to personal value. Likewise the MSM keeps the mantra and dogmas alive and well.

The answer as to ‘why’ is rather simple, but the solution will be painful. It will require a mass paradigm change in thinking. That is most probably asking and expecting too much from a people who have no clue what life is actually about.

Yes, most live in the Matrix and fail to realize they do have a choice between the Red and Blue Pill.

It is not for lack of insightful and meaningful information availability, it is solely due to their own unwillingness to let go of their way too comfortable FUD and face reality. They have the freedom to choose what that reality is, but will not because they do not know what normal is anymore, if ever they did.

#67 ChrisP on 10.15.09 at 12:54 pm

One of the big differences between canada and the us is that canadians have health insurance from the time they are born! Nobody in canada goes bankrupt because they’re sick and can’t afford a necessary surgery. In the us there’s over 50 million people without ANY insurance, and millions more with inadequate insurance. Health care premiums are in the hundreds of dollars per month with large deductibles and a massive bureaucracy to deal with that tries to deny any claim. The lack of health care in the us has devastated the population and contributed significantly to their real estate situation.

Did you just make that up? — Garth

#68 Tim on 10.15.09 at 12:59 pm

I just spent half the summer in the south of France. While the food and wine are amazing, it is crowded, noisy, and the people are not overly friendly, even if you speak a little French. Even in small towns there were constant noises coming from motorcyles. Traffic was just non-stop. Many of these picturesque villages are overrun with tourists. I stayed in a nice area of Nice and couldn’t keep my window open at night due to the incredibly loud noise of motorcyles, magnified by the buildings. With the exception of Yaletown, which is ugly and overcrowded and downtown TO, we have so much more space and resources here. Why compare with a place where you pay $5 for a cup of coffee?

Tim

#69 Bill-Muskoka (NAM) on 10.15.09 at 1:06 pm

Weather doesn’t matter? LMAO!

OK, let’s take a look at that statment. Weather, aka, climate, directly affects your housing costs in the following obvious ways.

1. Heating and cooling costs.

2. Weather related maintenance issues.

3. Transportation costs whether to work or shopping, or merely visitation.

4. Insurance premiums (Hurricane, tornado, annual rain/snow fall, flood zone, rotting, mildew, sun baking, etc.)

How does it affect us as human beings?

1. Ever hear of SAD…Seasonal Affective Disorder? It affects people biologically and psychologically causing depression, weight gain.loss, suicide, financial distress, job security, divorce, etc.

2. Allergies anyone?

4. Headaches and migraines.

4. Physical injury due to storm/flood damage.

No, weather is NOT a factor in where to live whatsoever…if you are either dead or an inert protoplasmic mass. Otherwise, it most definitely will be.

Remember that you will still have to pay to heat in cold climates and cool in hot ones. Oh, and those who live in between the Tropic of Cancer and the Tropic of Capricorn, not to mention the equatorial regions will be experiencing ever increasing heat as Global warming continues to climb.

The good news may be that after the tripping point is reached the earth’s systems will re-balance and bring another Ice Age like in ‘The Day After Tomorrow’! After all, as George Carlin said ‘We are just a surface nuisance.’

#70 Shawn on 10.15.09 at 1:14 pm

# 59 MIketheEngineer said Remember in RE it is all “location, location, location”, so choose wisely.

True but more that that it is timing, timing, timing… (That’s what this blog is all about, now is bad time in Canada)

If U.S. real estate is available in a place you like at fire-sale prices well below depreciated replacement cost then BUY. It is always possible a better deal will be had next summer, but you can’t count on it.

Successful investors ACT and buy when things are cheap.

#71 Bill-Muskoka (NAM) on 10.15.09 at 1:20 pm

#59 miketheengineer

Beware the TAXES mon ami!

#72 George on 10.15.09 at 1:23 pm

The big bad biker’s been to Baghdad and I obviously have not. (Haiku thursday or something – sorry) Jacksonville has a crime rate of 68 per one thousand residents last years stats. It has one of the highest crime rates in America now. Just a suggestion, but maybe pimpin Afhgani condo’s might be this evening’s post.

#73 frank pasquale on 10.15.09 at 1:32 pm

USA “Foreclosures:Worst 3 months of all time”

http://money.cnn.com/2009/10/15/real_estate/foreclosure_crisis_deepens/index.htm?postversion=2009101507

CANADA:”Resales homes:Best 3 months of all time”

http://ca.news.finance.yahoo.com/s/15102009/2/biz-finance-resales-canadian-homes-18-cent-third-quarter-best.html

#74 Chris no longer in England on 10.15.09 at 1:34 pm

This is interesting. Florida property is not something I have looked at much, but with no intention of buying here just yet and a lot of money in the bank kicking around and looking for something to do, I might take a look at what’s available as a holiday home. We all need a holiday, right? In any case, my fellow Brits are very keen on Florida, so it could be rented out here and there I’m sure. I wouldn’t be interested in obsessing over it as a source of income but if some came back to me – fine. I was planning a holiday in Mexico early next year but maybe I will go to Florida instead …

#75 F on 10.15.09 at 1:35 pm

The post is not to compare equals, but disequals. — Garth

The disequal statement is fine, however I am sure you are trying to draw comparison in how Jacksonville should be no different than Toronto.

All things being equal, Toronto has about 5.5 million people in the GTA.

That as you know is about 18% of the entire countries polulation in 250 square miles.

That is really the core reason for sustainability.

with those numbers a US metropolis would need to have a city with 54.9 million people in it.

To add, only a few other major areas in canada have anything near this population.

Garth, again, I am a strong supporter of you, however the real core of why we are here is the cheap interest rates, and no other place for similar rates of return.

#76 F on 10.15.09 at 1:41 pm

USA has 21 out of 30 or the most populous cities.

We simply do not have as much choice where to live from a geographical perspective and employment perspective.

When people and businesses cluster into a small area, it really is hard to see how Toronto can really tank to the degree we have all assumed for the past years.

Number City Country Population
1 New York City United States 8,214,426
2 Los Angeles United States 3,849,378
3 Toronto Canada 3,635,571
4 Chicago United States 2,833,321
5 Montreal Canada 2,503,281
6 Houston United States 2,144,491
7 Phoenix United States 1,512,986
8 Philadelphia United States 1,448,394
9 San Antonio United States 1,296,682
10 San Diego United States 1,279,329
11 Dallas United States 1,232,940
12 Ottawa Canada 1,130,761
13 Calgary Canada 1,079,310
14 Edmonton Canada 1,034,945
15 San Jose United States 929,936
16 Detroit United States 916,952
17 Jacksonville United States 764,555
18 Indianapolis United States 785,597
19 San Francisco United States 744,041
20 Columbus United States 733,203
21 Quebec Canada 715,515
22 Austin United States 709,893
23 Winnipeg Canada 694,668
24 Hamilton Canada 692,911
25 Memphis United States 670,902
26 Mississauga Canada 668,549
27 Fort Worth United States 653,320
28 Baltimore United States 631,366
29 Charlotte United States 630,478
30 El Paso United States 609,415

#77 ValueHunter on 10.15.09 at 1:56 pm

Garth, according to this report: http://www.cbc.ca/money/story/2009/10/15/crea-mls-sales-data-housing.html,

“135,182 homes were sold countrywide in the third quarter, up 18 per cent from a year earlier…”

Was the number “135,182” net sale or was it the number of transactions/trades?

What is the significance of such number if it just the number of houses changes hands?

#78 omg on 10.15.09 at 2:02 pm

The rubber will really hit the road 3 to 5 years from now when inflation kicks in. Governments around the world must print money to offset the huge stimulus packages they have provided. Money printing always ends in inflation as you have more dollars chasing the same amount of goods. Interest rates must be 1% to 2% higher than inflation to attract investors. Try buying that $800,000 Vancouver bungalow at 11% mortgage rates.

#79 Soju on 10.15.09 at 2:17 pm

You’re comparing Americans against Canadians. Two different species. One the American, clueless individuals who borrow beyond their means and don’t even have the intelligence to know and don’t even have the ethics to stick around and pay what they owe. Then we have the Canadians, individuals that have a reputation for paying off their bills and in some cases ahead of time. Also, Canadians are diciplined about what bills to take on.

Canadian household and mortgage debt now exceeds that of American families. Anyone called you an idiot today? Other than your mom? — Garth

#80 Nostradamus jr. on 10.15.09 at 2:25 pm

Asians calling Vancouver the next Financial, Trade, Culture and Leisure Capital of the World.

Come to airport watch so many wealthy Asians landing everyday.

Asians say….”Is different in Vancouver”.

Nostradamus jr.

#81 Scotts Valley homes on 10.15.09 at 2:28 pm

It is totally different about Canada and US. Average income of people in Toronto is almost double that of Jacksonville people. So they can afford more costly property. But the weather in Canada is really very rude.

#82 kabloona on 10.15.09 at 2:36 pm

Agree with mike #59, the slide in the US is far from over…despite the happy talk about finding a bottom in housing, there will probably be many more painful months ahead.

Yet they were pimpin’ US Real Estate on the National News last night, showed some lady in Winterpeg all set to head south and buy some vacation property cuz her sister-in-law had already taken the plunge and she was “jealous”….oh, dear.

Check this out from Bloomberg:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aFofq9_za8Is

U.S. Foreclosure Filings Jump 23% to Record in Third Quarter

By Dan Levy

Oct. 15 (Bloomberg) — U.S. foreclosure filings climbed to a record in the third quarter as lenders seized more properties from delinquent borrowers, according to RealtyTrac Inc.

A total of 937,840 homes received a default or auction notice or were repossessed by banks, a 23 percent increase from a year earlier, the Irvine, California-based seller of default data said today in a report. One out of every 136 U.S. households received a filing, the highest quarterly rate in records dating to January 2005.

“The problem is prime loans going into foreclosure and people being underwater and losing their jobs,” Richard Green, director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles, said in an interview. “It’s a really bad number.”

Mounting foreclosures mean U.S. home prices probably will resume falling, analysts from Amherst Securities Group LP in New York said Sept. 23. A “shadow inventory” of 7 million properties are in the foreclosure process or likely to be seized, up from 1.27 million in 2005, they said….

….“The number of people who can’t pay their mortgages, we haven’t seen the peak of that,” David Lowman, head of JPMorgan Chase & Co.’s mortgage unit, said this week. “That’s going to weigh on us for some time to come.”

Home foreclosures will climb through late 2010, peaking after the unemployment rate reaches 10.2 percent in the second quarter, the mortgage bankers said in an Oct. 13 forecast.

#83 frugalistas.blogspot.com on 10.15.09 at 3:30 pm

Please let there be an interest rate hike… we won’t have to compete with cheap borrowed money to develop our basement!

#84 Davinci on 10.15.09 at 4:09 pm

I have been the greater fool!

I have been studying gold and silver so much that I consider my self almost an expert. (the more I learn the less I know)

Any how Thanks Garth that ad showed me that if I switch my mortgage for free to a 2.25% variable I will save $800 a month that’s 40 oz of silver a month I can save!

THAT’S HUGE!

Why? Well silver to gold price ratio is 60:1 however in the earth crust and for 99.9% of human history the ratio of silver to gold has been 16:1. Well it gets worse, in the past 100 years that silver has been undervalued above ground stock piles all got used up. Now there is currently above ground less than 1 billion ounces of silver and 5 billion ounces of gold.

Yes, I understand it will take a long time and hell of a lot of price increases of everything before the public comes running to silver.

Why? Simple the public do not understand that paper is not money. All central bankers hold gold because they know it’s an illusion of the mind and Lenin was certainly right. “There is no subtler, no surer means of overturning the existing basis of Society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

You see gold bugs are one in a million, now I understand why I never met one until I became one.
:)

#85 kenken on 10.15.09 at 4:20 pm

reading all those blogdogs who are defending the Canadian Housing market and questionning Garth’s views just show how stupid 99% of Canadians are.
RE ppl are cunning…they are salesmen and they make money out of convincing dumb ppl to buy

Think of it this way… Canadians are worse off financially compared to Americans now (the latter learnt the lessons of over-debt the hard way). Incomes are lower in Canada, debt is higher, the loonie is nearing parity with USD. BUT house prices are so so much higher…

Does it make sense? I guess the stupid canadians think so!
Logic, on the other hand.

#86 nutty squirel on 10.15.09 at 4:39 pm

regarding #79

Hey Garth I do think that you are right that house prices will come down. Just some points of observation about your blog.

Have you ever called someone an idiot to their face. Just wondering about the outcome. I think you need to start having conversations with people face to face and not just through your blog.

Hint – stop the insults.

Also – how many homes do you currently own? How many have you purchased during the last year? Are you thinking of sellng your house now for a profit and will start to rent. I have noticed that you have advice people on this in the past.

I have to admit, I might not buy a house in this market but I am glad I do own my current house.

How much property I own at any one time is obviously none of a squirrel’s business. But I do adhere to my own rule of never letting real estate exceed 40% of my net worth. Hint – go play with your nuts. — Garth

#87 DaBull on 10.15.09 at 4:54 pm

Here you don’t have to go Jacksonville Fla. to get a good deal. Head out to Northeastern BC, Mackenzie to be exact.

http://www.realtor.ca/propertyDetails.aspx?propertyId=7421736

Only problem is you have to bring your own job. Oh well I guess that’s why houses are so cheap. Great retirement place though. Only 1 hour from Powder King ski resort.

#88 Live Within Your Means on 10.15.09 at 5:10 pm

#26 David Bakody on 10.15.09 at 6:04 am

Actually David, there are many areas in France that I’d love to live in. I was there for 3 weeks this summer and visit at least every 2nd year as my husband is from there. He’s got a min. 7 years to go before retirement and I’m not sure I’ll be around by then. Life in France is by no means inexpensive, except for the wine (but not in restaurants). True their health care system is v. good.

#89 just a guy on 10.15.09 at 5:14 pm

brainsail

Can’t find the website where I found the 40K number. But, I did find a number of other sites they ranged from low 40’s to the 70’s. Very few indicate which year they are looking at, which could explain the discrepancy. However, good luck finding any two sites with the same stats.

#90 Live Within Your Means on 10.15.09 at 5:25 pm

#26 David Bakody on 10.15.09 at 6:04 am

David – I’m in Dartmouth too and I’ve noticed many more homes for sale in the last few weeks.

#91 Dan in Victoria on 10.15.09 at 5:33 pm

Post #76 F What happened to Vancouver? Did nosty’s prediction come true?Geez, I can hear it already…

#92 Evangeline on 10.15.09 at 5:43 pm

Garth

((but this myth that Canada is a superior country is just that. ))

I’m surprised and pleased to hear you say that Garth. Kneejerk Canadian anti-Americanism is such a big snore and it’s always nice to hear someone not indulging.

About house prices in Florida, I find it surprising that the Market Ticker guy, Karl Denninger, thinks U.S. real estate prices are still way too high and need a lot more downward correction.

Was also pleased to read that you won’t be working your butt off to get Iggy elected. With his whole life spent in academe, I don’t think he is what Canada needs. If you were the leader of the Liberal Party, now that would be a whole different story. ;-)

#93 Too Old Bob$ on 10.15.09 at 5:58 pm

“Hint – go play with your nuts. — Garth”

I was going to make a comment, but this made me laugh so hard I forgot what I was going to say. lmao!

#94 Live Within Your Means on 10.15.09 at 6:20 pm

#58 Uncertain on 10.15.09 at 10:38 am

I too loved the south of Portugal, but imagine the cost of living there has greatly increased since joining the EU. And, IIRC, 25+ yrs ago the Algarve was sprouting new developments everywhere. Some places were loosing their charm. Progress :-(

#95 Soju on 10.15.09 at 6:23 pm

Vancouver sales are up over 100% in both previous months compared to last year. Rise in listings only 6%.

#96 David Bakody on 10.15.09 at 6:23 pm

87 Live Within Your Means on 10.15.09 at 5:10 pm

indeed true words, my point is many Canadians are too fixed on Florida and as our children now know there is a real world on the other side of the pond. Many think blue plate special and never look at the complete menu. Less is more . Going south to live in gated homes prior to sunset and putting up with pollution just to extent the time in my opinion is not a good choice. The history and culture alone is an adventure of a life time. One month in Europe is worth 2-3 months just sitting in the sun in Florida. Having said that I understand golf and lonely golf wives ….. love is strange and complicated at any age. Good health and good luck Madame …. and just maybe retirement may come earlier, mine did due to health and we have survived, never knew just how much money it cost to work.

#97 Evangeline on 10.15.09 at 6:27 pm

((You are kidding right? How long have you lived in TO? Me, 28 years. We have had tornadoes and even a hurricane! Flooding, heck yes and high crime too. Stable gov’t? Not always. Exceptional services? Strikes (Garbage, TTC most recently), culture, Sure, but it’s no London, UK! ))

earthquakes too.

((The crust is more rigid [in this region],” geologist Arsalan Mohajer of the University of Toronto told CBC News Online. “This is good news and also bad news. The good news is that we don’t experience that many earthquakes. The bad news is that we don’t know when the next possibly big earthquake will occur, because of a lack of information and data.”

The last moderate earthquake in the region occurred on Sept. 25, 1998, when a magnitude 5.4 earthquake, centred just south of Lake Erie, rattled dishes and shook floors across Southern Ontario. A magnitude 5 quake shook the area 12 years earlier, in January 1986.
))

Source: http://www.cbc.ca/news/background/forcesofnature/canada_quake.html

#98 David Bakody on 10.15.09 at 6:53 pm

Garth …. it now appears your move to common citizen was a good one …. Stimulus money coupled with the spending of the Canadians taxpayer saving account ($18B) all couched with closed door deals wrt non tendered Afghanistan military contracts has given Harper & Co a majority even he never dreamed of all they have to do show up it is a 100% done deal! . Once that is achieved this coming spring …. the political funding issue and no strike amendment will be imposed along with new gun laws a kin to USA and we will become a one party state plain and simple. Good news is no more elections and no requirement to speak French outside of Quebec just for starters.

937,000 + home foreclosures last quarter in the US while our sales are up as are the prices ….. Harper is indeed King crown him now AND Flaherty well just a financial genius give him the Nobel prize …. WOW its a great day to be a Canadian, and with the recession over things can only get better. Who need the USA anyway …. all that crap about trade, we got money printing capabilities.

Just think people if Mr. Harper spends another 56 + 18 Billion ($74B) he will win over 300 seats! and he already said no new taxes read his lips No New Taxes!

#99 Samantha on 10.15.09 at 7:01 pm

#74 Chris NLE

I don’t know how you feel about snakes, but you might want to consider this recent article regarding the situation in the Florida area.

The article is not surprising. Some time ago, I watched an episode of “Cops” which was filmed in Florida.

Officers responded to a homeowner who discovered a giant constrictor type snake on his lawn. Apparently, this is not an uncommon event. Reptile owners dump their unwanted snakes and the Florida climate is conducive to the survival of these snakes.

Incidentally, the homeowner in that episode (who was surprisingly nonplused) indicated that this was the second time he had made such a discovery.

There are some very good things about living in a cold climate, and I think this is one of them.

Here’s the article from Reuters:

http://in.reuters.com/article/lifestyleMolt/idINTRE59C65F20091013

#100 jess on 10.15.09 at 7:14 pm

Even though we speak different languages we seem to
having the the same talk.

“Housing prices in Sweden have regained their momentum after last autumn’s tumble despite concerns over interest rate developments and rising unemployment.
Despite record-low interest rates, an increasing number of Swedish homeowners are having trouble paying their debts, according to a new study”

#101 David on 10.15.09 at 8:01 pm

The cross border home price comparisons sure make for interesting discussion. The USA market is still undergoing its correction process and the likes of Roubini and Shiller have been arguing that more price drops will occur.
I have done a few price data comparisons between places with similar economies and populations. For example Red Deer, AB and Grand Forks, ND. In many comps it works out that families in Grand Forks, ND (which did not experience a sub prime bubble) get about twice as much home for about half the price that the denizens of Red Deer, AB get.
It is really too bad it takes such an economic catastrophe for people to lose their housing fetish. Our American neighbours to their credit are fully taking their lumps and learned from their mistakes.

#102 Brainsail on 10.15.09 at 8:09 pm

#88 just a guy

Thanks for responding and stepping up to the plate as they say. In all fairness, I’ll be the first to admit that one needs to be very carefull quoting numbers these days. The environment changes daily and everything is a moving target. I thought $40K felt low and so I checked. The $40K appears to be a 2000 number but it’s hard to believe that income increased that much in 9 years. So, I guess, we will assume the CNN number is correct. Garth’s post is all about affordability. The housing prices in Canada are insane and there will be a significant correction.

#103 Nostradamus Le Mad Vlad on 10.15.09 at 8:35 pm

The Washington Post’s Style Invitational also asked readers to take any word from the dictionary, alter it by adding, subtracting, or changing one letter, and supply a new definition.

Here are the first three. The rest are on http://progressivecomrades.blogspot.com/ in the Sept. 20 opinion:

1. Bozone (n.): The substance surrounding stupid people that stops bright ideas from penetrating. The bozone layer, unfortunately, shows little sign of breaking down in the near future.

2. Foreploy (v): Any misrepresentation about yourself for the purpose of getting laid.

3. Cashtration (n.): The act of buying a house, which renders the subject financially impotent for an indefinite period.
——
#45 The Vulture — “Listen closely..” FEED ME, I AM HUNGRY… ”

A report in today’s KDC from AP says “Record numbers going hungry” (good time for Monsanto to show its ugly face and start feeding the world GM crops).

Parents in some of Africa’s poorest countries are giving up or cutting back on school, clothes and basic medical care to give their children ONE meal a day; 30 countries need emergency aid, including 20 in Africa.

It goes on with other things, but one thing is quite curious: From this report, a child dies every six seconds from starvation, or illness caused by it; the US debt increases by $1 mln. every six seconds.

The global elite are having fun at others’ expense, but what goes around comes around. No doubt the current roles will be reversed in their next lifecycles. Speaking of which:

#51 X — “What else? Unemployment.” — Not too surprisingly, the US military machine maxed out their 2009 quotas; more sheeples to the never-ending slaughters in AfPak. —

Obamastan
——
Message to the western govts. from China. — Iran
If Israel attacks Iran without any justification, all China need do is obliterate Dimona; that will settle matters for once and for all.

BTW, when has the IAEA, UN, NATO, etc. ever been allowed to inspect Dimona? Ah yes, never.

Add this — Russia Comment from wrh.com.:
“Russia is sending a message to the US that the doctrine of pre-emptive war that the US has been following risks a global war.”

In Oliver (just north of Osoyoos), General Coach (the largest employer there) announced today it is closing for good (make RVs, etc.) 80 people will be gone by mid-December.

#104 GregW., Oakville on 10.15.09 at 8:59 pm

Hi Garth, Any idea of how high above sea level is that Jacksonville, Florida city?

FYI, a new book out tomorrow. a bit off topic.

Now or Never: Why We Must ACT Now to End Climate Change and Create a Sustainable Future
Author: Tim Flannery, Tim

From the Publisher
The bestselling author of The Weather Makers returns to the subject of climate change with a thought-provoking and powerful argument for immediate global action and a wide range of innovative, deeply pragmatic ideas to help solve the crisis.

#105 Vancouver_Bear on 10.16.09 at 2:01 am

I was shocked when a friend of mine told me that his pest control business was growing faster then RE prices.
If you plan coming here during owe’lympix….think twice…. Little bloodsuckers are waiting for your in a fancy hotel or a million dollar house:
http://thetyee.ca/News/2008/05/15/BedBugs/

Bed bugs in Fairmont hotel:
http://www.tripadvisor.com/ShowUserReviews-g154943-d220237-r5575406-Fairmont_Hotel_Vancouver-Vancouver_British_Columbia.html

Know before you go:
http://bedbugregistry.com/metro/van

BC’s mild climate helps them grow exponentially everywhere in rich and poor neighborhoods.

And did I mention that Vancouver will be next bed bug capital of the world? You heard it here first…..

#106 Are we nuts? on 10.16.09 at 5:54 am

[…] returned to this topic in his latest article. He compares Toronto real estate market and Jacksonville (Florida) market, coming to conclusion […]

#107 Gerry on 10.16.09 at 11:00 am

Gotta admin, Florida looks really nice right about now. Even nicer in February…

I’d love to unload my $450k TO home and walk into the same thing in Orlando for $200k. Looking at MLS.com, there are almost 100 of them to choose from. Mickey Mouse, here I come…

#108 pessimisticprof on 10.16.09 at 11:34 am

The madness continues – friends just bought a 100 year old wreck of a house in east Van for just over 800K. Avoided a bidding war by going in wayyyyy too high at the start. Couldn’t figure out how they could get this place with a household income in the mid-80s, even with a 200K mom&dad supplied downpayment. Then I found out the details – 35 year mortgage approved at today’s variable rate of 2.25%. 600k mortgage over 35 years with an unrealistically low rate, and the guy is 46! He doesn’t see a problem as he plans to rent out the basement as an illegal suite. This really burns me – Canada Revenue goes after EVERY penny I make on my pathetic 1.05% ING account, but all over Vancouver people are making 10k-20k or more in undeclared rental income. No wonder RE prices are going through the roof – if it isn’t GrowOps, it’s illegal suites. I have nothing against people renting out rooms/suites, but DECLARE THE INCOME!!! Then maybe a dose of sanity will be injected into this mad market. Or maybe I should just give in and sublet the second bedroom in my rented condo – or set up a hydroponic operation in my bathroom! Says a lot about where this country is going when the only way to get ahead is to break the law.

#109 Popeye on 10.16.09 at 1:55 pm

He added that “it remains the odds on bet that Canadian core inflation will continue to work its way downward and that the Bank of Canada will comfortably reiterate its desire to leave rates unchanged through to mid-2010.”

http://www.ottawacitizen.com/business/Annual+inflation+rate+falls+more+than+expected/2110255/story.html

#110 Jonathan on 10.16.09 at 2:44 pm

I don’t know if I would say the real estate prices in the US are depressed. In fact the average price is still 10-25% above the average historical value.

I think it’s our perception that homes should be worth this large sum of money. That perception has embedded itself because of all the cheap credit we’ve been exposed to for thirty years.

Jacksonville is a bad example – could be a crap hole. But Toronto is a bad example as well – over 50% of our homes are in condos and that depresses the reported real estate price – albeit to $409,000.

#111 sunburned canuck on 10.16.09 at 11:01 pm

The house shown in Jacksonville is located on the west side of town at the intersection of Gunschott Road, and Krack O’Kane Boulevard, nestled in the community called Sesspool Gardens. The nice thing about living here is that you get to know the local News Crew people by their first name.

Forget about using this house as a comparison, unless you want to live in a ghetto infested war zone.

An average abode in Jacksonville in a relatively decent neighborhood is $200,000. A VERY nice home near the beaches or inter-coastal areas of town will run you $400-600k which buys you lots more house than Vancouver, you can double that number. House insurance becoming a factor in Florida, as insurers recalibrate their risk assessments, last week the news had two large carriers no longer insuring current policies when they expire. As a Canadian investor, you CANNOT do any renovations on the house yourself while you are down south, you must hire a contractor. Otherwise, you are in big doo-doo. The weather is gorgeous in the spring and fall, but deadly humid in the summer. Whether its Canada or the USA, the imminent loss of purchasing power will make real estate holdings more difficult to own. Taxes, health insurance, fees, hydro, mortgage payments, loss of pensions inch up each year. Manufacturing jobs being moved offshore. It will be tough to maintain the standard of living in both countries that we used to know.

I am amazed that citizens in either country have not risen up to revolt against the politicians and banker entities for the outrageous policies that are the root cause of our dilemma.