The resurgence

Bung 11

What the 'average' T.O. house looked like, 10.09

The great Asset Bubble, part deux. We’re getting closer.

The house above in Toronto’s east end was listed recently for $299,900. Unrenovated, unfinished basement, two bedrooms, one bath, 57-foot lot, agent says it ‘needs work,’ appliances excluded. What would you pay?

More on that in a moment.

The latest stats from the local real estate board are worthy of Stockton, California or Phoenix, Ariz.  circa late 2004. Monthly sales up 64%. Average price, $423,559 – ahead 20%, year over year. Over 8,500 units changing hands. The greatest sales increase came with homes priced $750,000 and above.

“We’ve seen this resurgence for the demand of existing homes since the spring. Consumer confidence is growing more broadly …. big ticket items like housing has been at the forefront of recovery,” Jason Mercer, TREB’s senior manager of market analysis, told one of the breathless and delighted dailies.

And this is taking place at a time when it appears record numbers of unemployed people are exhausting their EI benefits, when household debt in Canada has exceeded US debt for the first time, and when it takes six times the average Toronto income to buy the average home. That exceeds the pre-collapse ratio in America.

But we’re different…

Now, about this house.

There were 21 offers.

It sold for 142% of the asking price, or $426,000 – making this almost the perfect average Toronto house for October, 2009.

And let’s see what the lucky winning bidder will be moving into:

Dream kitchen

Manicured grounds

Perfect for entertaining

Are we there yet?

Numbers-seldom-lie update:

With the news Canada lost 43,000 more jobs last month and the US crashed by 190,000, let’s hope homebuyers (like the ones who bought above) clearly understand the context of their actions. The American jobless rates is 10.2%, and close to 18% adding in those who have become discouraged. This is within striking distance of the 1930s experience. In Canada, economic growth in the latest period was negative, and inflation has turned into deflation since the summer.

While things will eventually improve, a 20% y/o/y increase in real estate values in a deflationary context within a shrinking economy with rising unemployment can only be seen as delusional. This is a classic asset bubble, with a well-known outcome. Over to you, Mr. Carney. Your legacy awaits.


#1 dd on 11.05.09 at 9:00 pm

Ya but you don’t understand. See if you live in North Vancouver it would totally be worth it because at night the draw bridge comes up and the nasty people in central Van can’t get in.

#2 Future Expatriate on 11.05.09 at 9:03 pm

You’ve heard of tear-downs, right?

That hovel’s a BURN DOWN.

$50,000 cash in Stockton or Las Vegas. Not a penny more.

And that’s not to buy… that’s to pay the neighbors to NOT burn it down.

#3 Taxpayer like you on 11.05.09 at 9:10 pm

Re: the 3 photos

“efficient kitchen”
“large level backyard”
“warm and cozy”

that was easy. Give me a tuff one.

#4 T.O. Bubble Boy on 11.05.09 at 9:27 pm

Asking Price: $299,900
5% down ($15,000)
Principle = $284,900
35-year amortization
2.25% VRM

Monthly Payment (as ask) = $979 (less than rent!!!)

Selling Price: $426,000
5% down ($21,000)
Principle = $405,000
35-year amortization
2.25% VRM

Monthly Payment (at selling price): $1392 (ok, maybe not less than rent)

3 years from now, VRM=8%
Monthly Payment = $2838

Don’t worry, I’m sure that whoever was in the market for that $979 monthly mortgage payment will be able to afford $2838/month in 3 years.


#5 Doctor turned Realtor on 11.05.09 at 9:31 pm

Hi Garth,
Having recently read “After the Crash” and following your blog and comments has certainly made me more cautious in advising my clients in their real estate investment decisions. I completely agree Toronto represents an over-inflated market that is due for a significant correction. The Hamilton-Burlington area has experienced some increased activity but rather modest gains in comparison to Toronto.

The Real Estate Investment Network recently named Kitchener Waterloo the best place in Ontario to purchase real estate and Hamilton was a close second with you agree with that analysis? I have recently worked with investors purchasing new construction rental investments hoping for an increase in 3-5 years.

What is your opinion on the International Monetary Funds IMF recent paper on entitled “Is the Canadian Housing Market Overvalued? A Post-crisis Assessment”? The conclusion seems to indicate that we are at market equilibrium with some minor contraction remaining for Toronto and Vancouver.

Here is the link

Keep up the good work Garth and I must say I am becoming addicted to your blog. Have an excellent day!

I have commented on that report previously. It is based on information that is nine months old, written by people seemingly unfamiliar with our market, and without credibility. — Garth

#6 kitchener1 on 11.05.09 at 9:34 pm

We are getting very close to the final pop.

More and more agents are holding back offers to a set date, even power of sales. People are getting used to houses selling in 10-14 days, if its been on the market for 30 days or more, it must be a dud etc…

The mindset is that it will always rise etc… and lots of people are beleiving the hype, and waiting until next year to list their homes.

To much demand for not enough product is what is driving this market. I have seen this over and over again the the stock markets and housing markets.

Remeber last Jan-Feb-March, when everyone thought the world was going to end and no one was buying, then rates dropped and this market started to soar, and in 3-4 months time it will be the same thing.

Classic textbook bubble behaviour.

#7 vreaa on 11.05.09 at 9:35 pm

Hands up everyone who actually had an involuntary physiological response at the thought of buying this backyard, this kitchen, this livingroom for $426,000.
Rising feeling in stomach; lightheadedness; dizziness; weakness in legs; disorientation; involuntary sneer or disgust; etc. ?
My guts quite literally tell me if we aren’t there yet, we must be damn close.

#8 kitchener1 on 11.05.09 at 9:38 pm


Real estate terms:

Handyman required= extensive reno work is needed, approx 20-30K at least

Trendy location= crappy area, the crackheads and drug dealers give the area “character”

Needs updating= every wall, floor, ceiling requires paint

Land value only= tear down

TLC= extensive reno work required

Nice cottage or doll house= Tiny house, yup, its smaller then you thought

#9 conan on 11.05.09 at 9:44 pm

I am confident that the buyer is knocking this sucker down and putting up at least 2 houses. Or one big 2.2 million dollar mansion.

#10 T.O. Bubble Boy on 11.05.09 at 9:52 pm

In other news,

“Fannie Mae asks for $15 billion in additional funding”

Anyone at the CMHC paying attention?
How about the taxpayers who will be shelling out billions in bailouts to cover bad mortgages?

Or, and in related news, Foreclosures getting rented back to previous owners:

I guess that’s how the CMHC plans on providing affordable housing.

#11 Nestor on 11.05.09 at 10:02 pm

Garth, they are going to spend another $200K gutting the main house, adding a second floor addition, and redoing it completely. $625-650K when all is said and done.

#12 Cassandra on 11.05.09 at 10:15 pm


Toronto is looking nuttier than…

dare I say it?


The End is Nigh!

#13 Mark on 11.05.09 at 10:16 pm

If that junk is ‘worth’ $400k, then the TSX is ‘worth’ 40,000 easily.

#14 Dan in Victoria on 11.05.09 at 10:42 pm

Reminds me a lot of the house I grew up in.I see they have an electric range though,and a piano, man they must be rich to have that.How our expectations have changed.Knock the sucker over,and put it out of its misery.

#15 Watched Bubble Never Pops on 11.05.09 at 10:51 pm

#7 vreaa

“Rising feeling in stomach; lightheadedness; dizziness; weakness in legs; disorientation; involuntary sneer or disgust; etc. ? My guts quite literally tell me if we aren’t there yet, we must be damn close.”

Some people have had these feelings for years. They should be dead by now. Unfortunately they’re not.

#16 mooncake on 11.05.09 at 10:54 pm

Garth, Halloween was last week. Please stop the horror show!

#17 T.O. Bubble Boy on 11.05.09 at 10:55 pm

To put some context to that lovely $299k house, look at what else is on the market in that price range:

A lovely 13 ft lot! (must be interesting to furnish)

Or, your very own beauyy salon!

#18 Watched Bubble Never Pops on 11.05.09 at 10:56 pm

As the interviewer said to Michael Levy:

“If you could be visual with us here at, Mr. Levy, you would notice that you would be standing on one side of the gunnel here at the ship and you would have quite a few people glaring at you from the other side, but boy it is sure refreshing to hear somebody talking so upbeat.”

If readers believe that they’re contrarian, think again. The vast majority of Canadians feel that RE is expensive. That reason alone is enough for price to continue upwards.

#19 jaksun on 11.05.09 at 11:08 pm

#5 “Doctor” turned realtor is a chiropractor, not a real doctor

#20 GenXer on 11.05.09 at 11:15 pm

Alright – even the CBC is talking about the housing bubble now – so it’s officially in the MSM.

Now that everyone is starting to agree that all of this is bubblelicious, and that a change in the interest rate will flip everything on its head, the real question is what interest rate will be required to start a correction.

Garth – can we have some fun and start a pool for best estimate on:
1. the interest rate that will start the deluge and
2. when it will happen?

Here’s my 2 pennies.

OK – get this. Take this Desjardins report from 2006.

On page 5 is a great chart showing the monthly cost of of mortgage payments up to that period. Note that any time in the past that the monthly cost of housing rises above $2,000 / month (in 2006 dollars), the market tanks.

So – that would be equal to $2,100 per month today (BoC website inflation index gives 1.05 as the rate of inflation from 06 to 09).

With an average house price of $423,549 – let’s assume best case scenario – 5 down / 35 year / 2.25% VR – the monthly costs to carry the house are $1,374.75. (let’s be generous and leave out other carrying costs).

If history is any indicator, mortgage interest rates rising to 5.4% would move the monthly cost of the average house over $2,100. Kablam!

Of course, on a 25 year am, the interest rate move needed to tank everything is only 4%, so with blended ams out there, the killer rate is probably closer to 5%. Does that sound low to anyone else?

As for when – well, I’m calling April, after everyone has spent the refunds from the (not yet approved) home reno tax credit. I would be astounded if the BoC could hold off the bond market any longer without putting Canada on the brink of financial ruin.

#21 jack on 11.05.09 at 11:16 pm

That fine house would be at least $650k in North Vancouver. Check out this sweet as-is where-is house on sale for only $679k. Even comes with a blue tarp as a garage door.

#22 Jojo on 11.05.09 at 11:22 pm

# 13 “If that junk is ‘worth’ $400k, then the TSX is ‘worth’ 40,000 easily”.
Don’t worry banksters guys will create TSX 40,000 points. After that they will short to death TSX 1,000.
Goverment doesn’t create bubbles but banks do it.

#23 Brian in Victoria on 11.06.09 at 12:06 am

Referring to how asset prices can go below the rational price, Keynes said that “The market can stay irrational longer than you can stay solvent” For Canadian Real Estate it could be updated to “The market can stay irrational longer than you (or your spouse) can wait”.

#24 ALE on 11.06.09 at 12:10 am

We’ve completely lost perspective of what borrowing one half of one million dollars actually means.

#25 nonplused on 11.06.09 at 12:14 am

People have lost their minds, that’s all there is to say about this one.

Maybe India knows something with their large 200 ton gold purchase at $1040. I bet China was pretty miffed because they were looking at the whole 400 on a pull back.

Word is Germany and Signapore want to repatriate their gold stored in London. That was the news that took gold over $1000. The speculation is that London might not have it because they “leased” it to bullion banks who sold it and bought bonds, in what is known as the “gold carry trade”.

There are also rumors of exchanges offering 20% premiums to people to settle “cash” instead of taking delivery.

Also rumors that the 1Kg “mini bars” are all sold out and if you want delivery you get a piece of paper. You need 3 of these to take delivery of a regular contract bar.

But what do bloggers know? I think I’ll buy some more 30 year bonds at 3.9%. Or maybe t-bills at 1%.

#26 Real Estate Deal or No Deal on 11.06.09 at 12:31 am

Yup. We are.

Gee, I wonder what it smelt like?

#27 Maxime on 11.06.09 at 12:33 am

For me, it seems that the big test is going to be the pace of inflation in the next months. If there is no inflation, the BoC rates could stay low for a while (even if not 0,25%) and housing prices remain high. From my point of vue, a crash of the market like in the US is only possible in the case of a sharp increase in interest rates. If we are now in deflationnary times, mortgages rates will remain very low for maybe very long (the japenese experience) and house prices will surely decline, but slowly and over a long period of time.

So, Mr. Turner, I would like to know what your views are on inflation in upcoming months (years) ? Deflation a la japenese or will all that money pumped in the system by our central bankers and governments give us another inflation problem to control? (and that housing crash)

I’m actually reading your book (Greater fool) and I think you did a great job explaining the overpricing.

Excuse me for my bad english, I’m from that french part of Canada called Quebec.


#28 nonplused on 11.06.09 at 12:49 am

Maybe this was the plan the whole time:

“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.”
-Thomas Jefferson, Letter 1802 to Secretary of the Treasury, Albert Gallatin

#29 Onemorething on 11.06.09 at 12:50 am

The turn is sooooooo close now I can taste it!

Garth, many right now who understand this have cashed out and moved into rentals, smart boomers in the GTA or Left Coasters have documented here that they have taken their profits and moved to small town Canada for a seemingly sweet ride into retirement.

These are the two proactive camps who are selling.

We have people who understand that this is coming but wont sell as it’s all relative to them as they think 30% into the house, and locked in 5 year low rates will help them weather the storm…depending on where you live you might survive, I’ll give this class 60/40 (60% on keeping the home after the 5years).

You have the same group but with 15-29% down, give them 30%.

You have the same with 10-14% down, give them a 15% chance.

Then you have classic less than 10% downs (these are not first time home buyers), give the 5%.

Take first timers with 5/35’s or 0/40’s give them less than 1% success.

Adding all these up, you may claim that under a national correction of 25% downward national avg., 30-50% in mega bubble regions like TO and VAN that more than half of the homes will be under water and 2/3 of those foreclosers.

What is the Canadian Government going to do? Follow in the footsteps of our US neighbors, keep interest rates down, offer new home buyer incentives or bring back the 25 year fixed mortgage rate? For sure, the USA will see another 10-15% haircut on the national avg. shortly.

Be my guest but one thing is for sure, the correction is coming, the carnage along with it and people will be wishing for any assistance.

Look at the USA now with Fanny, and the new “Deed For Lease” program. Yes if you face foreclosure you can hand over the deed to Fanny and lease your house for a year! Sure but until WHAT occurs????

This is how bad its getting now and we have yet to enter the double dip recession and a 2.5+ year shadow inventory ready to hit the market in 2010.

So in the end, we do suffer a full blown depression, the goverment prints more money to buy up all the distreseed properties and becomes the biggest landlord in the world (and you know it takes a real type of person to be a landlord) so they will screw that up and the answer will be a AGE OF STIMULUS which finishes off the USA once and for good.

Canada, you will not be spared! You will follow big brother all the way down. You might as well include the UK and most of Europe.

#30 Roial1 on 11.06.09 at 12:52 am

Every week I go to this site and read.

This is how the whole situation looks from “away”.

It sure backs up what Garth keeps saying.

“This will not end well”.

#31 Emma on 11.06.09 at 12:56 am

This should be a joke but no one is laughing! Amazing what 21 ever greater fools can do to one another! Garth, you really need to start getting those bulbs ready!

Taking bubble boy’s (#4) analysis one more step – on the $405K…if the interest rates were 2.25% for the whole 35 years, you’d pay $609K (which in itself is unfathomable). If they were 4% total payment goes to $753K and …wait for it…if it’s somewhere around 8% then you’ll pay a big fat $1.2 Million.

So using some fool logic, the average crapper in the East end is worth $1.2M?? Almost makes the $426K look good, doesn’t it? Geez, we’d better pool our resources and get in while we can!

source: bloomberg’s calculator

#32 kc on 11.06.09 at 12:57 am

430K…. This is a flippers paradise … a little elbow grease, a few new boards, some paint and vola… 650K… Sucker born every minute!

difference between tear down and fix up?

you tear down the street shouting NO, NO,
fix up is what you give the wifey that wants to nest here (gin and tonic will work fine)


#33 kansai_92 on 11.06.09 at 1:16 am

Forget Toronto.
You don’t hold a candle to Vancouver.
We have half-duplexes selling for $700K in very average parts of town.

#34 grumpy on 11.06.09 at 1:21 am

An exact replica of that house could sell for 50% more in Vancouver…..just not to me.

#35 Bobby on 11.06.09 at 1:32 am

Plain and simple. Only an idiot would bid up a house like this! Ironically, the Ontario Board of Education is proposing a financial literacy course for students in the next few years. Too bad it is too late for their parents.

How about a reality show for the buyers and their agents who would pull a stunt like this. Could call it “The biggest losers”.

Yes, it is going to get really ugly!

#36 Happy Renter in North Van on 11.06.09 at 1:33 am

Looks like my MIL’s house in West End Toronto… Gotta sell it soon while there loose money and stupid kids out there!

#37 Emma on 11.06.09 at 1:50 am

According to the report from October 2008, GTA sales were down 35% from 2007 with prices down 10% – thus making this year’s stats look even more favourable. 2007’s high numbers were in part due to TREB pushing ‘pre land transfer tax’ purchases. This year’s growth is probably related the HST scare.

…by changing the numbers after the 2 mw’s in the ip address, you can go right back to 2000. It’s amazing how they spin the ‘mild’ declines versus the ‘incredible’ growth from year to year.

#38 Nostradamus Le Mad Vlad on 11.06.09 at 1:59 am

Indeed, the resurgence of Brain Farts Unlimited (BFU). Who’da thunk it? Neil Young’s song “Piece of Crap” comes to mind, but comparing his music to . . . well, fuggedaboudid.

“But we’re different…” — I hold a slightly weirder view than most, but we’re not different.

Maybe psycho-deranged-neurotic toadies. Guy Fawkes and his Merry Men ain’t got nuthin’ on us; then again, no one else has, either.

I need a massive overdose of Stupid Pills, just so that I can join in the fun, get myself hopelessly in debt and pass the torch on to the next load of looneybins who happen to wander by.
Scroll down a little, see the headings and look over the first paras. Thought I would let an artist introduce these links: “Steal a million and they’ll make you king, steal a dollar and they’ll throw you in jail.” — Bob Dylan / Lolly 1 / Lolly 2
Now for a brief 5:13 interlude. — Glenn Beck & Monty Python

#39 michael on 11.06.09 at 2:12 am

Garth –
What can I say…I need your perspective. Here you go…

Watching CBC tonight (The National) – there was a story on H1N1. What struck me was the commentary. There were health official’s on tap who disagreed with the recent stories about H1N1 – meaning the media was serving us what we wanted to hear . In summary – H1N1 = hysteria.. why? because the media tell us so…How is this different from real estate? It’s all about the story – flav of the day.
My wife was out this evening with a group of her friends only to receive the following email – (in confidence) – from a realtor…gold rush or sore arm…?? I can’t make sense of it – can you or your fans?

In West Vancouver, the sales to new listings ratio was 59% for the month of October compared to 15% in October 2008. The 59% for October 2009 represents a seller’s market. Sales for October 2009 are up by 65 units compared to October 2008. Also, the West Vancouver listing inventory has dropped by 149 units compared to last year for the same month. The average price year to date (YTD) was down 14% compared to October 2008. The West Vancouver YTD average price increased from $1,566,631 to $1,586,270 between September 2009 and October 2009.

In North Vancouver, the ratio of sales to new listings was 93% for the month of October compared to 35% in October 2008. The 93% for October 2009 represents a very strong seller’s market. Sales for October 2009 are up by 62 units compared to October 2008. In addition, the North Vancouver listing inventory has dropped by 213 units compared to last year for the same month. North Vancouver YTD average price increased from $882,162 to $893,141 between September 2009 and October 2009.

Detached Homes

West Vancouver

Sales (October)

Sales YTD (to October)

Avg. Price YTD (to October)

Active Listings (October)

Median Price (October)

North Vancouver

Sales (October)

Sales YTD (to October)

Avg. Price YTD (to October)

Active Listings (October)

Median Price (October)

Ok. Garth- what’s up with this?

#40 Daystar on 11.06.09 at 2:51 am

I’m giving the insanity at least another 6 months, maybe 9 before rising interest rates bring it to a close. At that point, right at the zenith peak of Canada’s most heavily distorted, bloated, grotesque, sickly asset bubble will all those responsible for its existence and fallout, every Conservative MP, banker, realtor, developer, every money grubbing bribing lobbyist and bribe taker will deny it ever existed at all, calling it a “market force anomaly” at play and nothing more.

At least… publicly anyway. Privately, talk of an asset bubble has been common already within the inner circles for quite some time, with the topic of the day being how one is best able to profit from it or get re-elected before the boom goes bust at everyone elses expense.

And then again…

If the Conservatives slip at all in the polls and their majority is in question, we should see the Conservatives bring 50 year nothing down amortizations along with interest only mortgages for the first 5 years to bring mortgage affordability to all time “theoretical” highs while driving valuations to Pluto, taking all credit for anything economically “positive” in the short term like saving the economy through perilous times with the great Conservative credit expansion to buy our votes part III, and/or later scapegoating should things go wrong! The go to, oft told line, “the Liberals would have done the same thing” will be the stale fresh soundbite of the day (again), while the NDP agree, saying there is no difference.

#41 Sukh on 11.06.09 at 3:13 am

Believe it or not, real estate will be priced higher in 7-10 years from now when valued in canadian dollars. IMO, here’s why. The federal government and financial institutions can’t afford to let home prices go down and they will do everything in their power to prevent that.

In one scenario, interest rates will be kept low for a very long time even after the United States starts raising theirs. This will devalue our currency just like the Bank of Canada wants. This will lead to an export boom and consequently inflation and an increase in immigration. As interest rates rise, people will be offered once in a lifetime rates courtesy of the Bank of Canada. For example, 30 year fixed mortgage rates subsidized by BoC/CMHC (yes taxpayers) for less than 5%. People lock in and are basically rewarded. Even if their value of their house stays the same or falls slightly, they are better off because of less interest they will pay over the following decade or so.

Also, international immigration to Vancouver and Toronto is probably the highest in the world. 50,000 and 100,000 newcomers annually will drive housing for the foreseeable future. This does not include the huge numbers of temporary workers/students here and who wont return (government does not monitor who leaves). These people will rent out the basement apartments. 500,000 people a year into Canada will bode well for house prices. Government will say they need them to provide taxes for the retiring baby boomers.

What do you think Garth?

Give me a toke. — Garth

#42 Jeff Smith on 11.06.09 at 3:24 am

If the buyer intend to use the place as a grow-op then it doesn’t really matter that the place is a tear down or not. Because after it has served its purpose, it probably has to be demolished anyway.

>#9 conan on 11.05.09 at 9:44 pm I am confident that
>the buyer is knocking this sucker down and putting up
>at least 2 houses. Or one big 2.2 million dollar mansion.

#43 Comfortable in a coma on 11.06.09 at 3:57 am

People, what you are missing is the bag of tulip bulbs that are buried in the back yard.
That makes it worth it!

#44 NOBODY on 11.06.09 at 6:23 am

To #13 Mark:
Garth once said that the TSX could go as high as 50,000 10 years ago…

As far as that $300K crack house in T.O…. Well, this is it.
I never thought I’d say this but if there is a bidding war on this one, the banks are irresponsible to loan at all and yes, soc iety is not only sick but we deserve a RE crash Arizona style.
Can’t the CMHC, the government or the CREA see anything coming?
Why commoners such as I see only bad in this?

I might as well go to the bank, borrow $400K to “invest” in RE and leave the country for Costa Rica with the cash, buy a nice place there and never pay a penny back.

My prediction in 1995, based on demographics, was that the market could achieve 40,000 by 2015. Let’s see where we are in six years’ time. — Garth

#45 mooncake on 11.06.09 at 6:27 am

Another blogger – is telling RE crash is coming.

#46 Stop Puttin Down Boomers on 11.06.09 at 6:42 am

Wonder what it would have fetched if it had been staged. :-) At least Granny will have money to pay for her senior’s home.

Unbelievable. Definitely a tear down.

#47 GregW., Oakville on 11.06.09 at 7:26 am

Hi Garth, FYI (link is from my internet provider home page. Amounts to take are in the artical)

Why vitamin D may prevent H1N1

The sunshine vitamin may help boost your immune system’s response to all flu viruses—including H1N1. Here’s how to ensure you’re getting enough vitamin D

“A 2007 study……vitamin D had a 90% reduced risk of contracting the seasonal flu over those who took a placebo.”

#48 WillsDad on 11.06.09 at 7:32 am

Brad Lamb got big play in USA Today. The second home for Americans, Toronto.

#49 Onemorething on 11.06.09 at 7:47 am

MISH on Canada Once Again! If you read this be ready to get that very sick feeling! And dont forget all the links:


#50 SaraBeth on 11.06.09 at 7:50 am

I see nothing at all wrong with that house other than the outragous price…that is just – well, stupid.

If the roof and foundation are sound and it is hooked up to gas and has a 100 Amp breaker box… I would pay 60,000 cash for it…move in and be quite happy…I love that large yard and the land next to it looks like open land. Spend a little more…say 40,000 to upgrade to a wind turbine or two and electrical wiring… some paint…maybe a bit of plumbing work…

Why do we have to be such snobs? In my younger days I was a journman carpenter building homes in Texas…and trust me…When that house was build it was well built…have you seen what goes into the new homes? Or what passes for workmanship these days?

No, if that had a sound roof and a sound foundation/basment… no history of flooding… it would make someone like me a fine home…I stress the word “home” here…

But not at ANY price…and certainly not at $400,000+.

#51 SaraBeth on 11.06.09 at 7:51 am

I see nothing at all wrong with that house other than the outrageous price…that is just – well, stupid.

If the roof and foundation are sound and it is hooked up to gas and has a 100 Amp breaker box… I would pay 60,000 cash for it…move in and be quite happy…I love that large yard and the land next to it looks like open land. Spend a little more…say 40,000 to upgrade to a wind turbine or two and electrical wiring… some paint…maybe a bit of plumbing work…

Why do we have to be such snobs? In my younger days I was a journeyman carpenter building homes in Texas…and trust me…When that house was build it was well built…have you seen what goes into the new homes? Or what passes for workmanship these days?

No, if that had a sound roof and a sound foundation/basement… no history of flooding… it would make someone like me a fine home…I stress the word “home” here…

But not at ANY price…and certainly not at $400,000+.

#52 SaraBeth on 11.06.09 at 7:52 am

I am sorry for the duplications…I don’t quite know why that is happening…


#53 Danforth on 11.06.09 at 7:52 am

There’s room to clear $100K profit on that property.

Tear down, put up a 2-story on the footprint, landscape and stage.

Detached (east end is full of semi’s) offers hard-to-find opportunity for renovators.

Can’t blame them.

#54 David Bakody on 11.06.09 at 8:08 am


Here is what the same price will get you here?

Here is what $255,000 will get you and these are the asking price with selling prices about 95-97%

Hello again …. and there is bus service and should you drive most jobs are about 20 minutes in morning and later at rush hours of course. Dare we compare the 401. sorry we do not have one or even close to it, then again who does?

#55 David Bakody on 11.06.09 at 8:09 am

sorry forgot to post the last referencce.

#56 Toronto C9 Renter on 11.06.09 at 9:02 am

# 53 said: “There’s room to clear $100K profit on that property. Tear down, put up a 2 story etc…”

Danforth, perhaps true but the investment would likely be at least 700k as another poster said, perhaps much more.

It’s a costly and labour intensive undertaking. Permits, design, demolition, financing, construction, finishing, landscaping, marketing etc. Given the risks in today’s market, why bother (unless this lot happens to be in Rosedale or Forest Hill which I doubt!)

There are easier ways to generate a return on investment, and with less risk.

#57 ALBERTAGUY on 11.06.09 at 9:07 am

Hey Garth, I thought you said gold will never be money.

Sure, a web site that lets metal nuts send each other bullion. Very mainstream. Gold is not money. — Garth

#58 Justin on 11.06.09 at 9:15 am

Irrational exuberance for some and a desperate gamble for others.

This asset class is destined to crash and burn along with commerical r.e. beginning next year.

The recession has ended and the depression is most certainly underway. Unemployment is again beginning to surge here in North America. Chinas economy is cleary a shell game as its export market has tanked (thats us) and its suppliers economies have also ground to a halt. Japan is on the verge of national bankruptcy etc. etc. I could go on but you’ve heard it all on this blog and in the international media previously.

The Greatest Fool has indeed arrived and they are just in time as the party winds down into a mind numbing hangover with all of the associated corollaries.

Do you have your Gravol ready?

#59 Bill-Muskoka (NAM) on 11.06.09 at 9:26 am

I wouldn’t pay $40K for that unkept, worn out, gawd awful colour scheme, ‘house’. SUCKERS!

#60 Boombust on 11.06.09 at 9:41 am

Clever Nana.

#61 Art Vandelai on 11.06.09 at 9:44 am

Actually that’s not all that bad – the buyer was likely attracted by the 57′ frontage, which is a good-sized chunk of land for an urban area. That house will probably be torn down, rebuilt with cheap materials, but all the frills (granite countertops), costing the buyer $50K plus six months of labour, and put back on the market for a million. Or the lot gets subdivided, and a semi put up at $500K each.

Good luck with that!

#62 miketheengineer on 11.06.09 at 9:51 am


This is Toronto, it is different here. The guy who bought it got a great deal. He will not rent bits of that place to 15 of his friends, all new to Canada, and they will make a nice profit. Not everyone in Canada, lives in a 4000 sf detached with 2 people in it.

Toronto is different…..ha.ha.ha.

My first job in Toronto, 15 years ago, I worked with our “mock up technician” This lady was very skilled, and had many years of experience from over seas. She arrives in Canada, and this is what she did. Somehow got the downpayment for a larger older home in T.O. Rented the upper floor to other relatives, family. Lived on the main floor with her family, then get this, created 4 rooms in the basement with a shared kitchen and bath and rented all 4 rooms out at about 400 each. This lady, who could barely speak english, was taking in about 2200 per month, to offset the costs of her home.

These people know the value of a buck, and how to “make it”. They know how to sacrifice, and they put the Canadian born people to shame….

Unfortunately, anyone who buys now, may or will, get caught in the negative equity situation, that Garth has been talking about. Scary times ahead.

#63 Bill-Muskoka (NAM) on 11.06.09 at 9:55 am

The City of Barrie, ON has now formally proceeded to annex large parts of Innisfil.

Barrie has been landlocked for years and what this means is that the developers will now have more fertile farm land to build their crappy, cookie cutter, postage stamp lot homes on. Prices will be around $195K to $250K.

With GO Transit Rail Service now available and Barrie being the northern most terminus (It was in Bradford-Gwillumbury), another mass exodus from the GTA will begin. Businesses are also moving north to escape Toronto’s insanity and poor management.

There are already an estimated 30,000+ people who daily commute from Barrie to the GTA. Not on the 401, but the 400.

Good luck on your RE ‘investments’ down there. You are now living is Hasbeenville! Soon to become the New Detroit! Isn’t that a joyful thought, eh?

#64 The VULTURE on 11.06.09 at 10:06 am

Video Game Company CEO “I Could Sell Dog SH**t In The Right Box And People Would Still buy It” (Video Game Executive to Vice President)

Corporate Executive: “You all ready do!”


What A Dump…..

This is beyond insane….

it is Asinine!


What is the difference between a first time home buyer and a guy that played football in high school without a helmet?

The football player was smarter!

Nuff said………….

#65 Gord In Vancouver on 11.06.09 at 10:10 am

Canada sheds 43,200 in jobs in October

#66 Nostradamus jr. on 11.06.09 at 10:10 am

#41 Sukh…Gives Very Balanced Argument for home ownership in Vancouver…he makes mistake for homeownership in Toronto.

…Mish has a blog column today explaining R E Bubble in Canada.


…Vancouver BC is only safe place to own R E.

Please everyone must consider the “new norm” in Canada.

…R E values will continue higher! because

Western Canada will secede from Eastern Canada…Vancouver will become Western Canada’s Capital City and will also become North America’s Financial, Trade, Culture and Leisure Capital.

…The North Shore…Wet and North Vancouver will become North America’s safest private gated community…access by only two bridges and one highway from the north.

…New Eastern Canada name going to be Quebec…they just bought New Brunswick (Power) and soon will buy rest of Atlantic Provinces.

Ontario….sorry Ontario….going to sink into the R E sand box….unless….Garth decides to be leader of new Ontario Provincial Govt.

Nostradamus jr.

#67 PeckedToDeathByDucks on 11.06.09 at 10:20 am

Canada Savings Bonds (imagine sound of a penny dropping on a granite counter top – that’s your interest)

Canada Savings Bonds (imagine sound of a gaggle of geese – that’s your banksters laughing)

The above advertisement has been sponsored by the generosity of The Garth Blog and PTDBDEnterprisesInc. to hopefully replace and be just as persuasive and stupid as the costly, repetitive ads currently aired.

#68 The VULTURE on 11.06.09 at 10:22 am

Pump and Dump Chump

Easily over $100,000.00 to renovate and update this nightmare!

Is that an old style “Grandma’s House” radiator I see in that closet sized kitchen?!?!?!?

Be easy guys…….Grandma and Grandpa loved their little house….and it was mortgage free.

The place could be haunted…..Creepy door down to a dark, foreboding basement. Maybe the former renter should be in anger management. He has ripped the door right off of his basement appartment!

#69 dosouth on 11.06.09 at 10:23 am

How do you get this message through to the local media? Another brilliant post on the local news blog and no one to respond. Maybe Garth you could send them a rebuttal, they may post yours.

Median house prices dropped $30k from September, not mentioned but have a look at the days on market DOM and price changes. Okanagan Real Estate Board needs a wake up call, the people are holding on to their properties hoping for the promised price increases and are losing and will soon lose big time.

#70 smw on 11.06.09 at 10:24 am

USA has hit 10.2% unemployment; with 190K jobs lost past month, Canada lost just over 43K.

Per capita, Canada is shedding twice as many jobs as the USA.

#71 Larry on 11.06.09 at 10:30 am

Until the govt stops backing 5/35 and Carney increases rates there will be no change. You only have to watch the H1N1 herd to see how people behave.

#72 Fool me once... on 11.06.09 at 10:39 am

Am I missing something here? It appears we have consistently been loosing more jobs per capita than our brothers below the line.

#73 Bottoms_Up on 11.06.09 at 10:39 am

#27 Maxime on 11.06.09 at 12:33 am
Bonjour Maxime,

Mr. Turner has frequently said interest rates are going up (and fixed rates actually went up a few weeks ago!).

One issue is that fixed rates move in relation to bond yields, but variable rates move based on the Bank of Canada’s overnight rate.

I read an article yesterday in USA today that said the US fed is not going to raise rates for quite awhile.

It is my personal opinion that the overnight rate in Canada will not go higher for at least a year, maybe two (and remember, housing is included in the calculation of inflation, which must play a role in setting rates).

Spoke with my banker last week and they told me ‘banks are getting killed on the prime and prime minus rates’. The banks want you to lock in–don’t do it!!!!!!

Bonne chance!

Vous en aurez besoin. — Garth

#74 Chris no longer in England on 11.06.09 at 10:40 am

UK personal insolvencies up by 28%.

#75 pezzazz on 11.06.09 at 10:41 am

“Argent” = silver/money. Garth when inflation/hyperinflation hits hedges are…silver, gold, platinum (yes they will still build cars and increasingly so in India and China), fine art, and real estate(paid off). I agree with many of your views posted on this site but your disdain for gold is unwarranted. When you have governments, which we question on this site daily, in control of the supply of a fiat currency and they start to act irresponsibly with that currency then in certain scenarios the above listed hedges are warranted. The Americans just said that they are going to give a house credit of $6500 to homeowners who have been in their house for 5 plus years, in addition to giving the 8K for 1st time home buyers. Weimar Republic? Nigeria? Argentina? Russia? Maybe not, but if it does come to that then the shiny yellow metal which has been around for several thousand millenia will outlast any piece of paper with a historial political leader on it.

I only wish they would bring back Volcker and defend this currency instead of wondering if they should bother to defend it.

I do not disdain gold. It equals oil as an inflation hedge, and wise investors will have 10-15% exposure (as I articulated in my last book). But it is not money. — Garth

#76 Bill-Muskoka (NAM) on 11.06.09 at 11:06 am

Apparently #66 Nostradamus jr. is attempting to counterfeit our dollar by being the resident Loonie?

#77 Jonathan on 11.06.09 at 11:07 am

From MISH’s Global Economic Analysis Blog (3rd most popular economics blog in the world)

A Canadian Says “Short Canada”

Already noted. — Garth

#78 Bill-Muskoka (NAM) on 11.06.09 at 11:09 am

#67 PeckedToDeathByDucks

Those ads, while quite visually pleasant, SUCK! But then, what should we expect from Oddawahaha? They think we are all idiots and will be magically Mezmerized into investing into an almost zero return scheme.

#79 jess on 11.06.09 at 11:21 am

thanks for that bloomberg link on fraudulent conveyance ! Takes me back to Shakespearean times.

What Does Fraudulent Conveyance Mean?
The illegal transfer of property to another party in order to defer, hinder or defraud creditors. Investopedia explains Fraudulent Conveyance
In order to be found guilty of fraudulent conveyance, it must be proven that the accused’s intention for transferring the property was to put it out of reach of a known creditor.

#80 Two-thirds on 11.06.09 at 11:22 am

A press release concerning the opening up of the MLS:

“ embraces proposed changes to the Real Estate Industry!

#81 Makeorbreak on 11.06.09 at 11:26 am

#82 Nathan in Edmonton on 11.06.09 at 11:39 am

Very much like the first home I purchased in 2000. It was 60K, plus 20K in renos and a lot of sweat — very nice home in the end.
Used to be first time home buyers bought places like that cheap as a way of stepping on the property ladder, now they handcuff themselves to it.

#83 Elle on 11.06.09 at 12:05 pm

RESURGENCE: a rising again into life -Merriam Webster.

What you see, is NOT what you get!

The resurrection of the REAL ESTATE market is no more a solid reality than the illusionary skeletons, witches and spider web, left over from halloween!

How could it be more than just ‘hot air’, when stability from other factors just are not there. How does RE rebound with 400,000 jobs lost in Canada in the last year, and 43,000 just this last mth! And this………..

OTTAWA — Finance Minister Jim Flaherty revealed Thursday that Canada’s budget shortfall will swell to a record $55.9 billion this year, but pledged that the Harper government will trim the deficit to a manageable size within the next five years.

If Harper could trim the budget in 5yrs, he would’nt be in this deficit in the first place!!! And exactly what new grief to the taxpayer, will this ‘TRIM’ entail?
Do you get the feeling that this whole thing will
……end badly..


#84 PeckedToDeathByDucks on 11.06.09 at 12:08 pm

Paperprestidigitizer Basics:

England’s Brown Says Doubling Bank Bailout Will Save U.K. Taxpayers Money. Yup, another 39.2 billion pounds of taxpayer’s money to the banks. “At the end of the day, banks will be paying money to the British public, not the other way round.” Which day?

So, taking this to it’s logical conclusion…shouldn’t they be increasing that bailout 10 fold for even greater returns? Is our “working hard” Parliament taking note?
:-) going forward ;-)

#85 Downsized and Delighted on 11.06.09 at 12:16 pm

Did you really have to make a public spectacle of this person’s home to prove your point? My house is a knock down, and it is fully renovated.

The land value obviously supports the price.

Since when did it become open season on granny?

21 grannies competed for this. The greater granny won. — Garth

#86 Bill-Muskoka (NAM) on 11.06.09 at 12:17 pm

#82 Nathan in Edmonton

You’ve got that right! Perhaps the newbies do not have the skill set to do reno’s? Video games do not have those included. LOL Every place I have lived/owned got the Master’s Touch and became worth more than I paid for it originally.

I invest in things that make me money like good tools and skills. Those are totally transportable to any location and economic times.

#87 Nostradamus jr. on 11.06.09 at 12:31 pm

# 76 Bill-Muskoka (NAM)

You so crazy guy.

….my post #66!!!!!…scary # is #66…you be smart individual to refer to my post a few years from now.

Rain good for skin….not too hot, not too cold…excellent feng shui in Vancouver….Caucasians sooo dumb….renters moving to Ontario, goodbye…soooo many rich Asians moving to Hongcouver because is so cheap here… Hong Kong soooo expensive and crowded.

I should be a chinese poet

Nostradamus jr.

#88 Genghis on 11.06.09 at 12:38 pm

The unemployment rate is 8.6% in Canada, worse than expected.

The recovery is described as ‘Saw-toothed’

How much longer can this real-estate nuttiness go on?

#89 Increasing that 1% on 11.06.09 at 12:39 pm

Vous en aurez besoin. — Garth
Pardonne moi – Translation?… si vous plait,.. Maxime?…
(sorry for any wrong spelling)

#90 Daystar on 11.06.09 at 12:41 pm

Statistics Canada puts out a second barometer of employment called the Survey of Employment, Payrolls and Hours, which counts jobs from the industry perspective, rather than the better known survey of households. Whats interesting about the article is its ascertion that this second barometer is far more accurate concerning employment and leaves up to question, the validity of household numbers, particularly the numbers preceeding the last election.

I found this quote to be interesting:

“As well, this is not the first time the household survey has raised concerns. Statistics Canada’s reliability came under scrutiny last fall, when in the middle of the federal election, it reported that 107,000 new jobs had been created in September just as the economy was tumbling into a deep recession.

That shocking number stuck out because it was preceded by mostly flat results the previous two months and by large job losses afterwards.” – MSN

Geez, would Stats Can ever lie to you? Certainly the government in power does.

#91 shifty on 11.06.09 at 1:31 pm

Hear Garth in Victoria

I was put on a waiting list when I called – geeez your getting to be rock star status.

#92 kitchener1 on 11.06.09 at 1:34 pm

2010 is going to be tough year, there will be real recovery to speak off.

All the US/CAN govt’s have done is move future demand forward with unsound fiscal policy.

Garth you have talked about it this before as have other poster on this blog, but its worth another mention.

Cash for clunkers means a tough year for car sales in the year ahead.

Our low interest rates have done the same for housing. It cannot last, buyers cannot break records month over month for years on end.

Future demand forward = a double dip recession.

All this talk about a jobless recovery is mute, there is no recovery without jobs, people with no work do not buy products, Tv’s, cars etc…

#93 MikeB on 11.06.09 at 1:36 pm

To be truthful … I have seen much much worse than this one in T.O. The one I saw was around a year ago.. exterior bricks were so bowed out they had to try to point them to keep the house from exploding outwards…the steps to the basement… dirt floor… were hacked into the back of the house… dry rot but a brand new furnace and electrical panel… ceilings falling down . Bedrooms were 8×8 if that.. one bathroom off the kitchen which had no running water.
To boot… an old lady lived there until a month prior.
Scary … asking was just over 200K… sold and they just vinyl sided over the side of the house…not sure about the rest… should have been torn down..

#94 Calgary Rip off on 11.06.09 at 1:58 pm

Houses are a rip off in Canada. Move along, nothing to see here!!

#95 smw on 11.06.09 at 2:02 pm

#84 PeckedToDeathByDucks

You know what would have helped out the UK, is if Gordon Brown hadn’t have sold off all over half the UK’s gold reserve at rock bottom prices($300 an ounce) to the IMF. That sell off pushed gold down to $250 in 99/00.

IMF is making a killing aren’t they? Cause they just sold off 200 ounces at $1090 to India. That’s 6.4 million ounces. Sri Lanka is the next on the gold band wagon.

That sell off of 12.8 million ounces at around $300 an ounce cost the UK ($3,840,000,000 in the late 90’s versus $13,952,000,000 today) 10 billion dollars. All things considering, that isn’t very much gold compared to the cash the printing presses have been creating printing bail-out cash.

Brown should have a great position in the IMF after his term as PM is over.

“Gold still represents the ultimate form of payment in the world . . . Germany in 1944 could buy materials during the war only with gold. Fiat money paper [a technical term for legal tender] in extremis is accepted by nobody. Gold is always accepted.” – Alan Greenspan

#96 GP Girl on 11.06.09 at 2:13 pm

#70 smw – Just to make your day here’s some numbers.
Approx. 33,000,000 people in this country give or take.
According to October stats there are now 1,587,400 people unemployed and that’s only the ‘official’ number.
Number of people employed as per October stat is 16,794,800 (I assume that’s public & private sector). That leaves another 14,617,800 people who are not working ie: seniors,children,disabled, criminal element, and ?
So now deduct approx. 65% from the actively employed, this is for all municipal,provincial,federal employees. That’s your health care sector,teachers,policing,municipal councils,public works dept’s and all the lovely politicians(sorry Garth,you are an exception). This leaves 5,116,230 to work and support 9,501,570 people in the public sector/government and of course the 5,116,230 seniors etc. I’m fine with seniors,disabled people etc. not so much the other group.
My understanding is that when the public sector is larger than 40% of the private work group you will eventually have problems, BIG problems. So as I see it we’re top heavy by roughly 4,198,700 people in the public realm. Even if with 100% employment which I’ve never seen, that number would still be 3,563,740 too many.
And last month I read an announcement that in spite of our recession employment in the public sector has grown by another 4.2 %, how nice.
So remember, a little more than 5 million workers that support over 9 and a half million public employees and politicians. All those salaries,benefits,fully indexed gold plated pensions and god knows what else, it all comes from the private sector -you and me. Yes they pay taxes like all the rest of us but they pay their taxes with further earnings received from us. Ha ha just too funny.

#97 Sukh on 11.06.09 at 2:13 pm

regarding post #41. Garth, im not trying to defend/pump the real estate market up as elevated housing prices are detrimental for society as a whole.

However, our capitalistic system is a game that doesn’t put people first. In this game, owning large amounts of debt in times of high inflation is good as you debt is lessened vis-a-vis your own earning power as the years go by. IMO, this will happen. People who buy now will be rewarded (moral hazard?) however wrong it may sound. There are just too many stakeholders (via their policies/money) to prevent housing to go down.

#98 OnlyTheBankersLaugh on 11.06.09 at 2:50 pm

After waiting 5 years for some semblance of reality to take hold in housing and with interest rates at historical lows with governments promoting 35 years mortgages with no money down, people losing their jobs daily and hidden or unrecorded unemployment up sharply over the past year, I still would not be surprized if this simply keeps going for at least another 2 years well beyond the USA fiasco because it’s “the new reality” and the media continues to praise how well things are going. Protect the dollar against USA $ as our largest trading partner so rates will never raise higher than USA. What a complete perfect storm brewing but it will take 5 years to load up, blow up and slowly come down… and who knows, if US can continue to deflate their dollar and still have china put money into bonds paying nothing, maybe it will even continue even longer. Something has got to give, you figure, but then it keeps on going further up for bigger records. I know the bigger they are, the harder they fall but ……….. Ahhhhhhhhhhh!

#99 Bill-Muskoka (NAM) on 11.06.09 at 2:55 pm

The land value obviously supports the price.
#85 Downsized and Delighted

ROFLMAO! Yeah, Sure, Right! I can’t wait for the True Owner to claim possession. In the interim, the only way that land is worth that much is if a Far Greater Fool were to buy it. Then they will also pass it on to next Greater Fool.

Perhaps a commercial venture who will then reduce employee wages and benefits because they can’t afford to pay real wages or provide benefits. What goes around comes around.

When will people ‘Get It’? We are all in this game together and your greed will become the greed of the next narcissistic arsehole.

Likewise, some commercial RE agent sits there lusting to rake in an undeserved commission manipulating the Fools of this society. Who said we were evolving? They haven’t looked at this blog and the RE industry.

#100 Watched Bubble Never Pops on 11.06.09 at 3:07 pm

#19 jaksun

“#5 “Doctor” turned realtor is a chiropractor, not a real doctor”

Who cares. Don’t let your envy show too much now…

#101 Watched Bubble Never Pops on 11.06.09 at 3:10 pm

#29 Onemorething

“The turn is sooooooo close now I can taste it!”

Haven’t you been saying that for years now? Good luck with that.

#102 Watched Bubble Never Pops on 11.06.09 at 3:17 pm

#40 Daystar

“I’m giving the insanity at least another 6 months, maybe 9 before rising interest rates bring it to a close.”

You should look at Garth’s archives back in early 2008 when he only had 20 people posting to his blog – they said similar things, over and over again, for months. They’re still wrong.

#103 Watched Bubble Never Pops on 11.06.09 at 3:19 pm

#41 Sukh

Your scenario is not unreasonable.

#104 Watched Bubble Never Pops on 11.06.09 at 3:19 pm

#45 mooncake

“Another blogger – is telling RE crash is coming.”

Another blogger who has been repeatedly wrong.

#105 Bill-Muskoka (NAM) on 11.06.09 at 3:22 pm

And now for something completely different (note we must all take a deep breath now and then, but will we be able to?)

Climate talks end on divided note

And how the world sees the Obama vs: Fox debacle.

Canada is considered a joke among climate campaigners, particularly when politicians talk about cuts compared to what future emissions might be.

Doesn’t that make you feel proud?

#106 Mikey on 11.06.09 at 3:29 pm

Garth, whats your view on the swine flu shot take it or not?


#107 Men With Hats on 11.06.09 at 4:05 pm

Price is wrong :
Actual retail value of this package is ten bucks .
Kool-Aid tastes grrrreat !
Madness . Sheer uncontrolled madness .

#108 OttawaMike on 11.06.09 at 4:39 pm

#85 Downsized and Delighted on 11.06.09 at 12:16 pm:
“Since when did it become open season on granny?”

You said the same sort of thing I was thinking.

#109 Jeff Smith on 11.06.09 at 4:59 pm

>#50 SaraBeth on 11.06.09 at 7:50 am
>I see nothing at all wrong with that house other than
>the outragous price…that is just – well, stupid.
>If the roof and foundation are sound and it is hooked
>up to gas and has a 100 Amp breaker box…
>I would pay 60,000 cash for it…

[stuffs snip]

I dunno what is the right price Sarabeth, but I am afraid I will have to put in a higher bid than you. I am sure there are gonna be multiple bids above your asking price.

How about $65000 for it??

#110 jess on 11.06.09 at 5:11 pm

I guess all that exude confidence came from their live coaches;^)

so fourteen years later…. It was the independent Financial Industry Regulatory Authority (FINRA), regulator who alerted officals …WHAT TOOK SO LONG and where was the regulatory bodies in Canada?

The two lawyers /insiders ran a scam for fourteen years and made confidential info.

#111 Pat G on 11.06.09 at 5:12 pm


We’re all waiting to see if Mikey likes it! Seriously, if you have kids or have anyone vulnerable because of other chronic conditions like asthma, diabetes, heart or lung disease or autoimmune diseases, you really should get the shot. Ask your doctor if you have anything to contraindicate vaccines.

Best wishes.

#112 Nostradamus jr. on 11.06.09 at 5:20 pm

Hongcouver is next New York City…Financial, Trade, Culture and Leisure Capital.

…Explains why R E Prices so high and rising.

New rich people from Hong Kong!…not New York!

Nostradamus jr.

#113 john m on 11.06.09 at 5:35 pm

Now there’s a sweet piece of property.comfy but itchy ah yes it appears our country has become overpopulated with millionaire credit junkies.It appears to me that the Government and the financial institutions have done a fine job of wringing out every last dollar they can from the “sheeple” and really whats better in a surge for power than dependent people with no where to turn grovelling at their feet………..hmmmmmmm……….makes me wonder what the future brings……..but we have accountability…don’t we?????????????

#114 Dee on 11.06.09 at 5:39 pm

Look up to Jesus. Only He can save you. Repent. Repent.

#115 jmcanuck on 11.06.09 at 5:59 pm

Watched Bubble seems to spend his entire day arguing against Garth and most of the blog dogs here. He is either a realturd troll or needs to start his own blog on why real estate will always go up and how pigs can fly.

#116 Bill-Muskoka (NAM) on 11.06.09 at 6:11 pm

#114 Dee

Sorry to tell you this but Jesus died about 2,000 years ago. His brother, James, then took over the Essene Sect at Qumran.

#117 Bill-Muskoka (NAM) on 11.06.09 at 6:13 pm

I see Nostradumas’s bag is still not empty. Sure glad he lives in BC where the Bud is plentiful.

#118 jess on 11.06.09 at 6:17 pm


Home builders’ perks helped lead buyers to bust
By Michael Van Sickler, Times staff writer
In Print: Sunday, November 8, 2009

“Experts especially liked Lennar’s “Everything Included” business model, which steered prospective buyers toward the company’s lender, appraisers and Realtors, and away from anyone independent.

“A personal touch toward customers and employees goes a long way,” raved a Fortune magazine article that praised the company’s rapid growth. “In that regard, no one does it better than Lennar.”

Try telling that to residents of Carriage Pointe, where half the homes are in foreclosure. Lennar provided the mortgages for 162 of Carriage Pointe’s 380 homes. Since 2007, at least 74 have had foreclosure actions filed against them. …

Builders absolutely had a large role in this,” said Chris Lafakis, an economist at Moody’s “Many of them didn’t care about the performance of the mortgage because they were packaging them to investors.”

Lennar’s annual reports said as much during the boom years, when the company made record profits.

“Substantially all of these loans were sold within a short period in the secondary market,” its 2006 annual report stated of that year’s haul of 41,800 mortgages. Since most of them were sold to investors, Lennar greatly limited its exposure if the borrower couldn’t pay the mortgage. ..

A review of the enticements offered by builders during the boom years shows how hard they worked to get customers to use their mortgage companies.”

#119 Bill-Muskoka (NAM) on 11.06.09 at 6:19 pm

Oops, My bad HTML. Here is the link corrected.

And how the world sees the Obama vs: Fox debacle.

#120 Peter Wiener on 11.06.09 at 6:24 pm

#96 Sukh

Don’t make me laugh!

Garth was very kind to you in his comment in only suggesting you were getting high – I would not have been as nice.

If in the USA, with every lever of control the Fed has in cahoots with whoever they want can’t stop a real estate bubble from popping DESPITE FALLING INTEREST RATES AND VIRTUALLY NO LENDING DISCIPLINE, how does a country like Canada?

Think about it.

#121 Opportunity on 11.06.09 at 6:25 pm

PanAm games are coming. Good reason for getting those Toronto prices higher as Vancouver saw with the Olympic bid win.

#122 Nostradamus jr. on 11.06.09 at 6:33 pm

Bill Muskoka…Eastern Canadian Caucasians are all in denial about Hongcouver and have been for nearly 20 years now.

…Asians, Sikh Indians, Persians and Zorastrians have not been in denial.

They have been wise enough to know that Toronto was no longer “Centre of the Earth”.

It is still not too late.

Nostradamus jr.

#123 Heating Guy on 11.06.09 at 6:41 pm

#96 GP Girl
The private sector doesn’t bank roll the entire public sector. Much of the governments wealth comes from our God given resources. Oil, gold, natural gas, uranium, nickel, lumber, Hydro, diamonds, ect., ect. Money is paid into government coffers to extract and exploit these resources. In theory you could have an entire country of well paid paper pushers (public sector) with all the real work done by non citizen migrants and all paid for by your natural resources. Abu Dubai is a good example. Just make sure you have a good military made up of citizens and not mercenairies to defend it all or you’ll end up like the Roman Empire. …..self employed heating contractor.

#124 Devil's Advocate on 11.06.09 at 7:00 pm

I look at that house and see, given the location doesn’t totally suck which the bid up selling price suggests quite the contrary, a larger lot with mature landscaping and a house which, while it does have hardwood, granite, stainless, 5 piece ensuite etc, is probably better value than some newer at twice the price. That’s not to say it’s a bargain. But the fact is it sold for what it’s worth in this market.

I’m seeing a return to yesterdays values. Buyers are steering away from the massive cookie cutter houses on tiny lots (McMansions). They are embracing the three biggest factors one should consider when buying real estate – location, location, location. A well located property will in an increasing market increase more and in a falling market hold it’s value better.

Also a lot of downsizing going on – people bailing out of those McMansions while they can still get such a lofty price for them and then turning around and buying a… well… lets call it a “centsible” home.

Are we looking at the same house? No stainless. No hardwood. No granite. No ensuite. No landscaping. — Garth

#125 Joseph on 11.06.09 at 7:10 pm

Deflation is now the real threat. Read

#126 Soju on 11.06.09 at 7:11 pm

Latest Vancouver Statistics:

Wednesday, November 4, 2009

VANCOUVER – Strong demand has led to a steady

Use a link. Real estate here is more valuable than in Shaughnessy. — Garth

#127 JT on 11.06.09 at 7:16 pm

@Nostradamus jr.

I’ve lived in Vancity for too long my irony filter is broken are you serious or joking?

#128 Nostradamus Le Mad Vlad on 11.06.09 at 7:19 pm

#71 Larry — “Until the govt stops backing 5/35 and Carney increases rates there will be no change. You only have to watch the H1N1 herd to see how people behave.”

In the early ’80s, interest rates soared to 22%, but we survived and coped. Stalin killed off a few of his countrymen, then there was Pol Pot, etc. Lambs to the slaughter, like taking candy from a baby.

This link — Vaccines
— with the growing unemployment in North America, the restlessness in Europe and other places, depopulation (crowd control and this fiscal fiasco) all seem to have come conveniently together at the right time.

Co-incidence? I think not.

Re: the de- and inflation comedy duo — Inflation

#129 Soju on 11.06.09 at 7:21 pm

Latest Vancouver Real estate Statistics:

Garth don’t be so hard on yourself. There are other educated people that might not share your opinion.

Did one of them tell you? — Garth

#130 NOBODY on 11.06.09 at 7:36 pm

#112 Nostradamus Jr wrote:

“Hongcouver is next New York City…Financial, Trade, Culture and Leisure Capital”.

God, I hope not.
I recently visited Vancouver and honestly the place sucks.
Vancouver was the last large Canadian urban area that I did not visit ever. Yet.
The place is boring. It rains, rains, rains,rains again.
That aquarium? What a joke at $22. Nothing to see.
Gastown? Everywhere you go there, it costs you money. Honestly. Granville St sucks. Hwy 99 sucks. There’s traffic everywhere all the time.
Did I mention rain?
Canucks fans are rude.
Home owners there are suckers as it costs $700K for a piece of crap without any yard. Plus that yard is wet.
I had PAY parking at my hotel!!!!!! When I told the front lobby that it was a first for me to see pay parking at a hotel, they looked dumbfounded.
Vancouver is nothing.
Victoria is much nicer.

#131 Emma on 11.06.09 at 7:51 pm

#89 Increasing that 1%
For those wanting to learn french, take french courses or use babelfish in the meantime

#106 Mikey
For those on the fence with the flu shot – have confidence in your immune system and reflect on how well your body has reacted to other vaccines in the past

And for those who still can’t see the writing on the wall despite the gathering storm that Garth has painstakingly laid before your eyes over the last couple of years – PLEASE sign up for watched bubble’s ‘event’ so that he can have enough money to start his own blog.

#132 eddy on 11.06.09 at 8:11 pm

an end user Did Not buy that house. in fact, I’d be surprised if Any of the 21 offers were from end users. the property has just one feature- 57′ frontage, maybe splittable.

#133 Boombust on 11.06.09 at 8:11 pm

“Hongcouver is next New York City…Financial, Trade, Culture and Leisure Capital”

You need a dose of Troll – B – Gone.

#134 Boombust on 11.06.09 at 8:15 pm

“Ok. Garth- what’s up with this?” (Michael, #39)

Don’t be such a dunce.

#135 Repatriated Expat on 11.06.09 at 8:47 pm

#95 – great post, I’ve thought about that before but couldn’t put numbers to it. It explains a lot.

#136 dave99 on 11.06.09 at 8:47 pm

Watched Bubble,

Apart from quoting other posters and saying “ha ha, hasn’t happened yet”, do you have anything else happening in your head?

#137 Devil's Advocate on 11.06.09 at 9:05 pm

“Are we looking at the same house? No stainless. No hardwood. No granite. No ensuite. No landscaping.” — Garth

Typos on my part… netbook, small keyboard…

Typing while driving again, eh? — Garth

#138 Onemorething on 11.06.09 at 9:06 pm

#101 Watching Blog Never Leaves,

I hear Nos Jr. bought coffee this week! Enjoy each other!

And thanks for helping us all KNOW we are SOOOO Close to the turn. Your increased frequency of this blog just proves it!

It’s okay to be worried, we all are! The best way to get your house in order is not to own one!

#139 Emma on 11.06.09 at 10:25 pm

#39 michael

Why your realtor would state YTD numbers when discussing month over month data, I do not know. Is he actually adding any value to your decisions or are you guys really as confused as your post suggests?

These stats tell me that the top enders are removing their properties – or just not listing at all – since they can’t get the price they want (hence the decrease in listings coupled with the fact that median price is up while averages are down). This leaves your crappers and must sells in the market (hence the drop in prices) while ever more people are looking to get in (hence the increase in sales).

North Van obviously has a stronger market because it appears to be half price – although both neighbourhood averages look insane to me.

Once the market is set as a sellers market, my best bet is that your top enders will jump back in since the average house down the street just sold for $1.5M and they were looking to get $2.0M for theirs, but couldn’t this year (but months of inventory in West Van dropped from 30 last year to 5 this year – this gives them hope).

So next year, either your realtor makes 25% more on his commission and you’ll ‘look like a fool’ for not getting in this year…


…the prices will drop even more next year and no one will get $2.0M for the average house for a long time to come.

Personally, I’d rather be a fool that doesn’t have a $1.4M mortgage than one who does. This is my opinion, others may tell a different story with the stats you provided.

#140 BigAl (Original) on 11.07.09 at 12:10 am

#96 GP GIRL wrote
“…So now deduct approx. 65% from the actively employed, this is for all municipal,provincial,federal employees. That’s your health care sector,teachers,policing,municipal councils,public works dept’s and all the lovely politicians(sorry Garth,you are an exception). This leaves 5,116,230 to work and support 9,501,570 people in the public sector/government ”

Where do you get that figure that 65% of all the workforce is public sector?? That’s 10 Million public sector workers in the country.

It’s really quite tiring the simpleton approach the masses have – you play right into the hands of what the real powers want. You probably blame welfare recipients for everything too. You probably never even look at corporate gouging of government contracts though. You probably don’t raise a finger at the idea of the CEOs of the big five having carte blanche and regularly dropping by at 255 Albert St. in Ottawa, to dictate what the next changes to the Bank Act will say and what it won’t, with the public having no input (that address is where the Office of the Superintendent of Financial Institutions is).

No, you’ll blame the unions, blame the government workers, blame the welfare people. You don’t have to think too much that way.

And it goes on….

#141 Fist Full of Dollar$ on 11.07.09 at 1:31 am

Is it just me, or did the fact that Canada shed another 43,000 jobs not seem to get much media attention?

#142 Future Expatriate on 11.07.09 at 4:21 am

“Sure, a web site that lets metal nuts send each other bullion. Very mainstream. Gold is not money. — Garth”

Wait until China gets wind of this. Mainstream in a matter of months.

But I must finally agree with Garth… gold has inherent value, therefore it’s NOT paper cash money, which soon enough will be inevitably worthless.

#143 SaraBeth on 11.07.09 at 5:47 am

# 109 Jeff Smith…

You want it for 65,000 CASH?…. it’s yours… I don’t do bidding wars.

;-) See how that works?

#144 Bill-Muskoka (NAM) on 11.07.09 at 10:32 am

#142 Future Expatriate

Money has always been worthless, other than the material it is made of, which is, afterall is said and done, worthless.

Money certificates, paper or coin, are merely convenient mediums of exchange for the purpose of conducting trade. Money came about to eliminate the physical need to drag livestock and goods in barter exchange.

Canadian Tire Money is just as real of money as Canadian Loonies or paper bills, or USD, or any other currency. Note, for instance, the saying on the USD ‘Federal Reserve Note Good for all debts public and private.’ That literally means the USD is just a universal cheque that people may use in transactions.

Governments print money, it wears out or is lost, and then is destroyed. Then they print or coin more. The intrinsic value of it is ZERO. The extrinsic value is what we choose to place on it.

Likewise, I used to teach my Vo-Tech students this philosophy. ‘If you wish to possess something, first ask yourself this question. How much does it cost based on your actual take home wage and how many hours of your life are you willing to exchange forever to possess that item?’

If we started viewing costs based on life given in exchange would we not have a better and more realistic value system? There is ‘no life time’ credit. There is only the time we have and we should spend it wisely.

People today talk about freedom but they happily become Bond Servants to the world by taking on debt obligations that even a desperate Bond Servant would have rejected as insane. Slavery is alive and well, just not as brutal as it used to be.

#145 Emma on 11.07.09 at 12:06 pm

#140 BigAl (Original)

Good point!

Though the numbers are based on a sample, it’s actually 16% self employed, 20% public and 64% private. Note the increase year over year in “Finance, insurance, RE and leasing”.

#146 Barb the proof reader on 11.07.09 at 1:09 pm

Re: #28 nonplused


Sorry to disappoint you nonplused, but your Jefferson quote is a fake. Please refer to the “PHONY JEFFERSON QUOTE ON PRIVATE BANKS”.

Or, check it yourself.

Please kindly try a little harder to stick to facts. Here’s what JEFFERSON did say, amongst his many insights:

“[The] Bank of the United States… is one of the most deadly hostility existing, against the principles and form of our Constitution… An institution like this, penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a critical moment, upset the government. I deem no government safe which is under the vassalage of any self-constituted authorities, or any other authority than that of the nation, or its regular functionaries. What an obstruction could not this bank of the United States, with all its branch banks, be in time of war! It might dictate to us the peace we should accept, or withdraw its aids. Ought we then to give further growth to an institution so powerful, so hostile?”
— Thomas Jefferson, 1803.

But thanks, for drawing everyone’s attention to his wisdom.

#147 Barb the proof reader on 11.07.09 at 1:43 pm

#119 Bill-Muskoka (NAM)


I was just peering at your link (pardon me for being so bold) and noted some light, non-Corpocracy news:

Charlie and Harry have racked up their 130 millionth hit last week to become the most watched item in the history of YouTube

Charlie bit ME, too :)

#148 Bottoms_Up on 11.07.09 at 1:52 pm

.#89 Increasing that 1% on 11.06.09 at 12:39 pm
“you’ll need it”

#149 Future Expatriate on 11.07.09 at 4:47 pm

#144 – “Slavery is alive and well, just not as brutal as it used to be.”

Brilliant. Absolutely brilliant.

And also not as overt. But every bit as usurious, and getting worse.

#150 Sukh on 11.07.09 at 5:13 pm

#120 Peter Wiener…

The difference is USA never cared about the first domino falling. Canada is already preparing for that and won’t let it fall via policy changes. Don’t ridicule my comments without substance..that’s just immature.

On another note, with respect to real estate and prices, land will continue to be concentrated in fewer and fewer hands as time goes on. As such, incomes mean little. In south Asia, land/houses are so expensive that the common wage earner could never afford it. Its been like that for a few decades. And no there is no CMHC equivalent in india. That is what will happen in the major cities here where most people will rent.

#151 Bill-Muskoka (NAM) on 11.07.09 at 5:59 pm

#122 Nostradamus jr. Contrary to your apparent stereotypical belief I do not, not have I ever thought of Toronto as the Centre of The Universe. I regard most Torontonians as being Citiots who are two fundamental clicks short in the making of a clue as to what life is about.

Now, as to Vancouver, been there, stayed there a while. You can have it also!! Worst road system for a major city I have ever seen. You can have the rain as well. Stanley Park and the Sky train are two of its best features. The Aquarium is nice also.

As to the non-white population I have to pretty much agree. They are smarter than the average White Folks because their culture taught them how to work together.

They are and will continue to be very successful because of their work ethic, family orientation, and investment/savings ideology. Apparently, however, Vancouverites seem to lack any semblance of RE values and when it crashes their best hope is for wither a tsunami or The Big One (Earthquake) that will compensate for their drastic loss of property values through their insurance coverage.

Shall we now talk about RE values in say Calgary or Edmonton? ROFLMAO! I have lived in Edmonton and experienced first hand what a non-economy is like.

The city has great potential, but the people just are too enthralled with their own mindset and Calgary to grasp what they have. They might consider putting the airport somewhere actually NEAR Edmonton as well. But, hey, what do I know?

So, how is the Metroploitan Hotel, Hy’s, and the Kobe Steakhouse doing nowadays? Kobe was the one worth going too, but we have a better experience up in the Muskoka called the Wabora Japanese Fusion Steakhouse. It is rated one of the 10 best in all Canada and the prices are a lot more reasonable.

For the Citiots they can go to the Benihana in The Fairmont Royal,York Hotel in Toronto, or Terra’s (minimum about $400 for a couple) and have their Brink’s Amoured Car meet them there, or their banker. LOL

If you are actually connected then you can go to the Granite Club in Toronto.

#152 Bill-Muskoka (NAM) on 11.07.09 at 6:04 pm

#150 Sukh

I recall an article years ago, decades actually, about Tokyo’s land prices, about $1 Million per square foot. Now that is some EXPENSIVE LAND!!!! I recall traveling to Tokyo on business back on the early 1980’s and a steak dinner (Kobe) was $80 USD. However, at the time that equaled about two semi’s of Yen! LOL

#153 Soju on 11.09.09 at 4:23 pm

Sukh Says,

On another note, with respect to real estate and prices, land will continue to be concentrated in fewer and fewer hands as time goes on. As such, incomes mean little. In south Asia, land/houses are so expensive that the common wage earner could never afford it. Its been like that for a few decades. And no there is no CMHC equivalent in india. That is what will happen in the major cities here where most people will rent.

Well said…. It’s easy to say if I saved the difference between rent and a mortgage I’d be further ahead. Unfortunately, renters are where they are because the have the bad habit of not saving.

#154 cb on 11.11.09 at 9:20 am

I plan on selling my modest 1400sqft late 70s era detached home in Ajax, ON in the new year, as we have to move to Alberta to get treatment for our autistic daughter which Ontario does not provide. – Shame on Ontario, but that’s another subject.

An identical model in the area recently sold for around 290. I paid 195 back in 2000.

We plan on moving to Calgary.

Housing in Calgary: from browsing mls listings, it certainly seems more expensive than Durham area of GTA.

My house in Ajax is owned outright. no mortgage; I never saw it as an “investment”, just a modest comfortable home in a pleasant quiet suburb for me and my family to live in.

To buy a comparable house in Calgary, I’m looking at a mortgage of 50-100K, once I factor in land transfer and other taxes/fees.

We’re probably going to rent first, and buy once we figure out exactly where we want to live.

I am worried about sitting on the fence too long though. Are the prices really going to crash significantly ? or “just” stagnate ? I guess no-one really knows for sure.

I do agree, that, with the economic situation, the prices just dont make sense. I read your book, and agree with much of it – it makes sense.

A year ago before my daughter was diagnosed, I was convinced I would never get caught up in the emotional real easte insanity. But now I’m faced with moving, I’m asking myself “If I dont buy soon, Am I going to be priced out forever ?”

As a side note, From what I’ve seen, Property taxes are significantly less in the Calgary area, than the eastern GTA.

Any Calgarians have opinions on the market there ? Has it fallen significantly from a year ago ? Will it fall further ? – With unemployment and interest rates going higher, it would make sense that things slide..but I dunno, real eastate defies logic, we just want somewhere half-decent to live.

Thanks for reading my ramblings…

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