Measured correction

First, regarding my speaking event in Toronto on November 9th. Holy crap. Over the weekend, twice the anticipated number of people signed up to attend, and the hotel ballroom booked for the event is now of insufficient size (it holds only 500). So, more space will be added to accommodate everyone. If you received an email confirmation, you’re in.

But if you find you cannot attend, please send me an email ([email protected]). Replacement  reservations will be available here, starting on November 1st to fill those seats. Thanks for being so interested; I plan to take this occasion to outline exactly what’s coming for real estate, the economy and the poor innocents who think we’re on the way back to 2007.

Second, this blog lost its focus over the last two days. Actually, it sucked. Credit for that goes to the gold pumpers and tinfoiled conspiracy theorist whackjobs who support them. Owning gold is fine. Obsessing about it and jamming bullion down everyone’s throat, while cheering for the collapse of society and fictionalizing a world government which will control wealth and apportion babies is not. You nimrods need help. Shove off.

Third, let’s talk about the state of the real estate market as we exit the crucial month of September. Hey, let’s nob about Crystal Tost, too.

As you probably know, there are two seasons for selling houses – spring and autumn. This is when the rubber hits the road, when busy realtors make commissions that will buy them lumps of coal and hot gruel to survive the cruel months to come. This year the fall season’s wrapped in apprehension, coming after months of declining sales across the country and a widening belief the bubble is deflating.

Of course, the housing industry is fighting back, twisting a few facts and spewing out media releases designed to create an impression of momentum and recovery. Days ago, for example, Cameron Muir, chief comedian for the BC Real Estate Association declared the current buyer’s market all but dead. And in Toronto, the local real estate board said record property prices “are justified” by the “positive affordability picture.” Sure. That reminds of a famous British tab headline about the Princess of Wales: “Diana was still alive hours before she died.” Really?

Of course, there are people who believe this stuff. And why wouldn’t they? Advertiser-fed media like Global, CTV, the Toronto Star and the Vancouver Sun upchuck every positive release they’re given, while the banks continue to lend out mortgage money at half the price of two years ago. And if you don’t have a down payment, hell, they’ll give you one.

So, there have been some bursts of buying, notably in Calgary and the more delusional edges of the GTA. A few Toronto builders have shown genius in whipping property virgins into a frenzy, then selling out new developments to buyers who barely see the product and don’t even lawyer their offers. Hard to see how that will work out well.

Meanwhile in Cowtown, a classic battle shaping up between buyers and floggers. The numbers are dismal (and portend the GTA’s future): Sales last month crashed 32% from 2009. The average detached house, at $445,617, down $8,500. Over 700 new, unsold, unloved and unoccupied condos, compared with just over 200 at this time last year. Monthly sales plunges for condos over past months ranging from 20% to 43%, and average unit prices off a massive $52,000 since the peak last May. Oh yeah, and desperate developers giving away parking spots, upgrades, home entertainment systems and vacations.

Says the local real estate board prez, Diane Scott, this is a “measured correction.” Hey, let’s keep things in perspective – it only sounds like a mid-air collision. As I noted above, there are always greater fools ready to believe the spin and drink the Kool-Aid – which is behind a reported micro-burst of sales activity in recent days.

Calgary realtor Crystal Tost, meanwhile, has an important piece of news. “So when is the right time to buy?” her perky blog asks.  “Well, I think that time is now!” And why is that, Crystal? “The real estate market in Calgary may just be starting to turn around. Yes we very well may have already seen the bottom come and start to fade away, but don’t let it fall out of site. There are many buyers sitting on the fence waiting for the opportune time to jump into the market. A word of caution though, typically when the “word” gets out that now just might be the “right time” to buy, I can say without a doubt we will already be inching up to an even marketplace or a marketplace that will favor sellers… Then suddenly things start to shift and we find ourselves competing over the house that no one seemed to want just a few weeks or a couple of months ago.”

So typical. It’s not ‘buy now because there’s lots of inventory, borrowing costs are still low and vendors are really motivated’ (all valid reasons), bur rather, ‘buy now because if you don’t you’ll be priced out.’ The realtor’s motivation: fear.

This is one reason the market’s destined for trouble. There’s more to worry about in the world than a bidding war. Debt. Jobs. Retirement. Recession. Losses. It’s why a correction will be followed by a melt.

But it’s not Crystal’s fault. Can’t help it. Realtor DNA runs deep.

And November will not be pretty.

190 comments ↓

#1 Tom on 09.26.10 at 5:37 pm

800k for a 2 bedroom box in the Sky in Vancouver’s west side (maintenance fees over $500 a month!):

http://www.realtor.ca/propertyDetails.aspx?propertyId=9965682&PidKey=-1188089836

Who in their right mind would pay that? You could rent a place for over 3K a month and still pay less.

#2 Dean on 09.26.10 at 5:38 pm

You can’t spot trends or make statements based on a month or two of data. So we’re going to constantly hear cherry picked stats that support the realtor agenda from the realtor crowd. Even the year over year stats you like to use are dubious (is this year abnormally low or was last year abnormally high?).

It’s the long term trends that matter, and house prices are historically out of whack with incomes and debt is historically high. So, unless “it’s different this time” and it rarely, if ever is, things will stagger their way back to where they should be. And no amount of Goverment manipulating, gold hoarding, or tinfoil hat wearing is going to have any long term impact on this.

An interesting thing I’ve noticed is that Garth seems to be generating a lot more interest in his message, and the number of comments on this blog is dramatically higher than it was a couple years ago. Methinks that the message will soon no longer be contrarian.

#3 Patz on 09.26.10 at 5:45 pm

Vancouver’s looking a little shaky these days. Agent Will publishes weekly stats for sales in the Greater Van region. They’re weak but not collapsing—yet. However, they are down a substantial 50% from 2009. 2010’s trend line is, for now, above but close to 2008’s dismal performance. I think it will break below in the next few months, Nov. at the latest. Look at his graph for Weekly Unit Sales it should be disturbing to anyone thinking the bottom’s near when it hasn’t yet even stepped off the cliff.
Will incidentally, seems like a cut to two above the average realtor. He’s at: http://agentwill.com/weekly-stats/

As for Crystal Tost, (one longs to write Toast but that is such a cheap shot), well she seems sincere but my oh my. To me it’s symptomatic of the faux professionalism of so many realtors that they don’t at the least have someone proof-read their site (or is that sight?). Doesn’t she at least have a friend who passed Eng. 12?

#4 Patz on 09.26.10 at 5:55 pm

In my first paragraph previous post, I meant to say “I think it will break below in the next few weeks, Nov. at the latest…”

It really is different in Vancouver; we are more delusional than anywhere else!

#5 Voinz on 09.26.10 at 6:04 pm

Garth, the wife and I are looking forward to hearing you speak in T.O on November 9th. You’re going to have one helluva time with that crowd. It’s going to be tough trying to explain a correction in real estate prices is imminent in the GTA anytime soon, especially when you still have the craziness in upper Bloor West Village going on…. take a look:

http://www.yourhome.ca/homes/realestate/whattheygot/article/865240–what-they-got-sept-25

Upper Bloor West Village

Humbercrest Blvd. and St. John’s Rd.

Asking price: $499,900
Selling price: $625,000
Previous selling price: $379,000 (May 2006)

Sold for 125% of asking… not to mention for $125K over asking with 14 offers..

It makes me cringe knowing this is still on here in Toronto with no end in sight.

Any reason why this is still going on?

#6 Pixma on 09.26.10 at 6:13 pm

#3 & #4 Patz
“I meant to say”

Perhaps you should proofread…..LOL

#7 Grandpa Grinch on 09.26.10 at 6:16 pm

You’re speaking about RE to a crowd in T.O.? Better bring crayons & puppets.

#8 junius on 09.26.10 at 6:21 pm

Garth,

You said, “this blog lost its focus over the last two days. Actually, it sucked. Credit for that goes to the gold pumpers and tinfoiled conspiracy theorist whackjobs who support them.”

Amen.

#9 VancouverGoinUP on 09.26.10 at 6:21 pm

Tom
800k for a 2 bedroom box in the Sky in Vancouver’s west side (maintenance fees over $500 a month!):
****
Lots of people are willing to pay this price. Just drove down the Golden Mile aka Point Grey Road. These homes go for in the millions. No big deal most of the homes in Vancouver’s west side cost over a million bucks. But here’s the deal, these multi million dollar homes are being bulldozed and then a concrete mega home goes up. Recession LOL not on your life. There’s no fear here, only sound investment knowledge

#10 Perplexed on 09.26.10 at 6:22 pm

#5 Voinz

You’ll note the photo has snow on the ground…the ‘what they got’ -type articles never mention when the sale actually occurred. Curious, no?

#11 Timing is Everything on 09.26.10 at 6:24 pm

“‘buy now because if you don’t you’ll be priced out.’ The realtor’s motivation: fear.”

Unfortunately, it works. Fear is not a good motivator in the long term….But it works great for short term compliance. That is all the realtor (or any commissioned salesperson) requires. Brand loyality is not the goal here…The goal is the (one-time) sale….by any means necessary.
We aren’t talking beer brand loyality. This is big buck, commission motivation.

#12 Ant-626 on 09.26.10 at 6:34 pm

Hey Garth, why don’t you start your upcoming speech in Toronto with Michael Douglas’ Gordon Gekko words? Just correct a couple of things, like country name and so. I could not stand but to cite them here:
“You’re all pretty much f*cked. You don’t know it yet, but you’re the Ninja generation. No income, no job, no assets. You’ve got a lot to look forward to. Someone reminded me the other evening that I once said greed is good. Now it seems it’s legal. But folks it is greed that makes my bartender buy three houses he can’t afford with no money down, and it’s greed that makes your parents refinance their $200,000 house for two fifty. They take that extra fifty and they go down to the mall. They buy a plasma TV, cell phones, computers, an SUV, and hey, why not a second home? I mean we all know the prices of houses in America always go up, right? And it’s greed that makes the government in this country cut the interest rates to 1 percent after 9/11 so we can all go shopping again.”
PS. “Wall Street: Money Never Sleeps” movie would have been much better had it different ending, like in the real world. Just a reminder, GS (in movie CS) settled with SEC for just $550 billions – a small fraction of what they’ve made betting against their clients.

#13 Jimmy on 09.26.10 at 6:38 pm

GOLD! I hear ya Garth! If society fails gold will be about as useful as any other soft shiney metal. My ‘rainy day fund’ is augmented with a good supply of lead for that contingency. It’s rather useful and cheap.

Gold bugs gotta get a grip!

#14 Confused on 09.26.10 at 6:42 pm

Great post as usual – that is the world’s dumbest headline. I live in Calgary, and hope this ‘correction’ is short lived and a return to affordable houses is soon to follow.

#15 Pixma on 09.26.10 at 6:42 pm

Garth said(quoting Aug statistics): “The average detached house, at $445,617, down $8,500.”

Those stats are almost a month old. The average price in Calgary is up $16,000(+3.6%) this month. http://www.creb.com

So let’s use your criteria from last month. You said one month ago “the average home price fell $14,500 in a month. That’s 3.1%, or about 30% on an annualized basis.” http://www.greaterfool.ca/2010/08/30/zombies/comment-page-1/#comment-95506

What will an increase of 3.6% amount to on an annualized basis? About +40%.

How about being consistent and using the same criteria to compare every month?

Gee, a whole month old? — Garth

#16 sk76driver on 09.26.10 at 6:43 pm

I watched Micheal Douglas’ new movie “Wall Street – Money Never Sleeps” yesterday.

In the movie Mr Gekko (Douglas) gives a speech about the looming market trouble. The movie is set in 2008 just before the trouble started. he starts the speech like this:

“I am here to tell you….you are all F#*KED!! You are the soon to be NINJA society.

No Income No Job or Assets”

But what got my attention is the rest of what he was saying….well….it sounded like Garth up on stage!!!

Garth, I think Oliver Stone got half his script from YOUR playbook!!! I kept shaking my head, pointing to the screen and telling my wife: “SOB….that’s what Garth says!!!”

I smell plagiarism Garth….get the lawyers rounded up and send out the posse!!!!

#17 Cameroni on 09.26.10 at 7:03 pm

Voinz wrote:

“Any reason why this is still going on”?
——————————————————-

Well Voinz, and this is a crazy theory mind you, so I have my “tin-foil hat on” but….

Say I had a house up for sale for 500k. I can’t sell it for what I want but I can convince my best friend or an in-law to buy it for 75k over asking. After the sale is compete I return the excess money to them which they borrowed at 4.5% and they in turn invest it at 6%.

Now they own my house but of course this is but a sham. A couple months later they re-list at 20k above what they paid on my behalf, sell (hopefully) and take a theoretical haircut of 90k which makes the buyer look like a genius and now I have just sold my house for what I wanted plus buddy made a few bucks in the exchange. (Because I paid him off of course).

Crazy right? Well hold on there.

Imagine for a second that I am actually a developer of a 200 unit project that is in real trouble and I stand to go bankrupt if prices fall too much. I want and need to pump up interest and sales in one of my projects. So I arrange shell-game purchases to prove value and keep the average prices in the range that I need to make a buck, stay solvent and keep buyers bidding in the “correct” price range.

The project sells out and “shell” purchases are put back on the market quickly which negates the risk that my friends might actually get stuck holding the bag.

Maybe not so crazy after all, eh? There is a lot of money on the line. Do you doubt house price manipulation is alive and well at this time?

“Tin Foil Off”

#18 Bill ( Peterborough) on 09.26.10 at 7:03 pm

#5 Voinz

Upper Bloor West Village

Humbercrest Blvd. and St. John’s Rd.

Asking price: $499,900
Selling price: $625,000
Previous selling price: $379,000 (May 2006)

Sold for 125% of asking… not to mention for $125K over asking with 14 offers..

It makes me cringe knowing this is still on here in Toronto with no end in sight.

Any reason why this is still going on?
*******************************************

People are Insane. If memory serves me correct the area is not that great of a location. Older homes, Loblaws up the street on Dundas, by Scarlet. Humber river not far away. Not far from lower income apartments as well. CP rail tracks 1/4 mile away.

Pretty soon we will be paying $5.00 for coffee. Oh people already are. See what I mean.

Bidding wars only help the seller not the buyers. Too much emotion generated.

Believe me in a couple years those people would have wished they never bought, even if they can afford it.

A nice pocket I always liked in Etobicoke for the stable working middle class is South of Bloor between Royal York and Prince Edward. Smaller homes, mature tree lined lots , good schools, subway, nice stores/pubs… on Bloor and alot of retired people.( can see alot coming up for sale there in future) Thats where I would look in a few years if I went back to Etobicke.

#19 Cameroni on 09.26.10 at 7:26 pm

#12 Ant-626 said:

“Hey Garth, why don’t you start your upcoming speech in Toronto with Michael Douglas’ Gordon Gekko words”?
—————————————————————-

That is too funny! Are those words you wrote actually in the new movie? I will put “Wall Street” on my list to see this week. Unbelievable. (I loved the first flick).

#20 Devore on 09.26.10 at 7:28 pm

#2 Dean

You can’t spot trends or make statements based on a month or two of data. So we’re going to constantly hear cherry picked stats that support the realtor agenda from the realtor crowd. Even the year over year stats you like to use are dubious (is this year abnormally low or was last year abnormally high?).

Even if last year was abnormally high, and this year is abnormally low, the sales drops this year are happening earlier, and are much steeper.

But that’s not even the point. What’s “abnormal”? It’s not like families roll the dice to decide whether they will buy this year or not. If last year was abnormally high, and this year is abnormally low, that’s no coincidence, there is a reason for that, this is not voodoo.

So if a real estate critter tells you this year is “abnormally low”, ask them why that is so, and why next year will be better.

#21 squidly77 on 09.26.10 at 7:31 pm

Sold for 125% of asking… not to mention for $125K over asking with 14 offers..

Houses have been bought then re-sold for many thousands more the very next day in Calgary.

Think Bernie Madoff.

#22 junius on 09.26.10 at 7:32 pm

#9 Vancouvergoinup,

You said,”There’s no fear here, only sound investment knowledge.”

As many have said before we are at denial stage. If you want to see what that looks like just find a mirror.

#23 thecomingdepression on 09.26.10 at 7:35 pm

I actually stopped coming to this site for the past few weeks as Garth continued to state GOLD is in a bubble. Garth you should do your homework before you make a fool out of yourself. Here is a chart of all the “bubble” of bubbles below.
A depression coming? Absolutely. Almost a given, unless we devalue all currencies at once. If not, Gold will continue to rise and that will GUARANTEE a depression. Check this bubble graph:
http://4.bp.blogspot.com/_3-h7k_OIJk0/TJvfKcRZINI/AAAAAAAADLU/XwowsFPplx0/s1600/Gold+Bubble.jpg

Please don’t let us stop you from not coming! — Garth

#24 Herb on 09.26.10 at 7:50 pm

Got dragged to an open house in Ottawa this afternoon (this pre-boomer may not be able to handle stairs in a couple of years). Very nice main floor condo, two bedrooms, two baths, parking, beautifully landscaped grounds, good neighbourhood, quiet area, price $290K.

Lots of activity at the open house: me, my wife, and I.

#25 Frank from Calgary on 09.26.10 at 7:52 pm

Nice blog Garth.

One of the biggest estate builders here in SE Calgary has just anounced $50 000 in building credits for the first five people to sign on the dotted line. Does that sound like a bottoming out, in fact that same builder constructed a $899 000 dollar home for a client that forfitted his deposist and ran. Now the price is $799 000, but would go for $749 000 according to the builder.

Some recoevery

#26 PEDANTIC SYCOPHANT PANDERER on 09.26.10 at 7:54 pm

Patz #3

My oh my Patz. Your point about the lack of proof-reading on Ms. Tost’s website is totally lost. The very post in which you slag her, (#3) contains a grammatical error: “Will incidentally, seems like a cut to two above the average realtor.”
Some of your posts made you appear to be quite an intelligent and informed person. Perhaps you two could get together and split on the cost of a proof-reader.

Riders Rule!

#27 Nostradamus Le Mad Vlad on 09.26.10 at 7:55 pm


“Measured correction”. Compared to what? The Hindenburg landing safely? Methinx nein.

However, it is good that sheeple who are presently sitting on the sidelines are (at last) becoming a lot more aware of what is actually happening.

In keeping with the spirit of nothing at all, ‘owzabout re-arranging the letters in Crystal Tost’s name to come up with Prekocious Toast?

The moniker could be used as a back-up in case the first one breaks down! BTW, The Inquisitor reminds me of The Spanish Inquisition, except Monty Python consists of five real, living people and one slightly dead one. The Inquisitor doesn’t, which is why it’s Tabloid Trash!
*
1:43 clip Police state? 60 days in the slammer for letting the grass grow too long.

Credit Meltdown and the SBS (Shadow Banking System).

Top 25 censored stories of 2008-09.

Here are the first five: #1: US Congress Sells Out to Wall Street; #2: US Schools are More Segregated Today than in the 1950s; #3: Toxic Waste Behind Somali Pirates; #4: Nuclear Waste Pools in North Carolina; #5: Europe Blocks US Toxic Products.

“US Congress selling out to Wall St (aka the international PRIVATE Banksters) should be the #1 story every year.” wrh.com.

I volunteer to take some to help relieve the burden! “Rising precious metal prices tell us that there is a lot of inflation in the pipeline, but they are not alone in giving us this message.”

19 Facts re: the de-industrialization of America (and Canada). It also includes the reason(s) for lost jobs.

When does the controlled and paid-for m$m run this?

Weren’t similar tactics used pre-WW2? Snooping, spying and rewarding snitches?

Screwed up principles? Depends on the govt. of the day.

#28 squidly77 on 09.26.10 at 7:57 pm

To add to my post.

Buying a house at 125% of asking is fine, just so long as the bank forwards the money to the seller.

The buyer may then rent the house out for $2,000 month and never make a mortgage payment and get foreclosed on, or he may re-sell it to a straw-buyer for even more money.

So long as the bank keeps forwarding the selling amount to the previous owner-this can be rinsed and repeated at will.

The buyer and seller could be two friends, husband and wife, brothers or other family members-Defrauding the bank seems to be child’s play.

Who’s the idiot.

#29 ExExpat on 09.26.10 at 8:02 pm

#17 Cameroni

The false appraisal shell game scheme you describe is a crime, but difficult to prosecute.

Check the link below, a similar scam in the US got the decidedly unsophisticated perpetrators 70 months in an ass-pounding federal institution.

http://anchorage.fbi.gov/dojpressrel/pressrel09/ak082409.htm

#30 Devore on 09.26.10 at 8:11 pm

#16 sk76driver

I smell plagiarism Garth….get the lawyers rounded up and send out the posse!!!!

Can’t copyright common sense.

#31 andrewS on 09.26.10 at 8:16 pm

The house in TO:

7 days on market, 14 offers, 125% of asking, and close to double 2006 price. Sounds like last February.

I didn’t notice the snow when I first saw that yesterday. Nothing to see here, folks. Move along now.

#32 Cow Man on 09.26.10 at 8:17 pm

Amigos: Much to my surprise and against all lodgic a flurry of sales have occurred this week in Owen Sound. After a totally dead summer, a number of houses and rural properties sold this week. Truly amazing!

#33 Aussie Roy on 09.26.10 at 8:20 pm

Garth I find it funny that when some of us who say RE is overpriced and has a long way to fall we are said to be fear mongers but when RE spruikers say jump in now or be priced out forever they are just providing sound advise.

Aussie Update
http://smh.domain.com.au/real-estate-news/bumper-listings-producing-a-buyers-market-20100926-15sfe.html

http://www.news.com.au/money/money-matters/savings-squeezed-by-debt-rate-hikes/story-e6frfmd9-1225929563529?area=money

http://www.couriermail.com.au/property/law-threat-to-agents-boasts-about-buying-off-the-plan/story-e6frequ6-1225929288775

http://www.smh.com.au/business/betting-on-the-house-20090513-b3cs.html

http://www.theage.com.au/business/treasury-brief-reveals-household-debt-concern-20100924-15qnn.html

http://www.abc.net.au/news/stories/2010/09/24/3021480.htm?section=justin

Even the the TAX dept is going to look at all housing sales for the last 10 years to catch out tax cheats
http://www.smartcompany.com.au/tax/20100923-ato-to-scrutinise-every-property-sale-in-the-last-decade-car-sales-in-the-last-year.html

#34 squidly77 on 09.26.10 at 8:20 pm

This scenario requires an unethical team comprised of an agent, a knowing straw buyer, loan officer, and appraiser to attack an unknowing seller.

The seller is made an above-market offer which is accepted. The difference between the market value of the property and the price agreed to is the bounty that the seller, buyer agent, buyer, loan officer and appraiser split.

The lynchpins in the deal are the knowing straw buyer and the appraiser. The straw buyer must have credit good enough to not look suspicious purchasing — or even applying for a mortgage on — a house of that value.

Straw Scams Hurt Regular Folks: The Bubble

Sounds like a win for all parties, right? Everyone in the deal gets paid and the only loser is the investor in the secondary market who bought the mortgage the straw scammer took on, and even they knew the risk in buying mortgage-backed securities.

Unfortunately, the market comparables are now skewed because of a house that sold ostensibly for a much greater amount than the market would usually bear. Market values for houses rise artificially because preceding houses sold for so much. And as people in the neighborhood refinance, they do so against inflated property values, often cashing-out this artificially built equity. “They Want to Offer Me W-a-a-a-y Over Asking Price!”

There has been hundreds of millions of dollars of these kinds of criminal transactions in Calgary. The Bank of Montreal is suing hundreds of people in Alberta, including lawyers, mortgage brokers

Sorry for being off topic and sorry again for the too long post.

#35 RichardO on 09.26.10 at 8:22 pm

I prefer “Housepocalypse Now” over “HouseAgeddon” but what do I know…

#36 mrmike on 09.26.10 at 8:24 pm

You keep ranting about retirement and out living your money.
Us 20-30 somethings know that :
A- we can not trust cpp nor rrsp for retirement plans.
They will punish the savers to serve the non savers, its always the way…and really the only option to make things work in the “soon to be” reality!
If you have wealth, they’ll take it, or tax you very heavy on it. just to deal with the 70% plus that don’t.
Or:
B- the world blows up and we all die in 2012.

(c) You make stupid excuses for not trying. — Garth

#37 Joel Brico on 09.26.10 at 8:30 pm

re: Gold nuts

You asked for it. Teasing the gold bugs.

Less than 1% of the investment community out there owns any gold. 1/10 of 1% of the sheeple own it. Most of the gold nuts who post here don’t have any either.

I would rather read about the other 99% of investments out there and leave gold speculating to the pros. Leave gold out of the blog.

My take is that Garth is trying to help out the poor sheeple and is advising not to buy gold at the top and go all in with leverage. Just like the real estate market and oil. Anyone buy oil at $146.00 a barrel? Any different than gold? A classic buying frenzy in gold is up on us with a long way to go. Like 1980, the sheeple will buy the most gold at the exact top and ride it all the way to the bottom.

I am looking forward to the wild swings in the gold price. Making a little every day along the way and avoid the greed and leverage demons.

It’s also tough to wish for real estate blood bath here in Canada. I am set to speculate and re-own when the time arrives and welcome lower – carpet bagger prices. (live the “Garth” way in most ways – except my gold opinion) But I feel crappy thinking that way. Just like the gold nuts – hoping for disaster.

#38 Taipan on 09.26.10 at 8:30 pm

Over 30 years of watching both financial markets and real estate markets two truisms seem to apply.

Best time to buy real estate or stocks.

When everybody thinks its a bad time to buy. (When in reality even all those in the industry are despairing and cant believe the market has fallen this far, and its going to keep falling.)

Then the opposite applies

Best time to sell real estate or stocks. When every person you speak to think it is a wonderful time to buy. Its a new paradigm. The market is only going to go higher for a whole bunch of reasons, when looked at from the point of view were really just sales slogans.

#39 TaxHaven on 09.26.10 at 8:50 pm

Garth, it might be time to review your advice to “sell real assets and buy financial ones”.

Could be bass-ackwards.

We face currency debasement worldwide, through competitive money-printing. Witness the Swiss, the BOJ and the USD, just for starters: the more they print, the less bang-for-the-buck they get. When all currencies are being devalued in unison, how will this be reflected in the real markets?

By devaluation of debt-encumbered or debt-dependent assets: consumer/retail, insurance/financial stocks; bonds, index ETFs and diversification through mutual funds, bank accounts, term deposits, car dealers, real estate, homebuilders. Although these are likely to retain NOMINAL ‘value’, and even pay out another 6 or 7% in that same constantly-debased currency, they won’t keep up with either price inflation or with lost investing opportunities in commodities and precious metals.

And by a rush to protect wealth. A rush into commodities, energy stocks, agriculture ETFs, miners and precious metals, diversified multinationals with international sales of real goods, some emerging markets.

The process of investing consists of constantly exchanging expensive assets which are in oversupply for scarcer assets likely to remain in demand. We all do this daily with stocks, real estate and bank accounts, moving up to more solid asset classes in more limited supply. We’re going to have to do this too with currencies if we are to maintain our standards of living and purchasing power.

Which is why a “gold bubble”, if there even is one (there isn’t), will be the last bubble, years away…

It’s fundamentally irrelevant to assets like residential real estate how much money is printed. The question is how much we earn and owe. — Garth

#40 dd on 09.26.10 at 8:51 pm

#2 Dean

…Methinks that the message will soon no longer be contrarian…

Garth is main stream.

#41 TheBigLebowski on 09.26.10 at 8:58 pm

When are people going to get it. The housing market isn’t the cause of our financial turmoil, its merely a symptom. The only way the west could ever fall from its perch as a first world civilization is to fall from within. That’s what we are seeing now is the slow demolition of the middle class in the west via free trade , globalization, offshoring and outsourcing. Taxes and minimum wage jobs will be the final killer along with people’s net worth being wiped out in real estate. We have lived a generation of fantasy with our debt base economies and now all that debt is coming home to roost. Commodities are not rising because of inflation, they are rising because of the loss of confidence in how governments are managing paper currencies. Since most people will not take financial advice unless given by a self appointed government expert or mainstream economist, then words only fall on deaf ears. At least learn how to garden if you own property and become more self sufficient. reduce debt and only buy what you need not what you want. Make things last and make do with what you have if possible. We are about to relive how life was through the 50’s and 60’s. The glory days of the past 20 years is gone and housing is only the first of many sign posts to come.

#42 TheBigLebowski on 09.26.10 at 9:05 pm

#37 Joel Brico
no worries, no disaster needed just re-adjust for inflation gives it a double from here. No wars , financial collapse or anything else has to occur and hope doesn’t occur. But yes I fear we are only in the eye of the storm right now and the trillion dollar bailouts have only bought us a little more time.

#43 Love this Blog on 09.26.10 at 9:19 pm

#23, will you screw off with the Gold?? Are you not able to take a hint?

#44 S.B. on 09.26.10 at 9:22 pm

500 attendees already! I did suggest the downtown Metro Toronto Convention Centre…easily accessable by all transit. I know the Doubletree hotel, not certain the area can handle another 500-1000 cars. The only access alternative is the sluggish #58 TTC bus.
Or how about the Congress Centre located across the road?

Our greatest fear is of the more feral blog dawgs rioting if denied entry! :mrgreen:

#45 Skeptic on 09.26.10 at 9:34 pm

Anecdotal observation from Vancouver: The “Paris Annex,” not yet built, has a sales office/fake suite/bullshit lifestyle display in the courtyard of the building in which I’m renting. Lots of people looking this weekend. Elevator discussion with realtor who apparently lives in my building: “We’ve never been busier,” she says.

So, Patz et al., when I read “Nov. at the latest” I think back to similar statements over the last few years. Things were supposed to fall apart in 2007, 2008, 2009. I see no particular signs of this yet.

As usual I have to include my standard disclaimer: I’m not a realtor, I’m a bear, my marriage ended in large part because I refused to buy at the peak, and so on, and so on.

It just doesn’t seem to be happening yet, folks, when a place that’s not yet existent, on Hastings steps from the worst block in Vancouver, maybe Canada, and asking $600-700 per square foot with suites ranging from 659 to 935 square feet, is not eliciting anything but guffaws.

#46 dd on 09.26.10 at 9:35 pm

#37 Joel Brico

…A classic buying frenzy in gold…

Like you said “leave it to the pros. Don’t comment on subjects you know little about.

#47 Timing is Everything on 09.26.10 at 9:37 pm

Garth said – “There’s more to worry about in the world than a bidding war. Debt. Jobs. Retirement. Recession. Losses. It’s why a correction will be followed by a melt.”

Yes, there is always something to worry about. But, of course, worry does obsolutely nothing to help. We (our family) are hunkering down on our two relatively self-suffcient acerage. Not because of societal collapse or government breakdown that some pine for, but just because we can…The timing is right for a rest…for us.

hunker down – to take shelter, literally or figuratively; to assume a defensive position to resist difficulties.

#48 junius on 09.26.10 at 9:38 pm

#41 Thebiglebowski,

You said, “When are people going to get it. The housing market isn’t the cause of our financial turmoil, its merely a symptom.”

Agreed 100%. The rest of your entry was good as well. Keep to these themes and you will have followers.

#49 Cameroni on 09.26.10 at 9:40 pm

#29 ExExpat said:

“To #17 Cameroni
The false appraisal shell game scheme you describe is a crime, but difficult to prosecute”.
———————————————————-

Thanks for the link ExExpat. You did realize that my thoughts were pure speculation on my part though didn’t you? Thus the reference to Tin-foil.

I just figured after reading today’s article that if we are going to keep having conspiracy theories here on this site they might just as well be about real estate!

So why not create one just for fun.

#50 EJ on 09.26.10 at 9:42 pm

#29 ExExpat on 09.26.10 at 8:02 pm

Also, these scams typically aren’t even on the radar of investigators during the upswing of a bubble. Another trademark of Ponzi economy. When things are going well, ask no questions. When everything collapses, start panicking and looking for directions to point the finger and claim “nobody saw this coming.”

#51 vapour trails on 09.26.10 at 9:48 pm

“Obsessing about it and jamming bullion down everyone’s throat, while cheering for the collapse of society and fictionalizing a world government which will control wealth…”

It’s not that they’re demented nutjobs. These are just people who were once normal but built a well diversified portfolio made up entirely of gold and gold stocks. It’s only natural that they’d want to share their [tunnel] vision of the future with everyone else.

#52 The Original Dave on 09.26.10 at 9:49 pm

there’s no more bidding wars in the GTA. Obviously, there’s still some dumb buyers – a lot less.

I feel like I have a good gauge on things. There’s a large group of people I know that are in around 30 years of age. None of them are talking about buying real estate. 6 months ago they were all talking about buying. Now, a few have mentioned that the market is looking different and one is looking to sell and break even from his 2nd home.

The people I speak of do not read The Globe And Mail. They do not pay close attention to the better news outlets and they do not pay attention to financial markets. These people represent the herd. It isn’t my job to educate them – they cannot be convinced no matter how hard I try. It is my job to listen to them and see where their emotions are. Right now it is shifting.

People like to comment on the war in Iraq and give opinions on what is going on without being on the battle ground. I feel, as far as real estate goes, I am on the battle ground. I’m exposed to a lot of average people, with average jobs, and average educations. I’m in the trenches. The mania is over in Toronto.

#53 T.O. Bubble Boy on 09.26.10 at 9:50 pm

Sellers in Toronto are now desparately trying to find the last of the greater fools… but the competing views on the market have caused the variance in pricing to go out of control!!!

On one hand, you have delusional sellers (or maybe their realtors?) who are setting prices ridiculously high, thinking that they can still snag a buyer to overpay… and then you have people who have paid attention to the recent market statistics and simply want to sell and get their cash out.

Here are 2 semi-detached houses 2 doors away from each other, same lot size, and pretty similar overall:
#1 is $559,000.
#2 is $710,000, $150k higher!!!

Gee, I wonder what will happen? #1 will sell quickly, and force #2 to lower the price.

Here’s another example:
Semi-detached near the Yonge/Eglinton subway (that recently sold after 2 price reductions down to $599k) — 2nd listing on this page, and
and then this one (with more renovations) comes on the market for $250k higher!

The HGTV house porn is working… at least on the sellers trying to grab $150k-$250k more than the neighbour down the street with a similar property.

Some of these houses will still be snatched up by brainwashed young couples, but many others will suffer the fate of my old favourite bubble property in Etobicoke:
http://www.homefinder.ca/listing/details/W1875761

This $1,050,000 McMansion (which – don’t get me wrong – looks incredibly nice) was built next to a bunch of $300k-$350k townhomes.

It has been on the market since January, slowly dropping from $1,249,000 on January 27th to a low point of $999,000 on May 9th then back to $1,090,000 May 22nd, then off the market, and re-priced back to $1,050,000 on Sept 14th… you can see all of the re-listings here.

#54 jess on 09.26.10 at 9:53 pm

http://www.gao.gov/products/GAO-10-948T
For-Profit Colleges: Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices
GAO-10-948T August 4, 2010
=============================
Veterans Failing Shows Hazards of For-Profit Schools in GI Bill
By Daniel Golden
http://www.bloomberg.com/…/veterans-failing-to-learn-show-hazards-of-for-profit-schools-under-gi-bill.html – Cached
http://noir.bloomberg.com/apps/news?pid=20601109&sid=aZ52AzD0BBio&pos=14
============

Pittsburgh-based Education Management Corp., was among the 15 schools investigated
http://www.pittsburghlive.com/x/pittsburghtrib/business/s_694925.html

wiki entry:

Education Management Corporation (NASDAQ: EDMC) is a leading private operator of post-secondary educational institutions, primarily in the United States. The company’s institutions provide primarily career-focused educational programs.

The company is based in Pittsburgh, Pennsylvania and employs approximately 20,212 faculty and staff and had enrollment of approximately 136,000 students as of its fall 2009 semester. EDMC was founded in 1962.

On September 21, 2009, EDMC commenced an initial public offering of 20,000,000 shares of its common stock. The shares trade on The NASDAQ Global Market under the ticker symbol “EDMC”. [1]

This move to become a public company
ONCE AGAIN followed a June 1, 2006 transaction, in which a consortium of private equity investors acquired Education Management in a transaction valued at approximately $3.4 billion. The principal investors in Education Management are Providence Equity Partners, Goldman Sachs Capital Partners and Leeds Equity Partners. The leveraged buyout of EDMC was the largest buyout in the for-profit education sector to that point.[2]

#55 Joe Q. on 09.26.10 at 9:53 pm

#5 Voinz on 09.26.10 at 6:04 pm (and others commenting on his post) re: why is this still going on…

Don’t be deceived by the “What They Got” or “Done Deals” listings in the major papers. There is absolutely no guarantee they are current, and they are always cherry-picked by realtors — they are marketing tools, after all.

In the case of the house featured in the Star, I did a quick guava.ca search for houses on Humbercrest and found only one where the asking price was $499,900. Sure enough, it was at Humbercrest and St John’s Road.

The listing date? November 19th 2009. It’s a 10-month-old listing. Have a look for yourself (http://guava.ca/?p=2090)

Toronto was at record-low months-of-inventory since then. A lot has changed in the meantime. Bidding wars like that are pretty rare these days.

#56 Mikey on 09.26.10 at 9:58 pm

All I have to say is wait until the September numbers come out. Sales in Toronto over the first two weeks of September were 2500. We should expect between 5,000-5,500 in total for September. Sales in September 2009 were 8196 in Toronto. Expect a 25-35% drop in sales year over year this month.

Prices for homes in Toronto in September 2009 were $406,877. Prices in Toronto in August 2010 were $411,012. Expect prices to be DOWN year over year this month which is remarkable considering prices were up over 20% year over year earlier this year.

It’s going to get scary around here very quickly!

#57 mrmike on 09.26.10 at 9:59 pm

(c) You make stupid excuses for not trying. — Garth

Advocating to place money into a system that is no doubt bound to fail?
No thanks.

#58 Prof. ANON on 09.26.10 at 10:00 pm

On a lighter note…Brad Lamb is now a bit of an internet star (in a not so good way).

http://www.i-am-bored.com/bored_link.cfm?link_id=53042

Also, I would like to thank Garth for taking a stand against posts that are boarderline (?) paranoid commie hunting bigotry. I’m sure I’d be one of the first folks blacklisted should these folks gain enough power to start hunting witches.

#59 ulsterman on 09.26.10 at 10:08 pm

800k for a 2 bedroom box in the Sky in Vancouver’s west side (maintenance fees over $500 a month!):

http://www.realtor.ca/propertyDetails.aspx?propertyId=9965682&PidKey=-1188089836

Who in their right mind would pay that? You could rent a place for over 3K a month and still pay less

Yes Tom, this is insanity. In 2007 when this tower was being built i lived in a heritage building directly across the street at 1455 w 14th. Our 2 bd ground floor rental was $1100. Without a dowpayment + maintenance + taxes this swanky place probably costs $4800 to own.

#60 JM in London on 09.26.10 at 10:10 pm

#5 Voinz

I’m originally from actual Bloor West Village (Bloor & Runnymede) where bidding wars have been the norm for at least the last five years. Agents in the area are some of the most skilled in the GTA at creating those bidding war conditions. About three years ago I noticed agents starting to call neighborhoods bordering Bloor West things like “upper” to try and capitalize on the trend. I’m willing to bet anyone putting an offer in got a “tutorial” with a long list of properties selling well over asking before any offer was written. Fact is the neighborhood that house is in was/is still somewhat rundown.

#61 Jsan on 09.26.10 at 10:10 pm

I think allot of people are losing sight of the fact that not only has ultra cheap interest rates artificially pumped up real estate, many people are forgetting that artificially cheap interest rates are also pumping up the economy. When rates are this low, companies, municipalities etc. take advantage of those low rates and build and buy anticipating that it will get more expensive down the road as rates inevitably climb higher. What this does is further pull future jobs into the present. When you add the 100 Billion dollars worth of stimulus to this pile you are really artificially inflating what would otherwise be a weak economy but eventually setting us up for a painfully weak future economy.

I heard last week an economist talk about all of the infrastructure spending that is going on here around Alberta and there is a TON of it. He said that if you take the infrastructure jobs away, Alberta’s unemployment rate would be 10.5%. The crazy part is, when you drive around here in Edmonton, there are commercial “For Lease” signs EVERYWHERE, I mean EVERYWHERE. on every street you can count block after block with “For Lease” signs in front of the business malls yet new commercial business buildings are popping up everywhere. The only explanation for this is we have a bunch of people jumping on the cheap interest rates believing that the the good times will once again return. This gives even more fuel to my belief that after all of this latest debt binge low interest rate fueled spending, there is going to be a virtual black whole of construction glut both commercial and infrastructure and an economy reflecting this.

#62 Jsan on 09.26.10 at 10:18 pm

I don’t buy the whole currency debasement argument that the gold bugs and others give. Do they actually think that China and the rest of the world will sit back and allow the US to debase their currency vs their own? No Bloody way!!!! China recently said that if their currency were to go up 20% vs the US dollar it would be catastrophic to their economy. If the US debases their currency than every one else will debase their currencies. What does that equal? Nothing, we will be back at square one where the currencies are all at about the same worth compared to each other. It’s all relevant.

#63 Dan in Victoria on 09.26.10 at 10:26 pm

Mortgage “Terms” for dummies.
Good for a chuckle.
http://www.theprovince.com/Guest+column+Mortgage+terms+explained+regular+folks/3566462/story.html

#64 S on 09.26.10 at 10:26 pm

I don’t post here often, and certainly not about gold, but some of the info on the subject I found here has proven useful and I made a few bucks. As far as I am concerned the yellow stuff is just another thing to to invest into. Here is my question: what would be an ideal post on this blog? Because if we all start placing comments on how much a neighbour or a relative overpaid for a house lately or placing links to overly optimistic listings on http://www.realtor.ca this will get old very quickly. I don’t know Garth, some of the comments and links posted here by the “gold bugs” were alright and most have some entertainment value. Please let them be.

#65 VancouverGoinUP on 09.26.10 at 10:29 pm

Poorest postal code in Canada bar none is Hastings and Main and yet AND YET my friends
****
It just doesn’t seem to be happening yet, folks, when a place that’s not yet existent, on Hastings steps from the worst block in Vancouver, maybe Canada, and asking $600-700 per square foot with suites ranging from 659 to 935 square feet
****
700 bucks a square foot in the worst part of town!!! Meltdown LOL were off to the races folks, sure there will be some dips along the way but long term trend is intact.

#66 Jake on 09.26.10 at 10:36 pm

#15 Calgary Pixma guy,
Totally agree with what you’re saying about the inconsistent swings in average prices in Calgary. I try to stick with the median price because it tends to avoid the extreme swings. Bob Truman is a proponent of using the median price as the best indicator for pricing trends. I follow his stats here:

http://www.bobtruman.com/SFH_DailyMonthly_Summaries/page_1869385.html

The median price has definitely been trending downward consistently for the past few months. I could easily see prices continue down that path for at least another year. I really do think Calgary has a lot going for it, but there are just too many factors pointing toward a further decrease in prices.

ps. I think there are some other realtors in Calgary that provide stats. Some of the bloggers here could probably provide links.

#67 ulsterman on 09.26.10 at 10:37 pm

Skeptic, sorry to hear your marriage ended largely due to real estate clashes.

I agree with your sentiments. I hate when the bear blogs go nuts calling the buyers/bulls “idiots” or “morons” etc. the second we see a dip in the market. I think the readers of this and other bear blogs forget that 99% of Canadians do not read this stuff, so why the hell shouldn’t they be gung-ho on the future of real estate. It’s been good for the best part of 25 years, with only a few short-term dips that have been more than compensated for by years of mega returns. It’s certainly been that way here in Vancouver. So, on the whole, it’s the bulls who have been smart. Maybe many will lose their shirts. Then again, maybe they won’t.

This market’s potential to hold up or decline modestly scares the crap out of me.

#68 Jake on 09.26.10 at 10:47 pm

Oh yeah people,
Lay off Crystal Tost for the spelling error. It’s easy for something like site vs sight to get passed spell check. We’ve all been there before. Hell, I read medical textbooks written by people with 15 years of education that contain worse mistakes. Even our beloved Garth, with all of his writing experience, screws up a word here and there. There are plenty of people with valid points to make who should not feel intimidated posting here because of the grammar/spelling police. LOL, you spelling police are just as annoying as the gold bugs….ok that was a gross exaggeration.

#69 nonplused on 09.26.10 at 10:50 pm

Oh come on! Even Alan Grenspan is on record for:

a) Stating in a 1968 paper that in an inflationary environment gold is a better wealth preserver than paper money, and

b) stating that he thought the success of modern banking was in their ability to simulate the successful parts of a gold standard, and

c) recently affirming that gold is a financial asset.

So maybe it’s not money (i.e. a store of wealth) or a currency (i.e. the current medium of exchange), but it’s never been worthless and it’s not a bad hedge against certain things. So i think Garth’s standard advice of 5-10% of a portfolio is not bad advice. Beyond that I don’t see what the hub-bub is about. Trading in gold is no different than trading in copper or oil or wheat or houses, except that it is easier to store than most commodities.

I agree that we will live and die trading paper, or moreso electronic currency. So what? A litttle gold is ok, just don’t gamble with it. It’s not currently used as currency, we use paper and electronic dollars for that and will as long as that is how we pay taxes. It’s not money, they only coin with zinc, copper and nickle now so those are your monetary commodities.

But if it ever goes back to $20 an ounce I will buy all of it I can. Even at $200 I am a huge buyer. They can’t bring it out of the ground for that and much of the world still likes gold jewlery. At $1300 an ounce I am not sure what to do. I’m not going to short it, but I wouldn’t back up the truck and buy either. It’s a game for the big boys now.

As for whether gold is a subject for discussion on this blog, I think we crossed that bridge when the blog morphed from being about real estate to being about the larger themes from “Money Road”, which includes a recommendation to own a bit of gold but don’t be crazy. That was Garth’s work, not the gold bugs.

Back to real estate, I seem to notice that there are very few new listings in Calgary over the last few weeks. Seller’s strike? Are they withholding properties, as per one of the steps in Garth’s forecast?

#70 Timing is Everything on 09.26.10 at 11:17 pm

#41 TheBigLebowski said – “When are people going to get it.”…..”The glory days of the past 20 years is gone and housing is only the first of many sign posts to come.”

Get what? We all live and die. It’s not different ANYWHERE on this planet….Agreed, the more self-sufficient one (one’s family) is, the better. Today and the future is all there is. If it gets bad, so be it…

http://www.youtube.com/watch?v=1loyjm4SOa0

#71 timbo on 09.26.10 at 11:21 pm

when the shoe-shine boy is recommending gold it’s time to get out……..

http://fofoa.blogspot.com/

what is your take Garth on the Fed’s QE’2 attempt coming up? Printing that much money to try to beat back deflation cannot be good for Canada and our exports when their dollar drops?

#72 dec3ptiKon on 09.26.10 at 11:55 pm

Just thought I would mention something about mls listings. Why in the hell does nobody seem to know just how big (or small in most cases) their dwelling is? Every listing is “approx 500-699 sf” or similar. So, you mean to tell me that I have to get out the tape measure in order to find out exactly what I’m paying my life savings for? Do your job you lazy real estate scumbags!

I would give my left testicle if ANY of the listings turned out anywhere near the higher of the approximate size as listed.

#73 Mel on 09.26.10 at 11:59 pm

Meanwhile, in Australia there is widespread debate about whether they are experiencing a housing bubble or house price growth based on sound fundamentals. Same story, different bubble?

http://www.unconventionaleconomist.com/2010/09/australian-housing-bubble-in-search-of.html

#74 citizenman on 09.27.10 at 12:01 am

You’re going to Wolfville? I know the name sounds great but what about Regina? I look forward to whenever that gets organized. And if you are going to places with great names, remember Regina rhymes with cool words like….

angina!

#75 Nostradamus Le Mad Vlad on 09.27.10 at 12:07 am


#300 Dan in Victoria on 09.26.10 at 7:53 pm — “Hell I never fit in period come to think of it.”

Hi Dan. Neither did I. Kinda nice to be one of society’s rejects! Reminds me of the film Dead Poets Society — still a great movie — WhackNutz!

Good article in The Okanagan Sunday today by Neils Veldhuis and Charles Lamman, who are economists with the Fraser Institute and co-authors of “Did Government Stimulus Fuel Economic Growth in Canada?”

The headline says it better: “Ottawa’s new mantra: Spend, spend, spend” — Subhead: “All three major federal parties are clamouring for more spending, and despite what the Conservative Party says, budget documents indicate that recent stimulus spending will become the govt.’s new baseline for budgeting purposes. This means Cdns. can expect $105 bln. in deficits over the next five years”.

Which leads to — Vive le Deficit and Debt! The CPC continues its wanton destruction of Canada.

4:23 clip Germany wants the Deutschmark back and dump the Euro.

China — Superpower hoax or brainwashing?

Currency – Trade Wars To be added into the WW3 mix.

Interesting, because not too long ago, Japan distanced itself from DC and cozied up to China.

Now DC is trying to cozy back up to Japan. “. . . the US has openly decided to side with Japan in all matters including letting the Japanese openly manipulate their currency so they can dominate our domestic auto markets!”

No shortage of food shortages. Plus 72 Days of Consumption. Don’t know if this is true or not, but there is an old European saying (Spanish?) which says “Only seven meals separate anarchy from civilization”, or something to that effect.

Apparently, the grain situation is that the top 10 producers in the world are China, India, US, Russia, France, Canada, Germany, Ukraine, Oz and Pakistan.

These countries have had severe failures: China, Pakistan and India, severe flooding, Canada, Russia, Ukraine and Oz, drought.

HAARP and the CERN Hadron Collider, plus rogue solar flares are taking their toll, it seems.

#76 dark sad person on 09.27.10 at 12:13 am

Second, this blog lost its focus over the last two days. Actually, it sucked. Credit for that goes to the gold pumpers and tinfoiled conspiracy theorist whackjobs who support them. Owning gold is fine. Obsessing about it and jamming bullion down everyone’s throat, while cheering for the collapse of society and fictionalizing a world government which will control wealth and apportion babies is not. You nimrods need help. Shove off.

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

Well-obviously you’re not talking about me-cuz-
Never pumped Gold-ever-although-i do take exception to the misinformed-on “both” sides and I don’t delve into Tinfoil-at least as far as you describe it-and-
maybe you have a point-that-
this isn’t the blog for it-although-
it certainly has a seat at some table-

I find it rather strange G–that you fluctuate between the 2-Cool Aid crowds–
The Gold holders and the RE pumpers and between the 2-you find your whipping boys–
Yet-we have a Government and Central Bank-who colluded together and brought us this unprecedented disaster of a shit show-

G-you know Goddamn well-what needed to happen in 07-actually 01-but 07 at the latest–
Interest rates-needed to be slammed into double digits-immediately-to curb any further “Credit Money” expansion-
Instead–rates went to ZERO-and the bubble was continually blown-
“Meanwhile” this piss poor excuse for a Government-
“inserted” 280 Billion dollars into our “world envy” Banks-by a backdoor Swap flow-because Carney at least-knew-what the end result would be-
Nothing from our opposition-except-it should have been more-FFS!
Nothing much from you about this G-except how to make-or at least not lose money from the f–k up–

What happened-in the face of the exploded US credit industry literally burning up for 3 friggen years-this bullshit “Crime” continued-
Now–here we are-
DELETED

Try again without being profane. — Garth

#77 Patz on 09.27.10 at 12:49 am

#6 Pixma, er… I did proof read dude, which is why I corrected it because it makes a difference to call weeks as opposed to months. By and large though it doesn’t matter because this is more akin to conversation than serious writing.

Ms. Tost on the other hand is presumably not bantering but using her site as a sales tool to entice buyers and sellers. As such she should put her best foot forward. Just glancing at it I can see much that needs polishing.

#26 PEDANTIC SYCOPHANT (sic) PANDERER …awk. C+

#78 Mike in Victoria on 09.27.10 at 12:50 am

It’s fundamentally irrelevant to assets like residential real estate how much money is printed. The question is how much we earn and owe. — Garth

This statement is bordering on outlandish. How many times have I read on this blog that home prices went from 4X family income to 7-10x?

The question was about money supply not affordability. — Garth

#79 604genX on 09.27.10 at 1:08 am

If developers are now offering gimmicks to sell units then we’re a major step closer to the “collapse cascade” pattern outlined by Mish Shedlock in early July (and of course what Garth has been saying for over two years). I liked Mish’s details on staging below – all very believable.

“This pattern is quite similar to how things cascaded in the US once the top was in.

Housing Collapse Cascade Pattern

* Volume drops precipitously
* Prices soften a bit
* Inventory levels rise slowly
* High-end home prices remain relatively steady for a brief while longer
* The real estate industry tries to convince everyone it’s “business as usual” and homes are affordable because rates are low
* Bubble denial kicks in with media articles everywhere touting the “fundamentals”
* Stubborn sellers hold out for last year’s prices as volume continues to shrink
* Inventory levels reach new highs
* Builders start offering huge incentives to clear inventory
* Some sellers finally realize (too late) what is happening
* Price declines hit the high-end
* Increasingly desperate sellers get creative with incentives, offering new cars, below market interest rates, trips, etc
* Gimmicks do not work
* Price declines escalate sharply at all price levels
* The Central Bank issues statements that housing is fundamentally sound
* Prices collapse, inventory skyrockets, and builders holding inventory go bankrupt

Some of those may happen simultaneously or in a different order, but the whole mess starts with a huge plunge in volume.

I am now confident the peak in Canadian housing insanity is finally in.”

http://globaleconomicanalysis.blogspot.com/2010/07/vancouver-home-sales-drop-30-percent.html

#80 tran, Calgary on 09.27.10 at 1:31 am

#25 Frank from Calgary,

Can you please provide a link to the story? Thanks

#81 $fromas$ia on 09.27.10 at 1:39 am

Real nice. $1300 per troy ounce 11:26pm.

#82 jed on 09.27.10 at 3:25 am

yep, buy now or be priced out forever – or you could wait 5 years and get a 60k discount

http://tasmanianrealestatetrouble.blogspot.com/2010/09/realty-or-reality.html

#83 Numbers. on 09.27.10 at 3:44 am

Here is the thing about the average and median house prices, they do not tell the whole story. VALUE for the dollar.

Numbers are just numbers. If you could buy a used Mazda 3 for $18k in the boom, now you can get a used BMW 3 for $18k, the average and median prices are the same.

Same with homes. In Calgary RE Boom the average 1300 sq/ft 2-story house in the burbs was $399k, now it’s a 2100 sq/ft 2-story in the burbs for $399k. http://www.realtor.ca/propertyDetails.aspx?propertyId=9737787&PidKey=-1158973471

Same average, same median, but A HUGE difference in house and value.

While the average and median RE price may not change the product IS.

Numbers, sometimes you have read what’s behind them. (get it newspaper reporters!). We really need to come up with a better system than average and median as they tell you nothing about value.

#84 Aussie Roy on 09.27.10 at 4:21 am

Great news AUSSIE HOUSE PRICES ARENT A BUBBLE, JUST OVERPRICED BY 35% – Goldman Sachs – WTF….

http://www.smh.com.au/business/property/its-not-a-bubble-but-theres-other-trouble-brewing-20100926-15sff.html

Australian Housing: A Bubble in Search of a Prick
http://www.unconventionaleconomist.com/2010/09/australian-housing-bubble-in-search-of.html

#85 gold bugger on 09.27.10 at 4:28 am

An ostrich wrote:

“Less than 1% of the investment community out there owns any gold. ” [Citation needed]

“1/10 of 1% of the sheeple own it. ” That wouldn’t surprise me.

“Most of the gold nuts who post here don’t have any either.”

That’s where you’d be wrong.

But go ahead. Put your faith in paper money. Spurn gold. Fight man’s entire history.

The blog proprietor says it’s good to be different.

#86 Looking for your in sight. on 09.27.10 at 5:03 am

Garth, your previous blog doesn’t paint a pretty picture of the US economy. I just recently moved to Canada with a few million in US dollars, would you convert the currency over to Canadian when the time is right? I worked my ass off for this money and now see my gains erased through currency trading. What do you think, do I hold back, because eventually the US will pull through or is it a world wild depression? What’s your opinion?

I expect the loonie to be at par or above over the course of the next two years. — Garth

#87 Anne "Pom Pom" Rohmer on 09.27.10 at 6:04 am

Real estate, the great double-edged sword…..arguably both the greatest creater and destroyer of wealth.

Dubai may have to knock down buildings constructed during boom
Dubai built so much property during its boom years that it may have to start knocking some of it down again, a new report has warned.

A glut of vacant office space is continuing to spiral, despite the economic crisis, thanks to the forests of new tower blocks started by developers as the boom reached it peak in 2007, researchers said.

With some “holes in the ground” awaiting further development already being filled in, further radical solutions to the problem are needed, said the authors, researching for the property firm Jones Lang LaSalle.

“The best prospect for reducing vacancies lies with initiatives to limit future supply and encourage the withdrawal of existing buildings from stock through conversion to non-office buildings or even demolition,” the report concludes.

Dubai’s central belief, summed up frequently as “build it and they will come”, has served it well in the past. Critics queried its determination to build its ports in the 1960s but it has now become the biggest trading hub in the Middle East.

The policy crashed badly in the financial crisis, however, leaving a landscape of half-finished skyscrapers, empty artificial islands and property prices down by almost 50 per cent in six months.

http://www.telegraph.co.uk/news/worldnews/middleeast/dubai/8013438/Dubai-may-have-to-knock-down-buildings-constructed-during-boom.html

#88 PR on 09.27.10 at 6:53 am

Canadian Real Estate: Are we really this dumb?

http://financialinsights.wordpress.com/2010/09/26/weekend-roundup-are-we-really-this-dumb/#comments

#89 goldenfox on 09.27.10 at 7:21 am

Examining the Evidence for Coming Inflation

Now it is time to examine the evidence. We already know that a giant inflationary reservoir is ballooning in the bond market. Hard asset prices are rising, especially precious metals and commodities such as food. This is how all early inflations begin. The sequence is always the same. In The Great Wave: Price Revolutions and the Rhythm of History, historian David Hackett Fisher described how he found the same sequence in the development of inflationary cycles. They all begin in periods of prosperity and they all end in shattering world crises. They are all preceded by population growth. The inflation first surfaces in a demand and rise in price for life’s necessities: food, shelter, and energy. The rapid price rises first appear in the price of food, shelter, and raw materials. We’ve seen the rise in shelter which is now in the process of deflating. We’re seeing it occur in precious metals which have been rising double digits every year (in a controlled fashion). And we now see it appear in the cost of food.

#90 Bill ( Peterborough) on 09.27.10 at 7:32 am

Re # 302 TheBigLebowski ( Yesterday)

#288 Bill ( Peterborough)
Thanks for the link, matches exactly the conclusions I have come to with different sources. And the response you got pretty much plugs into the saying”Keep your friends close and your enemies closer”
Does our mediator know that Troudeau belonged to the communist youth party? We have already been taken over from within.

I hope you enjoyed your last post. — Garth

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

Come on Garth what was said wrong now.

Trudea was indeed a communist sympathizer. As a matter of fact he studied in RED CHINA when he was younger.

And we have been taken over from within, by various self serving groups who never had the publics best interest on their hidden agendas.

After all did you not say ” We all play in the same sand box”.

I bet you think Sarah Palin is hot. — Garth

#91 Bill ( Peterborough) on 09.27.10 at 7:42 am

Dan In Victoria And dark sad person , TheBigLebowski, Nostradamus Le Mad Vlad, Old_Is_Gold

Thanks for comments”

Also thanks Garth for allowing such a diverse constituent of bloggers to post here.

http://www.youtube.com/watch?v=CAsTHHh3ZG0

#92 eddy on 09.27.10 at 7:47 am

re mortgage fraud, i hate insurance, but fraud has made title insurance a necessity. a house with no mortgage is vulnerable to fraud, it might be worth setting up a HELOC , even if you never use it

#93 ken on 09.27.10 at 7:50 am

Getting hard to ignore 43% of the population,and growing,ay garth,you wanna be illuminatti you!.Why do you keep talking about us conspiracy theorist,if we are just a few freaks like you would have us beleive.Kinda hard to admit that you were actually WRONG ay buddy.buildings don’t collapse at free fall,with a kerosene fire.Why don’t you ask the 1300 architect and enginers that are asking for a new investigation what they think about it.Oh no wait I guess they are tinfoil hat conspirators too.Hard to admit that as soon as a few more of you dinosaur boomers die off,we will be the majority,and you will be the tinfoil hat freaks who still beleive that kerosene can melt steel relatively fast and powderize cement to a fine dust.Hey who needs controlled demolition,we got kerosene!

And we were doing so well this morning… — Garth

#94 Brian1 on 09.27.10 at 7:58 am

It must have been Rosenberg’s call (top) of 3,000 that set off a goldbug attack. They may communicate with each other since they don’t all respond to my questions(not just mine). They seem to fear any top way below 5,000. They will probably start selling now knowing they cannot hijack this site. To buy gold now is just too speculative. I think it is over.

Voinz; I am speculating that the R.E. powers have amassed a war chest of ideas over the years to counter people like Garth. They knew this time was coming and they use every trick in the book to maximise their profits at our expense.

Garth; I have tried to enrol in your meeting and am using my son’s E-mail, but if you feel that I am already converted then that is O.K. I just wanted to take my wife and to meet you but you will be so busy.

Did you encounter a problem? Did your son already enroll using his email addy? — Garth

#95 CTO on 09.27.10 at 8:06 am

Studies and reports from legit organizations that make no benefit from real estate sales have confirmed that Canadians are excessively over indebted, they worry about their financial future and 50-60% live paycheck to paycheck. They are maxed out!!!
I don’t care what the spinners say, this is not positive news for big $ items including real estate sale plain and simple.

#96 andrewS on 09.27.10 at 8:39 am

#52 Original Dave

I’m in my late 20s myself, as is my primary social network. Prime first-time buyers. We’re fairly well educated, been out of school for 5 years, working, have some savings etc.

Every single one of my friends that was going to presales in the spring is now saying “I’ll wait til prices come down a bit”.

The other somewhat worrying trend for those dependent on FTBs: given the economic conditions in the last two years a lot of us are job-hopping, and relocating for work. Not all that long ago Toronto (where I am) was a safe place to buy because there were always jobs here. Not so now. Frankly Toronto stinks for jobs in my field right about now.

The freedom to relocate that comes with renting now figures very prominently in our plans these days.

Oh, and did I mention that 75% of them are single – a lot of urban guys in particular simply aren’t dating seriously at this age anymore – and are not going to be “nesting” for years to come?

#97 jess on 09.27.10 at 9:07 am

Pigeon King
$225,000 at auction.
two houses, and a garage on 120 hectares of land
http://news.therecord.com/Business/article/781695

#98 lonely limey on 09.27.10 at 9:08 am

Feeling somewhat bored on Saturday I decided to visit a builders “Grand opening day” at their sales office. Mainly, in the name of research and also for the remote possibility there may be a few fit birds doing the selling.

Bear in mind this is Brampton I’m talking about and the houses will not be ready for occupation until April 2012. Never the less the place was rammed with people jostling to get their red dot placed on the site map.

While I was standing around like a spare prick at a wedding a salesman decided to engage me in conversation. The dialogue was curtailed rather sharply when I said there is no way anyone should enter into a futures contract 17 months ahead when it is very likely the market will take a pounding in the meantime. His retort was to say others thought differently and then the cheeky bugger pointed a fat digit to the hastily hand written sold out signs already taped over the most popular townhouse plans on the wall.

What are people thinking when they write the cheque?

#99 Soylent Green is People on 09.27.10 at 9:12 am

#5 Voinz on 09.26.10 at 6:04 pm

regarding that Bloor West house that sold 125 over listing, I believe that the smarter agents are listing hot houses well below what they know it’s worth in today’s market in a well crafted design in order to create a freeding frenzy of bidding and then at the end they can claim it sold for well over list

but they priced it well below what they knew they could get, it’s a very effective strategy

versus what I see home owners doing around Markland Wood is price their house ridiculously high and they sit around and wonder why no one will buy their mansion next to No Frills and poor people for a million dollars when the status house in Markland Woods is selling for $700,000.

#100 immig on 09.27.10 at 9:13 am

Please stop and think, maybe those who are buying a million dollar crack shack in Vancouver razing it and spending another million on for a mc mansion also have the money for it. There are quite a few rich people out there. Most of us, this blog reader, are not one of them.

The demographics of this blog might shock you. Look elsewhere for reasons. — Garth

#101 Dean on 09.27.10 at 9:27 am

#20 Devore

You missed my point. You can’t tell if sales are abnormally high or low based on comparing two years. You need to compare it to historical data to get that. Guaranteed next year, because of the horrible stats of this year, realtors may be trotting out “Sales up by 15% this year”. Up 15% might still be a morose number historically.

We all know that 2009 was a pretty good rebound for real estate, so comparing to those numbers is skewed. How is 2010 stacking up against the 10 year average for sales? (I don’t know, I’m asking). That’s probably a more accurate measure as to what’s happening.

Your point about how much sales drop has some merit, but often can be due to some other factor like HST or even the weather (I suspect sales may affected in Newfoundland because of the hurricane). I still believe that the best measure is a long term trend.

#102 Finanzkrise on 09.27.10 at 9:40 am

Even the country’s largest bank, with its vested interest in keeping the mortgage market afloat, is practically warning of a bubble in Vancouver:

http://www.theglobeandmail.com/report-on-business/housing-becoming-less-affordable/article1727109/

#103 Jake on 09.27.10 at 9:41 am

#83 Numbers,
Excellent Point! A+

The $/square foot data could certainly provide some support to back up your point. I totally agree with what you’re saying though.

#104 CTO on 09.27.10 at 10:01 am

#100 immig

“There are quite a few rich people out there”.

immig – From my experiences…including my own:

1. Most people actually with the money to buy houses will not risk thier moeny, that’s the prudence that helped them make $ their money and hold on to it.
2. Like Garth said, the majority who wish to be properly informed are on this blog and HAVE the money.
3. We will spend our money when we are confident that we see value, which means the market has to fall.
4. The pool of those without the money who feel compelled to buy are taped out.
5. Values will drop as a result.

#105 rory on 09.27.10 at 10:17 am

From the “big picture” blog …sheeple indeed.

“The new dynamic, however, has moved past the old Left Right paradigm. We now live in an era defined by increasing Corporate influence and authority over the individual. These two “interest groups” – I can barely suppress snorting derisively over that phrase – have been on a headlong collision course for decades, which came to a head with the financial collapse and bailouts. Where there is massive concentrations of wealth and influence, there will be abuse of power. The Individual has been supplanted in the political process nearly entirely by corporate money, legislative influence, campaign contributions, even free speech rights.

This may not be a brilliant insight, but it is surely an overlooked one. It is now an Individual vs. Corporate debate – and the Humans are losing.”

http://www.ritholtz.com/blog/2010/09/you-vs-corporations/

#106 junius on 09.27.10 at 10:34 am

#105 rory,

I read Ritholz blog this am and liked it as well. Clearly his ideas are not complete but I think his fundamentals are essentially correct.

The massive corporate concentration of the past few decades has favoured the few and been to the detriment of many. From the banksters to the military industrials complex to big pharma to giant retailers to mass media it is the individual citizen who is being shafted.

It used to be that our corporations existed for the common and public good. Now it feels like we exist to sustain them. Meanwhile no political party or movement has fully grasped the coming shift. After all, there is no money in it – yet.

#107 Pixma on 09.27.10 at 10:45 am

#77 Patz

You proofread BEFORE you push the send button. For someone who wants to take others to task for spelling errors, you’ve had a spelling error in every one of your posts. I know, you don’t see it. That’s why you send it with the error.

#108 RE Fool on 09.27.10 at 10:54 am

#5 Voinz on 09.26.10 at 6:04 pm

I googled the realtor and she has the property noted on her website as 88 Brookside. I had a realtor friend pull-up the listing and it was a closed-bidding process where all the bids were to be opened on a specific date, namely March 9, 2010. Property was sold that day with a closing scheduled for June 25, 2010.

Good catch by #10 – Perplexed as to the snow on the ground, as I always assumed “what they got” were relatively current and not staledated sales from 6 months ago.

#109 Debtfree on 09.27.10 at 10:59 am

Pierre E. Trudeau was the last great Canadian Prime minister A real Canadian . He not only studied China but opened China up to the world after the embargo put in place by our so called friends to the south and their ilk . Trudeau read and studied everything . That would make him an Everythingist . I’ve read (studied ) karl marx and that does not make me a communist . It only helps me to understand the other side of the so called free market. Bill, you do our Canada a great disservice by slandering our Trudeau. I only hope that Justin one day runs into you . If I were him I’d slap your tinfoil hat clean off.

#110 Pixma on 09.27.10 at 11:01 am

#66 Jake

Completely agree with you. I was hoping Garth might see how absurd it is to use one month’s average price to make a yearly projection. I’m not optimistic, however, seeing that he dismissed it so casually.

I made no projection. — Garth

#111 Real Estate Realist on 09.27.10 at 11:07 am

#76, Bright, Happy Fish

Yes, try again, as Garth says but also without the dashes. It’s hard to read amongst all of the material we are all having to read everyday and at a breakneck pace no less. (referring to the blog, comments and one’s own personal business elsewhere)

Garth is dead on about what he is doing and saying, as you know, however perhaps he doesn’t feel that this is the forum to share ALL of his thoughts………because it isn’t. So, don’t assume what they are, or they aren’t.

The symptoms of the (superficial and obvious) causes are what is talked about on here. Nothing more, nothing less. Oh, and a likely recovery into a very different society in the future. Not permanent armageddon, but a new chapter in human consumption (types and quantities) that is long overdue, and which is needed for the human race to survive. As for government, whatever we all feel or don’t feel should be typed on a blog that focuses on that subject.

So, if you do “try again”, please keep that stuff to a minimum? Then close your eyes and take a sail.

#112 BrianT on 09.27.10 at 11:10 am

#109Debt-you couldn’t slap your way out of a paper bag.

#113 Aussie Roy on 09.27.10 at 11:19 am

Numbers. on 09.27.10 at 3:44 am
Here is the thing about the average and median house prices, they do not tell the whole story. VALUE for the dollar.

Being in the land of the largest houses per family in the world I hear this agrument alot – our houses are bigger blah blah. Have you ever considered why the old houses are smaller?. Here is something for you to ponder. When these houses where built most mortgage originators (Banks etc) had much stricter lending rules, in my case in 1974 the most credit you could hope for was 3.5 times the households income. The less credit provided meant smaller houses, do the sums yourself look back at the lending standards in terms of household income. Again here in Australia banks are willing to lend some 7 times household income, that is double the amount in 1974. So why have houses increased in size obviously partly because of banks willingness to lend more. So for countries that have large houses their weekness is any tightening of credit standards (or high interest rates). I would agrue that replacement value (bigger houses) means very little should banks start getting nervous about their mortgage books. Its all about credit and affordability. Median prices should reflect median incomes for that area.

Houses are bigger now partly because the banks say they can be, will it always be this way, thats the $64K question but I suspect not. I suppose if you are a property bull you could hope that banks will soon lend 10 times annual income that would get the price moving upwards again, but where is the limit – 15 times what then?.

#114 Mike B on 09.27.10 at 11:24 am

RBC just released Housing Affordability Index and it indicates that housing in Canada is less affordable… well hell big surprise there. Of course as interest rates sneak up over time the cost of owning will go up so conversely the price of the house will likely go down. As indicated in the BNN report.. house prices were high in the recession of late ( or here now) and now they are lower to compensate for higher borrowing costs. Somethings gotta give unless people start making boat loads more money.

As for the 850 sf bungalow in the so called Upper Bloor west village.. Yes the one with unfinished basement… well what can you say… that’s just utterly retarded. Retarded based on the asking price and UTTERLY RETARDED based upon the selling price.

#115 Jeff Smith on 09.27.10 at 11:30 am

>#109 Debtfree on 09.27.10 at 10:59 am
>Pierre E. Trudeau was the last great Canadian Prime
>minister A real Canadian . He not only studied China but
>opened China up to the world after the embargo put in
>place by our so called friends to the south and their ilk .
>Trudeau read and studied everything . That would
>make him an Everythingist . I’ve read (studied ) karl
>marx and that does not make me a communist . It only
>helps me to understand the other side of the so called
>free market. Bill, you do our Canada a great disservice
>by slandering our Trudeau. I only hope that Justin one
>day runs into you . If I were him I’d slap your tinfoil hat
>clean off.

I agree, Trudeau is the best prime mininister Canada has, followed by Mackenzie King and Mulroney (yes, Mulroney). On the other hand the worst prime mininister Canada has ever had is… you know who. History will get everything correct, because hindsight is 20/20.

#116 David B on 09.27.10 at 11:33 am

So what is really going on ….. our main man is telling all who will listen “Canada is Good” no problems only a slight deficit of about $50 Billion … no need for stimulus money. So we can take that to mean jobs are secure, pay raises and bonus in en route … buy that home y’all wanted and fill em will fancy stuff? Beats me, news from South of Border more banks moving south and umemployment remains at near 10%.

Meanwhile back at the ranch …. was out to fancy Open House yesterday … agent had in tow a financial associate … she was there with mortgage spread sheets in hand …. yup one stop shopping on a Sunday afternoon.

Life is good eh? well only in Canader …. LOL

#117 JM in London on 09.27.10 at 11:35 am

#72 dec3ptiKon on 09.26.10 at 11:55 pm

An agent that does their job properly? LMAO!!!

They’d be on the hook for anything they publish and they generally like to stay teflon.

#118 Bottoms_Up on 09.27.10 at 11:35 am

What are people thinking when they write the cheque?
—————————————————
They’re thinking, “we just made 20% on our money”.

And the sad thing is, this thinking has held true for many years…..’the trend is your friend’

#119 Sam on 09.27.10 at 11:44 am

Petey boy never met a brutal commie dictator / dictatorship he didn’t love.

If he did hit Nixon that’s a plus for him, but there’s a LOT of minuses to overcome.

The best Canadian politician in the last 2 to 3 generations was Joe Clark.
_________________
#109 Debtfree on 09.27.10 at 10:59 am

Pierre E. Trudeau was the last great Canadian Prime minister A real Canadian . He not only studied China but opened China up to the world after the embargo put in place by our so called friends to the south and their ilk . Trudeau read and studied everything . That would make him an Everythingist . I’ve read (studied ) karl marx and that does not make me a communist . It only helps me to understand the other side of the so called free market. Bill, you do our Canada a great disservice by slandering our Trudeau. I only hope that Justin one day runs into you . If I were him I’d slap your tinfoil hat clean off.

#120 squidly77 on 09.27.10 at 11:45 am

Your RSS feed has stopped working.

#121 Devore on 09.27.10 at 12:05 pm

#83 Numbers.

Numbers are just numbers. If you could buy a used Mazda 3 for $18k in the boom, now you can get a used BMW 3 for $18k, the average and median prices are the same.

Same with homes.

This is something people noticed in areas where the average price has creeped higher.

Buyers are getting more house. When they buy, they’re buying bigger and nicer properties (the junk that had multiple offers a year ago is now sitting for months). Also, far less entry-level buyers are around to soak up the low end. As a result, average price is up, but price per square foot is down.

You actually have falling prices, but all you’re seeing is rising average and median prices.

#122 McSteve on 09.27.10 at 12:05 pm

I alway have a few percent in Gold. When Gold hit $1,300, I sold 50% of my position. If it goes down, I’ll buy more. If it goes up, I’ll sell the rest. My debts are in cash so shiny metal is a means to an end.

I find it odd that people some convinced that we need “hard assets” (like gold) also dump real estate on oil- perhaps the hardest of assests. If hyper-inflation is around the corner, $800,000 condos are cheap! Better load up!

#123 grantmi on 09.27.10 at 12:12 pm

More Pumping by MSM… from our friends at RBC!!

Love this one!

But despite the downturn, he said affordability remained “within a safe range.”

Home-ownership costs continuing to climb despite slowing activity: RBC

The cost of owning a home in Canada rose for the fourth consecutive quarter despite the slowdown in the resale market, according to a housing report released Monday by RBC Economics Research.

“Higher mortgage rates in tandem with a further appreciation in home prices boosted the monthly costs associated with carrying a mortgage on a typical home,” said RBC senior economist Robert Hogue. “This extended the deteriorating trend in affordability since the middle of last year.”

But despite the downturn, he said affordability remained “within a safe range.”

The RBC Housing Affordability Measure calculates the amount of pre-tax household income needed to service the costs of owning a home.

An affordability reading of 50 per cent means that home ownership costs, including mortgage payments, utilities and property taxes, take up 50 per cent of a typical household’s monthly pre-tax income.

During the second quarter of 2010, the national level rose between 1.1 and 2.1 percentage points across the housing types tracked by RBC.

A two-storey home remained the least affordable and experienced the largest increase, climbing 2.1 percentage points to 48.9 per cent. That was followed by the detached bungalow, which rose by 1.9 percentage points to 42.9 per cent and the townhouse, which climbed 1.1 percentage points to 34.1 per cent.

A condominium was the most affordable, rising 1.1 percentage points to 29.3 per cent.

According to the report, the slide in affordability over the past year has reversed about half of the gains accrued in 2008 and early 2009.

Ontario and B.C. saw the most significant deterioration in affordability in the second quarter, although there was some improvement in specific housing types, such as Alberta condominiums and Saskatchewan townhouses. All other provinces showed modest erosion, with the exception of two-storey homes in Manitoba, where the rise in the RBC measure was quite substantial.

In Quebec, affordability was hampered by a rise in home prices, while Atlantic Canada felt a cooling in the housing market as well, which also affected affordability.

“Current levels of affordability suggest some greater-than-usual stress weighing on Canadian homebuyers, but this does not represent an imminent threat to the market,” said Hogue. “While we expect rising interest rates to increase mortgage servicing costs, a levelling off in home prices and increasing household income will partly offset the negative effect.”

#124 Pixma on 09.27.10 at 12:14 pm

#110 “I made no projection. — Garth”

Well what do you call it then?

“the average home price fell $14,500 in a month. That’s 3.1%, or about 30% on an annualized basis.” http://www.greaterfool.ca/2010/08/30/zombies/comment-page-1/#comment-95506

#125 XNihilo on 09.27.10 at 12:30 pm

Every few days someone here asks the Q. “When is the best time to sell your home?” I say, it is when every body owns one!

For those of who aren’t still convinced about the coming property crash and keep thinking it is different here because we have a better lending standards. Here is a deal for you- a guaranteed a Ninja loan to anyone who wants it. It is absurdly available and it scarce the hell out me, just knowing that…

#126 Dude Duderson on 09.27.10 at 12:38 pm

Garth,

Any plans to come to Ottawa?

I know.. I know.. probably alot of politicians who told you never to come back to this town..:p but your message is needed here too!

#127 Aussie Roy on 09.27.10 at 12:42 pm

Pixma on 09.27.10 at 12:14 pm
#110 “I made no projection. — Garth”

Well what do you call it then?

“the average home price fell $14,500 in a month. That’s 3.1%, or about 30% on an annualized basis.”

Um I call it a statement of fact. Here is a hint 3.1% for the month and ANNULIZED for the year, (the current rate of decline for the reported period continues for the rest of the year). Reporting for all kinds of things is done this way including US GDP.

Maybe its a “word thing” a projection doesnt mean a prediction, its simply current figures subjected to some math. Result x number of reporting periods that make a year. Current reporting period annualized. Not a prediction just a statement of fact that should the rate of decline be maintained for a year that would be the result.

#128 dark sad person on 09.27.10 at 12:49 pm

#111 Real Estate Realist on 09.27.10 at 11:07 am

So, if you do “try again”, please keep that stuff to a minimum?

Then close your eyes and take a sail.

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

*&*%#%#$&&%%&^

– – – – – – – – – – –

http://www.youtube.com/watch?v=S0XjXDO0QWk

#129 Sandra on 09.27.10 at 1:10 pm

Garth,

In case you missed my last post….any chance you’ll come to Ottawa?

#130 thecomingdepression on 09.27.10 at 1:34 pm

Verrrrry interesting show at the National Press Club on CNN regarding UFO’s. Conspiracies seem to be coming true at an alarming rate of speed. These military giants speaking, can’t all be nuts at the same time. Looks like it is all true after all? Even the press asking questions were told not to speak about it or write articles, ever! The economy would collapse if the public were convinced it were true, they stated.

#131 Bill ( Peterborough) on 09.27.10 at 1:43 pm

Garth What happened to my rebutal in regards to #109 comment to me.

#132 Bill ( Peterborough) on 09.27.10 at 1:45 pm

Re # 109 Debt Free

Pierre E. Trudeau was the last great Canadian Prime minister A real Canadian . He not only studied China but opened China up to the world after the embargo put in place by our so called friends to the south and their ilk . Trudeau read and studied everything . That would make him an Everythingist . I’ve read (studied ) karl marx and that does not make me a communist . It only helps me to understand the other side of the so called free market. Bill, you do our Canada a great disservice by slandering our Trudeau. I only hope that Justin one day runs into you . If I were him I’d slap your tinfoil hat clean off.

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

My rebutal is based on facts , not to be taken as slander ( Garth)
—————–

Pierre Elliote Trudeau, was a card carrying communist

DELETED
This blog is not for dissing dead prime ministers. — Garth

#133 junius on 09.27.10 at 1:52 pm

#130 thecomingdepression,

Maybe the UFOs will take all the goldbugs, tin-foilers, Templars and other crazies off the planet before the world collapses.

Let’s hope so.

#134 Industrial Guy on 09.27.10 at 1:53 pm

Some recovery … national GDP numbers moved back into positive territory driven by an orgy of house buying and consumer spending created with “Emergency” low interest rates. So, where did this get us? RBC is saying that the standard two storey home is now swallowing up 47.4 % of annual PRE-TAX income in Ontario. After taxes, this doesn’t leave much to pay rising energy costs, the HST, and everything else that is now costing more. Try going to your boss and asking for a raise today.

How is this sustainable?

Our national family income – debt ratio is 145%, and some Economists claim it could be 160% in just two years. This is insane. So was the Bank of Canada’s low interest policy. We have seriously boxed ourselves in. If we stop spending and start paying down debt, demand for houses and consumer goods dries up and the markets collapse.
Even the head of the Bank of Canada is little concerned with all this family debt in recent weeks. Imagine that.

http://www.financialpost.com/Consumer+debt+slow+growth+worry+Carney/3576238/story.html

Yes houses will cost a lot less but, but interest rates and taxes of all types will rise at the same time. How this tradeoff plays out is anyone guess. It’s really a battle of semantics whether we’re in part two of a “W” recession or just a continuation of 2008’s recession. Unless some economic miracle happens, the future doesn’t look great …. but I wouldn’t be hearding the squirrels in to a pen just yet.

#135 Pixma on 09.27.10 at 1:55 pm

#127 Aussie Roy

Thanks for setting us straight, now here’s a statement of fact for you. Should the rate of increase continue, 3.6% per month annualized for a whole year will result in the average price rising from $461,000 to $704,000.

Not a prediction, just a statement of fact. Reporting for all kinds of things is done this way! Makes a lot of sense. Non-sense.

#136 T.O. Bubble Boy on 09.27.10 at 2:11 pm

@ #124 Pixma:

Annualizing a number is not the same as predicting it.

#137 dark sad person on 09.27.10 at 2:15 pm

This blog is not for dissing dead prime ministers. — Garth

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

Would it be OK–
If we hack sawed the head-off of a live Queen?

But-that’s only if we have to cut up our 1oz Leafs into Grams-in order to buy a loaf of bread–

http://www.youtube.com/watch?v=aiV0_rQOp4U&feature=related

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

Who was it saying here-there would never be a currency crises?

What would happen-if someone “big” decided to change the color of ink?
IMO–it “might” cause a “bit” of a ripple through the incestuous relationship-of all things “paper”

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

Ireland faces double dip, mulls restructuring of junior bank debt

Irish borrowing costs have surged to a post-EMU record after Ireland’s recovery buckled over the summer and Dublin said creditors of Anglo Irish Bank may be asked to “share” losses, a warning to bondholders that the dam may at last be breaking on debt restructuring in the eurozone. The Irish economy contracted at a 1.2pc rate in the second quarter, making Ireland the first country since the Great Recession to face a double-dip downturn. The setback is a blow for hopes that Ireland can slowly grow its way out of debt, and may renew concerns that fiscal austerity without other forms of relief risks tipping the economy into a self-reinforcing spiral.

A recent poll by the German Marshall Fund found that 55pc of EU citizens now think the euro is a “bad thing”. The Irish upset came as the PMI purchasing managers index for eurozone fell sharply in August. Manufacturing orders fell to the lowest in 14 months. German PMI fell to an eight-month low of 54.8, a sign that Germany’s mini-boom is losing steam. “This data has marked slowdown written all over it,” said Martin van Vliet from ING.

Spreads on Ireland’s 10-year bonds have risen to 405 basis points. Gavan Nolan from Markit said credit default swaps measuring bond risks on Irish banks are nearing the levels of Icelandic banks shortly before they defaulted two years ago.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8021463/Ireland-faces-double-dip-mulls-restructuring-of-junior-bank-debt.html

#138 Keith in Calgary on 09.27.10 at 2:23 pm

It’s over all right……..

From the real world files…….

A house a few doors down on the same street as my father’s place just had a for sale sign put up yesterday.

They are asking $349K……..and from the cities municipal tax records, I can see that they paid $337K in 09/08……..the same place was listed at $409K back in 2007 and slid down from there……

I have talked to the guy who lives there a couple of times in passing on the street, while visiting my dad…….

He put $5% down…..so $17K + CMHC fees equals about $20K +/- out of pocket……and it is mortgaged over 35 years….so at a 2.5% variable rate that is $1143 a month….plus $159 a month of taxes, pus $250 a month of utilities…….comes to $1,552 a month……and he’s been there exactly 24 months…..so he’s paid $$37,248 in carrying costs…..add in the down payment and CMHC fees/closing costs and it is about $57K so far that he is out of pocket…….not counting the lost opportunity cost on the money, another $2-3K over 2 years……so it really cost him $60K.

Based on roughly on what places are selling for today….that is……5% off the listed price +/-…….he “might” net a final offer of $331K….less RE fees of 7/3% ($14K) means he’ll get $317K less legal fees and closing costs fees, so he’ll probably end up with $315K….and based on the mortgage amortization table owes $308K after 2 years…..

So at the end of the day, he nets $7K at resale, but only if he gives a 5% discount, if he gives more, and he may very well have to, he loses big time.

As he has paid $60K to buy the house and carry it for 2 years……..what is the net difference in real dollar terms for shelter…..??

$53K…….($60K – $7K)

$2,208 a month……he could have rented with his girlfriend for $1,000 a month and saved the difference……..and he’d be ahead $29K + accumulated interest instead…….

RE……what a great investment eh ?

Well, for the “REIC” it sure was…..the realtor who sold it to him generated about $14K in commissions, and if it sells today another $14K +/- will be paid….so roughly $28K in RE commissions in 24 months….plus $1000 of home inspections……$1,000 of appraisals….$2,000 of legal fees……advertising……etc….etc…etc……

No wonder they all lie cheat and steal……..

#139 Bill Gable on 09.27.10 at 2:37 pm

Vancouver had the world’s least affordable housing market last year, according to a report that puts the blame on urban land-use policies designed to prevent sprawl.

The Demographia International report released Monday looked at 272 metropolitan markets in Canada, the U.S., the U.K., Australia, New Zealand and Ireland.

Four of the five least affordable cities in Canada were in B.C.: Vancouver, Victoria, Abbotsford and Kelowna. Toronto was the country’s fifth least affordable and ranked 57th in the world.

As defined by the report, housing had been affordable in these cities as recently as the late 1990s.

The five most affordable Canadian cities were Thunder Bay and Windsor in Ontario, Moncton, N.B., Saguenay, Que., and Saint John.

>> This is Ground Control to Major Tom, currently in the Vancouver orbit = YOU ARE HOOPED.

Read More:

http://tinyurl.com/2e68u9s

#140 NFN_ on 09.27.10 at 2:39 pm

http://www.rbc.com/economics/market/pdf/house.pdf

Alberta — Mixed picture
“Lacklustre housing market conditions in Alberta – even during last year’s modest upturn in resale activity – have translated in considerable improvement in affordability in the province since early 2008. In the second quarter, with prices moving in opposite directions for different housing types, the affordability picture was mixed. RBC Housing Affordability Measures fell slightly (-0.3 percentage points) for condominiums but rose (by between 0.1 and 1.4 percentage points) for all other categories. Overall, homeownership
remains affordable in Alberta, with RBC Housing Affordability Measures at or below long-term averages. This situation implies little downside risk to
the market and augurs well for a strengthening in housing demand once the provincial job market shows more substantial gains.”

Discuss

#141 dark sad person on 09.27.10 at 2:57 pm

For the people who gauge Inflation by their grocery receipts and believe that real Monetary Inflation is occurring-because prices are rising-in spite of in their face evidence of Velocity collapsing-
****************

Global food risk from China-Russia pincer

World food supplies are caught in a pincer as China becomes a net importer of corn for the first time in modern history and Russia’s drought inflicts even more damage than expected, raising the risk of a global grain shock in 2011. The Moscow bank Uralsib said half of Russia’s potato crop has been lost and the country’s wheat crisis will drag on for a second year, forcing the Kremlin to draw on world stocks.

Wheat prices have risen 70pc since June to $7.30 a bushel as the worst heatwave for half a century ravages crops across the Black Sea region, an area that supplies a quarter of global wheat exports. This has caused knock-on effects through the whole nexus of grains and other foods. “We had hoped things would calm down by September, but they haven’t: more commodities are joining in,” said Abdolreza Abbassanian, grain chief at the UN’s Food and Agriculture Organisation.

http://www.telegraph.co.uk/finance/china-business/8019004/Global-food-risk-from-China-Russia-pincer.html

#142 dark sad person on 09.27.10 at 3:26 pm

#133 junius on 09.27.10 at 1:52 pm

#130 thecomingdepression,

Maybe the UFOs will take all the goldbugs, tin-foilers, Templars and other crazies off the planet before the world collapses.

Let’s hope so

**********************
Wow-

G will give you an A+ for that one-

http://www.kneepads.com/

#143 Behavioral Finance on 09.27.10 at 3:33 pm

thecomingdepression,

That chart by far is useless comparison. These assets have not much in common in this perspective. Every bubble will end differently in terms of percentage gain. No one knows the future, but fundamentally the big money flows into Gold when they expect above average inflation and serious spending by governments around the planet in my opinion.

http://4.bp.blogspot.com/_3-h7k_OIJk0/TJvfKcRZINI/AAAAAAAADLU/XwowsFPplx0/s1600/Gold+Bubble.jpg

Bottom line Gold in physical state cannot create wealth, it needs to be used to create wealth and if you get depression you will have other things to worry. The amount of gold that you hold in that case will not matter.

#144 Coho on 09.27.10 at 3:45 pm

Rory #105,

This may not be a brilliant insight, but it is surely an overlooked one. It is now an Individual vs. Corporate debate – and the Humans are losing.”

The snippet of the article in your post touches on the frustration that more and more people are feeling. This frustration and speaking out against it is often misinterpreted as rooting for the collapse of society, by either ignorant ones or those which have managed to do quite well within it.

Someone mentioned “tunnel vision”. There’s no better example of tunnel vision than endeavouring to find one’s way through the maze in pursuit of wealth rather than break down the walls of the labyrinth.

It is estimated that only 3% of the population in the American colonies were involved in the revolution against England. Perhaps the silent majority were sympathetic to the few which spoke out, but were too afraid to do so themselves. Maybe they felt they had “too much to lose”. “No taxation without representation” was the cry back then. Perhaps they were labelled conspiracy theorists by those aligned with King George III. It appears to be a very similar situation at this time where the taxpayers are paying into a system run by those beholden to the monied special interests.

And isn’t it astonishing that in this world of ours with wars, poverty, illness, vast disparity of wealth between classes of people and countries, the exposure of exploitation, fraudulent banking practices, politicians beholden to the party line rather than their constituents, etc, etc, that the term “conspiracy theory” still gets mileage. If this were a utopia with certain ones whispering that all is not what it seems, then it is understandable why they might be scoffed at, but come on…this is the planet of mammon, where the elite strong nations bully and exploit the weaker ones and only care about more power and more money!

Still, in my opinion, all it would take is for a few leaders brave enough to do what is right and for us as individuals to look beyond real estate and our pocket book to change the coarse we’re on…

#145 SeanR on 09.27.10 at 3:47 pm

#1

Even worse, there’s no view – this is on the 1st (Ground) floor!

#146 Bill ( Peterborough) on 09.27.10 at 3:59 pm

re #137 dark sad person.

Would it be OK–
If we hack sawed the head-off of a live Queen?

But-that’s only if we have to cut up our 1oz Leafs into Grams-in order to buy a loaf of bread–
******************************************

lol, thanks man ,Garth won’t let me post alot of things today.

http://www.youtube.com/watch?v=Of368QdosR0

#147 #26 PEDANTIC SYCOPHANT (sic) PANDERER …awk. C+ on 09.27.10 at 4:05 pm

Leave poor Crystal alone. She is just trying to make a living. If she believes the worst is over then fine. You can choose to believe it or not.
Please send Patz a dictionary.

#148 YEG on 09.27.10 at 4:32 pm

#93 ken…

Very on topic, and not weird at all.

#149 Jeff Smith on 09.27.10 at 4:38 pm

>#122 McSteve on 09.27.10 at 12:05 pm
>I alway have a few percent in Gold. When Gold hit
>$1,300, I sold 50% of my position. If it goes down, I’ll
>buy more. If it goes up, I’ll sell the rest. My debts are in
>cash so shiny metal is a means to an end.
>
>I find it odd that people some convinced that we
>need “hard assets” (like gold) also dump real estate on
>oil- perhaps the hardest of assests. If hyper-inflation is
>around the corner, $800,000 condos are cheap! Better
>load up!

It never hurts to be well diversified I guess. However, the situation right now in North America seems to point to deflation instead of hyperinflation. As it stands, the only way North America can prod itself into a hyperinflation situation is to wage war all over the earth. Luckily North America is the only country in the world which has that kind of capability. So if suddenly we find ourselves in a World War III situation, well all bets are off for a deflationary scenario. So the goldbugger might still have the last laugh.

*The author choose to refer to North America as a country because we are joined at the hip. And no it’s not different here, just wait.

#150 bruce corell on 09.27.10 at 4:47 pm

I hate to say this but a friend of mine from Scotiabank has just notified me of their Mortgage products in the past 90 days. It is down over 33%. They have an internal memo that the real estate bubble has burst and this will not bode well. They are forecasting 30 to 40% decline…
Investors beware as this well make 1991 look like a walk in the park………..

#151 dark sad person on 09.27.10 at 5:05 pm

#144 Coho on 09.27.10 at 3:45 pm

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

Good stuff-

I only wish i could say that and be so diplomatic about it-cuz-you nailed it–

I’ve been told-I’m a “bit” rough around the edges-

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

Bill–

http://www.youtube.com/watch?v=i2zE9cot3jY&feature=related

#152 jess on 09.27.10 at 5:20 pm

http://www.cftc.gov/opa/press98/opamntn.htm
So what’s the problem?

“The problem is that they can be extremely misused. These instruments offer two different roles to entities using it. One is to hedge price risk; the other is to gamble on price risk. And there are means within the over-the-counter market to gamble on price changes in an enormous way, putting up very little up-front money so that entities are tremendously leveraged. And that means that they can make tremendous profits when the price moves right for them. But when it moves wrong, they can collapse like AIG did. …

So what do the American people need to know about why this is so important to get after right now, and why it was so important for you?

Because this is a market that can impact each of us. It’s AIG’s collapse. It’s the toxic assets on the books of many of our biggest banks that are over-the-counter derivatives and that caused the economic downturn that made us lose our savings, lose our jobs, lose our homes. We can’t face repeated harm like this from a totally black market, a dark market….

http://www.pbs.org/wgbh/pages/frontline/warning/interviews/born.html

#153 jess on 09.27.10 at 5:33 pm

dark sad:

The FAO Cereal Price Index averaged 156 points in May
2010, down nearly 9 percent, or 15 points, from December2009 and as much as 43 percent below its April 2008 peakof 274 points. International prices for all major cereals havefallen considerably since the beginning of 2010 in view of ample export supplies and prospects for large crops in 2010.
Wheat and rice prices have declined while maize prices
increased in recent weeks, mostly in reaction to unexpected large purchases by China.

http://www.fao.org/worldfoodsituation/en/

http://www.fao.org/docrep/012/ak349e/ak349e00.pdf

fao food price index

http://www.fao.org/worldfoodsituation/FoodPricesIndex/en/

#154 Jake on 09.27.10 at 5:43 pm

#140 NFN,
That RBC report measures affordability by assuming a 25% down payment (page 7). I don’t think that is the norm these days. Things would certainly be a lot more affordable if buyers in Calgary all had 25% down.

#155 junius on 09.27.10 at 5:50 pm

#144 Coho,

You said,”And isn’t it astonishing that in this world of ours with wars, poverty, illness, vast disparity of wealth between classes of people and countries, the exposure of exploitation, fraudulent banking practices, politicians beholden to the party line rather than their constituents, etc, etc, that the term “conspiracy theory” still gets mileage.”

Indeed. It is amazing when it is all happening in plain view right before our eyes.

Meanwhile the tin foil crowd tries to tune in UFOs.

#156 jess on 09.27.10 at 5:51 pm

Structural vs Demand
http://epi.3cdn.net/c1218e8213c58051e4_tlm6b5tf9.pdf

#157 CrowdedElevatorfartz on 09.27.10 at 6:06 pm

@VancouverGoinUp
If you want to live at Hastings and Main. Be my guest.
Cockroach infestation GoinUp !
Tweaking crack heads GoinUp !
Break,Enter and Thefts GoinUp !
Beggars Everywhere GoinUp !
For Sale/Price Reduced GoinUp !
Taxes GoinUp !
Services NOT GoinUp !
Realtors’ desperation GoinUp !

Show a little compassion for those who dwell there. Could be you some day. — Garth

#158 david on 09.27.10 at 6:10 pm

#150 hate to say this but a friend of mine from Scotiabank has just notified me of their Mortgage products in the past 90 days. It is down over 33%. They have an internal memo that the real estate bubble has burst and this will not bode well. They are forecasting 30 to 40% decline…
Investors beware as this well make 1991 look like a walk in the park………..
———————————————————-

My buddy who works at RBC has told me something similar to that? He said mortgage products are down 37% and expected to get worse. With sales still falling and prices now following it seems very obvious the housing bubble has started it’s crash back down to reality. Some realtors are starting to admit the falling housing market.

#159 S.B. on 09.27.10 at 6:13 pm

Here’s a Leslieville complete gutted reno, a semi detached, offered at 739,000. It is located on Eastern Ave, a kind of sketcy part of the area.

http://www.choicehomes.ca/Listing/ViewListingDetails.aspx?ListingID=20869937&ShowCompact=false&Preview=false&new=false&LastTabIndex=-1&BackEmailID=-1&BackEmailTypeID=NONE

Price appears high even for a semi? The inside is very nice.
Perhaps a few years ago this would be listed at 500,000, max.

#160 Nostradamus Le Mad Vlad on 09.27.10 at 6:16 pm

#16 sk76driver — “No Income No Job or Assets”

Good point for the Gen Whatever They Are Nows. Not only will people have to embrace new mindsets and outlooks for jobs, they will have to do what the UK has started — send young people to Chindia and similar places to learn new skills and trades.

The west doesn’t cut it anymore.

#84 Aussie Roy — “A Bubble in Search of a Prick”

There are plenty of them in the CPC!

#91 Bill ( Peterborough) — “Dan In Victoria And dark sad person , TheBigLebowski, Nostradamus Le Mad Vlad, Old_Is_Gold (plus Chaos, Jess, Jake, Devil’s Advocate, #93 ken, Mike The Engineer, BrianT, The Coming Depression, Nostradamus Jr. and anyone else)”

As I was caressing my frozen pizza at lunchtime, dreaming of deadbeat porno stars who were covered with celery, tomatoes and mushrooms, an idea suddenly formulated in my pinkie:

If any (or all) of you decide to visit the Okanagan for a well-deserved break from life, please inform moi (via Garth’s blog) so we can enjoy a knees-up Mother Brown shindig before TSHTF. A lot of motels / hotels may be offering cut-rate deals.

I recommend May (Victoria Day), Sept. or Oct. (the Wine Festival, ‘tho I don’t imbibe now, but y’all can). We will be enjoying ourselves to the fullest extent while all hell is breaking loose worldwide — life is so short; let’s all go skydiving without parachutes!

#109 Debtfree — “He not only studied China but opened China up to the world after the embargo put in place by our so called friends to the south and their ilk.”

Good point, and now look at how the cycles are changing with the west losing its marbles and the east reaping the rewards (at least for the time being in their cycle).

Good post.

#161 dark sad person on 09.27.10 at 6:18 pm

#153 jess on 09.27.10 at 5:33 pm

dark sad:

The FAO Cereal Price Index averaged 156 points in May
2010, down nearly 9 percent, or 15 points, from December2009 and as much as 43 percent below its April 2008 peak of 274

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

Not sure what your message to me was-but-if it was about prices being down yoy-i understand that-

My point was directed at the Inflationist’s who have been screaming about price increases lately and attributing it to “Monetary Inflation” saying-how could there possibly be Deflation when prices are rising-

But they are correct-about prices rising in the last while and i pointed out with that clip-why-
Since July-prices have spiked considerably-but-the increase is mostly weather related and of course speculation-

http://www.barchart.com/cache/3bf12b6d2921c6bab1a1c0f0cd562aa8.png

http://www.barchart.com/cache/c7caec7392f5acb434b87fbcdd668f43.png

http://www.barchart.com/cache/627f3720664d18abbbaff0d4cb5e9d32.png

http://www.barchart.com/cache/3c19e7215ea0cba7e7379927f53fbfab.png

#162 VancouverGoinUp on 09.27.10 at 6:21 pm

This guy must hang out with Shiller – both clueless to the ongoing boom

RBC economist Robert Hogue is raising a “red flag” about housing affordability in Vancouver.

The bank’s quarterly report on housing trends and affordability, released Monday, says that Vancouver is one of a handful of Canadian markets where the share of household income taken up by home ownership costs “is at worrisome levels.”

Average home prices in Vancouver have jumped about 40 per cent year to year, according to RBC, and the proportion of median pre-tax household income required to service the cost of a mortgage on an existing housing unit exceeds 70 per cent for both two-storey homes and detached bungalows.

A standard condo consumes about 43 per cent of income according to RBC.

“In Vancouver, Canada’s most expensive market, RBC housing affordability measures are very close to their all-time high, which points to significant underlying stress and raises a red flag,” the report says.

It adds that “very poor affordability is likely to restrain demand in the period ahead.”

Ottawa, Montreal and markets in Saskatchewan also show poor affordability relative to historic trends, while the situation in all other major Canadian housing markets and regions is “very close” to long term averages.

Read more: http://www.vancouversun.com/waves+flag+over+Vancouver+housing+market/3585943/story.html#ixzz10m3eOe4J

#163 squidly77 on 09.27.10 at 6:25 pm

Once the Fed initiates QE2 expect gold to take a sizable hit.

#164 CrowdedElevatorfartz on 09.27.10 at 6:31 pm

Sorry if I sound a little too “harsh” there Garth but after 25 years in the service industry in Downtown Van. I have seen and experienced it all. Drug addicts defecating at busy bus stops at 8am. Threatening me with a needle when I walk through a loading bay to get tools from my van ( because I have interrupted their injection!) Panhandlers verbally assaulting terrified elderly cruise ship tourists. Broken car glass on EVERY block downtown. All my tools stolen ( 3 times)and within minutes being pawned on Granville St. Insurance wont touch tradesmen’s vans without a HUGE deductable.
Sympathy, sorry, not here.
But I digress
Vancouvers” Olympic Village, a 15 minute walk from Hastings and Main.
Vancouver taxpayers on the hook for $730 MILLION in unsold units. 257 sold , 480 remaining.
Van city council holds “in camera” meeting to discuss the debt and solutions.
Sales of condos in Seattle’s Hyatt Hotel/Condo “firesale” at 30% off.
Taxes in vancouver will have no where to go but up and services will be cut to the bone.
The “pro business” Liberal Govt have been dropping in the polls faster than a hitmans pistol in a night club.
What are the voters options? The NDP.
The province is financial toast.
Prospects for Financial Doom, Goin up.

#165 CrowdedElevatorfartz on 09.27.10 at 6:36 pm

Quebec may be the “Most corrupt province in Canada” according to MacLeans Magazine this week
But I dare say BC is a very close second.

#166 Jeff Smith on 09.27.10 at 6:41 pm

>#125 XNihilo on 09.27.10 at 12:30 pm
>Every few days someone here asks the Q. “When is the
>best time to sell your home?” I say, it is when every
>body owns one!
>For those of who aren’t still convinced about the coming
>property crash and keep thinking it is different here
>because we have a better lending standards. Here is a
>deal for you- a guaranteed a Ninja loan to anyone who
>wants it. It is absurdly available and it scarce the hell
>out me, just knowing that…

Hey man, that’s old news. It’s call the CMHC. Been discussed here to death. Probably the only thing CMHC has been most effective has been to con the international community. Pretty much every foreign media the world over has been complimenting how great and wonderful and responsible the canadian banking system is, no single bad loan to be had, those world class Canadian banks! None of them (foreign media) have ever heard of the CMHC, and why should they? Most of Canadians probably have never heard of the entity. I will truly, head bowed down, humbled, that I myself have never heard of it until I visited this blog.

#167 Aussie Roy on 09.27.10 at 6:50 pm

135 Pixma on 09.27.10 at 1:55 pm

Not sure what your point is but glad you get it now. Its simple really isnt it.

#168 harrystinson on 09.27.10 at 6:54 pm

If you want cheap housing go to Hamilton. Toronto is overpriced.

#169 Wise Guy on 09.27.10 at 7:09 pm

#5 Voinz on 09.26.10 at 6:04 pm

As for the house selling for $125,000 over asking price in upper Bloor West Village, I find that very hard to believe!

I personally know someone that was selling their house for $499,000 on Humbercrest, they had to further reduce the price and finally got $449,000.

This was back in June.

Somebody noted the snow on the ground and I think that is the key clue to that falso advertising. This sale more than likely occurred much much earlier in the year!

#170 Love this Blog on 09.27.10 at 7:11 pm

Dan in Vic, from yesterday
“Wealth.
What is it. To some its gold, to others its real estate.
Still others see it as material goods.
Or a huge bank account.
Others see it as control over their fellow man.

I’m going to take my 80+ year old dad salmon fishing tomorrow.
The coho are running in Sooke, some in the 20+ pound size (huge).
He’s unsteady on his feet, can’t see to well , and has a little trouble hearing.
I’ll hear all the old stories again like I do every time I take him out.
He’ll probably break some thing like he invaribly does…
Or screw up my electronics from playing with the knobs and buttons.
I’ll be having peanut butter sandwiches on old bread cause thats all he can afford, after all he always brings the lunch.

But you know what? Tomorrow to me is worth more than anything that some of you covet.
Thats my wealth.”

I had to copy and paste it Dan, because you are 100% right. Never forget what is truly important.

#171 JM in London on 09.27.10 at 7:24 pm

#150 bruce corell on 09.27.10 at 4:47 pm

#158 david on 09.27.10 at 6:10 pm

I guess we can consider this correlation of what I’ve heard from some of my insiders at TD and CIBC = we’re heading in kids, buckle up as I think it’s getting bumpy.

After all 4 out of five is pretty good weighting despite it being somewhat “hearsay” – Wonder if the promo material will reflect?

#172 Nostradamus Le Mad Vlad on 09.27.10 at 7:46 pm


The UN “On January 1, 1942 President Franklin D. Roosevelt, finding the world at war once again, proposed a stronger joint effort to control the world.”

12:08 clip Fast Money, Big Bust — is this what QE2 and QE3 are all about?

If in doubt, create or declare war on someone!

Gold One “This will drive gold prices through the roof and draw investors away from the paper equities markets, unless another source for gold can be found to dump onto the market to suppress gold prices. wrh.com. Plus — Gold Two Headline is quite catchy! “If China continues to hold down its currency, the country will import excess US liquidity, overheat, and lose wage competitiveness. This is the default cure if all else fails, and I believe it is well under way.”

UN and Banks equals created food shortages which lead to food suppression and rising prices. Who benefits?

Failing Banks Another reason for gold possibly going nuts? “These bank failures are not a sign of a recovering economy, but an economy in meltdown.” wrh.com.

Top 100 items to stock up on. No one says what for.

Like Prince, the unpronounceable volcano in Iceland may blow its top again.

The greedy are becoming greedier. About time the whole den of thieves (including corrupt politicians) had this whole thing blow up in their faces, then the world will be rid of them.

GC and the NWO “Yep, that’s right. Global Cooling. Which means one of two things. Either it was a printing error.

“Or the global elite is perfectly well aware that global cooling represents a far more serious and imminent threat to the world than global warming, but is so far unwilling to admit it except behind closed doors.” Ice age coming sooner than anyone realizes?

For Extremely Verily Silly Only Schmozzleballs “The globalists must be in a real panic to try this stunt! But I guess now that Al Gore has failed to unite the planet against Carbon Dioxide, those who wish to rule the Earth (meaning to rule you) appear to have resurrected a plot line from the TV show “Outer Limits!” wrh.com.

Broken, yes but never, never beaten!

#173 Midas on 09.27.10 at 7:49 pm

#62 Jsan writes: “I don’t buy the whole currency debasement argument that the gold bugs and others give. Do they actually think that China and the rest of the world will sit back and allow the US to debase their currency vs their own? No Bloody way!!!! China recently said that if their currency were to go up 20% vs the US dollar it would be catastrophic to their economy. If the US debases their currency than every one else will debase their currencies. What does that equal? Nothing, we will be back at square one where the currencies are all at about the same worth compared to each other.”

Jsan, you’ve totally missed the point, here. Of course other countries and unions can debase their currencies at similar rates to the USD. All that means is that gold and silver become even better investments.

Garth is absolutely correct when he says that gold isn’t money. But why is that? Did a free market decide that gold wasn’t worthy? No. Governments decided.

First they printed paper money, promising to redeem it for gold on request. Then governments suspended redemption during times of war. Then FDR suspended private redemption in 1934. Then Nixon suspended sovereign redemption in the 70s.

So, a whole generation or two has grown up thinking paper is money. Well, so it is — by govt. fiat, only.

What’s to stop a government from printing money to monetise debt? Nothing. The US finds itself between a rock and a hard place. My ‘money’ is that Helicopter Ben and the Feds will kick the can, printing more money to ‘stimulate’ the American economy.

If you want a balanced portfolio, look at which items are closely tied to a particular currency. If all your assets are closely tied to a paper currency, I’d say your portfolio isn’t very balanced.

#174 Behavioral Finance on 09.27.10 at 7:54 pm

mrmike

Advocating to place money into a system that is no doubt bound to fail?

What are you basing this question on?

Please share with us where are you going to keep your money.

#175 ralph on 09.27.10 at 7:58 pm

Only able to load the first 23 comments onto my computer. Gremlins working overtime?

#176 Brian1 on 09.27.10 at 8:08 pm

I remember when the Royal Bank said that all houses would be worth 1 mil. Anyone else remember that?

#177 april on 09.27.10 at 8:51 pm

#175 Ralph.
I am only able to load the first set of comments to a new post with Firefox browser. It’s been this way since Garth’s site was hacked. Internet Explorer lets me have more if not all sometimes. I’d sure like to know what is causing this.

#178 T.O. Bubble Boy on 09.27.10 at 9:18 pm

@ #175 ralph:

Change your browser settings not to cache as much… choose “refresh every visit to the page”

#179 Patz on 09.27.10 at 9:21 pm

#107 Pixma sez:

“#77 Patz

You proofread BEFORE you push the send button. For someone who wants to take others to task for spelling errors, you’ve had a spelling error in every one of your posts. I know, you don’t see it. That’s why you send it with the error.”

You’ve read all of my posts and picked out a spelling error in each one? That’s a tad weird; you know that don’t you? Also your first line sounds a bit angry: “You proofread BEFORE you push the send button.”
Sir, yes sir!

#180 Burnaby Boy on 09.27.10 at 9:22 pm

The last time gold bubbled up to the infathomable heights of $850 Johnny Carson had a gold dealer on his show explaining to the public that when he sold gold he always accepted dollars. It is the same this time. With thanks to the biglabowskie ? I’ll sell when the price of gold and the DJ cross and either buy dividend producing stocks or a condo. Maybe both? With thanks to Garth and his groupies.

#181 mario on 09.27.10 at 9:24 pm

#175 ralph

try deleting your cache

Internet Explorer – Tools/Internet Options / Delete Browsing History

#182 Taxpayer like everyone else on 09.27.10 at 9:28 pm

Bill Gable @ 139

“Vancouver had the world’s least affordable housing
market last year, according to a report that puts the
blame on urban land-use policies designed to prevent
sprawl.”

Get it straight Bill, the report doesnt say that. Blogged here months ago.

92 Eddy re mortgage fraud – check this

http://www.ltsa.ca/land-title/security-of-land-title

“In April 2009, the BC Court of Appeal held that unless a
mortgage is granted by the true owner of a property, the
mortgage is invalid and the owner’s title will be returned
to its original state.”

Not sure if that applies where you live. If not, the HELOC
may be a good idea.

#183 sotiri on 09.27.10 at 9:34 pm

Garth there are 176 comments in this post, for some reasons I can access the first 50 only the rest is not showing …is there a hacker again???

#184 Cashman on 09.27.10 at 9:34 pm

I am one of those ‘conspiracy, whack jobs’ as you folks call it, but um, facts are facts. Uncle Ben Bernanke is ramping up the printing presses with even more fever of late. Houses are going down in value, food and energy going up, unemployment is up, wages are flatlined and borderline falling. Mark Carney and Uncle Dalton McGuinty are raising interest rates, while still taxing us to death. Hydro is going up in the fall by 6 or 8%, even though Ont. Hydro over billed us to begin with, my water is going up almost 8% in january and I don’t even get a raise of 8%. I guess I am just a ‘conspiracy whackjob’ bent on globalization. lol.

#185 mrmike on 09.27.10 at 9:35 pm

#174 Behavioral Finance…

Chindia.

#186 Jeannie on 09.27.10 at 9:52 pm

Apologies for changing the subject somewhat.

Garth advises buying preferred bank shares, however I was given some information this afternoon that came as a surprise.
Our tax guy said that those who live outside of Canada
will pay tax on dividend income.
Maybe Garth will see this and respond.
Otherwise, to any out-of-country Canadians…is this information correct? I was under the assumption that dividends were tax-free…. wrong assumption ?

#187 Sam on 09.27.10 at 10:10 pm

Jsan, as I understand the argument, this is THE POINT.

What form of money do (almost) all central banks own, but canNOT unilaterally devalue?

What form of money do (almost) all central banks own, against which they CAN devalue their own currency?
_______________________
#62 Jsan on 09.26.10 at 10:18 pm

I don’t buy the whole currency debasement argument that the gold bugs and others give. Do they actually think that China and the rest of the world will sit back and allow the US to debase their currency vs their own?

#188 Yeah Right on 09.27.10 at 11:10 pm

I don’t know about you – but I see an ad for mortgages on the main page (top right) of this site…???

#189 Devore on 09.28.10 at 12:58 am

#186 Jeannie

Canadian stocks that pay dividends are taxable as dividends for Canadian tax filers. You will sometimes see some companies do not fill out the US paperwork, so US tax filers pay regular income tax. (And vice versa, not all US dividends may qualify as such in Canada.) Income trusts will pay out a very small portion as return of capital, which I believe is not taxable?

Talk to an accountant if you need to know for sure, not some anonymous guy on the internet ;)

#190 BrianT on 09.28.10 at 6:16 am

#184Cash-the same type of person that loosely uses the term “conspiracy” to discredit logical analysis would have used blasphemy or infidel hundreds of yrs ago-that type of person is simply appealing to authority or trying to convince themselves that if they continue to do what they are told they will get what they want.