Count on it

So, 395 houses sold in Victoria last month, where 340,000 people live, 1,330 of whom are real estate agents. It was the worst sales number in 20 years. You do the math.

Days ago our largest steel mill, now US-owned, shut down. Likely forever. Imagine the additional damage to house prices in Hamilton, population 692,000.

In twenty days the housing industry will ratify new rules breaking its monopoly on listings. Targeted by the feds, it has no choice. “These changes,” says LePage boss Phil Soper, “may well have a profound effect on the lower end of the market.”

Today in Ottawa officials meet to decide if mortgage rules are too loose and down payments too low. Odds are no changes are imminent, as the real estate market wobbles. But Mark Carney’s blunt words days ago are resonating off the cut stone walls.

‘Investment in housing has outstripped total savings for over nine straight years,” the country’s central banker said. “This cannot continue.”

And it won’t. Count on it.

That real estate’s in transition and turmoil at the moment is not the question. As the country’s most expensive residential condo development teeters on the edge of financial ruin, as households wince under an historic debt load, as the weight of the HST is felt and, especially, as wages and jobs rust up, the question is what comes next.

For those who sell houses for a living, the future sucks. Not only is the curtain coming down on the last great bull housing market of this generation, but the whole commission structure is under assault. Under serious government pressure, realtors are about to unlock the Multiple Listing Service nation-wide, so that FSBOs can advertise their homes on this mother of databases. That simply means every homeowner has a choice of engaging an agent to sell (and give over an average of 5% of the sale price), or going it alone – yet with access now to the nation’s biggest pool of prospective buyers.

It couldn’t have happened at a worse time, of course. With the market entering a period of freefall (over 77% of all agents in Victoria sold nothing last month), realtors were already taking in laundry and piloting school buses. This now means a slew of vendors will pay a hundred bucks to get on MLS in hopes of avoiding $15,000 in average commission. Yep. Time to hand back the keys to the 535i.

It’s also bad timing, because with buyers scattering and markets imploding it’s exactly when vendors need help flogging a house. After all, if I’m right, this could be the last time in a decade to sell a home in a month or two, and at a price within reach of the all-time high. After Christmas, it just keeps getting worse. Let me remind you the average USA homeowner now requires a full year to find a buyer, and last month 50% of all asking prices were reduced.

Pay attention. Coming to a hood near you.

And what of noises F will see the light, dump 5/35 and tell CMHC to require 10% downpayments? Is the federal government serious about clamping down on runaway household debt, knowing full well that as interest rates normalize we face a massive mortgage crisis in four more years – just as the Boomers are stampeding out of real estate?

No. Ain’t gonna happen. F, as you recall, was the one who foisted 0% down and 40-year amortizations on the country, helping to turn a 2007 housing blaze into a 2008 inferno. He also  hand-picked Carney, whose emergency interest rates escalated the inferno into a 2009 real estate firestorm. Together they took home prices to their highest level, encouraging mindless bidding wars, pumped debt into middle class veins and made the economy 20% dependent on housing.

Granted, he may regret all that now (I’m being kind), but the last thing he’ll do is take the right long-term action because of the short-term consequences. Trust me. I know the guy. I know politics. Homeowners usually vote for conservative parties, and even though we can all see the cliff ahead, for that reason no brake will come.

Did I ever mention this won’t end well?

196 comments ↓

#1 harrystinson on 10.03.10 at 8:44 pm

Toronto sheep continue buying. Meanwhile 50 kilometres away here in Hamilton people don’t buy affordable $100,000 homes. I don’t understand.

#2 squidly77 on 10.03.10 at 8:50 pm

realtors (no caps deserved) may well be driving school buses and doing others peoples laundry, but if a job application comes my way that has realtor, mortgage broker or anything housing in it, it will be thrown in the trash bin.

They are the destroyers of the Canadian family and the Canadian way of life.

#3 Sam on 10.03.10 at 8:53 pm

Alan’s original stance on this board:

Canadians will NOT sell their houses at reduced prices

ABSOLUTEILY WILL NOT
I-M-P-O-SS-I-B-L-E

” read my lips:

no way,
no how,
no when,
ain’t gonna happen ”

then he disappears behind a thick curtain of obfuscatory, long-winded posts

And now? Vancouver prices won’t fall at all because of rich asians & europeans.

What’s the next stop on your retreat Alan?

Alan is: Monty Python’s black knight

“it’s just a flesh wound”

#4 squidly77 on 10.03.10 at 9:04 pm

So tell me, who’s going to buy all those overpriced homes?

#5 T.O. Bubble Boy on 10.03.10 at 9:06 pm

Granted, he may regret all that now (I’m being kind), but the last thing he’ll do is take the right long-term action because of the short-term consequences. Trust me. I know the guy. I know politics. Homeowners usually vote for conservative parties, and even though we can all see the cliff ahead, for that reason no brake will come.

hmmm… so, is a vote for Harper & F & friends basically like saying “thank you for letting me qualify for such a ridiculous mortgage”?

I figured that homeowners would want stability — you know, the type you get when the government isn’t playing casino games with the housing market to try and bluff their way out of a near-depression.

#6 Toronto on 10.03.10 at 9:09 pm

Great articles Garth. Have you ever thought of setting up a facebook fan page.

Carney only cares about the health of his paycheck next week and not the health of the economy 5 years from now!

#7 Real Estate Realist on 10.03.10 at 9:15 pm

Harry – is that really you?

#8 45north on 10.03.10 at 9:17 pm

will Flaherty see the light, dump 5/35 and tell CMHC to require 10% downpayments?

Trust me. I know the guy. I know politics. Homeowners usually vote for conservative parties, and even though we can all see the cliff ahead, for that reason no brake will come.

I don’t know the guy and I don’t know politics but I see a window of opportunity. Don’t tell him.

#9 WINNIPEGER on 10.03.10 at 9:17 pm

Simple economics— USA hurts= Canada hurts.

#10 Calgary Rip Off on 10.03.10 at 9:23 pm

It wont end well. For who? The sellers or the buyers?

If anything, a drop $200K off current prices in Calgary would be gladly welcomed, even if the interest is 15%.

Why would anyone want houses overpriced?

Not sure what all the gloom and doom is about.

All these sellers likely have all four limbs, running water, not freezing to death, and have food.

Maybe all these sellers should move to India or central Africa.

Then they’ll know real problems.

#11 john m on 10.03.10 at 9:28 pm

Great post Garth…I find it frightening the path our leadership is taking us on…real estate is a tough racket (i was in it in the 80’s).Commission rates seem exorbitant but not when all the factors are considered..advertising is very expensive,hours are spent showing homes (for nothing) until a sale is made-no sale -no payment for hours of work or the cost of advertising.Only about 10% of real estate agents actually make a decent living. Thousands of people are employed in the real estate business country wide many will throw in the towel with no expertise in other fields and further burden our UI coffers..to say nothing of all the related fields that will be affected. To quote you Garth “this will not end well”

#12 Dan on 10.03.10 at 9:34 pm

“will Flaherty see the light, dump 5/35 and tell CMHC to require 10% downpayments?”

Idiot F must hate the free markets. Stupid mark and idiot F should look at the free markets to fix the mess they created. Stupid mark and idiot F why do you hate free markets and democracy? The market needs to crash fast and hard to clean out the excess. don’t be stupid or an idiot and followed the failed path of the US. Canada can have a short and painful depression or a long and painful depression. It’s your pick stupid idiots.

POP………………………

Mark………I do my Goldboy masters work

F……………I’m just an idiot. What was that?

#13 seemac on 10.03.10 at 9:34 pm

http://www.financialpost.com/news/Ottawa+ponders+further+tightening+mortgage+rules/3617608/story.html

Cool!

#14 dark sad person on 10.03.10 at 9:38 pm

#165 Cameroni on 10.03.10 at 1:52 am

Where I differ in opinion with a couple posters here is that I do not actually hope for social breakdown or calamity nor look forward to the extremely negative outcomes that come hitched with “end of the world” theorizing.

These guys are promoting a financial collapse as a solution to our problems. WTF.

Excuse me. Since when were our lives in this country so difficult that we needed a financial collapse to correct the past. Idiocy. Their thinking does not make any sense at all.

We do have worries for sure and most Canadians do not really acknowlege how difficult the future might be particularly if we endure a serious market sell-off this fall as the technicals all suggest is inevitable.

But we have been there before. Our society did not fall apart or disintegrate and collectively we toughed it out. We will do that again if need be. Let’s not start by thinking that this country is an economic weak link or we lack the resources and fortitude to go nose to nose with a hard recession. We will get through it just fine.

I dislike the philosophy of the extremist element that is attempting to take over many of the good blog sites and I will not relent in my criticism of their dangerous agenda.

Buying gold and other precious metals is a great way to preserve wealth at this time. Openly and publicly pining for the collapse of society is just an invitation to gettting yourself locked up if times get as difficult and dangerous as these guys hope for.

Nobody likes a trouble maker.

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

Same old garbage from you isn’t it–
Presumptions and Assumptions–
You are one pompus self serving little man–

Nowhere-have i read on this blog-from “anyone” that they are “hoping for an economic collapse–
No one–No where–Ever–
Go it?
Now the ball is in your court-to back up these words you say–

You cannot do it-
I know this-and-so does all the rest of the board–
Which means—

You-are a Fabricator-
A Sensationalist-

You try to cover yourself by “twisting” people’s words and adding your own words to their statements into a derogatory slant-to cover some sort of ineptness-that you have–

I have 3 Gen X’rs–why would i wish an economic collapse on them?
Why would anyone in their right mind “want” this?

I’ve tried my best-to alert people to the fact-that things just are not what they seem-
To prove with data and facts that the comments i make are legitimate-

One more thing and I’m done with you–

I invited you to debate me openly on this topic which could have been an (interesting) subject-but-you turtled and resorted to the cover up tactic-that i mention above-with a heavy broadside of “name calling” and fabricating the truth-

I do not want to see this board get trashed-
That–is just more of your BS-

You’ve pushed this-as far as your going to–

If you do engage me in an open economic debate now-beware–cuz–
I’ll do my level best–to expose “all” of your bluff-

#15 dd on 10.03.10 at 9:39 pm

..‘Investment in housing has outstripped total savings for over nine straight years,” the country’s central banker said’>>

And they are just waking up to this fact?

#16 harrystinson on 10.03.10 at 9:43 pm

Harry – is that really you?
Sorry I am not “that” Harry. If I were I would be here pumping up real estate.

#17 Prof. ANON on 10.03.10 at 9:45 pm

As regulars know, I have an imminent rent vs. buy decision. Essentially, the choice is rent at $1,200 (including storage space for camper and boat) or purchase a dirty and ugly but structurally sound 50 year old fixer upper for around $95,000. Current assessed value of the house is $110,000

Readers have been split in their reactions. In particular, a couple of comments from Cameroni have stuck in my head. So, I ran a cost benefit analysis that assumes that we have to move (again) and sell five years out and that also takes into consideration rent reductions every year (rents will drop as folks with unsold homes become reluctant landlords).

The relevant question is: what price would we have to sell the house for in five years to “break even” compared to renting?

So I ran the numbers, assuming a 5% drop in rent prices every year, increased cash flow (mortgage is much lower than rent) invested at 5% compounding rate of return, opportunity cost for closing costs-downpayment-security deposit calculated at 5% compounding, $30,000 borrowed at 4% (LOC) for renovations, interest only payments on LOC, weekly accelerated mortgage payments, and 5% realtors commission when selling in year five. When calculating cash flow, I took into account taxes, differences in insurance costs between renting and buying, and LOC payments.

The result? If we paid $95,000, we would have to sell the future completely renovated house for $90,770 in 2016 for buying to be the equivalent to renting. It is also possible (although unlikely) we could actually get the house for $85,000. In this scenario, we would have to sell the house in 2016 for $74,453. As I stated earlier, the current assessed value of the house is $110,000. Neither scenario assumes that any of the renovations will add market value. In a scenario where the house sits empty for god knows what reason, carrying costs for the house are low enough where my normal rate of savings/investment/debt repayment would remain unaffected (I would have to give up poker though).

Anyway, considering the extra space we would have from buying, intrinsic benefits, and the allowances for an adverse housing market, we are going to attempt a purchase. However, after working through this exercise, our starting offer is going to be lower (80ish).

Thank you to all who commented. Anyone who wants a copy of the spreadsheet I’m using can email me at [email protected]. It’s my junk email, so spammers are welcome.

#18 wetcoaster on 10.03.10 at 9:50 pm

” With the market entering a period of freefall (over 77% of all agents in Victoria sold nothing last month), realtors were already taking in laundry and piloting school buses.”

That’s funny Garth. “Keep your Helmut on” Pastrick,
(that BC Credit Union economist juggernaut) just came over to Victoria last week and announced the recession never really hit Victoria and the good times are back. Tourism is about to soar he said by spring and home prices will be up 5%.

Now how much more impact could a thousand or more starving real estate agents have on the local economy ? A fair amount I would say. They will have to flog their mutli-condo deals they got sucked into buying to stave off bankruptcy. On top of that you just have to check out the job bank pages these days, the listings are slim and none on anything above mininum wages.

#19 Tragically Hip on 10.03.10 at 9:59 pm

“Hit the brakes”, is all you can say
Conductor says “we’ll save them for another rainy day…

#20 TheBigLebowski on 10.03.10 at 10:02 pm

F, as you recall, was the one who foisted 0% down and 40-year amortizations on the country, helping to turn a 2007 housing blaze into a 2008 inferno. He also hand-picked Carney, whose emergency interest rates escalated the inferno into a 2009 real estate firestorm. Together they took home prices to their highest level, encouraging mindless bidding wars, pumped debt into middle class veins and made the economy 20% dependent on housing.-Garth

And if you really think the sucking into the housing market of the middle class, and then the pin being pulled on their equity was the brain child of these two useful idiots, well I can’t help you. They were given their directions by a much higher source than Harper or the BoC. This is the global takedown , co- ordinated I might add, of the middle class. The only way the dumbed down average person would ever be shaken out of their false reality would be for them to suffer financial pain. Like a Shepard with a cattle prod, our society is being herded into a new monetary system where the bankers who engineered the crisis will soon pose as our saviors. All power financially and politically will be siphoned of the unelected bodies such as the U.N and IMF. We are in the midst of the biggest heist in history and most people will never figure this out. The bankers are preparing us to beg for a solution to this mess once the deflationary depression kicks in. The solution will be global regulatory bodies controlled by them. We are entering a post-democratic society run by “experts” and “think tanks” both unelected. The U.N claims to spread democracy when they or the most undemocratically run organization in the world. The housing market collapse is only one of several tools being used to make us squeal. A new war has always been a part of their plan in the past and will be used again along with fake terror events and global upheavel.

#21 Mean Gene on 10.03.10 at 10:04 pm

Why am I thinking bump on a log???

#22 obert on 10.03.10 at 10:09 pm

This is interesting.. Germany has created a “bad”bank for RE debt. Copycats – we in Canada have had a “bad” bank for years (=CMHC). So other nations will follow the Canadian model! Good luck.

ca.news.finance.yahoo.com/s/03102010/2/biz-finance-germany-s-hypo-real-estate-transfers-239-billion.html

#23 Into The Sunset on 10.03.10 at 10:13 pm

Prof ANON,

Do you really believe rents will drop 5% per year for the next 5 years?

You are on rocky ground with that presumption!!

Think very hard about it!

#24 Duke on 10.03.10 at 10:15 pm

Did you know a cockroach can live 10 days without its head?

As real estate crashes in Canada, boomers will scurry around like headless roaches looking for a place to hide. Unfortunately they won’t be gettin todays price for their roach motels.

#25 GrimWeeper on 10.03.10 at 10:22 pm

Right here in Madcowtown, the unrealtor couple who own this Coach Hell home have dropped their original price of $975,000. to $898,000. in just a few short weeks.

http://www.mls.ca/propertyDetails.aspx?propertyId=9837136&PidKey=-446879026

Just down the street, sits this larger, nicer, recently listed home for $845,000. http://www.mls.ca/propertyDetails.aspx?propertyId=9968613&PidKey=-1077308919

Anyone care to speculate why realtor couple have to keep dropping their asking price, and which of these two properties might sell first? Bingo, but try telling that to delusional realtor couple.

#26 Alan on 10.03.10 at 10:22 pm

Sam

I really appreciate a thought out, intelligent and well written post. When you get around to it, I will be happy to respond just as intelligently.

Is dis post short enuf 4 da space betwn ur earz?

#27 OttawaMike on 10.03.10 at 10:24 pm

With all the immigration / real estate debate on this blog this is an interesting link:
http://www.immigrationreform.ca/index.shtml

Xenophobia or reality?
I’m not sure if I’m 100% sold on their theories but they are certainly thought provoking. Namely that under the current circumstances, Canada does not need the high level of immigration or temp. workers.

They go on to explain that very little investment is made in business and real estate by most of today’s immigrants. The think tank is chaired by a former ambassador and a retired immigration head official.

If further interested the chair does a CBC interview here, scroll down to the Sept 29 show with the immigration reform title:
http://www.cbc.ca/ottawamorning/archives.html

#28 nonplused on 10.03.10 at 10:40 pm

I’m think the inflation side is going to win, maybe not now, but in a few years. Of course house prices will probably still go down and it’ll be 10 years before general price levels will catch up to real estate…

But here is the thing. It doesn’t look like there is any way for western democracies to pay off their debts. In fact, compounding growth rates for public debt now seem to be structural. I just don’t think there is a mathematical way for all the promises to be paid, unless revenues go up, and a lot. The only way revenues are going to go up as much as needed, is through serious inflation. The kind they usually use to repudiate war debts. 10%/year for a decade kind of thing.

Raising taxes won’t be enough, because the rich, Dog bless their greedy little hearts, simply don’t have the money it would take even if we took all their money. A 95% marginal tax rate will not close the budget gap. Austerity won’t work because the unions will go nuts and shut down the country, like we are seeing in Greece. The sort of economic growth required to close the gap seems pretty unlikely in a $80/barrel oil world. The government could try selling assets but that is always a temporary stop gap; sooner or later you run out of assets to sell. So short of a major cheap energy discovery, we’re pretty much screwed. We need inflation. Lots of it.

Of course, in keeping with the old adage popularized by Bill Boner, “people have come to expect what they want, whereas they usually get what they deserve”, so it could be devastating deflation we are looking at, but I doubt it.

So I think inflation it is. We were chatting around a family dinner about the wisdom of spending money like crazy on infrastructure projects like LRT lines and roads, and it came to me that this is actually a pretty prudent thing to do. At least the trains and roads are useful, and they will still be there no matter what happens to the currency. Provided we have anywhere we want or need to go in the future. If we are all out of work, I suppose we’ll just be sitting around in our houses the banks can’t repossess reading real estate blogs like this one or maybe watching videos on YouTube.

Pretty interesting stuff going on in the US right now where courts are blocking foreclosures unless the bank can provide the mortgage deed. Since most of the deeds are buried in multiple Mortgage Backed Securities, this is proving to be difficult to do. I’m not sure what the result will be, but if it turns out that banks cannot foreclose on delinquent loans, we could see private money completely exit the mortgage business. Who in their right mind would lend out money with no recourse if the borrower doesn’t pay? The wise old judges are also floating the idea that banks can’t foreclose unless all available mortgage modification programs have been exhausted. This, of course, generally just delays the inevitable by a year or 2, but it’s still bad news for the banks and MBS market. Oh well, the government underwrites most of the risky mortgages in the US now, and has for a long time in Canada too. Just add the losses to the spiraling debt. No worries! We aren’t going to pay that back either! Why not? Because we can’t. Things that cannot happen, don’t happen. Aliens don’t come abduct people in the night because they have the same speed of light / resource scarcity problems we do, so it isn’t worth the time and money even if it were technically feasible, and deeply indebted nations do not pay the money back in real dollars, because they simple don’t have the time and resources to do it, let alone the inclination. If they did, why would they have gotten so far in to debt in the first place? Nope, it was a Ponzi scheme all along, and sooner or later we will run out of Ponzis.

I think that is also the reason government bonds are yielding so little right now. The governments cannot afford to pay more. So central banks are didling in the market to keep rates low. The US Fed is starting to drop sound bites that they could start buying government debt as a “stimulus measure”. If they are dropping the sound bites, the decision has likely already been made.

#29 Sam on 10.03.10 at 10:40 pm

if they couldn’t make a go of the RE sales career I assume they didn’t make enough money to pay in, and if they haven’t been paying into EI, how can they qualify?

Have things changed so much since I last read about it that you don’t have to pay in at all to get benefits?
___________________________
#11 john m on 10.03.10 at 9:28 pm

spent showing homes (for nothing) until a sale is made-no sale -no payment for hours of work or the cost of advertising.Only about 10% of real estate agents actually make a decent living. Thousands of people are employed in the real estate business

#30 crabby in mcmurray on 10.03.10 at 10:45 pm

Renting in McMurray sucks…..try to the tune of $2600/month for a 2 bedroom apartment. You want a house?…try $3500 or more. With a dog? Forget it. Now if you BUY the company will give you $1500/month towards your mortgage….making the attraction to buying strong due to cash flow considerations….plus no pet harassment. So far …21/2 years I have resisted ….but weakening. It’s either buy or move elsewhere and buy and commute….bad for my carbon footprint but whose counting besides James Cameron. It is different here…not in a good way. Bubble continues. I see no end to it.

#31 Bilbo Bloggins on 10.03.10 at 10:47 pm

If CMHC rules change to 10pct dp, watch for all the
cretins rushing in before the rule change.
Oh how I shall have a good chuckle over their antics.

“The sad truth is the truth is sad.”

#32 Tom on 10.03.10 at 10:54 pm

Olympic Village Buyers trying to back out
http://www.vancouversun.com/Olympic+village+buyers+trying+back/3614575/story.html

#33 jed on 10.03.10 at 10:55 pm

jobs go, investors flee and a bunch of unlucky people are left holding an oversupply of debt-laden hot potatoes.

http://tasmanianrealestatetrouble.blogspot.com/2010/10/seeya.html

#34 Analyst Analyzer on 10.03.10 at 10:55 pm

I don’t really blame the government for the real estate problems. I would blame the banks, and the mortgage specialists, the real estate agents, and CMHC. It’s a greedy system. The government could do more to discourage buyers but I don’t know if any party in power would actually make any difference.

#35 Tom on 10.03.10 at 10:59 pm

Olympic Village Developer Defaults on Loan
http://www.vancouversun.com/business/Vancouver%20Olympic%20Village%20developer%20defaults%20loan%20payment/3605636/story.html

And the incompetent boobs at City Hall are not held accountable. They haven’t even had the decency to apologize for negotiating such stupid terms for the loan and failing to monitor the progress of the project.

#36 Dan in Victoria on 10.03.10 at 11:07 pm

Prof.ANON @16
Good luck with your bid.
Hmmm. 50 years old.
Watch out for ungrounded electrical receptacles,
60 degree wire.
No main breaker.
Cast iron drainage, cast iron potable water pipes.
They clog up by the inside becoming smaller.
Toilet leaking at base,they didn’t have flanges back then.
If copper drainage and potable water look real close at any 90 degree fitting for the copper it can get real thin in the face of the 90.
Single pane windows.
Asbestos in lino
Asbestos wrap on heating pipe/duct work.
Clay drains to septic/ sewer. Cracks and has roots growing up it.
Perimeter drains plugged.
Some of the old plaster/ early drywall had asbestos mixed in I was told by an oldtimer.
Take a sharp thin instrument and jam it into the lower window corners, inside and out the wood / drywall should be hard if its soft problems may be coming.
How many layers of shingles (costs a fortune to dump on the island)
Let us know how the bid goes.

#37 dradak1 on 10.03.10 at 11:14 pm

#1 harrystinson on 10.03.10 at 8:44 pm

Sheeple don’t know the math – for price difference they can buy new car (also get some jobs back – to help struggling industry) cover gas gouging – but continue to PRESS for electrical cars (financially/ecologically wise to make NA/NorthAmerica less dependable of oil) and make new jobs (as said before – replace blacksmith with garage – next step – replace garage with modern electrical garage) just sound’s simple but our ancestors did it – why we shouldn’t (?!?).

#38 Crash Callaway on 10.03.10 at 11:16 pm

“So, 395 houses sold in Victoria last month, where 340,000 people live, 1,330 of whom are real estate agents. It was the worst sales number in 20 years. You do the math”

= 1330 little piggies went to market.
zero little piggies stayed home.
395 had roast beef.
935 had none

#39 Cashman on 10.03.10 at 11:19 pm

#11 john m on 10.03.10 at 9:28 pm

I am a real estate appraiser and I have seen the prices go up since 2001 to now. I have watched in jaw dropping awe the meteoric rise of real estate and it scares me. However, these high prices can’t last forever. You were right about the long hours and expenses. A friend of mine who is a former real estate agent said when he sat down and crunched the numbers, he was better off working at GM on the line than selling houses (back in the 80’s). Now as my membership comes up for renewal and errors and omissions insurance comes due in January, I am running the numbers and it doesn’t look pretty. So, good bye real estate industry, it’s been fun, learned a lot,sold my house in 2008 and thanks for the memories.

#40 dradak1 on 10.03.10 at 11:29 pm

#3 Sam on 10.03.10 at 8:53 pm

You’re right if you have wand to stop jobs disappearing.
Good luck with that.

#41 dradak1 on 10.03.10 at 11:31 pm

#4 squidly77 on 10.03.10 at 9:04 pm

People without jobs.

(sorry squid for sarcasm)

#42 Devore on 10.03.10 at 11:46 pm

#11 john m

Thousands of people are employed in the real estate business country wide many will throw in the towel with no expertise in other fields and further burden our UI coffers

Correct me if I’m wrong, but realtors are considered self-employed, and get no UI.

#43 VancouverGoinUP on 10.03.10 at 11:51 pm

Prof An
*****
Your decision appears to be a no brainer based on you being able to be comfortable carrying the mortgage and living in the house for 5 years. Your rent will be 84 grand!!! and the house is 95,000? The true cost of the house will be based on your partner (thrifty or a spender!) If the house dropped 30 plus percent you would still be ahead and never have to worry about being kicked out of your house. Your rent scenario is a huge ripoff (unless you are planning on living there for a very short time). People in Vancouver can only dream of such real estate deals.
**
As regulars know, I have an imminent rent vs. buy decision. Essentially, the choice is rent at $1,200 (including storage space for camper and boat) or purchase a dirty and ugly but structurally sound 50 year old fixer upper for around $95,000. Current assessed value of the house is $110,000

#44 45north on 10.04.10 at 12:02 am

Dark Sad Person: Cameroni on 10.03.10 at 1:52 am

Where I differ in opinion with a couple posters here is that I do not actually hope for social breakdown or calamity nor look forward to the extremely negative outcomes that come hitched with “end of the world” theorizing.

a couple of posters: seems kind of vague

#45 Love this Blog on 10.04.10 at 12:14 am

Well, if it’s any consolation, I got my “bunker shit” together. Shot a mulie doe Friday and another tonight. Shot tonight’s (with my 13 year old at my side, I’m proud to say) at around 6:30. Had it gutted, home, skinned, deboned and in the freezer as a bag of meat by 9:10. Let’s ee a Vancouver or Toronto boy do that. To the Sask boys……………………..sorry it took so long, (almost 3 hours) to reduce that doe to a bag of meat, but I was trying to explain to my son how to properly gut, and that takes abit of time.
True stroy blog dogs, when the SHTF, I’ll be just fine…………….

#46 Chaos on 10.04.10 at 12:26 am

MLS

Another monopoly busted…

Now if we could only get rid of the BoC.

#47 Martian Tom on 10.04.10 at 12:33 am

I just landed here on Earth from the planet Mars.

Let me get this straight … Boomers bought brand new beautiful houses in Vancouver for $80,000 decades ago.

They slept in them for years, cooked thousands of meals in them, brought their newborns home to them? Their young kids bashed the walls, threw up on the carpets, stunk up the bedrooms with untold numbers of dirty diapers? Their teenage kids partied in the houses, parked their muddy sports gear inside? Their dogs clawed at the doors and messed on the floors? And the Boomers neglected the sagging beams, dry rot, worn out hardware, cracking siding, inefficient furnaces, broken-seal windows, and weathered roof?

And now 30 years later after they’ve used and abused that house, getting every penny of the original cost out of it in terms of usage, they want to turn around and sell it to YOU for $800,000?

Are you house buyers on Earth completely nuts???

#48 dark sad person on 10.04.10 at 12:39 am

#16 Prof. ANON on 10.03.10 at 9:45 pm

The relevant question is: what price would we have to sell the house for in five years to “break even” compared to renting?

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

The rent and sell price is not all that will float and vary-
Also consider $ value (buying power today vs 5 years out)

If deflation is the way forward and say for example-less purchasing power amongst the populace-caused by unemployment/decreasing wages = lack of affordability-should drive most all prices down and if for eg: the $ gains another 20% in buying power vs goods and services–a lower selling price can be bolstered by a gain in buying power-
So for eg: if you bought for 80K today and sold the home for 20% less–64K–in 5 years-your net loss is zero in relation to $ buying power-
This is possible in deflation–

#49 Onemorthing on 10.04.10 at 12:40 am

I think most of the readers that follow Garth regularly can agree with what is going on today but just dont fathom what will occur over the next 5 years not just in Canada but around the globe.

Quite simply, the US is done spending, housing will not find a bottom until unemployment does and the USD will not be able to afford anything anyhow. Deadly for China!

The CAD will never be devalued fast enough (as it is already to high to promote GDP), alongside Canada’s housing bubble bursting and job failure’s, if you choose Canada as your home moving forward, life will be the worst it ever has been.

Global Trade wars are upon us now, everyone will point fingers at other nations for the imbalance and it is at this point all hell breaks loose and where you live will be key for cost of living, safety and GDP.

Bubbles left to pop…Canada, Australia, China, Hong Kong Kong, Singapore. Corrections to occur everywhere else.

Most recent bubble in stock market is just that, another bubble!

#50 The Original Dave on 10.04.10 at 12:40 am

I never really considered down payment requirements being brought to 10% and terms being 25 years again. Surely, something like that would clobber Canada. What are the chances something like this will happen whether it be this week or in 2 years?

I’d love to hear opinions or rationale why this would or wouldn’t transpire.

#51 Devil's Advocate on 10.04.10 at 12:46 am

Garth;

On the matter between the Competition Bureau and CREA:

Yours is but conjecture and dissemination of misinformation intended only to fan the flames of your sensationalist blog?

I would suggest a more professional approach might be to wait and see exactly what is to be ratified first before misleading your readership.

Or do you know something you ought not? In which case you might then be guilty of something akin to insider trading that could backfire and undo the good work of that party in the dispute you most align yourself with.

Do your journalistic background more justice and dig deeper before you jump to conclusion. Better yet wait for the outcome of the procedural process currently underway as the assumptions you offer prior to the conclusion of that process are nothing more than speculation.

Don’t be so like a child on Christmas Day who so excited pees his pants and spills the beans that he snuck a peak at his gift that Christmas Eve.

Have you indeed snuck a peek? Do you know something we do not? Will you allow this post to be posted?

#52 Victoria Damsel In Distress on 10.04.10 at 12:56 am

Hi Garth and the Blog Pound,

I’ve been reading your blog for quite some time now and I have to admit it’s becoming a must read for me.

Here’s my dilemma and I’m hoping either you or your readers may be able to provide some insight. I just recently turned 30 and had to move to Calgary. I was planning on buying a house, but thanks to the advice of Garth and his followers I decided to hold off for now.

Over the last ten years I have saved approximately 20K per year with the hopes of finally buying a dream home which would not drown me with monthly payments. I now have a little over 200K saved but don’t really know what to do with it. I’m not a big markets person, nor am I into gold. I like to play it safe, especially with things I don’t know much about, and I usually just have my money in a GIC. My biggest worry is that inflation will eat away at my savings and reduce purchasing power. This is especially painful for me because I have worked really hard, sometimes carrying multiple jobs, to save my money.

I went into a bank and the advisor there told me that my best bet right now would be Real Return Bonds. I’ve never heard them being talked about on this blog, or anywhere else for that matter. He thinks there is going to be an inflationary period and advised me to protect my savings with the following:

http://www.etfs.bmo.com/knowledge-centre/investing-strategies/real-return-bonds/

Is this a good and safe place to keep my money? Is there anything else I could do that is fairly safe?

Thanks!!

#53 Cameroni on 10.04.10 at 12:56 am

@ #79 dark sad person on 10.01.10 at 4:21 pm

Let’s define-Financial Collapse-

Why do you see it as a one eyed monster?

I see it as Salvation-

What will change?

Current Politicians will be thrown out–
Picture Mussolini hanging by his ankles (just kidden)x

The Market will find equilibrium-

Debt will be non existent–

Deflation will end-

Gold will be reinstated-as base money–
——————————————————–

Alright Dark Sad Person, I have reprinted just one of your offending remarks. According to your own words, you think financial collapse is “salvation”. Give us a break, OK.

Discussion over. Now take a hike.

#54 Joe on 10.04.10 at 12:59 am

#2 …. how is a mortgage broker destroying people’s lives ??? By arranging the financing these bonehead buyers want so bad??? They’re just doing their job and making a living…Don’t blame them dude….blame the realtors and the government…

#55 Cameroni on 10.04.10 at 1:17 am

@ 13 Dark sad person wrote:

“Nowhere -have I read on this blog-from “anyone” that they are “hoping for an economic collapse–
No one–No where–Ever–
Go it?
Now the ball is in your court-to back up these words you say”

——————————————————-

Well DSP, you are right about one thing. Nobody said anything about “economic” collapse. Not even me. I thought you were a bright person. The exact terminology that is being debated is your use of the words “financial collapse”.

See the comments in my previous post (and your own words in post #13 too). So the balls in my court is it?

Well I backed up my words and proved that you don’t even read what others write never mind remember what you said in your own prior posts.

I’d hate to be you.

#56 Patz on 10.04.10 at 1:25 am

It is ironic that just as the market is about to tank FSBOs are going to be able to list on MLS. No question this is the proprietary tool—“the mother of all databases”—that has allowed realtors to gouge their clients all these years. FSBOs have found to their dismay that they just couldn’t get their homes seen by enough people, especially if the market wasn’t hot. Many reluctantly got back in bed with their agents and paid them for a screwing.

But, and it’s a big but, FSBOs are notoriously crummy sellers. They price too high, they whine if people don’t love their lace curtains, stains and all. If they do manage to get a good offer, they run it off the rails for any number of petty reasons. Just being on MLS won’t even come close to “making” a sale, especially selling into the kinds of headwinds heading our way.

I think some smart realtors (oxymoron?) might get into the business of advising/negotiating for FSBOs at a reduced price of course. But then they would have to charge fees (regardless of sale or not) on a model like that and I doubt potential sellers would spend any money up front.

It will only be a sideshow in the tumble to come but an interesting one.

#57 John on 10.04.10 at 1:25 am

Still no Edmonton, was it something we said?

#58 Thetruth on 10.04.10 at 2:07 am

regarding the real estate changes … some people think that the competition bureau did not go far enough…in other words they blinked first.

CREA may pull the consumer realtor.ca site offline. If that happens, then how will a buyer possibly know if a home listed is via a listing agent (pay 2.5% more) or directly by a seller ??? ???? Buyers would have to go through an agent …

Me thinks nothing is going to change.

True change would have entailed allowing mls data to be used by third parties. Then Joe sixpack could look online himself to find a house listed directy by a seller and negotiate directly thereby bypassing a realtor.

Not happening folks. Realtors will still be part of the equation for at leat the next 10 years. (duration of agreement)

or am i missing something??

#59 Tony on 10.04.10 at 2:15 am

It’s high time something is finally done to these useless sods known as real estate agents. Finally the old adage when something is too good to be true it usually is. These real estate agents will finally learn this, something they should’ve learned a long, long time ago. If they hadn’t have been greedy and took one percent like the real estate agents in Europe maybe their future would still be intact. It’s nice to see their greed finally caught up with them.

#60 Numbers. on 10.04.10 at 2:37 am

UPDATE: First FSBO advertising seen now on MLS? Garth, do I win a prize for finding the first FSBO listing on the MLS? haha.

WELIST ALBERTA = http://www.welist.com/

It does appear we now have the first FSBO listings showing up on the MLS!

From the Welist.com website Contact Us Page:

618 – 1Ave N.E.
Calgary, Alberta
T2E-0B6

From the MLS listing:

WELIST ALBERTA
618 1 AVENUE N.E.
CALGARY, Alberta T2E 0B6

Telephone: 403-333-5778
Fax: 403-592-2128

#61 warptweet on 10.04.10 at 3:05 am

My wife and I were in the Shanghai Airport and she ordered a Coke. It came flat. I said to her, I wonder why there is no bubbles in your Coke?” She replied “They need all the bubbles for the Chinese real estate market”.
I have a copy of the China Daily newspaper for Sept. 30. The leader headline on the front page says TOUGHER MEASURES TO COOL PROPERTY.
The Sub headlines say 30% down for first time home buyers and 50% down for the second property.
All this after last April when they lifted the down payment from 10% to 20% and restricted people from buying property in cities where they do not have an identity card for. (you must live in the city where you buy in most cases.)
The Chinese have no experience with a Real Estate bubble , so no fear them and us Canadians have the memories of a housefly on crack.

#62 JM in London on 10.04.10 at 3:15 am

#13 Dark Sad Person

Once again you’re posting claiming debate skills when over 1/2 of your “facts”‘are links to fringe conjecture to which your best rebuttal is “disprove the facts I present”
in which they are neither fact nor truth. The term is pseudo intellectualism.

I know (like many on the board) that all you’re attempting to do is have some sort of interaction and desperately attempting to be heard as “right”. Your caustic quips are very likely the reason places such as this are the only place you can kid yourself into thinking your alarmist and fringe views have any impact or matter.

Garth allowing you to post doesn’t equal you
being right or mean you have an ability to debate.

#63 Brian1 on 10.04.10 at 4:54 am

I wonder if this blog is for real sometimes. I discover Al Sinclair blatenly admitting that the R.E. industry is manipulating prices, yet not one commentator acknowledges it. No one see’s it as important. everyone is more preoccupied with gold than R.E. These sophisticated ones should have seen it. It is the same strategy that Obama uses with forecloures. He holds them off the market to keep the prices up.
These goldbugs are not interested in R.E. They only are waiting to bring you down. Why make it easy for them?
You have demonstrated your displeasure with them many times. They use your respect for free speech as a fear tactic. For one minute do you think they would return the favor? Remember Harper & F. They did not hesitate to deny you. Sometimes a leader has to be ruthless. Your enemies are waiting. Start cutting them though you risk making the blog boring.

#64 David B on 10.04.10 at 5:59 am

Did I ever mention this won’t end well?

YES!

And not once Sir, several times and many here listned others are still on the 36% Train to Bluff’s Cliff where the tracks are out!

Sad news is the MSM is selling the peanuts and popcorn and Mr. H & F & C are passed out free drink tickets but are home safe and sound …. writing up excuses.

#65 DARLENE on 10.04.10 at 6:54 am

Prof Anon, I totally understand the desire to buy vs rent. So my answer is buy. The only advice I have for you, is that when you renovate make sure all your renovations are carefully thought through . Make sure that whatever you do will make it appealing to the first time buyer or possibly a good renter if all fails.

On a side note I do question your choice of fridge. Matching colour of appliances will help to sell or rent. It’s one thing being frugal but this choice is bad. You could easily buy a used fridge from this century that is way more energy efficient and white to go with your stove. Please remember when you buy you are now responsible for all utility costs. The couple of hundred that you will pay now for the fridge will save you hundreds over the years in utility costs.

#66 Moneta on 10.04.10 at 6:59 am

It is the same strategy that Obama uses with forecloures. He holds them off the market to keep the prices up.
————-
It’s not necessarily to keep prices up. He also holds them off because there is a bottleneck.

The courts are overwhelmed. The servicers are too and banks are already cheating people out of their paid off home (cases in Florida).

The system was created to get growth, not foreclosures and debt repayment. The social infrastructure is not there to deal with a change.

Imagine the breakdown if suddenly more than 14 million foreclosures had to be settled ast once.

#67 Moneta on 10.04.10 at 7:02 am

rosie on 10.03.10 at 7:01 pm
Any comments on Gov’t Canada Real Return Bonds. Curiosity demands answers.
————–
I’m not expecting CPI numbers to reflect true inflation.

#68 fancy_pants on 10.04.10 at 7:09 am

I feel the mood changing. some grumpy folks coming out of the woodwork.

Grumpy 1: “Let’s attack the messenger because he is making terrible things happen in the RE market.”

Grumpy2: “Maybe if he stops saying these things it won’t happen. I’ll take down his site”

grumpy and stupid. Hey grumpies, why don’t you start your own site about how great RE is doing and find your own group of followers rather than vent your insecurities on someone else’s site.

That’s like blogging on some religious site about how wrong their religion is. pi$$ off. you don’t like what is being said go elsewhere.

#69 T.O. Bubble Boy on 10.04.10 at 7:10 am

@ #34 Analyst Analyzer on 10.03.10 at 10:55 pm

“I don’t really blame the government for the real estate problems. I would blame the banks, and the mortgage specialists, the real estate agents, and CMHC.

You do realize that CMHC is a government organization, right? And that Mr. F sets the rules for mortgages (you know, the ones that alllowed for 0%/40-yr and still 5%/35-yr)?

The banks take advantage of the rules that are set in front of them.

And – realtors are sales people – they will sell what you give them… the issue isn’t that houses are being sold, it is that the amount of mortgage credit given to greater fools has increased at a ridiculous rate for 5-10 years, which combined with artificially low interest rates (again, controlled by a government entity) made the market the ridiculous ponzi scheme that it is today.

#70 john m on 10.04.10 at 7:14 am

F.S.B.O.—-now this will be interesting!M.L.S. books full of private for sales posted by a whole lot of “greater fools” who paid too much,have negative equity,little or no knowledge of the real estate profession and are hoping to save money and get out quick. All i can say is they better have a lawyer(before they sign anything),have a hell of a lot of luck and patience and some cash left over for stress therapy.The potential for disaster in this scenario I.M.O. will make 6% seem like pocket change :-)………….this will not end well

#71 LHHW on 10.04.10 at 7:32 am

The competition board and CREA case will be interesting to watch unfold. Don’t know for certain what impact on values it will have, but it definatley will weed out a good number of them.

It’s sad that the bulk of the impact will be felt by the middle class who have purchased more house and taken on more debt than they needed to. Why is our society so fixated on outward expressions of wealth (perceived wealth) through the consumption of material goods. When everyone ends up having a granite counter top it really doesn’t mean much anymore…it’s all just stuff.

#72 Buyright on 10.04.10 at 7:33 am

Check this out

http://www.bloomberg.com/news/2010-09-26/chinese-property-bust-is-morphing-into-a-slow-leak-commentary-by-andy-xie.html

#73 David B on 10.04.10 at 7:43 am

Top Business Stories
Why Jim Flaherty is expected to boost his revenue forecast
Michael Babad | Columnist profile | E-mail
Globe and Mail Update
Published Monday, Oct. 04, 2010 7:24AM EDT
Last updated Monday, Oct. 04, 2010 8:09AM EDT

So there ya go ….. buy buy buy, shop till you drop and rack up dem dare credit cards ….things are better than even Mr. Flaherty could have hoped for eh?

Really Mr. Flaherty ….job #’s south of the border about to take another dip …. Yanks fed up with “Free Trade” and housing forecloseures continue to climb. And the EU is in trouble once again

Sounds like good news all-a-round.

#74 robert james on 10.04.10 at 7:47 am

The “Experts” are predicting a 2011 house price correction for Vancouver… Who would have thunk it ?? LOL http://realestatetalks.com/viewtopic.php?f=8&t=58499

#75 Andrew toronto on 10.04.10 at 7:55 am

Hi Garth couple of Questions regarding the breakup of the MLS , will agents still have special privelges has they do now if knowing whats coming out a few days before the general public knows and how does this affect a buyer like us/me , say we want to get services of a relaestate agent, will he be charging the buyer for his services now , where by in the past the seller paid the agent of the buyer ..or just not enterain his clients to those listings?

#76 Gord In Vancouver on 10.04.10 at 8:31 am

#2 squidly77

Real estate speculators They are the destroyers of the Canadian family and the Canadian way of life.

#77 Hamilton Guy on 10.04.10 at 8:41 am

Am cynical about the future of the North American middle class – and as I have been unable to make it into the ruling class am somewhat skeptical about the results of the plans our rulers have for the rest of us.

What is frightening is the fact that the rulers appear to be so intent on gathering all the wealth for themselves that they have not considered the possibility of the revolution of the masses when the masses have no jobs and nothing but a sea of foreign goods and food stuffs (likely filled with strong pesticide) surrounding them – all of which goods and foodstuffs the masses will not find affordable (let alone houses) as they have no jobs because the rulers shipped the jobs out of North America.

Somehow the rulers forgot the lesson that Henry Ford taught – pay your workers well and your economy grows and prospers. Keep it all for yourself and you have no economy because there is nothing for your workers.

Of course the rulers proactive, self protective measure is to pay the police (and others who are part of the mandarin class) well and have a gun registry so the rulers can seize the weapons before the revolution starts and beat the heck out of the population with a well paid vicious(?) police force (RCMP seems to give numerous examples of the police attitude towards members of the troubled and downtrodden public). Strikingly our municipal police forces in Ontario are moving towards hiring calm intelligent rational officers – so the rulers might be disappointed in Ontario.

While they gather the real bucks and wealth, the rulers create the illusion among the masses that the masses have wealth through low unsustainable interest rates which allow the masses to spend more than the masses can afford on goods and houses that sell for inflated prices.

Talk about using leverage to shoot yourself in the head! It is almost like the famous cartoon of old London in the days of the two penny gin. Everyone is or has been drunk on easy money – gleefully leaning on the walls of their new unaffordable asset while they have another swill of easy money.

What saves this?? – wild inflation? Realization that free trade is not a one way street with currency manipulation being used to create incredible unbalanced advantages? Fortress North America? or just fortress CanUSA? Free Trade is not fair trade. It is just another smoke and mirror ways (along with almost non existent interest rates) of trying to screw the masses by the rulers and the North American and European masses are being well screwed .

This ain’t easy –

This housing bubble thing is just the tip of the real iceberg – Can we all not work for the government with high wages and golden non stop benefits, vacation and pension plans? can we? please?

thank goodness we have natural resources to sell to the new middle class nations of Asia who seem to have recently read about Henry Ford’s economic miracle.

Garth you have to lead us out of this!

#78 Two cents on 10.04.10 at 8:49 am

Just my two cents here… And probably not even worth that.

Being a politician is tough (I suspect) and you will literally never make everyone happy. I think a lot of the decisions made by the current and previous government have been ham-fisted, but it doesn’t change reality.

There is no politician in the country on any party of any stripe that would do the “right” thing if it negatively affects 70% of the population (homeowners).

The bottom line is people will simply see “my house price crashed” at the same time the gov’t “made it harder to buy a house”, and if you think that the CREA or TREB or whoever wouldn’t make a giant media circus of any changes that make financing more difficult just because it was the “right” thing to do, then you’re living on another planet.

Granted, Flaherty and the conservatives painted themselves into this corner, and it was a stupid move. But expecting them to “do the right thing” now and raise down payments up to 10%… Well, like “G” said, it ain’t gonna happen.

And you can bet your butt that it wouldn’t happen if the Liberals or NDP were in power either. This type of decision making is an unfortunate side effect of democracy.

#79 john m on 10.04.10 at 8:50 am

#2 squidly77 on 10.03.10 at 8:50 pm

realtors (no caps deserved)

They are the destroyers of the Canadian family and the Canadian way of life……………………..<<<<Anyone who makes a signed offer on anything has no one to blame but themselves. If anyone is to blame it is H.F.C. and company who made it possible for unqualified people to purchase homes they really can not afford..and filled the news waves with dishonest propaganda telling us "things were different here".Everyone is responsible for their own actions no matter how stupid they may be :-)

#80 El Rojo on 10.04.10 at 9:02 am

#45 Your right, because a “Vancouver” boy would have Hung his doe for awhile before turning it into a “bag of meat” Have fun eating your Lacrosse ball when the SHTF.

A bit off blog topic but worthy of comment.

#81 T.O. Bubble Boy on 10.04.10 at 9:05 am

@ #58 Thetruth:

That is a tricky situation for the CREA… do they make realtor.ca available by subscription only (or some other pay-for-use concept)?

The way I see it, realtor.ca/mls.ca sites are like free marketing for them — giving free house porn to the masses, and then you get more attendance at open houses etc.

However, since there isn’t a competing site out there yet (at least not with critical mass), they will have to debate if the dollars from subscriptions would be worth pissing off thousands of potential customers.

Another thought: if the various RE associations won’t be in control of as many listings as in the past, does this mean that their various statistical reports become less and less meaningful? In other words, if sites like propertyguys.com hold say 50% of listings at some point in the future, are the realtor.ca stats even a true measure of the market?

#82 dark sad person on 10.04.10 at 9:34 am

#53 Cameroni on 10.04.10 at 12:56 am
@ #79 dark sad person on 10.01.10 at 4:21 pm

Let’s define-Financial Collapse-

Why do you see it as a one eyed monster?

I see it as Salvation-

What will change?

Current Politicians will be thrown out–
Picture Mussolini hanging by his ankles (just kidden)x

The Market will find equilibrium-

Debt will be non existent–

Deflation will end-

Gold will be reinstated-as base money–
——————————————————–

Alright Dark Sad Person, I have reprinted just one of your offending remarks. According to your own words, you think financial collapse is “salvation”. Give us a break, OK.

Discussion over. Now take a hike

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

As i pointed out Cameroni -you take out of context to try and make mileage-for your little vendetta-

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

Here it is in full–
*********

#172 Lianne on 10.01.10 at 3:18 pm
“I have a lot of confidence that these guys know what the heck they’re doing” – Garth

Well if it is the intention of the Fed to impoverish American citizens while ensuring the financial health of the big banks and the wealthy top 1% of the population, then I guess that they do know “what the heck they’re doing”.

Just wondered what qualified you as a monetary policy wonk. — Garth

My qualifications? I can read.

The Fed hardly impoverished citizens whose own greed and financial myopia drove them into a housing and credit frenzy. As for saving the banking system, you may disagree with the inequities of the actions, but financial collapse was not (and is not) an option. Central banks have much to atone for, as I have said for quite a while, but these are not among their sins. — Garth

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

Let’s define-Financial Collapse-

Why do you see it at a one eyed monster?

I see it as Salvation-

What will change?

Current Politicians will be thrown out–
Picture Mussolini hanging by his ankles (just kidden)x

The Market will find equilibrium-

Debt will be non existent–

Deflation will end-

Gold will be reinstated-as base money–

Society will prevail-after some hardship-only in a more sensible manner-
There will be hardship on this current path anyhow–
(could be a bit of upheaval first)

bit of an antidote-
Talked with a blogger-an American who was living in Argentina-during its default/currency crises-blow up-
He lives in the west central area Mendoza Province-
He travels there quite a bit-
He said-if he hadn’t been aware of the fact-by IT-he would never have known-because nothing changed-
Sure-there were problems in Buenos Aires but it never lasted too long-because People improvised and the Market worked-merchandise flowed-without-Government control–

Of course-Government was returned to power and the IMF (of course) stepped in and now they are heading towards it again–IN DEBT–to the IMF–

Iceland is going through a hardship-
They told the IMF and their Politicians and World Bankers to go to hell-
They are enduring and improvising-
Their PM–is facing charges–

What the hell is there not to like about Default?

Maybe something to think about and–fear less–
*************

Do you see anything in my words that suggest dogs and cats will start interbreeding or any of the other “fabrications” you made to the post?

Did G ever define what he meant by-financial collapse?

Only you did-
My point was to a debt default-which as i pointed out-in the link provided prior-by Rothbard-who Von Mises once described as “my most brilliant student”
also agrees and lays out the foundation for an orderly default-

I stand behind this method-rather then saddling the next 3 generations with the debt payment to Bankers-

If you had read the link and read this conversation in whole-
You could not have come up-with your accusations-unless that was your intent-and it was–

#83 Tailuga on 10.04.10 at 9:36 am

Hi Garth, I have property listed for sale on a small island off the coast of BC. It’s been up for sale for nine months now. Some interest. No offers.

If I stay listed under the old 6/3% MLS system, don’t you think it would be like putting up a neon sign that says I’m a motivated buyer thereby encouraging a lowball offer? My thinking is that after the MLS listings are opened up for FSBO’s to advertise on for a flat rate and if I cancel the current MLS listing and post a FSBO listing on MLS, the local realtors will ignore the listing unless they’re desperate.

#84 Vlad the Impaler on 10.04.10 at 9:36 am

Garth, I think we need to make sure to realize that previous recessions were not like the one we have now.

Comparing the 1982 recession to now is like comparing apples to oranges, isn’t it?

As world economies continue to falter, central banks are running out of options and protectionism grows more appealing

#85 Pat on 10.04.10 at 9:44 am

@ #17 Prof. ANON,

The relevant question for you, imho, is whether you want to spend your weekends painting and touring Home Depot, Rona etc.

Do you want me to tell you the difference between a mediocre professor in an average university and somebody who is at the top of his/her field? One does not get there by brandishing a paint brush, junior.

#86 David B on 10.04.10 at 9:48 am

Have some Tim Hortons friends who have been building/fixing homes for many years along with their full time jobs. Finished a beautiful home last year have now sold it almost overnight now plan on moving to a new local apartment and will do ” One more Time” ….. me things this will be interesting for a host of reasons.

#87 dark sad person on 10.04.10 at 9:51 am

#62 JM in London on 10.04.10 at 3:15 am

#13 Dark Sad Person

Once again you’re posting claiming debate skills when over 1/2 of your “facts”‘are links to fringe conjecture to which your best rebuttal is “disprove the facts I present”
in which they are neither fact nor truth. The term is pseudo intellectualism.

I know (like many on the board) that all you’re attempting to do is have some sort of interaction and desperately attempting to be heard as “right”. Your caustic quips are very likely the reason places such as this are the only place you can kid yourself into thinking your alarmist and fringe views have any impact or matter–

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

JM–

I think you’re still smarting from the last severe asskicking i gave you-with facts and data-

Point out any “fringe site” i used–
I mostly use Fed or Cooperate data–
In fact-it is exactly what i used to embarrass you-
You could not disprove my claim-other then claiming i had to be smoking dope–
Sorry to have rained on your little parade-
Mr. RE Mortgage Broker-
Scum of the earth-reading this site and continuing with your slime job of signing widows onto a lifetime of debt and saying–
“I got the mortgage cheaper for them-then if they had dealt with the Bank broker”
lol

#88 positive on 10.04.10 at 10:02 am

I DONT THINK THIS WILL HAPPEN EVERYWHERE! VANCOUVER AND ONTARIO ARE ARE REALLY OVER PRICED. HOWEVER ONTARIO MIGRATION IS VERY HIGH AND IS ALWAYS IN DEMAND FOR PLACES TO LIVE. IT IS VERY HARD TO FIND A DECENT PLACE TO RENT, MOST OF THEM ARE RAT HOLES. NO EVERY INMIGRANT FAMILY IS WEALTHY ENOUGH TO STAR BUYING HOUSES BUT I AM SEEING LARGE MEMBERS OF A FAMILY LIVING INTO THE SAME ROOF. THEY SHARE EXPENSES, THEY ARE NOT VISITING/TRAVELING TO THEIR COUNTRIES FOR MANY YEARS, PEOPLE ARE EATING BEANS AND RICE EVERYDAY, PEOPLE ARE KEEPING THEIR YUNK CARS FOR MANY MORE YEARS, PEOPLE ARE WORKING 17-18 HOURS IN LOW PAY JOBS, PEOPLE ARE DOING WATH EVER IT TAKES TO KEEP PAYING THE HIGH PRICE. THE FUNDAMENTALS OF THE ECONOMY POINTS TO A CRASH IN THE HOUSE MARKET BUT I THINK MORE IN A 5-10% MAXIMUN ADJUSTMENT. NOW, WHO CARES ABOUT LOSING 10% OF THE VALUE OF YOUR HOUSE IF YOU GAING THAT IN THE LAST YEAR?….IN VAUGHN WHERE I LIVE, 0% DROP IN PRICES. HOUSES ARE NOT BEEN SOLD FAST, BUT NOBODY IS LOWERING PRICES YET.

#89 junius on 10.04.10 at 10:16 am

Devil’s Advocate Resurrection,

Will the sequel be in 3-D? Will we need glasses?

#90 ken on 10.04.10 at 10:18 am

You really tell it like it is, this is one of your best.

#91 Jeff Smith on 10.04.10 at 10:18 am

>#23 Into The Sunset on 10.03.10 at 10:13 pm
>Prof ANON,
>Do you really believe rents will drop 5% per year for the
>next 5 years?
>You are on rocky ground with that presumption!!
>Think very hard about it!

My rents went up again this year. :(

#92 Devil's Advocate on 10.04.10 at 10:20 am

I have a proposition I offer my clients who wish to negotiate my commission down. I tell them here is what I propose we do: I will show you my personal tax notice of assessment and you me yours. If your taxable income is less than mine I will reduce my commission by an equal percent – ie if your taxable income is 50% that of mine I will reduce my commission by 50%. On the other hand if your taxable income is greater than mine then we agree that my commission shall be increased by a respective percent more. Not surprising none have taken me up on it.

#93 eddy on 10.04.10 at 10:22 am

chaos said “MLS

Another monopoly busted…”

i don’t agree that it was a monopoly. it’s a proprietary network with negotiable rates. Harper (big supporter of cartels) is out of control. his quasi court tribunal of paid cronies reminds me of Nuremberg. it’s a message that ‘fair business’ will be defined by the conservative party of Canada.

example:
google maps, google street view, google earth etc.

to add houses for sale over that system is very easy.

add yahoo, Microsoft, you get the idea. within days, any number of rival systems can be up and running and blow mls into the dark ages

today it’s the ‘proprietary rights’ or ‘intellectual property ownership’ of Realtors, tomorrow it will be your rights getting flushed down Harper’s toilet

#94 Birdy on 10.04.10 at 10:26 am

My dear Canadian brethren, greetings from the land of warm beer and cold women (England).

Have been a regular visitor to this esteemed blog for a year or so now, having purchased a townhome in Canmore AB in 2004, before selling it last year for a mere 90% profit. I was convinced at the time that it would not end well, though I do miss my lovely granite counter tops and huge management fees.

They were in absolute denial about the impending fall, I genuinely snigger when you say ‘it’s different here’ as I used to remark to the current Mrs Birdy how often we heard that phrase from the locals.

Anyway, a slight fall for you here. Had an excited realtor (or admin assistant as we call them here) call me today with the following listing. Was a snip at $$571,900 but as they were feeling particularly generous they were going to drop the price to $395,900.

http://www.realtor.ca/propertyDetails.aspx?propertyId=9755667&PidKey=-684153578

#95 nsqt on 10.04.10 at 10:30 am

The times they are a changin…..Bob Dylan

Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone
If your time to you
Is worth savin’
Then you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’…..

Garth: I am looking forward to your session in Wolfville tomorrow evening…….safe journey to NS.

#96 Jeff Smith on 10.04.10 at 10:33 am

>#46 Chaos on 10.04.10 at 12:26 am
>MLS
>Another monopoly busted…
>Now if we could only get rid of the BoC.

Banks are gonna be so profitable next little while when the sheeple start handing their keys (jingle) to the CMHC. And every time that happens the CMHC write a nice check to a responsible canadian bank. Actually come to think of it Canadian banks are extremely responsible, nothing wrong with entering a winning deal every time. It’s the taxpayer who are screwed. This is widening of the rich and poor at it’s finest. The poor becomes poorer because of staggering debt load and taxes, the rich becomes richer because of all that bonuses and high salary.

I should have gotten a business degree and get a job at the banks, think of all the fat big bonus you will get every year.

#97 Mtl RE Observations on 10.04.10 at 10:35 am

Question for the crowd: How can I can find out what properties have been sold in Montreal and their sale price? Is there an online resource open to the public? Thx.

#98 Alberta Ed on 10.04.10 at 10:38 am

“Was a snip at $$571,900 but as they were feeling particularly generous they were going to drop the price to $395,900.”

Wow! Only 250% overpriced! You can fire a cannon inside most Canmore luxo condo developments without hitting anything except overpriced RE. At a third the new price, it might be a buy.

#99 junius on 10.04.10 at 10:48 am

#166 Cameroni (yesterday),

Thanks for that. The doomers are so sanctimonius on this Blog. Apart from being outright rude.

#100 bill on 10.04.10 at 10:49 am

Hi sunset
while i cant say what rent decreases our company envisions if any [ at this time] , the dearth of ‘good’ renters was very obvious over the summer. If a professor from Italy hadnt rented the ” bad bachelor ” suite it would ,perhaps be still empty.
where once we could count on as many as 20 or 30 potential tenants , now we get about 4 or 5 .
there was the usual flurry of students in late august but we arnt seeing the numbers we have been accustomed to.
so ,while i dont know how prof anon figures will pan out , we are losing tenants to the mortgage holders ,I am pretty sure and if it gets bad enough we will have to entice them in in some way or another.

#101 junius on 10.04.10 at 10:55 am

#91 Devil’s Advocate,

You said,”On the other hand if your taxable income is greater than mine then we agree that my commission shall be increased by a respective percent more.”

This is good advice for other realtors. Considering where the market is headed.

Isn’t the point that once the commission structure is open clients will neogtiate this down prior to signing on with you?

#102 JB on 10.04.10 at 11:04 am

Hey Garth,
How about coming to Edmonton?

#103 Dodged-A-Bullit-in Alberta on 10.04.10 at 11:21 am

Greetings: I see that James H Kunstler is in fine form this morning and real estate is his topic:

http://kunstler.com/blog/2010/10/posting-a-little-late-this-morning.html#more

#104 Republic_of_Western_Canada on 10.04.10 at 11:34 am

#30 crabby in mcmurray –

Two words -> Camp Accomodation.

At 2600/mo, that’s 4000 gross at typical salaries w/ OT thrown in. Add food/booze/cable/phone and commuting fuel and time into the mix and you’re looking at 5K worth of expenses. That’s a big hit, even for McMurray.

Mega-companies exploiting low-grade resources are the primary reason you’re there. Least they can do is provide a decent place to live.

Even a fraction of 5 grand/month buys you a really nice 5 day stretch in Cabo during the fly-out off days.

#105 dark sad person on 10.04.10 at 11:51 am

63 Brian1 on 10.04.10 at 4:54 am

I wonder if this blog is for real sometimes. I discover Al Sinclair blatenly admitting that the R.E. industry is manipulating prices, yet not one commentator acknowledges it. No one see’s it as important. everyone is more preoccupied with gold than R.E. These sophisticated ones should have seen it. It is the same strategy that Obama uses with forecloures. He holds them off the market to keep the prices up.
These goldbugs are not interested in R.E. They only are waiting to bring you down. Why make it easy for them?

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

My God–what an asskisser you are-

Suckholing to G-to make it all go away-

“Please” protect us G!

You know-i could see your point if that was happening-but it isn’t-
Gold has as much of a seat at the table as any commodity-such as Oil or Wheat-
It just bothers you that the Goldbugs are on the winning side of a trade and you missed it-
I trade a lot more than just Gold-
I really like the USD here-in an oversold position-
I like and hold REE’s–I like and hold Uranium’s-
I’m hedged off on Gold right here-which means-
I’ve taken a short position on Gold-
How’s that grab ya?

#106 Ottawa S. on 10.04.10 at 12:10 pm

#54 Joe on 10.04.10 at 12:59 am

#2 …. how is a mortgage broker destroying people’s lives ??? By arranging the financing these bonehead buyers want so bad??? They’re just doing their job and making a living…Don’t blame them dude….blame the realtors and the government…

You’re being sarcastic, right? I’d blame the mortgage brokers before the realtors or government, since they could have put an end to the madness of lending beyond someone’s means.

#107 CTO on 10.04.10 at 12:11 pm

#87 positive

Silly, nosey question…Where did you live before you movrd to Vaughan?

#108 Keith in Calgary on 10.04.10 at 12:14 pm

I love how realtors are spinning with one foot in their grave and the other one on a banana peel.

They are now taking the public approach that commissions and listing services were always “a la carte” and “negotiable”………that much is true…….but…..and its a HUGE “but”……think spandex at Wal Mart and you’ll get the picture of how big.

They just never said to you that they would do SWEET F _ _ K ALL and put in any effort what so ever towards selling your listing if you chiseled them down from their 7/3% commission model.

#109 Moneta on 10.04.10 at 12:20 pm

It is the same strategy that Obama uses with forecloures. He holds them off the market to keep the prices up.
————-
It’s not necessarily to keep prices up. He also holds them off because there is a bottleneck.

Here is a post which confirms this

http://www.ritholtz.com/blog/2010/10/slowing-the-runaway-foreclosure-train/

#110 Keith in Calgary on 10.04.10 at 12:22 pm

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8039789/IMF-admits-that-the-West-is-stuck-in-near-depression.html

“IMF admits that the West is stuck in near depression
If you strip away the political correctness, Chapter Three of the IMF’s World Economic Outlook more or less condemns Southern Europe to death by slow suffocation and leaves little doubt that fiscal tightening will trap North Europe, Britain and America in slump for a long time.”

#111 Pat on 10.04.10 at 12:29 pm

#91 Devil’s Advocate wrote:

“I have a proposition I offer my clients who wish to negotiate my commission down.

if your taxable income is greater than mine then we agree that my commission shall be increased”

Would you be willing to strike a similar agreement with your janitor for the fee he/she is charging you?

#112 C on 10.04.10 at 12:31 pm

Anyone know the specific day the GTA real estate numbers are out for September 2010?

#113 BCGirl on 10.04.10 at 12:34 pm

# 247 Vancouver Going Up – Yesterday’s post – Key point is investing in Vancouver where mortgages are a non issue. Vancouverites unlike Canadians buy with Cash. For the rest of Canada there should be strict lending rules to protect the ordinary Joe.”

To “Vancouver Going Up” – Where do you get your facts from? I am a Vancouverite who has owned and flipped many houses. I owned a house in Point Grey, which I am sure you know is the hot spot of Vancouver. My husband and I, along with many of our friends, are professionals who work in Vancouver and make good money. In our circle of friends, most of us drive nice cars, own boats, and have homes, WITH mortgages! Almost EVERYONE I know has a mortgage, and a pretty big one at that! You must live in a dream world thinking that everyone in Vancouver pays CASH for a house.

We’ve been closely watching the market and price reductions started months ago. Every day, reductions, reductions and more reductions…..I guess we aren’t as “untouchable” as you think!

Perhaps, you are a realtor?

#114 Grandpa Grinch on 10.04.10 at 12:41 pm

Funny…Garth hasn’t responded to a single comment here today. I think I can get him to…

GOLD!

#115 triplenet on 10.04.10 at 12:42 pm

#17 Prof Anon

Purchasing a home for $95k? That’s not even land value….anywhere. That also means the home has reached the end of its economic life. Run like hell.
Rent until you can afford.

#116 Cattle Country on 10.04.10 at 12:44 pm

Is that Ozzie Jurrock guy still around? I never hear him on the radio anymore and no more road shows.. How ironic.

#117 Bill Gable on 10.04.10 at 12:45 pm

The last few weeks I have am sure there has been a sale on Tin Foil, because there have been some al clangers around this normally incisive pack of dawns.
For those mentally challenged, that seem to be cheering for some kind of “end of the world” scenario, I hope you sell you DVD player and wake up.
The breakdown of civil society occurred in New Orleans, within hours of the levees being broached. Polite society is a society where people agree to bury their baser tendencies and at least pretend to be civil.
To sit around cheering for some kind of Mad Max era, because you think that people have been clueless with their investments, begs the question.
Time to go back on the meds?

The reason I love reading this blog, is the brilliant writing by Mr. turner, and the pack of astoundingly insightful blog dawgs, that post here.

I just get hanky when people start cheering for the Darth Vaderian vision of Modern life.

#118 dark sad person on 10.04.10 at 12:47 pm

#98 junius on 10.04.10 at 10:48 am

#166 Cameroni (yesterday),

Thanks for that. The doomers are so sanctimonius on this Blog. Apart from being outright rude.

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

http://kneepads.com/

#119 luketheduke on 10.04.10 at 1:05 pm

Garth,

Do you think with this MLS deal that SFH prices could drop by 1 to 3% immediatly?

#120 Devil's Advocate resurrection on 10.04.10 at 1:07 pm

#100 junius

Are there actually people who don’t understand commission has always been open and negotiable? No wonder everyone is so pissy… they just don’t have a clue. Isn’t your mom a REALTOR junius? And even you don’t know that commission is and has always been negotiable. No wonder the competition bureau is so misdirected.

Now I get it… People, people… if you don’t like what they charge negotiate it down or go find another vendor who will. On the other hand there is no law that says an individual must supply his/her services for something less than they want.

#121 Canayjun on 10.04.10 at 1:09 pm

I had dinner with a friend last night who told me he bought his house in Surrey, BC for $450,000 about a year ago. In May 2010 a realtor came by and gave him an evaluation of his home. He told him he could get $320,000 for his house.

This is the type of information I’m sure realtors never share with potential clients because as we all know “house prices always go up.”

#122 TheBigLebowski on 10.04.10 at 1:13 pm

#53 Cameroni

I take DSP take on things in this way. I think he believes/hopes that with a collapse the corrupt system we live in will finally be purged of all its greed and disfunction. Positive, tectonic changes in society never occur without massive upheaval . The average person is just too slovenly and dumb to ever care otherwise.

#123 JM in London on 10.04.10 at 1:18 pm

#86 dark sad person on 10.04.10 at 9:51 am

Intellectually dishonest debate tactics are typically employed by dishonest politicians, lawyers, dishonest salespeople, cads, cults, believers of outlandish theories and others who are attempting to perpetrate a fraud.

Name calling: debater tries to diminish the argument of his opponent by calling the opponent a name that is subjective and unattractive; name calling is only intellectually dishonest when the name in question is ill defined or is so subjective that it tells the listener more about the speaker than the person being spoken about;

Apparently, your use of name calling and professionally assaulting me are proof of what?

It of course begs the question as to your own profession. Is it such that it gives you a moral high ground to insult others?

#124 Jeff Smith on 10.04.10 at 1:19 pm

>#13 seemac on 10.03.10 at 9:34 pm
>http://www.financialpost.com/news/Ottawa+ponders+further+tightening+mortgage+rules/3617608/story.html
>Cool!

*Yawn…. cows,horses,chicken,roosters, all left the barn a long time ago.

#125 Devil's Advocate resurrection on 10.04.10 at 1:22 pm

“Would you be willing to strike a similar agreement with your janitor for the fee he/she is charging you?” #110 Pat

If he/she asked… yes, yes I seriously would. If my taxable income was, for example, 50% higher than theirs I would give them a 50% raise when presented with the proposal as such. If on the other hand their taxable income was 50% higher than mine I would expect a 50% reduction in their charges.

#126 Sam on 10.04.10 at 1:24 pm

>> I really appreciate a thought out, intelligent

Too bad you haven’t written a single one.

And wouldn’t recognize one if it bit you on your troll arse.

If you wanted to be appreciated you shouldn’t have come on as a lying, shifty troll but come on as your true pumper self.

Rule #1 for a troll: don’t let them get your goat.

You can’t even be a good dumb troll.

And now that I got your goat, you’re on ignore, dumb pumper troll.
_______________
#26 Alan on 10.03.10 at 10:22 pm

Sam

I really appreciate a thought out, intelligent and well written post. When you get around to it, I will be happy to respond just as intelligently.

Is dis post short enuf 4 da space betwn ur earz?

#127 Mister Obvious on 10.04.10 at 1:25 pm

#47 Martian Tom:

And now 30 years later after they’ve used and abused that house, getting every penny of the original cost out of it in terms of usage, they want to turn around and sell it to YOU for $800,000?

Actually, no Tom. I’m not here to defend insane RE prices, but that 30-year-old detached house is probably worth diddly. At least it is in the Vancouver market. In fact, its a liability against the land upon which it sits. If it were, by magic, to burn clean and flat down to the ground (with no collateral damage to neighbours), they could put the price up another $50k since it would cost even more than that to get rid of it. Its the land, Tom. I know the concept is just as stupid, but its the land.

#128 Devil's Advocate resurrection on 10.04.10 at 1:27 pm

#110 Pat

Of course, as you would no doubt have concluded, each would be at liberty to seek the services of an alternate supplier prior to venturing into such a proposition in the first place. Such is the premise behind free trade and open competition as enforced by the Competition Bureau and followed, as it always has been, by CREA.

#129 JM in London on 10.04.10 at 1:30 pm

And the October numbers just hit the wire for my area

http://www.lstar.ca/Statistics/2010/September/News.pdf

Down we go….

#130 Nostradamus Le Mad Vlad on 10.04.10 at 1:34 pm

#93 Birdy — Welcome to Garth’s nightmare!

There are plenty of fruitcakes, nutbars, jelly-bellies, luscious lemon-lipsynching lardbutts, bloggers here wearing rose-colored glasses living a Pollyanna life, where all is sweetness and light and conspiracy theorists galore!

Feel free to join us, as we’ve all be certified unsuitable for human consumption!

#52 Victoria Damsel In Distress — Suggest you follow Garth’s advice.

Find an independent, fee-based advisor (not one linked to any bank), and park your money in REITs, bank preferreds, bonds and dividend-paying stocks so there is a regular income flow coming in.

Open up either an RRSP or non-registered plan, with excess cash being used via DRIPs (Dividend ReInvestment Plans).

Above all, look to the long-term. If bonds and bank preferreds are for 20 years, leave them. That is for income only, not buying and selling (capital gains / losses).
*
#49 Onemorthing, #51 Devil’s Advocate, #76 Hamilton Guy — “Do you know something we do not?” — The following may give a clearer realization of what is actually happening behind the scenes . . .

#20 TheBigLebowski — “This is the global takedown , co- ordinated I might add, of the middle class.”

In today’s KDC, David Crane’s (The Business of Canada, who writes for TorStar) article is entitled “Canada destroying middle class”.

Most here already know that G.H.W. Bush, Clinton (who transferred the SS surplus to pay the US deficit off, so there is nothing left for American citizens to fall back on), dubya (no explanation necessary) and Prez. Pussy (Obama) have desecrated the middle class — by and large, it’s gone.

“They were given their directions by a much higher source than Harper or the BoC. All power financially and politically will be siphoned of the unelected bodies such as the U.N and IMF. We are in the midst of the biggest heist in history . . .”

If Cameroni doesn’t want to face up to the reality of life, fine. Let him / her lie in his own bed.

The elite, NWO or global banking cartels / cabals are the ones who are orchestrating this. Unfortunately, they have not taken into account the change in cycles from west to east, which should be complete by 2030.

Included is an update from The Ugly Truth, received this a.m.:

“I received this overnight from an associate of mine in Iran who is both a journalist and does translating for President Ahmadinjhad.

“His name is kept hidden for obvious security reasons.

“Dear (^&#$),

“I read this article (“Exodus of Jewish Advisors from Obama White House Likely Not an Omen of Good Things to Come”) very carefully. It is frightening and yet very enlightening.

“This is indeed the first time I could not take my eyes off an article until I finished it. I think our president and his advisors ought to know about it as soon as possible, so, I am going to translate it. God bless you for being so observant, so watchful for the sake of humanity and not just America. I personally thank you for writing it.

“Yours always,

“Name not supplied for obvious reasons.”

May give some an inkling of what is happening behind the scenes. Apparently, Obama has told Netenyahu to go f*^&k himself.

He probably figures he has done his job (moved the US to the left, so it has become a welfare state), and is ready to move on to other things, which is why, despite all the rhetoric to the contrary, he has aligned the US with Russia and China.

#131 gordholio on 10.04.10 at 1:35 pm

Hi everyone. First time poster. Been a lurker for a year or more. So why did I finally decide to post? Because every now and then, something just drives you over the edge. And this is it:

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=10006033&PidKey=1380561100

$2.5 million for what is essentially a tear-down on a medium-sized lot in Vancouver. My god, is this the straw that broke the bubble’s back?

#132 JM in London on 10.04.10 at 1:45 pm

#111 C on 10.04.10 at 12:31 pm

Should be like my area and post today – just checked and nothing yet…

#133 Mortgage Mark on 10.04.10 at 1:53 pm

Garth,

Don’t worry buyers can still buy a home and be protected against future market drops, just see my video!

http://www.youtube.com/DELETED

Love to see your comments on this fabulous new program!

Buy an ad. — Garth

#134 Bottoms_Up on 10.04.10 at 2:00 pm

#96 Mtl RE Observations on 10.04.10 at 10:35 am
—————————————————
from here, go nuts:

http://www.cmhc-schl.gc.ca/en/hoficlincl/homain/stda/index.cfm

#135 jess on 10.04.10 at 2:01 pm

Flash Trading History
http://financialedge.investopedia.com/financial-edge/0809/Flash-Trading-Wall-Streets-Latest-Scam.aspx
August 24, 2009 11:53AM by Lisa Smith

Investopedia explains Blind Pool
Sometimes these pools are born and later dissolved without making a single investment – but the managers or general partners still make off with hefty fees.

Some of the largest and most-respected Wall Street firms have underwritten blind pools. However, this backing aside, investors should be very cautious of any investment without a stated objective
http://www.investopedia.com/articles/trading/09/ecn-credits.asp
================

Inevitably, the bubble burst when the SSC failed to pay any dividends off its meager profits, highlighting the difference between these new share issues and the British East India Company. The subsequent crash caused the government to outlaw the issuing of shares – the ban held until 1825. (To learn more, see Crashes: The South Sea Bubble.)

Who/Why

Galleanists

The Wall Street bombing occurred at 12:01 p.m. on September 16, 1920, in the Financial District of New York City. The blast killed 38 and seriously injured 143.[1] It was more deadly than the bombing of the Los Angeles Times building in 1910. It was the deadliest bomb attack on U.S. soil until the Bath School bombings in Michigan seven years later. Like the 1919 United States anarchist bombings, the Wall Street bombing may have been perpetrated by a Galleanist.(wiki)

=
61 warptweet
The chinese have experience /memory!
http://www.opioids.com/timeline/index.html

#136 Sam on 10.04.10 at 2:05 pm

hmm … my last post didn’t go up.. no0t even the “… comment is awaiting … ”

>> I really appreciate a thought out, intelligent

“houses don’t trade like stocks. They will never fall”

yeah, that’s a good one – the ONLY WAY house prices would EVER DROP is if houses traded like stocks

>> I really appreciate a thought out, intelligent

Suuuuuure you do. You wouldn’t know intelligence if it chopped off your arms and legs (you are the Black Knight after all)

dumber than a box of Vancouver rocks.

Alan says: “It’s just a flesh wound. Come on then, I’ll bite you to death.”

#137 prairie gal on 10.04.10 at 2:05 pm

45 Love this Blog wrote:
Well, if it’s any consolation, I got my “bunker shit” together. Shot a mulie doe Friday and another tonight. Shot tonight’s (with my 13 year old at my side, I’m proud to say) at around 6:30. Had it gutted, home, skinned, deboned and in the freezer as a bag of meat by 9:10. Let’s ee a Vancouver or Toronto boy do that. To the Sask boys……………………..sorry it took so long, (almost 3 hours) to reduce that doe to a bag of meat, but I was trying to explain to my son how to properly gut, and that takes abit of time.
True stroy blog dogs, when the SHTF, I’ll be just fine…………….
____

Kudos from a Sask girl. We’re in the same boat. The menfolk in my family hunt, my partner is trained as a butcher. We hardly ever buy meat from the store. Garden didn’t do too well this year but that’s life on the prairies.

#138 Debtfree on 10.04.10 at 2:13 pm

@ 92 eddy so your comparing h to hitler …and then they came for the realturds . I was not a realturd so I did nothing . The nutzometer is in the red zone today . DA’s back and goofier than before . Can you just imagine how fast most would tell him to f off . It would take me seconds . DA in case you don’t know your in the service industry. You don’t hold any of the cards … We your intended victims hold all of the cards . All one needs to get on a level playing field with mls and crew is a copy of” selling houses for dummies” if there isn’t one written yet I predict one will be soon. Just looked it up .
http://www.amazon.com/House-Selling-Dummies-Eric-Tyson/dp/0764550381

#139 Bottoms_Up on 10.04.10 at 2:15 pm

#60 Numbers. on 10.04.10 at 2:37 am
———————————
Nice, but Joe Williams (PhD) has been listing FSBOs on mls for years.

http://www.buildinghomes.ca/community/forums/archive/index.php/t-13989.html

#140 West Coast on 10.04.10 at 2:16 pm

What I get confused with is the assumption that F and Carney have no idea what is going on and all their efforts are earnestly being made in an effort to serve the people.

The big 5 Canadian banks have absolutely nothing to lose and they can only profit by the decisions made by this government – isn’t it obvious?

#141 Sam on 10.04.10 at 2:16 pm

A realtor told me recently some TO house prices never got back to their high water mark prices from the 1990 high.

A couple of areas in Scarborough, some near the Broadview Chinatown.

Is he blowing smoke my way?

#142 Debtfree on 10.04.10 at 2:21 pm

@ 115 cattle country Ozzie is still around . The last thing I heard him say on global was ” kelowna’s condo market was vastly over built ” that was about two years ago +or- . That I guess was too much for msm/mls.

#143 BCGirl on 10.04.10 at 2:33 pm

“#116 – Bill Gable – To sit around cheering for some kind of Mad Max era, because you think that people have been clueless with their investments, begs the question.
Time to go back on the meds?”

I think you may misunderstand why most of us are on this blog. I certainly am not cheering for a Mad Max era. I’m sure many of us would love to believe that housing will just keep going up and up forever. Before investing $ in anything, I think it’s wise to look at all of the potential risks. Our own government is now concerned about the RE bubble bursting.

You may want to watch this video that Ben posted yesterday. Could it be true? I don’t know, but it certainly makes you think!

Overdose: The Next Financial Crisis

http://www.youtube.com/watch?v=4ECi6WJpbzE&feature=player_embedded#

#144 DM in Calgary on 10.04.10 at 2:44 pm

Here’s an interesting anecdote — Friend of mine is contemplating an offer to relocate from Calgary to St. John’s.

They were excited about the offer because they figured they could sell in Calgary and own outright using the difference in NF — or so they thought until they started looking at houses in the St. John’s area. I didn’t believe him until he told me that houses similar to the one they have in Calgary are ~300k!

I guess NF isn’t immune to the bubble either — and now the friends are reconsidering taking the offer because they wouldn’t be much further ahead if they bought there — rentals don’t often include pets, and they have a dog, so a purchase it would have to be. Between that and the taxes in NF, they are probably staying put. Unfortunate but true.

I never believed that someone would tell me that making $140k isn’t enough for a house in NF. Wow.

#145 JM in London on 10.04.10 at 3:14 pm

#86 dark sad person on 10.04.10 at 9:51 am

if you’re comparing me to someone like this:

#132 Mortgage Mark on 10.04.10 at 1:53 pm

You really do need to think twice as I practice straight up. Always have, always will. In fact I’m one very involved with CAAMP in order that my industry get cleaner and held to a higher standard and campaign for it on a regular basis.

#146 Pat on 10.04.10 at 3:17 pm

@ #124 Devil’s Advocate resurrection,

I see, your taxable income must be negligible.

#147 bill on 10.04.10 at 3:23 pm

dm
wow indeed. that used to be the cheapest place to buy once upon a time.
Surely the prices are cheaper in the smaller towns outlying saint johns ?
i refuse to believe there is a rush hour so the commute should be pleasant as a commute could be?
You would have thought with the exodus from the rock that re would be reasonable.
I wonder what prices are like in far end of the bonavista peninsula?

#148 Money Thrower on 10.04.10 at 3:25 pm

At the risk of piling on…

#91 Devil’s Advocate wrote:

if your taxable income is greater than mine then we agree that my commission shall be increased”

Hmm, so if you’re really crap at this realtor gig, I’ll end up paying you more, and if you’re really good at it, I’ll end up paying you less..

I think I know why people have been politely declining your offer.

And what’s with #51? (on the matter… conjecture and dissemination of misinformation…. ratified… speculation..)

I can’t decide if you’ve been away on a vocabulary course or boning up on that second career as a legal assistant.

#149 VICTORIA TEA PARTY on 10.04.10 at 3:28 pm

#38 Crash Calloway.

I guess that some of these little piggies wished that they were pulled pork on my fave TV show Diners, Drive-ins and Dives with that bloated dude and his backward sunspecks!

Anyway…

While I’m sure that the cheapo Mexican/Hawaiian Christmas charters are now in the past, for some of our real estate industry sociopaths in these parts, one should only satirize them as a group, not individually, because surely those commissions will be sorely missed and some of them will have to head for hourly wage-land. My oh my!

For the rest of us, we could’ve answered the siren song and travelled miles in their Guccis and leased Bimmers if we weren’t careful, right? Whew…close run thing!

Besides, views off Dallas Road are far prettier, than a hail of Mexican big bore bullets and tacos, as winter sets in!

While the Greater Victoria real estate establishment finally downsizes to its right and proper place, I am perusing news reports out of New York, London, and so on, just to get back to reality. And guess what? Reality continues!

Examples:

–The BDI (Baltic Dry Index), that all important world-trade weather vane, has flat-lined again after several weeks of perkiness.

That was possibly due to export inventory rebuilds from China’s factories while, in the opposite direction, China was importing raw resources like crazy. Do they know something we don’t? Would that be collapsing international trade and the beginning of China’s Big Look Inwards? We wait.

–The US Fed’s decision to ramp up fallacious money creation could actually result in an INCREASE in interest rates at the long (US 10 year bond) end, says Bloomberg news, ultimately a function of supply and demand, of course; no rocket science here; bad for business.

–In downtown Europe, massive public denial continues as entitlement bunnies take to the streets in yet more general strikes, in the cities of your choice. These demos all have to do with favourite oxen (increased retirement ages, etc.) being gored because demographics, collapsing economies and austerity measures mean the European social safety net is shredding itself. People don’t want to hear it. But hearing it they are, anyway. No choice.

Regarding austerity, “Telegraph” reporter, Ambrose Evans-Pritchard, describes the fall-out of government cuts in Spain, Greece (and, soon, northern Europe):

“We are seeing a pattern…where cuts are failing to close the deficit as fast as hoped. Austerity itself is eroding tax revenues. Countries are chasing their own tail…The German squeeze (austerity) starts in earnest in 2011.”

How’s that for economic sweetness and light? BTW, the headline of this particular piece: “IMF admits that the West is stuck in near depression”.

–Finally, in Canada, as our real estate dreams come down hard for so many perhaps a look back, not in anger but in pity.

Taking us there, some lines from “The Charge Of The Light Brigade” with (editing) apologies to its famous author, Alfred Lord Tennyson:

“All in the valley of death
Rode the six hundred…

Cannon to the right of them,
Cannon to the left of them…
Volleyed & thunder’d;
Storm’d at with shot and shell
While horse & hero fell…”

And so it is in the aftermath of the Great Canadian Real Estate Madness, the left-overs of Canada’s “Property Light Brigade” pick up their wounded (foregone dreams)and dead (debts) and shuffle off into history, giving a careful glance back wanting something, anything, with the words “government initiative” written all over it.

Sorry, property mavens, not gonna happen; this time.

#150 Ottawa S. on 10.04.10 at 3:33 pm

Okay, I need help. I have some serious mental issues.

Despite my father forcing me to read this blog, I want a house of my own. I’m tired of being “behind” my 30 y.o. married peers by renting (fantastic apartment in fantastic neighbourhood for fantastic rent since my parents are the landlords – did I mention some laundry, cleaning, and meal services included?). I want my own home to love and be attached to, even though I know all indicators show it’s a bad time to buy.

Been viewing a lot of houses lately in Vanier in the $280-$320K range. Anybody that knows Ottawa will ask wtf we’re looking at VANIER aka Cracktown for. Reason is that riff-raff will get pushed out and this area, due to its downtown proximity, will be up-and-coming – it will be the next Westboro. Sure, we could get pre-approved for a $600K mortgage and be house poor, but I’d rather stick to $350K max. And in Ottawa, that gets you Vanier. Maybe some Alta Vista.

My husband on the other hand wants to use $350K to buy a lot and build a house in the boonies (Greely Manotick) where bungalows sell for $550-$700K (don’t ask why). The two of us together should have the skills/know-how to pull it off (he’s has a contractor, I’m an accountant). I just don’t like the financial risk, and I don’t want the commute. He likes the idea of the huge profit capital-gains free if we live in it for 1-2 years. I argue about the pending crash (while viewing overpriced dumps in Vanier) and he then throws it right back at me that even if the market crashed, you could still make money building houses. We’d lose money in Vanier.

Is this a no-brainer? Is it just me that needs some mental help here? Could my husband actually have a valid business case for building? Or are both of a little off the rocker right now?

#151 Mtl RE Observations on 10.04.10 at 3:40 pm

#96 Mtl RE Observations on 10.04.10 at 10:35 am
—————————————————
from here, go nuts:

http://www.cmhc-schl.gc.ca/en/hoficlincl/homain/stda/index.cfm

============================

Thanks! Interesting info. Am I missing something? It seems like all the info in their reports revolve around housing starts / completions / absorption rates / price. I can’t find any info on the resale market. Maybe I’m not looking in the right place?

Also, do you know if I can access info on specific properties that were sold? I’m trying to track asking vs. sale prices on individual units. Is this kind of info available anywhere to the public?

Muchos Gracias!

#152 Mortgage Mark on 10.04.10 at 4:08 pm

Come on Garth, it is a real way to protect buyers!

#153 SIC EM on 10.04.10 at 4:19 pm

It will be absolutely fascinating to see how long running feud between the Canada’s Real Estate board and the Competition Bureau unfolds now that its finally scheduled for a trail as 2011-Spring in “CREA” versus the competition “Competition Bureau” of Canada.

After all, 1% of the listing price of 90% of the homes sold in Canada is a handsome prize that is certain to attract the attention of some “lusty” lawyers. In fact, its probably such a big plumb that this one could easily afford to go to all the way to the Supreme Court of Canada, and not just as a result of this particular legal action. Regardless of how this one unfolds, I think there’s also always the option of a subsequent class action law suit on behalf of homeowners, to recover the past fees collected by CREA.

Personally, I would not even be surprised to even see this issue go all the way to the UN as a Charter of Rights challenge, under the Privacy guidelines enshrined in the Universal Bill of Human Rights, that was enacted in 1948

#154 Mister Obvious on 10.04.10 at 4:45 pm

#130 Gordholio:

Besides its astronomical price, the MLS listing you posted has yet another claim to fame. It is literally a stone’s throw away from the scene of the still unsolved Wendy Ladner-Beaudry murder case in Pacific Spirit Park. You pay quite a premium to locate in exclusive areas.

http://www.unsolvedcanada.ca/index.php?topic=2692.0

#155 RickOShea on 10.04.10 at 5:03 pm

#36 Dan in Victoria on 10.03.10 at 11:07 pm

you were talking about some of the pitfalls of buying an old/older house…

my modest house was built in 1982 (Alberta)…

it needs new windows and more insulation in the walls…

but before tearing into the exterior stucco, i had it tested for asbestos thinking – since the house was built several years after the ban in the late ’70s, there will be no problem – but just to be safe…

well, the tests came back positive for 3% crystotile fibres…

i’m looking at over $9K to get the stucco removed by a qualified company.

so yeah, a lot of ‘older’ homes are toxic assets alright.

#156 jess on 10.04.10 at 5:13 pm

Anybody read this ?
Demographer+real estate ass.(industry)+financial (genworth)
http://www.nbrea.ca/…/Property%20Taxation%20Discussion%20Paper%20EN.pdf

[PDF] A Discussion About Property Taxation in New Brunswick

20 Jun 2010 … control rising assessments with some form of maximum limit. … the policy because it forced them to raise tax rates and shifted the burden …. report that a number of seniors were forced to sell their homes … For most home owners within a municipality, your tax bill is largely a result of the …
http://www.genworth.ca/homeownership/c_on-your-terms/study_homebuying_experiences_canadian_immigrants.asp

====
In British Columbia, the provincial Property Tax Deferment Program is a loan initiative that allows
eligible home owners to defer their annual property taxes. The program applies to registered
home owners who are 55 years of age or older, a surviving spouse, or a person with a disability.
Residents can defer taxes as long as they own and live in their home and continue to qualify for
the program. But deferred taxes must be fully repaid with interest. That has to happen before the
home can be legally transferred to a new owner—except in the case of a surviving spouse—or
upon the death of the owner.
=====================

In the early 1960s, several scandals erupted through California involving county assessors.[5] These assessors, who had traditionally enjoyed great latitude in setting the taxable value of properties, were found rewarding friends and allies with artificially low assessments, with tax bills to match. These scandals led in 1966 to the passage of AB 80, which imposed standards to hold assessments to market value. However, assessors, who are elected officials, had traditionally used their flexibility to aid elderly homeowners on fixed incomes, and more broadly to systematically undervalue vote-rich residential properties and compensate by inflating commercial assessments. The return to market value in the wake of AB 80 could easily represent a mid-double-digit percentage increase in assessment for many homeowners….”
http://en.wikipedia.org/wiki/California_Proposition_13_(1978)

========

There are several reasons for the failure of the general property tax. Advocates of uniformity failed to deal with the problems resulting from differences between property as a legal term and wealth as an economic concept. In a simple rural economy wealth consists largely of real property and tangible personal property — land, buildings, machinery and livestock. In such an economy, wealth and property are the same things and the ownership of property is closely correlated with income or ability to pay taxes.

In a modern commercial economy ownership and control of wealth is conferred by an ownership of rights that may be evidenced by a variety of financial and legal instruments such as stocks, bonds, notes, and mortgages. These rights may confer far less than fee simple (absolute) ownership and may be owned by millions of individuals residing all over the world. Local property tax administrators lack the legal authority, skills, and resources needed to assess and collect taxes on such complex systems of property ownership.

Another problem arose from the inability or unwillingness of elected local assessors to value their neighbor’s property at full value. An assessor who valued property well below its market value and changed values infrequently was much more popular and more apt to be reelected. Finally the increasing number of wage-earners and professional people who had substantial incomes but little property made property ownership a less suitable measure of ability to pay taxes.

Reformers, led by The National Tax Association which was founded in 1907, proposed that state income taxes be enacted and that intangible property and some kinds of tangible personal property be eliminated from the property tax base. They proposed that real property be assessed by professionally trained assessors. Some advocated the classified property tax in which different rates of assessment or taxation was applied to different classes of real property….”

Citation: Fisher, Glenn. “History of Property Taxes in the United States”. EH.Net Encyclopedia, edited by Robert Whaples. September 30, 2002. URL http://eh.net/encyclopedia/article/fisher.property.tax.history.us

#157 Brian1 on 10.04.10 at 5:16 pm

Moneta; I believed you the first time. I have also come to terms with the banks preferred shares. They simply want more money and are willing to pay for it. Thanks.

Whats his name? What makes you think I don’t have gold? You idiot. You’ve been here all day again, haven’t you. How can you write so much and say so little.

#158 john m on 10.04.10 at 5:16 pm

Curiously H.F.C. and company are now warning people to be cautious…..but aren’t things different here?What a bunch of “flip flopping incompetents”. I find it curious that all the people who used to come on this site over the last few years and tell Garth how wrong he was..are now mysteriously becoming silent. The blame is now directed at the realtors who took their money when they couldn’t buy fast enough from those vendors who were stupid enough to sell an asset that was going no where but up…….??? Perhaps its time to admit they got conned…not by the realtors but by believing the impossible from the people who orchestrated this pending destruction and……………the prize goes to H.F.C and company!

#159 VancouverGoinUp on 10.04.10 at 5:22 pm

Wouldn’t touch the US – It’s finished folks. No it’s not different this time and Yes you can NOT count on the US

Dear Comrades In Golden Arms,

The following is BREAKING NEWS:

Racketeering suits (RICO), now as civil class action suits in two states, have hit the nail on the head. The civil suit says the banks do not have proper title to the homes on which they are foreclosing. This by direct inference questions if securitized debt on mortgages have real collateral behind them.

Simply stated a long time ago by Marie Mcdonnell and myself, THEY DO NOT.

That means legacy assets are cooked, dead, and worthless, yet are now marked up in value to cost and above. This is all thanks to FASB’s capitulation that now represents a large amount of capital for the Western world’s financial entities.

The you know what hit the fan today for those that understand. October 4th 2010, the essence of securitized debt on mortgages died!

That alone gives you gold at $1650.
JS Mineset

#160 Starving Artist on 10.04.10 at 5:30 pm

Updated Vancouver market charts with September REBGV data:

http://vancouvercondo.info/forum/topic/rebgv-september-2010-stats

#161 RickOShea on 10.04.10 at 5:43 pm

hey #148 Ottawa S. on 10.04.10 at 3:33 pm …

you are an accountant?

you believe that buying a house and making a big fat capital gain in a few years is a slam dunk?

read this first:

http://www.retailinvestor.org/realestate.html

BTW, this is not about the looming real estate apocalypse… the analysis was obviously written with _normal_ economic conditions in mind.

#162 Devil's Advocate resurrection on 10.04.10 at 5:50 pm

#144 Pat

#146 Money Thrower

I’ve said it before and will say it again; my needs are modest and I have more than I need. My wife on the other hand has higher expectation.

Here’s a paraphrased quote for you “America has degenerated to the point that we measure a mans worth not by what he does but by what he has” Jimmy Carter 1976. Ya, we didn’t see this coming… not in the least.

On the matter of the failing economy. It’s not failing just ask the banks who’s profits have never been better. Follow the money.

“I own it to be my opinion, that good will arise from the destruction of our credit. I see nothing else which can restrain our disposition to luxury, and to the change of those manners which alone can preserve republican government. As it is impossible to prevent credit, the best way would be to cure its ill effects by giving an instantaneous recovery to the creditor. This would be reducing purchases on credit to purchases for ready money. A man would then see a prison painted on everything he wished, but had not ready money to pay for.”–Thomas Jefferson to Archibald Stuart, 1786. ME 5:259

“I sincerely believe… that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.” –Thomas Jefferson to John Taylor, 1816. ME 15:23

#163 realpaul on 10.04.10 at 6:21 pm

Charlie Brown turned 60 yesterday…..the tsunami has been loosed….. by a demographic seismic event that we have talked about for two decades (Boom Bust Echo etc)….and in atypical shortsightedness discounted as ‘someone elses problem’……..

Oh dear…we look as surprised as Charlie when Lucy pulled the ball away…again. Do we really think this way? Tell me we haven’t been so stupid as to think the ride would last forever.

Rates are zero..meaning seniors have zero income and negative savings ( except for the civic pigs who we’ve been generous enough to feather bed) and man…will we live to regret this action..as they are in Euro land right now.

The union workers are marching in the streets against the ‘elites’ and realizing it is ‘themselves’ at the root of the problem. Greedy pigs at the trough have sucked the trough dry and taxes have hit 100%…theres no more juice…gone is the tit that suckled a generation into ignorance and complacency. Canada’s debt exceeds GDP now…personal debt exceeds every other western nation…you do the math.

The boomers have 100% of their retirement tied up in realestate in Canada bu large amounts and need to sell to fulfill those champagne dreams of retirement cruises since the majority have mere months of savings when the last paycheck clears.

Trouble is with zero return on savings they are all going to be selling their ‘piggy bank’ at the same time. Supply/Demand says this cannot go well for prices. Indications are that unemplyment is rising, inflation rising, taxes skyrocketing and wages flatlining. Without the ‘stimulus’ the real economy is in a death spiral…Canada has twice been warned by the IMF this year on debt/gdp…this is why F is calling for an ‘end to stimulus’…truth be told it has nothing to do with budget projections…they just had a hundred economists in a room and got a hundred wildly differant opinions.

Meanwhile…the newspapers tell us that the super rich are buying gold buy the ton. While I would go to Paris Hilton for investment advice it may not be the same old doom scenario that F and the boys would have us believe as they attempt to stuff the leaks of our dear ship of state with soggy paper and weak promises. I expect to hear the ‘Chicken in every pot’ any day now.

#164 Potato on 10.04.10 at 6:29 pm

#148 Ottawa S.

Help is here!

Check out rentals. I’m not too familiar with Ottawa neighbourhoods, but on MLS alone there are two decent-looking detached houses for $2500/mo in Westboro, where the houses look like they’d sell for ~$500k. That’s 200X… do the math, renting is by far the better option. You get the best of both worlds, a nice house in a neighbourhood you like (not necessarily the random one I checked on MLS, but wherever you like there will be rentals if you look), and if there is a correction, you skip it by, saving your money and avoiding negative equity. Even a 10% correction taking over 2 years to play out would make that rent “free” basically.

#165 T.O. Bubble Boy on 10.04.10 at 6:34 pm

Where are the TREB (GTA) housing stats?

Are the data manipulators working overtime to come up with stats that they can publish without scaring the few remaining greater fools?

#166 Nostradamus Le Mad Vlad on 10.04.10 at 6:46 pm


Goes with the last post (#129). Plus this.

Global Currency War Goes with what TheBigLebowski said yesterday — 25 nations have agreed to devalue their currencies.

Double Dip might be worse than now. Unemployment.

2:16 clip Money Junkies!

The US SS Mentioned earlier was how Clinton used the SS surplus to pay the deficit off, and there was nothing left. This is the end result, which has led to this.

UK zombie banks not working very well, if at all.

The Wealthy Barber Anyone remember? Great book.

Stuxnet Super Virus Re: the attacks which happened last week.

False Flag “There is if you have an election one month away and your entire party is in the Al Qaeda in the polls!!!!” — Official White Horse Souse (Note to those who don’t know that Al-Qaeda still means ‘going to the toilet’.

GW Check the temps. in Alaska. GW is a real threat!

“Big pharma has almost reached the finish line of its decades-long battle to wipe out all competition.”

Obama “It should be crystal clear to the American people that no matter who seems to occupy the oval office these days, the faces change, but the agenda remains the same; the systematic destruction of the rights and liberties afforded by the Constitution and the Bill of Rights.” wrh.com.

Russia “The arctic may well be the next battleground for (as of yet) untapped natural resources.” wrh.com.

See? The m$m is doing just as well on the ‘net as it is on the streets!

Who owns the m$M? Avoid them like the plague!

Trouble in the offing for Obama?

#167 morpheus on 10.04.10 at 7:17 pm

Waiting for these monthly sales figures to come out lately has been like waiting to open your presents on Christmas day. Just let me open the damn thing already….

#168 Valyrian_Steel on 10.04.10 at 7:20 pm

Garth, I’m a 38 year old with 200k wasting away in “high interest” savings accounts, and am very close to stuffing a goodly portion of this money into Canadian bank preferred stock. I know you value this type of investment highly, and I have to admit that many aspects of it appeal to me (I detest undue risk)… but I need some assurance that yes indeed, this is a no-brainer of an investment. Why do not more people do this? What ARE the risks… ?

If you choose not to answer, I’ll assume that you detail all this in MONEY ROAD… which I’m going to buy soon. But would still love a little pep-talk about preferreds…

I don’t pump any kind of security, because what is appropriate for one person may not be for another. However, bank preferreds offer very little risk, a yield close to 6% and 80% less tax than a GIC in the same bank which gives one third the yield. What’s not to love? But you still need independent help to ensure this is right for you. Get some. If you can’t find any, email me — [email protected]. — Garth

#169 Timing is Everything on 10.04.10 at 7:25 pm

#126 Mister Obvious – ….”its the land.”

That’s obvious.

#170 miketheengineer on 10.04.10 at 7:29 pm

Hey Nostradamus le mad dude:

I tried to find the latest web bot report, “the shape of things to come” issue seven. I did manage to print out a copy. It is scary, gloomy and doomy. Right up you line. As soon as I find the link I will repost.

There was a big discussion on the Nov. 8 Tipping point.

As they stated in their previous report #6, something big is going to happen. They go into detail in the issue #7.

The web bots speculate something going on in the US that will affect the entire globe. Their data tells them something is going to happen….just their interpretation of the data is some times not accurate. The future is not set in stone…

Had to mention it once again, before Nov. 8. Not sure when I will post again.

To all, this depression, appears to “hovering in neutral” and I speculate, another dive over the cliff, no matter what happens in Nov. Get your xmas gifts in order, cause Christmas could be interesting.

Also, frozen Turkey is on for 0.99 per pound at most grocery stores…..good to stock up now. Stock up on your canned goods as well….

You see there have been several posts about the gulf stream stalling, and this may lead to a much, much cooler or extreme winter….

#171 Pat on 10.04.10 at 7:33 pm

@ #153 RickOShea,

Are you sure there was an asbestos ban in Canada in the 70’s? I thought it was later in Canada and not even complete. Could be wrong though (and too lazy to google it).

#172 Timing is Everything on 10.04.10 at 8:00 pm

Utility Rates Steam Voters

‘As they campaign door-to-door, the biggest complaint they hear concerns skyrocketing utility bills.’
“It’s a back-door taxation,” said Hank Van Aspert, a candidate running in Ward 9. “People are choosing between paying the utility bill and the mortgage.”

http://www.windsorstar.com/news/Utility+rates+steam+voters/3618572/story.html

Get off the grid as much as you are capable. Be self sufficient as much as you are capable…. Or pay the full rate imposed. R U prepared?

#173 Devore on 10.04.10 at 8:03 pm

#139 Sam

A realtor told me recently some TO house prices never got back to their high water mark prices from the 1990 high.

A couple of areas in Scarborough, some near the Broadview Chinatown.

Is he blowing smoke my way?

In nominal terms, no way.

Adjusting for inflation, certainly possible. See the chart here for TO prices.

http://www.torontohomes-for-sale.com/4a_custpage_2578.html

#174 Increasing that 1% on 10.04.10 at 8:21 pm

“Buy an ad.” — Garth

Garth, I wish you would make this response to 90% of ‘Devil’s Advocate’- (or whatever name he chooses to use)- postings.
—————————————————————–
Re: #148. Ottawa S.

You self-diagnosed from the start.
—————————————————————–
Re: #17. Prof. Anon:

Really, even after doing the numbers, and all, does it matter what anyone says? You’ve been reading this blog for a fair while
——————————————————————
Re: #45. Love this Blog

As ‘the SHTF’ hasn’t occurred yet, to the extent that you NEED to be killing the wildlife, I don’t get wth your point is-
You brag about shooting, and teaching your child to shoot, and turn two ‘mulie does’ into a ‘bag of meat’? woww, congratulations.
I think if things get so bad even vegans will be able to do that just fine.
Or, they should start now, as there won’t be anything left?

and Re: #136. ‘prairie girl’,
thank goodness you have those ‘menfolk’, sure you’d just starve or be malnourished otherwise, out in them ‘prairies’ ?

#175 Behavioral Finance on 10.04.10 at 8:32 pm

Looks like investors are in bunker mode…

Citing Bloomberg, he notes that roughly $33 billion has left equity funds while investors have sent about $185 billion into bond funds. These inflows and outflows are indicative of the trends in investor psychology.

Read more: http://www.marketfolly.com/#ixzz11RWMz6Hp

#176 An Cat Dubh on 10.04.10 at 8:38 pm

I saw a mid 20’s realtor in Penticton this year putting up a for sale sign. One of many here I might add. He was driving a late model Audi. I hope it’s paid for.

#177 groundzeropat on 10.04.10 at 8:42 pm

I got one that will make Garth smile. Read this special gem that is been on the market for 159 days and has been INCREASED in price by $80,000.00. Take note of the special 2 tone exterior paint. Realtor states in the ad “EXCELLENT OPPORTUNITY! BEST VALUE in the area and Try your offers, this one won’t last!”—You bet it won’t last… it will cave in before you sign the purchase agreement.

http://mlslink.mlxchange.com/EmailView.asp?r=1468682897&s=BRC&t=BRC

#178 Nostradamus Le Mad Vlad on 10.04.10 at 8:42 pm

#168 miketheengineer — Good to see you’re still around, Mike! Of course, the tipping point may happen before or after the mid-terms.

Whatever it is, look for martial law to be part of life at some point. Also, the shape of things to come is a good portent of things.

Indeed, it looks as if the currents of the Gulf have become so screwed up that the Atlantic currents have changed. A link from a few days ago said the Pacific NW (us) may well have a large, long and continuous dump of the white stuff this winter. The link below shows the UK may be the same, if not more than last year.

Stay well. Cheers!
*
Latest definition of Political Correctness:

“There is an annual contest at the University of Arkansas calling for the most appropriate definition of a contemporary term. This year’s term was: “Political Correctness.”

“The winner wrote:

“Political correctness is a doctrine, fostered by a delusional, illogical minority, and rabidly promoted by an unscrupulous mainstream media, which holds forth the proposition that it is entirely possible to pick up a piece of shit by the clean end.”
*
4:26 clip Ooohhhh! This is cute, but how much do C-F-H really know?

Further to GW.

#179 groundzeropat on 10.04.10 at 9:07 pm

Re: #175– I just had to call the realtor to find out why the price of this house was $698000 and now is $778000 and has been on the market for 159 days. She said it was because they recently had multiple offers that were above the asking price. She said the market has turned upwards and I should buy now because the prices are going up again. So it ain’t so. She really thinks everyone is so stupid that she didn’t even renew the ad as a “New Listing” with the new price. She really expects us to buy that a 159 day old listing has multiple offers.

#180 CrowdedElevatorfartz on 10.04.10 at 9:09 pm

#125 Sam and Alan,
Go to your rooms ! No supper for either of you !
Remember the Pig Principle , When you get down in the muck with a pig, you both get covered in shite, and the pig LOVES it ! I’ll let you two decide who the oinker is.

#148 Ottawa S
Are you NUTS ! Free laundry,cleaning meal services???? Geez where do i sign up ? Yeah yeah, you want your own space but wait til yhis time next year and have a look at the price in that crappy part of Ottawa. Then wait another year.

#181 junius on 10.04.10 at 9:14 pm

#168 miketheengineer,

You asked, “The web bots speculate something going on in the US that will affect the entire globe.”

Indeed. The aliens will arrive and beam everyone where a tin foil hat onto the mother ship. Be ready for the signal.

If you read Dark Sad Person’s blog posts backwards you will be able to read the signs.

#182 Charlie Go Surf on 10.04.10 at 9:16 pm

dear Master Garth

your thread pictures remind me of that july afternoon not long ago on Vancouver island. We just had reloaded the cooler full of brewsky’s n rum in Gold River B.c, were, at that time a bungalow could be bougth for Fourtwenty hundred dollars.

on our way back to th pristine mini-Alps provincial pARKS, we slowly followed that logging truck on the typycal S road of this lush mountain paradise. suddenlly, it, pop, the trailer, just like a bubble…

and than, up on a 8 wheel high angle, just like momentum was the maestro, it pop, the other way, turning in slowmotion, the rainforest giant log load, dunk roll it’s mass to the lakeside hyway ditch, taking the semi-cab with it, and its driver…

i stopped our ride, in wonder, got out, amidst the rumble and smoke, icould feel the bubble blow my reality sense, and i started running barefeet toward the fuming cab perched on the steep lakeside.

looked trough the real’state of the sided smashed windshield, to see him, uncounscious and dangerously weigthing his driver muscleness on the driver window. iturned the ignition off, and unbuckle him, amidst oil cooling fluids swishin the air away.

he was intact, the load too, maybe, even the truck

the crash was just a chance to let us all.
feel alive
today on planet earthling!:)

carpe diem and merry millenium!!!

http://www.theprovince.com/Tenant+green+building+sees/3616378/story.html

i see blue

and went to ride

#183 Taxpayer like everyone else on 10.04.10 at 9:26 pm

Why do people in Saskabush snuff the four-legged
womenfolk? Isnt that illegal (and kinda dumb?)

#184 Love this Blog on 10.04.10 at 9:34 pm

#172
Your ignorance is showing. There are so many deer here, they are giving TWO tags away for the price of one. 2 tags for $20.
No chance of running short of deer. As for bragging? It was said tongue in cheek, but you call it what you like.
Go buy yourself a $5 cup of Starbucks and complain to your friends about the Savages in the Prairies – you’ll feel better.

#185 dark sad person on 10.04.10 at 10:22 pm

#182 Love this Blog on 10.04.10 at 9:34 pm

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

Yes-deer are over populated and this happened mostly because of the ridiculous gun laws-that were implemented by people who were totally clueless and dictated from the east-where they have no idea of what its like in the west–
People said to hell with hunting-because of all the red tape involved-now we have deer everywhere-they are killed on the highways in great numbers and are starting to inbreed so badly that their bloodlines are effected and we are starting to see stunting and deformities show up-
Now we have Government having to do kill culling–

Be careful all you wish for–

#186 Tyler on 10.04.10 at 10:27 pm

Garth,

I am a new reader, and I agree with your main points. I would like to know what school of economics you subscribe too, and who you have most been influenced by. This is an important question for those of us who wish to listen to your wisdom………….Answer if you dare……..

The school of moi. — Garth

#187 Bottoms_Up on 10.04.10 at 10:41 pm

#149 Mtl RE Observations on 10.04.10 at 3:40 pm
—————————————————
The best you can do is go to http://www.mpac.ca

You need to be (or know) a home owner, use the username and password on the mpac statement, and you get 100 free searches of selling prices in your neighbourhood. You also get to see the square footage/lot sizes of each place, and the municipal assessment.

#188 Bottoms_Up on 10.04.10 at 11:05 pm

#148 Ottawa S. on 10.04.10 at 3:33 pm
—————————————————–
I’ve been following the Ottawa market for the better part of 2 years, and here are some of my observations:

1) the Ottawa market didn’t benefit as much as other cities from the housing boom (could be the cold weather perhaps?) (or the fact that it’s a government town and people tend to be a little more conservative?). This in itself will act as a ‘buffer’ against any downturn seen across Canada because it didn’t go up as much as other cities.

2) Also acting as a buffer is the fact there are 500,000 employed people in the region, most of which are municipal/provincial/federal employees (thus adding to the stability). In fact, over the past 50 years, Ottawa has only ever had minimal downturn in prices.

3) people here are getting sick of commuting from the burbs, which has lead to decent increases for places close to downtown (hence your reference to Vanier and surrounding area). However, it is also a family oriented city, and there will continue to be demand for the burbs (good schools, great amenities, very safe etc.).

If I were you, I would look at historical metrics to help aid your decision.

Multiply your combined gross salaries by 3.5. That is the MAX mortgage you should have, and this equation assumes historical/average mortgage rates of around (I’m assuming) 7-8%.

So it sounds like you guys could easily buy some land, put up a decent building and do OK (you’re not going to lose your shirt if done properly, but don’t expect a huge windfall from this endeavour). Have a realistic outlook, revel in the process and you’ll lead a happy life.

#189 Bottoms_Up on 10.04.10 at 11:11 pm

#130 gordholio on 10.04.10 at 1:35 pm
——————————-
wow. thanks for posting that. nice to see that land in vancouver goes for $500 per square inch.

#190 Increasing that 1% on 10.04.10 at 11:51 pm

Re: #182. Love this Blog

Sorry for my ignorance.
I’ll get right on that Starbucks solution, thanks for the advice.

#191 Onemorething on 10.05.10 at 12:01 am

Nos LMV, great link on back on TBL’s re: Currency Crisis.

I’m out of USD as of 81.88 some weeks ago, all in CHF which is outperforming as hedge.

USD/CHF – CHF/HKD – EUR/CHF all moving to CHF advantage.

I see a lost decade for the consumer in the western world and currency manipulation or not, China is in big trouble as again the Gap is a decade away for domestic growth.

Stay away from anything pegged to the USD, any currency of market dependant on Western consumption.

If paper currency is under serious pressure, dont expect paper Gold to be worth anything either.

REAL GOLD if you have it might be worth something if you can keep it from the Government based on your purchasing trail OR from your neighbors.

REAL SILVER might go to 15x GOLD now at 60x. At least you can trade it in denominations that work for everyday purchases.

This is worst case but bet wheels to come off November to some extent, be ready for anything!

#192 CrowdedElevatorfartz on 10.05.10 at 1:09 am

#182 Love This Blog
Dont worry about the folks that think their store bought meat is better. Perhaps before they judge you, they should vist a beef farm where the cattle are kept inside in pens, force fed for 9 to 10 months, pumped full of antibiotics to combat the diseases of their surroundings and when they have reached “optimum size for feed “, trucked to a slaughter house. Never seeing the sun unless their loaded on the trucks during the day.
At least the deer had a chance to run.

#193 Victor from Vancouver on 10.05.10 at 1:35 am

As an East European currently living in Vancouver, I’d like to share some of my observations.
First, how deflation looks like in my home country (Ukraine): real estate peak was in the fall of 2008. Interestingly, people living outside of Ukraine, such as myself, identified the bubble at least 1 year before it burst but majority of people in Ukraine were in complete denial until it got really so bad that it was impossible to ignore it anymore. All references to US RE market, and few other markets that already tanked by that time were ignored because “it is completely unrelated to Ukrainian RE market”. I sold my apartment in small town in Ukraine for $70,000 US in December 2008. Few weeks after that I saw similar apartments listed at up to $100,000 and I was really puzzled. It didn’t make any sense but people kept increasing listing prices even though sales virtually stopped. This strange situation with unreasonably high prices lasted for very short period, probably 1 month. After that everything crashed. 50% down within few weeks. Again, it looked weird as most sellers kept asking prices at peak levels. Nobody paid these asking prices, real offers were 50% off, sometimes more. It took another 2 years for the sellers to get accustomed to new price levels, so now the listing prices look more or less realistic. Apartment that I sold for $70k can be easily bought today for $30-35k. A house that could cost $100-150k in 2008 is now about $50k.
Now, you would think that affordability in Ukraine improved. The problem is that with these new low prices the affordability actually declined. Peoples incomes dropped even more than RE prices. Food, utilities and taxes are the only things that keep getting higher. Everything else keeps going down. It is inflation and deflation at the same time.
Canada is not the same as Ukraine. Unlike Ukraine, Canada has huge natural resources and much more stable political system. Still I think my Ukrainian experience is relevant. I think of Ukraine as a small scale model that shows general trends typical for all countries going through the current economic recession. I think that Canada will experience similar problems but in milder version. In a very simplified way it will look like: food, utilities, taxes- up, incomes and RE prices- down.
Another observation from Ukraine is that RE price correction is very uneven, it really depends on location. The greatest drop is in small and medium towns and in bad areas of big cities. In the areas where rich people tend to live, especially in well established neighbourhoods that have some history, price declines are not significant, probably 10-20% off peak.
Thus, I am currently sitting on some cash made on successful RE sale in Ukraine. I can’t decide whether I should buy something in Vancouver or it is better to wait. I do notice similarities between Fall 2008 in Ukraine and Fall 2010 in Vancouver. However, there is a significant difference too- the significant inflow of immigrants to Canada and to Vancouver specifically. This factor makes it really hard to analyze the situation here. Another great factor is government involvement. In Ukraine government simply didn’t care because majority of Ukrainians don’t have mortgages, so there is a very small percentage of voters that are directly suffering from RE crash. In Canada the situation is just the opposite- most people are in debt so government will do something to keep high RE prices. At the same time, situation in the USA is very similar to Ukraine (at different scale of course) so probably some fundamental market forces play the most significant role and everything else is less important. My own estimate is that moment of truth for Canadian RE will be November-December 2010. By that time the new trend, whatever it will be, will become visible. And I plan to make my decision based on that trend.
Regarding rich East Europeans: I think we have almost zero rich East Europeans in Vancouver. I know lots of immigrants from Ukraine, Russia, former Yugoslavia etc and no one of them is rich. Typically all they can bring to Canada is $50-100k, and that money is made by selling their property in their home country. Enough for downpayment but definetely not enough for buying properties in Canada for cash. Real rich Russians and Ukrainians, I mean people that can buy $1 million property for cash, have no interest in Canada whatsoever. Rich Russians buy properties in Switzerland, Mediterranean coast, some can buy properties in New York or London, i.e. places that are “fashionable” and traditionally associated with wealth.
I need to admit though that I have no idea what rich Asians might think about Canada and Vancouver and what their reasoning might be.

#194 happyrenter on 10.05.10 at 9:43 am

“So I ran the numbers, assuming a 5% drop in rent prices every year, increased cash flow (mortgage is much lower than rent) invested at 5% compounding rate of return, opportunity cost” prof.anon oct 3. 2010 posting
IN your ‘own vs rent cost benefit analysis’, I didn’t see, but maybe missed, where you compared your financial standings after 5 years , if you had invested the total monies spent to purchase, ( including the reno loc loan) over the 5 years… ex. Purchase price 85,000 plus 30,000 for renos invested over say 5 years,, including the interest you would have paid out ( may I suggest contacting Garth for investment advice/contract) We also did a similar analysis, and took our 250,000 from the sale of large home, and are renting, a modest home on large acreage ( one we could not afford unless we spent over a million dollars to own currently,) and we rent the ‘carriage house) which is new and the envy of all our boomerswhoown large empty homes friends) for $850 /month rent. The deals are out there if you look (to rent). Anyway, our invested money may double in 10 years, and we will not have the headaches of home ownership in our later years.. and gain a nice income from the investment as well. Make sure you include all the cost/benefits in your analysis.

#195 jess on 10.05.10 at 12:59 pm

Pat
in the the eighties … and by the way mr .Buffet owned an asbestos mine at one time
This is a global view of asbestos
http://www.publicintegrity.org/investigations/asbestos/

#196 Basil Fawlty on 10.05.10 at 8:09 pm

Some September commodity statistics: Soybeans +9.5%, Rice +10, Oil +11, Corn +12.2, OJ +13, Cotton +17.5, Sugar +19.3, Gold at all time high, Silver 30 yr high, Copper 3 yr high.
Is this inflation or am I a monkey’s uncle?