Kiss this

While you can still buy a perfectly okay house in the belly of the Annapolis Valley for $250,000, people here worry. They, too, know change is in the air.

In fact, the average home price across Nova Scotia, according to the local realtor cartel, is $324,928. The average household income is $61,980. Which means the average home costs 5.2 times income – slightly higher than the national norm (5.1), close to non-affordability levels in Toronto (5.5) and of course higher than the multiple the US market hit (4.6) before it collapsed four and a half years ago.

Now, compared to Kelowna (7.2) or delusional Vancouver (9.3), this all seems quaint. But the reality remains that most of the people who sat in a room outside Wolfville listening to me last night have one big thing in common with those who packed a Vancouver ballroom some days ago – Re/Max wants to fool them. And so does every big real estate outfit in the country, it seems. And shame on them.

The facts seems to speak plainly enough. Last month house deals in Toronto, the country’s biggest market by far, were down 23% from year-ago levels. In Vancouver the drop was as predicted here days ago – 40%. In Calgary, SFH sales dumped 24% while condos crashed 37%.This is the fourth consecutive period of double-digit decreases in the major markets, which means 2010 will likely end with a string of six back-to-back losing months – the first, wizened old geezers tell me, in more than two decades.

This is a disaster. And although average prices are up in some places (in the GTA it’s ahead of last year by 5%, to $427,329) this has more to do with statistical anomaly than horny buyers. Real estate markers live and die on volumes, not prices. So when a market (like Victoria) has the worst sales in twenty years, it should strike fear into the hearts of those with the bulk of their net worth in one house at one address in one city, whether it’s Kamloops or Mississauga.

So how do you slap lipstick on this pig?

Well, start by calling the maquillage pimpers at Re/Max. These guys can make a corpse look hot.

Trading credibility for a headline, the company issued a full-frontal media release claiming the national real estate market is on a roll. “With the diminished risk of a W recession occurring, rebounding commodity and equity markets, and more positive economic data emerging daily, the outlook for the residential housing market has vastly improved over the past three months.”

While I have no idea where the ‘W’ recession thing came from, the ‘positive economic data emerging daily’ is a coarse fabrication. As I detailed here yesterday, even jolly little F is warning that any economic boom we might have had is kaput, while BoC government Mark Carney has gone all goth on us. Household debt is out of control, he growls. “This cannot continue.”

And while stocks markets may be prancing higher, with gold and oil, copper and potash all swelling in value, this means squat to the average Canadian household, when the bulk of net worth is sitting in a house. No diversification here. No asset allocation. No tax avoidance strategies. Just one paycheque away from holy crap.

Against this backdrop, realtors are disgracing themselves.

Says the Toronto Real Estate Board, trying to divert us with a shiny thing: “Simply considering home prices relative to incomes does not allow for an accurate analysis of affordability. The share of average household income going toward a mortgage payment on the average priced home in the GTA remains within accepted lending guidelines.”

Translation: So what if house price inflation has outstripped wage gains? These cheap mortgage rates mask all that. So where’s the issue, dude?

Well, these rates won’t last, of course, which means big troubles down the line in 2014 or so. Worse, sales declines now mean price declines later, which brings negative equity. What a shock to the army of young property virgins who were told real estate always goes up – mortgage costs doubling on houses which are worth less. (In fact, it’s  interesting to note the number of first-time buyers is tumbling around the world as housing turns turkey and demographics get decidedly ugly for real estate.)

By the way, I’m researching investment property later today along the coveted south shore of Nova Scotia. Gentle sea breezes. Craggy cliffs. Historic coves. New price stickers. Mermaids.

I’ll share what I find. Fins and all.

193 comments ↓

#1 Old_is_Gold on 10.05.10 at 10:33 pm

Costco Is Now In The Apocalypse Provisioning Business

Boy, am I glad that I am no longer the only one with Apocalypse on his mind. Garth, you can now relax about my ‘Doomsday’ comments since it appears that ‘doomsday’ is going mainstream. How about reviving that Xurbia site?

#2 El Magnifico on 10.05.10 at 10:34 pm

The real estate board of greater Vancouver is no better. In their statement realeased today, they systematically compared 2010 sales number with 2009 AND 2008:

“Sales of detached properties in September 2010 reached 866, a decrease of 39.1 per cent from the 1,423 detached sales recorded in September 2009, and a 58.6 per cent increase from the 546 units sold in September 2008”

By not mentionning that 2008 was the worse year ever in terms of sales, they are manipulating the readers by implying that, 2010 numbers being between the 2008 and 2009 numbers, 2010 are normal or average.

I advised on another blog to compare 2010 numbers with the average of the past 10 years, which would give a better picture of current state of the market. Here is what the blogger (who is a real estate agent) answered:

“At some point statistical landmarks are only that and carry the equivalency of saying life was good in the 60′s or they didn’t do that when I was kid. They do not reflect the reality of the world we live in today. Really, what relevance do numbers beyond a few months actually have today in a world of WIFI, ipad, iphones, skype, blogs, Facebook and drone airplanes operated by a pilot thousands of miles away?
I think it is very little and suggest that Vancouver’s real estate market is more ‘in the moment’ than I have ever experienced in the past 27 years.”

What the hell “in the moment” means???
And it’s all because, in today’s world, we have facebook and Wifi? Seriously?

Here is the link to the conversation:
http://www.yattermatters.com/2010/10/rebgv-month-end-report/#comments

#3 Love this Blog. on 10.05.10 at 10:35 pm

Scathing Garth. Absolutely scathing. The attack on your blog is nothing to the fallout when the REALTORS read this one!!

Move your bunker to Sask man!!

At least you know I can keep “you and yours” in deer meat”

Good article.

#4 Pat on 10.05.10 at 10:44 pm

“… Nova Scotia. Gentle sea breezes.”

gentle? :)

#5 JM in London on 10.05.10 at 11:09 pm

Here’s something very interesting from a shadow contact:

Internal memo at one of the big five went out to underwriters (the ones who verify & rubber stamp loans) to question 1) Appraisals and 2) ever rising sale prices on properties more closely. It seems innocuous enough unless you realize they’ve been operating within accepted parameters of 2-5ish %/yr increases. This is several levels below the executive office meaning there is likely more to come.

Also means there is more info (attempting to ferret) higher up the food chain driving this memo…

The refinance party for those using housing as ATM’s may be at the last dance stage…there are many who are hoping the DJ chooses Stairway to Heaven or better In-A-Gadda-Da-Vida (most of the longer prog rock just wouldn’t be played remember) as the stop watch is ticking.

#6 45north on 10.05.10 at 11:09 pm

This is the fourth consecutive period of double-digit decreases in the major markets, which means 2010 will likely end with a string of six back-to-back losing months

I was wrong. I said that when real estate sales declined another 25% in September there would be a political storm. Well 23% is close enough to 25% but I don’t see any particular storm. The politicians are following the banks “there’s no problem until you announce a problem”.

#7 dark sad person on 10.05.10 at 11:14 pm

While I have no idea where the ‘W’ recession thing came from, the ‘positive economic data emerging daily’ is a coarse fabrication. As I detailed here yesterday, even jolly little F is warning that any economic boom we might have had is kaput, while BoC government Mark Carney has gone all goth on us. Household debt is out of control, he growls. “This cannot continue.”

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

BOJ May Have Fired First Shot in New Round of Global Action

The Bank of Japan may have acted first in a new round of central bank action to prop up the global economy as recoveries in industrial nations falter.

The unexpected decision by the Japanese central bank yesterday to drop its interest rate to “virtually zero” and expand its balance sheet follows the U.S. Federal Reserve’s move toward more unconventional easing. Bank of England officials will consider further stimulus tomorrow, while the central banks of Australia, Canada and New Zealand are among those now holding fire on further interest-rate increases.

After embarking on the most aggressive policy tightening in the Group of 20, the Reserve Bank of Australia unexpectedly left its benchmark rate unchanged yesterday at 4.5 percent for a fifth straight month. Bank of Canada Governor Mark Carney, who has overseen three rate hikes this year, said Sept. 30 that “the unusual uncertainty surrounding the outlook warrants caution.”

http://www.bloomberg.com/news/2010-10-05/central-banks-may-follow-boj-in-new-bond-purchase-round-as-growth-falters.html

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

I said when i first come to this blog-
It’s all about the deflation-the $ and the BMR would be at ZIRP for years-

(great call DSP)

clap clap clap clap

#8 Tonguestump on 10.05.10 at 11:16 pm

Ya thanks keep us all in the loop with those NS findings. Great post tonight.

#9 Crash on 10.05.10 at 11:23 pm

while BoC government Mark Carney has gone all goth on us. Household debt is out of control, he growls. “This cannot continue.”

So Carney goosed the economy with low interest rates to get people to spend, then the outcome is where we are now. Then he scolds us about our houshold debt. Where is the logic in this?

#10 Antonio on 10.05.10 at 11:27 pm

For those of you who are griping about why average prices go up while sales drop- e.g. in Toronto, check out the attached link. It shows historic trend of average price versus sales in Miami pre and post crash. Notice that as sales caved prices were steady to slightly increasing. Then at some point prices caved. The same is happening here. SO no worries the crash will come. The only question is when.

http://www.trulia.com/real_estate/Miami-Florida/market-trends/

#11 Crash on 10.05.10 at 11:28 pm

#2 El Magnifico
Larry has been a bit sensitive lately. I appear to have been banned from his blog. I guess the pressure is getting to him.

#12 Foggy on 10.05.10 at 11:33 pm

That $325,000 average NS house price looks awfully suspicious. There are a hell of a lot of homes out here under $200K and a sizeable quantity under $100K. I’ve seen higher end homes take one year or more to sell. Not sure what the reason would be to embellish the average, but it certainly looks suspect.

#13 Peter Pan on 10.05.10 at 11:35 pm

Speaking of Property Virgins… Sandra Rinamato must be one of the worst real estate agents out there… She’s always telling them “Don’t think about the debt you’re taking on, think about how much house you can afford.”

I’d love to see her “Virgins” 5 years from now… I’m sure they’ll have realized they were royally f’ed over by Sandra.

#14 nonplused on 10.05.10 at 11:37 pm

Right on banging them on the head about the price/income ratio Garth. A mortgage may be affordable at 2%, but not 8%, for a certain payer. In the short term, 2% may rule, but in the longer term rates vary. That’s why the “times income” rules came to be. They represent a level the borrower could survive long term, with lean times at high rates and good times at low rates. Now we have moved to the point where we have lean times at low rates and absolute disaster awaiting us in what would normally be “normal” times. And it only gets worse when they decide to stop the money printing. The new Volker isn’t identified, but he/she will emerge eventually, and then the SHTF.

#15 gutcheck on 10.05.10 at 11:46 pm

More spin from Winnipeg.

http://www.winnipegfreepress.com/breakingnews/Winnipeg-home-sales-going-upscale-104350369.html

#16 gutcheck on 10.05.10 at 11:48 pm

And come speak in Winnipeg.

#17 Alan on 10.05.10 at 11:48 pm

If indeed the RE agents are trying to skewer perception, they are no different to the forces at work on this blog to create fear. Two sides, one ambition each. Kinda sounds like the forces of good and evil. The world never changes. The oldest story in the world, played out daily in real life and the movies.

#18 Kilt on 10.05.10 at 11:52 pm

Year ago levels were nearly record levels in most places.

How about comparing it to a 5 year average. You wonder why all the gloomers come here when you skew stats to scare people into buying your books.

And still no mention of prices. What about supply. Is supply up relative to a 5 year average. I haven’t looked at the Sept numbers for Greater Van, but the Agentwill site
http://agentwill.com/weekly-stats/
indicates that we are not even starting to pull back in prices while supply is dropping. New listings are down when compared to the last 2 years.

Why big trouble in 2014. Isn’t 2015 about the time when are wages should catch up with the bubble market. You can still get a 5 year fixed for less than 4%. And if Japan (and the US) is any indicator, rates will be low for a long time.

Kilt.

#19 Grandpa Grinch on 10.06.10 at 12:10 am

EXcellent article today on Zero Hedge regarding Canadian housing:

http://www.zerohedge.com/article/guest-post-primer-6-great-connection%E2%80%A6

#20 Dumfukcanuk on 10.06.10 at 12:31 am

Holy sh*t. canadians ARE different. They’re just f*cking stupid to actually believe the economy was doing so well. The economy, housing market, and growth in wealth has been nothing but a farce. This country has been lying to its people. The U.S. DID NOT. The U.S. is transparent (for the most part), and therefore started this process of adjusting over four years ago. They weren’t the problem, people. They started the trend that the GLOBE was out of whack, and they started the correction. Our housing market here is far less sustainable than what was ever witnessed in the U.S. Yeah, we’re different. Like I said, we’re just acting stupid and have been for years.

#21 Reg on 10.06.10 at 12:52 am

As a renter and hopefully one day first time home buyer I can tell you this market sure is frustrating.

I am mid 20’s, paid off the student debt, making 70k a year and now I am stuck… everyone but this blog keeps telling me to buy a house. Been sitting on the sidelines for 2 years just waiting because I don’t want to be the last guy holding the bag and losing my shirt.
All your logic for not buying a house right now makes sense but at the same time it’s like I am putting life on hold in this stupid apartment.

I see guys at work only a handful of years older than me. They bought nice little 900 sq ft bungalows for a fraction of today’s prices. They are happy and settled with only a few years left on the mortgage. They can afford toys and vacations every year. I would have to sign a 35yr contract to have anything close to what they have. I will be eligible for retirement by then.

The standard of living in this country for anyone starting out in life has been extremely lowered. All because of greed and irresponsibility. I sure hope that one day things turn around and bite all those greedy people in the @$$! And I hope all the boomers that spent like drunken sailors all their lives don’t get a penny for their houses and end up living in my little apartment while working at Walmart.

Please Garth will you be right!

#22 realpaul on 10.06.10 at 12:59 am

Re Max may think they are fooling you…but they are only fooling themselves. They have forgotten the old adage of the fool in paradise ‘grass never grows to the sky’. In every pyramid scheme you have the enthusiastic pumpers at the top…just shy of ‘winning’ the prize…they will extoll the virtues of shit on a blanket to the new comers at the bottom so alluring is the proximity of the prize. Unfortuneatly, the highest expectations have further to fall than anyone. One the top of the pyramid we have the pimps…like Re Max…in leased Beemers and just into a million dollar mortgage…on the bottom we have the wide eyed snot noses who see the car and the house as a lifetime of sunny weather and cocaine.

One lives on a dissapating ether and clings to any lie that might springboard back into the dream the other ends up in a 500 sq ft litterbox on the 12th floor of a shooting gallery….both hopelessly addicted to the past.

#23 VancouverGoinUP on 10.06.10 at 1:03 am

Delusional? Not in the least. Anyone tried to buy a house in Shanghai recently? Vancouver going for dirt dirt cheap and everyone but Canadians get it. Canadians have debt to deal with and are just plain puzzled why Vancouver is so expensive. Fact is Vancouver is dirt dirt cheap. Watch and learn
*****
Now, compared to Kelowna (7.2) or delusional Vancouver (9.3),

#24 Timing is Everything on 10.06.10 at 1:17 am

Garth said – “This is a disaster.”

This is not a ‘natural disaster’. It is a ‘man-made’ disaster.

So, I’m trying to figure out who you are trying to save?… from this disaster? The young property virgin who just bought their first home, the illiquid babyboomer? the incredible shrinking middle class? all of the above?

One must ask : If it is a disaster for those folks, who is it a success for? Is it a system failure or merely a purge of the inefficiencies? Is it disaster by design? If so, by who?

If the folks listed above are the losers, who are the winners, in this ‘disaster’?

#25 Spin Doctors alive and well in Kelowna on 10.06.10 at 1:58 am

Here’s the latest story from Kelowna’s TV station titled “Living in luxury”.

http://www.chbcnews.ca/video/index.html

Not once do the mention that year over year sales have gone down 45.30% as shown by the OMREB, see the report below

http://www.omreb.com/files/09%20-%20CO%20Statistics%20September%202010.pdf

This news report has totally skewed the statistics in the favor of real estate, talk about bias reporting! I saw the exact same reporting in the States prior to the meltdown.

#26 jed on 10.06.10 at 2:17 am

Insanity is still prevailing in Australia, I had a scary moment at work today – an older woman (pushing 60) in my section of the office announces she’ll be taking a day off a week over the coming six weeks. We all thought it was some terrible medical condition she’d be having treatment for – unfortunately it was worse – her and the husband were buying a new house at $650k when their current one would be worth $350k and owned outright.

Oh and it gets worse – at lunch she left for the bank to organise finance. It’s set for a short contract and they want to move in soon.

Oh and did I mention the house being bought is 15.6x earnings in the town I’m in… I think she’ll be at work longer than me and I’m half her age.

#27 Edmonton Rigman on 10.06.10 at 2:32 am

In Fort Mac we’re pretty much running at full capacity it seems. Believe me the news ain’t out yet since there has been so much negative pressure on the Oil Sands here in Alberta. We’re on the down low right now, but it’ll be main stream soon. Bejing alone is selling 2000 new cars a day. The price of oil & gas could expode any month now. It’ll send food cost up higher too, which in turn will spiral interest rate up & up to highs we have never seen before-in decades. It’s out of control the amount we are starting to export to Asia. It really starting to make up for the decline we had in the USA. At least we won’t be going into a depression in ALberta, but with everyone so in debt here it’ll really tighten up spending for the middle class (what’s left of it here anyways) as interest rates soar to try to control the inflation the runaway price of energy may bring!

#28 Numbers. on 10.06.10 at 3:18 am

Love the line

Says the Toronto Real Estate Board “Simply considering home prices relative to incomes does not allow for an accurate analysis of affordability.”

Ok, so income does not count as an accurate way to tell if you can afford something now? Is it how many SUV’s you have or marbles?

Crazy. Why anyone would trust the “news” that comes straight out of a house salesman’s organizations mouth…

#29 Brian1 on 10.06.10 at 4:03 am

We do not have to read many of the useless comments here, but Garth does. I feel sorry about that. I like it when he is able to give tin foil alerts.Saves me a lot of time. I thought that by being a speed reader I would not be able to ignore, but it works. When I see their supporters I again ignore because, in reality, they too have little to offer. Is there a way to tell when a ‘you tube’ is educational or a song before you view it? I am very busy, aren’t you? Sliding by das and bill pete.

#30 SaraBeth on 10.06.10 at 5:14 am

The Toronto Real Estate Board said in part…

“The share of average household income going toward a mortgage payment on the average priced home in the GTA remains within accepted lending guidelines.”

ACCEPTABLE TO WHOM you self-centered pukes?

#31 Shoggy on 10.06.10 at 6:01 am

@ #21 Reg

Dude, you serious that your life is on hold all because you rent? I suggest that you are seriously lacking in the “life” department. There’s more to do on the weekend than just going to Home Depot.

#32 Brian1 on 10.06.10 at 6:02 am

They are already changing their monikers just to trick me. Just shows how childish they can be. I hope they don’t slip some kiddie stuff by you Garth. We have caught stuff before.

#33 C on 10.06.10 at 6:09 am

For you GTA real estate bears out there don’t be too discouraged by the September 2010 numbers just released. I just took a peek at http://www.guava.ca to compare the September 2010 numbers to the September 2008 numbers and they had 3 things in common:

-Average prices went up in September
-Median prices went up in September
-Total sales went up in September
-Days on the market went down in September

Remember the real estate market back in 2008 from October to December was a disaster. We are tracking a similar path this September as September 2008. So don’t be buying the Kook Aid Remax is pumping lately.

Real estate is like a cruise ship. Once it’s heading in a certain direction it takes a lot of energy to go the other way. The cruise ship is heading south.

#34 C on 10.06.10 at 6:13 am

#10 Antonio

Beauty post!! That’s what I like to see, good hard data!!! It still baffles me how us Canadians ignore what happened and is happening down there???

#35 timbo on 10.06.10 at 6:34 am

Fraud comes to light when bubbles pop….

Can you imagine banks who went around the law and cut corners in the boom now do not have the right to foreclose on homeowners. To add they hire law firms to forge documents to claim title.

http://www.youtube.com/watch?v=ruEeuskrAE0&feature=player_embedded#!

this is huge and this cannot be hidden.

Canada’s banks must have exposure to this insanity.

#36 C on 10.06.10 at 6:43 am

#23 Vancouver Goin UP.

China has over a Billion people. Canada has 34 million. Slight difference.

#37 Sherri on 10.06.10 at 7:10 am

IS that you in the picture holding onto your fininacial paper(debt) assets Garth??

And…the shark is the Bullion bankster boys.

#38 Kevin on 10.06.10 at 7:24 am

In past practice central banks have been required to keep only money and near money aggregates on their balance sheets.

Japan announced yesterday their own version of quantitative easing that will have them directly purchasing bonds and stocks on the free market.

This being the case a few questions need to be asked.

1./ Did the definition of money just change to include stock and bonds?

2./ Are there any free markets anymore with all governments routinely interfering in the works?

3./ If interest rates are the price of money and governments set them did we really have free markets in the first place?

4./ If the government can change the definition of money and hence the rules of the game at any time is there really any danger of deflation?

5./ Is it now inevitable that the US will follow suit?

#39 Contrarian Canuck on 10.06.10 at 7:27 am

Connection between house price increase, consumer spending, and employment…

http://financialinsights.wordpress.com/2010/10/05/primer-6-the-great-connection/

#40 Devil's Advocate on 10.06.10 at 7:34 am

I’ve not read the blog post responses to this Garths most recent editorial “Kiss this” nor will I. While Garths topic is more of the same and his examples inflammatory more than true depiction of what is taking place his underlying message is appropriate – people need to 1.) Spend within their means 2.) Save diversely.

This place is toxic. One need not read the comments of the Blog DAWGS to know that 80% of them are irrationally pessimistic if not downright wantonly lusting for a major financial crisis. And if they continue they will get it – localized to their own sorry lives embroiled in self pity and hope that they can take advantage of another fool of a different colour. To them they will get what they deserve… spoiled lives and unnourished souls fed the toxic waste of others.

These “vultures” don’t want to work; they want only to feed off the carcasses of another. I learned at a very early age that I can have what ever I want… I just have to work for it. We are all, to a point, just as lazy as the next guy. Some things are just not willing worth working for. Our free time has value too. Every non-working moment costs us money and to a one degree or another is very much worth it. Some things are worth our time… some things are worth the work, the very best of which are to be had at no cost but that of the well deserved time off, for leisure time must be earned too as it has a cost of its own.

True story: I came to understand that I could have anything I wanted when I was a child of 12 years age. I was walking home to the half duplex my parents rented on a busy road in a less than desirable part of town from a strict landlord. I spotted a house, modest but nice, that seemed to call home. I told my parents about it and how nice it would be if we had a “home” of our own like it where I could have a dog. Well long story short we ended up in that very home. I had to make some sacrifices of my own along the way to help my parents afford that “home” which others my age others might not have had to theirs, but it was worth it. It took work on all our parts but my sisters, my brother, my mom and my dad had from it a home, a modest but nice home, we could be proud of and enjoy along with our dog Max. Ever since then I looked at “things” in a different light. Occasionally now, some four decades later, I will walk by that home from time to time and remind myself of the lesson I learned back then when that dream which seemed so far away came to fruition… anything is possible.

You can have anything you want… it all comes down to work. Yes luck might get you there, it “might”, but good old fashioned work will get you there for sure and every time. Just never give up, for if you do clearly you do not want it enough that it is worth the work you must do to get it. They don’t call it work for nothing for “work” has cost and benefit.

Things are not as bad as you might be led to believe. Not nearly. Within difficulty lies opportunity and I would suggest, in this world where so many have lost their way and seem unwilling, for those willing to work there is a world of opportunity without competition.

#41 Soylent Green is People on 10.06.10 at 7:42 am

Ahhh, I wrote a really nice post last night which I posted here but it’s gone missing. It was a beautiful piece re how Harper is hated throughout Canada by everyone. This website was very very slow and basically not working.

p.s. That’s a french word that means make-up.

#42 S.B. on 10.06.10 at 7:55 am

To Bill in Ptbo you may find this as interesting:

http://af.reuters.com/article/oddlyEnoughNews/idAFTRE6942NL20101005

LONDON (Reuters) – Anyone who owns a laptop computer can now fight crime from the safety of their home and win cash prizes for catching thieves red-handed, under a new monitoring scheme that went live this week.

The service works by employing an army of registered armchair snoopers who watch hours of CCTV footage from cameras in stores and high street venues across the country.

The scheme immediately drew criticism from civil liberties campaigners who say it is more evidence that Britain has become a “Big Brother” surveillance society with CCTV on every corner.

#43 BM on 10.06.10 at 8:00 am

Hi Garth,
I read your blog everyday without fail. The most interesting information on real estate and investment. You mention in the last paragraph about investment property. would appreciate if you could share some more thoughts about it. IF one is taking care of diversifying one’s portfolio by getting into stocks, preffereds, ETF’s as you advise in the previous posts, Can one also at this time (that the property prices are on a slippery slope) look to purchase a residential home in addition to ones own home for rental purpose OR should one wait for the 10 or 15% drop before going into buying investment property for residential rental only purpose.

Would definately like to hear your thoughts on this
regards,
BM

#44 Jack on 10.06.10 at 8:11 am

Enjoy the East Coast. My mother’s company home in Glace Bay raised a family of 12 there. Nice coal fired heating and I think the screech still is still in the coal shed. I think you get get it for under $20k. But prices in Halifax are high and rents are also out of touch (almost as high as a mortgage). At least in Toronto you can rent a townhouse for $1,200 on a street with $800k to $1,000k houses lining it.

#45 Save Yourself on 10.06.10 at 8:15 am

Oakville, Milton and District Real Estate Board President, Jeff Mahannah. “I expect that in 2011
we will see a levelling off in home prices combined with increasing household incomes to offset
the effect.”

Seriously?

#46 Bill ( Peterborough) on 10.06.10 at 8:18 am

Re# 17 Alan

If indeed the RE agents are trying to skewer perception, they are no different to the forces at work on this blog to create fear. Two sides, one ambition each. Kinda sounds like the forces of good and evil. The world never changes. The oldest story in the world, played out daily in real life and the movies.

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

Brilliant comment Alan.

Most real estate agents do not care about their buying client’s. All they worry about is their own commission /
paycheck.

Unfortunately alot of the first time home buyers did not go through or were to young to remember what happened during the last bubble ( late 80’s, early 90’s)

Now with other variables in play : Job losses to other countries, pay cutbacks, higher cost of living, taxes going up ( both property and income )…

Banks pre-approving people who in all reality should not be pre-approved.

Anybody with common sense and some sort of morals see’s that this is a recipe for financial disaster.

So why would most of the realtors out their persuade their clients to buy, creating bidding wars on overpriced , unaffordable(in the long run) real estate.

Unless of course they have no morals, principles… being far more destructive than the so called doomers on this site.

I have only used 3 real estate agents in all our homes, that were either bought or sold, depending on the areas we built. 20 plus years doing business with them and they are all welcome to sit at my dinner table.

I wonder how many new home owners will feel the same way with their realtors down the road.

So logically it is the majority of realtors out there who are evil and the so called doomers are good. After all we are not setting up people to be financialy sucked dry, for the most part.

#47 Rick in Japan on 10.06.10 at 8:23 am

#23 VancouverGoinUP Nosty Jr. Is that you?
Just because you have egg rolls every once in a while, doesn’t mean you should be comparing apples to (mandarin) oranges. However, Shanghai is currently in a real estate bubble, as are many places in China.

#48 Etienne on 10.06.10 at 8:25 am

The funniest is in this article: http://www.ctv.ca/generic/generated/static/business/article1742799.html

“From the report: * “All markets reported a surge of 20 per cent or more in upper end home sales. Sixty-eight per cent of markets saw upscale home sales climb in excess of 40 per cent, while 21 per cent boasted triple-digit gains.”

BUT, they changed the level at which it’s considered upscale… from the same article:

“It is difficult to make comparisons to the last market update, released in April, however, because luxury comes cheaper in Tuesday’s report – the bar was lowered by $500,000 in Vancouver and Toronto, for example.”

This is really taking us for stupids, saying high end home sales are up when you change the definition of high end home price in order to have increased sales numbers!!!

I can’t stand realtors bulls__t anymore!

#49 john m on 10.06.10 at 8:31 am

#20 Dumfukcanuk on 10.06.10 at 12:31 am <<<<<< sad but ohhhhhhhhhhh so true!

#50 fancy_pants on 10.06.10 at 8:47 am

We are in a delicate spot with RE as historically prices are well inflated based on people’s earnings. At the other end of this teeter-totter is the historically low mortgage rates. For now it is balancing. Interest rates go up and the teeter totters.

I do have to say that the BoC was in a tough position. US RE collapses and they lowered rates to prevent a complete financial collapse. So Canada had two options a) leave rates and take a huge trade deficit hit which would also kill jobs OR b) lower rates to keep the trade balance in check with our biggest trading partner. So they chose a. Understandable really. The mistake that was made was mortgage qualifications should have been tightened along with the give away rates and not loosened. They see the mistake now but hindsight is a wonderful thing.

One assumption I do see thrown around here though is that rates will go up. Nations are battling to devalue their currencies to give them a trade surplus advantage and to keep jobs. When the hammer falls will a nation’s govt choose to up interest rates or allow inflation to run a little? The US would be happy to inflate their housing prices again, I don’t see rates climbing there soon. Couple that with their QE monetary policy and I see that side of the teeter totter holding pretty good. They just got in too deep to the allow the “inflation to run” part to kick in yet.

So I see some of both deflationary and inflationary pressures. And we are so tied to our big cousin to the south. Given so many variables it really does come down to the crystal ball. There will always be someone to say I told you so. I see a bear on the short to mid term picture for RE in Canada but longer term I see a bull chasing it down. Too much fiat currency being printed for the bull not to be giving chase.

#51 pablo on 10.06.10 at 8:52 am

OK so the housing bubble is (or is on the brink of ) bursting. Gold has broken 1300/oz and the price is set in London by the evildoer; Rothschild. Silver is what, around 25/oz and it’s price is set by j.p. Morgan chase bank in the u.s.a. The bond market is overpriced, and the stock market is controlled by the evil investment banksters and hedge fund honcho’s using high speed computers and logarithmic programs to squeeze every fraction of a penny profit they can nab……It’s hard for the average Joe on the street to feel safe putting his money anywhere, whether he’s concentrated in one or two asset classes or diversified up the whazzo it looks like the game is rigged no matter where he goes…. Wonder what would happen if we all stopped playing ?
What kind of a shitstorm would that create for the ruling class?

#52 Ron Burgundy on 10.06.10 at 9:03 am

Garth,

Are you able to explain why the BOC would decide to increase interest rates with all of the trouble ahead?

They’ve always been pumpers of RE so why would they stop now?

It is hard for me to explain this to my significant other.

It appears to her that all your predictions rely on the unpredicability of F and C (BOC). What makes you think they won’t follow (as always) the US and keep interest rates low so as to not make housing unaffordable when people renew their terms in 2014 and beyond?

That question has been answered. We have a credit crisis due to excessive borrowing . The bank is now trying to turn that tap off. — Garth

#53 Contrarian on 10.06.10 at 9:06 am

I’d like to point out that house prices in the GTA is up $16,000 from August. Seasonally adjusted, it’s down a tiny bit. Still, the impending “collapse” seems to have slowed a little.

The market probably won’t fall apart like some of you seem to be implying. It will merely continue on a slow painful gradual decline. No 25% price drop by the end of the year. Not 50% by 2012. This “correction” will take a decade, with house prices staying relatively level throughout.

I have not forecast a 25% decline by year’s end nor a 50% decline next year. I never used the words ‘fall apart,’ so do not exaggerate – it weakens your argument. My oft-stated view is a 10-15% decline within the next few months, followed by a multi-year melt leading us to mortgage resets in 2014-5. Prices will not stay level. — Garth

#54 Bill ( Peterborough) on 10.06.10 at 9:14 am

Re # 40 devil’s advocate ( comment)

*****************************************
There there now, no point fretting yourself, everything will be alright.

http://www.youtube.com/watch?v=4_tF4rOP3mo

#55 JM in London on 10.06.10 at 9:17 am

#191 Bill ( Peterborough) on 10.05.10 at 7:37 pm From yesterday

Help my tiny brain understand what you think your links are?

You seem to think you can engage in some type of intellectual debate by posting links?

I’m just trying to understand what you mean by:

“Everything I post I can back”

Are links to sites a substitution for thinking?

#56 junius on 10.06.10 at 9:22 am

#17 Alan,

You said, “If indeed the RE agents are trying to skewer perception, they are no different to the forces at work on this blog to create fear.”

Yes, that is it. We are all here trying to create fear. Is that the best you can do?

People here are mostly trying to create awareness about a situation that is going to impact us all for many years to come. We are trying to stop people from becoming the greaterfools and grist for the mill of the Real Estate machine.

The fundamental problem remains that our MSM is a thoughless, hopeless slave to their advertisers in the RE establishment. This is an oasis of free opinions in a sea of conformity.

#57 brunt on 10.06.10 at 9:24 am

#21 Reg

Garth is right.

There is no perpetual money machine. We AREN’T different than the US. The laws of economics hold here as well as in the US.

I am 46 and renting as well. I haven’t owned a house for various reasons for 12 years now. The last 2 have been strictly for reasons of avoiding the bubble.

You have an easy 40 years of home ownership ahead of you. Don’t get impatient.

Think of it this way – you are about to be handed a once in a multiple generation opportunity to buy real estate cheaper than your parents did.

There are two ways to mess this up: 1) by jumping in too soon before the prices fall, or 2) not jumping in when the prices become attractive.

#1 is a very bad choice – avoid this one at all costs. #2 you can avoid by just buying when it is honestly cheaper than renting.

Here in Peterborough, renting is BY FAR cheaper than renting. Sure there are those unthinking people who spout the nonsense of “renting is throwing away money”. But I’ve never worried about following advice being given by people who have zero ability to analyze a problem to find out how wrong they are.

When everyone is telling you that you would be crazy to buy, then you buy. Being a contrarian can be difficult, but it pays well.

#58 Evangeline on 10.06.10 at 9:25 am

((It was a beautiful piece re how Harper is hated throughout Canada by everyone))

How amusing, wasn’t it you who were complaining about “hate speech” a few days ago? Now you seem to be saying that in some cases, hate is a good thing?

I very much doubt that “everyone” “throughout Canada” is a hater. The way to get rid of politicians you disagree with is to prove them wrong with intellectual honesty, rational debate, historical counterfacts, truth, reason, common sense, logic and even humour directed at their policies. Hatred is a totally negative energy that hurts the hater far more than it hurts the hatee.

#59 nsqt on 10.06.10 at 9:27 am

Re posting #12
That $325,000 average NS house price looks awfully suspicious. There are a hell of a lot of homes out here under $200K and a sizeable quantity under $100K. I’ve seen higher end homes take one year or more to sell. Not sure what the reason would be to embellish the average, but it certainly looks suspect.

I to was taken back by that figure…but its the average house price in NS….High housing prices in Halifax and surrounding area, high prices in those University towns…ie Antigoinsh, Wolfville…and dont forget Greenwood……. the sea shore land…$$$…so yes I can see the average being around that…….Sure there are house to be bought here for less then 100k….but the condition is another thing and how much money will it take to bring it up to todays codes……Also the small tiny towns in the middle of no-where-land are going cheap but either no jobs in the area or the closest town or city is a long drive in the best of weather never mind the winter………

#60 prairie gal on 10.06.10 at 9:28 am

#31 Shoggy on 10.06.10 at 6:01 am
@ #21 Reg

Dude, you serious that your life is on hold all because you rent? I suggest that you are seriously lacking in the “life” department. There’s more to do on the weekend than just going to Home Depot.
——
Word. Turn off the HGTV and go LIVE, man. When I was your age I was tripping across Asia and South America, building lifelong memories and some real world perspective (and character). Stop being so one-dimensional.

#61 Dumfukcanuk on 10.06.10 at 9:33 am

#49 John m, <<<<<<<<<<<<<<<<<< I honestly cannot believe how delusional the Canadian people have been for YEARS with respect to our economy and real estate prices. The moral superiority through the financial crisis that we've displayed toward the U.S. is absolutely embarrassing and incomprehensible – especially when the truth comes into play. The truth about the Canadian economy and real estate bubble is starting to get out now, and then what next? We have so much egg on our faces, we'll be eating crow omelets for a decade.

All we have done is lied to our own people about the truth of the situation, which will ultimately result in the further demise of our economy and real estate prices. We should have forgone the "emergency" interest rates that started in 2008 and just allowed a correction to happen. But, OHHHHHH HELL NOOOOOO! That would have meant we were the same as the U.S. Instead, we just pumped and pumped and pumped more buyers into the market on cheap credit and extended household indebtedness beyond that of the average U.S. citizen. THIS IS NOT SUSTAINABLE.

The U.S. housing market collapsed at an affordability ratio of 4.6. We have some markets, eh hem Vancouver, sitting at 9.3. That is pure insanity. And to provide an argument that immigration is what will keep it moving forward is absolutely pathetic. Immigration certainly did not help the U.S., did it? The U.S. has more immigration into their country than ALL OTHER COUNTRIES OF THE WORLD COMBINED! People want to move there FAR more than they want to move here. And for those living in Vancouver, understand the Chinese government is now performing "stress tests" on their banks of up to 60% collapse in real estate prices. This means China too understands they are GROSSLY overvalued and a correction is absolutely forthcoming there.

Like I said, the U.S. did NOT start this mess. The world was in this together as we ALL were snatching up real estate at stupid prices almost simultaneously (U.S., U.K., Canada, Australia, half of Europe, China). However, the U.S. DID correct its behavior starting over four years ago, which is something we cannot say and nor can several other countries.

Bottom line is when history books are written, it will be remembered that the U.S. was, once again, ahead of the pack and doing the responsible thing with the beginning of its correction, while at the same time Canada was at the damn back of the pack trying to fuel the fire even more. Our banking system and health of our banks is total bullsh*t, and this will come into light. The CMHC is b.s. too as it has created the absolute moral hazard of alleviating banks of their responsibility to practice sound lending standards, and instead it was placed on every Canadian taxpayer's shoulders. The CMHC simply does not have funds to cover a 25% correction, and we all know it. What WE, Canadian Citizens, have allowed is a legalized ponzi scheme we will be paying for for years to come.

#62 Devil's Advocate on 10.06.10 at 9:51 am

Somehow the last part of my post at #40 was omitted which read as follows;

You can have anything you want… it all comes down to work. Yes luck might get you there, it “might”, but good old fashioned work will get you there for sure and every time. Just never give up, for if you do clearly you do not want it enough that it is worth the work you must do to get it. They don’t call it work for nothing for “work” has cost and benefit.

Things are not as bad as you might be led to believe. Not nearly. Within difficulty lies opportunity and I would suggest, in this world where so many have lost their way and seem unwilling, for those willing to work there is a world of opportunity without competition.

#63 Sam on 10.06.10 at 9:52 am

#57 brunt on 10.06.10 at 9:24 am

#21 Reg

Garth is right.

When everyone is telling you that you would be crazy to buy

______________________
and your calculations prove buying is the right thing for you – reflex contrarianism is bad too, the herd can be right once in a while.

#64 Medvedev on 10.06.10 at 9:54 am

To #1 Old_is Gold:

Thanks for the info on your blog, very interesting.
There is an excellent book called:
(2000) “Fallen Angels and the Origins of Evil: Why Church Fathers Suppressed the Book of Enoch and Its Startling Revelations” by Elizabeth Clare Prophet, explaining the importance of this pre_christian scripture discovered in Dead Sea Scrolls and also preserved by Ethiopian Church.
Please take a look.

#65 JM in London on 10.06.10 at 9:56 am

#10 Antonio on 10.05.10 at 11:27 pm

Exactly! – It’s much like someone standing on a riverbank during a rain storm, looking down and saying “the river bank is solid earth so I’m safe here” and wondering in amazement when the ground they stand on caves in.

#21 Reg on 10.06.10 at 12:52 am

listen to #57 brunt on 10.06.10 at 9:24 am

I was about to write a similar message but saw his posting and he’s right on the money.

#66 Bill ( Peterborough) on 10.06.10 at 9:58 am

Re # 42 S.B.

LONDON (Reuters) – Anyone who owns a laptop computer can now fight crime from the safety of their home and win cash prizes for catching thieves red-handed, under a new monitoring scheme that went live this week.

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

Wonder if they would put these camera’s in ALL the government buildings.

You would become a millionare over night.

This is just another tactic of the Elitist’s to start to completely monitor us. Hidden through the guise of fighting crime. Plus the conditioning of society to inform on one another . First its starts innocently enough ; fighting crime, eventually informing on those who do not comply with their agendas. No different than Red China.

After all can’t tell the sheeple that they want to enslave them. Must slowly condition them, through lies/deceptions, repetativley telling them it is for their own good. Passing laws taking away our liberties. (patriot act is one such law)

Only then you can lead them to the slaughter with minimal fuss or uprising.

http://www.youtube.com/watch?v=4NSL4CAePWQ

http://www.youtube.com/watch?v=QmwVEZ0Uka8&feature=pyv&ad=5676745997&kw=constitution

#67 Alberta Ed on 10.06.10 at 9:58 am

The pathetic thing is that the MSM bought ReMax’s screed hook, line and sinker, from the CBC to the Glob & Bucket.

We looked at Nova Scotia RE while touring there last year; interesting area, very scenic, but transportation is restricted, there’s the HST, not to mention often rotten weather.

#68 rory on 10.06.10 at 10:03 am

#41 Soylent Green is People

SGIP …there you go again using that word again – hated, hate whatever …it appears to me that you are the terrorist around here …I love Harper compared to the alternatives … bugger off.

#69 Hiteclowtec on 10.06.10 at 10:03 am

The IMF must have called Garth for advice.

“Residential housing will act as a drag on economies around the world for the next eight years, the International Monetary Fund said Wednesday, even in countries such as Canada that appear healthy.”

“Higher interest rates in the next year are also expected to further quell the Canadian market, which has already shown signs of cooling.”

http://www.theglobeandmail.com/report-on-business/economy/housing/housing-prospects-dismal-imf/article1745015/

#70 Bill ( Peterborough) on 10.06.10 at 10:03 am

# 55 JM in London

As darksad person stated earlier you have selective hearing/ reading. Most people are starting to see you for what you are.

#71 junius on 10.06.10 at 10:09 am

#40 Devil’s Advocate Resurrection,

Instead of running down the Blog Dawg dogs why don’t you respond to the issue. As a constant apologist for the RE industry why don’t you answer the question:

Why is a company like Remax so manipulative and prepared to throw away all credibility with a misleading news release like this?

I think all us Blog Dawgs think it is because this company (along with the industry) sold their soul a long time ago so they care. Not to mention they have lacked credibility for a long time.

However maybe we are missing something?

#72 junius on 10.06.10 at 10:13 am

#58 Evangeline,

Well said. I take issue with many of the policies of Harper and of course F. However I do believe that THEY believe they are doing what is right (loaded word I know).

One can hate a terrible dictator or corrupt politician but hating someone who holds a different opinion is very undemocratic. Besides, every honest person knows that at one point in time we an opinion that we now believe to be ridiculous.

#73 dark sad person on 10.06.10 at 10:14 am

Hatred is a totally negative energy that hurts the hater far more than it hurts the hatee.

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

Good words and I’m living proof-that you’re right–

(warning tune)
http://www.youtube.com/watch?v=5T3FXFnoTzE

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

might want to hold back for awhile-if looking to buy US RE-

http://static.businessinsider.com/image/4cab2f187f8b9a260a610000-590-/yes-with-mortgage-rates-so-low-houses-look-cheap-and-for-a-while-this-seemed-to-be-helping.jpg

#74 Dan in Victoria on 10.06.10 at 10:17 am

Here’s some more lipstick. Rosy colored too.
Right from the Times Colonist here in La La Land.
http://www.timescolonist.com/business/Rosy+outlook+Victoria+real+estate/3630093/story.html

#75 wetcoaster on 10.06.10 at 10:19 am

Looks like they’re spiking the water out in Victoria. The local rag, the TC is now proclaiming via their top advertiser ReMAx that despite two months of 20 year low sales that everything is just all roses and puppy dogs.

This goes against the IMF who just warned this morning on Canada real estate on top of the US and others for the next 8 years. Unbelievable.

Rosy outlook for Victoria real estate

Despite a recent cooling trend, report sees strong market in 2011

http://www.timescolonist.com/business/Rosy+outlook+Victoria+real+estate/3630093/story.html

#76 Kevin in Winnipeg on 10.06.10 at 10:20 am

Housing market outlook not good in Winnipeg: RE/MAX

http://www.globalwinnipeg.com/Housing+market+outlook+good+Winnipeg/3628271/story.html

It’s not what you think. There seems to be a lot of crappy homes in Winnipeg. I think buyers are realizing a 700 Sq Ft house isn’t worth $200,000. But at $150,000, the same crappy home would have had multiple offers.

I believe we are at the threshold of what the majority of the market can afford in Winnipeg.

#77 David B on 10.06.10 at 10:21 am

From this morning G&M

Residential housing will act as a drag on economies around the world for the next eight years, the International Monetary Fund said Wednesday, even in countries such as Canada that appear healthy.

In its October World Economic Survey, the organization warned of “dismal” prospects for real estate, saying “rebound” economies such as Canada and those in the Asia-Pacific region were faring well, but that government intervention to cool overheating markets means that real estate won’t be a source of growth in the coming years.

————————

Yup, even Canader Mr’s H & F & C

#78 Brian in Victoria on 10.06.10 at 10:32 am

This article almost made me toss my Cheerios this morning:
“Rosy outlook for Victoria real estate”. The paper must have taken Remax’s press release and printed it verbatim.

http://www.timescolonist.com/business/Rosy+outlook+Victoria+real+estate/3630093/story.html

#79 Devore on 10.06.10 at 10:32 am

#17 Alan

If indeed the RE agents are trying to skewer perception, they are no different to the forces at work on this blog to create fear.

Fear? You must mean “hope”, that one day normal people will be able to afford a house?

#80 Pete on 10.06.10 at 10:39 am

The RE industry is fighting for their lives people. They are hurting bad really bad and they are looking for young blood. Like a vampire they need blood (money) or else they will die(bankrupt). Sales are down HUGE in Toronto and vancouver and make no mistake prices are down alot more then you think. The garbage is not moving and those that do sell have sold for alot more months ago. Example in my area you have $425000 POS that use to sell but not now. You also had the same bungalow which was fixed up new floors,roof , etc selling for $500000. Now these fixed up homes are selling for $425-435K . The fact is the laws of supply and demand always win and right now you have falling sales for the past five months which always like garth said lead to lower prices. Spread the truth around the net and work or whatever. Realtors have the media (at a cost)but we have the truth.

#81 Bill ( Peterborough) on 10.06.10 at 10:39 am

# 57 brunt

What you say in general is correct. However I cannot see a huge correction coming to Peterborough as say in the larger metroplosis’. The outer areas of Peterborough are not that far out of wack on their pricing, depending of coures what you want. ( acreage, waterfront…

Still alot of good value out this way just have to look for it.

#82 Devore on 10.06.10 at 10:41 am

#21 Reg

All your logic for not buying a house right now makes sense but at the same time it’s like I am putting life on hold in this stupid apartment.

If you think you’ll find a life when you buy a house, you’re gonna be very disappointed. Stop playing the helpless victim.

#83 Devore on 10.06.10 at 10:49 am

#38 Kevin

4./ If the government can change the definition of money and hence the rules of the game at any time is there really any danger of deflation?

Haha, of course not. Can’t fight the central bank.

5./ Is it now inevitable that the US will follow suit?

Already did. Maiden Lane? “Toxic asset” swaps?

#84 MO on 10.06.10 at 10:50 am

We’re priced for perfection…

Fantastic audio interview and charts on the truth behind Canadian Housing…a must listen for GT fans:
http://www.planbeconomics.com/2010/10/06/the-truth-behind-canadian-real-estate/

#85 Got A Watch on 10.06.10 at 11:02 am

Always blame a conspiracy when there is no one but yourself left to point the finger at.

“they are no different to the forces at work on this blog to create fear.”

I’d respond to that, but I was busy picking out my ‘Forces of Evil’ costume for the annual convention on Oct 31.

“This place is toxic. One need not read the comments of the Blog DAWGS to know that 80% of them are irrationally pessimistic if not downright wantonly lusting for a major financial crisis….These “vultures” don’t want to work; they want only to feed off the carcasses of another.”

Geez, I was just going down to the shed to drag out another body for dinner.

I know it must be pretty hard to give up your cherished delusions and all, on your odd little planet, but really? Is this what you actually think is a rational response to the simple fact that real estate rises (boom) and then falls (bust) and has for time immemorial.

The old “It’s Different Here This Time” has failed. Just look around the globe. Point out to me where it is different, exactly, or when in history it was that the ‘Madness of Crowds’ did not occur.

If you can’t muster anything that makes sense, and better men than you have tried very hard, then, please, just dry up and blow away. Your hot air can’t inflate a bursting balloon.

#86 Real Estate Realist on 10.06.10 at 11:21 am

#24 – Timing Is Everything

The winners: (and a bit of a lesson in worst scenario stuff ~ people often do the wrong thing out of a lack of knowledge on the subject ~ just trying to help)

Trustees. (representing the borrowers)(Bankruptcies will go through the roof from the shortfalls on Collateral Mortgages and uninsured Private mortgages, both often in 1st and 2nd position)

Appraisers. (hired by the Banks and Private Lenders) (the Broker is long gone after the deal is done at the onset) For the Banks, a full CRA appraisal is mandatory from a legal perspective. YOU pay for it from the sale proceeds though. YOU pay for ALL of the Bank’s costs while it is on the market and they are babysitting the house, maintaining it, repairing it possibly. ALL YOU. If there was equity you will get less back after the sale due to those costs. If there was no equity, you will owe more money after the sale because your shortfall will be bigger due to those costs.

Agents. (hired by the Banks and Private Lenders, trust me, the houses will eventually sell, Banks don’t overprice the listing price just to recover losses, it doesn’t make sense to them. On the other side of things, if they sell for less than FMV the borrower can sue them, as can subsequent Mortgagees in other positions for losses)(for Agents reading this: Say goodbye to your license if you offer a Mortgage Collector a kickback to win a listing…just sayin’…)

Contractors (hired by the Banks and Private Lenders)

Law Firms (hired by the Banks and Private Lenders)

Property Search firms (hired by the Banks and Private Lenders)

Sheriffs (hired by the Banks and Private Lenders)

All of these people’s incomes are going to skyrocket in comparison to what they were making pre-crisis. Trust me.

As for winners outside of the “recovery” aspect (ie. taking homes back with delinquent mortgages), they would be the people who SAVED and INVESTED in something other than their mortgage payment. If they lose their job they have at least a shot at carrying the payments and keeping the house by liquidating other assets. (or at least keep it from going into arrears while they are trying to sell it)

The Bank will sell it for FMV (Fair Market Value) but the costs will be huge due to everything from accrued compounded interest (a monster) to legal fees, appraisal, maintenance, etc. So, any of you reading this that gets into a situation where you can’t make your payments and you don’t see a solution in the extremely near future : Sell stuff to make those payments and put it on the market IMMEDIATELY. Ask a FMV price, what it is actually worth to the buyers, and come out thousands of dollars ahead due to not allowing the Bank to incur any costs, which you are 100% liable for. Oh, and then there’s that the fact that your credit rating won’t be negatively affected. Arrears alone, forget about it going so far that the Bank takes over, will squash your rating for years. And you never just owe the missed payments, the long term cost is massive interest calculations. If you miss a couple of payments, you’ll have to pay those, plus legal fees like the cost a possible demand letter, and if it goes to issuing the NOS document, add a least $1200 (15 yrs ago people) to that in order to “rectify” your mortgage. No exceptions. Lump sum of arrears and fees or no deal. The Bank will NEVER pay for your mishaps. You do.

Other winners: Investors who get in on trends that are going to contribute to the future recovery of the economy, like solar power, electric cars, medical technologies, retirement homes with medical facilites and pharmaceutical companies, as a small example. There’s plenty of ways to make money in EVERY economy. Always. Look around. Smart investors are doing it everywhere, all of the time, no matter what is happening.

#87 Crash Callaway on 10.06.10 at 11:21 am

Garth, thank you for lifting the rock once again and giving us such a clear look at the creepies crawling under it.
The Realty world has no moral compass.
Amazing how the media is saturated with warnings about the bedbugs and stinkbugs but nary a word about the most dangerous house pest of all… the realtor.

Keep shining that light Garth, you are providing a valuable info.

#88 jess on 10.06.10 at 11:32 am

Invest in human capital the mantra goes …tell that to people in countries who have lost to chapter 10 or 11 ???

Capital must flow along with people …if ya don’t like it move, they declare. …send your remittances back to your love ones. It’s best ya don’t have a home anyway or a neighbourhood to be tied down to. Be free! Homes have no value!

“Moreno sees investor-state disputes as the biggest threat to El Salvador under DR-CAFTA because “the construct of indirect expropriation allows US companies to protect themselves against any public policy whatsoever, if in their judgment this public policy negatively affects their profits or expected profits.” He goes on to say, “It’s very probable, highly probable that the ICSID (the World Bank arbitration panel) will rule against the government of El Salvador” in the Pacific Rim and Commerce Group arbitration proceedings. He says that FESPAD studied 28 investor-state disputes under NAFTA, and US companies almost always win. An egregious example he mentions is the Metalclad case in which the Mexican government was penalized for closing a toxic waste dump as a public health hazard that already had harmed the local population. In contrast, the US government has never lost as a defendant in such FTA arbitration.(4)
=================================
http://en.wikipedia.org/wiki/Metalclad
“In 1997, Metalclad sued the Mexican Government for damages under Chapter 11 of NAFTA for $90 million and was awarded $16.7 million. This award was later reduced by $1.1 million to $15.6 million, by review in the courts of British Columbia (the jurisdiction where the NAFTA hearing was held) due to a recalculation of the applicable interest period.”(wiki)

Free Trade’s Dubious Blessings: Nearly Five Years of DR-CAFTA in El Salvador and Its Constitutional Challenge
Wednesday 06 October 2010
by: Leonard Morin, t r u t h o u t | News Analysis
http://www.truth-out.org/free-trades-dubious-blessings-nearly-five-years-dr-cafta-el-salvador-and-its-constitutional-challenge

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

El Salvador’s Misfortune in Gold: Mining, Murder, and Corporate Malfeasance
Leonard Morin
http://www.alterinfos.org/spip.php?article4368

http://fespad.org.sv/

#89 Crash Callaway on 10.06.10 at 11:35 am

#13 Peter Pan
” I’d love to see her “Virgins” 5 years from now… I’m sure they’ll have realized they were royally f’ed over by Sandra”

Hey! maybe in 5 five years they could coax Sandra out of hiding and get her to host a new reality show called:
” Greater Fools” where she travels about the country cajoling with her favourite victims.

#90 jess on 10.06.10 at 11:46 am

no water no life

Citizen’s Assembly,

http://upsidedownworld.org/main/argentina-archives-32/1840-argentina-water-is-worth-more-than-gold-300-organizations-collectively-say-qno-to-open-pit-miningq

Written by Fionuala Cregan
Wednesday, 29 April 2009 14:36

….”Hailed as the mining industry’s “rising star,” with 75 per cent of its mining potential still unexplored, companies from countries including the U.S., Canada and South Africa have all expressed an interest in working in Argentina. Eighteen large-scale projects are planned for 2015, including one which would straddle the Andean peaks between Argentina and Chile. Known as the Pascual Lama project, it is lead by the world’s largest gold miner, Barrick Gold Corp, of which former president George Bush the senior is amongst its board of directors….”

The Assembly faced a major blow in December 2008 when a Presidential Decree was used to veto a law, approved unanimously in the Parliament, which aimed to protect the country’s glaciers, a vital source of water in Argentina’s southern provinces which also serve as important buffers against global warming. The glaciers fall within the radius of the Pascual Lama project, while and the Presidents veto of the law, which stated that it was excessive “to ban mining or oil drilling activity on glaciers,” has since become known as the “Barrick Gold Veto”. …

Members of the Assembly of San Juan then went on to express their concerns about the Pascual Lama project which they say would use almost 370 litees of water a minute-adding to the mining projects already in existence in the province which currently consume 10 million liters of water a day.

“This is more than the average daily consumption of citizens in the province of San Juan which amounts to 8 million liters,” they stated.

They also rejected the argument that mining benefits the country by creating jobs, highlighting that mining created only 1,200 jobs, whereas the garlic industry alone created 5,000.

For more information on Citizens Assemblies against mining go to: http://www.noalamina.org/

To join the Facebook Page of the La Rioja Citizens Assembly go to: http://www.facebook.com/group.php?gid=51334149068

For more information on the Gualeguaychu Assembly’s campaign against the Finnish Paper Mill Plant go to: http://www.noalaspapeleras.com.ar/

#91 Chaos on 10.06.10 at 11:46 am

Reg…

one word

VALIUM!

#92 JM in London on 10.06.10 at 11:55 am

#68 Bill ( Peterborough) on 10.06.10 at 10:03 am

Bill – You claim to want an intellectual debate but use intellectually dishonest tactics- I’m trying to understand your definition of the word and where you’d like to base an argument from. You spend a huge amount of time here writing as if you know the answers and place links to several issues.

Let’s deal with one at a time & be clear what your argument is:

What shall we start with? The Rothschild’s?

#93 Calgary Rip Off on 10.06.10 at 11:57 am

#40 Devils Advocate:

Your statement that work can help you achieve what you desire is partially correct.

It is not alone to work hard. You must work smart. Then, you must market your work/product correctly.

What would you say if I told you that somewhere right now there are many “stars” that are bigger, better, faster, and smarter than the current celebrities or nerds running this world? Except no one knows about them because they dont have the producers necessary to brainwash the audience about their product or skills.

There is a point of diminishing returns for time invested and money earned.

Could I be as rich as Donald Trump? Certainly. However one big thing is lacking: I dont see the point or the hassle for all that nonsense. Its a big waste of my time. Id rather earn a decent wage, have a decent place, and have the anonymity to live my life without people I dont care about in my face.

Its not as simple an equation as work=success. You must have a recipient who judges your work worth something. In my case I have my >$100K day job which fulfills having a 9-5 occupation which is steady so I can develop my skills on my freetime and not have to worry about specifics of finance.

Work is only a means to pay bills. It doesnt define me. Neither does a house or what I own define me. All of that comparison that people do everyday is a waste of time and stupid.

It is better to define yourself by your own rules rather than the typical nonsense that most guys define themselves by their occupation because they have nothing else as they do nothing in their spare time.

BORING.

#94 Money Thrower on 10.06.10 at 11:58 am

Re: Devil’s Advocate’s # 40

For those of you wanting to read the full story, “Atlas Shrugged”, by Ayn Rand.

Available at your local library. But don’t get it there; get a job and buy it, you lazy vultures.

#95 VICTORIA TEA PARTY on 10.06.10 at 12:00 pm

REMAX AND OTHER DEAD PIGS WALKING…

Good on Garth for writing the following:

“So how do you slap lipstick on this pig…We’ll start by calling the maquillage pimpers at Re/Max. ‘(Remax quote)…the positive economic data emerging daily…’ is a coarse fabrication…any economic boom we might have had is kaput, while BoC government Mark Carney has gone all goth on us…”

Garth. I’m amazed at your steady as she goes restraint regarding Remax’s press release of earlier this week.

You should have gone completely ballistic.

Allow me:

You cautiously write that “These guys can make a corpse look hot.” There’s a plain vanilla reason why. THEY’RE THE CORPSES! , it’s pig-abuse!

Given their lack of moral fibre and spine, these folks are dead “persons” walking; parasites; zombies; knaves to a man jack for writing and issuing this tripe!

Another “clip” from their press release: “…the outlook for the residential housing market has vastly improved over the past three months.”

This infers that the next months will be “even better”, so-called good news SPECIFICALLY for the desperate and the gullible. The desperate and the gubbile are powerless and broke and eventual victims of these greedy fops and their licentious “morals”.

This kind of pumping, of a dead market, should be made illegal. Put the Feds on the case!

In support of the above comments, and going on the corollary of what happens in the US, will be happening in Canada, the following unfolding and continuous catastrophic news:

–unemployment goes up more as the private sector dumps another 33-thousand workers onto the street.

–USD index (vs other currencies) is in the toilet. That’s good news for US business because anything sold in US dollars will be a profit advantage for corporate America and its empire. Of course, the unintended consequence of this purposeful action will be a currency war and a world-wide economic calamity of untold proportions.

–yesterday the Gallup polling people reported that US consumer spending so far this year is down from 2008 and 2009! Can you believe that?

On the flip side, meanwhile, China, India, Brazil and Russia prepare their economic journeys through a new world sans the American Empire, while “The Wall Street Delusion” continues. So please don’t confuse the Dow breaking up through 11-thousand today as being anything more than algorithyms and the actions of Wall Street pimps and pimpettes busy makin’ money for de man! No new jobs out of this for certain.

With this, and a thousand other economic reasons, in mind some encouragement for the very sensible #21 Reg and #57 brunt.

Spend the next few years to get out of your consumer debts, and track interest rates. If you are some of the very few who can successfully predict them, you’ll reap great rewards on the stock/real estate markets WHEN THE TIME COMES.

Looking back over 42 years of investing, I have yet to see more noise, confusion and just plain lies. It’s amazing that so many people can be so utterly stupid for so damn long! Bless ’em all.

In other words, SIDELINES IS GOOD! Remax sluts-de-nuit come and go, but so do the bubonic plague, whiney envionmentalists and public sector union leaders calling for higher taxes so their members can have “true job security in these difficult times.”

While the BRICs prosper we do not. The economic aspect of empire is shifting eastward with the political, military, and cultural empirical parts (our parts too!) to surely follow. They always do. Read your history. Your life depends on it!

Patience, perseverance, family. All that matters!

#96 Crash Callaway on 10.06.10 at 12:04 pm

#21 Reg

You are not stuck. You are free!
free to move in any direction in this insane reality.
You’ve got the student loan out of the way and are making good $ employment wise.

Jeez… wish I had it as together as you when I was 25.
Stop comparing yourself to those straddled with debt around you.
I’m sure a glimpse at their bills & the astronomical costs to keep the over priced McMansions would have you realise how fortunate you are.

And as a renter waiting out the storm, I am in a position to purchase but refuse on principal and a sense of obligation to leave the generation(s) behind me a world they can afford.

Ya it’s frustrating but the reckoning day will come.
Hang in there & if you really want to be in a position to vultch take some of Garth’s advice and invest in things that will grow your $.
Realty is not the vehicle to win the race.
Think of all the shmucks belted into those vehicles with no say in the direction it’s taking them.
So ya we’re renters but we’re free.

#97 Devil's Advocate on 10.06.10 at 12:08 pm

#40 Devil’s Advocate Resurrection,

Instead of running down the Blog Dawg dogs why don’t you respond to the issue. As a constant apologist for the RE industry why don’t you answer the question:
Why is a company like Remax so manipulative and prepared to throw away all credibility with a misleading news release like this?

I think all us Blog Dawgs think it is because this company (along with the industry) sold their soul a long time ago so they care. Not to mention they have lacked credibility for a long time.

However maybe we are missing something? #69 junius on 10.06.10 at 10:09 am

You caught me. I have no intention of reading the Blog DAWG comments as refraining from doing so is vastly more condusive to a positive state of mind. However, somehow, before shutting down the window I noticed your question.

Quite simply Junius, RE/MAX is looking at the positive side of the story, not all of it do I support by the way (The part about the upper end of the market being robust is disturbing to me as it attests the erosion of the middle class – which concerns me) but that does not mean it untrue.

The industry has a duty of care not only to buyers but sellers too. Were we to poo-hoo the markets in entirety we would be letting the sellers side of the equation down. I do not expect the Blog DAWGS to understand this as my experience is they hear only that which they want to hear without listening to what is actually said but the real estate industry is really nothing more than a mediator of sorts between buyer and seller. We don’t influence the markets we report them. We really don’t want to see housing become unaffordable as that would ultimately diminish sales volumes. We don’t want to pump the markets beyond reason as ultimately that will cause collapse. We want stable markets. We want markets in which buyers can buy with confidence and within affordability.

A good REALTOR is not here for the transaction they do today but rather the relationships they build right to do business with tomorrow.

I trust you will see the logic in this answer.

#98 EB on 10.06.10 at 12:10 pm

#4 Pat –
“… Nova Scotia. Gentle sea breezes.”
gentle? :)

That made me smile too – fall is almost always lovely in Nova Scotia, but it isn’t long before the sea breeze turns into something more akin to a chainsaw made of ice. Just walking down the block can be harrowing. Then the weather picks up again around about May.

That being said, the maritimes were a pretty awesome place to live – overall the lifestyle was much better than here in Vancouver. More laid back, friendlier, more affordable, generally better.

#99 Bill ( Peterborough) on 10.06.10 at 12:10 pm

Re #71 darksadperson

Hatred is a totally negative energy that hurts the hater far more than it hurts the hatee.

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

Good words and I’m living proof-that you’re right–

(warning tune)
http://www.youtube.com/watch?v=5T3FXFnoTzE

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

Getting me confused here.

Which one are you: the first comment;

Hatred is a totally negative energy that hurts the hater far more than it hurts the hatee.

OR
(warning tune)
http://www.youtube.com/watch?v=5T3FXFnoTzE

Personally I think you are more of the character of;

http://www.youtube.com/watch?v=VG6LHX_5rH0

LOL.

#100 Pete on 10.06.10 at 12:15 pm

Realtors are running scared as the housing market is crashing and economy is falling. Make no mistake about it the economy is doing very poor. Goto any mall and at first your like WOW the mall is 100% packed. It`s even hard to find parking spot. Then you go in and there are people everywhere. Only one problem, they are buying nothing. No one is carrying bags of stuff just people walking. Sure some people are carrying a bag or two but the majority are carrying nothing just walking. You can walk into a store and pick an item and then just pay. When times were good you had to wait in a long line up to pay. People where holding bags and bags of stuff. People love to shop but now a days they goto the mall and walk. Also look at MLS people are starting to drop their prices. It`s happening but the realtors are trying to spin very bad news as good news. To think 23% drop in sales is good

#101 Bill Gable on 10.06.10 at 12:37 pm

Will the Realtor disguised as the moronic “Vancouver Going Up”, PLEASE find another place to spin your dreck.

You are One note pony and a deaf one at that.

Put the bong down, pal, and get help.

#102 AxeHead on 10.06.10 at 12:38 pm

#40 Realtor’s Advocate…since when is selling a home considered ‘work’. I estimate a realtor makes approximately $1000 per hour or more if it takes 10 hours to sell the average home…to do what? 1) drive clients around, 2) write a contract 3) phone calls to negotiate…oh and advertise on Kijiji. Get a real job dude.

Garth…thanks for making me open my dictionary, I appreciate any author who does that.

#103 Live within your means on 10.06.10 at 12:44 pm

.#4 Pat on 10.05.10 at 10:44 pm
“… Nova Scotia. Gentle sea breezes.”

gentle?

…………..

Where do you live Pat?

#104 Bill ( Peterborough) on 10.06.10 at 12:49 pm

Re # 91 Jm in London

Too late. Better things to do with my time than deal with a spiteful angry little man.

#105 Devore on 10.06.10 at 12:49 pm

Devil’s Advocate

I’ve not read the blog post responses to this Garths most recent editorial “Kiss this” nor will I.

Thanks for officially announcing that you are indeed just talking to yourself. Your arrogance, hubris and self-righteousness are overpowering.

You caught me. I have no intention of reading the Blog DAWG comments as refraining from doing so is vastly more condusive to a positive state of mind. However, somehow, before shutting down the window I noticed your question.

Why even post? Surely, you could just turn off the computer, and talk to yourself that way, we don’t all need to witness the spectacle.

The blog is toxic, and turning you negative, yet you keep reading and you keep posting. You keep posting dozens of paragraphs a day, yet you say nothing.

You’re an enigma, wrapped in a riddle.

#106 Reasonfirst on 10.06.10 at 12:56 pm

#92 Calgary Rip Off

Here, here!

#107 VancouverGoinUp on 10.06.10 at 12:57 pm

Oh what a beautiful morning oh what a beautiful day Oh what a beautiful morning Victoria Up Up and Away

http://www.vancouversun.com/business/Rosy+outlook+Victoria+real+estate/3630093/story.html

#108 Live within your means on 10.06.10 at 12:57 pm

12 Foggy on 10.05.10 at 11:33 pm
That $325,000 average NS house price looks awfully suspicious. There are a hell of a lot of homes out here under $200K and a sizeable quantity under $100K. I’ve seen higher end homes take one year or more to sell. Not sure what the reason would be to embellish the average, but it certainly looks suspect.
……………………

My memory is foggy, but there were 2 houses for sale this year on the new end of our street. Both had been on the market for around $450K+. Both took many months to sell, and I heard, via the grape vine, they sold well below their asking prices.
………………..

Pat – re NS breezes. Sure G. was joking, BUT, I’ve all my windows open and I live above the Dartmouth Lakes. Weather Network is rarely correct.

#109 The Original Dave on 10.06.10 at 1:16 pm

#21 Reg

I know how you feel. I’m a handful of years older than you. I’ve been following markets, all types of them, since I was a youngster. I’ve done very well stocks. I too am renting. I seriously don’t see anything that is more over valued in the market than Canadian real estate.

Hang in there. The people pestering you with certainty that you should be buying, should reaffirm your belief that there’s a long way down for prices. You don’t want to purchase at these prices. I’d imagine you’ll regret that for decades. Let the emotional investors lose their shirts…that’s what they do always and instinctively. The people you know that bought before the credit boom and loose lending – good for them. The terms are different for you. Rent, save the difference and invest wisely.

Good luck. Don’t be influenced by the herd around you, but gobble up everything they’re saying so you know how to handle your finances. When they’re certain, be afraid..

#110 young & foolish on 10.06.10 at 1:28 pm

ah yes, housing is well above reasonable income multiples (sort of like cars), and kept there largely because of low interest rates …..
so, I guess when rates go up, housing prices will come down ….. but will you pay less per month?
after all, unless you chose to live under a bridge, you will either pay some landlord, or interest to the bank …

so, since this is a blog about housing, and since we all need some version of it, how about we discuss what kind of housing is good housing as we move forward into a shaky economy (and leave all the monetary speculation to guys who have information and charts which we have no access to)

#111 Keith in Calgary on 10.06.10 at 1:28 pm

CALGARY – The head of a so-called real estate club in Calgary has been charged by provincial regulators with defrauding the public in a Ponzi-like scheme that bilked $5 million from unsuspecting investors.

Robert John Harris, operating under Harris Agencies, faces allegations he funneled money from the investment club to pay off investors instead of buying real estate or second mortgages, the Alberta Securities Commission said Wednesday.

The scheme had run for the past decade, from 2000 to 2010, with Harris illegally trading in and distributing securities to Alberta investors, according to commission staff.

Ponzi scams pay returns to investors from their own money, or funds raised by subsequent investors, rather than from actual profit.

In a high-profile case last fall, Albertans Milowe Allen Brost and Gary Allen Sorensen were charged with perpetuating $100-million Ponzi-like scam relating to Syndicated Gold Depository S.A.

An appearance to set a date for a hearing on the Harris Agencies case has been set for November 10 at the Alberta Securities Commission offices in Calgary.

Read more: http://www.calgaryherald.com/business/real-estate/Calgary+Harris+Agencies+charged+Ponzi+scheme/3632718/story.html#ixzz11bUlRJfA

#112 Keith in Calgary on 10.06.10 at 1:29 pm

CALGARY – The head of a so-called real estate club in Calgary has been charged by provincial regulators with defrauding the public in a Ponzi-like scheme that bilked $5 million from unsuspecting investors.

Robert John Harris, operating under Harris Agencies, faces allegations he funneled money from the investment club to pay off investors instead of buying real estate or second mortgages, the Alberta Securities Commission said Wednesday.

The scheme had run for the past decade, from 2000 to 2010, with Harris illegally trading in and distributing securities to Alberta investors, according to commission staff.

Ponzi scams pay returns to investors from their own money, or funds raised by subsequent investors, rather than from actual profit.

In a high-profile case last fall, Albertans Milowe Allen Brost and Gary Allen Sorensen were charged with perpetuating $100-million Ponzi-like scam relating to Syndicated Gold Depository S.A.

An appearance to set a date for a hearing on the Harris Agencies case has been set for November 10 at the Alberta Securities Commission offices in Calgary.

#113 GBoomer on 10.06.10 at 1:38 pm

#21 REg wrote:

“And I hope all the boomers that spent like drunken sailors all their lives don’t get a penny for their houses and end up living in my little apartment while working at Walmart.”

I grow weary of my generation of Baby Boomers being subjected to vitriolic attacks on our collective character, integrity and motives by generations born after 1965. We were all merely doing what everyone tries to do, and that was to survive, get a secure job, buy a house, a car and raise a family. How were we to know that our offspring would become so demanding and so expensive? How were we to know that we would have to enrol our children in sports, dance, drama, clubs, camps and God knows what all just so they would feel good about themselves because they were all so special and unique and that every participant needed a trophy or a medallion so as not to feel left out? How were we to know we were raising a generation that required resumes and Social Insurance numbers at twelve years old? How did we know that the institutions of home, family, church and state would become so old-fashioned and looked up on with such scorn by our children? How did we know we would end up in a society that placed more value on what we had than who we were? How could we have known that what we thought was the right thing to be doing for our kids turned out to have created a generation even more self-absorbed and narcissistic than we ourselves were?

It was my generation that rallied to topple the system and burn the banks. Somehow, we ended up perpetrating the system and many of us own stocks in banks. It was my generation that became the most highly educated generation in history to that point, but who placed such enormous demands on the school system for our own kids that the system has buckled, groaned and become so fragmented as to become a lumbering bureaucracy where real change happens at the speed of a glacier, and with about as much flexibility. But, it was also my generation that got into a profession or job and stuck with it, so that 35 or 40 years later, after a lifetime of swimming with the workplace sharks, we can retire and enjoy our life as pensioners without guilt or without blaming anyone. Whatever we have we earned through dint of hard work, loyalty, dedication to our families and doing the hard thing when the easy thing would have been, well, the easy thing.

So, if I am weary of the criticism of those who blame the Boomers for all that is wrong with life, the universe and everything, forgive me. I have nothing to feel guilty for. My wife and I raised and are putting two daughters through school. We live in a modest home and have modest investments that will never make us millionaires, but between us we have contributed, through our jobs, 71 years to public service. Old-fashioned and silly in this day of multiple careers and employers over the course of a working life, but there you have it.

And one more thing, Reg, don’t worry about your friends and co-workers appearing to get ahead. We make our biggest mistakes when we find out which way the herd is going, the enthusiastically join them as they stampede off a cliff. Or have you never heard of Head-Smashed-In-Buffalo-Jump?

#114 PTDBD on 10.06.10 at 1:42 pm

The Paperprestidigitizer Wars

Now printing on the World Stage in 3D – The Maestro’s Apprentice vs. Godzilla. Watch these titans of trillions battle it out for world trade and resources with money created out of thin air! Oil, metals, grains, and gold grow to parabolic heights as innocent populations get crushed by the whirling dervishes of debt as they spiral out of control.

Canada, ever behind the curve, madly sells its goods and industries to a convention of counterfitters. Good thing our Central Bank got rid of its gold long ago, eh?

#115 Screwed in BC on 10.06.10 at 1:43 pm

#27 Edmonton Rigman

Exports to China from Canada crazy? Sources of info?Do you have numbers to prove what you are saying?

#116 Don'tKnowWhatToThink on 10.06.10 at 1:45 pm

But…

“Without question Calgary is leading the nation and they feel the confidence here again. The people who are buying are not speculating,”

Read more: http://www.calgaryherald.com/business/Luxury+sales+bright+spot+real+estate/3630380/story.html#ixzz11bZT0bpt

#117 junius on 10.06.10 at 1:46 pm

#96 Devil’s Advocate,

You said, “The industry has a duty of care not only to buyers but sellers too.”

Then it needs to be credible. Yet it is not.

The industry is shooting itself in the foot here. It does not control the market. Yet it constantly attempts to position everything for the positive.

Meanwhile mortage brokers and other realtors who “tell it like it is” are under threat of losing their jobs. Hardly an industry to look up.

The legal profession in B.C. has recently sent a note to lawyers in the Real Estate market warning them that the market is cooling and they should be careful on how they advise clients in Real Estate transactions. Of course, lawyers are insured which is quite different than the “caveat emptor” world of realtors.

If the industry really had a “duty of care” at all then they could be held liable for their lying and deceit. However they do not really have such a duty in the legal sense. Obviously they have not assumed such a duty in the moral sense either. There goes the proof with Remax.

#118 jess on 10.06.10 at 1:48 pm

Posted: October 04, 2010 by Kevin Gaudet of the Taxpayers Federation
He asks: “Why are Canadian taxpayers lending precious money to a firm that says it already has so much excess cash?”…

Vale is a multi-billion multi-national corporation headquartered in Brazil. Their Financial Statements for 2009 reveal a very profitable net income of $5.5 billion (U.S.) down from $13.5 billion and $12.6 billion in the two prior years. On September 23, 2010 Vale announced a share buy-back program for its excess cash.”
http://www.taxpayer.com/node/13217

#119 Jody on 10.06.10 at 1:52 pm

I’ve been looking at other online trading accounts aside from wht I have with questrade, seems a lot of the big banks like to charge extra fees and have restrictions if you hold your own mortgage in your RRSP account, anyone know any decent independent advisors in Calgary? Anyone deal with the big banks with a trading account? Which banks do you use?

#120 Alberta Boy on 10.06.10 at 1:53 pm

Here is some fair and balanced reporting from the Edmonton Real Estate Blog

http://edmontonrealestateblog.com/2010/10/housing-prices-remain-stable-in-edmonton.html

I think the blogger makes some good points and I agree with his take on the trends going forward.

#121 JM in London on 10.06.10 at 1:53 pm

#103 Bill ( Peterborough) on 10.06.10 at 12:49 pm

Not spiteful nor angry Bill

I write this all with a smile.

It really is funny.

I’m sure you’re attempting to read emotion into what I’ve written (also known as putting words in peoples mouths – another dishonest tactic – besides the personal slight that I’m an angry little man.) I’m also amused at your lack of focus, intellectual dishonesty, pseudo intellectual view point, combined with a know all bluster you that present.

Let’s forget the “selective hearing” you seem to want to accuse others of and forget you’re guilty of it as well.

So if you’d like a debate – All I’m asking you to do is define what it is you’d like to argue.

Yourself and DSP like to fire all kinds of shots and challenge people to debates with authority. For the most part, most here don’t have the time, see you for the frauds you are ergo, what you write is hot air.

You then attempt to justify the untenable position you take with links and challenge all to disprove “your” point(s) (a link isn’t “yours” I’ll remind you) – the multiple arguments you present present a special problem in that debating you on all simultaneously isn’t practical.

Let’s do it one by one

#122 Tony on 10.06.10 at 1:59 pm

#99 Pete

It depends where you live. In Toronto or Scarborough no one buying anything at the malls years ago they were. In Oshawa or Whitby no one is buying anything but that has been the norm since 1981. They never recovered one iota from the 1980 recession. If you look at Markham, Unionville and Thornhill no drop off in sales at all as recessions don’t affect sales in these cities.

#123 Dan in Victoria on 10.06.10 at 2:00 pm

Got A Watch @84
“It booms and then it busts”
Gotta agree, my family has been involved with construction / real estate since the 1930’s here in good old Vic.
I’ve seen this since I was a little, little kid, it rhymes every time.
But some always think it’s diffrent this time.
It’s not.

#124 junius on 10.06.10 at 2:02 pm

#96 DA,

Here is an excellent piece from Barry Ritholz’s Blog “The Big Picture” on this issue. Very on point.

Attention RE Agents: NAR Spin is Counter-Productive !
By Barry Ritholtz – September 1st, 2010, 9:15AM

We have had a god-awful run of Housing data. New and Existing Home Sales, Defaults and Foreclosure data, even the Case Shiller report — all have been utterly horrific.

In light of this, I want to make the following announcement: Attention RE Agents! The National Association of Realtors are doing you a terrible disservice.

Consider the following comments from a RE Agent, published exactly three years ago (September 4, 2007) in the Realty Times:

“The National Association of Realtors and your state association will always have published reports that sound better than what you are personally experiencing in the market. Please understand that they support us. They know that whatever they say will end up in public press. We do not need any more negative press! When you read reports that we have reached the bottom or that the market has actually gone up, take it with a grain of salt. Their job is to permeate the world with good news about real estate.”

In other words, mislead the public with spin. Create false hope. Lie. This agent was defending the National Assocation of Realtor’s blatant dishonesty — a mistake on its face — just as the damage they did began to have an effect.

What the NAR was offering to buyers, sellers, their agents, indeed, anyone involved with Housing, was the blue pill.

The sort of nonsense the Realtor’s group peddles helps explain why sellers have incorrectly believed a recovery was imminent, even as housing went through a historic collapse. It is why home owners incorrectly still expect their homes to go appreciate by 10% a year.

These false beliefs have real world consequences. They create ridiculous expectations among sellers, who selectively grab onto any positive news they can. They choose the temporary blissful ignorance of illusion — that damned blue pill — versus embracing the painful truth of reality (i.e., the red pill).

This confirmation bias leads sellers into mis-pricing the value of their homes. They have been a season or even a year or more behind the pricing curve the entire way down.

Ask any listing agent how difficult it is to get sellers to become realistic in their asking prices. Real Estate agents would be moving a helluvalot more houses if they were not fighting misinformation that the NAR has put into the marketplace. Many, many agents have confirmed that, even in this crummy environment, a good house properly priced will sell.

Here’s a question for you reality (vs NAR realty) agents. Ever wonder why you seem to be having such a hard time convincing sellers to set reasonable asking prices? Ever ponder why they have such a distorted sense of the true value of their homes? Ever try to get them to set reasonable asking numbers that are competitive with current market prices?

The short answer: NAR spin.

To see how bad this false NAR narrative has become, check out this new show on HGTV: “Real Estate Intervention.” The show’s hosts travel town-to-town in an attempt to convince homeowners to sober up, put the magic mushrooms away, and price their houses realistically. They literally drag these poor bastards to nicer comparable homes to theirs — better locations, bigger square footage, nicer kitchens — all in an effort to TALK SELLERS INTO REALISTIC PRICE POINTS. It staggers the imagination: A television show actually had to be created to counter-act the excess stupidity coming from the Realtor’s trade group.

Gee, where do you think sellers got these crazy ideas? Might the NAR, by encouraging a fantasy, be actually hurting the housing market as a whole?

Even the normally staid NYT has recognized how absurd the NAR spin has become. This past weekend, Joe Nocera began an article with the sentence: “You have to wonder sometimes what they’re smoking over there at the National Association of Realtors.”

When the Gray Lady asks if your economists are high, isn’t that are warning sign that you must make a major change? How on earth is having a reputation of being stoners good for the RE business?

And, buyers have figured out that the NAR news releases are unmitigated fantasy. They have learned that any organization that has to go to such lengths to spin bad news must know that the news is much much worse. The result has been a Real Estate buyers strike.

Here it is, three years after that lame defense of NAR spin, and we can see the damage that spin has wrought. It is readily apparent that the NAR has become counter-productive to the agents they are supposed to be serving.

No, the NAR is not supporting you. They are making your jobs much, much harder. They are spinning the public, and doing you an enormous disservice.

Try RealityTM! Its what is working these days.

>

~~~

Post Script I write this not only as an analyst that has covered housing for years (and as an owner of real estate), but as the son of a RE Agent. This sort of crap was dinner table conversation for me since I was 8.

#125 South Sea Bubble on 10.06.10 at 2:10 pm

Re: #23 “VancouverGoinUP Anyone tried to buy a house in Shanghai recently? Vancouver going for dirt dirt cheap and everyone but Canadians get it. ”

This is a lie that’s touted in Van many times. Average home price in Shanghai is around $200-250/sf.

http://www.globalpost.com/dispatch/china-and-its-neighbors/100302/china-economy-shanghai-real-estate-marriage

#126 CTO on 10.06.10 at 2:12 pm

Garth

F is warning us of a $ trade war.

Garth. Could you provide any hints as to what an impact this will have on our economy and house market???

#127 Chris in Langley on 10.06.10 at 2:24 pm

Devore,

I thought about responding to the drivel from Devil’s Advocate but you did a terrific job. Doesn’t he realize that the more he opens his mouth the more foolish he looks. He lives at home, he has a license for selling but he can’t sell, he’s late 20’s, maybe early 30’s, and he’s been gone a month, but he’s back because he’s been listening to Zig Ziglar. His real desire is to be someone other people look up to. The catch is “people look up to people who produce not blab.”
The realtor that Garth highlighted from Edmonton is a carbon copy of DA, but DA hasn’t noticed what a fool he is making of himself. Like another poster said over a month ago…he’s full of crap. If you’ve ever been involved in business and actually put food on the table, it’s easy to see through the thin veneer of DA. The only reason he’s able to spend so much time blabbing other people’s thoughts is because he has someone else supporting him financially.

#128 triplenet on 10.06.10 at 2:29 pm

The housing bubble….for all you VI west coast real estate virgins:
1994 market price peak
2000 market price trough
25-30% negative price adjustment over 6+- years
2001 market price resurgence
2008 market price peak?
225% positive price adjustment over 6+- years
2008 – 2010 uncertain years w/ stable/minor fluctuations in an uncertain market
2010 – 2016 : a 25%-30% negative price adjustment???. Will the market respond similarly to the past price correction?
———————————————————–
Cap rate ranges of 4% – 5%…….now that’s scary, but they are on the increase. Commercial lending rates are trending upward, risk is very sensitive. Silly money is being ignored (thank God). Trend for overall rates will be upward – for various reasons.
———————————————————–
Greece is paying 11% interest rate for sovereign debt – gulp!
Makes you think about those rates coming our way.

#129 Old_is_Gold on 10.06.10 at 2:42 pm

Just as the public in general, including some on this blog, not see, or refuse to see the looming RE apocalypse, so too does an even larger segment of the population, including the G_Man, not see, or refuses to see the looming APOCALYPSE of a different nature.

Just because an idea does not fit a person’s knowledge base or ideology, or just because one does not understand a particular subject, Biblical prophecy for instance, does not disprove the said subject. Rather than name calling the RE naysayers would be better served to look at the information being presented, without bias, and then they could form educated opinions, and choose to believe it or not.

The same goes for the naysayers on matters just slightly more Apocalyptic; they have not a clue about the information on which our conclusions are based, and yet they denigrate, name-call, and resort to attacking the messengers rather than the message, and the G_Man has certainly been guilty of this on more occasions than one can count. Let’s just say that ignorance is not bliss as many are about to find out about RE, the same however, applies to matters of far greater import than one’s portfolio. That is what I believe, yet my comments are not meant to convince anyone, if you disagree with me, or some of the others on this blog, that is your right to do so but name-calling and denigrating one’s right to free speech does not prove anything. Actually it does prove much about the people who resort to such tactics…but I will leave that for another time.

Please don’t shoot the messenger if you dislike the message! Thank You.

#130 Bill ( Peterborough) on 10.06.10 at 2:47 pm

#94 Victoria Tea Party;

Wow. Right on . Keep em coming.

#131 Bill ( Peterborough) is a FRAUD on 10.06.10 at 2:54 pm

Bill, you are a coward AND a NUTTER too! :)

I read this blog daily and this is the first time I have felt moved to post.

You NUTJOBS badger people for debate with insults and personal attacks

You also clog and glom up the blog with your babbling dissertations

Well you finally get someone to waste their time on you and you run…

JM from London does give some good stuff from the front lines and his posts up until this point need no backing

gimme a C!

gimme an O!

gimme a W!

gimme an A!

gimme an R!

gimme a D!

#132 NZ on 10.06.10 at 3:33 pm

Catching gains now in Real estate is fine…However,…
Your jumping into the fire by shifting into the stockmarket,,,,bad move… No real returns will be had…either the stock market hyperinflates or it crashes into a dust bin.
Really, few options are available for most people.
Dont forget….Stocks are pieces of Paper…How many Dow 30 stocks exist today that existed 30 years ago??…only a handful….most went bankrupt. Soo…for some folks with little knowledge and little want for risk…something such as a home..might be a better long term hold…no matter what…
You buy a home not as an investment but as a place to live…no?

#133 Randman on 10.06.10 at 3:37 pm

F warns of “currency wars”

http://finance.sympatico.ca/home/flaherty_warns_of_currency_war/1048b4e5

#134 Mister Obvious on 10.06.10 at 3:46 pm

A little cappuccino and street music is all that’s needed to boosts spirits (and hopefully sales) at the Millennium Water Ghost site. This morning’s hardcopy version of the Vancouver Sun (Page A3, story not on internet) claims Vancouver City Councillor Suzanne Anton has called for a bit of cash to be spent on buskers and coffee kiosks to “animate” the place. Some quotes:

” She planned to introduce an emergency motion at Tuesday’s council meeting to call for last-ditch efforts to ‘create a welcoming environment’ the South East False Creek development”

——–

“Vision Councillor Geoff Meggs panned Anton’s suggestions saying the last council wasted taxpayer’s money on the project and not a penny more should be wasted. ‘I’m kind of astonished by [Anton’s motion] because we are fighting to keep costs down to taxpayers… and she is suggesting we incur extra costs for people to go down there to drink coffee’”

——–

“Millennium Officials would not consent to an interview for this story”

#135 Pat on 10.06.10 at 3:54 pm

Devil’s Advocate wrote:
“You can have anything you want… it all comes down to work.”

utter nonsense

#136 jess on 10.06.10 at 3:58 pm

A U.S. tax relief scam supported by slick TV ads has been shut down after ripping off consumers for more than $60 million.

Many Canadians who watch American cable channels would have seen the ads, which feature smiling taxpayers bragging about how much their tax debt was reduced.
http://www.cbc.ca/consumer/story/2010/10/06/con-tax-relief-scam.html

#137 Patsan on 10.06.10 at 4:00 pm

Pete on 10.06.10 at 12:15 pm

Maybe walking in the mall is a new strategy to save on a heating bill? :)

#138 Pat on 10.06.10 at 4:06 pm

#102 Live within your means:
“Where do you live Pat?”

About 20 miles south of San Francisco.

I have relatives in Halifax.

#139 Live within your means on 10.06.10 at 4:08 pm

#66 Alberta Ed on 10.06.10 at 9:58 am

We looked at Nova Scotia RE while touring there last year; interesting area, very scenic, but transportation is restricted, there’s the HST, not to mention often rotten weather.
…………….

Granted transportation is the pitts. But rotten weather!! In comparison to Alberta. You gotta be kidding.

#140 Ian in NS on 10.06.10 at 4:10 pm

I’m with Foggy (#12): that average price smells wrong. I received a flyer from the local realtors recently and it stated the average price in Halifax was about $300-$320K, while Dartmouth was about $210K (I forget the exact numbers and have since tossed the flyer out). It doesn’t sound right that the entire province would be at Halifax levels.

I do think we’ve hit the plateau. There’s a condo for sale in my building and it’s been listed for a couple months now and seen a price decrease. You never used to see price decreases anywhere in HRM but they’re happening now.

#141 Live within your means on 10.06.10 at 4:14 pm

.#67 rory on 10.06.10 at 10:03 am
#41 Soylent Green is People

SGIP …there you go again using that word again – hated, hate whatever …it appears to me that you are the terrorist around here …I love Harper compared to the alternatives … bugger off.

………………..
I didn’t read Soylent’s post. But, three quarter’s of the pop don’t love, nor trust Harpie. So why should you say bugger off?

#142 Bill ( Peterborough) on 10.06.10 at 4:15 pm

Re Jm in london and other Idiot who can’t come up with his own monicker.

The links I have posted are fact based. By reading vastly on certain topics and keeping abreast of what is going on then I can make my statements .

Funny how the link’s which I refer too have not been dicreditted or the people who researched them have not been found guilty of libel/ slander.

Now alot of things Garth will not allow me to post because it may be offensive to certain groups of people.

You 2 clowns are so transparent.

Shalom Baby.

#143 DaBull on 10.06.10 at 4:18 pm

#92 Calgary Rip Off on 10.06.10 at 11:57 am

What would you say if I told you that somewhere right now there are many “stars” that are bigger, better, faster, and smarter than the current celebrities or nerds running this world? Except no one knows about them because they dont have the producers necessary to brainwash the audience about their product or skills.

and because they are wearing tin foil hats. LOL….

#144 Ben on 10.06.10 at 4:22 pm

#106 VancouverGoinUp on 10.06.10 at 12:57 pm

Oh what a beautiful morning oh what a beautiful day Oh what a beautiful morning Victoria Up Up and Away

http://www.vancouversun.com/business/Rosy+outlook+Victoria+real+estate/3630093/story.htm

………………………………………………………………………

One doesn’t have to look at the link to know where the “All Roses” report would come from. Well I’ll be…..ReMax. Who would of guessed?

LOL… Your to funny

#145 Pat on 10.06.10 at 4:27 pm

Regarding the $324,928 average price in NS.

From mls.ca I find:

9,420 = number detached houses for sale in NS (+ a small chuck of NB, minus a piece of Cape Breton)

4,702 = number houses for sale in the same region below $200,000

The median price appears to be about $200,000.
So, Garth, where did you get that $324K number from?

(Not that I don’t agree that RE in NS is overpriced, but I dislike exaggerations. Especially in support of a valid thesis; they weaken the argument, as somebody above mentioned).

What have I to gain from exaggeration? This source quotes CREA. Same number. — Garth

#146 VICTORIA TEA PARTY on 10.06.10 at 4:33 pm

Real estate mogul Remax is at it again, this time in the city where the real estate clock is rigged up to stay at one minute to midnight (no backsliding now!), Victoria BC.

I suspect, actually, that Remax is on a nation-wide propaganda mission to shore up the leaky dikes, dams and what-not of the industry after some unkind hits from various sources all year.

Hot on the heels of the earlier-this-week report, out of Ontario, where Remax reported that it’s apparently all sunshine and roses, for real estate participants and those wanting to join in the debt-laden fun, we get this from Victoria’s Remax observation post.

“Rosy outlook for Victoria real estate” says the front-page headline in today’s Times-Colonist.

There is nary a doubtful word heard in this candy-cane puff piece; in fact nothing that approaches journalism. Not even close.

Low interest rates are the main drivers of the market in these here parts, we are told by a Remax guy.

“Our mortgage rates remain lower than they ever have been…(below 4 per cent)…and that should keep the level of activity in Victoria strong,” said this local minion.

Minion over palm and pine, I say. Poppycock!

“We should see a strong market leading into (next) spring,” this effervescent chappie chirps on. Really? How does he know? Is he a soothsayer or a purveyor of snake-oil? Wished I knew. I could make some money out of my real estate, then, couldn’t I? But would I? Haven’t the foggiest.

Meanwhile over at Global TV’s noon hour show, real estate diva Sarah D was doing her regular Wednesday brain massage therapy routine, with her buzzed-out looking show host, grinding on about how for only $790-thousand you can be into your dream home in Greater Vancouver by Christmas!! This Christmas!! By golly!! Wow!!

OK, Sarah, but what do I do about gifts for the new house? A second mortgage and yet more debt? Have you ever stopped to think about how much debt is enough or more than enough? Your greed is palpable along with the nudge nudge, wink wink arrogance.

Me oh my.

I think that interest rates must, and will, go up; but when and by how much is the mystery.

Buying, now, into real estate at these low rates and still too high prices especially with the economic/geopolitical mess buzzing all around us, is more than a mug’s game.

It’s a gamble that will destroy those who can least afford a plot of real estate which is to say most people, if rates move up.

This T-C article and that Global broadcast are patently unfair. Mainly because there is no dissenting opinion in either. There is no good advice on anything.

If you buy into this real estate propaganda, and then go into debtor’s hock all you property virgins and non-virgins, you stand to get what you deserve more than what you actually wanted in the first place.

Shame on the so-called news media for continuing to shill for an industry that cries out for balance.

#147 Corey Regan on 10.06.10 at 4:53 pm

garth I think you have been another victim of real estate fantasy world. Halifax has the highest prices in N.S. and its 75K lower than what you were told. Heres the most recent stats

Average MLS® Resale Price for Local Markets

City August 2009 August 2010
Halifax $231,203 $254,298
Saint John $166,117 $173,918
Quebec $220,760 $239,688
Montreal $279,897 $303,707
Ottawa $315,176 $322,281
Toronto $387,899 $410,995
Hamilton/Burlington $291,374 $299,812
Winnipeg $207,389 $222,597
Saskatoon $281,871 $305,866
Calgary $388,725 $385,712
Edmonton $318,321 $326,550
Vancouver $608,032 $680,782
Victoria $481,279 $471,929

Source (CREA). — Garth

#148 Reasonfirst on 10.06.10 at 4:53 pm

#106 VancouverGoinUp

Your making youself look foolish…err…more foolish. Unit sales in Victoria are at a 20 year low.

#149 jess on 10.06.10 at 4:56 pm

Who benefits most?
Perhaps Mr. Harper should look at this article BEFORE these private prisons are built

Cash-Strapped States Resurrect “Debtors’ Prisons”
by: Nadia Prupis, t r u t h o u t | Report

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

Wednesday 06 October 2010
BEARDEN V. GEORGIA, 461 U. S. 660 (1983)
Case Preview

Full Text of Case

U.S. Supreme Court
Bearden v. Georgia, 461 U.S. 660 (1983)
http://supreme.justia.com/us/461/660/

“Imprisoning probationers for failing to pay court debts was found unconstitutional in 1980, when Georgia resident Danny Bearden was sent to prison for two years when he could not pay $550 in legal fees, despite his efforts. In Bearden v. Georgia, the Supreme Court ruled that such practices violated the Equal Protection Clause of the 14th Amendment – but states throughout the country have begun openly disregarding these principles in their efforts to balance their budgets.”
================
The ACLU report highlights a few exemplary cases. Gregory White, a homeless man in Louisiana, was arrested for stealing $39 worth of food from a grocery store and assigned $339 in legal fees; when he was jailed for being unable to pay, White spent 198 days in jail at a cost of $3,5000 to the city.
=
As if that rogue trader is going to pay the billions back… Debtors prison would keep him a long time and would the state pay his fees for keeping him there.

#150 Ben on 10.06.10 at 4:56 pm

Housing prospects ‘DISMAL’: IMF
STEVE LADURANTAYE — REAL ESTATE REPORTER
Globe and Mail Update
Published Wednesday, Oct. 06, 2010 9:27AM EDT
Last updated Wednesday, Oct. 06, 2010 10:30AM EDT

Residential housing will act as a drag on economies around the world for the next eight years, the International Monetary Fund said Wednesday, even in countries such as Canada that appear healthy.

In its October World Economic Survey, the organization warned of “dismal” prospects for real estate, saying “rebound” economies such as Canada and those in the Asia-Pacific region were faring well, but that government intervention to cool overheating markets means that real estate won’t be a source of growth in the coming years…..

http://www.theglobeandmail.com/report-on-business/economy/housing-prospects-dismal-imf/article1745015/

#151 Sam on 10.06.10 at 5:03 pm

#120 Tony on 10.06.10 at 1:59 pm

#99 Pete

In Oshawa or Whitby no one is buying anything but that has been the norm since 1981. They never recovered one iota from the 1980 recession. If you
_______________
Coming in to Toronto from East of Scarborough/ Markham i’s usually the busiest, slowest stretch of highway 401 in the mornings.

Something has been happening in those burbs the last 10 years – mostly real estate I bet. Lots of far flung Los Angeles or Phoenix Mississauga type subdivisions with no nearby work or industry and with piss poor transit.

#152 Sam on 10.06.10 at 5:07 pm

#147 jess on 10.06.10 at 4:56 pm

Who benefits most?
Perhaps Mr. Harper should look at this article BEFORE these private prisons are built
_____________
He probably has, and that’s what he wants.

This was the guy who wanted to kiss Dubya’s ass worse than Tony Blair did, remember?

The same one who didn’t want to investigate the killings of brown Canadians, and go around the world to kill olive skinned people.

Harper makes “the lowest form of human life” look noble

#153 Rainbird on 10.06.10 at 5:14 pm

Garth,
What about this new wave of money printing by Bernanke et al. It apparently will be a nuclear version or shock and awe type. The whole world is purposely trying to create inflation. It was stated by Japan.

Zero interest rates on mortgages all over the world? Free money?

Wouldn’t this tend to increase the price of real estate rather the reduce it?

If the World Gov’ts are trying to create massive inflation in order to create jobs I believe your theory of deflation will be doused once again as it was in 2008.

Would you agree?

US money supply has no impact on Canadian real estate prices. Or American, for that matter. — Garth

#154 Sam on 10.06.10 at 5:17 pm

#122 junius on 10.06.10 at 2:02 pm

#96 DA,

Here is an excellent piece from Barry Ritholz’s Blog “The Big Picture” on this issue. Very on point.
_________________

With time, ALL bureaucracies eventually hurt their own constituencies.

It’s a well known fact.

As far back as the book “systemantics” (late 70s) this type of thing was being systematized.

Unions? eventually hurt the members

standing armies? eventually hurt the host nation

financial regulators set up to protect the public? eventually hurt the public …

#155 Sam on 10.06.10 at 5:19 pm

>> As far back as the book “systemantics” (late 70s)
>> this type of thing was being systematized.

should have been
“this type of social / institutional perversion was being systematically studied, catalogued and dissected”

#156 Joe on 10.06.10 at 5:35 pm

Sellers’ market in Montreal

Montreal is the country’s only strong market for property sellers, with balanced conditions emerging as the norm in most of Canada’s large cities, says the Re/Max fall market trends report published yesterday.

Despite softer sales during the summer months, a three-per-cent decrease in active inventory year over year has bolstered prices, the report says. Year to date (until August), the average price of a residential property in Montreal grew 8.7 per cent to $288,923 this year, up from $266,125 in 2009.

Sales of properties priced from $200,000 to $350,000 are moving quickly, with first-time buyers a driving market force. The shortage of resale inventory at this price point has prompted several new construction projects targeting first-time buyers.

http://www.montrealgazette.com/business/Sellers+market+Montreal/3629240/story.html

#157 Debt's Dark Embrace on 10.06.10 at 5:37 pm

APPLAUSE !
………………………………………………………………………
#104 Devore on 10.06.10 at 12:49 pm

Devil’s Advocate

I’ve not read the blog post responses to this Garths most recent editorial “Kiss this” nor will I.

Thanks for officially announcing that you are indeed just talking to yourself. Your arrogance, hubris and self-righteousness are overpowering.

You caught me. I have no intention of reading the Blog DAWG comments as refraining from doing so is vastly more condusive to a positive state of mind. However, somehow, before shutting down the window I noticed your question.

Why even post? Surely, you could just turn off the computer, and talk to yourself that way, we don’t all need to witness the spectacle.

The blog is toxic, and turning you negative, yet you keep reading and you keep posting. You keep posting dozens of paragraphs a day, yet you say nothing.

You’re an enigma, wrapped in a riddle.

#158 Bill ( Peterborough) on 10.06.10 at 5:54 pm

Re # 147 Jess

Perhaps Mr. Harper should look at this article BEFORE these private prisons are built.

*******************************************
He does not care.

Build them and we will fill them.

Maybe he can post a catchy ad like tthe one below.

Welcome to a police state.

http://www.youtube.com/watch?v=37NWVy54zsI

#159 concessionman on 10.06.10 at 6:10 pm

Holy Crap Garth, your right…

Just got a letter from TD…my VMR went up Oct 1st…all the way to 2.1%….the horror…

Actually, as McDonalds would say, “I’m Lovin it”….only 2 years to go on this mans bunker….but I pity a bit those who jumped “all in” at these rates (a year ago, it was 1.3% or so) and are living paycheque to paycheque to pull it off…I say “a bit” because if they’d done there homework and looked at historical rates they wouldn’t be heading where they’re heading…but, alas, no sympathy for self inflicted wounds…

#160 concessionman on 10.06.10 at 6:13 pm

Oh yeah,

Canadian Tire has 1300W Generators on sale this week for only $169…$130 off! I got one (cuz ya never know..) lol

#161 Mikey on 10.06.10 at 6:14 pm

http://www.economist.com/content/global_debt_clock

#162 Calgary Rip Off on 10.06.10 at 6:21 pm

#141 Da Bull:

Thanks for repeating my argument and nothing of your own. How typical. And boring. GROW A PAIR.

#163 Nostradamus Le Mad Vlad on 10.06.10 at 6:24 pm

#140 Bill (Peterborough) — G’day Bill. You never mentioned you had an evil twin bruvver (#129)! Stick him in the forthcoming ice age — that will cool his jets!

Is everything still on for next year to have a two-week financial orgy at your place?

As to the link I added last night, about the coming winter in Russia is expected to be the coldest in 1K years, a couple of neighbors and I were chatting about the huge volume of berries on the Juniper trees.

She said it means the winter will be bitter this year, so enjoy thawing out from a Molson Canadian!

#121 Dan in Victoria — “But some always think it’s diffrent this time. It’s not.”

It will be somewhat different this time, Dan. As The World Turns, each of the five races has 250 years or so to call the shots, to shape the world they want. The other races get no say in this.

The next few millenia are going to be mighty different than what there is now — we’re heading into the grey, then dark ages again.

#94 VICTORIA TEA PARTY — “China, India, Brazil and Russia prepare their economic journeys through a new world sans the American Empire, while “The Wall Street Delusion” continues. I have yet to see more noise, confusion and just plain lies. While the BRICs prosper we do not. The economic aspect of empire is shifting eastward with the political, military, and cultural empirical parts (our parts too!) to surely follow.”

Best post of the day. See my response to Dan in Victoria. There are a few here who do realize the reality of life, that all things must pass and change!

#164 Pat on 10.06.10 at 6:29 pm

“What have I to gain from exaggeration? This source quotes CREA. Same number. — Garth”

Maybe it’s a typo in the article.

#165 Dan in Victoria on 10.06.10 at 6:34 pm

Good article on Icelanders, not to happy apparently.

http://www.bloomberg.com/news/2010-10-04/icelanders-hurl-eggs-red-paint-at-parliament-walls-as-thousands-protest.html

#166 Bill Gable on 10.06.10 at 6:35 pm

Sarah Daniels was a traffic reporter here in La La Land. Perfect training to be a Realtor.
Since I don’t wish to use harsh language on Mr. Turner’s dime, I will refrain from a profanity laced tirade.
Suffice to say, my CAT would be a better choice, to help you go broke in this jerkwater town.
Global and the other news outlets are getting PAID by the RE industry.
Think of the army of paper shufflers needed to keep the con alive!
A TON of people have the incentive to keep the crap game going.

Read “”Freakonomics”…. it’s all incentive.

I can just about hear Obi Wan saying…..”Follow the MONEY, LUKE…”.

Cui Bono, dude?

#167 Yeah Right on 10.06.10 at 6:36 pm

Stocks are pieces of Paper…How many Dow 30 stocks exist today that existed 30 years ago??…only a handful….most went bankrupt.
————————————–
I count 10 of of 30 companies that have been there 30+ years – more than a handful, some more than 50 yrs+

3M MMM 1976-08-09
Alcoa 1959-06-01
Coca-Cola 1987-03-12
DuPont 1935-11-20
ExxonMobil 1928-10-01
General Electric 1907-11-07
IBM 1979-06-29
Merck 1979-06-29
Procter & Gamble 1932-05-26
United Technologies Corporation UTX 1939-03-14 (as United Aircraft)

#168 gentleInvestor on 10.06.10 at 6:55 pm

Garth,

How about a few east coast stats every now and then instead of just T.O., Van and Calgary?

#169 jess on 10.06.10 at 7:04 pm

look at these images this is terrible!!!!!!!!!!!!

http://www.boston.com/bigpicture/2010/10/a_flood_of_toxic_sludge.html

#170 Bill ( Peterborough) is a FRAUD on 10.06.10 at 7:14 pm

How dare you call a girl names…

Just posting reality ya old closed minded fart – alone and bitter with less than half your life ahead of you?? Aw poor Billywilly…is he got too many boo boos from his wittl mean ol wife an now he needs to rant at his campy wampy fire?? Tree murderer…

Debunking your links? K…here we go:

In General, since you foolish old men seem to think quoting is some kind of superpower:

“The central belief of every moron is that he is the victim of a mysterious conspiracy against his common rights and true deserts. He ascribes all his failure to get on in the world, all of his congenital incapacity and damfoolishness, to the machinations of werewolves assembled in Wall Street, or some other such den of infamy”

H. L. Mencken
http://en.wikipedia.org/wiki/H._L._Mencken

Now to your clap trap:

Rothschild:

There have been over the past couple centuries, several versions of what IS an URBAN LEGEND ascribed to various cabals such as The Freemasons, Illuminati, Bilderberg, etc. – The amount of variation is key here – to have some serious fun with this the web site The Public Eye has an AWESOME web site here:

http://www.publiceye.org/conspire/generator.html

This site has KILLER areas on all conspiracy theories.

Here is a site with all the variations on the theme:

http://www.skepdic.com/illuminati.html

How about a goldbug investors site?

http://usagold.com/federalreserve.html

How about some answers on one of Bill’s hero’s and just because he has “no dirt” does not make him SANE:

http://www.publiceye.org/conspire/flaherty/flaherty1.html
http://www.dailykos.com/story/2008/9/15/142024/288

How about we go MSM for the FEMA camps?

http://www.popularmechanics.com/technology/military/news/4312850

http://conspiracyscience.com/articles/fema/camps-california/

You sad sack old farts are a bunch of easily lead morons who’ll be the first to be rounded up in the middle of the night posting anti-new world order clap trap anyway. The net is the creation of the US military & the NSA anyway so the already know who you are, where you live via your URL, and have accessed your brainwaves through HAARP so you’re DOOMED

DOOMED!!! MUWAHAAAAAAHAHAHAHAHA!

Give it a rest nut face boomer and make way for the rest of us…

Logan’s Run was one of MY Generation time travelling to mess with your heads in thinking it was YOUR generation the world had to worry about!!!

SUCKERS! I’ll be the one in the tower to the left…NO! the other left…girls have a place in the military in my world. My machine gun will have the pink muzzle…

#171 dark sad person on 10.06.10 at 7:28 pm

#119 JM in London on 10.06.10 at 1:53 pm

So if you’d like a debate – All I’m asking you to do is define what it is you’d like to argue.

Yourself and DSP like to fire all kinds of shots and challenge people to debates with authority. For the most part, most here don’t have the time, see you for the frauds you are ergo, what you write is hot air.

You then attempt to justify the untenable position you take with links and challenge all to disprove “your” point(s) (a link isn’t “yours” I’ll remind you) – the multiple arguments you present present a special problem in that debating you on all simultaneously isn’t practical.

Let’s do it one by one

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

lol JM

Why don’t you try posting something debatable sometime–but-if you do post anything other then your normal drivel–I’ll be sure to respond-

Seems your always bitching about how much i post–so–that should give you ample selection to choose from–so–have at it–

Let’s rock-

http://www.youtube.com/watch?v=-cmo6MRYf5g

#172 Nostradamus Le Mad Vlad on 10.06.10 at 7:33 pm


Out Of Chaos comes order (or something like that). So the Fed and ECB are leading the world down a garden path.

IMF is bankrupting taxpayers so banks stay in biz.

Iceland “Here is the message the people of planet Earth are sending to the politicians; “We will NOT pay for the bankers’ greed and stupidity! WE will resist all efforts to force us to pay for the bankers’ mistakes with whatever means are necessary. But you got into this mess without our permission and you can get out of it without our help.” wrh.com.

Currency wars heating up? US$ sinks, Yen and Euro up.

Well DUH! How much intelligence does it take to read the writing on the wall? Plus — Benny’s exit strategy.

2:04 clip Gold getting its knickers in a twist! This also leads to Obama’s plan to swap citizens’ IRAs (RRSPs) for T-Bills, then dump the entire economy.

42 million on foodstamps. Direct from the US govt. Change we can believe in, like it or not.

Someone is causing dissension between countries. Who benefits?

A new way of gaining ‘net control; flood PCs and Macs with malware, then ban the users from the ‘net.

Anystan “Fighting for peace is like screwing for virginity!” wrh.com.

Welcome Monsanto! Set up new govt. food agencies worldwide.

Monsanto What goes around comes back around (to bite one hard where it hurts).

Interesting, because it could lead to this.

Bill (P) — Check out the third para. Things are starting to gel!

#173 goldenfox on 10.06.10 at 8:03 pm

Mortgage Mess down south

http://www.zerohedge.com/article/out-control-listen-terrifying-911-call-thugs-hired-jpmorgan-chase-breaking-down-door

#174 Reg on 10.06.10 at 8:04 pm

@

#60 prairie gal on 10.06.10 at 9:28 am
#31 Shoggy on 10.06.10 at 6:01 am
@ #21 Reg

Dude, you serious that your life is on hold all because you rent? I suggest that you are seriously lacking in the “life” department. There’s more to do on the weekend than just going to Home Depot.
——
Word. Turn off the HGTV and go LIVE, man. When I was your age I was tripping across Asia and South America, building lifelong memories and some real world perspective (and character). Stop being so one-dimensional.
——————————————–

First off… Im not your dude..budday! j/k

Trust me, I am not lacking in the “life” department. I go out and play, believe me, don’t worry about that. I will probably require a new liver at the age of 30.

But to me purchasing a house and starting a family is more important than going to Asia or South Africa. Thats what I have the discovery channel for. So stop being such a… Hippie.

#175 tkid on 10.06.10 at 8:19 pm

I don’t know about other markets but the Toronto condo market is in a full state of delusion. A 450 sq foot condo with the bedroom well away from any windows and a kitchen that is part of the hallway is renting for $1250 a month minimum, $1500 is the average price for the downtown Toronto core. And to buy these places they want over $250,000.

If a correction hits these units it will hit unexpectedly, and it will hit hard, and I admit to having my doubts that it will hit at all.

#176 Dan in Victoria on 10.06.10 at 8:37 pm

Nostradamus @158
Yeahhh….. I’m talking about the normal business cycle going up, and going down.
Buy low sell high. That sort of deal.

I do find your interpetation of my comment quite interesting though.
As always, I enjoy some diffrent angles to think about.
And I would have to concur that there are changes coming.
Is it their turn again?
http://franklaughter.tripod.com/cgi-bin/histprof/misc/mongol.html

#177 Bill ( Peterborough) on 10.06.10 at 8:42 pm

Re # 168 Idiot who cannot come up with her own monicker.

Been to all these sites . Truly shows how naive you are.

You must be Jm’s protege. Did he get you to right all this out for him too.

As far as life is concerned it’s great.

I can sit here all day and entertain your BS. But I have better things to do. ( Catch Bass, just slamming them out here)

Both you clowns are so transparent.

Just a final word before : When senators, congressmen say the same thing as well as learned men about what I have stated. To me that is credibility.

The sites which you look at are to create smoke screens to hide the truth.

#178 Maxamillion on 10.06.10 at 8:44 pm

#173 tkid

If you think that is strange have a look at this condo project in Toronto. Now this is crazy.

http://urbantoronto.ca/

#179 pjwlk on 10.06.10 at 8:53 pm

Globe and Mail Poll
Is now a good time to buy a home?

Results (9:40pm Eastern)
Yes 38% 1211 votes

No 62% 1975 votes

#180 JM in London on 10.06.10 at 8:58 pm

#169 dark sad person on 10.06.10 at 7:28 pm

First a bit of recent history:

Your Post:

“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”

My Reply:

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?
_____________________________________________

My reply is structured on the basics of debates & intellectual discourse– if you need quotes we take it all the way back to Aristotle – You really need to see quotes on basic intelligence?

You claim to be an intellectual so again I’ll ask:

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?

#181 Jeff Smith on 10.06.10 at 9:18 pm

>#58 Evangeline on 10.06.10 at 9:25 am
>((It was a beautiful piece re how Harper is hated
>throughout Canada by everyone))
>How amusing, wasn’t it you who were complaining
>about “hate speech” a few days ago? Now you seem to
>be saying that in some cases, hate is a good thing?
>I very much doubt that “everyone” “throughout
>Canada” is a hater. The way to get rid of politicians you
>disagree with is to prove them wrong with intellectual
>honesty, rational debate, historical counterfacts, truth,
>reason, common sense, logic and even humour directed
>at their policies. Hatred is a totally negative energy that
>hurts the hater far more than it hurts the hatee.

LOL You surely remind me of that 800 year old dude, what’s him name again? Yoda ? A true master!

#182 Behavioral Finance on 10.06.10 at 9:30 pm

Kevin (#38),

I hate to break it to you, but there were never free markets in the first place.

#183 Behavioral Finance on 10.06.10 at 10:10 pm

Yeah Right,

Looks like you are missing a valuable piece of information as many companies merged or were bought out.

#184 Behavioral Finance on 10.06.10 at 10:12 pm

Stocks are pieces of Paper….

then what is fiat money?

Currency backed by the power to tax. — Garth

#185 dark sad person on 10.06.10 at 11:05 pm

#178 JM in London on 10.06.10 at 8:58 pm

You claim to be an intellectual so again I’ll ask:

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?

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

Here’s what hurts you the most JM–

You got your ass kicked by a dope smoking writer of useless diatribe- Ouch
Remember?
I’m no intellect–but i have a fantastic memory–

http://www.youtube.com/watch?v=EvGJvzwKqg0

#186 Future Expatriate on 10.06.10 at 11:34 pm

then what is fiat money?

Currency backed by the power to tax. — Garth

Good one! Hmmmm. Well then that’s a certain portent of currency collapse every time taxes get too onerous and a revolution or two “just happen”.

#187 SophieZombie on 10.07.10 at 1:11 am

# 40 Devil’s Advocate
True story: I came to understand that I could have anything I wanted when I was a child of 12 years age.
——————
Are you high on Kool-Aid or in trans after reading The Secret ? This is exactly why Canadians are in such amazing debt level. If a 12 years old kid could push his parents to buy a bigger house and convince them then a yard and a dog will be paradise, it is a problem. If people feel granted to have SUV, granite counter top and 3000 square foot with clerk and secretary earning because they are granted to have whatever they want , if that is The Secret of Life and happiness… This is why SSRI/antidepressant are an unfortunate commodity.
Because material is a short happiness moment, them
debts need to be paid and happiness is shortly back to previous level.
**********************
If we can get individually what ever we want as per your mantra, why do there is war, natural disaster, a market correction( or balance, in RE vocabulary) ?
Did you forget to not wish for them ?

#188 James Wetherbee on 10.07.10 at 1:14 am

Many comments throw negative things about this. Waht we are going to do is to compare what would be the good thing to do for a mortgage rate.

#189 LB on 10.07.10 at 1:15 am

#40 Devil’s Advocate

Today the cost of an average house in some areas of Canada requires 70% of family income rather than the standard 25-30% of family income going towards house purchase,as was the case in your youth.

Therefore, today it is not true that merely working “harder” facilitates the buying of a house, but rather it is the decision and ability to REDIRECT a greater percentage of total income towards house purchase, over any other expenditure, that is required.

At some point, across the societal spectrum, this decision and ability to redirect the majority of one’s resources to a single asset will be maximized and is not sustainable.

Canada has reached that point in real estate.

#190 LB on 10.07.10 at 1:31 am

#111 GBoomer

Well said!

#191 Grady on 10.07.10 at 6:48 pm

“Total destruction is the only solution”…Bob Marley

#192 G on 10.07.10 at 7:08 pm

Would you be surprised if you found that many of my friends have been planning bankruptcy for the last year while living wild and traveling on the credit for the past few years. This is a trend that is rapidly spreading to many more. Lets do the math, you have a 40,000 dollar student loan that you cant bankrupt for 7 years, you make 12 dollars an hour and your rent is 1350 a month. You have visa upping your limit monthly and giving you all the free cash you want . Lets pay off the student debt with the credit card and go to hawaii for a month, then stock your second room with food for a year and max those cards out. You dont have anything they want cause you were always a broke student anyway, so you have 2 choices… go to your bank and beg for a high interest loan to consolidate, work the next 8 years paying it off and finally scrape by even. Or… Max those puppies out, go crazy, line of credit pays off the student loan and we go bankrupt on 76,000 bucks of fake money. Nine months and your clear.

Easy

#193 Timing is Everything on 10.07.10 at 8:05 pm

#182
then what is fiat money?

Currency backed by the power to tax. — Garth
—————————————————————-
How about ….
(from wiki)
Historically, money in the form of currency has predominated. Usually (gold or silver) coins of intrinsic value commensurate with the monetary unit (commodity money), have been the norm. By contrast, modern currency, as fiat money, has no intrinsic value…..

….and is backed by the power to tax.