The veneer

Jane is 57 and has trouble putting together a sentence without referring to “my separated husband.” She hates him. Not hard to understand.  One day they fought about money. He got in the Grand Am and drove off. She never saw that car again. Or him.

So she kind of assumed responsibility for the house, the bank account, one kid still home and the mortgage. That was fine – no more fights, anyway – until she lost her job a year ago as a marketing executive at a mutual fund company you’ve certainly heard of. By the time she found my email address, Janie was living on her RRSPs, and eating KD off a granite countertop in the great sea of suburbs which flow east and west and north from Toronto.

Visiting her, I soon found she’s not alone. On her single block of three-year-old houses, all faux gothic and built for curb appeal, there are (that she knows of) two young couples struggling to make mortgage payments, a couple who both lost their jobs at the City of Toronto, and three single parents (the divorce rate, after all, is 45%).

Driving down the street, you’d never know this, of course. Yards are kempt, SUVs in every driveway, the veneer of achievement.  Blocks away are the ubiquitous big box stores. Staples. Wal-Mart. Winners. Best Buy. Teeming with stuff from China. This could be Kelowna, Calgary, Georgetown, Dartmouth or Milton. Middle Canada.

But behind the California shutters and amid the Debbie Travis hues all’s not exactly as it appears, as families struggle with debt and dislocation. For most of them, home ownership came at a cost so high a busted marriage, lost job or mortgage renewal can bring crisis. And now loom two more unwelcome visitors – slumping real estate sales and melting prices.

If the Age of the House is ending, as I have argued, the Era of the Burb goes with it. Despite the frenzied buying of entry-level homes by a clutch of first-timers seduced by family and developers, the future of suburban real estate is far bleaker than that of city properties. Among the threats are rising energy costs, the gathering Boomer exodus, over-indebtedness, slap-shack construction, rising property taxes and an economy that sucks. This is the land where it takes a litre of gas to fetch a litre of milk. It epitomizes middle classness. And the middle’s under assault.

Will we travel the same road as American suburbanites? This week a new study (Brookings Institution) found poverty rates rising faster in the burbs than in the cities. Of the 5.5 million new poor in large urban areas in the last decade, two-thirds live in the suburbs. The increase in poverty there: a whopping 37%.

One big reason has been a collapse in home equity, which drains off family wealth – bad news if you happen to have the bulk of your net worth in your house. And that’s the overwhelming reality of the Canadian suburbs.

No doubt in my mind this is a rare moment to bail.

Think about it: mortgage rates are still incredibly cheap. Demand for real estate has waned, but not yet croaked. Listings have yet to crest. Most Canadians are more focused on the next stat holiday than their financial future. Greater fools still abound. Prices have yet to commence the long slide. Is this not a perfect time to dodge a bullet?

You bet, and Jane just listed. She took my advice and now seriously hopes to outrun what she thinks is coming – a power of sale action on her street, as the laid-off city workers, who bought with 5% down last year, play the bankruptcy card. It will only take one POS to drop value from every other place in the hood.

Of course, she’ll make no money after commission, a mortgage penalty and moving costs. The street’s already back to 2008 prices.

But she’ll avoid a loss. One sharper than a missing Grand Am.

181 comments ↓

#1 Cowboy_aka_My_View on 10.07.10 at 10:13 pm

Another great piece, the end is near. Soon this blog will be renamed the greater renter.

Nothing wrong with owning real estate. But it’s not a financial strategy. — Garth

#2 T.O. Bubble Boy on 10.07.10 at 10:14 pm

Ironic that all of these people thought of their over-sized burb homes as the security that would ensure stability… now the over-leveraging of the average Canadian family will turn the “safety” of paying down a mortgage month after month seem like a giant money-waster.

An interesting change at TD… mortgages will be registered as “collateral charges”.

Customers will now be able to register their mortgage for up to 125% of the value at closing (and take out additional credit against that higher value).

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2010/10/td-mortgages-to-become-collateral-charges.html

Is this the new scam for circumventing 5% downpayment rules? An “instant” 25% HELOC?

#3 WINNIPEGER on 10.07.10 at 10:24 pm

Hope she is reading this:

The guy in the Grand-am has a legal obligation to support your son and you.

Given you have lost your employment go to the nearest legal aid office and apply for a lawyer to get grand-am guy to PAY!

Also 1/2 the house is his….so tread carefully….better to apply to the courts for a delay of sale and have the ex pay.

#4 crazy on 10.07.10 at 10:24 pm

It’s not crazy to think you are sexy, no matter who you are. But you still got to accept market prices, or you’ll never close a deal.

#5 nonplused on 10.07.10 at 10:29 pm

Any comments on mortgage title issues in the US? This is one problem I am pretty confident we don’t have here, but it’s looking like it could become a real $hit show down in the US.

Those big banks just can’t seem to do anything right.

I guess they sent that French trader to jail for 5 years and fined him $6.7 billion US (symbolic, he can’t pay it in a million years) for making unauthorized gambles that endangered the company. I agree with Bill Boner that it seems unfair, because plenty of bank CEO’s made unauthorized gambles that actually did sink the company, and they got $50,000,000 bonuses. What about the AIG guy? How come he didn’t go to jail?

#6 Devil's Advocate on 10.07.10 at 10:30 pm

I’m curious. If indeed “the age of the house is ending” as you so proclaim Garth, what then will we be living in? Maybe there will be a run on big shoes?

Out of crayons in Kelowna? The house is no longer an investment strategy. Just a house. — Garth

#7 Bill ( Peterborough) is a FRAUD on 10.07.10 at 10:30 pm

#109 dark sad person on 10.07.10 at 4:22 pm

LOL ROTF LMAO LOL ROTF LMAO LOL ROTF LMAO!!!!!!

You sounded like an angry little nerd boy computer geek hiding in mom’s basement mad about zits and obesity…being pissed at hunky wildcatters who get all the girls must be just as bad…afterall:

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

see the mirror – your anger and ego make you a manpig version of the same

oh and:

FAIL

JM–give that 2nd computer back to your partner whatever his/her name is-

just bitter cause you have none

FAIL

I get paid in the 6 figures/year–4 figures/day

Manpigs ALWAYS lie about 2 things – can you guess what the other is?

pathetic little man

You’re hardly the guy to call someone pathetic. Come back when you can shave. — Garth

#8 Patz on 10.07.10 at 10:30 pm

Brian Bonney of the Canadian Federation of Independent Business (BC) was interviewed today and he did his best impression of Garth Turner—it was eerie. The CFIB has just done a study of their members and the news is not good. Business is down and dropping precipitously. Members stated they are planning on laying off more workers in the next month or two and the lowest number Bonney’s seen in recent memory is planning on hiring.

Bonney sounded worried and he certainly didn’t sugar coat it. He stated unequivocally that after looking like a recovery it is now looking as bad as he’s ever seen it.

#9 Soylent Green is People on 10.07.10 at 10:34 pm

Run Jane Run.

See Jane go.

That’s a nice story, I mean the part about her getting out before the neighbours ruin everything with their POS. Nice work!

#10 Grandpa Grinch on 10.07.10 at 10:35 pm

Unfortunately, Jane’s story will become more the norm than the exception in the years to come. Why? Because the majority of people have come to believe what the MSM, banks, gov’t & other ignorant masses preach as gospel.

All of the ‘money bugs’ who mock the ‘gold bugs’ on this site are soon to find their money is worthless. In the past 2 weeks we have seen gold do a moonshot while Carney, under the direction of the House of Harper devalues the loonie along with every other major curency. Ooops? Didn’t know the gov’t feels it has greater obligation & loyalty to other countries than its own citizens?

Sell your house, hoard your dollars. I’ll keep my precious metals stocks thanks.

This blog is not about gold, and neither was this post. Stop pumping. Shove off. — Garth

#11 westendwanker on 10.07.10 at 10:37 pm

Kelowna just had a record $10 million dollar sale on a 29 acre lake front property. That past record was made in 2008 for around $7.8 million.

Lots of for-sale signs in the city too. Homes in the $500-900K range.

Either the super rich have more money than brains or they don’t care if the property is worth around $6.5 million in 2016.

The W.E.W

#12 Mean Gene on 10.07.10 at 10:40 pm

Hopefully Jane’s husbands name wasn’t Dick.

#13 Patz on 10.07.10 at 10:45 pm

Alexandre Pestov recently published a study comparing the 1985/89 bubble with the current one. This quote jumped out at me.

“Homeownership rates approached 70 percent, which significantly above the long-term average and the peak seen during the 1985-1989 bubble. The present home ownership rates are at par with those at the US bubble peak (Exhibit 2.4.1). ”

What this means is that most of the people who want to buy/can afford to buy (I’m using ‘afford’ very loosely) have already bought. A market requires a pool of potential buyers (duh!). And the mythical offshore buyers* can not possibly fill in for a local purchasers.

*In search of foreign/Chinese buyers. I went looking for some data on those bubble–proper–uppers house bulls are so fond of. Nothing, nada, zip. I challenge anyone to provide a study or anything besides anecdotal evidence of these buyers. And if they are in the market in any numbers wouldn’t they also be the most likely to go in search of greener fields at some point?

Milly Waters update: Marketing maven Bob REnnie says he will announce new incentives to kick start the sales in False Creek. Wonder if they include coffee, buskers and free parking? At least REnnie has stand–up comedy to fall back on when his condo huckstering career goes up the creek sans paddle.

Oops, maybe the people not buying MW don’t know there’s dragon boat races just outside every year. Yeah… they do.

#14 Devil's Advocate on 10.07.10 at 10:49 pm

Re today’s pic. Seems to me it’s generally guys look in the mirror and see something better looking’ back at them. Women are more critical of themselves. Got something to do with what attracts the opposite sex. That which most women find attractive isn’t generally reflected on the mirror. And the call us superficial?

Speaking of money… careful there #4 WINNIPEGER she might be in negative equity and want to catch up with ol’ Grand Am. Run buddy, run.

#15 Patz on 10.07.10 at 10:52 pm

Garth, you are such a provocateur! Er… what’s the significance of the teddy bear on the floor?

That’s me. — Garth

#16 45north on 10.07.10 at 10:53 pm

the future of suburban real estate is far bleaker than that of city properties.

Tony, he doesn’t mean Brampton! It will always have the Credit River and you can take that to the bank.

#17 Old_is_Gold on 10.07.10 at 10:53 pm

#3 T.O. Bubble Boy on 10.07.10 at 10:14 pm

An interesting change at TD… mortgages will be registered as “collateral charges”.

Customers will now be able to register their mortgage for up to 125% of the value at closing (and take out additional credit against that higher value).

_______________________________________________
Registering the mortgage for 125% and actually getting the extra 25% are not quite the same thing. The assumption is that the asset will appreciate by 25%, if it does, the borrower can simply call their bank and increase their loan without the services of a lawyer. But if the property goes south and loses 25%, good luck trying to get the bank to even refinance it for the original 100% let alone 125%. Although this is a ploy to keep the easy credit flowing even easier, decline in house prices will kaibash such deals even before they get off the ground.

Banks have been making obscene profits from mortgages and the more they can loan the better it is for them, so this is just another way of enticing the borrower to borrow more than they should but I don’t think this will make any difference to the state of the market in coming months and years.

#18 Timing is Everything on 10.07.10 at 10:55 pm

Jane didn’t make it…To the basement (suite) with her.
Bad timing.

#19 mel on 10.07.10 at 10:58 pm

Garth, make this Gal happy. It is getting a bit lonely to see only half naked Gals as your introduction to your new posts. How about a good looking Dude for us old fashioned Gals!

We need some temporary distractions before we get to the business of collapsing house prices….

#20 Devil's Advocate on 10.07.10 at 11:03 pm

Out of crayons in Kelowna? The house is no longer an investment strategy. Just a house. — Garth

Ohhhhhh so that’s what they thought?

So housing has some value but not as a retirement savings plan?

#21 Jsan on 10.07.10 at 11:10 pm

It’s amazing how only a few months ago most of the talk in the media, from politicians and from businesses was about the “recovery”. Now it seems most of the talk is about how things are once again slowing down, or in other words, they seem to be getting worse. When this happens after Trillions of dollars worth of world wide Stimulus and the lowest interest rates the world has seen in pretty much everyone’s lifetime……than you know things are not looking up. People misconstrue talk like this as being negative or fear mongering instead of taking it as a very strong hint to get their financial houses in order. Debt will absolutely kill people down the road.

There is still debate whether we are heading for Ugly Deflation or Inflation. Many are beginning to believe that it will be Deflation possibly followed by Hyper Inflation. Either way, house prices in Canada will get smashed. House prices only go up during Inflationary periods when the prices are already depressed or at least affordable. At the current prices, anyone can tell you that in a higher, possibly MUCH higher Inflation fueled interest rates period down the road, anyone who has bought in the last several years will get crushed, there is no arguing this point and with it so will the prices of homes as affordability that was based on Century low rates will crumble.

It is an absolute no brainer, there is almost no place for house prices in Canada to go but down whether deflation of Inflation comes a knocking.

#22 Thetruth on 10.07.10 at 11:15 pm

For all those jumping on on the bandwagon saying home ownership rates are at a record 70 percent…

Think a little people.

Well I say that we have a greater percentage of people over 35 than we ever had. Ever heard about the baby boom? And the fact that our fertility rate is low. Hope that explains the 70 percent .

#23 TheFirstRick on 10.07.10 at 11:21 pm

Looks like DA walked away from rehab again.

#24 Tryingtobepatient on 10.07.10 at 11:27 pm

Garth,
It seems from this posting that you are drawing a distinction between a real estate reality check in the city vs the suburbs. Am I oversimplifying? Although sales have slowed down and prices are somewhat more negotiable, waiting for a sensibly priced house in Toronto is still taking patience.

#25 Increasing that 1% on 10.07.10 at 11:44 pm

“…it’s generally guys look in the mirror and see something better looking back at them.” – DA

Omg, good point DA.
—————————————————————

“..a couple who both lost their jobs with the City of Toronto” – Garth

didn’t know any City workers have lost their jobs, (or been laid-off(?))– in what departments or roles?

#26 Devil's Advocate on 10.07.10 at 11:45 pm

My problem Garth is while I agree with you that it might be nice to crystalize those nontaxable capital gains which grew in our home since we bought it almost ten years ago and buy back in when prices fall you are undermining that very strategy by scaring our buyers away.

Besides we never expected such a rise in value in the first place so a return to something more in line with what our expectations were at the time is tolerable. And we have to live somewhere.

But all this “sell” advice to homeowners and “don’t buy” advice to their prospective buyers… well isn’t that in itself akin to hypocrisy you accuse CREA and it’s members of not to mention a mechanical impossibility?

#27 Chris in Langley on 10.07.10 at 11:50 pm

Devil’s Advocate,

How much does your mom charge you for rent?

#28 Taxpayer like everyone else on 10.07.10 at 11:54 pm

14 Patz

“And the mythical offshore buyers* can not possibly fill in
for a local purchasers.”

I think your definition is too narrow. IIRC it was blogger
kc who supplied a link showing the number of purchases
made by foreign residents – very low in the grand scheme.
But we shouldnt consider foreign residents, we should really examine foreign-born ie immigrants. Of major cities, Vancouver and Toronto have two of the highest
percentage of foreign born residents in the world – 40 and 45% respectively. These people are choosing these locations. They dont even have to buy RE, they just exert pressure on housing by their presence. Imagine either city with almost half their population gone.

#29 Chris in Langley on 10.08.10 at 12:00 am

Winnipeger,

Be careful, Devil’s Advocate is now giving you free advice. He did get a real estate degree you know!!! He’s also been reading Zig Ziglar and spouting lots of the “positive” things he’s heard.

#30 Devil's Advocate on 10.08.10 at 12:01 am

Ya, I ran outta brown…

CRAYON ART

#31 Tonguestump on 10.08.10 at 12:02 am

Let me see if I can figure out the significance of the photo, the large woman represents an imperialist expansion policy by former aggressive and greedy land barons examining what was, before the now newly acquired fruits of conquest have been fully revealed. Ya, that should get the complimentary Money Road.

#32 Duko on 10.08.10 at 12:11 am

Hey Garth,

What do you think about people living in a trailer park? They pay 500$ montly in fees and their cribs are mobile and paid off. I know people living in pimped out trailers bigger then the appartments with exceptionally high ceilings in Toronto. And the trailer park biz is so profitable that the owners don’t want to sell their parks to Reits and investors.

Cheers!

#33 Nostradamus Le Mad Vlad on 10.08.10 at 12:15 am


“. . . eating KD . . .” — Expect plenty of that in the immediate future, but it’s roughly the same as Bully Beef rations in WW2.

“But she’ll avoid a loss.” — Better to rent than have a millstone around one’s neck.
*
#153 dark sad person on 10.07.10 at 10:13 pm — “. . . dead consumers on this side of the Planet-have ate their lunch–imo–”

Agreed, and your sentence jives with one of Garth’s from this post:

“And the middle’s under assault.” — The link a few days ago stated that Harper & Co. had all but wiped out the middle class here, but sheeple yet still don’t realize it. Obama has certainly done his job by flushing the middle class down the toilet, with help from Soros.

This is exactly what the elite want — to force North and Central America into becoming a continent of serfs, spending their entire lives in debt and passing that debt on to their children.

They have tried turning us into what the people of France were before the French revolution. That ended well for the monarchy (elite), didn’t it?
*
3:48 clip UFO fleet over the Okanagan, BC. THAT’S US! Holy sheepshit, Wombatman!

Fun and Games “The U.S. banking industry is entering a new period of crisis where operating costs are rising dramatically due to foreclosures and defaults. We are less than ¼ of the way through the foreclosure process.”

Cdn. Pensions The only reason why most Cdn. pensions haven’t increased is because they are in CSBs, GICs or Money Market Funds, all of which the interest paid is largely taxed, therefore nothing to show for it.

RE Collapse Havoc in Dubai.

Inflation + QE. But stimulus doesn’t work, so let’s have more QE to prop up a dead horse.

Dying Dollar + Trade War. Nice chart with everything upside down.

Political Strategy calls for hyperinflation. 10:18 clip.

Strange Behavior in the markets. “In particular, someone is making some incredibly large bets that the S&P 500 is going to absolutely tank during the month of October.”

Benny’s off and running (away). “Trillions of dollars in debt, and perhaps in excess of one quadrillion dollars in leverage within the system.”

Here are two sides of the same coin.

54 sec. clip New Madrid fault down Michigan waking up? Plus Four Tornadoes in Arizona. Calling HAARP 2! Come in HAARP #2!

#34 Cameroni on 10.08.10 at 12:32 am

#52 dark sad person on 10.07.10 at 9:12 am

“Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote. ”
———————————————————-

I am a very stupid person Dark Sad. Are you saying we should arm ourselves during elections? Are you suggesting that we the people are just lambs being led to slaughter and lorded over by wolves? Could you explain what you mean by the comments you made?

Maybe you mean that well-armed lambs can be dangerous to the wolves. Is that what you mean Dark Sad (six figure) Person?

I am very curious. By the way, do you own a gun?

#35 Taking Stock on 10.08.10 at 12:32 am

What does MSM stand for?

#36 Charles Ponzi on 10.08.10 at 12:36 am

The Americans are sending Oprah to Australia. When are Canadians going to send us Garth Turner? If that is too expensive, at least send us a few Time Horton doughnuts!!! I knew I should have stayed in Canada.

Looks like Australians are sitting slightly further behind on the train yet once again. Must be all those docile sheep here who continue to think that house prices can only ever go up. I’ve married a lovely sheep and there is nothing I can say or show her on your blog that will change her opinion that buying bricks and mortar is better than paying dead rent. The frustrating part about being right, is that it is taking so bloody long for the bubble to burst. We continue renting, but it has put a strain on our relationship. I keep cheering her up with Tim Tams as we don’t have a Tim Horton in our neck of the woods.

No danger of me running off with the Grand AM because I only cycle–damn Australians insist on driving on the wrong side of the road. It’s all part of being different.

Have a white Christmas for me.

#37 Tom on 10.08.10 at 12:47 am

CIBC Says Home Prices overvalued, due for 17% correctino
http://www.vancouversun.com/business/Home+prices+fall+2011+reports/3607421/story.html

#38 Tom on 10.08.10 at 12:51 am

Developer aims to hit home run with latest Vancouver PRoject

http://www.vancouversun.com/business/real-estate/Developer+aims+home+with+latest+Vancouver+project/3635131/story.html

86 dipshits put money down on new condos near Olympic Village

#39 Tom on 10.08.10 at 12:52 am

Olympic Village Purchasers try to back out of deals

http://www.vancouversun.com/business/real-estate/Olympic+village+buyers+trying+back+purchases/3613103/story.html

Serves the greedy bastards right…

#40 bruce corell on 10.08.10 at 12:54 am

I think people better wake up and smell the coffee.
Prices have dropped much more than meets the eye.
Sales are brutal and agents are falling by the waste side.
the 430K average for Sept. has been fudged. These are high end homes that were over 500K that have dropped to 450K. The low end homes are not moving and the high end homes over 1MM will not move at all. The products on the market have decreased in value approx.10 to 15%
Ladies the bubble has burst….Its not tomorrow its today…

#41 Koz on 10.08.10 at 12:57 am

“Most Canadians are more focused on the next stat holiday than their financial future.” – Garth

Great comment Garth. A Gen ‘X’er who see’s this as a problem instead of a solution. Adopting a 20hr work week for 100K is not going to get us out of this economic bind us Canadians are in.

#42 West Coast on 10.08.10 at 1:05 am

Wrong again Garth. I refer you to Vancouver’s Olympic Village Developers:
“Olympic Village developers say units will sell”

http://www.cbc.ca/canada/british-columbia/story/2010/10/07/bc-olympic-village-millennium-sales.html

There. Crisis averted. I hope everyone feels better.

#43 dark sad person on 10.08.10 at 1:07 am

Jane is 57 and has trouble putting together a sentence without referring to “my separated husband.” She hates him. Not hard to understand. One day they fought about money. He got in the Grand Am and drove off. She never saw that car again. Or him.

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

“my separated husband.” She hates him.

Maybe you should have checked the deep freeze G-
Gotta watch for those special code words ya know-

http://www.youtube.com/watch?v=mJhWQp6Najs

#44 realpaul on 10.08.10 at 1:11 am

Rising house prices are just a fraud if you guage the ‘value’ against what it is you need during the rest of your existence….we are seeing classic inflation. To the economist, inflation is not rising prices any more than wet sidewalks are rainstorms. Inflation is an increase in the supply of money. It should really be called dilution because it dilutes the value of existing dollars.

In fact, a more proper term would be “monetary inflation.” Monetary inflation is currently raging as the Federal Reserve is printing more and more money, and gold and silver are responding.

Price inflation is another matter indeed. Price inflation is the end result and trails monetary inflation. Monetary inflation is now rampant. Gold and silver, being smarter than you and me, are reflecting that by the increase in price and the big rallies we are seeing now. So inflation is here.

But what about price inflation? Price inflation has also already started. Look at the increase in commodity prices. How much longer do you think it will be before these higher wholesale costs filter down to the retail level?

For example, Agricultural Raw Materials are up 24%, The Mineral Index is up 25%, The Metals Price Index is up 26%, Coffee is up 45%, Barley is up 32%, Oranges are up 35%, Beef is up 23%, Pork is up 68%, Salmon is up 30%, Sugar is up 24%, Wool is up 30%, Cotton is up 40%, Palm oil is up 26%, Hides is up 25%, Rubber is up 62%, Iron Ore up 103%. Those are prices at the wholesale level.

As the price increases continue up the chain of production, is there any chance they will not cause price inflation? Do you think there is any chance at all that producers and retailers will not pass these costs onto consumers?

Let’s face facts. These cost increases will filter all the way through the system. Soon your paycheck will not stretch nearly as far. Monetary inflation is here. Price inflation is coming. Commodity price inflation is also here.

It’s too bad there wasn’t an independant media in Canada…more people would understand the scam thats been perpetrated on them. So what if you’re house is ‘worth’ a million dollars…if it takes ten thousand ‘dollars’ to buy a hamburger, you’re not really a ‘millionaire’ are you? Welcome to Can-Babwe.

#45 PPP on 10.08.10 at 1:17 am

Garth, Thanks again mate. I have been checking your site daily now for a few months. Just love it. I blew the lot in 2008 (derivatives). You call it house porn – I had a granite-clad $lut. All gone. Nada. Fortunately, had my education and a good wife of 20 years with hers and we carried on. Hey, people suffer worse, you have to put it in perspective. Now I look forward to getting a place as a home again some day. Some chickens, veg and a garden. No porn.
Really, for me the best part of your site is the lifestyle comments. Is all this “stuff” worth it? No! You should take up “Lifestyle Coaching”, m8. Thanks again.

#46 Debtfree on 10.08.10 at 1:22 am

@ # 7 DA ……. in your face LOL
http://hockey-madness.blogspot.com/2007/10/shoe-house.html

#47 Derek on 10.08.10 at 2:44 am

Use Steve Keen’s work on bank credit and it’s fairly easy to explain what’s going on and what the near future holds (providing the government doesn’t step in and change the rules).

Prices are currently just about holding because unemployment hasn’t taken off in Canada. However this won’t last for ever or even for very long. Keen’s work shows a close link between new loans being made and jobs. Since housing isn’t selling very well at the moment compared to last year, that means that the number of new loans is way down. In fact the number of loans even for non-realty purposes is down. This will lead to less money being injected into the economy by private spending and hence fewer jobs, increased unemployment. As a result of increased unemployment more people will have to put their houses on the market and/or be foreclosed. Hence inventory for sale will surge and, because those new sales are forced sales, prices will drop. However dropping prices will make buyers even more reluctant to spend and hence new loans will drop even further, causing further unemployment. It will also cause problems for the banks leading to the CMHC having to pay out which means either a bigger government deficit or higher taxes for all of us.

That’s what would have happened in 2008 if the government hadn’t stepped in. Of course it did step in and it almost certainly will again. If it’s sensible it will follow the same type of strategy it did then and provide something like the home-improvement tax giveaway or a further reduction in Federal GST to 4% or below as a stimulus. It needs to do something like this to break the unemployment which will drive down house-prices. Whether it will is anybody’s guess.

Canada has one advantage over the US in this situation and that is a more controllable Federal government. Despite having a minority government, Harper has a fairly tight control over Parliament compared to Obama’s control over the USA’s highly distributed government. Let’s hope that he uses that control to deal with the coming problems effectively.

#48 Cameroni on 10.08.10 at 3:34 am

#103 dark sad person on 10.07.10 said:

Try me on (a) subject “little man” and I’ll make a complete fool of you–
———————————————————

OK. I’ll take your challenge you little weasel. You posted your remarks to JM I think but it makes no difference to whom. Since you are so smart,…what is your debate?

The thing is “Dark Sad Pathetic Person” that you will only make a fool of yourself. And even if you win you lose. Because nobody really cares what extremist, thug bigshots like you think.

Do you get that?

Like I said before, you are an Idiot.

Now buzz-off.

#49 kitchener1 on 10.08.10 at 3:36 am

This story will replay millions of times all across Canada.

Like Jane’s neighbiours, who purchased with 5% down, so many people are only a few pay cheques away from financial ruin its downright scary.

As for Gold, its broke thru resistance very fast and hard, this price support levels will not last but the next run up will be to $1600 level. Not sure what to make of it? Its running up much faster then other asset classes or equity markets, if it maintains these levels, something ugly this way comes in 4-6 weeks.

#50 Dark Sad Biscuit Eater on 10.08.10 at 4:00 am

Hi. My name is Dark Sad Person.

Most people here hate me because I am such a hostile, angry, difficult, worthless and illogical piece of crap. I agree!!!

I copy and paste other peoples ideas. Then I pass them off as my own. My girlfriend is very proud. So is Garth Turner who hosts this blog.

He thinks extremism and anger against government is OK. I know this because he never, never, ever censors any of my comments. What I say is A-OK. Hooray!!!

He is one of us.

#51 Dark Sad Biscuit Eater on 10.08.10 at 4:14 am

Oops, did I forget to say you were a goof DSP? Sorry I meant to say GOOF. Did I say goof yet?

Ya. You are a goof.

#52 Brian1 on 10.08.10 at 4:35 am

Randman; Sorry. I had a bit too much to drink. I’ll watch it next time.

#53 Brian1 on 10.08.10 at 5:04 am

I just saw Stock and Awe on BNN. I think you’ll like Hillary Doyle. She is funny. I’m not sure about all of the advice.Might be an article for you there Garth. Coffee shops and restaurants are in peril. The economy is so screwed.

#54 jed on 10.08.10 at 5:12 am

guess what happens when the local paper cottons onto some of your research that there’s no such thing as a shortage of houses in your state…

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

they claim it as their own, the local spruikers then get confused, dispute it, kick the fear into overdrive and suggest a ‘severe housing shortage’ is coming….

do they sell BS in a can these days?

#55 eddy on 10.08.10 at 6:12 am

the ugly truth, foreclosures etc

http://market-ticker.org/akcs-www?post=168528

#56 somecatchphrase on 10.08.10 at 6:43 am

Word of the day: biflation (rather than deflation or inflation)

“ biflation is an economic environment in which inflation of commodity-based assets occurs simultaneously with deflation in debt-based assets. I’ve heard a lot of people describe it as inflation in the things we need and deflation in the things we want, or inflation in services with deflation in durables.”

http://balancejunkie.com/2010/09/20/are-you-ready-for-biflation/
____________________________________

Not sure if anyone has posted this here, but this is one of the best articles I’ve come across in recent weeks.

To say that “we’ll have deflation,” or that, “we’ll have inflation” seems like a gross oversimplification.

The concept of biflation more accurately captures what’s actually happening in the real world. Deflation in those items that are typically debt-financed, such as home and autos. Inflation in those items that are essential day-to-day needs, and, normally paid for in cash, such as food, electricity, auto repairs, and government services.

Biflation will likely become an oft-repeated new catchphrase as the next decade unfolds.

#57 Moneta on 10.08.10 at 7:01 am

When times are good, couples shack and party like there’s no tomorrow. Of course this leads to harder times because many couples have no discipline.

And when times are tough, couples split up looking for that greener pasture.

In 2000, we were told cycles were dead. If my memory serves me right, even Greenspan agreed with this nonsense. However, over the last decade, we’ve never had so many people do the exact same thing ALL AT ONCE.

Au contraire, the cycle has never been this strong.

I’m amazed that people are still arguing against a real estate purge.

#58 pbrasseur on 10.08.10 at 7:07 am

If the Age of the House is ending, as I have argued, the Era of the Burb goes with it. – Garth

How can that be as large cities are near bankrupt and decaying?

Here in Montreal the middle class has been fleeing the city, it’s high taxes, security problems and filthiness for years. How is that going to change?

#59 S.B. on 10.08.10 at 7:18 am

This hotel room for sale in Squamish was offered at around 165k earlier this year, then ~139k I think, and now 130k. A liquidity crisis of sorts.

http://www.realtor.ca/propertyDetails.aspx?propertyId=7993474

Are my eyes deceiving me? 589,000 for a 585sq foot apartment err I mean condo in False Creek?
$1000 per quare foot?? What are they smoking in B.C…

http://www.realtor.ca/propertyDetails.aspx?propertyId=9872267&PidKey=1021421708

#60 Grrr on 10.08.10 at 7:29 am

“One big reason has been a collapse in home equity, which drains off family wealth…”

The wealth was drained off when the mortgage papers were signed. The exit strategy vanishes when prices collapse.

#61 Willy H on 10.08.10 at 7:56 am

Wonderful post!

This certainly makes a lot of sense in a world that is about to get a very up close and personal look at what economic scarcity looks like. The suburbs are bloated with leveraged consumption bunnies whose numbers have far exceeded the carrying capacity of the 1950’s garden pattern.

These are very interesting times indeed.

#62 DaBull on 10.08.10 at 8:25 am

#18 Old_is_Gold

#3 T.O. Bubble Boy on 10.07.10 at 10:14 pm

An interesting change at TD… mortgages will be registered as “collateral charges”.

Customers will now be able to register their mortgage for up to 125% of the value at closing (and take out additional credit against that higher value).

This is for people who know how to handle credit properly. People who borrow to invest, not borrow to consume. ie. borrow to buy higher paying investment instruments/assets (making money on interest differentials, like the banks do), not borrow to buy a shiny new BMW (losing money on depreciating asset). You need either an excellent credit history/score or have other assets to get these products. Hell even Garth is telling financial simpletons to use a variation of this strategy. The only difference is Garth is telling them to use a much lower percentage (50% to 75% of equity, not 125%).

#63 Kevin on 10.08.10 at 8:32 am

#35 Cameroni

“Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote. ” — This is a quote from Benjamin Franklin. It was meant to explain the reason that the US was choosing a republic as their form of government instead of a direct democracy.

#36 Taking Stock
MSM is Main Stream Media

#64 Jayman on 10.08.10 at 8:42 am

#34 Nostradamus Le Mad Vlad

Cdn. Pensions The only reason why most Cdn. pensions haven’t increased is because they are in CSBs, GICs or Money Market Funds, all of which the interest paid is largely taxed, therefore nothing to show for it.

Allow me to correct your understanding of the article and pension plans. In fact, most pension plans follow a balanced portfolio approach with a 60/40 split give or take not including infrastructure etc. Second of all, pension plans don’t pay taxes on growth and income. The members of the plan pay the taxes only when the pensions are in pay.

The reason for the article is that bond yields have fallen and when interest rates (bond yields) fall by 1% the liabilities for a pension plan increase by 15% to 20%. Thus in Q3 2010 while the markets performed well and most pension funds would have participated in that growth due to their very long term investment horizon, the falling bond yields increased the liabilities at a greater rate than the returns earned. This limited the overall gains. You must look at both sides of the balance sheet, assets and liabilities.

#65 Keith in Calgary on 10.08.10 at 8:48 am

I’d like to commission GALLUP, or IPSOS REID, etc, to conduct a poll of those people who purchased RE in the last 36 months with 5% down thru CMHC or Genworth, et al.

The poll will consist of the 20 or so usual closing statements that REALTORS (TM) use when trying to get a client to sign on the bottom line, you know, “RE only goes up in value”…….”you better buy now or you’ll be priced out forever”……”go ahead and buy it and if you don’t like it you can just sell it and pocket the profit”…………..etc…….

Each person must check off any and all of statements that were used by the REALTOR (TM) in their particular case. You could have a sample size in the tens of thousands.

In situations such as that of the person in the story on this thread, they will always lash out and say “we didn’t put the pen in their hand”……..etc……but when they CREA slogan is “REALTORS (TM) “know” Real Estate”………..everything they say has to be put under the microscope.

I see an enormous class action lawsuit against the cartel waiting to happen……..on the scale of the anti-smoking lobby……..a truly “brokerage busting” event. The wheels of justice grind very slowly……but they also grind very fine.

#66 Brass Balls on 10.08.10 at 8:55 am

#27 DA

‘But all this “sell” advice to homeowners and “don’t buy” advice to their prospective buyers… well isn’t that in itself akin to hypocrisy you accuse CREA and it’s members of not to mention a mechanical impossibility?’

Eloquent. Pointing out double standards won’t win you any friends on here, but it ‘s a relevant question.

#67 andrewS on 10.08.10 at 8:58 am

I am reminded of one of my friends from high school,

About 3 years ago he had the perfect life : a new house, 2 cars, a good job (in construction) and an attractive wife (who was an office temp, I think) Made me, single and a renter, feel somewhat inadequate you know?

He made every mistake in the book. Of course, that was about the first peak of the cycle.

Then in 2008 the construction jobs dried up. He ended up living hand to mouth.

Now they’ve realized the folly of getting married at 19. In your late 20s that seems like a pretty bad idea in retrospect. The fact that neither of them work steadily puts a lot of financial strain on things too. They lost one of the cars, and the other will go any day now. Being unskilled construction labour, he’s pretty much unemployable without a way to get to the site. Assuming much construction happens in the next half decade or so anyways, which seems unlikely.

In short, their marriage is trash. They hate each other. But neither of them has the money to move out. They’re stuck cohabitating. Neither of them wants to couch surf and abandon the asset that will probably bankrupt them and ruin the rest of their lives.

Oh, and prices never quite made it back up where they live. They’re 45k underwater on the house. They are completely stuck. Ruined by house porn.

This story will play itself out again and again in the next few years.

#68 Got A Watch on 10.08.10 at 9:07 am

One easy solution is to move farther out, to the far rural areas, where the local election debate is all about lowering property taxes and cutting Government cost.

Out here, we get zero services, other than snow-plowing in the winter and grading of the gravel roads 2 or 3 times in Summer. That’s it. My “local township” is about the size of half of Toronto, and has about 13,000 residents total, with only 3 “subdivisions” (with 1 acre+ lots) that a city dweller would recognize.

Some friends were contemplating moving farther north to near North Bay – the local township there told them they could build any old building they want on their land, the township does not care nor do they ever inspect nor re-assess taxes. Taxes on a 72 acre lot were about $800/year, with a new house and a barn and a workshop already on the land.

No bureaucrats in your face, because there are none. No one telling you how many cars you can park in your driveway. Etc. Peace, quiet and no evidence of Government.

Or you can choose to be a pod-dweller, living in a concrete box, breathing the polluted air, stepping over the homeless every day, while paying vast amounts of taxes to support the equally vast bureaucracy that tries to tell you how to live every aspect of your life.

Life is a series of choices. Make a decision.

Look on a map. Urban areas are just a speck in the vastness that is Canada.

#69 Devil's Advocate on 10.08.10 at 9:16 am

“If the Age of the House is ending, as I have argued, the Era of the Burb goes with it.” – Garth

I get what you are driving at about the days of a “home” as an “investment” ending but this rationalization that will spell the end of the “Burbs” doesn’t make sense in that context. Now if you want to talk about “peak oil” THAT might spell the demise of the “Burbs” as we know them.

For a good many Garth, a “home” was never considered an investment vehicle. Maybe at best they thought they would have it paid off by retirement thereby reducing housing component of their living expense when retired and on a fixed or reduced income. For some of them who bought “revenue property” or were considering… when the cost got so high they stopped as did we because the income does not justify the cost. That will change in time – we both know that.

I think what you are referring to is that “you don’t buy it for the income, you buy it for the equity gain” mentality which prevailed for a few years between 2004 and 2008. Those days, yes, are gone and good riddance. But housing, bought within reason is, I am sure you will agree, not a bad thing. Just as a revenue property bought which “caps out” is not a bad thing. Both are good things actually.

Your exaggeration is bordering on malicious. It’s no wonder so many of the Blog DAWGs vision is so blinded.

Look I know you have a message, and I agree that your message is a good one, but the extreme to which you take it is doing more harm than good. You are that which you accuse CREA and its membership of – just the opposite. Quite frankly I think you might be more so.

#70 JM in London on 10.08.10 at 9:24 am

Several weeks back now (memory – wow, turns out I have one too…SIGH) I took up an argument with you about REIT’s. It was a simple statement (still true by the way) saying that no matter what the outlook for the class, there are still gems in the dirt. I called you a pothead to get the rise – as you can see by the comments here I’m not the only one tired of your BS (if you’re sitting there bored, go attack another blog) masquerading as intellect.

You let loose with the Pavlovian response most here expect by using an attack/fact smoke screen – most of your facts aren’t even your own, just lifted/paraphrased/regurgitated blogs & articles from everyone from Mogambo to Kitco to Greg McCoach to Gold-Eagle…the list is as lon g or longer than the RE pumper tripe.

I’ve sat patiently waiting for you to answer the attacks on character you made. YOU were the one who made what you do (true or not) matter. All your attacks on everyone and you work in oil?

Oh that’s rich.

Really matters not if it’s true, the tell is really in the following lines attempting to claim salary. Like it or not one of the things about what I do is that I find out the truth about two things; 1) peoples credit & 2) what people REALLY make. The bluster is there in your claim, what do you think the percentage of “error” is on the claimed income line of any mortgage application? What I’m saying here is the BS detector rang when reading your response. I do a big part of my business without seeing the client these days but even without that you’d be surprised at how tuned it is to that one area.

Couple all this with another true tell in the following you just wrote:

“The Icelanders stood up to the rich elite of the World-
We rolled over–“

In using this and other nasty tactics and attacking all that don’t agree with you, you give the rest of us the tip that you’re just another angry person mad at the world it wasn’t better for you…

Simple enough for you?

#71 Peter on 10.08.10 at 9:31 am

“both lost their jobs at the City of Toronto”…..we are in trouble, the goverment firing people?

#72 dark sad person on 10.08.10 at 9:36 am

#35 Cameroni on 10.08.10 at 12:32 am

I am a very stupid person Dark Sad. Are you saying we should arm ourselves during elections? Are you suggesting that we the people are just lambs being led to slaughter and lorded over by wolves? Could you explain what you mean by the comments you made?

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

I thought you were going to just scroll by my posts?
What happened to the big announcement that you were leaving?

Doesn’t matter to me one way or the other-but-
I see you’re taking the “quotes” I pasted of Benjamin Franklin-who passed away in 1790 and you’re trying to build another Strawman-by twisting words-

Go ahead Cameroni-build another one and I’ll do what I did the last time you tried-
I’ll simply blow it away–

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

Could you explain what you mean by the comments you made?

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

Sure I can explain what it means-

http://www.youtube.com/watch?v=UduuOHdOw5M&feature=related

Very frightening huh–notice the wives-husbands and kids–

Grow a set–

#73 C on 10.08.10 at 9:41 am

Just took a look at a Realtor’s web site: http://www.luketao.com. He updates GTA real estate stats monthly.

The September 2009 Avg. Price was $406,877.
October 2009 jumps up to $423,589.
Then November falls to $418,460 and December $411,931.

So October 2010 is going against a tougher comparison compared to what it had to battle against for the September 2009 comparison.

If the October 2010 number is really weak, the yr/yr comparison could be quite drastic.

#74 JM in London on 10.08.10 at 9:42 am

#52 Brian1 on 10.08.10 at 5:04 am

That is one odd little gambit from BNN eh? I’m guessing they’re trying to find something to fill the gaps left by Kevin and Amanda?

#75 joseph on 10.08.10 at 9:42 am

andrewS…

Glad to see Garth’s readers are still taking pleasure from the suffering of others.

You poor pathetic soul.

#76 SM on 10.08.10 at 9:59 am

I love your blog and am always amused by your witty choice of photos. But where are all the images of the chubby, aging men fooling themselves into thinking they present a more desirable package?

Let’s be clear, it is all fun – let’s just strive for some balance.

#77 JB on 10.08.10 at 10:00 am

An excellent article!

Very interesting to read about the truth. My wife and I have always wondered about how people on my street can afford so much.

#78 Brass Balls on 10.08.10 at 10:05 am

People…

You’ve drunk your own koolaid and are way down the road to rationality ruin. “When one group, skilled in oratory and with guile in their hearts, preys on the (not necessarily innocent) gullible, the inevitable outcome is some form of social disorder.” Isn’t this exactly what you are all doing? Under the guise of commenting on the future and reporting bad news you are trying to panic people.

I hate realtor spin and want to live in a spin free world. You hate realtor spin and want to replace it with your own.

The quote is from “the Wealth and Poverty of Nations.”

#79 Pete on 10.08.10 at 10:19 am

bruce corell on 10.08.10 at 12:54 am I think people better wake up and smell the coffee.
Prices have dropped much more than meets the eye.
Sales are brutal and agents are falling by the waste side.
the 430K average for Sept. has been fudged. These are high end homes that were over 500K that have dropped to 450K. The low end homes are not moving and the high end homes over 1MM will not move at all. The products on the market have decreased in value approx.10 to 15%
Ladies the bubble has burst….Its not tomorrow its today
———————————————————-

This is exactly what I have been saying is happening in the market in the GTA. The garbage homes/low end homes are sitting on the market while the upper end homes are selling just above the lower end prices. Realtor fail to explain that. think about it when 25-30% less homes sell for five months in a row you get price drops and big ones at that. It’s the laws of supply and demand and it doesn’t matter where in the world you are. BEWARE we have realtors on here spreading their propaganda thatwe have bidding wars(which is a lie) and home prices are just down a little (which is a another lie) . Realtors are hurting real bad as the housing market continues it sharp drop. Also people NEED to sell real bad or else they will go BANKRUPT. Think of this lady in Garth post and think of thousands of others that will go bankrupt if they can not sell.

#80 WINNIPEGER on 10.08.10 at 10:20 am

Article from Calgary=

House coming up for renewal and its value dropped by 60k since they purchased it 3 years ago. Bank would only re-mortgage its present day value (as it should)…..home owners lost the house…….

How many zero down 40 year amorts and 5/35’s are like this! Interest rates dont play into any of this scenario other than it made these people buy way over what they could afford.

Mortgage renewal comes up and the bank says—-hmm your house value has dropped –cough up the difference or no mortgage…..you cant just walk away— in Canada your on the hook for it…..

If the bank does like you (credit worthy) …well lets just roll the depreciated value into your mortage….ouch!

#81 junius on 10.08.10 at 10:24 am

#79 Brass Balls,

“guile in their hearts” and “preys on the gullible.”

This is the very definition of the pot calling the kettle black. Unbelievable. You are right out of Orwell’s “1984”.

The deception has come from our political elites, the Mainstream Media and the orators of industry. They control the pulpit and have the means to manipulate. The result is that they have wreacked havoc on our economy and our society through misguided policies that sold out our long term interests for short term gains.

The first things we need to do as a society is properly grasp what just happened. Inflated Real Estate prices are just a symptom of the underlying problem. They were not the cause. However their deflation will be a cause of widespread pain for all of us.

The second thing we need to do is get realistic about the way to out of this mess. Very few on this blog are trying to panic people or create civil discord. However we also realize that you can’t fix the problems created by following the same policies that got us into this. Specifically, you can’t solve a bubble by trying to pump more air into it.

You said, “You hate realtor spin and want to replace it with your own.”

No. We hate all spin. We are trying to replace it with a realistic view of the world so we can go about solving the long term problems the past decades has created.

#82 Devil's Advocate on 10.08.10 at 10:24 am

I hate realtor spin and want to live in a spin free world. You hate realtor spin and want to replace it with your own. – #79 Brass Balls

Well put BB.

#83 junius on 10.08.10 at 10:27 am

#73 C,

The market was just bouncing back in 2009 from the drops of 2008. As prices continue to melt this fall the year over year comparisons will get worse. As the gap widens the trend will become increasingly apart to the general populations. Which will accelerate the decline.

#84 JM in London on 10.08.10 at 10:28 am

#62 DaBull on 10.08.10 at 8:25 am

Two words: Customer Retention

When Scotia implemented the policy, the retention numbers shot up substantially – Paying legal fees was the leading factor – Have a friend working inside the red bank who was part of the whole bunch who implemented it…

#85 Peter on 10.08.10 at 10:32 am

The end is in sight, the bottom may be seen – in the US. But in Canada it’s different.
“This blog may as well change and deal more with personal finance matters: retirement, savings, financial planning etc.
The story – about proving that there is a housing bubble in Canada, and why it happened, and that it is now popping or fizzling – is near it’s end. Time to move to new topics.” very well said Obert!

#86 Chris no longer in England on 10.08.10 at 10:38 am

So where can I get one of those mirrors?

#87 Patz on 10.08.10 at 10:40 am

#82 Junius in answer to #79 Brass Balls

“The deception has come from our political elites, the Mainstream Media and the orators of industry. They control the pulpit and have the means to manipulate. The result is that they have wreacked havoc on our economy and our society through misguided policies that sold out our long term interests for short term gains.”

Great answer Junius. And BB if you want to live in a “spin free world” I suggest a very remote Arctic island. And DA, you again!?

#88 Antonio on 10.08.10 at 10:43 am

Just got this note from my real estate agent in Toronto (Beaches). A house listed at $589 just went for $611. I asked her if this was the norm and this is her response. Woe be me are we the greater fools?

“the market has heated up again. I hear of quite a few multiple offers and an agent friend has just lost out on three offers I the last week because of them going over asking. If the house is good and has been well maintained – basements completely finished etc., and of course that wonderful word LOCATION they stand a chance of getting more that the Asking Price.”

Anyone else seeing the market heating up again?

#89 dark sad person on 10.08.10 at 10:48 am

#82 junius on 10.08.10 at 10:24 am

The deception has come from our political elites, the Mainstream Media and the orators of industry. They control the pulpit and have the means to manipulate. The result is that they have wreacked havoc on our economy and our society through misguided policies that sold out our long term interests for short term gains.

The first things we need to do as a society is properly grasp what just happened. Inflated Real Estate prices are just a symptom of the underlying problem. They were not the cause. However their deflation will be a cause of widespread pain for all of us.

The second thing we need to do is get realistic about the way to out of this mess. Very few on this blog are trying to panic people or create civil discord. However we also realize that you can’t fix the problems created by following the same policies that got us into this. Specifically, you can’t solve a bubble by trying to pump more air into it.

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

Good post junius-

#90 WINNIPEGER on 10.08.10 at 10:58 am

http://www.metronews.ca/edmonton/comment/article/657201–with-low-interest-and-high-spending-we-court-disaster

this article is nothing new—but hits the point dead on!

#91 BingoBabe on 10.08.10 at 11:00 am

Why do you people come to this blog to dispute the opinions presented by Garth? Garth is a lone man in a gargantuan sea of banks, real estate associations, and governments who all gain by spinning their stories. Does Garth have so much to gain by this tiny little blog that you should compare him to these institutions? People trust these folks to be honest and fair and do what is right for them, but how can they when they all benefit from one-way thinking (spend, spend, spend)?

Comparing Garth with these mega operations with all of their marketing power and constant media exposure (and what they do with it) is unfair. He has an opinion and just because it goes against the views of MSM and the majority does not mean he should moderate or censor himself. If the opinions that he expresses are what he truly believes will happen (good or bad) then he has every right to express them.

If you don’t like the message here then return to MSM and drink it up!

#92 OttawaDaddy on 10.08.10 at 11:09 am

I have read Fair Pensions for All blog (EXCELLENT!!) and was aware of US cities laying off big time..

but this is the 1st municipal layoffs in Canada (2 layed off in Toronto????!!!). I am quite surprised given left-leaning councils in Toronto, Ottawa, etc

any more info on this area??

#93 T.O. Bubble Boy on 10.08.10 at 11:16 am

Toronto realtors trying to explain the strange sales trends for 2009-2010:

http://www.movesmartly.com/2010/10/toronto-real-estate-market-statistics-september-2010-.html#more

The “theory” that CMHC changes announced in February 2010 and implemented in April 2010 somehow triggered sales in the second half of 2009 is not believeable for me. The “HST fear” reason is also easily debunked.

The only 2 factors that I would have at least accepted as “theories” would have been:

1) the fear of rising interest rates… you could argue that the media hype over economic recovery and pending rate increases would have driven a few potential buyers to make a purchase before rates changed.

2) the leftover demand from a brutal second half of 2008 and first half of 2009 — that period was extremely low for sales compared with historical numbers, so you could argue that at least a few buyers that waited out the 2008 financial crisis then bought in late 2009/early 2010.

#94 MP on 10.08.10 at 11:17 am

Hi Garth-

I am a fairly new reader of your blog and happened upon it while searching for some real estate advice. I live in Yellowknife, where housing prices are artificially high due to diamond mine and government salaries and a seriously limited supply. My partner and I looked into buying our first house- a tiny, 2-bedroom place on a wood block foundation- perfect for our simple lifestyle; that is until we saw the 409k price tag. No thanks.

So, now I am 32, cheap renting with roommates and have 50k in the bank sitting in mutual funds, GIC’s and savings accounts that won’t be needed for a house downpayment. I am keen to get some help on where and when to invest wisely as I am saving about 2-3k a month and not sure where to put it. I have gleaned some info from your articles (sector ETF’s, diversify wisely in bonds and preferred shares, etc) and a fee based advisor sounds like the best route. I stopped by a financial planner in town that lives close to me, only to find he is semi-retired and not taking new clients. He couldn’t direct me to anyone else in town, besides bank branches. I’d rather “step outside the bank branch” as you put it.

I am cautious to not start a relationship with an advisor I can’t meet face to face and my own knowledge is very limited on where to start investing. Any tips? Thanks for the info you have been providing.

Mike

#95 Dan in Victoria on 10.08.10 at 11:18 am

Andrew S @67
The big boss ( Wife ) works at a medium sized construction company. She is the “HR” person.
You would NOT believe how many of the employees are on the edge.
If they don’t have their cheques by 9 am on Friday she says the phone starts ringing, sheer panic.
They had some layoffs a few weeks ago she thought some of the guys were going to get physically sick.
Its starting to get to her, all the young guys who she says are “good guys”.
They have been sucked in. Easy credit, with no life experience.

#96 CTO on 10.08.10 at 11:20 am

#70 JM in London
and any other dogs

I really appreciated your short comments/reports about anecdotal evidence of:

-a collapse in Re-sales
-over indebtedness examples
-Private government reports or memos, etc

You people that are in the mortgage / realestate and or other related industries could really help paint a relatively accurate picture of the present circumstances and outcome from real-time events if you just stop fighting and start reporting…

#97 Ben Rabidoux on 10.08.10 at 11:23 am

@ #23 The Truth

“For all those jumping on on the bandwagon saying home ownership rates are at a record 70 percent…Think a little people.
Well I say that we have a greater percentage of people over 35 than we ever had. Ever heard about the baby boom? And the fact that our fertility rate is low. Hope that explains the 70 percent .”

Cute argument, except it’s bogus. Homeownership rates have risen across all demographics.

http://www.statcan.gc.ca/pub/11f0019m/11f0019m2010325-eng.pdf

Check out graph on pg. 13. Someone needs to do some more thinking….it’s not us.

Nice try, Spanky!

http://financialinsights.wordpress.com/

#98 CTO on 10.08.10 at 11:25 am

#68 Got A Watch

Great comment!!! Here! Here!
I wish I could convince my wife……

#99 Ret on 10.08.10 at 11:25 am

#36 What does MSM stand for?

I have never bought into the MSM (Main Stream Media) ideals.

The MSM are, IMHO, far left of center but insist on identifying themselves as “main stream,” when really they are socialists and self appointed social engineers.

In Hamilton, the Spectator runs almost daily stories on poor advocates, food banks etc. I drove by the foodbank this morning at Mary & Canon and saw 20 people lined up sucking on cigarettes. I wonder why they have no money to buy groceries for their families?

Now that would be the real story along with a picture of so many of them puffing away. Neither, I can guarantee that you, will never be published in the MSM.

And yes, I’ll probably burn in Hell for driving a car. (Garth- Hummer drivers get a special HOV lane straight to the fiery pit.)
The MSM has declared that we should all be riding bicycles in bike lanes just like in Europe. The MSM has convinced most of Saskatoon that they have to ride bicycles just like people in Holland. Does Saskatoon look like Holland?

If you can’t figure out what to say, think, feel or do, the MSM is for you!

http://communities.canada.com/saskatoonstarphoenix/blogs/cityhall/archive/2009/10/10/the-stupidest-bike-lane-in-saskatoon.aspx.

#100 BrianT on 10.08.10 at 11:28 am

IMO every moron blabbing about goldbugs, doomers, etc. should read this zerohedge article and attempt to comprehend the implications http://www.zerohedge.com/article/three-horrifying-facts-about-us-debt-%E2%80%9Csituation%E2%80%9D

#101 Bill ( Peterborough) is a FRAUD on 10.08.10 at 11:43 am

Garth – over the top?

I’m sorry I’ve gotten dirty with all the nasty men.

I am a girl – promise :)

#102 arthur on 10.08.10 at 11:45 am

People say that the bank will just renew 0/40 and 5/35 mortgages when prices fall as there is no reason the ruffle feathers if payments are being made. The problem is CMHC won’t insure a mortgage worth more then the house. The bank doesn’t want to take the liability so the home purchaser is stuck. If the bank renews a mortgage without doing due diligence on the value of the home CMHC won’t pay out the bank’s insurance claim when the owner defaults.

#103 AxeHead on 10.08.10 at 11:48 am

Red Deer Alberta…

I bought a condo in 2004 – paid 100kk (all borrowed)

I sold the condo in 2008 – received 200k (minus 30k taxes and 15k renovations)

Condo value in today – 160k (according to MLS listings)

Lessons learned:
. made some good money during ‘exceptional’ years
. feds got their share (capital gains)
. those days are over for quite a while

#104 blase on 10.08.10 at 11:54 am

Re: Got a Watch #68

Wow, pretty interesting way of living. Sounds unreal compared to all the bs that gets passed around as “living” these days.

Question: what kind of jobs are available in that kind of neck of the woods? I would love to return to Canada (live in Asia now) and make the jump to country living, but wonder if it’s do-able.

Any insight from you or others who live rural would be very much appreciated!

#105 jwkimba on 10.08.10 at 12:01 pm

#68
Out here, we get zero services, other than snow-plowing in the winter and grading of the gravel roads 2 or 3 times in Summer. That’s it.

Really? No schools for the kids? You are banned from using your regional health center/hospital? No police, fire or ambulance services in your township? You have your own garbage dump in the backyard? No fall fair? No electricity? No road maintenance? No mail service?

I agree,you aren’t paying *nearly* the cost of the services you do receive. It’s the city closest to you that generates the wealth and the taxes (those people in concrete pods) that allow you to live way out there with your ‘minimal’ services!

#106 Foggy on 10.08.10 at 12:03 pm

I’ve been re-thinking my suggestion to have the Comments software highlight the word “gold” in red, so I can skip over that post and go to the next one. I now realize this was inappropriate. It would be better to just have an auto-delete function to kill the “gold” post outright.
I was under the impression that the central theme of this blog was real estate and connections to the economy. Which is why I read it. I’m sure there are other blogs/sites that focus on metals or gold. Go there.

#107 Reasonfirst on 10.08.10 at 12:13 pm

#23 Thetruth

“Well I say that we have a greater percentage of people over 35 than we ever had. Ever heard about the baby boom? And the fact that our fertility rate is low. Hope that explains the 70 percent .”

Not sure what your point is. The question is what makes up the remaining 30% of non-owners – hmm let’s see – young, poor, those that will never buy, those in care homes, bears…

#108 Real Estate Realist on 10.08.10 at 12:20 pm

#110 Bullion Bunny
#126 45 North (haven’t seen Wall St. yet)

(from “Prophetic” comments yesterday)

Personally, other than being able to play the market as an individual and hopefully make money on logistical, viable runs of great products and demand for commodities here’s how I see the big picture, ie. the manipulation and exploitation of individuals on a grandiose scale:

Strategies by the elite for short term profits with risk deemed acceptable as possible total collapse and subsequent restructuring. The public are simply pawns and are valued as collateral damage. However, that collateral damage is acceptable as well because it will repair itself with blind want for things again in the future. ie. the pawns restructure themselves as well.

Just do what Garth says. Don’t do what the herd is doing and you should always be ok.

#109 $fromas$ia on 10.08.10 at 12:33 pm

But it also demonstrates houses have no intrinsic or innate value. They’re worth what someone’s willing to pay on the day of closing. And that makes it the most emotional of assets.-Garth
`~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

From your last thread.

Actually, your house is worth what the bank is willing to loan you. Right now thats allot and all you need is a weeks work and a note from your employer!!!

The lenders don’t care they get commission. The Agents don’t care they get commission.

The buyers don’t care. They think that they can hold the Government accountable!!!

So when does it end Garth?

#110 Watching in Kelowna on 10.08.10 at 12:56 pm

Devil’s Advocate

Garth has never had anything against purchasing real estate at the right price and for the right reasons.

Anyone currently purchasing in Kelowna is throwing money away. Try graphing the average or median price of SFH in Kelowna over the last few decades. Then compare that graph to a graph of average family income over the same time frame. Just for fun, do a graph of Kelowna’s population as well.

The huge bump in house prices are not supported either by a rise in incomes or an increase in population, leading me to believe it was due to both excessive borrowing and speculation. Rebuilding the destroyed homes after the 2003 fire added to the construction boom and also pushed real estate higher as money flowed freely. Now, rents seem to be coming down as people are desperate to do something with their empty properties which aren’t selling.

Unemployment was up again and alot of people in Kelowna maxed out on mortgages in the last few years. They stand to take huge losses if they need to move (for instance to find work). The rate at which property values were rising caused people to take excessive risk in purchasing both their principal residence and rental properties. Rents were high due to boom factors, and people were willing to have very little leeway in income versus cost on their rental properties because the property was going to increase so much in value each year.

I have loved owning my own home in the past and hope to that again at some point, but there is way too much risk in entering the market at this point.

If realtors actually cared about their clients, they might perhaps admit that this market is uncertain, instead of claiming that the buyer’s market will end soon and people had better buy now or be priced out forever. How about some honesty with both sellers and buyers?

#111 JM in London on 10.08.10 at 12:59 pm

#97 CTO on 10.08.10 at 11:20 am

I have been all along…if it helps the observations are the shorter posts – Most interesting news is the whole TD collateralize move – SCARY stuff as it’s basically a bit of a nasty trick to 1) Rope you in to a possible HELOC and 2) make it more difficult to leave them should you want to exercise your right as a consumer to leave for better treatment, Why? second set of legals to incur should you want out…Get the feeling there may be some lawyers sitting on TD’s board??

as for the rest:

I know! I know! I’m getting mud on myself and right now you’re in jump over mode…Just about to dust off the pants and get back to it here. Every once in a while I do have to push back – I really feel the extremists are too much at times and bullies of all stripes need someone to push back a bit…

Mt apologies as I have said I do value the attempt at an accurate picture of what’s up out there.

#112 the dude on 10.08.10 at 1:08 pm

Hey Garth

How long is the Surrey event? I have to run at 4:00 and I don’t want to be rude and leave before it’s over.

Thanks

3:30 pm. — Garth

#113 Timing is Everything on 10.08.10 at 1:10 pm

#44 PPP

Agreed. Been there done that…10 years ago.
Vegtables yes….still not ready for chickens though.

Some advice (It’s free, so take it or leave it)

– Make sure you have your own water source (well)
– Make sure the septic system is in good working order,
a gravity system is best and simple. ie no power required and low maintenance.
– make sure the house is ‘solid’. A well-built 1300 sq ft, three bedroom bung , and an unfinished basement is all you need. Attached insulated garage is better.
– make sure you have 200amp service or more.
– install a generator power backup for longer term power outages.(disater) Make sure your well pump will run on your backup gen set!
– an irrigation system, or plan to install one.
– I only have power service to my acreage. (mostly off the grid)
– heat with wood stove if possible (I bought a forested acerage – fuel for (our) life) I have electric base boards, but they are very rarely used. No furnace needed.
– get a ‘watch/guard’ dog…and family buddy.
– learn to conserve.
– upgrade the windows to reasonable standards.
– befriend your neighbours
– be as self sufficient as you are capable.
– We have a small fibreglass camper/trailer (just in case)
– other obvious emergency supplies ;)
– DO NOT RELY ON YOUR GOVERNMENT in an emergency.
better to help your neighbour(s) and visa versa
– marry a woman from the Prairies… ;)

There are many other suggestions, but this is a primer.

This is our 4th house purchase…This is our retirement home.
We plan to sell sometime around 2025-2030.

Good luck. Hope some of it helps.

#114 Jake on 10.08.10 at 1:11 pm

#75 Joseph,
Your Calgary condo is going to take you to the cleaners. Sell it now! If you price it right, you can cut that ball and chain before the losses become insurmountable. Positive thinking will not turn this around.

http://calgaryrealestatereview.com/

#115 PTDBD on 10.08.10 at 1:30 pm

The grains went “limit up” today.
Paperpretidigitization makes great fertilizer. Enough said.
http://market-ticker.org/akcs-www?post=168582

#116 Reasonfirst on 10.08.10 at 1:32 pm

#27 Devil’s Advocate

“well isn’t that in itself akin to hypocrisy you accuse CREA and it’s members”

Garth is one voice – how many realtors are there in Canada? Kind of a lame comparison.

#117 DaBull on 10.08.10 at 1:33 pm

#81 WINNIPEGER

Article from Calgary=

House coming up for renewal and its value dropped by 60k since they purchased it 3 years ago. Bank would only re-mortgage its present day value (as it should)…..home owners lost the house…….

First, The original lender stopped doing business in Canada, thus the borrower has to look elsewhere for funds.
Second, they tried to get a new mortgage from a new lender. The new lender will only give the present day value, as lenders have always done and will continue to do.

IN BIG BOLD LETTERS FOR THOSE THAT DON’T UNDERSTAND THE MORTGAGE RENEWAL PROCESS IN CANADA: IF YOUR MORTGAGE AND CREDIT IS IN GOOD STANDING YOUR ORIGINAL BANK WILL RENEW YOUR MORTGAGE REGARDLESS OF THE CURRENT VALUE..

Again… this new story fails to mention that the borrowers had to find a new lender, because their existing stop doing business in CANADA.

Can’t believe people are that stupid they actually fall for this type of journalism.

#118 TheBigLebowski on 10.08.10 at 1:40 pm

If the Age of the House is ending, as I have argued, the Era of the Burb goes with it. – Garth

Well if people did any research of there own instead of spending time idolizing authority they would know. The U.N has a madate to push for countries to create an economic enviroment that will basically herd the mass majority of the world’s population into compact cities. That is why in the U.S more and more off ramps are being de activated and most highways will soon only lead from one city to another. They want us contained in cities and unable to be self sufficient sorry to say. Its not me saying that, its the U.N, but I will be called crazy so go back to sleep, everything that occurs in the world is purely random and unplanned.

#119 Devil's Advocate on 10.08.10 at 1:55 pm

#112 Watching in Kelowna

You do make some valid points of which I have only refining suggestion which I will not bore you with at this time. In the meantime there are people out there who NEED to sell or NEED to buy and will with due dilligence do so within their means. Let’s not scare the crap out of them needlessly.

It’s just not that bad.

Really, since the dawn of time people have been proclaiming “this time it’s different”. While history may not repeat itself it certainly does rhyme. This is a necessary part of the typical 7 to 10 year cycle which we are already well 2 years into. We are near the bottom.

Those who speak of avarages don’t understand real estate… there is no “average” in real estate. For example to get an average 10% price drop some may may have gone down as much as 25% in which case some went up 5%. You want to be in that later group and trust me that is happening.

#120 junius on 10.08.10 at 1:58 pm

#101 Ret,

You said, “The MSM are, IMHO, far left of center but insist on identifying themselves as “main stream,” when really they are socialists and self appointed social engineers.”

This is bogus. Much of the mainstream media is very right wing. Look at Fox News.

You are missing the point and the problem with the MSM. It is no longer a left or right wing problem. That is the old paradigm. The new paradigm is that media doesn’t have an opinion except the one given to it.

The problem is that the main media outlets are tightly controlled by so few major companies. Shortly more than 2/3rds of the Canadian broadcasting system will be owned by 2 companies, Shaw and Bell.

Budgets have been cut for “reporting” and “journalism” as companies deal with fewer ad dollars and fewer ways to monetize content.

What now passes for news is a press release like the one the other day from Remax that is designed to pass as a news item instead of a pumper opinion. The echo chamber is so controlled that every major news outlet runs with it but no one bothers to question it.

It means that the Media is increasingly slaves to the larger organizations who advertise with them. Against bank bailouts – then lose bank advertising. Against a bailout of the auto industry – lose car ads. Talk about a housing bubble – lose Real Estate corporate ads.

#121 junius on 10.08.10 at 2:00 pm

#99 Ben,

Good response. Love your blog.

#122 Bill ( Peterborough) is a FRAUD on 10.08.10 at 2:01 pm

Fun with connect the dots… :)

The MSM many years ago see News reels = paper sales…then note news casts = paper sales…and there may be a link to roots in england to a little rag with boobs…which spawns a sensationalist little rag with the initials N. E….Then try what was considered silly – a news show called ET…it works!…now lets try 2!…Inside Edition…and in a little while we have….Jacko…a while and a few shows later…a girl, let’s call her B.S….the icing on the cake?…a show just called by it’s own initials called TMZ

AND IN THE NEGAVERSE: :) ;) :) ;)

Meanwhile…in a rat infested flea trap we find an intrepid author laboriously slugging away with his wife…Wow! a book deal!! and an advance…they can finally buy a house!…How to name your pet isn’t a smash…nor is a guide to a career in the armed forces…the young authors have skill at sales AND writing and publishers notice…a series of books follow with decent income but this is Texas and we all know decent ain’t big enough for Texas…the young and ambitious couple are tired of toil and see things happening around them like…L Ron… Jim and Tammy Faye…Jimmy Swaggart…all are lighting up the popularity and money charts…all with things that just aren’t honest…then they are seduced…FF>> to 1987…Dark Secrets of The New Age…CACHING!!!!…more books follow and ring the till…the author notices the MSMverse…enter Alex Jones…enter the internet…enter sales bonanza…enter the icing on the cake Andrew Hitchcock…

F is for Friday

F is for FUN!

F is for FOOLS (who forgot how to connect the dots…or follow the money :) )

Happy Thanks Giving everyone!!!!

#123 OnlyTheBankersLaugh on 10.08.10 at 2:03 pm

Watching in Kelowna,

DA is fairly self interested as his many, many posts might indicate and he doesn’t seem to realize the basic status quo is that the spin was, generally is and will continue to be in realtors favour. They pay the money to newspapers for ads, papers capitulate in spades by creating real estate reporters and the pumping is supplied to the paper by real estate orgs and printed without analysis or some form of balanced editorial comment. Now, it has been pumped into such a bubble with CMHC and political manipulation in ’08 to try to have an election to get a majority or at worst being seen to have weathered the recession. Again, as you say, seeing the trend lines and still pumping it or even saying “no fair, we’ve been pumping this up and now there are a couple of people providing opinions different than their own” and they scream for balanced arguments. Is that not a little bit funny? Really, if DA looked in his bike mirror and read his posts with those trend graphs taped to said mirror, he’d be howling. Garth may be a tad attention grabbing on the “little blog that grew” or “little blog that could” but someone has to blaze it out there so more are not hurt. Can you imagine, if you have kids, having them walk into university education bills and then put 5% in this market? And, no, it ain’t “the same as when we were kids.” I think Garth is providing a great tempering voice of reason of the non-stop pumping of real estate boards. When it’s out of hand, it’s out of hand. These kids have no idea what they face if the world turns and interest rates fire up. We know they can’t go down! If Garth and 75% of real estate “reporters” were in MSM daily in print, voice and TV, then I might agree with you that the message does not have to be dire but I think a little bit of shock to have most people pay attention is good as the balance is still far in the real estate industries favour.

#124 Foggy on 10.08.10 at 2:09 pm

At 89 Antonio:
To get some idea if your agent is giving you the real perspective on a “hot” market, just look here at Guava. You just check which district (Toronto) you want to look at and it will bring up all the MLS listings in that area. You can also see how many days the house has sat, unsold. If there are a lot that are past 30 days, how can this be a hot market?

http://guava.ca/map-checkbox.html?lo15=on&hi15=on

#125 Brass Balls on 10.08.10 at 2:23 pm

#97 Dan in Vic

“They have been sucked in.”

Correction: They have let themselves be sucked in.

#126 Allis Well on 10.08.10 at 2:34 pm

Garth it’s hard to believe the bubble you speak of.
Occasionally, there are still hidden gems out there as long as you look hard. $700,000 and you can live right in the heart of Vancouver East.

http://www.realtylink.org/prop_search/Detail.cfm?areatitle=&ARPK=&ComID=&agentid=&MLS=V827408&rowc=11&rowp=11&BCD=GV&imdp=10&RSPP=5&AIDL=238&SRTB=P_Price&ERTA=False&MNAGE=0&MXAGE=200&MNBT=0&MNBD=0&PTYTID=5&MNPRC=600000&MXPRC=2000000&SCTP=RS

#127 Timing is Everything on 10.08.10 at 2:37 pm

#68 Got A Watch

Agreed. Did it ten years ago. Stay away from cities and subs postage stamp, serviced (taxed) lots…just far enough out so their tentacles can’t reach you. ;)

#128 tran, Calgary on 10.08.10 at 3:00 pm

Hi #96 MP,

City of Yellowknife has land plots for sale.

http://www.yellowknife.ca/City_Hall/Departments/Planning_Development/Planning_and_Lands/Niven_Lake_Phase_VII_Residential_Subdivision.html

“The City currently has 12 residential lots available for sale in the Niven Lake Phase VII Residential Subdivision. These lots range in size from 440m2 to 877m2 and in price from $92,000 to $158,000. An information package containing detailed property information, conditions of sale, and zoning requirements is available from the Planning and Lands Division at City Hall or online.”

Buy a plot, and build your own house. Yellowknife is like Fort McMurray; one has diamond mines, and the other
has oil sands. At least, Yellowknife has a lesser environmental issue than Fort McMurray.

I wonder why no real estate developer ventures into
Yellowknife. It’s a gold mine…….eeee diamond mine out there.

#129 Moneta on 10.08.10 at 3:12 pm

http://www.ritholtz.com/blog/2010/10/estimates-of-wealth-distribution-are-widely-wrong/
———–
This is wealth distribution in the US and it’s not very different in Canada.

Basically, the top 20% owns more than 80% of the welath. Let’s not forget that most of that 80% is also in the hands of the 55+.

You don,t have to be a rocket scientist to see 3 outcomes in the future relating to concentration of wealth:

1. Flat: Nature hates a void. Thus the pendulum always swings

2. Up: That means a further move towards Banana republic status

3. Down: That means a redistribution from the old to the young.

Take your pick.

#130 UrbanCowboy on 10.08.10 at 3:16 pm

But I’m curious why FEMA stores all those plastic caskets at their concentration

DELETED

#131 JM in London on 10.08.10 at 3:21 pm

#120 DaBull on 10.08.10 at 1:33 pm

Hate to say this but that was likely true. The lender in question? Wells Fargo.

1) Meaning their credit was trashed to begin with

2) The value was almost assuredly inflated as it was a refinance to pay off debt from the credit train wreck caused 5 years earlier – I managed to help someone not long ago that was in similar straights – problem I found with Wells is that the people were most likely drained of the last of their blood with easy credit cards and high interest personal loans…

It’s this kind of story that gets my blood boiling and what ethical mortgage brokers are attempting to clean up – we treat things like this as a credit counselling session and lay it out – attempt debt settlement – and attempt to educate and rehab – there was help out there but the people didn’t find it unfortunately…

Things like this are the real crimes.

#132 UrbanCowboy on 10.08.10 at 3:25 pm

Maybe they’ll be renting them out to foreclosurees?!

#133 Timing is Everything on 10.08.10 at 3:29 pm

#122 Devil’s Advocate said – “In the meantime there are people out there who NEED to sell or NEED to buy and will with due dilligence do so within their means.”

Nobody ever NEEDS to buy.

#134 Debt Free in the U.S. on 10.08.10 at 3:31 pm

Hey Garth-
Todays financial news was all about Bad Real Estate loans and another Bank Crisis…next year. seems all the “bailouts” were NOT enough.
(See Clusterstock.com) for the stories. Hope this new threat doesn’t bleed northward, but commerce being what it has been, it most likely shall.
Wish us the best in our upcoming mid-term elections where we will likely trade hapless DEMOCRATS for clueless REPUBLICANS. You can’t tell the difference even if you turn them up-side down.
As for me, I have the best kind of real estate and autos-PAID FOR!!

Cheers

#135 JM in London on 10.08.10 at 3:44 pm

#116 Timing is Everything on 10.08.10 at 1:10 pm

This is good common sense we (me & the sibs) were taught as far as no matter what, you’ll never starve. Lessons from the 30’s! It can sound doomerish but it really is common sense – also learn to can/preserve and have a root cellar plan handy…this is where I just agree and funnily enough the common sense part of the doomers, green, local food, organic, and self sufficient movements all contain a similar message –

I’d also suggest some solar/wind battery pack set up can make this seem a little less draconian as well.

A scheme like this did help my blue collar hard working grandparents retire rich (millionaires when it meant something) in a real as well as financial sense and it can be fun too!

There is good everywhere after all. And some people think my view “just” one thing or another…does display some of the limitations of this type of communications…

#127 Foggy on 10.08.10 at 2:09 pm

I second your suggestion and have actually been meaning to thank you for bringing that fun little toy to the table a while back!

Thank you!

#136 Devil's Advocate resurrection on 10.08.10 at 3:50 pm

#126 OnlyTheBankersLaugh

You’re delusional, and the ONLY reason REALTORS advertise in the papers is to appease their sellers. Newspaper ads don’t get properties sold – if it were that easy then there would be no need of a REALTOR. What the general public knows of the real business of real estate is squat.

And how many times to I have to repeat “REALTORS don’t care if prices fall or go up. It makes no difference to us what-so-ever. What REALTORS want is a balanced market. This is not a balanced market. We want it to return to balance whre people can buy and sell with confidence. Take it up with your MP tell those S.O.B.s what you want. They are the ones who shot the system bull of adrenaline with ultra low interest rates and lax lending restrictions and look where it’s got us.

#137 Mark on 10.08.10 at 3:52 pm

“IN BIG BOLD LETTERS FOR THOSE THAT DON’T UNDERSTAND THE MORTGAGE RENEWAL PROCESS IN CANADA: IF YOUR MORTGAGE AND CREDIT IS IN GOOD STANDING YOUR ORIGINAL BANK WILL RENEW YOUR MORTGAGE REGARDLESS OF THE CURRENT VALUE..

Sure. The rate *will* suck though, as it will likely be the ‘posted’ rate (which is certain to rise after a while). And one will have no leverage whatsoever in negotiating a better rate with either the original bank, or an alternative lender, unless they have equity.

The people best off will be those who recognize that the overvaluation in their houses is never coming back, that their equity is going to be increasingly negative, and simply throw the keys to the bank and declare bankruptcy.

#138 JM in London on 10.08.10 at 3:59 pm

#140 Mark on 10.08.10 at 3:52 pm

Correct! it will be “special” and those that don’t c;ean up their credit will need lube…

#139 Timing is Everything on 10.08.10 at 3:59 pm

#122 Devil’s Advocate said – “In the meantime there are people out there who NEED to sell or NEED to buy and will with due dilligence do so within their means.”

One NEVER NEEDS to buy. I agree that one, may NEED to sell.

#140 Keith in Calgary on 10.08.10 at 4:04 pm

#123 Junius said……..”much of the mainstream media is very right wing……..look at FOX News for example”…….

True ‘dat…….

How much is “much”…….is the real question I guess when the left wing component of the televised MSM consists of……

ABC
NBC
CBS
CNN
MSNBC
BBC
CBC
PBS
TBS

Did I forget anyone ? Heh……….snort.

#141 Devil's Advocate resurrection on 10.08.10 at 4:05 pm

“Garth is one voice – how many realtors are there in Canada? Kind of a lame comparison.”
#119 Reasonfirst on 10.08.10 at 1:32 pm

True and so is it true that Garth can choose the audience he wishes to cater to where as the real estate profession must maintain a duty of care to both Buyers and Sellers.

Clearly Garth has said little, if anything, to protect the interests of Sellers other than to yell at them to sell fast and invest the tax free capital gains in the financial markets. Then, in practically the same breath he turns around and yells at the very prospective buyers of those properties to not buy but rather invest those monies in the financial markets. Does that make any sense at all? Can you not see the flaw in it?

#142 Timing is Everything on 10.08.10 at 4:06 pm

#97 Dan in Victoria said – ….”all the young guys who she says are “good guys”.
They have been sucked in. Easy credit, with no life experience.”

Those “young good guys” just got some ‘life experience’.
That’s life.

#143 bigrider on 10.08.10 at 4:06 pm

Garth- You are picking on homes in the burbs. So suburb homes melt 30-40% over next 4 years and T.O proper melt 20-30%.. big deal ..shouldn’t the message be made clear that all homes are vulnerable?

I think I’ve already murdered that equus. — Garth

#144 Devil's Advocate resurrection on 10.08.10 at 4:09 pm

#142 Timing is Everything

Ok…. varying degrees of “want” then does that make you happy, fuzzy, warm and loved feeling. Really it’s the “motivation” that matters isn’t it. Some are just more “motivated” than others – a whole lot more than others.

#145 Devil's Advocate resurrection on 10.08.10 at 4:23 pm

It’s turkey time!!! Gobble Gobble.

Enjoy your Thanksgiving folks we really do have so much to be thankful for





Out here is Beautiful British Columbia <The BEST LACE ON EARTH

#146 George on 10.08.10 at 4:24 pm

Keith in Calgary on 10.08.10 at 4:04 pm #123 Junius said……..”much of the mainstream media is very right wing……..look at FOX News for example”…….

True ‘dat…….

How much is “much”…….is the real question I guess when the left wing component of the televised MSM consists of……

ABC
NBC
CBS
CNN
MSNBC
BBC
CBC
PBS
TBS

Did I forget anyone ? Heh……….snort.
———————————————————-

ABC
NBC
CBS
CNN
MSNBC
BBC

Sorry but these are 100% right wing = CORPORATE PROPAGANDA the last three CBC is half corporate propaganda of lies and the other half truth. Big Biz controls 95% of the media and majority of it is propaganda.

#147 Timing is Everything on 10.08.10 at 4:30 pm

#138 JM in London said – “It can sound doomerish but it really is common sense – also learn to can/preserve and have a root cellar plan handy”…

Hence, marry a prairie girl. Actualy, we both do the canning. It’s fun and a survival skill (sounds doomerish, but is really just common sense). The kids have fun too. We just cracked some excellent canned pears for dessert last night. We canned them 3 years ago.
Ya just never know.

We grew up on the prairies…Both our parents came from the farm community. Lots of practical knowledge/skills when I grew up, including butchering. Grow it, eat fresh while in season and root cellar and
can the rest…or bake and freeze….

Forgot to mention…Buy a super energy efficient CHEST-type deep freezer without the frost free option.
Pennies to run.

#148 Bobby on 10.08.10 at 4:46 pm

Looks like Devil’s Advocate is still trying to convince himself he is important and has something to offer.

I thought he left in a huff.

#149 Victor on 10.08.10 at 4:49 pm

Garth, the bank of Nova Scotia is suggesting we’re not going to see much in terms of interest rates hikes until late 2011. What do you think?

http://www.financialpost.com/Scotiabank+revised+interest+rate+outlook+rate+hike+Sept+2011/3645997/story.html

Of course. — Garth

#150 George on 10.08.10 at 5:08 pm

My uncle finally sold his home in a selling war? Sellings wars coming to Toronto? Uncle and another sellers in the area had to out lower their home price in order to sell. The buyers demanded a lower selling price or else they would buy the other house just down the street. Uncle claims the realtor told them to lower or else the buyer would go down the street. Lucky for him he out lowered his home and sold it. This housing crash is getting interesting. I heard about it last month from a co-worker but never thought much about it. These selling wars must be happening all over the GTA. I guess realtors don’t want you to know about it.

#151 VICTORIA TEA PARTY on 10.08.10 at 5:08 pm

ONE OF THOSE DAYS…

A cautionary tale for those Canucks who thought they’d pulled a fast one on the real estate-debauched Yanks.

This (edited) news report:

WASHINGTON (AP) — A mushrooming crisis over potential flaws in foreclosure documents is threatening to throw the real estate industry into chaos, as Bank of America on Friday became the first bank to stop taking back tens of thousands of foreclosed homes in all 50 states…

…The move…adds to growing concerns that mortgage lenders have been evicting homeowners using flawed court papers, without verifying the information in them…

Banking and housing analysts, meanwhile, fear the foreclosure document problems could prolong the housing bust…for years…

“If you are looking at the key in this country to economic stability, it’s the housing industry,” said banking analyst Nancy Bush…”a huge mess that helps nothing.”

…And some analysts feel that uncertainty…could make potential buyers change their mind about purchasing foreclosed properties…because of fears that the former owners will…SUE.

Watch it out there Canadian property virgins looking fondly to the south! Be careful what you wish for. Yankee traders can still screw the pooch even though he’s on his financial uppers, so to speak.

SPEAKING OF UPPERS AND POOCHES:

The Dow Jones closed, Friday, up above 11,000 the highest since the flash crash of last May!

Why? Well, it seems, the good times are back and greed has pitched fear out the door of his ’62 Corvette and is drivin’ down Route 66 all the way to the Big Rock Candy Mountain (see stories of the Dirty Thirties for an explanation)!

It should have been a down day, because of new and worse jobless numbers, BUT investors blew them off: 95-thousand (net) jobs disappeared, most of them in the public sector, while the private sector added only a smaller number of jobs.

Depending on calculations the new unemployment figure in the US is 9.6 per cent, or 12 per cent or 17.1 per cent. It stinks, in other words.

Why are investors so sanguine? It’s not that they don’t have sympathy for their jobless confreres. Do they? Who knows; who cares?

No, it’s all about self-preservation, the hunt for more yield, and the next anticipated move by the US Federal Reserve.

Investors are buying, says one Wall Streeter, because stock dividends are higher than bond yields. Of course they are! So why are bond yields so low? Because people are afraid to borrow because they have no faith in their country’s economic future!

Meanwhile greed awaits the next move by Mr. Money-Bags, the US Federal Reserve, which is now destined to jack-up the “money” supply again, just as it did in 2008-09.

That orgy of supply worked for markets from March 2009 and continues. So investors think history will repeat. Will It? We’ll see.

But there’s OTHER HISTORY PLAYING OUT, out there thanks to the money printing, and it’s not so sanguine.

There’s been a huge downside to this spend-a-thon as we’ve all been experiencing: real estate meltdowns, international trade disputes, trade protectionism, governments falling, riots in the streets… All that thanks to money-spinner machines in various world capitals that created all kinds of havoc in the twinkling of a blind eye. Amazing!

This printing process, called Quantitive Easing, has had another consequence that continues with an unknown outome: a currency debasement “contest” in which several G-20 countries are taking measures to drive down the value of their respective currencies to improve their export markets against the other guys.

Canada is already a victim because our best trading partner, the US, is leading the way in this contest. Our finished products sector will get clobbered because our Loonie is nearly at par with the Greenback (at least we can sell our non-renewables for huge prices using those tattered and torn US bucks, because it is the reserve currency!).

People think this debasement process, if not stopped now, will lead to some kind of huge depression-like contraction world-wide.

I think we’ve been in such a contraction for at least three years, and all this noise is just part of a larger process that is making things worse.

But what do I know?

Meanwhile, 11-thou on the Dow means precisely squat. In this environment that ’62 ‘Vette would be better turned into a lot of food, clothing and shelter for all of you hungry stragglers along Route 66…

#152 super dave on 10.08.10 at 5:10 pm

had to post this from vancouver sun…

The city and the Maleks are wrapped up in intense negotiations on how to move the unsold units, with the city controlling the base selling price. Real estate marketer Bob Rennie said his marketing plan has been delayed until late October or early November while negotiations continue. But he suggested the plan may include renting out some of the condos over the next year while the company waits for the market to strengthen

Read more: http://www.vancouversun.com/business/Millennium+Water+developers+blame+city/3641976/story.html#ixzz11o6198D7

Rennie… its not going to get better if you wait…

#153 pablo on 10.08.10 at 5:26 pm

“If the Age of the House is ending, as I have argued, the Era of the Burb goes with it. “-garth. Well I just finished skimming through the “homes and interiors” pull out that comes with my paper here in the greatest of all regions; DURHAM. Somebody forgot to tell Highmark see- theorchardestate.ca “The Orchard in Whitby. An exclusive one of a kind forested community of 60ft homesites from the low $700’s”
These homes come with all the bells n whistles; granite this and architecturally controlled that. Holy Crap; what a deal. Don’t these guys know we’re in the throws of a realestate meltdown in canada? No wait; I know; there’s still plenty of greater fools that want to trade up to a McMansion that’ll take all of their incomes to carry, that must be the reason for the three car garage….they and their boarder will all be working to cover the upkeep. All’s well and fine in the region of durham that fairytale kingdom just east of the centre of the universe that is Toronto. The house era dying, the burb’s dead p’shaw and poppycock; they’re just on life support!

#154 JM in London on 10.08.10 at 5:36 pm

#150 Timing is Everything

That’s richness at it’s best! My skills originate from Seech MB handed to me via ON transplant.

You sound happy – kudos and happy thanksgiving!

#155 Chris in Langley on 10.08.10 at 5:47 pm

Devil’s Advocate,

So you’re a real estate sales rep. How many units did you sell in the last 5 years? Tell me more about your “mentor.” You know that only rookie sales reps talk about their mentors because they haven’t yet established themselves yet. Come clean about living at home with your mom and stop trying to imprersonate an expert opinion. Any fool can spout facts he/she has read that were written by someone else. People who have been in a particular industry and have gone through the good and bad times don’t talk like you do…why? Because they know the truth. You’re full of crap and haven’t ever made a living in the real estate industry, you live at home and you’re a carbon copy of the young buck from Edmonchuck who Garth featured in August.

#156 Patiently Waiting on 10.08.10 at 6:19 pm

September Stats for Vancouver Real Estate don’t look so good . . .

The Real Estate Board of Greater Vancouver (REBGV) reports that the number of residential property sales in Greater Vancouver totalled 2,220 in September 2010. This represents a 37.6 per cent decline from the 3,559 sales in September 2009.

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.

Sales of apartment properties reached 971 in September 2010, a decline of 34.7 per cent compared to the 1,489 sales in September 2009.

Attached property sales in September 2010 totalled 383, a decline of 40.1 per cent compared to the 647 sales in September 2009.

September saw a total of 1,044 sales processed on FVREB’s MLS® in, a decrease of 34 per cent compared to 1,590 sales in September of last year.

http://www.homebuyandsell.com/listings?pathway=0

#157 Nostradamus Le Mad Vlad on 10.08.10 at 6:28 pm

#64 Jayman — Thanks for putting me straight. See, we all learn something new everyday!

#67 andrewS — Good post. Similar to Garth’s line about eating KD. A lot more of what you wrote about is happening all too frequently.

#79 Brass Balls — “I hate realtor spin and want to live in a spin free world.”

Unfortunately, that won’t happen. This planet is no more than a very good classroom for each to get their experiences in life.

There will always be a few who have a love of power, lording it over other people. Then the roles are reversed in the following lifecycle.

#92 BingoBabe — “If you don’t like the message here then return to MSM and drink it up!”

Indeed. They can volunteer to go help search for dubya’s WMD in Iraq (or help rebuild the country).

#97 Dan in Victoria — “They have been sucked in. Easy credit, with no life experience.”

Therein lies the crux of the problem, as life itself is the greatest teacher. Is it possible that any may sit up and take note of what is happening? Because if “they” don’t, they will continually repeat the same cycle.

#158 Devore on 10.08.10 at 6:30 pm

#104 arthur

Nothing stopping CMHC from making exceptions for existing mortgages, if the owner is still making payments and has good credit. Government doesn’t want people defaulting. What will happen however, most likely, is the owners will be stuck with their current lender, at whatever terms they want to dictate.

#159 T.O. Bubble Boy on 10.08.10 at 6:52 pm

Flaherty does it again!

He’s “encouraged” by the country losing jobs?!?!?

http://www.vancouversun.com/business/Flaherty+encouraged+jobs+data/3643180/story.html

Further proof that this guy is simply a yes-man for Harper… every single piece of news (good or bad) is “proof” that we’re on the right track.

More Jobs – great!
Less Jobs – terrific!
More Debt – wonderful!
Less Debt – amazing!
Recovery – yay!
No Recovery – yay!

#160 Devil's Advocate resurrection on 10.08.10 at 7:03 pm

#151 Bobby
You bet I have a high opinion of myself. Ya don’t last as long as I have in this business without a higher dose of self confidence than your average time clock puncher. But more to the point you don’t last as long as I have in this business without bringing something of value to the table. Ya see Bobby, every day of every week of every month of every year I am looking for work. I need the work first to pay cost of running my business which likely well exceeds your gross annual wage and then, and only then, I get to take home what is left over. You think some petty correction/recession/depression is going to knock the wind out of my sails (sales). Not a chance. Why? Because I have a history of beating the odds a proven track record of success that is worth something in itself.

Some agents discount their commissions – and so they should. I’m not one of them.

#158 Chris in Langley
Thank you so much for seeing the truth in what I say such that you think I must have looked it up and plagiarized it from some book or the internet. I didn’t. I know this shit inside and out. I don’t need to look it up copy and paste it. I’ve got well over two decades in and a whole lot more left in me. Difference between me and a snot nosed little shit like you is I know that I am still learning.

#161 Devil's Advocate resurrection on 10.08.10 at 7:09 pm

#151 Bobby
#158 Chris in Langley

Oh and you Duddetts, Bobbi and Chrissy, If you are ever so fortunate as to be sitting across the table from me you will learn a lesson or two from this “mentor”… be warned though… it’s gonna cost ya… to the benefit of my client and then, and only after then, me.

#162 THANKFUL on 10.08.10 at 7:15 pm

I love this blog – better than going to the movies….

Garth, I’m sorry I will miss your talk in Kelowna on the 14th. You see, I finally sold my home in Kelowna after three years (spring/summer fall listing) and will be moving into my rental house to watch the world unfold thanks to your advice. Now that I’m in my safe zone, I can’t believe the reports in Kelowna that now is the time to buy, and building starts in Kelowna are soaring – what crap , there is a world of hurt coming to a city near you…..

#163 Nostradamus Le Mad Vlad on 10.08.10 at 7:25 pm


#154 VICTORIA TEA PARTY — “ONE OF THOSE DAYS…”

A great song by Pink Floyd — “One Of These Days (I’m Going To Cut You Into Little Pieces)”.

That line was said by Nick Mason (drummer), then morphed into a giant robot-sound voice. Based on the original quote by Jimmy Young, the BBC Radio 1 presenter in the 1960s. The flying pigs take centre stage in the second half of the song.

Rest of your post is pretty good too!

Finally one bank has the sense to realize what is happening is not right.

Politicians Suck “A casting call, to fill the audience for Obama’s “Town Hall” meeting! In other words, all those “Americans” you see smiling at Obama on TV are ACTORS AND ACTRESSES!” wrh.com.

Re: Wall St. “Remember not too long ago I told you the DOW was no longer an indicator of real economic health but merely a gas gauge showing how much money Wall Street was sucking out of your pockets?” wrh.com.

IMF “There is no real “recovery” going on: this is only parroted bycorporate media shills who want people to believe it exists, when it does not.” wrh.com.

Good question: What happens when the bankers run out of thin air?

Flurry of ‘Quakes Let’s rock ‘n’ roll baby! Has nothing to do with the Dow hitting 11K today!

5:34 clip “I told you it was all about creating a global government and forcing you to pay for it!” wrh.com.

8:46 clip Inflation Nation, Dollar Destruction. Plus — How stupid do these bozos think we are?

Bye Bye Ben? Print money without the Fed.

Further to the Michigan sink hole post from yesterday.

7:03 clip “Oath Keepers is not a militia, but they are strongly nationalistic, which is a threat to the globalists.” wrh.com. The US govt. seized the parents new-born baby because of their political beliefs.

#164 Devil's Advocate resurrection on 10.08.10 at 7:26 pm

#151 Bobby
#158 Chris in Langley

And, while I’m on a roll, the real test of how good a REALTOR is might well be considered their track record of not being sued. In this industry it is often said “it’s not a matter of if you get sued, it’s a matter of when”. Avoiding being sued in this business requires a high level of skill, competence and ever present dilligence. I’d be happy to show you my clean record in that regard. Just flip me a quick request to [email protected] along with the address of your rented basement suite.

#165 Taxpayer like everyone else on 10.08.10 at 7:47 pm

99 Ben – thank you for that excellent link. Nevertheless, “the truth” can still be correct in that the large boomer demographic will skew the overall.

What I find very interesting is on page 16 of the link. Look at the percentage of home ownership across income groups from 1971 to 2006. A basic trend
emerges: The top three quintiles have all increased their
percentage of homeowners. The second quintile has remained more or less unchanged. The bottom “poorest”
quintile has slipped in homeownership across all age
groups over that time period.

Lets present two hypothetheses. 1) “poor” people
have been priced out of the market or 2) we have not
been reckless by allowing “sub prime” borrowers to
purchase homes (at least til 2006). Open for debate!

#166 bridgepigeon on 10.08.10 at 7:51 pm

153 George;
I would suggest these selling wars are a suburban thing.
There is a handful of house styles as far as the eye can see so you can get the same product down the street. Fortunately in the beach bidding wars are back, certainly for the lower priced homes. I’m putting mine up in two weeks and have been greatly relieved at what I see.

#167 Taxpayer like everyone else on 10.08.10 at 8:06 pm

132 Moneta

“Basically, the top 20% owns more than 80% of the
welath. Let’s not forget that most of that 80% is also in
the hands of the 55+.”

No Moneta, you dont have to be a rocket scientist,
(though I did take the course).

Why would anybody expect an even (or more even) distribution of wealth between the old and young? Building wealth takes time. I’m not sure I even had a
net worth at 30, probably less than $100K at 40, but at
fifty, after a few good years of business, and paying off
the mortgage, its pushing 7 figs. According to wealth
calculators, considering my age, education and income, its
all really very average.

Have faith and patience Moneta. Work hard (and smart) with a game plan. Dont keep switching horses – stick with
what you are good at and enjoy. There are no guarantees, but this approach gives you a good chance.

#168 dradak1 on 10.08.10 at 8:18 pm

#44 PPP on 10.08.10 at 1:17 am

Keep reading and looks that you need few more years. ;-)

#169 Dan in Victoria on 10.08.10 at 8:18 pm

Nostradamus @ 160
Therin lies the crux of the problem, as life itself is the greatest teacher. Is it possible that any will sit up and take notice? Because if they don’t they will continually repeat the cycle
Exactly my point.
It applies to all of us. You, me…..
That is one reason I come here, something to chew on every day. Diffrent angles of thought…..
These young fellows followed MSM, parents, friends etc.
She says a few of them are starting to get it.

#170 Old_is_Gold on 10.08.10 at 8:23 pm

#100 CTO on 10.08.10 at 11:25 am

#68 Got A Watch

Great comment!!! Here! Here!
I wish I could convince my wife……
++++++++++++++++++++++++++++++++++++++++++

Couldn’t agree more, urban living sucks! Especially the burbs!

#171 Moneta on 10.08.10 at 8:27 pm

2) we have not
been reckless by allowing “sub prime” borrowers to
purchase homes (at least til 2006). Open for debate!
————-
Credit scores are moving targets. So they are prime until they aren’t.

My definition of subprime is definitely not CMHC’s nor the banks’. Borrowers with good income now might not be prime when they lose their jobs. Mydefinition includes those who will not have incme in the near future. Such as the thousands who will lose their jobs/income when housing tanks.

#172 Debtfree on 10.08.10 at 8:34 pm

This guy Greg Neuhaus is a realturd.
http://www.globalwinnipeg.com/Some+good+news+North+Okanagan+couple+with+mould+home/3646506/story.html

#173 dradak1 on 10.08.10 at 8:43 pm

Hi Garth,

After years of doing very good job – letting people express there opinion about RE – are you trying to shut down the blog by letting clowns to argue?!?
If I am in yours boots – sorry – I’ll consider my work unfinished. :-(

Are you a bot? — Garth

#174 tkid on 10.08.10 at 8:53 pm

I thought the blog dogs would like to read Sherry Cooper’s latest economic article: http://www.bmoinvestorline.com/EducationCentre/InSite/fall2010.html

#175 dradak1 on 10.08.10 at 8:58 pm

#73 C on 10.08.10 at 9:41 am

In general there are just two options (unfortunately at the moment neither is good) – increase in wages to stimulate spending – what will lead to hyperinflation, or decrease the prices to find buyers – leading to deflation.

#176 dradak1 on 10.08.10 at 9:04 pm

#176 dradak1 on 10.08.10 at 8:43 pm

“Are you a bot? — Garth”

Sorry Garth but your “Harley” and your “life stile” is on the line and I’m just trying that we all get back to the Mother Earth. :-)

#177 dradak1 on 10.08.10 at 9:20 pm

#87 Chris no longer in England on 10.08.10 at 10:38 am

Hi Chris – I tried changing the “environment” where I live but unfortunately didn’t helped that much. :-(
Every time when you arrive – people are cautious (with reason I must say) and you starting over and over.

#178 Taxpayer like everyone else on 10.08.10 at 9:49 pm

176 Moneta – not what was put forth for debate. Your definition was not relevant to the hypothese proposed.

#179 dradak1 on 10.08.10 at 9:52 pm

#110 Foggy on 10.08.10 at 12:03 pm

I’m not “gold bug” but I’m not against it either – my understanding (agree 100% with THE GT MAN) – DIVERSIFICATION is the key – Garth is preaching/explaining all-the-way (as long as I’m on this blog) – “Don’t hold all your eggs in one basket” – can it be simplest as that?

#180 dradak1 on 10.08.10 at 10:10 pm

#162 Nostradamus Le Mad Vlad on 10.08.10 at 6:28 pm

” … #79 Brass Balls — “I hate realtor spin and want to live in a spin free world.”

Unfortunately, that won’t happen. This planet is no more than a very good classroom for each to get their experiences in life. …”

Sorry Buddy – but you just proof that will happen and you’re doing your part (very well) – helping others to open there minds. :-)

#181 Tony on 10.09.10 at 4:03 am

The mistake people make today is they live beyond their means. Even rich people make the same mistake just ask Wayne Newton who i personally know.