The flip

In Victoria is takes nine times the average income to buy a house. In Kelowna it’s seven times. In parts of the Lower Mainland, and Vancouver, about ten times. Could this be why my events this week in each location have been sold out? Or is it simply my rippling abs, the steely sixpack beneath my tie and that infectious personality?

Hmm. Maybe it’s the realization the US housing market collapsed when it reached far lower levels of unaffordability. Or that the economy in BC and across the country is barely crawling. Or that higher rates and taxes are on the agenda of politicians who will never reveal it. Or the clear sense houses increasingly represent danger, while opportunity lies elsewhere.

More likely, though, the hundreds who will hear me this week are a tiny minority – like the ragamuffin band of spear-brandishing contrarians who come here to whiz on authority. The vast majority of citizens live in delusion. God help them.

Before I begin today’s sermon, rabble, let me remind you how useful it is to take a gander south of us from time to time. While we’re not Americans, and this ain’t Phoenix or Dade County, even a mild case of the USA real estate crisis would be lethal to our pompous and self-absorbed middle class.

Four incredible years into the housing melt, the number of homes seized by US banks in a single month has just topped 100,000 for the first time. And while this may be temporarily derailed by the current wrangle over legal titles, rest assured it will continue. At the same time, there were more than 300,000 additional new filings for foreclosures last month – which was 3% higher than in August. And, for the latest 90-day period, RealtyTrac reports 930,437 foreclosure actions. That means one in every 139 homes was hit.

That, of course, is just foreclosures. At this moment, one in four families with a mortgage in the US is under water, owing more in financing than they have in equity. And an estimated four million other families have stopped making mortgage payments figuring there’s no longer any point.

But never think this is an American condition. They have no corner on greed and stupidity.

While sitting on a flight between Victoria and Kelowna, secretly working my Berry as the WestJet attendants were busy selling earphones and bags of Bits ‘n Bites to buy fuel, this note appeared on my screen:

“Hi Garth: After reading your blog tonight, I wonder how anyone can possibly still be thinking now is the time to buy real estate. The time has passed. I’m an accountant and I’m starting to hear tales of woe, people who bought real estate in the last couple of years and are now sorely regretting that decision. Here’s a story you might find interesting.

“I went to visit a friend of mine whom I hadn’t seen for a few months. When I arrived, things seemed a bit tense around her household (she and her husband have a bunch of kids), even more than usual. When she and I were alone, she confessed to me that her husband, in his infinite wisdom, purchased one of those famed Olympic condos with the intent of making a quick flip. “Ha! I’m sure you know where this story is going….The condo is now lingering on the market, and personally I doubt there is a chance in hell that it will sell, especially now that the developer is hinting at offering incentives on the new condos-how could my friend’s condo possibly compete with free strata fees for 2 years?

“So now they are stuck with making mortgage payments of $2400/month on this bloody condo (that’s right, it cost nearly $500k!). That’s a big chunk of change for any family to come up with every month, on top of the usual household expenses. I think eventually they will have to ask family for help, or sell their current home. My advice to her: SELL!!! drop the price and SELL ASAP! But I think it’s too difficult to bear thinking about taking a big loss, which they would have to get a personal loan for, adding to whatever debt they already have. So they sit and wait. And pray.

“And this unfortunately is not the first time I’ve heard a story like this. Another guy I know bought a house in the Okanagan for “investment purposes”, decided to sell shortly after…and oops, didn’t receive one offer, despite lowering the price to less than what he paid for it, of course. The thing sat vacant at a cost of $2000/month. Now I think it’s being rented for considerably less, leaving the guy with at least a few hundred dollar shortfall each month. And there are more stories just like this one..people who are losing at least a few hundred a month on rental properties. Which is ok, right, because “Real estate always goes up!” And this is just the tip of the iceberg…maybe it’s just my profession but I seem to know an awful lot of people with the same story: too much real estate, trying to sell, can’t drop the price because the mortgage will then exceed the selling price. And that’s not even mentioning the other consumer debt they have….

“So I’m not sure what kind of crowd the guy who’s on your blog today is hanging out with, but it sure isn’t anyone I know. The last family party I went to, for once not one person suggested that I’d better get in while I can-which is what it’s been for the past five years or so. Times are a’changing… Anyway, great blog, as usual, just thought I’d share!”

And this is the way it will change. One sad story at a time. Family after family discovering what was once safe is now fraught. Where there was value, now risk. Where there was quick profit, now looming loss.

Nobody likes to discover their beliefs are bogus. Denial will be everywhere for months. Sellers will need indefatigable proof buyers are shunning them before they move on prices. And once enough do, the herd will turn on a dime. We’ll then be living the USA experience.

Are you ready?

Greater Fool Komedy Korner, with Cameron Muir...

191 comments ↓

#1 Willy H on 10.14.10 at 8:19 pm

“I wonder how anyone can possibly still be thinking now is the time to buy real estate. The time has passed.”

I have been thinking the same thing for 5 years and I tried in vain to persuade the folks I work with to stay away from RE until things settle down. They looked at me like I had lost all reason. Many are immigrants to Canada who lunged at housing like Great Northern Pike to a spinning Red Devil. Now their caught and don’t even realize it. Many bought solely for investment purposes. Most of them are leveraged to the hilt.

“God help them.” Indeed.

#2 Sam on 10.14.10 at 8:28 pm

re: a previous blog entry

Barry Ritholz, fairly famous US hedge fund manager blogs about the robosigning phenomenon

http://www.ritholtz.com/blog/2010/10/why-foreclosure-fraud-is-so-dangerous-to-property-rights/

#3 Foggy on 10.14.10 at 8:42 pm

I got as far as one minute into Mr Muir’s informative BC realty update before I turned it off. It was either that or punch the screen in rage. It sickens me to see the distortions and spin from these guys. And it’s everywhere. I remember years ago the outrageous spin of Sadie Moranis in Ontario, until she was eventually silenced.

#4 Dave on 10.14.10 at 8:45 pm

I want to buy another house in the spring – it’s across the street from me. It’s an old house split into two apartments. Zoning is commercial and there is another building on the property that I would renovate and try to rent as commercial space or use as a carpentry workshop (or open a side business).

Would try to pay around $90,000. Will have around $20,000 for a downpayment saved up by that point. We still owe $35,000 on our current residence. No other debt at all.

Combined income is around $100,000 after tax. (probably drop by half in a few years as babies join us)

My reasoning is that I understand the math here – rent the house, pay the mortgage with a bit of income on the side. I am a very skilled handyman who will do virtually all required work on my own (and I enjoy doing it). The investing/finance think just gives me a headache.

Why shouldn’t I do this?

#5 Wildroseblogger on 10.14.10 at 8:56 pm

Speaking of underwater and nowhere to turn- I ran into an old high-school friend a couple months back who teaches in a remote small town in Northern Alberta. He bought a house there during peak boom in early 2008, and would like to move back closer to his family near Edmonton, the only problem is his mortgage is for much more than his house is worth now. He said he was going to have to wait until his “house was worth at least what I paid for it”. I couldn’t even meet his eyes for a minute after he said this, and I definitely didn’t have the heart to tell him it could be a decade before that happens. I just nodded sympathetically and kept my mouth shut.

#6 TaxHaven on 10.14.10 at 8:56 pm

Listening to that “Realtor”-in-Chief, I get the distinct feeling that the search for the remaining greater fools is getting more and more grubby and desperate…

#7 Jsan33 on 10.14.10 at 8:59 pm

Many people here in Canada have a “flipping” nightmare tale they could tell, unfortunately many more in this country are not aware of how detrimental to your financial health “flipping” can be. They are the ones that actually take advice from realtors or go to those “Flip Your Way To Riches” free seminars held in the local hotel.

A coworker bought a house at peak here in Edmonton 3 years ago. He actually got a relatively good deal. I say relatively good when you compared the price to the other insanely overpriced shacks in his mid to low end neighborhood. Same song and dance, the plan was to fix the house up for a quick flip than sell it and move on to another flip. To make a long painful story short he bailed on his flip and lost 80,000 dollars. That is 80K that will take him and his significant other years to recoup. He now admits it was the dumbest thing he has ever done. Another coworker picked up a house 2 years ago for a flip. After a year of “fixing it up” he admits that he will be taking a loss on it if he were to sell today.

I have no sympathy for these guys, greed and what they thought was easy money clouded their judgment and they are now joining the very large club of those who thought that a coat of paint and some hardwood floor was all you needed for a tidy profit. This only works when the bubble is inflating, it NEVER works when the inflating stops. The smartest move is to take the relatively “small” loss and bail before the loss becomes one that will wipe you out. I remember hearing on the news story after story from flippers in the US who all said they would rent their house flip out until prices bounced back. We’ll we all know how that ended.

#8 vinny on 10.14.10 at 9:00 pm

love this blog so much , never have enough of it …
keep on good work Garth!!!!
by the way we took you advice sold our house three months ago now we’re happy renting and waiting …..

#9 Timing is Everything on 10.14.10 at 9:01 pm

In Victoria is takes nine times the average income to buy a house. – Garth

That’s why they invented basement suites. ;)

http://www.victoria.ca/cityhall/departments_plnsph_hsngln_scndry.shtml

#10 Peter Pan on 10.14.10 at 9:10 pm

Cameron Muir (2010) = David Lereah (2007)

#11 BrianT on 10.14.10 at 9:11 pm

#Sam-good summary by Ritholz. IMO many are unaware of the overall picture here-Washington and Wall Street are attempting to override property law (rather successfully so far)-they are being opposed by state governments and trial attorneys. Why would Washington, Wall Street and most of the MSM portray real property fraud on a massive scale as “technical errors”? There are a few theories on this one, but IMO most honest observers can agree that this is no longer the early 1980s (when over 1000 persons were criminally prosecuted over the savings and loan frauds). It is a whole different paradigm at this point.

#12 victoria steve on 10.14.10 at 9:12 pm

You came to Vic, you spread the word across the gospel of “Money road” we listened politely as victorians do at every gig! I got your autograph and took your advice in 2007 when I sold the mansion, since then we have been real mates, in a mutually benificial financial society! You called it and some of us took care of it, Thanks was great to get your face time!

#13 Dan in Victoria on 10.14.10 at 9:19 pm

Timing is Everthing @9

Hell just make the tool shed into a house in good old Victoria, it’s diffrent here…..

http://www.timescolonist.com/business/Garden+suites+could+next+thing/3669911/story.html

Come to think of it I could make mine into a duplex……yeah, and under the back porch i could have one….
Damn trolls are noisy though.

#14 Medic on 10.14.10 at 9:20 pm

Garth called us “rabble”

#15 Cheap Hinterland Labour on 10.14.10 at 9:34 pm

A few interesting observations from Calgary:
1)Driving along Calgary’s northeast perimeter highway two nights ago, I was surprised to see so many houses in the new developments at the very edge of town, had no lights on… like none. Not even faint glow from the stove clock? I wondered ‘could all these new homes be sitting empty?’
2)An acquaintance recently complained to me that she was getting the run around from the sellers of the condo she was trying to buy, something about not ‘fessing up about the real cost of condo fees. I suggested she consider renting, since she was just moving out of the parent’s house for the first time, and it would probably be cheaper. She then explained to me that renting was just throwing money away…
3) I currently rent my town house for $300/month less than it would cost me to buy the one for sale down the street at 10/25, and 5 year rate Garth quotes.

I’m an economist, and I’ve come to accept that as a profession, we developed a pretty bad rep, for a fair number of good reasons… In the same way that my lawyer friends cringe at ambulance chasing lawyer ads on TV, I cringe at this video.

#16 Jeff Smith on 10.14.10 at 9:38 pm

>”…Or is it simply my rippling abs, the steely sixpack beneath my tie and that infectious personality?”

Has got to be it !

#17 Randman on 10.14.10 at 9:41 pm

#4 Dave

Why shouldn’t I do this?

Sighhhhhhhhh………….

#18 andrewS on 10.14.10 at 9:42 pm

And there are more stories just like this one..people who are losing at least a few hundred a month on rental properties. Which is ok, right, because “Real estate always goes up!”

I’m pretty sure this describes about 90% of investment condos in Toronto.

In other news, the number of realtor’s business cards I’m finding shoved into my mailbox is up about 4000% from 2007.

#19 Renting in Toronto on 10.14.10 at 9:43 pm

I’ve been renting in Toronto since June after selling our house of 13 years.

It is such a feeling of calm to have real estate (the cottage & RE LPs) at 20% of net worth – lower than Garth’s suggestion of 40%.

I certainly don’t want Canadian Residential Property values to decline because the impact on the economy and our collective net worth will be terrible. At least by selling I have cushioned the potential downside somewhat and set me up to be opportunistic.

I’d advise against being smug and hoping for the RE market to fall. Very few will be able to profit from such a situation. Look to the states. The knock on affects of the housing bust and multi-year melt down are devastating to the economy and the majority of Americans whether or not they have been directly affected by foreclosure.

I recommend selling to more blog dogs. I would be interested in finding out just how many of the faithful readers here have followed Garth’s advice to sell.

#20 Jeff Smith on 10.14.10 at 9:43 pm

>#1 Willy H on 10.14.10 at 8:19 pm
>like I had lost all reason. Many are immigrants to
>Canada who lunged at housing like Great Northern Pike
>to a spinning Red Devil. Now their caught and don’t even
>realize it.

Yup, or like a bass at a Rapala X-Rap . Chomp! Into the frying pan you go.

#21 Jeff Smith on 10.14.10 at 9:45 pm

>#3 Foggy on 10.14.10 at 8:42 pm
>I got as far as one minute into Mr Muir’s informative BC
>realty update before I turned it off. It was either that or
>punch the screen in rage. It sickens me to see the
>distortions and spin from these guys. And it’s
>everywhere. I remember years ago the outrageous spin
>of Sadie Moranis in Ontario, until she was eventually
>silenced.

Oh don’t forget Tom Vu, he was my childhood hero. Always wanted nice babes , nice cars and boats like he got. Wow!

#22 T.O. Bubble Boy on 10.14.10 at 9:47 pm

Apparently the RE jokers also hang out in Victoria:

http://www.prweb.com/releases/2010/10/prweb4625594.htm

A press release from the Victoria RE board, which hypes the housing market based on AUGUST data.

Funny – we already have SEPTEMBER’s data, and it was the worst September on record for Victoria!

“cautious optimism” indeed.

#23 Bill Gable on 10.14.10 at 9:55 pm

Mr. Turner, what are the chances that Canadian taxpayers will have to pony up to bail out this band of Real Estate junkies?
How much will we have to throw at CHMC?
To quote Charlie Brown – “AGH!!”.

#24 dark sad person on 10.14.10 at 9:57 pm

Before I begin today’s sermon, rabble, let me remind you how useful it is to take a gander south of us from time to time. While we’re not Americans, and this ain’t Phoenix or Dade County, even a mild case of the USA real estate crisis would be lethal to our pompous and self-absorbed middle class

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

The US should be looked at “all” the time-in fact they are a time machine for us-
By looking at their current path into economic hell-we have a chance here to counter/hedge ourselves against some of this-
I don’t think this is going to be a happy decade ahead of us-

The US is heading down the wrong path-for a sustainable economic recovery to ever have a hope-
Mostly because of corrupt/vote buying Politicians and a Fed Chairman who fancies himself as a scholar of the Great Depression-who studied the 30’s and learned zero-

And so-we will follow down the same path-because we-like the US have incompetent Political leaders who will puppet the US and-I-really want to say an incompetent BOC Gov. but-that would be wrong-
C knows exactly what’s happening-always has-
Which is why CMHC will pad the Bankers balance sheets
F&H are a pair of bungling ass hats-always were-
They will do what C tells them-period-

Our Political alternatives are even worse-if you can believe that’s even possible-
Of course-this will be labeled as doom-
Who cares–

Keep a very close eye on the south-cuz-we will miss none of it-

#25 InvestorsFriend (Shawn Allen) on 10.14.10 at 9:58 pm

It truly boggles the mind that one in 139 U.S. homes was in some kind of foreclosure action in the past 90 days alone.

11% of U.S mortages are at least 30 days behind as of Q2

http://www.federalreserve.gov/releases/chargeoff/delallnsa.htm

In Canada we have figures for 90 day delinquent mortgages taht show we were only at 0.42% in June

http://www.cba.ca/contents/files/statistics/stat_mortgage_db050_en.pdf

This Canda page should have been updated for July by around end of September but for some reason, no update yet. But there is really no reason to think the July figure will be much different that the measly 0.42%. How do all those unemployed Canadians manage to stay current on the mortgage?????

#26 InvestorsFriend (Shawn Allen) on 10.14.10 at 10:05 pm

U.S. house prices are as Garth mentions WAY down…

Meanwhile the Canadian dollar is at parity again as compared to closer to 70 cents most of the last 30 years.

For the enterprising Canadian that spells opportunity!!

Sure, there are risks.

But basically this continues to be the Golden opportunity of a lifetime for Canadians to invest in U.S. real estate.

It’s not for everyone, I prefer stocks and I don’t have the cash to invest and I don’t have time to spend winters in the South…

But if you are in the market for a U.S. winter house, now is the time to Buy.

To the brave will go the spoils.

The stupid will be slaughtered by buying a second house in Canada here near the peak.

The timid will simply watch and never do anything… (GIC anyone?)

#27 Jake on 10.14.10 at 10:08 pm

This situation will be played out over and over again. Half of the people I know bought with small down payments over the last few years (it was the thing to do for twenty somethings who could access $20K). Calgary and Edmonton are going to get creamed when all of these wannabe Donald Trumps start to go tits up.

#28 Steady Eddie on 10.14.10 at 10:09 pm

I wouldn’t worry about all those poor Canadians in debt slavery, they’ll make good peasants for their lords. Here’s a glimpse of everyone’s future….

http://www.youtube.com/watch?v=wm7D5VRfaTI

BTW Garth, F’s wielding the paddle and that’s how he’ll get all our little nickels out.

#29 Timing is Everything on 10.14.10 at 10:13 pm

Garth, What is the ‘average’ income in Victoria? and what type of house will it buy? What do you mean by ‘a house’?

Floaties are houses….Only $279k

http://www.realtor.ca/propertyDetails.aspx?propertyId=9767839&PidKey=-42765816

http://www.realtor.ca/propertyDetails.aspx?propertyId=10036394&PidKey=770509713

#30 Canada For Sale on 10.14.10 at 10:15 pm

Anyone make it to the 3:15 mark of Mr Muir’s little blurb? 70% of population growth in BC is from international immigration. We aren’t talking about people moving from AB or ON to BC… we are talking about people from other countries moving to BC and buying up Real Estate, to the point where working class Canadians can no longer afford to buy homes in their own country.

Step right up, Canada For Sale…
Long live unabated immigration!

#31 Jake on 10.14.10 at 10:17 pm

Oh yeah, anyone thinking of buying an over priced “investment” condo right now should buy a $300K Lamborghini instead. Both will be worth about $100K less in a couple of years but the buyer of the Lamborghini will have a lot more fun pissing the money away.

#32 Timing is Everything on 10.14.10 at 10:29 pm

And once enough do, the herd will turn on a dime. We’ll then be living the USA experience. – Garth

Yes, opportunities everywhere. Just like always.
Off to Puerto Morelos for a couple weeks for some cheap R&R. Love that Canuck buck. ¡Adios Amigos!

#33 totalchaos on 10.14.10 at 10:34 pm

#4 Dave

You are making the rather grand assumption that you will be able to keep the suites rented, and rented at today’s rental rates.

Vacancies have been on the increase and rents have been softening. I have a 6 suite rental building and until two years ago, I had my pick of quality renters and the building grossed 20+% more than what I had anticipated. Now, pickings for good renters are slim and I now anticipate having a suite empty for a month or two before I can find someone suitable. I am also having to re-finish hardwood floors and update appliances to entice prospective tenants. I even dropped the rent $200 for a good long term tenant who lost his job, because it would take at least 2 years to get back my cost on a new tenant, and new renters are always a crap shoot.

To be honest, I would sell the building in a heartbeat, but my sweetie thinks real estate is a safe bet – even if it drops by 10 – 15% (sweetie’s numbers, not mine) we are in it for the long haul and all will be rosie.

Don’t do it. There will always be other opportunities – this is not one of them.

#34 Kurt on 10.14.10 at 10:45 pm

#4 Dave

Have you ever been a land-lord?

If it’s not your cup of tea, forget it.

#35 Devil's Advocate on 10.14.10 at 10:45 pm

“In Victoria is takes nine times the average income to buy a house.” – Garth

“That’s why they invented basement suites.” – #9 Timing is Everything

You don’t know the half of it. That phenomena alone has significantly increased real estate prices across the province. It constantly amazes me how willing a Greater Fool will be to pay $50,000plus more for a home just because it has $2,500 worth used appliances and cupboards in an dank dark unauthorized basement suite.

This is why we need to embrace this correction which will cleans the system of such inefficiencies and corruption.

#36 The Original Dave on 10.14.10 at 10:52 pm

stampedes into asset classes don’t usually happen multiple times. The drunken obsession with real estate that we witnessed since mid 2009 to early 2010 is almost impossible to duplicate. To get the public that riled up again and emotional is tough to do a second time. Those that are obsessive cured that obsession by lining up, and buying with both fists. Prices flew upwards as a result because these obsessed buyers pushed them there. So what’s left? Home ownership is at 70% (that’s insane). In order to keep prices up for real estate in Canada, the same amount of people have to be confident that prices will hold and that it is wise to stay in the market. Listings have to stay down for the bulls to have a chance.

Last year, a lot of the buying was thin volume (if I’m not mistaken). So now that there is a little more volume of listings out there and still thin buying volume, prices come down. This is where the problem lies though. We have a lot of people that bought with 5% down. Small price declines put these people in the red. As months pass, and prices don’t increase, some of these people consider selling. As this gains momentum those that bought with 5% down and didn’t sell get worried. They too consider gettting out. Panic sets in. Prices decline. Bye bye all the self-proclaimed market experts.

#37 Junius on 10.14.10 at 10:53 pm

Garth,

Welcome to B.C. and ground zero for the housing bubble burst in Canada.

Sentiment is beginning to change around the Province. While it remains a minority opinion and swims upstream against the MSM you can hear more people saying the days of gains are over.

This is just the beginning.

#38 45north on 10.14.10 at 10:58 pm

Willy H: Many are immigrants to Canada who lunged at housing like Great Northern Pike to a spinning Red Devil. Now they’re caught and don’t even realize it.

like the man I know, but he knows it

Foggy: talking about Cameron Muir’s October Report. I watched the whole thing. Completely un-actionable (means you cannot sue him)

Dave: I want to buy another house in the spring

careful Dave

once you sign that mortgage there’s no turning back

I’ll put it to you straight: if I was your father-in-law, I’d be thinking about fixing up the spare bedroom.

#39 JM in London on 10.14.10 at 11:02 pm

Oh Cam you laughing boy you! I laughed I giggled I cried I vomited while laughing.

This has gotten fun. Seem to remember some body language basics (looking them up now…) saying the type of head bobbing he is displaying is common for those trying to tune out the content they are reading…could be just camera nerves anyway but…

As for the flipping – we had one agent dealing with one of these guys who had 2 successful and one failure under the belt (this, according to him gives him vast experience) chastising the agent. The chastising? How could a simple agent know anything about flipping without watching ALL the shows on NOT just HGTV as if TLC’s take would somehow bring “balance” to the view.

The punch line? This guy is a teacher…is anyone in the all is well camp here? When it’s this unhinged – more stories here but this seemed right for today’s topic – things are like nitroglycerin in a paint shaker with a parkinsons sufferer on the switch – no if, just when.

The new project? A “project house” for 485- 20% down and it’s basically a 1920 2600ft gut and redo. His agent pal (also a teacher now retired) has told him his sale price should easily fetch 700ish via “compareables”

Is it the pension that makes them this nuts?

Garth – this one is in your old hood here.

#40 Devil's Advocate on 10.14.10 at 11:06 pm

RE: BCREA Housing Market Update video… Ya… that’s embarrassing. :-(

#41 JM in London on 10.14.10 at 11:07 pm

If you’re wondering. Our agent tried to point out what we all are aware of but the arrogance was so strong he shrugged and did the deal. His ex wife is a teacher so no love lost I’m sure.

#42 ExExpat on 10.14.10 at 11:11 pm

#9 Timing is Everything

Sounds like a great carrot to root out unregistered suites. In the long term the City of Victoria, or at the least the Province of BC and the CRA could wind up with a good windfall on that initial grant investmant.

#43 Behavioral Finance on 10.14.10 at 11:20 pm

“One sad story at a time. Family after family discovering what was once safe is now fraught. Where there was value, now risk.”

Really, if you are looking to make a profit on anything in this world you always carry a risk. If there was no risk involved, there would be no profit. It is as simple as that.

#44 pablo on 10.14.10 at 11:35 pm

Can’t wait for your t.o. (toronto; for all u people not living near the centre of the universe-jk) I’m bringing the wife, I’m praying that after hearing the glib phrasing and facts spill off your golden tongue that she’ll finally acquiesce and agree to sell her dream home only to rent until the market bottoms out. Hopefully that ship hasn’t left the dock already…
Otherwise my dreams of retirement will be dashed and I’ll be forced to take cap in hand to the local big box malls or fast food emporiums; bowing and scrapping for the opportunity of earning the minimum wage while working as many hours as possible under a part time or casual job description; in the hopes of carrying the utilities and taxes until we can sell this beautiful suburban gta executive SFH on a premium lot.
Oh the humanity………has our god abandoned us all?

#45 Defrauded2 on 10.14.10 at 11:36 pm

I am reminded of a movie about fire-fighters, who when facing loss of a fellow rescuer, had one brave fellow reach out to save the life of another other saying “If you go, I go” … Maybe this is the reality we face with our big friend to the south, as their RE industry, along with the rest of the economy slip over the edge, “If they go…We go” They are almost beyond the point of no return, no middle class, really one to pick up the pieces. They have been lied too.

Our leaders fail to acknowledge there is a serious risks to our RE and economy talking about recovery as though it has already happened. Check out the link to an American Blog which points with facts about the RE industry, which are likely cause you to reconsider the Canadian response to our situation and remind us that we have been defrauded2.

http://www.oftwominds.com/blogoct10/foreclosure-collapse10-10.html?source=patrick.net

#46 nonplused on 10.14.10 at 11:40 pm

Nice post. I too am accumulating stories of seller distress. People who accumulated “flips” or overspent on their own house an now are having unexpected financial and marital problems. If only the world was designed to give you what you want, instead of what you deserve.

Oh well, maybe we can get the government to launch a new program to fix the world. Ha. The government cannot do anything without doing it badly, which is why wise republics limit the governments to the basics that can’t be done by anybody else, like defending the borders and in some cases law enforcement (but at the lowest level of government possible for the particular crime). The reason some things can be trusted to the government, like defending the borders, is because it’s so rare that it has to be done that it can be done very badly for most of the time, and once an actual invasion starts the military only has to hold the line long enough for the rest of society to enlist and otherwise mobilize. They also have a roll building roads and utilities in some cases because they are the only ones who can seize the land required and raise the taxes to pay for “common access property”. But they still best leave the building of said roads to private contractors, or it will cost too much, be done poorly, or never get done. Garbage collection is a good example. Here the government can do it, but it costs way more than would be the case had it be done by private companies that are not unionized and have to pay the pensions. Private companies would use a defined contribution RRSP like everyone else, rather than raising taxes 20 years into a retiree’s pensionable period to pay him for doing nothing. The unfunded liabilities here are staggering.

PS one of the reasons stocks are on the move is because most pension plans assume 8% growth or they are unfunded. Try getting that out there in Big Ben’s fantasy land. Worse, try everyone running a big pension fund trying to get that all at once. So they are buying up yield wherever they can, even in 100 year bonds now. Crazy.

THE TITLE OR NOTE THING NOW ABOUT TO SINK THE US BANKS

But on to more interesting topics. I have done a fair amount of reading on the title problem in the US and will try and break it down as succinctly as has ever been done:

There are 2 significant legal documents involved with the transfer and mortgaging of a home; the land title document, which gets registered with the government, usually the city or county, and the now famous note, which the bank keeps but it is the legal document that records the owners promise to pay or agree to foreclosure.

The land title documents are good. The owners are registered with the government as owning the house.

However, due to the Mortgage Back Securities practices of the last 10 years, the “notes”, or promises to pay, are often partially owned by several entities, and none of them have the “note”.

In theory the note could have been passed to the entity that thinks it owns it using a process similar to the way you used to be able to pass a check on by endorsing it and stating the name of the new recipient.

However, that process was not strictly administered. Actually they used a new agency called MERS to do it all electronically and the notes were never endorsed.

The banks started post hoc forging the transfer of the note to have something to show the judge. Don’t get me wrong, they probably were just trying to recreate the paper trail for the actual transfers of the notes, but they were being done after the fact, to document what was done electronically.

The judge, in most states, needs evidence that the entity attempting to seize the property is the entity that holds current title to the “promise to pay” on the part of the borrower. Otherwise who is to say the borrower every promised to pay or even borrowed anything? The whole issue is whether the house has been pledged as security for the loan. You have to prove that.

The note situation is a mess. Besides the notes they have that haven’t been transferred, many can’t be found, and others appear to not have been properly completed in the first place. Such was the rush to lend.

The banks tried to get Congress to pass a law changing the rules, which congress ever beholden to bank money passed with a cowardly voice vote. Obama, also beholden to bank money, did not veto it. But also beholden to an election next month, did not sign it into law, the proverbial “pocket veto”. Not sure where the name comes from. Maybe it means he shoved the bill into his pocket for later.

The banks, in reaction to the pocket veto, suspended foreclosures. Don’t mistake this as being magnanimous, it was for a reason and intentional.

In the first, they know they cannot produce the note to satisfaction without the new law.

In the second, they know that Fannie and Freddie (who owe the Chinese a lot) will be the ones who go down first, as well as a bunch of government sponsored pension plans, as that is who holds the notes, only can’t produce them.

The banks are not being diligent and crossing the t’s and dotting the i’s with this move. They are playing hard ball. This is the message: “Do what we want, or we will sink Fannie, Freddie, the financial system, and piss off the Chinese. Oh and property law will suffer greatly as well.”

Now why is this a problem?

First, the banks can’t foreclose.

But even a bigger problem? It means all mortgage payers should stop paying their mortgage because they cannot know the proper owner of the money is actually receiving it. They should be putting it in trust. They are by no means relieved of their mortgage just because they don’t know who to pay, but if the bank doesn’t know who to pay how can they be sure the proper entity is getting the money? They should be putting it aside in trust.

But to further complicate things, some defaulting homeowners are using the confusion to resist foreclosure with a “no deed, no money, and no foreclosure” attitude. The basic reasoning being “if you can’t produce the note, then I don’t own any money on my house any more and I won’t pay.” This of course is silly and will be dealt with in time. You owe the money, you just don’t know to whom. You will find out. If you borrowed the money, you have to pay it back even if the banking system can’t for the life of them figure out who they sold the debt to. But it’s going to take a while to figure it out.

Many homeowners now figure that they have been relieved of their mortgage debt and cannot be foreclosed on. That won’t be the case long term.

Wow, that wasn’t short. Any questions?

#47 Aaron - Melbourne on 10.14.10 at 11:40 pm

Hi from Melbourne Australia,
I’ve been lurking here for a few weeks and conclude that the situation in Canada is pretty much the same as Australia. Moreso Vancouver = Melbourne/Sydney in terms of unaffordability.

World over, its the exact same rhetoric being peddled to the sheeple. I take solace in the knowledge there are those out there prepared to think for themselves and that not everyone is going to get wiped out by the debt apocolypse, whatever your preferred preventative strategy is.

A few n00b questions:

Do Canadian speculators benefit from “negative gearing” – using rental losses to reduce taxable income – as is the case in Australia?

Can you guys claim mortgage interest payments? (Aussies do not have this)

Are there other peverse investment incentives at play in your bubble market? Stamp duty concessions? First Home Buyer grants?

Garth I would love to think once the bubble has done its thing, you might like to consider heading down under for a sell-out lecture series.

Or at least do a blog entry on the comparisons of Canada and Australia. I get the feeling you guys are only marginally ahead of us in terms of the melt.

Thank you

#48 Alan on 10.14.10 at 11:40 pm

I was recently in Rome, Italy. The average price for a condo within 15 kms of the center of Rome is 1.5 million Euros. Italians are perplexed trying to understand for the last few years who would be buying these condo/apartments as the average Italian could never afford to pay these prices.

In reality, the real estate prices in Rome have never declined, regardless of the economy and Italy has had many economic setbacks including today’s sky rocketing soveriegn debt.

Please explain the unexplainable.

#49 Debt's Dark Embrace on 10.14.10 at 11:54 pm

I watch Global News from Vancouver every day for my daily news fix. I swear that 2 or 3 times a week on Global I hear that Vancouver and/or BC was voted the best place in the world to live by so and so or by such and such. It seems like I’ve been hearing that same tune for the last 5 or 6 years now. It’s like a long slow continuous brainwashing that goes on and on and never ends. And there is very often a “real estate pumper” or mortgage broker or a “real estate is going up” story on the news program. No wonder Vancouverites and BC’ers are so Phucked up about real estate. The real estate pumping just never ends, even on the “news”.

#50 Patz on 10.14.10 at 11:55 pm

An estimated 4 million families have stopped making their mortgage payments but they haven’t stopped buying stuff—for now. (By ‘stuff’ I don’t mean necessities.) Wonder if that shows up in retail stats?

Cameron Muir is such a stuffed shirt/horse’s patootie I could only bear to watch a couple of minutes even for comedy value.

Things are veeeeeeeerrry rickety right now! (Rickety is a technical term we economists use occasionally when things are… well, rickety.)

#51 Essentials on 10.14.10 at 11:59 pm

Dear Garth,
Thanks so much for your talk in YYJ last night. We were the snuggled up middle aged couple to your far right, near the stage.
I brought my copy of Money Road but was too damn tired to ask you to sign it at the end of your talk. Why, you ask? Days earlier I was at my divorce mediation in which I have instructed my lawyer to ask for my share of the matrimonial home in a buyout. My ex husband has it in his head that keeping the house means he won the war. It’s an exhausting process dealing with a vengeful bully.
The day of your talk I had been crawling around on my hands and knees shop vac’ing garbage in a bedroom, helping my highschool sweetheart clean up his formerly beautiful 4000 sq foot home that his ex wife has turned into a dump over the past year and a half. Furthermore, before she abandoned the residence she wasnt paying the mortgage in spite of spousal/child support and it’s waaaay in foreclosure, bailiff arrives at his former home on December 24th to lock it up and kick out the basement suite tenant.
In three weeks we have busted ass to clean up the mess and get it ready for sale in the slim hopes of him walking away with any of the equity.
Divorce, it’s ugly. Divorce on the precipice of a real estate meltdown is like a poker game. We keep hoping we can both exit our respective marriages with cash; they can each have all the STUFF!
Thank you for your talk, amusing photo’s and for giving us some ideas of how to pull out of our financial nosedive! We have a plan to move ahead -each of us seeking liquidity, diversification and tax smart strategies. 40 is the new 30 right? We have time to build a nestegg, protect what we have accumulated thus far and hopefully wind up as two withered old farts who enjoy warm tropical vacations and live within their means whilst at home in Lotus Land.
Thank you!
~ W.N. and R. T.

#52 wetcoaster on 10.15.10 at 12:20 am

There’s more suite slumlords in Victoria per capita than anywhere else. They’ve destroyed the rental market for average houses in the $2000 range. Now they want $2000 plus for just the main floors in sketchy neighborhoods.

Can’t wait til the crash and no one wants to rent these dives off these scumbags. Not sure who these fools are and how they can even afford that much for a main floor on Victoria wages.

#53 Nostradamus Le Mad Vlad on 10.15.10 at 12:20 am


And we thought we’re nutters!

“. . . simply my rippling abs, the steely sixpack beneath my tie and that infectious personality?”

Ooohhh aahhhhh — Steely abs with a rippling sixpack! Drooling over yer chunky abs!

How many greater fools were in the audience tonight? Guess there are a few.

“. . . while opportunity lies elsewhere.” — Lots of opportunities all over, except I don’t have the spare cash to park it anywhere. Maybe our ship will come in some day, maybe not.

“. . . the ragamuffin band of spear-brandishing contrarians who come here to whiz on authority. God help them.”

That’s the best description of us renegade bunch of yahoos I’ve ever seen — nice one!
*
Shows size and fiscal clout of individual states compared to TROTW.

5:07 clip Silver rising to US$1K?

10:08 clip HAARP in all its descriptive glory.

Wall Street’s “Let Them Eat Cake” moment. No mention of the people who were foreclosed on that did not even HAVE mortgages!” wrh.com. Plus — 90% Vacancy rate.

Will be interesting if churches lose their tax status. Cities need money, not prayers to run!

Timmy’s trying to pass the buck to someone else (Dilbert’s pointy-haired boss?) for the fiscal woes. Or a tub of lard.

TBL — “It has been known for a long time that the price of gold is set by the Rothschild Banking interests in the “City of London. In the coming days look for 90% devaluation of the dollar and a total collapse of the stock and bond markets.”. Seems there was a conspiracy re: price fixing.

#54 AxeHead on 10.15.10 at 12:24 am

Cameron Muir – cheif comedian for BCREA.

I had a hard time finding the humour in his presentation…all I saw and heard was bullstools with beautiful twinkling piano in the background, all calm and serene WHILE THE FREAKING HOUSE OF CARDS IS A TOWERING INFERNO. Excuse me while I gag.

#55 wetcoaster on 10.15.10 at 12:33 am

Cameron Muir,our clown prince of spin, will go down in history as did Greenspan, Learah etc. The Global TV’s, the CKNW real estate ho’s can’t stop a Titanic from hitting the iceberg. They are clueless to international economics and the effects of any Asian market correction which eventually will happen.

It’s truly scary and disgusting how bad this ho is pumping his BS making predictions two full quarters out without one solid economic fact behind it.

#56 Reg on 10.15.10 at 12:45 am

I don’t feel a tad bit sorry when I hear stories like this. These people flipping houses is part of what caused this mess of unafordable prices. I hope they all lose their shirts.

If people treated real estate as a home instead of a easy money scheme then we would all be better off and have more in our pockets.

#57 pez on 10.15.10 at 12:53 am

#48 –your handle, “debts dark embrace” just oozes sunshine and optimism- have you been to Vancouver?
do you really think that we are all just zombies, being deluded by pumpers that this is a lovely city? Guys, this is crazy.. i dont believe a word said by sleezeball real estate pumpers, but i agree that it is a fabulous place to live.

Sorry, guys, I want the market to fall apart as much as all of you do. However, do you feel it? the tiny bit of fun we had that this thing was ending is over…prices are up, inventory is down…your housing armagedon isnt going to happen…..so stop dwelling on it…

and once again, quit using millenium “olympic” condos as an example to fuel your silly little camp fire…millenium is a bust because Vancouver’s brilliant, left wing city council thought that people, spending $1000 per square foot would be interested in sharing their space with welfare losers subsidized housing crammed in as neighbours……as if? get rid of the notion that welfare scammers will not be riffling through your garbage and shaking you down for change outside your $3 million dollar penthouse and the place will sell…

that is the sole reason millenium is stalled, not a housing crash…propaganda stories are so 1940’s…report the reality Garth

luv
pez

#58 Gord In Vancouver on 10.15.10 at 1:01 am

Greater Fool Komedy Korner, with Cameron Muir…

What’s scary is that this guy is moderate compared to other BC real estate bulls. Cameron blew it this time by hinting that rich Asians/other foreigners will support BC’s market (around 3:10).

#59 Timing is Everything on 10.15.10 at 1:13 am

#13 Dan in Victoria

Crazy…The first house I bought in Victoria was in ’91.
Everyone said we were crazy…11.5% interest rate and house prices 2.5 times higher than Regina. Ha!
First thing we did was convert the attached ‘work shop’
to a one bed suite. Swan Lake area. Anyway, $5000
investment, bringing $500/month back in ’91. You know, UVIC students etc. No contract, they had a choice, the cash price or the cheque price (a few dollars more!) Everyone chose the cash price (go figure)….
As soon as we moved here, from Saskabush in ’89 (29 years old) we knew it was different here. But the locals didn’t. We knew we would be retiring here.
Great place….And the timing was perfect.
1990 seems so long ago. What a difference from today!
Ha! I don’t give a rats what the world is doing….Opportunities abound. Who in their right mind would get a mortgage when interest rates are 11.5%?
We would.

#60 Mister Obvious on 10.15.10 at 1:15 am

Occasionally on this blog I hear the sentiment expressed that one should not hope for a Canadian real estate calamity since such a realization would usher in a new and most unpleasant world. True though that may be true, what one individual does or does not ‘hope for’ has not the slightest bearing on what actually will be. The roulette player who wishes with all his might for red is still subject to the cold laws of probability. The ball will land on red if its going to land on red, otherwise, it wont. One’s ‘desires’ simply don’t factor into the outcome. To think otherwise is to be subject to the ‘gambler’s fallacy’.

So relax, shed the guilt trip and wish for whatever your heart fancies, since it matters not. Garth has summarized countless times what is ‘very probable’(but not absolutely certain) in the years ahead. He backs this up with some rather convincing arguments, if one cares to exercise an open minded analysis. Its not much different than predicting the probable outcomes on a roulette wheel.

#61 Taxpayer like everyone else on 10.15.10 at 1:20 am

45 Non-plused – Yes, it was a little long, but I think the last three paras sum it up nicely.

#62 Thetruth on 10.15.10 at 1:25 am

Looks like RE agents won this war against the competition bureau…

http://www.theglobeandmail.com/report-on-business/economy/housing/realtors-keep-grip-on-mls-in-deal-with-feds/article1757879/

Main points:

Only thing that consumers won is the right of the seller to list on mls. However, they can’t list their contact info so potential buyers still have to go through agents to contact the buyer.

And, sellers still have to pay the buyer’s agent. The MLS system remains closed to Realtors.

This is a 10 year agreement. thoughts?

#63 DW on 10.15.10 at 1:28 am

I was taking a ride on one of the B.C ferries up the coast and got talking to a couple visiting from Switzerland, who were thinking of buying some real estate. They were very surprized at how expensive properties were and thought they would just enjoy the scenery for now and wait until prices fall.

Goes to show that even folk from europe are not easily suckered into the RE scam.

#64 Thetruth on 10.15.10 at 2:00 am

#48 Alan

You have a valid point.

I’m of the view that RE prices will stay more or less flat in the cities of Vancouver and Toronto. Other places in Canada will go down in value as the demand isn’t there to justify past price increases.

Reason being is the global influx of people. Toronto and vancouver receive 260,000 people a year. More than the rest of canada combined.

For the naysayers, look at Australia. 5% bank rate (6-7% mortgage rates) for 8 months and still no crash. Why? because of their global influx.

Also, like I’ve said for the last year or so…inflation is coming Dec 2011. The ARM resets in the US will be complete at this time and the FED will unleash inflation (It’ll take about 12 months for QE2 to move throught the system). Homeowners there will have refinanced at low rates for 15 or 30 years. Their debts will be inflated away…so SMART MONEY is in assets (commods)

In Canada, what do we have in store…

2.99% 5 year fixed rates coming soon?? Or 3.8% –15 year mortgages courtesy of the Bank of Canada with their own QE and helpng them keep our dollar “pegged” to the US greenback ??

You never know…

#65 Jeff Smith on 10.15.10 at 2:03 am

>#48 Alan on 10.14.10 at 11:40 pm
>I was recently in Rome, Italy. The average price for a
>condo within 15 kms of the center of Rome is 1.5 million
>Euros. Italians are perplexed trying to understand for
>the last few years who would be buying these
>condo/apartments as the average Italian could never
>afford to pay these prices.
>In reality, the real estate prices in Rome have never
>declined, regardless of the economy and Italy has had
>many economic setbacks including today’s sky
>rocketing soveriegn debt.
>Please explain the unexplainable.

Probably the Chinese, I heard they are buying up Vancouver.
.

#66 gold bugger on 10.15.10 at 2:15 am

“There’s more suite slumlords in Victoria per capita than anywhere else. They’ve destroyed the rental market for average houses in the $2000 range. Now they want $2000 plus for just the main floors in sketchy neighborhoods.”

You saw that place on Constance, too?

#67 Jody on 10.15.10 at 3:52 am

Can’t help but notice here in Cowtown that a lot of the people running for city council happen to be real estate agents, God help us all. Like I want a realtard running a billion dollar corporation. Just waiting for the morons in this city to elect Barb Higgins as mayor, most educated city in Canada my ass. People here are in denial about real estate going down, most think it’s a great time to buy, I know a coulple who just bought a house to flip, they are sure prices will go up at least 10% by spring 2011. Just waiting to see if property taxes go up by 10 or 20 percent, depends which socialist tossers gets elected.

#68 20% er on 10.15.10 at 6:23 am

…and the US experience is not over!

According to Gary Shilling, US housing prices could fall another 20%

http://www.planbeconomics.com/2010/10/14/housing-could-drop-another-20/

#69 Carol on 10.15.10 at 6:43 am

Garth,

I know someone who is renting in Vancouver and wants to buy a place there. I re-directed her to your website and told her to read it carefully. This is her response (*shakes head in disbelief*):

“Buying a home in Vancouver is the best idea ever. The prices can never go down. I can’t see it depreciate anywhere. That is why we want to get a place.”

You should leave her a message so I can forward it to her – lol.

Love the website, read it every day and agree with you in everything. Sold my condo (in Toronto) in May of 2010 and am very pleased that I did it.

Take care!

#70 TGS on 10.15.10 at 7:04 am

The fundamental lesson when watching the Muir video is very simple….understand the vested interest of the presenter. ANYTHING coming out of real estate boards will be spun to try and create an advantage for the industry. Just like ANYTHING coming out of a Conservative mouth is designed to hide the truth about the impact of government policy (e.g. Flaherty crows about ‘fixing’ the mortgage problem by changing the 40/0 mortgages to 35/5…no mention that it was the idiot decision of the Conservatives to create 40/0 mortgages in the first place).

Canadians are basically uninformed, gullible bumpkins and the proof of this is staring us in the face….a housing bubble staring us in the face….and an idiot Conservative government still in power.

#71 Aussie Roy on 10.15.10 at 7:15 am

Aussie Update

http://www.smh.com.au/opinion/society-and-culture/housing-bubble-toil-and-trouble-is-a-witches-brew-of-discontent-20101014-16lpr.html?autostart=0

http://www.wabusinessnews.com.au/en-story/1/84293/WA-house-prices-fall-4-in-Sept-quarter

http://www.theadvocate.com.au/news/local/news/general/real-estate-industry-falls-on-hard-times/1969433.aspx

http://www.heraldsun.com.au/entertainment/confidential/billion-dollar-property-price-boom/story-e6frf96o-1225938863960

http://www.smh.com.au/business/safe-as-houses-not-in-these-hard-times-20101014-16lvt.html

http://www.theage.com.au/business/land-sales-fell-36-in-june-quarter-hia-20101014-16kxu.html

Appears the RE headlines haven’t changed while I was in Asia.

#72 Moneta on 10.15.10 at 7:26 am

BrianT:

In a bubble, there are not enough experienced people to do a good job. On the upside and on the downside.

On one hand you have the bailouts and QE, basically trying to manage the thing. On the other hand, you have those who want US leaders to quickly pull off the band-aid.

The reality is that everyone wants to get this mess cleaned up ASAP. But there are not quality people (i.e. lawyers, judges, couts…) to get the job done in the time frame people want.

When you go fast, you cut corners and cheats prosper.

They say they can’t spot a bubble but they are wrong. There are dozens of tools to spot them. One of them is when you have to train people for a specialized job when you only have 3-5 years of work for them.

#73 BrianT on 10.15.10 at 7:28 am

#21Jeff-I remember Tom Vu-I wonder how many Canadian kids formed their first image of success from seeing Tom and his huge yacht filled with gorgeous babes in bikinis lounging around waiting to be summoned by Tom. Tom should be in charge of Cdn lotto commercials or a new Freedom 55 campaign.

#74 Moneta on 10.15.10 at 7:37 am

One of them is when you have to train people for a specialized job when you only have 3-5 years of work for them.
———
I should have added…

when you need to train millions of people for a specialized job but you only have 3-5 years of work for them so you hire anyone with a pulse and forgo the training in the name of short term profits.

#75 BrianT on 10.15.10 at 7:40 am

#60Mister-surprisingly, most people do not understand this simple reality. This is where the term “doomer” comes from-anyone who voices the opinion of a perceived negative outcome is hoping for it, as they are basically negative. You hear stupid slogans like “don’t bet against the USA” as if huge fortunes aren’t being made pretty well exactly that way.

#76 Moneta on 10.15.10 at 8:08 am

Really, if you are looking to make a profit on anything in this world you always carry a risk. If there was no risk involved, there would be no profit. It is as simple as that.
———–
Around 1998 (Asian crisis I think), my friend was quite upset. She had bought funds invested in foreign equity and lost money. She could not understadn how she could lose money when the broker told her high risk/high return.

I tried to explain that high risk/high return would be let’s say 10% of the time. And high risk/low returm would be 90%. She could not get it. Then I tried to explain that if she was sure 100% of getting that return, it would mean there was no risk. And if there was no risk, that would mean a return closer to a T-Bill.

Anyway, they lost money in 2000 and decided to put all their money in a McMansion in 2003. They did win the lottery (no joke!) in 2004.

Anyway, stats show that most lottery winners run out of money within a few short years. We’ll see if they can beat the odds and understand the high risk/high reward concept.

#77 jman on 10.15.10 at 8:27 am

Last I heard, many years ago, Tom Vu was doing prison time in the US.

#78 fancy_pants on 10.15.10 at 8:29 am

The BoC is now in a tricky situation.

If they continue to increase rates then our dollar and trade deficit both increase. The negative fallout is job losses as the jobs chase down cheaper labour elsewhere. The problem is the USA has no desire to increase rates. They want their RE values to climb. And we are kind of joined at the hip as trading partners. So the BoC is sort of stuck in this regard. They probably want to increase the key lending rate but they really have their hands tied.

So the US real estate crash came and rates were lowered. Canada followed suit on the rates but in absence of any RE crash here. And a bubble was formed in the midst of a recession and it came to light for the BoC last summer. Rates were raised three consecutive times to try and ease this monster back under the covers and RE has begun to cool (whether due to rate hikes, fulfilled lust for homes or combination).

So now I will pull out my crystal ball. I’ll bet they would like to raise rates again next Tuesday but not sure they really can. What a pickle.

The reason this won’t end well up here is the greed was left unchecked too long. Leave sinful nature unchecked it will find a way to fulfill itself – in this case cheap debt spent on house porn. I suspect we have a ways to go before this house of cards falls … wait, that may have just been a piece of mac & cheese on my crystal ball. Well, maybe not. I expect low rates for a while yet, at least until our giant brother to the south sets their wheels in motion. And since the wheels aint moving yet no need to buckle up.

What CMHC should have done in conjunction with the give away rates is increase mortgage requirements. At least then they could have kept the greed factor more in check. But no, they had to make the already almost free money even easier to obtain.

Never underestimate the power of greed.

…but also don’t forget, the power of fear is never far behind.

#79 lonely limey on 10.15.10 at 8:30 am

An example of what can happen in 2 short years. From Euros 525,000 to 190,000. What on earth was she thinking? A great view of an industrial car park included.

http://tinyurl.com/38vsubq

#80 jman on 10.15.10 at 8:34 am

Re Tom Vu…no evidence of charges or prison. He is now a professional poker player living Vegas. I checked the web so ignore my previous post.

#81 infernalmachine on 10.15.10 at 8:40 am

then we see things like this beauty from today’s G&M (usually the sales are a couple of months old, but still…)

This is one of those new “city place” condos by Concord Adex down (nearly) on the Gardiner in Toronto. Small and rushedly built.


10 Navy Wharf Crt., No. 106, Toronto

ASKING PRICE: $369,800

SELLING PRICE: $327,000

PREVIOUS SELLING PRICE: $260,000 (2007); $162,519 (2005)

TAXES: $1,776 (2010)

DAYS ON THE MARKET: 27

Why the humongous increase (doubling) in price since 2005? Apparently they bought a nicer laundry machine, and installed engineered hardwood.

$162K is a perfectly fair price for a 1+den on the ground floor in that location at that size. Even $200K is reasonable (the $162K was probably pre-sale pricing and thus discounted as an incentive).

But $327K? For 600 square feet of noisy, dark, 1st floor shoddy building? And doubling in price in 5 years?

Forget real estate.

By the way Garth, are you still sending out info on financial advisors? I have a squirrel-stash of cash to convert into something that isn’t earning 1%.

#82 BrianT on 10.15.10 at 8:41 am

#71Moneta-you couldn’t be more wrong on this one. Actions have consequences, and without any negative consequences you will not be able to control financial fraud-in fact, it will grow larger and more bold continuously. Your mantra that white collar crime isn’t really crime, it is oversight mistakes, technical errors, etc. etc. etc. leads to very serious problems eventually for the society at large. This particular situation is very similar (but a lot more fraudulent) to you using a real estate attorney-he bills you for title search, etc. yet does none of the work at all-usually everything is OK anyway and he is very busy and doesn’t have time this week. When a problem does arise his excuse is the heavy case load.

#83 grantmi on 10.15.10 at 8:43 am

#3 Foggy on 10.14.10 at 8:42 pm

I got as far as one minute into Mr Muir’s informative BC realty update before I turned it off.

Funny! So did I!! lol

#84 bruce corell on 10.15.10 at 8:43 am

Does anyone out there realize that more agents have left in the past 3 months than in the early 90 s.
The sales decrease takes 3-4 months before price tumble. October is month 4. What we will see in the next 30 to 60 days will stun many. Nov 1st will bring 10% decrease. The bubble hits us on October 29th. Any investor still in after 3rd week of October will e clobbered.
Scotiabank has already warned their investors…..

#85 Devil's Advocate on 10.15.10 at 8:45 am

”The fundamental lesson when watching the Muir video is very simple….understand the vested interest of the presenter. ANYTHING coming out of real estate boards will be spun to try and create an advantage for the industry.” – #69 TGS

Please enlighten me on exactly how the real estate industry benefits by what you call spin. How possibly could the real estate industry benefit by prices rising beyond affordability that no one could afford to buy property and thus sales came to a grinding halt? It just doesn’t make sense. How can you not understand that the real estate industry would far rather housing was affordable to ALL. If everyone could confidently afford to buy a property sales volumes would increase and well offset the insignificantly lesser income to be made by selling each one.

Really, while speaking of “Greater Fools” it baffles me how the average Blog DAWG is too thick to grasp this very simple concept.

#86 prairie gal on 10.15.10 at 8:47 am

#19 Renting in Toronto wrote:
I’ve been renting in Toronto since June after selling our house of 13 years.

It is such a feeling of calm to have real estate (the cottage & RE LPs) at 20% of net worth – lower than Garth’s suggestion of 40%.

I certainly don’t want Canadian Residential Property values to decline because the impact on the economy and our collective net worth will be terrible. At least by selling I have cushioned the potential downside somewhat and set me up to be opportunistic.
___________

Actually, I seriously doubt the economy as a whole will suffer very much when real estate values drop. Aside from housing starts, real estate does not add any true wealth to the economy – it just diverts money from other types of investments/expenditures.

The wealth effect is overstated. Lower home prices mean more people will be able to boy a home and take holidays, buy food, clothes and go out for dinner. Rising home prices only meant that the real estate sector expanded at the expense of other parts of the economy.

#87 grantmi on 10.15.10 at 8:58 am

#9 Timing is Everything on 10.14.10 at 9:01 pm

In Victoria is takes nine times the average income to buy a house. – Garth

That’s why they invented basement suites. ;)

Love it! Subsidized grants for home owners to build a basement suite in their home.. which drives the rental prices down even further. LOVE IT!!

Thank you city of Victoria. I LOVE YOU! (I’ll be asking my landlord for a cut in my rent!!)

#88 T.O. Bubble Boy on 10.15.10 at 9:07 am

Ridiculous:

http://www.financialpost.com/news/Home+sales+prices+September/3676683/story.html

CREA: “Home sales, prices up in September”

You’d think that this meant up from say September 2009? Well, look through the entire article, and there are no mentions of year-over-year comparisons!

The most ridiculous part of this press release: average prices have gone up EVERY SEPTEMBER! (even in 2008, when the financial crisis was hitting)

This article is the equivalent of saying “Pumpkin sales increase in October from September”!

#89 Antonio on 10.15.10 at 9:09 am

http://creanews.ca/

Things still not as bad as we are assuming. Show me a year over year price decline and then I will believe. Also note inventory is on the way down.

#90 Devil's Advocate on 10.15.10 at 9:13 am

#62 Thetruth:

Surprise, Surprise… Really people what did you expect? The MLS is a privately owned system created to enhance and facilitate the co-operation between brokers. The system was not designed for you it was designed by and for those co-operating brokerages to better be able to do the job of selling your property. In that it was created for you the customer just as any other business model ultimately must benefit the customer but there is a cost the customer must bear for that additional benefit.

When you list your house with an agent that agent employs a sales force of thousands. The MLS is the internal industry catalogue. If you want to post your own wares on it you must offer those who use it some motivation to sell it otherwise it’s just going to sit there unshown and unseen. Think of it as you acting as your own little real estate company with just one listing – yours. You must compete with all those other participants in that system. HENCE – COMPETITION IS ALIVE, THRIVES AND IS WELL IN THE MLS SYSTEM. Do you get it now? No? I thought probably not.

MLS.ca is not the MLS it is nothing more than a limited access public portal to the MLS database which co-operating competitive brokerages share to promote their wares to one another. Get it now? No? Lets move on…

Now, if more agents and buyers would take the time to understand and embrace the concept of “Exclusive Buyer Agency” For Sale by Owners would enjoy a huge increase in their sales opportunities. But if you have difficulty getting your head around the good intent of the MLS that of “Exclusive Buyer Agency” would fry your brain.

#91 Jeff Smith on 10.15.10 at 9:14 am

>#23 Bill Gable on 10.14.10 at 9:55 pm
>Mr. Turner, what are the chances that Canadian
>taxpayers will have to pony up to bail out this band of
>Real Estate junkies?
>How much will we have to throw at CHMC?
>To quote Charlie Brown – “AGH!!”.

Don’t laugh, the consequence for Canada is serious. Think Greece! Once a certain point is reached, the country might not be able to service it’s obligations.

#92 Moneta on 10.15.10 at 9:19 am

71Moneta-you couldn’t be more wrong on this one. Actions have consequences, and without any negative consequences you will not be able to control financial fraud
———-
Excuse me but I must have missed something. Where did I say that white collar crime was not a crime?

I said that going too fast ensures fraud. On the upside and on the downside.

You must be answering to someone else’s comment.

#93 t on 10.15.10 at 9:25 am

My girlfriend still thinks Guelph is different. That there will always be people escaping from the GTA to keep house prices high. Guelph does have the university, lots of gov’t employees, a research park, and Sleeman’s brewery, but mfg. has been hammered in the past years.
Asking prices do not seem to be dropping in Guelph.
http://www.realtor.ca/propertyDetails.aspx?propertyId=9956148&PidKey=-1482898587
Is Guelph different?

#94 Jeff Smith on 10.15.10 at 9:29 am

>#79 jman on 10.15.10 at 8:34 am
>Re Tom Vu…no evidence of charges or prison. He is now
>a professional poker player living Vegas. I checked the
>web so ignore my previous post.

Actually I did remember he was sued for fraud by people who fell for his ‘seminars’. Don’t remember what the outcome was. His TV shows was entertaining to watch; tons of babes, nice boats, rolls royce, mansions.

#95 Tripp on 10.15.10 at 9:31 am

Another reason for many people being so eager to own a property is the lack of affordable and nice places to rent.

In Ottawa, for $1,200/month you can find a 2 BR in a nondescript 30-year-old high-rise with squeaky parquet, 1” x 1” ceramic tile, MDF kitchen (same age as the building) and countless layers of latex revealing the place’s history like a dendrochronology thesis.
This situation is significantly different from say, Europe (the other place that I know well) where many people don’t even consider owning. The social pressure is non-existent; one will never be a “lesser man” for not owning a house. Buying an apartment in Montmartre or around Kurfürstendamm is prohibitive for most people, however the rents are (or they used to be) reasonable. Asking anybody living there (or in many other European cities) would reveal a great deal of satisfaction with his or her quality of life, even in a small apartment and without owning a car. Many people would never consider moving.

When we will have livable neighbourhoods, with easy access to transit, shops and schools within walking distance, parks and bicycle paths the desire to move to the ‘burbs will decrease.

#96 Jeff Smith on 10.15.10 at 9:33 am

>#80 infernalmachine on 10.15.10 at 8:40 am
>—
>10 Navy Wharf Crt., No. 106, Toronto
>ASKING PRICE: $369,800
>SELLING PRICE: $327,000
>PREVIOUS SELLING PRICE: $260,000 (2007); $162,519 (2005)

Imagine the person’s face who bought at $327000 three to four years from now.

#97 pjwlk on 10.15.10 at 9:39 am

A co-worker told me this morning that his neighbour just sold their Oakville (ON) townhouse in the Third line/Dundas area in one week. Bought in 2005 for $265k, listed a couple of weeks ago for $409k, sold for around $400k! Seems like there’s no real shortage of greater fools just yet…

#98 Debt Free in the U.S. on 10.15.10 at 9:39 am

OOPS!!! Somebody hit the handle. The toilet begins its “swirl” before shunting its contents through the pipes on the way to the drain field, or municipal sewer.

Canada has just Begun its swirl action, while I and my neighbors here have seen the devastation that decreasing home prices bring. AND the fallout is excruciating on jobs, demand for all types of goods, and services have just vanished!!!

Our fearless Fed Chairman Ben “helicopter Ben” Bernanke will again start throwing money out of helicopters to increase inflation. Good luck with that one, Ben as people will begin to flee the dollar, (or Loonie), in search of a storehouse of real value, could be gold, or that transport of refined Gas would be preferrable to me.

For heavens sake sell that dump NOW while it still has decent value, and get out, or get caught in the swirlie action of the fiscal toilet.

Later, you can get house porn when prices are down 15-60% like they are in many places in the United Snakes. After all, its only a place to take a dump, and sleep in the final analysis, NOT an investment if you are going to live in it, right. Gotta live somewhere, make it as cheap as you can.

Of course, if you were smart, and paid off your mortgage, you might just want to sit, and grin at the stupidity. Hee, Hee.

#99 dark sad person on 10.15.10 at 10:09 am

#77 fancy_pants on 10.15.10 at 8:29 am

The BoC is now in a tricky situation.

If they continue to increase rates then our dollar and trade deficit both increase. The negative fallout is job losses as the jobs chase down cheaper labour elsewhere. The problem is the USA has no desire to increase rates. They want their RE values to climb. And we are kind of joined at the hip as trading partners. So the BoC is sort of stuck in this regard. They probably want to increase the key lending rate but they really have their hands tied.

So the US real estate crash came and rates were lowered. Canada followed suit on the rates but in absence of any RE crash here. And a bubble was formed in the midst of a recession and it came to light for the BoC last summer. Rates were raised three consecutive times to try and ease this monster back under the covers and RE has begun to cool (whether due to rate hikes, fulfilled lust for homes or combination).

So now I will pull out my crystal ball. I’ll bet they would like to raise rates again next Tuesday but not sure they really can. What a pickle.

The reason this won’t end well up here is the greed was left unchecked too long. Leave sinful nature unchecked it will find a way to fulfill itself –

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

The problem is-no one knows for sure where rates should be set-except the market itself-
The problem is as always-the quantity of money issued-when rates are set by Politicians/Central Banks-
Because in spite of all their BS efforts to manage an economy-all they succeed in doing is blowing bubbles-
Easy credit/money will always find a home-
(no pun intended)
They have no clue where rates should be set-because they base their rate settings on skewed data-such as the CPI-which does not include house or food prices-
Which if those two were included-would have shown that “Price Inflation” was clearly out of hand in 2001 and rates should have been hiked at that point-to close off the credit flow-
Instead-they lowered rates and kept them low-all the while pointing to CPI and giving the usual spiel of “benign Price Inflation” which was clearly BS-
All they had to do was look at the long Bond-which pointed out in no uncertain terms-that a bubble was forming-Gold of course saw it as well-but-we can’t discuss that here-because all the misinformed people go strange-at the mere mention of the word-

So-the twin fools-H-F- are totally lost with their efforts of trying to micro manage the economy-
They have no clue where rates should be-
Who knows where rates should be set for sure?
The Market knows-

C-knows the Market knows-

note–2001

http://research.stlouisfed.org/fred2/series/DTP30A28

http://www.barchart.com/chart.php?sym=GCZ10&style=technical&p=MN&d=X&sd=&ed=&size=M&log=0&t=CANDLE&v=1&g=1&evnt=1&late=1&o1=&o2=&o3=&x=59&y=6&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=#jump

#100 AxeHead on 10.15.10 at 10:15 am

#84 DA…You show your bias and blindness in your response to TGS. What cheif comedian Muir demonstrates well is his MOTIVE. i.e. to make profit off the backs of home owners at any cost – through blind speculation with no factual support in an environment where caution and advice to wait should be encouraged. DA, you and Muir are cut from the same cloth, RE toilet paper, and are full of shit.

#101 Pete on 10.15.10 at 10:16 am

You see it on facebook where people thought I can buy it and flip it for more money only to see now there are no more suckers left. People are in great financial trouble and the house of cards is set to crash and crash hard. People now have to pick their own poison and choose if they want to lose Thousands in one shot or lose hundreds of dollars a month in hopes prices go back up. The house of cards is getting closer and closer before it falls under it weight. Make no mistake , sellers need to sell BAD before they lose it all. The house of cards is bigger then Garth and all us blog dogs can imagine. Remeber all the US experts and even those who were negative on housing never thought the house of cards was that big and deep. Canada is no different.

#102 Alex on 10.15.10 at 10:19 am

reply to Devil’s Advocate #84 post.
RE agents directly benefit from price run up because:
1. It simply doesn’t require them to show many houses before buyer finally says yes I buy this one. Instead they invest little time in the process (houses come and go fast and buyers have no time to look for right house for themselves).
2. Number of these buyers is dramatically increased (“Houses never fall in price ” cliche becomes embedded in people’s mind’s and “Place to live” becomes “Sound investment” ) as many buy not just one but 2,3 and more houses
Devils’ Advocate, funny part is that you know these facts
better then me, and still you decide to take a “virgin look” clipping back and forth with your trustworthy eyelids.
I guess you are no better then Mr. Muir in his video.

#103 viamede on 10.15.10 at 10:20 am

Not sure where today’s photos came from but John Gerber (not Geher) is a “real” real estate broker at that agency and at that number. Unless he made that sign or has a sense of humour, he probably wouldn’t like today’s photo.

#104 CTO on 10.15.10 at 10:23 am

Garth

I have a nephew who is in deep with condo investments in TO to flip next year. He has no money nor does he intend to work for an money (he is in University).

I have already warned him of the risks of his actions and that I believe the odds are against his theory (prices always rise). Even so, I believe when TSHTF he will come pleading for money to my wife (his aunt) and she might want to bend.

I have been prudently saving Hard Earned Money for years, to spend when the time is right. How can I protect me and my family when this blows up in his face and preserve my hard made savings.

(He deserves a good shit kicking to set him straight!!!)

#105 Confused on 10.15.10 at 10:40 am

Hey Garth,

I am number 20 on you waiting list for the Mount Royal talk in Calgary. I also plan on going to the Dalhousie Chapters store, based on you last talk in Calgary, I am worried there will not be enough room to accommodate the large numbers of people I envision will be there – I guess I will have to be extra early to get in.

I just checked the Calgary MLS and asking prices in some neighborhoods vary greatly – bigger better houses are asking for less than smaller less featured houses! I don’t think average/median prices reflect how much more “house” buyers are able to get these days. Sadly, the market prices are still no-where next to affordable and the Calgary-Herald is still printing ‘buy now’ articles; guess there will always be greater fools.

#106 Derek on 10.15.10 at 10:53 am

#90 Jeff Smith

Don’t laugh, the consequence for Canada is serious. Think Greece! Once a certain point is reached, the country might not be able to service its obligations.

Chalk and Cheese. The reason that Greece might have trouble servcing its obligations is that it no longer has its own currency. Countries with their own currency can always “service their obligations” because in the worst case they just print more notes. They may end up driving the value of the notes into the ground but their creditors can’t complain that they didn’t get what was agreed. So we might have to worry about the CAD becoming worthless but we don’t need to worry about the country defaulting. That’ll only happen if the government decides to make it happen.

#107 bigrider on 10.15.10 at 10:53 am

An article in MoneySense magazine page27 November issue.
Talks about the Delgados financial problems starting with the purchase of their townhouse in Mississauga and their lack of financial sense and poor decision making processes.
Get this, goes on to say that when he decided to sell the home to get out of debt and rent,they were quickly convinced by a local RE agent to “downsize to a less expensive home” RE agent said to him “why throw money in the garbage renting”
So they were convinced to sell their 400k townhouse for a 360k alternative??? Yup you guessed it a 40k savings quickly eatin up by the scumbag RE agents(20k commission) and various parasites involved in the switch.
This gentlemen should be able to sue the brokerage and RE agent who gave him the horrific advice and manipulated the poor shmuck .
So sick and tired of these dumbf___ RE agents saying that renting is throwing money away !

#108 Keith in Calgary on 10.15.10 at 11:03 am

#89 DA said……….”If you want to post your own wares on it you must offer those who use it some motivation to sell it, otherwise it’s just going to sit there unshown and unseen”

—————————————————–

This just proves (and it’s directly from a realtor) that they are nothing more than self serving whores and will not work in their client’s best interests. They only want their commission.

It also blows up their argument that “MLS commissions have always been negotiable”……has anyone here EVER sold a house with less than the 7/3% standard MLS commission, in a timely fashion ? Didn’t think so…….

You list on MLS for the public exposure alone, no other reason. You offer NOTHING to these pimps and put NO REALTORS in the ad, as well as make sure your asking price is 7-10% below all of the comps in your area…….no fees = a cheaper house that gets more attention than the RE commission inflated ones. Thousands of buyers look at MLS every day…….and the only reason a realtor is even involved, is because it is a realtor that has the listing posted.

#109 jman on 10.15.10 at 11:08 am

85 Prairie Gal
Do you realize that 20% of the Canadian economy is tied to housing and residential real estate? It certainly had an impact in the US.

#110 Timing is Everything on 10.15.10 at 11:10 am

#86 grantmi – said “I’ll be asking my landlord for a cut in my rent!!”

Give it a try….You paid for part of it with your taxes in advance. What a system.

#111 Nibs on 10.15.10 at 11:20 am

September sales report out from CREA
http://creastats.crea.ca/natl/

Nothing more than lipstick on a pig…
http://financialinsights.wordpress.com/2010/10/15/lipstick-on-a-pig/

#112 Nibs on 10.15.10 at 11:21 am

#88 Antonio

There just was a year over year price decline you monkey!

http://financialinsights.wordpress.com/2010/10/15/lipstick-on-a-pig/

#113 Bailing in BC on 10.15.10 at 11:23 am

#87 T.O. Bubble Boy

Thankyou for the insider info on the pumpkin investments.

I buy three, my husband buy three!

If pumpkin prices double every month until August (our investments should be looking pretty good then) a $5 pumpkin will be worth over $5k.

Anyone interested in a presale? I’ll sell you all 6 pumpkins for $20k a discount of over 30%!

Get in now or be priced out forever!

#114 Devore on 10.15.10 at 11:28 am

#43 Behavioral Finance

Really, if you are looking to make a profit on anything in this world you always carry a risk. If there was no risk involved, there would be no profit. It is as simple as that.

The point was most people don’t see real estate as risky, because it always goes up.

#115 Nibs on 10.15.10 at 11:28 am

#85 Prairie Gal-
“The wealth effect is overstated.”

Care to expand on that ridiculous statement?

See the light!

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

“…in 2005 Karl Case (co-creator of the famous Case-Shiller index for house prices) reported a significant relationship between house price increase and consumer consumption. He suggested that a 10 per cent change in housing wealth is associated with a 0.3 to 0.5 per cent change in consumer consumption.”

http://research.cibcwm.com/economic_public/download/fsep10.pdf

“Even a modest 5% additional drop in average price in 2011, on top of the 6% it already shed from its peak, will lead to a negative wealth effect of $10 bn, stripping growth in consumer spending by more than a full percentage point.”

#116 Sam on 10.15.10 at 11:38 am

#71 Moneta on 10.15.10 at 7:26 am

BrianT:

In a bubble, there are not enough experienced people to do a good job. On the upside and on the downside.

______________________
Bubble has nothing to do with this … this is a case of
1. “I think I can get away with it”
2. “I have paid for enough politicians that I don’t have to think twice about breaking the law and my paid for assets rewriting the law so I can get away with it”

This is par for the course for a kleptocracy – hubris and avarice suffice; “bubble” not needed (but may provide a useful cover)

#117 S. on 10.15.10 at 11:40 am

“#56 Reg on 10.15.10 at 12:45 am

I don’t feel a tad bit sorry when I hear stories like this. These people flipping houses is part of what caused this mess of unafordable prices. I hope they all lose their shirts.

If people treated real estate as a home instead of a easy money scheme then we would all be better off and have more in our pockets.”

————————

I couldn’t agree more.

I looked at a “completely renovated” house not too long ago. The reno was done with such obvious terrible workmanship, and so cheaply, no matter how much the realtor (who I suspect is co-owner, with contractor spouse) chased me, I wouldn’t bite. Purchased a year ago for $200K, maybe $30-40K invested, now trying to sell for $320K. Might I add, not a great neighbourhood either. Then two nights ago, several weeks after seeing it, I was losing sleep. I knew from calling the city that none of the renos (which impact electrical, plumbing, HVAC, completely changed layout, etc) were done with permits. I started thinking of the “greater fools” that would: a) not see the many red flags visible in the house; b) not have enough sense to call the city to check for permits and inspections; and c) end up buying this potential death trap. I felt guilty. Guilty enough to lose sleep and call the city the next day to report the reno. If that amateur re-wired house burned down and something happened, I’d never live it down. Let those greedy f’s now spend thousands of dollars getting drawings, permits, inspections, and fixing what needs to be fixed to bring it up to code. Then they could try to get their $320K (and still profit). But then let’s hope the buyers know that all the expensive work was not done, only the cheap cosmetic stuff, so they still need to invest another $50K to actually finish it, and adjust their offer accordingly. That kind of foolishness I can’t help.

#118 wetcoaster on 10.15.10 at 11:40 am

“Cameron blew it this time by hinting that rich Asians/other foreigners will support BC’s market (around 3:10).”

When so-called professionals state you have to rely on foreigners to support your real estate market then you know you are phucked.

Timing is Everything,

11.5% was normal interest rates back then for many years,so what’s the big deal there ? You only got away with the shack in the back because of the dodgy neighborhood.

You’re also talking 20 years ago and you’ve had 20 years of declining interest rates never to be seen again. Do the math backwards in an eventual rising interst rate enviroment and your reasoning for buying now is ridiculous and financial suicide.

#119 Larry in Calgary on 10.15.10 at 11:43 am

I’m heading down to the US next week to see about a potential purchase of a nice home In California. Buy America, Sell Canada. It’s snowing in Calgary this morning.

#120 lexington on 10.15.10 at 11:50 am

“In Victoria is takes nine times the average income to buy a house. In Kelowna it’s seven times. In parts of the Lower Mainland, and Vancouver, about ten times. ”

Garth, correct me if I’m wrong, but aren’t San Fran and New York real estate prices around 10 times income today, even after the huge real estate crash? Does this not validate Vancouver real estate values?

#121 lexington on 10.15.10 at 11:58 am

As a matter of fact Garth, the price to income ratio in 2005 for San Fran was 12.64 according to this site:

http://www.mymoneyblog.com/median-housing-price-to-income-ratios-for-various-cities.html

That Vancouver’s P/I ratio is much higher than the American average was at peak is irrelevant. It is still lower than San Fran’s was at peak.

#122 JC on 10.15.10 at 12:03 pm

The house that set off the foreclosure furor
Friday, October 15, 2010
David Streitfeld

Denmark, Maine — The house that set off the national furor over faulty foreclosures is blue-gray and weathered. The porch is piled with furniture and knickknacks awaiting the next yard sale. In the driveway is a busted pickup truck. No one who lives there is going anywhere anytime soon.

Nicolle Bradbury bought this house seven

This was 2,300 words long. Ever heard of a link? — Garth

#123 lexington on 10.15.10 at 12:06 pm

See Garth, this link

http://seattlebubble.com/blog/2010/01/29/top-25-cities-price-to-rent-and-price-to-income-ratios/

shows that San Fran and NYC real estate values have a price to income ratio of roughly 10 today…this is after the worst US real estate crash in a century. If Vancouver is the San Fran of Canada and Toronto is the NYC of Canada, this implies Vancouver real estate is fairly valued, while Toronto real estate is undervalued.

#124 Bill Gable on 10.15.10 at 12:46 pm

The weather is turning cooler – and so are sales in the Canadian housing market.

Canadian home sales were up a seasonally adjusted 3 per cent in September over August, according to the Canadian Real Estate Association in figures released Friday.

However, actual year over year activity in September fell by 19.8 per cent compared with 2009.

And unlike the strong increases in past months, prices are flat lining and back to where they were a year ago. Average prices are now at $331,089, down 0.4 per cent from September 2009.

http://tinyurl.com/2dkg62e

#125 Ottawa S. on 10.15.10 at 12:58 pm

How do you put the quote format around someone’s post that you are replying to? The format seen in #86 grantmi’s post?

#126 jess on 10.15.10 at 1:08 pm

And where are those dollars coming from for the ads?

Rachel Maddow reveals the history of the Chamber of Commerce advocating the business benefits of outsourcing American jobs even as they spend millions of dollars accusing Democratic candidates of doing the same.

http://www.truth-out.org/rachel-maddow-chamber-commerce-champions-outsourcing-american-jobs64239

#127 BrianT on 10.15.10 at 1:17 pm

#89Devil and #62Truth-most people discussing this one are really ignorant. If you put your property on the MLS as a FSBO you are going to have to give 2.5% to any agent bringing you a buyer, so 2.5% is your effective min commission as a FSBO in this regard. I realize the general public would prefer to pay 0%.

#128 BrianT on 10.15.10 at 1:20 pm

The other point is that any seller of property who figures that 2.5% is too much to pay to anyone that delivers them a buyer is really really really stupid and deserves to keep that place and ride it all the way down.

#129 jess on 10.15.10 at 1:42 pm

http://www.fixtheuschamber.org/what-chamber/breaking-new-revelations-us-chamber-and-aig-foundations-multimillion-dollar-tax-fraud
=

U.S. Chamber Accused of Tax Fraud By Transparency Advocates

Amid Ongoing Scandal over Foreign Contributions, U.S. Chamber Watch Files Amended IRS Complaint Highlighting New Violations

Chamber May Have Misused More than $18 Million in Charitable Funds, Violated Compensation Laws with Donohue’s Multi-million Dollar Salary
http://www.prnewswire.com/news-releases/us-chamber-accused-of-tax-fraud-by-transparency-advocates-105039824.html

foreign donations and ads in anti democrats ads and where is the money coming from…
=

According to a New York Times analysis of the complaint:
While the Chamber and AIG were campaigning against laws to crack down on accounting fraud, they were potentially committing accounting fraud of their own,” she said.
http://www.alternet.org/news/148174/how_the_chamber_of_commerce_allegedly_laundered_millions_in_charity_dollars_to_beat_back_financial_reform_and_re-elect_republicans/
=

http://www.fixtheuschamber.org/sites/default/files/press_release.pdf

=
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aS8X.Vda4qFQ

#130 Ron S on 10.15.10 at 1:51 pm

#117 lexington ..
See the size of economy and population. NY and SFO have high paying jobs. How many jobs are paying $100k in Vancouver?

#131 Dan on 10.15.10 at 1:54 pm

lexington is a worried REALTOR as sales are CRASHING OVER 20% for the past 4-5 months. These realtors are true scum and will lie and lie for a dollar. The FACT is RE is CRASHING and CRASHING HARD! Lie all you want lexington but you can not stop the housing crash.

POP…………………

lexington …………………..Please buy. Everything is undervauled. Now is a good time. Forget about the fact that sales have crashed 20%. This just means we have a balanced market. please buy or I will be bankrupt.

No money………………I am bankrupt.

Greater fool……………..I can not qualify for a mortgage.

Mortgage broker……..What am I going to do?

#132 Devil's Advocate on 10.15.10 at 2:04 pm

In the movie As Good As It Gets Jack Nicholsons character (a writer) is asked how he writes women so well. His response;

“I take a man and remove all reason and accountability”

While I must appologize to Garth’s feminine readers it is a most apt rationale behind the mindset of the likes of #100 Axehead, #102 Alex and #109 Keith in Calgary.
You guys should stick to your minimum wage hourly timeclock jobs you clearly haven’t a clue what the real world is about and believe you have right to and are owed that which you do not work for. I would venture to suggest that participant on these forums who is a business owner would understand what I am talking about.

Does anyone know of such a blog that I can frequent where I needn’t wade through the cement headed rhetoric of the likes of these baffoons?

Brian T you sound like an such an all too rare informed participant here… got any idea.

#133 Devil's Advocate on 10.15.10 at 2:08 pm

#100 Axehead, #102 Alex and #109 Keith in Calgary

Actually my previous post was poorly constructed. You guys should become licenced REALWHORES. Hell it only takes a 3 week correspondence course. Leave your hourly minimum wage jobs at Walmart and join in the thievery under the CREA umbrealla.

Then talk to me in a year and see if you are singing the same tune. Maybe you can make a difference and spin the business on it’s head setting it right.

#134 Dan in Victoria on 10.15.10 at 2:17 pm

Prairie Girl @ 86
Enlighten us plebeians.

#135 Nostradamus Le Mad Vlad on 10.15.10 at 2:21 pm

#28 Steady Eddie — Good clip and rather descriptive!

Re: the banking cock-ups all over. Just an unproven theory, but when (and if) more money is printed with QE2, won’t that further devaluate the US$, thereby increasing other currencies?

The elite won’t be bothered with us, as we’re pipsqueaks compared to the US. Their next step will be to eliminate smaller banks, causing further panic amongst sheeples, then come up with a solution.

The Europeans have balls and guts we can only dream of, by giving the elite a headache of gargantuan proportions, plus with a lot of instability throughout the whole world.

It is possible that this runaway snowball is getting unmanageable for these slimeballs, and if it has become too big for them to handle, then at least we’re all sinking in the same boat.

Create more wars and drop more bombs — the US’s mantra! All in very unstable countries along with germ warfare and instant viruses.
*
Jake — Not sure if you have the instructions for hyperlinks, which I posted here some time ago, but you may like to cut and paste them to a document and leave it on the desktop

How’s your Constitution?

When your comment is posted it will look like this: How’s your Constitution?

OTHER USEFUL HTML

your text to make the text bold

your text>Â to underline text

your text for italicized text

your text

 for indentation

??????
??????
??????
??????
??????
??????
??????

Trust this is of use.

#136 Reasonfirst on 10.15.10 at 2:29 pm

#124 lexington

At least compare numbers using the same methodolgy – it would be a little more credible.

#137 HouseBuster on 10.15.10 at 2:30 pm

BrianT – You can just say ‘Agents not welcome’ if you don’t want to pay the commission.

#138 Jake on 10.15.10 at 2:37 pm

Lexington,
I know a lawyer in San Francisco who bought a house for over a million back in ’05. He wants to move back to Canada now, but can’t because he can only get $650k for his house. There will be a lot of people in his position in Vancouver in a few years.

If you have that much faith in Vancouver RE, think about picking up a few of those olympic condos. I hear there are quite a few available right now.

#139 Timing is Everything on 10.15.10 at 2:38 pm

#119 wetcoaster

I would never buy more RE now….That would be crazy.
It’s not 1990 anymore(or 2001 for that matter)….Timing will be right again for RE sometime after 2020.
I have bought and sold three since ’91. The last one in 2001. I’ll sell again (or subdivide) sometime after 2020..
There is a time and place for everything….dude.

#140 dark sad person on 10.15.10 at 2:42 pm

#107 Derek on 10.15.10 at 10:53 am

Chalk and Cheese. The reason that Greece might have trouble servcing its obligations is that it no longer has its own currency. Countries with their own currency can always “service their obligations” because in the worst case they just print more notes.

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

That is only partially true-
For instance-Oil must be paid in USD’s —
In order to buy Oil-USD’s must first be purchased-so any excess printing against the USD-would result in an eventual refusal of purchase-

Here’s another problem that printing by individual Countries wont solve-
Mortgage holders in-Greece for instance-borrowed in CHF and must pay back in CHF-which is rising against the EUR-despite the Swiss spending a Billion/day printing and buying EUR in order to devalue the CHF and it is not working-
The market sets the value of Currency/Bonds-despite Government/CB interventions–
So-there is a limit-to uncoordinated devaluation and that cannot change-

#141 Ben on 10.15.10 at 3:03 pm

Bill C-428 will allow recent immigrants to apply for OAS (the CPP) in 3 years instead of the existing 10.
This bill had first reading in the house on June 18, 2009. It was seconded by Bob Rae!! MP Ms. Ruby Dhalla who introduced the bill represents the riding of Brampton whose population is mainly East Indian. Right now you have to have lived in Canada for 10 years in order to qualify for Old Age Security (CPP). She wants the time reduced to 3 years. Thousands could come to Canada when they are 62 years old, never having worked or contributed to this country’s tax system etc, and qualify for full Old Age Security (CPP) benefits. 10 years minimum is reasonable. 3 is not!

#142 Coho on 10.15.10 at 3:15 pm

A Tom Vu semiar experience abot 20 years ago in Burnaby:

His father starts out and warms up the crowd for 30 – 45 minutes. After which he is about to introduce his son, but not before he performs a speech on how valuable Tom’s real estate buying strategy is. Then….the bomb is dropped. Fifteen hundred dollars was the fee for those who wished to stay and listen to Tom Vu!

There were about 300 (give or take) in attendance. Of course there was a stampede out of the room, once the price was disclosed! Me being one of them. Can’t remember how many stayed. Perhaps 10 percent? If so, then $45K isn’t a bad haul for one seminar. Who needs to sell buy and real estate when you can sell people like that. Several of those seminars a month would have made Vu millions per year!

#143 dradak1 on 10.15.10 at 3:18 pm

#95 Tripp on 10.15.10 at 9:31 am

“… In Ottawa, for $1,200/month you can find a 2 BR in a nondescript 30-year-old …”

That is not truth – I live in 3BR build in 2002 for a price bit south of $1,200.

#144 VancouverGoinUp on 10.15.10 at 3:18 pm

Was walking by the new Arthur Erickson building in Yaletown the other day where townhouses go for around 10 million. The penthouse is 3 floors with a pool covering the top floor. Price tag 30 million. From the second floor in the living room you can look up at the pool. The parking garage had to be made higher to accomodate the owners RV. The owner has one entire floor of the parking garage with 50 parking stalls for his toys. These are the people Vancouver caters too. Go ahead Canadians blow out your condos and homes, the mega rich are on the sidelines ready to buy. Ride the trends and buy on the dips. Works everytime. Remember Vancouver is consitently ranked by reputable magazines such as the Economist as being the greatest City in the world to live. I wonder how many rich people would like to live in the greatest City in the World. My guess is plenty.

#145 Moneta on 10.15.10 at 3:21 pm

Bubble has nothing to do with this … this is a case of
1. “I think I can get away with it”
2. “I have paid for enough politicians that I don’t have to think twice about breaking the law and my paid for assets rewriting the law so I can get away with it”

This is par for the course for a kleptocracy – hubris and avarice suffice; “bubble” not needed (but may provide a useful cover)-

———–
Sam:

Now I see what BrianT was getting at but I still maintain that a sign of a bubble is when there are not enough people to do the job properly and corners are cut.

For example, during the bubble years, the number of real estate agents and mortgage brokers ballooned. It attracted all kinds that would have never made the cut in “normal” times.

Today, we are living the aftershock of this excess. There is now a bubble in foreclosures. The problem now is that everyone wants a quick resolution when there are physical limitations. Can the current system and its players (lawyers, courts…) get all these foreclosures through the pipeline in a reasonable amount of time? I think not. Therefore, we have more fraud.

Amen.

#146 BrianT on 10.15.10 at 3:38 pm

#138House-that might make sense if you had an EXTREMELY liquid property-if you don’t, and you balk at giving 2.5% to anyone who brings you a buyer you are making a very big mistake.

#147 BAD on 10.15.10 at 3:38 pm


#13 Dan in Victoria on 10.14.10 at 9:19 pm wrote:

Timing is Everthing @9

Hell just make the tool shed into a house in good old Victoria, it’s diffrent here…..

http://www.timescolonist.com/business/Garden+suites+could+next+thing/3669911/story.html

Come to think of it I could make mine into a duplex……yeah, and under the back porch i could have one….
Damn trolls are noisy though.

All I can say is 日本へようこそ circa 1989.

It seems that the tougher the times become the more trolls they breed – it must be the prospect of living under a bridge…

Meanwhile I am waiting for the next big bubble to ride.

#148 BAD on 10.15.10 at 3:39 pm


#13 Dan in Victoria on 10.14.10 at 9:19 pm wrote:

Timing is Everthing @9

Hell just make the tool shed into a house in good old Victoria, it’s diffrent here…..

http://www.timescolonist.com/business/Garden+suites+could+next+thing/3669911/story.html

Come to think of it I could make mine into a duplex……yeah, and under the back porch i could have one….
Damn trolls are noisy though.

All I can say is 日本へようこそ circa 1989.

It seems that the tougher the times become the more trolls they breed – it must be the prospect of living under a bridge…

Meanwhile I am waiting for the next big bubble to ride.

#149 eddy on 10.15.10 at 3:40 pm

Some dire predictions here:

http://www.oftwominds.com/blogoct10/foreclosure-collapse10-10.html?source=patrick.net

#150 CalgaryGirl on 10.15.10 at 4:04 pm

Friends in Calgary still have not sold their condos. It has been over 1 year. One has dropped it below what they paid…sad. But how can they compete with developers offering trips to Mexico, free cars, etc etc

Another woman I know built a home in Victoria to sell after 1 year for profit. It is two years later, she is 60 with two huge mortgages. I think she is just hoping to hold onto them both until the market goes up. But when will that be??

Sad, as an American I know so many people who have lost their homes in the States. Will Canadians learn??

#151 lexington on 10.15.10 at 4:14 pm

Jake, #139

The only reason those olympic village condos aren’t selling is because the stupid city council decided to include low income housing. Why would rich people want to live with poor drug addicts for neighbours? It has nothing to do with a lack of demand for luxury condos in Vancouver. Vancouver real estate continues to hit an all time high in terms of prices.

At only 10 times income, Vancouver real estate prices match New York and San Fran (post bust). Vancouver is priced well below what San Fran was at the peak. The New York Times described Vancouver as a west coast Manhattan with mountains.

#152 Derek on 10.15.10 at 4:56 pm

@141 dark sad person
That is only partially true-
For instance-Oil must be paid in USD’s –
In order to buy Oil-USD’s must first be purchased-so any excess printing against the USD-would result in an eventual refusal of purchase-

Those are fair points against the general principle, DSP, but they don’t really affect Canada since we are a net exporter of Oil. And since the USD is being devalued even faster than the CAD at the moment, I’m not too concerned about us running out of USD for imports. We run a pretty large trade surplus in USD.

Re the Greek mortgage holders, yep, that’s definitely an argument against the general principle but again not an issue that we have in Canada. The CMHC insures mortgages in CAD only, so printing would solve this one if it had to. Granted that it might do so at high cost to the Canadian economy.

Finally there’s no doubt that the market sets the currency/bond values. But it does so in light of government/CB interventions not despite them. If HMCG does something the market likes, the market will respond by increasing the value; something it doesn’t like and it will reduce the value; something irrelevant and the market will ignore it. But as long as the bonds pay out in CAD, HMCG can pay them, whether it chooses to do so or not.

#153 Shawn Allen's mom on 10.15.10 at 5:27 pm

#108 bigrider

I can sense you frustration, but someone needs to give the Delgados a grade one math lesson prior to signing their life away twice.

#154 FYI on 10.15.10 at 5:53 pm

142 ben

So you are saying that there will be lots of 62 year olds coming to Canada?

Did you know that 55 years of age is one of the most common age of immigrants coming to Canada at present? Why? Are they really 55 … Or 45? FREEDOM 55 alive and well in Canada.

#155 dark sad person on 10.15.10 at 6:07 pm

#26 InvestorsFriend (Shawn Allen) on 10.14.10 at 10:05 pm

But basically this continues to be the Golden opportunity of a lifetime for Canadians to invest in U.S. real estate.

It’s not for everyone, I prefer stocks and I don’t have the cash to invest and I don’t have time to spend winters in the South…

But if you are in the market for a U.S. winter house, now is the time to Buy.

To the brave will go the spoils.

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

I see why you call yourself “Investors friend”
I would like you-if you were always on the other side of my trade-

In light of the breaking “Mortgage-Gate” CF-
You advise buying into it huh?

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

Revelations of mistakes in foreclosure proceedings are causing buyers to have misgivings about property titles, the right of home possession, said Richard DeKaser, chief economist at Woodley Park Research in Washington. Confidence in the legality of repossessions will cut foreclosure sales more than a reduction of available properties because the market already is flooded with repossessed homes, he said.

Ownership questions may not arise until a home is under contract and the potential purchaser applies for title insurance, or even decades later as one deed researcher catches errors overlooked by another. A so-called defective title means the person who paid for and moved into a house may not be the legal owner.

http://www.bloomberg.com/news/2010-10-11/foreclosure-freeze-may-sideline-u-s-homebuyers-as-legal-worry-cuts-sales.html

************************
Now-you’ll say–Just buy title Insurance-
I wouldn’t bet on it and even if you do get it–don’t be surprised-if the Insurance company isn’t insolvent when all the new “shadow inventory” is discovered to be totally bogus buried in Mortgage fraud and the claims overwhelm their ability to payout–
Sounds like some already see this happening-in fact the largest one in existence–

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

Old Republic National Title Insurance, among the nation’s largest title insurance companies, will no longer write new policies for homes foreclosed upon by J.P. Morgan Chase and Ally Financial’s GMAC Mortgage unit –– a sign that concerns about faulty foreclosure paperwork could now endanger new sales of foreclosed homes.

Old Republic issued a bulletin to some agents stating that “the company will not insure title to any property which has been foreclosed by Ally Financial, Ally Bank or GMAC until further notice,” according to a Sept. 29 copy of the memo. The concern is that other title companies will also refuse to issue policies for major lenders, which could have major ramifications for the housing industry.

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

http://www.usatoday.com/money/economy/housing/2010-10-02-old-republic-foreclosures_N.htm

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

So-buy now and when your title is tied up in court for 5 years-or-like recently happened-the original owner broke into the home and just started living there again and the people who had bought it-are waiting-until it goes through the courts-because the “original” title cannot be found-lol

#156 jess on 10.15.10 at 6:10 pm

Ben you may like to read this

http://jimbenderoxford.blogspot.com/2009/09/some-clarity-on-bill-c-428.html

What Does Bill C-428 Achieve?

. Bill C-428 would allow all seniors regardless of their country of origin to qualify for a “partial” OAS pension after 3 years. The benefits would reflect the residency of a senior in Canada.
. Thus a senior who has lived in Canada for 40 years would receive a full maximum payment and a senior receiving the pension after 3 years would only be eligible for 3/40th of a full pension.

. The Library of Canada estimates that a resident of Canada of 3 years would qualify for is a partial monthly benefit of $38.77 compared to a resident of 40 years who can receive a full maximum monthly benefit of $516.961. …

1. Pensioners with an individual net income above $66,335 must repay part or all of the maximum Old Age Security pension amount. The repayment amounts are normally deducted from their monthly payments before they are issued.
The full OAS pension is eliminated when a pensioner’s net income is $107,692 or above
. Low income seniors (under $20,000) who qualify for OAS would be eligible for Guaranteed Income Supplement.
. Bill C-428 makes no changes to CPP/QPP which are contributions based programs.
. Bill C-428 was one of the final recommendations made in the final report of the Special Senate
Committee on Aging, April 2009 which included Liberal & Conservative members.

WHY BILL C-428?
. No Senior in Canada should be relegated to live in poverty. All seniors regardless of country of origin should be treated with dignity & respect.
. Bill C-428 has been the result of thousands of seniors & senior organizations coming forward and requesting that their voices be heard.

http://www.thestar.com/news/crime/article/875857–property-worth-500-000-recovered-in-open-house-theft-case?bn=1

#157 Keith in Calgary on 10.15.10 at 6:20 pm

Regarding the post at #133 by DA…………

I have been a commissioned sales person for the last 21 years earning 6 figures……….I have also managed businesses as an employee, and ran my own company for 5 years grossing annual revenues in the <$5M range.

REALTORS (TM) are going the way of the travel agent……..you don't need one for anything whatsoever, at any price. And especially at 7/3% or 5% of the entire transaction or any fraction thereof.

All you need is exposure to either the MLS website or a comparable one for advertising exposure, access to the past sales data (the municipalities tax department usually has that) a good RE lawyer, and a good home inspector or combination of trades you trust to do your due diligence. I have bought and sold RE without real estate agents……….and for good reason. They only inflate prices and bring no value to what is otherwise a simple transaction, requiring a modest modicum of due diligence.

What the folks reading here have just witnessed with your insult filled rant is the "hubris" of a RE dinosaur with both hind legs firmly caught in the tarpits of reality, with it's front legs clawing madly at the last few bits of receding earth that is available as it slowly moves downward into the morass, until all that remains is it's head, just above the black slimy substance taking a few last final breaths of pungent air before it goes under for the last time, never to rise again.

#158 wetcoaster on 10.15.10 at 6:21 pm

Timing, thanks for the clarification…dude. Your comment implied that current world events do not matter like it did for you in 1991.

#159 Nostradamus Le Mad Vlad on 10.15.10 at 6:22 pm


THOUGHT FOR THE DAY!

“The Federal Reserve Has No Clothes! The Federal Reserve Has No Clothes!” wrh.com.

Scandal! Dear Garth’s Advice Column comes full circle!

This doesn’t help matters. “This is the signal for hyperinflation, which means the money you already have worked for and saved is about to lose value yet again, while new printed money is used to buy government debt (meaning you and your grandkids get stuck with the bill). The Government then goes on another round of “Stimulus”, most of which winds up as Wall Street Bonuses, etc.” wrh.com.

Cyberstuff going ballistic?

9:58 clip Who is manipulating their currency? Goes with the preceding.

Obama’s Nukes “That Obama is preaching to the world about the abolition of nuclear weapons, while signing off on a nuclear test in Nevada, is the height of hypocrisy.

“Even though an actual nuclear explosion did not occur, sub-critical testing is a violation of the Comprehensive Nuclear Test Ban Treaty.” wrh.com.

Banxsters, govts., Monsantos, the elite — they’re all after our pensions, but — Pensions “The domino called “foreclosuregate” tips and strikes the next in line, “Pensions!” wrh.com.

14:10 clip Foreclosure fraud in trillions (give or take).

BoA Goin’ Down!

Currency Wars May be associated with the ever-decreasing Buck and Yuan.

If the US pulls out, then China can go in — problem solved!

The elite are strangling us. They are also strangling themselves in the process.

Business “One has to wonder if this will cause the US government to accuse Venezuela of wanting a nuclear weapons program, just as it has with oil-rich Iran.” wrh.com.

The Pony Express won’t stop.

Monsanto, Blackwater and Bill Gates. Other than below hell, what do these three have in common?

#160 S.B. on 10.15.10 at 6:28 pm

It sounds like the G-man could use a private jet on his nation-wide tour, a mobile office and party room in the sky:

http://www.aircanada.com/en/travelinfo/before/jetz/index.html

Led Zepplin had their Starship;
The President has Air Force One;
G-man’s will be named: Hummer Mobile (after his vehicle, of course)

#161 just wondering on 10.15.10 at 6:33 pm

By By American/Canadian Pie

More Quantitive Easing in the US (read: printing more money) is going to bleed everyone dry.

So, bye-bye, Miss American Pie
Drove my house to the levee
But the market was dry
And them good old bankers were drinkin’ whiskey and rye
Singin’ this’ll be the day that I foreclose
This’ll be the day that I foreclose

They were singin’
Bye-bye, Miss American Pie
Drove my mortage to the levy
But the bankers were dry
And them good old bankers were drinking whiskey and rye
Singing “it’s not our fault our clients went tits up and started to cry”
They naively believed they were getting the American Pie.

#162 just wondering on 10.15.10 at 6:39 pm

More Quantive Easing (aka printing money from thin air) in the US will affect everyone north of the border.

Sung to the tune of Bye-bye, Miss American Pie.

Bye-bye, Miss American Pie
Drove my mortgage to the levy
But the levy was dry
And them good old bankers were drinking whiskey and rye
Singing this’ll be the day your mortgages will die

#163 Devil's Advocate on 10.15.10 at 7:17 pm

#138 HouseBuster on 10.15.10 at 2:30 pm
BrianT – You can just say ‘Agents not welcome’ if you don’t want to pay the commission.
#147 BrianT on 10.15.10 at 3:38 pm
#138House-that might make sense if you had an EXTREMELY liquid property-if you don’t, and you balk at giving 2.5% to anyone who brings you a buyer you are making a very big mistake.

What neither of you understand is that the MLS is not what you think. MLS.CA is nothing more than a front end portal to limited information which is intended to advertise REALTOR listings to the public who then call the listing REALTOR. If HouseBuster were to place a listing on the MLS through an agent and say ‘Agents not welcome’ it simply would not be seen to any degree more than were they to advertise it on Craig’s List, Zillow, Kijiji or any For Sale by Owner website.

The only saving grace HouseBuster could hope for would be that an astute REALTOR who saw that it met their buyer clients specific wants and needs saw it and was under Exclusive Buyer Agency Agreement with that buyer to freely approach any good property on that prospective buyers behalf knowing that they would be paid for doing so as stated in that Exclusive Buyer Agency Agreement.

I know this concept is difficult to grasp as so many believe that the MLS is a government owned system. It’s not. The government can take it over as they have so many things. In fact the major players have already prepared for that and there is ready to roll a mirror system that would be turned on and operational just that quick in just such an event. Were that to happen at least 80% of the agents in Canada would move to that new system with the remaining 20% following very shortly there-after as the existing MLS system would be rendered – effectively useless.

Believe it!

#164 Devil's Advocate on 10.15.10 at 7:36 pm

and people might actually talk to us at parties instead of thinking we’re all about sucking the blood out of them and feeding on their lifeless carcass!

#165 Devore on 10.15.10 at 7:37 pm

#70 TGS

Just like ANYTHING coming out of a Conservative mouth is designed to hide the truth about the impact of government policy (e.g. Flaherty crows about ‘fixing’ the mortgage problem by changing the 40/0 mortgages to 35/5…no mention that it was the idiot decision of the Conservatives to create 40/0 mortgages in the first place).

Canadians are basically uninformed, gullible bumpkins and the proof of this is staring us in the face….a housing bubble staring us in the face….and an idiot Conservative government still in power.

As opposed to those truth-telling Liberal mouths, or that wise and sage NDP government not in power?

Zzzz…… partisan bickering.. wake me up when you grow up.

Do you believe Liberals or NDP would have done anything materially different or better? Where was the opposition when the 0/40 mortgage came out? Where was the opposition when CMHC was directed to insure anyone with a pulse? Where was the opposition when the renovation tax credit was rolled out to subsidize home owners dreams of granite?

Oh yeah, they were hiding in their closets, at best, thanking their deity of choice they were not in power having to make any decisions to keep the economy afloat at all costs.

Anyone can back-seat drive, and 20/20 vision is oh so sharp.

The first step to becoming an independent adult is realizing politicians, of any stripe, are not the answer to whatever questions you are asking.

#166 Devil's Advocate on 10.15.10 at 7:37 pm

and our wages would be a matter of public record instead of people speculating that if we are successful we must be making more than a hockey player!

#167 Alex on 10.15.10 at 7:38 pm

Devil Advocate, in your childhood you didn’t get enough
hard lessons from your peers. Insulting people on the blog? lol. You essentially is a middleman, really deserve profession that you have, profession that creates only drag for society.

#168 Devil's Advocate on 10.15.10 at 7:40 pm

I’m likin’ it… really let’s do this.

and while we are at it let’s legislate that your home can only rise by the actual cost of inflation be that positive or negative.

#169 Devil's Advocate on 10.15.10 at 7:41 pm

And capital gains… what’s with that? Tax it full bore at your full tax rate.

#170 Devil's Advocate on 10.15.10 at 7:42 pm

and if you live in a McMansion you should take in boarders at what-ever they can afford, and your wife should do their laundry and you can’t complain about their stinky feet up on the coffee table while you are watching Greys Anatomy, Dancing with the Stars, Survivour or WTF it is you watch…

#171 Devil's Advocate on 10.15.10 at 7:44 pm

and your Hummer or Escalade… leave the keys in the ignition please… less fortunate people need to go to Costco to ya know.

#172 Devil's Advocate on 10.15.10 at 7:44 pm

I think you must by now get the point… or should I continue?

#173 Devore on 10.15.10 at 7:58 pm

#116 Nibs

#85 Prairie Gal-
“The wealth effect is overstated.”

Care to expand on that ridiculous statement?

Ridiculous? It’s hardly ridiculous. People don’t spend (consume) more merely because their houses are worth more, what a way to miss the forest for the trees! People spend more, because they have more money. Why do they have move money? Because they can borrow more. Why are their houses worth more? Because others can borrow more to bid up the prices.

The reason for increased consumption is not housing wealth, that is merely a symptom as well. A symptom of easy and cheap money.

#174 Paully on 10.15.10 at 8:00 pm

A real housing collapse in Toronto…

http://www.torontosun.com/news/torontoandgta/2010/10/14/15694056.html

#175 Devil's Advocate on 10.15.10 at 8:04 pm

I wonder how many people called John Geher of Royal LePage 416-443-0300 because of Garth’s Pic of the Day? National advertising like that, although I don’t know that I would want it myself, is pretty damned expensive.

Google him… he is in fact for real. If he is not responsible for that sign… nah I can’t go there… it does meet the legal requirements of disclosure of brokerage and brokerage telephone number though, I will say that. LOL

#176 Devore on 10.15.10 at 8:09 pm

#159 jess

WHY BILL C-428?
. No Senior in Canada should be relegated to live in poverty. All seniors regardless of country of origin should be treated with dignity & respect.

Oh yes, a pension of $38.77 will surely show them the dignity and respect they deserve.

What is the purpose of this bill?

#177 Devil's Advocate on 10.15.10 at 8:20 pm

Gee #175 Alex who’s insulting who?

Drag on society? We get paid only when and if we do the job Alex. We spend thousands promoting your property and if we don’t get it sold we suck up that cost. You don’t pay us back a nickle for those glossy ads you insist we run for your overpriced listing that will never sell because you refuse to come to terms with the reality that it is worth less than you paid for it. So when we tell you to reduce your price you say F that… I’ll sell it myself on FSBO.com. And then when it doesn’t sell you are bitter and insult the whole real estate industry.

Suck it up and take some responsibity for your actions you whinning little wimp.

But enough about us… Tell us about your job Alex, won’t you?

#178 Devil's Advocate on 10.15.10 at 8:23 pm

My post at #180 really has lost it’s entire meaning without the approved moderation of those preceeding it. But I get it. Very cleaver.

#179 Devil's Advocate on 10.15.10 at 8:24 pm

My post at #180 really has lost it’s entire meaning without the approved moderation of those preceding it. But I get it. Very clever.

#180 Devil's Advocate on 10.15.10 at 8:25 pm

I mean #175… it keeps moving

#181 Debt's Dark Embrace on 10.15.10 at 8:29 pm

#174 Devil’s Advocate on 10.15.10 at 7:44 pm

I think you must by now get the point… or should I continue?
………………………………………………………………………..

The only point that you repeatedly drive home is that you are an idiot.

#182 Devil's Advocate on 10.15.10 at 8:37 pm

Now hang on… a whole lot of that just ain’t gonna make any sense at all now seein’ as so much was deleted.

Walked into that one without seeing the trap I laid for myself. I get the message…

#183 Devil's Advocate on 10.15.10 at 8:46 pm

#160 Keith in Calgary

Wanna put some of those six figures on it Keith?

Ain’t gonna happen… not a snowballs chance in hell. You don’t understand the business. Of course could be legislation that kills it… nah… not even legislation would… if it did it would be legislation you yourself would be crying yourself to the poor house about. Nope just ain’t gonna happen. But keep dreaming.

#184 Devil's Advocate on 10.15.10 at 8:56 pm

WTF am I doin’ here?

Ya gotta wade through so much shit to get to the few all too rare good reads.

You deadbeats are wayyyyyyy to glum and blind to your own self inflicted plight. You’re toxic.

There is, in fact, a world of opportunity out there. Good opportunity in which both sides win. You doomers think you are so pure yet you pine away your lives in hopes that it will improve through someone elses loss. You are friggin’ toxic.

#185 BrianT on 10.15.10 at 9:00 pm

#142Ben-maybe Ruby needs more old footservants (cheap ones) http://www.allvoices.com/contributed-news/3205678-nannygate-a-scandal-threatens-to-sink-ruby-dhalla

#186 dark sad person on 10.15.10 at 9:01 pm

#155 Derek on 10.15.10 at 4:56 pm

Those are fair points against the general principle, DSP, but they don’t really affect Canada since we are a net exporter of Oil. And since the USD is being devalued even faster than the CAD at the moment, I’m not too concerned about us running out of USD for imports. We run a pretty large trade surplus in USD.

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

That is true about Oil and Canada-my point was more to this statement-

“Countries with their own currency can always “service their obligations” because in the worst case they just print more notes.”

Countries have a limit to what they can print-
Argentina/Vietnam/Iceland/ to name a few-have found this out and it happens very quickly-a trader run on their currency and the CDS rate will continue to climb to the point of a liquidity trap and then-they’re hooped-
It is impossible to service their debt-

And i agree with what you say about CMHC loans are payable in CAD and that printing would-in a sense-pay them off-but at the same time-printing means borrowing-from the future-with the only ways and means of paying that debt-is the power to tax-
(G’s favorite)
But there is also another side to that coin and that is the “ability” to tax-
With high unemployment and even worse-personal balance sheet debt-like i think we’re numero uno on the planet now-
The ability of Governments to continually raise tax revenues wanes and tax revenues “will” continue to erode in a stagnate economy-as people simply cannot pay-ie: the 42 million in the US on food stamps-have nothing left to tax-

Currencies–all of them–have only the faith of the Governments/Peoples ability to service their debt obligations and if Currency/Bond traders/Foreign lenders/Investors see risk-they will demand more compensation-ie: higher rates and that leads right down the path to a liquidity trap-

I understand Canada and the US are considered fairly safe-so far-but don’t forget-it wasn;t long ago our CAD was worth .62 cents and it was causing concern-ie:
Threats of trade sanctions-and this can rear its ugly head at any time with excessive devaluation-
So there are limits to printing-that are set by outside influences that our Government has no control over-
Japan is a great example of this-their debt to GDP is over 200% and the Yen continues to climb-which absolutely crucifies their manufacturing/export markets and this-in spite with zero % rates and QE for years- and they are forced to print/expand their balance sheet-but there is and end game coming for them and it could well be a Hyper-Inflation and this-is in a major currency-which will have a serious impact on the faith of “all” Fiat Currency-
So no country is ever totally immune- to a currency run-
In fact-we seen it happen-in 1971-81 with the USD-

#187 Rick in Japan on 10.15.10 at 9:10 pm

Hey #149 BAD
Interesting statement (though I wonder if many realize you were saying ‘welcome to 1989 Japan’). Living here in 2010, most people are shocked that it came to what it has. . .

#188 Hovering on 10.15.10 at 9:33 pm

In Victoria “is” takes nine times the average income to buy a house

geez who’se you’re tipeseter ?

#189 Timing is Everything on 10.15.10 at 10:03 pm

#161 wetcoaster

Current world events do matter, but that was not as much as a concern for us in 1990 (we were only 28)
That is why there are always opportunities….in SOMETHING. There is always something ‘hot’ going on. RE was hot for a long run, but the ride was ending about 2001-2003-ish. It will (be over) for quite a while I suspect (2020 and beyond?)…We caught the ride at the right time, give or take. It was good for us.

Sorry for the confusion…dude :)

#190 David B on 10.16.10 at 2:09 pm

From what I have been hearing many people are planning on cutting back this Christmas. We all kown the C of L is rising daily and should gas prices rise sharply that could just about do it for far too many. I have notice a few, small few homes by sea have sold not sure if it is now trendy or just good money moving in. Looking on the MLS site it appears to me there is a very small choice of homes, many here understand MLS listings as location is the key to knowledgable people followed by quality and price in key areas. Having said that few quality listings here in Halifax Dartmouth Bedford and even if y’all won the lotto a prime listing in the South End of Halifax would be difficult. So what’s up? who knows? are people more concerned about prime investments and financial independence ….. perhaps!

#191 Future Expatriate on 10.16.10 at 3:15 pm

#9 “That’s why they invented basement suites”.

Thanks. I was POSITIVE it was because people like to live in the misery of Dickensian times in 2010 and effectively wipe out all the progress since the postwar 1950’s.

“Stay away from that boarder, little Timmy. Something not quite right about ‘im, there is.”