My wife is desperate

Well, had an interesting day. Started it out in sunshine in Kelowna, jumped into the rented Hummer to head through the mountains, and drove straight into a blizzard. Blowing snow, whiteouts, a 17-degree Celsius drop in temps and fishtailing semis on the summit – followed two hours later by warm breezes and swaying green leaves in the burbs of Vantown.

Spoke to two big audiences in Surrey, spent time with investors in Vancouver desperate for answers, and bolted about six Grande Bolds. Oh yeah, and I sold a property. Interestingly enough, I listed it on Wednesday and it was gone on Friday. One showing.

So that made me dwell a moment or two longer on the latest CREA stats, when I read the big headline on my Berry. “Sales of existing homes on the rise.” Could we be going back into a real estate delirium, I wondered? How, with no news of surging employment, falling debt or boatloads of wealth-stricken Asians, could house deals suddenly take off after months of decline?

Well, actually, truth is that resales across the country in September were 20.1% lower than in the same month a year ago. It’s just that they improved a little (3%) from a disastrous August. And that’s worth a headline? September is traditionally the second-best month of the entire year for real estate transactions, so if would have been an unmitigated disaster had the number of home sales fallen. As it was, a 3% jump over the final summer month bordered on the pathetic.

However, it was enough to make the property-pumping MSM hot. Even the Globe is getting into Phil Soper’s boxers, I see, asking this question hours after the new numbers appeared: “Is it finally time to buy a home?” Worse was this: “With interest rates low, many Canadians are wondering whether they should get off the fence and buy a home. Real Estate Investment Network president Don Campbell joins the Globe next Tuesday at 1 p.m. to share his insights on real estate hot spots, where the market is heading and the difference between buying a home and an investment property.”

Holy crap. The mothership newspaper bedding down with the horned leader of the satanic cult called REIN. What next? An online session with the Hair Club for Men? A guest editorial by the SlapChop felon guy?

But back to the news. “Analysts say the Canadian housing market is stabilizing as it cools off after helping to drive the economy out of recession last year and early this year. This, together with recent developments in existing home sales activity, signal the likelihood that we are closer to a balanced market position than previously envisaged.” That insight comes from a staff economist at TD Bank, where they apparently lend mortgages.

And this hopelessly unbiased opinion leads to whines from the houseless, to wit: “I am a married 30 yr old father of one who has been taking a beating at work for not having bought a house within the last two years.  I am one of the only renters on the job among 100+ fire fighters, and my wife is desperate to own a home. So I am.” That came from a burly wimp who attended my talk in Kelowna.

Which is fine. We all need somewhere to live. But despite the butchered info from the industry and the cheerleading from the media, the facts remain: Housing prices are at an all-time high. Canadians have never been so indebted. Unemployment’s stuck at 8%. Sales are dwindling, skewing prices. Interest rates will only rise over time. Taxes, gas, food, insurance are sucking family cash flow. Salaries are stagnant. The only way for real estate to recover momentum is (a) for prices to drop, increasing affordability, or (b) for people to take on more debt.

Now, humans being essentially joyless emotional wrecks, anything can happen. But if (b) prevails, then the odds of us repeating the US housing disaster take a giant leap higher. You know that. I know that. Mark Carney knows that. Hell, even F knows that. The housing renaissance that Don Campbell and the editors of the Globe so desperately pine for will be short, brutish and lead us over an economic cliff.

Which is why it will never happen.

No, the way forward will be as this well-despised blog has laid out. Correction, then melt. And until this becomes widely known, it’s a fine time to be a seller.

237 comments ↓

#1 ken s. on 10.15.10 at 8:39 pm

Looking from my kitchen window this AM, I saw
the lady who runs the salon, opposite, place an
incense stick between her hands, and hold it up,
her eyes half closed, her face intense.

I was touched by the simplicity and honesty of
this: When there is nothing left but prayer; -You
pray: end of story.

It is the third or fourth business failure in a densely
populated area, in very small plaza, in a year. This type of business in a good location was seen only a year ago as a solid investment delivering income, no
matter what.

It was intensely poignant, in that, her entreaty, is that of the 6 billion of us, who have danced to the pipers in Washington, London and Europe and Asia and, –from the money changers in Marrakesh or the Silk Road, to the baroque hallways of the City, or Vienna;
-there is inconsolable distress. I think that on the Silk Road there will be little loss or fraud for merchants or lenders or even the camel and truck drivers, the
reflected flash of the sun from silver handled daggers, and those of your kinsmen, is an insurance
the doesnt require notarization.

‘The Oxbridges’ and
the ‘Haut Ecoles’ are getting that 1914-1929-1933-
1939 feeling: the ink sketches and theoriesof Marx, Smith, Mieses, Keynes etc,
in the texts, which were their life purpose for years,
are flying off the pages of memory, and hovering over the authors of future obituaries-histories of
this collapse.

….continuing: (‘prev. comments….’) –[‘…….so what did you ‘Think’ collapse would look like’??] :

The Forclosure Fraud will not be a big problem for a
Washington which has approved carpet bombing, torture, dungeons, elimination of habeas Corpus -the betrayal and shredding
of one of the most courageous documents in human history (the US constitution). These annoyances were not a problem for Hitler or Stalin or 10 thousand other bullies, Fraud?? You cover it
with Bigger Fraud…. then Bigger, then Bigger!
Rule of Law?? –I think you should read more obituaries like this one. Fascism is so repugnant; But
it is so Efficient! All Uncertainty and Complexity simply disappears, in hours! —Turn in your pistols, ammo, gold, lists of relatives, photocopies of everything, pictures of you, wife, children, reapply
for the new ID, exchange old banknotes. Fill out
residence and travel forms, —its all so Efficient.

Nobody thumbscrewed a confession from you -re
your trips to Pakistan or Lebanon or Egypt, So why
should they screw you now?? You dont Know, do you? That IS the point: As in Manila, or a Gulf state
or Haiti: You Dont Know.

Cheers, (while quantities last), –KenS in
LaLaVan :-( / :-)

#2 mark on 10.15.10 at 8:41 pm

keep up the pressure, garth. strangely our real estate agents aren’t quite as hardy as yours. despite trying to paint a rosy picture a week earlier, there’s been a backflip amongst tasmanian agents as finance numbers can’t be disputed and show the local market to be squarely in the crapper.

http://tasmanianrealestatetrouble.blogspot.com/2010/10/down-and-out.html

these realisations only came about after pointed out by myself, then reported on by the local paper. only problem is, while the local agents are looking for sympathy, the local real estate institute can’t get the story straight.

http://tasmanianrealestatetrouble.blogspot.com/2010/10/jekyll-and-hyde.html

#3 Sam on 10.15.10 at 8:41 pm

Pez and Lexington

please do your best to imitate those who used to post on the San Diego and Washington DC bubble blogs circa 2006 claiming prices will NEVER decline, ever, even after the sun becomes a red giant, Canadian real estate prices will continue to rise.

Please rehash the same bogus arguments, recycle the same crap, regurgitate the same cheap wine.

Break a leg gentlemen – I know you’re up to the task, I know won’t let me down. Imitate with the best of ’em.

Do me proud.

#4 Debtisforever on 10.15.10 at 8:42 pm

Ya…things were stable in the US too. Right before they crashed. Huh.

#5 Sam on 10.15.10 at 8:44 pm

Holy crap. The mothership newspaper bedding down with the horned leader of the satanic cult called REIN. What next? An online session with the Hair Club for Men? A guest editorial by the SlapChop felon guy?
______________
What next? You have to ask?

Riverdance !!!!!

#6 Contrarian Canuck on 10.15.10 at 8:49 pm

Well said Garth.

They can dress up a pig, but at the end of the day, it’s still a pig.

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

#7 Grandpa Grinch on 10.15.10 at 8:52 pm

A few weeks, maybe a month ago I posted on here how the loser BIL with a low pay job had recently married my SIL who JUST graduated from engineering school and their first purchase was a house.

As I love my SIL to pieces and loathe my BIL who is both juvenile & mildly retarded, I bit my tongue til it bled. Here is a couple, typical of their friends and peers – who make together about $100K/yr and just purchased a home north of $350K.

Your article today Garth brought home the point – lust is blind, love whips you and the sheeple will be an everpresent part of society.

#8 Devil's Advocate on 10.15.10 at 9:00 pm

“Well, had an interesting day. Started it out in sunshine in Kelowna, jumped into the rented Hummer to head through the mountains, and drove straight into a blizzard. Blowing snow, whiteouts, a 17-degree Celsius drop in temps and fishtailing semis on the summit – followed two hours later by warm breezes and swaying green leaves in the burbs of Vantown.” – Garth

And yet you wonder why and how we can call this Beautiful British Columbia – The Best Place on Earth! Now do you get it? Now do you know why Albertans have it figured out that “you make your money where you have to and you spend it where you want to”?

#9 sutluc on 10.15.10 at 9:05 pm

How the hell does Kelowna support 100+ firefighters?
I see room for downsizing there, in the tighter times ahead.

#10 For Sale: Canada on 10.15.10 at 9:09 pm

“Oh yeah, and I sold a property. Interestingly enough, I listed it on Wednesday and it was gone on Friday. One showing.” – Garth Turner

Does the buyer of the property read this blog?

#11 chariscuro on 10.15.10 at 9:09 pm

Given your bearish take on housing Garth, why were you of all people holding onto a piece of real-estate for so long?

No taunt intended, I’m genuinely curious.

Thanks, Chariscuro

Dumb question. No taunt intended. — Garth

#12 Devil's Advocate on 10.15.10 at 9:10 pm

“You make your money where you have to, you spend it where you want to”. Get it?

There are a whole lotta boomers moving to Beautiful British Columbia – The Best Place on Earth. I don’t see it slowing down. If they don’t get what they hoped for their TO McMansion they don’t care… tit for tat… same market to some degree or they just buy a smaller house here… they are downsizing after all.

Sorry, yes it’s going to slow down here somewhat but fall off a cliff or “pop” nope… just ain’t gonna happen. In fact many of those “snowbirds” are finding health insurance costs prohibitive in the US so British Columbia here we come! we’re going to have to charge them more of course but they’ll buy regardless.

Better move now folks before your place drops so much more “you’ll be priced out of our market”!!!

#13 Devil's Advocate on 10.15.10 at 9:15 pm

I am not shitting you. I’ve seen this before. Retirees don’t choose to not move here because their property values of the homes they want to sell droped so much as because our property values are so much higher. We don’t drop so much as you guys back East just, eventually, catch up. Again; better move now folks before your place drops so much more “you’ll be priced out of our market”!!! Believe it!

#14 JO on 10.15.10 at 9:16 pm

Calm before the storm baby. By March,methinks the US Dollar Index might be down into the 50’s, gold between 16-1800 temporarily, sp500 beggining a sharp decline into the 700’s for the 2nd and 3rd quarter 2011, and official recognition that we are yet again in recession.The main problem is lack of demand…for most things, and especially credit. The massive societal credit card has run out..now its time to pay the piper…Bernanke’s silly QE policy is merely exacerbating the global deflaton despite the short term price inflaton occuring in food and oil, and high asset price inflation happening in major developing countries…soon enough, a major deflationary panic will become apparent if the USD continues to fall as hard relative to the developing currencies..yes,at some point, probably 2013-2015, we will enter an a real global inflation, but currently,we are still on course for a nasty global deflation…if you are a Canadian/Brazillin/Russian/etc exporter, you are already feeling the deflationary impact of trying to export to the world’s largest economy when the USD is falling like a rock…don’t you just love these stupid interventionists ! Markets don’t give you what you expect, but always what you deserve…

JO

#15 Devil's Advocate on 10.15.10 at 9:17 pm

And that’s all I’ve got to say about that ;-)

#16 Prof. ANON on 10.15.10 at 9:24 pm

I just had an interesting conversation with a “rich asian immigrant” who happens to live in Alberta rather than BC. He recently went home to visit his family and China, and I asked him about real estate there. He told me about his cousin who borrowed money from multiple family members, his boss, and a bank to buy a $300,000 rmb apartment. His income? $12,000 rmb a year. Evidently, this is a very typical situation. Also typical (according to him) is real estate developers hiring straw buyers and crowds of people to create a frenzied and irrational buying environment.

So I asked the obvious question: “What happens when these folks can’t make payments?” His response? No one knows. Then the obvious hit me: capitalist China has not yet had their first true economic crisis. Then my imagination took over, and I got really scared.

They still send people to jail for not paying their bills in China, so I’d imagine that debtors prisons will soon be all the rage. Hopefully that’s worst of it.

#17 Hosehead on 10.15.10 at 10:05 pm

#10 I thought the same thing. Imagine going to sign an agreement of purchase and sale with the guy who wrote a book called the “greater fool”!

#18 Hosehead on 10.15.10 at 10:08 pm

#9 have you been living under a rock or did you notice that the Okanagan has been hammered with forest fire after forest fire summer after summer?

#19 InvestorsFriend (Shawn Allen) on 10.15.10 at 10:10 pm

Latest figures for the number of mortgages in Canada that are at least 90 days past due has just today been released by the Canadian Bankers Association.

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

Out of 4,067,000 mortages only 17,119 are reported to be at least 90 days past due. That is just 0.42% or 1 in 237 houses.

It boggles the mind how different this is from the United States, where 11% of houses are 30 days past due and almost 300,000 houses were foreclosed on last year.

The U.S. is 10 times bigger than Canada in population but it has someting like 20 times the number of homeowers past due.

How do these Canadians do it?

Or are the banks hiding the figures? It’s easy for the banks to hide the figures actually. They just make an “arrangement” with the homeowner to allow him to skip a payment or to extend the amortization and voila a late loan is put back in the good books.

Warren Buffett has observed “A rolling loan gathers no loss”

But really the simplest interpretation is that in Canada we simply did not get many people leveraged up to the hilt.

Most Canadians have good equity in their house. Also we can’t walk away from the mortgage without declaring bankruptcy.

These low Canadian delinquency figures are not going to rise unless there is a big increase in unemployment, or if house prices really plunge then people might just take the bankruptcy route.

P.S.

Hi Mom!!

#20 swm on 10.15.10 at 10:20 pm

The spinning of data was ridiculous this time. Month to month for one stat, year over year for the next. This one is the best:

http://creastats.crea.ca/natl/mls/charts/5.png

Can anyone make sense of the chart in the link? The first bar is the Canada average (down 0.2%) but every province is up significantly except NS. How does that add up?

#21 Devil's Advocate on 10.15.10 at 10:20 pm

Congratulations on the sale Garth. Why don’t you share with the DAWGs how you did it amid so many a listing languishing on the market these days. Really no secret for those of us in the know right? And to which paradise in BC will you be moving?

#22 Utopia on 10.15.10 at 10:26 pm

“But despite the butchered info from the industry and the cheerleading from the media, the facts remain: Housing prices are at an all-time high. Canadians have never been so indebted”.—–Garth Turner.
———————————————————-

It is incredible really. Amazing how quickly everyone is duped. A few positive R/E statistics and a few fine points that are coyly manipulated in the presentation of facts to reflect a false reality and then everyone is “hot to buy” again.

Utter stupidity!!!!

They know not what they do. They know not because “they” don’t understand the fundamentals of this market nor can they see how quickly the situation might deteriorate.

The wonder of Real Estate purchasing is that it is a quick emotional high, a weekend sign-up, an easy signature at a weak moment given with a hope and prayer during an event that ultimately results in decades of expenses and consequences.

Pure faith. A leap.

Like quick, easy sex that results in an unintended family. I think that’s why we call it Porn on this site.

#23 Devore on 10.15.10 at 10:31 pm

#16 Prof. ANON

…capitalist China…

Say what?

#24 Junius on 10.15.10 at 10:56 pm

Housing testosterone continues in Vancouver. My favourite these days are the home equity loan companies.

The other day I mentioned one HELOC company whose add was [Deep Voice] “We will lend you money even if your mother won’t.”

I listening to sports radio again today. Now their competitor has a new one to match.

“Want a Loan”. Cue Wagner’s Ride of Valkyries ala “Apocalypse Now”.

“I love the smell of YES in the morning”. Too funny.

This will not end well.

#25 Junius on 10.15.10 at 10:58 pm

#16 Prof Anon,

Ahhhh. The rich Asian who is coming in droves to push Vancouver Real Estate to even higher levels.

Coming in Santa’s sleigh this year.

#26 Dan on 10.15.10 at 11:02 pm

Devil’s Advocate who are you kidding? The Canadian RE market in Canada is the BIGGEST PONZI in the WHOLE WORLD. What do you think would happen to the market if the stupid CONs didn’t allow CHMC to back DEADBEATS who put down only 5%? What if people had to put 20% down? You and I know the housing market would CRASH so hard the US situation would look good. Canada is in the biggest ponzi in the world. here is another fact. The big banks have lent out less then 1% of their money which isn’t backed by CHMC. The banks wouldn’t give mortgages to 90% + of those who get a mortgage. Here is another fact. Banks don’t want to lend people money for business….But If they want a house….NO PROBLEM. A buddy was turned down for a biz loan of $100K but for a CHMC loan for a $600K house NO PROBLEM. How do you spell housing bubble PONZI? CHMC

You stupid CONs have ruined Canada. Canada is looking and acting more like a third world country.

#27 Jane on 10.15.10 at 11:17 pm

Garth, why were you holding property until now?

I always hold property. And it always amounts to less than 40% of my NW. — Garth

#28 Patz on 10.15.10 at 11:22 pm

If you think the mortgage mess south of the border is going to be cleared up with a few strokes of Barry’s pen, you might have another think coming.

Number 1 RE is regulated by state law; there is little the Feds can do. Number 2 there are a wagon load of potentially aggrieved parties who can tie things up for a very long time with lawsuits.

Consider what Adam Levitin, a Georgetown University Law professor who specializes in, mortgage finance told Citigroup and some of their investor/clients. Levitin says the documentation problems involved in the mortgage mess have the potential “to cloud title on not just foreclosed mortgages but on performing mortgages.”

The foreclosure mess has revealed that there was widespread fraudulent conveyance, which means that people living in their homes, paying their mortgages and just glad the sh*t hasn’t splashed on them may be looking for some handi–wipes.

There’s also a moral hazard element to this. There must be millions of people struggling to pay their mortgage who are underwater or close to it. This might be the shove in the direction of not paying their mortgage and saving some of the monthly payments for lawyers fees instead.

Sounds like a good time to be a lawyer.

#29 Cashman on 10.15.10 at 11:23 pm

I love Uncle Ben’s QE, kinda like putting gas on a bonfire. Gee, with a central banker like that who needs enemies?

*********
The real estate folks claim they have ‘competition’ but when a realtor in ontario tried a 1 cent commission gimmick, if he could sell your house with in 1 week the total payable commission would be 1 cent. The idea was novel, and according to the realtor, it was about attracting attention and getting action. But TREB said ‘thou shalt take down yer sign or else’. The realtor had to take down his signs at the ‘request’ of his real estate board. you see folks, there is only competition amongst real estate agents, but no competition for the real estate boards, er uh, cartels. So, if you want access to their vast database, then you have to cow tow to the cartel’s wishes.

http://pqasb.pqarchiver.com/thestar/access/2096623371.html?FMT=ABS&FMTS=ABS:FT&type=current&date=Jul+31%2C+2010&author=Tony+Wong&pub=Toronto+Star&edition=&startpage=B.3&desc=Rules+shut+door+on+realtor+touting+%271+cent%27+listings

#30 Hector's Corpse on 10.15.10 at 11:28 pm

Here in Winnipeg the weather’s starting to cool however prices may finally be starting to melt. Sales of homes in the $400+ range are stagnating. Interestingly prices of higher end homes are starting to slip.

Perhaps a correction is finally starting to take hold. Winnipeg tends to always be the last to the party and the first to leave.

Here’s an interesting estate that recently sold for 100k below list. Pretty impressive how much house $525k can buy in the Peg.

http://keystonematrix.ca/Matrix/Public/Portal.aspx?ID=4425555-27043852-72

#31 Hector's Corpse on 10.15.10 at 11:30 pm

Here in Winnipeg the weather’s starting to cool however prices may finally be starting to melt. Sales of homes in the $400+ range are stagnating. Interestingly prices of higher end homes are starting to slip.

Perhaps a correction is finally starting to take hold. Winnipeg tends to always be the last to the party and the first to leave.

Here’s an interesting estate that recently sold for 100k below list. Pretty impressive how much house $525k can buy in the Peg.

http://keystonematrix.ca/Matrix/Public/PhotoPopup.aspx?tid=1&key=15956990&n=20&mtid=1&L=1

#32 prairie gal on 10.15.10 at 11:30 pm

#110 jman wrote:
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.
_____
Credit-fueled consumption is merely borrowing economic activity from the future. It is not true economic growth.

The fact that a home sold for $400,000 rather than $200,000 is not really a net benefit to the economy. It just means that the buyer is saddled with more debt, reducing his future (and often current) consumer spending, which is offset by a comparable increase of wealth for the seller minus the commission to the realtor and taxes and fees.

Its just a transfer of wealth.

#33 antonio on 10.15.10 at 11:34 pm

Yet another woman of child bearing age pressuring for a home. They will only bring us ruin.

#34 don on 10.15.10 at 11:35 pm

The calm before the storm.

Apparently in their rush to get rich fast without working, the 20 somethings believe buying a house is the way to go….They should really start using those social media devices to start reading the some news based on fact.
This is not going to end well…forget about the student loan debt, that’ll be the least of their worries.

#35 prairie gal on 10.15.10 at 11:37 pm

Devil’s advocate,

I appreciate the allure of the Okanagan but it still can’t compete with Latin America for value for money. Particularly for snowbirds.

#36 Cashman on 10.15.10 at 11:38 pm

Why do the real estate cartels and pumpers hate you so much Garth? Is it possible that your peeling back the curtain to reveal the man pulling the levers on all the smoke and mirrors? Maybe they don’t like you cutting through their lies, ahem I meant spin. There’s even a guy on the radio in T.O. saying he will invest $5k in any ‘A’ list player that calls in on his 1-800 line. The $5k is the cost of his course to teach one about getting deals and putting deals together in real estate and wealth. I say give ME the the $5k and I will buy nothing but gold and silver, forget real estate, too overpriced and the values are falling faster than a girl’s dress on prom night.

Gold and silver are the original and real currencies of the world, despite what the fiat paper money says. Say, didn’t Roosevelt pass a law prohibiting US citizens from owing gold and were told to trade in their valuable gold for worthless paper money? Now that was the second biggest swindle of the century behind Bre-X.

#37 don on 10.15.10 at 11:42 pm

Forgot to mention something, in Qualicum Beach the retired capital of BC. Average age now about 67-70. Some of those retired Albertans are moving back home to be closer to their families (who can’t afford to live in BC) and are trying to rent out their properties at prices the local market can’t sustain and in a market where most if not own. For sale signs everywhere, I guess the smart ones have started to get out now and put their money in the bank.

#38 Connie on 10.15.10 at 11:52 pm

I could probably take your blog and predictions seriously if it weren’t for the tasteless pictures, the blatant sexism, and the gratuitous fear mongering. Other than that it is a fine blog.

Really a man is a wimp because his wife would rather not live in a rented house and he would rather not deny her a stable place to raise their kids? And a real man would do what?

I love that you give 2 choices for the real estate market to stabilize. Sadly I would say that you are missing a part of the puzzle, isn’t increased income another option? Most of the real estate in Canada has a cycle of boom, stagnate, rinse repeat. There are a few Canadian markets that do experience boom, bust cycles, but they seem isolated in this turbulence and driven by external factors.

#39 Jake on 10.15.10 at 11:58 pm

Devil’s Advocate,
Time for another long walk with your wife or a bike ride in the hills. Your addiction to this blog and the brain splatter that accompanies it is starting to get really annoying. I used to enjoy your posts but now the very sight of your name leaves me searching for the down arrow. Do everyone a favour and take some time off.

#40 Nostradamus Le Mad Vlad on 10.15.10 at 11:59 pm


“. . . the horned leader of the satanic cult called REIN.” — Actually, the real name is Ben Bernanke, a very persuasive, kind gentleman. NOT!

“. . . this well-despised blog . . .” — Surely you jest (unless you speak of the CPC and other politicos who hate truth)?

Plenty here, whether posting or not, thoroughly enjoy coming here to get away from the garbage of this world.
*
#1 ken s. — Descriptive and very good post.

Today’s useless piece of info.: This month (Oct. 2010) has five Fridays, Saturdays and Sundays, all in one month; that’s 5 weekends; it happens once every 823 years; and these are considered money bags months. SO LET’S PARTY!!

And now — 4:21 clip Sheeple don’t believe there’s a Midnight Train almost here. 16-year-old guitarist, 15-year-old bassist.

All cycles require humanity changes as well. The west is well on its way to destroying itself. Not such a bad idea.

Germany vs. US No comparison.

No more of that funny flu… (however spelt) going into water?

Panic at the pumps.

Gold “As Murenbeeld said, “The best reserve-currency system is gold, because no other central bank can print the damn thing.”

Fraud MERS is backed by nothing except smelly flatulence.

#41 Devil's Advocate on 10.16.10 at 12:06 am

#32 prairie gal

I’m with ya. Sail boat or land based?

#42 april on 10.16.10 at 12:21 am

You can’t compare our foreclosure rate – we’re just beginning to decline – to the US which has been in decline for 4 or 5 yrs.

#43 Randman on 10.16.10 at 12:25 am

#30 Antonio
“Yet another woman of child bearing age pressuring for a home. They will only bring us ruin.”

Amen brother…..

One day the rest of us will figure it out!

#44 hobbygirl on 10.16.10 at 12:36 am

Most beautiful place on earth?! Far from being patriotic, my personal choice is Florida – great weather, plentiful subtropical ocean beaches, the smell of oranges in the air, and cheap real estate.

#45 Moi on 10.16.10 at 12:47 am

Dearest Antonio,

I am terribly sorry you are unable to get a woman to marry you, or even go home with you if you don’t have that G-note glued to your forehead.

No love,

Moi

#46 Midas on 10.16.10 at 1:16 am

On my continued jaunts around the west side of Van, I see more and more construction or repairs. Not quite the peak of a few years ago, but getting there.

Meanwhile, in N. Van, a friend’s place — listed for a little over a million since August — has not received a single offer. The agent says the higher end stuff is selling fine, as is the lower end. But the ‘mid’ range stuff: nowhere’s ville.

#47 Bobby on 10.16.10 at 1:22 am

I was just up in Qualicum Beach and saw lots and lots of For Sale signs, but very few Sold.

One big development, Crystal Terraces is still just a lot, but were supposedly over 70% sold over 2 years ago.

No, there is no big movement of retirees out there. If they are, they are not buying houses.

Poor old Devils Advocate. Nothing is selling so he has lots of time on his hands.

#48 Vancouver Mid-Month MLS Forecast on 10.16.10 at 1:22 am

Here’s the projection for October in the Greater Vancouver Area:

Total Sales = 2,238 (-39.6% YoY from last year)
New Listings = 4,092
Current Sell/List = 54.7%

Slightly better than September but still more listings than sales. Panic should start to bite in November.

#49 april on 10.16.10 at 1:22 am

#37 Connie your completely misinterpreting Garth’s messages.

#50 Sam on 10.16.10 at 1:42 am

#19 InvestorsFriend (Shawn Allen) on 10.15.10 at 10:10 pm

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

Out of 4,067,000 mortages only 17,119 are reported to be at least 90 days past due. That is just 0.42% or 1 in 237 houses.
________________________________

I’ve been reading your posts & wondering the same thing.

It would have been nice to see detailed breakdowns of how things proceeded, vis-a-vis the type of data you’re looking at, in Ireland & UK & US & Spain & Japan & Latvia & so on and so on and … when they kaput-ted or belly’d-up

So what’s happening in Canada?

Mortgage servicers incentivized to hide delinquencies?

Mortgage holders invoking mortgage terms to lower payments and raise balloons?

Holders more willing to get loans on the side – friends & family – to maintain payments until now?

#51 MKUltra on 10.16.10 at 1:46 am

um…. I…. passed out on my computer…. and… like woke up on this blog??…wtf? dude…like get me the outta here!

#52 Camcool on 10.16.10 at 1:48 am

RE: #39

“Today’s useless piece of info.: This month (Oct. 2010) has five Fridays, Saturdays and Sundays, all in one month; that’s 5 weekends; it happens once every 823 years; and these are considered money bags months. SO LET’S PARTY!!”

I read what you posted, and it didn’t sound right to me…

A quick check on any calendar and you find July 2011 and March 2013, all with 5 fridays, 5 saturdays, and 5 sundays.

So much for the once in 823 years bullshyte!!!

#53 gold bugger on 10.16.10 at 1:52 am

DA, do you honestly believe that someone living in a big, comfortable house in Alberta for $600K is going to sell to buy a moldy rat shack in Vancouver for $600K?
The weather isn’t that good. For every Prairie person escaping the bitter cold there are 4 who would eat a bullet if they had to endure 395 days of rain.
Vancouver is only nice relative to much of wintery Canada. It’s a rainy sh!thole relative to the rest of the world. Just look at the U.S.: how many people clamor to live in Seattle? Answer: nobody.
Vancouver is the most over-rated, over-crowded, foreigner-infested city in North America.

#54 pez on 10.16.10 at 2:18 am

doesn’t garths selling his property so quickly get you nervous that RE is indeed a good investment? No handwringing or gnashing of teeth as a poor, unloved property sits on the market for a year languishing because no one is buying….. nope, just nice quick easy, tax free money…
As sad and pathetic as it is, RE is going nowhere but up…
garth has proven it…

I proved how to sell a property. — Garth

#55 AxeHead on 10.16.10 at 2:19 am

Devils Advocate…from previous post…

“Leave your hourly minimum wage jobs at Walmart and join in the thievery under the CREA umbrealla.”

Realtors like yourself have a lot in common with Walmart workers. You are in a service industry. You manufacture nothing, you do not provide any real ‘wealth’ to the economy, your desire is for your customers to spend money, and you have very little training nor require much education to perform your work.

But unlike Walmart workers, you don’t have an honest industry. You cannot be trusted, you are totally biased, and are seriously overpaid. Your motive is skewed to ALWAYS buy…regardless of the danger involved (finacial ruin, regret, pain). I’d rather be a Walmart minimum wage worker getting an honest day’s dollar than a silicon suited snake oil salesman preying on the next virgin.

I have bought and sold homes with and without a realtor. It amazes me how little a realtor does and how overpaid he is. The real work is done by the lawyer.

Your days are done, you are a dinosaur, and your profession is whimpering and dying. Time to get your hands dirty and get a real job….idiot.

#56 Oleksandr on 10.16.10 at 2:49 am

Best delusional place on Earth

Five BC cities won the prize to be Canada’s biggest crime centers

http://ca.news.yahoo.com/s/yahoocanada/101015/canada/canada_s_most_dangerous_and_safest_cities

#57 FYI on 10.16.10 at 3:43 am

YESTERDAY post 159 Jess

You didn’t do your homework. After 3 years yes they would get 3/40 of a full OAS. But you forgot about the GIS (Income supplement). The less OAS you get, the more GIS you get to bring their income to a minimum level. So does not matter if you get $100 per month OAS. You would get lots of GIS. The ignorance on this blog sometime amazes me.

#58 Hiker on 10.16.10 at 3:50 am

I am not sure what is happening in other parts of Canada or BC, but in Vancouver, or better said Lower Mainland sales are still in my opinion really high. Even now, more and more of people I know are going in a market buying. I thought that prices in GVRD were way out in 2004, and since than I am looking at the market when it is going to come to a sense, but no avail. It seems that Vancouver has an unlimited supply of people who are willing to put unbelievable amount of money in housing. I know this sounds stupid, but I have been looking at this for 6 years now.

#59 Investx on 10.16.10 at 5:52 am

“I always hold property. And it always amounts to less than 40% of my NW. — Garth”

Why hold during a long “melt” even you prophesized?

Because I can. — Garth

#60 Investx on 10.16.10 at 6:02 am

Devil’s Advocate,

Most of your posts are annoying and worhless, as many are noting. You’re only contributing to the poor reputation of RE agents.

#61 JET on 10.16.10 at 6:12 am

#20 swm –
Great observation but that just illustrates the distortions of statistics. The only way the chart could make sense is that the sales of high-priced homes are dropping much faster than those of low-priced homes.

Take this example:

Last year:
1000 homes in area 1 sold for an average of $1,000,000
1000 homes in area 2 sold for an average of $100,000
The aggregate (i.e. national) average price is $550,000

This year:
700homes in area 1 sold for an average of $1,100,000
900 homes in area 2 sold for an average of $110,000
The aggregate (i.e. national) average price is $543,125

Well, in each individual area the average price has increased 10% respectively. But, in aggregate (nationally), the average price has dropped 1%!

I’m in no way defending the CREA because they should clearly illustrate this better but it is not in their interest to do so.

The faster pace of decline for sales of higher-priced homes tell me that the dudes with major money (like Garth), who are presumably more sophisticated (financially anyways), are leading the way out. I can’t explain the remaining dudes who drove the higher-priced homes even higher, only to say, presuming they are sophisticated or that they have major money is wrong!

Have a great weekend….

#62 Northern_dirt on 10.16.10 at 6:30 am

#39 Nostradamus Le Mad Vlad

“Today’s useless piece of info.: This month (Oct. 2010) has five Fridays, Saturdays and Sundays, all in one month; that’s 5 weekends; it happens once every 823 years; and these are considered money bags months. SO LET’S PARTY!!”

July 2011, March 2013, Aug 2014…. I don’t know where this “every 823 years” BS came from.. but a little research and you can see its wrong.

#63 Brian1 on 10.16.10 at 6:42 am

The foreclosure situation in the states only proves that the more government tries to do something the worse it gets. It only confirms that over time house prices will fall 70%.

#64 bigrider on 10.16.10 at 6:47 am

#32 Antonio-love your posts

Yup get them when they are really young, beautiful and naive or past 40 when they are divorced,broken, dis-illusioned and ready to bang like porn stars.

Avoid that 28-40 age range when their seed seeking ,baby making objectives are a neon sign saying ” Bring it here and I will ruin your life”

#65 Moneta on 10.16.10 at 7:06 am

Sadly I would say that you are missing a part of the puzzle, isn’t increased income another option?
—–
In the US, we used to be able to get the average household income on the White House website. But a few years ago, when Bush was in power, it was taken away after being in decline for a few years.

Everyone looks at personal disposable income, which has been going up, but I think it’s misleading. Instead I look at household income which has been steadily going down for quite a few years. What is more important for household spending, the 2-3% wage increase of the spouse losing his/her job or the hours being cut? Right now hourly wages are up but household income is down.

The population is ageing so when you do a weighted average, the average household income should decrease while debt is up there in the stratosphere. And debt repayment depends on future income. We still have a few years of grace, while the largest group of boomers is 45-50 in their peak earning years, but after that, not sure we’ll have increasing earnings unless inflation hits.

#66 Moneta on 10.16.10 at 7:08 am

Correction:

What is more important for household spending, the 2-3% wage increase OR the spouse losing his/her job or the hours being cut?

#67 BrianT on 10.16.10 at 7:17 am

#39-Nost-imagine if ENRON had broke apart right now instead of years ago-it is quite likely a federal bailout would be arranged using schmuck taxpayer money and the overriding priority would be to keep the facts from the sheep. Many of these financial players are using the IDENTICAL fraud strategies used by Enron without any federal guv hassles at all-aided by continual infusions of taxpayer funds.

#68 Moneta on 10.16.10 at 7:20 am

I should specify that HH income in the US has been dropping while in Canada it has been holding up. Many variables come into play and the CAD appreciation is one of them.

But it’s logical to expect Cdn HH income to follow the US experience. Protectionism and arbitrage will do the job. The US is already repatriating its costly scientists from our pharmas in Montreal!

#69 Taipan on 10.16.10 at 7:45 am

This is for hosehead.

Im a developer in Australia of 25 years standing. I settled on a $14m project yesterday to give you an idea. Im preparing our company for interest rate increases next year of 1.25%. That will smash our bubble.

Canada has its own problems and it will hit also over 2011. Maybe not interest rate increases because of the US market but my own feeling is that the US will be revealed to be in “recession again”. This will be Canada’s first real recession of the GFC

Hosehead dont sucumb mate.

I have seen prices fall 60% in property. Survived 3 times facing bankruptcy going within 1 hour on one occasion. It is soul destroying, and leaves you feeling a shell of a human, and everybody looks at you as if to say, how come you stuffed up so bad!

Yes ive done well in property, but ive also been smashed to hell in property. It makes you wary and cautious.

My own outlook. Next two years will be very tough. Property markets will fall in Australia and Canada. I have and am, locking in major contracts to get me through the next 3 years. Property sales will be hammered. (Canada and Australia for different reasons.)

The world will not end, it wont be armegeddon, but a lot of people will be wiped out by buying property at the top of the market.

I make nothing out of this, save, hoping somebody else doesnt suffer the pain and misery i suffered for 10 years in the 90’s.

Cheers mate.

#70 T.O. Bubble Boy on 10.16.10 at 7:50 am

Email alert from my discount broker yesterday:

{We} would like to inform you that the following New
Issue has just been announced.

Whistler Blackcomb Holdings Inc.

Short Description: IPO of Common Shares
Price: To be determined
Settlement: Expected during the week of November 1, 2010.

It will be interesting to see if this IPO is successful. After the debacle of the Olympic Village condos, I wonder if people will be scared of throwing money at another property linked to the Vancouver games.

http://www.vancouversun.com/business/Whistler+Blackcomb+sold+public+company+after+Olympic+losses/3654095/story.html

#71 morfeus44 on 10.16.10 at 7:53 am

Garth,

Have you been moonlight photoshopping for other blog dogs?

http://deadspin.com/5665072/athletes-cheat-because-they-believe-so-highly-in-themselves

#72 TorontoBull on 10.16.10 at 7:55 am

I think that the September increase was reported as seasonally adjusted…
btw is it me or is there an explosion of new listings in Toronto?

#73 Prof. ANON on 10.16.10 at 8:09 am

@ #23 Devore

Capitalist, Socialist, Communist, Democratic are not distinct categories. Over the past decade or so, China has been evolving into a new hybrid form of government that the world has never seen before. The capitalist-communist state. A country that is run like a business with elements of both a command and market economy.

#74 Nostradamus jr. on 10.16.10 at 8:22 am

Garth, please take your flock, lead them to the Holy Land, Las Vegas Nevada.

Then change the name to……Turnerville

Where everyone owns a Hummer, wears cowboy boots and where one can ride their Harley 24/7.

Just watch out for the coyotes.

Nostradamus jr.

#75 BrianT on 10.16.10 at 8:24 am

#75Prof-you must be Rip Van Winkle. ALL of the mortgage funding in the USA at this point is taxpayer paid for, and the majority of the mortgage funding in Canada. This is just one example. Communist, Fascist, call it what you want but it is what it is.

#76 David B on 10.16.10 at 8:30 am

Something new every day south of the border, lucky us we have the Candian Shield eh.

Damage From Mortgages Spreads

The unfolding foreclosure-processing debacle is causing bank stocks to slide and putting millions of delinquent borrowers in limbo, as modern finance collides with the legal system

#77 BrianT on 10.16.10 at 8:40 am

When a MSM mouthpiece like Krugman openly asks if the USA operates under the rule of law things are starting to get interesting http://www.nytimes.com/2010/10/15/opinion/15krugman.html?_r=1

#78 JM in London on 10.16.10 at 9:11 am

#57 TheBigLebowski on 10.16.10 at 2:38 am

Some of my vulture clients are doing just fine. Yes, foreclosures have risk attached but there is still opportunity with out danger. There are distressed properties NOT in foreclosure for instance that have and (more importantly) ARE working. This kind of buy has risk yes, but the people I’ve helped are prepared to loose if if doesn’t fly. They are well versed in due diligence and do their homework (I’ve heard some have the illusion they can “armchair” this from home – BAD idea) by going, kicking tires, turning over rocks etc…and have met with some modest success.

Yes it can seem like a dice roll and is if taken lightly but it can’t all be painted by the same bush either

#79 Devil's Advocate on 10.16.10 at 9:12 am

#52 gold bugger

Who said anything about Vancouver. Beautiful British Columbia – The Best Place on Earth is a big Province much of which is in rain shadow. We actually have Canada’s only desert.

“Ya makes yer money where ya have ta, ya spends it where ya wanna”. How many times do I have to repeat myself to you people; I’ve seen this before – what will slow the pace of Canadians moving to British Columbia is not the price of BC dirt so much as the fall in the price of their own dirt where they reside today – they get priced out of our market in periods of economic recession because the price gap widens.

Boomers are an aging group; they don’t have as much time left. If they don’t do it now they may never be able to. Hell I’m seeing this happen on a much smaller scale in my own city where Kelowna South properties, and older more central area of the city where boomers seem to want to move to for convenience etc, are still experiencing price increases while prices in other areas of the city are falling. The price gap is widening and thus the opportunity for many is passing.

People bought anything at the peak. Today the traditional forces are extracting their toll as we work back to equilibrium. But “equilibrium” does not mean homogeneous pricing. Equilibrium means a return to such fundamental influencing factors as “Location, location, location”. Guess what… when it comes to location, regardless what your personal bias might be, British Columbia gets more votes on a National and International scale than the rest of Canada.

This is really simple stuff guys. It is intellectually dishonest to talk of “averages” when speaking of real estate values. For there to be an “AVERAGE” 10% price drop some prices fell some might actually, probably, have risen. Each property, each neighbourhood, each city, each province is unique. That does not mean to say it is different here as surely it is not. Human emotion (greed and fear) lives here just as anywhere else. But most of our economic failing can be attributed to that of our neighbours not ourselves and in that we are relatively resilient just as Canada is holding up relatively well compared to the US right now and if the US economy does pick up soon we will never get there.

I’ve seen this before. Garth is right – this is not a double dip, we never emerged from the first fall from grace. That means we are two years in already. These cycles last 7 to 10 years peak to peak. That means we are 5 to 7 years away from another peak if history is any indication. By the next peak many Boomers will have given up on retirement plans as they lost a whole lot of opportunity in the wait. Oh and speaking of history, in every economic failing preceding this people like you said “this time it’s different” just as in every economic peak people said “this time it’s different”. Recessions never last and Good times never last… suck it up, accept it, don’t over analyze it do death. This is “life” you are wasting it. All you’ve got is time. Roll with the punches and learn from them.

This time is no different; it all comes down to fear and greed. People buy frantically at the peak because they fear if they do not they will never get in as prices continue to rise. People refrain from buying in a trough because they fear if they do prices will continue to fall and they will lose thousands of hard earned equity. Fear and greed it’s the same old same old thing in everything.

I love this blog… you get to see inside the heads of the extreme left… or right as the case may be. It’s an informative place to visit. I certainly don’t agree with most of the Blog DAWGs, that does not make them wrong. It’s a human behavior thing, one that is essential to my business. The purchase and sale of real estate is a phenomenally emotional transaction. People don’t realize how obvious they are. I can tell when we hit the right house as soon as we cross the threshold by watching the mannerisms of the buyers before I even cast eyes on the structure itself.

Mine is an interesting job of which 80% I enjoy immensely. The other 20% is what makes it a job and that which I get paid for. It’s not about houses, it’s people’s lives a most precious part of their lives – home. There is a lot of emotion in that “home” just read these blogs where no place is it more clearly demonstrated. #62 Investx said my participation on here is worthless. Maybe… maybe not. In any event you don’t have to read what I have to say and to be true often I am messing with your heads to enjoy the predictable reaction. Really it does get tedious, reading some of the DAWGs incessant barking at times. Not all are DAWGs though, some posters contribute much. It is an interesting online community which is by no means a reflection of the mindset of the general population of this country. That being said… I think some of you DAWGS need to get out a little more and experience life, open your eyes and realize it just ain’t nearly as bad as you seem to believe. But then I live in Beautiful British Columbia – The Best Place on Earth!!!

#80 Devil's Advocate on 10.16.10 at 9:30 am

Poor old Devils Advocate. Nothing is selling so he has lots of time on his hands.#46 Bobby

Au contraire Bobby, it is times like this when I am busiest for a number of reasons;

1.) I need to work harder to maintain my income

2.) I need to work harder to increase my share of the market. (this is different than #1 – if you think about it you will get it)

3.) This is the type of market in which I thrive as that of the recent past was just plain stupid and I don’t like “stupid” as “stupid is as stupid does”.

4.) Buyers and Sellers are more cautious in markets like this, which is a good thing but it does lengthen and make more difficult the task of my job.

My work hours of late have increased from 40+/- hours a week to 60+++ and that is just Monday to Friday not accounting for weekends. And as when I was putting in 40+ I am always on call. I have less free time now than I’ve had in a long, long time. Don’t get me wrong, I am not complaining. Fact is I’ve been looking forward to this market shift.

So Bobby, yes the markets are in a state of decline. That I do not debate and that I actually welcome. But that has not caused me lack of work… not in the least as it has actually increased my work load. I know it’s a difficult concept for you 9 to 5 salary paid folk which you just can’t get your head around.

#81 Devil's Advocate on 10.16.10 at 9:33 am

Poor old Devils Advocate. Nothing is selling so he has lots of time on his hands.#46 Bobby

Au contraire Bobby, it is times like this when I am busiest for a number of reasons;
1.) I need to work harder to maintain my income
2.) I need to work harder to increase my share of the market. (this is different than #1 – if you think about it you will get it)
3.) This is the type of market in which I thrive as that of the recent past was just plain stupid and I don’t like “stupid” as “stupid is as stupid does”.
4.) Buyers and Sellers are more cautious in markets like this, which is a good thing but it does lengthen and make more difficult the task of my job.

My work hours of late have increased from 40+/- hours a week to 60+++ and that is just Monday to Friday not accounting for weekends. And as when I was putting in 40+ I am always on call. I have less free time now than I’ve had in a long, long time.
So Bobby, yes the markets are in a state of decline. That I do not debate and that I actually welcome. But that has not caused me lack of work… not in the least as it has actually increased my work load. I know you 9 to 5 salary paid folk have difficulty understanding this.

#82 Devil's Advocate on 10.16.10 at 9:35 am

#38 Jake

I hear ya man. You are right. Thanks for the heads up.

#83 bigrider on 10.16.10 at 9:42 am

Devils Advocate

I would say that the average percentage price increases in the better parts of T.O mirror within 5% more or less the average % price increases experienced in Vancouver over past ten years or so.
Granted similar properties sell for more in Vancouver but they started from a higher price point at the beginning of the decade anyway.
The only issue I have with your analysis is the perception you give that price increases in BC are outstripping Ontario, specifically TO.

#84 Got A Watch on 10.16.10 at 9:54 am

Grandpa Grinch – “$100K/yr and just purchased a home north of $350K” – sounds like, at a home value of 3.5:1 to income, they are not too far off 3:1, the traditional metric. We get you don’t like your BIL, but I don’t see a huge problem there. That ratio is not wildly out of line. First house I bought was more like 4:1, and I was single, and that was years after the local market in the area had crashed. If it was 15:1 like Vancouver I could see your concern. What city is this in?

Connie – “real estate in Canada has a cycle of boom, stagnate,” – did a Realt(ho)r(TM) tell you that? Umm no, it’s boom then bust. The “stagnate” comes at the top, for maybe a year or two, and at the bottom, for 2-4 years. When real estate in Ontario crashed in the early ’90s, prices did not recover to those levels until around 12 years later. Down for 4-5 years, then flat for another 4 or so, then a gentle rise for a few. You missed half of the sine wave there.

Midas – “listed for a little over a million…the ‘mid’ range stuff: nowhere’s ville” – Isn’t that Vancouver’s whole problem: For a $1M home, that should require a family income of $320K or so – how many families in Van have that income or higher? If you have $1M ca$h to pay on a “middle” range home, you aren’t “middle class”. That home should be priced at $360K, not $1M, and I am being generous assuming a price of 4 x average income of $90K. But, but, but, it’s Vancouver! Never mind, carry on.

Prof. ANON – “The capitalist-communist state. A country that is run like a business with elements of both a command and market economy.” That would be, umm, fascism, then, wouldn’t it? The only thing Communist about it is the name. Marx is ashamed.

——————————————————–

How about that CREA ad campaign running in all sorts of places? Nothing like insulting the intelligence of every Canadian in a desperate attempt to sell your worthless “services”. Real estate is sooooo complicated you, consumer, could never understand it without the benefit of a “professional” scumbag to explain it all to you. Don’t even try to think for yourself, call a “Realt(ho)r(TM)” instead, it is just beyond you, you simpleton. I don’t think I have ever seen any other industry group advertise in this manner. Do you want to do business with a group that tells you to your face you are too stupid to understand all the angles on your own?

Which brings me to (again), “Devils Advocate” – Garth, why do we have to be subjected to the constant bullshit bombardment?

24 totally vacuous comments in the last thread. That’s 23 too many. 8 more and counting today. 100 comments per day won’t make the lies into truth. How about a 2 comment per day max limit. It takes a lot of mouse wheel scrolling to skip over all those wasted words. CREA must be paying by the word or something. Out of their “Lying Liars Propaganda Budget”, aka advertising.

#85 jman on 10.16.10 at 10:04 am

#31 Prairie Gal that is true but only a part of the overall picture. When there is money to be made in housing the developers build. Construction jobs, infrastructure, contractors, building supply, appliances, furniture, small business and services. When real estate prices are in decline all that related economic activity slows or stops. Your premise is something else entirely which is what is the basis of growth. Population growth and more important expansion of the money supply. If and when housing declines there will be a noticeable decline in economic activity. Sorry for saying so but thinking there will not be an economic decline along with a housing melt is naïve.

#86 RickOShea on 10.16.10 at 10:21 am

on the topic of house sales…

economics is not like gravity (a inexorable law of nature)…

it’s people who make this sh*t up – often evil people.

in nature, sure – what goes up, must come down, but in the economy for the most part – what goes up does whatever the hell folks like bernanke (US Fed) want it to do.

other than the ponzi scheme model, the economy we have today makes no sense which makes it hard to predict how things will unfold especially when outfits like the Fed are micro-managing it with macro dollars conjured up on a computer keyboard.

#87 Basil Fawlty on 10.16.10 at 10:22 am

“Vancouver is only nice relative to much of wintery Canada. It’s a rainy sh!thole relative to the rest of the world. Just look at the U.S.: how many people clamor to live in Seattle? Answer: nobody.
Vancouver is the most over-rated, over-crowded, foreigner-infested city in North America.”

Did someone from Vancouver recently run over your cat?

#88 Crack Shack Inc. on 10.16.10 at 10:27 am

#58. Ya, that crime thing is just a by-product of BC’s largest industry: Narcotics. They should call it British Colombia. But who could blame us? How could we afford a decent family home with legal activity? And if they legalize drugs and prostitution in North America , we’ll be on the forefront of this ‘new economy’ and housing will once again soar in BC. We’re unstoppable. Finally our arrogance will be justified. Maybe BC will mean Better Canadians!! Muhahahahahaaa.

#89 allister on 10.16.10 at 10:30 am

To the firefighter I say this.

If you get a 35 year mortagage and 90% is interest to the bank, how is that different than paying a landlord?

Either way the monthly nut is not equity savings, both payments are actually expenses.

#90 TheFirstRick on 10.16.10 at 10:31 am

DA, please stop washing your medication down with vodka!!!

#91 rory on 10.16.10 at 10:43 am

#81 Devil’s Advocate you said: “We actually have Canada’s only desert”

Whoops! …another fact without checking but you are kinda right but kinda wrong – more self-marketing by BC for image more than anything …just like Realtors – roflmao …keep the nails in the coffin coming.

http://en.wikipedia.org/wiki/List_of_North_American_deserts

Pics of a Manitoba desert: ttp://travel.webshots.com/album/569003813LMuocv

All I did was google Canada deserts and Manitoba deserts… simple …7/3% please.

#92 Bobby on 10.16.10 at 10:49 am

For Devils Advocate,

Sorry my friend but you have got the wrong guy. I have a tee time for just before noon on Wednesday. Not everybody works 9 to 5

#93 andrewS on 10.16.10 at 10:57 am

#37 Connie

“Sadly I would say that you are missing a part of the puzzle, isn’t increased income another option? Most of the real estate in Canada has a cycle of boom, stagnate, rinse repeat.”

Unfortunately in order for this to happen incomes would have to double or even triple in short order. Say 5 years. Even that would probably be too late to save the market as it’s already going down and incomes would have to increase significantly in the next few months to head off a big correction – if incomes rise very rapidly in a short timeframe then a 2009-style “save” might be possible.

Unfortunately I look at the economy and don’t see that happening. Either in six months or five years. Incomes might be up 10% in a few years but that won’t rescue a housing market that’s more than doubled most places, and tripled in some.

The other factor is that that sort of income growth happens to coincide with dangerous inflation. You can bet that 15% annual income growth would be met with similar inflation, which would be suppressed by the powers that be by cranking interest rates up as high as needed in order to stop it. You think a 400,000 mortgage is bad at 3.5%, try paying it at 20%.

That 2000/month mortgage becomes 6000/month. Meaning ownership costs triple while incomes only double. In the meantime the inflation would prove catastrophic to the economy and buyers would have difficultly saving a downpayment that loses 1% of its value every month.

No, we can’t inflate our way out of a housing bubble. Sorry.

#94 Devil's Advocate on 10.16.10 at 11:12 am

Time for me to take a sabbatical from these forums once again. Again thanks Jake for the heads ups. But before I go I would like to make something very clear to the DAWGS about the business of real estate:

Make no mistake, this is indeed my market. This is the market in which I thrive. I have been waiting for the return of these dynamics for 5 long years.

The old adage “Make hay while the sun is shining” may work in agriculture but it has no place in my business model.

When the “sun is shining” in real estate it is merely commenting on the predominance of Greater Fools. “Stupid is as Stupid does”. My clients are not stupid.

It’s been easy to sell real estate these last five or so years. Any REALTOR could do it. But in most cases they were not adding value to the transaction, they were merely taking advantage of fools as those fools panic-buy, believing if they did not then they would never be able to as prices rose. Such REALTORS are short term thinkers, transactional REALTORS here for today to “make hay while the sun is shinning”. I am here to build long lasting relationships with my clients, relationships which will carry me through the bad times. In order to do that I must earn their trust. Earning trust is a process of proving ones self time after time.

Yes this is a tough market and it’s going to get a whole lot tougher before it gets better. Fools will come to realize their folly. Transactional REALTORS will leave the business as they can no longer compete. That’s business; those REALTORS had their chance and now are facing a business climate in which they don’t have the resources to endure. Those resources they lack are not financial, those resources they lack are a loyal client base of which the trust and respect has been earned in good times and bad. Theirs is a customer base of bitter Greater Fools who resent them for what they allowed themselves to do to themselves.

I am not alone. There are many REALTORS like me who will thrive through these trying times… unfortunately this industry, in good times, attracts many a parasite. But rest assured trying times such as these, which will be with us for another 5 years at least, will cleans our industry of those short term thinkers.

It’s all good. Ain’t free enterprise grand!

#95 Sam on 10.16.10 at 11:14 am

#55 AxeHead on 10.16.10 at 2:19 am

Devils Advocate…from previous post…

“Leave your hourly minimum wage jobs at Walmart and join in the thievery under the CREA umbrealla.”

Realtors like yourself have a lot in common with Walmart workers.
______________________________
He wrote that, huh? Insult the easiest targets.

he feels so bad, so peronally worthless about being a leech on society (that WM workers are not) that he feels the need to maliciously and casually insult them to prop up his fragile ego

Don’t it make you wonder if he goes around beating up autistic & Downs Syndrome kids?

#96 Connie on 10.16.10 at 11:18 am

Got A watch: Based the boom, stagnate on the numbers of average home prices in Ottawa. I was just making the point that his logic is flawed, that there are only 2 ways out of the high real estate prices.

April: What am I misunderstanding?

#97 lexington on 10.16.10 at 11:25 am

Remember kids, Vancouver’s price to income is now equal to that of San Francisco’s and New York City’s. This is after the US real estate crash. To equal San Fran’s peak value reached during the height of US real estate, (13 price to income ratio) Vancouver real estate would have to rise another 30%. And according to many people, Vancouver has become more desirable than New York or San Fran. It is rated as one of the world’s top cities to live in, while San Fran and New York don’t even make the list.

#98 joseph on 10.16.10 at 11:27 am

“Interestingly enough, I listed it on Wednesday and it was gone on Friday. One showing.”

Garth you always talk about how illiquid real estate is. This doesn’t sound illiquid… Please advise.

#99 tk on 10.16.10 at 11:31 am

I live in a “beautiful Kelowna”. Been here for over 8 years, sold our house in may this year, now Happily renting.
Seen some interesting things lately in housing market more and more foreclosures happening in Okanagan (but unlike in the US you do not see the “FORECLOSURE” sticker on the for sale signs after the are put on the market).
Know someone who bought such a property (260 K) fixed it a little and was able to sell it to a fool for 360K.
I guess that after expanses and taxes he was able to make a few grand, but was really worth it, stress almost killed him.
Talked to another guy recently who has a property for sale in beautiful Westbank (West Kelowna)
listed it for 899K a few months ago
dropped the price recently to 599K no takers.

Moving to Woofville NS next year. A-WHOOOOOOOOOOOOOO!

Good luck Garth in Lunenburg if You moving there.

#100 joseph on 10.16.10 at 11:36 am

Wow this blog is riduculous, Garth why do you let people get away with these moronic statements.

Dan, criticizing the conservatives for housing policies. They are identical to the liberals and the NDP for Gawd sake. Is Dan really that stupid???

What about Grandpa Grinch, criticizing the purchase of a $350,000 home by a family making $100,000..???

3.5 times income is extremely affordable. If that was Canada’s average number then you wouldn’t be running this blog would you?

#101 WINNIPEGER on 10.16.10 at 11:45 am

Prices of higher end homes in The Peg are definitley stagnating. Prices btw 350 and 650K are not moving as before. The prices will start dropping at the high end here first—then trickle down slowly. Once news of the meltdown hits hard in T.O. , Calgary and most of all Vancouver, peggers will finally see our market suffer.

A property tax increase is next after our mayoral election. Re-assessment was done a couple years ago. This surely wont help. Especially higher end homes.

Peg Boomers….. get out of the market now—

#102 Timing is Everything on 10.16.10 at 11:51 am

#28 Patz said – “Sounds like a good time to be a lawyer.”

It’s always a good time to be lawyer.

#103 Taxpayer like everyone else on 10.16.10 at 12:00 pm

31 Prairie gal – I recall the original post actually spoke of new construction. What % of the economy this is I dont know. Your comment @31 looks to be referring to a sale of an existing house, for which you would be correct – no growth. But the reasoning of borrowing and wealth transfer is not correct. Economic growth occurs when something new (good or service) is created (or sold according to some). It does not matter whether the consumption is brought forward by debt. Likewise, if there is no debt incurred, then growth was held back previously while the money was saved to provide for the future consumption.

Please dont underestimate the effect a down RE market can have on the economy in general. Many people are affected. It kinda snowballs. I’ve been there. It sucks.

Curious to know what part of the economy you work in.
I’m guessing Health/education/govt maybe ag. Probably
not nat res, construction, manufacturing.

#104 Jon B on 10.16.10 at 12:18 pm

Enjoyed your talk last night in Surrey. Very good presentation on a ton of related financial issues. Thanks.

#105 Timing is Everything on 10.16.10 at 12:25 pm

#56 TheBigLebowski said – “Hope the blog worshipers”…

Ha! Agreed. Everyone has to make their own decision(s). If everybody’s right, nobody’s wrong??

Garth is as relevant to me as you, or anyone else on this blog. The thing is, at the end of the day, ya gotta live your own life and make your own decisions.

This blog still amuses me…mostly because of the ‘advice’ flung at folks they have never met, or know anything about. Kinda getting Gerry Springer-ish.(IMO)

“[The Gerry Springer Show] started as a politically-oriented talk show, a longer version of Springer’s commentaries. Guests included Oliver North and Jesse Jackson, and topics included homelessness and gun politics.
In early 1994, Springer and his new producer, Richard Dominick, revamped the show’s format in order to garner higher ratings. The show became more and more successful as it became more and more lowbrow…” (wiki)

#106 Vancouver SUCKS on 10.16.10 at 12:37 pm

Vancouver SUCKS. Nasty people, nasty weather, delusional, and overpriced for now. That place is going down.

#107 Keith in Calgary on 10.16.10 at 12:49 pm

Regarding mortgage arrears………you guys are looking at 2 different things………

30 day arrears in the US, versus 90 day arrears here…….

The CBA did not release the 30 day category, and I know from one of my banker buddies that they are all “cooking the books” right now………or committing fraud, as I would call it.

All of the major banks have “payment forgiveness programs” currently in place to bring late mortgages up to date and to keep them from showing up on the stats as being behind. It stems from something as simple as giving a homeowner a small line of credit or overdraft to cover their payment, forgiving 2-4 late payments and doing an amendment agreement to the mortgage, or even re-advancing more proceeds on the original contract (the difference between what they borrowed and what they owe) to bring them current and start again.

It’s nothing more than a new form of institutionalized mortgage fraud……..

#108 canuckme on 10.16.10 at 12:54 pm

In a declining market realtors do quite well thank you. Like I have always said there are fools when prices are at their highest and fools as prices come down. Realtors will always be there to take the fools money.

#109 dark sad person on 10.16.10 at 1:50 pm

And some here are still promoting buying US housing-
Unbelievable-

Throw a hundred thousand at it and pray-

There is no recourse-as far as the US Gov, goes-
They’ve had their asses covered for years-
I think their disclaimers/liability clauses should convince anyone who can read-that you’re on your own-

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

A significant number of material weaknesses related to financial systems, fundamental recordkeeping and financial reporting, and incomplete documentation continued to (1) hamper the federal government’s ability to reliably report a significant portion of its assets, liabilities, costs, and other related information; (2) affect the federal government’s ability to reliably measure the full cost as well as the financial and nonfinancial performance of certain programs and activities; (3) impair the federal government’s ability to adequately safeguard significant assets and properly record various transactions; and (4) hinder the federal government from having reliable financial information to operate in an economical, efficient, and effective manner. We found the following: Material deficiencies in financial reporting (which also represent material weaknesses)and other limitations on the scope of our work resulted in conditions that continued to prevent us from expressing an opinion on the accompanying consolidated financial statements for the fiscal years ended September 30, 2005 and 2004.

As a result of the material deficiencies in the federal government’s systems, recordkeeping, documentation, and financial reporting and scope limitations, readers are cautioned that amounts reported in the consolidated financial statements and related notes may not be reliable.

Because of the effects of the material weaknesses discussed in this report, in our opinion, the federal government did not maintain effective internal control as of September 30, 2005, to meet the following objectives: (1) transactions are properly recorded, processed, and summarized to permit the preparation of the financial statements and stewardship information in conformity with GAAP, and assets are safeguarded against loss from unauthorized acquisition, use, or disposition; and (2) transactions are executed in accordance with laws governing the use of budget authority and with other significant laws and regulations that could have a direct and material effect on the financial statements and stewardship information. Consequently, the federal government’s internal control did not provide reasonable assurance that misstatements, losses, or noncompliance material in relation to the financial statements or to stewardship information would be prevented or detected on a timely basis

David M. Walker
Comptroller General of the United States
December 2, 2005

http://photos1.blogger.com/hello/101/3984/1024/F2005-GAO.jpg

#110 S.B. on 10.16.10 at 2:31 pm

Last nite at a downtown Toronto supermarket again a realtor(r) set up shop in the entrance way and was handing out card to everyone. The desperation was palpable. Friday night, everyone else is eating dinner with their families or out having fun, and this realtor(r) was prostituting his services to anyone who would listen.
“Call me!”

#111 Devore on 10.16.10 at 2:42 pm

#75 Prof. ANON

There is nothing capitalist about today’s China. No wonder people believe “unbridled capitalism” is to blame for our economic woes, when they think a top-down centrally planned command economy is capitalism.

#112 Patz on 10.16.10 at 2:48 pm

#37 Connie sez:
“Really a man is a wimp because his wife would rather not live in a rented house and he would rather not deny her a stable place to raise their kids? And a real man would do what?”

Connie, let’s desexify this and ask what would a real ‘person’ do? If you buy a property in market headed south then you are stuck with it for a long time. As the market falls, it sucks away your equity. Should one of the partners lose a job you may default. None of this is pretty; it is the opposite of “stable.”

So if a person sees a falling market ahead then shouldn’t they do everything they can to prevent being crushed by it? Isn’t that a better way to stability?

Case in point: A woman in Vancouver recently found out that her husband had bought a property for $600K with the intention of a quick flip profit. He jeopardized their family stability big time. The condo he bought? oh yeah, in Millennium Waters.

You asked about increased income as an option. This may be news to you but in Canada and the US real income for the middle and working class has been falling since the early 70s. There are many studies showing this. How would this change in today’s climate?

#57 BigLebowski. If you read my post at #28 you realize that it is not just foreclosures that are impaired by the robo–signing cluster–f*k but any property in which the resulting mortgage was securitized. A prudent buyer now would have to ask to see the whole chain of title and verify it was done properly before committing. And any title insurance company that’s not a scam would have to do likewise.

#86 Got a watch,
I solve the DA problem by scrolling through all of his posts without a glance and as soon as I hit a post which is in response to his, I whiz by that as well—makes life less aggravating.

#113 S.B. on 10.16.10 at 3:09 pm

#37 Connie – that’s the myth isn’t it, that a house is a “stable place to raise kids”.

Seeing as about 45% of marriages fall apart…how does a house help this situation?

I’ve never heard of 45% of houses coming apart at the seams…

You could raise a stable family while living in a tent.
And as we know, renters have a ton of power and are impossible to kick out (unless landlord happens to sell the place, and even then tennants may have a right to stay on).

#114 Future Expatriate on 10.16.10 at 3:12 pm

#1 Burning anything and breathing it is carcinogenic. Yep, I’m a joyless s.o.b.

#115 Been There, Done That on 10.16.10 at 3:34 pm

Is Devil’s Advocate the old “VancouverGoinUp” who used to rave about Van until about 10 days ago?

If I were a wealthy investor looking at the west coast, San Francisco or L.A. would be way ahead of Van. San Diego too. You’d need a compelling reason to choose Vancouver over California.

#116 Jeff Smith on 10.16.10 at 3:39 pm

>#16 Prof. ANON on 10.15.10 at 9:24 pm
>I just had an interesting conversation with a “rich asian
>immigrant” who happens to live in Alberta rather than
[snip]
>So I asked the obvious question: “What happens when
>these folks can’t make payments?” His response? No
>one knows. Then the obvious hit me: capitalist China
>has not yet had their first true economic crisis. Then my
>imagination took over, and I got really scared.

Yep! that would be really scary.

#117 Boomer62 on 10.16.10 at 3:56 pm

For those considering ‘vulching’ south of the border, here’s an interesting article in the NY Times….as always, Buyer Beware!

http://www.nytimes.com/2010/10/16/your-money/mortgages/16money.html?pagewanted=1&_r=1&ref=business

#118 BrianT on 10.16.10 at 4:30 pm

Good thing Angela Merkel isn’t Canadian-she would have to resign after this speech http://www.bbc.co.uk/news/world-europe-11559451

#119 Boomer62 on 10.16.10 at 4:35 pm

This graph from Stats Can (2006) says it all doesn’t it!
The wave of selling is about to begin…and, who the heck will buy all the big, multi bedroom houses?…Nobody!

http://www12.statcan.ca/census-recensement/2006/as-sa/97-551/figures/c7-eng.cfm

Consider the largest part of the boomer cohort is only in their early 50’s to late 40’s presently…

#120 Contrarian on 10.16.10 at 5:18 pm

Sellers in Red Deer are asking for low ball offer…..

http://reddeer.kijiji.ca/c-housing-housing-for-sale-house-for-sale-in-Red-Deer-Alberta-W0QQAdIdZ224984664

#121 prairie gal on 10.16.10 at 5:21 pm

Devil:

Saskatchewan is home to a few desert ecosystems. Athabasca Sand Dunes and the Great Sand Hills, for example.

http://www.virtualsk.com/current_issue/sand_wind_time.html

#122 jess on 10.16.10 at 5:31 pm

.#59 FYI
re private members bill …I sent that web link to you so you could read the opinions below. They all seem to agree with you!

http://openparliament.ca/bills/2115/

#123 triplenet on 10.16.10 at 5:56 pm

I don’t really blame the government for the real estate problems. I would blame the banks, and the mortgage specialists, the real estate agents, and CMHC. It’s a greedy system. – says Analyst Analyser (a previuous post)

…..you forgot real estate developers

Well analyze this:

A $300,000 new construction purchase of SFD or Strata
with 5% down.
$4,000 BC Property Transfer Tax
$9,600 HST – only GST portion applies
$8,000 CMHC fee
Total: $21,600 – to governments/agencies

Government enabled costs are $21,600 +_ or 7%

Real estate fees $8,500 + HST (commission builder pays for new construction – 5% + 1.75%) (not 7% + 3%) – that’s interesting.

Analyze this too:
If this buyer pays CMHC $8,000 for risk insurance for the life of a 20yr mortgage (as they can renew when a term expires) and they sell the home in 2 years, then CMHC is officially off the risk hook 18 years earlier.
Do you think CMHC then “does the math” and rebate a prorated amount of the original $8,000 fee?

Now that’s government participation!

PS – a $5,000,000 commercial property purchase will garner the BC government almost $100,000 in property transfer tax. Every time it sells – without exception. (almost)

#124 Devil's Advocate on 10.16.10 at 6:13 pm

In response to Garth’s comment that it takes 7 times average income to buy an average house in Kelowna; to speak of averages when speaking of real estate is intellectually dishonest.

In the first half of this October roughly half the number of homes were sold that sold in the same period last year.

In the first half of this October despite unit volumes being almost half what they were for the same period last year dollar volume was the same.

In the first half of this October of the $44,000,000 in sales one was a $3,000,000 home, one was a $5,000,000 home and a third was a $10,000,000 home.

Tell me how the hell you can make sense of averages under such circumstances as that.

7 times average earnings to buy an average Kelowna home? When, how, what stats…. Statistics are like a bikini they show you what is interesting but not what is important.

What the stats do show is that Kelowna continues to be an ever popular place to buy real estate for those who can afford it. THAT means something. You figure the rest out…

#125 april on 10.16.10 at 7:18 pm

DA #124
I was talking to someone last evening who is from Kelowna. He said home prices in Kelowna have dropped 15%
Your always so defensive. If things are going so great why are you bothering to try to convince people.
Why are you even here since you imply you have better things to do.

#126 Taxpayer like everyone else on 10.16.10 at 7:19 pm

121 PG – well I guess “deserts” are a kind of real estate.
The textbook definition is an area with less than 10 nches
ann precip. They can be hot/temperate/cold. I believe
Antartica is classified as a desert, as are parts of the
Canadian arctic. Sand does not a desert make, as it may
be of geologic and not climatic origin.

Osoyoos BC receives about 12″ AP, Leader Sask 14″, Lytton BC 17″, so technically none are deserts. Osoyoos and Lytton often duke it out for the national hot spot.
So DA can say Osoyoos is the driest, hottest place in
sub-arctic Canada, if it is not in fact a desert.

#127 TheBigLebowski on 10.16.10 at 7:25 pm

#116 Been There, Done That
1/3 of California residents are illegal aliens who pay no taxes but take from the social safety net of welfare and unemployment insurance. California has a bigger debt to gdp than Greece and is bankrupt. Taxes are going through the roof and government employees are being paid with iou’s instead of cash. If you like living under the Soviet model of economics then California is the place to be. Average housing there has dropped by 50% with another 20% to go and no recovery for the next decade +. Unemployment is at 20% there and 1 in 3 mortgages are underwater. $0% of their economy was based on residential housing and related spinoffs. Need any other reasons why the people there are screwed? I have plenty more.

#128 VancouverGoinUp on 10.16.10 at 7:27 pm

You got it hiker. There is an unlimited supply of buyers. Just a matter of time before Garth changes his tune in my opinin on Vancouver. In fact I wonder if he is one of the buyers out here these days. Canadians who sat on the sidelines the last decade have ruined their financial future for themselves, their children and several generations going into the future. Non Canadians have no problem buying as they are filthy rich

******
Hiker on 10.16.10 at 3:50 am
I am not sure what is happening in other parts of Canada or BC, but in Vancouver, or better said Lower Mainland sales are still in my opinion really high. Even now, more and more of people I know are going in a market buying. I thought that prices in GVRD were way out in 2004, and since than I am looking at the market when it is going to come to a sense, but no avail. It seems that Vancouver has an unlimited supply of people who are willing to put unbelievable amount of money in housing. I know this sounds stupid, but I have been looking at this for 6 years now.
.

#129 TheBigLebowski on 10.16.10 at 7:28 pm

#125 TheBigLebowski
meant 40% of California’s economy

#130 Nostradamus Le Mad Vlad on 10.16.10 at 7:34 pm


#50 MKUltra — No! Don’t go! This is Shangri-La, a.k.a. Zombieland! It is so much fun here! We only come here because our wives are desperate to get rid of us!

#51 Camcool and #64 Northern_dirt — My bad! More time to party and pay less attention to the junk on this pathetic planet!

2:34 clip I Want Your Money! New film premiering. Not me, govts. all over.

Military Sheeple Ordinary sheeple are not the only ones in debt. Leading to this, of course.

BoA “. . . sold CDOs with mortgages they knew to be bad without clear representation to investors.”

“The best way to rob a bank is to own one.” — William Black — wrh.com. Not too long ago, there was a link which said the BoA was going to be handed all the toxic mortgages, and now is a good time for that.

Legal Fraud Interesting if this passes.

Staying Liquid Now where have I heard that before? Along with Second Downward Spiral. Three more banks were closed yesterday. “Don’t even begin to talk to me about US economy “improving” and that we are “moving in the right direction financially” when 149 banks have been closed in just this year alone!!” wrh.com.

4:46 clip US$’s effect on gold.

Cannibalism Where’s #34?

#131 jess on 10.16.10 at 7:47 pm

more gazundering then gazumping going on in the UK market
http://blogs.telegraph.co.uk/finance/ianmcowie/100008151/gazundering-returns-as-house-prices-fall/

#132 Grandpa Grinch on 10.16.10 at 8:01 pm

Got a watch – I believe I said they purchased a home NORTH of $350K, meaning they are about 3.8:1. The median should be 2.5 to 3:1

Secondly, they bought at the top of the market at time when ultra low interest rates and high prices will shatter them should they decide to lock in or renew at which time it will be too late.

Thirdly, my DB BIL is making $15/hr ($30K/yr). So what happens when they have kids and she goes on EI and mat leave?

We’ll forget all the other issues around crappy construction during a boom, etc. Their purchase was made in haste at the worst time in history save Spring, 2007. Anyone buying into this market doesnt have their head screwed on straight and these two, in their early 20’s are at the front of the line.

#133 Devil's Advocate on 10.16.10 at 8:05 pm

#121 prairie gal

http://desert.org/

There happens to be 3 semi-arid regions in western Canada. The Thompson River valley (pictured) west of Kamloops B.C.. in the vicinity of Osoyoos in the southern Okanagan valley of B.C. and the south eastern Alberta badlands.

#134 Devil's Advocate on 10.16.10 at 8:06 pm

sorry missed this link
http://www.mysteriesofcanada.com/BC/deserts.htm

Anyway 2 out of 3 for BC thus far ain’t bad…

#135 Devil's Advocate on 10.16.10 at 8:08 pm

Nice place… tranquil, serene, quiet… no Blog DAWGS

http://desert.org/home08.html

#136 Devil's Advocate on 10.16.10 at 8:15 pm

For you Easterners who doubt “The grasslands and bald hills outside the town of Osoyoos are an extension of the Sonoran Desert that runs as far south as Mexico and creeps north to form Canada’s only arid desert”http://www.thestar.com/Travel/article/655324

#137 Bobby on 10.16.10 at 8:18 pm

For #124, Devils Advocate,

It is the real estate industry that prefers to quote average price rather than median. It gives the impression that prices are stable when in fact they are tending downwards.

As you are no doubt aware, it takes just a single sale to skew the averages. Your example of the 10 million $ sale would be a good illustration.

Commissioned salesmen like yourself rely on people buying or selling so you can earn a living. Unfortunately, in a deflationary market people tend to wait as the price will be cheaper next month. That is why the RE industry keeps putting on a positive spin of any statistic. Their agents need sales to get paid.

It’s rather simple, so I will assume that even you can grasp it.

#138 Elmer on 10.16.10 at 8:20 pm

I find people on this blog too concerned about income when it comes to buying a home.

Income is only relevant for people who intend to mortgage a significant portion (75%+) of their home. For everyone else who use the equity they built with their previous home to purchase their next home, or even for first time homebuyers who managed to save up a significant downpayment, income is largely irrelevant. If I want to buy an 800k home and have 750k saved up, why does it matter if I only pull in only 30k a year? I can still afford it.

The price-to-income ratio is a gauge of whether or not real estate prices are in line with a community’s economy. I know this may come as a shock, but it’s not about you. — Garth

#139 Debt's Dark Embrace on 10.16.10 at 8:22 pm

#135 Devil’s Advocate on 10.16.10 at 8:08 pm

Nice place… tranquil, serene, quiet… no Blog DAWGS

http://desert.org/home08.htm
………………………………………………………………………….Has anyone ever tried choking you till you turn blue and your eyes bug out of your head ?

#140 Devil's Advocate on 10.16.10 at 8:24 pm

And on the Walmart worker thing… Walmart workers gained fame and notoriety through their several attempts, successful and unsuccessful, to unionize. While I realize I will be opening myself up to yet further ridicule for condemning unions, the fact of the matter is – if you don’t like what you are being paid or the benefits you are being given then GO FIND A BETTER JOB! If you can’t find a better job it is because you probably do not deserve the one you’ve got, in which case I suggest you take some self improvement courses to make yourself more marketable.

#141 Devil's Advocate on 10.16.10 at 8:26 pm

NEXT?

#142 Devil's Advocate on 10.16.10 at 8:36 pm

Has anyone ever tried choking you till you turn blue and your eyes bug out of your head ?
#139 Debt’s Dark Embrace

As I can well imagine of most here, I might be quite different in person than you have come to know me on line. Devil’s Advocate… get it… ;-)

#143 Dan in Victoria on 10.16.10 at 8:37 pm

Triplenet @123

Add on Development cost charges for the lots
Business licenses
Plumbing permit
Eletrical permit
Gas permit
Building permit

A fellow I know just paid $13,000 for a building permit.
Or how about a double charge,
provincial electrical permit, and the city also charges for it.
Makes perfect sense.

#144 Ghost of Tom Joad on 10.16.10 at 8:44 pm

Experts admit swine flu jab ‘may cause’ deadly nerve disease:

Read more: http://www.dailymail.co.uk/health/article-1321203/Experts-admit-swine-flu-jab-cause-deadly-nerve-disease.html#comments#ixzz12ZkQAuE8
http://www.dailymail.co.uk/health/article-1321203/Experts-admit-swine-flu-jab-cause-deadly-nerve-disease.html#comments

Learn more from Alex Jones at http://www.infowars.com

#145 Been There, Done That on 10.16.10 at 8:47 pm

#127 TheBigLebowski

You’re talking about problems that affect working class Californians. None of those things will prevent wealthy foreigners from enjoying a comfortable life in the Golden State.

Houses in Cali are way less expensive than Vancouver and the weather is fantastic. If I were a wealthy foreigner I’d take L.A. or San Diego over Rain City any day.

#146 Devil's Advocate on 10.16.10 at 8:51 pm

”Real estate fees $8,500 + HST (commission builder pays for new construction – 5% + 1.75%) (not 7% + 3%) – that’s interesting.” #123 triplenet

That’s unsubstantiated bullshit. There is no set rate for commissions on ANYTHING. All are negotiable. Selling a new home involves more work than a resale for that matter which might well justify higher commissions be charged.

#147 MARK on 10.16.10 at 8:56 pm

I have recently moved to BC and almost made a “greater fool” of myself a few weeks ago.

I work in the health care field, make a very comfortable living and can make a 60-70 percent down payment but am really amazed at the rapaciousness of the people when putting up their house for sale.

I do not think that this is sustainable; for the simple reason that it does not make sense. Would rather rent for a year than throw my money away.

This is also reflected in the growing desperation of my Realtor in making a sale. He is trying to give me all the same arguments that some others are making on this blog.

Next two years will be very interesting. Worth the wait
Thanks

#148 dradak1 on 10.16.10 at 9:15 pm

#64 Northern_dirt on 10.16.10 at 6:30 am

#39 Nostradamus Le Mad Vlad

“Today’s useless piece of info.: This month (Oct. 2010) has five Fridays, Saturdays and Sundays, all in one month; that’s 5 weekends; it happens once every 823 years; and these are considered money bags months. SO LET’S PARTY!!”

July 2011, March 2013, Aug 2014…. I don’t know where this “every 823 years” BS came from.. but a little research and you can see its wrong.

I am not sure for the math about 823 years – but you pointed to 3 different 31 days months. Definitely is much harder to find same 30 days month having 5 Fridays, Saturdays & Sundays since month have to start on Friday.

#149 dradak1 on 10.16.10 at 9:23 pm

#101 joseph on 10.16.10 at 11:36 am

“… Wow this blog is riduculous, Garth why do you let people get away with these moronic statements.

Dan, criticizing the conservatives for housing policies. They are identical to the liberals and the NDP for Gawd sake. Is Dan really that stupid???

What about Grandpa Grinch, criticizing the purchase of a $350,000 home by a family making $100,000..???

3.5 times income is extremely affordable. If that was Canada’s average number then you wouldn’t be running this blog would you? ”

Joseph – can you see whole picture? Problem is not the ratio 3.5 (what is affordable) – problem is that house in question maybe worth $200K or less. ;-)

#150 Moneta on 10.16.10 at 9:25 pm

If I want to buy an 800k home and have 750k saved up, why does it matter if I only pull in only 30k a year? I can still afford it.

——–
Well, on a 800K home, muni taxes would be 10K and proper annual maintenance about 8K.

30K per year means 26K net of tax not including EI and CPP. So 26K minus 18K does not leave much.

Not sustainable long term. Nice try.

#151 Dan on 10.16.10 at 9:27 pm

joseph #101 “Dan, criticizing the conservatives for housing policies”

Well joseph you are lucky it is not against the law to be stupid. Are you a fellow stupid clueless uneducated CONservative? The FACT is F was the one who introduced 40 YEAR MORTGAGES and NOTHING DOWN. That is ZERO or 0 as in NO MONEY. This inflated the market since you have more people chasing fewer goods (houses) which increases prices. Then stupid F changed it to 5% which reallt isn’t much. If the CONservative were true conservative they wouldn’t risk Canadian taxpayers money CHMC and back stop deadbeat mortgages. [email protected]$King stupid CONs blaming others for their stupidity.

#152 Taxpayer like everyone else on 10.16.10 at 9:38 pm

132 G Grinch – I have a buddy who works at the city – nice indoor job. He knocks up the Mrs.. Oops, shoulda
said he knocks up “Dr. Mrs.”

Who do you suppose took the mat leave?

#153 Joe Q. on 10.16.10 at 10:29 pm

#75 TorontoBull on 10.16.10 at 7:55 am writes: “btw is it me or is there an explosion of new listings in Toronto?”

I’ve noticed the same. A huge amount of listings came down the wire Friday / early Saturday. It’s been a hot week for new listings.

#154 Mark on 10.16.10 at 10:49 pm

#150 MARK, the problem you have is that 100% of your income is dependant on the continued solvency of the government, and its ability to spend.

Do you have a backup plan if the government imposes severe cuts in healthcare, and if these cuts are imposed worldwide? Could you monetize your services?

Healthcare is a sort of bubble, IMHO, where everyone in healthcare thinks that nothing could possibly go wrong, and that governments will sacrifice all other spending, simply to keep the healthcare machine going. I personally think that there’s going to be an epic rude awakening someday. Either that, or healthcare salaries will revert to levels that reflect the complete lack of risk (ie: far lower than riskier professions, ie: engineering, for instance, where participants risk layoffs and redunancies).

#155 Popeye the sailor man on 10.16.10 at 10:52 pm

140 Devil’s Advocate on 10.16.10 at 8:24 pm
And on the Walmart worker thing…
…..– if you don’t like what you are being paid or the
benefits you are being given then GO FIND A BETTER
JOB! If you can’t find a better job it is because you
probably do not deserve the one you’ve got, in which
case I suggest you take some self improvement
courses to make yourself more marketable.
_____________

Lets see how you Realtors fair when the monopolistic blanket of MLS control is taken and FSBO and ala-cart listings gain share on the MLS during the market slow down. Will many of you be able find a better job, or fight over the Walmart greeter job.

#156 Popeye the sailor man on 10.16.10 at 10:57 pm

140 Devil’s Advocate on 10.16.10 at 8:24 pm
And on the Walmart worker thing…
…..– if you don’t like what you are being paid or the benefits you are being given then GO FIND A BETTER JOB! If you can’t find a better job it is because you probably do not deserve the one you’ve got, in which case I suggest you take some self improvement courses to make yourself more marketable.

__________
Lets see how you Realtors fair when the monopolistic blanket of MLS control is taken and FSBO and ala-cart listings gain share on the MLS during the market slow down. Will many of you be able find a better job, or fight over the Walmart greeter job.

#157 Patz on 10.16.10 at 11:06 pm

We’re looking at the near term regarding RE markets here in Canuckistan. And even when we think in terms of a couple of years it’s well to keep in mind that it’s particularly difficult to see around corners during such volatile times.

Read the following and then I’ll tell you where it’s from:
“In addition to the gradual risks, there might be risks of non-linear events, where a reduction of economic output based on Peak Oil might affect market-driven economies in a way that they stop functioning altogether, leaving the range of a relatively steady downward trajectory.

Such a scenario could pan out by an initially slow decline of trade and economic activity, combined with higher stress on government budgets from lower tax income, higher social cost and growing investment into alternative technologies.

Investment will decline and debt service will be challenged, leading to a crash in financial markets, accompanied by a loss of trust into currencies and a break-up of value and supply chains – because trade is no longer possible. This would in turn lead to the collapse of economies, mass unemployment, government defaults and infrastructure breakdowns, ultimately followed by famines and total system collapse.”

Some peak oil loonies right? Wrong. It’s one of the scenarios painted by a leaked report done by the German military for their government. They don’t say this will happen but they state it is a possibility that must be considered.

So while you’re worrying about whether your house will go up or down give a moments thought to whether we will all go up or down.

#158 TheBigLebowski on 10.16.10 at 11:18 pm

#148 Been There, Done That
wait til the violence starts. With unemployement heading north of 23% and tent cities popping up on the outskirts of L.A you may reconsider. Look at Greece, that is what awaits California.

#159 Devore on 10.16.10 at 11:30 pm

#140 Bobby

It is the real estate industry that prefers to quote average price rather than median. It gives the impression that prices are stable when in fact they are tending downwards.

Haha, it’s hilarious to read these REA reports from across the country. From month to month you’re always reading different stats, whatever gives best spin. One time it’s average price, then it’s median, then it’s benchmark, then it’s # of sales, then it’s total sales volume, month over month, year over year, year to date, comparing median from one time period to average from another, months of inventory, sales to list ratio, price per square foot, etc etc, you name it, they’ll spin it.

#160 VancouverGoinUP on 10.16.10 at 11:32 pm

Dan in Vic
13 grand is chump change when your paying over a million a home. Many homeowners here have over 100,000 cash in their home and car glove compartment!
Don’t trust the banks with your money trust Vancouver. I’m so hyped and happy to be living in the Best Place on Earth. We’re all so very very fortunate here to be the BEST. Welcome all news investors things are just getting better everyday
********

Add on Development cost charges for the lots
Business licenses
Plumbing permit
Eletrical permit
Gas permit
Building permit

A fellow I know just paid $13,000 for a building permit.
Or how about a double charge,
provincial electrical permit, and the city also charges for it.
Makes perfect sense.

#161 dark sad person on 10.16.10 at 11:40 pm

More Robo horror stories from the south-

This is the wild west-no law-no accountability-

This is what creates non-confidence in a country–

This is not to cool-because confidence-is all that allows the toxic charade to continue-
Confidence can trickle away slowly-like now-or-it can end with a bang and when that happens-there is no stopping it–

Well actually there is “something” that would stop it and restore confidence–
But-better left unsaid-or-
You could ask Lebowski et al-
They would know-what it is–

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

http://www.msnbc.msn.com/id/21134540/vp/39676183#39676183

“The Edge…
“There is no honest way to explain it because the only people who really know where it is, are the ones who have gone over.”

Hunter S Thompson

#162 prairie gal on 10.16.10 at 11:42 pm

#88 jman owrote:
#31 Prairie Gal that is true but only a part of the overall picture. When there is money to be made in housing the developers build. Construction jobs, infrastructure, contractors, building supply, appliances, furniture, small business and services. When real estate prices are in decline all that related economic activity slows or stops. Your premise is something else entirely which is what is the basis of growth. Population growth and more important expansion of the money supply. If and when housing declines there will be a noticeable decline in economic activity. Sorry for saying so but thinking there will not be an economic decline along with a housing melt is naïve.

where did I say there would not be a decline? My point was that the increase is unsustainable and the growth is cyclical (temporary). People either buy homes and furniture now or later.

Its like breathing – you can’t keep inhaling indefinitely.

Its myopic thinking that any so-called growth must come from increased home values. A diverse economy grows in many ways. An economy that is 20% real estate-related is neither diverse nor healthy. Its cannibalistic, frankly.

#163 prairie gal on 10.16.10 at 11:46 pm

Devil:

OMG you admit other parts of Canada are home to unique ecosystems? Shall they prepare for the influx of retiring boomers?

#164 Nostradamus Le Mad Vlad on 10.16.10 at 11:48 pm


This is one of the strangest entries I’ve ever read — not the top, but further down. Snow in the tropics?

A lot more accurate than anything else. “EXECUTIVE ORDER 10995 – allows the government to seize and control the communication media.” Lots more Executive Orders further down.

Global Trade sags, plus other stuff from Mish.

RE Bubbles can be difficult to maintain and / or fix.

Seems apt, but will anything happen or get done? Probably not.

Hallowe’en Billions and billions of [economic horror] stories served.

Step back and let the herd run off the cliff themselves. Experience is the best teacher!

Link in. What if . . . we must be near Silly Season!

Law Enforcement? Fuggedabout id!

Today’s bedtime stories include hyperclusterfuckflation!

Can y’all hear the noise increasing? Can you feel it in the air now?

#165 Behavioral Finance on 10.16.10 at 11:58 pm

“If I want to buy an 800k home and have 750k saved up, why does it matter if I only pull in only 30k a year? I can still afford it” – Elmer

You were kidding right?

From this statement it does not surprise me that real estate around the world has gone through the roof. It’s like someone went ahead and threw the fundamentals out the window. If this is the type of thinking this is not just any bubble. Once people wake up that carrying ton of debt is not sexy the rug will be pulled out of the market. Until then the party goes on.

#166 richard on 10.17.10 at 12:10 am

145 Devil’s Advocate on 10.16.10 at 8:36 pm

Has anyone ever tried choking you till you turn blue and your eyes bug out of your head ?
#139 Debt’s Dark Embrace

As I can well imagine of most here, I might be quite different in person than you have come to know me on line. Devil’s Advocate… get it… ;-)
___________________________________________

Yes, you can be sure that DA enjoys acting out online in a manner he would never brave enough to in person. Believe me, we have a LOT of these types in Kelowna!

#167 dark sad person on 10.17.10 at 12:27 am

This will send some tremors rippling across the planet-should it spread and it will–

“Here be Dragons”

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

October 15, 2010
Today the Federal Home Loan Bank of Chicago will file complaints against several
defendants regarding some of the private-label mortgage-backed securities (MBS) they
sold us between 2005 and 2007. We contend that the quality of the loans that comprise
the pools of securities cited in today’s complaints was inconsistent with the description in
the pre-purchase documents prepared by the underwriters and issuers of the securities.
Relying on the pre-purchase documents, we invested in these securities with the
understanding that we were purchasing higher-quality instruments than turned out to be
the case. After careful consideration, we have concluded that we have an obligation to
you, our members, to do everything we can to recover the value lost from investing in
these securities.
The lawsuits were filed in the Circuit Court of Cook County, Illinois; the Superior Court
of California, County of Los Angeles; and the Superior Court of Washington, King
County. The complaints allege the defendants made material misstatements and omitted
important information in connection with the sale of these securities. The Federal Home
Loan Bank of Indianapolis also filed similar complaints today. The Federal Home Loan
Banks of Pittsburgh, Seattle, and San Francisco have previously filed similar lawsuits.
As we have discussed in prior member letters and SEC filings, and at the regional
member meetings, the value of our private-label MBS portfolio has suffered dramatically.
The securities listed in today’s complaints totaled more than $4.3 billion in face value
and were all rated AAA when we purchased them. Since then, the same credit agencies
that supplied the original ratings have downgraded substantially all of these securities to
junk status. Proper accounting of our estimated credit losses on these securities has
resulted in a total of $455 million in write-downs that have negatively impacted our
income, our retained earnings, and our ability to restore a dividend.
In summary, we are only taking these actions out of the belief that it would be
irresponsible not to explore every available option to recover the value lost to our
members.
Sincerely,
Matthew R. Feldman
President and CEO
Federal Home Loan Bank of Chicago

http://www.fhlbc.com/fhlbc/docs/announcements/2010/MBSMemberletterFINAL.pdf

#168 Patz on 10.17.10 at 1:56 am

OTOH let’s go for something altogether irrelevant but funny: a photo essay of Wal–Mart people. Eat your heart out Garth, you never got pics like this!
http://tiny.cc/18wst

#169 Grandpa Grinch on 10.17.10 at 1:59 am

#152 – What about Grandpa Grinch, criticizing the purchase of a $350,000 home by a family making $100,000..???

3.5 times income is extremely affordable. If that was Canada’s average number then you wouldn’t be running this blog would you? ” – Dradak1

So in your mind, it doesn’t matter that housing prices are at least 1/3 higher than they should be, that interest rates are at multi generational lows, that every provincial gov’t and the Feds are going to be in the red for years to come, that a wave of boomers set to retire will be cashing out and driving property values down. As long as the “ratio” is good, well then everything is fine. I can see why so many fools are parted from their money – because they don’t deserve to have it. I have some Nortel stock I can sell you…….

#170 Mister Obvious on 10.17.10 at 2:20 am

#151 dradak1

“I am not sure for the math about 823 years – but you pointed to 3 different 31 days months. Definitely is much harder to find same 30 days month having 5 Fridays, Saturdays & Sundays since month have to start on Friday.”

Clearly, math is not your strong suit. A month with only thirty days can only have 2 days of the week which occur 5 times in that month, never three, regardless of which weekdays these are.

Proof:
30/7 = 4 (with a remainder 2). Those two remaining days have to be some day of the week and there will be 5 of those.

#171 Vancouver_Bear on 10.17.10 at 2:23 am

#149 Devil’s Advocate on 10.16.10 at 8:51 pm

Only 20 posts from you up to 10.16.10 at 8:51 pm….well, well I guess the day was not productive at all…..no buyers…..zero, nada, zilch…..That goes in line with the sales stats. I feel sorry for ya.

#172 Vancouver_Bear on 10.17.10 at 2:29 am

I enjoyed you presentation in Surrey on Friday night. It was very interesting and informative. You have a healthy sence of humor… I had a few good laughs.
Thank you, Mr. Turner, every word was worth a million and best of all it was free!

#173 Brian1 on 10.17.10 at 5:04 am

Just saw Stock and Awe#2 on BNN. Good show, except it is too late to start RRSP’s now. Just another push by equity markets industry to throw your money away. Financial Service industry salesmen are equivalent to Real Estate. They are finished.
It looks like after the elections, Obama will order all mortgages to be written down 30%. Canada will eventually follow so it is a good time to buy an overpriced house.

#174 David B on 10.17.10 at 6:40 am

What appears to be going on is to some respect, a real slow down in people wanting to move up in homes. Caution is the key, if you can afford a home and still play go for it. If not stay put. Winter is near and the wolves are hungry and home or not it going to cost Canadians some serious coin.

#175 bigrider on 10.17.10 at 7:30 am

#160- Financial service industry people are finished.

Are you kidding me LMAO. Been to to Bay and King lately? Seen the cars being driven ny the blue suits ? Seen where they live?? High six figure incomes getting bigger as market continues to recover ??

LOL-look elsewhere for your doomsday

#176 jman on 10.17.10 at 8:40 am

Prairie Gal,
From yesterday #86 “Actually I seriously doubt the economy will suffer very much when house (real estate) values fall.”
That is where you said it. I never commented on a healthy economy. I simply stated a fact that 20% of the Canadian economic activity was tied to housing.

#177 Virgil on 10.17.10 at 9:27 am

Some sellers understand what is going on and don’t wait for months to drop the asking price. These are the smart ones that will still be able to bail….

E.g.

N1943536 Markham 23 Kentland St

28 Aug 2010 479,000.00
16 Sep 2010 469,000.00
17 Oct 2010 462,900.00

The ones in denial, that need 3 months or so to drop the asking price will be stuck….

#178 dark sad person on 10.17.10 at 9:31 am

SPITZER: Why is the SEC not jumped all over this to see if these mortgages were safe and secure…

ROSNER: True. Very good question.

SPITZER: You know, I’m just flabbergasted when, you know, you called me a while back and you had seen about these things and we began to talk. This is, it seemed to me, the Holy Grail that explains and is the blueprint for unmasking how absolutely venal the behavior was inside these investment banks.

http://www.youtube.com/watch?v=1j2esw2B8TI&feature=player_embedded

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

My question is-

Why did our “envy of the world” Banks-who bought and sold these toxic pups to Pension Funds-not see this-when in fact-every blogger with a halfassed clue-knew about the fraud?

I think-we need to ask-wtf-was C doing-up to now?

Why isn’t H & F having the RCMP conducting an investigation into the very same type of fraudulent loans that went across Banker desks every day in Canada and “especially” who knew what and when?

The Big 5–
Ohhhhhhh my–

#179 Pete on 10.17.10 at 9:33 am

Look at the fear from realtors screaming to buy as the housing crash continues to be bad. People are in serious trouble to sell or face going bankrupt. All the callers on CP24 Cold property asked questions like “Can I get out of the home sale and get my deposit back” buddy claims he is moving to another province but we all know everyone is now seeing the housing crash get worse and want Out!. Another caller called and asked”if the buyer defaults should they not be able to keep the deposit?” Not only is the buyer walking but somehow they are trying to keep the deposit. The situation in RE is getting real bad from the GTA to Van. Realtor on here come up with stupid stories that Obama will do this or the government will do that all to save the deadbeat from reality. The fact is the housing crash has just started and even the builders are having trouble selling. The builder on the show Cold property talked about selling over 30 houses in three weeks which is horrible. I would beat those number are not 100% true and most likely inflated. You see builders are dropping their prices like crazy.

#180 Moneta on 10.17.10 at 9:48 am

Either that, or healthcare salaries will revert to levels that reflect the complete lack of risk (ie: far lower than riskier professions, ie: engineering, for instance, where participants risk layoffs and redunancies).
———-
There is risk for doctors. Have you seen the cost of liability insurance?

I think you are right for the leveling of doctors’ income in the US but not sure about Canada.

Today’s nurses are 100X more knowledgeable than doctors in the 1800s. I think we should limit the number of high cost pros by reducing their involvement in many procedures. For example, why should a doctor give a vaccination?

Most of the fat is probably in the bureaucratic machine.

#181 Moneta on 10.17.10 at 10:01 am

Why isn’t H & F having the RCMP conducting an investigation into the very same type of fraudulent loans that went across Banker desks every day in Canada and “especially” who knew what and when?
—————
Because they are too busy building more prisons. For the debtors I guess? ;)

http://www.cbc.ca/canada/story/2010/10/06/toews-prison-construction.html

The article does give one good reason why they’d want to limit the works of Statistics Canada.

#182 Dan in Victoria on 10.17.10 at 10:08 am

163 VGU
Don’t leave the windows open.

#183 Sail1 on 10.17.10 at 10:17 am

#182 Pete

Pete, I haven’t seen any price drops in the GTA especially from builders. Where did you get this information?

#184 Gord In Vancouver on 10.17.10 at 10:17 am

#131 VancouverGoinUp

Canadians who speculated wildly on real estate and/or overextended themselves sat on the sidelines over the last decade have ruined their financial future for themselves, their children and several generations going into the future.

____________________________________________

#53 gold bugger

Vancouver is the most over-rated, over-crowded, foreigner-infested city in North America.

Politically incorrect but very true.

#185 Devil's Advocate on 10.17.10 at 10:22 am

#159 Popeye the sailor man

LOL…

First.. The MLS as you know it ain’t goin’ nowhere. Really, watch the news over the remainder of the month. What Garth led you to believe is nonsense as I am sure even he well knows now. But will he admit it? I doubt it. Again the MLS as you know it ain’t goin’ nowhere. In fact don’t be surprised if REALWHORES start charging more to sell your property in the difficult times which lay ahead where all costs are rising and so too are their costs of doing business. Like anything… eventually the increased cost gets passed along to the consumer. So Popeye the sailor boy… dust off that “For Sale by Owner” sign because if you can’t see your way clear to paying a REALWHORE to sell your property today you sure as hell ain’t gonna come to terms with it tomorrow. Now don’t bitch and complain sailor boy you are no more our market than you consider us worthy of your patronage so in that take resolve and go your own way.

Second, I never said to have a Walmart job was a social disgrace but rather likened it to a segment of society which personifies those receiving little for giving little but wanting more. I could take a Walmart job and be perfectly happy with it. I would be paid for exactly the effort I was required to put in and that is a whole lot less than that I put into my real estate career which sometimes does not reward me nearly so proportionately well.

#186 dark sad person on 10.17.10 at 10:30 am

#184 Moneta on 10.17.10 at 10:01 am

The article does give one good reason why they’d want to limit the works of Statistics Canada.

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

Of course-when facts get in the way of the infested pool of Narcissistic old men and woman that have become our Government-they simply ignore the stats and claim the opposite is happening–

I see the price tag for prison expansion has fallen into the hundreds of Millions now-it was only a few weeks ago that the slimy Sociopath “Stockwell Day” said the cost would be in the Billions-

That guy-makes my skin crawl–

#187 prairie gal on 10.17.10 at 10:52 am

taxpayer: I realize that sand dunes are not an official desert. We are talking real estate here, not ecological categories. The fact that the Okanagan is a desert does not make it an attractive place to live. I would argue it is even less attractive when its littered with condos, golf courses and wineries. Deserts are fragile ecosystems, which do not readily support large populations without a lot of infrastructure. If people really want to live in a desert in their retirement, there are plenty of far cheaper destinations (Arizona, for example).

DA claimed that BC has Canada’s only desert – which has been shown to be more realtor hyperbole. Osoyoos would be a great place to visit if it weren’t filled with tacky tourist traps. Its been ruined, like so many other ‘unique’ ecosystems in BC.

#188 Pete on 10.17.10 at 11:09 am

Sail1 They are everywhere. The first location that comes to mind is the 400/401 where the builder dropped the prices from 379K to $359K and now is offering 36K cash back. This is one example from the countless many. Sorry Sail1 but the housing crash is getting worse and builders and realtors are getting very worried which is why you find them on this blog. Like you.

#189 jess on 10.17.10 at 11:29 am

pitchman for the fronts

That guy-makes my skin crawl– ditto but this one below tops it for me!

Glenn Beck Brings ExxonMobil-Linked Religious Front Group to Tell Christians Not to Believe in Climate Change
Friday 15 October 2010

by: Lee Fang | ThinkProgress | Report
http://www.truth-out.org/glenn-beck-brings-exxonmobil-linked-religious-front-group-tell-christians-not-believe-climate-change
======
local chambers distancing themselves from the main
http://thinkprogress.org/
We didn’t like the fact that the U.S. Chamber was supporting particular candidates,” Mayotte said. “We don’t think it’s good business practice to do so.

“We take stands on particular issues considering business, but not particular candidates.”

=

111TH CONGRESS
2D SESSION H. R. 5175
[Report No. 111–]
To amend the Federal Election Campaign Act of 1971 to prohibit foreign influence in Federal elections, to prohibit government contractors from
making expenditures with respect to such elections,and to establish additional disclosure requirements with respect to spending in such elections, and for other purposes.
http://cha.house.gov/UserFiles/h5175ha_rh_xml.pdf
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/26/AR2010072604862.html

=
voted down by ONE vote!
The Congressional DISCLOSE Act is intended as at least a partial antidote, requiring organizations involved in electoral campaigning to reveal the identities of their major donors in their political ads. The act also bars foreign corporations, major government contractors and financial bailout recipients from making political expenditures.

#190 squidly77 on 10.17.10 at 11:39 am

Devil’s Advocate

You are way too full of yourself, your a salesman for pete’s sake. You have no more power over the market than I do. You are irrelevant. A pest. An unnecessary nuisance. Just an added expence.

#191 Kim on 10.17.10 at 11:41 am

“I always hold property. And it always amounts to less than 40% of my NW. — Garth”

Why hold during a long “melt” even you prophesized?

Because I can. — Garth

Hmmm, interesting. You don’t seem like someone who would be careless with his investments. What gives? If you really think there is going to be a price adjustment followed by a melt why would you not take your own advice?

I’m not careless. Which is why I can afford to hold what I want. — Garth

#192 squidly77 on 10.17.10 at 11:42 am

Devil’s Advocate

Your also coming accross without your normal easy going attitude, your becoming jaded and perhaps a little bitter. No one owes you anything.

#193 dradak1 on 10.17.10 at 12:19 pm

#173 Mister Obvious on 10.17.10 at 2:20 am

You are right (must be bit more beer than I should have last night LOL) but my point was exactly the same (I didn’t do any math just common sense) that months must start on Friday and finish on Sunday – and that is impossible in 30 days month.

#194 Pat on 10.17.10 at 12:20 pm

“I’m not careless. Which is why I can afford to hold what I want. — Garth”

This huge ego of yours has certainly lead to at careless acts.

Name ten. — Garth

#195 dark sad person on 10.17.10 at 12:25 pm

#192 jess on 10.17.10 at 11:29 am

Glenn Beck Brings Exxon Mobil-Linked Religious Front Group to Tell Christians Not to Believe in Climate Change

Gonzalez also said he had never heard of CDR Communications. But according to his own Linked In profile, Gonzalez works for CDR Communications as the “Director for Religion and the Environment” at the firm. Think Progress contacted Chris Rogers on Monday, who contradicted Gonzalez and said his firm CDR Communications provides “support” for Cornwall but did not clarify.

It appears that Cornwall attempts to carefully hide its backers. Not only did Gonzalez refuse to provide much information, but Cornwall’s website is registered with a special service to hide the identity of the person or group who purchased the domain address.

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

Sure-if you want to get maximum horse power-
Involve all the delusional Christians and hide behind that well soiled veil-

There will be Wars ahead of us-
The start of the coming “Great Religious Wars” has begun-
Few see it-most are in denial-and so it shall happen–

#196 S.B. on 10.17.10 at 12:29 pm

Remember those sell off condos in Toronto? Wedged beside Hwy 427 near the airport (and who doesn’t wish to live beside a major highway or airport? :roll: )

http://www.financialpost.com/personal-finance/mortgages/Digs+Sell+Condos+releasing+second+tower+this+weekend/2939812/story.html

Accoding to discussions on this RE fourm the project is on hold or cancelled because an overseas party cannot obtain financing:

http://tinyurl.com/2c4d7gj

#197 Kim on 10.17.10 at 12:48 pm

Hmmm, interesting. You don’t seem like someone who would be careless with his investments. What gives? If you really think there is going to be a price adjustment followed by a melt why would you not take your own advice?

I’m not careless. Which is why I can afford to hold what I want. — Garth

Still not understanding. Even if someone can afford to hold what they “want” why would they hold something they are so sure is losing value??

You are tedious. — Garth

#198 Popeye the sailor man on 10.17.10 at 1:09 pm

Devils Advocate

I have used both the MLS and FSBO methods to sell my properties in the past, I even did a FSBO while I was at sea with the lawyer having power of attorney. When I buy I have used both MLS and FSBO listing to find what I want. The last two closest sales to my home in the last month have been by Comfree. I used the MLS last time to buy not because I’m lazy, I’m the one that went to city hall to get a large address map of the city so I can see lot sizes because the MLS in my area doesn’t list that information, used google earth to see how the property sits on the lot drove by to see the house first and discounted almost all the listing the realtor Slooowly sent me. And I used a realtor only because I don’t have a key to get in and view the places myself. I know what I wanted and had particular needs. Many listings on the MLS are no better than a couple of photos and a quick description what lazy good for nothing realtors they are. In BC I used two different realtors one for a rental that was fixed up nicely inside but still had low curb appeal. The Realtor I selected did a lot to promote the inside and layout as an income property, 360 views, its own web link from the MLS, drawings of the layout of both suits, a dozen photos, and even came back to reshoot a couple after we made some changes, and used print ads. He earned his money because he went full out and did all the extras needed to sell a difficult property and fast. But many MLS listings are just thrown together with no extras, the brochure link takes you to the realtor or the office web site to promote themselves not the property I was just looking at, in hope another realtor will find a buyer and that promoting themselves over the listing they will get another lead.

There are times a good realtor can get the job done, but in many cases a person with some knowledge, and a helpful website can do just as well, and save $10,000. Selling a house is not rocket science, and using a lawyer will protect your interests and work as a guide and cost a fraction.

PS Bolding insulting comments to me in your entry tells me more about you and made me laugh.

#199 Basil Fawlty on 10.17.10 at 1:15 pm

Total compensation and bonuses for Wall Street in 2010 is expected to total $144B. In terms of GDP, this would place Wall Street as the 49th largest economy on the planet.
Who’s your Daddy?

#200 InvestX on 10.17.10 at 1:15 pm

Kim : Still not understanding. Even if someone can afford to hold what they “want” why would they hold something they are so sure is losing value??

You are tedious. — Garth
————————————

We’re just trying to understand why your actions appear to be inconsistent with what you’ve written.

Even if you can afford to hold an asset you expect will depreciate for a while, why would you? Not exactly great investment practise. Buy low, sell high.

The property I just sold was done so for a capital gain. How’s that inconsistent? And since when do I answer to an anonymosity? — Garth

#201 bill on 10.17.10 at 1:16 pm

there is evidence to show that the desert regions of north america once stretched from the sonoran desert in the the south to Ft St John in the north.
this occurred after the melting of the last ice age when the world was much hotter than it is at present.
please read ” geology of british columbia – a journey through time” cannings and cannings
it is a pity about the osoyoos biope. It was far nicer as farm land although that was the start of its destruction.

#202 Elmer on 10.17.10 at 1:28 pm

Well, on a 800K home, muni taxes would be 10K and proper annual maintenance about 8K.

30K per year means 26K net of tax not including EI and CPP. So 26K minus 18K does not leave much.

Not sustainable long term. Nice try.

——————————————

Nope. Taxes on a 800k home would not necessarily be 10k, and the cost of maintaining a house does not usually depend on the value of that house. How in the world does it cost 8k/yr to maintain a house? What is the homeowner doing, getting a new roof every year?

Not sustainable? Look at all the old geezers in Toronto who own homes worth 800k or more (average price of a house in the neighborhood I rent in) many of whom have nothing for income but OAS and CPP. Yet they manage.

#203 andrewS on 10.17.10 at 1:37 pm

#131 Vancouvergoinup

“Canadians who sat on the sidelines the last decade have ruined their financial future for themselves, their children and several generations going into the future.”

What of those too young to have purchased a decade, or even five years ago? I finished university in ’06 and could not have participated in this boom even if I wanted to. I’d like to think I don’t have a financially ruinous future because I was born five years too late.

By the way, I’m from Vancouver originally, and having travelled a bit I can say that real estate is not the only thing that that city is delusional about.

#204 Basil Fawlty on 10.17.10 at 1:45 pm

http://www.nypost.com/p/news/business/what_the_heil_AB2P3PQKS6F8lPAlW1evIN

“Steve Schwarzman, billionaire head of buyout giant The Blackstone Group, shockingly likened President Obama’s threat to impose higher taxes on private equity firms to Adolf Hitler’s invasion of Poland.”

Poor little “white shoe boy” just doesn’t have enough!

Read more: http://www.nypost.com/p/news/business/what_the_heil_AB2P3PQKS6F8lPAlW1evIN#ixzz12dt287aJ

#205 Deciding when to sell on 10.17.10 at 1:46 pm

Devore (#162) wrote:

Haha, it’s hilarious to read these REA reports from across the country. From month to month you’re always reading different stats, whatever gives best spin. One time it’s average price, then it’s median, then it’s benchmark, then it’s # of sales, then it’s total sales volume, month over month, year over year, year to date, comparing median from one time period to average from another, months of inventory, sales to list ratio, price per square foot, etc etc, you name it, they’ll spin it.

—————-

Which is why I barely glance at the text part of the local RE board’s monthly reports. I just take the latest monthly numbers — sales, avg price, median price — and drop them into a spreadsheet. Been doing that for several years now. One look at the updated graph tells me what I want to know.

#206 Basil Fawlty on 10.17.10 at 1:54 pm

From Leap2020 GEAB Report #48

“23) As MSNBC aptly described on 06/10/2010, it’s once a month at midnight that America’s great depression is revealed in the supermarkets, when tens of millions of food voucher recipients go and do their shopping. According to the study by the Center for Economic and Policy Research published on 16/09/2010, in effect now one in three Americans can no longer make ends meet (one hundred million people ).”

Move along folks, there’s no depression here.

#207 Taxpayer like everyone else on 10.17.10 at 2:13 pm

Pgal @124

“Saskatchewan is home to a few desert ecosystems”

Pgal @190

“We are talking real estate here, not ecological
categories. The fact that the Okanagan is a desert…”

Pardon me if I’m having trouble following your posts here.
You’ve changed topic and position.

What is it again you do for a living??

#208 jess on 10.17.10 at 2:29 pm

dark sad:“Perhaps the greatest madness is not in failing to see things as they are, but in failing to see things as they should be.”

Tides CEO: Fox News advertisers may end up with blood on their hands
October 15, 2010 2:29 pm ET by Media Matters staff

In a letter released today, Tides CEO and founder Drummond Pike called on advertisers to stop supporting Fox News.

Pike wrote that Byron Williams — the alleged gunman who, according to police, said he planned to murder employees of Tides and the ACLU — relied heavily on conspiracy theories advanced on Glenn Beck’s show:

In total, prior to the attempted rampage, Beck had attacked the Tides Foundation 29 times. On September 28th, more than a month after the shooting, Beck reiterated his focus on the Tides Foundation, warning, “I’m coming for you.” In jailhouse interviews, the gunman confessed he views Beck as a “schoolteacher” who “blew my mind.” My would-be killer admitted that Beck “give[s] you every ounce of evidence you could possibly need” to commit violence.

Pike noted that “businesses that pay to broadcast commercials on Fox News are subsidizing Glenn Beck’s television show by continuing to pump money into the network,” adding, “It has become clear that the only way to stop supporting Beck is to stop supporting Fox News.”

Pike concluded: “The next ‘assassin’ may succeed, and if so, there will be blood on many hands. The choice is yours. Please join my call to do the right thing in this regard and put Fox News at arm’s length from your company by halting your advertising with them.”

Read the full letter below.
http://mediamatters.org/blog/201010150030

#209 Tedious on 10.17.10 at 2:55 pm

We’re just trying to understand why your actions appear to be inconsistent with what you’ve written.

Even if you can afford to hold an asset you expect will depreciate for a while, why would you? Not exactly great investment practise. Buy low, sell high.

The property I just sold was done so for a capital gain. How’s that inconsistent? And since when do I answer to an anonymosity? — Garth
___________________________________________
O.K. Grouchy! I was asking the damn question because I was honestly wondering if there was a good reason to hold on to property. I’ve never heard anything on this blog except sell…

Chill Out. :)

#210 Contrarian on 10.17.10 at 3:10 pm

Finally , I have decided to bypass comments by Devil’s Advocate. It seems to me he is trying to convince himself of how important work he does for society.

The truth is (as I see) , realtors may be a requirement for lazy bums with a lot of money.If a family does enough homework (location, house price trends etc.) and have a good inspector/lawyer, there is absolutely no need for a realtor. In terms of thermodynamics , absence of realtor proffession will increase the efficiency of the process , which ultimately results in capital preservation.However as long as majority of people keep using realtors , a major change in system will not happen.

#211 Devil's Advocate on 10.17.10 at 3:38 pm

”Osoyoos would be a great place to visit if it weren’t filled with tacky tourist traps. Its been ruined, like so many other ‘unique’ ecosystems in BC”. #190 prairie gal

Build it and they will come. This is indeed a vacation paradise which draws tens of thousands. You folks from east of the Rockies want to be entertained when you visit this playground. Come take a look at the GONG SHOW of our lake in the summer littered with dumb ass boaters from other provinces speeding up and down the lake while pounding back beers and throwing empty potato chip bags overboard – like that is respecting our ecosystems… or the Hummers they tow those boats with… and on and on and on.
Prairie gal… the simple fact of the matter is we both know damned well that if you were to investigate the number of tree huggers and desert protectors in this province (Beautiful British Columbia The Best Place on Earth) per capital compared to any other province the results would be an overwhelmingly higher number for BC.
You chose to pick the wrong bone there with me Babe. As far as respect for our environment goes it would be hard for anywhere else in the world to compete with us in B.C. on that matter.
Ya throw your uninformed flack our way Blog DAWGS. If this Province becomes the shit hole you proclaim it to be coming it is not us but your disrespect while vacationing here or insistence that we have a Starbucks, Costco, Wal-Mart, Urban Barn, or what ever the *&$* else it is you consumptive pricks require to shit out the remnants and waste of on our land.

”Devil’s Advocate: You are way too full of yourself, your a salesman for Pete’s sake. You have no more power over the market than I do.”#194 squidly77

Exactly!!! You finally get what I have been trying to tell you all along. CREA REALTORS don’t influence the market we report it.

”Devil’s Advocate: You’re also coming across without your normal easy going attitude, your becoming jaded and perhaps a little bitter. No one owes you anything.” #196 squidly77

Exactly right again Squidly. Abso-F-ing-lutely no one owes me anything. Nor do I… owe anyone who has not earned it anything.

”Still not understanding. Even if someone can afford to hold what they “want” why would they hold something they are so sure is losing value??” – Kim

You are tedious. — Garth

Kim has a point Garth.
#201 Popeye the sailor man: You just don’t get it…
EVERYONE The world population has grown what in the last 100 years? Seven fold? (6,875,500,000 current estimated population of the world) http://en.wikipedia.org/wiki/World_population
Figure it out… It’s not the housing market you need to worry about. It’s not the financial markets you need to worry about. It’s not jobs you need to worry about. It’s not peak oil you need to worry about. There isn’t a thing you can do about the forces which those are a consequence of unless you are prepared to talk about population control.
Suck it up and get a life. We are all nothing more than an insignificant part of a parasitic virus on the face of this planet. We are all hypocrites. We are all destroying OUR habitat. We are doing nothing to the planet. As George Carlin said “Earth isn’t going anywhere… we are…”. Your arguments, and mine, are all inane.
Do you have any idea what’s happening in India and China? And we over here are arguing about… how much our houses are going to be worth next year. Absurd self important lunatics that we are…
I see your real estate market predictions and raise you another Gulf oil spill… off the BC Coast this time.

#212 Evangeline on 10.17.10 at 3:44 pm

#199

(( Christians Not to Believe in Climate Change))

I don’t think that the climate change debate is about “not believing” in climate change; the debate is about what is causing climate change. The skeptics don’t accept that it is manmade; they believe that climate change is a natural happening as has happened since the beginning of the earth and will continue till the end of the earth. The skeptics also believe that the people who push the theories that climate change is manmade and therefore can be remedied by man, are opportunists like Al Gore, who stand to profit financially or politically from pumping that idea.

The skeptics are the ones operating in their own self-interest. — Garth

#213 pbrasseur on 10.17.10 at 4:11 pm

The skeptics are the ones operating in their own self-interest. — Garth

Yeah right, like the believers don’t have their own self interests (bureaucracy, research funds, not to mention a fantastic excuse for politicians to intervene everywhere…)

#214 unbalanced on 10.17.10 at 4:18 pm

Alot of the dawgs keep responding to DA’s comments. True, he has said important things and also he says he likes to pull the other dawgs chains. Do like I do. When I see his name I just keep on scrolling by as fast as I can. Why get yourself worked up? Even here in sunny Manitoba we have a dessert.

#215 dark sad person on 10.17.10 at 4:25 pm

#215 Evangeline on 10.17.10 at 3:44 pm

The skeptics also believe that the people who push the theories that climate change is manmade and therefore can be remedied by man, are opportunists like Al Gore, who stand to profit financially or politically from pumping that idea.

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

To be honest-I’m a bit of an agnostic on that subject-at this point-
I think both sides have legitimate points and I’m all for cleaning up this Planet-

But–

Al Gore/Obama and their ilk-drooling over cap and trade is another matter–

This will become another paper bubble-smothered in corruption-and-it’s off to a wondrous start already-

Why are we always so suspicious of these elite class of people-i wonder

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

Surprising documents made available to this author reveal that Assistant Secretary of Energy Cathy Zoi has a huge financial stake in companies likely to profit from the Obama administration’s “green” policies.

Zoi, who left her position as CEO of the Alliance for Climate Protection — founded by Al Gore — to serve as assistant secretary for energy efficiency and renewable energy, now manages billions in “green jobs” funding. But the disclosure documents show that Zoi not only is in a position to affect the fortunes of her previous employer, ex-Vice President Al Gore, but that she herself has large holdings in two firms that could directly profit from policies proposed by the Department of Energy.

http://pajamasmedia.com/blog/more-global-warming-profiteering-by-obama-energy-official/?singlepage=true

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


Barbara Hollingsworth: Fannie Mae owns patent on residential ‘cap and trade’ exchange

When he wasn’t busy helping create a $127 billion mess for taxpayers to clean up, former Fannie Mae Chief Executive Officer Franklin Raines, two of his top underlings and select individuals in the “green” movement were inventing a patented system to trade residential carbon credits.

If the proprietary emissions trading system functions like other exchanges such as the New York Stock Exchange, which makes most of its revenue on listing and trading fees, its owners could see extremely generous profits, especially with a patent that keeps out competition for two decades.

So Fannie Mae, a quasi-governmental entity whose congressionally mandated mission is to make housing more affordable, has been a behind-the-scenes participant in a carbon trading scheme that would do just the opposite.

Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/columns/Fannie-Mae-owns-patent-on-residential-_cap-and-trade_-exchange-91532109.html?source=patrick.net#ixzz12eXKGhzu

#216 TheBigLebowski on 10.17.10 at 4:29 pm

#213 Contrarian
Most realtors are like pilot fish feeding off the scraps of the free market economy.

#217 S.B. on 10.17.10 at 4:29 pm

Article in this month’s Toronto Life about The Bay (department store) going high end and competing with Holt Renfrew now! Seems strange during a recession. And the cashier staff always push the HBC credit cards onto you; I suspect they make more money from 30% interest rates than by retailing.

#218 The Original Dave on 10.17.10 at 4:34 pm

I love that you give 2 choices for the real estate market to stabilize. Sadly I would say that you are missing a part of the puzzle, isn’t increased income another option? Most of the real estate in Canada has a cycle of boom, stagnate, rinse repeat. There are a few Canadian markets that do experience boom, bust cycles, but they seem isolated in this turbulence and driven by external factors.
—————————————–

lady, you’re clearly confused. Take some time, read through the blog and maybe delve into the statscanada website. Everyone on here knows enough to consider incomes before considering price declines in housing. That is 101 stuff. You’re new to this all.

#219 Brian1 on 10.17.10 at 4:45 pm

There have been several people who are claiming that they are bypassing Devil’s Advocate’s comments and some others. Garth, instead of denying free speech why not limit everyone to maybe three comments a day, then we will be forced to produce quality. As it is now, I myself skip many people because they are on all day every day. Sometimes I wonder if it is you in disguise. Nostradamus Le Mad Vad should be an example of how a professional conducts himself. He comes on once or twice and says his thing then he’s done.( I hope he doesn’t respond now with ten comments just to irk my important self). Anyway, if anybody disagrees I would like to hear their arguments.
BTW I like that new American guy with his originality, except the naked on the bed part.

#220 Brian1 on 10.17.10 at 4:57 pm

I hope to hear comments like Yeah, Right on.You said it buddie.Rah Rah Rah.Go get em man. Now I get to be heard. Wonderful Idea old chap. One for the gipper.

#221 Moneta on 10.17.10 at 5:11 pm

Nope. Taxes on a 800k home would not necessarily be 10k, and the cost of maintaining a house does not usually depend on the value of that house. How in the world does it cost 8k/yr to maintain a house? What is the homeowner doing, getting a new roof every year?

Not sustainable? Look at all the old geezers in Toronto who own homes worth 800k or more (average price of a house in the neighborhood I rent in) many of whom have nothing for income but OAS and CPP. Yet they manage.
————-
Well in Montreal, 600k+ houses require about 1.3% munit taxes. Do the math.

You’re right about 1% being a rule of thumb. Most of the old geezers didn’t do the proper maintenance and now the young ones, on top of buying an overpriced badly maintained house, are stuck doing renos at more than 2% of the cost of the house for the next decade.

800K on 30K is not sustainable.

#222 The Original Dave on 10.17.10 at 5:15 pm

“I always hold property. And it always amounts to less than 40% of my NW. — Garth”

Why hold during a long “melt” even you prophesized?

Because I can. — Garth

Hmmm, interesting. You don’t seem like someone who would be careless with his investments. What gives? If you really think there is going to be a price adjustment followed by a melt why would you not take your own advice?

I’m not careless. Which is why I can afford to hold what I want. — Garth
————————————————–

uh oh, here we have another person that can’t trust people. The thought being “there must be some ulterior motive for this Garth guy….he wants us to buy lots and lots of books (he wants to be Dan Brown) and he wants to buy our incredible houses”.

Some people are so thick. The effing guy has enough years behind him to have done well. He was minister of finance (or whatever the title was) for Canada. He sure as shit should know something about investing. His rule is not to be over-committed to a single asset. Does that mean he HAS TO get rid of everything related to an asset that’s falling in price? That’s ridiculous. I’d imagine he’s done well enough to retire. Maybe he likes where he’s living or likes the additional properties he owns – whatever. He’s not going against his rule of 40%.

For those of you who think someone is trying to pull a fast one by you on this blog, please, please, please, keep your houses. Invest 99% of your net worth plus 99% of your future earnings into real estate. There’s sharks like me around and I’ll thank you in advance..just like those that just about gave me stocks for free in March 2009. I’m not warm and cuddly like The G Man. The more you commit and the more committed to the asset by the public, the bigger the drop, the lower the prices are in the future and………..the faster I retire.

So if you’re questioning things, go all in and buy! It’s party time still.

#223 Mark on 10.17.10 at 5:25 pm

“How in the world does it cost 8k/yr to maintain a house? What is the homeowner doing, getting a new roof every year?”

Easily. Its not a roof every year, but the physical components of a structure disintegrate (eventually, into dust!), and typically, 1%/annum is required over the long term.

Look at all the old geezers in Toronto who own homes worth 800k or more (average price of a house in the neighborhood I rent in) many of whom have nothing for income but OAS and CPP.

And their houses fall into gradual disrepair, and over time, the price becomes discounted because the kitchen isn’t modern, the carpets are worn, etc. Those owners are equity-stripping, which isn’t exactly a bad thing, but over the long term, will negatively affect the price they receive when the stripped asset is disposed of.

#224 The Original Dave on 10.17.10 at 5:27 pm

Omg, omg, omg Garth still has real estate….Garth wants to sell millions of books to the thousands that visit this site. He wants us to vacate our houses so that he can buy them all up. He wants to call the country Garthada. Damn him. Lets not fall for it.

Everyone, sleep on your granite counter tops for the next couple of nights!

#225 Sue on 10.17.10 at 5:33 pm

Just wading into the desert debate – a little late –

See: http://www.desert.org/home08.html

#226 Ben on 10.17.10 at 5:36 pm

Ok change the blog and pick already, frig this is getting boring!

#227 Sue on 10.17.10 at 5:38 pm

…and if it’s in the Toronto Star, it *must* be true:

http://www.thestar.com/Travel/article/655324

(“Osoyoos, Canada’s Lone Desert”)

#228 squidly77 on 10.17.10 at 6:05 pm

Devils Advocate

You are way too full of yourself, your a salesman for Pete’s sake. You have no more power over the market than I do the power belongs to the MLS.

Without the exclusive rights to the MLS a realtor quickly becomes today’s blacksmith.

#229 Nostradamus Le Mad Vlad on 10.17.10 at 6:17 pm


Goldbugs — GS explained.

#161 TheBigLebowski and #164 dark sad person — Correct. See link at post #167, Deliberate Economic Takedown.

Violence is one aspect the elite want, because as long as sheeple are fighting among themselves, no one is paying attention to the other stuff. The elite are trying squeeze us dry, via Monsanto, false flu outbreaks, etc.

#192 jess — “Glenn Beck Brings Exxon Mobil-Linked Religious Front Group to Tell Christians Not to Believe in Climate Change”

Without doubt, there are still people who can’t (or won’t) see beyond their fat, bloated POVs.

The climate always has been and will be a natural part of the earth, and change is one of the many constants in evolution.

Put them together and what is the outcome? Has anyone bothered to check the amount of CO2 a volcano adds to the mix?

Guess it’s too difficult for them to comprehend!

#230 dark sad person on 10.17.10 at 6:54 pm

BERLIN (AFP) – Germany’s attempt to create a multi-cultural society has failed completely, Chancellor Angela Merkel said at the weekend, calling on the country’s immigrants to learn German and adopt Christian values.

Merkel weighed in for the first time in a blistering debate sparked by a central bank board member saying the country was being made “more stupid” by poorly educated and unproductive Muslim migrants.

“Multikulti”, the concept that “we are now living side by side and are happy about it,” does not work, Merkel told a meeting of younger members of her conservative Christian Democratic Union (CDU) party at Potsdam near Berlin.

“This approach has failed, totally,” she said, adding that immigrants should integrate and adopt Germany’s culture and values.

“We feel tied to Christian values. Those who don’t accept them don’t have a place here,” said the chancellor.

http://news.yahoo.com/s/afp/20101017/wl_afp/germanymuslimreligionimmigration

#231 Checkmate on 10.17.10 at 7:13 pm

#201 Kim

“Still not understanding. Even if someone can afford to hold what they “want” why would they hold something they are so sure is losing value??”

Checkmate!

#232 Devore on 10.17.10 at 7:26 pm

#226 Mark

And their houses fall into gradual disrepair, and over time, the price becomes discounted because the kitchen isn’t modern, the carpets are worn, etc. Those owners are equity-stripping, which isn’t exactly a bad thing, but over the long term, will negatively affect the price they receive when the stripped asset is disposed of.

This is something a lot of would-be “investors” forget. A house is a depreciating asset. It requires constant maintenance. And if you want to sell it, you’ll quickly realize your 20 year old house (or god forbid condo) is competing with brand-new and near-new product. If you want to fetch top price, and realize your paper gains, you will have to spend lots of money upgrading and renovating, or take a hefty price cut.

People balk at condo maintenance fees, but house owners should be setting aside the same (or even greater) amount of money every month for their house maintenance budget, to cover regular inspections, repairs, service, end-of-life replacements, and upgrades to keep the house in good market shape.

#233 BrianT on 10.17.10 at 7:28 pm

#218-The funny thing is that Glenn Beck, Al Gore and Barack Obama are basically the same guy-Beck has a different group of drooling followers than the other two.

#234 BrianT on 10.17.10 at 7:38 pm

#212Jess-Don’t worry-your betters are attempting to control this dangerous technology of info exchange called the Internet-but first they need to catch the 7 foot tall dialysis patient darting in and out of high tech caves-he might be hiding under your bed so make sure you sleep with the night light on.

#235 jess on 10.17.10 at 7:49 pm

the banking crisis described in 3min.funny
http://www.youtube.com/watch?v=NOzR3UAyXao
=========================
215 Evangeline
..”the debate is about what is causing climate change. ”

This is what i know, is that all humans will be affected given the interdependence of living things.
==========
Goldman Sachs Asset Management to Launch Core Real Estate …
13 Oct 2010 … This new business will focus on investing in and managing core and core plus real estate assets primarily in the … Goldman Sachs announces $61 MM investment in affordable housing … USGBC – U.S. Green Building Council …

#236 Nostradamus Le Mad Vlad on 10.17.10 at 8:00 pm


The Four Horsemen of the Apocalypse appear right on cue to play their roles. “One thing this article fails to address is the historical reality that the US’s response to any depression has been to start a war. The last great war ended with nuclear weapons: I am greatly concerned that the next US-sponsored great war (as an attempt to forestall the potential scenarios detailed in this article) will be started with them.” wrh.com.

As Iceland has gone, so the EU and North America following merrily along. The blind leading the blind.

IMF in Shanghai “IF one has any kinds of financial holdings, it might be wise to watch the outcome of these meetings, as they may be crucial to the decisions you make about your portfolio, and how that portfolio is allocated.” wrh.com.

China is not the villain. The US Fed is.

The Real GS (not Dilbert’s). From April 16, 2010. “This is why the talking heads are trying to shout down the foreclosuregate mess, because the citizen’s anger will not stop with the foreclosure fraud but will (already is) ripping the scabs of a worse scandal; that the entire bundled mortgage bubble was a fraud, one in which the US Government assisted Wall Street by dangling an $8000 tax credit before new homeowners who otherwise might have prudently declined to sign a mortgage.” wrh.com.

5:28 clip Sparks visits the WH. Who wins?

Falling US$ — Increasing cotton prices (clothes, etc.) go up in price.

Put these two stories together, seemingly unconnected. Think again! One min. clip.

Plus this. False flag soon?

Poverty in the USA “WASHINGTON — The American suburb is no longer a refuge from poverty in cities.”

Keep in mind the the leftover swine flu vaccines from last year’s A-H1N1 hoax have been added to this year’s regular flu shot. Evidently, I’m still alive, and NOT taking any bloody shot!

Mortgage + Legal Stuff “The unfolding foreclosure-processing debacle is causing bank stocks to slide and putting millions of delinquent borrowers in limbo.”

7:46 clip Donald Duck for President? Why not? Ronnie Reagan was elected twice! Also incl. Glenn Beck.

US Fed Owners and History “Charles A. Lindbergh, Sr. 1913 “When the President signs this bill, the invisible government of the monetary power will be legalized….the worst legislative crime of the ages is perpetrated by this banking and currency bill.”

#237 Got A Watch on 10.17.10 at 8:02 pm

Connie – sorry, I misunderstood you.

Grandpa Grinch – well still 3.8-1 is not that far off of 3-1, is all I was saying. I guess you would have to compare what you can rent in the same area for the amount of the monthly payment. I mean, they still have to live somewhere, and unless they want to live in some dumpy basement, it costs money. As long as the big income doesn’t get laid off, they should be OK. It’s not ideal, but as you have found, most people won’t take sensible advice – not like they listened to you anyway now, is it. And worse, to preserve peace in the family, you won’t be able to say “I told you so” later.

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Everybody makes their own choices. Maybe they’ll learn something out of it. But as I look around, and just shake my head, I think, probably not.

Have you talked to some J6P types? Tell them you read Garth’s Blog, they say vaguely, “oh, wasn’t he kicked out of the Conservatives or something?” -“yeah, it’s a Blog about real estate and investing, he writes books” – “Say, did you watch that Leaf game?” – typical conversation. The names have been omitted to protect the guilty.

It’s thankless. Most people seem to be about as smart as a box of rocks. I’m not saying they have to agree with me. But have an opinion, read, try and maybe know something or discover something you didn’t know. There’s what, 34 million people in Canada now, we got 233 comments now, over 2+ days, and half of them are from DA.

But ‘Dancing With The Stars’ is on, can’t miss that!

Factoid: about 1.7% of the people who visit this site this leave a comment. Now you can feel truly weird. — Garth