We’re different

A year ago I went to Calgary and said house sales and prices would decline. That was shocking enough to make the evening TV news. In response the Calgary Real Estate Board said I was (and I paraphrase) an idiot.

Tomorrow I go back. Let’s review.

A year ago 1,285 single family homes changed hands in Cowtown, and this year the monthly sales number is 958. That’s a decline of 25%. A definite gelding. In fact year-to-date house deals are at the lowest point in a decade. Back in 2007, for example, activity peaked with 15,422 sales, while this year it will be more like 11,000. Not so hot for a city of 1.2 million people.

As for prices, they were lower last month than a year ago and $16,000 per house less than three years ago. So, twelve months ago when realtor boss Bonnie Wegerick said, “Calgary’s housing market has clearly turned a corner,” she was right. So was I.

Of course, any Canadian city with a Muslim as mayor and nuts on its Silverados is inherently interesting. I just wouldn’t buy a house there. Despite Ted Zaharko – or maybe because of him. The irascible local Royal LePage broker was shilling this week for his company which just turned out another whopper of a media release (picked up by all the serious newspapers who just changed the bylines) claimeing an outbreak of housing normalcy.

Calgary house prices stabilized in the third quarter and now stand close to year-ago levels, it said. Of course, the loss in house values over three years went unmentioned, as well as the devastating one-quarter plunge in buyers. Added Ted, brightly: “When conditions such as low interest rates or price decreases occur in Calgary, the market reacts quickly and in a significant way. However, even though the downturn did have a considerable impact on us, the Alberta economy and its housing market have always been, and will continue to be, among the strongest in the country.”

I’ve told you many times it’s unfortunate when the real estate industry is blatantly irresponsible and deliberately distorts market conditions in order to fool buyers. It’s a democratic disaster when the media reports it as news. And yesterday this story was regurgitated, with the appropriate local spin, in Vancouver, Edmonton, Toronto, Winnipeg, Montreal and Halifax, as well as Calgary. In none of those articles was balance provided.

And this brings us to Alison O’Riordan, who writes for a big newspaper in Dublin, which is about the same size as Calgary. Her column this week was about her downtown condo and the despair she felt looking out her fifth-floor window at a brand new development across the street. Those condos boast marble, granite, stainless, oversized windows, heated towel rails and mirrored cabinets. And she hates them.

“If there was a competition for throwing dirty looks,” Alison says, “I would easily have come first, for those aesthetically beautiful Grand Canal Square apartments are being offered to first-time buyers for a sickening €190,000. Two years ago, with help from my parents, I bought into the same sought-after riverside location in Dublin 2, but for the horrifying sum of €525,000.”

That’s right. A 64% drop in real estate values in a major city, among luxury downtown properties – destroying this young woman’s financial future (and that of every other buyer in the last two years).

She continues: “The market’s collapse is the worst thing that has happened many young people of my generation. In 2008, even as the market was softening, I honestly thought I had found my ideal home for a reasonable price. I got caught up in the crazy mania of feeling I must have an apartment… I chastise myself for incarcerating myself in my own financial prison. A prison, I soon learned, that had no more than about 10 inmates. Today the other apartments in my building are filled to the brim with wise renters.”

Could this happen in Calgary? Vancouver? Toronto? Or is it so different here? Did the laws of supply and demand give Canada a pass?

Well, they sure didn’t exempt the country in the world most like us. The latest word from America is that real estate now seems to be entering an unprecedented double dip. “House prices are likely to fall steadily over the course of the next 12 months, taking them to a new cycle low,” says Capital Economics. “Prices may not regain their previous peak for a decade.”

Adds the report: “A big part of the problem is that the previous sharp falls in prices have left many households with a mortgage worth more than their home. In the second quarter, 23 per cent of all mortgage holders were in negative equity. Half do not have the 20 per cent of positive home equity necessary to qualify for a new mortgage … Millions of Americans simply are unable to move home or refinance.”

Can’t sell in Dublin. Can’t sell in Phoenix. Is there a lesson here?

Not according to LePage boss Phil Soper.

“Soper said it’s likely this year’s fourth quarter will see Canadian home prices, on average, about even with year-earlier levels, given the high comparison levels. He expects a return to a range of three to five per cent growth early in the new year.” Really? Based on record household debt, structural unemployment, aging Boomers and rising taxes? Sheesh.

Some people accuse this blog of being tedious and call its owner a useless sack of steaming fresh prairie feed lot patties. Houses will advance forever, they say, saved by those rich immigrants, more cheap money, Phil Soper and Mr. Harper.

And maybe they will. But just in case, I’d take cover.

Alison in Dublin – coping badly with a 64% drop in condo prices.

202 comments ↓

#1 Truth hurts on 10.19.10 at 9:10 pm

Truth does indeed hurt

http://financialinsights.wordpress.com/2010/10/19/revisiting-fundamentals/

#2 hobbygirl on 10.19.10 at 9:18 pm

Earlier today CBC online posted a report quoting Royal Lepage’s Phil Sopher stating ‘economic uncertainty is starting to fade’. This on a day where the market dropped 100 points and warnings of more slowdowns ahead.

No way to give your firm any credibility in light of the obvious. I also noticed this quote of his was removed by CBC later on in the day (must make them look ridiculous).

Sopher is missing his calling as a tobacco lobbyist.

#3 Ayn Rand on 10.19.10 at 9:27 pm

I am personally sick of the MSM – and have posted Garth’s comment about media reporting in the G&M:

http://www.theglobeandmail.com/report-on-business/economy/housing/house-prices-see-return-to-normalcy/article1763105/comments/

#4 Dan in Victoria on 10.19.10 at 9:27 pm

And to top that off.
Mortgages becoming harder to get for the
“Well heeled”
http://www.msnbc.msn.com/id/39648608/ns/business-real_estate

#5 Guy_in_Regina on 10.19.10 at 9:34 pm

Someone on the last thread said it all:

“the second mouse gets the cheese”.

#6 A Guy in Oakville on 10.19.10 at 9:36 pm

Hi Garth,
The Saturday Toronto Star had an article on the front of the Section B about real-estate. Said that house prices would drop 7% by end of 2011.

#7 dark sad person on 10.19.10 at 9:48 pm

I’ve told you many times it’s unfortunate when the real estate industry is blatantly irresponsible and deliberately distorts market conditions in order to fool buyers. It’s a democratic disaster when the media reports it as news. And yesterday this story was reported, with the appropriate local spin, in Vancouver, Edmonton, Toronto, Winnipeg, Montreal and Halifax, as well as Calgary. In none of those articles was balance provided.

***************
For sure-Gut punch the Realtors and the Media-
They both have helped lead the dumbed down people to their financial ruin-but-lets also go for the windpipes of the real culprits-
The designing Engineers of this disaster-
H-F-C–

Well–maybe not F-cuz-he’s too dumb to understand the big picture-so-
Lets just take him and frog march him to the front of the class and all take turns-
Kicking him in the balls–Repeatedly!!
Until he does finally get it–

#8 JC on 10.19.10 at 9:48 pm

Amusing… the variety and quality of social discourse on this blog over the last few entries.

Some of the persistent blog dawgs who exclusively pump gold, housing… OR doom can only be described as:

#9 Brew on 10.19.10 at 9:56 pm

“The latest word from America is that real estate now seems to be entering an unprecedented double dip.”

I just got back from visiting relatives in Cape Coral Florida. I have been following the real estate scene there for the last several years and watched it rise and now fall.

I always ride a bike around the neighbourhood and look at property. I can tell you there are more houses for sale than last year at this time. And lots more just sitting empty and neglected.

One morning on a run to get my morning newspaper fix I saw about 7 or 8 people with weed wackers and lawn mowers and other tools at a vacant house. I slowed to see what they were doing. There was a make shift sign placed on the front lawn as they worked.
It said something like Keeping Cape Coral beautiful.

This crew goes around as volunteers and makes yards look a little less overgrown. There were many that had the makeover and many that were still waiting.

The inventory of houses and condos is incredible. The prices were lower than last year so I can’t imagine a rebound here any time soon.

Brew

#10 totalchaos on 10.19.10 at 10:06 pm

In my hood, very few sales, lots of price reductions and many homes taken off the market so the owners can try again in the spring. I was very lucky to have sold my place – in large part because of my realtor knowing the perfect “greater fool”.

Now before all of you realtors get on your high horse, this same realtor commented to me when I listed my place that the place across the street from mine was priced well and should go fast. That was almost 2 months and one price reduction ago. Last week when I saw him, I said I was a little worried about the owners as they had already bought. “Tsk, tsk,” says he “You should never buy a place without having sold or a subject to sale”

What? Just this spring, places around here were selling like crazy, not to mention the 8 years before that. Prospective buyers were told sellers wouldn’t even entertain a “subject to sale” offer and if you sold first, prices may have gone up 30-50K before you found a new one. People put faith in their “real estate professionals” (note the sarcasm) to tell them that the market has shifted.

It would seem these poor folks will get hosed. I would love to tell them to drop the price by 50K and unload it, but their realtor said that prices will be up in the spring, so they plan to rent it out while they wait to sell. What do I know, I’m not a real estate professional.

Oh, incidentally, when we bought our property 9 years ago the same agent said to me that we overpaid by 11K. We sold it for just shy of 3x what we paid.

#11 Jon B on 10.19.10 at 10:09 pm

I’m surprised the much anticipated RE correction is taking this long. Somethings got to give. But when…. I’m in this for entertainment value only.

#12 dark sad person on 10.19.10 at 10:14 pm

#8 JC on 10.19.10 at 9:48 pm

Amusing… the variety and quality of social discourse on this blog over the last few entries.

Some of the persistent blog dawgs who exclusively pump gold, housing… OR doom can only be described as:

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

Care to be specific-
Name some names and then blow away their silly propaganda with the “real truth”
I mean-when you “know’ what they say is BS-
It should be easy to dispel and expose for all to see-
the social discourse-they engage in- huh

#13 Kilt on 10.19.10 at 10:20 pm

The laws of supply and demand still rule.

In Vancouver, supply is low, demand is high.

Vancouver isn’t Dublin. The unemployment rate is dublin is nearly double what it is in Vancouver!!!
And you talk about people being irresponsible and distorting market conditions.

http://agentwill.com/weekly-stats/

Market looks fine to me. Meaning, those of us who don’t have $1 million, won’t be buying a home anytime soon in Vancouver.

Kilt.

#14 Tim on 10.19.10 at 10:26 pm

Surprise, the BOC keeps interest rates the same. People with real estate continue to have the benefit of ridiculously low rates, provided they can keep their job- 92% of workers are still employed, though some are underemployed, they’ll keep on paying their mortgage, which will delay a massive correction.

#15 april on 10.19.10 at 10:30 pm

If luxury condos in Vancouver have dropped their asking price from 8m to under 5m and still no takers doesn’t that signify a huge change starting to happen. Has anyone heard this being broadcast thru the media?

#16 Increasing that 1% on 10.19.10 at 10:32 pm

The face says it all, Alison in Dublin- that sucks
——————————————-
#8. Jc

Hey, you didn’t finish your post
——————————————-

And, on the radio today, Condos are the place to have your money in Real Estate in Toronto, as their price rose 6% from last year.

#17 Utopia on 10.19.10 at 10:43 pm

Poor Alison.

I can only imagine how much prettier she would have been had she made a successful investment and not fallen so deeply underwater and into the death-trap of mortgage debt.

Possibly even beautiful.

But just look at the poor lass. She has taken on a look that tens of thousands of dewy eyed young Canadian newby R/E buyers are about to acquire.

A mix of healthy youthfulness and worried misery as they confront what only their own grand-parents could know from other times. Opportunity spent before it’s time was ripe. She is already too old for her sweet youth.

Granted, Ireland was at the epicenter of some of the worst real estate carnage in all of Europe. Oh, except for Iceland, Greece, Spain and others. The country literally staked it’s claim on a high technology rennaisance that would take the world by storm.

Oops. Guess they never really considered how a multitude of Asian interests, flush with Dollars and Euros (and bedded down with the very critical source of Multinational investment) might one day gut their manufacturing sector altogether.

Poor Alison. Poor Ireland too.

Last year they only had their creativity and brainpower to sell. This year, nobody even wants their bodies.

Guess it’s back to weaving wool mittens for them as the Asian empire consumes all employment opportunities and destines a generation of dewy eyed youthful home buyers to a debtors prison and to a life on government pogey.

But we don’t have to worry here in our country. Hey, Canada is special. Our work is unique and special. And our homes are,…well……

Priceless.

#18 Mark on 10.19.10 at 10:48 pm

If they’re still building units at ~200k Euros, then they’re likely still overpriced. The poor girl, if not an entire generation, will end up in bankruptcy.

#19 john m on 10.19.10 at 10:48 pm

H-F-C and company for a short period of glory have been instrumental in destroying the standard of living for our entire country. From the squandering of a 13 billion surplus,the so called “temporary recession” to” things are different here” it has been and continues to be a total fraud.

#20 AnotherLowlyRenter on 10.19.10 at 10:52 pm

Foreign investment is one of the #1 reasons bulls give for the Vancouver market to hold strong.

Do they believe that foreign investors won’t exit an investment as quickly as they got in — if they believe the tables have turned?

#21 squidly77 on 10.19.10 at 10:54 pm

Be scared Garth, be very scared! Calgary realtors are plotting a game plan to get you. http://www.youtube.com/watch?v=yXhl6TOyq3k

#22 Chaos on 10.19.10 at 11:10 pm

Man those Irish Eyes ain’t smilin’…

If looks could kill I’m pretty sure the colleen would kill her estate agent.

#23 henrigolo on 10.19.10 at 11:14 pm

For the French-speaking blog dawgs, Radio-Canada has this nice piece about the Vancouver Olympic Village:

http://www.radio-canada.ca/emissions/desautels/2010-2011/chronique.asp?idChronique=122280

#24 dmc on 10.19.10 at 11:15 pm

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

time to sell weed to cover the mortgage in australia

#25 Cameroni on 10.19.10 at 11:17 pm

Re Post #7 written by dark sad person
————————————————
Keep it up DSP. The computers never forget.

#26 The Original Dave on 10.19.10 at 11:19 pm

Hi Garth…newbie here.
I’ve been reading your blog for a week now. I keep telling my live-in bf that his 200K of equity in his house is going to melt away and we should sell/rent and then buy our dream home in the next 2 years.
He gives me the “you gotta live somewhere” argument and it’s annoying! Couldn’t he invest that 200K to generate income to pay his rent? How much could he expect?
I will have him read the response.
Thanks!
———————————————-

Sue, I envy your boyfriend. It’s unusual for a woman to think the way you do. Usually it’s the other way around. It’s been a battle for me with my wife who I’ve been married to for a year. She keeps getting pestered by her friends to buy a house. After my wife tells me what they say, I ask her how much those people lost in the stock market in the crash and how they sold out of everything and got clobbered. I then remind her how we’re up a ridiculous amount and have locked in profits.

This real estate market is the biggest bubble I’ve seen…no joke. I’ve never seen so many people literally obsessed and willing to pay anything for an asset. This alone tells me the downside is dramatic. Be patient, but try to help your bf see the light so that he can sell high and re-purchase low. It does wonders for a couple starting out

#27 rentin on 10.19.10 at 11:21 pm

“In none of those articles was balance provided.”

Here is some balance:

I rent AND own, and they BOTH make $ense. It all depends on how much rent is, and what other investments are paying.

The only thing that housing provides that no other investment can is a roof over your head…..

Say you rode the housing market all the way to the bottom, house still feels the same.

Say you rode the dot com bubble to the bottom, might be tough to generate rent money off that residual investment.

#28 Cameroni on 10.19.10 at 11:22 pm

Regarding Post #7 from dark sad person on 10.19.10
——————————————————-

Have I called you an idiot yet today?

Yup, You are still an idiot.

#29 Susi on 10.19.10 at 11:36 pm

Hi Garth,

I’m Irish and have been praying for the past 12 months for Vancouver to follow the same path as Dublin. Ireland is destroyed and it’s getting worse but it’s not Vancouver. I sold my condo in Yaletown well over 12 months in anticipation of a downturn and have been waiting for a price correction ever since. I’m getting disheartened with the situation. Interest rates are not rising and sellers are pulling houses of the market for a few months and then listing them again at the same price! Do you see a price correction of any consequence happening in Vancity in the next 12 months?

#30 CalgaryBoy on 10.19.10 at 11:52 pm

Hmmm, no increase in interest rates…looks to me Mark Carney is still wanting to continue to play a very dangerous game. Ah, well, he’s letting the debt continue, prolonging the recovery, making things worse…that’s his game and I’m not playing it.

#31 mab on 10.19.10 at 11:59 pm

best description of the US foreclosure problem:
http://whispersfromtheedgeoftherainforest.blogspot.com/2010/10/intsy-bitsy-spider-impact-of-us.html

and a real life example:
http://gonzalolira.blogspot.com/2010/10/this-is-what-brian-and-ilsa-said-to.html

#32 Blackberry guy with shades on head on 10.20.10 at 12:01 am

It’s absolutely happening here (Calgary).

Heard someone say that 40% of condos in The downtown are “investment properties” ie not owner occupied – people buying, in leveraged to the hilt, in negative cash flow, on the expectation that it will go up.

This will not end well……

#33 Tonguestump on 10.20.10 at 12:02 am

Wow Garth, I wonder sometimes if you like awake at night thinking what am I possibly going to find to write about tomorrow. You keep pulling it out and no Paypal donation box either. Good stuff. thanks

#34 Patz on 10.20.10 at 12:03 am

No one should be surprised at the brigade of sunshine blowers looking for skirts. Every downturn has been accompanied by this particular form of pond scum. Right up to the last moment experts were pumping dotcom stocks. Likewise the Great Depression was accompanied by cheerleaders all the way down.

Every step of the way here we can expect the pumpers to be calling a bottom; claim the markets have stabilized and generally make things just a little bit worse for all.

Today on the Bill Good show they had a round table on Milly Waters. According to these ‘experts’ they aren’t selling because of city council’s mistakes; people not wanting to share with low income residents and the doubtful wisdom of the LEED requirements—everything but the market. I was hoping Bill Clinton would call in and say “It’s the economy, stupid.” Or in our case it’s the stupid economy!

#35 groundzeropat on 10.20.10 at 12:05 am

7 of 55 staff gone at my dealership in the past 2 months. I got to keep my job for a 20% discount. Dennison GM dealership across the street closed down forever last week so there’s a bunch more people out of work. I’m talking to everyone else that I know in the car business and it has been very slow for about 4 months now. On average there has been a drop of 20-30% in business volume and a 10-20% cut in staff or staff wages. Would anyone care to share what is happening in their neck of the woods?

#36 Old_is_Gold on 10.20.10 at 12:19 am

If the luck of the Irish ran out, so too will the charm of the Canucks. The bubble process has been more devious in Canada than the US, and it is presently much bigger than it was in the US. The constant media spin that there was no sub-prime in Canada, that our banks’ lending standards were higher (this mantra is still being repeated by the MSM), that the government took charge and raised lending standards etc. are fictions that are accepted as fact by the majority.

So when the super toxic SHTF all the culprits will have their rear ends covered. The banks will claim there was no sub prime here, the media will play dumb as usual (the whole thing will come as a surprise to them), and the government will claim that they made all the right moves to prevent a crash but it happened anyway because of circumstances totally beyond their control such as a double dip in the US, sovereign debt crises in Europe, China raising interest rates, riots in France, the Giants winning the World Series – any old excuse will do except the truth that the whole mess was created by policy decisions to lower or rather to massacre interest rates at the behest of the BOC. A policy that Harperooned the Canadian economy for good just like the Irish – no, probably much worse than the Irish. The patient is on life support and everyone is partying like it was the roaring 20’s all over again. However they forget that the dirty 30’s followed the 20’s and which in turn were followed by the deadly 40’s – killing 50 million and permanently scarring hundreds of millions more.

This game is still in the first period, we have yet a long ways to go. Some folks on this blog are starting to be fooled that the horn has sounded and we won the game when all that ended was the first period. The second period in which the dominoes start falling (meaning crashing house prices) will begin no later than spring of 2011, and no amount of media spin or realtor fantasies or government tall tales will prevent it from happening. Having already covered their butts, the greater fools will be thrown to the wolves just as they have been in the US, in Ireland, the UK, Spain and other countries, especially in Eastern Europe. There will not even be a pretense of helping the hapless homeowners as there has been in the US with their mortgage modification programs etc. The refrain from the banksters and politicos will be that they never did anything wrong, so they have nothing to atone for.

THIS WILL GET UGLY

In an unrelated note I am in Winnipeg this week and saw a billboard Ad advertising a Kevin O’Leary seminar titled – ‘How to do well in business’ or ‘How to get ahead in business’, or something like that. I wouldn’t go to his seminar if someone paid me to go there! In the world in which we live, the way to get ahead in business is to lie, cheat, steal, even kill without compunction. To bribe or blackmail politicians to do your bidding and the public be damned! Walmart was not built through American ingenuity, it was built by buying people in power or by paying to put people into power, and through American Imperialism that guarantees a cheap labor pool of unlimited number of human slaves. That is the new business model and don’t you let Kevin or Amanda what’ser name or anyone else tell you otherwise. You wanna be an international bankster or a high ranking multinational corporate executive or a high ranking member of the Executive branch or just about any branch of government, check your soul in at Hotel Diabolos and then you may have a chance. Hard work, honesty, integrity, morality – these words no longer exist in the modern businessman’s lexicon!

Thanks for letting me rant!

#37 Nostradamus Le Mad Vlad on 10.20.10 at 12:19 am


“We’re different. I was an idiot. . . a useless sack of steaming fresh prairie feed lot patties and nuts on its Silverados, But just in case, I’d take cover. [Phil Soper and Mr. Harper. — Flopsy and Mopsy Cottontail Rabbits]”

Interesting to note that PMSH eats prairie feed lot patties with nuts. Fair description of the CPC, the “Eat Shit and Die” party!
*
#204 dark sad person on 10.19.10 at 9:17 pm

“Have they decided to throw BoA under the bus-similar to Bear Sterns-You know–let GS “absorb” them and they will again-pick all the good pieces out of the gut pile and then shift all the toxic crap onto the taxpayer-via-level 3 assets-or perhaps expand the Fed balance sheet-again-backed by taxpayers–”

You hit the nail on the head. The bigwigs are taking serious chunks from the stimulus and stuffing their pockets with it, readying themselves to help their buddies out and shafting taxpayers in the process.

And the beat goes on until one day — KABOOM! The steaming dunghill explodes in their faces. Looks mighty good on them!
*
Clearest sign of a bear market.

The Global Elite and Global Governance.

Anyone investing in hedge funds?

The Skull & Bones Nice pic of the Statue of Liberty being hit by lightning.

OTC Derivatives & Gold Add some more of the physical stuff — lift off is only a short time away!

Links in. Remember Bill Clinton? “Cuomo and Obama devised a plan to “spread the risk”. We are seeing the effects of their plan in today’s real estate market.”

Geithner Should he be looked upon as a crackhead or Deadhead (The Grateful Dead?). Plus — CIA & Corporations Finally in bed and making whoopee together!

Shades of WW2?

Communication Skills, or the lack thereof. 2013 — the sun awakens.

Link in. Positive – Negative karma. What goes around comes right back round again. The wheel always turns.

Good for Turkey. The west is destroying itself continually.

#38 JM in London on 10.20.10 at 12:30 am

#8 JC

I agree it’s interesting. I’ll draw attention to a particular personality firing a shot across your bow at the number 12 position. Oil man gone armchair economist/doomer with an ego and Napolean complex to boot.

It’s an interesting place this…

Oh and DSP? apparently there are some geko’s in a box somewhere you have?

#39 Sam on 10.20.10 at 12:51 am

>>Of course, any Canadian city with a Muslim as mayor and nuts on its Silverados is inherently interesting. I just wouldn’t buy a house there.<<

Garth,

I am a muslim and I find your comment offensive. Why being a muslim is 'interesting' ? I am really shocked to see such a comment coming from.

Regards,

Disgusted

Everyone else found it interesting. Lighten up. — Garth

#40 Larry on 10.20.10 at 12:53 am

Poor Alison, met many like her a few years ago in Ireland. Full of crap and expecting the easy life through RE prices going up forever. Calgary is also full of these types sigh.

#41 Taking Stock on 10.20.10 at 12:59 am

Couldn’t one or more of you blog dawgs spend some time on Facebook warning people about the future of Real Estate? If a Calgarian can become Mayor because of this social network maybe we could modify the direction real estate is heading. At least limit the number of casualties!

#42 Don on 10.20.10 at 1:04 am

dark sad person – cease and go away!

#43 TheRaj on 10.20.10 at 1:04 am

Just bought a house in Surrey BC today – prime minus .8 now jus sitting pretty waiting for the 5 year fixed to hit rock bottom, lock in and start building equity
and in 5/6 years even if rates are higher the mortgage should be smaller and managable (fingers crossed) if not than increase the amortization. with any luck (blessing) might even flip in a few months to a greater fool. with rates this low anyone renting must have really , really bad credit, no job/income or a wad of cash/gold buried in the not to deep ground.

#44 HouseBuster on 10.20.10 at 1:08 am

Don’t be surprised if you see a 50% drop in prices.

#45 John on 10.20.10 at 1:15 am

Guy_In_Regina

You forgot the 1st line,
‘the first mouse gets the squeeze’

#46 realpaul on 10.20.10 at 1:52 am

When the stock market dropped on no news this morning my phone started ringing and wouldn’t stop. Every penny junkie I knew was sure the sky was falling and they were breathless after having hit the sell button…….”What” they asked, had I done?”
I replied “Nothing…take a step back and tell me what has changed?”
I heard the litany of nonsense that I’d already heard on TV repeated as if it had just been burned onto stone by a god in the mountains. All only temporarily true of course…that is if you count your life in minutes.

Lets look at it…gold off 3% is like a ten dollar stock being down .30 cents……no big deal …right?

China raising rates .5% with GDP growth of 11%….thats reason to panic…..you mean to say that you think that .5% is going to shut down the factories with Christmas around the corner….wat choo smokin’ Willis?

An agrrrrrrrrreeement on currency at the upcoming G20? Geitner has already announced that the new dollar policy is for a weaker dollar to spur domestic growth. The truth is that the biggest American Corporations have a majority of their revenues from oversea and the dollar trade has them rolling in record profits. And you think that and the 60 trillion dollar debt and adding a trillion and a half to the deficit was going to vanish on the news ‘o the day?

These same morons who were calling me live in expensive homes….. that will never go down………because the talking heads have told them so. BTW the $38 bucks that gold lost was made up by four in the afternoon and is positive in overseas trading as I write.

Losing thousands a month in real estate and locking in your losses at every yip means the MSM is doing a real number on the sheeple.

A word to the wise…….stop getting your advice from the pimps.

#47 foundcalgary on 10.20.10 at 2:12 am

Garth, it’s unfortunate that you would mention the Mayor’s religion, which is his personal choice and freedom, in such a way as to negatively describe Calgary.

#48 Sasquatch on 10.20.10 at 2:17 am

So September, the traditional month to sell & buy real estate has come and gone. It broke records for lack of sales, October is past half gone and the winter now comes. If the great season of real estate was not so great, then what happens now?

Winter traditionally does not sell as much. People are more concerned with the holidays and don’t much care for moving in the snow.

Now I think is the time to watch. Let us see what happens to those who could not sell during the great real estate season. Pull up a chair and stare across the street, for what happens now.

#49 Globe Trotter on 10.20.10 at 2:34 am

Great topic Garth! I really enjoy the tell it like it is stuff you always post.

Calgary, like here in London, UK (I live in both) is no different. I haven’t been to Ireland yet but my landlord is from there and has “real estate investments there” and he tells me he is getting absolutely killed up there and so are his business friends.

I believe this correction is a very good and healthy thing, what we had for the past 10 years was unsustainable, unheathy and to be honest, made Calgary a worse place to live (It was much friendlier and a “anyone can make it town” in 2000 than 2010).

About the new Calgary mayor, I’m surprised as it shows how much has changed in Calgary. He is already talking about redistribution of wealth.

#50 Happy on 10.20.10 at 3:03 am

Nice photo. A squirrel showing off his nuts !

#51 Jojo on 10.20.10 at 3:40 am

What #2 hobbygirl ???
Did you mentioned stock market TSX or DOW?
You’ll see maybe crash again Nov/Dec/10 or April to Sep/2011, but indexes will rise in the future.
About housing will see CRASH in Canada like never before unleast we are going again HyperInflation ride like 1976-1981?

#52 Brian1 on 10.20.10 at 4:53 am

#3 Ayn Rand;Judging from the comments from the G&M there is a revolution afoot. They hit harder than this blog does. I now realize how alone the house buyer is when facing the juggernaut of Real Estate Media hype. They don’t stand a chance. They are now officially enslaved thanks to people like Ann Rohmer the woman without shame. Well, she has her life all paid for now so, ‘shut the door behind me; thank you very much’.

#53 Brian1 on 10.20.10 at 4:59 am

I have often wondered how immigrant buyers will react when they are eventually underwater. Will they seek bankruptcy or can they escape back to their old countries without penalty. I think it is an interesting question so I may harp about it for some time until I get some feedback.

#54 OttawaMike on 10.20.10 at 5:03 am

Something tells me this country’s real estate market still has some legs.
Phil Stupor or what ever his name is, may be probably partially correct.

There has been copious discussion on this blog about markets overshooting in either direction and I believe there is still some rocket fuel keeping prices on an upward trajectory in spite of the lower volumes.

Don’t be surprised if the spring market brings more incremental price increases before we eventually hit the wall.

Comparisons to the 1989 crash are difficult to make because the world is a far different place today.

#55 Aussie Roy on 10.20.10 at 5:07 am

I get soooo SICK of hearing this statement in Australia, I nealy didnt read todays post. But who can resist Garths economic (not so common) common sense.

Aussie Update

http://free-press-leader.whereilive.com.au/news/story/dip-in-house-values-in-the-dandenongs/
http://www.news.com.au/money/investing/whatever-happens-to-the-housing-market-saving-for-equity-in-a-home-is-a-must/story-e6frfmdr-1225940055741

Gee times are getting tough, forget renting a room out make it a garden
http://tasmanianrealestatetrouble.blogspot.com/2010/10/weeds.html

China will save the world?
http://www.bloomberg.com/news/2010-10-19/china-hides-rampant-inflation-in-money-binge-patrick-chovanec.html

#56 mark on 10.20.10 at 5:53 am

Hardly any surprise Alison found herself neck deep in it – look at the crap this cretin from her paper was writing, just as prices started to come down:

http://www.independent.ie/opinion/analysis/the-smart-ballsy-guys-are-buying-up-property-right-now-1047118.html

When it was brought up again recently he defended it as ‘original thought’. The pitchforks and torches are too good for guys like this.

#57 Ben on 10.20.10 at 6:15 am

Where does Joe average get the coin (the bank) to buy these over priced 60 year old brick boxes in TO? Their wages don’t justify it, my Chinese employer here doesn’t even hire Joe’s, he only hires Jose’s and Xu’s and pays them shite. I’m a 3rd generation white anglo saxon Canadian from redneck Alberta and I can’t believe the amount of immigrants in TO here. It just blows me away, I’m a minority at my work place, 95% of these people can’t even speak proper English for fack sake and I know they make absolute dirt wages because the Chinese are dirt cheap. My contract comes up at year end and won’t be renewed because I’m to expensive at $45 an hour. LOL

#58 David B on 10.20.10 at 6:24 am

Wow! Boys oh boys, did not know spinach was a morning stable in cowboy land Garth …..

Well said …. one thing for sure. The West is in and they pride themselves on the truth …. living it and each and every day and twice on Sundays. So they to-day will indeed be the first day of the rest of life when the read this article (Blog). Thursday evening will be a hoot, and be sure to shine your boots and keep your power dry. For those who plan to attend for the wrong reasons “Stay Home” for those who want really want the truth be still, be quiet and listen …. then when y’all the facts ….. you will know the truth!

#59 Ben on 10.20.10 at 6:41 am

Real estate in Canada appears to have reached the tipping point. According to the Canadian Real Estate Association, sales activity was down by a whopping 30 per cent this July over last, and prices fell by 3.5 per cent from the previous month. Insiders are warning that plunge could continue in the months and years to come. CIBC World Markets suggested prices could fall by as much as 10 per cent in two years, while Gluskin Sheff + Associates economist David Rosenberg is even more pessimistic.

http://ca.finance.yahoo.com/personal-finance/article/moneysense/1869/house-price-strategies-to-protect-yourself

#60 Erikson on 10.20.10 at 6:47 am

*Guy_in_Regina on 10.19.10 at 9:34 pm
Someone on the last thread said it all:

“the second mouse gets the cheese”.*

No second mouse will be trapped

#61 john m on 10.20.10 at 6:57 am

47 foundcalgary on 10.20.10 at 2:12 am<<<<<<<<<<< Get a life!

#62 reality, doesof on 10.20.10 at 6:59 am

I think if people viewed real estate as an expense rather than an asset we’d all have a clearer picture of what we’re getting into.

As an expense, it takes a loooong time to break even vs renting.

Better have a really long-term horizon if ever planning to buy (now or after prices drop).

http://www.planbeconomics.com/2010/10/20/housing-rent-vs-buy/

#63 bigrider on 10.20.10 at 7:03 am

#43 The Raj

If this is Raj Toor the RE agent turned TV show pumper go away. You’re RE advice is foolish both on your show and on this blog

#64 Love this Blog on 10.20.10 at 7:34 am

@35 Groundzeropat
“7 of 55 staff gone at my dealership in the past 2 months. I got to keep my job for a 20% discount. Dennison GM dealership across the street closed down forever last week so there’s a bunch more people out of work. I’m talking to everyone else that I know in the car business and it has been very slow for about 4 months now. On average there has been a drop of 20-30% in business volume and a 10-20% cut in staff or staff wages. Would anyone care to share what is happening in their neck of the woods?”

Great idea. I live in Watrous, Saskatchewan. Small town, about 1800. The area has 3 potash mines, and agriculture. So far, housing is still 2x the pricwe it was 4 years ago………at least. Over the last 2 months, however, I’m starting to see some price reductions, albeit mostly small (5-10 %) 10 percent on a house that is 100 % higher than 4 years ago is not enough. Excitement about the Jansen mine project is keeping houses high for now. What they don’t realize, is all construction workers will live in a ca,p and NOT be buying homes. (no choice – the have to live in camp)
Once built (if built -BHP is also trying to buy out PCS) the permanent employees will likely choose closer small Towns ot the City of Humboldt or even Sasaktoon. So, my wait will be longer. Since my rental situation is precarious, I may buy a mobile home next spring (prob 3-10 years old) and live there while I scope the market. To your question – our economy seems to not have changed in the last few years, still seems to be going well.

#65 Boomer62 on 10.20.10 at 7:35 am

Let’s hope Mr. and Mrs. O’Riordan only had one child.

#66 Willy H on 10.20.10 at 7:36 am

The “Ireland Experience” is certainly sobering.

Most of the folks on the Emerald Isle were snorting what appeared to be an endless supply of cheap (almost free) money. At the very same time they were being injected with vast sums of EU foreign aid! They had built themselves up so high they had twice the distance to fall.

Folks we know bought several cottages in Ireland around 2006 because they were afraid of being priced out and they desired investment properties, one of which would eventually become their retirement home. So much for the “luck of the Irish” …

#67 pjwlk on 10.20.10 at 7:38 am

Globe and Mail: The debt treadmill must be stopped.

“…As I have said before, 80 per cent rallies in a 12-month span last happened in the early 1930s and were followed by gut-wrenching spasms to the downside…”

http://www.theglobeandmail.com/globe-investor/investment-ideas/experts-podium/the-debt-treadmill-must-be-stopped/article1595453/

But this is not the 1930s – a time of trade wars, uncoordinated monetary policy and protectionism. It is, however, a time of political myopia and a debt-drenched population. The markets may not crash, but the consumer and homeowner may well. — Garth

#68 David B on 10.20.10 at 7:51 am

Here in HRM there will soon be a 8.5% increase in our power costs, plus they want a 40% increase in our water bills ( HST is on top that, hello BC and Ontario) all couched to increases at the pumps almost weekly.

There are no windfalls in pensions, investments, or raises from the boss en route.

Who will take the hit (s) …. small business ?

So there you go ….. Time to buy a house and sit back and wait for it rise 10-20-30% a year! “OR” a 2 dollar Lotto ticket …. chances of winning are about the same eh. LOL …

#69 Boomer62 on 10.20.10 at 8:02 am

#67 pjwlk

The markets can stay irrational much longer than the debt laden can stay solvent.

#70 Willy H on 10.20.10 at 8:16 am

Globe and Mail: The debt treadmill must be stopped.

“…As I have said before, 80 per cent rallies in a 12-month span last happened in the early 1930s and were followed by gut-wrenching spasms to the downside…”

But this is not the 1930s – a time of trade wars, uncoordinated monetary policy and protectionism. …. – Garth

—–
Our current Great Recession is similiar (in some ways) to the first Great Depression of 1873-1879 which lasted 65 months. It was renamed the “Long Depression” after the collapse of the 1930’s one upped it! One major difference between the Long Depression and our current state is that the US is printing money like mad to get us out of this mess* vs taking money out of circulation like they did in the 1870’s. The Long Depression was caused by rampant speculation (not unlike housing) and it led to falling prices (deflation) and a long period of low economic growth.
Unfortunately protectionism is alive and well. Russia & China have almost unfettered access to our markets and the ability to acquire major stakes in our resource sector. Just try to get access to the resource sector in China and Russia, you face and endless bureacracy or worse yet a machine gun (see link).

* most of money is ending up in the hands of bankers

http://www.calgaryherald.com/business/energy-resources/Norex+loses+seized+Russian+assets/3594820/story.html

#71 Voice Of Reason on 10.20.10 at 8:26 am

Garth, although I do admire your writing and a lot of your views, I do feel you were off base with your Muslim comment. I venture to say that the sentence “Of course, any Canadian city with a Jew/Black/Asian as mayor…” would never have made the light of day in this site.

Apparently everyone else also found it interesting. And it is. BTW, those are redneck Christian balls, I reckon. — Garth

#72 Jake on 10.20.10 at 8:54 am

Garth,
There was absolutely nothing wrong with your comment about Calgary’s Muslim mayor. I definitely find it “interesting” that Calgary is the first Canadian city to elect a Muslim mayor. Mr. Nenshi seems like a fantastic guy and, from the sounds of things, he may actually be in office to serve the people. Despite what outsiders may think, Alberta is quite an open and diverse place. It’s ridiculous that people have taken exception to the comment. They clearly did not get the point.

#73 Foggy on 10.20.10 at 8:57 am

At 39 Sam: quote:

I a muslim and I find your comment offensive. Why being a muslim is ‘interesting’ ? I am really shocked to see such a comment coming from.
Regards, Disgusted”

Garth was stating a simple fact. Where is the offense? What else do you find offensive – fluffy clouds and kittens? Myself and others are a little tired about worrying about whether we are offending some individual or their culture. You need to adapt to Canadian culture – we don’t need to tip toe around you.

#74 JeffinPickering on 10.20.10 at 8:57 am

“Half do not have the 20 per cent of positive home equity necessary to qualify for a new mortgage … Millions of Americans simply are unable to move home or refinance.”

What’s the number in Canada? Is it 10% equity to renew?
I wonder how the situation here will play out in 2013-2015? Will the banks renew people who owe more than what the place is worth?

#75 Old_is_Gold on 10.20.10 at 8:59 am

<Taxes will rise – disposable income will decrease.

When 60% are barely surviving, living paycheck to paycheck, and forced to buy their morning coffees with their Mastercards; the feds are plotting another round of cuts that will severely impact the bottom line of the provinces, and therefore of the general populace, those on the lowest rungs of society in particular. The Day of Reckoning approaches despite Phil Gopher’s rhetoric!

Recent Globe and Mail Front Page Story
Ottawa signals slowdown in provincial payouts

#76 Old_is_Gold on 10.20.10 at 9:06 am

The tone at G&M seems to be changing, possibly conditioning the masses for a winter of discontent, much like C’s speech in Windsor warning of the same problem on the consumer side.

Death by debt: Governments need a cure – fast

Quotes from above article:
Ticking off another $1-million (U.S.) every 10 seconds, or $8.6-billion every 24 hours, The Economist magazine’s online global debt clock relentlessly documents that the rise in worldwide government debt is topping $40-trillion, a milestone that will take global “public debt” to two dollars for every three dollars of global GDP. Strictly by coincidence, the clock approaches this milestone as the United States approaches the second anniversary of Barack Obama’s election as president. Since Mr. Obama’s election, however coincidentally, global public debt has risen by 25 per cent: $8-trillion.

Could this increase in debt matter? Yes, it could. “When debt rises faster than economic output,” The Economist observes, “higher government debt implies more state interference in the economy and higher taxes in the future.”

Governments’ “public debt” is ultimately personal debt. Add all Canadian debt together – government debt and private debt, mortgage debt and consumer debt and business debt – and Canadian debt equals 250 per cent of GDP, or $3.3-trillion (Canadian): a debt of $100,000 for every man, woman and child in the country.

Some debt, of course, is legitimate. One person’s sound dollar of debt is another person’s solid financial asset. But it’s folly to go deeply into debt when your income is shrinking and your expenses are going up. Most people know this. Many governments, alas, don’t. The Economist is right to warn that massive public debt constitutes “a gathering, global storm.”

#77 Mohammad on 10.20.10 at 9:09 am

“Of course, any Canadian city with a Muslim as mayor and nuts on its Silverados is inherently interesting. I just wouldn’t buy a house there. ”

I have been reading your blog for some time and promoting it to others. I found the comment above very offensive. What about a progressive muslim mayor would deter you from buying a house in the City? Please clarify.

Holy crap, are you serious? — Garth

#78 Devil's Advocate on 10.20.10 at 9:13 am

At what point will Garths predictions come to fruition? When will our real estate markets hit bottom? More to the point when will the Blog DAWGS admit they have hit bottom?

There is no doubt in my mind that the “average” price of real estate in most Canadian markets is falling. Yet to achieve that “average” some must fall more than other and yet others may, in fact, rise despite that “falling average”. As I have said before on this blog “it is intellectually dishonest to speak of averages in terms of real estate. Nothing about real estate is “average” as each property is unique unto itself.

I personally see nothing over the long term future of this world which will circumvent the continuation of real estates continued rise in step with the historical trendline. Sure there might be a “black swan” along the way that might cause departure one way or the other. This most recent period of economic exuberance might be considered just such a “swan” although some might think it a “white swan” rather than “black”.

The demographic phenomena of the baby boomers is as equally responsible for the inordinate ramp up in real estate prices as it will be for the correction of them as boomers flee the McMansions they no longer need in retirement and seek refuge in a then rising financial markets providing them passive income when they can or choose to no longer work. Those financial markets gains will be no less attributable to that “herd” mentality than the housing markets robust recent rise was before and so to will those financial markets fall in step which that demographics bulge’s passing just as will the real estate markets are poised to now, for a time.

It really all comes down to demographics. As the demographic bulge in the pipeline of economics is fed through one segment of the economy to the next, real estate to financials, so to will the next bulge in the economic pipeline. That pipeline simply gets bigger and bigger as we pack more and more living souls onto the face of this planet and I don’t see any quick reduction in that economic fuel being added to the fire. Or do I?

Economic fuel? Oil. Surely we will see triple digit oil very soon in our futures. As my first year economics prof. told me way back in 1977/78. “We will NEVER run out of oil. That last barrel will just be so damned expensive no one will be able to afford it”. Turn around and take a look. While you debate such trivial matters as real estate, the mother of all black swans looms upon the near horizon in plain sight it’s shadow already at our feet. A shadow that when catches up with us will cast us into a long period of economic darkness.

Think about it…

#79 dark sad person on 10.20.10 at 9:23 am

#25 Cameroni on 10.19.10 at 11:17 pm

Re Post #7 written by dark sad person
————————————————
Keep it up DSP. The computers never forget.

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

Hey Cameroni-

So-how’s the view of Bloor street today-as you peek out the basement window of your Mom’s home?
Scary out there huh?

I know you hate music-so here’s a tune for ya-

http://www.youtube.com/watch?v=EBLI9jq6tUY

#80 Devil's Advocate on 10.20.10 at 9:26 am

I’m ahead of ya on this one… RE: my last post

Ya I know, spelling and gramatical errors… I don’t have time to deal with it. Take it for what it is. Really, I’d gladly debate the issue with you, but please don’t be so petty you must resort to gramatical critique.

#81 Dodged-A-Bullit-in Alberta on 10.20.10 at 9:27 am

Greetings: Well, that didn’t take long!! From now on, whenever someone disagrees with Calgarys’ new mayor, the “racist” card will be dropped on the table. What a pathetic society we have!!!! Watch your back Mr Turner. The voters of Calgary have opened the door for anyone and everyone to throw stones their way. Open debate and free speech will take a beating in Cowtown for sure.

#82 Old_is_Gold on 10.20.10 at 9:38 am

Excellent must read article for those who are wondering if this boom will ever bust? It is not a question of IF but WHEN, and that WHEN is much closer than most suspect. It is highly unlikely that HFC will be able to pull anymore rabbits out of their hats to make this gig last much longer.

Revisiting Fundamentals

In regards to the rent vs. own question, I rent a 3000 SF house in Unionville, an upscale burb North of Toronto, about 40 minutes from downtown. The house would sell for around 750K, the rent I pay is $2200 PM. I know for a fact that this amount does not begin to cover all the costs for the landlord. So who cares what the Rent – Own ratio is, all I know is that I am on the right side of that ratio. The savings since I sold my house in 08′ has allowed me to take 3 long vacations, buy two motorcycles and spend much less time trying to earn more so as to keep the bank profits rising perpetually.

Will I ever buy again, almost certainly but when prices go back to 1998 levels, which may require some patient waiting but I have the patience of Job, and since I understand fundamentals, I know that this is the only possible outcome. Like water always finding the lowest levels to settle at, so too will house prices – eventually. And if it doesn’t happen in the next 10 years, who cares? I have a better lifestyle than I’ve ever had, and loving every minute of it. Besides I can pack up my house in one week flat and move wherever I want to, no albatross around my neck holding me captive, no brick and mortar ball and chain for me!

#83 Sphinx on 10.20.10 at 9:39 am

>>Of course, any Canadian city with a Muslim as mayor and nuts on its Silverados is inherently interesting. I just wouldn’t buy a house there.<<

Garth,

I am a muslim and I find your comment offensive. Why being a muslim is 'interesting' ? I am really shocked to see such a comment coming from.

Regards,

Disgusted

Everyone else found it interesting. Lighten up. — Garth

Not true, not everyone…. why exactly would you not buy a house there?, because of the nuts on Silverados which is not new?, or the Muslim mayor part?. When you post an offensive comment, at least take it out if you do not apologize.

Disgusted too.

#84 Keith in Calgary on 10.20.10 at 9:44 am

I have two words for Ted Zaharko……….”Weight Watchers”………

RE sales and prices in Calgary are now back to the fall 2008 crash levels when everyone though the world was ending……..and they are continuing on downward…….

SFH OCT 2008 AVG $449K
SFH OCT 2010 AVG $442K +/-

SFH SALES OCT 2008 820
SFH SALES OCT 2010 850 +/-

CONDO OCT 2008 AVG $289K
CONDO OCT 2010 AVG $279K +/-

CONDO SALES OCT 2008 399
CONDO SALES OCT 2010 300 +/-

#85 Voice Of Reason on 10.20.10 at 9:45 am

Maybe its just me, but I must have missed the last series of articles describing people of faiths other than Islam of being described as “interesting” when they make significant achievements. Certaintly, there is a point to be had when Garth says that everyone (not just him) has found it interesting. I just dont know why it’s so interesting to everyone in the first place…. would anyone part of the “lighten up” crowd please elaborate?

#86 Junius on 10.20.10 at 9:52 am

#34 patz,

This smokescreen from the local developers that the OV isn’t selling because of social housing in the project. Vancouver has a long history of integrating social housing into communities going back to False Creek in the 1970s. The strategy has always been to avoid ghettoization and “other side of the tracks” planning.

Coal Harbour and Yaletown each have 20% social housing integrated into the neighbourhoods. No one has ever demonstrated that the presence of these developments impacted prices. On the contrary, everyone agreed that they had no impact.

Most developers have always hated this civic policy. Their current arguments serve the dual function of arguing against a policy they hate and hiding the real cause of the OV’s lack of sales – which is a declining market.

#87 JB on 10.20.10 at 9:53 am

“a city of 1.2 million people”

Calgary has around 1 million people.

#88 the commenter formerly known as... on 10.20.10 at 9:57 am

Calgary electing a Muslim mayor is interesting. The city I’ve always stereotyped as “the redneck” capital of Canada along side (Edmonchuck) has now dispelled my redneck stereotype. There is hope for Calgary.

ps…religion is evil, very evil…the unicorn told me so..

#89 Junius on 10.20.10 at 9:58 am

#12 Susi,

Your post is suspiciously like many of the fraud bull post on this blog so excuse me. They are always “I sold but now regret it”.

Patience. If you have properly invested your equity then it will earn more in a balance portfolio then in housing in Vancouver anyway over the next few years. The market decline is already underway. However the real deals are still down the road when interest rates rise.

#90 Grathiswrongasusual on 10.20.10 at 10:00 am

f course, any Canadian city with a Muslim as mayor and nuts on its Silverados is inherently interesting.

Now that Grath knows no one listens to him, he is tring to digress. Always say real estate coming down.. whats the point of it coming down 50% after appreciating 300% since he had started this blog. Hate you grath for your comment today.

#91 wetcoaster on 10.20.10 at 10:09 am

Mr. Soper is sounding like Mr. Roper on Three’s Company, a bumbling idiot with his foot planted firmly in his mouth.

#92 Fred Ziffel on 10.20.10 at 10:18 am

Things are different here in the Windsor area, wouldn’t you agree?

#93 Jan Etter on 10.20.10 at 10:21 am

#73 Foggy on 10.20.10 at 8:57 am
“Garth was stating a simple fact. Where is the offense? What else do you find offensive – fluffy clouds and kittens? Myself and others are a little tired about worrying about whether we are offending some individual or their culture. You need to adapt to Canadian culture – we don’t need to tip toe around you.”

Garth was indeed just stating a fact, but you lost me toward the end – what does adapting to Canadian culture have to do with political correctness? Two separate issues, regardless of one’s position on either.

#77 Mohammad on 10.20.10 at 9:09 am
“I have been reading your blog for some time and promoting it to others. I found the comment above very offensive. What about a progressive muslim mayor would deter you from buying a house in the City? Please clarify.”

You’re not reading carefully. Garth is saying Calgary is interesting for two reasons. Not good, bad, or indifferent – interesting. DESPITE it being interesting, he wouldn’t buy a house there. What should be obvious to a reader of this blog “for some time” is the reason that Garth does not want to buy a house there is that he believes real estate is overpriced.

Now can we get back to the topic of “The Troubled Future of Real Estate” please?

#94 Tonguestump on 10.20.10 at 10:26 am

Being a Muslim does however take all the fun out of being a trans-sexual cross dresser. Oh “F-word” Now I’ve offended tranny’s. Oh – did it again

#95 Ann "Pom Pom" Rohmer on 10.20.10 at 10:31 am

In 1994, legendary VALUE investor John Templeton wrote “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.” Its pretty obvious to any critical thinker where in this cycle CDN re is now…..

BTW real estate ain’t stocks, you can’t hit a button & capture your gain, take your loss and rid yourself of your home in <500 milliseconds for $4.95 in commissions/fees….agree with the Honorable Mr.Turner that we are in for a long, slow grind lower and not a "Flash Crash" like swoon.

#96 Coraline on 10.20.10 at 10:33 am

Garth obviously that it is indeed “interesting” that a city that everyone thought was very right-wing and perhaps intolerant elected the country’s first Muslim mayor, one advocating multiculturalism, environmentalism, and other “interesting” things. Interesting as in “wow, that’s pretty cool.” The fact that he doesn’t want to buy a house there is simply because house prices are obviously going down.
Anyone reading here regularly should be able to figure this out.

#97 Sail1 on 10.20.10 at 10:34 am

We’re different

http://www.torontorealestateboard.com/consumer_info/market_news/news2010/pdf/nr_mid_month_1010.pdf

#98 Coraline on 10.20.10 at 10:34 am

Yikes, that should read “Garth obviously meant that”

#99 Mussani on 10.20.10 at 10:35 am

Hey You all muslims, lighten-up. I too am a muslim. If you are a regular reader of this blog, then why in the world are you insulted. Garth writes this way. That is his style. Focus on real estate and financial matters, that’s what this blog is about.

great blog Garth.

#100 jjpetes on 10.20.10 at 10:41 am

Garth,

From yesterdays idiots who could not find the rent to mortgage ratio via the link provided, and now onto the new paradigm, a new elevation of idiots who are so terribly offended by the mere mention of the word “Muslim”.

This is the kind of place we have become, where just mentioning the oh wait dare I say it too? Muslim! Wow I said it, now watch the hate diatribe that follows me just mentioning that, oh that forbidden word! And should I dare mention guys with truck nuts so as to not offend what they believe in?

I mean, how can I somehow mention an observation and be absolutely certain so as to not slander dudes in Silverado’s with truck nuts just by merely mentioning it? Could it be these guys believe their truck is a male, and therefore must have nuts dammit.

Hey, am I allowed to ignore observations or reality today and say that because I do not believe in any religion that someone calling me an atheist would be so slanderous? I hardly doubt anyone would come to my defense if they said “jj petes, can you believe he’s an atheist?”

Therefore Garth, I clearly understand the difference between oxymoron and moron, the latter, being the many posters that either cannot do a basic level of web search, or are religiously offended by unicorns, what a oxymor…. eh nevermind, these posters have clearly not been web friendly and religiously objective on this blog lately.

jj

#101 brainsail on 10.20.10 at 10:42 am

Some of you need to start using a dictionary.

in·ter·est·ing   /ˈɪntərəstɪŋ, -trəstɪŋ, -təˌrɛstɪŋ/

[in-ter-uh-sting, -truh-sting, -tuh-res-ting]

–adjective
1. engaging or exciting and holding the attention or curiosity: an interesting book.
2. arousing a feeling of interest: an interesting face.
—Idiom
3. in an interesting condition, (of a woman) pregnant.

Origin:
1705–15; interest + -ing2

—Related forms
in·ter·est·ing·ly, adverb
in·ter·est·ing·ness, noun
un·in·ter·est·ing, adjective
un·in·ter·est·ing·ly, adverb

—Synonyms
1. absorbing, entertaining. Interesting, pleasing, gratifying mean satisfying to the mind. Something that is interesting occupies the mind with no connotation of pleasure or displeasure: an interesting account of a battle. Something that is pleasing engages the mind favorably: a pleasing account of the wedding. Something that is gratifying fulfills expectations, requirements, etc.: a gratifying account of his whereabouts; a book gratifying in its detail.

http://dictionary.reference.com/browse/interesting

#102 Globe Trotter on 10.20.10 at 10:42 am

#14 Tim “People with real estate continue to have the benefit of ridiculously low rates, provided they can keep their job- 92% of workers are still employed”

And how many unemployed does it take to kill an economy that is 60-70% based on consumer purchases? Not much more % than 10%.

#103 The Original Dave on 10.20.10 at 10:46 am

In the world in which we live, the way to get ahead in business is to lie, cheat, steal, even kill without compunction. To bribe or blackmail politicians to do your bidding and the public be damned!
——————————————

Old Is Gold,

I liked your post until I read the above. You lost total credibility. You sound like someone who’s is bitter and hasn’t tasted any real success in life. I disagree that you have to “lie and cheat” as you say. You’ve made it a moral issue for you and don’t see any other way to be successful. In your eyes, you’ve failed in every venture because you think to be successful, you have to be corrupt.

It’s usually the people that couldn’t make things happen in life that cling onto those beliefs.

#104 WINNIPEGER on 10.20.10 at 10:46 am

Per Royal Le Page report—- Manitoba Immigration=awesome housing market…..

2009 Immigration report is the link below—-who else can see the obvious falts in this assumption?

http://www2.immigratemanitoba.com/browse/news.html?item=3774

#105 Trino Tuta on 10.20.10 at 10:55 am

The comment about the muslim mayor is not offensive. It is the first muslim mayor of a big canadian city. That is interesting indeed. I’m so tired of this abused political correctness crap. Grow some balls and take it with a laugh. There are so many different cultures and religions in Canada… just have a little bit of an open mind. The whole “offensive” thing is so subjective and the fact that we are falling for it is a shame. The world preches freedom and democracy and in the meantime we’re being censored and forced to adapt our language and our ideas so that we don’t “offend” certain individuals. Grow balls, laugh and live. Canada is one of the most multicultural, tolerant countries that you’ll find.

And by the way… don’t you really feel OFFENDED when you read the bullshit articles on the paper telling you to buy buy buy because prices go up up up in the “balanced”, “positive”, “confident” RE market? Now that’s offensive for shit sakes.

#106 The Original Dave on 10.20.10 at 11:06 am

I have been reading your blog for some time and promoting it to others. I found the comment above very offensive. What about a progressive muslim mayor would deter you from buying a house in the City? Please clarify.
====================================

Oh my goodness. Are you serious? This is nuts. Calgary is perceived to be a town with cowboys and pure bred Canadians..that’s the stigma. They’ve elected a Mayor who is Muslim. That is interesting and unusual. There’s nothing negative about it. Calgarians are embracing and accepting change from the norm…that’s a good thing. What the eff is wrong with some of you?

I think people should come up with some more unusuals on here. Steve Nash is a short white guy from Canada (like me) who has won the MVP in the NBA a few times. I’ve heard black Americans say it is unusual. You know why? because it is. Nash is about 6 feet tall, he’s white, and he’s Canadian. Not many Canadians play in the NBA. There are only a few white guys that dominate and Nash is short compared to some of the guys that are close to 7 feet tall.

Should I be offended? No way. It is interesting and unusual that he wins the MVP.

#107 Consider This on 10.20.10 at 11:10 am

Like I’ve been saying, China KNOWS it currency is valued too low, and they know they’re economy is NOT sustainable…

http://finance.yahoo.com/banking-budgeting/article/111068/what-china-rate-hike-means

#108 The Original Dave on 10.20.10 at 11:15 am

Hey You all muslims, lighten-up. I too am a muslim. If you are a regular reader of this blog, then why in the world are you insulted. Garth writes this way. That is his style. Focus on real estate and financial matters, that’s what this blog is about.

great blog Garth.
——————————————————–

well said. I have respect for everyone’s cultures and beliefs and I would think that most people that visit this site have enough smarts to think for themselves and accept other people’s cultures.

everyone, if we’re going to complain about Garth’s comments and pictures, well, once he had a picture of a fat guy holding hands with an athletic woman. I’ve put on about 15 pounds lately and the wife has stayed slender. Should I be offended?

Absolutely. — Garth

#109 EdmontonJim on 10.20.10 at 11:16 am

People are pretty sensitive here. ‘Interesting’ is an inherantly neutral phrase. Of course it’s interesting that Calgray has a Muslim Mayor becuase it’s new. What’s more interesting is that the new Mayor looks way smarter than a city full of brass truck-balls should deserve.

Most people here in Edmonton don’t even know their Mayor is Jewish. Or that the runner up in this last election is Mormon. I only think that’s interesting because I’m a Mormon who celebrates Rosh Hashanna and Passover with his jewish friends.

#110 TheBestPlaceOnEarth on 10.20.10 at 11:25 am

Looks like cracks are beginning to form
<<>>
***And maybe they will***
You bet the will. I agree wholeheartedly with Garth on nost his ideas but as other posters noted this is not Dublin, this is not Toronto, this is not New York or Hong Kong. This is the Best Place on Earth dammit and nobody and no thing is going to bring it back down EVER. Get over it. Bring on 20% mortgage rates, going higher, Bring on 50% unemployment, it’s going higher, bring on disease pestilence and famine it’s still going higher. You know why because this is the Best Place on Earth and Canadians will never control the market here. Vancouver is in the control of a higher order.
This is Vancouver Goin UP here changing my handle to TheBestPlaceonEarth to hammer home the significance of this astonishing feat for a City. By the way anyone take my advice and Buy Rare Earth Stocks? Vancouve blows all that stuff away

#111 Prof ANON on 10.20.10 at 11:26 am

I find the fact that Nenshi was elected EXTREMELY interesting. I visit a wide variety of casinos throughout Alberta to play poker, and I have heard an insane amount of bigoted drivel coming out of rich and pretend rich ranchers and oilmen in Calgary. It’s amazing what they will tell you when they assume that you are one of them. I haven’t stoped laughing since he got elected.

#112 confused and a little crazed on 10.20.10 at 11:27 am

39 # Sam

oh please …are we so poliltically correct…that we misinterpret everything.

i look ar garth comments as “We are a continually growing and diverse society_interesting”.

You are the one who needs to rethink your own racial intentions

#113 Contrarian on 10.20.10 at 11:28 am

RE: “Muslim”

Some people on the internet have the reading comprehension of a turd (no offense intended to turds). “Interesting” does not imply a negative connotation. In fact, in this particular case, it seems to imply that a Muslim mayor makes the city interesting in a positive way, as in “progressive and open minded”.

#114 Tim Todler on 10.20.10 at 11:28 am

500,000 public service jobs cut

http://ca.news.finance.yahoo.com/s/20102010/24/f-afp-britain-unveils-harsh-spending-cuts-tackle-deficit.html

#115 The Original Dave on 10.20.10 at 11:32 am

Not true, not everyone…. why exactly would you not buy a house there?, because of the nuts on Silverados which is not new?, or the Muslim mayor part?. When you post an offensive comment, at least take it out if you do not apologize.

Disgusted too.
—————————————

you’re an idiot. They have a Muslim mayor and the hicks there have nuts on their Silverados. The cultures are polar opposites. You know, like possibly a political change for the masses of Calgary. Political change is a sign of society’s dissatisfaction of the norm. Look at what’s happening with Rob Ford in Toronto – it’s a change of the norm.

Calgary and every other f*cking city in the country are over priced. That has nothing to do with Muslims, mayors, Catholics, or balls

#116 Devore on 10.20.10 at 11:42 am

#57 mark

http://www.independent.ie/opinion/analysis/the-smart-ballsy-guys-are-buying-up-property-right-now-1047118.html

Imagine if you walked into the bank and said, “Listen, guys. I want to gamble a million on the stock market. I have 100 grand myself, will you guys lend me 900 grand at really low rates and I’ll pay you back over 40 years? In fact I won’t even pay off the principal, I’ll just pay off the interest.” They’d laugh you out of it. But substitute gambling on the property market for gambling on the stock market and they’ll fall over themselves to give it to you.

I have this odd feeling there this big white elephant in the room, can someone help me see it?

#117 s on 10.20.10 at 11:44 am

Aren’t muni governments at fault as well, as they want property values to continue to go up, that way tax revenues will continue as well? As assesment values go up, then the property owners have to pay more and more in tax on that value. Also the gov need just up the tax % if the property values decline and they make up any short fall. Really a win win situtation for them.

#118 rory on 10.20.10 at 11:46 am

#39 Sam

Please read, really read, what GT said …he finds Calgary ‘interesting’? Not you.

Besides, Calgary was always known as a white, red-necked, conservative kinda town. Now they have a guy that is brown and Muslim. I think that says good things about Canucks.

So Sam …get with the program … separation of state and religion is what is required in politics and that is what happened in Calgary. Of course, IMO.

Good on ya’ Mayor Naheed Nenshi….Congrats.

#119 Devore on 10.20.10 at 11:50 am

#62 reality, doesof

Better have a really long-term horizon if ever planning to buy (now or after prices drop).

http://www.planbeconomics.com/2010/10/20/housing-rent-vs-buy/

Still misses the point. Where is the initial steep bump from the downpayment? If there is no significant downpayment, there is no equity, and lots of risk. Where is he factoring in risk premium, and foregone income on the downpayment money? Where are the rising interest rates? And long term indeed. Where is the commission and taxes when he sells the house? Guess he plans to live in it for 40 years.

Certainly there is a time to buy a house. But not when you can rent it for half the price.

#120 Thetruth on 10.20.10 at 11:54 am

Selective censorship eh Garth?

I guess users of this blog use it at their own peril.

This blog reminds me of Waco Texas dude and his followers.

I have warned you before. — Garth

#121 CTO on 10.20.10 at 12:03 pm

Sir

Sometime Garth says things we don’t like to hear. I’m not so sure he meant Calgary having a muslam mayor is a bad thing, if he did then he is wronge there.

As for his opinions about real estate…the facts / fundamentals are absolutly with his advice. A major shock is in store for many of you who think an asset class like real estate will forever rise.
denial, denial, denial…SHOCK!!!!!

#122 dark sad person on 10.20.10 at 12:11 pm

#38 JM in London on 10.20.10 at 12:30 am

#8 JC

I agree it’s interesting. I’ll draw attention to a particular personality firing a shot across your bow at the number 12 position. Oil man gone armchair economist/doomer with an ego and Napolean complex to boot.

It’s an interesting place this…

Oh and DSP? apparently there are some geko’s in a box somewhere you have?

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

JM–

I notice you’ve relegated yourself to the backburner and are left to only engage in your typical cowardly little snipes and don’t have the heart to engage in economic discussion-after i smeared your nose in your own shit-in front of the whole board-
Embarrassing huh?

btw-when G’s geek gets the past comment section fixed-there’s going to be much more coming your way-
It will be a defining moment of your true character-
I promise you JM–

#123 eaglebay on 10.20.10 at 12:11 pm

#58 Ben
I moved to Alberta 20 years ago from Toronto.
The wife is from Alberta.
Had been living in TO for 25 years.
Now you know why.

#124 Live within your means on 10.20.10 at 12:13 pm

.#83 Sphinx on 10.20.10 at 9:39 am

I may get pounded for this, but do you and other Muslims commenting read Garth’s comments on a regular basis? IMHO, Garth would not want to buy in Calgary, let alone Alberta, because home prices are out to lunch. Plus, do you read the MSM from across Canada and comments by posters on the sites. Many of the posters from (right wing) Alberta are the first ones to denounce Muslims as radicals, immigration and multiculteralism a failure. Personally, that’s not my opinion. There are wachos in all relgions, but the majority are not.

#125 Boomer62 on 10.20.10 at 12:23 pm

#90 Grathiswrongasusual

Give the laptop back to mommy or at least take off your mittens when typing.

and,

Why don’t the rest of you morons all sit in a circle and try to discuss Mr. Nenshi’s skills and experience. You have one hour before the school bell rings.

Honestly, Garth….If you are supposed to learn from your mistakes, why do some people have more than one child?

#126 eaglebay on 10.20.10 at 12:28 pm

#71 Voice of “Reason”
Political correctness is a sick puppy.
Why is it that the word “Muslim” cannot be said in a public forum?
Ever heard of facts, freedom, liberty…
The mayor better do a good job otherwise you’ll hear a lot worse about him.

#127 bill on 10.20.10 at 12:30 pm

prof anon
hey me too. the new mayor is a really different kind of politician than one would normally find , in that he is obviously a smart guy.

#128 Ottawa S. on 10.20.10 at 12:35 pm

I’m offended by people that always assume the worst (mis)interpretation/intention of what caucasians say/write and then get easily offended. How offensive of you to assume we’re racist.

I think enough others have clarified the intent of Garth’s Muslim mayor comment to those with racism-blinders, so no need to repeat it.

On another note, I’m meeting with a mortgage specialist from my bank today. Wonder how easy/difficult it is now to get pre-approved for a mortgage compared to four years ago when I last did it. I’ll let you know…

#129 Evangeline on 10.20.10 at 12:36 pm

#118
((I think that says good things about Canucks.))

I think it says a lot of good things about rednecks. Bobby Jindal is about as redneck as they come.

#130 Evangeline on 10.20.10 at 12:41 pm

#113
((Muslim mayor makes the city interesting in a positive way, as in “progressive and open minded”.))

progressive and open minded enough to consider that rednecks are not the shallow, bigoted, trigger-happy, illiterate stereotypes that pop culture makes them out to be?

#131 C on 10.20.10 at 12:43 pm

Saw on BNN at lunch:

“Canadian household debt excessive” TD.

When one of the big five banks in Canada issues this statement it must be serious.

The logical question to put back on TD would be so how is that going to influence Canadian real estate going forward?

Canadians will look back in 2-3 years and ask how did we not see the real estate bubble?

#132 fancy_pants on 10.20.10 at 12:44 pm

Garth…
Of course, any Canadian city with a Muslim as mayor and nuts on its Silverados is inherently interesting.

IMO this is being misinterpreted. The implication is simply the bewildering contrast, not a religious shot.

What is being implied is Muslims and folks with nuts on their trucks under most interpretations mix together like oil and water. Traditionally more of a contrast of religious eastern vs. wild western.

What makes it “inherently interesting” is how did these two come together? If anything at all, it is a compliment to Calgarians for embracing such a starkly different culture so far as electing such as your mayor.

I wouldn’t say this is a bash against Muslims but I would have avoided the M word altogether, way to risky. To the ultra sensitive/extreme: take your jihad elsewhere.

#133 joseph on 10.20.10 at 12:46 pm

#83 Sphinx and #77 Mohammad…

Are you guys seriously that dumb?? Garth, your readers have astonishingly bad comprehension skills.

Garth would not buy a house in Calgary because he thinks their overvalued, are you guys new to this blog???

Where could you possibly get from his statements that he was suggesting a muslim mayor was the reasoning you shouldn’t buy a house in Calgary? He says the city is interesting because he’s from Toronto and people from Toronto think we’re rednecks out here but not we have a muslim mayor, which does not compute in their minds. Nevertheless he still wouldn’t buy a house here becuase he sees them as overvalued.

Wow, you guys are embarrasing yourselves. If you’re that dumb you really shouldn’t open your mouths or in this case click the “submit” button.

#134 bill on 10.20.10 at 12:50 pm

the truth……
this blog reminds you of branch davidians?
no wonder you get censored .
what weird ,twisted anxieties congeal to produce the likes of you?
think about it. you are getting censored and warned by garth when he lets others others say the most ridiculous ,unfounded statements about him or fellow bloggers.
and you failed the smell test?
eor

#135 René Kabis on 10.20.10 at 12:50 pm

“Prices may not regain their previous peak for a decade.”

I consider this irrationally optimistic. If we examine previous housing bubbles, we can see that the length of a downturn is a factor of how large the bubble was and how far prices fell after the bubble burst. Even if prices were to suddenly stabilize this very day in the States, the previous peak will not be regained for at least two to three decades (if not more). Since prices appear to be heading toward another major slide, many parts of the States MAY NEVER SEE THOSE PEAK PRICES (after inflation) EVER AGAIN.

And when places like Kelowna have a price-to-income ratio of 7× or more (the “normal” is less than 3×), it too has a very significant chance of seeing a 70+% drop in home values. In fact, I would hazard a guess that such a drop in home values are not only reasonable and rational, but downright inevitable.

#136 TS on 10.20.10 at 12:56 pm

Some interesting comments from the Bank of Canada this week (see below)…OMG…when the BofC finally realizes that there is a problem….there REALLY is a problem…

The bank also sees dangerous distortions building in the Canadian economy, particularly as a result of a strong housing market that has contributed to the highest domestic debt burdens in history. The latest data show the ratio of debt to disposable income among households has reached 147 per cent.

Home prices have been stable or higher in most markets but sales activity has come off its peak and a sudden deterioration in the price of homes could deliver a blow to household wealth and confidence.

“If there were a sudden weakening in the Canadian housing sector, it could have sizable spillover effects on other areas of the economy, such as consumption, given the high debt loads of some Canadian households,” the bank stated.

#137 joseph on 10.20.10 at 12:59 pm

“a new elevation of idiots who are so terribly offended by the mere mention of the word “Muslim”.”

Actually jjpetes might be right here.

Garth you made a big mistake. On the same post you wrote “muslim mayor” and “I wouldn’t buy a house there”.

These muslims apparently interpret that as: Garth says don’t buy a house in Calgary because it has a muslim mayor”.

Just wait til the Imam’s in the middle east get a hold of it. It will turn into “Canadian government MP says real estate is doomed in Canada because of muslim mayor elected.” Next a jihad will be declared, you may get death threats…

Their sensitve people, remember the cartoons. You’re not allowed to make fun of a muslim.

Can we make fun of you, though? That should be easy. — Garth

#138 TS on 10.20.10 at 12:59 pm

Canada will finally be an open and pluralistic country when the ethnic and religious background of ANYONE ceases to be an issue worth reporting in the media.

#139 blobby on 10.20.10 at 1:01 pm

#83 – sphinx : quote : “why exactly would you not buy a house there?, because of the nuts on Silverados which is not new?, or the Muslim mayor part?”
————————

Are you unable to read? The more i come to this blog, the more i read peoples comments – the more I get concerned about the level of English comprehension in this country.

Garth said that the new mayor is interesting.. But that STILL doesnt mean he’d want to buy a house in Calgary.

He DID NOT say that he wouldnt buy a house there BECAUSE of the new mayor.

Sheesh.. I know schools are dumbing down nowadays.. But still..

#140 canadian girl on 10.20.10 at 1:07 pm

Dear Garth:
Dear Garth:
Please pay attention and tell people in Canada about the kangaroo court stage of the US housing bubble. It is ugly. Judges deny trials and give final judgement to foreclosure…….on thousand of cases…..

Please read the speech by Judge Roger Colton.

And please make people aware of where greed leads.

http://www.nakedcapitalism.com/2010/09/floridas-kangaroo-foreclosure-courts-judges-denying-due-process-on-behalf-of-banks.html

#141 The Original Dave on 10.20.10 at 1:07 pm

By the way anyone take my advice and Buy Rare Earth Stocks?
————————————————-

bought many of them a couple of years ago. RES, AVL, QRM. I bought QRM at .45 cents. It’s at $5.69 today! Taken profits along the way but I still have thousands of shares.

The rare earth market is a political market. Everyone is concerned with China cutting off supplies to the rest of the world and so governments will take action to secure their own supplies. The stock market can be in a major bull market, and China can loosen up standards on the rare earths, and prices will decline. The opposite also works – free fall in the stock market, but supply concerns arise for rare earths and the stock prices start going manic.

None the less, the space is very interesting. It’s not a bubble just yet.

#142 Ron Burgundy on 10.20.10 at 1:11 pm

Garth,

As the vultures sit and wait it out for a US/EUR style correction, I would like to recommend a topic for future discussion: As opposed to insinuating how “similar” we are to the US through sarcastic connotations, (a recurrent theme on here) How about a post on the fundamentals that have allowed Canada to withstand (delay) the inevitable collapse this blog so willingly supports. I am slowly losing interest (as are the muslims) with the repetitiveness of an impending collapse as is predicted here on a daily basis. At what point does it become self-serving bias? Any fundamental/technical/opinion based analysis to provide insights into why the Canadian market is lagging by so many years? Sometimes it is more important to learn WHY and HOW as opposed to WHEN.

SO: WHY has Canada not seen the same results as the US (seeing as Garth sarcastically claims: we’re not that different)
and HOW has Canada managed to maintain real estate values at twice the average price in the US (seeing as Garth doesnt believe RE-MAX/BOC/G&M/GLOBAL who claim immigrants/no sub prime/ regulatory oversight/ etc.)

Don’t tell me this all boils down to Marketing 101?

WHAT ACTUALLY HAD MADE CANADA DIFFERENT?

Thoughts?

#143 Devil's Advocate on 10.20.10 at 1:13 pm

He’s Muslim B.F.D.! Would a Catholic or Protestant do a better job? You dudes better seriously get your shit together and accept that nothing on this planet is reserved for your sorry white asses. Just ask any of the First Nations people we took this land from in the first place. At least Nenshi was democratically elected. Suck it up boy’s as you can bet your sorry white asses that he certainly ain’t gonna be the last. (BTW my ass is white too)

On another note…

Over one hundred years ago Andrew Carnegie had 43 millionaires working for him. Now understand and appreciate that at that time a millionaire was really something – rare and rich beyond the wildest imagination of most. A reporter then interviewed him and asked, “Mr. Carnegie how on earth did you hire 43 millionaires?”

Mr. Carnegie replied with a smile “Well, when I hired them none of them were millionaires.”

The reporter then restated his question. “Well then what did you do to develop them to the degree that they became so valuable to you that you could pay them enough money that they became millionaires?”

Andrew Carnegie taught us a most valuable lesson with his answer. He said “You develop people in exactly the same way that you mine gold. When you go into a gold mine you expect to move tones and tones of dirt to find just an ounce of gold. You don’t go in there looking for the dirt. You go in there looking for the gold.”

So much of life is like mining; you’ve got to move a lot of dirt to find those rare nuggets of gold. That’s what makes those gold nuggets worth so much.

Now call me a sentimental fool but I just do not see the same value in the so easy printed fiat currency of today and all that it stands for as that which backs it.

More relevant, wading through all this banter is becoming a tedious task as I seek those too rare a gold nugget posted amongst all the dirt.

#144 Mister Obvious on 10.20.10 at 1:15 pm

Wow. Now we are really off topic. I saw it coming a mile away. Garth said something that people are ‘touchy’ about… again. The word Muslim is guaranteed to inflame even when used in a neutral contexts as Garth has done. Here’s my two cents:

Muslims, Catholics, Protestants, Judaists and even Wiccan’s all share the same ‘philosophical property’. They believe, in the absence of empirical evidence, in ‘non-falsifiable’ concepts.

They collectively refuse to apply Occam’s Razor in their musings about the unknown “the principle that all other things being equal, the simplest explanation is to be preferred”.

Myself, I await patiently the day when a national, provincial or local government elects an avowed atheist. Now that would be “interesting”.

#145 nina on 10.20.10 at 1:22 pm

Let’s go back to Real Estate. The other day I drove by a cemetery in Toronto. They were advertising ” New lots, phase 2 – buy now while you can still choose” Now, there was no line-up for those lots but I guess real estate agents did not think about selling basement condos for the ever-after yet. But the cemetery management did. I’ll wait until the prices go down in few years.

#146 Chris L. on 10.20.10 at 1:27 pm

Comments about Muslims are prohibited? Garth said it was “interesting.” Do you folks deny that having a Muslim mayor is NOT interesting or just mentioning something about a race is just racist? Give your heads a shake. If you seriously think this is racist, you have a very simple mind.

NOT being able to talk about race, is racist.

Garth was just testing you, and you failed.

#147 AxeHead on 10.20.10 at 1:30 pm

#143 DA said ‘Just ask any of the First Nations people we took this land from in the first place.’

Well Mr. DA, first nations people moved here from somewhere else originally so we’re all just ‘visitors’ here. Who’s to say they are the rightful owners of all of North America? What makes this ‘their land’? Because they were here 1st? History doesn’t prove this out. It’s usually the one who improves, develops and settles, and can defend his ownership that wins.

If you really believed what you wrote, then you wouldn’t be selling ‘native land’ that isn’t owned by the sellers to anyone. Indeed, you have just identified yourself as a purveyor of stolen property, more or less a profiteer of stolen property, aka a theif…hmm good definition of a realtor as any.

#148 Old_is_Gold on 10.20.10 at 1:39 pm

#103 Original Dave

In the world in which we live, the way to get ahead in business is to lie, cheat, steal, even kill without compunction. To bribe or blackmail politicians to do your bidding and the public be damned!
——————————————

Old Is Gold,

I liked your post until I read the above. You lost total credibility. You sound like someone who’s is bitter and hasn’t tasted any real success in life. I disagree that you have to “lie and cheat” as you say. You’ve made it a moral issue for you and don’t see any other way to be successful. In your eyes, you’ve failed in every venture because you think to be successful, you have to be corrupt.

It’s usually the people that couldn’t make things happen in life that cling onto those beliefs.
______________________________________________
As far as worldly success is concerned, I do OK but then I do not aspire to be a Sam Walton or a Bill Gates or a Warren Buffet. If you really believe that people at the highest levels of business, government (and religion) get there by hard work and honest dealings, you are sadly mistaken. I am not bitter, just a realist.

Ignoring the facts does not change the facts

And that is what people do when they view the world through rose colored glasses. The 7+ million people in the States who went overnight from middle class to ‘food stamp’ statistics are not all victims of their own stupidity and greed, millions of them are victims of business practices like mortgage backed securities in which business people at every level from the lowly realtor to the mortgage broker to the bank executive to the Wall Street executive to the Fed governor to Congress to the Senate to the President participated in to defraud the average American. Which business model is this? So concluding that greatest success in business comes from lying, cheating, stealing and even killing is no exaggeration!

And in my own life I do not define success as having anything to do with money. Might help if you did some studying and researching before regurgitating the same old BS that you hear spouted in the MSM and the Education / Indoctrination factories aka schools and universities about how to get ahead in business!

#149 BrianT on 10.20.10 at 1:42 pm

Why not just start a separate blog-you could call it Muslims and Other Religions-the subject appears to be riveting judging by the number of posts devoted to it.

#150 Tom on 10.20.10 at 1:51 pm

To: Post 117 S
Aren’t muni governments at fault as well, as they want property values to continue to go up, that way tax revenues will continue as well? As assessment values go up, then the property owners have to pay more and more in tax on that value. Also the gov need just up the tax % if the property values decline and they make up any short fall. Really a win win situation for them.

Municipalities will adjust the mill rate to compensate for lower values. No big deal to them.

#151 Sail1 on 10.20.10 at 1:53 pm

#142 Ron Burgundy

Makes perfect sense.

#152 Crash Callaway on 10.20.10 at 2:02 pm

To all the “offended”
Please show us on the doll where the bad blog man touched you.

I’m so offended that you are all so offended.

#153 dark sad person on 10.20.10 at 2:07 pm

#140 canadian girl on 10.20.10 at 1:07 pm

Please pay attention and tell people in Canada about the kangaroo court stage of the US housing bubble. It is ugly. Judges deny trials and give final judgement to foreclosure…….on thousand of cases…

***********
Wow-you’re brave for bringing this up-on this board-
You’re gonna get the dommer label if you ain’t careful-
those basement dwellers here-well-they don’t like it when people “expose” their fragile minds to the raw reality of Government corruption-which your link reveals-but-
Good for you-for trying to bring it into the light-

The Banks “want” this to happen and so it is happening-
When you have no due process of Law in your Country-
You are living in a banana Republic-

#154 prairie gal on 10.20.10 at 2:13 pm

111 Prof ANON wrote:
I find the fact that Nenshi was elected EXTREMELY interesting. I visit a wide variety of casinos throughout Alberta to play poker, and I have heard an insane amount of bigoted drivel coming out of rich and pretend rich ranchers and oilmen in Calgary. It’s amazing what they will tell you when they assume that you are one of them. I haven’t stoped laughing since he got elected.
____
This is my take as well. The sh!t that comes out of the mouths of those surly old men makes my skin crawl whenever I have the misfortune of overhearing their conversations at a rural Alberta coffee shop. I have moved tables to be out of earshot, they are so offensive.

Calgary has a silent majority of young, open minded, worldly young professionals. Much different from the surrounding demographic.

#155 Barb the proofreader on 10.20.10 at 2:18 pm

Garth, we’re so excited here that our guy won, Naheed (pronounded “Na-hed”) Nenshi will paint Calgary purple (his campaign army’s colour).

*********

On another note, your readers might want a bit of background on the real estate name you mentioned, Zaharko. We found out first hand Zaharko misled a grieving son we know who had inherited a house. His misdeeds date way back too..

If you GOOGLE the next line:

Ted Zaharko price maintenance

.. what you’ll find is the government of Canada website reminder of what Ted Zaharko is..

I’ll paraphrase it here:

Conspiracies under Canada’s Competition Act

Horizontal Price-Maintenance (Section 61)

Real Estate Brokerage 1994 Conviction

Following two lengthy trials, two real estate companies, and two senior officials of one of those companies, were convicted for price maintenance activities directed at two discount realty firms in Calgary.

Royal LePage Real Estate Services Ltd. and its regional vice-president, Ted Zaharko, were convicted on two counts for discriminating against the two discount realtors because of their low pricing policies.

Royal LePage and Mr. Zaharko were also convicted of attempting, by promise, to influence upward the prices charged by one of the discount firms. Royal LePage was fined $200,000, Mr. Zaharko $25,000.

#156 jess on 10.20.10 at 2:26 pm

anybody read “Decline of the West”

http://tiny.cc/3ansh
“people under a spell of a Culture are its products and not its authors.”
http://www.archive.org/details/Decline-Of-The-West-Oswald-Spengler

#157 JM in London on 10.20.10 at 2:29 pm

#122 dsp

Wow! Such hostility! Does all that hostility stem from being locked in a camp with manly men for 6 months? Fits the nerd (wether it’s there or mom’s basement) profile to a tee.

You’re under some kind of false assumption you have relevance.

Back burner?

Um…If running ones own business, living life, getting moondance fever, takes away from blogging…what does that say about the activity in question?

Give it a rest- you have some interaction you crave here, I get it, you even harbour the delusion you are some sort of expert about it all…LMAO!!!!

REMINDER:

Experts get paid for what they do…who writes your paycheque again oilman?

#158 Sam on 10.20.10 at 2:34 pm

>>I just wouldn’t buy a house there. <<

This is what shows your mentality. If you were a still a politician, would you have ever claimed that do not a ticket or that you don't want any Muslim votes ? I don't think so. :)

#159 SpaceMonkey on 10.20.10 at 2:39 pm

@29 Susi,

You must pray to a pretty evil god if you hope that Vancouver will be “destroyed” like Ireland. Do people really pray, hoping misery on innocent (perhaps uniformed) people?

#160 JM in London on 10.20.10 at 2:52 pm

#144 Mister Obvious on 10.20.10 at 1:15 pm

Well said!!

Just as bad?

When Occam’s Razor becomes distorted with non-facts and then backed by non-falsifiable concepts a shield while pointing to those non-facts as evidence.

#161 JM in London on 10.20.10 at 2:55 pm

sorry should have read: “as a shield” since the grammar police are out in force today.

#162 Nancy on 10.20.10 at 3:00 pm

Don’t sweat the naysayers, Garth. You can’t be a contrarian without the contraries.

It’s been very entertaining over the past year watching as one by one your predictions about the housing market come true. Eerie (like, I’m beginning to suspect a faustian bargain in here somewhere), but entertaining.

What I’ve learned is that we can’t count on our leaders, our media, or our market experts to make decisions for us, because they make decisions for their own interests. They don’t really care if we go broke, as long as they keep making a buck (or staying in power).

I’ve also learned that without leadership, education (via media), and guidance, the majority becomes an idiot horde.

Thanks for keeping us informed.

#163 Derek on 10.20.10 at 3:06 pm

#142 Ron Burgundy
WHY has Canada not seen the same results as the US (seeing as Garth sarcastically claims: we’re not that different)
and HOW has Canada managed to maintain real estate values at twice the average price in the US (seeing as Garth doesnt believe RE-MAX/BOC/G&M/GLOBAL who claim immigrants/no sub prime/ regulatory oversight/ etc.)

Don’t tell me this all boils down to Marketing 101?

WHAT ACTUALLY HAD MADE CANADA DIFFERENT?

Canada isn’t the only country to be different. Australia is also different and in much the same way.

There are two basic reasons. Firstly Canada is running an international trade surplus. And secondly Her Majesty’s Canadian Government did a couple of things to delay a house price crash in 2008 when the prospect first arose.

Before I get into that though I need to explain what causes an HPC. That’s easy. The main cause is inability to afford a big mortgage. Why? because it forces people who have a big mortgage to sell and forces those without a big mortgage to take out a small one and thus to offer lower prices.

So what causes inability to afford a big mortgage? There are two possibilities the first is increased interest rates; the second is reduced income through unemployment or part-time working instead of full-time working.

People with big but affordable mortgages who remain in employment might well be better off to sell their houses and pay off those mortgages (as Garth keeps telling us) but as long as enough of them are paid well enough to cover the mortgage bills and interest rates do not rise too much and they do not want to sell, then they do not have to sell and there will be no crash. If any one of those conditions changes, watch out!

So getting back to your question, “What actually made Canada different”, the basic answer is “low unemployment”. After all we reduced our interest rates about as much as the Americans did so no difference there.

A small part of the difference lies in the fact that we receive a cash injection from the rest of the world in return for the work we do for them. That translates directly into jobs. A bigger part lies in how HMCG decided to treat the impending recession in 2008. They went for a stimulus, just like the US, but unlike the US they put it directly in the hands of the Working and Middle Classes by means of the Economic Action Plan, particularly its income tax cuts, its home renovation tax credits and its infrastructure measures. This was far more effective in staving off unemployment than the US TARP measures which mostly benefited the banks.

As a result it is only now, two years later, that reduced income as a result of unemployment is beginning to get to the point where people in most of Canada are being forced to sell (although it’s already happened for those who live in the southern Ontario districts that Garth visited a couple of weeks ago).

Her Majesty’s Australian Government reacted in much the same way as HMCG. In fact they went even further and gave every citizen a cheque. They also run an international trade surplus and as a result they too have so far managed to avoid massive unemployment and a house price crash. As to the question of whether either Canada or Australia can continue to avoid trouble, it’s diffcult to predict. Basically in order to do so they need to keep unemployment low and that’s getting more and more difficult. My guess is that they can’t do it much longer. Hence the mounting reluctance to buy housing in both countries. Chances are good that Garth’s predictions for springtime will come true unless HMCG pulls something pretty special from its bag of economic tricks.

#164 David B on 10.20.10 at 3:26 pm

RON

Don’t tell me this all boils down to Marketing 101?

WHAT ACTUALLY HAD MADE CANADA DIFFERENT?

Thoughts?

Everything boils down to marketing. Prices on everything are based on what the market will bear.

Trust you understand simple science, everything has a breaking point. So to say a house any house can continue to grow to 10 X the income of borrow money to 20 X that amout is not believable. So Ron when the rest of the world around Canada has reached it’s breaking point (Even Hong Kong, as there are reports ex pats are now finding living expenses are biting far too deep into their pockets )

Canada is 5 1/2 times zone wide with the majority of population living in a few central cities with others and provinces being subsitized by these large cities. There are daily reports of towns close to closing down, and provinces are running short on cash. As mentioned Ottawa and capital cities will soon be hitting taxpayers and homeowners with more service increases to cover expenses. Affordabilty of the home will become more than even two household incomes can bear, let alone the stress of raising children and operating two family cars.

Add to this Ron the Rise of China as a world power, just yesterday they raised interest rates a low .25% and tanked stock markets around the world, governments buy/sell money every minute and they really require stable markets as do investors especially those holding large pension funds.

Ron Canada has only 33 million people on the earth that now has 6.8 Billion people of which less than 6% can put their hand in their pocket and pull out enough spare change to buy a cup of coffee …. The middle class of the richest nation on earth followed by others in the G20 are all under attack. The Rich 1% of these own 95% of the wealth and they are getting richer!

Ron we are about to enter a time in the world’s history where there will more older people in the middle class than ever before and they will not be able to live for most part at a standard of life they once enjoyed. Every older retired person I talk to with the exception of few say: “The Golden years suck” Look around at the walkers the line up’s for drugs and new larger drug stores opening up daily!

Now Ron …. IS CANADA DIFFERENT? No Ron, a few homes and less every day in Toronto, Calgary and Vancouver are selling to very selected people. Other less populated cities such as Halifax sell for bundles of cash. (Halifac South End has been expensive since 1867 as has been Mount Royal Quebec).

Ron my grandfather lived in Burlington Ontario and owned acers of land on Brant Street and land on Lakeshore Blvd. It all got sold and the money left the country, long story, happened to many coast to coast then along came home developments and Greater Fools all fueled by governments wanting more tax revenue and the billion dollar word HST! and of course their sales people called Real Estate specialist …..all couched to Lending Insitutions (Banks) … over the years each found new improved ways to sell, sell, sell and then one day SELL BIG and then Bang! and Canada do to our natural resource based economy did not get blown off the map. Ahhh but greed by those mentioned above had not been removed so the tubes sucking out the furture of it’s children and grandchildren were left in place ….. soon Ron they will be removed.

As mentioned we now have the largest deficit in our history and owe more money than ever, AND Ron it appears our books may have been over cooked as daily news reports and resignations grow.

No Ron we are no differnent …. just a different spin from a well oiled spin machine.

Hey if I and others are wrong “Great” then we all will be very rich, healthy and our children will have jobs starting at $50,000 in the fast food industry to pay for it.

#165 Joe Larue on 10.20.10 at 3:50 pm

For those of you interested in investing in US real estate for the very long term…this article in Wired Magazine gives you the long-term outlook for some cities based on future climate..
http://www.wired.com/magazine/2010/09/pl_print_kahn/

For example:
PHOENIX Like the rest of the Sunbelt, Phoenix has seen its population skyrocket because sunbirds have been drawn in by its toasty winters. But as the climate warms and residents flee ever roastier summers, this bird will descend back into the ashes. Hey, at least it’s a dry heat.
DETROIT Here’s a sign of the apocalypse: By the year 2100, Detroit will be one of the country’s most desirable cities, along with Salt Lake City, Milwaukee, and Minneapolis. Inland and elevated, they are unlikely to suffer natural fires and will actually benefit from warmer winters.
NEW YORK Once Wall Street traders figure out that their workplace is only a few feet above sea level and increasingly threatened by hurricanes, they’ll relocate to suburban New Jersey or Westchester County. Sure, they might wreck the local economy, but they’ve done that before

#166 Moneta on 10.20.10 at 4:15 pm

So does the yellow top symbolize happiness, hope or deceit?

#167 betamax on 10.20.10 at 4:17 pm

I can only presume all these PC delicate flowers offended by the mention of Calgary’s new mayor never considered nor discussed the fact that Obama is the first African-American president, because acknowledging that reality would apparently somehow be offensive to African-Americans. Idiots.

#168 Bye Bye Kelowna on 10.20.10 at 4:17 pm

Don’t censor Garth (or the rest of the visible majority)

If you don’t like the blog go somewhere else.

Seriously.

#169 Devil's Advocate on 10.20.10 at 4:21 pm

”If you really believed what you wrote, then you wouldn’t be selling ‘native land’ that isn’t owned by the sellers to anyone. Indeed, you have just identified yourself as a purveyor of stolen property, more or less a profiteer of stolen property, aka a thief…hmm good definition of a realtor as any.” #147 AxeHead

Oh, oh, oh you have opened my eyes to the folly of my ways…. I must now end my career as it is of such despicable nature I could not live with myself were I to continue.

* * * sarcasm off * * *

But actually Axehead you would be surprised how much in agreement I really am with you on the matter of your second paragraph.

” Well Mr. DA, first nations people moved here from somewhere else originally so we’re all just ‘visitors’ here. Who’s to say they are the rightful owners of all of North America? What makes this ‘their land’? Because they were here 1st? History doesn’t prove this out. It’s usually the one who improves, develops and settles, and can defend his ownership that wins.” #147 AxeHead

Although I’d say the First Nations people aren’t done with us yet.

Just because you know me as a REALTOR® is no reason to assume the worst and be so argumentative. Barking DAWGS…

BTW… I do not sell First Nations lands which, other than the lease there-of, can not be sold to other than a First Nations person. I have no interest what-so-ever in helping clients buy and sell anything other than the “freehold” interest in land. I do not sell leased land, and I do not sell mobile homes.

#170 junius on 10.20.10 at 4:28 pm

#142 Ron Burgundy,

You asked, “WHAT ACTUALLY HAD MADE CANADA DIFFERENT?

Thoughts?

Historically Canadian real estate prices track about 18-36 months behind the US. There is a good Merrill Lynch study on this you can find if you Google. Canadian real estate began to fall in 2008 which is roughly 24 months after the US. Prices fell throughout 2008 as the market began to return to fundamentals.

The crash had started in 2006 in the US and by 2008 it began bringing down the US banks. The financial crisis ensued and the gov’ts dropped interest rates to the floor. In Canada the CMHC rules were relaxed to stimulate housing investment. This brought the market up in Canada and surged it forward from mid-2009 through the Spring of 2010 as it was juiced on more stimulus dollars and historically low interest rates.

Essentially the US crash and the resulting stimulus both there and here happened before Canadian sentiment to change. This resulted in a delay in the correction in Canada.

So Ron the answer, in a word, is Timing.

#171 Brian1 on 10.20.10 at 4:30 pm

A Muslim mayor in a presumed Redneck town is……timely and refreshing.

#172 Thetruth on 10.20.10 at 4:38 pm

Censored for saying high population growth in Toronto and Vancouver are causing a spike in demand resulting in high prices.

I totally believe in your hypothesis if you think these cities will have zero population growth. Notice the traffic lately while apparently few jobs have been created.

I guess it’s your blog and you can put whatever on it you like .

Duh. — Garth

#173 Sphinx on 10.20.10 at 4:39 pm

#115 The Original Dave
#133 joseph
#139 blobby

Your rants and personal attacks are evident of your inability to engage in a mature civilized debate. After all, this is a greaterfool blog…

#174 Sam on 10.20.10 at 4:39 pm

#66 Willy H on 10.20.10 at 7:36 am

The “Ireland Experience” is certainly sobering.

Most of the folks on the Emerald Isle were snorting what appeared to be an endless supply of cheap (almost free) money. At the very same time they were being injected with vast sums of EU foreign aid!
__________________
The cheap money was what did it.

Countries that used to have to pay huge premiums for bond issuance over what the Germans paid now could get bonds at the rates GERMANS had to pay.

Spain, Latvia, Hungary, Poland … same deal. You never hear much about the smaller Eastern Europoean problems … there’s not much media crossover or interest, but they’re having immense (easy credit -> high asset prices -> pay the piper) in the end problems.

#175 BBC on 10.20.10 at 4:40 pm

Re: Muslim comments

Lighten up everyone. The very reason most of us have stuck with this blog for so long, is that the writing is colourful at the very least. If you can’t grasp the point of the comment then you should stick to the main stream News!

BBC

PS. if you haven’t noticed Garth makes a point to offend everyone EQUALLY!

#176 Devil's Advocate on 10.20.10 at 4:45 pm

“Prices may not regain their previous peak for a decade.” #135 René Kabis

Hey René nice to hear from you. I absolutely agree with this comment. And when that happens those prices will then be well deserved and in line with the historical trend-line.

As for a 70% haircut in real estate values… I still don’t see it. Were that to happen it would certainly preclude regaining those previous peak for more than ten years. Were that to happen I suspect the catalyst might be something which would quickly take our minds of the housing market. Sure it could happen but wasting our time worrying about, or in the case of the Vultures “hoping for”, such a most probably erroneous event is an inane exercise.

#177 Dan in Victoria on 10.20.10 at 4:47 pm

This sounds familiar.
Heres a write up from India.
“Unreal Estate”
Manic buying before a likely panic collapse.

http://www.indiainfoline.com/Discuss/Blogs/R-Venkataraman-Blog-Unreal-estate%E2%80%A6Manic-buying-before-a-likely-panic-collapse/1057672?source=patrick.net#leftContainerHome

#178 realpaul on 10.20.10 at 5:03 pm

15 days until civil war breaks out in the US?

http://curiouscapitalist.blogs.time.com/2010/10/19/will-the-federal-reserves-next-meeting-lead-to-civil-war/

#179 Barb the proofreader on 10.20.10 at 5:30 pm

Garth, one of your favourites pops into the news again, Concrete Equities..

Alberta Securities Commission has charged the owner of Calgary investment firm Wealthstreet with breaking securities laws and misleading investors. The owner of Wealthstreet, David Jones was also a director at Concrete Equities..

http://calgary.ctv.ca/servlet/an/local/CTVNews/20101020/CGY_weath_street_101020/20101020/?hub=CalgaryHome

#180 David B on 10.20.10 at 5:31 pm

What has not been mentioned is the fact there are many homes bought and sold by our Military moves each and every year and these people buy homes with the knowledge the government pays for many added costs.

#181 brainsail on 10.20.10 at 5:43 pm

#142 Ron Burgundy

“WHAT ACTUALLY HAD MADE CANADA DIFFERENT?

Nothing “HAD” made Canada different until the government stepped in and enpowered the banks to offer low mortgage rates with 5% down with 35 year terms. What had changed to cause them to do that? Unlike the US government which did not inject the banks with billions until after unemplyment numbers imploded, families started walking from their mortgages resulting in the collapse of house prices.

Now Canada “HAS” become different by extending the housing bubble timeline out further than reality suggests. What is going to change in the near future that will improve the unemployment numbers? How long can the economy absorb the transition from FT jobs to PT jobs, HST and other looming increased taxation? How many jobs will be affected when the housing bubble gets pricked? How many bullets does the government have left?

What “WILL” make Canada different in the near future?

#182 Vancouver_Bear on 10.20.10 at 5:56 pm

Devil’s Advocate, only 5 posts from you today…..you finally got a listing? CONGRATULATIONS!!!!!

#183 Two-thirds on 10.20.10 at 6:08 pm

Garth should have written “Interesting” in crayon today

#184 Sean on 10.20.10 at 6:09 pm

Garth… please do not even use the word “Muslim”… in fact, please don’t even think the word… even if you just want to describe a M&^%&’s religion… please Garth, enough people have been hurt today.

P.S. Also avoid the colors black, white, yellow, and red.

#185 VICTORIA TEA PARTY on 10.20.10 at 6:15 pm

CHURCHILLIAN “SPINE” STALKS WESTMINSTER: ABOUT TIME!!

Chancellor George Osborne (UK’s finance minister) pretty much laid it on the line, on Wednesday, as he proposed new and very tough austerity measures, in a speech to Parliament.

“Today is the day when Britain steps back from the brink, when we confront the bills from a decade of debt.

“It is a hard road, but it leads to a better future.”

Measures include cutting half a million civil service positions, robbing Peter to pay Paul shiftings of funds, from one ministry to another; and, earlier this week announced cuts to the military, show some definite spine whom our forebears heard in Winston Churchill’s voice during the Second War. Sir Winston’s spirit stalks Westminster and 10 and 11 Downing!

This time around, in 2010, years of overindulgent spending by successive UK labour governments, and the general geopolitical and financial debacles of today, have forced the Brits to get with the spending weight-loss program. Bless ’em all!

AND OVER HERE?

How soon will Canada and the US follow? Like never? At least NOT for now, I fear.

We in Canada continue to live under the illusion of real estate dreams and consumption to the stars, along with our own hubris-style opinions of ourselves: the “we’re better than the Yanks” chauvinism.

This nonsense STILL pervades our culture as we whistle past the financial graveyard, with a record federal deficit and deeper personal/consumer debt than EVER in our history.

We have to change our attitudes or external forces will do that on our behalf and in their own fashion and time. We won’t be enjoying any of that! So let’s get down to it now
(See the Bank of Canada’s latest ramblings).

IN THE USA

Such an outcome will arrive in the US AFTER it first visits us. Why? Because the greatest debtor nation in history, our key trading partner, has the PRIVILEGE of administering the world’s reserve currency the Greenback.

The US can wheel and deal and raise up inflation to pay the bills, by endlessly printing endless amounts of bucks. No one else can do that to near the same degree, or more to the point, effect.

While the American Elites have taken this privilege and turned it into an entitlement they must know that history awaits an upcoming weaker moment of their’s. At that point they will lose their currency status.

You see, the US DID NOT INVENT THE RESERVE CURRENCY, it INHERITIED it from another broken down empire: the British Empire, whose currency, the pound, was the reserve currency until Bretton Woods canned it in 1944.

So, how will the Yanks lose THEIR currency status? A scenario or two:

–the day that China stops buying any and all US paper; and, or

–a coinciding “currency war” that begets a trade war where US business runs out of export customers because nobody will accept US Greenbacks in exchange for goods offered for sale. (BTW, the whispers going around after this week’s raise of the China central bank rate is “foreign” currency controls over there!)

Whatever, the next reserve currency, the Yuan, or maybe be a “basket” of currencies containing flecks of gold awaits. Such huge events can occur in the twinkling of an eye; no extended negotiations needed. Stay tuned.

Just remember America, inspite of another dodgy upward-looking conclusion to the Dow Jones this date, is not bullet-proof in a world of such economic turmoil. The grinding poverty there continues to expand, and the middle class keeps getting smaller and smaller. And, yes, it can happen here, and it likely will unless attitudes of grandiosity and hubris are suppressed.

#186 jess on 10.20.10 at 6:17 pm

The Big Business Wall Street Won’t Discuss
http://www.youtube.com/watch?v=g2bju39fTTI&feature=player_embedded

#187 The Original Dave on 10.20.10 at 6:21 pm

#115 The Original Dave
#133 joseph
#139 blobby

Your rants and personal attacks are evident of your inability to engage in a mature civilized debate. After all, this is a greaterfool blog…
———————————–

yeah, keep blaming the world for your problems. Keep being defensive. Know that there are only a few in that corner. Fear everything. Thankfully there are people of all cultures, including yours that understand the original point made wasn’t a personal attack by any means. Go on about your ways.

#188 timbo on 10.20.10 at 6:30 pm

a really good re-visit on the problem with wall street.

http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom/index.html

coming to Bay street this year or early next…

#189 fu_ming_xia on 10.20.10 at 6:37 pm

A Muslim mayor of a WASP cowntown city!? Dang that’s interesting as hell! I think it shows that anything is possible in Canada. Anyone offended by Garths statement needs to relax, and find something else ro be insecure about. On a side note, I agree, if you want to live in this country, please adapt to the Canadian way…..whatever the heck that is!!?? Haha

#190 Nostradamus Le Mad Vlad on 10.20.10 at 6:44 pm


#207 BrianT on 10.20.10 at 3:05 am

Correct. The only reason the US Fed and others are dragging this out is to keep the debt cycle perpetually increasing. The cash registers in the west are empty now and the cupboards are bare. However, there are plenty of opportunities to steadily increasing one’s own wealth without resorting to the govt. help.

#17 Utopia — “Priceless.” — Priceless! Good post!

#42 Don — “dark sad person – cease and go away!”

Evidently dsp, you’re rattling some chains. Please continue!

#70 Willy H — “* most of money is ending up in the hands of bankers”

Which is why civil unrest, riots (as in Europe) and many other events are now well within reach.

Gun and ammo sales in the US have risen sharply over the past month or two. People who have lost a bundle are more than ready to protect themselves against Big Bruv.

Just as dubya and Obama have and are destroying the Bill of Rights and Constitution there, so the people they were elected to serve have cottoned on to what is happening.

#75 Old_is_Gold — Very good post which shows the feds. and provinces are in each other’s pockets, same as Campbell (BC) and Harper.

#94 Tonguestump — One of the funniest posts ever written! Folks are way too serious — lighten up, ‘coz life is too short!

#105 Trino Tuta — “I’m so tired of this abused political correctness crap.”

Right on! See #94 Tonguestump’s post.

#114 Tim Todler — “500,000 public service jobs cut”

Thing is, where will those folk get their spending / beer money from? If they are all on pogey, that will cover the basics, but no more.

Thus the domino effect of pretty much everything begins.

#140 canadian girl — Good post. Goes with #207 BrianT’s and #70 Willy H’s posts. The banks are milking the public dry, and chances are good that the Cdn. banks, with the blessing of the BoC and Carney are doing the same to us.

#141 The Original Dave — “. . . China cutting off supplies to the rest of the world and so governments will take action to secure their own supplies.”

Could be why Obama has upped the ante with rhetoric about China not being such a terrific country, HAARP causing floods, mudslides etc. (such as Pakistan, who have nukes and the US is doing its best to destabilize the country), and the Chinese using their US debt holdings to switch into hard, tangible assets, so they will at least have something to show for their investments.

#142 Ron Burgundy — “WHAT ACTUALLY HAD MADE CANADA DIFFERENT?”

Actually, nothing. Timing is a little different, that’s all. Just as the US and UK are crumbling, so too it will be our turn, along with Oz and KiwiLand in a few months, if not sooner.

#143 Devil’s Advocate — Good post!

#153 Crash Callaway — “I’m so offended that you are all so offended”

Agreed and ditto. What a bunch of jellyheads!

#154 dark sad person — “The Banks “want” this to happen and so it is happening-When you have no due process of Law in your Country-You are living in a banana Republic-”

Agreed. The banks want this to happen, but the one thing they cannot control is the inevitable outcome. That is the nasty part.

#157 jess — Good link. Spells it out nicely.

#165 David B — “The middle class of the richest nation on earth followed by others in the G20 are all under attack. The Rich 1% of these own 95% of the wealth and they are getting richer!”

Pre-planned takedown, or organized transfer of wealth from the middleclass to the elite?

There are too many coincidences happening to make me think otherwise!

#191 Reasonfirst on 10.20.10 at 6:45 pm

#181 David B

1. How many?
2. How is that different than that of the US e.g

#192 Canayjun on 10.20.10 at 7:35 pm

We sold our house in Surrey BC for close to $600K in November 2009, with a January 2010 close. Another house a block away, same size, same age, same updates, listed for $599K in January 2010, reduced to $589K in April 2010, then to $579K a week later. It has now been reduced to $549K as of yesterday. It may go for around $540K or $530K, which is about 10% less than our November 2009 sale. This kind of information is buried by RE agents.

#193 T.O. Bubble Boy on 10.20.10 at 7:42 pm

Are all of you “offended” readers also shocked by the CBC’s Little Mosque on the Prairie, and that the Toronto Maple Leafs drafted Nazem Kadri?

Save your reactions for what is happening to the economy, or for the fact that Rob Ford could be the mayor of the largest city in Canada.

#194 Boomer62 on 10.20.10 at 8:10 pm

Garth…I have drafted a letter to today’s poster girl…Ms. O’Riordan.

Dear Ms. O’Riordan:

We regret to inform you that your request for Residential Price Depreciation Benefit (RPDB) and Underwater Mortage Subsidy (UMS) has been denied.

As you are well aware, Ireland’s EC line of credit (ECLOC) has been under meticulous international scrutiny since last year’s fire at the near-by Guiness brewery and resulting lost export revenue. Accordingly, the UMS and RPDB programs were cancelled until further notice.

If you wish to appeal this decision, contact the Ministry’s Office of Debt and Delusion within twenty-four (24) hours of receiving this notice.

We regret any hardship or inconvenience this may cause you and wish you and your family the very best in your new home. Best wishes with your career in journalism.

Minister
cc. Mr. and Mrs. O’Riordan

#195 Regina-Guy on 10.20.10 at 8:28 pm

OMG, glass-jawed minority individuals:

“Yaayyy! The Mayor of Calgary is a Muslim! Hey, don’t point that out though, why is that anything to point out… what’s interesting about that, I’m offended, no… no… I’m disgusted!!! [whimper]”

No, I’m disgusted buddy.

You need some balls for your truck

#196 Nostradamus Le Mad Vlad on 10.20.10 at 8:29 pm


#186 VICTORIA TEA PARTY — “–the day that China stops buying any and all US paper;”

See 31 second clip below.

Judges Are Crooks, Too “This is for those of you who still think the US Government will come to the aid of homeowners screwed over by the mortgage backed securities fraud!” wrh.com.

They may be on to something!

Call a spade a spade. A depression?

US$ Things are happening awfully quickly now.

Blizzards in Scotland, snow in Yorkshire.

7:08 clip Money by Magic!

Racketeering Good for this young couple!

5:14 clip Is this the reason why BoA is playing funny money with some?

Same in Canada. “I invest in anything that Bernanke can’t destroy, including gold, canned beans, bottled water and flashlight batteries.”

Five Science Theories that were, ummm, not so accurate.

Legalese “I can already see the skid marks in front of the courthouse!” wrh.com.

The Producers Comment from wrh.com is better: “And Congress, themselves invested in the firms that owned those mortgage backed securities, went along with the scam!

“The housing market is being intentionally crashed by the banks and the US Government!” I skipped the first two paras. as they were too long.

0:31 clip “I Pledge Allegiance To America’s Debt, And To The Chinese Government That Lends Us Money”.

Even the Bankers are getting their heads messed up.

Foreclosures are Illegal So, apparently are drugs (the naughty kind).

War “Translation: Foreclosuregate is dragging the economy into the center stage of the upcoming election, so Obama has to start blowing up more brown people as a distraction.” wrh.com.

Confiscating pension plans, US style.

Jimmy Carter was one of the better US presidents.

Here it is! Big Bruv (the UK govt.) and what it’s doing behind the scenes.

The police don’t bother to stop the violence anymore.

#197 groundzeropat on 10.20.10 at 8:32 pm

I think the crash is getting very close. Here’s Why.

I was talking about real estate in my lunch room with my co-workers and our 23 year old car wash jockey walked by and said he was going to give us tips on how to buy real estate. He said he used his grandfather’s inheritance that was left for him 6 months ago for a down payment. He bought a 3 bedroom 1300 sq/ft condo in Richmond for $480,000.00 and a 700 sq/ft. 1 bedroom condo for $320,000.00 that is being rented. He said he was going to be rich in a couple years when he flips them.

This sounds just like 2000-2001 when everyone and their dog was buying Nortel and other dot-com stocks. I think it is time to head for the exits and don’t walk….. RUN!.

#198 Ben on 10.20.10 at 8:36 pm

It’s a slow day in the small town of Pumphandle, Saskatchewan – the streets are nearly deserted. Economic times are tough so everybody is in debt and everybody is living on credit.

A tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk saying that he would like to inspect the rooms upstairs before picking one for the night.

The motel owner gives him a key and as soon as he walks upstairs, the owner grabs the bill and runs next door to pay his debt to the butcher. The butcher takes the $100 and runs down the street to retire his debt to the pig farmer. The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Co-op.

The guy at the Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her “services” on credit. The hooker rushes to the motel and pays off her room bill to the motel owner. The motel owner then places the $100 back on the counter so the traveler will not suspect anything.

At that moment, the traveler comes down the stairs, states that the rooms are not satisfactory, so he picks up his $100 bill and leaves.

No one produced anything. No one earned anything … However, the whole town is now out of debt and now looks to the future with a lot more optimism.

………………………..And that, ladies and gentlemen, is how a Stimulus package works.

#199 CyberD on 10.20.10 at 8:41 pm

I’ll keep this simple. I’m with Garth that we yes even Garth, will soon be eating squirrel for dinner and chipmunks for appetizers. Okay, let’s look at it from another angle. The US Gov. forked over an obscene bailout (by the way that has to be paid off with interest), the Chinese are running the banks and OIL is becoming harder to get. GUYS wake up!! Take a good look around there is a HUGE storm brewing! The link I’ll share with you is a little old…but still holds true. Just as Garth!
http://www.youtube.com/watch?v=RKc4XFK0iVY&feature=related

#200 Taxpayer like everyone else on 10.20.10 at 9:20 pm

200 Ben – that is not stimulus.

What it is an example of is liquidity. The tourist has
provided a low/no interest loan to the hotel owner enabling him to pay another debt etc. In the end no good or service is produced. Unless of course the financial industry claims their 20% of GDP.

Who is the tourist? Mark Carney.

#201 somejerk on 10.20.10 at 10:13 pm

How come none have notice the RE media machine toned it down… only promoting “$444,644 – up seven per cent compared to the average of $414,479 first 14 days of October 2009….” the markets stable, because they don’t want F to know whats really happening here or he’d raise the Bank Rate, and completely suck the life out of their dwindling commissions…

In the good old days they’d be pumping the $500,807 (in the GTA) compared to $455,001(2009), up 10% y on y… “you better get in, see how prices are rising ”

here are some interesting numbers on the ‘stabilizing’ 416 market… (just taking the 2wk oct nums)
yoy
2010 $500,807.00 10%
2009 $455,001.00 21%
2008 $375,804.00 -9%
2007 $414,878.00 17%
2006 $353,667.00

pretty stable price increases, looks to me like its close to the long term price average… what was that supposed to be a bit better than inflation? well I’d be generous and say at least 6% roi, it is the center of the universe, don’t you know…

Ok, 2007 was frenzied price because of new land transfer tax… but really you bid up housing almost 20% to avoid a ~3500.00 tax (if you can’t pay probably shouldn’t be buying the house) Then you cry like babies when the SHTF… Sadly if you realized, you only increased your housing taxes over the long term on both counts…

Guess what the popular mayoral choice is going to do? Rid us of that land transfer tax… which will be a whole new bunch of sunshine, by the RE machine, to be blown up you know where (credit: Garth 2010). I figure it would be another 20% increase sans land transfer tax (but way more in the city coffers year after year – ford perfect), but sadly something will be ugly before any of this happens, and many will be happy that someone may not have to pay that extra tax so they can unload their home.

Keep up the great work Garth, from a Calgary boy in the T.dot, where I’m often offended but hey but thats what they told me would happen moving out east. Guess the some of the others here don’t really realize what a rough place Canada is. Too much sunshine somewhere.

#202 Uncle Tom on 10.21.10 at 11:05 am

I also find it interesting that Calgary is the first city to have a Muslim Mayor. Even more interesting is why NO other city in Canada. Whats wrong with everyone else.