Harbingers

Days ago a mess of people in the real estate business went to hear Cameron Muir speak. He actually does a lot of that. Kinda like me. Has facial hair too.

As chief economist for the BC Real Estate Association he’s a good draw these days. Everybody wants to know what comes next in the most unaffordable market in the developed world, where it takes 70% of a family’s income to carry a Vancouver home and where it looks increasingly like we’ll have Ground Zero for the Canadian housing correction.

But according to people in the room – industry players – Mr. Muir decided to make Garth Turner his topic. “Muir made jokes at your expense – claiming that you advise your followers to hoard vegetable seeds as they will become currency. He said that your outlook of a real estate meltdown is utterly laughable and that you’re not credible.”

Hell, we all know that. And let’s leave my curvaceous veggies out of this. He’s the big-name economist. I’m just a social pariah with a Hummer, a blog and a bad attitude. So I think his using an industry conference to trash me says about all you need to know about the current state of the market.

Meanwhile in Victoria, Don and barb pass this along to you:

“We sold our home in Victoria late last winter/ early spring and got lucky. One of our “comparables” was originally listed at $729,000 and didn’t sell.  It’s still on the market only  $100,000 less and still no takers.  Another one, also on at $729,00 as we priced ours, came off soon after as the owners were going to wait  year.  Well, they didn’t wait a year and just put it back on, only asking $688,000.  And there it sits. Perhaps they too were at your talk at the Convention Center and realized that they had best try to liquidate before they lose much more.   So, we’re renting nearby and loving every minute of it.  And our money is invested much like you recommend it should be.

“So from a retired cop and his teacher wife, accolades to the bearded ex finance minister who has a fetish for fat women, cleavage, animals and a  practice of educating benighted yahoos.”

Now, you might have noticed that today’s Globe and Mail starts a series on ‘the long shadow over Canada’s housing market.’ The writer, Steve Ladurantaye, has been working on this for some time and asked me for my thoughts. I’m sure it will be an interesting few reads.

This – the media portrayal of housing – helps fulfill one of the 11 real estate indicators that I track continuously. Right now every single one is flashing yellow or red. Included are public and private debt ratios, current mortgage originations, SFH housing starts, sales and listings stats and a half-dozen others. These signal to me where the market’s headed over the next few months. Layered above are the four realities which will largely dictate the next decade, namely demographics and the Boomer property retreat, the slowest economic recovery in history, structural unemployment, runaway public deficits and the higher taxes and rates they will engender.

This means the housing melt in Canada isn’t an ‘if’, but a ‘when’. There’s nothing governments or industry can do to alter the troubled future of residential real estate. Mortgages are already rock bottom, RRSPs can be raided for down payments, house proceeds are tax-free, federal insurance lets banks loan to anyone with a pulse and first-time buyers get cash-back mortgages and a gift from Ottawa. No, until we get more jobs, higher salaries and pay down debt, this market is going down.

And that’s been my one consistent message since this blog began. Know this in advance, and prepare. Diversify where your wealth sits. Understand real estate is necessary, but it’s no investment strategy or retirement plan. Warn kids with little equity and 95% financing they’re casualties in the making.

The Bank of Canada may be sounding the alarm. Some national economists may be desperately flagging debt levels. People selling houses may be recoiling. The media may finally get it. And it may soon be obvious what we wrought with our house porn and twisted sense of entitlement.

But so long as Mr. Muir chooses comedy over conscience, well, down we go.

254 comments ↓

#1 blase on 10.22.10 at 9:44 pm

I noticed on the stats that the Herald posted comparing 2010 prices to 2001 prices that there was a $200,000 jump in average prices over 2 years in the mid-2000s. And it kept increasing even after that. Wonder why people don’t believe in what goes up must come down? Even a $100,000 drop will wipe out most people. Easy come, easy go.

#2 Jon B on 10.22.10 at 9:49 pm

Yes he does have facial hair, but not nearly as well groomed as yours. I’d describe it as “patchy”. Muir must be sure to always tow the party line. No telling whether he’s just a mouth piece for the Realturds or someone with genuine conviction behind his opinions. Regardless, I’m sure he is well paid for maintaining his organization’s consistent message of housing prices will never go down.

#3 Little Ronny on 10.22.10 at 9:57 pm

I have been watching mls here and there and noticed a couple of houses I have been eyeing dropping 5% after 40 or so days on the market.

I also received an email from Monster mortgage today ‘4 reasons to buy a house’ never have I received an email from them before, yeah I would say Canada is in trouble.

#4 Ontario Landlords on 10.22.10 at 9:58 pm

Muir reminds me of a typical real estate ‘pumper’ who attacks people who are ‘on to him.’

We get the same in Ontario all the time. One US ‘RE pumper/preacher’ is coming to Southern Ontario next week to tell us how to ‘win’ with rental property in Ontario…and his website doesn’t even allow for someone to choose what province they are from, only a US state.

Protect yourself and don’t fall for sales hype.

#5 OttawaMike on 10.22.10 at 10:01 pm

With the municipal election this coming Monday; I’m having a hard time trying to decide which mayoral candidate to vote for.

Incumbent Larry O’Brian looks like he’s finished if polls are correct. Maybe the voters should give him another chance since first term was practice?
Clive Doucett is a slightly left of the communist party leaning candidate who has done better than expected but not gonna make it.
Bland career politician Jim Watson appears to have it sewn up. The McGuinty connection does not seem to matter.

Then there are the usual fringe candidates including one who claims Bill Clinton stole his brain and a blind one who went to jail today for beating his wife with his white cane. I can’t even make this stuff up.

My simple solution is to vote for the guy with the most lawn signs. Re Max is the candidate with the highest sign count in town and he’s getting my vote for mayor on Monday .

#6 mark on 10.22.10 at 10:08 pm

Hey Garth, what is it when you get a 40% rise in listings in the last 10 months, while lending figures reverse back to where they were 10 years ago?

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

In some states in Australia we’re having ‘Super Saturday’ as the RE industry calls it, the most auctions on one day in a few years. If the figures aren’t fiddled with in the post (as is custom), we’re expecting it to be ‘Super Sucky Saturday’.

#7 InvestX on 10.22.10 at 10:14 pm

How could the market get to this point of requiring 70% of a family’s income to carry a Vancouver home?
Could other factors explain this? Could many of these homes be part investments, where these owners are renting out suites to offset the cost?

#8 VICTORIA TEA PARTY on 10.22.10 at 10:15 pm

CHOOSING THE RIGHT FIDDLE MUSIC AS REAL ESTATE BURNS!

South Korea is a long way away from our Canadian real estate debacles.

But what’s going on over there this weekend will definitely have some kind of effect on our pile of granite and steel crap, probably something bad.

Because G-20 conferences always seem to come up short on specifics and long on dross leaving our increasingly intractable international financial problems, and their always local effects, bereft of solutions.

G20 denizens (finance ministers, economists, and other assorted hacks) are busy searching their “souls” for an escape from the latest impending financial disaster, a “currency war”.

At the end of the first day there was word that G-20 members will “pledge to avoid competitive devaluations and endorse market-based exchange rates in a fresh effort to defuse mounting trade tensions before they hurt the world economy,” said a Boomberg report.

This followed hot on the heels of a letter sent by US treasury boss Tim Geithner to his colleagues “to set targets for current account gaps as a way of rebalancing global growth and realigning exchange rates” to thwart protectionism during this “weak” economic recovery.

Geithner’s letter was aimed clearly at China’s refusal to cow-tow to US demands to boost the value of its currency, which, says China, would flatten her economy by making her exports to the US more expensive for cash-starved big box store customers and the like.

Prediction: nothing substantive will emerge, because sovereign self-interest always trumps everything else at such conflabs.

INSTEAD…

What the ministers SHOULD HAVE DONE was select tunes we can all listen to while the Great Unwind (recession, depression, crazy times) continues its slow-paced meander throughout the industrialized world, both developing and developed.

So, pick your tunes! Have a little fun! See you at the food bank!

Besides, Rome never had any tune-box like that when IT was burning; no siree. Just a toga-clad guy grinding away on a fiddle, while his pals were outside the gates trying to cut a deal with a number of recent tourists from Central Asia, looking for a meal, a bath, a snooze and a little (pillaging) action.

History repeats? We shall see!

MEANWHILE BACK IN THE “OLD COUNTRY”

Recapitulating news from downtown Europe, the riots in France are ramping up now that the French Senate has passed the law boosting the retirement age to, get this, 62 from 60!

Hope we don’t see that kind of bad behaviour across the Channel in Great Britain. Its latest austerity program makes Maggie Thatcher’s efforts, of so long ago, look like nothing at all.

While that’s in the works, some really dodgy news. Royal Navy types managed to run up on the rocks, of the Isle of Skye, Britain’s newest, stealthiest, submarine.

Bristling with this ‘n’ that gizmos, and such, it actually found something, the bloody rocks! And they were underwater to boot. Some sonar gear! HMS Astute is her name, and astute her crew was not.

Could this portend a Black Swan moment for future UK financial prospects? Hope not.

CONCLUDING THIS WITH A HISTORY LESSON…

Fearing the future? Try this from Sir Winston Churchill’s 1949 book “Their Finest Hour”, a memoir of his first years as British Prime Minister when an ill-prepared UK declared war on Nazi Germany in 1939.

The theme of this volume (there are other books):

“How the British people held the fort ALONE till those who hitherto had been half blind were half ready”.

So the Brits have a tradition of sacrifice, which needs to be trotted out one more time.

Meanwhile, since the Second World War mainland Europe, protected by NATO and free of Communism, has gotten a little soft.

Ergo the demos, as France, etc., continue their post-industrial, and post-everything else, for that matter, epoch into historical irrelevancy. Mais Oui!

The rest of us don’t wanna go there, now, do we?

#9 Utopia on 10.22.10 at 10:15 pm

So let’s see who offers the real goods…

Garth Turner of course panders to the average innocent dewy-eyed Canadian R/E buyer, the grass roots of the country, Investors with serious capital at risk and the enlightened members of his howling blog dawg pack who as we know are always snarling and ready to rip bone from flesh and tear into the truth of the story.

Keep up the good work Garth. The pack is angry and enlightened. Now the media is on their side too. Hurray!

Cameron Muir on the other hand panders to Greater fools, Real Estate investors who don’t have any alternative counsel, dewy-eyed innocent newbie buyers with no experience and no cash, foreigners with fat wallets but limited knowledge of the current risks and those other desperate foreign investors in need of a Canadian passport who can be duped into buying at the top in exchange for the benefits Canada offers.

Bad Dog Cameron!! Sit boy! Stay!!..no dog-chew for you!!

And Cameron charges for his services. What a world.

#10 CTO on 10.22.10 at 10:33 pm

Garth

had a long debate with my nephew this evening.
He is convinced that T.O is the only city in the world worth investing in and prices here will never drop. He says the condo market $/sqft is the same or less than NYC and thats cheap for a “world” city like T.O.
He thinks anyone buying outside T.O is a fool and will not double their money.
So many think like him here….they are so smug and self rightous.
The shock is sooo badly needed here to bring them back to earth!
Soon the few prudent people left here will be drowned by the self rightous high rollers that only value becoming rich at any expence….

#11 Dexter on 10.22.10 at 10:47 pm

You have to remember that your 70% of Vancouver family income to own a house is “declared” income. BC has a 6 billion a year drug economy (tax free) that will continue to keep BC from going into a house correction as big as you predict.

#12 Dan in Victoria on 10.22.10 at 10:52 pm

Well… vegetables always need fertilizer.

#13 Taxpayer like everyone else on 10.22.10 at 10:53 pm

“Everybody wants to know what comes next in the most unaffordable market in the developed world”

Garth – where is this verified? And dont give me the demographia studies….anglophone only……

#14 Nelson on 10.22.10 at 11:11 pm

“The only thing worse than being talked about is not being talked about.”
– Oscar Wilde

Good for you, Garth.

#15 Junius on 10.22.10 at 11:12 pm

Devil’s Advocate,

Yesterday you asked, “My contention is backed more by historical trend peppered with some level headed optimism… yours is just gloom and doom hypothesizing…. No?”

That would be No.

I simply am suggesting that prices will return to historical affordability levels as will interest rates. If rates return to 6-8% and housing prices fall to 3-4 times income levels then they will drop 25% nationally and closer to 50% in markets like Vancouver.

You call that doom and gloom. However it is the real historical trend.

Pepper it with reality (your phrase) and we will almost certainly over shoot these percentages. It will be worse. How much worse is anyones guess but it only has to return to historical averages to do severe damage
to our economy.

The fantasy is that the society of debt continues. The sooner you and others realize this the sooner we can start working on recovery.

#16 Junius on 10.22.10 at 11:15 pm

Garth,

It is all your fault. You called Cameron Muir a comedian. Comedians everywhere are in a rage over this. Who would want to be compared to that bonehead?

Good thing you didn’t call him a clown. Those guys can be downright scary.

#17 Dan in Victoria on 10.22.10 at 11:19 pm

This reminds me of the Tittanic.

Some of us common folk down below starting to see the water coming in, up above in the ballroom its still party time.
35 bucks to enter the “Grand Room”
This ship is unsinkable !!!!!!! cries the man from the podium as he mysteriously starts to rise at an ever increasing angle.

As the decks slowly fill from the bottom the ships bow points to the sky, the band plays on.
The real estate meeting continues on, a few more decks go under the bow points even higher…..The podium is now the highest its ever been.

Still the man at the podium shouts “Fools it can never go down”

Meanwhile down below a few brave souls carry on directing the unsure where to go, spending precious time answering the same questions over and over.

Even down there in the free seats are a few who are now up to their necks in water saying its unsinkable.
This can’t be they all say as the reality of their situation sinks in.

Panic soon sets in , people trample each other in their quest to get off the sinking ship.
Alas it is too late, the pointed bow slips underwater with a giant whoosh sucking the slow to understand with it.
A few bubbles remain here and there but those to eventually pop and return to the historic sea level.

But not all was lost a few smart souls slowly row away looking for new oppurtunitys…..

#18 rory on 10.22.10 at 11:21 pm

GT you said: “No, until we get more jobs, higher salaries and pay down debt, this market is going down.”

Sarcasm extraordinaire …as in from where (India), how is that possible (China), and r u serious as I have bills (USA, Greece, etc.) and yes baby, down she goes.

#19 45north on 10.22.10 at 11:21 pm

Ottawa Mike: Bland career politician Jim Watson appears to have it sewn up. The McGuinty connection does not seem to matter.

Watson proposes to shrink the 23-member city council to as few as 14. Fewer politicians sounds good, until one realizes that it means that wards will be far larger and your access to your city councillor will be even more limited. That’s not the worst of it, though. Watson plans to leave in place the four seats for the rural area.

That means 13 per cent of the population could have 28 per cent of the seats. Urban and suburban residents would be substantially under-represented at the council table.

http://www.ottawacitizen.com/news/What+really+when+vote+Watson/3702984/story.html

substantially under-represented

one of the best columns Randall Denley ever wrote

#20 Nostradamus Le Mad Vlad on 10.22.10 at 11:28 pm


Harbingers — Combined with the links further down, it would appear things are getting out of control, esp. to the untrained eyes of the masses (sheeples).
*
#117 BrianT on 10.22.10 at 9:05 pm

“. . . trickle it down over the peasants if in the mood.”

Reagan’s trickle-down theory of economics from an actor who starred with a chimp? You are correct! It is so enjoyable being an invisible, irrelevant peasant!
*
Lucky Seven! Bank closures today, but check back Saturday a.m.

Asia NATO The US and NATO are sticking their noses in where they don’t belong again.

Quite interesting. “Media Blackout Regarding Earth and Moon Orbital Changes?” — There is a lot more happening than money, crooks and the like! Plus — Links in. TPTB hold all the cards, but try as they might, cannot tell nature what to do. Nature doesn’t care!

Further down, there are references to the ‘Tipping Point’; — Possible events include “November 6/7 weekend, Israel pops Iran. / November 8 market drops 1,000 in a day as the news of the M.E. rolls around.” These are just possibilities, nothing concrete.

Mike the Engineer — Part of the Tipping Point between Nov. 8-11? Plus this.

Further — here.

If anyone drops a feather on Iran, China and Russia, both of whom have too much to lose in oil and gas, will almost certainly flatten the offender.

While the US continues to declare war on just about anyone who is in the vicinity, China (and Russia) continue to make deals.

Timmy’s, but not Hortons. What if the two Koreas have a quickie nuke war while the G-20 is present? Throw in the NWO and others for flavoring and then snacks are served!

Immigrant Song by Led Zeppelin seems right.

#21 Gord In Vancouver on 10.22.10 at 11:38 pm

Do rich Asians have Swiss bank accounts?

Harper seals Swiss tax treaty

http://www.cbc.ca/canada/story/2010/10/22/harper-switzerland-francophonie.html?ref=rss

#22 $froma$ia on 10.22.10 at 11:40 pm

iF Muir was making average wages he’d STFU and put his tail between his legs and walk off.

Alas, he’s another male gender with an inflated head who gets paid to get in a G and work the pom poms of Real Estate with no conscience of folks in substantial debt.

Way to go “Muir” You soid we won’t get double digit rate increases like the 80’s!!!

Jack ass, 2% rate hike will be the equivalent as our mortgages are 6 or 7 times what they were in the 80’s!!!

I think its time you got some Cow Boy shoes.

$

#23 InvestorsFriend (Shawn Allen) on 10.22.10 at 11:54 pm

Well it takes a difference of opinion to make a market doesn’t it?

For every house sold there was a buyer willing to pay…

Same on the stock markets, we often hear things like “Sellers out-numbered buyers on the stock market today, as investors pulled money out of stocks”. Of course that is not true, for every stock sold there was a buyer. For every dollar selling investors pulled out the buyers put that dollar in.

What is true is that some days selling sentiment is stronger than buying. But the stocks prices adjust so that demand equals supply. In a free market that is always the case. Price adjusts to bring supply and demand to an equal level.

Low interest rates push demand up. Demographics push it down. Recession pushes demand down.

Where are house prices headed? Well reasonable people can disagree on that. If everyone agreed house prices will drop 25% then they would pretty much do so right now.

I will not be a buyer of a another house at these prices. Neither will I sell and take the hassel of moving and renting. If prices fall by half I might buy another house as an investment.

#24 rory on 10.22.10 at 11:55 pm

Another disappointment for free speech in Canada and why???? … is it because the truth hurts??? ….here is a whoa – “This isn’t really a free speech issue so much as a question of how pathetically the multicultural left is willing to prostrate itself before Islamic intimidation.”

http://www.nationalpost.com/news/canada/Centre+refuses+host+Steyn+lecture+free+speech/3709430/story.html

Read the article & comment sections and form your own opinions. Yikes.

Scotty we have a problem, beam me up – NOW.

Sorry for veering off topic but homes be damned …this is serious.

#25 blase on 10.22.10 at 11:59 pm

What is the point of listening to the advice of a paid economist for a group that makes it’s money from higher real estate prices, speak about the future of real estate? That’s like expecting a spokesman for a toilet paper company to tell you to wipe your ass with your hand!

#26 BoB on 10.23.10 at 12:07 am

BC Bud = $6B year – all tax free. Buy real estate, renovate with cash tradesmen, then rent out at a loss or sell. Repeat over and over. Renting out at a loss also helps you wash your cash. Real estate is the perfect vehicle to wash dirty money and Vancouver and BC in general is awash in dirty money.

#27 Patz on 10.23.10 at 12:12 am

It’s unfortunate that the audience one would most want to hear the sense made here is the one least likely to access it. Cameron Muir and the MSM have a lot to atone for. Self–delusion might be an excuse, albeit pretty weak, but that’s not the case. They are running a very large brothel working hard to keep the supply of virgins coming in. Won’t work though, we’re running out of virgins.

Garth sez: “Layered above [the housing melt] are the four realities which will largely dictate the next decade, namely demographics and the Boomer property retreat, the slowest economic recovery in history, structural unemployment, runaway public deficits and the higher taxes and rates they will engender.”

I’d say five. Looming over all is a crisis in energy. We are well past the point that alternative energy can be effectively brought on stream. Our world eats, runs and flies on liquid fossil fuels. We don’t need to run dry to unwind, that will happen when we can’t meet all our fossil fuel needs. Get used to hearing more about EROEI—energy return on energy invested—that ratio has been dropping for awhile and it’s accelerating. That will wreak more damage than everything else combined.

#28 wetcoaster on 10.23.10 at 12:13 am

When Muir has to resort to calling out the only voice of reason in theis country, you know he is so screwed.

It’s very obvious you keep Muir up at night Garth. Can you imagine his visions of Garth on his Harley barrelling down Howe St. with Sherry Cooper in cowboy boots riding shotgun screaming “she’s goin down baby ! “.

#29 Crash Callaway on 10.23.10 at 12:19 am

“The ghost and Mr. Muir”
coming to a burst bubble near you!

No conscience.
No moral compass.
A person’s duty to their fellow man in all professions is to help not endanger or drag people into the sewer.

Real estate, Government, Money institutions have gone mad and perpetuate the game no matter what.
Can you imagine the uproar if teachers suddenly started giving every student an “F” because it made them richer.
We wouldn’t stand for it.
Well that’s exactly what the aforementioned whores are doing. Only their “F” ‘s are more along the lines of screw you. Just shut, keep buying, take out a mortgage (life sentence) and play the freakin game.

Ya we’re going down.
But they’ll put the right spin on it.
Hell isn’t so bad on cold morning in February!
But it’s different here in Canada.

#30 Nostradamus Le Mad Vlad on 10.23.10 at 12:25 am


Dark Sad Person — Seems you called it right. Nice one! Is Cameron Muir in charge of BoA?

Fitch’s bank ratings — not great.

Is it any wonder California is in trouble? Cash Cow Assets vs. Liabilities.

Seems as if the Brits are toast while the Yanks are foreclosing on themselves.

Banks The way they’re going, there won’t be any to break up — they will all be bankrupt.

China de- or revaluing?

Markets Paralyzed Have the bloody meeting and move on to something else.

Chart Of The Day Don’t get old!

#31 Crash on 10.23.10 at 12:27 am

You know when you get mocked by the likes of Muir that the end really is near.

#32 timbo on 10.23.10 at 12:47 am

Tom Sullivan seeks short sale of home. … Even financial gurus like Tom Sullivan aren’t immune to the foreclosure mess.

lol, with his investment on fox how can you go wrong. what a joke.

http://www.sacbee.com/2010/10/21/3120279/financial-guru-tom-sullivan-seeks.html#storylink=fblike

#33 dark sad person on 10.23.10 at 1:09 am

JM–

Need to know–do you still wonder what I’m smoking?

Remember your outburst over what i said about rating agencies and the value of their gradings vs true value?

Chew on this one–

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

Fitch Places Bank of America’s IDRs on Rating Watch Negative

“Today, Fitch Ratings issued a number of separate press releases placing on Rating Watch Negative most U.S. bank and bank holding companies’ Support Ratings, Support Floors and other ratings that are sovereign-support dependent. The two companies mostly impacted by this announcement are Bank of America Corporation and Citigroup, Inc.” BBB+ coming up.

http://www.zerohedge.com/article/here-we-go-fitch-places-bank-america-all-us-banks-rating-watch-negative

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

What a difference a day-or a few months can make to a grade rating huh JM?

Great call DSP–

clap clap clap clap

JM is on the “front lines”

OMFG–

Why am I having visions-of standing in the sea at Dunkirk?

tune for ya JM

http://www.youtube.com/watch?v=LH4-tOqLH94&feature=fvst

#34 Peter Pan on 10.23.10 at 1:16 am

I think Muir’s claim to be an “economist” are misleading at best… This is from BCREA’s press release when he was hired…

“After six years in real estate sales and development, Muir shifted his focus to academic pursuits, obtaining diplomas from Kwantlen University College and the University of British Columbia, a degree from Simon Fraser University and graduate work in economics and property theory.”

Graduate Work does not equal a Masters degree… He’s a real estate agent with an academic patina.

#35 Peter Pan on 10.23.10 at 1:17 am

Don’t worry Garth, David Lereah would have said the same thing about you back in 2006…

#36 Bilbo Bloggins on 10.23.10 at 1:22 am

Wow, checking my mailbox today I find 4 glossy ads
for various condo developments in Vancouver.
Not 1, not 2, not 3… but FOUR in ONE day.
So the strategy is to market their way out of this slump.
Brilliant!

#37 The Original Dave on 10.23.10 at 1:44 am

for those of you who are unfamiliar with investing or are inexperienced, pay attention to this blog! Some of the posts might be garbage, but there are some very good comments with people who really know their stuff.

A high percentage of people around you and people in general, don’t delve into statistics and aren’t obsessive about investments. Unfortunately, being obsessive and thorough is what is required if you’re to avoid making a huge mistake. YOUNG PEOPLE I”M TALKING TO YOU! All the talk you hear from the public is emotion. You never buy when the market is emotional. When people attach serious statistics to back up their claim as to why something is a good purchase, then there may be a case to purchase. When most of the arguments you hear is “just buy, it will always go up”, be very afraid.

These are tough times we’re living in. There’s a lot of pressure and a lot of noise on the outside. In March of 2009, at the heart of the doom and gloom of the stock market, I bought a lot of stocks. When I told co-workers that I was buying, they all laughed assuming I was being sarcastic. They are average blue collar workers just like me. From that moment, I knew we were at the bottom and no matter what I bought, it would be a fantastic buy (I was proven right).

We are in the exact same scenario with housing. If I told those same co-workers that I don’t want to buy a house because I think prices are way too high (I’m more bearish than Garth by the way), they’d object and would come with the usual crap that houses only go up, and would say things like “look what happened in the stock market, everyone lost their money, but not in real estate” (except me, I made a bundle in the stock market).

It’s not about any market or any special asset, it’s about sentiment. When everyone is thinking one way, it is over crowded and over priced. Go on the other side. It is tough being contrary, but it is extremely rewarding. The more often you’re contrary at the end of a trend the more rewarded you will be.

#38 TaxHaven on 10.23.10 at 1:45 am

Nope. Your correspondent in Victoria is still living in real estate la-la-land.

“…asking only $688,000″? And this from a $729,000 house? Is this any meaningful reduction?

Only a government employee could afford that kind of house price to begin with. Or even the ‘reduced’ price…

Just wait. It’s only just getting started. I’ll be in touch when it gets down to $350,000 and when mortgages are at 12%.

As potential vulture househunters, cheap money is our enemy. The wife & I – and our parents – spent years saving, investing & living frugally and now have real, unencumbered, debt-free cash. And we’ve been punished, and punished, and punished for years.

Which is distinctly unlike today’s new home”buyers”, who have been coddled, backstopped and protected from financial reality by governments too long.

When the governments and their central printers have to rein in their money creation, house prices will drop to sustainable, market-clearing levels.

Really low lones!

#39 TheBestPlaceOnEarth on 10.23.10 at 1:49 am

Cameron Muir is one of the defacto experts of BC Real Estate. Following his genius investors have millions while fool Shiller south of the border should be sued by every Canadian and Non Canadian potential homeowner who listened to his shill and doom and gloom nonsense from 5 years ago.
Speaking of fools
“We sold our home in Victoria late last winter/ early spring and got lucky. One of our “comparables” was originally listed at $729,000 and didn’t sell. It’s still on the market only $100,000 less and still no takers. Another one, also on at $729,00 as we priced ours, came off soon after as the owners were going to wait year. Well, they didn’t wait a year and just put it back on, only asking $688,000***
Hello hello where’s the details of this other property, what does “comparable mean”. Now these guy are gouged renting and are going to be kicked to the curb when the next uptick occurs. These are the same type of folks who sold Apple stock at 50 bucks! Dumb Dumb and dumber. Tell me how much your “loving it” when your landlord kicks you to the curb with your suitcase. You must be Canadians who can’t afford to own. Get back in there and Buy and stop being foolish renting, it’s embarrasing

#40 TheBestPlaceOnEarth on 10.23.10 at 1:52 am

These are just wannabees and hangerons. The next generation of Vancouver/Victoria investors are mega rich and are spending in the neighbourhood of 1 to 2% of their income on housing. 70% is for Canadians who got in late to the game. This isn’t your parents Canada. This place is for the Chosen, the creme de la creme. THE BEST!
****
7 InvestX on 10.22.10 at 10:14 pm
How could the market get to this point of requiring 70% of a family’s income to carry a Vancouver home?
Could other factors explain this? Could many of these homes be part investments, where these owners are renting out suites to offset the cost?
.

#41 Out! on 10.23.10 at 2:48 am

I sold in July of 2008, and I’m still waiting for the “correction”.

That said I haven’t found renting a house that I don’t have to maintain any more expensive than owning one was.

Tough managing the wife though. She thinks renting means I’m planning to leave her.

#42 Back East on 10.23.10 at 4:13 am

So this real estate correction is on all our doorsteps, or soon will be. At renewal time, what bank is going to mortgage a property for more than it’s worth? Then what?

#43 Diana on 10.23.10 at 4:14 am

Seems we’re entering back into an era where reputation and guts are mattering more than the amount of diplomas on a wall. Thank God!

Thanks for your refreshing bad ass attitude, honesty and humour, Garth. Keep up the great work!

#44 David B on 10.23.10 at 5:39 am

Sent in the Clowns …… and 36% of Canadians continue to do so. Time for Tims.

#45 joe on 10.23.10 at 5:49 am

garth,

your picture for this article is tasteless (9/11??) have some sense.

#46 Brian1 on 10.23.10 at 5:50 am

Ottawa Mike; Great joke. It’s not that clear in Toronto yet.
Mark; Great read.
If Muir and Ann Rohmer have any money left when this ends badly then we will know what liars they were. When you run with the wolves, you are a wolf.

#47 Aussie Roy on 10.23.10 at 7:19 am

Thebestplaceonearth

Could you please advise me where I can obtain the stuff you are tok’n, it must be good..

Aussie Update

It’s GOLD GOLD GOLD for Australia – Economist Australia most overpriced houses in the world, STILL.

http://www.economist.com/node/17311841?story_id=17311841&fsrc=rss

http://www.couriermail.com.au/property/brisbane-auction-clearance-rates-well-down/story-e6frequ6-1225942425096

http://www.smh.com.au/business/property/hot-to-trot-in-randwick-as-auction-listings-double-20101022-16xtq.html

Isn’t this where all the Asian money is?.
http://www.theaustralian.com.au/news/executive-lifestyle/gold-coast-mortgagee-sales-hitting-top-end/story-fn6njxlr-1225942231684

http://smh.domain.com.au/real-estate-news/blogs/property-values/when-the-kids-wont-leave-home/20101021-16v6e.html

Bring on those higher rates…
http://www.news.com.au/business/breaking-news/prepare-for-rate-pain-australia-imf/story-e6frfkur-1225941899421

#48 CTO on 10.23.10 at 7:24 am

#40 TheBestPlaceOnEarth

Do you have a blackberry, sunglasses, and an old beamer?
You sound like my nephew who “wants” to be a high roller…or maybe you’re just a crook.

Either way you are headed for a mind numbing shock in the next year or so. It is so needed….

#49 CTO on 10.23.10 at 7:26 am

By the way #40 TheBestPlaceOnEarth

My nephew thinks Van in a city of old people and loosers, he says T.O is the centre of the universe!!!

#50 C on 10.23.10 at 7:30 am

My wife and I sold our condo back in April 2010. We’ve been renting since. At first it took a ton of effort to convince the wife why we should rent and why buying again at this time would be foolish. She reluctantly agreed. When we settled into our rented apartment she still seemed upset, and confused about why we were renting. I just kept printing off 3rd party info, statistics, graphs, charts, and explained to her what they meant. A lot of times they were/are similar to the US situation 4-5 years ago. Now, when we discuss the renting/buying situation she says no need to explain it, I’m on board with you. It feels good to hear that. So for those guys with girlfriends/fiancees/wives with house lust, just be patient and back it up with BASIC 3rd party info. Anyone can say things will go up or down, but if you back it up with concrete statistics from another party, it should help shape the probabilities of things to come. I know there are husbands out there with house lust too so do the same thing with them, and throw in a 6 pack of beers and that should do the trick :)

#51 Real Estate Realist on 10.23.10 at 7:34 am

#40-The Best Place On Earth: Pumping the real estate market is pathetic enough but claiming it’s a great city on top of that is, well, I’m getting a kick out of that !

How twisted does one have to be to think that living in rain or under cloud at least 80% of the year, combined with an infrastructure from hell (and that was prior to making it even worse with Olympic mishaps) is a good thing? Then there’s the corrupt Provincial and Municipal government, the totally corrupt insurance monopoly, the joke called the police force, and more anti-depressants than the rest of Canada combined (so that passive is mistaken for laid-back). Protesters just drink more coffee, or need something to do, because, um, there’s not a heck of a lot to do either unless you are a duck, or ski.

Hopefully most reading this blog are either:

1) Smart enough not to judge a place if they haven’t LIVED there, (being a tourist doesn’t count) therefore refuse to pay attention to the bs without evidence.

2) Have lived in Vancouver and know the truth. (if they lived in Vancouver and don’t know the truth then they spent their time stoned and not actually interacting with society on any civil level at all….or perhaps their just so self-involved that they forgot to pay attention?)

3) Actually, there are only 2 options.

#52 C on 10.23.10 at 7:42 am

Just took a browse on MLS and I’m noticing that in the area I’m interested in (Burlington, Ontario downtown) eventually purchasing, there are many houses that were listed in the summer, then delisted, that all of a sudden are back on the market. The price range for most of them is $400K-$500K. I remember what they went for in the summer and most of them have been relisted for $10,000-$30,000 less. If they don’t sell right away the cuts may become bigger obviously.

#53 Herb on 10.23.10 at 8:27 am

OttawaMike @ #5 and 45North @ #19,

my protest vote will go to Clive Doucet. O’Brien is unthinkable (voted for him with great expectations of common sense and management, but I voted for Harper too), and Watson is just forestalling unemployment after next year’s provincial election. Besides, he had the job before and quit on us for a greener pasture.

Watson can safely promise anything about the size of council: the Ministry of Housing and Municipal Affairs will have the real say. He knows that as recent Minister thereof.

Between O’Brien and Watson it’s a choice between the plague and cholera. So it’s Doucet for me: at least he has spoken to real issues, and a vote for him will show that there is support for these.

#54 Keith in Calgary on 10.23.10 at 8:29 am

Garth………

Don’t let me be the fitst to correct you……you you should have said…..”Mr. Muir chooses COMMISSIONS over conscience”……as it would have been much more factual.

But alas…….here is a pic of him hard at work……..

http://www.google.ca/imgres?imgurl=http://dinahlord.typepad.com/.a/6a00e008d9a3f9883401156fb92501970c-800wi&imgrefurl=http://dinahlord.typepad.com/dinah_lord/2009/05/index.html&usg=__va7Q9xmKqscosqfhB4mbljRvJbI=&h=576&w=768&sz=41&hl=en&start=0&zoom=1&tbnid=oW7q-jYtSdU1bM:&tbnh=145&tbnw=200&prev=/images%3Fq%3Dwizard%2Bbehind%2Bcurtain%26hl%3Den%26client%3Dfirefox-a%26sa%3DG%26rls%3Dorg.mozilla:en-US:official%26biw%3D1600%26bih%3D732%26gbv%3D2%26tbs%3Disch:1&itbs=1&iact=hc&vpx=284&vpy=232&dur=4183&hovh=194&hovw=259&tx=159&ty=101&ei=_t7CTJ-RNoS8sAO7jsnOCw&oei=_t7CTJ-RNoS8sAO7jsnOCw&esq=1&page=1&ndsp=32&ved=1t:429,r:9,s:0

#55 McSteve on 10.23.10 at 8:48 am

I was talking to a senior manager at a major, international sand and gravel company. Volumes are down 50% – year over year in Eastern Canada.

#56 T.O. Bubble Boy on 10.23.10 at 8:52 am

I’m calling it — it’s officially over for condos in Toronto (except maybe the retiree-targeted ones).

The glut of units on the market is getting pretty bad, and there are tens of thousands more units coming over the next 1-2 years.

For example:

38 Dan Leckie Way (One of the newer Cityplace buildings on Lakeshore): 390 total units, and 56 are on realtor.ca… that’s over 14% of the building looking to sell at the same time! I believe at one point over 100 units (25%+ of the total) were on the market at once.

75 Portland Street (right in prime King West): 215 total units in the building, and 20 of them are currently on realtor.ca… almost 10% of the building — and similar to Cityplace, this is actually down from the peak for listings from the building.

215 Fort York (2 “Neptune” buildings @ King West / Lakeshore): 860 units across 2 buildings, and 68 of them are on realtor.ca (8%). Again, this is way down from the peak for listings, but still a very high number.

I could go on and on with examples – and not just from Downtown West. Even worse for most of these buildings is that there are numerous condos still selling/being built literally next door. For example, right next to 75 Portland you have 650 King West, the Fashion House condos, and a few others.

#57 Sail1 on 10.23.10 at 9:02 am

#41 Out!

Bad advise, who gave it to you?

#58 bruce corell on 10.23.10 at 9:09 am

Cameron Muir has no choice. He is fully aware of what is to come within days or weeks. The Real estate industry is in jeopardy and you must understand he is trying to delay the inevitable. Mr Muir has also sent a note to many of his investor friends that they should sell as fast as they can. They are in protection mode as this will be larger than you (Garth) can imagine. Garth I dont even think you realize what will happen. David Rosenberg has already commented to his investors that this will be the largest real estate CRASH in Canadian History. Garth this is not good as many baby Boomers lives are at stake.

#59 Devil's Advocate on 10.23.10 at 9:31 am

My nephew thinks Van in a city of old people and loosers, he says T.O is the centre of the universe!!! #49 CTO

It’s, relatively, true! Why? Because you make your money where you have to and you spend it where you want to. WHere do you think retiring Boomers are, by large, wanting to retire. You got it… they want to retire in Beautiful British Columbia… The Best Place on Earth!

It’s just that simple. Think about it. That is why eager inexperience young people are bidding up prices in TO today. It is also why wealthy experienced older folk are bidding up prices here in BC today. It ‘s just that simple.

#60 Devil's Advocate on 10.23.10 at 9:33 am

My nephew thinks Van in a city of old people and loosers, he says T.O is the centre of the universe!!!#49 CTO

It’s, relatively, true! Why? Because you make your money where you have to and you spend it where you want to. WHere do you think retiring Boomers are, by large, wanting to retire. You got it… they want to retire in Beautiful British Columbia… The Best Place on Earth!

It’s just that simple. Think about it. That is why eager inexperience young people are bidding up prices in TO today. It is also why wealthy experienced older folk are bidding up prices here in BC today. It ‘s just that simple.

#61 Pete on 10.23.10 at 9:34 am

C on 10.23.10 at 7:42 amJust took a browse on MLS and I’m noticing that in the area I’m interested in (Burlington, Ontario downtown) eventually purchasing, there are many houses that were listed in the summer, then delisted, that all of a sudden are back on the market. The price range for most of them is $400K-$500K. I remember what they went for in the summer and most of them have been relisted for $10,000-$30,000 less. If they don’t sell right away the cuts may become bigger obviously.
———————————————————-

Brampton is in bad shape but you see this same story all over the GTA. People are maxed out and need to sell. I know of a few people who bought “investments” which are finally built but only one problem. They are cash flow negative and they need and want to sell. These people are in really bad shape and face not only losing tens of thousands but face going bankrupt and losing everything. Remeber Canadians are 150% in debt. The house of cards will fall faster if people stop buying. Sellers need to sell more then buyers need to buy. If you are buying LOW BALL by tens of thousands of dollars and never believe in so called biding wars. I told this to a couple who wanted to buy and they faced a “bidding war” I told them to walk and they did. Funny thing is a few days latter the other bidder didn’t qualify for a mortgage. Realtors will lie and lie.

#62 The Original Dave on 10.23.10 at 9:42 am

Garth

had a long debate with my nephew this evening.
He is convinced that T.O is the only city in the world worth investing in and prices here will never drop. He says the condo market $/sqft is the same or less than NYC and thats cheap for a “world” city like T.O.
He thinks anyone buying outside T.O is a fool and will not double their money.
So many think like him here….they are so smug and self rightous.
The shock is sooo badly needed here to bring them back to earth!
Soon the few prudent people left here will be drowned by the self rightous high rollers that only value becoming rich at any expence….

—————————————–

your nephew is going to learn a nice lesson. That is the attitude during the run-up in any bubble. What do yo think people were saying in the U.S during their run-up? The same attitude existed here in 89. It’s already here. The party is dying. It’ll take your nephew about 1.5 years or 2 years from now to realize that we were in a bubble and real estate in Toronto doesn’t always go up.

#63 BrianT on 10.23.10 at 9:47 am

Denninger comes up with a good one again-in the US, the foreclosure process puts the onus on the homeowner to disprove, while in the bankruptcy process the onus is on the creditors to prove-he shows that it is better for struggling, underwater US homeowners to declare bankruptcy, as currently the retirement accounts cannot be taken and it is likely no creditor can prove a claim on the house http://market-ticker.org/

#64 b jacobs on 10.23.10 at 9:53 am

Read and learn.
The number of Albertans behind on their mortgages has risen dramatically in the past three years with the province sporting by far the highest rate in the country.

According to data as of June by the Canadian Bankers Association, there were a total of 500,429 mortgages in Alberta, through banks belonging to the association, and 3,707 of those, or 0.74 per cent, were considered to be in arrears of three or more months.

In June 2007, only 0.14 per cent (659) of a total of 458,044 were in arrears.

This is only getting larger………OH OH

#65 Dark Forces on 10.23.10 at 9:55 am

Even famous actors like Randy Quaid need a mortgage in Vancouver when hiding from dark mysterious forces.

#66 Devil's Advocate on 10.23.10 at 9:55 am

#40-The Best Place On Earth: Pumping the real estate market is pathetic enough but claiming it’s a great city on top of that is, well, I’m getting a kick out of that !
#51 Real Estate Realist

BC gets more than it’s fair share of votes in the democratic process of Canadians freedom to chose where they want to live, if they can afford to do so. By that alone your argument is resoundingly defeated. Time for you to go back to school and learn some basic economics (supply & demand)… Oh and while you are at it take some geography courses and learn a bit about our climate in BC before you go shooting off your mouth. It’s just not at all as you would have people believe. Have you ever been here? I think not. Do I have to mention the Ossoyoos desert again? It’s good… It’s excellent! It’s Beautiful British Columbia – The Best Place on Earth!

But you believe what you want to because quite frankly there’s too many of your kind comin’ out here and spoiling it. Really. Stay there. TO is nice too… A perfect place for you to live, work and play. It’s too expensive out here… and it rains all the time… And we have the HST (oh ya you have that too). Well, I must agree with you. You are right this is a living hell you don’t want to be here. ;-)

#67 CalgaryGirl on 10.23.10 at 9:58 am

Just curious as to how the Conference Board is predicting an increase in homes in Calgary, Edmonton, Victoria and a few other places. What do they base this on, Garth?

http://www.calgaryherald.com/business/Calgary+housing+price+increases+forecast+Conference+Board/3711621/story.html

#68 BrianT on 10.23.10 at 10:04 am

US home prices crashing again http://www.clearcapital.com/company/pr_details.cfm?position=30686

#69 dark sad person on 10.23.10 at 10:06 am

#30 Nostradamus Le Mad Vlad on 10.23.10 at 12:25 am

From your link

Black and Wray write that Bank of America “is sufficiently large and powerful that its receivership will send the credible signal that America is restoring the rule of law and that even the most elite frauds will be held accountable. ”

They note that about a thousand receivers were appointed during the S&L and banking crises of the 1980s and early 1990s under Presidents Reagan and Bush. “Contrary to the scare mongering about ‘nationalizing’ banks, receivers are used to returning failed banks to private ownership,” they write.

The new managers would “direct the business operations, find the true facts about the bank’s operations, senior managers, and financial condition, recognize the real losses, and make the appropriate referrals to the FBI and the SEC so that the frauds can be investigated and prosecuted,” they write. “The receiver is also a well-proven device for splitting up banks that are too large and incoherent by selling units of the business to different bidders who most value the operations.”

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

Absolutely-this is what needs to happen-
If they would have done this when the Credit markets first blew up-
By now-we would be cooking-

“All” Banks should have been left to stand on their own and let the Market price the “assets” and the Banks that were bogus (most of them) should have been allowed to fail-
Fire and charge/jail all the Fraudsters-replace them with competent managers
Wipe out the rich Bond and Share holders-wipe out the Foreign Investors (China et al)
Nationalize the Banks (temporarily)
Print the money to make the Depositors whole-Then-sell them off to the whole Private Banks-that were not involved-

Here we are today-printed/taxed to the point of exhaustion and right back to square one-

This will be the decider of QE 2-
I see Obama and the Dems-are losing ground fast going into the elections-
I’m betting no bailout/QE-

Anyone shorting the USD is going to get their heads taken off-if-it plays out this way–
USD-into the 90’s imo–

#70 goldenfox on 10.23.10 at 10:10 am

Mortgage Fraud:

Snippet
This shows the difference between the Silent generation, who were still in charge at the time of the S&L crisis, and the Boomers and Gen-Xers, who are in charge today. Thousands of people where charged and convicted in the S&L crisis, while NOBODY is being charge and convicted in today’s crisis, which is 40 times larger.

I wanted to check out Black’s last sentence — about the FBI forming a partnership with the Mortgage Bankers Association (MBA), which he calls the trade association of the perpetrators. I found references to it on the FBI web site and the MBA web site.

Both of these references continued the evidence of a bizarre farce. The people in the FBI and MBA who are dealing with this problem are incompetent criminals themselves.

The original March 2007 notice on the FBI web site says that:

“Today the FBI and the Mortgage Bankers Association (MBA) entered into an agreement to combat Mortgage Fraud. The FBI and the MBA will make available a Mortgage Fraud Warning Notice as a proactive means of educating consumers and mortgage-lending professionals of the penalties and consequences of this criminal activity.”

I had to read this three or four times before I could convince myself that I was understanding what I was reading. The FBI and MBA are combatting mortgage fraud by allowing a one-page FBI notice to be used by the MBA for educational purposes. Click here for a PDF of the notice.

Are we dealing with children here? Do these people think that a one-page notice is actually going to make some difference?

http://www.generationaldynamics.com/cgi-bin/D.PL?s=8beSZ1&d=ww2010.weblog

#71 jman on 10.23.10 at 10:11 am

There’s a completely renovated semi in east TO. Listed at $549,900. Nice reno, beautiful in fact. But no garage and only street parking. Very small yard. We’ll head over to take a look and compare. Should be interesting to see what happens. A similar but not well renovated place with a basement apt sold across the street from this one last winter for $589,000. Now those buyers were complete fools. Anyway there is another about five houses away with a larger yard, garage and two car parking listed for $399,900 by some the same staging wizards that sold the $589 place. These places are a short 5 minute walk to the subway.
Prices in the area have more than doubled in the past decade. There will be a hit here too. The only possible cushion will be the proximity to the subway and to downtown. But with 10% unemployment in TO things are ripe for a correction of 20% to 30% over the next three years or so with at least a decade to climb back. Just a guess based on the last melt which peaked in 89, bottomed in 93 and climbed back in 02. I’ll update when and if the places sell.

#72 WiseGuy on 10.23.10 at 10:11 am

#10 Cameron
With regards to your nephew telling you that sq/ft condo prices here in Toronto are comparable to NYC… Let your nephew know that as much as we like to believe we here in Toronto are the greatest city in the world, we really are a tier 2 city and do not compare. We will never be NYC, London, Tokyo or Sydney for that matter. I have been to all four if those cities numerous times… We are not them!

#26 Bob
That has to be the worst explanation to why real estate prices are over inflated ever! BC bud = 6B/year, therefore this money is going into real estate???

Cocaine in Miami is a 25B/year business….I guess they aren’t washing money in real estate down there, where you can buy a condo for $50,000!!!

I can’t believe I even wasted 10 seconds of my life reading that comment from you, but I have to justify it realizing that you more than likely were high when you wrote it! Keep smoking!!

#73 dd on 10.23.10 at 10:23 am

Garth,

I do not agree with all you have to say. Especially what to do with your money once a person has cashed in their lottering winnings from this RE bubble. But you are dead- on about the coming real estate deflation.

Keep being a thorn in the side of the Real Estate Associations and the so called unbaised media machine.

#74 Devil's Advocate on 10.23.10 at 10:31 am

Really it sucks out here on the wet coast. Try Arizona, I hear they have some real bargains down there. They’d be most greatfull for your business. BC is in la la land, and poised for a major correction in which you would lose way too much of your hard earned equity (like any of that was hard earned of late). Seriously STAY AWAY!. The hype is mothing more than a BCREA con to part you fools from your money. Beware; a fool and their money are easily parted. keep out. Go home… Ugly BC… The worst place on earth. Plah, spit, plah, plah.

#75 S.B. on 10.23.10 at 10:48 am

And again last night’s $USD “flash crash” chart:

http://www.elitetrader.com/vb/showthread.php?threadid=209014

I truly believe that our elite rulers/bankers are economically ‘bombing’ us back to the stoneage.

Tent cities exist in the USA, how long until children are sold into economic slavery (housekeepers, etc), or begging on the street for alms. See: slums of South America, India. We will be different, how?

The middle class façade is but a thin veneer of overconsumption and white collar busy-work for which many are overpaid.

How do I avoid feeding the economic “Beast”? Well, I rarely if ever watch TV despite having free basic cable, my TV is a late 90’s CRT model. I have not owned a car for many years (renting a condo & working in downtown T.O).

So, I’ve avoided feeding the car insurance mob/racket, the police mob/traffic ticket racket, the auto repair racket, the cable TV racket, the flat screen TV industry.

I swear if I ever get the red light at YYZ security I will opt out of the radiation scanner and instead take off my shirt and drop my pants (boxer shorts!) on the spot and say here ya go I’ll make it easier you don’t have to touch me. I hope this will embarass the brown shirts (just following orders) and prove our humanness (something the machines take away). I have nothing to hide and I will prove it.

#76 jman on 10.23.10 at 10:48 am

Prairie Gal,
Please read The Long Shadow Over Canada’s Housing Market in today’s G&M. This will provide you with the potential economic impact of a housing correction.
On another topic, my wife was in Van this week. Cab driver, older, said he and his sister bought a place nine years ago on an acre and that his half is now worth a cool million. He wasn’t sure what to do and had a daughter in Brampton. My wife suggested selling, using 300 to buy in Brampton and live off the remaining 700. Smart girl! I wonder if he will. If the cabbie bought it for 600 with his sister that would be a nice fat 700 tax free cap gain.

#77 Frank from Calgary on 10.23.10 at 10:53 am

Mr. Muir criticizing you is like the cigarette industry criticizing the Cancer Society. TO WHOM EVER IS READING GARTH’S BLOGS AND THINKS HE IS OUT TO LUNCH….LISTEN TO THIS MAN. He is trying to do you a large service. A service that the industry cheer leaders do not want the populace to hear.
If Mr. Carney is reading this blog, please raise interest rates soon in order to prevent the imminent `

#78 David B on 10.23.10 at 10:57 am

I know and understand “Foreclosures” are different here in Canada. Having said that, should our economy fall off even more producing job looses and less take home money coupled to all the above mentioned shortcoming en route wrt finance the future is not good evern for Canadians who continue to believe Real Estate is indistructable Freedom.

#79 Devil's Advocate on 10.23.10 at 11:02 am

Really, stay out, you young uns are pissing us off with your Urban Barns and insatiable need of Timmies. The old one’s, your adding burden to our already overtaxed medical system.

We’re going to start charging admission… Wait a minute we already are in the form of the Provincial Property Transfer Tax (1.0% on the first $200,000 and 2.0% on the balance of the purchase price of your BC property ;-) ) We’ll add a new resident surcharge component… Why not..? I bet we could… we probably will.

Yup… BC Sucks… STAY AWAY Garth is right… we are delirious out here. We’re all toked up on BC bud and haven’t a clue what’s goin’ on in the real world. We are freakin’ insane in a harsh insane part of the world. Our brains have grown mouldy from the constant downpours. STAY AWAY I say… stay away.

#80 Trapper on 10.23.10 at 11:07 am

We’re locked into a listing agreement with a realtor that keeps on suggesting we drop our price until the house is sold. We want him to share the pain by dropping his commission or cancel our listing.

He won’t do either…what can we do to get out of this depleting standoff?

#81 David B on 10.23.10 at 11:22 am

http://www.espritdecorps.ca/index.php?option=com_content&view=article&id=483:harper-took-bad-advice-on-uae-file&catid=37:politics&Itemid=80

I post this for thought, to show/prove that all is not well in way your leaders deals with the outside world. Government work at the top is complex, things done or not done correctly can and do effect our pocket books. The looses that are now about to be occured will be costly and those costs will flow down to the homeowner.

I remember once an American President moved a Carrier group out of a city drivng it almost to a ghost town and of course a boom to new one. We are not the US but deep cuts here can have the same effect on Real Estate and they are en route here in the Defence Industry. This bad more will serious consquences if not corrected.

(could it move to keep toops longer on the ground, who knows? but if so more money added to deficit)

Bigger deficit means more spending cuts, higher taxes, higher interest rates, a income tax surcharge, more at the pumps, and OMG higher HST!

As mentioned government finance is complex as are the people requried to vote them in.

Party A … vote for me and I will raise your taxes

Party B … vote for me and I will create jobs

Party C … vote for me and I not only create jobs but I
lower your taxes.

All three have the same tax base and the same bills to pay.

Who would win ……

No brainer eh.

Party 3 by landslide.

Now which person do you think will the Real Estate argument in Toronto Vancouver and Calgary until the roof (s) fall in?

Lucky us who live outside of never, never land eh.

#82 Devil's Advocate on 10.23.10 at 11:23 am

September Buyer Survey Highlights: 29.5% of purchases were by First Time Buyers; 27.2% of Buyers were a Couple Without Children; 57.8% financed via Conventional Mortgage.

Does that mean 43% were high-ratio? — Garth

#83 S.B. on 10.23.10 at 11:37 am

#56 T.O. Bubble Boy great update I live (rent) in this area.

Did you notice another new condo sale office opened at Wellington W/Portland St: http://www.thisisdowntown.ca/

Lots of expensive new unlived-in units still for sale at 550 Wellington/55 Stewart St.
75 Portland is very overpriced.

#84 Alan on 10.23.10 at 11:44 am

There will come a day when you wish you had rain, alot of rain. Parts of the world will have long term droughts. Water will be on the top of your list along with sunshine~!

Just ask Arizona/California residents what they have to pay in water consumption rates. You can buy a small condo with those payments!

Canada as a whole will benefit from the next greatest shift in the worlds history. The rising economic power houses of China and India, Brazil, Panama, Chile, resettlement of Russia and Eastern Europe. USA will pay the price with permanent lost manufacturing and jobs and Canada will be the supplier of “materials” to meet demand.

Spending every day discussing the minute by minute, play by play of the Canadian real estate market is like discussing the inner workings of a watch but forgetting to see what time it is. Small talk=small minds, get yourself into position to prosper from this world wide shift that is happening as you live and breath right now and stop living in the tiny world you inhabit. Travel the world, see the growth, invest wisely.

#85 Devil's Advocate on 10.23.10 at 11:47 am

Central Okanagan
September Buyer Survey Highlights:

57.8% bought with a down payment of 20% or more.
22.2% bought with a down payment of less than 20%.
22.2% bought all cash without a mortgage
0.0% had need of rental income to qualify for purchase.

59.8% from within the Okanagan
12.0% from the Lower Mainland
9.8% from other areas of BC
15.2% from Alberta
1.0% from Saskatchewan/Manitoba
2.2% from outside Canada

13.0% Single Male
15.2% Single Female
27.2% Couple without Children
23.9% Two Parent family with Children
6.5% Single Parent with Children
17.4% Empty Nesters/Retired
(106.5%? Overlap in categories)

Interesting stuff… very interesting

#86 Malcolm W on 10.23.10 at 11:49 am

Garth,

I read your website for the great pictures and light entertainment. The picture on this article is in very bad tatste. I am sure that if it ever makes it to the American mainsteam media, Canada will be embarrassed and you will be looking at more problems than you can handle.
Think before you do somethinhg this stupid again.

Like it’s real. — Garth

#87 Devil's Advocate on 10.23.10 at 11:51 am

Does that mean 43% were high-ratio? — Garth

As per my previous post

Just 22.2% bought with a down payment of less than 20%.

#88 David B on 10.23.10 at 11:52 am

Devil’s Advocate;

Home is where one hangs his/her hat ….

Bargins are what they are sir/madame a good salesperson can make a million selling snake oil to a really good cup of coffee. A really good headhunter knows this and heck they sell good people. Life is now set up for the rich the real movers and shakers. Time has come to get smart and look after #1 and to be able to grow/go with the flow. Real Estate as an investment is complex, I understand and fully appriecate having and owning a piece of one roots … BC is indeed beautiful …. Attlantic Canada is God’s Country and all in between has areas that are breathtaking. It’s called Canada.

What most are saying buy your dream, better still own your dream but invest wisely so you can live a healthy life not beholding to banks or goverments to keep it. Less is more, flipping homes is dangerous to all of the above because now more than ever we have little or control over mortgages We can have control over investments “IF” we are wise.

Soon there will be bargins, remember a sale is not a sale unless you really need it.

#89 Devil's Advocate on 10.23.10 at 12:04 pm

We’re locked into a listing agreement with a realtor that keeps on suggesting we drop our price until the house is sold. We want him to share the pain by dropping his commission or cancel our listing. He won’t do either…what can we do to get out of this depleting standoff? #80 Trapper

Just be a royal pain in the ass. Tell him to raise the price by 5.0% (he must do it as your agent). Tell him you want more ads in the paper (he doesn’t have to do it but it’ll get under his skin) Call him day in and day out for progress reports and then critique his efforts. In short be a real pain in the ass. Soon enough he will beg you to release him from the listing instead of you him.

Truth is he is probably the one on the side of right and you wrong. If you can’t afford to sell for what it is worth in this market you shouldn’t be on the market. I can’t understand why he/she would want to subject himself/herself to such a shitty business relationship where clearly his/her client has no respect or faith. I am amazed they don’t just cut you loose.

#90 S.B. on 10.23.10 at 12:08 pm

Our elite leaders openly mock us with their extravagence – it’s no wonder many in USA are walking away from their mortgages just to spite the system.

16b dollar no-bid fighter jet contracts, 1.5b G20 costs, (but we do not have a corrupt govt ;) ) and south of the border:

“To ensure fool-proof security, the President’s team has booked the entire the Taj Mahal Hotel, including 570 rooms, all banquets and restaurants. Since his security contingent and staff will comprise a huge number, 125 rooms at Taj President have also been booked, apart from 80 to 90 rooms each in Grand Hyatt and The Oberoi hotels. The NCPA, where the President is expected to meet representatives from the business community, has also been entirely booked.
The officer said, “Obama’s contingent is huge. There are two jumbo jets coming along with Air Force One, which will be flanked by security jets. There will be 30 to 40 secret service agents, who will arrive before him. The President’s convoy has 45 cars, including the Lincoln Continental in which the President travels.”

http://economictimes.indiatimes.com/news/politics/nation/Barack-and-Michelles-Mumbai-darshan-plans/articleshow/6797379.cms

Little people, get ready to pay your carbon taxes!! But US military is biggest user of oil and pollouter (just think of the raw exhaust streaming from ships, jets, war-machines). But we must pay for it with a tax on thin air…

Ontario tried to force Energy Audits onto the sale of every home (just another tax for the financial racket/mob), what happened to this?

#91 Malcolm W on 10.23.10 at 12:12 pm

With Cameron Muir at one extreme and you at the other on the future of Canadian real estate, why not challenge him in the media to a public debate.
It would be a sellout event and you could both make a lot of money, plus your public profile and book sales will go through the roof.
Just a suggestion.

#92 dark sad person on 10.23.10 at 12:13 pm

Shilling-says 30 yr Bond to fall to 3%-or lower (< :
And-US housing prices to drop another 20%

Wow-when i said Bonds would be in a Bull market about a year ago-and US housing was nowhere near bottom–
I was "labeled" a "dark sad person" )< :

Whatcha think today JM?

Another–Great call DSP

clap clap clap clap

http://www.youtube.com/watch?v=6-jg1eh_QWc

#93 dark sad person on 10.23.10 at 12:16 pm

Oooooops–Link for #83

Guess no one can perfect–all the time

http://globaleconomicanalysis.blogspot.com/2010/10/home-prices-double-dip-in-sudden.html

#94 BrianT on 10.23.10 at 12:24 pm

#80Trapper-you either need to get serious about selling your house or just take it off the market. What you need to net from the sale has absolutely nothing to do with what you will be paid.

#95 bigrider on 10.23.10 at 12:33 pm

No strike against BC or Vancouver but I am glad I live in T.O. Been to both places, mountains are nice but I’ll take the economic engine, nightlife, restaurants and hustle and bustle of T.O over the nature gig out west anyday.

Still more than happy to visit Vancouver as it is pretty.

DA please don’t attack.

#96 BrianT on 10.23.10 at 12:34 pm

#72Wise-my most vivid memory of NYC: I go into the Empire State building at about 6:00 pm (lower 5th avenue)-the area looks fine. I come out at about 8:30 p.m. and all the shops along 5th avenue have pulled down heavy metal shutters/walls to protect their windows. These shutters are absolutely covered in graffitti (circa 1998). Can you imagine walking along Bloor at Avenue Rd and viewing heavy shutters covered in graffitti? Yes, Manhattan has espensive RE and lots of rich people but objectively speaking it is basically an eyesore.

#97 BrianT on 10.23.10 at 12:39 pm

#70Golden-why do you think the USA is so eager to merge with Mexico-it is because the Mexican society and economy is considered to be the ideal to strive for-an untouchable ruling elite and a corrupt, purchased and powerless (to the elite) government sector.

#98 Real Estate Deal or No Deal on 10.23.10 at 12:46 pm

Article on the real estate situation in Canada:

http://www.theglobeandmail.com/report-on-business/economy/housing/the-long-shadow-over-canadas-housing-market/article1769753/

#99 cindy on 10.23.10 at 12:48 pm

Garth,

You said ; Calgary house pricing 4.1 higher than family income. (Your event in Calgary, Oct 21/10)

What did you base on this calculation? 4.1 is too low…

Cindy,

#100 Grandpa Grinch on 10.23.10 at 12:58 pm

Garth has to eat his own words. Tim Horton’s now accepts gold in exchange for their wares.

http://www.montrealgazette.com/news/Woman+pays+coffee+with+gold+coin/3714740/story.html

Absent-minded person pays with unknown coin to oblivious employee. And you think this means something? — Garth

#101 Hiteclowtec on 10.23.10 at 12:59 pm

#79 D.A.

What are the rents like in BC ? Can I rent a 1000 sq ft. brick bungalow with 100 ft. frontage, new high efficiency furnace, new side by side washer combo and a large garage in the nice part of town for $900 + util or am I stuck here in the sunny Niagara Wine Region forever ?

#102 s on 10.23.10 at 1:06 pm

I understand the idea behind the pic to insight idea “you don’t know what is coming”. But in light of 9/11 and such this is poor taste.

Noted. — Garth

#103 OttawaMike on 10.23.10 at 1:25 pm

Devil’s Advocate,

Can you keep your self promotional tweets here to one post/day and 140 characters max.

Thanks in advance.

You’re hourly rate, when actually pimping must be phenomenal; if I were to add up your time on here it sure must cost you a bundle.
I’m assuming a conservative 150$/hr x 2 hrs. day posting /replying.
Hmmm 300$ day in lost productivity.

I’m sure you can always make up the time by short cutting your fiduciary duties and the botching up the deals for your clients.

#104 Moneta on 10.23.10 at 1:42 pm

Trapper on
——–
If your goal is to sell your house ASAP at the best price possible, make a win-win deal. You can’t expect stellar results by asking someone to work for less. You’ve got to be pragmatic and ask yourself how much selling this house mean to you.

#105 Bingo on 10.23.10 at 2:02 pm

A bit of reality
Listings are dropping in GTA
Whatever remaining buyers have nothing to choose from
Prices anchored-down and even start reversing its trend
35 years mortgages, locked for 5-year at 3.75%, allow even greater fools to meet their payments and to stay in their houses for few more years.
Carney doesn’t want debt to go UP ANY MORE, BUT HE CAN NOT RAISE RATES EITHER. He is looking at F to tighten lending conditions, but F is still hesitant.
Unfortunately, it is so difficult to fing decent rental property at affordable price. Even if you find one, there is a risk to be kicked-out a year later because your “Investor” landlord is trying to bail-out.
Damn you do, damn you don’t
I have no doubt, RE will crush, but it may drug till 2014

#106 joycer on 10.23.10 at 2:02 pm

What’s really pathetic about the real estate industry’s attacks at you is they act like you’re the only one raising flags. That way if they can discredit you, there’s nothing to worry about. I’d love to hear an exchange between say Muir and David Rosenberg or any one of the numerous big bank economists that are now warning housing values are likely to decline in the coming quarters. We both know they would never do that, but it would be nice to hear an open discussion instead of the constant cheerleading.

In my neighbourhood, (suburb of vancouver) nothing is moving. Although listings are slowing significantly, many of the homes I’ve been watching since the spring are still there. Most have reduced by at least $30,000 since the summer (about 5%), and no bidding wars have ensued? The market has definitely changed, but until every possible measurement is lower (average, benchmark, MOM, YOY, etc.) we’ll keep hearing the cherry picked version of how housing prices are not only sustainable but low interest rates make this a once in a lifetime opportunity to buy.

I really hope you are keeping track of all the quotes these clowns are saying so that you can make your own threat-o-graph:
http://themessthatgreenspanmade.blogspot.com/2008/04/fence-sitter-threat-o-graph.html

#107 Nostradamus Le Mad Vlad on 10.23.10 at 2:09 pm

#69 dark sad person — “Wipe out the rich Bond and Share holders-wipe out the Foreign Investors (China et al)”

This is one of the unknowns happening. China has already bought the oil rights in Texas, and continues to diversify itself from their US debt holdings into hard assets.

Nothing political about it — they are covering their asses, that’s all. With the US now inviting legal and illegal immigrants from all across the planet, it has gone way beyond the financial stuff here.

What we are seeing unfold is a charade of epic proportions. As far as Obama goes, the Dems are looking at ways of removing him from office via one of the articles of the Constitution.

See what I mean about how well he has done the job the elite put him in power for? They are the ones who want a continent full of welfare bums.

#75 S.B. — “. . . that our elite rulers/bankers are economically ‘bombing’ us back to the stoneage. Tent cities exist in the USA, how long until children are sold into economic slavery . . .”

Tent cities also exist up here in various provinces, which is why homeless shelters will be overwhelmed by greater demands. As you say, this leads into children being forced into slave labor to help make ends meet.

The days of Charles Dickens are almost upon us again.

#79 Devil’s Advocate — “. . . we are delirious out here. We’re all toked up on BC bud and haven’t a clue what’s goin’ on [an’ wee dont care nun either!]

A rather apt description!

#108 Vinny on 10.23.10 at 2:11 pm

Ref.#3… I have been watching mls here and there and noticed a couple of houses I have been eyeing dropping 5% after 40 or so days on the market.

Me too. I have also been watching mls so often and have noticed a lot of the houses around the TO area drop in prices significantly. I have a hunch that this housing market is only going to grow worse.

#109 Pete on 10.23.10 at 2:19 pm

Realtor Bingo #105

Not only are sales dropping but listings are up. Realtor manipulation are trying to keep a lid on increasing listings. I see signs up but NOT listed on MLS or no signs but listed on MLS. One house in my area shows it’s 3 days on the markets when the FACT is it’s been on the market for over 3 years. that’s right 3 years in real time vs 3 days on lala land MLS. Realtors are running scared and will lie lie lie like realtor bingo who maybe in trouble since SALES ARE DOWN OVER 20% for the last FIVE MONTHS.

#110 Grandpa Grinch on 10.23.10 at 2:28 pm

Absent-minded person pays with unknown coin to oblivious employee. And you think this means something? — Garth

Wow – are you getting enough fibre Garth?

#111 Coho on 10.23.10 at 3:13 pm

#24 rory,

Thanks for the link.

This is how manoeuvring to stifle free speech is done. It starts with not being able to say anything negative against self serving elements of a group of people. They are in every “group” be it ethnic, professional or otherwise. Of course this “special treatment” fosters resentment from other groups and they lobby to be given the same “preferential treatment” and soon no one can say anything negative about any one or any thing.

But, in my opinion, generally it is not the common people that cries foul, rather it is organizations claiming to represent these groups of people that complain. What these organizations do by looping an entire group of people unto itself is essentially painting a target on the backs of peace loving people that want to live and let live. Unfortunately there are those who DO identify a whole group or race with the evil actions of a very few within it. And this attitude serves to inflame even more anger and resentment between ethnic groups.

Some individuals within these organizations might mean well, albeit with tunnel vision and not understanding that they are serving to stifle free speech. Then of course, in any group, there are infiltrators that co-opt the original intent and use it to further their agenda of abolishing the rights (of Americans) and privileges (of Canadians).

Take the “Bubble Cop” at the G-20 in Toronto for instance. The whole issue of anonymous posting on online newspapers is in jeopardy because of slanderous comments towards the officer. Unfortunately there are a lot of uninformed, malicious people that use the internet to express their hate, which makes for a good pretext to muzzle anonymous posters. But, it is not difficult to see where this is heading. We witnessed the reaction to a relatively benign comment such as Garth’s about the Muslim mayor on this blog a few days ago. A whole array of posters, most of which were not regulars, seemed to come out of the woodwork to attack him.

Almost any comment derived from critical thinking and based on truth can be twisted, massaged and construed as “hate speech”, so who would use their personal name as a moniker unless their view is all roses for any one or any thing. The goal is to muzzle speech. “Brown nosing” comments and “all is beautiful” gushing comments and political correctness don’t need to be protected. Unpopular speech does. The fact that most people (even those well meaning and trying to inform) use an alias may indicate fear or concern about being put on some “troublemaker” database. I think most people assume that everything is monitored anyway, and that there is no real anonymity, just the illusion of it…for now.

Indeed house prices and the economy as important as they are take a back seat to erosion of liberty. There are plenty of distractions to go around. Notice the high percentage of celebrity stories on any given day? And there is always a high profile kidnapping or unsolved murder dominating the airwaves. Even though there are many thousands of these events each day, they pick one to use as a distraction.

#112 Moneta on 10.23.10 at 3:15 pm

I really hope you are keeping track of all the quotes these clowns are saying so that you can make your own threat-o-graph:
————
It’s not about real estate but every now and then, when I start questioning myself, I go back and read these quotes:

http://www.ritholtz.com/blog/2006/11/1927-1933-chart-of-pompous-prognosticators/

#113 Junius on 10.23.10 at 3:20 pm

#95 bigrider,

As a frequent traveller to Toronto I can assure you that the restaurant scene in Vancouver is far superior to Toronto. Food quality is far better as is the variety.

However on economic engine and nightlife I do agree.

#114 Devil's Advocate on 10.23.10 at 3:26 pm

#88 David B

There ya go plagiarizing me again… ;-)

#115 Junius on 10.23.10 at 3:28 pm

#67 Calgarygirl,

You asked, “where did the Conference board get their stats?”. They pulled it out of the MUST GIVE POSITIVE SPIN file. Stats would require work and might lead to a negative conclusion.

The Conference Board of Canada believes they are the CONFIDENCE board and never release bad news. Even if it is bad they spin it up.

The predicted Canada wouldn’t have a recession either. The only thing they are consistent at is being wrong.

#116 Devil's Advocate on 10.23.10 at 3:31 pm

#101 Hiteclowtec

Sorry, you are stuck there forever… We Snidely Whiplash landlord types aren’t in the business of subsidizing your lifestyle ya know… ;-)

#117 Devil's Advocate on 10.23.10 at 3:35 pm

#103 OttawaMike

;-)

You got my number all right Mikie

#118 Devil's Advocate on 10.23.10 at 3:38 pm

#109 Pete

Hey brother can you spare a dime? ;-)

#119 Another Albertan on 10.23.10 at 3:55 pm

Based upon DA’s Central Okanagan statistics for September, out of 221 transactions, zero involved individuals from eastern Canada (east of Manitoba). Only 7 of 221 were transacted by people outside of BC and Alberta.

I don’t think anyone in the Interior should worry about being overrun by outsiders.

While the statistics may look interesting to some, they are functionally useless for anyone actually trying to build an economic model. The orthogonal stats are needed: the distribution of those proportions against the sales prices and that against the universe of the 5045 dwellings for sale in the Central Okanagan.

The posted stats actually mean squat unless they can be contrasted against the parent set of data points. Forgot MoM and YoY. Any _real_ analysis needs the full set. The real estate associations across the country and all of the banks have these stats in some form, but the common citizen will never see them.

Everyone else’s mileage may vary.

#120 Devil's Advocate on 10.23.10 at 3:55 pm

People, people, people of course the real estate market is cooling off. Did you ever think what was happening three years ago was going to continue? If you did you are as thick headed as you accuse the current “pumpers” to be. If you didn’t have a clue one way or another you are average. If you believe the markets will never come back you are ignorant. It goes up and it comes down. To speak of lost opportunity or individual financial Armageddon is so 2008. We’re two years in already. Fact is we are approaching a perfect buying time of opportunity. Will you be able to time it with exactness – N.F.W! But you can take advantage of the markets if you understand them and location don’t forget about location.

Some time between 2015 and 2017 you will understand what I mean. But it is now 2010/11 and you have less than 3 years to get your ducks lined up. Believe me… or not. I really could care less.

But in the meantime… please continue scarring the crap out of people. It’s working wonderfully to the benefit of my plan as it pushes real estate values below what they ought to be such that when they bounce they will do so with the same vigor they crashed. You see, economic bounce backs like crashes are commensurate with the zeal of the preceding economic period that caused them. Oh I know you will want to debate this with me this time around. Let me just agree with you right now so we can get on with it shall we.

#121 WiseGuy on 10.23.10 at 3:57 pm

#96 BrianT on 10.23.10 at 12:34 pm

Brian, you are obviously a tourist to NYC, I’m assuming you took the usual stroll, Times Square, 5th Avenue, maybe a little of Central Park!

Sure there are many eyesores in NYC, but for you to say that 5th avenue is an eyesore is pretty pathetic. Yes, the stores do close, but you need to venture off to a few more areas than that. Population in NYC is 4X as big as Toronto. NYC is an international economic hub. NYC has the MET, Guggenheim, American Museum of Natural History, The United Nations, Berkeley College, NYU…the list can go on and on. Toronto can compare, but it really doesn’t.

I love Toronto, born and raised, but it is not a Tier 1 International city. It is a great city, but that does not justify us having the same Sq/Ft dollar value as NYC for Condos here in Toronto. Besides which, we now have more condos in Toronto than NYC????

Condos are way too overvalued here and the appreciation of condos is not going to continue in Toronto. Too many 20 something year olds buying these condos with little to nothing down or Mom and Dad’s down payment. They are expected to keep up mortgage payments, which they will in the short term as interest rates and mortgage payments stay low, but they will soon realize flipping a condo no longer exists. From now on, they will lose money each time they try to flip a condo.

#122 Devil's Advocate on 10.23.10 at 3:58 pm

OMG I am a Vulture! One of the worst kind and a REALWHORE ta boot… WOW… mine eyes have been opened… OMFG

#123 Ben on 10.23.10 at 4:39 pm

.#120 Devil’s Advocate

“Fact is we are approaching a perfect buying time of opportunity?”

Just because were not over bidding now doesn’t mean it’s a buying opportunity. LOL
You just don’t want to believe were in a bubble and the worst is yet to come. You want the party to just keep on going. You want to step right back up to that housing market wheel of fortune that low rates are spinning and win another hand.
To funny!

#124 Herb on 10.23.10 at 4:55 pm

#112 Moneta,

frightening link. There must have been another expert right after No. 19 maintaining that “It’s only a flesh wound!”

#125 miketheengineer on 10.23.10 at 4:55 pm

Hey Nostradamus le mad dude

Re: Nov 7 Tipping Point

Thanks for the links.

Trying to locate the “shape of things to come” “issue 8” but no luck yet. Have you been able to locate?

My best guess is some kinda “earth event” combined with an economic event. Just alot bigger than we have seen in the past. Most likely a combo affect.

Preparing for the worst, hoping for the best…..

P.S. Loblaws has “Habitant” Cans of Soup on sale this week for a $1 a can (regualar 2.29 each). Good item to have on stock as an emergency food. On sale till Thurs.

And if you don’t need them, you can donate to the food bank after.

#126 miketheengineer on 10.23.10 at 5:07 pm

Hey Nostradamus Le Mad Dude:

Just saw this….Geomagnetic Storm…

http://www.n3kl.org/sun/noaa.html

Looks like we may be in for some more “shaking” and “quaking” soon.

#127 Devil's Advocate on 10.23.10 at 5:08 pm

The posted stats actually mean squat unless they can be contrasted against the parent set of data points. Forgot MoM and YoY. Any _real_ analysis needs the full set. The real estate associations across the country and all of the banks have these stats in some form, but the common citizen will never see them. #119 Another Albertan

Exactly! Am I reading you wrong or is this a case of “Boo hoo… they won’t let me play in their sandbox”? What do you think, we’re a public service?

#128 jess on 10.23.10 at 5:11 pm

Moynihan,Brian
Title: CEO
Annual Pay: $6,511,468.00 (2009)
(That’s 128 times average US income!)
Daily Compensation: $17,839.64
===============
The House of Representatives passed a bill on Sept. 29 that aims to give President Barack Obama more authority to impose tariffs on almost all imported Chinese goods coming into the country —

House Passes Landmark China Currency Bill 9/30/2010
Today the House of Representatives passed critical legislation to address China’s fundamental undervaluation of its currency by a vote of 348-79. The legislation, H.R. 2378, the Currency Reform for Fair Trade Act, is the first of its kind to pass the House of Representatives and signals a mounting concern among U.S. lawmakers regarding China’s violation of its international obligations
http://www.house.gov/levin/

Levin Statement on Investigation into Unfair Chinese Trade Practices in the Green Technology Sector 10/15/2010
====================
Liberia alone hosts 509 oil rigs, almost ten times that of the US. Holding 10 per cent of the global fleet, and classified as the world’s second largest ‘flag state’, Liberia’s corporate and maritime registry reflects, for instance, 1,049 German vessels, in addition to that of Hong Kong, Russia, the UAE, Canada and Brazil amongst others.

Foreign owners and operators have intentionally relocated to Liberia for specific reasons: not only does the country allow for foreign clients to ‘purchase’ a flag for a cheap collection fee, circumventing in the process labour, financial, environmental and other national regulations, but it also enables clients to access complete secrecy surrounding the nature of the shipping world.
==============
Asian’s don’t need swiss banking.

#129 Devil's Advocate on 10.23.10 at 5:13 pm

I don’t think anyone in the Interior should worry about being overrun by outsiders. #119 Another Albertan

Ahhhhhh, I see my plan is working masterfully…. Mahwahahaha… ;-)

#130 BrianT on 10.23.10 at 5:16 pm

#121Wise-Yes, you really cannot compare TO to NYC as NYC is 4 times larger. TO is a modern city-NYC is very old. Having said that, there is such a thing as a trend line-30 yrs ago (1980) this comparison wouldn’t even be discussed.

#131 S.B. on 10.23.10 at 5:24 pm

One must remember, due to low barriers-of-entry RE agents are simply re-purposed car salesmen/women.

Both are in the business of high-pressure, emotionally laden selling of depreciating assets that require a ton of maintainence!! But wait, the similarities do not end there: both dangle low interest financing contracts , enticing you to take on way too much debt.

But wait there’s yet more: in the background workers toil at making the shoddy products for sale (chipboard houses, or GM lemons).

#132 SpaceMonkey on 10.23.10 at 5:27 pm

Re #5 OttawaMike,

I agree that it sure is hard to distinguish between a campaign sign and a real estate sign sometimes.
It seems that most real estate-for sale signs advertise the realtor’s name and picture more than the fact that the house is for sale. The name of the seller is always in huge letters and then there might be a small space dedicated to the fact that the house is actually ‘for sale’.

#133 Real Estate Realist on 10.23.10 at 5:30 pm

#66-Devil’s Advocate:
Well, you’ve just scored quite low on the intelligence quotient for all to see. You should be so “BC” proud.

First of all, to say that I am “resoundingly defeated” by a comment that I didn’t even make is very telling. No where in my previous post did I say anything about people’s right to choose where they can live. “How twisted does one have to be..” was a redundant question. I say twisted because of the lies about the weather, and many other subjects.

Another sign of your intelligence is even considering that I haven’t lived there after reading my previous posts, or others for that matter, regarding living in BC. I logged 4 years there, as an Executive in the finance/real estate world, subsequently had my own investment company there working with corporations from BC, AB and the US as my clients, and previous to that owned a progressive health company working with clients through BC physicians in la la land. Oh, and was in a major accident determined to be all of the other driver’s doing, was out of commission for 8 months, and experienced first hand the ICBC fraud that goes on there. Oh, geez, one more thing, was broken into and robbed blind while living in Victoria by crackheads in my lovely neighbourhood in James Bay right behind the Parliament buidling off of the picturesque inner harbour. In Vancouver I was merely the victim of a couple of smash and grabs, which, as you know, happen in every neighbourhood on a consistent basis. Oh yes, back to Vancouver, experienced City Hall’s corruption repeatedly, as an observer only thankfully, but it did affect my business. Oh wait, one more thing, Victoria has the highest rate of business start up failure in North America. That’s a long held record. I’m sure I’m forgetting something due to the simple fact that I am the type of person that STUDIES demographics and the psychology of a place including it’s infrastructure and how it operates. Getting sucked in and wrung out a few times was just a bonus. I actually went there, after living in a few different cities, in a few different countries, with a completely open mind and buying into some of the hype before I got there and gave it a completely fair shake. My jaw got very tired of dropping and I almost scratched my hair out slowly due to all of the confusing contemplation. As far as the dope, granted, a lot of people are NOT stoned however they speak, and act, like they are. Interesting. Oh wait, another thought here… as an avid cyclist it was THE worst cycling city I’ve ever been to in the world. The cars are hostile to them, the roads are terrible, and, oh, this part is hilarious, the cyclists themselves gather on a regular basis and intentionally slow down traffic all over the city to prove some point. Now THAT’S BC intelligence. It simply causes more hostility towards the bicycles. Almost scratched my scalp raw on that one. Oh shoot, wait, something else popped into my small mind. Business meetings. A lot of people, in their suits, act like hosers and are always late. It is astounding. I knew dozens of acquaintances and peers from other REAL business markets that were absolutely disgusted and pulled out of Vancouver because of it. It’s a joke. Want summore????? I’m bored. Done. (but there’s more of course)

As for your comment about supply and demand ~ supply due to never ending greed, like elsewhere, and demand due to absolute stupidity, like elsewhere, except, and I can say this from observing the mentality there formally, most buyers are just stroking their own, um, pelts to brag to their neighbours. Oh shoot, that’s another thing that was absolutely phenomenal ~ neighbours totally ignore each other, well, in my semi-posh neighbourhood, ie. Arbutus, on the edge of super posh Shaughnessy. I was the only person who spoke to others because I thought it was seriously f’d up. Can’t live like that….and then there’s the rain….. and the bars on the basement windows that were totally necessary on every home. Wanna meet up stare each other down about the truth buddy?

I ran. I shut down both companies and came to a real city with friendly people and crime that is frankly hard to find as a citizen living in their home or getting out and about around town. I will never, ever live in a city where every time I either leave my car (locked of course but that is irrelevant) or when I leave my home (locked of course) I have to worry about what may be gone when I get back.

Toronto has friendly people, no such ridiculous worries, much nicer weather, (right, freezing in BC in the winter, below zero for months, another myth I’m sick of is that it is somehow pleasant there, gag), one of the best business climates in the world, people are on time for meetings, you know, out of respect for each other’s time, and citizens here don’t go around bragging about this city. They are even friendly to people from BC. No haters, like in BC. That is another absolutely disgusting thing about that place.

Right, used car market. So many deceitful people. A racket. Just a racket. Ah, and you can drive your vehicle with a bumper hanging on the ground. No rules. Nice. Oh wait, and the emission test scams that the government knows all about but lets happen anyway. That was a treat. ; ) Cough, cough. No one would have the nerve here, nor would they get away with it. There are chop shops (just for exhaust swap outs) all over the place. All classes of people engage in it…cuz…..they are BC’ers. No scruples, manners, no concern for the environment and too cheap to fix the problem permanently in their vehicles. Probably protesting the previous Saturday for some cause on their pillllllls.

Geez D.A., don’t get me started. I might have to talk about it all, well, most of it. We haven’t got time for it all.

p.s. There are pockets all over the US, including Arizona, another place that I have lived, where real estate is appreciating, not depreciating. I guess you’re into that ‘ol MSM. I thought you were smarter than that. (not)

p.p.s. I met a few good people there, but good people are everywhere. Just nowhere as rare as in BC.

#134 Mtl RE Observations on 10.23.10 at 5:44 pm

#50 – C – “So for those guys with girlfriends/fiancees/wives with house lust, just be patient and back it up with BASIC 3rd party info.”

========

I’m proud to say that I, as the wife, was the one who initiated the sale of our condo based on all of the reading I had done since the fall of 2008. Our condo had just been put on the market when I discovered Garth’s blog. Reading this blog every day helped to get me through the process because every so often I would have doubts whether we were doing the right thing. Wanting to own a home of one’s own speaks to the need of wanting to feel secure. And that’s why, in my opinion, most women are so adamant about owning. But, as Garth has been pointing out all along, that security blanket will be ripped away from many people in the months and years to come, when they their homes are worth less than what they paid for and that owning has become a debt trap.

Guys, encourage your girlfiends / fiancées / wives to read Garth’s blog every day !!!

==========

#41 – Out! – “Tough managing the wife though. She thinks renting means I’m planning to leave her.”

=======

It did cross my mind that no longer co-owning presents such opportunity. I guess it’s that security feeling thingie again. Thankfully we have a pretty darned strong relationship.

#135 Hiteclowtec on 10.23.10 at 6:13 pm

#126 miketheengineer

P.S. Loblaws has “Habitant” Cans of Soup on sale this week for a $1 a can.
————————————————————
That`s commodity investing made easy. I had loaded up the truck in the spring, on your advice, for the summer on the moose pasture. The food prices up north were expensive and fresh stuff rare. I saved a bundle of $. Thanks !

#136 jess on 10.23.10 at 6:23 pm

More confusion

Wednesday, October 20, 2010
Foreclosure Expert Confirms Mortgages Pledged Multiple Times, Not Actually Securitized, Document Problem Is Really a System of “Push-Button Fraud”

http://www.washingtonsblog.com/2010/10/foreclosure-expert-confirms-mortgages.html

=
70% of all trades are held for 11 seconds …how is that supply and demand?
http://georgewashington2.blogspot.com/2010/10/70-of-all-stock-market-trades-are-held.html
==========

#137 Devil's Advocate on 10.23.10 at 6:34 pm

Just because were not over bidding now doesn’t mean it’s a buying opportunity. LOL You just don’t want to believe were in a bubble and the worst is yet to come. You want the party to just keep on going. You want to step right back up to that housing market wheel of fortune that low rates are spinning and win another hand. To funny! #123 Ben

Ben, Ben, Ben, you don’t understand my young naive friend. This is not about you it’s about me… all about me. That being said you clearly haven’t a clue about me. I certainly don’t want the party to keep going. Hell I’ve been waiting and hoping for it to end now for a good solid six years. Step right back up to the housing market wheel of fortune? Hell young Ben I never left it in the first place.

I don’t expect you or anyone else to take my advice. In fact I would rather you did not as for you to do so would mean that I would then share the coming fruits of those opportunities with you. Should you not heed my advice then those fruits will be all the more plentiful for me and mine. Oh you will belly up to the bar though Ben, of that you can be sure… just not at the right time for you, But rest assured young Ben, for me and mine your timing will be oh so predictable.

Really, we don’t give a rat’s ass about you. Hell we don’t even know you. Believe what you want to believe and I will what I choose to. Ya pay’s yer money and ya takes yer chance. It’s your dime young Ben. You’ll hand it over to me and mine in due time.

#138 Torquemada on 10.23.10 at 6:49 pm

Devil’s Advocate on 10.23.10 at 5:08 pm

Exactly! Am I reading you wrong or is this a case of “Boo hoo… they won’t let me play in their sandbox”? What do you think, we’re a public service?

No, I’m in complete agreement with you DA. Realtors do not provide the public with any service.

#139 Devore on 10.23.10 at 6:50 pm

#85 Devil’s Advocate

Interesting stuff… very interesting

Even more interesting is the change in YoY sales.

#140 Ben on 10.23.10 at 6:51 pm

#137 Devil’s Advocate

Your a babbling idiot.

#141 Another Albertan on 10.23.10 at 6:53 pm

#127/Devil:

You’re reading me wrong. Pop a Ritalin. Not everyone is out to pick a fight. I’ve got more productive things to do with my time. I do suspect that a number of readers will appreciate that you essentially admitted that the deck is stacked against them more than they might care to believe.

The fact of the matter is that there is a great deal of information asymmetry in the real estate and financial worlds. I don’t believe this point is up for debate. The RE associations and the banks have access to all the raw data. The REAs only have the initial transaction data (a.k.a. point-in-time data). The banks will have that, plus all the on-going financials of the buyers and sellers. Realtors likely won’t even have access to the raw transaction data in order to do a statistical analysis. They’d basically have to hand-extract and correlate. By the time the data is washed through to consumers, it’s close to functionally useless. The net effect is that buy/sell decisions are heavily affected by what’s known as “bounded rationality”.

I’m not going to belabor anyone from pursuing opportunities to make (or, conversely, save) money. Sellers can list their wares at whatever price they want. Middlemen can use whatever techniques they want to create a market. Buyers should use every opportunity to glean new data to make their purchases as low-priced, high quality, and efficient as possible. It is foolish, though, for anyone to believe that all market participants are playing with equal hands of playing cards.

Everyone else’s mileage may vary.

#142 kitchener1 on 10.23.10 at 6:53 pm

See that part about Garth tracking 11 diff indexs or indicators regarding the market, this is what anayslts do.

I also track a few different indexs regarding RE but some are very informal (ie friends in the business). Things are not good here in Southwestern Ontario, more specifically GTA.

Mortgage apps are trending down, down like before the housing crash of 08

Listings are down and so are sales, imagine how bad things would look if listings were the same as before with these sales numbers

Interest rates have dropped and nobody even noticed.

Lower priced homes are not selling, meaning that in a very short time- few months, sales will take a bigger hit as there will be an huge decrease in move up buyers.

Thats what RE agents will not tell you, a decline is sales volume we have been seeing is much much worse for their business then the increase in average sales price, every sale is in effect really 3-4 sales factord over 3-4 months, people sell starter homes to move, people with middle homes move up and people downsize as well starting the loop all over.

No sales at the low end or even the condo end of the market means that things are about too look very gloomy.

Just look at what F and Carney are saying, these guy see metrics that we will never ever see in the public and they are very worried. These folks are supposed to be the ones selling the economy to the world and listen to their words. Not good.

#143 Devore on 10.23.10 at 7:00 pm

Garth, no matter what pictures you post, someone will get offended. Way too much political correctness out there. Just stick to puppies, kittens and bears, but only the cute and fluffy ones.

But on another note, do you think if I wrote a WordPress plug in to automatically condense DA’s two dozen daily posts into one, would you run it?

#144 Nostradamus Le Mad Vlad on 10.23.10 at 7:01 pm


#125 miketheengineer — Good to hear from you, and thanks for the link.

You’re right, of course — it won’t be a single event, but a whole series of occurring events, the Gulf of Mexico being one of the first main ones.

These events are designed to put such a strain on ‘authorities’ and those in charge, etc. — it is easy to see where all this heading, and I guess there is no real end until the whole garbage can is emptied (we’re in the garbage can).

Anyway, keep in good health!
*
Foreclosuregate Well, isn’t this interesting!

10:19 Clip Other than terrorism, the US is also exporting its depression to China. No word on whether China wants it!

Avoiding Timmy at all costs.

Explaining the Fed “It’s not really federal. Nor are there reserves. (Not many, anyway.)”

Notice it says ‘the biggest banks’, it says nothing about the medium to small banks, a lot of which will probably be gone by next year. Hey, that’s only a few months away!

A war with China would also include a war with Russia, South America and anywhere else the US can create new outlets. Anything to hide the simple fact they’re broke and can’t pay their bills.

Coke — The Original Kool-Aid Drink a barrel of GoM oil instead!

Af’stan “It is interesting to note that under the rule of the Taliban, opium poppy production was pretty much eradicated. The only people “winning” in Afghanistan are the drug lords, and the defense contractors providing mercenaries, materials, and logistics, and that’s a pretty damned depressing, but honest assessment, almost one decade in.” wrh.com. This is what the CPC pays a billion plus for each month, and we get to pick up the tab?
Exporting GC to far-flung New Jersey and points beyond.

Don’t play with fire!

G20 “That is a very subtle message that the G20 has decided that the United States is in decline in the world economic arena.” wrh.com.

Politics “Memo to President Obama: there is no bloody recovery to put into jeopardy!” wrh.com. Has any thought been given to Dinky cars being made the new currency?

3:53 clip “Did the first domino just fall in France?” wrh.com.

#145 Devil's Advocate on 10.23.10 at 7:03 pm

#133 Real Estate Realist

Wow, dems some mighty fine credentials… I sure do got egg on ma face. Let me tell ya a bit about myaself sailor boy… man…

I am one hot lookin’ blonde babe. Ya I ain’t so smart but boy do I got a body on me. Legs all the way up to here. One healthy rack. No it ain’t real but it is PERFECT. I wish you could see me Mr. Real Estate Realist… I am one hot chickie poo. You’d like a piece of me you just know that…

Ain’t the internet grand? we can be anyone we wanna be.

#146 Devil's Advocate on 10.23.10 at 7:14 pm

#133 Real Estate Realist

Dude… you got one big assed chip on your shoulder. You’d best do something about that attitude because until you do… every place for you is going to suck big time.

Really… we get what we deserve. What goes around comes around. Clearly you’ve been dealing some serious toxic shit. Some of your stories? Where you been livin, under the south end of the Granville Street Bridge?

#147 Devil's Advocate on 10.23.10 at 7:23 pm

But on another note, do you think if I wrote a WordPress plug in to automatically condense DA’s two dozen daily posts into one, would you run it? #143 Devore

Come on now… you know you love it and would (will) miss me when I’m gone. I’m the guy you love to hate… but I make you think… there is a dark side you know… it might even be, much to your surprise, the one you are on.

http://tinyurl.com/nr8449 watch, think, which is you?

#148 Patz on 10.23.10 at 7:32 pm

#80 Trapper
“We’re locked into a listing agreement with a realtor that keeps on suggesting we drop our price until the house is sold. We want him to share the pain by dropping his commission or cancel our listing.

He won’t do either…what can we do to get out of this depleting standoff?”

First of all realize that the longer you wait the more you’ll have to drop your price. Two, what do you mean you can’t cancel the agreement? If your agreement prevents you from listing with another agent for the duration of your present listing then sell it yourself. FSBO.

List it on Craigslist (in the real estate section, not the erotic—though you might get more views there). Take nice but accurate pictures. AND advertise that you will pay commission (suggest 2.5%) to any agent who brings you a buyer. Above all be realistic about your price. Most FSBOs unfortunately are greedy and want to pocket the entire commission savings. Remember the buyer expects a deal too. And fer God’s sake get a decent lawn/for sale sign—not one of those handwritten marker jobs.

Let me know if you’re successful and I will send my consulting bill.

#149 T.O. Bubble Boy on 10.23.10 at 8:03 pm

Another (anecdotal) story to prove that the market is on its last legs in Toronto:

Walking around a midtown Toronto neighbourhood today, I see a young couple — likely late twenties — walking out from viewing a $800,000 semi-detached house.

Their realtor is shuffling them along to another listing, probably this $810,000 townhouse and/or this $860,000 condo townhouse.

Who knows, maybe they even continued down the street to this $1.25M semi-detached McMansion.

Anyway, the point of my story: how on earth is a late-twenties couple searching for $800k-$900k homes?!?!? Are these what are considered “starter homes” in Toronto now?

Let’s go with the lowest of these listings, which is $799,999.

Even if this couple somehow saved $80,000 (10% down), that would still leave a $720,000 mortgage. At a super-low 3% rate w/ 25-year amortization, this is over $3400/month just for the mortgage payment… probably over $4000/month once property taxes and other goodies are thrown in.

Even the CMHC says that you’d need over $12,000 gross income per month ($144,000/year salary) with zero debt to buy this — and that is using the CMHC’s “what’s my maximum mortgage” calculator! (i.e. this is where CMHC states that you’ll be at the brink of being held hostage by your mortgage)

So, unless this couple makes a solid $200,000 or more in annual income, they really shouldn’t be looking any of these $800,000-$900,000 properties.

But – this is what the real estate market has become: no one believes in starter homes anymore… twenty-somethings wearing baggy jeans and baseball hats walk into $800,000 homes thinking that it is “normal” for them to be maxing out on a mortgage and becoming enslaved to a house that even their parents can’t afford.

This is how the average price for a detached house in Toronto (416 area code) hit $734k in the first half of October… it has become “normal” to be maxed out, and “normal” for young couples still just starting out to be shopping for homes that their parents couldn’t dream of buying.

#150 john m on 10.23.10 at 8:13 pm

Thanks for your blog Garth..your honesty is refreshing!…your book “after the crash’ seems more appropriate every day IMO.

#151 squidly77 on 10.23.10 at 8:37 pm

Devils Advocate

Your certifiable man, relax, go outside and get some air, not everyone is out to get you.

The same paranoia hit a Calgary realtor recently, he had to shutter his blog.

#152 squidly77 on 10.23.10 at 8:41 pm

The said Calgary realtor still visits my blog simply to vent his anger, swearing and cussing is now all the poor old guy has left. – Don’t be him.

#153 S.B. on 10.23.10 at 8:42 pm

#132 SpaceMonkey – well spotted. Most of the agents are narcissistic con men/women. They plaster their advertising with larger-than-life self renditions and names. We have been conned, North America. Take a stand and refuse to become a Greater Fool.

Never forget, in the economic war WE are the targets. The agents are “just following orders” to always increase production, in return for a pat on the back at the weekly meeting.

#154 Devil's Advocate on 10.23.10 at 8:48 pm

First of all realize that the longer you wait the more you’ll have to drop your price. Two, what do you mean you can’t cancel the agreement? If your agreement prevents you from listing with another agent for the duration of your present listing then sell it yourself. FSBO.
List it on Craigslist (in the real estate section, not the erotic—though you might get more views there). Take nice but accurate pictures. AND advertise that you will pay commission (suggest 2.5%) to any agent who brings you a buyer. Above all be realistic about your price. Most FSBOs unfortunately are greedy and want to pocket the entire commission savings. Remember the buyer expects a deal too. And fer God’s sake get a decent lawn/for sale sign—not one of those handwritten marker jobs.
#148 Patz

Yup… that’s all there is to it… Just as easy as that. Except the commission part. Why pay a commission… You don’t want to deal with those low life REALWHORES… plenty of greater fools out there. Get a big bright sign out there with real nice colours that will do it. The right sign will make all the difference in the world. Craigslist… perfect… that’s where all the buyers shop. Accurate pictures of all your nice stuff… make sure you catch the cat and dog people are suckers for those cuddly creatures and want to know your home is pet friendly. And put out some ash trays so they don’t have to put their butts out on your linoleum, formica or shag carpet.

Last hint… Bake some brownies, nudge, nudge, wink, wink… ;-)

#155 Milhous Plumbers on 10.23.10 at 8:53 pm

This is an old pony trick – Muir’s rent-a-mouth for the BC REA.
Your gonna get it everywhere you go from these types of people Garth. They don’t acknowledge economics or facts. To them its a tug of war for the delusional hearts & minds of the young and gullible.

#156 Debtisforever on 10.23.10 at 9:02 pm

How anyone, including Cameron Muir can laugh that a real estate meltdown won’t happen here is outrageous. After all, it happened in the US, and millions of people who own real estate that is now underwater there are certainly not laughing. An American in Muir’s audience would probably stare at him in disbelief. Then take out a gun. Americans believed the “experts” too, that “real estate never goes down.” Look where that got them.

#157 Brass Balls on 10.23.10 at 9:30 pm

#151 Squidly, how’s this for paranoia(all your quotes)

From 2010:
Financial Armageddon is very near.
Know where your monies at.
The End Is Nigh.
She’s gonna blow soon
Prepare to dive greedy bastards, prepare to dive, shes going down.
2008:
the unwinding starts now
the great unwinding is virtually at hand
it realy is coming to an end
its done
its all falling apart now
it will happen
a total and complete collapse
there is no recovery
house price crash is now clearly dead ahead
its going right back to $20 bucks a barrell
and houses are going back to $180,000
the canadian banks will die
and die fast
a collapse is imminent
the great unwinding is upon us now
oh did i forget to mention..
tsx to 3000
dow to 4000
oil @ $20 bbl
sfh avg price $160,000
15% unemployment
negative gdp for 8+ qtrs
eventual high interest rates 10%+
wiping out all remaining mortgage owners
2007:
the bottom is about to fall out
and i mean fall out
as far as prices go there is no bottom
my prediction for an avg sfh is $160,000 or less..in a very short time
shes all over now
Its too late now to exit
we are in a massive bubble
a bubble so big that it will ruin peoples entire lives
yup they will be screwed for life
its gonna blow soon
bad bad and dark and shady sh!t is about to hit the fan
very dark and very bad

#158 Junius on 10.23.10 at 9:31 pm

#120 Devil’s Advocate,

The important thing to remember is that Keyne’s famous saying that “markets can stay irrational longer than they can stay solvent” cuts both ways. It works on the way down just as well as on the way up.

The tricky part about calling for the decline and bottom at this time is we don’t know when interest rates will go back up. We know they will but not when. When they do they will bring the crash in prices that will start the journey towards the bottom.

I thought rates would start pushing up this year however I was wrong. I was wrong because the economy is worse than I thought – and I thought it was pretty bad then. Clearly I was optimistic.

The point is that there is very little to guide us in guessing the next upward turn in the market. It might be 5-7 years but I wouldn’t bank on it. We are just as likely to be in a melt period for much of the next year and then a long, slow decline for a few more years until the economy picks up. Then interest rates rise and send the market down for a decade.

The only thing we know is that we are at the top of the cycle right now. Bottom is a long, long time from now and an economy away.

#159 OttawaMike on 10.23.10 at 9:37 pm

148 Patz
It works listing on Craigslist and Kijiji.
A coworker recently sold a flip house about an hour south of here.
After zero showings with the agent; owner dropped the price 10k to just under 200k then internet advertised it himself.
2 showings via Kijiji and a sale within 3 days.

What’s that you ask??
Of course Agent Do Nothing still collected his commission.

#160 Brass Balls on 10.23.10 at 9:44 pm

Squidly, why do you get so upset over a realtor who’s not even working? Even you said he’s run away. BTW, is this the blog you are scared of mentioning?

http://www.bobtruman.com/blogs/bob_truman/archive/2010/10/05/that-is-it-for-this-year.aspx

#161 realpaul on 10.23.10 at 9:51 pm

Garth…the pimps that still cheelead for the real estate industry are not flogging facts..they are desperatley flogging inventory. They hope to quietly keep this ship afloat until they are cashed out…little do they care how many they hang out to dry when its found there was too few lifeboats for ordinary passengers on the good ship Cana-tanic. The ads have been polished and positive..belying the statements of fact from the univested commentators and experts. Strange that only the voices that are paid for by the pimps are invited to ‘speak’ at these public forums which serve up gentle remonstration of the nay sayers and boogey men like yourself.

Every single one of the ‘experts’ appearing on heavy rotation are receiving benefit directly from the real estate industry…..credit union economists selling mortgages….real estate board spokesman….developer reps…..hmmmmmmmm would a fair and balanced media be looking to present a fair and balanced range of opinion? Apparently…the glass will remain half full…….unt you vill follow orderz ya !!!!

#162 Devil's Advocate on 10.23.10 at 9:53 pm

Devils Advocate; Your certifiable man, relax, go outside and get some air, not everyone is out to get you. #151 squidly77

Au contraire squidy, it is I who is out to get thee… remember I am a REALWHORE trawling for greater fools. Real estate is a lot like fishin’ ;-)

#163 Taxpayer like everyone else on 10.23.10 at 10:07 pm

133 RER

“I logged 4 years there, as an Executive in the
finance/real estate world”

And we’re supposed to believe anything after that?

#164 Devore on 10.23.10 at 10:07 pm

#147 Devil’s Advocate

Come on now… you know you love it and would (will) miss me when I’m gone. I’m the guy you love to hate… but I make you think… there is a dark side you know… it might even be, much to your surprise, the one you are on.

You give yourself too much credit. I am merely annoyed that every day I need to skip past more and more of your disjointed, scattered, flow of consciousness-like postings.

Here’s a hint: chill out. Go out for a walk outside in the greatest place on earth. Get your thoughts together. Start writing. Proof read. Check your email. Check out new listings in the area. Update facebook status. Proof read again. Press submit. This would easily cut down your volume by 50% or more, and maybe give people a reason at actually read your knee-jerk scribblings.

#165 Ben on 10.23.10 at 10:16 pm

#149 T.O. Bubble Boy

Unbelievable that boxes like this sell for such huge amounts. That’s absolute ludicrous! It’s stupid!

#166 THEBESTPLACEONEARTH on 10.23.10 at 10:42 pm

Real Estate Realist
***
Your colours shows so true like all renters. Mid 40’s, divorced,sold way way to early. Then you started listening to fools like Shiller that the market was overpriced and you wanted to get back in. Following year up 20k, way way to much of a gain you thought. You were going to buy the following year. then up 40%. You thought this was insane. You started looking for negatives like crime and rain. The following year it was up another 40% and you were priced out of the market FOREVER. You screwed up not buying. Tough medicine. Will be thinking of you enjoying a Big Mac on Yonge Street when it is minus 40 out while I am shoeing honey bees out of my house in the dead of winter

#167 BrianT on 10.23.10 at 10:43 pm

Great post about the poisoned well that the US financial system has become http://www.zerohedge.com/article/gues-post-us-financial-markets-well-has-been-poisoned-anger-honest-part-ii

#168 Victorianna on 10.23.10 at 10:48 pm

Hey Garth, even on the local bear blog in Victoria the commenters don’t really think it’s going to happen here. Today there was a post playing a “game” of “what would you offer” but to “play” you had to put in “real” offers, not “50% low balls.” Sorry, but any real offer I would make today in Victoria would be just that, 50% of asking. That’s my real offer. If it’s not real enough for sellers, I’ll just continue to rent for 3% of asking prices on comparable houses, and save my money. No problem.

#169 Utopia on 10.23.10 at 10:54 pm

After re-reading todays article for the second time I am struck by the comments that Mr Cameron Muir made during his address at his paid engagement that ridiculed Garth Turner, this blog (and it’s adherants) and the simple facts surrounding the current market declines and growing losses affecting all aspects of real estate across the nation (realtor jobs included amongst those losses).

He must be feeling very threatened indeed.

Still, the central message from this site and the masseage of it’s many followers has still not gotten out to the wider public. Has still not reached a wider audience.

Not to anywhere near the numbers of people who need to know about the tremendous and evolving risks of investing in Canadian real estate at this time.

Both Toronto’s and Vancouver’s numbers are abysmal of course, but the whole country is on track to be invested in mortgage slavery for life unless they get their heads screwed on and soon.

When Mark Carney, our esteemed Finance Minister, the TD, Scotia, BMO and Royal banks all simultaneously warn of impending gloom in our economy, employment, the dollar and real estate plus the very high indebtedness of all Canadians then….

WE MUST ALL SIT UP AND START REALLY LISTENING!!!!!

And that short list of names (above) who have research departments and staff to advise them of the impending dangers only represent a few of the qualified voices we need to now hear.

We can be sure of one thing. They are not all wrong at the same time.

Next: Add to the above list, warnings from The Conference Board of Canada, one of the worlds premier economists (none other than David Rosenberg), the best of our business reporters from the major media and the respected opinions from The Certified General Accounting Association of Canada amongst many others and we have nothing short of a very concerned quorum of respected individuals and groups.

The word is out across the nation and yet the majority of Canadians are still not listening. Debt continues to rise! Housing prices also continue to go up on average despite huge declines in sales volumes in key centers.

Public real estate humpers and pumpers like Cameron Muir need to be shut down and the best way to do that is to get the word out. To publicize the truth. To talk to everyone you know, you love and you care about.

I would encourage all blog-dawgs to write to they’re friends and to they’re families and to pass along the message of the tremendous risks posed by new purchases of residential real estate at this time.

Point them to this blog for starters, to “CanadaBubble.com”, to comments by the Governor of the Bank of Canada and to the many well researched studies undertaken over the past 6 months.

Use the phone, E-mail, Text, Face-Book, Twitter…(or visit in person even!) Just get the word out.

Housing is in trouble. You can’t help everyone but you can advise your own family and friends. They won’t take the news well but that is too bad. It is time they got the message.

Better now than never. If you are tribal it is no benefit to you that your family and friends are swimming in debt and weakened on the day you actually need them for help. Broke is broke. Strong friends are better than weak friends. Do the right thing.

Meanwhile, Mr Muir should be ashamed of the lies he tells and of the manipulations of R/E statistical data. He should hang his head low for the lack of honesty he exhibits as he shamelessly directs sheep to the slaughter and mocks the truth while he collects a fat payoff without conscience.

So pathetic! So shut him down. Once and for all. With facts.

You only need the truth to change history.

#170 Utopia on 10.23.10 at 11:06 pm

I forgot to add…….

Do it NOW while it is still fresh in your mind.

#171 Nostradamus Le Mad Vlad on 10.23.10 at 11:39 pm


Deathbed Confessions “Watch Russia and China; the globalists plan to use China and Russia to strangle America and Europe and eventually reduce both to third-world status.” Hence all the riots, strikes, austerity measures (coming here soon) and the aforesaid events. That’s why this garbagecan of a planet needs to be shaken thoroughly and emptied out.

Hmmm. From the final para.: “It is also highly suspicious that the President will be on his longest overseas trip and out of the country when this timeframe ‘goes hot’. They know something is coming.”

Impeachment The first m$m rag to call for Obama’s impeachment. Also this — “The Philippine Core; OPERATES AS A “MIRROR” CIA CONTRACTOR, contracted to “do banking as U.S. Federal Corporations (Fed. R.).” It really is like swimming in molasses!

Wayne Rooney’s deal During a week when half a million public servants were told their jobs will soon be gone, these are some figures. Admittedly, he is outstanding at what he does, but in these weird times, I’m not sure that his new deal reflects reality. The Glazer family, who own AIG and others, placed their 750 million pound debt straight on to United’s shoulders. His actual wage is 180 thousand pounds per week, the remainder are commercial endorsements.

In light of the above, this surprise. Will Lady GaGa be able to bail the Queen out? Stay tuned! Probably another in the series of unexpected ‘events’, and there will be plenty more coming. Foreclosuregate, riots in Europe, the GoM and many others are still to come.

Neil Young’s Cortez The Killer covered nicely by a mix of musicians.

Link in. Is this the new version of Ring-Around-The-Collar? Cycles It’s not just earth, this whole Milky Way / Solar System is flip-flopping!

#172 Captain Jack on 10.23.10 at 11:53 pm

#133 Real Estate Realist…love it! This city sucks in exactly how you have perfectly described it! Thank you.

#173 betamax on 10.24.10 at 12:07 am

from the Globe & Mail: “The long shadow over Canada’s housing market”

http://www.theglobeandmail.com/report-on-business/economy/housing/the-long-shadow-over-canadas-housing-market/article1769753/

Pertinent quote: “Canada doesn’t need a U.S.-style problem to have a problem,” said Alexandre Pestov, a market analyst at Three Bears Research in Toronto. “A Canadian-style issue will do just fine.”

#174 Real Estate Realist on 10.24.10 at 12:38 am

#145/#146 – Devil’s Advocate:

Wow, you are a piece of work, assuming that I’m a man. Love it! You actually just described ME except I’m kinda smart and my rack is real.

#146 – Did I fail to mention my GOOD luck? It far outweighed any bad luck. I’m good thanks.
; ) As you say, what goes around comes around, and we get what we deserve. And no attitude here, just sick of the bs on here about Vancouver. It should be a crime to misrepresent so deeply, and it’s been going on for many years. Someone had to put you and others on here spewing the same garbage in their place. I guess it was your lucky day. As for where I lived, I suppose you could read the post again for the highly specific descriptions on the subject in both Victoria and Vancouver. You must have missed it.

Ah, one more thing ~ BC was the only place I’ve ever lived that was a disappointment. Loved everywhere else. Lesson learned, and it was a big one.

#175 Shanghaijed on 10.24.10 at 12:45 am

I see the Globe has hired you

http://www.theglobeandmail.com/report-on-business/economy/housing/the-long-shadow-over-canadas-housing-market/article1769753/comments/

#176 jimmy on 10.24.10 at 3:25 am

Is there such a thing as a self directed insurance account? I would like to invest in exchange funds and stocks but inside life insurance product so my investments are creditor protected.

#177 David B on 10.24.10 at 7:48 am

Hello Canada are the lights on yet?

A Las Vegas estate that had been quietly marketed for $60 million has officially listed for $37.5 million.

The Boca Raton, Fla., home of former Tyco chief executive Dennis Kozlowski—originally listed for $24.9 million in early 2009, then cut to $22.9 million—is available for $19.5 million.

So when the big boys/girls start loosing this kinda change what do you all think? Let the middle class win in the Real Estate.

#178 Devil's Advocate on 10.24.10 at 8:30 am

INTERESTING STATS FOR YOU

Here’s some interesting statistics if you can get your head around the true ramifications of them. First a little background: Fall 2007 could be accurately pointed to as the beginning of the very peak of our most recent real estate markets. It was the Fall of 2007 when unit volume sales crested. Price follows volume and price subsequently crested in the Spring of 2008. But it is volume we want to look at here.

For the first half of October 2010 there were 30% fewer sales than there were for the same period of 2007. In the first half of October 2010 there were 347% more listings which did not sell than there were in the first half of October 2007. For the first half of October 2010 it apparently took 163% longer for listings to achieve a successful sale than it did in the first half of October 2007 (an average 93 Days on Market in 2010 vs 58 in 2007). But the Days on Market is really an inaccurate measurement as many of the previous months expired listings would have relisted to a successful sales conclusion although those previous Days on Market were not included in their more recent successful listing term.

Now between those two periods of comparison the inventory of properties listed for sale has swelled by 147% and that does, to a degree, mitigate some of startling fact of the preceding statistics. Still the growth rate of expirations (listings which never sell under their current listing agreement) is more than two fold that of the increase in new listing inventory.

What does it mean? Quite simply that sellers have not nearly yet gotten their heads around the fact that the market is capitulating. There are too many sellers on the market with lofty price expectation.

However, my experience is that inordinately high inventory levels will subside long before price gives in as a good number of those sellers are simply testing the waters and do not need to sell. Once inventories abate price will stabilize but until then prices will be under pressure to fall as those sellers who must sell must compete with those who don’t need to. All things being equal there is only one way a motivated seller can compete amid so much competition and that is on price. Until inventories decrease prices will continue to fall, but don’t expect that fall to be fast and furiously nor for it to last long.

Based on the market dynamics I see, 2011 will be a bottoming year. Inventories will diminish significantly as those sellers who are in-as-much just “testing” the market and will sell only if their loft expectations are met leave after their listing expires thus sending to them a clear message that “no your home is NOT worth that much”. In the meantime serious sellers will have dropped their prices by 10% piquing the interest of cautious buyers currently sitting on the fence. Were it not for the fundamental failings in our general economy the intersecting of these two events will new breath life back into the markets once again but new life with a cautious edge as the memory of 2008 lingers.\

What is scary is that if our governments were to pour massive additional new stimulus dollars into the economy that new life would grow exuberant like the Incredible Hulk to a Mother of all Bubbles poised to pop louder than that our neighbours to the south ever did experience.

I don’t fear the markets… I fear the irresponsible monetary interference in the markets by our reckless short term thinking governments, they who got us in this mess in the first place.

#179 Got A Watch on 10.24.10 at 8:45 am

pressed for time? too many comments? here’s the no-cost solution – just skip every comment from “Devils Advocate” and every comment that replies to that name. Not like he ever says anything worth reading anyway.

Easy peasy, use the time in a more productive fashion. Good time management here is a no brainer.

——————————————————-

Here’s some strong dis-inflation (that’s a word used by those who can’t pronounce deflation without breaking out in hives): US Home Prices Double Dip

“Clear Capital™ has issued a special press release report on home prices that shows a Sudden and Dramatic Drop in U.S. Home Prices…

‘TRUCKEE, Calif. – Oct. 22, 2010 – Clear Capital (www.clearcapital.com), is issuing this special alert on a dramatic change observed in U.S. home prices.

“Clear Capital’s latest data shows even more pronounced price declines than our most recent HDI market report released two weeks ago,” said Dr. Alex Villacorta, senior statistician, Clear Capital. “At the national level, home prices are clearly experiencing a dramatic drop from the tax credit-induced highs, effectively wiping out all of the gains obtained during the flurry of activity just preceding the tax credit expiration.”

This special Clear Capital Home Data Index (HDI) alert shows that national home prices have declined 5.9% in just two months…’ ”

Yes folks, that is -6% almost in TWO MONTHS. Or about -36% per year, give or take (NOT compounded semi-annually not in advance!). That’s a strategic advance in a rearward direction. Collapse sounds rather negative, we don’t want to give anyone the wrong idea here. It’s just growth in a shrinkage sort of way.

If you thought you wanted to buy a house now in the US, why, just wait a year or two, it will be half the present price. And that is not counting in ‘ForeclosureGate’/’MortgageGate’ which is shaping up to be the biggest Bankster melt down in US history.

That is the essence of ‘asset deflation’ – nobody wants to buy it now, as they think it will cost less (maybe a lot less) next year, and the year after… this is deadly poison for a ‘system’ built on ‘growth’. And will have the same effect on the US Bankster mafias – just another reason to collapse, as if they needed any more.

Personally, I would not plan on buying any US property for a couple years at least, just on the title and foreclosure issues – it will take a long time to straighten out that mess. In the mean time, you have really no idea if your title is actually clean, or that the title insurance can be obtained etc etc.

A projection of US real estate prices suggests about -24% decline in prices in less than one year, summer 2010 to spring 2011. That is a crash, not an orderly decline, within a larger Bear market, that has been ongoing since 2007 (most US real estate prices peaked around ’06).

When a Realt(ho)r(TM) tells you “real estate is always a good investment”, well you know which end of the bull he is talking out of. And this happened despite the fact that US citizens can deduct their mortgage payments from income tax, and Trillion$ of ‘stimulus’ and many desperate stick-save attempts. There is no saving a sinking Titanic.

#180 Devil's Advocate on 10.24.10 at 8:53 am

#174 Real Estate Realist

Proof again that you can be anything you want on the internet. You are the fat bald naked guy with thick hair on

DELETED. You can do better than this. — Garth

#181 Devil's Advocate on 10.24.10 at 8:57 am

#172 Captain Jack

#174 Real Estate Realist

You two should hook up. Exchange numbers… have kids… on second thought scrap the kid thing the last thing we need is you propagating.

The point of this site is to discuss real estate, the economy and financial strategies in a manner than benefits all. Comments like this are an utter waste of time. Any similar will be struck. — Garth

#182 Moneta on 10.24.10 at 9:02 am

Real Estate Realist:

You shouldn’t even bother answering the jerks. There’s a fine bunch here… Canada is such a special place.

#183 Devil's Advocate on 10.24.10 at 9:03 am

your knee-jerk scribblings. #164 Devore

I prefer to think of it as “shooting from the hip”… and I consider myself a rather good shot. ;-)

#184 grantmi on 10.24.10 at 9:04 am

#39 TheBestPlaceOnEarth on 10.23.10 at 1:49 am

Cameron Muir is one of the defacto experts of BC Real Estate. Following his genius investors have millions while fool Shiller south of the border should be sued by every Canadian and Non Canadian potential homeowner who listened to his shill and doom and gloom nonsense from 5 years ago.

Bestplaceonearth!

What the hell you talking about! Are you daft!

Shiller called this US home price apocalypse CORRECTLY!!!!

and he’s calling for ANOTHER 20% drop in the US home prices still to come!

http://bit.ly/cCbQFL

Who’s the Great Fool in this site?????

#185 Devil's Advocate on 10.24.10 at 9:18 am

”The tricky part about calling for the decline and bottom at this time is we don’t know when interest rates will go back up. We know they will but not when. When they do they will bring the crash in prices that will start the journey towards the bottom.” #158 Junius

You are absolutely correct Junius (glad to see you finally gave yourself the respect you deserve and capitalized that lead letter in your moniker) Interest rates are sure to rise at some point – when? who knows for sure? But I do thing we would both agree that will occur sometime well within the next five years.

My point is if you do buy today and lock in your mortgage rate for at least five years you will have secured at least a bottom basement mortgage rate which over that five years should look pretty good against the average. Now consider that you might see the value of the home you bought decrease by 10% in the first year and skid along bottom with nary a further drop nor gain until year 3 when we will have been then 5 years into these economic doldrums. After that 5 years, based on historical trends, It would be reasonable to say that we might see some continued improvement in our economy – no? You would then still have 2 years mortgage left at very likely a most gratifyingly low rate. Over that two years prices ought to rise enough to make up those equity losses in the first year in which you bought not yet at the bottom of the market.

Now you can try time with exact precision the markets but chances are you don’t have such a clear crystal ball. And if you do you are wasting a whole lot of life trying to do so while maintaining residence in that dark dank rented basement suite.

What I am saying is who can for sure say buying a home today will result in such a financial nightmare. Even a first time buyer with only 5.0% down might in 5 years be Even Steven but have lived a more enjoyable life along the way compared to those who NEVER DO ANYTHING BECAUSE IT MIGHT PROVE TO BE THE WRONG THING.

#186 Devil's Advocate on 10.24.10 at 9:26 am

The point of this site is to discuss real estate, the economy and financial strategies in a manner than benefits all. Comments like this are an utter waste of time. Any similar will be struck. — Garth

Duly noted. My apologies, that was one of those rogue shots from the hip

#187 jess on 10.24.10 at 9:26 am

Year over Year nightmare!

Eastlake couple foreclosed upon three times, despite never missing a payment
Published: Sunday, October 17, 2010, 5:00 AM

http://blog.cleveland.com/pdextra/2010/10/willoughby_couple_foreclosed_u.html

#188 Devil's Advocate on 10.24.10 at 9:39 am

To those I have offended on this blog I extend my sincerest apologies.



… Aw who am I kidding. I’m a REALWHORE for crying out loud. Anything I say is going to be considered offensive.

Okay… Listen up… I will not say anything malicious or offensive from here on in regardless of how you might offend me or my “profession”. My participation here will be, as it always has been of the intent, to enlighten the DAWGs through truthful facts and mutual respect.

I invite you to test me on this pledge… go ahead give me your best shot…

Thanks Garth for the subtle kick in the chin.

#189 Devil's Advocate on 10.24.10 at 9:48 am

MYTH #1: That the MLS was developed to market properties to the buying public.

THE TRUTH: The MLS was developed to facilitate the co-operation between agents in the promotion and marketing of their individual listings to one another.

BENEFIT: The property owner, through a co-operating association of REALTORS gains access to a vastly larger market of buyers than they could ever access themselves individually.

#190 Real Estate Realist on 10.24.10 at 10:01 am

#163-Taxpayer: Don’t be so quick to judge the nature of my business. I wasn’t involved in any real estate deals that were IN British Columbia. Every pro knew, even back in the 2 yr period from 04-06 to stay away from investing in that city. You also assumed that residential was my interest, which it was not. As for the Finance aspect, was actually know as a maverick in the industry when I was inside the Bank, doing things for the consumer that hadn’t been done before, then out west the financial aspect of my business had nothing to do with lending. Again, you are too quick to judge. Ask, don’t assume.

#191 Real Estate Realist on 10.24.10 at 10:07 am

#166-TheBestPlaceOnEarth – Actually, I never had any intention of buying real estate in BC, regardless of the level of success in my businesses, and never would buy real estate in BC. Not just for the value vs. quality of living issues, but most million dollar homes are built out of paper mache and cheap framing, something else I know a little about. Then there’s the issue of overvaluing the property due to income ratios. Yes, that’s also relevant.

p.s. Assuming anything about my personal life, or age, is just childish. Grow up.

#192 Real Estate Realist on 10.24.10 at 10:09 am

#172-Captain Jack:

You’re welcome. Thanks for the support.

#193 Devil's Advocate on 10.24.10 at 10:12 am

If you want to be incrementally better: Be competitive. If you want to be exponentially better: Be cooperative.

#194 Alberta Renter on 10.24.10 at 10:27 am

Ok Blog Dogs, I’m looking for some honest help.

This coming February, I have to make a decision about renting or buying in Edmonton. I am being re-located for work.

I have checked out rents for 2BR Condos in the $1000-$1400 range, and their are tons of them. I have also looked at buying, and it seems there are plenty of Condos for sale in the $200,000 – $240,000 that I would consider acceptable.

Now, I have enough saved to put a DP of about 50% and easily carry a $100,000 loan on mortgage but my question is, should I wait another year or boldly march into a property?

I read this blog fairly frequently so I do understand the perils of buying into this market w the risk of rising interest rates, but I am looking for some sound advice from someone that understands the Edmonton Condo market intimately.

Thanks In Advance~!

AR

#195 Blitzkrieg on 10.24.10 at 10:29 am

#176 Jimmy,

No such thing, as risk to the insurer would not be quantifiable with an undiversified portfolio, besides death guarantee funds (seg funds) have a higher MER due to guarantees at death. Best you can do is pick your own funds, but MER’s are 2-3% sometimes higher.

#196 Junius on 10.24.10 at 10:45 am

#185 Devil’s Advocate,

You said, “My point is if you do buy today and lock in your mortgage rate for at least five years you will have secured at least a bottom basement mortgage rate which over that five years should look pretty good against the average.”

Yes, but this is the crux of the problem. What happens in 5 years when you find out the value of your home has dropped 25% or more AND you are renewing at much higher interest rate. This is the negative equity trap that is going to hit many buyers from 2008-2010.

There is no MIGHT here. Property values will decline and interest rates will go up by then. That much I do know.

#197 Junius on 10.24.10 at 10:48 am

#169 Utopia,

Cameron Muir is not better than the moron bulls that come here and denegrate people. You can tell when you are getting in their wheelwell and it hurts.

If they knew they were correct they wouldn’t have to resort to insults and ridicule. However more and more they know they are on shaky ground so they need to try and run down the person because they sure as hell can’t run down their arguments.

#198 yukon don on 10.24.10 at 10:48 am

Update from Penticton after 16 months of living here. The spec buyers are gone , tons of condo, like hundreds sitting empty. Tons of mobile homes were old folks used to line up to buy them sit for years and listings pile up. Tons of small houses on duplex size lots or under 300 houses now on market. Lots of foreclosed properties now hitting real estate guide signs every were. I would like to know the why Kelowna is so much different or is it D.A. . There is a 20 month supply of 400 to 500 grand houses on the market? One house on the lake sold down the road from us , but the price drop was from $1,265,000 to $900,000. Lets be honest here D.A. the market is correcting and those that need to sell must lower prices. The spec buyers who made the market are now gone and trying to get out of rentals. Town house in one development I deliver to every day have dropped from the $220,000 range to asking $189,000 and still not moving? The move is slow , but the prime buying season has passed and I will bet the prices will be even lower next spring and headed one way , down. Real estate moves in cycles , but with the spec buyers gone from the Penticton seen , then with a small middle class and shrinking job market , buying at todays prices would be a very foolish bet. Just take a look at all the listings D.A. , how can you say this is a buyers market? The only listings selling are listening to their agents and are accepting offers way below appraised value.

#199 Sail1 on 10.24.10 at 10:50 am

#149 T.O. Bubble Boy

The funds for the a down payment comes from
the parents or grandparents. If daddy is rich and living in the area, its instinctive to help out the kids.

#200 kitchener1 on 10.24.10 at 10:52 am

Regarding Devils Advocate and Real Estate Realist.

The description of BC and Vanouver by Real estate realist is pretty much dead on and very similar to what I heard from friends and co-workers that actually lived. Right down to the crime and cyclist issues.

Not slamming BC cause for all its fault its still a beautiful place to live but its certainly not the best place on earth.

Seriously, to the BC’ers on this board, start looking at things objectivly, I can find big faults with Toronto as well and I love that city as it has been my home for over 30 years. But its not a world class city or a tier 1 city by any stretch of the imagination.

No need for personal attacks, DA, glad to see you have decided that it is indeed childish, but the vigour in your posts against anyone slamming BC is really telling. I know thats were you live and absolutly beleive it to be the best place on earth, but bring some objectivity to your posts, instead of trying to rile up the dawgs.

#201 Real Estate Realist on 10.24.10 at 10:57 am

#194-Alberta Renter –

RENT. Edmonton is overbuilt. Your balance sheet will not end well if you buy.

And stop looking at “condos” as your potential living quarters, well, unless you want to overpay rent. There are numerous apartments, nice ones, with 2 and 3 bedrooms, for under $1000 in Edmonton.

http://edmonton.en.craigslist.ca/search/apa?query=&srchType=A&minAsk=&maxAsk=1000&bedrooms=2

Get off of the “herd renting” trail. Paying someone’s condo mortgage, and helping out with their maintenance fees, is for suckers. Go talk to the “Mom and Pop” landlords who would love to have you as a tenant.

p.s. Invest that cash in the way that Garth has laid out. Don’t be scared. Be brave, although it’s really just smart.

#202 Another Albertan on 10.24.10 at 11:12 am

“MLS was not directed at the buying public. MLS was directed at realtors. Owners gain access to more potential buyers.”

The key word is “was”. Prior to the Internet Age, the public most certainly did not have access to MLS. Listing books, card and printouts were certainly proprietary. Particularly in the last decade, MLS – or a subset thereof – is definitely targeted at the buying public. If that isn’t the case, those real estate websites have some serious security issues because there’s a lot of private data
leaking out for anyone with a web browser to see.

While historically-correct, the myth-truth-benefit triad is contextually-irrelevant in this age. What it was is not the same as what it became.

Everyone else’s mileage may vary.

#203 Real Estate Realist on 10.24.10 at 11:14 am

#194-Alberta Renter:

I should add that you still may find your condo apt, but for a great price if you look through the ads in that link. Be aware of “too good to be true” ads though, if there are spelling mistakes, and you reply, only to get an email back written in terrible english, asking you to send money. Those scammers are in every city and I saw a couple of them looking through that link.

However, there are still amazing deals. Some that seem too good to be true actually ARE true as well. Don’t rush to judgement. There is no harm in your first enquiry, and then DO NOT do a deal where you don’t meet the landlord and have a face to face transaction. This happens in rentals, but also in all other types of merchandise. They are there because those fools actually exist.

The majority of them are fantastic. Have fun!

#204 Another Albertan on 10.24.10 at 11:15 am

#194 –

Head over to Kevin’s Edmonton Housing Bust website: http://www.edmontonhousingbust.com

Everyone else’s mileage may vary.

#205 Real Estate Realist on 10.24.10 at 11:22 am

#194-Alberta Renter:

Just thought, if you have to get the place from afar, at least have a human on the ground in your place to see the apartment, meet the landlord, and do the transaction on your behalf. Hopefully you know someone there to make sure something is legit on your behalf, ie the place actually exists.

This stuff didn’t used to be a problem, but now thousands of these scammers sit in other countries at their computers day and night and do this full time. Using condos, right up to the luxury level, is just one avenue.

#206 dark sad person on 10.24.10 at 11:34 am

#128 jess on 10.23.10 at 5:11 pm

The House of Representatives passed a bill on Sept. 29 that aims to give President Barack Obama more authority to impose tariffs on almost all imported Chinese goods coming into the country —

House Passes Landmark China Currency Bill 9/30/2010
Today the House of Representatives passed critical legislation to address China’s fundamental undervaluation of its currency by a vote of 348-79. The legislation, H.R. 2378, the Currency Reform for Fair Trade Act, is the first of its kind to pass the House of Representatives and signals a mounting concern among U.S. lawmakers regarding China’s violation of its international obligations

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

The pot calling the kettle black–

Tariffs will kill any hope of stabilization and the US has a history of Protectionism-we do too-only we get Nationalistic-because Canadians always scream for “protection” by Government and they’re only too happy to bring it to us-

eg: all the bitching that goes on here-about G’s pics and how it can all be “imagined” as something else and how terrible-it all is-

Grow up People-please-it’s friggen embarrassing to call you fellow Canadians-
Worry about the “pain” you are allowing and even asking this Government-to inflict on your “kids”
for your own shallow minded-temporary gratification-

anyway-back to the story-

The Smoot Hawley act of 1930 proved beyond any doubt-that it was responsible for sending the World into a depression as all Countries reacted in kind with counter barriers and global trade all but dried up as a result-
It is inevitable i suppose-especially when we have people like Bernanke-who fashions himself as a scholar of the 30’s and through his studies-concluded-stimulus didn’t work because they never gave it enough-so now we are seeing the results of-more-

If you give a monkey enough rope-
He’ll find a way to choke-

Sounds like Ben is getting some of the “Currency manipulator” blame-thrown back at him-by some major players-
Germany has some stroke in this game and they seem to be pushing back hard-
The Germans do not like the EUR and last i read-over 60% want to return to the DM-
Look out if that happens-because Germany has huge Gold reserves and traders will lock the DM to Gold and believe me-that will roil the currency markets and could cause an outright collapse of some-
Of course a strong currency will hurt German exports-but we need to keep in mind-the Germans have not forgotten what a Currency collapse does-
They will “never” go there-they will accept “anything” but that-
So-beware printers-
Germany will win this war-if it comes to that-

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

The Federal Reserve’s push toward easier monetary policy is the “wrong way” to stimulate growth and may amount to a manipulation of the dollar, German Economy Minister Rainer Bruederle said.

Fed Chairman Ben S. Bernanke yesterday gave Group of 20 finance ministers and central bankers meeting in Gyeongju, South Korea an overview of the U.S. central bank’s efforts to jumpstart the world’s largest economy. His strategy, which investors expect will soon include greater asset purchases, drew criticism at the talks, said Bruederle.

http://www.bloomberg.com/news/2010-10-23/germany-says-u-s-federal-reserve-heading-wrong-way-with-monetary-easing.html

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

Germans are sensible people and never participated in the credit orgy-in fact-their RE prices were in decline-throughout out our credit craze-

http://thenewmortgagecompany.files.wordpress.com/2010/07/10-key-charts-price-global-housing-bubble-by-housingstory-net-2.jpg

*************
bit of an antidote-

I communicate on a daily basis-with a young lady from Germany-who contacted me a few years back on a-
{{goldbug}} site ):

She asked me if i would help her understand Economics –and–she “loved” the way i swore (:
Today-she doesn’t need much help-she gets it very well-in fact-she could kick ass on any NA blog site-
But-what I’m most proud of her for-
she learned to swear “perfectly”
She’s currently training as a trader-but she is so practical-she never loses site of common sense-
She works for an IT company-10 hrs/day-
She is grateful-for everything she has and also has a deep appreciation for all the simple things in life and is also deep-into Philosophy-speaks fluent English and can converse in Spanish and French-
Very smart and full of common sense-like most of her Countrymen–

#207 Debt's Dark Embrace on 10.24.10 at 11:34 am

#198 yukon don on 10.24.10 at 10:48 am
………………………………………………………………………
This is pretty much what I see I Kelowna too. I have no numbers to offer up but that is my view from being on the ground here.

Update from Penticton after 16 months of living here. The spec buyers are gone , tons of condo, like hundreds sitting empty. Tons of mobile homes were old folks used to line up to buy them sit for years and listings pile up. Tons of small houses on duplex size lots or under 300 houses now on market. Lots of foreclosed properties now hitting real estate guide signs every were. I would like to know the why Kelowna is so much different or is it D.A. . There is a 20 month supply of 400 to 500 grand houses on the market? One house on the lake sold down the road from us , but the price drop was from $1,265,000 to $900,000. Lets be honest here D.A. the market is correcting and those that need to sell must lower prices. The spec buyers who made the market are now gone and trying to get out of rentals. Town house in one development I deliver to every day have dropped from the $220,000 range to asking $189,000 and still not moving? The move is slow , but the prime buying season has passed and I will bet the prices will be even lower next spring and headed one way , down. Real estate moves in cycles , but with the spec buyers gone from the Penticton seen , then with a small middle class and shrinking job market , buying at todays prices would be a very foolish bet. Just take a look at all the listings D.A. , how can you say this is a buyers market? The only listings selling are listening to their agents and are accepting offers way below appraised value.

#208 Taxpayer like everyone else on 10.24.10 at 11:35 am

190 RER – Thank you for the further info, but if you check
my comment, where did I mention residential real estate
and lending? You must have assumed so given the general context of this blog.

I am curious about your experience with cycling. I am not sure if it applies to Van or Vic or both. Victoria is home to many top-level cyclists and is home to the National training centre. Probably something to do with the weather.

#209 S.B. on 10.24.10 at 12:19 pm

Food: I do not think we will see a shortage of food. Why, food is a huge business cotrolled by a few elite trans-national corporations – why on earth would they limit production and distribution (and profits)?

Instead I suspect the shelves will always be full…for those who are still able to afford the food.

How to explain the obesity epidemic: are people suddenly desiring more food for ‘no’ reason within the past 2 decades unlike any other time in human history? Or has the food become a poison/addictive?
Google search: Nutricide

I avoid processed foods like the plague now and here’s why:
– Name brand BBQ sauces: 2nd ingredient is Glucose
– Name brand processed cheese: 4th ingredient is Glucose
– Name brand “healthy” juices: 2nd ingredient is glucose/fructose
– Name brand “healthy” active yogurt: contains chemical sweetner
– Glucose/Fructose is present in bread, baked goods, it’s the 2nd ingredient in most every breakfast cereal.
– Fast food: there’s glucose in the hamburger buns, main ingredient in the sauces it’s in the sausauges, pop – you name it.

And diabetics use a Glucose monitor…gee you don’t say.

We little people do not even get *real* sugar any longer, rather our corporate masters feed us processed or chemical sweeteners.

By the way the soup on sale at Loblaws for $1 (as mentioned earlier) is laced with addictive MSG I checked the label while in the store.

“MSG is a food additive that enhances flavors in food. It virtually has no flavor of its own, but neurologically causes people to experience a more intense flavor from the foods that they eat containing the substance. To millions of consumers, it means experiencing an adverse effect from the additive and possible adverse health effects in the future. To the food industry, it means increased profits, a simple way to balance taste in a product line and mask unwanted tastes, and to make otherwise unpalatable foods acceptable. In particular, MSG helps replace flavor lost by elimination of fat in many low-fat and no-fat foods.”

#210 Devil's Advocate on 10.24.10 at 12:34 pm

“Lets be honest here D.A. the market is correcting and those that need to sell must lower prices. #207 Debt’s Dark Embrace /> and #198 yukon don

Do the statements I made at #178 not echo that? Seriously guys, if you would just take the time to read my posts objectively with an open mind you might actually see some validity in them.

Let me reiterate but two of my past comments which I have maintained all along;

1. The market is most certainly correcting and prices are falling I just don’t agree they are falling as much as you seem to hope they will.

2. REALTORS don’t care if prices fall or rise… we don’t care if volumes increase or fall and we don’t care what inventory levels are. We take all that stuff and figure out the best advice we can give to our clients that they can make confident decisions.

3. We are two years into a, to be expected 7 to 10 year correction subsequent to an inordinately exuberant market high. That means, if history is any indication, we can expect things will improve within the next 5 to 7 years. Even Schiller suggests by 2013 or 2014 for the US and when that happens so to will it in Canada. The market will come back.

“MLS was not directed at the buying public. MLS was directed at realtors. Owners gain access to more potential buyers.”The key word is “was”. Prior to the Internet Age, the public most certainly did not have access to MLS. Listing books, card and printouts were certainly proprietary. Particularly in the last decade, MLS – or a subset thereof – is definitely targeted at the buying public. If that isn’t the case, those real estate websites have some serious security issues because there’s a lot of private data leaking out for anyone with a web browser to see” #202 Another Albertan

It is not as simple as that… actually it is simpler than you allow yourself to grasp. Again… the success of the MLS system is the facilitation and enhancement of co-operation in sharing information and incentive amongst member REALTORS. Now just how are you going to achieve that on your own… even were you to have your property posted on the MLS as FSBO.? It is that co-operation you need put to work for you. And it only stands to reason that ought provide some inducement of incentive to do that.

Now I gotta run and enjoy some of this beautiful country we call Beautiful British Columbia – The Best Place on Earth ;-)

#211 Devil's Advocate on 10.24.10 at 12:35 pm

dang… haste makes waste…

#212 Alberta Renter on 10.24.10 at 12:59 pm

#201 Real Estate Realist

Appreciate the advice, you have been very helpful, and thanks for the links, especially the “Edmonton Housing Bust” one. I do have resources to help me locate a place, and I now can direct them more confidently to lower cost alternatives to servicing someone else’s condo loans.

I have taken Garth’s advice and bought some pref shares, and learned much about their flavour. I am faced now though, w either continuing to invest the rest of my savings which I would have otherwise used as a DP. Trying to find more safe investments is not and easy task for me .. at this stage. So much to learn~!

Garth, your blog rocks bigtime, even w the raggedy ends and nutbars. They provide the comedic relief in between the passionate parlays.

AR

#213 The Original Dave on 10.24.10 at 1:00 pm

I was in Kelowna in August and there was an election going on there too. How many elections a year are there? Oh wait, those were just “for sale” signs.

I swear, when you watch CNN and see those videos from Pheonix and Vegas, that’s what real life Kelowna looked like.

Huge drop in Kelowna. Party just started. Gonna get messy.

#214 Seen this in the US and its come to Canada on 10.24.10 at 1:01 pm

@ #74 Devil’s Advocate

It’s funny you mentioned “try Arizona”, because I’ve been looking for a house in Kelowna and that’s exactly what all the realtors I’ve used are doing.

I’ve asked each one of them and they’re selling their houses in Kelowna and buying Arizona (specifically Scottsdale). They know the real estate market in Kelowna; these experts are selling high in Kelowna and buying low in the US.

Each one of them have said when prices come down here we may be back, but it’s just got too expensive now in Kelowna. That’s colleagues from your own real estate industry!

Devil’s Advocate, stop being a real estate shill and admit the great Canadian real estate downturn has started! It’ll take a few years but real estate is finished in Canada as an investment.

#215 Debtfree on 10.24.10 at 1:12 pm

The point of this site is to discuss real estate, the economy and financial strategies in a manner than benefits all. Comments like this are an utter waste of time. Any similar will be struck. — Garth

Thank you so much garth . I come here to try to enlighten myself and to wade through this seemingly 12 year old’s ego trip has of late been too much . We have learned much from your books and blog and from many of the blog dogs too many to name .
As for the picture of the plane approaching a building being too much for the sensitive . Grow up a little . 911 was not the first time a plane flew into a building and it will not be the last . In fact it wasn’t the last time.

#216 Alpha_Bear on 10.24.10 at 1:48 pm

Kelowna’s real estate statistics are available on the OMREB website.

Year to date there have been 884 listings for Single Family Dwellings in the range of $600,000 to $999,000 in the Central Okanagan. Last month 7 of them sold.

Let’s see Devil’s Advocate try to put a positive spin on this.

#217 Real Estate Realist on 10.24.10 at 1:51 pm

#208-Taxpayer:

Because if you were inferring that I was involved in Commercial R/E you would not have made such a comment. Give me a break darlin’.

Cycling in Victoria: Yes, and observed and observed. Aware of the international sector that comes over to train along Dallas Rd/ Beach Drive and takes over vehicle traffic, riding in the middle of the road even though there is 3 feet (!) of space between the cars and the edge of the road. The ARROGANT cyclists force the cars to travel at 20-25km/hr and cause long line ups of cars who simply want to take a drive along the ocean, or actually get to their homes or on their way from their homes to somewhere else. It is absolutely phenomenal that this occurs and people let them get away with it. They have tempers though, especially the eastern European guys, and there have been “incidents” over the years.

Another awful thing for cyclists in Victoria is that the gorgeous path along Dallas Road around James Bay disallows anyone on bicycles or rollerblades. You MUST be on foot or you are not allowed on the path that runs along the ocean. BC logic. Incredible. Narrower paths in many cities in the world allow for all 3 and there are no mishaps. Why? Because people have brains. A little thing called a painted line keeps them apart. Oh, wait, but not in Vancouver, that’s right. Stanley Park hell. lol Sorry, this is getting funny, all this bitching. Anyway, on the SP pathway would you believe that pedestrians actually walk on the cycling side of the line (all the time!) so that when you come around a corner you can hit someone and either injure or kill both parties? Why? BC intelligence quotient.

No where in the world, that I have seen, has any of these problems. BC can make someone who isn’t stoned or stupid crazy. lol

Although, I did used to ride my bicycle from James Bay to Sooke 3 times a week along that interesting path. That was ok, except it was made for mountain bikes and I ride a skinny tired, 1960’s curly bar 10 speed that prefers pavement. If you didn’t have knobby tires you weren’t quite welcomed. It was a risky ride, to say the least, but heck, I’d do it anyway.

As for whizzing up Blanchard, etc, no room between the cars and the bikes at all but, heck, I’d do it anyway and hug that curb like it was my life, which it was. No arrogance on a bike here. I like my life.

#218 Real Estate Realist on 10.24.10 at 2:04 pm

#208-Taxpayer- p.s.

I forgot to mention, the weather you are claiming is so wonderful…

For those who like the idea of investing in Victoria, after you’ve decided that a corrupt and incompetent civil aspect of society is ok in your books, look at the facts about the weather.

The only difference between Victoria and Vancouver regarding rain all winter is that it only rains incessantly appx 3 days a week, then it moves on over the water to Vancouver where it gets stuck in the bowl that is surrounded by mountains, and proceeds to rain every day of the week.

The winter temps also go below zero all of the time. -5 instead of -10 or -15 is still freakin’ cold. Trying wearing a spring jacket in that. I thought so….

And then there’s the Vic (and Van) snow. Most winters it snows and really messes up the city because, well, even people that live there lie to themselves every day about the weather. It’s pretty, disables the city, then goes away. Either way, the temps are still winter temps, add rain to that and YUK!

And, if you like above 25 degrees in the summer for some real warmth, that stays warm down to around the teens or 20 or so in the evening, forget it in either place. Both never get higher than that, very rarely anyway, and then both plummet at night. Victoria due to the ocean, and Vancouver the same. No pretty dresses for an evening BBQ in the summer in either city. You need to bring an ugly sweater or jacket to put over it. Ah, Toronto! : ) These things matter sunshine, to me, and to a lot of people. Cold nights aren’t good for anyone’s soul, and in Vic and Van, they are all year ’round.

#219 Alpha_Bear on 10.24.10 at 2:04 pm

While I was attempting to find real estate statistics for Penticton I came across something that I found amusing.

The image splashed over the top of the South Okanagan Real Estate Board website is not within their territory. Perhaps they are trying to take over their competitors area, or perhaps they couldn’t find a nice image of their own.

This is like a picture of the CN Tower being passed of as being in downtown Hamilton.

#220 Real Estate Realist on 10.24.10 at 2:23 pm

#212-Alberta Renter:

No problem, don’t know about the “housing bust” link, that wasn’t me. Sounds right on though.

As for the rest of your cash, the best advice I can give you is to get that advice from Garth directly. He’s a working financial advisor. If you want the answers as to what exactly to do with the rest, and the education, then hire Garth directly and you’ll have your answers, and your investments.

All the best with your Edmonton adventure. With the right mindset, and actions, life should be stress-free.

#221 Sail1 on 10.24.10 at 2:27 pm

This resolution is welcome news for both consumers and real estate agents in Canada,” she said in a statement.

How this will benefit agents will be interesting to see.

http://www.theglobeandmail.com/news/national/realtors-ratify-deal-to-give-consumers-wider-choice-of-services/article1770659/

#222 Sam on 10.24.10 at 2:40 pm

#51 Real Estate Realist on 10.23.10 at 7:34 am

#40-The Best Place On Earth: Pumping the real estate market is pathetic enough but claiming it’s a great city on top of that is, well, I’m getting a kick out of that !
_____
Which asians are driving up vancouver RE?

Rich Chinese? NOPE.

the asians that are ACTUALLY driving up the price of Vancouver RE?

Young asian girls. All the rich American dudes with Asian girl fetishes love Vancouver RE.

Not that they’re actually hooking up – even the richest of the American Asian fetish creeps are not rich enough & too creepy even for newly arrived Asian girls.

#223 Another Albertan on 10.24.10 at 2:42 pm

Interesting. My comments about the nature of MLS having been modified to incorporate more marketing to potential buyers were twisted back to the promotion of the success of the MLS for realtors and inducements for sellers.

If increased buyer incorporation wasn’t part of the plan, then what’s the point of a public MLS site? Realtors have a private site as it is.

Everyone else’s mileage may vary.

#224 Be A Man on 10.24.10 at 2:54 pm

I grow weary of reading reports and surveys suggesting that consumer debt in Canada is a problem. Is it a problem or not? How do telephone surveys, which seem to occur daily, add to a situation that should be looked at from a numbers perspective?

I went to Statistics Canada’s website and couldn’t find any hard numbers to verify the “mythical” average Canadian debt load. Statistics Canada did report in 2008 “the proportions of debtors increases early in the lifecycle but declines steadily later”.

A recent survey by the Royal Bank of Canada urged lenders and government to “do something? In 2003 the UK the government was dealing with similar “unknowns”. They created a task force to tackle the consumer debt issue and eventually stated there was no generally accepted definition of over-indebtedness and inadequate information on which to base one”

The recent TD bank report states that soon Canadian household indebtedness will be over 150 per cent of personal disposable income (PDI). I find it strange that companies compare debt to disposable income. Assets and liabilities are on a balance sheet for companies. Why not for families?

Personal disposable income (PDI) is money available for debt servicing. I looked at TD’s 2009 financial highlights. I am not an accountant; I just wanted to see how a bank compared debt in financial ratios. It looks to me that net income (PDI) was almost $5 billion dollars. The same report showed $255 billion in outstanding loans. Perhaps we need to survey 1000 Canadian consumers to see if we should worry that a bank seems to have borrowings in excess of 150 per cent of its net income?

Garth should stop parroting the media and figure out what he’s really talking about.

A real estate downturn is coming?

Sure it is.

#225 Taxpayer like everyone else on 10.24.10 at 3:04 pm

218 RAR – 20-25kph taking up a whole lane? Not the crowd I ride with. There is certainly an arrogant segment
in the cycling community, but these people are usually
arrogant anyways. There is a fine art to sharing the road.
Be assertive, but not agressive. I’ve had very few
problems with vehicles over the years, and actually many
friendly waves when I’ve spotted hazards in the road
ahead and back-waved motorists.

I do not ride in either Vic or Van, but recently the addition
of a bike lane in Vancouver made the news headline as business owners were protesting it affected their customer’s parking.

Generally speaking, cyclists are still treated as after
thoughts. Again, rough guidline – act like a slow moving
vehicle and don’t impede traffic. And always wear your
helmet.

Now onto the weather. Snow and ice make riding dangerous. Give me the rain anyday. It doesnt rain at
-5C, so one of your claims doesnt hold. At -5C its probably sunny. I can dress for either. I proably lose less
than 2 weeks riding per year due to snow/ice. I can
appreciate this climate is not for everybody though.

Oh and try a cyclocross bike that you can mount fenders on. There are many fine canadian makes.

http://www.crossontherock.com/

#226 Dorf on 10.24.10 at 3:09 pm

What is happening right now in the economic world is a global problem. I don’t know how people here see that sitting in a room full of sick, highly contagious people, is not going to stand a chance of making them sick too.

But then a friend of mine said, “If you went to church every weekend and lived your life by their rules, dedicated yourself to a belief, and a very convincing man stood up in the church and warned you that “there is no God, you are fooling yourself”, would you heed his warning or write him off as a nutbar ?

I understand now.

Garth, I’m listening to your gospel and I am heeding your warning that there is no omnipotent power guarding real estate or any other aspect of the global economy.

Everything that you can imagine in your head, is possible to happen. No matter how fervently you pray.

#227 timbo on 10.24.10 at 3:22 pm

“Sixty per cent of new and rollover insured mortgages are for amortization periods of longer than 25 years, and half of those are for 40 years”

http://www.calgary-mortgages.com/mortgage-real-estate-news/?p=107

these toxic products were from 2006 to late 2009 and when you look at this graph below you can see the spike due to the lax rule change.

http://www.chpc.biz/Major_Cities_Chart.htm

now factor in the homeowner tax credit and the renovation tax credit and you should also see how the 2009 rise happened.

http://www.cra-arc.gc.ca/nwsrm/rlss/2009/m02/nr090202-eng.html

anyone who tells you home prices go up due to market conditions should understand that free money is the driver when wages cannot support the price and without free money it will return to where income can support the investment.

prices will fall without backstopping and when the 0/40’s come up and are underwater we will see things really speed up.

#228 VICTORIA TEA PARTY on 10.24.10 at 3:24 pm

NURSERY RHYMES FOR RE TIMES

Muir, Muir,
on the Wall.
When will my
real estate start
to fall…?

There was an old woman
who lived in a shoe,
her Victoria real estate
in the glue…

Jack and Jill
Went up to Shill
Carrying a deal
“you otta”…buy this place,
then fall flat on your face
And Jill became humbler
after!

Sing a song of sixpence
A pocket full of lies,
Four and 20 agents,
Bake your deal in a pie!

Little Bo Peep
has lost her sheep
Her RE deal
Gives her the creeps…

Old MacDonald had a farm,
Ee I ee I Oh,
Damn!!

Little Miss Muffett…
Ah, next!

#229 timbo on 10.24.10 at 3:24 pm

edit: these toxic products were from 2006 to late 2009

should be late 2008.

sorry…

#230 Michael Motorcycle on 10.24.10 at 3:49 pm

Seriously, I could do without the multiple useless jabs back and forth comments by the same posters.

#231 Cashman on 10.24.10 at 4:03 pm

Hey Garth, I don’t think you get enough respect. Who cares if the real estate zealots look at you with disdain. In the immortal words of Tony Soprano ‘Forget about it’. Oh sure they will make fun of you, but facts are facts. High unemployment, higher borrowing costs are just 2 factors. If I were unemployed, I would not be looking for a new house or car. In fact I would weld my wallet shut and tell those real estate zealots to get lost before slamming the door in their face. If now is such a good time to buy real estate, then why are their so many agents pounding on my door asking if I want to sell. I will, but only when I am good and ready and they will be the first to know.

Thanks to the G20 meeting in Korea, there will be a currency war coming in 2011 or sooner. That’s right a race to devalue all the major currencies of the world to boost exports and lessen imports. Great idea guys, only I have a strange feeling that it won’t be to my benefit. It might be ‘revenue neutral’.

Thanks to Helicopter Ben, the US owes almost $1.5 Trillion. Imagine what would happen if any us regular folks owed that much: we’d be thrown in jail for fraud with a nice handy, dandy, repayment schedule.

Thanks to PM Cameron, England is planning to take a chainsaw to the tune of 86 billion pounds ($135 Billion) from the budget. This made up of cuts to Gov’t spending and welfare programs over the next 5 years.

http://business.gaeatimes.com/2010/10/06/cameron-makes-first-speech-to-party-conference-as-uk-leader-warns-over-tough-spending-cuts-113140/

#232 Devore on 10.24.10 at 4:23 pm

#224 Be A Man

I went to Statistics Canada’s website and couldn’t find any hard numbers to verify the “mythical” average Canadian debt load. Statistics Canada did report in 2008 “the proportions of debtors increases early in the lifecycle but declines steadily later”.

Consumer debt numbers are readily available from industry groups, and compiled and reported on a regular basis. Look harder.

The recent TD bank report states that soon Canadian household indebtedness will be over 150 per cent of personal disposable income (PDI). I find it strange that companies compare debt to disposable income. Assets and liabilities are on a balance sheet for companies. Why not for families?

What a load of crock. How about because families are not banks? When you have the legal power to create money out of thin air by making a loan, then we can talk. Like it or not, banks are special entities in this monetary/banking system of ours, and they are exempt from and above laws, rules and regulations (criminal, civil and accounting), for as long as they continue to play ball.

#233 Jake on 10.24.10 at 4:44 pm

#194 Alberta renter,
I have been watching the Edmonton market closely and I certainly wouldn’t snatch up a condo right now. If I were you, I would find a condo development I really like and then rent one in the building for a year. You could case the neighbourhood out and figure out whether or not you really like the place before you take the plunge. There is quite a lot of selection in the city and, with rates set to remain low for a while, you are not going to be missing out on anything by not buying now. My guess is that you will be able to get a condo and a new car next year for the same price the condo would cost you now. It sounds like you are in an excellent position and in another year you will be in an even better position. Regardless of your decision, good luck in Edmonton. It is a fantastic city.

#234 David B on 10.24.10 at 4:54 pm

So they had their big meeting over MLS listings….

The more things change the more they remain the same.

#235 realpaul on 10.24.10 at 5:03 pm

#21…actually yes…new Chinese wealth is going to Switzerland more than any other jurisdiction. We smarmy CDN’s think we are the focus of the exodus whereas this is far from the truth.

#236 Devore on 10.24.10 at 5:09 pm

Pension Pulse has an interview today with a pension fund manager. Some interesting blurbs:

What’s hot:

We would like to find effective ways to participate in the rapid growth of Asia and South America. However, economic growth has a distressingly low correlation with high investment returns. In many cases, it may be more rewarding to invest in sectors that export to regions experiencing rapid growth.

Stay contrarian:

The discussion on private markets was particularly interesting. I told him that as more money floods into alternative asset classes like private equity, real estate and infrastructure, returns have been coming down.

“Underfunded plans are shoving money into these asset classes but they fail to appreciate that returns have to be earned. As more money goes into these asset classes, the market becomes more efficient, the opportunity set shrinks and returns come down.”

Watch out below:

And he left me with this stark warning: “Some time in the next five years, politicians will have to deal with a funding and labour crisis.” I guess that’s when the music stops playing for good.

#237 brainsail on 10.24.10 at 5:14 pm

Yesterday was an interesting day for us in Central Texas. We got up early and did our early voting thing. It felt so good pushing the “R” everything button.

It felt even better hours later when I read the link that S.B. provided.

http://economictimes.indiatimes.com/news/politics/nation/Barack-and-Michelles-Mumbai-darshan-plans/articleshow/6797379.cms

So far the major new’s networks aren’t reporting this story. When the average American hears about this trip they are going to be outraged and the voting results are going to hit the Democrats hard. The downside will be that American politics is going to be in a stalemate until 2012. What do you think?

#238 S.B. on 10.24.10 at 5:38 pm

Ok who will bring the Realtor(r) effigy to the Toronto event? :D

I can see it now: a united pack of Blog Dawgs dancing up a frenzy and howling for their leader; fanning the flames (actual and metaphorical) of contempt – throw another For Sale sign on the barby, mate!

#239 Alpha_Bear on 10.24.10 at 5:49 pm

I appear to have messed up the link to the South Okanagan Real Estate Board webpage which shows an image taken from West Kelowna, which is many miles from the Northern boundary of the SOREB territory.

http://www.soreb.org/our_territory

#240 BrianT on 10.24.10 at 6:00 pm

A sign of the twisted times: the American media and establishment falling over themselves to lick the boots of some KGB scum telling Californians what he says they can and cannot do http://www.foreignpolicy.com/articles/2010/10/22/interview_viktor_ivanov

#241 Captain Jack on 10.24.10 at 6:01 pm

217/218 REE
Stanley Park! My god…I was trying to drive through SP up the hill to the lookout point wanting to exit the park to get over the LGB…and there were ten bikes taking up one lane which is fine, but then one guy in the other lane slowing down all the traffic behind them because both lanes were taken. Arrogance…
And the weather sucks as well…never get that hot summer night…maybe for a week in august…wish more people would understand this…

#242 Taxpayer like everyone else on 10.24.10 at 6:24 pm

RER – sorry one last bike comment with a RE twist. Went for ride today (in the rain). Saw shapely figure ahead a ways. Put 170 lbs of muscle and 20 lbs of man-jiggle into action and caught up. Would guess she was maybe 40. Said she had recently moved from Vancouver. Detected
an accent and queried her. Said she was from Switzerland.

Imagine that. Moving from Switzerland (high PCI and quality of life), then to Van, then to VI all just to ride in a soft October rain…..

230 Michael – did you get out on your bike today?

#243 Debtfree on 10.24.10 at 6:31 pm

@#237 Brainstale Who cares? You deserve every beck limba and palin you get . I think it’s funny that the US is getting what they have been dishing out . Meddling in everyone’s elections . Now thanks to the likes of Thomas of the surpreme’s the whole world is messing with yours in the form of unlimited cash . Looks good on you. I wonder how much middle east ,china , russia and the like cash is getting the stalemate they are paying for. The whole world will be better off for two years with the stalemate you are wishing for . TIA

#244 jess on 10.24.10 at 6:35 pm

.#235 realpaul
by offering to buy greek debt?

#245 raincouver on 10.24.10 at 6:37 pm

From the press release …

When Cameron Muir speaks, the industry still listens. Muir is the chief economist for the BC Real Estate Association and the industry waits for his insightful interpretations of empirical data month after month.

Now, that is just funnier n’hell. This, from a guy who couldn’t find his buttocks with both hands.

Thanks for the gallows humour, Garth. It’s dark out here on the WetCoast.

#246 Coho on 10.24.10 at 6:38 pm

It’s sad really….American politics. The people are looking for a friend in government. Pick your poison. Republicans voted out 2 years ago. Republicans will be voted back in early next month. Don’t like coke, then there’s pepsi. Tired of pepsi go back to coke. Yo-yo democracy. Neither colas represent the people any more.

Canada is similar, as is Australia, the UK…left/right, red/ blue, coke/ pepsi.

#247 Nostradamus Le Mad Vlad on 10.24.10 at 7:11 pm


If this works, enjoy a delightful Hallowe’en!

The one thing this lady forgets (or doesn’t know) is that Obama was put in place for a particular reason — to take the US down as far as possible. That is why he is a one-term president, as he has done a wonderful job.

The link earlier stated the west will be a welfare state shortly, so subtract Europe from this article. It’s all happening in China and Russia.

6:47 clip Robin Hood has been modernized!

Obama is ramping up the CIA effort in Pakistan. Don’t they realize the US is clearly in the wrong? Pakistan certainly hasn’t attacked anyone.

Class Action by Georgia, for all those whose homes were foreclosed by MERS.

Lef over H1N1 vaccine has been added to this year’s flu shot. Don’t take it! ”

“As reported on 5 June, 2010 at: http://abcnews.go.com/Health/SwineFlu/swine-flu-pandemic-world-health-organization-scientists-linked/story?id=10829940

“World Health Organization Scientists Linked to Swine Flu Vaccine Makers

“Scientists who advised the World Health Organization on its influenza policies and recommendations — including the decision to proclaim the so-called swine flu a “pandemic” had close ties to companies that manufacture vaccines and antiviral medicines like Tamiflu, a fact that WHO did not publicly disclose.” wrh.com.

More on flu shots “Of course, flu shots have never been about what works in the first place. They’re about what makes the most money. This new quadruple flu shot is being sold at about twice the price of a regular flu shot.”

Figures “Top Ten countries External % GDP to debt ratio. Same list has names of countries with blood in the streets. Who’s next?”

Business “The Ultra-Rich of the United States have already begun their mass exodus from the United States, fully understanding the situation that is about to present itself.” Sort of goes with the earlier link, about the elite turning the west into welfare states.

Goes with the preceding. “There is no place for the dollar to go but down, which is why financial institutions are foreclosing homes like crazy (many times illegally). They understand that those pretty printed pieces of paper, called US currency, are very close to being without any value whatsoever. The question left unanswered is what happens to the status of the US dollar as the world’s reserve currency until Basel III starts taking effect?” wrh.com.

US voting “County GOP Chair: ‘They ain’t worth a damn, we ought to go back to paper ballots’.” Treat electronic screen voting ballots like flu shots — avoid them, and have a double bourbon with ginger instead!

“Sarkozy wants to loot the people of France to please the bankers. The people of France have been through that before, and they have an answer!” wrh.com.

The US SS System Bernie Madoffwiththeloot. This stuff can’t be made up, but now the chickens have come home to roost.

Events One more event which was conveniently ignored by the m$m.

Leave California for good? Open the floodgates to the illegal immigrants, then jumpstart the SAF into kickoff mode!

Fitting way for Detroit to exit stage left. Remember: One definition of al-Quaeda means “going to the toilet!”

#248 jess on 10.24.10 at 7:30 pm

http://www.truthdig.com/avbooth/item/chris_hedges_on_the_death_of_the_liberal_class_20101018/

#249 ontheshoreline on 10.24.10 at 7:32 pm

Nice thing about a Mac..you can 2 finger swipe past DA’s numerous comments…doesn’t he have somewhere else to go?

#250 Real Estate Realist on 10.24.10 at 8:05 pm

#225- Taxpayer: I’ll start this by saying this is for people, who are cyclists, who want to buy real estate in BC so they can ride there all of the time.

If you don’t ride in Vic then you aren’t aware of the “20-25km/hr taking up the whole lane” thing on Dallas Rd/Beach Drive, where the foreign cyclists train for international events. I was specific, and it is true. It’s very real, I also have a car so was victim to this caravan along with other cars many times as I lived close by.

In but one of the “incidents” I witnessed first hand, the first car (with a long line of cars behind him, including me) beeped their horn out of frustration due to the HUGE shoulder a cyclist wasn’t using (they ride alone usually, not in packs btw) and the guy lost it, threw his bike to the ground, started screaming at the driver through the driver’s window, he wouldn’t roll it down, duh, so the cyclist ripped the driver’s side view mirror right off of the car. Yeah, no one moved a muscle. Scared shiteless. Then he got back on his bike and took off up a (finally coming up) sideroad, of which there are few for escape. If the incidents were reported, it would be a good read. I really don’t are what you believe darlin’. I used to take seniors on drives along this route for fun as well but could never get anywhere because of these a-holes. It was also a bit too tense as they cause so much toxic hell with their arrogance.

Getting tired of this but -5 is at night as I said. It rains during the day, everyday, and there is no sun for appx 9 months, so the sun being out is also inaccurate. If it does come out it’s hard to figure out how it managed to peak through the winter cloud cover caused by the mountains. It doesn’t really come out at all. Oh, and I was never talking about riding in the winter. Life is too short for that.

Thanks for the new bicycle advice, but I have a classic that people offer to buy from me often. Solid steel, great frame, and the kind of GO bike they don’t make anymore. It can beat a lot of $3000+ bikes out there. As for fenders, I’ll do fenders on my motorcycle, but that’s about it. I ride for fitness and speed, not for dodging obstacles and pounding my joints to bits. And yes, I was glad to get my motorcycle out of BC as well. This long distance back road rider kept running into either mountains or water. Arghh.

As for the Swiss girl, I met a lot of people from other places in both Vic and Van as well. Most didn’t, and don’t last. Not after they get to experience “living” there, in all of it’s corruption, incompetence, infrastructure problems, etc. And if they ever find out about the barges in English Bay and how they dump their human excrement in the Bay all of the time, where people swim, and the government doesn’t do a thing about it, always trying to keep the facts on the down low, well, that sometimes puts them over the edge. Or, they just may simply get depressed from the lack of sunshine for 9 months out of the year. To each his/her own though. Stay, don’t stay.

#251 wetcoaster on 10.24.10 at 8:46 pm

As a series of winter storms begin to pound the wetcoast over the next six months or so, we will have much time to reflect on why we are building bike lanes that will barely be used, as fast as condos that will never have their lights turned on.

Where six months of the year will be dark, gloomy and very very wet, as well as more snow than usual while real estate is priced at the highest levels in the world.

Where we have a premier who will beg like a little whiny lying baby on national TV for one more chance to screw us all over again for the sake of power.

Where our gangs are ramping up their wars and the Mexicans move in a neighborhood near you and take our welfare money with a smile via Uncle Sam.

Yes, our kind of place, at 8 to 10 times average income. This will have a very ugly ending.

#252 45north on 10.24.10 at 9:04 pm

Bruce Corell: David Rosenberg has already commented to his investors that this will be the largest real estate CRASH in Canadian History.

that is my feeling

Pete: Brampton is in bad shape but you see this same story all over the GTA. People are maxed out and need to sell.

BrianT: I downloaded the pdf talking about the US housing market: This special Clear Capital Home Data Index (HDI) alert shows that national home prices have declined 5.9% in just two months

this isn’t good news folks

jman: talking about Toronto real estate: There will be a hit here too. The only possible cushion will be the proximity to the subway and to downtown.

my feeling exactly which means Brampton, Woodbridge etc are toast. Toast.

timbo: I followed your chpc link which predicts that housing prices in the major cities will decline substantially.

There will be a dramatic decline in real estate prices. Most people don’t get it but the-powers-that-be do.

So far with every month of poor sales, I have predicted a political crisis and so far I have been wrong. In the US, the politicians have let main street make the announcement. That decision was a mistake.

#253 Patz on 10.24.10 at 9:05 pm

Here’s a letter you’ll never get from the Libs, Cons, or anyone else:

An Open Letter to Citizens of the Western Democracies
From the (still :)) democratic governments of same

Dear Citizen:

By now if you are not brain dead (or one of “the haves and the have mores” as GWB put it) you’ve probably noticed some er.. dislocations in your general economic well being.

Further you are probably wondering where all this is going; when and if we are going to ‘recover’ and of course how severe the various corrections and austerities are going to be. Well, to put it in terms of the street “the sh*t is pretty much gonna hit the fan” for you–if it hasn’t already.

As most of you, not on crack, have noted the real estate market in the US, despite all our efforts has gone off a cliff. We would like to fix it but we can’t. Unfortunately for the rest of you (PIIGS, UK, CAN AUS etc) it’s going to be pretty much the same. You see we pay economists to pretty things up but as some of you have noted lipstick on a pig still doesn’t make you want to kiss it.

And while we’ve gotten very good at coming up with arcane terms that most of you can’t understand when we report the employment numbers it’s now obvious to everyone that there’s so many jobless they could form a country and be bigger than Canada.

You may have noticed we’ve stopped saying “green shoots” a lot. Sorry, but there never were any—oops , our bad. However, while the “main street” economy is a ghost town we are proud of how we’ve helped out our friends on Wall Street and of course the bankers worldwide. (After all someone’s got to fly the private jets and spend time in luxury hotels on the Riviera.)

But we digress. Back to you the common man–and of course woman! Basically you’re screwed; we don’t care and as they say in Hollywood: “Don’t call us; we’ll call you.”

Sincerely,

Your masters, er… humble servants.

P.S. Don’t be stupid and try anything funny, like getting your money back. Ask yourself how long it would take to bring our armies back from places like Afghanistan and kick your ass instead of the Taliban.

#254 Devil's Advocate on 10.24.10 at 9:05 pm

You all appear thoroughly convinced you have it all figured out it would clearly be an exercise in futility to point out the flaws in your arguements. It’s obvious you will not stand to “listen” with an open objective mind to anyone who disagrees with you anyway. Too bad because, despite what you think, i agree with much of Garth’s fundamental warnings and generally provide proof sources to back them. Prejudgement be it of ones ethnicity or association is ignorance plain and simple.