Here we go

In Washington the transformational president gets a spanking from voters who want jobs more than hope. In Calgary real estate sales plunge. The average SFH home has dropped in price by almost $20,000 during the worst October since the crisis of 2008.

In Victoria, real estate activity plops 37% from levels seen a year ago. If it hadn’t been for some goof paying $6 million for a place in Saanich, average prices would also have crunched.

In downtown Toronto, amid the 28 floors of a glitzy condo building called Panorama, 128 units have been for sale in recent weeks – 32% of the entire building on the resale market at the same time. So far, six have sold, for a sales-to-listings ratio of just 5%. This raises a serious question: Why would so many owners be dumping? More serious: Where are the buyers?

If you think things are normal, you’re not paying attention.

The US elections were not about replacing the president, just slapping him around. By shovelling Republicans into Congress, Americans have turned their backs on Keynesian economics, which means there will be no more stimulus spending, no quick change to grim unemployment stats and a pissy mood. More significantly, it probably means the American housing market, now at near-Depression levels, will be allowed to freefall to a natural bottom. This may accelerate a recovery. It will also kick the remaining crap out of a lot of middle-class families as prices tumble further.

For Canada, this is not good. The US dollar may decline further, pushing ours up, turning exports toxic and stealing jobs. There’s now good reason to believe the next two or three years will indeed be borderline deflationary, with stagnant wages and precious few new jobs. Given the debt we’re already in, how can this be otherwise than a death knell for residential real estate?

But then, it’s already here.

Yesterday I wrote of the inevitable condo crumble. I even harkened back two decades to show how it happened the last time – when prices outstripped value and the economy tanked. Once investors were reamed, it took the better part of 15 years for asking prices to regain their former peak.

Consider the latest numbers from Canada’s biggest condo market:

  • Sales of new units in the latest quarter were down 24% from the summer and 18% from a year ago. Ouch.
  • Sales of new condos were the worst in five years, and have now declined for nine months.
  • Resales are also collapsing, off 28% from mid-year and 25% from October of 2009.
  • But prices are up – 9% on new units and 10% on resales. The overriding reason is that nine out of ten buyers are first-timers, qualifying for 5% down, 95% mortgages and 100% vacuity.

And while newbie virgin owners drive values higher through raw inexperience, there’s real evidence professional buyers are starting to stream out of a collapsing structure. As condo intelligence company Urbanation puts it: “Developers and brokers in the condominium industry have speculated that the Toronto CMA is running out of investors.”

Not hard to understand why.

For example, there are 44% more condos in Toronto than there were just five years ago, the result of an orgy of overbuilding spawned by cheap money, lax lending standards and gullible buyers. There are currently about 13,200 unsold condo units in the city, and a potential 7,000 new units in 30 new projects might hit the market by the end of the year. Yikes.

Meanwhile prices have risen too far, too fast – ignited by emergency rates and a lemming mentality. Average condo prices are about 30% higher than just sixty months ago. In other words, the price-to-rent ratio is shot, while the potential for future capital gains in a weakening economy fades.

So why catch a falling knife? Just stand back. See what dies.

It’s something smart people will do as the next few months envelope us. There is no ‘normal’ or ‘balanced’ market developing, as the real estate board executives tell the uncritical media. There’s absolutely no pent-up demand. No wage or salary increases to fuel buyer confidence. No hope of sharply lower rates. No relief from current debt levels. And now our biggest trading partner and sugar daddy is starting a tax revolt. Just what ya need on the precipice of deflation.

Sure, some idiot millionaires and a whack of moist munchkins will keep buying. As sales levels fall, they’ll even drive average prices up. Re/Max will get horny and issue another release. Global will cover it. Breathlessly.

But the knife’s in motion. Stand back.

Garth's Toronto event Nov 9 -- FULL

The additional seats recently released have been filled, and the event is once again full. If you received a confirming email, you are in. Just show up, as no further ticketing will be required. This event is open to blog readers only. Please be prepared to show your membership tat.

192 comments ↓

#1 Fatboy on 11.02.10 at 7:28 pm

Twas the night before QE2, when all through the house
Not a creature was stirring, not even a Wall St banker louse

The stockings were hung by the chimney with care
In hopes that Ben Shalom soon would be there

Blankfein and Dimon were nestled all snug in their beds
While visions of free money danced in their heads

#2 jess on 11.02.10 at 7:34 pm

These American’s voted common good
Oregonians Say “Yes” to an “Economy That Works for Everyone”
Statement by Charles Sheketoff, executive director of the Oregon Center for Public Policy, on Measures 66 and 67 election results
Today’s “yes” vote on Measures 66 and 67 is good for Oregon, good for our economy and good for working and unemployed Oregonians. Oregonians have taken an important step toward an economy that works for everyone
Our “yes” vote says that Oregonians will stand up and protect the foundations of our community — our schools, our health and human services, our public safety system. Our “yes” vote says that when an economic storm arrives, we will stand together and protect the most vulnerable among us. Oregon voters showed the country how to put a state on a sound fiscal path to recovery.

Today, Oregonians rightly rejected a well-heeled corporate campaign of fear and deception. While many Oregon businesses are good community citizens, others apparently wanted to shirk their responsibility to pay their fair share for the vital public services upon which their success depends. Hopefully corporate Oregon learned important lessons today: Don’t lie to voters. Don’t be greedy. Support the common good.

http://www.ocpp.org/cgi-bin/display.cgi?page=nr20100126YESWin

Oregon Ballot Measures 66 and 67 appeared on the January 26, 2010 special election ballot in Oregon as potential veto votes on a $733 million tax hike enacted by the Oregon State Legislature in 2009. Both measures were approved.[1][2]a The Tuesday election marked the first time since 1931 that the corporate minimum taxes had been changed.[
http://www.ballotpedia.org/wiki/index.php/Oregon_Tax_Hike_Vote,_Ballot_Measures_66_and_67_(2010)

#3 DiGiacomo on 11.02.10 at 7:43 pm

good stuff as always Garth!

one more interesting note in the Calgary stats:

a week or two ago there were 5,000+ SFHs on the market

Now there’s 4,500

looks like last week had some movement in sales (100-150 I’d guess by how the stats have changed), but new listings are still coming online faster than they’re being sold.

So did 500 listings go?

some will get resisted in the next few weeks, to look fresh

but even more will be shadow inventory – listers who can’t sell, taking them off the market and trying to rent, or waiting until a “better market” in spring

this will not end well….

#4 JO on 11.02.10 at 7:44 pm

Good one Garth

As the US begins the inevitable retrechment from voodoo economics and admits defeat of the interventionists (interventionist economics got us to this point going back decades of course), we will see the final flush. The focus must be on destroying debt, cutting gov’t spending, reforming the tax system (dramatically simplifying, providing good incentives and avoiding any increase on low-middle class people), and allowing the economy to heal.

While the Tea Party is only the start of a movement in the right direction, it is not going to be a big player 5 yrs from now -at least I hope not. Too many strange characters.

As for the people who speculated – er bought, homes in the last 8-10 yrs using heavily subsidized debt, we will hopefully see prices allowed to drop to where they should be. Despite all the whining from the speculators and politicians who will tell you otherwise,this is a very good thing. Prices drop to the point where new families (who will mostly be serious,prudent real buyers) come in and get into homes at cheaper prices, and the speculators are freed from a 25-35 year debt slave sentence,even if most of them will claim bankruptcy first. 18-24 Months of bankruptcy…20-30 years of freedom while paying for much cheaper accomodation.

It will not be pretty, but this is what will happen. There is nothing the gov’t or BofC can do. The faster we get it done, the faster we begin a lasting recovery. Some speculators who are able to pay the mtg should be given a mtg writedown which reduces the mtg principal and payments, but only with some sort of condition where 25-40 % of all future house price gains from the date of the modification go to taxpayers/Gov’t.

2011, in particular March onward ought to be wild and scary. Europe has merely kicked the bond market problems down the road…these problems are coming to a bond auction near you.

JO

#5 Brian1 on 11.02.10 at 7:46 pm

The Repulicans will take the house but in two years Obama will be reelected as I have said before.

#6 miketheengineer on 11.02.10 at 7:49 pm

Garth et al:

Nostradamus et al:

This one is for you:

http://www.rumormillnews.com/cgi-bin/archive.cgi/read/129676

VANGA-BULGARIAN CLAIRVOYANT IN 1995: WWIII STARTS IN 2010 AFTER GEORGIA INCIDENT

#7 T.O. Bubble Boy on 11.02.10 at 7:53 pm

In Toronto, the domino effect is coming:

– Once condo prices drop, that kills the equity of potential move-up buyers.

– Move-up buyers with less cash = lower prices for all of those bungalows and semi-detached houses that are selling at $600,000+ these days.

– Owners of those semi-detached houses and bungalows then have less equity, and the price of their “move-up” houses (detached homes) go down: places going for $800,000+ these days will be without buyers.

#8 OttawaMike on 11.02.10 at 7:54 pm

Today’s photo is from the defunct Deccan Air in India. They are now part of Kingfisher Air which is part of one of India’s billionaire empires made on Kingfisher brand beer.

I flew Deccan around the subcontinent and they were relatively cheap with excellent service. The tape the gentleman is applying in the photo is not really duct tape but a special aviation approved tape to repair the wing’s leading edge.

Trust me, i made inquiries when I spotted it out my cabin window on the wing.

#9 miketheengineer on 11.02.10 at 7:58 pm

Garth et al:

Affects of the Stuxnet virus:

The guys at this web site tell what can happen with this virus. I pray that it does not happen, because everything may shut down.

http://urbansurvival.com/week.htm

#

Finances would seize up. Not more online stock trading.
#

No more ATM – few if any credit cards would work.
#

AC power systems could fail because much of the admin traffic to run the SCADA systems transits the physical transport layers of ‘the net’
#

And along with that, much of the public switched telephone network would go down for the same reason – PSTN packets transit them, too.
#

Then there are wire transfers, orders for things like warehouse reorder levels and so on.

#10 OttawaMike on 11.02.10 at 7:59 pm

88 Ottawa S. on 11.02.10 at 10:24 am

I’m in W. central Ottawa and have been watching prices carefully. In my neighbourhood the last 3 places sold all in less than 10 days. 2 at 1k$ below list and one at 6k$ over asking.
I do think the burbs are taking some hits though as average asking prices seem to be lower than the peaks slightly.

I really don’t believe the fat real estate lady is ready to sing on O-town’s market just yet but the day of reckoning is approaching, albeit slowly.

#11 Pink on Plasma on 11.02.10 at 8:00 pm

15C, sunny, bike ride, 4 point in the yard, and house prices no more than the canadian average.

Why do I live here again?

http://www.vireb.com/assets/images/pdf/10-oct_10_sales_summary.pdf

#12 april on 11.02.10 at 8:01 pm

Garth, would you still recommend RBC preferred shares -non cumulative, 5 yr rate reset… series AR mentioned in your book Money Road? I’m considering investing 20.000 now.
Thanks for your great posts.

I do not recommend individual assets without sufficient knowledge of the investor. Securities in my book were used to illustrate points, one of them being that preferreds are a great place to put money. — Garth

#13 DiGiacomo on 11.02.10 at 8:01 pm

to add to my last post on Calgary shadow / unsold inventory stats

Calgary SFH:
Sept month end inventory: 4,880
+ October new listings added: 1,765
– October sales: 888
– October Month End Inventory: 4,528
SFHss that came off the market unsold in October: 1229 (no data to calculate how many were re-lists)

Calgary Condos:
Sept month end inventory: 2,204
+ October new listings added: 721
– October sales: 301
– October Month End Inventory: 2,042
Condo units that came off the market unsold in October: 582 (no data to calculate how many were re-lists)

#14 NFN on 11.02.10 at 8:03 pm

A couple of times a day I’m seeing advertisements for the CDIC with the slogan: “Know what’s protected”. I don’t know if I’m just noticing this now or if CDIC advertising is a new thing.

In any case I did some research. It appears that deposits at the Alberta Treasury Branch are backed by the Alberta government up to the full amount.

This is concerning because I explicitly remember comments on iTulip.com back when the FDIC started advertising on TV… this was a couple months before the banks started going under.

Anything going on or am I just being paranoid?

Deposit insurance is an illusion. — Garth

#15 Debt Free in the U.S. on 11.02.10 at 8:08 pm

Election day. Those in Chiocago vote early, and often…even the dead. We here in America’s Dairyland vote only once, choosing carefuilly between judiciously exercised experienced votes, and Tea-Party Rhetoric of the Fersh-meat Wannabees. So we wait to see how this will turn out. Could be a loser for all concerned.
The good news, should the worst pervail, a thorough cleansing may send unemployment higher, spendingh lower, and a lot of misery to middle-class families trying to delverage DEBT, and increase savings right now. It might be called reality, not pretty, just the way things worked out.
You were warrned, you knew better. I hear tell there is life after bankruptcy, but best not to have gone there, if you can help it.

#16 BuBu on 11.02.10 at 8:10 pm

http://www.theglobeandmail.com/report-on-business/economy/jobs/long-term-joblessness-on-the-rise/article1783259/

So Garth was right again…

#17 Mickey the Realtor on 11.02.10 at 8:32 pm

Garth, you should allow DA to write an article as a ‘guest’ I’m sure he can fit that in somewhere between his bike riding and kayaking.

#18 Tim on 11.02.10 at 8:34 pm

Sales are tanking and so is the economy, thanks to the Conservatives. They have mis-managed the economy and are now selling off more of our prized assets in Saskatchewan. Very forward thinking…

#19 Dan in Victoria on 11.02.10 at 8:36 pm

Mike the Engineer @9

http://www.langner.com/en/

#20 Kevin on 11.02.10 at 8:45 pm

Another sign that Garth is right.

Long-term joblessness on the rise
http://www.theglobeandmail.com/report-on-business/economy/jobs/long-term-joblessness-on-the-rise/article1783259/

#21 T.O. Bubble Boy on 11.02.10 at 8:47 pm

PHEW!

I’m so glad that the B.C. market is “steady” and “stable” and “balanced” and “lukewarm”:

http://www.rebgv.org/news-statistics/home-sales-remain-steady-greater-vancouver

http://www.bclocalnews.com/vancouver_island_south/victorianews/business/106548578.html

http://www.vancouversun.com/business/Victoria+real+estate+sales+increasing+well+last+year+pace/3759484/story.html

http://www.vancouversun.com/business/real-estate/Loweer+Mainland+real+estate+sales+pace+remains+lukewarm/3765441/story.html

I was worried that seeing sales volumes drop 35%-40% was a problem… but (thanks to the B.C. media), I can now sleep easily.

#22 Kevin on 11.02.10 at 8:50 pm

Looks like Garth was right again.

Long-term joblessness on the rise
http://www.theglobeandmail.com/report-on-business/economy/jobs/long-term-joblessness-on-the-rise/article1783259/

#23 Nostradamus Le Mad Vlad on 11.02.10 at 8:53 pm

“Here we go paying $6 million for a place . . .” — More money than sense. It’s Silly Season all over again!

“Why would so many owners be dumping?” — Foxy-looking vampirettes, mortgaged up to the hilt + HST. Add yer own sauce!

“More serious: Where are the buyers?” — From a past life in Zombieland. Ain’t coming back.

“This may accelerate a recovery.” — Then again, it may not. Don’t bet on it.

“. . . prices have risen too far, too fast . . .” — Same as Nortel, Bre-X, etc. Where are they now?
*
#6 miketheengineer — Hi Mike. Read the link before, so thanks for posting again.
*
Did anyone see the latest FF today, about a suspected bomb found in the Chancellor’s office in Germany? “UPS was also used last week to transport parcel bombs sent from Yemen and destined for targets in the United States.” UPS doesn’t fly to or from Dubai. Plus — Where are these tidbits dug up from?!

1:10 clip Garth — H-D setting up shop in India. Plus — 6:53 clip Thorium — “An obscure metal that could energise our world… It’s called thorium, it’s eco-friendly, and there’s lots of it. Many scientists say it could even replace uranium as a nuclear power source.”

3:06 clip QE2 strikes again!

Govt. Fraud “The government’s entire strategy now – as during the S&L crisis – is to cover up how bad things are (“the entire strategy is to keep people from getting the facts”).”

The American Dream “America has long been a country of limitless possibility. But the dream has now become a nightmare for many.”

See preceding. “While homeless vets sleep in the alleys and eat out of trash dumpsters.” wrh.com.

Bubbles From Ben In case you would like more, step right up!

Bernanke’s investing style.

Water “There is something else that could have been developed with that $14 trillion the US Government spent to keep the Wall Street money addicts out of jail; large-scale cheap desalinization!” wrh.com. Sea water is not much use to drink; instead cancel those F-35s (or whatever) and build desalination plants where they are needed,

BP Profit In case y’all forgot . . .

Apply the same to Canada. Housing is not an investment, it’s shelter.

#24 LS on 11.02.10 at 9:03 pm

In Victoria, real estate activity plops 37% from levels seen a year ago. If it hadn’t been for some goof paying $6 million for a place in Saanich, average prices would also have crunched.

No. Average prices were up $15,000 month over month even before that $6 mil sale.

#25 Timing is Everything on 11.02.10 at 9:22 pm

Deposit insurance is an illusion. — Garth

Hmmm. Kinda like earthquake insurance, I guess. You have it, but for all intents and purposes, it is useless.

http://www.cdic.ca/e/index.html

#26 Caron on 11.02.10 at 9:24 pm

I know books are boring but the impatient dawgs might want to read J.K. Galbraith’s book “The Great Crash.” He points out that after the October 1929 stock market crash, the American economy continued to decline until the late 1930’s.

James Gray’s book “Red Lights on the Prairies” indicated it was business as usual in Edmonton until mid 1932. He goes on to quote a report by the Edmonton Chief of Police to City Council in 1934. The Chief, no doubt dramatizing his force’s importance somewhat, reported that “every third detached home in the city was operating as either a brothel or a speakeasy.”

This was the direct result of the tea party economics practiced by Herbert Hoover and R. B. Bennett after the stock, commodity, and property market bubbles collapsed during the 1920’s. To his credit Bennett later fully abandoned all those policies and the wily King got the credit for the good results.

In light of this, I hope Harper and company do not get to pursue their destructive economic policies or dismantle the social safety net any further, but history tells us you should never underestimate the power of conservatives to make everything cheap and nasty. The more attractive Ayn Rand fans may even get to experience some of the more salacious nonsense in her books.

#27 Taxpayer like everyone else on 11.02.10 at 9:26 pm

Deposit insurance is an illusion. — Garth

Howz that bank run workin’ out for ya?

14 NFN – you may enjoy the 60 minutes episode where they covered a small bank failure in Chicago IIRC.

A elderly gent walked into the bank bag in hand wanting his $90k in cash. Of course the FDIC official said no, but not to worry, the “money” is there. Seemed to work as the man left satisfied. Bottom line was a coupla $M from FDIC (assets were like $100M?) and the bank was gobbled by another and life carried on. I think the number of failures has now used up the piggy bank so FDIC calls on the treasury. Keep in mind they only have to come up with the amount that keeps the bank solvent and they guarantee the credit you have in your account, not the money. Perhaps why Garth calls it an illusion.

#28 Vanman on 11.02.10 at 9:27 pm

“•But prices are up – 9% on new units and 10% on resales. The overriding reason is that nine out of ten buyers are first-timers, qualifying for 5% down, 95% mortgages and 100% vacuity.”

Garth, do you have a reference for the stat that 9 out of 10 buyers are first-timers? How much higher is this than say this time 5 years ago?

#29 Christian on 11.02.10 at 9:27 pm

“By shovelling Republicans into Congress, Americans have turned their backs on Keynesian economics, which means there will be no more stimulus spending.”

You must have made an error here. They don’t have much choice — if they stop quantitative easing, the country is going down the drain.

Commodities prices will go through the roof. Miners and their providers will do well.

#30 OttawaMike on 11.02.10 at 9:37 pm

Just back from Home Despot. I had an interesting conversation with a staffer who recently returned from living in Pheonix working as a fire sprinkler specialist under a work permit.
He purchased a town house in 2003 for 85k$ and added 15k$ in material plus sweat equity.
House went to 200k$ valuation when he became unemployed. He returned to Canada with his family leaving the house which he had long before fully leveraged via a refinance.
Asked bank for a revised mortgage of 95k$ to reflect today’s value of 75k$ but bank would not play ball on an income property.

Nov.1 the house goes to bank and sprinkler man does not give a rat’s ass because he has extracted the wealth via the refi. Claims even his credit rating is OK here in Canada because he was registered down there under a social security number.

I asked him if he’s buying here? No way he knows what’s coming as he’s lived at ground zero. Renting and waiting. Claims Pheonix is a screaming buy now due to the wave of retiring boomers and its climate, ambiance and rent purchase ratio.

This guy really got it and he is a Tea Part supporter. I thought you had to have your brain removed to participate in the Tea Party movement but I stand corrected.

#31 Publius Enigma on 11.02.10 at 9:40 pm

#17 Christian
“You must have made an error here. They don’t have much choice — if they stop quantitative easing, the country is going down the drain.”

You’ve made the error. Quantitative easing is not a synonym for stimulus spending.

#32 Jimbo on 11.02.10 at 9:40 pm

Still waiting for the Brampton Real Estate Board to Post Sept Stats.

I sold in July. Kind of curious. Wana see if I did the right thing?

Email them put some presure. I want the stats.

http://www.bramptonandarearealestate.com/2010_Residential.html

There email [email protected]

#33 Patz on 11.02.10 at 10:00 pm

Popeye the sailer man posted this link yesterday but if you haven’t seen it treat yourself. Fox’s Bulls and Bears December 2006, with Peter Schiff, Ben Stein and some other forgettables. They dump all over Schiff who, in retrospect, called it EXACTLY! They laugh at him like he’s a duffus and shake their heads at his stupidity. One guy is a REmax agent and he’s practically flipping Schiff the bird. “Nuff said, watch it!
http://www.youtube.com/watch?v=60CLQse27p8

#34 Bilbo on 11.02.10 at 10:03 pm

Vancouver Island has seen a $42,500 median price drop (or -12%) in the last 5 months. $8,500 tax-free per month sure is alot to give away. You would have to earn approximately $15,000 per month before tax to make up for that loss.

October 2010
http://www.vireb.com/assets/images/pdf/10-oct_10_sales_summary.pdf

May 2010
http://www.vireb.com/assets/images/pdf/01-june_10_sales_summary.pdf

#35 Bond Bull Done on 11.02.10 at 10:05 pm

Another sign Bonds are Done.

Bond bubble burst will gut gilt investors,
warns Merrill Lynch

http://blogs.telegraph.co.uk/finance/ianmcowie/100008446/bond-bubble-burst-will-gut-gilt-investors-warns-merrill-lynch/

Bonds are never done. Learn more. — Garth

#36 Chaos on 11.02.10 at 10:14 pm

Theoretically…

The duct tape might work for take-off, as the flap with be retracted and safely ensconced in the wing, well before reaching cruising speed.

I wouldn’t hold out much hope for the duct tape method for a rough landing.

But really…who gives a crap about the landing.

Apparently not Vancourites.

#37 Leanne on 11.02.10 at 10:16 pm

This event is open to blog readers only. Please be prepared to show your membership tat.

You mean the one of the squirrel wearing the cowboy boots? Unfortunately, I only had one place left to put it…don’t think the door guy will want to see that one.

Try me. — Garth

#38 nibs on 11.02.10 at 10:16 pm

Amazingly accurate report from 2001 about the coming US housing mess.

http://www.institutmontaigne.org/medias/documents/06-29-01%20Home%20Without%20Equity%20is%20a%20Rental%20.pdf

Garth is to Canada what these guys were to the US.
Discussed over at Bens blog
http://financialinsights.wordpress.com/2010/11/02/a-home-without-equity-is-just-a-rental-with-debt/

#39 Devore on 11.02.10 at 10:25 pm

So far, six have sold, for a sales-to-listings ratio of just 5%. This raises a serious question: Why would so many owners be dumping? More serious: Where are the buyers?

Super duper serious question: WHO are the buyers?

#40 Patz on 11.02.10 at 10:31 pm

Just to add to the above here’s a suggestion. Watch the clip but imagine Garth in the role of Peter Schiff. Then see how much the others sound like the goofs around us who are still pumping.

#41 Kaganovich on 11.02.10 at 10:32 pm

Publius Enigma

Thanks for pointing that out to the Dawgs…I am afraid that many think they are synonomous.

#42 Dodged-A-Bullit-in Alberta on 11.02.10 at 10:37 pm

Greetings: # 8 {Mike the Engineer}

The tape he is using is called “speed tape” in the aviation world. The photo is symbolic of the measures that may be tried to keep the RE market afloat. Only a temp fix until the wing flap can be removed for a permanent repair. Except in this case, as Garth and others have pointed out, Canadian real estate industry may be beyond repair, defunct like the airline as you related.

#43 Dodged-A-Bullit-in Alberta on 11.02.10 at 10:39 pm

Greetings: My mistake, should have been OttawaMike.

#44 Crash Callaway on 11.02.10 at 10:59 pm

Maybe those 20,000 surplus condos in Toronto will eventually give the poor and homeless a place to finally hang their hat.
They are the ones who payed the heaviest price.

Shameful that basic shelter has become a commodity reserved exclusively for the greedy rich.

#45 hobbygirl on 11.02.10 at 11:25 pm

Garth, you pose an interesting question for me. Yes, media outlets lack critical examination of the facts but my question to you is are there any underground press sites or authors you’d recommend as reading (besides yourself) on these issues? I picked up a few names from people posting on this blog that I found thought provoking (Mark Cuban, Jeff Rubin, etc) but wonder how much more I am missing. Feedback from any of the posters are appreciated as well.

#46 Victoria Boy on 11.02.10 at 11:48 pm

#2 – Jess

What the hell does an oregon policy vote have to do with a canadian real estate blog? Get your own damn blog and quit wasting our time!

#47 Gord In Vancouver on 11.02.10 at 11:49 pm

Still A Great Short?

Whistler-Blackcomb pulls back on IPO pricing

http://www.vancouversun.com/business/Whistler+Blackcomb+pulls+back+pricing/3742353/story.html

#48 Utopia on 11.03.10 at 12:01 am

Two terrific articles in a row Garth. I hardly know where to begin. but then this little tidbit caught my eye regarding your toronto show…..

“This event is open to blog readers only”.

and I was wholly amazed and forgot everything else I was going to say. Is it true? Blog readers only?

The event is not being mentioned elsewhere. — Garth

#49 Nostradamus Le Mad Vlad on 11.03.10 at 12:16 am


Signs of anger and / or rage in the US? Take a gander at the lead-in pic., and read what the it says. Also — Obama People are fed up.

Atmosphere of the sun. Not as hot as the atmosphere of the US Fed!

Bullion Pumpers Get in now while the going’s good!

Heating Up “A number of establishments are seeing surges in foot traffic, long lines outside their doors, growing shortages, and a seemingly insatiable appetite for products that we all enjoy.”

Nine Year housing backlog, and Irish Bond Bubble along with some other stuff.

Bill S-510 places the US under international control.

Heads Up! Deep Impact Two may happen, but we’ll all be a little bid dead by then!

Mom & Pop Shops are laying off as well.

Inferno Good headline and story.

About time, too!

#50 Graph on 11.03.10 at 12:57 am

Garth – can you please let us know where you get the data to support your argument that “nine out of ten buyers are first-timers, qualifying for 5% down, 95% mortgages…”?

#51 Get Real on 11.03.10 at 1:31 am

Very interesting

Home prices likely to fall in India as govt. raises interest rates (already 8.5 percent for home mortgages)

http://business.rediff.com/slide-show/2010/nov/03/slide-show-1-home-prices-may-fall-soon.htm

#52 realpaul on 11.03.10 at 1:33 am

I wouldn’t hope for a ‘cease and desist’ order coming down from capitol Hill any time soon….after all the Bush Repubs were the biggest spending plotters in history. Without QE… which will be announced in a strategic manner on Wed the entire empire will collapse….look for spending on ‘focused’ programs instead…….lots of deer in the headlights porkbarrel rolling down mainstreet. After all…this is the beginning of the presidential election run for 2013 and the GOP has them Liberals on the run. Thinking that spending will abate is not to understand US politics. It will be about pork and earmarks….less about blanket healthcare and financial reform.

Lets look straight in the eye of the issue…the USD based economy is the only show that matters…..all others are a miniscule percentage of global GDP. If Wallmart were to pull out of China that country would collapse…so dependant on the US market is the factory based Chinese economy…bitch all you want about the Americans…but the Chinese know they’re in a corner and can’t unhinge themselves from the export market that provides them with 90% of their GDP. The USD can go down 50% and theres really nothing the Chinese can do about it without killing their own economy. Margins on the slave labour that the Chinese and other third world economies run on provide obscene profits for the ruling class…. a haircut in the value of thier foriegn reserves essentially amounts to nothing.

Expect more of the same after tomorrows announcement that the world is still turning.

#53 The Original Dave on 11.03.10 at 1:39 am

Super G, I want to confirm again with administration people that they’ve got me down for 4 people. I signed for 2, then saw that we could register 4 and did. I then cancelled the original 2. I hope this all went through properly. Hopefully it wasn’t too much confusion and I apologize in advance.

#54 Aussie Roy on 11.03.10 at 1:41 am

Aussie Update.

Like all markets with a shortage, it can turn to glut without building a single house. Is it Australias turn to discover this truth.

Housing shortage? What housing shortage?
http://www.watoday.com.au/wa-news/housing-shortage-what-housing-shortage-20101021-16vva.html

Gold medal for Australia – AGAIN.
http://www.businessinsider.com/most-overpriced-housing-markets-2010-10#1-australia-12

More stimulus is all we need.
http://www.news.com.au/money/property/lack-of-stimulus-weighing-on-house-prices-says-economists/story-e6frfmd0-1225946173742#ixzz14AK0KCKG

But house prices in Australia only ever go up, coz its different here?.
http://www.watoday.com.au/wa-news/house-prices-slump-as-sellers-drop-prices-20101015-16nee.html

We really do have a shortage – of buyers.
http://www.watoday.com.au/wa-news/where-have-all-the-home-buyers-gone-20101011-16f9u.html

#55 Dumfukanuk on 11.03.10 at 1:52 am

Canada’s housing market is absolutely correcting

http://techrepublic.com.com/5208-6230-0.html?forumID=8&threadID=168306&start=0

#56 Devore on 11.03.10 at 2:00 am

#35 Bond Bull Done

Another sign Bonds are Done.

Bond bubble burst will gut gilt investors,
warns Merrill Lynch

Once Goldman gets on the bandwagon, you can be sure bonds are about to go higher. These guys have their brokers say one thing, while their prop desk takes the opposite trade. Guess who wins?

#57 dd on 11.03.10 at 6:09 am

…Americans have turned their backs on Keynesian economics…

Are you on glue? What do you think the Fed is going to annouce today? The white guard replaces the red guard. The wheel keeps turning. Trade and budget deficits will be higher in one years time and the market will be expecting Qe4. QE is just the Fed buying bonds because nobody else will.

#58 dd on 11.03.10 at 6:13 am

…it probably means the American housing market …This may accelerate a recovery…

Guessing that it might? A lot will have to happen for a real recovery to take place.

#59 the kenverine on 11.03.10 at 6:15 am

Last night’s election results accurately reflect our current political dichotomy down here. Middle America, a productive, economically conservative Republic surrounded by the two coastal dependencies of NoCal and NooYawk.

the kenverine TN

#60 David B on 11.03.10 at 6:29 am

Although the stock markets are up, stay tuned there can big trouble as the Tea Party start to make demands not on Obama but on GOP who are use to spending (Pork) like no others…. the best of times the worst of times…

#61 dd on 11.03.10 at 6:46 am

#60 David B

…Tea Party start to make demands..

It will not matter. If the government cannot spend they will let the Fed do the work for them. I doubt that the republicans can stomach the medicine that will be needed to turn the economcy around. America has to go through a lot of pain before any real recovery can take place. It will happen. Question is … when?

#62 Brian1 on 11.03.10 at 7:07 am

So to get into the event I must prove I’m a blog reader? I use a tat? I could wear a name tag. Perhaps I received something in Email I am not aware of. I could wear a name tag.

Dress like a rodent. — Garth

#63 Nancy on 11.03.10 at 7:15 am

It’s hard to say what the Republicans in the House will do. Their platforms revealed no plans. The teapartiers were talking about Reaganomics, the same economics that created the 2008 mess in the first place!

So will they allow houses to freefall? I doubt it. Voters elected the Republicans because they were mad about the housing thing. They’re demanding things, but all contradictory. They don’t want to pay for anything, and they want the problem fixed.

What the Republicans will do is obstruct efforts of the Senate and president to get any motions passed – just on principle. Nothing will get done. The mortgage crisis will stay in limbo.

#64 lonely limey on 11.03.10 at 7:40 am

Wish the papers here would print something like this:

http://tinyurl.com/3ywzsob

#65 Kaganovich on 11.03.10 at 7:50 am

Must watch!

The conversation over progressive taxation is firing up in the US and is rife with contradictions. Some are starting to grasp just how huge the chasm is between rich and poor and what this may mean for their future. Perhaps Gates Sr. had some time to study the French Revolution!? Who knows?

http://dailybail.com/home/60-minutes-fixing-the-deficit-by-taxing-the-rich-video.html?utm_source=patrick.net#siteTitleWrapper

#66 Prof ANON on 11.03.10 at 7:51 am

The idea that any MP/Congress Person/President/Prime Minister has a large degree of immediate control over an economy is flawed.

#67 luketheduke on 11.03.10 at 8:07 am

Garth,

you are very funny calling millionaires idiots…maybe you
should watch and learn and you wouldn’t have to defend
your views on a blog full of them…

#68 Joe Q. on 11.03.10 at 8:14 am

Garth — Toronto sales numbers for October just out this morning (I watch this stuff obsessively).

Relative to last October, sales down 21%, new listings down 8%, active inventory up 24%. Days-on-market up 19%. Average sale price much higher than last year. Median sale price just a little higher than last year.

The actual number of sales this October was 6,681. This is comparable to the sales volume in October 2004. Every other October (save for 2008) has been better.

#69 Insider Selling on 11.03.10 at 8:37 am

Could we be at a top?

Stock market newsletter publisher Alan Newman from Crosscurrents has written extensively about insider selling in his recent issue. His findings are stunning to say the least: Going back all the way to 1990 insider selling has never been as intense as during the past weeks.

http://www.moneyandmarkets.com/sentiment-indicators-signaling-a-major-top-40670

#70 BrianT on 11.03.10 at 8:41 am

#45Hobby-they all link to many others so you will start with a few and soon have too many-start with Financial Sense,The Automatic Earth, Mish economics.

#71 TheBestPlaceonEarth on 11.03.10 at 8:52 am

Average condo prices are about 30% higher than just sixty months ago
*****
So let’s do the math, that 500,000 condo is up 150 grand tax free. Meanwhile Mr Renter in the above scenario has forked out 80 grand or so never to be recovered. You don’t need to be an accountant to do the math and figured out who made the mistake, as always long term the renter gets slaughtered. By the way a condo development went up for sale in Gastown the other day, lineups around the block. Enjoy shovelling and cold weather Canada, the BestPlaceonEarth also has the BestWeatherinCanada. In other news laneway housing is moving ahead. The demand is SO HUGE that traditional residential lots are being allowed to build laneway housing. Oh yeah but I forgot there is a real estate bubble and people aren’t going to want to buy – right. Sit back watch and learn, VANCOUVERISGOIN UP every day, oh yeah

#72 Hiteclowtec on 11.03.10 at 8:59 am

The Fed issues .25% bonds then buy`s them back. For what purpose ? or are they forced to buy them because no one is interested in .25% ?

How can you buy your own debt when your broke to begin with ? unless you can print more worthless IOU`s . ($)

Totally confused ,so I dumped TIP for a capital gain and moved the ($) to Australia EWA & FAX . At least they pay interest on their debt and good dividends.

#73 Devil's Advocate on 11.03.10 at 9:02 am

There’s absolutely no pent-up demand. – Garth

There is always a pent-up demand, always.

Until such time as some catastrophic event wipes out a significant portion of the population the demand will remain, indeed it will increase with an increasing population. That it simply has not yet revealed itself as it lies in wait of lower prices is what gives rise to it being called “pent-up demand”.

Simple economics 101 – it’s what got us here in the first place and it’s what will get us out.

All we are debating here is to what extent prices must fall before that “pent-up” demand makes clear its expectation. What is hard to determine is whether your expectation is that which the majority hold back in anticipation of. I suspect you have the pups and poodles on such a short leash that they will miss it when it happens. They will be too busy gnawing on the bones you toss them to see the steak laid at the doorstep.

It will happen, we both know that Garth… you are just too busy making your own hay to acknowledge the market for beef. ;-)

#74 David B on 11.03.10 at 9:08 am

#61 dd on 11.03.10 at 6:46 am

Yes in deed, being in charge means they are now responsible. I am sure the American people will be reminded more now of just what they did get from Obama.

———-from the net
While the right would like you to forget it, President Obama has pushed through a historic agenda over the past 18 months: saving the economy from sure collapse, securing a future for GM, Ford and Chrysler, providing health care for more than 30 million, ending the war in Iraq and passing real tax breaks for 95 percent of taxpayers.
———————————————-cc

The more things change the more they remain the same. If the Republicans blame Obama rather than produce a balance budget while creating jobs, voter will not be happy. And they are looking for instant action. And this new set of clowns have not found the executive washroom rooms yet.

And that will take until Christmas …..LOL

#75 THS on 11.03.10 at 9:14 am

Superior Court precedent decision on terminating unit at Trump Tower in Toronto. Could make things interesting as market tanks.

http://www.canlii.org/eliisa/search.do?language=en&searchTitle=Ontario&sortOrder=relevance&searchPage=eliisa%2FjurisdictionSearch.vm&jurisdiction=on&text=talon+&id=&startDate=&endDate=&legislation=legislation&caselaw=courts&boardTribunal=tribunals

#76 Devil's Advocate on 11.03.10 at 9:15 am

”It will happen, we both know that Garth… you are just too busy making your own hay to acknowledge the market for beef.” – DA

The hay feeds the beef which fertilize the next harvest of hay. We’re all in this together. This is just one of those necessary parts of the great cycle of life. Are you livin’ it or just watchin’ it?

#77 Dan on 11.03.10 at 9:18 am

Realtor bestplaceonearth is running scared as the housing crash has gotten worse. People don’t be fooled by the MSMafia who is paid to LIE. The fact is people are going BANKRUPT right now and losing their condos and houses. Right down there is tens of thousands of people who are trying to sell before they go bankrupt. Canadas housing market is the biggest housing ponzi in the world. You have to ask yourself why would realtors come on this blog? Why is the MSMafia printing and saying our right lies? Vested interest do not want you the puppet masses to know the truth. They pay the MSmafia hush money. The housing crash is a fact. Power of sales increasing is also a fact.

POP………………..

Realtor Thebestplaceonearth………….. I’m ruined if no more greaterfools buy.

Greaterfools…………….I lost my condo and have gone bankrupt. thanks for nothing you liar realtors and MSM. If the market was so strong why have sales crashed and I gone bankrupt?

Mortgage brokers……….Can it get any worse?

#78 Devil's Advocate on 11.03.10 at 9:23 am

Seriously, I told my investment advisor about three years ago his business was poised to produce while mine grew fallow – but for a time.

#79 David B on 11.03.10 at 9:26 am

Here is where the Republicans start with as of this morning. And the poeple voted for a balance budget and jobs, jobs. Note the real unemployment #’s

Check this out ……

http://www.usdebtclock.org/#

#80 Dodged-A-Bullit-in Alberta on 11.03.10 at 9:42 am

Greetings: # 75 THS: It is postings like this that make “The Greater Fool” the best blog in Canada. You can bet that the MSM will not carry this story.

#81 Pete on 11.03.10 at 9:48 am

Jimbo # 32

Brampton RE is in big trouble. There are alot of homes which are now power of sales. Sale have tanked hard and many peolpe are trying to get out of brampton. This why the RE board in Brampton does not want to report. People have no idea of how weak and bad the overall GTA housing market has become. Sales are down for October 21% which marked a 20% plus drop in sales for the last six months. If people don`t know the RE market is in trouble and thousands of people face going bankrupt are clueless to reality. Canada has one of the biggest housing ponzi in the world and the realtors know it. They also make a living selling to greaterfools and dummies. A realtor will never say its a bad time. Spread the word around the net and tell your crying co-workers who`s on the phone trying to sell or rent at a loss their condo before they go bankrupt. This story is being played out all over Canada in the tens of thousands. Imagine how big the house of card has become and now starting to fall apart.

#82 Devil's Advocate on 11.03.10 at 9:51 am

#78 Devil’s Advocate on 11.03.10 at 9:23 am
Seriously, I told my investment advisor about three years ago his business was poised to produce while mine grew fallow – but for a time.

Actually it was the year my son graduated 5 years ago.

Man does time fly. Well be back at ‘er before ya know it… Timing – it’s got a lot to do with the outcome of a good raindance.

#83 jess on 11.03.10 at 9:51 am

“lenders make mistakes
and washington makes believe”

Mr.Black. calls the massive frauds, “echo epidemics.”
http://www.msnbc.msn.com/id/21134540/vp/39836703#39836703

#84 Hiteclowtec on 11.03.10 at 10:12 am

#45 hobbygirl

Financial Sense with Jim Poplava . He talks with many authors and is not over the top like a Max Keiser and others.
http://www.financialsense.com/financial-sense-newshour

It would be great if he would get Garth on the show but they are America focused mostly, except for mining and energy.

James Howard Kunstler is my favorite Monday morning read. After greaterfool of course.

#85 Zero Interest Rate Policy on 11.03.10 at 10:15 am

In anticipation of significant change in the US (QE2 and politics) it appears the winds are shifting.

I don’t think we’ll notice anything overnight, but I get the feeling this will prove to be yet another failed attempt at ‘managing the process’. Truth is, we have zero control.

Great commentary on ZIRP and Unintended Consequences: http://www.planbeconomics.com/2010/11/02/must-read-guest-zirp-and-the-law-of-unintended-consequences/

#86 Devil's Advocate on 11.03.10 at 10:25 am

Did I forget to tell you about the new garden my wife planted this last spring? Like I was telling you earlier, there’s always cycles and seasons. This downturn is something I told you would happen. I told her the same thing, go with the flow honey.
Keep your head up.
Don’t stop believin’
Never say never.
Remember the gipper.
The harder you work the luckier you get.
To make friends be a friend
Make hay while the sun is shining.
Keep your nose clean.

#87 mid-Ontario on 11.03.10 at 10:26 am

The US elections were not about replacing the president, just slapping him around. By shovelling Republicans into Congress, Americans have turned their backs on Keynesian economics, which means there will be no more stimulus spending, no quick change to grim unemployment stats and a pissy mood. -Garth

QE2 will come from the Fed starting this week. Congress has no control. It is the only weapon keeping the ship afloat. I expect 2T of QE over the next 1-2 years.

As long as the US is the world policeman and the OTC derivatives float around the globe, the march towards the cliff will continue.

#88 Contrarian on 11.03.10 at 10:43 am

>>Sales of new units in the latest quarter were down 24% from the summer and 18% from a year ago. Ouch.

This is a little misleading. Sales are returning to average levels. The high numbers for October, 2007 and October, 2009 were the anomalies.

#89 Drake on 11.03.10 at 10:48 am

Was that an Air Canada jet in the photo? Fifteen years ago I got on an AC flight where bits of the plane where being held together by duct tape…looked like Red Green Airlines. After sitting on the runway for two hours they announced the plane had a “problem” and we were taken off (they didn’t do much to help us continue our flight, in my case, to my father’s funeral). That pic brought back so many memories.

#90 jess on 11.03.10 at 10:53 am

What effect would fracking have on this river basin?
The Thames flows west 273 kilometres (170 mi)[3] through southwestern Ontario, through the cities of Woodstock, London and Chatham to Lighthouse Cove on Lake St. Clair. Its drainage basin is 5,825 square kilometres (2,249 sq mi).[3]
=========================
http://www.cbc.ca/documentaries/passionateeyeshowcase/
burning water
=====================
http://gaslandthemovie.com/whats-fracking
===============
In 2008, ProPublica reported that there were over 1,000 cases documented by courts and local governments in Colorado, New Mexico, Alabama, Ohio, and Pennsylvania, where fracking is a suspected cause of drinking water contamination. This is also happening in Canada. After going public about her dogs refusing to drink her well water and of her getting burns and rashes from taking a shower, a woman in small Alberta-town Rosebud says that 50 landowners came forward telling similar stories. According to this woman, groundwater contamination from fracking is widespread in Alberta.

Because of the controversies surrounding this process, fracking has been banned in New York State until proven safe. It is disappointing that provinces in Canada have not introduced their own ban on this process in order to protect their citizens and our environment from such unnecessary risks.
====
LITTLE ROCK, Ark. — Arkansas soon could become the second state to require companies to reveal what chemicals they use in drilling natural gas wells.

The state Oil and Gas Commission is in the final stages of developing a rule concerning a process known as hydraulic fracturing, or “fracking.” Wyoming passed a measure last month that requires well operators to disclose all chemicals used during the fracking process.
=
http://thetyee.ca/Mediacheck/2010/06/23/FrackingFilm/
http://www.star-telegram.com/2010/07/01/2309237/denton-johnson-county-residents.html#ixzz13tar0eg1

To find out, Bank and her colleagues at UB scanned the surfaces of Marcellus shale samples from Western New York and Pennsylvania. Using sensitive chemical instruments, they created a chemical map of the surfaces to determine the precise location in the shale of the hydrocarbons, the organic compounds containing natural gas.

“We found that the uranium and the hydrocarbons are in the same physical space,” says Bank. “We found that they are not just physically — but also chemically — bound.

#91 WINNIPEGER on 11.03.10 at 10:54 am

http://www.winnipegfreepress.com/business/us-meltdown-hits-home-106596503.html

#92 BrianT on 11.03.10 at 11:02 am

#71-That BC weather thing is illogical-if you are going to “retire” there for weather, you would be far better off to buy a place in Windsor or Fort Erie and another winter place in Cape Coral, etc. The combined cost would be very low compared to your town, and the actual weather would be far superior.

#93 dark sad person on 11.03.10 at 11:23 am

For Canada, this is not good. The US dollar may decline further, pushing ours up, turning exports toxic and stealing jobs. There’s now good reason to believe the next two or three years will indeed be borderline deflationary, with stagnant wages and precious few new jobs.

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

It wont be good for Canada for sure-
I think the opposite may happen with exchange rates-if the US decides not to QE-
The USD and Bonds will likely go up and the Stock Market could go down big- as all the wrong sided Inflationist’s bail out-
Gold could fall big as well (initially)
Inflationists bought Gold for all the wrong reasons and now they will sell it for all the same wrong reasons-
It’s a bitch trying to make money-when you’re wrong on what moves Gold and Currency Markets-
Inflationists are the weak hands buying Commodities and Gold and shorting the USD–
Flush em out-buy up their positions at the bottom and then move on without them-this is what it takes to make a Bull Market-

#94 Devore on 11.03.10 at 11:33 am

Americans have turned their backs on Keynesian economics

Americans have only turned their backs on (some) incumbents, who failed to work magic, failed to create jobs for everyone, and failed to reverse house price declines. They can’t even spell Keynesian. They still expect the guys in Washington to “do something about it” and make it better. Expect more of basically the same on the economic/fiscal/monetary front.

#95 Keith in Calgary on 11.03.10 at 11:36 am

Criticizing realtors may have been a grave mistake from my part.
Speculation and high prices/crash are one thing.
Realtors that really work hard and have their clients’ best interests at heart is another thing.
There are many professional realtors out there that are established, have gained the confidence of 100’s and are community contributors.
For my part, this new career as a realtor is very difficult compared to selling Porsches or banking in the 80’s. I have a renewed respect for realtors and will strive mightily to become a successful, reliable real estate professional.

#96 grantmi on 11.03.10 at 11:40 am

Same with the Greater Fraser Valley – BC. (Home of the 2nd largest city in Greater Vancouver – Surrey)

http://bit.ly/aHx5Tg

October Prices slightly up from last year… but sales plunging, (-40.5% from Oct 2009), and listing up some. (8.6%)

It’s going to be hard to hit overall number for 2009 at this pace. The region has to sell 3,800 units in the next two month. Not likely! (1,260 – Dec 09, 1,522 – Nov. 09 = 2,782 total)

EVEN if the Nov. and Dec. sales match last years. (Which it won’t!) You’ll be taking close to $17,000,000 (approx) in Real Estate commissions out of pocket for all of this year from last!

OUCH! big chunk of change!

Might not be any Tickle Me Mickey Mouse’s under the Christmas Tree for Jannie or Johnny this year.

#97 Dodged-A-Bullit-in Alberta on 11.03.10 at 11:41 am

Greetings: #89 Drake: Your poke at Air Canada was uncalled for. The airline in the photo was in India. No matter what you think of AC customer service, their maintenance is excellent, be thankful you live in Canada eh!!!

#98 ulsterman on 11.03.10 at 11:52 am

Best Place on Earth said: “So let’s do the math, that 500,000 condo is up 150 grand tax free. Meanwhile Mr Renter in the above scenario has forked out 80 grand or so never to be recovered. You don’t need to be an accountant to do the math and figured out who made the mistake, as always long term the renter gets slaughtered.”

BPOE, you’re correct – with capital appreciation a buyer has done extremely well over the past 5 years. However, using an interest rate of 4%, 25 amortization, monthly payments etc RBC says i would have rented the 500,000 from them for $93,073. So i guess that too could have been described as “thrown away”.

What if the last 5 years was not a bubble period and the market had been flat or, horror of horrors, declined. Suddenly the non-deductible capital loss and the $93k paid to rent the lump sum from RBC would not have been such a “no-brainer”, to use the professional term.

So, this time you would be a very happy home owner, but let’s not get too smug about all this.

#99 Evangeline on 11.03.10 at 12:30 pm

#52 ((If Wallmart were to pull out of China that country would collapse…so dependant on the US market is the factory based Chinese economy…bitch all you want about the Americans…))

Another important consideration is that because the USD is the world’s reserve currency, China needs lots of U.S. dollars in hand with which to transact its massive worldwide resource purchases.

I just listened to a Peter Schiff video and he keeps going on about how other countries are so productive while the U.S. is merely a consumer society. That analysis is too simplex, imo. Wealth today is generated by intellectual property, not by factories. And the U.S. still has the leading edge on intellectual property, design, innovation etc. even though they farm out actual factory production.

#100 househunter on 11.03.10 at 12:32 pm

Garth. I dont understand why prices in Vancouver are not falling. There is a 36.9 per cent decline in sales from the from October 2009. Total active listings on the Multiple Listing Service inceased by 16.4 per cent from October 2009. If Sales are down and supply is up, wouldnt the prices be lower? I’m not getting the fundamentals here.

#101 Devil's Advocate on 11.03.10 at 12:43 pm

#86 Devil’s Advocate on 11.03.10 at 10:25 am
Did I forget to tell you about the new garden my wife planted this last spring? Like I was telling you earlier, there’s always cycles and seasons. This downturn is something I told you would happen. I told her the same thing, go with the flow honey.
Keep your head up.
Don’t stop believin’
Never say never.
Remember the gipper.
The harder you work the luckier you get.
To make friends be a friend
Make hay while the sun is shining.
Keep your nose clean.

No my posting but if my self appointed protege keeps it up at this level I will soon be able to abandon these blogs knowing my work is being done. The power of co-peration. ;-)

#102 Evangeline on 11.03.10 at 12:45 pm

#94 ((They can’t even spell Keynesian.))

partially true

Is Obama a Keynesian?

http://www.youtube.com/watch?v=_23Nt5XumaU

#103 Evangeline on 11.03.10 at 12:51 pm

#63 ((The teapartiers were talking about Reaganomics, the same economics that created the 2008 mess in the first place!))

Please explain how Reagaonomics had anything to do with the affordable housing policies that led to banks soften their underwriting policies.

#104 Dan in Victoria on 11.03.10 at 12:57 pm

Hobby Girl @45.
I follow about 10 sites that are very good.
A lot like here though you have to critically think. Lots of Nut Bars out there.
Heres one site out of the UK that is peak oil related.
These guys are a fracture of the old LATOC site.
They are pretty level headed …..so far.
Breaking news is good. Lots of links if you look.
http://www.hubberts-arms.org/index.php

#105 Right All The Time on 11.03.10 at 1:15 pm

http://agentwill.com/statistics/october-2010-vancouver-real-estate-stats-released

What? A balanced and flat market now exists in Vancouver?

But, but, but…all the bears claimed that this could not happen….

Gee, another scenario that the bears thought couldn’t materialize and failed to anticipate.

Now lets check the record of predictions for Vancouver…

First, the ominous crash following the end of the Olympic hype. Nope – never materialized.

Second, the dreaded new mortgage rules making it tougher for investment properties and flippers in Vancouver and Toronto. Nope – investors just learned that they could put their properties in their relative’s names, and continue to get the 5% down mortgage (and bypass the 20%). Do you really expect the populace to play by the rules when there is a clash of cultural norms in Vancouver?

Third, the much hated HST. Well, as bears are fond of saying, they only target new builds, which in Vancouver constitute a fraction of the overall market. This has actually caused new builds to dry up in part, which in turn, has put pressure on the resale market and its ever shrinking inventory.

My, my bears…

Your most recent predictions have certainly been most fruitful! Thank goodness people took your advice to sell in 2008.

Oh, I know, we are on the edge of a bubble cliff, just like the US was in 2005. But of course, we have supposedly been on the cliff since 2005 in Vancouver. That sure is a long time to be waiting for Vancouver to fall off the edge…

Bidding wars, and lineups continue in this best place on Earth…

Oh well, I am sure that 2011 will be different…just like 2009 and 2010 was supposed to be…

#106 grantmi on 11.03.10 at 1:15 pm

Here’s the other WEALTH trap I’m noticing on housing!!

Two homes in my area.. did NOT sell after 6 months on the market this summer. Both pulled the listings!!

now who moved in!!!! You got it! the RENO GUYS!!!

Both homes have dumpsters in front of their homes… and I guess the RE Dude (or Dudette) convinced them in order to sell their 1980’s style home, they’re going to have to up grade to current standards!!

and Down the Drain it continues to go…. more cash.. being thrown at a dropping asset!! More greater fools!!

#107 Joel Toronto on 11.03.10 at 1:17 pm

Buy now before you are priced out of the market for ever!

It’s different here!

Real Estate only goes up!

Rich Chinese and Iranians are buying every thing!

And make sure you sign a B.R.A immediately!

#108 pablo on 11.03.10 at 1:17 pm

So why catch a falling knife? Just stand back. See what dies.
Check out the video on utube titled End of Liberty. This is some scary shitstorm coming to a country near you soon!!
http://www.youtube.com/watch?v=AQv-sdMCClQ&feature=player_embedded

#109 pablo on 11.03.10 at 1:19 pm

End of Liberty http://www.youtube.com/watch?v=AQv-sdMCClQ&feature=player_embedded

#110 Kitchener1 on 11.03.10 at 1:34 pm

#73 DA

re: pent up demand

umm, have you looked down South-US in the last 4 years? How about Ireland/Spain etc..

Sure looks like there is no pent up demand out there? What catastrophic diaster happen in those countries?

What happened to the pent up demand in the GTA from 1989 to 2002? Its always there right?

Read my lips:

7 out of 10 people already own a home, many own 2 or more properties, that means there are only 3, yes 3 people out of 10 that do not own a home already.

Out of those 3, some are bankrupt or have bad credit and cannot qualify, another one probley does not have the income required and a third one just does not care about owning a home. Add to that that Canadians as a whole (including those that own are 150% income to debt) and what does that tell us about the likelyhood of people borrowing or banks extending credit?

Yes, RE will always move and always sell, but, at what price?

We will never, ever get to 100% owner occupancy, im thinkign that 70% is already to high a number, statistically, from an average income vs average home price point of view (Im talking all of Canada here).

One day when this bubble burts its going to make awesome econnomic textboob material.

Be sure to check back in when we are 12-14 months inventory in RE and tell us again about pent up demand.

#111 Kitchener1 on 11.03.10 at 1:35 pm

#73 DA

re: pent up demand

umm, have you looked down South-US in the last 4 years? How about Ireland/Spain etc..

Sure looks like there is no pent up demand out there? What catastrophic diaster happen in those countries?

What happened to the pent up demand in the GTA from 1989 to 2002? Its always there right?

Be sure to check back in when we are 12-14 months inventory in RE and tell us again about pent up demand.

#112 Devil's Advocate on 11.03.10 at 1:37 pm

This will not end well. I’ve been telling Garth this for a long time now. If he would have listened to me in the first place he wouldn’t have to spend so much time writing about how real estate is in trouble. This has consistently been my approach to this delicate subject.

Real Estate is ready for a correction and I’m very good with it. My daughter really likes the house we live in.
A big thanks to the person who is impersonating me. I am very flattered. They are making my life a lot easier because it takes a lot of effort to write these entries and respond in kind.

Remember, don’t be fooled by a false Devil’s Advocate.

#113 Jan Etter on 11.03.10 at 1:48 pm

I’m surprised no one has yet commented on: 1) how the failure of the Prop to legalize maryjane in Cali means BC Bud money will continue to be laundered through BC real estate, and 2) The Agenda with Steve Paikin on TVO last night “The Case Against Home Ownership”. If you didn’t get a chance to watch you can view the podcast at tvo.org.

#114 Devil's Advocate on 11.03.10 at 1:50 pm

One final note before I shove off and adandon these blogs knowing the work is being done by my protege

Oh, life is a glorious cycle of song,
A medley of extemporanea;
And love is a thing that can never go wrong;
And I am Marie of Romania.

#115 BrianT on 11.03.10 at 1:51 pm

The headline right now is-FED to spend 600 Billion (initially) to boost economy. The entire US economy only pulls in 2.1 trillion revenue from all sources annually-so by snapping his fingers this guy has magically created 29% of an entire years revenue from taxation. I guess the next question is why not just do away with any form of taxation at all-take Reaganomics to the next level-with the “Fed” ready to create trillions of dollars from thin air that 2.1 trillion seems to be rather a waste of time and energy to recover.

#116 PTDBD on 11.03.10 at 1:53 pm

The bearded paperprestidigitizer anounced his exit strategy to money printing today.
….Sorcerer’s Apprentice comes to mind

#117 Herb on 11.03.10 at 1:55 pm

This is America, and people here have he absolute right to be gullible and hypocritical, just as they have the absolute right to educate themselves and make informed decisions.

(CBC reporter Neil MacDonald on The National, 31 Oct 10, 33:16 – 36:16.)

The “gullible and hypocritical” having carried the day, let’s see how we all make out.

#118 hobbygirl on 11.03.10 at 1:57 pm

#70 Brian T, # 84 Hiteclowtec, # 104 Dan in Victoria:

Thanks SO much for that input to people and links! I find myself ever so confused from what common sense is telling me and how markets are doing, the additional readings will help a great deal. Again thanks guys!

#119 poco on 11.03.10 at 1:58 pm

BC news –Campbell resigns

#120 Mickey the Realtor on 11.03.10 at 2:02 pm

DA, I’m looking for some advice from a seasoned realtor, I’m sure Keith would love to hear some ideas on how to succeed in this environment. Hopefully somewhere between your bike ride and shrub planting you can take a little time and educate us newbies.

#121 Dodged-A-Bullit-in Alberta on 11.03.10 at 2:03 pm

Greetings: # 99 Evangeline: “Wealth today is generated by intellectual property, not by factories.”

I challenge you to say that to every citizen who has seen their jobs outsourced, have lost their paycheques, and can no longer pay their bills. Intellectual property is great, however the Chinese and Indians soon learn to duplicate it and the value is destroyed. Maybe you should surf the WWW and read about homes built with imported drywall, how about contaminated pet food and other consumer products??? Do you think intellectual property can feed yourself and family? Whose wealth is created???? We have factories in Alberta, and they support many people and provide Canadians with foodstuffs, try going hungry for a few days, see if you can survive on “intellectual property”.

#122 GregW, Oakville on 11.03.10 at 2:07 pm

Hi #49, Thanks for the heads up!

Our farmers are going to loosing the right to grow ‘normal’ food for us all!!! Could you even loose the right to grow your own ‘normal’ food or even buy any of it?

MP’s in Ottawa are you paying attention???
Do you care about your families food supply?
Do you even know what is in the Bills you vote for?

Canada’s National Farmers Union wants the Canada-EU trade deal scrapped.

Posted on October 31, 2010
Leaked trade agreements and hidden dangers of S 510: Corporations plan to end normal farming.
http://foodfreedom.wordpress.com/2010/10/31/leaked-trade-agreements-and-hidden-things-inside-s-510-corporations-plan-to-end-normal-farming/

“If people let the government decide what foods they eat and what medicines they take, their bodies will soon be in as sorry a state as are the souls of those who live under tyranny.”
~Thomas Jefferson

#123 Scalgary on 11.03.10 at 2:12 pm

Its different here in Calgary…

That too when condo sales dropped nearly 50% this October…!

When University struggling to meet its budget and laying off staff, our greater fools find this one a great opportunity:

http://www.calgaryherald.com/business/Buyers+line+Calgary+condo+project/3766219/story.html

This will be a good motivator for builders to go for a reduced price condos, which eventually give impact on old condos in the market…

#124 Increasing that 1% on 11.03.10 at 2:14 pm

Re: #95. Keith in Calgary

It’s ok, sometimes you gotta do what you gotta do…hope they left you with all your fingers–Oh, I’m sure they have as that wouldn’t look very nice when writing up those offers, vs the manicure and properly placed not too flashy carefully chosen jewelry piece

———————————————————-
Re: entrance to TO event-
Ok, so, bringing the confirmation via e-mail–jusst in case, a lighter, hygiene prep for the complimentary hug, tat, rodent costume, and… potluck contribution..rright?

#125 Debtfree on 11.03.10 at 2:19 pm

Gordon Campbell resigns today …. good . Now if only harpo and gang were next.

#126 pbrasseur on 11.03.10 at 2:24 pm

Cambell resigns, any chance it has to do with popping the off the chart BC bubble?

#127 jess on 11.03.10 at 2:28 pm

Herb:

Here’s an American speaking in an understandable language.
Bill Moyers speech at Boston University on October 29, 2010, as a part of the Howard Zinn Lecture Series
http://www.truth-out.org/bill-moyers-money-fights-hard-and-it-fights-dirty64766

#128 Devil's Advocate on 11.03.10 at 2:33 pm

Well Mickey, I’d be glad to help. The key to selling real estate is found in the details. First you gotta look like you know what you’re doing. For someone who’se new to this act, you need to get a good attitude – first and foremost.

like I said in an earlier post

Keep your head up.
Don’t stop believin’
Never say never.
Remember the gipper.
The harder you work the luckier you get.
To make friends be a friend
Make hay while the sun is shining.
Keep your nose clean.

I don’t want you to bite off too much when you’re just starting. Take this list and commit it to memory. This will carry you a lot further a bunch of facts and figures.

Remember to tell your newbie friend about the balance in the market, that’s key. There are a ton of great deals out there for people and it’s his job to find those deal and convince people to buy, buy, buy.

Keep your chin up kid.
Remember the gipper.

#129 Devil's Advocate on 11.03.10 at 2:44 pm

Yes things must be soooo bad here in Kelowna. Stopped at the mall to pick up some new shirts and couldn’t find a parking space. The place is packed – it’s Wednesday for freakin cryin’ out loud. Packed. Yes must all be unemployed with nothin else to do but window shop.

#130 BrianT on 11.03.10 at 2:44 pm

#113Big-Like I said before, taxation is outdated, yesterday’s news-as Garth explains, this 600 Billion “will not need to be made up by taxpayers”. Just a GIFT from Uncle Ben (good thing he has such deep pockets)-like I said before, ENRON was just ahead of its time-now their accounting is standard operating procedure.

#131 Debtfree on 11.03.10 at 2:50 pm

@ # 122 I don’t think you know what intellectual property is . Garth been living off of this kind of property for years now and if you look at the second unnumbered page in “The Money Road ” you will read the names of all the printing companies that have prospered by this printing. Read “the notice to readers.” I have also prospered from intellectual property (the Wife’s) . It’s the best kind of property to own … no property tax on it. You can pass it on to your family with no tax hit . If given the chance I would trade all my re holdings for intellectual property of equal value in a heart beat. It’s the ultimate . Turning blank paper into dollars out of thin air and intellect .

#132 Evangeline on 11.03.10 at 3:02 pm

#122 ((We have factories in Alberta, and they support many people and provide Canadians with foodstuffs, try going hungry for a few days, see if you can survive on “intellectual property”.))

I think you missed my point but that’s ok. Who do you think is makes the most money: the people working on assembly lines or the people who design and manufacture the factory’s machinery?

Who generates more wealth: the person who hires the factory workers or a person on an assembly line.

I am not talking about how things should be in the eyes of a Marxist utopia; I am talking about how things are in reality.

#133 Evangeline on 11.03.10 at 3:09 pm

#116 ((I guess the next question is why not just do away with any form of taxation at all-take Reaganomics to the next level-with the “Fed” ready to create trillions of dollars from thin air that 2.1 trillion seems to be rather a waste of time and energy to recover.))

The groupthink about word “Reaganomics” is very funny. In Reagan’s tenure interest rates were extremely high; it actually cost something to borrow money back then. That bears no relationship to the Keynesian monetary policies of today, as espoused by Paul Krugman, and which largely influences the free money monetary policy today.

#134 BrianT on 11.03.10 at 3:14 pm

A primer on accounting for anyone lost on this one: You (the US taxpayer) cannot get funding at the needed rate any longer from your main creditors (China,Japan) so the FED will loan you the money (buy your Treasuries)-where does the FED get this money from to loan to YOU? From the US treasury (YOU)!!!!!! Bernie Madoff would be proud.

#135 triplenet on 11.03.10 at 3:14 pm

#102 – Evangeline

Is Obama a Keynesian?

No – he was born in Hawaii !

#136 TorontoBull on 11.03.10 at 3:16 pm

“That is not spending which will add to the deficit or need to be made up by taxpayers. You should know that. — Garth”
and you should know that TASTAFL!
but you are right this is not considered a Keynesian idea.It is rather a monetarist thing (friedman and dropping dollars off a helicopter)
IMO QE2 will be subject to the law of diminishing returns -economically AND politically – If the Fed have any self preservation instincts they will not exdend it beyond QE2. But you never know, because apparently rational thinking is not FED members’ forte. The major takeaway for me is the increased incertrainty, which is never good for business.
just my 2 cents

#137 dark sad person on 11.03.10 at 3:19 pm

Bernanke’s announcement of his intention to buy the long end-
Kinda went ka-boom in his face-as the words left his mouth–
Great bunch of economists we got running the show-
This is a violent reaction to the best laid plans of Keynesian economists –lol

http://barchart.com/chart.php?sym=ZBZ10&style=technical&p=I&d=M&im=&sd=&ed=&size=M&log=0&t=HLWCDL&v=2&g=1&evnt=1&late=1&o1=&o2=&o3=&x=46&y=10&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=#jump

#138 BrianT on 11.03.10 at 3:20 pm

#135Evangeline-mentioning Marx might be pushing it a little-currently there is an unprecedented level of taxpayer support for “business” -the welfare state doesn’t primarily supply the poor anymore, if it ever did.

#139 Devil's Advocate on 11.03.10 at 3:28 pm

I also stopped by the dog park to take trixie for a little jaunt. Things are sooo bad here is Kelowna. People everywhere have doggie coats and other accessories for their pooches. It’s soooo baaaaad heeeerrre. I am just flipppiing out I’m so freakin’ upset at how our economy is tankin’. When oh when will it end? The horror of it all. I can’t believe this is happen to us. We’re all going to be poor and have to live on the street and use food stamps. Oh, pooooor poooooor us!

#140 MKUltra on 11.03.10 at 3:32 pm

What does Queen Elizabeth II (QE2) have to do with anything in the USA? duh!

You people are meat-heads and I only read this blog because I’m waiting for Garth to publish his squirrel meat recipes.

#141 smartalox on 11.03.10 at 3:41 pm

Gordon Campbell’s resignation will be a defining moment in BC real estate markets. If the NDP get in, expect a huge glut of premium homes as the knowledge based industries that moved here 10 years ago abandon the province for a better tax regime, and fewer wage concessions in Washigton state.

#142 Devil's Advocate on 11.03.10 at 3:45 pm

#130 Devil’s Advocate on 11.03.10 at 2:33 pm

I don’t want you to bite off too much when you’re just starting. Take this list and commit it to memory. This will carry you a lot further a bunch of facts and figures.

Remember to tell your newbie friend about the balance in the market, that’s key. There are a ton of great deals out there for people and it’s his job to find those deal and convince people to buy, buy, buy.

This business is not about “selling”.

You’re fired!

You have not learned a thing… go back to “selling” hot stereos out of the back of your El Camino.

#143 pugnacious serf on 11.03.10 at 4:03 pm

#105 Right All The Time

Congratulations on that brilliant straw man argument. Housing geniuses like you keep using that “crashed” term for Canadian real estate on here. I guess by over exaggerating that position you figure it validates or even justifies the terrible situation the majority of new home owners and HELOC junkies over the past 4 years have put themselves in.

The likes of you would be first on here crying and complaining that somebody cheered, “Real Estate is going down, hard” and that RE was going to be in shit, yet you’re poking that big bear with a stick.

Well I got news for you; 1/2 to 1/3 drop in sales in RE isn’t good news. Any respectable agent in ANY market sees the writing on the wall. The bear is winning and he’s growing.

You can call a market balanced or cooling or any other buzz word you want one month, but back to back to back shit numbers during the supposed high time of sales isn’t good news or sign of a balanced market, it’s the sign of frailty.

What’s worse is less wise folk like yourself see average rising prices and figure that their crack shack has risen in value, when all it means in a sliding market is the guy at the top of the housing food chain is running out the door, having to take 2 million for his 3 million dollar home. How does that kind of statistical anomaly make the average families house go up in value other than on CREA’s cheat sheets? It doesn’t, it just gives that shit organizations and its kin like Re/Max meaningless data to pump sales to the not so wise.

The truth is, RE is coming to a stand still and ALL the statistics are telling that story, not just one cherry picked (average prices) by CREA spin doctors. When I see a rise in POS and a rise in asking price drops, it tells me it’s all done, like it was in 2008, again.

Even further, Mark Carney has warned the herd about debt (that includes mortgage debt) even as he dropped rates; his job is to keep the currency competitive, not to protect you from yourself.

But back to balanced markets and predictions, it will take some time to push all that air out of the market from the 0 interest rate policy of the BoC, however, a wise man once said, the only reason for time is so that everything doesn’t happen at once.

You expect it all to happen at once, give it time.

#144 VICTORIA TEA PARTY on 11.03.10 at 4:04 pm

VOTERS IN BC AND AMERICA: BE CAREFUL WHAT YOU WISH FOR

From the knee-jerk, anti-HST chattering masses of BC to the fundamentalist Tea Party whackjobs across the US, this is a week of political change, not necessarily of political improvement.

FIRST BC.

Premier Campbell has announced that, after serving in elected civic and provincial office for the last 26 years, he has decided to call it quits.

His and his government’s popularity have been shredded “by the way they brought it (the HST) in” and, therefore, has left him with no option. He knows enough to put party before the leader. Smart to the political end, he will be missed.

BTW…

Campbell telegraphed his resignation plans loud and clear last month (a prediction I made in this space at that time) when he announced a specific appointment in his October cabinet shuffle.

The message was conveyed via a decision to appoint Martyn Brown, the premier’s former right-hand man, to the tourism ministry as a deputy.

Mr. Brown and the premier were a team that went back years. It helped to engineer the Liberal’s stunning win in the 2001 provincial general election, propelling a newly-constituted right-wing government into power for a total of three consecutive election victories, after 10 years of catastrophic NDP rule (1991-2001).

Premier Campbell’s resignation announcement presages a fourth Liberal party victory in 2013 with a new premier, whomever that will be.

An interim leader, if one is to be selected, could be possibly Attorney General Mike de Jong, or perhaps another cabinet minister Rich Coleman whose name is being mentioned.

Good Luck Premier Campbell.

On to the US Mid-terms.

The Tea Party brags how it made possible the big Republican push-back against the Obama-ites.

This means trouble on two main fronts:

–internally the “traditional” GOPers, who’ve been in and out of power in DC for generations, will have to quickly subsume the Tea Partiers or else get stomped on in 2012 by a resurgent, and somewhat chastened, Democratic Party possibly with Hillary Clinton as the presidential nominee. The Tea Partiers drew a line in the sand on victory night saying that it would be their way or the highway. I expect lots of Tea Party political “road kill” shortly. The Partiers’ platform of less government and entitlements will be too much for most Americans to stomach. The GOP will have to water than wine because it knows that the US fiscal/monetary system is hopelessly screwed in its present construct. Remedies are nowhere in sight.

–the other issue is the outcome of the Senate and House races. It means only one thing: gridlock through endless filibusters. And, of course, presidential vetoes. What fun!

This mid-term election was simply a total disaster for the crumbling American Empire with its sagging infrastrucutre and shredded middle-classes. In 1994, under a Clinton presidency, not so much of a problem. Today, much worse.

ADDING INSULT TO INJURY…

Over at the Federal Reserve the money printers will cobble together another $600-billion of “money” to try and prime the US economic pump, yet again. It will amount to $75 billion a month (until next June) slightly more than most economists had predicted, but what do they know?

All the tea in China (surely the Chinese have bought enough US bonds…already!) will NOT help this situation. US authorities have spent trillions since 2008 trying to resuscitate a room temperature economy. Money for nothing…

#145 Right All The Time on 11.03.10 at 4:20 pm

I love BALANCED markets, like the market we have in Vancouver. Yes, contrary to the dooms day naysayers, and the basement dwelling renters waiting for 5k houses, the market in this wonderful land is balanced and flat flat flat.

Yes, flat my friends. For NINE months, the market has remained flat. All the black swan events, from the Olympic inventory glut to the implementation of HST, failed to trigger that collapse.

Flat is great – it gives the market a breather, allowing more sideliners to come on board the RE gravy train for the next leg up ; it allows buyers more time to select their houses, eliminating any potential for buyers regret; and extends jobs of all those people directly and indirectly employed by the house industry.

Hmmmm….I wonder which US markets remained flat during the housing crisis. Since bears are so fond of making comparisons to the US, you should start looking for comparable examples of states where prices have remained relatively flat.

I know some bears will say, “hahaha flat market, then why buy?” For the same reasons everyone bought here for the past 8 years of the boom – quality of life, homeownership premium, stability, long term equity, etc.

Silly bears think that only rising or falling house prices impact the decisions around RE. Believe it or not most homeowners do not buy only for investment purposes. so the ups and downs of the market do not shake them.

Oh well, bears, just keep reciting, “next year will be different, next year it will collapse” to make yourselves feel better. Oh course, you have been chanting that for many years so far.

#146 Devil's Advocate on 11.03.10 at 4:21 pm

#144 smartalox on 11.03.10 at 3:41 pm

Gordon Campbell’s resignation will be a defining moment in BC real estate markets. If the NDP get in, expect a huge glut of premium homes as the knowledge based industries that moved here 10 years ago abandon the province for a better tax regime, and fewer wage concessions in Washigton state.

Gordo’s resignation was the best thing for the province and the Liberal party as now they can get about regaining the voters confidence so that we can move forward with a renewed respect and confidence in the provincial Liberal leadership.

#147 Evangeline on 11.03.10 at 4:24 pm

((#135Evangeline-mentioning Marx might be pushing it a little-currently there is an unprecedented level of taxpayer support for “business” -the welfare state doesn’t primarily supply the poor anymore, if it ever did.
))

This is getting further and further from my original point which was simply that from an economic standpoint, the USA ain’t dead yet, they still lead the world in intellectual property, and that is a huge slice, if not the largest, of their economy covering all sectors from high tech to medical/pharmaceutical, and everything in between. (That is not to say that other countries do not excel in many areas of intellectual property as well, but the USA is still the giant.)

I totally agree that corporations should not be on the dole.

#148 toastmaster on 11.03.10 at 4:25 pm

Ah yes, Kelowna, the land of the tightwad senior who pays up his golf and curling membership then clamps her wallet shut for everything else. You must have been at the Walmart sales DA, where all the discounted shirts from China are stacking up to the rafters.

Soon it will be winter when the cloud banks will sock in the valley, trapping the massive smoke fumes from woodstoves and the crapola wood mill operating on their 1950 wood burning boilers. Has the same effect on breathing air as a good old fashioned (and now annual ) months long forest fire. Just the place to raise the kids, unhealthy air,you have to drink the lakewater the boats spew into, and you have to hide inside half the summer from the fires (or evacuate), or else burn to a crisp under the UV’s.

Seniors control the economy of Kelowna worse than Victoria, whats to buy when you have it all ? Kelowna is ground zero, Victoria next….Vantown with a slow melt like a glacier in Nunavut. Yer all toast.

#149 Devil's Advocate on 11.03.10 at 4:25 pm

Watch out Mickey,

There’s another guy on here pretending to be me. He’s saying that the business of real estate is not about selling. Think about it for a second Mickey, if you don’t sell, how do you eat? You’re on commision right Mickey? Take my advice and get out there and sell. If you don’t sell, you don’t eat. This fake is trying to sell you a bill of goods, trying to make being a real estate agent out to being “not about selling.”

How can that be the case Mickey? Do they pay you for showing houses or selling houses?

So, learn how to convince people to buy things, maybe even things they aren’t real sure they want. It’s called the art of persuasion and it’s a great profession.

Remember to be hard driving and eager because there’s a lot less people in a buying mood these days. You get paid when you sell, you get nothing when you don’t.

#150 Evangeline on 11.03.10 at 4:34 pm

#138
lol

#151 Fiendish Thingy on 11.03.10 at 4:36 pm

@#59 Kenverine

Last night’s election results accurately reflect our current political dichotomy down here. Middle America, a productive, economically conservative Republic surrounded by the two coastal dependencies of NoCal and NooYawk.

the kenverine TN

Those economically conservative middle Americans get far more federal funding than they pay in taxes, while the Coastal Depedencies pay far more in taxes than they get back in funding from the Feds.

For example, in 2004, Mississippi got $1.81 from the feds for every $1.00 they sent in taxes, North Dakota got $2.03 for every tax dollar. California, on the other hand, only got 81 cents from the Feds for every dollar paid in taxes, New Jersey only 62 cents.

http://taxprof.typepad.com/taxprof_blog/2004/09/red_states_feed.html

http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2010/03/31/red-states-blue-states-and-the-distribution-of-federal-spending/

So much for your theory; without the taxes paid by the liberals on the coasts, Red State Middle America would be S.O.L.

#152 JB on 11.03.10 at 4:41 pm

Can someone please tell me when will be a good time to buy rental property? 2012? 2014?

Thanks

#153 Canayjun on 11.03.10 at 4:53 pm

Pent up demand will lead to 100% of all Canadians owning a home, including children, seniors living in assisted living, the homeless and drug addicts. Then everyone will proceed to buy their second home, which they will rent out–to dogs, I’m presuming, because all the people in the country will already own their own home. Eventually there won’t be renters any more. The banks will lend to anyone, including children and drug addicts. All so we can continue to have 10% growth in the real estate market…forever. And somewhere down the road in the not so distant future, the average house price will be $5 million.

#154 Debt's Dark Embrace on 11.03.10 at 4:55 pm

#115 Devil’s Advocate on 11.03.10 at 1:50 pm

One final note before I shove off and adandon these blogs knowing the work is being done by my protege

Oh, life is a glorious cycle of song,
A medley of extemporanea;
And love is a thing that can never go wrong;
And I am Marie of Romania.
………………………………………………………………………

And every village needs an idiot.

#155 Brian1 on 11.03.10 at 5:02 pm

I know what to do,I will bring my Harry Dent book in hopes that you will sign it.

#156 Mtl RE Observations on 11.03.10 at 5:12 pm

I’m seeing early signs of prices coming down in Montreal. The property below is in a “highly desirable neighbourhood” (my favourite part of the city) and is only asking 20K above city evaluation. That type of unit in the project that we just sold is asking 100K more.

http://passerelle.centris.ca/Redirect2.aspx?CodeDest=SUTTON&NoMls=MT8415688&Source=WWW.REALTOR.CA&Langue=E

I also noticed one more unit went up for sale in the project we we sold. So now there’s 22 units for sale in November compared to 4 that were for sale in the spring.

#157 Evangeline on 11.03.10 at 5:26 pm

#134

very nice post about the value of intellectual property; yes,with the right idea, you can spin straw into gold

… even in an Armageddon scenario, it will ultimately be those with the most intellectual property who will survive, because it is they who will devise and improvise the best squirrel traps.

#158 Brian1 on 11.03.10 at 5:38 pm

Cuba has developed a new drug that cures lung cancer. So confident are they that they will throw in a box of their famous cigars with the puchase of each vial.

#159 BAD on 11.03.10 at 5:51 pm


Here we go:

According to The Economist house prices in Canada are overvalued by about 24%. That makes us #7 in the 12 most overpriced markets in the world!

Since Vancouver has the most expensive R/E in the country it is most likely overpriced by much more than 24%. But then again some claim that Vancouver is not really a part of Canada but stands on its own as “The Paradise On Earth” for (wealthy Asian?) homeowners.

#160 pbrasseur on 11.03.10 at 5:52 pm

TheBigLebowski

“He (Campbell) may be bing groomed for a run at the Prime Ministership.”

What about Michael “the Russian prince” Ignatieff?

#161 Canned Goods and Buckshot on 11.03.10 at 5:52 pm

Jess #128

Thanks for the link. It brought to mind the movie
`Bob Roberts`

#162 jess on 11.03.10 at 6:13 pm

46 Victoria Boy on 11.02.10 at 11:48 pm
#2 – Jess
read the header at the top of garth’s blog.

Since so much has been published on the American housing troubles…I thought it of interest to mention a state that voted FOR raising of taxes. Also a good example how the electorate made INFORMED voting decision.

#163 Ontario Joe on 11.03.10 at 6:14 pm

Devil’s Advocate,

Did you say that being a real estate agent is “not” about selling?

Am I missiong something?

Is this why at the end of each month the real estate associations present the “sales numbers?”

So if real estate agents aren’t there to sell, what are they there for?

#164 Nostradamus Le Mad Vlad on 11.03.10 at 6:15 pm

“Deposit insurance is an illusion. — Garth”

If CMHC bankrupts itself next year, there won’t be any payouts.

Interesting that people still believe that whatever comes out of the WH must be true.

It is the US Fed and corporations which run govt., plain and simple. The rest follow orders.

Speaking of nothing in particular, Soros, the one who bankrolled Obama’s campaign speaks of the NWO, SDR’s, etc. 10:36 clip.

#52 realpaul — “. . . the entire empire will collapse . . .”

Could go with the link from last night, which said that bullion bunnies won’t be able to buy the stuff soon. Curious if the WH / Pentagon is still going ahead with a shutdown of the ‘net on Nov. 30.

#85 Zero Interest Rate Policy — “. . . of significant change in the US (QE2 and politics) it appears the winds are shifting.”

Good way of looking at it, by matching up two opposites and seeing one repulses another. Indeed, the winds are changing direction.

#120 poco — “BC news –Campbell resigns”

Not soon enough. He should have gone when he was caught drunk driving in Hawaii.

#129 TheBigLebowski — “He may be bing groomed for a run at the Prime Ministership.”

Interesting theory. He is quite capable of replacing Harper. Time will tell.

#142 Devil’s Advocate — “Oh, pooooor poooooor us!”

Damn, it’s hard living here! Life’s a bitch then you die!

#165 Tonya L on 11.03.10 at 6:21 pm

Devil’s Advocate – the drugs you’re on aren’t working, try something else. Your entries are retarded. I agree with toastmaster about Kelowna

#166 Herb on 11.03.10 at 6:24 pm

Evangeline @ #135,

the reality in which things now are – and apparently will continue to be – is the unreality of Socialism for the rich, capitalism for the poor.

The whole point of reagonomics was the “trickling down” of money the higher earners saved in taxes through the economy to everyone else. We know how that worked out. Ditto Reaganomics Round 2, the Bush Jr. tax cuts.

Yes, money actually cost something in Reagan’s day, but who did the lending, who paid the interest, and who banked the profits?

Economics should not be called “the dismal science,” because here is nothing as dismal as politics, especially the ideological variety.

#167 smartalox on 11.03.10 at 6:24 pm

@149:
The flat market in Vancouver may not have gone down, but it sure hasn’t gone UP either. It could be that all of these once in a lifetime anomalies, Olympic hype, the chance to avoid a new tax the low, low, mortgage rates, are the only things that have kept the markets afloat when they should already be headed downhill. What will be the next chance of a lifetime?

Like any roller coaster, every uphill climb ends with a short flat spot…

And then the wild ride begins!

#168 tigerbaby on 11.03.10 at 6:29 pm

#135 Evangeline on 11.03.10 at 3:02 pm

except that most people have not any intellectual property to offer …

#169 Devil's Advocate on 11.03.10 at 6:35 pm

Right All The Time

Right on Brother!!!… But do yourself a favour; abandon these blogs before they suck you into a deep pit from which it is hard to escape and you may not be able to retain your sanity amongst the dark despair of the pups and poodles (Blog DAWGS).

I once thought I might convince them things are not so bad. Big miscalculation on my part. They are too far gone. The read your every word by candle light in their deep dark pit and miss the meaning of the whole as they hang on only to those snippets that fit through the very narrow openings of their self destructive mindset.

Take heed Right All The Time… you know they will soon be calling you Wrong All The Time with joyous belly laughs at their own wit. They know not, he who laughs last laughs best.

These market changes are no surprise. David Foot and others warned us of them long ago. The pack follows the leaders and feeds upon their scraps. The leaders know a “shift” again lays in wait not long from now.

#170 Devil's Advocate on 11.03.10 at 6:50 pm

#168 Nostradamus Le Mad Vlad

#142 Devil’s Advocate — “Oh, pooooor poooooor us!”

That was not me Nosty… There is another who is posting under the “Devil’s Advocate” moniker.

I am going to abstain from these blogs now for the balance of the year. Might check back after Christmas some time… might not.

Right All The Time carry on the good work if you dare. But be warned; this becomes a distorted house of mirrors after a while and you will most certainly loose your patience if not your sanity.

Hasta Luego Pups & Poodles… you just don’t get it do you?

http://www.youtube.com/watch?v=ChWs1d5kots

You have no one to blame but yourselves for your indiscretions as you allow yourselves to be played so well. ;-)

#171 BrianT on 11.03.10 at 6:56 pm

#119Hobbygirl-Here is a great 4 part interview with Catherine Fitts-I will caution that you might be better off not knowing what she knows-it is very depressing http://www.youtube.com/watch?v=u9dGHuRExiM

#172 S.B. on 11.03.10 at 7:35 pm

Oh, great – I hope the Van pumpers did not see this one ;)

Vancouver top city in travel poll
Last Updated: Wednesday, October 13, 2010 | 7:10 PM The Canadian Press

Vancouver is tops once again with the subscribers of a trendy U.S. travel magazine.

Readers of Conde Nast Traveler have voted Vancouver the top city in the Americas, outside the U.S., for the fifth time since 2004.

Read more: http://www.cbc.ca/consumer/story/2010/10/13/bc-vancouver-conde-nast.html#ixzz14GhhcHps

#173 AgAu on 11.03.10 at 7:46 pm

#148
Garth,
Where does the US Fed get the money to buy the US Government T-bills?

Thanks,
AgAu

#174 john on 11.03.10 at 7:58 pm

What about a net worth of 150,000 is that bad for someone in early 40’s

#175 CTO on 11.03.10 at 8:26 pm

#157 Canayjun

Don’t forget those super high Canadian salaries that will support the expensive Canadian real estate. After all, why would a corporation want to employ people in america or elsewhere at half the wages when they could employ good quality Canadians. How blessed we are to be above the world!

#176 Evangeline on 11.03.10 at 8:29 pm

#135 Evangeline on 11.03.10 at 3:02 pm

((except that most people have not any intellectual property to offer …))

I think everyone does have something valuable to contribute … the tricky part is finding what it is because it can be hidden under mountains of fear, timidity, discouragement, doubt and many other mental obstacles … however, sometimes difficult circumstances will bring it out … “necessity is the mother of invention”

#177 realpaul on 11.03.10 at 8:30 pm

JB…the best time to buy a rental property is when cash flow services debt. Recently however there have been a plethora of pimps telling the unwary that superlow rates had produced ‘yield’ with a nominal down….don’t fall for that. Remember…these are ’emergency rates’ and you could easily get your butt handed to you when rates head back up.

#178 Nostradamus Le Mad Vlad on 11.03.10 at 8:32 pm


2:03 clip The Gold-Money Standard, just to fool all of you!

8:20 clip Apparently, GS can and does manipulate the economy. Geewhiz, who woulda thunk it?!

4:36 clip Election over, deluge starts! Second half is very good. He talks of a scene from “The Perfect Storm”, which describes exactly where we are now.

1:47 clip Re: the elections yesterday. The Republocrats lost; The War Party swept. New FF’s and wars? Yup! AfPak, Yemen, etc.

US Fed “We can pay anybody by running a printing press.” — Thomas Gale Moore, a Ronald Reagan economic advisor, 1986. Plus — Shadow Printing Two.

Politics and Money. “Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (from November 1, 2007 to date).” wrh.com.

Confusion “However, one cannot make money by saving interest-bearing money.”

More war BS to keep a dead economy going. This is supposed to fool us.

Bovine Excrometer Overworked Ummm, ObL died a few years ago, late Dec. 2001 of kidney failure. His secretary returns calls!

Climategate “The plan — and, no, I’m not joking — is to put Norfolk Islanders on rations to fight both global warming and obesity.”
Webmaster’s Commentary: “I warned that this human-caused global warming swindle was intended to sucker people into accepting complete control over their lives “for their own good.” Here is the first step. Read the details of what is being done to the people on Norfolk island, because that is what the ‘Carbonazis’ are planning for you all!” wrh.com. When the next ice age comes shortly, will that be blamed on GW? Don’t forget, the last ice age, about 13K years ago, took less than a year to cover most of the earth.

Put these two side by side and see what transpires. This is what the m$m is good for — absolutely nothing.

It’s all about the dollar. How high / low can it go? Why not ask the homeless? Does anyone really think they care?

At this rate, the US will run out of countries to bomb!

#179 realpaul on 11.03.10 at 8:33 pm

#178 …the government mouse clicks the money…it doesn’t actually exist…it then goes on to extend additional ‘credit’ ( based on the expanded balance sheet) to institutions ( like itself) which then mouseclicks more debt in the form of TBills and Bonds in order to extend credit to itself….got it?

#180 Mickey the Realtor on 11.03.10 at 8:39 pm

come on DA, I need you to mentor me in my RE career. You know you cant resist this blog, you already left about a dozen times and came back. Forget about leaving, the dawgs and pups need an ankle to chew on and I need a mentor.

#181 HouseBuster on 11.03.10 at 8:42 pm

#179 john – If you plan on retiring tomorrow, then yes it is bad.

#182 Evangeline on 11.03.10 at 8:50 pm

Herb

At least you concede there were “profits” back then which is not the same situation as today. The crux of the problem today is that the financial institutions that in Reagan’s time were making money, are today insolvent due to staking their growth on fraudulent derivative models. The trillions of toxic mortgage backed securities that have messed up the global financial system have still not been dealt with. So the two situations of then and now are not economically comparable. In terms of there being rich and poor bothe then and now, that has been a fact since the dawn of history so that can’t be the point that coalesces today’s situation with Reaganomics.

#183 Get Real on 11.03.10 at 8:52 pm

# 149 Right all the time

————————————
You remind me of my ex-wife

#184 timbo on 11.03.10 at 8:59 pm

#148 TheBigLebowski ,

love your posts…..

most of this money will not enter circulation but be put in place to trade for bad bank loans. It is to keep the insurance ,pensions, banks and state governments solvent.

listen in a month for California to receive a grant from Washington and a home ownership credit to bolster prices.

They will print until manufacturing takes off and with the dollar drop it could be as early as Q2 of 2011. The US will do as little damage as it can to other nations but they have been told that this is the only option.

Everyone knows this as it is the only thing left.

the world is not going to end , just play the market for the bubble it is.

#185 S.B. on 11.03.10 at 9:00 pm

Time for (more) pain at the pumps? Oil is near a breakout level on the weekly chart view. Next stop 90+?

http://finviz.com/futures_charts.ashx?t=CL&p=w1

#186 Dan on 11.03.10 at 9:11 pm

Realtors are running scared as the housing crash has gotten worse. People don’t be fooled by the MSMafia who is paid to LIE. The fact is people are going BANKRUPT right now and losing their condos and houses. Right down there is tens of thousands of people who are trying to sell before they go bankrupt. Canadas housing market is the biggest housing ponzi in the world. You have to ask yourself why would realtors come on this blog? Why is the MSMafia printing and saying our right lies? Vested interest do not want you the puppet masses to know the truth. They pay the MSmafia hush money. The housing crash is a fact as we now have had SIX MONTHS OF 20% and greater drop in sales. Power of sales increasing is also a fact.

POP………………..

Realtors………….. I’m ruined if no more greaterfools buy.

Greaterfools…………….I lost my condo and have gone bankrupt. thanks for nothing you liar realtors and MSM. If the market was so strong why have sales crashed and I gone bankrupt?

Mortgage brokers……….Can it get any worse?

#187 virginhomebuyer on 11.03.10 at 9:15 pm

I wonder how much money Mr. Turner makes from all of the greaterfools who read this site and attend his seminars!

Apparently I’m the fool. My talks are free. — Garth

#188 Basil Fawlty on 11.03.10 at 9:27 pm

Quantitative easing is theft. It debases the currency and adversely affects savers and consumers, through increased prices.
Is it time to start talking about QE III yet?

#189 Leanne on 11.03.10 at 9:35 pm

The only pent up demand is from the guys ‘reading’ this blog for the articles.

#190 Hiteclowtec on 11.03.10 at 9:46 pm

#176 BrianT

Awesome!

#191 smw on 11.04.10 at 10:20 am

#175 Devil’s Advocate

Wow, a realtor talking about distortion of facts; the kings and queens of distortion and extortion…

Run away quickly little one. Run, run away.

#192 WINNIPEGER on 11.04.10 at 6:13 pm

Campbell resigned in B.C. due to the pending collapse—–yes collapse—- of its housing market….. I have it on very good authority.