The sure thing

Jen and Frank listed their house Friday. Six couples came through on the weekend, and they smell an offer. They’re both in their mid-fifties, and working. I asked why they’re selling. “It’s a mixed bag of emotions as we love our home and have a very manageable mortgage (and no other debts), but we’ve managed to accumulate a fair amount of equity since purchasing in 2003 and feel that our lagging retirement funds could use the boost. It’s tempting to go for broke on the mortgage (we could be mortgage-free in 8 years), but in the long run maybe having the added mobility of the condo lifestyle (plus being closer to where we actually work and play) while investing the equity and forgoing all the future expenses and maintenance costs of a home will be a better decision.”

Smart people, what? Maybe smarter than they think. In the time this pathetic, juicy blog as been in existence there’s been but one more compelling moment to reduce your real estate exposure. That, of course, was the spring of ’08, when I began this crusade. Months later the wheels came off the economy, house prices plopped, and it took emergency rates, government billions and public dementia to get the market pumped again.

Now, not only are those factors about to end, but we have the perfect economic storm brewing.

This is lost on Bill Johnston. He’s el presidente of the Toronto Real Estate Board, who just wrote: “While we will likely see higher borrowing costs this year and next, income growth is also expected to accelerate. This suggests that home ownership will remain affordable and moderate price growth will be justified over the next two years.”

Two years of increasing house values (he estimates 3-5%) will put the average Toronto SFH at $817,000, which is almost nine times what the average family earns. No matter, says Bill, nobody cares about such ratios. The only thing that matters is the monthly.

Were it so simple. May God show her mercy to 416 and the west side of Vancouver, for they know not what they do…

Real estate values in Canada will join those in the UK, America, France, Spain, Ireland and a slew of other places soon enough. It’s inevitable, since no shelter exists from those factors which nobody here has the power to change. In fact, some smart people are convinced a new global recession approaches. Fast.

The bombing of Libya doesn’t help. Oil production has already plunged there, and could virtually halt for a while. Meanwhile unrest continues in the whole Arab world pretty much guarantees crude stays at $100 a barrel or better. As a report from Moody’s this weekend showed hundred-buck oil “weakens the global economic recovery” and nails the car business, farming, airlines and travel. It also means families must learn to live with $1.30 gasoline and plumping gas bills.

Also on the weekend, China raised bank reserves again, which further restricts credit and is aimed at quelling inflation. It’s why interest rates have jumped in that country, India and Australia, as governments try to corral growth making housing and food costs mushroom. Of course, measures to slow rampant expansion in China are exactly what the rest of the struggling world does not need.

In Europe, there are new rumblings Greece will default on its debt, and a fresh Irish government  could well do the same. Britain’s real estate market is catatonic after an austerity budget which lopped off 500,000 civil service jobs and slashed government spending, and still the country staggers.

The US housing market continues to plunge. Almost 20% of all the houses in Florida are vacant, just a few years after it was the epicentre of housing construction and real estate speculation. US families have lost $5 trillion in net worth because they trusted their houses more than their investments. There will be no sustained American renaissance – a country with $14 trillion in debt – until home values stabilize and consumer spending is restored.

And Canada on Tuesday likely joins a growing list of countries who have no choice but to turn off the tap of stimulus sending. After all, the long-term consequences of fat deficits and structural debts are just too punishing.

Meanwhile Japan, which accounts for 6% of the entire planet’s economy, is in the worst crisis since 1945. The costs of rebuilding after the quake-flood-nuke events will almost surely (at the least) mean Japan stops buying huge amounts of debt from Europe and the US. Hell, it might even cash in a few of those bonds, waking Washington up in a hurry. The result could be higher American interest rates sooner than anybody expected.

Given all of this, what has TREB’s Bill Johnston been smoking?

Now, take a look at this chart.

Commodity prices (and economic growth) do not rise without end. In fact over the last 200 years there’s never been a jump as high or as fast as the one we’ve just been through, without a major correction. This is exactly what has been happening to real estate in the US and Europe.

There’s nothing different about Canada. Except (as I said three days ago), we had the chance to duck.

We didn’t.

184 comments ↓

#1 TS on 03.20.11 at 6:38 pm

Does this sound familiar.

AS MOST Singaporeans live in HDB flats, Minister Mentor Lee Kuan Yew strives to make home ownership the most valuable possession for Singaporeans.

http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_647217.html

#2 Mark on 03.20.11 at 6:43 pm

beware those calling bottom, when there’s barely been a drop

http://tasmanianrealestatetrouble.blogspot.com/2011/03/bottom.html

#3 Marplatense on 03.20.11 at 6:58 pm

first

#4 Hoof-Hearted on 03.20.11 at 7:22 pm

I’m #1 (and get a free book …..right Garth)

Signed ” Flaherty”

#5 Priced Out In Toronto on 03.20.11 at 7:24 pm

Just wanted to share this interesting thing I just found out.
I’m in the market for a used car. The old (paid off) car I have now is starting to get a little too old and I figured a more fuel efficient one would make sense. So I started my shopping this weekend. I cannot believe some of the deals I can now find. Prices in the past 6 years for some of the more reliable, relatively new, fuel efficient models have definitely come down from 2004 when I was last in the market for a vehicle.
Either everyones buying new or demand is down across the entire province of Ontario for these vehicles. (I suspect the latter)
But somehow, the demand for housing hasn’t followed suit. We are deluding ourselves into believing that the demand for housing in this stressed out economy is organic, i.e. Not Speculative. I doubt it.
Anyone want to give some insight on the car market? I don’t think I feel comfortable anymore with what I see coming down the pike. I keep hearing from experts that it will be a long slow decline in pricing (from Garth), but I still believe that when this thing goes down, it will go down much harder and much faster than anyone anticipated. 2008/2009 and its 10-15% price decline within 6 months was a teaser.
Canadian housing is, in my personal opinion, in a speculative bubble from worldwide investors. When these investors decide to pull out, the market will go straight down faster than anyone anticipated. Do you think its Canadians with their tiny incomes paying these prices? seriously?

#6 Anon - GTA on 03.20.11 at 7:32 pm

The last of the few that I knew who could afford better than realistic norm. and were hanging on – jumped in… in the last 2 months with mortgage > 7 times their annual family income…

It is hard… to stay on the side… when everyone else is in…

God HELP us…

#7 Tim on 03.20.11 at 7:34 pm

Commodity prices (and economic growth) do not rise without end. In fact over the last 200 years there’s never been a jump as high or as fast as the one we’ve just been through, without a major correction.
—————————-
Sure, there might be a correction in commodity prices, but there’s also never been a time in history that the middle class has swelled so much in China and India. China is going to reign in growth, so the plan is to take it down to only 7%! Only…If the states could do half that they’d be overjoyed. Canada is in better shape than you think, hell, Steven Hubris just ordered 30 billion worth of fighter jets. I know, they may come in handy when some rouge Spanish trawler tries to steel our Cod. lol! He’s doing a good job of stepping up to the plate for the Lybian crises, in order to divert attention from all of the Conservatives &$%#-ups at home.

#8 Tim on 03.20.11 at 7:36 pm

IF we maintain a relatively steady employment rate, and interest rate increases are only gradual, given the fact that the majority of Canadians have mortgages- close to 70%, who therefore want to do anything to prevent a major correction, what will precipitate one?

#9 Jamaican_Gal on 03.20.11 at 7:39 pm

First…
….things first.

I love the pic, Garth….! The world does seem to be going off a cliff.

Interesting times ahead, I’m sure.

#10 Cellar Dwellar on 03.20.11 at 7:39 pm

I’m SOOOOOO glad I dumped my cottage 2 years ago.
Thanks Garth!

#11 Juanita Violini on 03.20.11 at 7:41 pm

I love Garth Vader. Gives me hope that sanity is alive and well on the planet.

#12 Scare Crow on 03.20.11 at 7:50 pm

G-Man, let me first say that I am very grateful that you have put the time and energy in making this blog possible. For many years I just couldn’t understand what was happening to not only the Canadian markets – but the world at large. Did I miss some sort of mass cash drop-off. We scrimped and saved – went without just to put down a sizeable downpayment. We have always looked at our house as shelter – putting money into it at times to make it more comfortable for us – the couple you speak of (mid 50’s) I wonder why they started so late – our plan is to be mtg free within a few years – and re-direct our payments into a retirement plan – can’t figure why anyone would even think it is possible to buy above the 3x factor –

Silly greed I guess – but sadly the actions of those who were blinded by greed will cause hardship for us all down the road.

Garth, I feel we haven’t seen nothing yet as the world will face the music on the debts it has been able to dance around for way too long. And no one even seems to add to the fact that 7 Billion humans and counting isn’t a treat to all our survival is just as bewildering as the housing bubble relentless push upwards.

I believe 2012 will be the year that the world turns upside down and what happens in December as per the Mayan calender – well, I hope its a change for the better – but I won’t hold my breath – anyone know of a cheap space capsul so I can leave this god forsakken world and start my own colony that outlaws debt of any kind –

p.s – way off topic – the movie “Paul”just saw it – total absolute garbage – and what I don’t understand that Seth Rogan really likes to kick those who believe in Christ – Hey Seth – eat Sh&t buddy –

#13 Grado_Black on 03.20.11 at 8:04 pm

The geometric population increase of the last half-century as well as non-renewables consumption pretty much guarantees higher prices and less availability of critical commodities. Regardless of the financial debacle ‘de jour’ or global monetary chicanery.

#14 mid-Ontario on 03.20.11 at 8:11 pm

Stunning picture. Oh my goodness, what happened to that poor lady?

Stunning write-up.
There is diminishing hope for sanity in this world.
Japan damaged with a 2-300b repair, a war in Libya with a nattering Arab league on the sidelines, Bahrain, Lebanon, Yemen,

A congress trying not address how broke the US by putting off a vote on the debt ceiling (a debt by the way is going up $46,000 a second in the US).

Our own PM trying of have everyone forget the G20 lunacy of location,cost and police thugs while giving him total control with a majority(a true nightmare).

Where would we be without Garth trying to bring some sort of sanity back to RE.

Six months ago when I started to read your blog, I cheered your thoughts Garth.

Today it is too late my friend, too late.
They don’t get it Garth. They are toast! My hands are washed.

#15 X on 03.20.11 at 8:18 pm

“While we will likely see higher borrowing costs this year and next, income growth is also expected to accelerate.”

Note to self: Have Bill Johnston speak with my employer regarding my imminent raise in pay.

#16 Oasis on 03.20.11 at 8:19 pm

That’s a very interesting chart Garth, of Commodity returns going back 200 years. Let’s examine it for a minute…

Looks like there are some low points, 1824, 1879, 1930, and 2004. The high points in returns are 1864, 1919, 1982, and not yet established.

There are 3 complete cycles in that chart.

1824 low to 1864 peak (40 years up) to 1879 low (15 years down)

1879 low to 1919 peak (40 years up) to 1930 low (11 years down)

1930 low to 1982 peak (52 years up) to 2004 low (22 years down)

currently, 2004 low to present 2011 (7 years up)

according to your chart, the average advance in commodities lasts 44 years. we’ve only had 7. commodity returns should peak some time around 2048
so, thanks. i’ll be holding my commodity investments until then.

It’s different, right? — Garth

#17 T.O. Bubble Boy on 03.20.11 at 8:19 pm

Places like West Vancouver probably shouldn’t be considered in traditional price-to-income ratios, since people are paying cash (i.e. the local economy is not what is supporting purchasers, so average income isn’t really a meaningful measure).

However, that being said, perspectives on Real Estate investment are changing in many Asian hotspots, and FAST!

For example, in Shanghai, February re-sales declined 62.3 percent month-on-month!!!

http://news.xinhuanet.com/english2010/china/2011-03/18/c_13785780.htm

And, wouldn’t you know it, Shanghai Real Estate was on a bubbly run in late 2010 (thanks to mainland Chinese buyers):

http://www.propgoluxury.com/EN/PropertyNews/Singapore/1608-Chinese-home-buyers.html

(sound familiar???)

#18 i.am.first.now on 03.20.11 at 8:23 pm

..ha!

#19 dd on 03.20.11 at 8:24 pm

…China raised bank reserves again, which further restricts credit and is aimed at quelling inflation…

And what caused inflation? I know prices are rising – this is the result of inflation.

Rising the bank reserves will do little to stop “inflation.” Inflation is caused by in expansion of the monetary supply faster than GDP. The only true way to stop it is for China to unpeg the Yaun from the US buck.

#20 observer on 03.20.11 at 8:26 pm

For the real estate market in Canada to experience a major correction there will have to be a trigger; an event, a compelling impetus. And there simply isn’t one on the horizon. Disbanding the 35-year amortization certainly doesn’y qualify.

Despite all the doom and gloom rhetoric, (the world can be a scary place) the fact remains that both the U.S and Canadian economies are slowly recovering. GDP in both nations is growing modestly and interest rates will remain at historic lows for quite some time.

The real estate market rarely undergoes serious corrections on its own, out of good conscience. Especially when it is undeniable that the economy is on the upswing.

Something significant bordering on catastrophic must occur first – and it’s just not in the cards.

Yet.

Where did I say ‘major correction’? Even a modest one will be an anathema to indebted middle-class families, let alone the slow slide that will follow. Try to make a point without exaggeration. — Garth

#21 Dom on 03.20.11 at 8:27 pm

Sellers getting worried as the drop in sales continues in the first two weeks of March. Sales have fell each and every month since June of 2010. A co-worker is getting a divorce and they have put up their home with the hopes of a profit but after a couple of months and a couple of price drops nothing has happened. Now they don’t know what to do and don’t want to sell for a loss but they want to get rid of the house. Buyers are in the drivers sit and can low ball sellers in today housing market with falling sales. Realtors have done a good job with their propaganda and mis-information. Most people are surprised that sales have dropped every month since June 2010 in the GTA. Once people understand this reality prices will crash 10-15% in no time just like 2008. It’s coming and it’s going to hurt.

#22 wicked as it seems on 03.20.11 at 8:30 pm

Hang on I was just finishing up my totally diversified portfolio, with 70% fixed income and 30% in a wide swath of equities because I am 60 years old, as per suggested formula, and my ETF,s are in dividends, preffered shares ,precious metals, small caps, Canadian fundamentals and global equities.
Now I see the graph above and my paranoia is peaking again, should we be bailing any stock connected to commodities? Really cannot take another beating like the 2008 plunge!

That’s a lot of fixed. I hope you are already wealthy. — Garth

#23 BPOE on 03.20.11 at 8:31 pm

Guess everyone missed the article from Shell President stating Canada will be the economic superpower going forward in the world.
What Garth and others don’t understand is the World is just realizing that heck Canada is great. That’s right ol Canada is being discovered by the World!!! Most notably Crown Jewel Vancouver is at centre stage. You see folks America is sliding downward it’s had it’s time in the sun. Now the world awakens to Vancouver. Heck no rules to get in you just need cash. That’s why you see Dunbar lots going for upwards of 2 million.
Relax folks there are no higher interest rates going forward. Check back at Christmas time and see who really nows whats going on

#24 ballingsford on 03.20.11 at 8:36 pm

Garth and fellow bloggers, March 18th is now behind us. Wonderful!!!

I like the hood where I’m now renting and I’m hoping things correct themselves soon, like in 1 or 2 years, so I can get into one of these homes in the neighborhood.

I’m fine with renting in the hood for the time being and I don’t want to move to the Kanata, Barrhaven, or Orleans burbs. The kids in the burbs are totally out of control! I could write another blog about this, but most know what I’m talking about.

I checked MLS today and there are a lot of pimply dots in my area and a lot of other areas in Ottawa. A lot of homes have sold recently, but the ones above 400 grand don’t seem to be moving. The pictures for their homes are from the summer with green grass and the trees in full leaf bloom.

Another home, close to me ,already reduced the asking price by $50 grand. The downturn is already starting to happen.

The next couple of years will be very interesting!!!

#25 squidly77 on 03.20.11 at 8:46 pm

Even a small decrease in home prices will collapse Canadas sub-prime market, when sub-crime collapses the rest of the cards will fall.

#26 john m on 03.20.11 at 8:53 pm

23 BPOE on 03.20.11 at 8:31 pm

Guess everyone missed the article from Shell President stating Canada will be the economic superpower going forward in the world……….<<<<<< LOL ..twist up another one pal :-)

#27 not first on 03.20.11 at 8:54 pm

Garth, you finally looked outside Van and TO and noticed that the world is upside down with debt. If too much personal mortgage debt is bad, then so is too much sovereign debt.

There is no growth coming from the U.S. and china’s a big bubble and about 3 or 4 euro countries will default on the debt and 2 or 3 major U.S. banks will fail or need another bailout. Does this sound like a stable world to you?

#28 45north on 03.20.11 at 9:02 pm

Priced Out in Toronto: talking about real estate: I still believe that when this thing goes down, it will go down much harder and much faster than anyone anticipated.

that’s my feeling Priced Out, Garth’s view is that it will be slow gradual decline. March 18 was the last day to sign up for a CMHC insured mortgage with a 35 year amortization. For 9 months, year-over-year sales have declined.

#29 i.am.first.today on 03.20.11 at 9:03 pm

eeee!

#30 ballingsford on 03.20.11 at 9:15 pm

Scare Crow on 03.20.11 at 7:50 pm

I believe 2012 will be the year that the world turns upside down and what happens in December as per the Mayan calender – well, I hope its a change for the better – but I won’t hold my breath – anyone know of a cheap space capsul so I can leave this god forsakken world and start my own colony that outlaws debt of any kind –

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

#12 Scarecrow

You and I might be thinking the same thing. Why would the US Gov’t run up a $14 trillion debt unless they were certain of something that they knew, but the rest of us didn’t know for sure.

If the world, as we know it, ends in December 2012, then I guess everyone’s debt would be wiped out.

The survivors could start from scratch!

What if the end doesn’t happen in December 2012 though? Everyone must pay the piper!

#31 Elmer on 03.20.11 at 9:33 pm

Garth, do I need preferreds in my portfolio if I’m in my 20s or are they only for people nearing retirement?

#32 The InvestorsFriend (Shawn Allen) on 03.20.11 at 9:36 pm

Number 20 Observer said:

For the real estate market in Canada to experience a major correction there will have to be a trigger; an event, a compelling impetus. And there simply isn’t one on the horizon.

hmmm…

Do triggers usually announce themselves in adance?

What lies beyond the horizon?

Anyhow a major correction in housing prices should not be thought of as anything unusal or a disaster.

Sure it will bankrupt a bunch of people. So what? The houses will still be there afterward and some young people can buy’em up cheap. What is so bad about that?

Excesses must be corrected… eventually…

A country and its people does not grow rich by having its people trade houses with each other for ever escalating prices. Just ask the U.S. of A.

Nor for that matter does it grow less rich when its house prices fall. Some will be hurt by lower prices and some will benefit.

If America is less rich it’s not because its house prices fell, more likly the other way around.

#33 phil on 03.20.11 at 9:39 pm

#16 Oasis

You need to clue-in to where the ‘0%’ line is. Below that line means ‘falling’ commodity prices. Throw in the largest demographic in history starting 1946, that will not be replaced by their children, and you will have a better understanding where commodity prices are headed in the near future (hint: well below the zero line in the above chart).
btw China is demographically only five years younger than the advanced world and their one-child policy will surely lead them to the same demographic demise (think Japan).

#34 Jeannie on 03.20.11 at 9:40 pm

Bill Johnstons comment is irresponsible and idiotic.

This morning we watched a documentary produced by Tom Brokaw on the U.S. Boomer generation.

The story is not encouraging, one very qualified man submitted 600 job applications which garnered three interviews; apparently he’s ‘too old’..they’re looking for someone younger.

So many of the ‘Woodstock Generation’ admitted to losing their homes and ‘lifestyles’ as a result of assuming the good times would never end.
Some hard lessons here.

#35 Jsan on 03.20.11 at 9:53 pm

“#23 BPOE on 03.20.11 at 8:31 pm

Guess everyone missed the article from Shell President stating Canada will be the economic superpower going forward in the world.”

==================================

There is a big difference between “Will” and “Must” and it has more to do with Middle East tensions than anything else. You should probably read the article a little closer.

http://www.montrealgazette.com/business/Canada+must+become+world+energy+superpower+Shell+Canada+president/4474270/story.html

.

#36 City Slicker on 03.20.11 at 9:53 pm

I guess we’ve exceeded the yankees in debt, but I think its because they’ve had a pull back so we passed them on the way up. Does anyone know what the peak of their debt was on the dollar?

#37 Jsan on 03.20.11 at 9:54 pm

Look Out Below: Why Skyscrapers are Classic Bubble Indicators

“Beyond skyscrapers, Mansharamani notes, “China today exhibits many of the signs that have characterized many of the speculative manias throughout history.” Those include: easy money, overconfidence, and high amounts of leverage. The rise of moral hazard is another indicator. “In China, you have state-owned banks lending to state-owned enterprises to buy land from the state,” he notes. (What could go wrong?) In addition, it’s always a danger sign when economic systems begin to regard what should be outputs as inputs.

Throughout China, provincial officials are obsessed with hitting targets for GDP. Focusing on what should be an end result as an initial goal “leads people to do things that may not make economic sense.” Mansharamani cites as an example a regional leader in China who, desperate to meet a GDP target, blew up a recently constructed bridge. “He got credit for the explosives he bought, and then for the steel and cement he bought and the constructions workers he hired.”

http://finance.yahoo.com/tech-ticker/look-out-below-why-skyscrapers-are-classic-bubble-indicators-536048.html?tickers=FXI,EEM,GLD,GDX,EWH,CHXX,CHII&sec=topStories&pos=9&asset=&ccode=

.

#38 TaxHaven on 03.20.11 at 9:56 pm

“…income growth is also expected to accelerate.”

What evidence does he have for this ridiculous statement?

It’s all, at root, about the sustainability of living standards. Canadian “workers”, and Canadian products are already some of the most ludicrously overpaid and overpriced in the world. They’re not affordable on a worldwide basis.

To somehow imagine that – bar more borrowing/debt issuing/printing – REAL incomes will rise seems a bit of a stretch when you consider the multiplicity of other good places in this world which to live and earn…

Garth: “The only thing that matters is the monthly.”

How true. If only most mortgage-holders knew they were not borrowing but RENTING…

#39 TS on 03.20.11 at 9:57 pm

Johnston is not in reality with this statement as far as Ontario is concerned.

He’s el presidente of the Toronto Real Estate Board, who just wrote: “While we will likely see higher borrowing costs this year and next, income growth is also expected to accelerate.

Where is the income growth coming from? More like debt growth.

#40 Brad in Van on 03.20.11 at 10:05 pm

@ #23: BPOE, you are the absolute definition of an “idiot.” Nothing you state is founded in any kind of factual base, nor do you ever provide references for your rambling propaganda. You’re toast and you know it. Otherwise you wouldn’t need to be on this blog. If anything you said were true in the capacities you claim, it would stand on its own and it wouldn’t need your pushing. Canada is far from a/the world economic super power and will never be one. We simply do not have the production, means, or the population. The U.S. is still to this day the world economic super power and will continue to be in our lifetime and generations to come. Why do you hate on them so much, anyway?

I have a lot of American friends, and they’re probably some of the best people I’ve ever encountered. They work their asses off and have an unparalleled sense of entrepreneurship without the sense of entitlements we have become accustomed to. This, BPOE, will serve them well in the future. Sure they’re rough around the edges, but they’ll give me the shirt of their backs if I needed it, while making me laugh my ass off with their brash humor. Most of my Canadian friends would ask when I would pay them back and make me sign a contract.

I agree with Ballingsford and Scare Crow – The U.S. knows exactly what it is doing and wouldn’t have ever allowed this kind of debt to rise without an absolute plan of action in motion unknown to the greater masses. The U.S. economy still is growing, even though it may not be growing at the rate it once was. 14 Trillion is a lot of money, but break it down and it is roughly $45,000 for every American. We aren’t anywhere close to the size of the U.S., so everything that happens there sounds BIG. Besides, if the U.S. were ever out of the picture, we’d be complete toast and owned by the first country that tries to invade us. We never recognize the luxury or good we have by having the Yanks next to us. I, for one, am personally sick of the bashing of the U.S. and hate that I continue to read this crap on this blog.

We have our own problems we’ve created and we need to stop looking South as if they propelled our housing and credit orgy into oblivion. We did this to ourselves. Housing is clearly in the slumps. I’ve watched a very nice property across the street from me here in Kits start at $1.5MM, then to $1.2MM, then to $1MM, and now it is at $900K. Its been sitting for over a year. Nobody will b.s. me that all things are dandy here.

No country is without debt. Healthy, sustainable levels of U.S. debt is between 9Trillion-10Trillion, given their population and production. So, if you look at it like that, it means they’ve really overspent roughly $16,000 per capita. Media propaganda is a real hoot and really gets a lot of people rooting in the wrong direction. Although it isn’t ideal, our neighbours to the South will be able to make their way out of this one at a price. That’s why they’re still the world reserve currency even in the global economic collapse. All of Asia, the Middle East, and Europe are betting on it. Otherwise, the world would have already found its “new” reserve.

BPOE, do you honestly think the globe will abandoned the U.S. Dollar and pour their money into the Loonie, a currency with no proven history a reserve currency, along with having a much higher historical volatility than the U.S. Dollar? Get real. You are a fool.

BPOE you haven’t considered our coming recession in Canada and China will knock us back years with respect to economic well being. All things in this world are relative. Even if the Yanks are in the shitter, we’ll be faced with even more severe hardships in the future.

Also, Seth Rogan is almost as big a loser as BPOE. ‘Nough said.

#41 LJ on 03.20.11 at 10:05 pm

If you overlay the commodity chart with the available world monetary base, particularly US bonds and treasuries, you would notice a striking similarity. There are more pieces of paper, or their digital equivalents, chasing the same hard assets (energy, metals, foods).

Until the governments stop “printing” currency/debt, that chart will keep its vertical tendency. If they do stop printing…. you will not get interest payments on those bonds, the stocks will crash worse than 1929-32 and your bank accounts will be empty (because the banks will implode). Happy thoughts, Eh? Irresistible force; meet immovable object.

#42 TS on 03.20.11 at 10:07 pm

To: #20 observer on 03.20.11 at 8:26 pm
20% of Ontario’s growth is do to new housing construction and the increased wealth effect. Our home owner ship is at 72%. We have peaked out and demand was stolen from the future. Could you enlighten me as to what industry is going to replace the employment loss and pick up the lost inputs to the GDP indicator?
We do not need a trigger like interest rates rising. We stole from the future with financial regulations being relaxed in housing. High commodity prices actually hurt our manufacturers. Hopefully our cousin to the south gets moving. That will help us. The trouble is all markets are in a bad spot. Just took time to get there.
There are very few have provinces. That is a big problem coming down the pipe.

#43 Brad in Van on 03.20.11 at 10:11 pm

I am a betting man, and I rarely lose. In 2012, I see Canada falling so hard that we won’t know what to do. I’m betting against it for once, and it really sickens me. Garth is right… Never bet against the U.S. Come 2012, I’m going to be a happy man because my portfolio is balanced with an emphasis on U.S. companies and economy making a rebound. Believe what you want. Sometimes people have to learn the hard way.

#44 TheBigLebowski on 03.20.11 at 10:12 pm

As the chart says,
“At no time in the past 200 years have commodity prices risen as fast and as high as in the last decade without a sharp decline.” This is true, but you forget Garth, at no time in the past 200 years has the entire world been on a complete fiat money system with absolutely no physical backing to that mountain of paper. The world reserve currency has become a complete joke and the world is catching on. Instead of a flight to safety of the reserve currency during the last several weeks of turmoil, the U.S dollar is actually dropping, and fit is gold and commodities that is receiving the inflows of money seeking safety. If all this is so random then why have I been calling for this to happen for the past 3 years while you and you hangers call me a kook? Let me state again for the record what we are heading for. There soon will be a meeting similar to the Louvre Accord of 1987 or the Plaza Accord of 1985. All nations will get together and revalue and devalue their fiat currencies against one another. 1/3 of all debt will be defaulted on and a new reserve currency will be created. The World Bank along with all corrupt governments will try to force through another fiat currency at this time, possibly the SDR or Bancor. The world will not accept this and will demand a hard backed currency with gold being some component of this along with commodities. We have left the relative financial peace which was the eye of the storm and are now heading back into the winds of financial turmoil. A recession was never averted by the massive bailouts and money printing. It was only delayed and made worse by the bankers. As history dictates whenever the bankers become cornered by their own massive debt ponzi scheme, the extricate themselves from blame with another staged war. And this is where we are now, on the verge of one of their staged are events to distract the people from the financial collapse to come.

#45 Oasis on 03.20.11 at 10:13 pm

It’s different, right? — Garth
__________________________________

no. i’m arguing it’s the same… not different. you should read a little more carefully.

#33 phil on 03.20.11 at 9:39 pm
___________________________________

the commodities story isn’t only about china, which will continue for at least a generation to grow at 10%+. it’s also about India, Brazil, the Middle east, Latin America…

oh, and about the Americans printing trillions of dollars that doesn’t exist.

we’re only 7-10 years into a commodity boom, that according to Garths’ chart, lasts an average of 44 years.

long long way to go. thanks again Garth.

#46 Another Albertan on 03.20.11 at 10:23 pm

#193/Pigeon –

I have full confidence that the guys who works at nukes know what they’re doing. I was principally explaining to nonplused that it simply isn’t as easy as drop-shipping in some gensets.

I have the stamp that endorses the designs in these types of electrical installations. I have a pile of drawings for steam loops on my desk at the office. You’re responsible for power sources. I’m responsible for the whole system, including the power sources.

The bottom line is that the genset is not the only part of the system that needs to be addressed when trying to mediate a messed situation. The media has reported the efforts to reconnect the “power cord” (an unfortunate victim of lost-in-translation) to the plant. There’s little debate that the fastest way to restore basic power is to drag in a generator skid. The sheer fact that was/has not been reported to have occurred should imply immediately that there is something else going on.

There are a multitude of peripheral systems beyond the genset. I simply described, for all readers, that there may very well be much more than meets the eye. Discounting these facts, which will not be understood by the average reader and may actually add to confusion, trivializes a bad situation, and portends to the conclusion that the nuclear workers to which you gave a positive endorsement are actually incompetent at a macro level. So which is it? (rhetoric question)

I Just hope readers understand that complex systems, be it nuclear power plants or the financial system or government diplomacy, cannot undergo Reductio Ad Absurdum. These are not systems that simplify to A-B, either-or binary conclusions. There are other options for explanation.

Everyone else’s mileage may vary.

#47 Jj3 on 03.20.11 at 10:28 pm

Garth, what do you make of the banks (e.g. RBC) decreasing the mortgage rates recently? Is this a desperate push to get more buyers into the market or is it reflective of banks thinking BOC won’t be raising rates soon? Thank you! I enjoy the blog.

That was because of Japan and a rush of money into the bond market, dropping yields. — Garth

#48 BrianT on 03.20.11 at 10:31 pm

#33Phil-You are making a huge assumption-a stable US dollar value-without that assumption the 200 yr chart is meaningless. If the US dollar is going to be stable, over a million dollars in expected entitlements to be paid by each US income tax payer will be settled how exactly?

#49 Victoria on 03.20.11 at 10:39 pm

Price out in Toronto,

A friends brother-in-law who is a British and own’s head fund company in Hong Kong – very wealthy individual – bought a ton of houses and apartments (even buildings in Victoria – I think to keep his brother-in-law busy) Anyway, he is selling everything – en masse. All real estate in Canada. He may own in Toronto not sure but I think it is mainly Victoria.

#50 S.B. on 03.20.11 at 10:42 pm

You don’t say…

The U.S. Coast Guard is currently investigating reports of a potentially massive oil sheen about 20 miles away from the site of the Deepwater Horizon oil rig explosion last April.
According to Paul Barnard, operations controller for the USCG in Louisiana, a helicopter crew has been dispatched to the site of the Matterhorn SeaStar oil rig, owned by W&T Offshore, Inc.

Multiple reports have come in of a sheen nearly 100 miles long and 12 miles wide originating near the site.

#51 Enlightened on 03.20.11 at 10:50 pm

Help!
I realize I’m not quite on point here but I’m hoping to garner some solid advice from those of you who have sold their homes privately. We are looking to list this week, have had a couple of market evaluations done and are very up on what is going on in the neighbourhood and local (central BC) market.
I can’t stomach the thought of doing all the dog work only to hand 15k minimum over to a ‘professional’. I have someone in mind who seems very good – yet still feel like I’m about to have rough intercourse without foreplay.
Can anyone offer any the pros & cons of FSBO from a personal perspective? I know this sounds paranoid but I do have concerns about having my house ‘cased’ and ripped off by those posing as buyers. I guess I see a realtor as something of a buffer. Also I am concerned that we would be snubbed by the ‘professionals’ should we list independently.
Time is something of an issue due to work/school schedules but is not the deal breaker – mostly I’m concerned about qualifying potential buyers and/or missing the March/April market and ending up listing with a realtor 30 days from now anyway.
Any thoughts from the peanut gallery ;) Sincere thanks in advance!

#52 A guy in Calgary on 03.20.11 at 10:52 pm

I find this a very entertaining blog. Thanks for the insights and laughs. I understand the thesis being presented, but don’t see anything that is different from the normal market gyrations.

In Calgary, we’ve come off maybe 15-20% from peaks 4 years ago. Median single family home prices of just under 400K and median family incomes of around 90K seems a little higher than in the past but still reasonable. This is hardly bubble territory yet Calgary is always listed as a market that’s already seeing the consequences of inflated prices, weak demand for houses, etc..

What I see in my neighborhood is pretty much the same as it’s been for the last 15 years. As long as unemployment stays reasonably low – and housing can be had for 30% of your take home – people will continue to buy in the area they work and raise their families. It’s not different here – same as it ever was.

#53 Enlightened on 03.20.11 at 10:53 pm

PS

I apologize if this has been covered recently – I’m ashamed to admit it but am not up to date on this blog over the past week or so – Sorry! Midterms……….
If it’s been covered – please let me know where I can find the info. Thanks again.

#54 S.B. on 03.20.11 at 11:01 pm

How about a new bachelor apartment, err condo, located beside the Gardiner Expressway highway in Toronto for 275k + land transfer taxes + closing costs + CMHC = almost 300k?
Madness.

http://www.realtor.ca/propertyDetails.aspx?propertyId=10435711&PidKey=-104125989

#55 nonplused on 03.20.11 at 11:02 pm

Well, commodity prices might go down in real terms, but I am not going to hold my breath for them to go down substantially in nominal terms any time soon, other than to correct. The trend is up and has been since paper was delinked from gold.

When governments had to back their money with some sort of commodity, usually gold, there were periods of inflation and periods of deflation, with the net result that prices did not trend for long periods of time. They went both up and down. But since we’ve been on a “full faith and credit” backing, there has only been one very brief period of deflation in 2008 & part of 2009. The trend is up and it will stay up until the fundamentals change. And the fundamental in question here is central banks intentionally targeting positive inflation in the 2% range. So far they have proven more than able to achieve this target, most of the time. Measured without hedonic adjustment and changes in weightings, it’s probably running double the official numbers. Throw in energy and food, and it’s probably 2 percent higher again.

There is one way to get commodities to go down in real terms, and its spelt “economic contraction”. But of course this is all new economics. In the old “Adam Smith” world, prices should naturally fall as capital improvements and innovation make production more efficient. And we probably still see some of that in the world, especially in electronics. But when you have a central bank that is hell bent on causing rising prices and putting the economy on steroids, things take a different shape. Things that should not be done with a natural cost of capital get done with an unnaturally low one, and inefficiencies and waste develop throughout the system. We end up with soccer moms driving 4 ton SUV’s all over the city, when the little ones could probably play locally without any affect on their game experience.

I came back from a day of skiing today to find that France has taken the no-fly vote as justification to launch all out aerial bombardments against any high value asset of the Libyan army. Nice. Canada is preparing to get involved too. Don’t get me wrong, the Libyan army is no mach for the west’s hardware and they will be able to remove anything worth shooting from the landscape in a short time period. But then what? Ground troops haven’t done a damn thing in Iraq or Afghanistan, and they certainly won’t in Libya either.

Reading a little about thorium reactors. Of course there isn’t a working economic thorium reactor to prove up the pumpers case, but if the “pump” is to be believed these things would be much safer (would fail safe even without power), cheaper, produce less toxic waste, there is at least 20 times more fuel available, and they knew that in the 50’s. But they would not produce plutonium, so research was not funded.

#56 South Sea Company on 03.20.11 at 11:31 pm

We’ve got it all wrong. Rising unemployment is actually a sign of an improving economy! Just ask Helmut Pastrick of BC’s Central 1 Credit Union.

“Soaring jobless rate seen as sign of optimism”
http://www.bclocalnews.com/fraser_valley/missioncityrecord/business/117959729.html

Now there’s a spin!

#57 Dan in Victoria on 03.20.11 at 11:52 pm

Another Albertan yesterday @181

Well written sir!
Went through a couple of industrial site accidents in my other life.
You have to have the people who work there fix it, they know where everything is and how it works.

I wonder if those mcc’s filled with water?
Or if they got knocked over from the wave?
Are the busses damaged?
Something as simple as a faulty limit switch could take hours to find and diagnose,especially if its intermitent.
Do a commisioning for an industrial plant, takes a lot of time to get it going.
I agree no use sitting here arm chairing it, those guys are doing their best.

#58 nonplused on 03.21.11 at 12:03 am

Back to the engineering question here,

I am an engineer, but not an electrical engineer hence my propensity to defer to those experts who know about this stuff. I had 2 course and neither dealt with phase related integration. And I forgot all of it anyway.

I definitely understand how you cannot connect 60 Hz to a 50 Hz grid, something will burn out. Everything has to be timed to the grid. The grid has to be uniform. But there is no grid here. Grid problems are gone.

Almost everything I buy that uses electricity says it’s good to run between 50 – 60 Hz. Even if you buy a $40 drill (plug in style or charger doesn’t matter) you are allowed 50-60 Hz.

So here, in Fukushima, it’s 50 Hz. What would really happen if you hit it with 60? I think the problem is in the control equipment which might not be able to make steady DC power if the AC is out of spec. But from what I understand of it, any capacitor good to convert at 50 is over-designed at 60.

My understanding of simple generators, no matter how many you plug together, is that they synchronize automatically. They cant “run ahead”, or they would be trying to carry the whole instantaneous load, and they can’t run behind, or they would become motors and not generators.

How does the grid stay in sink? Is there a clock? No. They can’t spin faster, and all follow the largest supply.

Of course clocked generators like a little inverter type would just burn out if the clocking didn’t work. But the technology exists to make them “load and frequency” follow too. That’s how that hugely expensive device you buy if you want to sell solar power to the grid actually gets it done.

What am I missing here? I am not an electrical engineer.

You couldn’t connect a 60 Hz generator to a 50 Hz grid. I understand that. But there is no grid at Fukushima.

#59 Tony on 03.21.11 at 12:05 am

Commodity prices in the past were driven by true market forces. Today fundamentals means nothing everything is rigged and all the commodities except natural gas have been manipulated to absurd levels by hedge funds and banks who squeeze out everyone on the other side of the trade with their money.

#60 not first on 03.21.11 at 12:06 am

Garth, here is a challenge for you. Show us an investment that we can use borrowed money to make a net positive return. A house qualifies if carefully purchased, any others?

You have that backwards. — Garth

#61 Tim on 03.21.11 at 12:12 am

Where did I say ‘major correction’? Even a modest one will be an anathema to indebted middle-class families, let alone the slow slide that will follow. Try to make a point without exaggeration. — Garth
—————-
How significant will a modest correction be in Vancouver? A ten percent correction will be insignificant for people waiting to get into the market. Even with a grinding gradual melt, it will be years before it makes sense to buy here

#62 Groundhogday on 03.21.11 at 12:15 am

How long have posters talked about a real estate downturn on this blog?

That long eh?

Wow. Get some sunshine.

#63 Steve Mate on 03.21.11 at 12:15 am

Bill Johnston is saying that rising wages will sustain the growth in real estate. I don’t understand: Over the last five years, real estate prices have grown at a historic rate, while income remained flat. How can a small increase in income at this point in time sustain the growth in real estate? With the ratios as they are, isn’t kind of crazy to draw any connection between real estate prices and wages?

#64 Two-thirds on 03.21.11 at 12:18 am

#19 dd

“The only true way to stop it is for China to unpeg the Yaun from the US buck”

Seems like Helicopter Ben’s motivation comes from the East – an economic game of chicken.

#65 Nostradamus Le Mad Vlad on 03.21.11 at 12:27 am


“. . . this pathetic, juicy blog . . .” — This blog is becoming atrociously essexualized, but because you have billions of paying subscribers, it’s okay to call this a Whorehouse Of The Finest Quality!

“. . . the perfect economic storm brewing.” — With the US at war on three front (AfPak and Libya), sticking their noses into other peoples’ business (Latin, South America and South Africa), the west being spooked by what may happen with nukes and the effects on sheeples, I would agree with you.

Look to Iceland, and the way their people got as mad as hell and tossed the sleazebag scumball banxters in the slammer. That is a great first step.
*
Harper’s Canada along with the US and most of the western govts. They can shove their message right up where the sun don’t shine, because this is what they will get back. See Iceland.
*
Hmmm. Something is fishy here. “The report says a total of 200,000 US personnel to be evacuated from Japan to US West Coast. That seems like a very high number. If this is accurate, it must mean things in Japan are a lot worse than we are being told.” Plus 3:40 clip Thorium replacing uranium?

DU (Depleted Uranium) being used in Libya, as well as Iraq.

TennesseeCare Better than ObamaCare, but not yet replacing it.

Yakima, WA Radiation detected. Travels quite well.

Dump The Euro Now there’s an idea that may catch on! Plus Greece quits the Euro, California can quit the US$ and join a few other states, the four western provinces and territories and have their own country’s currency, and A House of Cards Canasta, 21 or Strip Poker?

AIDS Another useless man-made invention.

CC Al Bore will be pleased to hear this. Greenland — -81 tonight. Cuddle up to a polar bear, Al!

Bernanke ponders food prices. This could be a pink flamingo event.

#66 Junius on 03.21.11 at 12:31 am

#20 the observer,

You said, “For the real estate market in Canada to experience a major correction there will have to be a trigger; an event, a compelling impetus. And there simply isn’t one on the horizon.”

How can you be so sure? You are correct that classical bubble theory from Minsky suggests are triggering event that leads to the collapse but it could come in series of little shocks.

The key is going to be interest rates. With many rates edging up as renewals from the 0/40 and early 5/35s start taking place there will be many people in trouble. With less and less disposable income something is going to give on the margins. It is just a matter of when.

#67 Mean Gene on 03.21.11 at 12:37 am

Hopefully Jen and Frank don’t buy an annuity, phew do those stink.

#68 tommy boy van west on 03.21.11 at 12:40 am

#40 lighten pal. #23 is BANG ON. You need some history and travel to see what the heck you are saying. Have you ever heard of the USD UNDEX. Your personal comments aside you need some serious insights into payola buddy boy. America will pay back it’s debt-in monoploy cake. Here you go China -2 trillion wall paper notes. Why do you think no one has ran to US treasuries in this multi level disaster. China and Russia are trading their own currencies. Don’t you even watch cnbc?? All the US biz titans are giving the USD reserve status just 5 years. Tops!! Or less if you’re a treasury guy-like PIMCO—the biggest one alive. Pay attention before you lose your April rent money. Get out of USD. Buy CAD if you must but grow some and buy SLV GLD heck even oil. Travel. Please. Do you know what Beirut is like in good times in the good part of town-power is out 5 times a day and you must pack. As for the Yanks I am still on their side-they have the biggest stick, created the craziest party so far and oh the gals are still #1. But the world is changing pal. 3 billion people have to drink water we urinate in.
Vcr/Canada is on fire because, although we have stupidity in gov’t, we can sue to settle differences. Not like that poor soul in Tunisia who gave his life to prove what corruption does to a people, a person’s mind. What we are seeing is capitlasim meeting socialism. Friction.
Remember the old saying IN America-“if you have 1 friend there you don’t need an emeny”.
The US know what it’s doing? WOW. And you better believe it. Let’s see: Pearl harbour, WMD, Nam, Northwoods paper-they do spell it out for folks but who really cares.
RE will not only hold, don’t you think -and I only speak for in demand Vcr(east/west/West van/Richmond, WR)-things would have fallen off a cliff and held by now. Late ’08 was like a one off-for 4 months. And then off to the track we go again. It’s been a VCr past time forever.
Wake up.
Give me that Kits address – does it reallt exist?

#69 BC Bring Cash on 03.21.11 at 12:40 am

#20 observer

GDP growth does not always put money into the pockets of the average family. GDP numbers include all economic activity, be it private or government. Lately the GDP numbers have been exaggerated by government borrowing. For example the stimulus spending. The Harper Government does not want a tanking of GDP on its watch at least for now until they get a majority Govt.
The average family is already maxed out and dreaming that their home equity is going to bail them out is just a fantasy. Good luck with that as we’ve seen elsewhere in the world lately. (and for that matter historically.) We are different is true. Why did it take so much longer than elsewhere for the housing market and the over all economy to shit tank? The shit will hit the fan in Canada as it has always done elsewhere in the past when mania takes over reason.

#70 tran, Calgary on 03.21.11 at 12:46 am

Small earthquake hits northern Vancouver Island

http://www.canada.com/news/Small+earthquake+hits+northern+Vancouver+Island/4474345/story.html

God always give ample warning.

#71 dd on 03.21.11 at 12:47 am

…Britain’s real estate market is catatonic after an austerity budget which lopped off 500,000 civil service jobs and slashed government spending, and still the country staggers….

It is estimated that even these cutbacks will not be enough.

#72 dd on 03.21.11 at 12:52 am

…In fact over the last 200 years there’s never been a jump as high or as fast as the one we’ve just been through, without a major correction…

Commodity prices will rise further if there is continued money printing. Money printing, quantitative easing, bail-outs, low interest rate policy; name it what you will. This is inflation. The result is rising prices. But governments around the world have no choice anymore.

#73 dd on 03.21.11 at 12:56 am

#33 phil

…You need to clue-in to where the ’0%’ line is. Below that line means ‘falling’ commodity prices….

Sure, if the free market opperated like that. But it isn’t free. If you can tell me when the world central banks stop printing money I will tell you when commodity prices are headed down.

#74 dd on 03.21.11 at 1:01 am

#16 Oasis

…according to your chart, the average advance in commodities lasts 44 years….

Interesting Oasis. I also see that the peaks happen at the top of major wars. Looks like commodity prices could be pushed even higher if things go sideways in the mid east.

#75 Not Fooled By Property Spruikers Hype on 03.21.11 at 1:10 am

Garth,

Canada & Australia have a lot depending on the Great Chinese economic miracle continuing demand for the stuff we dig out of the ground.

Property Spruikers will tell you Australia’s & Canada’s prices will never crash because of China & their demand for our resources, underpinning our economic success?

Before anyone gets too excited about China being our safety net they might want to look at this story on SBS Dateline show 20/03/2011

” China’s Ghost Cities ”

http://www.sbs.com.au/dateline/story/watch/id/601007/n/China-s-Ghost-Cities

This story shows 64,000,000 empty apartments & Whole Cities with shops & offices but no People!!No doubt a Bubble in the making,

Pretty SCARY that this is what everyone in Australia & Canada is pinning their hopes on not imploding?

House of cards that will tumble with the slightest economic downturn.

#76 BPOE on 03.21.11 at 1:15 am

Brad in Van
Sounds like your holed up in your basement suite watching VHS tapes of RedDawn while getting your frustrations out with your new Crayola set. You should contact Shiller aka The American I’m sure he can set you up with one of those 30% off condos he’s shilling with a nice view of the rain. No recession coming to Vancouver. No higher interest rates. Get over it

#77 Marplatense on 03.21.11 at 1:52 am

My inlaws are selling their mother’s house in Vancouver, the RE agent told them to ask 2 M for it… they think they are gonna sell it for 2.7 tomorrow. They expect 12 HAM offers.

I will update you when they sell… because I am sure they will.

#78 Roial1 on 03.21.11 at 1:53 am

Well Garth, I managed to get away from it all today and go fishing.
Sure hard to worry about the world going to hell when you are out there on a placid lake and the fish are cooperating by committing suicide at the end of your line.
Fresh trout was good for supper too.

Eat your heart out all you city slickers!

#79 Comrade on 03.21.11 at 2:12 am

I can not help but notice that raising commodity prices each time ended with a war. Let’s hope it is different this time.

#80 stage1dave on 03.21.11 at 2:21 am

I can’t remember where I read this, but groups of people losing their minds do so instantly & all once; & only seem to recover their sanity very slowly & one at a time…this current RE madness reminds me of this statement.

Another thing that strikes me about this housing price runup is a great deal of speculative optimism based on emotional responses instead of ones grounded in reality. (ask someone in the advertising or marketing industries about that) People aren’t looking at the experiences of other countries, performing basic math, let alone planning for unforeseen events.

There’s not really too far to run in this world from disaster anymore; lots of things (especially monetary) are way too interconnected. Anyone in Spain or Ireland PO’d at a bunch of banksters across the pond, for instance?

My point is human beings have always ignored the huge role CHAOS has brought to bear on history…the tragedy in Japan is another earthy reminder that mother nature always bats last.

Ridiculous amounts of private & public debt spent on follies restrict any intelligent response to disasters, except by printing paper. (gee, is that intelligent?) Things that happen outside of your control that you didn’t anticipate CAN have catastrophic effects on YOU…(New Orleans showed us that even when we do anticipate, we don’t execute very well…& that the people & agencies responsible for that execution have somewhat different agendas & priorities)

Remember what happened to the stock market after a couple jets flew into the world trade center? Does that strike anyone as a rational response based on “market fundamentals” or an emotional one?

Furthermore, the US experience from 2009 fwd should have been a lesson to all of us Canadians. (btw, I challenge anyone planted in a suburb of Dallas, Pittsburgh, Toronto, Winnipeg, or St Louis to wake up in the morning, look across the street, & tell me geographically where they are…we’re an awful lot alike, & none of these developments look any different than all the rest) Canadians should have paid a bit more attention…

People shelling out 4-7 times their income simply to put a roof over their heads ain’t gonna last…as Monty Python demonstrated, it’s just gonna take one thin wafer mint to blow this whole thing up…real good…

So after I pay my rent next month, I’m gonna get on this 59 Invicta so I can do some cruisin this summer…I figure the money I’ll be saving on mortgage payments will buy a lot of $5/gallon gas…

#81 EdmontonGuyHere on 03.21.11 at 3:32 am

Could we see $1.50 a litre by spring? Possibly.
SOo amny middle class families have too much dead and this may be too much for them.
In the USA over a million people stopped driving due to job loss and escualting gas prices in 2008. WHat will happen here? No matter how frugal we try to get prices will continue to soar on neccesities of life as we compete with the developing world.

#82 AxeHead on 03.21.11 at 3:44 am

#5 – the car industry is a barometer of the economy. Is it any wonder that GM, Chrysler, almost Ford…just about cratered during the great recession? I think they are all on borrowed time, when China begins to export cars on large scale – watch out. It began with electronics, musical instruments, now furnature, and when the auto industry is gone – all we can do is export our raw materials, import stuff, and watch our wealth vanish to other countries.

#40. Good point, I’m sick of US bashing as well. If it wasn’t for our southern neighbors, just who’s skirt would Canada hide under for protection? Housing is really irrelevant if you can’t protect your right to ownership.

#83 604 on 03.21.11 at 4:21 am

I live in Surrey, noticed a lot of sold signs all at the same time as the 5/35 leaves. Just wondering where can I find the ACTUAL selling prices of these homes?

#84 Marty on 03.21.11 at 7:08 am

How can you say “The result could be higher American interest rates sooner than anybody expected.”?

You’re saying the Fed wil increase its own borrowing costs. It owns more Treasuries than any other country now. So you’re suggesting it will increase its balance sheet even more until it can find a much-greater-fool to offload the worthless toxic TBills.

When EVERYONE knows that U.S. needs to service 14.4 Trillion debt and 1T deficit, raising rates means automatic default unless the Fed prints more money with help of more QE rounds.

Some numbers here. If rates go up by another 0.25% this actually represents 50% increase on debt servicing interest. Where will the extra money to pay the higher interest on the TBill going to come from?

Finally, Garth unless your head is in the sand you should know that every state has a budget issue. So rates won’t go up, since almost every state will be forced to default.

Did you consider these constraints before formulating your analysis?

Of course. — Garth

#85 David B on 03.21.11 at 7:34 am

Thing are not good in Japan …. not in the least … we hope and pray for good news daily. The middle east has been a power barrow slowly rolling down hill for years. “Stop and think” …. this is coupled to Iraq, Afghanistan and North Korea …. and who believes that there is another climate change induced disaster en route somewhere?

Hello Canada? even with all our rock in the Canadian Shield can it possibly hold the world up in it’s time of need as Harper & Co continue to suggest?

I say not a freaking chance trapper!

Time to sing “Looking out for #1” which means get your own finances in order first …..

#86 bigrider on 03.21.11 at 7:41 am

Garth are you really lumping housing and commodity price direction in the same vein? Commodity prices will continue to rie over the next decade even when housing takes it on the chin here.

My proof? Housing has declined verywhere in the world and commodities continue to rise.

I think you need to stop lumping them together.

#87 bigrider on 03.21.11 at 7:42 am

rie meant rise

#88 bigrider on 03.21.11 at 8:02 am

#60 Not first-” A challenge for you, show us an investment that produces a positive return ” a house purchased carefully with borrowed money produces a positive return”

Garths reply-“you have that backwards”

Not first- lose the RE religious mantra..you are a fool.

#89 S.B. on 03.21.11 at 8:40 am

Nice! 110 missiles fired and a country is “liberated”. Note: these were ‘smart’ ones, they do not hit civillians, right?
I am so impressed I am calling in missile strikes on my own position as we speak. I want liberation. I want it bad and I want it now.

#90 MikeT on 03.21.11 at 8:45 am

If you sold your house after reading this blog – ConGarthulations!

#91 Anotherlowlyrenter on 03.21.11 at 8:55 am

#84 Marty,
The mistake you) make is that central banks can’t always control interest rates – particularly the long rate. Just wikipedia the Asian Financial crisis in 1997 or Latin America in the ’80s. Closer to home is the US long bond post Bernanke’s QEII speech although it’s not a riveting example.

#92 Carruthers on 03.21.11 at 8:56 am

BPOE you’re back!!! Everytime you write some inane stupidity here you get thoroughly thrashed by the dogs and then you disappear for half a week. What gives? You never give a cogent response to any criticisms of your incoherent ramblings. Must be easy in your world eh?

Stop the self-flagelation dude. And don’t forget to go pay your property taxes!

#93 robert james on 03.21.11 at 8:59 am

Not sure if this has been posted before… This is a video of the Olympic village in Vancouver… This place is a disgrace and should just be bull dozed..http://www.youtube.com/watch?v=WYnP4Cs6rgE&feature=player_embedded

#94 Kitchener1 on 03.21.11 at 9:17 am

Taking out any black swan events and just focusing on the facts tells us two things.

Canada we are at record home ownership rates, the sustainability of such is quesntionable.

Demographics.

Current population trends, immigration trends etc.. do not come close to supporting the housing supply. Same story with equity markets worldwide. When the boomers all sell, who will buy?

taxation in Canada is already of the point of diminshing returns.

Regarding all this talk of 50-60hz– its a non issue as i am 100% that those systems are connected to VSD- variable speed drives.

#95 Junius on 03.21.11 at 9:31 am

#56 South Sea Company,

Indeed. Black is white here in BC as a higher jobless rate somehow is spun as good news.

The simple fact is that once the stimulus tap got turned off last year the economy has gradually been unwinding here. People underestimate the impact of the $10 Billion spent on the Olympics and the related infrastructure improvements in this province. Take that away and tighten lending in the Re market and watch out. 2011 is going to be interesting to watch here.

#96 grantmi on 03.21.11 at 9:35 am

And the MSM keeps singing the same ol tune!!

Happy days are here again
The skies above are clear again
So let’s sing a song of cheer again
Happy days are here again”Happy Days are here.

CTV news.

Despite stress, no crash seen in housing

Steve Ladurantaye

The Canadian housing market is showing several serious signs of stress, but Bank of America Merrill Lynch says there’s no reason to believe values are set for a sharp dive.

“Valuation metrics are clearly stretched, but the usual symptoms of a tipping point are simply not there,” according to a report authored by economists Sheryl King and Ryan Bohren.

Link: http://bit.ly/fuoP82

#97 BDG-YYC - Fukashima - Staff Pulled on 03.21.11 at 9:49 am

Hmmm …
20:00 JST March 21: Operators evacuated workers from Japan’s tsunami-damaged nuclear plant Monday after gray smoke rose from one of its reactor units, the latest of persistent troubles in stabilizing the radiation-leaking complex.
The evacuation brought to a standstill some of the work on restoring the plant’s electrical lines and restarting the water pumping systems needed to keep nuclear fuel from overheating and releasing even greater amounts of radiation.

#98 Ex-Cowtown on 03.21.11 at 10:28 am

Weird things going on in the Calgary market. I’ve been following a certain RE website for several months now. Things have been slowly down-sliding for the past while, but then on March 19th, sales suddenly fell out of bed.

Median price and average price took a massive dump. We’re talking $100K+ on the average and around $70K on the median. Coincidence with the expiry of the 35 year amortization? Maybe.

But then the March 20, median and average recovered a bit, but still down significantly. High dollar house sales were virtually non-existent (breaks the pattern of the last few months) and total house sales fell to 9 (yes 9!) for the whole city of Calgary. Weird….

Not sure what to make of it. Could be just an outlier, maybe the high rollers went on spring break vacations, but even over X-Mas the numbers were better behaved than this…..

http://www.findcalgary.ca/page_content-19.html

Have to keep an eye on this one and see if it’s just a statistical freak or if it is the sign of things to come.

#99 Tim on 03.21.11 at 10:34 am

111 Years of Lessons
http://www.financialpost.com/news/features/years+lessons/4458395/story.html

Stocks were the standout winner over 111 years, besting bonds in every country.

Globally, stocks had an annual real return of 5.5% versus 1.6% for bonds. Investors planning their retirements should pay heed to the modest magnitude of both these returns.

What many investors aren’t familiar with is the riskiness of bonds. Bonds have also endured deep and prolonged downturns. In the U.S. after World War I, the real value of bonds declined by 51% over five years.

#100 Daisy Mae on 03.21.11 at 10:37 am

77 Marplatense on 03.21.11 at 1:52 am

“My inlaws are selling their mother’s house in Vancouver, the RE agent told them to ask 2 M for it… they think they are gonna sell it for 2.7 tomorrow. They expect 12 HAM offers.

I will update you when they sell… because I am sure they will.”

Criminal. Has anyone figured out the RE fee on this amount? $7000 on the first $100,000 and 3% on the balance? Of course, it is ‘negotiable’….

#101 Jamie J on 03.21.11 at 10:41 am

Why Some People Mistakenly Think The Toronto Condo Market Will Fall – Jamie Johnston, Re/Max Condos Plus

… what do you guys think?!?

http://www.remaxcondosplus.com/blog/why-some-people-mistakenly-think-the-toronto-condo-market-will-fall/

#102 Herb on 03.21.11 at 10:47 am

#79 Comrade,

“… raising commodity prices each time ended with a war.”

If you move some of the labels of wars on the chart to the actual periods of the wars they cover, it is clear that wars caused the rise of commodity prices. For instance, the War of 1812 ran 1812-14, as did the run up of prices. Similarly for WW I (1914-18), and WW II (1939-45). (Continuing price rises after WW I and II would be explained by reconstruction following them.)

The “warm” phase of the Cold War lasted from about 1950 to 1990. However, the climb to the price peak labelled “Cold War” started with the Oil Crisis of 1973, so attribution to Cold War requirements would be problematical. Korea (1950-53) and Viet Nam (about 1960-75) had little effect on commodity prices, perhaps because they were confined and international participation was limited. Not sure if the March 2011 peak resulted from Iraq II (2003-?), but it would be right in line.

Kind of shows that Heraclitus had a point: “War is the father of all and god of all.”

#103 Herb on 03.21.11 at 10:55 am

#89 S.B.,

you wanna be liberated, move to Libya. Do you think those expensive missiles can be expended on just anybody?

#104 Brad in Van on 03.21.11 at 11:01 am

@ #75: Not Fooled By Property Spruikers Hype…

You’re so spot-on you are bringing a smile to my face. That excerpt on Dateline shows EXACTLY why China will not be the savior of Canada or Australia. I’ve been saying for a long time now that China’s economy is not transparent, the books are falsified, and the Chinese government are doing anything and everything they can right now to “save face.” These ghost cities are much like what has been done throughout the world, except China’s gone way, way, WAY overboard with their aggressive expansion abilities. They pretty much done what we’ve done, except they didn’t just overbuild with a couple towers… NO, they had to build whole god damned cities that will never be occupied. TOO MUCH PRIDE and ignorant the world has better access of getting this kind of information. The cat’s out of the bag with the REAL health of the Chinese economy, and it has been for about six months. What will this do for their economy? Well, they’re going to hit a brick wall, of course and crash. When they finally do crash, whether they want to artificially prolong their fake “prosperity” or not, it will prove extremely painful for Canada. We won’t know what hit us in BC. The Chinese are known for being gamblers, and they’re also known for leaving their investments and returning home to tend to business (ie. collapsing home values). Also, in case anyone has missed it, the Chinese government have been conducting stress tests on their banks with an anticipation as much ad 60 PERCENT COLLAPSE in their RE values.

#105 Brad in Van on 03.21.11 at 11:08 am

BTW, who the hell is over in Japan helping to control this potential nuclear melt down? It sure as hell isn’t us Canadians. Oh wait! That’s right, it is the American military and their analysts and their scientists and their engineers and their systems architects. But wait, the Yanks are assholes, right? Like I said, believe what you want – They’re needed more than anyone on Earth. When hard times hit, the whole damn world looks in their direction for guidance and help. Hell, we cannot go a single day on this blog without doing it.

#106 Timing is Everything on 03.21.11 at 11:10 am

#89 S.B

Ha! I counted 112 missiles…but what’s a couple missiles between friends. Hmmm…Missiles on the ground, not boots… Boots are so yesterday…and messy for ‘our side’ (aka the ‘white hats’)

Sno-cone.

#107 Moneta on 03.21.11 at 11:10 am

Just went to look at IFIC numbers.

Cash levels have not been this low in nominal terms since 1997. Cash at 5.3% of AUM is probably at 15 year lows.

Net sales are very low. Just wondering how markets can keep on rising without more money printing.

#108 mab on 03.21.11 at 11:18 am

Another day, another lousy home sales report.

The National Association of Realtors reported this morning that existing home sales slid 9.6% last month and prices dropped to the lowest level in nine years.

The report underscores the challenges facing the home market as it trails the rebound shaping up in other parts of the economy. Most economists don’t expect the home market to recover significantly until the jobs picture starts to improve.

#109 mab on 03.21.11 at 11:19 am

On Monday March 21, 2011, 10:14 am

According to the National Association of Realtors , Existing Home Sales came in at 4.88 million annualized sales– much lower than Wall Street’s expectations for 5.15 million sales. Here’s your Cheat Sheet:

Sales: Sales of existing homes came in at a seasonally adjusted annual rate of 4.88 million in February.

Month-over-Month Change: This is 9.6% below the upwardly revised 5.40 million in January 2011 .

Year-over-Year Change: This is 2.8% below 2.8 percent below the 5.02 million pace in February 2010 .

Prices: The national median existing-home price of $156,100 in February was 5.2 percent below February 2010.

Inventory: Up 3.5 percent to 3.49 million existing homes available for sale. This represents a supply of 8.6 months at the current sales rate, up from 7.5 months in January.

#110 Moneta on 03.21.11 at 11:19 am

Finally, Garth unless your head is in the sand you should know that every state has a budget issue. So rates won’t go up, since almost every state will be forced to default.

————
To keep rates down, they have to keep on printing.

Do you think they can keep on printing forever without som e kind of repercussion. The more they print, the more they will squeeze out the private side and the faster we move towards inflation.

The elastic will snap.

#111 LALA Land on 03.21.11 at 11:23 am

Brad in Van, WAY TO GO!!! Very good posts and I am sick of people bashing the USA too. Just ignore BPOE. He is an idiot who really should get out and travel more often. It sounds like he’s never left BC in his entire life and all that rain has settled water on his tiny little brain.

The latest news with unemployment rising here is horrible news. I don’t care how they try to spin this, higher unemployment yields even higher unemployment. It becomes a catch 22 that is difficult to reverse. As more people lose jobs, affordability of housing will obviously decline. Here comes the landslide in prices in Vancouver. I can feel it now.

FYI, it is PISSING RAIN here in Vancouver today. Ugh.

#112 jess on 03.21.11 at 11:35 am

…is this a return to buybacks ?

—————————————
preventative/corrective maintenance failures….health and safety are not included….

In economics, the term economic efficiency refers to the use of resources so as to maximize the production of goods and services.[1] An economic system is said to be more efficient than another (in relative terms) if it can provide more goods and services for society without using more resources. In absolute terms, a situation can be called economically efficient if:

No one can be made better off without making someone else worse off.
No additional output can be obtained without increasing the amount of inputs.
Production proceeds at the lowest possible per-unit cost
===================
The- told- you -so stage
By Jason Clenfield

March 18 (Bloomberg) — The unfolding disaster at the Fukushima nuclear plant follows decades of falsified safety reports, fatal accidents and underestimated earthquake risk in Japan’s atomic power industry.

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aFWC3RYALjeI

#113 punnoval on 03.21.11 at 11:36 am

I am sure many people on this site are familiar with the SoCal site “Doctor Housing Bubble”. I say that this site should try to replicate it as applied to Canadian conditions (ie) more data, less anecdotes. The sentiments are the same. How about it, GT?

http://www.doctorhousingbubble.com/debt-built-society-negative-real-household-income-gains-sharpest-rise-home-values-ever-debt-replaced-income-wage-growth/#more-4383

#114 ash on 03.21.11 at 11:44 am

#83 604
I live in Surrey, noticed a lot of sold signs all at the same time as the 5/35 leaves. Just wondering where can I find the ACTUAL selling prices of these homes?
**********************

If you have any real estate friends, they can find that information out for you :)

#115 Mister Obvious on 03.21.11 at 11:57 am

#70 (tran, Calgary)

“God always give ample warning.”

How asinine. Sorry, just gotta say it.

#116 GregW, Oakville on 03.21.11 at 12:15 pm

Hi #65 Nostradamus, thanks for that link “A house of cards” regarding the Canadian det level, and that the group with the sign isn’t allowed to be on Parliament Hill with it. (Smells bad. And that det number is BIG!)

Might someone know if the PM H. can boom Lybia without getting approval from Parliament first???

I only ask since it appears to me that dropping booms on another country is an act of war!
(Did something change with the letter head to “H’s Government” that I missed???)
(Also I thought Congress in the USA were the only ones who can declare war on another country before the USA booms started dropping?)

#117 AG Sage on 03.21.11 at 12:26 pm

#86 bigrider on 03.21.11 at 7:41 am

>My proof? Housing has declined verywhere in the world

Except China, India (esp Chennai, Kolkata, and Mumbai) Australia, and Canada, Tasmania, New Zealand, South Africa, oh and the UK only adjusted a little, so they’ve only half fallen.

If we just count only the middle class of the developing countries (to be fair to relative market participation rates) we get ~600 million people. That is most definitely comparable to the U.S. and Europe put together. That’s not “everywhere” by any stretch.

Add onto that real estate barely cracking 20% (at the peak) of the GDP in the places that have crashed, compared to it being 70% of the GDP of China, and one could question whether this is even half over.

#118 bridgepigeon on 03.21.11 at 12:33 pm

102 Herb
Anyone sitting on oil reserves.

#119 dddd on 03.21.11 at 12:37 pm

the closest thing to a ‘sure thing’ i have seen in a while was healthy Uranium stocks at fire sale prices at the end of last week. (so i went all in, reckless cowboy i know…)

cco.to late fri was under 29 – up a modest 9% so far today – still climbing – i expect a return to the 40’s

brave techs in japan will tame the fukushima monster in a few more days.

#120 Live Within Your Means on 03.21.11 at 12:38 pm

Got together with a few boomer neighbours yesterday to celebrate a B’Day. One couple just got back from Florida. They stayed in Fla. with a cousin & wife who recently bought in Florida (Orlando? – 1hr. from the ocean) for $100K. They live in Maryland, are close to retirement and will move to Florida. The house has no pool (not interested), sits on 1/2 acre lot and she estimated it would easily sell for $400K on our st. in Dartmouth.

Another neighbour’s daughter & family live in Surrey. They bought a townhouse 10 yrs. ago for $120K+ – does that sound reasonable? – so many conversations going on – and I have ear problems. They considered upgrading, but said no way. They have 2 children. She’s a nurse, not sure what he does. Same neighbour’s son’s family recently moved to PEI. Both parents have well paying jobs (wife works from home & no, neither work for the govt.) They paid just over $100K for a really lovely home. They previously bought & sold 3 homes here & made money – timed it right. They are in there mid 30’s.

The hosts of the get together closed on a house on Friday for $180K. Not for themselves. He popped in to tell us. We said nothing. His son from a previous 2 yr marriage resulted in 1 little guy & they had to bail him out financially. His current partner has a little chap the same age (also divorced). Hosts took out a 10 yr mortgage at, IIRC, 4.75%. Son & partner will pay mortgage, etc., but apparently their finances will be tight. BTW, neighbours are 60 & 56. Granted their house is long paid for, as are most on our end of the street. But, they think if things go wrong, they’ll just sell the place. :-)

Pardon my long post.

#121 GregW, Oakville on 03.21.11 at 12:42 pm

Hi #111 jess, Do you have any thoughts about PM H.’s and F’s plans to sell Canada’s Nuclear industry to private Corporations, with consideration of the Japan private electric company falsifying safety records of there plants?

Do you think that some corporation will still want to buy AECL and/or pay top dollar for the Canadian payed for technology?
Why is it for sale at all again, who will benefit?

#122 Live Within Your Means on 03.21.11 at 12:42 pm

#114 Mister Obvious on 03.21.11 at 11:57 am
#70 (tran, Calgary)

“God always give ample warning.”

How asinine. Sorry, just gotta say it.

…………….

Gotta agree #114.

#123 Sitting on the Sidelines on 03.21.11 at 12:47 pm

The whole HAM argument is getting a little stale – many of the houses on Vancouver’s west-side are being purchased by non-Chinese individuals who think they are going to make a lot of money by either holding and then selling to Chinese immigrants sometime in the future when prices are even higher or by tearing down and selling new houses to Chinese immigrants. Most of the developers in my neighbourhood (Vancouver west-side) are Indians who build the houses on spec and hope for the best. Many of these developers are now moving their speculative endeavours to the burbs since Vancouver has become so pricey, leaving the development biz to amateurs hoping to cash in on the bubble. People are mortgaging their own knock-downs to build new on a neighbouring lot in the hopes of making a killing. Even a 25% fall in prices would absolutely devastate these people – just like in the 80s.

#124 jess on 03.21.11 at 12:49 pm

they are all defecting
Yemen army chiefs join opposition ….resolution 1973 ?

Al-Jazeera reports that the list of Yemeni ambassadors joining the side of the protesters is growing. It says the ambassador to Egypt is the latest, joining those in Syria and Saudi Arabia, who have also sided with the opposition. Al-Jazeera also lists the ambassador to Jordan, Kuwait, China and the United Nations as having defected.(guardian)

#125 groundzeropat on 03.21.11 at 12:50 pm

My wife’s friend is a realtor and she said since the Japan quake Chinese RE buyers have fallen off a cliff. Funny how that will never make it to the media and also the realtors who blog here will not mention it.

#126 Live Within Your Means on 03.21.11 at 12:53 pm

PS to my previous post re neighbours buying a house for his son. Wife’s bro is a RE agent for Exit so they got a deal on fees. Actually the whole family have/are involved in RE in one way or another and have owned/sold a good portion of land where we live.

#127 martin on 03.21.11 at 12:54 pm

BRAD IN VAN—

THUMBS UP!!!!!

#128 Devore on 03.21.11 at 1:24 pm

#84 Marty

You need to review your monetary system mechanics. The Fed does not borrow money. It creates money. It does not pay any interest, except on excess bank reserves, if it chooses to; it may very well CHARGE interest in the future.

Interest on treasuries is paid by… the Treasury. Duh. Interest paid on treasuries held by the Fed is returned to the Treasury, and counts as income, perversely encouraging debt monetization.

#129 Two-thirds on 03.21.11 at 1:30 pm

Spin spin spin…

“An overwhelming majority of Canadians (90%) are confident about real estate in Canada as an investment and 85% feel that they are doing a good or excellent job of paying down their mortgage, according to the 18th Annual RBC Homeownership Study.

Almost three-quarters of Canadians (73%) believe that they or their family are well-positioned to weather a housing drop. ”

http://www.edmontonsun.com/homes/homesandcondos/2011/03/19/17685221.html

I haven’t come across the RBC survey quoted in the advertorial. Highlights from the “article” include:

– 45% of those surveyed think it is better to wait to purchase.

– 81% are looking to buy within the next 12 to 24 months

– 60% think the market is not balanced

– 71% say it’s unlikely they will buy

But the headline says it all – 90% are confident about real estate in Canada as an investment, in spite of all of their other seemingly contradictory opinions.

Confidence.

Blind confidence.

#130 WINNIPEGER on 03.21.11 at 1:44 pm

Per CNN…..existing USA home sales down 9.6%

#131 eaglebay on 03.21.11 at 1:50 pm

#82 AxeHead

The high price of oil (shipping) will stop the Chinese’s ability to ship any kind of large items to North America.
It’s already happening with steel and now furniture and food.
The North American auto manufacturers will survive just fine. So will the steel makers, furniture makers, etc… meaning more jobs for North America.
With peak oil and the price to be paid for oil, the global economy, as we know it, will change drastically.

#132 Devore on 03.21.11 at 1:52 pm

#89 S.B.

Well, missile assault won the war in Iraq, so it’s a cinch here. Right?

Despite politicians’ denials, there WILL boots on the ground needed, before the summer, heck, before the month is over. Who knows what Gaddafi will do; he is cornered now. He has nowhere to go, and if he surrenders his days are numbered. He will fight to the end to retain power, and he is in a good position, holding Tripoli and the west coast. You can’t take him out in Tripoli with missiles. After the no-fly zone proves to be utterly inadequate, we’ll be stuck there for years. This is Iraq all over.

Like Saddam, Gaddafi has been armed by the west, and quite well. Gotta recycle those petro-dollars!

#133 WINNIPEGER on 03.21.11 at 1:53 pm

next to fall is Canada (but not till after the election)

#134 SCalgary on 03.21.11 at 2:01 pm

#98 Ex-Calgary,

Sales number on Sundays usually be lower because realters have 48 hrs to report their sales. Mike Fotiou’s page is very detailed than CREB. I stopped collecting data from CREB when I found this guy is doing for us… should appreciate that this guy is ‘working’ for the commisions that he earns… But he hates Garth’s view, as if like Garth is trying to ruin them… and he doesnt understand that Garth recommands having a knowledgebale realtor for buying property. Mike Fotiou makes a big issue if Garth interprets things in a different way…and forgets to appreciate the free service Garth does to everybody….

http://calgaryrealestatereview.com/2011/03/10/banks-circumventing-new-mortgage-rules/

This is nothing when comparing with the realtors spinning sunshine story each day…

For your info, I think, in August 24 2009 there was 0 (Zero) sales and thats still a record.

Cheers

#135 Victor on 03.21.11 at 2:12 pm

#118 dddd on 03.21.11 at 12:37 pm

the closest thing to a ‘sure thing’ i have seen in a while was healthy Uranium stocks at fire sale prices at the end of last week. (so i went all in, reckless cowboy i know…)

cco.to late fri was under 29 – up a modest 9% so far today – still climbing – i expect a return to the 40′s

brave techs in japan will tame the fukushima monster in a few more days.

=====================

Agreed. I picked up CCO and UUU last week.

#136 Jamaican_Gal on 03.21.11 at 2:13 pm

“If you sold your house after reading this blog – ConGarthulations!”

Ha! Ha! How appropriate…clever, really.

#137 Rusty1 on 03.21.11 at 2:53 pm

#75 Not Fooled By Property Spruikers Hype

WTF is a spruiker? English translation, please?

#138 Groundhogday on 03.21.11 at 3:19 pm

#128 Two-thirds

I’m sorry that you’re angry that you’re renting.

#139 Cato on 03.21.11 at 3:28 pm

Many in the middle class are about to be wiped, not much can be done to avoid it. From an economic standpoint lifestyles over the last 10 years weren’t really deserved so at end of the day maybe nothing is really being lost. Austerity tends to put a pretty hard edge on society along with changes. Houses are just a symptom of a much larger systemic problem that goes to the structure of the economy itself. You simply can’t have a world made up of consumers on one side (west) and producers on another (bric) without economies eventually hitting brick wall, this has been a long time coming.

Yes, commodities in a nominal terms are overvalued but the conundrum for the market is which is overvalued more – the commodities themselves or fiat money used to price those commodities. The US dollar is being deliberately debased, for keynesians in power there is no other choice. At some point the bond vigilantes will impose fiscal sanity on out of control gov. deficits but not until serious damage has been done to both paper money and world economy. Commodities haven’t really risen, its the value of money that has declined. Each time the printing press is turned on commodities move a little higher.

The bright spot might be the potential renewal of what makes America great. Libertarians who were once just considered a freak fringe group within the republican party are gaining momentum and forcing a shift in the party. This is transformative, the resulting political animal is something the US has never seen before. If they have their way they will cut deep, perhaps at some point even end the federal reserve system itself. They wish to return the US to its roots of free market capitalism & individual liberty – whether outcome will be positive or negative will remain to be seen. Obama opening up yet another military front in Libya is just acid in the wound of growing gov’t resentment that is now starting to boil over.

What does this mean for Canada? We’ve been able to straddle both sides of an economic fence but that too must end. We were able to tag along in the shadow of the US reaping the benefits of free market capitalism without fully subscribing to it. Canada is going to have to make a choice one way or the other. Free market, small gov’t on one hand and socialism on the other. Do we strip away concept of big gov’t and live with consequences of true capitalism – or do we shift ourselves away from the US and join EU style socialism.

#140 Vancouver_Bear on 03.21.11 at 3:56 pm

#23 BPOE on 03.20.11 at 8:31 pm

Best Pot On Earth please stop advertising your stuff here, we can see that it’s awesome, just based on your upsmoke posts…..either share it or stop posting. You make us jaleous. Damn, quality pot is hard to find these days.

#141 Lexie on 03.21.11 at 3:59 pm

#51 – Enlightened:

I tried FSBO in Calgary and put my house on Kijiji for $379K, Realtors told me I should list for $410K. I thought I could get a quick sale because it was priced really well. I showed it to at least 2 people every day for a week. Got 2 offers, $300K and $330K. People were mean and very critical about the house and the location. Not so much the location of the house but the actual subdivision. (You would think people would know about the location before they wasted their time looking at a house)
I got tired of it very fast and listed it with a realtor for $399K, still below market value. Had 3 potential offers the first day but when the offers found out there were other offers they didn’t want to get into a bidding war and decided to wait to see if the first offer was accepted. The realtor told me that the first offer was the highest and we worked with it and sold for $393K the next day. (And I was willing to sell at $375K privately). My advice would be hire a realtor and get it sold. It’s a great feeling not to owe the bank.

#142 jess on 03.21.11 at 4:01 pm

Revealed: Where the despots of the Middle East hide their money in London
Tom Harper
18 Mar 2011

http://www.thisislondon.co.uk/lifestyle/article-23933230-where-the-despots-of-the-middle-east-hide-their-money-in-london.do

#143 BPOE on 03.21.11 at 4:31 pm

LaLa Land
The only thing you feel is that cold change hitting your hand as you pass over the double double to your paying customer. Unemployment has no affect on prices here. Get over it
___________________________
The latest news with unemployment rising here is horrible news. I don’t care how they try to spin this, higher unemployment yields even higher unemployment. It becomes a catch 22 that is difficult to reverse. As more people lose jobs, affordability of housing will obviously decline. Here comes the landslide in prices in Vancouver. I can feel it now

#144 Steven Rowlandson on 03.21.11 at 4:42 pm

Garth about that last essay.

So, if mom’s $400,000 had been put into the pre­ferreds of a few banks, she’d pay for her digs ($36,000 a year) and still have $200,000 left a decade later.

I take it the dividend was roughly 9% and there was a capital risk due to market conditions hence the possible $200,000 loss. Is that about it if that course of action had been taken?

Steven

#145 March of the Pigs on 03.21.11 at 4:51 pm

#134 Victor on 03.21.11 at 2:12 pm

With any luck you’ll get cancer and

DELETED.

#146 Live Within Your Means on 03.21.11 at 5:01 pm

Woopy Dee , Flim Flam F was shown on TV buying new shoes before the budget and said he had donated $200 towards the Japan relief fund. How much does he and his wife earn. ???????? I know we and others donated $100. This con artist govt. is beyond shame!!!

#147 Live Within Your Means on 03.21.11 at 5:09 pm

#136 Rusty1 on 03.21.11 at 2:53 pm
#75 Not Fooled By Property Spruikers Hype

WTF is a spruiker? English translation, please?

Ever hear of google?

#148 Live Within Your Means on 03.21.11 at 5:20 pm

PS to my response to #136 Rusty1 on 03.21.11 at 2:53 pm

Sorry Rusty1, didn’t mean to be nasty, but I was. Having a bad day. When I don’t understand something, I first check out Wiki and/or then google the word or phrase.

#149 Mr. Plow on 03.21.11 at 5:51 pm

#66 Junius…

The interest rates when they booked originally are likely higher, so unless you see significant increases in the next short while most will renew at likely better rates than what they got originally.

I am on a variable and my term is coming up in October. I have never paid higher than 4.2%.

My bro in law is on a fixed and is paying over 5%, he is anxious to renew at lower rates.

I agree with you that higher rates will kill it, but it seems like in the short term they are not changing that significantly.

#150 Marty on 03.21.11 at 6:06 pm

How can you say “The result could be higher American interest rates sooner than anybody expected.”?

You’re saying the Fed wil increase its own borrowing costs. It owns more Treasuries than any other country now. So you’re suggesting it will increase its balance sheet even more until it can find a much-greater-fool to offload the worthless toxic TBills.

When EVERYONE knows that U.S. needs to service 14.4 Trillion debt and 1T deficit, raising rates means automatic default unless the Fed prints more money with help of more QE rounds.

Some numbers here. If rates go up by another 0.25% this actually represents 50% increase on debt servicing interest. Where will the extra money to pay the higher interest on the TBill going to come from?

Finally, Garth unless your head is in the sand you should know that every state has a budget issue. So rates won’t go up, since almost every state will be forced to default.

Did you consider these constraints before formulating your analysis?

Asked and answered. Stop being tedious. — Garth

#151 TS on 03.21.11 at 6:08 pm

Latest stats show US housing number continue to decline…volumes down and prices now at 2002 levels…

http://finance.sympatico.ca/home/us_home_sales_fall_to_9-year_low/79e49db6

#152 Mr. Plow on 03.21.11 at 6:09 pm

#51 – Enlightened

I have sold FSBO before, and I don’t think I will do it again. I don’t like using a realtor because all I need is access to the comparable sales to price and the exposure of the MLS to sell it.

But since I can’t post on MLS I need to post on Comfree or Kijiji or something and more often than not the buyers you find on those sites are all looking for “a deal” they aren’t interested in paying market price. I have also found that they are not the best quality buyers. i.e., they are not overly serious.

As much as I hate paying the commissions I will always use a realtor. I would recommend finding a good one that you can negotiate a fair rate with. I own some rental properties and have given my realtor a lot of business over the years so she lists for me at a small flat rate because she knows she will get the full commission when I buy. She also does a great job.

If you must go FSBO I would recommend using multiple sources to get the best exposure possible, Comfree, Kijiji, Property Guys etc… And list the house at a price that houses in your neighborhood are selling for not listed at. I would also post in your ad that you will pay ‘X’ amount of dollars to a realtor who brings you a buyer. A lot of realtors patrol those sites, but most respectfully stay away. If you are offering some $$ you might pay half the commission and get a quality buyer.

Good luck.

#153 Dan4gabriel on 03.21.11 at 6:14 pm

excellent blog.
Common perception is that real estate only goes up in the long run.
How about Black Swan? In Japan, starting in 1992 the real estate prices have decreased 13 years IN A ROW.

#154 Patiently Waiting on 03.21.11 at 6:20 pm

#51 Enlightened on 03.20.11 at 10:50 pm
Help!
I realize I’m not quite on point here but I’m hoping to garner some solid advice from those of you who have sold their homes privately. We are looking to list this week, have had a couple of market evaluations done and are very up on what is going on in the neighbourhood and local (central BC) market.
I can’t stomach the thought of doing all the dog work only to hand 15k minimum over to a ‘professional’…
———————————————————-

Enlightened: I used HomeBuyAndSell.com to sell my home and saved $39,000 in Vancouver, and i know another friend who used them and saved $26,000. They sell MLS Classified Ads, and provide recent sales mls data to check your price, free title searches, free contracts & advice as well.
Good Luck selling :-)

#155 comfortably numb on 03.21.11 at 6:34 pm

#51 Enlightened

I would DEFINITELY look at how receptive central BC is to FSBO first. We sold our place in Vernon quickly to the first people looking, for the price we wanted. However, the Okanagan has a well established FSBO history. We used a FSBO service called OK Homsellers ( a couple $100 dollars i believe) and got on a well visited web site, photos, write ups and street direction /lawn signs. Our purchasers used a local lawyer to draw up the offer and home inspectors to complete the purchase. I never worried about someone casing my home..do you think realtors are doing background checks on their clients ? If you dont like them on the phone or at the door dont let them in. You can always offer a small commission to realtors for bringing you a sale and save a bit of cash that way. Believe me, the realtors will knock on your door or email you the minute you list it FSBO. Remember you dont qualify the buyers, the bank does. Once they sign the offer to purchase and remove subjects it is on the buyers to complete or risk forfitting the deposit they gave you . For us it was a successful, learning experience but it may not suit all personality types. Again, make sure that where you live there is an appetite for FSBO or you will be signing up a realtor most definitely.

#156 Karla on 03.21.11 at 6:42 pm

In response to WesternCanadian from Saturday’s posts. Thanks for offering your stock suggestion (although I am of the frame of mind that stocks are not where I should be starting out), and thanks too to Garth for offering his opinion that a resource stock isn’t a good pick for a novice. I appreciate both contributions.

Don’t be too nice, K. He might try to sell you his horse. — Garth

#157 BrianT on 03.21.11 at 6:52 pm

#130Eagle-Rather than just repeat others’ theories, try doing some simple research (takes about a minute). US imports from China for Jan 2011 up 25% YOY, higher than any month prior to May 2010. Posters on this site have explained repeatedly how fuel efficient long distance shipping by freighter is-if you want to see oil depletion related change, wait for trucking firms, airlines and far flung suburbs to show you.

#158 Monty Python Pony on 03.21.11 at 6:55 pm

WOOOOHOOOOO!!!!!! WAY TO GO, BRAD IN VAN! YOU ARE AWESOME! Thanks for having the balls to say what you say. Sometimes I think we Canadians are too afraid to go against the grain and we eat up everything we hear about how great it is here in Canada. But, alas, it isn’t. It really is pure propaganda and media shoving it down our throats. I too believe the U.S. has had its fair share of bashing and it needs to stop. They aren’t perfect, but God love them!

#159 ballingsford on 03.21.11 at 6:56 pm

Is my POoPO posting here? The musical one.

#160 pjwlk on 03.21.11 at 6:56 pm

#51 Enlightened:”Can anyone offer any the pros & cons of FSBO from a personal perspective?

I have not sold a house without a realtor but I’ve read comments from many people who have. The most common are:

– The buyer wants a reduction in the price because you’re not paying a realtor.

– The seller thinks people are being rude by slamming their home. (See #140)

– The seller gets emotional and defensive and loses the sale.

– The potential buyers feel they can’t get ask delicate questions or get honest answers from the seller.

As far as people “casing” your home to rip it off, that can happen regardless of who is selling it.

Best of luck with what every route you decide to take. I’d love to hear back from you if you decide to FSBO.

#161 BrianT on 03.21.11 at 6:58 pm

#152Dan-Here in Honolulu you can get a 5 star condo for less than the original price in 1988 (about 550 US/sqft). This place had a similar run to the one currently in Vancouver-it was driven by the Japanese bubble of the late 1980s.

#162 Hoof-Hearted on 03.21.11 at 7:19 pm

#83

I live in Surrey, noticed a lot of sold signs all at the same time as the 5/35 leaves. Just wondering where can I find the ACTUAL selling prices of these homes?
=====================

Call up the realtor…they’ll tell you.
I do all the time, and never had one NOT tell me.

#163 jess on 03.21.11 at 7:29 pm

greg,

…it can never be different when the differences are always the same

and what is similar is that mother nature and humans are not predictable.

men fear thought as they fear nothing else on earth, more than ruin,more even than death. Thought is subversive and revolutionary,destructive and terrible;thought is merciless to privilege, established institutions and comfortable habit. Thought looks into the pit of hell and is not afraid.

Bertrand Russell

#164 Junius on 03.21.11 at 7:34 pm

#148 Mr. Plow,

Certainly I agree right now but we should see at least 2 rate increases this year and perhaps more. When the renewals come up from 2007, 2008 and 2009 starting in 2012 there will be trouble.

#165 Devore on 03.21.11 at 7:36 pm

#151 Mr. Plow

It’s really the exposure on MLS that sells the house. FSBO’s don’t have access to it. There are some FSBO sites, in addition to Craigslist and Kijiji, but, as you note, most buyers looking through those are going to put in extremely low bids, and are not worth wasting time on.

There are some realtors who will can do an MLS listing for a fixed fee (couple hundred), with the seller handling everything else (description, pics, taking calls, showing, paperwork, etc), so that may be something to look into.

#166 Hoof-Hearted on 03.21.11 at 7:47 pm

#144 March of the Pigs on 03.21.11 at 4:51 pm#134 Victor on 03.21.11 at 2:12 pm

With any luck you’ll get cancer and

DELETED.

=====

Garth:

Next time DELETE the whole post and ban the blogger….
Who amongst us has not had friends and family affected by this?

What a disgusting thing to say.

#167 Herb on 03.21.11 at 7:52 pm

Political conclusion after watching John Baird and Tom Flanagan trying to defend the indefensible on TV:

The CPC has the ethics of lice, and supporters who believe these lines the brains of gnats.

#168 randman on 03.21.11 at 8:10 pm

BINGO CATO!

“The US dollar is being deliberately debased, for keynesians in power there is no other choice. At some point the bond vigilantes will impose fiscal sanity on out of control gov. deficits but not until serious damage has been done to both paper money and world economy. Commodities haven’t really risen, its the value of money that has declined. Each time the printing press is turned on commodities move a little higher.”

#169 AxeHead on 03.21.11 at 8:13 pm

#130 Eaglebay.

Well maybe…but if the Chinese or Indians can build and sell a car for under 5k (I think so) even with high oil prices, they will fair well…do you not think their slave labour and aggressive ‘dumping’ practices aimed at crippling domestic manufacturing will be done without a hint of remorse? It could be Japan or Germany that suffers more.

#170 olga on 03.21.11 at 8:35 pm

http://www.ritholtz.com/blog/2011/03/how-did-canada-miss-the-housing-bust/

Junk economics — Garth

#171 Marplatense on 03.21.11 at 8:39 pm

On comment #77 I mentioned about my in-laws were selling a house, they did. They got 3 offers during the morning and they sold it for 2.55 M to HAMs…. and to answer comment #100, no… the 3% agent is NOT negotiable. Heck, I’ll pay you 5% if you sell my house for that kind of money.

#172 Timing is Everything on 03.21.11 at 8:42 pm

#102 Herb

#89 S.B.

If you have oil and are in want of liberation…there is a Tomahawk with your name on it.

Remember…Always dispense ‘liberation’ from a distance….

http://www.wired.com/dangerroom/2011/03/drones-suicidal-cousins/

Oh ya 122, not 112…What’s 10 give or take.

#173 Nostradamus Le Mad Vlad on 03.21.11 at 8:51 pm


#115 GregW, Oakville — Hi Greg. As to Harper ordering the Air Force to strike at Libya, this is precisely the same scenario that dubya used in 2003 — “You’re either with us or against us” — but it is not the muppets (politicians) calling the shots, it is TPTB.
*
2:17 clip March 26 — The Day The Brits Fought Back. About damned time, too; as Winnipegger said, next is Canada to come crumbling down. We’re eaasy pickings, esp. while TROTW is focused on the ME and north Africa.

Minnesota Now this takes the cake for the ‘War On Poverty’.

Into every life, a little (radioactive) rain must fall, combined with this.

2:11 clip Easy to see where Buffet and partner Charlie Munger stand.

Five Days The US Fed has to make public all info. on bailouts.

PIMCO buying debt outside US (after dumping all the US’), focusing mainly on ‘Rising Stars’ from East.

Libya Ssshhhhh . . . you know who needs water desperately, and will also take the oil, and Oil up.

2:06 clip “Clear warning from Putin there.” wrh.com.

Garth Fight GS head to head for Buffett’s Preferred Shares!

China is a major investor in Libya, and seems profoundly pissed off — along with Russia — at the stance the west is taking, and Wants You Can’t Always Get What You Want . . .

#174 HouseBuster on 03.21.11 at 8:57 pm

I’ll never buy a house again:

http://finance.yahoo.com/tech-ticker/why-i-am-never-going-to-own-a-home-again-536051.html?tickers=PKB,XHB,ITB,EQR,KBH,MTH,HXM

#175 jess on 03.21.11 at 9:14 pm

http://www.ginniemae.gov/

What Ginnie Mae does is guarantee investors the timely payment of principal and interest on MBS backed by federally insured or guaranteed loans — mainly loans insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). Other guarantors or issuers of loans eligible as collateral for Ginnie Mae MBS include the Department of Agriculture’s Rural Housing Service (RHS) and the Department of Housing and Urban Development’s Office of Public and Indian Housing (PIH).

Ginnie Mae securities are the only MBS to carry the full faith and credit guaranty of the United States government, which means that even in difficult times an investment in Ginnie Mae MBS is one of the safest an investor can make. The SEC alleges that Radius and DiGiorgio’s representations about the insurability of the underlying loans were false and misleading as the vast majority, more than 100 of the 154 underlying loans, were not, and could not, be FHA insured. According to the complaint, Radius never even applied for FHA insurance for most of the uninsured loans and failed to submit the upfront mortgage insurance premiums (UFMIP) it had collected from borrowers at closing to the FHA which were required for the loans to be insured. Even if Radius and DiGiorgio had applied for FHA insurance and properly submitted the mortgage insurance premiums, the uninsured loans could not have been insured because the borrowers failed to meet FHA’s debt-to-income, credit history, employment history, and other underwriting requirements.
==================================

SEC CHARGES MORTGAGE COMPANY AND ITS PRESIDENT/CEO WITH FRAUD

The SEC alleges that many of the mortgages backing Radius’ securities quickly fell into default. In October 2006, Radius correspondingly defaulted on its pass-through payments to the investors holding the MBS.

As a result, Ginnie Mae was required to pay investors the remaining principal balance on each uninsured loan that was in default, thereby incurring several million dollars in losses. In addition, investors holding the Radius securities lost interest income due to the unexpectedly high rate of prepayment of principal (by Ginnie Mae) as the Radius loans fell into default.

#176 Cato on 03.21.11 at 9:29 pm

For anyone going FSBO route listing on MLS is well worth the expense but the RE industry still has to adjust to competition ruling so you’ll find pricing all over the map – doing a bit of legwork can pay off. I’ve found with minor amount of negotiation can list for a $250 – $300 flat fee, and get some market research thrown in as well. I didn’t find it necessary to offer a buyers agent commission – I think most agents are likely to shun FSBO listings anyways. Most markets (except for areas still in spec. frenzy) are being driven by price and can’t beat the pricing advantage cutting agent commission out of equation gives so end of the day I think being priced right is the biggest driver of foot traffic through the door.

#177 john m on 03.21.11 at 9:36 pm

#166 Herb on 03.21.11 at 7:52 pm..<<< disgusting isn't it,and they are taking credit for "income splitting" which was Garth's proposal not theirs! In fact this blog is a result of their total incompetence and the housing crisis that our country faces.I really wonder what has went on behind the scenes considering their lack of information?

#178 S.B. on 03.21.11 at 9:38 pm

Seems the plan is for bankrupting the US? War is a business, and business is good.
————————————-
With U.N. coalition forces bombarding Libyan leader Muammar el-Qaddafi from the sea and air, the United States’ part in the operation could ultimately hit several billion dollars — and require the Pentagon to request emergency funding from Congress to pay for it.

The first day of Operation Odyssey Dawn had a price tag that was well over $100 million for the U.S. in missiles alone. And the U.S. military, which remains in the lead now in its third day, has pumped millions more into air- and sea-launched strikes targeting air-defense sites and ground-force positions along Libya’s coastline.

#179 Anonymous on 03.21.11 at 9:40 pm

I live in Kitchener-Waterloo. I bought my house FSBO 2 years ago and sold it FSBO earlier this year. When I bought it, it was listed on ByTheOwner.com, which is now ComFree. When I sold, I listed it on PropertyGuys, and I also listed it on MLS.ca.

We listed the house on Thursday, and planned to start open houses the following Wednesday. But we got an offer on Sunday for our asking price, before even having an open house, and before the listing even showed up on MLS. We had been watching the houses for sale in our neighbourhood for the past 6 months, so we knew what a reasonable price would be.

In some cities (e.g., Vancouver) FSBOs are very rare, and almost everyone goes with Realtors. In KW, from what I can tell, there are plenty of FSBOs.

My thoughts about the FSBO route:
– As a FSBO, it is hard to orchestrate a bidding war. If you think that’s a possibility, you should work with a Realtor.
– The free photographs that PropertyGuys took for us were pretty bad. You may want to consider hiring a professional photographer.

Reply to #164 Devore:
“It’s really the exposure on MLS that sells the house. FSBO’s don’t have access to it.”

Not true. Or at least, this may vary by location. Here in KW, plenty of people look at the PropertyGuys and ComFree listings. And, as I said, PropertyGuys has a service that can list your house on MLS.

“There are some FSBO sites, in addition to Craigslist and Kijiji, but, as you note, most buyers looking through those are going to put in extremely low bids, and are not worth wasting time on.”

Not true. We had ~10 people come to see our house, and all were serious buyers. There were no lowball bids. We had three offers all within 2% of our asking price. No one wasted our time.

Reply to #159 pjwlk:
“The buyer wants a reduction in the price because you’re not paying a realtor.”

This did not happen to us. People knew that our house was reasonably priced.

“The seller thinks people are being rude by slamming their home.”

A few people who saw the house were unnecessarily critical about silly things. But that’s part of the job — you have to have a thick skin and ignore that.

#180 S.B. on 03.21.11 at 9:55 pm

Oh dear, the international banksters won’t like this at all. They took down Iceland, Ireland, and most of Europe without a fight (no missles).
—————

Qaddafi is using gold like currency
The Libyan central bank – which is under Colonel Gaddafi’s control – holds 143.8 tonnes of gold, according to the latest data from the International Monetary Fund, although some suspect the true amount could be several tonnes higher.

Those reserves, among the top 25 in the world, are worth more than $6.5bn at current prices, enough to pay a small army of mercenaries for months or even years

#181 Jason on 03.22.11 at 1:25 am

I love the picture in the blog it made me laugh. More blogs should have interesting pictures

#182 Future Expatriate on 03.22.11 at 3:24 am

Why duck when you have the sure-thing chance to dick some clueless victims?

#183 Steven Rowlandson on 03.22.11 at 10:24 am

Hello Garth.
It is the doom of people that they forget the basics and overstep the mark. Rest assured that mark is easily overstepped.

“Two years of increasing house values (he estimates 3-5%) will put the average Toronto SFH at $817,000, which is almost nine times what the average family earns. No matter, says Bill, nobody cares about such ratios. The only thing that matters is the monthly.
Were it so simple. May God show her mercy to 416 and the west side of Vancouver, for they know not what they do…”

The big problems with the above situation is they are counting family income instead of one income.
Secondly they have embraced the concept of rejecting conservative home price to single income ratios.
Thirdly there is the problem of abnormally low interest rates which punish savers and encourage excessive borrowing and spending.

All this has created high home prices and high public and private debt levels that are not sustainable.
Furthermore it has set up a financial disaster that is looking for a place to happen. I don’t know the time and date but when TSHTF it will not be a pleasant event.

Steven

#184 GregW, Oakville on 03.22.11 at 4:09 pm

Hi #162 jess, Thanks for that thought, interesting.

Hi #172 Nostra, After I posted, I learned that Canada’s Parliament was going to and did debate the action(war) against Lybia. All the sitting Parties seem to support it. Time will tell if it was …
Also thanks for your links. I hadn’t heard of the drinking water project in Lybia.
Imagine the Lybia’s being able to feed them selves and there neighbors!
(And they probably know better that to add
‘toxic fluoride’ to there drinking water.)

The whole thing keeps reminding me that the world petrol dollar is USA and some blood spilled to keep it that way is of no concern to TPTB.

‘Robert Newmans History of Oil’ an entertaining show you might find interesting. It can be found on YouTube. He seems to have a blog too, but there aren’t any great pic like Garth has on his.