Zip it

OK, I’m sorry. Over the past year I have talked way too much about horny people, KY Jelly, appealing bosoms and chiseled butts. Like mine. This has horrified some people, led more than one realtor to call me depraved, steamed up far too many screens, and made reading this pathetic blog a fireable offence in offices run by moralistic weenies.

Some have said this undermines my message, whatever that is. Others only bookmark this site when they have their special underwear on. In any case, there is a reason.

An oft topic is real estate, as you know. And it’s the only asset class that’s scientifically proven to stir the same loins and arouse the same juices as that first roll in the sack. This then – desire, want, attraction, obsession – is how we got house porn. Just like the other porn, it’s now fed by a massive industry of books, magazines, videos, web sites and TV shows. And it’s getting worse.

This brings me to Patricia. In the case of her and hubby, house lust turned into Debbie Does Dallas:

Hi Garth, I have a bit of a doozy for you.  I read your column everyday and hoping you might be able to shed some light on my messy situation. My husband and I are in our mid thirties, no kids and own 2 homes in the Lower Mainland, just sold both in the past 2 weeks.  First one sold for $570K, amount owing $380K.  Second one, primary residence sold for $860K, amount owing $600K.  We have secured a rental and planning to live debt free for a while (kind of).

We also are slumlords in Dallas TX.  We purchased 320 apartment units in 2008 with a downpayment of $800K ($560K of it borrowed money from a Canadian bank – oh how easy it was to get the money), US loan of 6 million.  These were supposed to be cash flowing in the neighborhood of 10-15K per month.  Long story short, there was a foreclosure and we now only own 58 units, losing approx $300K on the units foreclosed.  The current 58 units are comprised of 2 separate low-income Hispanic apartment complexes. The first one is worth about $700K and has $470K owing on a traditional US bank 30 year mortgage.  The second is worth about $775K and has $525K owing, financed by the previous owner at 7% interest only.  These buildings both pay for themselves, but there is no cash flow.

I am wondering what to do with the $425K or so I am going to have when my 2 Lower Mainland sales complete in about a month.  Like I said, I do owe about $560K to a Canadian bank which right now is locked in at 2.7% for another year with a monthly payment of $2,600.  Our plan was to take that $425K and pay down the $560K. Messy I know, right? Advice?”

First, a gut check on US real estate. House prices fell another 3% in February, the seventh monthly drop, and have now gone into a double dip. The first dip was exactly two years ago, followed a year of gains – thanks to government stimulus (Obama paid people to buy houses) – and things are freefalling once again. Prices nationwide are down 32% from the peak in May of 2006. Phoenix is down 56%. Miami off 42%.

Over 11 million homes are valued at less than their mortgages. Another 2.4 million families have less than 5% equity. Almost half the houses for sale are distressed.

So, two sets of people were crushed. Those who bought at any point in the last two years of the bull market. And those who thought the bottom had arrived two years later. Apparently the real vulture feast is only just beginning. In fact, there’s a self-reinforcing negative cycle taking place, as more distraught property sales drag down average prices, leading to more people who must sell. It’s unknown when this will finally stop. By the way, the same thing is starting to happen in Britain. Spain. Greece. Portugal. Probably Australia. Housing is now so Hugh Hefner.

This likely means Patty would have a helluva time bailing on her Hispanic apartments in Dallas. But if she walks, she leaves $430,000 in equity on the table. Worse, she owes $560,000 in Canada, where banks have long arms and longer memories. So, it makes sense to pay down the Canadian borrowing with the house proceeds and cut the debt to about $140,000. Poof. Her house equity is gone. In fact, everything’s pretty much vanished.

But this is not about lusty Canadians ravaging foreigners. It’s a cautionary tale.

Yesterday we all mused on the possibility of an NDP-led government in Canada. Might happen. Might not. More certain is rising interest rates, absolutely by the 20th of July. Already happening are falling sales in most major markets. Down, in fact, for the better part of a year. Prices are now unraveling in the Okanagan, great swaths of Ontario and everywhere in cottage country. Unemployment is stuck. No new factories are opening. Middle-class families are tapped out. Mortgage rules are tighter. Bond yields are increasing, with mortgages next.

And look at what the media is saying (“Houses bought today have questionable investment value.”). Every week the horny stuff this hormonal blog has poked for the past three years is turning into news copy. Housing’s no longer a worthy asset. It’s just sex. But the price of getting satisfied has never been higher.

So remember my guidelines. The rule of 90. Diversification. Liquidity.

But mostly, stay zipped.

165 comments ↓

#1 TaxHaven on 04.26.11 at 7:54 pm

“No new factories are opening.”

Really! And when did ANY “factory” recently open in Canada?

You woke up to post that? — Garth

#2 Hoof - Hearted on 04.26.11 at 7:58 pm

FIIIIRRRRRRRSSSSSSSSSSSST (at least to post FIIIIRRRRRRRSSSSSSSSSSSST )

#3 April on 04.26.11 at 8:01 pm

Monday’s post.
Alex #197
Good work.

#4 nsqt on 04.26.11 at 8:05 pm

Love your insight, love your humor, and value your opinion……don’t change a thing….if people are complaining about your style…it must mean they are reading your blog…..

#5 Icedpee on 04.26.11 at 8:06 pm

Sell the two U.S. properties. There is absolutely no reason to keep 0 cash flow properties unless they’re hard up to mitigate their ultra high income with interest from the debt.

Thank god Van real estate saved them or they would really be in a jam.

#6 Hoof - Hearted on 04.26.11 at 8:09 pm

I think the post should be ” Dallas did Debbie “.

Google ” David Ingram” with Stirling Faux….US is a shitty place to invest given the tax implications.

Only Canada seems to allow this foreign ownership free for all

http://www.youtube.com/watch?v=dLqNuTiX67s&feature=related

Below is archival footage of Canada’s Bob Guccione

http://www.youtube.com/watch?v=YLe33nbkPwc

#7 Boombust on 04.26.11 at 8:10 pm

My my. Greedy Patty.

#8 Guy_in_Regina on 04.26.11 at 8:11 pm

What a finish on that article though: “Second, there’s the best reason of all to own a house. It’s freedom: Your family, your rules, your lifestyle. That’s really what you’re investing in when you buy a home today.” Freedom! LOL!

Hey, that’s you in the pic, right Garth?

And only people concerned with the adhesiveness of Polident think this blog is depraved – mild stuff for us youngins.

#9 HouseBuster on 04.26.11 at 8:14 pm

These faux millionaires with their granite counter tops and stainless steel appliances are going to get a rude awakening if they don’t wise up soon.

#10 mel on 04.26.11 at 8:15 pm

And zipped we shall. Waiting for the day when I can freely unzipp.

#11 Pr on 04.26.11 at 8:19 pm

In a time of universal deceit – telling the truth is a revolutionary act.

#12 Kevin on 04.26.11 at 8:37 pm

Garth,
about US housing
The folks at Demographia wrote an report that showed how restrictions on land development contributed more to the housing bubble than subprime mortgages. States were separated into 2 classes:
1.Responsive Land Use Market
Minimal impact on land costs.
2: Prescriptive Land Use Market

With States that had responsive land use markets, house prices relative to income increased by 18.8%. For States that had prescriptive land use markets, house prices relative to incomes increased by 57%.

The more stringent the land restrictions were, the less housing market were able to adapt to increased demand, which increased house prices. When residential land is restricted, then housing became unaffordable.

While Canada did not have the same level of subprime, we did not need to, it looks like most Canadian centers have restricted land use policies. This has pushed up house prices beyond what the fundamentals should allow.

Ever wonder why Houston which had more than the National average of subprime usage never really had a housing bubble? It is because of liberal land use regulation.

US Housing Bubble: Was restrictive land use policies worse than subprime mortgages?
http://saskatoonhousingbubble.blogspot.com/2011/04/us-housing-bubble-restricitve-land-use.html

#13 tran,Calgary on 04.26.11 at 8:40 pm

No worry, by 2012, most of our problems will be solved.

http://beforeitsnews.com/story/588/922/NASA_Warns_Super_Solar_Storms_Forecasted_For_2012_Could_Kill_1_Billion.html

#14 Carp on 04.26.11 at 8:42 pm

I’ve read plenty of Rob Carrick’s articles and I’m sure he reads your blog, waits a month or two and then paraphrases you and does give you the credit.

#15 Carp on 04.26.11 at 8:42 pm

opps … correction …. doesn’t give you the credit

#16 Tim on 04.26.11 at 8:44 pm

Garth,
You’ve talked about buying properties in the States, but what about Europe? Given the massive correction in Spain, with over a million vacant properties, at what point should one consider buying in the Costa Del Sol?

#17 JohnnyBGood on 04.26.11 at 9:06 pm

So now even the media is sobering up when it comes to houses, eh?

My take on the article cited in Garth’s blog…

“The most enduring and simplistic argument for buying a house is that you’re making an investment. What an understatement. Between your mortgage, property taxes, utility bills, maintenance, furnishings, renovations, landscaping and such, you’ll be investing non-stop in your home.”

Your home is not an investment, it’s a consumption good. The author proves that without realizing it. The only reason homes have seemed like investments is because of inflation. Ex-inflation homes pay you nothing. Those who make a genuine inflation-adjusted profit from selling a home generally just get lucky in most cases.
—————-

“…houses have been an excellent investment that rivalled the stock market.”

Really? The stat at the bottom of the article puts housing at 8.3% and the S&P/TSX at 8.9%. However, I don’t have to keep feeding my stocks furniture, and granite, and electricity, and TVs, and carpets, and appliances, and paint, and fertilizer and shingles and…. Stocks don’t need repairs. They only cost money when you trade them and you don’t pay tax until you sell them. I guess the author forgot about such things.
—————–

“…between April, 1989, and February, 1996… the average resale home price in the city fell… 31 per cent.”

Something most of us seem to have forgotten: house prices CAN actually go down–a lot.
——————–

“That was an extreme plunge, fuelled in part by a level of rampant speculation that we aren’t seeing in today’s market…”

I can’t count how many houses in my own neighbourhood have “For Lease” or “For Rent” signs on their front lawns. Speculators? Nahh!
——————

“…someone who bought an average-priced house in Toronto around the ’89 market peak and still owned it would be looking at modest annualized gains in the 2-per-cent range.”

Leaving aside whether 2%/year is good or not, if you really want to judge the return on investment (since homes are investments, right?) you have to factor in operating costs. Would it still be 2% then?
————-

“Historical changes in housing prices… don’t consider things like mortgage interest, property taxes and maintenance, none of which add any value to a home.”

Ah, he gets it. Oh, wait a second…

“…the best reason of all to own a house. It’s freedom:…”

No it’s not. It’s control. Yes. It’s pride of ownership. Yes. But these are not the same as freedom. Ask any home owner whose bank owns most of their home if they feel “free.”

As for Patty:

Anyone who non-chalantly describes herself as a “slum lord” who owns two so-called “low-income Hispanic” apartment complexes without shame gets everything she deserves.

#18 Min in Mission on 04.26.11 at 9:07 pm

Don’t have to be in Dallas to get screwed. How about buying a condo in Abbotsford, just married, wife pregnant, borrowed the money for the DP, hubbie makes $14/hr? This story came up during lunch this week. WT? I cannot believe that this kind of stuff still happens. Will people never learn?

#19 Dan in Victoria on 04.26.11 at 9:11 pm

Well I had reason to call Oklahoma city this morning.
I did business with a fellow down there years ago and needed some info.
His company is dependent upon new home construction.
After exchanging greetings I asked how they were doing.
Pretty rough Dan, things are bad.
Seems to have leveled off for now he said and there is some activity. Not like it was.

How much for a lot I asked? 25K a real nice one for 65K.
I told him about the million dollar plus tear downs in Vancouver.
He laughed and laughed.
You guys are nuts he said it’ll turn bad wait.
He was still laughing when we said bye…
Let me know how it goes he chriped…….

#20 OttawaMike on 04.26.11 at 9:28 pm

#289 Industrial Guy on 04.26.11 at 3:51 pm
Re:Denmark
I deal with a centrifuge manufacturer based in Philly. highly specialized equipment that nobody else can manufacture to the same performance specs. This includes Japan and Germany.
After 70 years the Philly production plant is shuttered with only design and administration remaining there.
The US owned manufacturing centre is relocated to Denmark with all its high tax and wage glory it still beats the cost of the Philly plant.

Germany is another example of a thriving socialist state still competing and producing high value, quality manufactured goods in spite of Asian competition and the albatross of a socialist state.

So somebody remind me again why the lefties in power = the end of Canada?
_______________________
Oh yeah, Patricia should double down and buy a few more Dallas slums on leverage. Easy come easy go.

#21 Cellar Dwellar on 04.26.11 at 9:37 pm

@ #18 Min in Mission
“…. buying a condo in Abbotsford, just married, wife pregnant, borrowed the money for the DP, hubbie makes $14/hr?….”
+++++++++++++++++++++++++++++++++++++
What sad story. I hold the realtor and the Mortgage broker to blame for garbage like that! I would say that a person earning $14/hr in Abbottsford is …Shall we say…. Not quite intellectually over burdened?
The weasels that conned them into “signing here, here and here” should be exposed in the local Abbottsford newsrag for the shysters they are.
But, Unfortunately, scum rises to the top…….

#22 Boombust on 04.26.11 at 9:45 pm

“The weasels that conned them into “signing here, here and here” should be exposed in the local Abbottsford newsrag for the shysters they are.”

Don’t be such a chump.

The idiots who own that rag in Abby probaby own Global TV Newz and The Vancouver Sun, et al.

Sheesh.

#23 Hoof - Hearted on 04.26.11 at 9:45 pm

So somebody remind me again why the lefties in power = the end of Canada?

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

Go look at a friikin globe or Atlas. Germany and Denmark could literally fit into most Canadian Provinces

Canada is a huge and diverse land.

Revue how the Atlantic province were once the industrial hub and how Ottawa manouevered this to Ontario.

Canadian industry has a lot of Gov’t influence/interference, starting with HBC and CPR

Nowadays, Gov’ts will still porkbarrel with various high profile contracts.

#24 Marco on 04.26.11 at 9:47 pm

One principle I have always abide by in any investment is that of “you make your profit when you buy”. Don’t be hormonal and react to this – I don’t mean to negate the fact you BANK the profit when you sell, but that you put yourself in a profit making position when you buy.

For many “investors”, especially those for whom greed and fear seem to occupy the same schizophrenic brain-cell, they buy when everyone buys and they sells when everyone sells, effectively buying on the way up and selling on the way down.

Usually these kind of “investors” were kept at bay by the very high bar of entry, which has been demolished by the banking industry practices of recent so any moron can get into the “game” of becoming a blind leveraged speculator (don’t tarnish the term “Investor” with that definition).

I guess as the “.com” era passed, so has the “property era” (for most of the world – with Canada as one of the laggards, but inevitably will here too)…

There were and are many very astute people who are still making millions in high tech, but the average punter has left (with some unleveraged losses).

Just as there were as many very astute people who made and are making millions in property, the average punters are being mauled with leveraged losses.

I use the commoditization of knowledge in any market as an indicator if one is in a pre, early, mid or late bull market and one of the key metrics of this is the availability of materials in the public domain, eg. books, blogs, seminars etc. on the subject matter.

The fact there is so much business in talking about a market segment and so many “investors” (errr… better word:”fools” as describing people who may have read a book or two or been talked into it by another) chuck all their financial future into a single investment class, tells me we’re well past a maturity peak and about the point where the risk curve heading south intersects the gain curve which is on a shallow upwards trajectory before moving south too.

When the nooses started tightening on the necks of the millions of people who without due diligence jumped off that platform in the promise of riches, it dawned on them the rope they had was not for safety, but for something else…

This kicked off 3 years ago in the US and is progressing around the world…

Most banks in Europe, less the UK, Iceladic and Irish ones were as “prudent” as the Canadian ones, and some even more.

The ECB base rates are moving up with taxes and social services cuts, you have the writing on the wall for Canada.

Europe has no shortage of immigrants, provides as good a sefety net as Canada, and has more “best places on Earth” that the whole of Canada put together, let alone the art, history, culinary and wine culture, design and other attributes that put thousands of vacationing Canadians on planes every year.

Despite that, it is maintained “it is different here (Canada)”… I’m sorry, I can’t see it…

People like Patricia and hubby are incredible, not because of intelligence or any other positive attribute, but for sheer reckles stupidity. I’m no fan of Schadenfreude (deriving pleasure from other’s suffering), but I certainly am a big fan of eliminating stupidity…

How the hell could you take such a stupid risk unless you absolutely had no idea of what the risk was and the dynamics of the market you invested in?

How the hell could a bank be in the position to finance such a “deal”?

Ridiculous!

#25 The Phantom on 04.26.11 at 9:50 pm

Hi Garth (and fellow bloggers):

Just a side note to reveal to you that your choice of vocabulary isn’t really all that inappropriate given some of the meanings that are attributed to the terms we employ in our lexicon. For example, the word “porn” is a derivative from the ancient Greek word “pornost” or “porneia” meaning literally “to buy or sell a slave”. Obviously it has taken on a different hue in our culture and today it conjures up visions of heaving bosoms, lusty youth, Kleenex and steamy (coke bottle styled) glasses…

This reminds me of the sage and august individual who recently explained the French meaning that lies behind the word mortgage or “mort and gage” (it is buried somewhere in the last day or two of posts). It was insightful and interesting to say the least. How many people are “slaves” to their homes; their mortgages; real estate in general? How many “slaves” are being “bought and sold” in the marketplace of increasing housing values, soon to rise interest rates and unaffordable lifestyles of the not-so-rich and shameless?

Anyway my final point in closing is that perhaps those who find offense here either lighten up a wee bit, wink at some of the humour that can be found herein or read something less entertaining…The second point that I would like to make is that RE agents who elect to paint contributors (and lurkers) here with the broad brush of depravity would do well to laugh at the humour as well (even if some of it is at their expense). Although I could be wrong, my thoughts tell me that there isn’t going to be much good cheer or matters to laugh about if your principle source of income is derived from real estate in the coming months…

The Phantom

#26 tiedattutu on 04.26.11 at 9:52 pm

I own rentals (3 houses and 22 apts) in a college town of about 100k. I have no debt, and do a lot of the work myself, but am still barely making it. The price of everything has been skyrocketing since 2000. Much faster than I can increase rents. Service calls 2000 $35, 2011 $145. RE prices have plummeted and the city is still handing out building permits like candy. And the neighborhoods are beginning to resemble Ciudad Juárez. I’ve come to terms with the fact my government, on all levels, doesn’t give a rat’s ass about me, and I’m getting ready to flee for what ever I can get. I’m just here to be financially butt plundered. I’ll sell out to a slumlord who will provide barely livable housing to the hordes of poor people that will populate the future. 40 years down the toilet, but worse things have happened to people throughout history. So those who are thinking of becoming landlords: come on in-the water’s nice and warm and teeming with sharks. Even better, try being an absentee landlord. Sweeeeet!

#27 SMOKING MAN on 04.26.11 at 9:59 pm

I so want a crash for my kids, I’m a sh!t head I won’t help them.

I have so enjoyed the ups and downs of getting rich and going broke two many times to count, why would take that fun from them.

But the bottom line is know one, including oracle Garth knows the future. Just read the predictions of 2008 and 2009. WRONG.

Bottom line is you play the game, go all in, sometimes you win the pot, sometimes you go bust, it is what it is.

The real estate cow in Toronto west by the lake south of lake shore, small bungalow , is pocket aces, with an ace on the flop. It can lose, but odds are in your favor. Been drinking again tonight, so I would just like to thank Garthooo for letting my insulting and sometimes rude posts attacking bubble heads and basement dwellers get posted. Garth you are true democracy. Love you man, even though I disagree with you most of the time.

#28 MP on 04.26.11 at 10:00 pm

The International Monetary Fund has just dropped a bombshell, and nobody noticed.

For the first time, the international organization has set a date for the moment when the “Age of America” will end and the U.S. economy will be overtaken by that of China.

And it’s a lot closer than you may think.

According to the latest IMF official forecasts, China’s economy will surpass that of America in real terms in 2016 — just five years from now.

http://finance.yahoo.com/banking-budgeting/article/112616/imf-bombshell-age-america-end-marketwatch

#29 S.B. on 04.26.11 at 10:12 pm

Now this another downgrade. First World countries are being turned into Second World countries (by the bankers)? Greece, Ireland, Iceland, Portugal, USA, Spain, et al.

Japan Debt Outlook Cut to ‘Negative’ by S&P on Rebuilding Costs
By Christopher Anstey and Ken McCallum – Apr 26, 2011 10:24 PM ET

http://www.bloomberg.com/news/2011-04-27/japan-debt-outlook-cut-to-negative-by-s-p-as-quake-rebuilding-adds-to-debt.html

#30 I Tried on 04.26.11 at 10:18 pm

I tried to warn him.
My son just bought his first home today. A 1957 2 bedroom 850 sqft for 295 in the west end. This was the very first home he even looked at and spent a whole 10 min’s looking at it. Then he dumped his whole life savings of 15g and the bank was happy as punch to supply him a 30 year M. Just married 6 months, baby on the way.
If i didnt like him i would have him commited.
P.S. He says it has a nice garage.

#31 The InvestorsFriend (Shawn Allen) on 04.26.11 at 10:27 pm

CASE SHILLER WAS NOT DOWN 3% in FEBRUARY.

It has been reported thgat House prices fell another 3% in February, the seventh monthly drop,…

Not quite true. The above implies it was a 3% drop since January. But it was 3.3% since the previous February one year ago.

The latest (February) Case-Shiller index of United States home prices by City came out today. Some headlines indicated it was down 3.3%. But that was down 3.3% from a year ago. So the notion that U.S. house prices were down another 3.3% in February is false. In fact, in February the index was down 1.1% from January. And, on a seasonally adjusted basis to correct for normal seasonal fluctuations in
s house prices, they were down 0.2% or basically unchanged. So beware misleading headlines. The fact is the data suggest that U.S. house prices have changed very little on average in the last few months.

The period of charging declines is OVER, we are now close to flat in the U.S. house prices and most likley the trend will soon edge up.

Hate to burst bubbles, but the end of the world is not nigh…

See the Case-Shiller data here:

http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff–p-us—-

#32 AG Sage on 04.26.11 at 10:27 pm

>#12 Kevin on 04.26.11 at 8:37 pm

How in the world did the U.S. end up with 19 million empty houses if land use was too restrictive?

Credit was too unrestricted. Fix that and the other problem takes care of itself. When average households jump into speculation and buy 3-4 houses certain they can flip them, unrestricted building simply leads to crushing oversupply. Epic policy fail.

You can use condos in Toronto as your live case study. Watch as 30,000 new condos destroy the market over the next two years. Fun times. Oh, those poor restricted condo developers.

This restriction whining is about developers itching to build even more unlivable acreage of crackerjack boxes. If you want actual freedom to build for the masses, you’d have to cut developer influence off at the knees, not hand them carte blanche. Gutting their influence would be an excellent policy change. And about as likely to happen as Wall Street getting regulated at some point in the future.

#33 Into The Suset on 04.26.11 at 10:28 pm

” Stay Zipped”

That’s what got Patty and partner in trouble!!

If he had “Unzipped” and had a couple little ones, the possibility of being in their situation would have been remote.

#34 Into The Sunset on 04.26.11 at 10:38 pm

My “n” got left behind. Sunset…not Suset.
Such is life!

#35 JohnnyBGood on 04.26.11 at 10:42 pm

#26 tideattutu:

I find your comment very interesting, and timely.

I have been considering investing in a rental property for a couple of years now. However, in line with your experience, I find the “quality” of renters declining. Tenant issues rising. Rent inflation is not keeping up with operating cost inflation. Cap rates are too low (prices too high). Rental properties in high demand (I am almost philosophically opposed to getting into a bidding war). I can’t find a property right now that will not have negative cash flow. The number of rental units on the market seems to be rising, vacancies everywhere. Then there are the condos everywhere!

My in-laws did very well with a modest investment in a rental property, so I thought I could carry on the tradition, but right now, as far as I can tell, the numbers don’t make sense (let alone the hassle). I see many landlords cashing out while the cashing’s good. But not in distress, so prices remain stubbornly high. Then there is the double land transfer tax in Toronto, which doesn’t help.

#36 I Tried on 04.26.11 at 10:43 pm

I guess i should have written that this was in the land of oil and money (Edmonton).

#37 Charles Ponzi on 04.26.11 at 10:45 pm

Staying zipped in Australia. Yes, the media here has finally acknowledged that our real estate bubble is popping. Even reports of negative equity coming from Perth. First Home Buyers are on strike and auction clearance rates remain anaemic. Job losses to follow. Interest rates to rise as today’s inflation numbers come in bigger than expected.

Having kept it zipped, however, this property virgin is very nervous about the banks going bust while holding on to my precious male load. At times like this I envy those who have nothing because they have nothing to lose.

#38 The Phantom on 04.26.11 at 10:45 pm

#27 SMOKING MAN

Hey Smoking Man…looks like you’re having a fine time! I remember working papers on the computer after tipping more than a few and was amazed at the keystroke errors the next morning! Been sober for just over 6 years there buddy so do me a favour and have one drink for me before I retire to bed…

the Phantom

#39 JohnnyBGood on 04.26.11 at 10:54 pm

BTW tiedattutu:
just the other night, I was at my in-law’s apartment building dumping bucket-fulls and bucket-fulls of smelly scum water from a backed-up drain, trying to keep the utility room from flooding until Mr. Rooter showed up. Talk about SWEEEET!

#40 nonplused on 04.26.11 at 11:08 pm

This is an extremely long read, but the best argument for a devaluation (or hyperinflation) I have seen yet. Garth will hate it.

http://fofoa.blogspot.com/2011/04/deflation-or-hyperinflation.html

The executive summary, as best as I can render it, is thus:

– A fiat currency system supporting a government that has a structural deficit always ends in hyperinflation.

– The hyperinflation is always intentionally undertaken to save the financial system from deflation, which is ruinous in a debt laden society.

– It is a political event that is undertaken intentionally to provide the money to keep the government running (QE2??), and to pay back lenders in full with cash even if the debts have gone sketchy (TARP??)

– The rich do not suffer in a hyperinflation as much as you would think, because the central bank buys their debt assets at par and gives them cash (Fannie and Freddie??) The rich then use this cash to front run everyone else who does not have cash into the mad dash for real tangible assets (gold??) As he puts it, you don’t have to out run the hungry bear, just your hiking partner.

– If you don’t have access to the ready cash being made available to buy troubled debt assets, hyperinflation does not help you even if you are a debtor. Your house may go up in value, but between rising interest rates, taxes, food and energy costs, and what-have-you, you still won’t be able to pay your mortgage. On this point I would add that if inflation is at 30%, even on your house, and interest rates rise to 25%, your mortgage could explode but still be increasing less than the rate of inflation. If your after tax income is not rising enough to keep up with the mortgage, inflation will not bail you out.

– Other than farm land, real estate is not a good hedge in hyperinflation. Gold is, because it becomes the mechanism by which the rich transition to the new currency regime that comes after hyperinflation.

– The Fed and the US dollar is not going away, it’s just going to be repriced. Gordon Gono is still the head of the central bank in Zimbabwe, and Zimbabwe is still there. They have learned to live with 1 trillion dollar notes.

– You do not need much gold to make the transition compared to the total theoretical amount of wealth you have in dollars. Gold also gets repriced.

– Savers who have their assets primarily in dollar denominated assets and cannot sell to the central bank early on are wiped out.

I have long argued on this site that I do not believe we are passing any of our debts on to the next generation. Having just read this blog, at least for the moment this argument may show how in fact the debts are repaid without passing anything on to the next generation, but the current generation of savers may be well a totally screwed if they do not take evasive manoeuvres.

#41 bubble town on 04.26.11 at 11:11 pm

I dont like extreme positions and that’s why I am happy with my position related with RE. When I was going to buy my first house, the bank told me: according to your income you could have a 1.2 Million mortagage….I told them maybe but I dont care, I just want 300K and I had 100K so I bougth a 400K small house….that was 4 years ago. I really dont give a a s*h$% if the bank or my friends think I am cheap guy but I sleep like a baby every night….. my friends complains all the time about the money they have to place into their houses etc…..life is short and has many more important things to think about than big overpriced Macmansions…
L

#42 V Fekete on 04.26.11 at 11:13 pm

A small 3-bedroom house in Toronto (28 Braeside) which was listed for a few weeks in April at $949,000 and didn’t get any offers was taken off the market and re-listed today at $999,000!! Similar houses sold for $700,000 24 months ago.

Check it out: http://www.realtor.ca/PropertyDetails.aspx?PropertyID=10605871&PidKey=-1163069445

Who in their right mind would pay a million for a little shed like this in North Toronto???? And is this realtor nuts?

#43 impulse on 04.26.11 at 11:14 pm

#272 UK Love Calling
Skyrider, thank you for proving my point. Absolute stupidity.
——————-

Thanks for a good laugh, brother!
Ignorance and arrogance – favorite Canadian games.

#44 nonplused on 04.26.11 at 11:21 pm

How on earth did somebody with so little equity in their own house (and but 1 Canadian rental) manage to secure 8.5 million in financing?????

No worries for the bank though, as per my previous post Fannie May bought the mortgages from the bank at par and is holding them as a tier 3 asset on the accounting statement.

#45 (low density) Sam on 04.26.11 at 11:24 pm

I have talked way too much about horny people, KY Jelly, appealing bosoms and chiseled butts. Like mine.
___
sorry G-man,
“chiseled” is not the same as “droopy, hairy cellulite”

#46 pablo on 04.26.11 at 11:27 pm

OK, I’m sorry.- Garth.
WTF! I can’t believe it, somebody must’ve spiked your squirrel quiche with psychotropics, dude. What’s next apologize for the sarcasm and condescending quips at the end of some peoples posts when they get under your skin?
ooohh skin – sorry.
Since when do you worry about what moralistic weenie’s and opinionated realtors or horrified interlopers think? Damn it man; you’re sounding like a gelded journalist. Don’t fold, stay true to your calling, without the ribald language and the libidinous prose what reason would most of us have to come here? The pics won’t save you. Promise me you’ll grow a pair and I’ll wear my special underwear, just for you.

#47 (low density) Sam on 04.26.11 at 11:28 pm

#12 Kevin on 04.26.11 at 8:37 pm
The folks at Demographia wrote an report that showed how restrictions on land development
_____________
There was a similar study 2 years before the US bubble burst showing no bubble, period, anywhere in the US.

Mauldin was huge on that one for months; I bet he pulled a lot of suckers into US housing with that one.

#48 bubble town on 04.26.11 at 11:30 pm

ohhhh…now I undertand when Garth says equity banish!

vtran,Calgary on 04.26.11 at 8:40 pmNo worry, by 2012, most of our problems will be solved.

http://beforeitsnews.com/story/588/922/NASA_Warns_Super_Solar_Storms_Forecasted_For_2012_Could_Kill_1_Billion.html

#49 pablo on 04.26.11 at 11:33 pm

As far as the current election, the best times I can recall in Ontario was when T.R.H. Premier Wm Davis was in bed with the NDP. Now those were halcyon times that I yearn for, but never to come again. In comparison; Mrs McGuinty’s boy is a huge flop.

#50 jas on 04.26.11 at 11:43 pm

Th http://www.theglobeandmail.com/globe-investor/personal-finance/rob-carrick/safe-as-houses-that-loud-knocking-is-falling-prices/article1998280/

“The fastest-growing component of our population comprises those who are 65 and older. In other words, people who are going to be selling houses over the decades ahead and doing very little buying, if any. That’s bound to affect demand for homes and the potential for price appreciation.”

I would say that to minimize price impact due to above stated view, buy house in areas where immigrants are in high numbers. Why? because they sponsor their families and will be needing those bigger houses.
And I see this first hand in Surrey, BC (or Brampton/Malton, ON)

#51 jas on 04.26.11 at 11:49 pm

#26 tiedattutu
which town are you talking about? give me your contact and let me see if I can do anything

#52 Nostradamus Le Mad Vlad on 04.26.11 at 11:49 pm


2 many posts on polytix today. I’m voting Libertarian or Independent. Combined with Chretien’s ‘We will kill the GST’ in 1993 or thereabouts, this is as good a time to toss these sorry sadsack bunch of rotten bananas for good.

Debbie duz politicos? Why not? They’re screwing everything else up!
*
A Galactic Rose courtesy of the Hubble.

Obama scared? What is he hiding? Perhaps this or this 2:52 clip For those that claim the US economy is getting better, watch this. Let it collapse. So much for the US$ getting stronger (according to Geithner).

Imagine Student loan debt higher than CC debt, except there are few, if any, jobs available. Trades are excellent, and the military(?) is also available. But there is no draft.

2:16 clip The US Fed is looking at outsourcing itself. Well, not quite. They are going after invisible rabbits to check gold / silver / oil prices.

3:38 clip US cities going broke. How far behind are Cdn. cities?

The Four Horsemen behind the oil wars. There is plenty of oil left in the world for the US to fight wars. Somebody is lying, just like CC.

Fear and Leaving in Lost Wages, from the rich.

Peak Oil or Peak Debt? For those who don’t drive (like moi), peak debt may be better.

Chart Time Again Further evidence of why the US is Brokeback Mountain. Another pretty chart.

Bioaccumulation “Simply Stated – All living organisms are connected to each other through a food chain.” All the nuke waste at Fukushima is being dumped into the sea.

Stuxnet Courtesy of US – Israel. Not only is the US in the process of bankrupting TROTW, they might try hitting the destruct buttons as well on other western countries.

Nature couldn’t care less if we mess up, so why all the bickering about CC, CO2, Greenhouse gases, etc.? The world will be running for several hundred thousand years from now, and we won’t.

Monsanto Self-policing? Fuggedaboudid!

Govts. are becoming the next bubble (too big for their boots?).

#53 BC MILF on 04.27.11 at 12:05 am

Hey Garth – some advice for me SVP as I’m finally house rich and cash rich, no mortgage (though house is my small & lovely home, not my retirement plan) & I’m saving up cash like a banshee. But I have ABSOLUTELY no idea what you’re talking about with ETFs, bonds, preferred dividends etc. So I googled them, but then which ones I should invest in and how to do it?

Do you have advice for, say, the top five rules for selecting a Financial Advisor? I have two so far: don’t ask someone who works for a bank and don’t get an advisor on commission from the big mutual fund types.

You should put out a Request for Tender for financial advisors to get the Garth Turner stamp of approval, if you took % of their take you’d make a mint!

#54 BigAl (Original) on 04.27.11 at 12:14 am

Times are not rough for the professionals / semi professionals.
This sector of the labour market is not limited to just lawyers, doctors, accountants – it also includes specialists in HR, Health Admin, logistics, marketing, technical sales, “consulting”, etc., etc.
Here’s the odd thing though – although there is no shortage of people who can do these things, the business world still pays them over-the-top wages. I undertand the concept of adding value, but I think the business world is being lazy and inefficient by not actually calculating the value of these semi-professions against their actual skills and results. It appears to be more a situation of business owners/senior managers padding their corporate offices with these types as a pure comfort mechanism without much basis in results. They are overly and arbitrarily credentialized, where on-the-job training, rather than formal credentials would most likely produce better results. Business today lacks creativity and innovation in business models themselves, and workflows. Business has become stale, nothing is new, it’s all follow-the-leader, do what’s always been done. Business today is just as bureaucratic as government, if not more so. I think the free trade economic theory has been used as an excuse to cover up lazy and inefficient management. When senior executives and owners wake up to this, only then will the U.S. and Canada see the repatriation and growth of domestic business. Workers and economic theory have been convenient as scapegoats and excuses.

It seems colleges every year come up with numerous new credential certificates, diplomas, etc in every sub-specialty imaginable. (I mean come on, really. Logistics???? You really need 2 years of college, including numerous unnecessary electives, just to get a job where some software does most of the work anyways, just to track numbered rail cars or trucks????? Give me a break!). These sorts of ridiculous nuances don’t exist in the lean mean companies in the better functioning business driven economies of the world. But it’s ‘safe’ for the HR person and hiring manager to require this credential.

The U.S. is deeply mired in this false credentialism, all colleges and universities have become a diploma-mill industry in their own right, and the ‘safe’ HR specialists and mid-level managers won’t stray from their scripts. It’s a formula for business failure. The graduates from these sub-specialties only learn how things always have been done and to stick to the script. That’s fine for the trades (plumbing, woodworking, etc), but not for business growth, which demands personal talent, a fresh pair of eyes, creativity, and new ideas.

It’s not the general workers screwing this economy, its this overly entitled semi-professional class that business needs to get lean and mean with, and create some serious competition between them and results-based assessments and drop the thousands of various credentials required – only then will new ideas and business creativity flourish.

#55 T.C. on 04.27.11 at 12:35 am

You have an appealing bosom?

#56 buylow on 04.27.11 at 12:52 am

about the Abbotsford buyers….there are multi page ads being run weekly with huge writing “if you make $14/hour then we can qualify you” and also “don’t pay your landlord, pay yourself”.

There are so many lower end apartment buildings being completed in Abbotsford, it’s crazy.

The ads are full color spanning the two middle pages in the real estate papers.

#57 not asian on 04.27.11 at 1:12 am

“I am wondering what to do with the $425K or so I am going to have when my 2 Lower Mainland sales complete in about a month. ”

Don’t be so sure that your 2 homes are going to complete. I am constantly hearing buyers walking away before completion. Some have put 5% deposit – average home of $1m ($50,000.00) Wiser for flippers to walk away from $50k than complete and immediately take a $100k loss (10%) plus holding costs.

#58 Dark Sad Monster Bunny on 04.27.11 at 1:13 am

12 Kevin – I enjoy the demographia reports and have often referenced them here. IIRC, they also note the historical cyclical nature of RE prices in both types of markets. So why the big boom and busts? Well,
prescriptive land use regulation does not only limit the
land available, it increases the time to get product to
market. Thus when the market starts an upswing, the
substantial delay in supply (could be years) causes a
bubble to form. Then lots of product becomes available in
a relatively short timeframe, which in turn can crash the
market.

Close to my neighbourhood, a 60 lot subdivision took 6 years from application to the municipality to registration
in the Land Titles Office. And that was with zoning in place.

#59 David_Ricardo on 04.27.11 at 1:30 am

Huh..why do you do this blog? You have provided very valuable information to average Canadians who are stupid enough to buy at or near the top of the real estate market. You have given very good financial advice to those who do not have any knowledge about the possibilities. You have provided plenty of anecdotes of imbecilic people wanting to invest…
All in all I think you’ve done a great public service.

#60 Devore on 04.27.11 at 1:36 am

#27⁠ SMOKING MAN

Bottom line is you play the game, go all in, sometimes you win the pot, sometimes you go bust, it is what it is.

Wow, really? Easily stupidest thing you’ve yet written. Just a game, huh. Only fools rush in where simple clear-headed analysis can vastly increase your chances of “winning”, or at least not losing your shirt. Losing at the RE game isn’t quite like misplacing a $10 poker chip.

#61 BPOE on 04.27.11 at 1:45 am

Sooooo we have a date stated with “interest rates to rise” Not happening folks. Mark the date on your calendar. Let’s get serious here what are we talking about 1/10th of a percent for a few months only to be lowered 6 months later. That folks is not my definition of rising interest rates. Real game changing interest rate increases are lock ins of 5 years at 8%, anyone remember those good ole days, wasn’t that long ago.
*****************************************
More certain is rising interest rates, absolutely by the 20th of July.

#62 reality guy on 04.27.11 at 1:45 am

#21 and #18 Min in Mission

Buyer beware.

Its dummy like that, which keep the poor poor and the rich even richer.

The rich knows this game and they are the controllers.

Look at the sudden change in TONE on real estate in the past few days.

Just a week ago they were banging on the drums saying real estate was going going going higher and higher and suddenly they have started to go the other way.

My feelings on the situations is the banks (who control our nation) cannot make any more money signing new mortgages (since they already wheeled in all the suckers ) now its time to milk them dry. (higher interest rates, beating the crap out of the dumb f&(*^&%s who got in.

If you think these guys have any mercy, well think again. They really don’t care about human life, just the game of making money. “YOU DON”T COUNT!!!”

#63 confused and a little crazed on 04.27.11 at 2:08 am

i love the pic….i really do
don’t change a thing. [big :)]

#64 realpaul on 04.27.11 at 2:25 am

But Garth…if the ND puh puh puh P gets into power won’t there be hundreds of thousands of new jobs created when Jack rebuilds the country with massive public projects aimed at restoking the unionized population? ‘Ol Jack’ll put a chicken in every pot and a doctor on every corner. We’ll be installing solar panels ’cause we’ve shuttered the nasty oil sands and people will be sharing instead of being crass individualists going to the bastard banks for anymore hand outs. We’ll work in city gardens and live in tee pees.

Jack Layton has promised a golden age where unions are king…their pensions entrenched and the rest of the country will dine on the satisfaction that we have all lost our minds. YIPEEEEEEEEEEEEEEEEEE !!! Jack found the Lost Dutchmans mine and money is flowing. Taxes…….says Jack? Why get a paycheque when socialism will keep your fires burning my friends.

#65 Robert Dudek on 04.27.11 at 3:10 am

Garth,

Why do you keep pushing back the date when interest rates are supposed to rise?

To be accurate. — Garth

#66 Paolo on 04.27.11 at 3:13 am

Interesting how MSM articles on RE are changing in tone.

Just saw this one:

“Safe as houses? That loud knocking is falling prices”

http://www.theglobeandmail.com/globe-investor/personal-finance/rob-carrick/safe-as-houses-that-loud-knocking-is-falling-prices/article1998280/

My favourite quote:

“For an actual real life example of how real estate prices can fall, let’s look at what happened in Toronto between April, 1989, and February, 1996…the average resale home price in the city fell to $192,406 from $280,121, or 31 per cent…”

#67 Enjoy that... on 04.27.11 at 3:25 am

Sorry, I didn’t post yesterday about this:

“The green agenda would cost $3.5 billion extra in the first year, and be paid for entirely by a cap-and-trade system. This imposes a tax on emissions, through establishing emission limits by industry.”

Enjoy that cap-and-trade tax on emissions. Here in the UK we have that system. For a car, it’s up to $850CDN per year, with the average 1.4 ltr engine car being $375 CDN. Oh, you want a bigger than 1.4l engine? Pay.

A normal motorcycle, 750cc $130 CDN per year.

Did I mention we pay $9 per gallon for gas and $10 per gallon for diesel as well?

#68 Golden Boy on 04.27.11 at 4:08 am

@cellar dweller #21:
After you blame the realtor, mortgage broker and the boogerman for selling somebody a house, you should check out the concept of free will.

#69 SquareNinja on 04.27.11 at 4:21 am

#12 Kevin: That Demographia study was so flawed, I don’t know how you missed it. They only studied a dozen cities, and they were all either from USA, Canada, or Australia.

Look at Toronto and surrounding area’s liberal, liberal land-use policies… yet, prices are still bubbly. For evidence, look at how many new subdivisions are going up in Aurora, Brampton, Newmarket, Pickering, Whitby, Oshawa, Milton, etc. If that’s not liberal land-use policy, then I don’t know what is!

#70 Brian1 on 04.27.11 at 4:49 am

I have noticed that many American companies are taking the Canadian approach to trapping customers into their contracts and websites. At a time when Obama needs their support they opt to guarantee a sort of pension income for themselves by enslaving others. I think this is unamerican. We need people to invest (cautiously) in the stock market or we face a world depression. Obama cannot do this alone.

#71 Brian1 on 04.27.11 at 4:54 am

My last comment leads me to mention an apartment reit, Centurion Apartment Reit. Somehow they have managed to bypass the stock market with the blessing of the OSC (equivalent to the SEC I think). How can I monitor it? If something is not on the exchange I do not buy it.

#72 Brian1 on 04.27.11 at 4:55 am

If all stocks were private there would be no need for a stock exchange.

#73 Mortgage girl on 04.27.11 at 5:57 am

no. 30 I tried: i don’t think houses in that price point are nearly as sensitive as houses above 400k. It’s the high ticket infil houses which are built on spec that are being hit right now.

#74 Women? on 04.27.11 at 7:27 am

Here is my opportunity to sell, I will get a job offer next week and they pay the moving costs. Told the wife great time to sell and rent as a major decline in housing is coming. Her answer was in no uncertain terms are we renting, and that a house crash is not coming.

Oh well life is tough!

#75 SMOKING MAN on 04.27.11 at 8:02 am

60 Devore on 04.27.11 at 1:36 am
The only people losing in Canadian Real estate thus far are fence sitters.
Will that change? maybe, but you can not discount the possibility that Real estate cow still has plenty of milk. As far as only fools rush in, take stock of the rich and poor people you know, the smart ones tend to be poor as they are so smart that they avoid risk, and the dumb ones who are not smart tend to take bigger risks and are the ones with the most toys.

#38 The Phantom on 04.26.11 at 10:45 pm
Believe it or not my combinations of keys strokes get better with a few glasses of wine, I am a hard core dyslexic, stone cold sober I may even spell my name wrong. It’s a weird thing, yet when I write computer code, spelling is always perfect. Conclusion writing words comes from a different part of the brain, than when writing code. Any psychology students out their, this is a good topic for your thesis.

#76 S.B. on 04.27.11 at 8:05 am

So today’s featured blog dog once owned 320 “low income” apartments? You’d have to allocate at least $300/apartment per year in minimum repair expenses for the units and buildings I am guessing.

Think: replacement washers/dryers, leaky faucets, broken screens, light bulbs, applicance issues like burnt-out elements and lights, fixing broken tiles, painting of common areas, pest control, and so on. Plus paying someone to perform these tasks.

$300 x 320 is almost 100k yr in fees. Not to mention the regular grounds keeping and window cleanings etc (though would a ‘slumlord’ really do this)?

#77 cjlizzard on 04.27.11 at 8:16 am

you sure shes not some alberta redneck?? what the hell is an Hispanic apartment complex??? too funny!

#78 Nuke It on 04.27.11 at 8:18 am

The current mantra is house prices will level and incomes will rise to return the ratio back to norm such as three times income. So move to Vancouver and watch your salary triple or hang out in Toronto and see it double. Money for nothin and the chicks for free!

#79 TS on 04.27.11 at 8:23 am

To:#28 MP on 04.26.11 at 10:00 pm
“According to the latest IMF official forecasts”

You actually think the IMF can forecast the future?
China’s economy is a partial illusion.

The U.S. has the best entrepreneurs in the world. China is going to have a big problem with social unrest shortly.

#80 tiedattutu on 04.27.11 at 8:37 am

cjlizzard,

Just what it says. I’ve learned one thing-once you go Hispanic you never go back. You won’t get blacks or anyone else to rent. And you never have any idea how many people are living where. Leases are a waste of time as people come and go at random. If someone skips on their lease, what do you do? Go after them? Its not redneck-its called reality. And its a whole other world.

This discussion is over. — Garth

#81 X on 04.27.11 at 9:07 am

Garth’s advice getting bashed today on http://www.canadiancapitalist.com

Personally…I have no problem with (#1) targeting an 8% return, (#4) with using your non performing home as leverage to make it a performing asset, or (#5) as leverage is a great tool when used properly.

#82 grantmi on 04.27.11 at 9:08 am

#2 Hoof – Hearted on 04.26.11 at 7:58 pm

FIIIIRRRRRRRSSSSSSSSSSSST (at least to post FIIIIRRRRRRRSSSSSSSSSSSST )

No! but… 1st Moron of the day!!

#83 tiedattutu on 04.27.11 at 9:10 am

SB,

Her expenses are undoubtedly sky high. You also have to be real careful about who you have manage your rentals. They will rent their places first with the best tenants, and leave yours to last and stuff them with the crappy dead beats. They will bye stuff on your account and use it on theirs or another property. Keeping an eye on the management company is a job in itself. In low income housing your appliances tend to take a beating. I had someone kick their refrigerator door in, so I replaced it, and within a month it was kicked in too. One tenant kept bugging me for a nice new front door, so I gave in and within a week her “boyfriend” kicked it in and destroyed door and the jamb. A cheaper door and he would have just destroyed the door. For some reason there seems to be a lot of kicking going on. The secret is tenant selection, which is much easier with less units. Its impossible for absentee landlords. If I’d been there I would have told her never to be an absentee landlord-you have to be there on the ground selecting tenants and getting to know the people. Once you do that, things get a lot less expensive, and things operate a lot smoother. I cleared out all the turds and started from scratch. I now have a great group of low income tenants that pay their rent on time. It also helps that they are older and don’t have children or waste case boyfriends hanging around. People think being a landlord is a breeze. Ha!

#84 GregW, Oakville on 04.27.11 at 9:11 am

Hi #13 tran,Calgary, Will the review of the nuclear power plant safety plans take into account possible giant solar flares???

I hope so, so they can buy and have in place soon extra working large industrial transformer(s) and generator(s) with shielding to keep the water cooling pumps running.

Have you sent them a note about this yet?

And I hope they have enough fuel near by to run the generators for month(s)?

If there is a biological weapon release is there a safe place for plant workers (who know how to run and shut down the plant) to live on the plant site to control the plants safe shut down for the time required?

Like a bunker with hepa air filters, food and water?

#85 tiedattutu on 04.27.11 at 9:15 am

Sorry Garth. That indeed will be enough of that.

#86 maxx on 04.27.11 at 9:19 am

No sympathy. Nada.

#87 Mr. Plow on 04.27.11 at 9:43 am

#30 I Tried

Sounds like your son is growing up, and part of growing up is learning from your own decisions. So if the house buying decision goes poorly he will learn from it.

Just be happy for him, and be happy he isn’t asking to raise his family in your basement.

#88 Mr. Plow on 04.27.11 at 9:44 am

Alex…

Well done with the article. I think you did a great job and am happy to see they allowed you to post that.

Was it just posted online or in print as well?

#89 kilby on 04.27.11 at 9:55 am

Global News just announced that the City of Vancouver will fight the 70 pre construction purchasers of Olympic Village condos. Their lawsuit cites very poor construction, the City maintains they are just unhappy about the prices crashing. This should help expose the poor quality that is rampant in most of these buildings and the fact that investing in these is going be a big mistake as maintenance costs are going to skyrocket as they come out of “warranty” and age.

#90 Mr. Plow on 04.27.11 at 9:55 am

I’m an electrical engineer who works in Fort Mac. I make $1,800,000 a year because I work so much overtime.

I have 33 girlfriends that are all hotter than your single girlfriend or wife.

I love boats and hos.

I am smarter than you, a better athlete, and I am on the verge of curing cancer from my basement suite in my free time.

I rent said basement suite.

Love,

Eddy

#91 Ex-Cowtown on 04.27.11 at 9:56 am

SMOKING MAN on 04.27.11 at 8:02 am

60 Devore on 04.27.11 at 1:36 am
The only people losing in Canadian Real estate thus far are fence sitters.

+++++++++++++++++++++++++++++++++++

Not where I’m sitting. Houses are plastered with “Price Reduced” signs, a gorgeous house came up for sale down the street with a $70K (15%) price cut from fall (still no takers) and were starting to hear stories of former high roller acquaintances taking hits to get out (the smart ones) and other former high rollers refusing to face reality and hanging on by the skin of their teeth to massively over-mortgaged homes while bleeding cash and enjoying their new jobs at CDN Tire.

Oh, and last week, my landlord stopped by to fix the dryer, clean up the yard and replace the garburator.

My wife and I went for a walk and a coffee as we found the noise disturbing.

Unicorns and Cap’n Crunch for everyone! – Jack Layton

#92 Throwstone on 04.27.11 at 10:01 am

Utopia,

Just wanted you to see that I’m not the only one holding the opinion that harper’s economic policy’s have really only amounted to a HUGE debt! No real substance in the spending….

The global recession then saw Mr. Harper follow the lead of the U.S. government and commit to a multibillion-dollar bailout package for the Canadian divisions of General Motors Co. and Chrysler Group LLC, and inject $40-billion in Keynesian stimulus into the economy.

“I would suggest that a lot of that spending was more political than effectual,” said David Baskin, president of Baskin Financial Services Inc., a wealth-management firm in Toronto. “I think Canada’s economy wouldn’t have changed much if they hadn’t spent that money.”

After a pledge to avoid deficit spending, the Harper government’s posting of a record deficit produced almost a sense of betrayal among Canada’s small-c conservatives, Mr. Baskin said.

“I share that disappointment,” he said.

http://business.financialpost.com/2011/04/22/what-will-the-economy-look-like-if-the-conservatives-win-full-power/

I also share the disappointment. So should most tax paying Canadians.

Vote Harper OUT!

#93 Michelle on 04.27.11 at 10:03 am

Garth – LOVE your blog. Relatively new to it. I’m wondering about your throughts on the housing situation in Atlantic Canada?
Thanks for all the entertainment/education!

#94 Young Old Fart on 04.27.11 at 10:05 am

#40 nonplused on 04.26.11 at 11:08 pm

This is an extremely long read…..

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

Which is why I can bet, like all the others, I passed it over and moved on. If you can’t say it in 2 or 3 lines……

;o)

#95 The American on 04.27.11 at 10:08 am

At #31: Investor Friend, you are correct. I would point that out myself, but people would like to just argue about it. Anyway, I’ll put my neck on the line. U.S. home prices are at or near absolute bottom. If they do go lower, it will be nominal/nearly undetectable. I have been watching demand ratios within the U.S., and in nearly all markets (except for the obvious, like Detroit and Phoenix), demand ratios have improved month over month and year over year for the past 120 days. This is indicative of a market bottom. Locally speaking, Seattle now sits at a demand ratio of 1.80:1, which is incredibly healthy. This means there is only 1.8 homes on the market for every 1 home pending. At peak of market, it was at 1.7:1. Basically, it means inventory is very low. A “seller’s market” is anything 2.5:1 or better. So, you probably want to know why it isn’t acting like a seller’s market, right? One thing – perception and fear. Perception is changing, though, as is indicated by the demand ratios and people are slowly beginning to get back into the market. It would take a solid six months of information like this for perception to ultimately make a swing. We’ll see if that happens.

#96 Utopia on 04.27.11 at 10:25 am

Perhaps I have underestimated the New Democrats under the leadership of Jack Layton. Each day it is looking more and more like a strong left of center party will emerge to represent both Quebec and those who were previously not feeling represented in this country.

That is not necessarily a bad thing and offers an easy to understand and obvious counter-punch to ideas put forth by the right. This is in stark contrast to the Federalist versus Sovereigntist polarization of the past.

Perhaps Jacks rising star in Quebec can bring the country closer together along the lines of social equity instead of breaking it around those policies of division offered by Duceppe and his Bloc.

Lets hope though that this surge in appeal for Layton does not translate into a political disaster that divides the country at its roots though.

It is clear now that a new element has grown legs and been discovered by many who were previously feeling like the corp of the disenfranchised.

Who would have thought that an election about nothing could provoke so much interest in Canadians that it lead to one of the highest ever voter turnouts at advance polls.

The new element has a name. Well two actually. Perhaps you can find it on the periodic charts now. It will will forever be known as Newtonium in reference to the New Democrats.

The related element of course, is Laytonium.
Explosive stuff indeed.

#97 Quantitative Easing Explained on 04.27.11 at 10:35 am

Bernanke policy

http://www.youtube.com/watch?v=PTUY16CkS-k

#98 sj on 04.27.11 at 10:39 am

#91 Throwstone

Harper spent money was because he had a minority government. If he had a marjority, things would be different. That’s why we need to give him a mojority, and let him really fix things without his hands tied by the opposition and political concerns (to get a majority). Hope he will get it this time.

#99 sj on 04.27.11 at 10:46 am

#91 Throwstone

One more thing, even if Harper had second thoughts about the stimulas spending and bailout of the auto companies, he had no choice but to chip in given that was the direction G20 agreed, and the pressure by the opposition. As a tax payer, I do not agree with the spending, but understand this was probably the only choice at the time. But Harper is much better in terms of management capability and understanding of the economy than all other candidates we have this time (Iggy and Layton). Remember, this election is not a beauty contest, but a election of who is not the worst.
Layton does not understand Corporations do not pay taxes, only the consumers/middle class do, and worst case scenario, Corporations can move to another jurisdiction. He is all the talk, just like Obama.

#100 pen pal on 04.27.11 at 10:48 am

# 24 Marco

” ..you make your profit when you buy…”

Absolutely the truest words of a REAL investor.
Buy value at at discount, eventually the value will surface. Buying right is what it’s all about and you have not been able to buy right in housing in Canada for some years.

Excellent post Marco!

#101 The American on 04.27.11 at 10:52 am

At #79: TS, you are spot-on. I’m NOT saying this because I am from the U.S. I am agreeing with you because it is true. China’s economy is at least 50% a farce as is proven by their “ghost cities.” Their rise in GDP and “growth” has been due to nothing more than governors trying to get their incentive checks from the government. The easiest way to do this was to build build build build build! But, no buyers anywhere! The bubble is popping in China. Also, this statistic is not “news” at all. It is the first time the IMF has stated it, but TED Talks, and other media publications have proclaimed it too anywhere from 2015 to 2020. Its a joke. Watch and wait. Besides, they’re 400% larger than the U.S. Shouldn’t their economy be larger? Talk about inefficient!

#102 Scalgary on 04.27.11 at 10:52 am

Calgary Home Prices Decline…

http://www.calgaryherald.com/business/Calgary+home+prices+decline+Data/4682750/story.html

#103 somejerk on 04.27.11 at 10:53 am

#42 V Fekete – Where do you live? For an average SFH, that is a huge house in Toronto, and for the area thats cheap. Look no grass to cut. Better than the 1mil tear down, crack shacks in Van-groovy…

Don’t you know its different here?

“Who in their right mind would pay a million for a little shed like this in North Toronto???? And is this realtor nuts?”

People that would look at mc-mansions 1hr outside Toronto and pay 1.2 for them. Now, if I can only get 1mil for my little box in the sky, ss, granite anyone?

#104 somejerk on 04.27.11 at 10:55 am

#42 V Fekete – ps that price is set up for a spring bidding war… ;)

#105 Kevin on 04.27.11 at 11:03 am

#32 AG Sage on 04.26.11 at 10:27 pm

It was a combination of easy credit and restricted supply. At the beginning demand was juiced and supply had a hard time keeping up with demand because of limitations. Almost every place that had bidding wars followed this description.
Because of scarcity, prices rise. And because prices rise, more people see an opportunity and then more people buy homes and then prices rise some more. And at this same time, supply was restricted until all the buyers become sellers.

Like I said in my blog, Texas had an above average use of subprime mortgage usage, a strong economy and one the fastest growing populations but land use is not restricted and so house prices stayed within affordable historical norms according to this report.

#69 SquareNinja on 04.27.11 at 4:21 am
They studied every State. here is the report
http://www.demographia.com/db-subpstate.pdf
While not exact, high subprime mortgage use and restricted land use usually led to a bigger housing bubble.

As for Ontario, I do not know what kind of restrictions there are for land use. But a rule of thumb, bidding wars probably = a combination of easy credit conditions and some kind of land use restrictions. If supply can not meet demand, then prices will rise faster than the long term growth fundamentals of inflation and incomes. But it does not last and the bubble does eventually pop.

#106 Cellar Dwellar on 04.27.11 at 11:09 am

@#68 Golden “Realtor” Boy
Thank you for that extremely simplistic explanation. Are you the $14/hr “shotgun wedding” simpleton we’re talking about?
Perhaps if you CAN read #56 buylow’s explanation it all becomes a bit clearer.
Shysters suckering uneducated bumpkins has nothing to do with free will. It has everything to do with SCAMS.
The FBI in the States is currently investigating thousands of similar “scam” mortgages. Hopefully some of the scum will end up in prison.
Dont drop the soap :)

#107 Cowboy on 04.27.11 at 11:10 am

I really don’t understand how this lady can get millions upon millions of credit, especially for a project in the US.

I can’t even secure a measly $200-300,000 to build my own house and I have $300,000 in the business account,
own a $200,000 house outright that could be used for equity, and NO debt!
WTF?!
The fact that these apartments generate rent should not matter since tenants don’t always pay, apartments can be vacant etc.

Does the bank still expect me to buy that by lending me the money to build my own house is too risky when I hear stories like this?

Garth, is there something you are not telling us,
like she has invented something and has loads of cash?

I can’t believe what those bastards in power get away with not allowing us to further ourselves due to their greed.

SICK!

#108 BrianT on 04.27.11 at 11:14 am

Here’s one the sheep don’t understand-here in TO our gasoline prices are up 47% YOY in US dollars. The closest major US city-Buffalo has prices up 34% YOY.

#109 bill on 04.27.11 at 11:15 am

garth can be a bit of a prick at times …..
say is that a ”O. pseudofossulatus ” or is it a ”Oreocereus maximus”
just wondered..

#110 AG Sage on 04.27.11 at 11:23 am

>#28 MP on 04.26.11 at 10:00 pm

China (currently horrifically inefficient) is going to have to make some serious fixes to the way they do business if they are still to be going gangbusters with expensive energy in 2016. Given that much of their rise is due to doling out to the manufacturers free land, cheap energy, and a blind eye to immense pollution I say, good luck to them on that.

#111 Mister Obvious on 04.27.11 at 11:31 am

#42 V Fekete

“Who in their right mind would pay a million for a little shed like this in North Toronto???? And is this realtor nuts?”

That little shed would be the bargain of the century in Vancouver. The realor is simply in the wrong city.

#112 Utopia on 04.27.11 at 11:47 am

Zip It. The word of the day. (The name of todays post).

And I would zip-it when it comes to politics but I cannot allow the moment to go by without commenting on the latest poll results and the implications for Federal system of politics.

We have a new Dance Card now. I wonder if what we are now witnessing are the circumstances that will result in the Bloc returning to the Conservative fold. Seems pretty unlikely on the surface but perhaps you have heard the old expression that “politics makes strange bedfellows”

It was never so true as it is today.

No party in this country has more legitimacy in laying claim to the Bloc and its membership than the Conservatives themselves.

In the days of Brian Mulroney we recall that the two parties were actually one and the same. The divisions were not found in real disputes over the ideals of conservatism itself though but instead found root in Quebecer’s feelings of disenfranchisement within Canada.

So now as the NDP shows considerable strength in Quebec and looks poised to defeat the old Bloc in a landslide of Orange tents we need to ask where the remnants of Quebecs blue machine might go for solace and support.

It is not a far stretch to see those two parties of the Bloc and Conservative merge again on a daily functional basis and as a force that will counter New Democrats who seek to wrap up the Quebec vote.

This is not a coalition I am suggesting but rather a merger of ideas and one that makes sense as the Conservative majority looks to be under threat simultaneous to the Bloc seeing itself extinguished.

Can the two party leaders come to an understanding that would see Quebec interests promoted without dissolving the country as a result? Can they reach an agreement that would ensure a Tory majority and the survival of Quebec’s own Blue party?

Duceppe will almost certainly have to step aside for it to work. He is far too committed to his own personal and political cause to allow a workable solution. Which is not to rule him out entirely as a strategic partner but rather to allow pride give way to cooperation.

This would have to happen quickly if Harpers Conservatives do not hit the high water mark necessary for the expected majority.

Monday should be fascinating for the country, Tuesday will be better yet. It is everything that happens in the days following the election that are really going to electrify the political scene though.

To me, it just makes perfect sense that the Bloc will team up with the Conservatives if Layton takes Quebec. It is entirely plausible too that within just a few years Canada will return to its roots as a two party system.

And the right will be made whole again.

#113 new_era on 04.27.11 at 11:56 am

Like Garth Said

One in three retirees still in debt: StatsCan report

http://winnipeg.ctv.ca/servlet/an/local/CTVNews/20110427/retirees-debt-canada-110427/20110427/?hub=WinnipegHome

#114 Utopia on 04.27.11 at 12:05 pm

#91 Throwstone to Utopia,

“Just wanted you to see that I’m not the only one holding the opinion that harper’s economic policy’s have really only amounted to a HUGE debt”
———————————————————

Actually it was the Liberals who were most demanding when it came to the stimulus program and they got what they were asking for. They supported the program in almost every way.

They voted for it too. Overwhelmingly. In fact they wanted even more stimulus than what came to the table but Mr Harper and his party drew the line for the good of the country and our finances.

So don’t you give me the same tired old line that says the Conservatives were responsible for wrecking a Liberal surplus because you obviously don’t follow politics closely enough to understand what is really going on. And don’t quote fools because I am not biting.

Got anything else for me?

I mean, have you got anything that is actually useful?

#115 BrianT on 04.27.11 at 12:08 pm

#104Cellar-The FBI has given a free pass to so many connected white collar criminals in the last 5 yrs that the reputation of the agency as a whole has been damaged permanently.

#116 BrianT on 04.27.11 at 12:10 pm

#99American-You don’t have the faintest clue what USA GDP is composed of so you can spare us your anlaysis of “fake” Chinese GDP.

#117 Nemesis on 04.27.11 at 12:19 pm

“Others only bookmark this site when they have their special underwear on…” Hon. GT

‘Nemesis’ is LIVID! How d’ya do it, GT!!?? – the AdobeFlash ‘hack’ that activated my WebCam on my last visit to ‘GreaterFool’…

Now the whole world knows about my “AdventureShorts [with Patented Coccyx Protector!]”.

‘Great’. Just ‘Great’, GT…

http://tinyurl.com/2uroy8

PS – LoveThatLeaderIllustration!!!

#118 AG Sage on 04.27.11 at 12:20 pm

>#74 Women? on 04.27.11 at 7:27 am

Suggest that if you rent for six months she can spend that time finding exactly the perfect neighborhood to buy in. It would be terrible to buy in less than the perfect neighborhood, you know.

#119 Dr. Cornwallis on 04.27.11 at 12:23 pm

Kevin,

Take a look at your own city. Your site contends there is a bubble, yet land is being developed as fast as it can be serviced – there are no regulations slowing growth. Land is a small part of the development cost. Servicing is responsible for the vast majority of land development costs, and these tend to be greater for less dense greenfield development. I get the impression demographia is just a mouthpiece for developers who want free reign to develop at will without regard to sustainability or proper planning.

#120 The InvestorsFriend on 04.27.11 at 12:32 pm

Brian T at 106 said:

Here’s one the sheep don’t understand-here in TO our gasoline prices are up 47% YOY in US dollars. The closest major US city-Buffalo has prices up 34% YOY.

Brian, I suspect that is because only a portion of the costs to bring the gas to your tank atr in U.S. dollass (the crude cost)

Costs for refining are largely paid in Canadian dollars, also for tranportation, retailing costs, and all the taxes. There is no reason to think those costs should reduce as the U.S. dollar rises. So, what is your point?

Some of us are not sheep. We are instead go getters. We go out and get things in life. We are not professional whiners. Are you?

#121 Utopia on 04.27.11 at 12:46 pm

If anyone out there has not yet grasped that this election is really about Quebec and its inclusion in the central policy and decision making processes of our country then you are just not paying attention.

It is all about Quebec this time around. They will decide.

#122 GregW, Oakville on 04.27.11 at 12:51 pm

Hi Garth, Some off topic articles 5, that you and others may find interesting.

Chernobyl, 25 Years Later
The challenges of that crisis are the same Fukushima presents. By William Sweet / April 26 2011
http://spectrum.ieee.org/energy/nuclear/chernobyl-25-years-later

The World’s Tiniest Camera
Soon medical cameras will be as small as grains of sand–and almost as cheap
http://spectrum.ieee.org/podcast/at-work/innovation/the-worlds-tiniest-camera

Acoustic Energy Harvesters Gaining Volume
So far, harvesters can get milliwatts of electricity from sound. That might be enough for some things
By Lucas Laursen / April 26, 2011
http://spectrum.ieee.org/consumer-electronics/gadgets/acoustic-energy-harvesters-gaining-volume

Earthquakes Hinder Green Energy Plans
Quakes slow geothermal energy, hydropower, and carbon sequestration projects
By Peter Fairley / April 2011
http://spectrum.ieee.org/green-tech/geothermal-and-tidal/earthquakes-hinder-green-energy-plans

Bits of History
Artifacts from the first 2000 years of computing at the Computer History Museum
By Joseph Calamia / May 2011
http://spectrum.ieee.org/at-work/education/bits-of-history

#123 Oversized Shoes on 04.27.11 at 1:01 pm

Re: Utopia

Your remarks about the NDP – take a chapter out of the Bob Rae Days in Ontario – how the “people’s party” introduced that very loved clause in the (redrafted)Constitution that allowed for the legal “Affirmative Action”….. What a perfect way to unite all citizens, finding a job is tough enough, lets now add another hurdle for any white male that his application will be based on the quota system … Gotta Love This Country **

Jackie’s wife, who is asian (just noting) – rallied with the asian shop keeper last summer who took matters in his own hands and held captive a “supposed” shoplifter. Why was she on the steps on City Hall with him – was she supporting the average man, or a more ethnic correlation – your guess is as good as mine!

Jack will have large corporations pay their fair share in taxes (yeah right – that cost will be passed onto the average Canadian – get with the program Jack, businesses are only focused on appeasing the shareholders). Jack can smile and make all the promises that no one else had thought of before – he’s our saviour – god bless Jack – How can he make promises to everyone when those promises would deny others the same fairness …. grabbing barf bag – Canada is going down —- just abit faster with Jack in charge-

#124 NotAGreaterFool on 04.27.11 at 1:15 pm

Interests rates set to rise in the US.

Short Story: As it winds down stimulus, the Fed is now shifting its focus on when and how it should start boosting interest rates to prevent inflation from getting out of control. Economists think the Fed will start raising rates later this year or early next year. Higher rates would reduce borrowing and spending and make companies less inclined to boost prices.

Long Story: http://ca.finance.yahoo.com/news/Fed-signals-end-600-billion-capress-2342645882.html;_ylt=AvIJ0QcG4lq5YEFLkbg_tw5yzJpG;_ylu=X3oDMTE4cHNqazcyBHBvcwM5BHNlYwN5ZmlUb3BTdG9yaWVzBHNsawNmZWRzaWduYWxzZW4-?x=0

#125 Devore on 04.27.11 at 1:16 pm

#31⁠ The InvestorsFriend (Shawn Allen)

US housing declines are hardly over. Even over 2010 when the government continued to throw the kitchen sink at the market, and humongous inventory holdbacks by the banks, prices declined. 3.3% reverses some 4% increase, or nearly wipes out a miserly 5% downpayment. 2010 was the hump year of a double-dip. Prices will continue to slide down for years still, and even low single digit annual declines are disastrous, when everyone knows they should be going up by divine decree by 10% like in Vancouver.

#126 Alex on 04.27.11 at 1:18 pm

#87, Mr Plow: Thanks. And thanks to everyone else who’s taken the time to give me props. Appreciate it.

Yes, it did make the printed paper. Just got myself a copy today. Page A9. Takes up about a third of the page, actually. So methinks it garnered a lot of reads.

I’m a little bummed the Sun disabled reader comments for the online version. I’ve had tremendous positive feedback via email and at multiple discussion forums. Of course, those forums are all subversive, like this one. ;-)

#127 Greater Fools on 04.27.11 at 1:30 pm

http://www.youtube.com/watch?v=PTUY16CkS-k

#128 Greater Fools buy paper on 04.27.11 at 1:35 pm

People aren’t buying quantitative easing and that is why gold is going higher today.

http://www.kitco.com/charts/popup/au24hr3day.html

#129 April on 04.27.11 at 1:35 pm

#93 Young Old Fart
I couldn’t agree more.

#130 realpaul on 04.27.11 at 1:35 pm

Si senor…its official. Everyone who ‘vultured’ into the US market think they had scooped up a bargain from a ‘loser’ in a ‘opportunity of a lifetime’ addled horny greed state has lost money. The ‘double dip’ indeed has dipped below the ‘all time lows’ set two years ago.

http://money.cnn.com/2011/04/26/real_estate/february_case_shiller/index.htm?source=patrick.net&hpt=T2#cnnBody

I’ve been accused of ‘being too negative’. Funny how the truth hurts so many people. Because I focus on what is and not what the news media tells me I still have all my money. I feel horrible for being right all the time.

The ridiculous state of the media/government cabal of bullshit in Canada is mind boggling indeed. How so many people can believe that real estate can only go up when the personal debt number for FTB’s nationally is between 19 and 35 is over 180%!!!!!! ( and far higher in BC)

A single family home…remember the price / income ratio is used for SFH’s only NOT TO INCLUDE condo’s is 21 x’s earnings!!!! It may be 10x’s for condo’s but that is just statistical pap that the real whores are trying to use to misdirect you from reality !!

Millions of FTB’s in Canada are less than one percent away from being under water on their mortgages. A new majority of homeowners are lining up at ‘by appointment’ food banks and sending their kids to school hungry. Sports programs have been devastated because few can afford extra curricular activities…hockey enrollment in Ontario is down 90%%%%%%% !!!!!! Hello !!

Wonder why promises from Taliban Jack re free daycare is so appealing? Its because people are starving and they need handouts…in Canada…middle class people held prisoner inside their granite trimmed homes.

Bwahahahahahahahahahahahahahaha.

And the banks have a new product…a perpetual intrest only mortgage disguised as a ‘Wealth Builder’. OMG….Are that many people so completely stupid????

Vote for Taliban Jack…this country needs an enema…you get what you deserve.

#131 Utopia on 04.27.11 at 1:43 pm

#121 Oversized Shoes responding to Utopia

“Your remarks about the NDP – take a chapter out of the Bob Rae Days in Ontario”
———————————————————-

Sometimes I am just stating the obvious and noting the clear trend. That is the case today with my discussion of Jack Layton and the NDP.

Do not be distracted by my commentary though. I do NOT vote NDP nor do I support the madness of their platform. Not even for 3 seconds in a Leap Year (that means never).

I am as Conservative as they come in fact and am more than happy to tell anyone who asks that I believe with a certainty that a Harper majority is in the very best interests of our country.

There is no other alternative right now for a stable national government, for working towards the balancing of budgets, to ensure pro-business policies that build more employment opportunities and for ideas that are equitable and balanced for all regions of the country.

It has never been more important to express ourselves through the vote either and I strongly encourage all readers of this site to go out and make yourselves heard on Monday.

People are dying in Middle Eastern and North African Countries this morning for this one simple right. They are standing in the line of live gunfire just for the opportunity to have a say in the workings of their government while we in Canada spent our morning buying fast-food at the local drive-through. Crazy eh?

Not voting is a cop-out. If you stay home you have no rights to complain about which parties eventually take power. Only voters who actually cast ballots have any real legitimacy and a voice at the end of the day.

So, I am sorry if my comments earlier confused you but you need to understand that my only interest in an NDP surge across the country is that it will help to ensure a Conservative Majority come election day.

Vote splitting across the prairies, in the Maritimes and throughout Ontario is the ticket to success. That is why Jack is really our best friend right now. Make no mistake.

I will love Orange when it delivers Blue to Sussex drive.

#132 Devore on 04.27.11 at 1:48 pm

#94⁠ The American

You’re right about one thing: it’s all about psychology, and not fundamentals. That’s why there’s still a couple of years of downside on the way. RE will over-correct, more than you think.

#133 City Slicker on 04.27.11 at 2:04 pm

The US economy is going to crash and houses will not recover for a century. And that will affect dramatically.
Are you ready for the coming crash?

http://theeconomiccollapseblog.com/archives/american-hellholes

Gold and silver continue to rise with no stoppage in site. Thats all we need to know.

You have to stop reading those doomer sites. They eat brains. — Garth

#134 Vancouver_Bear on 04.27.11 at 2:22 pm

#265 betamax on 04.26.11 at 2:28 pm

Yep, you are right Vancouverites switched now to fish rich with Iodine-131 and Caesium-137 from Fukushima. This is the only explanation for the local insane mentality.

#135 Mr. Plow on 04.27.11 at 3:46 pm

#124 Alex

Well regardless you should be very proud, and props to the Sun as well for giving you the format. The MSM gets bashed here a lot, and they at least deserve a tip of the hat on this one.

#136 Alex on 04.27.11 at 5:01 pm

More cracks in the rapidly souring love affair betwixt the mainstream media and perpetually higher housing prices.

http://www.theglobeandmail.com/report-on-business/economy/consumer-confidence-rests-on-housing-market/article1999795/

Confounding isn’t it that, according to the article, “So many people say their costs are higher, they are making less money, their jobs aren’t secure and their investments have slumped,” yet those very same people believe the values of their homes will continue to rise.

Let’s see, nobody has money, yet my house will be worth even more tomorrow than it is today. To dream the impossible dream…

#137 BrianT on 04.27.11 at 5:05 pm

Good analysis by Smith on the bursting of the US housing bubble and the impact on middle class wealth-like Garth dwells on, if this Canadian RE bubble bursts the Canadian middle class is sunk, no ifs ands or buts http://www.zerohedge.com/article/guest-post-housing-bubble-broke-middle-class

#138 The American on 04.27.11 at 5:13 pm

At #131: Wow, what a moron.

#139 The American on 04.27.11 at 5:15 pm

At #130: Devore, real estate has already over corrected to a point that the pendulum is (slowly) swinging the other direction in many markets now.

#140 The American on 04.27.11 at 5:20 pm

At #114: BrianT, wow you are an American hater. Many have said it, but I am beginning to believe it. You’re a very angry person who should probably get some professional help. Seriously.

You post blindly and your rhetoric is unsubstantiated. This is the ultimate tell of a delusional human being. Really, get some help.

#141 BPOE on 04.27.11 at 5:21 pm

These guys shoulda bought Richmond apartments 7 years ago. Woulda made out like bandits. Gotta laugh when people start talking bubbles in VanCity. This is how it works folks. A proud homeowner lists a house for 1.5 million. A few months late another proud owner who lives down the street lists for 1.8. Now fast forward 6 months later and another proud homeowner lists for 1.7. At this point Garth and The American start pounding their fist on the table with “I told you so the market is crashing” proganda. Folks 1.5 to 1.8 minus = 300K difference in a few short months quite a HUGE return I would say, so the next listing down 100k is still healthy. You see folks nothing goes straight up. In vancouver you Buy then Up 300K down 100K Up 300 k down 100k. Buy now or be priced out forever. Just ask your renter friends. They reallly really want to be proud home owners but many as this tragedy unflods realize they are only lowly renters for life. Very sad indeed.

#142 The American on 04.27.11 at 5:24 pm

At #115: BrianT, YOUR government has knowingly allowed criminals, Triad, and filthy money in the tune of billions to enter Canada for the past decade plus, all for the sake of the need of cash funds to support ailing infrastructure. Your government’s reputation too has lost credibility permanently.

What’s your point. Governments do bad things. ALL governments do bad things. You may want to clean up the trash in your own backyard before you start pointing at your neighbor’s.

#143 Brad in Van on 04.27.11 at 5:33 pm

The American, your post 101 is AWESOME! Why is it so hard for people to see this? The world jumped on the China band wagon a handful of years ago and now they’re going to find out what it is like to get slapped with the lies they feed their own people. I, for one, will not invest in the Chinese market or funds. It is far too risky and dangerous as many are soon going to find out.

#144 The American on 04.27.11 at 5:37 pm

At #105: Kevin, I understand this came from an official report, but this is ridiculous. How would one explain Phoenix and Orlando then? Both of those cities too were some of the fastest growing populations in the country with NO restrictions on land usage, hence the incredible urban sprawl. The fundamentals this report is using are fundamentally flawed. There is no consistency with their findings.

#145 BrianT on 04.27.11 at 5:56 pm

#140Amer-Actually the case could be made that you are the real hater of America. You consistently defend the worst aspects of the USA, the very elements harming the country.

#146 April Showers on 04.27.11 at 5:59 pm

This is a nice article demonstrating the delusion that Canadians do not really expect people to assimilate here. I’ve read the bullshit of the posters saying that Canada doesn’t have expectations of everyone assimilating because we are a land of rainbows and lolipops. Of course we do not have ghetto neighbourhoods where immigrants are not fully accepted for their religious beliefs and practices.

http://tundratabloids.com/2011/02/canadian-imam-to-all-sharia-supporting-immigrants-go-back-to-the-hellhole-you-came-from.html

BrianTwat, the Canadian middle class are already sunk. Don’t you get it? We’re spent and mortgaged to the hilt and our consumer debt is some of the highest in the world. But oh, we’re conservative, right? No bubble has to pop at all. The middle class are already struggling to keep up with their payments and jobs are going away. It is O V E R.

#147 Kaganovich on 04.27.11 at 6:06 pm

Here is a short article by Mike Whitney about the state of the US economy. It is definitely worth a look if you are curious as to what lies ahead for us:

http://www.counterpunch.org/whitney04272011.html

#148 BigAl (Original) on 04.27.11 at 6:10 pm

If you’re a lazy thief who has contacts and have convinced yourself you “work hard” just because you have figured out how to make wage/salaried workers work for you, and how to gouge people while you spend your time on a Caribbean yacht with 10 hookers and doing lines of coke (while wanting to build more jails for hookers and drug users back home in Canada), you’re gonna vote blue.

#149 jess on 04.27.11 at 6:16 pm

reading this item made me wonder about the “retrofit” jets

the Boeing tanker lease

the Boeing tanker scandal, shows how lobbyists who used to work for the government can manipulate the weapons procurement process. This type of influence can cause important military funds to be used to bail out an ailing company instead of buying the best weapons for our security

http://www.truth-out.org/reducing-influence-pedaling-government-contracting/1303924362

#150 Kevin on 04.27.11 at 6:23 pm

#144 The American on 04.27.11 at 5:37 pm
Don’t blame me but according to the report both Florida and Nevada had Prescriptive Land Use Markets (significant restriction on land development, substantial government land ownership, or other significant regulations):
Significant land cost increase impacts

This could answer your questions
Demographia Residential Land & Regulation Cost Index:
2010 Ratings for 11 United States
Metropolitan Markets
http://www.demographia.com/dri-full.pdf

#151 jess on 04.27.11 at 6:25 pm

Detroit

Shrinking cities: Detroit will encourage its residents to move

April 22, 2011
Once home to nearly two million people, Detroit has become an icon of America’s post-industrial decline, claiming fewer than 750,000 residents. Nearly 80,000 homes sit empty. Tens of thousands of office buildings, factories and store fronts are abandoned. Even though the city’s boundaries are so vast that Boston, Manhattan and San Francisco could all fit inside, one-third of its space – 40 square miles – lies vacant, costing the city about nine million dollars per square mile in emergency services. On many blocks there are now only one or two families, where once there were dozens.
===========

With the city running a huge deficit, Detroit’s Mayor Dave Bing says it’s time for some big changes: He wants to rebuild Detroit by downsizing it. As part of his “Detroit Works” plan, Bing wants to move people still living in blighted areas into the city’s stronger neighborhoods. A newly streamlined city would then be connected by an improved transportation system, and empty spaces could be turned into parks or farms. A pilot program called “Live Midtown,” created in conjunction with three of the city’s large employers, is offering incentives for commuters to move into the city and help redevelop its Midtown district.

Convincing people inside the city to move will be challenging enough. But can the mayor also convince commuters to move in? Desiree Cooper reports from Detroit on these controversial plans.

http://www.pbs.org/wnet/need-to-know/video/shrinking-cities-detroit-pays-its-residents-to-move/8819/

#152 doctore on 04.27.11 at 6:53 pm

http://www.bloomberg.com/news/2011-04-27/phoenix-underwater-mortgages-show-housing-s-threat-to-recovery.html

#153 Robert Dudek on 04.27.11 at 7:05 pm

Here’s an idea for the Detroit mayor: charge tolls for entering the city from the suburbs.

#154 Oasis on 04.27.11 at 7:06 pm

hm. anyone notice how the USd continues to collapse, and precious metals continue to skyrocket? maybe tomorrow it will be different. lol.

#155 S.B. on 04.27.11 at 7:12 pm

Email from mortgage broker today:

We believe a variable rate increase is on the horizon and this one is not connected to Prime.

This will not affect Canadians that already have a mortgage but could be a significant hit to people seeking a mortgage right now.

Yesterday, FirstLine Mortgage, a CIBC Company, announced they were moving their variable rate from P-.65% to P-.40%. This 0.25% change by FirstLine was explained by their claim that variable rate mortgages carry very little profit in the current market.

We have unofficially heard the same complaint recently by several lenders. In fact, lately, a few small lenders have moved up there variable rates. But, CIBC’s FirstLine Mortgage company is the first major lender to announce this important change.

This sort of change does not happen every week. Quite the contrary, lenders will leave their variable rates discounts the same for months or even years at a time. Thus, this change represents a titanic shift in the variable rate mortgage market.

We don’t know for certain that the other major lenders will follow CIBC’s lead, but it would be very rare for CIBC to be doing it alone.

Keep in mind, as a result of the 0.25% change, the average mortgage seeker will be paying about $600 more in interest costs per year.

As a result, if you are mortgage shopping, please make sure to get your variable rate hold or pre-approvals in place now.

If you have any question please give us a call.
We are still offering a P-.9% variable rate mortgage

#156 Nostradamus Le Mad Vlad on 04.27.11 at 7:24 pm


Disgustingly gorgeous day here today, sunny, swelteringly dirty hot with smouldering skin at 15C. Brutal. Stay away fro the Smokanagan!
*
4:52 clip Fukushima — latest updates. Plus this. “This is what all children born downwind or downstream of Fukushima have to look forward to!” wrh.com. Pix are, well, different.

1:21 clip GW still making an impact (on the sun).

1:39 clip Putin gives a good speech about not using weapons all the time.

Imbalance “Specifically, the well-known Greek historian Plutarch — who died in 120 A.D. – said:

“An imbalance between rich and poor is the oldest and most fatal ailment of all republics.

“Given that the level of inequality in America today is one of the greatest in history, it is not surprising that the republic is ailing so badly.”

Airlines having tough time. Wait until consumers see $5 / L gas. 5:55 clip Obama was gas prices to match EU levels.

Libya Is the UN irrelevant again? Was it ever relevant?

Big Pharma Guess they are starting to wield their axe on natural health food stores. Great reminder to dismiss Harper and Iggy, and cancel Bill C-36.

AfPak Interesting development because of this. “On one hand, China has massive energy investments in eastern Libya and is relying on Libya and on the other hand, Russia has a large naval base in Syria and it gives it a presence in the Mediterranean, he pointed out.” This what Dad (Nostradamus Jr.) says: The US is in the process of bankrupting TROTW, mostly through wars and unrepayable debts. 10:08 clip Iraq was a lie, and so is Libya. TPTB are having fun at sheeples’ expense. Yemen Same as Libya, Bahrain, etc.

Vanity How big would you like your mansion?

Wag The Dog “Now let me get this straight: these are the same banks which love war because it causes both sides to have to borrow, using a compound interest formula for paying back the loans?” wrh.com.

Cancer New cure?

Oil This should drive the price higher.

John McCain If neocons are so passionate about installing democracy in the ME, give them rifles and sign them up for life, then bring the troops home.

0:54 clip Huge gold nugget starts gold rush.

Libya “The US, the other G-8 countries, the World Bank, IMF, BIS, and multinational corporations do not look kindly on leaders who threaten their dominance over world currency markets or who appear to be moving away from the international banking system that favors the corporatocracy. Saddam Hussein had advocated policies similar to those expressed by Qaddafi shortly before the US sent troops into Iraq.”

9/11 Why were the planes not intercepted?

#157 Tripp on 04.27.11 at 7:36 pm

#122 GregW, Oakville on 04.27.11 at 12:51 pm

“The World’s Tiniest Camera
Soon medical cameras will be as small as grains of sand”

Greg, I have been into photography for more than three decades. I doubt this will happen soon. The amount of vaporware is overwhelming nowadays. I will belive it when it hits the market. Meanwhile some people stiil think the garbage delivered by their cell is a photograph.

All the best,
Tripp

#158 ballingsford on 04.27.11 at 7:46 pm

What a load of crap posted today .
Steer clear of the Cons!

#159 Herb on 04.27.11 at 8:14 pm

(Un)realpaul,

in your ranting about the MSM’s pumping of real estate, you, of course, have considered the fact that not one newspaper, magazine, radio or TV station or network is owned by one of the unions you usually blame for everything. Rather, they are the finest corporate “capitalist” ventures responsible only to their owners and shareholders, and doing only what good businesses are supposed to do.

So if you are bothered by being force-fed real estate, sportainment and other propaganda, you might ask yourself what other blooms the unmitigated pursuit of the almighty buck might bring forth, and dampen your roundhouse condemnation of all things damnable as “socialist”.

Oh, by all means call Layton “Taliban Jack” and show that you, too, are a scoundrel hiding behind the fake patriotism Harper uses to cover a multitude of sins. You know, of course, that a year or two after Layton suggested that the Taliban would have to be consulted in search of a solution, everyone else in the alliance (except the Harper Government) was saying the same thing. And, Lord love a duck, there even was a problem in the handling of prisoners in AFG.

#160 CrowdedElevatorFartz on 04.27.11 at 8:14 pm

@ #157 Nosty
WHEN, in God’s name, do you actually have time to do anything productive when your so busy reading the paranoid drivel that you keep posting?
NO ONE but YOU reads this wacko shite!

Give it up and go back to Chernobyl for more “tanning treatment” !

#161 Eric on 04.27.11 at 8:26 pm

Only 1 person in here wants you to obey like a slave : #159 ballingsford
You know what to do then!

#162 nonplused on 04.27.11 at 10:47 pm

No worries, I am sure the author did not write his article for you. And I didn’t write my summary for you either.

#163 April Showers on 04.28.11 at 9:45 am

BrianTwat just had his ass handed to him by The American. Poor little BrianTwat. I’m with you American, BrianTwat needs heavy medication. Know that he does not represent most Canadians.

#164 betamax on 04.28.11 at 3:36 pm

Oh yah, I have an iPad too. You know they sold a few of those things, right? It’s hardly an exclusive club.

#165 Deliverator on 04.28.11 at 3:45 pm

Steer clear of the Cons indeed. No way will I vote for the Dictator Harper and his laundered Bush-style neocon agenda.