Some week. On Monday the country split politically. The party clinging to the centre was road kill. For the next three days real estate boards across Canada revealed their dirty little April secret – sales are crashing. On Thursday financial markets were clobbered and speckers spanked on fears the global economy’s running on fumes. And here people are, wondering what the hell it means.
But don’t wonder too long. It’s obvious.
Most families in Canada are no longer doing well financially. They know it. Blame it on the real estate obsession which led too many to borrow too much, and boosted home ownership to an unsustainable 70%. As the snow melted it was obvious this Spring market would be a bust – even in desperately delusional places like Vancouver, or the GTA mega-market. The middle class in Canada has rolled the dice on housing, choosing to buy into a rising market when risk was most elevated. It was a gamble untold numbers of people will lose.
The commodity rout and intense volatility on stock markets only underscores the fragility of our world. Another financial crisis could be two weeks or one terrorist attack away. People are vastly more indebted than they were in 2008. And never before has so much personal net worth been stuffed into just one asset, making us insanely undiversified.
As I have shown you this week, real estate activity is withering in Toronto, Edmonton, Calgary, Vancouver and Victoria. Sales declines of 15-20% would be serious on their own. But we are just weeks away from an entire year of it – and interest rates have not even started to rise yet.
The latest misery comes from the Okanagan. Just 18 months ago people in Kelowna, Penticton and Vernon were arguing with me that the market would never wobble, since “everybody wants to move here.” Not any more. We learned this week sales are down between 30% and 50%, and there are enough empty condos in Kelowna alone to qualify for the title of Phoenix North.
Worse, this comes with a 24.25% drop in listings. Just imagine if this was a normal Spring, when the number of homes for sale swells. Already a shrinking supply is overwhelming retreating demand.
If you can’t see all this as a presage to plopping prices, you’re blind.
We all need a place to live, of course. But unless residential real estate is being robustly bought and sold, with steadily appreciating value thanks to a predictable economy, it’s the last place to have your the bulk of your money stashed. Never, ever forget what house lust did to the American middle class, plunging them from bubble to abyss.
The numbers showed this week it’s not different here. The election proved neither are we.
But let’s end on a happy note. I bring you Drew, a free man:
Just started reading you’re blog a few weeks ago. I had already done the math and put my house on the market, but was glad to see such a brilliant and educated savant like yourself reinforce my decision.
After a month on the market, my 4bdrm house in Whitby sold last week (now have the waiver on all conditions), and I’m moving into a luxury apartment in Toronto next month. I don’t know how common my story is, but here’s the quick version: Bought in 2000 for 194K, sold in 2011 for 295K. Not a bad return on my 15K down-payment right? But a divorce in 2006 and a year of under-employment in 2009, meant refinancing twice. And over the years, new roof, furnace, windows, bathrooms, flooring, and various other small jobs… Then add all the usual agent commission, legal, moving costs… basically I’m coming out of the house with my shirt and a lesson well learned.
I’m going from an hour and 15 minute commute to a 20 minute commute, and will be living in a high-end secure building with all the bells and whistles (gym, pool, tennis, etc…) for exactly the same monthly cost, and none of the worry or stress. I’m over the moon!!
217 comments ↓
52% price gain, and Drew still lost money.
“Investments” do not work this way.
A house is not an investment.
6th
When the real estate crash/correction happens, where are all the homeowners going to go? Apartment vacancy rates in Winnipeg are very low right now. 1-2% maybe? I don’t understand how this is going to play out.
FIRST !!!( maybe 2nd or 3rd)
and Garth, I thought the 3rd last paragraph of first-timers was brilliant..
Given the recent interest rate hikes in Asia and Europe, s Mark Carney bullish to raise rates in May now with a house horney Harper government?
I just moved from Brampton to Toronto and in a condo. I rent it for 1700 and the condo is worth 450k
The owner is from abroad and 1700 just covers the mortgage and taxes and maint. If i were to buy it with 10% down, it would cost me 2400 for a 5 year fixed mortgage. so basically it would cost me 700 a month more to buy. My condo has to apprecaite 30000 in five years. Does that make sense…
If he worships paper dollar cash, he’ll be over the moon, but what aout inflation? This guy has absolutely no inflation protection. And – something you alluded to – many people are likely to have employment troubles ahead.
Not many have mentioned it, but affordable real estate (and he bought way back in 2001) might be a good inflation hedge. Key is: affordable. What’s the point of selling something you got cheap now for a small-to-none quantity of depreciating cash and a lifetime of condo bills? Maybe he still had a mortgage to pay down?
Doesn’t sound like Drew has any cash left over. He’s completely dependent on keeping his job. He has NO potential equity (in the coming years of inflation) from the now-sold cheaply-bought property.
Just management fees, elevator fees, condo fees…
Best picture for a long time, it has been such a crappy winter and dismal spring I can imagine curling up with the dog, sigh!! Oh right this is a RE blog, ok back to regularly scheduled comments.
Hey Garth – housing sale prices in the big Canadian cities (and area within commuting distance) should be expected to undershoot the mean in the near term. Realistically that sub-par return could last a decade or more.
But what is your take on small or medium town Canada? What about the Maritimes? The average house price in Moncton is less than $150,000 I think. Can’t really go down much can it?
There is now a difference of $850,000 between the average house price in Vancouver and Moncton.
Now, Moncton isn’t Vancouver and vice versa but if you take $850,000 and multiply it by your 14% investment return then an average Vancouver homeowner could retire near Moncton with an annual investment income of $119,000……… Plenty to head South for the winter.
Why aren’t westerners flocking east to take advantage of this?
Sleds scare them. — Garth
Commodity rout? It’s called a healthy correction in my books. Sales down? No big deal. Prices holding strong. Interest rates rising? Put the cards on the table and NO INTEREST RATE HIKES period end of story. It’s great Drew is happy renting. He is also single. When he decides to get in a relationship he will be out looking for a house. I’m sure the fake BPOE SFU renter will have some comments. Fake BPOE = Renter = Family Shame and Disgrace =Missed the boat bigtime = Bitter and made an UNRECOVERABLE financial mistake. The guy has no money and no hope of ever buying a HOME so comes on this blog and uses my handle = pathetic. Good luck fake BPOE keeping up with your rising rent payments in the Burnaby basement suite and student loan payments
We Canadians are living in fantasy land, thinking that real estate will appreciate forever. BTW, do you really need a tennis court in a condo facility? Seriously, just take a walk or jog because the tennis court only raises the rental cost.
canihazmortgage?
Ah, spring. At Ski Resorts spring is a time when all the dead and lost crap that was buried under the snow is revealed. Hopefully the same applies to all the icing sugar that’s been blown up peoples’ butts. Maybe finally the true picture can leak out and true panic set in.
TaxHaven: It didn’t say he bought a condo, just that he moved into one. So if he’s renting he’s way better off.
After I started reading this blog I decided that hubby and I should sell the house we bought out east. Friends and family keep asking if were going to buy out here on the west coast instead. My response is only if the perfect piece of land becomes available and it’s the perfect price which I doubt to see for many many years to come. I’d love to own a home once again but only because I never want to move and it takes a lot of work to get a piece of land producing the food I want to get off it. Until then we’ll stick it out on our rented farm.
Garth, I agree with you however I am still seeing bidding wars on properties I wouldn’t look twice at! When will it end?
BPOE
Your either being humorous, kidding or dumb.
Must read,all you have to do is convert the names from US to canadaian . http://en.wikipedia.org/wiki/United_States_housing_bubble
Ah, the Maritimes.
How I fondly remember, degree in hand and a pair of shiny new shoes, I went looking for work. And looking, and looking. For months and months. Interview after interview with privileged white-collar j*rk-offs that made certain that, after the interview, the only thing you felt was a case of inferiority.
Ah, the Maritimes- a bastion of bloated civil servants and transfer-payment-funded money-losing IT.
Call-centers for the rest of us.
I packed my 500.00 dollar Chevette and moved to Alberta. I had an interview in a day, where I was asked:
“Ya ever collect comp?”
“No.”
“Well, you don’t look like some City kid.”
And they pointed to Wabasca on the map, and sent me on my way.
It’s amazing, the number of fellow Maritimer’s I’ve met out here.
“Some week. On Monday the country split politically. The party clinging to the centre was road kill.”
Only because the PM people foolishly elected fought a campaign by spending a fortune on attack ads, with the intention of discrediting the Liberal leader. This has nothing to do with Harper’s policies or debating skills, just shameless, disgusting, crass, low blow politics. Unfortunately there are enough ignorant, gullible people in this country that voted for him out of fear
I’ve been wating to say this: Our old buddy Devil’s Advocate disappeared much too easily. A day or two of mocking by an imitator and he folded. And this from a guy who fielded more abuse than any other poster. Nah, he didn’t leave because of the imitator. He left because the market was dying and his pumping was about to be exposed for what it was – the harassment was just a face-saving excuse.
#1 T.O. Bubble Boy
That’s what a depreciating asset looks like. If it ain’t giving you income, it’s not an investment, just speculation.
This is appropriate: http://www.youtube.com/watch?v=1JJeBpO9yE4
@#10
I have absolutely no idea what the hell you are talking about. It’s like you just mashed your keyboard. Can you try that again so we can see a point?
#7 TaxHaven
What are you blabbing on about? The man bought cheap, sold at top of the market 10 years later, and after some needed repairs and renovations (remember that whole depreciating asset thing?), misc life expenses and transaction costs he gets out with his shirt and not much more. What more do you want? Do you have some suggestions for people buying today?
rent payments aren’t rising jack*ss, that is the whole point… housing prices make absolutely no sense when compared to economic rents….. rents are tied to INCOMES (also known as ability to pay) which is why housing prices will correct (and that would be a DOWNWARDS correction, since you seem to have trouble understanding fundamentals).
Realtors will be saying would you like fries with that or hello welcome to Walmart.
Sarah Daniels will be wishing for her job back at Global BC. Maybe she might get the smug smile wiped off her face.
Trades people in the construction are going to be out of work aswell. No realestate sales = very little new construction.
I can’t wait to see what happens bring on the rate increases. I want to see people squirm when they find out their stupidity has gotten them into some deep shit.
Oh I can hear the Queen song in my head ” Another one bites the dust ”
I won’t have to answer the questions anymore why I don’t own a house when these house horny ones start finding out they can’t keep up with their mortage payments.
#7 TaxHaven
No reason to think inflation is coming to residential real estate until it first comes to wages and salaries. Instead, rises in food, energy, interest rates, and the cost of government should lead to falling real estate until wages start to rise, which won’t be any time soon.
If you want inflation protection, you buy gold or resource stocks. And where would Garth see the inflation in these this week? But Garth is fairly short term in his market forecasts. It was but a correction, maybe not over yet. It will be known as the “Osama correction”.
But anyway my point is owning a house is no better than having a job in terms of inflation protection for the average Joe, unless you use a lot of leverage (i.e. a big mortgage), rates do not rise, and house prices actually go up faster than the costs of ownershp.
Hashnugs inthebong
Possibly the best blog moniker ever!
–
Spring. In spring, a young man’s thoughts turn to NHL playoffs, MLB, b-b-q’s and renting a condo, ‘coz it’s cheap to keep! Pooch is in good shape, ‘tho — lazy Sunday afternoon, and no politics.
“And here people are, wondering what the hell it means. It was a gamble untold numbers of people will lose.”
In terms of gambling, the odds of winning a jackpot are about 14 mln. to one, so buying a house as an investment sux. I guess it means there will be a plethora of (formerly) sad home-owners, who bit off more than they could chew.
*
Big Brother Tax and track all vehicles. Isn’t bloated govt. great?!
5:06 clip Vaccinations. Further evidence to avoid them. 12:19 clip Banning anti-vaccine billboards. H1N1 Side Effects.
2:18 clip China buying up US homes. 1:41 clip 2009 — CNN says US economy on verge of total collapse. It’s 2751 now. Are we nearly there yet?!
Stagnant US job prospects are dim, which doesn’t bode well for Canada. Further. “Translation: The US Government is still lying.” wrh.com.
Continuing with the silver debate, and Come Autumn is on the radar. Food Crisis Ask GS and the US Fed who is responsible. Food Prices Rise.
‘Quakes and Fukushima “The next major earthquake there will begin an extinction event.” More ‘Quakes “Earthquakes coming to United States.” NMF and SAF — depop. doubleshot.
Divide and Conquer How the NMF will be used against citizens. Fracking Hydraulic Fracturing is the correct term.
Mississippi One and Miss. Two. Isn’t the NMF somewhere around (under) here? 1:42 clip Yes indeed, the flooding is on top of the NMF. How much of a role does HAARP, or the weather-controllers have to do with the excess rain?
Audrey Tomason Anyone heard of her? “According to Ms Tomason’s “Apocalypse Equation”, the ‘sustainable population’ of our world can only be 1.5 billion human beings, as compared to the United Nations estimate of 7 billion we will reach on October 31st of this year, and the even worse figure of 10 billion estimated by 2100.” Ted Turner once said a 350 mln. populace, +/- would suffice.
Obama Don’t like opponents? Destroy ’em! Chinapaying close attention to US debt.
Beer From George Washington’s era.
Kelowna could be glimpse at what awaits rest of the country, its hitting here pretty hard. Job creation is primarily part-time & service related, mirror image of latest “stellar” jobs report in rest of country. Plenty of inventory, virtually none of it affordable from earnings perspective. City spending like good times are still rolling along, fiscal management matches that of its citizens.
Bigger question is what is going on with the banks. Foreclosures pop on the market, usually overpriced. Languish for months, minor price adjustments but never priced to sell. Many taken off the market and simply left to sit vacant, might be evidence of a building shadow inventory.
Its a mirror image of bubble era California. I’ll shoot some video of our housing insanity in Kelowna next time I have a few minutes to kill, might shock even Garth. Million dollar neighbourhood, 90% of homes sitting vacant and unloved – many of them spectacular pads with every excess. Question that needs to be answered is who will be left holding the bag, how many of these million dollar spec homes have been guaranteed by the CMHC.
By the way I heard Bin Laden’s mansion is now only worth 70% of what he paid for it… so he’s pretty deep underwater!
Thank you folks, I’ll be here all week. :)
Hey BPOE, what deranged culture do you come from? I sold and am renting with wife and 2 kids. What I made I have niw invested, the results of which will pay for my rent 3x over, provide me with a retirement capital of over $2m, yearly cash-flow of over 160k and my kid’s uni education fully funded. My family is proud and free! Where do you find disgrace and shame? Where, maybe in some moronic sub-culture? I found the boat matey…
Maybe in the next 4-5 years I will buy in a cheaper market, maybe I will move to another BPOE (and let me tell you there are SO MANY of them), it doesn’t matter. If I lost my job none of my plans change (I can live off my yearly yield)’ if I don’t I add to my investment.
What I don’t do is rent money from the bank – that’s the real shame and disgrace… I have banks paying me rent for my money… You silly little man!
In case you didn’t notice, you’re a laughing stock here… Do yourself a favor and go add comments on Re/Max wannabe mutual masturbation sites, enjoy!
What a joke you are…
Put it this way, I commute from North York, Toronto to Pickering everyday for work. I have no traffic in the morning, but I laugh at people like Drew that head into the city from Eastern cities (Pickering, Ajax, Whitby, Oshawa, etc…) The traffic JAM is unbelievable and you would have to be a heroin addict to continue that drive and keep your sanity. Just for the commute it’s worth selling. He will save massive amounts of money on gas (stop and go sucks on the wallet). Good job Drew.
I’m in a different situation, since I live in North York and work in Pickering, I will be moving out that way, Ajax or Whitby. I will most likely rent until the correction.
PS 294 K is price range for a SEMI or townhouse in that area. Can’t even get a single detached for that price. Ridiculous.
What is wrong with BPOE?
I did a Fibonacci retracement for avg house price. Considering Lowest point at 265K and highest at 570K. The first retrenchment .382 is 370K. So is avg house price going to come down from 570K to 370K ?
Hi Garth,
I have a question: I live at home right now and am in the should I buy or should I rent debate. You lay out great cases that discourage me to buy.
But I’m curious to know – if mortgages are becoming unaffordable to home owners and they opt to rent out their properties, (instead of sell, for whatever reason) what would prevent them from raising the rent to compensate for their losses? Vancouver has a yearly cap on how much rent can rise, but still… If I am going to start renting, how much of a concern should I have that rent is going to sky rocket from angry landlords who are losing to their mortgages?
I’d like to hear a conversation about this. Thanks!
Well, Fake BPOE. . . congratulations!!! You seemed to have gotten under the toll’s skin (even more than the guy in the stinky elevator). Or, is it that BPOE is finally starting to pull his head out of his ass and is frustrated by the truth. . .
6 tanned34 – “The owner is from abroad and 1700 just
covers the mortgage and taxes and maint.”
Well positive cash flow is the idea – assuming your
numbers are correct. Your rent builds the owners equity.
The risks assumed are trying to rent in a dropping rental market and losing equity in a declining resale market should he have to sell.
#gutcheck,
“When the real estate crash/correction happens, where are all the homeowners going to go?”
Here. There. Everywhere.
http://www.msnbc.msn.com/id/26776283/ns/us_news-life/t/hard-times-tent-cities-rise-across-country/
http://www.youtube.com/watch?v=CnnOOo6tRs8
http://www.disclose.tv/action/viewvideo/10336/The_Other_America__Tent_Cities_on_the_Rise/
“I imagined myself been in a tent for a vacation” said a tent city lady.
#5 Flyfisher on 05.06.11 at 10:01 pm
People naively believe that the Bank of Canada can do whatever it likes with interest rates, or that the federal government can keep rates low, even artificially low, but the reality is that there are 2, perhaps to some degree 3 very important variables that are beyond their control.
The first is the strength or weakness in the U.S. dollar (and the rest of the worlds currencies for that matter). I believe the U.S. dollar will continue its decade long slide, but there are world events that can give it temporary strength. A Japanese currency crisis is such an event and some say… predictable. Too many of us are underestimating the true damage earthquakes have had to Japan’s economy and its plausible world wide economic causal effects simply cannot be ruled out. Japanese quarterly numbers (and they will be ugly) should start coming in soon and we’ll all know how real the threat is.
The second is commodity valuations. They are partially effected (helped) by a falling U.S. dollar, true, but they are also effected by supply and demand as we all know. Again… too many of us are underestimating the Japanese fallout on both the U.S. dollar and supply and demand.
The third variable beyond Carney’s control and to some degree even the federal government is deficit spending or the pressure put on Carney’s ability to find buyers of Canada’s debt in the bond market. Remember, its not just the feds that like to borrow, its also our provinces and if recent history is any indication, we like to vote in governments that overestimate GDP growth and tax revenues, while jacking government spending 5 to 6% annually in the face of tax cuts. Apparently, as the federal election will atest, its what our democracy wants and if buyers of our debt can’t be found for fed/provincial debt, the rates go up to attract bond buyers with expected consequences to the housing industry.
Now… you are an investor of bonds (buyer of debt). Would you want to buy into governmental debt of the nation’s currency that could seriously plunge hard if the commodity of oil say drops from $100 to a more realistic $60? Yup. You need higher interest rates to negate the risk.
In short, its not just household debt that is a real estate killer (effecting affordability)… its public debt (effecting interest rates) as well and we should no longer be naive as to what it will do to the housing industry, especially under certain scenario’s (high RE/commodity valuations).
I can’t see Mark Carney raising rates until the Canadian dollar is in the low to mid 90’s and the main driver of the dollar has been high oil prices, so lets say oil drops by $20 bucks. We could see the dollar retreat to .95 – .96 cents. If it does, imports get more expensive but inflation is held in check with lower fuel costs and potentially lower housing values keeping inflation in check meaning Mark doesn’t have to raise rates for a while yet. I doubt that Mark is forced to raise rates for some time as falling housing/commodity valuations/sales will keep inflation lower, but the one thing that can force Mark Carney to raise rates is if the U.S. dollar strengthens combined with a lower loonie caused by falling commodities with the main cause being economic fallout from Japan. Readers, its not an unreasonable conclusion.
If the U.S. dollar strengthens for whatever reason… they raise rates, they end quantative easing, they get an economic rebound of some kind, a currency crisis in Japan perhaps or another earthquake hits the pac rim, or terror strikes elsewhere in the world (and it isn’t even the U.S.A. thats responsible), Chindia stumbles, debt goes ungreased in Europe, whatever the reason, it could leave the Canadian dollar flat footed and falling relative to the U.S. dollar and that would create inflation Mark would no doubt be heavily concerned with especially if commodities hit the skids at the same time shrinking the money supply forcing even greater pressure on the Canadian dollar.
If these two variables came together (shrinking money supply caused by lower commodities and stronger U.S. dollar) coupled with high fed/provincial governmental deficits forcing the Bank of Canada to attract bond investors with higher interest rates under currency pressures, Mark would then be forced to raise rates regardless of what people believe our governments can and cannot do, perhaps quite sharply (these days, they can sure run deficits as we all know) and its predictable where housing would go from there as rates rise in the face of near record valuations.
Some have dubbed it, “the perfect storm” (most especially for Canada). Rising inflation, crashing commodities, falling dollar, runaway deficits, rising interest rates, shrinking incomes, unemployment, housing bubble collapse… capitulation… yup. Doom and gloom. Its really not all that hard to imagine (with 2013 being an ugly year for Canada) and most would say, “who knew”?
You’re an idiot!!!!!
I just can’t stand all the economic doom and gloom, time for some Boney M – Daddy Cool, oh the disco days.
http://www.youtube.com/watch?v=E5gNYVia2rg&feature=related
We all have to learn: sometimes hard way, sometimes lesson need to be repeated…
Evening Garth (and fellow bloggers):
As mentioned before, I believe interest rates are going to rise as well. One question I have for you relates to the value of real estate in places like Regina, Winnipeg and Saskatoon. Given that these urban centres have experienced less volatile increases, do you see the value of housing in these cities dropping less than real estate in places like Vancouver or the GTA or about the same in terms of percentages? Secondly, should the rising cost of real estate force many people from their homes, do you suspect that there will be more rental units seeking renters as other people wrestle with the means to hang on to their house? Curious to know the nature of your thoughts…
the Phantom
“Never, ever forget what house lust did to the American middle class, plunging them from bubble to abyss.”
Though more or less correct, that’s a rather superficial analysis. In my view, the underlying foundation to the continuing destruction of the middleclass in the US is the accelerating wealth disparity over the past 20 years or so which has forced the middleclass to increasingly use debt financing to make up the shortfalls in the growth of real wages. The dot-com and realestate bubbles and ensuing crashes are symptomatic of this underling cause and will continue to be until a redistribution of wealth reverses this trend.
I believe the same is happening in Canada and, indeed, in many parts of the developed world where unrestrained, self-serving global corporatism has quietly infiltrated the political spheres and hijacked political power.
Consequently, to blame the sheeple for acting like sheeple when the odds are continuously stacked against them is a little disingenuous, methinks.
All right.
I voted NDP.
My mortgage is in arrears.
My $500K house won’t sell (5 months on market) & I owe more than its appraised for.
My wife lost her job.
I maxed my HELOC & my credit cards.
My 2009 BMW M5 is 3 months behind…
#3 gutcheck
When the real estate crash/correction happens, where are all the homeowners going to go? Apartment vacancy rates in Winnipeg are very low right now. 1-2% maybe? I don’t understand how this is going to play out.
According to CNBC there are currently 18.4 million vacant homes in the US as a result of the housing collapse. So where did all those people go? There has been a mass movement of doubling up. Grown up kids move back with their parents; parents move in with their kids; siblings and friends bunk in and share rent and it goes on. That’s where most of those people have gone and it will be much the same here. Hope y’all like close quarters.
Mr. Turner is out of touch. What numbers are you looking at. Real estate is booming and people are making millions. You seem to have a sour taste. There is no bubble and will not be. Wipe your glasses clean and smell the coffee. Canada is booming. Buy now before you get priced out. I have 2 properties I am holding onto to.
But if anyone is interested let me know i will give you a good deal. Ill even offer you a mortgage at 3%.
Garth
I am totally in favor of what you are saying I have followed you for quite some time, as matter of fact i sold my house, (way too early )which has cause me great pain with the wife, but now glad I did. The real puzzle for me, is your stance on precious metal. The best book I have read that help me figure what happening in the world, and has kept me going with my view on where the housing is heading Is called
Extraordinary Popular Delusions and the Madness Of The Crowds by Charles Mackay it is about the mania in the housing and many more that has occurred in the past, such as the Tulip Mania, a must to read.
I see the Housing market as the same as what the book describes , and the fraud in the US economy, aside from the conspiracy theories out there, I do not believe but I do know that there is 1.4 quadrillion in derivatives and basically the US is the cause, anyone hear of Blythe Masters, she is the brainchild behind the CDO that have killed the banking industry, if all the big banks were to market their assets to markets values, and not market to future worth then they would all be BANKRUPT.
So I am puzzled when you talk about precious metals, 100 of the top guys that have called the rise of gold and silver are all saying that the price is going up, and these guys have called it right from the start, and I held you in the same category as “The guys Telling the truth”
Jim Rogers, Max Keiser, Eric Sprott, Peter Schiff, Gerald Clemente, Jim Sinclair, Robert Kiyosaki, James Turk, Mike Maloney, Jay Taylor, David Morgan etc… the best read out there now is Mark Talibi from the Rolling Stone Magazine, he has three great articles about the Wall Street Frauds, I understand that not all things go up in a straight line, and you can never discount the USD and it will rally some , but the mortgage mess, the Electronic rigged trading ,Wall Street Fraud, the derivative mess, the people on food stamps, the major States basically being bankrupt, The FED buying up all the bonds, after Bill Gross, which controls the biggest bond market stop buying US treasuries just before the Japan earthquake, Japan needing to sell US treasuries to finance their damaged country, and China announcing they want to diversify 2/3 of their 3 trillion dollar treasuries?????? and that there is another 3 trillion worth of bond maturing by next fall, I ask you who is going to buy those bonds???
Please write to me and explain your views on precious metals. I bought silver after the 2008, at $7/oz but actually was charged $5 premium, and I bought gold coins, and gold producers.
I am not selling my gold or silver, because I don’t have to, and I have done well, up and down she goes but all I can see is up in the future, should I play the buy and sell game is that what you are advocating????
I have invested a good portion of my funds in good Canadian mining companies, and have followed your advice about starting a TFSA, I bought CUU at around 50 cents for my TFSA, it called a “Great Canadian Strategic Asset”, and I have other Good Canadian Juniors producers , such as Alexco, San Gold, Lakeshore gold, Ocean Gold, etc, should I sell them all, some pay me a dividend, and I do have some lottery tickets you know speculative plays like ECU, Coral Gold, Teuton, Golden Mineral, Pretium etc,
what should I do get out??? I do not need the money and I am far from retirement, but I do not know what else to do, invest in bank stock??? not after the last scam, the way I see it at least my money is going to help some start up companies that will possibly create Canadian Jobs, I know I am from Timmins Ontario, and the mining jobs are plentiful???
I am puzzled and want to understand your stance on the precious metals, should I cash out and buy Goldman Sack, AIG, etc..
gmc
Here’s a some stats on that gutcheck
[US] Census Bureau data released in September showed that the number of multifamily households jumped 11.7 percent from 2008 to 2010, reaching 15.5 million, or 13.2 percent of all households. It is the highest proportion since at least 1968, accounting for 54 million people.
http://www.nytimes.com/2010/12/29/us/29families.html
Possession was on Tues and after 2 frustrating days in trailer i started looking to rent. UGH! The dumps i saw and slumlords i met. There were one or two nice landlords, but not one place i could see myself living in for one reason or other. After a brief search i decided to ride it out in the trailer. Of course i was not looking at high end rentals but still, it is amazing how much $ people want for so little. I cannot handle paying more for rent than my mortgage was. Even at a lesser amount, it bothers me that the cash would be going to someone else? How long!?!? It’s been less than a week and I’m borderline. I really don’t know if i can wait for a few months for a correction, never mind a year.
Re # 9
They are. We have very few local buyers and the realtor folks tell us that a very large number of the buyers are those who have looked in BC and seen the folly. They can no longer get $750 for the mansion in Calgary and the $450 they are able to get can’t buy a teepee in Victoria. So what to do? They come to the South Shore of Nova Scotia here and buy a nice sea view near the golf course for $250. Never thought I’d see it. Garth is right and all those who ate the rum soaked cottencandy at the big party will now have a rotten hangover.
The popular argument, “Everybody needs a place to live,” is one of the most retarded arguments ever. Didn’t everybody need a place to live back in 2000, when prices were half of what they are now? You see the stupidity of the argument?
If you talk to a friend who is a REALTURD in Vancouver, they’ll hopefully tell you the truth of the market that Garth speaks. Within REALTURD circles, they all know the truth…
Utopia: Love your insights but have to disagree about the QE’s. We need those stock markets. There seems to be no other way. Obama drew a line in the sand. It may be that we must die for them if we have to.
Any insights for INHX, CBR and TGX? I hope Garth names some stocks in his new book. You have any cheap ones? What are we here for anyway?
Good for you Drew………good for you…
Lots of new “Sold” signs on lawns here in Halifax HRM … what does it mean? do not know because there few on new construction sites in several areas. Suspect many are moving to rentals as Condo sites have bottomed out at about 75%. Several major Ocean Fronts have “New Price” signs ….
I would not be surprised to see home ownership well above 70%… the 70% figure came from the 2006 census, no?
The current 2011 census will tell us the current number, I expect it to be higher than 70%!
I only rarely comment on the posts daily picture….but that dog lying in the flower-bed looks pretty much deceased to me. The article is called “Spring” but the picture does not say “Doggie-style” as you might expect of a hot-to-trot young pup in the romping season.
It looks like a funeral.
Oh wait,…ok, now I get it. This is about real estate sales. The dogs name is not Rover. His name is really Kelowna.
Who the hell names a dog Kelowna?
It sounds like Drew lived 10 years for free!
He bought low, sold high.
Timing is everything.
To buy RE now, is to buy high.
#42Jody-You have the right idea http://www.youtube.com/watch?v=2EvWkUuALGg
#54 Brian1
“Utopia: Love your insights…”
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Thanks Brian. Sorry, I cannot make any specific recommendations though. Those are the rules. I can however tell you what I am a fan of as long as you accept it is just my personal opinion.
I am hot for Uranium right now. The prices for Yellow-cake and many shares were knocked down hard by the issues in Japan yet the market itself has not changed.
What I mean by that is that there are just as many buyers for Uranium today as there was two months ago and demand is rising. Demand is fairly fixed. After a country spends a few billion building a reactor they do not just suddenly stop buying the basic energy inputs that are required to make it work.
In other words, demand is inelastic and it is on the rise despite news to the contrary while supply is in decline relative to new reactors coming on-stream in Asia and elsewhere. Uranium is one of the hottest buys around and a terrific long term bet in my opinion.
I am also quite bullish on Potash. Food is going to to be the one big global issue for the rest of our lives. I have no doubt that prices will steadily increase for years to come as supply is somewhat constrained by the few active mines yet demand is growing by leaps and bounds.
Production increases are mathematical while demand is exponential. Potash is also a good long term bet in my mind.
There are considerable headwinds meanwhile to a quick Silver bounce as I see it. This is all about the US Dollar showing a strengthening pattern while Oil has gone into sharp decline. The big players are shifting money back into financial assets and to many investors the US looks to be a bedrock foundation of stability compared to the rest of the world. If the dollar keeps appreciating then Silver valuations will continue to suffer and stay flat. So will Oil prices. Watch the DXY. Personally, I would not bet too big on any commodity bounces just yet.
If you are really interested in specifics though why not just talk to Garth directly? E-mail him. He often sees eye to eye with me on many investment vehicles and he is actually in the business of personal investment advice (I am not). His e-mail is somewhere on this site but I don’t see it right now.
Maybe he will post it up for those who are keen.
I met with a Veterinarian yesterday regarding implementing an employee benefits plan.
I asked how has business been since the ’08 collapse? He said it’s the weirdest thing. Through the collapse everything was humming along as usual which he found odd. Even from when things were very scary from September 2008-March 2009. Also one thing he pointed out which was extremely interesting is that he subscribes to a Veterinarian magazine which has found that sales/profits for Veterinarians have been similar whether you are in the US, and all over Canada.
So he/the magazine said everything was fine like nothing economically was unusual up until July 2010. Then business fell off dramatically. He said the findings apply for all of North America.
HST was brought in around July 2010, but the findings are North American wide which is really weird? This makes me think it is more of an inflation issue. With gas and food rising so much over the past year it’s really tapping pet owners (and the general public) out.
He said back in July 2010 business dramatically declined and is STILL declining. No bottoming yet. This is for all of Canada and the US not just a US or Ontario issue.
He said he does’t believe the talk about a so called recovery. The proof is in what people are spending on their pets.
I believe people will spend on vet bills well before they buy a new car, take a trip, etc. They are like family.
So this is very telling. So if reports are the vet biz is still declining all across Canada, I bet this is telling for the near future for Canadian real estate.
As I keep telling friends, family, and clients this economic recovery is just a money printing debt binge mirage.
#51 earlymidlifecrisis
“Possession was on Tues and after 2 frustrating days in the trailer I started looking to rent. UGH! The dumps I saw and slumlords I met. I really don’t know if I can wait for a few months for a correction, never mind a year”.
——————————————————–
And so we witness the birth of another greater fool.
So you are too good for the rental market, are you? That means you will have to buy your own digs. Realtors love your type. You have such high standards and hey,….money is no object. Right?
Don’t come back here crying later though. We won’t feel hospitable to your pampered vision of what a good deal on rental accommodation is supposed to be.
So go. Buy. You are very special obviously. Luck!
If everyone look at Drew’s case, there will never be a good time to buy a house. He came out with nothing even with a 52% gain? Home ownership is not as bad as you think if you can afford it. I bought my house back in 2003 for $300k and a 25% down. With our combined salary, my wife and I are living very comfortably. We have no plan of selling even the house was appraised at $510K. A house is not an investment but rather a place to call home.
#29-Nostradamus Le Mad Vlad-
Always a great post. Full of interesting stories with links. Thought you deserved a vote of thanks. Keep ’em coming!
Hi #29 Nostra, Thanks for the vaccine info links.
Ahhh, Kelowna, so beautiful, but so many dreamers with no cash live there.
At first glance you would think there are tons of wealthy retirees and such there. There are some, but there is also a whole underclass without a buck to their name that dream of living by the lake all year long.
Kelowna is a poor market for this reason. The wealthy boomers pony up for the mansions on the ridge and never sell it. Everyone else that has the same dream gets stuck in the condo rental market.
Word to the wise, always own any real estate in a city with a strong jobs based economy.
#49 gmc
Looks like you would not worry so much if you were not all in right now.
Sell the spikes and add on the dips but pls……diversify.
You have too many lotto tickets, do some dd and maybe you can pare off a few stock juniors. Surprise you do not own Timmins Gold.
Don’t bet the farm on purely on what Garth says, even he still owns property….diversification is key.
I am puzzled and want to understand your stance on the precious metals, should I cash out and buy Goldman Sack, AIG, etc..
gmc
__________
You want to cash out of a perfectly good investment to buy Goldman Sachs and AIG – 2 companies that are know to be broke and have huge debt. JPM is said to be vulnerable to bankrupcy when silver exceeds their stock price. They have billions of dollars in naked shorts against the silver market.
finally some good political news (Scottish independence)
http://www.telegraph.co.uk/news/uknews/scotland/scottish-politics/8499427/Scottish-Election-2011-Scotland-to-vote-on-leaving-UK-after-nationalists-surge-to-overall-majority.html
#48 bill H on 05.07.11 at 2:36 am
“Real estate is booming and people are making millions. You seem to have a sour taste. There is no bubble and will not be. Wipe your glasses clean and smell the coffee. Canada is booming. Buy now before you get priced out. I have 2 properties I am holding onto to. But if anyone is interested let me know i will give you a good deal. Ill even offer you a mortgage at 3%.”
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Translation….I have two properties that I can’t unload. I fear that I am heading under water and I am desperate to sell. So desperate in fact that I will give you a 3% mortgage myself. Please…anybody…save me.
I am going to put in a bid for Bin Laden’s condo
I think that the lead content in the walls has enough scrap value to pay for polly filla ..maybe enough for granite countertop.
If the thing ends up a leaker, I be veddy pissed off. I bitch like hell to turbaned strata council.
If they raise strata fees f#$K em
Dear Mr Obama:
Enclosed is a bill for $250,734.24 for the damage caused to our strata.
You and your military employees violated out noise bylaws,and especially the bylaw re no helicopter landings after 10:30 PM.
Your military personnel did not acquire parking passes as visitors, hence our strata wil levy a fine to you.
We don’t appreciate the projectile velocity exceeding our bylaws, as the current bylaws, in respect of local culture, is set at 2500 ft/sec.
If this is not paid, we will be forced to charge Mr Bin Laden and he will have to recover the cost from you
PS thank Allah we had durable granite countertops and vertical kevlar blinds.
Someone forgot to tell the millionaires in mainland China that the real estate market here has stalled.
Not in Richmond, ground zero. — Garth
I have a newspaper clipping from the CAPITAL NEWS, Kelowna, BC, and it depicts Harper rummaging thru his dresser drawers. He’s smiling…and while looking over his shoulder he says: ‘Laureen, have you seen my hidden agenda?”
#19 Tim,
Must suck to be you. SOOOO much anger towards one man. The election is over. Relax,move on.
As one of your Liberal friends Anne Mclellan put it “The debate is over. The DEBATE is finished. Canadians will have gun registration” or some such drivel.
Well Tim, for you, the debate over who governs Canada for the next 4 years is OVER. FINISHED, Get a dog, cat or girlfriend, get out and get some sun.
#62 C
I have veterinary clinic and revenues have fallen 30%. I’m seeing pets being abandoned. Most cases, the pet is part of family and will be “let go” when it becomes a choice of either the pet eats or the family eats.
Bad times ahead!
#26 Whistle Punk. You said “I can’t wait to see what happens bring on the rate increases. I want to see people squirm when they find out their stupidity has gotten them into some deep shit.”
LOL. Me too. Big time. I have 25 year old relatives with $350K houses, new skidoos and sports cars. How does that work??
A house is a place to call home, unless you also make it place of business and a source of income.
Couple both incorporated and work from home, live in very comfortable 1600 sqft renovated bungalow close to LRT, parks, shopping. 2 of 4 bedrooms converted to office space which the corporations pay $5k per year rental. 2/3 of basement with separate entrance converted to rental that generates additional $12k income yearly. Overall 45% of mortgage interest, taxes, insurance, utilities, maintenance are deductible annually. Income exceeds expenses to keep CRA happy and it won’t affect capital gains exemption on sale.
Its real estate with a future that pays you to live in it.
#36 Isabella
mortgages are becoming unaffordable to home owners and they opt to rent out their properties.
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Read the ads on Kijiji form these distressed home owners looking for renters to save their mortgaged butts. Its truly sad , no pets, no smoking, no guests, I`m leaving my furniture because I expect to be back and throw you out once you pay my mortgage arrears or I find a job.
A glut of empty MLS listings does not necessarily translate into plenty of house rentals, but the prices for buyers drop. Check out St. Thomas MLS that Industrial Guy was talking about yesterday. Nice town, nice weather, great prices.
This is why I will soon be moving into my new digs, Bunker version 2.0 (no mortgage) so the rent vs own calculator saves me 12K per year.
Rent from professional landlords and stay away from the distressed amateurs.
http://www.getsmarteraboutmoney.ca/tools-and-calculators/rent-vs-buy/default.aspx
Just stopped by to check out what ya all thought of those latest market stats for April… and felt compelled to respond to…
Not even remotely Trolling Tonight. The market most certainly has capitulated off its high but not nearly so much as you think. I am having to work harder and after having spent too much time trying to counteract the negativity of these forums I came to realize just how contagiously noxious an environment it is and fruitless an endeavor it is to try help you people see the light.
Garbage in garbage out. Neither I nor my clients can afford the negativity.
Negative thoughts become reality more than you know. And the negativity on this site is overwhelming.
Since my abstinence from participation on these forums, my business and life are noticably better. Not that there was a problem with them up until then but most certainly the negativity here was beginning to take a toll.
I’ve been busy working harder and avoiding such negative forums as this.
The numbers are what they are. Our new media spokesperson (Kent Jorgensen) is not one to “spin” things preferring to tell it like it is. And good on him for it.
But the numbers year to date are not so bad; Central Okanagan residential volume down 15.48% over last year, average price down 2.83% over last year and average days to sell up 16.88% over last year.
April was dismal, but you will have to wait to see if a trend comes of it. I doubt anything substantial.
People are still buying and selling. Despite volumes being down on the whole, in some parts of the city volumes are up (Okanagan Mission (Lower) Residential Sales Volume is up 25% Year To Date over last).
Lessons from Bob Farrell a legendary wall street veteran
#1. Markets tend to return to the mean over time
#2. Excesses in one direction will lead to an opposite excess in the other direction
#3. There are no new eras – excesses are never permanent
#4. Exponential rapidly rising or falling markets usually go farther than you think, but they do not correct by going sideways
#5. The public buy’s the most at the top and the least at the bottom
#6. Fear and greed are stronger than long term resolve
#7. Markets are strongest when they are broad and weakest when they narrow to a handful of blue chip names
#8. Bear markets have three stages – sharp down, reflexive rebound and a drawn out fundamental downtrend
#9. When all the experts and forecasters agree – something else is going on to happen
# 10. Bull markets are more fun than bear markets.
( no kidding )
Now do you think Garth is wrong?
Garth do you think the very low mortgage rates in Canada will have the same effect the sub-prime mortgages had in US? Why?
Already done. Teaser rates never work out well. — Garth
that is the best picture you’ve ever posted
#69 elvis.has.left.the.building
Interesting….
I have always wondered about pets as an economic indicator
However, a bit tongue in cheek.but do you watch Trailer Park Boys…
I always laughed like hell at the Boys running to the vet for bullet wounds etc…..I’ll bet that a vet could do the much of the same work of an MD
http://www.montrealgazette.com/business/fp/money/tempted+fire+sale/4741114/story.html
Dont be tempted by the USA fire sale says the Gazette
It’s not just the money – it’s a lifestyle choice too. If you like the apartment lifestyle, then go ahead. Me, I’ve lived in apartment buildings, townhomes, semis and detached.
The most miserable years of my life were in these shared buildings, the noise, the elevators, and then the semis and townhomes I couldn’t enjoy either.
I would take single detached house any day. yes it costs more, the commute is longer, but I have a high degree of privacy, and to me, that is worth a LOT. (Yes, I admit, I have personal space issues)
That said, I sold my house and am renting. (A SFH) and I wont buy at these prices.
A house is a place to live, not an investment. prices are totally out of whack with reality, and many people just look at the (current) monthly payment, not the entire debt they are taking, that must be payed back.
The Third Fundamental: Total Housing Market Value to GDP
BC in the Stratosphere by this measure
[with chart and table]
http://wp.me/pcq1o-2eE
From discussion:
Price:Rent and Price:Income ratios suggest that BC housing is two to three times overvalued. The TotalHousingValue:GDP ratio supports those conclusions and, in fact, suggests that the overvaluation may be even greater. It seems almost impossible to conceive, but this ‘third fundamental’ suggests that housing values in BC could drop by about half and we’d still be as overvalued compared to GDP at the Irish were at the beginning of their collapse!
Must suck to be you. SOOOO much anger towards one man. The election is over. Relax,move on.
As one of your Liberal friends Anne Mclellan put it “The debate is over. The DEBATE is finished. Canadians will have gun registration” or some such drivel.
—————
Must suck more to be someone like you who was ignorant enough to vote Conservative, though people like you are too simple minded to realize the long term ramifications of this govt.
This wretched weblog is now pulling 200+ comments per day. Are worried homeowners flocking to this site now, after the link is passed around in secret like a virtual joint? Psst, try this my friend said it’s the good stuff. And then we cheeched.
Respectable people trust their bankers, lawyers, and respectable friends. What could a tawdry weblog offer to them who dare visit? Unless…behind that thin veil of respectability is found a cracking façade of financial stress and withered hopes.
About 1.5% of daily visitors actually leave a comment. — Garth
Another fake BPOE,
———————————–
Nice job maing money in real estate. Another example of making big bucks over the past decade over renting. You even state your going to buy again. Let’s see how long your wife let’s you rent.
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Another fake BPOE on 05.07.11 at 12:22 am
Hey BPOE, what deranged culture do you come from? I sold and am renting with wife and 2 kids. What I made I have niw invested, the results of which will pay for my rent 3x over, provide me with a retirement capital of over $2m
grantmi
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The truth hurts eh buddy. Still bitter your renting while your buddies got rich. “UNRECOVERABLE FINANCIAL DECISION” This will be written on the tombstones of all Canadian renters
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41 grantmi on 05.07.11 at 1:54 am
#10 BPOE on 05.06.11 at 10:17 pm
Commodity rout? It’s called a healthy correction in my books. Sales down? No big deal. Prices holding strong. Interest rates rising? Put the cards on the table and NO INTEREST RATE HIKES period end of story.
You’re an idiot!!!!!
.
60 BrianT and 42 Jody
Sorry the new funk is better than the old funk…
http://www.youtube.com/watch?v=wjf3GFYSBs8
Aussie Update
Well it’s Federal budget day here very soon.
After all kinds of spending made in the name of avoiding a recession by our socialist masters over the past 4 years, its time to pay for it.
With export volumes high, its hard to believe that as a nation we are spending more than we earn. Lets face it if you can’t stick a few dollars away during the boom times when can you.
Australia is currently looking at a deficit of $51.4 billion this financial year and a $21.7bn shortfall next year.
“But the pre-budget week sales pitch could not hide the policy contradictions. The Reserve Bank signalled post-budget interest rate hikes, our super-strong dollar hit a startling post-float high of $US1.10 and our over-blown housing prices recorded their first annual deflation since the wake of the financial crisis.”
http://www.theaustralian.com.au/national-affairs/commentary/hard-work-for-swans-tough-love/story-e6frgd0x-1226051425461
If anyone is wondering how to calculate how overvalued their city is, just plug in the numbers for house price to income, house price to earnings, house price to inflation and measure this historically.
I just did Saskatoon and Saskatoon is at least 30% overvalued.
http://saskatoonhousingbubble.blogspot.com/2011/05/saskatoons-housing-market-is-at-least.html
“Already a shrinking supply is overwhelming retreating demand.”
Good sentence. But shouldn’t it read:
Already a shrinking demand is overwhelming retreating supply. ?
No. — Garth
Financial post says. housing safe. no bubble
http://business.financialpost.com/2011/05/04/on-the-bubble/
FP does not say that, a columnist does. And he does not state housing is safe, but unlikely to have a “US-style meltdown.’ Of course not. It will be a Canadian meltdown. — Garth
Why is a sales drop a concern? You are preaching of record high home ownership levels. If a record number of people now have homes of course sales are going to fall and subsequently so is demand.
Would be curious to hear a logical response to this but it is unexpected from the lowly bunch who eat up this garbage.
Cheers.
Sales declines of 15-20%
Garth you male that sound so bad.
Reality is APR sales where the second best APR on record for GTA.
The reason numbers are not going through the roof is their is no inventory, pickings are slim…..
Interest rates must be raised.
The government should not prevent the normal process of wealth transfer in the society.
Assets should be allowed to transfer freely into the hands of more efficient owners. The longer the government denies the reality the more brutal will be the end of the current political and business elites.
Basically I view current government policies as an attempt to retain the control and power in the hands of those who currently own assets. they will not be able to hold the power. Wealth will eventually be transferred to new owners. If government continue it’s policies it may still succeed inside the country, but then the country will loose on the international stage all together. We will come a full circle anyway. Wealth transfer must occur and should not be afraid of.
Interest rates must be raised. now.
Grantham heads a firm managing 100 Billion and now he has moved over to the Doomer camp-don’t expect the MSM to be trumpeting his view to the sheeple http://www.zerohedge.com/node/364721
Well…apparently i got a parking ticket for parking beyond 6 pm on a residental area in vancouver.
It’s cost $50 pay within the mnth / $100 within 2 monthes and $150 after 2 monthes
pretty harsh …parking next to a hosp . i wasn’t even near an house.
i know the city needs money badly. After the olympics…the expenditures were enormous not including the olympic/ millen… condo scandal going on now.
25-30 buyers are sueing the city for shoddy workman ship.
NOw you see the city working on all these infrastructures projects to maintain the roads/ sewer pipes which should be done in abscence of olympics.
you can also see the higher taxes now.
in case you are wondering . the last time I had a ticket wasFeb 2008 and it started at $45… topping at $100.
i ‘ll pay it … fees are getting higher and salary is about the same. my bonus this year was less $1000 than my previous 3 .
luckily i diversified and giving me better gains than the previous years…love those dividends
good luck everyone
Banks: Expensive at Every Price
Were not in the habit of making heretical statements but we believe banks are not an appropriate investment at any price for the thoughtful value investor. Let us put the case forward.
http://www.valueinstitute.org/imgdir/docs/61704_Banks_expensive_at_every_price_-_template_version.pdf
#81 Devil’s Advocate on 05.07.11 at 10:16 am
Nice to hear from you, DA. I agree with you on the negativity aspect for sure. I am also cutting out my time on this blog as well as other doomer sites. they are bad on the psyche. Garth is not as bad as others but he is definitely a spinster with an agenda.
#36 Isabella
Accidental landlords may be angry, but you cannot raise the price of something that is in abundant supply, because someone always needs money more than you, and will lower the price.
If you are in a place you like, and your landlord is raising your rent, be prepared to show evidence of rental market conditions, comparable listings from Craigslist/Kijiji, newspaper ads, rental incentives, articles and research on rental vacancies and direction of rents, etc. If he’s still raising it, or you don’t care for the place, pack up and move on. It sucks, depending on how prepared you are, but you’ll get your moving money back after a couple of months of lower rents.
In some condo buildings, where there are limits on how many units can be rented out, someone who loses a tenant may be moving to the bottom of the waiting list, and will have a vacant place for months or more.
As a renter, you are the consumer, you have the power, because you have the money. You don’t ever have to be despairing over your housing situation. Calm down and look around.
#40 Daystar
Mostly correct, except, first, Carney does not flog bonds, that’s Flaherty’s/Day’s job, second, they do not set the rates at which their, or provincial, bonds sell. The buyers do.
@#12 BPOE
Did the embolism finally pop in your brain?
Are you lying on the floor trying to text 911?
Have you pooped your pants let?
A realtors nightmare, soiled pants and a client knocking on the door……
Say Hi to the Devil when you get to where your going. I’ll eventually be down there too, in cell block “C”.
#89 Tim
The paranoia and propaganda on this blog can be suffocating.
In a year, you’ll still be able to abort your unborn baby, being gay will not be illegal, and our city streets will not turn into shooting galleries.
Get a grip already. You’re scaring the kids.
I don’t know where everyone is with their personal finances here, but I’m the only one out of my admittedly large circle of friends that is without debt. This concerns me, to say the least.
The ones who aren’t home owners average somewhere between 8 – 35 K worth of debt and the homeowners somewhere between 240 – 360 K of debt. I only have 1 friend who is an average earner for the 25-34 age group, the rest are well above average. I earn almost double what the median earner does for my age and I must admit I’ve got to be pretty tight with my finances in order to meet my savings and investment obligations.
So this tells me a few things – us 25-34 yr olds are pretty financially illiterate, and inflation is killing our earning power. CPP will likely not be there for us when we retire. Wages are stagnant and good paying jobs are few and far between. Taxes continue to rise and what we get for them continues to fall. Basically, we’re screwed.
As for the 34 – 50 year olds, well here in Calgary I can see that their $40-60K cars have bald tires on this season, they haven’t bothered to fix the ding in the bumper and registration stickers are behind. I notice this in every corner of the city, at all hours of the day.
The way I see it is that no one can REALLY afford to live the way they do, even the ‘well established’ earners.
The majority of my clients have a well educated employee base and most are high-income earners. Most people I talk to is worried as hell because they fell for the ‘home as an investment strategy’ ploy. (After a few careful questions, they usually admit it in not so many words). The homes they bought in 2000 – 2006 are falling apart because during the boom any degenerate ingrate with a hammer was allowed to put their stamp of approval on a home. They lost a healthy portion of their investments in the crash. They haven’t gotten a raise in years.
Everyone is paying debt with debt. It’s a vicious cycle that is already playing out. The cracks in the veneer of our delusional economy are showing. Underneath lies low density fiber board which cannot be recycled into anything useful due to it’s toxic content and has no intrinsic value. The best we can do is let it burn and see if it’ll keep us warm for another couple of years. That’s the state I see us in right now.
So if any of you out there have any anecdotal evidence that your circle of friends, family, clients and associates are indeed beating the norm and doing financially well (that is, positive net worth – real and not perceived); I would be interested to hear. Mostly I see poor people. Poor people with expensive houses. Poor people with expensive cars. Poor people with expensive habits, and poor people who have convinced themselves that they are rich. I don’t care who you are, if you make $500 K a year and you have a negative net worth, in my eyes you’re poor. And even if you have a magical investment that you think may do fantastic things for you, it’s not real until you have the liquid. Most people don’t.
I’m not looking forward to the next 10-20 years. Poor people are angered easily. Delusional people are angered easily, especially when they become exposed. Tax payers are easily angered when they don’t get anything for what they’ve paid. When the show is over and people realize they’re not all they’re cracked up to be, there will be nasty social implications. Garth, thanks for being a trojan horse into the castle of delusion. The process will be slow and painful for most and you must be commended for being a catalyst, you will assuredly receive heat for it.
This is going to get ugly.
#103 confused and a little crazed
I have never paid a parking ticket….
You get the notice from the collections agency…then it peters out…
It’ is not a moving violation(ie via cops………most of them are via entrapment. The technology to issue a ticket is unreal.
However, that creates so many tickets….
Courts are so clogged the due process kicks in and many thrown out.
#63 Utopia- Was that really necessary? Do you have to be nasty, or is it b/c it makes you feel better? Ive read some dickish things on here and seen some toxic postings but that ranks up there near the top. Sold or not, i lost my home. I loved my home. I cried when i handed over the keys. Living in a trailer sucks. It’s not about being pampered, it’s about being able to make tea w/o hauling water and not have to go out in the rain to do so. yeah, I’m pretty spoiled. But that must be my cold. i don’t like to be cold and wet when I’m sick. Call me a princess. Oh, and renting sucks too. I’m too much of a diva for most landlords. I had the nerve to ask a basement suite slumlord if he would put on a 2$ steel door plate around a door frame that had obviously been kicked in multiple times before. I even offered to put it on if he would pay for it. I’m just too demanding i guess. And i could NEVER see myself living in the ‘suite’ with no door. That would be like eating generic caviar. Shivers! I cant believe i wasted this much breath on you. Now if you’ll excuse me, i must get ready for lunch with the ladies who lunch.
@#70 eddy
ahhhhh yes, Scottish “independance”.
Hopefully it will happen and Quebecers will get to see what happens when “nationalists” vote to cut off the hand the feeds them.
Hmmmm Quebec and Scotland.
Lets look at the similarities shall we?
1.English isnt their 1st language.
2.They both recieve generous transfer payments from the rest of the country to subsidize their govts.
3.Their banks and or pension plans have invested elsewhere OTHER their their own “nation”.
4.They pay higher taxes than the rest of the country that they want to “leave”.
5.They mistakenly believe that “dividing a nation” is a good thing.
6.They mistakenly believe that everything (business deals,borders,import,export,currency,taxes,health care,welfare,etc.) will remain as the status quo.
7. When separation happens there will be joyous celebrating in the streets. 5 years later there will be rioting.
But enjoy the party. Say Hi to Sean Connery when he flies in from his tax haven in Spain to party with the Stone of Scone afficionados. Prepare to kneel and kiss the European Govts feet to get an EU currency.
Scotlad will become the EU’s vassal instead of Englands. Potato or PotAto?
gmc,
Garth is a walking contradiction who seemingly doesn’t understand what money is or at least won’t admit that precious metals are in fact money. Always have been, always will be. He loves FIAT and I think has his sights set on Mark Carney’s job at the Bank of Canada so has to be careful about what he says about gold and silver as money. It’s the only explanation for his contradiction, so knowledgeable about money yet so wrong about PMs.
Metals may be a storehouse of value, but they are not a medium of exchange. Hence, not money. When Loblaws and Esso accept wafers, I’ll reconsider. — Garth
@#81 DA
Good to see your still around buddy. I may not agree with what you say but at least you put some good arguements up on the blog board.
Is it raining in Kelowna? I’ve bought an ARK here in Van. :)
More bullshit from stas can….apparently the wildly inflated low rate housing stock has made us all ‘millionaires’…..Bwahahahahhahahahhahahaaa
http://business.financialpost.com/2011/05/06/canada-just-an-ordinary-millionaire-nation-eh/
First let me point out that under the rulrs of the Securities Act that real estate is not counted as ‘net worth’. This is because it is not a fungible asset. The reason the brokerage houses have to specificy that you have a ‘net worth excluding real estate’ of one million or higher ‘CASH’ dollars is because real estate is unsaleable in the event of volitility and cannot be used as security against margin debt.
This bafflegab that suddenly Canadians have become millionaires on mass is just a joke.
Fact: The government has juiced the real estate prices so as to crank up tax revenues.
Fact: Money at zero interest rates have artificially produced value measured by monthly payments not market value.
Fact: Printing money in excess of 15% p/a has made the value of the unit currency incrementally less every year since inception of easy money policy beginning in the year 2001 and inflation of all assets and commodities has occured. It simply takes more units of currency per transaction. It’s the classic story seen in Zimbabwe or Weimar Germany where people eventually have to push handcarts full of cash down to the bakery in the morning only to find they need a truckload in the afternoon.
This ‘wealth effect’ is in fact called ‘suasion’ where the government uses bullshit and psychology to persuade the citizens to look away from the fact they are being screwed and taxed up the ying yang for ‘value’ that doesn’t exist and can’t be used except to accumulate debt in the secondary market in second mortgages and ‘reverse mortgages’.
Don’t let this scam fool you….the fact that your cost of living has doubled at the same time should be the alarm bell and red light flashing……SCAM ALERT………SCAM ALERT……AAAAOOOOOOOGGGAAAAAAA…….SCAM ALERT!!!!!!!!!!!!!!
I don’t know where everyone is with their personal finances here, but I’m the only one out of my admittedly large circle of friends that is without debt. This concerns me, to say the least.
The ones who aren’t home owners average somewhere between 8 – 35 K worth of debt and the homeowners somewhere between 240 – 360 K of debt. I only have 1 friend who is an average earner for the 25-34 age group, the rest are well above average. I earn almost double what the median earner does for my age and I must admit I’ve got to be pretty tight with my finances in order to meet my savings and investment obligations.
So this tells me a few things – us 25-34 yr olds are pretty financially illiterate, and inflation is killing our earning power. CPP will likely not be there for us when we retire. Wages are stagnant and good paying jobs are few and far between. Taxes continue to rise and what we get for them continues to fall. Basically, we’re screwed.
As for the 34 – 50 year olds, well here in Calgary I can see that their $40-60K cars have bald tires on this season, they haven’t bothered to fix the ding in the bumper and registration stickers are behind. I notice this in every corner of the city, at all hours of the day.
The way I see it is that no one can REALLY afford to live the way they do, even the ‘well established’ earners.
The majority of my clients have a well educated employee base and most are high-income earners. Most people I talk to is worried as hell because they fell for the ‘home as an investment strategy’ ploy. (After a few careful questions, they usually admit it in not so many words). The homes they bought in 2000 – 2006 are falling apart because during the boom any degenerate ingrate with a hammer was allowed to put their stamp of approval on a home. They lost a healthy portion of their investments in the crash. They haven’t gotten a raise in years.
Everyone is paying debt with debt. It’s a vicious cycle that is already playing out. The cracks in the veneer of our delusional economy are showing. Underneath lies low density fiber board which cannot be recycled into anything useful due to it’s toxic content and has no intrinsic value. The best we can do is let it burn and see if it’ll keep us warm for another couple of years. That’s the state I see us in right now.
So if any of you out there have any anecdotal evidence that your circle of friends, family, clients and associates are indeed beating the norm and doing financially well (that is, positive net worth – real and not perceived); I would be interested to hear. Mostly I see poor people. Poor people with expensive houses. Poor people with expensive cars. Poor people with expensive habits, and poor people who have convinced themselves that they are rich. I don’t care who you are, if you make $500 K a year and you have a negative net worth, in my eyes you’re poor. And even if you have a magical investment that you think may do fantastic things for you, it’s not real until you have the liquid. Most people don’t.
I’m not looking forward to the next 10-20 years. Poor people are angered easily. Delusional people are angered easily, especially when they become exposed. Tax payers are easily angered when they don’t get anything for what they’ve paid. When the show is over and people realize they’re not all they’re cracked up to be, there will be nasty social implications. Garth, thanks for being a trojan horse into the castle of delusion. The process will be slow and painful for most and you must be commended for being a catalyst, as you will assuredly receive heat for it.
This is going to get ugly.
#112 earlymidlifecrisis
I missed that bit about you losing your home on first reading. I thought you sold and were just being a baby. I apologize, I was too harsh. I think I will take a holiday from posting.
#94DC-Those Whitefield guys are good, but hard to beat the old school http://www.youtube.com/watch?v=M_UWPNWQ4Pg
Since we were talking about the disaster in the Okanagan here in BC; let’s see how things are going in the “go-go” RE sector at Colorado Ski Resorts.
“It wasn’t the richest areas that saw the deepest drops. While the multimillion-dollar homes in Beaver Creek’s Bachelor Gulch and downtown Aspen’s tony West End did see 20-percent-plus declines, it was the affordable, working-class condo complexes and communities down valley from the ski areas that endured the steepest drops in value.
Nicole Miller’s Steamboat Springs-area condo dropped 30 percent in value. She paid $235,000 for the one-bedroom in 2008, and the most recent sale of a one-bedroom in her complex two months ago was for $78,000.
She calls herself lucky because she has work and can afford her mortgage. She plans to “wait it out,” she said.
“It could be five years or more before I break even, and who knows if I’ll ever make a profit,” she said. “The only thing that’s unfortunate for me is that this was my first home, and it’s supposed to serve as a steppingstone for me financially and in the real-estate market. Right now, it doesn’t look like it’s going to be either of those things.”
In Basalt, where two years ago average home prices surged above $1 million, some condos and homes saw 50-percent-plus declines in value.
“This has just hit us sideways,” said Joanie Haggerty, a 25-year broker and part owner of Basalt Realty.
For a couple of years, Basalt home prices were climbing 2 percent every month, peaking in 2007 and 2008. Last week, Haggerty sold a bank-owned Basalt condo for $240,000. In 2007, the same condo sold for $626,000″.
> Dedicated to BPOE = call your MD, and get back on your meds, we are getting worried for your sanity.
Link: http://tinyurl.com/3u2qr2w
Mickey & DA: Why don’t you two do something positive in the midst of what you call “negativity” here like do something nasty to each other.
I don’t see anything negative about the RE market going back into a more sustainable reality. There will always be work for realtors even in that environment.
Your problem is that you try to justify what is wrong with the RE market today; making it appear that it is an acceptable and sustainable reality. You know deep down that you are just about to be proven wrong. Realtors I know, for whom I have respect for, actually acknowledge the insanity that is prevalent.
Metals may be a storehouse of value, but they are not a medium of exchange. Hence, not money. When Loblaws and Esso accept wafers, I’ll reconsider. — Garth
Thanks Garth. I’m still following your posts and think they’re getting better, very entertaining. This money issue is my only beef.
Remember, the US was on a gold standard up until 1973 but didn’t mean people carried wafers, clippers and scales around to make payments, it just meant that the paper tickets and coins or dollars etcetera were redeemable in gold weight equivalent at $35/ounce.
It forces honesty, integrity in savings, real interest rates and restraint on government spending. That’s all.
And it will never happen again. — Garth
#113 Cellar Dwellar
Scotland is a lovely place…the only problem are the oatmeal savages that live there.
Regardless, never take advice from an Actor….
#116 realpaul
“More bullshit from stas can….apparently the wildly inflated low rate housing stock has made us all ‘millionaires’…..”
You’re correct, the numbers are BS. Here a year old Business Week report that show a much different picture.
Canada
162K millionaire households
http://images.businessweek.com/ss/10/06/0615_global_millionaires/12.htm
US
4,712K millionaire households
http://images.businessweek.com/ss/10/06/0615_global_millionaires/2.htm
So, on a per capita basis Canada has aprox 1/3 of the US.
Went to my daughter’s house in Milton (Ont) today. Lots of semis for sale — and lots already sold. A quick scan of mls listings shows 384 homes for sale in their immediate area. Evidently no shortage.
Anyhow my son-in-law told me that two of the closest homes to theirs sold within 1 week and two others took about 4 weeks. Seems like there’s still lots of activity around and that the average person still does not see what’s to come ahead.
#116 realpaul
And another report…
“The number of U.S. households worth at least $1 million rose to 8.4 million in 2010, compared to 7.8 million the prior year, according to a report by Spectrem Group.”
http://money.cnn.com/2011/03/16/news/economy/millionaires/index.htm
Who can you trust these days?
#117 Oldac…you’re exactly right……on the money…..this country has fallen into a delusion of ‘wealth’ premised on the accumulation of debt. I posted a break down of the stats recently that show the ‘debt/income’ number popular with the media is wildly off. In fact the largest segments of people are far more in debt overall and the fact is being hidden behind misleading ‘averages’. The 19-34 age group is 180% over their heads in debt……and single parents with one child (shudder) is carrying 227%. Real numbers get skewed down when marginalized by deceptive averaging’.
Now keep your thinking cap on….cause those numbers are also misleading…because…..they are national and ‘average’. If you’re in BC….19-34…and into real estate porn…your personal debt to income is threeeeeeeee times the national average. House costs in BC make up over 70% of total income obligation.
The real whores, government lick-asses and pimps are not your friend when it comes to telling the truth.
In fact Canadians are more debt encumbered than any G20 country…..not the ‘millionaires that the CBC would have you believe.
40 Daystar
“Some have dubbed it, “the perfect storm”
Ya true, i see it coming…
but how far away is it? 5 years?
We have a house worth a lot…can sell it for a lot. buy a new nicer house…
In T.O right now, there areb NO sellers, therefor stronge sellers market!!!
As for buyers, where the hell are the sellers!!!!!?
#116 realpaul
Oh, my god there is more different information and I stop here!
“Recently, there has been some controversy over how to correctly determine a person’s status as a millionaire. One of the two most commonly used measurements is net worth, which counts the total value of all property owned by a household minus the household’s debts. According to this definition, a household owning an $800k home, $50k of furnishings, two cars worth $60k, a $60k retirement savings account, $45k in mutual funds, and a $325k vacation home with a $250k mortgage, $40k in car loans, and $25k in credit card debt would be worth $1,085,000 (approx.) and every individual in this household would thus be a millionaire. However, according to the net financial assets measurement used for some specific applications (such as evaluating an investor’s expected tolerance for risk for stockbroker ethics), equity in one’s principal residence is excluded, as are lifestyle assets, such as the car and furniture. Therefore the above example household would only have net financial assets of $80,000. Another term used is “net investable assets” or working capital. These practitioners may use the term “millionaire” to mean somebody who is free to invest a million units of currency through them as broker. For similar reasons, those who market goods, services, and investments to high net worth individuals are careful to specify a net worth “not counting principal residence.”
In the real estate bubble up to 2007, average house prices in some U.S. regions exceeded $1 million, but many homeowners owed large amounts to banks holding mortgages on their homes. For this reason there are many people in million-dollar homes whose net worth is far short of a million—-in some cases the net worth is actually negative.
http://en.wikipedia.org/wiki/Millionaire
Speaking of property taxes: Toronto Star mentioned that Toronto cops are now the highest-paid in the country. Sunshine lists abound.
Just what do they do? According to former mayor John Sewell, writing in a community newspaper, T.O. cops respond to an average of ONE call per shift. And their shifts apparently slightly overlap, adding to the wastage of hours
If your car or home is broken into as I understand it the cops will not even come to look or gather evidence.
So just what do they do for us? We are told they are heros. The “War on Drugs” is a failure wordwide, a catch-up game of Whack-a-mole (a new dealer pops up overnight) .
Most of their shift is likely spent on revenue generation for the city (meeting their ticket quotas).
Our founding fathers would be disgusted. If your life, family or limb is in immediate danger what are you to do: put down everything, find a phone, call a nice lady and explain your situation. She will ask people to leave their donut shop or speed trap and come to your aid after driving for 10 minutes.
If you try and defend yourself in the mean time, you wil be arrested on weapons or assault charges or potentially have your house or kids taken away. This is progress? We are reduced to being helpless children of the state.
Toronto’s new highly paid local army will be loyal to the Ford Bros. who own city hall. They will defend important assets until such time as they are sold to related corporations. In these recessionary times a highly paid private army is a bonus as they wil not bite the hands that feeds them.
Poverty activists, “leftists”, and protestors of any kind will be banished from the Ford Bros’. city.
Hi Garth, I just saw my first bumble bee this year. A hopeful sine.
I wonder how the honey bees fared over the winter?
Does anyone out there know any bee keepers and if the mysterious bee die off disappearance issue is again happening this year??
I live in Penticton and I saw almost as many for sale signs as election signs. If “for sale” was a candidate, I would have voted for him. I mentioned to a few people that it will drop and I was looked at like I was a kook. Didn’t care for any of the parties so I voted for an independant. BTW. I did buy some gold and silver the last couple of years as a small investment, and I am still quite a bit ahead on both.
#120 The DPO article reminded me of the cheer easing that paper does of Colorado property. they spent a big parts of the 1990s running articles on why Denver was the best place on earth and prices were going up because everyone wanted to move there. Times have changed. Good to keep in mind if you are tempted to drink the kool-aid the current cheerleaders are pushing in places with much weaker economies.
#90 The article you pointed to actually said it was unwise to take a heloc out to buy a second home in the US (as opposed to anywhere else??). They seemed to think the $60k home in Michigan was a good rental property investment though.
Isn’t commercialism wonderful?? New concept for the term slave labour….
http://www.dailymail.co.uk/news/article-1382396/Workers-Chinese-Apple-factories-forced-sign-pledges-commit-suicide.html
You are NOT allowed to commit suicide: Workers in Chinese iPad factories forced to sign pledges
Based on today’s experience, it makes me think that the Fools are the ones who wait endlessly for a crash. In Markham, 40+ houses were sold out today, in less than half hour of opening the doors. See for yourself: http://www.pavopoint.com/appointment.php
The queue: It was 90+% Chinese, Browns – 2, Whites – 2. My friend came out empty handed. The price of a townhome is $445K+. My appointment was for tomorrow. It was cancelled, as there are no more houses to be sold.
–
#34 Randis and #48 bill H — “What is wrong with BPOE?”
Meds. Took them with a bucket of KFC Original Recipe Skin Only (no chicken), which boosted blood pressure to 5,000 / 2,500. Should be okay in a century or two. They will report back then.
#62 C — “As I keep telling friends, family, and clients this economic recovery is just a money printing debt binge mirage.”
Yep, that’s all it is — a debt mirage which is full of emptiness. To use an animal expression, “Every dog has its day.”
#65 maxx and #66 Greg W., Oakville — You betcha and thanks!
#70 eddy and #113 Cellar Dwellar — Breaking Up Is Hard To Do, but I guess pretty much everyone is breaking up. There are numerous and unexpected changes coming.
Wouldn’t surprise me at all if the four western provinces, three territories and several states ganged up together, told their respective feds. “take your country and shove it”, and decided to go solo.
#75 Daisy Mae — “Laureen, have you seen my hidden agenda?”
Only have to wait a short while and we will all receive a full dose of Harper’s agenda. The country we used to know as Canada is gone now — full of big pharma, big oil, Monsanto and bigger greed.
#116 realpaul — Interesting post. The m$m, the govt.’s puppets will pick up and drool all over this, all the while enticing sheeple into heavier debt loads but the support group (taxpayers who are debt free) can only shoulder the burden for so long. Then they crumble.
*
CC “So, even though the scientists were caught lying and cheating and manipulating the data and tried to keep anyone from checking their work, trust us; global warming is real and you all need to pay a carbon tax.” wrh.com.
Scrambled Eggs Isn’t it funny how the m$m scrambles for new excuses when their lies are pointed out for all to see?
Big Bully The US is still barking orders to other countries, even ‘tho it is a spent force and causing havoc / wars everywhere.
Axe the Tax One part of Oz has it right.
Af’stan “Flooding a country with cheap, powerful heroin can absolutely be construed as a form of asymmetric warfare. It is no accident that the heroin trade, once almost completely obliterated by the Taliban, has surged to amazing proportions after the US and NATO invasion and occupation of Afghanistan.” wrh.com.
Fannie Mae Spending taxpayer’s money like there is no tomorrow! CMHC, take note!
Tape Measure Ooops, the Navy Seals forgot it! Science “Yeah, and we heard “science proves” global warming, killer bees, Y2K, and we were all gonna die from when-pigs-fly flu, too!” wrh.com.
Obama’s Oil He is a politician. Lotsa oil. ‘Nuff sed.
Re Millionaires….
This blog is priceless….
Who cares about miilionaires…that used to mean something 20-30 years ago
Stop using the F-bomb on this site. I am wasting my time editing your comments. Now I’ll just delete. — Garth
Government bullshit on inflation revealed…in the famous ‘I can’t eat an Ipad comment.
Fed governor says Ipad 2 is twice as powerful as Ipad 1 so that means ‘inflation is under control’. Crowd is not fooled…or amused. Dig it baby………inflation is real…just ask anyone on a fixed income in a grocery store.
http://www.newsweek.com/2011/05/01/sticker-shock.html?source=patrick.net#main-search
Hedonics are bullshit.
Re Bin Laden and the tape measure
What I read is he was killed..body evacuated to a ship….did a DNA match (from his sister who died years ago in US….then dumped the body in the ocean within 24 hours to respect the culture. A CONCLUSIVE DNA test within less than 24 hours?
The US Gov’t will not release pictures
I find it hard to believe that Bin Laden, an engineer, was stupid enough to go outside given satellite and facial recognition technology.
There are conspiracies , but this is the reverse,….smells like a cover -up of incompetence.
They didn’t bury Saddam at sea….. did they ?
The whole thing already stinks….
The American would state these prices would fall. Shiller stuned by any sales. Needs graphs and charts to prove his theory. This is not reality. Buying homes IS reality. He needs to visit a multicultural country to see the demand for real estate in action
———————————————————-
GotDeceived on 05.07.11 at 7:09 pm
Based on today’s experience, it makes me think that the Fools are the ones who wait endlessly for a crash. In Markham, 40+ houses were sold out today, in less than half hour of opening the doors. See for yourself: http://www.pavopoint.com/appointment.php
The queue: It was 90+% Chinese, Browns – 2, Whites – 2. My friend came out empty handed. The price of a townhome is $445K+. My appointment was for tomorrow. It was cancelled, as there are no more houses to be sold.
.
Liked the Portugal video, but left unsaid was: we did all these great things but we screwed it up and are now completely broke. Also total silence about Salazar-now that guy was a sweetheart. And they abolished slavery 100 years before the USA, but left unsaid was they were the linchpin of the slave trade for centuries. I guess the video’s totally correct-Portuguese shite don’t stink.
#117 Oldac
The mid to late 40s crowd in my hood are in deep. This is a group of above average earners – some way above. I know of a few owing 900K and up, but more typically 250-400K. As the mortgage creeps down, the LOC creeps up. One guy I know laughed at his worried wife and said she is crazy to worry as “everyone has debt”. (Also a boat, summer home and new cars every 2 – 3 years.)
What leaves me most unsettles is the lessons they teach their kids. It is all very well to complain about increased cost of living, but to then buy each of your 3 kids a bottle of gatorade from the vending machine after every lacrosse game, rather than packing water is nuts. Don’t forget to complain about the hotel costs for the peewee hockey tournament in Kamloops. Or how junior broke another $250 stick and you warned him that if he does it again, you’ll make him use a wood one. And could someone explain why a 12 year old needs a smart phone?
#130 S.B.
If you try and defend yourself, you wil be arrested on weapons or assault charges or potentially have your house or kids taken away. This is progress? We are reduced to being helpless children of the state
Agree with you. But who is to be blamed?
I think it is us, the citizens of this country.
We think after voting (at every level of the govt. municipal, provincial and federal) that our job is done. Whereas we have to constantly hold the govt. (at every level and at all times) feet to the fire.
124 Brainsail – interesting. If you compare Canada to most other industrialized countries we are kinda average. Note the percentage of national wealth held by
these millionaire households – typically around 20%.
Now check the states – 56%. While this is in line with the percentage of all households with millionaire status being higher there, it tells us something else – the
remaining households are not nearly so wealthy.
Hey Garth,
Another place to get the message out: http://www.empireavenue.com
You can link all of your blog posts and Facebook content to aggregate at empire avenue … It’s a social media stock market basically, where your “value” (and dividends your stock pays to shareholders) on the exchange is based on your social media influence and reach.
They just introduced a Facebook app and empire avenue seemsvto be going big time. I’d buy your stock!
Greetings: Would like to share a little tid bit with you. Wifes’ Alberta Treasury Branch Mastercard has been sitting a zero balance for months now. Received letter Friday with a statement indicating they have given her a $25 credit to encourage her to use the card. She did and will 0 the balance asap. Tax free dollars to boot!!!
#89 Tim
On the contrary Tim, I am quite content with the election. It is you who is sheding tears and tasting sour grapes.
Better change that to” shedding” before Tim hits me with a Spelling citation.
Utopia (reply to your comment… last thread),
My point was that Garth makes sweeping generalizations (based on headlines from CNBC without a single fact in support) about a subject he clearly knows very little about, and you jump in line like a good little blog puppy (you drive a Hummer too?).
Even Bart Chilton, one of the five members of the CFTC (the US Commodity Futures Trading Commission) is on record discussing the fraud, corruption, and manipulation by the big players (banks) in the COMEX casino (I guess he’s just a burned out MetalHead whack job as well… lol)!
In case you’re interested in some actual facts (does Garth allow them in his little kingdom?) on the subject, here’s a link to a story and interview on CNBC just yesterday (one of many examples)…
http://www.cnbc.com/id/42930592
Even the US congress recognizes the problem, and Dodd-Frank mandated establishment of position limits on Comex Silver to contain the fraud (JP Morgan is reported to hold up to 60% of the shorts in the silver market… not much corruption there eh Garth). They were to be in place January 2011, but the banker controlled commission just thumbs their nose at the world, since the House is now controlled by the GOP (they’ve been known to support a banker or two).
And btw… I’m not crying and I didn’t lose a dime, just 20% of my > 100% profit (in 6 mths)… also, it is the Fed and the bankers that are destroying the financial system (not PM investors), and as long as they continue to flood the world with trillions of $s backed by nothing, PMs will continue to rise as a hedge against dollar devaluation (the reason the Fed and their banker dealers fight to hold it down… it’s really not that complicated if you care to spend a little time researching it… if you do, perhaps you could enlighten the proprietor of a certain non PM blog… clearly, he could use it).
Now, you guys get back to saving the world from corrupt, evil R/E brokers… oh wait, wouldn’t that be a conspiracy theory?
If you want to speculate in a casino commodity like silver, you should man up and stop whining about conspiracies. What did you expect? — Garth
#143 not to worry (at least about our freedoms) I suspect that the wheels are coming off the petroindustrial state so fast that the federal government (USA and Canada) as well as all the “law enforcement” agencies in general) will be incapable of answering their phones (cause the lines will be down) much faster than anyone suspects.
The modified hubbert curve of petroenergy depletion has “blood run cold” implications for those that can actually understand it’s implications.
#122 And it will never happen again. — Garth
Maybe…we might go straight through to basic barter and the pelt trade if the energy depletion curves are to be believed….you should really look into the probable crash rates of the Ghawar field in Saud and try and understand the EROEI ratio of the tar sands……these things are what matters far more than how much fiat the “tinker toy” economy can pump out.
#81 Devil’s Advocate on 05.07.11 at 10:16 am
Market gives you what you deserve,not what you want. There is no investment/price which can go up all the time.
If someone’s earning depend upon keeping pendulum right by external forces then do not blame gravity if external force can not keep it right.
“If you want to speculate in a casino commodity like silver, you should man up and stop whining about conspiracies. What did you expect? — Garth”
Not whining… stating facts. Last week was a take down, not a comeuppence for “Gold Bugs”… no matter how many times you and your uninformed blog puppies (you there Utopia) repeat it. The casino is in the paper speculation (Comex, SLV, etc… financed by the Fed’s insane fiscal policy btw)… investing in the metal (I also hold several of the miners) is not speculation, it’s sound financial planning at a high risk (and high maintenance… I do uderstand your typical investor doesn’t fit that profile, and it’s most likely where you’re coming from) level.
Finally, I thank you for the debate… I trust we can respectfully agree to disagree – SRV
Layton will force Harper to keep rates low because Quebec has voted NDP and Harper does not want a crisis to unfold with sovereignty. So as long as rates stay low and Canadians have jobs real estate will hold its value. That is why we dont see alot of listings. People dont have to sell as they can still make their monthly payments.
GregW, Oakville: I just saw my first bumble bee this year. A hopeful sign.
Does anyone out there know any bee keepers and if the mysterious bee die off disappearance issue is again happening this year?
Utopia: I am talking about bees of course. And they are dying off in such staggering numbers each and every year all around the world that the global food chain is now seriously compromised.
http://www.greaterfool.ca/2011/03/27/strike/comment-page-3/#comment-92357
#150SRV/Garth-Garth makes a good point (what did you expect?) All but the most fervent believers can see what is blatant at this point-the markets are getting more crooked every year-things that would have been unthinkable 20 yrs ago are now commonplace and accepted with a shrug and a comment such as “What did you expect?” So we all have to be nimble-the implications for RRSPs, TFSA and anything else are obvious.
I don’t really understand why everybody here is ganging up on BPOE. He has called it as he has seen it.
He stated that gold would go up a year ago; it did. Silver too. It did.
He has said that in the future the value of commodoties will continue to rise and that the temporary corrections we are now witnessing are part of a normal market cycle. The jury is out. But he may be right about that too.
He stated that there can’t be too many folks out in Vancouver who have rented as opposed to buying in the last 10 years that are too happy right now. He is right.
He stated that by not buying in Vancouver in the last decade, folks likely have made a financially unrecoverable mistake. Prices in Vancouver have shot up hundred of thousands of dollars in that time. So he is correct again.
People crap on him for pushing real estate as a viable investment today. But once again he is right in stating that this is an ethnically driven country where owning a house is a priority. So he is right again. Even Garth hedges his bets on real estate when he buys financially distressed properties.
I have been on this blog since day one and the one scenario that can emerge which would justify the aversion to real estate that this blog espouses is if we experienced a similar crash in prices like what the Americans experienced. Then those folks who bought at the top will be financially decimated. Renters will then look smart.
Garth states that it is a fragile world and the world economy is one terrorist attack or economic crisis away from precipitating this possibility. He is right too. But timing is everything, and for the folks that didn’y buy in the last 10 years, BPOE’s oracles on the subject are not far from reality.
I have been one of the ones on this blog that have been waiting for a crash that has never materialized. I have been thinking that prices of real estate in Canada have been unsustainable for 10 years now and I have only watched them double in value.
I pity the folks who get caught at the top of the market (prices now are crazy high), but calling a significant real correction in Canada is a once in a generation occurrence and it hasn’t materialized. So for now BPOE is closer to the truth than many of us would like to admit.
#128 CTO on 05.07.11 at 5:50 pm
40 Daystar
“Some have dubbed it, “the perfect storm”
Ya true, i see it coming…
but how far away is it? 5 years?
We have a house worth a lot…can sell it for a lot. buy a new nicer house…
In T.O right now, there areb NO sellers, therefor stronge sellers market!!!
As for buyers, where the hell are the sellers!!!!!?
#107 Devore on 05.07.11 at 1:12 pm
You are right in a sense that bond buyers set rates, but when there are so many competing to buy bonds (i.e. pent up demand that is easily met), its easy to keep rates low. Central banking from the U.S. has majorly helped create pent up demand for Canadian bonds with their own near zero rate policy, but it can’t last forever.
http://www.theprovince.com/news/decision-canada/Brosseau+admits+never+visited+Quebec+riding/4745582/story.html
–
#139 Hoof – Hearted — “They didn’t bury Saddam at sea….. did they ?”
A link posted a while back said Sadaam was nicely set up and living in either Moscow or St. Petersburg, not sure which.
ObL’s obit notice and funeral arrangements from early 2002 (he passed away in Dec. 2001) was posted as well.
There is more chance of The Wicked Witch of the West showing up for re-election in 2012. Interesting that Obama is trying to legalize all illegals.
Would this be an election ploy to buy votes? Nah, politicos are honest, hard-working people. NOT!
*
Forty Banks so far, and US unemployment higher. Headline does not make sense.
Chaos — Link In. A bunch of planets are nicely aligned! Plus this.
Soros + Paulson = Gold Differing opinions, plus Another Billionaire Rothschild.
Oil You read it here first, and Pakistan Their war with the US might not last long, as Russia and Chindia may have a say in things.
Diesel better than hybrids? Raptors “$339 million each, and now the entire fleet is grounded because the pilots cannot get enough air. Are you really sure starting WW3 is such a good idea? If you have not seen the movie “The Pentagon Wars”, now might be a good time to rent it.” wrh.com.
Humanity . . . and here I was, believing (in Einstein’s words) that nothing could be more dumbass stoopid than sheeple. Gawd, I luv being nuts — it prevents me from being ravaged by society!
The Sorcerer’s Apprentice As ObL has been officially terminated after a decade-long death spiral, alCIAQuada and the Mossad must come up with a new bogeyman, so here he is!
Guinea Pigs a.k.a. sheeple.
Crude Silver Going down for a little while, then right back up, and Lying A politicos best friend.
Believe It Or Not Five UFOs circling over Oahu, Hawaii. Eight min. clip.
Fairytales of The Toilet (alCIAQuada) and ObL.
111# Hoof hearted
Thanks for the info about parking tickets.
I have paid about 4 in the last 11 years. Disputed 2 . one was for an ambigious parking spot close to an intersection. the ticket said i was too close to the intersection but it was verry unclear where the end was becaise it was a a grass interesction. i took pictures
anyway the parking guy didn’t show up.
the second was i was phoning 911 tracking a drug out addict roaming the streets. iwas sure he was gonna get hit. some kids actually threw firecrackers at him to add to his hallucination. but when i returned to my car i had a ticket. i told judge to confirm my cell phone time of my 911 call or talk to my cell phone provider. the judged charged me 5 dollars. but voided the $45 parking fine though the parking guy did not attend, he sent a representation to present his case based of hearsay facts.
i try to be a good citizen but i understand your viewpoint and they do keep records of all the tickets/ traffic i have ever had …i guess based om my license plate. The represntative guy listed down 8 based on my entire driving records
i figure it might affect my insurance.
it has been going down even if i am already a roadstar. it went down $80 this year
BPOE, why is it you almost ALWAYS GO AFTER THE AMERICAN? He just voices the same opinions of everyone else here but in a quantifying manner. But you seem to single him out all the time. He obviously has struck a sour note with you which would lead me to believe he’s right. You wouldn’t care so much otherwise. You obsess over him and act like like an idiot! HAHAHAHAHAHHA! Yah I am laughing AT you BPOE!!!!! You act like you might even hate him so much that you are secretly in love with him. I would probably bet he doesn’t play for your team, though – you know… the team that includes a midget, peanut butter and jumper cables. You’re a real sicko, BPOE
#18 Phinny
wrote:
“Ah, the Maritimes- a bastion of bloated civil servants and transfer-payment-funded money-losing IT.”
===================================
It’s absolutely true what you say about the IT industry, and I think we’re seeing another tech bubble now.
I think the government subsidizes gaming developers’ wages around 20-25%.
Not much of the money that is generated is pumped back into the Canadian economy. I know, for instance, that all of the big 5 banks’ major IT projects are outsourced to Indian companies. The government lets in those Indian companies’ own Indian workers, then they go home.
But you’re in resource/commodity-rich Alberta. And I’m sure you had a great run money-wise up there over the last 10 years. But remember, the whole world is resource-rich, with much greater oil and other resources (Russia, ALL of Africa, South America, Western U.S), and much much cheaper labour than you. And how long do you think until the big oil companies team up with the Gov’t to import cheap, temporary foreign worker even for your work?
Remember, if that happens, it’s not personal…just business. And I’ll be the first one to up my proportion of oil stocks at that point.
#106 Devore on 05.07.11 at 1:02 pm
True, Carney doesn’t sell ’em but he has to bring in rates that are appealling to their sale for all sectors of the Canadian bond market but hey, our governments have been the biggest buyers and since the beginning of his stint as GG of the BoC, its been easy for him to please the bond markets but it won’t be so easy going forward. Still, you are right, Mark’s gig really is inflation, decided more than anything by our currency compared to the U.S. and commodity values, followed by manufacturing/housing. Near zero fed rates from the U.S. has created pent up demand for Canadian bonds in general which has been so far, easily met but that won’t last forever. And I guess Day didn’t run for the Conservatives this time ’round. (was somewhat suprised by that)
#49 gmc on 05.07.11 at 2:54 am
#128 CTO on 05.07.11 at 5:50 pm
I try not to repeat myself (which I sadly easily do) but one thing that is happening in commodities that people aren’t talking about is the simple fact of supply and demand and I see it linked to what has happened to Japan but supply in base metals, a key indicator to watch, has been building since Christmas and if the trend stays the same through the summer (when demand has been cyclically stronger), it goes without saying that commodities are priced by supply and demand and will fall accordingly. Take a quick browse through LME 5 year historical charts of base metals and readers will see what I mean.
http://www.kitcometals.com/charts/copper_historical.html
Readers should take note as well that high inflation coming out of Chindia does not bode well for commodities. The money supply in China compared to its GDP has been ultra high, creating investment in physical commodities (stockpiling, hoarding or more politely buying physical commodities such as gold bugs do with bars) as a pure commodity investment and thus, a false demand has been created…. until… the rise of… interest rates. As a result of much higher rates in Chindia, specifically China, this kind of physical investment in commodities has diverted back into financials allowing demand to be more accurately reflected which is another reason why we are seeing supply build in base metals.
Gold & Silver as most know, have been rising with the U.S. dollar’s slide for 2 reasons. For one, its priced in U.S. dollars so as the dollar slides, G & S, like all other commodities priced in U.S. dollars, rises. However… QE2 is over in June and if Japanese currency fears arise from low GDP numbers, look out, the U.S. dollar takes a major pop at Japan’s expense. And lets suppose Japan’s production doesn’t recover into the 3rd and 4th quarter… where does that leave Gold and silver? Try falling, maybe substancially depending on how hard the herd runs toward the dollar and June isn’t far away.
As for when that perfect storm’s eye hits for RE, my best guess is 2013. Thats when housing is in true meltdown and it will continue from there, albeit at a slower pace for another 3 or 4 years but between now and 2014, 2015 Canada will have a hurting economy as a result of real estate getting beat up and it has already begun by CMHC needed reg changes, but interest rates will be the true bruiser. Speculators will be the first properties listed as rates rise and upon finding out buyers just aren’t there due to even higher unaffordability from higher rates, prices will fall, listings will continue to rise and… well… whats next goes without saying.
These links below I found insightful in partially forming my views as of late.
http://www.msn.com
go to BNN money videos:
Bearish on Commodity currencies (05-04-11 10:50 am)
Canadian Housing (05-05-11 8:30 am)
“Remember, the US was on a gold standard up until 1973 but didn’t mean people carried wafers, clippers and scales around to make payments, it just meant that the paper tickets and coins or dollars etcetera were redeemable in gold weight equivalent at $35/ounce.
It forces honesty, integrity in savings, real interest rates and restraint on government spending. That’s all.
And it will never happen again. — Garth”
Ahhhhhahhaahhh…
Garth…never…..say never!
I told you all a month or so ago silver would correct
Now as it consolidates it will head higher
Gold as well…
NEVER doubt the power of the free market and
The only true money of the world Au and Ag
5000 years ….doesn’t that tell you all something?
if not then hang on tyo your RRSP’s and bonds
and paper promises!
goodnight and goodluck!
@ #81 Devil’s Advocate
This straight out of the Okanagan Real Estate Boards release for Kelowna:
… with new listings falling by 24.25% over last year (to 1,031 from 1,361) and 7.78% from last month (1,118). Overall unit sales during April dropped 32.35% compared to 2010 (to 297 from 439) and slipped 12.64% over the previous month (340 in March 2011) and saw April sales volumes totaling $109.98 million compared to $178.62 million in April 2010. Total residential units sold last month declined 31.66% (to 272 from 398 in 2010) and dipped 11% over March (306)
You’re lucky the inventories are down from last year, as Garth mentioned, otherwise sales to inventory ratio would be a lot worse.
Kelowna is finished, sell now Kelowna before its too late.
#63 Utopia’s response to #51 earlymidlifecrisis:
#63 Utopia on 05.07.11 at 8:30 am
#51 earlymidlifecrisis
“Possession was on Tues and after 2 frustrating days in the trailer I started looking to rent. UGH! The dumps I saw and slumlords I met. I really don’t know if I can wait for a few months for a correction, never mind a year”.
——————————————————–
And so we witness the birth of another greater fool.
So you are too good for the rental market, are you? That means you will have to buy your own digs. Realtors love your type. You have such high standards and hey,….money is no object. Right?
Don’t come back here crying later though. We won’t feel hospitable to your pampered vision of what a good deal on rental accommodation is supposed to be.
So go. Buy. You are very special obviously. Luck!
====================================
====================================
Utopia, I’m guessing you’re a landlord, and you’ve taken the ‘-lord’ part of the word quite literally.
Let me tell you one of the major reasons why people hate to rent – lazyass landlords.
Landlords tend to be some of the laziest people on earth who claim to call themselves ‘business’ people.
Who else has customers sign a yearly contract worth, on average $12-15K (using $1000-1250/month), and would treat them like a nuisance and a burden? To landlords, tenants are not customers – they are enemies. They think that customer service is what the tenant owes THEM.
Even the simplest repairs are generally treated with disdain – pure laziness.
They also take the ‘-lord’ in landlord way too literally, trying to include all kinds of invasive provisions in leases: I wanna enter any time I feel, you can’t have any guests, you can’t have any pets, they want to inspect all of your belongings, I’ve even known of cases where the landlord (living upstairs in a duplex) would contantly, coincidentally, enter a young girl’s rental unit (just below his) exactly when she was coming out of the shower on numerous occasions.
Many landlords couldn’t care less about the physical condition they GIVE you a rental unit at the start of a tenancy (dirty appliances, dirty walls, etc), but then at the want you to make it pristine. They’ll even promise to do necessary repairs/cleanup just to get you to sign a lease, only to have done nothing on move-in day. Then its up to you to either just clean it up yourself and bear it, or go through legal hoops with government boards/tribunal, hearings, evidence, testimony just to get out of it – and people have lives to get on with, which is what these landlords count on. All because of their laziness.
The ONLY way to fight this and not be taken advantage of is to document everything – and its really easy. First, don’t let landlords smooth-talk you into signing anything you don’t want to. Second, don’t go by ANY oral agreements/promises. A good way to document things is record ALL conversations, no matter how casual they may seem. Almost all cellphones come with a voice-recorder function, or you can buy a recorder. Just turn it on and keep it in your front pocket – they work beautifully. Most people are under the false assumption that it is illegal to record a conversation without the other person’s permission. That’s legal hogwash and only really applies to some criminal proceedings. It’s perfectly legal, and it is accepted and used at civil proceedings.
Now, Utopia, do you understand why some people are loathe to rent? For some, the premium you sometimes pay to own your own place is worth it compared to dealing with lazy, scummy, people who always have a key to your home.
Hey BPOE,
My wife and I hatched the plan we live now… RE was only a PART of how I made my money and NOT in Canada… Save your myopic retarded cultural views…
1) my wife is intelligent and equates our financial security FAR higher than home ownership
2) my wife is intelligent and equates our freedom of movement FAR higher than being cuffed by a mortgage
3) my wife is intelligent and equates living debt free as far more valuable than being in debt
So no, my simplistic friend, your stereotyping is not even close…
And judging by the comments directed to you, I have a feeling nobody is buying your bullshit…
I don’t even think you know how stupid you appear on this blog. IT IS NOT WORKING!!! Just go away!
You renters know what a RENOVICTION is? Didn’t think so. WOn;t find much talk about it here on the blog either. Folks, think long and hard before renting. There’s more to it than just a monthly cheque going up in thin air. You see folks all the “cheap rent” is a thing of the past in BPOE.
http://www.vancouversun.com/Renters+rally+protect+rights+against+unfair+evictions/4745843/story.html
@118 utopia. You’re right, i probably am being a baby. I did sell, but it feels like a huge loss. I was and am heartbroken, it was my home. The trailer is rougher than i thought, but better than my rental options. I will try to suck it up and wait. 1/2 of the problems are fixed now, 1/2 to go and getting physically better would help me gain perspective.
#81 Devil’s Advocate: “Just stopped by to check out what ya all thought of those latest market stats for April…”
What an amazing coincidence. Out of the blue, someone posts about you, and you just happen to read that one post. Someone call Ripley’s.
“But I did and do quit this site. }:-)”
Yah, you and Charlie Sheen quit cold turkey. Keep on winning with your fortune-cookie Pollyannaisms.
nice to read the level-headed comments on this blog. maybe once standards adjust we’ll all have a chance at a “normal” lifestyle! oh canada…
arctodus #151
hey doomed. Natural Gas can and will replace oil.
There’s enough NG to last 200 years or longer.
The best part is that most of it is in our own
backyard.
Stop your crying.
#62 C: “I met with a Veterinarian yesterday… …With gas and food rising so much over the past year it’s really tapping pet owners…”
—-
My wife made an observation a while back that it seemed to her that the majority of people who own pets also have very low incomes. So yeah considering that I think I would concur with your theory of rising gas and food prices making things unaffordable for many.
I also know a woman who owns a pet saloon in Oshawa and she told me a while back that her business had fallen off substantially as well. I guess people have to make cuts somewhere, and you know it’s not the beer and cigarettes that go first…
Re. Kelowna – running an MLS search for $325,000-400,000, there are 489 properties for sale within this tiny price band alone!
http://tinyurl.com/5twbael
From $200,000-325,000 there are 609 results!
From $400,000-700,000 there are 938 hits!
700k to 2 million = 427 hits.
Are 2000+ households moving to Kelowna this year to soak up the demand?
Who is the major employer in Kelowna?
BPOE
O.K. now it’s crystal clear, your an idiot.
Fear is all you have left.
#173Eagle-No offense, but that is total B/S.
To all the mothers on this site…Happy Mothers Day.
Devils Advocate,
Nice to see you drop in. Missed your point of view.
176 SB – you can sell every house in Kelowna and nobody would have to move there or leave town.
bpoe by buying a house and borrowing from the bank isn’t that renting ?
#175 pjwlk on 05.08.11 at 8:47 am
#62 C: “I met with a Veterinarian yesterday… …With gas and food rising so much over the past year it’s really tapping pet owners…”
===========
That’s why one should also be a licensed taxidemist. Either way you get your pet back
So called leading US economist can’t explain housing slump. This guy is a shill obviously.
http://republicbroadcasting.org/?p=15136
Video is good for a laugh. The written article is good and what it says does or will apply to Canada.
Recall 100-150 years ago when travelling between towns by stagecoach was a dangerous affair, with a good chance of being robbed by local thugs?
Beautiful sunny day here in the GTA (Garth Turner Area) and downtown I already spotted three of “toronto’s finest” pulling over people to take $100-300 from them, plus the resulting car insurance increase. All appeared to be middle class folks just driving around. Are we that weak, that without constant nanny state oversight we can barely drive oursevles around?
100 years ago you could buy guns, explosives and cocaine at the local store. Today all three are banned but you’d not know it: violent crime and drug use is as high as ever. This is progress? 100 years ago, did people follow your horse and buggy pulling you over for an expired horse licence, or worn out horseshoes, or for galloping too fast?
As mentioned, the Ford Bros. have armed and bought their priavate revenue generation union police army – say I though the NDPee were the union thugs? Nope, the CONs know whom to pay off.
Hunker down, they know the austerity riots are coming here too, but no cuts for El Presedente’s private protection force:
http://tinyurl.com/3mw2ugh
City’s deal with the police union could blow a(nother) huge hole in the budget
Rob Ford’s critics say he made a “rookie mistake.”
The Toronto police force’s already bloated budget just ballooned a little bigger. Word is that city council and the Toronto Police Association came to an agreement that will make Hogtown’s boys in blue the highest-paid police force in Canada—a far cry from the budget freezes and/or cuts other departments are facing as Toronto gears up for budgetmageddon in the coming year. Over the next four years, local police can look forward to an 11 per cent raise, an increase Rob Ford’s critics are decrying for the ripple effect it could have on other essential services throughout the city.
And they don’t mean a little ripple. Councillors Adam Vaughan and former TTC vice-chair Joe Mihevc are the leading voices of dissent, describing the deal as a “rookie mistake” that could end up costing the city more than $50 million annually. According to yesterday’s Toronto Star:
“This is going to drive every single essential service contract in the city. The city has said it can afford to pay 3 per cent a year. Not only are the firefighters going to get it, but who else is going to now that they’re an essential service? The TTC,” said left-wing councillor Adam Vaughan.
@Big Al – The Original
Good point, there, Big Al. Nothing is permanent. If the Alberta Oil Patch collapses, I’ll adapt. The last nine years has been good, well, except for a year or so, and it’s seems to be going okay.
However, I also accept that the bottom can drop out of commodities and my wife and I will both be out of work. If that’s the case, then c’est la vie. There are no guarantees, and I’m cool with that!
THEN, I’d probably move back to the East Coast. If I’m going to be broke and destitute, might as well be amongst family.
This website has informed me when to buy, not when to sell.
Thanks.
# 130 S.B.
I was wondering if you ever were in Jail ?????
http://vreaa.wordpress.com/2011/05/07/the-third-fundamental-total-housing-market-value-to-gdp-bc-in-the-stratosphere/
The Third Fundamental: Total Housing Market Value to GDP – BC in the Stratosphere
Posted on 7 May 2011 by vreaa| 2 Comments
BC Housing Stock value: >$1 Trillion [actually, $1,043,127,129,141]
BC GDP: $191 Billion [2009]
Ratio: 5.46 to 1
sources: 2011 BC Property Assessment Notice, nfbpsh.blogspot.com 1 May 2011, and wikipedia [with hat-tip to commenter ‘GG’ at nfbpsh].
Price:Rent and Price:Income ratios suggest that BC housing is two to three times overvalued. The TotalHousingValue:GDP ratio supports those conclusions and, in fact, suggests that the overvaluation may be even greater. It seems almost impossible to conceive, but this ‘third fundamental’ suggests that housing values in BC could drop by about half and we’d still be as overvalued compared to GDP at the Irish were at the beginning of their collapse! Note, too, that the market ‘value’ of housing in BC is likely underestimated as it makes use of property assessment values and we all know that housing in Vancouver is ‘worth’ at least 25% more in current markets.
There is absolutely no doubt regarding the existence of a massive bubble.
How much more extreme can things get before we implode?
David Stockman, famous for Reagan’s trickle down theory, says Wall Street Grifters will bankrupt the USA if they are not stopped http://www.zerohedge.com/article/david-stockman-it-will-take-major-dislocation-bond-market-wake-america
@173 eaglebay:
yes, gas is in your backyard, but if you start extracting it through fraction (research that), which is the way to get most of the underground NG out, you will also get flammable tap water as a bonus. Americans already protest against that. Nobody wants to consume flammable water. Agree?
The latest misery comes from the Okanagan. Just 18 months ago people in Kelowna, Penticton and Vernon were arguing with me that the market would never wobble, since “everybody wants to move here.” Not any more. We learned this week sales are down between 30% and 50%, and there are enough empty condos in Kelowna alone to qualify for the title of Phoenix North.
How’s Devils Advocate and his super hot wife going to spin this? Kelowna really is ground zero but its only just begun. Expect prices to drop for years up there as the demographic shifts take place and the next generation of families can’t afford $1.2 mil for a lakeside tear down that was 42K in 1978.
#176 SB
According to the Okanagan Mainline Real Estate Board,
there are some 4888 homes on MLS in Kelowna as of the end of May 2011. There were 297 sales in May, giving us an inventory of some 16 and a half months at that months sales rate. This high number actually understates the problem, because Kelowna has a large number of ‘master-planned’ developments that market ‘in house’ and do not show up on MLS. In addition, there are a large number of foreclosed properties that the lenders are keeping off the market ( so-called ‘shadow inventory’ ). I am involved in the housing industry there, and I would guess that the true inventory is closer to 24 months. That is a shocking number, when one considers 5 to 6 months is a balanced market. The main industry in Kelowna recently has been housing. The scattered manufacturing and forestry jobs that remain do not come close to replacing the lost construction jobs, so folks are moving away. Kelowna in 2011 will likely see a net loss of population for the first time in decades. ‘Phoenix North’ is an apt moniker for Kelowna.
“The extreme volatility seen in the price of silver—exacerbated by tightened margin requirements—and the la large swings in the price of gold, price of oil and in certain U.S. dollar exchange rates, do not in any way change the long-term outlooks for the U.S. dollar or for the long-term hedges against a collapse in U.S. dollar purchasing power. The current markets leave open the potential for near-term jawboning (official or through market intermediaries) and government intervention (overt or covert) to encourage relative U.S. dollar strength.
Despite whatever volatility there may be, the U.S. dollar remains on track for an eventual complete collapse in a hyperinflation, and the roots of that hyperinflation remain embedded in the system. The primary hedge against losing U.S. dollar purchasing power remains physical gold (and silver), with some funds outside the U.S. dollar. As discussed in the Hyperinflation Special Report (2011), I still like the Swiss franc, Canadian dollar and Australian dollar.”
John Williams, 6 May 2011
#164 Daystar
Whoevers Day’s replacement as the president of the Treasury Board. I don’t keep up with the news.
Markets, that is buyers, set bond rates, and the central bank must keep the overnight rate within a certain range. Overnight money is a factor in the market calculation, but it’s far from a determining factor. If bond investors want higher rates, rates will go higher.
#174 Ben
What is there to comment on. We (and Garth) already have, multiple times. People want shiny appliances and granite. What did they buy? Nothing. They put down a few thousand and promised to buy some box in the future, that will look nothing like they’ve seen, at today’s inflated prices. We’ll just have to wait and see how that works out for them.
#169 BPOE
As a home owner I’ve seen large increases on every home related item over this last decade. Things such as repairs,water,cable,taxes,insurance… everything. For example, my home insurance has gone from $350 to $1050 in the last ten years, another is property taxes have gone from $1800 to $3100 ( and rising fast) Why do renters feel they should be exempt from rising cost?
Rents have not gone up that much in the last 20 years compared to rising cost.
Garth it’s hard to imagine how a nasty insecure little man such as yourself ever got elected to anything.
Your Harley and Hummer trope is lame beyond belief.
If following your advice will make me like you.
NO THANKS.
Damn, I love this blog. — Garth
#197 WestCoaster
Who says they are? They shop in the same stores you do, and pay the same taxes you pay, including property taxes indirectly.
Rents haven’t gone up much (in real terms) in the last couple of decades (and even went down in some markets), because….
…here, you ready for this?
…neither have incomes.
There’s your answer. Renting is a cashflow business. No one takes out a mortgage to pay rent. Cheap credit does not fuel higher rent prices. The world runs on credit. Consequently, everything has gone up in cost, awash in cheap money. Except wages it seems, and thus rents stay down, tracking growth in incomes.
#191 MikeT
Be informed and learn.
Shale gas is our future.
http://opinion.financialpost.com/2011/05/05/the-shale-revolution/
arctodus #151
hey doomed. Natural Gas can and will replace oil.
There’s enough NG to last 200 years or longer.
The best part is that most of it is in our own
backyard.
Stop your crying.
No crying just hard eyed look at reality bunny rabbit.
The EROEI of realistically available NG fields (not the hand clasped in prayer and dollar signs in eyes of sheeple) is not viable to support a global agroindustrial state.
I would encourage a perusal of complexity theory (ergo books by Tainter and Thomas Kuhn come to mind) to explain to the linear thinkers why they are mistaken.
When things unravel in historical context of human civilizations they tend to do so quickly in violent stairstep drops in complexity……and in the modern context we are quite literally exponential levels of complexity above what has come before (Rome, Indus River Valley, Hohokam civilizations etc)….
It seems very reasonable to assume that the steps downward in complexity will be “exponentially more violent and dramatic” than what has come before……
I honestly hope that we will magically “discover” techniques to harvest zero point energy or maybe aliens will land and hand us a viable perpetual motion technology…….
But most probably our future involves poverty, starvation, ongoing roiling warfare and ultimately the blossoming of nukes on our planets surface….
Hell we are currently trying our best to turn a significant part of north eastern alberta into a true moonscape….and loosing net energy in the entire endeavor (thanks to a very “wise” use of the NG that you think is our saviour)……
I find myself thinking about the saying from the late Douglas Adams…..when Dolphins finally leave earth ahead of it’s destruction by a spacefaring highway construction crew….they say “so long and thanks for all the fish”……
nice thought…….would it be so easy if sci fi could actually be true….
In this reality unfortunately Dolphins continue to wash up dead on the shores of the Gulf of Mexico in vast numbers….you remember…the one where technology and fiat currency “stopped” a petro gusher in 5000 feet of water………
Screw your natural gas….I’ll take dolphins any day of the week….
While she checks the real estate listings for her next house you,re going on a mad rage on a blog about the financial diversification and pros and cons of real estate. Try to relax or is your landlord selling and you have to move next month? You never know now do you
————————————————-
Another fake BPOE on 05.08.11 at 2:52 am
Hey BPOE,
My wife and I hatched the plan we live now… RE was only a PART of how I made my money and NOT in Canada… Save your myopic retarded cultural views…
1) my wife is intelligent and equates our financial security FAR higher than home ownership
2) my wife is intelligent and equates our freedom of movement FAR higher than being cuffed by a mortgage
3) my wife is intelligent and equates living debt free as far more valuable than being in debt
So no, my simplistic friend, your stereotyping is not even close…
Joseph,
Thankyou couldn’t of said it better myself. My “over the top” presentation style is to wake people up. Home ownership in Vancouver over the last 10 20 years and more has provided fantastic returns. Garth stated in the late 1990’s (early internet) about the risks investing it all in home ownership. Although a risky path away from diversification it provided incredible wealth. Owning a home in Vancouver made you rich regardless of what The American says.
Still waiting for the great stories of how renters are better off over the last 10 or 20 years. Cue cricket sounds
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
#157 Joseph [original] on 05.07.11 at 10:59 pm
I don’t really understand why everybody here is ganging up on BPOE. He has called it as he has seen it.
He stated that gold would go up a year ago; it did. Silver too. It did.
He has said that in the future the value of commodoties will continue to rise and that the temporary corrections we are now witnessing are part of a normal market cycle. The jury is out. But he may be right about that too.
He stated that there can’t be too many folks out in Vancouver who have rented as opposed to buying in the last 10 years that are too happy right now. He is right.
He stated that by not buying in Vancouver in the last decade, folks likely have made a financially unrecoverable mistake. Prices in Vancouver have shot up hundred of thousands of dollars in that time. So he is correct again.
People crap on him for pushing real estate as a viable investment today. But once again he is right in stating that this is an ethnically driven country where owning a house is a priority. So he is right again. Even Garth hedges his bets on real estate when he buys financially distressed properties.
I have been on this blog since day one and the one scenario that can emerge which would justify the aversion to real estate that this blog espouses is if we experienced a similar crash in prices like what the Americans experienced. Then those folks who bought at the top will be financially decimated. Renters will then look smart.
Garth states that it is a fragile world and the world economy is one terrorist attack or economic crisis away from precipitating this possibility. He is right too. But timing is everything, and for the folks that didn’y buy in the last 10 years, BPOE’s oracles on the subject are not far from reality.
I have been one of the ones on this blog that have been waiting for a crash that has never materialized. I have been thinking that prices of real estate in Canada have been unsustainable for 10 years now and I have only watched them double in value.
I pity the folks who get caught at the top of the market (prices now are crazy high), but calling a significant real correction in Canada is a once in a generation occurrence and it hasn’t materialized. So for now BPOE is closer to the truth than many of us would like to admit.
.
Landlords don’t control rents, renters do. If people cannot or will not pay what the landlord wants as rent, if they have options, tenants will rent someplace else. Rents are NOT determined by the landlord’s mortgage, tax and maintenance costs. Never have been, never will be.
Lots and lots and lots of for rent signs in my hood (west end of Van). Rent increases to rates that cash flow over priced condos….. keep dreamin ;-)
The only ratio that matters in real estate is the affordabilty index, which essentially measures purchasing power. In the GTA the index is at 33%.
In the last real estate crash it was 55%. Sorry folks, but we’re 40% below crash territory.
Purchasing power is directly affected by price and borrowing costs. Period.
Until a real change to this equation arises, all of the bear talk is empty.
204 RR
“Landlords don’t control rents, renters do. If people cannot or will not pay what the landlord wants as rent, if they have options, tenants will rent someplace else. Rents are NOT determined by the landlord’s mortgage, tax and maintenance costs. Never have been, never will be.”
So why dont you get together with other renters and just
say you’ll pay nothing?
Now you realize the contradiction in your statement. The “tenants will rent someplace else” means there is a “market”, a collection of buyers and sellers, who, when operating freely, will collectively set the market price.
See also comment at 38.
I just overheard two university students walking on our street (home for mothers day) talking about real estate values – the classic signal of a top !
#170 earlymidlifecrisis
You’re right…I did sell, but it feels like a huge loss. I was …heartbroken, it was my home.
———————————————————-
Hang in there Midlife and hopefully all will be well. May I apologize again for being so hard on you. I think that I had just become so combative during the election that once it ended I forgot I was still part of a community here. I am glad you called me to account to be honest. Your comments woke me up. I think a dose of humility was in order because I can be arrogant at times and sometimes unforgiving of others. That is a personal liability that I need to address. We can talk again next month if you like, for now though, I am on leave until I clear cobwebs out of my own head.
Cruising out in Richmond…….drove by a lot of those Bus Stop benches with advertising .
All the ones I could see have nothing….simply signs stating the bench was available for advertising….and this is West Richmond…HAM capital of universe.
–
A delightful day here in the Snoozekanagan It is abundantly clear that the interior of a Boston Pizza is infinitely more pleasurable than the exterior!
*
0:29 clip The Obama – Osama take-down job. Caution: A strong sense of humor is needed.
Billionaires “That one of the ultra-expensive corporate jets seen at the Arizona Airport alongside those of the other attendees is registered to a major pharmaceutical corporation should ring the alarm bells, given Bill Gates open declaration that vaccines should be used to reduce world population, and the cases where the Vaccines such as Gardasil cause sterility. Between the oil in the Gulf of Mexico, and radiation pouring into the Pacific, there simply is not enough uncontaminated food to feed all the humans on Earth. Fukushima may have been the initiating event for this gathering of the ultra-rich, to plan for depopulation.” wrh.com. Eugenics Be a eugenic and receive billions!
Libya Upping the ante, increasing the slaughter, and Libya “One has to wonder if any of these governments remember just how the Vietnam war started for the US; with ‘advisors’, and we all know just how that /emon of a military misadventure ended.” wrh.com.
1:45 clip Obama on raising the debt ceiling limit in 2006.
Tim Geithner the terrorist. Yep, it’s a dirty world.
GMO Franken Fish ‘n’ Chips With a bucket of tartar sauce, salt and vinegar (all GMO’d) for the chips!
Best Places To Live in US when / if TSHTF.. Uranus. Snuggly, nice and warm!
Phantom Jobs and Permanent Govt. Jobs? What jobs? Govt. doublespeak in its truest sense.
Uranium Gates and Buffett are bloodsuckers.
3:07 clip Fires at Fukushima, and 40C increase in temp. in less than a day.
Gas blockade in UK, and Fisticuffs between EU and UK.
The Real Hells Grannies? Einstein was right We’re all nutz!
Sex and Coffee There are only two sexes — females and neanderthals, but there is plenty of coffee. Blowing one’s nose helps.
82 Rich
but now you must include high frequency traders
“maniac” order codes
race to zero
true documentary A reconstruction of the flash crash in the U.S. financial markets on May 6, 2010
http://beta.uitzendinggemist.nl/afleveringen/1059643-money-and-speed-inside-the-black-box
========================
What Does Collateralized Loan Obligation – CLO Mean?
A special purpose vehicle (SPV) with securitization payments in the form of different tranches. Financial institutions back this security with receivables from loans. Investopedia explains Collateralized Loan Obligation – CLO
Collateralized loan obligations are the same as collateralized mortgage obligations (CMOs) except for the assets securing the obligation. CLOs allow banks to reduce regulatory capital requirements by selling large portions of their commercial loan portfolios to international markets, reducing the risks associated with lending.
#185 S.B
The majority of Civic budgets go to Public Safety ie Police and Firemen.
Police notoriously go over budgets , without even councils approval.
IMHO, the police have lots of nasty info banked on people in power…and lead them by the nose aka sign rich union contracts. Cops will even turn on their own if need be…watch ” Choir Boys” or CopLand
Politicians equate public safety with more cop tax dollar gravy suckers.
PS If you don’t believe that that’s y-o-u-r right.
Sales declines of 15-20%
for a year, year-over-year sales have declined
this is like 2006 in the US, Y-O-Y sales had declined and in certain markets prices started to decline, markets like the outskirts of LA and Miami, in June 2006, prices in most markets still were drifting higher.
Joseph: referring to BPOE: He stated that by not buying in Vancouver in the last decade, folks likely have made a financially unrecoverable mistake. Prices in Vancouver have shot up hundred of thousands of dollars in that time. So he is correct again.
In 2006, in California the overwhelming feeling was that by not buying in California in the last decade, folks likely had made a financially unrecoverable mistake. Prices in California had shot up hundred of thousands of dollars in that time.
Looking back in the US, the rate of default increases with the date the mortgage was written. That is the rate of default of mortgages written in 2005 is decidedly higher than those written in 2004. This is the evidence of 100s of thousands of mortgages.
Simply stated: if you bought in the US in 2002, chances are you’re okay but if you bought in 2008 chances are you’re not.
So here is where I think Canada and US differ. In the US prices continued to rise from 2006 to 2008 but in Canada I don’t think they will. 2011 will be the high-water-mark from sea to shining sea and the default rate will be compressed backwards. Simply stated if you bought in Canada in 2005 chances are you’re okay but if you bought in 2011 chances are you’re not.
#157 Joseph: “I don’t really understand why everybody here is ganging up on BPOE. He has called it as he has seen it.”
He makes predictions assuming past increases and near-zero interest rates will continue forever. He uses childish hyperbole like a million other tiresome trolls.
And you don’t understand why people argue with him? Really? That’s what you’re going to go with? Wow.
#198 Dyno – if you’re going to castigate someone for being nasty, then you shouldn’t exhibit that very quality yourself.
#199 Devore – well said.
This article is an interesting take on the Canadian outlook from a different perspective. The last paragraph agrees totally with Garth’s outlook vis-a-vis housing.
http://www.pattayamail.com/moneymatters/north-miss-teschmacher-due-north-3184
mad vlad you may like this one
toxin to kill bed bugs kills tourists too
http://www.bangkokpost.com/news/local/235994/lethal-bug-toxin-found-in-hotel
…”The fact traces of chlorpyrifos were found three months after Carter’s death and after the room was cleaned suggested the concentration was high.
#206 Dark Sad Monster Bunny
Having been a landlord a time or two, let me spell it out for you.
1. Rents are separated from speculation so must follow fundamentals. If you overpay buying a property on speculation, renters will not bail you out.
2. Give or take, its all about $ per square foot. Do a quick survey of the rentals in an area and you will understand what the going rate is. Hint – the rate per square foot is generally higher for smaller homes, lower for larger homes. There is also generally a “sweet spot”
3. If you are considering being a landlord, calculate the annual income you can realistically make from a property. Take that $/sf number, multiply by size of the place you would like to purchase, x 12 months/year. Now multiply this by 10. That is the highest price you should consider buying an income property for. If you are looking at a condo, subtract strata fees from that number.
4. Landlord does not get to change above 3 rules.
5. This is also a handy way to see if real estate prices are out of whack. If the cost to buy is more than 10 or 20% above what it would make sense to buy, things are out of whack. Rent.
Hope this helps.
I am BPOE, and I shall stay BPOE….
no matter what happens BPOE is BPOE
and will remain BPOE
What BPOE has said about commodities is identical to what Jim Rogers (ultra-rich dude) stated on Bloomberg and CNBC just a few days ago. He stated that he was relieved that there was a correction in silver, and hoped that it would move down to the $35 range because if it went straight up, he would dump it (irrational exuberance). The fact that there are actually corrections or fluctuations in the commodities market reflect a healthy market according to Rogers. See (Part 2) of link:
http://jimrogers1.blogspot.com/2011/05/jim-rogers-full-cnbc-interview-05-may.html
Now I would have loved for us bloggers to have been right and watched the Canadian real estate market decline in 2008 and stay on a steadily projected downward trend. All of us could have made a lot of money in the stampede to sell-off real estate. But unfortunately it didn’t happen. The market corrected. Now an uninterrupted downward trend could start tonight, but BPOE is right when he stated that those who rolled the dice a few years ago are paying a price. To those who make reference to the 2006 US real estate peak, all I can say is that if the real estate market in Canada starts going in that direction, those who bought in 2008, especially in Vancouver, can still sell their homes at a depressed price and still walk away with $50K-$100K easy. The market hasn’t gone down in the US by 32 % overnight. It has been a steady decline. Folks with the smarts have plenty of time to sell if they see the same thing developing here in Canada. As I have said before, the only ones that will really get burned are those who bought at or close to the peak. The folks that bought houses in Canada even in 2008, will do fine. Personally, I followed Garth’s cue and bought a distressed property, thereby hedging my bets and costs.